Foreign Relations of the United States, 1946, The British Commonwealth, Western and Central Europe, Volume V

740.00119 Control (Austria)/2–2646: Telegram

The United States Political Adviser for Austria (Erhardt) to the Secretary of State

top secret

Vienna, February 26, 1946—6 p.m.
[Received, February 27—9:21 a.m.]

296. Following fundamentals of Soviet policy have been consistently evident in recent meetings of Allied Council, Executive Committee, and Divisional Committees of Allied Commission:

(1) The Danube River should remain under exclusive Soviet control;

(2) German property in eastern Austria has become Soviet State Property not subject to any regulation by Austrian Government or AC;

(3) Trade and other relations with Soviet occupied or dominated countries should be exclusively under Soviet control.

Considering the vital role of the Danube as an artery of Austrian economic life, the fact that the bulk of Austria’s natural trade would be with the Danubian countries now that Germany is eliminated, and the fact that a large part of Austrian industry and other resources would become Soviet State property under the apparent Soviet interpretation of the Potsdam Agreement, if these policies were fully realized, Austria would have more the character of a dependent Soviet satellite than of a free and independent democracy. Soviet policy appears to be directed toward this end, to ensure effective Soviet control after withdrawal of Red Army.

As examples of trend lines in the pattern just sketched, in meetings of Council and Executive Committee during past month Soviet members have refused to agree to resolutions to:

(1) Invite ECITO⁵⁵ to establish office here;

(2) Order Transport Division to study need for navigation on Danube within Austria;

(3) Permit Austrian transportation officials to attend International Railway Conferences in Paris and Bern;

(4) Invite trade mission from ACC Berlin to discuss necessary emergency trade between Austria and Germany;

(5) To effect US Congressional stipulations regarding UNRRA appropriations;⁵⁶

(6) To consider data prepared for Council of Foreign Ministers regarding availability of food supplies from Hungary, Rumania and Bulgaria;

(7) Or to withhold seizure of Danube Shipping Company assets pending discussion. Companies like latter, Creditanstalt and oil industry subject to seizure on ground of Potsdam Agreement constitute the core of Austrian economic life.

Initial phases of the Western Allies’ policy in Austria coincided in principle with policy Russians who entirely ready to join with [apparent omission] denazification, demilitarization and separation from Germany. Only they now wish to carry these much further. They are pushing denazification into the realm of eradication of everything directed “against the Allies” i.e. against the Soviet Union and by analogy, against Communism. In Council meeting February 10th demilitarization took the form of a violent conflict with British over Soviet accusation that British are harboring a White Russian army and other forces hostile to Soviet Union in labor units and DP camps in British zone Austria. Soviets also imply British failing denazify thoroughly thus protecting anti-Soviet influences in Central Europe. Both afford argument for keeping large Red Army here. Having separated Austria from Germany, Russians appear content to leave it also separated from rest of outside world subject to trade only by grace of Soviet authorities either in Allied Commission or in Danubian and other Eastern European areas controlled by them.

The initial phase of Commission work went comparatively smoothly because of fairly broad agreement in principle on policies of denazification demilitarization, and separation from Germany, and of favorable Soviet attitude towards Renner Govt. During that phase fortunately the Commission accomplished successfully the internal political reconstitution of a free democratic Austria.

Commission is now entering new phase: Soviet attitude toward Figl Govt is less favorable. Western members’ policies now call for reconstruction, rehabilitation, currency stabilization and trade promotion both foreign and domestic. In these fields Soviet attitude is apathetic except where it is either directly opposed or directly interested, as, for example, in incidental flow of resources from western areas into eastern zone depleted by Russians. (Soviet zone is still practically a closed area even to AC personnel.)

Stockpiles of raw materials acquired prior to liberation will be used up within 4 to 6 months necessitating extensive industrial shutdowns and economic collapse, if present strangulation on imports and interzonal movements continues. Resulting economic disruption may not be displeasing to Soviet as means of making more pliable a people who voted overwhelmingly against communism.

Whenever Moscow Declaration⁵⁷ is cited, western members cite only part about freedom and independence of Austria, while Soviet members cite only part about responsibility of Austria for participation in war at side of Hitlerite Germany.

Russians remember Austrians fought at Stalingrad. They can in all honesty see no reason why Austrian standard of living should exceed Soviet Union with Allied help.

Moreover, as far as their instructions and basic policy appear to be concerned, a free and independent Austria is not necessarily preferable to an Austria dependent on USSR.

Personal relations in AC are still good but it is, of course, impossible to move Soviet representatives contrary to their instructions from Moscow. Attempts to do so are futile irritants in AC.

As between a free, independent democracy and a dependent Soviet satellite, Austria’s future will depend largely on action between Govts affecting: (1) the nature of ultimate settlement of ex-German assets; (2) the success or failure of an early reduction of Soviet occupation forces and occupation costs; (3) the extent and pattern of Soviet penetration into Austrian economy and relationships with Danubian countries and east European countries. Time is working in favor of the Soviet toward determining which of the above alternatives may prevail.

Sent Dept as 296; repeated Moscow as 17.

Erhardt

55. For previous documentation on the European Central Inland Transport Organization, see Foreign Relations, 1945, vol. ii, pp. 1389 ff.
56. This is a reference to Public Law 259, part of which stipulated: “B. The President is hereby requested, through appropriate channels, to facilitate the admission to recipient countries of properly accredited members of the American press and radio in order that they may be permitted to report without censorship on the utilization and distribution of United Nations Relief and Rehabilitation Administration supplies and services.” For complete text, see 59 Stat. 609. For further details on UNRRA, see Foreign Relations, 1945, vol. ii, pp. 958 ff.
57. November 1, 1943; for text, see Foreign Relations, 1943, vol. i, p. 761.