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

740.00119 Control (Austria)/4–2546: Telegram

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

secret

Washington, May 24, 1946—7 p.m.

514. Failure of Soviets to agree to discussion of treaty for Austria has raised question of US policy in immediate future. No positive action with regard to treaty can be expected prior to forthcoming meeting on June 15. In meantime, complete draft treaty will be circulated to London, Paris, Moscow, and will be presented to deputies for consideration. After circulation, US will again propose in CFM that four powers negotiate treaty.

In view of importance of Austria in solution of all Central European problems and making possible fulfilment of four power objectives as stated in international agreements Dept considers that immediate steps are necessary in AC prior to June 15 CFM meeting and recommends following for immediate consideration in AC and in quadripartite negotiations in Vienna:

1. US element should press for replies to and consideration of statement made by Gen Clark on Apr 25 with reference to US policy and program for immediate relief in Austria (P–7123 Apr 24;⁷ urtel 610 Apr 25⁸).

2. US element should support Brit draft for new control machinery agreement as desirable transitional measure increasing authority of Austrian Govt and relinquishing Allied controls on independent political action (P–8508 May 19; urtel 734 May 20⁹).

3. US element should stress need for immediate agreement on specific cases involving German assets under Potsdam, including land (urtel 720 May 16¹⁰).

In considering Brit proposals Dept recommends that no agreement be reached which sacrifices principle of quadripartite action in Austria pending negotiation of final treaty. Maintenance of quadripartite supervision of Austrian international acts is necessary in order to prevent negotiation of any unilateral agreement which may prejudice Austrian independence prior to its final establishment. At the same time US element should press for freedom of Austrian Govt to consider economic agreements which will contribute to national reconstruction without endangering independent status.

Within Austria Dept recommends that everything possible be done to break down zonal barriers and to permit economic revival of Austria as a whole. This would include free movement for UNRRA mission in Soviet zone which Dept understands is now curtailed by provision requiring UNRRA personnel to leave Soviet zone each day. Treatment of Austria as a whole is of fundamental importance in preventing divergent reconstruction policies and ultimate split of Austria into eastern and western zones.

Dept would welcome any suggestions you can make and any information you can furnish to Austrian Govt concerning possibilities of economic assistance by US.¹¹ Full advantage has not been taken of these possibilities and reconstruction can be aided by such measures as cotton credit and possible loans. Such a program should start from basis of industrial reconstruction as provided in UNRRA program to permit Austria to develop peacetime economy producing for export market as well as for internal consumption. Obviously any steps taken for economic reconstruction should be taken now rather than after settlement of Austrian international status.

In view of reported changes in Soviet policy Dept considers that interim program for reconstruction may have a chance of success and should be energetically pushed simultaneously with policy in CFM. Reynolds News, London, reports Soviets willing to discuss new interpretation of Potsdam with Austrian Govt on basis that Austrian property prior to Nazi occupation will remain untouched. Soviets may possibly be preparing way for change in Austrian policy by reduction of troops (urtel 636 Apr 29¹²) and reported gestures to Austrian Govt, but are obviously seeking face-saving devices, as well as arrangements which will permit complete Soviet control of Austrian economic resources. Dept assumes that when such arrangements are completed Soviets might discuss treaty concerning establishment of Austrian independence and complete withdrawal of occupation forces. US, on contrary, is determined that solution of Austrian problem will be made on basis of international agreements and existing international economic machinery which is designed to maintain independence of small states.

Byrnes

7. Not printed.
8. In telegram 610, Mr. Erhardt commented on Soviet attitude toward proposed new control machinery agreement and foreign properties in Austria, and concluded that “Soviets plainly hold that time has not yet come for complete restoration of Austrian sovereignty”. (740.00119 Control (Austria)/4–2546)
9. Neither printed.
10. In this telegram, Mr. Erhardt reported that “Soviet claims now appear to be limited to those based on Potsdam agreement, and Austrians are making gradual though slow progress towards getting Russians to recognize principles of London declaration on forced transfers and applicability of Austrian laws to immovable property transferred by Potsdam.” (840.50 UNRRA/5–1646)
11. Mr. Erhardt replied in telegram 872 of June 20 that it was “clear most important aid US acting alone could properly furnish would be credits for immediate purchase of raw materials and urgently needed equipment in US, pending Austrian membership in International Bank and Fund.” (863.50/6–2046)
12. Not printed.