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

740.00119 Control (Austria)/7–1146

Memorandum by the Acting Secretary of State to President Truman

top secret

Washington, July 8, 1946.

With respect to the attached recommendation from General Clark in Vienna²⁹ that the United States Government renounce its claim to German assets in Austria, the Department of State was at first inclined to follow General Clark’s recommendation entirely. On second thought, however, there would seem to be some advantage in not giving up all control over German assets in the Western zones of Austria and thereby leave the Austrian Government in the position of having to negotiate bilaterally with the Soviet Government on the question of German assets without further reference to the views of the United States authorities.

We therefore recommend that General Clark be instructed to state the willingness of the United States Government to enter into immediate negotiations with the Austrian Government looking toward the renunciation of the United States claims as part of a general settlement of German assets in Austria. The American position in such negotiation would necessarily take into account the Moscow Declaration on the restoration of Austrian independence and the United Nations Declaration of January, 1943 on Forced Transfers. We believe that this approach would strengthen the hand of the Austrian Government in its eventual negotiations with the Soviet Government on German assets in Eastern Austria.

There are attached hereto for your consideration draft instructions to General Clark in accordance with the foregoing explanation. If you approve, General Clark would be also instructed to make the American position known to the Austrian Government before the special meeting of the Austrian Parliament on July 10, and would be authorized to give appropriate publicity to our action in Vienna.

The United States Government has been attempting since October, 1945 to negotiate an agreement defining “German assets” in Austria. These attempts have to date been entirely fruitless for the reason that the Soviet Government has never been willing to discuss this question either in Vienna or elsewhere. You may, therefore, wish to consider the desirability of a message from you to Mr. Stalin, stating that you, as a signer of the Potsdam Agreement, will not recognize the transfer of German assets in Austria to the Soviet Government where such transfer is effected in violation of the Moscow Declaration of 1943 or the United Nations Declaration of January, 1943 on Forced Transfers. If you consider this action to be desirable, the Department of State will draft a message for your consideration.³⁰

Dean Acheson

[Enclosure]

Draft Message to General Clark³¹

Reurad July P–8076, P–8077. You are requested to make following statement to Austrian Government prior to convening of Austrian Parliament on July 10:

“The President of the United States, as one of the signers of the Potsdam Agreement, has directed me to inform the Austrian Government that the United States Government is now prepared to enter into negotiations with the Austrian Government looking towards the renunciation of the United States claim to German assets in Austria as part of a general settlement of German assets in Austria.

“To this end, the United States Government agrees to turn over to the Austrian Government as trustee all German assets in the United States zone pending the conclusion of an agreement. It assures the Austrian Government that all such assets may immediately be used for purposes of reconstruction in Austria without fear of future removals of plant and equipment from the United States zone in Austria under the terms of the Potsdam Agreement.

“The United States Government also wishes to make clear that it will recognize no transfer of property as conforming to the terms of the Potsdam Agreement which does not also conform to the terms of the United Nations Declaration on Forced Transfers of January 1943 and which does not leave to Austria the sovereign control of an independent country over the resources within its borders, which was envisaged in the Moscow Declaration of 1943.”

Following transmission to Austrian Government, you are authorized to give appropriate publicity to the statement.

29. Text quoted in telegram 3334, July 9, to the Secretary at Paris, p. 357.
30. A marginal note reads: “Approved, Harry S. Truman.”

31. This draft was returned to the Department by President Truman with his handwritten note in the margin suggesting that the message be forwarded to the Secretary of State at Paris, who, if he approved after talking with Bevin and Bidault, should forward message to General Clark.

    When Secretary Byrnes received the message he suggested certain modifications to the President. For text as sent to General Clark, see Department of State Bulletin, July 21, 1946, p. 123.