740.00119 Council/9–646: Telegram
The Acting Secretary of State to the Ambassador in France (Caffery)
u.s. urgent
niact
4662. Secdel 842. For Oliver.52 Subject is Gruber’s desire to postpone implementation of Austrian Nationalization Law, to exempt United Nations property and pre-Anschluss German assets from law and to have promulgation of French, British, US definition of German assets for use in influencing Soviet position (teletype conference with Oliver).
Dept fails to see how proposal reduces Austrian difficulties in eastern zone since German assets there on which dispute exists are post-Anschluss. Dept also does not desire to admit any necessity for change of legal position taken by Gen Clark in AC,53 with respect to legality of Austrian law nationalizing German assets title to which had passed to United Nations, or nationalizing United Nations property without consultation with USACA. Finally, Dept is supporting Brit approach to Paris, Washington and Moscow for settlement of definition German assets at Paris, chances for success of which are enhanced by taking effect of Austrian law which is embarrassing to Soviet Union as well as to Austria. Latter also applies to Gruber’s proposal of tripartite definition German assets which Dept wishes to consider only after it is evident that quadripartite solution is impossible.
For these reasons, Dept disinclined to encourage Gruber in his proposals, although should Austrian Govt desire to withdraw from present position, Dept does not consider it can actively oppose. If Austrian Govt does introduce matter in Parliament, it should not give away primary bargaining point by loosely defining United Nations property. “United Nations Property” should exclude property claimed as German assets under Potsdam. Dept would be prepared to support an Austrian proposal to exempt from nationalization law at this time all United Nations property and all properties determined by AC to be German assets. In view of Soviet insistence to Austrians on bilateral negotiations, however, doubt whether Gruber would be interested.
[Page 369]Urgently advise your direct communication Erhardt to obtain his and Clark’s comments on Dept’s views sent concurrently.54
Sent to Paris as 4662; repeated to Vienna as 822.
- Covey T. Oliver, Associate Chief of the Division of German and Austrian Economic Affairs; Economic Adviser to the Council of Foreign Ministers in Paris.↩
- General Clark’s comments and discussions in the Allied Council regarding the Austrian law nationalizing German assets, which, in his opinion, did not violate the Allied Control Agreement, are in the minutes of the meeting of the Allied Council of August 9, ALCO/M (46)29, and of August 23, ALCO/M (46)30.↩
- In telegram 4718, Delsec 967, September 20, from Paris, Ambassador Caffery reported that the Soviets in their reply of August 15 had rejected the British proposals of July 24 on a quadripartite definition of German assets in Austria. “Refusal of Soviets to admit application of UN declaration on forced transfers … is clear indication that Soviets will insist on bilateral negotiations with Austrians and will seek permanent controls over Austria.” Mr. Caffery further reported that the British had advanced a new proposal for discussion, i.e., to list Austrian enterprises in all zones according to the degree of their German ownership. This proposal departed from the US and UK position to attain quadripartite definition of German assets. Inasmuch as there was very little chance for a Soviet agreement, Caffery suggested a tripartite definition of assets as an alternative policy. “This definition,” he asserted, “could be used as basis of policy for economic reconstruction in western zones and would immeasurably strengthen hand of Austrian Govt in possible bilateral negotiations with Soviets.” (740.00119 Council/9–2046)↩