740.00119 Council/4–1947: Telegram
The Secretary of State to the Acting Secretary of State
urgent
1480. Delsec 1451. For the President, Vandenberg, Connally and Acheson from Marshall. Thirty-sixth CFM meeting, April 19, p.m.,94 [Page 363] Molotov presiding, opened with a discussion of the draft clause fixing Austria’s frontiers as those existing on January 1, 1938. Marshall said the US could not accept Yugoslav territorial claims to Carinthia because (1) the 1920 plebiscite which fixed the frontier in this area is generally conceded to have been fair, (2) the loss of Carinthia would be a serious if not fatal economic loss to Austria, and (3) any weakening of Austria would have a harmful effect on the Council’s efforts to stabilize Europe.95
Bidault and Bevin also rejected the Yugoslav claims. Bidault suggested that experts work out some system for the joint use of the water power developed in the frontier area. Bevin agreed but did not want to delay the fixing the frontiers for this reason.
After defending the Yugoslav claims, Molotov asked that the Deputies consider them and report back to the Council. Marshall pointed out that the Deputies had been unable to agree on this question and that although he believed the question would have to be settled at the Council table, he would not oppose sending it to the Deputies again. Regarding the economic question, he said the US had already stated its support of the supervision by the economic commission for Europe of bilateral arrangements on frontier problems. He said the US favored all attempts to reduce economic difficulties which arose when boundaries are used as barriers. The Council agreed to refer the Yugoslav claims to the Deputies who will report to the Council Monday afternoon.
The Council then discussed whether Austria should pay reparations. Marshall recalled the Potsdam commitment not to take reparations from Austria, adding that Austria was in no condition economically to pay reparations. Bidault agreed but proposed that Yugoslavia be allowed to keep all Austrian property in its territory in satisfaction of the Yugoslav reparation claim. Although Molotov agreed that the US, UK and USSR had renounced reparations from Austria at the Potsdam conference and that France had later accepted this decision, he maintained that this renunciation applied only to these four states. Yugoslavia or any other small state, he continued, can claim reparations from Austria because the four powers could not renounce the rights of smaller states. He said the Yugoslav claim is justified and cannot be ignored. Marshall said the US could not agree to the payment by Austria of reparations to Yugoslavia but was willing to refer Bidault’s proposal to the Deputies along with the entire question of the disposition of Austrian property in the territory of the allied and associated powers. This proposal was accepted by the Council.
[Page 364]Agreement on the status of the Austrian Government’s debts was delayed in part because the USSR was not ready to submit an amendment to this clause which it desired to present and in part because of its insistence on payment by Austria for all services and supplies delivered to Austria by the allied and associated powers between May 8, 1945 and the coming into effect of the present treaty. A clause covering Austria’s general economic relations was approved.
The Council adjourned after agreeing to hold two meetings Sunday.
Department please pass to Vienna as 50, Rome as 42, and Paris as 161.
Sent Department as 1480, repeated London 174, Berlin 307.