CFM Files: Lot M–88: Box 63: Conversations

Memorandum of Conversation, by Walter Levy of the United States Delegation to the Austrian Treaty Commission

[Page 588]
Present: Mr. Renner, President of Austria
Mr. Dodge
Mr. Ginsburg
Mr. Rankin, Counselor of the American Legation, Vienna
Mr. Oliver
Mr. Williamson
Mr. Levy
Lt. Colonel Pomeroy

On June 3 the US Delegation of the Austrian Treaty Commission was received by Mr. Renner, the President of Austria.

Mr. Renner welcomed Mr. Dodge and other members of the US Delegation and expressed his regret that due to an illness he had not been able to meet the US Delegation at an earlier date. Mr. Dodge expressed the pleasure of the US Delegation to meet the President of Austria, and conveyed his sincere wishes for the health of the President.

President Renner stated that he would like to use this opportunity to address a few words to the US Delegation. The Austrian people, the President said, are in a state of deep despair. Austria expects that the work of this Commission will result in the re-establishment of her political and economic independence. Such independence, however, could only be achieved if the State Treaty would allow Austria to become a viable state. Austria must now look to the future. Though the Austrian nation does not want to take away rights acquired by any of the victorious powers under Potsdam or any other agreement, the main question in which the Austrians are interested is whether the Austrian State Treaty will assure Austria’s complete independence. After the first World War Austria was dependent on outside help and needed loans from the League of Nations and other sources. An independent Austria could now probably exist on her own resources due to the development of her oil deposits, of hydro-electric power, and the building up of industries. If left alone she could probably provide by exports enough foreign exchange to pay for needed imports of food and other materials. But the margin on which Austria could plan a self-supporting economy is a very, very small one and to be able to do so she must control her domestic resources and industries.

There is one very important fact which the President wants the Delegation to keep in mind. The Austrian Parliament will be called upon to approve the State Treaty. In his belief, no responsible party could agree to the Treaty if the economic and political independence of Austria would not be assured and if the economic conditions would not be such as to guarantee the creation of a viable state. It is essential under those conditions not to transfer the ownership of Austria’s national resources and industries to the powers claiming reparations from German assets. Otherwise, part of Austria’s economy would be [Page 589] cut off and Austria could not carry out any commercial policy of her own or become really self-supporting. For instance, all of Austria’s oil resources, her most important hard coal deposits, and her only glass factory are located in the Eastern Zone of Austria. No Austrian industry whose competition is not desired by the powers controlling the oil and coal resources of the country would be able to obtain coal for its power needs and oil for its transportation requirements. Any business negotiations with companies controlled by Russia would be very much different from ordinary negotiations with capitalists or foreign investors. The Austrian businessmen or the Austrian Government would be a very unequal partner in negotiations with the Soviet State.

President Renner continued that while it must be acknowledged that certain rights have been given the Four Powers under the Potsdam Agreement, these powers should not acquire title to the German assets in Austria. Instead, financial arrangements of the following character should be made between Austria and the reparation claimants. The Austrian State would issue a State loan and buy former German assets from the claimants who in the form of amortization for this loan would receive during a limited number of years a limited part of the output from the factories, plants and national resources which had been assigned to them under Potsdam. The Austrian Government would gladly help those countries in their reconstruction efforts by supplying them with goods from Austrian plants, provided that such supplies are limited in time and quantity. For instance, oil may be supplied to Russia over a period of say five years and amounting, as the case may be, during the first year to 30 percent of Austrian oil production and the second year to 25 percent and so on. But generally speaking Russia has enough oil in her own country and she has now additionally acquired the oil resources of Rumania and Galicia. Again Austria would be willing to supply timber and manganese ore to the UK or hydro-power to France. But as soon as possible those nations should develop their own resources and construct their own plants. Under no circumstances should they maintain permanent control over Austrian resources and industries as a result of the Postdam Agreement. The President felt he could not stress enough the Austrian position that resources and plants located in Austria must remain Austrian.

President Renner believed that in the past the Austrian negotiators have perhaps not been firm enough. Last Spring there existed some hope that it was possible to come to reasonable terms with the Russians by compromise and good will. This belief has been proved wrong. President Renner feels that in negotiations with the Russians one must be firm and insistent. His Party, the Social Democrats, and the [Page 590] Peoples Party see eye to eye on all these major questions with the one possible exception of Austrian nationalization.

Mr. Dodge stated that the US Delegation is trying very hard to obtain agreement on the State Treaty in the Four Power Commission. Three of the powers he believes could agree, on the major issues, but the objections of one power prevent progress in the negotiations. The present delays are caused because the attitude of the US Delegation is that of firmness and insistence on certain basic principles which have not proved acceptable to the one other Delegation.

President Renner stated that it is not the policy of the US Government and not the attitude of the US, British and French State Treaty Delegations that cause him concern; he is deeply appreciative of the US endeavors to establish an independent Austria, but the despair of the Austrian people is such that a solution to all pending problems in line with his former statement must be found soon. Mr. Dodge replied that the US Delegation tries hard to advance the negotiations on the Austrian Treaty as speedily as possible. In this connection he would like to make one remark. There is (as Mr. Dodge understands) some belief in some circles that a bilateral agreement might succeed where Four Power negotiations have up to now failed. President Renner confirmed that some discussions in some circles may have indicated such hopes, but to him such negotiations seem to be comparable to negotiations between the fox and the hounds. Left to himself the fox would certainly have no chance. He trusts that the fox would not be deserted and would not have to meet the hounds alone. Mr. Dodge stated that this was also the opinion of the US Government.

President Renner expressed again his gratification to have met Mr. Dodge and the US Delegation and extended an invitation to meet them more frequently in the future and to arrange as soon as convenient an informal supper.

Walter Levy