Foreign Relations of the United States, 1947, Council of Foreign Ministers; Germany and Austria, Volume II

740.0011 EW (Peace)/6–1947: Telegram

The Secretary of State to the Legation in Austria

secret

Washington, June 25, 1947—6 p.m.

450. For Dodge and Erhardt. Pass to Keyes. Dept has studied urtels on meetings ATC to date in effort to obtain some light on Sov intentions as to conclusion Aust Treaty in next CFM meeting. Question in our minds is whether apparently cooperative attitude taken by Sovs in 7th, 11th, 15th, 16th, and 21st meetings (Legtels 424, May 21; 451, May 29; 464, June 4; 494, June 11; and 520 June 19²⁰) represents some effort to work toward agreement or tactics of deliberate obstruction designed, however, to lead us on and to escape onus for any possible breakdown in negotiations. If Sovs, in spite of occasional appearances of disposition to compromise, stand in future discussions on position taken in 17th meeting (Urtel 494, June 11) [ Urtel 498, June 13²¹], what course in your opinion should US follow?

In view this uncertainty re Sov intentions consideration being given here to following:

(1) Continued endeavor to achieve understanding at Vienna pursuant to decision of Four Powers at CFM meeting Apr. 24 and in keeping with trend of discussion in 16th meeting ATC.

(2) In any event preparation of case for consideration at next CFM meeting or for possible submission to UN. USDel would undertake this work at once by collecting supporting evidence in form of lists of properties involved, proof of ownership, circumstances of transfer, total value of properties according to different definitions assembled in cooperation with UK and French Delegations, with assistance of Aust Govt, and through work of CE to greatest practicable extent; problem of creditors’ claims would also be investigated (on which separate telegram will follow). Appropriate publicity concerning reasons for stalemate might be advisable if certain nothing else can be accomplished in ATC.

(3) Transmission in near future of communication from Sec of State to Fon Mins calling attention to inability ATC thus far to give effect to intentions of CFM decision April 24 as understood by US and expressing hope such instructions may be issued to Delegations by their respective Governments as will facilitate the remaining work of ATC. If this step proves ineffective, recommendation might be made for appeal by President to Premier Stalin which would indicate our grave concern for delay in conclusion Aust Treaty and our intention to bring matter to UN in event Four Powers unable to complete negotiations on this subject.

(4) Last-ditch concrete proposal specifying (a) properties, rights and interests which would be recognized by US or by Western Powers as eligible for transfer to Sovs, conditions under which goods or profits might be exported therefrom and period during which this right would exist; (b) plan for redemption total value of such properties, rights and interests within Austrian capacity to bear; or (c) some combination of (a) and(b). Proposal would be made only after concurrence UK and French and might best be put forward as tripartite offer. In this final attempt to solve German assets problem through agreement Four Powers some concessions might be made in number and value of properties of doubtful ownership or in total capitalization on condition Sovs agree to forego status of extraterritorial character and/or accept plan for liquidation mortgage within Aust capacity to bear. Since our primary objective is to assure possibility of independent existence for Aust and to prevent future Sov dominance there, avoidance of special status for transferred properties is regarded as fundamental issue on which US cannot yield. If Sovs willing to accept offer within reasonable time as basis for settlement, it might be possible to draft at Vienna the terms of a final settlement satisfactory to all Delegations. Its rejection by Sovs on other hand would confirm Sov recalcitrance and render circumstances more favorable for action in UN.

(5) Submission of Aust question to UN in event ATC or CFM unable to do constructive work. While July 15 is Dept deadline for submission items for agenda September meeting of GA, proposals can be made until about Aug 20 for supplementary list and subjects may even be brought forward during GA which convenes Sept 16 but probably some deadline such as end of first week of GA meeting will be established. In any case approval of GA by majority vote is necessary for items to be accepted for agenda. If decision made to bring Aust question to GA, we might consider proposal by US of resolution establishing UN Commission of Inquiry on Austria comprising nine states other than powers occupying Austria to be selected by GA. Commission might be authorized, for example, (a) to study and make recommendations on unagreed parts of draft Treaty for Reestablishment of Independent and Democratic Austria; (b) to appoint one or more committees of experts to study particular aspects of outstanding issues; (c) to request advisory opinions of International Court of Justice on legal aspects questions involved. Commission might be asked to report its findings to GA within four months activation in order GA make recommendations concerning Austrian Treaty at special session to be convened within 30 days from submission of Commission’s report.

While foregoing concerned chiefly with German assets problem there is no intention to neglect here, or for USDel to neglect in Vienna, importance other outstanding issues of Treaty. It is entirely conceivable Sovs might agree to settlement assets problem and later hold back on questions of frontier, displaced persons, or military clauses if it serves their interest at the time. We think therefore that any major concessions on our part with respect to Art 35 should be made contingent on resolution other chief issues.

Implementation of above program would require careful coordination throughout with UK and French representatives in Vienna. In connection with point 4 Dept also recognizes necessity of informal consultations with competent Aust authorities on specific aspects acceptable compromise settlement. Appreciate your comments in order USDel, Leg, and Dept concur on future course of action in light developments in ATC.

Marshall

20. None of the telegrams under reference are printed.

21. Telegram 498, June 13, from Vienna, not printed, reported that the Soviet attitude at the 17th Meeting of the Austrian Treaty Commission was a definite setback to the continuation of discussions on procedure to consider articles 35 and 42 of the Draft Austrian Treaty. The telegram read in part as follows:

    “Dodge’s statement at end of meeting summed up problem: Today’s discussion confirms first impressions about Sov attitude which US rep had in last few meetings come to hope was erroneous. Sov Del demands, contrary to views other Dels:

    (a) that there be discussion on oil without any limitation on that discussion or any commitment to discuss other types German assets;

    (b) veto on cases and concrete facts to be discussed by ATC;

    (c) veto on order of consideration of basic types German assets;

    (d) veto on reference of work to CE.

    Dodge added that if Sov proposal accepted after Novikov statements, ATC could be tied up so that nothing but oil could be considered.” (740.0011 EW (Peace)/6–1347)