740.0011 EW (Peace)/10–1347

The Austrian Foreign Minister (Gruber) to the Acting United States Representative to the Austrian Treaty Commission (Ginsburg)42

Dear Mr. Ginsburg : With reference to our conversation regarding an offer of the United States to the Soviet Union for the purpose of solving the problem of German assets on a practical and economic basis, I have the honor to communicate to you that I had occasion in the meantime to talk to my colleagues, particularly Chancellor Figl, Vice-Chancellor Schaerf and Minister Krauland. At that occasion special mention was made by one of the group that with regard to the oil question it would be necessary to make it clear that future concessions should extend only to the oil bearing area located in the Eastern Zone, and not the Graz basin or the region of Wels. Furthermore, the terms production, exploration and refinery ought to be defined as clearly as possible and also the regional limits of the enterprises in question in the Eastern Zone of Austria ought to be clearly determined. Aside from this desire for precision the following proposal would appear to constitute a workable solution from the Austrian point of view.

There would be transferred to the Soviet Union:


50% of the production capacity of oil

50% exploration

50% refinery, all located in Eastern Austria

Physical assets of DDSG in Eastern Austria, Hungary, Rumania, Bulgaria and Yugoslavia.
5 to 10 of the more important industrial enterprises in which there is a predominant German ownership interest.

It should be made clear in all cases that the transferred enterprises remain subject to Austrian laws in every respect. Exceptions would be possible only in the matter of nationalization legislation by a renunciation [Page 626] of the Austrian State to exercise its right for a period of 18 months, or possibly for a somewhat longer period. Only in the case that otherwise an over-all solution would fail should the assurance of a transfer of net profits under clearly defined terms either in foreign currency or goods be considered as a possibility.

(4) The entire remaining claims of the Soviet Union should be liquidated by shouldering a total Austrian obligation of $100 million to be redeemed within a period of 8 to 10 years in accordance with a definite plan. This should be done similar to Article 74 of the Italian peace treaty regarding reparations by stipulating payment in “value added by manufacture”. In any case it should be avoided that any kind of dispute concerning the question of pricing goods could arise later.

With respect to the question of banking transactions for the Soviet Union, you might be interested to learn that according to a statement by the Vice Chancellor Soviet representatives are reported to have entered into negotiations with the management of the Laenderbank.

  1. The source text was contained in telegram 1024, October 13, from Vienna, not printed.