740.0011 EW (Peace)/12–1647
Memorandum by the United States Representative on the Austrian Treaty Commission (Dodge) to the Secretary of State
[London
], December 16, 1947.
- 1.
- Mr. Bevin’s last minute proposal14 that the Austrian matter be referred to the Deputies came as a complete surprise. In asking if there were any objections you and M. Bidault had no alternative, under the circumstances, but to agree.
- When Bevin pressed Mr. Molotov, the latter obviously attempted to avoid such a reference, but finally suggested that two-thirds of the oil production and exploration area should be taken as a basis of agreement. Thus, Mr. Bevin gave Mr. Molotov the opportunity to appear to make a concession.
- 2.
- The two-thirds suggestion was not a concession. It represents the U.S. estimate of the total Soviet claim under their own definition of German Assets. It is even a step backward as it does not include the ten percent discount.
- 3.
- (a) The original French proposal suggested one-half of oil production. The U.S. Deputy objected to this as being too high. The Soviet two-thirds is the approximate equivalent of their total claims.
- (b) The original French proposal also suggested one-third of the oil exploration area. The Soviet two-thirds is the approximate equivalent of their total claim.
- 4.
- As I see them there are these possible favorable developments
in the exchange regarding Austria yesterday:
- (a)
- For the first time the Soviets stated their major demand.
- (b)
- That demand was framed in concrete terms. Thus, for the first time, the Soviets appeared to be abandoning their insistence on a definition, and accepting the idea of a concrete settlement.
- (c)
- By implication Molotov seemed to be willing to accept the other major elements of the French proposal. This, of course, must be checked.
- 5.
- My guess is that the Soviet Deputy to Koktomov, who doesn’t hold an
important place in the hierarchy, will not be authorized to
budge from the two-thirds oil demand. Our major efforts,
therefore, will be concentrated on these two questions:
- (a)
- Will the Soviets accept the other elements of the French proposal? (Certain Danube shipping properties, plus $100 million in lieu of all other claims).
- (b)
- To what extent will oil transferred to the Soviets be subject to Austrian law? (This may emerge as the critical question; if Austrian law is fully applicable, the percentages although important, are not altogether controlling.)