863.00/8–147: Telegram

The Minister in Austria (Erhardt) to the Secretary of State


685. Review of recent developments affecting Austria indicates favorable and unfavorable factors more or less evenly balanced.

Following are major unfavorable factors:

Implications re possible ultimate partition of Austria inherent in Soviet reaction to Marshall plan.35
Reported Soviet measures in eastern Austria (see recent CIG reports on USIVA) to clean up USIVA, to make permanent improvements to industrial properties under its administration, and to develop eastern Austria’s trade with satellites rather than with rest of Austria.
Lack of progress in ATC toward agreement on disputed treaty questions.36
Recent events in Hungary, Rumania and Czechoslovakia illustrating Soviet methods in areas under their control.37
Continued shortages of food and other necessities, accompanied by rising prices; absence of substantial increase to date in internal production.
Persistent agitation by local Communist press, mainly over food situation and food prices. Although critical stage of food problem is believed past as result new American relief program, Communists are trying in every way to stir up discontent, even by raising false hopes of immediate higher rations. Soviet and Communist propaganda and distortions of fact do not deceive Austrian public generally but naturally cause some uneasiness.

Although state of public morale is generally fair (except for Soviet zone where population is reported to be intimidated and deeply discouraged), above factors have given rise to numerous alarming rumors or theories (my despatch 3278, July 1838), such as that Soviet-Communist putsch may occur as in Hungary. One prediction often heard in recent weeks is that of demonstrations and disorders during August. While trouble could occur any time, reasons for expecting it in August rather than September are not wholly convincing, and theory is less significant as prediction than as reflection of tendency to wonder what Soviets may do next. (In any case United States Military Police units will be prepared for trouble in United States and international zones.)

Idea of ultimate partition of Austria is spreading, and numerous Austrians owning substantial properties in lower Austria are talking of moving to western zones or leaving country. Idea is occasionally heard that if iron curtain should advance westward to embrace Soviet zone, population transfers would be carried out to dissipate anti-Communist tendencies in Vienna and lower Austria. Austrian dread of partition is revealed by decided preference, believed held by majority, for several more years quadripartite occupation rather than partition if treaty cannot be obtained.

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On other side favorable factors are following:

Series of constructive United States actions i.e., comprehensive relief program for Austria, decision to pay occupation costs in dollars, and refund of 308 million schillings. Entire population at present very conscious and appreciative of constructive United States efforts. Relief program will permit maintenance of present 1550 calorie ration through summer if there is no delay in ship arrivals, and should in time permit accumulation of modest reserves. Relief program and arrangements made during recent visit Waucher mission to Washington should also produce some increase soon in coal supplies, which should quickly be reflected in increased industrial production. There still remains some uncertainty whether Soviets will exclude United States relief program from Soviet zone by refusing to permit necessary minimum of observation and reporting, but it is at least negatively encouraging that Kourasov in Allied Council July 25 did not reject General Keyes’ restrained reply and request for cooperation.
Partnership of Socialists and People’s party in present coalition continues firm, and government and leaders of both parties have decisively committed themselves to western orientation.
Basic antagonism between communism and democratic socialism is well understood by great majority of Austrian workers, so that there is little danger of defections or compromises by Socialists here.
Soviets have recently taken several actions conciliatory towards Austria which, whether or not inspired by United States aid program, may mean Soviets do not consider themselves strong enough for show-down.
Soviet social administration chief invited union officials from Soviet zone to meeting July 17 at which Soviet representatives were conspicuously friendly and solicitous concerning complaints and wishes of unionists.
July 21 Figl had two hour interview with Zheltov in friendliest atmosphere Figl could remember.
Soviet Government has responded to Communist plea for early return of Austrian PWs by letter from Stalin (addressed however to Austrian Communist Party rather than government) saying Soviet Government has decided to accelerate return of Austrian PWs so that all will be home by end 1947.
Soviet authorities have recently for first time offered to sell coal to Austria (my 623, July 1739), though significantly at high price.
Hungarian Government has invited Ministers Heinl and Sagmeister to visit Budapest for informal discussions on possible expansion of trade (my 623, July 17).

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As result of favorable factors outlined above, especially United States aid, which may have been decisive, Soviet efforts to force eastern Austria and Vienna into their sphere are still being frustrated.

Sent Department 685; repeated Moscow 62.

  1. For documentation regarding the European Recovery Program, see volume iii .
  2. For documentation on the work of the Austrian Treaty Commission, see pp. 577 ff.
  3. Documentation on the interest of the United States in the maintenance of democracy in the countries of eastern Europe is included in volume iv .
  4. Not printed.
  5. Not printed.