Office of the Historian

863.515/12–1047: Telegram

The United States Delegation at the Council of Foreign Ministers to the Legation in Austria

top secret
niact
urgent
London, December 10, 1947—8 p.m.

138. Delsec 1537. For General Keyes68 from Erhardt. Situation in CFM on Austrian treaty makes it necessary that protest be made in AC on 12 December against Soviet Austrian side agreement (Legtel 112, December 9).69 Protest should be framed in such a way to avoid counter-blast against US relief agreement or other US agreements with Austria, or to weaken confidence of Austrians either in new currency or government. Objective of protest should be prevention of bilateral agreement on larger issues following termination of CFM. It is possible that if no treaty is forthcoming, Soviets might propose after termination of CFM a bilateral deal on German assets promising withdrawal of Soviet forces if settlement is made. Since alternative to lack of agreement or treaty is continued military occupation, Austrian Government might find it inexpedient to reject offer of bilateral settlement. In view of these considerations it is recommended that you enter formal protest in AC on 12 December along lines contained in Legation’s 112, emphasizing Soviet use of pressure in obtaining settlement of 600,000,000 schilling claim and, secondly, source of funds in claim which US has always contested as a valid debt.

No approach has been made to the British and French in London on this question.

Please telegraph immediately complete text of your statement70 in order that it may be utilized here.

Sent Vienna 138, December 10, 8 p.m., from London.

  1. General Keyes, who served as an Adviser to the United States Delegation at the Council of Foreign Ministers in London, returned to Vienna prior to the conclusion of the Council session. Erhardt, meanwhile, left Vienna and joined the United States Delegation in London.↩
  2. The same as telegram 1258 to the Department, p. 1216.↩

  3. Telegram 116, December 11, from Vienna to London, not printed, gave the text of the United States statement delivered to the Allied Council for Austria at its meeting on December 12:

    “During the discussions on the currency protection law the Soviet Element concluded an agreement with the Austrian Government on 2 December which included the settlement of a so-called loan of highly questionable validity involving 600,000,000 Reichsmarks most of which the Soviets themselves confiscated from Austrian banks only a short time before. The funds were of course Austrian funds and should never have been removed from the jurisdiction of the Austrian Authorities. Approval of any Austrian law should not be conditioned on a bilateral agreement. Such agreements should be based entirely upon the merits of the agreement itself, negotiated free from pressure of unrelated matters. In our view this agreement does not meet these fundamental conditions.” (Vienna Legation Files)

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