863.00/3–548: Telegram

The High Commissioner in Austria (Keyes) to the Secretary of State


P–1372. WEEKA Austria. From USFA sgd Keyes action to CSGID from Keyes to State info Deputy Dir of Intelligence EUCOM, MA London pass to Keyes, clear text copies forwarded by pouch to MA Italy, MA Switzerland, MA Rumania, MA Bulgaria, MA Czechoslovakia, MA Yugoslavia, MA Hungary and Trust [Trieste?].

Current intelligence: Now possible to appraise, with at least modest claim to comprehensive basis, effect of Communist victory in Czechoslovakia on political situation in Austria. Most immediately perceptible consequence has been first class attack of jitters. Several developments of past week interpreted as local crystallizations of this basic reaction, especially immediate change in popular Austrian attitude toward state treaty. To probably large majority of Austrians physical presence of western occupying powers in Austria suddenly seen as Austria’s guarantee against what happened in Czechoslovakia. Week’s labor tension also related to popular reaction to developments in Czechoslovakia. [Page 1385] Among trade union leaders, especially attitude of fear and despair among masses of workers has contributed to anxiety with which wave of labor tension is regarded. Labor leaders feel that panicky reaction of rank and file hinders control and responsible leadership doubly difficult. Most healthy development, however, is apparent realization by leaders of Peoples and Socialist parties that indulgence inward political recriminations and muck-raking, which reached alarming proportions last week, must stop. Concern with stability of coalition reported main reason for Foreign Minister Gruber’s return from London. Raab, Ludwig and other influential Peoples Party spokesmen known to share his view. Not unlikely that some formal reaffirmation of coalition will be forthcoming within next week (or so).

Labor unrest referred to above sparked by failure of 1,800 calory ration. Work stoppages and demonstrations apparently spontaneous, but Communists have exploited with usual determination, using USIA factories as bases of operations. Discontent with price wage situation contributory factor.

On this issue, position taken by top leadership of trade unions and Labor Chamber, both Socialist-led, constitutes controlling factor in official Socialist Party position. No sign of wavering in widely publicized stand of top leadership either political party. Stand of Labor and Socialists include: opposition to wage increase; opposition to agricultural price rises as presently proposed; pressure for lowered industrial prices and elimination of middleman’s profits; increase of ration schedule to 1,800 calories and strong measures to insure deliveries and distribution to meet ration call-ups. Both parties have tended in last weeks to become rigid in, their attitude on these issues. Labor seems to be ready to get down to cases on any possible compromise solution on agricultural delivery problem not involving break in price wage front. Conviction remains, however, that main responsibility rests with industrial and agricultural leaders, some of whom are accused of putting group and political interests ahead of national interests. Major point made by Labor is fast solution must be reached on agricultural price and delivery issue since deliveries certain to grow worse as long as talk of major price rise gives farmer incentive to wait and see. Labor’s refusal to compromise on other issues makes it appear unlikely that there will be retreat on price wage stand short of rupture in coalition.

Psychological: Communist coverage of London negotiations on Austria continue to stress Anglo-American “disinterest” and delay tactics, inspired by desire to maintain occupation of Austria indefinitely. This attitude said to have been strengthened by developments in Czechoslovakia. Success of Communists in neighboring “Peoples Democracy” utilized in attacks on Socialist and Peoples Parties for banding together with Americans in fear-inspired anti-Communist [Page 1386] front. Much-played propaganda themes were non-fulfillment by Austrian Government of promised ration increase to 1,800 calories and wave of strike threats protesting bad food conditions. General Kourasov’s proposal for general amnesty for less-incriminated Nazis also given great prominence. Radio RAVAG (government-owned, Russian-censored station) gave unmistakable Soviet slanting to its foreign news coverage, particularly in case of Czechoslovakia. “Moscow to Austria” re-broadcasts dealt with America’s intention of cutting Austria off from her natural ties with East, with Peoples Party preference for Marshall Plan to state treaty, and with “Marshallization of Austrian culture”. … [Here follows short report on military and subversive activities.]

PolAd concurs.

[ Keyes ]