840.50 Recovery/4–548: Telegram

The Chargé in Austria (Yost) to the Secretary of State


423. Following enactment ERP, it is believed Department may wish to bring to attention of ERP administrator as soon as he is designated, respects in which Austria’s position differs from other participating countries. Austria can neither be considered same basis other sovereign countries nor bizone or French zone occupied Germany.

Austria has sovereign government which is however, to some degree restricted in its authority by presence four occupying forces. Agreement each of four high commissioners necessary to give practical effect on country-wide basis to many measures essential to implementation of ERP. Western powers policy is to recognize sovereignty of government and reduce interference by occupation forces to minimum. Policy Soviets is to interfere to fullest extent possible often without regard to control agreement in order to handicap Austria’s efforts at recovery and to neutralize US assistance.

Restrictive provisions in PL 84 seriously handicapped realization of objectives of act. Similar restrictions on application of ERP would probably create greater difficulties in implementation because of open Soviet hostility to ERP, their determination to combat it by all possible means and because of broader scope of ERP. Sufficient latitude must be allowed to administration of ERP in Austria to assure achievement of its basic purpose and over-all US objective.

Under terms of control agreement four high commissioners agreed pool all food both imported and indigenous for use of all Austria. Since Soviet Zone produces most of Austria’s indigenous food stocks any action by US giving Soviets excuse to block deliveries from their zone to Vienna and Western zones would increase burden on US by requiring additional US assistance or would cause privation, unrest and serious political dangers. Fact that quadripartite approval is required for food plan each four week period gives Soviets opportunity to seize upon any apparent discrimination on our part as excuse for illegal action on their part.

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We are convinced that assistance to Austria under ERP must be aimed at Austria as a whole and are confident that Austrian Government will cooperate in measures to avoid Soviets funneling off either ERP assistance or productive results of such assistance. We have no evidence of such funneling off of US aid so far, even under relatively relaxed provisions of PL 389.

Recent events and intelligence reports reveal that Soviets are laying plans to sabotage ERP and render it ineffective in Austria. It is important that administrator ERP appreciate situation in order that he may understand peculiar position of Austria in reference to other participating areas and in order that he may realize conditions for applying ERP to Austria in such a way that both its basic purposes and US objectives in Austria can be served. An attempt to administer ERP in Austria as if it were either wholly a sovereign country or wholly an occupied country would defeat these ends.

For your information see recommendations Paragraph Four, London’s 1099, March 17 and Vienna’s comment thereon in 343, March 19.1

Sent Department 423, repeated London for USDel 93.

  1. Neither printed; telegram 1099 recommended that ERP should have special clauses for Austria and should apply to the whole country (740.00119 Council/3–1948). Telegram 343 reported that Austria desired full participation in ERP and suggested the United States discuss Austria’s political and military role in Western European Union with the United Kingdom and France (740.00119 Council/3–1948).