863.77/11–1748: Telegram
The Minister in Austria (Erhardt) to the Secretary of State
priority
1239. Austrian appeal in conversations between Figl and Zheltov (Legtel 1182, October 28 and 1193, November 2 and to ECA 164, November 12)1 to reduce current Soviet demands for 540 locomotives and 5575 freight and passenger cars has met adamant and apparently final refusal. Cabinet therefore decided yesterday to forward to AC text which it had held up pending outcome negotiations with Soviets. Minister of Communications2 simultaneously announced reductions railway traffic to emergency basis effective November 22.
Difference of opinion among both Austrian and USFA legal experts regarding legal justification Soviet claim will probably cause protest to be based primarily on economic effect and equity. None of stock now demanded by Soviets is Austrian mark but substantial proportion German. Many of these used during Anschluss within Austrian division Reich railways and may have been constructed in Austria. Regarding non-German stock, Hungary alone owes Austria about 14,000 units and removal non-Austrian cars leaves Austria in unfair bargaining position. After removal present Soviet demanded stock, there will still remain 715 locomotives and 3541 freight and passenger cars, some of which clearly Austrian, marked “CCCP” Soviet war booty mark. Presumably Soviets regard these also as subject to removal and subsequent demands are to be expected. Austrians therefore consider protest on general principles essential and we believe US element should give strongest support to such protest. Must be noted, however, that last winter Soviets removed 75 locomotives and about 2600 cars in spite vigorous protest by Austrians in AC.
As to economic effects, USFA experts incline to feel loss of locomotives (only 140 serviceable) not too serious but loss of cars considerably more so. Before Russian demand Austrian railways were filling freight car orders 80 percent or under. Removal 3500 serviceable cars would reduce performance at least another 10 percent. In Soviet zone alone effect much more marked as removal would comprise 3500 out of 15,000. Situation further aggravated by heavy seasonal demands [Page 1444] for movement potatoes and sugar beets. All present Austrian stock obsolete and suffering from lack of maintenance during German occupation. These facts offset argument that in some categories Austrian rolling stock, including however damaged units, actually slightly greater than pre-Anschluss. US position in supporting protest weakened by fact that OMGUS has demanded and refused postponement delivery 890 US Transportation Corps cars, of which about 150 already delivered. Demand technically correct but most unfortunate at this time. Furthermore, whatever may be reasons, only 1,000 TC cars were acquired by Austria under surplus property credits, whereas far greater proportion (including 890 now demanded) have been assigned under similar credits to German railways. In response inquiry ECA Washington, Vienna ECA mission with Legation assistance and concurrence, reported situation recommending at least postponement delivery TC cars. USFA made strong request along this line to OMGUS which was categorically denied.