CFM Files: Lot M–88: Box 247
Memorandum of Conversation, by the Assistant Chief of the Division of Central European Affairs ( Williamson )
| Participants: | Mr. E. J. Barnes, Second Secretary, British Embassy |
| Francis TV Williamson, CE | |
| Harold C. Vedeler, CE |
Mr. Barnes called to present the official view of the Foreign Office on the recent Soviet proposals on German assets in Austria which will be discussed at the forthcoming meeting of the Deputies in London.
The British Foreign Office considers that the percentages of oil production, prospecting, and refining claimed by the Soviets are much too high and should be brought down by negotiation. Mr. Barnes pointed out that the Soviet demands in this respect were approximately twice those envisaged in the original French compromise offer.
The Foreign Office also considers that the demand for the sum of $200 million, payable within two years, is preposterous, and could not be seriously considered by the Western powers except as a maximum figure which the Soviets expect to be whittled down; that it might be desirable to press for an Article which would enable the Austrians to pay any lump-sum in goods and in services over a long period of time rather than in hard currency.
The Foreign Office takes exception to the provisions of the Soviet proposals for the export of capital and products from the Soviet-held [Page 1454] oil enterprises, and considers that the last paragraph on the bilateral settlement of disputes is unacceptable.
In general, the Foreign Office was pleased by the fact that the Soviet proposals were presented within the same framework as the original French offer. Mr. Barnes pointed out that the proposals represented a decrease in the demands made originally by the Soviets in the Austrian Treaty Commission in Vienna. The Foreign Office stressed the fact that the Soviet demands were the maximum which could be even examined as a serious proposal and considered that they should be discussed seriously, but that hard bargaining would be required to prevent legalisation of any extensive Soviet foothold in Austria.
I pointed out to Mr. Barnes that the Department was in full agreement with the general observations presented by the Foreign Office concerning the extent of Soviet claims.