740.0011EW(Peace)/1–2748: Telegram

The Secretary of State to the Embassy in the United Kingdom

secret

359. Reembtel 313 Jan 27.1 Please bring following preliminary views on Soviet proposals German assets Austria to attention Dean and Marjoribanks:

We consider preliminary talks before Deputies’ meeting desirable to reach agreement on basic policy problems involved in Soviet proposals. Tentative plans call for departure USDel Feb 11, arrival London approximately Feb 16, allowing minimum 3 days for conversations. Various questions will be submitted BritEmb here next week for transmission FonOff.

US willing discuss Soviet proposals along with French proposals or any others which may be offered to solve German assets question. Any agreement reached on compromise basis German assets must be contingent on satisfactory agreement other issues in treaty. If satisfactory progress is made on Art 352 we intend propose discussion other unagreed Arts. This decision based on assumption Soviets are willing negotiate on Austrian treaty. We have no definite idea on precise Soviet objectives but consider submission definite figures and decrease in demands from Vienna figures Summer 1947 may indicate desire to negotiate. We question the utility prolonging negotiations if Soviets do not recede from maximum positions contained in proposals.

US cannot agree to any settlement which provides extensive economic foothold by Soviets in Austria or which involves Austrian [Page 1455] assumption of obligations to Soviets which results in economic integration of Austria in East European bloc. Similarly, no agreement can be accepted which involves redemption of cash obligation by US Govt or Austrian debt to Soviets beyond Austrian capacity to pay within reasonable period.

Re para 5 Embtel 318 please assure FonOff US seeks definite settlement which is consistent with all international agreements respecting Austria. US genuinely interested in obtaining a satisfactory settlement and conclusion treaty permitting full exercise Austrian sovereign rights. We remain skeptical motives behind Soviet action in submitting proposals until these motives are displayed in course negotiations. We will not prolong negotiations on percentages of property interests if there is no apparent hope for settlement on all treaty issues, thus permitting Soviets to shift onus on Western States for failure to obtain treaty.

Marshall
  1. Ante, p. 1451.
  2. Article concerning German assets in Austria.