740.00119 Council/2–1748
Memorandum of Informal Tripartite Discussion of the Soviet Proposal on German Assets in Austria by the Second Secretary of the Legation in Austria (Gannett)1
Mr. Marjoribanks opened the meeting by noting that the US Delegation had submitted a draft agenda for the Tripartite discussions (actually formulated by the British from the US note regarding holding Tripartite discussions),2 and that the UK Delegation had proposed certain additions. He suggested that three informal meetings be held prior to the Deputies’ meetings.
Mr. Marjoribanks indicated his desire to discuss the provisions of the Soviet proposal and the proposed agendas. Mr. Reber stated that he preferred to defer for the moment discussion of these topics, but indicated his readiness to examine the Soviet proposal briefly paragraph [Page 1464] by paragraph in order to determine whether each delegation understands it in the same manner and to formulate questions to be put to Mr. Koktomov for clarification; this was agreed. In the course of this exchange Mr. Marjoribanks noted that the Soviet proposal in general conforms to the framework of the French proposal, but that objectionable features include: 1) the figures specified, 2) the time limit of the oil concessions, 3) the time provision regarding the lump-sum payment, 4) the extraterritorial provisions, and 5) the bilateral negotiation of disputes. Mr. Marjoribanks added that he was prepared to discuss the Soviet proposal along with the French proposal and that in the UK view arguments to counter the Soviet position would have to be based on the necessity of reestablishing a free and independent Austria and Austria’s ability to pay a lump-sum while remaining a free state, rather than upon a definition of German assets. Mr. Reber said that the US Delegation is prepared to accept the French proposal as the principal term of reference and to examine the Soviet proposal as a modification, which must, however, have regard to Austria’s viability and to its ability to pay a lump-sum without placing a substantial burden upon any other country. General Cherrière noted that the aim of the French proposal—to remove Soviet claims to German assets in Austria—had been blunted by the provisions in the Soviet proposal, especially those regarding DDSG and the lump-sum payment, and suggested that the Soviet Delegation should be asked to state what it considers to be the advantages of its proposals over the French proposal.
Regarding the meaning of the Soviet proposal and questions for clarification, the following points were noted:
Paragraph 1
First subparagraph—Request list and map mentioned therein. What does “current production of oil in Austria” mean—concessions for areas in Eastern and Western Austria or just in Eastern Austria? The US Delegation noted the desirability of a cutoff date to prevent over-exploitation by the Soviet of properties to be returned by them.
Second, subparagraph—Request list and maps mentioned therein. What do the references to Potsdam and to areas presently in Soviet possession mean?
Paragraph 2
What would be the form of the concession contacts and under what conditions would they be forfeitable?
Paragraph 3
Request list mentioned therein. What date does the word “having” refer to?
[Page 1465]Paragraph 4
Request list mentioned therein.
Paragraph 5
It was generally agreed that this paragraph indicates Soviet interest in physical assets as opposed to shares. The UK suggested requesting from the Soviets a list of what they have in mind, and the US noted the desirability of a cut-off date.
Paragraph 6
Mr. Reber stated that the Soviets should be asked how they expect Austria to pay a lump-sum under the conditions set forth in their proposal. General Cherrière said that in this regard the three Western powers would have to decide before the Deputies meet what they are going to do with regard to their claims to German assets in Austria, particularly the form of renunciation, in view of provisions of the Paris Reparations Agreement. It was agreed to pass over this point for the present.
Regarding method of payment, there was general agreement initially to stick to the provisions of the French proposal providing for payment over a ten-year period to commence two years after the effective date of the treaty, and to examine other methods of payment than that set forth in the Soviet proposal. General Cherrière stated forcefully his view that the treaty should clearly provide in what form payment should be made in order to avoid danger of Soviet pressures and interference in the Austrian economy.
Paragraph 7
Request clarification regarding: 1) the phrase on alienation (does alienation refer only to assets confirmed to the USSR by the treaty), 2) the phrase “Austria shall not raise any difficulties.…”
It was generally agreed that Austria should be permitted to satisfy its minimum requirements, especially for oil, before Soviet production could be exported. General Cherrière noted that there is a difficult problem regarding the method in which the Soviets would be paid for the oil they produced which would be consumed within Austria.
Regarding the last subparagraph—Does the Soviet provision regarding the liability of assets to be confirmed to the USSR by the treaty refer to liabilities incurred before or after the Potsdam Declaration? Who would assume liabilities incurred since the Potsdam Declaration attached to assets taken over by the Soviet authorities in Austria during the present occupation but not to be confirmed to the USSR by the treaty? What is the date of transfer of assets involve in this subparagraph?
[Page 1466]Paragraph 8
It was agreed that there is no question regarding the Soviet intent in this paragraph.
The meeting adjourned until February 18, 1948, 11:00 A. M., at which time the two agendas are to be discussed.3
- The discussion was held at the Foreign Office. Present for the United States: Samuel Reber, Deputy, Lt. General Geoffrey Keyes, John G. Erhardt, Francis T. Williamson, Covey T. Oliver, Raymond Goldsmith, Lt. Colonel Edwin Kretzmann, John C. deWilde, Michael P. Gannett; for the United Kingdom: James A. M. Marjoribanks, Deputy, W. H. Lawson, M. F. Cullis, Colonel S. H. C. Lorie, F. A. Vallat, A. E. Abbott, C. M. Leitch and A. W. Southam; for France: General Paul Cherrière, Deputy, Robert Luc and C. Maisonnier.↩
- Not printed. The note contained the same points transmitted in telegram 502, supra.↩
- Two more Tripartite meetings were held on February 18 and 19, at the British Foreign Office. The first continued the discussion of the Austrian Treaty while the second considered Germany. The substance of this memorandum remained the basis of Tripartite policy.↩