740.00119 Council/4–348: Telegram

The United States Deputy for Austria at the Council of Foreign Ministers ( Reber ) to the Secretary of State

secret   niact

1341. Delsec 1656. At meeting with British and French today, it was tentatively agreed that on Monday three delegations would seek [Page 1488] to return to discussion of Article 35 as whole instead of concentrating on lump sum and that following concessions would be made.

1.
British would declare readiness to make concession on oil production if Soviets willing in principle to make counter-concession, it being understood that in event Soviet willingness US would offer to split difference equally US 58%.
2.
British would offer exploration area in addition to that contained in their paper March 11 designed to raise percentage to about 47.
3.
Subject to subsequent agreement upon conditions already specified, US would declare willingness to raise lump sum provided Soviets willing to (a) accept Austrian assets ex-enemy countries in part payment, and (b) give Austrian option to pay in goods a percentage of all but first two annual installments of 25,000,000 each.
4.
US would declare willingness to allocate to Soviets a refinery in addition to Voesendorf and Korneuburg, withdrawing insistence on inclusion of Hauskirchen Topping plane plant, and French would agree to cession of Moosbierbaum together with cracking plant added thereto by Soviets.
5.
On DDSG previous French offer to accord Soviets free use of port facilities in Vienna in addition to DDSG assets in ex-enemy countries would be repeated.

If Soviets accept conditions in (3), it will be necessary at an early stage to mention a specific figure. In such circumstances USDel should be prepared to agree to increase lump sum up to say 130 million, which would include at least 15 million derived from Austrian assets in ex-enemy states. We cannot avoid eventually making concrete offer on lump sum as well as on oil, et cetera, since failure to do so would be construed as act of bad faith. USDel sees no way of proceeding to discussion other articles of treaty until substantial agreement reached on lump sum and percentages in Article 35, or of breaking oil negotiations on Article 35 unless after considerable concessions by three western delegations Soviets remain intransigent.

Sent Dept as 1341, repeated Vienna for Keyes and Erhardt as 53.

[
Reber
]
  1. Not printed.