740.00119 Council/4–1048: Telegram
The Acting Secretary of State to the Legation in Austria
346. Re Gruber’s note of Apr 8 giving Austrian views on lump-sum obligation (urtel 448 Apr 9 rptd London USDel 102)1 considered desirable for you to explain fully to Austrians US position on basis Ausdel 13.2 Please stress US has always endeavored to keep lump sum as small as possible in order to limit burden on Austria and safeguard its economic independence. Dept recognizes obligatory provision for payment in goods might under certain conditions make for excessive ties between Austrian and Soviet economies and thereby limit Austria’s freedom of action particularly vis-à-vis Western Union and ERP. Dept believes, however, protection may be had against these risks by (a) initial moratorium; (b) small or graduated payments over reasonable period of time; (c) option permitting Austria to pay in currency if it desires, and (d) satisfactory provision for settlement of disputes.
While value of production of USIA industries restored to Austria is appreciated and there would be no legal obstacles after Austria joins IMF to its efforts to obtain commercial credits with which to meet installments, we can give no assurance as to American help in payment of currency. Obligation on Austria for such payment would in fact represent for US difficult problem since it would doubtless give rise to criticism when treaty comes up for ratification that payments would be supported through ERP. Essential, therefore, to make plain to Austrian Govt reasons for our position on optional payment.
Sent Vienna as 346 rptd London as 1313 Ausdel 16.