Foreign Relations of the United States, 1949, Council of Foreign Ministers; Germany and Austria, Volume III

740.00119 Council/6–1749: Telegram

The United States Delegation at the Council of Foreign Ministers to the Acting Secretary of State

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Paris, June 17, 1949—10 a.m.

Delsec 1909. At today’s secret session¹ Vishinsky agreed following terms settlement Austrian Treaty:

(a) Austria’s frontiers shall be those of January 1938.

(b) Treaty shall provide that Austria shall guarantee to protect the Slovene and Croat minorities in Austria.

(c) Reparations shall not be exacted from Austria but Yugoslavia shall have right to Austrian assets in Yugoslav territory.

(d) Rights to 60 percent of oil exploration and exploitation areas equivalent to 60 percent 1947 production areas shall be transferred to the Soviet Union subject to agreement on the specific properties involved.

(e) The Soviet Union shall receive from Austria $150 million in six years subject to the relinquishment to Austria of all property, rights or interests held or claimed as German assets and to a reciprocal waiver of claims and charges. Although the Soviets agreed to relinquishment of industrial and transportation equipment in Austria held or claimed as war booty, they qualified their acceptance by a note referring only to industrial enterprises of military character but agreed that the term could be further clarified by Deputies.

Vishinsky insisted upon full compliance with Soviet proposals that the USSR will receive 100 percent of Danube shipping properties in Eastern Austria (including docks in Vienna). That assets transferred to the USSR shall be subject to Austrian law but exempt from nationalization without a time limit, that export of profits may either be in the form of output or freely convertible currency, and that the settlement of disputes shall be through bilateral negotiations. He has refused to agree to any compromise on these points even at risk of jettisoning agreement reached so far, stating Soviets agreed to our proposal for frontiers on understanding they would receive satisfaction on the eighth point of their proposal.² He said his instructions on this point were explicit. At the end of tonight’s session, the matter was left with our insistence that these matters be referred to Deputies for further study and Vishinsky’s insistence that his instructions were that question of exemption of nationalization and right to export profits was essential part of Soviet proposal. He has, however, agreed to ask for further instructions from his government and states that no reply can be received before Saturday at the earliest.

Consultations with British and French tonight indicate that, although they attach great importance to preventing Soviet Union through acquisition of permanent dock facilities in Vienna from obtaining strategic foothold there and are likewise opposed to settlement of disputes by any other means than arbitration, they have some doubts whether these two issues should prevent agreement on treaty.

Gruber, too, was consulted this evening, while strongly urging that we continue to endeavor to exchange ships for dock facilities, likewise feels that failure to achieve agreement on this point should not prevent the conclusion of treaty. He points out that Austria has other facilities to maintain river traffic with the West and the Danube traffic with the East is in any event dependent upon Austria’s relation with the Soviet Union. He does not attach the same importance to the settlement of dispute procedure as do the Western delegations. He is, however, consulting Vienna tonight and will give us the final views of his government Saturday morning at the latest.

We are meeting with British and French later today and will comment further on Soviet position but would welcome prompt transmittal your views.

Sent Department for action; repeated (for information) London 410, Moscow 138, Vienna 42.

1. The 21st (6th Restricted) meeting of the Council, June 16.
2. The reference here is to the Soviet proposal on German Assets in Austria, CFM (D) (L) (48) (A) 1, January 24, 1948, which is printed in Foreign Relations, 1948, vol. ii, p. 1448.