740.00119 Council/8–549: Telegram
The United States Deputy for Austria at the Council of Foreign Ministers (Reber) to the Secretary of State
3098. Delaus 216. From Reber. Mallet this afternoon reported to Berthelot and me results of his interview with Zarubin last night.
In their discussion of points of importance still outstanding on Article 35, Zarubin said he failed to understand Western preoccupation with respect to industrial equipment since when Soviets agreed to cede properties held as German assets and relinquish war industries [Page 1114] enterprises this meant equipment of both as well. He insisted, however, Soviet draft was clear on this point. As regards transportation equipment Zarubin continued to maintain this was not a subject for discussion by deputies as Paris communiqué1 failed to mention it, but should be regulated in bilateral negotiations with Austria.2 He insisted that Soviet position in respect to other points in this article was in strict conformity with Paris agreement and gave no hope of any modification except insofar as DDSG leases were concerned. In this respect he gave positive assurance that Soviet Union was not asking for anything not owned by DDSG and that, if as result of further study now in process, it was ascertained that DDSG only had leaseholds on certain properties, these would be all which the Soviet Union would claim.3 When Mallet asked him what would happen if we failed to reach agreement as to the extent of the DDSG interest, Zarubin evaded the question. Zarubin argued that the attitude of the Western deputies on Article 35 gave little hope of agreement and claimed he could not understand their resistance to the legitimate claims of the Soviet Union.
When Mallet endeavored to discuss other unagreed articles explaining that the British delegate [delegation?] in particular attached importance to the satisfactory settlement of Articles 27 and 42 as a minimum, Zarubin replied that once agreement was reached on Article 35 he foresaw little difficulty in respect of the others.
Apparently this conversation has strengthened British belief that treaty is not possible without acceding to Soviet requirements in respect to oil properties and other clauses in Article 35. British are at present endeavoring to obtain estimate of extent of additional burden which compliance with these requirements would put on Austria and will place before Bevin upon his return about August 14 the necessity of deciding whether this additional burden outweighs the desirability of obtaining a treaty at this stage. They are inclined to feel at present that the advantages of prompt treaty settlement are paramount, and have asked the Austrian minister to ascertain the views of his government in this respect. I took occasion to point out that mere acceptance of Soviet demands for Article 35 at this time did not necessarily assure a treaty, and expressed serious doubts as to possibility of accepting at deputies level compromises on matters such as oil properties and transportation equipment since Soviet demands place a heavier burden on Austria than had been contemplated in Paris.
Sent Department 3098, repeated Vienna 205.