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

CFM Files: Lot M–88: Box 144: Tripartite Ministers Meetings

Memorandum of Conversation, by the Secretary of State ¹

top secret

[ Washington ,] September 15, 1949.

Participants:	Mr. Bevin
	Sir Roger Makins
	Ambassador Franks
	Mr. Schuman
	Ambassador Bonnet
	Mr. Acheson
	Ambassador Jessup
	Ambassador Murphy
	Mr. Williamson
	Mr. Reber
	Col. Byroade
	Mr. Satterthwaite

Austria ²

I said we might take up Austria first on the items of the Agenda as it was the most troublesome. I asked Williamson to explain from charts the economic position of Austria, These charts clearly demonstrate, we think, that if we yield any on our position with the Soviets, Austria could not have a self-supporting economy.

Reber said the principal difficulties which have prevented the carrying out of the Paris agreements have arisen in connection with oil rights, shipping, and an adequate supply of rolling stock. The Soviets claim 60% of the area of the oil exploration lands but this 60% includes nearly all the lands which hold any promise of future development. We are in a dispute with the Soviets also over refineries, over the capacity of several of the plants, and over which ones they should get. The Soviets are allotted 420,000 tons capacity. They claim our estimates of capacity are too high but we think that their estimates are too low. So if the Soviet’s claims are met, Austria would have to be an importer of some 30,000 tons a year, with the resultant drain on her economy. The Soviets claim the two most modern refineries and the Lobau pipe line which runs from the producing areas to Vienna. We claim that the pipe line is not a part of the refinery, and should become a common carrier under Austrian control.

With regard to shipping properties, the problem is that the Russians want leases in perpetuity. The problem is not what properties the Russians get, but the fact that leases in perpetuity would give them an indefinite foothold on the Danube.

The Soviets refuse to discuss the turnover of rolling stock to Austria. They have over-marked 500 locomotives and a large number of freight cars as war booty. We feel we must insure that Austria has an adequate supply of both. The Paris communiqué³ is silent on rolling stock; therefore the Soviets claim it is beyond the competence of the deputies to discuss it. It seems clear that rolling stock does come within the competence of the deputies; that we were right and the Soviets were wrong. Reber reminded me that Vishinsky told me in Paris that the deputies would discuss this question.

I said I thought we were pretty well agreed on the producing oil properties, but that we were not on the fields for future exploration, since the 60% claimed by the Soviets contained nearly all of the probable producing areas. Reber said if the Soviets agree to an equitable division of the principal exploration area, say 60–40, once the principle of division is accepted, the experts should be able to settle the terms of division in 24 hours. Schuman asked what was the production in the fields for exploration claimed by the Russians and Reber said it was very small, but that all of the production and refining there was, was under Russian control. I said that since the pipeline would serve both Austrian and Russian properties and crosses areas to be assigned to both, it seemed to us vital that we should stick to our contentions on the pipe line as well as the exploration areas.

Bevin said that the British were concerned with Russian troops staying in Austria and that the main point seemed to be to get them out. If we don’t get a treaty, will they stay on? The British do not want to give in to the Russians, but there, may be danger of partition of Austria. If we continue to press for our version of the unsolved points, are we not likely not to get them and give in in the end anyway? The Austrians say that they want our troops out, but do they? Are we justified in taking a risk on the terms of the treaty if by doing so we get the troops out? Bevin raised these questions but did not answer them decisively. He said that visitors returning from Austria had told him that the Austrians do not want the troops out. He said he would be willing to stick on anything (in the treaty) if the result would be to get the Russians out.

Schuman said that he too felt it was important to get the Russian troops out of Austria. He agreed with Bevin that an agreement among the Four Powers should be reached before the elections,⁴ but he thought that Austria should not be weakened too much just to get the Russians out. He thought it would be useful to make every attempt to get the concessions we wanted from the Russians and that we should make further efforts between now and October. He said the USSR often gives up unexpectedly. He said Vishinski’s coming to New York will give us an opportunity to press one or two of the most important points. He thought we must protect the Austrians even against themselves. Bevin inquired whether we should hold out for the total we wanted of the locomotives or compromise. Reber said as a possible compromise Austria could get along perhaps with 300 of the 500 locomotives but the Soviets won’t discuss the question at all. Schuman interposed that before the Soviets could discuss the problem they required the decision of Vishinski. Bevin said the problem was not only on the amount, but whether there would be discussions and inquired whether the Austrians needed all of the 20,000 or so freight cars. Reber said probably not, some of the old ones they now possess can be repaired.

Bevin then returned to the Danube shipping problem and asked Reber to read the pertinent part of the communiqué. After Reber had done so, Bevin said that it seemed the only asset was the lease and inquired what the legal position was; that is, is the right to renew an asset? If so, then all rights must go with the leases. Are the Soviets claiming more than that? Are they claiming a freehold? I said I thought they were and Bevin said he didn’t understand it that way.

He wondered whether we were trying to substitute a composite period for rights to renew. Bevin thought if the lease is to be for an initial fixed period which also carries indefinite renewal rights you have lost something of value if you substitute a total fixed period with no renewal rights. Reber said that in no case was there a continuous automatic right of renewal. Some leases have optional rights, but these can be refused. Bevin requested that this point be checked. Reber again said that what the Russians want is the right to extend the leases for an indefinite period of duration and Bevin wanted to know whether that was a set-off for a composite period. I said that I understood our position to be that we wanted to turn over to the Soviets exactly what the shipping companies had, no more, no less. The Soviets said that this is not enough, that they wanted the lease in perpetuity which is something additional to the original lease. Bevin said he thought the safe course was that they turn over what the shipping companies had. I said we had better not move from that position. Reber said that some of the leases even with renewal rights are short-term leases. In some cases renewal possibilities exist and in some they do not. Bevin asked whether Austria would be in a position to build other docks. Reber thought that they would.

On the question of refineries, Reber recalled that the Paris agreement provided for the transfer to the Russians of refining plants with a capacity of 420,000 tons, but that the Russian estimates for the capacity of some of the plants are lower than ours. The Russians claim three particular plants, the best ones, and then say arbitrarily that their capacity adds up to the total they are supposed to have. To let them have the Lobau refinery might be a reasonable concession. The Soviets want Lobau, which was built in 1941 by companies owned by U.S. and British interests, Nova which is claimed by French interests and one other refinery. I said I thought we might give in on the refineries; give in on the oil lands for exploration except in the main field, where we should insist on something like a 60–40 division; insist on pipe line rights, and make the Russians talk with us on the locomotives and freight cars. Bevin agreed to this. He said that the shipping company leases should be handed over in the exact form that the Danube Shipping Company had them and to hold out a long time on this. I agreed with Bevin and Schuman that there should be no bargaining here. Bevin said he did not want the Soviets to be able to use the Austrian Treaty as an excuse for a new CFM meeting, and then maneuver the Austrian Treaty to the bottom of the agenda, putting Japan, Germany and China first. If this can’t be settled by the deputies, a new forum outside of the CFM is needed. Jessup said that Vishinski had told Kirk he looked forward to informal conversations in New York—he did not say on what—, that it is hard to do business: in the Assembly in the spotlight of publicity. Bevin said he was in favor of talking with Vishinski informally but it must be kept on an informal basis. While the Ministers were in New York, they would assist the deputies. Schuman agreed and it was left that we all were in favor of informal meetings. Murphy said that if the Russians agree to the meeting of the deputies on September 22 they could go as far as possible and then refer to the Ministers while they are still in New York. Bevin then warned that Vishinski might hold up the treaty on something else, such as rearmament, settlement of UN property or something else. Reber said there were additional problems as regards employment of foreign technicians, UN property, displaced persons and repayment for civilian supplies. The first two mentioned were raised in the basic note to Moscow⁵ so must be part of any settlement. Bevin then said shouldn’t we do our best to settle the remaining points and I agreed. Bevin said he would like to see what all the points looked like. I said we cannot compromise on the employment of foreign technicians. The Soviet proposal would completely preclude a MAP mission on rearmament. Reber said there were no other points on the military side as far as the terms of treaty are concerned, but that 90 days after the peace treaty all occupation troops have to be out. This is too short a time to organize and train the minimum force required for police purposes. Russian consent is necessary if Austria is to start training before the treaty goes into effect, and the Russians say the deputies are not empowered to decide this. Bevin said the Russians might be right on this point. Williamson then said that it takes about two years to recruit 53,000 men, but about 27,000 can be found on the first call-up as soon as Austria has a right to form an army. We think 27,000 men can be trained in three months, but that does not solve the equipment problem for which another year is needed. We can’t ship equipment to Austria for the Austrians. I suggested we might get the equipment and store it in Germany and though there is no legislation yet to procure the equipment, this is taken care of in the present MAP bill which would permit us to ship and procure this equipment, although we couldn’t transfer it in advance of the treaty’s ratification. A simple legislative change will permit the transfer. The appropriation contemplated is big enough to equip 27,000 men. If we have a little time before the treaty is signed, we can take care of the security problem. Bevin agreed. Murphy asked Bevin about the contemplated 5,000 men of the Austrian Air Force which the RAF would train. Bevin said that while he wanted to get technicians into Austria the Air Force men could be trained elsewhere, and the equipment is not a problem.⁶

Reber said that on the problem of UN property, the Soviets have assured us that when the German claims under Article 35 are settled, we will be taken care of on UN property claims. Bevin said we should have it in precise terms and I said this was one of the points we should, insist on.

Reber said that on repayment for civilian supplies, Austria has already acknowledged certain claims but the Soviets will not agree to specify the amount of their claim in the treaty which would mean that Austria would have to sign a blank check. We have waived our own claims. On displaced persons, the Soviet’s proposals would deny relief to certain categories and some 60–80,000 persons might then be forced out of Austria. The Soviet proposal is so loosely drawn that the Soviets could insist upon the denial of relief to almost anyone. The best solution might be to leave this question out of the treaty and rely on Austria’s acceptance of UN requirements. The Soviets claim many people who are hostile to the Soviets have taken refuge in Austria. We certainly can’t yield on forceful repatriation.

Reber said that on the arbitration clauses, the Soviets have agreed on a third arbitrator but not on how he should be chosen if Austria, arid the Soviet Union do not agree on the selection. They say the case will never arise. Bevin said he did not think this was a sticking point. I said that there are so many disputed points and chances for disagreement in the treaty, the question of arbitration is a very important one. Reber said that the Austrians say that as long as a dispute is unsettled there is nothing the Soviets can do about the disputed point. Bevin and Schuman agreed with me that we could not decide this point now. Reber said the Soviets claim Austria is not required to acknowledge the capital indebtedness of the pre-Anschluss loans. Bevin said he would not agree to this. The Russians have no right to say what the Austrians should do in the future about their loan obligations.

Murphy suggested that a working party be put to work on these points and report back. Bevin and Schuman agreed with me that this would be a good idea and that it should be done as soon as possible. Franks suggested that since the US has the people available here in Washington, we should produce a draft for comment by the British and French. This was agreed to.

1. This memorandum was prepared by Satterthwaite.
2. In previous conversations with Bevin and Schuman, Secretary Acheson had considered the North Atlantic area, Europe, the Middle East, and the Far East. For documentation on these conversations which started September 13, see volumes iv and v.
3. Under reference here is the Communiqué of the Sixth Session of the Council of Foreign Ministers, June 20, p. 1062.
4. For documentation relating to the Austrian national elections, October 9, 1949, see pp. 1206 ff.
5. Transmitted in telegram 654, supra.
6. For documentation relating to the formation and equipment of Austrian security forces, see pp. 1236 ff.