863.00/11–749: Telegram

The Minister in Austria (Erhardt) to the Secretary of State


1504. Legtel 1502 November 5.1 After long and heated discussions [Page 1236]Saturday and yesterday, Socialist and People’s Party negotiators reached agreement on composition new government which was approved by executive committee two parties today. Joint meeting scheduled this afternoon to name ministers and communiqué on new cabinet may be issued tonight.

Under agreement Socialists obtained new Economic Ministry controlling nationalized industries including railroads posts and telegraphs and electric power but excluding banks. Ministry will, however, be subject on policy matters to recommendations of 4-member commission (2 Socialists, 2 People’s Party) with differences between ministry and commission to be decided by cabinet as whole. As further balance Socialists yielded Ministry of Foods whose functions will go to Agriculture and accepted People’s Party demand for retention State Secretary in Interior Ministry.

Agreement generally regarded as victory for Socialists although moderate elements People’s Party appear not too dissatisfied with solution. Raab and right-wingers, however, are understood to have fought vigorously against acceptance Socialist demands and argued that formation new government could be postponed indefinitely unless Socialists backed down. Moderates who insisted delay would lead to deterioration internal situation and jeopardize treaty negotiations won out only when Figl threatened resign. Right-wingers expected abide loyally by party decision but obviously regard solution as first step towards complete Socialism in Austria and are privately implying that Figl is weak man who must be replaced by stronger party leader.

  1. Not printed; it reported that the negotiations on the composition of the new Austrian Government had been broken off on November 4, when the People’s Party had rejected the Socialist Party’s demands for stronger participation in economic affairs. (863.00/11–549)