740.00119 Control (Austria)/4–2249: Telegram

The United States High Commissioner for Austria ( Keyes ) to the Department of the Army


P 3275. From USFA signed Keyes for JCS to State from PACG.

1. Subject is Allied occupation costs for 1949.

2. Two additional meetings by the four Deputy High Commissioners to determine occupation costs for 1949 have been held on 11 March and 8 April; and one meeting of the four High Commissioners on 13 April. The discussions centered around the US proposals to (1) examine the utilization of monies received from the Austrian Government to cover occupation costs in order to determine a common basis for their computation, and (2) study the financing capacity of the Austrian Government in order to determine the effects that further payments might have upon the Austrian economy.

3. At the fifth meeting 11 March the Soviet Representative Zheltov stated his desire to restrict the discussion to consideration of specific percentages of Austrian federal budget. The British and French members Winterton and Carolet stated their intention to take the US estimates into account when computing their requirements but preferred to limit the discussion to percentage figures. The British and Soviet deputies stated their willingness to reduce their proposed percentages to 10 percent of the 1949 budget if the US would adopt a figure of 8 percent. The US Deputy Balmer stated that he was not in a position to raise his original figure of 6.5 percent without further instructions.

4. At the sixth meeting with Brigadier Edney representing the British element the US deputy again raised his proposals and cited the US study of the matter as resulting in figures for salaries paid to Austrian employees; rent and utilities; supplies and engineering facilities; transportation; communications; civilian censorship; and claims against the US. In the absence of similar estimates from the other elements he could find no basis for raising his figure of 6.5 percent which approximated the amount expended as civilian occupation costs by the US elements. After further inconclusive discussion the following report was submitted to the High Commissioners:

  • “(1) The occupation costs for 1949 will be taken from the annual Austrian budget which was fixed for this year in the amount of 7.531 million schillings.
  • (2) The allocation of funds to the four elements will be done on the principle of ‘equal split.’
  • (3) It was decided that the percentage for occupation costs would be calculated on the basis of the total sum of the budget and will remain secret.
  • (4) The Austrian Government in view of the secret nature of the above-mentioned decision will be informed about the payment of the occupation costs for the first two quarters of 1949 now and later for each quarter separately.
  • (5) As to the percentage of the occupation costs for 1949 the position of the elements is as follows: the British and Soviet elements propose 10.5 percent; the French element 9.5 percent; and the US element 6.5 percent.”

5. 13 April the US High Commissioner again took up the dual proposals of the US element, and stated that if one or more elements include as legitimate occupation costs certain items not so regarded by other elements, these divergencies would form a basis for their discussion. After defining occupation costs consideration could be given to the ability of the Austrian Government to pay this sum. The Soviet High Commissioner basing his position on three years’ experience considered it inappropriate that the various elements should examine each other’s requirements. In regard to the second proposal that of determining the ability of the Austrian Government to pay he pointed out that the financial circumstances of the Austrian Government in the past were more difficult than at the present time and that no such question had previously been raised. He stated his desire to proceed with the study of percentage figures. The British High Commissioner stated his readiness to discuss the definition of occupation costs but suggested that the question of the ability of the Austrian Government to pay should be considered afterwards. The French Representative Carolet was in agreement with the British position. The Soviet High Commissioner saw no reason and no basis for this procedure. He charged that the US was trying to establish the purposes for which the various elements were spending their occupation cost allocations and that this constituted interference. Although the US, British and French High Commissioners agreed to instruct the deputies to prepare itemized lists of specific occupation costs for comparison in determining an agreed basis the Soviet High Commissioner insisted upon discussing only the specific percentage figures. The US High Commissioner made it clear that he could not raise his proposal of 6.5 percent of the Austrian budget without some justification on the part of other members. No agreement was reached.