No. 478

863.131/2–1451: Telegram

The United States High Commissioner for Austria ( Donnelly) to the United States Special Representative in Europe Under the Foreign Assistance Act of 1948 ( Katz), at Paris1


207. Figl called me to his office this morning to discuss very important matter. When I got there I found Figl, Schaerf, Gruber and Margaretha. Figl said he had just received a copy of a circular letter sent today by Obersterechnungshof (supreme accounting office) to six banks in Vienna. The letter, copy of which is being forwarded by airmail, requested detailed information about foreign exchange dollar and nondollar transactions from 1945 to 1950, names of all stockholders and other classified information. Figl said that contents of letter had been suggested by Johnson of ECA–Washington who has made frequent visits to Vienna in recent months in connection with the proposed investigation of dollar foreign exchange transactions. Thibodeaux received visit earlier today from the representative of Austrian Government National Bank who manifested great concern over the letter and indicated that if it became known to public it might result in a run on the banks. He further indicated that letter certain to become public and widely advertised in Communist press because of inevitable information leaks in banks. Neither USCOA nor ECA had prior knowledge of the letter or of any plan to send out such an inquiry.

Figl and his colleagues said that if letter became public and if it became known that Austrian Government at the suggestion of US [Page 1025] Government had employed an American accounting firm to conduct the investigation it would prove most embarrassing to the government, would impair financial stability of the banks and might result in a run on some of them. He added it would take months to complete investigation called for in letter. He said further that Communists would take full advantage of the development to further embarrass the Government and that it would aggravate the situation which is already complicated by unemployment, high cost of living, shortage of raw materials and impending presidential elections. Figl and his colleagues were very careful to point out that they are in complete accord with objectives of the investigation but that they felt that the methods should be modified.

Figl said the government would today recall all copies of circular letter and I told him I perceived no objection to this procedure. They said they would try to prevent letter from being published but expressed some fear that letter may already have fallen into hands of Communists and Soviets.

In view of this development I suggest that OSR postpone the arrival of the accounting firm in Vienna and that OSR send Ward and Johnson to Vienna to discuss matter with High Commissioner and ECA. Thibodeaux concurs.

  1. Repeated to the Department of State as telegram 1760, which is the source text.