Foreign Relations of the United States, 1951, Europe: Political and Economic Developments, Volume IV, Part 2

No. 482

863.00R/3–2951: Telegram

The United States High Commissioner for Austria ( Donnelly) to the Secretary of State ¹

secret
priority

Vienna, March 29, 1951—6 p.m.

2157. 1. I strongly recommend the Dept’s endorsement of the level of economic aid of approx $185 million proposed for Austria for 1951/52 in Vienna Toeca 209 rptd Torep 238,² which was prepared jointly by this office and ECA mission.

2. On the basis of the present and prospective situation as reflected in various despatches to the Dept, I believe that any large reduction in aid for 1951/52 as suggested in Ecato Vienna 131 of Mar 22³ would mean a diminution in production and a serious aggravation of an already overly large unemployment problem. This in conjunction with critical raw material situation and rising prices would inevitably lead to unrest constituting fertile grounds for Soviet inspired Communist exploitation.

In my judgment, the importance of maintaining population’s will to resist Sov pressure, the psychological burden of which has multiplied greatly after elapse of six years, strongly counsels against drastic reduction in aid to level which could impair present political and social stability and solid economic progress that Aust has already achieved with US assistance and despite Sov obstruction. Such a result would be welcomed by Sovs, but would create additional problems for the coalition govt which could exceed capacity of the two parties to solve.⁴

Donnelly

1. Repeated to Paris.
2. Telegram Toeca 209 informed ECA/W of the Mission’s proposal that about $185 million in aid be extended to Austria and that all aid be on a grant basis. (ECA message files, FRC 53A278, Vienna)
3. Telegram Ecato 131 informed the ECA Mission of ECA/W’s proposal of $93.8 million in direct ECA aid to Austria. (ECA message files, FRC 53A278, Vienna)
4. In telegram Ecato 168 to Vienna, April 7, the ECA Mission in Austria was informed that there was a difference in views as to the level of aid which Austria required to support its increased level of production and to reduce its unemployment. Whereas the ECA Mission recommended $185 million, ECA/W was prepared to use the figure of $145 million in its presentation before the Bureau of the Budget committee. (ECA message files, FRC 53A278, Vienna) In telegram Repto 1629 from Paris, April 11, the Special Representative in Europe for the ECA expressed his agreement with the decision to use $145 million as the basis for its presentation rather than $185 million. (ECA message files, FRC 53A278, Paris)