No. 487


Memorandum by the Deputy Director of the Office of Western European Affairs ( Williamson) to Robert E. Asher of the Office of European Regional Affairs1


Subject: Raw Material Shortages in Austria.

Attached for your information is a copy of an aide-mémoire handed to the Department on May 3, 1951, by Dr. Goertz, Austrian ERP Mission.2 This aide-mémoire, which you will remember, was requested by me on the occasion of the visit in my office of Dr. Mautner-Markhof, describes in detail the critical shortages of some 15 basic raw materials which currently exist in Austria. A copy of the statistical material in this aide-mémoire has also been given to Mr. Craig of the Economic Cooperation Administration.

While we are well aware of the limited influence which the Department has in securing priority assistance for foreign governments, because of the serious economic situation which we anticipate may develop in Austria this summer as a result of the lack of these raw materials, we wish to be certain that the exceptional situation in Austria is known to the proper allocating authorities, and that the Department has taken all possible steps to bring it to their attention.

We are particularly disturbed at the increasing pressures which are being placed upon Austria by the Soviets, pressures of both an economic and political nature which have been mounting in recent weeks, and are fearful that these pressures, combined with rising unemployment could seriously threaten political stability. Unemployment in Austria today is declining due to seasonal factors, and the trend is favorable; the level in April was 1.2% below that of [Page 1037] the comparable month of last year. However, failure to receive reasonable amounts of these raw materials at regular intervals could reverse this trend and result in widespread plant shutdowns and a major unemployment problem. We must assume that the communists would take every advantage of such a situation.

WE views the economic prospects in Austria over the next few months as critical, and capable of rapid deterioration. If our evaluation is correct, a delay of a month or two in delivery of these commodities would adversely affect the economic situation, for the flow of these commodities to Austria has almost stopped. To be effective, assistance is needed almost immediately.

In view of the above, we would appreciate your opinions as to how, and in what measure, assistance may be provided for Austria, and through what channels action to obtain this assistance should be made in order that an appropriate answer may be made to the Austrian Legation.

  1. Drafted by H.P. Dawson, Jr., of the Office of Western European Affairs.
  2. This 16-page aide-mémoire, prepared by the Austrian Legation, focused particularly on the critical shortages of copper, zinc, molybdenum, phenol and urea, and electrical sheets. (863.00/5–1151)