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

No. 504

ECA message files, FRC 53A278 Vienna: Telegram

The Acting Economic Cooperation Administrator ( Porter) to the ECA Mission in Austria ¹

secret

Washington, August 3, 1951—9 p.m.

Ecato 446. Subject—ECA Policy Toward Austria. Reference—Mission and OSR cables re (a) level of 1952 aid (b) increase in grain prices (c) 1951 counterpart program (d) U.S. coal import program. Part IV of IV Parts.

g. Coal.

1. Various estimates coal requirements for FY 1951/52 from U.S. given your Toeca 482² involve tonnages and dollars far in excess aid which will probably be available this purpose. Size these estimates indicate there is misunderstanding objectives and limitations coal program for Aust. Program definitely intended as emergency measure only and shld be implemented such a manner Austs not encouraged believe they can rely heavily U.S. to replace coal normally obtained various resources Europe.

When both size 1952 appropriation and results Polish negots known, Aust coal program will be re-examined. Until that time no commitments as to total amount coal which ECA prepared finance shld be made to Aust Govt.

2. Aust bargaining position already has been strengthened by issuance PA’s in previous quarter in amount $3.74 mil cover approximately 350,000 tons (includes 100,000 tons for VOEST 3rd blast furnace) of which 250,000 tons remain to be shipped this quarter. Your recommendation additional aid be provided immediately has been adopted after careful consideration all known facts and PA in amount $2.1 mil covering approximately 200,000 tons issued against July funds. Aust, therefore, has funds to purchase and ship 450,000 tons which is more than one-half of 850,000 tons now programmed this purpose for entire fiscal year 1951/52. Believe this coal program will ease pressure on Aust sufficiently to permit them make every effort secure commitment Poland for as much coal as possible and still strengthen strategic terms of trade. Mission shld stress to Austs importance of keeping U.S. Govt fully informed all stages of negots.

Illustrative aid figure of $145 mil for Aust includes full cost of U.S. coal to be financed by ECA. In any event counterpart deposits will be required against total price ECA financed coal.

Mission requested to submit comprehensive programs by 27 August setting forth specific measures which Austria might take to implement action program so that plans may be developed for relating September allotment to policy outlined this cable.³

Porter

1. Repeated to Paris for OSR.
2. Telegram Toeca 482 informed ECA/W that the dollar coal imports were estimated at 600,000 tons to be financed by $13,200,000 of direct aid with freight and 300,000 tons for VOEST with $6,600,000 of free dollars with freight. (FRC message files, FRC 53A278, Vienna)
3. In telegram Repto 3959 from Paris, August 11, the U.S. Special Representative in Europe, Katz, noted his concurrence with ECA policy toward Austria as set forth in telegrams Ecato 443–446, August 3. Two weeks later Katz informed ECA/W in telegram Repto 4207, August 24, that he had discussed the differences of opinion over policy toward Austria with Clarence E. Meyer, Chief of the ECA Mission in Austria, and had told him that the four telegrams outlining ECA policy expressed the views of Foster, Bissell, and himself. Meyer was warned that $145 million in aid was improbable in light of recent Congressional action and that $120 million was a more likely maximum. (ECA message files, FRC 53A278, Paris)