763.0221/8–2351: Telegram
The United States High Commissioner for Austria ( Donnelly) to the Secretary of State 1
728. Brit and French reps Labouchere, Daw and Lalouette today jointly called upon me to discuss occupation costs. They proposed that current level of 140 million schillings per element for calendar 1951 be increased by 15 million schillings per element on grounds of increased costs; that per element level for 1952 be established at 200 million schillings with escalator clause which would permit seeking increase this level if necessary. Brit estimate their 1951 deficit at 28 million of which they willing to absorb 13 million. On basis previous AC decision Sov element would perforce receive comparable increases.
I pointed out to them dim view we take of Austria’s near-term financial and economic situation, anticipated curtailment of US economic aid, probability of further upward adjustment wages and prices, precarious coal situation, and govt subsidy problem inherent in current meat crisis. I further expressed view with which Brit and French concurred that it would seem occupation cost problem should be considered at high level in Wash, Paris, and London. Both Brit and French reps expressed views that respective troop [Page 1062] strengths in Aust should be increased rather than curtailed. I cautioned them that Wash would be against increased occupation costs and stated that although I would report our conversation, I would recommend against this proposal.
Discussion disclosed Sviridov (Sov) some six weeks ago implied to Brit he anticipated their request for higher occupation costs payments while French indicated Aust Finance Min expects such demands based on higher living costs.
- Repeated to London and Paris.↩