763.0221/10–2551: Telegram
The Acting Secretary of State to the Legation in Austria 1
1078. 1. Unless info in desps mentioned urtel 14932 indicate to contrary, Dept believes will be impossible prevent Br and Fr from obtaining increase occupation cost for 1952 because of rigid stands being taken both Govs, and demands now made their budgets for rearmament and fulfillment NATO obligations. However, Dept seriously concerned over long-term implications approving such increases. Therefore, all measures short of open rupture in AC shld be used to persuade Fr and Br (1) forgo increases for 1951 or, (2) accept smaller increase for 1952, or both; also forego use escalator clause. Dept expects Br and Fr make some concessions from present positions.
2. Br and Fr shld be told they have real interest in stability produced in Aust by US aid program, and that further increases occupation costs may well jeopardize both aid Aust in 1952–53 and continuation present pay-as-you-go policy, as result Congressional reaction. Liberal payments received by Br and Fr in past have been possible through large US contributions to Aust econ, which stability was not thereby seriously affected. Reduction US aid, coupled with even larger demands by Fr and Br (and Sovs) may well jeopardize this stability. Success of an occupation substantially influenced by econ stability.
3. It shld also be pointed out that Sovs cld veto requested increases in AC and take position they are protecting Aust people from increase Western demands. Propaganda value such maneuver wld be extensive.
4. In attempt reach compromise you shld be convinced that additional funds granted to Br and Fr will be used exclusively for occupation purposes. In this connection as reported Legdesp 5003 are you convinced (1) 5,800 Aust employees minimum needed by Br? (2) Why should “pocket money” for Fr troops be paid from occupation costs? (3) Cld not Fr release domestic servants now paid from funds? These points shld be resolved at tripartite level and compromise, [Page 1075] or ultimate US acquiescence shld occur in tripartite discussions rather than open subj for debate in AC. When matter comes to AC, while not vetoing requested increases, US shld make statement decrying request for additional funds and imposition new burdens on Aust people. This point particularly important if Sovs shld veto increases.
5. Paris and London Embs shld immed bring substance paras 2 and 3 to attention FonOffs.
- Drafted by Dawson and cleared with Rutter, Williamson, and Perkins. Repeated to London and Paris.↩
- Telegram 1493 described the British position with regard to occupation costs and their recommendation, for the Allied Council meeting of October 26, that the question of arrears be separated from the question of payments for the current year. (763.0221/10–2551)↩
- Not printed, but see footnote 3, Document 511.↩