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

No. 515

ECA message files, FRC 53A278, Vienna: Telegram

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

secret

Washington, November 14, 1951—8:48 p.m.

Ecato 682. Subject—1951/52 Program.

1. Disturbed by N.Y. Times Nov 9 1951 article² Vienna dateline which states: “Aust which had applied for $190 mil of Marshall Plan aid during FY 1951/52 and had been cut to $106 mil is to get an additional $25 to $30 mil from Wash but on new basis of ‘good behavior’”. Article also says “allocations of ECA were supposed to be made on basis performance and need. In practice impossible define these terms. New policy may be described as granting basic allocation to meet minimum requirements which can then be increased when obvious that allocation being efficiently used.” Article further discusses present Aust export picture credit restrictions and productivity team.

2. Times story appears to be misinterpretation of Ecato 653, rptd Torep 8328.³ Primary purpose that cable to inform you of aid level programmed for Aust within present availabilities economic assistance funds and amount of additional assistance being considered in the event maximum possible transfer MDA funds achieved; also, to emphasize fact that Aust aid placed in new context to extent that she benefited from MDA transfer. For latter reason, question of positive results to be obtained from diversion additional funds to Aust becomes more urgent consideration than heretofore.

3. For the present and until such time as decision on transfer MDA funds is made, we are limited for programming purposes to Model One figure of $105 mil. Because we regard this as inadequate to sustain Aust economy at minimum acceptable level, we have tentatively concluded that further discussions with Austs on annual aid figure should be postponed until transfer decision made. We were particularly anxious to avoid polit repercussions and loss of public confidence which would flow from discussing and publicizing lower figure if favorable transfer decision would ultimately permit higher aid level. For these reasons, consider Times story unfortunate and hope that Mission will take necessary steps to correct misapprehensions resulting therefrom without in any way committing U.S. on level of aid figure. In this connection believe you shld continue to insist on Austs submission of program based on $120 mil aid figure. Interim allotment now in process will insure continued flow minimum quantities coal and agricultural commodities pending establishment firm aid figure for year.

4. Wld appreciate being informed Aust press and Aust govt reaction to Times story.⁴

Bissell

1. Repeated to Paris for OSR.
2. The article under reference, “Austria to Get Added $25,000,000 ECA Aid on New Basis of Economic ‘Good Behavior’,” appeared in the New York Times, November 9, 1951, p. 7. The credit line read: “Special to the New York Times.”
3. Telegram Ecato 653 outlined to the ECA Mission in Austria the two models for alternative levels of economic aid for fiscal year 1952 and asked the Mission for its recommendations as to the desirable level of aid in light of the “extreme difficulty justifying any increase at expense of defense capabilities NATO countries.” (ECA message files, FRC 53A278, Vienna)
4. In telegram Toeca 878 from Vienna, November 20, Meyer informed ECA/W that the Austrian press did not pick up the MacCormac story. (ECA message files, FRC 53A278, Vienna)