763.0221/12–2851: Telegram
The United States High Commissioner for Austria ( Donnelly) to the Secretary of State 1
2148. Upon his return from London, Caccia informed me that UK FonOff had rejected his occupation cost proposal outlined Embtel 2050, Dec 142 for provisional quadripartite agreement on 151 million schillings for element for 1952. Fr HICOM subsequently informed me that he was likewise unable to agree to this proposal.
Caccia explained that while Eden was not familiar with details of occupation cost problem, he was firm that Brit Govt “cld not assume any additional financial obligations at this time.” Instructions from FonOff were explicit, however, that proposal cld not be accepted and that Caccia must attempt in quadripartite mtg to obtain full sum of 200 million schillings for Brit element. Re Caccia’s comments that US element attached importance to further attempt obtain tripartite agreement and that in US view quadripartite discussion at this time might serve merely to firm up Sov demands and result only in breakup of quadripartite allocations. FonOff stated:
“We ourselves attach importance to the maintenance of tripartite agreement and of the quadripartite machinery. We shld, however, leave the Amers in no doubt that if their insistence on an unrealistically low figure were to lead to a breakdown of this machinery they wld have gained little and lost much. Logic of their present policy is to involve their allies in unacceptable overseas expenditure, with no certainty that this wld in fact prevent the Russians from extorting more from the Austs on their own account—in doing so (i.e. demanding 200 millions and the usual escalator clause) we shld hope that Caccia wld speak to his US colleague in the sense of the para above, and make it clear that there can be no question of our accepting a lower figure in the hope that the gap will be filled either by a further contribution from the Austs or by Amer aid in an acceptable form as past experience has shown that neither wld be forthcoming.”
(From this statement, Caccia courteously excised fol before giving me above extract. “We cannot agree to bear any additional expenditure simply in order to help the Amer sweeten their internal polit [Page 1088] scene.” This last refers, we assume, to our argument that it wld be unreasonable for US admin to grant Aust ECA assistance even in reduced amount of $120 million this year and at the same time sanction increase in Sov occupation costs to 200 million schillings, equivalent to approx $8 million.)
From foregoing and from attitude Fr element here, it seems depressingly clear that neither Brit nor Fr Govt is concerned re increased allocations to Sovs. We can understand their failure to give consideration to impact on Aust econ of increases for themselves and in fact this attitude can perhaps be excused in the light of econ difficulties now plaguing both UK and Fr, especially as they have from beginning of occupation regarded support of Aust econ as US problem. I am convinced that both Brit and Fr can effect economies in their organizations here, but at same time I have made it clear to both HICOMs that I am prepared to support reasonable increases for their requirements, in spite of my view that it may be difficult in the year ahead of us to maintain Aust econ and political stability with the smaller resources available, and provided only that such increases are not granted to Sovs. Especially now that Austs are apparently becoming concerned re econ difficulties facing them and we shall in course of next several months be endeavoring to persuade them to adopt reforms which will be politically difficult, I do not see how we can over-ride their views (Embtel 2017, Dec 123) and join in increased quadripartite allocations to all three elements. I therefore recommend that we inform Brit and Fr that we will definitely not agree to quadripartite allocation in excess of 1951 figures, even though this shld mean break up of quadripartite allocations; that we are prepared instead to join with them in attempting to work out mutually satisfactory bilateral arrangements with Aust Gov; but that in view of increasing econ difficulties here, we wld in no event bring pressure upon Aust Govt to pay full amounts now being demanded.
In accordance gen accepted practices, I can hardly continue to refuse to discuss occupation costs if other three elements desire and I have therefore tentatively agreed with Brit and Fr to mtg on Jan 3. Wld be grateful if Dept’s views cld be reed before that date.
- Repeated to Paris.↩
- Telegram 2050 described the escalator clause proposed by the British High Commissioner which set the total amount of occupation costs for 1952 at the same level as 1951 (151 million schillings per element), but reserved the right of the Allied Council to call for a supplemental allocation if necessary. (763.0221/12–1451)↩
- Telegram 2017 reported that Gruber was “extremely disturbed” to learn of the British and French proposals for 1952 occupation costs. Gruber informed Donnelly that a “certain member” of the Cabinet was of the opinion that if the British and French persist in their demands, the Austrian Government should ask them to leave Austria and let the United States take over their zones of occupation. (763.0221/12–1251)↩