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

No. 524

763.0221/12–2851: Telegram

The Secretary of State to the Embassy in Austria ¹

secret
priority

Washington, January 2, 1952—7:02 p.m.

1649. Dept concurs ur proposal continue discuss occupation costs with Brit and Fr (Embtel 2148 Dec 28 rptd London 129 Paris 221²). Proposal outlined Embtel 2050 Dec 14³ for allocation 151 million schillings with escalator clause seems reasonable basis for agreement. In view Brit and Fr rejection that proposal and assuming Aust Govt still takes position it wld prefer no quadripartite agreement if costs cannot be kept within 1951 limits (Embtel 1882 Nov 29⁴) agree ur analysis situation and recommendation inform Brit and Fr US cannot agree allocation in excess 1951 figures. Dept continues believe Brit and Fr cld keep expenditures within 1951 limitations if they wld seriously endeavor to do so by exercising reasonable economies. Contrary to Brit statement that their efforts to economize wld serve simply to sweeten US internal polit scene attacks such as one recently made by Sen Ellender (Deptel 1604 Dec 26⁵) are aimed primarily at Brit and Fr and any increase occupation costs allocations to them at this time wld provide fresh ammunition for attack and increase sentiment to reduce aid for themselves as well as Aust. Brit and Fr shld be just as interested as we in maintaining Aust polit and econ stability which wld be endangered by drastic reduction aid.

Dept concerned that open rupture wld end US participation in allocations without reducing costs. Hence strongly recommends that before taking firm position referred to above you propose relating occupation costs to performance of occupation function as intermediate position between grant of their demands and outright rupture. Basis for transition to accounting system whereby occupying powers justify need for funds derived from status of Aust as liberated country and its democratic development. Initial step in process wld be quadripartite acceptance formula whereby each power receives funds to cover only expenditures for official occupation functions. Disbursals shld be restricted to rents and maintenance for official office space but not dwellings, salaries of Austs employed officially but excluding dipl and info personnel and servants, official transportation and communication expenses and quadripartite costs. Additional expense wld be borne by occupying powers. Relating costs to occupation function in this fashion wld reduce burden on Aust economy, probably be supported by Aust Govt and cld be explained to Aust and US public opinion far better than present system.

Acheson

1. Drafted by Allen and Rutter and cleared with Williamson, Bonbright, and Perkins. Repeated to London and Paris.
2. Document 522.
3. Not printed, but see footnote 2, ibid.
4. Not printed, but see footnote 2, Document 520.
5. Telegram 1604 reported that a New York Times article stated that Senator Ellender of Louisiana had invited Figl to visit the United States in order to support Ellender’s charge that the American taxpayers were being milked by Russia, France, and the United Kingdom, who were draining dollars from Austria that the United States originally contributed to rebuild that nation’s economy. (033.6311/12–2651)