763.00/7–1552

No. 809
The United States High Commissioner for Austria (Donnelly) to the Deputy Director of the Office of Western European Affairs (Williamson)

confidential
personal

Dear Francis: As my mission to Austria comes to a close1 I wish to thank you and your colleagues for the excellent cooperation, [Page 1769]without which it would have been difficult, if not impossible, to attain our objectives. The loyalty and support I received from members of the backstop and Department and the staff in Vienna will always be a source of a great satisfaction to me, and the most that I can hope for is that I shall receive similar assistance during my tour in Germany.

My admiration for the Austrian people is matched only by yours. I have great respect for such men as Figl and Schaerf and I admire them for the sacrifices they have been called upon to make to maintain the coalition government. I am confident that the coalition will continue under Figl and Schaerf, but I would not be so optimistic about the continuation of the coalition if they were to be removed and replaced by persons motivated only by political forces. I see no indication of a change in the near future, but it is something that we should watch carefully and not hesitate to express our views in the event that we see any evidence of it being dissolved. While I am hopeful that the coalition will survive I can only foresee troubles in the political arena from now until the elections in the fall of 1953.

I am not satisfied with the economic program of the government and although Kamitz is interested in improving the economy of it I do not feel that he is receiving proper support from the major political parties. As regards the banking investigation and allied subjects I am of the opinion that we will have further trouble with the government on this score and that it will be necessary for us to deal with this and other economic problems for some time to come. We should insist that the Government fulfill their promises to us and effect certain economic reforms.

The amnesty, restitution and heirless property problems are being actively considered by members of Parliament but I am fearful that they may pass legislation which we may regard as inadequate and may necessitate our vetoing some of the constitutional laws in the Allied Council. I have discussed these problems with the Austrian Government officials and have urged them to adopt a realistic attitude. We have made some headway with respect to restitution for persons affected by Nazi persecution and on heirless property but as it now stands they will probably receive treatment inferior to that accorded to ex-Nazis. The reason for the proposed discriminatory treatment lies in the fact that the political parties estimate that there are some 500,000 voters who favor special treatment for former Nazis. I was encouraged today to receive a report from Irving Brown, European representative of the American Federation of Labor, who said that he had been instructed to ask the Austrian Federation of Trade Unions to use their influence for the [Page 1770]passage of adequate legislation for all persons adversely affected by Nazi persecution.

As regards the Soviets I see no indication of their intention to sign a State treaty and evacuate Austria along with the Western Allies. I am still of the opinion that they wish to maintain the status quo here, continue to exploit the Austrian people and to undermine our position in Austria. The Communists have not gained in popular favor, but they might make some headway if the economic situation worsened with a resulting increase in unemployment. I feel that the Soviets wish to avoid war and that they are confident they can achieve their goal of world revolution by the economic collapse of the Western nations. I firmly believe that it should be our policy to expose the Soviets at all times, to take the offensive on propaganda and to hurt them where it hurts most, such as the imperialistic USIA organization, the USIA retail stores, violations of the freedom of the press and unilateral arrests of persons whom they consider to be anti-Soviet. The Austrian Government officials deserve only the highest praise for their resistance to the Soviets and we should continue to give them our full support in any efforts to hold the Soviets at bay.

The foregoing is a brief summary of my impressions of the outstanding issues in Austria and I hope that they will be of interest to you.

Again my most sincere thanks to you and your colleagues.

Sincerely yours,

Walter
  1. On July 10, President Truman approved the appointment of Walter J. Donnelly as the new U.S. High Commissioner for Germany, following the resignation of John J. McCloy, who asked to be relieved of his responsibilities effective July 21. President Truman also approved the appointment of Llewellyn E. Thompson, Jr., as Donnelly’s replacement in Austria. (Memorandum by William J. McWilliams, July 10, 1952, Secretary’s Memoranda of Conversation, lot 65 D 238, “Memoranda of Conversations with the President—1952”) These appointments were announced on July 18. For the Department of State press release, see Department of State Bulletin, Aug. 4, 1952, p. 178.