Foreign Relations of the United States, 1949, Council of Foreign Ministers; Germany and Austria, Volume III

740.00119 Council/5–1649

Memorandum of Conversation, by the Acting Chief of the Division of Austrian Affairs (Williamson)¹

top secret

[Washington,] May 16, 1949.

Participants	The Secretary
	The Under-Secretary
	Assistant Secretary Allen
	Assistant Secretary Voorhees
	Mr. Hickerson
	Mr. Nitze
	Mr. Reber
	Mr. Williamson
	Mr. Murphy

The Austrian Treaty

Mr. Reber reported at length on the negotiations of the Deputies on the Austrian Treaty which were concluded May 10 in order to permit a report by the Deputies to the Ministers.

Mr. Reber pointed out that in view of the stalemate which has existed in previous negotiations, no progress apparently can be made in the conclusion of the Austrian Treaty until the solution has been reached on the three major problems of frontiers, the payment of reparations and the settlement of the German assets question, He presented to the meeting a memorandum² which embodied a plan whereby the Western States would take the initiative in bringing the Austrian Treaty to the attention of the Ministers and proposing a solution for the German assets question which would permit an increase in the lump sum payment to be made by Austria to 150 million dollars in return for Soviet agreement that the frontiers of 1937 be reestablished and that Austria should not be subject to reparations payments. The Secretary made a number of inquiries concerning the exact differences between the Western and Soviet position, the nature of the lump sum payment and the advantages which would accrue to Austria if a Treaty were concluded. It was pointed out in reply that the basic problem involved the relationship between the lump sum payment and the future ECA program for Austria. While the economic benefits derived by Austria in the conclusion of the Treaty would in all probability permit a decrease in the ECA program, it must be borne in mind that popular reaction in the United States would draw the conclusion that the United States Government was financing the Austrian payments to the Soviet Union.

The political needs for the conclusion of the Treaty were discussed as well as the problems which would be created by the withdrawal of the occupation forces. It was agreed that in the event of the conclusion of the Treaty the timing of the withdrawal should be so arranged as to permit the Austrian Government to organize its own security force³ in order to maintain internal law and order.

The chief problem discussed was the tactical approach to this question in the forthcoming conference. It was recognized that the question would inevitably be discussed at the time of the decision on the fixed agenda for the meeting. The Secretary pointed out that it would be desirable to obtain an Austrian settlement regardless of the outcome of the German discussions and that a settlement on Austria might well be used to obtain progress in the German discussions. It was generally assumed that if agreement could be reached on the major issues on the Treaty, agreement would quickly follow on the minor and subsidiary questions but that it must be clearly understood that Western agreement on the major issues would be dependent upon agreement on the Treaty as a whole.

The Secretary stated that he was willing to take the initiative in proposing a discussion of the Austrian Treaty depending on the course of the negotiations. He wished to have a more complete explanation on the conversations which are now beng held in Paris and agreed that the course of action on the Austrian Treaty can best be determined after the beginning of the meeting.

In response to Mr. Hickerson’s question about the desirability of taking Congressional soundings on the possible reactions of the lump sum payments, the Secretary agreed that this would not be desirable in view of the possible publicity which might be given to such an inquiry.

The Secretary requested that a short paper on the Austrian Treaty be prepared for submission to the National Security Council.⁴

1. The meeting took place in Secretary Acheson’s office at 3:45 p. m.
2. Under reference here is Reber’s report on the negotiations of the Deputies for Austria who had adjourned on May 10. The text of this memorandum, dated May 11, is printed on p. 1093.
3. For documentation on the United States interest in the formation of Austrian security forces, see pp. 1236 ff.
4. An abbreviated Version of Reber’s report, not printed, dated May 17, was sent to the National Security Council. (CFM Files: Lot M–88: Box 84: Reber File)