Foreign Relations of the United States, 1952–1954, Germany and Austria, Volume VII, Part 2

663.001/10–253: Telegram

No. 890
The United States High Commissioner for Austria (Thompson) to the Department of State¹

secret

Vienna, October 2, 1953—10 a.m.

844. Suggest that at next meeting with British and French on Austrian treaty we explore possibility our proposing five-power meeting including Austria to dispose of question German assets. Proposal could be advanced not in lieu of treaty but as first step toward it. Believe in such negotiations Austrians could be counted upon to be hard bargainers. Our difficulty in getting them to take strong stand on article 35 stems not from any tendency to weakness in negotiations but from their intense desire for treaty and end of occupation. (Raab informed me last week that preliminary survey indicated USIA assets much less valuable than they had supposed. We are pressing Austrians to make as detailed survey these properties as possible.)

Appears clear no real progress on Austrian treaty can be expected in absence progress on German settlement. We should, however, take every possible advantage of Soviet effort maintain “new look” and there is little more that we can press for locally in Allied Council other than possibly revision of Control Agreement. I see considerable advantage to Austria if agreement could be reached on German assets now by spreading economic shock which will be involved when treaty is concluded. By making readjustment to absorption USIA plants and, if possible, oil properties now in period of relative prosperity and when some United States assistance might be available if proved necessary, subsequent readustment of budget upon conclusion of treaty to allow for loss USFA expenditures and cost armed forces would be easier. Getting Soviets out of Austrian plants should have effect of further weakening Commie Party and strengthening internal security. In general would envisage turnover of oil properties against commitment specified oil deliveries and purchase USIA and DDSG in dollar payments spread over say ten-year period. Although payment in goods advantageous to Austrians, would involve complications Battle Act, et cetera.

Advantage five-power talks over Austro-Soviet negotiations include fact that settlement could be made final without dependence on treaty, and that in view western position re German assets we would be able to expose harshness Soviet demands. I also believe bilateral agreement likely place greater strain on coalition and weaken position Austrian Government. To avoid charge we are attempting gambit to keep our troops in Austria might be advisable for suggestion for meeting come from Austrians. Have not discussed matter with Austrians who may oppose it but suggest it worth exploring with French and British.²

Thompson

1. Repeated to London, Paris, and Moscow.
2. In telegram 1088 to Vienna, Oct. 8, the Department of State noted that it welcomed the proposal contained in telegram 844 but believed that all efforts should instead be directed toward the conclusion of the treaty at Lugano. (663.001/10–253) The plan for a four-power conference of Foreign Ministers at Lugano proposed for Oct. 15 was never realized.