East-West Negotiations over Austria in 1949: Turning-Point in the Cold War

East-West Negotiations over Austria in 1949: Turning-Point in the Cold WarAuthor(s): Audrey Kurth CroninSource: Journal of Contemporary History, Vol. 24, No. 1 (Jan., 1989), pp. 125-145Published by: Sage Publications, Ltd.Stable URL: http://www.jstor.org/stable/260702 .

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Audrey Kurth Cronin

East-West Negotiations over Austria in 1949: Turning-Point in the Cold War

With the exception of 1955, when the Austrian State Treaty was actually signed, the year 1949 was the most important period in the great power negotiations over Austria's fate. After two years of failure to reach agreement among the four occupying powers, frustrated largely by the intransigence of the Soviet government, a change occurred which marked a watershed in the negotiations. At the Paris Conference of Foreign Ministers in June 1949, Soviet policy appeared to provide an unprecedented opportunity for a treaty, albeit on economic terms favourable to the USSR. During the next five months, the western response to the Soviet initiative was disjointed and chaotic, characterized by conflict among the three western powers and also in particular within the United States bureaucracy. The prospect of an imminent withdrawal from Austrian territory was the subject of intense debate, especially between the British, who consistently favoured a treaty on virtually any terms, and the Americans, whose policy was subject to the vicissitudes of bureaucratic infighting between the pro-treaty State Department and the anti-treaty Defense Department. Ironically, when the Americans finally came to the conclusion that a treaty was desirable even on Soviet terms (late October 1949), Soviet negotiating policy again changed. By mid-November, regardless of tremendous economic concessions now offered by the western powers, any opportunity for a treaty clearly had evaporated. Significant movement in the direction of a four-power agreement did not occur again until the Soviet demarche which led to final signature in 1955.1

The purpose of this paper is to examine the critical five-month period between June and November 1949, focusing upon the policies of the four great powers and evaluating the extent to which the Soviet initiative might have been a lost opportunity for the three western

Journal of Contemporary History (SAGE, London, Newbury Park and New Delhi), Vol. 24 (1989), 125-145.



Journal of Contemporary History

powers - as well as for Austria itself. Briefly, the paper will address three questions: what was the nature of the Soviet shift in policy in June 1949? Why did the western powers fail to respond immediately to the Soviet initiative? Was it a genuine opportunity for agreement, and would it in any case have been desirable to sign an Austrian State Treaty in 1949? Studying the episode will reveal a great deal about the motivations of the Soviet Union and the relations between the western powers in the post-war negotiations over Austria, as well as in the broader context of the early years of the Cold War.

In explaining the shift in Soviet policy, it is necessary briefly to review Soviet behaviour in the first two years of the four-power negotiations over Austria. The years 1947 and 1948 had been a time of little progress in the talks. During 1947, the only treaty that the Soviet Union wished to sign levied such draconian economic penalties on Austria that the western powers did not consider it negotiable. The following year, when compromise appeared possible, Soviet representatives seized upon Yugoslav claims against Austria in order to disrupt the talks. Whenever progress in the negotiations seemed to be occurring, the Soviet Union interrupted it by raising an extraneous issue. For the western negotiators, there was little doubt that the Kremlin was not interested in withdrawing troops from Austria, particularly at a time when the focus of Stalin's policy was the consolidation of his Eastern European empire.

Despite vociferous public statements to the contrary, the western powers had reason to be relieved by Soviet obstinacy in 1947 and 1948. An unarmed, economically destitute state, free of the stabilizing influence of four-power occupation, seemed an ideal target for a communist coup - whether organized from within Austria or orchestrated from the Kremlin. With the passage of time and granting of economic aid, Austria's domestic situation could be

strengthened before the withdrawal took place. Indeed, even the Austrian government, while publicly calling for a treaty, had reason

secretly to fear that it might be signed too quickly and on unfavourable economic terms. As neighbours to the east succumbed to communist take-overs, some Austrian government officials privately admitted that there were benefits in having tangible western

support on Austrian territory.2 Nonetheless, in early 1949, evidence of a clear split between Stalin

and Tito, as well as the launching of a highly publicized Soviet 'peace

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Cronin: East-West Negotiations over Austria

initiative', led the western powers to conclude that the Austrian treaty should be pursued in earnest once again. It was hoped that the falling out between Stalin and Tito might lead to the elimination of Soviet support for Yugoslav claims; and in any case the western powers did not wish to cede the moral high ground to the Soviet Union by appearing to be unenthusiastic in the quest for peace. After an eight- month lull in the negotiations, therefore, the four deputy foreign ministers for Austria met in London in February 1949.

Hopeful of a shift in the Soviet position, the western delegates pressed the Soviet representatives on the question of Yugoslav claims. To their disappointment, the Soviet Union persisted in its unconditional support of the Yugoslavs. By May, despite over fifty meetings among the four delegations, no significant developments had occurred, and the talks formally adjourned to await the meeting of the Council of Foreign Ministers the following month. Greatly disenchanted, the American delegate Samuel Reber informed the State Department that he was convinced the Soviet delegation was once again using Yugoslav claims deliberately to prevent the conclusion of a treaty.3

After more than two years of unsuccessful negotiations, thwarted primarily by the Soviet Union, the prospects for progress on Austria at the Paris Conference of Foreign Ministers seemed dim. There were a number of reasons why Stalin may have considered spring 1949 an inopportune time for a treaty. First, the signing of the North Atlantic Treaty on 4 April 1949 had significantly strengthened the western negotiating position and apparently decreased the likelihood that the Soviet Union would pursue a treaty. Second, in the western zone, plans for equipping an Austrian gendarmerie force were moving forward.4 With the approval of the French and the British, the United States had begun to stockpile light military equipment in Austria5 to outfit an Austrian force whose headquarters would be in the US zone.6 The Soviet Union knew about the secret activity in the western zone. In March, reports of a military build-up in Austria began appearing in the Soviet press,7 and in April the Soviet Union accused the western powers of delaying talks in order to transform the western zone into a military base.8 Actions by the western powers had given the Soviet Union ample incentive to stall in the negotiations.

But there were also important developments occurring in Moscow which affected the Soviet position. Apparently in response to the failure of the Berlin blockade and the collapse of Soviet policy in Yugoslavia, Stalin decided to shake up the Politburo. In March 1949,

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veteran Foreign Minister Vyacheslav Molotov lost his post and was reduced to largely symbolic membership of the Politburo and the Council of Ministers. Happy to see 'Old Iron Bottom' Molotov depart, the western powers hoped that the new Soviet Foreign Minister, Andrei Vyshinsky, might bring fresh instructions from the Kremlin and a new dynamism in the Soviet negotiating position. They were not to be disappointed.

The Paris Conference of Foreign Ministers convened on 23 May 1949, but the Austrian question, low on the agenda, was not addressed until 12 June 1949. Again determined to test the strength of Soviet loyalty to the Yugoslavs, the western powers offered a compromise on the first day of talks: if the Soviet Union would stop supporting the obstructionist Yugoslav claims, the western powers would agree to some of the Soviet economic demands upon Austria.9 At this point, Soviet policy shifted. Soviet Foreign Minister Vyshinsky agreed, unceremoniously abandoning Yugoslav claims. In return, the western powers agreed to a lump-sum payment by Austria of $150 million for German assets on Austrian territory, acceptance of the Soviet claim to 60 per cent of the oil exploration areas of Austria, and cession of all former property of the Danube Shipping Company in eastern Austria to the Soviet Union.10 Suddenly, the issue that had stymied the talks for months was resolved.1' When the Paris conference ended eight days later, the

foreign ministers issued a communique summarizing the general nature of the compromise and directing the deputy foreign ministers to work out the details and reach final agreement on an Austrian

treaty by 1 September 1949. The compromise reached at the Paris conference was an un-

precedented sign of Soviet willingness to grant an Austrian treaty if the economic terms were sufficiently attractive. In short, it seemed that if the price were right, then Stalin would agree.

Soviet activity in the Austrian zone also supported the view that preparations were being made to end the Soviet occupation soon. In June, the Soviet High Commissioner for Austria, General Tikhomirov, stopped the Soviet bank in Vienna from issuing new credits and directed Soviet-run factories to stop accepting orders that would require more than a few months to fulfil.12 With such promising signs of a shift in Soviet policy, hopes were high in Austria that a treaty would be agreed when the

deputy foreign ministers began their meetings in London on 1 July 1949.

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The response by the western powers to the Soviet treaty initiative was not enthusiastic, largely as a result of delays caused by the United States. In the early years of the occupation, the United States, leader of the western powers, always maintained outward support for efforts to conclude a treaty. Within the American bureaucracy, however, there were many who had misgivings about the wisdom of signing a treaty and precipitously withdrawing from Austrian territory. Those misgivings became still more serious when the terms that the Soviet negotiators were offering implied heavy Austrian indebtedness to the Soviet Union. Throughout 1949, a bureaucratic struggle ensued between on the one hand those who supported signature of a treaty as the primary objective in seeking a viable Austrian state (largely US State Department officials), and on the other, those who supported continued maintenance of the western occupation as the primary means of ensuring a stable, independent Austria (largely US Defense Department officials).

In an effort to clarify US policy and confirm its mandate to work for a treaty, the US Department of State in late 1948 produced a report, 'The Austrian Treaty in the Council of Foreign Ministers'. The report asserted that a stable Austria free from 'alien domination' was the primary US objective. Observing that the Soviet occupation represented the most serious drain upon the Austrian economy, the report concluded that the best way of achieving an economically viable state was to seek a treaty providing for Soviet withdrawal as soon as possible. Labelled NSC 38, the report was submitted on 8 December 1948 to the National Security Council for review.13

The conclusions of the State Department's report were not well received by officials at the Department of Defense, particularly when it appeared that a treaty might be imminent. On 16 June 1949, in the midst of Secretary of State Dean Acheson's negotiations at the Paris conference, Secretary of Defense Louis Johnson submitted an opposing report to the National Security Council. The Defense Department's document, labelled NSC 38/1, urged the State Depart- ment to take greater account of the military situation, emphasizing especially Austria's woefully inadequate security forces and the time which would be required to prepare them to take on the responsibility of protecting Austrian territory. Defense Secretary Johnson's view- point was summarized in his personal letter to Acheson:

[I]t is apparent that, if a treaty is arranged at the current meeting of the Council of Foreign Ministers, it will be impossible for Austria to have reasonably adequate security forces prior to the withdrawal of all occupation forces within ninety days

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after the treaty comes into effect, which is called for in the present treaty draft. It is recognized that political and economic considerations may dictate the conclusion of a treaty for Austria now. However, from the strategic point of view, withdrawal of occupation troops before Austria can organize, train, and equip reasonably adequate security forces would create a military vacuum in central Europe in which the communists, following their common practice, may be expected to seize power and dominate the country, thus creating a Soviet salient in the East-West line....

Regardless of the method employed, the National Military Establishment considers that the peace treaty for Austria should become effective only after the United States is assured that Austrian armed forces are reasonably adequate to

perform all tasks envisaged in the treaty.14

With his negotiating position dissolving beneath him, a frustrated Acheson sent a message from Paris. He assured the military that there would be ample time to prepare Austrian security forces. The earliest a treaty could be signed would be September or October 1949, he

argued, and subsequent ratification by all four governments would be necessary. If that time-consuming process were successfully com-

pleted, a ninety-day withdrawal period still remained in the treaty.15 But the Defense Department was unconvinced and persisted in its dissent from State Department policy. Upon his return to Washing- ton, Acheson attempted to have NSC 38/1 struck from the agenda of the National Security Council, arguing in a letter to the NSC

secretary that the only difference in State and Defense departments' views was in the implementation of an agreed programme.16 He was unsuccessful. Once the Defense Department had formally raised doubts about US policy with respect to Austria, the bureaucratic

process dictated that the National Security Council consider the matter. Acheson's letter was duly labelled NSC 38/2, paired with NSC 38/1 and placed on the agenda of the forty-third meeting of the National Security Council, to be held on 7 July 1949.

At the meeting of the National Security Council, defence experts argued that the preliminary preparations which had been made to

equip an Austrian army were inadequate. There was sufficient materiel for only one Austrian gendarmerie regiment, and actual

training of even that regiment was only just beginning. The delay was

partially a result of the Austrian government's hesitancy to request formally that the equipment be issued to Austrians, a hesitancy apparently stemming from apprehension about Soviet reactions.17 But other problems contributed to the difficulty of quickly creating an Austrian army. Most important, there was no four-power agreement on an Austrian security force, and preparations only in the three western zones could incite the Soviet Union to take its own

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military measures in the eastern zone. Partition of Austria could result.'8 On a more practical level, signature of the treaty would provide insufficient time to complete the training and logistical arrangements for the army, since no definite plans had been drawn up by the Defense Department for training a full Austrian army in preparation for a withdrawal.19 Finally, Defense Secretary Johnson argued that the funding for equipping an entire Austrian army was simply not available. The initial allotment for this purpose (under the US Foreign Military Assistance programme) had been cut by the Bureau of the Budget when signature of a treaty had appeared unlikely.20 In short, Defense Department experts argued that the State Department had not taken account of crucial strategic, logistic, political and financial aspects inherent in a US military withdrawal from Austria in 1949.

Having examined the positions of both the Defense and State departments, the meeting of the National Security Council ended inconclusively. The issue of US policy with respect to Austria was referred to the NSC staff for preparation of a study.21 Only a week after the deputy foreign ministers began meeting in London, therefore, US policy was thrown into a state of limbo.

The London meetings had begun well enough, with quick agreement on several contentious articles, but the talks soon became bogged down in discussions about the exact economic assets the Russians would be entitled to receive. The Soviet Union insisted upon following the specific wording of the Paris communique, while the western powers, particularly the United States, disagreed with the Soviet interpretation of the settlement. As had happened so frequently in the past, economic issues, particularly the question of compensation for German assets in Austria, apparently delayed the treaty; however, at this point, an important divergence in views among the western powers also began to emerge.

In August 1949, coinciding with American indecision regarding the desirability of a treaty, the British began to suggest a major western concession to the Russians on the issue of German assets (Article 35). Following private conversations with the Russian representative, British Deputy Foreign Minister Mallet came to the conclusion that complete capitulation to Soviet demands on Article 35 would produce a treaty.22 With the support of the British political representative in Austria,23 and the backing of the military Chiefs of Staff for a withdrawal from Austria,24 Mallet approached Foreign Secretary Ernest Bevin to ask him to decide British policy on the

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matter. Bevin said that he personally favoured signing a treaty, on Russian terms, by 1 September; but if the Americans did not wish to pursue the treaty he would follow their lead, as long as the onus for delay were placed entirely upon them.25 Bevin was coming to the conclusion that a treaty should be still more urgently pursued, therefore, at the same time that Acheson's support for a treaty was disintegrating.

At the end of August, Bevin met the US ambassador in London to put pressure on the Americans to agree to western concessions in the negotiations and rapid signature of the treaty. Bevin noted that in a private meeting, the Austrian Foreign Minister, Karl Gruber, had urged signature of the treaty and had assured Bevin that Austria would be able to pay the economic costs which the Soviet Union demanded.26 Moreover, Bevin argued that the wider political consequences of the treaty's signature would be beneficial, encouraging Marshal Tito by removing Soviet troops from his northern border, enabling the western powers to bring Austria into the Council of Europe and other international organizations, and having a favourable effect on western Germany. The positive effects on the international climate would be worth the small price of granting Soviet economic demands in Austria.27

Ambassador Douglas responded that granting Soviet demands would give the USSR the economic power to dominate Austria as effectively as it currently dominated the Russian zones. The US Senate would never ratify an agreement incorporating such concessions. More to the point, Austrian claims that they could pay the cost of such an agreement were implausible; in the long run it would be the US government which would have to find the money to pay off the Soviet Union. With this in mind, it was easy for the British to urge economic concessions by the western powers, since the UK would not ultimately be financing the agreement.28

Undeterred by the ambassador's response, Bevin decided to bypass formal diplomatic channels and make a personal appeal to Acheson. Following his meeting with Ambassador Douglas, Bevin dispatched a telegram to the US State Department outlining his strong belief that the western powers should make the necessary concessions to obtain a treaty. His message concluded:

I spoke to the United States Ambassador on these general lines this morning, but I should be grateful if you would convey a personal message from me to Mr Acheson in the above sense as the Deputies have to terminate their discussions by September 1st and there is very little time.29

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Whether or not he personally wanted to go along with Bevin, Acheson was unable to effect any change in US policy. The National Security Council was still undecided about the desirability of signing the Austrian treaty in 1949; and Soviet refusal to lessen their economic demands made the task of building a consensus within the American bureaucracy virtually impossible. With US policy un- resolved, the talks remained deadlocked and the deputy foreign ministers failed to meet their 1 September deadline. The London talks were recessed and tentatively scheduled to resume in New York on 22 September 1949.

During the recess, the British became increasingly exasperated by what seemed to them to be American stubbornness. The British belief that the Soviet Union was on the verge of signing a treaty if the western powers granted all the Soviet economic demands seemed confirmed in both formal and informal meetings with Soviet officials.30 An attempt by the western powers to issue a joint statement encouraging the Soviet Union to return to the bargaining table, however, revealed that the United States was moving even further from the conciliatory approach favoured by the British. 'The [American draft of the] request to the Soviet Government to agree to the New York proposal is no longer put in a clear and objective manner, but is lost in a welter of recrimination', one Foreign Office official complained. 'And the statement of position is so accusatory and unyielding as to achieve the opposite of what we and the French (at any rate) intended by it.'3

The Austrians also expressed to the British their frustration with the American obduracy, although under the circumstances they did not propose to pressure the United States. The Austrians could compel Washington to submit to a treaty by advertising Austria's impatience with US inflexibility in the talks, the Austrian vice- chancellor confided to the British in early September. But, the vice- chancellor added, to do so was out of the question, as it might place in jeopardy both American aid and goodwill.32

Nevertheless, nervous about the effects of a deadlock in the negotiations concerning the forthcoming national elections, Austrian government officials in private consultations apparently suppressed any reservations they had about a treaty. Austrian Foreign Minister Gruber, reversing his 1948 stance on the treaty, told the British that the American refusal to make the 'necessary concessions' was encouraging the spread of pan-German ideas in Austria, as a result of frustration over the deadlocked negotiations.33

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The situation in Washington was, if anything, moving further from consensus for a treaty. Bearing in mind the need for Senate ratification of the treaty, Acheson could not make concessions in the negotiations without assurance of Congressional support. In autumn 1949, however, daily reports of communist victories in China did not augur well for those who urged conciliation toward the Soviet Union. The US Senate, reflecting the mood of the country, was not well- disposed toward communists of any kind. To make matters worse, news reached the United States in September 1949 that the Soviet Union had exploded its first atomic device. The British continued to emphasize the need to induce Soviet withdrawal from Austria and to satisfy Austrian domestic opinion, but there was a growing body of opinion in Congress and elsewhere that American troops should not be pulled back from the line of East-West demarcation at a time of such heightened danger for the west.34

Pentagon officials were also stiffening their resolve against an Austrian treaty. General Keyes, the US Commander in Vienna, expressed in no uncertain terms his belief that Austrian security arrangements were grossly inadequate, and the Austrian economy too unstable to assume the added financial burden of payments to the Soviet Union stipulated by the draft treaty. Concurring with General Keyes' assessment, Secretary of Defense Johnson stated his objection to any treaty negotiated by the State Department until Congress provided $88 million in small arms and ammunition for Austria. In addition, he announced that he would accede to no negotiated changes in the occupation force even in lieu of a treaty, unless they had received his imprimatur in advance.35 The embattled Acheson, in the words of a subordinate, was 'slightly burned up about the whole procedure and ha[d] expressed himself in no uncertain terms concerning the military attitude'.36

With American policy still in disarray, and the British and French arguing privately that in any case they could no longer afford to maintain troops in Austria,37 the deputy foreign ministers of the three western powers met their Soviet counterpart in New York on 22 September. While the deputies were in session, the four foreign ministers also met informally on three occasions to try to break the deadlock in the negotiations. Acheson desperately tried to persuade Soviet Foreign Minister Vyshinsky to modify Soviet economic demands. Any modest Soviet concession might have strengthened Acheson's case for a treaty in the National Security Council; but Vyshinsky refused to compromise.38

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In between the quadripartite sessions, the three western powers frequently met to review their negotiating strategy, which was far from crystallized. An economic crisis in early October precipitated the resignation of the French premier, leaving French Foreign Minister Robert Schuman and his deputy Berthelot in the peculiar predicament of negotiating without a government. Consequently, the French nearly always followed the British lead in pursuing a treaty.39 Moreover, Acheson had still failed to garner US consensus for a treaty, so his position was inflexible. Indeed, the only western minister who could adopt a degree of flexibility in the negotiations was Bevin, and he continued to be the driving force in the tripartite meetings for a treaty on Soviet terms.

Confident of the support of his government, Bevin developed a new series of arguments designed to persuade Acheson of the treaty's merit. The British Foreign Minister's pleas ranged from fears that the Austrians might otherwise pursue a separate peace with the Soviet Union, to personal appeals that his own domestic political support in Britain rested on progress in the negotiations.40 But underpinning his whole case was Bevin's ardent belief that the Soviet leaders desired an Austrian treaty and that this was an unprecedented opportunity for the western powers which must not be missed. The British Foreign Minister's conviction was strengthened by a private meeting he had with Vyshinsky. On 1 October 1949, Bevin conveyed his impressions in a letter to Acheson:

I came to the conclusion that the Russians desire a Treaty. I cannot ascertain the reason, but it appears to me quite clear that Stalin has instructed that, within reason, an effort should be made to clear up this matter....41

Thereafter, the western powers received even more positive signs of Soviet intentions; according to statements later made by Acheson, Vyshinsky actually told the three western ministers in informal discussions that if the western powers agreed to the Soviet version of Article 35, the remaining articles would present no difficulties.42 By mid-October 1949, therefore, all signs seemed to point to a genuine Soviet desire for an Austrian treaty incorporating Soviet economic demands, and apparently the one obstacle to the treaty's signature was American bureaucracy.

Convinced of the need to forge American consensus for a treaty, Acheson returned to Washington. The National Security Council met on 20 October 1949, and again the Secretary of State and Secretary of Defense clashed over the question of US policy with

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respect to Austria. Acheson pointed to the danger of partition of Austria if a treaty were not signed soon, the possibility that the Austrians would turn either to pan-Germanism or communism if their hopes for a treaty were again dashed, and the damaging effect upon America's international image if the United States were seen as obstructing a treaty.43 Johnson focused upon what seemed to him to be the greater danger of withdrawing from Austria before adequate arrangements for Austrian security had been made. He conceded that if the National Security Council quickly obtained extra funding for the Austrian army and the time period for withdrawal were extended, the treaty might be made more palatable; however, even under those circumstances, the Defense Department could not concur with the State Department's movement toward a treaty on Soviet terms.44

Buttressing the Defense Department's case was a message from General Keyes received the day before the National Security Council meeting. Defense Department officials in the meeting repeatedly referred to the pessimistic assessment of their local military representative:

If we assume that all concessions are acceptable and that the four powers and Austria sign[,] ratify and deposit the treaty it is felt here that Austria cannot withstand Soviet domination any more than her neighbors Czechoslovakia and

Hungary were able to ward off communist inroads. Austria cannot pay the cost of the present treaty. Soviet penetration in the economic field is assisted by the concessions agreed in Article 35. Those can and will lead to political crisis and assist in political penetration. The lack of provision for an adequate security force in

being at the time of ratification of the treaty will lessen Austrian will to resist the imminent inclusion of Austria in the Soviet sphere of influence. From my local

point of view I feel that if the treaty as presently proposed and further modified by the concessions suggested in your [telegram] is concluded it can only be interpreted as a Soviet victory. A victory won by typical methods of stubbornness and

intransigency; won by advancing exorbitant demands and gaining their ends

through minor and relatively unimportant concessions.45

Unable to resolve such a fundamental disagreement between the two major policy representatives, the meeting of the National Security Council again ended inconclusively.

At this point, Acheson and Johnson referred the impasse to Truman, thereby putting to the test the President's famous aphorism, 'The buck stops here'. One member of the State Department suggested in a personal letter that this would put the President

in a rather difficult spot and if he were not an amiable man I believe he would get very mad with his Secretary of State and Secretary of Defense for bad staff work, and ask them to go back to the NSC to work out an agreed recommendation.46

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But when Acheson and Johnson met the president on 26 October 1949, Truman indeed made the final decision:

The President stated that he had given the problem careful consideration and felt without question that the Treaty should be concluded in order to obtain the withdrawal of Soviet military forces from Austria and to gain the general political advantage which will be derived from this action. He considered that steps can and should be taken by the Department of State and the Department of National Defense prior to the withdrawal of the occupation forces to establish an adequate Austrian security force.47

Finally, after four months of interdepartmental struggle, the United States had a clear policy.

Truman's decision was the turning-point for the western negotiating position. With the acquiescence of the United States, the western powers decided to make what they considered to be the necessary economic concessions to achieve a treaty. Two days after the president's decision had been made, the US deputy foreign minister in the quadripartite talks offered the Soviet Union a package deal: the three western powers would concede virtually all Soviet demands under Article 35 if the Soviet Union would in turn accept the western version of the five remaining unsettled articles. The Soviet delegate flatly refused a quidpro quo arrangement, insisting that Article 35 be settled first.48 A few weeks later, Truman signed NSC 38/4, which formally directed American negotiators to seek a treaty 'on the best terms available'.49 That same day, 18 November 1949, the three western powers conceded all Soviet terms under Article 35 in the hope and belief that this action would result in a treaty. Worried about public perception of their action, however, they decided to keep it a secret: 'The three Western Deputies agreed to avoid announcing our surrender on Article 35 until progress had been made on the other articles. We agreed to say merely that progress had been made in the discussion about Article 35 in connexion with other articles.'50 At last the western powers had taken the crucial step which the British had been advocating for months, and an Austrian treaty seemed to be within their grasp.

But the Soviet Union disappointed them. By mid-November 1949, Stalin had apparently decided that he did not want a treaty, for when the western powers capitulated, the Soviet negotiator simply accepted their economic concessions and offered nothing in return. When the negotiations turned to the remaining articles, Soviet Deputy Foreign Minister Zarubin reverted to the tactic of seizing upon an unrelated

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matter, in this case Austrian payment for post-war relief supplies, to disrupt the negotiations. Clearly, Soviet policy had returned to the obstructionist behaviour which had characterized it prior to the Paris conference. In subsequent months, earnest attempts by the Austrians to settle the outstanding debt were unsuccessful.51 Indeed, after November 1949 the Soviet representatives showed no desire to sign an Austrian treaty, even on attractive financial terms. The momentum of the Paris agreements ended abruptly. Although the four powers continued to meet intermittently, that momentum was not regained until more than five years later, when the Austrian State Treaty was finally signed.

There is no doubt that bureaucratic inefficiency and domestic disagreement in the United States delayed the evolution of a common western negotiating position in 1949. Perhaps if the US Department of Defense had been supportive of a treaty, the western powers might have conceded Soviet economic demands more rapidly than they did. But this begs the question of whether the Soviet initiative at the Paris conference was a genuine opportunity for a treaty, even on Soviet terms. Would the Soviet Union have signed a treaty and withdrawn its troops in 1949 if the American bureaucracy had been willing and able to grant Soviet economic demands? Or was Soviet negotiating behaviour during these five crucial months in 1949 an elaborate ruse designed simply to wrest concessions from the western powers?

Although there can be no definitive answer to these questions without access to Soviet negotiating records, every available indication is that the Soviet Union's apparent willingness to sign a treaty after the Paris conference was genuine. Soviet actions in Austria certainly supported the hypothesis that Stalin planned to end the occupation soon. Moreover, had Soviet policy not been designed to pursue a treaty, it is unlikely that Soviet negotiators would have bargained so hard over economic issues. Soviet representatives must have realized that economic gains made in 1949 might be lost if a treaty were not signed quickly. Indeed, after the Paris initiative failed, the western powers reneged on their Article 35 agreement. The economic terms finally settled in the 1955 Austrian State Treaty were not nearly so attractive for the Soviet Union as were those which the French, British and Americans conceded to the Soviet Union in November 1949.

For a number of reasons, signature of an Austrian treaty in 1949 would have been supportive of Soviet interests. The economic terms

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of the treaty agreed in November 1949 would have provided the Soviet Union with leverage over the Austrian government which was even greater than that which existed under four-power occupation. Despite government statements to the contrary, the Austrian parlia- ment was not sure that it could pay even the first instalment of the debt it would owe the Soviet Union under the terms of the treaty.52 As Acheson pointed out to Bevin in one of their numerous consultations, Austrian failure to make a payment could have provided a rationale for leaving Soviet troops in Austria, or for returning them after they were withdrawn.53 If under those circumstances the western powers also maintained a military presence in Austria to offset Soviet troops, the country would have had both the disadvantages of the military occupation and the legal burden of an exorbitant treaty. In any case, the terms of the treaty would have placed the Soviet Union in a position of enhanced power with respect to Austria.

Increased economic control over Austria and withdrawal of the western occupation in 1949 could also have served broader Soviet interests in Europe. At a time when the Soviet Union was con- solidating its position in eastern Europe, and Britain and France were experiencing major economic difficulties, signing an Austrian treaty calling for four-power withdrawal would be one way to reduce the stabilizing presence of the United States. Economic instability in Europe might serve the cause of international communism. American aid dollars to Austria, furthermore, could be funnelled into the Soviet Union through Austrian payments for German assets - a prospect which particularly worried US Congressmen. With the Soviet economy still recovering from the devastation of the war, attaining economic assistance in a way which would actually reduce the political leverage of the United States was an attractive prospect for the Soviet Union. When, in June 1949, Soviet representatives dropped their obstructionist claims at the Paris conference and sought economic concessions in return, it seems that they were genuinely intending to negotiate a four-power Austrian treaty on the most advantageous economic terms they could achieve.

But why then did Soviet negotiating behaviour change five months later? In answering this question, the decision not to sign an Austrian treaty and not to withdraw from Austria must be seen in the broader context of a major change in Soviet foreign policy in the autumn of 1949.

The most important consideration prompting the shift in Soviet foreign policy was the situation in Germany. Even after the western

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powers announced the founding of the Federal Republic of Germany on 23 May 1949, Stalin held out hope that the actual formation of the western state might be avoided. Soviet Foreign Minister Vyshinsky had tried, at the Paris conference, to negotiate a return to four-power control of Germany, but he failed. By September 1949, with the convening of the West German Bundestag and the formation of the German Democratic Republic, the prospects of East-West re- conciliation over Germany seemed dim. By autumn, therefore, the only likely source of Soviet leverage in the deteriorating German situation was Austria. Ironically, economic concessions in the Austrian treaty negotiations only confirmed the value of a treaty for the western powers. Although economic assets from Austria were attractive to the Soviet Union, the small country's importance increased when seen in connection with Germany. After 1949, the Soviet Union essentially held an Austrian treaty hostage to developments in West Germany. Only after West German rearmament was a foregone conclusion did the Soviet Union initiate the events which led to a treaty.

The second cause of a major change in Soviet foreign policy was the one most often cited by political pundits at the time: Soviet testing of an atomic device in late August 1949.54 The possession of the capability to build atomic weapons no doubt enhanced Soviet self- confidence and formalized the growing military confrontation between the United States and the Soviet Union. But the develop- ment of a nuclear capability was only part of a broad Soviet national effort in 1949 to modernize and improve the armed forces. In the midst of a military build-up, by the latter months of the year Soviet policy was not conducive to the signing of treaties, the withdrawal of troops and the ceding of territory.55

The launching of anti-Tito witch hunts in eastern Europe was evidence of the third major influence upon Soviet foreign policy. Repudiating the treaty of friendship with Yugoslavia on 27 September 1949, Stalin used the threat of'Titoism' to launch a wave of terror and purges throughout the new satellite states. Romania, Albania, Bulgaria, Hungary, Poland and Czechoslovakia all underwent political 'purification', lasting from mid-1949 to 1951. It is likely that Stalin decided that late 1949 was not a good time to withdraw Soviet troops from Austria and risk western influence up to the borders of

Hungary and Czechoslovakia.56 Moreover, it is also possible that the new eastern European communists themselves resisted the idea of Soviet withdrawal from the eastern zone of Austria when the strength of their regimes was tenuous at best.

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Finally, the change in policy in the negotiations over Austria was one small element in a major shift of focus by the Soviet Union from

Europe to Asia. With the coming to power of Mao Tse-tung and the

founding of the People's Republic of China on 1 October 1949, Stalin was forced to pay attention to developments in the Orient. The alternative was to precipitate a rift in the international communist movement of such proportions as to make Titoism seem insignificant. The lines of division in Europe, with the exception of Austria, were

becoming clear by 1949; thus, Stalin turned his gaze eastward to a

region which seemed to offer much greater opportunity for the Soviet Union.57

For these reasons, Soviet negotiators were no longer interested in a

treaty when the western powers finally decided to pursue one. It is hard to say exactly what might have been Austria's fate if the western

powers (especially the Americans) had been more efficient negotiators and an Austrian State Treaty had been signed in 1949. There is no doubt that the burdensome occupation by the four powers would have been shortened. But it is unlikely that Austria would have been better off in the long run under the terms of the 1949 draft treaty than it was after the 1955 accords were eventually signed. In any case, the stiffening of the Soviet position in the negotiations over Austria signified a broader shift in Soviet policy after 1949, heightening tensions between East and West and resulting in more widespread Cold War confrontations in the 1950s.

Notes

1. This essay is based upon research conducted for the author's more com- prehensive work on the subject. See Audrey Kurth Cronin, Great Power Politics and the Struggle Over Austria, 1945-1955 (Ithaca, New York 1986). It was first delivered, with minor alterations, at the conference 'Osterreich 1945-1949: Die bevormundete Nation?' in Vienna on 11 June 1987.

2. In discussions with British representatives in Vienna, for example, Austrian Foreign Minister Karl Gruber privately expressed satisfaction at the breakdown of the negotiations and emphasized the danger of the communist threat. See Record of a conversation with Dr Gruber by P.A. Wilkinson, British Legation, Vienna, 8 June 1949 (conversation took place on 7 June 1948), FO 371/70411 (C4648), Public Records Office, Kew (hereafter PRO); and Telegram, Sir B. Jerram, Vienna, to Foreign Office, 19 June 1948, FO 371/70460A (C4869), PRO.

3. Memorandum by the US deputy for Austria at the Council of Foreign Ministers (Reber), Washington, 11 May 1949, in US Department of State, Bureau of Public

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Affairs, Foreign Relations of the United States, 1949, Vol. 3: Council of Foreign Ministers: Germany and Austria (Washington, DC 1974), 1094.

4. Report to the National Security Council by the Department of State, NSC 38, 'The Austrian Treaty in the Council of Foreign Ministers', 8 December 1948, 4, President's Secretary File, Harry S. Truman Library, Independence, Missouri.

5. Report to the National Security Council by the Secretary of Defense, Louis Johnson, NSC 38/1, 'Future Course of US Action with Respect to Austria', 16 June 1949, 7, President's Secretary File, Truman Library.

6. Foreign Office Minute by Mr Mallet addressed to the Secretary of State, 14 June 1949, FO 371/76470 (C5305/G), PRO.

7. See the following Pravda articles: 'Military Construction in Austria', 24 March

1949, 3; 'Military Construction in the American Occupation Zone of Austria', 14 May 1949,4; 'Formation of a Secret "Military Committee" in Austria', 29 June 1949, 3; and 'American Authorities Train Cadres for Future Austrian Army', 25 July 1949, 4.

8. 'Is This Not the Reason for the Delay?' New Times, 16 (13 April 1949), 17. See also A. Shatilov and Y. Borisov, 'Militarization of Austria', New Times, 50 (12 December 1951), 27-9.

9. For background information on the western proposal see Memorandum by the

Secretary of State for Foreign Affairs, E. Bevin, to the Cabinet, 11 April 1950, CP

(50)66, Cabinet Office Papers 129/39, PRO. 10. Ibid., and US Department of State, Bureau of Public Affairs, Foreign Relations

of the United States, 1949, Vol. 3: Council of Foreign Ministers: Germany and Austria (Washington, DC 1974), 1097.

11. In private discussions with the British, the Yugoslavs presented a different

picture of the 'sudden' withdrawal of Soviet support. Two years earlier, during the Moscow Conference of Foreign Ministers, the Yugoslav delegation had been summoned to the Kremlin, informed that the Soviet Union would imminently reject Yugoslav claims, and given 48 hours to construct a modified Yugoslav position. Scrambling to meet the deadline, the Yugoslavs delivered a compromise position to the Kremlin two

days later. The Soviet leaders held on to the Yugoslav compromise, delivering it for maximum economic benefit two years after the Belgrade regime actually had been forced to revise its demands. See 'Austrian Treaty: Soviet Policy in 1947', Foreign Office Minute by M.F. Cullis, German Political Department, 16 August 1950; minute concerns an account given to Cullis by M. Milutinovic, First Secretary of the Yugoslav Embassy in London, regarding Soviet policy toward the Austrian treaty in general, and the Yugoslav claims on Austria in particular, during the Moscow Conference of the Council of Foreign Ministers in April 1947; FO 371/84907 (C5213), PRO.

12. 'Austrian Hopes Fade', Scotsman, 7 February 1950. 13. Report to the National Security Council by the Department of State, NSC 38,

'The Austrian Treaty in the Council of Foreign Ministers', 8 December 1948, President's Secretary File, Truman Library.

14. Secretary of Defense Louis Johnson to Secretary of State Dean Acheson, 14 June 1949, Attachment B of NSC 38/1, 'A Report to the National Security Council by the Secretary of Defense on Future Course of Action with Respect to Austria', 16 June 1949, President's Secretary File, Truman Library.

15. Telegram, Secretary of State Acheson, Paris, to [Department of State] Washington, no. DELSEC 1916, 19 June 1949, Attachment A of NSC 38/2, 'A Report to the National Security Council by the Secretary of State on Future Course of US Action with Respect to Austria', 1 July 1949, President's Secretary File, Truman Library.

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16. Secretary of State Dean Acheson to Admiral Sidney W. Souers, executive

secretary of the National Security Council, 1 July 1949, part of NSC 38/2, 'A Report to the National Security Council by the Secretary of State on Future Course of US Action with Respect to Austria', 1 July 1949, President's Secretary File, Truman Library.


18. 'Notes on the Security Council Meeting Relative to Austrian Peace Treaty', 2, 20 October 1949, dictated by Tracy S. Voorhees, Under-Secretary of the Army, RG 330, Records of the Office of the Secretary of Defense, Military Documents Division, National Archives, Washington, DC (hereafter NA).

19. Memorandum [of conversation at the National Security Council meeting of 7

July 1949], 'Training of Austrian Army' [by Secretary of State Dean Acheson], 7 July 1949, Papers of Dean Acheson, Truman Library.


21. Minutes of the 43rd Meeting of the National Security Council, The White House, 7 July 1949, President's Secretary File, Truman Library.

22. Telegram, Foreign Office to Vienna, 6 August 1949, FO 371/76446 (C6274), PRO.

23. Telegram from Sir B. Jerram, Vienna, to Foreign Office, 13 August 1949, FO 371/76446(C6417), PRO.

24. Secretary, Chiefs of Staff Committee, to the Foreign Office, 13 December 1947, FO 371/70388(C199/G); and Chiefs of Staff Committee, Joint Planning Staff, 'Withdrawal of Allied Forces from Austria; Report by the Joint Planning Staff', 5 December 1947, FO 371/70388(C199/G), PRO.

25. [Record of Conversation between Mr Mallet and the Secretary of State], Foreign Office minute by M.F. Cullis, 19 August 1949, FO 371/76447(C6548), PRO.

26. Conversation between the Secretary of State [Bevin] and the Austrian Foreign Minister [Gruber], 25 August 1949, FO 371/76496(C8543), and telegram, Foreign Office [Bevin] to Vienna, 25 August 1949, FO 371/76447(C6771), PRO.

27. 'Conversation between the Secretary of State [Bevin] and the United States Ambassador [Douglas]: Austrian Treaty Negotiations', 26 August 1949, FO 371/ 76496(C8543), PRO.

28. Ibid. 29. Telegram from Foreign Office [Bevin], to Washington, 26 August 1949, FO 371/

76447(C 176/3), PRO. 30. See, for example, record of the meeting between the Soviet Ambassador and the

Minister of State, telegram, Foreign Office to Vienna, 25 August 1949, FO 371/ 76447(C6771), PRO.

31. Foreign Office minute by M.F. Cullis to Sir I. Kirkpatrick, 9 September 1949, FO 371/76448(C7901), PRO.

32. Record of conversation between Major-General Winterton and Vice-Chancellor Adolf Schaerf, 1 September 1949, FO 371/76448(C7067/G), PRO.

33. Telegram, Sir B. Jerram, Vienna, to Foreign Office, 7 September 1949, FO 371/ 76448(C7043), PRO.

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34. Telegram, Foreign Office to Washington, 14 September 1949, FO 371/ 76449(C7024), and memorandum by the Secretary of State for Foreign Affairs [Bevin] to the Cabinet, 11 April 1950, CP (50) 66, Cabinet Office 129/39, both in PRO.

35. Acting chief of Division of Austrian Affairs (Williamson) to the minister in Austria (Erhardt), 4 October 1949, in US Department of State, Bureau of Public Affairs, Foreign Relations of the United States, 1949, vol. 3: Council of Foreign Ministers; Germany and Austria (Washington, DC 1974), 1172.

36. Ibid., 1171. 37. Memorandum of conversation, 'Tripartite Position on Austrian Treaty', 15

September 1949, US State Department Papers of Dean Acheson, Truman Library. 38. Acting Chief of the Division of Austrian Affairs (Williamson) to the Minister in

Austria (Erhardt), 4 October 1949, in US Department of State, Bureau of Public Affairs, Foreign Relations of the United States, 1949, Vol. 3: Council of Foreign Ministers; Germany and Austria (Washington, DC 1974), 1171-72.

39. 'As for the French, you can imagine that Berthelot, without a Government, is not a very constructive colleague. .. .' Mallet, New York, to Sir Ivone Kirkpatrick, 24 October 1949, FO 371/76451(C8274), PRO.

40. British record of a meeting of the three western foreign ministers to discuss the Austrian treaty, held at the Waldorf Astoria Hotel at 4.00 pm on Thursday, 29 September 1949, FO 371/76451(C7755), PRO.

41. Bevin to Acheson, 1 October 1949, FO 371/76451(C7962), PRO. 42. 'Continuing Soviet Tactics to Block Austrian Treaty Negotiations', statement

by Secretary Acheson in Department of State Bulletin, 22 (6 March 1950), and US Department of State, The Austrian State Treaty, 17.

43. 'Notes on the Security Council Meeting Relative to Austrian Peace Treaty', 20 October 1949, dictated by Tracy S. Voorhees, Under-Secretary of the Army, RG 330, Records of the Secretary of Defense, Military Documents Section, NA.

44. Memorandum from Tracy S. Voorhees, Deputy to the Secretary of Defense as to occupied areas, to the Secretary of Defense, 20 October 1949, Subject: 'Austrian Treaty Negotiations - NSC/38/1, and 38/2', RG 330, Records of the Office of the Secretary of Defense, NA. On reactions at the Department of State see Chief of the Division of Austrian Affairs (Williamson) to the Minister in Austria (Erhardt), 24 October 1949, in US Department of State, Bureau of Public Affairs, Foreign Relations of the United States, Vol. 3: Council of Foreign Ministers; Germany and Austria (Washington, DC 1974), 1184-5.

45. Statement by General Keyes contained in memorandum from Tracy S. Voorhees, Deputy to the Secretary of Defense as to occupied areas, 20 October 1949, Subject: 'Austrian Treaty Negotiations - NSC/38, 38/1, 38/2', RG 330, Records of the Office of the Secretary of Defense, NA. On reactions at the Department of State see Chief of the Division of Austrian Affairs (Williamson) to the Minister in Austria (Erhardt), 24 October 1949, in US Department of State, Bureau of Public Affairs, Foreign Relations of the United States, 1949, Vol. 3: Council of Foreign Ministers; Germany and Austria (Washington, DC 1974), 1184-5.

46. Chief of the Division of Austrian Affairs (Williamson) to the Minister in Austria (Erhardt), 24 October 1949, in US Department of State, Bureau of Public Affairs, Foreign Relations of the United States, Vol. 3: Council of Foreign Ministers; Germany and Austria (Washington, DC 1974), 1184.

47. Memorandum of conversation, meeting of the Secretary of State Dean Acheson, Secretary of Defense Louis Johnson, and President Truman, 'Austrian Treaty', 26 October 1949, in the Papers of Dean Acheson, Truman Library.

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48. Minute addressed to the private secretary by A.G. Gilchrist, 26 November 1949, FO 371/76453(C9155), PRO.

49. Report to the President by the National Security Council on 'Future Courses of US Action with Respect to Austria', NSC 38/4, 17 November 1949, approved by the President on 18 November 1949, President's Secretary File, Truman Library.

50. Telegram, Sir A. Cadogan, New York, to Foreign Office, 19 November 1949, FO 371/76542(C8871), PRO.

51. Minute addressed to the Secretary of State by I. Kirkpatrick, 12 December 1949, FO 371/76457(C9642), PRO; and memorandum by the Secretary of State for

Foreign Affairs [Bevin], to the Cabinet, 11 April 1950, CO (50) 66, Cabinet Office

Papers 129/39, PRO. 52. British record of a meeting of the Three Western Foreign Ministers to discuss

the Austrian Treaty, held at the Waldorf Astoria Hotel at 4.00 pm on Thursday, 29

September 1949, FO 371/76451(C7755), PRO. 53. Cf. ibid. 54. See, for example, Joseph Alsop, 'Matter of Fact', New York Herald Tribune, 10

April 1950. There seems to be a dispute about whether the Soviet atomic explosion was in late August or September. Thomas W. Wolfe claims that the first known test of a Soviet atomic weapon occurred on 29 August 1949: Wolfe, Soviet Power and Europe, 1945-1970 (Baltimore 1970), 36, n. 9.

55. Wolfe, op. cit., 38-49. 56. William B. Bader, Austria between East and West, 1945-1955 (Stanford 1966)

198-9. 57. Alvin Z. Rubenstein (ed.), The Foreign Policy of the Soviet Union (New York

1960), 247, 249.

Audrey Kurth Cronin is Assistant Professor and Assistant Director

at the Center for International Security Studies, School of Public Affairs, University

of Maryland. Recent publications include Great Power Politics and the Struggle over

Austria, 1945-1955 (Ithaca, New York 1986) and she is currently working on a book on

regional conflicts and neutralization agreements between the superpowers.

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East-West Negotiations over Austria in 1949: Turning-Point in the Cold War

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