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“Austria is Free!” Part II — Negotiating with the Soviets

For several years since the end of World War II, the U.S., UK and France had done what they could to support war-torn Austria economically and promote fledgling democratic institutions. Efforts to negotiate a treaty which would grant Austria its full independence and allow the withdrawal of the Four Powers were continuously blocked by the USSR, which was actively plundering the small country. Things changed dramatically in March 1953, with Stalin’s death and Moscow’s desire for detente with the West.

However, negotiations of this magnitude, especially with an adversary like the USSR, are fraught with tension even under the best of circumstances. The U.S. side had to sit it out and make sure it did not give in to Soviet tactics.

Halvor C. Ekern worked as Assistant to High Commissioner, Office of the High Commissioner, in Vienna from 1945-1955. He was interviewed by Charles Stuart Kennedy in 1992. Horace G. Torbert worked as Coordinator of Intelligence in Austria from 1950-1955; he was interviewed by Charles Stuart Kennedy in 1988.

Dr. William Lloyd Stearman was a Political Officer in Austria from 1950-1955 and was interviewed by Kennedy in 1992. Mary Seymour Olmsted was stationed as a Commercial Officer in Vienna from 1951-1955; she. was also interviewed by Kennedy in 1992. Chester H. Opal served as a Public Affairs Officer in Vienna from 1951-1953. He helped found the NATO Information Service and was interviewed by G. Lewis Schmidt in 1989.

Go here for Part I. Read other Moments on negotiating.


 “What we put into Western Austria, the Soviets were taking out of Eastern Austria”

OLMSTED: In ’52 the stabilization program was enacted. Dean Acheson, then the Secretary of State (pictured), and his wife paid an official visit to Austria. That was while Walter Donnelly was still the ambassador [and High Commissioner].

Secretary Acheson held talks with the government of Austria and he made it clear at that time that the United States was going to stay in Austria, and was going to support the Austrians in every way that we could. A stabilization program was announced, I guess it was a little after that, in which the shilling was devalued but was backed by American loans. That was what put the economy on a firm footing.

There were these two things: the renewal of confidence that came, stemming out of Acheson’s visit, and what he said to the Austrian government, and the stabilization program. That was when the black market started to die out, and when prices went up but then they stabilized.

OPAL: The Soviets had absolute control in their zone, not only economically. In terms of dollars that we put into Western Austria, they were taking out of Eastern Austria….

I remember going to a meeting, long before I came to Vienna or even knew I was going there, and Hans Morgenthau was head of a Marshall Plan study group, and this is the conclusion they came to, that we were putting in almost equivalent amount in dollars to what the Soviets were taking out of the Eastern Zone. We were keeping things alive there.

Stalin’s death and detente with the Soviets

STEARMAN: Stalin died. He died on March 5, 1953, and things started to change. Fairly soon interesting things started to happen. They embarked then on their second detente campaign as a reaction to our Korean buildup.

OLMSTED: I give [Ambassador to Austria] Llewellyn Thompson very high marks. [Ambassador to the USSR] Chip Bohlen was in Moscow, and he didn’t see it coming but Llewellyn Thompson did. The Soviets made some statements about the future of Austria and Llewellyn Thompson said, “I think they mean it this time. I think we can move.” And he was the one who carried the ball. He led our negotiating team, and I think he did a brilliant job on it.

EKERN:  What I think led to the treaty, was that the Russians at that time, 1953, ’54, were trying to get a neutralized Germany if I remember. They made an attempt to get Germany out of NATO but we didn’t think a neutralized Germany would work. So [Soviet Foreign Minister Vyacheslav] Molotov decided to set an example and have a neutralized Austria, to show them how it could be done.

It was in early 1955 that they called [Austrian] Chancellor [Julius] Rabb and suddenly said they wanted this treaty. It shocked us all. I remember Llewellyn Thompson got the telegram and called us in and said that we must be prepared for 30 days of hard work. He was right.

By the time [the treaty came around] the German scene had changed. Germany was more integrated into NATO….And it became clear even to the Russians that the neutralization of Germany was not going to work….

“You had to slug it out with them and be persistent”

EKERN:  I worked for the U.S. element of the Allied Commission which was called the Quadripartite Directorate….The State Department took this over in 1950…. I worked on that treaty from 1947 until 1955….

Q: How does one work on a treaty when you know the other side is not going to do anything with it?

EKERN: Well, by diplomatic persistence and patience — meeting whenever we could get them to come. Article 35 was the question of disposition of German assets. Since Germany literally owned everything, they took over the Austria lock, stock and barrel; the Russians were free to choose what they wanted to seize in their zone as German assets…including the un-built autobahn, for example, which they seized as a German asset.

We could not leave them there with an unchallenged territorial position or we wouldn’t have had an independent country. We whittled away at these other articles trying to get them squared away, all the time chewing away on Article 35. We even had a special Austrian treaty commission come in, mostly to deal with the disposition of the oil fields. An American lawyer came in, worked for a year, and gave up.

STEARMAN: You learn a lot in that length of time about how to deal with the Soviets….You had to be precise, patient, perseverant and powerful to deal with the Soviets. This required an enormous amount of patience.

I remember once arguing for six hours on whether there should be a comma or hyphen between two words which would substantially change the whole meaning of the sentence. But you have to slug it out with them and be persistent.

I would come in with a couple of bottles of soda water…I was a pipe smoker then and would also pull out three or four pipes, and they knew I was settled in for the day. They would try to wear you down. But you have to persevere and also be precise.

Most of the problems we had dealing with Soviets were the result of imprecision in agreements that we concluded with them. They were not bad about observing the exact letter of agreements, I will say that, but we were very sloppy in the way in which we formulated a lot of agreements.

“Well, we have a concept in English common law called equity”

I never realized what our problem was until at one point I was going to buy a house here in Georgetown and I looked at the contract as if I were dealing with Russians. I rewrote the whole thing because I thought there were a lot of loopholes in the contract, even though it was written by lawyers. As a result, I lost the house.

I later asked a lawyer how the real estate lawyers could draft a contract with so many loopholes in it. He replied, “Well, we have a concept in English common law called equity [a group of rights and procedures to provide fairness, unhampered by the narrow strictures of the old common law or other technical requirements of the law. In essence courts do the fair thing by court orders such as ordering a person to do something to prevent irreparable damage.] 

These things are resolved through the concept of equity. We don’t have to dot all the i’s and cross all the t’s. I then realized where we had gone wrong. The people who draft these treaties and agreements are our friends from L [the Legal Bureau of the Department of State] for the most part….

They are lawyers trained in the American concept of English common law with its principle of equity. So, I believe, they didn’t think they had to dot all the i’s and cross all the t’s, but dealing with the Soviets, you had to. So it was finally revealed to me much later what our problem had probably been all along.

Here are specific examples of how precision can work for us and imprecision against us. Our access to Berlin was never spelled out in great detail because it was assumed that, if we were going to have a sector of occupation in Berlin, obviously we would have a right of access to it. This was thinking in American legal terms.

This imprecision, however, made it easier for the Soviets to impose the blockade in 1948 because technically they weren’t violating any written agreement. We did, however, have an agreement on air access, for reasons I never fully understood, which was a good detailed agreement. This may be one of the reasons the Soviets didn’t try to block air access to Berlin in 1948.  General Clay’s people dealt with that situation in Berlin. Clay thought detailed agreements on Berlin would be too restrictive.

But as far as Vienna was concerned we took the opposite approach. We had one of the brightest general officers in the U.S. Army, Alfred Gruenther [later head of NATO].

“We were making progress with the Soviets because they became somewhat more reasonable in this detente period”

STEARMAN:  As a result of Korea, NATO became a military organization, prior to that it was a political organization and didn’t have any military structure. As a result of the Korean War, our defense budget went from $12.7 billion in a year to $50 billion. Then we deployed several divisions of combat troops to Europe.

We set up a NATO High Command, with Eisenhower the first Supreme Allied Commander, and it became a military organization for the first time. And then, of course, there were efforts to bring the Germans in somehow, and all of that story.

Work kind of changed, and we were making somewhat more progress with the Soviets because they became somewhat more reasonable in this detente period. Things happened that never happened before. Agreement was reached with them on various issues that had been difficult or impossible to resolve before.

Ultimately, and this was a keystone of that whole detente operation, they agreed to sign a state treaty for Austria on terms much better for Austria than they were willing to accept a year before. That treaty was signed on May 15, because on May 14, the day before, they formed the Warsaw Pact to give them a legitimate reason to maintain troops in Hungary and Romanian.

They are very legalistic and they felt if they hadn’t done that why they wouldn’t have had any legal reason to maintain troops in Romania and Hungary. (The Soviets had previously justified keeping troops in these two countries as “line of communication” units supporting Soviet forces in Austria)….

EKERN:  [The Soviets] had called for this treaty and they were stuck with it. We hammered out a treaty. It was not as easy as [Ambassador] Llewellyn Thompson predicted because on the last day, mind you, the Foreign Ministers were scheduled to come to Vienna on May 15, 1955 and I think even [Soviet Foreign Minister] Molotov was in town and they were stuck on this issue of extraterritorial privileges for the Russians having to do with properties. We refused.

They went into a one-plus-one meeting [principal plus one] and Thompson picked me to go with him. You could see that the British and the French were ready to cave, their Foreign Ministers were on their way. It would be hard to pick up a phone and tell them not to come. Eve, Leopold Feld, at that time the Austrian Foreign Minister, was silent….

I think he would have caved. The pressure was tremendous. The people were gathering in the streets and everything. But Thompson said, “No. I am prepared to tell my Foreign Minister not to come.” And the meeting broke up….

[Secretary of State John Foster Dulles] was in Paris. Thompson put me on a plane and told me to go see Dulles and tell him what is up and what we have done. But while I was in the air the Russians caved in so the treaty was signed.

TORBERT: The summer of 1955, one of the last things that I did was to go down to Vienna to be present, at least, at the occasion of the signing of the state treaty. As you know, the Soviets finally agreed and finally gave up all their opposition, although there was a very difficult ending negotiation which Tommy Thompson completed brilliantly, which formed the state treaty and made Austria an independent country.