GENERAL STATEMENT OF ASSISTANT SECRETARY OF STATE PERKINS

Mr. GARY. We are pleased to have with us this morning the United States High Commissioner for Austria, the Honorable Walter J. Donnelly, and Mr. Perkins, the Assistant Secretary of State for European Affairs.

Would you like to make a general statement, Mr. Donnelly, or would you prefer to have Mr. Perkins speak first?

Mr. PERKINS. In view of the shortness of time, Mr. Chairman, I prepared a brief preliminary statement, which is before you.

Mr. GARY. I think you ought to make that. Do you want to make your statement first, or let Mr. Donnelly proceed?

Mr. PERKINS. I understand we are to go over to the Senate at 11 o'clock, and in the interest of saving time, it might be well to put this in the record.

Mr. WIGGLESWORTH. Are we going to have a hearing, Mr. Secretary?

Mr. PERKINS. I understand it was arranged that we were to move over to the Senate at 11 o'clock.

Mr. WIGGLESWORTH. I do not know about that. I thought the witnesses were to appear here at 10 o'clock this morning.

Mr. GARY. The understanding was that Mr. Perkins and Mr. Donnelly would make general statements and then we could hear from some of the others. But of course we can make some other arrangement, if that is not satisfactory.

Mr. PERKINS. It was for that reason that I just suggested placing in the record this short statement, and then have Mr. Donnelly make his statement to the committee.

Mr. WIGGLESWORTH. I do not know what is in your statement, but if it is worthwhile, I think we ought to have it.

Mr. GARY. I think it would be well for you to read your statement into the record, Mr. Perkins.

Mr. PERKINS. I shall be very glad to do so.

I am grateful for the opportunity to present the Government in Occupied Areas budget for Austria.

As you know, the responsibility for the civil occupation functions of the United States in Austria was transferred by Executive Order 10171 from the Department of the Army to the Department of State on October 16, 1950. On that date the Office of the High Commissioner for Austria, which we usually call USCOA, was established as the successor organization to the United States element of the Allied Commission for Austria, known as USACA. This, therefore, is the first budget prepared by the Department of State for this program. The State Department asks the Congress to appropriate $4,337,000 for the 1952 budget for government in occupied areas of Austria. The justification for such an amount rests upon United States policy objectives in Austria and the manner by which these objectives are to be realized. In essence, it is considered to be in the United States interest that Austria become a free and independent nation as stated in the Moscow Declaration of November 1, 1943. By this same document the signatory powers the United States, Great Britain, and the Soviet Union-recognized that Austria has been a victim of Hitler aggression and hence had the status of a liberated rather than an enemy country.

As a consequence it was later agreed to negotiate a state treaty restoring to Austria the rights and responsibilities of a sovereign nation. Such a treaty the United States, Great Britain, and France have not been able to conclude for Austria despite no less than 258 separate meetings of the treaty deputies lasting from January 1947 to the present. During this time it has become increasingly apparent that the Soviet Union, by quibbling over minor points or introducing extraneous issues, has blocked conclusion of the treaty because it does not wish to end the occupation of Austria and to withdraw from Austria. As a result, the United States has been forced to continue to be a member of the four-power occupation which now operates under the modified control agreement signed on June 28, 1946.

In the absence of a treaty, the United States through several foreign-aid programs, principally the economic recovery program (ERP), has worked to foster Austrian political stability and independence by strengthening the Austrian economy. I understand the Congress will review the current aid program when it considers the foreign-aid budget.

The United States in its role of occupying power has striven to lighten the burdens of the occupation upon the Austrian people and to restore to the Austrian Government as many functions as possible within the framework of the existing quadripartite machinery. As the tension has grown between the free world and the Soviet bloc, the United States element in Austria, in cooperation with the French and British elements, has devoted increasing attention to thwarting Soviet attempts to bring pressure to bear on the Austrian Government and to take unilateral action in support of the tiny Austrian Communist Party against the overwhelming majority of Austrians who favor the West.

From your own perusual of the daily press, you know of the techniques of terror and intimidation used by the Soviets against the Austrian Government and people. They include the standard Soviet propaganda campaign of lies, interruption of transportation and communication facilities, evasion of Austrian laws affecting customs, foreign exchange, and taxes, appropriation of Austrian oil and other resources without compensation, interference with the Austrian police, and even kidnapings.

It is a tribute to the courage of the Austrian people that they continue to resist these pressures. At the same time it is clear that resistance would be futile or even suicidal if made without the diplomatic support and material aid from the Western Powers. Austria remains the only place in the world where the Soviet Union sits regularly at the conference table with the United States and other powers to conduct the affairs of a joint occupation. The quadripartite machinery stands as a bar against outright Soviet unilateral action and as a means of maintaining a united Austria under the administration of a freely elected Austrian Government. The USCOA budget in the broad view is an essential part of the cost of preventing the paralysis of this Government through Soviet pressures, the partition. of Austria into two separate parts, or, in the last extremity, the absorption of Austria into the Soviet bloc.

That is the end of my preliminary statement, Mr. Chairman.

GENERAL STATEMENT OF COMMISSIONER DONNELLY

Mr. GARY. Mr. Donnelly, we will be very glad to hear from you. Mr. DONNELLY. Thank you, Congressman.

Austria is a small country of 7,000,000 people, 2,000,000 of whom live in Vienna. In 1943, we signed a declaration with the British and Soviet Governments in which all three pledged themselves to reestablish a free and independent Austria. France subsequently associated itself with this declaration. In 1945, the four-power occupation of Austria was set up until a treaty could be negotiated. Today, 6 years after the end of hostilities, Austria is still occupied. As you know, we still have been unable to obtain Soviet consent to the Austrian treaty. That, in a word, is why our forces are still there. It is necessary that our troops continue in Austria as long as Soviet troops remain. United States policy calls for completion of the treaty, the removal of all occupation forces, and the complete restoration of Austria's independence and sovereignty. In view of the Soviet refusal to conclude the treaty, however, we have no alternative but to remain and to continue to participate in the quadripartite occupation.

It is not alone our regard for the freedom and integrity of Austria which keeps us there. I feel strongly that our national interest demands that we maintain our position in this strategic area of Central Europe. If you will look at the map, you will see that Austria borders two of the satellite countries-Czechoslovakia and Hungary-as well as Germany, Switzerland, Italy, and Yugoslavia. Moreover, Vienna is farther east than Berlin, and can therefore aptly be called the eastern outpost of our Western World. Vienna has long been the focal point of Central Europe. It was a hub of communications, a center of trade and culture, and its influence is felt even today. I might say especially today, for now it has become again a sort of Mecca for the peoples to the east, who know it as the nearest haven of refuge from their oppression. Even today, despite the barbed wire, land mines, and border patrols of the satellite regimes, refugees escape to Austria. I think one can say without exaggeration that so long as our forces remain in Vienna the peoples of Central Europe will not wholly lose hope. It is no wonder then that they watch with interest every development there. The Soviets. undoubtedly realize this as well as we do. So long as Austria remains a democratic country, so long as the west stands guard in Vienna, the Communist masters in Central Europe will not feel

secure.

This means to me that Austria possesses an importance quite out of proportion to its small area and population. But we should not overlook the role which the Austrians themselves play in this eastern outpost of ours. To me, the Austrian resistance to Soviet pressures and persuasions is one of the brightest chapters in postwar Europe. Since the beginning of the occupation, it is estimated that some 600 Austrians have disappeared into Soviet prisons and concentration

Others have escaped the same fate only by fleeing to the west in the nick of time. These arrests, abductions, and kidnapings are happily less frequently nowadays, but they happen often enough to prevent the Austrians from forgetting what may happen to those who are in disfavor with the Soviets. Only last month. four Aus

trians were kidnaped by the Soviets on the streets of Vienna. Yet, you cannot arrest an entire population, and these terrorist tactics of the Soviets have had little effect on Austrian morale and will to resist. In every national election, the Austrian Communist Party has not been able to gain more than 5 percent of the vote. Last year, in the first local elections held in the Soviet zone of Austria since the end of the war, the voters threw out 10 of the 11 Communist mayors appointed by the Soviets in 1945. This courage, this refusal to be awed by the Soviet might, runs all through the Austrian population. This spirit depends in large measure upon the consciousness of western support.

Under a coalition government of the Socialist and People's Parties, Austria has attained an enviable degree of political stability. ECA aid and their own hard work have brought them an economic recovery that could not have been imagined in 1945. If we consider that this political stability has been achieved in the face of Soviet pressure and this economic recovery attained in spite of the heavy burden of Soviet occupation which has denied to the Austrian economy so much of the natural resources of the country, then I think we can take satisfaction in what we have helped the Austrian people to accomplish.

Let us turn for a moment to the means which were used for this assistance. The Allied Commission, consisting of the United States, British, French, and Soviet High Commissioners and their staffs, was established in 1945 for the control of Austria. You are all familiar, I think, with what I shall call the inverted veto, which was written into the Four-Power Control Agreement in 1946. Under this provision, ordinary laws of the Austrian Government came into force 31 days after submission to the Allied Commission unless unanimously vetoed, while only constitutional laws can be blocked by the veto of one power. This rule, for which the American element of the Allied Commission can justly claim much credit, has meant in practice that the Austrian Government has been free to conduct its affairs without major interference from the Soviet occupation authorities. I say "major" interference, for it sometimes happens that the Soviet authorities attempt to block the implementation of Austrian laws in their zone. We are always alert to make public issue of such illegal interventions, however, and I have no doubt that this vigilance, coupled with the Austrian resistance which I stressed earlier, has acted as a very real deterrent to unilateral Soviet action in derogation of the control agreement.

The Allied Commission in Austria is the only four-power body in existence today which has functioned without interruption since its inception. I doubt if anyone knows the full reason behind this Soviet action, but I myself believe that a partial explanation may be found in the carefully worked out agreements which we obtained in writing from them in the early days of the occupation regarding the administration of Austria and the rights of the occupying powers. Another reason may be that the Soviets have deliberately tried to maintain four-power machinery at one point so as not to lose all such contact with the west. Another reason may lie in the principle, followed by all three western powers in Austria, of cooperation with the Soviets so long as they respect the control agreement, but of exerting all the authority at their command to block any Soviet violation of that agreement.

I do not wish to underestimate in any way Soviet potentialities in Austria. They are capable of taking over complete control of their zone at any time, but only by force of arms. The time is long past when mere threats and bullying could achieve Soviet objectives. I believe the Soviets themselves are fully aware of the slow but steady decline of their influence over the Austrian populace, and that this awareness explains their periodic attempts to reassert control through browbeating Austrian officials, and thus maintain their status quo in the country. In other ways, too, the Soviets show their nervousness over the state of affairs in Austria. A vigilant guard is maintained over their forces to prevent contamination by Western ideas. Fraternization with Austrians is forbidden, and the families of officers and men are generally kept behind in the Soviet Union or at best permitted only brief visits to Austria. The desertion of a single Soviet soldier is enough to set off a zonal-wide manhunt, while antiSoviet propaganda brings an equally alarmed reaction from the Soviet command. Several months ago a few tin cans filled with antiSoviet leaflets, popularly believed to have been thrown overboard from a Yugoslav barge, were found floating down the Danube. Within a matter of hours, a mass fishing expedition had been organized, to the delight of the Viennese, who were highly diverted by the sight of thousands of Soviet soldiers trying to fish out every conceivable sort of floating object from the swift-flowing Danube.

I feel the Soviets in Austria have reason to be unhappy. For much of the occupation, Austrian resistance was tempered by the hope that their treaty might be just around the corner. Since the Communist attack in Korea, however, and the valiant efforts of UN forces to repulse that attack, there is a new spirit among the Austrian people. While not entirely abandoning hope for the treaty, they have faced the possibility of further Soviet encroachments with great courage.

I should now like to make a few remarks on the budget itself. The estimates before you provide for the continuation of our occupation activities at about the same level contemplated by the Department of the Army and carried on by us during fiscal year 1951. The estimate has been very carefully screened. In accordance with the pay-asyou-go agreement the majority of United States expenditures in Austria are paid in dollars. Every effort is being made, however, consistent with this agreement and with what we believe our mission in Austria to be, to reduce the dollar cost of our program. Along this line we have arranged to pay the salaries of local employees, to purchase approximately half of our newsprint, and to pay for a substantial part of the program and operating expenses of the public affairs activities in schillings. We have reduced the number of American personnel working on civil affairs functions from 290 a year ago to 244. As you will note, it is nevertheless necessary to request an increase of $252,112 over estimated 1951 obligations; that is, an increase from $4,084,888 to $4,337,000. This increase is attributable in large part to the fact that the Government and Relief in Occupied Areas (GARIOA) funds which were used by the Department of the Army for civil affairs functions and which were transferred to the Department of State were supplemented in 1951 as in previous years by appropriations other than GARIOA. For example, the salaries of approximately 92 military and 21 civilians performing civil affairs.