800.515/7–2444: Telegram
The Acting Secretary of State to the Ambassador in the Soviet Union (Harriman)
2583. ReDeptel 1926, August 12. From Treasury and Department. You are requested to convey to the Soviet authorities the following statement of principles which, in our view, should govern the introduction of Allied Military Schillings into Austria. We should like to obtain the reaction of the Soviet authorities to these proposals as quickly as possible. Your British colleague is receiving similar but not necessarily identical instructions and if you consider it appropriate, you may concert with him in your approach to the Soviets. London has been notified respecting this communication.
- 1.
- Allied Military Schillings will be used by Allied occupying forces and will be proclaimed legal tender on their entry into Austria, but Reichsmarks wall remain legal tender until conversion.
- 2.
- Conversion of Reichmarks circulating in Austria into Allied Military Schillings will take place as soon as administratively feasible and all frontiers can be effectively closed.
- 3.
- Allied Military Schillings are to be used by the Allied forces for pay of troops and their own direct expenditures. So far as possible financial requirements of Austrian authorities and institutions will be met by advances from banks under instructions from Allied Military authorities, rather than by direct advances from Allied Military authorities. Advances from local banks will be in Reichsmarks before conversion. Direct advances of Allied Military Schillings by military authorities will only be made in exceptional circumstances.
- 4.
- The exchange rate between the schilling and the Reichmark should be fixed on the eve of entry by tripartite agreement. For reasons of administrative convenience, we should hope that the rate could be fixed at one Reichsmark equals one Allied Military Schilling. If adequate supplies of Allied Military Schillings are not available and there is a marked depreciation of the Reichsmark in Austria before Allied entry, it might prove advisable to give the Allied Military Schilling a higher value in terms of Reichsmarks.
- 5.
- The military rate for the schilling in terms of dollars and pounds should be fixed initially by reference to the mark-schilling rate and the military rate for the mark in dollars and pounds. Thus, if the mark-schilling rate is one to one and the mark rate is 10 to the dollar, the provisional military rate for the schilling will be 10 to the dollar.
- 6.
- No general exchange rate between the schilling and other currencies should be established until complete withdrawal of Reichsmark currency has been accomplished and there has been an opportunity to observe the general situation in Austria. Thereafter, the schilling exchange rate can be fixed independently of that for the mark currency in Germany.
Sent to Moscow. Repeated to London.10
- Repeated to London as telegram 9129.↩