In making his first call on the Head of the European Division yesterday, Dr. Waldheim, the new Austrian Minister, made a formal request for the Canadian Government to give favourable consideration to acceding to the Austrian State Treaty. With apologies for discussing business on his first call, he said that he had received instructions, two days after his arrival, to make this formal request. Mr. Ford replied that we would certainly consider it and that he would notify you before Dr. Waldheim calls on you, as he hopes to do shortly.

2. Dr. Waldheim said he realized that his Government had been very slow in deciding to make an official request for Canadian accession and he understood that we might be reluctant to accede before other Western countries closer to Austria had done so. Our position was, he thought, perfectly understandable, but he wanted us to know that his Government, in an attempt to balance the accessions of Yugoslavia, Czechoslovakia and now of Poland, were making similar representations to two or three countries of Western Europe, to New Zealand, Australia, South Africa⁶⁴ and one or two of the South American countries, in addition to Canada as a North American country.

3. We had already heard from both Washington and Vienna that the Austrians are showing renewed interest in securing the accessions of some Western States to balance the Eastern European accessions. According to the State Department the French have agreed to support Austrian representations in the Benelux countries, the United States in Greece, and the United Kingdom in Canada.

4. So long as we had no clear political interest in acceding to the Austrian State Treaty, and since the Austrians had done little more than mention the matter informally, we had, as you know, been waiting not only for other Western countries to take the lead but for some progress to be made by the Austrians in settling the principal Canadian claims in Austria. Recently Mr. Bentley of the Woodcot Estates has been appointed one of the three public administrators of the Bruck Sugar Factory. So far, however, there has been no progress in settling the claims of Mr. Van Sickle's oil interests, although the Austrian State Secretary has promised that something will be done after next month's elections. Mr. Cox has, as you know, consistently recommended that further progress on these claims should be made before Canada acceded to the Austrian State Treaty. (A copy of Mr. Cox's latest despatch? on this subject is attached.)⁶⁵ If, however, we were to decide that for political reasons it was desirable for Canada to accede, I rather doubt that the failure of the Austrians to settle these claims should stand in the way and I would not put the case for postponing action on these grounds, particularly as the connections of both Van Sickle and the Bentley estates to Canada are, to say the least, rather tenuous.

5. When Dr. Waldheim comes to see you, I suggest, if you agree, you might reply along the following lines:

(a) Canada has no objection in principle to acceding to the Austrian State Treaty.

(b) We have not done so because until recently the Austrians showed no great interest in securing our accession, nor were there any Canadian interests to be served by acceding.

(c) It would seem to us more appropriate that the accessions of Czechoslovakia, Poland and Yugoslavia should be balanced by the accessions of Western countries closer to Austria than Canada; in any case we see no particular reason for leading the parade but remain open to the possibility of acceding later, if some of the Western European powers decide to do so.⁶⁶

6. The implication of this position would be that the Canadian Government would be prepared to accede to the Austrian State Treaty within two or three months if at least two⁶⁷ other Western countries⁶⁸ had done so in the meantime. Do you agree?

R.M. M[ACDONNELL]
for Under-Secretary of State
for External Affairs