REPORTED FINANCIAL CRISIS IN THE USIA ADMINISTRATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R015500170010-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: January 14, 2011
• Sequence Number: 10
• Publication Date: December 29, 1952
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/01/14: CIA-RDP82-00457RO15500170010-5
Fft 552 5;1 4AA
CENTRAL INTEL JP EI C,CP GEItCY.- e .s
INFORMATION REPORT REPORT
CD NO.
COUNTRY Austria
SUBJECT
DATE OF
INFO.
PLACE
ACQUIRED
CLASSIFICATION SECRET, /CO -ROL - U. S. OFFICIALS .ONLY
SECURITY INFORMATION
Reported. Financial Crisis in. the USIA
Admini.st:r.?at ion
THIS DOCUMENT CONTAINS INFORMATION AFFECTING THE NATIONAL DEFENSE
OF THE UNITED STATES, WITHIN THE MEANING OF TITLE 18, SECTIONS 793
AND 794, OF THE U.S. CODE, AS AMENDED. ITS TRANSMISSION OR REVE-
LATION OF ITS CONTENTS TO OR RECEIPT BY AN UNAUTHORIZED PERSON IS
PROHIBITED BY LAW. THE REPRODUCTION OF THIS FORM IS PROHIBITED,
enterprises. 'Firms must deposit their cash balances -daily at the Soviet
Military Bank. On 26 September 1952, the entire light industry section of
USIA had. only 90,000,sch.llings for the payment.of wages. On the same
day the ErsteOesterreichische G1 zstoffabrik approached. the Finance
Ministry for a large interim credit, stating that the concern was at the
moment completely insolvent and would have to dismiss 1,100 workers and
staff if the Aast:rian authorities were unwilling to grant credit. The
Finance Ministry, however, refused. and. told the factory management that they.,
must get rid of their existing stocks at reduced.pr4ces. -
DATE DISTR. 29. December 1952
NO. OF PAGES 2
NO. OF ENCLS.
(LISTED BELOW)
SUPPLEMENT TO
REPORT NO.
50X1-HUM
THIS IS UNEVALUATED INFORMATION 50X1-HUM
1. Contrary to various recently expressed opinions, the present number of
employees working in USIA firms in Austria remains at a figure of about
45,000.
2. Shortage of currency, including schillings, remains .a problem for USIA
The difficulties i.nto.iabich. the USIA concerns have fallen dan be attributed
mainly to the f ollowIng , causes :
a. For some years they have occupied themselves exclusively with exports
and. have neglected their Austrian customers, who have now found new
supp.l.iers
b,, The raw-material stocks of the USIA concerns never amount to more than
that necessary for two weeksH production.
c. A custom ha.s grown up of unusually long periods for payment; an example
being the present conflict between the Mineral Oil Administration
and various USIA ,building coacsrns.
d. U8iAc:oncerns have the reputation of being extremely slow payers
as customers of firms outside their own organization.
S.FCT?E'I'/CO: 'ROL - U,.S. OFFICIALS ONLY
NSRB
FBI
Sanitized Copy Approved for Release 2011/01/14: CIA-RDP82-00457RO15500170010-5
 Sanitized Copy Approved for Release 2011/01/14: CIA-RDP82-00457RO15500170010-5
50X1-HUM
SEOR '/00NTROL U. S. 0. IOIALS ONLY
Je o The Soviet- lh ii t 'Which has hitherto been in the habit of
grant ia'g ,its to the firms at an average rate of 9 per cent
has.; since the - end: of July _..1.952, vir?tu:ally ceased: to do so.
f The .exorbitant adminlst.r?ati'on costs levied .by the Soviet Military
Bank on the concerns have prevented, them from. clearing their heavy
faffebted-ness to the Bank-,
4 The urn.satisfa;ctory fina;n.c:ial position. of the USIA firms is at present,
.gccupytng the attention of bothr'the P-Lnance and. the .Economic- Sections at 50X1-HUM
the Soviet ' Headquarters in the Imperial Hotel, Vienna.
several solutign.s to the problem have been suggested, one being
that the entireU:SIA organization should be turned over by the present 50X1-HUM
management to the Mineral Oil Administration, which is financially strong
,enough to reactivate the USIA concerns again,,
Soviet Headquarters has also considered, that the USIA. firms might be turned
over to the Republic of Austria or, in default, given over to it .as .a
trusteeship o In both the latter cases, however, the Russians would
stipulate that none of t present workers ,or staff should be dismissed,
but that they m.iglit.be transferred into other USIA concerns
610 In the Auatrlan Ministry of Finance an examination is being made : as to
whether the whole block of the UUSI.A concerns with, thti_r machine plants
represent an active asset.. It has.been .estimated that, under Austrian
managemen.t,the present production of these concerns ' could be easily
attained despite a 25 percent of pprstnnfel.
The Central Bureau, of USIA in the Trattre.rhof placed a printing order
with the Globus publishing house on 20 September 1952 for 50,000 dismissal
orders annd a cor^r?espond ing number of rehiring orders. There is anxiety
among the workers t.F t~ through a large-scale dismi.sBal and rehiring
aot.ion., they would.be epriv of advantages they have earned by previous
The satpilite states now only deal. with USIA on a, cash basis All coal
.deliver J from Czechoslovakia must .be paid for in, cash. Bulgaria deals
with. USIA only through the ,Austr. ian National Bank in order to be sure of
her money.,: ? p-W,,d. hta direct settlement of accounts.but demands between
12 percent `and. 20 percent: Ps a .deposit o ;Since the early part of 1952,
deliveries of USIA to the USSR. have virtually ceased..
US2A. and the Military Bank have gambled .and have lost large sums of money
by bxyirZ up dollars with sehillings at high rates on the black market
10 Only the rdeta .; . con.cer?ns (ORS) continue to flour isho The average monthly
turnover per buss tress amounts to 160.,000:' schillings o The, shop in the
Operangaese, Vienns, I, has .a .monthly turnover of 170,000 - hillings
The,. .net p:r'ofits of the OR firms do, not, however, go to If.SIA, as they have
their own fin ncial and. economic administrations,.
-5ECRET/00NTROL - U.S., OFFICIALS. ONLY
Sanitized Copy Approved for Release 2011/01/14: CIA-RDP82-00457RO15500170010-5