The Administration for Soviet Property in Austria, or the USIA was formed in the Soviet zone of Allied-occupied Austria in June 1946 and operated until the withdrawal of Soviet troops in 1955. USIA operated as a de facto state corporation and controlled over four hundred expropriated Austrian factories, transportation and trading companies. USIA assets included formerly independent Austrian companies (ÖAF), factories once owned by German corporations (AEG) and former SS enterprises (DEST). At its peak in 1951 the conglomerate employed around 60 thousand people,[1] or 10% of Austrian industrial labor.[2] USIA was exempt from Austrian tariffs, disregarded Austrian taxation, and could easily trade with Eastern Europe despite the Iron Curtain and Western trade embargoes. The extraterritorial corporation attempted to be self-sufficient and was very weakly integrated with the rest of Austrian economy.[3]
Establishment
Occupation of Germany and Austria by the Soviet troops was followed by large-scale dismantling of former German equipment which was shipped to the Soviet Union as war reparations. Austria lost, in 1951 dollars, 200 million dollars' worth of German industrial properties (out of total 1.5 billion). Dismantling continued until the early summer of 1946, when the Soviet policy changed from taking Austrian assets to managing them for a profit.[4] The Soviet Department for Investigation of German Properties compiled an inventory of remaining industrial assets in the Soviet zone (Lower Austria, Burgenland and eastern districts of Upper Austria). June 27, 1945, the Soviet command transformed this Department into the Administration for Soviet Property in Eastern Austria (USIVA) and placed all industrial assets under its control. In 1947 the name was shortened to USIA. Its internal structure mimicked that of the Soviet cabinet, with nine divisions paralleling nine ministries of industries.[1][5] No less than eleven ministries in Moscow had a say in USIA affairs.[6]
Only one-tenth of USIA assets were, indeed, German.
Operations
USIA was initially managed by Red Army staff; after 1949 they were replaced by trained industrial managers. The organization was governed by a chief executive with three assistants for political, personnel, and commercial matters. USIA chiefs, on average, served two years before replacement. Over nine years of its history, USIA had five chiefs, SMV (Soviet oil enterprise) had four chairmen, etc. At first, the Soviets intended to integrate USIA enterprises into their own economy, but the futility of such and exercise soon became evident and they admitted the need to cooperate with the rest of the Austrian economy.[12]
USIA accounted for only 5% of Austrian national output and 30% of the Soviet zone output but possessed significant or even monopolistic share in some industries: 60% in glass making, 43% in leather, 40% in iron and steel etc.[13] The governments of Austria and the United States, anxious about Soviet influence, invested Marshall Plan funds into competing businesses outside of the Soviet zone and the USIA monopolists gradually lost their advantage. The Soviets had no intention to invest their own funds into Austria, the sole exception being the oil fields in Lower Austria. As a result, Soviet-occupied territories lagged behind the rest of Austria in economic growth,[14] their plant and equipment soon became "very much substandard for Austria".[15]