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Pages from World Bank History: Early Mission to Austria

A presentation of historical events by the World Bank Group Archives

Victor Umbricht
August 29, 2003—It is often forgotten today that in the aftermath of the Second World War the Bank undertook a considerable lending program in what are now very prosperous countries in Western Europe. In this excerpted article, which appeared in the March 1954 issue of “International Bank Notes,” Bank staff member Victor Umbricht gives us a snapshot of Austria during the period when it was a borrower from the Bank.

One forgets quickly how serious the Austrian situation was before [U. S. Secretary of State] General George C. Marshall made his historic speech at Harvard University in 1947, where he first publicly articulated the idea of what became known as the Marshall Plan, and before Marshall aid came to the rescue of Austria. Indeed, in the immediate post-war period the country was near chaos. The economy was severely disrupted, there was great political unrest, the currency was sliding down like an avalanche, and all this was accompanied by a black market, the dimensions of which were unheard of before. The country was not able to raise sufficient food for her 7 million inhabitants and was thus an easy prey for any subversive influence. History will tell that it was Austria's good fortune and her salvation that at this time General Marshall's ideas became reality and resulted in generous aid to Austria through various assistance programs. Her people were thus saved from starvation.

And today [1954]? what the foreign visitor meets is a people who have found almost complete happiness again, with a prosperous economy and, what is just as important, with their old Viennese humor, and still that touch of their traditional Schlamperi-taking nothing very seriously, not even the difficulties of their own existence.

Franz M. Oppenheimer
Hector Prud'homme
Our mission, which visited Austria towards the end of 1953, consisted of Messrs. Prud'homme, Spottswood, Oppenheimer and myself, not to forget the charming Mrs. Prud'homme, and Mrs. Boesch, the secretary from our Paris Office. We were all struck by the friendly and hospitable reception accorded us by the Austrians-as if they had been waiting for old friends.

The purpose of our mission was to have a look at the financial and technical aspects of a power project in Carinthia, called Reisseck-Kreuzeck, for which Austria had requested Bank assistance. Some members of the mission went up there to inspect the project on a frosty weekend in late November. Altitude: about 7500 feet. The project has a particular significance on the ground that its power production will be shared with Italy. If Reisseck-Kreuzeck contributes to overcome the psychological obstacles to a coordinated European power economy, it will have been a very rewarding venture.

Typical of difficult construction at high altitudes is the Reisseck-Kreuzeck Project in the Alps of southern Austria. This artificial reservoir near the mountain peaks is pumped full in the summer, using low-cost summer power, to ensure a flow of water through the turbines in the winter months.
Our daily work afforded us an opportunity to meet people from all walks of life, in Vienna as well as in the country. Vienna is still the glorious city of the golden days when Pilsner beer was alcohol. The tower of St. Stephen's cathedral, though still surrounded by unavoidable construction scaffoldings, continues to be the landmark of the city. The State Opera is there too, but badly damaged by the war and out of action. The shops are plentiful and not too expensive, contrary to the hotels, which, at least in Vienna, charge excessive prices. This, in any case, was the mission's experience. Some of the better hotels are, incidentally, still requisitioned by the four occupying powers.

We did not see very much of the occupation troops. The Allied soldier has practically disappeared, and the Russians are very seldom met on the street. We saw only very few of them in the Soviet-occupied zone, where we found a superb ingenuity of the people to give vent to their views. They possess the great art of shutting their mouths before they are told to, but they express their feelings in a meaningful way. For example, we saw an advertisement (in English!) in one of the store windows announcing “dresses sold for ridiculous figures.”

The occupation burden still weighs heavily upon the Austrians. They are longing for a State Treasury and for complete independence, and use every opportunity to make this understandable feeling known, particularly in the theaters. If a passage in a play refers to Austria's historic mission and independence or if an old Austrian battle flag goes up, there is immediate stormy applause.

One of the greatest treasures that Austria offers to the visitor who has a few hours to devote to less earthly things is her music. Viennese performances of operas and operettas cannot be matched anywhere. Tickets are cheap and the houses always full. Surprising is the enormous attendance by young people. Don't miss any performance when you go there. It is about the best standard in music and Viennese glamour that can be found. When we went to see the Zigeunerbaron we heard two rather loquacious ladies in front of us saying “here comes my favorite song, let's not even talk now.”

Our working relationship with the Austrians was very satisfactory and frank. Two things struck me in this respect. First, the decent bureaucracy, which may still be one of the remnants of the old Habsburgian days. The typical Austrian bureaucrat, the Ministerialrat, impressed all of us by his serious and competent handling of all matters, and by his courtesy towards the public. Secondly, many appointments in administrative offices, and in other divisions, are not primarily made according to aptitude but according to the political requirement of proportionate representation between the Christian Democrats (Catholics) and the Social Democrats.

The country has made striking political and economic progress since 1945, in spite of the moral and material strain of the occupation. Their two main political parties, the Christian Democrats and the Social Democrats, have achieved a little miracle in that their coalition since the end of the war has survived many strains and divergences of opinion. But above all, the people have been able, with their resolute patience, to withstand all attempts of infiltration of foreign creeds, despite their exposed geographical location. This is as much the merit of their political wisdom and moderation as of their democratic integrity.

For current information on Reisseck-Kreuzeck go here

An interesting view of post-war Vienna may be seen in the classic movie “The Third Man.” See:

Without records there is no history. Courtesy of ISG's World Bank Group Archives.

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