740.00119 (Potsdam)/5–2446

No. 287
Briefing Book Paper
top secret

Hungary: Background Information

summary

1. Execution of the Armistice

The provisional Hungarian Government signed an armistice with the three principal Allied Governments on January 20, 1945.1 Enforcement of the terms, with which Hungary has thus far complied more or less satisfactorily, rests with the Allied Control Commission established by the armistice. Executory and administrative functions of the Commission have been in the hands of the Soviet military authorities, who have made decisions without reference to the views of the American and British representatives. It is hoped that provision will now be made for the active participation of the latter in the work of the Commission, especially since military considerations, after the surrender of Germany, are no longer paramount.

2. The Economic Situation

Hungary’s economic life was badly disrupted by military operations and by Nazi looting. Soviet requisitioning on a large scale and heavy demands under the reparation clause of the armistice are making the situation even more difficult, so that Hungary will be able to produce this year only a fraction of its normal production. Probably Hungary will have no surplus of agricultural or industrial products for export to other European countries or the United States.

[Page 367]

3. The Political Situation

The present “Provisional National Government” is a coalition regime representing all important anti-Nazi parties. Real political power is in the hands of the party organizations and leaders, the strongest of which are the Communists although their popular support in terms of numbers may not be great. The Soviet Government has not attempted to install a purely leftist regime as in Rumania. We believe nevertheless that the three powers should reach agreement on the application in Hungary of the Yalta Declaration,2 so that the forthcoming elections may be truly free.

Hungary: Background Information

1. Long-range American Interest

The principal long-range American interest in Hungary is that that country should once more become a peaceful member of the community of nations and should not, either through its relationships with larger powers or through the policies of its own rulers, become a menace to peace. It is our belief that this aim is most likely of attainment if Hungary is an independent state with a government of its own choosing, cooperating closely with neighboring states, and if solutions of its territorial and economic problems are found which represent a maximum contribution to the stability of the region.

2. Execution of the Armistice

Hungary, as an enemy state which was associated with Germany’s aggressions since 19383 and the last satellite to desert Germany, has no valid claim to leniency on the part of the Allies. In accordance with the armistice terms which it signed on January 20, 1945, which were roughly the same as those for Rumania, Hungary was to participate in the war against Germany, but by the time Germany surrendered Hungary had made no significant military contribution to the Allied victory.

The armistice agreement, to which all three principal Allies were parties, established an Allied Control Commission which has operated under the direction of its Soviet chairman, the American and British members having more or less the status of observers. The latter were not allowed to exercise all the rights vouchsafed to them by the agreed statutes of the Control Commission4 during the period preceding Germany’s surrender. For the “second period” of the [Page 368]armistice, following Germany’s surrender, we have proposed, in accordance with a reservation made at the time the armistice was signed, that the Commission be made genuinely tripartite.5 The Soviet Government has not replied to this proposal.

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In general it can be said that the provisional Hungarian Government has complied with the armistice terms to the best of its ability. It has enacted a series of decrees based on the various clauses of the agreement and has put them into effect. The ultimate authority in the country is of course the Allied (Soviet) Control Commission, which has officers in local centers throughout Hungary to ensure compliance with the armistice obligations.

3. The Economic Situation

Hungary’s economic life was badly disrupted by military operations and by the removal of supplies, equipment and key personnel by the Germans. For the next year at least there will be no surplus for export, and Hungary will be unable to satisfy its own needs in many products. The situation has been aggravated by heavy Soviet requisitioning, since for some time there have been from one to two million Soviet troops in Hungary, and by the removal of capital equipment and commodities to the Soviet Union as war booty or on reparation account under the armistice. A six-year agreement on reparation deliveries was signed on June 15, 1945.6 American representatives have had no part in these arrangements. However, at the time the armistice terms were negotiated and the total sum of Hungary’s reparation obligation to the U. S. S. R. was fixed, we formally reserved the right to reopen the question if in the administration of the reparation clause American interests should be unwarrantably prejudiced.7

4. The Political Situation

The successive governments in Budapest during 1944 having been either unwilling or unable to surrender to the Allies, in December the Russians took the step of sponsoring the establishment of a “Provisional National Government” in the Soviet-occupied eastern part of Hungary. This government accepted the armistice terms presented by the three Allied Governments and has since established its administration throughout Hungary. It is a coalition government headed by a conservative general8 and includes representatives of the five principal parties of the center and the left. There is also a provisional assembly in which the Communists have the strongest representation. Real political power resides not in the cabinet or the assembly but in [Page 370]the party organizations and leaders, of whom the Communists, encouraged by the presence of the Red Army, are the strongest.

There have been some instances of direct Soviet intervention in Hungarian internal affairs, but there has been no attempt, as in Rumania, to substitute a purely leftist regime for the present coalition government. We believe nevertheless that the principal Allied Governments should come to an agreement on the supervision of elections in Hungary, so that the transition from the present provisional regime to a permanent government may take place in accordance with the principles of the Crimea Declaration on Liberated Europe.

  1. Executive Agreement Series No. 456; 59 Stat. (2) 1321.
  2. On Liberated Europe. See vol. ii, document No. 1417, section v .
  3. By the Vienna Arbitration Award of November 2, 1938, which was engineered by Germany and Italy, Hungary received some 5,000 square miles of southern Slovakia. Hungary joined the Anti-Comintern Pact on February 24, 1939.
  4. Not printed.
  5. The proposal referred to was sent by Grew to Harriman in telegram No. 1168 of May 28 (repeated to the American Representative in Hungary as telegram No. 57 of the same date), as follows (file No. 740.00119 E. W./5–2845):

    “During the discussions in Moscow on armistice terms for Hungary full agreement was not reached on the wording of Article 18 concerning the Allied Control Commission. In accepting the text of that Article as it appeared in the terms signed on January 20, the American Ambassador in Moscow reserved this Government’s position in identical letters addressed to the Soviet and British Governments. These letters stated the opinion of the United States Government that Article 18 should have included an additional provision as follows: ‘Upon the conclusion of hostilities against Germany and until the conclusion of peace with Hungary the ACC will supervise the execution of the Armistice according to instructions of the Governments of the U. S. A., the U. S. S. R., and U. K.’, and that since such a clause was not included the United States Government might consider it necessary to confer at a later date with the Soviet and British Governments regarding the detailed manner in which Article 18 should be implemented during the period following the cessation of hostilities against Germany.

    “In view of the end of hostilities with Germany, the United States Government considers it appropriate to reopen at this time discussion among the three Allied Governments on the subject of the organization and functions of the ACC for Hungary in this second period.

    “The United States Government presents the following proposals as a basis for discussion among the three Governments:

    • “(1) The ACC, the functions of which should remain limited to the enforcement of the terms of armistice, should operate henceforward under standing instructions of the three Allied Governments, whose principal representatives on the ACC would have equal status, although the Soviet representative would be Chairman.
    • “(2) ACC decisions should have the concurrence of all three principal representatives, who would refer to their respective Governments for instructions on important questions of policy.
    • “(3) All three Allied Governments should have the right to be represented on the sections and subcommittees of the ACC, but need not be represented in equal numbers.

    “In submitting the foregoing proposals we are desirous of reaching an agreement which will eliminate all misunderstanding respecting the rights to which the American Representative on the ACC is entitled. Although the ACC statutes agreed upon in Moscow on January 20 expressly provided that during the first period the U. S. and U. K. representatives should have the right to receive oral and written information from the Soviet officials of the Commission on any matter connected with the fulfillment of the Armistice Agreement, to receive copies of all communications, reports and other documents which might interest the U. S. and U. K. Governments, and to be informed of policy directions prior to their issuance in the name of the ACC to the Hungarian authorities, these provisions, as General Key informed Marshal Voroshilov on April 30, have not been carried out. There has moreover been but one full meeting of the ACC since its establishment.

    “The U. S. Government has been aware that in this first period military operations were conducted in or near Hungarian territory, and that direct military responsibility in Hungary lay with the Soviet High Command. Since military considerations were recognized as overriding, this Government was willing temporarily to subordinate its own interests and responsibilities in Hungary to the common interest and responsibility of the successful prosecution of Allied military operations. This Government has been none the less concerned over the failure to accord to the American representative the rights and prerogatives guaranteed by the ACC statutes. These grounds for complaint will of course disappear if the ACC operates henceforth as a tripartite body.

    “In as much as the surrender of Germany has now greatly reduced the importance of the factor of military responsibility, the U. S. Government is especially desirous of reaching with the Soviet and British Governments as soon as possible full agreement on the organization and functions of the ACC in the second period along the lines suggested in the present communication.”

    Harriman reported on June 2 (telegram No, 1876, file No. 740.00119 Control (Hungary)/6–245) that this proposal had been transmitted to the Soviet Government on June 1.

  6. At Budapest. Not printed.
  7. The reservation referred to is not printed.
  8. Colonel General Béla Miklós.