The Representative in
Hungary (Schoenfeld) to the Acting Secretary of
296. Rákosi has recently returned from Moscow apparently with new instructions and we learn from Foreign Office he obtained diplomatic passport there July 14 possibly to join Soviet delegation at Big Three Meeting.
Signs indicate new instructions include increasing attacks on all bourgeois and non labor elements and attempts at disrupting the organization of their parties by accentuating existing cleavages. My 271, July 10.2 Moscow is apparently disturbed by growing anti-semitism and fact Communist Party in Hungary is being too closely associated with Jews due to fact four chief leaders are Jewish as are large majority of Communist controlled political police. There is now reported to be party order that Communists of Jewish origin are not to be encouraged to take govt positions or put themselves in forefront of party activity.
Communist Party has withdrawn pressure for early election since time is now needed to counteract widespread anti-Russian feeling. Interim period is to be utilized to prevent consolidation of opposition. Drive for new membership is based on pardon for previous activities of labor masses in support former Nazi regimes. Reference A–145, July 10,2 item 8.
It seems probable that local rumors of our interest in electoral decree which was reported imminent last month led to suspension of intended promulgation. We surmise that intensified effort on part of extreme leftist parties to purge administration of non sympathizers with their policies and replace them with their own men is alternative to proposed early election, results of which now appear more dubious to them. ReDeptel  July 13.3 It is hardly open to question that Hungarian authorities will be increasingly unable to guarantee free election with increased leftist control of provisional govt unless ACC procedure as revised following agreement on pending proposals leads to tripartite intervention by ACC in matter of electoral law and in supervising election. Key is well aware supervision would impose very heavy burden and doubtless would require increased [Page 694]American personnel in his mission but I believe we must keep in mind eventual need of such supervision.
Repeated to Frankfort as 4 for Matthews.