Executive Secretariat Files
Briefing Book Paper
Principal Hungarian Problems
Summary
The long-range interest of the United States in the maintenance of peace and stability in central Europe may be involved in the issues now arising in connection with terms of armistice for Hungary, with the control of Hungary during the armistice period, and with the territorial settlement. The two most pressing problems are (1) the share which the United States will have in the work of the Allied Control Commission, and (2) the payment of reparation by Hungary.
It is possible that Soviet and American policy may not be in harmony if the Soviet Union uses its position as the power in actual control of the execution of the armistice to intervene in Hungarian domestic affairs, to dominate Hungary, or to pursue a severe policy on the reparation question which would cripple Hungarian economy and thus delay the economic recovery of Europe and the restoration of [Page 243] normal economie relationships based on equal treatment for all nations.
While American and British interests are more or less the same in these questions, we prefer an independent approach to the Russians and should seek agreement on solutions and procedures which take account of the interests of all these and of the other United Nations. It would be desirable to secure the agreement of the British and Soviet Governments to the following principles:
- 1.
- Participation of the American and British Governments in the execution of the armistice to the maximum degree consistent with leaving to the Soviet High Command decisions connected with the conduct of military operations; after Germany’s surrender all three Governments should have equal representation and responsibility;
- 2.
- An Allied economic policy toward Hungary which will reconcile legitimate claims of Allied nations to reparation with the general interest in promoting the rapid economic recovery of Europe;
- 3.
- The desirability of reaching a settlement of the Hungarian-Rumanian frontier dispute and of encouraging an eventual settlement between Hungary and Czechoslovakia and perhaps between Hungary and Yugoslavia, by friendly mutual negotiation, which would take into account the Hungarian ethnic claims.
Principal Hungarian Problems
Long-Range American Interest in Hungary
The long-range interest of the United States in Hungary centers in our desire to see established peaceful and stable relationships among European nations. The United States has an interest in the achievement of solutions of Hungary’s boundary disputes and its political and economic problems which will promote orderly progress and peace with neighboring states. We believe this interest would be served by a territorial settlement which would rectify the frontier with Rumania in favor of Hungary on ethnic grounds. While Hungary must of course renounce the territorial gains made at the expense of Czechoslovakia and Yugoslavia with German help, the United States would favor, for example, an eventual negotiated settlement which would transfer to Hungary some of the predominantly Hungarian-populated districts of southern Slovakia. Economically, the United States has an interest in maintaining equal treatment and opportunity in Hungary for all nations. The largest single private American interest in Hungary is the petroleum company “Maort”, owned by the Standard Oil Company of New Jersey; the fields in its concession have excellent prospects for future development.
At present Hungary, as an enemy state which has been associated with Germany’s aggressions since 1938 and the last satellite to desert the Axis, has no valid claim to leniency on the part of the Allies. During the period of the armistice Hungary must be subjected to [Page 244] Allied control and must be required to make some reparation for war damages. It is not in the interest of the United States, however, to see Hungary deprived of its independence or of any of its pre-1938 territories or saddled with economic obligations which would cripple its economy and thus delay general European economic recovery.
American Policy on Immediate Questions concerning Hungary
The “Provisional National Government of Hungary” formed on December 23, 1944, at Debrecen in the Soviet-occupied portion of Hungary, has asked the Allies for an armistice and has declared war on Germany. This body appears to represent the significant pro-Allied political forces in Hungary today. While the United States has not yet recognized it as a provisional government, it is probable that it will be so recognized and that the armistice terms, upon which the three principal Allies are now reaching agreement, will be presented to it.
The United States has agreed that the general pattern of the Rumanian armistice terms should be applied in the case of Hungary, with two important exceptions:
- 1.
- In the matter of the Allied Control Commission for Hungary, this Government is attempting to secure Soviet agreement to a clear definition of the rights and powers which the American representatives on the Commission will have. Lack of such an understanding at the start in the cases of Rumania and Bulgaria has made the position of our representatives on the Control Commissions for those two countries difficult. This Government desires to avoid a state of affairs whereby it becomes a signatory to the armistice and by accepting representation on an “Allied” Control Commission assumes some responsibility for its execution, but is in fact without influence and may not even be consulted on the decisions taken by the Soviet authorities acting in the name of the Allied Control Commission. We believe that, at the very least, our representatives should be consulted on such decisions. The United States has proposed also that after the termination of hostilities against Germany the three principal Allies should have equal participation in the operation of the Control Commission.
- 2.
- The second important point is the reparation settlement with Hungary. In the negotiations on armistice terms, the United States Government is attempting, so far without success, to secure Soviet agreement to American and British participation, through membership on a reparation section of the Control Commission, in the actual working out and supervision of the reparation deliveries and payments by Hungary to members of the United Nations.
Consideration is being given to the advisability of standing firm on the questions of the Control Commission and of reparation to the point of signing the armistice with a formal reservation on one or both of them.
[Page 245]American Policy in the Armistice Period
While the United States would not, of course, take the position of supporting Hungary against the Soviet Union, it is possible that American and Soviet policies toward Hungary during the armistice period may not be in harmony, especially if there is an absence of agreement on some of the important armistice terms or if the position gained by the Soviet Union by virtue of its military campaign and under the armistice agreement is used to dominate Hungary or to strip it of a great part of its resources.
The United States Government recognizes that the Soviet Union’s interest in Hungary is more direct than ours. We have had no objection to the Soviet Government’s taking the lead in the negotiations for the armistice and in the control of Hungary in the armistice period until the surrender of Germany. We do not, however, consider that the Soviet Union has any special privileged or dominant position in Hungary. In the armistice period we expect to have a civilian mission in Hungary headed by Mr. H. F. Arthur Schoenfeld, who will have the personal rank of Minister and will maintain informal relations with the Hungarian Government. Soviet agreement to this representation seems assured.
The interests of the United States would be served by the conclusion of peace with Hungary at the earliest practicable date. Such a step would put an end to many of the powers of control which under the armistice will be exercised by the Soviet Union, and by opening the way to the resumption of normal diplomatic relations between the United States and Hungary would give the United States Government a better opportunity to protect American interests in that country.
It is also in our interest that free elections be held and that Hungary be left to manage its own internal affairs as soon as possible.
Note: There is attached a copy of the armistice terms for Hungary now under discussion at Moscow. Substantial agreement has been reached on all articles except Article 12 and Article 18. Those two articles appear in this text in the form suggested by the Soviet Government.1