Foreign Relations of the United States, Diplomatic Papers, 1945, Europe, Volume IV

740.00119 EW/9–1445: Telegram

The Representative in Hungary (Schoenfeld) to the Secretary of State

Budapest, September 14, 1945—6 p.m.
[Received September 16—5:45 p.m.]

584. Foreign Minister told me today that opinion prevails in some political circles here that US Government may be willing to lend Hungarian Government money to meet deficit in Hungarian reparations to USSR which he said was estimated this year at 40% of value called for under Soviet Hungarian reparations agreement. Saying that I was speaking unofficially as this was first I had heard of any such proposal I asked the Minister to disabuse any Hungarian politician of the idea that the US Government was prepared to lend Hungary funds with which to pay reparations to an Ally of the US.⁷⁰

Turning then to recently negotiated Soviet Hungarian economic agreement⁷¹ Gyöngyösi said there seemed to be considerable misunderstanding as to Soviet Government’s intentions with reference to this economic agreement and that he understood Soviet Government merely desired to facilitate exploitation of German owned industries conceded to USSR as German reparations under Potsdam agreement. I said that I had understood Soviet Hungarian economic agreement was susceptible of interpretation as giving USSR right to monopolize Hungarian industry generally and that if it was Soviet Government’s intention only to exploit industries coming into its control under Potsdam agreement it should not be difficult to make this clear in any Soviet Hungarian economic agreement.⁷²

Sent Department repeated to Moscow as 69 and London as 17.

Schoenfeld

70. Telegram 471, October 1, 1945, to Budapest, reads as follows: “Statement by you to Foreign Minister is correct presentation U. S. policy on this matter (paragraph 7 urtel 584 Sept 14). U.S. has no intention financing Hungarian reparations to Soviet.” (740.00119 EW/9–1445)
71. An agreement between the Soviet Union and Hungary concerning economic collaboration was signed in Moscow on August 27, 1945. For a description of the agreement, see Department of State Bulletin, September 1, 1946, p. 394.
72. Telegram 576, September 13, from Budapest, reported that the Mission in Budapest had been informed that Soviet Political Representative Pushkin had told the head of the Hungarian National Bank that Hungary should look to the Soviet Union for all economic wants and need not entertain any ideas of western economic ties (661.6431/9–1345).