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

661.6431/10–545: Telegram

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

Budapest, October 5, 1945—1 p.m.
[Received 5:45 p.m.]

714. President National Assembly and of National Council which must ratify international agreements Zsedenyi called today and said Voroshilov had recently urged Prime Minister to insist that Cabinet discuss and approve signature of Soviet Hungarian economic collaboration agreement initialled at Moscow last summer. Miklos had taken position that Provisional National Government is not authorized to approve this agreement binding Hungarian economic status for indefinite future and that this power must be reserved to government which will follow national election now only few weeks in future. Miklos accordingly declined to place matter on Cabinet agenda but Leftist members of Cabinet under Soviet pressure are insisting that matter be brought before next Cabinet meeting. Although non-Marxist members of Cabinet especially Smallholders representatives are firmly resolved to withdraw from Government if economic agreement is signed Zsedenyi desired to know from me whether Government’s continued refusal to conclude agreement will have support of US and Britain. He said he had put the same question to British political representative yesterday and latter had undertaken to submit matter to his Government.

I told Zsedenyi that I was hopeful that so far as lies in power of Hungarian Government it would do its best always to facilitate harmonious cooperation among the Allies not only in political matters but also in economic questions such as this. Therefore while I would gladly submit his inquiry to you I hoped the issue could be formulated in a manner not involving request for support from US against the Soviet Union. Zsedenyi said he fully appreciated this standpoint and that a plan already existed to advise Soviet Government with reference to economic collaboration agreement that Hungarians considered this far reaching matter one which required cooperation not only between Hungary and Soviet Union but also with the US and Britain and that Hungarian Government was desirous of broadening basis of any economic agreement accordingly.

Zsedenyi said there was now fear that Soviet Government would seek to force conclusion of pending economic agreement by threatening not only to insist upon full compliance with existing reparations agreement but to impose additional sanctions if the economic collaboration agreement were not approved. He pointed out that readiness of Soviet Government announced today to grant moratorium on deliveries of food supplied under reparations agreement which had obviously been done in contemplation of effect on next Sunday’s⁹⁴ municipal election here would be withdrawn if full compliance with reparations agreement were required. In these circumstances momentary situation was very difficult and Hungarian leaders opposed to accepting collaboration agreement would not wish to risk the national hardship which would ensue from such sanctions on part of Soviet Government unless they felt that something permanent would be gained for national interest by so doing. In this respect situation was somewhat analogous to that facing Hungary at time of Nazi penetration when similar decision by Hungarian leaders for short term advantage had tragic long range results. Their decision on present issue would largely depend on how much support they could count on from US in their continued opposition to economic collaboration agreement.

If Department feels it is in position to express itself on this issue I should appreciate telegraphic reply. It is obvious that Soviet effort to secure this agreement from provisional government in advance of Hungarian national election is designed to create another fait accompli as in case reparations agreement last June without reference to our interest under armistice agreement and without reference to an elected Hungarian Government.

Sent Department. Repeated to London as Nr 3 for Dunn⁹⁵ to Moscow as Nr 86.

Schoenfeld

94. October 7.
95. James C. Dunn, Assistant Secretary for European, Far Eastern, Near Eastern and African Affairs, remained in London as Deputy to the Secretary of State on the Council of Foreign Ministers, following the conclusion of the first session of the Council on October 2, and the Secretary’s departure for Washington.