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

661.6431/12–1945: Telegram

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

Budapest, December 19, 1945—1 p.m.
[Received December 20—2:05 a.m.]

1126. PriMin Tildy called today explaining he did so as courtesy for first time since taking office in that capacity. He expressed grave concern about present economic situation of Hungary and alluded to currency devaluation plan announced today along lines reported mytel 1109, December 17.⁵

Tildy also informed me (mytel 1108, December 17⁶) that political committee of National Assembly is expected tomorrow to recommend ratification of Soviet Hungarian economic collaboration agreement by adopting formula approved by Voroshilov taking express cognizance of Hungarian Government’s declaration that economic and commercial agreements with third countries will not be affected by agreement. Further Tildy said Hungarian Government would convey notes to British and ourselves this week in answer to our representations as to most favored nation rights under our respective commercial treaties with Hungary and would give us assurance that such rights will continue in force. Tildy volunteered statement that formula chosen in recommending ratification is in accord with American Government objective as made known at Moscow and here of tripartite cooperation in dealing with Hungarian economic situation. He added he hoped ratification of agreement would give Hungary breathing spell.

I took opportunity of Tildy’s visit to intimate to him (urtel 823, December 13) that as previously stated to Hungarian representatives, we consider it essential to approach broad aspects of economic problem in Hungary on tripartite basis. I added for his personal information only that we had proposed this matter be considered by ACC with view to prompt creation of commission within ACC to examine economic and financial position. To his inquiry whether ACC would take such action I answered our proposal had been made so recently that I was not yet informed of decision. I may add for Department’s information that Col. Townsend informed us today he has made proposal as instructed but does not expect meeting of ACC scheduled for tomorrow to take place in view of Gen. Key’s illness and since recent practice has been to dispense with formal meetings of ACC. In any case it would have been unliklely that this matter could be included in agenda for tomorrow’s scheduled meeting.

Sent Department, repeated to Moscow as 140 and to London as No. 74.

Schoenfeld

5. Not printed; it reported that a plan to accomplish devaluation of currency by affixing stamps to bank notes would be announced on December 19 and completed by December 31 (864.515/12–1745). Budapest’s telegram 1129, December 20, 1945, 5 p.m., reported that the Hungarian Government’s currency stamping program had further undermined public confidence in the Hungarian currency and had caused an acute shortage of currency on the eve of Christmas (864.515/12–2045).
6. Not printed; it reported that the Political Committee of the Hungarian National Assembly was scheduled to meet on December 20 to consider ratification of the Soviet-Hungarian economic collaboration agreement (661.6431/12–1745).