864.00/1–2747: Telegram

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

secret   urgent

115. 1. When opportunity has offered since last March (Deptel 69, January 24) it has been often stated to Hungarian Prime Minister and others that we view with apprehension continued negation of mandate of voters in November 1945 election. Latest such occasion was January 23 when Prime Minister and Foreign Minister spoke as reported in mytel 111, January 24.

2. It has been clear for long time that if non-Marxists among Hungarian leaders do not find within themselves resources of character and political will to enable them to oppose successfully encroachment of Communist monopoly it is also because they are obsessed by their identification of that minority with Soviet power which they consider irresistible. Mere expression of our concern is therefore unlikely to induce lasting growth of those resources. During latest phase of political crisis my intimations that forthright public statement by Prime Minister on current issues would be salutary in rallying popular support have thus far had no result. At same time I do not doubt that speed of Communist advance in past year has been retarded by our action at various times which has stiffened resistance of Smallholders by making them aware of our constant interest in democratic development in Hungary.

3. It is highly desirable in my opinion that we should give economic aid to Hungary. If such aid is contemplated on restricted scale only, it should be definitely related to Hungarian undertaking to extend proper protection to existing interests of American nationals in this country. If more extensive aid is under consideration, political effect thereof would be increased by our offer if it in connection with general rehabilitation plan. Minister Finance1 tells me in confidence, he recently submitted to Prime Minister economic plan which he did not describe in detail but which he said had been held up by Communist objections.

4. I see no reason why we should not soon take initiative and announce publicly that we are asking Hungarian Government how best American economic aid can contribute to Hungarian rehabilitation and offering our facilities for that purpose. Such offer should have stabilizing political effect in that Communists would at least be given pause in any scheme they may have for taking over between date of signing peace treaty and departure of occupation forces. This suggests [Page 265] best time for proposed announcement will probably be date treaty is signed.

5. Issuance of political statement by Department at this time and without consulting Prime Minister might indeed complicate Nagy’s position since statement would have to take some cognizance of alleged conspiracy against Hungarian Republic thereby affording Communists pretext foreclosing our intervention into endorsement of their political offensive against Smallholders. On other hand if we consult Nagy in advance about proposed statement this would become known promptly and he would be exposed to Communist charges of complicity in alleged anti-coalition intrigue with possibility of strong reaction from local representatives who still claim to be disinterested.

6. Procedure by Dept along lines indicated in paragraphs 3 and 4 above seems to me to offer most advantage. It would put emphasis on practical economic aid which Hungary knows US will alone be in position to render. At same time it would avoid direct American involvement in political field and would deprive local Communists and their Soviet masters of any excuse for employing the Soviets practical counter-measures which continue to be available to them in that field.

Schoenfeld
  1. Miklós (Nicholas) Nyárádi, Hungarian Minister of Finance.