Foreign Relations of the United States, 1947, Eastern Europe; The Soviet Union, Volume IV

864.00/6–247

The Hungarian Minister (Szegedy-Maszák) to the Secretary of State ¹

Washington, June 2, 1947.

Mr. Secretary: The evolution in post-war Hungary has reached its decisive stage. After a short period of relative calm, following the interparty truce of March 12 and the two Notes of the American Government, the occupying Power and its Communist agents have resumed their aggression against the economic status of the country and the remnants of the duly elected Government. As a consequence, the economic and political future of Hungary as an independent State is at stake.

The main aims of the economic offensive are:

1) To extend the Russian grip on the capital assets of the country through an arbitrary and fallacious interpretation of the decisions of the Potsdam Conference on German assets in Hungary.

2) To achieve the economic enslavement of Hungary and her complete integration into the Russian economic system by imposing a new “trade agreement” which would force Hungary to direct practically all her exports towards Russia. If carried out, this would mean the establishment of a Russian industrial colony in Hungary on the traditional pattern of exploitation: In exchange for very expensive raw materials delivered by Russia, Hungary will be forced to deliver cheap manufactured goods. The working of this system is illustrated by the fact that in the current fiscal year 1946/47 the trade with Russia has to be subsidized by the Hungarian taxpayer by a sum amounting to 16 million dollars. The burdens of the unfair and arbitrary price level for goods delivered as reparation are well known; they are increased to an unbearable extent by the costs of occupation. Roughly 40%of the total expenditures of the Hungarian budget are being spent for reparations, costs of occupation and subsidies for the Russo-Hungarian trade. In such circumstances it is only obvious that after an unprecedented inflation and untold sacrifices to stabilize their currency, the Hungarian people are again facing the danger of inflation.

3) To achieve an exclusive Communist control of the Hungarian Economy by enforcing a program of nationalization which goes much further than justified. The nationalization of additional industries and banking institutions could not be motivated by economic or social considerations, but only by the ruthless quest for power of the aggressive Communist minority. Nationalization does not aim at the reduction of prices or improvement of working conditions, but only and exclusively at the conquest of new key positions from which to complete domination over this reluctant and fiercely individualistic people.

The political plight of the only country in the exclusive Russian zone of occupation which lived up to its obligations under the Yalta Agreement, was clearly exposed in the communications of March 6 and March 17, addressed by American Brigadier General George H. Weems to the Soviet Acting Chairman of the Allied Control Commission for Hungary.

The new developments, however, have been precipitated by an even more direct interference of the Soviet Union in the domestic affairs of Hungary. They were preceded by sharp discussions on the problem of nationalization and on issues of foreign policy, but the decisive stage was reached only when the Russians, in an official move, accused Prime Minister Nagy, Foreign Minister Gyöngyösi,² and President of the National Assembly, Rev. Béla Varga,³ with complicity in the so called conspiracy. The basis of this charge was an alleged deposition by Béla Kovács, former secretary general of the Smallholders Party, arrested by the Soviet authorities on February 26.

I am not in a position to say that Béla Kovács did not sign this deposition. As a former prisoner of the German Gestapo and inmate of the Dachau Concentration Camp I do know however, that people under pressure can be induced to sign almost anything, especially if they are denied the basic human right to an eventual fair and open trial. And the Soviet authorities have denied Béla Kovács even the chance of being tried by the left-wing dominated Hungarian People’s Court.

Hungary is therefore at present on the verge of being engulfed by Russian and Communist expansion. In spite of the silent but stubborn struggle to establish and maintain free democratic institutions, Hungary is facing subjugation by large occupation army, by a permanent drain on an empoverished economy, and by a small minority, which is not only in control of the police, but has armed its own followers as well.

A victim of totalitarian aggression, Hungary is a test case whether a defeated small country, having shown its choice in free and unfettered elections, is to be allowed to have free institutions, representative government, and freedom from political oppression,—or has to live again in the humiliating and abject status of a satellite of the powerful totalitarian neighbor.

The present legal status of Hungary is established by the Armistice Agreement. The United States is a signatory to this Agreement and a member of the Allied Control Commission, the supreme authority in Hungary. The United States is furthermore signatory to the Yalta Agreement, which laid the foundations for the political and economic reconstruction of liberated Europe. Finally, the United States is a permanent member of the Security Council of the United Nations.

The continued and violent interference of the Soviet Union which led to the recent developments in Hungary, is an aggression against the Hungarian People as represented by the duly elected majority in the National Assembly and an unequivocal violation of all the pledges contained in the Armistice Agreement, the Yalta Agreement and the Charter of the United Nations. It would seem therefore that this manifest breach of freely entered agreements is of the concern of the United States.

The People of Hungary greeted with enthusiasm and gratitude the generous principles enounced by the President of the United States in his speech on March 12, 1947.⁴ Living under the oppressive abuses of the occupation Army and under the terror of the armed Communist minority, Hungary is not a free country and the Hungarian Government is not a free agent any longer. Hungary is therefore not in a position to protest and to resist the oppression by overwhelming and ruthless force.

Appointed by the duly elected Hungarian Government to represent Hungary in the United States and enjoying the freedom from fear in this free country on behalf of the avowed majority of the Hungarian people I have the honor to lodge a solemn protest against the totalitarian aggression of which my country has fallen victim. Mindful of the generous economic and political assistance the Government and the People of the United States have extended to Hungary, I have complete reliance that the Government of the United States will assume its responsibilities under the agreements and the declaration of principles referred to above, and will take the appropriate action towards the restoration of the independence and democracy in Hungary.

I have [etc.]

Aladár Szegedy-Maszák

1. The Hungarian Minister called at the Department of State on June 3 to deliver this note as well as a third person note also dated June 2, which stated that he did not consider the current Hungarian Government a free agent and that he would refuse to accept or carry out any orders or instructions of that government. In a memorandum to Under Secretary of State Acheson, dated June 4, not printed, Acting Chief of the Division of Southern European Affairs Barbour reported in part as follows on Szegedy-Maszák’s presentation of this second note:

   “In presenting this note to the Department the Minister stated orally that he has been ordered by the new Hungarian Government to return to Budapest for consultation but that he does not propose to do so. He added that since he does not consider the present Government a lawfully constituted Government of Hungary he does not intend to submit his resignation to that Government but rather will merely withdraw from the Legation, together with most of the members of his staff, and will turn over the Legation’s business to Counselor [Paul] Marik informally. He inquired whether he could count on the benevolence of the United States to permit him to remain in this country with his staff members and expressed the hope that he could continue to maintain contact with the Department.” (864.00/6–247)

   On June 4, Szegedy-Maszák and three members of his diplomatic staff—Financial Counselor Alexander Szász, Press Counselor Stephen Borsody, and Francis Nagy, Jr.—issued a statement to the press declaring their unwillingness to recognize the legality of the new Hungarian Government; for the text, see the New York Times, June 5, 1947.

2. Gyöngyösi was not included in the Hungarian Cabinet formed by Dinnyés on June 1.
3. Varga fled from Hungary on June 2.
4. The reference here is presumably to the message of the President to the Congress setting forth recommendations regarding assistance to Greece and Turkey; for the text, see Department of State Bulletin, March 23, 1947, p. 534.