864.00/7–2447: Telegram
The Ambassador in the United Kingdom (Douglas) to the Secretary of State
4048. Warner, Assistant Under Secretary Foreign Office, yesterday said to us that the economic weapon seems to be an important weapon remaining to UK and US in influencing course of developments in Hungary and other Soviet-dominated states. Foreign Office view is [Page 349] that any economic help we give countries should depend on their future behavior.
Warner then stated that attitudes of US and UK to Hungarian political parties deserve close attention. He declared that UK had been trying for some time to use influence of British Labor Party on Hungarian Social Democrats to keep latter from going “all out” for the Communists. Labor Party, he said, would continue this policy. “It may fail but it is worth trying.” (See Budapest’s 1200, July 18 to Department.)
He felt that Social Democrats are further to left than other parties and therefore closer to Communists. This makes them more vulnerable to Communist infiltration and pressure.
Warner continued that situation re Smallholders is so confused that it is impossible to sort out the pieces.
He suggested that it might be advisable, if Department agreed, to instruct Chapin and Helm to discuss our attitudes towards Hungarian political parties and give their considered opinions of best course to follow. He added that US and UK, while agreeing on major considerations and policy, might wish to take different lines, which however should always be coordinated. For instance, it might be decided that continued pressure on Social Democrats by British Labor Party might be valuable as one line of attack, whereas US might pursue different course and concentrate on Smallholders or another party.
In Foreign Office view, recommendations from Helm and Chapin should include publicity in press and on the radio.
Please let us know Department’s views for communication to Foreign Office.
Repeated Budapest 73.