Foreign Relations of the United States, 1952–1954, Eastern Europe; Soviet Union; Eastern Mediterranean, Volume VIII

764.00/7–853: Telegram

No. 37
The Chargé in Hungary (Thompson) to the Department of State

secret
priority

Budapest, July 8, 1953—5 p.m.

22. For course of events Hungary with certain comments pertinent to Deptel 6 July 6 see Legtels 1123 June 30, 1 July 1, 10 July 3, 11 July 4, 16 July 5, 20 July 7.¹ First hand observation Budapest limited areas countryside shows no signs discontent taking overt and bolder form as yet. Rumors originating Vienna of disturbances Csepel week July 13 not confirmed. No signs unusual security measures. However German riots came more than week after announcement concessions. Believe much will depend on speed and extent implementation promises made Nagy speech. In this connection, check markets this morning showed large supply sharply lowered prices vegetables, fruit (normal seasonal development) and generous supply cold storage port, butter. (Frozen meat stock believed small.) Trip to Austrian frontier this afternoon and officer returning by car from Belgrade tomorrow may produce further information.

Recent developments Hungary believed to have special significance in that:

(1) Preceded by drastic party reorganization at top level which presumably reflects opposition to new policy and will probably require extension purge to lower levels. Party members at all levels must be confused and puzzled by this sudden Moscow sponsored shift to Titoism. Purely local factors involved Politburo purge were (1) reduction Jewish domination (2) long expected promotion younger leaders: Hegedus, Vhidas, Foldvari, Veg, Acs, Szalai would seem be potential new team (3) elimination violently anti-Tito group from army leadership.

(2) If implemented, new policy represents check in process of Sovietization of more than temporary nature. Abandonment of priority for heavy industry and cutting back of current and presumably second five year plan (some of whose goals already announced), permission to dissolve collective farms, and encouragement of now practically non-existent small private industry and retail trade are definite steps backward with effects measured in years rather than months.

(3) Cutting back of heavy industry and increased local consumption for other commodities means less war materials, steel, railroad equipment, ships, wheat, meat, wine, etc. for Soviet Union.

(4) On other hand if new policy succeeds in raising morale of population and mitigating hatred for regime and Soviet Union, dangerous situation will be eliminated and long term prospects for economic and military support Soviet Union improved.

(5) Propaganda value in West of elimination worst abuses and violations human rights will be considerable.

Thompson

1. Telegram 6 is printed as telegram 4 to Praha, Document 34. Telegram 11 from Budapest is not printed. (764.13/7–453) Telegram 1123 from Budapest described a party reorganization which took place at the Central Committee Plenum of June 27–28. (764.00/6–3053) Telegram 1 from Budapest conjectured briefly on the significance of the reorganization. (764.00/7–153) Telegram 10 reported that the parliamentary session of July 3 failed to throw any light on the reasons for the governmental reorganization (764.00/7–353) Telegram 16 discussed the meaning of Nagy’s speech of July 4. (511.6441/7–553) Telegram 20 reported a cautious attitude in Hungary concerning Nagy’s July 4 speech. (764.00/7–753)