Foreign Relations of the United States, 1946, Eastern Europe, The Soviet Union, Volume VI

740.00119 Council/4–1146: Telegram

The Acting Secretary of State to the American Delegation at the Council of Foreign Ministers in Paris

secret
us urgent

Washington, April 26, 1946—5 p.m.

1907. Following is in reply inquiries contained Delsec 370 Apr 11⁹⁰ re Hungarian and Soviet economic matters:

1. Report on Hungarian economic and financial situation prepared by Finance Minister Gordon under date Dec 3, 1945, concluded with following appeal for tripartite assistance in planning rehabilitation Hungarian economy:

“The only way that we can see out of our serious financial and economic difficulties is a plan of reconstruction, to be carried out with the assistance of the Allied Powers, the objective of which would be to raise production to a substantially higher level than at present, and restore equilibrium in the country’s economic and financial affairs.

Since however we cannot work out a plan of reconstruction until it is known what support we may count upon from the Allied Powers, there is an urgent necessity that the Allied Powers should send a commission which with the cooperation of the Hungarian Government would examine the economic and financial situation of the country and the methods by which assistance could be given. We should expect from the work of the commission a statement of what measures and what foreign assistance is necessary, in the present economic state of the country, with its present burdens and requirements, in order that the country may recover economically and be able to meet the triple obligation arising from reparations, other obligations under the Armistice Agreement and pre-war foreign debts.”

Gordon report, copy of which is included among documents taken by Secretary, was presented to Soviet Rep ACC but he refused to accept or consider it. Subsequently, copies were made available unofficially to US and UK Reps in Budapest. After Soviet rejection report, Finance Minister informed US Mission that it was unlikely PriMin would submit formal request for tripartite aid because of fear such action would offend Soviets. However, Hungarian authorities have repeatedly discussed matter informally with US Mission. Also, Hungarian Minister here has urged that US Govt support consideration such action in ACC, and in Feb Economic Adviser Hungarian Legation furnished Dept additional copy of Gordon report.

2. Latest development re US proposal on Hungarian economic situation is reported in Moscow’s 1302 Apr 23 rptd Paris 102.

3. Info on status Soviet loan proposal has been forwarded in separate telegram.⁹¹

Sent Paris rptd London and Budapest.

Acheson

90. Not printed; it asked for information as to the status of the American proposals on the Hungarian economic situation (740.00119 Council/4–1146).
91. For documentation regarding the consideration by the United States of granting loans and credits to the Soviet Union, see pp. 818 ff.