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

740.00119 Council/6–1546: Telegram

The Acting Secretary of State to the Secretary of State, at Paris

secret

Washington, June 15, 1946—4 p.m.

2875. Secdel 274. For the Secretary from the Acting Secretary. Hungarian PriMin and party left Washington June 15, After visits to TVA and New York they will depart for London June 18 or 19th.

In conversations with PriMin we took position that questions of frontiers and Hungarian minorities in Rumania and Czechoslovakia are outside our competence in your absence and that you are fully cognizant of these matters.

In response to other matters raised we delivered PriMin a memorandum in substance as follows:

Begin Summary of Memorandum.

1. Hungarian Gold. In view urgent request Hungarian Govt for return Hungarian gold now in custody US forces which gold desired for stabilization Hungarian monetary system and economy US Govt prepared to proceed with return of this gold to Hungary upon receipt assurances from Hungarian Govt that it will undertake to return any part this gold subsequently established to have been looted.²⁶

2. Restitution Hungarian Displaced Property. American Commanders Germany and Austria are being instructed to proceed with restitution to Hungarian Govt of identifiable displaced property removed under duress from Hungary subsequent to Jan 20, 1945. Commanders will be instructed to expedite return of such property and to advise without delay of their schedules for the return of rolling stock and other transportation equipment. US Govt will also urgently consider possibility issuing new directives authorizing return similar Hungarian property removed under like conditions between Oct 15, 1944 and Jan 20, 1945. US Mil authorities have been directed to defer restitution of commercial inland water craft on the Danube pending outcome discussions currently taking place between them and Soviet authorities in Vienna with view to establishing principle of freedom of movement of vessels on Danube under flags they now fly without danger of seizure.

3. Aviation. US Govt has endeavored for some time to obtain agreement with Hungarian Govt to permit operation of air transport services by designated US carriers into through and away from Hungary such rights to be exercised during period preceding conclusion peace treaty when US Govt would be prepared to discuss with Hungarian Govt bilateral air transport agreement. US Govt recognizes implementation such agreement may require conclusion arrangements between US Govt and military forces occupying Hungary but does not consider necessity for such arrangements precludes Hungary from making an agreement at this time. Although US Govt does not make conclusion such an agreement a condition to return of displaced Hungarian property and gold it nevertheless attaches great importance to conclusion such an agreement.

4. Surplus Property. US Govt is prepared to consider sympathetically request of Hungarian Govt for increase in existing credit to Hungary for purchase of surplus property. However before pursuing matter further it is necessary to determine whether in view recently concluded bulk sales surplus property in Europe there would in fact be sufficient surplus still available to utilize an increase in credit. Appropriate authorities US Govt are proceeding promptly with necessary investigation and will communicate further with Hungarian Govt when results become known.²⁷

5. Information Concerning Economic Conditions in Hungary. US Govt has repeatedly asked Hungarian Govt to furnish comprehensive information concerning all aspects Hungarian economic conditions and commercial relations. Hungarian Govt states regulations of Allied Control Commission prevent its compliance with US request for such information. US Govt wishes emphasize again that access to information this character would facilitate consideration by US Govt of Hungarian request for substance. End Summary Memorandum.

PriMin was most appreciative of action outlined above and in commenting on memorandum stated that he regards our position on aviation and information entirely reasonable. He added that he will again raise aviation matter with cabinet upon his return Hungary and he requested that we approach ACC once more in connection information. We stated we would do so.

Sent to Paris rptd to Budapest, London, and Moscow.

Acheson

26. Telegram 3247, Secdel 401, July 3, to Paris, stated that assurances had been received from the Hungarian Government that any gold proved to have been looted would be returned and that the Department had therefore requested the Joint Chiefs of Staff to issue instructions to military authorities in Germany to proceed immediately with the return of the gold to Hungary (740.00119 Council/7–346). Telegram 685, July 12, to Budapest, stated that the Department’s willingness to release the gold was based in part on informal Hungarian assurances that the gold was needed and would be used for economic stabilization and would not be used for reparations (864.515/7–1246).
27. In a note of June 28, 1946, to the Hungarian Minister, the Acting Secretary of State informed the Hungarian Government that the United States had agreed to extend an additional credit line of $5 million for the purchase of surplus army property located overseas (864.24/5–2246). Minister Schoenfeld informed Prime Minister Nagy to the same effect on July 1, as reported in telegram 1224, July 1, 1946 (871.24/7–146). The formal credit agreement was contained in a letter of July 24, 1946, from Foreign Liquidation Commissioner McCabe to Minister Szegedy-Maszák who approved the agreement on August 9, 1946; see footnote 85, p. 287.