740.00119 Control (Hungary)/12–3144: Telegram
The Ambassador in the Soviet Union (Harriman) to the Secretary of State
[Received January 1, 1945—4 a.m.]
5079. I feel that the most significant point in the aide-mémoire which Molotov handed me on the question of Hungarian reparations, transmitted in Embassy’s 5075 December 30, 8 p.m., is the refusal to allow the British and ourselves to participate in the handling of reparation payments, though indicating willingness to consider consultation with Czechoslovakia and Yugoslavia.
[Page 952]I must confess that I have some sympathy for the Soviet view that 50 million dollars a year of goods as reparation payments from Hungary over 6-year period is not in fact excessive, and I also feel that there is real value to us in having the claims of the Soviet Union for reparations fixed at this time as otherwise we might have serious difficulties in the future should their appetite grow. On the other hand it seems clear that the manner in which reparations are completed, the character of goods demanded, and the value placed on them, are all matters which would vitally affect the recovery and stability of the economy of Hungary and Central Europe. Whoever controls reparation deliveries could practically control Hungarian economy and exercise an important economic influence in other directions. The Soviet Government’s position that only these countries receiving reparations should be involved in the way in which reparations are collected does not seem reasonable. The British and we have an equal interest in the economic stability of Europe even though neither of us are demanding reparations from Hungary.
It seems to me that in this connection the status of our representatives on the Control Commission is also a matter of prime importance. There seems little to be gained by our participating in a control commission unless we have a clear cut agreement that our representatives can have a participation commensurate with the responsibilities we take under the armistice. After consulting with my British colleague, I intend at the next meeting to present to Molotov proposals for statutes for the Control Commission which will include the points outlined by the Department in its telegram 2908, December 29, 8 p.m. I will not press discussion on the Soviet aide-mémoire in reparations until I ascertain the Soviet attitude regarding the Control Commission statutes. We will then know more clearly what the Soviet attitude is on our participation in the responsibilities for the carrying out of the armistice, in general as well as in respect to the reparation payments. If their position, in our view, is unreasonable it seems to me that we have a major issue to face.
My present instructions indicate that I should inform the Soviets that we disassociate ourselves from the reparation clause. I am afraid that this will not be effective in changing the Soviet position and I have therefore been puzzling over what additional pressure we can exert. It has occurred to me that I might be instructed to call to the Soviet Government’s attention the enormous aid given under Lend-Lease, both direct military and to the Russian people, and explain without commitment that, if the Soviet Government is unwilling to cooperate with us in economic matters such as in the case of Hungary, this cannot help but affect the final Lend-Lease settlement adversely to the Soviet interest.
[Page 953]By our participation in the armistices with Rumania and Bulgaria we assumed substantial responsibilities and we now find ourselves blocked by the Soviets from any real participation in their administration. I presume that we do not wish to put ourselves in the same position again and would not wish to participate in another armistice over such conditions. It would be most helpful if I could get your general guidance at this stage of the negotiations, even though it might not be possible to give specific instructions until you know all the questions confronting us.