Foreign Relations of the United States, 1955–1957, Eastern Europe, Volume XXV

9. Telegram From the Legation in Hungary to the Department of State¹

Budapest, March 17, 1955—4 p.m.

434. Broad outlines of developments in Hungary past few months—apparently in fairly close step with those elsewhere in Soviet empire and at times visible in advance—now more clearly discernible. Basic elements in trend seem to be: Shift so far conclusively evident only in propaganda towards heavy and war industry; slight actual upward revision certain industry goals with increasing emphasis on over-all efficiency and (apparently) on machine industry; increasing discrimination favoring Socialist sector agriculture; and more repressive measures against population. These first perceived in December, distinct after first of year and now confirmed by latest Central Committee resolution. Seems evident shift brought about by doctrinaire, Muscovite and anti-western elements, with Rakosi at present leading this camp. Practically certain that Rakosi element has firm support of group now dominant in Kremlin.

In assessing cause of above, obvious that situation here closely connected with that in USSR. Less clear, however, is exact relationship between two; that is, whether situation in USSR prime cause of changes here, or whether former merely such as to allow developments in Hungary to mature. On one hand growing international tension, with threat German rearmament major component, presumably important and perhaps dominant factor in determining recent course events in Soviet Union and so indirectly of those here. At same time, recent output strongly suggests that ideological struggle over basic Communist dogma itself, involving role of Party in Communist society, rights of individual within framework of Party’s role and extent individual’s and nation’s independence relative to system (latter including growth liberal and nationalist tendencies with undertones of Titoism) represents powerful underlying local factor. Furthermore, relatively meager results achieved under new course in Hungary—in turn largely function of inherent weakness in Communist system—doubtless played significant role. In any event regardless of how such factors weighted, some combination of these influences evidently allowed present Hungarian leaders to gain upper hand over advocates of new course and international détente in continuing struggle for power. Struggle itself not new, signs being apparent in June 1953² and October 1954³ but antagonism permitted to flare into open coincident with major policy reorientation; while latest events suggest that Rakosi may be taking personal revenge on Nagy for latter’s anti-Rakosi statements October 20⁴ and perhaps for his entire role in new course.

Looking ahead, we anticipate general tightening up in all fields. Party discipline will doubtless be strengthened, class warfare pushed more openly, increased force employed bring backsliders and recalcitrants into line and action initiated put brake on “liberalism” and freewheeling criticism which particularly apparent in recent months. Effects these policies will probably include increased popular antagonism toward regime, due to increased police repression and downward pressure on living standards. In addition, individuals (probably great majority) within party and government who had sincerely believed in or hoped for new course as long-range policy rather than tactical move, as well as individuals (also great majority) within regime who underneath inclined put national Hungarian interests above Moscow dictates, should feel growing antagonism to ruling faction not only from conviction but also from considerations personal security. In economic field, efforts modify reorientation toward increased output consumer goods, although only partially affected, should produce further dislocations; and major effect will probably be felt in countryside as regime put screws on private peasants. As already reported, we see little reason believe policies which failed once can achieve greater success on second run. Limiting factors moreover much greater today than when this policy first began to falter and new course emerged.

Should above developments take place, and if meanwhile Paris Agreements ratified⁵ and West German rearmament begun, seems not improbable that situation will arise which in sense reverse of present: i.e., those making policy for Hungary during this period, both in Moscow and Budapest, will face failure on both international and domestic fronts. Then particularly should Western powers show readiness to negotiate outstanding differences, on reasonable basis but from position greater strength and without yielding on essentials, ground should be much more favorable for recapture influence by moderates and nationalists. In addition, independent of relations between USSR and West, failure Rakosi group attain satisfactory economic objectives and popular response on second try would probably threaten this group’s prominence. (This excellent point for media build-up.) Impossible now judge how poor conditions would have to become before Soviets might feel obliged take remedial action, but we believe downhill slide towards this point will probably continue and may even accelerate. Undoubtedly this factor present in Rakosi’s mind and will affect his actions.

Above would suggest period greater strain and increasing exacerbation in relation with Hungarian authorities for a time, with chances for improvement dependent primarily on developments in larger spheres east-west relations but with reasonably good outlook for rather sharp swing-back later. Implications for US policy might include: Period relative inaction vis-à-vis Hungarian regime on official level in immediate future; avoiding giving or receiving provocation except in so far as necessary react against clear-cut harassment, when our stand should be firm and our action retaliatory on same plane when means available; maintaining foothold for use later; focusing media attacks more on specific doctrinaire element in regime and anti-nationalist tendencies of this leadership; and attempting devise programs and actions which will reach and benefit Hungarian people directly, such as food, medical aid offers, giving away information on advanced agricultural methods, etc. Even if refused by regime, such actions would be known to Hungarian public and hit responsive cord. Then when and if grip of doctrinaire Muscovites weakens, renewed pressure for concessions, accompanied by increasing gestures goodwill toward Hungarian people as appropriate, could probably have some success in affecting Hungarian policy orientation.

Barnes

1. Source: Department of State, Central Files, 764.00/3–1755. Secret. Also pouched to Moscow.
2. Reference is to the events of late June 1953 and the power struggle between Rákosi and Nagy culminating in the June 28 meeting of the Hungarian Workers Party at which Rákosi admitted previous mistakes and resigned the premiership (although not the first secretaryship of the party) in favor of Nagy. See telegram 22 from Budapest, July 8; Foreign Relations, 1952–1954, vol. VIII, p. 72.
3. Reference is to the October 1–3, 1954, meetings of the Central Committee of the Hungarian Workers Party at which the Rákosi–Nagy conflict over one-man rule and direction of economic policy seemed to swing in Nagy’s favor.
4. In an October 20, 1954, article in Szadbad Nep, Nagy publicly attacked Rákosi and one-man rule. The article is summarized in telegram 188 from Budapest, October 20, 1954. (Department of State, Central Files, 964.61/10–2054)
5. Reference is to the protocols on the termination of the occupation regime in the Federal Republic of Germany, the tripartite agreement on the exercise of retained rights in Germany, the convention on the presence of foreign forces in the Federal Republic of Germany (all signed at Paris on October 23, 1954, and entered into force on May 6, 1955), the treaty on the Western European Union, and the agreement on the accession of West Germany to NATO.