1. Equal representation in fact on ACC for all of agreed signatory
governments.
  2. Stipulation that no directives be issued to Hungarian Govt or any
other official action taken in name of ACC without concurrence of
American and British representatives.
  3. Full right of entry into, travel in and departure from Hungary
without restrictions for all American personnel of ACC, American
Legation and other govt agencies.

  Sent Moscow, repeated Secretary of State 386, London 10, Sofia 6
and Bucharest 16.
                                                      SCHOENFELD

864.51/2-2746: Telegram
   The Minister in Hungary (Schoenfeld) to the Secretary of State

SECRET                       BUDAPEST, February 27,1946-11 a. m.
PRIORITY                                    [Received 2: 14 p. m.]
  405. ReDeptel 192, February 21.28 Press and public reaction to 10
million dollar US loan has been enthusiastic but political effect has
in measure been tempered by Communist whispering campaign mini-
mizing importance.
  Focal point in Communist-inspired rumors is that Hungary was
forced to renounce all interest in Hungarian displaced property in
Austria and Germany in exchange for loan. Whispers add that
money was only to be spent for worn-out American military equip-
ment and that exchange of Hungarian national assets in Austria for
outdated American trucks is bad bargain.
  Notwithstanding this campaign, predominant opinion remains that
loan marks renewed American interest in Hungarian affairs. Average
Hungarian is inclined to assume American loan will be followed by
stronger political backing since "Americans would certainly not lend
money to a country and then permit it to go Communist".
  Press has devoted much space to story and its comment, confined
largely to non-Communist press, has been jubilant. Vilag 29 noted
effect of loan in combating inflation while other papers pointed out
loan exceeds three times total value in dollars of Hungarian note
circulation. Certain papers have recorded belief loan points to under-
standing between US and USSR as to Hungarian future while all
  28 Not printed; it stated that a decision had been made to grant Hungary
a
credit of $10 million payable over 30 years at 2% percent interest, for the
purchase of surplus property (800.24/12-445).
  29 Newspaper of the Citizens' Democratic Party.



777-752-69-18



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HUNGARY