FOREIGN RELATIONS, 19 46, VOLUME VI



740.00119 Control (Hungary)/4-3046: Telegram
  The Minieter in Hungary (Schoenfeld) to the Secretary of State

RESTRICTED                         BUDAPEST, April 30, 1946-6 p. m.
US URGENT                                 [Received May 2-7 a. m.]
  808. Moscow's 1302, April 23 to Dept repeated to Paris for Secre-
tary as 102. Comments received from General Key on last two para-
graphs of Vyshinski's reply of April 21 to Kennan's letter of March
2 follow.92
  "The chairman of the ACC has in general terms informed the US
representative on the ACC of the fulfillment of reparation obligations
but has not informed me of the economic or financial conditions of
Hungary.
  On 28 December, 1945, at a formal meeting of the ACC, I raised the
question as to the plans the Hungarian Govt was making to improve
the general economic conditions and requested a prompt report of
economic conditions, with a view to having the situation studied by
a committee of the ACC. The chairman received the proposal, stating
he would ask the Hungarian Govt to furnish the desired information.
  No formal meeting of the ACC was held until April 23, 1946, but
the question was placed on the agenda of informal special meetings, on
8 January, 1946,26 January, 1946 and 6 March, 1946',93 and also on the
formal meeting of 23 April, 1946. No satisfactory reply was made to
any of these questions on the agenda and at the last meeting we were
informed that all of the economic plans had been printed in the news-
papers.
  As a general comment, I would like to say that the chairman-
Soviet-, ACC for Hungary, has not systematically informed the US
and British representatives concerning Hungarian economic and fi-
nancial difficulties."
  Repeated Moscow No. 187, and Paris No. 113 for Secretary.

                                                         SCHOENKW

  92 In telegram 810, April 30, 1946, from Budapest, Minister Schoenfeld
set
forth detailed information recently obtained confidentially from Hungarian
offi-
cials regarding Soviet exploitation of and interference in the Hungarian
economy.
Schoenfeld stated that "Vyshinski's reply to Kennan's letter re Hungarian
economic situation scarcely contains a single truth. This could be readily
demonstrated from information compiled by Hungarian public officials, if
they
had the courage to make information officially available in face of strict
Soviet
prohibitions in supplying economic data to representatives of foreign govern-
ments." (864.60/4-3046)
  " Telegram 477, March 7, 1946, from Budapest, reported that at the
informal
meeting with American and British representatives on March 6, Voroshilov
told
General Key that in view of the American credit of 10 million dollars to
Hungary,
the United States could not be seriously concerned about repayment and con-
sequently could not consider the Hungarian economic situation excessively
grave.
At this meeting, Voroshilov definitely declined to appoint an economic investiga-
tive committee of the Allied Control Commission as recommended by the Ameri-
can and British representatives. (864.50/3-746)



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