FOREIGN RELATIONS, 1946, VOLUME VI



Hungary is willing to receive its minorities now living in Czecho-
slovakia provided that these minorities are transferred together with
the territories they inhabit. Should this not take place, the Hun-
garian Government insists on the safeguarding of minority rights
for Hungarians living in Czechoslovakia. As for Rumania, the Hun-
garian Government proposes that a new frontier be drawn in such
a manner as to leave an equal number of minorities on either side of
the frontier.
  The aim of the Hungarian Government is to prevent anarchy and
chaos such as the factors outlined above are very likely to bring about
unless checked in time. The majority party represented in the Hun-
garian Government placed great emphasis on the preservation of the
bourgeois mode of living and of pro-Western middle-class Hungary.
In order to achieve these aims the Hungarian Government would like
to enlist the good offices of the United States, which by exerting its
political, moral and economic influence, is perhaps alone in a position
today to prevent a revolutionary upheaval in the Hungarian state
and economy. The Hungarian Government respectfully suggests
that economic aid to Hungary could take three forms:
  (1) The restitution of displaced goods now located in the American
zones of occupation in Germany and Austria. These displaced goods
consist of the gold reserve of the Hungarian National Bank amounting
to $32,000,000, rolling stock of the Hungarian state railroads, and ships
belonging to Hungarian steamship companies,
  (2) An increase in the amount of present UNRRA assistance to
Hungary,
  (3) The granting of a loan through the Export-Import Bank.
Should the restitution of displaced goods prove to be impossible for
the time being, the Hungarian Government would be grateful if these
displaced goods could be made use of as collateral in connection with
a loan to be extended to Hungary. If in connection with the proposed
Export-Import Bank loan, economic considerations should not war-
rant the extension of such a loan to Hungary, would the United States
Government be influenced by political considerations in this matter?
  (4) An increase to $20,000,000 of the present $10,000,000 surplus
property purchase credit.
Part II
  Mr. Hickerson began his reply by stating that if Hungary today
is occupied by the Red Army it is due to the joint war effort, in lwhich
the United States and the USSR as allies brought about the common
victory. The United States spent four years in developing this war
effort and suffered one million casualties before victory could be
achieved. The destruction of German industry, for example, was to
a large extent due to the employmen t of planes manufactured in the
United States and flown by American personnel. In reply to His



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