Wartime American Plans for a New Hungary

Document 1

Sercet PWC-151, CAC-142b

May 1, 1944

TREATMENT OF ENEMY STATES: HUNGARY

Although Hungary preserved the forms of a parliamentary govern- ment under the Horthy régime, its government since 1920 has been semi-authoritarian in character, with the Party of Hungarian Life in firm control. The fundamental political struggles in the country during the postwar era centered about the successful efforts of the Magyar landholding groups to retain control of the state by preventing genuine measures of electoral and land reform. In foreign policy their basic idea was to obtain revision of the Treaty of Trianon in the ultimate interest of the restoration of the historic lands of the Crown of St. Stephen.

Hungary became associated with Fascist Italy as early as 1927, and became, together with Italy and Germany, a member of the Anti-Com- munist Pact in 1939. As an associate of the Axis, Hungary shared in the partition of Czechoslovakia in 1938-1939, received Northern Transylvania in 1940 as a beneficiary of the German-Italian ultimatum to Rumania, and seized Yugoslav territory in 1941, following the German attack on Yugoslavia. The Hungarian Government declared war on the Soviet Union on June 27, 1941, a few days after the German invasion of the U.S.S.R., and declared war on the United States and Great Britain in December 1941.

About 250,000 Hungarian troops have fought on the Eastern front against the Soviet Union, and, in general, Hungarian resources have been placed at the disposal of Germany. On December 11, 1943, the United States Government, warned the Hungarian Government which had recklessly carried on the war against the United Nations, that it would have to share the responsibility for and the consequences of the defeat of Nazi Germany. After the occupation of Hungary by Nazi Germany in March 1944 and the establishment of a puppet government, with Admiral Horthy remaining as Regent, the United States Govern- ment advised the Hungarian people that only by firm resistance to the Nazi invaders could Hungary hope "to regain the respect and friendship of free nations and demonstrate its right to independence."

In the analysis which follows, a clear distinction is made between the objectives of the United States with respect to Hungary during the period immediately following surrender and the long-range objectives. During the first period the United Nations may be able to dea1 with a friendly government in Hungary which is encouraging resistance to the Germans. On the other hand, it may be necessary to occupy Hungary and to set up strict military government. In this case, Hungary should nevertheless have an opportunity to demonstrate a capacity for genuine self-government and orderly domestic progress and a disposition toward friendly cooperation with its neighbors. During the second period the Hungarian people should have a genuine opportunity freely to choose their own form of government, to develop their economic resources and improve their standard of living, and to participate in general political and economic arrangements.

I. PERMANENT AMERICAN INTERESTS

A. Frontiers

By the Treaty of Trianon (1920) Hungary was reduced from a state with an area of more than 125,000 square miles and a population of approximately 20,000,000 to a land-locked state with an area of 35,000 square miles and a population of about 8,000,000. About 3,000,000 Magyars lived beyond the new frontiers of Hungary, in Czechoslovakia, Rumania and Yugoslavia. Against these losses Hungarians never ceased to complain. Nevertheless, it should be borne in mind that the popula- tion of pre-1918 Hungary was only about fifty percent Magyar in ethnic composition, and that Trianon Hungary was essentially an ethnically homogeneous state.

In the dismemberment of Czechoslovakia Hungary received by virtue of the Vienna Award (November 2, 1938), a predominantly Magyar- populated southeastern strip of Slovakia and a part of Subcarpathian Ruthenia. In March 1939 Hungary occupied by force the rest of Subcarpathian Ruthenia and an additional strip of Eastern Slovakia. As a result of these various annexations from Czechoslovakia Hungary added 9,261 square miles of territory with a population of approximately 1,728,000. In 1940 Hungary acquired Northern Transylvania from Rumania, with an area of about 16,642 square miles and a population of approximately 2,633,000. In 1941 Hungary occupied the Yugoslav Final Summaries and Recommendations 271

districts of Prekomurje, Medjumurje, Baranja and Baka, with an area of 4,520 square miles and a population of about 1,000,000.

Since 1941 Hungary has had an area of 66,400 square miles and a population of about 14,733,000, abeut 77.5 percent Magyar by nationali- ty according to the Hungarian census, and including more than 1,000,000 Rumanians, about 550,000 Ruthenians,269,000 Slovaks and 370,000 Serbs and Croats.

The United States is not committed to any specific boundaries in this area, although it has denounced territorial changes effected by force. It would look with favor upon territorial adjustments which wou1d contribute to the development of more friendly relations among the peoples of Central and Southeastern Europe and which would thereby contribute to the peace and stability of Europe as a whole. Hungary's claims for frontier adjustment, in so far as they are based on ethnic considerations, should receive sympathetic consideration, although care should be taken to avoid the appearance of rewarding Hungary for acts of aggression against its neighbors.

1. The Slovak-Hungarian Frontier.--In the case of the Slovak- Hungarian frontier, the United States should favor the restoration, in principle, of the 1937 frontiers, although it might use its influence to encourage Czechoslovakia and Hungary to work out such adjustments as would foster better relations between them and would take into account the desires of the local population.

One such solution, which was favored by the American Delegation at the Paris Peace Conference, would be to cede to Hungary the Grosse Schuett and a strip of the Little Hungarian Plain, involving an area of about 1,400 square miles, with a population (in 1930) of approximately 219,000 Magyars and 40,000 Slovaks. The territory is primarily agricultural in character; its loss would not injure the communications of Czechoslovakia or materially affect its defenses, Although the Czechoslovak Government has repeatedly demanded the integral restoration of the pre-Munich frontiers, in principle, it has indicated a willingness to make some adjustments with a "democratic Hungary" provided a "common ethnical and political denominator" could be found.

A more drastic solution would involve the transfer to Hungary of an additional 2,740 square miles, with a population (in 1930) of 310,000 Magyars and 59,000 Slovaks; this solution would offer the possibility of a generally equitable exchange of population between Hungary and Czechoslovakia. It is doubtful, nevertheless, that the Czechoslovak Government would be willing to consider the larger cession to Hungary. The United States should support cession of the Grosse Schuett and the Little Hungarian Plain because of its probable feasibility, without rejecting the latter solution, if Czechoslovakia should be willing to make such a territorial adjustment as a part of a broader settlement of the issues in dispute between it and Hungary.

Restoration ofthe 1937 Slovak-Hungarian frontier without modifica- tion would leave about 500,000 Magyars within the Czechoslovak Republic. Although restoration would satisfy the Czechoslovak demand for full legal recognition of Czechoslovakia's territorial integrity, as well as the desire of the United States to avoid penalizing victims of aggression, it would again make Czechoslovak-Hungarian cooperation difficult, if not impossible. On the other hand, retention of the 1939 frontier should be rejected not only because it would mean rewarding Hungary for its acts of aggression against Czechoslovakia but because that frontier cannot be justified on ethnic grounds.

2. Subcarpathian Ruthenia.--The essential solution of the problem of Subcarpathian Ruthenia is to treat the region as a whole, since any major adjustment on ethnic lines in behalf of Hungary would threaten the economic viability of the region. Czechoslovakia, Hungary and the Soviet Union are all concerned with the disposition of Subcarpathian Ruthenia. Incorporation of Ruthenia into the Soviet Union would cut Ruthenia off from its normal economic connections to the south and west and would result in extending Soviet rule across the Carpathian barrier to the northern edge of the Danubian plain. Although the Ruthenians are ethnically related to the Ukrainians, the Soviet Union apparently favors the restoration of Ruthenia to Czechoslovakia. The Czechoslovak claim to Ruthenia is strengthened by the rapid progress made under Czech rule in modernizing and developing the backward region, while the oppressive policy of Hungary prior to 1918 and since 1939 alienated the sympathies of the great mass of Ruthenians.

Although there is still a possibility that Subcarpathian Ruthenia might be annexed by the Soviet Union, in the American view the interest of European stability would best be served by its restoration to Czechoslovakia. In principle, the 1937 frontiers should be restored, although the United States might well support any compromise worked out in an amicable manner by Czechoslovakia and Hungary. Any compromise solution which would aim to leave predominantly Magyar districts in Hungary should take into consideration railway communica- tions between Subcarpathian Ruthenia and the rest of Czechoslovakia.

However, if the Soviet Union should annex Subcarpathian Ruthenia, the United States should, in the interests of the peace and stability of the Danubian region, favor the establishment of an ethnic line which Final Summaries and Recommendations 273

would leave the compact body of Magyars, in the valley of the Upper Tisza River, to Hungary. This would be possible because Subcarpathian Ruthenia would then be a part of the Soviet economy, and its communi- cations with the west would be less important.

3. The Hungarian-Rumanian Frontier.--The United States has not recognized the acquisition of Northern Transylvania by Hungary and holds the view that the problem of Transylvania, territory in dispute between two enemy states, should be considered at the time of the general peace settlement. Transylvania contains a slight absolute majority of Rumanians and has a large bloc (400,000)of Hungarians (the Szeklers) in the extreme southeastern corner, remote from the bulk of Magyar population. No simple or satisfactory territorial division of its western boundary along ethnic lines would result in transferring to Hungary a small strip from north of Arad to Szatmár; to include the Szekler region within Hungary, as was done in 1940, is impossible without transferring an even larger bloc of mainly Rumanian-inhabited territory to Magyar rule. The possibility that an autonomous territory of Transylvania might participate in a Balkan or Danubian union of some sort should not be excluded from consideration, although the idea of autonomy has little support among either Hungarians or Rumanians within Transylvania or outside it, and the idea of federation in this area has been discouraged by the Soviet Union.

4. The Hungarian-Yugoslav Frontier.--The territories in dispute between Hungary and Yugoslavia, part of which were acquired by Hungary in 1941, have a total population of approximately 1,500,000, about 40 percent of which is Slavic, 26 percent Magyar and 21 percent German. The United States should favor return to the 1940 frontier between Hungary and Yugoslavia, without prejudice to any compromise reached between Hungary and Yugoslavia. While a considerable part of the Magyar minority in the Voivodina is in the northern districts adjacent to Hungary, those districts are also settled by a substantial number of Slavs. In general, the ethnic fragmentation is so great that in only eleven of the twenty-four administrative districts into which this region is divided, does any one of the national groups have a majority.

5. The Austro-Hungarian Frontier.--In 1922, after a plebiscite, Austria acquired the Burgenland, previously a part of Hungary. The Burgenland covers an area of about 1,532 square miles with a popula- tion (1934) of about 299,247, of whom approximately 80 percent (241,300) are German Austrians, 14 percent (40,500) are Croats and ercent (10,400) are Magyars. Hungary has not asserted its claim to the Burgenland vigorouslyt and there is no compelling reason why this territorial question should be reopened.

B. Internal Political and Economic Conditions within Hungary

Despite the rapid expansion of industry since 1924, Hungary has remained a predominantly agricultural country, with control of the greater part of the land concentrated in the hands of the nobility and gentry. The basic political struggles of Hungary since 1918 have been concerned with the successful efforts of the landholding groups to retain control and with agitation for revision of the Treaty of Trianon. Hungary is the only country in the Danube basin where the big estates were not broken up after 1918. The persistence of an antiquated political and economic system within Hungary prevented the develop- ment of a democratic order and contributed to the disturbance of peace and security in Central and Southeastern Europe.

The United States is concerned with the elimination of aggressive and war-minded elements in Hungary and with those political and economic developments which affect the strengthening of peace and of orderly progress in Central and Southeastern Europe. For this reason the United States should encourage the establishment in Hungary of a government representing the desires of the Hungarian people and capable of providing greater equality of opportunity and better living standards for all its people. Electoral reform and land reform are requisites to the achievement of a democratic Hungary. Land reform, which will probably be the primary demand of the Hungarian people at the close of the war, may be effected by the division of large estates either by revolutionary means or in planned and gradual manner. Planned resettlement would require a considerable period of time, but it would improve the standard of living and the national wealth of Hungary if units of sufficient size to insure efficient production could be established and if the new peasant owners were assisted with capital and with educational and managerial advice.

A thorough-going land reform would open the way for peaceful development of social and political democracy and would eliminate the control of a reactionary minority which has in the past monopolized political power at home and threatened the peaceful development of the Danubian region through its cooperation with an aggressive Germany. C. The Foreign Policy of Hungary

Hungary became closely associated with Fascist Italy as early as 1927, when Mussolini openly championed the revisionist aims of Hungarian foreign policy. In 1934 Hungary, Austria and Italy signed the Rome Protocols establishing close political and economic ties and forming a bloc against the Little Entente. In 1939 Hungary joined with Germany, Italy and Japan in the so-called Anti-Comintern Pact, and logically took the side of the Axis Powers during the present war.

It is possible that democratic reform within Hungary and some adjustment of Hungary's frontiers might orient Hungary's foreign policy in other directions and enable it to fulfill a constructive role in a peaceful world. In line with its general policy, the United States should favor the participation of Hungary in such general international arrangements as may be established after the war, as soon as Hungary gives convincing proof that it has embraced loyally the basic principles of peaceful processes in international relations.

D. Regional Policy

Although the United States is not directly interested in the regional political and economic arrangements which might be entered into by Hungary in so far as such arrangements are not discriminatory in character, it is concerned with such arrangements as might affect European security and stability, and the welfare of the Danubian region as a whole. The United States should, therefore, be willing to examine any proposals for regional arrangements which would meet these criteria, provided that they are freely adopted by the peoples concerned and have the support of Great Britain and the Soviet Union.

In the inter-war period there was constant antagonism between Hungary, on the one hand, and Czechoslovakia, Yugoslavia and Rumania, on the other. The latter states organized the Little Entente, in order to prevent restoration of the Habsburgs to the throne of Hungary and to forestall revision of the Treaty of Trianon by force of arms.

On the other hand, the Hungarian Government rejected any kind of association whether with the Little Entente or the Balkan Entente unless the member states would agree to give prior consideration to frontier revision. Official circles of the Czechoslovak Government-in- exile have expressed the view that basic reforms within Hungary would be prerequisites to any closer regional association with Hungary. Although the Soviet Union has expressed strong opposition to any276 Ignéc Romsics

political grouping in the Danubian area which might become a cordon sanitaire against the Soviet Union, it might take a different view of some regional association which offered prospects of reducing political and economic frictions among the states of the region without constitut- ing a threat to any outside power. Any agreement which reduces friction between Hungary and its neighbors would be a valuable contribution to the construction of a peaceful post-war world, a1though such a regional union should take its place within a general security system.

II. AMERICAN POLICY DURING THE PERIOD IMMEDIATELY FOLLOWING HOSTILITIES

A. Armistice Terms

The surrender of Hungary may come prior to military occupation of the country or during the course of military operations. The Hungarian people may remain passive after surrender or they may desire to cooperate with the forces of the United Nations in the final defeat of Germany. If Hungary should participate actively in the war against Germany, it might possibly receive the status cobelligerency.

The armistice terms for Hungary proposed as a guide for the American representative on the European Advisory Commission, called for unconditional surrender. The surrender provisions envisage the demobilization of the Hungarian Army and the complete control by the occupation authorities of the administration, political activity and productive facilities. In view of the changed circumstances, the terms to be applied might well be affected by the degree of resistance which the Hungarian people offer to the German invaders

In negotiating for Hungarian surrender the principal United Nations would presumably be willing to deal with any Hungarian group which is in a position to offer surrender. They should bear in mind, neverthe- less, the political desirably of accepting surrender from the groups responsible for Hungarian participation in the war against the United Nations.

Hungary suffered the consequences of its policy of collaboration with Nazi Germany when the country was occupied by German forces in March 1944 and a puppet government subservient to Hitler was established, with Admiral Horthy continuing as Regent. The United States condemns the policy by which the leaders of Hungary aligned their country with Nazi Germany and plunged it into war against the United Nations. Nevertheless, this Government might well point out to the Hungarian people that provided they demonstrate their right to independence by active resistance to the Germans:

1. Hungary should exist as an independent state;

2. The people of Hungary should ultimately have the right to choose their own form of government;

3. Hungary should have a territorial and economic status which would enable it to fulfill a constructive role in a peaceful world.

Any declaration of policy regarding Hungary, should, of course, be concerted with the British and Soviet Governments.

B. Occupation and Controls

1. No Military Government.--The armistice with Hungary may or may not be followed by a period of occupation and military government. If the Hungarian people break with their Nazi masters, actively resist the invader, and establish a more democratic government friendly toward and acceptable to the United Nations, military government might not be regarded as necessary by the United States. It is even conceivable that Hungary might be accorded the status of a co-belliger- ent. Even if no military government is set up, the United States may desire to see established in Hungary some kind of control over such matters as disarmament, reparation and the punishment of war criminals. If the Italian pattern is followed, this control might take the form of a commission in which the United States, Great Britain and Soviet Russia, and possibly Czechoslovakia and Yugoslavia, would be represented.

2. Military Government.--If a military government is established, the supreme authority will rest with the commander-in-chief of the armed forces of the United Nations in Hungary, acting in the interest of the United Nations as a whole and in accordance with the broad instructions agreed upon by the Governments of the United States, Great Britain and the Soviet Union, presumably thought the instrumen- tality of the European Advisory Commission. The Czechoslovak and Yugoslav Governments should receive adequate opportunity to present their views concerning the surrender terms.

Whether the commander-in-chief in this area is Soviet or Anglo- American would presumably depend on the course of military operations prior to Germany's final surrender. In such a period of military government, the United States should participate either directly or through membership in a tripartite control commission or in a United Nations Political Advisory Council for Hungary. The controls estab-lished over Hungary, as one of the aggressor nations, shou1d last until such time as Hungary demonstrates its willingness and ability to live at peace with its neighbors.

If a military government is established in Hungary, the United States should encourage the development of a provisional government which would lay the foundations for a more democratic constitutional and political structure than Hungary has had in the past.

3. Territorial Policy.--Whether or not a military government is established, the territories which Hungary acquired from Czechoslova- kia in 1938-1939 and from Yugoslavia in 1941 should be returned to these countries immediately following Hungary's surrender, without prejudice, however, to any mutually satisfactory adjustments which might be arranged between the parties concerned. The disputed area between Hungary and Rumania, two enemy countries, constitutes a special problem. A preliminary determination of the Hungarian- Rumanian frontier in Transylvania may be made prior to the end of the war, as the Soviet Union has suggested, as an inducement to encourage Rumanian surrender. If no settlement is reached prior to the end of the war, provisional control of the administration over Transylvania or any part of it might be vested in the principal United Nations.

C. Relief and Reconstruction

At its organization meeting in November 1943, the United Nations Relief and Rehabilitation Administration agreed to general principles and conditions governing the extension of relief to enemy states, such as Hungary. In the period immediately following surrender the administration of relief in Hungary will be a matter for the period of occupation, relief and rehabilitation operations will be undertaken by the United Nations Relief and Rehabilitation Administration at such time and for such purposes as may be agreed upon by the military command, the established control authorities or duly recognized administration on the one hand, and the UNRRA on the other. In any case, Hungary, like other enemy states, will be required to bear the expense of such relief as it may receive, and may be required to make available to the occupying authorities Hungarian supplies, particularly foodstuffs, for the relief of states which are members of the United Nations.

Despite uncertainties concerning internal developments in post-war Hungary and in Europe as a whole, among primary problems in the Final Summaries and Recommendations 279

reconstruction of its economy are likely to be the laying af foundations for a long-range program of land reform; conversion of Hungarian industry to peacetime production and its emancipation from German domination; control measures to avoid domestic inflation; access to foreign supplies needed for industrial and agricultural rehabilitation and outlets for Hungarian exports, particularly for agricultural products.

The United States may assist in the economic reconstruction of Hungary through its participation in such programs of the UNRRA or other international organizations of which it is a member as are undertaken in Hungary. It may also desire to participate in loans and in arrangements for supplying technical assistance to Hungary, as part of the process of economic reconstruction in Europe as a whole. It would also be prepared to open its markets to Hungarian trade and to supply such commodities as Hungary may need. Hungary may be expected to carry through its reconstruction with a minimum of direct assistance from other nations, if world markets are reopened and exchanges are stabilized.

If Hungary emerges from the war with its productive capacity relatively intact, it will be in a position to contribute substantial reparation in kind for European reconstruction. Foodstuffs presumably would be available in considerable quantities, and there are important deposits of bauxite and of coal. Hungarian iron and steel, as well as its manufacture of sugar, hemp and flax should also contribute to repara- tions requirements. It is improbable that the United States Government will have any direct interest in receiving Hungarian reparations in kind, but in view of the American interest in an orderly reconstruction of European economy, this Government should favor the treatment of the problem of Hungarian reparation on the basis of an agreed policy towards reparation in general, rather than by unilateral action by any one of the United Nations.

The United States would also be prepared to conclude trade agreements with Hungary for the reduction of trade barriers between the two countries, with a view to expanding mutual trade relationships. However, in view of the fact that in the inter-war period, direct trade between the two countries was relatively unimportant, and that Hungarian exports are chiefly agricultural, the country's foreign trade would best be developed by arrangements for the expansion of trade relationships between Hungary and western Europe on a non-discrimi- natory basis. D. Establishment of a Permanent Government in Hungary

In accordance with its general policy, the United States desires to see Hungary ultimately restored to independence, with political and economic foundations which will enable the Hungarian people with their neighbors, in the Danubian region.

The Hungarian people should ultimately be free to decide for themselves the forms and details of their governmental organization, so long as Hungary conducts its affairs in such a way as not to menace the peace and security of its neighbors. Therefore, the United States should not look with favor on projects designed to restore the Habsburgs to the throne of Hungary or upon the continuance in power of those Hungarian political forces which were fundamentally instrumenta1 in bringing Hungary into alliance with the Axis Powers and into the war with the United Nations. Probably the most significant contributions which the United States could make toward the development of an independent and democratic Hungary would be to use its influence to facilitate more equitable frontier adjustments between Hungary and its neighbors and to encourage the efforts of the Hungarian people to advance toward greater social and political democracy.

Prepared and Reviewed by the Inter-Divisional Committee on the Balkan-Danubian Region.

TS: HNHoward (drafting officier) SE: CWCannon

PEMosely CKHuston

CEBlack CEHulick

MEBradshaw FMerrill

JCCampbell CE: JWRiddleberger

TA: HPBalabanis

WEA:DDort

Box 109

Wartime American Plans for a New Hungary