STATE CONTROL MINISTRY; RAKOSI AND NAGY SCHISM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00810A008500520004-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 21, 2016
• Document Release Date: December 5, 2008
• Sequence Number: 4
• Publication Date: December 7, 1955
• Content Type: REPORT

Approved For Release 2008/12/05: CIA-RDP80-0081 OA008500520004-0
CENTRAL INTELLIGENCE AGENCY
This material contains information affecting the National Defense of the United States within the meaning of the Espionage Laws, Title
18, U.S.C. Secs. 793 and 794, the transmission or revelation of which in any manner to an unauthorized person is prohibited by law,
COUNTRY Hungary
SUBJECT State' Control Ministry;
RKkosi and Nagy Schism
DATE OF INFO.
PLACE ACQUIRED
DATE ACQUIRED
REPORT
DATE DISTR. / December 1955 25X1
NO. OF PAGES 2
REQUIREMENT NO. RD
REFERENCES
State Control Ministr
1. The officials of the State Control Center, because the head of the Center
was not of Ministerial ranks were unable to-exercise sufficient authority
over the financial planning of the various ministries. The official
compared the.former position of the Center to that of a branch of the.
Army with a controlling function, headed only 'y a Colonel, which had to
examine and criticize the activities of General officers.
2. The Center developed from the Control Department.of the Treasury into an
organ controlling the financial activities of Ministries,'on the Soviet
pattern.', This system was found not to work in Hungary, and the majortty
of the controllers, technicians and accountants of the Center were trans
ferred to the appropriate Ministries,'hich left the Control Center with
the task of controlling only the general principles of budgetary planning.
The Control. Ministry is continuing with this more limited function.
Effect of Exports to East on Goods available for West
3. The official admitted that it might happen that even if the Hungarian
Government had formally committed itself to deliver certain goods to a
western country, it might in an emergency go back on its contrPct because
of prior demands for the goods by a country in the "Mutual Economic Aid
Group."
4. Expanding on this point, the-official stated that, until recently, Eastern
Germany used to be a liability for the other countries of the Bloc, since
under the Mutual Economic Aid, East Germany received considerable priority
in the export of certain materials and goods for the building up of its
industry. This was particularly so in the case of raw materials (the
official implied that Hungary had even had to export coal to East Germany).
SE-CRE-T
STATE X ARMY ', I X i NAVY
AIR X FBI AEC
INFORMATION REPORT INFORMATION REPORT
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East Germany was no longer a liability to the Bloc, and at present the
country which required the greatest extent of aid from its neighbors was
Rumania. The USSR and Hungary were the chief countries of the Bloc con-
cerned in providing material assistance to,the Rumanians.
5. Hungary is supplying installations and steel plants to be erected in
North Korea.
RAkosi and Nav
6.. The official stated that the general view of the Hungarian Communist Party
was that neither RAkosi nor anyone else was indispensable. It could be
said that the control of the Party and Government was through collective
leadership., but that Rakosi'a personality and experience made him far and
away the important figure. There was no discussion in Party or Government
circles about a successor to RAkosi.
7. ErnB GerB was very little heard of nowadays.
8. Commenting on the R~kosi - Nagy dispute, the official said that when Nagy
made his original statement about a liberalization of Hungarian economic
policy, he gave no instructions on how exactly this was to be brought
about. It was only after about three months that instructions were issued
on such matters as norms and a revision of agricultural quotas, etc. In
the interim period, chaos had ensued, since no one knew what should be done
to carry out the new line, and people were na.turali.y reluctant to take
responsibility upon themselves for any radical change. When Nagy finally
issued instructions, these were of a far less liberal nature than he had
originally intended, since in the meantime he had come to realize that the
time was not yet ripe for a radical relaxation in State control over
industry and agriculture, or in the tenor of production. Since it would
have been impossible for him to reverse his policy, a change of direction
was ultimately announced by Rikoai.
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Approved For Release 2008/12/05: CIA-RDP80-0081 OA008500520004-0