Jorg Hirsch / Kim Travnor (translation)

Andrew Andersen (map editing for web version)


Longman London and New York 1996






Hungary Between The Wars





From Károlyi's Baurgeois-Democratic Revolution to Kun's Soviet Republic

The Kádrolyi's government's last-minute attempt to persuade the Entente Powers to conclude a separate peace with an independent Hungary and make generous concessions to persuade the non-Magyar peoples to remain within Hungary failed during the first days of November 1918. Despite the agreement of the Allies to leave a final settlement of the new east central European frontiers until after the Paris Peace Conference the Czechs, Slovaks, Ruthenes, Rumanians, Croats, Serbs and Slovenes, helped by the French military, now seized those parts of Hungary to which they laid claim. Ignoring the armistice signed by the commander of the French Balkan army, Franchet D'Esperey, and the Károlyi government in Belgrade on 7 November 1918, the Rumanian National Council in Arad notified the Hungarian authorities on 10 November of the takeover of the administration in twenty-three counties and parts of three other counties. Rumanian troops advanced into Transylvania whose annexation was unilaterally proclaimed by the Bucharest government on 11 January 1919. The Serbs had already taken over the administration of the Bácska, the Baranya and the western Banat on 24 November 1918, presenting the Hungarians with a well-nigh irreversible fait accompli. Czech troops advanced into Slovakia, or 'Upper Hungary' as it was formerly called, and were poised to occupy the districts of Ung, Ugosca, Bereg and Máramaros with their Ruthenian population, to which the Rumanians also laid claim. On 3 and 23 December 1918, the Allied Supreme Command agreed to the takeover of the civilian administration by the Czech authorities. On 29 October, the diet of the Kingdom of Croatia and Slavonia had announced an end to its ties with Hungary and the Habsburg monarchy and joined Serbia. In view of the realities of the situation the Hungarians were unable to take any effective measures to prevent the break-up of their country.


Hungarian poster reflecting territorial claims of Hungary’s neighbours after her voluntary disarmament  


This dismemberment of the Monarchy, which the Hungarians were powerless to resist, caused a growing sense of bitterness among the Hungarian population and increasingly undermined the prime minister's prestige. Károlyi was regarded as relatively pro-Entente and a politician who enjoyed good relations with western statesmen. As early as 1914 in the USA and again in neutral Switzerland in the autumn of 1917 he had argued for his belief in the need for an evolutionary change in Hungary's socio-economic and political conditions. The tough actions taken by the emerging nation states, tolerated, though not always approved of by the allied governments, showed that, contrary to expectations, Hungary could not hope for more considerate treatment. The Károlyi government was particularly disappointed by the Entente Powers' growing readiness to depart from the principles set out in Wilson's Fourteen Points, which those groups willing to introduce reforms had been in the end prepared to use as a basis for the necessary restructuring of an independent Hungary. The argument that Hungary's premier, István Tisza, like the Hungarian population in general, had opposed the unleashing of the First World War in the summer of 1914 failed to persuade the Allies to grant more favourable peace terms.

With the growing willingness of the Allied governments to allow a ring of territorially well-endowed successor states to emerge, confining Hungary to a relatively narrow area of Magyar settlement, the progressive idea of the new minister for nationalities, Oszkár Jászi, to make Hungary a kind of 'eastern Switzerland', became untenable. As well as analysing and condemning former policies towards the nationalities, Jászi proposed working towards a new form of coexistence between the nations in the Danube Basin on the basis of extensive political and cultural autonomy. However, during the course of the discussions with Slovak and Rumanian representatives it soon became clear that even the most generous concessions could not overcome their desire to join their conationals in the new or already existing nation states which had been greatly enlarged by the acquisition of new territories. The I ncreasingly obvious impossibility of breaking out of Hungary's foreign policy isolation and preventing the country's territorial disintegration prior to the terms of the Paris Peace Conference being made known also increasingly limited Károlyi's room for manoeuvre in domestic politics.

The first new government measures were infused with a progressive spirit and met with broad approval. A new electoral law extended the franchise to all men and the majority of women over 21 who had been Hungarian citizens for a period of at least six years. Future elections were to be conducted by secret ballot. In a similar liberal and generous spirit the government guaranteed by law freedom of the press, assembly and speech. The Ruthenian population was granted autonomy and preparations made to introduce a land reform. The workers won the acceptance of their demand for an eight-hour working day, first raised a decade previously, although there was still insufficient work available and food shortages. The effects of the Allied blockade, the disruption to Hungary's close economic ties with Austria, together with the military occupation of major territories in the north, south and east of the country, all contributed to a general situation which brought factory production to a standstill. Shortages of raw materials and fuel, together with the disruption to freight traffic, produced maximum economic chaos. The unemployment figures rose daily. Returning prisoners of war and demobilised soldiers swelled the flood of refugees from the occupied territories who were often homeless and incapable of making ends meet. The country's finances had been completely ruined by the war and could not be used to alleviate the widespread distress. Appeals for voluntary donations showed people's willingness to help, but donations of clothes and money were inadequate to provide effective long-term relief. A feeling of growing bitterness spread among people facing basic food shortages in the urban areas, since they suspected landowners and wealthy peasants of deliberately holding back deliveries to the starving towns. The refusal of many landowners to cultivate their fields in view of the impending land reform and the growing impatience of the rural proletariat, which saw no sign of the promised redistribution of cultivable land, heightened tensions and created an explosive atmosphere.

Because its proposals for a democratic reform of society were increasingly criticised and condemned by the political Right as too radical and partisan, the Károlyi government felt obliged to take steps to prevent developments taking a more radical direction. The minister of defence, Bartha, who had been behind the setting up of special armed units to defend the government and the property of the state, was forced to resign from his post as a result of public pressure. But the minister of the interior, Count Tivadar Batthyány, also resigned on the grounds that the measures taken against the threats from the Left were too lax. Government officials were very hesitant about pushing through laws which ran counter to their own political beliefs. Members of the army officer corps founded secret organisations committed to the defence of the fatherland which Gyula Gömbös, a general staff captain and future prime minister, tried to unite in the Hungarian Militia Association.

The political Left was also in the process of organising itself. A small nucleus of political activists had been formed from among the half a million or so Hungarian soldiers who had ended up in Russian captivity and had in many cases been influenced by Marxist-Leninist ideology. After their release from captivity they had spread the message of Socialist revolution and had made their mark as organisers and speakers at mass demonstrations both before and after the revolution of 1918. Some, like Béla Kun, had also taken an active part in the Russian revolution and had fought in the ranks of the Red Guard. On his return to Budapest Kun, who derived great authority from being one of Lenin's former colleagues, had immediately made contact with the Social Democratic Party's left wing and the Revolutionary Socialists. The latter had played a major part in the preparation and execution of the 'Chrysanthemum revolution', but were dissatisfied with the official line of their parties who were content with a bourgeoisdemocratic revolution. The Soldiers' and Workers' Councils which had appeared spontaneously in both the capital and the provinces, had not grown as dynamically as had been hoped. It was felt that it would be impossible to implement a political programme or gain a say in government without first developing a strict party organisation. On 24 November 1918, therefore, the Communist Party of Hungary (Kommunisták Magyarországi Pártja) was founded and soon published its own newspaper theVörös Újság (Red News).

The new party, which at first concentrated its activities on the big factories in Budapest and the soldiers garrisoned in the capital, soon tried to whip up support for its programme in the provinces too. Its aims were varied, Its propaganda concentrated on crushing the 'counter-revolution', exposing the betrayal perpetrated by the 'right-wing' leaders of the Social Democratic Party and creating a system of Soviets on the Bolshevik model. It also put forward concrete demands for a 'complete break with the remnants of feudalism', an end to cooperation with the bourgeoisie and its corrupt politicians and a change in Hungarian foreign policy away from the Entente and towards an alliance with the new Soviet Russia. Although the nucleus of the Communist Party remained relatively small in size, Communist slogans had an effective appeal in a situation of growing social distress and widespread dissatisfaction. They helped weaken popular support for the Social Democrats and thus for the government coalition. Revolutionary Soldiers', Workers' and Peasants' Councils were now also formed in the provincial towns and pursued policies very close to the Communist Party programme. As early as late December demonstrators organised by the Communist Party demanded the proclamation of a Hungarian Soviet Republic. The entire country was engulfed by a wave of strikes as infuriated workers took over their factories and seized transport and communications installations. When the government sent in the army to restore order numerous factories were occupied between the 1 and 5 January 1919 and control of production passed to the Communist-dominated Soviets.

The government turned out to be no match for this deeply motivated revolt. After lengthy discussions the internal argument within the Social Democratic Party, whether, in view of the masses' action and the Communists' growing influence, it would not make more sense to withdraw from participation in the government in order to retain some of their influence with the workers, or whether the Social Democrats could better defend their positions in the crisis by assuming an even more prominent role in government, was decided in favour of those who supported continuing the policy of shared governmental responsibility. The party's National Council hoped that Count Mihály Karolyi's appointment as President of the Republic on 11 January 1919 and the entrusting of the former minister of justice, DU +00E9nes Berinkey, with the formation of a new government would bring about greater stability. The Social Democrats occupied five posts in the new government, including Vilmos Böhm as minister of defence. The Smallholders' Party nominated the popular István Nagyatádi Szábo for the new government as a man who could be expected to speed up the land reform for which the peasants were becoming more impatient. The Social Democrats tried to tame the left wing of their own party at first. After an emergency party conference had approved tough measures on 28 January 1919 the Budapest Workers' Council expelled the Communists from its membership and that of the trade unions. Following the dissolution of the spontaneously elected workers' councils, which had proved impossible to control, workers' participation was to be guaranteed by elected shop-floor committees in all factories with more than 25 employees. The Law for the Protection of the Republic gave the minister of the interior the power to order the internment of persons considered dangerous to the state. However, it was members of the right-wing opposition who proved to be the first victims of the preventive measure. The government undertook a thorough purge of the bureaucracy, dismissing the lord-lieutenants of the county administrations. The dissolved county commissions were replaced by elected People's Councils. The Militia Association was banned and measures carried out against the conservative elements around the president's older brother, Count józsef Kádrolyi, and Count István Bethlen, who tried to unite their supporters in the county administrations in a new right-wing opposition party. By announcing the law on land reform on 16 February 1919 the government hoped to calm the revolutionary mood in the countryside. All estates of over 300 hectares were to be expropriated and compensation paid to their owners. These were then to be parcelled out with the aim of creating a new economic structure based on small peasant farms allocated to the small and dwarf-holding peasantry. The new president, Mihály Károlyi began personally to redistribute the land on his great estates in Kálkápolna on 23 February.

However, this land reform sparked off a new internal political conflict. The large-scale landowners showed little inclination to support the passage of the proposed legislation and offered stubborn resistance. The rural proletariat reacted bitterly at the government's completely inadequate upper limit on the size of individual allocations. They also criticised the lengthy and cumbersome process of redistribution which prevented the transfer of ownership in time for the spring planting of crops and complained at the amount of compensation they were expected to pay, sums which the poor rural population could not in fact afford. When the government refused to halt the work of the land distribution committees and satisfy the calls for reform, voiced with increasing bitterness by the intended beneficiaries, the number of land seizures by the peasants began to rise from the beginning of March 1919 onwards as attempts were made to cultivate the land collectively. Even the newly appointed government officials who were supposed to take over the leading positions in the county administrations were not always able to take up office and had to watch helplessly as makeshift committees, dominated by landless peasants and workers, usurped the administration's functions. In some provincial towns such as Szeged the town council was controlled by workers' committees set up by the left-wing Social Democrats and the Communists.

Even the arrest of the Communist Party's leaders on 21 February 1919, which the Social Democrats also agreed to after considerable hesitation, failed to dampen the mood of revolution. The arrests had come about as a result of a demonstration organised by the Communists outside the editorial building of the Social Democratic daily newspaper Népszava(The Voice of the People), where several policemen had been killed the previous day. Since, at Károlyi's request, the fifty or so defendants were granted the status of political prisoners, they were also able to lead the Communists from inside prison and create more difficulties for the government whose image was completely tarnished, not least because of its lack of success in foreign policy.

As early as November 1918 the Károlyi government had tried to establish closer contacts with Italy in the hope of acquiring a spokesman at the Paris Peace Conference. The government's willingness to settle the problem of Hungary's disputed territories and develop economic relations with its neighbours was communicated to the new South Slav kingdom of Yugoslavia. In Vienna and Berne, where the Hungarian diplomats had been accredited without further ado, the opportunity presented itself of establishing the first direct contacts with the western Allies and putting the Hungarian case. An economic mission led by A.E. Taylor, followed by a political mission headed by A.C. Coolidge on 15 January 1919, renewed Hungarian hopes of being included in America's financial aid programme under the direction of Herbert Hoover. It was clear that the country's national economic recovery was bound to have an affect on the government's ability to stabilise the internal political situation. With the Allied military intervention against Bolshevik Russia fully underway, the Hungarians felt they could expect an acceptable settlement of the frontier problem from the Paris Peace Conference, since this appeared to be the only way of avoiding revolution and a takeover of power by the radical Left in Hungary. Thus, the measures taken to curb the influence of the Communists also stemmed from foreign policy considerations.

However, the Peace Conference decision of 26 February 1919, first intimated to the Hungarian government in Budapest on 20 March, effectively swept the Kádrolyi government from office. It proposed creating a neutral zone in the south-east of the country in order to separate the opposing Hungarian and Rumanian forces, which stood ready for battle on the demarcation line, and envisaged sending in more Allied troops. Acceptance of these proposals would have exacerbated Hungary's internal political crisis which had already reached a dangerous level after the Communist Party announced its intention of liberating its imprisoned leaders by holding a mass demonstration on 23 March. The Social Democrats, pressed by Károlyi to take over sole responsibility for the government, intensified their ongoing negotiations with the imprisoned Communist leaders. In view of the external political threat faced by Hungary, the Social Democrats announced their willingness on 21 March to unite with the Hungarian Communist Party to form the United Workers' Party of Hungary ( Magyarországi Szocialista Párt) and to form a new government of both parties pledged to implementing important points in the Communist Party programme. After Károlyi had rejected the Allies' demands as unacceptable he transferred power 'on behalf of the proletarian class' to this new government, the Revolutionary Governing Council ( Forradalmi Kormányzótanćs). Although its chairman was the Social Democratic Centralist, Sándor Garbai, it was effectively led by Béla Kun who had secured his position as head of the People's Commissariat for Foreign Affairs.

On the 22 March 1919, the new government proclaimed Hungary a republic and announced its declared aim of establishing the dictatorship of the proletariat. Proclaiming its desire to live in peace with all peoples, to maintain relations with the western powers and arrive at a just compromise with the country's nationalities, it announced that the most important tasks facing the new Soviet Republic were the construction of a Socialist society and the forging of an alliance with the Soviet Union. Kun, who soon claimed and received dictatorial powers, placed his faith in the prospect of military help from the Red Army to defend Hungarian territory, interpreted as a struggle against the imperialism of the capitalist powers. The vast majority of the population was at first persuaded by this view and prepared to take up arms to defend Hungary's territorial unity, although most thought little of the Communists' utopian doctrinaire measures in internal politics. There was no opposition, nor protests, at first, since only a completely new political departure appeared to offer Hungary the chance to break out of its foreign policy isolation and take the heat out of the confused internal political situation. Although the number of organised Communists remained few, the majority of Social Democrats, many bourgeois radicals and even reformist liberals supported the change introduced by the new Soviet government. There followed a rapid succession of decrees which in the course of time revealed the dominant influence of the Communists.

On 25 March 1919, the government officially announced a reorganisation of the armed forces and the creation of the Hungarian Red Army. This was to be recruited from the organised workers with political commissars attached to each unit in order to counteract the influence of the old officer corps and ensure that the troops were successfully re-educated ideologically. The Red Guard, in which Communist supporters occupied all the key positions, was charged with maintaining internal law and order instead of the police and the gendarmerie. The courts were replaced by revolutionary tribunals on which lay-judges, loyal to the party line, were given the final say. On 26 March, mining and transport were nationalised along with industrial concerns with more than twenty employees. These were to be managed in future by production commissars and controlled by elected workers' councils. Banks, insurance companies and home ownership were likewise placed under state control. By placing accommodation under public ownership an attempt was made to overcome the housing shortage caused by the flood of refugees. Social policy measures -- wage increases, sexual equality, the prohibition of child labour, improved educational opportunities -- met with widespread approval, as did the nationalisation of major commercial concerns, the introduction of food and consumer goods rationing and the supervised distribution of food by the trade unions. On 29 March 1919, it was announced that schools and educational institutions were also now the property of the state. Up to 80 per cent of elementary schools and 65 per cent of middle-schools had previously been run by the Church. It was envisaged that members of the Church's teaching orders would continue to be employed on condition that they were prepared to enter the state service. György Lukács, People's Commissar for Education, also proposed a progressive reform of the universities and the entire range of cultural activities, and began a campaign against illiteracy.

The government's most radical measure was the land reform decrees of 3 April. Middle and large-sized estates together with their inventories were expropriated without compensation and taken into state ownership. The Church's landed properties were also subsequently nationalised, although some land was spared in order to support the clergy. The division of land into individual plots was forbidden. Estates were to be collectively managed by agricultural cooperatives, whereby the previous owners, tenants and managers had to take charge as 'production commissars', who would be subject to control by the People's Soviets, comprising former rural labourers and farmhands, i.e. the so-called 'collective farm workers'. In the belief that large-scale enterprises would effectively produce more to cover food requirements than small peasant farms lacking capital, machinery and seed stocks, the rural poor's spontaneous land seizures, hitherto encouraged by the Communists, were now reversed. However, dissatisfaction with this measure was so great in some districts that the government was soon obliged to allow the creation of small plots or allotments.

In order to acquire political legitimacy and popular support for their far-reaching measures, which resulted in considerable social change and unforeseeable changes in the production and administrative apparatus, Soviet elections were held between 7 and 10 April on the basis of the extended suffrage granted by the provisional constitution of 2 April 1919. Since there was only a single list of candidates, the Revolutionary Governing Council could be sure of winning a majority for its programme which was increasingly modelled on Soviet-Russian organisational principles. But in both the Socialist Party and the Revolutionary Governing Council the former Social Democrats, who harboured growing reservations regarding Kun's new direction in foreign policy, began to raise objections to the flagrant violation of existing legal norms and ruthless persecution of both actual or potential opponents.

To increase pressure on the Hungarian Soviet government to change its policies or even resign, the Peace Conference, which perceived the Soviet Republic as a threat, had decided on 28 March to maintain its economic blockade of the country. Hungary could, therefore, cultivate diplomatic and economic contracts only with Austria. Soviet Russia, itself imperilled by civil war and Allied intervention, had immediately recognised the Hungarian Soviet régime, but could not provide effective help. On 24 March, Kun had asked the Peace Conference to help settle the points at issue by sending a diplomatic mission to Hungary and entering into direct negotiations with Soviet government. Since America's President Wilson and Britain's prime minister, Lloyd George, interpreted the radical turn of events in Hungary as primarily a result of protest against the violation of Hungarian national interests and excessive French demands, they argued for the acceptance of Kun's proposal. Afraid that the Hungarian Communist virus might also spread to Austria and Germany, they thought it desirable to show a readiness to make some form of compromise. But Clemenceau's already mooted idea of establishing a cordon sanitaire in east central Europe appeared a better guarantee for holding feared German revanchist designs in check, while at the same time preventing the export of the Russian revolution and isolating Hungary internationally. The decision to withdraw the French interventionist troops from the Ukraine and the Crimea and hand over their weapons to the Rumanian army was motivated by the idea of using Czechoslovakia and Rumania, as directly affected neighbours, to exorcise the red spectre in Hungary. After long discussions the 'Big Four' finally agreed to send General Smuts to Budapest to sound out the Hungarians' willingness to negotiate. The talks, which began on 4 April, failed to produce any concrete results, since the Allies insisted on the creation of a neutral zone, albeit reduced, in south-east Hungary and Kun failed to have his proposal accepted of holding a conference of the powers directly involved to settle the problems of the Danube region.


Map from Hungarian Historical Atlas showing pre-Trianon Hungary, Entente-established demarcation lines, limits of the territory controlled by Hungarian Soviet government as well as Rumanian and  Czechoslovakian military expansion of 1918-19.

Click on the map for higher resolution


The Rumanian Crown Council, in a decree of 10 April 1919, decided, therefore, to insist on a military solution of its territorial claims against Hungary. Although the newly formed Kingdom of Serbs, Croats and Slovenes refused to join in any common action, Czechoslovakia also made military preparations. At first the Hungarian Red Army failed to halt the Rumanian advance which began on 16 April, with the result that Hungary had to surrender its territories east of the river Tisza. Earnest appeals and a wave of patriotism did, however, result in a rush of volunteers, especially after Czech units joined the campaign. A Committee of Public Safety, organised by Tibor Szamuely, increased the pressure on the civilian population and soon practised open terror against all suspected sympathisers of the Society for the Liberation of Hungary, founded by Count István Bethlen in Vienna on 13 April 1919. Against the background of a steadily deteriorating military situation and the failure of Hungary's increasingly anxious appeals to the Peace Conference and neighbouring governments, the Social Democratic People's Commissars showed at an emergency sitting of 1 and 2 May 1919 that they were prepared to create the conditions to end the military intervention through the resignation of the Revolutionary Governing Council and the appointment of a transitional government. With the help of the Budapest Soviet, however, Kun was able to drum up a majority in favour of continuing the fighting. The Red Army, which was quickly doubled in strength, began its offensive against the Czech units in Slovakia and Ruthenia in the middle of May. Hoping to create a direct land corridor to Soviet Russia and greatly improve the Soviet Republic's military and political situation, it managed to achieve a series of quick successes and by the beginning of June had already succeeded in driving a wedge between the rather ineffective Czech and Rumanian forces. A short-lived Soviet Republic was even proclaimed in the Slovak town of Kassa.

This unexpected recovery by the Hungarians led to various forms of intensified activity which eventually contributed to the fall of the Hungarian Soviet régime. In Szeged, which was under the control of French occupation forces, an anti-Bolshevik Committee was formed in which bourgeois politicians and members of the bureaucracy, together with some aristocrats and ex-servicemen, prepared to set up a rival government on 3 June 1919 under Count Gyula Károlyi's chairmanship. This counter-revolutionary government was to include Count Pál Teleki as foreign minister and the last commander-in-chief of the Austro-Hungarian navy and former aide-de-camp to the Emperor Francis Joseph, Rear Admiral Miklós Horthy de Nagybánya as minister of war. At the same time, Horthy took over the command of the National Army which had been mainly organised by Gyula Gömbös. Dissatisfaction with the Communists expressed itself in revolts in the countryside and refusals to cooperate. In the towns also, tensions were again heightened by the crisis caused by basic fuel and food shortages. The Revolutionary Governing Council tried to blame the peasants for the lack of food, thus exacerbating the already strained relationship between town and country, and increasingly resorted to coercion in order to maintain discipline and keep work going in the unpopular agricultural collectives. A Central Economic Council was eventually put in charge of the country's entire economic life with the task of overcoming the supply situation. However, the discontented rural population increasingly refused to cooperate. Resistance spread and was merely fuelled further by the government's counter-measures. In the western counties, in particular, riots and strikes, organised by ex-army officers and civil servants, flared up repeatedly, especially since the brutality with which the Red Guard units, charged with the maintenance of internal order, tried to crush the disturbances, led to a continual increase in the numbers of those opposing the government.

At the first party congress of the Hungarian Socialist Party, held on 12-13 June 1919, a head-on clash took place between groups who opposed the government's handling of domestic and foreign policy. Many Social Democrats obviously no longer agreed with the partisan direction of the Communists' policies and sharply condemned the radical measures against the population. As a result the party changed its name to the Socialist-Communist Party of Hungarian Workers (Szocialista-Kommunista Munkások Magyarországi) At the opening session of a new kind of parliament, the National Congress of Councils (Soviets) which lasted from 14 to 23 June, the Communists succeeded in passing a draft constitution which was entirely dominated by their ideas. They also demonstrated their controlling influence on the elections to the Central Executive Committee, whose task was to control the work of the Revolutionary Governing Council between the sittings of the National Congress. The deliberations were interrupted by the news that a major uprising involving the rival Szeged government had broken out between the Danube and the Tisza. The unrest spilled over to Budapest on 24 June as ex-servicemen gave their support to the government's opponents. By deploying Red Guard units, the government once more succeeded in crushing the disturbances, not least because the industrial workers refused to join the ranks of insurgents. But, since the workers were also not prepared to continue supporting the Soviet régime, the position of the Revolutionary Governing Council became increasingly precarious.

The actions of the Entente Powers also contributed to the crisis, True, the hastily conceived plan for an Allied military intervention was soon dropped in favour of diplomatic and economic pressure, but this made little impression on the Governing Council. The demand, communicated to the Budapest government on 7 June 1919, to stop the further advance of the Red Army to the north-east in order to begin peace negotiations in Paris with the participation of Hungarian delegates was ignored. On 13 June, an offer arrived from Paris that if the Hungarian troops retreated to the former demarcation line, the Rumanian army would be pulled back from the Tisza to its original positions. In view of the Hungarian army's logistical problems and growing internal resistance this proposal was accepted, though with some reservations. The Red Army began to pull back. Many of its generals and officers, who up until now had fought in order to fulfil their patriotic duty and defend their country, protested at this climb-down. The commander-in-chief, Vilmos Bőhm, and the chief of the general staff, Aurél Stromfeld, joined others in resigning their commissions in protest. It was also announced on 2 July that the Rumanians were refusing to withdraw their troops from the line of the Tisza until the Hungarian army had been completely disarmed.

When Kun wanted to force the evacuation of the territories beyond the Tisza by launching a surprise attack on 20 July 1919, the Red Army managed to achieve some initial victories, but was forced to fall back in disorderly flight when the Rumanians launched their counter-attack. In the final days of July Rumanian troops crossed the Tisza along a broad front. By 31 July, only 100 kilometres separated them from Budapest. Trade unionists and former Social Democrats had already expressed their view more openly that the occupation of the entire country by foreign troops could be prevented only by expelling the Communists from the Governing Council and forming a new government which the Entente Powers would recognise as a negotiating partner. This view was reinforced by reports from Vienna where Entente diplomats had presented the Hungarian negotiator, Vilmos Bőhm, with a list of eight points setting out their conditions for ending the Rumanian advance and beginning peace negotiations. The first condition demanded the voluntary resignation of the Governing Council and the creation of a caretaker government under the leadership of the trade unions. Although the Communists still refused to open the way for a negotiated settlement on 31 July, they had to accept the resignation of the Governing Council which was forced by the Budapest Central Workers' Council on 1 August 1919. After a period of 133 days Hungary's experiment in Soviet dictatorship had collapsed. It had ended, not only because of its total rejection by the Allies and the military superiority of its enemies, but because of internal opposition which had derived its strength from the government's errors of political judgement, economic problems and blind terror. Its leaders fled to Austria where they and their families were granted political asylum. A transitional government, headed by Gyula Peidl, had to try to minimise the damage caused to Hungary by Soviet rule.


The 'White Terror' and the Trianon Peace Treaty

In the weeks following the collapse of the Soviet dictatorship Hungary faced complete chaos. On 3 August 1919, Rumanian troops marched unopposed into Budapest where a succession of helpless and impotent governments rapidly wore themselves out.

Peidl's 'government of the trade unions', which was supported only by the Social Democrats, immediately began to repeal and annul the unpopular decrees and measures of Soviet rule. Private property was restored, a functioning state apparatus was re-established and what remained of the 'Red Terror', i.e. the revolutionary tribunals and the Red Guard, was eliminated. On 6 August, however, Peidl's government was overthrown in an armed coup. A new government led by the factory owner, István Friedrich, took over the running of the country. Although the rival Szeged government aknowledged the authority of the new government, the former's war minister and commander of the small counter-revolutionary 'National Army', Miklós Horthy, refused to carry out its instructions. Since the Entente Powers also refused to recognise the new government, its orders carried no weight and could not put an end to the killing and the looting. In the meantime, Horthy's troops had advanced into the areas between the Tisza and the Danube which were not under Rumanian occupation and soon extended their control over areas west of the Danube which were now free of foreign military occupation. Real and alleged Communists were ruthlessly persecuted along with workers and peasants who had played an active part in implementing the Soviet government's programme. The same fate was shared by the Jews who suffered considerable loss of life in punitive actions reminiscent of mediaeval pogroms. The officer detachments responsible for the 'White Terror' were actively supported by such newly formed paramilitary organisations as the Hungarian National Defence Force Association and the Association of Vigilant Hungarians, whose members were drawn mainly from the ranks of the reserve officers, students, civil servants and those Magyars who had been socially and economically uprooted following their expulsion from the former nationality territories now lost to Hungary's new neighbours. This 'White Terror', which raged throughout the countryside until the autumn of 1919 and died away only slowly in the spring of 1920, bore no semblance of legality. It claimed around 5,000 lives, put 70,000 citizens behind bars or crowded them into hastily erected internment camps and forced many suspects to flee abroad.

A mission of the Entente Powers, which arrived in Budapest on 5 August 1919, did little to stop the unbridled persecution and chaos. Whereas the various Hungarian governments tried in vain to maintain internal order and political stability, most of the government commissars in the counties, who were appointed from among the wealthy landowners, had sufficient power and means at heir disposal to restore traditional authority and property relations while at the same time reversing the principles of democratic liberal reform. They were fully supported by those groups in the towns and countryside who were horrified at the extent of the Soviet government's democratisation measures and the 'Red Terror'. These were the aristocracy, civil servants, the military and middle and small-ranking property owners in the towns who had no sympathy for the appeals of the intelligentsia -- itself implicated in the failure of democratic reforms -- not to let Hungary depart from the principles of parliamentary democracy. The visit of the British diplomat Sir George Clerk in October 1919 was evidence of the western Allies' interest in seeing a liberal parliamentary democracy established in Hungary. The Allies also urgently demanded that a general election, based on the secret ballot, should be held for a national assembly, conceived as a single chamber parliament elected bianually. The only reason that the Hungarians reluctantly agreed to these proposals was that they were the only means by which they could secure the withdrawal of the Rumanian troops from Budapest. After 16 November 1919, when Horthy entered the capital at the head of his National Army, now swollen to 25,000 men, a government of national concentration led by the Christian Social leader, Károlyi Huszár, was formed on 25 November. The post of social welfare minister was filled by Károly Peyer, the leader of the Social Democratic Party, newly reorganised in August. But the new government was unable to satisfy expectations that it would bring stability to the woeful political and economic situation. It could not and would not take vigorous action against the 'White Terror' at large throughout the country. As a result, the Social Democrats left the government on 15 January 1920 and decided to boycott the elections due to be held on 25 January. The other political factions displayed a lack of unity and instability. Many influential politicians of the pre-war period like Gyula Andrássy, Albert Apponyi and István Bethlen initially held back from joining any of the parties, but instead created independent dissenting groups. Newly created parties like the National Civic Party, the National Liberal Party or the Democratic Party lacked popular support and primarily represented business interests and high finance. In contrast, the Christian National Unity Party (Keresztény Nemzeti Egyesülgs Pdrtja) which was the result of a merger on 25 October 1919 between the Christian National Party, the Christian Social Economic Party and several smaller groups, was able to rely on the support of both the petty bourgeoisie and the wealthy L andowners who remained loyal to the Habsburgs and supported their restoration. In the meantime the National Smallholders' Party, led by István Nagyatádi Szabó, had become an important political factor. After its merger with the Party of Arable Farmers and Rural Labourers (Országos Kisgazda és Földmüves Párt), founded by Gyula Dann, it could count on the support of the majority of the rural population. Despite the continuation of the 'White Terror' the freest elections in Hungary's history -- free, because they were mainly conducted by secret ballot -- produced a majority for the Smallholders' Party which won 40 per cent of the vote and seventy-nine seats, while the Christian National Union won 35.1 per cent of the vote and seventy-four seats. Three further splinter groups returned ten deputies to the new parliament. The workers, however, still had no represention in the new National Assembly. When, on 15 June 1920, further elections were held in the territories which had been under foreign occupation, the Smallholders' Party succeeded in strengthening its leading position even further.

The Smallholders' demand to introduce land reform legislation in the interests of its supporters and the problem of the king were the key issues which the new parliament had to address. All the parties acknowledged that Hungary's 'indivisible and indissoluble' connection with the Habsburg crown lands had been severed; but all agreed that the monarchy should continue to exist beyond the 13 November 1918, although the Crown's prerogatives had been terminated as of that date. A quarrel now broke out between the 'Legitimists', who, drawn mainly from among the ranks of the wealthier magnates and the Catholic episcopacy, considered King Charles IV, who had not yet abdicated, to be the country's legitimate ruler and those who supported an elective monarchy based on popular support, i.e. the middle-ranking landowning nobility and leaders of the Calvinist Church who held that the monarch's claim to the throne had been forfeited and demanded the nation's right to choose a new king on the basis of free elections. Since both sides were unable to reach a compromise on the questions of whether King Charles was still Hungary's rightful ruler or how they should otherwise determine the succession, the government fell back on an institution of the late Middle Ages which Lajos Kossuth had revived in 1849: they proposed appointing a regent for the duration of the interregnum (Law I of 1920). On 1 March 1920, Miklós Horthy de Nagybánya was elected Regent in a parliament building occupied by the military at the time.

As commander-in-chief of the Szeged National Army, which had grown to almost 50,000 men in Transdanubia after joining up with Baron Antal Lehár's units at the beginning of 1920, Horthy, who was not a particularly talented military commander or politician, exhibited an exceptional desire to legitimise his authority. Thanks to his sincere manner in dealing with others, his ability in several languages and the troops under his command, he was able to win the support of the Entente representatives stationed in Budapest. His active tolerance of the 'White Terror' had made him acceptable to the enemies of reform as well as those opposed to revolution. They hoped they could install this reputedly malleable and arrogant professional soldier as a figurehead to help them achieve their own aims. Horthy knew how to give both the legitimists and those who supported an elective monarchy the impression that he supported their respective positions. He also cultivated the image of a leader who, on account of his good personal contacts with leading Entente politicians, could obtain improved peace terms for Hungary. But as soon as he was made Regent, Horthy increasingly pursued his own policy, primarily in the interests of his own family. The result was that the suspicion soon grew that he had his eyes on the crown for himself or his eldest son.

On 10 March 1920, the Huszár government made way for a new cabinet led by Sándor Simonyi-Semadam, whose priority was to seek an improvement in the harsh peace terms. On 25 November 1919, the Hungarian government had been invited to send a delegation to Paris to receive the terms. This delegation, headed by Apponyi, Bethlen and Pál Teleki tried to have the draft of the peace treaty, which was handed to them on 20 January 1920, changed to more favourable terms on the basis of historical, economic and legal arguments. They not only pointed to the geographical unity of the Danube basin up to the natural frontier of the Carpathians in the north and east and to the fact that the territories recently seized by Czechoslovakia and Rumania had for a thousand years, since the beginning of the 11th century, constantly formed part of the crown lands of St Stephen. They also argued that, despite the intermingling of populations of different nationalities it would be difficult, though not impossible, to draw a more equitable frontier. They failed, however, to gain any concessions with their arguments. The Hungarian government also tried in vain to prevent the inclusion of a war-guilt clause by pointing out that the Hungarian population and the prime minister, Tisza, had been opposed to war in the summer of 1914 and suggested changing the proposed terms stipulating a reduction in the size of armed forces to allow a system of conscription for a standing army of 100,000 men in place of the permitted strength of 35,000. When this also was rejected, broad sections of the Hungarian population were already bitterly opposed to the proposed peace treaty even before it was signed in the Trianon on 4 June 1920, believing that a major revision of its terms was inevitable.

The independent 'Kingdom of Hungary', which emerged as a result of the Trianon peace treaty comprised only 92,963 square kilometres compared with the original 325,411 square kilometres of the old pre-war Kingdom of Hungary. According to the 1920 census, its population now numbered 7.62 million inhabitants compared with the earlier figure of 20.9 million. Under the terms of the Treaty the new Kingdom of Serbs, Croats and Slovenes, later named Yugloslavia, received the Bácska, the Baranya and the western Banat, amounting to 20,956 square kilometres, i.e. 6.44 per cent of pre-war Hungary, involving the loss of 1.5 million inhabitants. Hungary was obliged to cede 102,787 square kilometres, i.e. 31.59 per cent of its entire territory and 5,265,000 inhabitants to Rumania, the latter obtaining the whole of Transylvania including the Szekler region, the eastern Banat, most of the counties of Körös and Tisza and the southern part of Máramaros. Of the 62,937 square kilometres or 19.34 per cent of pre-war Hungary ceded to the new Czechoslovakian Republic, Slovakia received 48,994 square kilometres, Ruthenia 12,639. Of the 3,250,000 inhabitants affected by these changes, 2,950,000 were settled in Slovakia and 571,000 in Ruthenia. More than three million Magyars now lived under foreign rule: 1,063,000 in Czechoslovakia, 1,700,000 in Rumania and 558,000 in Yugoslavia.



Thanks to Italy's support, Hungary was at least able to push part of its claim through against the weak Austrian government on the question of the Burgenland when a somewhat dubious plebiscite held on 14 December 1921 resulted in the return to Hungary of the area around Sopron.

Although no exact figure was set, Hungary had to agree to pay reparations. The armed forces permitted under the treaty, comprising a professional army of 35,000 men on a long period of service, but minus heavy artillery, armoured corps and an air force, was intended exclusively to maintain internal order and the defence of Hungary's frontiers. An Inter-Allied Control Commission was given the task of seeing that these armament limitations were observed.

Every section of the Hungarian population felt disappointment at the scale of losses demanded by the peace treaty, which came to be regarded as a dictated settlement. The historic Kingdom of Hungary had possessed a geographical unity without parallel in the rest of Europe. In the second half of the nineteenth century the national economy had been a coordinated whole in which the different parts of the country had been mutually dependent on each other and the capital, Budapest. This economic unit had been destroyed by the territorial terms of the peace. The effects of the world economic crisis in 1931-32 made the problems resulting from the destruction of the Habsburg Empire's unified economy very apparent and these proved impossible to overcome satisfactorily in the period before 1938. As a semi-industrialised country with an inadequately developed manufacturing industry Trianon Hungary began to fall behind other countries economically. Since its bauxite and oil resources were yet to be exploited, the government had to give priority to agricultural production. The war and the period of Soviet rule had done little to reduce the social tensions which resulted from the partisan redistribution of landed property, and these played a crucial part in determining the direction taken by Hungary's domestic and foreign policies during the inter-war period. The influx of 350,000 immigrants from the territories of the successor states, comprising mainly civil servants, teachers and soldiers, also added to the problem of achieving social cohesion, since they represented a politically aware group which could not be so quickly and easily accommodated in a country that had been reduced so much in size. The only problem solved by the imposition of the Trianon peace treaty terms was that of the national minorities. According to the 1920 census, only 833,475 people, i.e. 10.4 per cent of the population, including 552,000 Germans (6.9 per cent) and 142,000 Slovaks (1.8 per cent), did not speak Hungarian as their mother tongue. According to the same census, the number of Jews living in Hungary was 473,000.

Despite the sacrifices imposed by the treaty, Hungary's government and people continued to identify their dismembered state firmly with pre-war Hungary. Deliberately shunning any compromise with the new circumstances, they remained absolutely inflexible, rejecting even the possibility of any constructive developments within the new frontiers. They carefully nurtured the Magyars' sense of an historically based national identity, looking back to the founding of the state, the Hungarian Kingdom's thousand years of history and their belief in the Magyar cultural mission of spreading their superior civilisation. They kept alive the sense of humiliation at Hungary's defeat, the experience of economic privation and despair at the injustices of the peace settlement. In an eruption of national patriotism which permeated all social classes they argued for a revision of the peace treaty, invoking the symbol of the crown of St Stephen to argue for the restoration of the territories lost to their despised neighbours. Although differences of opinion soon emerged regarding the extent of the desired revision, the treaty's failings were pilloried. Its unrealistically high reparations demands, war-guilt clause, territorial and military terms and unjust treatment of the Magyar minorities in Hungary's neighbour states all became a focus of resentment. The slogan, 'Nem, nem, soha!' (no, no, never!) summed up the attitude of every Magyar to the peace treaty. Diplomatic, artistic and economic contracts with other countries were cultivated with renewed intensity with a view to revising the treaty's terms eventually. 'The world's conscience' was not to be allowed to rest 'in view of the injustices done to Hungary at the Trianon and the consequent danger to peace'. Whereas at first demands were made to restore to Hungary its pre-war territories, implying a total revision of the treaty, which could not be achieved peacefully but only by a victorious war, from 1930 onwards more enlightened circles worked for a revision of the treaty's territorial terms within the framework of national self-determination: ' Hungary will recover those citizens seized from her whose first language is Magyar, although plebiscites will be held in territories whose inhabitants' native language is not Hungarian'.

Hungary's revisionist policy was, however, primarily intended to divert attention away from the country's internal social and economic problems. The traditional upper classes, the aristocratic representatives of the governments and parties of the period before the Soviet republic, which quickly regained their prominence, were interested only in preserving what remained of feudal rule, in resisting any genuine land reform and in obtaining compensation for their extensive holdings which now lay in the territories seized from Hungary. It was thanks to their influence that a subtle combination of democratic elements was incorporated into the new constitution of 28 February 1920 which did much to perpetuate social injustices. The traditional middle class, recruited mainly from members of declining middle nobility, who had been gentrified and earned their living as civil servants or professional soldiers, tried increasingly to curb the influence of the upper nobility and secure their politicial and economic position. They were able – especially I n their unbridled campaign against the Jews -- to count on the complete support of a petty bourgeoisie which was also imbued with the conviction that it was ordained to rule politically and economically. Despite a large influx of Jewish immigration before the First World War, Hungary's Jews, in fact, formed only 6 per cent of the country's population, but controlled major areas of industry, banking and commerce as well as dominating several liberal professions like medicine, the law and journalism. Although the Jews had not posed a threat to any social class and had created many positions for the first time in their role as a substitute bourgeoisie, they were used as a scapegoat in order to release the pent-up dissatisfaction of the middle classes. Even in the officer corps, which was initially the only stabilising factor in the state and which exerted considerable influence on Horthy during his period as Regent, a groundswell of antisemitism combined with anti-liberal ideals. Above all, it was Hungary's professional soldiers who rejected democratic institutions and a liberal state based on the rule of law. Their growing chauvinism and demands for a complete revision of the peace treaty were accompanied by the call to establish naked authoritarian rule in the form of an overt military dictatorship. Hungary's governments and political parties had to resist these tendencies before they could even begin the long overdue process of consolidation.





The successes and failures of the Bethlen government


With Count Pál Teleki's appointment as prime minister at the head of a cabinet of notables on 19 July 1920, the new government could no longer simply be seen as a transitional government in the style of its short-lived predecessors. Lóránd Hegedüs, director of the Commercial Bank, one of Hungary's largest financial institutions, and director of the Association of Savings Banks and Banking Companies, was appointed finance minister. His task was to put the national budget in order and halt the depreciation of the currency whose value had fallen to less than a six-thousandth of its pre-war level as a result of galloping inflation. The government's main priorities were, however, finally to carry out a more just distribution of land for the peasants, end the lawlessness and brutality of the 'White Terror' and resist the virulent spread of antisemitism. The 'White Terror' and antisemitism had become linked in the minds of many Hungarians, since Bolshevism and the Jews were to some extent identified with each other. Béla Kun and many of the Soviet régime's prominent personalities came from Jewish families and were equated with the Bolsheviks. Right-wing military execution squads had sworn to eliminate the last traces of Communism and, since the industrial workers and their organisations were held partly responsible for the Soviet dictatorship, they, too, became objects of persecution and repression.

However, Teleki's government had no interest in seeing the law continuously weakened; nor did it have anything to gain from the uncontrollable and arbitrary retribution of the army and sympathetic right-wing circles which spread paramilitary, quasifascist ideas, especially since the mood of the population was still potentially explosive. Around a third of Hungary's workers were unemployed. Industrial production reached only 30 per cent of its pre-war level. The yield for the wheat harvest of 1920 was half that for 1913 and the entire country was suffering from acute food shortages. Despite major attempts to cut government spending, the number of state-employed officials almost trebled. While the Teleki government gradually achieved a situation in which constitutional principles were observed, it did not shy away from reintroducing corporal punishment on 26 September 1920 (Law XVI of 1920) or placing a ceiling on the number of university admissions in order to reduce the proportion of Jews entering the universities (Law XXV of 1920). This law, which did not mention Jews explicitly, helped bring about a situation in which the proportion of Jewish students fell from 34 per cent in 1917-18 to only 8 per cent in 1935-36. Deliberate measures were also introduced to eliminate the Jews completely from the state bureaucracy and there was widespread discrimination against practising Jews, who were eventually no longer allowed to conduct businesses in which the state had a monopoly, like tobacconists, the alcohol retail trade and cinemas. Their land was also frequently expropriated by the state. The policy of land redistribution had been stepped up following the territorial losses incurred under the treaty of the Trianon, with the result that the relatively small number of estates of more than 50 hectares of arable land made up 44 per cent of all land under cultivation. The family of the Princess Esterházy still controlled 110,000 hectares of landed property, the Counts of Festetics 48,000 hectares and the Cathedral Chapter of Eger 45,000 hectares. As was the case with all other decrees passed under the Károlyi and Kun governments, the radical land reform laws of 1919 were repealed, although the lesser peasantry and landless peasants were promised a 'more equitable distribution of the land' in return.

Count István Bethlen, who, at Horthy's behest, was negotiating with the leadership of the Smallholders' Party, has to be credited with having won over István Nagyatádi Szabó, leader of the strongest party, to join Teleki's government and support a very modest land reform. In view of the danger that the lesser peasants, comprising 95.6 per cent of the rural population, and the rural proletariat, who owned less than 3 hectares and often no arable land, might resort to land seizures, the large-scale landowners eventually agreed to offer for distribution 450,000 hectares of mainly inferior land out of the remaining total area of 8.5 million hectares. Included in the 411,000 people who benefited from this reform were some 300,000 landless peasants, who were given on average one hold (i.e. 0.5754 hectares) of arable land subject to paying compensation. 100,000 smallholders were also included in the redistribution (Law XXX IV of 1920).

These measures did nothing, however, to ameliorate the basic conditions of poverty in the villages. The peasant's economic distress was barely reduced, since the repayment rates were so high that some 80 per cent of the peasants who had benefited from the reallocation had been forced to surrender their new land again within three years of the reform. At the same time, some of the applicants -- army officers, civil servants, notaries, etc. all pillars of the Horthy régime -- were, as members of the newly created Order of Heroes (Vitézi Rend), awarded farms of up to 50 hectares. Any interested applicant who had served at the front and been decorated in the First World War, and who could prove their genuine patriotism, could be admitted to this order. By 1940 its 18,000 members, including 4,000 army officers, had at their disposal some 450,000 hectares of land. The government's promise to implement a radical land reform following the return of political stability and to make available cheap agricultural loans once the economy had stabilised consoled the smallholding peasant who had been initially disappointed by the first round of redistribution. However, the large-scale landowners knew how to fend off every future new initiative on land reform by arguing that any further division of land would reduce Hungary's agricultural competitiveness even further and result in a serious economic crisis. Owing to the collapse of the Monarchy, Hungary had lost its most important markets for agricultural produce which still accounted for 62 per cent of the national income. Protectionist policies in the rest of Europe, high agricultural tariff barriers and competition from foreign overseas grain imports made it more difficult to find a market for its agricultural produce. Although the use of artificial fertilisers and machinery slowly increased, production remained relatively low compared with pre-war levels. Livestock figures stayed static; the number of cattle and sheep declined. The Smallholders' Party, which was coordinated and brought into line by the future prime minister, Count István Bethlen, continued to look after the interests of its former electoral support inadequately. After 1925, the newly-formed Hungarian Socialist Workers' Party, founded as a Communist cover-organisation, tried to fill the vacuum. It developed a 'new land reform' programme based on Hungarian conditions, which aimed to expropriate all holdings of more than 50 hectares and reallocate the land to the rural proletariat free of compensation. Concrete measures to improve the unsatisfactory property and income distribution in the countryside, were not, however, introduced at this juncture.

Hungary's workers suffered particularly badly from the policy of turning the clock back to the political situation of pre-war Hungary. The Soviet dictatorship's achievements in the field of social policy were entirely eliminated at a stroke, and, despite growing unemployment -- in Budapest alone, 150,000 people were jobless -unemployment benefit was stopped, wages were held down despite rising inflation and the working day increased to 10 hours (12 hours in the mines). Since supplies of fuel and raw materials were exhausted, foreign trade with neighbouring countries was stagnating and the rapid depreciation of the currency was discouraging investment, it proved extremely difficult in the period before 1921 to switch production, previously geared to military needs, to peacetime commodities and the needs of the smaller domestic market. In 1922, production output reached only 52 per cent of its pre-war levels and in 1924 stood at about 60 per cent.

The scope for action by the political parties and workers' organisations, compromised by their part in the Soviet Republic, was systematically eliminated. The Communist Party was banned (Law III of 1921). Its exiled leaders, initially in Vienna and later in Moscow, did not succeed in creating a properly functioning underground organisation, although small clandestine groups did establish contact with each other after 1921 in Budapest's main factories, in the mining area of Tatabánya and the industrial region of Borsod. The authorities obstructed the work of the Social Democratic Party, which had been reorganised in August 1919, and restricted the public gatherings of the trade unions. The Christian Social trade unions, encouraged as a counterweight to their Socialist counterparts, together with state-funded 'substitute' parties, like the Hungarian National Workers' Party and the Hungarian Socialist Party failed to mobilise much support. The 'White Terror', wage reductions and government discrimination led to a massive decline in the membership of the more traditional workers' organisations. Nevertheless, it was still clear that the workers and their representative organisations could not be left out of any attempt to stabilise the system.

It was not the terrible economic situation, nor Hungary's unresolved and widespread social tensions that led the prime minister, Count Teleki, who belonged to the Legitimist camp, to resign on 13 April 1921, but the attempt by traditional conservative circles to force the restoration of King Charles IV. Encouraged by the Legitimists under the leadership of Count Gyula Andrássy Jnr., King Charles had returned from his Swiss exile to Szombathely in western Hungary on 26 March, subsequently entering into negotiations with Horthy, who up until this point had been keen to stress his loyalty to the king with the aim of reclaiming his vacant throne. When Horthy, however, proved unwilling to relinquish his power, for which he had in the meantime acquired a taste, and Hungary's neighbours threatened military intervention if a restoration took place, Charles, who was reputedly prepared to carry out radical social reforms, returned to exile. Count István Bethlen who had previously sympathised with the Legitimists, now crossed over to those who supported a freely elected monarch and formed a new government on 14 April 1921.

Bethlen, who was to play a prominent part in deciding Hungary's fate over the next decade, had been born into a wealthy family of Transylvanian landowners in 1874. As a member of the Upper House of Parliament in the period before the First World War, he had maintained an attitude of critical distance both from the policies of the Independence Party and, subsequently, those of Count István Tisza's Party of National Work. After 1919 he had formed the Anti-Bolshevik Committee in Vienna which contributed to the overthrow of the Soviet dictatorship. He was one of the personalities, who, on account of their considerable personal prestige, had been able to exert considerable influence on political life from a position outside the existing parties and who, as early as the summer of 1920, had tried to create a united bloc of government supporters by bringing about a merger of the Christian conservative parties, i.e. the Smallholders' Party and the Christian National Unity Party. He was able to rely not only on the complete confidence of the great landowners and capitalists, but also on the sympathies of the middle class, which, still dominated by the gentry ethos, looked to him for help in reducing the power of the magnates so that they could take control of the levers of power. His general adroitness, broad vision, diplomatic skill and sense of tactics predestined him for the post of prime minister at a time when Hungary had to continue with a policy of achieving internal stability while at the same time breaking through its foreign policy isolation by achieving a revision of the post-war peace treaty. The entire character of the 'Horthy Era' was strongly influenced by his personality and politics.

Bethlen soon faced his first major test as prime minister in October 1921. On 20 October, King Charles IV returned to Hungary for a second time. After the troops stationed in the western half of the country had sworn a personal oath of allegiance to him, he announced the formation of a new government and marched on Budapest. Relying on the Great Powers to protest against his actions and on the threatened military sanctions of Hungary's neighbours, Horthy and Bethlen mobilised the army which had the good fortune to win a minor victory against a royalist battalion on 23 October 1921 at Budaörs, west of Budapest. During the fighting the former army captain and secretary of state in Horthy's Szeged War Ministry, G yula Gömbös de jáfka, distinguished himself as the commander of a paramilitary force of right-wing radical organisations which turned the scales in the government's favour. Against his own sense of honour -- after all, Charles had been crowned King of Hungary with the crown of St Stephen and Horthy had been among those who had sworn an oath of loyalty -- the Regent had the defeated king taken prisoner to the castle at Taba-Tavaros and arranged for him to be exiled to the Portuguese island of Madeira where he died not long after on 1 April 1922. Bethlen lost no time in submitting new legislation to parliament which proclaimed the dethronement of the House of Habsburg on 6 November 1921 (Law XLVII of 1921).

The deposition of the Habsburgs was a serious defeat for the Legitimists. Their political arm, the Christian National Unity Party, never recovered and rapidly disintegrated into several insignificant splinter groups. Also, the fact that the legitimists recognised Otto von Habsburg, born in 1912, as the rightful king after his father's death, and that the debate on the legitimacy of the HabsburgLorraine family's claims to the throne continued to grow in Hungary, gave Horthy and Hungary's governments no cause for concern. The anti-Habsburg elements among those who supported a freely elected king, consisting mainly of the gentry and the petty bourgeoisie, interpreted their success as having also broken the influence of the magnates and the plutocracy, and sought to exploit the opportunity of stabilising the régime to broaden their own power base.

Bethlen continued to act vigorously against the excesses of the 'White Terror' which still broke out occasionally and greatly surpassed in cruelty and numbers of victims the 'Red Terror' of the Soviet régime. The outrages perpetrated by right-wing extremist groups, who enjoyed Horthy's protection and were never brought to justice, no longer suited the times and were a barrier to establishing and improving diplomatic relations with the outside world. The return to constitutional and legal norms was accompanied by an expansion of the police force, the gendarmerie and the courts, whereby measures to 'ensure the political and social order more effectively' were in future not only carried out against the remnants of the extreme Left like the Communists, but against the political Right, especially those groups of demobilised officers and ex-civil servants propagating fascism. Bethlen, who felt more attached to the conservative-aristocratic political views of the large landowners and grande bourgeoisie, and who would have welcomed a return to the established tradition-bound institutions of the Dual Monarchy, restored public order and put an end to the privileged position previously enjoyed by the armed forces. He removed the control they had usurped over the state apparatus and the military intelligence service, established the government's command of the army and the general staff and divested the paramilitary forces of their power in favour of the police force and gendarmerie. Since extreme nationalist military circles began to use great tactical skill in defying the implementation of these measures, Bethlen, with Horthy's support, had to try to begin creating his own party-political support.

On 22 December 1921, negotiations with the leaders of the Social Democratic Party, who were eager to reach a compromise, led to the government securing an extremely favourable secret agreement in the shape of the Bethlen Peyer Pact. The Bethlen government undertook to release imprisoned workers and trade unionists, legalise their political activities and allow them to stand for parliament, although this had a limited effect because of the franchise system and the restriction of secret ballot to elections in the towns. In return, the Social Democrats, led by Károly Peyer, announced their willingness to support the government's attempts at consolidating its power. They agreed to help prevent politically motivated strikes, cease campaigning for a republic, stop canvassing agricultural labourers, railway workers and civil servants and use their international contacts to overcome the country's diplomatic isolation. The difficult economic situation, high unemployment and inflation, combined with the strict policing of political meetings, resulted in pacifying and politically taming the disheartened workers. After the collapse of the Legitimist Christian National Unity Party, only the Smallholder's Party, which had by now split into two wings, remained a political factor beyond Bethlen's control.

With the active parliamentary support of the great landowners in the Agricultural Party and the Hungarian National Economic Association, led by the agricultural minister, Gyula Rubinek, Bethlen succeeded in outmanoeuvring its wing of smallholders and middle-ranking farmers led by István Nagyatádi Szábo. He infiltrated the party with his own supporters and, after officially joining the party himself on 5 January 1922, a group of former non-party sympathisers emerged and soon took over the key posts at the party headquarters, displacing Szábo's supporters who fought against being forcibly deprived of power and subjected to threats of exposure. A change in the electoral law, which still restricted the franchise to only 27.3 per cent of the adult population (39.2 per cent in 1920) and the reintroduction of the open ballot -- except in the major towns -- ensured that the Christian Social majority bloc, now renamed the Unity Party (Égységes Párt) received 45.4 per cent of the vote and 143 out of 245 seats in the May and June elections of 1922. Of the new government party only 19 deputies were former Smallholders. Thus the old ruling class, the impoverished gentry and nationalist non-Jewish middle class had created a political grouping which could assert itself comfortably against the Social Democrats, the bourgeois-democratic parties, the new opposition Smallholders' Party and National Socialist group which later experienced a marked upsurge of support in the 1930s. The Social Democrats, in the first ever election they contested, succeeded in gaining 39.1 per cent of the vote in Budapest and 15.3 per cent in the country as a whole, giving them 25 seats in parliament. On the strength of the Budapest vote several representatives of the liberal-bourgeois opposition were also returned. The government, however, made sure that the new parliament remained powerless and reduced it to a forum for approving government policy.

The programme of the Unity Party, which was supported by the influential daily newspapers, Pesti Hirlap and the German language newspaper Pester Lloyd, called for the reshaping of Hungary on the basis of national and Christian values and the creation of religious and social harmony for the sake of the policy of revisionism. It also promised a new electoral law and press law, the continued and speedier implementation of land reform, improved insurance protection for the workers, new legislation to enable the trade unions to play a greater role, the reintroduction of the magnatedominated Upper House and a regressive municipal reform. Under Bethlen's unchallenged leadership, the reappointed agriculture minister, István Nagyatádi Szabó (d. 1924), took over as chairman of the new party, while the actual running of its affairs fell to its vice-chairman, Gyula Gömbös.

Some of the military and right-wing extremist organisations had influential sympathisers among the new government party's leaders in Gömbös, Tibor Eckhardt and Endre Bajcsy-Zsilinszky, but no way of preventing the undermining of their previous bastions of power. These groups began to show their dissatisfaction with the government's attempts to consolidate its power, imposed by Bethlen from his position of strength. Their attempt to revive the controversy on continuing the land reform, which had been stifled by the great landowners, in order to win mass support from among the disillusioned rural proletariat, misfired, as did the strike of civil servants and white-collar workers which they initiated. Bethlen was able to forestall preparations for coups against him at an early stage with the help of the loyal police force. Since Horthy, who was slowly gaining in prestige, also distanced himself from his former supporters and close colleagues, Gömbös and his right-wing associates left the Unity Party on 2 August 1923 and founded a right-wing opposition Party of Racial Defence (Fajvédő Párt) which never succeeded in becoming an important political factor. It became intoxicated with 'Turanianism' (the fact that the ancestors of the Magyars had come from Asia) and established contacts very early on with other European fascist and National Socialist parties. Since, however, racism and a narrow-minded nationalism were also cultivated in the government camp, the right-wing opposition's ties with the Unity Party, which Gömbös rejoined in 1928, were never completely ruptured. The breakaway by the Party of Racial Defence resulted in a strengthening of the Unity Party's liberal-conservative wing. Even the left-wing opposition felt obliged to support the government party in its fight -- or rather shadow boxing -- against the radical Right.

During these years the political contours of Horthy's rule, which did not conceal its anti-liberal, authoritarian and dictatorial character, became increasingly apparent. Hungary's parliament, which had been substantially stripped of power and influence, was elected mainly by the members of a small upper class. The relatively small opposition could, it is true, voice its criticisms and demands and disseminate them through its own party newspapers; but it could not achieve their redress, since the government party had virtually gained absolute power over the legislature, executive and the judiciary. Bureaucratic practices and arbitrary police methods ran roughshod over a number of constitutional principles and democratic freedoms. The rapidly expanding state bureaucracy was a particularly important influence in its own right on government and represented a real power factor. Racist and chauvinistic slogans, which were closely bound up with aggressive revisionist and irredentist thinking, not only contributed to an overestimation of all things Hungarian and an unwarranted cultural arrogance, but resulted in a militant rejection of liberalism, democracy and socialism, all of which were viewed as 'alien to the Hungarian spirit'.

The Jewish population, in particular, but soon also the national minorities left within Hungary's new frontiers, had to suffer this Magyar intolerance. Although the fringe groups inspired by fascism lacked political influence, they were able to propagate their ideas openly and rely on the support of broad sections of the population, especially for introducing of antisemitic measures. It would be wrong, however, to describe Horthy's stable régime which came to power by means of the 'White Terror' as fascist, for, despite its anti-liberal, conservative-authoritarian political system, it never attempted to employ demagogic methods to mobilise the masses or, under the cloak of revolution, to overthrow the system which was still strongly feudal and aristocratic in character. The social and political order under Horthy could more readily be compared with that of Hungary's neighbours -- with the exception, of course, of the democratic Czechoslovak Republic.

Only the slowness of the economic recovery threatened the successful consolidation of political power. The government raised the expenditure necessary to expand the state, police and military apparatus by issuing unguaranteed banknotes, a measure which caused even greater inflation and ruined the country's finances.

Since the inflation helped the large-scale landowners pay off their mortgage debts more easily, they, like the industrialists, had little to say against the rapid increase in the money supply which hit the workers especially hard. The demand for manufactured goods combined with a ban on imports encouraged an inflationary boomperiod. Even so, industrial production figures for 1924 were still only 60 per cent of their pre-war level. The holding down of wages, the unavoidable lowering of living standards -- which made the workers even more discontented -- and the insurmountable problems of developing international economic relations made it imperative for the government ' to halt the inflation. When, in the spring of 1924, the conversion rate of paper crowns to one gold crown reached 16,300, Bethlen's government decided to act. The League of Nations was the only organisation prepared to make the necessary funds available for this financial operation.

Bethlen had already applied for Hungary to join the League of Nations in September 1922, and it formally joined on 31 January 1923. After some hesitation the government in Budapest was granted a credit on 2 July 1924 conditional on Hungary promising to fulfil the terms of the Trianon peace treaty. The loan, which amounted to 250 million gold crowns at a 7.5 per cent rate of interest on receipt of 88 per cent of the sum, was intended to bring about a rapid stabilisation of the currency and economy under the financial supervision of the League. At the same time, Hungary had committed itself eventually to paying back its share of the AustroHungarian Empire's debts to the tune of one thousand million gold crowns. Despite the high rates of interest and heavy burden of capital repayments, the following years witnessed a steady economic upturn which the government supported with a currency reform introduced on 1 January 1927. A new currency unit, the Pengö, was issued, equivalent to 12,500 paper crowns. The customs tariff already in force since 1 January imposed an import duty of 30 per cent, thus offering some protection for home industry which underwent particularly rapid growth in the textile, paper and leather industries while the important area of food production continued to stagnate. The value of production output in 1929 showed an increase of about 12 per cent over the figures for 1913. Compared with the USA's economic growth rate of 70 per cent and France's 40 per cent, Hungary made only very modest economic progress during the 1920s.

About 10 to 15 per cent of the workers, i.e. about 100,000 people, continued to be unemployed, even during the economic boom. The workers, who still worked a nine-hour day, earned real wages which still stood at only 80 per cent of their pre-war purchasing power. Their protests against social hardship and the suppression of political rights were clearly expressed in a wave of strikes which spread after 1926 and reached its climax in 1928 with a hunger march by mine-workers from Sálgótarján and Pilisvörösvár. The Communists, who were active underground, attempted to operate legally again by joining the defecting left-wing Social Democrats in the new Hungarian Socialist Workers' Party ( Magyarországi Szocialista Munkáspárt), founded on 24 April 1925 under the leadership of István Vági. The attempt failed, however, because the new party did not attract sufficient support from the workers despite its popular demands for a return to pre-war wage levels, the introduction of an eight-hour day, unemployment benefits, a system of progressive taxation and elections conducted by secret ballot on the basis of universal suffrage. The tough police measures taken in the autumn of 1925 and a show trial held in the summer of 1926, which resulted in Mátyás Rákosi, who would later rise to prominence, being sent to prison, meant an end to most Communist-influenced legal and illegal working-class activity.

Hungary's slow and uphill economic recovery continued to be financed by raising further loans. Only a fifth of the total amount borrowed was used for investment in manufacturing industry, about a half was allocated to capital and interest repayments and the rest used to fuel consumption. When, in 1929, the amount of outstanding payments exceeded that of the approved loans for the first time, the Hungarian economy, which had become so dependent on foreign finance, revealed the instability which was to render it incapable of surviving the turmoil of the world economic crisis in 1931.

During these years of modest prosperity the bourgeois liberal opposition hoped to put pressure on the Bethlen government to introduce at least a modest democratisation and a more liberal application of legal norms. The National Bourgeois-Democratic Party ( Polgári Demokrata Párt), whose chairman was Vilmos Vázsonyi (d. 29 May 1926), became the mouthpiece of the liberals, drawing its support from the liberal middle class and the Jewish petty bourgeoisie in Budapest, and fighting latent antisemitism which now employed racist arguments and economic discrimination against the Jews. But even when legitimist groups and the Social Democrats joined forces with the liberals to form a loose 'Democratic Bloc', Bethlen managed to hold his political opponents in check without much difficulty. His decree of 11 November 1926, which revived the feudal house of magnates as an upper house of the Hungarian parliament, helped him increase the government's majority in the prematurely held December elections, in which his government party won 60.1 per cent of the vote and 170 seats, thus condemning the opposition in future to political insignificance.

Equipped with wider legislative powers than in the pre-war period, the Upper House, as a result of its composition, helped guarantee the survival of Horthy's authoritarian reactionary régime. Comprising hereditary members of the upper aristocracy. Habsburg archdukes, delegates from the country's self-governing institutions, representatives of major pressure groups, members of the church hierarchy and prominent people from the upper bourgeoisie and the army nominated by Horthy, it also signalled the growing political influence of Hungary's traditional ruling class. The cult of the crown of St Stephen and the growing tendency to indulge in traditional rituals and the display of splendid and sometimes fantastic historical costume on ceremonial occasions testified to the Magyar desire to escape the unpleasantness of the present and identify with the historical greatness of the defunct Hungarian kingdom.

The realisation that the necessary consolidation of political power and the socio-economic order could be attained only with the aid of foreign capital persuaded Hungary's premier to respect the terms of the Treaty of the Trianon, at least in his dealings with other countries. He thought that the right time to pursue an active revisionist policy would be when Hungary, relying on a strong and modern army and on trustworthy allies, could overturn the status quo in the Danube area imposed by the Paris peace treaties. The noticeable restraint shown by the Hungarian government in supporting the vocal revisionist demands of all sections of the population no doubt stemmed from the belief that this was the only way to dispel the distrust of Hungary's neighbours and exhaust every possibility for securing a revision of the settlement as foreseen in Article XIX of the League of Nations' charter, whose economic assistance Hungary also wished to secure. But while the Bethlen government got to grips with measures to help the country's recovery, secret preparations were also undertaken to increase the size of the army beyond its manpower strength of 35,000 soldiers permitted under the treaty. As Horthy's prestige rose the longer he remained in office, his views on foreign policy increasingly influenced Hungarian diplomacy. These included rejecting any edrawing of the border according to ethnic criteria, restoring Hungary's pre-war frontiers and gaining a secure access to the sea. Horthy's offensive arrogance, with which, like so many Hungarians, he dealt with the politicians and peoples of Hungary's neighbouring states, viewing them as inferiors, certainly did not increase the prospect of a thorough revision of the harsh terms of the Trianon peace treaty.

Although Czechoslovakia was Hungary's only neighbour to make several vague offers in 1920-21 to redraw the disputed frontiers, and although its Magyar minority of around 1.06 million was doing relatively well economically, the Czechs and their foreign minister, Edvard Beneš, the architect of the Trianon treaty, were seen as the main obstacle to Hungary's revisionism. Because of the widespread existence in the 1920s of suspected pro-Magyar sympathies among the Slovaks and Ruthenes of what was formerly Upper Hungary, it appeared only a matter of time before the territories up to the Carpathian mountain range would be restored to Hungary and a common frontier with Poland thus gained. Hence Bethlen put no special emphasis on improving Hungary's political and economic relations with Prague, giving credence neither to Beneš's speeches before the League of Nations nor to President Masaryk's reconciliatory overtures. After it became known by chance that Magyar propaganda activity among the Slovaks and Ruthenes had been financed with excellently forged Czechoslovak banknotes, plans for a much more far-reaching operation to finance Hungary's entire revisionist policy abroad with forged French francs sanctioned by Bethlen and ex-premier Teleki, were suddenly revealed in early December 1925. Although the Czechoslovaks, Yugoslavs and especially the French were greatly outraged and an anti-Magyar mood to some extent prevailed, the European Great Powers had no interest in overthrowing Bethlen's government. The result was that the Democratic Bloc's demands to replace the Regent, the prime minister and senior police officials, as well as increasing parliamentary control over government affairs, proved unsuccessful.

In the case of Rumania, precise revisionist demands were not made at first, since there was initially no prospect of an amicable settlement concerning the return of Transylvania, whose loss was especially painfully felt. However, Bethlen still hoped to secure benevolent non-intervention by the Bucharest government, if a crisis over or within Czechoslovakia provided an opportunity of re-annexing Upper Hungary without risk. The blood-letting of land and people, which had benefited Yugoslavia -- so named after 1929, was something to which the Hungarians easily reconciled themselves, since Hungary's politicians hoped, with Belgrade's help, to break the iron ring of Little Entente states around Hungary created by Beneg as a result of King Charles IV's restoration attempts. This alliance, which posed a constant military threat, virtually ruled out even loose cooperation between Hungary and its neighbours. Since the dispute over Burgenland caused relations with Austria to remain tense for years and since contacts with Germany were initially limited to a dialogue between the Hungarian Right and circles around General Ludendorff on the prospects of overturning the status quo, Hungary was only able to break out of its diplomatic isolation to some extent when it joined the League of Nations on 18 September 1922 and took its seat in the General Assembly on 31 January 1923. Hungary's initially very close contacts with Poland had fizzled out after the failure to achieve a common border in Ruthenia and the signing of the Polish-Rumanian alliance treaty on 3 March 1921. It was not until May 1929, when the foreign ministers of the Little Entente states met in Belgrade, that the Polish foreign minister, Zaleski, visited Budapest and contributed to overcoming the foreign policy constraints on the Hungarian government with the signing of a friendship and arbitration treaty.

It was only the need to bring about the orderly return of Hungarian citizens from Russian captivity that resulted in the government in Budapest concluding three reparations agreements with the Union of Soviet Socialist Republics in 1920-21. These were followed on 15 July 1922 by an agreement on the exchange of political prisoners. Despite the government's tough antiCommunist line at home, an agreement establishing diplomatic and consular relations with the government of the Soviet Union was signed in Berlin on 5 September 1924. In view of the distrust felt by all of Hungary's neighbours, prime minister Bethlen did not find the courage to have this agreement ratified, nor to accept Soviet diplomatic representation in Hungary in the face of widespread general opposition at home.

In contrast, the Hungarians hoped for active Italian support for their revisionist demands following Mussolini's March on Rome in 1922. But as long as the Duce still competed with France for the support of the Little Entente states and hoped for eventual Italian domination of the Danube basin, he had no wish to reduce Italy's chances by openly siding with the Hungarians in their disputes. Only after relations between Budapest and Belgrade had been sufficiently normalised in 1926 for Bethlen to offer the Yugoslavian government a friendship and non-aggression arbitration pact -- and the Yugoslavs after lengthy negotiations had rejected closer relations with Hungary -- did Mussolini come out into the open. By a 'Treaty of Friendship and Cooperation', signed in Rome on 5 April 1927, Hungary acquired a valuable ally, while Mussolini was able to strengthen the Italian position in the Danube basin and further his Albanian policy, now directed against Yugoslavia.

The press campaign in support of Hungary's revisionist demands, launched in June 1927 by Lord Rothermere in the Daily Mail under the headline 'Justice for Hungary', caused great enthusiasm in Hungary and encouraged the hope of achieving at least partial success in obtaining the return of the lost territories inhabited by Magyar majorities. Alongside the intensified activities of the reorganised Hungarian Revisionist League ( Magyar Revízíos Liga), at first supported by 101 economic and social organisations, but soon by over 500 corporate bodies, county administrations and towns, the government concentrated on cultivating foreign diplomatic, artistic and academic contacts in the interests of achieving a revision of the treaty. This enthusiasm, which Mussolini's encouraging declarations aroused still further, caused the increasingly anxious foreign ministers of the Little Entente states to agree on 21 October 1929 to renew automatically every five years the mutual alliance treaties chiefly directed against Hungary and to instruct their general staffs, who agreed on regular consultations, to prepare all measures necessary for combined military intervention in Hungary or Bulgaria. Although Hungary, which since 1927 had violated more deliberately and frequently than ever the treaty's military clauses, had signed a secret military agreement with Italy and come to an arrangement with the opposition Croat leader, Maček, the Hungarian army would not have been capable of resisting a combined operation by the troops of the Little Entente states. Thus, a full ten years after the war, when the world economic crisis which also affected Hungary began to undermine the social and economic consolidation thus far achieved, the Bethlen government had still failed to make any progress with its revisionist policy.

After the First World War the technical innovations which had spread slowly but surely in Hungary ensured that most towns were connected to 'a water supply and provided with a sewage system, electricity supply and telephone system. The countryside, however, was almost entirely bypassed by these developments. By 1939, two-thirds of Hungary's villages still had no electricity. Thus, the cinema boom after the advent of 'talkies' and the expansion of national broadcasting for the country's 400,000 available radio sets were developments restricted to the towns. Hungary's highly developed newspaper industry, concentrated mainly in Budapest, figured little in the lives of the poor peasants and rural labourers, since almost a million adults were still illiterate. After 1926, the long-serving minister of education, Count Kunó Klebelsberg, was responsible for the fact that some 5,000 classrooms were established in rural areas along with accommodation for teachers. However, despite his orders that adherence to the principle of six-years' compulsory elementary education should be more strictly monitored, approximately 10 per cent of children of school age were still able to avoid schooling. Also, most children from peasant and working-class families left school after four or at most six years and could only exceptionally enter and complete a secondary school education which involved great material sacrifice and numerous difficulties. Legislation belatedly passed in 1934 and 1938 tried to standardise the educational system by merging the grammar schools with those secondary schools placing more stress on technical and vocational subjects. During the school year of 1937-38 only 52,000 pupils were taught in grammar schools or in secondary vocational schools. There was no properly developed system for vocational training, with the result that apprentices were entirely subjected to the conditions laid down by employers. Of the 11,700 students attending universities and institutions of higher education, only 2.7 per cent came from peasant and working-class families. In the 360 or so schools for national minorities, subjects with a national bias like history, civic studies and geography were taught in Hungarian. Other subjects were taught in the vernacular, whether German, Slovak or Serbo-Croat.

Cultural activities encouraged by the state also remained tied to the traditional conservative outlook of Hungarian society. Literature was especially dominated by the superficial popular novels of writers like Ferenc Herczeg or Zsolt Harsányi as well as reactionary and nationalist writings which avoided tackling the subject of social tensions. After the overthrow of the Soviet Republic many committed writers and academics emigrated, although they stuck to the problems of Hungarian society in their choice of themes. The literary circle centred on the newspaper Nyugat ( The West), which had already been influenced by bourgeois-democratic ideas at the turn of the century and which included Gyula Juhász, Árpád Tóth, Mihály Babits and Zsigmond Móricz, lost much of its fighting spirit in the Horthy era, although it continued to attempt a critical, realistic portrayal of Hungarian society and painted an unflattering picture of the social misery and material distress of village life. Under this influence, the popular, or so-called 'village writers', took up the peasants' demands for an extensive programme of land reform and state aid. Their scholarly based and convincing portrayals, like Imre Kovaćs "'The Silent Revolution'" or Géza Feja "'Thunderstorms'", were banned and the authors imprisoned on charges of inciting hatred of the great landowners, campaigning for social revolution and damaging the prestige of the state and society. The works of writers close to Communism, like the powerful poetry of Attila Jószef or academic works such as those of György Lukács, were banned from publication in Hungary. The composer, Béla Bártok, eventually chose to emigrate rather than suffer the increasingly reactionary cultural climate.

In Trianon Hungary 62.8 per cent of the population belonged to the Catholic Church, a fact which allowed its bishops to exert considerable political influence. The leading politicians of the interwar period, like Horthy and Bethlen, were, however, Calvinists, who, together with members of the other protestant churches, accounted for only 27.8 per cent of the population. Of the remainder of the population 6.2 per cent were professing Jews and 2.2 per cent were Catholics who observed the rites of the Greek Uniate Church. One per cent of the population belonged to other religious groups. Although Catholicism was no longer the established religion, the Catholic Church and clergy, operating within the ethos of a Christian and national state and society, stood solidly behind the policies of the Horthy régime and had no reservations about supporting its revisionist policies. The industrial workers, however, were largely alienated from practising religion. The number of baptised Christians who did not attend church regularly rose rapidly, although it was still the practice, even in the towns, to attend church on major holidays and personal or family occasions such as christenings, confirmations, first communions, weddings and funerals. Thanks to its large press, which included 13 daily newspapers and 33 weeklies, its landed property of some 5,400 square kilometres and its strong support in the countryside, the Catholic Church was able to resist the process of secularisation more successfully than the other denominations. This was due not least to the efforts of Cardinal Archbishop Dr Justinián Serédi who, as Primate of Hungary, also exercised certain state functions. The son of a carpenter, co-author of the revised version of the book of Canon Law, Codex Juris Canonici, and reluctantly appointed head of the Hungarian clergy, he constantly kept his distance from the Horthy régime and knew how to use his moderating influence, especially during the Second World War and the persecution of the Jews.

The period of political consolidation, which was accompanied by a slow but steady rise in economic prosperity and the hope of achieving a revision of the Trianon treaty by peaceful means in accordance with Article XIX of the League of Nations or by agreement with Hungary's Little Entente neighbours, was abruptly interrupted by the world economic crisis and the ensuing internal conflicts and deteriorating international situation. It soon became clear that Hungary had to seek a closer relationship, both military and economically, with one of the Great Powers with interests in the Danube basin. Because of its strategic position Hungary was to assume an exceptional importance for the expansionist foreign policy of the Third Reich. Increasing economic, political and military contacts with Germany brought the country more and more into the orbit of Nazi Germany and also led to a far-reaching transformation of its socio-economic and political structure.



The effects of the world economic crisis

Black Friday', the day when the New York stock exchange crashed on 24 October 1929, had an immediate effect on the system of international loans and ushered in a world economic crisis of considerable proportions which resulted in all payments under the system being stopped. Hungary was, of course, affected by the recession and in 1931 was plunged fully into the economic turmoil. The drastic fall in the price of agricultural produce was bound to hit Hungary particularly badly, given that the majority of its population still earned its living from agriculture and agricultural produce remained its chief export. Although the price of wheat dropped from 33 pengö per quintal to only 9, Hungarian wheat still found it difficult to find a foreign market. Small farmers, in particular, who had taken on loans to modernise or enlarge their holdings, could no longer find the money to repay their debts and shoulder increased tax burdens. Many were ruined as a result of the forced sale of land which now began to be auctioned. Some 60,000 farms of under 2 hectares were affected. Over half a million rural labourers were made destitute and a further half million forced to hire their labour for starvation wages which were inadequate to feed their often large families. Despite an unexportable surplus of agricultural products, many people in the countryside starved and perished. The towns suffered equal hardship. Industrial production fell on average by almost a quarter: 15 per cent of Hungary's factories ceased production and 30 per cent of the labour force was laid off. The unemployed found themselves in a miserable condition, since there was no provision for unemployment benefit or public assistance. The rest were forced to accept painful wage cuts and longer working hours. State employees had similarly to accept salary reductions and dismissals. As a result, graduates entering the job market were joined in suffering extreme hardship by 2,500 unemployed teachers and 2,000 engineers without work, despite government-sponsored retraining schemes. From 1932 onwards, the general decline in living standards also began to affect small tradesmen and retailers, many of whom were forced to close down or sell their businesses.

At first the Bethlen government tried to overcome the financial crisis by arranging further foreign loans. This was only made possible by the scaling down of Hungary's reparations debts in January 1930, which was intended to make 10.4 million gold crowns available annually up to 1944 and, thereafter, 13.5 million annually up to 1966. Hungary's foreign debt, which at that time had already reached the astronomical sum of 1 billion US dollars -- an amount which already exceeded the national income of the economically buoyant year of 1928 and comprised mainly short-term loans, could no longer be repaid owing to a shortage of foreign exchange and rapid decline in export earnings. The situation grew worse when some of the loans were prematurely recalled after the collapse of the German banks and the payments moratorium by the Austrian Creditanstalt on 11 May 1931. The bankruptcy of the country's largest bank, the Hungarian General Credit Bank, was only narrowly averted. The National Bank, which had been rescued only a few years previously with the aid of the British finance, now found itself on the verge of collapse.

After accepting the Hague agreements in 1930 the government tried to divert people's attention from the deplorable economic and financial situation by holding nationwide rallies and employing nationalist appeals and revisionist slogans, but was helpless at preventing demonstrations for work and bread which were held increasingly after 1 September and resulted in serious riots involving death and injury as a result of tough police intervention. It also failed to re-establish political stability, despite proclaiming martial law. The three major interest groups, the great landowners, the upper bourgeoisie and the state bureaucracy, upon which István Bethlen's government primarily depended for its support, also increasingly pursued their members', sectional interests and advocated changing the former economic and financial system at the expense of their erstwhile partners. The representatives of the wealthy and middle-ranking peasants left the government party and founded the Independent Party of Smallholders (Független Kisgazdapárt), led by Bálint Szijj and Zoltán Tildy, in Békés on 13 October 1930. Bethlen indeed managed to prevent any fundamental change to the composition of parliament when he again called elections for June 1931, winning 45.3 per cent of the vote and 158 of the 245 seats for his Unity Party. However, because the financial crisis, whose effects became very apparent on 14 June, made it necessary to impose a partial moratorium and pass an enabling law for financial cuts in July, the premier felt obliged to tender his government's resignation to the Regent on 19 August 1931. In view of the deepening social divisions, the hopeless economic situation and the threat to the whole political system. Bethlen wished to 'withdraw from circulation' in order, as he put it, 'to be able to maintain and ensure the survival of the system I have created'.

Horthy now appointed the conservative Count Gyula Káirolyi as Bethlen's successor on 22 August 1931. Károlyi saw no alternative but to appeal to the League of Nations for fresh help in putting Hungary's finances in order. Thanks to French financial assistance the collapse of the state finances was averted in return for Hungary calling a halt to its revisionist propaganda and fulfilling its financial treaty obligations. A repayments moratorium, approved in December 1931, offered a degree of protection for the currency, although it failed to tackle the country's real economic difficulties effectively. When the government hesitated in meeting the demands of the great landowners and the new Independent Party of Smallholders both of whom opposed radical land reform but wanted more subsidies for the farming sector and agricultural exports, Károlyi, who generally sought to follow the same policy as his predecessor, aroused the enmity of the agricultural lobby. The strict financial retrenchment meant that even state employees were forced to accept further salary cuts and therefore felt impelled to maintain their distance from the new government, especially since they were convinced that the haute bourgeoisie of mainly Jewish origin would continue to enjoy its privileged position. Budapest's rejection of the plan for a German-Austrian Customs Union ( Schober-Curtius Agreement) -- which signalled France's growing influence in Hungary -- and its promise to consider positively the Tardieu plan, proposed by the French government on 1 March 1932 to help east central Europe's financial recovery, aroused opposition from financial and commercial circles. The restrictions on the Hungarian government's freedom of action, as demonstrated by its stifling of revisionist propaganda, infuriated the nationalist pressure-groups, who never tired of laying the sole blame for the effects of the world economic crisis on the unjust peace treaty.

Hungary's political and social tensions grew so acute in the summer of 1932 that a strong faction within the government party turned against Károlyi. After the prime minister's dismissal on 21 September Horthy had to bow to the pressure of public opinion and appoint the former defence minister, Gyula Gömbös de Jáfka, to take over the government on 1 October 1932. This old trusted colleague of Horthy, who had been involved in Hungarian politics from the time of the counter-revolutionary Szeged government, held views that were both anti-Legitimist and hostile to the privileges of the upper aristocracy. Since he also held openly antisemitic views, he could be seen as a representative of the selfconfident new middle class which was gaining ground at the expense of the old ruling élite and the Jewish bourgeoisie. Gömbös, who thought in military categories and was the first Hungarian politician to describe himself publicly as a 'Hungarian National Socialist', had developed a foreign policy strategy which centred on German, Italian and Hungarian cooperation in the framework of an 'axis of fascist states'. Germany appeared to be the only partner in such an alliance, which would be willing and able to break Hungary's encirclement by the Little Entente and France's dominant influence in east central Europe. He was well aware of the dangers involved in helping establish German dominance in the Danube basin, but believed he could create a counterweight to this by involving Italy and, hence, lay the basis for a thorough revision of the post-war settlement. With a certain amount of naiveté and political wishful thinking he was convinced that Hungary could regain its historic frontiers with the help of its powerful allies, involving only very slight risks. For this reason he utterly rejected any notion of compromise or agreement with the governments of the Little Entente, as had been mooted in Hungary at the beginning of the 1930s.

As the former organiser of the armed counter-revolutionary squads and right-wing radical groups during the period of the Soviet Republic, Gömbös was extremely popular with the officer corps and many members of the bureaucracy. His extreme patriotism, undisguised aversion to democratic liberal ideas, hostility towards the workers and hatred of left-wing radicalism made him acceptable to the aristocratic ruling élite, although he made no secret of the fact that his ultimate aim of breaking open the anachronistic structure of Hungarian society for the benefit of the new middle classes. The results of the 1930 census had revealed that of Hungary's population of 8.7 million, the majority, i.e. about 4.5 million, still earned their living from agriculture. Half of the country's land under cultivation still belonged to the 7,500 owners of large estates. The vast majority of the rural population, i.e. the 1.2 million holders of dwarf farms, 600,000 farm labourers, employed mainly on large estates, and 1.2 million day-labourers -- in all, more than a third of the population -- scratched a bare living from the soil and lived in constant uncertainty. While the number of industrial workers and small tradesmen -- around 650,000 people in 1930 -- had been drastically reduced as a result of the world economic crisis, they already contributed substantially to the national income. When Gömbös announced his 'National Work Plan' of ninety-five points with an unusual energy for Hungarian politics, skilfully manipulating the press and radio, he seemed to be trying to accommodate the wishes and demands of all sections of the population. He proposed land and tax reforms, generous loans and concessionary arrangements for repaying agricultural debts, the stepping up of agricultural exports and the creation of new jobs, the holding of secret elections and the introduction of social legislation which might almost be described as progressive. However, his recipe for the advent of the 'new millennium' and the dawning of an 'age of reform' scarcely disguised his real aim of establishing a fascist-style dictatorship in Hungary.

When Gömbös tried to implement his programme for creating a fascist 'Greater Hungary', he was confronted by a country which was utterly exhausted economically. The population was disappointed and disheartened at the lack of success of the decade-long campaign for a revision of the country's borders. The economic crisis, which had resulted in mass unemployment, the loss of many civilian and government jobs and a bleak future for the country's youth gave added impetus to a mood in favour of genuine revolutionary change. At the same time, it forced Gömbös to steer a cautious and restrained course in both domestic and foreign policy. New members of the plebeian middle class, who shared his ideas and immediate aims, were deliberately placed in key positions in politics, the administration and the army. By creating an organisation of some 60,000 'vanguard fighters' he tried to create a mass basis of support for the government camp, which had by now been renamed the Party of National Unity (Nemzeti Egység Pártja). An attempt was even made to incorporate the workers by creating a labour section in the party. New government newspapers like the Függetlenség (Independence) andUj Magyarság ( New Hungary), the creation of an efficient propaganda machine, the merging of the state apparatus with the party organisations and the establishment of strict controls over public opinion ensured that Gömbös' policies found support, despite the growing opposition of the old ruling élite, some sections of the middle class, some workers and the rural proletariat. In particular, his vociferous attacks on the aristocracy and the plutocracy, on Jews, foreigners, Social Democrats and Communists, who were accused of either obstructing radical reforms at home or promoting chaos and the collapse of national values, were widely shared and attracted many new members into the Party of National Unity.

Hungary's various groups of right-wing radicals, who had been previously very active but never particularly united, and who suffered major fluctuations in membership, felt that Gömbös's programme was an endorsement of their views. The National Socialist Hungarian Workers' Party, founded in December 1931 by the journalist Zoltán Böszönnényi, which later became known as the Scythe Cross movement (Kaszdskeresztes Mozgalom), concealed its rabid antisemitism and extreme nationalism behind its social aims. Its urgent demands included the nationalisation of estates of more than 250 hectares, state-promoted job-creation schemes, and, especially, the exclusion of all 'non-turanic-aryan elements' from important posts, together with the restoration of the country's pre-1914 frontiers. It also demanded that the country rid itself of Jewish profiteers' who were blamed for the misery which had befallen the population. Other fascist groups like the Hungarian National Socialist Party (Magyar Nemzeti Szocialista Pdrt) founded in 1932 by Count Sándor Festetics, or the United National Socialist Party (Egyesiilt Nemzeti Szocialista Párt), created by Count Fidél Pálffy in 1933, tried to gain the support of the rural and urban middle classes, drawn from the gentry, who had been -- especially hard hit by the economic crisis through the use of Christian, agrarian, antisemitic and nationalist policies. The Party of the National Will ( Nemzet Akaratdnak Pdrt), founded by Ferenc Szálasi on 1 March 1935, which eventually came to encompass a broad spectrum of the many right-wing radical splinter groups, was to play a greater political role only after 1937. Although the illegally active Hungarian Communist Party was still barely capable of continuing its activities after the execution of its underground leaders, Imre Sallai and Sandor Fürst, on 29 July 1932, and the Social Democrats, despite their, by 1934, 85,000-strong membership, were increasingly subjected to government pressure, Gömbös failed to emasculate the trade unions, to set up a corporate state or effectively to ban strikes, which kept breaking out as a result of adverse economic and social conditions.

G ömbös's rigorous measures, which proved only moderately successful, provoked the opposition of ex-premier Bethlen and his conservative liberal supporters. When the economy began to revive after 1934, they recommended a return to traditional government principles and wanted to place Gömbös, who was ruling with increasing self-glorification and promoting the creation of a one-party state and dictatorship, once more under their control. Personal disagreements which had already surfaced in the 'twenties between Gömbös and Bethlen now re-surfaced and further heightened the tensions already present in the government party. On 5 March 1935, Gömbös suddenly dissolved the Lower House in order to pre-empt opponents within his own party who were preparing his overthrow with the help of the parliamentary opposition. His opponents were deliberately passed over when candidates were nominated for the coming elections which were called at short notice. The election held on 11 April 1935, which witnessed a far greater degree of the usual rigging, intimidation and influencing of voters, produced a distinct swing to the Right. With 43.6 per cent of the vote and 170 seats Gömbös could count on a majority of the deputies, who were drawn mainly from ex-officer circles, the gentry, civil servants and middle-ranking landowners. Two representatives of National Socialist groups also took their seats for the first time in the Hungarian parliament. His promise, given on a visit to Berlin in September 1935, that he would introduce to Hungary within two years a one-party system and political order modelled on Germany came to nothing after his unexpectedly premature death in Munich on 6 October.

Despite the grand aims of their political programmes, Gömbös and his successors scored only very modest successes with their agricultural and industrial policies. The rural population which had been won over by promises of sweeping agrarian reforms had its hopes of a generous land reform dashed. A three-year moratorium on debt repayments benefited only a relatively small number of peasants. A law on entailed estates, modelled on that introduced by the National Socialists in Germany, represented the Hungarian variant of legislation regulating land inheritance. From 1928 onwards, students had pointed with growing emphasis to the unavoidable need for further agrarian reforms in association with the so-called 'Village Research Programme', an area in which the leading Catholic student association, Emericana, and the protestant Christian student federation, Pro Christo, had been active in Szeged on a non-denominational basis. Despite the bishops' lack of interest, young priests also participated in discussions on the situation of the impoverished rural population, the majority of whom lived in simple mud and clay huts with stamped earthen floors, shared with animals under one roof. In such circumstances tuberculosis was rampant and claimed over 10,000 victims annually. After demands were made for the expropriation and redistribution of estates of more than 250 hectares during a demonstration outside the Hungarian National Museum in Budapest on the national holiday of 15 March 1934, the government felt obliged to act: Gömbös had the parliament pass a land settlement law which earmarked the great landed estates of 200,000 hectares, i.e. around 8 per cent of the area of the latifundiae, for redistribution to 37,000 families over a period of 25 years. On payment of a quarter of the purchase price the peasants were to be given 47 years to pay off the remaining debt. Also, in cases of compulsory purchase the government wanted in future to be able to acquire the land in advance and then lease it to its previous owners. Although the nationalist Youth Federation,Turul (The Eagle), which was given financial backing by the great landowners and tended to belong to the right of the political spectrum, denigrated the populist 'village researchers', who were supported by the Left, as Communists and Jewish hirelings', the bishops felt obliged to hold the National Catholic Day of 1936 under the slogan 'Christ and the Hungarian Village'. The idea of land reform was not supported in church circles, only improved social welfare for the rural poor, of whom on average some 130,000 rural labourers had no guaranteed income. The dwarfholding peasants, for their part, could not produce a sufficient surplus to feed themselves. Even somewhat improved economic conditions shortly before the outbreak of the Second World War could not prevent the fact that average daily earnings in 1938 were between a third and a quarter below their level prior to the world economic crisis.

Although the slow onset of economic recovery after 1934 was accompanied by a rise in the number of people employed in industry and the workers' situation began to improve, unemployed rural workers willing to migrate to the towns rarely found a regular source of income. Hungary was the last European country to introduce the eight-hour day. The introduction, very late on, of legislation on workmen's protection, the guaranteeing of minimum wages and family allowances did at least provide employees with more social security. But real wages in 1938 were still 10 per cent below their level for 1929. Although governments in the latter half of the 1930s tried hard to win the support of the rural population and the workers by means of liberal-inspired social legislation, the economic, social and cultural conditions of the lower classes in Hungarian society remained behind the rest of east central Europe in 1939. The great landowners, in contrast, had known how to prevent the success of any measures designed to reduce the size of their estates. In 1938, over 10,000 square kilometres of cultivable land was still owned by only 80 magnate families; a further 16,000 square kilometres was in the possession of 1,000 smaller estate-owners. The process of concentration in banking had contributed to the fact that the Hungarian General Credit Bank and the Hungarian Commercial Bank of Pest ultimately controlled 60 per cent of Hungarian industry. The country's economy was, in fact, controlled by a handful of families. The direct influence of foreign capital did decline after 1934, but closer foreign relations with Germany greatly increased German economic dominance and contributed greatly to the continuing growth of Hungary's dependence on Germany, especially after the annexation of Austria and the incorporation of Czechoslovakia into the Reich.

The opening up of the German market to Hungarian agricultural produce, which was having difficulty finding an outlet, gave Hitler the opportunity to establish a stronger political foothold in Hungary. While only 11 per cent of Hungary's exports had been sold to Germany in 1930, the figure had already risen to 24 per cent by 1937. By spring 1939, almost 50 per cent of Hungary's total exports were sold to German customers. As regards Hungary's own imports, the proportion of German goods rose from 20 per cent to 26 per cent. By the summer of 1939 half of all the foreign capital invested in Hungary was controlled by German interests, and German banks held about 14 per cent of the shares in Hungarian industry. The prime minister at the time, Count Pál Teleki, was right when he remarked that 'the German Reich has such a major and extensive stake in our country that it is able to control, and to a certain degree influence, the entire Hungarian economy'.


Hungary and the Third Reich

Before Hitler came to power German-Hungarian relations had been of secondary importance for both states. The idea that both countries had a 'shared destiny' from the time of the First World War was occasionally spoken of with a certain pride. Both had been involved in a common struggle, both had rejected the terms of the Paris Peace Treaties and both felt they had been encircled by victorious neighbours and barred from revising what they perceived as unjust peace terms. But the Hungarians' narrow-minded nationalities policy, which gave rise to latent tensions between over half a million ethnic Germans and the Hungarian government, soured relations between the two countries during the period of the Weimar Republic. Further complications also inevitably arose after 1933, when the leaders of Hungary's German minority began to receive financial and political support from the Reich, became increasingly self-confident and Hitler claimed to be the acknowledged leader of all Germans. Gömbös's willingness to secure Hitler's friendship and his efforts to realise his original concept of an international fascist axis alongside the pursuit of Hungary's economic interests, was a stroke of good fortune for Hitler at a time when Germany was isolated in foreign policy. In March 1933, ex-premier Bethlen was able to explain Hungary's revisionist aims in detail to the Führer and Reich Chancellor and other leading German politicians, before Gömbös himself, in a surprise visit to Berlin on 16 and 17 June 1933, outlined to Hitler his vision of a cooperation pact between Italy, Austria, Germany and Hungary aimed at achieving economic autarky and serving as a counterweight to political domination by France and her alliance partners in the Little Entente in the Danube Basin. But Hitler's basic dislike of the Magyars and Germany's stronger interest in forging closer ties with Rumania and Yugoslavia initially hampered the development of German-Hungarian relations. Even though they both opposed revisionism, Rumania and Yugoslavia were more important potential allies because of the importance of their natural resources for the German economy.

Hence, Gömbös and his foreign minister, Kálmán Kánya, who became the driving force behind Hungary's revisionist policies after his appointment on 3 February 1933, developed closer contacts with Italy, especially since Mussolini was more than willing to promise his help in achieving success for Hungary's revisionist campaign. It was largely thanks to moves by Gömbös that Rome and Vienna agreed to closer cooperation in early 1933, an agreement which clearly warned Hitler not to attempt the annexation of Austria. The Hungarian general staff was, in fact, very pro-German in its sympathies, since Germany's support was seen as indispensable for secretly rearming Hungary and obtaining arms supplies on credit. However, the fear that Germany, whose influence on Hungary's German minority was causing growing anxiety, would become a powerful immediate neighbour if Austria were annexed, led politicians of all shades of opinion to call on the government to maintain a cautious, non-commital approach in foreign policy. There were also a number of ideological stumbling blocks. Extreme reservations were felt towards the adoption of National Socialist racialist ideology. The clergy and intelligentsia advocated that, in the case of Jews, legal norms should be strictly adhered to despite the revival of antisemitism. The programme of a 'Hungarian National Socialism', which Gömbös advocated with growing passion, encountered opposition from the liberal wing of the government camp led by the interior minister, Miklós Kozma. As a result of these objections Gömbös had to adopt a cautious policy.

Although the Hungarian government tried to avoid a head-on collision with the interests of the Entente Powers, and demanded only a recognition of Hungary's equality of rights instead of insisting on a minimal acceptable revision programme, the increased activities of the Austrian National Socialists forced Gömbös to adopt a clear position in the Rome Protocol, signed on 17 March 1934. Although this consultative pact between Italy, Austria and Hungary -- to which economic clauses were added on 14 May 1934 -- was of no great political significance, it was intended as a warning to Hitler. Following the attempted National Socialist coup in Vienna and the murder of the Austrian Chancellor, Dollfuss, on 25 July 1934, German-Hungarian relations reached an all-time low. The new organisational statute of the Little Entente states of 16 February 1933, encouraged by France to come closer together as a result of increased German diplomatic activity in the Danube area, the Balkan League of 4 February 1934 and the plans of the Czech foreign minister, Beneš, for a Danubian Confederation forced Hungary to look for other partners willing to support its revisionist aims.

After a period of formal, though lukewarm bilateral relations with Hungary, Poland, which under its dynamic foreign minister, Beck, proposed the idea of a 'Third Europe' as a bulwark against Bolshevism and a barrier against an expansionist National Socialist Germany, expressed an interest in establishing closer cooperation. Neither Warsaw nor Budapest greeted the idea of an Eastern Pact, proposed by the French foreign minister on 27 June 1934, with undivided enthusiasm. Although Hungary had established full diplomatic relations with the Soviet Union on 4 February 1934, the USSR's entry to the League of Nations on 19 September caused anxiety in both Budapest and Warsaw. The assassination of the French foreign minister, Barthou, and King Alexander of Yugoslavia in Marseilles on 9 October, which provoked the unfounded accusation that Hungary had been involved in the murders and strained Hungary's relations with its South Slav neighbour to breaking-point, illustrated the importance of finding a new ally for the Gömbös government, especially since discussions in Austria concerning a Habsburg restoration also encouraged Hungarian royalists and aroused fears of foreign policy complications. For this reason, Gömbös proposed an alliance to the ageing Marshall Pilsudski on a visit to Warsaw between the 19 and 22 October 1934 in return for no more than a promise that Poland would never take up arms against Hungary but instead use its best endeavours to prevent Rumania from participating in any punitive action by the Little Entente against Hungary.

When after the visit of the new French foreign minister, Pierre Laval, to Rome on 7 January 1935 Franco-Italian differences could be regarded as settled, and Mussolini joined the anti-revisionist powers for a time, the Hungarian government felt obliged to make a concession to the successor states. Acknowledging the improved treatment of the Magyar minorities it offered to conclude non-aggression pacts with its neighbours. However, the members of the Little Entente were not prepared in the slightest to change their position towards Hungary. The signing of mutual assistance pacts between France and Russia and Czechoslovakia on 2 and 16 May 1935 respectively worried the Budapest government so much, that more feelers were again sent out to Berlin -- despite the fact that signs of closer cooperation between Germany and Yugoslavia in November 1934 had caused serious concern in Hungary. Since the foreign ministers of the Little Entente states had completely rejected Hungary's claim for military parity, a peaceful revision of the post-war settlement and improved protection for minorities at their conference in Bled on 29-30 August, the idea of creating a Danubian Confederation which would include Hungary had also become remote. Thus, after the legal position of Hungary's German minority had been improved, Gömbös met Hitler for a second time on 29 September 1935 to decide the future course of Hungarian foreign policy.

German opinion felt that Budapest should drop its revisionist demands towards Rumania and Yugoslavia in favour of concentrating exclusively on Czechoslovakia. A German loan of 100 million Reichsmark was granted on condition that the Hungarians order German artillery, anti-tank weapons and heavy Mörser artillery to supply the Hungarian army. Gömbös was also given the prospect of the return of the Burgenland if Germany annexed Austria. After Italy invaded Abyssinia on 3 October 1935, he was also able to depend once more on Mussolini's support of Hungary's revisionist aims.

During the hectic year of 1936, when Germany's reoccupation of the demilitarised Rhineland and the outbreak of the Spanish Civil War heightened European tensions and the signing of the German-Italian treaty on 25 October strengthened the claim of the 'Rome-Berlin Axis' to dominate east central Europe, Gömbös, on Hitler's instructions, attempted a rapprochement with Yugoslavia. However, the latter was still so closely bound to the Little Entente that it had no wish to pursue its own independent policy. On Horthy's first visit to Germany on 22 August 1936, Hitler again suggested that he should secure Rumanian and Yugoslavian goodwill, for once Germany had rearmed the Führer would force an agreement with Czechoslovakia by means of massive threatening gestures. However, the unexpected death of Gömbös on 6 October, who had not enjoyed Horthy's full confidence during his last months in power, and the appointment of the dull and undistinguished civil servant, Kálmán Darányi, as his successor on 10 October 1936, advised restraint in Hungary's foreign policy. A series of domestic political issues, such as electoral reform, extending the Regent's powers, measures to deal with unemployment, the implementation of land reform and anti-Jewish legislation demanded urgent attention. Also, the mistrustful Kálmán Kánya was increasingly less prepared to tolerate interference in the conduct of foreign policy. Dissatisfied with Hungary's growing dependence on the Reich and the danger of war, deliberately cultivated by Hitler, he had no desire to place all his bets on Germany.

While Darányi, backed by the conservative magnates and economic interests, reverted to Bethen's methods in trying to promote consensus within the government and cooperating more closely with the Smallholders and even the Social Democratic Party, foreign minister Kánya, faced with the consolidation of fascist and national socialist forces, again sounded out the Little Entente states on their willingness to reach an understanding. However, since the successor states rejected his proposal to link a non-aggression pact, which the government in Budapest keenly desired, with the complicated minorities problem and a complete acknowledgement of Hungarian military parity, plans for a Danubian Federation -now pursued especially by the Czechoslovak prime minister, Milan Hodža -- had no chance of being realised because of their complete rejection by the Magyars. German gestures, such as the -- hardly seriously intended -- offer to the Czechs of a non-aggression treaty or a guarantee of Rumania's territorial integrity, caused as much annoyance in Budapest as the direct Hungarian-Czechoslovak talks in the early summer of 1937, discreetly promoted by the Austrian government, caused in Berlin. Sensing that Hungary was being manoeuvred into a dangerous collision course against Czechoslovakia without sufficient moral and diplomatic support from Germany and Italy, Kánya went all out for an agreement with the member states of the Little Entente in the autumn of 1937. However, by October the optimistic negotiations which began in late August had failed to produce any concrete result. For Kánya and the forces around Count Pál Teleki and Béla Imrédy, Gömbös's former finance minister and current president of the National Bank, this also meant the failure of the stratagem of arousing the British government's interest in the Danube area in order to stem Germany's constantly growing influence.

Although Darányi's government, which made little progress in solving the nation's urgent internal political problems, felt alienated by Hitler's methods and the risks he took in his power politics, and would rather have seen Hungary's revisionist demands settled at a conference guaranteed by the Great Powers, it had to follow Germany's course completely in November 1937 in view of its own past lack of success. Hitler, who told his small circle of associates on 5 November of his 'unalterable decision' to smash Austria and Czechoslovakia, 'at any time, even as early as 1938' and even at the risk of a possible war on two fronts, went on later that same month - on 25 November -- to reveal to a government delegation led by Darányi the role to be allocated to Hungary. Although the Hungarians were prepared to come to terms with Germany's possible annexation of Austria in the hope of regaining the Burgenland as far as the river Leitha, Austria's invasion by German troops on 11 and 12 March 1938 took the Darányi government completely by surprise. Disappointment at the invasion was all the greater when, despite messages of congratulation and gentle persuasion, Hitler showed no desire to part with the Burgenland as a gesture towards providing Hungary with its first concrete revisionist success. German reluctance to agree to cooperation between the two general staffs and guarantee Yugoslavia's noninvolvement in the event of a conflict with Czechoslovakia increased Hungarian uncertainty. However much they desired the return of Upper Hungary, Slovakia and Ruthenia, the majority of Hungary's politicians, including Horthy, who was intervening increasingly in everyday policy, perceived a threat to Hungary, if, following Bohemia's incorporation into the Reich as a German protectorate. Hitler would exploit fully his increased opportunities to influence events in the Danube region. The upright conservative, Darányi, was not regarded as the right politician to be capable of maintaining unity between the existing factions in the government camp in the event of an external threat or of stemming the danger from the forces of the extreme Right which now began to group around Ferenc Szálasi, the leader of the Party of the National Will. Szálasi, a staff officer, who had retired from active service with the general staff, set out as his party programme the aims formulated in his book Cél és követelések (Goal and Demands). Characterised by a militant antisemitism, their only originality lay in the suggestion of creating a federal state to bring all the peoples of the Carpathian Basin together under Hungarian leadership (a solution he termed 'conationalism'). After visiting Germany in the autumn of 1936 Szálasi stepped up his campaign among the urban population, in particular the industrial workers. He was consequently arrested in April 1937 and his party dissolved. In the following summer László Endre founded the Racial Defence-Socialist Party, which was intended to be a broadly based right-wing party. Eight other right-wing radical and nationalist groups joined it in Budapest on 24 October 1937 to form the hungarian National Socialist Party (Magyar Nemzeti Szocialista Párt) which subscribed ideologically to the principle of 'Hungarianism', as officially proclaimed by Szálasi. Its aim of developing an advanced agrarian state with a sound industrial base was to be guaranteed by the three pillars of 'Hungarianism', i.e. moral (Christian), spiritual and material (national economic) values. Again sentenced to ten months' imprisonment at the end of November 1937, Szálasi could not prevent his new party being banned on 21 February 1938. However, Germany's annexation of Austria strengthened Hungary's National Socialists, who adopted the slogan ' 1938 is our year', to the extent that a new National Socialist Hungarian Party-Hungarist Movement (Nemzeti Szocialista Magyar Párt-Hungarista Mozgalom) superseded the earlier party as early as 27 March 1938. Darányi's failure to take a sufficiently tough line with the extremists, who refused to be discouraged by public order laws, bans and Szálasi's imprisonment for three years, eventually contributed to the premier's fall from power. The Arrow Cross Party-Hungarist movement (Nyilaskerezstes Párt-Hungarista Mozgalom), founded on 9 March 1939, tried to ensure its continued existence by adopting an emphatically moderate programme whose only radical feature was its antisemitism. It achieved substantial success in the elections of May 1939. With a quarter of the vote and 31 deputies supported by a further 17 deputies from other National Socialist groups, it exerted a steadily growing influence on the course of Hungarian policy.

Darányi now tried to avoid his downfall which seemed imminent in the spring of 1938. He announced a rearmament programme in Győr on 5 March which would make 1,000 million pengé available for the modernisation and expansion of the armed forces within the next five years. Four days later, on 9 March, he announced a cabinet reshuffle of key ministerial posts. A draft of new anti-Jewish legislation, which was laid before parliament on 8 April, was intended to secure him German sympathies and the support of their Hungarian sympathisers who could hope to step into positions vacated by Jews dismissed from their posts. However, after a series of intrigues, in which ex-premier Count Bethlen had the guiding hand, Darányi was dismissed on 13 May 1938 and Horthy appointed Béla Imrédy, the capable, ambitious and devout catholic President of the National Bank, as his successor. As well as his reputation as a first-class financial expert, he owed his appointment above all to his liberal, pro-western and outright Anglophile views, which he demonstrated by giving the ex-prime minister, Count Pál Teleki, the post of education minister in his cabinet. Although this seemed to strengthen those elements critical of National Socialist Germany, after a brief and unsuccessful attempt to win Britain's support in September 1938, it was Imrédy's influence which was eventually responsible for Hungary completely siding with Germany.

While Imrédy vigorously opposed the Hungarist movement, but at the same time eventually secured the passage of anti-Jewish legislation and the new military budget through parliament, in the field of foreign policy he attempted to use his good personal contacts with Great Britain in order to win the support of the British government for a peaceful return of the Magyar-populated districts of Czechoslovakia and at the same time boost the sale of Hungarian agricultural produce. At the same time, he established closer contacts with Poland with a view to defining mutual spheres of interest and achieving the coordination of diplomatic activities and, if necessary, military operations. Since Hungary could not rely on armed forces of any appreciable strength, and greatly overestimated the strength of its potential enemies, Imrédy's cabinet tried once more to achieve a maximum possible revisionist success by peaceful means through negotiations with the Little Entente. On 22 August 1938, the foreign ministers of the Entente meeting in Bled announced that they were prepared to recognise Hungary's desire for armaments parity and were willing to consider a more conciliatory stance on the question of national minorities.

This first modest attempt at a settlement was immediately undermined by Hitler's remarks during Horthy's state visit to Germany at the end of August when Hitler expressed his annoyance at what he called the 'sloppy attitude' of Hungary's politicians and pointed out that those who wanted to 'join the party in destroying Czechoslovakia' had 'to do some of the cooking as well'. But during the talks held in Berlin and Kiel it became clear that even the keenest Hungarian revisionists were not prepared to rush head over heels into an uncertain adventure on Hitler's side. However, when in September 1938 the Führer set the Czechoslovakian crisis in motion and refused to relax the pressure, Hungary could not remain on the sidelines. On 20 September, Imrédy and Kánya were summoned to Berchtesgaden where they were confronted by a Hitler who was determined on world war. In a fit of generosity he informed them that he had no claims on Slovakia or Ruthenia, provided the Hungarian government -- after a short interval in order to avoid intervention by Rumania and Yugoslavia -- took an active part in destroying Czechoslovakia. Although some 200,000 inadequately trained and poorly equipped soldiers had been mobilised in Hungary in the meantime, their field strength was limited, since available munitions were adequate for only some 36 hours of fighting. The news, which was eventually announced on 28 September, that a meeting of government leaders would take place at a Four Power Conference in Munich, was greeted with relief in Budapest, since there was now the prospect of avoiding armed conflict. It was entirely thanks to Mussolini's intervention that Hungary's claims were dealt with satisfactorily in the Munich agreement to the point that 'the problem of the Hungarian minorities in Czechoslovakia, insofar as this would not be settled within three months by an agreement between the governments concerned, would be the subject of a further meeting of the government leaders of the Four Powers present'.

But the sudden euphoria felt in Hungary at this first major revisionist success was soon dampened by the tough negotiations with the autonomous regional governments of Slovakia and Ruthenia (now called the Carpatho-Ukraine) in Komárom in October 1938. The opposing parties were so entrenched in their views that on 2 November 1938 the German foreign minister, von Ribbentrop, and his Italian counterpart, Ciano, were forced to give an arbitration judgement in Vienna's Belvedere Palace which restored to Hungary 12,009 square kilometres of land with 1.04 million inhabitants, including 592,000 Magyars, 290,000 Slovaks, 37,000 Ruthenes and 14,000 Germans. This increased Hungary's territory and population to 105,000 square kilometres and 10.11 million inhabitants. Magnificent celebrations to mark the 'return of the occupied territories' scarcely concealed the disappointment felt at the partition of Ruthenia and the failure to secure a common frontier with Poland. Kánya, who was blamed for these failures and had to fight for his survival in the cabinet, thought he could take a gamble and, without a complete assurance of Poland's backing, ordered preparations for the military occupation of Ruthenia's remaining territory, planned for the night of 19 and 20 November 1938. Because of Hitler's firm objections, the attack had to be cancelled at the last minute. As a result of public pressure the Imrédy government was forced to resign on 23 November. Since both Teleki and the chief of the Hungarian general staff, Lajos Kerezstes-Fischer, refused to accept the post of premier, Horthy once more entrusted Imrédy with the formation of a new government on 28 November. With the appointment of pro-German politicians acceptable to the German government to the key ministerial posts in the cabinet the entire political system took a distinct shift to the right. After several candidates had turned down the post, Kánya's arrogant, ambitious and scheming secretary of state, Count István Csáky, was appointed, the new foreign minister. He believed that Hungary could secure its independence and gain further revisionist successes, which as a Hungarian nationalist he thought vital to its survival, only if it followed Berlin's advice.

Csáky's belief that the 'Rome-Berlin Axis' would dominate Europe for the next quarter century and that under its protection Hungary would be restored to its former greatness within its historical frontiers led him to seek an even closer relationship with Hitler's Germany in the hope of being able to occupy the strategically important province of the Carpatho-Ukraine before the regional elections due to be held there on 12 February 1939. Because of his anxieties about holding on to his office, Imrédy may well have been the driving force behind the attempt to win Hitler's approval. Despite his new government's shift to the right and attempts to conceal the disappointing result of the Vienna Award through increased internal political activities such as a new land reform law and discriminatory anti-Jewish legislation modelled on Germany's example. Imrédy lost the Regent's confidence. The premier had failed overall in fulfilling the high hopes placed in him. Having failed to achieve success, he had brought about a situation where -- against his own wishes, not least because of Britain's lack of interest -- Hungary had grown substantially more dependent on Germany. However, after Hitler had adamantly refused to tolerate any further Hungarian actions in the Carpatho-Ukraine, Horthy summoned Imrédy on 13 February 1939 and used the 'discovery' of his Jewish great grandmother as the excuse for his dismissal. For the second time in his career Count Pál Teleki was appointed prime minister on 16 February 1939.

The new premier, a professor of geography, had been a former delegate to the Paris Peace Conference and, since May 1938, education minister. He was neither a narrow-minded revisionist nor a cloistered academic, but a responsible full-blooded politician, conscious of the responsibilities of his office. He did not shirk from the effort involved in pursuing an independent Hungarian nationalist course in domestic and foreign policy and secretly hoped that in a conflict between the fascist dictatorships and the western democracies -- which he thought inevitable -- the latter would eventually gain the upper hand. Nevertheless, he was enough of a political realist to recognise Hitler's current domination of east central Europe and, since the recovery of the Carpatho-Ukraine was at stake, to support Germany in its expected elimination of the rump of Czechoslovakia after Munich. In the following six weeks, during which Hungary came closer to achieving this revisionist aim, the country became even more dependent on Germany in an irreversible development which gave rise to the long-term danger of completely losing its political sovereignty. Hungary's joining of the Anti-Comintern Pact on 24 February 1939, its breaking off of diplomatic relations with the Soviet Union on 2 February and its subsequent withdrawal from the League of Nations on 11 April were all signs of a willingness to subordinate the country to Germany's leadership.



When Hitler informed the Hungarian government on the evening of 12 March 1939 that it had 24 hours to settle the Ruthenian problem its own way, Horthy and Teleki's government did not hesitate to join obediently in Hitler's illegal action. Like the vast majority of their countrymen, the politicians thought only in historical-geographical terms and were convinced of the need to restore Hungary to its historical frontiers or else suffer national decline. Disquieted by Germany's announcement that a protectorate had been established over Slovakia, to which Hungary also laid claim, the government ordered military operations to begin after 16 March in eastern Slovakia with a veiw to extending Hungary's common frontier with Poland. It also hoped that it could in time persuade the Slovak state, which was barely capable of an independent economic existence, to enter into closer cooperation or even union with Hungary. The campaign resulted in the acquisition of an area of 11,085 square kilometres with 552,000 inhabitants in the Carpatho-Ukraine, of whom 70.6 per cent were Ukrainians, 12.5 per cent Magyars and 12 per cent ethnic Germans. A further 1,700 square kilometres with 70,000 mainly Ukrainian and Slovak inhabitants were wrested from Slovakia. After Poland's refusal to give in to his demands over the question of Danzig and the Polish Corridor, Hitler, who had earlier considered partitioning Slovakia to compensate its neighbours, at first showed no inclination to accommodate Hungary's revisionist demands any further. In the months that followed tensions between Hungary and Slovakia, Hitler's pseudo-sovereign vassal state which served as a model for his 'New Order' in Europe, reached the point where the threat of a military clash was only avoided as a result of major German intervention.

Although the Vienna Award satisfied an essential part of Hungary's claims and the overestimated asset of a common frontier with Poland had been achieved after the occupation of the densely forested but economically still undeveloped Carpatho-Ukraine, Teleki's government, while breaking the encircling grip of the Little Entente, had allowed itself to become chained to Berlin. This meant in fact that its freedom of action was even more limited. Had Horthy and the various Hungarian governments opposed Hitler's wishes after March 1939, Hungary would have certainly suffered a similar fate to Poland. The impatient and uncompromising revisionist claims which Hungary raised against Rumania in an increasingly tense international situation from the spring of 1939 onwards aroused little sympathy. Not only did they paralyse the British and French guarantee to Greece and Rumania, announced on 13 April 1939, but by constantly stirring up trouble in the crisis-ridden area of south-eastern Europe gave Hitler the opportunity to put himself forward in the role of arbitrator and consolidate Germany's position in the Danube region. This exceptionally blinkered and dangerous foreign policy of the Teleki government, which measured progress entirely in terms of achieving revisionist aims and eventually made every move ultimately dependent on this goal, speeded up the process whereby Hungary became increasingly dependent on Germany in its foreign, military and economic policy. Its unhesitating alignment with Germany, which Hitler and Ribbentrop suggested to Hungary's compliant foreign minister, Count István Csáky, at Berchtesgaden on 8 August 1939, paid off a year later when the Second Vienna Award restored Northern Transylvania to Hungary. However, it involved renouncing Teleki's original policy of 'armed neutrality', forsaking genuine Hungarian independence, and eventually culminated in the catastrophe of war. Thus, Hungary's revisionist policy, which failed in its extent and method, also set in motion the downfall of Horthy's quasi-feudal state which was plunged by Germany's ultimate defeat into the maelstrom of social revolutions and into being once more forced to accept the frontiers laid down in the Trianon peace treaty.


Above: French map showing Trianon revisions prior and during Worle War II

Below:detailed Hungarian map showing Hungary, as of late April/1941

Click on the map for better resolution


In domestic politics, Hungary was unsettled by the debate which lasted from December 1938 to 3 May 1939 on the second anti-Jewish law. The application of racial criteria led to the vast majority of Hungary's Jews losing their positions, especially in the educated and white-collar professions, but also in major business concerns. A law of 27 January 1939 introducing universal conscription and the decision to build up the army reserves made it compulsory for all men and women between the ages of 14 and 70 to join the Labour Service for the sake of national defence. Yet it also served as a pretext for further restrictions on freedom of assembly and organisation, together with the introduction of summary courts and the erection of internment camps. After the Party of National Unity, led by ex-premier Imrédy, ceased its political activities and joined the modern Hungarian Life Movement on 5 January 1939, Teleki founded his own Party of Hungarian Life (Magyar Élet Pártja) on 7 March 1939 in preparation for the elections due to be held in March. Although representatives of the Arrow Cross-Hungarist movement continued to be persecuted, Teleki had no objections to their participating in the elections of 28-30 May 1939 which were conducted mainly by secret ballot. Together with the other National Socialist right-wing radical groups they won almost a million votes and 48 seats, of which 17 went to the splinter parties. Winning 181 of the 260 contested seats, the Party of Hungarian Life was able to rely on a comfortable majority, especially since it could count on support on national issues from the Christian Economic and Social Party (8 seats) and the National Liberal Party (5 seats). The middle ground and the left of politics, led by the Independent Party of Smallholders, did particularly badly in the election campaign which was dominated by right-wing slogans and the chicanery of the authorities. The Smallholders had only 14 seats compared with the 22 they had previously held. The Social Democratic Party, despite polling 13.3 per cent of the vote, won only 5 seats. The Hungarian Communists, whose Central Committee, which had been active underground, had been dissolved by the Comintern in 1936 and replaced by a provisional secretariat set up in Prague, tried to increase their contacts with the more left-wing elements among the extreme nationalists. But, despite attempts at reorganisation by Ferenc Rózsa in the spring of 1939, the Communists were far too weak to be able to influence political events or the majority of workers who had been won over by the National Socialists' slogans. Following internal squabbles in the ' Hungarian-German National Popular Education Association', Franz Basch founded the ' National League of Germans in Hungary' in November 1938. As a result of the financial and moral support it received from the German Nazi Party's own Department of Foreign Affairs and the SS Liaison Office for Ethnic Germans, it became the forerunner of a single party representing Hungary's ethnic Germans, who were becoming increasingly influenced by the spirit of National Socialism.

Despite the growing threat of war in the summer of 1939, the slow economic recovery, helped along by increased exports to Germany, an intensive armaments programme, initial revisionist successes and growing hopes of recovering Transylvania, gave broad sections of the population the impression of standing on the threshold of a major political and economic recovery. The government attempted to play down the increasingly obvious pressures from Germany and, by staging incidents on the Rumanian border, tired to divert attention from tensions within the government and the country's growing political polarisation. However, the Hitler-Stalin Pact of 23 August and the German invasion of Poland on 1 September 1939, which marked the outbreak of the Second World War, shook the Magyars out of their illusory complacency and forced Hungary and its politicians to come off the fence.