A partial recovery of the industry—in quantity though not in quality–took place throughout the 1930s, assisted by a government levy on the foreign films that now swamped the market. The emphasis was largely on glossy romantic comedies, erotic melodramas, and musicals, the most popular of which was Meseauto ( The Dream Car ), directed by Béla Gaál (1893–1944) in 1934. The film with the most lasting appeal was the comedy Hyppolit, a lakáj ( Hyppolit, the Lackey , István Szézely, 1931). In contrast to this trend are two fine films by Paul Fejos, who returned to Hungary after some years in Hollywood to make Tavaszi zápor ( Spring Shower , also known as Marie, a Hungarian Legend ) and ÍtélaBalaton ( The Judgment of Lake Balaton , both in 1932. Official disapproval of the films' explicit social criticism, however, drove Fejos to leave Hungary once more, this time for good. Hortobágy ( Life on the Hortobagy , Georg Höllering, 1936), a mixture of fiction and documentary set on the Hungarian pustza , or great plain, is another major work of the period.

The outbreak of World War II, in which Hungary found itself allied with Germany until it made a disastrous attempt to change sides near the end, saw an Pa unexpected increase in film production, combined with a ban on importing American films in 1942. Production increased to a total of some forty or fifty films annually by 1944, almost all of them thrillers, comedies, or sentimental dramas, often with a strongly nationalistic streak and subjected to strict, politically based censorship. Almost the only film of lasting quality to emerge from this period was Emberek a havason (People on the Alps, 1942), directed by István Szöts (1912–1998), with its magnificently photographed mountain scenery and a strong social theme based on the contrast between city and country values. The film was attacked by both left and right, and Szöts was unable to make another film until 1947, when his almost equally impressive Ének ázamezökröl ( Song of the Cornfield ) was promptly banned by the Communist-controlled government. Szöts finally left Hungary for Austria in 1957.

In the immediate postwar period, a devastated and barely functioning film industry made only fourteen films between 1945 and 1948. Though private financing of film continued for a time, the feuding members of the postwar coalition government struggled for control of the industry, culminating in a second nationalization by the successful Communists in 1948. The only worthwhile film of this period (apart from the banned Song of the Cornfield ) was another lasting classic, Valahol Európában ( It Happened in Europe , Géza von Radványi, 1947), with a script by Béla Balázs, who had returned from exile to help reestablish the country's film industry. It is a moving and unsentimental account of how the moral influence of an elderly musician helps a group of boys, orphaned and made homeless by the war, go on to lead civilized and socially productive lives.

Nationalization brought, as for other film industries in the Soviet bloc, a demand for "socialist realism" in the style and content of the cinema: straightforward, uncomplicated narrative, with a clear distinction between "good" (Communist) and "evil" (reactionary and capitalist) characters, and subject matter inspired by "the new spirit of a new era," charting the inevitable victory of Communism over its internal and external enemies. For a few years overt propaganda of this type predominated, occasionally modified and given greater sophistication by the more talented directors. The first film of the new system, Talpalatnyi föld ( Treasured Earth , Frigyes Bán, 1948), is actually one of the better examples, telling its standard story of class conflict in a restrained and powerful manner.

Film directors wishing to work in the industry now had first to graduate from the Academy for Theater and Film Art, established in 1948, and, until 1959, they could offer their services to only one studio, Hunnia (later called Mafilm). The training received in the Academy was excellent and wide-ranging, and in 1963 four new studios were created, usually headed by a respected figure in the industry rather than a bureaucrat, offering more freedom of subject matter to directors. Nevertheless, throughout this whole period, until the collapse of the Communist system in the early 1990s, every script had to pass over a series of bureaucratic hurdles before acceptance, with the same process being repeated for the finished film.

Hungary's Stalinist years of the early 1950s, marked by political repression, show trials, and imprisonment or execution of "enemies of the people," produced few films of note before 1954–1955, when Felix Máriássy's (1919–1975) Budapesti tavasz (Springtime in Budapest, 1955), set during the Soviet "liberation" of the city in 1945; ZoltánFábri's (1917–1994) Hannibál tanárúr ( Professor Hannibal , 1956); and Zoltán Várkonyi (1912–1979) and roly Makk's (b. 1925) Simon Menyhért születése (The Birth of Menyhért Simon, 1954) infused some freshness, intellectual integrity, and genuine humanity into some of the mandated themes. Várkonyi's Keserû igazság ( The Bitter Truth , 1956), however, which dealt openly with official corruption and negligence, was immediately banned and not released until 1986. The 1956 revolution (officially termed the "Counterrevolution" for the next three decades) against Communist control, and savagely repressed by Soviet tanks, brought a relatively brief clampdown, during which filmmakers concentrated on safe literary adaptations or offered psychological studies on private, nonpolitical themes. Even in this atmosphere, however, Bakaruhában ( A Sunday Romance , also known as In Soldier's Uniform , Imre Fehér, 1957), and Fábri's Körhinta ( Merry-Go-Round , 1955), brought a genuine breath of fresh air into the inevitable theme of class conflict.

In 1959 the Béla Balázs Studio was created to allow young filmmakers to produce experimental short films with considerable freedom of style and content. This, together with the impact of neorealism, the French New Wave, and the films of Ingmar Bergman, Federico Fellini, and Michelangelo Antonioni, led to the appearance of a new generation of directors, ready to take advantage of the relaxation in cultural policy at the time, and with a sophisticated understanding of what was happening in the world of cinema outside their own country. It was these filmmakers who inaugurated the great period of Hungarian cinema.

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