THERE IS AN AURA of decency as well as diplomacy to the administration's decision to return to Hungary the nearly 1,000-year-old crown of St. Stephen, the country's most treasured emblem of national continuity. The crown, with its crooked cross (bent by a thief) and accompanying relics, had been entrusted to the American army for safekeeping in 1945. Cold war political considerations, including the freeze in official relations that followed the 1956 Hungarian Revolution and the pressure applied to Congres by anti-Communist emigres, then took over and kept the crown in the United States through the succeeding decades. The Communist regime of Hungary evidently did not wish to suggest, by asking openly for the crown, that it needed or valued the legitimization traditionally associated with it. Thus did the United States find itself in the position of keeping from the Hungarian people a relic of the deepest historical significance to many of them.

In recent years, retention of the crown had become particularly anomalous. For in its internal policy, Hungary after 1956 started quietly turning into the most liberal and humane country in Moscow's East European empire. By the criteria written into the Helsinki Agreement, for instance, it stood tall. But it lacks the extensive American constituency of a Poland (all those Americans of Polish descent), and it lacks the location and iron discipline that have allowed Romania to demonstrate its independence from the Soviet Union, and so it has never gotten due credit in the United States for its policy. It deserves credit and has for some time. It should get back the crown, and it should be retrieved of the tariff discrimination that now limits the entry of its goods to the American market. Unlike the gesture of returning the crown, that requires a change of law.

An interesting ceremony is planned for returning the crown to Budapest. The chief of state (not t the Communist Party or the Catholic Church) will do the receiving; he is meant to represent "the people." The large American delegation that will do the presenting is to include the diplomats, official women, children - a real gang. The ideas is to demonstrate the people-to-people connections of Americans and Hungarians, and it is a fine idea, especially when you put next to it the fact that Soviet troops still occupy Hungary.