On February 7, 1791, the Hungarian Diet, the legislative institution established in the Middle Ages, appointed a commission to study the situation of the Jews of Hungary. This followed the approval by King Leopold II on January 10 of the De Judaeis bill, which effectively offered the Jews protection against any worsening of their situation.
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The background to the bill was the death of King Joseph II a year earlier. Joseph, early in his reign, had expressed his intention to cancel the longstanding decrees that restricted and oppressed the Jews. Thereupon followed a period of emancipation that gave the Jews the right, for example, to settle where they wanted, but also required them to assume the obligations of other citizens and conduct their lives in the official language of the empire, rather than Hebrew or Yiddish.
When Joseph died, several cities, including Pest, saw an opportunity to expel their Jews. On November 29, 1790, the country’s Jews handed a petition to Joseph’s successor, Leopold II, asking to have their equality with other Hungarian citizens confirmed. After various consultations, the Diet drafted the De Judaeis bill, which confirmed the continuation of the status quo.
The bill stipulated that a commission would be appointed to regulate “the condition of the Jews,” and until that time, “the Jews within the boundaries of Hungary and the countries belonging to it shall, in all the royal free cities and in other localities (except the royal mining-towns), remain under the same conditions in which they were on Jan. 1, 1790; and in case they have been expelled anywhere, they shall be recalled."
In fact, although a commission was appointed, no further action regarding the Jews was taken up by the Diet until 1839-1840. In the meantime, maintenance of the status quo meant Jews were prohibited from residing in all the principal towns – the so-called royal free cities -- except Pest, where Jews could settle, upon payment of a “toleration tax”.