  We present the first 86 GHz VLBI observations of the radio galaxy 3C~120,
together with contemporaneous 43 and 22 GHz polarimetric VLBA observations. The
very high angular resolution obtained at 86 GHz provides an upper limit to the
size of the core of 54 $\mu$as (0.025 $h^{-1}$pc). This represents a direct
determination of the base of the jet which is independent of variability
arguments (which depend on uncertain estimates of the Doppler factor), and
places it below approximately one light-month. Comparison with previous VLBA
observations after a one-year interval shows pronounced changes in the
structure and polarization of the jet. Most of the components are found to
follow a curved path while undergoing a steepening of their spectra accompanied
by a decrease in total and polarized emission. However, at least one component
is observed to follow a quasi-ballistic motion, accompanied by a flattening of
its spectrum, as well as an increase in total and polarized flux. This may be
explained by its interaction with the external medium, resulting in a shock
that enhances the emission and aligns the magnetic field perpendicular to the
component motion, thereby producing an increase of the degree of polarization
from undetected values to as high as 15%. A second strong component, with the
highest degree of polarization (23%), is found to have experienced a
displacement from the ridge line of the structural position angle of the jet as
it moved downstream. We have found a mean swing to the south of the position
angle of the innermost components of $\sim 6^{\circ}$ between late 1996 and
1997, which may be responsible for the jet curvature observed at parsec and
kiloparsec scales.
