CURRENT INTELLIGENCE BULLETIN - 1954/01/19

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02008411
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: January 19, 1954

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19 January 1954
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO,
NO CHANGE IN CLASS.
Ii DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE. _200 9
AUTH: HR 70-
DATE:
REVIEWER
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
. Soviet Union attempts large copra purchase from Indonesia (page 3).
FAR EAST
3. Peiping reacts strongly to Indian proposal on Korean prisoners
(page 4).
4. Thimayya may alter Korean prisoner release date (page 4).
5. Communists seen unwilling to withdraw charge of American "perfidy"
(page 5).
SOUTH ASIA
6. American ambassador forecasts reaction to reduced US aid to India
(page 5).
NEAR EAST - AFRICA
7. Greek leaders may reduce air force (page 6).
EASTERN EUROPE
8. Comment on Yugoslav party's disciplining of Djilas (page 7).
WESTERN EUROPE
9. Paris embassy comments on French attitude toward Berlin talks
(page 7).
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GENERAL
1.
2. Soviet Union attempts large copra purchase from Indonesia:
the Soviet Union is attempting to pur-
chase 50,000 tons of copra from Indonesia for which payment would
be made in gold. price was no object to the Soviet
Union and that immediate delivery was desired.
Comment: Indonesia has blamed the
United States for reduced world prices for its principal products
and is looking toward the Communist Orbit for an expanded market.
The Soviet Union is attempting to obtain
increased amounts of fats and oils in non-Orbit countries. Substan-
tial purchases from Indonesia will tend to increase the prestige of
the Communists there.
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FAR EAST
3. Peiping reacts strongly to Indian proposal on Korean prisoners:
The Chinese Communists have informed
India that they could not "stand idly by"
while the prisoners in Korea are being
returned to the UN Command, according
to a report from the British high commissioner in New Delhi.
Secretary General Pillai of the Indian Foreign Ministry told the
commissioner on 13 January, however, that he did not think this
amounted to a serious threat of intervention and that the Indian
government was not too concerned.
Comment: Peiping propaganda also
asserted that the Chinese could not "stand idly by" before they
intervened in the Korean war in 1950. In that case, however, the
propaganda was reinforced by an explicit statement from Premier
Chou En-lai to the Indian ambassador that the Chinese would inter-
vene if American forces crossed the 38th Parallel.
In the current case of the prisoners,
Peiping's propaganda has warned of "grave consequences," but no
Chinese spokesman has yet, either publicly or privately, threatened
military action.
4. Thimayya may alter Korean prisoner release date
General Thimayya may hold the Korean
prisoners until 23 January, instead of
turning them back beginning on the 20th,
if the Communists reject his "turn-back"
proposal, according to American representative Kenneth Young.
Thimayya added that while the whole prisoner issue is subject to
his government's continuing review, he is convinced that New Delhi
will remain firm on ending the custody of the prisoners by the 23rd.
He takes for granted that the only question left is one of method, and
that since time is so short, he may have to act on his own.
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Comment: Although Prime Minister
Nehru may change his mind at the last minute, the current pros-
pect is for the Indians to end their custody of the prisoners on or
before 23 January with only minor disorders.
The Communists may refuse to accept
their prisoners in line with their contention that they are observing
the 8 June agreement while the United Nations Command is not.
5. Communists seen unwilling to withdraw charge of American "perfidy":
An Indian official informed American
representative Young of his impression,
after talking with Chinese Communist
delegate Huang Hua in Panmunjom on
17 January, that the Communists are "not interested" in the current
American proposal that they withdraw their "perfidy" charge. The
Indian inferred that they wish to preserve this charge for use in con-
nection with the anticipated release of prisoners this week.
Comment: The Communists can be ex-
pected to respond to the prisoner release as they did to South Korea's
unilateral release of 27,000 prisoners last June -- that is, to accuse
the United States of collusion in an act of perfidy but to refrain from
taking any military action on the issue.
Another reason for the Communists' lack
of interest in current American proposals at Panmunjom is their
apparent decision to avoid serious negotiations for a Korean political
conference pending developments in the United Nations and at the Berlin
four-power conference.
SOUTH ASIA
6. American ambassador forecasts reaction to reduced US aid to India:
Ambassador Allen believes that a substantial
reduction in American aid to India for 1954-55
would be taken as a diminution in American
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interest in India's economic stability, and that, alternatively, cessation
of such aid would convince Indian officials and the public that the ruling
motive of American policy is purely military. By 1956, however, Allen
feels that US aid could begin to be phased out without serious political
repercussions.
The embassy estimates that India can utilize
properly $100,000,000 to $110,000,000 financial aid in 1955, but there is
little chance that India could absorb large quantities of American surplus
agricultural products.
Comment: The possibility of American mili-
tary assistance to Pakistan has heightened India's sensitivity toward
changes in American foreign aid policies. American aid to India has
totaled $186,700,000 since 1951, not including the $190,000,000 wheat
loan that year.
The Indian finance minister has estimated
that $500,000,000 in outside assistance will be needed by 1956 to com-
plete India's current five-year plan.
NEAR EAST - AFRICA
7. Greek leaders may reduce air force:
Defense Minister Kanellopoulos has informed
Ambassador Cannon that Prime Minister
Papagos expects to discuss with General
Gruenther the advisability of reducing the
size of the Greek air force during his forthcoming visit to Paris.
Kanellopoulos indicated that the Greek government now favored
cutting defense expenses.
Comment: Greek defense expenses now
account for approximately 30 percent of the annual budget and the
government's growing conviction that they should be cut has been
strengthened recently by opposition exploitation of this issue.
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EASTERN EUROPE
8. Comment on Yugoslav party's disciplining of Djilas:
There is no evidence that foreign alignments
were involved in the disciplining of Milovan Djilas. Top leaders, in-
cluding Tito, emphasize that Yugoslav foreign policy will not be influ-
enced and cooperation on a "foreign political plane" with the Western
democracies will continue.
Despite heavy concentration on Djilas'
ideological errors, the party's continued emphasis on his attack on
the "fancied superior morals" of the inner party circles suggests
that personal differences were an important part of the clash.
Strong efforts, probably including attacks
on 'Western, bourgeois" influences within the country, can be expected
in an effort to reassert the solidarity of the Yugoslav Communist Party.
The central committee proceedings made it clear that runaway trends
toward the liberalization of political activity are to be stopped, but
Tito emphasized that a swing to the other extreme must not be made.
Tito's suggestion that the central committee
immediately deal with "as many similar cases as there may be" sug-
gests that a purge of other Communists will follow. It is doubtful,
however, that a purge would effect other to leaders or seriously
weaken their control of the country.
WESTERN EUROPE
9. Paris embassy comments on French attitude toward Berlin talks:
Commenting on French attitudes toward
the Berlin conference, the American
embassy in Paris states that the coalition
Is fairly united on the need for Western
solidarity, but hopes that a real relaxation of East-West tensions
can somehow be achieved. There is at the same time some sus-
picion that the United States does not share this hope and would like
to see the conference fail, since failure would favor EDC ratification.
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The embassy, which doubts that the
present government would or could go far in bilateral dealings
with the USSR on Germany, comments that no French government
could refuse to give serious attention to any Soviet proposals on
Indochina.
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