CURRENT INTELLIGENCE BULLETIN - 1954/02/05

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02058863
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: February 5, 1954

/100404
/ Approved
, Approved for Release. 2019/08/02 CO205886
/r T0P r
E" 6 ifiS � 0/97
3.3(h)(2)
3.5(c)
5 February 1954
Copy No.41
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. .4it� 07.."
NO CHANGE IN CLASS.
1 DECt ASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: 009--
AUTH: HR 7O-
DATE: � *%I RE'V1EWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
for Release: 2019/08/02 CO2058863
Approved for Release: 2019/08/02 CO2058863
kJ
SUMMARY
GENERAL
1. USSR makes sweeping trade offer to British businessmen (page 3).
2. Molotov directs vague offer of Soviet mediation in Indochina to
Bidault (page 3).
3. Molotov again links Austrian settlement to German concessions
(page 4).
4. Chinese Nationalists to confiscate Polish tanker (page 4).
FAR EAST
5.
SOUTHEAST ASIA
6. American army attach�omments on French military effort in
Indochina (page 5).
NEAR EAST - AFRICA
7. British insist on 50-percent AIOC share in Iranian oil consortium
(page 6).
EASTERN EUROPE
8. Czechoslovakia releases American citizen in effort to improve
relations (page 7).
9. Socialist penetration concerns East German Communists (page 7).
2
TOP SECRET
Approved for Release: 2019/08/02 CO2058863
5 Feb 54
Approved for Release: 2019/08/02 CO2058863
I N../ I. N.. A.
GENERAL
1. USSR makes sweeping trade offer to British businessmen:
The Soviet offer to buy over one billion dollars
worth of British goods for 1955-57 delivery appears to be an attempt
to solidify European resistance to COCOM controls and to exploit a
basic policy difference between the US and its allies on East-West
trade. The offer, which was made by Soviet foreign trade minister
Kabanov, was evidently timed to coincide with the Berlin conference.
Kabanov's proposed import list calls for
textile machinery and consumer goods as well as many items now
subject to COCOM control. The British government has already
called for a drastic reduction in the list of items subject to control
and will now be under further pressure from commercial circles to
scrap the existing program.
The British government's attitude toward
the future status of the control program was revealed in its request
for COCOM approval of the export to the USSR in 1955 of two television
transmitters, now classified on International List I.
The United Kingdom has been the USSR's
largest Western trading partner. Its highest recent export volume
to the USSR was $104,000,000 in 1952, when total exchanges with the
UK accounted for approximately one third of the Soviet trade with the
West.
As this offer is in the pre-contract stage
and would require major readjustments in the Soviet export pattern,
it is unlikely that UK-USSR trade will reach the proposed level, but
it will probably expand considerably.
2. Molotov directs vague offer of Soviet mediation in Indochina to Bidault:
Foreign Minister Bidault informed Messrs.
Dulles and Eden on 3 February that Mr.
Molotov had intimated the USSR is disposed
-3-.
TOP SECRET
Approved for Release: 2019/08/02 CO2058863
5 F.66 54
Approved for Release: 2019/08/02 CO2058863
two"I N.../ I L).1-0%...diN.L.,
tur
to use its "good offices" with respect to Indochina, but did not specify
what he meant. Bidault suggested that this should mean some degree
of support for the French position but Molotov gave no assurances of
such support.
Comment; Molotov's vague mediation hint
was probably intended as a bid for French support of a five-power
conference. He has made no reference to Indochina during the Berlin
conference sessions, but the Soviet press officer stated that the Indo-
china question could be discussed at a five-power conference.
3. Molotov again links Austrian settlement to German concessions:
In a dinner conversation on 2 February,
Foreign Minister Molotov's answer to
Foreign Secretary Eden's questions about
the prospects of an Austrian treaty was
"possibly, but I would have to have something on Germany." When
Eden inquired about the chances for a Far East agreement he re-
plied "possibly yes."
Throughout the dinner, Molotov made no
effort to raise new subjects and simply answered Eden's questions.
4. Chinese Nationalists to confiscate Polish tanker:
The Chinese Nationalist government plans
to announce in early February the formal
confiscation of the 6,487-ton Polish tanker
Praca, which was intercepted near Formosa
last October,
The Nationalists plan to defend this action
by proving that a Chinese- Communist sale of the vessel to Poland in
1951 was illegal.
4
TOP SECRET
Approved for Release: 2019/08/02 CO2058863
6 Feb 64
Approved for Release: 2019/08/02 CO2058863
Nay1 A A. L.' LA.-di-N-1-d A.
Comment: The Soviet bloc has been
unsuccessful in securing the seisvices of Western tankers for the
China trade since mid-1950, and the confiscation of the Praca
will deprive it of one of its few large ocean-going tankers.
FAR EAST
5.
SOUTHEAST ASIA
6. American army attach�omments on French military effort in Indochina:
The American army attach�n Saigon
reports that staff thinking and procedures
at French headquarters are of the "1935-39
vintage." General Navarre's strategy and
tactics are now identical to those of General
Salan, his defensive-minded predecessor.
- 5 -
5 Feb:54.
Approved for Release: 2019/08/02 CO2058863
Approved for Release: 2019/08/02 CO2058863
--.fL L1LsiLLsi
At Dien Bien Phu the French tied up
thousands of regular troops and most of their air transport capa-
bility, only to be by-passed by the Wet Minh. Navarre's failure
to carry the fight to the enemy in central Laos is incomprehensible.
The French there had a three-to-one advantage over the six coolie-
supplied Viet Minh battalions which, nevertheless, are now in a.
position to tie down a large French force indefinitely.
The attach�eports that French patrolling
from strongpoints and on the delta periphery "is the exception rather
than the rule." He believes that Navarre has been directed by Paris
to conduct a "minimum-casualty holding action" with a view to even-
tual negotiations.
He reports that the consensus of American
military opinion in Indochina is that the greatest deterrents to military
success are lack of energetic support from Paris, inadequate training
at all levels, and a defensive psychology'. He observes that "the addition
of unlimited supplies of the latest United States equipment will not correct
these deficiencies."
NEAR EAST - AFRICA
7. British insist on 50-percept AIOC share in Iranian oil consortium:
According to Herbert Hoover, Sr. the
British government and the Anglo-Iranian
Oil Company continue to insist that in the
consortium proposed to reactivate Iran's
oil industry, AIOC must have at least a
50-percent interest and be tacitly accorded
a dominant role in management. Hoover
sees some indication that the British
government might modify this position.
The British also propose that the pro-
spective members of the consortium headed by AIOC go to Tehran
within a month to begin final negotiations on this and other questions.
- 6 -
TOP SECRET
Approved for Release: 2019/08/02 CO2058863-
5 Feb 54
Approved for Release: 2019/08/02 CO2058863
leo .L.A.-4 1 N. 1-, A.
Foreign Secretary Eden told Secretary
Dulles that it would be difficult to accept less than a 50-percent
share in the consortium for AIOC, because "everyone will say that
the United States is taking our position in Persia away from us:"
Eden acknowledged that this is not the case, but said public opinion
was "very difficult."
Comment: Prime Minister Zahedi has
told Ambassador Henderson that no Iranian government could approve
such a degree of AIOC participation. No definitive official Iranian
proposals on this point have been drawn up.
EASTERN EUROPE
8. Czechoslovakia releases American citizen in effort to improve relations:
Czechoslovakia's release on 4 February of
Ian Hvasta on the American embassy's terms represents a retreat from
the previous Czech stand, and is another example of the Orbit's more
conciliatory approach.
Czech prime minister Siroky told the Ameri-
can ambassador on 29 January that the "atmosphere" for settlement of
all outstanding issues between the two countries is "much better" than
in the past, and indicated that the Hvasta case should not be permitted
to stand in the way.
9. Socialist penetration concerns East German Communists
An East German Communist Party (SED)
survey of the Agfa Film Factory in Wolfen
has revealed that the SED has done no effec-
tive political work in this enterprise since
the June riots, while agents of the West German Social Democratic
"East Bureau" have managed to win over "a number" of SED members.
The Wolfen factory was selected for the survey as characteristic of
plants where hostility to the Communist regime prevails.
- 7 -
TOP SECRET
Approved for Release: 2019/08/02 CO2058863
5 Feb 54
Approved for Release: 2019/08/02 CO2058863
yaw/ J. A. N.A./
Comment: Underground activities of the
West German Socialists in East Germany are known to be widespread,
but this is the first evidence that they have been successful in winning
over Communist Party members. Nearly a quarter of the SED mem-
bership is composed of former Social Democrats. Disaffection within
the party has been manifested in the refusal of members to elect indi-
viduals nominated by the leadership as delegates to the party congress
scheduled for March.
TOP SECRET
Approved for Release: 2019/08/02 CO2058863-
5 Feb 54