CURRENT INTELLIGENCE BULLETIN - 1951/07/22

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02740743
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: April 15, 2019
• Document Release Date: April 22, 2019
• Publication Date: July 22, 1951

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--INDrir� amLonz I
*wor
Iuly 1951
CURRENT TNTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS.
1; DECLASSIFIED
CLASS. CHANGED TO: TS S
NEXT REVIEW DATE:
AUTH: H 70-
OKI
IREVIEWER: .
()thee of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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S UMM AR Y
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GENERAL
1. Sokiet pictured as "serous" about East-West trade meeting (page 3).
FAR EAST
2. Enemy strength in Korea may be much greater than now believed
(page 4).
3. Soviet long-range bombers reported in Manchuria (page 4).
4. Chiang Kai-shek reportedly orders demonstrations against US and UK
(page 5).
5. Indonesia concerned over increased Chinese Communist diplomatic
representation (page 5).
NEAR EAST
6. Oil company dividends may be withheld from Iran (page 6).
EASTERN EUROPE
7. Tito government desires continuation of UN General Assembly (page 7).
S. Industrial cooperation planned among Czechoslovakia, East Germany
and Poland (page 7).
WESTERN EUROPE
9. Comments on Berlin trade impasse (Mtge 8).
10. Precarious coalition is in prospect for France (page 9).
LATIN AMERICA
11. Coup d'etat planned in Bolivi, (page 10).
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Soviet pictured as "Serious
GENERAL
about East-West trade meeting
The Soviet decision to attend UN technical dis-
cussions on improving East-West trade was
"taken at a very high level, " according to in-
formation given to the Secretariat for the
Economic Commission for Europe by a Soviet member of the UN Secre-
taniat. Thc source, who has just returned from Moscow, also emphasized
that the Soviet participants would be very high ranking officials of the
Ministry of Foreign Trade and that this was further evidence of Soviet
"Serious intentions. "
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The US delegation to the Economic Commission
for Europe considers that, at the August 20 meeting, the Soviet bloc will
probably make offers of a substantial quantity of grain and perhaps timber,
demanding strategic commodities in retOrn. In this connection, the Soviet
delegate has informed the Secretariat that the USSR is in a position to sell
Western Europe somewhat more than one and a half million tons of comgse
grains during each of thednext five years against "appropriate counter-
deliveries." Information reaching the Secretariat suggests that Satellite
harvests are very good and that Rumania, for example, may be able to
export a million tons of wheat this year.
� comment The,Soviet Orbit has been encounter-
ing increasing difficulties in obtaining strategic commodities, because of
the growing effectiveness of the Western export control program and be-
04use Western nations have been able to arrange alternative sources of
supply for goods needed from the Soviet bloc. If unable to obtain desired
commodities for Soviet grain through multilateral negotiations, the Soviet
Orbit could utilize this meeting in order to attempt to split the Western
nations on export control policy, or to gain information that Would improve
the Orbit's bargaining position in future bilateral negotiations.
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FAR EAST
. Enemy strength in Korea may be muchfireater than now believed:.
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In addition to enemy units currently accepted
in Korea, Far East Command considers that
the 20th Chinese Communist Army Group,
composed of three or four armies with a
strength of 105,000 to 140,000 troops, "probably" is also in Korea.
"Possibly" in Korea are at least five additional Chinese Communist armies,
totalling 175,000, and three new North Korean Corps of at least 30,000 men.
Comment; The strength of enemy units cur-
rently accepted in Korea totals 493,000, of which 265,000 are Chinese Com-
munists. A recent Far East Command estimate that the enemy could now
support a five to seven day, 72 division offensive is presumably based on
the possibility that the above-mentioned units might participate, as well as
on the supply build-up.
fpoviet long-range bombers reported in Manchuria;
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A unit of 14 TU-4 four-engined bombers has
been "identified" at Changchun in Manchuria
under the Soviet Air
Force not the Chinese Communists.
considers this report 'probable. "
Comment: The airfield at Changchun has a
paved 8,000-foot runway, long enough to handle TU-4's� which are similar
tkt the B-29 medium-bomber. The arrival of four-engined aircraft in.
Manchuria during March and A ril has been re or
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Kai-shek repoletOly_suALLLIezamgkatmiLam. raatal_e_ndjalee
INF
Chiang Kai-shek has ordered his cabinet to
incite anti-American and anti-British demon-
strations as a protest against Nationalist
China's exclusion from the proposed Japanese peace treaty. Chiang also
wants to show that he is still in control of Formosa and can cause trouble
if not accorded full consideration, and to add a bargaining point in his
negotiations for US aid,
Chiang reportedly blames his Foreign Minister
and Secretary-General for the present Nationalist position, The Chen
Li-fu clique, which supports Chiang but is not part of the governmente
reportedly will attempt to uAte present crisis to bring about the
downfall of the Premier and the cabinet.
Czolumat Chinese Nationalist objecWMs to
the US-UK cu aft of the japanese peace treaty have been vigorously
vauced since the official release of the terms on 12 July. White an anti-
Brttish program is possible in view of the UK's policy toward Communist
China, the Nationalists realize that an anti US campaign might sedousiy
hamper continued US economic and military aid, The preferred 1" e8ignations
of various Nationalist officials, including the Premier and Foreign Minister,
have been ascribed to the current "clips."
4j, .A.IL-4014.�t'.. ;MIN MO OnS-InPrS0111,V4e,st-Q9APUtatagiteSIRWAX,,IVT:S%-:
ttation 3.3(h)(2)
The Indonesian For 4,13 Minister told US
Ambassador Cochx, ri that his governmea
regards as an "insult" the arrival, without
prior clearance with Indonesia, of twen4
additional Embassy staff members. He said Um eiping had not requested
diplomatic visas for these persons; instead, the Chinese Ambassaoi2N.
Djakarta merely informed the Indonesian Foreign Office of e additAw
of twenty staff members, whose names and positions would be revealed
upon arrival.
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J. Noir. .L
The Minister stated that his government was
extremely reluctant to admit so large an increment. In conclusion, he
said that Indonesia would return the group to China "even if it means a
diplomatic incident "
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Comment: Several days ago, the Foreign
Minister told Cochran that Indonesia originally had approved only a fifteen-
member staff for the Chinese Communist Embassy in Djakarta. The
twenty additional members will increase the staff in Djakarta to a total
of eighty. The Indonesian Government has never fully appreciated the
menace of Communism and is probably as much concerned over the diplo-
matic slight by the Chinese Communists as it is over the prospect of
increased Chinese Communist activity.
NEAR EAST
Oil company dividends may be withheld from Iran:
3.3(h)(2)
The Anglo-Iranian Oil Company probably will
withhold from the Iranian Government 1,600,000
pounds, Iran's share of the company's forth-
coming 1950 profits distribution dividentls, if
there is "no improvement in the Iranian atmosphere. " It may, however,
use this sum as a "sweetener" if there is any progress towards a settle-
ment of the dispute.
Comment: The AIOC excuse for withholding
payment would be that Iran has already received 7,000,000 pounds in
advance royalties this year, and that this includes a share of 1950 profits.
The UK continues to assume that the application of financial and other forms
of pressure, in the present circumstances, is the best means of eventually
bringing the Iranians to terms. The British Government believes that a
more conciliatory policy would be regarded as a sign of weakness, both by
the Iranians and by domestic UK critics.
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EASTERN EUROPE ,
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The Yugoslav Government, concerned over
possible Soviet aggression,- has asked the US
not to support adjournment of the UN General
Assembly. UN delegate Bebler indicated that
he did not intend to discuss this matter widely with other delegations,
apparently in order to avoid spreading the Yugoslav Government's appre-
hension. According to Bebler, the Yugoslav Government sees grave
danger of general war following any breakdown of the Korean armistice
talks. 3.3(h)(2)
C2ninant;
The military pre-
parations of the Balkan Satellites have reached a point, however, where
aggression could be launched with little or no warning. On 13 July Tito
stated publicly that the situation on Yugoslavia's borders had grown worse
while the Kremlin was making peaceful gestures in Korea, and warned
against any false optimism regarding Korean armistice negotiations.
intlustriaLgooneratIon nlanned among Czechoslovakia East Germ ay, 3.3(h)(2)
arid Tolandz
tiff
the 3.3(h)(2)
East German Office for Research and Tech-
nique recently visited c21Wchos1ovakia and ,
Poland to discuss industrial cooperation among the three countries. Under
the-pla.n, the three countries would specialize in mutually complementary
ustrial fields.
Poland would become the iron-ore producing
center of the Satellites; C4eichoslovairia would process the Polish ore and
become the heavy machinery arsenal of the Satellites; while East Germany
would be developed into the petroleum producing partner.
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Commentn An inter-Satellite economic entente
of this nature has been discussed off and on for several years and is prob-
ably a major goal of CEMA, the Soviet-controlled Council for Economic
Mutual Assistance. Current economic planning in the three countries is
consonant with this target.
Czechoslovakia and Poland signed an agreement
in 1948 to cooperate in developing the Moravian-Silesian Basin into a
second Ruhr, although little has been accomplished to implement its
provisions. Pfland, with extensive aid from the USSR, is expanding
M s raw steel making facilities under the current Six Year Plan (1950-55)
The Czechoslovak Five-Year Plan substantiates the foregoing repork.
tha'IL this country will become the heavy industry center of Eastern Europe.
The Soviet Union, reversing its post-wax
loalng activities, is currently rebuilding the extensive World War
synthetic fuel production facilities in East Germany. Goals for 1955
include the production of 78y00 Witte' of gasgthe and 475,000 tons of
diesel oil, in addition to special products such as jet fuel, aviation gaso-
line and lubricating oils.
WESTERN EUROPE
9. Comatnntsaynr._n_n_juggaffe
The trade impasse continues in Berlin, with
the USSR showing no sign of permitting the free flow of Berlin export&
In retaliation, the West is withholding approval of the interzonal trade
agreement, the East German Government has reacted by stopping coal
supplies to West Berlin and is threatenting to cut off electric power deliveries.
To alleviate the hardship inflicted on West Berlin manufacturers, US
authorities reti7;oxpsidering the 1.1130 on a small scale, of additional com-
mercial airliners to move most of the backlogged goods out of BerlIn.
itra the event this measure proves inadequate,
a military airlift could be started, though such a step is considered too
spectacular and far-reaching in its implications for the moment. The
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West Berlin Senate, in an extraordinary session on 18 July, talked in
terms of "preparing for difficulties," a new blockade, and the substitution
of Berlin for Korea as a target of Soviet activities. The spirit of resistance
among the Berliners was evident at the meeting. Some Berlin leaders,
Including Mayor Reuter, feel that the present situation will be alleviated only
when Berlin acquires a guaranteed "open corridor" to the West
0. -Precarious coalittion is in nroqpk_cl for ?raace:
to
3.3(h)(2)
The US Embassy in Paris does not anticipate
an early solution of the party differences that
now prevent the formation of a government.
It still appears certain that the next government
will be Centrist, without Gaullist support, and based on a compromise among
the heterogeneous partners who campaigned together against both Communists
and Gaullists.
Nevertheless, Socialist sentiment against.
participation is increasing, partly because non-Gaullist Rightists have
voted with the Gaullists to deprive Socialists of Assembly chair-
manships. The thoratelit tsitive dividing the middle-of-the-road parties
As =that of state aid to church schools. A compromise appears possible
on-the Socialist demand for wage increases geared automatically to price
rises.
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A few prominent leaders believe that the only
government possible at this time is one including the Gaullists and e4clud-
ing- the Socialists.
Comment: Inasmuch as a government must -
be formed before the Assembly can adjourn for its annual vacation ilk
August, it is most unlikely that the next government can be based on a,
sound compromise on the church-school question, or even on the wage
issue. Hence for at least the next two monthit.it can be expected that France
will be governed by a weak middle-of-the-road coalition. Without the
Socialists, it will be a minority government; with them, it will be com-
mitted only to temporary and superficial compromises.
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J. NIV.T tal:A..� J. L.I.11 J.
LATIN AMERICA
11. Cat113 d'etat planned in Bolivia,:
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Fifty-two crude bombs, manufactured by members
of the Nationalist Revolutionary Movement,
were seized at Catavi last week and 20
persons were arrested,
an Indian enter-
ing Catavi on the nig to � u y carries ri e car ri es. He com-
mented that many more cartridges were probably smuggled in the same
way.
3.3(h)(2)
Comment: Bolivia is now in dire need of
foreign exchange, and a further weakening of its economy would seriously
threaten the country's stability.
There have been several reports that the
Nationalist Revolutionary Movement will attempt a coup on 6 August. On_
this date Congress would have chosen the president if the Sunta had not
wilified the May elections -- in which the Nationalist Revolutionary Move-
ment candidate received a large plurality but not the required majority.
The army apparently is still loyal to the Xunta.
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