CURRENT INTELLIGENCE BULLETIN - 1954/10/12

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03000836
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: October 12, 1954

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12 October 1954 3.5(c)
Copy No. 80
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS c<
Li DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: 10 Q
AUTH: HR 70-2
DATE: 7 5.;vk TO REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. Soviet support seen for Chinese Communist complaint to
UN (page 3).
2. USSR makes new loan to Afghanistan (page 3).
3. Peiping reported bidding for "defense alliance" with India
and relations with Indian border states (page 4).
FAR EAST
4. Japanese becoming antagonistic toward American procure-
ment policies (page 4).
5. Chinese Nationalist naval forces score success near Tachens
(page 5).
SOUTHEAST ASIA
6.
NEAR EAST - AFRICA
7. Turkey favors indigenous approach to Middle East security
(page 7).
8. Egyptian regime reported in crackdown on Moslem Brother-
hood (page 7).
LATIN AMERICA �
9. Brazilian elections may give Communists 14 percent of lower
house seats (page 8).
* * * *
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GENERAL
1. Soviet support seen for Chinese Communist complaint to UN:
Ambassador Bohlen in Moscow expects
the Soviet delegation at the UN to sup-
port Chinese Communist premier Chou
En-lai's complaint, made in a cable to
the General Assembly, against "the aggressive action of the
United States government in interfering with the Chinese peo-
ple's liberation of Formosa." Chou asks the General Assembly
to call on the United States to withdraw all its military personnel
from Formosa, the Pescadores and Nationalist-held offshore
islands.
Bohlen doubts that Chou's move presages
an early military operation against Formosa. He believes the
Sino-Soviet motive is to introduce a controversial issue into the
UN for its devisive effect among nations of the free world.
2. USSR makes new loan to Afghanistan:
The Soviet Union and Afghanistan signed
an agreement on 5 October providing for
a Soviet loan valued at $2,100,000, ac-
cording to the Afghan foreign minister.
The new loan is to be used for the purchase of a road-testing
laboratory and road-building machinery to pave Kabul streets.
Comment: This is the third Soviet-
Afghan agreement signed this year providing for economic and
technical assistance. A January agreement provided for a
$3,500, 000 Soviet loan for building grain-processing plants and
in April a $600,000 loan was made to construct gasoline storage -
facilities in Kabul.
All three projects apparently are to be
carried out with the assistance of Soviet technicians. The Ameri-
can military attach�n Kabul recently reported that 45 Soviet
"families" had been flown into Kabul in addition to an unknown
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number of single male personnel. Afghan government officials
identified the Soviet personnel as technicians to be used on the
various Soviet-sponsored projects.
3. Peiping reported bidding for "defense alliance" with India and
relations with Indian border states:
Chinese Communist diplomats in New
Delhi are reported to have proposed
conclusion of a "defensive alliance"
with India and to have been seeking
direct relations with the Indian border states of Nepal, Silcklm,
Bhutan and the Kashmiri province of Ladakh.
the Chinese are pressing for unrestricted trade rights
in the latter three areas and the settlement of undemarcated
boundaries between India and all the border states.
Comment: Peiping and New Delhi
have both indicated that they regard their April 1954 agreement
on Tibet as the equivalent of a nonaggression treaty. India
would probably reject any Peiping proposal for a formal treaty.
Chou En-lai said on 23 September that
Peiping was prepared to establish diplomatic relations with
Nepal, which is believed to be the primary target for increased
Communist subversion in the border states, and Peiping is ex-
pected to work for footholds in the other areas as well. During
his forthcoming visit to Peiping, Nehru is unlikely to agree to
increased Chinese Communist ties with any of the border states
other than Nepal.
FAR EAST
4. Japanese becoming antagonistic toward American procurement
policies:
The exclusion of Japan from bidding on
an FOA contract for rolling stock for
Korea and FOA's subsequent reduction
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**gime
from 100 to 25 of the number of locomotives for India in a
Japanese bid have caused widespread dismay and could affect
Japan's future orientation toward the free world, according to
Ambassador Allison. Japanese editorials and official state-
ments have treated the locomotive issue as evidence of Ameri-
can "undependability" and have dismissed press explanations
from Washington as neither "fair nor convincing." The conclu-
sion is being drawn that Japan has no alternative but to push
vigorously for more trade with Conimunist areas,
Comment: The Japanese were de-
clared the low bidders on the Indian locomotive deal and had
expected to obtain the entire amount. Half of the offering was
awarded, however, to an American firm, and recently the
order for the Japanese was reduced by an additional 25.
Japan counts on American leadership
to .11i-ft, free world restrictions against Japanese trade and to
S_:bstitutes for Japan's former trade with China Thus,
it is particularly sensitive to American actions which suggest
discrimination.
5. Chinese Nationalist naval forces score success near Tachens:
Two Chinese Nationalist destroyer
escorts are reported to have sunk two
Communist naval patrol vessels which
were escorting nine motorized junks
in Tagichou Bay west of the Tachens on the night of 10 October,,
Several of the junks were reported damaged.
Prior to the engagement, the Nation-
alist ships had been patrolling north of Ichiang Island, and had
been fired on by Communist artillery on Toumen Island, lo-
cated about nine miles northwest of the main Tachen group.
Comment: Aside from this clash, the
situation in the offshore islands was quiet over the week end.
Communist artillery has fired only 88 rounds at the Quemoys
since 8 Octobe r, and Communist air patrols near the Tachens
have been infr 3quent.
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That this may be a lull before further
Communist moves against the offshore islands is suggested by
an 8 October Peiping broadcast that all units "are expected to
inflict heavier blows" against the Nationalists and "strive for
greater victories."
SOUTHEAST ASIA
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NEAR EAST - AFRICA
7. Turkey favors indigenous approach to Middle East security:
Turkey and Iraq should move toward a
bilateral security arrangement rather
than revive the Middle East defense
organization (MEDO) concept as re-
cently suggested by Iraqi prime minister Nun i Said in London
and Paris, according to Turkish vice premier Zorlu. Zorlu
also told Ambassador Warren he feels strongly that the indig-
enous character of the Turkish-Pakistani agreement appeals to
Middle East countries.
Zorlu offered no objection to Iraq's
seeking bilateral agreements with Pakistan and Turkey, and
thought that both agreements could later be tied in with the
Turkish-Pakistani agreement.
Comment: Nun's, ambiguous state-
ments about Iraq's intentions have been a major factor in the con-
tinuance of a stalemate in Middle East defense planning.
Nun i is currently scheduled to meet
Prime Minister Menderes in Istanbul to discuss mutual defense
problems. Ankara continues to explore means of strengthening
Middle East defense, but has little hope that much progress will
be made in these talks.
8. Egyptian regime reported in crackdown on Moslem Brotherhood:
Egyptian prime minister Nasr has de-
cided not to delay further in cracking
down on antiregime Moslem Brotherhood
leaders
Nasr plans this as a
preparation or e signing o e Anglo-Egyptian agreement and
the reopening of the universities.
on the night of 8 October, Egyptian police began to arrest
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Noise
Brotherhood leaders and to conduct house searches of 30
government employees suspected of being Communists.
Comment: The regime may be in-
creasing its activities against the Moslem Brotherhood in
preparation for the expected announcement of the signature of
the final agreement on the Suez base. Reports that over 100
high-ranking police officers have been dismissed during the
past ten days suggest an effort to purge dissident and unrelia-
ble elements before publication of the agreement.
LATIN AMERICA
9. Brazilian elections may give Communists 14 percent of lower
house seats:
Fragmentary returns from the 3 Octo-
ber congressional elections in Brazil
indicate that 45 of the 326 seats in the
Chamber of Deputies will go to Commur
fists, unless there is preventive court
action, the American embassy in Rio de Janeiro reports.
Comment: Statements from the Supreme
Electoral Court in the past few days suggest that many victorious
Communist and pro-Communist candidates may be barred from
taking their seats, even though all of them campaigned under the
labels of other parties including some of the center and right.
The returns suggest a growth of leftist sentiment generally in
Brazil as well as a marked gain in prestige for the Communist
Party, which was outlawed in 1948. In the 1950 elections, only
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one Communist, who rn on another party's ticket, was elected.
In 1947 the Communist Party had won about 10 percent of the
popular vote.
It is unlikely that the two major center
parties and their smaller allies will be outnumbered by any
leftist combination in the new assembly. The outlook for a
stable government working coalition remains in question, how-
ever, particularly in view of maneuvering for the 1955 presi-
dential election.
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