CURRENT INTELLIGENCE BULLETIN - 1954/01/16

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03003782
• 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 16, 1954

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16 January 1954
Copy No.
84
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. _e_mi--: '
DECLASSIFIED
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Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. Molotov regards Berlin meeting as certain (page 3).
2. India may move to placate Peiping after POW release (page 3
NEAR EAST - AFRICA
3. Iran informally requests additional American financial aid (page 3).
4. Iranian officials seriously concerned over Zahedi's illness (page 4).
5. Appointment of a Turk as Libyan defense minister appears imminent
(page 5).
EASTERN EUROPE
6. Riddleberger comments on Djilas affair (page 5).
7. Poland launches drive for Western consumer goods (page 6).
WESTERN EUROPE
8. Austrian intentions for the Berlin conference revealed (page 6).
LATIN AMERICA
9. President Arbenz asks El Salvador to curb plotting against Guatemala
(page 7).
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GENERAL
1. Molotov regards Berlin meeting as certain:
In an interview with French ambassador
Joxe on 12 January, Foreign Minister
Molotov treated the Berlin conference as
a certainty and said that the differences
of views regarding the site presented no great difficulties. Molotov
expressed no new thoughts on substantive issues, but stressed that
the USSR's chief preoccupation was with security, disarmament, and
a desire to see a reduction in international tension.
2. India may move to placate Peiping after POW release:
American representative Kenneth Young
suggests that after 22 January, New Delhi
may attempt to make amends to Peiping
for the Indian decision to return the Korean
war prisoners to the two sides. A senior
member of the Indian NNRC staff has repeatedly mentioned to Young
the problem of compensating the Communists for their "psychological
defeat" on the prisoner question. Such a move might be made either
in the UN General Assembly or in a Korean political conference.
Comment: The Indians are expected to
continue, in the UN and in any Korean political conference, to use
the technique they adopted at Panmunjom of siding alternately with
the UN and the Communists. They are not likely on their own initi-
ative to raise new problems in an attempt to placate Peiping, but may
re-emphasize their earlier theses, such as the UN Command's respon-
sibility for the failure of POW negotiations or the necessity of admitting
Communist China to the UN as a precondition to a general settlement in
Asia.
NEAR EAST - AFRICA
3. Iran informally requests additional American financial aid:
Foreign Minister Entezam and Finance
Minister Amini asked Ambassador Henderson
infoimally on 11 January whether the United
States would give Iran additional dollar aid
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to meet its budget problems. The ministers suggested that the
government cannot obtain Majlis approval for an unbalanced budget
without assurances of American aid to tide Iran over until an oil
settlement is reached.
Henderson reported that the Iranian
government seemingly hesitated to make a formal request because
it did not want to be rebuffed.
Comment: Iran has been operating at
a monthly budget deficit of $3,0002000 to $5,000,0009 which has been
met by American emergency financial aid totaling $45,0009000. When
this aid is exhausted in April, Iran will have no means to meet a con-
tinued deficit.
The financial condition of the country will
be a major problem before the new Majlis, and Prime Minister Zahedi
must show economic progress if he is to maintain control for any length
of time.
4. Iranian officials seriously concerned over Zahedi's illness:
Iranian cabinet ministers are becoming
increasingly concerned over the health
of Prime Minister Zahedi, who has been
suffering with a high fever. They have
been unable to see him for several days. Because of an old wound
he is subject to pulmonary complications.
Ambassador Henderson points out that
Zahedi's illness is particularly unfortunate when Majlis elections
are about to begin and oil discussions with the British are pending.
Henderson adds that if Zahedi is compelled
to retire from public life because of continued illness, there appears
to be no one in sight with the qualifications to take his place.
Comment: Should Zahedi be unable to
continue in office, his successor would be subject to eventual Majlis
approval. Possible candidates would be Minister of Court Ala, a
former prime minister, or Foreign Minister Entezam.
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Appointment of a Turk as Libyan defense minister appears imminent:
King Idriss is pressing for the early appoint-
ment of a retired Turkish general as Libyan
minister of defense and is unconcerned over
the constitutional difficulties raised by his
nationality,
Comment: Idriss' interest in appointing
General Betin as minister of defense may indicate his desire to bring
the Libyan army under his personal control by replacing the present
competent minister with an alien responsible to him. Prime Minister
Muntasser in the past has strongly objected to the king's interference
in cabinet appointments. Idriss' actions accordingly will probably strain
further his relations with the prime minister.
EASTERN EUR,QPE
6. Riddleberger comments on Djilas affair:
Ambassador Riddleberger reports that many,
but not all, foreign mission chiefs with long
experience in Yugoslavia believe the crisis
over Vice-President Djilas will be "plastered
over," perhaps with a reprimand. Riddleberger thinks that the decision
will be made only after Tito, who returned to Belgrade from vacation on
13 January, has personally studied the case.
This study is presumably being made in the
light of Djilas' increasing popularity, his party record, and particularly
his relationship with important fellow Montenegrins, many of whom are
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generals in the army. Riddleberger notes that however much some
of the inner circle may agree with Djilast ideological views, Tito
faces a difficult political problem since pressure has been brought
on top leaders by party workers who are alarmed at the favorable
reception of Djilast views in many communities.
Poland launches drive for Western consumer goods:
mit
e proposa
Polish commercial counselors stationed
in most Western countries were summoned
to Warsaw early in December to be briefed
on details of a plan to increase imports of
consumer goods. In turn they were to sub-
o the countries to which they are accredited,
The Polish commercial counselor in France,
� for example, was returning to Paris on 9 December with a proposal for
the purchase of $3,500,000 worth of "individual consumer goods" and
$1, 500,000 worth of automotive equipment.
Comment: Orbit countries have recently
been trying to procure foodstuffs from non-Communist countries, but
this is the first firm evidence of such a coordinated attempt in any
single country to purchase increased quantities of consumer goods
from the West.
The proposed imports of consumer goods
from France amount to almost half the value of all imports authorized
under the current trade agreement. As recently as last October emphasis
was placed on imports of capital goods.
WESTERN EUROPE
. Austrian intentions for the Berlin conference revealed:
Ambassador Thompson reports that Austria
has developed no firm plan for the Berlin
conference, but plans to ask in general terms
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for revision of Article 35 of the long draft treaty and for a settlement
of all Soviet claims to former German assets in eastern Austria for a
sum not exceeding $200,0005000. The Austrians have indicated, how-
ever, that if the four powers agreed they would accept the current text
of Article 359 under which the USSR would retain some properties.
If the neutrality question is raised by the
USSR, Austria will reiterate its intention to avoid all military alliances.
Austria would not accept a neutrality clause in the treaty unless accom-
panied by an ironclad security guarantee by the four powers.
Comment: Although the Vienna government
issued an informal statement last summer expressing its unwillingness
to join post-treaty military alliances, the West has been emphatically
against any commitment by Austria which would inhibit its freedom to
enter into associations compatible with the UN charter.
Moscow has not yet replied to Vienn 's note
of 5 january requesting Soviet agreement to Austrian participation in
the Berlin conference.
LATIN AMERICA
9. President Arbenz asks El Salvador to curb plotting against Guatemala:
Nicaragua,
President Arbenz told the Salvadoran ambas-
sador on 12 January that the Guatemalan
government was threatened with a revolution
led by exiles in El Salvador, Honduras, and
and by "certain Guatemalan army officers."
Arbenz asked that the Salvadoran
government curb the activities of these exiles.
The Salvadoran ambassador, who replied
that his government was not aiding the exiles, countered with a request
that Arbenz withdraw his support from Salvadoran Communists in
Guatemala.
Ambassador Peurifoy comments that this
incident is indicative of extreme nervousness in high Guatemalan
government circles.
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There has been no confirmation of a
Guatemalan press report of late December that the leaders of the
various opposition groups had met in El Salvador and agreed to
recognize Ydigoras as "supreme chief."
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