CURRENT INTELLIGENCE BULLETIN - 1954/05/20

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03006390
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: May 20, 1954

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Copy No. 76
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO 60
NO CHANGE IN CLASS. V
0 DECLASSIFIED
CLASS. CHANGED TO: IS S C
NEXT REVIEW DATE. .2 0 09
AUTH: HR 70-2
DATE:J./lig/Z:9_ REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. South Korea still adamant on UN proposal at Geneva (page 3).
2. Bohlen speculates on Soviet influence over Communist Chinese
action in Indochina (page 3).
FAR EAST
3. Japanese seek American loan to bolster Yoshida (page 4).
SOUTHEAST ASIA
5. French say Viet Minh underground capabilities in south Vietnam
increased (page 6).
= 6. Ely agrees to American training of Vietnamese army (page 6).
7. India to approach Peiping on interference in Burma's internal
affairs (page 7).
8. Petrov revelations may implicate Indonesian diplomats (page 7).
SOUTH ASIA
9. East Pakistan government's position threatened (page 8).
NEAR EAST - AFRICA
10. Saudi Arabia may request ARAMCO to resume exploration in
disputed Trucial area (page 9).
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GENERAL
South Korea still adamant on UN proposal at Geneva:
The American delegation at Geneva reports
it is making no headway in attempting to
convince the South Korean delegation not to
include a specific demand for a Chinese troop
withdrawal in the proposed 16-nation state-
ment of principles. The delegation believes
that Foreign Minister Pyun is unwilling to
suggest any changes to Rhee on this point,
and that no progress can be made unless Rhee can be persuaded to
change his position.
Meanwhile, Ambassador Dean reports that
Rhee would agree to the statement if it were modified to provide also
for the withdrawal of North Korean forces, or if the United States
would, in a secret letter, agree to support South Korea in an attack
against the North Korean forces after the Chinese withdrawal.
Comment: Communist refusal to accept
the statement of general principles could provide the West with a
sound moral and propaganda basis on which to break off the Korean
talks.
In conversations with Ambassador Dean,
Rhee has been particularly angry over American refusal to build up
his army to 35 divisions. He also objects to the exclusion of South
Korea from the proposed Southeast Asia defense alliance and American
insistence that Japan be included as a source of supply for aid goods.
2. Bohlen speculates on Soviet influence over Communist Chinese action
in Indochina:
Ambassador Bohlen has reiterated his belief
that Soviet foreign policy in its present phase
is controlled by the determination to retain
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all postwar Communist acquisitions, and the desire to avoid crises
which might lead to Soviet military involvement.
He speculates that Soviet influence on Commu-
nist Chinese action is exerted in direct ratio to the risk involved for the
Orbit. He believes that if it were evident to the USSR and the Chinese
that the risk of a major conflict over Indochina was real, then Soviet in-
fluence would be decisive. Bohlen thinks it is unlikely that the USSR
would be prepared to risk military involvement over a remote area which
is of little direct interest to the Soviet state.
However, Ambassador Bohlen points out, the
Communists may believe that because of Western disunity they can pro-
ceed to acquire all of Indochina without a serious risk of a major conflict.
Comment: Although the existence of a Commu-
nist regime in Indochina would not be essential to Soviet security, the pres-
tige of Moscow as well as Peiping is heavily committed to the fortunes of
the Viet Minh. Available information does not support a belief that Moscow
and Peiping are at odds on Indochina policy. Hints from Soviet sources
that Peiping is more aggressive than Moscow wishes are believed to be
diplomatic maneuvers.
While Moscow and Peiping apparently hope to
avoid internationalization of the Indochina war, the Sino-Soviet propaganda
line developing since early April seems to be in preparation for possible
large-scale Chinese intervention in response to internationalization.
FAR EAST
3. Japanese seek American loan to bolster Yoshida:
High Japanese government officials approached
American bankers in Tokyo last week regard-
ing the opening of negotiations for a $150,000,000
credit while Prime Minister Yoshida is visiting
the United States next month, Ambassador Allison in Tokyo reports. These
officials stated that if Yoshida returned empty-handed, it would be a fatal
blow to the prime minister and his Liberal Party.
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The embassy, on the other hand, believes such
a loan might delay the steps which the Japanese themselves could take to
improve their economic situation and that the United States might be ac-
cused of "buying" Yoshida.
Comment: The Japanese, for political rea-
sons, attempted unsuccessfully to get a loan in 1952 to help them through
the critical general elections.
SOUTHEAST ASIA
4.
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5. French say Viet Minh underground capabilities in south Vietnam increased:
greatly enhanced,
The recent transfer of police control in south
Vietnam to the quasi-gangster Binh Xuyen
organization has so weakened security that
Viet Minh paramilitary capabilities have been
Hundreds of
former police personnel have resigned and will be replaced by inexperi-
enced Binh Xuyen appointees.
Viet Minh paramilitary capabilities in north
Vietnam are considerable, but there is no evidence they are increasing.
Comment: French officials earlier estimated
that the anti-Viet Minh potential of the Vietnamese police would not be
weakened by the Binh Xuyen's assumption of control. They said the trans-
fer of police control was disastrous only because of its effect on the in-
ternal political situation.
6. Ely agrees to American training of Vietnamese army:
General Ely, French armed forces chief of
staff, who is now in Saigon, has accepted in
principle General O'Daniers concept of train-
ing the Vietnamese national army with the
help of American advisers, according to the American embassy in Saigon.
He also agreed that American advisers should be attached to Vietnamese
units, but emphasized there would be no American participation in opera-
tional planning.
Ely did not assent to Mantel's insistence on
the formation of Vietnamese divisions. O'Daniel believes nine divisions
could be formed by October and then commence operations northward
from southern Indochina.
Comment: Over a period of years the French
have reluctantly accepted American economic, military and technical aid.
They have strongly resisted, however, "internationalization" of the war
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to a point which might prejudice the essentially French character of the
anti-Viet Minh effort.
General Navarre, in particular, has opposed
American participation in the training of Vietnamese troops.
7. India to approach Peiping on interference in Burma's internal affairs:
Comment: Indian overtures would almost
certainly not have any practical effect on Peiping's policies toward Burma.
The incident suggests that New Delhi continues to believe in the reason-
ableness of the Chinese Communist regime.
Since its establishment in 1950, the Chinese
Communist embassy in Rangoon has only thinly disguised its support
of left-wing opposition elements and has openly attempted to gain con-
trol over Burma's Chinese minority.
8. Petrov revelations may implicate Indonesian diplomats:
A Sydney newspaper reported on 17 May,
under a London dateline, that evidence sup-
plied Australian authorities by Vladimir Petrov
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"will show that Indonesian diplomats in Australia were working closely
with the Russian embassy on the Red network in Southeast Asia." The
Ministry of External Affairs in Canberra was noncommittal when ques-
tioned on the report by the American embassy, but an official of the
described the story as "another embarrassing
British leak."
Comment: This report suggests that the
Indonesian foreign service has not escaped Communist infiltration
similar to that reported in other ministries since the advent of the Ali
government last July.
There is some evidence that covert Commu-
nist activity in Southeast Asia was coordinated in Australia in the imme-
diate postwar years and that more recently such coordination has centered
in Indonesia. Arrangements have been made for the opening of a Soviet
embassy in Djakarta in the near future.
SOUTIl'ASIA
9. East Pakistan government 's position threatened:
Following the riots on 15 May in East Pakistan,
the situation is "distinctly ominous" and serious
tension in five major cities is reported by the
American consulate general in Dacca. The army
commander in the province has strongly urged
the imposition of martial law.
The provincial government seems unable to
control the situation and apparently is trying to place the blame for the
riots on the mill owners and the central government in Karachi. The
consulate general believes this may encourage Communist exploitation of
the situation.
One provincial minister, a strong pro-Commu-
nist, has helped spread a rumor--probably false--that refugees from India
plotted the massacre and that most of the 360 dead were native Bengalis.
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Comment: Unless East Pakistan's Chief
Minister Fazlul Huq and conservative elements of his United Front
cabinet take firm action to re-establish order and curb Bengali xeno-
phobia, Communist elements spearheaded by their supporters in the
ministry may make a strong bid for control of the province.
Karachi is probably reluctant to increase
friction with the provincial government by imposing martial law. It
has taken advantage of the riots, however, to begin a general roundup
of Communists in both East and West Pakistan.
NEAR EAST - AFRICA
10. Saudi Arabia may request ARAMCO to resume exploration in disputed
Trucial area:
King Saud is "alarmed" by the continued
operations of British oil companies in the
disputed Trucial Coast region and asked the
Arabian-American Oil Company (ARAMCO)
on 16 May when it could send an exploration party into the area, accord-
ing to Charg�ones in Jidda. The company replied that a party could be
ready in four or five days.
Comment: The British have repeatedly
rejected Saudi demands and American recommendations for suspension
of all oil operations in the disputed area. Moreover, they have re-
emphasized that entry by an ARAMCO party would be forcibly resisted.
Because of the possibility of a clash, ARAMCO
may use delaying tactics before acceding to a Saudi request to enter the
region. The company is, however, in a poor position to refuse Saudi
demands for such exploration.
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