CURRENT INTELLIGENCE BULLETIN - 1954/08/25

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03006400
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: August 25, 1954

for Release:
3.3(h)(2)
3.5(c)
I
0
/34
25 August 1954
Copy No. 80
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. 16`
NO CHANGE IN CLASS X
Li DECLASSIFIED
CLASS. CHANGED TO: TS S
NEXT REVIEW DATE' .2.,0-10
AUTH: HR 70-2
DATE: 7 Xi', go REVIEWER: _
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. Severe Japanese reaction to Korean activity on Liancourt Rocks
expected (page :).
2.
SOUTHEAST ASIA
3. Viet Minh continues large stockpiling pro,.;rarn (page 4).
4. French Associated States minister reported considering "use" of
Bao Dai (page 5).
NEAR EAST - AFRICA
5. Comment on Arab proposals for Middle East defense (page 5).
WESTERN EUROPE
6. Adenauer still sees hope for EDC (page 6).
LATIN AMERICA
7. Comment on new Brazilian president (page 7).
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FAR EAST
1. Severe Japanese reaction to Korean activity on Liancourt Rocks
expected:
A,.nbassador Allison believes the recent
establishment of a lighthouse on the
Liancourt Rocks by South Korea will
cause serious repercussions in Japan.
The Japanese government will be unable to ignore this latest
Korean action, Allison feels, because the government, press and
citizens are highly sensitive regarding the issue of the sovereignty
over the rocks.
The Japanese Foreign Ministry has advised
the American embassy that a government patrol vessel was fired on
fro41 the Liancourt Rocks on 2.3 August. The ministry will )rotest
the action but intends to keep the matter confidential unless the South
Koreans make it public.
Comment:
If these provocative actions become generally
known, the Japanese government will be under extreme pressure to
take retaliatory measures, including steps against Korean residents
and possibly to expel the Korean mission. Japan has recently armed
its patrol vessels in the area.
2.
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NON?
SOUTHEAST ASIA
3. Viet Minh continues large stockpiling program:
Heavy Chinese Communist aid to the Viet
Minh continues, according to French infor-
mation given the American army attach�
in Saigon. The rate of aid has been ac-
celerated since the cease-fire on 27 July
n an .tternpt to stockpile supplies before the arrival of international
Inspection teams. Included in the shipments are large quantitites of
munitions, artillery pieces, and vehicles.
The army attach�omments that while
inspection teams will perhaps be able to control to some extent sup-
plies entering Indochina over main routes, the cessation of illegal
traffic is not expected. Materiel currently entering the country is
Intended not only for resupply but also to equip new units.
Comment: This report apparently confirms
the expectation that Chinese aid would continue after the cease-fire at
a level comparable to the 3,000-tons-a-month figure reported by the
French early this year.
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Noe
4. French Associated States minister reported considering "use" of
Bao Dai:
French minister for the associated states
Guy La Chambre told Ambassador Dillon
in Paris on 23 August that he is becoming
convinced that the French government may
have to use Bao Dai again in spite of his "grave weaknesses." La
Chambre fears that without Bao Dai's influence, much time might be
lost in rival jockeying for power and that his return would have to be
with the understanding that he take an active role in the government.
Comment: La Chambre's views on the value
of Bao Dai represent an abrupt departure from the line taken by
French officials over the past several weeks, but do not appear to
reflect any change in France's effort to bring about a new Vietnamese
government more amenable to its ends than Diem's.
The jockeying for power to which La Chambre
refers consists exclusively of the activities of certain Vietnamese
politicians who have virtually no local following and whose only hope
for success is to win French support.
NEAR EAST - AFRICA
5. Comment on Arab proposals for Middle East defense:
The current Egyptian and Iraqi proposal
that a modified Arab League Collective Secur-
ity Pact should form the basis for Middle East
defense inaugurates a new period of bargain-
which little progress on defense arrangements
can be expected. Membership in the proposed pact would be open to
Turkey, Iran, Pakistan, Britain and the United States, as well as to
the Arab countries.
This plan is substantially the same as the
Arab counterproposal to the West's ill-fated Middle East Command and
Middle East Defense Organization proposals of 1951 and 1952 respec-
tively. Its resurrection now represents Egyptian success in delaying,
if not preventing, Iraqi adherence to the Turkish-Pakistani pact.
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Fixation on the Arab League Collective
Security Pact indicates that the Arab states are still unable to con-
ceive of military co-operation with the West except on essentially
their terms.
WESTERN EUROPE
6. Adenauer still sees hope for EDC:
bly in a
Although worried about Britain's attitude
toward European integration, Chancellor
Adenauer told Ambassador Conant that he
is encouraged by the united stand of the
five EDC nations at Brussels against Mendes-
France's treaty modifications. Adenauer be-
lieves that as long as it is apparent that
France will be isolated if it rejects the
renc premier may yet present the treaty to the assem-
manner which would make ratification probable.
American officials in Bonn add that the
chancellor told the Bundestag Foreign Affairs Committee that if EDC
failed, the five pro-EDC states, ritain and the United States would
confer on the next move on German rearmarnent. Thus far, the
opposition Social Democrats are showing reserve in criticizing
Adenauer, who seems to feel that he can get their co-operation in
finding an alternative should EDC fail.
Comment: Opinion in Paris political circles
on Mendes-France's intentions remains divided, though the press in
both France and West Germany takes a pessimistic view regarding the
treaty's prospects.
Socialist Party leader Guy Mollet, who has
consistently refused to participate in any governments since the last
election, has told the American embassy that he is now ready to offer
to join Mendes-France's cabinet if the latter will call for a vote of
confidence on the EDC treaty with the modifications acceptable to the
other Brussels conferees. Mendes-France has indicated a preference
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for avoiding a vote of confidence, but in any case faces the task
of reconstructing his cabinet. His agreement to Mollet's proposi-
tion would seem to constitute the best remaining chance for EDC
ratification by France.
LATIN AMERICA
7. Comment on new Brazilian president:
Joao Caf�ilho, who succeeded to the
?residency on 24 August as a result of the
suicide of President Getulio Vargas, rose
to the vice7presidency as a result of oppor-
tunistic "politicking." In 1945 he reportedly backed the Communists'
candidate for the presidency in order to gain votes for his own candi-
dacy to the Federal Chamber of Deputies.
During the past few years, however, he is not
known to have been connected with any Communists or prganiza-
tions, and he has made several speeches praising the role of United
States capital in the development of Brazil. He is not a member of
Vargas' Brazilian Labor Party, but of the Popular Socialist Party
headed by the well-known demagogue Adhe7.nar de Barros, erstwhile
contender for a nomination for the presidency.
ecause of his background it can be expected
that the armed forces--which, with an assist from two former presi-
dents, forced Vargas to resign early on 24 August--will keep a close
watch on Caf�ilho and that he will go along with their demands. The
government's orientation will continue to be conservative, anti-
Communist and pro-United States.
There have been numerous press and radio
reports of large demonstrations throughout much of Brazil, but the
police, aided by the armed forces, can be expected to prevent these
demonstrations from developing into serious riots.
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