CURRENT INTELLIGENCE BULLETIN - 1955/03/22

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03017437
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: March 22, 1955

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3.3(h)(2)
3.5(c)
-TOP SECRET
22 March 1955
Copy No. 88
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
54(
NO CHANGE IN CLASS IA'
E .1 DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: O LO
AUTH: HR 70-2
DATE: gJ O REVIVIVER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. Japanese government reported subsidizing visit of Peiping
representatives (page 3).
SOUTHEAST ASIA
2. Premier Diem states army morale is low (page 4).
NEAR EAST - AFRICA
3. Iranian prime minister threatens to resign (page 4).
4. Greek king dissatisfied with handling of military affairs (page 5).
LATIN AMERICA
5. Honduran chief of state threatens to turn government over to ex-
dictator (page 6).
THE FORMOSA STRAITS
(page 7)
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FAR EAST
1. Japanese government reported subsidizing visit of Peiping
representatives:
Comment: The report refers to a
39-member Chinese Communist trade mission originally sched-
uled to arrive in Tokyo on 21 March to conclude an unofficial
trade agreement with private Japanese businessmen.
The Hatoyama government has publicly
taken an official "hands off" policy toward the Chinese delega-
tion, and this is the first report that it will subsidize the visit.
The government will very likely seek an opportunity to hold pri-
vate talks on economic, and possibly political, matters, Impor-
tant conservative business organizations have thus far refused to
take part in what they believe to be a pro-Communist gathering
for essentially propaganda purposes.
Press reports on 21 March state that
the Japanese Foreign Ministry has 'rescinded an earlier decision
to limit the Chinese to the Tokyo-Osaka-Nagoya areas. Plans
call for visits to over 50 factories in these areas alone, many of
which produce military items for the American armed forces.
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SOUTHEAST ASIA
2. Premier Diem states army morale is low:
Premier Diem told an American offi-
cial on 20 March that morale in the
Vietnamese army is low, largely as a
result of the arbitrary dismissals of
officers by Defense Minister Minh. Diem stated that Minh was
favoring officers friendly to himself, and that the cabinet had
rejected Minh's request for broad powers in the demobilization
of officers. �
The commander of Vietnamese army
troops near Saigon, meanwhile, has expressed uneasiness at
finding his forces between those of the Binh Xuyen and of Cao Dai
general Trinh Minh The, who has been the recipient of about half
of Diem's confidential funds.
Comment:
Trinh Minh The recently "rallied" to the
government with much fanfare and was directed by Diem to deploy
his troops in such a way as to counterbalance the forces of the
:Binh Xuyen. General The's endorsement of an "ultimatum" to the
government by the sects on 20 March illustrates the government's
difficulty in dealing with these groups.
NEAR EAST - AFRICA
3. :Iranian prime minister threatens to resign:
Prime Minister Zahedi has informed the
Shah that either he or Seven-Year-Plan
director Ebtehaj must leave the govern-
ment and that the Shah must make the
choice, according to Minister of Court
Ala.
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The Shah replied that he has confidence
in Ebtehaj and cannot ask him to withdraw. The monarch wants
Zahedi to reconsider and establish a satisfactory working rela-
tionship with Ebtehaj.
Ala told the American charg�n Tehran
that the Shah hopes Zahedi will leave the country for medical
treatment so that within a month or two a new prime minister can
be appointed. The Shah added that if Zahedi should refuse to leave
Tehran, it might be necessary to make an "outright change" in
the government. The Shah hopes, however, that Zahedi 's depar-
ture from the government will be in circumstances enabling the
monarch to pay him high tribute for his great services to Iran.
Comment: The uncertain political situa-
tion in Iran appears headed for "Egrification shortly after the end
of the Iranian New Year's holidays in late March.
4. Greek king dissatisfied with handling of military affairs:
King Paul of Greece is disturbed by the
army's lack of combat readiness and
poor morale,
The king has
complained to Prime Minister Vapagos and Defense Minister
Kanellopoulos about the "extremely poor" appointments to gen-
eral officer rank sincq Army Chief of Staff Gikas assumed office
last November.
The king dislikes Gikas and is displeased
over his possible succession as chief of the National Defense Gen-
eral Staff. He also reportedly feels that Kanellopoulos is one of
the worst defense ministers in Greek history.
Comment: The king's reported departure
from his normal policy of n(-3TrinTeTterence in military matters sug-
gests that he foresees a change of government and is maneuvering
in support of political and military elements which the palace con-
siders reliable in opposition to the secret military society IDEA.
This society has been increasing its influence in both the political
and military spheres.
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LATIN AMERICA
5. Honduran chief of state threatens to turn government over to ex-
dictator:
Honduran chief of state Julio Lozano has
decided to resign and turn the government
over to ex-dictator Tiburcio Callas, ac-
cording to Foreign Minister Mendoza.
Lozano allegedly reached this decision
after becoming convinced that the International Bank for Recon-
struction and Development would not grant Honduras a loan. He
believes that such a decision by the bank would wreck his adminis-
tration's politically important five-year economic development
program.
Ambassador Willauer feels that denial
of the bank loan would seriously endanger Honduran political sta-
bility and that "a political upset now would have catastrophic re-
sults."
Comment: The International Bank is favor-
ably disposed to granting a loan to Honduras, but the 70-year-old
Lozano is tired and demoralized by the political struggle among the
three parties represented in his three-month-old "government of
national union."
Lozano may be inclined to abandon his
effort aimed at restoring national unity and to turn the government
over to Carias, even though he admits Carias would probably rule
despotically and deepen the political antagonisms dividing Honduran
society� On the other hand, he may calculate that a threat to re-
sign would unify and strengthen his government by dramatically
posing the disagreeable and only practical alternative, one-party
dictatorship.
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THE FORMOSA STRAITS
Report of the IAC Current Intelligence Group
for the Formosa Straits Problem
This report is based on information received in Washington
during the period 1100 hours 20 March to 1100 hours 21 March 1955.
1. Military action over the weekend was negligible. There
were continued scattered indications of the improvement of Commu-
nist fortifications opposite the Matsus and Quemoys. Offensive ac-
tion, however, was limited to scattered artillery fire on the Quemoy's.
2. The rehabilitation of Nantai airfield near Foochow is in
progress and could be completed and the field readied for jet opera-
tions within 10 days. There is no present indication of comparable
work at the other five fields in Fukien. Each of them could be read-
ied for air operations in five to ten days, however.
3. Air photos taken of the Chinese Communist air base at
Nanchang, about 300 miles northwest of the Matsus, showed only
37 MIG-15's there on 17 March. At least twice as many MIG's are
thought to be based at Nanchang, where they are apparently used
to defend against overflights of the East China coast.
4. Heavy communications activity of high precedence on a
naval administrative net between Canton and Swatow on 18 and 19
March is believed to have no direct relation to operations in the
offshore islands area. Although a 50 percent reduction in naval
communication activity in the Shanghai naval district was noted on
the same dates, it cannot at this time be traced to any movements
of naval units toward the offshore island areas.
5. The volume of Chinese Communist and Soviet propaganda
on Formosa has dropped sharply since its all-time peak at the be-
ginning of February. However, Peiping has continued to affirm its
objective of "liberating" Formosa and other Nationalist-held islands,
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La WA VILA
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and has devoted attention to the Soviet-proposed international
conference to deal with US "aggression" in Formosa. More-
over, Peiping Radio on 20 March derided any American belief
that "tactical atomic weapons" could achieve a "quick victory!'
6. The Finnish tanker Aruba, loaded with 13,000 tons of
jet fuel, is nearing the Nicobar Islands, northwest of Singapore,
possibly intending to anchor there, The Aruba's master has in-
formed the owners that neither his officers nor crew believed it
safe to enter the Singapore area in the absence of US and Chinese
Nationalist assurances. The final disposition of the Aruba's cargo
is still uncertain.
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