DAILY SUMMARY - 1949/04-1949/06

• Document Type: SPECIALCOLLECTION
• Collection: Daily Summary Collection
• Document Number (FOIA) /ESDN (CREST): 06749332
• Document Creation Date: December 3, 2018

Approved for Release: 2018/11/19 006749332 GENERAL I. Consideration of Italian claims in North Africa urged-- lET!gr�ri ThTinUgiForz-E-7.-Erraa111-17ciEFISador Dunn that he has not yet decided whether to resign over the African colonies issue. Sforza. declared his resignation will be forced, however, if it becomes apparent to the Italian public that the US and UK have no regard for Italy's desire to irrarticipate in North Africa. Sfo)F..za indicated that follow- ing recent unsuccessful conversations with the British he has begun to suspect the UK of wanting to exclude Italy from North Africa. Dunn expressed his conviction that the US would be gravely mistaken in supporting a solution for Erttrea and Tripolitania that excluded Italy. He suggests that the Department of State publicly declare that some ar- rangement should be made whereby the Italian peoole can continue to play a role in the development of North Africa. THE Cf. .A. HAS NO OBJECT TO 74; TIS THI, NO. Document No. 011 3 0 JUN 194c 1027 1111 trs NO. CHANGE in Class. 0 DECLASSIFIED Class. CHANGED TO: TS S DDA Memo, 4 Apr 77 Auth: DEA Ea. 77/1763 Date* 20 MAR 1978-L BY: Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 u ET NEAR EAST-AFRICA .2 e )eN iS49 1026 III 1. GREECE: Reductionur:mcie -US Ambassador Grady, commenting on General Van Fleet's recent recommen- dation that Greek armed forces be maintained at their present strength through fiscal year 1950, stresses the importance of effecting a substantial reduction of Greek Army strength in advancing Greek economic rehabilitation and declares that responsible Greek leaders are becoming increasingly insis- tent on such a shift in emphasis from the military problem to reconstruction. Grady feels that there is every present in- dication that the army's summer campaign will eliminate organized guerrilla operations In the interior of Greece, thus permitting reduction of the Greek iforces to begin. Grady adds, however, that the US should attempt to maintain its present military aid appropriations and should not consider a reduction of the army's strength before next fall. (CIA Comment: CIA believes that, although guerrilla activity in the heart of Greece will probably be virtually elim- inated by autumn, the concentration of the main guerrilla strength in areas along the Albanian frontier will require all available Greek Army strength.) THE C.I.A. ::.13 NO 02,,TfTr.,:f TO HE DTECT.:11:ZIFICAT:ON THIS DOC1J1fiEr.7.T. NO. Document No. (57 L 5 NO CHANGE in Class. 0 0 DECLASSIFIED Class. CHANCED TO: TS S DDA Limo, 4 Apr 77 Auth: D2A T=G, 77/1763 Date:. By: 018 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 GENERAL 28 JUN19 1025 1. Views on Soviet policy in Far East and Euro --US Embassy CU /3 goscow,15 commentliiIon reports that the Soviet representa- camp tives in China, Siam, and India have departed for Moscow, expresses the view that the Kremlin may embark on a period QIP/3 of more intense activity in south and east Asia. The Embassy anticipates a continuance of Soviet demands for an early Japanese peace treaty, propaganda efforts to exploit US-British differences in the Middle and Far East, and direct action to take advantage of existing tensions in Southeast Asia. In this connection, the Embassy warns that, despite Chinese Communist efforts to obtain trade concessions from the West, the Chinese Communists are unlikely to be "weaned away" from Communist orthodoxy at this time. The Embassy points out that the USSR will make a strong attempt to aid Communist China in the event that the Communists do not obtain aid from the West and that only after this Soviet attempt has failed will there be any hope that the Chinese Communists will consider following a path independent of the Kremlin. Meanwhile, Embassy Moscow anticipates no relaxation In tension in Europe but believes that the next phase of the East-West struggle will center increasingly on the economic field. According to the Embassy, the Kremlin will seek every means to obtain restoration of East-West trade and to exploit any economic conflict between the western powers. (CIA Comment: CIA concurs in this analysis.) Document No. NONO CHANGE in Class.. El THE C, I. A, HAS NO OBJECTION El DECLASSIFIED TO 7HE D7CM1:SIFICATION OF THIS DOCUMENT. Class. CHANCED TO: TS S NO. _AA DDA , 4 Apr 77 Auth: DDA R:(;. 77/1763 Date: 0 ivitiR.1978 ' By: Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 t.� 3U fr. 447 EUROPE 27 JUN 1949 1. GERMANY: Berlin strikers acce t western terms �ZS Repre- sentative Murphy in Berfin reper t a oad e Berlin city administration and the railway workers appear to be quietly satisfied with the initial terms of the rail strike set- tlement providing for full payment in west marks; for three - months, their satisfaction is tempered by a very real fear of possible reprisals by the Soviet-controlled authorities. Murphy comments that the key question is whether the railway administration will be permitted to cooperate and adds that a brief period may be necessary before the Soviet Military Administration "graciously" assents to such cocperation. Murphy points out that the Soviet attitude cannot be ascer- tained until the morning of 28 yune when the crews will try to put the intra-city rail system back into operation. NEAR EAST-AFRICA 2. PALESTINE:lisnasj.aim stalls Syrian armistice --US Consulate-General yerusalem has been informed by Brigadier General Riley of the UN sta.ff that the Israelis are now inter- preting Acting UN Mediator tmche's latest Syrian armistice proposal as giving them administrative control over the pro- jected demilitarized zone. According to the Consulate-General, Riley feels that the Israeli interpretation., which was confirmed to � iley by Foreign Minister Sharett� would be "completely inacceptable" to Syria and that there is thus little chance for the successful completion of an armistice. The US delegation to the UN in New York, meanwhile; reports that Blanche is taking a "stiff line" against the Israeli attempt to modify his pro:. ,sal and is insisting that his proposal be accepted by both parties as it stands. THE C.I.A. 1'.13 UO OB3ITTIO11 TO 1H3 D-7C-J!.:SIFICATI0N O. THIS DOCUMENT, No. 1024 5 - 3 CIA -5 rit - C Document No. 0 1 LI NO CHANGE in Class. 0 0 DECLASSIFIED Class. CHANCED TO:. TS DDA Memo, 4 Apr 77 RERth: DDA REG. 77/1763 Date: 20 MAR 19-7d By: ns3 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TO ANNEX 27 June 2949 POLITICA.L CONSEQUENCE OF SOPHOULTB' DEATH The death on 24 Rale of the Greek Liberal Prime Mini- ster, Themistceles Sophmalis, probably means the end of the Liberal-Populist coantion and the beginnigeg of sharply intensi- fied party and personal rivalry. Et my even result in a move toward authoritarian government. There appears to be in Parliament no potential successor to Sophcglis. possessing the required ability to command a.pproval and restrain political fa.ctionalism. Populist chief Tsaldaris, Foreign Mb.ister under Sophoulis and himself an ex-Premier, has been given the first opportunity to form a new cabinet. With 37% of the seats An Pa.rlis.ment, the Populists may find it easier than any other group to muster enough minor-party support to carry Parlia- .ment. Continued Liberal-Populist cooperation of the kind achieved by Sophoulis s unlike:49 llowever, because leading elements in both parties will welcome an occasion for a test of party strength. Furthermore, a slate headed by Tsaldaris will probably encounter considerable hfngh-level friction, tams - much as he las, at least until very recently, been cut of favor with the King and has also irritated Army Commender in Chief Pa.pages. F12 as seems quite possible, Tsaldaris fails in the initial attempt to form a new cabinet, the second chance may fall to the 74-year-o1d Diomedes, Liberal Vice Premier under Sophoulls, or to some similar figure without strong political coloring. Diomedes is a higtly respected financier who might be abae temporarily to preserve the old coalition cabinet, but his task would soon become much more difficult because of his relative inexperience in politics and his lack of a stabiliz- ing force comparable to Sophoulis'. One or two minor poli- ticians may also be invited to try their luck at forming a cabinet, but with diminished chances of success. The King, rather than endure prolonged political bickering and 'maneuvering, .: Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 00 TO may then be tempted to adjourn Parliament and to appoint an interim government designed to exercise strong powers in close collaboration with the military command under General Papagos. Such a development, although likely to remove the friction between political and military leaders which has been detrimental to the effectiveness of the Greek Army, would have sharp political repercussions in Greece and would expose the US to further Soviet charges of lending support to non-democratic governments. - Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 RET GENERA L A us 11.. :tan Arrryir piaatell gErg.' Ype2aillo-1;,E! Catte:"'---170 1.zi3loas3y Vierma has 03E2 ilatormeo. Ausy:pkart ffiake.)za Aliailster t hsat..ap acoutmM;tes CTzakeeller Figl. com.plits e1 meat the AtestzPaza Army at the "Eqr.V,..-,3t No, S 5 juN7.9 1023 -')-CTIorT IS DOcu-- � ,r - ()Zr Off -73 Document No, C51.3 NO CHANGE in Class. 0 o DECLASSIFIED Class. CEANCEO TO: TS S DDA jer.:op 4 Apr 77 Auth: DDA RLC., 77/1763 Date:- By: OM Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 GENERAL 1. French urge US on.liatert.anlhin --An important o member French Assembly has informed US Ambassador Bruce in Paris that the Assembly Committee on the Atlantic Pact plans to bring the Pact before the parliamentary group as soon as it has been ratified by the US Senate. The French official urges that at the time of Senate ratification, a strong declaration be made that US strategy contemplates the defense of Western Europe on the Rhine, not at the Pyrenees. The parliamentary leader explains that the French consider it of paramount importance to locate the headquarters of central military planning under the Pact in Washington rather than In London, in order to overcome traditional differences in policy between the UK and tlre continental powers. THIS DOCULL_JT. NO. Document No. NO CHANGE in Class. 0 0 DECLASSIFIED Class. CHANCED T3: TS DDA Ksna, ApT. 77 Auth: D.DA . :1763 Date: _2_e_mAR.49.7@_ 00 T SECRI Approved for Release: 2018/11/19 006749332 ON in 1022 SITS Approved for Release: 2018/11/19 006749332 34 JUN 1948 1021 GENERAL 1. Analysis of Soviet attitude at CFM meeting--US Embassy C 111/3 Moscow, in commenting on the line taketchy the USSR at the Paris meeting of the Council of Fore' Ministers, ex- presses the view that some basic change may IF vve taken place in the Soviet attitude not long before the meeting. Pointing to Vishinsky's "defensive attitude and apparent improvisation," as well as his failure to build up a con- sistent pro,E4 ganda pattern, the Embassy suggests as pos- sible explanation the impact upon the USSR of the May elnctions in Soviet Zone Germany, combined with recent ;catkins in the Satellites I), difficulties and weaknesses. The Embassy reasons that because of these evidences of weakness, the Kremlin found it inadvisable to permit any real progress toward a German settlement and will pro- bably place obstacles in the way of further progress on the Austrian treaty unless the USSR is successful in tightening its control in the Satellites and the Soviet oc- cupation zones. The Embassy explains that although any "last minute shift" in Soviet tactics can be accounted for by this analysis, the willingness of the USSR to mark time at present probably is based more fundamentally on the Kremlin estimate that a crisis of capitalism is approaching much faster than previously anticipated. (CIA Comment: CM concurs In this analysis.) THE C I _ A, --.7;TECTION TO THE 1"2-::C- :�...i1CATION OF THIS DOClaa.,r:C. IRO� � Document- No. 6.-7 NO CHANGE in Class. O DECLASSIFLED Class . s LD. -4: 1:,..73T. 77 Au_th 11: Date 2,fj j?iiiiR 1978 ay. OA Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 '50 TO? RET 1020 GENERAL 22 jtmi 1943 1. French r i est US statement on MAP-- French Foreign c s given -sere .ry of State Acheson an aide me metre expressing the concern of the French Govern- ment in connection with the submission sel the Atlantic Pact to the French Assembly. The aide memoire declares that the Assembly debate would open wider more favorable cir- cumstances if the US had already clarified the "milikt ry and strategic consequences" which France may expect from the Pact. The Government fears that iu the absence of such clarification the Assembly may attach reservations which would greatly limit the scope of the Pact. The French Foreign Office has advised US Embassy Paris that Schuman would be greatly aided in his effort to get the widest possible support of the Pact if the Military Aid Program were introduced into Congress before the French Assembly begins its debate. The Foreign Office emphasizes that Schuman hopes to obtain US permissiaa to make use publicly of assurances previously obtained Washington that: (a) US strategy contemplates the defense of Wester Europe; and (b) the US intends to establish, with- in the organization envisaged by the Pact, a combined stiff representing the US, Canada, the U1K, and France. THE C.I.A. HAS NO OBJECTION TO 7HE DT-;2.--!,7,SIFICATION OF THIS DOCT:2::T, NO. Document No. 670 NO CHANGE in Class. 0 DECLASSIFIED Class. CHANCED TO: 3/TS Si TS TS S Dr`A. 4 Apr 77 Auth: DD. FL;(7. 7711763 Date: pre.44AR474__ By; Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TOP ET .21 JUN 1949 1019 GENERAL SiS 1. CFM conclusions on Gerto and Austria-- Secretary of State Kch,--iTrel�M�cor iiiFoni-INVOINE=ouncil of Foreign exaiS Ministers reached agreement on a modus vivendi for Germany and on most of the Austrian treaty testiest, points out that the quctsticn as to whether the settlement of disputes between Austria and the treaty powers ,should be bilateral or not was left to the censideration of the Deputy Foreign Ministers. The Secretary leeports that Au.stria.n Foreign Minister Gruber gave the written agreement of his Government to the CFM solution on Austria. US Represeniative Jessup in Paris comments that the eleventh-hour instructions from Moscow to Visnsky to modify the Austrian agreement were obviously embarrassing 0 Vie shinskytwho did not wish to abandon the agreement. jessup believes that the Kremlin's eagerness to add a paragraph pro- tecting the right of t'ke USSR to export unspecified income from Austria indicates the importance which the Soviet Union at- taches to this matter and pointe 0 the possibility that the USSR may refuse to define this income when the deputies resum.e negotiations. -.. C. .l. :0 TO 71:12 DECLAF.,SI.!1CATION DOCUMENT. NO. Document No. 6 VI NO CHANGE in Class.. E] 0 DECLASSIFIED Class. CI-1.GZD TO: TS s (.() DLV. Y._'.7!�-� . zl- cfp' 77 Auth : Date: _24_4449.78 By O' ai ! TOP RET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 "r04 5U TO ET GENERAL 20 JUN1949 1018 1. US views on Austrian occupatkin forces-- Secretary of S.hte Acheson in PaenpFess�FFEFeWireiat no action need be taken by the Council of Form Ministers concerni.icl. occu- pation forces in Austria. The: Secretary emphaslfaes that only main issues of the AuStrian treaty are being dealt with by the Council of Foreign Ministers and that the Deputy , Foreign Ministers will resume work to complete the tirait treaty , 1 September. The Secretary pointe out that watt- ficatIons of the tivaty will require about six Months and that afterwards there are 90 days in which to withdraw oeeupa- tion forces. The Secretary favors hour par agreement on the creation .02 an Austrian army and suggests that if the USSR does iot agree; the western powers might consider going ahead in their Z011198. The Secretary points out ttat if delays occur in establishing adequate ALISfria. forces, . ratificaion of the treaty could be postponed to avoid creating a military vacuum In Austria. Co, SAS C. I, ii 7-11413 NO OBJECTION TO THIS DO C OF12,:y-T . NO. 442 Document No, 00 NO CHAIVGE in Class.. 0 DECLA.SSI2IED Class ' 0 ..------- TS Auth S 77 Dat e By: TOP JRET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 GENERPIL 1 $ AM 184 1.017 1. US export policy in Far East--The Departnaeut of State has liaTimiriNeLigigiaiirtlra.t the US plans tiA the near future to require that a validated enioll, Hose. be obtained for the shipment of all commelittes from the US to China, Manchuria, Taiwan, Hong Kong, Macao, North ad gouth - Korea, aid possibly other Far East arcas. Aemorfil,ng, to the Department, the proposed controls are de:signed to prevent both the transhipment 'd strategic items to the USSR and. the supply of goods to the (Chinese Conkmunilsts. for miliciavy par- poses. The 1)epartment also hopes to maintain conixol over key exports to China. and Ianchuria in order to Influence to some extent the orientaion el the Chinese Commonlisf:F, and to pro- tect US commercial interests. FAR 'EAST 2. CHEM.: al,tigulagiajpilajo iplocicitde Communipt norts_--The CIR Nationalist Vkle Foreign Minister fas informedJj3 Counselor Clark in Callt011 that the Nationalist Goverwinent has drawn up a definite plan for the closure el all Commtt-held ports to Bea and air traffic in the. inarndirate gtatuxe. Clark doubts, however, that the Natiovalists can &,Istabilsh POI effectiTe block- ads. (CIA Com.ment: C& b?.lieves that, with tket.eosihle exception of Shanghai, tbe Nationalist Govemment 17. CUTVently incapable of establishing an efeefitsge bloe on Communist- hi-ad ports._ CIA furthev beikf's7853 that the Nati annlists are probably making a desperate athampt to gorc..,e ale US to grant them further aid in return 5ZON!' Mktg CDT not impaling the blockade.) THE C.I.A. 12,5 :T`_.) OBJECTION TO IHE D-0"A7:L$1.C.'ATION OF THIS D30.;11LJT. Document No. ND-7 NO CHANGE in Class.. O DECLASSIFIED Class, CHI:77ED TO: -�. ;, 4 Apr 77 Auth: /1763 Date: � By; 0 TS Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 Coi*.,_ 50 Torif;�;:met. GENERAL 1016 i7 :JUN NO 1.13Ar. j_aj_upp_p27tiq? nt k a d on Austrian teepy.--Seceetary of State Acheson reports from Paris that at the le June session of the Council of Foreign Ministers, Vierytesky agreed to the following terms for an Austrian treaty: (a) Austria's frontiers shall be those of January 1938; (b) the Austrian Government s 11 guarantee protection of the minority rig of the Slovenes mad Croats; (c) reparations shall not be exacted from Austria, although Austria shall lose its right to its assets in Yugoslavia; (d) certain oil right', in Austria shall be transferred to the USS-?; and (e) the USSR shall relinquish the German assets in Austria, in return for the !elment by Austria of $150 million in six years. Vishinsky, however, was rigid in his insistence not only that the USSR must receive all Danube shipping properties in eastern Austria, including the. Vienna docks, but that these properties be exempt from IlatiOallization and that all disputes between the USSR and Austria be settled through bilateral negotiations. The Secretary indicates that when the western p ers suggested tket shipping properties be s died further by the Deputy Foreign Ministers, Vishinsky dec red he would seek further isastructions from Moscow. The Secretary reports that the British and French delegations, as well as Austrian Foreign MiTliiite:E) Gruber, are doubtful whether outstan.ding issues should prevent agreement on a treaty. THE C. I, .1, 7-(7; OBJECTION TO 7-z-172, D bA'SSIF.ICATION OF THIS DOCUMENT. 0 s ls Document No. 6(0C' NO CHANGE in Class.. El El DECLASSIFIED Class. CI-I.1) TO: TS S fr 77 Auth: D�!.;"7 /17'33 Date:etia_lLa781 By : '� 4ET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 GENERAL 3 6 MI11949 1015 1. RS aaRove for training future AUStriaint ramy--The S/Ts in Department of State has requoiaritrEiremigairLondon and Paris to inform the British and French Foreign Offices that the US las granted Austrian High Commission.er Keyes authority to: (a) clurey cat plans for training am Austrian gendarmerie regiment as a bcp.sic cadre for a Mare army; and (13) provide the regiment with appropriate equipment. Pointing out that British Pad, French approval for the plans must be given before the equipment can be &ssuedi the Departmelt also reqtaests the support a the UK and FMCS' obta.itaing Austrian agreement on a satisfactory plan to a future army. 2. Vish1nskimmes_mesumporm3. disluzgramIstatigaeg--Secre- S/TS ta.ry c State Acheson, Inports from Paris Rat Soviet Delegate Vtshinsky, when asked at the � 13 lune meeting of the Council of Foreign Ministers vihether he could suffgest a solution to the Berlin r ilway expressed irritatim that the question had been raised and declared that, speaking for himself,. he did not approve of strikes. Expressing, the view that the strike was organized in the US sector and was not a Soviet responsi- bility, Vishinsky said he had no authority to negotiate on this subject but would refer the matter to Moscow. The Secretary comments that the inciident reveals the exceedingl arrow latitude enjayed by Vishinsky in the Paris negotiations. FAR EAST 3. laNTDONESIA US conceibned over Dutch Liglezibility �The tkey,kart- C IA /S me of State has mrpresSed tinaiiii:Fgirtietochran C. tA/5 in, Batavia its concern over Dutch date Iran Roijen's THE C.I.A.. '2:0 OBJECTION- TO HE DTC":21SIFICATION OF THIS DOCUMENT. NO. Document No. 3CA.-- NO CHANGE in Class. 0 DECLASSIFIED Class, CF TO: TS S 0 DD � ) !Dr 77 Auth: . 77/1763 Date: 2 0 MAR Wa By: 0a3 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 0.44 TOP Insistence that Republican Premier Hatia guarantee that no alterations will be made in the cease-fire agreement when it is submitted to the Republican Parliament at Jogjakarta. The Department regards as entirely valid the Republican position that "the door must be left slightly open" for pos- sible revisions in the agreement because it believes the Republican Government cannot be expected to make binding commitments prior to its return to authority. The Department considers that Security Council directives obligate the Nether- lands to restore the Republican Government to Jogjakarta before agreements for the cessation of hostilities are negotiated. R newed Ambas- sador Baruch and ECA. Representative Valent e at The Hague have indicated their approval of the Department of State's suggestion for the renewal of ECA a to Indconesia. The US representatives suggest that by securing the parti- cipation of Republican Premier Hata in ece program and possibly that of other Indonesian groups, the possibility would be removed that the reams.' of aid would be regarded as an effort to help the Dutch. (CIA Comme,..t: CIA disagrees with this estimate con- cerning the effects of the renewal of ECA aid at this time and concurs in the view expressed by US Representative Cochran In Batavia that such action would be construed by most Indo- nesians as a pro-Dutch change in US policy, weakening to the position of US-oriented Premier flatta. CIA. believes further that any attempt to identtly Rath with distribution of ECA aid under Dutch auspices would expose him to charges of pursuing an unduly conciliatory policy.) 2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 PCT ' GENERAL 5 JUN 1949 1014 1. US ,i,ilicy on reef:: dzing a Chinese Communist regime�The CigI S Depar , A. en sE',7"-rri�StrIte Sla'IMM-RWICEMTra that. the US currently intends to follow a policy of avoiding baste In recognizing a new Communist central government, when such a government is established. According to the Depart- ment, this reflects the view that recognition is a valuable lever for obtaining any new Chinese government's acceptance of international responsibilities. The Department believes the extent of Communist cooperation with the West will be deter- mined by the Communists' need for such cooperation gather than by the promptness with Vali* recognition is extended and that overeagerness in extending recognition probably would eTcourage the Chinese Communists' high-handed clisreg-ard of foreign interests. NEAR EAST-AFRICA 2. PALESTINE: US ur es Israel to refrain from millinry action-- S TS The Departme t of �bas tiorined U Ambassador IgigielTanald In Tel Aviv that the Israeli Charge in Washington has been in- formed of US concern over recent reports of increased Israeli military activity. According to the Department:, the Charge was told that: (a) the US would bedeeply disappointed" if Israel should undertake any new military action: and (b) no one could foresee the consequences which such action might have. The Department has also indicated to MacDonald its assumption that he is doing everything possible to head off a new Israeli military venture. C.I. 1, 2,73TECTION TO 7H-2 D OF THIS DOCUMENT. NO. Document No. NO CHANGE in Class.: 0 DECLASSIFIED Class. ClInI,0 To: TS S 4 P,Dr 77 'Auth: LT' 1 r.'.7 c3 Date: .1; t Approved for Release: 2018/11/19 006749332 � Approved for Release: 2018/11/19 006749332 TOP ir ET ?4 GENERAL 14 JuN194.9 1013 1. Resumption of ECA aid to Indonesia, held unwise�US !'"epre- sentative Cochran Ia atavia ha.2 commente-d, in reply to a ei3artment of State query; that the adverse Republican re- acdon to the resumption of ECA aid to Indonesia would not in any way be counterbalanced by the limited economic benefits which Indonesia as a whole would receive. Cochran believes that the resumption of ECA aid would undermine Republican Premier liatta's influence because it would be viewed both in Indonesia and abroad as a weakening of US support or the position taken by the Security Council. IIe emphasizes that restored aid would be regarded by the Re- public as a reversal II US policy in favor of the Dutch, just prior to the critical period of the Republicansp retarn to Jogjakarta and the convening of The Flagie Conference. NEAR EAST - AFRICA 2. PALESTINE: Bunche to confront Israel with resignation threat� Acting UN Mediator mache has i---- rdole-Tfirdelegation in New York that he plans to tell the Israeli representative bluntly that unless Israel withdraws completely from the de- militarized zone in jertisalem, he will submit his resignatios to the Security Council, citing Israeli violation of the armis- tice agreement as his reason. Bunche told the US delegation that Israeli representatives on the Mixed Armistice Commis- sion had vetoed a proposal, backed by Jordan and the UN representative, calling for withelrawal of both sides from the demilitarized z0110. The US delegatiom adds that r,:unche is "thoroughly disgusted with Israees policy concerning Jerusalem and has characterized it as "criminally crocked." THE C. I.A. HAS NO OBJECTION TO HE DECLASSIFICATIOIV OF THIS DOCUMENT. o. 611) Document No. No.3 cmnica. NO CHANGE in Class. LI DECLASSIFIED Class. CHANCED TO: TS ,S DDA nmo, 4 Apr 77 Auth: DDA REG, 77/1763 Date: 2 MAR 1978 � By : Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 1 3 JUN 1949 5U GENERAL 1. US kvors liberalizinz Austrian occupavollu--The De- partment of State has recommended to the US Delegation to the Council of Foreign Ministers meeting that, in order to avoid an undermining of the western position in AUFATiR.9 an agreement be reached with the British and the French on liberalizhig, the four-power occupation policy. The Depart- ment suggests particularly that: (,la) an effort be made to convince the British and the French of the necessity to relieve the Austrians o.1 OCCEPatiell costs; and (b) a tripartite program be presented for Vis sky's concurrence, possi�ly including such proposals as the appointment of civilian high commissioners, the abolition of many of the present controls over the Austrian GOVernMe t; and the rection of military forces to the size needed for pnlicing. The Department recommends that action along these lines be initiated in- formally in Paris, distinct from negotiations on the Austrian peace treaty, and that if the USSR refuses to cooperate, the three western powers Should act on their own as far as possible, NEAR EAST - AFRICA .t there has been greatly increased Israeli mili- tary activity in the Latrun and Jerusalem areas an entire ordan-Israeli front recently. According to local authorities in Jerusalem and Arab Leg on .00ps a believe that the ells are planning further opera.- tions in both area.s.j recommends that the US make -1 - THE C.I.A. HAS NO OBJECT 7 I TO 7HE ITIC.:ASSIFICATION CT's THIS DOCUMENT. NO. b2A Document No. OW- 1012 5 -T5 NO CHANGE in Class. DECLASSIFIED Class. CHANCED TO: DDA 4 Apr 77 Auth: DDA RJL:, 77/1763 Date:MAR 1978 By: olg -- Approved for Release: 2018/11/19 006749332 -J Approved for Release: 2018/11/19 006749332 TOP immediate representations to Tel Aviv, without awaiting action by the UN Mediator, on the ground that protracted to pts at mediation would only give the Israelis time to prepare further aggression. 3. CHINA: US to co 'The Department af State s advised US Counselor Clark In Canton that it would be desirable to continue diplomatic contact with the National Government in the event of its ithrp r avial to Chungking. The Department is therefore detailing an officer with rank of First Secretary to Chung- king. FAR EAST time di lomatie contact with Nationalists- - 2 - Approved for Release: 2018/11/19 006749332 (IA - Approved for Release: 2018/11/19 006749332 Ju GENERAL 11 JUN 1949 1 011 I. Ismagged SC colaFomise onI'31ra,.e..11-Inian armistice ullres1-- The US delegation -iiTh9 UN, in commenting on possible lines of action if discussions break down on the Syrktn..israoli armistice, notes fr7,..sit the chief stumbling bloc in the negotia- tions is the intransigence of the Israelis and that the problem therelore is one of emerting Reactant pressure to make the. Israelis accept a solution which a "reasomble ra24ority opinion" believes best. The delegation considers that in the event of a breakdown it might be preferable to have UN Me- diator Bunche report this failure to the Security Council and make a compromise proposal which, it has ju,dgment� would meet the legitimate interests of both part:ies. Ma US repre- senbans believe that if the SC called on both imrtits to accept such a proposal, Israel as a new UN member Would find it difficult to refuse and Syria would probably be glad to accept. CII-1/004. 2. Isra,elis to withdraw troo..grom neutral gone--According CIF1 ic-orrV. to UN Mediator Bunche, the israeli representative on the Mimed Armistice Commission Ms decLeired there Ins been a "misunderstanding" conce.2.4ning the Israeli incursion into the western portion of UN neutral zone in Palestine and that the troops will be withdrawn. Bunche comments that he does not understand. Israeli motives in seizing the neutral area, since such action obviously endanger.egi their broader objectives, but expresses the view that it was "deliberately planned." THE C. TL1.7 -C) 0 T2, 1ISDOCU.1 jEC T I 0 0 (9 1 TO THE DfC:1_::::',TFICATIOili O.Y Document No. la1T. NO CHANGE in Class. 0 D DECLASSIFIED Class. TO: TS S r'Dl 4 Apr 77 Auth: 77/1763 Date: 2 1078 By: a TOP RET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 27.4:67 RET GENERAL 10 JUN1949 1010 1. French and Dutch views on importance of MAP--US Ambas- sador Bruce In Parts, in expressing his o-r---icurrence with the view of other US diplomatic representatives that prompt passage of the Military Aid Program is essential, declares that the average Frenchman regards MAP as the "indispens- able armature 'for the Atlantic Pact. Bruce believes that without MAP, Frenchmen will be more susceptible to Commu- nist propaganda that the Atlantic Pact is "a dangerous piece of paper" which provokes the USSR without supplying the means to resist a reaction to the provocation. US Ambassador Baruch at The Hague considers that failure to receive early assurances of military tiid will support those Dutch groups who want the Netherlands to adopt a minimum defense pro- gram on the ground that the country cannot possibly secure an adequate means of defense. .Exclusion of Gerry from current MA planning urved-- US Embassy Lon oc=commen e r a prewar from suggesting the evenfasal participation of western Germany In MAP. The Embassy believes that such a suggestion would arouse doubts and fears among Western European countries, particularly Frances regarding US policy toward Germany. 2. P_ ossikle Usira, gg Palestine arms embargo--The US celega �rain a e�UNTreTpciligrire Security COuncil will probably end the Middle East arms embargo by adopting some resolution based on Mediator Bunche's proposals for terminating existing truce arrangements. The delegation considers that it would be most unwise to lift the embargo suddenly and completely. The US representatives fear that lless prior agreement is re c:hed among potential arms supplies Eor limiting arms traffic, the removal of controls by the Security Coun- cil will set off a dangerous armaments race in the troubled *Middle East area. t1E C.I.A. HAS NO OBJECTION TO 7HE DECLASSIFICATION OF THIS DOCUMENT. NO. biN TO Document No. 13(o0 NO CHANGE in Class.. 0 0 DECLASSIFIED Class. CHOCED TO: TS S 0 DDN M:!plo, 4 Apr 77 Auth: _p7A tee: IR 1978 By � a Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 U GENERAL I. Israeli incursion in Jerusalem neutral zone--US Consulate TriTe=u reTh'sa tarois e lsraerii6Eir�re the western portion of e UN neutral zone in Jerusalem andSt7Jibsequent repudiation of the agreement neutralizing the zone as a serious and carefully planned Israeli maneuver. The Consu- late reports that: (a) the Arabs have refused to attend further Mixed Armistice Commission (MAC) meetings until Israeli troops are withdrawn; and (b) a UN p, test to Israel was withdrawn following an Israeli threat to boycott further meetings of the MAC. The Consulate declares that the situ- ation is "most explosive" and that the strongest measures should be Wren to force Israeli withdrawal from the neutral- ized area. 9 JUN 1949 � 10'9 2. Pass .le orenarations for invasion of Dominican Re ar. ean Legion, in joint action with the governments of Costa Rica, Guatemala, and Cuba, is completing plans for an invasion of the Dominican Republic and the overthrow of (CIA Comment: Recent reports of an imminent revo- iutionary move by the Carth'fn an Legion, either against Trujillo In the Dominican Republic or Somoza in Nicaragua, have appar- ently been set off by an unusual amount of activity among Central American-Caribbean revolutionary circles, including a regrouping of forces and materiel in Guatemala. CIA esti- mates, however, that the superior strength of both Trelillo and Somoza will continue to deter the Caribbean Legion from taking precipitate action in the immediate future.) THE C. r:1� T.ECTI01.7 TO 711_.3 .1.....:".7IL-ICATION OF THIS DOCUALENT. NO. Document No. 06-4 e /A) S NO CHANGE in Class. 0 0 DECLASSIFIED Class. CI-V.17=n TO: TS DD.:y;lo ,4 Apr 77 P..uth: D7:4, , 77 /Y#19/-S e - 5 Date: by: OM 0 Approved for for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 Cbifikl. U Tdik CRET GENERAL 8 JUN 1949 1008 1. Imort )2LitiRri Aid PIN m ur d--US Embassies Brussels, Copenhagen, an Oslo express their wholehearted concurrence in the view of Ambassadors Douglas and Harri- man that serious effects would result in Europe from the failure of the US Congress to act on the Military Aid Program at the current session. Norwegian Foreign Minister Lange has emphasized to Embassy Oslo that such a delay would embarrass his Government in its relations with Sweden. Em- bassy Copenhagen points out that the decisive factor in Den- mark's decision to enter the Atlantic Pact was the imperative necessity to acquire arms and equipment available only through US facilities. 1 C.I.:1., :To CITECTI)7 TO iC DZC-A:S1F2CATION Wi THIS DOCUMENT. NO. CA Document No. 6 SI NO CHANGE in Class. El fl DECLASSI.7= Class. CHAT.T.) TO: TS S 0 DP:, !..T � ;:la 4 Apr 77 1 Auth: , D, T..__.L., 77/1763 4. Date: 2 0 MAR 197BBy: 02g, Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 U S ET Arp.z...44 GENERAL 1. Harriman and Da �Ilas voice concern over dela in MAP� U m ssa ors ,,err..man an ouglas London express their deep concern over reports that the US Congress will delay consideration of the Military Aid Program until the next session. Harriman a d Douglas point out the seriassly adverse effects of such a delay would be to: (a) create suspicions in Western Europe that the US is lukewarm in its determination to give e*ective support to the Atlantic Pact; (b) resurrect doubts about the de,. Eleet ,ility of US foreign policy and encourage groups favoring appeasement of the USSR; and (c) revive old fears that the US does not intend to help defend Europe but may to accept the necessity � of liberating it again. Harriman and Douglas believe that such delay would result in loss of the momentum created In Europe by past US efforts and would bring on retrogres- sion which would be immensely costly to reverse. The nabassadoes urgently re-commend that every effort be made to secure i ssage of the MAP legislation at the earliest possfole time. Metiawhile� US Ambassador Brace , Paris indicates that Premier gneuille and Foreign Mbaister Schuman are distmebed over e decision of Congress not to give first priority to the Atlantic Pact and by reports ttat MAP may not be dealt with during the present session. Bruce declares that only affirmative anttee on the Pact and MAP will really allay French fears. THE C.I.A. HAS NO OBJECTION TO 7HE DTC �;:sTFICATION OF THIS DOCaLAT. No. OA Document No. G 7 JUN 1949 1r7 5-7-S C/A- eolyF NO CHANGE in Class. ri DECLASSIFIED Class, CH,INCID TO: DDI Lfenio, 4 Apr 77 Auth: DDA 3.:(,;� 77/1763 Date: 9,D MAR 7Y: O. Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 GENERAL lb Vishins' tancone romisinor on Berlin�SecrefAry of State c eson repor rom ar fiat on e question of four- power control the Soviet Government is apparently no more prepared to compromise on Berlin than on Germany as a whole and that the Co:men of Foreign Ministers Is deadlocked on the question of the veto. The SecreW.ry cornmonts that the foreign ministers are so far apart on Berlin that it is difficult to see how any agreement can bo reached for the reunification of Lerlint no matter what may develop in other aspects of the Berlin question. He adds that 7i/shit/sky showed ix) inclination in a private meeting to compromise on his adamant stand In the CFM. 6 JUN 1949 106 2- French desire US arms to defend Chinese frieutier in Indochina-- ,,17.:1====a=zeccg:..........� French Chief orr�M-rel'24TiWornircriSMarton oi of recent decisions regarding French mthry strategy in Indo- china and has indicated that an entire regiment in French Zone Ger 4.-.; Ty is being stripped of certain types of arms to make a defense of the Chinese frontier possible. Revers also indicated � that French forces in Not Africa are already betrag called upon to furnish men and materiel at a rate rtylaich will reduce units there "beyond a minimum reg,,srcied as prudent." In reiterat- ing the pressing need for US arms, landing crafkand aircraft; Revers implied he believes it unnecessary that US permission be ed for the dispatch of US-butlt aircraft from North Africa to Indochina. � ; THE C. l.A. ELS NO 03JECTION TO THE DECLASSIFICATION OF THIS DOCUMEiVT. NO. Document No. OrD-C NO CHANGE in Class. E] DECLASSIFIED Class. CH TO; TO: Auth: Date: 0 TS S DDA� , 4: Apr 77 , 2 0 MAR :978� � Approved for Release: 2018/11/19 006749332 .s�TS e/A-s Approved for Release: 2018/11/19 006749332 cb.21): 50 TOR ET 1005 - 5 JUN 1949 GENERAL 1. Sforza submits resignation-- Prime Minister De Gasperi has 3/13 oriiitTrAWIOunna or that Foreign Minister Sforza, befoxeleaving oat gl May to receive a scholastic degree in France Ansisted upon submitting his resignation on the grounds that recent British action on Cyrenaica and Libya without giving previous notice of abandoning the Bevin-Sforza agreement . has "completely undermined" his position before the Italian � peopte. De Gasperi added that he had told Worm he would take 320 action on his resignation until his Ireton from France and that he was keeping it secret until that time. De Gasperi also told Dunn that he would make every effort to persuade Sforza to withdraw his resignation, as his departure from the Cabinet now would have a very grave effect in Italy. (CIA Comment: Although the Cabinet stands solidly behind Mornay many political groups hold Mm responsible for the failure of th.e UN to arrive at a colonial solution favor. able to Italy. Eis resignation, would: (a) broaden political opposition to the Government's policy; (b) intensify Italian anti-British sentiment; and (c) hamper the implementation of the Atlantic Pact in Italy.) I 0BJECTIO-1 TO HE Di C7..A3SIFICATION 01 THIS DOCUMENT. N 0. Document No. 0 5c NO CHANGE in Class.: E] DECLASSIFIED Class. TO: TS S DD!'. 4 1!?r 77 Auth: DT.,1 p:.: 77/1 Date: 20 MAR- 1978. _0)1 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 GENERAL 3 JUN 1949 1O4 5S 1 S., k concerned over British attitude in OEEC--Belgian - S ree Millard 1111 that "things are going badly" in the Organization for Euro- pean Economic Cooperation because of British opposition to the US proposal that /0% of ECA funds for 1949-50 be placed in a pool for multilateral use in stimulating infra- European trade. Spaak said frankly that the British were doing their utmost to defeat the proposal which they claimed would force them to increase their purchases in gold or dollars. Spaak, who considers the US suggestion sound in principle, indicated he feels some embarrassment in support- ing the proposal because it is obvious Belgium would be the chief beneficiary. FAR EAST 2, INDOCHINA: Bao Dai's views on US assistance--US Embassy Paris has beerrigISTIV=isiTririp"Tese tatives in Paris that the optimum US assistance program Bao Dai hopes for in support of his new regime in Indochina includes: (a) a US abatement welcoming the Vietnam state and indirectly endorsing :eao Dal himself; (b) de facto. and later de jure recognitim; and (c) economic and military assistance. The Embassy recommends that the US make a general statement In support of a state of Vietnam, rather than of Bao Dal or any specific government, and suggests that the question of formal recognition be studied with the UK, Indiz4, Siam, and the Philippines. THE C� . A, I:AS 7.r.O OBJECTION TO D-11' :TiFICATION OF. THIS D3C,L,12,1.;rf. NO. Document No. OS-4 NO CHANGE in Class. O DECLASSIFIED Class. CIUT.3::f.T3 TO: TS S 4 Apr 77 Auth: IYJ. 7713.7ai3 Date: . 2-0. MAR. 1979 By , � ET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 5U � 3.-111N 1949 1003 1. Possii_gyAr UK statement Minister Sforza has expressed to the British Ambassador there his strong objections to the British statement supporting Cyre- raican independence ead has declared he regards it as a breach of faith on the part of evin. The British Ambassador reports he had difficulty persuading Sforza not to resign immediately and still does not know whether or not Sforza will resign shortly. The .z.ritish Ambassador commented to Dunn that Storm's resig,nation at this time would be unfortunate because of the forthcoming Italian debate on the Atlantic Pact. (CIA Comment: CIA believes that Sforza's resignation would broaden the politicalopposition from both left and right to the Government's foreign policy, particularly 'concerning its commitments with the western powers, and would also intensify cant anti-British feeling in Ith.ly. CIA estimates that although Soma's resignation would not prevent ratification of the Atlantic Pact, it would probably hamper effective implementation of the Pact in Italy.) TEE C.I.A. HAS HO OBJECTION TO 71-1E DEO5ATAFICATICH OF THIS DOCUMENT. rm. 021 Document No. 053 NO CHANGE in Class. 0 E] DECLASSIFIED Class. CIL:d7T:r.) TD: TS S DD.1 , 4 .t.pr 77 Auth: DP 7:711763 By: Date: t 0 MA171978� Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TOP'S �Piz, but wLU do nothing to prejudice the eventual unification of Libya. (Cyrenaica, Tripolitania, and the Fezzan). (CIA Comment: CIA believes that this proposed declaration indicates that the British at the September session of the UN General Assembly will support independ- ence for Cyre.naica with the expectation that British strategic Interests would be safeguarded through a treaty relationship.) NEAR EAST-AFRICA S. MIA:. US views on ITashmir dispute�The Department of State be.sas"Friggi Delhi to inform the Indian Government that the US is deeply concerned about the lack of progress toward a peaceful settlement of the Kashmir problem and hopes for an early end to the present impasse regarding a truce. The Embassy is to point out that: (a) the considerable progress made toward tangible US cooperation with India following the establishment of a Kashmir cease-fire has been jeopardized by this lack of progress; and (b) the 8'hard fact remains" that, although the US has scrupulously avoided pressure on India, the subcontinent could not be re- garded as a suitable area for economic assistance projects if the resumption of hostilities should become a strong possi- bility. -2 - Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 EUROPE 2 8 MAY 1949 1000 1. FRANCE: USes on olitical crisis--The Department of State has elapressed to F. ,Thigisy Paris its concern over the possibility of a French governmental crisis. The De- partment suggests in view of the coming critical de- bates in the French Assembly on nationalized industries and social security that the Embassy at its discretion con- timie to impress on French political leaders the danger et engaging in political maneuvers which might have proloondly adverse effects on both French and European stability and recovery. In these conversations the Department advises the Embassy to explain that the recent period of govern- mental shbility in France has done much both to gain sympathy in the US for France's problems and to repair the damage to French prestige resulting from the chaotic period of political crisis during the summer el 1948. - -5 - S TH.: C. I. A, HAr..; NO OBJECTION TO 71-jE DECLA'ZSIFICATION OF . THIS DOCUMENT. NO. Document No. NO CHANGE in Class. 0 DECLASSIFIED Class. CHILliCl2.1) TO: TS S DD_%. 4 f.� 77 Auth Date: 2 0 MAR WEI- Ly Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 oS ?rp-. 50CRET GENERAL 25 MAY 1949 997 1. Soviet motives as indicated bynyishins s ech--Secretary of State Achesonii�Triris comments that Vis ky's state- ment in the 24 May session of the Council of Foreign Minis- ters seems to reveal the fundamental Soviet purpose to re- capture a voice in NVestern Germany, particularly in economic matters. The Secretary believes this interpretation to be supported by Vishinsky s emphasis on the standard Soviet position regarding the Ruin*, his comparative neglect of poli- tical questions, and his failure to include anything calculated to attract any support in Germany. The Secretary adds that his reply to Vishinsky, insisting on the maintenance of the progress already made in Western Germany, was fully sup- ported by the British and French Foreign Ministers, so that a unified western position is clearly on record. The Secretary believes that Vtshinsky's proposal that the CFM deal with the Japanese peace treaty reveals a Soviet desire to: (a) obtain participation for the Chinese Communist government, thus involving western recognition; or (b) embarrass the western powers by forcing them to refuse recognition. The US delegation in Paris expresses its "first impression" that the US should hold to its policy that the CFM is a highly undesirable forum for consideration of the Japanese peace treaty. THE C. Ii i'Ll3 72:c OBJECTION TO 7i-1E DECLA.3SIFICATION OF THIS DOCUM21T. 110. GA Dc cument No. (41 NO CHANGE in Class. [1] DECLAS:7172-7) Class. - TS S 3, 4 .!\ -Dr 77 Auth : _ T'� r : t o3 Tato: .2._o_pagi J978_ O. TOP CRET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TO it) THE AMERICAS 3. C OLOMBIA expected.- -According to a CIA source, President �spina. of Colombia has rejected demands recently made upon him by the ralberal Party and has replaced Liberal Party ministers in his Cabinet with Conservatives, three of them Army officers. Source indi- cates that the Liberal Party directorate is undecided as to retaliation it should take. Meanwhile, the Government has alerted the police and the Army to expect disorders. (CIA Comment: Sporadic violence ill continue in Colombia but it will probably not reach the proportions of a civil war.) - 2 - oo TOP RET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 � 50 T GENERAL 1. Israelis make known their territor.iaLdewa--US repre- sentative Ethridge in Lausanne has been told by Israeli delegate Eytan that Israel will not only present to the Pales- tine Conciliation Commission a demand that it retain all territory now under its control (with possible minor rec- tifications), but will also demand additional territory in north-central Palestine now occupied by Jordan. Eytan also told Ethridge that Israel will do nothing more about the Arab refugees now. Ethridge comments that: (a) the Lausanne Conference is likely to break up when the Arabs know Lsraers position; (b) neither side seems ready for peace; (c) there seems little likelihood that Israel's demands will be modified; and (d) unless Israel modifies its demands, there is no possibility of peace on any basis heretofore en- visioned by the US. MAY 1949 334 :THZ C. LA. NL3 NO OBJECTION TO ME 13=41:"2SIFICAZION OF ZHIS DOCUZLNT. Document No. gt-1-9 NO CHANGE in Class. 0 0 DECLASSIFIED Class, TS S 4.J pr 77 Auth: DDA i , 77Z1.7F3 Date: Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 r U TOP �T. �Itt ere> GENERAL 20 MAY 1949 993 1. Continued Soviet restrictions on Berlin�VS Representative rerdreSTFOTENETEW"--"0�"fforts, re ewing the present status of Soviet restrictions on transport, trade, and com- munications between Berlin and the western zones, that "Berlin remains today In a state of semi-blockade." Accord- ing to Riddleberger, the USSR may be having "second thoughts" on lifting the blockade because the Soviet action has failed to: (a) retard progress toward the establishment of a west German government; (b) produce a "crack" in over-all western trade policy vis-a-vis the Soviet bloc; or (c) release a flow of west- ern zone goods essential to the Soviet Zone and to the continua- tion of the Soviet reparations policy. It eileberger therefore raises the possibility that the USSR may have intended to lift the blockade only enough to oermit reconvening the CFM while simultaneously rew.integ a favorable barmining position in the event that no over-ail settlement on Germany is reached and it later becomes necessary to negotiate some provisional arrangement for Berlin. Riddleeerger believer, in view of continued Soviet restrictions on Berlin trade, that the Depert- ment of Slate should decide whether Soviet implementation of the ressup-Malik agreement has been sufficieet to warrant the convening of the CFM. (CIA Comment: CIA agrees that the 'USSR may be attempting to preserve the most favorable position possible In the event of a breakdown of the CFM negotiations. CIA further believes that the USSR will attempt at Paris to exploit certain remainizg transport restrictions in be.rgatning on the over-all problem of German trade and Its relation to western export policy. CIA believes, however, that e Kremlin's strong desire to hold the CFM meeting would impel the USSR to modify Its restrictions on Berlin trade if confronted by a western refusal to convene the CFM under present conditions.) THE C.I.A. E.:13 :10 OBJECTION TO THE DECLASSIFICATION O. I - THIS DOCUMENT. 6/1:1- S Document No. 043 NO CHANGE in Class.. 0 E] DECLASSIFIED Class. TO: TS S � 4 Lpr 77 _ 77 /1763 2. By: �) Auth: CRET Date: �P.4 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 2. Western dele tes elan tactics for CFM meetin --According to US ussa.oT essup � ris, th�e� , Br h, and French delegates preparing for the 23 May CFM meeting have agreed that, because the Soviet Union is the initiator of the meeting, the USSR be asked at the outset to state its proposals on Ger- many. The delegates believe that western conditions for the unification of Germany should be presented after the Soviet proposals have been dissected, thereby avoiding any appear- ance of presenting the USSR with an ultimatum at the opening of the-meeting. 3. .S� jimitsen_t_of the German question--US Embassy Moscow coders that the Soviet press treatment of the Ger- man question indicates the Kremlin not only had hoped that � convening the CFM would effectively delay development of the west German government but had even believed that the mere announcement of four-power agreement would accomplish this purpose. The Embassy further notes that the emphasis of the Soviet press on economic unification suggests that the Kremlin is primarily interested in the removal of the counter- blockade, interference with Germany's growing contribution to the European recovery program, and breaching the western restrictive trade policy. (CIA Comment: CIA concurs with Embassy Moscow's analysis.) EUROPE 4. GERMANY: British suspect Soviet Zone vote falsified--US Ambassador io�g.s 'onion m e the British Foreign Office that the recent elections in Soviet Zone Germany were "rigged" to produce only two-thirds -2 � TOP- ET Approved for Release: 2018/11/19 006749332 - TS - S e - s Approved for Release: 2018/11/19 006749332 0.6 CRET support for Communist policy. The Foreign Office estimates that Soviet control over the electoral machinery is adequate to have secured a 90% vote. The Foreign Office believes that the USSR may have hoped to: (a) create optimism among the western foreign ministers concerning the possibility of an agreement with the USSR; (b) make the Germans believe the western powers are being needlessly cautious and are delaying Germany unity for their own advantage; and (c) enable Soviet propaganda to assert that the elections were free. (CIA Comment: CIA doubts that the Soviet Zone elections were "rigged" in the manner suggested but agrees with the Foreign Office interpretation of the way in which the USSR may attempt to exploit the results.) 5. GREECE: Government fears big er deal on Greek issue-- The Greek Foreign Ministry has ormed US Embassy Athens of its concern about recent Soviet advances to US and British representatives regarding the Greek issue and of its desire that every effort be made to keep the Greek question out of the CFM. The Greek Cabinet reportedly feels strongly that: (a) the Greek-Communist dispute must be kept before the UN where Greece is represented; and (b) the Greek issue should be left alone until the rapidly improving military power of the Greeks puts them in a position to settle the disputes with their northern neighbors on the most favorable terms. The Department of State has advised Embassy Athens that the US is not negotiating on Greek matters without Greek participation and that Greece has not been mentioned as a subject for consideration in the CFM. The Department expresses the hope that the matter will not come before the CFM and indi- cates that in any case the US will not engage in substantive talks without Greek participation. - 3 - Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 ET e4eye GENERAL 9 MAY 1949 992 1. Western delettonsrech substantial a.,greement in Paris -- In summarizing progress me.Vrffrairbiron�rCE the US, the UK, and France in preparing for the .23 May meet- ing of the Council of Foreign Ministers, US Ambassador Jessup in Paris emphasizes that substantial agreement appears to exist on most points. Jessup cites as agreed upon: the condi- tions for political and economic .linification of Germanys, and the attitude to be laken toward anticinated Soviet proposals. Among differen.ces that Iv e emerged, Jessup report (a) the French are exteemely relukftat to admit a y Soviet representa� tion on the Ruhr authority, though the BEatilsh seem pre.pared to accept such representaticn if it appears to be the last point blocking agreement on German unit; (re) the UK and France are less willing than the US to permit Soviet participation in the Miliinry Security Bcard and suggest instead a czadripartite body to supervise separate security agencies in the Western and Eastern Zones; and (c) the US ha :s proposed eat the western. powers try to obtain the municipal unification of Beelin and the introduction al a third�currency, while the French are inclined to favor a split city with two currencies, and the British suggest that two currencies could circulate in a unified Berlin.. 2. US attitUde concerninFednewal of German ievade--The De.part mis v.- se ,2vOnepresenteliItie Mdleberger In Berlin that because the CFM m.eeteng may not resolve the Berlin currency issue, the par4..em for hterzonal trade arrange- ments now being worked out may last some time and will in any case be an important precedent in further negotiations, The Depa.rtreent therefore deems it essential that the arrmge-- ments beim made assure that: (a) the Soviet Zone gives coanter- value for what it receives; (b) the shipment to the Soviet Zone of prohibited and discretionary items be limited and temporary: (c) Soviet buying does not cut into goods needed by the Western Zones or by ECA; and (d) Berlin does not.7providem :channel fon 6eQ :3 �nee-- escaping controls in the 'Western Zones. ee can,n7, THE C,ii, 1:CLS NO OBJECTION TO 7LE oFT.1.:SIFICATION OF THIS DDC1j:L2:1T. - 1 - r .1.,u�;11 1 77 - t�r:' -5 TO t eP RET Z-a--MAR .1971 - By: CYA Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 EUROPE 3. GERMANY: Soviet set-back in Volkskon.,1 ess elections-- According toifig4 ce ;' .iec or o rmy 11- gence in Berlin (01)11), the adverse results of the Volkskon- gTess elections in eastern Germany apparently took the Socialist Unity Party and other Communist front organiza- tions by surprise. ODI indicates that US observers in Berlin estimate that falsification of returns did not exceed 10%. Pointing out that the Soviet platform appeared foolproof in Its appeal to the Germans and was energetically propagandized prior to the elections, 01)I expresses the view that ability of the voters to see through this Soviet maneuver speaks well for the political acumen of the Germans. MI reports that despite the Soviet defeat, the Soviet Zone press has been citing the results as a mandate for peace, German unity, and troop withdrawal R2d therefore claims they should be con- sidered as a fair cross-section of all German opinion. (CIA Comment: CIA believes that although Soviet- controlled propaganda will undoubtedly continue to hail the results as a "mandate" to the Four Powers, the poor shou- ing of the Soviet-backed parties will actually be a liability to the USSR at the forthcoming CFM meeting.) 2 Approved for Release: 2018/11/19 006749332 ARmi � 5 Approved for Release: 2018/11/19 006749332 �,44 5 0 TOP ET GENERAL iyi:tY 1949 � 93.1 1. US UK and France extend area of eement on Gerina.n sa or essup r 9 prepar - TS meeting of the Council of Foreign Ministers, reports that agreement among the delegates of the US, the UK, and Prance now includes the rejection of any Soviet proposals for a new all-German constituent assembly or for an all-German plebis- cite on unification. The delegates are agreed that the unifica- tion of Germany is conditional upon the recognition of civil liberties and political freedom for all German Zones, the denial of representation for para-political organizations, and the abolishment of the eastern zone Volkspolizet Concerning economic conditions for the unification of Germany, the delegates agreed that the essential prerequisites are: (a) the termination of reparations; (b) the relinquishment by the USSR of the companies it owns in the eastern zone; and (c) a four-power agreement on occupation costs. In concurring that the 1948 Ruhr agreement must not be scrapped, the US and UK delegates expressed the view that the USSR alleluia be ad- mitted to varticipation in the Ruhr authority only if this point were the one obstacle to a final settlement. The delegates agreed that any Soviet proposal for a total troop evacuation must be rejected. The British and French delegates are opposed to any regrouping of forces until a German government exists which is capable of maintain- ing order. The French delegate stressed that this is a vital security question for France in relation to bOi Germany and the USSR. .110. US o ses at_____2T____umanimous vote axm_....,nest--The Department of State has meanwhile informed yessup, in response to his report that the western delegations have been considering whether to apply the principle of unanimous four- power vote to the subjects of disarmament and demilitarization, THE C.I.A. HAS 10 OBJECTIO.t 1 TO n-7, c IT I ON OF THIS 2-- caA . TO .kF#ET CLI '71 � s - s Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TOlCRET GENERAL 1. US views on trade eement between east and west Ger I I '` -The 14r." triWtmen e rmy a orme. toe S itary Governor Cl for Germany, with regard to trade betweem the Soviet end Western Zones of Germany, that the Departments of Army and State believe: (a) the 1948 trade agreement between east and west Germany has legally lapsed and nothing in the Jessup-Malik agreement calls for the reestablishment of those parts of the agreement which are no longer suited to present conditions; (b) east-west trade should be resumed before completion of a new trade and payments agree- ment; (c) this trade could include the export to the Soviet Zone of limited quantities of items contracted for under the old agree- ment even if they are on the US prohibited and discretionary lists; and (d) in any new trade arrangements, the prohibited items should be excluded and the discretionary items subjected to the normal quantitative test. MAY 1949 990 2. US UK and France shape views on Germany--US Ambassador Jessup in is repo prepara on or the forthcoming CFM meeting the delegations of the US, the UK, and France have reached tentative agreement on: (a) the political conditions for the reestablishment of German unity including freedom of political parties and supervised elections; (b) the western response to a Soviet proposal based on the Warsaw commuelque or the concept of making Germany a neutral buffer state; and (c) the manner in which the Bonn Constitution can be extended to all of Germany. According to Jessup, the delegations agreed that the procedure for bringing about the unification of Germany must be adjusted to plans for the establishment of a west German republic. Jessup also reports that the delegations generally favor the principle of majority rather than unanimous vote under a poss lisle four power occupation statute, but are considering whether to apply the principle of unanimity to the subjects of disarmament and demilitarization in order to reassure the USSR on security matters. THE C- I -A. HI-_3 NO OBJECTIO:I TO THE Da!I.A:SIFICATION OF THIS DOCUMENT. NO. 94, TO '1 � ..Zoo; Lib AR 1S/8 6)(d Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 C/0JLJ 7 fl/IP 1949 ET 383 GENERAL 1. witeittot and views on CFM --US Ambassador Jessup in Paris reports that substantial agreement was reached In the first talks with the British and French representatives regarding the forthcoming meeting of the Council of Foreign Ministers. Jessup indicates it was agreed that: (a) unification of Germany is desirable under the proper conditions; (b) a united Germany should be free to associate itself with the West; (c) there should be no delay in implementing the west German government; (d) a boundary commission to study Germany's easter i frontier is desirable; and (e) Austria should be dis- cussed sometime during the CFM meeting. According to Jessup, the French specify as conditions for the unification of Germany the extension. of the Bonn Constitution and free German elections. The French representative believes that if the CFM does not achieve concrete results, there may be a recurrence of inter- national tension; he therefore considers it may be necessary to come to a limited solutio involving some degree of co- ordination between the east and west German systems and a temporary arrangement for Berlin. Jessup made it clear that the US does not favor the withdrawal of US forces from Germany or any disposition of those forces which would weaken US in- fluence in Europe. Jessup indicated that the US intends to insist that the USSR relinquish ownership of property in the Eastern Zone before there can be any unification of Germany. Sits FAR EAST 2. CE7NA: ErallofCantonredicted--US Counselor Clark at CIRA Canton expresses the belief that `anton wififall to he Communists about mid-June. Clark regards as "largely wishful thinking" the current talk among Nationalist officials oE the possibility of THE C.I.A. HAS 2IO (513',..fAd'Y.feji TO HE DECLASSIVialdi6g THIS DOCUMENT. ..,..; ...1.1.1,,?7,:',.� Iso- No . 1 .4,.,: CH(.77 in - - 0, ',;13.� E.-.1.--,3 o e.::,btez SECRVV�t 3 3 z- 2. 0:MAR_ 1978 By Q1(� Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 A 00 rallying northwest and southwest China behind a government removed to Chungking or elsewhere. Clark believes that Acting President Li Tsung-jen may attempt to move the National Government from Canton but will eventually go abroad and attempt to rally overseas Chinese support for anti-Communist resistance in China. Clark requests guidance on whether to follow any National Government which might be set up elsewhere than Canton. (CIA Comment: CIA believes that although Communist forces are capable of greatly accelerating present military operations and of reaching Ca ton within a mo th, the Communists will continue their tactics of methodical absorption and will probably not take the city before August.) 2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 GENERAL 988 I 4 MAY 1949 1. Smaak's views on CFM elgia.n Premier Spaak, in commenting on the forthcoming CFM meeting, has expressed Ms opinion to US Charge Millard that if the USSR proposes the unification of Germany under a federal system the west- ern powers could not assume the onus of preventing a united Germany even if they wished to do so. Speak himself believes that a united federal Germany, with adequate democratic safe- guards, would be preferable to the present situation. SiNtak also: (a) trusts that the wester-.. Dowers will not vithdraw their occupation troops but does not seem to think that the number of troops retained is of primary importance; ad (b) believes that the USSR should at all costs be excluded from the ?Tular. FAR EAST CHINA: US Navy to leave Tsingtso when Shanghai falls-- The Secretary of Ste-a'.6-1alvTe-dFUS-2ViThim, a�TsTd.or bigart in Nanking that the Navy and State DeA, rtments, on the assumption that Shanghai will fall immediate future, are in agreement that US naval forces and activities should be WitildfaWEI from Tsingfao at the ti e of the Communist capture oil Shanghai. THE C.I.A. HAS NO 0BJECT''.7:1 TO HE DECLASSIFICATIO.:.: THIS DOCliiiiIENT. NO. rt Document No. 63i NO CHANGE in Class. EJ DECLASSIFIED Class. C:: 1 TO: TS S T".�-� ' ,Ar '77 Auth: . /1.7Et3 Date: 17.,Te By: 01(6 R E T 314. Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 U TOP THE CoLA, TO SHE THIS 7' bn GENERAL IL 3 MAY 1949 987 1. Possible Soviet intentions in CFM meetin --In reply to queries from the Idorwegian andiwe ish Embassies in Washington, an official of the Department of State has de- clared that the US has no clear indication of w 4 has Impelled the USSR to suggest the lifting of the Berlin blockade and the reconveJ ing of the Council of Foreign Ministers. The Department official suggested as possi- bilities, however, that: (a) the USSR has been suffering from the cotmterbloclade, as well as the adverse political effects, of the Soviet blockade and the successful airlift; (b) the Soviet Union is attempting to retard progress on the establishment of a wester, Germar. government; and (c) the Kremlin may be preparing for a major change of tactics and may put forward far-reaching proposals at the CFM meeting. The US official expressed his personal conviction that there is no possibility at this time of a change in basic Soviet objectives. He made it clear that although any Soviet proposals would be carefully examined, the pre .�-- rations for the western German government will continue to go forward unless full agreement is reached on a government for Germany as a whole. FAR EAST 2. INDOCHINA: Plans of Bao Dal for 4,trsoral anneal to US-- US Consul Gibson at Hanoi s ien intormet 02Z� mperor Bac, Dai intends to return to France about one month after the French Assembly has taken the action necessary for establish- ment of his regime Indochina. According to the informant, Bac Dal then expects to visit the US in order to "establish contact" and probably to request US arms for the new Viet- namese army. 1 L TOiP RET Document No. IY3-7 NO CHANGE CHANGE in Class. DECLASSIITED Class. CI::: .7":; TS 77 Auth� � . 2 IL1AR_1978 0 2,`� Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 'cTpS (CIA Comment: The French National Assembly will convene on 11 May and fairly prompt action on the Vietnam problem is anticipated. Bao Dai's absence during a period when the new government is being established may is-adicate that he lacks confidence in his personal ability to sally nen- Communist nationalists in Vietnam and suggests that he is unwilling to assume governmental responsibility without assurances of support.) TOP 2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 PS fl 2744 GENERAL I. _ DOCUMEiTe. 2 MAY 1949 986 1. British ViGeW concerning Soviet tactics at CFM--US Embassy Moscow transmits the view of hel3ritsflmarge that although the possibility of a major shift in Soviet tactics at the forth- coming meeting of the Council of Foreign Ministers cannot be excluded, the Kremlin is not likely to risk its grip on eastern Germany in exchange for a weaker position in all Germany. The. British Charge estimates that at the C FM meeting the USSR will present vague and unaccep,Kble proposals which can be exploited by Soviet propaganda, thereby seeking to delay the integration of western Germany into the political and eco- nomic system of the West and to weaken the resolution of the western peoples to carry out the North Atlantic Treaty. US Embassy Moscow reiterates its view, however, that a major Soviet tactical shift may develop at the CFM meeting and declares that in any evert the western delegations must be prepared or such an eventuality. (CIA Comment: CIA agrees with the estimate of US Embassy :Moscow concerning the possibility of a Soviet tacti- cal shift.) 2. Reaction of Sovlpublic to lifting of blockade--US Embassy Moscow observes that the reaction of the Soviet public to the lifting of the Berlin blockade is decidedly restrained and not at all comparable to the popular reaction to the Smith-Molotov exchange of a year ago or the Stalin-Kingsbury Smith corre- spondence of last February. The Embassy believes that this reaction is chiefly caused by: (a) the paucity of information available to the Soviet public on the Berlin blockade and a consequent ignorance of the seriousness of the situation; and (b) the lack of attention given the recent agreement by Soviet propaganda, combined with a continuation of anti-US propagan and the recent jamming of US and British broadcasts. - 1 - Jocanent No. 63 0 d/Pe- S eIA- e�hF NO CHANGE in Class., 11 DECT_A(75:72-1,.71.1.,` 0 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TO RET FAR EAST 3. KOREA:...15.22Kaal of Ukirs_o_Lv�itiiciiresi--ITS Ambassador Mucci� at Seoul indicates, in reply to a Depart- ment of State query regarding a re-appraisal of US policy on the withdrawal of occupation troops from the Korean Republic, that his recent requests for military equipment do not imply any need for a fundamental revision in policy. Mucci() be- lieves that although recent border incidents and troop defec- tions, as well as Communist successes in China, have made the Rhee Government increasingly apprehensive, Rhee's approval of the scheduled 30 June withdrawal can be facilitated by favorable US action on the modest request for a few coast gvard vessels and several observation and transport planes. 2 00 T ECekT, �oa 'INFIODOG SIE71 NOTIVOLEISSIT`102a a-IRL 01 ict0II3ICELO oi SVH �IT'1�0.aH THE C.I.A. HAS NO 037CTI-.:1 TO THE DECLASSIFIO'il.TTO: THIS DOCTENT. NO. Olt Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 GENERAL I/ I. MAY 1949 885 THE C.I.A. HAL' -O. f-7^Tr TO 7HE THIS DOCi.ZIE:4T. no. 01 t 1. Us favors sunport of Bao Dai in Indochina�The Department a-g-taTe-1)7iiiTaWsed the Consulate General in Saigon that no effort should be spared by the western powers and the non-Com- munist nations in Asia to assure the success of the Bao Dai government in Indochina, inasmuch as there appears to be no other alternative to the established Communist pattern in Vietnam. The Department adds that when France has offered all necessary concessions to make the Bao Dai solution attrac- tive to Indochinese nationalists, the US will be prepared to recognize the Bao Dai government and will explore the possi- bility of supplying it with US arms and economic assistance. 2. Possible ratification of Atlantic Pact by French Assemlol � French Foreign Minister Schuman has told US Ambassador Caffery that he intends to submit the Atlantic Pact to the National Assembly when it reconvenes on 17 May. (CIA Comment: CIA believes that after a period of discussion marked by the usual Communist delaying tactics, the French National Assembly will ratify the Atlantic Pact when it comes up for a vote. Prompt French ratification would be likely to encourage other signatories to ratify more quickly.) 3. Iran foresees no Soviet milita.r attack�US Embassy Tehran fr--a7-Frits "Diti recently expresse opinion of the Iranian Chief of Staff that the USSR has no intention at present of attacking Iran. The Chief of Staff expressed the belief, however, that Soviet subversive tactics will continue and that it is therefore essential that Lean prepare counter action by organizing units for guerrilla action ard by making needed social and economic reforms. 1 iCuJfle 6.35' .;,r0 2e. , U J1 TOP RET Approved for Release: 2018/11/19 006749332 5 - S - Ts .s Approved for Release: 2018/11/19 006749332 TOP S IDENTIA (CIA Comment: CIA continues to believe, despite reports on 10 May of a Soviet border incursion, that the USSR does not contemplate military invasion of Iran at this time. CIA anticipates that the USSR will continue to incite disorders within Iran but believes that Iranian security forces will be able to cope with such disturbances in the absence of strong overt support by Soviet units.) 2 oh, TOP RET 4!). Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 5On 0 GENERAL 1 0 MAY 1949 984 , . TO 'LIT,D CLL. THIS DOCILE.T4T. NO. tik% ' I. Commission's views on Israeli application for UN membership-- According to US representative Ethridge, the Palestine tton Commission at Lausanne feels that, if Israel gains admission to the UN at this session of the General Assembly, the Israeli delegation at Lausanne will become "hopelessly intransigent" in the peace talks with the Arabs. The Commission believes that if Israel's application is rejected, the Israelis will maintain their present position as best they caa,pending the September General Assembly session,but that the Arabs will be more confident in negotiating with the Israelis. FAR EAST 2. CHINA: US Na=L.,nthdrawal from Tsingtao urged--US Ambas- sador Stuart suggests that the continued use o Tsingtao by US naval forces should now be reviewed in the light of the steady southward advance of the Communist armies. In Stuart's view, the maintenance of the present Nationalist position at Tsingtao will not possibly affect Nationalist capabilities for resistance in South China. Stuart believes that it would be more politic to withdraw US naval forces from Tsingtao immediately rather than do so in a few more days or weeks when faced by a determined Communist attack. 3. KOREA: Decision concerning withdrawal held urgent--The Department o State has informed US Ambassador Muccio in Seoul that a clearcut decision concerning the implementation of the scheduled US troop withdrawal is urgent. The Department believes that President Rhee should be disabused of an impression that the US is willing to "pay any price" for his concurrence with US intentions concerning the withdrawal. It should be made clear 4->"- TO*) ,:179 � O'3(1 43/F1- 5 Approved for Release: 2018/11/19 006749332 sOW Approved for Release: 2018/11/19 006749332 T RET '�44) to Rhee, in the Department's opinion, that US ca bilities to provide military aid to the Republic of Korea are severely limited. The Department further believes that Rhee should be informed at once of US intentions to complete the with- drawal of occupation troops by 30 June. The De . rtment indicates, however, that if Ambassador Muccio has funda- mentally revised his previous estimates regarding the feasi- bility of troop withdrawal, a complete reappraisal of US policy concerning withdrawal may be justified. 2 SECR Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 U ferfP- � GENERAL 1. Possible Soviet tactics at forthcomin CFM meeting�US Embassy Moscow, in commenting on possible Soviet tactics at the forthcoming meeting of the Council of Foreign Minis- ters, expresses the belief that a drastic and dramatic shift in Soviet strategy may well develop even though no specific indications have been noted. The Embassy points out that the Kremlin must be strongly attracted at present by the potentialities of an accommodation which would prevent the USSR from being completely excluded from western Germany while awaiting the development of the expected crisis in the capitalist world. In view of this, the Embassy believes that although the Kremlin will probably attempt at first to achieve the aims outlined in the Warsaw Declaration of 1948, the USSR quite possibly may be prepared to accept nearly the same terms recently agreed upon by the western allies. The Embassy considers that primary Soviet aims will be: (a) the location of the central German government in Berlin: (b) an early peace treaty; and (c) either withdrawal of occupation forces or, as a compromise, drastic reduction of those forces and withdrawal to specific border areas. The Embassy believes that such a Soviet approach would "clearly shake western foreign policies to the very bottom," by confusing western public opinion at a crucial period of western consolidation and by creating practical problems of the first magnitude and of incredible complexity, particularly in connection with current restrictions on East- West trade and with Germany's relation to the political and economic rehabilitation of Western Europe. (CIA Comment: CIA agrees with Embassy Moscow's analysis of possible SoviegItactics in the CFM.) 0 c, E-+ : Fr) CD 0 - ���" Cr) c � F-; ' I% � C.) % ...I 0 6 f,j n 1;4 E.4 8 Approved for Release: 2018/11/19 006749332 633 1978 '3 9 MAY 1949 983 C/A- 5 1"; Z rj tr) Approved for Release: 2018/11/19 006749332 U GENERAL 1. French Atomic scientist Mir work'ior USSR�US Ambassador. Caffery has learned from a 9Tustworthy source" that joliot- Curie expects to be dropped in the near future as head of the French High COTIIMiSSite for Atomic Energy and that he has consented in this event to give his services to the USSR. (CIA Comment: CIA believes that: (a) joliot-Curie's services would bolster Soviet propaganda more than Soviet science; (b) it is very doubtful that joliot-Curie will actually go to the Soviet Union; and / 7 MAY 1949 982 THE C.I.A. HAS NO OBJECTION TO 7HE DECLIIE5I2ICATION OF THIS DOCUMENT. No. YZ 2-0-MAR-1978� 37 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 " 6 MAY 1949 c 50 � ET 981 THE C.I.A. HAS 7.-TO OBJECTION TO� 7HE DT,LCT.ISL'I.E.T.C.ATic,',N C7. THIS DOCU:::T. GENERAL No. 62' USSR reportedlylanninq.action afrainst Iran--US Ambassador /iley trammits inioimationi.which uncaiirmed but from a good source,- that the USSR plans an "imporbat action" against Iran on 10 May. According to Wiley's information, Soviet intentions "exceed a mere frontier incident but are short of a warlike move." Wiley's informant mentioned the possibility of a movement affecting the Kurds. (CIA Comment: .CIA. does not believe that the USSR contemplates a military invasion of Iran at this time. The USSR, however, may plan to stir up trouble not only among the Kurds in Iran but also among those in northern 'rag and Syria. The Kremlin may also plan to use members of the former autonomous government of Iranian Azerbaijan to create disturbances. Iran would be able to cope with such disorders, unless the insurgents are provided with strong overt support from the USSR.) 2. Israeli intrarkF:ks_rice at Lausanne--According to US representa- Gia, - 5 Live Ethridge, the Israeli delegation's statement on the Arab refugees before the Palestine Conciliation Commission at Lausanne indicates that the Israelis are as intransigent as ever. Ethridge considers Israel's failure to appreciate the importance of a conciliatory approach toward outstanding problems as particularly disheartening" in view of the increasing disposi- tion of the Arabs "to come to grips with the situation." 5-TS FAR EAST 3. CHINA: British Ian to defend Hon Kong--The US Naval .Attache in Lon. on reporriThang-britigh 'joint Chiefs of Staff have just decided on an all-out defense of Hong Kong in the event of a Chinese Communist attack. The British Joint Chiefs estimate that Such an atta.ck is "very probable." (CIA Comment.: CIA believes that the Chinese Commu- nists are not militarily capable of a successful assault on Hong Kong in the near future.) - Document No. - 03 1 NO CHANGE in Class. E] 11 DECLASSU'IED - C TO: TS S CRET -1'�a Apr 77 Auth: .,_ 77,1763 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 4. KOREA: Repub ii t�des Korea-- According to US Army Forces in Korea, 8 officers and 519 men of the South Korean Army crossed the border to North Korea on 5 May with substantial quantities of arms, ammuni- tion, and equipment. (CIA Comment: In addition to demonstrating that the efforts of Korean officials to screen Communist sympathizers from the security forces have been less effective than generally believed, this disaffection will undermine the confidence of the South Korean Government in the ability of its security forces to resist Communist pressure from North Korea, The Govern- ment may therefore request that the scheduled US troop with- drawal be delayed indefinitely.) 2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 uOjvii-rp U TOZ1T 880 .447 THE C.I.A., H!..'; 'TO OT3.7"-7',-,17 TO M7, D-: THIS DCL...--:._-_.L.I. MAY 190 GENERAL 1. US views on _Fc suspensione of istt___bian talks�The Department . ta __-t s i--dirF. al---�epit-S-entative Reber in London to obtain agreement on suspending the Austrian treaty talks and on reconvening the negotiations at an unspecified place about 1 August, with the understanding that an earlier meet- ing can be convoked at the request of the participating gov- ernments. Meanwhile, Reber reports that Foreign Secretary Bevin prefers not to fix a date for reconvening the deputies, but would simply have them adjourn and hold themselves at the disposal of the Foreign Ministers. The Department has instructed US Legation Vienna to explain to the Austrian Government that: (a) in case of a German stalemate, the US desires to preserve its freedom of action on the Austrian treaty; and (b) a formal request now by the Austrian Government that the Austrian treaty be given priority in the CFM negotiations would destroy this freedom and might postpone conclusion of an Austrian treaty indefinitely. 2. Ilaposition on Italian colonies�The Department of State has instructed the US delegation to the UN, regarding possible proposals on the disposition of the Italian colonies, that the US should: (a) strongly support the British resolution which provides for UK trusteeship over Cyrenaica and refers the question of the disposition of the remainder of Libya to a five- power group which would make recommendations to the next General Assembly; (b) vote for any other resolutions which agree with prior US commitments to the UK, Ethiopia, and Italy on Cyrenaica, Eritrea, and Italian Somaliland; (c) pro- pose, if the GA rejects the British resolution or a move for immediate Libyan independence develops, that the UK or the Document No. S 1 NO CHANGE in Class. L] ..------ 0 DECL/1S 0 Class, C,.7 . - 7): IS S g 2 p::. 77 Auth: I--; - .- ._ .., , i Date: "1' � ''''" 1" 1-1.1P By: Approved for for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 � ET UN Trusteeship Council be authorized to study the matter and recommend means for attaining independence to the 1950 General Assembly; and (d) abstain from voting on any proposal for immediate independence for Libya. Regardless of the disposition of Libya, the Department considers it highly desirable that Eritrea and Somaliland be disposed of at this session of the GA. FAR EAST 3. BURMA: Commonwealth alans renewed aid--US Embassy London haTFeeiFIROTEZBITIFETTErrri oreign Office that an agreement reached at the recent Commonwealth Prime Ministers' Conference to extend military and financial aid to the Burmese Government will be announced in the near future. The Foreign Office indicated that the UK would proba- bly bear the brunt of such assistance but that Pakistan, India, and Ceylon would also contribute. Conditions attached to the agreement specify that the Burmese Government: (a) conclude an armistice with the Karens and other non-Communist in- surgent elements; (b) effectively rehabilitate government finances; aid (c) permit supervision of these actions by the British, Indian, a d Pakistani Ambassadors to Burma. The Foreign Office believes that the plan has a "fifty-fifty" chance of restoring Burmese internal stability. (CIA Comment: CIA believes that the plan has a reasonable chance of success provided the Commonwealth conditions are observed, but seriously doubts the ability of the present Burmese Government to comply with these condi- tions. -2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 U Co GENERAL 4 MAY 1949 979 /. Views on CFM discussion of Austria�US Legation Vienna transmits the opinion of Austrian Foreign Minister Gruber that failure to include Austria on a CFM agenda would have a deeply discouraging effect on the Austrian public. The Legation concurs in this view and recommends: (a) that Austria be included on the agenda of a CFM meeting or that, at least, informal assurances be obtained that Austria will be discussed at some time during the meeting. and (b) that when the present London talks are suspended, the deputies agree to reconvene, after a brief period, at the site of a CFM meeting. 0004., TOE?. TI-12 C. I..f::_ 7 1:: -3.7E017 cri TO 7.r.T2 THIS DOC'JMEAT, vo, pas cument No. Oct NO CHANGE in Class.. [j OLATTD TS S P .2 77 A 3 r. '77:1733 REa; oj�197B By; O2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 3U GENERAL THIS NO. 618 3 MAY 1949 378 1. Sumeasion of Austrian talks su ested--According to US represen we � e er . on, JR-poslittons of the four powers with respect to the Austrian treaty are "staking: further into a deep freeze," and the USSR has made it clear that, pending a decision to hold a CFM meeting, it does not intend to change its stand on any of the Austrian issues currently being reviewed. In order to facilitate separation of the Austrian and German questions, Reber proposes that the present negotiations be suspended before agreement is reached on the agenda for a CFM meeting. eber recom- mends that a date for resumption of the talks be fixed far enough ahead to allow time for a CFM meeting, us assur- ing continuity in the Austrian discussions, regardless of any ection on Austria by the CFM. 2. Department fae4tors new plan tointernaliT_ialtasisusaleni-- C/A- s The 3epa.rtnient o:.? State has 'informed the US member of the 5 Paleeitine Conciliation Commission (PCC) that it approves the plan for internationalizing Jerusalem prepared by the PCC Secretariat. This plan provides for: (a) an interna- tional authority exercising actual governing power only over the Holy Places, reserving all other powers to the Jewiel and Arab authorities in their respective zones; (b) demilitarization of the area; (c) an administrative coun- cil, composed of Arabs,. Jews, and neutra.ls, respons- le for matters of common concern to both zones; and (d) an inter- national tribunal .with jurisdiction over disputes regarding the competence of organs and ccerts within the area. ,2 0 MAR 1Sia Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 CRET GENERAL 1. 1. ProstestsJEAustrian treat i talks�The Department of State has informed US representative Reber at the Austrian treaty talks that it does not desire to discuss the problem of Austria at any forthcoming CFM meeting until substantial agreement is reached on German issues. The Department does not wish to link the Austrian ea.ty to a possible dead- lock on Germany, thus prejudicing future Austrian talks, and understands that the British and French concur in this ap- proach. The Department desires that discussions of the Austrian treaty be continued in order to clarify secondary issues and to ascertain Soviet intentions, that a recess be obtained shortly before a CFM meeting, and that negotiations be resumed simultaneously with the CFM meeting. Austrian Foreign Minister Gruber has expressed the hope to US Minister Erhardt in Vienna that, if no agreement is reached on Austria either at a CFM meeting or during the London talks, the western powers will make a sweeping pro- posal advocating that occupation of Austria be terminated within six months or a year and that, in the meantime, occupa- tion controls be relaxed and the Austrian army be built up. Erhardt agrees substantially with Gruber, despite the fact that Gruber's proposal would take western forces out of Austria while the USSR retained German assets in Austria and the frontier issue remained unsettled. THE C.I.A. HAS NO OBJECTION TO IHE DECLASSIFICATION OF THIS DOCUMENT. MAY 1949 977 /,q- 5 e/i4 - 5 FAR EAST NO. 02-46 2. CHINA: Communists seek trade with a.pan.--US Consul General Clubbin Peiping reports that t e Chinese Commu- nists have solicited the help of a private US firm in promoting trade between North China and Japan on a barter basis. The firm's representative has asked whether the State Department Oln e 7). -C., 2.7(7- (�7 -; .7j s' - a/A- s s -s Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TO and SCAP would approve in principle of such trade. Clubb requests authorization to inform the Communists, when they inquire about such trade, that the US would be ready to give sympathetic consideration to its facilitation provided US consular establishments in Communist-controlled areas were permitted to function normally. Clubb transmits his firm belief that such an opportunity to insert an opening wedge between Communist China and the USSR should be promptly and fully exploited. Shanghai near economic colla se--US Consul General Cabot in Shang i reports that Shangh.ai faces catastrophic conditions. According to Cabot, public confidence in the Nationalist currency has practically vanished, employers are unable to meet their payrolls, and foreign businessmen fear that conditions will become so bad that the people of Shanghai will welcome the arrival of the Communists. Cabot considers it essential that the US continue the present ECA program for Shanghai because its curtailment at this time would lead to such serious food and supply shortages that economic collapse would be complete. Cabot believes, however, that ECA stocks in Shanghai should be kept at prudently low levels. 2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 30 APR1949 co TO 976 44), GENERAL 1. Strained relations between Syria and Transjordan--US CharTeMiZrei�� in nrn-Fial-Tepor sf1Tiig Syrian radio attacks on King Abdullah and Transjordan, the Amman press and radio have begun a campaign of criti- cism against Syria. Stabler considers it likely that the propaganda battle will become intensified and that Abdullah will make ill-advised statements concerning the Greater Syria issue "which will only add fuel to the flames." FAR EAST 2. SIAM: New cow) attempt--The US Military Attache in Bangkok reports that Siamese Premier Phibul has broad- cast an appeal, urging all Siamese to avoid civil war, and indicates that the capital has been shut off from highway communication with the rest of the country. Latest radio reports suggest that Phibul has proclaimed a state of emergency in the capital and that all public buildings are being closely watched. (CIA Comment: CIA believes that a new attempt at a coup is now in progress. In view of Phibul's evident forewarning; CIA believes that the attempt probably will be effectively forestalled.) 5-s ARmy - e� IPF C.I.A. El: ::0 03JECTION TO 7I-32DEc:1ssiFIcTION OIY THIS DOCUMENT. NO. DocumentNo. To NO CHANGE in Class. 0 0 DECLASSIFIED Class. CHANCED TO: TS DD.: 1 :130, 4 Apr 77 Auth: DDA R. 77/1763 Date: AR 19Th By: 61 s Approved for Release: 2018/11/19 006749332 .-r Approved for Release: 2018/11/19 006749332 0 U 29 APR 1949 9.75 T1,2 C. IA. HA3 :TO OBJECTION TO HE DICLASSIFICATION OF THIS DOCUMENT. GENERAL NO. 04 I.IlejElan and French views on German situation.--According to US Ambassador Kirk in Brussels, 1:elgian Premier Spaak's initial satisfaction over recent developments concerning erlin has been tempered by "a Lote of caution." Speak warns that the western powers must not relax their efforts to achieve collective security. Speak feels that if the block- ade is lifted in accord with the stated Soviet conditions, the western powers will have galned a real diplomatic advantage and the USSR will Save face through western willingness to hold a CFM conference on Germany. US Ambassador Caffery reports that the French Foreign Office is apparently thinking in terms of a CFM meeting on Germany in the latter pylf of May. The Foreign Office, which reportedly anticipates that the Soviet proposals will be very liberal, believes that the most desirable solution would be to maintain east and west Germany as they are but with commercial relations restored. The Foreign Office con- siders that if the USSR presses for the establishment of an all-German government, an extension of the omi Constitution to all Germany migld be possible. 2. Views of US delsEtipL_I colonies issues�The US delegation at the UN recommends that US Embassy Rome be Wormed the US has no alternative but to support the British position on the Italian colonies question. (The British are Insisting upon sole UK trusteeship for Cyrenaica and upon limiting any arrangements for multilateral trusteeship to Tripoliiania and the Fezzan.) The delegaticn recommends that the Embassy not only express the hope to the Italian Foreign Mee that Italy will urge its supporters in the UN not to oppose the US-UK position but also point out that: (a) apparently the only alternative is failure by the UN to Document No. NO CHANGE in Class, 0 LI DECLASSIFIED Class. CD TO: TS S D.D 4 Apr 77 Auth: DA 77/1763 Date :2 o MAR VI . By: ci2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 CD ET .81172,2.47 agree on any aspect of the colonies problem, which would certainly bring about a deterioration of the situation pre- judicial to Italian interests; (b) the preservation of Cyre- nalca.n security, which the British believe is endangered by postponement, is of paramount importance to all western powers; and (c) separate prior settlement on Cyrenaica would not seriously prejudice Italian interests, which would be taken into account in any final decision on the rest of Libya. The US delegation also reports that a Latin Ainerica.n caucus has agreed unanimously both to vote against the British proposal and to insist on simultaneous disposition of all Libya. The delegation points out, however, that this position may change, particularly if the US strongly supports the UK, and that some Latin American delegates have indicated that their final attitude would depend' on whether Italy concurred. The delegation reports that the Arab delegates also reacted un- favorably to the UK proposal and expresses the belief that other Asiatic states too would be opposed. I.JS concern over �ossible unilateral action in C rena.ica� The Department of State has adviset the US delegation to ex- press to the British delegation the view that it would be unwise for the UK, in case UN disposition of Cyrena.ica should be post- poned, to take such hasty and unilateral action as to extend recognition to the Emir of the Cyrenaican Senussi tribes and set up an autonomous state. The Department considers that in such an event the US might have to take a public stand criti- cal of the UK, despite US understanding of the needs of the UK and British concern over the internal situation in. Cyrenaica. - Co TO 24Z Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 6\ TOPS FAR EAST 3. CHINA: Problem of continued US r.essnition of Nationalists-- US Counselor Clark in Canton expresses the view that the Widen- ing rift between Li Tsung-jen and Chiang Kai-shek will so fragmentize anti-Communist China politically that the National Government will become little more than a regional authority. (Li plans to continue resistance to the Communists with a bloc of local Southwest China military leaders, while Chiang re- � portedly plans to make a last stand on Taiwan while awaiting war between the US and the USSR.) Clark believes that the US will have to scrutinize the situation carefully at that time in an effort to determine whether continued recognition of the National Government will make the US look ridiculous in the eyes of the world. - 3 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 SE T '8*1441tHE c . 1. A, H.:).:31:3 TO THE DC - ^..7.37.17ICA`P1Oi�f THIS DOCTLI:2. GENERAL NO. 610) 1. UK insists on sole control over C enalca�The US delegation at the innTsTheen orme y e c .igrof the British delega- tion that British ForeignsSecrefcary Bevin has personally in- structed him to: (a) press for sole UK trusteeship over Cyre- naica; (b) express willingness to accept in principle the suggested preliminary arrangements for achieving multilateral trustee- ship of Libya, but only insofar as they pertain to Tripolitania; (c) urge the US to accent trusteeship over Tripolita ia., if no other solution seems feasible; and (d) settle for postponement of the Cyrenaica question if everything else fails. Bevin indi- cated that if such postponement occurs, the UK will go ahead with an agreement with the Cyremicanileader and with measures for self-government. Bevin directed the British delegate to remind the US of its 1947 firm pledge to support UK trusteeship over Cyrenaica. (CIA Comment: riti,sh insistence upon sole trusteeship over Cyrenaica sharply reduces the prospects for any compro- mise agreement on multilateral trusteeship for all Libya and thus diminishes the likelihood of any decision on Libya at this session of the General Assembly.) 8 APR 1946 974 2. usglazsms Lsraeli UN meinbersia--The Department of State has inforWS Zgrer�ation to the UN t the US is not yet in a position to sponsor a resolution for Israel's ad- mission to the UN. The Department indicates that the US awaits Israeli assurances concerning the status of Jerusalem, the Arab refugee problem, and territorial settlement, so that a favorable atmosphere will be created for Israel's admission. The US will still support the Israeli application, whenever the General Assembly actually considers it. 1 Document No. 0 C/A- S .5 - eOPI F. NO CHANGE in Class. DECLASSIFIED Class. T3: TS S 4 Apr 77 Auth: 71763 Date: By: OA 77 MAR1978 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 0 ET 44) FAR EAST 3- CHINA: Li re ortedl send' emissar to US--US Counselor Clark in Canton reports i t e pr cipa po ical adviser to Acting President Li Tsung-jen intends to come to the US bearing a letter from Li to President Truman. Clark adds that the Li group claims the support of various South China military leaders and will attempt to remove Chiang's appointee, Chen Cheng, from the governorship of Taiwan. In addition, Li's advisers have outlined to Clark a program of military and administrative reform through which they hope to revive Nationalist fighting spirit, produce victories, and thus persuade the US to grant further aid. (CIA Comment: CIA believes that in view of the Com- munist crossing of the Yangtze and the conflicting interests of Li and Chiang Kai-shek, there is even less reason than heretofore for any optimism regarding Nationalist rejuvena- tion.) 2 RET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 - 5 0 9 7 APR 1949 373 HAS NO OBJECTION TO HE DECLASSIFICATION CF THIS DOCUMENT. GENERAL 0. 1. Its:_sLip:Malik tailts--The Department of State, in commenting on the Jessup-Malik talks, has informed US missions in the field that Soviet Representative Malik has raised the question of the formation of a west German governme t but has not made a specific condition of the point. US Representative Jessup has indicated in reply that preparations would continue on the government but has pointed out that the question of establishing the government does not arise in making plans for a CFM meeting in the near future. (The Department ex- plains that there is ample time for a CFM meeting before the west German government could actually be established.) The Department has further advised its missions that, although the 26 April TASS release apparently accepts the US position, there are indications that the USSR may attempt to interpret jessup s statement as a firm commitment that a west German government would not be established either prior to, or during, a meeting of the CFM. rhe Department considers that this . Issue must be definitely clarified in further talks between Malik and Jessup. US Embassy Moecow, in commenting on the TASS release, expresses the .view that the reference to the Kings- bury Smith-Stalin exchange does not actually remove the speci- fic condition that removal of the blockade is dependent upon postponement of a west German government as well as convoca- tion of a CFM meeting. The Embassy believes, however, that the Kremlin might drop this conditiat in view of the potential effect of an ostensibly serious peace offer combined with a lifting of the blockade and a meeting of the CFM. (CUL Comment: CIA believes that, although the USSR may attempt to make the postponement of a west German gov- ernment a specific condition for lifting the blockade, the Krem- lin may estimate that the effect on the Germans of removal of the blockade will alone halt or postpone the establishment of a west German state.) 1 Document No. 693 sas C/A-s NO CHANGE in Class.; E] DECLASSIF.T.ED Class. C.' o TS S � AD:. 77 Auth: 77/173 22 RET _mem 0 'MAR 1 By: 0 978- ;1 ,2:441 Date: Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TO13 ET `q)* 2.gspolic on Austrian trea e �otiations--The Department represen ve Reber at the Austrian treaty talks in London that if the current discussion on un- agreed articles should fail to facilitate general agreement, the discussion should be returned to the question of Austrian frontiers and reparations. The Department advises Reber that if the Soviet delegation does not at that time relax its support of the Yugoslav claims, he may seek adjournment of the conference, which would be resumed at a later date. The Department asserts that US objectives in the current review of unagreed articles should be to obtain the maximum possible agreement and to test Soviet intentions in regard to the ultimate conclusion of a treaty. 3. British views concerning MAP legislation--US Embassy London expresses the vfew, concerning irniaritiessional legislation on the Military Aid Program (MAP), that there would be a strong adverse reaction in the UK if MAP were financed through eats in ECA. The Embassy considers that despite British confidence in the US and the current assumption that US-UK unity is funda- mental to British foreign and defei. se policy, a linking of MAP with ECA or the attaching of onerous or unilateral conditions to MAP would bring a strong 1: ritish reaction. The Embassy believes that failure by Congress to pass MAP legislation would create grave doubts in the UK concerning US reliability In international ffa irs and would cause serious British con- cern over the psychological effect on the French. FAR EAST 4. CHINA: Widerift in Nationalist China --US Counselor Clark in Canton transmits a letter from Acting President Li Tsung-jen expressing the decision of his government to Approved for Release: 2018/11/19 006749332 e/A 5-5 Approved for Release: 2018/11/19 006749332 6)0 ET i. defend China's southwest and resist the Communists "to the last ditch." Clark reports that Li plans to have a show- down with Chiang Kai-shek over his insistence that Chiang and his followers recognize Les supreme authority. Failing this, Li reportedly intends to remain in Kwangsi Province and direct from there the defense of the southwest, where he claims he has the support of local military leaders. Li requested that remaining ECA funds not be obligated without Ms prior approval and asked in particular that no ECA funds be used in Taiwan or other areas under Chiang Kai-shek's influence. (CIA Comment: CIA believes that Li and Chiang will not find any amicable settlement for their differences, which are presently permitting the Chinese Communists to con- centrate against one and then the other nationalist group, thus facilitating their conquest of all China.) - 3 - TO RET 44), Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 9, APR 1949 U CRET 972 GENERAL 1. British to grant Polish overflight of Germany-- US Embassy ( 4 - 5 Brusi�ias 1�ed1romirrsirrailsy that the UK is willing to grant the Polish airline the right to overfly UK Zone Germany, in connection with the setting up of a Warsaw- Brussels air service, provided such services are truly re- ciprocal and a Belgian airline can begin simultaneous operations. The British Embassy, which has been authorized to inform the 3elgian Government of this view, indicated that it had previously raised with the UK Foreign Office the question of the advisability of proceeding unilaterally with the Belgians, thus breaking the US-UK common front on Satellite aviation policy. Ambassador Kirk adds his opinion that until basic agreement has been reached with the UK on an interpretation of the common Satellite aviation policy, the US probably cannot influence Belgian and western European air policy. . � J. I. A. -1) .TECT:r. TO luff, THIS DOCUILL:l. NO. 01% Document No. 6P NO CHANGE in Class, 0 DECI1S.ST1:127.ID Class. C1- TS 77 S ALrn2:.? . Date: .1- By; TOP T 47.? Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 C0.47? 50 Tor; RET 444, EUROPE 25 APR 1949 971 1. CZECHOSLOVAKIA: Plans for obtaining release of US soldiers-- The Department of State ha.s informed Acting Political viser Ridileberger in Berlin that if the Czechoslovak Government can- not offer satisfactory proof that the two imprisoned US soldie;:s are guilty of espionage, General Clay will be instructed to inform the Czechoslovak mission in Berlin that he will have to revoke permission for Czechoslovak consular and other officials to re- main in the US Zone of Germany unless the soldiers are released promptly. Meanwhile, if these steps fail to result in the release of the soldiers, the Department is considering the possibility of terminating the exchange of goods between the US Zone and Czechoslovakia and preventing transit traffic through the Zone. FAR EAST S- TS 2. CHINA: Stuart not to ma_ 1_,...111.1ou ,a--The Depart- _ ment of State, in response to an inquiry from US Ambassador - 5 Stuart, has informed him that it is not the Department's intention that he make a precipitous departure from China after the Com- munists seize power in Nanking. The Department considers it of the greatest importance that Stuart attempt, by informal con- tacts with Communist authorities, to regularize the status of US Consulates and communities in Communist territory. THE C.I.A. PAS NO OBJECTION TO THE DECLASSIFICATION OF THIS DOCUMENT. NO. Citi Document No. 09,1 NO CHANGE in Class. DECLAS131717D Class. Cj:' � -1 El TS Tr � An�:-. 77 Auth: L. ,.77/1�763 Date: r!. , L By: 6)3 tv% TO '.RET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 5U f64 s ET EUROPE 25 APR 1949 970 1. GERMANY: Socialist Views on draft constitution-- According to Acting US Political Adviser Riddleberger in Berlin, the German Socialist Party (SPD) expects to continue the Bonn discussions on the basis of new proposals for the West German draft constitution. Riddleberger states that (SPD) moderate leaders as well as the SPD delegation at Bonn now expect ultimate agreement at Bonn on a text acceptable to the occupying powers, but that the SPD extremists who opposed the original draft still consider such an outcome unlikely. FAR EAST 2. CHINA: US Ambassador scheduled to return-- The Department of State has advised US Ambassador Stuart to remain in Nanking until the Communist regime is firmly established there. Stuart Is then to return to Washington for consultation. Meanwhile, Stuart reports that Acting President Li and remaining top officials have fled Nanking and that all Nationalist troops deployed for defense of the Yangtze river have been ordered to withdraw south of Hangchow. According to Stuart, the ridiculously easy Communist crossing of the Yangtze was made possible byNation- alist defections at key points, disagreements in the Nationalist high command and the failure of the air force to provide effective support. C/F)- coNF. 0/A- t'oirk": THE C.I.A. HAS NO OBJECTION TO THE DECLASSIFICATION OF THIS DOCUMENT. no. at .0ocument No. NO CHANGE in Class.. DECII--717) Class. C..7 � - ' . . Auth: 77 1763 Date: B37-67-3-- ---7774RT97V ACRET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 --o4s TOP GENERAL 22 APR 1949 9 $1 1. US assurances to Arab states ug--The US Consulate General in Jerusalem suggests that, in order to restore peace in Palestine and long-term stability in the Middle East, the US should give assurances to the Arab states that the US is prepared to make strongest representations to Israel against the threat or use of force both during and after the 26 April peace negotiations at Lausanne. The Consulate believes that such assurances are necessary in order to restore Arab confidence and to free the Arabs from fear of the kind of military pressure they experienced during the recent armistice negotiations. The Consulate adds that postponement until September of the Israeli ap- plication for UN membership would demonstrate to Israel that it cannot continue to ignore world opinion with impunity. - TS 2. Socialist stand nGerman_con_kelitysjaotjanal-- 5-s Acting US Political Adviser Riddleberger in Berlin expresses his view that the Socialist Party (SPD) resolution against the west German draft constitution, which at first seemed like an ultimatum, has in fact left the door open to further negotiation. Riddleberger believes that the resolution must be considered in the light of the SPD contention that it is the political party which stands most clearly for German ideas and rights. Riddleberger suggests that if the SPD does make concessions, the Christian Democratic Part-40. icA3JILICOTN1,01. may assume a more adamant position at Bonn. THIS DOCUMENT. (CIA Comment: CIA agrees that the SPD will be willing to continue negotiations but believes that the SOP' will now seek to gain more substantial concessions on the draft constitution than it demanded prior to the Party resolution.) o\ qbx. TOP' cREATuth: D.2. 0 MAR _Document No., OM NO CHANGE in Class.) 0 DECTAr-r-r7 Class Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 GENERAL. 21 APR 1949 968 C,. I . A. LIA:3 NO OBJECTION TO HE DECLASSIFICATION OF THIS DOCUMENT. 1. British anticipate accelerated Soviet peace offensive�US sassy on on i. � nsm s Le ew a r ::oreign Office official that current vague "feelers" and rumors concerning the lifting of the Berlin blockade by the USSR should be regarded as preparation for an all-out Soviet "peace offensive." The British official reasons that be-. cause the Kremlin must realize that the blockade has boomeranged against the USSR and has actually strengthened anti-Communist sentiment both in Germany and among the western powers, a change of tactics is essential if the USSR is to regain the initiative. The official considers that a Soviet peace move is imminent and may be launched on May Day. He believes that such a peace gesture would con- sist of a proposal for: (a) the lifting of the blockade and counter-blockade; and (b) Four Power discussions of Ger- man questions, including the establishment of a single Ger- man government. Although the Foreign Office official be- lieves that the Britivh public would not be taken in by such a peace move, he fears it would strike a responsive chord in France, Italy, and elsewhere in Western Europe. (CIA Comment: CIA agrees that the USSR is 111raly in the near future to make proposals for an East-West settle- ment involving the lifting of the Berlin blockade. Although it appears that a change of Soviet tactics is essential if the USSR is to regain the initiative, there is no specific evidence that Soviet strategy has changed sufficiently to permit the proposal of terms acceptable to the western powers.) Document No. ot$ NO CHANGE in Class., DECLASSIFIED Class. TO; TS S . Jr 77 - Au t h77 :176'3 Date: 2; 0 wiAR 1978 By: t Approved for Release: 2018/11/19 006749332 &/19 - 5 Approved for Release: 2018/11/19 006749332 Li FAR EAST ,o APR1949 967 1. CHINA:EtEe_a_kj_l_ of easer_LesatL. ns--US Ambassador Stuart reports that the National Government dispatched a message on 20 April to the Communists, rejecting their proposed peace agreement and requesting a continuation of discussions. According to Stuart, the Communists have meanwhile informed the Nationalist peace delegation in Peiping that if by approximately noon of 20 April (Washing- ton time) a negative answer, or no answer has been received to their proposal, the Communists will consider negotia- tions to have been broken off and will begin crossing the Yangtze River. Stuart also reports that the Nanking Govern- ment is taking steps for immediate removal of its remaining agencies in Nanking. THE C.I.A. HAS NO OBJECTION TO 7EE DECLASSIFICATION OF THIS DOCUM.E.NT. NO. OA .)cument No. 511 CHAEGE in Class. DECLASFITTTD lass. C. TO: TS S D. ,)41 L rT., ./7/.1'76'3 ate: By: i2) Approved Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 60- U TO FAR EAST 9 APR ig49 966 1. CHINA: Li finds Communist terms not acceptable--Acting 5- 5 President Li has informed the US, British, French, and Australian Ambassadors in Nanking of the Communist peace terms, which amount to unconditional surrender. According to Li, the Communists demanded that reply be made to these terms by 20 April, but he has answered that the difficulties of reaching the various members of the Nationalist Government will require more time, though not beyond 23 April. Li told the Ambassadors that he felt cer- tain the terms would not be acceptable to his Government and that he is now convinced no peaceful settlement can be reached with the Communists. Following Li's request for advice from the Ambassadors, the British Ambassador expressed the sentiment of the group that nothing could be done to aid the Chinese in settling what is essentially a Chinese problem. Stuart believes that despite the non- committal stand by the Ambassadors the National Govern- ment will not accept the Communist terms. TO 1HE DECLASSIFICATION OF THIS DOCUMENT. NO. VA Docuwer.t, NO CILT.7.:T (2:1 C. � . Auth: Date: (0 Approved for Release: 2018/11/19 006749332 1' 7C Approved for Release: 2018/11/19 006749332 C1.0 U TOP1P GENERAL 1. Israel and Trans ordan may b ss UN Commission�US rge er mman expresses concern that Israel and Transjordan may conclude a separate peace settlement which will settle the future of Jerusalem without regard for international interests, thereby relegating the UN Palestine Conciliation Commission to a position of insignificance. After pointing out that the Israeli-Transjordanian armistice provides for a special committee to negotiate such a final settlement, Stabler expresses the view that King Abdullah is likely to accede to Israeli pressure to set up such a com- mittee soon and that Abdullah would be inclined to accede "somewhat too rapidly and generously' to Israeli demands. Stabler suggests. that the US advise Abdullah at least to await the outcome of the UN Commission's Lausanne Con- fereace before proceeding far with direct negotiations. co 41 CRET 7744 18 APR 1949 965 THE C.I.A. IMS IQ 03.7ECT1:!ii TO 7HE DECLASSIFICATIOX OF THIS DOCUMENT. NO. LQ ? ; �- , -1 ") Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 5U ET 2-441 16 APR 1949 964 EUROPE 1. YUGOSLAVIA: jfles tradeakin-- The Department of CI.A/S State has informed US Embassy Belgrade that the US does not intend at this time to attempt to exact political concessions from Yugoslavia as the price for further relaxing trade re- strictions. The Department adds that the US. continues to regard Greece as the first possible exception to the present policy of not imposing political conditions as a part of trade relations. FAR EAST 2. CHINA: Acting....Eit Li requests US issue statement-- S13 Ambassador Stuart in NankilitifiFar-rsia�s iiedfire-MTRITY1- President Li that the US issue a deterring statement to the effect that Communists crossing the Yangtze would be con- sidered a threat to the security of the US and that, should such a military operation be undertaken, the US would have to give consideration to appropriate measures to be taken., The ambassador expresses the opinion that Lids appeal is further evidence of his desperate position and the small con- fidence he places in current peace negotiations� Ambassador Stuart recommends that no such US statement be made unless the US is prepared to back up the statement by some kind of effective assistance; Document No. 0 NO CHANGE in Class. 0 Ej DE nil .0 Clar.55. TS S - �- 77 : -zee THE C..I. A. HAS NO OBJECTION TO E DECLASSIFICATION OF THIS DOCUMENT. Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 Du GENERAL .q 5 APR 1949 963 1. Swedish air chigivara.s_ta_m_sable wartime assistance-- According to Charge Cumming in Stockholm, the Com- manding General of the Swedish Air Force recently told British Air Mars 1 Tedder that under certain circumstances he would evacuate the Swedish Air Force to "any point of combat assistance to Western defense forces." Cumming believes it to be very doubtful that the Swedish Air Force either could or would be ordered to leave Sweden in the event of Soviet attack and that the Commanding General's statement would be repudiated by the Swedish Government if it became known. Cumming interprets the real purpose of the Swedish statement to be: (a) to invite current assistance to the Swed- ish Air Force and the standardization of equipment along RAF and USAF lines; and (b) to initiate backdoor staff con- versations with the US and the UK. (CIA Comment: CIA believes that the Swedish Air Force would not evacuate unless all further resistance was useless or unless the tactical situation required air opera- tions from Norwegian or Danish bases in coordinated defense of Swedish territory.) 2. FAR EAST KOREA: Rhee asks ..11.�..guarantee of Korean independence According to US Representative Mucci�, President Rhee is tarrying over his decision to issue a statement in which he will affirm the ability of the Korean security forces to defend the Republic and suggest a review of the timing of US troop withdrawal. Muccio reports that Rhee, who apparently hopes for more concrete confirmation that the US intends to send military aid, specifically asked whether the US mightflug UI. r:^ TO 711ED=C THIS DOC LASSIFI-CA-TIO-Liii�;Fi UMENT. 5 -T 110. - 1 - u lament No. FO CHANCE in Class., DE cr. 004 TS S " - TO CRETAutel . _ _Z_DAARJ978 : Approved for for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 004, TOP issue a statement which would reaffirm the mutual defense aspects of the treaty of 1883. Mucci� believes Rhee will make a statement soon, possibly at an anti-Communist rally on 16 April. (CIA Comment: CIA believes that Rhee will utilize every possible device to obtain concrete assurances of US military aid.) -2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 00 co TO ET -r4z GENERAL 1 4 APR 1949 - 962 1.US approves _1-Yugoslav air discussions --The Depart- ment of State has informed US Em ssy Rome of its view that the US is now able, in the implementation of its civil aviation policy toward the USSR and the Satellites, to con- sider making a distinction between Italian-Yugoslav air operations and operations between Western countries and the other Satellite states. The Deprtment has therefore authorized the Embassy to inform the Italian Foreign Office, if the ritish Ambassador concurs, that the US is mindful of Italy's special relations with Yugoslavia and would not object to Italian-Yugoslav discussions concerning an ex- change of provisional commercial air rights on a limited basis. The Department suggests, however, that the Italians merely explore Yugoslav proposals and that no definite com- mitment to negotiate be made. 2. US opposition to Belgian-Polish air agreement�The De- par ment are�b.ariligirc-rietWoliTS-E-HialTrBrussels to reiterate in the strongest terms to the Belgian Govern- ment the dissatisfaction of the US with the tentative Belgian approval for commencement of Polish commercial flights to Brussels. The Department believes that it detects "serious soft spots" in the US-UK air policy toward the Satellites as evidenced by the Belgian-Polish arrangement for reciprocal flights between Brussels and Warsaw, by a British willingness to grant clearance fir a special Hungarian overflight of'.,3ritish Zone Germany, and by Dutch approval of this flight. The Departrn.ent expresses the hope that the elgian Government will postpone a final decision on the Polish flights until the US has been given an opportunity to explain its views concerning Satellite aviation policy. ei.A -.5 e /A- No, CHANGE in Class.. Q DECLA TS S A pats': 2-0444978� 3y: Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 TOP SELET EUROPE 3. SPAIN: US to approve E vort-Import credits for Spain-- The Depar men e las orme E�Iid1t it will no longer object in principle to applications for Export- Import Bank credits intended to rehabilitate the Spanish economy. The Department desires the Embassy, however, to emphasize to the Spanish Foreign Office that no assurance can be given that the Export-Import Bank will act favorably on such loan applica- tions and that the ank will not grant credits unless there is a reasonable prospect of repayment. The Department expresses its serious doubts that Spain will be able to make repayment. The Department instructs the Embassy to make clear to the Spanish authorities that a general demonstration of Spain's capacity and willingness to make more effective use of its re- sources is prerequisite to obtaining financial aid from the US. US sugests commercial fry with Spin--The Derart- ment has also advised US Embassy Madrid to suggest at its discretion to the Spanish Foreign Office that the Department is prepared to explore with the Spanish Government the possibi- lity of negotiating a comprehensive treaty of the type the US signed with Italy in 1948. The Department says it will prepare a draft of such a treaty, if the Spanish reaction is favorable. Franco reportedly holds reform decrees pending UN action-- The US 1Viriffry=fie ii�InClITOM has Irned from a usually re: liable source that Franco holds three "liberalizing" decrees which he will release whenever the UN permits the return of ambassadors to Madrid. The three "liberal" decrees reportedly deal with the suppression of the Falange, a reorganization of the army, and plans for a freer economy. Source also reports that plans, said to have the blessing of don Juan, are afoot to restore the monarchy gradually, with a four-year transitional govern- znent headed by Franco. a I - s Aftmy- c -2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 CO TOP � (CIA Comment: CIA believes that the prevalence of such reports as this in Madrid is symptomatic of the strong pressures within Spain which may eventually bring about substantial changes in the Government and its policies.) FAR EAST 4. SIAM: Concern over Ulpsysii_n Southeast Asia--US Embassy Bangkok has learned from a reliable source that the Siamese Ambassador to the US recently told the Siamese Cabinet and Army General Staff that the US Government is divided over what course of action to take in Southeast Asia and the Far East. The Ambassador reportedly predicted that the US would ultimately take the view that it is too late to save the Far East and Southeast Asia from being overrun by Communists. The US Embassy further reports a growing belief among Siamese that the US has pretty much written off Southeast Asia and Siam. The Department of State has replied that it is concerned over the destructive effect of the Siarnese Ambassador's views and has instructed the Embassy to refute such views by referring to the specific economic and military assistance proposals which are under consideration for Siam. -3 TOP ET Approved for Release: 2018/11/19 006749332 ena-s etn-s Approved for Release: 2018/11/19 006749332 U EUROPE 13 APR 1949 361 12...:3 CDJECTION TO 7.11E DIECLASS:::F.-1.0i,TICEI OF THIS DOCUPENT. 1. ITALY: Vatican view of Italian colonies uestion--The Acting U epresen ve at fie atican transmits the view of the Vatican Under Secretary of State that if a decision is made on the former Italian colonies which could be con- strued as unfavorable to Italy, the Italian Communists and the neo-fascist Italian Social Movement will make a special effort to demonstrate that the US and the UK have no real interest in Italy's rehabilitation. The Vatican Under Secre- tary believes that this move would seriously weaken the De Gasperi Government and might even cause it to fall, with serious consequences. The Vatican Under Secretary also believes that the chief Communist aim is to reenter the Gov- ernment and that the Communists can easily become a real danger if they are successful in undermining Italian confi- dence in De Gasperi. He suggests, for these reasons, that it would be desirable to postpone a final decision on the colonies for at least 8 or 9 months. (CIA Comment: CIA believes that a decision on the colonies which could be construed as unfavorable to Italy might be followed by a Cabinet reshuffle, including the resignation of the Foreign Minister. CIA does not believe that such a decision would cause major changes in the coali- tion or in its stability.) FAR EAST 2. KOREA: Rhee agrees to US troop withdrawal�Following US Representative Mucci� s outline of the US plan for con- tinued military assistance to Korea following the impending withdrawal of US troops, President Rhee has concluded that the contemplated measures will permit Korean security 1 _J � V.AET � L Approved for Release: 2018/11/19 006749332 S-'s 5-TS Approved for Release: 2018/11/19 006749332 TOP forces to maintain internal stability and defend the country. Rhee agreed that it was psychologically desirable that he publicly announce this conclusion shortly and in so doing Indicate that he was therefore suggesting a review of the timing of US troop withdrawal. Mucci� believes that Korean acceptance of the US withdrawal would be given impetus if he were enabled to make an early report to Rhee on the specific assistance to the Korean security forces the US expects to give. (CIA Comment: CIA believes that Rhee's continued acquiescence to the US troop withdrawals will depend on his receiving firm assurances that the US will provide the equip- ment to maintain and expand Korean security forces. CIA believes, however, that there will be an adverse psychological reaction when the fact of impending US withdrawal becomes generally known in Korea despite any announcement that Korean forces are now competent to defend the country.) -2 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 Ls' 12 APR 1949 ET 9 6 0 GENERAL 1. Italian attitude concerning disposition of colonies--US Ambassador Dunn in Rome, in expriTaig his view con- cerning a US suggestion that Ethiopia set up a special judicial system and special immigration privileges for Italians in Eritrea, declares that far from placating Italian public opinion regarding loss of the colony, such a proposal would only heighten resentment. After point- in.g out that all Italians regard Asmara and Massawa in Eritrea as Italian cities, Dunn adds that Italians cannot be expected to put faith in Ethiopia's ability to administer this area when Ethiopia is unable to administer its own territory. Meanwhile, Prime Minister De Gasperi has described to Ambassador Dunn the difficulty encountered by the Italian people in reconciling the reluctance of the US to support Italian trusteeships of the former colonies with the decision of the US to include Italy in the Atlantic Pact and the European recovery program. OciA� TOP Document No. 0(0 NO CHANGE in Class. LI El DECLASSIFIED Class. CHANCED TO: TS S . DDA Memo, 4 Apr 77 Auth: D:DA P.11:G. 77/1763 Date: 1978 By: 64A �,.. THE C.I.A. HAS NO OBJECTION TO THE DECLASSIFICATION OF THIS DOCUMENT. NO. Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 c-O'� U GENERAL ET 11 APR 1949 959 1. 3ale_siliteeeLemages believed Soviet encirclement of tujos US Ambassador Cannon in Belgrade, in pointing out the simi- larities in the purges of top Communist leaders in Albania, Greece, and most recently in Bulgaria, comments that the Kremlin apparently intends to establish, without regard for personal merit or popular following, a corps of loyal Moscow- trained satraps thrcughout the Balkans. Cannon believes that the Kremlin is determined to seal Tito off geographically and to turn Yugoslav propaganda for a united Macedonia against him by demonstrating the hostility of Yugoslavia's neighbors. Cannon considers that it should be made clear to the Kremlin that the US does not consider the Macedonian question to be merely an inter-orbit squabble over the disposition of remote territory by three Soviet Satellites. He recommends that the US impress upon the USSR that any overt or camouflaged aggression in Macedonia cannot succeed through the indiffer- ence of the world. (CIA Comment: CIA agrees thw;', the current purge of: Balkan Communist leaders is motivated partially by a desire to isolate Tito. in a brcader sense, though, the Soviet, action reflects the current effort by the USSR to consolidate its hold on the Satellites�) 00 T6Fib RET 44) Document No. 0 0 9 No CHANGE in Class.. 11 DECLASSIFIED Class. TO: TS S C 4 11:Dr 77 Auth Di�A 7'7/1733 Date: 2 0 MAR 1978_ By: 62:t tr-E.3 C.I.A. HAS NO OBJECTION TO THE DECLASSIFICATION OF, THIS DOCLIMEET.- taN -9 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 6-q, 50 -40 T gCRET ik:1> GENERAL 1. US muests Czechoslovak release of ES soldiers�The Department of State has instructed US Ambassador Jacobs in Prague to urge the Czechoslovak Foreign Minister in- formally but emphatically that he arrange for the immediate deportation of the two US soldiers who were recently con- victed of espionage by the Czechoslovak Government. Jacobs has been told to point out to the Foreign Minister that he must be aware that no grounds exist for an espionage charge and that the trial was a travesty of justice. Jacobs has been advised to emphasize particularly to the Foreign Minister that the US Government and public could never countenance such a miscarriage of justice involving American citizens and that a marked deterioration of US-Czechoslovak rela- tions is bound to ensue if this requost is denied. The Department of State has requested US Political Adviser Riddleberger in Franieurt to discuss with General Clay the possibility of taking steps other than closing off the Czechoslovak-US Zone Germany border if the Czecho- slovak Government refuses to release the two US soldiers. The Department has informed Riddleberger of its view that no steps should be taken at this time which might lead to a break in US-Czechoslovak diplomatic relations. 9 APR 1949 958 1.10 OBJECTION TO HE DECLASSIFICATION OF TiiIS DOCUMENT. NO. 61.1% Document No. NOC.F2T,C.T.,' rJlasse. ' --2--0--MAR 1978- s�').' .-t0_19) Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 50 CRET 4.2,14.z GENERAL 8 APR 1949 957 I. Stikker agrees to suggestions for Batavia discussions�Secre- tary Acheson has emphasized to Dutch Foreign Minister Stacker that the withdrawal of Dutch forces from the former Republican capital is the critical issue at the forthcoming Batavia meet- ings. Stikker indicated his agreement with the Secretary's view that Dutch troops must be withdrawn from the Jogjakarta area and that Republican military police must be permitted to supple- ment available civil police; he also acquiesced to the stipulation that full responsibility for the security of the Jogjakarta area be put in Republican hands. Stikker implied his personal agree- ment to the suggestion that Dutch representative Van Roijen be sent to Batavia with instructions to do whatever is necessary to settle the Indonesian problem and without being circum- scribed by detailed conditions. (CIA Comment: CIA believes that the Netherlands Cabinet will be most reluctant to agree to the restoration of Republican military control to Jogjakarta but may do so with reservations and conditions designed to prevent the functioning of more than a token force. If Van Roijen is allowed real initia- tive in the negotiations, however, a satisfactory agreement on Republican restoration is possible.) NEAR EAST-AFRICA 2. PALESTINE: Israeli withdrawal from Syria--The US delegation to the UN tranmits UN Mediator Bunche's confirmation of the withdrawal of Israeli troops from Syria. Bunche considers the issue now closed and has notified Secretary General Lie that Israeli-Syrian armistice talks will open on 8 April. TO 7E4.7 r -ZUlt THIS NO� CRET ' IJO 17' � 7, T- ; 5 ate 2 0 MAR� 1978 Approved for Release: 2018/11/19 006749332 1301 yy By Or),C; C/A - 5 . Approved for Release: 2018/11/19 006749332 7 APR 1949 TOP RET 956 .1. A. HAS NO OBJECTION 4t) IHE DECLASSIFICATION OF THIS DOCUMENT. GENERALvo. 1. Israeli Foreign Minister given US views on Palestine-- cretar sorme Israeli Foreign Minister Shared that President Truman holds the following views regarding the Palestine situation: (a) Israel must be pre- pared to offer territorial concessions in exchange for any increase over the 29 November territorial allocation it wishes to retain; (b) the concept of internationalization for Jerusalem still should be supported, although local Arab and Israeli government might be arranged under trustee- ships recognizing international interest in the Holy Places; and (3) Israel should attempt immediate repatriation of perhaps one-fourth of the eligible Arab refugees. The Secretary pointed out that Israeli action on the refugee question would not only constitute a real contribution to a political settlement but would also "make it possible" for the President to continue his "strong and warm support of Israel." After Sharett had reiterated the Israeli position that the refugee problem can be solved only in a final settle- ment, the Secretary suggested that Israel at least indicate Its willingness to accept a certain number of refugees and take further action as peace negotiations progress. US Ambassador McDonald in Tel Aviv has been instructed to communicate the results of this interview to Prime Minister Ben Girton and also to express the serious concern of the US over reports of an Israeli incursion into Syrian territory. McDonald is to state that confirmation of these reports would necessarily make a most unfavorable impression, particularly in view of the current considera- tion of Israel for membership in the UN. NEAR EAST-AFRICA 2. SYRIA: US British and French Ministers favor recoakits-- US Minister Keeley and his British and French colleagues in Damascus have reached the joint conclusion that the present i)ocliment No. ObL - 1 - e /A S NO CHANGE in Class. DECLASSETIED TO: TS S � 77 ECRET Date: 2-0 IiiVR 1978 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 60 TO regime in Syria should be granted full recognition as soon as the formation of the new government is officially announced to the diplomatic missions in Damascus. Keeley deprecates the unconstitutional means by which the new government has obtained power but points out that the government does exercise authority throughout Syria, has promised to respect Syria's international obligations, and has taken measures for re- establishment of a constitutional regime. FAR EAST 3. CHINA: Communist ''ultimatum" .111.1221,ung-len--US Am- bassador Stuart has been informed by Acting President Li Tsung-jen's principal adviser that on 5 April Li received, through a non-Communist emissary from Peiping, a message which Li interprets as an ultimatum from the Communists. Stuart was advised that the message requests a high-rank- ing Nationalist official (either Li or Premier Ho Ying-chin) to proceed at once to Peiping to serve as vice chairman of the Army Reorganization Committee, of which Communist leader Mao Tse-tung will be chairman. The message re- portedly indicates that formal conversations in the Army Reorganization Committee are to be held from 9-12 April and that Nationalist failure to send a representative or to reach agreement by the specified date will impel the Com- munist forces to cross the Yangtze River promptly. (CIA Comment: CIA believes that this message is a Communist device to apply increased pressure on Li's Government in the current negotiations and is not a genuine Communist ultimatum. Although the Communists are capable of carrying out their threat of crossing the Yangtze, they probably do not want to force a breakdown of negotiations at this time.) 2 ao RET Approved for Release: 2018/11/19 006749332 e/A- 5 Approved for Release: 2018/11/19 006749332 1;\ 50 TOP GENERAL it 6 APR 1949 955 I. Israeli thrust into Syriaorted--US representative Ethridge in Beirut transmits reports from UN observers that Israeli forces made an incursion into Syrian territory on 5 April and that a general mobilization has been ordered in Syria. (Israeli- Syrian armistice negotiations had been scheduled to open on 5 April.) Meanwhile, Acting Mediator Bunche has made strong representations to the Israeli Government, pointing out that the Israeli incursion is "a most flagrant and dangerous viola- tion" of the Security Council truce order and insisting that any Israeli forces beyond the Syrian frontier be withdrawn immediately. 2. Embass Moscow's views on the Sovietanti-ilia_ra -- US Embassy Moscow expresses the vie that the USSR. will continue to use indirect methods in its anti-Tito program even though the Kremlin is committed to Tito's liquidation and must feel tempted to use direct military force. The Embassy expects widespread guerrilla activities on the Greek pattern to break out this spring and to be centered on, but not confined to, the Yugoslav-Macedonian frontiers. According to the Embassy, the Kremlin's objective in these activities would be to drain Tito's strength to such an extent that the western powers would not consider it feasible to give Tito enough assistance to continue resisting. (CIA Comment: Although the USSR will probably use every subversive device likely to increase opportunities for the overthrow of the Tito regime, CIA doubts that these tactics will include large-scale guerrilla warfare or that Tito will permit a war of attrition to develop against him without taking vigorous countermeasures.) THL . _;o oBjEmg TO 11D eit THIS DOCUMEIIT. Na. - 1 - TOP RE T -fz� Document No. _150C NO CHANGE in Class. 0 DECLASST7IED Class. c: C tA � PLAIN 04-comp g 14-CoMF CIA -S 0 TS S ,711. 77 Auth Da - 24)41AR-19-78� BY: Q2___.__ Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 \ TOP RET FAR EAST 3. KOREA: Plans for US troop withdrawals--The Department of State has advised US representative Muccio in Seoul of its concern lest preparations now under way for evacuation of US occupation forces will result in premature publicity on withdrawal plans before either the Republic of Korea or the UN Commission on Korea has formally approved the move. The Department is anxious to avoid giving the impression that the US troop withdrawals from Korea are either contrary to the wishes of the Republic or in response to Korean pres- sure. Mucci� has been asked to estimate whether formal establishment of a Military Advisory Group for Korea at this time would minimize the adverse effects of the eventual with- drawal announcement. -2 c) �(;;;,,\ TO EetlET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 5 APR 1949 954 GENERAL 1. Western Union request for military aid--The Department of State has transmitted o U Ambassiaiii Douglas in London the terms of the request by the Western Union powers for US military aid and the US reply. The Western Union requests US material and financial assistance in a common defense program based on the principles of self-help, reciprocal aid, and common action in defense in accordance with the Atlantic Pact. In reply, the US has informed the Western Union that the President is prepared to recommend to Congress that the US provide military aid under the principles of the Atlantic Pact, with the understanding that the allocations of material and financial assistance shall be agreed upon between the Western Union powers and the US. The Department has also informed Douglas f " t discussions are now being held with Danish, Norwegian, and Italian representatives concerning the requests of those countries for US aid and the terms of the US reply. 02pki. TOP ,ET Is � TS C. T.A. DU ITO OBJECTION TO 11-12 Da-CLASSIFICATION OF TELE DOCUMENT. No CHANGZ in Class. DECLASSIFT. ED Olass. TO: TS S 77 Autb.: � 71;3 Date _2444b4R4-,. j. _LA 0 Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 .4$1, TO' for for a careful re-evaluation of US policy. According to Riddle - bergers the unsatisfactory political sitmation in the western zones arises principally from the disunity of the western powers concerning Germany and is evidenced by mounting confusion, doubt, and disillusionment, particularly in connec- tion with the slow formation of the west German government. Riddleberger points out that the strong desire for trade be- tween west and east Germany, combined with a desire for political unity, produces a growing west German tendency to favor rapprochement with Communist-run east Germany. Riddleberger observes that west German responsiveness to Soviet peace and unity propaganda is much greater than it would have been some months ago. (CIA Comment: CIA considers that the lack of agree- ment among the western occupying powers is the chief deter- rent to progress on a west German state and that such disunity encourages German expectations of western concessions on the issue of centralization. Concerning the tendency to favor rapprochement with east Germany, CIA believes that even though west German conservative commercial circles desire eastern markets, the desire of west Germans as a whole for political unification on Soviet terms is weak. CIA does not believe that west Germans are very receptive to Soviet propa- ganda for "peace and unity. ' ) -2 - RET Approved for Release: 2018/11/19 006749332 Approved for Release: 2018/11/19 006749332 60 50 2 APR 1949 TOP ET 952 GENERAL Possible resignation of Secretary General Lie�According to the US Representative on the rconorac Commission for Europe (ECE) in Geneva, UN Secretary General Lie recently told Gunnar Myrdal, ECE Executive Secretary, that he was contemplating offering his resignation at the forthcoming session of the General Assembly. According to the informant, Lie is depressed by what he regards as the decline in UN in- fluence and by progress toward the Atlantic Pact. The inform- ant believes that Lie's decision was not a firm one, but re- flected "a mood of the moment." (CIA Comment: CIA believes that although Lie is seriously concerned over the decline in UN prestige, he will probably not offer hi.5 resignation at this time,) o. :113 N3 03JECX/or i)if.:CLI.,,Ts.SITICATION OF Document Document No. 601 TO CHANGE in Class. DECLASSIFI..7.D Class, Auth: 0 TS S .77 ;)3 Date: By: nA 12-6114R-1978� 04 '1:?) TOP Approved for Release: 2018/11/19 006749332 . Approved for Release: 2018/11/19 006749332 50 GENERAL 1. Polish withdrawal of Spanish case from UN agenda --US Embassy Warsaw believes that the recent Polish attempt to withdraw the Spanish item from the General Assembly agenda is a Soviet-directed lactic. The Embassy considers that the Polish motives are to: (a) narrow the field of dis- cussion in the General Assembly, thereby permitting con- centration of propaganda attacks against the Atlantic Pact; and (b) preserve the present situation between Spain and the Atlantic Pact signatories. The Embassy further points out that if the western powers seize the initiative in the Spanish case, the USSR can claim that their motive is to pave the way for Spain's adherence to the Atlantic Pact and that such preparations reveal the aggressive and anti-UN character of the Pact. NEAR EAST-AFRICA 1 APR 1949 951 2. PALESTINE: UN efforts seen blocked by Israeli attitude-- US Representative Ethridge concludes, in a review of the work of the UN Palestine Conciliation Commission to date, that Israeli cooperation with the Commission is unlikely unless the UN and its member states are willing to back the Commission as an agency for facilitating a settlement of all outstanding issues. Ethridge considers that the Israelis have no respect for either the Commission or the Arab states and are apparently convinced that Israel can progress only by military means. Ethridge comments that in view of Israeli intransigence the Commission has had as much success with the Arabs as might be expected. .C. T TO 1E D: ' THIS DO. 60. TOP t, :1;1 C :� � 2 : r , � Q-0-1144R 1978 Approved for Release: 2018/11/19 006749332 a/A-5 / S Li Approved for Release: 2018/11/19 006749332 FAR EAST 3. BURMA: Shift to extreme leftist government likely--According to US Embassy Rangoon, the Burmese Government party (the Anti-Fascist Peoples' Freedom League) has publicly indicated Its willingness to yield power to a "leftist" group. The Embassy believes that the insurgent Peoples' Volunteer Organization (PVO) will now either enter a coalition with the Government party or replace the present Government. (CIA Comment: CIA believes that the formation of a government strongly influenced or dominated by the PVO is quite likely. Such a government would be far more leftist than the present regime and would probably take a strong anti-US line.) 2 TOP S 4 Approved for Release: 2018/11/19 006749332 e/i9 eonF.