BOOK III -- WEEKLY SUMMARY - 3 JULY 1947 (#55) THRU 30 DEC 1947 (#79)

Document Type: 
Document Number (FOIA) /ESDN (CREST): 
Release Decision: 
Original Classification: 
Document Page Count: 
Document Creation Date: 
January 4, 2017
Document Release Date: 
June 20, 2013
Sequence Number: 
Case Number: 
Publication Date: 
December 30, 1947
Content Type: 
PDF icon CIA-RDP78-01617A001900020001-8.pdf26.44 MB
Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~~ ~ ?~ ~ , ~ ~~~'~~ I~T~'S Pales yam, ~~t p(~~~'}~~~'9 :esq. ~~$'J lY k.1~ flit/ ~~A9`'~ ~a o e c a a? a c a .~ a e^ o a a o n a a. a o a o e o~ `~ d~ LB+~y~~~~~~ i e s? e? o o n??.? o? e e? . e?? e e. 'e a r a o e. c P~~~~e~~ ~~~ ~?a~.gaga~~ t~~~i~~ ~a I~a~~ ? a a a a e e ~ . ~. ~aa~~ari~a~.s~ ~.e~eC~~?~ ~~ ~e ~efe~se~i~es .l~~~?ee~2ea~ Np CHANGE in Class. DECLASSIFIED Class. CHANGED T0: T5-~ DDA Memo, 4 Apr 77 Auth: DDA RyG? 77 1763 _. ~f'he ~7ee~1~ ~a~~ra~a~ ~~11 ~?~ be p~a~b~sh~d Qa 2 j~~auaa~e ~`~e ~e~c i~s~e ?f a~ie ~J~T~eg~y Saa~a~a.rg ~ ~.p~ea~ ?n 9 ja~au~? Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 X LiL ~ ~`k ~ A7 ~ !S ~T .dam ~ ~ ~n,~8 E:~S'6~ ~~ t~ae~ ~~~~~~~$er~ ~~ ~~~t~ ~~~a~t~?~~~ t?a ~~~eat n ~~a~~~~~~t~~~~ t~ the , ~'eaa~~~ffik~~~~n ~.~ e~~~~~:t~~ ~~ t~~~ ~~~~~~.I Asti era~~~~o ~~ ~~~~ ~~ ~~~ ~~,~~ ~~~~~~t~~ ~~t~?~e~ ~? f~~? I~~.~~r~ ode ~;r~~~~ ~.~~~~~t~~at~. ,~~ ~t v~reFaz~d ~~~~~; .~~~. ?~~,~ ~~~~~a ~.~ ~p~~,t~~~ eat ~t~ ~.a~t~~t~~~~~ ~I ~~,~~ ~~~~~ ~~~ ~~~~~~~.~~~ ~~e~~a.~?~~ ~t ~a~ ~a ess~~ ~~~~~.~~~ fear t~a~ ~~o~~t~aaas ar~c~ ~~~ia. ~'a~y ~~a~~.~'iy a~~e;~~~at~d t~a~.t it. ~~~t~~e~ t~ ~~:~`~~ e~~ t~~ ~?xaa~ ~?g ~~e;ear~~aac~~ t~~t t~~ t~~ e;~~~~dr ~~~ ~~t~,~~3.~ta a e~~~t~~~ ~ E;~ea~~z~afer ~~~~~ ~~~ ~; ~~e?~ ~ ~.~~~~ tg~ ~ea~~~~~~~~~1 t~~ ~~~~.~ ~?~ ~ ~~aa~k ~~i ;~~~~~~: a~~~.~~, ~~~~ ~~ea~t~ t~~~ ~~~~t ~i~'a~ies~tt a~~-ms~aei~ tie ~a~~r~at~as~ ~~ ~~.~ ~~~~~~~ ~~~~-mtea t~~s~.~e t~~ ~~~~~~~~a ?~ tie ~~.t~e~~a~ ~~.~tae:A~~,t~.~~g ~?~ t~f~ ~~~e~~~ ~~~?~~~~ px ca~~.~. ~~~ ~~a~a- ~t~.~~ ~~gi~~.~tt?~~~ b~~~~~ ~t ~ b~ ~a~t f~ eff~ert. , ~~ ~~~ ~a~~ ~~ ~?a~aa~.i~t~~~t~,~~.t~~ ~t~~~~ ~~ ~~~te~ tea ~~?~~~ east iii ~t~~~r ~~ t~~ ~~~~ ~~t~.~~. `~'t~~ ~~?~~.~~n ~~~ ~~ ~~~=~~t a~,~an~~~et~~a~~.~?y ~~t~~~, ~~ ~e9~ tra t~~ ~~~?i~g ~.~~c"t3~~~y ~~ t~~ ~~ ~~..~~~~% ~?~~~~~~t e~.~ea~a~t~at~~ ~~~~.~~~ ~ ~~~1X~~ ~~t~ ~,B~~e~e~~~~?~~e~ ~~~N . `~fla~ ~'?~c~ ~~~'~~~m~ ~~`~jq ~i~&~~ti ~~e~~~t~~r ~~?~~ ~~~p~~ ~~eD~a ~ ~~~.a~~~t~dea~~t~c~ ~~`~, ~.g~~~~.~?~ t? ~~ ~a~an~ ~~e~r~~~t~ aY ~?~~~ ~. ~?~t~ f~~t ~t ~~.~ ~~.~~ ~ a~~~a.t~~~~Rp ~caa~~a~.~~b~~ tea t~~ ~~`~ ~~t~ the ~~~t fe?~~ ~~~~s ~ ~t~eaa~~~ t~a~ ~'~ a t~~~~i~.~t t~~~ ~ ~~~~,t,~i~7 n~ ax~tfea~~~ t~ ae~~ g~~ ~~~~x~~~ ~Ft~au& ~~~~~~.t~ aa~~, the ~~~~~~t~e~ ~e~ ~~~~tt 1~~.~~~~ ~~ ~ea~~,~ ~!~aea~.~ Q~rh~ ?~~.v~ ~~~~iv~d Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 The British Communists' recent all-out progaga~nda attack on the UK Government and Labor party follows the Cominform line. The capabilities of the British Communists, however, to sabotage the UK industrial recovery program are limited.. The Communists will prob- ably attempt to create and exploit labor discontent with a view to hampering production; however, Communist penetration of the trade unions is not sufficiently great to be more than a major nuisance prob- lem. The loyalty of British labor to the Labor Government is beyond question, and trade union and Government officials have for some time been actively educating the rank-and-file regarding the nature of Communism and its tactics. t~rogress in ousting Communists from key union positions is already evident. This trend will probably be accelerated as a result of the open Gommunist "declaration of war" on Labor T~artq leadership, particularly if Communist trade union officials overreach themselves in promoting the Cominform line. I+torway's future foreign-policy is erected to incline more definitely toward the Western Powers, although the Norwegian Gov- ernment will paoceed cautiously in order to avoid antagonizing Ieft- wing elements. The Norwegian Government appears; (1) to consider ? that the- prospects for economic recovery in trYestern Europe are good; and {2) since the breakup of the C~'M, to recognize that a rapproche- -ment betweercthc~East-and-~~est is unlikely at present. EASTERN EUROPE The actual formation of the long-predicted "free" Greek ~ov- e i moment is in itself of comparatively minor importance. The 'real significance of this development will lie in the manner in which it is exp}oiteci by the USSIi.'andfor the Satellites. ~ Soviet or Satellite recog- nition of the Markos regime would undoubtedly be followed by greatly increased aid to the Greek Communists and would therefore give them an immediate military advantage over the US-supported Greek Government; but recognition would also invite serious involvement with the US. 4f the Satellites, only Albania (which is not a member of the UN and ig not recognized by the US) would have little to lose if faced with US or Ule1 censure or action. In Greece, meanwhile, the guerrillas, supported by artillery, are making a strong effort to~clear and consolidate areas adjacent to the Albanian border. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET C~~~essi~~s c~~tai~a~d b ~~,~~Zacesl~~ra~i~, id*~ its ~~c~a~~t ~?~~~. yn~~~i~.Z ~.g~~~~~t ~it~~ ~:~~~ ~3Sfa~. ~adi~a~~ t~~.t ~Z?~ ~~?~~Zi~a sti~~& c~~sid~~~~ it ~~~:~ss~~?y t~ e~~~?~is~ s~~~ ~~s`~~aiaat ~a d~ad~ag ~~aitk~ tk~~ ~~~~Z:?~sZ~vaZ~ ~c~~~~~~~~~~t. ~~~~&aessZca~=i~, ~~~~aii~d ~~?~ ~ i~~~P. t? a.~~~~. d~Zi~~~i~s ~e~~~isi~g ~Qolo ~?~As~~~~ g~~ads ~~d ~O~a ?~cpi~c~.~ gads--~ fay Z~~~~ p~~~~~.t~,g~ csf ~a~itaY g~~ds the t~~ Sr~~i~L ~~i?~a dad ~a~F~i~~aaZZy d~!~a~d~d. ~~~ Z3SSR r~~,y ~av~ ~~difi~d its ~~siti?~ i~~ ~~d~~ Lc~ give the i~np~~ssi?a~ Lk~at ~.t has ~s~ ~t~s~ti~~ ?f d~st~a~yi~g t~a~ ~~~~ia~aZ?~~~ e~~~?~~y ~~~I~i~k~ xs g~~.~~d t~ ih~ ~~?~d~~Li~~e cif Z~.~~~ ~~.~titi~s of ~~~~s~~~ g?~is~. ~~d~~ the t~~ ms ~f ~:~~ ~~g~~~~~~t, ~~r~Zd p~?fc~s ~iiZ g~~r~~~ ~.ZZ it~~s of ~x- c~ar~g~ d t~~ ~~e~~?~sB?~atgs a~?~ g~?~~t~d ~ p~.~Li~~Za~Ey fs.~r~~?a?~Z~ ~~i~~ f?~ ?~~.~~ ~~~. ~~~~~~~ th~s~: ~~~~~ssi~~s, f~ZfiZk~~nt ~f g~~ ~g~~~~~t ~iZZ i~~~s~ a ~~~~~e st~~.i~ ~~ Ling ~~~~~usl?v~ e~~~~~y t OY~ IP~SIIY~I.,E ST.~I.EEIViA`f'E 1d~I T~?E ~i'EST A recent article by the Yeadfi~ ~o~iet economist, E. Varga ~ appears to reflect ~e Kreffiliai's recognition that an early atta~ment df o?o~ecti~yes i~a f~ir~ west is onYikely. 'Y'he article there- fore lays the b~,~se for a tactie;al retreat on th? prvpa~erada fronto Alf~aough lae regents the official thence of i~vitable capitalist collapse, V'axga wr~~tes that sucia collapse is by no ~,.eazas ima~iaaent and th~.t a protracted s~.lena~.te between capitalisma and Coaramtxaaism is probable. Varga', presea~t thesis, co~atrasts sharply wAth a previous ~o~iet Pine, which has for the past year been predictitag a severw atom . nomic crisis in ~e US same. tiffie iaa 1~4~. 1n fact, ~ Cllr. Varga noW ~:o~xcedes that the ~S se~cial orde8', in contrast to $hat of ~testera Europe, "fs stiYl Waite firma." This admission tomes on special sigrnfficaaace when mewed in the light of the doaninant ~o~et prop~.gazada line since the a~o?,mace- ? meat oa the ~Iarsh~.ll proposals. Iharisag She past summer and fall, C?ora~muni~ spol~esmae~a have consiste~itly emphas~ed the necessity of acceleratang a more naiYitant ~onamu~aist progrann. They appar- emtly taave co~idered prompt aeon fn axaeeting the challenge of tlae E'urapean ~~cover~v plan an urge~at necessity amd seegn to have sor~ght a~a early ecoaaoamfc aaadpolitical showdo~-n with the :crest., Var.'s cuaerent article, therefore, mtay &~e isaterpreted as recognition tl~~at an earlyr Victory is unlikely; he ffiay be preparing ttae way for a ~ctf - +cai retreat on the propaganda ffa?a~ait~ The Varga article also lays stress capon the "striving for andepeaadeaace" of the peoples of ChYna and the colonial areas of Asia. AYthonagh he is dubious as to the chances of an early "deaxao- eratic" victory in Europe, Varga comforts his readers with the obser~tion that "the ba?~ad Ynasse~ of the coloniaY wor?~ers anei lseasants are strivi~, with decisive fo~cce toavard the fl lia~,uida- tion of the colonial syste~-." Amo:~ag the j`slave-ovniiag economies" of .tin America and Africa, hc~ever, Varga does cot foresee any early "democratic" sucCeSSes. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET 7Che ~'~~~ ~ic~e ~~~ well reflect ~ ~ez~al~ats ~eal~~,tf~ t2~t the px,~ec~ ~ e~~Y~ ~~~:~~l~t trlct?rir~~ i~ ~?e~tes~ Et~t~e aye dlffil~.ishl~~ ~.rad tit ~. r~~~aff~,~g of ~ctlcs ~ ntece~saa~gr ~ tT~e e~ea~t g~re~e~t a~a.t the ~~cces~ ?f the ~ur~~ pe~.~ ~ecove~ ~~~~ f~.~. tc+ ~~ abet the c~~~~ed ~?estslt~a Any ch~.~ge ~a tlr~a o~ ~ctlcs ~vlll tie ~~e~e~,ated, h~th fc~r l~tel ~d eg?~.l ~?, n?t a~ ~~ alte~~.t~ere fenced ~.~?n the USSR, ~,~t ~,s ~e tga ac~~a~a.ce wig. ~, Drell f~~?~tul~ted ~al~a~a ~/h~.e ~e ~V"a~?~ article anal ~ ~te~tded ~ prepare ~.e ~r~a~t~ ~~-?rk fir ~?~a~le'C~a~affil~t eet~acFt,~ l~ ~ester~a Ett~c~e c~.ri~ag the c~~l~ ffi?~tha, it ~ n? may s~~ge~t~ ~~ f~ ~~ LFgSIt~~ we~~varti pres~wre, - '1 - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '`? -Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP. SECRET TIC PALES'TYNE S1`TUAq'IQ+Pi The initial Arab reaction to the X7Ae decision on Palestine has- followed the expected patkern of "spontaneous'L rioting. In Palestine, these oeatbrea~s consist of ar~cned clashes between Arabs and Jews; fn the Arab states, the~?e a~?e attacks oan Jewish aluarters axed dennonstrations dgrected larfnna,rily against the t1S. Such mtani- festations of popular feeling. r~aay be expected to continue as a pre- liariinary to large-scale organized Arab resistance to partition, 'the Arab lseat~e is scheduled to secon~reane on 12 December to complete plans for the defense of Palestine, bast concerted nnilitary action .will probably be delayed until after the British withdrawal, which is expected to beg~u early in 194. 'I`h: Arabs do x~ot inte~ad to establish a separate governr~nex,~ . in the Arai"-state suctions of Palestine delineated icy the T1N and are expected to bayco~t all effoarts of the 1JN comanZission charged with .the transfer of authority f'rbny the Dritish to the new Arab and Jewish states. ~ ~"Ieannwhite, evidence fs i~rcreasiang that the gTSSR intends to ffiaB~e capital of the chaos resulting ffrortn atteffipts to implement partitfo~.. ff troops from various countries are senat~to Palestine, the 1JSSlt will aando~abtedly seel? to include a contingent of Soviet troops specially traine?i for subversive political activifies. At pre- sent, the DSSR. is tang steps t? establish its influence fns the area by sending agents to Pale~t;~e slang with illegal immigraants. A sizeabAe aauxnber of Soviet agents are reported ly included among the bona fide innnnigr~aan$s on the PAN ~RESCR~T and PAPS Y't3I~, twa ships under lPanaxa~ani~s. regis~:rg scheduled to sail for Palestine from the Ruaxnania~e port o~ Const.~za between 10 and 15 December. Space on the vessels. h~.s also b~~~n all.otted to the '6eewish Nta.rxist ~outh,ae a Fturnanian org2~i~atic~r Oriented toward 1VFoscow. Its Palestine tine 1TSSR is reported to be worg~ mainly . through. the illegal Jee~ish Stern Gang, with subsidies and recruits dispatched frown the Union via Syria. The Connanaaaists are expected soon to shift their Near East headquarters frow I~ebanorn to Palestine, which will then becoane the center of Soviet operations in the area. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 " '- Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 DIVERGENT HEMISPhERE ~TIEWS ON ANTI-COMMUNIST STEPS Three major South American nations- -Argentina, Bra2i1, and Chile --have shown strong interest in common measures aga.ins# ~'o~nYnunism by the countries of the Western hemisphere. These co~~ntrtes are likely to introduce at the forthcoming Bogota Con - ferencea concrete proposal for joint action. Also, at least four other co~~tries- the Domianican Republic, EI Salvador, Nicaragua, and Paraguay-dean be expected to favor joint action and to oppose any attempt to keep the matter from being discussed at Bogotaa Up to the present only Colombia, Cuba, and possibly Mexico seem to side with the US position that anti-Communist measures area matter for individual action, The growing sen~imeat in favor of joint action might lead to: (1) sharp division in the Bogota Conference; and (2) the re- emergen+~e of the ABC (Argentina-Brazil-Chile) combination as a counterforce to US influence in the hemisphere. ? While it is not likely that a proposal f'or joint action would be accepted at Bogota m the face of t)S opp~ition, the ABC countries can be expected. to use it effec~:ively as a bargaining weapon, Moreover, they might attempt collective anti-Communist action, independently of exis9~- ing faster-American machinery, Argentina, Brazil, and Chile for the most part lie outside the US range of immediately effective military action in the hemisphere. Together, they constitute the only potentially strong opposition to the US in the Americaso They have acted in concert, independently of the U5y on several occasions in 4:he past: during the difficulties between the US and Mexico fol- laving World War I, for example, and, more recently, in one of the UNGA subcommittees with respect to UN admission criteria, Even though none of the ABC countries would at this .time extend their opposition to the point of backing the interests of anon-Hemisphere paver against those of the US, they can be expected, as they further depelop appropriate techniques of coo ration, to utilize them as a means of extracting concessions from the USo -9- T ..=~f.+=~'R~ET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 5U Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TET ~ QI3`~'E ~~lS 6p`1 ~~pppp~~?~ ~'(~T ~q ~y y~9 ~jT T ~ ~ F ~~~s 1 ~~ A7:L.JS k1.~V .471~~, B.S~ ~+ r o n o n o e? o o a o o r a a o o a n a e???. o? e?? 0 1S ? ~P 8 L'9a..C~~ilal.+~lA'.~pl o. o o e e e w e w w n? w s n a n? n. n n n e.? w n o. n ~a w a e n ,~ ? ~~"+ ~?~.?`~Dd+ y ~`~'' ~ ?~~-~~~+~~~ a n e o o a o o u e e a w a w a e u c o w . a Ce~pp~~a~a~~s~~~qy~~~~~7~~~~c~~7aiaay~~~?a~j,~~~ ~~~ ~~,~~~ . a a .. a a U a. e .. < a 4 A~G ~~A~~~aaM1~ ~Cq+~e~Qf~~0.i~eef~y~?,t~~ 4'a4+TV~~L~,o~j o~? s y ny~~ e aL `. o o a e e e e o a o o n o e s a WA ~?L?3~V1 3 7R~?s7~Q4 Y L~ 11 SL6d~G ?'Y 1L 4:?61'b .Y4 ~~76 F . a w_ . ., n a w e . w c w a ~~?a,~;;~ess ~t the ~JR3 ~?~ ~~~s ~?~,g~~fi~~ ~ ~e~~~~sa~.. n . !~eaders; and (3) to undernziue confidence in the European recovery program by implying that military actio~a map be i~nm.xnent. VdES'~ER~' ELOPE The resi~atior~ of Prez~iex ~taa~adier was forced by the growing hostility o~ fi~xs ~R~R ~oanposeei primarily of Radical Sociaflists) t? the Socialist eco~or:'ric program ?aad .the basic dis- agreen~ent betwee~a the 1s/ll~P (Popular Ii.epublicam I~~oveanent~ and TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET r~.~~~'~ S fY'YdX~.z H.e?,~~i ~'+~ '`LiF~ .5~~%dc.Md~~d. ~F.D .v,~W ~F3;.~e~+M.~. ~~ ~KA.~@. !s'it.~~ Y~~~NfO~JY~~`Y.C+~r ~~.S~MGF.~a ~6'P C.~s~. li;:!~f'~~.~~ ~~~ bad'' ~~?~~~:n~~~`~~"~ 1TitP.e`,2:'s~ `r~,~y~a`.tadz~ C~T~'~1 ~.~.~ ~Y?~?-n~$ai,R?~^a' ~~~.~s'~~~~~,~ ~~ c~,ra~,g~s?~~'? ~??s~~~~~~a'~~;c~ Ica ~~$~~~, ~ea~a~~.~2 ~~,a?~~~~-.; a~~~ 5:jj~~~,,~ ~~~~yzp~;~p~~a.~~~2~~, ~p~~gD~gg~Q~ey~~~~s.~~y~~~O~~q~:r~~t~e~} ~?~~~~~~. ~~.~_~;~.~.~~~~ ~~s~~~ ~~ ~~f~~..~ ~..~~i~ ~~. 6c`~.h 'kd ~~~s~k~ W. G?rp.Y C~'4sA~ ~L' 4?+4~~1~C3L 3:a~? . ~- ~~~?~~'.~k&.~r?.~k.u:~~~. i~~.~~g~u~.C~d~i kG~~~rk~:~a~..~~.1~ ~c~..~S"~~.~~~a~.G.~~l~,~ ~~~ Ka~~~~~.~~&~~~, .~..~C,'..~:?~~i.~~ Ps7P ~s~d"?lm~~E,~4u'4w~,,u. c~.~,vG.~.~~.~.+n5, *?~.X'~~~.?~i~~~.~'3~ ~Ft2+ ~~~ -'~~~t~~ ~CTF1~, ~IsS~`E~'.~~ ~R~R~~ _.~~....~.._.._....,.~...w__.....~.,_ ~~i'u~i:~~~'~~.~i~. ~,~ ~ ~'~'a d~A~~?~~~..5~i~~r~, ~a7 ~~C~vfv~~'fa~o.~.~~~ ~~~~~ ~~~~~.a~A~~~? F~~s"'~.~e~9 G.'i~ 6~'.~i ~+~~~ ~~3V ~~.~'S ~Sa~t~~Fi~d.`tN?i`r~ ~'qr~~~" A" 8 ll , ~.~.~ b~~i ~a.~~ ~.3 ~'i~~F.B~~Y~~'~s ~~~~re~?~~.~~~98~~0 s~y~ ~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET Recent Communist setbacks in Czechoslovakia, fa the failure of the Party to gain control ?f the Slovak Government, and in the replacement of Communist fellow-traveller Fierlinger with the more - independent Lausman as head of the Social Democratic Party, will probably force the Communists to abandon parliamentary procedures and adopt "tactics used by Communists in Poland, Rumania, and But= garia. At present, the Communists, through the secret policej~are redoubling their efforts to collect evidence fora "conspiracy trial in which an attempt will be made to implicate the US. De ndents of Soviet Deco anon troo s, up to the rank of colonel, apparently are egg returns to a USSR from the Soviet Zone of Germany prior to 1 December. The pr--unary reason for this decision is believed to be a desire to prevent fraternization and con- sequent "contamination," both of the dependents and the troops, and to check increasing desertions from the Soviet armed forces in Ger- many. During the first taro years of occupation, Soviet troops and their dependents were quartered in small, widely-scattered towns E As a result, the Soviet nationals were able to have close associations with the local German population. These contacts resulted in dis- satisfaction among the Soviet nationals and encouraged many deser- tions because of unwillingness to give up associations with German girls or female displaced persons. Soviet troops were then ordered to move into concentrated areas, such as barracks and deserted factories, and anti-fraternization regulations were more rigidly enforced. In order to reduce further the possibility of "contamina- tion," the tour of duty in G-ermany for Soviet troops was reportedly reduced from two years to one year. Recently, Soviet authorities have adopted new procedures regarding all persons going on leave or returning to the USSR. `These individuals now are carefully screened, relieved of their loon and thoroughly indoctrinated so that they will not divulge details as to standard of living and other conditions outside the USSR. _The USSR appears to be delaying grain shipments to Western Europe purposely until late spring or early summer f io 948 in order to attain the maximum political effect from its "generosity." The USSR obviously expects tfiat after Western Europe has passed through a difficult period early in 1948 and after the US grain surplus has probably been exhausted, the political benefit to the - iii. - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET USSR of any shipments vtill be greatly enhancesi, Further~.ore, on , the basis of a better estimate which can be n1` de then of Puropean crop conditions, the kremlin can: (1) safely default on its c~~zrrent promises without loss of prestige, if European cxops are goody ors (2j if Europe's grafn yield is poor, gain greater profits from So~riet exports than: vrould be the case now with simultaneous US deliveries. FAR E.A~' ~?he UN Good Offices committee in Indonesia is mesa ink, serious obstacles in its efforts to carry out the S~ cease fire order and to reopen political negotiations between the Dutch and Indonesians (see page S). the new Siamese regime under premier .Abhaiwon~ is attempting to obtain farefgn recognition in order to reinforce its position. As evidea~ce of the "civiiianr' character of.the new regime, Government supporters poiEat: (k) to the formal transfer of power to Abhaiwong by the military coup leader, ~arshai Phibul So~nggramn; and (2) to Abhaiwong` .s insistence that his government will be free. from any , influe~ace by Phibul and the military group and ~Yill honor its inter~aatioraal obligations, However, foreign governments are likely to defer gecognition because of the fact that the Abha,iwong Government owes its ex~ste~ace to the military group and ti~~erefore will- probably be susceptible to some military control. Lawlessness continues unchecked in the Arakan Division of Burma near the Indian border, although reinforced troops and police forces are attempting to restore order by guerrilla operations against mayor groups of brigands. 7Che Arakar~ area, geographically isolated fPOm the rest of Burma, has a disti~nctiy separate tradition which may develop into a serious separatist movenae~st if the groups resisting the Burmese Government combirne forces. Such separatisgn may encourage similar movements among aninority ethnic groups, such as the I~arens, and thus ignpair the authority of the newly inde- pendent Govea~anment of Hurma. 'I`he poss ~lit~of oeace tabs he~~een~ ~Y,ese,~ommunists and Nationalists has been discussed recently by high Nationalist - iv - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~ TOP SECRET icials. while there is yet n~ general in fair?~ ~a c?nspr?mise, ~?e fi~cli~aatic~n ?f sea~ae ~'~,ti?na~.i~t leaders ~~ ccn? side~? such a g~c~ssibifli$y is ia~dic~.ti~e ?f their cuarent desp~ndc~ncy ?ver the sari?us ~ailitary sit~aati~n end ?~rer W'heir &~elie? that the pmsitive pr~gran~ c? flIS aid ~? ~hia~a, fc~?ecast ia~ recent statea~eaats by Secret~.ry Marshall, ir~v?l~es a~at~unts which a~9e i~aade~uate fir ChinaAs needs. Z? the ~r~~ernmer~t ~eccmes ccn~inced teat there is ~a? h?g~e a? rettersi~~ pz~?esea~t t~eands ~f ~iflit~,~y aid eca~ n~mic deteai?rati?n, it will pr~~ak~ly seed a c~mpr?nnise with the ~hia~ese ~~mmists as a flast~res~rt ~,ltea~a~.five t? disia~tegraa ic~a. S? &?ng as,ry de~el?pmea~ts ccntinue in their ?a~r?r, hc~we~e:~, the ~e~mmu,~.ists will not accede t~s suc~a a settle~xae~at, ~~c~~l~t ~n teams ~yfiir~h w~tald give them ~, d?mi~aatia~g p~siti?~ ~ the ~~~e~~ meat. Chinese. C~r~am~ist ??rces hart? ~a.ia~ed a substa~ati~.fl strategic vict?~;py by ?ccupy~g pasiti~an.s whicfa threate~a ail ~rital . c?m~,unicati~n.s ~~ ce~atral ~hin~,. The lat~t~~? regi?~ has nd~ dis~ placed Ii~anchuaia as the ~xa~st in~p~art~t c? Cheese mil~.tary ?peraticns. ~'he Kati?~nalists can ~nfly disflcsdge the C?m~x~.unis~`s ?r~cm thei~? new bases by a successful, mad?r ~ffea~si~e,, SS~ch ~. success du~icus ~ the ?ace ?? cu~?aently reduced .~~.ti~saa~.l~ ist military p?t.ential. iSTEP,~' F~I~JIfS?~R.~ e Per?~ G?itern%YLtLeE3t's ~'eC~nt tende~,ci~~ tc~ attach the liberal. newspapers that are ~-pp?sing its ece~r~?mic mad s?cia,It p?licies a~ad t? adept a ~?re lenient p?licy t~~~.rd the C?rn~aists are ,probably c~a~ected the ~~a~ement as determhaati~a~ t~ amerdai'~lae ~agea~tine,Ccnstituti?na ~srcu c~.n ?aily amend ~th~s C~nstita,~ti?~ bar gai~,iyag tae supp~~?t of flange number's ?? mi~dlem ci.ass ~a~ers wh? are deeply i~luenced by the liberal newspap~rs< The argentine C~D%YtYYiuElists, ~ the ?ther ha-~d, are ?ew ~ ~.~~~her, cm~ami~ed. tee a cauti~s n?n~r~v~sluti~aary p~?cgrann, and tucflined . t~ f?cu5 their stteaati~ ilp~ irgte~ati?nal, gather th~~a d?nxestic, questi?ns. the ~er~n regia~ae has apparently decided, the~ce?~rre, that libe~?aI ~aewspaper ?pg?~iti?n threa~;er~s tihe Iangmterm pr~spes ?? the der?n regime while the Ce~mmunists d? nct. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET a.:.ah-..~~,~. S?~~~,~ ~?~~~.. ~~~ eat?s~A a~~~c~~,~~~r ~~ ~~~ ~?~~~~~~.~?~~ ~~~~~~~ ~?rAb~ ~h~~~;~?r~ ~~ ~k~a~~y ~~ ~.~a~~~~~~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET 1~ I~ T I C I.. E S TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 T?P SECRET Si~ee the ~.d~ort:~~a~e~~ o~ the ~oseo~o ~o~e~e~~e of ~?o~eign. ~~i~tiNte~?s o~ ?~ ~~~~ iL ~`~~~} s~~se~ue~at f~te~~~,tgo~~ eeti~~s hsve gig?e~ ~.o ev~.dr~~~e o~ a~~r ~~~e o~ ~osit~c~a ~~r tkae ~~SJ~ ?~ tae tss~es eo~ee~~?~it~g ~e~t~~~~ a~.d ~~st~i~, ~~~~~ ~~~ ire dis~~ssed ~t the fo~t~-ooi~.~ ~,o~d ~oe~e~ee ~~ the ~F`~~a neither a ~~ot~?~.eted ~2eeti~~s o? the ~~st~ri ~'~eat~ ~o~n~?issio~a ~ie.a gar the ~rese~t i~.x~gel~ ~~:~$~ess eons o~ the cie~aties st ~oaado~a to re~eh a.greeent eves o~ a~i~~r ~~~-t~rs ihdie~.$eci a si~~t~?est ac~~ ~us?rne~t o~ Soviet ~i~s si~d oh~eetf~r~s. ~~ea.~s~hile, a ~S, ~e , ~d Pr~.~oe re~.oiaed Moser ~.~ee~e~t o~ ~ermy ~.~d ,~~sgrfa. L he 7~1~- ~~ ~a~L.F..Iu~'i[[ ~?s~~~~~.s~7 0~ aES~r ~5~~'~k~~ c 66 a'R~t~~~'A4~1 ~~ aizi4ms sre ~r~.etie~g~ ~~.r~.i.~.ex: a rye h~ y ~eea~ d~? into closer ~.oeord si~ee the ~os~o~P ~o~ere~eee ~y g~~aei~~tio~ i~ the E~xo~~ recQVe~~ ~ro~?~.~ ~~d ~~ the e~i~ir~~.o~ o~ a C?~a.~t~- n#sts ~ro~~ tie ~'rea~ch ?e~s~~ae~t. ~veg~ t~~o~~h deeg~x?~ot?~~? c?~~- ce~ over se~~a~it~ makes ode ~` ~ositio~ o~ ~err~n~;~ de~?e~t fxo~ th~.t of the ~T~ aid the , ~~d aitho~~h the ~'re~ct~ are got ~L2~i~~~$e~~' ~'e~~FEt~~~ ~~ ~h~ ~~~~~m~eti ~~a~ j3%'o~~~,l~l ~f'~~ ~~.1~~~ the level o~ ~er~~~~ i~ad~str~, ~?~ ~,t~ce viii .do~~tedkq ~odi~y its position iYa the i~~~~rest o~ y$r Gster~ ~~~t~ the ~SSIt re~ai~ns is~~ fle~~le at the lac~~don ~oere~ce . ~.~ them is sucia ~ o~tco~ae, the ~re~ach c~~ ~e ~:eete?i to ref?~L tk~ei~~ ~e~r~e nth e ~`Smii:~ domes ci to a.ecept s. hi~~!~r level ?~ i~du~strg~ for ~~~ i~ re~ ~~~ for ade?i~ate security ~s~ch as am i~ter~aticsras.l control pro~~.~ ~o~? the P, amd ~ himel~d~ ~~ad ~o~~ a.~se~a?~aees o~ sm~~iciex~~ cos.l anal coke. ~'~daa~temtal So~et obgecti~res et the l~ondon m~ee~irn~;, o~ the .. ~ P~ mill ~ndo~btedl~+ ~e the s~;~e as moose the ~ISS~ pnrsmed at ~+e l~tosco~ ~?~ere~ace. A,t I~osco~, it ~eca~e ~vide~t t~x~,t the USSR seeks to co~nae~i~e rm~~y ~,s ~ esse~ati~l step f~ ~. glace. to e~te~ad ~+~zn~t~4st comtroi over a.ll Et~rolae. ~o ~~~?~ ~.t r his c~~ective, f.~ae ~ISSkB deax~~ded a. share im the controa ~~ ~iae R", a ~e~~trali~ecl ~ovea?nnaem~y of th~* '~dei~ar tyge ~hflch c~auld easily ire scm~led, a payme~'t o~ reg~rations krona caa~?x?emt pa?o~ cimctioaa frahic~ v-o~ld ?orcerl the ~S aid the ~ to Taear Bauch T?P SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET of the ?~ancial burden), and freedom for trade unions and "demo? cratiicD~ p~.rtiies to orga~ai~e ~ ail pones. when the TJSS&t, was u~aa~rte to obtain these demands, tine Kremlin directed its efforts toward k~ep~g ttae Sowie~ done in ~:rrnany economically seated ?ff from V~estern 1Europe. Such a policy was designed to reduce western Germany to a social and economic morass and was sa~pported by the conviction that ~e ~JS w?uld inevitably have a sewers depres? sios~ which would force the abandonment of European ~eommitax~ea~ts. Since the Moscow Co~ere~ace, however, mayor developments h~.?e occurred which wilt hinder the USSIB ~ the attaiaiffie~at of its ob~ectiwes. Chte? of these develop~.en~s has been the inception ~d drawh~g up of the Eteropea~a recovery program. ~3earlp as signi?ta . cant, however, ktas been the sti??eni~ag in attitode toward the ~t~SR of the wester pa.rticipa~ats ~ ttne CENT. ~ec~.use ?f these dewelopw ~xaents, the LFSSR now is confr?nted with the inam~ent praspect o? the aumi?icat?o~a of the three western pones . ~era~.any a~~d ~, con seaiv~ent improweax~er~t ~ their ecoaaogny. Moreover, the predicted ~JS depression has not a~aate~?iali~ed. In recognitio~~ o? this change ~ e situation since e F~os~ c?w ~Co~erence, the USSR may make certa offers at ~?naion w~asch wit ~,j~pear, on thy: surface, t? ~~ new and s~~eep~g co~c~ssi~~-~s. S~~ch concessions na~.gk~t take several fora: ~l~ some scat~g down of. et~.ims to Cer~a.~ reparatio~as9 ~~~ a pr?posed establishment of a ce~xtral economic administration wd~ich will appa~?ently pr?mote ~er~rraan econ?~aic unity beat ~rrould also ?~;rther Soviet political ob' ~ectives s ~3~ tP~e offered withdr~,wat ?? alt ocpation troops from Geranany, whicfl~ woad secure the ~?emo~~l o? ~S forces from Europe wP~ile merely re~uiri~ag Soviet aanits to fafll back t? nearby ~ota~ad. because ~ ustria has been placed at the bofito~a of the proposed Soviet agenda, pr?habl~vy~no Ao~s?rias~ co~acessfonswnil~b.~,e offered ~~~?.~ G.? ~~..~?i.~r..a~~i~. Q~~ tDA~. ~~.$'~a~ ~.~'~Qr?ee~9s~?a~n~? l:' o~' 0.&9w~.~~r ~~.~~~.~5, it is likely that ar~y concessis of?er~d by the USSR will be Heads more with an eye to their propag~ada ~ralaae than with may s~rior~s e~ectat?oa~ ?f accep?ance. 'X'he offers w?eatd be care~lAy drawn so a.s to prepare the way f?r plac~g the oncas of failure to reach agree? ynes~t o~n the ll~ and the lTI~'. -2~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~f ~~a~s~ ?a~~:~~ ~.r~ ~ad~ acrd are r~~~~~~d ley ~~e ~es~~r~ ~~~ve~?~, ~~ae ~TSSR ~F~~1 d?~bEle~~ ~t~~t~~e ~c~ a~~,~ ~h~ ~ares~n~ di~x~~a~a ?ff ~~r~a~yy ~h~re~y d~~.~ ~:? ~r~~~~~?~ ~~~?~ax~y ~ P?~~ib~.~i~y .?~ e~~~a~~~~~~~s maYa~far~~ ~?r ~Y~ ram ~a~r~r~a~~ ~g ~a~~~r~ ~~rm~y aid. Ea~~er~ Ear?p~. '~`~~ USSR w~~l t.~a~.~ be ~~g~~ed ~? ~?n~~a~~ a ga~l~~y t~~.i~h '~a~ ?r~~;~~~.~~y ~.~d d?~ ?~ ~h~ hyPa~~es~~ t~a~ a ~3S w~aa~.d ~~ c~Q~~ap~~d by a d~~r~~~i?~n ~~~?~?~ ~t ~c~~a~d ana~~ ~e~~er~ E~r~~~ a ~~1~~~ aid ~r?du~t~v~ ~~cs~aorn~c aria. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET . C~~Vt1!lItJNIST VIDI~ENCF IN FRANCE AND ITALY The outbreak of Communist-inspired strikes and violence in Fra;ice and Italy is a logical development of the Communist reversion from political action tc~ mili~ncy. This violence repre- sents the beginning of a militant effort to create a "revolutionary situation:" rather tha.r~ the beginning of an immediate revolution- ary coup. Communist policy in Germany in the last days of the Weimar Republic provides an his~:orical ~~cample which may illuminate present Goinmunist vurposes. Then the Cornnnunists chose the Democratic k~arty as their primary taxget and, like the Nazis, sought'to overthrow that party and to destroy normal constitu- tional processes, They apparently e~cpected that when a revoiutionary~ situation had thus been cre~.ted they could dispose of the Nazis in due course. The German Re~iublic was overthro~n, ~.s they intended, but the Communists did not profit, because the riTazfs beat them at their own game. ? .The current Communist activity ~n France and Italy purports to be. the spontaneous reaction of the democratic masses, against the "Fascist menace," with which the established governments are- either "unwilling or unable" to code, That ``menace," however, is neither immediate nor inevitable. De Gaulpe is as yet unready and unwilling to accept paver in ,Fr~.nce. In Italy, the elements which might constitute an authoritarian rightist grouping are even more tin- organized and unprepared, _ _ Although the Communists' direct attack is against real or supposed Fascists, their actualu though indirect, purpose is to di~,- credit constitutional goy-ernment by demonstrating its inability to maintain order and by destroying the order and co~idence essential to economic recovery The Communists knave well that, if they succeed, the immediate political benefit will. accrue to the authors- - tarian Right, rather than to themselves, and that, if the Right were to come to power, its first endeavor would be to suppress them., They incur this risk because og the overriding necessity to defeat the European recovery program at any cost and in tine elzpectation that the Right, if forced to power prematurely, will prove incapable -4- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET of overcoming them in the ra~volutionary situation thus created. Thep realize that they coul~.~ more readily arouse a democratic mass resistance to an extra-con: titutional, fascistic regime than they ccKxld arouse the masses against a constitutional and demo- cratic government. Thus, in pursuing their present course, the Communists themse'ves recognize that accession of the authori- tarian Right (as typified by De Gaulle) to power is less dangerous to them (or rather to Soviet interests) than would be success by the constitutional governments of France and, aided by the European recovery program, in bringing about a degree of eco- nomic recovery and consequent political stability. So far the Communist program has actually been of some benefit to the constitutional authorities in Italy and France. De GasperiAs response has been firm and vigorous. Ife has shown that the relationship of his Government to the United States is not com- parable to the servility of the Communists toward Moscow; that th,e result of Communist disorders may be to deprive the Italian people of the bread which he could otherwise be sure of obtaining from the US. The net effect has been to cause Ii:aiians to rally to the Government as the representaxive of law and order and of the best- hope for US aid. Similarly, in France, the Socialist-led Govern- ment has been enabled to dramatize itself as being as much oppo.:ed to Communism as is De Gaulle and as being the defender of constitu- tional republicanism against both Communism and Gaullism, k If the ~ constitutional regimes in France and Italy are able to meet the Communist challenge firmly and effect rely, if they can maintain a reasonable degree of order and, aided by the recovery program, bring ,about some economic improvement, they will sur - vive the threat from the Right as well as that from the Left. just as the Communists require a Fascist menace, so De Gaulle (for example) requires a Communist menace and a general sense that the constitutional regime is incapable of meeting it. Given a successful maintenance of order and some economic recovery, there would be no need for a Gaullist solution which, to most French- men, is a choice of desperation. But if~the constitutional governments in France and Italy do prove incapable of coping with the Communist -5- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET camnaigm of strikes and disorders, the French and Italians would turn to the authoritarian Right for a forceful solution, In France, the accession of lae Gaulle arould become inevitable. In Italy, ~+here the Right is soli disorganized and leaderless, the issue ~rouid be in considerable doubt, -6- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET T ~E PA LE STYE ~SS~3E A, `f' T i The p~~ to pa~titio~, Palestine into sepa~?ate Ayala and Jewish states probably wail snot receive the necessary two thirds n~a~o~?ity in th.e ~ general A ssenabl~r. Fifteen delegations indicat~~ that they ~r~ill oppose th.e par:?titio~. ialan; sever will ab~ stabs from vot~g. 1t is almost certain that of the ~~n~aining thirty?five ne,~tior~s, a aturnber suffic~.ent to defeat partitioae will eitn~r vote agaia~st it or abstain from votia~g. `The plan thus Gould be defeated by tvt~o additional opposition votes, by ore ~.ddi~ -tio~aY o~~osifi?~~, vote eyed three more ahsteotiozas, o~? by sip additional abstentions.] ~.f part.ition is defeated, the (a.A w$ll th~~~ vote on mother plan: t.? establish in Palestine a unit~.~y state with a large degree of autonomy for both the Araks and the Jews. because controversy ia~ the ~,A over Palestine has been centred aroa~d the pa~?tition issue, it is ir~possa}~le to predict the fate of~ the Bess-pu~alici~e?~, Arah-supported ~cherne for a uaaitary state. The d~~eat of p~,~?ti e tion sr~ight persuade a substantial number of states not directly involved in the dear East to vote foa? sores for~~a of t~nit~ry s~ateam laarticular~.y in view of probable .A~?ab co~acessions on such issue as in~mig~?ation~-gin the theory that any solution is better thaw Sao solution at a11. The votes of these states, togethe~? with those of the solid Arab bFoc, .might be sufficie~at to obtai~~ the necessary tw?ath~~'d s ~la~o~ity. if ne~~`he~? of the two plans is accepted and the I,~ ful?i~.~tis its pledge to withdraw f~?om Pa~.estine by August b~4~, cons3itio~as in Palestine vrill becona.e 'chaotic. ~itte~? and sustained fight~g betwee~s the tv~o groups wild ensue. The STS ~aay then be compeRled, because of aroaased Zionist syrrapathy on the ia~.rt of the ~7S publ~.c, to take an actave part in the struggle. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~T~RE.~.SED ~~V TR~dDE ~~'~ ~ ~ DES ~?~~sf~~~ ~~ ~~ ~~~~a~~~ f~~l~~~ cif ~~.~ fire?g~~~,~ ~3~.~a, . ~f ~:~~~ ~la~. ~3s rel~.~t~~ ~~~.~~ :~~d w~~~ ~~~~t~c~~~ aid ~~ ~~~~~~~ ~? ~f ~.~ f~~e~~~~~ ~~~.~ way ~~~ ~~~~~t ~,f ~~~~~~a~I.~.tac~a~ ~?~.~c~~i~~ ~~~~t. f~y~ffi~ ~~ ~TS~R, ~.s w~ ~,~ ~a~~~ ~~~~~~t~~ ~~~~t~~~l~~~~ f~~~ ~.~y ~.~?~ ~~~~g~~~~~ ~~~ ~~~~~~~R~ pfd; ~~ ~~,~~~~ ~~~.ia~ ~~~~~.~~~ f~~~~ as ~~~ ~~~~~~.~~ ~~~ ~~~~~~~~~a~~a~~~~~, ~ ~?~~r~~~~t ~.~ ~.tT ~~~~ pe~.~~~~t~ t? ~~k~ t~~~x~ ~~~d~~t~ ~,~ t~~ ~~~~t.~a~k~:t aid ~~d~~~ ~S~??~~~~.~ ~~~~s~~t~?r~ t~ ~ C~c~~~~?n~;~at'~ ~~?~?~~~ p~a~~~~~~, ~~~~ s~~~~~e~~a~d ~aafa~.~.~~?~ k~~~~ ~~~ ~ ~~3~~g ~~~ ~~~ ~u~ff~~~.e~t c~~~~m~~ ~~a~d~ ~?~ ~t~ ~~~d~a P~~~u~~ t~~ t.TSSR ~ti~~ faRed t? ~~~~~~ ~.~ ~du~tx?~.~ ~~d. i~ ~.e~~~.~ ~ t~~a~?~?~~~ e~~d~r~nt era?tfl~.d ~~ ~~a~t~~~.~, r~.~~ ?G~.~~ ~?~~ti~~,x, ~?n~~d~~?at~c~~? ~~~.~ an?dt~d ~~1~~~ des d~~~t~, ~~,4 ~~?~x?, t~,~~.~. ~~~~ '~JSS~. i~ nit ~.~?~~~~. ~? t~?ad~ ~~ta~r~~n ~, Sa~~~~ ~~d a~ `~~~t, ~~~~d~ ~.t s~z~h ~~d~ ~~~~,~~ t~ ~~~~e~~~ ttfl~ ~~d~~~~ ~,~d w~.~ p~t~~tt~t ?f t~~t S~,t~t~ifr~m TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 T ~e~~~~~i9~ ~~~.~~~~~~~ ?z~d~~~ aid ~~~ ~? ~~~~.~~ "a~ ~,~~~~~~~:~~~~ ~~~m. d~.~~.?~~ ~:~ ~~~~~ee~ ~c~li~a.~~.~. ~e~~~a~..~~~~~a~ ~~~:fe~~ the Id~~~~~?1~.~~d~ ~~d ~h~ d?~~~~~~,~ Repa~~~~~a ~~.A~~d ~~ ~ ~.~ced ~~h ~ ~~~~~~~~ acs ~~~~~~ gac~l~.r~ ~.~~~~~~ ~~ ,~~m~~~a~~~~.~ ~?x~~~sm ~~~ ~ h~.~ ~~~ed d~.~~a ~. I3t~~ch ~~~ue~~ ~~ s~~d ?~~se~~~?~ ~? ~~~~:~ ~~~ ~~~x~~a~9 a~.~:h~ ~?s~nds fh~~ ~h~ ~ ~e~~c~ ~~ ~h~ ~a~~ ~~ ~a~ e~~~~~~~d v~~s~ esf ~ ~a~k~e~ ~? ~h~ dg~na~~~ ~~~, ~~d~l~ di~e~ ~~~~~ Iaa ~~~~~~ ~.~~~ ~a STS ~~~~e~~~~.~~~e ~~~~~~ a~n~.&~~.~d ~a~~~~n~~.~ ~~d~~a~~d~~~~ ~~.~~ ~a~.~ ~~ ~~.~~ ~~d~?~~~d~~~~ ~~~.dea~.~~.~ ~~~~~:~ ~ ~T~~~~d ~~.~ ~~ ~~d~~~e~i~ ~~~~:~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 . TCo~~~ET ~ . ~~ ~ C ONTO I~bT~S Wages . IL FL F:~ N~rJ l l~ ~~ Lf~J ~ e . ? ? s e ? ? r ? n o . ? ? e ? e s ? ? ? o n ~ ? . ? o ? ? f ? f Y A3~,TICS,E~?.e..sw????ee.ea???????so?o.??ee?o.? ~.-~ Non-~'oanm~nfst i~~a?r A~tf~3i~ fn ~'~.nee o . e ? ? .. ~ ...... A Thee Sov~te~ Anniee~saay Celebra4.f?~ . ? ...... ~ ........ 2 The ~fg~fffcance of ate Sfa~ese Coco d'Efa4. ? . ? .... ~... ~ 3 The T3efe~ase~-,~f~es Yssa~e i~ ?~anaxa~a~fan ~olfffcs a ......~ . ~ 6 Dooument No. ~ Z~ lass. C:A.;jG~ TL ~ T5 i1t?A ?,x?o, 4 Apr 77 Auth : P a_`'?"=C.r._.77/176'~ .~ Y 1 T Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP ;SECRET 'TRE~T3S. 1~ BRIEF ~NESTETt~T Et3Rf3FF ~'~~~~~-Cornnaear~~st elements in the CGS are organizing in an effort to redQace or neutralize the influea~ce of ~e CGT Co~n- mu~nist leaders. Growirtig dissatisfaction among French workers with Comm~xist direction of the CGT may eventualAy "create an open break withi~a the CGT, 1~ith conserir~ent lessez~;Eng of Comm~.nist control over?~ French labor (see page Y~. .~,it~u h JJe asoeri is now under pressure i~ronn. both the Right and the Left to broaden the base of his Government, the Fxemier wilt probably retain his present Cabinet which is based kaxgely on Christian Bexx~ocratic-~.ightist pax liamentary coi.laboration. If he is forged to extend the representation of his Cabinet, De Gaspers wilfl undoubtedly prefer the inclusion of the non-Communist Left to that of the varioa~s Rightist. gr?ups. ' Rowever, the preeent anti-Com- munist tread id has so increased the i~.portance of the Rightists ? that a percep~Cibi.e economic recovery in Italy and the formation of a - strong Rightist bloc, possibly under the leadership of Corbino, might force Be Gasperi's hand. 1?rime Mfr~ister ~.ttYee's rexrsovak of Rugh Balton frown the position of Lid Chanceli.or of the E~;che~uer will resolve a c~anflict between Sir Stafford Cripps and Balton over methods of dealing with the ~''s economic probic~xris. ,Agthot~gh the 'appoint cent of Cripps, already l~hiniste~? of Econoaa~ic .~ffaix~s, to 13alton's piece till ia~sure unified economic leadership, the circumstances surrounding BaD.ton's rezuoval will Yost tre Co~~rernmen~ and the Labor party heavily in prestige axed cAnfidence. This of?air, coming shortly after the re? cent expa~lsion of one Labor 1~!!P for dishonorable conduct and the cefiisure of another P+~~, wiPi be expAoited by the Conservatives. Labor's large parliamentiary majority anti the reluci:anee of the Conservatives to. seek office just before ~an anticipated hard winter will probably permit the Govex~r~.ment to weather these blows, but its prospects of remaining in power tantil 1950 the constitutional limits are reduced. ' -i- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET EASTERN EUROpE The October Revolution celebration in Moscow was marked by efforts to justify hardship, enforce discipline, and prepare the people for Stalin's death (see page B). A~ on the US and UK Burin the trial of Maniu, Rumanian National Peasant leader, indicate that the furtherance o Commu- nisi control and the destruction of the political opposition were only secondary Communist aims in staging'the trial at this time. The Communists were prigicipa.lly co;~cerned with eliminating US-UK in- fluence in Rumania by demonstrating to Rumanians the consequences of association with representatives of the Western Powers. The Communists in Poland,who have consolidated their political posi~~i.on following Mikolajczyk's flight by taking control of the ~ Peasant Parties, can only maintain this position by intensifying police controls. Attempts to weaken the Roman Catholic Church and to industrialize the economy (next steps on the Communist program) will meet with Strang opposition from the Polish people who will not be easily persuaded to give 'up the Church voluntarily or to make further sacrifices in their standard of living in order to promote the Communist-sponsored industrialization program. NEAR EAST-AFRICA The question of enforcing the partitioe of Palestine remains the chief difficulty facing the UN sub-committee on Palestine. The UK has stated that it will not use British troops to impose any settlement which is unacceptable to the jews~ or Arabs and that (previous to the British withdrawal by 1 Aughst 1948) the troops wili be responsible for the maintenance of order only in those areas which they occupy. Thus, unless the General Assembly is prepared to or- ganize an international police force to replace UK troops (which the GA appears reluctant to do), any partition plan recommended by the UN has little change of successful implementation. -ii- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET The size of Turke ~s armed farces will soon be decreased by the release of about 150,000 men and may be kept a r uce s rength indefinitely. Present indications are that the Turkish Government may decide that Turkey is not in danger of imminent attack. Such a reduction would not only lessen the burden of heavy national de- fense appropriations but would also insub a--by the release of man- power--an increase in the rational income f:flarouga~ economic pra- duction. Ratification of the Trans-nrabian Pi aline Convention by the Syrian Chamber has again been in a finite y po pone is re- sentment against the US is strong because of US support for the partition of Palestine and because of Socony iTacuum's unheralded cut in petroleum allocations to Syria. The Syrians consider that the latter step is connected with the US stand on Palestine. Iranian opposition to ratification of US arms credit appears to be growing. This opposition stems from such consi erations as: (1) fear of strong Soviet reaction:; (2) the need to conserve foreign exchE.nge for economic and social development; and (3) a desire to obtain more favorable terms from the US, including repayment in Iranian currency instead of dollars. Although many Yranian officials would welcome an outright gift from the Uw of the $ 25 million of supplies, .as sought by Prime IVfinister 4avam, some Iranians are reluctant to place Iran in exactly the same category as Greece and Turkey lest such action increase Soviet hostility. FAR EAST Tk~e recent coup in Siam has brought to power a rayalist- military regime which? will negate Siam's progress toward demo- cratic government and improved international relations (see page 3}, Australia's increasingly pro-Indonesian attitude in the Dutch- Indonesian dispute does not seem to result primarily from pressure by the Australian Communist warty but from a growing awareness that Australia's security in the ]Pacific depends on a practical course of action which will not alienate the Indonesians. -iii- - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET WESTERN ~EZVIISPHERE Panama will probably reject the minimum US requirements regarding adefense-sites agreement as a-.result of Ambassador . Vallarino's decipion to run for president with the support of Harmodio Arias (see page 6). A rapprochement between Argentina and the Soviet Union is highly improbable despite recent. spe ation to the contrary. Instead, the available evidence suggests that: (1) the Peron regime is preparing for drastic anti-Communist action following the March 1948 elections; and (2) even Argentine officials expect -this action. to lead to the rupture of relations both with the Soviet Union and the Satellite States. Peron has emphasised his intention to gnaintain relations with the Soviet Union for the present. ~n the other hand, he is known to regard the Coxniyafoi?Yn as a declaration. of war against the Western world and to have predicted that it will express it- self within Argentina in the form of deliberate sabotage of his own Five-Rear. Plan. -iv- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~ R ~' IC; L E S TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET NC~1~-CUIUiI'JIUN&ST 1,A13~R ACTIVYT~ IN FRANCE Non-Communist elements in the French Confederation of .Labor ~CGT~ are at present grouping their forces in an effort to reduce or to neutralize the influence of the CGT's Communist leaderso This movement against Communist dominance by minor- ify elements within the CGT as significant largely because it has come from the rank and file of French laboro PTor~-Coxnma~nist groups within the CGT haee in the past been unorganized and anlif by shadings of political differenceso In the past year, however, these groups have begun to fake definite shape and haws begun to compose (heir political differences. Their recent tendency fo loin together i.n anti-Communist actiwitp has clearly worried the Communist, Although fine non-Communist groups are not sufficiently strong at present to break away from the CGT, the increased shaxp- a~ess of their opposition and the growing dissatisfaction among French workers seven Coxnn~a~nist workers~with Communist direction of the CGT may lead eventually to an open break within the CGTo If such a break should occur, Communist influence in die French labor r~aovernent v!~ould be considerably reduced and Communist Party caoacity to control labor activity for its own ends would be sharr~ly ca~rbed, -i- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~?assis~eaa~ with tche ~~~me~~ "?~ie~ p~opaecla lie, ~??s`.et e~a~:cs~s a~ ~~ze ~eleb~a~i~~ i~ ?~~?~v ?n 7 ~~~we~a~ae~ ~f the ihi~~ieifi a~~E~~l~Y'~a~y ~~ the a`~~'~a~ ~~~~~e~? Rey?l~a~i~~' p8ayed aap iaate8?fl~~.- ~fc~al ~eYZSi?~ ~ ?a~der ~w ~usii~y i~e~eased hardship anal t? enf?a?~e ide?fl~gic~.i di~~ipl~e a~ h~s~xe. The harassed S?~ie$ people were aim gi~~e~ any ~~~edia~e p~ospc~~~ ?~ x~aa.~e~ial i~pt; o~ea~e~~ isa their dai~~y 1~..~e. The li~~i~~ ?~ bread rati~~~promised hg S~a,l~.aa yearly. ~w?ye~p.~s ~.g?--w~.~ ~~~ ~.e~a~i?~a~e~.. ~`he ~~iy ~i~i~iea~~ ne~~e ?~~y~ ~~Il3B8?3'W w~.~ e`~.. ~e'D~~w~2~~ ~L?v, ~t~:~~5rv ~~~.~'~~.~k~.~ $h3$ RBU~ t6~e~~~'~ C~~ ~.dge ~.tomi~ b?~ab h~.s 1o~v ceased ~? e~ist.g~ The ape~,~er~ de~ate?i co~sider~.~ale ~.tte~tx~ ~? r~ecalR~g the ~~~~yps ;l?~rao~.s ia~ the pass:. Tk~e ,Armed ~o~?ces wire aar~ed ~~ rem~.iaa_ "i~ caaasta~t prepaa?edaa~:s~ ~,gaiaast ~e i~sti~;at?rs og ~. ~et~ w~.a?' ?; the ~'ar'~y dedicated i~sel~ to c~aaagi~~e the sta?~a~~le against t3ae 66capita.lisf~ic ~~~~%'~~s ~rhic,~i ha'~e ~? desire ~~~ coopr~a?atie~at. ' ~'orelgn hliaaister Y~lolot?~es speech coaa~,ined se~e~r~al hints ~~ coaa~ tern t~~vea? native ire?looicag lo~talty. ae~~ all o~ oar pe?~le,fID h~ said, "hare rid thea~sel?3es ?~ g~ieir servility and ?bse~uic~aasaness ~? the t~Iest seed ~? c~,pit~.liss~ c~a~.~re.... ~ith~~nt ~ef~t3~a~ rid ?f these dis ,~ ~.cef~al saaa~~tivals, one cannot be ~, reel ~?viefr citiseaa. ~' . .~ stri~iaag feature ?~~ ~lae entire celebratioaa was the relative lacP~ ?? p~'oa~iaaesce accorded Sta.flin. ~~ only was he absent has was the case iaa 1~46~ ~ his n~,ane received ?anly scaaxt attenti?~ta ia~ the nu.~er?~ p?ster~ bearing 4:he ?fficiaflly~prescribed sl?~aaas ?~' the day. ~T~'iaile he was fre~aaeaa~y ~u~ted by seve~?al o~ the spea?~ers, there we~?,e practieall~ no lauciat~zry txibutes ~ e s?~~ usually paid hia~a. ~lths~a~ls Stales s health away in fad have foa?ced hi~a tQ tie a less active ~??le ~n S??iet a~fairs9 it is e~aaally p?ssible that the Krenal~a is ma~iaa~ a deiiberate eff?~#: tc~ accustom the people ~? his absr~aace ?~ sash ?ccasions. ~y gradually deemphasi~~~ Stial's pea?sonafl appeal and stressing, his symbolic value, the T~~?ea~iYa away be g~r~p~,a?~ag its subjects ~?~ Staliai9s death. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~ 5~+~~1k'ICAI~'CE ~~? '~`F~ SI:F!SE CC3U1} D'E'TAT The ousting of the governs~aent of premier Thanarong on ~ ~'ovenaber by a YraiZit~.ry co^~p fleas resuited i,a~ tae rem to power . of the formes pro-~apasaese dictator of Siang, lildarshal Phib~nl Song- gra~ca, grad of the parliamentary opposition to the go?ernffie~at of Th~.a~arong and ~riaii. lay its forceful method of establishment and bq its ~nhancem.e~rt of royafl powe~?, the new regime represents a reversal of the p~?e~ious trend toward democratic, elected gove~- rner~t. Tlae elimination of official corruption and the alle~-iatioc~ of the high cost of livigag were given by the leaders of the coup as the ~ustificati~n for their action. wile these problems were doubtless important in igaspflrixag this step, additional anotives were probably ~?espoa~sible fo~? the coup. The arnsy, always flee ~raost nationalistic gro?~p i~a Siamese politics, has ?en at~.cked ~'ha~rong's policlr as respo~asitale fcra~e r(1) the rretrocession to ~'ramce of border terri- tories takeza by the array in 140-49.; ~2) ~~e rise of Commwaisan in Siam; cad ) the growth of i~afflueace in Siamaese affairs of China ~d of flee large Ch~aese a~inoa?ity in Siam, Ce~ctaba eflea~aents i~a the army, ~:ogether wi~a some nae~bers of the Siamese political oppo- sitiosa, appa~?ently beca~rae co~aeinced fleet lsarliaaxaentary methods were inade~~aate to oust Thanaroaag. 'the gx?rrup responsible foz~ tiles coup is believed to be rather s~aall.and composed of relatively-uaa~own ~ailitary and civilian political ?~gures. l~ac~ing outstanding l~:aders tr~ithin its merraber- ship, the group sppareaatly fi~?st secured~the leadership of general ~dul, ConarYaander i~a Chief of flee Sia~araese Array, whose opposition to official cor~ption was well &~a?wn. ~Nhen Adul attempted go halt flee coup in the first few hours of its development, the group them turned to tJlarslaa,l ~'hibul who lead sought a chance to retua~a to politics since early i~a 194?. ~Tnder phibul's leadership, the origi- nal group hs,s nar~rc ged with a group of pror,~inent royalists, probably in an effort to present aria appeaa~ance of legiti~raacy through seem- ing to suppor$ the ~?oyal dynasty. The Sian~aese .Parliament and all political parties have been dissolved by the coup naovenaent and a new constitutioaa has been -3- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET promulgated. Uowever, the d~ffieulties encountered in the formation -_ of a provisional cabinet by tae leader of the civilian political group, lKhuang Abhaiwong, indicate that there is considerable apprehension within the coup group regarding its stability and future tenure of power. In vied of l~hibul's harsh icreatment of the princes during his rule from 193$ to Y9~~', theR.oy~.lists in the group are unlikely to accept his leadership for long. Civilian elements in the group recall I'hibaxl's dictatorial regime and fear, consecluea~tly3 that Phibul will not permit the Abhaiwong cabinet to exercise real power but will use it only as a. democratic front. If ~hiixul does not give 1~he civil- ia~- group real power, many civilian leaders nzay resign, .thus caus- ing the fall of the . Abhaiwong cabinet and permitting its replacement by a cabinet headed by Phibul. In addi#ion to the disruptive forces present within the coup group, the stability of the neca regime is made doubtful by the pos- sibility of a cauflter coup led by ~icler Statesman Pridi and supported by fhe 'gee Thai znoverxaent. Stich a coup might be also enforced by elements in the Siazn.ese Na~ay, which bas always aligned itself with eivYliar~ groups agaix;st the array. The strength of a counter-coup m?vement might be augmented, if Phibul tames direct control, by disaffected civilians of the present cd~ap group. The policies of the nee regiane under a cabinet headed by Abhaiwong are e~pQCted to be relatively moderate in order to avofd ar~tagonizirtg the 17S ana the Ugh whose financial and economic aid will be increasingly valuable to a govern~-ent pledged to alleviate the cost of living. Certain measures restricting Chinese economic and social activities may be revivers or inaugurated in a reflection of the anti-Chinese bias of the Siamese A. rmy. Such measures wall incur the resentment of the Chinese National Gavernmemmt and the resistance of powerful Chinese entrepreneurs axed middlemen vital to Siam's rice economy. If Phibul assumes direct authority, after foreign apprehensions regarding the new regime have been allayed, anti-foreign and ultra-nationalist policies may be instituted which will adversely affect 1T~ and UI~ economic interests in Siam. Phibul's vigorous suppression of Communisrra during his wartime administra- tion xna~ foreshadow new anti-Communist measures vrhich will im- pair Sian1's relations with the USSR and may even affect Siam's TOP SECRET - Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET position in ttae 11I+3f ~ tae So~iefc ~3~~:',~ta opposed Siam's ?dmissian to tike UAT aa~cl r~faas~:ei a:o di '.onaatic ~ela~ions tuatil ttae Siamese Goverrarnen`~ repealed ~e anti-Gona~i~~f legislation of 1~3~3~ The forceful esta'~~ishmerat of a royal~.~t-~a~ailitary regime in Siam v~ill lead to dXi 2~':e, elect per~.od of in ~~ ~~.ility whii:ch may negate the pro- grass Siam under cieiliaaa ac~.ministration toward rehair~ilitation, democrstic goversarraerat, nand irnprca~ed h~termatiasa..s,l relations. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TAT THE DEFENSE-SITES ISSUE IN PANAMANIAN PQLITTCS Panamanian political developr~ients have introduced new complications into the protracted US negotiations fflr a defense - sites agreement. As a result, Panama is naw expected to reject the most recent US proposal for aten-year US lease on the Rio Hato base with aten-year renewal option. The terms regarding Rio Hato have become the principal obstacle to an agreement in large part because of a domestic poli- tical situation created nrimariiy by ex-President Harmodio Ariasa Arias, ha?s recently put himself forward as the spokesman for those who oppose Some L'S "demands" and has described the minimum US requirements wfth respect to the base as "unreasonable and incompatib~e with the letter and spirit of Article X of the Treaty of 1936." He insists that Panama grant only afive-year leased Harmodio Arias is also. knoum to have informed the Panamanian ambassador in Washington (j.j. Vallarino) that: (1) Arnuifo Arias, Harmodia's openly anti-US brother, will soon announce his candidacy fo~~ the presidency; and (2) he himself, together with a substantial majority of the v,iberal Reform faction within the present Jimenez administration, is prepared to support Vallarino for the press- dency. Vallarino has noun consented to become a candidate, and there is reason to believe that in agreeing he acquiesced in Harmodio Arias' views on the base question. These views, if they became Para- . manian policy, would render highly improbable a favorable solution of the bases problem prior to the Panamanian elections in May 1948. The two Principal candfdates in the 1948 elections will be Arnulfo Arias and j.j. Vallarino. Vallarino will probably be elected since Arnulfo Arias cannot win without Harmodio Arias' support, Panamanian Foreign Minister Alfaro, who is also the Panamanian Delegate to the UN, i~ not likely, meanwhile, to adapt any position ? fn 2hQ defense -sites negotiations that would incur Vallarino's dis - pleasure. Although President Jimenez will probably not support any candidate, his position in the defense-site negotiations wiil be circumscribed by the public knowledge that both the leading presi- dential candidates are opposed to the US terms. Jimenez can, how- ever, be counted on to permit the US to occupy the base&, without specific authorization in Panamanian law, until. the elections. _g- T Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~~OI~TlEI~TTS - Page's TR.~~S ~ ~RI~ F .. . ............. . ........:... ~. f - vi .. AR;T~C~ES ......... ......................:... 1 w 7 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ' 'T' V I~npl~ca~icras ~ the ~ Flect~~ ............? .:~ .... ~ 1 Plew Go~~~ Pol~cp in France ............... , .. 3 Sattie# Pre~s~.ra~f~s to Gain C~~rc~~ !n Greece . , ...... 4 The iM~.t~~ary Sfia~ ~ ~h~na ......... ? .....- ..... 6 ~ ~ ~! . ~ ..~ gyocument ~~? ~ Aso in C,.aa ~ { NO C:.1...;1GE ~~CL`AS5~='1 ~ i~ r~~' .p ?? ry ~ t ~~nr Q ~ _,~. r7 P ~ ~ ~-~` Aut:z: 4 Did BY Date: T1' 73 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ' T1~END3 IN BRIEF GENERAL Soviet intenti~s in Palestine may be illuminated by simi- larities between the December 1945 Moscow Agreement on Korea and the recent Soviet proposals for setting up separate Jewish and Arab states. The Korean pact provided that a joint US-USSR com- mission consult with "democratic parties and social organizations" in setting~p a provisional "democratic government." The Soviet proposal on Palestine suggests that during a transitional period the Security Council administer the entry through a special com- mission. This commission is to elect a provisional council of government for each part of Palestine after consultation with "dem- ocratic parties and organizations," just as proposed for Korea. The adoption of the Soviet proposal- would afford the USSR new op- portunfties to delay action through interminable bickering over the question of what parties and organizations are truly "democratic;' just as this question has delayed solution of the Korean problem. The decision of the UK to return the Italian battieshin VITTORIO VENETO, despite the- apprehensions of the Admiralty and objections within the Cabinet, reflects Benin's estimate that Italy is not likely to come under Communist domination, at least during the period required to complete the scrappi~tg of the ship. Because the UK , like Italy, is eery short of steel scrap, Benin's decision also indicates awareness of the need for the UK to improve its relations with the present Italian Government. Anglo-Italian relations base not been good since the war ended, and they became sharply worse after the UK dollar crisis forced abrupt suspension of sterling co~nrertibility arrangements on which Italy was counting heavily to reinforce its dollar position. In another gesture toward improving the relationship, Benin voiced his hope that the UK will be able to begin shipping coal to Italy after next March. WESTERN EUROPE Recent UK ~uniciAal e, lections,.which reveal a very sharp swing away from the LaborGovernment, indicate that the Govern- ment has failed to convince the electorate that its increasingly -i- TOP SECRET . Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET .austere measures are necessary and suggest that a general election in 1948 is a possibility (see page 1). Indications that the Cominform is directing the policy of the French Communist Party along is Soviet lines have already caused the Party to lose prestige in France and may result in severe losses of strength among labor and reduction of the party's domino- . rion of the CGT (see page 3), Small im~rovement_s in the. UK economy are appearing, al- thaugh the general outlook remains`~teclou~e~. It now appears likely that the year's steel production will exceed the pia~nned tar- get (I4 million tons) and that the 1947 coal target of 2a0 million tons will be missed by only about 2%, If production is mainffiined at recent levels, coal' stocks will not only be sufficient to avoid any such breakdown as occurred last winter; but should also guarantee that essential industries will get their fall requirements during this winter.. Small production gains are already bei~ registered in several manufacturt~g industries in the "most essential" _ cafe - gory, even though the Government's labor direction program is just getting started. Reverses suffered in three b~?-elections in Eire last week , reveal a trend away from Prime Minister De Valera and his Fianna Fail Party. It is doubtful; however, that popular discontent will be strong enough to remove De Valera from power in the coming gen- eral election which he has no~o announced for "early neat year." De Valera.'s times of the election undoubtedly reflects his calcula- tions that the Government will have regained its prestige during the winter months, Premier De Gas~eri's attempts to stabilize his Government by the inclusion of represenffirives of the anti-Communist Left e making little progress largely because of Leftist fears that such action would split the Left, 1f, however, the moderate Leftists do not enter the Government while they still hold appreciable parlia- mentary power, aid from abroad may so improve the Ralian eco- nomic situation as to remove the Left's present basis for entering the Government, R the De Gaspers Cabinet Lasts through the winter - ii - _ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET without inclusion of the madera 'Left, the )Premier's present re- liance on Center-Right collabo on will probably receive popular support at the polls next siring, A proposed unification of Right- ists, similar to De Gaulle s RP ,may further strengthen the present collaboration. Although the recent dro~ in wholesale prices in north Italy has .been i~luenced by the seasonal increase in production, the do~mward trend hae been caused mainip by the Government's credit restrictions which have forced manufacturers and wholesaleirs to turn hoarded goods into cash to meet current obligations. These crr~dit restrictions will continue to have a restraining effect on prices but will not prevent some increase when the previously bearded goods have been consumed. A reversal of the present deflattot~ary trend can be expected unless further measures are taken and substantial imports are assured. EASTERN EUROPE An intensive Soviet cam sign to in control in Greece is indicated by reports of increas m nary a o egos and Bulgaria and of plans for the imminent formation as a "Balkan Army" {see page 4). ? Rumors of-the imminent ann cement of a Balkan Federation have gained neva impetus as a result a recent meeting of Yugo- sla.v, Bulgarian, Rumanian, and Hungarian Communist leaders in Banlok (western Rumania). The USSR, however, has little to gain from the establishment of a formal federation .~t this time. More probably, the meeting was called in order to include Rumania and . Hungary in a series of interlocking mutual assistance pacts with Yugoslavia and Bulgaria, supplementary to the cultural agreements already uniting the four co~u-tries. The Communist leaders of these countries can be expected to hold further meetings in order to plan the joint execution of the Soviet program for the Danubian, area; The Communists are ea~loiting Czechoslovakia's severe food shortage by emphasizing the promise of the USSR to provide . adequate supplies ~ wheat this winter and by charging that the TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET inefficiency of food administrators in Slovakia. requires their resig- nation, ~ However, unless the USSR makes early delivery of the promised grain, the Communists' current propaganda campaign may boomerang. Popular discontent with the food shortage, partfc,- ularly in Slovakia., may then be directed against the Commwnists far their false promises of Soviet aid. Zoltan Pfeiffer's fltaht from H~~ and the imminent dfs- solution of his Independence Party are indicative of Communist determination to hasten the elimination of all opposition parties. As in other Satellite couatrfes, the Huragariaa Communists have resorted to tts? faaailfar strategy of charging their opponents with espiaanage. Sarankovics' Democratic People's Party will probably be the next ~rvup to be caught in the ever-widening Communist- designated ,spy rings." NEAR EAST-AFRICA A potential threat to Arab nolttical unity arises from the long-standing rivalry of two powerful groups in the Syrian district of Jebel D~?uze, which was brought to a head by recent fraudulent elections. Uailess the Syrian Government can control the coffiict, which has already reached the point of open hostilities, disorders igay spread throughout the countayp, thus: (i) threatening the in- ternal stability of Syria; (2) hampering Syrian military cooperation with the other Arab states for possible action fn Palestiae; and (3) possibly leading to intervention by other Arab states in support of one of the Druze. groups, The recent guerrilla attack on the Greek t of M~tsQ~ (a key town an communication lines in central Greece) was the strangest and most prolonged yet undertaken by the gaerrillas. Following two weeks oaf fighting, marked by the successful employ- ment of standard tactics rather than the usual guerrilla tactics, the guerrilla. forces are withdrawf~ noarthvvard with little pressure from the Greek Army. It seems likely that the main puipose ~of the attack was to draw Greek Army forces from the important towns of Ioannina. and Florins, possibly in preparation for large-scale guerrilla. action in those areas. -~ iv - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~'A~ ~~?~ Akt~~~.~~Ri~t ~~~~~ ?e ~,~~ed t? get~~ ~~~ - ~hR~~i ~:~~Id~ ~~ the ~ ~hi~e~e ~~a~~a~ai~t ~~e~~i~~9. the ~~~~i~t~ Mill ~~~~e~:~ ~atec a i~ ~e ?~er~ ~iI ~~ Q~~e Isere ~~: ~hi~e~~: ~~~~.Ii~t ~.~ _ ~~we3g ~~~ i~ ~:~~~e~ the ~~~i.~i~e ~a~t~~ i~. th~~~e~es~ l~~ti~i~: aie~e~~e ?f ~i~i~A w~i~h ~~ s ~ee~ ~e~ ~~~. ~t~ bq ~hi~e~e ~~~~ai~Pc ?~ce~ ~~p?~edAy ~.t~~~~e~i~~ the de~e~~e~~ sip ~? tee. I~ tt$e ~e~~ ~i ~$ h?w~"F~e~p ~~.ti~.Ii~t air p?w~~ will ~T~~I~' ~e ~?re ~ ~ dete~~e~t the a ~e~i~i~e ~~~t~~ e~~~e ~~~ffi~i~~ ~~Ii~e ~~~il~ ~~- ~~~~?e ~ e~~ill~ t~~ti~~ ~ ~e~~~e ?~ a a~~eh~e ~ ~t ~t~~tr~~ t~~~ets ~ith~a ~~i~t te~?~it~~y. - ~~t~ ~ti-TJ~ ~e~.tie~t tae ~hi~ae~e C~ ~t h~.~ ~e~~~e i~~~ea~i~~I~, e~~e~t ~ ~e~e~t week. ~hi~ i~~~~~~e ~ ~ti-~JS feeli~e ~~ b~ m~ti~ted bq ~~~e~~ that: ~~~ ~a~ i15 ,p ~~,y~8~ ~~ ~~b~t~te,~.~ aid t? the ~'~ti~~a~a~~'~~~~~~~tq thit~~, ~~ta,~ii~~ ~.A~~. ~~~~v~d~.~~ t6s ~i'S~~'~' ~ ~. ~~~~r ~.C~i ~1+~E.?t~v `Fr~.?~?i~~~8s~t ~:F~.~?' ~ai~~ - ~d ~~~ the ~3~ sag ~~i~t ~ ~e~~~~~ wither ~h~ ~ati~.I C~~~ve~e~t ~.~ ~ ~~e~e~~i~ite t? ~h ai~q t~~~ ~e~~~ ?~e ~~ e ~~ffi~i~t~g ~~e~.te~t ~a~~~?~~; the ~~~~ti~ a~~ i~ei~ie~ep .~ the ~Tatfal G?~ee~t. ~?Iiti+ ~itti~ ~a ~~~ ~ te~~e ~ ~i~-~~Ie~ ~d ~ad~~~s~~~e~e f~t~i a~~a~~~ C~i~ues t~ i~~~ea~e. '~h~ a~e~ ~it~ati~ss~ ~e~~ eA~~I~e9 ~ e~ eth~i~. ~~-~~s ham ~e~ t? e~~e~~ t~~i~ ~i~~~tea~t with ~~re~~at ~~im ~.~.~~~ a~~a~~~~.e~t~. _ ~ewhile, ~~ehtiaP is~~~tl~ I~a~e~s ~e .II b~i~~ held ~.~ "pr~e~ti~'e .~~s ~itht trial. ~~~e l~u~t~~,li ~8~' ~?~e~ae~t?~ Ian ~ati~s~li~~ti ~ hay p~e~~.~it~,te~ bye ?~ the ~itte~ea~t ~Aiti~~ ~t~~~Ie~ ~ the ct~e~. hilt?~~. Pdh~e the ~ve~?~~ent h ~ f~ie~~ Ifaffita~~ ~a~~rity t? ~btai~a ~~~~?~~~ ?~ the ~a at the ~a~~a~t ~es~i, thy: ~~~iti~ i~ eec~eci t? ~el~,~ its i~p~e~emmtati~a ~~ ye~al aet~~. ~lae tf~-'sEi. i~~~~ ~~.y there~~ ccs~e de~i~i~e i~ ~dete~~~i~~ tffie Ida?~ ~-~~~Tt~~~B9t~S `~~it'e.. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~e~~ ~a1~~~c~Y a~aa~es$ i~a a Philp ~a~s ~~ ~~aly t? ~oRl?w e ~ 1 ele~tl~~ 'c~E~i~~ ~e e~~~~et~ ~? l~ac~e~.~se e ~~~~t~~ )c~~l~y e~$~yed b~ Pme~ide~at ~?' ~3ber~l i~rty. the ele~l~~ ~e~~~~hflp ~ ell~~a~e r~~~ec~l~e f?~~~A eager?~~~ . $~.a.~ ~d ~~a~~ ~e~?~e: ~1) may res~ra~~ u~~ ~e Gt~iert~a~re~nt`~s . ~~e~sf~e ~~~~~~~ ~ e~?rci~~ ~~.~ a.~ael ?er; d ~2) ~y ~?pe ?~ ~?~rec~~g a ~~~~ ~e~pme ~~~ernr~e~fiaA c~r~ui~a. ~~~eq~e~~y, dl~~e~, ~~y ?ff ~~~ ~-~~i~ed by dt~~~de~t~, l~.~less 1~~~~ ele~e~at~, ~a~.y be e~~~~ed ~? ~c~~e. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~- Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~~~~~ ~~~~c~r~~ ~~ ~~: a~~~ ~~~.~~~~~~ bear ?Yi~~~~, ~~~ ~r~a~~y ~~ ~~,? ~~. ~~~wn ~~~ --r~~~d ~ ~~~$~~~ fir .~?~~ aid, ~?~~ ~. .~~a~~ ~.~ ~ w~_?~a~~ epr~?~.r~.ly9, .~.~~~.~fsf~.~a~a~ w~ ~ G??~~~~a~~~ whi~~ ~s ~~~~~~m .;~~~~ ~~~ ~~s~r~~.~~s, r~~~.~~.~tf~~ and ~~ead~~ ~~~~~~~.~~ 1~~ ~~~~~: ~~: ~. ~~ ~~.~~ ~f ~?~~~~ w~.? are ~~~~.~~~ apa~t~~ ~?a ~~a~ ~&e~~~.?~~o- a~pare~m .~ ~ ~a~~r~~~~~ ~ ~~ far fa~l~~ ~~ ~~ is t~ ~:;~~~ ~ ~~~~~?rat~ ~ ~ a~pt~~ar ~~ar~s v~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 - Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~~~ ~~~.~~~ ~~ ~~~.YY ~~~~~e~s~~ ~~ ~~~ ~~~~~Y~ ~Y~Y~B ~Y~xa~~l~ ~ ~~~~ ~ ~e~~~~~~Y~~~~~~ ~~~s Y~ Y~ ~3a~~gY~ ~ ~~~a~Y p~~Y~c ~~~~~,Y ~~e ~~Y~Y~~Y ~~~~~~Ycy~~ ~~ Y3~~~~ ~.~~ R~~~~ka c~iYY r~? ~~~ ~~ Y~~?m~~~~~~ ~~~i~~~Y ~Y~~~Y~~m wYYY ~~~~~Y~ ~~~~~~ Y ~~p ~~~~;~ ~? ~~~;~~~~ YY~~~?~.~ ~~ssY Y~a~~~~~~~~ ~~~~ ~y t;~p~Y~ ups , ~~~ ~Y~~~~~~~~~m , ~2? TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 .TOP SECRET N~1 C4NiNlUl~ttST PQLIC~ IN FRANCE The increased subservience of the French Communist Party to the directives of -the Kremlin has been made apparent by recent statements of Party Leaders Thorez and Duclos that French Com mEUnis# policy would follow the line laid down by the Cominform. These sta#ements indicate that the French Communist Pa~.?ty will now alter its tactics from those of a "loyal apposition," attempting by political mean. to share in the Government, to those of an out-and-out opposition grotty attempting to take over control of the Government, Consistent with the shit in the Communist line from "anti-Fascism" to "anti-Americanism," all pretense of patriotism except that of defending France against "American imperialism,;' probabi~ will be dropped. To defend the nation against that "danger,' however, the Communists are calling for labor and "democrats" to rallq to the Communist Party and are attempting to organize the workers in towns, villages, and factories into `committees for the defense of the Republic.' The public utterances of Thorez and Duclos and the Party's activities in support of the new policy are expected to have a dual result: a decline in Party membership and support, as ig 1839; and a weakening of Communist domination of the General Confedeara- tion of .Labor (CGT), .Already, some fellaW -travellers and a few members of the Party are showing opposition to Thorez's plans. It this trend continues, the Party will be compelled to rely only on its hard core of militants. The open subornation of the French Com- munists Uy 3Koscaw will lead many Socialist and labor leaders who have not hitherto strongly opposed Communist leaders of the CGT to work activelq against them. Yf the Communists should lose con- trol of the GGT, they will have lost their most powerful ~~~eapon with which to attack the Government and the Damoclean threat of a ,gen- eral strike will be removed. -3 - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 -- Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET SOFT PREPARATIONS TO GAIN CONTktOL IN GREEGE Reports of recent military activity in Yugoslavia and Bulgaria. indicate that the USSR, temporarily blocked in Western Europe, may have began a more intensive campaign to gain control of Greece. Be- sides making preparations for increased Yugoslav and Bulgarian assistance to the guerrillas in Greece, the USSR appears to be build- ing those two cow-~tries as the dominant military powers in South- eastern Europe. Full development of the Soviet plans is not expected, however, until after the. London meeting of the CFM. Increased Soviet military aid to Hugoslavia and Bulgaria is indicated by reports that: (1) Soviet arms and munitions are being sent to Yugoslavia and Bulgaria, both overland from Austria and by water through Black Sea ports; (2J the USSR has transferred several naval vessels to the Bulgarian Navy; and (3) extensive stockpiles of war supplies are being built up slang the Greek and Turkish borders. Ia addition to preparations for greater aid to the Satellites, Communist plans to increase ciirec~t miYitiary assistance to the Greek guerrillas are revealed by recently available reports of secret mili- tary clauses agreed-upon at the Bled conference last August. Accord- ing to these reports,. a General Staff of the Central Balkan Council has been established under the chairmanship of Admiral~Rodionov, former Soviet Ambassador to Greece. His staff will reportedly in- clude Yugoslav, Bulgarian, Albanian, Rumanian, Hungarian, Czecho- slovak and Greek-guerrilla officers who will assist io the operation of an International Brigade, or a "Balkan Army," consisting primarily of Greek, Yugoslav, Albanian, and Bulgarian personnel. Moreover, recent indications point to. the imminent formation of a civil governmeirt in northern Greece. Such. a development would per- mit more overt utilization of the military forces being organized~in Yugoslavia and Bulgaria. Despite these intensive military preparatiaais sad the failure of the USSR to begin withdrawal of its troops from Bulgaria (scheduled under the peace treaty to be completed by 25 December), the USSR probably does not intend at present to participate in overt military operations in Greece. Instead, the USSR is preparing to meet any -4- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~- Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET de~ele~g~e~ts ~rfs~ fr?~:o. the L?x~d?~ ~aeet~~ ?f the ~~~. ~[~~- wh~~e, these actp~fties ~?t ~{~~g~~y ~~~re~se ~~aBSy~~.te~.litpe ~9~tentt~ fgj?,,r~8 Ci~~l?~~$~'.~`~~&d"i ffi~~~t~~"y ~.~dl t? ~LA~?~.~.~ ~~.~?~'81g6~-4', ~~8~ ~.As? ~i~~std46i0.~. aaa effe~ttve we~.~~n the ~a~ ?f ~ae~~es ~~~~st the meek ~ee~n- ~e~t. Ffaaa;iYy, these sett?~ns serge t? stx~ean~then ~~a~r~sl~vis. ~d f~t~a&~~a.~?ta as eff'e~tt~e ~defens~ve -~~affers ~y ~ ~,~afaeri~tst's ag~~?essio~a frc~~ the ss~th. -5- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Map Branch, GA 10862 November 1947 CHINA: COMMUNIST CONTROLLED AREAS, 1 NOV. 1947 U. S. Government Printing Off'IC~ , Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~ ~. f A L:. F .~ v :.J ~ti O ?~ JrrE H O L ) 3 f^?.c Ch'ih-tehg Hsimli,ty ^mi ~ ?~l f` s Peilp~o/r 4 Pao-t'ou KUEI-SUI uan uan ~~~ ~~~~ ~.Ta~ ~ V hsien C_h'ang~li~yJ ? J ~ t,.~ / Tien- {y+ NINGSIA~ - ~ Wu4'ais ! c !n8 ~'1 ~~i-'~ J' Hsin-hsien i' 'ING-rV~ AN 7s / `i' ~ l - ~O P E H ~HL..V, 'tlairianli5 ~ c1c. ~~'J S ti' T'ai-ku >f h~a~ 1,~1i, ~ o~ an ( " ~ t~ (? '- ~ l ~ ~ 1L ? 7~ TSINAN K A N S ! ~Z tr oleo Lu-an' ~1 L 1 _... _.. .... _.., .t..J t ung.euan~ '~... ~~' ?~ Gheng;hsien ~ ICAI- ~? ~ t) H'ANGANr~ ~ ,ENG - S j H O N ANN ~ ?~C ._..~ 1.. ~1. ~ ~..w.J ? ~~ SZECHWAN ~.-:~ N U P E H O e)~ ~,~~ S' CL'J 4~NANI~IN~GSh ~HlDtang,pei ~ IGYu `h i ? , ., ,-~~S _WU ,~ ~VSu-hu Y.. O ~_Cf' He'gNG ( i J Kashin~~ f, ....,~' .~ ~t. HUNAN ~? ~.. ~t I pp /I?Y.i CHEK' ~ KWEICF~W ~~ (~_~_?Fhang '~Chimhuaxo H S I N G A.N HAILAR K I A N G Lin-k'ou Po~~"Dairen ~\ Arthur PORT ARTNUR ' NAVAL BASE AREA ? IErcNaina Calrml Yin-hsien? r ~ ~? Mu.ran Sr hr ~ 1.: '~hranXX ~~~\ k Kirin ?~ ~~? ~? (GH'ANG~CH'UN Wang?`h~ing ...,J -'\ 9 ~ C lyng ning ~. s es r ss s rs ss ee T~e ,ntemet;ane~ ~ana.r~ee e~a.n an t~~e meo do not neces:.uh co.resaona .n an cases m Ina Eounaeries reoognieea Oy Ina U. 5. Govern- ment. /l ~G55 f..f ~J7 P S O U T H CHINA CONFIDENTIAL Scale some es on mein map. ~JNONG KONG ttx.t - Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 THE MILITARY SITUATION IN CHINA Although the sixth Chinese Communist offensive in Man- churia has failed to dislodge the Nationalists from any of the large cities they previously controlled, the strrategic initiative in the Chi- nese civil war remains with the Communists. The latter have in- flicted heavy losses oa the Nationalist forces in Manchuria and have recently extended their military operations into Central China, south of the east west Lang-hai railroad< The Communist forces appear to have the capability of carrying the war into other areas of Central and Sduth China, where National Government defenses base been weakened by the movement _ of Nationalist troops to the . north, At the termination of the war against japan, the National Government possessed the best-trained and-equipped native army in the history of modern Ch~tna, However, in the two enauiAg pears of civil war, the,Chinese Communist forces have strikingly dem- onstrated their proficiency fn waging effective guerrilla warfare. They have displayed an ability to capitalize on such prominent Nationalist weaknesses as a tendency to overestimate Nationalist ,operational capabilities, corrupt and professionally incompetent leadership, and the ~ lacT~ of supporting communications adequate to bring operafilosal plans to a successful conclusion. From the begitmfng of the civil war, long-range Nationalist objectives have included: (1) reoccupation of Manchuria; and (2) control of the area south of the Lung-hai railroad, to be lollowed by the opening of the Tientsin?Nanking~ (Tsin~n) railroad. To \ spearhead this offensives, the Nationalists initially employed 39 divisions trained and equipped by the US, However, the outstand- ing ability of the Communists to avoid pitched battles, to draw the Nationalists into extended and untenable positions, and to infiltrate between advancing Nationalist armies and establish operational areas in the Nationalist rear, enabled the Communists ~to rwllify any progress made by the. Nationalist armies and to reduce the original 39 divisions by one third. Moreover, the Communists have rendered the Nationalist salient in Manchuria extremely vul - nerable, re-established their bases in the Dace "pacffied" areas south of the Lnng-hai railroad, and successfully resisted National- ist attempts to open the Tsin-pu railroad. -6- Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 - Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET h? the fnt~rey as ~aa~o~? ATationaRist-held areas and teats become isolated from each ether and from their bases of suppler, Atationallst mll~t~.ry strez~~th msy be ~~ected to cleterlorate at an increasi~~- paced ~onw.aaatatlon 4f this process--which will lne~tabl~ t~ accompanied bar farther pol~tlcal -and ecoa~oax~ic decerioratlon--ffia~t lead within a g~eaa~ to decisive anillt~.rp suc- cesses for the ~hia~ese Communists and to the I~Tational ~o~-- ert~n~entss diga~tte~eationo -7_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~4~ ~t ~ Peres TR~S ~ ~R~E~......, ......................... f - ~ P~~sps~s ~~r a A~t~t~~eraF ~~r T~e~~g~ .............. ~ ~e~~~t ~i?~~c~cs ~ ~~A ~?r~~ ~isc~ssi~s ........... 3 Czech?sl? Easy-~Isst ~?~?~.~e ~a.l~~.e.... '........... 4 ~~g~~$c~,~i~~t~ ~ the ~~i~u~n~ :~ ~~s~ .............. 5 Dock,... -~- 1.9~a. Y~O, C;Ii.~lGE 9.n C ~. ~,~. ; gate : _~---~---"'_"' ET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ?I' ~?, la. ITT l6 S I ~? U H, I E F G~`~l~A~ Tie,. ~C~~ C o~e~e~c~ .~.t ~~~~z~ ~~~ ~e~?resent the final o~~ortunity to orr~.n~,ze world ai~? traffic under a. n~.ultilateral air treaty (see z~ag~ i~. S?viet in2en~ic~~ to fores~.ll solutian aff the ~orean_flrol~lerr~ by ZTk~TGA a~?e clearly indicated by the first moves of the Soviet LTN ~elegati?n (see Wage ~~ e Fu~.ire LTS Satellite dis~e~tes, over peace _t~?ea.ty int~~reta~ tio~~ nay he fore~~adowed ~~ the ~?ntinued refusal of the R~ungarian Governrraent to accent the i7S contention .t US military aircaaft are entitled to fly into lip'ngary in sun~aort of the activities of tFie US re?aresenta.fives on the Allied control ~?sa~nraission during the 9~-day ~r~E.hdrawal Reriod ra~?ovided in the peace ~eaty~ ~Iua~gary insists mat it has rreg~.ined full so~rereignty and-that the treaty contains no clu~.lifications~ cog~firrning the ~S position which holds that Hungarian ner:nits for such flights .are unraecesss.ryo Yugoslavian effoa~ts t? ~~n~ ai~r~~.~a~ o~ei?atio~s beyond So?~iet-~cont~?olled areas are continuing. Tlae latest evidence is: (1 ~ a Yugoslav sopxication $o the Mice of t3S 1Vlilitary Government, G~exrraany, for r~ex~x~ission to make a traffic stogy at Munich on a route to saris; and (2~ current Swiss~~i'ugoslav air negotiations, ~ designating tlae near Yugoslav airli~ae J.~T (su~Posedly'entirely awned and o~erat~cl lay Y~agoslavia~ instead of age Yugoslav aia line ~'LIST.~i, the Yugoslavs a~o~arentl3? hole to #orestall I3S refusal #or zonal overflight iay ~.n airline not really ov~ned and controlled by Yugoslavia. Regardless of permission to fly through tIS occupation zones, however, the "yugoslavs can advantage of the Italian r~eace treaty terms to overfly Italy into Switzerland and ~~estern 3e ~A~~/Ne o V(~ESTER.I'eT Ei3H.~JPE Iaestaite R.aynadier's narr~av victor~r in the vote ?f cernfietenc~, France's political and economic situation continues desperate. The TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET Centxist coalAtion Co~e~?n~::nt wiYl px~oh~.~:~~ cc~ntin~ne to be ineffective in dealitng wftkn French ~:conoic proi~les. if either of t~~e two e~- trea~P groups, ~e ~aa~~.le's R.T~~' or khe Coxna~t~h~is~, s.tte~pts to ~s~ver, civnE war might res~ltQ Ra~nadiea~ wild., therefore, to . retrain pier as 1?ng as~ ~?sF~i~le. Re is ~.ike~.~ to succeed for the newt few creeks st least while t7e Ca~xlle ar~d the Comn~tinists are strengthening ~~e~selves for Srhe showdown which F~?enchzxaen he~ lieve is i~aevi?~b1eP '~~e C ?~~?n~st c~~,~itio~ in ~c~.ndina~ria , ~~a~ ~,~be~~a w~ake~~cl b~ the ,noting in r?eee~t electio~asa ~ the ~a~aish gea~eral election ?n 28 C?ctoher, ~e Com~t~nist r~~spnlar vow declined 45% and the Coa~- rn~nist ~art~r lost 9 of its 1~3 r~ax~liarnent~.ry seatse `I?he Social I~en~- ocr~ats anc~ the lihe~?al x~a~rties gained at ~e e~~ense of ~e e~renle T.,eft and Righto In nation amide rnu~aicipal elections ~ I~ore~~ag on ~0 ~ctoh~r, Coxr~.mnnis~ v?ting semen declined ~.9%, ChAef factors in the Com~raunist decline apneas t? he dislike of the Co~ninforxa~a, a wades read feeling that the Parma is a.n i~asfi~?ianae~at of I~xe~nlin ~?lic~, a?~d a ~pe~kening of fav?~?ai~le p~a~lxc s~:ntin~eng concerning CoFnra~t~nis~i resistance activities in wartime. ~~??xn the Swiss r~~.ti?~ ~~e~~~ons of 26 Octohe~ in~iacate r~o ~?adieal ch~,a~ge in the ~~~e relativelg~ conses~.- tive Swiss iVationai Council (House of Represea~tatives~~ ~'~he gains of the middle -of -the proa.d R~.dicals at ~ e~ense of ties left.~of cente~? Socia~.ists seems to indicate disappro.l off the letter's of forts to ?'eS&d State eont~?ol ?f 1nteY?31ta1 eco~aona~, while the ~ooT showing of the Cornnra~nnists illustrates Swatzerlandas general anti- Co~aa~rtunist feeling which was in~nsifi?d dust before a elections b3- $he esta~lislarnent ?f the Corninforrn. EAS'~ERiV1 EUR~??E Czechoslovak indaastrial production and high s#aaidard of living are endangered b~ the ~sresent pressure to starengthen eco- nonaic ties with the USSR (see page 4} . ii - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET r~~.3~''~~ e~feat~d by thy: r~t~~r:~ted ~ss~~~t ~~ t~~~~~ ~~, ~?a~~ Sca~~~~ ax~? f~~~~ ?:~~~~~~s t~ ~~.~~ ~z~~r?s~s~~b~.~ ~+i~t.~y a~t~ici. T~~se mfg f~~~ 4 ~,~~ ~.~l~~~d1~ ~~d~~ c~~c~~~~a t? ~~e~~~~at ~ ~s~~p~ ~t ~x?c~~ ~~~st~~~,l~ ~tt~ ~~~~~~~s, ~~t ~t ~a~~~ ~~~~~~ a~ ~.~~~ ~,~~ ~~t~ae~~tg ~r~~~I~.g~e~~~ ~.t~~.~t ~";~~~~ ~s~~?s~?~~~, ~~i~~ t?a ~~~~~ ?~ "~~~~~.x~.ta9.~a~ ~I~~~ts ~~~ t~~ .~~a~~ ~.~d ~ .~~~ E~~c~a ~~e ~~~s~~~~ ~f ~~r~s~ ~~~~~~~s ~~l~a~ ~a~st~t~; ~ ~~s~ ?~r~~~ ~~,~tt~i~~ t~~~a ~y t~~~ S~a~~t ~~1~~. ~a~ ~~:~~~Z~ssl?~~.~ ~~~ ~.~~a~.~s~s~~e ~~ ~~d~~.~~k ?~ ~~~~~t ?r~=cps pia ~9~56 ~?~e,~ ~~.1 ~~ ~ce~~~~a~ ~T~.tta~~~.~, ~~~s~.~t tr~ad~~ ~~~~~ is ~?i-- ~ ~~~~~ ~ a,~s~~.l t~f ~ a~~tasf 9~~~~~~'~~d t~~~.s~~, z~~s t~ ~~st~~~ E~~~,~eW, ~.~d ~.~e~~'s ~~x~~~ct~?~ ~~. s~~~a?~.zs ~~~~s ~s s,im ~~~~st ~ ~~~~~~~~~. ~esid~s ~~.~~ ~~~ ~~ ~ ~~~~~d ~a~~t, ~?~~e~ ~aess~~a~s, a~~d ~.~~i~~d~.t~?~. o~ ~gi~~~~ss~s, ~~~ ~~~a~Ets ~.~ t~~~~s~?a~~d. ~.~~ ~~ ?~t~~~`~ ~~c~~k~t ~~~~s ~~~at~ ~~~ ~~~~ss~d ~ di~sn~~ ~? de~~~d ~~ff~.~t~. T~~ ~~s~.~~~a~~~~~ ~~ P?~ts~ ~~~s~,~t Pa~t~ ~~ad~~ ~?~.a~ ~~ ~?~~s~ ~'?~a~~~~sts t? ~~~~~~t~~t~ t.~~t~ ~~~~a~ ~.~~~ c~ ~te~~tti?~ ~f ~.~~~R~an~~~st e~.~~~n ~~ ~?~ts~ Sc~~last Pa~t~A ~t~~- 1~.;~~~~~'s d~.s~~~~~.~a~~~ n2~.~~ f~ ~~ss~~a~~ ~?~ ~~e ~~ca~?~~x~~~~~~t i~.~t~,o~ ??hisF~~,?g?~.ts~n ~~s,ssg~~.t?~~~t~ ~~5~.,- t?y~,s~t~~ ~:c~~~a~ c~~ e 1~Gd,!i ~~ `~..~~'~ E~ 5~E{~. ?~1 ~. ~' ~~. X"A~i 1J ~n~~a~+'~t~~~~?9 c.YB~n~T ~~.`a~.~ ~.? ~~r~''i~.5. ~m ~~sttit~a~ ~~~vs~a~~~ ~''e~la~c~. ~~~ FSL ~t~~ ~~~ sa~~~~a~~ t~.~ ~~~- ~~~a~~~t ~~~ ~.~d e~~~~~a~Iy ~~.~ ~~~~~ ~~ ~ ~~~tt~~ ~?~~~~~a~nt~ ~t ~r~ ~.~~~~,~ t~~ ~c~ t~~ ~~ C?~~~c~.ti~~~st ~'_ ~~t y~ ~'a~.~.~d. C~~~~~-~~st ~~~t~~~ t S~a'~as~' ~a~~~~?s~ ,~~~ ~e~~~st~~.&~d ~~ ~ s~?~ e~d~~s~~~~~ ~~~~x~ by a~s~ ~~ad~~s tc~ s~~~~~~~ dgs:3:~~afsha~le fr? G~mm~aist ~~lt~i~s. ~~nfs e~t~r~~~ I~~~? ~~z~i~a~a~YS~ ~c~sat~?~x a~ t~~ ~~~.d~;~~ ~~~~altsc~ g~~~ ~~~~~ ~~.~~~&~-~~~ ~~.e~~~ts Q~t +~ t~~ ~a~ty t~ ~~~ ~~~~s~ ~r~s~l~~~s,~t~d1g' t~ ~~~~~ the ~:?a~n~~~a.ntst 1~~. ~~~~?~~~, ~~;.~~~~ ~.~~ .d~~~.~~~~es ~,t ~ ~?a~az? nests a~~ ~a~~.~~~ t? ~s~ a ~~t~~: S~~i~l~st ~s.~~~ ~.s s. sv~~~ghe~c~~ . TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET fo~? f~,e f~ag~rr~a~ion of a Aef~ ~~va~~g Soei~.~.i~~ ln~erg~a~i?nafl 5*~hieh ~~ould exei~ade ~?igh~ ~rir~g ~E~ciafli~~~ a~~d ~Fro~.~.d e~m~~era.~Q ~~ttka fhe new ~'on3info~?r.:~~ ~+1una.ero~x~ eo~.fere~~aoe~ bed;~oe~a ~'vfli~b SoeaaYi~~ Party leaders and ~e~k?e~e~a~~.~~.~e~ f~?oan oth~~ Eu~o~ea~ c?uu~~ie~ i~,dioa~e .a~ the l'9c~lisln ,~oeiafl~.~~~ r~a~ die dying ~? e~talili~h $.he outpiine of e~oh an o~aganizafi~,ox~ before tl~e se~xai~p~,uafl ~eettr~ of ~: Eu~o~eaxx Sc~^ ~a~?fcie~, to be held at ~~.n~ie ~n ~eeeero ~re~.n eoneer~.. ?~r~~ ~ a~~l~z~~ce ?~ the ~'oiee of 1~me~iea broadea~t~ may Yee ia~~sieated by re~G~~ atwe~~te ~o ~?e~u~e ~peeifie ~_ fae~~ ~~e~e~~ed i..n she ~S frak~sn~i~~ion~~ Pre~'iou~I~s', ~,~ eomn~enf- i~g ?~ the ba?o~.dea~w~, the So~~ie~: ~src~~ hay ~e~sed i~a ge~aer~afl terms fide ~ie~r $.hat the ~rog~?~.~~ ado ~~~?? R~oen$ edifQa~a~a~.s~ snecifieafl~.~P a.e~g, ;portions of the &~roadeas ~nhieh. ame eo~eeed ~~rith lTS sndardti~ of li~~ suggest that $~ae ~~?esent ob~~~:ti~re is to r~ersuade 4~o~?iet ~a~o~?:~ey ~ ~ they are not worse ?ff than ~S anor~ex s. t~.R ~;~~5~~~.~'?~fl~.f~ ~?,~ de~reflo~s~ez~~~ ira ~h~ flndzan ~~~e o~ ~.~.~l~rr~i~? ha~re sued seri~aus ixn~Iiea'~~,ons ta~aat ~tey may Head ~o a ee~~.l~.~se of go~p ~:ra~ment ~.u~oritg~ in India and Pat~?ista.n or e'en to ~~ar be~nveen $he ~o cflo~i~aLons {see~~,ge ~?o l~n~~?o~ed nx?s~eets of ~?e~eflect$?n fo~? Prime ~inistear 5rr~c~ts in the,n.e~ Sauth ~.~x?ie~.n genera: eflections {~hieh kill ~rob~.bk~r be held in ~~~~~ aner~pa~e ~: li~~efliii?od mat fl3i~-~Soufi~. 4~riear~ ~?eIa- tions ?~ri~.l re:r~aitu h~rrx~onious and advan4:aageous to fihe UKo In ttae oast ?nth and ~. ~.xf, S~aaz~ h~.o~ gained sta~ength by f~.ilure of the ~aation~.list ot~nosit3on to rec?neile rr~.oder~.tes ~,nd e~t~emists and by no;~ular ~.~~ro~~. of ~e fay his ~.dn-~inistratior~ h~.s hansiied tine Indian ~in.oril~ and you ~~est. ~friea xna.~~date issues before the ~j ~6 a~ e TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET BAR EAS~? Al~u~h E~ench ~ffic~.als helia~e t~~.t an a.eee~~.~ale settle- rue~t ~f tthe ~~e~chsViett~~rm di~~a~fe e~.~ lie ~e~~~ed i~~~~~ s~g~- ful ~ae~~atiati~~ with fo~?mer Ee~ ~:~? ~~.~ 33aip ~.~ as ~u~e ~.i~el~ ~~ ~~e a~tici~afred a~??~e~e~t ~.~?a~ld c~ecr ease t~~e e~-e~perox?'s f?lk~vviu~ a~td! i~ac~? su~a~o~t f?~ President kl? Chi i~ltiuh and t~~e Viet ~Iit~ka Le~.gue~ T'he ~'re~ach ~lar~ wound ?ffer tau F~~.l's uati~~- alist f?~lo"~ers additioa~~.l coaacessious as to dz~lou~atic ~?e~~?esea~ta.- tio~a ~.ud c?ntr?a of the ar~~~: ~.~ ~e belief .at such concessions would fhc~? Pa? ~~.i's fol~:owe~?s and lead to a ~?s.pp~?cs~hea~en$ between diet ~Ynh elements on ~e ?t~e .side.--pe~ha~s i~acludiu~ ~? C:hi Nii~'x~am-and a French end Eiao ~aa mn a ?ther~ Such a ra~t~~c~chement would be unli~el?~, hc~c~ae~er, because cgs wed ind8~te ~~ the natia~aalists ~.~ ~3s,o 1?ai .d caffiprorzYised in hips de~.aa~ds f?~ independe~sce< TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~Rt~SP~CTS E'?I~ A ~dITL`~'YLATEItAI~ AlR T~A7CY Thee future of LTS intera-ati.+~nal air transport operations may be adversely acfected if the YCAO Con.~:erence which opens on 3 ~'overn- ber at Geneva is not able to agree on a comprehensive multilateral treaty. `i~ithout international agreement on basic principles, ITS o~er- seas air operations: (l) will be increas~gly handicapped by local restrictions in s.reas along world-wide ITS air routes; and (2j ulti- anately may pro?e economically impractical. Yyivergent ia~terests have splifi th~a participating countries into three groups. The first groaap includes those countries--such as the Netherlands, tL~~e Scandin~via~n nations, ~?raece, Canada, and Australia--vrhich are already established as internatio~aal air carriers and wish to exloloit their fiinitial ~.dtage with rcainimuan hindrance. This group, therefore, desires a anultilate:cal treaty which would provide for aaatoffiatic and obligatory exchange of air routes between the signatories. A second group is opposed to a aultilateral treaty. This groaap includes such countries as the Arab League states, ChiRaa, and A rgentina, which cannot compete with the larger countries as i$aterna$ional air ca~rrie~?s and are principally coaacerned with developiaag local aa~d regional traffic. These countries consider unrestricted $nter~aational air operations a serious threat t? the development of their own air lines. 1r dr example, the Arab League states are amious to reserve to Arab airlines alA local traffic within their combined territory. A third bloc of countries generally supports the YTS position which lies between these two ex>rreines. The ITS desires a gnialtilateral treaty which combines the naaxin~ua~ freedom in international air operations consistent with ade~uat~ protection for locaA and regional services. ~?he YJS itself desires that the treaty recognise ba?oad general principles which will guarantee YTS canimercial and- strategic regeaire- ments and create a favorable basis for the continuation off YTS pre- eaninence in world transport. The YTS also. desires protection against indiscriminate entry by foreign airliaaes into the YTS, the greatest air travel Ynarket in the world. In t&ae interests of national security it wishes to exercise control over foreign air operations into the US. The ITS and its supporters favor the adoption of the principle of "fair and equal opportunity~D but consider,that details of mates should be -1- TOP SECRET i Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET left to bilateral agr, enfants. These countries, moreover, are willing to accept reasozfable restrictiofss on the volume of traffic they carry between countries on international routes, 4'wYhile the air interests of the. UK are not ide~ftical with those of the US, any serious differences probably will be overridden by top political considerations, and, accord- ingly, the Ulf delegation is expected to support the US positioaf.) The divergent views held by the participants will present serious obstacles to the conclusion of a multilateral treaty, at Geneva which resolves the major controversial issues. Certain of the small countries, wh?se cooperation is indispensable to the development of trans-world air routes, will exploit their position to force compliance with their individual demands. The more powerful countries, them- selves divided, may be unable to obtain a comprehensive multilateral treaty. As the pattern of international air transport operations is rapidly becoming crystallized, the Geneva Conaerence may present the. ? last opportunity to organize world air traffic on a fultilateral basis. The failure of this Confepence would give free rein to sectionalism and refight prevent the US from maintaining the minin'-um level of world-wide air operations consistent with US strategic, political,and econonfic recyuirenients. -2- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET SST` ~'.~C`I'I~S I~ ~UN~f~.:~~R,E1~.~T ~fS~CSSSft?~ ~re~.~.a~i~a~.x~y~ So~et ~~~es iaa the ~Etx~x~~.t TJ1~I~,~s. ~di~e~~~~.ora~ .off tlae ~e~~~eaaa ~a~e~iio~ ~le~.xly iaacli~ate that the ~I xSR Rs +detex~aisre~ to f?~~~t,.~~,li ya8a~ ~o~s~~.ic~~p.~ ~aff~se ~ro~R~~ by ~.~. ~a ~,~~o~?ci with ~~'er~. GYa~ s7Q~a~B~wt~.1c~~xoy, t88r~ 5~~~ ~eb~~a1t~~fia ~& aiaia`~.~~~ntiy ul~ad~~' -' stsa~~tioaa~ ~? ~e~i~e delay~?a.g ta~ti~?~ ~a~i~~a mill pexx~it the ~TSSR to ~aia~ta~a its ~e~fitcoa'6 iga ~oxea ffo~ a.s io~ag a tg~ae ~.~ i~ a~.e~es~a~?y to e~haaast ~ ~atie~a~e:. of ~.he ~J~ ~.~~, thxa~~gh ~S ~~,f~acix~.w, to ~~~.~~ the ~t~aatxy ~a~~n ffox Soviet ~caoai~a~,t~.on. '~lae ~~itial Soviet ia~?o~o~~,l, the ele~te~ ~e~a"e~eaatat~.?e~ fx~a~ ~SOth ~o~~~ ~ ~oxe~. be ~.lAoa~~~d t o iaa ~.1~. s~,is~?ar~~fo~a~, f~lffil~.~ '~~~ faA.~a~io~a of ~, ~talliag t~a~ti~ iaa ev~:xy xes~eet. Yt hay tae .~~ag~ off `~~e~o~x~.ti~~' ~~??~e~a~xe bast, at the same time, it is ba~i~al~,y aa8aaeceptak~le to ~ ~~5, iff oily be~a~as~ t~ w?axAd be i~~o~w ~~ble t? h?l~i ele~~~?a~~ a~~ t~ tx~,~~~?rt the ele~e~ cir~l~~ate~ to ~~.~e S~a~~e~~ ia~ ~i~e fox_t~aea~a to bca co~~~lte~ ira tlai~ ~es~ao~ off ~.~. ~t i~ i~~o~~fble to ~xe~i~t t~~e e~.~t foxa~a of ffaataaxe ~caviet stali~ag t~.~gi~~ be~aaa~e they w~ ll g~xok~biy be i~~~?ovi~eai c~sa ~. ~~ y~-to~ . , day ~aw~~. ~~Ewff:~~s~ y ~t ~~ ~~'~~Ba`$,~.~~ ~~c?~t, ~~ ~?Ega~' ~oi~at D.a~ trae ~b~?o~^~~~^~ ia~g~, the Soviet ~3ele~atioaa will iaato a at.~~ ~haxg- ina~ that the ~S i~ xe~~s~~a~ible .fox tae ~aa~xeaat ~tale~~.te i~a ~o~ea. '7~ he theme of ttai~ cfffe~a~i~re wgl be th~.t the [3S f~ ~etex~a~.~aeai to yet up ~. ~ep~,xat~ Mate ba Soa~th ~oxea fox t&ae ~s~x~~a~e of `?iaxa~exi~li~t eA?itati~s~,.R" akexial fox ~tai~ ea~calsa~~a gill be d~?aw~ fxo~ the x~;~eatet~ ?ff ghee Sy~gaxa.~aa., le~.~~ag S?~tfa ~oxea~ Rightist, that: he ~~.~ made ~, aiea~. ra~it~a the ~JS fox the estabAisla~e~t of ~a iaa~e- pexade~t S?a~th ~?~nc~~a. ~?~ex~a~aent aa~a~ex his leadership. ~ a~clitio~, the Soviet ~elegaf:io~a will pxobak~l;~ saa.plPly vola~~a~a?aas statistics ova Rightist ~`texrox~isti~ a~ts`~& ~.g~.~ast K~exe~.~a leftists. ~7~'hexe i~ e~i~ de~~e that tT~e S~oaath ~ox~aa~a ~o~aa~aists have beea~ ~nd~x inst~?~actio~s to ~ot~apile san~h statf~tics a.ssid~o~asly ~?ece~t ~o~ths.~ ~?he ~'SSR will ~?a~te~ad th~.t the ~S has. saa~~tioa~ed these arts ixa oxdex i~o ~xaasta ~`aiea~aocxatic~~ oppositio~a to its "ia~apexialist'~ aiaxa.s< .~s a last xe~~xxt9 the ~SSP. will.. pxobly ~hall~:nge a ~aaxis- di~tioxa a~ff the iaa the ~attex~ the ~o~iet ~elegat~.on will ~l~i~a ~aat o~al~ the foaax s~.g~~,to~?ies t? the ~I~rs~?w Y~e~isio~ have ~y leg~.l i~,tea?est in a ~~se ~aad, faaa~~e~?9 t.t aao ~.~ cie~isfon ~~ ca~?xy y weight armless implea~ae;~ted by the o o~~appiaag powea?so ~3~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET CZECEQSI~O~Al~ :~AS??-~ES~ ~.I~E ~AI,ANCE the Soviet a~ck on the Eurc~aea~n recovery prograffi has jea~p~.rdized Czechoslovakia's delicate balance of economic depe8d- e~ce upon both the Vest and the Eas@. Forced ~ poli4ical consider- . ations to strengthen its economic ties wifia the Soviet Unions and Eastern Europe, Czechoslewakia is nonetheless dependent ups wfth the Nest to rnainta~in presenf~ inclust~ial levels and to supply tine ~rn~.nufactured goods de~naa~ded ~- the East. `The Czech?slo~-Sor$.et fire ~e~.r ag?~reement co~gaaded ~ July l94? is desig~aed to accelerate the eastward orientati~ of the Czechoslovak econaoffiy. Under this agreerraent, the S~rriet iTa~ion weed to place enders over a five ~e~r period for such Czechoslovak products as rails, locoffiotives, oil pipelines, machine tools, sagas, shoes, sugar mill ~d shoe factory slachiuergt, and electrical equip - anent. Ia return, CzechoslovaYeia is to receive Soviet iron ore, mansganese, chrome, wool, cotton, a~ad agricultharal products. l[n theory, the agreement pr?~des f?r loa~g-rase security as ag-s.f8st ? the im~aediate advantages of ~testeran aid, In practice, however, an ianportan'~ consideratiann milYtates ag~.ia~st the fulfillmentt of this aiffi. PYeither the USSR near the other Eastern Europeam~ cesuntries with whom Czechoslovakia has economic agreeffiea~ts are abfe to supply the raw ~.terials and speci~.lized ~chine~p which are ineiispemsable to the successful operation of Czechosla~vak industry. Primarily T~cause flee Czechoslo~k econotsy can its raw ~riais only from the west, 66oJo og the cc~atstry's total trade dorm tree farst seven months of 147 was with the i~iesteraQ natio~as and onEy lIIoJo with tine Easter European ~$ions. Czechoslo~rakia.'s leading customers were Switzerland,, Sweden, the lvetherlaaczds, ~elgiuxn, a~td Yugoslavia. ~~: ,chief Czech~lo~k soces of supply vrere the US, tt~e tT~, Switzerland, Swedes, Belgium, and the I~'etherlaaads. Czechoslovak trade with the l3SS~t was relati~ly usiaa~portannt, fi C z~Fnoslovakia is to maintain its present high s'.ndard ~ ~,i and industrial production, it must convince the k~'emliBa that, unless trade with the.. West is continued, economic c?liaps~ will result and the flow of Czechoslova& manufactured goods to fire IT~SR will cease. -4~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 IMP Y~ICATIO]NS OF ~iE SI'I'IT.ATYOIoT IN KASHMIR Current developments in the Indisrt State of Kashmir co~..sLitutie a critically dangerous tF~eat to the already strained . r8latior~s between the Dominions of Pakistan artd India, The recent revolt agai~ast the Mahara$ah of Kashmir, the Hindu leader of this p~edomi~ntly Moslem State, was acCoYnpanied by an invasion of several thousand tribesmen from Pakis~.n's gTorth Nest Fr?ntler Province, follov~ed by the tentati4e accession of Kashmir ~ the Dominion of India and the proynpt dispatch of Indian Sikh troops to restore order in the State. Both the Dovernment of Pakistani and 'the fanatical Moslem tribesmen of the North't~est Frontier Province vi~v the accession oaf Kashini~ to India as a betrayal of the State's Moslems (about 84% of the papulation) and as a serious blo~- to the interests of Pakistan generally. Actual warfare between the two dominions may be set off . K Pakistan sends troops into Kashmir (on the ground that oa~ly, by such action cars the Moslems in I~shmir be protected) or if addition- al large numbers of frontfer tribesffien fulfill their threat to invade the State. In any case, ft is expected that the events which have already taken place will so seriously intensify communal bitterness that further massacres may occur which, if su#ficiently widespread, could lead to the collapse of all government au~aority in both do- mfnio~is. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ennZ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ii).Y ~~ ~ ~Yb~A p C ~N~E~TS P ~.ges_ ? o n o o? o 0 0 0 o a o 0 0 0 0? o 0 0 0 o r ~~~>C ~~'^~ ? . e 4 ? O e e U O C O O ~~ . d ? . ? P ) O R ? ? ? O O ? O 1 ~ J. 41 Low qC~ o~a,~~.~Yy,~~ g~~p ~o$s~eg~~?.~o~~ya ~o US Sid 011 ~~LSd{i ,R,~ V~ LS`I~MG o ? ? p c ? ? a e < ? ? e ? e w ? o ? o ~. I~rfllcagio~s ~~ ~ ~~en~~ ~l~~~flor~s ... ? .. e e ? e ? 2 ~ooie~ T~oli~f~~.l ~o~~s lea ~e~ma~q . ? ? ? e ? ? . ? ? ? e 4 Sa~iet Su~~so~~r of 1~'R1'SC~~ l~am~~.lgon P1~,~ ? ? ? ? e e e 5 Cflafl~iese? i~Iflf,~~r ~.~~ ~:~o~oz~l~ I3~velop~ea~t e ? e e ? 6 P~?os~e~j~~l~~ C~so~ ~'~~a~~~ ~~ae~~;+~~~s a~ ~6~??~+~~~~v~ C~~~u+~g +~+ . o? n .. e w e e a e a e o e o fl C?rn~ne~ls~ Ql~~e~~a~es ~~. Ck211~ ? ? n ? ? n 'a ? ? w e ? . e 10 ~~'gC'EA$~YYe I~i?~~~?es4s ~8 US Mall~a.~ .l4 xd w e e a c e? e e N0 GRANGE in Cla3s. ~ .~ DECLASSIFIT'D Mass. C3A:~~~D TO ~ ? TS S C D A ;-.emo , 4 Apr 77 Auth ~ DDA ::?G. 77 /176: Date : 7i ~~BY ? .~ TAF~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Y TOP SECRET T~E~T~3S I~f ~P,IE~` GENE.E~.~,L~ Ides?tzati~~ns het~c~een the Is~w G~tantries arttt F3S~bTI~ big?nai ~.tath?rities ~~er the use ?? fshe shine ~o~ts ha.~e been suspended in the ?a ce ~a? ia~cre~.~in~ etch and ~eA~ian ?~~?~iti?n to the $.T s-U~ ~?siti~n see pie ?1~0 "~hiA~ ~~?ahs and k~e A.~?a.~ ~~?ess ~~~ti~~e theia~ ~a~,~s a~~.inst the A.T~S~ ?~ pa.~=titic~aa pAan and the ~S ??~ s~Iaia?r~n~ the' pYan, the ~x~~.~ G~~rern~r~ts are $cs1A?win~ a p~Aic~ ~? ~"wateltn?t~ wai~ng ~~ in the e~pec~n that the pAan wiAA ~e de?eated in the STN Genr~~?~.A ~ssetaA~. 'I?A~ ~31~, which a?~a~ed s~a~e time a~~a that it w?saAd aa~st ass~a~ne res,~~a~nsi~iFat~ fir exai'~rcirep partiti?n, nB~.~ k~e expected tc~ e~gedit~ its wathdr~.wal fr?~ Palestine i? I,~t1G~ accept pa~?ti~i?I'!. Yf n? decxs~?n &~ ~eaehed at dais ssssac~n f~? LJ~tG~, ttae iTI~ set a de?inite d~.te ??~ ~~ithdr~.w~.~. Within the new ei~?~feen rn?nths~arad, as in I~.di~., atteaaapt d?~~?an~ the hatereening period ~~ pe~?- tae Arsbs and e dews tea accept s~~ne sort ?? settAea~ent. Of?ers ~? a~~ed sa~~~t t? the I~ac~i ~~r~~r a~ad ?the~? .~~?ab . armies tez pr~:~en~ a ,~rtitis~n ~? PaAesth~e have bee~a a~re~d upon at an F~?a~i tri~a.A ~?~ereaace, ~cep~esentiAa~ I.r~.~bs ~4A,~D~4 n?~ads. ~'hr~ must si~i?it as,pects ea? the c~nfex~ence are th~.te ~l} e i~~.s~erahAe ch~??r~ic ant~,~?~E.:IYBS betweeaa the vari?tas gibes have been s~n~agner~ed faa the ?ac~ ~-? the ~?~~?n dander in Palestines ~2~ the ~~dish tribes are wiAlin~ tee associate themssAwes with an es- sentiaYl~ Arab issuer and ~~) Prue minister Sakeh Jabr is ~e hiding ?~rce ~ehinai traa~ whole m?~e~raente I? the Iraqi ~~?erra~ent pan retain c?~t7~o~ ?? this ~l0~'0&3~d~H3~, ~1ie Governaa~eaat w~AT ~daEle at its dis~saA ??r ~ssiASAe ~.cti?a~ i~ PaAestine a ?~r~iaa~ale ??rce a? ?aa~ati~ ?i~hters, ~i carn~ai~n tc~ ~~e more active aid to the Greek g_taerriA~,s is aande~? wad in S~.teAAite c?~a~ies. The PC,~~aaaians are hoAd~g ~~Aic ralAies ~n behaA? ?? the g?aaerrilAas, aaad recent reports indicate that the SatelAite states haee secretly agreed fat s. gneeting held iaa ,east at ~led~ that Albania, ~uAgaria9 arnd Yosia~a-ia sh?uld ?oran ar~aed gr?ups TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET a~xd place thew at e disp?s~,g ~~ the a~~&?~"~'itB~i~'a$1~ ~~~ ?f Free ~~?~~~~.`D 'these ~~?~aed and the ~Q~e~?c~?atic ~.rzny~n mill ~?ep?rte~.y be directed ~y ~. ~i~ee~ sta~~ ~~ S?~~iet and Satellite ?~facers t~der the asp~?euidea~cyta ?~ ~d~i~?al R?dian?~, the ~~rmer S~~~yiet A~taass~.d~r tw ~~??~:ece. ~~sc?a~te~t a a ~'~e~xeh ~o~,~ is s ~,et t~eta.cs at the recent z~'Va.~?sa~ C~nfere~ce has led certain ~.ea~k~ers t? ~hxeatear tc auit the party. ~?he French ~c~nx~tan~sts mere dis? af~r~cted by the refusal ?~ the ~rex~aliF.~9s delegates t? c~;nside~? the nati?a~al i~~:erests ?f the ~~?~nch Party. '4[~S~'ER.I1 E~~~PE T_he F'~?ea~~h.r.~~aa~i~~.R eie~ti?~s ~~ ~9 het?be~?, ~Sy ~?~~t~r~-~ i~~.g the sing ~~ A?pular s~pp~~?t t? cxtre~~i~t gr~.pings, ~~ave un.der~ x~i~~ed the pr~sitf.?~ ?~ the ~.a~~sadie~ ~~~e~~~e~t ~~. ~ a~?der t? cr~nsc~lid~.te ~~rther tineastern Zone ~~ Cer?~, the USSR, h~.s sp~~s~~ed t~~? ~e~ pvliti~s.i ?~re~ents a~ad h~,s ar~erged t~~ moderate pa~litical p~.rti~s see page 4}. ?I'~e anne~a~ce~ze~-t ~f the ~er.ant d~.s~aantl~,~, list has pr~d~ced Tess vi?lent reaction in Germany tk~~,n was aa~ticipated, th4 acttt~~a has t-e~n generally cc~ndeed the V~este~?n 7~es. I~1? st~?ilkes ,~~? dis?~?de~?s have: aecu~?a?ed aid these has b~e~a~ s?~ae evidence ?? ~?pa~lar re~.ief at "tea?~3s~g the ~?~?st.~e ~?~ne px?ess. and radi? eaf the Soviet ~?ne claa~?ged that the t~estern Allies desi~?ed t? rain and enslave ~eranany, but the tane ~~ these claa~?g~;s was ccmpa~?atively mild, appare~atly because the ~,TSSR hypes th~.t the resumpti?~ ?f disgna,.ntliangs ~iYb ~?~:suPt ~ resugnptacn ~~ reparations deliveries, baited a year ag?. ~r~p?sals f~~? a cs~~exen~ce of ~e~?~an iVlinister Presidents pri?r t? the L?~adon C~?~I meetg nay have ~aeen S?viet-~spi~?ed. .~.lth?ugh the px??p~sed c?nference is pa~~?p?~rtedly intea~ded t~ Pre vent an ~ east-~~est split h~ Ge;~a~a~$~, its p~a~p~se ~r?~ld p~ c~~ahiy a1s? lbe t? ena,~l~ the USSP. t? present the CF'IVY. with a Germaaa plea f?r unity. Such a plea ~v?~~d p~?ese~et the LfSSR. Frith an c~pp~rtunity ~?~ urging an early f?ra~ati?as, ?n its te~r~s, ?f a (aerman ~ceiatral administrati?n. TOP SECRET. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~-~~ s~~~~ss e~~ ~ ~J~ e~o~?~~~ a~~~~~~~ ~.~ ~~ ~~sa~~d ~~w~~s ~ ~ ~~~se ~~ 1~~~da~ ~~ ~ ~~m~ ~~~~ $3~ ~a~~?~a~ ~~~g ~s ~~s~ ~~ ~~ s~~si~~d. `~~~ ~~~a~ ~~~~~~am~~~ was ~~~~~d ~~ ~a~~~dan~~ ~ issue--~~~r~~ ~~~~~~i i~~~~~~ d~~r~.~~ ~s ~~.~.i~~ps,~~d?@~~a ?~de~? ~~ ~~p~s,s~ ids e;~emis~s ~~rh~a ~~~~~ ~a ~~sfip?a~g ~~.~is~~agi~a~i~a~ ~~ ~~~ ~.~??n s,~d s~eei 6aad~s~:~~. ~~ssa~e ~~ ~~~~ hili ~~~ ~al~e ~~ssihbe ~~ae e~s,~~e~a~ ~ ~, s~:eei ~~~.i~~a~i~~? ~iiA ~~~ the ~~~ cax ate ~~ese~~ ~a.~Fgae~at ~~` ~~50}~ ~~s i~~~~du~~i~s~ ~~ his die ~~ca~ides an i~adf~~.~i?~. ~c~~h c~~ ~.~~~?~~.~~ i~it~eY~~e aid o~ .~~i~ae ~inis~e~ ~E~~es c?~~e~a~ ~~~? the a~.~i ~~ ~~.~ ~,a~c~r ~a~~. E~~TE~~ ~tl~t~PE '~'~~~ de~isic~~a ~~ s~~~~~?~.e ~iJ~1'5~6~~~~.~~ ~e~~? g.~~ ~~..~~~~~~.?~ ~r~ Paies~ine ~~,s ~~~'~ahR~ cxes$~ed ~~i~ax?iI~ ~? ~~ea~e %~s~ab~ifl~ ia~ ~e z~iddie fast ~sec~ ~~~~ 5). i~i~D~?~e ~re~ie~ ~~ ~~~~.~a~?~.~., i~el~des s~g~e~~~.?a~.~haf~ (~~ a,r~ ~~s~~~~ ~~) ~~ .~.~ ~~,'~~? iaeen ~.~~?i~~eci head ?~ ~. deie~atii~n ~~ ~e~~~'a~e ~. ?~s~~i~i~ai-e~~~~~ai~ i~ea~ ~~ ~?~~; ?~ ~~~ he ma~~e ~?eii~c~~ashi~g e 7~~i~;a~=ia~ ~~er~ie~s~~ip ~,~ ~~rde~ ~e~ de~~~~* ~?~~ ~~~ ~~ in~e~?~s.~ic~~ai ~~s~~~x:~~~~s~p T~~ ~ss~~~l~~ ~~~~ ~~~i~~??~ ~~.~ ~~~.~~?~~~~~ f~ae ~~e~ie~shi~ a~~es.~s ~~~ i~P~elg~ be~a~se ~ ~~re~isn ~~?3~ahiy s~e~~ide~s ~~~ ~~ca ~se~~i ~? alIl?~v hixn ~?~ ~:~ai~ i~ ~ui~ia ~~ a.ha~.e ~?~.a~~a~is~ ~?e~nr~e is ~i~~i~ e~.i~e~~hed ~~~; Ct~~r~~anas~ ~Ia~s ~? ~.~?iish ~e ~?~.a.~?~hy its E~u~nania. ap~eaa ~? be ~?ea~~aia~ ~. c~fal s~~eo E~-~~ ~~.~?1, ~rh~ is ~eai~.~ig ~~- t~~ated ~? ~Se c?~rese~oa~di~g ~~~ ~u~s.~ia~ ~t~mmut~is~, ~.~~a~en~l~ has been almtas~ ~?~vi~a~ed ~a~ he sF~?~Id ~~~~~ f? ~u~I~.~est? (C~.~r~i ?b~ia~ed ~e~rniss~oa~ ~? ~~~~~ ~~~a.i ~ ea~Ig~ O~~~be~? ?~ ~ e~~?ess ~~de~rs~andi Eha~ he :v~?a~1d ~?k n~~~i~. himself ~~~k~e used by .~ iISS~ as ~. ~.?~~ a~ai~st t~~ s?r~~Ndi~haeln~ ?TD~e C~r~rnuanis~ s~a~e ~?~ ~.~pea~s ~? Leo ~~) ~~ ax~a~~e ~+~:~? i~i~hael's acce~.~a~s~ ~f. a~ ~~i~.~i~~ ~? .~~cra~ess Eli~ah~~h's ~rs~ddh~ ~~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET 2Q N~~e~~e~t; ~~j ~:? ~~ e~e~~ ~ ~e~n ~? R,u~a~~; aid (~) ~o a~~~.n~e a~s~ ~~~?~'~ ~e~ 5~~~ ~ pin w~~~d f~.~~~~fr~~ a ab?~~~-~~ ~f e ~?.~~~ &~e~~se~~g~~~~ w?~~~~ ~e~p/~e~.~~r~~~? d~~c~e~~~ .~a.e as?re ~~~~~ 19~~~.elc TVA?~'e~~e~', a itig~.~a~u 8a~ ffia~ ~ p~~~?ned l1~~:$~ ~~~~~'~ ~e~~n, s~~e ~~e 1~.~~e~.w~n~d ~~.~e ~? ~?~~an~~~z a~a~ e ~~n~~~~~~n ?~ ~~~. old ~?~~~~~al ~fll~~nen~ ~t~~~en~ ~.~~e~~~ ~~ ~I~e ~~~~~h ~?~e~n~e~t~ d~ pe~~? ced w~~~a e~?~a?~~~ ~fen~e~ a s~.~:e rna~ ~e de~~ed ~? ~?~es~l~ ~e~ ~e~~~e~ ~~a~o ~ e ~~~~~ wa?e ?~ a~~e~ ~~n~e ~~e e~e~~ ~~~~~ ~~ ~~.~~~.~~?, ~~~~~: ~.pp~efl~~~ded were e~~h~:~ ~~~e~~en~ ~-f~c~.~s ~~~~~~ed w~ ~~?~.~e ?~ ~~l~~afl ~'ela~~~ ?~~ a ~'e~~ ~~ ~e~?~? f~~e~d~~ ~? a ~S ~.nd ~ ~~~. E.m~~,~sde~, DEAR. EASE-t~.~?R~~ Tie a~.~~~~ ~?n~~~s ~~~e b~ wh~~~ tae ~~an a~~~s x ~~ ~e~~d the S?~ae~ ?~1 ~~~?~~.~ ~ef~e~t~ ~ s~en~en ?~ ~~.~ ~ a~e~e~ ~~i:n?~ ~? ~e~~~~ ~?~fe~ ~~?e~~u~eo AA~~~h ~e~e~~$?s~ ~ ate ~a ~?~~~.A way an~:~.c?~~ad, e ~?~e (AQ~, ~? ~) was u~ee~~:?~y de~g~~~e ~ ~c~w ?~ S?~T'~e~, e~~?~?~ a~ ~~~~~.~.?n and ~f tae ~~r ~~~~~~~a~. f~~~?~~?~ w~~~~ de~reic~~ed ~~~en~~ ~eeen a ~p~~~~~?~g d~;~~?~ie~ .d ~~~r~ale~ ,~.~e A~ p~?e.~~~~n~. ~easu~e~ ~~ ee~c~~ S?~e~ a~e~~ ~? ~~ea~e dz~~?~~,n~e~ w~s~s~a n~ e ~.?~,nin G~e~rea~sen~ ~s~.~ ~e~~~ed ~~~ ~?~ ne~.~ a S?~.e~ ba~?~e~ and .s a~re~~ed, ?r ~e~?ved ~~~?~ a nee p~~~~e~s ~e?e~~l ~~~a~ad ~e~~?~..~ ~~~~ed bed S?~e~ ~~~~?~~e~~o ~- ~ed~~~i?n &~ I~Oe??0 men ~,~ ~:~.~h ~.~~ed ~?~~ea w~ ~e e~~~ed d~a~ ~ w~n~e~ ~.?ne. b~. ~'~e~?~ ~~~~~~?n ~? ~'e~~~se ?~ cl~.~~ ~~ ~.~ned ~~~s~~fi~a ~ h~'~~n~e~ and ~?~~s~~~~ cafl3~ ~e new glass ~fl. ~~~~~ ~~e ~~na~~ia~ sa~n~, h~e~e~, wR1 n~~ ~e ~rea~, less an~i.e~ ~.~~ ~~ released ~n l~.~ch t~ihen e near ~?ns~~~, aye ~alledo ~. ~.~ e~en~; a subs,n~~.l ~edu~~l?n ~c~ld be e~~e~~~d In a ~.~~~a~p~i~.~l?~ ~~~ n~.~l~nal defeeo TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET EAR E~.S~ ~~~~e~r~~ ~:~~ ~, ~.~~ tae ~~e~~e~,~ ~~s ~ ~~ ~~~..~~e ~~ ~~~~~~ ~~ES' q E~, EE ~+~~ ~E~.E ;~e~.~~~~~ ~~~~ ~~ ~:*~~e~~~a~iu~~~ ~a~si?r2~~~ ~~~~~ ~c~ ~ ~~ ~ ~~~~~~~~~~ ~~~~ ~~~~ ~.4~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET Ak~'T~~I~ES TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET LC~~~>' ~~~3~'~`R~ ~~P~~l~l~~a '~~.? ~3S ~2'.Ai~I~ OId lt.I~lliTE F~~I3,~' IS~IJE ~9eg~tiatie~s ~et~~ee~ the i1~~ C~tg ies a~~i ~3~-i3~ ~iz~~ai auth?~?itfies ffe~ the u 9e ct ~~tcY~ a~~z r~elgi p?a~ts ~~ ~JS s~aip~ie~ts #? ~~~~~~ ~e~~a~y have beep s~spe~e~e~ ~ the face ?? ~. ~a~?ke~ sti~ge~~g the etch a~~ ~elgEa~ p~siti. ~?he e~ig~al ~e~~ sta~d~g ~eache~ at the ~~.g~e $.~ J~11 4~~'~ ?~.~.le~ t~ receive the aplsr+~val ~~ the 1.75 ?Evc~p~.ti?nal a~thc~~rity. l~ece~$ly iTS?U~ reprem se~ta'~i~es pr~se~te ~e~ ~~?pc~sals which ~ere~ less ~a~?~?a~ie terms. Bch a~ei ~?~l~na~ ~eg?~tiat?~ s ha~~e re~se~ t? ~kscus~ the ~e~ preposaRs a~~ hake e~e~ ~~~ra weir agre~ar~~r~t t? the ~~'~ga.l tae `~e~ G~. ?I't~xs actic~ ~~es ~a~t ~gcate that the resa~~ptica~ ?~ the '~~ a~iti~z~a~ rcle ?~ ~As~~~~ ~ctry ?rt as tine gateway f?r Ithi~ae t~?a~?ic ha: become less esse~tia.l. Ora ire cc~t~?~,ry, this ele~e~t ?~ reco~stra~ct~?~ co~t~~e~ to be a raj?~ objective o? ~a~tch a~~ ~elgia~ ~ Il?~eve~?, tk~e ~a~ ~o~'~ries appaa?e~tly believe that delay ~gll i~ap~ove them b~.rga~a~g ~?s~,ti?~. ~?th curies are ~?~iac~e~t that a serious crasis ~ ~er~aa~ t~?a~sportation mill _ soap co~p~l the bi~o~al auth?ritis~s '~~ ~ga~e use ?~ the Lour ~o~~~try ?rts. ~~~e~~hile, both countries are eecte~ to c?~at~~.e thei~? e~~?rts tsa ~~ sy~pat.F~y ~ro~ other European ccu~tries by ~~ph~.? si~r~g the ~co~sistei~cy trey see ~ tae ~S desire that the E~?pe~ eco~~o~zy be ?~a~ga~i~e~ ~~, ~, b~?oad i~fernati?~al basis while them o eco~o~ic reco~str~actio~ ia~ owe i~p~r~t aspect is delayed be~aus~ bi~e~~al oc~;upatio~ authorities a~?e p~re?~cca~pied soleby with prct~ctg the big?u~.l ~?g ei e~chamge p?sitio~. it is n?~ rely that: ~elgiu aid' the ~etherla~as, I~av~~ made verbal dipl?~atic rep~?ese~ta#EO~s t? the STS ~he~ the I~ag~e agree~e~t was r~~ected by the bi~eua~. ~,uthc~rities, ~il~. ~o~ take amore fo~?a~al steps ~ the h?p~ ~~ obta~i~g s~.t:~s~actio~ at the g?~rer~a~e~tal level. -1 - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~F~EICATlG1~S O~? T ~'I~,E~TC~~ El~CTIGF~S `the ~'~?~~~~ nxauraicipa~.l e~~cti~~~ of ~9 4~ctc~ber ~~.?~ under- ffiined the positi?~n of the ~~.rn~.dier Gove~rn~.ent and may co~?re-~ ~po~di~~~y ~~~~ ~~~ ~.bility t~ ~?~~ with ~?~~~~~~~ ~~?~?mic prc~bleans and Eur?ope~.aa recover3~. ~~,~ resealt has been ~. ~~.rked increase in politic~,b ~en~ion aid a c~~fused ~it~~.ti?~ iaa wh~ict~ events may move wish e~rearae r~.pidity. In what is perhaps ~. desperate effort to re- ta~ contr?l in tie haa~.ds of the ~.oderates, R~,dfer hay moved swifti~ mad vi~ora~usly t? resheffle hip Cabinet seed to grass e ~.~~.~~ upon the two le~.dia~~ erer~ist ~ro~pin~. l~s iaBdicated by preliaminary reigns, pop~.lar support has sw~a~ sh~.rgly .away fx?ffi the moderate cente~:?, which domiaa~.tes ~ Cab~,et and Assembly, toward. G~:ner~.l de Gaaal3eEs sally of tae ErencY~ people ~~,P~`). Two-thirds of ~ ~,~ ~ppea.r to have joined with the F~adic~..i Socialists ~d the Right t? ~i~e the RPM` about 44% of the p~spaalar vs~ye: Taae Co~~~ists mad the Socialists ha?~ s~b- held their own wi~a alsout 30%'agael ~~%?, respectively. The ignposin~ sh?w of strear~~th by ttae ~~.~~' ~ais~s fr?ffie ~l) French disiii~~ion with co~.liti?~ ~o?e~ment~ and the rigid party sys$ena; ~2) ~~owi~a~ anti-Comffiunism sti.~aul~.ted by reaction to the formation of the Coinfc~rm~ ~d {3) lie Gaea~le's popul~.r apg~eal. The defeat of the 1~~ and tFae eaaaer~ence of a sty?~~ ~nti- . Coaxa~caunist ~roug4aa~ has considerably increased political tensiosa t~arougho~t ~'ra..nce. ~a am eff?~ to meet the new situation, R,anaadier has revamped mad decreased the sire of hip Cabi~aet. ~?~ the first ti.aaae he has givea~ the Socialists, who still hold a balance of ~?wer, ~. clear n~~jority of the ministerial posts ~? out cf l3). Leftist Socialists and Gaullists have been elimi~aated t?~ dive R.aanadier amore effective coaatr?l. The defeated A1? now is faced with the . choice of reaaaainin~ iaa the Cabinet, and atteaaain~ t? preserve its ide~atity as a panty, or shifting its, saapport to ~e Gaulle. Y&'a S@&ch a situatio~a, the ability of the p~'esent Ranaadier , Cabinet to survive continues soaaaewhat problematical. ~e Gaulle apparently would prefer ~,ot to assua~ae power at this tiame, mad he c~ be expected to couzater Coa~anaunist efforts to force his Pre- anat~?e return to power . Ike Gaulle has indicated that he will not TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~~ ~. g~~~~~~~a~~ r~~~l ~~a~ ~~~~~~ ?~ ~~~ ~~e~~~~v~ ~~v~ ~~~~ ~9 ~a~ lead ~?a ~~~~~~ ~~ ~~~~a*~ ~~~~~ ~a~~g~~~;~ ~~: ~.~~ ~~~ ~~~ ~~~~a~.~:~, the ~~~~~s~~, ~~.~ ~~ a~~e ~? ~~~,~~~~., ?~~~ ~e~re~~.~. ~i~e~ ?~ a~;t~?~ are ?~a~~ ~? ~~~ C?~~a~~~~s: t~a~~ ~ ~~al~. ~d~ ~~~~ t~sl~~l~ a~~~ztg t? ~~af~'a t~~~~' ~ S?~~~.~~~~~ n cep ~~e~t ~~ p~~~~~A~a2~ ~~~~~a~e s~?~~~~~~ ~i~~ ~~ ~a~aib~. ca1R ~ ~~~~~al ~~~~~, ~~ ~?~~d ~~~~abl~ f~fiY f~~.I~, ~3?~~?~~~, suc~~ ~~m~~~~~, ~~ ~~~ ?r?d~~?s ?f ?s~?w, aye s~~?f~gi~~ ~'~~r~ch re~~~~a?p. J -3m TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET S~aVT'~T ~~+~~'~~~?~~ ~+J~OeS t~ ~E~~~~ Sa~i~e~ e~~~;~ft~ ~ca~ ~~~~~e~ ~;~n~ca~~a~.~~~.c~~: ~~ ~~e ~a~~e~x~ ~e~~~ ?~ ~e~~~,~~ ~~~ude ~e ~;~eati~~a~a ~~? ~. "~a~~.~r~a~ ~: ~ ?~a~~:~t~~~ ~~ve m ~.~~~ a~Et~ ~.:&~?LP~~N~d ~.~~~F'~s~?~,5~ d:~ '?kl~~.~~~i&T:a ~t? 1T'At~~T'~.t~e ~~F3fl a~~~?I: ~a~7~~e~F ~T~.e ~,e'~r~,? ca~g~.~~~ed l~a.~?~.~ ~?~'e~~e.~~ ~~~? i~~.~x~~~b ~'~on~~ 'y~ i~~.sed ~~ e ~~e~~a~~~~da~a ~?~~e~~ s~~ ~e~a~a~~.-~~s~~~.~ ~~ae~e~?a~~?~ ~,~d a~~a~e~~f~~~r ~~ de~~g~ed ~c~ ~r~Ya ~~.taa~.~.~~~, xn~~~- .a~~~~, ~de~~~s ~.~~d s~~.ea~~a~ des ~?~xae ~e~.~~ c~~ ~~~~~.~~ ra~~~e~~A Ct~~r.~u~t~~x~n ~~ ~"ear~aa~'ya Vt~e~.~W~~:ae~~ ~~g~~~~~ ~~~~: e ~lA~D~fl~i' Epee ~~:~~ia~~ ~~m~~eQ ~~'~~~q ~~~T~ ~.~ :~~.~~:~~~, ~:~~.~~e~~~~; aid S~~~d~~,~9 ~a~e if1~~~A a~.~e ~~ ~~~e ~e~~aa~f~~ Q~: e g~ e~p~ ~ ~ ~~~e~~e~~ deve~a ~u~f~~ie~~.~ ~~t ~e~.s?n ?f app ~~~aeal ~? Aa~ge ~u~~e~s o~ ~e~xx~a~~, i~~r~a~ ~~.~roge~.~r ~e~~~.~e ~~ae S~t~~e~?~p?~~~~ed Sfl~:~~.8~~~ ~.Tr~~~ Pay ~SE~~ a~ ~:~ae ~:h~.e~ ~.~~~?rae~a~ ~f S?~e~ ?~~~~~a~ ~?n~r?I a~ ~~e ~~a~~e~~ ~Q~ae, T~ ~?~~$ex~ e ~af:~?~a~~s~ ~~,~o~e~e~~ aid. ~,~e ~~.~~e~a~.g SEJD, ^dae ~SS~ a.~a~a~ei~~i~ seeks ~~ ~:~s:fne ~x?a~~~~ae~ ~~ tae ~~~~~k~~.~ ~e~e~;a~a~a~ rU~~?~ (~I~J~ ~.~d 'die ~~~ti~a~ ~e~~~~a~~~ ~~~,~~'~ ~~~'~ ~ ?~ a c?~~eg ~aa~ze. Se~~;~et ~a~~ ~~~es ~,~~-.ald ~!~ ~~:~~.ce e ~?~ri~~~~a~~~.e~~ec~~?~iat~~e ~eade~s~~~ ~~ tide ~er~e~a~e ~a~~~es ~,ad red~~;e ~n ~~~e~~..~a~~ ~ee~gs ~e ~~sfl ~?~es erg '~ese ~~a~~~es ~? ?~ae, ~h~~h ~~~~ ~~~ eat: e~~ ~, ~~.~g~ ~?'~'a ~ SEQ. ~ ~.dd~.~x~~z., ~~~e5e ~.~~~~s ~~e~Y?~ als~~s~ ~e~'~.~~1~ darr~age ~~e ~a~~?~.~.~ as~~a4 t~es~s e~f ~e ~es~e~~ ~~~7 ~.~d ~a~~ ~~ a~~a~~s~:~i~ ~aea~ ~as~e~~ Q~e ~e~a~rese~.-,~.~~c~x~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~e ~?~~~~t ~~~~~~~?~ ~~ t~~ ~SSA4, g~ ~~p~ t~~ SHOP a6~~aY'~~~gg~~A~tySp[~~}q+1~/~yQ~~e~~~t'p~~~O~~,~t~"~t~:~,P~~pq,/~~Q~~j}~~p~~.~~~~gq~et~~~ ~Q4y~~'~a~~e~p~~~~t~ ~?q v~9q~f~?~~?~t Cw~:.C.XL~~ dAG ZJ ~d'ErA~~ ~'fJ~~~W~ ltBN4i 86'B~NAOAA~ 15S ~i1.~~t A~~?7 ~1~4~~~ipAS C3~~i~C+bR, giHi1~~~ tie .A.~s .~~ r~~i~t~~. S~~~t ~~~~t~~es d ~,?~~~st ~d~ca~~~? ate t~~ ~.~~.~~ ~~~~~~ ~f . ~~~~ity ~ t~~ ~~~ ~F~~~?~~, S~~~a a ~~~~i~ ~;~~~~~t~~~ ~i~ ~~a~~~~~~~~ t~~ ~~~r~~~ ~ ~ ~S ~ i3~ ~a ~~~e~t~ ~~~~~~ ~~~ t~ tF~e ~~t ~~~ ~~~~~~t, ~~~~~g,~~~t~yy ~f ~.~. ~,~~.t t~~ ~~5~, t~ ~w~~~~ ~t~ ~~~~~~ f~~~~~~.t ~~e a~~a. ~~~ ~~t~~~$~~~~~t ~~ ~.~~~~d,~~~. ~~~~~~h ~t~t~9 ~~ tie ~~~~~q~~~~t ~~M ~~~r~~ a~ ~a~ffi~a~~~t~~~~~t~~~~.t.~~F s~~~~~~~~~a ~~~~a the n~.t~~ t~gg~~s~~~r~.~~ ~? ~~~~t+~y., `p'~~g~~ '~35~~g~~~~~~ ~~a~y ~~~aa~~~g fir ~~~ kA~~ iLS~.~.y E~ ea~~'.+?.3-~Y.~~~ d~Y~5.9.1t ~ ~. ~,STdP6.4~~ ~`ge X'S~a~~~~ ~~ jQ~~ R'~.'~,~~3~ X?~ 6-~~~.~t t~~~a~~~d ~. ~~ ~a.~'t~.t~t ~~ r~~ri? ~~~?~at~d.~.p t~a~ ~~~t~. ~ t? ~?~.~ ~~~~t~ceaa~ cif the ~ ~~~~: ~~ ~ ~c~z~~tp ~~~~ t~ ~~t ~~~ ~t~ e~~ ~t~te~ ~~ t~x~ s~p~?~t ~ ~~ ~~~~t ~?~~~~s, ~ sz~~t ~~~ S?~~2 ~~~~~~~t ~~ `a~~~~~~att ? ~~~~~~t~ ~~.~ ~~~? ~ ~~~~~a d~ tie a~'?~~~:: G~~te~~ ,~~~~~~~ t~ ~. ~?~~~~t~t~~ a~~a~~- ~~~d~~t ? ? A.~a~.e~~~a, ~,'g~~ S~~~t ~~a~~~~ ~g ~g~a~lpg^~~~~~~ g~,,~at ~. ~~~~~~ s~~p~,te}~,q e~~?p~ ,y ~~' ~~~ ~P~~j?~'a~9 s~`~~~?H~b `~~ ~Jz~~i~?~~6.C~ ~~Wt~aa'~.HN ~.~~~~.~ta~. ~ @.8~~. ~.lSB ~~~~68 ~~~~~~ ~~ ~. s~~tuf~~ ~~~~tt tcs ~S~-~~ ~~~~t~s. x"~c~~~~~~~, ~y ~~?~~~~Ip t4~~~~~e t~~t ~ ~?~~~t~~~ ~~ tt~at~~~~~~~~ ~~t~~.~p ?~~~? au~g~~~~ ~~ul~ ~~~~~~ ~ ~iSSR w~t~ . ~x~~~~P~t ?~~?~rt~- gy t~ ~la~~ ~ 8~.~~~te ~~x ~e~.~~d 5~~~~t ~~~s~a~~ ~~a ~~~d ~~ c~.~a~~ ?f t~~?~t~~ t~~~~ ~~t~~~t~~~ ~~t~n l~s~~ g~~9S?~~$ cuffs. m5e TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~~ ~f~ f~flfo `.~ ~~,afaa~~f ~flf ~f~~.?~ ~~~ ~ ~~ -~~ ~~~~ ~~aII, .?~ f~~~d ~f~ ~~flf ~~ ~ Ifffiff~d ~ ~r~ .~~~ A~'Fw'~~V'p+PS~AGc`*.~ ~3 ~i~~41L+?t4~vdiLBVrEAPi/v~ 6~ IDddbl8.8 A~1 $~fi8 EL~6d~ ~44~11'p~~tib mmf~~ y ~~ a~f~d ~~ f~`flfp ~f~ ~flf~~ ~.~~~o ~~ fin ?~~~ ~~+~~ pf~3 ~ ~.4f.I ~~~~ ~~~ ~J~ aid- ~~~~ w~~ ~ ~~a f~~~ k~ ~~ ffi~IIf ~~1~ f~ I~f~~ ~~~, ~.~92~ ~~~ ~~~~ ~?~ Is7S ~~~s~~~~ . ~epdp~~~~p9 ~~?~~~~~+~~~~y~f~~a~ ~~spR d ~ ~.yO- ~3ffi~ig,,~e~~~6p ~ ~r~^q~op?~{ ~~ad(~bW~~pa~~p~~g y8p8/6~5,'s~'~R'~a~re~A p 6~CKK~~Q''iNb~lk~3y~~~E~ ~ q,~Q ~ ,rq?~BaC~v~~~ ~?~,g?~VS~fVe E~liL~i~~c'~Y~37L7d9~~QQ.~y ~gL~K64Il7Sf~~+tll:Y9~N ~iqY ~q~~15 ~i61i,['9~0 /~m~e6~dy1g3~6L,llSk~~{~y~ A~~~~{f~Q(,~T4~y~gd~~~~Q~~q ~gv~A.Bpgi~~-p,{-~ IfFJ~e' ~&9G~11G~~~ ~ti ~~ ~tff'~~6lb~F~St19~Fr1~~~b~ 646ii7013 tl/:6ii.lJ ~~7~v~~b~D'~~ ~ ~~~~~ ~ ~ ffi c~~ly ~6~ ~ e ~~ffia~f~~~~ ~~ ~ ~~~f I~ ~t ~. ~ Il paw ~ '~ ci~A ef~~, ~e wflf, TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET a91W84~ V ti~IOB~?~~~GD ~ Sit{bJ~~ V^b41~V ~~8i db~. ~K. aY4g~{~I~/ ~~f1Q~ I~~10 ~lS~~! TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~PE~ ~ ~'RE1~C S~,TC~ESS SSE C~~~G~ ~~~~ ~h~a~h fhe ~u~~e~~ ~?~e~~~ ~f?et~e t~ ~?r~he ~d~- . eht ~pp~~.~s g? .~~ ~chte~e~ ~e~~.t~ Yi~t~ ~e~~~es, ~ ~~a- ~~t w~.~,l p~~~Y~ ~~~ ire s~~~essf~Y tai f?~~i ~ ~ie.~ ~e~~~li~ ~e~Yi~e ~'~~~~~ p~~s~e ~.~~ weaken the c~~~~Y ?~ter,? ~e~?e ~eYes in ?~~ has ~? a ~~ench E~~i~'e. Ali~z~.~~h ~'~enc~ ~tli~~~ a~~hh? ~~~ h?ldf e.ll p~.~l~~t~ ~~t Ynd~h~ ~~ ~. tni~n~ anal ~~~ c~afffiin~ i~ ~ c~.~~ai t~ ~? ~~~ ~ ~ ~. stn?~ ~e~~~n ~~r~a~Y~ tai ~rde~ ~ ~~?i~ ~ p~sst~tbff~ ~ ~1oT in~e~~~~~t?~~, ~.~.~?~~~ ~~e~a~h f?~~es~ ~~~~ ~ ed in ~ese ~.c~?ns h~.~ ~~~~ ~?~tf~~ ~~ ref?~~ aid ~Pne ~Yie~~.ffi Re~~lf~. ~?~~ A~?ses ~ ~ ~'~ench i ~~~: ~~) i? ~~ ?~~Yand ar- t~~~~ r~s ~~we~ ~teffia~ ~~~ China ~~ esi~.~l~slai~ ~?~ench c~~I a~, the n~~e h~~~hines+~ b?~~~~, ~2~ t~ w~a~en ~e re a s~~aa~~e ?f ~ ~te~~.~ ~.e~aYt~ ~~ i~ ?~ cap~a~i t~ Yeade~s, ~p ~r~~si ~~stt~:~ ai~is~~a e~ ifs affit~i~n ~~~ ege~t~ffie~a~ ~e4 s~~ces, ~.~~ bq `~$s~~~t i~ c? ~si~~.~te~a~ aid ~~~ farili- ~ies, and ~~) i?-~?~Y ~ Yiea~ ~e~~~Yi~, a ~esa~Y~, ~? net?~~~~ P~~e~~s f~~ stflfi~ant s~~~?ss ~ faYY ~ffenst~e ~.~?~ ffi~a~e~ Ya~~eYy ~~nse ~ e~~a ~~f$e~ add ~~ ~ie~ f?g~es w~Il ~?ns~~~+e ~h~~ ~.~ffia,~ifi?n ~~ .i~ri~Y white ~awi ~`~~~~~ f~r~e~s info ffi~n~.~~~s and di~~aY~ tterra~. ~~~ ~isY?~n~4i?r~ ?Y ?~te~a~ c?ffi~~ni~~.?i~n fa~~~i~ies wt2Y ~~a~ly ~?~ se~t~s~.~ ha~~e~ ~te~ ad~infis,~i?~ d Y~~~e~ ~~se e~- ha?e ~effi?~~ s~~a~~~ ~?t ~ ~ s4 p~a~ i~ abiYt~ ~~ ~~~, ?n a ~~eniYi~e~ fasts and f? e~~?~i~.A.~ eec~i?eY~ ~ r~iYt~.~g a~~~iies ~f ~.?~~~ a.~~ see V~e.~ ~r~~$s. _ the ~'~?~n~h e~~.ti?~ ,~ ~e ~tet- ~ G?~~~~~.~ w~Yd be wiYli ~? net?~~~.te ?~ ~~ench ~~~s ?~es ~ ~~enst ?f ~~ ha~~~d ~~~ ~~te~.p~ feY~ f?~ ~ ~~en~h by ffi~ ?f ~ P?.Ya~t?~ ~f n?~ihe Yn~~hi ~hsse f~eli ~~~ ~?t as~~~fa~~ s~4eYy w4 ~ ~flei~~~ ~ep~~Yt~ ~ wa~ald c~n~e even - if ~ ~Yiea~ Re~Yi~ sh~Id s~ffe~ ~~~?~ defeat.. ~?~~ ?f ~ p?Yi~g? gal f't~es ~~~nc~ ~y ~ ~'~~~~~ ?~ b~ natt~e ~~As ~ ~~~n~h-h~Yd ~.~~as as aYte~~i~e~ t?~~~sid~a~t ~~ ~ e ~tena Y3e~n~Yt~ cs~ c?~~an~Il ~~~~ ~~uY~r snp~~~t ~? wea~e~a She ~i'tet~ Republic by i~pi~t ~,~?~nt defects? f~??~ it, -$- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET -~- TOP SEORET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET a.~~~~?~~~~gr ~~ '~~~ ge~~.~ic ~? ~~x?~~.~a.~~ &~~y~a~a~ t~~ e~a~-rn~~~~a~~~- 'JV~e~y s~~~.~q ~f 1~ O~?b~~, ~~~ ~~. ~h~ ~~~.fl s~~ ~ ~~~~~~~~~ ~~~~~~i~~ ?~~~~~~~ ~p~, ~~~ ~~~,~ ~'~~~~~~~ ter. t?r ~du~r$~~ (~~~~h ~t~x?~ ?r~e~ee~ ~~~y ~5:~~ ~~.~st ~~ ~ ~~~. xnun~:rs Ix~.c~ ~~$urt~~~ ~? . six?~~ ~~~?~~ ~~ ~:~~ ~~~~~~~~.1 c~~~~~~~.~i~~ ~~~~~~ ~~ ~ .~, ~~~ ~~~ ce~~a~~ ~~ ~s? ~~L ~~~y. the ~~~~e~ were ?~~~~~~ ~~ ? ~,~~~~.~ ~~. ~_~~~ ~~~~~~~ ~~ ~.~~~~a~e $~~ ~~~~'~'~~~ ?~ ~y~~'~a&r^~.~.flQ{~~.~.~. ~'~J~6~~k~~i ~a~~~2 '~~~~.-~~,Fi~~~~pp&~$~~~.~Cy~O~. JEC.~~?~~ ~ ?~~~1' ~~~. ~e`~.~'~ ~~l.F.~o~'J ~.~~~~.b" ~~' ~` ~8~.'~~~i, ~?~t~~s'~~Pn?, ~Y~`?~~ @Wl~+~. a.~.~ ~~~,~ ~.~~~~~ ~srd ~ ~Fa~ ~a~?~ ~iae~~r~~ta~~ ~~ ~~ae ~~?r~a~~y c~~a- ~~~~~;~~~ S~e~a~~.~f~. ~~a~~~ ~~a~~~~ ~~~~~ ~ ~~~~~~.k~~&~Y~ ~a~A~ ~?~~~~~ ~a~~~ tie vax~?u~ d~ts?- ~~~ ~h~ ~?~~~~s ~~ ~~ee ~?~~qDs ~?~~ ~~ ~~~ self-~~P?~~~~T ~~a~~ia~~c Thy ~~san~~~ ~f ~ c~~..~ s~~~~ pla~~~ ~~~ ~?~~at~i~~~ in ~ ~~~?ng ~x?~~a~~~~. p?si~gas~a ~r~.~~~ ~:~~,~~~:~ ~ ~? ~~8~ ~~i~~~n TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Al1,GEPtTIY~t~ ~TTE1tESTS ~I US M1I~TAR'Y' A~'9 The Argentine Governgnent, by requesting arrangements for direct negotiations between its I~Iini ter of tsar and the US l~e- partment of the Army, has taken a further step toward obtaining benefits from the policy of cooperation it initiated at the Rio Con- ference (see ~Teekly Surramary of 2~ September, page 6). The pur- pose of the negotiations, according to the Argentines, is to ot~tain technical advice on the production of war materials and on other military problems. Such negotiations ~v?~ld presu~aably take tkHe form of, (1) the point staff conversations betv~een the US and other American -Republics in.1944 and 1345; or (2) the existing ~oiait US-Canadian, US-Brazilian, and US-Mexican commissions; or (3) the present arrangements between certain foreign governments and US government departments under the supervision of the lnter- departraeental Co3mxn.ittee on Scientific and Cultural Cooperation. From the ArgentinesE point of view, this would involve either the .opening of a new avenue of contact or giving new powers to their ffiilitary delegation on the Inter-American De#ense Board. The Argentines would probably attempt, in the course of the n+e~otiations, to put themselves on an even footing with Brazil and _ _ Mexico in receiving US yilitary Subsequently, they would seek to extend the discussions to such questions as: (1) the procurement of the latest US-manufactured military equipment and of US-furnished digs and machine tools with which the Argentine munitions industry could manufacture Fie~nisphere-standard equipment; (~) ArgentiYia s wish to have at least limited access to the results of current experi- rs~ents and steadies in the US and $o send students and specialists to advanced schools in the US; and (3) Argentinaes request for apre- c?nference understanding between the two countries on the military measures to be considered at Bogota in January 1948. -12- T ET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 - , :.. - n n f1erl~ecifierJ ~nrJ 4r~r~rrnierJ ~nr Rele~ee 7f1'14/f1R/7f1 (`14_Rf1D7S2_fl'IR'174f1f1'IQflflfl7flflfl'I_S2 o C?~T~~TT~ Pages TR~YV~D~ IA1 l~~l~~' ................................. ~. - iv ~.RTIGI~~ .. . ..........:..............1-Z ~o?iet ~~o~o~i~ Polio ie .~e~tria .. ' ................. i ?~'~e Coal S~~?ike ~ ~Ch~le ......... . ................ 2 NU C~,PIGE in C1asS. DECI,AS SI IrU S Q C~.A x~~c~.. ~ APr !7 I ,~: _ ..~ Ej. ; ~y/_..~.. ,. . .1Li:: Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET TRE~Y~S gPT ~RiE F ~ER~~:AI, ?~~?siti t? ~'~?~~~~ e~c?~iC ua~i with tie Saar ~ e~~~te~ fr? the ~JSS~ at a ~~ ~eetiu~ ?f the ~"~.~. Si~~e the ~~s~?~ ~~~~~, the ~JSSR has a~?i~~~i ~~~~ ~pp~sitiaa t? Fre~c~h piaus i~ the Saar, i~t the reeeut Saar eie~ti,`whieh ~.~.?e ~~~~ interpre~e~ f~??~i~~ ~i~ ~~.t~ F~~~, ..v~ ~estr?y tie S?~iet h?pe that ties S? ~~ubd. ?~ia~se the uui~a. The ~JSSR is ~~~cti~~ a ~i~Re~t ~~.ffi,i a~ai~st uui~, a ~erffi gress ?f ~e S?wiet ~;~~ as a ~re~arati?~ f?r Sc~?iet ?~sitia~~ is L~d~ t? "u~-.ageral dis~e~i~er~e~t. a s .~ The ~ste~~e ?f a?~ ai.riirae (~~`~'~ has ivee~ cam fir~e~ by ~ e~ ~ ?f mates ~etwee~ S~e~e~ a~ Xu~?sia~ria i~ ~?~a~?~i~ nth a~g ear agr~et which ~esi~ates a Swedish airi~e (Ai~A} auk JET as ?~er~,t?rs ?f ~ digi.~~atic courier ser~ce. ~'AT is ?ste~sibiy ~'u~~ia~~?w~ea, and it see~as ~~?abHe th~.t the ~TSSit a~a~~ Yu~~s~~,~ia, ~~ c~ti~u~ t? use ~iST.A the S~~ieta Yu~?sla~ ~,ir~i~~} ?u~h?ut Eastern Eur?pe, I epi?y jAT i~ eff?rts t~ e~en~ ~~e~?atis int? western Eur?~e. Thr~~h .this deice, the ~JS. ca?~ ~aeet the ~~~cti~s ?f a western P?~ae~s to ai~? a~reeffients ~~?lg S~~.etnc?ntr?Zied airii~tes. . i~a~~:ax~~ is atte~~~ t~ f?~ce a ~3S t? that US ~iii- tary c~ur~e~ ~EA'~S} aircr~.ft ?Ai~hts ~ust,~e c~di~:ical ~S clears antes f?~ an e~u~ number ?f flights acr?ss ~agS ~e Austria by the S~iet-i:Yau~ia~a ~?~n~nercial airline (ldlaz?~let). Tk~e EATS flights needed t? sui~~?rt the withdrawaA ~f ~JS ~~iry ~ersel within the 90eday perm fs~flA?wing flee signature ~ the Peace Treaty. iiu~agary's actic~a is therefore indi~.ti~e ?f the -siiffiities wi~ich will be enctered if the ~sgended flS~iiua~ga~?ian cif air neg~iatioas are resuffied. . ~ESTER~ E ?~E The current str~es. iia Paris, mmfsw b~~the ~?~ffiunists, are ~iY~~y t? bring about a reactis~ agai~tist .the C~~~unists ~ the ~u&aici electi?ns. ~?11?wing the pattern ?f cast .spring$s strides, vi_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET the ~?aanist~~~tr?lfled C~~ ~ the C~~~u~aist ~$~ decided tc supg~?~rt the strides ?a~fly whea~ fey s~.av that the strikes wild suc= ceed. ~~eca?~~e a sires are causing great inc? t? the p~paaiati?~. ?f saris and because Eras fl~.heled then.-. as a ecp?li$ica.fl ffi?ve89 t~ -the e~te ?~ eflec$i~s, i~: is el~p~cted ghat 8Y1~FDp l?wei~ middle?c4ass ~?tes i~ saris wiflfl ~e fl?st tc~ ties C?ffi~aanists. the resits ?f tF.~e recent ~.~~e eflecticrs ~idicate ~, streng~he~- it~g ?f the p~pul~.r ~upp~rt ?f the ~e Casperi ~ea~ern~~t. Alth~gh the leftist Pe?gle~s lac p?lfled. ~. dew na?re ~.~~ ~~tes did De Gasperi's Christian ~exnaacratsy ties flatte~? wt~n as ~~~ seats in the City Cdcil and sI~?wed ~ fl3~o ~.~ imm p?pui.~ f?iR?wi~~ i~st ~. ~ 3?~ss f?~? the ~1?cs as c~napared with ~ yeaa~ age. with ~7 ~f tine ~0 se~.~s ire.-the City C?cil, the Christie Deffi~crats n~aust, hcwe~rer, ecaatin~ae t~ refly E~Ii ri~~Z~tist ~uppt~rit t? attaiaa ~ ~a~?rii:y. A c?nxbinam ?f the righ$ist gaarties9 which l?st ?~et 12~ in ~pufl~ baflfl?ts, aid the, Ch~ristfaa~ ~e~acrats wceald yfe~d a t?tal cff 45 seats, a w?rP~-~ ~g ,j?r:~ty. Fie ~a~fl ffia~ ~ec~~~i~e the Italia Civet as the res~flt ?f his recent success in the R~ffie eflecti?a~s and ~f the etffect ~f the C?ffiiYaf?r~n a~ce~ent ?n the ffi~de~ate lLeftistsq ~'he app?~int~ went new ?f a ~ext~rate S?cialist t~s ec~c~sic ~infstry wild ~? crease Ike GasperiDs prestige and w~.ld st~e~ngth~:n a capacity ?f his ~~rsr~a~eht as an antimC?nr~unist f?rce, with~aut gig the ap~. pear~ce ?f iais hang yieflded to leftist pressure. EASE Ei.?~E .rren$ s?~iet ec?~ic ~,cti~ities in Austria are desired t? f?rce that ccruntry int? tine Satellite ?rbit and, ~ unchecked, cast result iai S?~iet ~pc~liticafl dc~ain.~,ti~ withh~ sia~ ffitias after ~ Auastrian .treaty ~co~es effective {see page l~. .~ E.AS~~~ERICA It ~.p~ears increas~~~lroh that the ~~.Resti~ae writ pfla~a wiflfl n?t ? the necessary tw?-thirds ana~crity in the tTId mineral Assely despite tiS and ITS.SI3 laackin~. :~.rgentina aid Ct~a TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET have declared the~sel~e~A ag~.~st partiti~, thereby raise t? 16 the number ?~ ~~~?sing states. ~re~~er, it i~ reported th~.t e l~ethes~~.ands, ~elgiu~, ahd p~ss~.bly twrQ ?r three ~~re states (~.u~ernbt~rgs ~'ia~, and ~ug~sla~~.~ away ~?te ag~.nnst partiti.?~ ~.n~ th~.t s~ stags (the , ~~stra3i~., and fear l American states map abst~.~ o E~~, E,P~ST Tension h~ ~~ar~na be r~ ~urffi~,s and thr: wrens, a~- ethnic min?rii"~r ~.~ scup ?f tha~ee Rican pe?~ e, s reac e rlangera~us prrap?rti~ns~and ana.y r~s~t ~ arBned dashes ~.~~ e~ea~ ci~iA war ~ the year future. :wren fears ~f the numerically sa~perirsr ~ur~nans have been intensified since the war by she failure ~ the ~a~ens t~ secr,~e fr?~ the ritist~, tra whom they hears bee~a l?yal f?r a centur;~, aaiea~uate g~ar~tees fir the pr,~.~ tech?a1 ?f their rignt~ against ~ur~narsso The wren lea*i~afl tT~ai~ hopes t? ~btaa~ ' actiw~ ?~n behalf ?f tie ~~,~ ens befmre an ~tbreak ?c~rs. S~~ch an hacident anay take place after ~5 ~'?~ ?ez~ber, the deadlia~e fray the sh~~render ~:a all illegally-head arses, which the ~a.rens are ~?eluctant trn i:as~?n iaa because they fe~.r attack by the ~ur~ansm The transfer ?f ~ratish oath?rity t? ~chhe ~ca~ern? went ?f ~~arnaa e~.rA~. X945 wilt be an?ther in ~~Pen~ ~ur~an relati~s mad wii~ teat the new S?~es~es~ent~s capabiliities f?r ass~ffiing independea~ce. ST~~F~ I~IS~I~.E Tfl2e Zack e~f ccncerteci ef~~rt bilean C?ffi~s~ists hi the recent ' ccyal strike indica$es clearly that the strike was nc~~ desired by the leaders _?f inter~a~,tion~l C~n~xnaanis~a as a sh?wd?wn ha the western I~e~is~lae~?e, despite Presi~le~at G~alc~ Videla9s charges t? that effect (see page ~~. . ' ~$~azilas decision t? break relati~as with the USSR inay ha?e been tinned t~ prepare U'S public ?pi~i?~a, which has ~. str?ng influence cn ~~a~iflian p~lic~r, f?r an all-cwt attack ~ the ~ra~ilian C?~~naaaeists. The recent Fcareign Mice instratcti~ t? the Brazilian tTI3 Aelegati~ t? supp?rt ~lae STS ~ all issa~es n~,y flea?e bcen sianilarBy iii -. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ti~ec~. .~ f~~khea~ ~ti~fe^ag ?f the ~~a~ili~ ~?~e~~e~t's a'~tita~de ~n2~d al~ea~~g ~ho~ed it~e~ i~ the tie ~f its p~~e~t ag~ia~st a ~eee~t a~~.~I~ ~ I~re~ide~t ~a~tra its ~ Se~~iet ia~es~. the x~.~~r~ d?~~~ti~ i~~e is ~hethe~ thy: ~~~ee~at, resg?t~e~y ~~~ i~c~easi~g array press?e in recent x~c~ath~ t? tie ~~.stgc ceases i.~st the ~?~~istss . fgn~re ~~~t~g ~~ytituti?~a~. ga~tees ~d nza~e ~~~ ease ~~ the police state teeh~l~~xes ~ahirh, acs?rd~ng t? _ the ara~ny, care ~~~~ ~aee~ the chaiienge of a ctrp"~ dynamic ~~ gr?g ~c~~~~ist ~?~e~ent. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET AI~TYCLES TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ". Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET SiJ'VXET ECOl~O1ViIC POLIO IFS AUSTRIA Current Soviet intentions of forcinv Austria into the Satel- lite orbit thro~.zgh economic dQra2fnation ,have been made clear by the demands of fthe Soviet delegate at the meetings of the Allied Treaty Commission (ATC) during the past five months. The USSR has already implemented some of its objectives by: (Y) integrating properties seized by the USSR. into the economy of the Satellite states; (2) obstructing Austrian industrial recovery and? iiraiting Austrian trade with the West (particularly with Germaay); and (3) disregarding Austrian laws affecting wagos, prices, distribu- tion, exports and imports, taxes, amd decisions concerning the utilizatfon of fuel and power. German asset in eastern Austria claimed by the USSR in the ATC ,are valued at more than $?00 million and include half of the industry in eastern Austria, all oil reserves, and three-fourths of the oil-refining capacity and of Danube shipping. Besides its claims for assets, the USSR has also demanded that Austria pay for relief supplies and services delivered since the liberation, in addition to 600 million Austrian schillings i8 exchange for the German reichsmarks which were turned over to the Austriaa.Gov- erritnent by ~e Soviet Axmy. The USSR also supports a Yugoslav claim far $1 ~0 million in reparations from Austria, Unless an Austac?ian treaty succeeds in materially reducing Soviet demands and in modifying the present extraterritorial status of Soviet monopolies, the USSR will probably be able to force Austria into the Satellite economic orbit within six nnonths after a treaty becoffies effective. Loss of political .independence will inevitably follow economic dependence on the USSR. _l_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ''~ ,Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'FRET 'I'mo ~?1~I~ STS ~ ~~"tI~ 13ecent events the ~a~rent ~htlean coal str~e teaad t? confirms the ea~?Iy esttraates ti~at ixaternati~a.~ ~?nzznun~st~ did net httend the d~~~;nte to precfpitate a raj?~ showd?, eiespite i~resid~nt ~o~.~alez V'tdeEa's cha~?ges to that ef~'ect see ~eei~q ~una~.arq of ~Q October, page ~~~). ~So sq~paiP~q strtites i"~.~e oca:urred $n the copper and ntt~ate indries, wi~ere the Co~~.u- nists, becaaase off. their c~t~?~ of the relent unfa~s, ~a.~ve a~.~- dtoulatedYq begin fn posliia~ to i~~g ~a~ffi a~sa~ce~: ~i~ws ~f tae etch and ~d?nesi~.ns c~sn~ernin~ an acceptabYe basis f?~ further net?tiaticns. Tlae ~'re~ier ?f the. ~d?nesi~.n ~tepubYic, ~:ir S~ar.f?edd~ap has declared t.t the ~in~~~.d~atf ~~ree~ent cast be the basis fear ~ts~e neg?ti~.t??d~s beca~s~ it ha.s i~eeaa ~ab~e~ated b~ Butch ~aYiita.~y a~a~Q~ressi?~" and by the Itch unilateral es.b~.ishent ~f a~t~n~- n~t~s areas: Acc~~?d~; t? Premier Sya~-if?edd~9 tIze R.ep~blic ndw c?~as~.ders itseYf fret ~sf ang~ cenzanit~n~nts a.s a ~e~t~er ?r ~. fu~re 'tTnited Smites cf a?nesia (USIA and will c?nt~ane the st~?u~~Ye untiY Republfcan d~ lure end de facts auth~ri~ is recc~gni~ed ?ver S~n1a~?a, j~,va., ~.nd Madura.. S~arifa~ddYu and ?~ner ~epublic~.n sp?~esmen sated that nee net?~;~ti~ns ~=i11 be ~a~derta~e~ ~~aYess assurances are given that dutch ~~?~ps will be withdr~.wn i~ t~~ree stakes: first t~s the de~arcati?~ Yines ~f 21 pct?ber 1.46 ~f~IY~wi Which with@ dra,~ra.l net?tiatia~.s w~a~ld pr.bly be~ir~}9 they from aYY FtepubYica~ territ?~?~; and, finally, fr~an the wh?Ye cf the andies ~~?chipela~?. ~c~~z~bYtca.n s?~rces are u~aui?us i~ their beY~ef that nd even~aY a~ree~ez~t wi&Y be i~pYes~sented by-the ~s~tcP~ anises it is tho~??u~hly ~~.rai~teed and super~sed by a third p?~=er. The dutch, acc~rdfn~ ~ Pre~ler feel, a~ee that the ~it~~~~,d~ati ~.~ree~erat, as sa~ch, has been abr?~:ted by recent deveY?p~entss -hut xraagntain that a p?lftgca.l fc~und~.tien f?r rehabilita- ~.~~ rray be achie~=ed ~n the basis ~f the principles ?f the ~4~reenaent, which the Dutch G?vernrnent feels itseYf ms~rally b?a~d. In ?ther wards, the li~utch wish ~ es~bYish a s~verei~ USI which will have au?ri~ ?~rer a e~tfa~e a.~?chipe~.a~?. ~ithia~ this USI, the Dutch ~,'a~t a Pepublic, a~der "c?nstrarctive" Yeade~ship, which will ewer - cise auth?rity ?ver Sinatra, Java., and 2viad~ara. The Itch have declared that they wiYl n?t evacua&e territory ta?~en since 20 July ?? - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ' Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 without "conclusive guarantees" and without consultation with the populations involved, because the Dutch fear that extensive reprisals would be taP~en by the Republic against all persons who had not re sisted Dutch occupation. IVloreover, such guarantees would be acceptable to the Dutch only if offered by a republican government which had accepted the Dutch view that the a~aainte~.nce of order in all parts of the archipelago is the responsibility of the Netherlands ~overnYnent and must be secured through a joint police farce. The question .of the joint police force was one of the points over which negotiations bro4~e down prior to the outbreak of hostilities on 20 July.) Although Dutch leaders have not indicated their attitude toward third-power supervision, they probably would not accept such supervision of an eventual agreement. The Dutch view is that political readjustments between tazdonesia and the Netherlands are eonstitutfon~.j questions and therefore not open to third party con- eern, The irreconcilability of the Dutch and ltadonesian l:ositions, ? sustained by the belief of both sides in the justice of their respective cases, indicates that the process of reaching a basis for negotiations will be protracted. IVfeanwhile, in order to restore their occupied areas to some semblance of productivity, the Dutch are expected to proceed unilaterally in the organization of a political administra- tion and in the integration of this adra~inistration with the Netherlands. ,.g.. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 .. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~5 ~~l~il'~t3S?f' ~~ARE ~~?es~de~t ~c~~~a~e~ ~T~.~e~.a'~ charge that the c~rre~t Cora~a m~i~t-led ~ht~e~~ soak ~tr:~e co~~t~t~t~~ a 6 e~~iow~?w~'r between his ?~o~ex~~a~ent a~~~ tP~?~at~?r~a~ ~o~~~g~~ does not ~.~~ea~? to be ~ub~tax~ttate~ b~ the e~i~ence ~~ hay ~~?~nght forward to ~~~port it. Althoa~gh ~.t ~~ trace th~.t ~h~le h~.s a "~t~?ateg~.c ~mcati?zn9~ fr?~ the ~ta~t~~o~t off C?~a~a~r~t~t a~p~.rattoaas ~ the ~e~tern ~iemas~~~ere and th~.t the ChtZ~~ ~?~~a~n~t ~a~?t~ attaches g~~at i~~orta~~e t? wt~aang the st~?i~e~ there ~.~?e g?? re~.s?~~ for ~?al~tz~.g mat a .. ~tQOw~?~rna: is ~tencie~< ~f the G?~~s~r~tsts were ~eter~~n~ to para~g~~e the ~h~.~ean econ?~~aY9 they woantd cert~,~~p have ca~.Ied drat some of the ?ther ~.~~o$~,,a,,~ P~p ~e~ ~o~~~aa~u~g~ist ~o~tgroaa. ~9~?t~e~~ ?~?ey~t$fl~' Strome ~.j~~9ea&'~ S.~A ~,RB ~?~S~ectS 8.o iLL~~L ~. IL~~Y~ir~L' `i+~~l~~.~ ea~s~Ioyer-worker ~~.sate o~rer wages and wag cond~t~.ons. Any C?n3~a~ist atte~~t to force a ~how~?wn with the ~hi~ea~a Go?e~rn~.eaat at thgs t~~e woa~~d co~st~.~te a skaar~ s~eparta~re from the ~?ecea~t pattern, ?~ ~o~.~fst actt~~t~es iYa ~~er~ca as a whole and ~ ~h~e y ~a ~artf caa~ax? . `these Coa~a~t~atst actz~~.t$ es have been. clear~.p gr~dicate~i on the view that ait~out st~?a~ggles with the Laati~a A~erica,~~ ~overn~er~ts ~~stp . the ~resea~t phase cif ~S~tTSSR relattoa~s, be ~ost~oned so as to a~?id gro~c~~~g repres?~ ~%~J~ B'~Ye~S~3i~'eS. ~~~~~t J~'@~9~X'~LS ~?~1 ~h~~A~' yE~l~ICr2t~ t~t~,t t~~ ~hfbe~ Co~a~ar~aast Party has e~x~tea~?~ed to ~o~a~w th~.s ~att~e~~ to the le+ttex. Amy state~e~at day ~o~~a~ez 'V~~~~a o~z ~~~~a~fs~ t~ shale rn~asty ~dorec~~gerr, be read i~ the Atght ?~ the fact that ~ht~e has a~. apg~licatio~ for a ~~~ ~~~~?~a loan befr~rc the ~orl~fl ~an~. -9 m TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 i ...-s Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 -s ~ _ _ TOP SECRET ~ 6 H CONTENTS _ Pages TR~NL3S ~I RR~E ~' ............. ~.........:........ ~ - ie A.RT~CI,ES .......:....................... ....~A-13 ;e~r~,sh React3a~n to the bfl~fSCOP Repox~ .... ~........... 1 PosS~.ble ~'a~l of Raaaaad~ea Govexnarie~it ......... . ..... 3 ~napB.icattoa~s o~ the T.~ Cabi~aet Changes ........... ... 4 Prospers fog Direet Com~~~st Aotgon ~ It~~y ......... S ~nplieat~ons of lla~an's CritieaA ~nterna~ Sftuca~~on ......... 8 't'he So~~et PropQSal~~or ~S-~3SSR '~~thda~awal ~tQffi Korea... 9 Economic Sitnatgon ~ Chana ..... ..... . I2 Argentina's .Eleetfon to Security ~Co~anc~l ..............13 ~oQUmenL ~~' ~- d pp ~CtiANGE 1n Class ? ~ D~CLASSITIED TO . TS g .~k~~~' ^ ~,..-; ,. C = ~~' , 4 err ,7 :~ ~ f ~-1.~ A L ~,... ;;te TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET TRENDS IN .BRIEF GENERAL A substantial~proporti~on Qf world Te~-rv does not'favor partition as a~solution of the Palestine problem (see page 1). An increas_i~g, numbed of UN gepresentatives doubt that the UNSCOP ma~oritg proposal for the partition of Palestine can obtain the required two-thirds support in the General Assembly. These representatives consider that the probable,abstention of the UK, the Netherlands, and Belgium, and possible similar action by some Latin American representatives,will prove decisive in pre- venting acceptance of the report. Strom Arab o~o~osition to the UNSC GP xnaiori~g report continues. Although no organized uprising is likely to take place in the Middle East until the UN General Assembly has completed its deliberations, 6he general strikes scheduled for 3 October in Palestine, Lebanon, Sg~ria, Iraq, and Saudi Arabia may lead to violence. WESTERN EUR.OFE The likelihood increases daily that the Ra ar~,dier Govern- ment will fall following the municipal elections, and the rivalry between the French Communists and DeGaulle's supporters is in4:ensifying in anticipation of t~iat event (see page 3). Further UK Cabinet chapges, designed to increase the Government effecfitveness in meeting critical problems, can lbe expected shortly {see page 4). Although recent events in Italy have weakened Communist prestige, the Coanmunists will probably not take direct action to overthrow the Government but may attempt to set up a separate Communist state in the north (see page 6). G~rman_ strikes and demonstrations can be expected follow- ing the resumption of plant dismantlings by the US-UK. German -i_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET public opi~ai?~ ~~ reparations has. alte~?ed from ~ belief that a considerable porti?~n ?f Germ~.~a capital ~odds~ shoa~ld g?~ ~ctims of ~a~i aggression to a }relief that any plant, r~?t s?lely milit~.~?y, sh?uld be Althoa~gh ~ threat of fo~?ce ~.nd the discoa~ti~aaa- ance of food imp?rts might c?~axrol dem?nstrations, such methods. may als? gnterfere with co~.l pr?:iuction i~a a Ruhr at a critical time seed intensify public opp?sitioss ~ the occutio~a. ~~.STERl'~ EUROPE So~fet officials in ~erlin~ and their adherence in tthe S?cialist Unity Party ~SEI~) apparen~ly are g~lanning to a~er~e the So~aiet sector of Rerl~ with the So~.~et done following the Co~cil of ~'?~reiga~ ~!finister~' session fay ~o~tdon. 'his decision seems to lee p~?edicated up?~ the S?~tiet con~ction that the ~ounciA will fs.i1 ~ reach agreement on ~x?~ar~y. the Soviet Zone he~.deluarters pr?bablg will be transferred t?a cgty less accessible to the ~est- ern Powers. ~Ithough a USSR d?es not' intend, initially, to risd~ co~-pelling a per Bowers to e~.cuate Berlin, quadripartite g?~e~rn~nent will become e~~n less of a realm than it. is now. ~ additi?n, tlne USSR plans ~ i~trex~gt~hen the ce~nLral go~e~nnffie~nt of the S?vie'~ Zoane at the expense of a g?versaffie~ts of a ~?rcaponent states and will , n~inin the eastern taou~ndary ?f Ge~.ny at e der-~?eisse line. ~?he cam,~aia of a Runnanian Comnntnaists to obtain popular support for a ~ree~ guerrillas represents the first in- st~.snce of an organised p~ablieity and fund-raisiang da~i~e fo~? this purpose in Easte~?n Eu~?ope. the campaigns is being pr?moted with cus~mary ~onsmaunist fs,nat%cism and may be ass eff?rt fi.~: ~1) divert wo~?ld atteni:fon f~?onn the direct military stapport supplied by `~e~g~asla~aa, ~ulg~.ria, aid Albania; (Z~ denaonst~?ate that support f?r the Greed paa?tisan cause spri~ags froxri the masses; and (3) establish a basis f?~? propaganda designed to promote fanternatio~nal brigades. The detersxninatioan of f~he Eastern Ettr Comaxnunfst regimes to consolid~.te their positions rapidly is indic~.ted by the e~ecuti?n of. Pet$~o~ in Bulgaria and an intensified p~oga?azn of TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET "treason trials" in other Satellite States. The unexpected mildness of Bulgarian repercussions to Petkov's death may have persuaded the Communists -that they ca~..n proceed with impunity against the remaining democratic leaders. The trials of jaganovich and Gazhi (Croat and Serb Peasant Party leaders) have already started in Yugoslavia. Mikolajczyk in Poland, National. Peasant Leader Iuliu ?~aniu in Rumania, and Hungarian Opposition LeadeP Pfeiffer will probably be victims shortly of this same type of "justice." Thy Communist Party in Finland has launched a bitter on moderate parties in preparation for the nationat elections in March 1~J48. By means of wild-cat strikes and persistent poli- tical pressure for the abolition of wage controls, the Communists seek to undermine Social Democratic control 'of the labor move- ment and to disrupt Finland's delicate wage-price balance. The ensuing economic chaos would endanger fulfillment of reparations deliveries tQ the USSR and tl~tis probably precipitate Soviet interven- tion and the subsequent seizure of the Government by the Commu- nists. Such Communist tactics have increased the political resistance of the Social Democratic Party which may decide to seize the i~tiative from the Communists and to demand elections prior to March 19483 in the hope that a Parliament with a smaller Communist representa- tion could hake more aggressive action against efforts to disrupt the Finnish economy. NEAR EAST-AFktICA Iran ma call into the Soviets here of influence unless it takes st,~ps to ac eve the internal stability without which no effective resistance to Soviet encroachments can be made (see page 8). FAR. EAST The Soviet ro al for US-USSR withdrawal from Korea althou es fined promote ovie po iti jectives in Korea, . serves to strengthen the US, position in presenting the Korean question to the UN ;see gage 9). . ..The thgea~ened collapse of the Chinese national currency may produce a serious political crisis and eliminate governmental support of Nationalist military forces (see page 12). ? iii - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ES~~~t t~~PRE ~~~ ~a?~ ?~ ~~~e~a ~ ~ Secf~ C?a~a~cil ~a~ help ~? ~~ i~~ a~c~t an #.~c~ea~e~ acce~~e ?~ in~e~aa~i~l ~e ~1,~`~. AaaAB ~ ~ m67~L~~~ k0~ Vi8&A~& ~A. ~iGF6b'6$a7 Yd ?8iE ~~~ IJS wi~.I ~~ ~~~~e~.wif~i~ ~ dew weeks. ~~i~ ac~i?~ wili be ia~~e~ ~~ a ~?zn~ai?~ ~e~n~.e~`~ i~ a~ elf?~ ~cr check ~~~a's i~creasi~n~ aa~ye~se made ~ala~ce wifh a US9 which ~e~.ched a ~ec~~ ~ high ~f ~~~,~~.~ ~ ~?~ ~ailli?~ ci~~i a ~i~s~ se~eri ~~?m~ ?~ I9~?. ~.~ a ~~a~e~ ~?I~~i~~ ?~ fl ~?Il~ di~ica~l~.e~, Ca~a~a ~ al~? ~e eecte~ ~? ask fh~ ITS fc~? a I ?f ~.~ le~s~. . ~ ~~? xII~.~~~, ~~ be s~~Ie~rea~~e~ P@sslp ~ a I ~~?~ p~~a~e ha~ke~s. ~~ae ~a~a~ ~~~e~e~~ ~esi~es ~ included wi~ni~ ~;~.e ~c~pe ?~ e E ?~ean ~ecc?e~y ~~ ~a ~Y tBS as~~ce ?f di~ec~ d?lla~? help ?~a~h a P~?cn~e~~n~ ?f su~~li~~ iffi Ca~ae~, and 'a~~?~ g~a~~en ~~?~ ~hi~d ccun~ies ~ec~f airi. . i~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? TOP SECRET ,~I~.T~~ LE S TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET jES~I REA~Tf~i~ TO ~?fl~ S~O~ fiEP~RT ~.n anaflysis of Jewish B eactio~. to the maj?rity rep?st sub- mitted key the Specia,fl ~o$nrnitte~ ?n ~apest~e ril~S~?~~ re- veals that a substantial pr?po~4i:ion of ~a'orld jewt?y, f?r varying _ reasons, ~?es not favor partition as a s?la~tion ?f the ~ale~tine pr?ble~. ?Y?he e~xeme Zi?nists xe~ect partition and clam all of Palestine and `Trans~oxdan f?r a je~~=ish s~.te. The m~es?ate Zionists accept paition with rese~~vations, hopiatg that it wilt lead to the acquisi$ion of all Palest~e and possibly Tra~asjordan. The non-Zio~sist jews9 large in number but ge~seraflly non-assertive, reject partition, a~a.abtt~.ining that the primary interests of world Jewry axe jeopardised by the atte~}~t of a ~iflitant minorfty to bui if it sh~uD.d later ~e suppressed as a F?litie cab ?rgas~i~aticns (as its beade~?s appare~tbg a~tic~.pate~ tc~ c~t~aie its actinties as a~a uuder~rd ~??e~e~t thr?u~h the wcrl~ers. At preset the ~?~uuists are atte~pti~,~ to igaffbtrate the uui~s whfle preserving si~ubt~,~eausig the appearau~e ?f n~ ~?~~ a~u~fst c?~etr?i t9y per~itt~~ Social ~e~~crats t? $e~aaisa iaa p~??~ai~ nest offices te~tp?rarilg. ~~he c~~rexgt C'~~~uuist strategy fs t? train ?ver the i~dfv~.dual w~a~?her ~ aid gnus assu~ae c?ffircaaud ?f the u~i~~ thr?u~h c?~ntm?b ?f the r and fibs. i~ar~st sea~tinaeut is paicularilg str~ ~ the Rheiui~h-E~lestphalia~a industrial re~~ ~d especiabbg pc~t~e~?ful fxa the Ruhr. l~ addition, a reliabbe A~eri~ cap trade unionist rep?rts e~ter~sive ex~ansi ~f ~?ffi~unASt tae fbueuce ~ greater Besse. 'b`he ?verall plaBa is t? ~ai~i sufficie~at strength t? tae hn a ptasiti~ t? shut ?ff ?r seri~usig curtail bi~~nal pr~ductis~a. -5~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET EE~'E~~ ~~" ~~.~L~Ia~~~ ?~'R~~!!T~' ~~~ ~.~~E~~~'~E ~~~~E~ ~'~~ d~~c~~~.~ ~~ ~~~ ~?~.~~~~.~~ ~~a~ia~.,~~~.e~ ~~ea~y s~~ 15 5~~~~~~ ~~~ ~n~~~~ ~~~~~ ~~~ S?~~~~~j:~~~~~~~~~ Sa~~~~~~~ a~~~~es a~ ?~p~a~~~~i~y f~~;? ~u~~e~ ~~~~c~a ti~~~~ ~~a~yo ~?h~~, ~~t.~ ~.~a~l~~~n~:,a~~~~ ~f ~8:~~ ~7S ~?l:~~y ~~ ~~~~~~~~~~~ ~~a ~~~~ ~~,~~~~~ cad ~~~ 5~.~~~~.a~~ .~.s~~~r~~~ b~~ ~a~. ba~:a~9 ~? ~~~~?f~y ~~~~. ~ ~~~m~~~.~~~.?; ~~s~~~ Daly va~l~ ~~aa~~e ~ca~.a~s~ ~~~ ~~~~~~.~a9 ~~ ~~~y a~~ ~~~~.~~ ~:+~ day '~~ae ~~?~~~ ?~ x?~~i~ ~.~.. ~? ~.~~ ~~~~~~~?~ d1 ea~~~~~ ~~~~~~~ ~~ ~~~~ ~~~~.~~~~ a~~~.~ a ~?~'~~ ~a~.~~~ ~~~~~ ~~~?~~~~y ~~~.~ ~~~a~~y ~~~~r~~~~~e~ ~.~ ~~~?~~~~ ~a~~~~ ~~.~~~~ Sa~~b~E~:~ ~.~~?~.~~~ ~~pak~~~~~ lies ~ ~~~~~~ may ~~ ~~~~~~ ~? ~.~~~~~ a~~ny ~~~af~~ a~ ~.~~ a~~~e~~~~~ ~~~~~~ ~~~~~~~ ~~ ~~~~~y ~f ~~~~~:~~~~ ~~~~ Sa~~~~~~~ a~~~~~e~ a~~ ~~~~~~~~Iy s~~~~~ ~?~ ~~a~ ~iSSP~ ~~~: A?~~w~~~~~?~~ ~a~~~ay ~~ E~yp~ a~~ ~~e ~~~,~ E ~,~~ o TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 w TOP SECRET REI~~~i~i., ~F ~~~R~~~ ~TtEl+liiER The recent resignation of TtarT~ish Prennier ~el~er teas ~,~ c~.used by the e~epression of dissatisfaction. with his Go~ten?n~neat ~ ~,,,~?"' iay the olspositic~xn l~ezn~ecratic Party and also by tae r~k and file of the Goverran~e~nt's own p'eople's k~~publ~.can Pa~~ (PRP~. Rise .~,~ ~`?~ conate~nt in the twa paies was created primax?ily ~y a Govern- xrnent's abd~xrate a~; toward criticisrzn of s?snne of its internal policies. . This s?rt of p~?essure, everted am -the Gove~an3e~tt fro~rn bellow, is the strongest manifestation sinnce tine introclinc~:i?n of the rnultiMpartp spstea~n Tess than two years ago of ttie gro~vixng strength ~OO~ of the ~exnocrats and of a dissident elements in ~ FRF~ The fact fihat lrartgr leaders p~;rrznitted ~:he Got~ernrnent try fall render ~ such circunnstances (which w?uld knave lbeen innpossible only a ~~.k sl~o~?t tinne ago) relsresen a progressive step in TurB~ey's evolta- tio~a as a democracy of tine ~e~tern type. Fever's Foreign l~~nister, Masan SaF~a, has ~.ccepted President Tnaonu's retest to form a anew catai~et. The Saka cabi~ net gill, ?f course, YsA c?mposed ?f PRP rnen~lrers, and its foreignn policy wiil not differ fr?m mat of the Pekes governnnent. Yn in- terxaal affairs, it" wi11 prola~.bly offe~? less o3~stinste z~esista~nce to dex~na~nds for more liberal legislation. ~Iowever, inn dealing with current econ?i~"ic difficulties which have been th"e basis for cri+ticisna by P~"F as ?~ell as_ ?g~position xne~rs of tfae ~Bational .~.sseanbly~, here is nao irnciication yet that the anew cabinet will ibe mare corrnpetent than its predecessor. e?_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 . , . ,. ~ , P~~~~ ~~,~~i~~F ?~`1~Sf~~ Y~Y ~~f3~H~V~, '~h~ ?: ~~b~~ ~~~~~,~p Vi~~aaa~ ?f ~if~h ~o~s~~a~n~~ ~a~hh~ a ~`~~~~h ~a~~?~ ~aaght p~~~~~~* ~ ~~~as~~ f~~ la~hi~a~ ~ e~:L~e~ ~~~~~h ~yl~~a~y c~ffe~siv~ ~ ~~.~e ~~~~~I~~r. ~~e~~h n~:~~~.~~ ~%~el~~ ~~~~~ ~~~.I~~ ~~ri"~h ~~ e~gden~ ~? ~h~ ~~ah ~.~ ~~?~~~~f ~~ h~~i~~~ ~h~.~ ~~~?~a~'~~~~~ ~r?~a~~ ale xn?~~ p~?f~t~a~~ ~~ ~~~~~~ Af a~r~~~~d ~f~~y the ~~~~f~~ ~~~~~nm~n~ hay ~~~~ ~he~ by ~ ~?~~~~a.~~ ~~.a~paign. ~~~fh~~? fa~~~~ f~~?~a~~ ~~ ~~~~~ ~~~~~h ?~a~:~?a~i~ f~ n~~~h~ e~~ ~~a~~~. ~s ~h~; ~~.~3~ ~~~~rf?~?~~~~~ ceder f~?~fcal ca~as~gt~ar~s of ~'~~~; h e?~aa~.~~a~~~, ~a~~~~~ ~.c~~~~~d ~ ~h~ 1~?~$h .l~f~~~~ campa~ ?f ~~~~~~3 ~~~. ~ ~~ ?f ~~~~~~ ?~ ~?e~lae~r~~~~e f~ h~.~ ~~~~n ~~~~.~~~ shag ~~~~~~ ~~~ ~a~~a~tx~, ~a~~~ ~~~~~t~~s ~f i~ tea- ~~~?~~~ ~-~.~ ~e~?~e ~~~.b~~9 ~h~~h ~~~~~ s~~~~~~~y ~~~~a~~~~e F~~~~h .~ ~`~~~~:h ~affe~sf~~, wh~~~ ~~h~~~r~~ ~?~n~ ~e~c~~ss ~a ~. ~~x~~y ~t'a~l~~ar~ i;~a~se, ~~.g+ ~~~a~~~, fa~;9.~,~ ~~a~~f~?a~~ ~e~~i~~~~ ~? ~~~~ch ~~~?~~~~. ~~~h~~~h F~~~~h ~~~~~~h i~ ~a~?ch~~ i~ ~~~~ffi~.~~d ~~~~ ~~f~~~ ~h~ ~n~ ~f 5~~~~h~~?~, ~~e ~~~~~~~tBAa~~t~~. ~he~e f?~~~~ ~~~h~~~ ~?~~~~a~a ~m~~d ~~;~~~~ C~~h~ ~h~, d ~~~e~n :A~~a, #? ~~~?~~~~a f~ltr~.~.~?~n fa~a~ ~~~~t~~~o ~h~~ ~~~d ~~d~n~~~ ~h~ p?~ ~n?~ ~f the ~~ea~~h-~g~aa~~~~~ C~~~a~n ~h~~~ ~~?~~~~x~f ~~ fhe ~?~~~~~. ~~~~~~~~~at~.i ~?~a~i~e:~~ ~s~~.~Ai~h~d 3~ ~h~ ~~~n~h-?~caa~~~d ~~1~ ~~~?~e f~~he~ f~.~h~~~ ~s ~~~r~afy~~~x~e~w~~~3.~ap~~~,li~~a; d ~h~ ~~~~~bR~~~~ e~.~~~ ~h~, f?~~?~t~p; ~h~ ~~?~~e~e~n~ ~~~a~1f~h~~ ~y ~h~ ~~~~h~~~ ~f e~e~~~sa~, s~~~ .~fsy ~y~.~h~~~~ t~ ~~~~aa~ ,y ~~?~~~ ~h~ ~~~e~ b~f~~e the mod, -B- ~P~RET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 a~ ~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 r 1 1 ~! JtN t,~, ~~N'TE~I'TS" P~g~S 'TY~'DS EIS $~t.Y~T? ........ . .....i-iii S??ie$ it~a~4cions to ~3S Po~i~y iga ~o~ea ...... ....... 1 STS Air ~roSp~~s fn East~ra~ Enr?p~ .... ............. 3 Soei~~ ~ffo~?~S to S~r~ngthen Positio~a ia~ wry ......... ~ '. ~~~~d~~~ Probi~m~ Cort~ros~~ing Nadia and PaigiStan ... 5 Iraniaa~ R~SiS$~.a~o~ to So~i~~ ~~s~ure ................ 7 ~ecerag De?ekopanen~a in ~cio~aesia ... ? .............. 8 Canadian A~iora oa ~o~la.r Stior~age < ..... > ...:...... ID Docum?n~ L ~- -- 0 BC CHANGE in Class? DECLASSIFIED TS T0: CHANGED r ?7 Class' DDA Memo, '~ AP DDA FF?G? 77 1763 puth : ~J-~ BY Date= Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 `~~,~I~"~5 ~ ~~~~~' fe~u~y~awe~? ~~~~~~~~ ~:~ i~~~?~~.~~ I~~~~.~~~~ w~.IY gr~?~d~ a~ ~~ ~~~~~~~ ~~ I~~ ~~~~~~ ~~~~~ ~~~~I~.~~~ ~~~~~ wIII T~~~~,~w~II~9 ~ ~i~? ~~I~.~;~~~~Is~ I~ ~:~~ ~~I~~~:~ ~f ~~s~~ ~~~ ~~7~~.~~~p~ ~~~~~~p~~~q'~~L~.~q ~+y~r~*:.g~~u?~~y~~~~~~ ~y~~o~~~?~~y ~a~?+~~y~~~q~p~.~~~,~l~p~~ ~~y~ ~~ ~(~~P Si.E~lf.~8F4 ~88~~63s~~ad @P..N ~A?5~^9 C.~;c:4.~ ~,~Y6 u'+di;~Gi~~.i~3 V.~~cl/~N~GF.Ad6k~ANG~d7 5MV.5'13g~~@~~'.SS&~I ~~~~~~ ~~~~~~~~,~~~ ~h~~~ ~.~ ~ ~~~~~~~~~ ~ ~~~~~~y ~t~~.~d~~.y :tea' ~o~~. ~Fa~ ~~~s~~x~.II~ ~~ ~'~?~+~ ~Y'YR~~A~,r., ~~II~~~~s:~s ~~~ w~IIQ~~~-Il~h~d Ic~~.l ~~ ~ II~~~, 4~ 3s ~~~ II~~~d ~~ ~h~ ~~~~~ ~~ ~~~~~ ~~~~~~~~ ~s ~~ p~?~~~~ ~ IJ~~~ ~ e ~rl~a~ ~~ ~ T~~~'~?~r ~~~~ ?f ~ CF's ~~ ~i~~~~ ~? ~. ~. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 i yr ~r.~icr, r strong ~~~~. ~ositfi?~ pis ~ ?~is a western l~owc~rs .~ ~? ~rocaare ail y~ossibie benefit from. the ai~.ost ce.~ failua?e of the conference. Sho~Yd So~Fet ~f~?~?is fait t~ iii ~?.~a~ on So~ ?iet ter~s9 a Y~ea~~ wag ~sbBi~h a aster ~ebgicy9 east of tF~e gibe see Pie 4~. ~3K Prune ~iste~? Aimee wig ~~?babl~ ~ta1~e two ?~ free Cabinet changes ref?~~ ~~io~ea?, eli~i~a~in~ ~~~~ doc~inaire Socia3ist~. if ~ shonid not, how~~er, tale ~~~~ action., it wiii indfcate mat ~ Governa~,ent, des~f#e ~ econo~aic crisis, intends to rs~e a doctrinaire Specialist pro gran his f~,Ii end even to dress for tree nati?nalization of e steel Indus The ~ossfbiBit~ e~sts tit A~3ee himself y re~ig~; i~a which ~e will prob~,bl~ succeed hftx~. ?f~at General de C~suile ay r ebsrn ewer in fbe event of an econo~is and food crisis appears io ~e an creasing s$f bili~m leis strong anti~ogn~c~nist stand, his adBnfssion of error in aces a Co~~un4sts intio~the drench National ~o~Fnf~ee in 1943,. ~.nd tl~e te~nporar~ wr~al~en of the French Co~n~mm~ist Farms lr~~e. c?~bia~ed to increase his populari~ at a Effie when e belief is beco~i~ng widespread fil~.t Est?w~r French coalition ~o?effients are incapable and ihat a str?ng go?er~ffient is, rem ~uirep. At present bB~t tw? 4es of s~oa~g rule appeal possible f~a France: aside-pares C? rule or a re~iffie headed b~ Y?e Cxaulle. Tie layer would alapear to be preferr~;d ~ a ~caa~?ri~ of ~`rench~en. The lonecontinued tende~~c~ ?f a anti ~' o~~tgnist parties 4n i~Iy to break ug into immeffecti~e, ~n~ll ?oups and bus defeat ~e~asel~es has been de~ons?a~d ?nce ffiore by a recent schisffi in the ere~.e~rightist ~o~on In Front. l~fssident elements of tr~is have for~e~t a new- ~ which appears to be allying itself with neo?~'ascist and ~orchis~ groups, pro ~din~ flee Co~~.~anlsts wig new an~~~ascist li.s lo~~ as such schisms and political inepes~~ continuep a nu~e~~?s feel sulSeriorityP of l~rs an~~ouhist group$ wig be neu~al~ iced by a di?erge~ct policies o~ weir leaders and by a discipline pf e ~;?~nft~nis'~ ~~,, d if Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 . Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~ defee~~r~~ ?f eta ~~~ ~~estde~~ Care f~?~ ~e ~~~a~~~ ~e~n~~e ~t~s ~ee~ dfe~~ed ~~ ~ s~e~ ~e~a~:edl~ ~~de Y~ ~d~fr~.~ Gab~ee~.d~.s ~~ ~ se~;~et ,fee. ~'~t~e~a~cs, eus~dq aid ~,ee~sed ~f ~Ie~~~ ~~ ?~e~~w ~ ~~~~xe~t, seed ~~~~ ~e ?~~ed tae a~?a~~ve ~fl~~. a~~~?~~ ~f ~0 ~be~ 194fi w~~a ate ?wled~e and ~~~e~~ ~f ~"a~?~ spike ~~~e~~d~s'_~e?e- ~~ti?~, f~ fs d~~~l ~ ~~~~sr ~~1 ~.~e ~e~?~ ~ ~~.r~?~. ~e~a~se ?f a I~~er's pres~i~~ wit~a tae pe~g~e ~f P?~~~. ~~e ~~~d ~f tae ~f-I`~~~lc~ffi-~d~ ~i~~,s a c?~l~.~pse ?f ~~~s~~?~?~; aid app~~~~ ~~~ae e ~ ~f 4~e chef e~.~s ~?~f~?t df~ a ne~~ f~~are see a ~). A~~~ ~ ~ ~s ~ Y~ ~~~rese fir c?~~ess~~sx~ -A~e~ba~~a~, c~~~~~~ ~f ~x~ s ~ete~~t.~?n ~~ depend ~~r~e~~ ?~~ f4s es~~~~e esf a ~f a Neste ~eawe~~s ~ sup~~# f~~,~~a~ i~depet~d~nce d ~ s4?~ S~~e~ ayes si?s~ ~. ~?ueaste E~~s~~Ze see pie ?). _ ~~~~ed ?le~~e d fau~~t~e~ delay f~ the ~e~~~~~f?~ ~~ ,d tie c~~~esl~.~?dl~p~se ~~ lead ~~~ ~~~ ~ I~.e~ ~ape~~.m t??~s taa e3f a ~epll~ ~~ ~a see pie ~); ~~lt~ ~~ ~a~a~.'s ~~ t~~lla~ ~~~~?.~~ wlll p~?abl~ mouse ~.t ^~s~~~ ~~ ~s~de~' ~~~~ ~eslet~.~~ ~ ~ d ~~~stl ~'~ l~ t~.lll~~ agp~?.#e~~ ~~ ~~~ d~~~.~s see ~e ~~)a ~~~-~.'e~a~: ~~~ ~~~ ~~,~.a~.~~s deg ~e~~.~se ~f ~~~~~'~ wllll~~ss a~~ed~ ~?~ ~ de~~ ~ ~~e ~~~ f~~ ~ see~~d ~~~ ~.1~~.~e `~e~e~ ~a~.~ aid. ~~e~~~ ~~ e~~ ~~ ~,~.~~~s ~.~. s~~~a ~ ~~~te weld ~~~s~~~~te ?~~~~~ ~?~p?~~.~~s slle e~~~a~ aa.~.f,~ie. ff ~~ee~~~~: ~.~?t ~e ~ea~;~ed ~~ is fl.l ls~~e 9 ~~eslde~t t~.le~a~ ~~ ~efe~?. a p~~~le~~ ~ ~~ esf m ~?e~t ~ ~ ~e~ ~~ ~el~ ~~?~.~~ dfse~ssl~~ f tie s~~~e~t. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 i vi -vL' Vi~l`i 1 ~. ~ ~` 6 ~ Ta ~a S Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 a va- viJ V~\L' 1 S~~E7C FtEACTtP.~l~ ~'~ US ~CLIC~ IN KOREA Soviet acceptance of the US proposal for afour-power con= ference on the problem of Korean independence would clearly ins~i- cate that the I.TSSR is confident of the strength of the present Com- munist political organization in South Korea.. Conversely, Soviet delay and obstr~xctionist tactics at a four-power conference yr a coaxaplete .boycott of the conference wound indicate that the USSR considers the Communist Farty weak in the southern zone. Despite Sovie~. contentions that the negotiations of the joint Commission have been laindesed by the "oppressive" and "uiradenlo- cratic" governing policies of the US in South Korea, the records of the ffieetings show clearly that the USSR planned the current stalemate within the Co~issioai. `Throughout its stay in Seoul, the ninety-man Soviet delegation subordinated its work on the- joia~t Commission to the organization of a fifth column designed to obtain political doffiination of South Korea. The USSR has protested the recent arrests of Coffimunist leaders in the US Zone probably be- cause of the effect of the wrests upon the carefully-establashed Co~xamunist political organization there. The US proposal for afour =power conference includes a proposal for immediate bizonal elections to establish a provisional I~'orean govea~~nent. Curre~at political alignments in Korea, how- ever,~favor the eventual dom#zP.ation by the Communists of any pro- vlsional government that may be elected on a zonal basis. soviet domination of the northern .zone assures a solid Coffianunist bloc of one-third of any go?ern~raent based on ~roportia~aal representa- tion. Simultaneously, a solid lef~st front e~sts in So~xti? Korea which is smell ba u-uianbers; handicapped by arightist-dominated police force, and opposed by numerous rig~rtast groups. Ti~ese rigi~ieist groups are disorganized and mutually uncooperative, and the possi b bility exists that, in the near. future, the more AfghtYy-l~nit, though sffialler, Communist organization can successfully oppose them. Recent aggressive US ~.ctics have probably no$ d#srupted this leftist structure perinanex~tly or changed the basic elements of the situation. It is doubtful, ffio~?eover, if the presence of Ul~T observers at the elections could alter the electoral result appreciably. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 i vi vL' Vl\L' 1 f .A~?u~h ft ~s nit eete~l tit a ~SS~ wii~ acee~t the ~~ j3~Q)~~~5 ~~~ c ~~ffied~.a~e' ~~~89~.~.8' eRe~taQn~ s Sii~h a~~ej3$~.n~e ~reu~d fu~the~ S~~et e~~e~~re~ iu ~~e f~lle~~?n~ ways: ~1) a ~S ~~~'e~~i~e ~aliey w'?uld be made t~ ~ee~ unwa~~anted, a~e~ the tJS wuuid a~~e~.~ rasp?~nble f~~ the w~th~a the jt~fn~ ~?~rnf~sf?~n; c2) S?~et ~ettc~ the ~t~~t ~?~affiu~e~en w?uId nut be eubjeeted t? ~uhYi~ e~~.t~ton ?a? deb~.te; and ~3~ ~ tea~~rary "p~u~-i~~Q~ip' ~~~e~~ent w?uld a11~3w ~?ur~~et wcsr~ers, ?n the ba~~s ?f f~?~end~y eu?~e~atf?n w#th the z?~ghtfs~, t~ obta~a hey pa~a~ff?a~s w~~ich w?uld ~e ad~.nta~ee~ue when ~ pe~ent govea~n~ ffire~at i~ eAe~ted. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 _ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 1 Vi ~7riljltG lm ~ ~~~~aa:l f~ta~~ ~~ftk~ t~~ e~tlis~s~. ~~~~~~ts ~# East 1~~~esia~ a~-d ~~st ,~ ~~st ~~~:~, ~##e~i~~ ~~t~~l ~y t~~ ~a~te~~ i~ t~~i~ ?#ftci~ly~?cc~p$~d a~~ i c~t~u~ ~~ b~ i~gai~~~ ~y t~.e ~~~~~~-~~ p~~tcy ~f e ~.~p~bii~~ e~~i~~. g~~ps. ~'~is P?ii~p ~ ~i~a~~ pri.~~iAy ~.t p~gati~~ ~~r~fp~~tr p~~~~ssi it~~a~st~i~s, d st~~il~s ~# e~?~t, ~?c~iti~s ~i~~i s~bsi~i~y ezxa~~~.sfs ~?~n~ati~ats d ~~ ~iidta~y st~~?~s, but its a~~~~i~.te ~~~i?~~a~ss has b~~~ b~~ ~~~a~~~i~a~ ~s~ic~as. ~a~t~h -~~?ritfes ~a~~ ~e~~a ~,~i~ , t? e~? aia?a~.t ~,~~~ ~~~i~ t~r~s ~# ~ib~~ d s~l~~ ~~~titi~s ?# sisai d i~ai~~, ~es~it~ ~s~d ~~~i~atie~s~s. ~ 1~~- ~~~ c~##~~ ~# t~~ s~~~~~~~a~h ~li~y3 ~?~e~~~, . may ~ t? Ie~~. t~~~ ~ pe~?i w~ a t~~ ~~il i~~ ~i~ t? s~aip ~a~ts #x?~ ~a~a stoeP~pai~s ~~ k~e~~ ~a~st~d-~~ ~~~~~t ~~~ucti~. h~.s ~~t ~~~?n~re ~~~c?ti~~. _ t~~ ~iD~it~.ry ~.~~i t? ~?s~sc~li~t~ ~~~t~~i ~ ~~,~.~a~ d ~a-~t~a ~~ ~~~3i~~ ~~ti t~ ~~.?~~ s~~k~ ~?~s?3ii~~ ~iflg cue gor ~ i~?i~~i~it~ ~i ~~s~it~ ~~te~~s ~y tk~~ ~'~ ,~~~~ity Caacii to s~~~~ ~a ~##~~t~.?~ t~?a~~~.~ ~~~ ~~t~~ ~ ~~sti#y f~~~r ~siiit~y ~.~f?~ ~y tie cfl~iffi that ~~ii~ t~~~??~^is~ ~.~ti~.ty t~~ate~s ~~?~~~ wi~~i~ e~.s #?~ ~~i~~ t~~ ~~ ~ ~:ssa~~~~ ~~s~~sibiiaty, ~h~ ~~~ii~ w~l jaasti#y its ~.~ti~~ ~a ~ ~~~~s ~.t its d~ #~,yt? ar~th~~i- ~y ~~~~ t~~ ~~~2~s ~~~ ?~~i~d! by tta~ ~c~t~~ ~~~s ~i~a~~y ~~cmmi~~~ i~ t~~ L~~gad~ati ~~~~~~~ ~# ~Ia~~h ~~47, w~i~~ s nit be~~ ~##i~i,~- py r~~i~t~d. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 1 Vl vL' vill'i 1 t~ e~~ the ~:a~~~t~; ~aet~ee~ e ~ethe~~ ~~ the ~e~I~~ ~t~x ~e ~e~~ye~ ~y the ~~~~,~~ee~e~xt ~et~~ee~~ the t~~ ~a~t~s~~ e~~ the c?~~,??tt~~~ ~ f~~ ne~~t~~. ~Rhe ~~t~h ~~y that they wtA~ ~~t' ~ae~s~~te ~~ the ~e~~tc ~At~ v~~Ie~ce ~~ ~aib~te ~e~.~e~ ~hxle the e~~~~~~ ~e~..~~ thag t~h.t?~c~s ~e ~~~~ t~ ~~~~tie~r~s held ~.t the ~~t~~~e~~ ~~ h~~tiFtt~.e~ bed?~?e ~t w be~i~t peg?ti~.ti~~. P~s~t~?~.~;te~ de~~y ~~e~ t~~ ne~~t~,t~~ ~,~~ ~a~the~ ~.el~y ~ t he p~~~e~~ ?~ ~e~?~t~~t~ ~he~ ~.~~de~,~e~ may I~a~ the ~aat~h t~ ~~,ch ~e~f~e~ t? e~~~a~~te the Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? 1 Vl ~7i`iVilL' -1 ~;~.~s~.d~?'~ d~~~~f~~~~f~ d~ff~~ ~f~f~~ f~ ~~~iu~ ~~~-~ 1~4'~ .~~ d~f3~.~ r~~~g~~~~.~ ~f ~ ~ ~f.~lf~~~. ~f ~~~ ff~~~ ~~z ~3~?nt~ ~~ ~~~~9 ~~,'~ d~ff~~~ ~f~~ ~ ~~ s ~~~ ~iflf?~ da~f~~s, ~~~~f~ gal ~~ ~ deffcf~ f~~ off ?f ~.~~6, ~~ ~~~~ ?f d~ff~f~ ~f~~e R ~~1~ fs ~e~g~~d ~? b~ ~~flf hf~~?;x~. `~~~ i~~ d~ll~~ c~f~f~ wfif pra~~.~~~ ~~~~.~a~~ fie' g~~~~f~:~ ~p .~ f~ ~~~~~~~y f~ ffi?dif~s e y~~~~~re~ ~s~~z~~~ ~r~~~~~~ ~~e UI~ s ~~~a~ ~ if f~.~ ~~f~~ ?f f~ ~'~~~.df fffi~ ~wff~ ~~ ~~f1~~~. ~ff~ ~~dfa4?a~ ~~B~id d~~f~~~df~ fa~efe~ ~~~~?~~t ~ ~1~~~~ by fa~~~~ ~~ ~? t~~ L~~ ~~d ~~ ~ff~~tf~r~ ~~l~ff~,~~i ~~~d~ ~~?~.~~~~~~~ f~ f~ ~~s~~a~,~ ~.~ ~~.~~. mil f~~l fffi~il~d ~ ~~~~ di~?e~EQ f~~~df~~~ ~~ff~f ~~f~~~ ~~~ ~~d ?f i9~`~. ~~~ ~~~n~ ~~~~ ~s f ~~e~g ?~ ~~r4 ~ ~~?f~~~~~~ $ e~f~~ic~~ caf f f~~ e STS a.~d ~~~.~~~ b~~f in ~~~ ~~~~If~~ ~~?~~.. ~?~~ v~a~~~.t f~ ~~~ f~ ~~ ~~f~.~~ ~a~~~ ~a f~~f ~t f~~.~~ ~~~ ffAf~~~ d~ff~~s. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? `F J - - .....v- ~~~~ T T 63 ~?%t~'EI3TS Pages ~R~~sI?~~ ............................... i-~~ AR~IG~~ ..................................... 1 - 16 ~'ransgsortatioa~ Problems .~Ifect~tg ~upopean Reco?ery ... e . 1 l~Nfgu~~l$$tf/yyila$t.~ear~na~l?At~ T~'~g~aAri~spoaj~ Ag~ee~.ent ......... , e ... e . 2 (~?YS~it 8d1t5ibit 6o~S 48d C~.6d~t~ba? ? ? e ? ? e ? . ? s e . ? e ? ? ? ? ? ? ? . e Forces YTnaierffiin~g ~'~ranco's Positfon......... ? :..... fi ~e GanAle's Fte-entry Ito Politics ..... ? ........... e . 8 ~o?iet P~eopagane~a Reflects Ndouaatiaag ~l'S-~S~R ~ensioa~ ..... 9 Possible Pro-So~fet Agign~ent of~ the Do~~'aion of India.....10 continued Agitation f?s Greater Syria. , =:......... ? .... ? 12 French Suppox~ o? Sao I,~a$ ...... ? ...... , ? .........13 Rio conference Sets Recognition Precedent ....'.........15 Document No. V~ 7 HO CHANGE in Class. DECLASSIFIED , 'lass. Ci1Aiv'G.~D T0: TS S DDA r,4emo, 4 Apr 77 Auth : D.~A `'~:G. 7'!1763 Date: .~-__7__-~By: ~,,! TAT Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~'REY~I~S YloT gIYtYEF GEI~tE]ftA~ Yn~reased distribution of Ruhr coed could be effected if the US and UR approve the "liagc~e Agree~aeat which v-ould resuffie ate traditional use of Country po for imports into western G-erman~a see page p~. Discussions on civil ais?~olicy bathe US, the U~, and France, to be meld nett meek in I.ondora, wild fux?ther improve the outlook for a multilateral air transport agreement at the Frio ~;o~ere~ce of the Internati~a~.l Civil Aviation Cgganization in ?ctober see page 2~. the e~.n and Fresidea~.t Aleman. `lime sai~ning of a t~S-Zo~exican air a~~reement at this time a ma.~or step toward tine orgariiza- . tioa~ of international air transport throughout the western Remisphere and ~vouRd enhance the prospects for a rnuRtilateral air transport con- vention along the Rives to be advocated bar tine I7S at the forthconsing civil aviation conference ifn - iv - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ' Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRE'h A~~gC~~ES TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ' Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '1'O:P SECRET '~'~.AF~SP?R`~ATY~~T ~R.?lt3f~NIS A~F'EC~?~i(~ Ef3R?PEAfl~ ~.EC?VEgB.Y Western European co~uatries ~aow conferring iai saris ~ the European rec?very program are becomia~g increasingly concerned over the possibility that ~JS and bi~onafl authorities in Germany v~ili snot approve' the proposed "fliague Agreement, "~ which would resume the traditionafl flow ?f imports into Cermar~y through the low County ports and subsequent transshipment by barge to the Rhineland. `the Western European countries apparentflyr feel that from their point of view ft would be incongruous for the lTS to urge ~thean to ta-~e ~?adicafl measures toward reorganization of economy on a Europeyvride basis, while the ~S and , at the same tinge, .con- t~ue the inefficient use of giambu~?g and ~reanen as ports of entry for western Oernaany because of currency considerations deter- mined by zonal adnninistrationn policy. Europeaa~ misgivings in this regard are accentuated by the present bottflenec~ in Ruhr coal distribution. 1Vlore Ruhr coal is currenatiy being proda~ced thaga the deteriorated Berman rail facilities cans haul away. The European countries nnaintain that if the Reic~sbahn could be relieved of traffic from ~aanburg and firemen which can be barged up the Rhine, more Ruhr coal could be moped, thus benefiting the entire European economy. before the BdS reaches a final decasion on the European rec?~-ery program, it is prob~fle that other questions in the field of tra~..nsportation will be raised by European countries. Continued transportation of relief supplies fin TJS vessels, for example, gnat' be questioned on the ground that European countries could receive a greater quantity of relief for a gieen cost to the LTS, if unrestricted transport in European bottoms were permitted and if idle LTS mer- chant ships were made availabfle for operation by the European countries with their own crews. -1- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET' 1`4~71~`Iuld presumably indicate that the Communists no longer viewed optiffiistically their chances of success in France. E.f~STEIt1~3 E1~t~JFE The tactics of the I3SSI1 iri the U~ General Assembly, which is to convene in September, are probably foreshadowed in current Soviet propaganda (see page 6). Soviet attea~apts to improve l~umanian rail tran~ort, throaagh the centralization of control and ~e extension of existing lines, will probably not elinain~.te the f~nndamental wea~esses of the fall. railways see page S: sand insert) Ai> ~.ines of the Satellite States have been barred ffrom Turkey and Greece; similar action by Italy will prevent these air- l~nes froaa~ obtaining access to the Near East see page 11). `The recent trials of ffienibers of the Polish Peasant Farty reveafl again CoYnmunist determination to eliminate all opposi ion TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET parties. The arrest and trial in the au~~n of Opposition Leader Il~ikola~cz~k is expected as a culxninagion of this policy, despite Churchill s assurance that the UI~ would guarantee his personal safety upon. his return to Poland. Future Coanraaunist strategy in Czechaslovat~a has bees clarified by recent denunciations ~ the Comffiunist press of the rational Socialist Party (leading opponent of Communist leader- s~nip). It is expected that a concerted e#f?rt will b~ made to weakea~ all Coffiarcunist opposition ~ Czechoslovakia by means of propagaatda, parlia3nentary action, and e~etra-legal anethods. An exodus of Greek Coxnnaunist leaders fronca Atheais has been ordered by fhe I~ Central Committee. This order reverses previous instructions ~!ahich kept Conaanunist leaders in Athens de- spite mass arrests by the Greek Goeernaneaat. It is a further iridi- ca~on--together wiith the USSR ~retoes !n the" Security Council, the recent establishgnent of a "free" Greek gov~rnmea$, aagd the with- drawal froffi Athens of Satellite diiplontats--that strong, taaidisguised anilitary action against the Greek Governmeatt is imuninentp ~'ESTEItl-1 MISP~ERE Communist domination of Nls.rtbnia~ue has been achieved through tactics and appeals which could also be successful fn Panama and in nearby British possessions (see page 12). ~~onomic pressures in, brazil are forcing the ]Brazilian G~vernanent 1:o abandon a cautious financial policy said adopt ex- pansionfst measures that zney be harxtaful to US interests (see page 14). TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ARTICLE S TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET I~~BaD~I~ E+~~I~4?1~F~ Ctal~'t3ITI~t~ l~ ~?fft'~J~AI~ The Salazar regime has been substantially strengthened by e accoaxaplishanents of the new ~~Iinister of Economy whose trfr~or- ous campaign to bring down the high cost of lfving has ia~aprotred~ the economic situation of the masses, increased ianportatiions of foodsf~uffs, the repression of specula$Zion, and the removal of con- trols on intea?naI distribution movements ha?e forced down the prices of necessities. Blau aaaarket operatioaas are now unusual. The I~iinister of Ecoraosny has repeatedly stated that hoard- ing or profiteering would be considered sabotage agafnst the State, and he has prosecuted both rich and pooa? persons who have trio- lamed ttaat policy. .~. salutary effect on public opinion has been pro- duced by the a~?rest and punishat3eut of certain blacl~ a~.rket opera- tors, whose economic status lass taitherto protected them. By ttaus reffioviaag soave of the causes of ptapular discontent, Salaza.r's Goveraaanent teas ob~ined considerably wider sup~ort~ Such ia~aproveaneaat iaa public >r-orale doubtless encouraged Salazar in his recent decisioaa to yafl a~ad prosecute opposition leaders who have long agitated for the overthrow of the regiaa~e. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET UA3REST Iii R`IiE FRL~TCR COI,,C31vIAI, E1t~iPIR,E The French have been attemptfng to meet the social and political agitation in their Asiatic and African colonies by programs of democratic reforms and prorraises of eventual "autonomg within the ~`rench Union." l~atis~e nationalists, encouraged by what they consider the benevolent attitude of both the USSR and the US toward the aspirations of dependent peoples, have become increasingly fn- transigent and have greeted each French move toward improveaxxent with demands for co~rapl~te independence. Communists, both in metropolitan France arad in the colonies, demand that natives be given equal rights with Fa?~nchmen, but insist that union with France be preset?~ed. Because of this insiste~ace, the natives have not gener- ally supporfzed the Communists Tout rather base made appeals to the US and the U~. ?1?his situation not only has furnished the Communists with excellent propaganda material for their thesis that the US seeks tv tape over the French E~apire but also has made other French ele- ffients eemely suspicious of aay US offer to helg France alleviate . colonial unrest. In Eaiorial Africa, where French citi~ensh$p has beeaa granted to all natiives, the morale of the French Civil Ada~aniraistra; tion has descended to an eartrennelp law level. The natives, who feel free and equal, refuse to work. In some instances tribes have re- verted to cannibalisffi aa~d slave tradir~ as manifestations of their indeliendence. French cvlonfal officials trace these activities to the kind of understanding the natives of US interest in colonial peoples and tef the Atlantic Charter. Ira forth Africa, President Roosevelt is quoted by nationalists as having guaranteed the abolition of French domination in that area, aa~d statements by Arab leaders are circularised to the effect that they have received US assurances of support for their aims. Rumors are reported frorra Paris that the US has asked for Ui~erte in e~- change for aid to France; in Nioroc~o, the French Residency makes minor diplomatic thrusts to offset the faeored position of the US rep~?eseratative to the Sultan. In Madagascar, the French are having great difficulty in containing rebel activity which has recently increased. Fighting is ezpected to continaae there for some tune, and order probably -2- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET c~~?t ~~ ~est~~ed ~~attl ~e~nce~~t~~s aye ~.r~e t? the i~as~ar~e~~. E~?e~u~h ~fffi~tal~ ~~?~ ~~~ ~?~ar~ced tT~at the ~~?~ ~~ A~e~caffi ffi~~s~~na~ seat?ureffie~t t? the ~ehels ~ a ~~is alp fact. - `~~~ ~~e~ach ~~?~ h~.~gered ~ ef~? cal?~ial pr~ra~ b~ ~e4 Iuc~~ce t~ ~et3e~e t.t .eta P?~ictee, ~ae~? the the .ch~a~ tip ~~ ?t~~ex~ p~we~s, ~~~ tDe cau~t~~ cal~tia-1 u~~e~t. Un1e~s E~ar~ce eaa~ de~~~ a ~~a~ ?f c?a~uctfve sefe~~ t? p~e~e~t ?~~ a~~~?~.~ a ~uh~ect ~~~tes ?~ the c?1?~ae~ ~$nstead ?~ f~~ ~~~~~ ~?et?r wkth?~t ~de~a~.te c~~at4~tt~~~m ~ut~a~e de~t~tcans ?~ ~?l~~ial ~atter~ ffia~ he tee ?ut ~a a herds ?f the ~?~e~ch ,A,~~ei~ b~ Batt?e i~.c4t~~. -3- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '.COP SECRET FRE~~,~ S~f~LIS~'~0~lYU~" ULEAVAOE ~'he ~aetween the French Soc~.lists anti the Coan- raists has so widened that the fatter were aisle to obtaia~- recogtl nitdon from. even the left wing Socialists at the gecent Sdcislist Panty congress at t~yon, although both gronps~ once ~d a close . worf~mmg relationship. loot only did the .Socialists ignoge a Getter ~to a coYZgre~s frown Co~-~e~nist Leader ?~horez, bot~they also charged that the USSR still holds S00 ffiilitant Socialists iffiprisoned ~.t the concentration camp in 7Suchenwald. Thati the Socialists rernagn se~.sitive to ~Gornanunist iaafluence tarn tl~e:'eft ~~ of the electorate was shown, however, lay the ~.ssage of se?era:l resolastiosas which urge the ~overn~ent to follow ~ grogram of stricter socialist te~:ets which would appeal to the worms cl~.~ses. In this n~asaaaer, ~e Socialists hope hotly tca coasnter rece~at Coffi~.asnist charges that the Socialists are `sliding to flee R.i,ghg" and to hid for. the worki~-class ?ote ita the fall mu~aici~l elections. , -4~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET f~O~I'11TY0]~S IN 'f'FiE SC3~E?i' ZONE ~E~~ In the opinion of ~om~unist leaders in Germany, the efforts of the IISS~ to comanunize the industry and agriculture of the Soviet Zone in Germany are failing. Thus far, such ef- forts have lowered production, increased prxc#ion costs, and alienated the Gera.n people. Respite preferential treatment for high producers, pro- duction per worker in state-owned plants has.been steadily sink- ing, while costs have risen. '4Nhen the industries in the Soviet o~~e were socialized, all n'anaging personnel unacceptable to the ~TSSI~ were removed. The new managers, while politically accept- able, h~.d neither the technical skill nor the experience to fill their positions. The workers are discontented o~rer the low food rations, the lack of personal profit, and the fact that efficiency and effort are rewarded only by increased quotas. The results of agrarian reform ~ tiae Soviet Zone are simi- lar. ~'he failure of farmers to meet their qu?tas has led to the imposition of stringe~tt controls. The a?erage farmer finds it im- possible to aueet ~s obligations because his necessary, expeaaditures exceed his earnings by as much as ~5~ annually. The agricultural crisis is caused by faulty administration and lack of basic equig- anent, hence controls can not ignprove conditions. Faced with this impossible situation, increasing numbers of resettled Geruaans are. deserting their .land. A raew series of Industrial dismantlings by Soviet officials has seriously impaired the railroad lines and coal mines which are desperately needed In the zonal econo~.y. The ~JSSI~, pessi~aistic about its prospects for rapid westward expansion, is apparently willing to forego eff~arts t? gain the good will of the Gerffian people for the short-terarn advantage accruing fro~a the seizure of German inciusta?ial equipment. -5- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~t?SSIUf,E SOVIET TA~TYGS IN TUE GEI~TERAI~ ASSE1t~~LY' ~dicatzons of probable Soviet tactics iu-the ~epteanber ses- sion of the i~ GeneraY Assembly are to be found fu current Soviet propagaa~da. The USSR's principal target will probably be IBS economic aid to Europe. In e~te~sive treatax~~t of this subject, the Soviet press has charged that the purposes of the program~areo (1) to destroy the sovereignty of the recipients of ~JS aid; (~) to snake all Europe an economic vassal of Fall Street; (~~ to rebuild the econoffiic foundations ?f fascis~o.; and (4) to revfve German miYitarisxn. So~ef observers contend that the Nfarshall proposals are ideaatical principle to the program of US aid to Greece and `1Curkey, and they argue that the proposals are ~ direct violation of the principles of the U~. USSR representatives irn the General Assegnhly are therefore likely to advocate Ul~t supervision of the European recovery program and m~.y seep to place it. under the Economic Coffimission for Europe. Another favoa~ite topic of Soviet propogandists has been "western imperialisan" as exeanplified by the US, the UK, and the ? ~ietherlands. In order to gain the favor of colonial and ses~-i- dependent peoples, the USSII. array endeavoa? to briaag this issue be- fore the Assembly anal rcaay try to enlist colonial support for a resolution the withdrawal of all foreigai troops from non- . Axis territory. Soviet writers and commentators continue to eaaphasize the subject of atomic control, and an additional zmove by the tJSSI~ before the A ssernbly will probably be the revival of this issue in connecti?n with a proposal for general ciisarffiament. The ffnal position of the USSR on the Greek-Balkan situation, recently placed on tiie agenda of the General Asseffibly at the instaaice of the US, is still in doubt. There is, hove?er, a very real .possi- bilaty that the fall Satelflites, and perhaYis $he USSR itself, will sever relations with the Greek ~overnmeaat at Athens and v-ifll recog- ni~e a provisional Greek Go?erument bbefore the Assembbly coaa~renes. (The Ii'SSR and the Sagellites have already reca.Yled most of their diploffiatic personnel from Athens. .Soviet and Satellite recognition of the Greek insurgents would not only present the Assembly wfth a -6 - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET f~ ~t acca~~~~ hnt ~c~~~s~ enatale Sv~-fet deTegate~ tQ argue that the changed s~tuatf~ had made the ~fnd~xigs ?a~ the ~a~an Tnvestigat4 Ong Gor~axn.i~sxcn fa~relevaxat. 7~he S?~et ane~ -~ate~.lite c?elegaticn~ ~+ght then as~~~cate that ~. degree of recogntt~?n, st~f~.r ~rha~s to that accorded the ~d?ne~.~9 he gt~en tae pro~s~.?nal Greed Ge~c~rx~snet~t by the ~,~'. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20: CIA-RDP78-01617A001900020001-8 I N S E R T O Declassified and Approved For Release 2013/06/20: CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 BALKANS INTERNATIONAL >~ STRATEGIC RAIL LINES (ONLY STANDARD ABROAD GUAGESHOWN) COMPLETED RAIL LINES ---- PLANNED EXTENSIONS WAR DAM AGED LINES INCLUDEDI q ~p '4?_ i$o zRo __ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET RAII.~ TRAATSPDRT I1~1 RUMANIA While the USSR will undoubtedly improve the operational efficiency of its Satellite raft transportation systems by centraliz- ing their control in Moscow, neither tighter control nor the exten- sions now under construction will eliminate the fundamental weak- nesses of the Balkan railways. The recent Rumanian USSR railway agreement probably indicates Soviet intentions with respect to the rail .systems of its other Satellites. By this agreement, the Communist-controlled Government of Rumania has virtually abdicated control of its rail- way system. Soviet military freight traffic will operate through Rumania without Rumanian knowledge of the nature of the shipments and at no expense to the USSR, The Rumanians, furthermore, have resumed construction on large-scale railway projects which were instituted before 1939 and were continued by the Germans. The USSR apparently considers these projects sufficiently valuable to warrant the expenditure of substantial Rumanian funds and re - sources which might otherwise be applied in part to the reconstruc- tion of railways within the USSR. This emphasis on Rumanian rail- way development is parricularly puzzling because the Rumanian railways are not aow operating to capacity, and their operations away be further restricted in the future by fuel shortages. The new lines, moreover, do not appear to reflect compelling economic con- siderations from the point of view either of Rumania or the USSR. The fundamental strategic weaknesses of the Balkan rail- way, system from the Soviet point of view are:. (1) the change of gauge between the Soviet and Balkan networks (it would be far more difficult, for example, for the USSR to widen the gauge of Balkan lines during offensive operations than it would be for an fnva.ding enemy to narrow the gauge of lines within the USSR}3 (2) the limited capacity for movement of freight between the Ukraine and the Upper Danube on first-class rail lines over level terrain; (3} the great barrier of the Danube, which is crossed by no rail bridge for 400 miles between Cerna Voda and Belgrade (the only trans-Danubian rail traffic along the southern border of the Wallachian plain is funneled through the Giurgiu rail ferry); (4) the lack of an ade?luate rail network along flee Dalmatian and Albanian coasts below Split -g_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '.COP SECRET for the protection of iax~por~,nt irommunist positions at the head of the Adriatic; and !;5) liffiated rail connections to the Bosporus and the Aegean. Tl~e above weal~nesses cannot be rapidly eliminated. (1) There is no solution to the problem of transshipping freight where standard and Soviet broad gauge lines ffieet because the Balkan lines will reffiain standard gauge or narrower. Tt appears that the T1SSFt, however, is requiriaag that newly-constructed and strategic lines provide the necessai?y road 1~ed conditions, as well as bridge s.nd tunnel clearances, so that widening to the Soviet gauge could be quickly effected in an emergency. Even this expedient, however, would be subject to severe practical disadvantages. (2) Through c?nnections across Ttumania will be somewhat unproved by com- pletion of the Graiova-Bucharest-Faurei-Tali trunk Tine, parts of which are in operation. Because the existing line to the west of Crsio~va is single trac&, however, this line does not actually pro- " vide an additi?nal artery up the Danube ~.lley. T'he ~ransyl~anian network, ckearacteri~ed by limited east west through coaanections, will be somewhat improved for So~ri~t use by the repair of exten- sive war damage and by the conaaection of two minor lines which will foam a link between ~ernauti and Sighet. (3) There are mo sig~as of bridge construction on the Danube of of the ins#allation ?f additional rail ferries at three points where Rumanian and Bulgarian lines approach each other. f~~) A large part of Yugo- . slaves will- still leave only an inferior narrow gauge network, and Albania will nndefinitely without international rail conned bons. ~~) The Gommunist~controlled Ball~an network provides only a single rail line for 200 miles to the west of Tstanbul; rail conned bons t? Salonil~a consist of only the line in flee Vardar valley of Yugoslavia and a vulherable route from Bulgaria along the. Aegean coast. `T'he latter line runs through Turkey at ohe point and, accord ingly, could be used in an emergency only with Turkish acquiescence or by employing force. An additional line from Sofia down the Stru~na alley has one section o$ ~arrow~gauge line, partly in Greer territory, which could be changed to standard gauge by anyone con trolling both sides of the Greer-Bulgarian border, The repair of a bridge at kteni will effect the most important strategic change in the Balkan ne~iork by substantially increasing ~9- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~a~ ~alaa~fli~f~~ ?af ~ USSR ffi~~~ f~~fg~~ i~ ~~l~~~f~. ~~i~ ~~id~~, wf ~s~ ~~ii ~a~~~~ ~+~fd.~e ~i Cea ~'?da,, will p~+~? ?fd~ ~f~Y~~~~p~~d ~afl c?~~ti?n fr?~ f~~ iT3S~ fi~ the ~ul~~,~a ~ki~~ rd~~. !~ gill ~1~~ P~?~de a la~~raA ~~~~~~ between ~~ ~ul~i~, Rui, ~~ad S~~et ~lacl~ Sep ~, e~ti~el~ f~degende~t eaf ~ cold Raarzf~.~ fli~t~ #~?ffi ~ea~~~~t ~h~?~a~ Ffa~e~~I aid ~'?~~i: ~-~~~~ de~vel?p~t.~ wf11, i~ fait, ~~?e~te ~ Y 3~~ ~~e twee ~e~~~ate li~e~ f~~~ tae S~~let ~~i?ra ~~~~~ w~.rd, ?aa le~l ~~?d, ~ the ~~,~~ ~f a ~~a~~ylnf~ ~lg~: ijl~ Cep?~l'~e~ti ~~~ba~e~t~~af?; ~~~ ~.~f~~`a~~ef~~~cba~e~t~ ~fi~~u; d (~ ~ , e~sa -~~afl~. ~ ems. ~a ~~a. W~fle a ~~.fl de~el~sP~e~~ ~s Rumm~a~i~. d~ ~?~ ~ e- ~el~es ~t t~w~,~d an fa~ffi~.~ent ~ilfx?~ e~e~~e~c$ i~ P~fs area, tfiey will i~crea~e ~?e~rv.t tie S?~et ~ili~ ~te~l i~ ~ulria. yt i~ entirely ~.:~kely~ tit these de~el~p~en~ represent ?~y tlae be~i~~ ~f ~ Pr?~~?affi which ~ USSR will Iate~? ee~d aid make ~~re de~isi~re> ~l0~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~~?1~~~'ES O~ E~STEi3,N EY3~O~'E.~N ~E~NES Eas~:er~ Eur?~~ ctrfes, ~itk~ the e~cepti?~ ?~ Czech?~ sic~~ai~a, ~~.~~ thus far e~ctered de~er~ined ~~~sasftf~ ir~~ ?i?~arl~ey ~~ ~~~~~ t~ their ~bjecti~es ~~ establishf~~ air rtes t~ the Near East. ~~ ~taiy ahs? cc?~erates with tae ~esteri~ ~?~ers ha YS respect, it appears 1i~~iy th~.t afri3~es ~~ the Satellite States ~ilY k~e pre~e~ted fr~ffi atY~.iuha~ heir ~.i~s. Tea his i~pass~, a Satellite States are atteuagtia~~ by cievf~s ffiea~s ts~ ?v~~rca~ffie Turkish i~atra~asi~effice. '~'u~~s~.~, had hyped f?r ~rita~sh a~ista~ce f;a 2abfai~~ ~.a~as ruts ~ ~'~riCey i'?r tEae '~u~c~sla~- afrli~e thr?u ttte n?~ suspended tea. ~'~~?sla~ air discussi~s. ltuaa~a~a'a afres~t have appa~?entAy ?~erfk~ Tua~~ish ar , ~ree~ tea~rit?ry at high altitude ai'tes laavi~ secured ~.a~din~ ri,~hts ~r?~ Leba?~~ and ~"~.lestine f?x? sge~gal ncm- sc~ieduied f~hts. ~lthc~u~h it may be beyond the capilities ?~ e hard-pressed ~?yal ~Iellenic Air ~?rce t? futerce~t flle~l traffic, it is well ~ithfan Turkish capatailities tea prevent such ?~ea~~flights. The Czech?~~!cva~~ aide, which has been denied perffiis-~ sf?aa t? ?ver~y Ruffi~~fa enr?ut~; t? T'ur~ey, ~Palesti~re, Ems ~~ - Yraz~ where it has thy: necessary agrees nts, has bee~a forced t? ~y ~. ~i~?~ait~s r?a~te t? the east ~eiacie, Rc~~e, a~~ ~,tk~ens a if ~. ~olnsh air agree~~at nth Ytaly $s con~Iuded siffiflar to that a~ep~rted t~e~een Italy and Ra~aa~f~., a passi~flity e~sts that the Po~.ish ~.i~^line~which, altiaoug~ lag dig r~.ghts ~ ~~?eece, has Egyptian :sanding rights ~~.y ~e its newiy_accluired f~r~e~_ ~e ~re~ach :;.rasp?:~tts for direct flights fr?~ an Italian base t? Cafr?. ~ current ~u~ attex~npt t?~ aYi~a Italy witia ~lestern Eur- ?pe ~ ~rnatters ~ air p?lfcy old, if, successful, prevea~t such a ` de?elop~ent anal thus bar the Satellite States ?roan the o~ae re~afn~ ing route to t~~e Near East. _ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'rOP SECRET ~ ~M M ~P71~UE "~`~~ success ~f `the ~?ffi~au~ais~Party iaa ~ar~ini~e, where it ~ used ~.ctics that ~.~~ ~?tia adaptable ~ all ~ariialsea~a a~?e~.s in which ~~~ ~?cfial d~vi~~?~~ f?ll~v racfal lames, a~ad ~ar&~edly different fr~~ th?se it h~.s adapted ?ver a h~~.i~~~ere a~ a wh?1~, ~?w ~~~ ~.ssured. ~'iae island's Gr~peent Repaablica~, ~~~?~ c~?atigbae, et S~cl, a beYated waited fr~~nt ~f anfii~~~mu~aist ele~era~, cans?t th~~~f?~?~ ~ inte~?~~~t~d i~ terms a~pYi~a~l~ tea ~t~~~? We~te~?a~ ~e~isphere sa~atflcns. Such a ~,?ve elsewhere iaa a Americas would be likely ~ presage i~~ediate ~?e~rses fir ~e ~~unis. ~a aclue, where a ~~r~a~unis ~~ already w?n ??~r a a.~?a~ m . i ~f the i~la~?~ Qtw~ ?f ,~~ie'~ three deletes ~ the ~'rencia Assembly are ~~. axaeers, as are berth its del~.tes t~ the French ~~~acil)~ if i~ sera effip~ ~~~~~~. ?~~~ ~artini~ue ~?~anu~is~ ~~ f~ll?wed ~ clasffii~al ~.~st ~~??gad~. pa~ea. ~t b~ddi~~ f?r ~ sup~a~?# ?f tpae i~n~ ~verished Ne~r?~~?rity ~f the islands ~~alatic~n, they ha?e firmed ~.~en~~u upmmn ,tla~ rich whites as ~~ direct cause ~f ~ ~e~r~ ~ ~~? a ~?~ic alas; fey eve pr?fsed ~ l~e~?es ~ siu~ ~f the lame l~.ndae~s,-and fey have identified the ~~~ffist Party wig ~ s~?ule f?r r~.~ial eaYi~, istf t~~.t "f?r a Ate t~ ~~ at the f;?~xan~unist Party i~ t? ~~ a.inst laielf.'' ?~hey have ~~ s.Yful use ?f "e~sidence' a ~f a alleged rcii~ati?~ mf US Y~3e~re~s, ~f US ly~c sta~sti~s, egad,?f the supposed activities ~' the ~u . Klan; and they ha?e da?iven h?uae the theme tint the "~ag~i.l~st~?~i~ Hated". US ~vern~ent Ynust, if fir n~ Bather ~eas~n a because ~f racfal. ~resi?aas withina its fr?ntie~s, act as ttae natal enemy ?f s?cial pa?ess and dean~cracy, and thus as the natuaral enemy ?f the, USSR. ~'he New?esy cana~alete ids?ran~e ?f the ~~liti~al, e~?~i?~a~e and social eharac~r ?f the S??iet Uni?aa has these been ties Ceananau~ Baas' ~.aj?~ aYly. ~iae artini~ue ~~~~unists? enapi~sis upon aan el~~arian redistributi?n ?f wealth at fie' sense ?f tie whites is sharply at variasace with ties ~?llab~ratf~~aast appr?ach ~hhe C?ffinaunist~ have adapted in a repaabYics ?f Latin Affie~?fca. were they have made ~12- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET no use of theffiaes c~ance~ed with social revolution but have based t~efr apgseal ra$her on a va~ae concept o$ "democracy" and upon e~pp~~sitfo~a to ~i3S a`i~peris.lisffi." The ~on~naunis4sD success 1Viartfuf?lue is attributable to: (l.) the frame use of racial conflict in thef~? propaganda; (Z) the early de~oralf~atio~! and continued disunity of the island s ~,ntf-Coin$nc~- nists; and ~~) the fact that the island fs represented in a legislative iaranch of the &'rene~a C~overnrnent, which means teat any strength the fwo~x~a~~u:is pick up fn lb~artiniq~ue can ~.ake itself felt in the dit~Tsiox~ lobbies in Paris. `There is no reasoa~ to believe that spznilar ~ontnzunist tac- tYcs will not ~,ay large di~tidends in Other racfalYy-div$ded ~Caribbeaa areas, loch as the ~3ritish ?Yest Indies and the republic of Panama where ~r4tish ff~est median workers. and weir descendants are a substa~at~al a~i~nority of the p?pulation). Although ~llartinique under ~ounist ~ox~trol w~1.11 naturally be hostile to the US and will pose special l;roble~s %n this con~n+ection because it ias a European dependency, it fs unlikely to cause naa~or dif~.culties so long as the French colonial office for other controlling agency) is relatively free of Gosnnzunist domination. but if the Corn- ~~~.nists were t? comae to power ira,Erance, .rtiniq~xe would as a m~.tter of c~aurse become a potential base not o~all~ for the sg~read of ~oxnnaunissn in the f;arfbbean but also, because of ifs official channels of eo2~~iuni~ation with. an frx~por~~at Co~~uraist power in Eurr~pe, for batelligence and espionage activities directed agafatst the entire laemis :here. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~'~'~`~OF~.a~~'t'~ P~ESS~J~,E ~R.~~~~ Exporter ai~dda~~r~a~i~t pre~~ure i~ apparenp f~rc the ~$ a~ilian ~e~-~ent tm ~.hand~n its relent Kati?~x~ ffnancial ~zic~ fi~ favor ?f ~xpan~i~ni~t ~e~,~ure~ t~;~t ffiap accenYu~te present in~ flaticanar~ treads, sharpy ret~.rd the devel?p~ent ?f a amass market f?~ ~JS ~~ds, and disc~ara~e fure~A 3~S investnar~n~. Such decent event ~r~,~il as a marked decligae i~a experts, ~. ~~?e~.t~r nu~~.~~er ~f har~gtcies, ~ sharp fall ~?l~e ?f ea1e~, and ~.~ alar~in~ ~~~~h sh~rt~lived ham , have heez~ interpreted h~ ~.~~ i~efa~k~nxed ~~servers ~.~ indicat~,c~ns that ec?n~na~.c re ~ , ~e~~ia~~ ~.~ ~~rnine~,t. ~?he exp?~rter ~~.ndustrialist ~r?~~~ ~?ntend th~.t ~~ i~it?~~ p~lic~s i~c~~d~~ synch ~e~.~~?ee ~~ credit exd pa~~ia~r~ and excF,n~e ?~epm eciati~r~, w~.:~l prement the recession. ~epreciati.~n, th~~ sad, will help ~ra~il t? ffieet the ~~?w ~?xnpetl titl?~ t~~e weld market ~.nd close the ;map he~ees~ exerts aa~d a~.r~ts, while relaxatia~n ~f credit c?~tr~ls will he~.p entrr~pre~ea~rs t? .in.~ the hi~h~p~??fit ~ar~has which ~?derlay the war-tl~e and nedia~te pa~st~war i~aterl ~~ffi. `~ ~i~ ~~?erne~nent needs the supp?rt ?f these ~r~ups and w?u~id, therefore, p~esu~.ahl~ like t? meet their wfshes. At the sane time, the ~~vernen# i~ clearl3r reluc t ~ depredate the ~~~~~~?, s'ce d~~r~c~~ti?~ w~~l~: ~~~ ~~~~~~ the ~?~~ ?f ~er~c-~ i its f~rel~~ duty Q~) reduce i~ capaciC~ t? iffip?r~ ur~en~pm needed g~hli~ w~rkw~ e~~aip~e~tt~ and Q~) ~ interpreted b~ p~atentfal f~rei~~ ia~~e~t~r~ as evidence ?f ~c~~n?mmaie ~stahi~.ft~. O~, the ?ther hand, ~~~.~il cast e~.sily e.sad credit furer with~axt deprec%at~ ,~ the cra~~eir?, ~i~eeget~,ri,~e i~ g~~?ieeg~,yat eredgit e~~.~si~n w?~lgd~ ~~d t? ~~??d~$~P. w~~~d,. ~fi4 k.b6~ e~.S~w~~~~.e ~S lke~yl'~~.'~~~8?~, ~~.~~~.?e ~~?~3s~ and furth~:r the ca~~r.~etry's exchae p?~iti~~. C?nt~eenatly, the ~ve~ent appears ~ have made an eff?rt t? find s~sbstitutes f?r a tw? e~.~~~?e~ a~r~ed ~~ the e~?rtea~ ~ir~d~~i~ciist ~ra~p~ fir er~ple,, the 4~?Ia tariff increase it .s sp~~~s~red at the ~? ~~nference i~ ~enee~~. Q~uch an h~cre~,se would tend t? reduce !ffi~ p?~ and, h~ f~rcin~ prices up, aid a indtastrial%~~), a~td the pr~p~asal tc~ finance a coffee crop up t~ 7~?d~ ?f i~ current ffiarket ~~~~~~~ ~~ aid ~? the ~~~~~~.~ ~~?~~~~. ~14_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 `~T~aile these sF~hsti~~te measures may sons depre~;iati~on f?~ a ~a~e, pressure f?~ depre~;ia~on wf11 pr~ahahly continue because e haflatioa~ wili paal~. ~ra~iliaaa prices furthier out of line said praise cosh of p~?od~ctiona Since ~ra~il is aaot yet an active aaze~~a? of the ~Steraaat~.o~al R2oaaa~ta'-y ~'aaazd aaad is eref?re free to carte dev~.I~aatiaan to easy leaa~fhv gt sees fit, any devaluation it ffiight decree wo~.ld be re,rded by as?n-~razi~.iaaas as only a first step and w?aald the~?ef~sre ~?ntribute t? the uan~ertainty ~.n~ instabilitg of the eco? aso~ic situation i~; Zrati~ ~.naerflca as a whole. moreover, rthe re- s~al~.nt lack ?f c?nfidr~nce in ~ra~il's ia~a~ediate future would tend t? reduce n iaave: i:~en f~?ogn the f7S {aAtiuou~h e~istiaa~ tTS fn~ ~est~en in ~r~~il ani~ht beaaefit initially frown ti-e continued high pa?ofi~~. Aiwa, any move toward inflatioan seed devaleaation, con- . siderr~d iaa tae Conte aaf a ~~?~.~i~.iaaa Govea?xaa~ent's deanonstrated iazcapacity to deal effec~vely with ate fiscal prbkale~s, suests the ia~z~intn.ce of a "hooa~ and bust$p cycle, at the end of which ~ra~il . can be coua~ted ?n, pleads a threat ?f ~. ~rowin~ ~oal7aniaa~aist ~o~re~eazt, to tta to the ITS f?r l~.r~e-seals finaaaeial assi~stamoe. -15- Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 C42d`~1~Yd~S Pages ~I~EP3I)S ~T ~R,~ F.. a ........................... i - iv Thre~ened C?~lae Qf lf~~a~r .................... 9. IoTew G~ee~s C?nnnffi~gafs~ P~~ o~ Ackaa~a ............... ~ Pc~ssilbAe Changes h~ Saese ~?aee~?~ffien~ o ........... ~ 6i SI7PPI~R~f~1'~~' A~t~litasg anc~ P?liti~a~ Char ~~ C~~naand ~ C?~n~safst~i-Y'ee~e ....................... ~ .Document No? ~ ~ Date: FO CHANGE In Class. ^ DECLASSIFIED Class. CiiA~G~D T04 Arrs77 S DDA Memo, ,4 v Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRE'1f TRE~Y~S IN 3l3I3,IE ~ GEPEE~ L The threate~aed colla~ase of Iranian Airways ar-ay eliminate YIS garticilration in air transport in Iran. and precipitate a struggle for garticigation by other Bowers (see page A). Gro~~ as re~.rks on 1.4 A,u~tast in the Securit~Council, iaa reply to the YJS warning that abuse of the veto inay lead to YIl3 action in Greece througFe recommendatioa~s of the General Asseffibly, indicate that the YTSi~Yt anticipates possible withdrawal from YTI~ tapon finding the veto nullified by anajorityrsale in the General Assembly. action coucer~ain~,so~erei~. -ties iu the t~tarctic may be u~idert~era by the YTS before the begiaaning of the fforthcoming Ant- arctic stager season. The ~ fe~~.s that continued inactio~a in the face of Chilean and Argentine "intrusi~s9a into ~ territorial areas xnay weaken the British positiota, and $t is intended therefore to re- ? assert T7K soverei~aty over its legally-established possessions. lEventually, however, the issue of sovereignty in the Aaatar~tic will grobably be broa~ght before the YJ~ or the International Court. ~ESTERA7 EY3R~3PE The YTS Government's ~alans to deal with tae current_aa~cial situation have evoked disappointment, but gold action in carrying out #hese playas c~nld relieve the crisis. It remains to be seen whether the Cabinet will have the political fortitude to act with necessary rtathlessness. The Governa~aent now has mmearly ten weeks ~ which to tatadertake remedial meastares before Coxnaxaons reconvenes. YJnless the situation is clearly improved (either by igtternal aneasure~ or by ' assts#ag?ce from the YTS) withfa~ that time; grave political developments are likely. The Coaaseryative-'Liberal opposition will return with re- newed vigor; the influence of Labor's Reft wing may increase. Either motantigag ptablic dissa#isfactioaa or left-right disintegration within the Labo$ Party cagy precipitate a, general election. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '~ OP SEGRET `~`h~ositiaas of the anti~Couaffisnaist Socialists in ital~ has bed holstered by the recent s~ecess of the L~agdo ~f fission to ~'ashing$on in pxoc~~ria~g a billion dokt~s in cancelled debts and liquid assets. Lo~bardo's new pre~ti~e naay ~~e it possi~ale fog hi~xa to carx~ out his plan for con~ini~~; the moderate. Socialists into a strasng ~.ntipCommauaist force. ~s Fren~ier De Caspexi saaai a~ight-~wit~g le~.ders hn~e ~.rescly approved the eve~at lbxoadeni~?g of the present cabinet to include aa4ti~Co~-inunist b~ftists, Los~nk~ard?'s new i.uenee ~.y en~le ~e Casp~eri to hx- clude such Socialists ~ the cabinet and thus counter +~'omanunist chaxg~s that the present Cowern~aent laci~s ~?rking~cisss reg~xe~ sentation. ' axe ous indices#ions of the semi-secret resuBn tio~x of Spa~aish~JFrench trade see 'P~ee~y Su~nans.ry of g Ault, page ~~ sr~em to lfse coa~fixrtsed by a regent guarded statement by drench ~'?reign llliiaaister ~ida~.t iaeffoxe the ~isse~ly C?~nmittee ~`or-~ sign Affair, oVhile declaring that there would be no change iaa the general poiicy of ~'xance toward 3~a3~ under Franco, ~id~.ult said that he wished to correct cea~ain `anora;alies" resulting from the c2oseci kaorder between tiie two ce~nntries. ?The caution wish which the ~sench Co~ernffient is ~.ppro~.ching this maker sprhegs fro~a fear of fleftist criticisffi of any reiati~s w'ath id r~nco. . ~tet~v ~alaats of action b~ the Creep Coa~aana~ists probably i~tcle~de the establishgnent off a `free eek go~ere~txent f~a the near future at~d further ~nilit~.xy action in noa~thern Ca~eece (see page' ~~ ~ .. Freedom of the rasa in itumanf~. has disc axed com letel under the Coananunist~controB.led Cso~. Co~ea?nane~-t. With the sus pension in early j~aly og the politically indelaendea~t jCTit.N'ALI3~ I3E ~E,A,?T'.A and of LitEP"TA~A, the official organ of the National l= easant Marty, go~ernnaea~tal contgol of the press is final.. ~ the tw~nty.,ot~e dailies re~.ining in Rua~~ia, only three make any pretense of independence, tw? following the. Com~araunist~ line and the third o?feriug no resistance whate?er at pa~esent. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '1 OP SECRET PT~AI't, EAS~d`-AFI~CA R.uffiors of ipcreased Soviet trooa~ concentrations on fran's northwest border remain cuaconfirrned. Sircailar ru~xnors circulated early ~ Jane were not substantiated by air reconnaissance conducted by the US military Air Attache Te~araxa. The fndia~ ,press has sever r*,~critici~eci the tTS for flailing to take a strong stand against Butch actions in Ind?nesia a~td voices the suspicion that the LTS is at heart iffipsrialistic and. sympathetic to the contisnued suhjugatioaa of Asia by the white races. ~y contrast9 the attitude of the US~kt has been given wide praise. Such coffinaent implies that unless positive steps are taken to assusre co~rnplete self- determflnation ~ Asia, US prestige in Yndia ffiay continue to decline and pro-Soviet sentiment to increase: FAl3, BAST The increasing vreak?ess of the Sia~nes~ Uhaxnrong ~overn- ffieot in the face off a possible coup by dissident'-Army elements ffiay ? result ir~t the displasci~eg of Premier T,9ha~nrong in axt effort to re- ianforce the present coalition {see page 3~. The decision of the Securit~Council to ~errnit particit~atfoaa by ~donesia in the discussion of the butch-Yndonesian Repgablic case n~aarks a growing tendency to make the United Nations a foruan in ~vhi~h c?lanial peoples xnay express their desire for independence. The l7&~, France, and ~elgiuffi {the three colonial empires represea~ted on the S~) opposed gndonesian participation because they perceived in the request another ananifestation of colonial insurgence. The majority aneffibers of the SC overruled the legal objection that Indo- nesia had no$ attained statehood and took the vier that the lainggadjati Agreeffient has established the Republic as a de facto governmeaat. This practical recognition of Indonesia as a nascent state will probably give new impetus to the de-ds of ?ther colonial peoples, such as the Arabs of y?rench North A?r$ca, the ~Tieth~amese, and the Sudanese. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOY SECKE'1' WESTERRT HEMISPIiERE Rapid depletion of Iceland's foreign exchan~e r_eser__ves, accelerated by the present poor herring season, is causing marked deterioration in Iceland's economy and may lead to an economic and political carisis early this fall. Continued depletion of the for- eign exchangw may lead to the fall of the present Government and its subsequent replacement by a coalition government including the Communists. who withdrew from the Government when the US- Icelandic Airport Agreeffient was negotiated in October 1946, Latest re its from Asuncion indicate no radical change in the indecisive military situat ono recent ys. a Govern- ment's General Staff, which says it is about to launch a counter- attack, is markedly more optimistic than it was a week ago ~ the grounds that: (1) morale of its troops has taken a turn for the better; and (2) forces proceeding from the north against Asuncion (after being by-passed by the rebels in their down-river movement) will tip the scale in the Government's favor. The situation within Asuncion has nevertheless become steadily more difficult. Business is at a standstill, and a week has passed without commercial air traffic, the immediate resumption of which ~is unlikely. The regular river boats, upon which Asuncion depends for the bulk of its supplies, are halting at a point ten miles below the city. Butter, milk, and bread have disappeared from Asuncion's markets, and present supplies of meat and vegetables will last only a few days. Ecuador has made re resentations,to the Peruviaaza Govern- ment concerning an alleged suurprise~"attack" by Peruvian soldiers at a point on the Peru-Ecuador border. At the same time, it has put officers with special instructions from the Ministry of Defense in command of its two southern border battalions. Peru has charged Ecuador with responsibility for the incident. -iv- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'I OF SECRET' TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOY SECRET TAREATEI~TED COLLAPSE OF R3.AI~IAIR The imminent collapse of Iranian Airways (Iranair) may eliminate US interests in Iranian air transport activities and pre- cipitate astruggle -for participation by other foreign interests in these activities. The financial position of the :airline could, how- ever, be stabilized through decisive action by the Iranian Government. The Department of State has recently instructed Ambassador Allen to urge the Iranian Government to assume control and refinance Iranair. US interests in Iranian Airways are represented by TWA, which owns 10% of Iranair stock and has operated the line under a management contract.. -TWA has been encountering severe dif- ficulties in collecting its overdue management charges and is continuing to insist on payment. This problem, added to TWA's other financial difficulties, has brought the company to the verge of withdrawal from Iran. British Overseas Airways Corporation (BOAC), which may be attempting to exploit TWA's difficulties with management con- tracts in several other I+lear Eastern countries, has proposed a merger of Iranair with aBritish-promoted local Iranian airline. This latter- company, hitherto inoperative, has an Iranian license and would use British aircraft under BOAC management and technical control. Such a merger ~arould be favorable to the ex- isting British commercial air establishment in the.I~tear East and would provide feeder traffic for British international air services. Iran cannot operate an airline satisfactorily without foreign assistance and prefers US aid to that of any other nation. It is possible therefore that the Government will undertake to effect the reorganization necessary to insure the continuation of US technical support. Only if US support is withdrawn entirely is Iran likely to consider some form of British support. The collapse of air trans- port operations fn Iran would be interpreted by the USSR as a weakening of US-UK influence in Iran and as a favorable opportuni- ty to renew its offers of a joint Soviet-Iran airline. It is doubtful, however, in view of the present stiffening of Iran's attitude toward the USSR, that Soviet participation- in Iranian air transport will materialize soon, even though all other alternatives fail. -1- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 "1'OP Sh,CRE'I' 1~dR4~' GRE~~ C(~MMUPTLST PLAN GF ACTId.~l~t ]Despite the apparent stalemate in Greek hostilities following the Soviet veto in the Security Council, it is i~lieved that the recent .conferences among the lSalkan Satellite States harts produced a new plan of action against Greece. Redispo~ sition of troops north of the Greek border has been reported; the Greek Communists have quickly reorganized after the disruption caused by the Gover~ament's mass arrests; and the guerrillas have utilized the period following the end of the Army drives to regroup their forces. Tune is no longer on the side of the Communists in Greece, and it is probable that they ~iB act to establish a "free" Greek government within the newt two months. Such a government would in fact be controlled by the -USSR through Greek Communists. Moreover, Greek ComYnunists have probably agreed that, should they gain military co~atrol of ~aorthern Greece, they will cede A egeaan Macedonia to the present People's Republic of Macedonia (a federated state within Jugoslavia) . For a conjectural chart of the military and political chain of command from the USS12 to the guerrillas in Greece, see Supgalement. -2- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '.!'OP SECRET P4S3ISf.E CHANGES II~t SYAMESE GO'iTERNMENT A long-standing contest for power in the 3famese Governmennt between the two-party government coalition led by Siamese Elder Statesman 1?rfdi and the opposirion civilian and military elements has recentlp been intensified. Reports indicate the possibility of a Cabinet shakeup on one hand and a revolt by dissatisfied junior Army officers on the other. The present Government led by Dhamrong has been kept in poorer for nearly a year largely through the strength of Pridi's following, most of which is organized in the Free Thai movement. This group was the pro Ally Siamese underground led by Pridi during the recent war.. The friendship be9~ween Pridi and General Adul, Commander in Chief of the Siamese Army and second to Pridi in the leadership of the Free Thai Movement, has hitherto assured the Dhamrong Government of support by the majority of the Army. The civilian parliamentary opposition has criticized the Government for inefficiency, for corruption, and for a monopoly of power in the interests of the Free Thai movement. The opposition has thus far been unable to oust Dhamrong through debates in Parlia- ment. However, dissident junior Army officers, dissatisfied with the high Bost of living.which they attribute to an incompetent civilian government,' have made plans for a bloodless coup d'etat, reportedly scheduled for sate in August. A similar coup was averted in mid- July by General Adul. ~'Vhen Adel learned of the plat, he warned Pridi and government leaders of the intended revolt and urged re- forms to forestall. it. Since this warning, no basic changes have been made by the Dhamrong Government to relieve the dissatisfaction of opposition elements. Efforts ha~+e been made to reinforce the position of the Government by appointing reliable members of the Free Thai move- ment to such key posts as the Directorate of Police. Such steps have only added to opposition charges of Free Thai monopoly of the Government. Additional impetus may be given ~ the plans of the nationalistic Army elements when they learn of the Government's failure to regain any of the disputed border territories retroceded to France late in 1946. -3- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 .TOP SECRET' Because the opposition has associated Pre~nfer Dh~,~ong with most of the f~Iures pf ~-is Governffient, ~ridf aua~ soon plate mineral Add fYa the preanfershfp. As preffifer, Adse~l can lie expected to institute sef?rn~s desired $o ~aollf~~ the opposition, partfcularll- that ?~ ~ca3litary circles. Adel ffiay Sher utali~e his .influence ~ the Arffig~ arad an police organf~ations to strengthen the political p?sitions off ~S?idf, the Free Thai mo~reffient, a,nd the ernment coalition. . TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~~TF~~E~~?~d~ O O Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/0r6/l20 :CIA-RDP78-01617A001900020001-8 MOSCOW POLITBURO ~~~~~~~ BALKAN CONFEDERATION =~DIMITROFF, CHAIRMAN I ~~~~~~~ GENERAL STAFF GEN. POPOVICH ALBANIA SUPPLY, EVAG, ETD. ~~~~~~~~ r~ ~1 INTERNATIONAL DEMOCRATIC BRIGADES ARMY "(;FNFRAI" MARI[!1C NOF SLAV-MACEDONIAN UNITS BITOLJ GEN DAPCHEVICH PARTISAN OPNS ELAS ELAN (ARMY 9 NAVY) ~ ~ ~ BULGARIA SKOPLJE r FLORINA (?) ( SUPPLY, EVAC., CONFED. PEOPLE'S ( FREE GREEK ~ ETC. REPUB. OF MACEDONIA ( GOVERNMENT OPLA TERRORIST- URBAN SABOTAGE EP CIVIL GUARD ADVISORY COUNCIL MEMB KKE CENT GOMM, REPRESENT EAM FRONT ERGAS LABOR D NON-GREEK PERSONNEL (~ GREEK PERSONNEL ~~~~ EXISTENCE CONJECTURAL ENLIGHTEN- MENT ATHENS PARA-LEGAL CENTRAL COMMITTEE KKE POLITBURO KKE CENTRAL COMMITTEE POLITICAL COMMISSAR EA WELFARE B RELIEF EPON YOUTH SPECIAL ANTI-US DEUXIEME BURE4U SPECIAL ANTI- US AID LABOR STRIKES COMMITTEE FOR THE DODECANESE COMMITTEE FOR THE LIBERATION OF CYPRUS Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 DEUXIEME BUREAU KOSSA INFILTRATWN OF ARMY WOMEN'S AUXILIARY FOREIGN OFFICE MACEDONIAN AFFAIRS OSNOM Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'r CoxTENTs Fages TRENDS IN BRIEF ... ........................ > . , i -ifs. ARTICLES ...... ...........................~..1-13 Czechoslovak Cooperation with the U8 in Air Transport , ...1 Arab Reaction to Possible Palestine Regime ...........2 New Burmese Communist Activity .... ? ? ? ? ? ? ? ? ? ? ? ? ? ?Z French-Vietnam Political lOliianeuvers ............ ; ...8 _ Outlool~ #or Private Foreign Capital in China ....... ? ? ? ?9 Issues Before Rio Conference .. ................. 19 Communist Support of Brazilian Constitution ........._ . 13 DQG Id0 CHARGE in Class. ~ DECLASSIFIED Class. CHANGED T0: TS S Q DDA Memo, 4 Apr 77 Auth: DDA RAG. 77 1763 Date: By: V L TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 . Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET TRENDS IN BRIEF GENERAL Czechoslovak cooperation with the US on air matters con- tinues despite Czechoslovakia s political subservience to the USSR (see page 1). Current Soviet propanda directed against the Marshall proposals for European economic recovery emphasizes the "im- pending economic cY~isis in the USA," the need of the US for ex- panded foreign markets, and the serious rebuff to US political ara~bitions caused by non participation of Eastern Europe in a Wester bloc. Specifically, according to the Soviets, the Marshall proposals are designed to: (1j form a Western bloc directed "exclusively against the Soviet Union"; (2) make Germany--ex- cep# the Soviet Zone --a "military base for American imperialism ? in the heart of Europe"; and (~) rearove the Eastern European satellite states from the influence of Soviet foreign policy. WESTERN EUROPE The drastic retre~ ent and controls announced by_the YJK in order to conserve its remaining dollar resources and to increase its production far export can, at the mast, only delay the exhaustion of UK hard-czrrency reserves. Together with other measures, these nem steps should alleviate the immediate financial crisis, but they will not make the UK solvent. These drastic measures post- pone indefinitely the restoration of pre arar standards of living in the UK. It is possible that British public resentment of this post- ponement will find expression in some anti US sentiment which will hamper a US-UK partnership in international affairs, particularly vis-aavis the USSR. The severity of the food situa,tio~n in France, increased by the effect of this summer s drought upon the fall harvest, will force the French Government either to reduce further the bread ration or to deplete the dwindling gold reserves of the Bank of France through the purchase of food imports. If the present drought continues, the TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 _ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'fOP SECRET importarion of all basic foods mint increase on an unprecedented scale, but payment for these imports with Bank of France reserves would probably destroy all public confidence in the franc. These considerations would appear to make necessary interim aid for ' France pending the full development of the European recovery pro- gram. Further arrests of dissident Portuguese Army and Navy officers are reported imminent. Despite the resentment within milf - fary circles oeer previous arrests of prominent officers by civil police (see weekly Summary of 25 July, page f), Premier Salazar apparently is still confident that he can take drastic measures to staxaoip out his opposition without dangerously alienating Army support. Lfttle public reaction is anricipated.. NEAR EAST-AFRICA The attitude of the Arab- states will be the most important factor in determining the success of the regime to be established in Palestine by the UN. The UN's recommendation will probably follow one of three basic patterns: (i} a single, independent state; (2} trusteeship under the UN; and (3) partition into Arab and Jewish states. The first would be generally acceptable to tY~e Arab states; the second would probably be acceptable provided it restricted Jewish immigration; the third would lead to serious instability in the Near East (including the possibility of an Arab revolt in Pales - tine) and would, in time, endanger US strategic and commEercial interests fn the area (see page Z}. Reports of increased Soviet troop concentrations along the Iranian border are believed to have been inspired by Iranian Chief of Staff Razmara in an effort to speed up the delivery of US miliiary supplies to Iran. It is possible, however, that the Soviets are cone ducting troop movements in the area for the purpose of intimidating the Iranian Parliament into ratifying the oil proposals. There is no convincing evidence that the USSR is contemplating direct military action against Iran. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET FAR EAST Burmese Communists renew efforts to obtain re resentation iA the present Government see page ? . The French will shortly offer peace proposals to Ho Chi Minh in Indochina (see page 8 Non-discriminarion lust fore investors in Chfna to be reaffirmed by the Chinese National Government see page 9 , Hostilities will continue in Indonesia on a reduced scale with each side justifying viola.t9vns of the UN cease-fire request of 1 August as "defensive- operations." Conclusive steps toward settle- ment of the situation will be delayed by the difficulty of agreeing on the form of third-power action in the dispute. The Dutch may be ex- pected to continue the formarion of the interim federal government and the future United States of Indonesia. The Indonesian Republic, meanwhile, asserts that it is no longer bound by the Lfnggadjari Agreement and will endeavor to act with greater independence in its relations with sympathetic nations abroad. WESTERN HEMISPHERE The forthco Rio Conference is expected to reaffirm, in a form intended to be permanent, a principles of inter-American cooperation laid down in the Act of CI~3apultepec. Because of the substantial differences among the Republics on key issues, however, the treaty to be negotiated at the conference is not expected to pro- vide for procedure other than general "consultarion" or, to impose specific measures for collective enforcement (see page 10}. The Brazilian Communists, in actively supporting the established form of government, may be seeking to keep a nucleus intact for espionage activities (see page 13). v TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'fOP SEGRE'I' ~R~'I~ I.~E S TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~: ~~C~~I~~V~.~ C(~1~E1~TgC~I+I WITH 'T~ tTS tDT AIR TFtAAN3FOI~T `The I~edlq cooperative attitude of Czechoslovakia toward frhe West in aar matters is noteworthq in view of its econo~fc and political subservience to the tTSS~. The C?~anunist-do~fnated Czechoslovak ~err~ment has peranftted the t3S greater freedom fn air transport opex~.tions than has anq other ~oropean countrq. Czech?slova~ milftarq and cf~ril authorities have facilgtated the rraovement of ?lS aircraft, fre~entlq exercising onlq perfunctorq co~4rol, and ~~ occasionally perm_ fitted US stews andl pas~sen~gers to land evert wiout g~asspor4ts and visas. The USSR r deffionstrated its political con~ol of CzecY~oslo~., apparetatlg~ has no interest in brim pressure to ~tadifq thf3 Czech?slo~a~s present a#r policq. The U~SIt~ anaq eve welt?ffie ~e opport~itp' to use Czechoslovakia as an air outlet fn mew of the n?~ble ?ai.Ile of ~e Satellite airlfa~:es to expand thehr operations wes~;ard. The Czechoslo, ~vho are facadit$onellq disposed. to b~?idge the gap in Easf~-West interests and ambitious to Implement the US-~zec2~os1?ra~ aft agreeffient w$th s. Czech $r~.ns- ~tlantfc s@rdice, vrill +~ontixa~ae to f?ster 'iYS good will fn aviation ~a.tte~rs as low as theq are peraxtitt~d bq the t)SS~ to do so. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ARAF~ FtEl~.f;TIOI~ T'G Pf)SS~L~ PALESTII~ REGIS Because of the irreconcilable aspirations of 2fonfsts and Arabs, no regime which the Ulf establishes in Palestine can settle the pro9~lezn entirely, Any solutio~a adopted will, of necessity, be a compronxise, which may through gradual evolution and modifica- tion attain independent strength and relative stability. The most important factor in deterffiining the success of such an evolution and the future stability of the bear East will be the attitude of tie Arab states. AItl~ough many solutions of f~he Palestine problem have been suggested, the regime tm be established by the U1~T will probably follow one of three basis pattet~ns, each of which is capable off many variations. The basic patterns are: ~1}aside, independent state; ~~) trusteeship under ~e U1~I; o~? (3) partition into Arab said Jewish ' states. Yt fs ps~ssible to indicate fn general terms ?nly the probable Arab reaction to each of the foregoing possfbilfties and to estimate e type and extent of retaliator~3r measures which the Arabs Ynight e in the eetent ?f an unacceptable decision. It i~ certain, however, that anYv solution which permits substaaztfal Jewish i~mn~lgration would be viole~atly opposed and would cause an Aa~ab revolt in Palestine. Yt aright also lead to an economic boycott of the US and the U~ and to a reorientation of Arab forei.~n policies toward the USSR. The first possibility--a single, independent state- would be accep~,ble to all the Arab countries. Arab delegates at the Special Session of the Ubi General Assembly, Arab statesmen in their parli~-- rncnts and in the councils of the Arab League, and the Arab press have been unanimous in de~na~ding both termination of the Urftfsh Mandate aaad atta.Yent of independence. Although the Jews might be allowed considerable local autonoany, the Arab ma~orfty in the rational Gover~ament would be in a position to restrict jewash i~mi - gration and to cc~za~ol foreign policy. The Grand Ntuftf would have no reason to start aa~ Arab revolt in Palestine; .the only serious obstacle to cordial relations between tie US and ~ Arab states w~Id have been removed. The second ~ssfbil~,ty~--trustteeship under the UI~4 would probably be acceptable to all the Arab Governments provided the followiaig conditions were included: ~1) no further Jewish immigra- tion e~tcept as provided for in an international agreement under which -2 - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 '.COP SECRET xaativns of fife UI~' would accept displaced persons in proportion to their popa~lations; ~Z) participation by both .A.rabs and 7ews in the adistration of the country in proportion to their numbers in ~a.lestine; and (3) eventual independence sad incorporation Saito ~e .drab Y~agrue. {Certaiy lra~, and possibly Syria, might at- tempt to persuade the other states an the Arab ]League to n~airatain their original demands for fHadependence. but Saudi Arabia, Uebanon, Egypt, and Traa~sjordan would gladly accept an interna- tional 'administration and thereby avoid an open brash witia the western ~'owers< l~or r~:asons of personal ambition, the n~u~ti ffiight start an. Arab revolt t~ithin Palestbae, but such a revolt wouiti n?t ob$~in general support unless the UN adm~lnistration be- trayed apro -Zionist bias die third possibility--the paa~tition of F'a.lestine into tiro $ndependent states- woanld lead to serious conseaguences in the Near East. Although r~aost of the Arab g overnments would be re - luctant to act ~ opp?sition to a LTI~' decgsion aa~d against ttce wishes of both the US and the U~, the pressure of n~.tionalist opinion night f?rce them into an extreme position. An Arab uprising ~ Palestine would almost certainly ensue and would increase the pressure againnst moderation. In the event of partit$on, Syria would give greater support . to an Arab uprising ~ Palestine than would any off the other Arab states. .9~lthough the Syriac ~overnraent might shrink from openly sa~ictioning aid to a Palestine Arabs in op~sitian to a decision of the UN, it would amoff$cially permit the shipment of arras and a.unitgon to Palestine and -would not prevent enthcasiast$c Syrians from joining the lUtu#ti's forces. Egypt's attitude toward g~.rtition would be similar to that oaf Syria.. It might reluctantly agree to retaliatory measures against ,e US and the UY~, but, in v$ew of its -past record, would refrain frc~ffi implementing such measures if tlhey injured Egypt's political ox conanaerc~.I interests. ~4.t tP~e same time nationalist groups , would support 4he I~tufti and would urge the ~vvvernment to tape ea~- ~ereme action iAa the Arab League against the ~Yestern ~owers< -3- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET 'l`he ~a~i ~r~vern~.ent dQt~ the past ~~ months has been une~i~rocal ~ fis de~snd for Palest??~ian in~penc3e~ace. ~'or 4bis ~?eason, alth~~h it t~a~ retreat ~ the e~$ent of re3uctantl~ aceel~t- ~ UN tragsteesp, it would ltardig~ accept partitio~a. Iraag would insist that the .Arab lJue involge r.liatory measures a~afnst the US ~.d #be U~. ~ .As 1~oth ~n Saud of Saudi Arabia anal Presiden$ al alx?i off ~ba3aon hst-e indicated tl~t ~e~ would not agree to sash ~e~isures, and as I~ Abdullah ~ Tra~s~ordan is in no passitlo~a to do soy tkae daffier of a seri?us split in the Arab Lease wQUld be vs~?y real. Leba~aon would life partitlo~c no better than a~ of the other .Arab states, but unless a comffion Arab policg of op~sition were adapted b~+ a .b Lease, it would not ol~lg oppose partitian. It would urge the Arals 3.,eae probably with tlae lac of Saudi Arabia) to follow a moder~ste course in regard ~ Pales~ae and to ? a~ce~t the decision of the U14~. As ~e o~aer Arab sates, how- c~r, a revolt iu t'aleat~e wo3ald result ~ istcr~ed sirnapat~tic a~ft~.tion in Lebanon a~ad woaald male it all th? ngore difficult for ~e ~ver~nanen# to maintain a a~oder~.te ? positiost. Yt is dat~a1 whether ding .Ai~da~lla~h of ~ra~)orcian is able to follow an independent policy ixa rela~on to l~alestine. As he is subsidised by tiie British ~ae~rnffient, his opi~on csrrie~s lfttle weight among Arab ~tioa~alists. Although he nxap~ a resound s~eches at~out the rhts off the I~alesiaxa Arabs, ao substantfal sa~pport would go to lestiste from ~rans)ordan with~at the sanc~- tion of the Uxitish?controlled Arab Iae~on. Saudi Arabia, f'or ties she of rnain~fning the stability of the wear East, would to persuaele the ffiembers of the Arala Lea~exe to accept gaartition as. ~ temporary arra~e~n~nt, and Ilea Saud would do, his best to discou ab Arab revolt in Palestine. lie is con. winced that l .Abdullah9s plan for ~reate~ Syria is a~aore of a ~.~?eat t? thy: ~e~ ~ri~ of his ldorm d to tT~e siabili~ of the ~e~cr East than ~i?nism4 and he is fearful lest a Palestine revolt should develop into a greater Syria crusade. -4 TOP SECRET, Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'TOP SECRET It is difficult to gauge accurately to what extent US interests would ioe affected by 'these possible developments in Palestine, Certain coa~clusi?ns are, nevertheless, inescapable. If the Ulf reco~rn~ mends and e~~.blishes in Palestine a s~gle, ind~pe~dent state, US prestige and iue~sce in the Arab world will be extremely high and US interests will benefit almost fnanaediately. Bilateral air agree- ar~ents according Fifth Freedoffi privileges to US~ carriers Tong pesad- ir~g with Iraq, Syria, aa~d Saudi Arabian would probably be rapidly con- cluded. A decrease ~ xe~aophobia would tniprove the position of US oil co~.panies i~a. the Arab states, whose governynents, freed frown the pressure of local hostility toward- what are now considered pro4 Monist A~xiericans, would mot feel constrained to drive such hard bargains. US advisers, teachers, and technical experts would be em- ployed in increased ~a~?mbers; anal tl~e greater stability in the entire area would increase flee possibility of the Arabs' carrying through, togetl'~er with the US and the U~, long delayed and urgently needed ? econo~raic develop cent projects. greater economic development and increased political ~.turity would strengthen iz~nffieasurably the Ara3a world as a bulwark against Soviet expansion.. Such a develops naent, however, caauiofi materialize without the aid of the tNestern Powers ~:nd, particularly, of the US9 and the Arabs will not accept aid from countries That are coanmitted to a Zionist policy. Conse-~ quently, apro-Zionist US, policy would make it all the wore difficult to build flee Arab states auto a bastion. against the USSR.. the i~ramaediate effects on 'CTS interests of a Ulv decision un~ favorable to She Arabs would not be particularly serious. Occasional attacks on US nationals, haphazard destruction of parts of the pipe 4 Tines, and vilification of the US by press and public might result, but it is very doubtful whether any concessions would be cancelled or an efficient bogcott on i~-ports from the US would be establisheda Several ?f the grab states, Traq particularly, would probably urge these mess ores in conformity with tl~e decfsions of the 1946 Blue Conference, but lack of unanimity on the part of the .Arab league ffiengbers and their failure to implement the resoluti?ns whole -heartedly, in opposi Lion tcs commercial interests, would render the whole caffipaign inraocupus. In time, however, apro-Zionist development in Palestine would serio~isly endanger US strategic and comnnereial interests. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'i OP SECRE'T' '~~e ~e~tes~ da.~~e~ t~ eye i~ie~?e~f~ fs f~ili~ ~ ~fi-e ~~~ ~o~Fd, a?~~ ~~bili~ i~ i~apii~i~ ~ aop se~lemEea~$ of the P~,estine pro3ale~ wT~ich faii~ f? a act?~~ of A~~.~ de.~. '~'~e ffiore ~favox~lble e ~e1~e~nen~ fr?~ a ~~~~ ~ of ~tiew, ate ~e~.fe~ a eat mil den Rear?1i i~ ~ei~e, ~~i~3r i~ a ~4- I~ae, mad ~~ ~~e~ed ~eno~~obi~. wou3~ Tae s~~~~~e ?f i~i~ e~~~t. C?r~nist ae~,~~~+y ~tro~d crease ~d,~ i~9 So~ei ia>~.ttenee. ~~ae i~fl~ae~,ee ~ presii~e of iT~e ~es~ea?aa ~~~ers wot~Id ~ecre~e Pro~so~io~afeYy. ~Fes~r~ ecoaao~ ~d ~~~ ~~resfs ~touid be se~io~siy tea- ~.rec~, ~d ire ~i?~is~ wo~id iae ~o be4~er o~ ~ i~eyr nom ~e i~ ~oi~d, l~e~~~, ~.~ a ~l~ai.aee ?f'he ~~.estiaae issue i~ cable of ~~ $he ~evelog~ent of ire ~r~.~ ~orl~i fr?a~n oa~e of e~i~atfo~ i~ coo~x~.~kon ~tri&~ tie es~g ~ ore of re~ola$ian nth, the st~ppor~ of ire ~TSSI~. , ?6 - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'TOP SECRET ~~~J ~iFRSE ~Cl2~MflIS`~ ~9.CZ'IX k'oflflo~~g a period ?f ~?eflati?e acti~tq, Rur~ese Co~- ~n~-ists I~qe pursued a a~e~ p~?opaganda policy since the assas- s~aations of Anti!Fascist Leese Headers o~n 19 j~nfly. `g`h~ ~o~- ~~ists seek to place respons3~iflity fox the assassinations upon conservata~e ~urnzese g~~oups in fleag~e ~-ith the British ~d are e~.deavoring to h~tiflfld. up antf-foreign se~atin~aent throughout ~urrna. in an effort to tape ad~aatage of the politica3 ine~p~eriea~ce ?f a new fl~eag~e leaders ~ etain pa~?ticipatioFa is the Go?ern- ~ent ?f ~~ara~aa, Coffiunist flahor o~rganisati~s bee's offered se~p- port to the aaev~ anti-~"ascist ~es.~eae Premier, T'hakin ~u. the league is not likeiy ~.t present to pe~?nait ~e ada~nission of ~o~~ ~unists to ttge ?ernnzent ian mew of the laeaga~e's contina~ed cea~aw trot of i91 seats oat of the t?tafl of 2l.? in the ~o~astittaent ~issea~abflg. Yf ~'hakin ;~Tu's fle~.dersiaip pr?~es adequate, however; to cope with the pro~~.e~s of i~adepe~ade~ce, moderate i~hite 'flag ~offia~u~aists may he readanitted to the ~owern~ent ~#hey ~~re e~elled froYn the ~?vernffient and. the fl~ea~e ~ ?ct~er 194&~ in order to deprive the amore radicafl Red flag ~o~~aunists of poflitic~fl aanffianaition against the ~~ti-~?ascist ~eagae's ad~haistra~kio~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'f OP SECRET FREI~CR-'6~ETN'AM P~3ZsITIC1~I, M.A-1~EEtJVERS .Peace proposals will be ~reseaated shortly to ~Io Chi Minh, President of the viet~.ffi Republic, bq the French high CoanaYais- sioaner far Indochina, Emile Rollaert. The proposals will probably neat be accepted, because the terms will include continuation of French nrontrol over t~getr~aa~ foreign affairs and redaction, or even disbanding, of the Vietasaan A,rsny. ~ the proposals are reBected, the French snag attempt to procure the re-entry of Raa Dai, forffier Emperor of Annaan, into Indochinese politics. As head of aFrench-sponsored provisional coalstitutional anonarchy, based open the Annaanite I~MT and the local Catholic parties, the e~c-Empexor would then be in a position to aaegatiate wi~a Ro Chi Miaah. This araaneuver can be expected to fail because Rao Doi. can probably neither anuster sufficient popu- lar backing n?r treat successfully with Ra's administrations. ~'he `E~ietnassa leaders consider Rea Dal both a traitor and a French ptappet, similar to President ~Ioach of the provisional go?ernaaaent of Coa~hias China. Furtiaergnare, fn an effort to forestall this ma- neasver~ Ro Chi Minh will try to ~anvince the French that the recent ~'ietnana cabinaet reshuffle has resulted in a snore moderate gover~arnent with which the French away negotiate directly. . Regardless of these plans, the autcoane of negotiations .in Indochina, will be conditioned by the action of the Security Council and the egfectiveness of third-power intervention in the lDutch-~ Indonesian situation. If the final decision fivers the Republic, ~ietatana will be strengthened snarally and will becoane snare stub-~ laornly opposed to Frasace. Conversely, of the decision favors the Deitch, the French array be encouraged to resume milii~~r operations when the rainy sasses ends in late September. -g- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET' OT3~?L4~}~ g'Oflt ~~I'~AT~ ~OREflGfl~' C~.P~AL ~ C~YI~t~- the ~biazese ~fationafl G?vc~rnffient bass prepared estate= went tP~t affirms a Foi.fcq of na~n-discriffiina~on against foreign interest ih Ghina and invAtes tSS invest~nent~ ~ afll t=~nese i~d~str~- nc~t reserved e~c~fleasi?eflg~ for ~k~nes? capital. ~'orei~n i~v?stors ~na~, f~rt~er~ore, ~a~.rtioipate fn certain enterprises under ~overn~ent nxonopofl~ (snob as ixnportast raiflwaps, arses, essen,fl ffiiaes, and h~dr?-elec~io pflants~. 1~einitce of profits out of China b~ forei enterprises, whl,le perffiitted in principle, wiflfl be restricted in practice dt~~ng fife "pres~~at period" of foreign e~ohange controfl. IE?'or~ig~ investors will un?itedl$ weigh this statement, wbicia is similar to ?thers issa~ed in the pasg, agai~t: ~3} tradition- al Chinese axtipathg toward fo~?eign basbaess atad foreign investors, {2~ obvious ev~,dence og disoriffiinatioan, in the e~ecudtion of foreig~a exchange regxaflattores, made controls, and alflocation cf geaterials, ? ~ faivor of e~at~rgrises coniroll~l by tBae Govern~aen# and bP ir~flu- enfl Chinese; a?~dl ~3~ iFae prospect of a long eaaaergenc~ period of ~oono~ic and fina~noi~l i~tabilit~. Private foreign ~.piira.l is tin rely, ttaereffore, to act fmnaeediatelp ova tae Nationafl Goveraarnent's "fnvitati?~." his ffaes~ta~cion wilfl pr~ably continue even after any r~~tension of tJ~ Goverza~ent credYts to China, -g- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'f OP SECRET f~S,~S ~FOR~ BYO ~~~'R~~~E math the i~ ~ere~ce l~ ~. meek dfst~t, the differences a~c~an~ a .~~eric~:~ ~~e~~~bAflcs ~~ ~e~ issues are sttl s~bst~ti~.l d arc elf t~ ~e reswkved ~gi?~ t? ~h~ 15 Ault date ~f as~e~z~l~. the ~ ~~er~c 3~'~i, i~ duly g9~?, sub~ittc~d t? the ~.~eric~ Rebli~:s rive q~nestis s~ Pr?~l~~as t? be salved ~.t the c~fe~?ence. the t~ea~tg~4c~e r~:~lies ~i~cla~d~.;~ ewe ~f ~d~uiat status fr?~a ~icar~~~ de f~ct~ ~?ve~me~t~ ia~dicate theta ~~) `the Republics ae~: that the tre~.ty t? be aae~?ti~.ted at R1? sh?s~d c~ffi~it each si~ra~.t~ry t? assist the ~ctiffi ~? ~~ act ?f a~~essi~u. ~~} A ~a~~rit~ ~f the c~saaat~?ies are i~ favor ~f per~~.ttiu~ each si~at~ry tai deter~e fir itself the iffi~esiiaS~e steps ~.t Ali ta.~e t~ a.s~ist the ~cti ~' ~essi~. ~~he LAS a~c~s ia~ quest~l?~~ in~~~e ~~?~.ctica~ilit~ ?f defiui~~ ref?~eh~d the ch~.racter ~d ta.~~ i~~; of such steps. ?1~~. aid ~r~.~il, h?we?er,.aiisse~t fr?~a the ~a~?~?itg mew this p~aiht; ~~livia, ~~ the ~~ds mat the relev~t measures should ~ deterffi~~d b~ the G~ver~~~ ~s~~.rd ~f the ~ ~.ffi~~?ic~ ~~i~~; r~.~il ~. the ~r?a~ds that a relevaaa~t ~~easur~s ~hld be s~c~rdi~ated~e thr~~h c?ffisult~,ti~ ~d men clefiued ~p ghe ~a~a~~~u military ?a~i~ati~~ it w?e~ld Ii~e t? see created. ~he~?~ ~.~, fu~her ~?re, eve ft~t the repYies ~ the catrie~ ad?~ti~~ the ,~e~rit~ view, s4~Y~AAe ~entfffiea~t ~ f2.~!?fi ?f px?i~as? g~.a~i~~ ~.~ re~axds the ~at~re ~~d ti~ain~ ?f ~e ~sisee t~ p~'?vided,~ (~~ Ei~htee~ curies, i~cludi~~ the ~~, fa~~~~ a~a~d~~ ~e~t ?f a ~aa~i~ity practice 3~ veti~~, aid held that c~B~ecti?e ~e~ures shcaa~d he~cef~rth rewire the ccurre~ce of t~?-thirds ?f a si~,t?ries. (~r~euta ~~ld ruire u~a~i~~s eeffie~t, while dB~y ~~ld permit c?llective ~~as~a~?es leg vets ?f a sia~tple raj?rity ~f the ~ignat~ries.~ ' S~ce ~?ffie cif the ei~htee~a catries fisted as suPp?rte~?s ?f the ~~?~thix~ds raB.le ad?g~ted that ~?siti~a ~?re ?r less relu~tly, they ~.~ recede fr~~ it ~ the c?~trse ?f the c~fere~acea ~~o~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'fOP SECRET ~4~ F? ccanntries -- the. X15, i~ra.~ii., ~., ~ Pana~:a. o- w~~flai ~~ c~iiecti~e ceases ~ind~~ cry u. these c~nt~ies tiaat have c?anred in the~p the ~.a~?~~i~ ?f -the c~n~ries w?~ui.d ffiai~~ a ffieast~?es ~~neiina~ upa~n a~i siaa~t~~ies to the treaty. ~, few ccu~tries wc~~iri iii~e t~ disti~ngnish between c~rci?e nneasures, which they w~~aid ~ai~e bind~~ ~~.y e~an a curies c~arin~, and a~I diner ~easu~ces, ~~hi~h they wed make i~lndtan~ ~~ a.ii.~ r~5~ ?The .~?rit$ ~f the curies, hacludin~ a STS, wed p~st~~ne the creat~.~ ?f meter-A~eriea~n ~iflitary a~s~ncy untii ~~ua.ay ~~~~, wi~enn the i~~~~a ~~nfere~ce is tc c?~?enaes free ce~tries -a a~ii~a, tine D~~ninf Re~ubiic, aa~d Peru -- w?aaid lii~~ at kea.~t the general ~aru~sas f?~ such an a~e~ncy t? be made at i~. Exc~n~~es ~f dews ~~ the a~~ada. a~~l cn the decisie~ns t? &~~ at ~i~e ~i~ ,~cnfereace bed abet tw?~ years ?, when the STS a.n~i ff~sur ~vt~er ct~?ies ~~e~in~i~,~~razil, Chiie, and Eeu~ior~ submitted drafts f?~ a treaty t? i~~ienaent Part Il ?f the Act ?f ~~~Ftec. etc? ~ Parma, subsequently sut~.tted su~~es- trans based ~ the ~ra~ili~ draft. Fit ti~.e spri~n~ ?f f~~s9 the Pan A~erica.u [~ni~a ~axblistne?i aaa ~,lgsis and c?~iaaris~mm e~f tiaese ei~~nents. The a~ysis sh?wed that a drafts differ p~?a~ncipaJ,Ay in tine ~e~e~nt t~ which they effib~iy specific nleast~es rather that general pri~aciples a,nd the event tc which they assume that the pure?se ~f the pr~se~i Ri? t~?eaty is t? gna~e ~r~nanernt ce. te~cap~rary ~~?~si~s ~f the Act ~f Cha~puitepec. 'I?he tJa drat, fear ignsta.~ce, a~th?~,~h it wed per~cnit decisi~srcns by a tw'?? thin?ds ~?~e ~~ w~ul~ ~na~e sucin deci~i?ns binding ~aaly ~ tine ee~unt~~es c~c~~nrin~, is ccuche~ in ~e~ne~a1 terms and a~ieres cl?~sely t? tine principles e~aciated in the .Act ?f d:h~.tepec$ the ~?li~-ian, ~cuad?ra~, and ~rugan dn?afts; by c?antrast, effi4~ k~~~y speeffi~ ~~?~?sads and enZar~e in i~~rtant particui, on the ~hapnnltepec pattern. S?~e ?f these praposals w?uld invub~e ?anly ~?a.l e~tensicans ~f tine princiiales +af~ inter-Affierican c?- ?perati as these g~?incfples ha?e ~perated~ ~ the. Est, especially ciuri~n~ World mar ~. a ~ua~?antees transit ruts t? tr?ops en- ~ed in c?rxn~~ actin t? resist ~~~ssicn; aan~ther assigns cex?tai~ ~cew fe,ctiuns t? the Pan a~.ffieriean [Jnfon; an~ner pieces certa pr~le~s under the jurisdicti~e ?f the ~ternati~nal Cc TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET of justice; another commits the American Republics to recognize no acquisition of territory by force; etc. Other proposals, however, look to far-reaching modification: of existing conceptions. One commits the American Republics to reciprocal gvarante~:s of territorial frontiers; another envisages joint action against any violation, within the hemisphere, of the rights of man or of democratic principles; a third calls fora co- operative military agency empowered to direct common military action by the American Republics; another obligates the signatories, under certain circumstances, to provide troops for commcm military action; another provides for regulation of the manufacture and distri- bution of armaments within the hemisphere. Argentina is areportedly about to submit its own draft treaty proposal, which wouiAd bring the total number of such drafts to nine. Cuba, though it has not submitted a draft and fs not expected to do so, has placed itself on record as convinced that the proposed treaty should address itself to certain economic problems which it regards as relevant to hemisphere solidarity. Still other proposals. may be submitted before the conference convenes or may be brought forward in the course of its deliberations. Because, however, the conference is cer?ain to make its decisions in accardaace with the unanimity principle, and because each of these specific proposals is likely to elicit vigorous opposition from at least one of the Republics, the .treaty probably will reaffirm, in a form intended to be perma- nent, the principle of cooperation laid down in previous conferences; will specify no required procedure other than general "consultations'; - arzd will impose no specific measures for collective enforcement. - i2 - TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET CGMMiJ1~lGS`'~ Sl~'PPQR'1' GF lll',A~IY,IAI~I Cf~TSTITIJT'lG~t A.l~iough the l~razilian Cora~munist Party was declared illegal on ~ May 1947, it remains in existence and is actively supporting the established form of government in Rra~il. This uts~expected development in Coxn~raunist policy suggests either that l~~azilian Communists are ~riolating I~reffilin wishes `which is unlikely) or tl~.~.t the l;rerxalin itself leas shifted its line im Latin .~ meraea. to favor front organisations as against political infil- tration through party organization. , ?T?he new Co~;~naunist policy, which parallels one reported- ly agreed upon at a Party ~nee~ing ~ Montevideo in June 194?, Includes: denial of any tie with the USSR; active support for the e~st~g government of each coamtry; and $.he ans.intenance of a functioning networF~ of intellectual, cultural, or recreational front organisations, but with continued effort to penetrate ex- isting political ar~d labor groups. The pa~?tial defeat of Soviet espionage in Canada in 1946 may cause the IzSSR to place increasing reliance on Coxz~anunist- ' f~rsnt organizatio~as for clandestine operations in preference to the traditional Communist pies. The present pattern of Com- arcr~nist activity in brazil may therefore indicate that the 1JSS~ expects soon to need espio~aage in Brazil more than it needs political tools. In liras with this expectation, ties Brazilian Com- coranists will pro'~ably continue to attempt appeasement of the Brazilian Government in order to keep intact some kind of Coffi- axnunist nwcleus as an alternative to an openly political organi- zation. ~13- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 `~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~~ Tnn cF~u ~T C~~T'~N~:3 Pales ~~'1C~C~ .................................... 1 - 5 Por~gt~ese Pv~~s~fv~~s C~~aglfcate .~z~res ~e~o~~a~~.~s ... 1 Pe~s~~ale ~esa~~~af~c~ of dash-French Tree ...... > .. ~ Resa~ts ~f ~~ Ct~~asider~.tiean ?~ Cree~C Case.... , ....... 3 Per?n's Pzrlatic~. ~?'s8~ ~c~~ac Prc~b~.e~s ......... , .. 4 Document No. tt0 CHANGE in Class. DECLASSIPIID. C ass. CHANGED T0: TS DDA Memo, 4 Apr 77 Auth: DDA F:EG 77/1765 Date: ... '~~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~E ~~~ .Ca~~ 1751 ~E H ~E~'ER~ ~ t1S ~P~ar~-ese ne c~taata~ns n~er .~~nres ~aaes ry lie ~aasnPlf d gated ~~ ~a~~gnese c~esixe fc~r ~. iii guarantee ~f texritc~rfai ftttegr:~- ~~we p~ ~ ~. "gY ~~~Feg6 Ss tF Ti00~9.e? ,S,~anfsh~reneh ~?ade ~ be remttmed semi-se~re~1~ ~rSa. ~res~~cz end Fig tcagai see riage ~}. the cri~~ai i~iiaa fa~s~d si~atiQ~a, whic~a l~s ~aee~a aggra.~ted la3- the anadee~a.e~ Qf a 1~~? gFafn harvest, ccyns~tutea a grave pnif te~~i thxe~,t t~ ~hhe i3e ~asperi ~vern~te~n't. Efforts bg the ~verm-~ meat t~ meet thhe ~xisis thrtn~h grain c~aileetfcens a;ad re~dis~ibatinn are meeting stx?ng pntriie ?psitie~a. Leftfst gr?~.~ axe ~iaa#aii~~i.~g ~~n this resentment in a~i effort ~ ca~rexthrnw t~~e present ~ve~a a7r~ent. I?~ Gasperi ~~isiaerg that eariy iarge~s~aie imp~rtss of wheat axe ne+~essa~ in ~rc~er t~ in~xease the gash. a?atinn i?n Septem~ex a~-d m~.tryin t incxeas~ at i~as?-until the ~~?nal electii~ans seheainied fc~~? .~.pril Y~4~e ?~he b~,aiia~a ~:'~a~msmist Partsr hypes that the ~ISSR, fn mew ~~ fl g~eei ,wlae~.t_ px~apee~, wii~. send wheat t?; Ytai~ in an eftert haistEx the ~emx~aists at a g~ais as was d?ne ~~ the i~SS~ ~ the Fren~;h elewtz~ns of ~e 1~~~0 -5'wet~ela.D~ ~~L,i~F~& e~~fwi Gbb(.U l ~i3s 6buiFsk~~ LO t~~g ~T~d s~t ~Q the ~~ a~erI ~E' th~'biame fur tae et~ntrg- ~ went c~iffie~aities, despite the feet tit Sweden`s ~~~~S~~DQ,(~~0 five gear #xade and eredit arse.. anent s~~i'I fhe SSA is eans~ sexi~ disic.ti~a~ ita the ~edish ee~n? i~emne~?atfe vhes~en charge that ties ~tS aa~:~ tT~ ~,~~ ~~~'~ ~w~E'~~I1 ~~~ he~F~i' YnRp?~s ?~ lC~~-~e~~elAt'~.a~~ ~~i~ ~a xl~y ~.~~e~.ii~~ edea~'s f~rei~ cnrrene~ rese~es a~?e heirg need to ~b~in .ateriais fix pxedn~~n~a t~nc~e~? the S~v?et traeie past and deifveries are i~eing .de t~s the USSR en ~xedit. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET The recent ~reaa;h offer ~ per~tft an incsaase f~ ~r~a~ steel prarah~ctia,~- ~ e~chaage fir ~S~-'~~ suPpc3rt for ~tcatit~r~al-. l~atlo~ of tt~: Rehr medicates tit E-reach officers ~od_ ~f~ed weir attfltude toed. the Ccr~a~ cgaaes~oa~. Thfs shift may have b~e~ caaFSeai h?;~ Ere~ch a~areaess arf a strop uagderctarrent of olsiaiar~r at the P~.r~s corfexeaee favor~g the inclasioa~ of wester ~er~p ~. the Ea~?opeaa a?e~crvery prograaa. Et~STEIt~ ~RO~E ate ~oe~ ~re~s of a oer~a~ae~at has co~~~ssiv~~ certain positive res~l ~aa~re h~e~ aa;h~evec8 h~ the U~ tpavestigat~oa~ Greece see 3}, EAST~.E~I.~ RI~~. "the An~io~~~ptiart diste, schech~lec~ for a ~ecoar~ltgi CocR hear~g ?~ 5 A~gast, .~ he sefitYea~ #~- large ~easuxe "fiat of curt an?ved from office on charges of graft. Thr~ Ydationaflist +a~ficer g~rot3p is also resisting Pes?on's ~i~*misphere defense collaroration with the ~S ,and has made it plate to the President that it desires neiti~er STS traizai~ig s~t~thods nor YiS e~nip~aea~t. A g~o~?p of five g~era~s reports edly has delivered an ~altinaat den~aadi~g that Pena abaaadon co~pera- tion t~ith the LtS. ~'orr~ser Police Chief ~e1~.~co, the mayor spo~esa of the dissident ~~.ttonaltst oi~icers, has taken part ~ a neamber of poi4tical ~teet~gs space his ebsssal: .~llth?~gh Pega~co fs reported to have promised Peron ~~at he ~vi1.l not 3,o revolutionary activities, he has refused to cc~nf'er with the President since his reffioval. fee i~.~co '~oanld enjoy tk~P snp,~ort of a c?~sid~rable n~ber of pronnine~at officers in soy actin he might tame against the Government. ,Any ~?evolt against Peron in the foreseeable fn~re mould probably be led by the Y~atioaaaiist officer groula: 'fihe dis~.ffected officers are clea~Yy watching po3itical developments closely bnt are not yet readp t~ ialan any early action. Appsrently fearf~ of Rationa- list attache ~ his intimate associates, the Presid~t has ts.~n certa~ precautionary measu~?es. These measures inc~inde; (~} the collection of all a~ai2ahle hafor~~ati?n on dissident R1~ationalistS; (2} s~arvef~aace of ~'ela~co$ (3} ckose observation of tabor w~arest to preveaat its exploita- tio~a lay the l~ati~aalists; (~) aflerting ~-f~itary u~s for possible troub4e; TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'CCIp C~!'^v~T ~i~., ~.p~~.~?~~il~ t~~c~.c~~ Qf d~~~ ~~ 3il.~Da~ i~~.i~. ~~.i~ ~~~c~~ ~eia~~~~~~~ ~co~v~fc .ficici ~.g ~i~~ ~~~ g~~.'~ f~~3i$c~g~.?t3~ f'Q3~' ~~ ~~r~~ ~~iffi~. c ~~~mm~c~f'~ ~.f~s pricy-c~~~~~~i ~~nci ?~~ti~~ ~~i r~~ ~~i. ~i~a ~c~ea~i fafi~.~cp ~~~li iii ~# e~~~y~ use ~.~c f~r~i~'~.~ sc~.r~es~ ~ ~.~~~~i~.c, gar aga~ic~, ~ ri?.~~ 4t&~~ ~-t ~~~~. .d~.r~~~~- iia~ar~ ~cie~ d f~~r~~t ~~c~~ p~~iii~~ ~ ~i~a~~.q ~~~~ri~#c~4. ~?~ i~~ f~.~ cf a ~~~~~?~ ~.c~si #~.~ ~?i~r ~n~~r#, c?~~i~auc~aa~ 3ic~~~~ fir ~~ic~ ~~~icl~s ~~~~~~ ~~c ffi~~~ ?f ~~p~r_ ~ ~~~ ~~~ Aia~il '~ ~~?~, ~z~~~~ii~~ acid ~~d #tsr~ ~xc~.~~~ ~?idis ?i~cii~~~ ~.7~~1. ~c~c~~~~, i~~~ ~r~~~~ sicsc~ ~,~r~~~ r~ce~~l~ ~~ ~as~~~c~ tc ~?ic~i fi~c~~~; ~i~r aa~ ~p~? x~i~~, i~c~~ns~?i~i~ ~.~a~d~r+~~~ a ~~~. ~~iii ~ i~ may ~d ~c~~i~~ ~~~ ~~~i~c~~ ~iiii d~~pii~ a cidc~ble ~~~~e~e~~ re- csa~ex~. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001~ 8'~~~ JU '1'O~P-$~ftE'I' ~ra~T~~Ts Q ~ageg TA~i~S ~i I~I~I~~ ............................... i - 1i J~$ A~tTgC1.~S ................ , ................... 1 - 7 Strategy 'of . So~et I~ela~ in Treaty Ratificat#c~ ......... - 1 " French ~pinian ~ German ]Production ............... 4 Tk~e .~ ssass~nations in ~urffia...... - ............... ~ I3tatch antent~ons ~ the ~I ...................... 6 Document No. Q DECLASSIFIED lass. CHANGED T0: TS S DDA Pvi~mo, 4 Apr 97 Auth: DDI! RAG. 97/1763 Date: gy, n Z~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'T,OP SECRE'T' ~.` R E Te8 i7 S fl T:d T~ flt I ~ ]~ e GE%~RA b. the USSR is ~eected to ~ost~one ratificatioae of the Itaflian and Sate~.ite treatfles at fleast until Septe b ~~erhap~e~initefly, ivt order to complete fits control over pastern l~urope aa~d to prolong unrest on the contineea~t gage lj. B~EST~T~.1oT ~UTTt4PT~ Ti~ tench deter~ninatioea that ~r~n-an shafli. not again laecome powerfa~l contiaatees to complicate ~ or l~uropean recovery Page ~~ the Soviet aa~d Satefllite trade pro~aosals to Austria may es- ta'b&ish the pattern of future economic relations i~etween faastern fur?pe seed the rest. `these proposals show that the USSR and the Satellites intend to pemn~it trade with the west only by agreeaanents whack, ?ffer cosnffiodities at prices. c~sider~lbfly hggher theses in trade hetweeex the Satellites and the USSR. Pa~yxneeat by ttge ~dest, further- mo~re, mast ~ in either U~ dollars or in commodities urgently needed ~ T~asterr~ Europe. Austria rejection of these proposals wooekcl be e~loited by So~et pr?paganda to demonstrate that Austria fs s~ject to US domination at the expense of fts owes wolfare. fifth the formal arrest of the Portuguese .Army and i+Tavy of- ficers who were forced to retire one f~ June, the Salazar oppositfaa e~aoveYnent, Weser well orgaaaised, has lost its most iaafluentaal leadersp Sa~asar would not have ordered the arrests without being confident of .Army suppoi?t; his actiomm, however;' indicates that even so he does not wish to risk dfssideeat activity iRn his country under present international coa~dati.ons. - _ EAS?1'~T EUR?PU ~,capitali~in~ upon ~un~ag?pss political disintegration following the a~ecent `che Communist Party has spathe imposition into e i,_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'T'OP SECRE'T' ? small, ineffective groups, thus assuring its control of the coming elections. Moreover, by extreme pressure, the Goammunists have virtually coxr~pleted passage of a new electoral law wh#ch will provide for Communist-controlled elections within 60 days after enactment. This law, outrageous by i~estern democratic standards, legalizes extremes of electoral ffianipulation comparable to those which obtained in Bulgaria, Rumania., and Boland. IdEAIi. EAST-AFRICA ]Persistent rumors of an impendini; ~ilitax~di~ctatorship in Iran oriented toward the IISSI3 and headed by Ali Razmara, the ambi- tious Iranian Chief of Staff, axe. discounted by available evidence. Razmara has abandoned his earlier "blood and ia?on99 policy toward Iranas anti-Communist tribes and nov- has adopted a conciliatory atti- tude, apparently in the hope of obtaining their support in the .event of a Soviet attack. Moreover, ~ Raz~nar~ has indicated that he favors retention of QS Military Missions io Iran, despite continued Soviet pressure for their discontiaiuance. ~. FAR EAST The strongposition of the IIurmese Anti-Fascist Lea~ae has nat been impaired by the recent assassinations of certain League leaders (page 5). Dutch officials appear to be ~roceedin~ unilaterally with plans to form an interim federal government for the ldetheriands East Indies while executing "limited police actions's (page 6~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 - Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ARTYCLES C TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 _ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'I OP SECRET' STRATEGtY' 4F S4)VIET DEI~A~Y IN TREATY RATIy'ICATION Six months after- the signing of the Italian and Satellite peace treaties, it appears likely that the USSR will postpone ratification at least until September and perhaps indefinitely. By delaying ratifica- tion of these treaties (all have been ratified by the US, Ux, and France) the USSR hopes to facilitate consolidation of its control over Eastern Europe and to prolong unrest and uncertainty throughout the continent, The Truman Doctrine and the Marshall proposals have forced the USSR to reconsider its position in regard to Hungary, Rumania., and Bulgaria. In the face of a lra.ssive Western policy, the Soviet Union might have considered its control in these countries sufficiently strong to permit early ratification of the treaties without jeopardizing its ulti- mate domination. The effect of US aid to Greece and Turkey, however, coupled with the Satellites' desire to share in the US program for Europe, has intensified Soviet determination to maintain its extraordinary powers of control over these countries, now exercised through domination of the Allied Control Commissions and the presence of occupation forces. Although the Dimitrov regime in Bulgaria is sufficiently well- entrenched to stand on its own after the withdrawal of Soviet troops, the USSR has coffipelling reasons for not ratifying the Bulgarian treaty. Direct supervision of the stepped-up campaign in support of the Greek guerrillas would be more difficult after the withdrawal of Soviet troops - which both aid in the war of nerves against Greece and .Turkey and contribute logistic support to the guerrilla bands. The recent arrest of Petkov and the terrorist campaign against other Agrarian Party . leaders indicate the advantages to the USSR of consolidating its control prior to ratification. Had these actions been taken after ratification, the Soviet Union and the Bulgarian Government would have had to answer to the UN for violations of the peace treaty provisions. In order to avoid foreign intervention, therefore, the USSR will probably delay ratification until all vestiges of opposition in Bulgaria are eliminated. Conditions in Rumania also favor postponement of treaty ratifi- cation by the USSR. Despite nearly complete control over the Rumani- an economy, tie Soviet position in Rumania would be insecure after ratification so long as l[~ing Michael and Maniu, leader of the opposition National Peasant Party, remain as symbols of popular opposition to the Communist Government. The treaty will probably not be ratified, -1- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET therefore, until 3Vlaniu and the lN'ational Peasant Party are eliminated from Rumanian politics, and until some means has been found to dis- pose of King Michael. The absence of any popular demonstration against the recent arrest of Maniu and many of his supporters may encourage the Communists to hasten their decision on Michael. ? In Hungary, the USSR was confronted with a government dis- tinctly pro PVestern. The "coup'' which resulted in Premier Nagy's resignation iaa June was the first step in a series of necessary prepa- rations for ratification of the peace treaty, New "rigged" elections are expected by September. Even the holdfng of these elections does not, however, presage early ratification because post-election house cleaning will still be necessary in Hungary as it has been its' Bulgaria and Rumania. In addition to these political considerations, the USSR needs more time to consolidate its economic and military control over the Satellites.. Partially in response to the European recovery program, the need has become more pressing to strengthen economic ties among the Satellites and the USSR. Imposition by the Soviet Union of the economic controls necessary to achieve this goal in the ex- enemy states is far more practicable under existing.,conditions than it would be after ratification. Through the Allied Control Commissions and with the help of occupation troops, the USSR maintains an effective stranglehold on the internal economy of these countries and, by con- trolling their foreign trade, can block Western economic penetration. :Meanwhile, the USSR is using its dominant position in the area to im- plement a network of military alliances through which Satellite armed forces will become no more than auxiliaries of the Soviet Army. Although ratification of the Italian peace treaty would benefit the USSR by forcing the withdrawal of US -UK troops, thus giving Italian Communists a freer hand, other considerations militate against early ratification. l6y depriving Italy of independent status, the USSR prolongs the existing unrest and uncertainty in Italy and retards politi- cal and economic stability. (Italian Communists capitalize~upon the unpopularity of the Italian treaty by pointing to the "quick" ratification by the US and UK as contrasted with Soviet "reluctance" to ratify) Moreover, the USSR will continue to delay because ft is not yet ready to implement the peace treaty provisions for the Free Territory of TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 . Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'fOP SECRE'T' Trieste. There is little likelihood that a pro4Soviet governor will lie appointed for Trieste. The USSR therefore prefers to re#ain the status cpuo in order to m~.intain conditions favorable to infiltration and eventual control by the 7tugoslav Communists. 0 e TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'I OP SECRET FRENGpf OPINIGN ON GERMAN FR.OI~UGTIGN French public opinion is united in the determination that a powerful Germany must never again rise. The French Communist Party has successfully adapted its propaganda line to this national feeling by arguing that the US means to revive German industry at the expense of France in the program for European economic re- covery. The French steel interests, furthermore, may appeal to the public fear of Germany in a maneuver to eliminate Germany as a future commercial rival. - i Foreign Minister Bidault's recent strong protest of the new US-UK level of industry agreement for the US UK Zones Germany was based upon his conviction that if French views are ignored in the revision of German levels of production, French public opinion . will turn violently against the plan for European recovery because it includes a resurgent Germany. Bevin has made it clear that European recovery cannot suc - ceed unless France participates. In order to participate and to achieve economic recovery, the French are willing to defer their demands for a federalized Germany and for the internationalization of the Ruhr; they will probably even consider a reduction in reparations. The French, moreover, are not categorically opposed to all upward revision of the level of German industry. They are firmly against increased steel pro- duction. French industrial planners point out that, with coke from .the Ruhr and atith the cooperation of. Belgium and Luxembourg, the steel requirements of all Western Europe, including Germany, can be met by the French steel industry. Unless the French view and the US-UK view are reconciled, the present French Government probably cannot survive, and the European recovery program cannot succeed. ? -4- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET TFiE ASSASSINATIONS IN ffiURMA Events since the assassination of several important Anti- F'ascist League leaders demonstrate the strong position of the League hn ~turmese politics. No attempt has been made by those responsible for the assassination #o displace the League from its controlling posi- tion. On the contrary, the League recovered swiftly from its disaster and formed a new Executive Council headed by ?'i>aYdn Nu. The UK Government will add support to Thakin Nu by announcing the agree - r~ent naatde during his recent mission to London which transfers greater powers to the Burmese Government and ensures early consideration lay the Ulf ~arliarnent of legislation for Burmtese independence. f Although no positive identifies#ion of those responsible for the assassinations of Aung San and ether League leaders has yet been made, considerable circumstantial evidence indicates some complicity on the part of . U Saw, leader of the ultra -nationalist Myochit l~artp. Since the London Co~t'erence on ~urffiese independence in January 194?, U Saw has opposed the League's agreement with the UK and has advo- cated immediate independence. lSecause of the League's recent pro- posal to the UI~ Government for interim dominion status, U Saw map have believed that Aung San had "sold out" to the l~ritish. U Saw has fre~raently implied that Aung San was responsible for the assassination attempt made against him in September 1946. Unusually large .stores of arras were discovered at U Saw's home. Also, a jeep found at U Saw's residence has been identified by a member of the Burmese Executive Council as the one which carried the assailants of Aung San to the scene of the assassination. _g- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 'TOP SECRET i DUTCH INTENTIONS IN THE NEi f Since the outbreak of fighting bet?veen Dutch and Indonesian forces on 2I July, I?utch officials reportedly have been establishing a Dutch administration for occupied Republican territory. Two Dutch civilian administrators are believed to have been appointed for North and South Sumatra and two prv-Dutch Indonesians for East and West Java. It is significant that no such administrator has been named for Central Java. 'T'his omission may indicate Dutch intention to limit the Republican Governme~at to that area, separated from Republican areas in Sumatra by the Dlntrh-doyninated territory in Nest Java. Neverthe- less, top-level Dutch officials have denied any intention of destroyping the Republic. They express the hope of "establishing a Republic ' v-iLlt which the lG~utch can negotiate for the early development of a sovereign United States of Indonesia. Other indications of unilateral action by the Dutch can be seen in the apparent formation of an interim federal government for the Netherlands East Indies. The #ormation of this interim government is suggested by reports of recent conferences in Batavia attended by the leaders of the pro-Dutch states of East Indonesia and West Borneo. Further evidence of the formation of this government is the appoint- ment of several East Indonesians to federal posts. This action suggests that the Butch intend to proceed with the implementation of the Linggad- ~ati Agreement and the Dutch note of 27 May 1947 (as interpreted by the Dutch) in order to present the Republic with a fait accompli if negotia- tions are resumed. Because of their claim that current operations are "limited police actions," the Dutch are in a position to break off hostilities, whenever convenient, on the ground that the objective of the "police" action has been achieved. General Spoor, Commander-in-Chief of the Netherlands Indies Army, has estimated that "police" operations in certain areas will be completed in two weeks. Spoor stated that conditions might then be suitable for implementing the Linggadjati Agreement "in a way which cannot be done noon." {The Dutch Foreign Office has expressed ~. hope that former Premier S~ahrir wi11 retain his moderate attitude. This may denote a desire to use him in future negotiations.) _s_ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TC~-&F;faR~T 'the Iaxdonesfan ~epublfc ~ea~tw~le has appe~.led to all aaations to brfatg its ease bed?re the ~tPT. ~?tfi ltep~bli~~aa~ Foreign. ~Viinfstea~ Salf~a ammd Sjahrfr now traveling ~ ]lttdf~. and fit Moslem countries of ttte Middle East in ata eiiog?t to enlist support for the Republic. 'T~p CFr`~~ A Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ,~ rS r ,.E` v. i RE~I` ..? Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 CONTENTS Pages TRENDS IN BRIEF .................. ? ............ i -iii WES7~ERN EUROPE De Gasperids Position Since the Paris Conference ...... , . 1 Possible 3Vloves by the USSR in Austria ......... ? .....1 EASTERN EUROPE Greatex Satellite Aid to Greek Guerrillas.:.......... > . 3 NEAR EAST-AFRICA Afghan Interest in North West Frontier ............... 4 FAR EAST Stalemate in US-USSR joint Commission for Korea ....... 5 Deacdock ~nnD~utc~~hp-In~donf~e~sian Negotiations ... ? ... ? .... 6 a M~er U~~r~ist ~8. TCi1~WW.~b ? ? ? n ? ? ? A ? ? ? ? ? ? p ? ? ? ? P .Y IVISY#~IRN YK+/J~iiSPfiia~~ Realignment in Peron Government .................. 8 . D d- Document lfo. K? CAAN6Dr in Class. ^ ~ DECL-SSIXIED S ~ Class. CHANGED 20: TS h: DDA REG. 7 Au~ , Date : BSF Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~E OP srcRE~r TRENDS II~T BRIEF WESTERN EUROPE The Communists in Ytaly are using every means short of insur- rection to oust De Gaspers and return to power (page 1). The USSR ma now abandon restraint in eastern Austria and assume outrig economic con o e . Both the North African Nationalists and the French can be expected to exercise mutual restraint in order not to prejudice UN consideration of the Moroccan appeal for independence, A representative of the North African Nationai Bloc has announced that such an appeal will be presented to the General Assembly in September> Meanwhile, the French will pre- sumably push reforms in all their North African territories, and the Nation- alists, while attacking French motives and the inadequacies of the reforms, will seek to curb their extremists and to prevent disorders, EASTERN EUROPE ' Further gtterrflla attacks upon Greece are expected from Albania and Yugos.l:avia (page 3). Desertions of Soviet militarp~ersonnel in Austria have markedly increased since early May. MVD detachments charged with the prevention of further desertions are being assigned to the Soviet units that are to be transferred out of Austria in the near future. The high rate of Soviet desertions in Austria, considerably greater than in Germany, is largely attributable to the fact that deserters are not returned as they are in Germany (within seven days after capture) under the Berlin-ACC agree- ment. The US has objected to the UK-Yugoslav air discussions on the grounds that the course of the discussions has revealed that the Yugo- slavs are clearly determined to exclude US airlines from Yugoslavia. In the interest of US-UI~ solidarity, the British have deferred to the US and have suspended the negotiations. Meanwhile, faced with the em- barrassment of explaining their changed position, the British have drafted -i- Z'OP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRE']' a note to the 7tu~goslavs which practica?~lly admits that 3YS protests a~?e responsible for their reversal. The note makes clear that ~a~goslaria will naw be forced to negotiate directly with the US for a TJS-'Y'ugoslav air agreement or face certain US denial of the necessary zonal overflight perrnissions'for its projected lSelgrade-l~~ndon route. Substantial wins in Soviet industry and trade, moderate ad?ances in transportation, and poor progress in ce~nstruction are indicated by figures recently released on Soviet economic progress f?r the second ciuarter of 194?. Progress oar the fealfill~.ent of the Soviet State Plan appears to lie considerably better than during the previous fifteen months, and only fog ministries out of thirty failed to fulfils theix? second quarter quota. Sixteen bad failed to do so during the first quarter of 194?. PEAR EAST-AFRICA Affahan interest in lyorth Rye~t Frontier triiaesnaen is considered ti ns .r apolitical rcianeuver but not a threat to peace in the area {page 4) . Se ration of the Turkish resident from art leadership, as decided by the Republican Govesn~nent Party, is expects t ~ the eventual resignation of President Iazonu as leader of Turkeys oldest and strongest party. Eis resignation would represent the first major achieve- nnent of the opposition Democratic Party (which for some tinxe has sought to raise the presidency abo?e party politics) since the inauguration by Inonu of Turkeys ~aaulti-party system in 1945. At the assns time, however, such an action would also be to InonuHs advantage: by disassociating him- self from party politics, he would, beconse more than e~-er the "rational Chiefad and ffiight well retain the presidency even if the Der.~oc~?ats shor~ld defeat the Republicans in a future national election. FAR, EAST The ne,~otiations of the l~orean ~oiaat Go~ mz~.issioa~, now deadlocked, are expected to break down (page 5). Major Dutch-Iaadonesfan differences continue to ~alock formation of an interiBn federal governxnen TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 "1'OP SECRET The Chinese ~otxanaunists are a floitin the mou~atin um?es# ~ '~ aiwan age 7 . The ~~ ecoaaomic pow in Siam will be .fl?~r ipro~e~ by the concessions which Siang has x~de ~ order to obtaa a certifie of sterling coneertibili#p from. the Ba~ais of Ea~gfland. The. British Financial Adviser to the Siabaese (aovernffient who is also a director of the Basis of laaagland} has naain#afaaed that such a certificate ~n be given onfl~ to a "responsibiea' basis; he has declared that the Basis of Sian? coufld not . q.lify as C6responsibi,e?' aanless a Brftish comptroller were appofaated. k3o#h the Financiafl Adviser and the new British Co~aptrofller are opg~ased to asap coanmerciafl activities ~ Siam which are not ita some wad connected wilt British interests. ThAy t~aay therefore be expected to favor the l~- owgied Shell ~i1' Gompan~ over the Staaadard '6~acuurn iii, Comp~g. ~rt~ter t~~~~~i8~f~g~ 4r ~n ~i~~'~ .~P~~~?nr~ i~~ ~~ ~8: but large military operations are ?mflii$el~ before the occurrence of a genearal Sino-Soviet breaisdown. Although So?iet militarg e~uipanent-- inciuding an anti-tams rifle, machiYne gams, grenades, grad first-aid kits-- has been captured from the +>~ater iViongolians, no evidence exists that So~,et persoaanel were directing the ~~ag?lian operations. The I~a~ait chieftain coffiamanding 1?caI Chinese forces claims, howe?e~? P that i~a~ais units ita fleague with fester ~liongoaians were furnished ffii,flitary supplies by a Soviet ffifaaeral expedition that i~ been e~loring the area worth of Peitasha~a since A~Iay 1946. Alth~h manw leaders caf the Burmese Anti-Fascist I..eaaue favor intes~im donaini~ status for Burma within the i~ritish ~as~ffionweafl~a, the I~eagne has heretofore laid such stress upoaa the issue of ,independence that modification of this demanei would onfly furnish political caiaital to the ~oncaa~~ist Paa?ty opposition. The ~ Go~-ernment has rejected the propo~afl for short-reran tio~ninion status which a Burmese good-will mission brought to Loaadon and has aaanotmced its intention to expedite legisflati~a granting ~uraraa independence as sooaa as the lBaarrnese ~~- stitution is completed. V4dllaSTE k~1~ISPi~Iti Ferod is a acted to in in oflitical force b receaa# ch s ~ his adntinistra#ion page 8~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~E E~~E ~~ ~sy,~ Q~~ans~J Si 4ie~.DE~~~A~3b 1n~. ,Zgm~lr6s 6,iM~w ~6A.A ~.~:.~ ~m*bc~':u".~&p'o~,.bC~~. S~./~. `5~7~~~3'~b~a ~.~~kl ~"^~ P~tl :b~~fi~.~~ 3,3t~~r'~~'y ~3w~ ~~~~~~~ ~ ~ ~E~3~~h"r ~~,x~3?~~~- ~~ ~~~~~~Zy ~ uf~~~~~,~~y ~~~'~~~ ~a~ ~~.~~~-~~~ ~~~~. ~~~~f~~~ are ~~~~ed R~~~~~ ~~~~~~~P~~~~~ ~~ ~~~ 5~~~ ~~~~~~~~ ~~~.~~~ ~ ~~~~~~~~~~ ~i~~~~f ~~~f~~ ~~~~ ~~ E~~~~~ ~?~~~~~~~ ~@ ~~~~~~~~ ~~~'~'A'~'~'~ ~~.~ ~~ USSR :r~aay new f~~r~~~?y/;'~q~po~~~,ra~~s+C~~@~.~~~~~~ ~ ~~~~z~ ~~ ~~~,~~ ~~~ ~~~~~~y ~f ~~.~~e~a ~,~.~~ Il Eaal.e ~~~M& KrV B L8 8 ~~~ USSR ~.~y ~~~~ ~~a ?~~~a~ .~~~t~i~. ~~a~~d~a~~ ~~~~f3~~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~ ~~q.2~~(~o~~~ {q~{! /~~~(~Y~'~y~gq ~~~(~~~~~~q~'py ~'~@~~ (~4~~?~ ~~$S~~q{,~y~p.~.$~%~~~~~y~, {)y~pp~y,~~~(!~~~q~f~~{`. ~ud@.Rf~.ll~ c)cm PA~~EdXF ~~?-?~~A~K~C LI~~?SGi~a?~ ~ tYl~ 1~~~~~iH.Ga ?.d'N ~'1ll h~i IM~S~6 ~O ~/ @l'iY .~~~~~ o TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET Er~.S`~E EO~E ,~.? S~~YY~~ ~.Y~ ~~ ~~~~~ ~~~~~YYY~.~ ~~~a~~aa~Y~ ~Y Y~~~:~ Y~~~~~Y~Y~~ ,~ ~:~~~~ ~~~ ~~ ~~~~~ ~~~~ ~~~Yd ~ ale ~c~ ~aa~r TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET E~~S~ ~~ ER~~~ ~~~~~?~ te~e~t ~~th eat ~`~?~~tme~ `the te~est e~e~ee~ ~~ the ~.~a~~ ~s~~e~~~e~~t ~~ the ~at~~e ~f thy: ~?~ meet ~'~~~t~e~ t~~sffie~ ~. .the ~~~~~ble e~eat~~~a cif ~e~e~~~~t ~~t Mate t ~f ~~as~ ~~~th eat ~~~~t~e~ P~~ee ~~ e~~side~ ed t~ ~~ ~. ~~lft~ea~ ffia~et~~te~ wh~eh e~~t~te~ ~~ iffi~edte t~~eat t~ e ?~ ~?x~~~e~t ciao.. the ~~~ee~t, at ~~ lie~~;t~H ~~ ~n?~~vate~ by ~it?~e ~~e than ~. de~~e t~ a~~ea~ as the ir~,~~d a~e~ ~~?~eet~r ~~ 4~ne b~~~e~ t~~~~e~~ ~~ ~~~ a~ ~ ~e~~~~~ .A~~ha~~~ta~ a~ ~~ ~~a 9 a~~ ~h~~e ~~~ ~s ~f meat ~~t~e ter a ~a~~l ~?~e~~e~ent. A ~~te~atia~~y ge~??~~ as st ~~ the ~it~at~ f~ the p~s~~hil~t~ Yhat ~~r~e~t~ ~e~t~~e~t~ ~~~ ~~ee~t affi?~i~ the t~~~e~ffi~~ map e ~~t~~?e ~a~t~e~~~~ ~~ i~ the ~a~ta~ ~~~e~a~ffie~t sh~w~ ~.~~~g ~e e~~~ ~e~t h~ een~~~-e ~e~~edati?~s t~ the nth wh~eh e~~~ca ~~- Fa~ta~ i~t~ ~e~~e~a~ ~~~?~de~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~~~ ~S~LISSR ~~~t C~~~~~~~~ for ~?~~~~., ~~.~~fi~ ~a~ ~~~~~ ~e~~i?~~~ ~~~~~ ~ ~r~ay X94?,, ~~ yea ~~?~~sa~, ~d an e~~ta~a~~ ~~?~-~ ~~~. ~~~ ~.~~~t~atx~a~~~ s.~ ~~~~~.~~~~~ l.eiy. `.~~a~; ~~y 7i~~Fsbe, ~~a~`s. ~~~.~~~ tie Sta~~et ~~eA~~~ate~ ~~~e ~tu~~e~r~~.y ~?~i~~~~ tca y~~~.d, ~~ t~ ~ +~~~~t~rs~a ~~ p~Y~t~~a~. ~~~~ t~ ~~ ~~r~~~~ted tie ~~rat~.~ ~? a ~~?~~ ~~~ ~r~?~a~ ersaea~fi. ~'~I~is ~a~~e ~~~~~~ ~~~eci ~~i~t ~ca~~x~$~~~~~~ prim ~ec~~~~ ~~~ ~~.y ~~~~.~ tie ~~rre~t ~e~~t~~~~~aa~, t1~e L~~. ~~.~ e~e~~e~ +~ ~~~~r~ e~~e~rt, ~~t~; ~?epeate~ ~ ~~~?~pr~~Z~~~~ ~~~~t.~a~~e aap~ a r~a~r~~a~t ~p~ee~w tat~~aa ~~ ~~~~~~~ aee~xe~~t~, tca ~~~~a~;~ rs~~tf~t part~e, ~a c~ai~~s ~~?~ ~a~i#f~,ll~ ~21~.~1~, i? ~?~ i~~~f~g~. `~h~ Y3~ ~~~?a . ~i~~d ~ ~ p~a~~~~l~ ~.~d ~~ ~ dpi ?a~c~ ca~~ ~~~ aa?~a~ ~? ?~~1~ffi~a~t 4~h~~g. ~~ ala~~~a~~ Sa~et ~~?~~. ?? $ai~ is ~ prag~affi .~ ~e~l#di?i~d ~~it~~h p a~gh i~ ~~~ i~ the Year Farb a~ ?a~e ~1fCys ~i,~a~lg~ ~s~?~?i~ ~ha tISSY3. ' ~'~?e~ah h1f~~~s~ ~8'a ~ S?~~~e~~ ~? ~ Ezra ~?~~~~~ ~Y'ag~~~ fs ~~ ~~ra~g ~~ ~~i~h, ~a~ ~~ea~h ilia ~a hied ~Isan ~~~h wiY~ which ~a~~ig~ h~ihi~~ ~ad~t~~ re~i~d ~~~~s~~~ ?ra~ the USSR ~d ?~a~ ~~e~ch C?raa~ii~. a~dcr t?a side with tha jU~ ag~i~s~ ~ t3SSR ~fd~t~t d ~a a.~da~ ~hc ~~~r F~~ach gaYicp a? g~e~~ ~~ E~~~ t~~~t di~isf?~ ?f E~~?. haldiag ~ hip ca~~ag~aa~ d~ci~i~ ~? ~~~~ ~ ~~ca~e ~~~g da~pft~ Sa~~~ appasfa~8 ~i t was ca~~id~~Y2ly s~e~~ad ~y .~ ~??a ?? ~e is ~ ~hc F~a~c~a is ~ si~i~ a? a~~~~ l~~.d~~?~hi~ a~ ~ dig ~h~?e~ ~~~g. ~id~~il~ ~l~a ~~~~~~~~ h~ d is ?a~e d~~I w44h a ~'~~:~ch ~a~~~~is ~~ ae~?i~~ a 1~~~ ~u~ "ca~~~af~~~s~ wh4cYg did ~?~ icy co~a- ~i~~ a~ .~d~,~~~Y~. ~?hi~ a~~~ i~ ci~~:~iaa ?? ?d Sa~ie~ r~?as~, _ -~-~,~ da~f~d ~a di~~~~ .~ ~'~~~ch ~affi~i~ aid ~I F~e~ch lic a~i~ia~ i~i~ind the ,~~~s~~~ ga~~~. g ._ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET Soviet oppositio~t to point action ?~ the basis of the l~rshall proposals was based upon wore than the faaniliar concept that Cozad ffiunisrn flourishes upon econoffiic distress. On this occasion .the t7SSR was caught ~a a real dilemaxaa. Tf the iJSSlB. chose to participate ~ the reeovery program, it would have been obliged to sacrifice the e~clu.s~ve econo~i~; controls established in Eastern Europe sce the war and to permit a western reorientation of Satellite economies into the broader European economy envisaged by the program. Such a course, which would jeopardize Soviet hegemony ~ Eastern Europe, was absolutely unacceptable. On the other l~.nd, by refusing to parti~fpate the USSR would violate a cardinal principle of Soviet policy: to permit no com- bination of powers without Soviet participation with power of Preto. The ultimate decisflon to follow this latfer course, despite its potential dangers to So`riet intet?ests, was probably made is~ the confident expectation that France woold not dare to eater the program after Soviet refusal. This decision to gamble urn a French withdrawal gained further support froffi Soviet convicts?n that the iJS will suffer an econoanic collapse before the recovery program can bec?ffie effective, and that such collapse can be hastened by Soviet non-participation. The strength of the Soviet opposi$i?n to the Europe reconstruc- ffon program can i?est be measured by the Oast?minu~..e refusals by the Satellite ~..a.tions to participate. Until the final word was received froffi those countries, there was every evgdence of their strong desire to pair.. ti.cflpa.te. Such evYdenee of overpowering Soviet opposition gives waning that the USSR will utilise e~rery opp?rtunity to defeat the ends of the re- coverp prpg~ana. . In the inBrffiediate future the fYSSR can only resort to a propaganda ?nsl~ught ~h the program,, because mope overt~action +(such ~ a wave of Comrntenist-led strikes iai Fraaaee~ might weai~eri the Soviet positive in ~'estern Europe sill further. `moo will pr'?bablp be guiding coa~cepts ~ the Soviet propaganda. campaign: ~Y) that tine Ea~ropean states, because of their rtvala~ies and conflicting Ynterests, are incapable of deveboping an effects?e program; therefore, the projected program will only disa.pposnt the exuberant h?pes of flee participants and thus promote fur~er a~@agonisna among there; and ~2} that fdne~t3S within a great will undergo a~a ec?nomic collapse that will make ia~2possibYe ties fa~lfillment - gQ .. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET of fits pr?~osals ar~d may ff~ally lead ~ the eollapse of eapitalisan gener~ ~.lly. So~i'iet gr?~ag~.nd.~ wilfl thus: (1) seek to increase suspicf?n and ~i~ision a~o~g the ~rtici~at~g s~.tes; (~} eapitali~e urn emery snag ~.nd failure in 'the develc~p~ent of ~e program; (3) continue to east sus- picion upon. Z3S :~oti~s; and (4) ~rediet the collapse of the US economay h~fore 4he gr?gsagn can hoe fully effeet~.~e. ' I~ ~rB,ew of the eertain~ of ~goro~as 3c~et c?~teractiesn, Both lea and ~fldauflt have shown an$fe~ regarding any delay in the effectf~e i~ple~entation of the pro~gyecti~~-e prra~. ~e?fn is flaarticulariy appre- list the i3SSflZ sh?n1~Z succeed in ~x~s~.d~g the participant Euro- pean states that it is ~,in to hope that timely TJS aid. wifll aetc~ally be fo~~eoffii~ag. die has predicted thatm ~ effective f,TS support is defera~~d unfit the late fall or winter, Eurogae, ineluding Frances will be lost. -li- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET El"'FECTS ~F' ~TO~T-FARTi~IFATIOI~ Ol~i ~ S.l~TEI.LIT'ES l~oa-participatio~a bar the Easter. Earopeaa co~atries in the fortla- comi~ag Farts Conference on the Idlarshall proposals will seriously coaa- plicate the discrvssioas and will create numerous probleax-s for the Coffi- munist-doraninated governments. Poland, I~ungary, Yugoslavia, and Run~ani~. are in desperate need of westea?fa econo~tic aid to reconstruct their war-ravaged economies. 'The economies of ~~e~hoslovakia and Finland, while Tess dependent art western aid, are so ineicably tied with those of garticipating nations that the t1SSR's decision has presented them with the gra?est problems. `the Marshall proposal, thereforeg h~.s dramatically highlighted the basic coa~flict in these countries between national self-interest anal subserefence to !.the Kremlin. ABonmlZarti~ipation will inevitably increase popular re- sentmeait ~,nd ~.gnif~ the difficulties already facing the Communists in maa~taining their police control over these countries. Participation ~ the plan ~ e ~sations of Eastern Europe, however, co~~id have benefited the entire Ee~POpean eeo~omy oa~ly if the TJSSR had also agreed to cooperate and to rela$ its economic deffiands upon the Satellites- ~rtfculariy for Polish coal, Rumanian and Hungarian oil and food, and ~'ugoslav raw materials, liven co~~tinued Soviet obstructionism, therefore, western aid to the Satellites would materiaLAy increase their ecohornic potential without producing. corgespondfgsg benefits to Wesgern Europe. The political nature of the Soviet derision is undeglined by the in~- escapable conclusion the USSR had wore to gain, econonafcally from participation by its Satellites than ~lestern Europe. Increased Polish coal production, without which full recovery anct greater ic~dustrialization of the Polish economy is innpossible, is depeuslent upon the import of westeraa ~raachinexy. lNl(oreover, Poland's decision will seriously impair its chances to a World Bank loan ~ $ IOQ,00?,000. "i?he USSR, there- fore, appears vriliing to lose ais opportunity to make Poland e~ononnically strozag ~ order- to deprive 1"~estern Europe of inc~?eeased c~uuanntitnes ok Polish coal. The USSR would have similarly benefited by Ruafs y~.rticipation in flee Isl~n. Increased production of Ruanani~n oil and food rescaltiug froffi -the import of westea?n zna~hinery, agriculSural e~.ip~tettt, seeds, etc., is essential if RunZania is to recover economic stalbility; and the USSR probably would have dear~anded the greater share of any such increases in the Iorm of reparations. -~2- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~'6P~f;RET (.~~ ~f f~~ ~~.~~~ ~~~~~.~ f~~~ ~ ~~~~r~~~ ~.f ~~~ w~I tae ~~~~~~~~?~.~.'~ ~.~~ ~Y~ ~~~ ~~~~ ~,~ fie' ~~~~~?~~ `~c't~r~ w~ f~~ ?~S~~ ~.~~ ifs ~~.~~~~~f~~. ~~~~cf~l~ ~~~~$~~?~ ~~ ?f :~?~~~ ~~~f ~~ comma e~vp~~y:.. ~~~~h6~5.~ f~~}apl~~ ~~,~~~~.{f~e.~~r.$~~pq~~~yp~~~~~p~i1~~. ~.j~~.e~~ ~~~$l~a j ~~ljw~f~yp ~as~n~~r ~{f~q~} e 'vb'~t:Y ~,~v,o o,~' A8 A3~~G~8~e ?~ ~`?.d r~"i~~Ci.~'s ~dPai~bS+7 L'VJS ~j. ~.fd~ ~~t~.~3~~ l.b~G.ri.~~?id?~~VVY 674AR~L& ~~4 ~~e ~~s ~~f~~i~ ~.w~~-~13~~ w~~4 ~ ~;:~~~~,i ~ s~~~~ X12 ~~ ~ f.~~~~a~~?~~ ~1~~~~m~~ ~~~~~.~ ~ f~'a~ ~~~~~~~ ~~ Eft l~~~t- ~~~ a~ ~ ~~ ~~ f~ ~~~a~ ~~ ~ ~~~i~ ~.h~~~~ #c~ the sa~~~~~~ ~f f~~ -r~~ cF~-nET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 _ C. 9 tau An n-+. Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~*- J ~ ~ T?, ~ - 5 5 ~ -. . ~~~~~~~s Pages '~`1R1~~S ITT ~~,~~` ..:'.. ............. . . ~......... i - ~~i C~echcr~$~?a~ ,A~li~e C~e~ati?~s ~ tJS... .. .. _...... 1 St~.tegf~ P?sfti?~ t~f italg ~ C'?~tffie~c~.I A~a3tf?~a . ? .... 1 ~STE~tI~ E~P~ Politfeal ~~lf~at~?~s ~f a ~~~e~s ~ ~ra~~e ......... 2 ~1~ST~RI~ ~tTRCP~ - S?~et ~ Sh~p~aet~ts ~ R~affiania ........ ....... 3 S~t~t~t P~a~t f~~ Y~te~;~t~I?n of Satellite Grp?~rtat~~ .. ? . 3 ~~~s~led T~ainir~g e~f Suet ~~ta~ ....... ? ....... . 4 - ~~sitio~ ~ tP~ ~~C t~ ~aese [ali~g ....... ? .... ~ Chinese F~?~g~~ts ~ R~.~eha~f~.... ? ......... ? .~ .... 6 't~SRN' I~SP~~~,~. ~~an~ent P~1ltYcal C~is~ us Arge~atl~a ..:........... ? SF~CIA.I~ ~'I`lC I.a~S . ~~. ~~q~~e~q~ ~ ~e 5e~~~~/~ygt~~~o~~ ~i ~dfa . ? ... ? ..... ~..... a .. a A7 ar+?~Cd~e~ ~~~i3.1~4~L/]lAi7 ? . s ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? e e ? w ? ? ? ?~~ ~, ~ss~nsnL Na. ~Q C~3ANQfi in Class? D~CLASSiFIED ..Mass. CFiANC~D T0: T9 S - DDa1 lleras. 4 Apr_77 ~'d~:~~T Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET OE ~{rR~~ .~~~ ~~ ~I~g~~~~ ~~ ~~ ~ S~ER~~ E~RO~E ~~~~~~~~~~~ ask E~.a~?~~~~ ~~ ~~~~~~ ~~~~a~~~~..~~~~a. ~ ~g ~~~~#, ~~~~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 .., ?~ TOP SECRET EASTERN EITR?~E ~~e a~~nc~d S??i~t i~t~~ti~+n ~~~lp R~aia wi~in. ~~pre~e~~ off? t? di~~~~dit a ITS (~ 3). `~~~ S~vi~t-R~~ani ~~.ilw~.~ a~~ee~~~t p~csbably f?resd?ws a m?r+~ ~~eu~~i?e pi~.~ t~ i~~~.te alp S~.t~~.ii c?~~~i~.ti?n~ ~~ste~s ceder ?~~ ~.~?~i~ .~~ 3). la~asr ~pst~~a ~P~ 4)? g,,., `~~~ R~..~cn p~e~~ a~qd ~?~di~~g~~e~e~tg?f?~?e ~?~epiatgi~~~lit f~~e ~gn~d 8i4E~cc~~.t~p~~~(~~~{~.~~~i y ~~qq eq~~ ~.~.?~~~y~~.??~yo~}8~. ~~.'1 ~ a~'~g4~8~nv~~q~~p~?gY~',16~.}.~~~ ~~?C .t6.8y1~w~yRy6~J~Sq~S~~~wv~` }~~~~. 688. ~.?6dL8i8'7A7{E~tJ~ Ga6~?~~91 Qom, ~~b~~lb ~o 4.~~~~~Nd~'~L.~B Yff WHffi~ `s ?iA6Hi6YAi8i~is7 nb6A~ d~,~apa~ed acid ~,~w~ ?f a '~~t ~ meow ~.i~ited t~ ~a?t~'ti?~~ f~?~ e ~~~~~~ ~?~a~a~ist p~e~~ d ~~ne ~~d?n ~ai~.~ W?~Y~~ar. R~di? ~aada~~t ~i~ ~c~~?~~iy dig i~bie f~?~ Radi? h~~~~?w d h~.~ ~d?pt~d ezm cli~~l~ ~r?OS~~ety ~ti-~e~i~~ li~~. ~e~~,~~~~ tia~ ~~die~ i~ e~~d~r ~4~ict ~~~e~~~~~1 c~ffig~?1 d e p~~~~ i~ ~e~t i~ iin~ by i~dire~t ~~~d~r tTae ~7S aid ~ UR wiii ~ri~ T~.v~ ~.i.~ ~~a~c~ss i~ ~ee~ta Ii~~i~~ f~e~d~~ ?f ~ p~~~s~ ~d radi?~ ~~~?~da~ac~ wig ~ t~~ ?f a Fea~~ T~~~'~, ~~a~whiY~e r,~ R~~l"~~pi~ ust ~e~~nd? f?~ ui~.~~d n~~s ~?~~~~ ?~ P~Cy a V~ic~ ?f Affi~~i~ay d iTS~ ir~~r.ti~sn b~iletiY~~. Ake E.A.STaA~'R,~C1~ Se~~a~i i x~~~ ~~~ ~~ ~alied ~n ~~ ~?e ~~tt~e Asti?~ ?f S?~iet i~t~~?v~~ti?~. i~ ~:?~~i~~ ~.ff~.i~:~ whi~~ ~ been d~a? ~a~~t ~i~~e ~ widw~l ?f S?~i~t tx~ps f~? I~ in T$~~.y f9~6. F~; i~~ ~~i~ist~~ .~~~ .~ d~cia~ed &~is i~t~~fit~~ ~~ag t~ ~ub~it Y? e l~a~if~ ~~~~~d~l~d ~~~ve~e ?~ f~ ~~A~) ~ S?~i~t ~i~. ~~?~~ai ~ w~i~~ h~ ~~d und~~ d~~e~~ i~ A~~?~ 19~~. ~ Soh ~~d a Imo, jib ~dd~tpt~dip wiil suis~t his de~i~i~~. b~ a ~~g~d S?~t ~~~~~ . ~.s~~~~~ x~~~~ni P~'?~i~~~~ ~~ ~..~aa?~ iiic~i~~ ~~ wi1F pr?~ak~iy ~~~t~~t t? a SC. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 =~ TOP SECRET ~ Ake EAST ~ .,: stern ~~mmissf? ~~~~ wh~ii~.~ ~~~t~es str?~~ i~ the ~`ar ~~ss ?~ I~a~~h~ri~ ~ ~hi~~ ~, 13~`~ ~ei~~ a re~i p?ssi~iii~, e~e~ ~h the re~e~st Ia~? hi~ese ~?mm~ist ?~fensi,~e ~.ppears t? have r i~ ~?~rse ~p~.~e ~~. STE~~ ~ET~J~RE ~~~?~'~ First p~liti~~i crisis ~.s ~reside~t ?~ Ar~e~ti~ appears t? ~~ de~ei~pi~.~ ~~~~ ~, i~er p~5~iic ~~.te a~t~ ~~~g~?i~ is~li~p $~ ?). `~~~ ?~~~~ dat~* .~~ ~ ~~.~ ~~~~~~~~ ~~ a IVfai~te~~c~ ~~ - ~a peace aid Sec~ri ~i the "eete hemisphere ~ been set by ~ra2iY fir 15 est. ~~.t3.~~s .~~ e~ issued ~ the F?rei i~xisters ?k aii ~ Americas ~te~a~ifcs e~~;ept icaraa r$wh?~~ ~~er~me~at ~:~~ ~~t ~~~~ rec~4~ed ~i~ Baer .~~.e~~.cas~ G?~ernme~ts si~ace ~~xr~.?~a's ~~ ~?~~ d'et~. ~r5a?r .t~ ~ ~?~~ere~ce9 ~ ~~ver~i~ ~~rd ?~ the ~'~.~ American ~~i~~ wii~. earl ~~t ~?~es~tat~.~~s am~n~ the ~ri~~s ~ernments ~~~~~ a principal pints ?~ the pr?~ectesl ~e~aisphere defense lea. the ~3S ~,nd ~ra~i~.i~.r~ ~~~~~~~~~~ agree th~.t ~ ~~~~ ~e~?ence ~~?a~id c~~ine ~. deiiberati~ t~ the te~?ms ?f this treaty, which i~ t? ~i~e permanent ~~~?~ ~ e ~arinciples ~?g?p?ted i~ the pct ~~ ~h~.pnYtepec. Reeen~indicati~~as sn~~e~t ~t the t~ Americamms, th~h ~~~ ~~?ceedi an the tacit .t they viii ~?t be ected t? made P~'?~isi?n ~?~ it in their awn ti~a~~.i ~~e. ~ An iuential pr? ~T~ newsga~.per, ~i `~iemp ?f ~?~?., is insister that the Aden ?~ ~.~~ enditu~?es i~a~r?i~ed in t p~.icipati?~ in hemisphere arms sr~dardi~ati~n ~e dis~iha~ted i~ acc?rdance with the pattern es~ ta~-iishec~ in ~~rld mar ~ a~ in cep w~rc, ~e erne bq the US. ?i~~m TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ,` TOP SECRET C~NE~.,~.I.~ C ?sl? ~ ale Oeratfoans to US Rep?rted Czech ~tal~e ~CS~) plaa~~ for a re~lar transatl~tic ser~ce t? New ~o~?k ~a S ?~ ease US ~o~stell~tl~s woufld knro~de the oily through ser~ce by y coa~~e~?ctal ai~lhne fr?~ the US f~to ptghce Igs. (Czechoslo ~, has ~eclp~?ocal a~ agreea~aeaats the Wei, A:a~~'~, ~ ffioa~t ~~~?~~. ~?.o~~~~'8~~, B~E~o?~~~113~ ~0166+1dll~, ~~~~b~, gYua~gary, aad ~~ag?sla~~,.) This pI to ee~d Czechoslo~aa"s ~ter? ~~.t~es~al atr operatl~ns fs pro,hly favored by the USSR, despfte Czechom sl?~ags p?lltlcab l~depe~de~ce. `the USSR appa~?ea~tly stlAl hopes the C?an~uu~sts wtll gam ctr?~ of this able. Shod the Czech?sfl? Co~~u~fsts ~acx~ease thetr leaence a~ the C?ve~ent (~hgch deaes aaoit apgear la~naffil~eaat), they wlli rene~r their eff?~ts to ~.~ conta??~. of the, which coed ~e ~. ~?wel h~straaa~ent ~f So~~t P?llcy. ff Czechosl?~a~a swings sharply toward the west, the USSR caaa be expected to obstruct Czech~~l? ope~?atlo~s ~ the gals. Strate?;~c ~ositfon of Yt~ly Coznerclal ,A.~atto~ ftaly~s ge?graphic posfltlo~ as a anatura2 bridge for sh?g?t4r~e, air ~traan~p?rt operattoans tDetwee~a the Nea~? East or gals aaad ~ester~ Ee~?olae cage b~ e~ploi~ed by etthe~? Easte~?an ?~? ~Tester~ lanterests, or h, depe~d~ag upon ftaay~s feature political ?~~eutation. ~~ The ~i'esteru dowers, u~a~le to ?btaiaa ~~~ rights ~ the ~ s, are usiang ltaliaea airfield o~ routes t? tie Near East. The Satellite States, ~ ~aar~; ~p~ear t?,b~ de~~i?~~ a ~?ut~ .through I~aTy gnat will obviate .~Ylied coaacu~rea~ce t?. ~v~rflight ~f .~~asta?ia. This is sues~ed by the receaatly disci?sed TtaliaaaORua.iaan pr?~r~sioaaa~ ?eeffieut, which pro~ldes. for the Soet-c?antr?Iled :Rua~aaaiau ai~li~e TARS to fly thx?otagh I~~.dan ~ returan for Raliau Aandiug rights at Bucharest. Thus, as Czechoslovakia pr?~des a~ o~ntlet fo~? Satealite aim traffic t? ~-ort~neran Eau??pe, so gtaiy away ass~g~e c?~aparable tamp?rtce t? the Satellfltes as aan outlet to southern Eaarope aid the Smith attic. _g- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET SRY~T EUR~F~ ?litical Y~ l~ti?ns ?f the Arrests, xn ~'~~~ the highly puhliei~ed arrest ?f a ?tag~ ~# Rightist pl?tters ley Scseial~t l~,tericar F~fnister ~e~re map strewthen the S?eialist la?siticna visma>~s ~~ ~?~~a~r~ists in weir strat~gie Y?~ w?r~i?elass sng~rt. 'T&~,e ~~~a~nunists have based a lame dart ?f their ea~xi~ai t~ ~?e~enter the ~rn~ent can thei~? elaiffi t~, .fie the ?nly ~r?teet~rs ?f the w?rkers' h~terests and ?~ ~ ehar~e that~the S~eialists have drifted t~ the ~i~2at. ~?he ensure ?f these k~i~~atist rev~l~ti?naries, ~nc~s have i~en under e?nsta.nt g~lice surveillance and whose nuers are insi~ni#iea~st, c?n~es. ~,t s. tine when S~ialast Fren~fer R,affiadier is ab~tnt ~? #~r an~tYaer v?tc: ?f a?nfidenee ar~d whey the- ~~~~unist ~nreat to his re~i~ne is a~ m ~r~aehin~ ~. elfin ?1?he tflsnin~ ?f the disel~su~?e by the S~eiaa.ists, th~re~ f?reD saa~~ests an a#fc~rt t~'de~rive a C?na~t~ists ?f F?liti~l ~~anuniti?n. ------- ?recaver, the ~?vern~te~at's a~tien. f~resh~.d?ws new ~?~ ainst t2ae Ccs~~unis~. Se~reral ffi?n~s ~'~9 ~e~~?e ode several e~aRp puhli~ cued ar~?ests ?f c?llah?ratf?nists and disei.?sua es ?$ Rightist amts cashes dust pri?r t? tai string xneaseares a~.inst C?~nrn~ist i~iltratfl?n ~# ttfle Farm; ~~.?lice. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 . Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET EASTERN EUROPE Soviet Grain Shipments to Rumania The recent announcement that the USSR would supply 80,000 tons of cereals to famine-stricken Rumania. is a flagrant exploitation of Rumania's food shortage for political purposes and is designed primarily to discredit the US. The public announcement emphasized. that the USSR had agreed to provide all that Rumania had asked for until the next harvest, and that the Soviet price was far below that being asked for US grain. In actual fact, the USSR is making available little more than it has demanded of Rumania in the past few months for reparations and occupation troops. Moreover, 80,000 tons will probably not meet more than 25?Ja of Rumania's needs until the harvest, which itself is expected to be only 50~, of pre war. In addition to providing only slight imruediate relief, the Soviet action in no way solves the basic causes of Rumania's critical agricultural situation. The small quantity of food involved and the timing of the trans- action indicate, therefore, that the USSR is interested primarily in nullify- ing the political effect of US grain shipments to Rumania and in attempting to counteract the Marshall proposals by showing that the USSR "takes care of Sts own." Soviet Plan for Inte~rafcion of Satellite Transportation The recently announced Soviet-Rumanian railway agreement proba- bly represents one element of a far more extensive plan. There are indica- tions that the USSR intends shorily to integrate all Satellite communications systems under one centrhl .authority. A multilateral Satellite air-transport agreement has been discussed, and it is clear that strict Soviet control of all Satellite air policy has been consistently exercised. While details are lacking on Soviet inten#ions with regard to merchant shipping and inland waterways, soffie features of the plan for railway development are now available. The USSR i.3 insisting that the existing road beds of key rail lines be widened so that transformation of the actual trackage to the wider Soviet gauge can be made with "incredible'] speed if res;uired, l~or the present, however, the USSR apparently prefers the narrower European gauge for Satellite lines because it permits the use of European rolling stock and thus -3- .TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET 'a'c~~~~ ~~~~~~~~~. ~'~~~' ~~ ~~~.~~~a~ ~~h~~~~~. ~~~~~T~ ~``~.~~ Ass ~~a~~~ ~~ ~~ ~~~Y~ why ~~~~i ~~~ ~~ ~x~~~~ ~~~ ~ ~~~? b~~~e ?f ~t~z~~- ~~~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~h~le ~ ?ff~c~~.~ p~bl~c~~q acc?~g~np a pr~g~?~~a'~ a?~e m ~~nt effip~na~~~~s i~~ 6`~daa~~'~~~~a~s9 ~~~~~9 ~ a~~a~ effect ~~ ~ ~1 f~ ~.~tflq~ ~~ ~c~ea~e a ~~ffi~e~ ?~ S?~~~ wc~rP~er~ ecffi~letef~ ~a~ g~~e~~aent c?rr~puY~f~n. Y~u~nu c~~~c~?fpted t~d~e~ ~~~ p~~g ~~~ ~~.ffi~D1~9 ~T~ ~?ffi~~~~d ~.~~~~' '~d~ +~?3'k'~~9~~~~?~ ?F ~k'~~IC c c~~n ~ ~? wCei'~: w~e~e~e~ d~ected fm~ a ~af~f~um of f~a~~ ~~~~.~< ?~.~ TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~'AP. EAST Oppositioga in the ~'E~ to ~'~panese ~.ligag The problegn ?f ~'ap~ese whaling in a Anretic represeza~ one of the very few ~ur~stiogas on which t,.he Ear Easte~a ~?ffir~ission has been unab~.e t? reach agreeggaaegat. a 9 ~~ae, the ~S igaf?r~ed ~?ep- a?ese~itatives of ~?~?way, Ausalia, New Zealagad, and the [TIC that, des- pise their protestsy S~AI~ would be auth?rized to send a second japaneffie ~ag~ed whaling e~ped'r~tion to the ~a~i~rotio. The igategasely bittes? oppo- siti?n led by Australia to this relatively uuAnaiznportaaat matter is caused partly by a fe~.r that a precedent is being estab3ished f?r commti~aued ~s.panese .Aaat~.rctic wl~.Iirag. N?t ogaly do all f?ur ~overgag~ents reg~.rd this whaligng as ~. fhreat~but Australia and New Zealand ~eogasider it a dagagerous se~aarity threat. ~iow~~ver, the lJS ggaai~a~.ins 4h~t this e~peditioga, like the omme last winter, is a purely. tegga~rr~.rq e~- pei~ient designed to provide foods and oils vital to ,~apaga which the TJS w~ruYd othea?~ise have to supply. .~ustrs.Yi~9 New Zealand, end the BJ~ carried fiheir protest to the ~'~C ign tine fo~?m of a paper, int~??duced by?the~llR, which woagld pr~?ohibit all open~sea wh~ligYg by ~e p~.p~aese. A.ll a~.~ners of the ESC v?Yced theY~? support of a p~?ogsosal, except the '~3S which refused t~ alter its posi~ti?n. Ramer than force ~ ~~ ~~t?, t~~ ~~ s~~gest~~ ~cti~n ~~ st- po~+aed. Cnese prospects in a~3agachuria doss of R~agachuri~. bef?re tine enai of 197 reffiafns ~. real possi~anlity, e?e~. thougtn ~e recegat large-scale ~hfnese Couaaist ?ffegasive appears to have r its coaarse. During that ?ffegasi?e, a potegntial of Chixnese Cogn- forces din terms of rraanp?we~?, ~augaitiogas, food, troop. morale, agacl popular supports is belie?ed to ha?e igacreased t?a large degree. at tae e~ense of tine Natiogaalist potega~al. Any serge-scale g~aovegnegat of Nation- alist r~pl~.ceg~aegats egad supplies fr?~ Nasrth Chime. is c?gasidered ~agalikely. ~?he ~3ati.?gaalist p?sitioga in IJorth ~han~, is also precarious, a?s a result ?f persis$egat ~?an~unist ~.ttacks on key raiA lines and ports egad apparegat sho~?tages of rationalist ggapower ~.d epnaegat. There is, thus fa.~r, gao sig~a tinat a Central Co?eregat has axay deginite igatentiogas of rectifyigng the fugadaa~negatal weal~aesses of tpae Natiog~list military seed civil sti?a- ti?n iga R~agach~iria m- an ~~igais~ation which has played igato Coffina~ist hands by its bugagli gnilitarg~ tactics and by its e`p~f-gger9N attempts to donaigaate and exploit the gaati~e lVtanc~a~riaga populatioga. o~- TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET- ~'EST'ERY~ ~EIS~ERE Iraa~~.e~t ~?1ttt~al ~~p,~fs A~~'~nt~~ Pei?n'~ ttr.,~tq ~~~dt~ttt~i cg~?gt.~ts ~~a~,~~?~~idp~t ~y~s,,~, ~gent~6a ~yp~,,T~~~~ ~~~~ .~~A4~.~? ~~~~.' .@""~'~'-~$~.F~.'~t~ ?A XL~~~~~~6~Y'i~9~ ~~FL~~~~,.AISG~..d ~p2r~IL~?~~ &.72ii&Y1, ~~~ ~t~d~. ~w~~? ~.~ ~.1~~ ~~~?~~.~~ P~estd~~t ?t tie ~~~~nt~~ ~d~ ~rs~~?~t~~ I~.~tatsat~ j. ~~~ SEC?~~ ~ ~e~~l It~~~ in ~, ~f~r, ltc d~~a~~ aD~t A~~~a~t~ ~~~~?~~~; ~lt~~. ~lir~.~a~a, w~~ ~?~' any A~?g~~- t~~~,s~~ad~~li~~{~-- ~~~~~~ ~?r~ t~, Il~~~~td~~t ~~~?~ ~~s~i~ -- tae ffia~~~d ~r.~~:~a tPa~~ ~?~~~a~~a~t ~~~~t~~t ?~ b~a~I~~~s aa~d t~~,.d~, is u~d~~. ~.t~k a~~t ?~;~ tz~ ~I~~~~~ t~~d~tt~~~lly ~~s~d t? ~ g~~~~aat , yy^~ve~e~gt~yg bit ~.1~? ~p,~gt~p,~ ~?@~~.-.~~d .Qa~P~g~tta~aa~i~t'pp,~~~~~.~~a-~~ts wife t~~y~ %'~~??~ ~i~~.~41~.4?~. dl ~~ 6 ~1`i?~.fL~~'~'[4~~~ y?, f i~r'+i 'J6L~~.~'~'~a~9?~~d Y.Y4E~ ~~ ~? ffi~`5~.~-~4 ~~6 ~~ ~?~~t b~ ~ ~e~~nt ~~~~~.~. gat t.~~ ~,t~?a~~~i~t aaer ~'e~.~~~? ~.~ G~f cif P?~tc~ ~ ~~~~?~ ~.t~?e~, ~.c~~u~~ ir~~d~ ?~ ~at~a~~a~~~at affid ~s~t. ~~?~ld t~~ d.~~~.te ~~a~t~n~e ~aa tt~ A~ ~~~~t f?a?~, tt wtAl ~?rce ~~~?n tc~ c~~s~ tr~~e~~ tie ~~~A~e~d~~n~ ~a~~f?~a~ end thus ~~~~igat~.te ~ ~~~~t ~?Atti~~.l c~?isf~ ~~~ ~i~ ~~~~~st~t~ t? a p~~~fld~~~. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET SPE~~.~.~ .~.R'~~~LES TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ? TOP SECRET E~ OE ~ Sg~IT.~?I`~O~' ~dTJIA '~lae di~~isi.oaa oft India, in acco~?dance with the ~ia;eroyDs plea of 3 Ju~ae 19~fi, ~~.s thin fa~? pro~:eede~ without undue disturbance, but sevez?al factors of insa~ediate dan~e~? to the pea~;e of India sill e~ist? In. essence, the new pZaa~ ps~avides anerely that tl~nose portions of India, whici~ a~~e ?nn~vil.lin~ to participate ire the ~~as~itueut .~sseaxably , created unde~? the easZier plan (of ~~ ~iay 1.946, array establish a Con~tia tuent A ssea~ably of the~~s own with sinniZas pow~ess, and heaace mat aaa~aority will ~ transfesra~d by the to tWO poZiticaZ eantitfes~~the iXngon of media (or FZiaadustaYn) anal l~akistan~0satlne~? t.~~aaa to a sin~Re waican? 14dore?vea?, in order that the ytsansfes fDf iR?we~' may tame place Within the newt few ffionths, rather thaw ia+i mane 194 as pse~ously intended, the new playa provides that Risadust~ a~ad ~i~tan shall ilraitiali,y have dominion status, but it eanphasi~es the right of either to decla~?e itself ~, free and independent natie~ at any time. 'l'lae procednare wh+~reby the ~~asio~.s areas away hfldicate their pre fereance fo~? inclusion in ~iindnstan or ~?a3~~.stan is set fo~?th in detail in the ? place. ~arsuaant to the plan, the I.~e~islative ~sseanblies in the ~anjab and in den ha?e determined that these t~so provinces shale be divided into Moslean and Rindu aa?eas. thus, apero~innately three-fifths of the lajab, coa~sistiua~ of the anoa?thern and westesan portions of the psovicace, will bece~nae . part of Pa3cistan, with the remainder included in Flindustan; similarly, apm pro~ianately two thirds of Pen~a.Z, ,coaasi.stiIIa~ of all beat the southwestera~a poA?tion of the provfnce, will become past of Pa~.staaa. ~ilhii.e tine division is eeluitable on the basis of the pricaciple of self deterr~afnati.on, the econoanic weaess of the 1~akistan area has been increased $hrou~h loss of th$ g~?eat post of Calcutta and the a~aore featile section of the jab. ~nfoateZy, too, it has been. iffipossible to partiti~u the ~ainjab i8a a a~a~e~? which does not leave in each new do~rniaaion about half of the foul anilliocn Sildas sesidin~ in the larovince. the Sil~hs ha?epeacefully accepted the decision, because the ease most sacred to theaa~ re.hZS iaa I~industan and because they realise that no othe~? axa~ner of partition is feasible. they hive, h?Wevex?, coa~naenced a~itatioan fo~? aan autononcaous Sikh state (concnprisin~ s~nost of the eastern jabs within Rfndtastan and hav+~ proposed a tr~nsfen? of Sikhs froffi those asses to be izaclaaded in Pakis?? tan. WtA.ile it is not expected that a~it.ation for ~ autonomous state will bec?nae acs ia~aaraediate source of trouble, this dissatisfacti~ away later cause seriox,~s difficulties ~vlaich can invol?e both Pakistan aa~d Rindustan. TOP SECRET. _~ m Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET Of the re~a~.nh~~ areas ?rially ~y ~e ~~sleffi ~~~.~ f?~? ~~, Sid jai ~aluck~ista~ ~~~~, ~.ticip~.te~, fcrma~y ~~eclared their p~?efference f?~ ~a~ist ~~~~, with a except~~ ?f ~ pre~~~i~ ~a~xtly ?~~.~~ ~is~rict ?f Sylh~t, a~~ace~at t~ eastern ~~~, was all?tted. tQe ~~u ~$, acc~ar~a~ce w^~th ~h~ wgshes ~f the past .~~rity ~f its i~iia~.~ait.ts. ~ refere~~~~ is t? ~~ ta~e~ i~ Syli~et t? permit its i~c~rp~ra9 tip ia~t? ~a+,~ista~ off, as is es~pecte~, .th~.t a~c~~ais with the wishes ~f its i~ha~ita~ts< .~ refere~~;~~ will also ~~ meld i~ the ?r~h west Fr~tier ~~?ce. , ~'~~ latter ~~~~~ still c~~stit~Qes ?~.~ ~f ~e ~~~ spas ~~ia.. Y~espite a ~~~ ?sle~ g~g~g~tis~., it has ~.t present ~. ~~~ress party ~~ve~?~~ent. R~wever, level?pe~ts ~e~aera$ly tkre~?ut i~adia aa~t~ strc~~ p~??pa~a~a.~i~i~~ ~~- ~~~~,~ sy~pathi~ers have s~ficie~tly i~- crease~ ~~.le ~ se~ati~e~t within the ~~?ce ~? ~~ it apparent t~.t the ~~~~~~~ ?f the preset ~sse~~ly ~~ leer ~?ep~ese~t the feeli~~s ~f ~~~ ~a~~rity ~f the p~p~i.ati~. that~ti~e pr~9C?~~ress ele~e~t ~ be successful ~ the referees, ~h ~h~~l ~haffar ~ha~ ~rs~~~~ci~.l Chess ~~.rty ~.~~.~~~) h~.s ?~ced that his pay wi~i b?y- ? ~~~ it ~ will ff~ht f~:~ ~ crea~ti ?f a~ i~~epe~~e~t " ~flt~~a a lack ~f c~nsiste~cy ~? :~ lx~~ia, Ca~~hi aid Nehru-mwhe~ f~ all ~her:? i~astces ha?~ ~e~~a,~ce~ any te~~eucy t?ward the ~~,li~ati?a~ ~f Y~di~.--support this sta~.~. Y~? cl~ubt t? a cster~ati ~f Ca~dhi aid ~eh~a, .~f~hasai st~~ has als? st~?~;ly iu~icat support ~f tha; free Patha~is- ta~ ~~ve~e~t. ~t has ~x~.i~t~,i~e~ ~t ~ ~~~ t~ ~ ~~?itish. ~?rei~ Mice t~aat the iahita~ts ?f a Pr?~~ ~,~~ ~,f~h~s, that tk~e ~~~vi~ce was ~- nexe~ by the British up~~ the "dise~~er~eutgn Ag~ha~~sta~ f?ll?wi~~ the British-~.g~&~~a wars, ~ that the p~pulati. ~f a Pr?vi~ce which has had ply ~.rtificial cectfl~ with Nadia pr?~aer shld be ail?we~ t? chi?se i~~epe~aden~e ?~ rem t? ?Bthe he~?l~ ~f ~f~ha~ist~.Ae ~s the Cress str~~~ky desflres that lz~dia will eve~tu~.lly he re~ united, Cass supP?rt f?~? the cre~.tia~ ?f a free Fath~ist will aa~ded- ly di~ish ~ vied ?f Af~ha~ist~s attide aid the p~ssi~ly receptive at- titude ?f the A~,tlia~s aid meter trihes~e~ toward i~c~rp?rati~ i~t? ~f~taa~is- t~. ~'hi~.e c~~sidera~le ~lshed ~~.y ~r~cur i~ the wear fore within the Pr?vi~ce, t-ae d3sc~~?ders will A~??~ly ~e l?ca3, aid acihere~ce ?f the pr?ei~ce t? F9al~ist~ appears certai~+. At s?e later time, seri~~ns tremble may be expect fr?ffi the ~?rth west Pr~~atier tribesffiera. TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ., Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 TOP SECRET ~~thQ~ ~se~3e~ers a~,~ ~I?e~ heci~e als~a ~~ctesi ~ ~~~~ ~e~g dema~c~.#f~ of tie ~ev~ ~s~ar~a~ies ~ ~~tR gt~ ~e~ ~s~~ea~me~ats be cane eperati~A. ~`~aese s?r~e~s, hr~~e~er, aye YiP~e~ise e~eci tm rexrta iewaYi~e~. ~"~~ ~?.3.'~''~t~~~ ~~ ~~~~ $3~ ~~~ ~~`~.3~~:ea~ St~t~S k:~s tYt1~t~'S t~'Le reFradm'i~g se~ree ex immeate a~cY series ~is~e~a~te~. `the egress Pa~rtq ht~Y~ that, at f~~e termi~at~~ a~ ~r~tish ~a~?ame'~~t?~y, eaeh state mast ~cai:~ ~e ?f tae tie d?am~#es the ~esbem ~a~~ep ~~e ether ha~~, II3aY?t~fTiS that eaCt~ state i~ i'ree t? ~e as it Yi~es., e~e~a to re~~~i~~ i~aa~e~e~ade~t if it sa~ chimes. V~hiYe i~~icatieras a~?e th~.t m+a~ ?f the s~~te~ ~iY~ ~at~ k~hadust2~ er sta~a, certain St thew ~netahlq Y3tq~eraha~ ~~~ `~rava~eere~ have refcase~ a:o ~?i~ eigher cio~i~. dram ~. Ye~aYistf c ~ei~at e~ ~e~, the cYaim s~f a~q state to ~eeYare it~ seY~ it~cie~e~?de~et ~e~a~ .ear e~tirelq ~.~sti?iahYe. ~`he ~4a~itRSh, ~a~aile eie- pYc~ri~g`s a~cl ~'ra~a.~ccare`s at~i~~e, m~.f~taiai a~Yq tthat ne suite z~ay remain ~$thi~ the E ~sgire e~ce~ by ee~et~e~'atiexa ~Yth efther v~ the e ~?mi~aie~s. ~'r~~m the British ~t a~ ~~e~, a mattes is ~e ~rhieh mist Sae res?Y~eei by ~e stateda gc~~er~~zeaxts ~?~ khe ~e~Ye cf lbs.. ~ lf:Yq~.eraha~, ~`racex~e, ~~ rather stages atic~YZt ~~ amt attit~~e, the ~essfksRity cad st~'$.Ye $I'a the ix~~cieei~ate ~t6Ts$'e a~aa~l '4-.~i~~s. a YQ a TOP SECRET Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 -~; Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~ s S1NQ~-SOi7IET REDATI4NS Faced with a critical ar~ilitary situation in Manchuria"and North China and with an iFnpending_ political-~eonomiC crisis of unprecedented severity, China's Central Government last anonth dropped all pretense of treating the Chinese Commr~nist problem as a purely domestic issue and took a fi~?m stand against Soviet .encroachments upon Chinese sovereignty. Z~ey Chinese governanental and military officials have recently charged that Soviet aid to Chinese Ce~mrnunists and Cuter Mongolian forces and Soviet tactics regarding Dairen had brought on China's present plight, and pictured China as the scene of an international crisis that rrtfght lead to a third World War. Cn 25 June, the Chinese Government handed to the USSR its strongest note to date on the Dairen-Fort Arthur issue, reasserting its right to dis- patch troops to that area. {It is believ7ed that these effiphatic Chinese actions, which appear to have been taken in a. spirit of defeatism approaching despera- tion, were motivated mainly by the desire to shock the US Government and people into eactending ennergency financial aid military assistance.3 There are Hove certain indications that the USSR, reacting to the new Chinese attitude a.nd prabal~~y taking due no4e of recent US Government an- nouncements that surplus~am3nunition would be sold to China and that spe- cific Chinese projects wouici receive Exirn~ank cp~sideration, may have decided to stiffen its own attitude toward China; o~ ~ at Yeas~~ to convey that innpression to China and the US a.s part of a "war of nerves'?: (l)_ During the first session of the UN Econo~.ic Commission f?r Asia a~iri she ~'ar East (in Shanghai, ati-~5 june}, the.Soviet delegation vacs noticeably coal toward the Chinese, consistently. sided with the Indian delegation on controversial subjects, and attempted to block eldction of a Chinese as ECAFE chairma~i; ~(2} During the period I4-2? june, .local Soviet officials i$ Shanghai reportedly expressed the opinion that: {a} the recent recall of Soviet Am-~ bassador Petrov from Nanking to I~ioscow was part of "Moscow's routine, cf changing officials when changing policy, " {b} the new Soviet "policy" would be to counteract that of China and the US, with a possible`~howdown" to indicate Soviet determination Hat to relinquish its position va China, Korea, and japan, and (c) they themselves would subsequently be recalled as a re- sult of the change in Soviet attitude. The. officials further asserted that the chairman of the Soviet Residents Association in Shanghai was to be attached to a newly fornried special commission in Khabarovsk (north of Vladivos#ok -I1- Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ?~ ~.ia SET f ~ ~i~i~~ s s~;~ ?a~~I~ ~~~~ d~~ ~~?~~.~ ~~ ~~~~~ ~iCi~~~as ~a?e~. Cap.. 9 a ~~~~s ~~e~ mad ~~~~ ~~.~~i~~s: c ~~~~~ ~~-~~ i~~iii~~ ~ Chi ~~~~~~, p~~~i?~i~I ~~S ~~@.4 ?~ NAYtic~?~~~~;~ .~;~,Yi(~~~.~~5~ O ea Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8