WEEKLY SUMMARY #112

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002300020001-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 27, 2016
• Document Release Date: May 22, 2013
• Sequence Number: 1
• Publication Date: July 21, 1950
• Content Type: REPORT

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1 This publication contains current intelligence exclusively
and therefore has not been coordinated with the intelli-
gence organizations of the departments of State, Army,
Navy, and Air Force.
2. This copy may be either retained, or destroyed by burning
in accordance with applicable security regulations, or
returned to the Central Intelligence Agency.
WARNING
This document contains information affecting the na-
tional defense of the United States within the meaning
of the Espionage Act, 50 U.S.C., 31 and 32, as amended.
Its transmission or the revelation of its contents in any
manner to an unauthorized person is prohibited by law.
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HIGHLIGHTS,,
CONTENTS
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Page
? . .............. . 1
THE KOREAN SITUATION
UN Appeal for Troops, . . . . . ........... 2
Peace Efforts 3
Korean Review . . . 4
CURRENT COMMUNIST TACTICS
Front Organizations 6
France 6
Italy.... 6 6 0 6 ..... 0 ? 0 0 ? 0 0 ? 0 0 0 7
Iceland. . . . . . . 7
Greece. . . ..... . . ...... . ..... 8
Japan 9
Indochina 0 ? 0 ...... 0 6 0 9
LOCAL DEVELOPMENTS
Views on Schuman Plan 11
New Iranian Cabinet 11
East German Conference 12
French Indochina Policy 13
ARTICLE
? Communist Potential in Latin America 14
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L.
HIGHLIGHTS
World reaction to the events in Korea changed little
during the past week as both East and West continued their
separate efforts to put an end to the fighting and to gain ad-
herents from those still reluctant to take sides in the cold
war. The United Nations, while obtaining few results as
yet in persuading member nations to commit military forces
to the Korean war (see page 2), figured prominently in various
maneuvers for reaching a compromise settlement in Korea.
Admission of Communist China to the UN appeared to be the
key issue. The USSR made it clear that admission of the
Peiping regime was prerequisite to a Korean settlement;
India's mediation efforts were based on the belief that only
L, the return of the USSR to the UN would prevent World War III
(see page 3); and the British still favor admitting the Chinese
Communists to the UN, although not as a condition for a settle-
ment in Korea (see page 3).
Meanwhile, Communist Party activity throughout the
world indicated no preparation for early aggressive action
fl (see page 6). In fact, it would appear that local Communist
parties have been instructed to avoid any actions which would
arouse Western fears that the Korean incident will be emu-
lated in other areas.
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THE KOREAN SITUATION
UN Appeal UN efforts to obtain combat forces from the
nations which replied favorably to the 27 June
Security Council resolution on Korea have thus far had few
concrete results. The UN appeal has served primarily to
emphasize the international character of the fighting in Korea
and the vital need for having such a force in readiness at all
times. Meanwhile, the French have offered a naval vessel;
Nicaragua has offered 10,000 ground troops; and Pakistan is
giving serious consideration to contributing a brigade of
O seasoned troops. The introduction of Asiatic troops to fight
with the US and South Korea would have a strong and favorable
psychological impact throughout the Near and Far East by
undermining the Soviet charges of US imperialism. New
Zealand is discussing the advisability of committing a bat-
talion, and Australia, without any official indication of its
intentions, has delayed departure from Japan of occupation
forces which include one infantry battalion. The only other
reactions so far giving promise of favorable responses have
come from the Western Union and Latin American countries.
In New York, the Dutch delegate to the UN has inquired as to
what type and quantities of ground forces the UN wants. Mean-
while, individual volunteer offers made to US diplomats in Den-
mark, the Union of South Africa, Turkey, Italy, Lebanon, Ireland,
Peru, Brazil, and Costa Rica have currently given the UN
Secretariat some basis for studying formation of a UN legion.
Activation of a purely UN force would have great psychological
and propaganda value in stressing active UN participation in
? combatting North Korean aggression. However, the equipping
and coordinating of such an international force would raise com-
plex and .d ifficult problems.
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Peace Efforts As the UN continues its efforts to bring the
fighting in Korea to a speedy end, the role of
the UN itself figured prominently in all discussions of possible
compromise solutions of the Korean situation, principally in
connection with the seating of Communist China on the Security
Council. Recent Soviet diplomatic and propaganda moves, though
not in any sense conclusive and representing maximum Soviet
demands, suggest that the USSR may later attempt a diplomatic
settlement in Korea in the hope of localizing the Korean conflict
and slowing US military preparations and mobilization efforts.
India's Role In the various maneuvers being attempted to
prevent the Korean issue from lighting the fuse
to World War HI, India is playing a key role. Despite India's be-
lated acceptance of the 27 June UN resolution calling for sanctions
in Korea, India is still committed to a policy of neutrality between
the US and the USSR. Prime Minister Nehru was careful to dis-
associate the Indian Government from the US stand on Formosa
and Indochina, and implied that military assistance to the UN
would be beyond India's capacity. India is apparently convinced
that the dispute can be contained and a reversion to the status quo
snte. obtained H means for discussing the problem are made pos-
sible through the return of the USSR to the Security Council. US
diplomats have accordingly been urged by representatives of the
Indian Government to recommend that the US facilitate the seating
of Communist China as necessary to the return of the USSR and
hence essential to the discussions advocated by India.
British Role The position of the UK is also vital with respect to
current maneuvers aimed at settling or localizing
the Korean affair. The British still are fundamentally convinced
that the Peiping regime should be admitted to the United Nations.
This conviction may arise in part from the British hope of currying
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favor with the Chinese Communists, but its real basis is
the belief that any government having de facto control of a
country should be recognized as speaking for that country.
Although the British will not accept a Soviet proposal for
seating the Chinese Communists as prerequisite to negotiating
a settlement in Korea, they will be entirely willing to seat the
Chinese Communists if and when the question arises later. Re-
garding Formosa, the British have also made it plain that a
major objective of their Far Eastern policy is to avoid a direct
clash with the Chinese Communists. They do not believe that
retention of Taiwan by Chiang Kai-shek is a justifiable Western
policy objective, and they have publicly disassociated themselves
from the new US policy of forcibly neutralizing Formosa. The
British not only fear Communist retaliation in Hong Kong, but
they are wary of taking any position not in accordance with the
UN resolution on Korea, lest they lose the support of India and
the nations of Southeast; Asia.
KOREA
Northern Morale Despite the invader's continued aggressive-
ness, some weakening d. Northern morale
can be anticipated during the coming week. Four of the six
Northern Korean divisions currently in action have been in the
line for more then three weeks of continuous advance, and inter-
rogations of enemy prisoners as long ago as 4 July indicated that
the troops were tired and on short rations. Since that time, re-
grouping and consolidation periods have seldom exceeded 24 hours
before the units again moved into action. Casualties thus far are
estimated at 10 percent of the Northern forces ccimmitted and
there are no indications that trained replacements are being;
moved to the front. Despite the anticipated reduction in Northern
combat effectiveness, however, the enemy continues to have the
capability of employing superior numbers on all fronts and can
be expected to continue its advance toward Taegu and Pusan.
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Southern Developments The fourth week of the Korean con-
flict saw the removal of the skeleton
government of the Southern Republic from Taejon south to Taegu.
Although the civil population of the territory still in Republican
hands was reported to be remaining calm, morale will be depressed
by the fall of the deserted provisional capital. Such reduced morale
can be expected to give further impetus to guerrilla activity. In
the first two weeks of the invasion, surprisingly little action by
Northern guerrillas behind Southern lines was reported. Continued
successes by Northern forces, however, have apparently inspired
an increase in guerrilla efforts, particularly in the areas of previous
guerrilla concentrations (the mountains west of Pohang and the
Kyongsang-Namdo and Cholla -Namdo districts).
If the guerrillas gain new adherents as the Northern invaders
advance, they will present a serious threat to the security of com-
munications and rear installations in areas held by Republican and
US forces. To meet this threat and to bolster the Southern police,
the 50,000 Republican police will be issued added US arms (parti-
cularly grenades and machine-guns) when the supply position makes
this action possible. Present police equipment consists mainly of
US carbines and Japanese rifles, and the police often engage guerrilla
bands with superior armament.
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CURRENT COMMUNIST TACTICS
r4,
h. The first month of hostilities in Korea has produced
few startling changes in Communist Party tactics throughout
the world. The peace propaganda theme has continued with
frenzied efforts to demonstrate that the US, not the USSR, was
the aggressor in Korea and there has been no evidence of pre-
: parations for early violent action. In fact, the current behavior
of Communist parties suggests that they have been instructed
to avoid any actions which would arouse Western fears that the
Korean incident will be emulated in other areas.
Front Organizations The major International Communist
front organizations, though shrilly
echoing Soviet charges of US intervention in Korea and hammer-
: ing at the "peace" theme, are displaying considerable caution.
For example, the World Peace Partisans Committee, in answer-
ing an appeal from North Korea, merely emphasized the danger
of permitting the conflict to spread and called for a US withdrawal.
Concurrently, the World Federation of Trade Unions and the
World Federation of Democratic Youth have done little more than
h. make routine appeals for solidarity in support of the North Koreans.
? In general, the front organizations are playing down the actual
hostilities, treating the Korean situation in the context of the peace
campaign, and promoting "non-intervention" by other nations. This
non-intervention theme will probably assume greater importance in
h. Soviet attempts to counteract the UN's plea for military contributions
from UN members.
French Communists Although the French Communists have re-
: portedly been instructed for the time being
to follow the world-wide Communist peace propaganda line, the
French Party is apparently making preparations for widespread
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direct action in the fall, including riots and sabotage attempts.
Communist paramilitary forces are reportedly alerted now,
and special mobile commando squads are currently being
trained for inciting riots and neutralizing local French adminis-
trative agencies. French military and security forces can prob-
ably cope with any serious Communist disturbances. Fear of
government retaliation, however, diminishes the possibility of
direct Communist action at this time.
Italian Communists In Italy, the Communist Party is pursu-
ing a moderate course regarding Korea,
in an apparent attempt to avoid restrictive measures against
the Party by the government and to recover from the set-back
given the "peace campaign" by the North Korean attack. Togli-
atti, for example, while charging the US with imperialist aggres-
sion, refrained from claiming that South Korea had attacked North
Korea. He asserted that Korea should nbt lead to World War III,
because the USSR, as "a peaceful nation," will not go to war unless
attacked. The Communists may hope to benefit from any peace pro-
posals the USSR might make while US and UN military fortunes are
at a low ebb. On the one hand, acceptance by the US of such offers
would lower US military prestige and might cause an Italian
reaction against the NATO, while rejection by the US. might bene-
fit the "peace" campaign and still further reduce Italian will to
resist in the event of war.
Icelandic Developments The Communist Party of Iceland can
at virtually any time seize control
of the island by force, and the presence of a number of Soviet
fishing vessels, including at least one mother ship, well ahead
of the regular herring season is causing considerable concern
among government officials. Not more than 500 well organized
and armed men could seize control of Iceland; the Communist
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Party has the men and the organization and could easily be
provided with the necessary arms, possibly from the Soviet
fishing fleet now near Iceland. The Communists would have
considerable difficulty retaining control of the island, however,
because they would receive virtually no popular support. More-
over, the Communists would be unable to resist even a small
contingent of US or NATO forces. There would seem little point,
therefore, in a Communist coup at this time unless Soviet forces
were ready to provide military support to the local Communists.
Greek Communists Current Communist-guerrilla propaganda
hints of possible new aggression against
Greece, while not likely to be followed up at this time, will prob-
ably succeed in aggravating the country's present problems. The
guerrillas are at present incapable of mounting a strong sustained
attack except as part of a Soviet-Satellite military offensive re-
quiring more intense preparations than have as yet been apparent.
Nevertheless, the guerrilla propaganda machine's recent allusion
to "Korean parallels" on the northern frontiers of Greece, its
exhortations to sabotage against alleged war preparations of the
"Athens-Belgrade axis," and its attempts to encourage the develop-
ment of a strong fifth column in Greece are having their psychological
effects. The results are likely to include not only a sterner official
attitude toward the Communists themselves but also: (1) further
postponement of any rapprochement with Tito; (2) at least a slow-
down of the military retrenchment on which increased Greek budgetary
stability was postulated; and (3) an intensification of the present
Cabinet's political difficulties to the point where the substitution of
a "strong man" government, probably under Marshal Papagos, may
become unavoidable.
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Japanese Communists The continued absence of reports
on the whereabouts of nine Japanese
Communist leaders purged by SCAP on 6 June lends some
credence to an unconfirmed report that in early June the
Japanese Communists were directed to establish a provisional
government of the "Japanese People's Republic" in Pyongyang,
then the capital city of the North Korean regime. Although other
similarly unconfirmed reports of later date have placed the
missing men in hiding in Japan, the USSR could obtain several
advantages by establishing such a regime at this time. It would
provide international Communism with a facade of legalism to
support future actions against the present Japanese Government.
It would provide a focus for the usual barrage of propaganda in
support of a "people's government" and could serve as a channel
for international Communist directives to the Party in Japan. It
could even be supported by a Japanese "Liberation Army," com-
posed of those Japanese reportedly in Chinese Communist ranks.
In terms of immediate action, such a "provisional government"
could attempt to take advantage of the rapid draining of US
garrison strength in Japan, particularly since two to four months
will required to recruit, screen, equip, and train the recently-
authorized additional 75,000 Japanese police. Despite these uses
to which a provisional government could be put, there is no firm
evidence to indicate an early increase in Soviet pressure on
Japan. The Japanese Communists, as well as the leftists in the
Korean community in Japan, appear to be exercising considerable
restraint, and, while making bellicose propaganda attacks, have
refrained from sabotage or strike action, and thus have not pro-
vided any definitive indications of Soviet-Communist intentions.
Ho's Plans The Ho Chi Minh regime in Vietnam is showing an
increasing tendency to consider itself as the "libera-
tor" of all Indochina rather than as the representative of the nation-
alist state of Vietnam. One manifestation of this tendency has been
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an increase in preparations for guerrilla activity in the
hinterland kingdoms of Laos and Cambodia. Although
L. prospects for an early Indochina-wide rebel offensive
against the French are poor, any substantial increase in
guerrilla activity in Laos and Cambodia could have serious
repercussions. Communication between northern Laos and
other French-held areas is weak, and French troops there
must be supported by air. The area adjoins China and its
population is susceptible to Viet Minh propaganda. The
hinterland, therefore, could be exploited either as a strong-
1/4 , hold for indefinite guerrilla warfare or as a center for a
future decisive advance against major French positions in
Vietnam.
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LOCAL DEVELOPMENTS
EUROPE
Schuman Plan The British and French steel industries are
now both opposed to the Schuman Plan. Top
British steel officials at present support the British Government's
position against participation in the plan, though they would favor
a plan relating to distribution and the limiting of "cut-throat"
competition. The British officials are hopeful that the plan as
visualized by the French will not emerge, but if it does, they will
probably seek some working agreement with respect to markets.
Leaders of the French steel syndicate, fearing German and
Belgian competition, have been convinced by the first weeks of
negotiation on the plan that it cannot be twisted to permit the
French cartel to dominate the projected organization, and have
threatened to bring pressure to bear on the French Assembly to
defeat the plan. Such action is not likely, however, to prevent
French ratification of a treaty, if a treaty is agreed to by the
six nations currently discussing the Schuman Plan.
IRAN
New Cabinet Prime Minister Razmara has at least partially
allayed any uncertainty about his ability to
carry out his responsibilities by the vigor and realism he has
displayed thus far in dealing with both economic and political
problems. The new premier has already raised formally with
US Ambassador Grady the question of securing Export-Import
Bank credits for projects in such fields as well drilling and
irrigation, road building, rehabilitation of industry, and im-
provement in agricultural production and processing. Most
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how
IRAN
Importantly, he has recognized the necessity for meeting the
Bank's project-specification standards--hitherto the greatest
obstacle to the granting of Iran's frequent requests for out-
side aid--by requesting that Ambassador Grady's economic
advisory group work with Iranian representatives in preparing
the plans and applications for specific projects. On the political
scene, meanwhile, Razmara is working resolutely toward weld-
ing a unified government, and he has not hesitated to dismiss highly
placed and capable officials in order to obtain this end. The astute
A.H. Ebtehaj is being forced to resign as head of the National Bank
because of his unwillingness to accept direction from the dominant
group of financial liberals now in the Cabinet, and the unpopular
head of the Seven Year Plan Organization has also been dropped,
allegedly for tolerating corruption, despite his reputation for
competency. Although Iran can ill afford the loss of well-trained
managers, Razmara has apparently found replacements who will
provide him a government free of internal dissension without
notable loss of efficiency.
GERMANY
Communist Congress The central theme of the Communist-
dominated Socialist Unity Party (SED)
Congress which opened in Berlin on 20 July will probably be the
"popular struggle for peace against Western aggression." The
issue of German unity will be discussed in this context and US
proposals for an all-German Government will probably be re-
jected by a counter-proposal which will, in effect, state that the
road to German unity is through the German Democratic Republic
and the 15 October 1950 elections. The presence of high-ranking
representatives from at least 16 Commtinin parties, althdugh in
itself not unusual, indicates that Purely internal affairs will be sub-
ordinated to international matters. The presence of these foreign
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GERMANY
delegates, however, has raised speculation concerning a
Cominform meeting and the admission of East Germany to
that body. There is no firm evidence to substantiate either
speculation. As a matter of fact, whether or not this gather-
ing is a formal Cominform meeting is fairly academic. A
meeting of high-level Communist leaders at this time of crisis
is quite logical and any Communist problems could be privately
discussed at the present Congress without the formality of con,-
vening the Cominform. Moreover, the admission of East Ger-
many to the Cominform would not foreshadow any new or
startling development in Soviet tactics toward Germany.
INDOCHINA
French Policy The French are now attempting to divert US
economic aid to Indochina to support the
French military effort, an action which would allay French
apprehension over possible extensive direct contact between
the Vietnamese people and US technicians. French authorities
in Indochina have proposed a review of the objectives of the
US economic aid program and specifically recommended that
envisioned economic aid be allocated primarily for such mili-
tarily useful projects as the development of roads, airfields, and
other transportation facilities, and counterpart funds for financing
the creation of the Vietnamese Army. The French proposal mini-
*miXes the importance of the health program, which at present has
top priority, arguing that health and relief aid can only reach the
areas which need it least. This French argument conflicts with
their claims that the Red River Delta, a needy and accessible
area, has been pacified. The French proposal, if adopted, would
confirm the already strong Vietnamese impression that'US econo-
mic aid is designed primarily to serve the French military effort.
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COMMUNIST POTENTIAL IN LATIN AMERICA
Although there has been no noticeable increase in Latin
American Communist strength or activity since the attack on
Korea, some national Communist parties and?possibly a greater
danger--special sabotage agents possess a substantial potential
for effective action in the event that the USSR expands its tactics
of direct aggression. Communist sabotage activities from the
Republic of Panama could threaten Panama Canal installations;
strategic installations in Venezuelan petroleum areas are vulner-
able to Communist action; and the output of critical and strategic
materials in other areas could also be affected.
Sabotage directed against installations in the Panama Canal
zone from the Republic of Panama is a distinct possibility; the
Panamanian police are not capable of discovering and suppressing
Communists in charge of sabotage, espionage, and other covert
activities, nor of preventing alien Communists from filtering into
Panama at this time. Although measures have been taken recently
against overt Communist activities, Communists involved in covert
activities probably do not work through the usual Communist organiza-
tions and are largely unknown to the police. Moreover, the police
themselves are inadequately trained, badly organized, and deeply
involved in local politics.
The Venezuelan oil installations are particularly vulnerable
?
to damage by skilled saboteurs, and a resolutely-directed sabotage
campaign could severely hamper oil production. Precautions taken
? by the oil companies with respect to fire-fighting equipment, guard
systems, and maintenance of stand-by equipment for the repair of
major installatims are in many cases insufficient, and although
? the Venezuelan Government is now reportedly employing additional
?
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protective measures at strategic installations in petroleum
areas and has alerted the Army against sabotage, there is
no assurance that such measures are yet adequate or that the
armed forces are capable of entirely preventing sabotage.
In other areas producing critical and strategic materials,
the Communists are capable both of sabotage and work stoppages,
particularly in the production of manganese in Brazil, copper
and iodine in Chile, molasses and sugar in Cuba, lead and mercury
in Mexico, and tin and antimony in Bolivia. Work stoppages could
be conducted largely through Communist-influenced and dominated
labor unions, and could involve strikes, slow-downs, and inter-
ference with transportation; sabotage is also possible in these
countries. However, in either case no major industry would be
tied up for more than short periods. Moreover, in time of war
or national emergency, the governments of these countries would
probably limit the duration of work stoppages, if not prevent
them entirely.
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DISTRIBUTION
1 The President
2,64 Secretary of State
3,4,78 Secretary of Defense
5 Secretary of the Army
6 Secretary of the Navy
7 Secretary of the Air Force
8,70 Chairman, National Security Resources Board
9,71 Executive Secretary, National Security Council
? . . ... Assistant Secretary of the Navy for Air
11,69 Chief of Staff, US Army
12,13,14 Chief of Naval Operations
?
15,16,17 Chief of Staff, US Air Force
18 ...... . Assistant Chief of Staff, G-3, Operations
19 Deputy Chief of Staff (Operations)US Air Force
?
20 Deputy Chief of Naval Operations (Operations)
21. . ... Director of Plans and Operations, US Air Force
22,23,24. . . . Special Assistant, Intelligence, Department of State
25,26,27,28,29,
30,31,32,33,34. Assistant Chief of Staff, G-2, Intelligence
?
L
35,36,37,38,39, . 40,41,42,43,44. Director of Navy Intelligence
45,46,47,48,49,72,
73,74,75 . Director of Intelligence, Headquarters, USAF
50 Director of Intelligence, Atomic Energy Comm.
51 Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
52,53,54,55,56,79,
80,81,82,83,84,85,
or Chief, Acquisition & Distribution Div., OCD, State
57 Director, Federal Bureau of Investigation
58 Secretary, joint Chiefs of Staff
59 Chief, Policy Planning Staff, Department of State
60 Secretary of State (Att: Policy Reports Staff)
61 Deputy Director for Intelligence, The Joint Staff
62,63 Secretary, Joint Intelligence Group, joint Staff
?
65 US Air Force Representative on Joint Strategic
Survey Committee
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Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002300020001-3