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December 23, 2016
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May 22, 2013
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January 27, 1950
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y WEEKLY SUMMARY 0 0 0 o Declassified and Approved For Release 2013/05/22 CIA-RDP78-01617AO02300270001-6 Number 8? 27 JAN1950( Documctt Igo. FO Gi,.rG in Gina (] 1r w^. N H Auth: DD\ 1W2. Ole Date: 3t 4fl6 BY. CENTRAL INTELLIGENCE AGENCY r /1 yy~ ?a /~eG.rt 4 Declassified and Approved For Release 2013/05/22 CIA-RDP78-01617AO02300270001-6 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. Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 n Page HIGHLIGHTS ......................... 1 WESTERN EUROPE .................. 2 EASTERN EUROPE .................. 5 NEAR EAST-AFRICA................. 9 FAR EAST ........ ......... ...... 10 ARTICLE French Agricultural Prospects ............... 14 SECRET Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 Developments in Europe during the week indicated a marked stiffening in the Soviet attitude toward the Western Powers, Soviet interference with German truck and barge traffic to and from Berlin suggests a renewal of Soviet efforts to undermine the position of the Western Powers there (see page 2); Soviet actions in Austria reveal that the USSR is still reluctant to conclude an Austria treaty (see page 4); and apparent Soviet willingness to permit a break in US-Bulgarian diplomatic relations foreshadows an intensification of Soviet efforts to seal off the Satellites from contact with the West (see page 8). In the Far East, scattered fighting in Indonesia may reach serious proportions unless the Indonesian Army can find a satisfactory formula for absorbing troops of the former Royal Netherlands Indies Army, many of whom are deserting and joining dissident groups such as those under ex-Dutch army officer Westerling (see page 13). Meanwhile, the Chinese Communists have made it clear that they will give all possible support short of armed invasion to the resistance forces of Ho Chi Minh in Indochina (see page 10). Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 n. Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 SECRET Berlin "Blockade" Current Soviet interference with German.truck and barge traffic, to and from Berlin is unlikely to lead to a reimposition of the Berlin blockade, but may well foreshadow further harassing tactics as part of an intensified Soviet effort to undermine the position of the Western Powers in Berlin. .The latest series of Soviet interferences began before US seizure of the Reichsbahn administration building' in .West Berlin and consequently appear to be a previously planned move and thus not wholly in retaliation for the .Reichsbahn affair. The present. Soviet actions, which have not been aimed at blocking the Western Povmrs' access to Berlin, are probably intended primarily to obstruct economic rehabilitation of West Berlin and to bring about "conditions of pauperism" deemed neces- sary to gain the support of labor in Western Berlin for a Communist-dominated national front. Cabinet Maneuvers The new Italian Cabinet now being formed by Premier. De Gasperi, following an unexpectedly protracted period of negotiation and inter-party bickering, will continue the basic policies of the preceding coalition. However, the absence of the conservative Liberal Party and the con- tinued participation of- the reform-minded Republicans-and So- cialists in the new Cabinet will place full responsibility. on the majority Christian Democrats for any delays in fulfilling Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 ft their campaign pledges for agrarian and fiscal reform. Meanwhile, the Christian Democrats, who have been sharply divided over the timing and extent of socio- economic reform measures, have apparently made little progress toward reaching agreement during the past few weeks of negotiations. In any event, the, formation of a new Cabinet by Premier De Gasperi will have little effect in speeding parliamentary action on the government's legislative proposals. Police Tactics The continuing tendency of the Italian police to concentrate, upon violent suppression of public disorders while neglecting correct- ive measures designed to promote general respect for law ahti order may bring discredit and embarrassment to the Government, The indiscriminate and often ill- timed use of force by the police may be explained, in part, by the fact that most of the police were trained in the Fascist army and police system. Moreover, prior to the elections of 1948, which indicated that the strength of the Communists was waning, the police were necessarily concerned primarily with developing their strength and tactics to meet the threat of Communist revolutionary action. The police; who are now capable of controlling any violent efforts that might be launched by the Communists, seem to be missing the opportunity to develop a program for prompting respect and general support for law and order. Police Chief D'Antoni, formerly police chief in the largest center of Communist strength when force was the essential weapon against the Communists, continues to concentrate on the use of com- bative action to the neglect of administration, organization, and political intelligence. Interior Minister Scelba tries to direct all phases of police activity personally, instead of n Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 SECRET dealing through responsible subordinates, and seems to be- lieve that only physical force can inspire respect from extremist elements. Continued arbitraryor irresponsible conduct by the police might intimidate extremist. groups but would eventually lose the police and the Government the respect and cooperation of most Italians. Treaty Prospects Coincident with a stiffer Soviet atti- tude in Berlin, the USSR appears un- willing to conclude an Austrian treaty. The USSR may estimate that: (1) the draft treaty will not create conditions likely to compromise Austrian independence and lead to Soviet domination; (2) Tito and anti-Soviet resistance in general would be encouraged by Soviet agreement to end the occupation of Austria; and (3) the over-all Soviet power position has improved and future advantages may result from continued occupation of eastern Austria. Meanwhile, the USSR, in addition to continuing to obtain economic gains from its occupation, may step up its efforts to negotiate a bilateral agreement with the Austrian Government which would increase Soviet influence over the Austrian economy. The USSR may also attempt to undermine the authority of .the Austrian Government in the Soviet Zone. In addition, the USSR may take advantage of any weakening of general Western strength to exert pressure on the vulnerable Western position in Vienna. The USSR, however, is not likely in the near future to take steps which would lead to partitioning of the country or to incur the risk of war by imposing a blockade of Vienna. SECRET Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 r Increased Espionage Yugoslav-Cominform relations are currently being acerbated by an increase in espionage activities by both protagonists. The thoroughness of the break between Yugoslavia and its erst- while partners is forcing both parties to rely on covert methods to keep informed of developments inimical to their respective interests. This intensified espionage activity is reflected, in; (1) the repent Yugoslav trial of -ten Albanian spies; (2) a Bulgarian public appeal for more "information" con- cerning Yugoslavia; (3) the pending trial of 64 Yugoslav spies in Bulgaria; and (4) reported orders to Cominform agents in Trieste to concentrate on espionage rather than subversion and sabotage within Yugoslavia, Although the Cominform espionage campaign will have little effect in bringing Tito to terms, it will serve to keep the conflict alive and to main- tain pressure on Tito while at the same time distracting public attention from questions of Communist ideology and. nationalist deviation. Propaganda exchanges on these ques - tions have in the past often. embarrassed the USSR by em- . phasizing the threat to nationalist aspirations implicit in the Moscow -dominated Communist movement, Copper Imports The difficulty of denying strategic materials to the Soviet Satellites is illustrated by the ease with which Czechoslovakia obtained necessary copper supplies after losing one of its primary sources when Tito split with the Kremlin. During 1949, Western countries are Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 estimated to have provided 34,000 of the 50,000 tons of copper needed to maintain. Czechoslovak industrial activity. Principal suppliers were Chile and Mexico; other suppliers included Belgium, the Netherlands, and the UK, with some shipments coming from "Occupied Japan." Economic Progress Although economic progress in Finland since World War 11 has been rapid and production has equaled or surpassed prewar levels, Finland's economy for the present remains vulnerable to Soviet pressure. Copper production has increased 200 percent over 1938, while other none-ferrous metals, such as lead, zinc ores, and pyrites, are produced, in. sufficient quantities to permit exports. Rail- road transport has exceeded 1938 traffic levels by 15 percent, and water traffic is equal to that of the prewar period. Labor force and productivity have attained prewar standards and are on the increase. Electric power production continues to rise and is currently meeting requirements. Finland, however, still depends upon the Soviet orbit for vital grain and fuel, and a large share of Finland's total foreign trade is with the USSR and its Satellites. The USSR, therefore, is'still in a position to exert economic pressure on Finland and could cause con- siderable damage to Finland's foreign trade by underselling timber producth in the world market. Although Finland is now in a better position to withstand such pressure, orienta- tion of Finland's trade toward the West is unlikely in the near future and in the long run will depend to some extent upon Finland's success in obtaining liberal credits and trade terms from Western nations. M Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 n. Election Preliminaries Preparations for the Greek national elections appear to be taking a normal course under the administration of the new Theotokis "service" government. Despite initial fear that the interim regime might prove a vehicle for palace inter= vention and the entry of Marshal Papagos into politics, Theotokis is apparently carrying out his pledge of a free electoral atmosphere. Restrictions on civil liberties imposed during the guerrilla campaign have been relaxed; the armed forces, police, and gendarmerie have been given firm orders against interference with the campaigning; and efforts are being made to forestall disruptive incidents by Communist guerrillas or armed rightists. Meanwhile, electoral prospects of the two major parties have lessened, notably as a result of the emergence of: (1) an extreme rightist bloc which may attract followers away from the plurality Populists; and (2) a new left-of-center group under General Plastiras which may lure away leftist elements of the Liberal Party following. The Liberals and Populists also stand to lose by the postponement of the voting from 19 February to 5 March, which gives their numerous less -established rivals additional time to organize. Thus the post-election Parliament will probably be characterized by numerous small combinations that will wield important balance -of -power influence and may be in a position to hamstring effective parliamentary government. US Relations Bulgaria's demand for the withdrawal of the US Minister, coupled with evidence that US missions in some of the other Satellites may also soon be linked with deviation and espionage trials, reflects a marked intensification of Soviet efforts to seal off the Satellites from Western contact, As the Satellites become less valuable as agents for obtaining strategic materials from the West, the USSR may increasingly feel that main- tenance of US-Satellite diplomatic relations is less important than overcoming the serious obstacle to complete consolida- tion of Soviet control of the Satellites represented by re- maining US influence, Moreover, in the case of Bulgaria, Rumania, and Hungary, the USSR may be ready to expel US personnel in order to prepare further anti-Tito operations. Although anti-US moves will undoubtedly increase in Poland and Czechoslovakia, the USSR. may move more slowly toward forcing a break in relations between the US and these Satellites, which not only are members of the UN but still have more exploitable trade and diplomatic channels with the West than do the other Satellites, ri Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 Ital.-Ethiopian Relations Recent progress toward Italian- Ethiopian agreement on East African issues may lead to a general rapprochement between the two countries. With the object of inducing a relaxation of Ethiopian opposition to Italian trusteeship over Somaliland, the Italians are considering an approach to Ethiopia expressing Italy's desire to reach a general agreement recognizing Ethiopia's racial and economic interests in Eritrea and limiting Italy's concern to the protection of the legitimate. rights and interests of Italian residents of the territory. Such a step would presumably imply withdrawal of Italian support for Eritrean independence, thus paving the way for award of Eastern Eritrea in some manner to Ethiopia by the next General Assembly; Mean- while, tension over Somaliland is being reduced by British accep- tance of Ethiopia's request for withdrawal from the disputed Ogaden area and by Italian acceptance of the frontier proposed by Ethiopia as a provisional administrative boundary. Although political considerations will prevent a public agreement at this time, an atmosphere has been created which is conducive to the development of better Italo-Ethiopian relations and which can lead to an East African settlement favorable to US interests, 11 4.: Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002300270001-6 Chinese Support Recent Chinese Communist recognition of Ho Chi Minh's regime as the de jure government of Vietnam, in addition to confirming the inten- tion of the Chinese Communists to make good their promise .of "moral and material aid wherever possible" to pro-Com- munist movements throughout Southeast Asia, indicates that the Peiping regime regards Indochina as the most immediately exploitable of the Southeast Asian countries and hence a priority target. An invasion of Indochina by Chinese Commu- nist armies, however, is unlikely at. this time. The "anti- colonial revolution" there is proceeding precisely in accord with orthodox formulae: a Communist-dominated united front, controlling a "national liberation" army, is driving out Western "imperialists" and has the strong psychological support of. Chinese Communist armies just across the border. .Moreover., the Chinese Communists are now in a position to provide Ho. Chi Minh's forces with sufficient assistance in .the form of material equipment, organizers, and technicians .to cancel the present material advantage enjoyed by the French. JAPAN Socialist Split The recent withdrawal of rightwing elements from the Japanese Socialist Party, caused by increasing dissatisfaction over leftwing control of important Party posts and the leftwing policy of supporting "working- class" interests, has weakened Japan's potential "Third Force" and strengthened Conservative control over the government. Under leftist leadership, the Socialist Party has made progress toward regaining trade union support, promoting anti'-Communist SECRET n Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 JrMlimr 1 JAPAN trade union "Democratization Leagues," and winning majority control of the General Confederation of Labor, .The split, however, will further postpone steps toward .the merger of non-Communist trade unions. Aid Withdrawal Reaction to the defeat of the Korean Aid Bill in the US House'of Representa- tives has been restrained and general comment reflects the belief that the US will still, provide economic support for the Republic of Korea. President Rhee's initial .response to the news was one of shock, followed by ex- pressions=of disbelief. Although National Assembly members showed dismay and demanded explanations, Pr me Minister Lee assured them that commodities now en route or waiting shipment would continue to arrive for some time; he pointed out. that the 1951 appropriation was not jeopardized. Two results of the defeat of the Korean Aid Bill may be: (1) some reduction of public support for the Rhee Government because of increased uncertainty regarding Korea's role in long-range US defense plans; and (2) a more determined effort by the Government to improve administration of the Korean. economy. Pro-US Policy A new Australian foreign policy, emphasiz- ing closer cooperation with the US and constituting a bid for economic leadership in Southeast Asia, appears to be one of the more pronounced features of the newly-installed Liberal-Country Party Government, Minister Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 AUSTRALIA for External Affairs Percy Spender is a personal advocate .of stronger ties between Australia and the US. He has indicated interest in the early conclusion of suspended US- Australian . treaty negotiations, believes that security in the Pacific. depends upon the US, and has promised Austral- ian support for any US move to obtain Pacific bases. Spender has emphasized Australia's willingness to assist in strengthening the economy of Southeast Asia as a means of combating Communism and hopes the US will support Asian self-help measures. Spender was in. large measure responsible for the action taken at the recent Colombo Con- ference recommending Commonwealth consideration of financial assistance for productive purposes in Southeast Asia and a general study of proposals for the economic development of the region. Control Problems Recent violent attacks in the Chinese Communist press on the performance of Communist cadres in east and central China reflect the acute shortage of trained political workers capable of gaining grass-root support for the Peiping regime in the newly won territories. Now that victory has been won, the problem facing the Communists in gaining rural support in these areas, in comparison with North China, is further complicated by the absence of former incentives to win.over the peasantry in the struggle to overthrow the Nationalist regime. Moreover, the Communists have been shifting their emphasis from agrarian reform to urban industrial- ization. The present trend indicates that the Communists' revolutionary peasant program may bog down seriously throughout China and that the recently "liberated" rural areas will remain unstable for some time to come. r, Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 0 C C INDONESIA Violence Increases Fighting between the Indonesian Federal Army and various rebel groups may reach serious proportions throughout Indo- nesia unless a satisfactory formula is found for demobiliz- ing the Royal Netherlands Indies Army (KNIL), which.was comprised largely of Indonesians of Ambonese origin. The Westerling affair in West Java is symptomatic of the violence which has occurred in widely separated areas following the failure of all attempts to absorb approximately 58,000 KNIL troops into the new Federal Army. The war-developed ani- mosity between KNIL and Republican troops, coupled with failure to grant KNIL officers any top positions in the Federal Army, has slowed the amalgamation. process and opened the way for widespread desertions. Many deserters have joined Westerling's forces and the danger exists that Westerling may be able to coordinate his efforts with other dissident groups.. Such a development would require the utmost cooperation between Dutch and Indonesians in order to avert a major. crisis. Pi Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002300270001-6 n Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002300270001-6 Over-all expansion of French agricultural production, a major goal of the European recovery program for Western Europe, is not being realized, and total output in 1950 is not likely to be appreciably larger than in 1949 (production for 1949 is estimated to be approximately 97 percent of the 1934-38 average). Under initial European recovery program plans, the French were expected in 1952-53 to have increased production sufficiently to become virtually self-sufficient in regard to food and also to have become the largest exporters of foodstuffs in Western Europe, thus reducing Western Europe's dollar imports. The anticipated failure of France to expand over-all agricultural production during 1950 will probably be caused largely by lack of decisive action by the government and particularly by its failure to provide adequate incentives for farmers who are discouraged by the present disparity be- tween farm and industrial prices. The government has allocated only one-eighth (about $140 million) of its total investment budget for agricultural purposes and has failed to apply any of this fund directly toward lowering production costs or raising output. Moreover, the probable decline in the government's influence over industrial prices during 1950 may permit an increase in the present disparity be- tween farm and industrial prices. Although the use of tractors, high-yielding seed, and other modern techniques will increase _i11 ing 1950, achievement of French agricultural' production goals will continue to be hampered because: (1) total tillable land will probably remain more than 10 percent below the 1934-38 averagei (2) the use of fertilizers will fall far short of planned goals; and (3) farmers will be discouraged from hiring additional laborers, r Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002300270001-6 Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 SECRET 11 1......... The President 2,64, . , . . . . Secretary of State . 3,4... ... 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 10......... 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......... Director of Plans and Operations,Gen.Staff,US Army 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, Director of Intelligence, General Staff, US Army 35,36,37,38,39, 40,41,42,43,44,, Director of Naval, Intelligence 45,46,47,48,49,72, 73,74,75. Director of Intelligence, Headquarters, USAF 50...........Director of Intelligence, Atomic Energy Commission 51... , .... , Executive Secretary, Military Liaison Committee, Atomic Energy Commission 52,53,54,55,56. 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 (Attention: Policy Reports Staff) 61..... , . . Deputy Director for Intelligence, The Joint Staff 62,63....... Secretary, Joint Intelligence Group, Joint Staff 65......... US Air Force Representative of Joint Strategic Survey Committee 68......... Administrator, Economic Cooperation Administration. Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6 Docume'?t iJo. 140 C::::6Gs in Class. $$~.I?.D n Q Class. C....'.~D 4 CPT 77 Auth: DDA /1,763 O Date 1I 1S Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002300270001-6 Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002300270001-6 U. S. GOVERNMENT PRINTING OFFICE 2671-S-1848 Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617AO02300270001-6