WEEKLY INTELLIGENCE SUMMARY NO. 1

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A005000010002-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 27, 2016
• Document Release Date: April 24, 2013
• Sequence Number: 2
• Publication Date: March 1, 1948
• Content Type: REPORT

~OCUmant TTr n.n ~ _ __ _ __
avv ~xaricE in Class. ^ ..~~...-. ~crtKtNC'~ ~Ej;J~ ~?
~i DECLASSIFIED TER f R
Class. CHAiiGED TO ~'fP'`c+~? of ~i~nor~ ~ ac,.i E-Li? ~~;". "' `J/~~j ~~
.rA.-_por~.~anr :.roue
DDA Ate~o, 4 Apr 77
Auth: DDA R.C. 77/1763
1. T}te Italian Forei T Offico ress rvloaso, r~forriag to the
Argentine-Italian Air gree::ent, ti:nod i0 .'cbruary 1840, indieatcd the
aLree::ent was sinilar in tervrr_1 to pre^rioua nCrve:ents concluded by the
Italian Governscnt, and that it ccnLained furl Fifth Frecdc: ri~l,ta.
!LITALIA (4d;. British-ocrned) .:ay bo the Itnlinn air lino dc.a~atod to
oporata tho arroed routes to Ar~entiaa. .
2. The Finuiah Govv..vlent.is re arin application for .zesbetahip
in the Intornation vietion Or}an sa on (ICAO). In appropriation
to eovor Finlandta aubaoription to ICi,O t.ea includod in tho 1948 budEot.
3. Pan Anorican AinYnys has raciuced its stock o:.norship in Peertair
do Brasil by 40,000 shares. Holdings by Brazilian natia^e~aln nro thcroby
increased to G2: of the Compaty's stock, thus conplyin;; ..ith lo'el rostric-
tione on foroien oontrol of Brazilian Corporations. V
Tho standing air polioy of tho US via-e-vis the antollite atatoa hna
bcon one of containatont, i.e., restriction of the entry oC aatellita air
carriers into ;7estern Fu rope. This policy hoc bcon diatate~d by US convia-
dion that az{y reciprocal exchanEe of avistion rights :a eh a sat3sllite stato
could net conatituto true racipracity. i?:o reeooning behind this conviction
ie ea follonae satv111to sirlinns are subnts.tially oontrolled erd operated
Dy thu USSR, and thorefore, any eachr Ke of e.oiation ri~hL:: s.ith n Soviet-
~+ominatcd satullito atata could rct be ;;enuinvly rvci?roc:a unlo~u ouch
cxohango granted the non-sateliito negotiator tho ri,ltt to oxtlnd ito air-
line operations into chassis proper. lionevor, the llSSR h:m oonaist,:ntly
Dlockod ouch nocve:s.
Tho proposed US-HunGarisn intoritn air agrac^,ant (dircuaaiora for :.-hich
score initiated by the Hun:arirm Govern::ent} reprasentc a basic chanfo in tho
above US policy and n reconsideration of the fnotcrs upon t:hich that I.olioy
xaa based.
"Fns teraa of the propowod,intvrir air a~ru.:~cnt, (to L.~ Hffoctl:e fvr
un in.ivfinieo poriod) cunt^in ': si.atc:cnt :rioh axyrei.:oe t:..c r?ttscl r ire
of t15 .r,:3 Burn~ary to pro-^otr? "r?. ~cefY~l r-;rl~tior. rol.ationc. :.on- fr:hr,.ly
~stlons on raci~recal and non-di?tcri.in tort basis .".
r
;j.., ~; ;REFERENCE CE~~ ~~~~~
Declassified and Approved For Release 2013/04/24 :CIA-RDP78-01617A005000010002-3
 Declassified and Approved For Release 2013/04/24: CIA-RDP78-01617A005000010002-3
- ~ -
In addition, the terms would aomrsit the US "to Crept individual
olearancea to Hungarian oivil aircraft for ooanoroial fli,pta with right to
transit US occupation cones Austria and Germany xith or rithout atop and to
plox up and discharge nt a point within such oocupation cones inter-
=ational traffic sprouts to, fry and beyond US oocupation sonde Austria
and Germar{y."
Hungary eould agroe to grant individual clearances for aimilaz US
!'lights "Qith riot to transit Hungarian territory with or erithout atop and
to pick up and discharge at Budapest international trafPio onrouto to, from
sad beyond Ifungary."
The agreement ~rould inolude the ri,^,ht to station nationals of one
party in the territory of the other party for the purpose of servicing air-
. line operations. Plzrthormore, it would be agreed that Hungary shall ptro-
vide or permit t`ae US to install, is HuuFary, suc}~ additional navigational
Aida and car.?unioationa Cacilitiea ea m~ be required for IIS carriers to
meet their prescribed atand:u?ds of safe operation.
Tho reversal oP IIS air policy which could permit the oonoluaion of
the aboro agreement is emlaincd by tlio over-riding desire of the IIS to
support the European Rooovory Plan by opening the trade channels betcreen
8astorn and roetorn F.hrope.
The pan US air policy mould result in various advantages to the US.
IIS carriers would acquire traffic rights in and transit rights through
IIungary chile the Hungarian carrier (l:astovlot) would obtain oimilar rights
only in US occupation fence Austria and Germany, but not in the US proper.
Znareased opportunities to observe conditions behind the "Iron Curtain"
would also be gained.
On the other hand, the following disadvantagoa xauld result from the
proposed US-Hungarian air agreement. Once Hungary is authorised to overfly
US tones Austria nod Geraary, US control over the expenaion of Hungarian
airline operations into '6estorn Europe will have boon lost. 8evereal of US
gnlicy resulting in an interim air agreement with Hungary will create a
preoedent which might be exploited by other satellites desiring transit
ri~hta through the IIS occupation sense.
The IISSR is in a position tc nullify an;~ IIS-Iiungarion sir egreenent,
~5y refusing porziasion to US aircraft for ovolflights of the Soviet Zone,
Austria. Ao clear Soviet aommit~ront in this respect hen yet been obtained,
sad the BS will insist that any restrictions reposed by the USSR Brill
entitle the IIS to apply similar limitations on Hungarian flights.
lho Buaanian nationhi airiino (TARS) has announoed its intention to
inaugurate Plights to Budapest sad Belgrade on 1 L+arah. Also rnnounaed uas
its intended continuance of bi-monthly Plights to Paris, approxiaately siz
flights a month to l:ilan, and regular Prague flights.
Declassified and Approved For Release 2013/04/24: CIA-RDP78-01617A005000010002-3
 C nrT I~~N~J I'~^
Declassified and Approved For Release 2013/04/24: CIA-RDP78-01617A005000010002-3
- S -
2te Frenoh Lo;atian in Bucharest states that !h-anco !-as no intcation
oP permitting such nch^dulcd flights or of entering into an air agrHOment
::ith i~mania at this time. France dons not aonaider the privile~o of Ply-
iyeg to Bucharest as genuine reciprncity. Since TARS is Soviet-controlled,
Franco would insist that nothing short oi' ri~l:ts into the U.iSB could
establish reciprocity. The Frunch Forei~ Ofi'ice in Paris concurs r:ith the
above poiiay statement of sts Esaharest Lefation, sued disclaims ~cnor:ledge
sf a7y existing Franoh-ltumnninn air agreement which would permit TARS to
operate its announced flits to P?rie.
US Control of Asuncion Airfield Thrcatanad
Control of the airfield at Asuncion probably will ravcrt to Paraguay
now that Pan A:erican Airweya has been prohibited from oporutiny, its shuttle
service Buenos Aires-Asuncion: In connection with the construction of this
fj.e11, carried out under the US Airport Uovalopment Procrnm in 1U4l, Patt
iicerican Airways (PAA) received a 20-year' roncesaion, under which it has, in
effect, control lad the airfield. The agreement pro:'ided, however, that
unless YAA maintained regular air oareections to Asuncion, control of the
;~.eld would revert to Parn~riay.
Originally, Ynn Anerican hsd flovm to Duonoe-Girea vin Rio de Janeiro
Find Asuncion. Brazilian refusal to allow Pan Anerican to fly the segsent
between Rio and Asuncion, however, suhseruently 1lmited Pen American to the
direct route t'rom Rio to Buenos Aires, f th n shuttle service back to
6srmcion, The reoont Argentine prohibition against Chia shuttle service
is not a serious blew to Yan A.?:ariaan ireoauae trai'Yic terminating or origi-
nating nt Asuncion is insufficient for profitable operations.
The 1fS-Paravayan bilateral :;ir ngree:nent is of little value in
retaining US rights at Asuncion unless the dosigrratod US carrier has aor-
mission to rvarfly Argentirn, Brazil or Bolivia. (T~,o b'S has no rir sgree-
r~ent :.ith Dolivia and both Brazil and Arger:tina nro attempting to reserve
ro~,ional air trrxffio to their local airlines.) Ho US air carrier other
than PAA is in a position to fly the Asuncion roui:a without delay. Braniff
Airways, though certificated by the US to fly to YarnpueV, ar:d avrar~iec] a
z:oute vin H,~; zest cua9t of Sc,uth Arorioa, has made no progress in institu=
tinQ this service and is therefore unable to -n're use of the US rights which
PAA is ralinqulahing, It seams unlikely that all those diffieultiec can be
resolved. Revaraion of Asuncion Pield to Yaraguny, end the elimination of
u.^r-opern`,.ad air cor,neations to Asuncion appear, accordingly, inevitable.
Reversion of Asuncion field to Pnrn;~uayan control -:111 weaken
~aragucy~s position. The airport facilities at Asunolon will undoubtedly
deteriorate rapidly, since Paraguay has neither the coney nor the personnel
to naintain the field. This :v ill ag>ravnto 1'arnguey's lack of ccr:~amiaa~-
,Li.ona v:ith the outer xorld: all river anal rail communiontions.arn con-
trolled by Brazilian and Argentine interests. '
[?Ft
Declassified and Approved For Release 2013/04/24: CIA-RDP78-01617A005000010002-3
 Declassified and Approved For Release 2013/04/24 :CIA-RDP78-01617A005000010002-3
4 -
SARI%ACS TAi;P75PORT,tTIOy
1. Serious political diffiaultiaa in the exoc~~tion of tho European
Recorery Program with respoct to allocation of railae~y rolling stock may
be forashado;ced in continued fniluro of tiestern I:}iropoen nations to reach
agreement ?rJith Aizonia cn a f2'ei~;ht-car exeiinr.=;e plea whioH ?,vauld relicvo
the critical transport situation in Gcrr?any. This may neaessitato diversion
of nea A.serican-rode rolling stock to the Alliod zones nc tha ox;~onse of
otFier recipient countries. Sach action v:ould prore gxtre.aely unpopular with
Lt:e people of i~eatern Europe, .^.nd ;night acu:w sore go:rornarrts internal
difficulties. The present stalemate may throw the iroblaa before the Tri-
partite moeY;ings now in progress in London.
2. Indications tt;nt oztoraivP rpfnbrication and oloot.rio welding
have become a part of nocr Soviet vessel construction to .niquea is con-
tained in press coca-.ant on the aonstruction of all vessels in the USSR.
S. Corman aontral sill in- nao moved torxrci a roturn to local con-
trol un3er a recent agroe-neat of Britist: and U mi itary governmonts a low-
ing such stripping to be nanr+ood by a Gorman sani-govcrn,acatal ar;ency,
Haupveraraltung E1xer Seeverkohr. H4S1;G gill also have nui.hority to establish
operating contacts outsido of Gerrany, undor close US-l; f: control.
~RFY
Declassified and Approved For Release 2013/04/24 :CIA-RDP78-01617A005000010002-3