CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000600080001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 30
• Document Creation Date: December 20, 2016
• Document Release Date: January 7, 2008
• Sequence Number: 1
• Publication Date: September 8, 1955
• Content Type: SUMMARY

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CONFIDENTIAL
.ft
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
State Department review
completed
COPY NO. 20
OCI N O-7427/55
8 September 1955
DOCUMENT NO. O
NO CHANO IN CLASS. D
1 DECLAMF1Er-
CLASS. C14ANGED Td.
JNEXT a vwBATE: ' py
AUTH: NA 1fl-2
wiw .
CENTRAL INTELLIGENCE- AGENCY
III OFFICE OF CURRENT INTELLIGENCE
State Dept. review
completed
CONFIDENTIAL
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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I 1_1 La
8 September 1955
OF IMMEDIATE INTEREST
ADENAUER' S VISIT TO MOSCOW . . . . . . . . . . . . . . . . Page 1
West Germans expect that Chancellor Adenauer's visit to
Moscow will have few tangible results other than the release
of some Germans who have been held in soviet custody since
World War II.
THE CYPRUS ISSUE . . . . . . . . . . . . . . . . . . . . . Page 1
Failure of the London conference to find agreement on
the Cyprus question has resulted in severe tension between
Greece and Turkey. The violent outbreaks in Turkey may be
followed by new riots in Cyprus. Defense co-operation in
the eastern Mediterranean will suffer.
FRENCH NORTH AFRICA . . . . . . . . . . . . . . . . . . . Page 3
French and Moroccan representatives have gone to Mada-
gascar to consult deposed sultan Mohamed Ben Youssef, whose
agreement is deemed essential to easing the crisis in Morocco.
In both Morocco and Algeria, new outbreaks of violence are 25X1
probable.
EGYPTIAN-ISRAELI SITUATION . . . . . . . . . . . . . . . . Page 3
The Egyptian-Israeli situation has improved since each
country agreed on 4 September to UN Truce Supervisor Burns'
cease-fire proposal. Both countries are continuing to build
up border reinforcements on a reduced scale. but are trying
to control border troops and to avoid any incident.
American-Chinese Talks: The Chinese Communist announcement
on entemer t at 12 Americans in China are or soon
will be free to leave apparently was aimed at persuading
the United States to drop its insistence on a deadline
for the release of other detained Americans.
. . . . . . . . . . Page 1 25X1
CONFIDENTIAL
Too
THE WEEK IN BRIEF
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8 September 1955
USSR Noncommittal on President's Blueprint Proposal: Soviet
delegate o o ev h as refrained from substantive comment
on President Eisenhower's "blueprint" proposal, but has
continued to remind the UN subcommittee on disarmament
and the press that the USSR considers the pro osal
"important" and is studying it carefully. Page 1 25X1
Admission of New Members to the UN: Increased lobbying by
Asian applicants tor mem ership as well as the
cautiously optimistic statements of UN members has
increased speculation that the five-year deadlock on
admitting new members to the UN may be broken this 25X1
fall. Page 2
Yugoslav-Soviet Relations: The Yugoslav-Soviet agreements
announced this wee are the most concrete steps yet
taken in the improvement of relations between Belgrade
and Moscow. The agreements call for Soviet credits and
a marked expansion in trade, Soviet delivery of nuclear
equipment, and the opening of a joint Belgrade-Moscow
direct air service . Page 3 25X1
Military Significance of Satellite Troop Reductions: The
announcements by five of e European a elutes that
they intend to reduce their armed forces are designed
to give substance to the USSR's disarmament campaign.
Over-all Communist military capability is not likely
to be materially impaired, although the military
effectiveness of some of the Satellite countries may
Peiping to Grant Sinkiang and Tibet "Autonomy": Peiping has
announced t at is remote nort wes tern province of Sinkiang
will be established as an "autonomous region" this month.
Peiping has also reported that Tibet is being readied for
"autonomy," but Chinese plans there apparently look to a
further period of preparation and consolidation.
. . . . . . Page 5 25X1
Crop Prospects in Communist China: As a result of favorable
weather conditions this pas summer, prospects are that
Peiping will attain its 1955 food production target of
an increase of 6.4 percent over 1954. Communist China's
long-range agricultural prospects, however, continue poor.
There will probably be no significant increase in per
capita food consumption over the next decade.
. . . . . . . Page 6
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Voor SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
Cambodia: Prince Sihanouk's political movement will probably
win Cambodia's parliamentary elections on 11 September,
and parliament can then be expected to pass the prince's
drastic anti-democratic reforms. The consequent
resurgence of royal absolutism may result in long-term
political and social frictions.
Page 7 25X1
Afghan-Pakistani Dispute Settled:. Pakistan and Afghanistan are
reported-to have ettied their ~fivo-m nth,old quarrel on
terms indicating a return to the situation existing
before the 30 March incidents which began the dispute.
The Pushtoonistan issue which is at the base of the
whole quarrel remains unresolved, however, and will
continue to make establishment of permanent friendly
relations between the two countries difficult.
. . . . . . . . . . . . Page 8
The Labor Situation in Chile: Relative calm prevails in
Chile following the suspension on 3 September of strikes
involving some 50,000 government employees and ofa
general strike call for 5 September. Labor unrest
may be expected to continue, however, so long as
inflation remains uncontrolled.
PATTERNS AND PERSPECTIVES
Page 9 25X1
MOSCOW'S EUROPEAN POLICY ON EVE OF ADENAUER VISIT . . . Page 1
The foremost objective of Soviet foreign policy since
Geneva has been to create conditions under which the status
quo in Europe can be stabilized and maintained indefinitely.
The main tactic in Moscow's diplomacy is to convince the
non-Communist world that the threat of Soviet military
aggression has evaporated. This would deprive the Western
alliance of its most powerful unifying and motivating
force and encourage-divergent interests and icies
within the alliance.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
THE SOVIET STAKE IN EAST GERMANY . . . . . . . . . . . . . Page
Since the Communists realize they will probably not be
able to dominate a united Germany, the USSR is likely to
continue to hold on to East Germany. Not only is East Germany
a valuable military and economic asset,, but Soviet spokesmen
have indicated repeatedly that Moscow believes the continued
division of Germany is the surest guarantee against the rise
of a military threat to the Soviet bloc; based on German
manpower, industry and energy.
NENNI SOCIALISTS IMPROVING POSITION IN ITALY ... . . . . . Page 7
The steady gains in power and prestige of Pietro Nenni's
Italian Socialist Party are arousing increasing speculation
among leading Italians as to the possibility of an eventual
genuine split between Nenni and the Communists Communist
leaders, aware that their own.par.ty.is in a period of
relative decline, seem somewhat uneasy over the prospect
that they may lose control of their old Socialist allies.
Leading Christian Democrats are weighing the attractions
of a working alliance with Nenni which would permit a
Christian Democratic government to control parliament with
the support of the Socialists.
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CURRENT INTELLIGENCE WEEKLYE''
8 September 1955
OF IMMEDIATE INTEREST
ADENAUER'S VISIT TO MOSCOW
West Germans expect that
Chancellor Adenauer's visit to
Moscow will have few tangible
results other than the., release
of some German citizens who have
been held in Soviet custody
since World War II. (For a
detailed discussion, see Part
III, p.l.)
West German expectations
about the gains which Adenauer
might attain during the visit
have been modified considerably
since the Geneva. conference.
Soviet firmness in opposing Ger-
man reunification at Geneva has
disillusioned many West Germans
as to the possibility of real
progress on this subject in
the near future. According to
German officials, Chancellor
Adenauer anticipates that the
conference will only define the
issues between the two govern-
ments and consider some princi-
ples for their eventual solu-
tion, with specific agreement
to be reached possibly in the
case of detained German citi-
zens.
Many Bonn politicians be-
lieve that Moscow's willingness
to recognize the Federal Repub-
lic is merely a device to gain
eventual recognition of the
East German government by non-
Soviet bloc countries--a devel-
opment which would formalize
the division of the nation.
To avoid jeopardizing Ger-
man unification, Bonn govern-
ment spokesmen have indicated
that an exchange of represen-
tatives will'not?occur unless
Moscow gives some assurance on
unity, accepts Bonn's policy
of nonrecognition of East.Ger-.
many and the postwar German
boundaries, and consents to
releaseGerman citizens, Should
sufficient progress occur dur-
ing the meeting, Adenauer may
consent. to exchange diplomatic-
representatives immediately.
Most West German observers
expect the Soviet Union to free
many of the estimated 17,000
German prisoners of war. The
chancellor has referred in pub-
lic statements, however, only
to "Germans," a term which
would also apply to an estimated
115,000 civilian internees who,
according to the German Red .
Cross, are still believed to be
in the Soviet Union.
.If Adena.uer returns from
Moscow without a concrete under-
standing with the Soviet Union
on reunification, this would
not be accounted a great personal
failure in West Germany, since 25X1
most West Germans continue to
believe that reunificati-on can-
not be realized now.
Failure of the London
conference to find agreement on
the Cyprus question has resulted
in severe tension between Greece
and Turkey. Co-operation on de-
fense planning in the eastern
Mediterranean will probably suf-
fer, and for the first time
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
violence on Cyprus is likely
to be directed against the Tur-
kish minority as well as the
British colonial government.
The conference of Britain,
Greece and Turkey was "sus
pended" indefinitely on 7 Sep-
tember after British foreign
secretary Macmillan offered
Cyprus limited self-government,
together with the creation of
a tripartite committee to ex-
amine details of the proposed
new constitution for Cyprus.
The Greek reaction to the
proposal was noncommittal, but
Athens will almost certainly re-
ject it because of the omission
of any assurance regarding self-
determination for the island's
predominantly Greek population.
Turkey's immediate reaction
was "very negative." Ankara,
however,, will probably accept
on condition that the self-
government proposal be amended
to provide for equal representa-
tion of the Greek and Turkish
populations of Cyprus.
The rebuff to Greece in
London will probably weaken the
Rally government still further
and increase maneuvering among
the Rally's disparate factions.
King Paul, who has been con-
cerned over the government's
lack of an effective leader
during the prolonged illness of
Prime Minister Papagos, may
appoint a provisional prime
minister and call for new gen-
eral elections.
Acting Foreign Minister
Kanellopoulos told the American
chargd in Athens on 6 September
that Turkish delegate Zorlu's
"intolerable" press statements
in London had deeply wounded
Greek national honor. If Greece
were forced to. accept Turkish
views on Cyprus, Kanellopoulos
said, his government would have
to resign and might be replaced
by one less well disposed to-
ward, the West.
Any Greek government will
be-committed-in advance to
pressing the appeal regarding
Cyprus in the UN General Assem-
bly. Greek anger at the anti-
Greek outbreaks in Istanbul and
Izmir on 6 September will prob-
ably be vented in intensified
preparations for a bitter UN
debate with Britain and Turkey
over the Cyprus issue and in
more open encouragement to the
Cypriot Nationalists.
As a result of the Turkish
riots, which revealed a deep
religious antagonism toward
the Greek Orthodox Church, the
NATO Council was summoned to an
unprecedented meeting on 8 Sep-
tember. Also, the Turkish Grand
National Assembly has been called
into a special session on 12
September.
Like the Greeks since the
beginning of the London con-
ference, the Turks appear willing
to sacrifice the short-lived
friendship between their two
countries over the Cyprus issue.
Both may now give free rein'to
the many divisive issues which
have lately been submerged.
NATO will have increased diffi-
culty co-ordinating Greek and
Turkish contributions to Euro-
pean defense, and the Balkan
alliance will probably atrophy
or be replaced by a, Greek-
Yugoslav entente.
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8 September 19;55
French and Moroccan repre-
sentatives have gone to Mada-
gascar to consult deposed sultan
Mohamed Ben Youssef, whose agree-
ment is deemed essential to a
Settlement of the crisis in
Morocco. In both Morocco and
Algeria, new outbreaks of vio-
lence are probable.
Morocco: Uneasiness pre-
vails in French Morocco with
the approach of the 12 September
deadline set by French premier
Fa.ure for a solution of the
Moroccan issue. Although resi-
dent General Grandval has
departed, there are no firm
indications that Sultan Mohamed
ben Arafa will have abdicated
or been deposed by that date.
There is considerable opposition
in .he French cabinet to the
use of force to oust him.
Several delegations repre-
senting the French and Moroccan
governments and nationalist
groups have flown to Madagascar
for consultations with former
sultan Mohamed ben Youssef, who
may go along with the general
understanding reached between
Faure and Moroccan nationalists.
This understanding is reported
to involve the replacement of
Ben Arafa by a. Council of the
Throne, which would designate
a "representative Moroccan
government" to negotiate the
nature and extent of Moroccan
home rule. The French are also
:EGYPTIAN-ISRAELI SITUATION
The Egyptian-Israeli situ-
ation has improved since each
country agreed on 4 September
to UN Truce Supervisor Burns'
committed to bringing Ben Youssef
to France, presumably in mini-October.
Ben Youssef is reported to
have demanded of the French dele-
gation that France publicly ad-
mit his removal in 1953 was ille-
gal and instruct French settlers
in Morocco to cease counter-
terrorist attacks.
An Istiglal communique on
7 September protested the French
government's "indecision, slow-
ness and intransigence." A
nationalist-directed general
strike called for 12 September
in Casablanca may create addi-
tional difficulties for France.
The French military authorities
.also, are reported to be disturbed
by widespread consultation among
the tribes of central Morocco.
These contacts may presage fur-
ther flare-ups such as occurred
on 20 August at Oued Zem.
Algeria: Failure by the
Frenc. ai u orities to capture
any of the instigators of the
20 August attacks in the Phil-
ippeville-Constantine area con-
tributes to the uneasiness
throughout Algeria., where new
disturbances are considered
imminent. The conservative
French press in Algeria con-
tinues to link the United States
and Egypt with the "insurrec-
tion," and anti-Americanism is
increasing.
cease-fire proposal. While
both countries are continuing
on a reduced scale to build up
border reinforcements, the area
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955,
is likely to remain calm "in
the immediate future."
A resolution sponsored by
the United States, Britain,
and France to consider the "ces-
sation of hostilities and meas-
ures to prevent further inci-
dents in the Gaza. area," was
approved by the UN Security
Council on 8 September.
Egypt and Israel had taken
the attitude that it was inad-
visable for the Security Council
to consider the Gaza problem at
a time of quiet in the area.
Israel fears that Security Coun-
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cii action would result in an
increase rather than a decrease
in UN activities along the bor-
der.
Egyptian-Israeli meetings
of the Mixed Armistice Commis-
sioon were resumed on %9 Septem-
ber. At that time the Egyptian
delegate reportedly said to the
Israeli representative that
"he did not exclude the possi-
bility that the Gaza talks
would be resumed." For the
present, at least, both coun-
tries are trying to control
border troops and avoid precipi-
tating any incident,
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CURRENT INTELLIGENCE WE]3KLY SUlMRY
8 September 1955
NOTES AND COMMENTS
American-Chinese Talks
The Chinese Communist
announcement on 6 September
that 12 Americans in China are
or soon will be free to leave
apparently was aimed at per-
suading the United States to
drop its insistence on a dead-
line for the release of other
detained Americans.
None of the 12 affected
by Wang Ping-nap's announcement
at Geneva had been under arrest,
and most of them were expected
to be among those who, according
to Wang's earlier statements,
would be released as soon as
agreement had been reached on
a repatriation formula. In
jumping the gun, Wang almost
certainly aimed at securing
early American acceptance of the
current draft formula, which
provides for the return of Amer-
icans and Chinese "expeditiously'
but does not state any deadline.
All of the 29 remaining
Americans China admits detaining
are in jail or under house ar-
rest. They are charged with
"crimes," and several are al-
leged to be "spies." Wang has
insisted from the beginning that
Peiping can "never" agree to a
deadline for completing the re-
turn of this group.
Peiping apparently intends
to free a few more Americans
immediately after agreement on
a formula. In the absence of
a deadline, however, it may be
a long time before the last of
the Americans gets out of China.
Contrary to his statements
last week, Wang has again re-
fused to accept an American
wording which would explicitly
restrict the Indian embassy in
Washington to investigating the
cases only of those Chinese who
feel they are being prevented
from returning. It seems likely,
however, that Wang would agree
to the restriction if the United
States were not to insist on
a deadline for repatriation.
The Chinese Communists
want to get on to the second
agenda item of "other practical
matters." This desire might
lead them to implement any repa-
triation agreement more rapidly
and agreeably than the language
itself would compel them to do.
USSR Noncommittal
On President's B ueprint Proposal
Soviet delegate Sobolev
has refrained from substantive
comment on President Eisenhower's
"blueprint" proposal, but has
continued to remind the UN sub-
committee on disarmament and the
press that the USSR considers the
proposal "important" and is
studying it carefully. Sobolev's
tactics apparently are aimed at
avoiding a. commitment on the
American plan.,at least until the
disarmament spotlight shifts
to the meeting of the foreign
ministers in October.
The Soviet delegate has
declined to amplify for Western
delegates the most important
aspects of the USSR's 10 May
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PART II NOTES AND COMMENTS Page 1 of 9
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CURRENT INTELLIGENCE WEEKLY S RY
8 September 1955
proposals, particularly concern-
ing inspection and control.
Sobolev on one occasion insisted
that the subcommittee should
discuss "points of agreement"
rather than points of divergence;
again he suggested a "point-by-
point" discussion of the Soviet
proposal.
On 1 September, Sobolev
attempted to get an affirmative
reply from the subcommittee mem-
bers to a series of questions
that reflected "points of agree-
ment" between the USSR and the
West. He told the press after-
wards that the questions had
been asked "in the hope that
the answers will give us the
opportunity to register agree-
ment on major points," after
which the subcommittee could
proceed "more expeditiously"
to other matters.
According to the French
delegate, Jules Moch, Sobolev
stated on 28 August that the
President's plan was "impracti-
cal" and that the subcommittee
Admission of New Members
To the
Increased lobbying by
Asian applicants for UN member-
ship as well as cautiously op-
timistic statements of UN mem-
bers has increased speculation
that the five-year deadlock on
admitting new members to the UN
may be broken this fall. This
speculation does not contemplate
any change in the status of
Chinese representation in the
TJN, a separate problem which may
also be moving toward a new
phase.
Last year's General Assem-
bly called on the Security Coun-
cil to report to the tenth ses-
sion, opening on 20 September,
must discuss the Soviet pro-
posals. Moch personally doubts
the USSR will even consider
the President's plan unless it
is part of a general disarma-
ment scheme. He said the USSR
would claim, as it has pre-
viously about American proposals
for' disclosure and verification,
that the "blueprint" plan would
constitute an espionage opera-
tion inside the USSR.
In the forthcoming negotia-
tions, Sobolev probably will
continue his efforts to get
Western delegates to admit that
there are areas of agreement
between the USSR and the West
in the Soviet proposal, while
avoiding a commitment by the
USSR on any other plan. Moscow
probably hopes a report reflect-
ing these "points of agreement"
can be presented to the foreign
ministers, suggesting that the
subcommittee has made "progress."
In Moscow's view, this would
reflect a. continuation of "the
Geneva spirit" in the disarma-
ment talks .
on the 21 pending membership
applications. The USSR. has
vetoed the admission of 14
states--Austria, Cambodia, Cey-
lon, Finland, Ireland, Italy,
Japan, Jordan, South Korea., Libya,
Lacrs, Nepal, Portugal, and Viet-
nam. The Western majority in
the Security Council has blocked
the admission of the seven So-
Viet-sponsored candidates--Al-
bania, Bulgaria, Hungary, Mon-.
gol.ia, North Korea, North Viet-
nam, and Rumania.
The Bandung communique
issued at the Asian-African con-
ference in April specifically
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8 September 1945
endorsed UN membership for the
following applicants: Cambodia,
Ceylon, Japan, Jordan, Laos,
Libya, Nepal, and "unified
Vietnam."
According to the American
embassy in Colombo, Prime Mini-
ster Kotelawala of Ceylon re-
ceived a letter from Indian
prime minister Nehru in July
stating that the USSR had ex-
pressed willingness to support
the admission of "all countries
which are qualified." Nehru
added that the USSR had men-
tioned other countries as well
as those which were endorsed at
the Bandung conference. The
Soviet ambassador in Cairo had
informed the Libyan ambassador
that the USSR would support
Libya for UN membership this
fall, according to a. 3 Septem-
ber report from the American.
embassy in Cairo.
The Japanese Foreign Mini-
stry told the American embassy
on 31 August that Australia
is prepared to support Japan's
admission either as part of a
"package" or individually, and
that it has also heard rumors
that Canada would support a
package arrangement.
In the USSR's various
offers of support for individual
countries' admission to the UN,
Soviet representatives have
given no indication that the
USSR has abandoned its insistence
on a. quid pro quo from the West.
At the UN commemorative meeting
in San Francisco, Molotov adhered
to a, typical package plan by
proposing admission of six "peace
treaty states"--Austria, Finland,
Italy, Bulgaria., Hungary, and
Rumania.
The Peruvian chairman of
the UN Committee of Good Offices
on the Admission of New Members
has been promoting, apparently
with some success, a ,compromise
plane, designed to meet both the
West's insistence that each coun-
try must be judged on its own
merits and the USSR's adamant
stand in favor of a. package.
Under this plan, the Security
Council would vote on each
membership application separately,
but the voting would be preceded
by a. "gentlemen's agreement"
among the Big Four on which
countries were to be considered.
When the Security Council
considers the membership ques-
tion, this fall, the increased
pressure of Asian applicants
may lead to some arrangement
whereby the deadlock on
membership might'be broken.
Some Western UN members, in- 25X1
cluding Britain, have argued
that the UN would be better
able to exert moral pressure
on the Satellites if they
were members of the organiza.-
tion.
Yugoslav-Soviet Relations
The Yugoslav-Soviet agree-
ments announced this week are
the most concrete steps yet
taken in the improvement of re-
lations between Belgrade and
Moscow. The agreements call
for Soviet credits and a marked
expansion in trade, Soviet
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
delivery of nuclear equipment,
and the opening of a joint Bel-
grade-Moscow direct air ser-
vice.
The economic agreements
with the USSR go a long way in
the direction of the pre-1948
pattern of Yugoslav trade, when
half was with the East. Soviet-
Yugoslav trade is to more than
double to a total of $70,000,000
annually for the three years
starting next January. This
would give the USSR approximate-
ly 12 percent of Yugoslav trade
as compared to 18 percent in
1947, the last full trading year
before Tito's expulsion from
the Cominform.
Similar increases in Yugo-
slav-Satellite trade,. however,
will probably take longer. The
Satellites cannot as readily
as the USSR more than double
their trade with Yugoslavia,
since their over-all foreign
trade is more limited. For its
part, Belgrade has only a
limited quantity of uncommitted
exports. Hence Yugoslavia's
trade with the East is not
likely to go above 30 percent
of all its foreign trade in
1956.
The Yugoslavs appear well
satisfied with the 10-year, 2-
percent credits they received
from the USSR. Up to a third
of the credit for $54,000,000
can be drawn in each of the
three years starting in 1956
for purchase of certain Soviet
raw materials-, apparently mainly
coking coal and cotton. Another
Military Significance
ate ite Troop Reductions
Five of the East European
Satellites now have announced
plans for reductions in their
armed forces commensurate with
the Soviet plan for a 640,000-
man reduction announced on 13
credit for $30,000,000 in gold
or convertible currency will
greatly increase Yugoslavia's
depleted currency reserves.
Vice President Vukmanovic Tempo
claims these loans will keep
Yugoslavia from being forced to
obtain short-term loans else-
where at high interest rates.
Yugoslavia also obtained
Soviet.credits for planning,
building, and equipping two ar-
tificial fertilizer plant com-
plexes, and rehabilitating three
small mines. Vukmanovic indi-
cated the Yugoslavs might later
take up Soviet offers for par-
tial financing of other plants.
The American embassy in
Moscow speculates that there
may have been some discussion
of the idea of"Yugoslav pro-
duction of Soviet aircraft under
a licensing arrangement, al-
though there has been no spe-
cific reference to such.
The air agreement permit-
ting Yugoslav flights to Moscow
and the agreement enabling Yugo-
slavia to purchase an atomic
reactor, a cyclotron, and other
nuclear research equipment are
the first such Soviet agreements.
with a non-Orbit nation. Noth-
ing; indicates that Belgrade
agreed to ship atomic raw ma-
terials to the USSR in exchange
for this assistance. The Yugo-
slavs probably do not have suf-
ficient quantities of such ma-
terials to export them and still
develo a domestic research pro-
gram. Concurred in 25X1
by OSI and ORR)
August. Only Bulgaria has yet
to be heard from. These re-
ductions are designed to give
substance to the USSR's disarma-
ment campaign. Over-all Commu-
nist military capability is not
likely to be materially impaired.
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8 September 1955
PROPOSED MILITARY PERSONNEL REDUCTIONS
EUROPEAN SATELLITES
PROPOSED
The reduction of personnel
in Rumania and Poland will not
weaken seriously the capabilities
of existing units. The combat
effectiveness of the Czech and
Hungarian, armies will be re-
duced, however, as the present
balance of forces probably can-
not be sustained. To a lesser
extent Bulgaria would face the
same problem in reducing its
forces. Albania, whose strength
is negligible, has announced plans
for a reduction of 29 percent,
as compared to the reductions
of 12 to 18 percent planned by
the others.
The Satellites could adopt
many measures aimed at maintain-
Peiping to Grant Sinkiang
And Tibet "Autonomy"
Peiping has announced that
its remote northwestern province
of Sinkiang will be established
as an "autonomous region" this,
month. It has also reported
that Tibet is being readied for
"autonomy," but Chinese plans
CZECHOSLOVAKIA.
ing military preparedness despite
these cuts. Initial reductions
could be implemented by cutting
the size or number of classes
now held in service, with the
resulting loss offset by creating
cadre units and transfering to
civilian groups such military
functions as military construc-
tion:, operation of depots, hos-
pitals, and transportation facili-
ties. While some military units
could be maintained at present
strengths, others could be re-
duced to cadres whose units
could be brought to full strength
in a matter of days. In addi- 25X1
tion, facilities for military
training outside of the armed
forces could be expanded.
there apparently envisage a
further period of preparation
and Communist consolidation.
Sinkiang, which is approxi-
mately one third the si ,e of
the United States,is to be
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CURRENT INTELLIGENCE W]ERLY SUMMARY
8 September 1955
proclaimed "autonomous" at a
provincial congress beginning
20 September. Only 5 percent
of its approximately 5,000,000
inhabitants are of Chinese ori-
gin.'The rest are ethnically re-
lated to the Turkic peoples of
Russian Central Asia and are pre?
dominantly Moslems... Seventy-five
percent of these are Uighurs.
The new region will be set
up on a provincial level and
will include under its Juris-
diction the dozen or more local
minority districts already
established.. All of Peiping's
"autonomous" areas are defined
as being "inseparable" parts
of China proper.
Peiping also is laying
the groundwork for Tibetan
"autonomy" despite persistent
rumors of local unrest and open
opposition to. Communist policies,
The reports of unrest appear to
be exaggerated both as to the
extent of dissidence and to its
threat to Chinese forces there.
Peiping's proposals last
.March for the formation of a
Regional autonciny provides
the opportunity of utilizing the
natural wealth of the region and-of
developing its productive forces in
the best possible way Frithout. await-
Crop Prospect
In Communist China
As a result of favorable
weather conditions this past
summer, prospects are that
Peiping will attain its 1955
food production target of an
increase of 6.4 percent over
1954. Communist'China's long-
range agricultural' prospects,
however, continue poor.
Although crops harvested
in June were only fair, prima-
rily because of drought in the
winter and spring, Peiping
Preparatory Committee for the
Tibetan Autonomous Region by-
passed the usual prerequisites
of a Chinese type of government
organization and land reform.
Improved access to Tibet over
two new roads from China to
Lhasa and the probably success-
ful indoctrination of the youth-
ful Dalai Lama while he was in
Peiping may have made such short
cuts possible, Peiping does not
proclaim an area "autonomous"*
until military and political
control have been made certain.
Peiping may have reasoned
that "autonomy" for Tibet would
reduce both Tibetan resentment
of Chinese control and Indian
conoern over Communist penetra-
tion of the Himalayas. Peiping
has not indicated when "autono-
my" will be proclaimed.
The terms of the Chinese
proposals indicate that the
traditional. Sham area of Tibet,
which until recently was a part
of the Chinese province of
Sikang, will be returned to the
control of Lhasa. This would
seem to be another bid for
Tibetan co-operation.
Ing the-isions of a comuon center." 25X1
--Je V Stalin, Marxism and the
iatianal f~uestioa~,,
claims that bumper fall harvests
are insight. The fall harvests
normally account for more than
70 percent of annual food pro-
duction. Most of the antici-
pated wise in food output this
year wiily however, merely make
up for losses suffered as a re-
sult of the severe 1954 floods.
Peasants and most urban
residents will probably benefit
little from an increase in food
production.' The new extension
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CURRENT INTELLIGENCE WEAKLY SUMMARY
8 September 1955
of rationing which Peiping an-
nounced recently is expected to
hold down food consumption.
Rationing, which was first in-
stituted on a selective basis
in November 1953, now is to be
extended to cover all staple
foods consumed by the urban pop-
ulation of 100,000,000. Sepa-
rate measures are being taken
to deduce supplies to rural
areas.
If the fall harvests meet
expectations, the regime should
be able to supply enough food
to most of the population to
meet its low consumption stand-
ards, maintain exports, increase
the standard of living of the
growing numbers of favored in-
dustrial workers, and establish
some grain reserves, which.
Peiping has said are needed "to
cope with a possible imperialist
war of aggression or a possible
big famine."
Past agricultural failures
have prevented the regime from
building up large food reserves.
As a result of the poor 1954
harvest, Peiping has had diffi-
culty in acquiring enough food
for its more important'needs in
the face of widespread food
shortages and I the "tension"
which it .admits developed in
rural areas over the government's
grain buying and selling poli-
cies .
Recently released offic}al
figures on state procurement
and distribution of food sug-
gest that the reserves planned
will be small, perhaps, five
percent of annual food'--produc-
tion. In the USSR,. grain re-
serves are usually maintained
at about 20 percent of annual
production.
The long-range prospects
for agriculture in Communist
China are poor, as the regime
has decided to concentrate its
limited investment funds in
industry and the military mod-
ernization program rather than
in agriculture. As a result of
these policies, there will prob-
ably be no significant increase
in per capita food consumption
over the next decade.
Prince Sihanouk's popu-
larity, the popular appeal of
his Sangkum Rea~tr Niyum (SRN)
movement, and the prince's in-
fluence over the Qvernment's
administrative and security
machinery make likely a victory
for his supporters in Cambodia's
parliamentary elections on 11
September. The SRN is, never-
theless, a new and unknown fac-
tor in Cambodian politics and
the intelligentsia, including
,the
of the influential Buddhist
priests, oppose its program.
Moreover, the Democratic Party--
now the chief opposition--won
a large and unexpected victory
in Cambodia's last elections
four years ago.
25X1
25X1
The last parliament was
indefinitely recessed in Janu-
ary' 1953. Only the SRN and the
Democrats have candidates in
all 91 constituencies, The
Communists have entered 35 can-
didates in the campaign and are
expected to draw support from
moderate Democrats, thus en-
hancing SRN prospects.
The fundamental issue in
the campaign is Prince Sihanouk's
effort to substitute royal ab-
solutism for constitutional
monarchy. The. failure of the-
International Control Commission
to find against the US-Cambodian
military aid agreement prevented
the Democrats from making it a
major electoral issue.
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8 September 1955
Despite government harass-
ment, opposition candidates have
been able to campaign actively.
The Indian chairman of the com-
mission has stated that he is
agreeably surprised at the rela-
tive absence of flagrant sup-
pression of civil liberties
during the campaign.
In the event of an SRN
victory, there would probably
be little change in foreign
policy. Cambodia would follow
a. vaguely "neutralist" line
tempered by a highly apprehen-
sive appreciation of Vietnamese
and Chinese Communist expansion-
ist aims. It would look to the
West, particularly the United
States, for the economic and
military aid necessary to main-
tain its independence.
Afghan-Pakistani Dispute Settled
Pakistan and Afghanistan
have agreed to settle their
five-month-old quarrel on terms
indicating a return to the situ-
ation existing before the 30
March incidents, according to the
Pakistani ambassador in Kabul.
Afghan foreign minister
Naim is to raise the Pakistani
flag at the embassy in Kabul on
10 September. At the same time,
he will assure the future safety
of Pakistani lives and property
in Afghanistan and state his
government's intention to avoid
all propaganda breeding hatred
or inciting violence.
The Pakistani flag will be
raised at the consulate in Jelal-
abad on 11 September, and a
Pakistani cabinet minister will
raise the Afghan flag at the
consulate in Peshawar on 12
September.
Domestically, the SRN could
be expected to implement Prince
Sihanouk's constitutional re-
forms abolishing political par-
ties, limiting the role of par-
liament and centering power in
the throne.
If the elections do not give
the movement the three-fourths
majority necessary for con-
stitutional revision in the
elections, the SRN could prob-
ably bribe, intimidate or per-
suade enough of the opposition
to carry through its program.
Since Cambodia's elite oppose
royal absolutism and would be
alienated from the government
and the'throne following passage
of the reforms, long-term po-
litical and social frictions
would b a
course.
Afghan consulates in Pakis-
tan will be reopened, and the
Pakistani blockade of Afghanis-
tan will be lifted immediately
after the fla& ceremonies. Prep-
arations for the Kabul ceremony
are already under way.
Both countries made'conces-
sions to obtain settlement.
Afghan prime minister Daud, whose
militant support for an indepen-
dent state of Pushtoonista.n
touched off the quarrel, remains
in office but has had to accept
restrictions on Afghan policy
toward Pushtoonistan. Pakistan
gives up the idea of forcing
Daud's removal and total abandon-
ment of Pushtoonistan.
With reopening of normal
trade routes through Pakistan,
Afghanistan's recently expanding
economic contacts with the USSR
may be expected to receive less
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
emphasis. The Pushtoonistan is-
sue which is at the base of the
whole quarrel remains unresolved,
however, and, after'an initial
The Labor Situation in Chile
Relative calm prevails
in Chile following the sus-
pension-on 3 September of
strikes involving 501000
government employees and of a
general strike call for 5 Sep-
tember. The back-to--work
movement is a clear victory
for President Ibanez' admin-
istration and a severe setback
for extremist elements in labor,
including the Communists.
Even though the strikers
have returned to'work, Ibanez
has said that his'administra-
tion still needs the emergency
tries difficult.
period of improved relations,
will continue to make estab-
lishment of permanent friendly
relations between the two coun-
powers requested of Congress
at the outset of the strike
because the:strike was merely
"suspended;" Press reports
dated 7 September-.indicate
that congress will give him
these powers.
Labor unrest in Chile
may be expected to continue,
however, as long as the 'coun-
try's inflation, which has
caused a 270-percent increase
in the cost of living over
the past three years, remains
uncontrolled,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
PATTERNS AND PERSPECTIVES
MOSCOW'S EUROPEAN POLICY ON EVE OF ADENAUER VISIT
The foremost short-term
objective of Soviet diplomacy
since the summit conference has
been to maintain the status quo
in Europe. The underlying long-
term strategy is the same which
impelled the Soviet leaders to
go to Geneva: to create favora-
ble conditions -leading to basic
shifts in public sentiment and
policies in the non-Communist
world and thus to reopen the way
for the attainment of fundamental.
Soviet objectives in Europe.
The main tactic in Moscow's
diplomacy is to convince the
non-Communist world that the
threat of Soviet military
aggression had evaporated. This
would deprive the Western al-_
liance of its most powerful
unifying and motivating force
and encourage divergent interests
and policies within the alliance.
Split West Germany and West.
The most pressing task of
this diplomacy is to' halt the
trend toward the incorporation
of a sovereign and rearmed West
Germany into the Western alli-
ance. The USSR has developed
a far-reaching program to this
end with extraordinary speed and
resourcefulness. The Soviet
leaders appear to have recog-'
nixed that the initial success
of Chancellor Adenauer's policies
were largely due to cold war
tensions, They were faced with
the disturbing possibility that
West Germany would eventually be
in a position to bring the in-
creasingly formidable weight
of the Western alliance to bear
in an attempt to induce the USSR
to withdraw from East Germany,
leaving a reunified Germany
solidly within NATO. Moscow
chose to bring about a general
East-West detente before West
Germany could rearm as the most
effective way of forestalling
such a development.
The Soviet leaders prob-
ably hope that a detente will
generate the belief in Western
Europe that a rearmed West
Germany is no longer an in-
dispensable forward bastion
against a hostile Soviet bloc.
The aim of this aspect of
Soviet policy was indicated by
East German president Grotewohl
remark on 12 August that the
Geneva conference "has shat-
tered Adenauer's concept."
Moscow may also estimate that
in an atmosphere of detente,
West Germany could become, with
Soviet encouragement, a source
of dissension and weakness in
the Western alliance.
Approach to German Problem
Moscow has been developing
an intricate line of?argument
on the key German question de-
signed to mask the USSR's vul-
nerable position in the face of
Western insistence that free
elections be adopted as the
principal device for reunify-
ing Germany. According to the,
Soviet thesis, West Germany's
entry into NATO and WEU and
East Germany's entry into the
Warsaw pact system have created
a new situation in which the
Eden, plan for a "mechanical
fusion" of the two parts of Ger-
many is-no longer possible or
realistic.
The German problem, Moscow
contends, cannot be settled
separately from the critical
issues of European security and
disarmament. Moreover, the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
settlement of all these ques-
tions depends largely on the
creation of confidence between
states.
This intricate approach is
clearly calculated to allow the
USSR to play for time without
losing the initiative and credit,
it has gained from its'actions
and gestures toward establishing
an East-West detente.
The passage of time,-Moscow
leaders hope, will:'.bring a pow-
erful upsurge in West German
restiveness and opposition to
Adenauer's policies as the best
means of achieving reunifica-
tion. Moscow appears to antici-
pate that these trends will
progressively weaken Adenauer's
position, arouse apprehensions
and suspicion of West German
aims throughout Western Europe,
and disrupt military planning
within WEU and NATO.
Moscow will do all in its
power to encourage the West
Germans to believe that their
best course lies in the direc-
tion of a "third force" between
the two blocs and that this
position as a fulcrum of the
East-West balance of power will
bring profitable rewards in terms
of restored power and prestige.
The Soviet aim, in short, is
to neutralize West Germany,
politically, without undertaking
any binding commitments on re-
unification or a final German
settlement.
Aims for Adenauer Visit
With these objectives and
tactics in mind, it seems un-
likely that the Soviet leaders
are preparing any great sur-
prises for Chancellor Adenauer
in Moscow.
They appear to have two
principal aims in these talks.
First, they want to prepare the
ground for eventual agreement on
the establishment of diplomatic
relations between the USSR and
West Germany as a major step
toward the legalization of the
division of Germany and recogni-
tion of the East German regime
as a sovereign government.
Second, they want to use these
talks as a forum from which to
address appeals to the West
German public over Adenauer's
head in an effort to discredit
his policies by making them
appear responsible for the
continued partition.
Diplomatic Relations: The
Soviet negot ators formal
positions will probably follow
closely Bulganin's presenta-
tion at Geneva, the keynote
of their case will be that the
establishment of diplomatic,
economic and cultural relations
will mirk an important step to-
ward reunification and that the
USSR, by,-inviting Adenauer and
offering to establish normal
relations without preliminary
conditions of any kind, is
doing its part toward bringing
about a rapprochement between
they two parts of Germany, which
Bulganin,at Geneva described
as "our primary duty."
German Unification: The
Soviet lea ers are likely to
concentrate on two major themes.
The first will be that a
European security system pro-
vides the best and only frame-
work for the eventual reunifica-
tion of Germany and that the
establishment of diplomatic
relations between the USSR and
the Federal Republic will open
the way for Bonn's participation
in any limited security pact
that may be copcluded in future
conferences.
Second, the Soviet leaders
will insist that a rapprochement
between the two German govern-
ments is an essential part of
the unification process. They
are unlikely to insist on West
German recognition of the East
German regime as a condition
for the establishment of diplo-
matic relations, but they will
certainly urge Adenauer to join
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CURRENT INTELLIGENCE 'WEEKLY SUMMARY
8 September 1955
the East Germans in formulating
an all-German position for sub-
mission to the foreign mini-
sters' conference in October,
It appears likely that Mos-
cow is prepared to release at
least some of the German pris-
oners of war still in the USSR,
but it will reject any West
German attempt to treat this as
a condition for the establish-
ment of diplomatic relations.
The Soviet government may move
to deprive Adenauer of this
bargaining point by'informing
him that the question has al-
ready been settled with the
East Germans. An East German
delegation which returned from
Moscow on 20 August reportedly
discussed this subject with So-
viet leaders. Whatever form
the release may take, Moscow
will ensure that the East Ger-
mans gain the greatest credit
and prestige from obtaining it.
Economic and Cultural Rela-
tions: In the field of econo-
mic relations, prospects for a
resumption of the prewar trade
pattern between Germany and
the USSR are poor chiefly be-
cause of the Soviet bloc's un-
willingness to change its poli-
cies of self-sufficiency and
forced industrialization which
have been primarily responsible
for the postwar decline in East-
West European trade. However,
the Soviet negotiators will
probably claim there are favor-
able long-term prospects of
greatly expanded trade and may
make some attractive offers
designed to have an immediate
impact among West German busi-
ness circles. French officials
last spring expressed fear
that the USSR might be pre-
paring to switch trade and ship
construction contracts from
France to West Germany. Soviet
trade officials have hinted to
the French that the USSR is now
more interested in obtaining
German ships.
In the cultural field, the
Soviet leaders can point to the
visit last spring of West Ger-
man newspapermen and the re-
cent trip to Moscow of'a large
contingent of both East and
West Germans to attend the
Soviet-West German soccer match.
The Soviet press has played up
these visits as an important
contribution to the establish-:
ment of ties between the "work-
ing class" of the USSR and
West Germany.
Tactics at October Conference
The Soviet leaders prob-
ably hope to obtain at least
preliminary understandings
with Adenauer on the establish-
ment of diplomatic, economic
and cultural relations which
can be used to buttress the
Soviet position at the foreign
ministers''.-conference in October.
At that conference, the USSR
will use the prospect of for-
mal relations and recognition
of the Bonn government to sup-
port its thesis that the first
step toward settlement of the
German problem is to create
a European collective security
system with the participatA-on
of both parts of Germany.
The Soviet delegation at
the October conference will
therefore probably attempt to
avoid any precise commitments
on reunification but will show
willingness to compromise in
order to reach agreement on
European security. The Soviet
ambassador in Paris recently
told the Greek ambassador that
the October conference would
be long and difficult,; but that
progress might be made on sub-
jects other than German reuni-
fication.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
The 'Soviet government ap-
pears to regard the conclusion
of even a limited European se-
curity pact as of decisive if-
portance to the success of its
detente strategy. Molotov can
be expected to press strongly
for Western acceptance of
Bulganin's summit conference
proposal for a nonaggression
treaty between existing "mili-
tary groupings"--NATO and the
Warsaw pact powers--which would
remain in force for a temporary
period. Soviet spokesmen have
been at pains to show readiness
to consider Western security
proposals, particularly the
Eden plan for a great power
pact.
While Moscow may show
readiness to make important
concessions in order to arrange
a limited European security
pact which would leave NATO and
the Warsaw pact in force, it
would still continue to insist
on the necessity of moving on
at a later date to the creation
of an all-European collective
security system. The USSR
would not renounce this demand,
because it appears to regard
the all-European security sys-
tem., which would replace NATO,
WEU and the Warsaw pact, as its
most effective device for
building up strong psychologi-
cal :pressures on Western gov-
ernments for eventual changes
in their policies toward the
Sino-Soviet bloc.
Soviet : ; dipldmacy.. since
the summit conference thus pre-
sents a pattern of two differ-
ent levels of activity--Soviet-
West German and East-West German
relations on the one hand
against the background of an
extended series of great-power
conferences. The Soviet leaders
probably envisage these two
levels as exerting interacting
pressures and influences, but
it is on the level of Soviet-
West German and East-West Ger-
man negotiations that they ap-
pear to anticipate the most
decisive advantages and develop-
ments.
THE SOVIET STAKE IN EAST GERMANY
Since the Communists real- The Military Stake
ize they will probably not be
ble to dominate a united Ger-
many, the USSR is likely to con-
tinue to hold on to East Germany.
Not only is East Germany a valu-
able military and economic asset,
but Soviet spokesmen have indi-
cated repeatedly that Moscow
believes the continued division
of Germany is the surest guaran-
tee against the rise of a mili-
tary threat to the Soviet bloc
based on German manpower, indus-
try and energy.
East Germany, by virtue of
its geographical location astride
the great European plain, has
.ent strategic value to the
nher
USSR for both offensive and de-
fensiLve purposes. Although the
Soviet army of occupation would
require reinforcement to carry
out decisive offensive operations
against Western Europe, Soviet
troops now located in East Ger-
many could constitute an initial
striking force for such an
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
offensive. Soviet
capabilities in this
regard are increas-
ing. The 400,000-
man Soviet army there
is being reorganized
and re-equipped to
increase its fire-
power and mobility.
Soviet tactical
bombers now based in
East Germany could
range over most of
the continent and
most of the British
Isles. The USSR has
constructed over 30
major airfields in
East Germany since
World War II--ha.lf
of them capable of
sustained operations
by heavy and medium
bombers, making this
area one of the four
or five potential
Soviet staging areas
for bombing opera-
tions against North
America.
The principal
mission of the So-
viet air army 'in
Germany .is tacti-
cal support of the
ground forces. This
capability has in-
creased with the arrival of
improved interceptor aircraft,.,
the beginning of the jet. re-.
equipment of ground-attack
units, and the recent doubling
of jet light bomber strength.
Soviet jet fighter units in
East Germany also augment bloc
air defense capabilities in
Eastern Europe.
From the economic point of
view, East Germany is a valu-
able asset to the USSR. East
Germany's trade turnover with
the rest of the bloc in 1953,
the last year for which figures
are available was $1.5 billion,
of which $915,000,000 was.with
the USSR. East Germany had a
Grossoolln ?I 1
Orantenbur& Eberswald~
?
BERLIN Werneuch
EAST GER rCANY
8 SEPTEMBER 1955
SOVIET ARMY HEADQUARTERS
SOVIET GROUND FORCES 400,000
CLASS 1 AIRFIELD
SOVIET JET LIGHT BOMBERS 240
SOVIET JET _FJGHTE,$_ '676
trade deficit of over $.80,000,-
000 wwith the USSR, probably
because some of its purchases
were made out of a $121,250,-
000 Soviet lda.n granted in Au-
gust of 1953. Since the East
German economy is predominantly
industrial, its exports consist
of capital equipment, pre-
cision goods, transportation
equipment of all types, synthe-
tic fuel, uranium ore, and
chemicals, in return for which
it receives foodstuffs, raw
materials, and semifinished
goods.
Although East Germany's
import requirements, particu-
larly of foodstuffs, place
some strain on its suppliers
within the bloc, its exports
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CURRENT .INTELLIGENCE WEE KLY SUMMARY
8 September 1955
EAST GERMANY
TOTAL FOREIGN TRADE TURNOVER 1953
2,017 MILLION DOLLARS
(all figures are millions of dollars)
of over $500,000,000 worth of
industrial equipment each year
more than offset this strain,
as much of this equipment could
not be obtained elsewhere in
the bloc in sufficient quanti-
ties. Therefore,if the USSR
were to agree to German unifi-
cation, it would probably rem,
quire the Germans to sign long-
term contracts to supply such
goods. This would not be at
all disagreeable to the Germans,
as they have always desired to
expand their Eastern markets,
and any sudden loss of Soviet
orders would result in wide-
spread unemployment in East
Germany.
The USSR would be almost
certain to insist on retaining
control of the East German ura-
nium mines if German unification
were to take place. These mines
account for approximately 50
percent of bloc supplies, and
it is estimated that they will
continue to produce at the pres-
ent'. level of output through
1960, but at an increasing cost
per unit of uranium due to de-
pletion of the richer veins.
Continued occupation of
East Germany gives the USSR
certain economic advantages it
'would not enjoy in relations w
with an independent state. The
discriminatory pricing reportedly
used in Soviet-East German trade,
and East German support of Soviet
occupation troops would end with 25X1
reunification.
The last 33 of the original
200 Soviet-owned corporations
in East Germany were returned to 25X1
German ownership ostensibly with-
out compensation on 1 Januar
1954.
The economic cost of German
reunification to the USSR would
not end with the above listed
items, however, for the USSR
would lose control of a steadily
growing economy which can make
larger contributions in the fu-
ture than it does at present.
The USSR could, of course, pur-
chase many of the industrial
goods available in East Germany
from a reunited Germany, although
the export of strategic goods
would probably be restricted.
The USSR would, however, have to
deal with an independent country,
and would no longer be able to
order goods at discriminatory
prices and demand delivery on
its own schedules, F_ I
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sir
CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
Communists and Socialists," and
that the Socialist Party is too
closely tied up "with the broad
masses of the working people
to renounce its political ori-
gins" and "commit suicide" by
breaking with the Communists.
The question of Nenni's
price for co-operation with the
government is being widely dis-
cussed. Some Italians continue
to believe that Nenni's over-
tures to the Christian Democrats
are part of a Communist plan to
control the government through
him. Some of these, however,
feel the Communists are showing
signs of unease over the pos-
sibility that Nenni's pseudo
independence might increase his
popular prestige to such an
extent that he would eventually
feel strong enough to make a
genuine break away from them.
Many Italians feel it has been
politically necessary for Nenni
to continue his public insistence
that he is maintaining the unity-
of-action pact with the Commu-
nists until he is sure the
bulk of his present supporters
will follow him into a new
alignment.
To the question of whether
Nenni would be acting in good
faith or as a Communist stooge,
they cite his desire to be on
the winning side, apparently
the basis of his successive
switches from the Fascist to
SECRET
the Republican Party, and then
to the Socialist Party. They
also point to the practical
success of-his postwar associa-
tion with the Communists, as
contrasted with the fate of the
Social Democrats, who left his
party in protest against
Communist domination and have
steadily lost ground because
of their subservience to the
Christian Democrats.
announce on 30 June that the
existence of the Atlantic and
European military pacts does
not prevent the Italian
Socialist Party from supporting
a government which fundamentally
obligates itself to a policy
of :Lessening international
tensions."
Many Italians feel that
the real test of the Nenni
Socialists' intentions will be
their performance in parliament
over the-next year. In any
case the outcome of the next
general elections, in which=4
both the Socialists and the
Christian Democrats are expected
to gain, should determine the
direction both nartiac will
take.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
Within the Socialist Party,
sharp differences have emerged
between the pro-Communist and
''autonomous" factions. This
was particularly evident at
the Socialists' national con-
gress at Turin in March,, which
resulted in a decision by the
party leadership to seek an
'?understanding" with the Chris-
tian Democratic leadership.
Various feelers have fol-
lowed.. In May the Nenni Socialist
newspaper Avanta:published a
statement by the party direc-
torate and later one by Nenni
himself which, in contrast with
earlier and more general state-
ments, named specific socio-
economic reform measures on the
basis of which his party would
collaborate with the Christian
1emocrats.
In July, the Nenni Social-
ists' central committee adopted
a resolution urging the party's
organizations "to widen and
deepen their relationswith
the Catholic masses..,
The government-controlled
news agency, ANSA, which has for
years maintained that the Com-
munists and Nenni Socialists
are one and the same thing,
came out on 27 July with a
commentary headlined, "Gulf
between Communists and Nenni
widens." ANSA said that
the meeting of the Communist
Party's central committee in
Rome several days before had
left the impression that the
Communists were trying to
appropriate the "opening to
the left" slogan. It added
that the Communists "obviously
fear that should 'Operation
Nenni' succeed, the Communist
Party would find itself even
more isolated."
Communist deputy chief
Longo had declared at the cen-
tral committee meeting that the
formula for the move to the
left was not a recent one, but
had been suggested by Togliatti
in 1954. Longo said there could
be "'no differences between
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
N?ANALYSIS OF SHOP STEWARD
JAMIG
(
257 PLANTS, 309,000 WORKERS INVOLVED)
ITALIAN GENERAL LABOR CONFEDERATION
ITALIAN LABOR UNION
Democratic rapprochement based
on moves by Nenni away from the
Communists--was "in full swing."
He predicted that Nenni, who
"has no intention of sharing
the political starvation" of
the Communists, will either
vote for or abstain on the Segni
government's programs for about
a year, with the idea of secur-
ing a place in the government.
The director of Turin's
important Stam.a told an Ameri-
can offici16 July that
"the remaining danger is that
Nenni will not be helped to
divorce himself from the Com-
munists and will be driven
back, making possible a popu-
lar front,"
Socialist-Communist Differences
Developing friction between
the Nenni Socialists and the
Communists is apparent in both
the political and labor fields.
According to a spokesman for
the Sicilian Separatist move-
ment, the Socialists' decision
to run on a separate list in
the June elections had been
opposed by the Communists.
Abstention of the Nenni
Socialists in the July ballot-
ing for the president of the
Sicilian regional assembly
permitted the Christian Demo
cratic candidate to win despite
the opposition of the Communists,
Monarchists and neo-Fascists.
Thus .for the first time in
eight years the Christian Demo-
crats did not rely on the sup-
port of the rightist parties
in Sicily.
In the vote of confidence
for the Segni government on
18 July, some 20 of the Nenni
Socialist deputies reportedly
left the chamber in order to
provide the Christian Democrats
with a larger victory.
A long-standing source of
friction between Communists and
Nenni Socialists has been the
Communists' emphasis on the
political rather than the labor
problems of the Italian General
Confederation of Labor. This
has had repercussions in shop
steward elections and in the
failure of such strike efforts
as the-one in Genoa last
winter.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
international detente and from
domestic developments. The
relaxation of tension may have
increased intraparty friction
between supporters of party
leader Togliatti's conciliatory
policies and the militant group
led by Secchia. In addition,
although the Communists are
trying to exploit it to win
votes, the detente may have
influenced some who voted Com-
munist for fear of reprisals.
Meanwhile, as more voters are
beginning to benefit from Italy's
NENNI SOCIALIST
COMMUNIST
CHRISTIAN DEMOCRATS
OTHER
previous practice in Sicily ran
separate from the Communists in
this year's elections, gained
more than the Communists lost,
so that the left bloc's share
of the vote was higher than in
195:1. Other elections since
1948 have shown a steady rise
in the Nenni Socialists' poll-
ing power. The current re-
laxation of world tension,
moreover, which Nenni has
championed, tends to boost
his prospects.
ITALIAN ELECTIONS
1948-53
12,836,947 VOTES 8,957,623 VOTES
49% 36.4%
1948 (NATIONAL)
*No breakdown of total votes obtainable
economic improvement, fewer
are interested in Communism.
The Communists have suf-
fered further attrition from
the fact that even though they
and their Nenni Socialist
allies have polled more than
one third of the popular vote,
they have no voice in the govern-
ment and have even been unable
to block important government
legislation, such as ratifica-
tion of NATO and the Paris
agreements.
Nenni Socialist Rise
Evidence of the changing
balance of power on the left
was provided by the Sicilian
election results. The Nenni
Socialists, who contrary to
It now appears that cer-
tain financial interests are
Jumping off the Communists'
bandwagon and jumping on the
Nenni Socialists'. The presi-
dent of the Fiat firm, for
example, although he is doubt-
ful of Nenni's own motives, has
told American embassy officials
he is willing to give money to
win Nenni's following over to
the democratic side.
The independent press, too,
appears increasingly interested
in the Nenni Socialists as a
possible anti-Communist force,
The director ' of the influential
Milan newspaper Corriere told
an American official on 12
July that "Operation Nenni"--
that is, an effort to achieve
a Nenni Socialist-Christian
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CURRENT INTELLIGENCE WEEKLY SUMMARY
8 September 1955
.NENNI SOCIALISTS IMPROVING POSITION IN ITALY
Democrats to rely for support
on the steadily declining smaller
center parties. Many observers
believe that in the next general
elections, which may be held in
1956, the small center parties
will virtually disappear.
There are a number of in-
dications that the Communists
are losing ground in Italy.
In the important Sicilian elec-
tions in June, for example, the
Communists polled fewer votes
than in 1951. They have also
generally shown losses in shop
steward elections throughout
Italy over the past year, partly
as a result of management's
switch from conciliating the
strong Communist labor con-
.federation to bringing pressure
on Communist employees in firms
seeking offshore procurement
contracts. The circulation of
the Communists' newspaper,
L'Unita, has fallen off by
abou 5 percent since 1954.
The Communists' losses
probably result both from the
ITALIAN CHAMBER OF DEPUTIES
PARTICIPATING I,y
GOV ER~M#n~r
The steady gains in power
and prestige of Pietro Nenni's
Italian Socialist Party are
arousing increasing speculation
among leading Italians as to
the possibility of an eventual
genuine split between Nenni and
the Communists. Communist
leaders, aware that their own
party is in a period of rela-
tive decline, seem somewhat
uneasy over the prospect that
they may lose control of their
old Socialist allies.
Leading Christian Demo-
crats, while firmly rejecting
collaboration with any party
connected with the Communists,
now are weighing the attrac-
tions of an eventual govern-
ment "opening to the left"--
that is, a working alliance
with Nenni which would permit
a Christian Democratic govern-
ment to control parliament with
the support of the Socialists.
The fall of premier Scelba in
June 1955 and the difficulties
encountered in forming the
Segni cabinet demonstrated the
weakness of a government formula
which requires the Christian
G~P~~ REPUg~p AN5 L1 J1i 1LJ
P
~ a00~~ R I
CHAMBER OF DEPUTIES -- 590 SEATS
COIIEIAL
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