Intelligence HIGHLIGHTS NO. 9 WEEK OF 6 JULY - 12 JULY 1948

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December 12, 2016
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May 16, 2001
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July 12, 1948
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tiosi DRAFT [11, IIMI,14,1???? Approved For Release 2001/08/26 -RDP79-0 ti1; -404997991 I DECLASSIFIED CLASS. CHANGED TO: NEXT REVIEW DATE. AUTH: HR 704u DATE1G4" FTFIEVIEWER: 372044 TO 0 j2?60 OFFICE OF REPORTS AND ESTIMATES, CTA FAR EAST/PACIFIC BRANCH IN TEMA GENCE NI CHLI.CHIS ,NO .4 9 VJEEK OF /A JULY - 211L JULY 1948 I. e SECTION I. SUMMARY OF FAR EAST MUDS AND DEVELOPTIBITTS Japan's program to build steel vessels for foreign account stirs inquiry and protest (page 3). A new military exchange rate will be a stabilizing force in Japanese economy (page 4). The 29 major bills passed in the recent Diet session indicate the completion of SCAP's basio democratization program and it now appears probable that the Japanese government may be given increased political latitude (page 4), The situation in Korea is rapidly approaching its long-awuited culmination with the imminent establishment of two competing "national" regimes. By 1 September there Will exist a US- and UN-sponsored Republic of Korea in the South and a Soviet puppet Democratic Korean Peonle'S Republic In the North. This development will offectivoly remove the last possibility of the early unification of Korea by peaceful means (page 4). In China the most likely prospect for the coming months is that actual power will pass from rankine into the hands of regional leader (page 7). During the past week the rationalist Army has suffered con- siderable losses in large scale fighting in Yon= province. In Manchuria, however, the long anticipated Communist offensive still hes not materializeCe (pages). The Chinese Communists, in a recent resolution of their Central Committee, have affirmed their solidarity with international Communism (ease 5). Favorable comment in the Chinese press rerardine US atd ie balanced by a noticeable amount of hostile criticism, and a growing sentiment In favor of an early peace treaty with Japan (page 6). State Dept. declassification & release instructions on file In suomeding sections of this Weekly, the following marginal notations are used: Double asterisk (**) -- placed at beginning and end of information based solely on "S/S distribution" series. Single asteriek (0) -- to flag item containine "S/S dietr- bution" series. "B", or "C" -- importance, in B 2'1 opinion, of the tem, with "A" representing the Most important ones. Approved For Release TCIA-RDP79-010 Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 SECRET -2- :y (continued) The situation in Malaya is requiring a major British military effort (page 8). . The pending retironent of the Burmese Prime 7inis1er is aggravating the politioal situation in Burrs (page 9). hs Phibul Government in Siam is preparing for a political crisis -othich may reaeh a climax in late July or early August (nage 9). Dissident groups in the Philipnines are adopting a "wait and see" ''Tiitatte toward arms surrender (page10). Appraisal of Quirino adminis- tration. by US Embassy, Manila (page 12). Coal mine and waterfront strikes are affeoting Australian and New Zealand dollar earnings (page 10). 11.."114_ !=1::11111611M Approved For Release 2i. .i CIA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 SECRET 10.0314* EON 11. DEVTALOPLOITS IN SPECIFILD ART1AS GENERAL ?flaa_tto build shies for exoort. Japan is planning the oonstruction of steel vessels for foreign account, MOO of which are over 6,000 gross tons. Negotiations and/or offers for such ship-building as of 26 June totalled as follows: Norway 33 ships, Denmark 6 shies, Philippines 3 ships, France I ship, US 39 ships. In addition inquiries have been reoeived from Italy, Australia and Sweden. To vessels of' 0,000 gross tons or over are be- ing built for Japanese account, but the program has aroused the interest of the FEC and US industrial interests and evoked a protest from the UR. The Ur. claims that if permission be 0.ven to the Japanese to build ships for export at this time, particularly ships of this size, the discussions on Japanese shipbuilding capacity now proceeding in the FEC might be prejudiced. Opposition to Japanese shipbuilding for export may be expected for two major reasons: (1) Security--the possibility that a future Japan free of foreipla supervision could turn "excess" shipbuilding capacity to aggressive purposes and (2) Economic--desire by maritime nations such as the UE to have other nations use their shipping, facilities and to be free of competition for their own ship-building for export. Approved For Release 20 CIA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 lit!ENT- -4? JAPAN New military exchange rate of 270 to 10 A new military conversion rate it:airEetaiesr a rate of 270 yen to the dollar as compared with a prior rate of 50 to lo The new rate covers exchanges intransactionsinvolving military personnel, missionary aoquisitions, foreign businesi.authorizations, and /migrant remittances. The number of dollars which will became available to the Japanese 0001101V as a result of the new conversion rate is not expected to be greats However, it will be a stabilizing force for the Japanese econoey because (1) it is a step forward in the direction of making more realis- tic the dollar-yen exchange rate and (2) it should lessen the excursions by dollar holders into the blaokmarket. Ja ants new democratic framework co. leted. The second national Japan.. see 0 1 ? ose on y saw e passage of 29 major bills which, a spokesman for SOAP estimated, enacted into law "all of the legislation essential to the full implementation of the basic concepts of the new constitution." Among other legislation these bills includes revised codes of civil and criminal procedure, the introduction of habeas cor- pus into Japanese jurisprudence, provision for the punishment of corrupt political practices, further decentralization of government through the Board of Education Bill, and an attempt to assure good government through a National Government Organization Law and the Administrative Management Authority Law. The spokesman's statement appears to indicate that SCAP"s basic legis- lation for "democratising" Japan is virtually oomplete and presages in- creasing latitude for Japanese political initiative. "C" "B" KOREA The National Assembl now meeting in South Korea has ado tad a ocestitu- "A" on an a so e U 0 announce rma on o pu o around 1 August. At the same tine, the haatily-convened Fifth Session of the North Korean People's Council, after denouncing US "unilateral" action in South Korea, has put into effect its own Soviet-model constitution and scheduled the holding of elections on 25 August for the establishment of a Democratic; Korean People's Republic in which South Korea will have ostensible representation. This Soviet-inspired action is being accom- panied by an intrigue intended to discredit the South Korean regime by restoring the electric) power supply to South Korea in response to a care- fully-timed future request by Kim Koo and Kim Kyu Sik, the two leading ? non-Communist opponents to the establislynent of a national government in South Korea. Formation of the North Korean puppet regime will undoubtedly be followed by renewed Soviet pressure for the removal of all occupying forces before the De can have an opportunity to establish a native secur- ity force in South Korea adequate to protect it from aggression by the 41W North Korean People's Army. Approved For Release 20 CIA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 14014-. kcomrROAIraveleralCalSOAMIUMeeetaetelgels11,19.6-.9...ate een plains, foutheest of the provincial capital Kaifeng, with both sides aig impressive victories. As yet no conclusive reports of the fightieg 3 been received, but the Nationalist spokesmen have admitted that one loeillet divisionVas lost and several others badly beaten up. &drays.. :72nt Nationalist claims of casualties inflectee upon the Communists are iy ilkor unfounded. and it is doubtful whether they have succeeded tn eeeshtag:Communist strength in Central China. However, the large Communist cencentration (which reached over 10 columns at the height of the fighting) eebeeouently dispersed while diversionary efforts were undertaken by other i;ommunist forces in Rupeh near Hsiengyang And in the &Welt% area of North Xiangsu. . po ? ,,AaL.? MLL.1,1/0 may be the con- "A" sequence of a preoccupation with.certain difficulties besetting their military efforts. According to this interpretation the string of Communist offensives in Manchuria has been halted by chronic shortages of weapons And &munition, transport problems which grow in intensity as the fighting shifts further away from their main bases north of the Sungari River, food shortages which may become more acute, and the lack of more accessible tactical targets. The latter resulted from Commenietoccupation of all important Manchurian cities except Mukden and Changchun, and may have led to a rift in the top Communist command, some of whom hold that the present cost of their conquest would be abortive while others hold that it Is & prerequisite to any large Commanist movement into North China. Nowever, Communist agricultural production should be adequate, seem in recently fought over areas, and sufficient to avoid widespread want. 'Communist eontrol of the great percentage of China's operating railways ;an* indicated intensive efforts in Manchuria toward the rehabilitation of newly acquired lines, makes Communist logistic shortcomings somewhat less severe than the Nationalists% It is therefore estimated that the CommUnists can still return to the offensive at a time of their own choosing. It is, moreover, likely that their goals will remain the same: continued siege of the be- leaguered Nationalist cities in Manchuria (although all-out assaults cannot be completely discounted) with concurrent shifting of elements of ,heir Man- churian strength into Pu Tsoeyies North China area. ,Eationeliet Manchurian capabilities are largely defensive, and further threatened by severe economic pressures within their islands of control. While the Communists can take Manchuria on a timetable of their own devising, the final conquest still seems distant. Philos? Commq4i0 vitg11421AX-X1141 WW.10.12nR1A2Emnaaa under soviet leadership has been vigorously professed in a resolution of 11 July of the Approved For Release I CIA-RDP79-01082A000100010012-6 t1BU Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 SECP.ET Chinese Partys Partyus Central Committee assailing Marshal Tito for *rejecting the fraternal criticisms of the Communist Party of the Soviet Union*. A recent Cominform directive to Communist parties throughout the world, includ- ine China, to model themselves on the Soviet Communist Party may have served to prod the Chinese Party to take this action. Moreover the fact that the Cominform statement on this subject omits China from the praise bestowed on the Communist Parties in Fiance and Italy suggests that the Soviet Party is displeased with, and desires to issue a warning to the Chinese Communist Party because of its independent tendencies. It is noteworthy that Chinese Communist pronouncements during recent months which have indicated a modem. tion in policy, have come entirely from prominent leaders within areas of China proper, while there is no evidence that the Communists in Manchuria have taken parallel action. Some quarters have been disposed to regard this as evidence of a schism within the Party. Remover, in view of the recent resolution it is unlikely that there exists a split of serious proportions, or that the Chinese Communist Party will allow an important policy dispute to develop at this time inasmuch as such dissension would inevitably endanger present Communist ascendancy in the civil war. British social =Lynam in. Tibet have been under fire from the Mongol. Tibetan Commission at Nanking which has requested the Chinese Foreign Office to negotiate for their abrogation. The special position of the United Kingdom stems from the Anglo-Chinese Convention of 1906. With Indiaos independence, the British Mission In Lhasa has become the Indian Mission there, but the personnel, which is largely British, remains unchanged. agnints_mallar-Aellandaloz_m_oarly Japaoesp peace_troaty have belso intensified by the recent criticism of the US policy toward Japan. These demands stem not only from the Chinese fear that a powerful Japan is being restored but also from ChineJe desire to play a determining role in Japan"$ future, now being directed exclusively by the US. The Legislative and Con. trial Tuans have supported proposals urging an early peace conference. The Vie. Minister of Foreign Affairs, in answering the Control Tuan's proposals, reviewed negotiations for a preliminary parley and absolved China from responsibility for delay. Ns blamed disagreements among the Allied nations for the impasse and reiterated China's proposals for a compromise whereby an eleven nation conference, with the Big Four retaining the veto, would decide the peace settlement. a 14. hinese , re :; _1., e 3 Tay, while generally favorable, contained the inference in some papers that the aid was niggardly and than Insufficient to be of any great velum. Most papers commented that effectiveness of the aid would be largely deter- mined by China's ability to help herself, while some papers implied that US had imposed hard terms for its own benefits. At the same time the press reacted very favorably to the Dewey nomination, expecting larger US aid to China to result if he is elected. Outside the reception in the press, which is largely government.controlled, there is a noticeable and growing resent. Approved For Release 200 IA-RDP79-01082A000100010012-6 "C" "S" Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 SECRET -7- merit against the US aid program among considerable numbers of Chinese on the rounds that such aid merely prolongs the civil war and postpones the fall of the National Government which they regard as hopelessly corrupt and ineffectual. lba_imajokolemozasfattrialont.pennot survive fora long period lathe opinion of increasing numbers of Nationalist officials. In view of the deteriorating situation, Marshall Li Chi-shon and his dissident group in Hong Kong are making active preparations to establish, during the next few months, a rival "provisional government",, and. in these efforts are seeking the assistance of US officials in China. He is reportedly of the view that a change in administration in Washington will result in increased aid to Nanking, strengthening the position of Chiang Kai-shek, and therefore he is eager to establish his "government" prior to the US November elections. It is questionable, however, whether Marshall Li either has secured the allegiance of any important leaders in Rationalist China or has sufficient military back- ing to insure the success of his movement. The most likely prospect for the coming months is an acceleration of trends toward the establishment of regional regimes and associations, with the actual power in Nationalist China passing from Nanking into the hands of regional civil and military leaders. 2......pulEripes, Exchange and commodity markets experienced another "B" inflationary upswing during the past weekend. Although the rise was substan- tial and wide-spread it was not as sharp as that recorded on 26 June. The US dollar was selling for as high as CR $6.2 million on the Shanghai black- market on 12 July; the price of rice reached a new high of CR $28 million per picul. This new spurt was believed caused by increased accumulation of idle capital in Shanghai and other large cities. Merchants are becoming reluctant to dispose of goods in exchange for CH Dollars and there is an increasing tendancy toward barter. The Shanghai Market: 114_1....4slatica_i_aline-EALI 911111?121pane 229.VOSSEaLtt Wholesale Price of Bice This week (9 Jul 48) CR $ 480,000 ON $ 4,400,000 CN $ 24,000,000 Weak ago (2 Jul'48) 480,000 4,000,000 19,500,000 Month ago (9 June48) 480,000 1,575,000 7,700,000 Year ago (9 Jul 47) 12,000 44,000 420,000 Loz.Liegial-T2PACzaiklIgrie. The China Export-Import Board announces that Chinas exports for June increased to US $20 million, as compared with the US $16 to 17 million level for the tree previous months. The Board attributed this increase to the new foreign exchange link system, whereby exporters are able to augment their returns by selling exchange surrender certificates to importers. This improvement in exports, although not substantial, is signifi- cant in view of Chinas depleted foreign exchange funds. non Approved For Release 20 IA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 'ituation in_ralava requiring major British militanz effort, Although "A" Yle British will prWabirieqUire reinforcements from the UK in order tO eeery out their major campaign against Comeunist-directed terrorism in 'ere's, a direct reeuett for US assistance is unlikely unless the situation eeiously deteriorates. The local Communists, predominantly Chinese, are not capable of over- e-eueing the existing governmentas some British authorities have claimed Loy are trying to do, although it is undoubtedly their ultimate objective. Yt nepears that the Communists have resorted to violence because they felt 'eat the British had decided to suppress, or severely restrict their activi- 'olea? therefore leaving then no alternative but to resort to an armed up- ieing. The Communists' more limited objectives, for which they are well- eeeipeedl are: (1) to embarrass and burden the British with the necessity ef undertaking extensive military operations; (2) to reduce or eliminate Ledieenous political opposition by direct action or intimidation. and (3) 25X1C to jeopardize tin and rubber production. to achieve these ends the 10-15,000 member ralaean Communist iar y eon ro s aooroximately 1,000 armed men organized into "killer bands" operating in the room populated areas, and some 5,000 well-armed and supplied experienced ?guerrillas in the jungles. The Communiste also have the support of members e/: various political and labor organizations which they dominated or in- fluenced before going underground. The British have the equivalent of one well-trained division made up of eeitish, Curka, and T7a3.4y troops with limited Air and Naval support, augmented by the police force of approximately 12,500 men. During the operations the Alloy population will, by and large, remain passive, while Fuomintang and tndependent Chineve will probably support the British, or at least maintain an attitude of tacit non-interference. The success of the campaign depends upon the British ability: (1) to clear the vital areas or Tialaya of terrorists by driving them into the hinterland, whichwill take oix months; and (2) to Prevent the infiltration of and sauegling of supplies to the terrorists over the Siamese border, and along the east coast, which will be a difficult task. 25X1c the final eradication of terrorist activities will take two or three years, during which time the mines, plantations andaines of communication will have to be protected against spot raids and harassment. Omens() of deee-seated political and economic grievances unrest in Tealaya can be expected to continue, regardless of the outcome of the current campaign. Nevertheless, swift initial success by British forces, which is a distinct Possibility, will result in the bottling up of most of the belligerents in the wild jungle areas, and will remove most of the immediate threat to the production of tin and rubber. 25X1C 25X1C Approved For Release 2 ETCIA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 SECRET Pending retirement of Prime ranister a gravates olitical situation. Although there are no indications tiiikt Prima Minister Makin Nu has altered hie decision to retire on 20 July, a postponement is a distinct possibility In view of the growing weakness of the Anti-Fascist Peoples' Freedom League (JPFL),, the government party. Apparently as a result of continued dis- enroement over Thakin Nuts leftist unity program apd the government's mili- tary campaign against the insurredtionary Communists, the Peoples' Volunteer Organization (FM) and the Socialist Party, the two major components or the WPFL, have split. This in turn has led to rivalries for the post of Prime -inister which appears to be precipitating the complete disintegration of AFPFL even though Thakin Nu may at the last minute be prevailed upon to eenain as Prine 7inister* The resulting political factionalism Will cause further unrest among ethnic minority groups, particularly the Farms, and unll create conditions favorable to the re-entry of the Communists into the government. Furthermore, the sustained political crisis is jeonardizing the produotion of rice upon which Burma's economy is based. In view of the recent trends which bring Burma close to political chaos marked by widespread violence, the local Conmunists, particularly if a major trend in world affairs favorable to the USSR develops in the near future, could emerge as the strongest force in Burma* SIAM ???????.-011.004. Phibul concern indicates seriousness of imminent crisis* Recent owl devegoPments in Siam indicate ihat anothei-erisis and shi t in 'power to probable and may possibly occur diming late July or early August. Political complications arising from the death of the late King Ananda has provided a key issue* Since the (ieath of Ananda in 1946, Elder Statesman Nei Pridi? forced to leave Siam after the November 1947 coup, has been aooused of being Implicated in, or at least of shielding persons involved in the assassination. Recently the Phibul Government issued a warrant for the arrest of Mai Pridi who at last report was in Shanghai. Prili may return to Siam before he is officially called to the witness stand, for, in the light of present in- conclusive evidence, it may be assumed that he cannot legally be convicted* If, however, "nee evidence based on recent investigations is introduced by the Government and Pridi should be in danger of conviction, it is possible that the more radical of his "republican-minded" supporters may react violent- ly, and indulge in terrorist activities* In ad(lition to the issue of the King's death, increasing dissatisfaction developing within the military as a result of the profiteering activities of Phibul's chief sunporter, Deputy Army Commander Ketch, may lead to a showdown between Phibul and anti-Kach elements and pro-Pridi supporters. Recent rumors of a full-scale coup d'etat against the Phibul regime, maybe an attempt by Approved For Release 2 : CIA-RDP79-01082A000100010012-6 Approved ForRelease 2001/08 A-RDP79-01082A000100010012-6 SIA" (continued) the anti.-Philut groups to effect a compro4ee with-the MAW, regime and at the same time secure a more accurate aSsessmentaet"aiemese as well as US and "V attitudes towards a possible overthrow of thia Ph1tp1 Governmentot Late reports indicate that Phibul has called out troops-to eetablish.roadalalocks end to guard his residence against possible attack. 741,17PPIMS Dissidents adopt "wait and see" attitude toward arms surrender. Some elements Erfiiv-drisrdia .ffuTa;iralia-p-Thria TaTio-rvirWilani?s Tinion now seem to have adopted a cautious attitude toward surrendering their arms and disbanding in return for recently granted ernesty. This attitude derives =.r1 part from the Government's failure to indihate whether surrendered arms are to be confiscated or merely registered and returned to their owners, There is also indication that many dissidents are awaiting concrete Govern- ment action to remedy agrarian abuses, as promised, before accepting amnesty0 rereever, a recent press report naming high-ranking Huks among the "hold-outs" may indicate that Huk leader Taruc,rho was recently seated in Congress, can- not wield the same effective leadership he was able to exercise in the field. In any case, because of the slomness with which implementation of amnesty is nroceeding, Presidentutrino will probably extend the period of grace which is now due to expire 25 Jaily. 'levertheless, the mere act of granting amnestyito the dissidents seems to have a salutsory effect throughout the disturbed.provinces oar central Luzon. Reiont repei.ts indicate that there has beers a sharp decrease in violence in the area Since amnesty was proclaimed .on 21 June, One provin- cial governor has staf,ed that peasants were flocking back to rice fields which have beR9,41bOut 405 idle for the past two yedrs. ASMALIA Coal mine strikes.aff2sttproduction and dpllar earnings, Although sce tEreatirtedThIe---ciay strike in all of the friim South ,'ales coal fields has Vic'tltd n averted, 12 mines are still idle and coal reserves in most Australian be""st4;s are non-existent. The stoppages which resulted from a dispute over r? clw4s for higher wages by men working with machine out coal 1n-5 New South r -ales mines have called for drastic cuts in train services, gas, and electricitya A Singapore report alleged that they were connected with recent disturbances in "pasya but thie was emphatically denied by the Communist president of the T:iners Federation. Nevertheless the stoppages have aggravated domestic shortages of steel, building materials, and other essential goods and have thwarted efforts to increase production for =mart as a means of earning dollars, 1M77 Z7ALAND Shipping strike affects dollar earnin s. A paraiysie of Auckland's "C" shipping facilities with consequent disruption of New Zealand trade has re- sulted from dissension between the 7aterside 7otkers and the 7aterfrant Industry Commission over the safety precautions on the Australian wheat ship, 1102naffy. Approved For Release 2 IA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26: CIA-RDP79-01082A000100010012-6 77 ZEAIATID (continued) ''.7he most recent development involved a US bound freighter which was forced o leave without carpo, reivesonting a half million dollar loss in New 7tniand for the Empire dollar Pool. Approved For Release CIA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010012-6 SECTION III. DIGEST OF IMPORTANT STUDIES AND ESTIMeTES II ? k 314. ? Entirely contrary to most prediotions, Quirino? President of ofr the Philippines since the death of President Rents on /5 April 1948e has made a surprising and highly commendable beginning as Chief Executive. When Roxas died, Quirino, than Vice-President and Secretary of Foreign Affairs, was generally considered to be it a state of political decline. The President had inoreasingly ignored him in tap state deliberations, and Liberal Party leaders were openly considering replacing him as Vioe- Presidential candidate in the 2949 election, When Quirino was elevated to the Presidency, many Filipinos frankly questioned his ability and qualifications. Although Congress/one leaders pledged their allegiance to him, and most of his oritios jumped on the Quirino bandeagon, there was much speculation as to how complete their allegiance would be. Fifty days after assuming office Quirino has made progress which few of his friends eould have conceded as possible at the time of his inauguratione Members of the former President's cabinet are still in office, but Quirino has their resignations and can act upon them when- ever he desires.? Meanwhile, he has strengthened relations with the cabi- net by announcing that he plans to delegate more'automeny to individual departments. Iemediately upon taking office, 4uirino cemented a close al- liance with Senate and House leaders, and the Congress, instead of challeng- ing the President as had been feared, entered upon a period of close and cordial relations with the Executive Office. Quirino had stated repeatedly that he is pledged to place the interests of the country above those of the party and is believed to be sincere. However? at the name time he has shown a realistic awareness of the need for tightening Liberal Party line. He is reported to have assured Liberal leaders that in making future appointments he rill bear in mind the intereats of the party. Quirino sedma to have achieved much initial popularity with the people. They appreciate his efforts to solVe the law and order problem, his attack upon greft and corruption withing the Government, his pledge of close rela- tions with the United Seatece his direct visite with the people, and he possible passage of the Philippine Veterans' Bill in the US Congress. The 1. B/FE Comment: This is Estill the situation, almost throe months after Quinine assumed the Presidency. 2. B/PE Comment: Since thie dispatch was written, Quirino has iseuod and Congress has approved a proclamation granting amnesty to the dissident Rakbalahap and its political affiliate, the National Peasants Union. The Philippine Veterans Bill as finally enacted by the US Congress 'was signed recently by President Truman assuring hospitalization benefits to Philippine veterans. The Philippine press has given Quirino ample credit for his mork on both problems. Approved For Release 2S : CIA-RDP79-01082A000100010012-6 Approved For Release 2001/08/26 ? -RDP79-01082A000100010012-6 . 13 TAain press criticisms of the Presidolt thus far are that he is lazy, ?a poor administrator? and lacking in v.ial understanding of the duties of the PresidencT. Although some news ioiunnists are unfriendly to hin? ;lost seem to be giving quirino an ollortunity to prove himeelf In office0 lath the 1949 presidential eleclons only a little more than a year away, there is much jockeying for pcdtion. President Alirines health is one or the most important considt .ations with respect to his re-election. Vany politicians feel he 10 unequal o serving another Dill term. Other possible Liberal candidatcA are Cers P. Rona? and the Senate President Avelino. Among the oppos,tion? Jos ,4 P. Laurel is still the most frequently named. T./144.4;19_Altr.,1 a.gpAAlsantglawa,L, ADA:m=1ml f. Embasay, lanila? Dispatch No. 551 ? 5 June 19481 CONFIDENTIAL Approved For Release T: CIA-RDP79-01082A000100010012-6