INTELLIGENCE HIGHLIGHTS - WEEK OF 20 APRIL - 26 APRIL 1948

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01082A000100010023-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 12, 2016
• Document Release Date: June 13, 2001
• Sequence Number: 23
• Publication Date: April 26, 1948
• Content Type: PERRPT

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T DOCUMENT NO.
,ICE OF REPORTS AND 8STIl7ATES,
FAR 2ASTf'ACIFIC BRANCH
CHANGE IN CLASS. ( 1
DECLASSIFIED
7,';S. G; IANGE17 TO: TS 3 C
,'EX REVIEW DATE:
L.,, `f~c:vli~1NER; al0W4x
INTELLIGENCE HIGHLIGHTS - WEEK OF 20 APRIL- ? 26 APRIL 1948
Chinese National Assembly demands "hard" peace for Ja
spite recent tateementby Chnese National overnmsnt officials
indicating; support for the US liberalized rehabilitation program for Japan,
the Chinese National Aeeemblyat Nanning on 21 April, passed a 14-point
resolution on the Japanese peace treaty which reflects continued popular
fear of a resurgent Japan. The resolution, providing for the retention
of the veto by the Big Four in a conference to be held in China, calls for
the abolition of the emperor system, the destruction of the Japanese
military industry including metal and chemical industries, limitation of
Japanese industrial capacity to the 192830 level, restriction of Japanese'
imports, prohibition of a Japanese army, navy, air force, or secret police,
limitation of Japanese territory to four home islands and a purge of text-
books and imperial institutions. At the same time the resolution oalls
for acknowledgment that China suffered most in the war and the granting to
China of 50% of total reparations. The resolution also asks for the cession
to China of the Ryuku Islands. The resolution further demands that Japan
be controlled for 50 years by a Four-Power control organ, and that, Allied
troops continue in occupation of all principal Japanese cities.
Constitutionally the National Assembly does not have the power to
determine national policies, nor do its resolutiolis bind the Government.
However, as an expression of the majority view of some 3,000 Assemblymen,
chosen by direct election, this resolution clearly indicates that, official
assurances to the contrary, sentiment favoring a "hard" peace with Japan.-
is deep-seated among politically-articulate Chinese.
Southeast Asia Lea ue currently inactive
ce UIS amese coup dwetat o ovember 1947, activities of the
Southeast Asia League have apparently been suspended because of the
Aphaiwong Government's disinterest and the marked antipathy of the
succeeding Phibul Government towards the organization and its leaders.
(The League is a loosely-orgar.ized Southeast Asian federatioi formed in
Bangkok in September 1947 by "representatives" of Siam, Vietnam, Laos,
Cambodia, Indonesia, Malaya and Burma.) Premier Phibul opposes any such
movement on the grounds that it could be a vehicle for Commmmist or
Chinese penetration. With the recall to Indochina in Deoember 1947 of the
League's Vice-President, Tran Van Giau (Bangkok representative of the
Viet Minh), the Communist flavor of the League was markedly reduced, but
it still retains a left-wing label. Because of the extremely unsettled
conditions in-Burma. it is not anticipated that League headquarters. will
be moved from Bangkok to Rangoon, as was rumored, nor will its activities
in Bangkok be increased in the near future. It has been further reported
that the reoently-arrived Soviet diplomatic representatives in Bangkok
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GENERAL (Continued)
have not as yet approached the reinain.:+_nrr key menbersof tbr; Lea? U20-
Nevertheless, it is likcly that effective Soviet contact the n ague
will be established a.f a projected a eorge..fli7ation takes P1a. = and
conditions favorable to a transfer to : angoon develop.
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Korean rioting in Japan. On 26 f!pril Jttpaunese pct. assisted by
1J ooeuz a on troops qu~ - lUr a scale ri.ati! g by ,evil rc:! thousand
Xoreans in the port city of 1. obe. The3e riots had developed as a result
C?:.>?t?r +tcvt ,. ' neze prefectures. a t'!or t ~._ is to withdraw
tl~! 8t~itwts to v v....rtrict enforcement of national rogulatie:: regarding
educational irstituti r ns, full application of which t ttt `fo.'eans alleged
would unjustly discriminate against Korean attempts t~, c.:,nduct their own
schools. The incident in Kobe follows vd.thin a week similar incidents
over the some issue in Okayama Prefecture.
Subject to notorious discrimination by the snap?ne: a hefore the
surrender, the Koreans in Japan have been extr:-.ely stnslti.ve to continued
social and economic discriminations and to allege-4 revivals of police state
treatment and have claimed that as "liberated persons" they were above
Japanese jurisdiction. Early in the occupation, however, occupation
authorities warned that Koreans who forfeited the privilege of repatriation
were, like other non-United Nations, nationals, subject to all appropriate
Japanese laws and regulations.
ost Koreans in Japan are united in their interest i;: the establish-
ment of an independent Korea and the protection of the rights of Koreans
in Japan. Nevertheless, reflecting the divisions exiotine in Korea itself,
they are sharply divided over the tactics and methods by which these
objectives may be obtained. In contrast with all other political parties,
the Japan Communist Party has actively championed the cause of Koreans in
Japan. T t has exrloited to the full the opportunity to uphold the rights
of "oppressed minorities" in the case of the Koreans. It also has exerted
a maior influence over the largest organization of Koreans in Japan, the
Zainichi Chosenjin iZernei, through its Korean Communist leaders and has
surforted the establistnent of separate schools for Koreans many of which
were exclusively devoted to 'the inculcation of Communist ideology.
Since Korean schools cannot moat Japanese require^msnts, application
of the School Education Law would force their closure. Korean leftists,
bitterly opposed to such a development, have, with the probable support
of the JCP,.actively promoted the current agitations.
It is of interest to note that the Japanese have had the authority for
and the capabilities of dealing with .the Koreans in Japan on this matter
for well over a year. However, it is only at this time and only with
open SCAP cooperation that the Japanese have taken official action against
the Koreans.
First Loan against OJEIRF reported. The US Export-Tnport Bank has
announced that it will J9 1n a. private banking syndicate in making, a
t60,OOO,000 loan to finance shipments of U3 cotton to Japan. The Export-
Import Bank will furnish "29,000,000 of the credit and the remaining
X31,000,000 will be furnished by the private banking syndicate. The bank's
statement said that Japanese mills are to make textiles from the cotton.
Forty percent of the cotton cloth will be consumed in Japan and the rest
will be sold in Japan's prewar export markets.
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The loan will be the, first to be made against the 'Ioccupied Japan
export-import revolving fund" (OJEcitF), set up last August to finance
purchase of cotton in Japan. Originally, the revolvir:S' fund consisted
of x'137,000,000 worth of assets of precious metals, owned by the Japanese
Government and not definitely subject to restitution. Ilowever, the
Fbcport-Import Bank has announced that the fund now consists of `'3014.,000,000
in gold, ,1'.18,000,000 in silver and "378,000 in US cash, all of which was
turned over to the fund by occupation authorities.
Possible ratification of "Cons ti. tution" for North, Korea. After
repoa postponement o act on on the ra t 1irovi si onri orstituti on,"
it has now been announced that on 28 April the Korth Korea People's
Council will meet in extraordinary session to discuss further this draft
constitution of the "Democratic People's Fepuablic of Korea."
The timing is such that if ratification takes place on the 28th, as
is now expected, there will be the fullest political impact to offset the
significance of the elections in South Korea. The current `'ovi.et-sponsored
north-South "unity" conference offers an opportunit.i for presorting for
ratification a constitution incorporating the "ideas and recommendations
of democratic elements in 5euth Korea." Tn addition, ratification of the
constitution in its present :fora will pso facto establish a provisional
Coverrnsent of "all" Korea with a tc:porar; capitol in i' ?onf: ^nw.
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there were further indications last week tint the Coi:uw.nists are about
to launch their s,,ring offensive in Lanchuriao They tier busily completing
repairs on recently captured rail linen, paarticularly in the Ilsinlitun-Tahushan
and the Anshan areas, Although the min body of Lin Mao's troops were in
the region between Tiehling and Changchun and capable of striking. in either
direction, new concentrations of Conwunists were reported near Ihsien just
north of Chinehou and along the Great Nall mounter paases,.~ It is possible
that these latter forces y boron 'the initial srtr-O! ng force in the new of-
fensive, attacking the Nationali.et salient along the Peiping- aukden railroad
from Tientsin to Cidnabouo Recent Corazainiet action in the Tatung-Kalgan
sector forced the lfttit 1imts to redeploy the forces which ' would have been
used to counter such a blo , These units are still vainly groping for the
mein body of the attackUg Cor inists, Irregular Nationalist forces penetrated
into Communist territory south of Tientsin, captured several Cviarist bases,
but- have apparently been forced to withdraw,
The Nationalists, in line with a newly enunciated policy of evacuating
points "having little strategic irportance", announced that Tolun, in Chahar,
and Yenan, the ox-Comnunist capitol,la.d been abandoned, The loss of Yenan,
occupied by the Nationalists in t;arch 1947 with no little fanfare, represents
(as did its capture) mostly a psychological change, It is, however, at least
symptomatic of a general worsening of the Nationalist picture in Shensi, where
]ate Communi.et moves have resulted in the interdiction of the important Sian
Lanchou highway,, and a threat to Sian itself. Communist forces in Central.
China continue to move in a general northwesterly direction; units are presently
active in the Han River basin of the Hupeh-Shensi border region where they
have taken Yunheten and Hsunyang, near Ankung,
Political
vice-presidential election now in process in the National Assembly
has widened the split within the Kuomintang, After the first two ballots in
which Li, Taaung-jen carried a substantial lead over Sun Fo with Cheng Chien
trailing in third place, all three candidates withdrew their names from the
ballot0 General Li charged that, despite the Kuomintang announcement that it
would be an open election,, the Party had given its support to Sun Fo. Sun's
supporters attempted to discredit Li. by charging that he planned a coup d'etat
if elected. An attempt is now being ria,de to persuade the candidates to run
again, Li. Teung-jen, considered a "reform" candidate, has drawn mach of his
support from those factions dissatisfied with the old guard. His election in
the face of Kuomintang opposition would indicate a show of independence on
the part of the Assembly delegates and a defeat for the Generalissimo, who
appears to be backing Sian Fo behind the scenes, If Li should be defeated he
flB7 be expected to continue his drive for reform while some reports intimate
that he might even attempt a military coup although at present the latter ap-
pears unlikely.
Apparent acceptance by Chiang Kai-shek of a program of land redistribution
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reflects the uczrenoss of the Chinese National Government that po3itivo mea-
sures of agrarian reform can -no to ;cr be postponed wt=;hout :Loss of the al-
legiance of the pea ant population to the. Con mists, `', t?1 T-cogra? ,' endorsed
at a recent meeting of Central Cs ni.l5: ary and civil nt=lorities p authorizes
the redistribution of all land in excess of fi m u /: `. `. ;'1tly less than one
acre) per person in areas recovered from the "Orm'-uiiist3 cr in danger of Ccm-
namist infiltration, To conference also recornended th~