WEEKLY INTELLIGENCE SUMMARY NO. 72

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000300060008-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 9, 2016
• Document Release Date: January 29, 1999
• Sequence Number: 8
• Publication Date: July 26, 1949
• Content Type: SUMMARY

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OFFICE W REPORTS AND ESTI!."ATES
Weekly Intelligence Summary No. 72
Section I. SU&S' "ARY OF TRLMDS AND DEVFIO MENJPS
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26 July 1949
The successful conclusion in Leningrad of impending negotiations
for a proposed interline air freight agreement between American Over-
seas Airline (AOA) and the Soviet air carrier, Aeroflot, might open
the way to conclusion of similar agreements with other US carriers.
(.item No. 2, C)
The Chinese Communists continue their efforts to restore inter-
national air service from Shanghai to Hong Kong. The U. S. Govern-
ment, meanwhile, has made representations to the UK and France in
connection with a possible corn=r;on front against the premature re-
storation of air services to Communist China. (Item No. 3, A)
A reported Communist plan to interrupt shipping in the Far -Cast,
if it materialises, will probably take the form of strikes ~-.:' and; dock
workers and sabotage of cargoes in storage and transit. If the plan
in fact exists, it is apparent that its objectives have been del.iber
ately selected to cause the maximun ombarassment to both the US and
UK. (Item No. 4, B)
A dilator?! Soviet attitude is impeding progress on a co= yprehensive
highway development program within the Econo -:ic Coru*iission for Europe
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SECTION II CURRJ T DEVELOPMENTS
CIVIL AVIATION
The successful conclusion in Lenin lad of iripen,iing negotiations
for a proposed interline air .frei ht agreement between A.nerican Over-
seas Airline (AOA) and the Soviet air carrier,, Aeroflot, Might open
the way to conclusion of similar agreements with other US carriers.
(Aeroflot is currently negotiating a similar arrangement with the
Scandinavian Airlines System..) The .)roposed arrangement would have
a duration of six monuhs, including the period of the Leningrad fur
auction:, during which furs would be flown from Leningrad to Helsinki
- is Aeroflot and thence to New York via AOA. Although fortivar 'sing of
freight by this means is already possible, the contemj:lated agreement
would facilitate the handling and transfer of cargoes at Helsinki,
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and regulate certain foreign exchange procedures. It would not re-
sult, however, in any extension of the routes already 'flown by the
US and Soviet carriers. Should Soviet authorities permit Aeroflot
to conclude this agreement with AOA, thus marking the first such
arrangement with a US carrier, it is possible that similar advantal;
eous trade opportunities at other points served by both US and Soviet
carriers, such a: Berlin, Fra?ue and Vienna, right induce the USSR
to approve further inter-line arrangements with US carriers. (SECZT)
restore informational air service rom ; han ai to IIotxg Kong. Their
objective also envisages control of an extensive internal air net-
work in Communist China,. During recent negotiations, undertaken at
the initiative of the UPS carrier, Northwest Airlines (NINA), Chinese
Commun..ist officials suL fitted a written proposal covering both dom-
estic and foreign services, to bo operated for the Communist rejime
by NV A. Implementation of the pro ,osal, which Included establishment
of a service to Hone Kong, would have, drastically reduced the effect-
iveness of the I'ational st blockade of Shanghai and seriously affected
the remaininj authority and, f restige of the Nationalist Government.
At the request of the US Lopart vent of State, however, 177A has broken
off all negotiations with the Communists. (Actually via: refused
the requisite 3rittsh permits at Ion ? Kong., )
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dock workers and sabotage of cargoes in storage and transit. Accord-
ing to a very reliable source, the Communist action was scheduled
to start in July, with strikes at Kobe and Yokohama to be instigated
by recently repatriated Japanese prisoners of war. (There have been
no indications that these strikes will actually be called during
July.) The second phase of the campaign, according to the report,
will start in. Manila in August, 1 pile Hong Kong will. be struck in
September and Singapore before the and of the year. If the plan in
fact exists, it is apparent that its objectives have been deliberately
selected to cause the maximum embarassrtent to both the US and Uh.
While there is little doubt that the Communists are capable of
causing considerable disturbance in the whole area by strikes and
sabotage, it is not certain that the effect of such action would be
decisive. The Communists can not count with certainty, for instance,,
upon cooperation from all ship's crews. The large vessels now oper-
ating in, the areas in question arc preponderantly British, Scandin-
avian and American, and it is unlikely that militant Communists are
sufficiently strong to cause actual tie-ups of such vessels. Further.
more, under maritime law the ,casters of vessels are empowered to re-
quest assistnace in quelling strikes which endanger their vessels.
It is iciprobablc, therefore, that there will be mercy disturbances
aboard ships.
v:ith respect to dock workers, the Communist af-ility to promote
strikes will vary considers ly from one area to another. I'thile it
is unlikely that SCAP will tolerate serious stoppar;e in Japan, the
Communists could probably tie up "anila as effectively as they have
Honolulu, for ex ~:ple. At Hong Yong, the present strong show of
British force suggests that any slow-down or sabotage will receive
summary treatment. British action, however, might be emasculated
by Communist infiltration and threats of retaliation upon non- coop-
erative workers.
Both the Communist course of action and its effectiveness will
probably be determined by the future status of merchant shipping in
long 14ong. If Shanghai remains closed to larger foreign vessels by
the Nationalist port closure order, much of the shipping out of Hong
Kong will consist of srall Chinese vessels transporting critical car-
goes to the Coctnunists with which they would probably not interfere.
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A reported Communist plan to interru
t shipping in the Par Bast,
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A fine and. successful British stand at Hong Kong would substantially
reduce the prospects of a Communist shipping strike at Singapore.
The remoteness of Singapore from the Communist centers of power, more-
over, might also adversely affect the Communist action. (.SECRET)
5. A dilatory Soviet attitude is irapendin . progress on a comprehen-
sive highway development program within the Economic Coamnisaion for
Europe (::,CE). The study phase of a proposed international European
road net, conducted by the Highways working Party in the Inland Trans-
port Committee (ITC) is approaching coiapletion. The proposed network
consists of 23 major traffictarteries with 60 branch or feeder lines
which are to be brought up to agreed international standards and spec-
ifications. While autobahn-type construction is not projected, the
roads will qualify as first class highways.
Although ECE has offered alnost the sole remaining forum within
Which the Satellites have cooperated with the west on concrete pro-
jects in a more or less cordial stmosphere, it is notwiwrorthy that
in this case they have not released reports to the working party
sub-committee. There is little doubt that the information requested
by ECE is known to these countries. Apparently, however, the USSR
prefers to withhold from the West all data which might shed light
on road transport in Soviet-controlled areas, in spite of the fact
that highway development would bring in some respects a relatively
!'treater advantage to the Satellite countries than to '7estern Europe.
Reports were received from the U1( and nine 71estern i?:uropean
countries covering 601% of the total network. The cost of construct-
ion in these countries, to allow ten tons per most heavily loaded
axle, was estimate at iA,855,000,000 and an additional $77.5 million
if the roads are built to support 13 tons. The following countries
in which the remaining 40 of the proposed network is to be located,
have not reported: Bulgaria, C;;echoslovakia, Fin end, Soviet Zone
of Germany, Greece, Hungary, Luxembourg, Poland,, Portugal, Sweden
and Yugoslavia.
Further cost and traffic information is to be obtained from each
country, which will enable ITC to establish a program covering pri-
ority of construction with knowledge of the material,. labor and equip-
m?nt required by each cotn3.try. Although the financing of these im-
provements has been reserved for future study by an ITC ad hoc working
party, it is probable that in some OEEC countries the construction
may result in requests for release of ECA funds or material and labor.
The US delegation to ECIS suggests that any release of such funds should
be approved with the understanding that the recipient will support the
establishment of an international European regime which assures free.-
dom of -movement for commercial vehicles between countries. Plans for
such a regime are now under study by TEE at Geneva. (SECRET)
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