WEEKLY INTELLIGENCE SUMMARY NO.84

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000300060020-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 9, 2016
• Document Release Date: January 29, 1999
• Sequence Number: 20
• Publication Date: October 18, 1949
• Content Type: SUMMARY

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OFFICE OF REPORTS ND ESTIVAT.mS
TRANSPORTATION DIVISION
Weekly Intelligence Summary no. 84
SECTION I. SUMMARY OF TRENDS AND DEVELOPMENTS
18 October 1949
Despite some evidence that the USSR is expanding civil air trans-
port operations into China, Communist transport officials appear eager
to discuss the re-establishment of domestic air comrmunications ~,~iLt's
representatives of US airlines. These officials are particularly
anxious to institute regular air services between Peiping, Mukden. and
Harbin in the north and Shanghai in the south. Certain US air
interests, moreover, are promoting such plans in the belief that they
will secure a preferred position in China= s future civil air program.
(Item No. 1, B)
Chinese Nationalist authorities appear unwilling or unable to e a_
force their 4Wclosure" of the port of Shanghai with respect to US- flag
shipping, The US Embassy Office, now located at Hong Kong, has re-
ported its belief that the Nationalist Navy (which is controlled ?rom
Taiwan by Chiang Kai-shek) may have released two previously detained
Isbrandtsen Line vessels without Foreign Office approval or knows edge,
Meanwhile, a third vessel of this line has successfully defied the
closure, although it was halted by gunfire and temporarily detained by
an intercepting Nationalist naval craft. (Item No. 2, A)
A progran of road construction and surfacing in Venezuela, under
which the extraordinary sum of 130 million Bolivars ( 39 million) has
been appropriated for the ten months ending June 1950, appears designed
principally to attain certain political ends, despite the countrye s
great need for improved transport facilities? (Item No. 3, C)
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CLASS. GHANGEOT o'.
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SECTION II, CURRENT DEVELOPMENTS
CIVIL AVIATION
la Despite some evidence that the USSR is expending civil air trans.-
port operations into China, Communist transport' officials appear eager
to discuss the re-establishment of domestic air communications with
representatives of US aairlinas. These officials are Particularly
anxious to institute regular air services betw7een Peiping, Mukdon, and
Harbin in the north and Shanghai in the south. Certain TJS air interests,
;ioreover, are promoting such plans in the belief that they will secure
a preferred position in China's future civil air program.
The USSR already has a unique advantar eo over other countries in
respect to Chinese air transport,, by reason of the recently renegotiated
air agreement with the Nationalist Government, which will undoubtedly be
recognized by the Corn-nunist officials at Peiping. This agreement
stipu,1ates that a joint Sino-Soviet airline shall enjoy a monopoly of
air cargo and passenger operations in Sinkiang Province. (In practice
the airline is managed and operated by Soviet personnel- ) This route
has now, according to reports, been extended 700 miles east to Lartchm,a,
I
It is also reported, as yet without confirmation, that trained
Soviet airline personnel are being sent to Peiping to prepare facilities
for expanded Soviet air services, possibly from Chita through Harbin and
Peiping to Shanghai. An air connection from Lanchow to join this roll,
perhaps at Peiping or through Hankow and Nanking, would be a reasonable;
assumption.
A possible e: laanation of interest shown by Communist officials at
Shanghai and Peiping in US-operated internal air routes may be that
(1) the USSR is either unwilling or unprepared at this time to operate
a domestic air network for the Chinese Communists, but is desirous of
establishing satisfactory communications between key points in China
and the USSR; and (2) e=xpert technical aid is urgently needed by the
Chinese Communists for the rehabilitation of domestic airfields and
operation of scheduled services. (Confidential)
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P. Chinese Nationalist authorities a ear unwilling or unable to en-
force their closure of the port of Shanghai with respect to US-flag
shipping.
In connection with the release of the FLYING CLIPPER .and PLYING
INL}EPENJ)ENT, the Isbrandtaen Line cargo vessels which were intercepted
and detained upon their departure from Shanghai (see D/Tr Weekly No.
83), the Foreign Office has stated that they were allowed to proceed
on grounds of :=expediency". The Nationalist action allegedly resulted
from Foreign Office concern over cables from Chinese Missions at Seoul
(presumably regarding the ECA cargoes for Korea and about 120 Korean
refugees aboard the FLYING INDEPENDENT) and at Washington: During a
discussion with US representatives on the day following actual release
of the two vessels, however, a Foreign Office official made no mention
of their release, and two days later the Foreign Office was still un-
able officially to inform the Embassy Office regarding the action.
These circumstances have led the Embassy Office to believe t1a. t the
decision to allow these two vessels to proceed may have been taken by
the Chinese May independently of the Nationalist Foreign Office. The
Nationalist official declared, however, that the third Isbrandtsen
vessel, the FLYING TRADER, which had slipped into Shanghai following
the interception of the other two vessels, would be intercepted by the
Chinese Navy when it attempted to depart Shanghai. (A fourth Isbrandt-
sen ship is scheduled to arrive shortly.)
The only details now available concerning the subsequent detention
of the FLYING TRADER are those radioed by the ship's Master to the
Isbrandtsen agent in Shanghai. According to this report, the vessel was
halted by gunfire from a Nationalist warship and ordered to anchor, after
the Master had ignored previous signals from the naval craft in accord-
ance with standing orders from the vessels' owners. The warship
anchored close by, awaiting orders from the Nationalist Goverment, The
following morning, however, the naval vessel gave the signal to depart
and thereupon left the scene. It is not yet known whether the Foreign
Office was consulted regarding the FLYING TRADER's release.
In view of the disintegration of Nationalist authority, it is
probable that action in both interception incidents was taken by the
Chinese Navy on direct orders from Chiang Kai-shelt, irrespective of
Foreign Office policy. This conclusion is supported by the fact t-et
the Chinese Navy is directly controlled from Taiwan by Chiang, who has
a continuing interest in the maintenance of favorable relations with
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both the US and Korea, particularly the latter. Moreover, it is known
that an appeal from the Chinese Ambassador in Korea for the release of
the FLYING IND1'I210111T and FLYING CLIPPER was made directly to Chiang,
as well as to'the Nationalist Foreign Office.
Regardless of the origin of the Navy' orders, it appears that the
Nationalists have chosen merely to demonstrate their ability to inter-
cept "blockade-rearing" vessels without risking the consequences of a
more serious incident involving US-flag shipping. There is no indica-
tion, however, that vessels of other countries would escape more
drastic Nationalist action. (The cargo of an intercepted British
vessel, for example, was confiscated by the Nationalists some time
before the first two Isbrandtsen vessels were detained. Despite this
incident, at least one more British vessel is reportedly scheduled to
arrive at Shanghai in the near future.) In any event, the Isbrandtsen
Line's successful defiance of the Nationalists has substantially
weakened the effectiveness of the Shanghai closure declaration and may
also prejudice the ability of the Nationalists to apply the closure to
other coastal cities, such as Canton, Swatow and Amoy, which have
recently been occupied by Communist forces. (Secret)
S. A r?gram ?of road construction and surfacer, in Venezuela, under
Which the extraordinary sum of l30 million. Bolivars 03:# million) has
been appropriated for the ton months ending June 1950, appears designed
principally to attain certain political ends, despite the country's
great need for improved transport facilities.
The road program includes 625 miles of construction and reconstruc-
tion, and 500 miles of surfacing. The major item is improvement of the
central highway route Which runs northeast and east along the Andes
Highland from San Cristobal, near the Colombian border, to Caracas.
From Caracas, the highway runs southeast on the Llrxn.orl Plain to
Soledad, which is across the Orinoco River from Ciudad Bolivar. Improve-
ments will also be made on branch highways leading from this central
highway to other portions of the Llanos, and to the Caribbean lowland
on the north.
The stated purpose of the proi,ram is to relieve unernploymt3nt