WESTERN EUROPE DIVISION OFFICE OF REPORTS AND ESTIMATES WORKING PAPER DIVISION WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400030008-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 8
• Publication Date: February 28, 1950
• Content Type: PAPER

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'ESTERPM EUTZOPE DIVISION
OFFICE OF REPORTS AITD ESTIMATES
CE1TRAL INTELLIGENCE AGENCY
V 3 RKING PAPER.
DIVISION WEEKLY,
NOTICE: This document is a working paper s
UT an official CTS issuance o It has been
co-ordinated within ORE,, but not with the
IAG Agencies It represents current think-.
Ing by specialists in CIA, and is designed
for use by others engaged in similar or
overlapping studies. The opinions expressed
herein may be revised before final and offi-
cial publication, It is Intended solely for
the Information of the addressee and not for
further dissemination.
DATE: 28 February 1950
DOCUMENT NO.
NO RANGE IN CLASS. FJ.
DECI AS ,!FLED
C _A`?.`.,, Ci1x,N 3ED TO: TS S C
NEXT REV -,N DATE: T
E U 'I(( REVIEWER: 372044,,,.,
UATE. /(J
DA
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VOLn VI - No, 8 Poor week ending
25X6A 28 February 1950
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3Etor ET
25X6A
B Pros acts are favorable for increased Austrian ri
cultural, roc uc won ur "h 1e na "`two~_w~ears progress
ac$i eyed n-I as a resin o unusually' #`avorable weather
conditions, receipt of EGA agricultural supplies, and .agri,
cultural decontrols which stimulated production will probably
be maintained. The agricultural Improvements in 1949 represent
the turning point in overcoming the devastation wrought upon
farming by the War a Agricultural programs can now be directed
toward long-term goals, and special emphasis can be given to
improved crop production, increased livestock herdsp greater
productivity, and farmer education..,
Although the Austrian agricultural goa1a were ex-
ceeded in 1949, namo fundamental problems remain. There is a
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SEC ? E T
need for some re-distribution of land and greater consoli-
dation of land holdings g but this problem is not acute p and
definitive action is unlikely under the occupation. The
comparatively few large estates requiring re-distribution.,
and the agricultural areas not utilized at present lie in
the Soviet w ne , and many were seized by the USSR as Getman
external assets. Some land re-distribution, however, has been
undertaken by landlords who have unloaded holdings at more
favorable terms than would be probable under land-reforn leg-
islation. Limited consolidation of land holdings Is occurin;
under Federal auspices.
A more pressing problem is the shortage of agri-
cultural workers, for Which no immediate solution is foreseer'.a
There has been a steady exodus of workers from the farms.
Although the effects of this exodus have been somewhat offset,
by the availability of approximately 60.9000 DP and repatriated
POW farm laborers, an acute shortage of some 20,000 to 259000,
farm hands still exists m Governmental efforts to ameliorate
this shortage have not been successful.
The French have virtually no reserves to step
up their of- 'oca; n.'=t Ho Gnu nE Ths~ye ores the
presence of the Chinese Communist troops on the Tonkinese
frontier,, with the consequent possibility that Ho Chi Minh
may receive substantial aid, has confronted the French with
an urgent need for stronger forces if they are not to be
forced out of Indochina. Because even the suggestion of an
abandonment of Indochina. would cause grave political
disturbances in Prance, the Frencha will heighten their efforts
to obtain speedy US military and economic assistance, and
continue to urge that the US,, 'K? and France adopt a common
Par feast policy,
The3 present extremely ~ l w rcentaf!e of trained
regular trootns on du r i the French Army in Europe ^ .
prevent ef1?icient use of the Jj'.D}AP materiel due to arrive
shortly from the ITS, With the asst gnment of regular troops
to Indochina, where their presence is imperative to face the
Communist threat,, and after various headquarte s, staffs,
and schools ha-re drawn allotments, the percentage of
regulars to conscripts in trooe. units has dropped to less
than ten percent. The insufficiency of trained personnel is
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S E C R F T
further emphasized by the short conscript period of one
year, and by the fact that army units consist of an. equal
number of new recruits mid those having; served six months.
No action has been taken to.improve the situation by an
extension of the conscript period,
The decree to raise wages 10 percent in the rind s.
cities of un s a and rive percenf a o er areas, which
Me- rrene Resi envy has presented for the Bey4s approval, will
probably have to be revised upward before it will be accepted
by native authorities.
The labor situation in Tunisia has become increasing-
ly tense, It is affording the nationalist Neo Destour Party
and its affiliated labor organization (the UGTT) an excellent
opportunity to organize grassroots nationalist sentiment among;
the natives, and further to discomfort the French administration,,
An increased feeling of solidarity among the native leaders
is reflected in the fact that the Bey? under Neo Destour
pressure, has refused to sign the decree offered by the French.
Residency.
Native tempers are short at the present time.- Agri-
cultural workers are being paid 180 francs (about 50 cents)
a day and the proffered five percent increase for them was ob-
viously inadequate, Moreover, native resentment has been
stimulated by a French ban on a meeting to protest the Govern-
ment's wage action, and by the killing of a worker by the police
in the course of an attempt in January to break a month-old
agricultural strike.
Residency authorities in Morocco are formulating
plans to ensure that any co wee witch might be dispatched
by the UN to examine social and economic conditions in French
North Africa will see only "the right things". These officiaia
are confident, however,, that France will be able to stifle in
the making; any UN move to send out such a committee,
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V S E C R E T
B The pessimism of Italian businessmen regarding the
economic ou look n`T ai va~ ;row un e`sa countermeasures are
effectively undertaken by the Italian Government? The Bank
of Home points out that, despite Government optimism on busi-
ness conditions, current business behavior is motivated by
prospects of a recession.
As evidence of the danger of recession, Italian
businessmen note: (1) that the drastic fall in the wholesale
prices of agricultural produce (a 20% drop during, the first
nine months of 1949) while retail prices have held, has re-
sulted in a large contraction In farmer demand for consumer
goods; (2) that producers' inventories have been increasing
since March 1949, and in January 1950 stood at 30% above norma.''.,
while retailers are at the same time reducing stocks to min-
imum levels in anticipation of further price declines; (3) the;
since the beginning of December 1949,9 plants have been cutting
down working hours, and that unused industrial capacity is
on the increase; (4) that Italy's foreign trade position,
already adversely influenced by the foreign currency deval-
uations of September 1949; will be further injured by the
liberalization of intra-European trade unless sane solution
to Italy?s unemployment problem is found.
The Italian Government is seeking to correct these
conditions by an expanded investment program for 1950 cover-
ing all fields of the Italian economy.' In these efforts it
will be aided this year by larger releases from the lira
counterpart fund, and by the increased tourist receipts of
the Holy Year. It is doubtful however, that the full invest-
ment program of the Government can be effectively implemented,,
B Italian economic coo eration with the US will be
impaired i is GGovernment ai s"- o~il1 lie -,ai~tns
of s reparations agreement with Italy. Probably the main.
appeal to the Italians of this agreement of 31 August 1949
was the promise of the award of contracts for the construction
of electric rower plants in Greece. One of the few major
fields In which Italy may be able to compete with other
countries is in the production of electrical equipment. Avow
the Greek Government has announced its decision to award
these contracts to a ITS concern. The Greek Fo,'oign Minister
admits that this decision is an "alteration or violation" of
the reparations agreement, and the Italian Foreign Office is
taking the attitude that the decision will car.plotely
paralyze Italy's implementation of the reparations agreement:.
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The Italians are particularly disturbed by the
information that the Greek action followed the "request in
very definite tetras" of the TEA ?' ission in Athens,, This
situation may have an-adverse affect upon the Italian
attitude toward the ?;r?;, and in particula-- toward the ECA
proposals for. inc nerved liberalization of trade among the
CEEC countries., Italian busine:.smen and Itali?ii Communists
will cite the Greek decision as evidence that the T--,('A
campaign for freer trade is only a blind to pronote US
business interests?
eastern Europe,, where the Communist Governments seek to control
the Church and to derive prestige therefrom.
association of the Orthodox Church.with the-USSR and Soviet-
dominated governments. The Vatican increasingly fears the d
velopment of what the Catholic press calls caeearo-papism in
backing off from its previous intransigence, The Roman Curia-
is said to be seeking a means whereby more extensive cooper-
ation with Protestants will be possible on both civil and
ecclesiastical levels. According to reports & the Vaticant s
official ecclesiastical bulletin will soon publish a declaration
in support of Christian reunion modifying present restrictions
upon theological discussions between Roman Catholic and non-
Catholic groups?
Even toward the Eastern Orthodox Church, the Vatican
is now pursuing a policy of avoiding recrimination or argument.
It is unlikely, however, that these two groups can be brought
together in the near future, particularly in view of the present
been the topic of discussions between the Holy See and the
Egyptian Government.
With regard to Protestantism. tooo the Vatican is
ib1Uity of a "united front for trod". This subject has alreact),
Ing.the Communist threat to religion,, and points to the poss-_
Vatican collaboration with other r?el1~ious4 rou s~
in the fi;aginstc~aignuism R3a increasing ely. The
Holy See evidently now believes that the world crisis is ser-
ious enough to warrant a- degree of subordination of the
doctrinal differences between Ronan Catholicism and other
religions in favor of a united :rorit of various religious
groups against "atheistic materialism"o
To this end a recent Vatican article emphasizes the
community of interests amon;r Catholics and Moslems in combat-
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