OFFICE OF REPORTS AND ESTIMATES, CIA FAR EAST/PACIFIC BRANCH INTELLIGENCE HIGHLIGHTS NO. 55 8 JUNE - 14 JUNE 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000500020002-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: November 1, 1999
• Sequence Number: 2
• Content Type: PERRPT

Approvedriw6r Release 2002/01/03 : CIA-RDP79-0)VtOA000500020002-3
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i'A: EAST/x' ITFIC Bi7A2?CH
OFFIC.t OF REPOR ; AN
Mint L INTELLIGENCE A(:E OY
WOTICEx This docurient i.:: it working po,Rer? '40T an
cicia.]. CIA "}.asuance, a-,,-,d has not n_ecessax=i1y
bon coordinated with. ot':,er 01U-1, producinp cornpon-
snte a It rep'-scents cur: ent t' i-inkin ; by one group
of snecia1istu in CIA, a--,id is ^:CL
1. ':o 11eci;*e of x.-ba t; is act.ut lly i,=.?. 91P?lil_n' or Tai n;, Thera, Is a.
C-; 1,4-_d lack Of, ti t_-ahiiity arnon.l.- & Axialist rnolit:1?.?YIl Or;nLnL+ ar :tia-,
L ritFiCcn is rife[ in rcr'ulr,r trop' as well- as in the Air Force
thi NavyL lit't~ ;~ ttid troops air')n IJhanrhai and T'w'ing e. i clot- the
L :?'~eTi are; "?2"?'k.ent a zt..a,t'rr:trp pT`ol:lem Ln the ~.L'.read' (:.'a't'_'.-
cr)w? ed islautd. Poor arid disor 3.!"`;iatc:ry pay, ltiis rabl? ?.+r# C'.f'C'iiiS E.tt,?
. ?', ti t"I.Ly'Nr. f;' use' ,ome off cio s to express ' rrea t worry" C-uncerui z,,
?._ tli,-ii rank 04' i&-4"r n Vie re is, *t? e' d
ear crytti.'llir:eil fit: er--;l 'r ior: to fight the ;or'C'"s=ris.tsa T ?$
of C;lio'1 a. de
I t9"~ 'I t C}r5?`c.sjte ioivmjn on 'thee rai.nlartd, is slre"dv Ct1Tr:wni3!t-
i "?' ,.. c .. It a r(e terr. r' rt& e ^, ~ L~'`d7 H4.2 C1 ~a 3i 1e 7 ts tat for no t fi F
r
Ytx?t r t;ened, tt likcl.ihor d -X di r3o t Cn- :i-i.e t riiii.ts as
ts...t
.m n is still. i`r Al'-..hek, therefore,
'. ~1 irdi3c:i
r-ji;c"1.in an.troj of th-1 Island n t 1,x'a$t thr? rjrh l..IM9 huts
Per! od, his pY`c;~,a of T,i t;rsta.nding Cr w'' nist
:(:'i Gsi13.1^; t7 t' 'atl cma1isl' conf air ~.~.. een-1 of deep-serAtied 'aiwau.ne,, .`' t'>"'S?5,+-
~ ..... ,.1n to :" i re;"ina. are v ry r::Sc;-r
r .. to YcTt!T,tzc trYall.a tr'c3 s :Sx" ,~`i e CC ' s sr7f r -o'r rii
' c
Y
,., ~,
,
Wes. _.........r.._
trsr;~tptticsrt fa,,i i ...ir the Yangtze vcxlly y r y nerTM'-;_v
t .`,'l.'l*::l of St)n te'.i"t in f,'he newl'? w tit=:~ E?;l are
f l,.!, by ne"nit zi. r
a
-!n -r cotton, Coal rin''} f.=,or t corm3diales, rtt,v bn _fii
ro~,e' !eurmre of tet `: ~ .: t `t ea,:Inoruo rea1.lef.., P.e iteration rf
.?;t rj?.%13 i Sri i.rl=:iurtry Pnd oo?iSr';.zr'ce p however, depends upon cixC adet;'?s' te*
f ru' rt,' for the 4 han;ghaY tar ;"`~ C - neny, flttS1;.3 oar o ult?.C t i f ?3, and
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the Pa? er Company presently uses oil for fuel. Although any oil
shortage could be partly alleviated by reconversion to coal, the
Ccncnunists probably cannot transport enough coal to maintain full
pover generation in Shanghai except by the movement of North China's
coal by means of chartered foreign vessels.
The few river vessels left behind by the Nationaliots in Shanghai
a:;vT other ports on. the Yangtze River began. a Shanghai.Hankow run on
3 June and tics more scheduled runs were soon established. Overland
transport ix, the lour valley, chiefly on the Tientsin--Pukow and
T1;.ac ,nr-Shan ;haj railroad lines, has been brisk. Smell amounts of
lhsainan coal have been rushed to Nanking and ShanChai, as well as
laar;?er shipments of rice and edible oils frost Wuhsi and other rice
m ri:e is in the Ysngtae delta. The Peiping-Hankow railroad is not
open to throuaph traffic but a section in Honar. province north of
lPmkow rhos ld. he in operation soon, as should the Hangohow-Nanohang
section of the Cheh-iarag-Kiangsi railroad.
1T :.f..7: 111 !A
Far: Dallis roblems-. Bao Ihai arrived in Saigon on 13 June from Dalat
to prepare pens. for an exchange of letters between hinself and French
HT:: gh Coinr;issioner Pignon and possibly to announce his cabinet as V M11
as arrange a trip to Hue and Hanoi. There appears to be a ni.sunder-
standirg. between Pignon and the influential Governor of Coohinchi.na,
Trra.n-vanmlfuu, as to the timing of the Bao Dai cabinet announcement.
Pl gnon expects this action to take place before Bao i)ai's visit to
the north, but Hun believes that it may be postponed mending further
oor:s.ider?ation of the cabinet's cc;:npositicn. lUu's view api earns the
more lik ly, since the personal feuds, jealousies, and ambitions of
v-t jaws political leaders are giving Rao .psi serious difficulty in
t-6e choice of ministers. In this connection, Bao Dai is assiduously
a^}.srtit~s certain "moderate" resistance elements for inclusion in his
go ve raiment.
Despite high Cormnissioner Pl.pnon's efforts to implement the Sao
Ia.. plan as rapidly as possible, French colonial `edieharrixs"have rov .ve-
t1ic hope of` crushing the resistance by nilitary .force and thugs re.ira.,osing
effective French colonial control over all Indochina. 25X1C
az to the vest military strategy under the eircivi tances. It is anrmarent,
rile other rsailitary officials are almost unarinou-, f..ra
siring the ultimate return of complete French aaxthority they Vf
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'SECRET
therdfore,, that Bao Dai ? s many problems in activating his proposed
ra-ima will be aggravated by sabotaje on the French administrative
lwlal and his prospects of eventual s~2oceys still arnear to be very
Quirine nominated for nresidone -The Quirinista faction of the Liberal.
P; ;,y held its convention on 11 June and, as exraeoted, unanimously
nesmly-ated President Quirino as Party candidate for the presidency,.
11-a, convention, failed to agree on a vice-presidential nominee and
ftdjalir-ned on 12 June after resolvinf- to let Quirino hi-,,self choose
his rura air4r,-m xteil The problem of selecting the B an senatorial
s l':Ae v-^a s shunted to the Party's executive oorra.ttee m
,sose Yul.o is now considered to he Quirinoes probable choice,,
Y.z i?r>, a prg.svs;r S reker of the Rouse. was Chief Justice of the Supreme
C,-,.:r?t in the Jcenasaese puppet gover'ranent and is a prominent landowner
fi:10 o34irnorat on lawyer His price is hirhi Q113.rai 1.C} ];as told the v
Ars';aseador that, in return for accentir;g the vice--precidency, rule
vv' Ef;e8 to be concurrently Secretary, of Finance and have a free Land
in shaping the Crovornrnent.ws plans for economic de -el.opnent.
e-rhnns the most significant political de`elopr^erit art the onuveri-
fi r was Senator Tanadaes drama.tlc and urexpectrnd resi .att.on from the
..::. ~it,rral Party. "hnada, who has an excel] ent record and has 1 :re i an
n, "-rensive? f i rli-t in, the Senate for honest governr[ent,,, had been !as ec1
a z,-?-i,lost Quirino to (':e;. or the oon' nti,on's kovnote address,, in two
~~?tt r s 7r ~i 8~1~e th th nublie on. 12 June' , Tana.C?a rf`.;`aased o .e ive r
t;:h add3r,?ess. as,-used house Sneaker Eugenio Perez (Pre&ident of the
L."Pe.r l Party) of benefitting f inanniall.y from the Chine, e artmi z a# iaxa
a w;mtem and charged Qui ring with having giv n his annrov nl to the
=. ?e of cntot_es.p Tanar?a denounced the Liberal Party oanpaign for a
c anr honest-0, and efficient f-c,reernment' as a "nieoe of hardened
Both Quiri-o and Perez immediatelir denied the charge;;?
iithoat~.,h Uv full, ef"eot of Taznadala reci. ation upon election