CURRENT INTELLIGENCE REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79S01060A000100130001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 16, 2016
• Document Release Date: August 31, 2004
• Sequence Number: 1
• Publication Date: September 19, 1951
• Content Type: CIAPER

25X1
Approved F6-4R Ws
Copy No~ 8
4/
: S W D R 60AOW 00130001-0
VOL. I No. 6
19 September 1951
25X1
DOS review(s)
completed.
CENTRAL INTELLIGENC.J A"-NUX AU T H: O
DATE. ' REVIEWER:
25X1
25X1
pQCUMENT NO.
Office o Current IntelligenceNO CHANGE IN CLASS.
L3 Mrr l ASSiF1ED
CLASS. CHANGED TO:
NEXT REVIEW DATE:
Approved For Release TOP: QI UTA000100130001-0
 Approved For
X00001-0
THE SOVIET WO) . . . . . . . . . . < . . . . . . . Page 3
RECENT DEVELOPMENTS IN IRAN . . . . . . . . . . . . . . . . Page 5
The Anglo-Iranian deadlock has hardened with the termination
of negotiations and the anticipated Iranian ultimatum to the
British to withdraw their technicians if negotiations-are not re-
sumed,within fifteen days. The Iranian economic situation is
becoming more serious, and the political situation is disturbed
by anti=Mossadeq sentiment in the MaJlis and expanded Communist
activity among the unemployed.
THE CURRENT SITUATION IN KASHMIR . . . . . . . . . . . ? < . Page 7
The latest UN mission has left South Asia without achieving
a permanent settlement of the Kashmir problem, although the door
to future negotiations is still open. Warlike tension in the
area has lessened, but further trouble is still possible.
CZECHOSLOVAK REORGANIZATION DESIGNED TO INCREASE ECONOMIC
EFFICIENCY . . ... . . . . . . . . . . . . . . . . < .
Page 9
A more efficient national economy appears to have been the
goal of the recent reorganization of the Central Committee of
the Czechoslovak Communist Party and the economic ministries of
the government. The realignment of personal powers apparently
is designed to bring fresh leadership to bear on the problem of
increasing heavy industrial output.
FRENCH IN INDOCHINA FEAR US INFLUENCE .
The French authorities in Indochina fear that the US is
seeking to expand its influence at the expense of France., They
have criticized US actions, particularly the administration of
economic aid, but have made no formal complaints. The French
attitude, while riot crippling US policy,.has tended to retard
its implementation and has inhibited the agreed program of
building a strong non-Communist Vietnamese government.
Page 10
25X1
25X1
Approved For (Release 2004/09/23 : CIA-RDP79S01060A000100140001-0
 Approved For
WORLD COMMUNISM: COMMUNIST HARD CORE STRATEGICALLY LOCATED IN
SCANDINAVIAN TRADE UNIONS . . . . . . . . . . . . . . . . . . . Page 12
The Communists, despite their small numbers and political
weakness, retain their importance in strategic segments of.the
trade union movement in Sweden, Norway and Denmark. They still
control a number of locals in vital industries, and therefore
possess a dangerous sabotage and espionage potential.
25X1
25X1
Approved ForiRelease 2004/09/23 : CIA-RDP79SO106OA000100P30001-0
 Approved Fo1
THE SOVIET WORLD
The Soviet Union has so far failed to react with customary vigor to
the Japanese peace conference, to events in Korea, to Allied discupsions
of a "contractual arrangement" with the German Federal Republic, and to
the Ottawa meeting of the North Atlantic Council.
One possible explanation is that, following the Japanese Peace
Treaty, Soviet propaganda is marking time pep.ding high-level policy de-
cisions on the USSR's future course of action, particularly in the Far
East.
German rearmament is receiving renewed attention in Moscow's propa-
ganda output, and this heightened interest i$ also revealed by the note
which Foreign Minister Vyshinsky handed to the French Charge on 11
September. The note protested against France's softening policy on
German rearmament and stated that such a policy was contrary to both the
Franco-Soviet treaty of 1944 and the Potsdam Agreement.
The Soviet Foreign Office has also accused France and Great Britain
of violating the treaties of friendship and mutual assistance which each
had concluded during wartime with the USSR. 'There is still no evidence
that the Soviet Union intends to denounce either of these treaties at
this time.
In the economic field, the Soviet Government has continued to seek
normal relations with both countries. A new five-year agreement between
the USSR and France, succeeding a contract concluded in 1945, provides
for trade relations on a most-favored-nation basis. Moscow has also
reached another annual agreement with Great Britain under which Russia
will supply one million tons of grain, including wheat, in the coming
year. The ambitious post-war economic development of the Soviet Far
East, as well as events in Korea, appear to have aggravated the chronic
transportation difficulties of the USSR. In recent months passenger
transport in particular has been affected, probably due to priorities on
freight shipments. Even in the case of freight, however, there were re-
strictions placed on shipments by air via Moscow to points in the.western
USSR and the Far East.
In Poland and Rumania, the Communist regimes are taking new steps
to eliminate remaining opposition elements in the Catholic hierarchy.
The Rumanian campaign against the Church is currently highlighted by an
espionage trial of several Catholic churchmen who have allegedly been
in the employ of the United States, British and Vatican intelligence
services.
The most recent phase of the Polish anti-Church campaign involves
the trialof five Catholic churchmen who had been particularly outspoken
25X1
25X1
Approved Folr Release 2004/09/23 : CIA-RDP79S01060A00010013p001-0
 Approved Fe
opponents of the Communists. All of the accused, who have been im-
prisoned for at least two years, are charged with plotting "the over-
throw of the People's Government." The US Embassy in Warsaw interprets
the proceedings as part of the Communist effort to eliminate the leader-
ship of the anti-Communist clergy a4d to exact Church support of Commu-
nist policies. A recent broadcast stating that high state decorations
have been awarded to a number of Catholic clergymen for their efforts
"in the struggle for peace" revgals another Polish Government attempt to
split the Catholic clergy.
On the other hand, the Polish Catholic Primate, Archbishop Wyszynski,
has issued a pastoral letter stressing the necessity of religious educa-
tion for Polish youth. This emphasized the Church's continuing determi-
nation to circumvent its lack Of control over religious education in the
state-supported schools by exhorting parents tp carry out religious educa-
tion in the home.
Satellite efforts to aid North Korea are continuing with reports
of the delivery of Polish clothing and East German clothing and medicines.
While the delivery of 82 truckloads of Polish aid to North Korea was re-
ported in May, this is the fir?t report of East German assistance to
North Korea.-
25X1
25X1
25X1
Reports from Czechoslovakia point to a further tightening of con-
trols along the Czech border with the US Zone of Germany which will make
frontier crossings virtually impossible. The preparations, scheduled
for completion this month, include an electrically-charged fence with
cleared and mined areas on both sides 'of it. The large number of escapes
from Czechoslovakia probably brought on the increased emphasis on border
security observed during recent months.
Approved Fo
25X1
 Approved Ff
RECENT DEVELOPMENTS IN IRAN
It has become clear that the "'suspended" Anglo-Iranian oil negotia-
tions have in reality been terminated, at least from the British point
_ -- A , - - n - an+; g+; ons must be on Iran's initiative.
25X1
25X1
The Iranian Government, through Mre We Averell Harriman, attempted
to deliver a fifteen-day ultimatum to Great Britain demanding resumption
of the negotiations under the threat of expulsion of the remaining
British technicians. Mr. Harriman refused to transmit it and the Iranian
Deputy Prime Minister has been quoted to the effect that,it will be
delivered directly.
The loss of revenue from the Abadan, oil field has weakened the
Iranian economy dangerously, although total collapse may be averted for
some months* Great Britain has suspended Iran's right to convert sterl-
ing int6dollars and has banned the bale to Iran of scarce goods, such
as sugar, railroad equipment, iron, steel and non-ferrous metals, thus
adding to the economic plight of the country.
The Iranian Government announced on 17 September that it was
negotiating an oil barter agreement with the USSR. Previously, the
government had reported that negotiations, as yet imcomplete, for the
sale of over a million tons of oil products had been carried on with
Poland and Czechoslavakia.
The USSR could divert a few, possibly ten, of its tankers from
present commitments to hauling Abadan oil to Communist China or to the
USSR itself. At present, an estimated 95 percent of the oil furnished
China by the Soviet Union is moved by rail. In any event, the USSR
Will probably not be able to lease enough tankers to move more than a
small percentage of the normal annual output of Abadan. However, even
such a samll percentage uould,help the Soviet Union meet its Far East
oil commitments.
Meanwhile, anti-Mossadeq sentiment in the Majlis has become more
vociferous. The opposition has been strengthened by the reappearance
of British-favored Seyyid Zia of the "National Will Party." Zia, if he
should become prime minister, reportedly will press for economic and
social reforms rather than immediate settlement of the oil problem --
apparently hoping that anti-British feeling will be weaker after a
cooling-off period.
Approved Fc#r Release 2004/09/23 : CIA-RDP79S01060A000100I130001-0 25X1
 25X1
Approved Fe
6130001-0 25X1
Such a plan, however, may have little success. Complete adherence
to the oil nationalization law has become so closely identified with
Iranian nationalism that the extreme right and the extreme left would
undoubtedly combine to keep it a "hot" issue. In Zia's favor is the
fact that many Majlis deputies fear they vdll lose their seats if
Mossadeq remains in power and controls the elections scheduled for November
and December .
Iranian army units have been alerted for possible disorders among
the thousands left unemployed by the oil shutdown. A government program
for irrigation and agricultural projects is too far in the future to be
25X1 of value in relieving present unem to ent. Pro-Soviet .Tudeh activity
has increased among the unemployed
Should financial difficulties force a suspension
of army pay, the resulting loss of military morale could present a serious
security problem.
Approved F4
25X1
0001-0 25X1
 Approved For
30001-0 25X1
The departure from South Asia of flDr..Frank Graham, the UN 'Represent-
ative charged with investigating the Kashmir problem, ended another UN
attempt to resolve the Indo-Pakistani dispute, a threat to the peace of
the Indian subcontinent for almost four years. The mission came no
closer than earlier ones to achieving a permanent settlement.
However, Dr. Graham left the door open for future negotiations on
the demilitarization of Kashmir, the major question on which all previous
mediation efforts have broken down. By submitting to both countries
informal suggestions for progressive demilitarization and the eventual
appointment of a Plebiscite Administrator, Dr. Graham avoided forcing
either country into formal acceptance or rejection of his proposals. In
this way he reportedly obtained full Pakistani agreement to his proposals,
and Prime Minister Nehru of India apparently indicated his willingness to
agree to many of the points contained in them.
At present, the danger of armed warfare between India and Pakistan 2 5X1
over Kashmir seems less acute than previously. Although large forces are
still drawn up borders- both countries have reinstituted
militarv'leaves
There is also less likelihood of extensive civil disturbances in
connection with the Kashmir -Constituent Assembly elections, since the
candidates of t'remier Sheikh Abdullah's Indian-dominated National
Conference party were unopposed in 43 of 45 constituencies in Kashmir
and Ladakh provinces and were declared elected without a vote. Wide-
spread polling will be required only in the 30 constituencies of Jammu
province, where, the question before the voters is less one of allegiance
to India or Pakistan than one of the degree to which Kashmir should be
integrated into the Indian governmental system.
Despite the lessened tension, in Kashmir, the UN is considering
further measures to be taken inm.ediately after the receipt of Dr. Graham's
report. Prompt action by the UN is deemed necessary in order to avoid any
resurgence of unrest following the withdrawal of the Graham missile;, since
'there is still no sign that India intends to permit a free plebiscite in
Kashmir, and it is doubtful that India will agree to demilitarization
proposals when they are formally presented.
Recent offers of mediation or expressions of concern from a number
of Moslem and non-Moslem nations may have given the Indian Government
food for thought about its position in world opinion. On the other hand,
Approved For
25X1
 Approved Fo
Prime Miaister Nehru's apparent victory over opposing forces within his
:Congress party may,confirm his belief that his previous policy on Kashmir
will continue to be supported by the great majority of the Indian people.
The seeds of trouble still exist in South Asia and no permanent solution
to the Kashmir problem is yet in sight.
Approved For Fielease 2004/09/23 : CIA-RDP79SO106OA0001001
25X1
25X1
 Approved F
CZECHOSLOVAK REORGANIZATION DESIGNED TO INCREASE ECONOMIC EFFICIENCY
Achievement of a more efficient national economy appears to have been
the motive for the recent reorganization of the Central Committee of the
Czechoslovak Communist Party and' the economic ministries of the govern-
ment. Czechoslovak leaders, burdened with increasing Soviet demands,
brought the government and party hierarachies; closer' together: by establishing
a Politburo consisting of seven members, all of them top government
officials, including President Gottwald, Prime Minister Zapotocky and
Deputy Prime Minister Slansky.
The effect of this move was to diotribute party power, which pre-
viously had been centered in Secretary General Slansky. The new
structure of the Central Committee parallels that of the Central Com-
mittee of the Russian Communist Party. The reorganization of the eco-
nomic ministries follow$ the Eastern Europe trend of decreasing the scope
of responsibility of individual ministries. The splitting of old
ministries and the creation of new one responsible for a limited sector
of the economy is intended to bring more efficient administration and,
at the same time, incre..sed internal security through greater compart-
mentalization of knowledge and authority. Thus, the Ministry of Heavy
Industry was replaced b five new ministries.
Another feature of the economic reorganization is the elimination
of certain regional economic offices, which makes direct control over
the nationalized industries possible. This move follows several years
of unsuccessful experim+ntation in Czechoslovakia with running nation-
alized enterprises, and finally brings the control of the Czech economy
into line with that of he other Europ an Satellites and the USSR. A
newly created Ministry Of State C?r}tro,, also a familiar organ in the
Soviet Orbit, is charged with ferrgtint out shortcomings and prosecuting
offenders in the economic ministries a#d state erite(I-prises.
Little significance can be attached to the reshuffling of party
leaders, except that it.undoubtedly is designed to bring fresh leader-
ship to bear on the problem of incre4s.ng heavy industrial output. Al-
though Slansky's influence has been lessened, he remains a member of
the all-powerful Politburo. This may be the first step in his removal,
or it may only be part of ,the effort to achieve greater efficiency in
the party hierarchy. There is no evidonce that Slansky was tainted
with ""nationalist. deviation." While the duties of the Party Secretary
General have been turned over to Gottwald, the establishment of a
Politburo will probably preclude any such concentration of power as that
previously held by Slanaky.
The party and government reorganisation indicates no lessening of
Soviet control; rathir it provides evidence that more attention is being
given to satisfying Moscow's demands.
Approved For
25X1
25X1
 Approved Fl
FRE111i IN INDOCHINA FEAR US INFLUENCE
The allocation of large amounts of American military and economic
aid to Indochina during the past year under a priority second only to
the Korean has failed to remove, and has possibly even aggravated, a
persistent French fear that the United States is undermining French
influence.
French objections to what is described as the "American presence"
in Indochina were, until the end of 1950, generally expressed indirect-
ly or semi-officially. These objections were first apparent when French
officials sought to explain the rise of Ho Chi Nlnh in 1945 in terms of
American machin Lions rather than the anti French sentiments of the
Vietnamese.
Since the beginning of 1951, however, French suspicions have been
openly stated by France's High Commissioner and Commander in Chief,
General de Lattre. At semi-public gatherings, he has made various ex-
travagant charges that US officials are abetting the subversion of
French authority. This "subversions has allegedly ranged from support
of anti French Vietnamese political parties to such insignificant matters
as provision of an ' American exhibit for a Hanoi fair that was bigger than
the French exhibit.
Although the US Minister. in Saigon admits that some of the 200 Amer-
ican officials and clerks in Indochina may have been indiscreet in criti-
cisms of the French position in the country, the French attitude derives
from more fundamental factors. French officials probably believe 'that
the arrival of numbers of Americans threatens their prerogatives as guard-
ians of Indochina; they are embarrassed before the Indochinese that they
cannot equal the scale of US aid; and they probably sincerely believe
that the ECA program is the forerunner of American economic penetration
of Indochina at their expense.
The best evidence of the tenuousness of French charges that the US
is subverting their authority is their failure, despite an American invi-
tation to do so, to file any formal complaints. They have ocntented
themselves with public pronouncements, unofficial'-'complaints and behind-
the-scenes obstructionism, which while not critically affecting the
"deeper bases" of US-French relations in Indochina, have tended to harry
and delay the implementation of the US economic and information programs.
The EGA program, particularly, has been The target of French mis-
trust. The French High Commissariat made strenuous efforts to dissuade
MA from importing Japanese textiles for distribution to needy Vietnamese,
25X1
25X1
Approved For Pelease 2004/09/23 : CIA-RDP79S01060A0001001130001-0
 Appreved Fir Release 2004/09/23: CIA-RDP79SO106OA0001001
30001-0 25X1
but the arguments advanced were so unrealistic and unece.omic that these
efforts were ultimately abandoned. French authorities have frequently
attempted to divert EGA aid from the-agreed objective of strengthening
the prestige of the native governments in the eyes of their constituents.
French pressure has been exerted to use ECA.as a means of solving France=s
balance of payments problem in Indochina, to allocate what US officials
regard as an undue proportion of aid to military ends, and to liquidate
obligations inherited by the Indochinese states from France. The ECA
the second proposal and rejected the others.
representatives compromised on
Although French representatives theoretically had only a consulta-
tive voice in the elaboration of the US-Vietnamese BOA agreement, they
were primarily responsible for the inordinate delay of over a year in
the conclusion of the agreement, finally signed on 7 September.
French suspicion of American intentions has, moreover, an adverse
effect.on efforts to build a strong non-Communist Vietnamese Government.
The French authorities appear to believe that the United States has
entered into secret arrangements with Vietnamese individuals or groups.
As a result, they have severely limited the political freedom of Viet-
namese suspected of being pro-American.
The over-all effect of French antag .ism is to complicate, and per-
haps eventually seriously retard, American attempts to support the French
and local governments in their efforts to oppose the challenge of Commu-
nism in Indochina.
Approved FoF Release 2004/09/23 : CIA-RDP79SO106OA0001001I30001-0 25X1
 Approved For{
WORLD COMMUNISM.- COMMUNIST HA CORE STRATEGICALLY LOCATED
IN SCANDINAVIAN TRADE UNIONS
In strategic segments of the Scandinavian trade union movement the
Communists are a small but important element with a dangerous sabotage
and espionage potential.
The political appeal of Communism in Scandinavia has largely dis-
appeared. Consequently, party leaders are turning their efforts to tightening
their organizations. Within the trade union movement, the Communists seem
to be concentrating on preserving their position-in strategic unions where
their reduced power can exert its maximum effect, The governments and the
Social Democratic parties of Sweden, Norway and Denmark are aware of the
security problem involved, but, because of their regard for civil liberties,
are reluctant to take strong measures.
Scandinavian Communists never wielded so much influence as their
colleagues in the French and Italian labor movements, and 6ince,1946 they
have suffered a steady decline, At present the Communists can hope for
electoral support from less then ten percent of the Scandinavian trade
unionists. They actually control less than five percent of the local
unions, but these include some in the strategic metal trades, shipyards
and railroads. They also retain strong minorities of 30 to 40 percent
in other key locals as a leftover from the years of Communist domination,
The location of some of these Communist strong points in Scandinavia's
main seaports and in the mining regions of the far north gives, a true
indication of their potential danger.
In Sweden the Communists dominate only about one percent of the
countryl local trade unions. Their strength is concentrated in
the northern mining regions., whose high-grade iron ores contribute
materially to Western rearmament, and in the big Goteborg shipyards,,,
which are among the most important in Europe. In the metal workers1
locals of Stockholm, Goteborg and the north, they retain large compact
minorities. They also dominate over a third of the railroad locals in
the northern frontier p yovince of Norrbotten, and control the majority
of the dockworkers in Goteborg and Stockholm. In all Sweden there are
said to be a thousand Communist labor cells or factory clubs.,
t In Norway less than five percent of approximately 5,000 union locals
are Communist-controlled, but there is a marked concentration of Communist
strength in the key industrial area around Oslo. The unions that the
Communists dominate are in less strategic industries like the building
trades; but the metal workers' unions are heavily infiltrated. The
main Oslo shipyard has recently come in for special attention from
Communist organizers and the party has considerable influence in the
various electro-chemical plants southwest of Oslo. Communists retain
significant minorities among the dockworkers in the west coast ports of
25X1
25X1
Approved For 4elease 2004/09/23 : CIA-RDP79SO106OA000100 30001-0
 Approved
0130001-0 25X1
Bergen and frondheimq and there are noticeable concentrations among miners,
chemical and metal workers in a dozen smaller cities along the west and
north coasts,
Communist influence is largely confined to Copenhagen labor
In DepM~r
unions. It is greatest among transportation and cormunication workers,
certain government employees and metal and building trades' workers. The
Copenhagen dockworkers are entirely Communist-dominated; and the national
union of Marine Firemen is Communist-controlled. Within segments of the
metal workers' unions there are important Communist minorities, with
concentrations at certain key points such as the repair shops at Denmark's
largest airport, a number of Copenhagen machine shops,, and the country's
principal small arms factory.
In all three countries, therefore, the minor political and union
influence of the Communist Party does not reflect its considerable
ability to cause trouble in an emergency,
13
Approved For
25X1