CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A000300450001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 7
• Document Creation Date: December 15, 2016
• Document Release Date: November 6, 2003
• Sequence Number: 1
• Publication Date: August 19, 1951
• Content Type: REPORT

77
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1.9_August 1951
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CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. _
NO CHANGE IN CLASS.
C~ DECLASSIFIED
CLASS. CHANGED TO; TS a C
NEXT REVIEW DATE: -. 201ar
AUT HR i -
DA'Q 00 EVIEWER
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Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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State Department review completed
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SUMMARY
GENERAL
2. French Foreign Office takes pessimistic view of Far Eastern situation
(page 3)0
FAR EAST
3e Communist threat to Indochina seen unabated (page 4)a
EASTERN EUROPE
7. Tito presses for US aid (page '7)a
WESTERN EUROPE
8. French doubtful of ability to contain inflation and maintain rearmament
program (page 8).
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2. French Foreign Office takes pessimistic view of Far Eastern situatioi
to an 4"u^ es-
perate casting around" for a solution in Indochina. While the French atti-
tude toward recognition of the Chinese Communist regime and its admission
into the UN has not'changed coi siderable, iaolttical pr rear .s'huildi up :for
w e' negotiations looking to a settlement of all Far Eastern questions in the
event of a successful outcome of the Kaesong talks. Foreign Office officials,
however, view these talks as part of the Soviet peace offensive and expect
them to be broken off once `the t7SS t has achieved maximum propaganda
In recent talks with French Foreign Office offi-
cials, US Embassy representatives have dis-
covered "little optimism!' with regard to the
Kaesong armistice ne otiations d- h ''d
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 Applil'or
The Foreign Office is particularly gioomy about
the situation in Indochina, "where. France continues to pour out men and
money" with no end in sight. There is some feeling that the US position on
Formosa blocks the possibility of a general political settlement in the Far
East and that the French Government has nothing to offer the Chinese Com-
munists in return for a guarantee. against intervention in Indochina.
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Comment-. The weakness of the new French
Government, resentment against the inflexibility of US policies aimed at
containing the USSR, and fear of worsening internal economic conditions re-
sulting from increasing inflationary pressures form a background to. the
pessimism of the Foreign Offices
FAR EAST
Communist threat to Indochina seen-unabated.-
Despite the present lull in hostilities in Indochina,
the US Legation in Saigon warns that a prudent
estimate of the situation would indicate that the
Viet Minh, with the close cooperation of Com-
munist China, is preparing for a major effort. In support of this view, the
legation cites several current reports indicating increased Chinese Com-
munist interest in Viet Minh fortunes, as well as the Peiping propaganda
charge that 35, .000 Chinese Nationalist internees in Indochina have been
equipped and trained and are now poised on the border for an invasion of
South China.
omment-. The rainy season in the Tonkin delta
area, which will continue through September, accounts for the present lull
in hostilities. Despite heavy losses suffered by the Viet Minh earlier this
year and a few ambiguous Communist references to a negotiated peace in
Indochina, available evidence supports the US Legation's estimate.
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Tito presses for S aid:
EASTERN EUROPE
In an interview with US Senator Blair Moody at
Brioni on 12 August, Marshal Tito emphasized
the following points to substantiate his request
for immediate US aid:
a) ;Although the USSR is not yet ready for war,
it will not wait until the West reaches its peak of preparedness in 1954? The
critical period will be 1952. The US should build up armament production
centers near danger points rather than in the US and other areas "far re-
moved from the likely scene of conflict. "
b) A primary Soviet aim is to bring about the
internal collapse of the Yugoslav regime. A secondary aim is to maintain
tension between Yugoslavia and the Satellites., Satellite-provokedbarder:..in-
cidents to accomplish' these objectives have iuicreasedgreatly during, the past two
months. 'T'hese incidents could "get out of controF' at any time and develop
-7-
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into war. Prompt US military aid to Yugoslavia would reduce this possibi-
litya
c). Titoism will increase in the Satelljtes in pro-
portion to the deterioration in the Satellite standard of living as compared
with that of Yugoslavia. Any weakening of Yugoslavia's standard of living
will adversely affect the progress of Titoism in the Satellites.
Comment: The interview was apparently
`designed to stress the points that would be effective in secure? speedy aid
for Yugoslavia without committing Tito to any definite action.'
WESTERN EUROPE
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gXggr am a
French doubtful of ability to contain inflation and maintain rearmament
Because of their rapidly deteriorating dollar
reserve, the French have become concerned
about proceeding with the expanded import policy
on which former Finance Minister Petsche based
his anti-inflation program. Although Cabinet views differ on the subject,
the government will probably use available reserves to continue an expanded
level of imports and to maintain the present level of military effort, until
new US-French talks can be held to reassess US aid for French rearmament.
comment ? The French dollar trade balance,
although better than a year ago, is still quite unfavorable to France, More-
H, over, the French position will probably be aggravated in 1952 due to an ex-
pected drop in current abnormally high steel and sugar exports, The French
expectation of financing an expanded import program was based on a mis
understanding of the extent of US commitments undertaken in the October
1950 talks on US aid. Both ECA and Paris Embassy officials have frequently
stressed the urgency of additional support if France is to carry out its
military comnitmentso
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