CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A001600540001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: December 15, 2016
• Document Release Date: September 23, 2003
• Sequence Number: 1
• Publication Date: July 27, 1954
• Content Type: REPORT

D
Copy No. 80
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. _J* -o'-'
NO CHANGE IN CLASS.
CI DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: _ 20/0
AUTH: HR 70-2
DATE; NEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
25
STATE review completed
Oor
TOP SECRET
100 003/10/15: CIA-RDP79T00975 //44
 25X1A
Approved For ReIWWe 2003/10/15 : CIA-RDP79T00975AO04000540001-4
SUMMARY
FAR EAST
1. Japanese official suggests economic co-operation with SEATO
(page 3).
2.
25X1
SOUTHEAST ASIA
3.
4. Comment on Peiping 's entertainment of former That premier
Pridi (page 6).
NEAR EAST - AFRICA
Iranian negotiators consider all points at issue with consortium
resolved (page 6).
6. New Iraqi cabinet likely to be formed shortly (page 7).
WESTERN EUROPE
7. Rome voices conditional support of Balkan pact (page 8).
8. Ambassador Matthews foresees worsening Dutch-American
relations (page 9).
LATIN AMERICA
9. Castillo Armas reports :friction developing in Guatemalan
junta (page 9).
25X1A
25X1
Approved For Release 2003/10/15 : CIA-RDP79T00975AO01600540001-4
 25X1A
Approved For Ref se 2003/10/15: CIA-RDP79T00 775A0 M 00540001-4
FAR EAST
25X1A
.1.
2.
25X1
Japanese official suggests economic co-operation with SEATO'
plans and progress in developing a treaty organization, even though
constitutional restrictions prevent Japan from assuming an active
military role in such a grouping.
Ambassador Allison believes Okumura' S
offer should be used to associate Japan with plans for combating Com-
munism in Asia and to offset the prestige the Communists gained in
Japan as a result of the Indochina settlement.
Comment' The Communist success at
Geneva has encouraged many Japanese conservatives to favor a policy
of accommodation with Communist China.
Vice Foreign Minister Okumura suggested
to Ambassador Allison on 23 July that Japan
could aid a Southeast Asian collective secu-
rity organization by helping to raise living
Standards in a area. kumura hopes Tokyo will be informed of
27 July 54 CURRENT INTELLIGENCE BULLETIN Page 3
Approved For Release 2003/10/15 : CIA-RDP79T00975A001600540001-4
25X1A
25X1
 25X1 Approved For Release 2003/10/15 : CIA-RDP79T00975AO01600540001-4
Next 1 Page(s) In Document Exempt
Approved For Release 2003/10/15 : CIA-RDP79T00975AO01600540001-4
 25X1A
4. Comment on Peiping's entertainment of former That premier Pridi:
A Chinese Communist news release stating
that Pridi Phanomyong, the former Thai
premier, was a guest of honor at a Peiping
banquet on 22 July is the first reference the Communists have made
to his presence in China. He was reported to have fled to China
after an attempted coup in 1949, but his whereabouts thereafter had
been the subject only of unconfirmed and often conflicting reports.
Peiping is probably trying to harass the Thai
government by playing on its almost pathological fear of Pridi's return.
Pridi was an extremely popular leader and undoubtedly still commands
a considerable, though currently ineffectual, group of adherents in
Thailand.
Following so closely on Communist gains
25X1A
Approved For Rese - ~00540001-4
at Geneva, this attempt to exploit Pridi's name may signal the be-
ginning of a long-range campaign to build him up for future instal-
lation as premier of a Communist-dominated Thailand.
NEAR EAST - AFRICA
-
5. Iranian negotiators consider all points at issue with consortium re
s. ve
25X1A
25X1
25X1A
Finance Minister Amini told Herbert Hoover,
Jr. , before Hoover's departure for London
on 22 July, that the Iranian delegation
27 July 54 CURRENT INTELLIGENCE BULLETIN Page 6
Approved For Release 2 41A/15 : CIA-RDP79T00975AO01600540001-4
 25X1A
25XlApproved For Re[ We
69000540001-4
considers all major issues under nego-
tiation with the consortium now resolved
and is pleased and confident concerning
the negotiations' outcome.
25X1 A 6?
The consortium negotiators are similarly
optimistic, although the aide memoire setting forth the agreed prin-
ciples has not been put in final form. Furthermore, some legal
problems remain, such as details of arbitration procedures and a
determination on the code of law applicable to the contract.
In regard to the separate negotiations
between London and Tehran on the compensation to be paid AI?Cm-
including the loss of profits since nationalization and the internal
facilities not covered in the consortium talks--Ambassador Henderson
reports that the Iranians have offered $56, 000, 000. British ambassador
Stevens told Henderson that, if Iran will offer as much as $84, 000, 000,
he will recommend that his government accept.
Comment- All remaining issues appear
t of the question of diplomatic
to have been resolved with e
protection for the consortium. This matter apparently has not been
raised with the Iranian government.
Henderson and Hoover have expressed the
view that Iranian agreement to pay more than $42, 000, 000 in com-
pensation would have serious effects in Iran because of local finan-
cial difficulties which are certain to persist even after the consor-
tium begins operations.
New Iraqi cabinet likely to be formed shortly:
The new coalition cabinet being formed
in Iraq will be headed by either Nun Said
or his nominee, according to the American
charge in Baghdad.
The cabinet is expected to contain five or
six members of Nuri's Constitutional Union
Party and three or four independents.
Because of Nuri's personal opposition, Fadhil Jamali, the present
foreign minister, is not expected to be in the new cabinet.
27 July 54 CURRENT INTELLIGENCE BULLETIN Page 7
Approved For Release 2PAIlAI15 : CIA-RDP79T00975AO01600540001-4
 25X1A
Approved For R614q, se 2003/10/15: CIA-RDP79T00975A0W00540001-4
This cabinet will probably take office
sometime after Nuri's return from Europe in ten days.
Comment,. Nuri
id not "feel able to work with the new
government" because of the results of the 9 June elections. There-
after the politically powerful crown prince went to Europe to see
Nuri, and their discussions may account for Nuri's apparent will-
ingness to co-operate now.
Nuril s support raises hope that a strong
coalition government may be achieved and that Iraq may then adhere
to the Turkish- Pakistani pact.
WESTERN EUROPE
7. Rome voices conditional support of Balkan pact,
/d A
25X1A
25X1
25X1
High officials of the Italian Foreign Min-
istry0told the American embassy on 22 July that Italy will not
oppose signing of the Balkan alliance, provided (1) that it receives
assurances from SHAPE that military planning aspects of that pact
will harmonize with those of NATO, (2) that commitments under the
pact are no stronger than the consultative type of commitment of
NATO, and (3) that Greece's and Turkey's commitments are recip-
rocated by Yugoslavia.
The officials said, however, that Italy
cannot take a position on adherence to the pact until the government
has studied its provisions and Rome-Belgrade relations become
27 July 54 CURRENT INTELLIGENCE BULLETIN Page 8
Approved For Release;MWl (15 : CIA-RDP79T00975A001600540001-4
 25X1A
25X1A
8.
Approved For Releled 2003/10/15: CIA-RDP79T00975A001' 0540001-4
"more normal." They said Italy could not become a founding
member for various reasons, particularly the difficulty of getting
parliamentary approval prior to a Trieste solution and the need for
pushing EDC against heavy Communist opposition.
Ambassador Matthews foresees worsening Dutch-American relations:
Ambassador Matthews reports that the
Dutch are shocked and angered as a result
of American support of Thai prince Wan,
instead of the Dutch candidate, Van
Kleffens, for president of the Ninth UN General Assembly. The
American decision, Matthews states, will be viewed by the Dutch as
confirmation that Washington"s policies are "shifting and uncertain"
and will strengthen the growing Dutch anxiety over American leader-
ship. The Dutch may feel compelled to show the United States that
it is a mistake to take their friendship and support for granted.
Comment-. Van Kleff ens bowed out of the
race for president of the General Assembly last year under the im-
pression that American support for his candidacy could be expected
this year.
In recent months, Dutch-American re-
lations have worsened, partially because of The Hague's annoyance
with what it considered American support of Indonesia. One of the
ways in which the Dutch are most likely to show their dissatisfaction
would be by reactivating close co-operation with Scandinavia in order
to obtain greater leverage vis-a-vis American policy.
LATIN AMERICA
25X1A
Castillo Armas reports friction developing in Guatemalan junta-.
Guatemalan junta president Castillo Armas
told Ambassador Peurifoy on 22 July that
he seriously distrusted Colonel Monzon,
one of his two colleagues on the junta.
Castillo said he believed Monzon was trying to profit from the cur-
rent unsettled conditions and was permitting dissemination of the
27 July 54 CURRENT INTELLIGENCE BULLETIN Page 9
Approved For Release 2QY$AI)A5 : CIA-RDP79T00975A001600540001-4
 25X1A
Approved For Re1q&se 2003/10/15 : CIA-RDP79T00975AO 00540001-4
idea that the army would be justified in seeking revenge for its
"humiliating defeat" by Castil.lo's rebel forces.
Castillo, who apparently fears that
Monzon might influence junta member Major Oliva, indicated
that he may be considering eliminating Monzon from the junta.
The embassy has no evidence to support
Castillo's suspicions and notes that rumors of friction between the
two colonels, previously denied by Castillo, have apparently orig-
inated with Castillo's followers.
Comment.- Ultimate political power in
Guatemala rests with the army, and Castillo must consolidate his
control of it if his position is to be secure. Monzon headed one of
the short-lived juntas formed. after Arbenz' ouster and is the only
representative of the regular army on the present junta. Unless he
were replaced by another officer who had the confidence of the army,
his elimination would weaken Castillo's current tenuous hold over
the army.
27 July 54 CURRENT INTELLIGENCE BULLETIN Page 10
Approved For Release 2j5 : CIA-RDP79T00975AO01600540001-4