CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A001800630001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 8
• Document Creation Date: December 15, 2016
• Document Release Date: February 20, 2004
• Sequence Number: 1
• Publication Date: January 13, 1955
• Content Type: REPORT

CURRENT INTELLIGENCE BULLETIN
Copy No, 79
DOCUMENT NO.
NO CHANGE IN CLASS. [ '
Cl DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: 20 /CL--
AUTH: HR 70-2
DATE:9/i/8a REVIEWER:
13 January 1955
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
P DIA review(s) completed.
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SUMMARY
FAR EAST
I3ammars jo guardedly op imis is over airmen's case (page
4. Nationalist ability to supply Tachens severely limited (page 5).
NEAR EAST - AFRICA
54 Movement for independence gains in the Sudan (page 5).
EASTERN EUROPE
6. Comment on possible alteration in East German economic plans
(page 6).
WESTERN EUROPE
7. Britain to cut defense budget (pa,ge 7)0
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3. Hammarskjold guardedly optimistic over airmen's case:
UN secretary general Hammarskjold
has informed aides in New York that he
is optimistic about the final outcome of
the case of the United Nations personnel
held in China, provided that the case
"is kept entirely outside of the political fight in the next few months.'
Hammarskjold stressed "the great responsibility" now resting on
the American administration.
Comment: Hammarskjold's message
supports earlier indications that Peiping intends to hold for some
time at least the 11 American airmen sentenced as "spies," but
that Chou En?lai left room for a later settlement,
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Hammarskjold's hope for restrained pub-
lic comment on the airmen's case presumably derives from Pei-
ping's insistence that it will not be "intimidated" into releasing
the airmen, and from Chinese Communist statements that the cases
might be "reviewed:'
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4. Nationalist ability to supply Tachens severely limited:
Chinese Communist air raids on the
Tachens have demonstrated the vulner-
ability of Chinese Nationalist ships sup-
plying the islands, according to the
American army attache on Formosa.
Natioffalist antiaircraft defenses are "entirely ineffective:' Ships
which can move in and out of the Tachen harbor only during high
tide are helpless while anchored in the harbor.
Officials of the American Military Assist-
ance Advisory Group on the Tachens report that supply levels on
the islands are sufficient for 30 to 60 days. Water is no longer
a serious problem, as there are now enough wells to sustain the
garrison.
Comment: Supply of the Tachen garri-
son will become increasingly difficult if the Communists continue
their air attacks on Nationalist shipping in the area. Smaller
islands in the Tachen group held by guerrilla forces will be par-
ticularly difficult for the Nationalists to hold, since few are self-
sufficient in food and water. The Nationalist navy has recom-
mended the withdrawal of the 850 guerrilla troops from the Yushan
Islands, 35 miles northwest of the Tachens.
NEAR EAST - AFRICA
5. Movement for independence gains in the Sudan:
Sudanese premier Azhari's National
25X1 A I I Unionist Party, sponsored by Egypt, is
threatened with disintegration as a
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result of the recent series of pro-
independence moves by important polit-
ical figures in the Sudan. This suggests
that the party may renounce its support
of union of the Sudan with Egypt at its
14 January meeting
The American liaison officer in Khartoum
reports that Mubarak Zarroug, an official of the National Unionist
Party, has reached a tentative agreement with pro-independence
leaders to promote independence for the Sudan before the meeting
of the constituent assembly. Under the terms of the Anglo-
Egyptian accord on the future of the Sudan, a constituent assem-
bly, to be elected before 1957, would decide between complete
independence and union of the Sudan with Egypt.
Any such change of policy by the National
Unionist Party would eliminate all chances of union with Egypt,
and would probably have severe political repercussions in Cairo,
where the Nasr regime is fully committed to obtaining union of
the two countries.
EASTERN EUROPE
6. Comment on possible alteration in East German economic plans:
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Walter Ulbricht, first secretary of the
East German Communist Party, issued
a propaganda directive to local party exec,
utives on 4- December which suggests that
some adjustments in the economy of the German Democratic Repub-
lic are anticipated to provide for the additional economic burden of
armaments production and an increase in the military establishment.
The directive said that as a result of the Moscow conference on
European security, "necessary additions are being made,, to the
decisions of the fourth party congress, which reaffirmed the poli-
cies of the new course.
The establishment of an East German
army following ratification of the Paris agreements would require
altering the present investment policy, which emphasizes consumers'
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goods industries and agriculture. However, reducing the
presently inadequate production of consumers' goods or rais-
ing taxes and workers" quotas to finance urgent armaments un-
dertakings would adversely affect the morale of labor and lead
to still lower productivity and efficiency,
East Germany was the only Satellite
lacking a regular army establishment at the time it inaugurated
the new course. The necessity of readjusting its economy now
to support national armed forces would require aid from the rest
of the Orbit or abandonment of some of the new course economic
program.
WESTERN EUROPE
7. Britain to cut defense budget:
Britain's defense budget for the fiscal
25X1A year beginning 1 April 1955 will total
1, 527 million pounds sterling ($4,216
million), according to Minister of.
Defense Harold Macmillan,-. For the present fiscal year, 1,640
million pounds ($4,592 million) was voted, but only about 1,50
million pounds ($4,340 million) will probably be spent.
The new estimates are carefully calcu-
lated in order to avoid the underspending characteristic of the
last two years, Since American aid reflected in the budget will
drop from about $238,000,000 to perhaps $56,000,000, the burden
on the British taxpayer will be slightly increased.
Comment: The slight reduction confirms
earlier forecasts that while tie British are changing over to a new
defense strategy, spending will be temporarily less, When the
shift is completed, probably in two or three years, defense budg-
ets are expected to be as high as, or higher than, the present
level.
Should the general election take place this
year, as is widely expected, the Conservatives will be able to make
political capital of the fact that the total defense budget will be lower.
It fulfills a promise made by the government last April.
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