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March 9, 1951
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TOP SECRET Approved For Q~lease 2001/ 9/04 : C A-RDP79T01I 4& 40100080001-3 4 91:-_' U COPY NO 39 OFFICE OF CURRENT INTELLIGENCE DAILY DIGEST OF SIGNIFICANT TRAFFIC MAR A ,. Date: NOTE: to This summary of significant reports has been prepared for the internal use of the Office of Current Intelligence. It does not necessarily represent a complete coverage of all current traffic in CIA or in the Office of Current Intelligence. 2. Comment represents the preliminary views of the responsible analysts and net necessarily the final view of the Office of Current Intelligence. 3. Marginal letter indications are defined, as follows: items indicating Soviet-Communist intentions or capabilities s?13" - important regional d_ovelopments not necessarily related to Soviet/ Communist intentions or capabilities - other information indicating trends ant potential developments State Dept. declassification & release instructions on file Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 TOP SECRET Approved For' lease 2001/09/04: CIA-RDP79TO11404000100080001-3 TOP SPOUT SECTION 1 (SOVIET) ~? i 81tJR~1PS. ALBk IA, Cabinet Chaneeso The Presidium of the 1 ilrn?People-.s Assembly announced on 5 March that Deputy Premier Spiro Pano, and Miniiter of Industry Rita Marrke. have been released from their posts in order to carry on more important duties. (R FBID, 7 Mar 51). COM]ANT-S Both man are young Party militants who bad wartime experience as political activists in the National Liberation Arm. They were given their Cabinet posts in the Government reorganization of 19 July, 1950. As neither have relinquished their alternate member status on the Central Committee, it is possible that they have been selected to intensify political indoctrination in the Government and the Army, ne CZECHOSLOVAKIA. Purge of Czechoslovak Ammbassado ;_i u BeIInder Waves US 25X1X bad been recalled to Praha for "routine consultation" and that ne ex- pected to return to Washington in about ten days. how- 25X1X W au ory conver- ever, that - appeared "ill at ease" during t e e sation and that he would not accept a dinner invitation without prior consultation with his superiors. Prior to the last session of the Central Committee of the Czechoslovak Communist Party at which a Titoist conspira- cy was uncovered involving, among others, former ]foreign Minister Clementis, at least three other Ambassadors besides Outrata were recalled to Prague. The others included Bohuslav Kratochvil from New Delhi, Rudolf Bystricky from London, and allegedly Adolf Hoffmeister from Paris. In addition, Alexander Kunosi has reportedly been subject to recall from Buenos Aires for some months, although he is currently heading the Czechoslovak dele- gation at the UN ECOSOC session in Santiago, Chile. (C SD Praha 556, 8 Mar 51; U )IYT 5 Mar 51; 25X1 C R YBIS, 2 Mar 51). COMMENT: The background of each of the recalled diplomats is similar to that (1) each was a Johnny-come-lately to the Communist Party; (2) each, either during or after the war, has spent long periods of time in Western countries; and (3) each has been friendly either with Clementis or with Pierlinger, a Socialist opportunist who jumped on the Communist band-wagon just before the coup in 1948. The spectacular defection of Kratochvil suggests that perhaps some of these diplomats may have been considered by Praha to have been potential (Is- factors and, hence, called back 'pefore the incipient purge was made public. e*,' YUGOSLLVIA. Yugoslav White Paper. The Yugoslav Foreign Office has issued a 481 page White Paper, accusing the USSR of applying military pressure against Yugoslavia and supplying the Satellite armies with arms and troops with which to overthrow the Yugoslav Governments A Yugoslav of- ficial has stated that the document will be forward edto the UL (R PBIS, `Belgrade, 9 March 51). COMMENTS The issuance of the Yugoslav White Paper is another indication that the regime is concerned about an attack this year and is taking precautions to forestall it. The documentation Approved For Release 2001/09/04 1CIA-RDP79TO1146A000100080001-3 Approved Fo lease 2001/09/04: CIA-RDP79TO11 00100080001-3 TOP SECRET and filing of its case with the IS will facilitate UN action in the event of attack. In his recent Reuters' interview Tito stated that the question of Satellite rearmament, in violation of their peace treaties, should be discussed at a Council of foreignMi inters and bindic the ON. that, if the problem was not solved, it might at this early date, the Yugoslav Government By issuing its White Paper roblem in to dis may hope 'to pat pressure on the Soi~dicateothat thecZ'itotregime, knowing a Cam, vu the other hand, it may does not consider ,that a Big 4 solution to the problem is impossible, it wise to delay filing its case with the UN. wQM Belerade and Athens to Exchange Military Attache. The Yugoslav Direc mili- and Greek Governments have apparently agreed to the exchange the to Belgrade~orThis tary attaches. The GreekG~ner ~alnStaff seotheir MLformer Intelligence of the Greek latest step in the normalization of relations bweenmtheettwo countries, however, does not appear to presage an initiation alks. a recent conversation between Yugoslav Ministerto Greeciste a Greeked under-secretary of the Toreign Office, the Yugoslav the view that the community of interests of the two countries was clear, but that.there was no necessity to coordinate their mmilita eparatin since this could be accomplished in a very e The exchange of military arose, (S Athens 2915, 7 Mar 51). COMMEI~ attaches is another step in the gradual amelioration of relations be- tween Greece and Yugoslavia. TOP SECRET 2 Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 Approved Forlease 2001/09/04: CIA-RDP79T011464900100080001-3 and filing of its case with the UN will facilitate UN action in the event of attack. In his recent Reuters, interview Tito stated that the question of Satellite rearmament., in violation of their peace treaties, should be discussed at a Council of Foreign Ministers and indicated that, if the problem was not solved, it might be brought before the UN. By issuing its White Paper at this early date, the Yugoslav Government may hope to pat pressure on the Soviet Union to discuss the problem in a CTM. 'u the other hand, it may indicate that the Tito regime, knowing that a Big 4 solution to the problem is impossible, does not consider it wise to delay filing its case with the UN. rQN Belgrade and Athens to Exchange Military Attaches. The Yugoslav and Greek Governments have apparently agreed to the exchange of mili- tary attaches. The Greelovernment has chosen the former Director of Intelligence of the Greek General Staff as their MA to Belgrade. This latest step in the normalization of relations between the two countries, however, does not appear to presage an initiation of military talks. In a recent conversation between Yugoslav Minister to Greece and a Greek under-secretary of the Foreign Office, the Yugoslav Minister reiterated the view that the community of interests of the two countries was clear, but that.there was no necessity to coordinate their military preparations since this could be accomplished in a very short time when the occasion arose. (S Athens 2915, 7 Mar 51). COMMENTD The exchange of military attaches is another step in the gradual amelioration of relations be- tween Greece and Yugoslavia. TOP SECRET 2 Approved For Release 2001/09/04 :. CIA-RDP79T01146A000100080001-3 Approved FoIease 2001/09/04: CIA-RDP79T011400100080001-3 TOP SECRET SECTION 2 (EASTERN) "C" TURKEY. Premier Menderes Cabinet Resigns. The Turkish Cabinet resigned on 8 March, Premier Menderes had been in office since the general elections last May, and he indicated that his government was resigning because it had completed the task entrusted to it, (U NYT, 9 Mar 51). COMMENT: The re- signation of the Turkish Cabinet is due to internal party politics and will not alter Turkey's position on basic national and international issues. In the last few months it has become increasingly clear that the Cabinet, which was hastily formed after the Democratic Party's unexpected success in the last general elections, was experiencing considerable internal dis- sension because one faction wsthin it felt that President Celal Bayar was injecting himself unnecessarily into Cabinet.affairs. Premier Menderes has become increasingly discontented over this situation and has been anxious to resign. Apparently he promised to remain in office until the passage of the national budget which occurred on 28 February. President Bayar, having now had sufficient time to deliberate over the choice of a new Premier, will probably make an appointment designed. to bring about greater harmony between the President and the Cabinet, IRAN. Parliament?= _Conaittee ApiDroves Oil Nationalization. The Parlia- mentary committee studying the ratification of the supplementary oil agree- ment'with the Anglo=Iranian Oil Company (AIOC), voted unanimously for nationalization of the oil industry 8 March, a few hours after the funeral of Premier Razmara who was assassinated Wednesday morning, allegedly be., cause he had opposed the plane The recommendation now has to be submitted to Parliament and.the committee has asked that its term of office be ex- tended two months for further study of its nroposal. A demonstration against the AIOC has been called for tomorrow by Seyyid Kashani, one of Iran's most politically active religious leaders and reportedly the leader of the ex- tremist religious sect Fayaden=,i=Islam (Crusaders for Islam) to which Razmara's assasin admitted membership. (U NIT, 8 Mar 51). COMMENT? Although most thinking Iranians agree that Iran is not equipped to run a nationalized oil industry, emotions on this subject have been aroused to.such a pitch recently by the continuing agitation in favor of nationalization, by Razmara's recent speech in which he appeared to withdraw his support for nationalization, and by his subsequent death that any vote taken by the commission at this time would have been likely to be in favor of nationali- zation. Although the recommendation. must still be submitted to Parliament, the prospects for a vote in favor of nationalization appear at the moment to be high. Because the chief company affected by the move will be the AIOC, which is partially owned by the British Government, vigorous and pro- longed British effort to prevent nationalization can be expected. The movement, however, is apparently gaining new adherents in Parliament among the deputies. The religious element headed by Kashani apparently plans to continue its agitation and now that Razmara is gone there is little likeli- hood of the emergence of a Prime Minister strong enough to oppose the pro- posal if it is submitted to the vote in the immediate future, Approved For Release 2001/09/043 CIA-RDP79T01146A000100080001-3 Approved Fo lease 2001/09/04: CIA-RDP79T0114'rr? W00100080001-3 TOP j ;CRET 25X1X "B" SYRIA. t - tat ant S ri n DeputtChi?f of Staff. ' av,tani, leader of the Arab Socialist Party n Syria, re- Akq'am prove pu y Ohie$" of Staff Shishakli last December for telling an American official of the 'apline do. that the Syrian Army was prepared to defend the Tapline against the ftuaetans and to fight side by side with the Western Allies. Shishakli explai,ed to Rawrani that he had made the statement purely out of courtesy, that at heart e hated the British and Americans who caused the loss of Palestine, and that, like Hawrani, he was only awaiting an opportunity to take revenge on the Anglo-Saxons. Hawrani is said to have rejoiced in this 25X1X assurance from Col Shishakli. calculated to cement their mutual political relations, and it should not be regarded as overly alarming. Shishakli has in the past supported Prime Minister Qudsi's pro-Western foreign policy and has allegedly made pro- Western statements, such as his comment to the American Tapline official. Nevertheless, he is quite ;,apable of expressing the opposite view when it seems politically expedient. Hawrani, more than Shishakli, is capable of ousting Prime Minister Qudsi and replacing his Populist Government with one more amenable to army interests. This last is presumably what Shishakli desires. Both Shishakli and Hawrani prefer to achieve their aim by Parlia- mentary means. As evidence of their anti-Qudsi strategy, in recent montths Hawrani has increased his criticism of the Qudsi Government, has demanded a coalition to replace it, and may be successfully negotiating a rapprochement with former cabinet Minister Nizam al-Din with a view to reviving a strong Liberal Republican opposition. That Qudsi has apparently seen the storm warnings is shown by a report, later officially denied, that he planned to eliminate the growing opposition by in a coalition government. (OCI Daily, 19 Feb 51). Though these intrigues contain the elements of political upheaval, no prediction can be made regarding the imminence of an overthrow of the government. TOP SECRET Ia. Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 Approved Fo lIease 2001/09/04: CIA-RD.P79T01146,000100080001-3 TOP SECRET "A" THAILAND. Coup Attempt Possibly i.n,Frogress. The Bangkok correspondent of the Singapore Straits Times reports a ""revolt: against the military regime in Thailand by disgruntled Police, Army and Navy officers." He said that a number of police officers have been detained, that many arrests are being made and that a warrant has been issued for the arrest of Rear Admiral Taharn Kamhiran, former commander of the Thai Marine Corps, who is said to be the leader of the. plot. Taharnas residence, some 80 miles west of Reuters~ Bangkok, is reported to be "surrounded by armed Marines". Singapore Bureau, in filing this Straits Times report to London, stated that no official confirmation of the revolt could be obtained in Singapore but forwarded the comment of an "authoritative source" that the event was probable, because rumors of "the plot" had been circulating for weeks". (R FBIS wire, 9 Mar 51). COPM`(ENT: Rumors and. reports of a variety of coup plots in Thailand have been in circulation for the past three months. Many of these have claimed Chinese Communist and/or Soviet connivance in the cou planning and. have claimed that disgruntled officers of the rivalry= ridden Thai armed forces were cooperating with the Communists. A regularly- mentioned figure in these reports has been the deposed Admiral Taharn, who was a leader in the last unsuccessful coup attempt. Recently, such reports have also claimed that the former Thai Premier, Pridl, who is said to be conniving with Taharn, and whose presence in Bangkok was rumored in early Mean- March, has thrown in his lot with the alleged Communist plotters. while, both Chinese Communist and Viet Minh propaganda, in virtually iden- tical utterances; have been putting out a steady series of attacks on the present Phibun regime, the most recent of which hinted that changes were imminent. (See OCI Daily S March). From the fragmentary press report available, it is impossible to judge whether the present action represents the forceful suppression of an incipient coup attempt by Premier Phibunos forces or whether an open bid for power by coup plotters is actually in progress. The question of possible Communist involvement in the affair is similarly obscure at present. "C" MALAYA. Press Launches Independence Movement. A campaign for Malayan in- dependence patterned after the Indonesian independence movement has been launched by the Singapore Malay press. Extremists in the movement are be- 25X1A 25X1A 1; SST^_,a vsi 11 inar to cooperate with Communist factions in Singapore o - a. t _ _ t u r--70- . Malayan independence o s p Other Malays, members o who fled to Sumatra to avoid arrest have reportedly joined the movement. A branch of Panitia is thought to be active in Kuala Lumpur and the above report would indicate that its activities may have been extended to Singapore where contact between the former MNP members and Malayan Communists would be possible and where the movement could capitalize on Muslim unrest stemming from the December riots. (Panitia) was es a fished in Dakar a n y f th banned left=wing Malay Nationalist Party (MNP) Tw 191-0 bT 5 peninsular Malays. TOP SECRET 5 Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 Approved ForWlease 2001/09/04: CIA-RDP79T01146"00100080001-3 TOP SECRET INDOCHINA. Viet :fficial Praises French. At a dinner in honor of General De Lattre, Tran Van Kha, the new Minister of National Economy, delivered a "fulsome and unrestrained" -ilogy of De Lattre, the French Union, and French "presence" in. Indochina. His speech. met with a mixed reception on the part of many Vietnamese present. (S Weeka No. 9, 6 Mar 51). COMMENT', This speech indicates that the Tran Van Huu clique, which includes the above mentioned Tran Van Kha,, intends to rely heavily on French favor to maintain itself in power. Viet Minh CaLabilities Without being specific, French G=2 states it has ""some evidences" that "something could happen" in Tonkin during the last ten days of March. French G-2 also reports that a Russian-Chinese mission arrived in Tonkin on 10 February to ascertain Viet Minh capabilities for a new offensive: Pursuant to a report in the last WEEKA that Viet Minh units had been ordered to conserve ammunition, stockpiles earmarked for the Viet Minh are reportedly being assembled in Kwangsi but are not being deli- vered to the Vie+. Minh at present. (S Weeka No. 9, 6 Mar 51), COMMENT- Reports from several. sources indicate that the Viet Minh is regrouping for an offensive which rY.ll take place, at the earliest, in the latter half of March. Reports that arms are being stock-piled in Kwangsi for the Viet Minh suggest that the major Viet Minh effort in Tonkin will not take place as early as 15 March, the date predicted in an SO report, These reports may also indicate that the Chinese are making arms almost, but not qu::e, available to the Viet Minh as a means of bargaining with Ho Chi Minh, AUSTRALIA. High Court Invalidates Act Outlawiy Communist Party, Australia's High Court ruled on 9 March that the Communist Party Dissolution Act is in- valid. The Government is expected to appeal the decision to the Privy Council in London--the highest appeal court in the Commonwealth. (U AP Sydney, 9 Mar 51), COMTENTa The Dissolution Act forbids employment of Communists in key industries.' However, the Government may still rely upon provisions of the Crimes Act which penalizes any individuals or groups who seriously dis- rupt industry, CHINA. Chinese Communists Fig Currency Depreciation. The Chinese Communists have forbidden person entering and leaving China from carrying Jan Min Piao (Chinese Communist currency) under penalty of confiscation. Persons attempting to '"deflate" the currency are threatened with prosecution. In the meantime, the value of the'Communist currency has been falling in the Hong Kong free market, with 4,500 JMP now being quoted for a Hong Kong dollar, as compared with the official 3,880 rate. (U iK Reut, 8 Mar 51)o COMMENT. This develop- ment evidences the growing concern of the Chinese Communist authorities for the inflationary pressures arising from their involvement in the Korean conflict. According to one report, the Peiping government increased its note issue by 2.25 trillion JMP (some US$100 million) in the second half of 1950. January price indices in Peiping were reportedly about 13% above the previous month's levels. Meanwhile, Communist broadcasts have announced that several stores in Tsingtao and Hangchow were closed as a result of improperly raising prices. TOP SECRET Approved For Release 2001/09/045: CIA-RDP79TO1146A000100080001-3 Approved Fol40elease 2001/09/04: CIA-RDP79T0114fi.4000100080001-3 TOP SECRET "C" Dispersion of CH'EN Yi!s Forces. A Chinese source with contacts in Peiping states thPt the dispersion of CH'EN Yi's forces (the 3rd Field Army) was designed to reduce his chances of success should he attempt military opposition to Peiping. Source alleged that Peiping cannot afford the risks involved in removing CH'EN from his present position. (C Singapore 57560, F-6, 28 Feb 51). COMMENT: Of the 3rd FA, the bulk of the 8th and 9th Army Groups, plus elements of the 11th AG, are known to be in Korea. The present location of the 7th and lOtr "Gs is uncertain. Although the frequent reports of CH'EN's disaffection have not been reliably confirmed, the above report is regarded as possibly true. "C" Endures Food Shortage for Second Consecutive Years Consular econo- mists in Hong Kong, in an analysis of the current food situation in China, state that 1950 food output for all China, including Manchuria, is about 136 million metric tons, as compared with 128 million metric tons in 1939 and a prewar annual average food supply (output plus imports of about 2 million tons) of 142 million metric tons. During 1950, the food situation in urban sections showed a marked improvement as evidenced by an,abundant supply and stable prices. The marketing situation also showed some improve- ments. Nevertheless, these outward successes were deceptive. Much of the accomplishment was based on a ruthless policy of starving the peasants and feeding the urban population for political motives. Although estimated 1950 output is larger than output in the poor 1949 Year, it is doubtful whether the food situation has shown much improvement, since there.was a considerably larger carryover in 1949 than existed in 1950 Since the beginning of 1951, Communist vernacular reports are again giving publicity to possible outbreaks of famine in Central, North and East China. While the Chinese peasants are known for their patience, it is doubted whether they will remain silent when they are forced to tighten their belts for a second consecutive year after "liberation." (U Hong Kong D-1046, 30 Jan 51). COMMENT-. The significant conclusion of this analysis - that the Chinese Communist regime will face more active peasant resistance this spring as a result of a food shortage endured for the second consecutive year - is consistent with increasing severity of Communist security measures. Because peasant resistance tb"the'regiu& is'localized and not-organized,it is n6t'-- 4ptpected. tb threaten the, regime's control in most areas. However, thie r.esis- tance, if active and widespread, will reduce the regime's military potential by decreasing Communist control over agricultural output Pn.d reauiring the ~:jk diversion oftrob to maintain internal security "All `Srttlemezt of Tibetan Status. According to a press story Communist China and the Government of Tibet are about to begin negotiations for peaceful settlement of their dispute. A Tibetan delegation has been invited to Peiping to conclude a pact conceding Tibet's defense and foreign relations to Chinese control, and guaranteeing continued rule of the Dalai Lama's hierarchy. '(U NYT, 9 Mar 51)a COMMENT: 'No available for this report, attri- buted to unidentified source in Kalimpong. It sounds plausible, however. Commu- nist guarantees of internal autonomy, of course, are worthless. By reserving rights for the defense of Tibet the Chinese Communists would be able to control the government and place troops'bn the frontiers of Nepal and India. TOP SECRET Approved For Release 2001/09/047: CIA-RDP79TO1146A000100080001-3 Approved For Wlofease 2001/09/04: CIA-RDP79T011460100080001-3 "C" KOREA. Farmer refugees Permitted Return to 37th Parallel. A tress report states that ROK Home Minister CHOUGH Pyong Ok announced on 7March that the military situation has improved sufficiently to permit farmer refugees to return to their homes as far north as the 37th Parallel. Permission has been limited to farmers and their families in order that they may start spring sowing. (R FMS Ticker, 7 Mar 51). COMMENT: While the ROK's food position is presently somewhat better than might have been anticipated in view of war conditions, the ROK Government can not afford to miss any agricultural opportunities. An obvious secondary reason is to alleviate the serious refugee problem in the Pusan-Taegu area. TOP SECRET 8 Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 Approved For ase 2001/09/04: CIA-RDP79T01146"M 00080001-3 " , TOP SECRET SECTION 3 (WESTERN) GERti MI Y. Germans Only Mildly Pleased ,rith Western Control RQvision.Q Wiest Germans. 7e. -that the .revis=ion OTi ;:e Occupation Statue, announced by the Western .Allies on 6 is welcome enough as far as it goes, but that it is already out of date, The revision, based on the New York decisions of September 190, reduces the rights of the Allied High Commissioners to control affairs of the Federal Republic. In return for the trest German assumption of prewar external debts and a promise of ;material cooperation in ',Western defense, the Allies have granted Donn authority to set up its mm Foreign Ministry with limited po ?rc:m and have given up their revierw of Federal and state legislation, most of their controls over German foreign trade and exchange, and control of the distribution of funds, food, and other necessities. The Allies have also announced that their 7o,~4-ers .elating be t i1.e decors c nt abio1~. of industry, chec 11 - Ltion, DP's and refugees ~roul(l. be abandoned as soon as the Federal Hcpulblic has satisfactory le ;ielat,_on on these subjects. Circles reflecting Goverment o inion express the that the revision embodies a step forward, but hope that soon a 'ilarge revision" will be made. The opposition Socialists call the present action "small comfort". (TJ Frankfurt 72 _3, 7 l!ar ~l) , C~??.M PT s The West Gen cans will not be satisfied with an,,; shor7c o:C complete abolition of the Oc- cupation Statute, ' East ErzlaliS Halt rOa~. ] , East Gorman authorities have ind:icaTec. crl- .SHay 'may limi`Crs_i~y leni s of coal from western Germany to west Serlin, in retaliation for recent Allied controls over west Berlin canal traffic. (OCI Daily, 7 .'Lar al) . T': ey have stopped the first four trains of a total of 45 ',v'` ch were, according to an car eement bet bon east and west l.ermans, to he er]t1J Cited to carry coal into '3crlin. These ! trains wore intender'. to ,rove the coal back--loZ r e--,al.ting:; from the closing`- by the cast Car: t. ri of the 1ittelland Canal locks on 11 January, Although the se four trains were eventually allom :_'! to proceed, the ste:tus of the remaining 41 is unclear, since no more of the trains in this group have been permitted to enter the Soviet Lone, (S Berlin 1131, C Mar >l), C0M: NT: ALllthough limitations on coal ship ones to :rest Berlin will not ':ho as to the s tockpi +,1_Il pro, 1 mr:i they would have been in ;,inter, those cast German measuu 4n 11 still handicap west Berlin's industry. FRPNCE. End of Cabinet Crisis in Sight. An early break in the current Caine crisis is now possi e inasmuch as there is a "considerable trend" among Radical Socialist (Right of Center) deputies in favor of yielding to Popular Republican (Pu'R-.P) insistence 9 Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 Approved Fo lease 2001/09/04: CIA-RDP79T0114QA000100080001-3 TOP SECRET on a single ballot electoral reform, and. the politicians are growing "tired of the crisis". The Socialists in fact admit that its pro- longation would help the Gaullists. The next Government--whether or not Premier-designate Queuille is invested by the Assembly--will be generally regarded as one of "liquidation", only undertaking es- sential tasks before elections, which an increasing number of political leaders now desire in mid-Juno. (C Paris 5236, B Mar 51). COi,XY NT: The deadlock between the Radicals aid the MRP on electoral reform has been the fundamental cause of the crisis. Inasmuch as sentiment is growing in France that this Assembly is "worn out" and should be terminated before November-the scheduled data for elections-and the coalition parties are agreed that some anti-Communist electoral reform is essential, an early resolution of the impasse can be expected. C AUSTRIA. Communist Purge Rumors are Depreciated. US 'sigh Comrais- sioner Donnelly s a es 77 a Unite c Press correspondent received the report of Communist purges from an Austrian police official. Donnelly points out that although -there have been rumors of Titoist rifts in the local party, the story appears exaggerated and the source sometimes is not reliable. An investigation of the story is under way. (S Vienna 1942, 7 Tear 51). COL1TE11NT: The story of four Communist members of the Central Committee belong-purged for Titoist sentiments does sound exag- gerated. No other evidence has been received to support this report, and purges in the Austrian Party have, at least up to the present, been almost negligible. "C" DMIRK. Government to Submit Economic Legislation to Parliament. The Conservative-Moderate Liberal Govprnmen , has reversed its former position (OCI Daily, 3 T.iar 51) and decided to submit to parliament comprehensive proposals for remedying the critical economic and foreign exchange position. A grass root survey indicated that public opinion would be unfavorable in the coming Landsting (Upper House) election, if no program was proposed. The decision avors the present Government which will claim credit for action taken and blame the opposition for obstructionism, if affirmative action is delayed. (C Copenhagen 74), 7 Mar 51). CO,,U;'ENT: Public opinion has become increasingly critical towards the political parties for diliatoriness in attacking inflation and the foreign exchange imbalance. 7-tile the above decision represents an astute political maneuver, undoubtedly all democratic parties will be impelled to attempt to solve the economic situation, which cannot be permitted to continue much longer. "C" CANADA. Government to Raise New Brigade for European Service. Chan Governmntplans for 1951 overseas troop commitments have now reportedly crystallized in the formation of a new brigade to be sent to Europe under NATO commitments, plus the reinforcement to brigade strength of the battalion now fighting in Korea. The troops TOP SECRET 10 Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 Approved Foelease 2001/09/04: CIA-RDP79T0114ir000100080001-3 TOP SECRET intended for Korea have almost finished their training at Fort Lewis, Washington, while the brigade for Europe is to be raised by the end of 1951. Some units are already available to form the nucleus for the new brigade, and army officials are confident that present recruit- ing methods can provide the necessary remainder. (C Ottawa Desp. , 23 Feb 51; Montreal Daily Star 6 Mar 51). C0101.210: The Government has moved s l o w l y i n i sP ans to commit Canadian roops to overseas service because of traditional French Canadian opposition to such moves, and is specifically pledged to obtain Parliamentary approval for the dispatch of troops to Europe. The approval will undoubtedly be forth- coming, but will probably occasion the resumption of Opposition demands for some form of conscription, a proposal the Government is likely to resist unless the international situation becomes much more critical. TOP SECRET 11 Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 Approved For Fuse 2001TAT04P79T01146AQW1000800 DAILY DIGEST SUPPLEMENT Not for dissemination outside the Office of Current Intelligencea- Approved For Release 2001/09/04: CIA-RDP79T01146A000100080001-3 TOP SECRET Approved For lease 2001/09 F#: P79T01146 40100080001-3 (S/S Cable Supplement not for dissemination outside 0/CI)'~ -_ OFFICE OF CURRENT INTELLIGENCE DAILY SaWARY OF SIGNIFICANT S/S CABLE TRAFFIC 9 March 1951 SECTION 1 (SOVIET) "A" USSR. Deputy Foreign Ministers' Conference. The US delegation to the Deputy Foreign Minis tern' conference, while warning that it is too soon to reach any definite conclusion on the ultimate Soviet position, be- lieves that Gromyko& s initial propaganda blast may indicate that the USSR is primarily interested in exploiting this preliminary conference for the propagation of their chief lines on German rearmament and the reduction of the armed forces of the Four Powers. In commenting upon the Soviet delegation's introduction of substantive matters, the US delegation advises that, the three Western powers have as yet no agreed tripartite position or firm individual position on substantive questions. (S, S/S Paris 5218, 7 Mar 5l).. 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