OFFICE OF CURRENT INTELLIGENCE DAILY DIGEST

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CIA-RDP79T01146A000100370001-1
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RIPPUB
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T
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17
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December 19, 2016
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May 16, 2005
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1
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Publication Date: 
April 12, 1951
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SUMMARY
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Approved For Release 2a / tDP79T011 46k01 00370001-1 OFFICE OF CURRENT INTELLIGENCE DAILY DIGBST Date: APR 12 1951 NOTE; 1. This summary of significant report, has been prepared primarily for the internal ice of ti Office of Current Intelligence. It does not represent a complete coverage of all current reports in CIA or in the Office of Current Intelligence. 2. Comments represent the preliminary views of the Office of Current Intelligence. 3. Marginal letter indications are defined as follows; "A" items indicating Soviet-Communist intentions or capabilities "R" - important regional developments not necessarily related to Soviet/ communist intentions or capabilities "C" ? other information indicating trends and potential developments NAVY review(s) completed. DIA and DOS review(s) completed. COPY NO. 01-) 4J1. v3 Approved For Release TcP/0SiCRE ._RDP79T01146A000100370001-1 Approved For., Release 2005/06/09 : CIA-RDP79T0114400100370001-1 `W TOP SECRET SECTION 1. (SOVIET) "C" USSR. New Reg elation in Lithuania Bars Out Reports of Di af.fe_rt on. An. January, forbids "arbitrary" posting of notices by organizations, enter- prises, institutions and private citizens,, Violators of this decision are 25X1 obligatory -decision.of -the City Soviet of Vilnius, Lithuania., passed last subject to a fine of 100 rubles or up to 30 days corrective labor.Inc for a two year period. "law" will remain in effect within the city ern i C011T EM: This regulation, would appear to bear our unconrinmea p ,s -t anti-Soviet remarks are often seen either posted or chalked on walls in cities and towns of the Baltic area. However., the mild punishment and limited duration of the law suggests that the Soviets are not overly alarmed at this "passive" activity. "fl" Moscow Clalins MacAathur's Ouster Due to His Failure as the Inst5ni- ment of g?ressive U5 Pola 'Radio Moscow said. that President Truman's explanation of his order relieving Gen. MacArthur of his Far East Coz and "sounded er tr. erely strange" since MacArthur's execution, of his co viands .had been carried out "with Jashingtont s authorization," and "'Mac rthua did nothing that disagreed with the aggressive policy of the ruling circles in the US." Moscow added that Mac=rthur's ouster was due, therefore, to his "failure as a Supreme Commander." His troops were "repeatedly defeated" by the "heroic" Korean People's Any and the Chinese volunteers, and he repeatedly revealed "the true plans of the US Government." "With, his dis- missal," continued Moscow. ""the US ruling circles hope to: (1) blame the failure of their disastrous policy on. MacArthur; (2) give courage to their European allies, who have been frightened by the indignation of their peoples against efforts to spread the war in Asia, {3d?otn the voice of the Peace Partisans..." 1k,oscow then concluded that "the withdrawal of one advent sr Cannot alter the adventurous character of US aggressive 25X1 policy." 25X1 Approved For Release 2005/06/01: CIA-RDP79TO1146A000100370001-1 Approved For R -lease 2005/06/09 : CIA-RDP79TO114 00100370001-1 TOP SECRET "B" EASTERN EUROPE. YUGOSLAVIA. Yugoslav Employee in Praha Disappears, The av Embassy in Praha has $l Y ugo Belgrade press has announced that.the. delivered two notes requesting competent Czech authorities to investigate the disappearance of a Yugoslav radio om Embassy in Praha in the early morning hours of 31 _ note: dated 11 April,, points out that and responsibility of official eumstances suggest the participate Czech organs. The Yugoslav Charge in Praha has informed the US Embassy that he considers it highly significant that the Yugoslav Embassy employee was seized on Embassy property since the police had numerous opportunities to pick him up outside the Embassy. The Yugoslav Charge associated believes that the radio operator's disappearance isent s.probably Ambassador with a forthcoming trial, and probably that of Briggs comments that the case tends to support the belief that the trial of Clementis is scheduled for the near future. lav Governments have :re ly Y ugos n and C N. EI_ The Bulgaria s the Hungarian and Yugo Govern- il e wh ousted one another's Charges,aneeousted the ments have recalled their respective Charges. The disappeos radio operator from the Yugoslav Embassy in Praha will probably plthough cipitate the recall or ousting of Czech and Yugoslav diplomats. g no mention was made of collaboration with Tito in the einar cbar~es made against Clementis and his co-conspirators,, in previous deviationist trials the defendants have been accused of collusion with Tito, "C" CURBENT COMMUNISM AND 'R.OPAGAN-A. World Peace Council Delegation Fails I to Kee Date with UN Secretary General Lie. The recent World Peace Council WPC meeting in Berlin resolved to send a delegation to the UN to obtain a revision of UN policies in conformity with the goals of the sident of the WPC, sent a message President i Subsequently M. Joliot-Cur e, to Lie asking for an appointment for the delegation. Lie replied and later he would meet the delegation during his current European trip, he fixed the meeting for,9 April in Paris. The delegation failed to appear. Instead while waiting for the delegation, Lie received a letter from Curie had received but ten days notice of the Jabot-Curie claiming impending meeting and that this was too short a period to assemble the delegates from thirteen different nationse "However,," Curie advised, TOP SECRET 2 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 25X1 25X1 Approved For Release 2005/06/09 : CIA-RDP79T0114 A 00100370001-1 ~~ TOP SECRET "the members of the delegation have been instructed to proceed to the UN at the earliest date on which it will be possible to receive the WPC dele- gation at the headquarters of the UN." Tie replied that his heavy travel- ing schedule precluded the fixing of a date at this time for receiving the delegation at UN headquarters. In a separate memorandum, Lie acknowledged the o osals of the WPC and. t, restated the goals of the UN. COMIENT: It had been obvious from Tne g ran ng that the WFU delegation was unwilling to meet Lie anywhere but in New York. From the viewpoint of the WPC, maximum propaganda exploi- tation of their criticism of the UN requires the drama of a delegation actually visiting UN headquarters. TOP SECRET 3 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 Approved For,BeLease 2005/Q99SE0 DP79T01146A000100370001-1 W -or SECTION 2 (EASTERN) "C" IRAN. Prime Minister Ala Improves Position. Embassy Tehran reports that Prime Minister Ala's recent decision to suspend martial law in Tehran was caused by: (1) a marked decline in public alarm; (2) criticism arising from the arbitrary action by the security forces; and (3) the determined opposi- tion of the National Front to the imposition of martial law. The last factor is considered by the Embassy as the most important. Ala, who has been con- ferring with National Front leaders in an effort to secure their cooperation, is reported to have appointed four ministers in response to National Front demands. The Embassy comments that elimination of National Front opposition to martial law issue has strengthened Ala's position for the time being and that his cabinet may well receive a vote of confidence. 25X1 COMMENT: While the strengthening of Ala's position as r me s improved the situation in Iran in one respect, the magnitude of the problems facing the government provide little cause for optimism concerning any improvement in the over-all situation. Iran will have ade- quate financial resources to carry out its economic development program if it continues to receive income from its oil resources equal to that promised under the Anglo-Iranian Oil Company (AIOC) supplemental agreement. However, mismanagement of the country's finances has resulted in a stagnant industry and trade. Many workers are unpaid and the currency shortage is such that unless the note issue is increased there is danger that AIOC, the country's largest industry, will not have enough rials to pay its workers. Moreover, opposition to reform by the land-owning and merchant groups, National Front intransigence, and the continuing deterioration in the economic, political and social structure in Iran, as well as the impasse which has developed over the Iranian oil industry, are all factors which presage continuing trouble in Iran and which will probably prevent Ala or his successor from carrying out the reforms which are so necessary if Iran is to achieve governmental and economic stability. "B" SYRIA-ISRAEL. New Incidents Aggravate Border Tension. Two additional border incidents have been reported along the Syrian-Israeli frontier since the El Hamma clash of a. week ago: (1) on 10 April a Syrian-Israeli skirmish took place at the village of Nuqeib on the eastern shore of Lake Tiberias, and (2) on 11 April a brief air engagement occurred be- tween Israeli and Syrian planes in the Lake Hula region of the frontier. Reports from the US Embassies in Damascus and Tel Aviv indicate that the Syrian Army has partially mobilized and that Israeli troops have been consolidated west of the Lake Tiberias and Hula regions but have been reinforced by several tanks.' US Ambassador Davis in Tel Aviv states that, while Israel press coverage of the US representations on the Syrian- Israeli dispute are a favorable indication that US demarches have had some effect on the course of events, Israeli government spokesmen have never- theless carefully imposed certain conditions which, if accepted, would 25X1 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 Approved For Release 2005/MD9 DP79T01146A000100370001-1 mean that Israel would hold all the advantages and yield nothing. Mean- while US Ambassador Cannon in Damascus reports the views of two UN officials returning from a preliminary investigation of'the El Hamma incident. These officials, whose report Cannon indicates might need subsequent checking, expressed (1) their great concern over the potentialities of the situation in the Syrian-Israeli demilitarized zone, and (2) their belief that the Israelis were almost wholly at fault in the recent incidents. COMMENT: The series of border incidents in the as week along the yr an- Israeli frontier have resulted in a potentially dangerous situation between the two countries in spite of the forthright action of the US, UK, and France in exerting their strong influence against the development of more serious hostilities. Domestic factors within Israel apparently bar any Israeli yielding upon the fundamental dispute: Israel's drainage of land in the Lake Hule demilitarized area. Because of the Army's influence upon the unstable Syrian government and because of the mounting hostility felt by the Arab States generally toward Israel, Syrian restraint in the face of recurrent border clashes is also more difficult. "B" INDIA. Congress Party Demonstrates Awareness of Communist Intent-ions and Propaganda Techniques. The US Embassy, New Delhi, states categorically, without identifying the source of its information, that on 30 March, Kala Venkata Rao, Secretary-General of the All-India Congress Committee of the Indian Congress Party, addressed a confidential letter to all pro- vincial Congress committees saying, "Some references have been received by our office raising the question whether Congressmen can join Stockholm peace committees and sign the (peace) appeal. It is not good for our Congress organization that our members should join such committees or sign appeals as they are designed for certain political purposes". The Embassy does not know if the letter was issued with Prime Minister Nehru's knowledge and approval. COMMENT-. The above message obviously refers to the new international ommunist campaign to obtain signatures advocating a Five Power Peace Pact and universal reduction in armaments. It is believed to be the first official notice issued by the Congress Party (as opposed to the Government of India) which indicates an awareness of international Communist intentions and techniques of propaganda. It remains to be seen, however, whether this letter represents an independent move on the part of Congress rightists under President Tandon or whether it has the blessing of Prime Minister Nehru and Congress leftists as well. "B" INDIA. Fears of World War Allayed by General MacArthur's Dismissal,. According to press reports, the Indians have learned of General MacArthur's dismissal with whole-hearted relief. They had feared that under his direction the United Nations might become embroiled in a third world war. As recently as 28 March, Prime Minister Nehru had complained in Parliament about military commanders who made statements on political affairs. Still more recently, the Indian Government has sought confirmation in Washington of a report that General MacArthur had been authorized to bomb Manchurian 25X1 25X1 25X1 5 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 Approved For W ease 2005/06/09 : CIA-RDP79TO114 A 00100370001-1 TOP SECRET 25X1 bases--a report which caused considerable uneasiness in India. As a result of the General's dismissal, the Indians now hope A. fresh efforts can be made to end the war in Korea. "C" INDONESIA. Cabinet Crisis Remains Unsolved. US Ambassador Cochran reports that the Indonesian government crisis continues unsolved, security condi- tions have e political outlook has become more uncertain. 25X1 COMMENT: Efforts are still b i mode 25X1 25X1 25X1 e n t g o a ^- sue. p vices its Indonesia--the Masjumi (Moslem) Party and the Indonesian National Party. The government fell on 20 March. INDOCHINA. French and Vietnam Premier's Positions Strengthened. Military successes in Tonkin during the last two weeks have generally strengthened the prestige of the French and of Vietnamese Premier Huu's government. Huu's opponents recognize that his dislodgment will be more difficult, particularly since rumors that the French are planning to replace him with an even less popular figure have increased the number of his supporters. Indicative of this trend is a report that the country's foremost economist has finally decided accept the post of Minister of Finance. COMMENT: As the gravity of the milita y si ua on in Indochina has lessened, the French have shown an inclination to become correspondingly more intransigent in their dealings with the Vietnamese. Premier Huu has cooperated with the French and it is not likely they are contemplating his early removal. Despite a certain increase in the Huu Government's prestige as a result of the Tonkin victories, it will continue to be generally unpopular throughout Indochina. TOP SECRET 6 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 25X1 25X1 Approved Forlease 2005/06/09 : CIA-RDP79T011400100370001-1 TOP SECRET "C" Communists Ask GOI to Inaugurate Civil Air-Service to China. The Chinese Communist regime has requested the Government of India to inaugu- rate an airline route from Calcutta to China, with stops at Canton, Kunming, Chungking, and other points, according to a report from the US Air Attache in New Delhi. The Government of India hopes to organize this service using only Indian'or Anglo-Indian pilots. COMMENT: The inauguration of this air line wou.Ld provide the only air access from a non-Soviet area to Communist China. At present, the Russians (operating the Sino-Soviet Civil Air Transport Corporation jointly with the Chinese) are the only foreigners permitted to fly aircraft into China. Under TOP SECRET 7 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 25X1 25X1 Approved For a ease 2005/06/09 : CIA-RDP79T0114QAO,00100370001-1 1%W Tnp RRnRET 1"W 25X1 any air agreement with the Chinese Communists, the GOI will probably recognize the reciprocal rights of the Chinese to fly civil aircraft to India. "B" KOREA. Enemy Activities in Northeastern Korea. A US naval interrogation of two fishermen intercepted off the northeastern Korean post of Songjin on 10 April revealed that only small military detachments armed with infantry weapons were deployed in the villages in the Songjin area and that no coastal artillery pieces were in evidence. The fishermen further stated that although there were no Chinese Communist troops in the area, a "recent" UN air raid knocked out eight railway cars carrying Chinese Communist troops with "heavy" casualties. Further confirmation was given to the cutting of the coastal supply route by UN naval and air attacks. 25X1 COMMENT: The deployment of small lightly armed coax a e n ':his area is a more logical move than the deployment of major North Korean units 25X1 The "recent" presence of Chinese Communist troops in the area sugges s either the movement of replacements into Korea or the movement of casual- ties back into Manchuria. No major CCF units are believed stationed in this area. "C" JAPAN. French Views on Japanese Rearmament. The Director of Far Eastern Affairs, French Foreign Office, has expressed to US Embassy personnel in Paris his opinion that the French will be generally in agreement with the provisional US draft of the Japanese Peace Treaty. However, he stated that France holds the view that while Japan might be permitted to create -round forces, it should not have a navy or air forced 25X1 25X1 COMMENT: The creation of a Japanese Navy or it Force is largely academic for at least several years, and Japan will be under severe economic strain in maintaining even minimum ground forces. Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 Approved Fore. ease 2005I06JQ96 DP79T01146 000100370001-1 SECTION 3 (WESTERN) "C" WESTERN EUROPE. Considerable Disagreement Indicated in Final Schuman Plan Talks, The situation w1 1 e ui ' o ay a e start o e con erence in Paris. of the Foreign Ministers of the Schuman Plan countries, which is to clear away the remaining problems before signature of the draft treaty. While Monnet, the real author of the Plan, is "still guardedly optimistic" that serious difficulties will not arise, his uncertainty is obvious, .and his advisers claim to expect trouble. The aermans are eased with a com romise tentatively reached on the Saar issue but sharp disagreement is now evident among all the participating coup ries on the composition of the High Authority, national voting strength in the (advisory) Council of Ministers, and location of tie coal-steel poolts capital, In talks with Monnet, Belgian Foreign Minister Van Zeeland. has intimated he would raise at least two questions not on the agenda, over one of which--later re=examination and perhaps renegotiation of the Treaty-Monnet fears that "serious difficulties" may arise. 25X1 COMMENT: Disagreement to this extent in this final conference was -o a anticipated inasmuch as basic decisions determining the relative weight of each participant were deferred in mid-March in order to gain the publicity advantage of having the Treaty at least initialed, Van Zeeland's critical attitude is probably sincerely based, on the Belgians' misgivings,that their high-cost coal industry will suffer disproportionately under the Plan. 25X1 "B" FRANCE.. Vote of Confidence on Queuilleis Policies Due Next Week, the question of confidence on his budgetary policy and desire for elections on 10 June, with emphasis on the:,latter, and it appears 25X1 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 Approved For~RQlease 2005/06/09 : CIA-RDP79TO11~00100370001-1 w TOP SECRET 25X1 25X1 "not unlikely" that he mill have the necessary support when the vote is taken early. next week. Socialist President Auriol, who is known to favor early elections, can be expected to promote establishment of a united coalition front. The Socialists in general appear to have become convinced that -a ministerial crisis would not benefit them, and are therefore more conciliatory in their demands for "long- range anti-inflationary measuresna On the other hand, it is question- able whether the Radicals will vote tax increases although they are anxious for early elections, and many Popular Republicans (MRP) are reluctant to vote for 10 June elections because-they know they will not be returned to the next Assembly. F__ I COMMh'ENT: The Coalition party discipline in e anticipated vote is likely o ee poor, and the result close, Even if the opposition fails to muster the absolute majority needed to block Queuillets policies, the Assembly may still find it impossible to clear its heavy calendar in the coming weeks so that elections could be scheduled for June. Furthermore, the aggravated dissension evident within the coalition in recent weeks makes it unlikely that even a stop-gap anti-inflationary program can be rapidly implemented, SPAIN. Lead Sales to Soviet Orbit Continue, US Embassy Madrid reports that 200 me Eric Eons of lead bars, shipped on 29 March from Cartagena to Antwerp on'the SS HELIOS, were consigned to the Societe Financiere Econciinique' Euro eerie., Liechtenstein., and hence woulpresumably ee transshipped o zec oslovakia. The Embassy comments.that this ?is believed to be part ot" an order of 'about 1,000 tons placed by the Liechtenstein firm through various local dealers.. Filling of some orders from legitimate Western European purchasers has been deliberately held up by the Spanish Government pending shipment of lead to the Liechtenstein customer at 23 cents a pound (f.o.b. Spanish port). Minister,Suances is reported to have said he was not concerned with the ultimate destination of. Spanish lead so long as the metal is first to Western European nations, "B" MOROCCO; Nationalist Parties Plan Cooperation. The four Moroccan na ion is. pa ies, representing all ree zones, reportedly have met in the. International Zone of Tangier under the chairmanship of a visiting Egyptian Senator-journalist to sign a'pact of unity and cooperation, requiring the parties to (1) present a common front, .(2) refrain from negotiating independently with the French, and (3) refuse cooperation with the Communists: A French declaration favoring TOP -SECRET 25X1 25X1 Approved For Release. 2005/06/09 : CIA-RDP79T01146A000100370001-1 Approved For (ease 2005/Q PS FDP79T0114 AAp00100370001-1 at least the principle of..Moroccan independence is deemed a pre- requisite for any negotiations with France. Istiqlal, the most important and largest of the parties, is to act as coordinator in formulating a common policy, Announcement of the "national unity" pact was followed by order demonstrations in Tangier streets. 25X1 COMMENT: Other attempts by the Moroccan nationalists to achieve unity of . action have been fruitless. It is not likely that they will agree-in the near future upon a program of action for the independence of Morocco since there is, considerable mutual distrust, and at least one party has a notable record of. willingness to accede to French demands. The French, however, wil:L not look kindly upon Egyptian "interference", in presiding over the ,signing of this pact. The arrival of six Egyptian journalists to "investigate the Moroccan situation", and the formal note calling on Franoe to grant liberty to. Morocco have not received a cordial reception. While no serious French-Egyptian discord is likely, relations will continue to be cool for some time, "C" UNITED KINGDOM. Cabinet Nearly Split' over, 'Eudget, Issue, US Embassy onion reports that one.m nor em In-Ug new u ge e imposition of partial charges for some hitherto free medical: services-brought forth strong opposition from Cabinet Ministers Aneurin Bevan and Harold Wilson, who both threatened to resign. The Embassy attributes ? the withdrawal of their resignations to the Labor Party's desire to remain in power despite serious internal differences, and adds that,, Chancellor of the Exchequer Gaitskell's position has been enhanced as.a result of the test of strength with Bevan. 25X1 COMMENT: Apparently Bevan.and Wilson were eager to put themselves on, recd as opposing any cut in the social services. As two of the youngest men in the Cabinet, their threat of resignation was probably primarily intended as a political gesture to reaffirm their Socialist convictions anac to increase their prestige with the rank:-and-file of the Labor Party, "C" Consulates to be Closed Following Chinese Communist Order,. 'The UK Consulate at unman re y -scheduled to be close-21 25X1 in may will probably be closed immediately., following an order delivered presumably by focal Com- munist authorities to surrender Consulate property within ten days. The UK representative in Peiping was told at.,the Foreign Office that the People's Government had no knowledge of the order. The UK Foreign Office hasdecided..to close the Consulate at Hangkow in May in addition 25X1 COMMENT: The forced closure of the Kunming Consulate :o ows that of T19 and Urumchi consulates, which resulted in the UK decision to close a number of other consular offices. British-Consulates will remain open at Tientsin, Shanghai, and Canton, in addition to the Embassy at,peiping. TOP SECFET 11 25X1 25X1 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 Approved Fore ease 2005/q(l99 rsJAEI~DP79T0114fA 00100370001-1 group if it were not made to lose face In the eyes o VENEZUELA. Government Im oses Petroleum Contract over Labor Ob- ecions. T ei Venezue an'Miis er o Labor se e by decree on he tiro-month-old petroleum labor contract dispute. Workers .11 will get a wage increase of approximately 10% and a few of the "fringe benefits" demanded in the 1246-clause proposal submitted to the companies by the.all union bargaining committee. The contract, is binding for 30 months. The Minister's action was taken in spite of protests by the workers' committee. .US Embassy Caracas feels that the terms are about what the companies were prepared to grant. The oil fields are ouiet with no evidence of strike preparations.. COMAPO T: Negotiations between the companies and the argaining i ee were suspended by the Government several weeks ago when it appeared that a deadlock had been reached. Several company officials have felt that the Minister intended from the beginning to settle the contract matter himself;, and that an impasse would allow him to do so. Certain of the officials believed further that he would like to intervene in the guise of "winning the days" for labor while actually granting only enough to reduce the motive power of the committee. The committee has apparently been-strongly influenced by the outlawed Acci5n Democr~ t ica party and could have become an important weapon of t -zs revo_ u tio:nary f th workers 25X1 25X1 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 TOP SECRET ' / - 3 3 Approved For Re ease 2005/06/09: CIA-RDP79T0114WA 00100370001-~1 49. DAILY DIGEST SUPPLEMENT APR 12 1951 Not for dissemination outside O/CI and O/NE. Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 TOP SECRET Approved For R4 lease 2005/06/09 : CIA-RDP79T0114 00100370001-1 TOP SECRET CENTRAL INTELLIGENCE AGENCY 12 April 1951 SECTION 1 (SOVIET) YUGOSLAVIA. Requests for Arms Aid from West Revealed to Yugoslav People. Goaded on by public disclosures in the Western press, the Yugoslav Government has informed the Yugoslav people that it is re- questing through normal commercial channels "certain quantities of de- fensive weapons" to strengthen its arms industry. In a Borba article, Deputy Minister of Foreign Affairs Veljko Vlahovic explained that the decision to obtain arms from the West would not involve any change in YugoslaviaTs present policy of independence of any bloc. However, Yugoslav leaders have been on record to the effect that they would seek arms when they believed the time had come to strengthen the army against possible aggression. The Deputy Minister said the decision to seek arms from the West was taken because of the intensive rearmament of Hungary, Rumania, and Bulgaria in violation of their peace treaties, and the in- creased number of border incidents provoked by Yugoslavia's Satellite neighbors. COMMENT: Yugoslav leaders have been carefully preparing the people for this announcement in recent months. In speeches during February and March Tito publicly admitted th? tthe Government was taking certain measures for the procurement of machines and raw materials for the development of its war industry,,. but added that, for the present, Yugoslavia could not receive or purchase armaments or weapons without increasing tension with the Cominform states. The release of the Yugoslav White Paper on 9 March probably was partially intended to prepare the Yugoslav people and Party for the admission that Yugoslavia is seeking arms from the West. The Yugoslavs have been negotiating for arms with the French since late 1950 , and in February 1951 presented a list of military requirements to the UK. The Yugoslav.- French negotiations will probably be concluded this week according to a French Foreign Office spokesman. TOP SECRET 13 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 25X1 Approved For-, lease 2005/06/09: CIA-RDP79T0114$ 00100370001-1 TOP SECRET SECTION 2 (EASTERN) "B" JAPAN. Yoshida "Shaken" at MacArthur's Dismissal. US Political Adviser Sebald in Tokyo cables that he called on Premier Yoshida on 11 April and advised him of MacArthur's dismissal. The Premier was "visibly shaken" and stated that the General's departure would come as a "tremendous shock to the Japanese people". Yoshida added that he feels personally indebted to MacArthur's guidance for his ova, political success and he attributed the retention of the Emperor institution to the General's influence. In reply to Sebald's personal expression of hope that the Cabinet would not follow the rule of traditional "responsibility" (by resigning) and would carry on during the initial period of Ri.dgway's take-over, Yoshida gave assurances that his Government would carry on. With an "absolute major- ity in the Diet" and the probability that the Liberal Party will be successful. in the forthcoming local elections, there appeared to 'be no reason why the Government should not feel secure, The Premier stated that he would convey the gist of the conversation to the Emperor and to the Cabinet and he felt that they would be greatly heartened to learn that the US cooperative policy towards Japan and towards of a peace treaty remains unchanged. 25X1 SECTION 3 (WESTERN) U .1, Germans Propose Defense Ministr and Tactical Air Force., At the eighth Allied-German defense conference, the German representative, Theodor Blank, proposed that the Federal Republic create a Ministry of Defense responsible to the parliament. Under the Defense Minister would be an Inspector General, supreme commander of all German troops. The French representative commented that these proposals were rather far from the Brussels agreement and expressed the view that the Western Foreign Ministers wished to avoid the reestablishment of a defense department in G ermany. The Allied representative, however, agreed to take note of the German proposals. At this same meeting, the Germans also outlined pro- posals for a German tactical air force of about 2,000 planes, to be organized on US lines, emphasizing fighters, but also including fighter bombers light bombers, and reconnaissance aircraft. 25X1 ccupation Troops, which could be expanded into a Ministr of Def n y e se. Despite its name, this office's main function has been the conduct of negotiations on a German defense contribution. TOP SECRET 14 Approved For Release 2005/06/09 : CIA-RDP79T01146A000100370001-1 TOP SECRET UNCLASSIFIED when Areg~aOJfb0~p aAV or declassi- fied when filled in form d 1 etac ed rom con ro a ocument. 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