DAILY DIGEST JUN 11 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000200370001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 27, 2016
• Document Release Date: July 9, 2012
• Sequence Number: 1
• Publication Date: June 11, 1951
• Content Type: SUMMARY

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Y" 9 C R S 49229
COPY N?039
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST
JUN 11 1951
Date :
NOTE: lm This sus of significant reports has been
prepared primarily for the intern Al use of the
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 Cements represent the preliminary views of
the Office of Current Intelligence.
3 marginal letter indications are defined a
foll0Ws-o
*Ae items indicating Soviet-Communist
intentions or capabilities.
'R* - Important regional developments
not necessarily related to Soviet/
Communist intentions or capabilities
ImC4 - other information indicating trends
and potential developments
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JAPANESE PEACE TREATY
"A" USSR Proposes a Japanese Peace Conference in July or August. On 10 June the
Soviet Government delivered to US Ambassador Kirk a note proposing: (1) a
multilateral peace treaty with Japan; (2) the working out of a treaty on the
basis of the Cairo-Potsdam declaration and the Yalta Agreement (which, ac-
cording to the USSR, means the convocation of a CFM consisting of the USSR,
US, UK and Communist China; and (3) the holding of a peace conference in
July or August of representatives of all countries whose armed forces took
part in the war against Japan to, consider available draft peace treaties.
Copies of the notes were sent to Britain, France, Communist China, India,
Pakistan, Burma, Australia, Canada, New Zealand, the Mongolian People's
Republic and the Korean People's Republic. COMMENT:
This latest Soviet proposal appears to be a direct rebuttal. to the US note
of 19 May and is timed to coincide with the current Japanese treaty negoti-
ations of Ambassador Dulles in London and Paris. A possible shift in empha-
sis to win support for the position of the USSR and Communist China regarding
Japan is Moscow's suggesting for the first time a date for a conference of
representatives of all countries participating with armed forces in the war
against Japan, rather than a CFM meeting. Additionally, the detailed refu-
tation of charges made in the US memorandum of 20 May reflects sensitivity
particularly regarding failure to repatriate Japanese POW's, the extent of
Soviet participation in the war against Japan, and the special interests of
the USSR in Manchuria.
SECTION 1 (SOVIET)
MBM USSR. Soviet Industrial Production Incentives. Moscow Radio announces that
Iuibyshev Ballbearing Works-has become an Enterprise of Collective Stakhanovite
Rork as a result of following the example of the Moscow Kalibr Works with
which it has concluded a number of "competition contracts." Recent innova-
tions in this factory include the following: (1) the hour graph; (2) indi-
vidual economy accounts; (3) maps of statistical control; (4) "Socialist"
keeping of machinery. COMMENT: The introduction of
these measures shows the continuous emphasis on increasing the production
of Soviet industrial workers, and is in line with previous well publicized
incentive inducements and inter-factory competitions.
MBM EASTERN EUROPE. ALBANIA. Anti-Tito Refugees Oreanized.
ugoa av
Cominformist refugees in Albania have established a committee in Tirana for
the purpose of proselytizing non-Communist Yugoslavs and broadcasting anti-
Tito propaganda over Radio Tirana. the Albanian
Government has established camps for both Cominformists and non-Communist
refugees which are under the supervision of a Directorate for Yugoslav
Refugees in Shkoder. The Cominformist Yugoslav refugees, located in Shkoder,
Pier, and Tirana, consist mainly of ex-Yugoslav army officers from Montenegro
who enjoy preferential treatment in regard to freedom of movement, the
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cigarettes, but no pay.
on a state farm in southern Albania where they are given shelter, food and
carrying of firearms, salaries and living accomodations. Most. of the non-
Communist refugees are Montenegrins who are employed as agricultural workers
Judging available monitored broad-
casts, a major portion of Albanian broadcasting time to eastern Europe is
composed-of ,anti-Tito material in Serbo-Croat.
"B" BULGARIA. Simultaneous Peasant Demonstrations Reported. .The Turkish press
and radio during the past week have reported simultaneous anti-Communist
peasant demonstrations throughout Bulgaria. The US Consulate in Istanbul
states that "uprisings in Bulgaria have been partially confirmed" by
Bulgarian immigrants interrogated in Turkey who stated that demonstrations
.took place in the widely separated cities of Shuman, Pleven and Svilengrad
late in May. The immigrants also stated that anti-regime pamphlets have
been recently distributed in large Bulgarian towns.
COMMENT: Despite claims of immigrants and the
Turkish press that recent demonstrations were simultaneous, there is still
insufficient evidence to confirm the existence of any coordinated resistance
movement in Bulgaria.
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CZECHOSLOVAKIA, Op-position to "Peace Plebiscite" Cited, The US Legation
in Praha reports limited clandestine circulation in Praha of a letter of
unknown origin attacking the current Communist "Peace Plebiscite." The
letter points out the compulsory nature of the campaign and warns that non-
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participants risk Moscow-directed retaliation.
COMMENT: Such letters attacking Soviet maneuvers have been sporadically
undesirable, such as officials of the pre-war government, members of the
circulated in all satellite countries since the Communist seizure of their
governments.
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POI ED. Potential Dissidents Being Evicted from Polish Cities, US Embassy
Warsaw reports that during the past few months it has received numerous
reports of eviction from their homes of people in Warsaw and other Polish
cities. The evictions are taking place under the'terms of a decree which
gives the government authority over the allocation of housing. The US
Embassy comments that the Polish Government is making use of-its power of
eviction in order to rid the larger Polish cities of elements it considers
World War II Polish underground, or former private businessmen,
COMMENT: Similar information was received from
Poland in April, at which time no effort was being made by the Government
to resettle the persons evicted. Similar evictions have been reported from
Budapest during the past few weeks.
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to Western European countries. He notes that the Yugoslav Government has
filled these commitments without complaint or requests for a price adjustment,
YUGOSLA.T A. &Mort Commitments to US YirmsiFulfilled According to an
American representative of a US import firm in Yugoslavia,= the_ Tito
Government recently refused an offer of a,Swiss f.ra4 to'buy a considerable
quantity of lead on highly advantageous terms in dollars because the Yugo-
slave learned that the shipment was likely to find its way to Cominform
countries. The American representative adds that. the Yugoslavs are living
up to contracts made with US firms for deliveries of strategic materials,.
.even though the Yugoslav Government could. sell these items at higher prices
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SECTION 2 (EASTERN)
"B" TURKEY. Foreign Minister Criticized at Democratic Party Session.
Foreign Minister Koprulu was subjected to strong criticism at a
meeting of Democratic Party Parliamentary Deputies on 5 June.
Criticism apparently centered around the Government's unsuccessful
efforts to obtain full membership for Turkey in the North Atlantic
Treaty Organization (NATO), although the Foreign Minister was also
criticized for attending provincial political meetings rather than
attending to affairs of state in Ankara. The Embassy attributes
these attacks on Koprulu primarily to the efforts of the elements
in the Democratic Party who wish to weaken Prime Minister Menderes'
position by belaboring his close associates. It cites the'-attack
as an indication that the Government's failure to obtain security
ccommit ants From the West has become an increasingly significant
Issue in the Party's internal politics.
COMMENTS Many members of the Democratic Party, particularly in
the provinces, have been critical of the small hard-core group in
the capital, including both Menderes and Korprulu,which has attempted
frequently to run rough-shod over the remainder of the Party. The
Government will undoubtedly use this criticism as a spur to the
West in pressing for Turkey's full membership in NATO.
"B" SYRIA. Further Reports of a Possible Change in the Government.
US Minister Cannon reports that discussions in Damascus concerning
the replacement of Prime Minister al.Azmgss cabinet with a coalition
government including the Populist (People's) Party has been con-
firmed by Akram Hawrani, an Independent, and also by sources within
former Premier Qudsi's Populist Party.
Hawrani told Cannon that the opposition of anti-Army
elements it the People's Party to any participation in a coali-
tion cabinet is the main obstacle to a fall of the present al Azm
government. While Cannon believes that the formation of a new
Syrian Go?ernment might occur at any time, he believes there are
two factors which may prevent an immediate cabinet changes (a) the
tension in Syria resulting from the continuing Syrian-Israeli border
dispute and (b) Populist disapproval of the military budget which
the Syrian Parliament is currently considering.
COs The fact that Hawrani is a close friend of.
the influential Army Chief of Staff, Col. Shishakli,whe plays a
dominant role in,Syrian politics, underlines the importance of
Hawrani's views. While the Syrian-Israeli border dispute has tended
to subordinate domestic dissatisfactions with the present Syriah
Cabinet, the increasing criticism of al Azz's government,
augges* that, the days of the al Azm cabinet are
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"B" BURMA. Comments on Burmese Elections. On 12 and 19 June the
Burmmeee will conduct their first national elections since independ-
ena*. The elections are being held to replace the present Parlia-
ment, which is composed of the remnants of the Constituent Assembly
elected in April 1947 Balloting will take place in only about one-
third of the constif hies in Burma., but further elections will
continue to be held throughout the year as additional areas become
sufficiently free of insurgent activities. It appears highly un-
likely that the Socialist 'PEL (AntiFascist Peoples Freedom
League) combine., which has controlled the Government continuously
since 1948, will be defeated. Its influence over members of
Parliament (whose constituencies are not presently being centested)
and the armed forces., its superior organization in the hinterland
and its patronage privileges ensure its strength. The general
unpopularity of the Socialists and widespread dissatisfaction with
existing conditions., however.,-will probably result in the election
of some genuine opposition (both Tightest and leftist) in Parliament.
It is also entirely possible that some key Government officials,
including Prime Minister Thakin Nu., will be defeated as a result
of a Government strategy to run its strongest candidates against
the most priminent opposition leaders. A slight less in the
stability of the Burmese Government-appears likely as an outcome
f the election but no sharp changes in policy are indicated.
"C" HINA. Peiping Derides US Military Capability. Peiping radio, i
a 4 June commentary entitled The American Imperialists Are Worried
About Their Own Incapability," takes the line that the current US
Senate hearings increasingly "expose the ambition of the American
imperialists for aggression..." Peiping finds US military leaders
unanimous in favoring an "aggressive boy.," differing only in
regard to "??mw and when expansion of their aggression will be put
to a testoF The broadcast, conclutling that "American power is
insufficient to satisfy their aggressive ambitions9n cites alleged
evidence of US anxiety lest commitment to the "Korean bog" cause
its "whole aggressive program (te) entirely collapse."
OMME o The above for the most part is a restatement
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0Mlo The drafting of militia
efforts to regroup and reconstitute his forces. Preparations for
another major offensive effort by Chinese and North Korean forces
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are therefore estimated to require at least three and more likely,,
five to six weeks.
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offensive against the.Kumhwa complex is seriously hampering one
of the st&ndard Communist line (outside Moscow) that US leaders
agree in desiring to expand hostilities but are fearful.that US
strength is insufficient. The reference to Korea recalls earlier
suggestions by Chinese.Communist spokesmen that it is international
Communist strategy to exploit the manpower resources of Asian
Qliberationg movements to force the US to maldeploy its troops and
waste its substance in indecisive conflicts in the "least importantO
theater. It is not known whether this line accurately reflects
Communist strategy or is intended to inspire doubts as to the value
of US efforts to halt Communist aggression in Asia.
and on 15 and 20 May were sent on Army trucks to Chan sha where they
are to be reo sod and trained for duty in Korea.
mess Communist Militiamen Reported Enroute to Korea.
According'to a Nationalist report approximately 30,000 militiamen
were forcibly ca?nsc?ipted by the Military District Command
forces without depleting the regular troops now stationed in strategic
areas of China proper.
military district troops into the regular army forces of the Chinese
Communists has been frequently reported. It is expected that the
increasingly high rates of attrition suffered in Korea will result
in the acceleration of this substitution system in utilizing secondary
?. Mee Reluctantly Appr?~ More Realistic lion ~ollaa~r Rate.
Ambassador Muccio reports that the ROK Prime Minister and Foreign
Minister have finally obtained President Rhe?0a re1t`t approval
for ao. won 6000 to 1 dollar counterpart rate (the rate at which the
ROE Government collects local currency for US-financed and imported
goods and the proceeds of which are deposited in a reserve fund).
Roth Government and private circles feel that the increase in rate
and the non-ropsyment of won advances to UN forces will lead to
furthor inflation. OMIT a Although
a major US economic recommendation the President has opposed for a
considerable period a raising of the former 4000 to 1 counterpart
rate on the grounds that thw,. ent of R.OA loans to the UN for
essential local purposes would be the major solution to the infla-
tion problems
"BO ; mew Mav Reauirce up 'ie leeks to Mount ?ffensive. The
Far East Command Intelligence Staff believes that the current UN
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SECTION 3 (WESTERN)
COMMENT: Tightening of
Allied controls-on West German exports to the Sovie Zone, given as one
of-the reasons for East German failure to achieve production targets in
key industries-in connection with the Five Year Plan, may be the reason
for Soviet pressure on West Berlin trade. This pressure could constitute
a Soviet bargaining point in the current attempt to negotiate a favorable
trade treaty between East Germany and the Federal Republic. Stoppage of
shipments-from West Berlin to the Soviet Zone may be difficult to effect
in view of the attitude of the Berlin City 'Council, which has already
yielded to Soviet pressure in order to prevent further deterioration of
the West Berlin economy. The Soviet attitude toward reimposition of a
Berlin blockade is not: likely to be determined solely by economic
considerations.
were developing".
vigorous countermeasures now were all the more necessary "if a blockade
"C" GERMANY. Allied.High Commission Plans Retaliation on Soviet Interference
Est Berlin Tr ade, At a special session on June, the Council of
the Allie High Commission agreed: (1) to order the West Berlin City
Council to stop ?issuing certificates of origin of raw materials used in
West Berlin exports as demanded by Soviet Zone officials; (2) to send a
letter of protest to the head of the Soviet Control Commission for Berlin;
and (3) to instruct the West Berlin commandants that if the situation is
not improved by 12 June, all shipments from western Berlin to the Soviet
Zone are to be stopped. Francois Poncet, the French High Commissioner,
demurred to this action on the ground that it might provoke the USSR to
impose a new blockade of Berlin, and stated that he would have to consult
his Government before agreeing to all-out countermeasures against Soviet
interference with West Berlin trade. The UK High Commissioner felt that
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"C" AUSTRIA, Soviets Press for More Raw Materials for USIA .Plants, The Soviet
element in Austria continues to press the Austrians for an increase of
raw material allocations to USIA (Soviet-controlled) plants. In conversations
with Austrian Interior Minister Kolb in. April, Soviet Deputy Commissioner
Major General Tsinev indicated; that- unless USIA plants get better, or even
preferential, treatment., the Soviets may reduce or suspend the'deliveries'
to the Austrian economy of oil from the Zistersdorf oil fields. Kolb.,
however, informed Tsiriev...that deliveries of raw materials could'not be in-
creased because of supply shortages,
COMMENT: Austria is dependent upon. the Soviet allocations for her oil.
Tie U IA plants have recently been operating at a loss, due to raw materials
shortages and an inability to sell goods competitively on the world"market,
A Soviet investigating commission, sent to the plants early this year.,
considered returning them to tine Austrian Government,
"A" FRANCE,- ' Communists Concede Election.L?sseso " The French Communist Party
TP F -estima es that because of the phony electoral law it-will lose
about 40 of the 180 seats it.controlled in.the last Assembly, and is
therefore concentrating on obtaining a large popular vote in order to
retain the propaganda value of the claim that the PCF is the leading popular
force in France. Planning in terms of post election social disturbances,
the PCF is expected to continue its efforts to disrupt French economic
.recovery and defense efforts, and also -to try to."create conditions" for
the establishment of a government which would dissociate France from NATO*
COMMENT: The PCF has been encouraged by 'recent
evidence that inflation has increased popular susceptibility to Communist
propaganda. Party leaders will attempt to turn this support for the PCF
economic program into acceptance of Communist political aims, Despite the
renewed confidence which the French working class placed in Communist labor
policy as a result of the March 1951 strikes, the French people can be
expected to continue to distinguish sharply between.PCF.economic and
political policies,
"B" BELGIUM, -King Leopold to Abdicate 16 July, Leopold III informed the
Belgian Governmen o his Mire to abdicate on 16 July, The Belgian
Prime Minister stated that the Prince Royal would be crowned King on the'
following day before a joint session of Parliament,
COMMENT: With Leopoldgs.abdication, the royal question can
be considered as settled for all practical purposes. The date suggested
by Leopold has no special significance. Little unrest. is anticipated.
"B" NORWAY, Difficulties Antici ated in Obtaining Polish Coal. Norway had
p armed to get 45 0,000 metric tons of coal from Poland out of its
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950,000 ton 1951 import, needs; but only 125,000 tons are already contracted
for under an agreement with Poland for the first half of 19510 Norwegian
officials expect difficulties in concluding an agreement for the-remainder
of the year's requirements since they believe that Poland will not'supply
the full amount needed without Norwegian deliveries of strategic items
such as chemical pulp,, cellulose wool, iron ore concentrates, ferro-alloys
and pyrites. The Norwegian Foreign Office is inclined to refrain from
concluding any agreement calling for strategic items from Norway unless
they can get the full amount of coal needed, ECA Mission Oslo believes
that a proposed US plan for replacing some of current Polish coal deliveries
to ECA countries with US coal under an ECA reserve fund, arrangement, would
strengthen the Norwftian~bargaining position in negotiating with the Poles.
coal has been a powerful ever en Poland to obtain strategic materials
from Norway. The prospect of another source, at no additional dollar cost,
would enable Norway to bargain more effectively for at least greater
quantities of coal in return for lesser quantities of strategic materials.
"C" NICARAGUA._,,World Bank Loans Help Somoza Administration. Two loans ag-
gregating 1IL. million have een made to Nicaragua by he: International
Bank for Reconstruction and Development. The first loan of $3.5 million
was made to_the government for the purpose. of machinery and equipment for
highway construction. The second,--for $1.2 million, was made to the Banco
COMMENT: These loans will,help vresaaenT,
Somoza to carry out the campaign pro? ses he made last year and will
probably..enhance the stability of his friendly, pro-US administration.
"C" PAN.. Government to Penalize Ships Violating UN Embargo. In compliance
i t h a US request., the Foreign Minis ter s t a t e d t at t e Panamanian Govern-
ment would report to the UN AMC (Additional Measures Committee), prior to
18 June, the penalties which the Panamanian Government would apply to
Panama registry ships violating the UN embargo.
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COMNENT: The elimination of ships under Panama registry from the
es ern flag vessels carrying strategic materials to Communist China
would be. a substantial contribution to the effectiveness of the UN
embargo since the Panamanian merchant marine is one of the largest in
the world, numbering approximately 900, However, effective enforcement
of penalties might well reduce the number of ships registered in Panama
and thereby. cut into the government's revenue from registry and property
taxes on vessels, Consequently,, the degree of enforcement will be s. further
test of the cooperativeness of the newly installed Arosemena Administration,
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49229
CENTRAL INTELLIGENCE AGENCY
DAILY DIGEST SUPPLEUENT
JUN 11 1951
Not for dissemination outside 0/CI-and 0/NE,
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CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST
. 11 June 1951
SECTION 2 (EASTERN)
IRAN. Financial Need Increasing, Pressure on Iranian Prime Minister. The
Anglo-Iranian Oil Company (AIOC) latest advance of funds to Iran. (1 million
pounds sterling) occurred on 31 March 1951, according to the US Ambassador
in Tehran. Suspension of.AIOC advances is undoubtedly having-,a detrimental
effect on the Iranian-fiscal and budgetary situation, but the Ambassador be-
lieves that a crisis is apparently not imminent, although greatly feared by
Mossadeq, who for that reason is rushing implementation of the oil national-
ization law. While the Government is already not paying for its current
obligation, the Ambassador reports that it may be able to get by for 2-3
months and possibly more. COMMENT- In
the post World War II period, the Iranian Governmen has been chronically
short of funds. Since roughly 40 percent of its income has been AIOC pay-
ments, it is obvious that the suspension of these payments will cause most
serious financial difficulties., Mossadeq previously requested Ambassador
Grady to urge the AIOJ to find some basis for making funds available to
the Iranian Government The UK is natur-
ally aware of the persuasive effects of withholding these payments,
SECTION 3 (WESTERN)
"C" CANADA. Support for Membership of Greece and Turkey in NATO Indicated.,
Minister of External Affairs Pearson, in an off-the-record press conference
on 8 June, stated that Canada was not opposed to admitting Greece and Turkey
into NATO but would not take a lead to secure their inclusion. He paid high
tribute to Turkeys mentioning the high calibre of its army, the stability of
its government, and its need for security.
COMMENT.- The holding of an off-the-record conference in which complimentary
remarks were made about Turkey indicates that Pearson feels there may be
some public opposition to this stand and that answers should thus be provid-
ed in advance, Most Canadians would probably prefer to see NATO remain an
alliance among nations with a common cultural background rather than an out-
and-out military alliance, but, unlike some of the smaller European members
of NATO, Canada is not particularly concerned about greater vulnerability to
itself in the event of hostilities or about the prospect of the available
military assistance being spread too thin,
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