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December 9, 2016
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June 12, 2001
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June 13, 1951
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4 Approved elease 2001,819/gfirElp-RDP79T011,000200493Inf COPY NO. 39 CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE DAILY DIGEST XV J: Date: NOTE: 1. This summary of significant reports has been prepared primarily for the internal use of the Office of CUrrent Intelligence. It does not represent a complete coverage, of All current Tepokta in-CIA or iny,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. "B" - important regional developments not necessarily related to Soviet/ Communist intentions or capabilities NT4 - other information indieeting trends and potential development's DIA, EMS, USAF= Declassification/Release Instructions on File TOP SECRET Approved For Release 2001/09/04: CIA-RDP79T01146A000200390001-8 Approved Fitelease 2001/09/04: CIA-RDP79T011111000200390001-8 TOP SECRET Section 1 (Soviet) "En USSR, Bureaucratic PracWes in Soviet Industry Condemned. According to Pravda, correspondence published on 5 June indicates that faulty leadership in competition has become Pentrenched" on a number of mines belonging to the Voroshilov Trust in the Donbas, Apparently, the Director and chief en- gineer talk a great deal about competition but do little about organizing competition in a practical manner, and consequently, in certain mines, projects announced in various competitions are completely unknown to some of the workers. Furthermore, according to Pravda, individual competition is not organized and the fUlfillnent of pledges is not systematically cheCked. As a result, the mines of the Voroshilov Trust have so far this year nunderdelivered" tons of thousands of tons of coal. In this connection the Voroshilovgrad Provincial Party Committee is accused of "complacency" in that it took no action after hearing reports concerning the low output of the Trust. Pravda warns that such *bureaucratic" practice is intoler- able, and recalls that success in socialist competition lies in its *mass character" and in its development of the *creative initiative" of the millions. (B-FBIS, 6 June 51). COMMENT: This is another example of the constant watch maintained by the Party over the managerial groups. Of particular interest is the fact that the criticism in this case includes the Provincial Party Committee as well. 11311 S viet aison Burea Re .o ed Established in South China. 25X1C at the end of 1950 a ?vie aison eau was es a is e In ou Ina (Canton) which in effect increases Soviet control *throughout the area." The functions of the Bureau are to consider all important decisions affecting South China before transmittal to Moscow and to direct the activities of all Soviet military and civilian personnel in the area. RenortinE Officer Comment: Doubtful Soviets have such control over a part of China so far removed from the USSR and believes purpose of Bureau is to control Soviet personnel 25X1A in South China only. COMMENT: Increased Soviet activity in South China in 1951 might well warrant the creation of such a bureau, probably subordinate to Peiping. In addition to numerous reports of Soviet assistance in the military training of Viet Minh Chinese Communist personnel in South China, Soviet advisers reportedly also aid in minelaying and in the construction of railroads, airfields, submarine bases, coastal defenses and in inspecting the Indo-China and Hong Kong frontiers. It is probably true as Reporting Officer suggests that the Soviets do not exercise control over the area in the same sense as con- trol is exercised in border region such as Outer Mongolia or even in Man- churia. However, the Soviet advisory technical program is designed to seem* control of key points throughout the Chinese Communist governmental apperat04 TOP SECRET 1 Approved For Release 2001/09/04: CIA-RDP79T01146A000200390001-8 25X1C Approved Filelease 2001/09/04: CIA-RDP79T0141000200390001-8 TOP SECRET EASTERN EUROPE: PC" CZECHOSLOVAKIA. Effort Made to Increase Number of Jnylior Officers, The Czechoslovakia Minister of National Defense has issued instructions that all healthy unmarried Czechoslovak citizens of working class of peasant origin who are graduates of lower secondary schools may apply for admission to officer candidate schools. The US Military Attache in Praha comments that the Czechoslovak Army is believed to be seriously handicapped at present because of a lack of adequate senior NCO's and junior officers. 25X1A 0 "B" HUNGARY. Austerity Campaign Reveals Shortcomings of Hungarian Economy. A recent Hungarian Cabinet resolution calling for intensification and ex- pansion of the austerity movement blamed the economic Ministries for fail- ing to carry out the initial austerity resolution of December 1950. Better control of the individual worker and closer contact between factory man- agers and Ministry personnel are called for. The resolution added that economy must be practiced not only with materials but also with manpower. The US Legation in Budapest comments that the recent scrap collection drive was not a success, a fact which probably influenced the Cabinet to issue the resolution. The Legation also believes that the austerity cam- -paign testifies to the seriousness of continuing Hungarian shortages in vir- tually all commodities, especially manpower and metals. 25X1A 25X1A COMMENT: On 5 June, Radio Budapest reported that only u,uuu or e bO,000 workers scheduled for recruitment by the first of July had been recruited. Numerous reports reveal the despOrateness with which the Hungarian Government is attempting to secure needed metals from sources outside of the Soviet orbit. "A" YUGOSLAVIA. Yugoslays Encouraging Development of National Communist Party. in Greece. US Ambassador Peurifoy reports that there is evidence that Yugo- slav representatives in Greece are interested in the development of a nation- al Communist Party in Greece, but there is no indication of any 'Yugoslav success in this effort. The Ambassador states that the Yugoslav Legation in Athens and Consulate in Salonika have intimate contact with certain Greek leftists who are seeking to found such a party, but there is no evidence to date of Yugoslav financial backing. Ambassador Peurifoy is of the opinion that Yugoslav interest in the creation of a Greek Titoist movement has been limited, and is not likely to unduly disturb relations between the two coun- tries in the near future. (C-Athens 4407, 12 June 51), COMNENT: The Yugo- slays, whose. prestige in Greek Communist circles was appreciable before the Cominform break, have sought to retain their influence and challenge the position of the USSR and Bulgaria among Greek Communists and Leftist groups. Any appreciable Yugoalav efforts to encourage a pro-Yugoslav Communpt Party or to champion the rights of the Macedonian minority in Greece, however, will arouse the Greek suspicions and hamper the development of any mutual defense understanding. TOP SECRET 2 Approved For Release 2001/09/04: CIA-RDP79T01146A000200390001-8 Approved Felelease 2001/09/04: CIA-RDP79T01*000200390001-8 TOP SECRET SECTION 2 (EASTERN) "B" ARAB STATES. Bahrein Sheikh to Receive Increased Oil Revenues. According to information received from the British Foreign Office, the Bahrein Petroleum Company is planning to increase its payments to the Sheikh of Bahrein. The Company decided to offer larger payments because: (1) it recognized Bahrein's need for increased revenues now, (2) the islandls oil reserves are less than anticipated, and increased payments will ease the company's relation with the Sheikh, (3) increased payments would serve to protect the company's investment in refinery facilities on the island, and (4) events in neighboring oil-producing countries make it desirable to grant the Sheikh an increase now. (C London 6503, 12 June 51), COMMENT: The fourth point listed is undoubtedly the motivating factor in the Oil Company's interest in enlarging its payments to the Sheikh of Bahrein. The .Bahrein refinery, with a daily capacity of 185,000 barrels, is second in the Near East only to the Abadan refinery (approximately 550,000 barrels daily), and is already being in part supplied with Saudi Arabian oil. Bahrein's importance increases as clouds of uncertainty continue o envelope the Iranian oil situation. "A" INDOCHINA. Rebels Said to be Planning Fiveopronged Attack. 25X1C the main forces of the Democratic Republic of Vietnam 25X1C DRV are being divided into five task units, four of which will attack French forces at separate points both to the north and to the south of the Tonkin Delta while a fifth force rebuilds resist- ance zones within the Delta which were recently dispersed by the Frencn. The alleged objective of the DRV is to retain the initiative, to divide and destroy French forces, and to avoid large concentra- tions of its own troops. 25X1A COMMENTg Although current information on DRV order of battle is lacking or tentative, the above report is supported by the follow- ing reliable informations (a) the DRV is now attempting to rein- filtrate areas within the Delta recently cleared by the French (b) the declared objective of the DRV is destroy French forces 25X1C rather than to "liberate" new territory. 25X1C an all-out DRV attack during the rainy season May ep em is unlikely. The flooding of rice fields, the generally good flying weather, and the reduced usability of the roads linking DRV zones with Communist China are factors which favor the defend- ing forces "Bo BURMA. Dissension Reported in Nationalists' General LI Mils Burmese- generally recogAPPRIIIMPWRIttang (KMT) Nrces Yunnan Command. Gen LI MI, 25X1C in the Sino-Burmese border area, actually has no more than 1000 men. 1144100041";', '.,.,n1IllPail wtAo,:oontgolsAsbe,Anti4..Qommunjw?orces untian, has been, 101110.as:causin; LI Mi eoncernt and this:has-re- sulted in LIMiv a blockadifig the flow of supplies,-?frompTh4rma into lannen. A Approved For Releate18308BMI : CIA-RDP79T01146A000200390001-8 Approved FiRelease 2001/09/04: CIA-RDP79T01411000200390001-8 TOP SECRET conflict with HUANG Chieh, commander of KMT troops interned in Indochina, is also credited to LI Mi who reportedly has been attempt- ing to induce HUANG's troops to enter his command. COMMENT; This is the first report of upper- 25X1A 25X1A eve dissension in the KMT ranks along the Sino-Burmese border. Trouble has not been unexpected, however, considering the hetero- geneous nature of tht combined regular and guerrilla-type forces involved. Reports from other sources indicate that two-thirds of the estimated 3-5000 KMT troops are under LI Mils control, that they are well equipped and trained, that their morale is high, and that all essential elements have entered Yunnan. It is believed that Nationalist control over LI Mi is not absolute and that the above report is biased as a result of a Nationalist desire to deprecate his importance. "B" CHINA. Kuomintang Forces Seize Five Towns in Yunnan. According to a Burma War Office report the majority of Kuomintang (KMT) troops in Burma have crossed into Southwestern Yunnan, and, with little resistance, occupied five villages. This report states further that airfields have been reliably reported at three of the above loca- tions seized by the KMT forces. (S Rangoon, 8979 8 June 51) COMMENT; KMT troop movements into Yunnan have been reported from a variety of sources as having commenced on an observable scale dur- ing the latter part of May. Chinese Communist troop deployment along that section of the Yunnan-Burmese border has generally been considered light with fairly strong concentrations reported some 80-100 miles north and south of this sector. Some 3-4,000 Nationalist soldiers are believed to have taken part in this operation. Airfields service- able to 0-47 type aircraft are known to exist at Meng Sa and Kong Ma. In light of the isolated location of these KMT operations the desir- ability of air supply is generally recognized for anything greater than small guerrilla forays. The support of guerrillas native to the area is problematical since rumors have been received of a personal conflict between LI Mi, commander of the EXT units from Burma, and LI Yuan-klai9 reportedly leader of the guerrilla forces in Yunnan, (See item above). "A" Estimate of Aircraft Strength in China. The US Far East Air Force Intelligence Staff estimates that combat air strength in China (including Manchuria) no0 totals 1050 planes. Exact subordina- tion of these aircraft is not known, but it is believed that 300- 350 are Soviet Air Force planes, 100-150 are North Korean and the remainder Chinese Communist. Jet fighter strength which includes 320 MIG?151s, is believed to be 445. More than half the planes (690) are believed based in Manchuria. The revision in strength from 900 (estimated by FEAF on 19 May) does not reflect any influx of aircraft, but is based on additional information, (S FEAF, Tokyo, AK 8562, 10 June 51). COMMENT; The latest official US Air Force Headquarters estimate (as of 31 May) was that 1000 combat planes were based in China; of these 400 were jet fighters. Approved For Release 1ntor:CIA-RDP79T01146A000200390001-8 Approved Fl',Release 2001/09/04: CIA-RDP79T010A000200390001-8 TOP SECRET "B" KOREA. COAF/NIOFGa)oalb_,ilitigItg... The Far East Command estimates that a fallescele Chinese Communist-North Korean air forces attack on UN ground units in Korea in an initial assault could include 350 at !rid 45 conventional fighter sorties. An operation of thie gaze would disrupt UN interdiction and ground support activity and greatly curtail UN resupply by air of ground units in the battle area. Due to the distance of enemy bases from the front lines and the proximity of UN air bases, the enemy probably would sustain severe losses realization of this is believed to be a significant deterrent to this type of attack. FECOM notes, how-- ever, that the repair and construction of North Korean airfields, the improvement and expansion of radar warning and control facilities, and an increase in enemy anti-aircraft artillery strength in North Korea has given the enemy the capability of expanding his defensive air opraticns eouthward from the Yalu River at any time. (s, DA FECOM Telecon 48189 13 jtrez Si). "C" JAPAY.Commun'iet Youth Or ne s ortedl Selectin Dele ates for Berlin Conferenes. 25X1C three Japanese Commemiet youth orgaa ve rece tions to partieeipate in a conference of the World Federation of Democratic Youth to Tee ,held in erlin, and are now selecting delegates, Political Adelecor Sebald eolments that it is unlikely that the Japanese Government wcula permit the departure of such a delegation, but points to the poeeilility that the delegates could be smuggled out of Japan to join the Chineee ,;1017.11111.LiSt delegation. (S Tokyo 2123, 11 June 51). CONT 8 Presuaally the coat's-re:we referred to is the 3rd World Festival of Youth in ,mle.mt3 feT Peace tveneduled for August 1951. . Although the Cemmaelet crganioatiens are aware of their inability to attend the ooilferenc,,,a legally, past practice indicated that they undoubtedly will Ee though the motions of selecting delegates and raising travel; fulda In aleieT to propagandize the Governments "oppression t% Szeggling of Cemmaelet personnel into and out of Japan does 6nUt0 Currently there is some suepieion that NOZAKA Sarno, seeone! rael6irg leader of the IC? aJed underground for the past year, may have been eiveggled emt andx...ea27 even have attended the World Peace Co Ii meetinge held in Berlin in February 1951 under the pseudonym of KAWAYERA ta6uvo Approved For Release 2001/ O4ICIA-RDP79T01146A000200390001-8 Appi;;;;c1 Fikelease 2001/09/04: CIA-RDP79T010A000200390001-8 TOP SECRET SECTION 3 (WESTERN) "B" GERMANY. Possible Communist Proposal to Send International Commission to Investigate Remilitarizaion in Both East and Vest Germany. US representatives in Frankfort are discussing Allied counteraction should Communist spokesmen propose that an international commission be sent to both East and lest Germany to investigate remilitarization. An indication of this possibility is given in a letter from Walter Ulbricht, Deputy Premier of the East German Democratic Republic, to the German Peace Com- mittee (Communist), supporting a proposal of the World Peace Council to send a commission of "prominent persons from abroad to investigate what,is being done in both parts of Germany for establishing the peace idea or for remilitarization." The US representatives believe that if this maneuver is executed it will be executed quickly, and they recommend that the three Allied occupation powers be prepared to counter in a manner designed to expose the insincerity of the Soviet proposal. (S Frankfort 9990, 11 June sa) CCUMENT: No such proposal by the World Peace Council (the directing body of the Communist peace movement) is known to have been made, nor is there any further evidence of the reported Ulbricht letter. The purpose behind such a Soviet maneuver mould be purely propagandistic. "A" 0?inions of East German Foreign Ministry on East-West Relations. In recent discussions of reports submitted by the East German (GDR) Ambassador to Communist China, officialsof the GDR Foreign. Ministry expressed the following opinions: (1) the "critical period" in the Korean mar will come in the autumn of 1951 at which time the USSR may join China in support of the North Koreans; (2) Chinese policy is to keep the forces of the UN tied down and to buy time for the USSR to study the weapons with which it will have to reckon in the coming war; (3) the GDR will obtain a peace treaty and will be fully incorporated into the Eastern bloc as soon as airiest German peace treaty has been concluded* (4) "things will breal?oose in the lest in the spring of 1952". COMMENT: Although it is entirely credible that these opinions were 25X1A fact-V6EFOT by officials of the GDR Foreign Ministry, there is no evidence-that these opinions are based on inside information. It is also possible that these theories have been fed the East German's to provide an explanation for the USSR's failure to come to the aid of its Far Eastern' satellites. "C" C041 Strike-PoSsible. In a special conference of the west German - mine-workers' union convention, a.resolution unanimously rejected a wage counter-offer of the industry spokesmen. The union had demanded an average 14% wage increase for mine-workers. Communist delegates, attempting to color the question with politics, attacked the Schuman Plan, the Ruhr Authority, and rearmament, and introduced two resolutions calling for im- mediate strike action. These resolutions were defeated, and further meetings 25X1A TOP SECRET Approved For Release 2001/09/04 ? CIA-RDP79T01146A000200390001-8 6 Approved Felease 2001/09/04: CIA-RDP79T011,000200390001-8 TOP SECRET ' between union and industry spokesmen are expected. Nevertheless, the gap between the two groups is still large, and many top unionists believe that a strike is antfrely possible* (P Duesseldorf 128, 11 June 51) COMMENT: Although Communist membership in the miners' union is large, they do have representation in-the leadership of the union. The relatively conservative union leaders aTe'likely to attempt to continue negotiations as long as possible in order to avoid a strike which would be exploited by the Communists,for political ends* "A" FRANCE. Non-Communists Replace Communist Extremists on Union Committee. A shake-up in the personnel of the 35-4nan Administrative Commission of the Cbmmunist-controlled General Labor Confederation (CGT) following the recent CGT congress resulted in the appointment of 21 new members, including Catholics, Socialistsk and "pure" unionists. These men were added to promote the "unity of action" campaign, but it is notable that they replace a number of former members of the National Strike Committee which practically took over the condtct of the-1947 strike, and which was then considered the direct arm of the French Communist Party (PCF). (C Paris 7659, 10 June 5l). COMMENT: Communist domination of the CGT is not endangered by this move which, on the surface, is an attempt to gain support among non-Communist unionists for concerted labor agitation at the plant level* In view of CGT Secretary General Frachon's implied criticism of PCF labor policy in his speech at the CGT congress, however, the removal of Communist extremist elements from the Administrative Committee may indicate a policy of greater concentration on labor's legitimate economic demands. "C" NETHERLANDS* Deterioration of balance of Payments Situation* During May, the Dutch debit in EPU Was $33 million, the cumulative total to 31 May $256.5 million* In addition, Dutch foreign exchange reserves have dropped to $255.4 million in comparison to $380.2 million in the early part of 1951. Although April exports covered 71% of imports as compared to 64% in March, the trade deficit had reached $260 million by the end of April. (C Hague Joint lbeka No. 230 8 June 51) COMMENT: The EPU deficit is largely due to the stalemate in Dutch-German trade relations, in which the Netherlands normally has a surplus that is paid to its other European debtors. The Dutch balance of payments situation, however, probably willworsen as the tempo of the defense program increases and the extent of the Dutch loss of economic influence in Indonesia becomes apparent* ?"8" ITALY. Communist Gains Increase in Second Series of Local Elections, Complete returns ceir the election of provincial councils in 'Chit* Italian provinces for which voting took place on the week-end of 10 June showed gains for the Communist bloc and decreased strength for the Govern- ment bloc over the 1948 national elections. Although the Communist bloc lost control of administration in eight major cities, including Florence and Turin, they retained control in Italy's main naval bases, Taranto and La Spezia, as well as in the ports of Leghorn and Brindisi. In the pro- TOP SECRET Approved For Release 2001/09/0g: CIA-RDP79T01146A000200390001-8 Approved FeRelease 2001/09/04: CIA-RDP79T011,000200390001-8 TOP SECRET vincial elections the Communist bloc won 38.5% of the vote, coMpared with 36% in the same area in 1948. The pro-Government bloc, led by the Christian Democrats, polled 50.3%, compared with 59.5% in 1948. The Christian Democratic vote alone declined to 36% from 46% in 1948. The neo-Fascist Italian Social Movement rose to 4.3% from 1.4% in 1948. Partial results for the municipal elections showed the same trend. To Italian non-Communist political leaders the election results showed the need for a stronger anti-Communist policy, on the part of the Government to curb left-wing propaganda and for more vigorous social reforms in order to better the conditions of large numbers of Italians who are either un- employed or living on near starvation wages. (U IslY Times Rome, 13 June 51) COMMENT: It is not clear what is meant by "a stronger anti-Communist FATETOn the part of the Government to curb left-wing propaganda". The strongest and only effectual curb to Communist propaganda mould be the' vigorous social reforms recommended surprisingly as point two. "B" SPAIN. UK Edbassy Estimate of Francots Position, US Embassy London has been informed by the UK- Foreign Office that the 13ritish Embassy in Madrid has estimated that Franco mould remain in power much longer, than his enemies predicted and that if he were overthrown it would more likely be by a Military Junta than by "ineffective political opponents". The Foreign Office concurs in this estimate. (S London 6515, 12 June 51) COMMENT; Army support will enable Franco to remain in power indefinitely. The principal non-Communist opposition forces are aware that the peaceful change of regime which they desire can only be effected by the Army and that the Army will act only when it is convinced that Franco can no longer control the political situation. They expect that the current strike move- ment will weaken Franco, and hope that it can be made sufficiently effective to convince the Army that a change of regime is essential to internal order. 11B" UNITED KINGDOM. British Considering Boycott of Iranian Oil if Negotiations break Down. US Embassy London reports that a temporary cessation of the exportation of Iranian oil in case negotiations between the Anglo-Iranian Pil Company and Iran should be broken off is very probably under consider- ation by the Company and the UK Foreign Office. A study recently made at Government request reportedly reveals that less than 5 per cent of present Iranian oil eXports could prdbably continue to be exported if the AICC boycotted Iran, since the AICC would expect the cooperation of the major US oil companies and the lack of tankers mould limit the ability of other purchasers to move the oil* In addition, the AICC is understood to be cpnsidering the possibility of taking legal action, in case of its with- 4drawal, against any purchasers of Iranian oil on the ground that the sup- plies vmuld be "stolen oil". The Embassy emphasizes that it has no reason to believe that .the AICC would resort to an interruption of Iranian oil exports as part of the tactics of negotiation; but that if the negotiations broke down, the Company might well adopt this course of action. (S London 6495, 12 June 51) COMMENT: This report adds to other indications that TOP SECRET Approved For Release 2001/09/04 . CIA-RDP79T01146A000200390001-8 A ? Approved FORelease 2001/09/04: CIA-RDP79T01.A000200390001-8 ttC11 TOP SECRET neither the AIOC representatives nor the Iranians are approaching the forthcoming negiotations in as conciliatory a frame of mind as public statements suggest. CHILE. President Mai Request Permission to Leave'His Pdet, According YO-Frimors, President Goneales Videla--following the solution of ministerial difficulties--will request permission to leave his post due to ill health and appoint the President of the Supreme Court to his post. The President, reportedly has been suffering from uremia for approximately a month. While the President's attending physician has recommended that he undergo "strict treatment", the Minister of Interior reportedly has stated that the President's illness is not serious. (1/ FBIS, 13 June Si) CCNNENT: This information tends to confirm an earlier report of the PI7gragEt's 25X1C illness and the "probability" of the appointment of a Vice President. (Secret/Control, US OFFICIALS ONLY) Also, US Embassy Santiago has com- mented that the President's recent "State of the Nation" speech lacked "its usual fire". There is no Vice President in Chile. If the President cannot exercise his office, the Minister of Interior who heads the established order of succession within the cabinet may assume the presidential office--after congressional approval-with the title of Vice President. The President of the Supreme Court is last in the established order. Alfonso Quintana Burgos, ex-cabinet officer and an influential member of the President's Radical Party, is presently Minister of Interior. ECHADOR, Comments on Socialist Cabinet Members. Chilean Communist Juan Esteban Gardla Moreno remarked to a Communis s- sembly in Guayaquil that Ecuador is one of the few countries where the Com- munist Party has complete freedom of action and with "so many Socialists in the cabinet and ministerial positions" it would be easier in the future for the Communist Party to implement its plane. Embassy Quito comments that the observation by the Chilean Communist coincides with the Embassy's evaluation of the situation created by the recent cabinet change. (S Joint Weeka No. 23, Quito, 11 June 51) COMMENT: The recent appointment of Socialists (one of whom is reportea-Mave had some connections with the Communist Party) to two of the eight cabinet posts during the recent cabin't reorganization was motivated by a desire to reduce some of the opposition to the Government and improve the present administration's chances of ?erving out its term until 1952. Since President Plaza is a:president who does not delegate broad authority to his cabinet ministers without keeping closely in touch with their official actions and policies, and since he t is strongly pro-US, it is believed that this should serve as a sufficient check to prevent the Communist Party from gaining any notable advantage through any influence it may have with the two Socialist ministers. In view of the many cabinet changes which have occurred since Plaza took office in 1948 (he has had five different Ministers of Government, for example) he would probably not hesitate to remove these men from the cabinet if convinced that they are at any time seeking to further Communist objectives. ? TOP SECRET 9 Approved For Release 2001/09/04: CIA-RDP79T01146A000200390001-8 25X1C ? Approved FeZelease 2001/09/04: CIA-RDP79T01 SECRET as 'MAL INTELLIGENCE AGENCY DAILY DIGEST SUPPLEMENT 000200 Not fin.' dissemination outside 0/CI and 0/NE. SECRET a- 33 W.4( Approved For Release 2001/09104: CIA-RDP79T01146A000200390001-8 . Approved F.elease 2001/09/04: CIA-RDP79T011000200390001-8 SECRET CENTRAL INTFILTGENCE AGENCY OFFICE OF CURRENT INTELLTGENCE DAILY DIGEST OF SIGNIFICANT VS CABLES . 13 June 1951 SECTION 2 (EASTERN) "B" CHINA. UK Considers Restriction of Shipping in China Trade. UK officials are giving consideration to prohibiting British ships from carrying to China cargoes which are embargoed by the UN resolution. A UK foreign officer states, however, that no consideration has been given this pro- posal above working levels in the government andArongly cautions against the assumption that the proposal mould be approved. In this connection, the UK official has expressed concern that traffic by Panamanian flag vessels might nullify the shipping restrictions -which might be adopted by other countries. (SI S/S London 6410, 7 Jun 51). COMMENT: Although other sources indicate that the eventuality of an embargo on goods to China has been discussed at the cabinet level, the proposed shipping restrictions do bot contemplate following the US lead in withdrawing all vessels from the China trade, but simply the carrying of the specific items covered by the UN resolution. The proposed measure would therefore not deprive the Chinese Communists of British shipping, but it would help give effective implementa- tion to the UN resolution? Norway and Panama are also reported to be contem- plating measures similar to those being considered by the British. "B" JAPAN. UK Cabinet Accepts US Formula for Chinese Accession to the Peace Treaty, The British Cabinet on 11 June agreed to the US proposal_thatg. (1) neither Chinese Government, sign the original multilateral peace pact with Japan; and (2) the Japanese Government be permitted to determine with which regime it will: conclude a bilateral treaty. (Sp S/S London 640/ 11 Jun 51), COMMENT: Agreement on the Chinese accession .problem removes the most serious Obstacle to US-UK accord on the Japanese treaty. The sud- den shift in the UK Cabinets attitude toward the US proposal probably rep- resents a desire to improveUS-UK relations with regard to Far Eastern issues, rather than a reversal of the fundamental UK policy toward Communist China, SECRET Approved For Release 2001M/04 : CIA-RDP79T01146A000200390001-8 TOP SECRET zaTeleaceopaseeoeb6d or declassi- Gcurab detached i(191"g4om controlled document. 1 f."TdCLAhSSIFen f liEl Dd whe in frAPPICIPAA'orm is CONTROL AND COVER SHEET FOR TOP SECRET DOCUMENT CONTROL DOCUMENT DESCRIPTION REGISTRY CIA CONTRO NO. / .'7) / t:."-- SOURCE DATE D CUMENT RECEIVED DOC. NO. DOC. DATE COPY NO. 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