OFFICE OF CURRENT INTELLIGENCE DAILY DIGEST

Document Type: 
Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP79T01146A000300260001-1
Release Decision: 
RIPPUB
Original Classification: 
T
Document Page Count: 
14
Document Creation Date: 
December 22, 2016
Document Release Date: 
July 17, 2012
Sequence Number: 
1
Case Number: 
Publication Date: 
July 26, 1951
Content Type: 
REPORT
File: 
AttachmentSize
PDF icon CIA-RDP79T01146A000300260001-1.pdf1.15 MB
Body: 
Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 kritOi 0 79 COPY NO. CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE DAItY/DinST JUL 26 1951 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 reports ih 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: ? ? items indicating Soviet?Communist intentions or capabilities 1113* ? important regional developments not necessarily related tp Soviet/ Communist intentions or capabilities ? ? other imformation indicating trends and potential developments Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 Declassified in Part- Sanitized Copy Approved forRelease2012/08/20 : CIA-RDP79T01-146A000300260001-1 *410 HAI? TOP SECRET SECTION 1 (SOVIET) USSR. Comment on Appointment of New Soviet Minister of the Navy.. The appointment as Soviet Navy Minister of Vice Admiral N. G. fUznetsov, as in the case of the recent reappearance of Marshal Zhukov, marks the return from semi-retirement not only of a competent professional military man but also one previously known to be favorably disposed toward the West. In 1948 Kuznetsov was one of four high-ranking naval officers eourtmaa-tialed on charges of divulging military secrets during wartime. Kuznetsov was very cooperative in his wartime relations with the Allies, and the officers on trial were significantly accused of permitting infor- mation on German weapons to be passed to the British and Americans. Prior to 1948 the new Navy Minister enjoyed a distinguished career. He was Peoplevs Commisar of the Navy from 1939 until the unification of the defense ministries in 1946, when he became Deputy Minister of the Armed For es. Daring the period 1939-47 he was also Commander-in-Chief of the Soviet Navy. His demotion in January 1947 to Chief of Naval Training Establishments preceded his subsequent disgrace. 25X1 several reasons may be advanced to ex- 25X1 plain Kumetsov's previous dishonorable retirement and his present re- turn to active duty: (1) He may have been brought back to fill the need for competent prefassional as opposed to political leadership of the Navy. He was believed to be an opponent of the conception of unifi- cation at the time that the Ministry- of Armed Forces was created (2) ( ) (4)? Although possibly a victim of high-level personal frictions, Kurnetsov may have been purged by the Party to serve as an example to other budding professional "independents". His appointment could bear some relationship to the recently launched Soviet policy of friendship and understanding with the English-speaking world. EASTERN EUROPE. HUNGARY. Establishment of NEW Cooperatives Again Permitted. The Hungarian Ministry of Agriculture has lifted the ban of frYWFW17tary which temporarily limited the establishment of agricultural cooperatives. As of 22 July licenses for setting up producer groups will again be issued. COMMENT: The five month suspen- sion of the establishment of agricultural cooperatives was apparently. undertaken to free rural party leaders and peasants for the tasks of planting and harvesting the crops and to encourage the productivity of small hand holdings. It did not mean, however, a relaxation of the TOP SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 Declassified in Part- Sanitized Copy Approved forRelease2012/08/20 : CIA-RDP79T01146A000300260001-1 %.0 Btt 1?Blf TOP SECRET drive to socialize agriculture since efforts to increase the membership of existing cooperatives and the campaign to eliminate the kufaks were not halted. There have been indications that the agricultural social- ization program will be accelerated after the harvest. POLAND. Second Quarter of Economic Plan for 1951 Reported Fulfilled. Poland's State Economic Planning Commission has announced that the second quarter goals of the 1951 economic plan have been fulfilled. All indus- tries noted in the announcement showed higher production than in the second quarter of 1950. However, for the second consecutive quarter pro- duction targets for crude oil, machine tools, locomotives and railway rolling stock were not attained. Overall industrial production was an- nounced as having overfulfilled the plan by 2.3 percent. Construction targets in the Ministry of Road and Air Transport were specifically men- tioned as not achieved for the second quarter. The announcement also noted that although the percentages of various available consumer goods had increased during the second quarter, the plan for increased consumer goods sales had not been completely fulfilled. US Embassy Warsaw com- monts that this report reveals no sensational developments when compared to that of the first quarter. COMMENT: This announcement by the State Economic Planning Commission seems to bear out previous reports of continued Polish emphasis on long-range development of basic industries. YUGOSLAVIA. Molotov SReech Alarms Yugoslav Leaders. High Yugoslav of- 1771=?Are concerned over the Molotov speech in Warsaw because they feel that it is the type of soundoff which may be expected if the USSR decides to attack Yugoslavia. In a conversation with Ambassador Allen on 23 July; Tito alluded to this speech and emphasized his concern that the USSR would seek compensation elsewhere for its undoubted defeat in Korea. COMMENT: The Satellites are currently capable of launching a major attack on Yugoslavia with little or no warning and Soviet propaganda attacks on 'Yugoslavia have recently reached an all time peak. There is no new evidence, hawever, that a Satellite attack is imminent. Molotov's brief reference to Yugoslavia in his Warsaw speech, in which he stated that the Tito regime "cannot last long," appears to be more of a warning to Poland as to the course that a Satellite cannot take than a threat to Yugoslavia. Peasants Withdraw from Cooperative Farms. Peasants throughout Yugoslavia are reportedly planning to leave cooperative farms on the expiration of their three year contracts, principally because the government has failed to raise the standard of living on the cooper- atives. The movement to resign from the cooperatives was attaoked at a reoent meeting in Skoplje by two leading Yugoslav officials who sought to placate the peasants with additional promises of reforms in- cluding a reduction in the prices of consumer goods. TOP SECRET 2 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 v400 ? Nue TOP SECRET COMMENT: Many peasants who joined cooperatives during the governmental drive of 1948 and 1949 will soon be eligible to withdraw under a law which permits optional withdrawal after three years. peasants in many cooperatives are planning mass resignations. Over 20% of the Yugoslav farm land is currently organized into cooperatives but their number will diminish rapidly with- in the next year unless the government succeeds in discouraging these mass resignations. 11. TOP SECRET 3 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 r) v 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 g4C&O TOP SECRET SECTION 2 (EASTERN) ggyIm?Attladange at J se Peace Tr .a Co fs n e Probeekle. The Permanent Spereteey of the Ceylonese Ministry of EXternal Affairs says that his Government expects to name Ambassador to the US Corea as its delegate to the Sen Francisco conference an that he believes there will .be no difficulty over eey a signing the Japanese Peace Treaty. COMMENTs Pakistan and Ceylon are both expected to participate in the conference. India has not yet indicated its deeisien on the matter, but it will probably also attend. 25X1 LOA I 93" AVTOW NejlaAtaleMAIton 4.2=1.14. 25X1 CinC Ne Win has submitted his resignation to the Defense 25X1 Minister. COMMENTs There is no 25X1 doubt that NO Sin's resignation will be accepted. The Government will heere groat difficulty in selecting a suitable replacemonto Karsng glePgrtedl3kellge-Ita..1429.1ALL..1sColiniswl. A well- informed Karen source has told the US EMbassy in Rangoon that Thakin Than Tun, leader of the Burma Communist Party, arranged for the training in C mmunist China that some Karens are now receiving. The source claims that Shortages of medicines and ammuuiti naea factor in forcin he Kar4meo to cooperate with the Communists. PANED 25X1 There are still, no indications of growing ideological compatibility between Karens and Communists. The Karens, however, in their present plight are not likely to resist forever the temptation to accept assistance from any source that is willing to aid them. At effective Karen-Communist coalition, supported by Communist China, would conetitute a grave threat to the Burmese Go ernment. IIBB1 nCnI A=._mrs an sPe 0 The Secretary General of the BWPP recently declar d that the Burmese Govern- ment's nrepressive police would drive his party underground. The state- ment grew out of a protest Against the Government's action against BWPP leaders who had been orgawieing a program of forced plowing? The BWPP Alpe e! complained of discrimination against its members in he distribution of agricultur loans. CONT 8 The BWPP- :els nothing more or less than at aboveground Communist Party. It is eencouraging that the Government is teking steps to re trict BWPP activities. Although this extremely vocal Communist front has some following, its ? decision t* move underground would probably not enhance greatly the capa- bilities of the Communists who are already in open insurrection. 4 wee INDOCHINA. FrenaAkSnicious eLNG6aAi?g_Ilet Min M n Off0 A reported Viet Minh broadcast suggesting mediation by India and China of the conflict in Indochina has been received by the French with utmost r1srve0 The French point tr a continuation of Viet Minh broadcasts deianding the with awal from Iudochina by all French military forces before e TOP SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 ? TOP SECRET peac be discussed. Such broadcasts, the French feel, contradict the "peace offer." COMMENTs Rumors of possible peace negotiations have been fi quent in Indochina since the Korean truce 'talks began. Last week the Viet Minh broadcast without c mment a pro-Communist French Aewspaper?s proposal of negotiations between the French and Viet Minh. tI gowInrdct14 c s fujudgcttu? Decisions to increase Chinese Communist aid to Viet Minh to 109000 ton per m nth, beginning in August, and to organise three Chinese armies to be infiltrated into Viet Minh territory for "voluntary service," were reportedly made at a July conference of Viet Minh, Soviet, and Chinese representatives presided YEH Chien-ying9 Governor of Kwangtung. com1EIT8 Reliable figures on the socOnt of Chir se Communist to the Viet Minh forces in Indochina are lacking, but the total *f ,0Q0 tone referred to aboveis considered suspect, when compared with a Hong Kong press report of the same meeting which stated that 19000 tons wouldobe forthcoming on a monthly basis. The urgency ascribed to the oomplithea of railand road connections with Indochina suggests the probe- 13=tr:bf intentions to augment considerabiy the flow of supplies into that area, The infiltration of unknown numbers of Chinese Communist troops across the border is now accepted. To date, however, none of them have been identified in combat operations. While the potential to commit three armies of "volunteers" is generally conceded, there are no reliable indi- cations of Chinese intentions to implement such a plan at this time. aC" giliSoP,OitatIQM.1.124.1LaagotolTAYLSOlizzato.Plissitboxcialskad-QM* 1114?. A concentration of eight gunboats, four steamers, and 40 motor junk in the Halmen area of the Chekiang coast is believed, by Chinese Netiopaliat military officials, to indicate the probability of a Communist attack on the Tachen Islands in the near future. CO TJ Predictions of Chinese Communist invasions of -does and other off-Shore islands have been frequently received over the pest pix months. The ability of the Red foroe in the area t ;else the Tachon Islands (20 maesofrom Haimen)9 prOsently held by 19000 Nationalist marines arid. a "guerrilla column," is generally conceded. Nationalist reauttance to strengthen their defenses on the Islands, held valuable as bass for guerrilla and intelligenoe operations, for fear of provokiAg a Communist assault. ALIgat of TINP_MPIDAMOTALIDAso the arrest of a US businessman in Tientsin in mid-June and of another US busine man in Shanghai in midojaly. The latter is the fir.t case known to US ConGen Hong Kong of the erre t of an American for failure to discharge alleged obligations to Chinese employee '0 ConGen believes 19 Americans to be und r arrest in Communist China., TOP SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 25X1 25X1 LOA I 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 months. TOP SECRET COMM T8 Both Americans are likely to be detained for "C" JAPAN. Socialists Refuse to Participat4 in Trpaty Conference. The Cantrell Committee of the Socialist Party has decided that the party will not be represented in the Japanese delegation to the ' ace conference on the grounds that the signing of the treaty shmi1t 1e done by the Government at its own responsibility. . COMMENT: The Socialist Party has continuously maintained its opposition to a peace treaty which did not include the Communist powers. Its decision not to participate in the delegation at San Francisco would be consiStent with its past polity. At the same time the party is left free to capitalize on any unfavorable consequences of the separate peace, including reaction 1007those terms of the present treaty which the Japanese consider'unsatisfactOry. TOP SECRET 6 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 vegir *?10 TOP SECRET SECTION 3 (WES1LaN) GERMANY* West German Lower House Ad ourns after Productive Session* US officials in Bonn characterize the recently completed session of the West German Parliamentgs Lower House as "decidedly productive", They feel that the new federal Parliament has developed rather well in its first two years, having acquired considerable experience, stature, and ability as a legislative body, Extremist parties of both Left and Right have been held very well in check, Contrary to original fears, the Parliament has refused to act as a rubber stamp for the government, Relations with the government, however. still 1 wilin72 to be desired, because of the manner in -which Chancellor Adenauer operates, Despite its good record of legislation, the Lower House has fallen behind in its budgetary work, and has a backlog of some important unfinished business, such as equalization of burdens lerp1q1A-hinn ratification of the Schuman Plan* COWENT: The first postwar West Cerman Lower House, elected in August i949, has often been under fire because of excessively rigid and stodgy procedure and dull sessions. In recent months, however, a change in floor leadership has produced some improvement. A new set of standing rules may also help to streamline procedures in the next session, which opens in September. A legislative "question hour", similar to the British House of Commons procedure, will be included. "B" FRANCE. Gaullists Unlikel Following Ra to Profit Immediately fran Cabinet Crisis. Soci is Rene Mayer 3 S tONd e TOP SECRET Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X6 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 vreW ss ? TOP SECRET invested by the Assembly as Premier, President Auriol turned next to Popular Republican Georges Bidault and then Rightist Independent Paul Reynaud. Foreign Minister Schuman, another leader of the Catholic- oriented Popular Republicans, had previously declined to attempt to form a government, and most of this partygs deputies abstained in the vote on Mayer. The Gaullists f strength in the Assembly will enable them to continue to use the now critical question of aid to church schools in an effort to divide the middle-of-the-road parties of the old coalition and prove that a new majority built around the Gaullists is required. Reynaud recently stated that the only majority possible at present would be one based on those favoring aid to church schools and hence including the Gaullists, but in the debate on Mayers investiture there was no sign of a favorable response to the Gaullists f invitations to rally to them. Logically, the remaining candidates who could succeed in forming a govern- ment are the moderate leaders Pleven and Quauille. COMMENT: All cabinet crises in the past three years were aggravated by the Socialists demanding wage increases, and hence the Popular Republicansg intransigence on the church school issue points up a further serious weakening of the old majority. The Gaullists are not likely to be included in any Government receiving Assembly approval in the near future? 25X1 25X1 "B" Government Will Im ede Travel of Youth Festival Delegates. The Minis er o In erior as arrange o .elay he rave of renc delegates to the Berlin Youth Festival (5-19 August) even though he cannot refuse passports outright. The French have informally arranged for the West German consulate in Paris to "drag its feet" in the issuance of transit visas. Arrangements also are being made to refuse French transit visas to known' Communists. The French Foreign Office, however, fears that Austria may become a loophole for those Communists whose transit visas through Germany have been held up, and has suggested that authorities in Innsbruck and Salzburrt refuse to issue the grey cards required for entrance into Berlin. I COMMENT: In 25X1 spite of these efforts, several thousand French delegates to this Congress will probably reach Berlin. At the most, travel of only the least important of the delegates will be impeded, since the hard-core leaders, aware of French inclinations, have probably already arranged for transit documents, or will by-pass France? TOP- SECRET 8 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 ta, TOP SECRET IIC tt 11B1B Workers Win Concessions in Strategic Sul hur Indurt_ry, Two labor disputes, one of monthsgauration, the other o wee in the sulphur industry which produces one of Italygs few strategic raw materials, were recently settled to the advantage of workers in central Italian and Sicilian mines. Meanwhile, a strike was reported at another mine in Sicily. COMMENT: Strikes in the sulphur industry are a part of the Communist campaign to hamper Italian defense production. The Italian Government is putting pressure on management to grant concessions in order to minimize time lost in the production of a strategic commodity* UNITED KINGDOM. Cabinet 'Against Shaw of Force in Middle East at This Time. The Cabinet has rejean-TETrecommendation o he Bri is iefs of naff to place British troops in Basra and Kuwait, deciding instead to "wait and see", and to avoid provocative action at this time. The Chiefs of Staff themselves had previously rejected sUch a recommendation from the British Middle Eastern Commanders-in-Chief, but following the assassination of Abdullah, they reportedly came to the conclusion that a show of force in Iran was now required as a deterrent to new incidents and further deterioration in the Middle Rast- Attitude on. East-West Trade Meetings. A high UK Foreign con rary o previous indications 25X1 the British Government is planning to 25X1 participate fully in the preliminary Economic Commission for Europe meting on East-West trade, scheduled for 20 August. The UK expects that this will deal mainly with grain deliveries by the Soviet bloc, a matter on which the UK still seeks satisfaction. Should a general conference on East- West trade take place, however, the government would. have to review its position. The British official explained that his colleague in Paris who had so strongly apposed the meetings "had not read his papers". 7)(1 COMMENT: Gradual UK agreement to the tightening 25X1 of Allied controls on exports of strategic goods to the Soviet bloc Office official has insis 25X1 25X1 25X11 zox1 a TOP SECRET 9 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 Noe voir TOP SECRET threatens the floor of raw materials to the UK from Eastern Europe. The UK is now concentrating its efforts on maintaining imports Of certain key commodities, such as grain, in the face Of this handicap, and in so doing finds itself to some extent opposed to the US. "0" CUBA. New Legislation 1111 Prohibit Shi mont of US Embargo -List Items to Soviet UME7--The Cuban Minis er o a e vises that legislation is now being drafted which will prohibit the export and re-export from Cuba of materials considered essential to national security interests. An effort is being made to cover the entire US embargo list. Pending the promulgation of this legislation, Commerce Minister Zaydin on 19 July issued a decree prohibiting the export or re-export of any products to Soviet Russia, satellite countries, and Red China. 25X1 COMMENT: Since 1 January, an increasing effort has 25X1 been made by Soviet satellites, notably Hungary and Czechoslovakia, to obtain items such as steel scrap, henequen fiber and hides. Prior to the Kern Amendment, in the absence of a statement of US policy pertaining to the trade of Latin American nations with the Soviet satellites, the US Embassy, whenever contacted by Cuban firms requesting its views on such transactions, could only point out that the US itself did not export strategic items to the Soviet Bloc. The Embassy has been unable to obtain any information indicating that there has been any considerable amount of ship- trons.ohiptieietrfArategic commodities destined for the Soviet Bloc. 25X6 25X6 "C" URUGUAY. Communists Claim Credit for Defeating Raise in Bus Fare. - In the referendum on acceptance or rejection of the raise in municipal bus fares in Montevideo on 22 July, 65,792 votes were cast for rejection and 44;747 for acceptance. The defeat of the increase in fares represents a resounding victory for the Communist Party." 25X1 COMMENT: It was expected that if the raise in bus fare 25X1 were defeated by the referendum3the Communists mould claim the credit. It is true that the Communists initiated the campaign to defeat the fare raise, but the campaign-was successful only because they were quickly joined by almost all of the other political elements which oppose the present Colorado administration. 25X1 25X1 TOP SECRET 10 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 *me kos0 SWIM' CENTRAL INTELLIGENCE AGC! OFFICE OF CURRENT INTELLIGENCE 26 July 1951 SECTION 1 ':i:SCV:LET, "AP 77.1Eq7q. jS litioa2 Ad7iser Reck_t_ ands US Pc sHftest US Political Adviser Unger believes that th. oir possible solution of th,-, Trieste is is the definitive diAsion of the Territory ou. ethnic. linea whereby Italy would receive pract1al1y all of Zona A and a substantial coastal strip in Zone B. Siwe neither Italy or Yugoslavia woald EL:Aept such a solutionp Unger recommends that the US radially change its -,,,arirre6t policy toward Trieste and exert pressure for an early Itali9n? Yugosiav ageemento The US Political Acbristvs' points out tat? if an early defanitive solution is not reached, th,-, US must be prepared to a()%?epi, timid and probably inreasingly hostile agitation in Trieste and Italy and h daiic YUg) lay attitude toward Italy. 25X1 COMMENTs The US has officially supported the return of all 25X1 ct o Ita34. since March 1948? with therei,ommendati;n that Yug4)? slaTia and Italy settle the issue bilaterally. Wile Yugoslav leaders have stated that they would be willing to reach a bilateral settlamen;i. with some slight rectifications of the Zone B border in ItaIyls favorn it id most an"ikely that these concessims would be suffir-ient to satisfy Italia demaads. Ambassado7T Allen, noting the inereased seriousness with whi;h the TvalaYGoverumea has viewed ye,'Jent Italian agitation has urgA US avoidan of farther involvement in the Trieste issue whi',41 (;an be settled by solution. 4Iien further reJalmehds that the US emphase to Italy ao' Ylgoslavia that oommcn se,urity against So-J,iet aggression is t!')eir py 25X1 SECTION (EASTERN) "AY Fg; DanWIAAIPTIJA: JAT4.ne,ss l!eAct TrItNatItgjr1412RAR Wn islatorIv Precludejahiliooiglatms,. The TS' Ambassaaor in Manila states that the 24 July speek of the Speaker of the Philfippi.Le House of Repr,esentati.7ee is taatamount to assuan:-3e that the Philippies wr;1 Lot sigu the lapanese peace treaty? SpeakeTp whL, is :"Ioser to .5he "g'rase r,2As thar af-27 other admiaist7f't n1dr Iasmbalklug on a touo of 'Me -;ii:ATRKY Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 Declassified in Part- Sanitized Copy Approved forRelease2012/08/20 : CIA-RDP79T01146A000300260001-1 toie SECRET: iSlands to popularize his opposition to the treaty. Although his motives are Mainly political? his stand will have a widespread effect and will heighten the intense emotions generated by the treatye, The Ambassador feels that Ithe situational progressively worsen, COMMENTt The Speaker of the House is the most powerful political figure in the Philippines 3 he is also chairman of the incumbent Liberal Party and -a probable contender for the presidency in 1953. While his speech waS focussed on the reparations and eaCnrity clauses of the Japanese treaty, he also directed a bitter diatribe-against.US foreign policy, Its pnrpese, and that of his proposed tours presumably is to augment his Own political prestige and to steal the initiative from the opposition party before the November electoral campaign begins in earnest. The effect Of the speech and those scheduled to follow undoubtedly will make compromise on the treaty far more difficult* 2kIpaINI4 Cbi& iP .aton Ja anese Peace Trea The Cabinet_has approved Indonesials.participationdn,the.Japanes -peace treaty conference, and will transit its observations on the draft treaty by 5 August, A Foreign' Office spokesman intimated to US Ambassador Cochran that these observations would include a request forwarations pat?s .,ticulaay for money and property which the Japanese actually seized &rim the occupation of IndOnesigli He stated however that the request would not be of any great dimension. 93" ? ba sa o Wishes ave Pe A French doctor recently returned.fromTeiping states that Ian Ambassador Panikkar is no longer able-to:see Foreign Minister and Premier CHOU En-lai and wishes to leave Peiping. CO4INVT2 Panikkar arrived in Peiping With great fanfare-, and throughout 1950 had. better contacts with top-level Chinese Communist officials than any other non-Communist repre- sentative. In recent months Psnikkaros contacts have been greatly reduced, and disillusioned with Peiping. It is not clear whether Panikkaes loss of contact has been re ponsible for his disillusions-or his disillusion responsible for his loss of contact* In 'either cases. if Perrtkkar is genvirlay dlecouraged9 he may be in an excellent position to correctcertain naive views regarding un at China which are held by Indian Prime Minister Nehru, MOTET 2 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 Declassified in Part - Sanitized Copy Approved for Release 2012/08/20: CIA-RDP79T01146A000300260001-1 25X1