DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000300450001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 9, 2016
• Document Release Date: June 8, 2001
• Sequence Number: 1
• Publication Date: August 22, 1951
• Content Type: SUMMARY

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22 August 1951
CIA. No. 49311
Copy No.
DAILY DIGEST
. Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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 in CIA
or in the Office of Current Intelligence. Comments represent the
immediate views of the Office of Current Intelligence.
State Dept. declassification & release instructions on file
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SECTION 1 (SOVIET)
1. USSR. US Lend-Lease goods still sold in USSR-.. Embassy Moscow notes that
US lend-lease goods are still being sold to the Soviet public, as wit-
nessed by an Embassy officer who recently saw a Russian purchasing 300
rubles worth of radio tubes, including many of US manufacture, The
Russian upon inquiring of the salesgirl for Glaveleotrosvyazbyt (chief
administration for electrical and communications-equipment sales)
whether he would be able to continue buying US tubes, was told that up
to now the supply of US tubes was adequate. (C Moscow 301, 20 Aug 51).
Comment: Further corroboration is submitted-by the Embassy which,
itself, recently purchased an RCA 6F6 tube manufactured in 1944 for
the US Army and Navy. The newly evinced Soviet interest in expanded
trade with the West may partially reflect fears of future shortages
of such essential electrical appliances and radio tubes as appear to
be still easily obtainable from abroad.
2. New postal security measures reported in Lithuania: Interior
Minister General Bartasiunas has re- 25X1C
cently issued new security measures requiring all postal shipments,
letters, parcels and telegrams circulating within Lithuania to carry
the sender's name and address. Letters and parcels destined abroad
must reportedly be presented for inspection at special postal sections
of the Gorkoms (Town Committees) or Raikoms (Regional Committees) before
mailing. Spreading rumors and gossip by mail is said to be punishable
just as if circulated by word of mouth. Minor offenses are to be
hnadled by 100 to 1000 ruble fines issued by local MVD organs. The MVD
is authorized to hand over the more serious cases to the State Prose-
cutor.
Comment: It is possible that additional security regulations-have
been introduced in the Lithuanian SSR as a 'result of riots that took
place in Wilno on 4 June 1951. (See
0/CI Daily Digest,.. 16 Aug 51). 3?- Embassy Moscow convinced of-post-war fall from grace ... of Zhukov
3
and Kuznetsovs Embassy Moscow believes that the postwar fall from grace
of General T .ukov and Vice-Admiral Kuznetsov was clearly demonstrated by
the publicity denied to them in recent years but accorded to such
titans as Konev, Rokossovsky and Vasilevsky. The Embassy recalls that
Kuznetsov, as full admiral, was apparently tried by a court of honor
in 1948, downgraded three ranks, and according to some reports de-
prived.of his freedom. Similarly Zhukov although not downgraded, was
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given peripheral assignments at Odessa and Sverdlovsk, was eclipsed by
other marshals, and received shabby treatment in films depicting the
fall of Berlin, According to-the Embassy, local reports picture
Yumashev as ailing in recent years, although he was seer' at the 1951
May Day and other functions. The Embassy doubts that he was transferred
in order to assume "higher duties," (S Moscow 257, 13 Aug 51).
Comment: Marshal Zhukov recently re-emerged into prominence at
the Polish liberation anniversary, and it is suspected that he is
slated for' an important military post. In. July, Kuznetsov was re-
appointed Minister of the Navy.
4. INTERNATIONAL CO &UNISM. High Commissioner McCloy reports 'on Communist
World Youth Festival: In a preliminary analysis of the recently con-
cluded World Youth estival in Beirlin, US High Commissioner McCloy
observes that the Communists were undoubtedly successful in gathering
a very large number of youth and marshalling them in smoothly run mass
-meetings and parades, He feels, however, that East'German participants,
knowingly or unknowingly, had engaged in anti-Communist activities on a
mass scale during the festival, and that the potential for a resistance
movement among there has been clearly demonstrated.
The Commissioner points to Communist gains, in that the bulk of the
youth obeyed Communist directions entirely, foreign participants were
probably impressed, and the Festival as a whole provided the Communists
with a wealth of propaganda material,
MoCloy is convinced, however, that the Festival took an.unexpected
turn of importance to the West when at least 600,000 of its delegates
defied'Communist regulations to visit West Berlins Many of these youth;
made full use of facilities prepared for their reception, picked up
propaganda literature, and participated in group discussions, often
voicing anti-Communist sentiments. McClciy gained the impression that
the proportion of the East German youth won over to Communism is not
as large as had been feared,
The Festival provided no reliable evidence on. the attitude of Rus-
sian or Satellite youth since they had no opportunity to join the mass
visits to West Berlin, (S Frankfort 1566, 19 Aug 51, Sect. 1 of 2;
S Frankfort 1566, 19 Aug 51, Sect. 2 of 2),
Comment: The mass visits of youth:, to the West sectors of Berlin
in many cases induced merely by curiosity -- are not deemed a reliable
index of the true extent of youth support of the East German regime.
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25X1C
5. EASTERN EUROPE, ALBANIA. Food supplimroves: The food situation in
Albania improved urc 'i ig May and June
It is reported that;'wheat bread "in great quantities' is
replacing the meager ration of"corn bread. which had been
enforced for some time,
Comment: Although the report of "great quantities" may be exagger-
ated, the food situation probably has improved. In the spring of 1951,
the Albanian. Government reduced the compulsory delivery quotas of agri-
cultural products by 25% and the USSR sent'5000 tons of wheat to allev-
iate a decline in food production. Previously. the food supply was re-
ported to have dropped as a result of . the.. drought, the lack of incentive
in the collective farm system and the government's requisitioning of
grain.
6. Trial of "spies" reveals internal difficulties, A trial of seven-
teen "terrorist kulaks accused of espion.ge and spreading false infor-
mation has begun in Tirana before an audience of 2,000. The accused
are charged with collaborating with American, Yugoslav and Greek
agents, killing Communist Party officials and attempting to recruit
agents locally for their diversionary activities.- (U FBID, 20 Aug 51)0
Comment: The current trial, with its forced public attendance,
probably is intended to terrorize the populace into submission.
7. HUNGARY. Renewed efforts bein made to overcome economic difficulties:
recent article in the Hungarian Communist Party daily dealt with the
current important tasks facing'the Communists: (1) having the grain
threshed and delivered; (2) guaranteeing the success of the production
competition; (3) increading the number of agricultural cooperatives.
Cajolery, threats, awards and imprisonment'-have all been used to
get the harvest in; however, there are reports that some grain deliver-
ies are lagging, The latest step in the move to increase production by
the recruitment of 160,000 new workers is a decree forcing the'aged and
maimed into various types of prescribed labors. 'An intensive campaign
to recruit 5,000 new miners is evidence of serious shortcomings in
Hungarian coal production. In addition, press reports presage a re-
duction in the number of rail passenger schedules aimed at economizing
15,000 tons of coal yearly. (S MA 2619 BBpst, 15 Aug 51; R M& 2624,
Bgpst, 17 Aug 51; FBIS),
Comment: Periodic drives to alleviate the deteriorating Hungarian
economic situation have failed to achieve more than momentary'success.
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The measures used.....increased control, production competitions,
higher norms....edo not correct the basic troubles which include ob-
solete machinery, lack of raw materials, a 'dearth of skilled techni-
cians, and the absence of labor incentives.
8. YUGOSLAVIA,. Yugoslavia refuses to attend San Francisco Conference,
Assistant Foreign Minister Vil -an has inf ormed'US ambassador .Alen that
the Yugoslav Government has decided not to attend the San Francisco
Japanese Treaty Conference because of the remoteness of Yugoslav sub=stantive, interest in Japanese affairs. Vilfan explained that, although
his government recognized the"deolaration'of war on Japan, made. by the
Yugoslav London Government, Yugoslavia would find it embarrassing to
take a position on a number of ejuestionswhich will probably arise at.
the Conference. (C Belgrade 219, 20 Aug 51).
Comments Yugoslavia had previously indicated that it would de-
cline the invitation. By refusing to attend, the Yugoslav Government
can avoid taking a stand on Chinese Communist participation in the
treaty, a. question that will probably be raised by the Soviet Union.
It can also evade the aTirkwardness of signing a lenient Japanese treaty
at a time when it is apposing all suggestions to revise the more puni-
tive Italian Peacy Treaty.
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SECTION 2 (EASTERN)
1. IRAN. Senate approves Export-Import Bank loan: The Iranian Senate has
approved by a wide majority the Export-Import Bank loan previously passed
by the Lower House and the Senate Committee, (U Tehran 707, 19 Aug 51).
Comment: The loan, approved by the US in early 1951, had not previously
been ratified by the Iranian Parliament. If the loan is made available, Iran
will be able to continue with its badly needed economic development program
which is currently stalled for lack of funds. However, concern has been
felt that implementation of the loan at this time would be interpreted as
pressure on Great Britain in favor of Iran. Conversely, failure to imple-
ment the loan would appear to Iran as undue pressure in support of Great,
Britain.
2. PAKISTAN. War hysteria is lacking The US Embassy in Karachi states
that the Pakistani people will be "very angry" if India proceeds with its
declared intention of supporting the election of a Constituent Assembly
in Kashmir, but that Pakistani public opinion will accept whatever action
is taken by the government to prevent the election. The embassy believes
this action will take the form of an appeal to the Commonwealth countries,
to the UN Security Council, and possibly to a special session of the UN
General Assembly to halt the elections.
In addition, the US Army Attache in Karachi reports that the'
Pakistani Army in the Lahore area is defensively disposed and that it dis-
plays calm and confidence despite the fact that India's total armored
forces are drawn up about 30 miles away. (S Karachi Weeka 7, 18 Aug 51;
S USARMA Karachi DWH 112, 17 Aug 51).
Comment: This information further substantiates the belief that
Pakistan will not initiate armed warfare with India.
3. NEPAL. Organized pro-Communist student activities, appear for the first
time: The Gpvernment of Nepal refused passports to members of the -Nepal
Students' Federation who wished to attend the Communist-sponsored East
Berlin Youth Festival, according to a 12 August press report. A Karachi
radio broadcast of 15 August stated that students in Katmandu, the capi-
tal of Nepal, demonstrated on 14 August for the establishment of diplo-
matic relations with China. (S New Delhi Weeka 33, 18 Aug 51; R FBID
Far East, 17 Aug ,l).
Comment: These are the first reports of organized pro-Communist
student activities in Nepal.
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4 INDONESIA. Communist arrests wil;_9_1n_t_kn_ue-' A member US
Ambassador Cochran that recent widespread arrests eretbased upontold
definite
information that subversive elements, including Communists, planned dis-
turbances on 17 August and had plans for further action from 21-24 August.
He said that arrests would continue until more of the known instigators
were in custody.
Pringgodigdo, Chief of President Sukarno's staff, intimated to Cochran
that Sukarno himself had been chiefly responsible for the decision to take
strong action against subversive elements,
bility which the President has taken weighs hePringgogdo said the
avily upon him He suggested
Cochran seize every opportunity to support and encourage Sukarnogestd
Djakarta 278, 18 Aug 51., (C
Comment: It is of some significance that Sukarno was personnall res-
ponsible 'for-
or the government9s decisions The cabinet is of such diverse
opinion that decisions are nearly impossible
be increasingly required should inter-Party rivalry inPtheecab netpcontinue,
5e INDOCHINA. French militar
i
os
tion in Indochina believed to be r,
little imprved" The US Army Attache in Saigon estimates that, notwith-
standing French tactical succe
sses in Tonkin, the overall strategic
Position of French Union forces is very little improved over that which
obtained last fall. He believes that-various favorable factors, including
the infliction of a four to one casualty rate on the Viet
offset by improved Viet Minh organization, recruitment, troop nhdispositionnearly
and logistics.
The process of reinforcing French forces and training native commissioned
and non-comrrd.ssioned officers has been slow, and the attache believes that
an attrition rate of ten to one would have to be maintained in order for
French Union forces to seize and retain the initiative and insure the
defeat of the enemy. (S USARMA Saigon, MC 206, 18 Aug 51),
Comment. This is an unusually view of official French claims that pthe1Vietic estimate, particularly in
and decimated in battles during the past few Minh
months.' been badly defeated
.
French Union forces, although roughly equal in numbers to those of
the Viet Minh, are better armed.. They possess undisputed air and sea
control of Indochina, are far better supported logistically, and have
access to a greater reservoir of fit manpower than the ene
barring Chinese Communist intervention, a four to one attrition rate on
the Viet Minh would appear to promise steady improvement of the French
mAlitary position,
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Chinese Consul predicts China-Vietnam diplomatic exchange: The
Chinese Consul General in Saigon announced before a meeting of Chinese
community leaders that the exchange of diplomatic representatives
between Vietnam and Nationalist China is "just around. the corner."
(S Saigon Weeka 33, 20 Aug 51).
,.Comment: The. French authorities have discouraged the establishment
of diplomatic relations between Nationalist China and Vietnam in accord
with their continuing policy of non-provocation with respect to the
Chinese Communists,
CHINA. Hong Kong shipowners withdraw vessels from Panamanian registry.-
The Panamanian Consulate General in Hong Kong has made public a decree
approved by the Panamanian cabinet (but awaiting presidential signature)
which forbids Panamanian-flag ships from calling at Communist ports and
also prohibits the carrying of strategic cargo to Hong Kong and. Macao.
Shipping firms in the colony are now applying to the Panamanian Consulate
General for revocation of their shipping registry. It is reported that
shipowners are planning to switch to British, Portuguese or Indonesian
registry. (U Central News Hong Kong, 21 Aug 51).
Comment: During the year ending 30 June 1951, Panamanian-registered
shipping engaged in trade with Communist China increased threefold. In
many cases the vessels have been registered under the names of dummy
companies, with Chinese Communist interests suspected as being the bene-
ficial owners. The projedted transfer of vessels to other registry
indicates that, in the absence of parallel action by other countries,
Panama's decree will not effectively discourage merchant shipping from
the China trade.
fie Chungking claims suppression of 1" ,000 "bandits": Chungking radio
claims that "bandit-suppression" troops, in the first six months of 1951,
"put out of action" more than 154,000 anti-Communist guerrillas in the
Southwest region (Szechwan, Sikang, Yunnan, Kweichow). (R FBID, 20 Aug 51).
Cotmnent: In June 1950 Peiping admitted the presence of 400,000
"bandits" in in the Southwest region alone. In November 1950, Peiping radio
asserted that "remnant bandits".had been wiped out in the Southwest.
Communist figures on "bandit-suppression" are unreliable even for Communist
figures, as many or most of the guerrillas listed as "put out of action"
!
are simply dispersed, thereafter to resume activity and to appear in
subsequent lists of those "suppressed," US Army G-2 estimated in July 1951
that about 75,000 anti-Communist guerrillas were still active in the
Southwest.
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Soviet "airborne division" alleLzedlir in
m;Ar+c4r.
s been in Tientsin since A zl vl vy u ~1G uvv Le s "o s Tn airborne division"
pr 95 l
ngaged in training Chinese Communist
troo
p in.the area. The Soviet division is said to comprise si paratroop
battalions with a fatal of 120 of 'ca
rs and 2,304 men' (as received) ,
Comment: No Soviet 68th rifle or airborne division, army or army
corps has been identified. Travelers from Tientsin in the past few months
have not reported the presence of Soviet military units-other than advisory-
technical personnel--in the Tientsin area. While the above report cannot
be dismissed, its validity is questionable.
10. To -rankin Nationalist air re resentative in the US recalled to
Formosa: A Taipei press report of 21 August revealed the suspension and
immediate recall to Formosa of Nationalist China's top-ranking air
representative in the US, Air Lt. Gen. Mao Pang-chu. A later report of
the same day announced the dismissal and recall'of Colonel Hsiang Weih-scan,
executive assistant to Mao. The two men were accused by the presidential
mandate of "dereliction of duties and disobedience of orders." Mao's
offenses were listed as: (a) failure to-account for funds used for the
purchase of military equipment for the Air Force; (b) dereliction of duties
impeding the fighting power of the Air Force; (c) espousal of-the cause of
"disloyal" staff members; (d) refusal to hand over
undermining the government's public funds; and (e)
speculates that neither of.thermen1will return to Formosa, ashitrw port
mean certain punishment, but rather will use their knowledge to undermine
.the prestige of Nationalist China in the US in the capacity of political
refugees, (U DANA, Taipei, 21 Aug 51).
Comment; General Mao was trained in Russia and returned to China
in 1937 to become one of Chiang Kai_shek's most trusted lieutenants.
In 1943 he was appointed head of the CAF office in Washington, to take
charge of purchase functions for the Nationalist Air Force. It is common
knowledge that he has long been a rival of Chou Chih-jou, Nationalist Air
Commander and a trusted favorite of Chiang. Whether the dismissal was
made for the reasons stated in the presidential mandate, or whether it was
a political move, is not clear. It is, however, possible that it was made
as a token of good faith to the US as aresult of the acceptance by
Nationalist China of the 20 July memoranda.
11. KOREA. Communist laps for a sixth base offensive re ported: According
to a recently captured Chinese Conununist soldier from the newly arrived
140th Division, 47th Army, his company political officer stated that his
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division was holding the line in order to permit troops in the rear areas
to prepare for a sixth phase offensive. The US Far East Conm and concludes,
reasoning from.th.e fact that similar statements by political officers
have preceded previous offensives, that an enemy offensive will be launched
if current cease-fire negotiations fail. (S CINCFE Telecon 5066, 21 Aug 51).
Comment: The US Far East Command still estimates that Conununist forces
in Korea have the capability of sustaining a major offensive for a two-
week period.
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'SECTION 3 (WESTERN)
1. GERMANY. Prospects for ratification of Schuman Plan deteriorating: Recent
de~relopments indicate that prospects for a prompt ratification of the Schuman
Plan by the West German Parliament (lower house) are deteriorating. Key
delegates of the two minor parties of the government coalition have expressed
the view that ratification would be impossible under the present circumstances,
and that half of their factions might refuse to support the Plan when the
Parliament reconvenes in September. Although HICOG officials believe these
claims to be exaggerated, they acknowledge that German anger over the recent
Ruhr Authority and Saar issues is certain to delay ratification of the Plan
and strengthen the hand of the forces opposing ratification. (C Bonn un-
numbered, 15 Aug 51; C Bonn 118, 17 Aug 51)
Comment: On 12 July, prior to its recess, the lower house passed the
law raElT ng the Schuman Plan in the first of three readings necessary to
secure final ratification.. Although the three Government parties at that
time presented a solid front in supporting the Plan, the debate indicated
that any adverse developments, particularly in the Ruhr Authority and Saar
issues, might considerably increase the Chancellor's difficulties in securing
approval at the time of the final reading of the bill?
2. FRANCE. Pleven Government protoses token aid for church-schools and sets
election Mares: a first meeting of the new Pleven government has resulted
in action on the wage and school questions, which embittered the recent
Cabinet crisis, and the dates for fall elections. The government's decision.
to raise the minimum wage, however, is far from satisfying even the non-
Communist unions. Aid to church-schools took the form mainly of an agree-
ment to seek Parliamentary approval of an increase of $2500 in credits for
secondary school scholarships. The main controversy, over aid to church
primary schools, was to be resumed 21 August in the Assembly, with. the
Government taka,ng no initiative. Cantonal elections for renewal of half
the membership in each of the general councils of the 90 departments are
scheduled for 7 and 14 October, while special elections to fill 12 vacancies
in the Council of the Republic (upper house of Parliament) will be held on
30 September. (R Paris 1077, 18 Aug 51)
Comment.- This Government may find a general solution of the wage-price
and church-school problems virtually impossible of attainment since the
Cabinet is deprived of the Socialists' participation in, its deliberations
and yet must bargain for their support in the Assembly. Meanwhile the
anticipation of fall elections has stiffened considerably the positions
of both the Socialists and the pro-Catholic Popular Republicans on the
church-school issue, the former fearing losses to the Communists, and the
latter to the Gaullists. Although the cantonal elections will turn largely
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y use O glue is consent at the lied Council meeting of
17 August to the new Austrian cartel control law? The US objection to
the law reverses the position enunciated the previous week in the Executive
Committee of the Allied Commission and is a departure from the US policy
of non-interference in internal Austrian legislations US Commissioner
Donnelly asserted that the law was contrary to the interests of consumers
and to US conceptions of sound business practices. He particularly objected
to exemptions accorded to large sectors of the business community, and to
registration provisions which, he alleged, would merely formalize the
existence of cartels. Despite US and Soviet agreement in opposing the law,
Commissioner Donnelly pointed out that the Soviet occupation itself was
responsible for numerous Austrian monopolies; the Communist press in turn
alleged that US opposition was only "ostensible" since cartels are a
consequence of the Marshallization of Austria. _(U Vienna 668, 20 Aug 51)
Comment: In general, restrictive business practices are in keeping
with time honored procedures prevailing in Austria and recent US complaints
of the "medieval" organization of Austrian business have caused resentment,
US and Soviet opposition merely delays and does not annul the objectionable
law, It would appear unlikely, therefore, that the Austrian, government will
offer a measure more acceptable to the American viewpoint,
World Council for Peace surveys Vienna as conference site: The
.general secretariat oft Wor Council for Peace has requested the Austrian
Committee of Fighters for Peace for a survey of the feasibility of convoking
a convention in Vienna in October. The US Legation is concerned that the
meeting. may coincide with Communist agitation within th
upon local questions, they will afford some measure of popular reaction
to political developments since the June' elections,
3. AUSTRIA. US opposes Austrian anti-cartel law: US High Commissioner
onne "n7 :3 t
16 Aue ranks of labor
anticipated in Austria this fall, (C Vienna 631
f 9 g 51)
Pomment.. The advantageous position of the Austrian capital (and Berlin)
as a, center nter of internation c
ommunis -fror t orb izations is becoming
increasingly evident
Th
.
Uri =Peace, yartYsans, 1j brld Fed tic~n of
Democ_ra+;~ youth and Wo
me ernational Democratic Iedera ion may-a:6-
tempt to establish Austrian h ead amid fb
the?r Tu into Vienna In the ab
xr:K
e
s
nce of e
?Cfilra F.ratrol r,,
consiaering
the possible usefulness of wide publicity-as ajjcountermeasure. s Propaganda
would stress that, in view of the Austrian attitude, agencies of inter-
national.communism could remain in Vienna only with Soviet protection. The
migration of.such agencies to Vienna, therefore, reflects unfavorably upon
Soviet intentions to terminate in the foreseeable future its Austrian
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25X1 C
5.. ITALY. Role of Communist . ara milit- organization modified: The Corn-
25X1C m=ist paramilitary organization apparato
no longer considers insurrection feasible in case of
war, au is prepared to undertake sabotage and guerrilla warfare, The
Communist Party shifted its policy in accordance with Soviet directives
issued after Tito's defection, and abandoned the aim of obtaining power
through armed revolt. Having "disinterested itself" from the apparato,
which numbers about 50,000, the Party seeks to undermine the Italian state
in every way so as to facilitate the "liberation" of Italy by the Soviet
armies when the time comes. The Communist Party never organized sabotage
schools or courses in the theory of guerrilla warfare., While'the percentage
of Communists among the enlisted men of the aimed forces is the same as
25X1A among the country's population, there has been practically no penetration
among the officers and NCO's and none at all among the carabinieri and police.
Comment: The increased efficiency of the Italian 'armed forces and
police makes armed revolt less attractive.. However, there have'been no other
indications that the Communists have desisted from consolidating their ap-
parato, whose strength US observers still estimate at 75,000. The alleged
non-existence of Communist sabotage schools conflicts with reports that the
party has recently been training expert saboteurs (see OCI Daily Digest,
17 Aug 51). While Communist penetration among the armed forces is probably
not significant, considerable infiltration has been reported among the
police, particularly in rural areas and north Italian industrial centers.
6. UNITED KINGDOM. Latest public o inion poll shows decline in Labor Party
sup-port: according to the Gallup Poll taken in July, popular suppor for
t e Conservatives increased for the first time since Iebruary, -while that
for the Labor Party correspondingly dropped. The respective percentages
for those who had made up their minds are:
February
June
July
Labor
371
1.l
39
Conservative
512
48
49
The apparent reversal of trend is considered surprising for it was widely
believed that the Labor Party would continue to make inroads in the
Conservative Party lead throughout the summer, (R London, Joint Weeka No 33,
17. Aug 51)
Comment: An increased meat ration, the Festival of Britain, and warm
weather wY held in abeyance the effects of a coal shortage were considered'
all favorable factors for sustained Labor Party popularity at least during
the summer months. However, it may be that rising prices and a belief that
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the government is not protecting British interests abroad has overshadowed
these factors in the public mind,
7, ARUBA N.W.IO Government adopts anti-strike measures.:: The Netherlands
West Indies Government is taking the following action as a result of the
recent Lago refinery strike:
(a) Dismissal of the Governor of Aruba for his failure to take
police action when so ordered;
(b) Deportation of twelve Surinam and British Guiana agitators
suspected of Communist leanings;
(c) Strictest application of police measures;; and
(d) Introduction of new legislation limiting the legality of
strikes..
The action is due, in part, to the complaint of the Lago Oil and Transport
Company to the Governor that'protection has been inadequate and that the
number of threats to American personnel must be stopped.. (C Curacao 7,
20 Aug 51)
Comment: The employees of the Lago Oil and Transport Company (Standard
Oil ofN~ -New returned to work on 18 August after -a strike lasting a
week. Operations at the refinery had been reduced to 65 per cent capacity.
The dispute was settled with the aid of a government mediator and the
employees obteined.a 16 per cent general wage increase. No serious disorders,
racial antagonism, or anti US attitude were manifested and there was no
evidence of Communist activity, The government's action will do much toward
lessening future strike threats.
TOP SECRET
13 22 Aug 5l
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 Approved For Re1e 2001/09/06 : CIA-RDP79T01146A00450001-0
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z.3: Augnr't 1951
. CIA No. 49311-A
n
Copy No.
S/S CABLE SUPPLEMENT
TO THE DAILY DIGEST
Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence.... I`t` does
not represent a complete coverage of all current reports in CIA
or in. the Office of Current Intelligence. Comments represent the
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 Approved For Rele 2001/09/06: CIA-RDP79T01146A000450001-0
SECRET
SECTION 2 (EASTERN)
1. BURMA. Burmese attitude toward Japanese peace treaty still unresolved:
.A high official of the Burmese Foreign Office informed US Embassy Rangoon
that a Cabinet decision will probably be required to determine whether or
not Burma will attend the Japanese Peace Conference, Since many cabinet
officers are out of town, a delay of several days is anticipated. The em-
bassy suspects that the Soviet Union's decision to attend may have radically
altered Burmese thinking in favor of.joining the conference, The Embassy
also feels that the Cabinet's final decision is likely to be influenced by
the Government of Indonesia. (S', S/S Rangoon 201, 18 Aug 51).
Comments US Ambassador Cochran reported from Djakarta on 21 August that
the Indonesian Foreign Minister was attempting to gain governmental and parlia-
mentary approval for participation in the conference, and that a final decision
in favor of attending was imminent.
2. INDOCHINA,, Vietnam may demand eParations from Japan: The Vietnamese Govern-
ment's note to the US Legation pleading Vietnam's case for attendance at the
San Francisco conference indicates a desire for some measure of reparations.
Previous discussions with the Vietnamese had given US officials the impression
that Vietnam did not intend to make an issue of reparations. The Vietnamese
note suggested that reparations in the form of trade privileges or Japanese
technicians would be favorably considered. (S, S/S Saigon 420, 19 Aug 51).
Comet: The French have vigorously championed Vietnam's right to at-
tend the conference, while indicating that no request for reparations would
be made on behalf of Vietnam. Vietnamese insistence on reparations, par-
ticularly in the forms suggested above, could be expected to conflict with
French reluctance to tolerate the reentry of Japanese goods and influence
into Indochina,
3. ZUJL ,. Rio tg bg AmbgglfadU to US: Secretary of Foreign Affairs
Romulo has told the US Embassy in Manila that President Quirino has decided
to send him to Washington as Ambassador and, accordingly, would not include
his name among the approved Liberal Party list of senatorial candidates,
(C, S/8 Manila 719, 18 Aug 51),
Jomme : Rumors that Romulo would run for the Senate had been inter-
Pre te ndicate that Quirino was preparing the way for him to become an
eventual candidate for the presidency. Although he is a popular figure in
the Philippines, Romulo at present lacks the close political connections
necessary to ensure his election to the highest office.
SECRET
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SECRET
4e
JAPAN, Strong criticism of peace treaty appears in press for the first time:
A columnist in the Yukan Yomiuri on 16 August strongly criticized the cheerful
and festive attitude of the Japanese Government and people toward the peace
treaty. Contrasting this with the deep resentment held by the Japanese fol-
lowing the Treaties of Shimonoseki and Portsmouth, the article stated that
this is a time for the Japanese to be in mourning and in deep grief. The US-
Political Adviser comments that this is the most critical statement yet to
appear in a large daily newspaper,and, while not typical of the prevailing
sentiment, it undoubtedly represents the unexpressed sentiments of some
Japanese and might be indicative of a future thought trend. (S, SIB Tokyo
351, 18 Aug 51)
Comments It is considered probable that a reaction against the treaty,
centering around the territorial clauses, will set in following the treaty's
signing, The Socialist Party, which has continued to maintain its opposition
to the treaty, is undoubtedly banking on this prospect to discredit the govern-
ment and enhance its own political future,.
5. British official-raises question of Japan China treaty: In the
course of a conversation about the Japanese peace treaty, a British Embassy
officer in Washington asked Ambassador Dulles whether the US interpreted the
US-UK understanding about China as preventing the signature of a peace treaty
between Japan and any Chinese government until after the coming into force of
the main Treaty of Peace. In reply, Dulles pointed out that the principle in-
volved was that there should be no Allied coercion upon Japan to adopt a
course regarding China which might prejudice Japan's best interests for the
future. He added that it would be normal that the.Japanese Government would
quickly seek a peace with the Nationalist Government, but that such a peace
should not assume that the Nationalist Government, would bind Dhina? all
Chinese
(3, S/S State to Taipei 76318 17 Aug 51). Comment: The British Cabinet originally rejected the compromise formula,
which deleted all references to China in the treaty, on the grounds that the
participation of Nationalist China through a separate bilateral treaty was made
possible at Japan's discretion. In view of this attitude, the UK would be very
unlikely to approve a policy which would encourage Japan to conclude aquick,
though limited, treaty with the Formosan government.
SECRET
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22 Aug 51