DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000400070001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 26
• Document Creation Date: December 16, 2016
• Document Release Date: December 21, 2004
• Sequence Number: 1
• Publication Date: September 4, 1951
• Content Type: SUMMARY

Approved For Reese 2005/0(, SM7j9T01146A000070001-1 Z/Y
4 September 1951
CIA No. 49331
Copy No. , n
DAILY DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
DIA, DOS and ONI
review(s) completed.
This summary of significant reports has been prepared primarily
for the internal use of the Off ice 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.
TOP SECRET
Approved For Release 2005/01/26 : CIA-RDP79T01'146A000400070001-1
 Approved For Release 2005/01/26 : CIA-RDP79T01146A000070001-1
TOP SECRET
SECTION 1 (SOVIET)
2, Soviet di-olomat interested in Japanese peace treaty and unification
of Germanys 'In courtesy calls on all NATO country missions and the
Swedish mission as well., the Russian first secretary in Bern talked about
two things, the Japanese peace treaty and the unification of Germany.
With respect to the Japanese peace treaty, he showed particular.
concern over the abrupt nature of the US invitation., which did not appear
to permit discussion or alteration of the US-UK draft; he also questioned
the exclusion of the Chinese People's Republic.
With respect to the question of German unification., he described the
division of Germany as the greatest menace to world peace and said that
settlement of the German problem was basic to any lar er understanding
between the great powers.
TOP SECRET
25X1
Approved For Release 2005/01/26 :'CIA-RDP79T01146A0004000 Off-151
 Approved For Relea a 2005/01/26 : CIA-RDP79T01146A000070001-1
TOP SECRET
Publishers criticised for ideological erms~r?rso Recent press criticism
reveals that certain Soviet publishing houses are not adhering strictly
to a "high ideological level" in their output. An ig August Pravda edi-
torial complains that many publishers have erred by stressing quantity
at the expense of quaality,, by failing to produce enough books dealing
with urgent problems, and by paying almost no attention to he great
.postwar construction projects.
The publishing house of Gosplanizdat (state planning) is criticized
for having underemphasized basic questions of State Economic Planning
and for having published works containing may ideological distortions,"
Selkhozgiz (agricultural planning) is censured for not disseminating
agrobiological knowledge and for having published textbooks and pamphlets
on agriculture that failed to expound the progressive Michurin biology,
Some of the editors of the Iskustvo publishing house (art) are described
as not having had a high-school education,, and as being unqualified to
perform their tasks.
Iii conclusion., Lravdq observes that Soviet books., whether belles-
lettres, scientific or technical,, cannot be indifferent to politics,, and
that therefore local party organs must exert themselves to extend every
possible M 4A to th
e
Goo a It is interesting to note the three fields of activity
selected by Pry for criticism., since each has been the subject of
considerable theoretical and ideological discussion in the press, The
Lysenko-Michurin controversy raged for several months,, the reviving
"nationalistic" tendencies in literature and art have caused an official
furor,,-and reliable information on the progress of the great postwar con-
struction projects is almost entirely lacking,
Eas West trade ne tira. e0nol ~s with i"~w nr?oe~rec sa According to
US observers at the recent Eastmlest trade meetings in Geneva,, Western
European delegations d,id not receive any firm indication of a Soviet
desire to trade on a,nnitaalli advantageous basis. Consequently., no wes-
tern delegation would agree to another Multilateral meeting, None of them
is optimistic about future bilateral talks with the Soviet orbit with
agreement, exception of the UK,, which is currently negotiating a new , bilateral
.
in the opinion of the Western European delegations,, the motivations
of the USSR were both comrrieroial and. propaganda. Many delegations believe
that the USSR is seriously interested in promoting increased trade or at
least in maintaining the present level,, which is already jeopardized by
the general rearmament program and Western trade controls, Soviet partici-
pation also obviously bolstered the current B?peaceful coexistence" line
TOP SECRET
25X1
Approved For Release 2005/01/26 CIA-RDP79TO1146A0004000TOb 15l
 Approved For Rele e 2005/01/26TUP T01I46A00 0070001-1
and may generate pressure against East-West trade controls, At no point
did the Communist representatives launch into the usual diatribe against
Western European trade restrictions or the US.
A US observer concluded that the Soviet delegation had instructions
to press for a broader trade meeting. The Soviet delegation would not
specify any details or indicate willingness to reach ultimate agreement
on increased East-West trade, .25X1
o e o The USSR has not reduced its demands for strategic materials
in exchange for Orbit grain, timber or coal, in order to obtain new trade
arrangements,, The Soviet delegation has., however, obtained information
about Western European needs which may improve the USSR. s bargaining
position in future bilateral talks,
EASTERN EURQPE, Pte, Po ish shit~x~in~ using Chinese crewsm US naval
sources in Europe report the recent arrival in Gdynia froze -the Far East
of the Polish ship with about 20 Chinese "passengers* whom the
master describ d as crew membpra- The, r, inese had no passports or sea-
zzt?s papers. We report tends to confirm
other indications that Polish ships are employing Chinese crew members
on vessels in the Poland-China trade,, 25X1
Comma The use of Chinese seamen by Polish merchant marine ships
engaged in Far Eastern traffic is a logical development in view of the
large expansion of Polish-Chinese maritime traffic, In September 1950
L1oydgs shipping register had one 5s,000-ton Polish vessel on the Poland-
China route, Since then., howeverp eleven~dditional Polish or Polish-
chartered-ships have been assigned to this rune
YUGOSLAVIA, ITS plans for milita sv aid?ou in Belrade In deference
to Yugoslav political considerations, the US Government does not intend
for the present to establish a standard military mission in Belgrade to
supervise US military aid,, The US plans instead to add to the embassy 'staff in
Belgrade at least 15 officers drawn from the three services plus approxi,--
mately an equal number of enlisted and civilian personnel,, Although the
group would be attached to the service attache offices for administrative
purposes, it would operate under its own chief and would have direct
access to the Yugoslav military staffs. If the Yugoslav Government
indicates misapprehension regarding the duties of this group, Ambassador
Allen has been instructed to extend, an invitation for several Yugoslav
officers to visit Paris in order to observe the operations o Military
Assistance Advisory Group there, 25X1
8e ther decentra5iation ofu~oslav aeon v nls,nned The Yugoslav
Government has published, the draft of new economic legislation which
Approved For Release 2005/01/26 : 146AO00400070404ep 51
 Approved For Release 2005/01/26 : CIA-RDP79T01146A000060070001-1
TOP SECRET
looks to a limited reversion to the law of supply and demand and a further
decentralization in i1.u.stry. The government hopes that this law will
prime the pump of the country?s economic system and rectify errors in
planning and execution.
Under the new plan,, more production planning will be turned over to
producers,, although the production and distribution of basic goods will
still be controlled by the central government, Certain production enter-
prises will be allowed to retain a portion of their profits, Formerly,
all questions of capital. investment were determined by the central govern-
ment. under the new lawgy, only basic capital investments necessary for. the
further economic development of the country will be directed from above.
The law of supply and demand will. operate within certain limits in the
fields of production and consumer sales and in the establishment of wage
levels.
Co ents A Yugoslav Government spokesman announced in July that
new legislation.was being formulated which would result in further decen-
tralization and "popul,arizatioe of the Yugoslav economy
the Yugoslav Government has already ameliorated controaonTthehpeasants
by reducing and modifying agricultural taxes,
9. TRIESTE. Proxaosed constracti,on to meet refugee home
ins
e
in Triestes
`The Allied Ellitary? Government i
T
lanc
t
n
rieste is drawin
plans to construct
500 emergency housing units to
t
mee
the pressing refugee
funds will be required for the
e
A
proJect9 which can be complgted
within
three to four months from date of contract and which will house 1, 500 to
29000 people, US Political Adviser Unger in Trieste points out that the
proposed units will be a potentially important addition to the Zones
strained housing facilities and will alleviate the danger of fire and
epidemics conditions th
t l
a
ower morale and, increase the giber of
refugees who carrot be "---4-4'1 _4
Conenato The number of refu
gees in Trieste camps has reached an
,ugoslav
all time high of approximately they will assist in ta curling the numbers, about 400 refugees sarea es
entering Zone A from Yugoslavia each month,
Overcrowded conditions in the refugee camps contribute to unrest and
dissatisfaction among the refugees,, creating a state of mind that makes
them undesirable as prospective :Iii s
reports-of deplorable conditions in these cameventually, ofilterobacker'
to Easters, Europe and tend to discourage potential, defectors,
TOP SECRET
25X1
25X1
4
Approved For Release 2005/01/26: CIA-RDP79T01146A000400 -7 11l
 Approved For Rele e 2005/01/26 : CIA-RDP79TO1146AO6 O070001-1
TOP SECRET
10. MTTERNATIONAL CONMISMb Two more internati
l C
ona
omma st front or a
z a t i o n s meet in East GermQ
The
,.
ernational.Associationof Democrat
Lawyers an affiliate of the Communist W
ld F
or
ederation of Trade Unions,,
will hold a congress in East Berlin from 5 to 8 September under the there
"law in the service of peace.* The Union for the Development of Law., a
front organization of Austrian Cost lawyersD has been invited to par-
ticipate in the congress_ I
C entm East Germany has become a favorite meeting place for
international Communist front organizations,, An international conference
of teacherrst unions., also affiliated with the WFTU$ has just concluded a
five-day session in Erfurt,, This meeting made a special call for a
teachers2 conference in South America to plan an educational system
directed toward "peace and democracy." The influential position of members
of these two professions make them special targets for Communist organi-
zational efforts,,
TOP SECRET
25X1
5 L~
Approved For Release 2005/01/26: CIA-RDP79TO1146AOOO4O0071511
 L.. J
Approved For Rele'e 2005/01/26 : CIA-RDP79T01146A0000070001-1
SECTION 2 (EASTERN)
CYPRUS. Nationalists do not. flan to brim "Unonwih Greece" guy -ion
to :UN.- The British acting Governor of Cyprus, in a press interview,
repeated that the British Government recognizes the principle of self-
determination and had offer-_d the Cypriots self-rule under which they
could have worked for union with Greece (Enosis) if they had so wished.
The same Veposter also interviewed the Archbishop of Cyprus who
reportedly said that the Cypriots wanted only union with Greece, not
self-government, but that the question would not be taken to the UN
now because of the international situation.
Commen e Union of Cyprus with Greece is perenially agitated in
Cyprus and is favored by the majority of the Greek population although
opposed by the 17 pVrcent Turkish minority. Many businessmen who support
union are actually fearful that should it occur the more stable Cypriot
economy, now based on sterling, would have a very uncertain future tied
to the Greek drachma. The rightist nationalists, backed by the church
and sensitive to the strategic position which Cyprus occupies in the
Eastern Mediterranean, probably feel that any move toward union with
Greece at this time would be tactically unwise.
2. IRAN/AFGHANISTAN. AAf hanist n and Iran re.or dlv.,~si?n oil agreements
Agreement between Iran and Afghanistan for the delivery of Iranian oil
to Afghanistan has been formally announced in Kabul. The US Embassy in
,Afghanistan, in expressing doubt over the feasibility of. overland trans-
portation, points out that the roads linking Iran with Afghanistan are
inadequate for re lar and sizable oil shi meats.
Comment. Both countries are impelled by obvious propaganda motives.
Afghanistan wishes to free itself from dependency upon Pakistan and the
USSR. Iran needs to sell oil. The entire annual volume of Afghanistan's
oil consumption, however, is equivalent only to a small fraction of one
dayHs normal production of the Abadan refinery.
Details of the reported oil agreement have not been released. In
any event implementation will be slow and of no present tangible benefit
to either country.
6 4Sep 51
25X1
25X1
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For ReYase 2005/01/26 : CIA-RDP79T01146A0 0 00070001-1
g
situation caused by the shutdown of the oil fields. Such plans, however,
would do little to alleviate the approaching crisis.
always spiritedly, the Prime Minister's handling of the 011 si ua on.
The Iranian Government has announced extensive plans for agricultural
ation projects in an attempt to relieve the unemplodment
and irri
I ~e eves
he country's resources. The only hope would be if the Shah, supported
by the US and UK, should undertake reforms personally, or give complete
support to some one else able to carry such measures.
Co ens The views expressed by this official may represent the
opinions of many more moderate Iranians who have opposed, although not
np-gsimistle over economic situation: An Iranian
b li a the only governmen po cy in ran is a 'ng
e army a
other disloyal activities would be likel
Iranian Army is still being paid promptly, there is a possibility that
pay may have o be suspended if Iran's critical financial condition does
not improve. such a suspension would impair
th 's morale and efficiency but not to the point where mutin or
Comment-. AlthoughIran's financial situation is serious, current
estimates indicate that the government will be able to maintain its
current rate of expenditures for several months.
TOP SECRET
7
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
4 Sep 51
25X1
25X1
25X1
25X1
25X1
 Approved For Rele* 2005/01/26 : CIA-RDP79T01146A000469 0070001-1
6. INDIA. US Embassy comments on crisis in Congress Party: The struggle
for control of the Congress Party which began in 1950 when the conserva-
tive group elected Tandon president, defeating the progressive pro-Nehru
group, may shortly be brought to a head, according to the US Embassy in
New Delhi. The gradual withdrawal of opposition members has largely
been caused by Tandonas strategy to drive out his opponents but to retain
Nehru, whose ability to command mass support in the elections is unques-
tioned.
The embassy believes no reliable forecast can be made of the outcome
at this time. The All-India Congress Committee (AICC) is holding an
important session on 3 September, at which time either Tandon or Nehru
may be determined to force a showdown. Present indications are that
if the AICC is forced to make a choice between Tandon and Nehru, it will
choose Nehru rather than face the prospect of fighting the elections with-
7. BURMA. Burma continues to permit transshipment of tires to China: The
US Embassy in Rangoon reports that despite a Burmese Government order
designed to curtail illegal shipments of tires to China, customs records
show that transshipments are continuing. According to a Burmese official,
his government has no legal basis for stopping transit trade so long as
"payments for material shipped in transit are not made with foreign
Comae The embassy has previously observed that the only effective
way to prevent export of tires from Burma to China is to limit Burmese
imports.
TOP SECRET
25X1
25X1
8 4 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Relea"5'e 2005/01/26: CIA-RDP79T01146AO00400070001-1
ng Kren-Commtpist egoneration re orteds The US Embassy in
Rangoon reports that it has received information which indicates increasing
cooperation between Karen and Communist insurgents. Reportedly, some Karens
have already gone'to China for indoctrination, the Karen high command in
the Irrawaddy Delta now favors moving northward with the Communists who are
"pulling out soon," and Communist proselytizing among the Karens has been
accelerated.
The nbassy also reports that the Burmese Government is planning a
political settlement with the Karens, but only after a major offensive
against the Karen stronghold in eastern Burma. The embassy fears that
such action wouldrender impossible a, reasonable political settlement,
facilitate a Communist-Karen deal and force many neutral Karens to join the
insurgent ranks.
Comments The possibility of Karen cooperation with-the Communists has
increased as the Karen position has become more desperate., Contrary to
popular conception, approximately 90 percent of the Karens are non-Christians
Their cultural backwardness also exposes them to exploitation by the Com-
munists. Thus, the embassy?s fears are well founded.
10, Ch n secultural dale motion to visit Brian-s The Burmese Prime
Minister recently informed US Ambassador Key that a Chinese Communist
cultural delegation headed by the Deputy Minister of Cultural Affairs
is expected to visit Burma in November after spending a month in India.
He stated he does not attache much significance to the matter, although
pro-Communist elements could be expected nt it as a development
of major importance.
iammm t.s Although the Burmese Government is unlikely to make any
special facilities available to the Chinese delegation, the Prime Minister
is obviously attempting to soften the US reaction to such a visit,
TOP SECRET
25X1
25X1
25X1
9 4 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Rel'e 2005/01/26: CIA-RDP79T01146A00W0070001-1
25X1
110' PLAYA. Director o~? z~eratior/s ~e~eds The press has announced the ap-
pointment of General Sir Rob Lockhart to succeed Lieutenant General Sir
Harold Briggs on the expiration of the latter's term in November. General
Lockhart had retired in.1948 after a, long career in India, where he had
been the first C=in=C of the Indian Army after the transfer of sovereignty,
Of the 25 candidates from Thailand?a five southern provinces who have an-
THAILAND,
120
pounced their intention to run for Parliament in the next general elections,
the US Embassy in Bangkok reports that ten are supporters of Police Director
Phao, eleven belong to other pro-government parties and only three are op-
position Democrats. The embassy comments that this is indicative of the im-
portant part Phao and his clique will play in the elections, and of the
decline of the Democrats who heretofore have been strong in the south.
Commen s There are numerous indications that the General Phao is
making a major effort to supplement his military strength with an effective
political machine.
25X1
13. Prime Minister forms important political committees Prime Minis-
ter Phibun has formed an "unofficial" political committee composed of him-
self, Army C-in-C Phin, Police. Director Phao, a. former foreign minister
under Pridi, and ex-Prime Minister Thamrong. While the purpose of this
committee is not yet clear, apparently it is to concern itself with internal
political strategy, possibly leading to a broadening of the government after
the March elections to include pro-Pridi elements.. The US Embassy in Bang-
kok observes that Phibun has previously-made efforts to bring fresh elements
into his government but such efforts have always been opposed by Phin and
Phao.
Comments Phibun may be attempting to win new support to offset the
growing influence of the ambitious General Phao.
4 Sep 51
25X1
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 25X1 Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
Next 1 Page(s) In Document Exempt
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Rase 2005/01/26 : CIA-RDP79T01146'0400070001-1
TOP SECRET
19. Ribber cargo fU .i a _de- a by Polish bunkerin difficultiea
The Polish vessel Kilinsk scheduled to call at Colombo, Ceylon, to
pick up a cargo of rubber for China, has canceled its Colombo call because
of inability to secure sufficient bunker fuel. The Poles have indicated
that another Polish vessel ma be available at-the end of September to
load the rubber car o
Comments Polish difficulties in securing bunker fuel from Western
oil companies are responsible for delaying rubber shipments to Communist
China from Ceylon. Financial arrangements are already completed, and the
Ceylonese Government has indicated that it will not interfere with the
movement of rubber cargo to the Communists, although Ceylonese officials
are refusing to help in efforts to get feel for Polish vessels.
co o~ of ROK air arm s Disputes
21o South Korean Armand Air Farce dispt~t.a ,tom -
between the ROK Army and Air Force regarding control and utilization of
light aircraft are beginning to assume serious proportions. It is now
rumored that the army will take over light aviation in the near future,
certainly by 1 January. The Air Force Chief of Staff states he will not
release the pilots in training. The US Army Attache in Seoul believes the
25X1
25X1
25X1
13 4 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Reese 2005/01/26: CIA-RDP79T01146A000070001-1
22.
Chiefs of Staff of both se"vices could reach agreement were it not for
pressure from outside military authorities. The ROK Air Force has recent-
ly been successfully utilized in several anti-guerrilla operations, es
pecially in southwest Korea,
C -men s While the ROK Air Force is very small., its recent anti-
guerrilla successes have demonstrated its potential for the maintenance
of internal stability. The ROK cannot afford two air forces. It is
probable that US suggestion could clear up this squabble.
JAPAN. New Sterli?ea trade areem n tis si neds new nglo-Jap-
anese over-all payments agreement, expressed in pounds sterling, was
signed in Tokyo on 31 August. The new agreement eliminated the stip-
ulation, contained in the previous agreement., that settlement of balances
would be in dollars.
Comments The new agreement, through the elimination of the threat
of a dollar drain on the part of the UK, should stimulate Japan's trade
with the sterling countries. Many Japanese fear, however, that Japan
will find itself with large accumulations of unexpendable sterling and
a shortage of dollars with which to purchase vital imports. Phase 7.attgr
look upon the recent negotiations as a defeat for Japan in its first
postwar independent bilateral discussions.
25X1
25X1
IL 4 Sep 51
Approved For Release 2005/01/26 :.CIADP79T01146A000400070001-1
 Approved For Reese 2005/01/26: CIA-RDP79T01146A0`00070001-1
TOP SECRET
SECTION 3 (WESTERN)
25X6
2, East German attempts to expand illegal trade to alleviate inch
of Western rade restr-ictionsa Due to Wes ern prohibi on o exports from
es Germany to as ermany (a counter-measure to Soviet restrictions on
exports Trom West Berlin), East Germany has begun to experience material
shortages and is having difficulty meeting reparations quotas and filling
export orders.
In an effort to alleviate the shortages, East Germany is attempting
to expand the volume of illegal shipments from West Germany, Various West
German trade circles which have shown willingness to evade West German trade
controls in the past are being pressured to increase their illegal activities,
while triangular transactions are being expanded, with the'Hamburg Free Port
TOP SECRET
15 1,
Approved For Release 2005/01/26: CIA-RDP79T01146A0004000700D r-? 51
 Approved For Rele 2005/01/26 : CIA-RDP79T01146A000070001-1
TOP SECRET
in particular being used. A Swiss firm is particularly notorious for these
transactions. The apparent increase in Soviet East German confiscation of
West Berlin trucks at the Berlin-Helmstedt highway check point may also be
an indication of a new technique of evasion. It is possible that this
technique is pursued with the connivance of Western firms engaged in delivery
25X1
of strategic materials.
Comment: Although the West German Government has indicated a willingness
to joinwith the Allies in eliminating the flow of illegal shipments to East
Germanys it is evident that procedures for enforcing controls are by no means
completely effective. It is unlikely, however,. that East Germany can expand
illegal shipments sufficiently to compensate for the loss of legal trade, and
if the present trade impasse continues the East German economy will be
progressively damaged.
25X1
3. AUSTRIA. Communists denounce alleged US participation in sabotage case.
e oviet--Communist press has reacted sharply to the protection granted in
the US zone to an Austrian Communist allegedly responsible for a 300,000-
schilling fire in a Soviet-managed plant in Vienna. To a Communist charge
that the accused operated under US directives and obtained US/CIC protection,
High Commissioner Donnelly has publicly denied CIC implication in the sabotage,
but taunted the Communists with the observation that it is an interesting
commentary when an admitted "Leninist-Communist" seeks American protection.
from the threats of Stalinist persecution. The US Le ation believes that
Communist interest in the perpetrator of the crime 25X1
terns from fear of a widespread anti-Stalinist
p o
The Communist per Abend has further utilized this opportunity to
publicize widely the "Nocker case" in which the Austrian Ministry
of Interior was caught last March in a tug of war between the US and Soviet
headquarters. According to the Communist versions the American authorities
intervened with the Austrian Government to obtain the protection of Nocker
and his associates, described as gangsters and prostitutes, whose arrest
had been. demanded by the Soviet Kommandatura on charges of participation
in a US-instigated plot to encourage wider read defection among Soviet troops
stationed in Austria, f-- I 25X1
Comment: The episodes are significant of the continuing security
problem the Austrian Ministry of Interior and its difficulties in
controlling police officials in the Soviet zone. Following widespread public
criticism last April of Soviet use of Austrian police to secure arrests and
abductions of persons, it was reported that the Soviets had ordered an
abandonment of this procedure. This now appears to have been prematurely
reported. Minister Helmer's efforts to purge Communist influence from the
i6 4 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Ruse 2005/01/26 : CIA-RDP79T01146AOW400070001-1
TOP SECRET
police force have had only limited success. The Per Abend account of the
Necker affair bears sufficient resemblance to official Austrian reports
to indicate that the Communists retain ready access to at least some files
in which they have particular_interesta
SWITZERLANDo Nation's position in event. of war is still ambiguous: A top-
ve -official of the Swiss Foreign O fice recently declared to the US
linister, in what the latter calls "a strong statement indeed," that "as
regards our neutrality, our hearts,.our minds, and our actions, we are pro-
West." He added that in the event of war with the USSR, "we are prepared not
to be neutral." The US Minister states flatly that the Swiss in general
show much more awareness of the Soviet threat to their system of democracy
than they did of the Nazi threat,
Comment: It is not clear whether the Swiss official's statement means
thatss would actively join Western Europe in resisting Soviet attack
or, and more probably, that the Swiss would stop all commercial intercourse
with the USSR, should the latter initiate general hostilities? .
UNITED"KINGD?ML British say rise in their defense expenditures for NATO
is impossible: The Britis have submi ted to the NATO Financial and .
conomic Board secretariat a memorandum giving their. estimate' that between
now and 1954 an additional expenditure of 2,130 million pounds. on defense
goods and services above present plans will be necessary if their defense
efforts are to meet tentative UK obligations under the interim force allo-
cations and Standing Group planning assumptions. The memorandum points out
that the present defense program is a considerable burden, made even heavier
by recent unanticipated events and concludes "The assumption of additional
load is out of the question."
Comment.- The above quotation, though not a top-level pronouncement,
fores ai c the position the British Government will be very likely forced
to take because of the country's basic economic condition and its effect
on-the domestic political situation, Aware that the US plans, during
various NATO meetings this fall, to stimulate promises of additional
European defense efforts, the UK is now dropping well--documanted hints
regarding its incapacity to increase the
present rearmament program.
25X1
25X1
25X6
TOP SECRET
17 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 ? Approved For Releee 2005/01/26: CIA-RDP79T01146A00`90070001-1
TOP SECRET
25X6
25X1
7. ARGENTINA. Government decrees cattle deliveries to alleviate meat shortage:
The Argentine Governmen has taken drastic s eps to :via e the shortage
the country, and the drought's reduction of herds.
25X1
to price ceilings fixed on 6 July, increased consumption in the interior of
of meat for consum tion in the capital and for export to Britain 25X1
It decreed that cattlemen should start delivering
stock in amounts equal to those of the last quarter of 1950 under penalty
of seizure for noncompliance. During the past two months cattle deliveries
have dropped 50 percent. The shortage is attributed to producers' resistance
Comment: The gradual decline in Argentina's exportable surplus of meat
is significantly reducing its sterling and dollar earning capacity. It also
reduces the Argentine potential for logistical support in the'event of a ware
The government recently raised retail meat prices an average of 34 percent
in an effort to improve the meat situation.
8. Senora de Peron renounces candidac? for vice? resident.: In a
31 August broa cas , enora a Peron announce a s e a r,ac ed an
independent and irrevocable decision to renounce the great hohor of her
nomination for vice-president. She explained that now those doubters of
her sincerity "will never be able to say that all my work was spurred on
by mean and personal ambition." She wanted it understood clearly that she
was not abandoning the battle.. She will continue her work in the General
Confederation of Labor as the spokesman of the workers, and, through her
work and "example," she wishes to consolidate the material and moral forces
of the men's and women's branches.of the Peronista Party. Following Evita's
speech, Peronista Party and labor spokesmen announced that they would accept
18 4 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Rele a 2005/01/26 : CIA-RDP79T01146AO0 0070001-1
'OP SEDR.ET
her decision because "Eva Peron and the people constitute a single and
indestructible force," It was later announced that the incumbent vice-
president, Dr. Hortensio J, Quijano, has been designated Peron's running
mate in t1 'll November electionq, 25X1
Comment: Evitaas withdra-Kal, forced by army pressure, removed the
main rea to Peron's regime, The current position of Col, Domingo
Mercante, Governor of the Province of Buenos Aires and would-be Peronista
candidate :for 'vice-president, has not been defined. Considerable political
maneuvering continues, and it is possible that he has bargained to retain
his important governorship, which Evita&s brother, Juan Duarte, has been
trying to wangle.
19 4 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 UlIX-tASSIFIED when b4rp~i?d dSlE fl"1 [setg(~ ~?/~~p;S~ } t yrr~t ~J iggl~pp ~g~e~ or declassi-
fied when filled in form is detached from controlled document.
CONTROL AND COVER SHEET FOR TOP SECRET DOCUMENT
DOCUMENT DESCRIPTION
REGISTRY
SOURCE
CIA CON OL_0 -
DOC. NO.
DATE DOCUMENT RECEIVED
DOC. DATE
COPY NO.
LOGGED BY
NUMBER OF PAGES
NUMBER OF ATTACHMENTS
ATTENTION: This form will be placed on top of and attached to each Top Secret document received by the Central Intelligence Agency
or classified Top Secret within the CIA and will remain attached to the document until such time as it is downgraded, destroyed, or
transmitted outside of CIA. Access to Top Secret matter is limited to Top Secret Control personnel and those- individuals whose official
duties relate to the matter. Top Secret Control Officers who receive and/or release the attached Top Secret material will sign this form
and indicate period of custody in the left-hand columns provided. Each individual who sees the Top Secret document will sign and
indicate the date of handling in the right-hand columns.
REFERRED TO
RECEIVED
RELEASED
SEEN BY
OFFICE
SIGNATURE
DATE
TIME
DATE
TIME
SIGNATURE
OFFICE/DIV.
DATE
NOTICE OF DETACHMENT: When this form is detached from Top Secret material it shall be completed in the appropriate spaces below
and transmitted to Central Top Secret Control for record.
DOWNGRADED
DESTROYED
DISPATCHED (OUTSIDE CIA)
TO
BY (Signature)
TO
BY (Signature)
WITNESSED BY (Signature)
BY (Signature)
OFFICE 4
Woved For
elrease 2005/01/26:
T_E DP79T01
0-R~
M4600400070001-1
DATE
TOP SECRET
FORM
8-73 26 USE PREVIOUS EDITIONS. TOP SECRET (40)
 Approved For Relee 2005/01/26: CIA-RDP79T01146A00Q00070001-1
TOP SECRET
4 September 1951
CIA No. 49331-A
- c:
Copy No.
25X1
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. 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.
TOP SECRET
Approved For Release 2005/01/26 CIA-RDP79T01146A000400070001-1
 Approved For Relce 2005/01/26 : CIA-RDP79T01146A00i0070001-1
TOP SECRET
SECTION 2 (EASTERN)
IRAN. Council of Ministers. gets economic program for Khuzistan: The recent-
ly formed Board for the Development of Khuzistan has presented a comprehen-
sive program for the economic development of this province to the Iranian
Council of Ministers. The program envisages the construction of a sugar
factory, cultivation of rubber plants, setting up of ice factories, and the
growing of dates, It is to be financed from part of the money taken from
the note cover reserve and from the Export-Import Bank loan, Commenting that
the program probably represents government efforts to convince the public that
the unemployed oil workers will be taken care of'the `CS Embassy states that
the large scope of the program and the lack of preparation would hardly prom-
ise quick implementations 25X1
Qommento The presentation of the Khuzistan program may be interpreted
as an attempt to bring indirect pressure on Britain, Tying the funds for
this program to the anticipated Import-Export loan also involves the US0
25X6
2, INDOCHINA. Cambodia to withdraw reparations claimsa The head of the
Cambodian delegation to the San Francisco conference, on departing from Pnom
Penh, told the US Charge that Cambodia would not put in any claim for repara-
tions "except in a sense favorable to the US." While noting that this
decision is not final the Charge regards it as a hopeful sign, 25X1
Comm On previous occasions Cambodian and Vietnamese officials
have indicated that they attach great importance to the possibility of ob-
taining reparations from Japan. US officials in Indochina have advised
against reparations claims in view of Japanos inability to pay. Vietnam
has moderated, though not renounced, its original demands for reparations,
1 4 Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Reldese 2005/01/26: CIA-RDP79T01146A00W4 0070001-1
40
TOP SECRET
50 French concurrence in German Q s admission to NATO
is foreseen for
1252. According to a report from the US Embassy in London, a "responsible
official " in the French Foreign office has stated that he and some of his
colleagues are personally convinced that Germanys membership in NATO is both
inevitable and desirable.
These officials emphasize, however, that the worst way of accomplishing
this would be for the US or UK to raise the issue with tln French before or
at the time when the Germans agree to a defense contribution. In the
opinion of the source, French public opinion would be able to accept German
TOP SECRET
25X1
25X1
2
Approved For Release 2005/01/26 : CIA-RDP79T01146A0004000700014, Sep 51
 Approved For Relge 2005/01/26: CIA-RDP79T01146A0O30070001-1
membership in NATO about six
onths after that date, or about mud.-1952,
Comment: This is the first indication that any French Government
officials are prepared to consider German admission to NATO at a definite
future date. In all aspects of the German problem, French officials stress
the importance of careful timing in order to insure that German commitments
to the common defense will ifiduce a further swing of public opinion in favor
of.netr steps toward German equality, A relatively tolerant attitude toward
Germany has been developing since July 1949, when Schuman informed the Assem-
bly that Ger any9s participation in NATO was "unthinkable" and a question
that "can never come up now or even at a later date."
French Premier believes coal shortage number one Rroblem: French
Premier Pleven has told Ambassador Bice and Mr. Harriman that the general
European coal shortage poses the "greatest problem" presently facing France?
The French feel that solutions for this problem should be canvassed in
the imminent Foreign Ministerst talks.' One possibility vo uld be to finance;
coal shipments from the US out of military assistance, if the coal is to be
devoted to the manufacture of military items. A case in point would be
coking coal for steel products such as plates, for export to the USo
Comment: According to official French estimates as of 1 July, France
will produce about 55 million metric tons of coal in 1951 and obtain 5 or 6
million tons from the Saar. The balance of French import needs for 1951
is estimated at over 15 million tons, of which the traditional suppliers in
Europe cannot furnish more than 9 million tons,,- Less than one-fourth of the
other 6 million tons, for which France looks to the US, was obtained in the
US in the first half of 10,51. Meanwhile, vital French steel production is
at only 80 per cent of capacity,
The Office of EGABs Special Representative in Paris estimates that
foreign demands upon the US for coal in fiscal year 1952 might rise as high
as 30 million tons at a cost representing about three-fourths of total US
foreign economic aide
The Office of the Special Representative and the chairman of the OEEC
agree that the coal shortage is due to political rather than technical fac-
tors, but the OEEG chief was cool toward ECA1s suggestion that he spark a
movement by the European themselves to evolve a solution.
7. Schuman, adds Moroccan question to Washington agenda: French Foreign
Minister Schuman plans to add the Morocco question to the agenda for his bi-
lateral talks with Secretary Acheson, A memorandum outlining France&s policies
25X1
3 4Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For Rise 2005/01/26: CIA-RDP79T01146A400070001-1
TOP SECRET
25X1
25X6
9.
and practices is now being drafted.
Because the foreign office believes that US officials want future French
policy to be built around the nationalist Istiqlal party, the memorandum will
disparage the party and point out that Istiglal rule would result only in
civil war and chaos. The French will draw heavily on the paradox of US and
USSR support of Istiglal, and stress the 'advantages to the West of a coopera-
tive Morocco it case of war."
The memorandum will not contain an over-all plan for the progressive
independence of French North Africa a policy long recommended US diplomats.
Comment.. French sensitivity over US influence in their Moroccan pro-
tectorate has become an obsession. No US diplomat has ever suggested that
French policy be built around the Istiglal party, which does not have US of-
ficial support but also has rejected all Communist overtures. The US has
repeatedly urged that the French adopt a concrete program looking toward
greater autonomy for Morocco -- a policy similar to the granting of independence
to the Philippines. These recommendations have been rejected by the French, who
hope to maintain hegemony in this strategic area by repressing all inclinations
toward political growth on the part of the native population.
LATIN AMERICA. Attitudes of Latin American delegates to the Japanese Treaty
Conference..' Each of the twenty Latin American republics .plans to send a
delegation to sign the Japanese treaty at San Francisco, according to Depart-
ment of State cables. Each supports the US in principle although some,
particularly Peru and Venezuela, have expressed concern that the wording of
the treaty does not make absolutely clear their right to retain Japanese
property which was seized during World War II.
TOP SECRET
4 4Sep51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1
 Approved For ReIe4e 2005/01/26 : CIA-RDP79T01146A00(0070001-1
Following,-Department of State's assurances that all the points raised
are covered by the treaty, the Peruvian Foreign Minister told the US Ambassador
in Lima that he has instructed the Peruvian delegate to sign "with no reserva-
tions." The US Embassy in Caracas reports that the Venezuelan Foreign Office
seems satisfied with the Department's comments, although the possibility of a
declaration of interpretation at the conference still exists. Until specific
assurance to the contrary is received, it must be considered that Peru also
might make such a declaration,
TOP SECRET
5 4Sep 51
Approved For Release 2005/01/26 : CIA-RDP79T01146A000400070001-1