DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000400180001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 22, 2016
• Document Release Date: March 16, 2012
• Sequence Number: 1
• Publication Date: September 19, 1951
• Content Type: SUMMARY

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19 September 1951
CIA No. 49348
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.
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SECTION 1 (SOVIET)
1. USSR. All Moslems urged to sign Communist peace pact appeal: The recent
Moslem holiday afforded the Kremlin an opportunity to exert religious
influence on behalf of the Communist peace campaign. A TASS despatch
stated that the spiritual leader of Moslems of Central Asia and
Kazakhstan strongly attacked the "inhuman policy of US-UK imperialists,
designed to kindle a new.war," and called on all Moslems to sign the
World Peace Council's meal for a Five Power Peace Pact.
Comment: Moscow rarely misses an opportunity to woo religious
support for the various phases of its peace campaign. Any support or
signatures of the clergy are exploited to show the all-embracing scope
of the peace drive.
2. FINLAND: Government unwilling to curtail deliveries of certain strategic
items to Soviet Union: The Finnish Foreign Minister has informed the US
Minister in Helsinki that Finland could not take steps to curtail de-
liveries of strategic items to the USSR. The Foreign Minister pointed
out that aside from contractual obligations -- the Finnish-Soviet repara-
tions agreement and the Finnish-Soviet trade agreements -- compelling
political reasons demanded that Finland make agreed deliveries. The US
Minister stated that the Forei n Minister's comments were categorical
and left no apparent loophole. 25X1
Comment: The US has been particularly interested in halting the
shipments of Finnish copper to the USSR,which receives about 40 percent
of Finland's yearly output of approximately 18,000 tons. While Finland
is not willing to curtail its exports of strategic items to the Soviet
Union, it has voluntarily undertaken to keep a close watch on irregular
movements of such materials to the Soviet bloc. Finland has prevented
illegal transshipments of strategic goods through its ports to the USSR,
despite considerable Soviet pressure. Also, there are no known cases
in which strategic goods imported for use in Finland have been shipped
on to the Soviet bloc.
3, RUMANIA, Armored divisions move west from Bucharest: 25X1
the US Legation in Bucharest that the Tudor a mire scu
armored division left Bucharest between 11 and 13 September for Craiova,
The US Military Attache has confirmed the fact that the barracks
by this division in Bucharest are "void of normal garrison,
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Comment: The Tudor Vladimirescu division, Rumania's only armored
and best division, moved from Bucharest north to Brasov early in May, pre-
sumably for maneuvers. The division returned to Bucharest to participate
in Rumania's Liberation day celebration on 23 August. The reported movement
of this armored division to Craiova will considerably augment Rumania's
military strength in the vicinity of the Yugoslav border where two divisions
are already located.
4. RUMANIA: Military court sentences alleged imperialist agents: Concluding
a week-long trial of "spies, saboteurs and conspirators in the service of
US--British imperialism and the Vatican," the Bucharest court meted out
sentences to the ten defendants ranging from ten years to life.
An Italian Legation clerk and a Catholic priest were sentenced to
life and fifteen years, respectively.. Both are Italian nationals and
bearers of Italian service passports. In his summation, the special prose-
cutor stated that the Vatican, after the defeat of Hitler, whom it had
served put its "vast espionage network" in the service of the US for un-
leashing of.a new World War against the free peoples of the USSR and the
People's Democracies. According to the prosecutor's statement, the Italian
Government maintained through it4$Legation in Bucharest a correlated espi-
onage service in Rumania for the benefit of the American imperialists.
Comment: From the Government's viewpoint the trial accomplished
several purposes: (1) provided the opportunity fora heightening of the
scurrilous propaganda campaign against the US; (2) destroyed "legally"
the remaining links between the Vatican and some 3,000,000 Roman Catholics
in Rumania; and (3) laid the groundwork for declaring several Italian
diplomats now in Rumania persona non grata.
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SECTION 2 (EASTERN)
Comments Papagose attitude might force new elTotions which would re-
sult In esral months of political and economic instability and confusion.
An alternative would be an unlikely EPEK-Liberal combination which might
not even have a working majority. There does remain the possibility that
Papagos might win enough opposition deputies to his party tO form and main-
tain a single party government.
ma
Jar y system.
1. GREECE. Greek elections have resulted in an impasse. Marshal Papagos re-
mains adaman in his re sisal col a Ora to any other party in form-
ing a government, the US Embassy in Athens reports. Papagos feels that a
coalition would be too weak to carry out his program. Accordingly, he
intends to ask the king fora mandate to care out immediate new elections
under the
? it
30 Burma to intercede for US citizens in Chinas US Ambassador Key
25X1 in Rangoon has been informed that the urmese E assy in Peiping is to be
instructed to associate itself with the representations that other mis-
sions there are making regarding the unjustified treatment of US citizens.
Comments This gesture of goodwill towards the US may be designed to
offse'We-5nfavora'6le publicity Burma received for its non-participation
in the Japanese Peace Conference. The Burmese, however, can point to this
action as further proof of their "neutral" foreign policy.
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NOW,
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INDONESIA. Early ratification of Japanese treat depends on National
Par M. Acting Prime Minister Djui.nda toldr Ambassador Cochran that
ratification of the Japanese treaty depends almost entirely upon the
attitude of the Indonesian National Party (PNI). If PNI approval can
be assured, Djuanda expects early ratification. If the outlook is un-
favorable, he believes the treaty will not be submitted to parliament
for some time. Such a dela would permit teeters to cool and interest
in the treaty to diminish.
Comments Responsible PNI leaders have given their assurance that,
contrarrytoo?an earlier statement, the party will not withdraw its
ministers from the cabinet over the treaty issue, but thus far they have
maintained their opposition to ratification.
5. Government continues forceful policy against subversive
gr~roupea A cabinet official told US Ambassador Cochran that Prime Min-
isa Sukiman is determined to continue a firm and forceful policya-
gainst subversive groups. On this matter he is receiving increasingly
active support f e u to of Jo ?akarta. Arrests of Communists
are continuing.
Comments Estimates of the number of persons now arrested varies
from 1,000 o 3,000. However, since the initiation of the governments1
forceful policy approximately five weeks ago, there has been no ap-
preciable change in the law and order situation. ,
6. INDOCHINA; Heavy Viet Minh attack unlikely before November:
tlie-Yi-e-t inh is preparing-to-attack. It is believed pos-
sible that local attacks may take place before 1 October, but that a
general offensive is unlikel rior to Nove ber. The"morale of Viet
Minh troops continues low.
25X1
Good French-Vietnamese teamwork in Ninhbinh area: US Consul
Blancke observes that the French Colonel comman ing.French-Vietnamese
forces in the South Zone of the Tonkin delta has done an excellent job
of inspiring enthusiam and teamwork among his officers (mostly French,
gome Vietnamese) and men (overwhelmingly Vietnamese). Relations with
local Vietnamese civil authorities are good, which Blanoke attributes to
the commanding officer's "square-shooting methods."
Comments Cooperation between the French and Vietnamese at the local
level, where a clear-cut limited mission -- the elimination of the Viet
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25X1
25X1
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Minh -- exists, has been more wholehearted than at the national level,
where ultimate French intentions are still considered highly suspect by
many influential Vietnamese.
t h e signing o he apanese peace t r e a t v+~n` v11a~, s s?sloams ; With
y a p ? pr uest t for
markets in Southeast Asia, Vietnamese interest in expanding its trade
with Japan will run counter to the traditional reluctance of French
government and business interests to admit any competitive Japanese goods
into Indochina. A quasi-offoial French view, bearing on the problem as
expressed in the Indochina economic bulletin, is that the US is trying to
present "under a less imperialist light than during the wart' the advan-
tages of the Japanese co-prosperity sphere.
A second source of friction is the French economic position itsel'
and Vietnamese efforts to secure a greater share in their own country's
economy. The solution proposed by the French High Commissariat is that
Fre74ph business houses gradually increase Vietnamese participation. The
U+S~.Legation comments, however, that nothing concrete has resulted from
tt?i~,proposal and expresses the belief that it will` prove most difficult
to induce long-entrenched, highly oolonial-ma.nded French business inter-
ests to make more than estures in the direction of Vietnamese partici-
pation.,
9' Vietname
se newspaper derides Cambodian elections. The prin-
oipal Vietnamese owned French-language newspaper in Saigon editorially
ridiculed the 9 September election of National Assembly delegates in
Cambodia. This treatment of elections in the two neighboring countries
by,the_Vietnamese press (no other prominent editorials have appeared) is
probably attributable in part to the patronizing air which Vietnamese
often take toward Cambodia and Laos. There is the additional possibility
that the Vietnamese Government -- which, with the French9 controls the
press -- is embarrassed by the prospect of growing pressure in favor of
elections within Vietnam, since elections of any sort would have the 4 - u
s accountability to the public.
Comments The unrepresentativ
h
e c
aracter of the Vietnam Government
has long een criticized by the Vietnamese "fence-sitters." An attempt
was inaugurated several months ago, with the ostensible blessing of the
government, to establish unofficial, broadly representative committees
in each of the three regions of Vietnam with a view to the eventual es-
tablishment of genuine representative assemblies. The present status of
these committees and the results they have achieved. are unknown.
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10. 2HN4. Chinese Communists x ect record cotton crop: Peiping radio
announced that the current harvest of cotton throughout China should
total 950,000 tons, the largest on record and more than double the 1949
yield. This, according to Peiping, is accounted for by greatly increased
acreage allotted to cotton and higher yields per acre. Next year's har-
vest should be even larger, Peiping claims, as a result of the high price
-- 18 percent hi her than last year paid to peasants by the government
for new cotton.
Comment: Raw cotton, one of Communist China's major import items
for the past two years, should be in ample supply for China's textile
mills which at highest levels of operation use only 600,000 tons of raw
cotton.
12. Legislative Yuan investigates "r-ft: The US Minister and Service
Attaches in Taipei report that the Legislative Yuan, which in the past
has attracted little attention because of its reputation for "rubber
stamping," now shows signs of life. At the 8 September meeting, alleged
administrative, fiscal and procedural irregularities of the Yuan were
discussed in detail and with candor. Members denounced the "dictatorial
approach" of President Liu Chien-shun and complained of his lavish enter-
taining and alleged misuse of funds. One observer reported that the
legislators were "apparently surprised at their own audacity after the
ice was once broken."
The Associated Press reported from Taipei on 18 September that a
fifteen-man committee consisting of members of the Legislative Yuan was
chosen to probe charges of misuse of funds by the Yuan, particularly in
the case of Liu Chien-chun. The committee will report its findings
L=en3 The Legislative Yuan is the highest legislative body in
Nationalist China. It has 773 elected members. It has not been known
as an effective department of the government because of the highly
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centralized nature of the Nationalist regime. Its members' self-
criticism indicates a new surge of life and an unprecedented disregard
of the political police.
13. Nat'-o"al 4+ oro
~~_Posal to establish a Mobilization Board retorted,
The US Minister and Service Attaches in Taipei state that several
sources have reported the adoption on 6 September by the Reform Committee
of the Kuomintang of a proposal to reduce the ministries under the
Executive Yuan to four. These four will be subordinate units of a
newly established Mobilization Board which will report directly to the
president, thereby circumventing the premier. At present, the Reform
Committee is attempting to influence the premier to bring this proposal
before the cabinet.
As the purpose of the proposal is not clear, the report states that
anti-Kuomintang sources explain it as a reversal of the earlier govern-
ment decision to cooperate with the US toward a planned economy. They
claim that implementation of the plan would be a victory for the Political
Department of the Ministry of National Defense in that it would mean fur-
ther centralization of power. However, other observers explain the pro-
ject as "a logical streamlining in connection with general retrenchment
and austerity."
A Taipei press review of 16-17 September reports that the Mobiliza-
tion Board will absorb the Ministry of Economic Affairs, the Resources
Commission, the Uen-cral Trust and the Production and Commodity Board.
It will be empowered to make overall decisions on production, trade and
foreign exchange. Chian Chin -k
uo the Generalissimo's son ma head
Lth new board.
Comment: The advocates of centralized control have been in constant
and, on occasion, bitter conflict with the proponents of a more democratic
decentralization. Thus far the balance has weighed overwhelmingly in
favor of the centralists and if Chiang Ching-kuo, chief of the Political
Department, is to head the Mobilization Board, it appears that they shall
continue in control.
14. LO-RE Ao ,eakd? of Sovi and Cauc glen
The US Far East Command estimates, on the astes o -96opertinent reports
received in the period from 1 January to 1 September 1951, that a total
of 25,000 Soviet or Caucasian personnel are in Korea.
Soviet personnel in Korea, numbering 15.9400, are listed as follows:
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25X1
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*woe
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presence in or imminent movementato Korea oadditional reports indicateuthet
4
Three antiaircraft divisions, unidentified -- 69000
One security or infantry regiment, in northeastern Korea -- 1
Military advisers -- 2,000 ,500
Engineers -- 1,500
Supply, counterespionage, local security -- 1,500 separate
from antiaircraft artillery
personnel antiaircraft listed above)t-- 1r
Signal and radar artillery (
1,p00 'S00
Civilian advisers 400
Caucasian elements, numbering 10,500, are believed to be assigned
as follows:
One artillery division, unidentified
-- Other capacities (ground and air) 5000000
Hospital and medical 500
the Caucasians are believed to be advance elements of a "Sold t P
Force," according to
the Far Ea
i
nn
members of "mops -Gnat would fall in
~? sian
a Soviet puppet army.";
omme s While this estimate of the number of Soviet troops in Korea
cannot be verified, their number undoubtedly has risen sharp 1
Information
Na Soviet or Caucasian combat unit has been Positively identified information concerning the existence of an or in Korea.
m Fion , tactical "Soviet
continues to be inconclusive. ganic
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16. FECOM sees indications of Communist offensive intentions incon-
clusive: The US Far East Command, in commenting on current Communist
pre-offensive indications in Korea, states that "it must be remembered
in numerous respects that his (the enemy's) cycle of preparation has
veered from normal sequence in the present instance, and particularly
has broken previous precedents in the matter of timing." While previously
the enemy's preparations were accomplished in "almost drill-like sequence
with little or no interval," the Communists in Korea now appear to be
"awaiting a propitious moment or some particular development." FECOM
concludes that the "freedom of action he enjoys with respect to choice
of time remains unchanged."
Two recent additional signs of Communist offensive preparations.
are the deployment in forward areas of several fresh Chinese Communist
armies, and a decrease in the number of vehicle sightings in the
enem 's rear areas indicatin the completion of supply build-up. F7
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SECTION 3 (1NESTERN)
1. GERMANY,. East and West Germans continue discussions
zonal trade: est German authorities, reporting to the Ifflies on the
progress of their current talks with East.German officials on resumption
of interzonal trade in return for cessation of current Soviet East German
restrictions in Berlin, are optimistic that various f'conditions" will be met
by the East Germans if the interzonal trade agreement is signed. They add
that the East Germans are not likely to give in beyond the point now reached.
The West Germans assert that both delegations are now prepared to sign the
trade pact, with the verbal statement to be made by the West Germans that the
trade agreement will be suspended if any impediments to trade are imposed.
So far, the East German authorities have proposed to establish a system
whereby a joint East-West German committee would examine the so-called "doubt-
ful" West Berlin exports which the USSR authorities are now holding up, in
order to guarantee that the USSR would approve those shipments. They are
also prepared to scale down the rates of the present prohibitive road tax
currently imposed by East Germans on West German traffic, and see that other
restrictions, such as the closing of the Rothensee Canal lock, the harassment
of the parcel post, and confiscations of goods, would cease when the inter-
zonal trade agreement is signed.
Before considering whether the West Germans should be permitted to sign
the interzonal trade pact, the Allies have insisted that the West German
delegation obtain assurances from the East Germans that, in the event of the
establishment of the proposed committee to review Berlin exports, the West
German unit would have the final determination as to the le alit of the
25X1 shipment.
Comment: Despite a willingness to make certain concessions, the East
Germans have left so many of the details unsettled that the Allies cannot
be sure of any appreciable improvement in the situation.
2. East German Communists revive unity campaign: At a special session
of the East German People's Chamber on 1 September, Premier Otto Grotewohl
revived, the spring 1951 campaign for "Germans at one table," requesting the
People's Chamber to send a new offer to the West German Parliament to hold
an all-German unity conference. Grotewohl recommended a two-point agenda:
(1)
organization of all-German free elections for a
national assembly charged with establishing a
"united, democratic, peace-loving Germany," and
(2) speeding up the conclusion of a peace treaty.
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1 loop,
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Grotewohl added that, in view of the gravity of the situation, East
Germany would be willing to abandon its previous insistence on parity
between East and West German delegations. In later remarks he stated that
the n,rrnb r of r
t
e resen
atives is "not of fundamental import ance. tt F-
Comment: Soviet and East German offers to negotiate German unification
and to lol all-German elections have been made many times before, but there
has never been evidence of willingness to hold elections on any other than
Communist terms. The major aim of these "unity" proposals is to frustrate
Allied efforts to obtain German participation in Western European defense
preparations.
BELGIUM. Belgium renounces US aid: The Belgian Foreign Minister has stated
h uuntry's desire to renounce US aid.
Comment: Previous reports have indicated Belgian dissatisfaction with
the cu-E ECA aid. Although the amount of US aid to Belgium has been
determined almost entirely by the amount of Belgian loans to other Western
European countries, the renouncement of direct US economic assistance may
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be designed to secure greater US aid for Belgian defense production as
well as to improve Belgium's position in bargaining for a pre-financing
of defense production.
ITALY. New Agriculture Minister is cool to land redistribution: Italyis
new Minister of Agriculture, Amintore Fanfani, is reported to be lukewarm
toward redistribution of land as a social measure, but strongly in favor
of. "land reform to produce increases in net agricultural products." If this
is so, the present program for land reform will continue to lag, and the
general bill will be forgotten.
Land expropriation plans published to date cover nearly 500,000 acres,
of which 275,000 acres have been acted upon by the cabinet. However onl
about 100 000 acres will be redistributed to peasants this year.
Comment: Experts believe that.a productivity program to increase
agricultural production without redistribution of land will not materially
raise the living standards of the depressed agricultural population.
Christian Democratic promises to effect a program of land development
and redistribution have been a principal factor in preventing the Communist
Party from taking over Italy. It had been hoped that Fanfani, newly appointed
to his post from the reformist "left" wing of the Christian Democratic Party,
would try to accelerate the whole program. A slackening of this program,
originally proposed by the Christian Democrats, can be expected to aid the
Communists, who have continued to gain strength in agricultural southern
Italy,
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GUATEMAI,AL Rumors of quetzal devaluation denied: Guatemalan Minister of
Economy Noriega Mora es has announced tha parity of the quetzal with
Comment: Despite official denials, it is possible that an eventual
change in e quetzal-dollar rate is planned, and that the rumors of de-
valuation have been sponsored by the government to test public reaction,
The devaluation of the quetzal would provide a solution to political and
economic problems now faced by the Guatemalan Government, With a cheaper
quetzal, the government could remain on record as supporting the wage demands
of United Fruit Company workers and at the same time encourage the company
to grant wage concessions. Devaluation would also aid the government, itself
a large employer, in dealing with similar wage demands,
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1.9 September 1951
CIA No. 49348-A
Copy No.
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.
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low
AW
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SECTION 2 (EASTERN
The ambassador is suggesting to London that the UK reply to the
Egyptian Prime Minister's latest communication by indicating that new
"interesting" proposals-will be forthcoming. The US Ambassador warns the
abrogation of the treaty will be difficult to prevent if some hope of new
ro ,eels is not offered E t
i
1, EGYPT, ti an government party leaders reportedly favor
abrogation Lion of immediate
1936 treaty, The British Ambassador in Cairo was informed
on 16 September that a majority of the government party leaders, who met
the preceding day, favored immediate abrogation of the 1936 Anglo-Egyptian
Treaty, but that the Minister of Interior had succeeded in postponing any
action for ten days.
gyp
n the immediate future,
Comment: While party leaders have been gradually pushing the
govern-
ment toward definite action in regard to the long-threatened abrogation of
the 1936 treaty, King Farouk, who has long opposed such action
will succeed in preventing any immediate steps? s probably
to
The "interesting" proposals presumably to participate in a joint Middle East Command. uThe presenttE ypt to Egypt
probably will not permit acceptance of membership in such anmod'
arrangement as a substitute for complete British evacuation of the Suez
Canal area and of the Sudan,
2. BURMAo Burmese Cabinet divided on issue of TIN appeal: From recent conver_
sations the UK Ambassador in Rangoon has ascertained that the Burmese cabi-
net is divided as to whether or not to refer to the UN the presence of Chinese
Nationalist troops in Burma,, The Foreign Minister is opposed to such a move,
while Prime Minister Nu has taken the position that Burma has no other recourse,
Nu revealed, however, that he had so ht Nehru's advice and would not take 25X1
action pending the receipt of it.
Co_ t: Information received from New Delhi indicates that the Indian
Government has advised the Burmese to delay an appeal to the UN.
Continued depredations by the disorganized Nationalist forces, however,,
may cause the Burmese cabinet to give its full support to the Prime Minister.
3. JAPAN. Termination of state of war with Ital still bein negotiated: Con-
versations between the Italian Mission in Tokyo and the Japanese Government
regarding a formula for termination of the state of war between Japan and
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Italy are still inconclusive, according to the US Political Adviser, The
main point of difference arises from Italian insistence on a commitment
from Japan to settle with Italy on the basis of the principles contained
in the San Francisco treaty, and strong Japanese reluctance to give such a
commitment, The Japanese are now considering a compromise which would
recognize both the spirit of the San Francisco t a the s eeial
cumstance existing between the two governments.
Comment; The Italian Government originally hoped that the exchange of
notes terminating the state of war could be announced simultaneously with
the signing of the San Francisco treaty, Japan's reluctance to extend the
same consideration to its former Axis partner as to the other Allies, and
Italy's insistence that its property losses after September 1943 at the hands
of the Japanese entitled it to the full benefits of the multi-lateral treaty,
have prevented agreement.
4, JAPAN. Tripartite fisheries convention suggested by US: The Department of
State has recommended that the Japanese Government promptly undertake nego-
tiations with the US and Canada to conclude a North Pacific Fisheries
Convention in line with Japan's obligation under the peace treaty, The
Department has recommended that the talks take place in Tokyo commencing
22 October,
Comment: Japan is anxious to conclude a non-restrictive fisheries
treaty with the US and Canada which would serve as a model for future nego-
tiations with other nations. Japan's primary objective in the coming
negotiations will be to maintain the principle of freedom of high-seas
fisheries,, and to regain access to crabbing grounds in the Bering Sea,
SECTION 3 (WESTERN)
5. FRANCE/UNITED KINGDOM, Nations tone down opposition to US-Spanish ties:
During the tripartite meetings on 14 September, British Foreign Secretary
Morrison urged the US to go no further than necessary in its relations with
Spain, and under no circumstances to raise the question of bringing Spain
into NATO. Morrison emphasized that there was strong feeling in the UK on
this issue.
French Foreign Minister Schuman said he believed that French opinion
would be relieved by the US assurance that no attempt was being made to
bring Spain into NATO. The main French fear, he said, would be a Spanish
Army equipped by the US. Such an army would be competing with France for
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supplies, and would basin-a Western defense
on the Pyrenees. 25X1
Comment: Last July the British and French openly opposed any bilateral
BS-Spanish defense arrangements. The change suggests that the two countries
may have decided that a less dogmatic attitude would enhance their chances of
influencing American policy toward Spain.
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