DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000700080001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 12, 2016
• Document Release Date: March 22, 2002
• Sequence Number: 1
• Publication Date: January 11, 1952
• Content Type: SUMMARY

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SECURITY INFORMATION
11 January 1952
CIA No. 49500
Copy No.
145
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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SECURITY INFORMATION
State Dept. review com Ieted
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SECTION 1 (SOVIET)
1. USSR; Russians threaten to tighten interzonal trade controls in Austria:
Soviet officials in Austria recently implied to an Austrian official that
controls over interzonal trade would be tightened unless the government
committed itself to deliver specific quantities of aluminum, lead and
copper to Soviet enterprises in Austria in 1952. The Soviet officials
hinted that non-compliance would lead to'curtailment of allocations of
petroleum products from the Soviet zone and to restrictions on the move-
ment of such items as scrao metal, machines, electrical equipment and
other items. (S Vienna 2250,, 8 Jan 52)
Comment: Soviet authorities have frequently complained of inadequate
allocations of raw materials to their enterprises and have made threats in
an effort to enforce their demands. In 1947, they informed the Austrian
Government that a specified list of foods and industrial products would
be permitted to move between zones only if an official permit. were ob-
tained from Soviet authorities, and this pressure technique could be used
again to force concessions from the Austrians. Until now, however, trade
between the Soviet and Western zones has taken place with little obstruc-
tion.
2. Secretary-General of the Finnish Foreign Office analyzes Soviet foreign
policy: n a conversation with the American assa or at Helsinki last
ove er, the Secretary-General of the Finnish Foreign Office referred to
the fall barrage of Soviet notes, particularly, thoseaddressed~to Turkey
and Norway. Since the Russians could scarcely have expected the Norwegians
and Turks to quail before them, the Secretary-General suspected other mo-
tives behind these exchanges. He suggested that the Soviet Union, under
cover of this diplomatic activity, might be quietly preparing to retreat
somewhere without too much loss of face. His best guess was that the
Russians Were prepared to settle in~Korea on terms that were not much to
their liking. (S Helsinki Desp. 440, 27 Nov 51)
25X1 C
3. ALBANIA. Albanian Government attempts to secure gold and foreign currency:
During the summer of 1951, the Albanian Government forbade the use of gold
in all commercial transactions, , Any-
one wishing to obtain currency for gold coins must surrender them to a
bank. An unspecified number of persons were arrested in an effort to force
them,, under threat of torture, to surrender gold holdings and foreign cur-
rency.
Trusted individuals have allegedly been sent abroad on more than one
occasion to obtain foreign currency illegally through the sale of jewels.
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It was rumored that the reason for the drive to uncover convertible cur-
rency holdings was that the Albanian Government had to make a three million
dollar a ent to the Czechoslovakian Government by September 1951.
S
25X1A
Comment: There was a marked intensification of effort by Albania
during 1951 to collect dollars and gold. Albanian-Americans were solicited
to contribute dollars to their former compatriots. Special stores dealing
in luxury goods purchasable with coupons obtained from the exchange of
gold or hard currency were opened. It is reported that the stores were
stocked with. luxury items imported from Czechoslovakia.
4.
'Comment: It is possible that preparations for.MIG-15 production in
Czechoslovakia were completed by the end of 1951. 25X1
25X1 C I I who were engaged in the preparations for 5 production.,
plans called for the completion of 10 prototypes by March 1952.
5. -YUGOSLAVIA. Three high government officials may visit America: Foreign
Minister Kardelj has informed Ambassador Allen that three high Yugoslav
officials -- the Federal Minister of Industry and Construction, Vukmanovic-
Tempo, the Vice Premier of Serbia, Invan Vaselinov, and the Vice-Premier
of Bosnia-Hercegovina, Avdo Humo -- desire to visit American industries.
(C Belgrade 874, 9 Jan 52)
Comment: An unprecedented visit such as this would mark a significant
development in closer US-Yugoslav relations, especially in view of the ob-
vious propaganda target it would provide Tito's Cominform critics.
Irrespective of the overriding political connotations, which would in-
evitably accompany a visit of Communist, dignitaries to America, the event
should be viewed in the contexts of overall Yugoslav economic difficulties
and efforts to increase production, and the recently concluded economic
cooperation pact between Yugoslavia and the US.
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Vukmanovic-Tempo, a former Partisan general and confidant of Tito, is one
of the rising stars in the Yugoslav regime. During the reorganization of
the economic hierarchy last fall, he emerged as the chief of the powerful
Federal Council for Industry, which is potentially the primary center of
control over internal.: economic development.
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SECTION 2 (EASTERN)
to INDIA. Press reaction to In do-American technical aid agreements Except
in Calcutta, he non~=Communis In ian press s genera y'rear ed favor-
ably to signature of the Indo?Ame'rican technical aid agreement whereby
some fifty million dollars worth of technical assistance, is to be made
available to India. Papers stress the fact that this aid has no politi-
cal strings, and they look forward hopefully to a_new.._era of friendship
and cooperation between India and the'United States,' In Calcutta, however,
the press has expressed suspicion and distrust of the agreement, raising
the old specters of foreign economic infiltration and pressure upon
India to abandon its policy of neutrality between East and West. (U New
Delhi 23589 7 Jan; U New Delhi 23819 8 Jan; R Calcutta 3159 8 Jan; R FBIS'9
9 Jan 51)
Comments It is not yet clear why the Calcutta press, which applauded
passaged he US foodgrain loan bill in June 1951, should now criticize
additional aid from the United States.
2, PAKISTAN. No f oodgrain surplus forecast for 19528 The US Embassy in
arac i estimates that there will be no surplus oodgrain exports from
Pakistan in 1952 because of poor rainfall and decreased acreages of crops
sown in the fall of'195l (R Karachi 672, Weeka 1, 4 Jan 52)
Comments Any new shortage of foodgrains_in South and Southeast
Asia 1952 will aggravate an already unfavorable food situation
caused by adverse climatic and political factors. Ceylon, to which Pakis-
tan has agreed to.export 150,000 tons of rice9 will probably suffer most
from Pakistani crop failures. The most important aspect of the shortage,
however, is that Pakistan, which has usually been assumed to be a food
surplus area, may no longer confidently be counted on as such.
3. INDOCHINA. American Minister in Saigon disturbed by French peace hints:
Minister death in aigon9 reporting that Premier.Huu had banned pct ica-
tion of French Foreign Minister Schuman's reference on 6 January to a
possible armistice in Indochina, observed that local centers of neutral-
ism and appeasement had i?eacted quickly through press articles'empha-
sizing the desirability of peace in the Far East.
Heath feels that statements such as Schuman's will gravely hinder
the psychological mobilization effort in Vietnam. He also fears that
India, which immediately cabled the text of Schuman's statement to its
Consul General in Saigon9 may seize the opportunity-to propose mediation,
of the Indochina war or, to subtait the problem .to the .UN_. (S Saigon 131,4,
8 Jan 52)
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Comment. There is no reliable evidence that the Communists intend
to invade ormosa in the next few months, whether or not an accord on a
cease-fire in Korea is reached.
2 5X1 C Preparations to attack Formosa already taken by the
Communists nc u es (1) an increase in the-number of ground personnel
and Soviet technicians at these airfields; (2) the return from Korea
of several Third Field Army divisions to the Nanking area; and (3) the
transfer in mid-December of two Army Group commanders from Pyongyang to
Nanking. 25X1 A
Comment% Occasional French hints at a negotiated peace in Indochina,
put out over the past year or more, have usually emanated from the Min-
istry for Associated States rather than from the Fcureign Office.
In a speech on 9 January Premier Huu appealed to China to cease its
aict to the Viet Minh in order that an international conference could be
held to settle the cold war throughout the Far East. It appears that the
Premier believed the Schuman statement more-portentous.-than earlier ones
and was attempting to identify himself early with any forthcoming peace
movement.
CHINA. Preparations for invasion-of Formosa after cease-fire in Korea
aged; The Chinese 'Communis s p an_.to transfer RIG-150s and light
bombers to-airfields in the East China coastal area.if there is a 'truce
Airfields in Chekiang and Fukien provinces, opposite Formosa, which
were built or improved two years ago are believed inactive but are pre-
sumably maintained in operable condition.
5o KOREA. Soviet Far Eastern Commander in Chief reported in Koreas A
25X1 C learned- ough circus ous sources in western
Korean that on 26 September "four-high ranking Soviet officers and
three-Soviet civilians-" landed at Yonpo airfield near Hamhuug in north-
eastern Korea. One of-the Soviet officers was reported-to be Malinovski,
Soviet Commander in Chief of Far Eastern military foroeso This group
stopped at Hamhung before going on to Pyongyang, where they.were to meet
with Chinese and North Korean representatives at the cease-fire conference.
In connection with this visit, it?was rumored that the Soviets desired
a cease-fire for a short time only to allow a build mu of Communist
strength in Korea. 25X1 A
Comments It is not believed that such a hazardous route into Korea
wouldTe used by high-ranking Soviet officers. A sodded portion of
Yonpo airfield has been operational for some time, but it seems doubt-
ful if anything other than light planes could land there. Most indica-
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tions continue to point to a Communist desire for a cease-fire in Korea,
although the duration of such an armistice is still an unknown quantity.
KOREA. ROK Minister of Defense desires..to expand arrays Defense Minister
Leee in a 9 January press co ,erence, repor ed that a oonsiderable ex-
pansion"of the South Korean armed forces will be initiated by calling
up seogid reservists between the ages of nineteen and twenty-eight. The
establishment of the military college at Taegu is also part of this ex-
pansion program. (U FBIS Ticker, 9 Jan 52)
Comment: American observers believe that no'further-expansion of
ROK frees s fold be considered until the force in being, and its officer
corps, reaches a more advanced state of training.
JAPAN. Police claim Nagoya Times ,f.stol story. exaggerated: Japanese
vem er Nagoya Times story that ap-
po oe sourcesc aim that a late- November*
proximately 680 pistols had been confiscates -nt e c ty was exaggerated.
(See Daily Digest, 9 Jan 52) Police explained that the-quoted total re-
presenfe&-aT stols confiscated in Japan since the cessation
Nov hos-
tilities. (S Far East Command Daily Intelligence Summary,
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SECTION 3 (WESTERN)
1. GENERAL. Action on Czech overflight requests to be delayed: A Belgian
o office spokesman has suggested tha , be ore answering the month-old
Czech requests for approval of the proposed Prague-Paris air route by way
of Copenhagen, The Hague and Brussels, the interested governments coordinate
their replies through an international conference to discuss the matter in
detail or by an exchange of notes. Both the United States and Britain have
strongly suggested that the requests for landing rights be denied, because
approval would circumvent existing controls on Czech overflights in Western
Europe.
France, which has not yet received a Czech request, , has. stated its
intention not to grant the landing rights, and the Netherlands has hinted at
similar action. Belgium's position, however, is unclear beyond its willing-
ness to continue stalling. Denmark feels that it has no legal grounds on
which to refuse the Czech request.
So far, Czechoslovakia has, applied pressure only on Denmark; thus it
appears that the Czechs wish,to obtain Danish approval first to use as a
bargaining point in discussions with the other countries. (Factual data
from: C Brussels 908, 7 Jan 52; S The Hague 665, 3 Jan 52.; S Brussels 881,
28 Dec 51; C Copenhagen 483, 5 Jan 52)
2. EAST GE i IAi,Y. Government denies plans for currency reform: The East German
Goverrm-ient has officially denied rumors that large numbers of East Marks
are being printed in preparation for a currency reform. A Soviet Zone bank
official has admitted that orders have been, placed for the printing of new
East Mark bills, but that they are merely for the gradual replacement of
deteriorated old bills. The wide circulation and acceptance of the rumors
of a currency exchange have already induced sufficient unloading of East Mark
holdings to depress the value of the East Zone currency to where one
Deutschmark, which formerly bought only 3.92: East Marks, will now buy 4.45
East Marks. (R FBIS Berlin and Frankfurt, 6 to 10 Jan 52; P Berlin 892,
8 Jan 52)
Comment : Official denial of reform plans was probably designed to
preven the inflationary pressure and consequent depreciation of the East
Mark which would result from the unloading of East Mark holdings. A cur-
rency reform might be intended to appreciate the East Mark to the value of
the West Mark, thus enabling the Communists to claim that they had overcome
the economic barrier to integration. Such an artificial measure would not
facilitate integration of the zonal economies. and would have only propa-
ganda value; it might also further impair the stability of the Soviet Zone
currency.
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25X1 C
3. AUSTRIA. Ambassador-designate to US sees Austrian economic picture as grim:
Dr. Max T.nctnrant.~ta.l 1i neckv. Ambassador-designate o t e US, reportedly
asserted
'..
trade deficit. 'Attributing this deficit to the cost of-coal imports,
Loewenthal reputedly urged that Austria increase the export price of its
electric power and offer premiums. for exports to Germany to improve its
balance with that country. He stated, however, that Foreign Minister Gruber
had vetoed the latter proposal for "political reasons," and has instructed
him that his main task in Washington will be to obtain no less than 145
million dollars in economic aid in 1952.
Regarding trade with the Soviet Orbit, Loewenthal said there is little
prospect of increasing imports from the East beyond present levels. Charging
too lenient an'attitude on the part of Austrian officials influenced by
exporters, he urged quick retaliation when Satellite exports fall below
agreed quotas, 25X1A
Comment: Funds now allocated to Austria as economic aid are 25 million
dollars bel ow the figure held essential by the Austrian Foreign Office.
While Austria has in some cases attempted to schedule Satellite deliveries
to insure the fulfillment of trade agreement quotas, the government recently
requested special permission to deliver alloy steels to Czechoslovakia,
justifying the exception, in part, as necessary to preserve a foreign market.
BELGIUM. Consultations for new Belgian Cabinet under way:: Prime Minister
P o ien's one-party Social Christian (Catholic) C abine as resigned in order
to permit the formation of a government more able to cope with the "present
difficulties" facing Belgium. For the past month the government has been
attacked not only by the opposition parties, but also by influential members
within the Catholic Party who have been calling for ministers with strong
financial and economic policies.
Leading candidates for prime minister are Eyskens and Duvieusart. Both
the Foreign Minister and Defense Minister are expected to keep their present
posts. Political observers do not foresee a general election. (R Brussels
915, 8 Jan 52; R Hilversum, 9 Jan 52; NY Times, 10 Jan 52; French News
Agency, 10 Jan 52)
Comment: Possible changes in the Belgian Cabinet have been rumored
since labor's success in obtaining wage concessions from the government in
late October. Except for Van Zeeland, now Foreign Minister, there are few
leaders of stature within the Social Christian Party willing to risk their
ruputations to patch up the performance of the Pholien government. Because
neither the Socialists nor the Liberals are likely to join with the. Catholics
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in a coalition, and because.new elections will cause the Catholics to lose
their present parliamentary majority, every attempt will be made to form
another homogeneous government.
5. NETHERLANDS, Dutch support of the European Defense Community seems assured:
Dutch ore gn Minister S ik er has told a Embassy official a he feels
"reasonably sure" of early agreement on the European Defense Community and
intimated that his country would modify its previous position on the un-
resolved issues to facilitate over-all agreement. Although concerned that
the Community concept as envisaged by France does not tie into NATO, Stikker
seemed reassured when told that the US considers the EDC ?. necessary adjunct
to NATO and that the US would oppose any change.irn what it considered a'
desirable relationship between the two organizations. (S The Hague 686,
9Jan 52)
Comment: Continued US and British support of the EDC will help ensure
Dutch par icipation in the army plan. Modification in the formerly adamant
Dutch stand on certain aspects of the EDC would probably lead Belgium and
Luxembourg to soften their opposition.
6. ITALY. 'Conservative press comments on Churchill's US tri unfavorable to
Britain: The Truman-Churc hill, meetings in Washington,'= addition to i
eliciting factual reporting in the non-Communist press, have evoked in some
conservative papers editorials unfavorable to Britain. Comments by La Stampa,
Momento Sera, Giornale di Scilia, and others add up to the thesis that
Churchill is hostile to European federation and the European defense plan,
that he is trying to retrieve for his country the equality with the US in
world leadership that it enjoyed in Roosevelt's time, and that what he may
achieve in Washington will be an exclusively British success. Gazzetta
del Popolo observes that the meetings are particularly significant, coming
at a time when Britain is much weaker and the US much stronger than was the
case ten years ago. (U Rome 3062, 8 Jan 52; R FBIS, 7 and 9 Jan 52)
Comment: These comments reflect the anti-British sentiments of large
number-s-7-Italians., including high government officials, who ascribe the
loss of their former colonies and the Trieste impasse to British unfriend-
liness. These sentiments persist despite current efforts of Eden and
De Gasperi to establish more cordial diplomatic relations between the two
countries,
7. SWITZERLAND. Swiss to U prove military materiel orders for US: The Swiss
n ersecre'tary of State is approving export licenses for the wo million
dollars' worth of rockets and other munitions now being manufactured in
Switzerland for the US, and will approve export permits for additional
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Comment: There has been considerable British concern, fostered partly
by statement s of American Congressmen, over the sentence in the new act
specifying that aid is given "to further encourage the economic unification
and political federation of Europe." Any British government would have been
forced by public opinion to seek some'assurance that Britain's taking a
more active role in European integration measures was not a condition of
the aid grant.
Although the exact amount of the grant has not yet been determined,
it is expected to be between 300 and 400 million dollars.
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8.
Kingdom would not be assuming any commitments going beyond those already
;agreed to under ECA. The notes will not be published until after Churchill's
return to England and the exact amount of the aid is settled. The verbal
statements will not be made public in any form. (S NSA London 28,
8 Jan 52)
and verbal statements between Britain. anthe on 8 January emphasized
that in accepting economic aid under the Mutual Security Act, the United
orders of twelve million dollars now being negotiated. In exchange, he
requests that licenses be granted for 374,000 dollars worth of items on
order from the US and urgently needed by the Swiss Army.
The US Minister in Bern strongly urges approval of this request because
of the importance to the West of Swiss cooperation in military matters and
in export controls. (S Bern 856, 8 Jan 52)
Comment: The practically unconditional approval of large USmilitary
orders this time indicates a considerable departure from Swiss neutrality,
as a result of their extreme anxiety to obtain US military materiel to
fulfill their rearmament program. The Swiss are also concerned lest
military imports from the US be made conditional on a satisfactory solution
of the problem of liquidating German assets in Switzerland.
Swiss will furnish personnel to supervise Korea armistice: The
Swiss Minister in Washington has informed the Department o37 State . a the
Swiss Government would reply favorably to a US request to provide officers
for an inspection.group in Korea following a possible armistice there. The
US had inquired as to the availability of the Swiss for such a purpose.
(S State Dept Washington, F- I 25X1 A
Comment: Their willingness to participate in the supervision of an
armistice d onstrates once again that the Swiss desire to make. themselves
useful to both East and West and thereby preserve the utilitarian basis for
their political neutrality.
9. UNITED KINGDOM. New US aid arrangements formalized: An exchange of notes
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10; SPAIN. Basque Nationalists say Franco has scored great victory: Radio
Euzkadi, voice of the Basque Nationalist government-in-exile, calls the
recent press statements of US officials regarding economic aid to the
Franco regime a great victory for the Generalissimo; It, regards Franco's
continued intransigence, expressed in his New Year's Eve message, concerning
the policies of his regime as fully justified because the US, in granting
him aid, has altered its policy to accommodate him. The radio commentary
deplores the "misguided self-interest" of the US and warns that strengthening
Franco amounts, in the long run, to strengthening Communism.
The Basque Nationalists nevertheless urge a realistic appraisal of the
Spanish situation by the opposition and the recognition of the-fact that the
non-Communist opposition's weakness and fractionalism has probably contrib-
uted more to Franco's continuance in power than has the recent shift in
American policy. (R FBIS,9 Jan 52)
Comment: Recent statements ascribed to US officials have produced a
flood of excited comments in the Spanish press, which give the impression
that pending US-Spanish economic and military negotiations will result in
the economic rehabilitation of the country.
11. MOROCCO, Spanish Zone reforms may be nearing completion: The Sultan's
representative in the Spanish Protectorate of Morocco reportedly will-go
to Madrid on 13 January to discuss administrative reforms with Franco.
Meanwhile, the leader of the Spanish Moroccan nationalists has entered into
discussions with the Spanish Military Attache in Tangier. (S Tangier 230,
9 Jan 52)
Comment: Administrative changes, intended to avoid Arab League criticism
of Spanish rule in Morocco have been rumored since mid-summer. Although
there may be some reorganization of governmental services, there is little
likelihood that the regime will undergo any substantial liberalization.
12. GOLD COAST. Developing political crisis may endanger self-government:
Noting the strong dissension MIME the dominant Ccnvention People's Party
over its leaders, relatively moderate policy, the American Consul at
Accra estimates that the British Governor may be forced in effect to suspend
the constitution's self-government provisions through the use of his reserve
powers. The Governor left for London on 7 January for a ten-day consultation
with the Colonial Office.
In any event, serious trouble is indicated for the Convention People's
Party and the British administration at the next session of the Legislative
Assembly meeting on 29 January. Head of the party and Leader of Government
Business Kwame Nkrumah has been losing support since early December, because
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of his restrained approach to the issues of self-government, his collabo-
ration with the British, and disagreements over party finances. (C Accra
93) 9 Jan 52)
Comment: The Convention People's Party came to power on a radical
program about a year ago in the first election held under the new consti-
tution, which grants the Gold Coast a considerably greater degree of self-
government than the natives had previously obtained in any African colony.
This is the first indication that the dissension within the party over
unfulfilled campaign promises is great enough to threaten the government's
stability. Suspension of the constitution would arouse violent opposition
in the Gold Coast itself, and might well shake native confidence in the
British program of gradual self-government for other African . territories.
13. BOLIVIA. New attempt to oust military junta possible: General Torres, 25X1 C
the opposition. He would appear to be more moderate than the average
Nationalist, however, since he refused to permit his military unit to-engage
in the Movement's 19149 revolution,
appointment was in the nature-of bribery.to keep him from cooperating worth
~
known to have opposed the military junta's assuming power last May. His
Comment: Torres favors the Nationalist Revolutionary Movement and is
General Seleme has also been maneuvering to oust the junta and may
believe that his best chances are with Torres. A growing rift in the army
and widespread dissatisfaction with the economic situation have contributed
to the junta's instability. -
25X1 CO soon attempt to remove the military junta because of its "'do-nothing"
policy and its refusal to hold elections. Torres and General Seleme,
Minister of Government, are on friendly terms.. (C La Paz 261, 9 Jan 52)
14.
CHILE. Diplomatic military conversations with US agreed to by government:
An aide memoire accepting the US proposal to initiate diploma icmiii ary
negotiations for a bilateral military assistance agreement has been
authorized by Chilean President Gonzalez Videla and initialled by the
Foreign Minister. Fears of internal political repercussions. in this
electoral year"had caused the matter to be stalemated in the Presid.encia,
although strong approval had been expressed first by the combined general
staff and then by the cautious Minister of Defense,.
The',Foreign Minister and the Undersecretary are very concerned about
publicity which must be given when US military representatives arrive,
The Foreign Minister strongly stressed fears of political capital that
would be miade,by internal and foreign opponents of the administration when
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the negotiations become known, The US Embassy comments that the President
is an astute politician and, after deliberate consideration, he may have
grounds to think he can extort from the US a quid pro quo on the copper or
some other problem.
The Embassy also states that the Straits of Magellan shipping control
office proposal of the US lies dormant in the Presidencia, and has not been
brought to the attention of the Minister of Defense despite the lively
interest of the Chilean Navy. The President fears that presidential
aspirant Ibanez del Campo might make political capital "thereof abetted by
the Argentines.". (S Santiago 34, 8 Jan 52)
15. GUATEMALA. Government is willing to accept conditions of US technical
assistance: The Guatemalan Foreign Minister has stated ha his government
sees no objection to Sections 511(b) and 515 of the Mutual Security Act and
desires to continue existing programs of technical cooperation with the US.
The US Ambassador considers this to constitute agreement to'the'provisions,
pending their incorporation into revised project agreements. (R Guatemala
City 208, 8 Jan 52)
Comment: The two mentioned provisions have been applied to technical
cooperation agreements. Section 511(b) denies technical assistance unless
.the recipient country "has agreed to join in .promoting international un
. standing and good will,- and in maintaining world peace, and to take suet"`
action as shall be mutually agreed upon to eliminate causes of international
tension."
This action by Guatemala will permit the programs of technical co-
operation with the US to continue.
16. MEXICO. Tungsten concentrates being shipped to Orbit countries:; Of a
monthly production of 30 tons of Tungsten concentrate from Sonora, Mexico,
only five tons are entering the US while a substantial portiofi of the
remainder is believed being shipped to the Soviet Orbit. In contrast to
the 62 dollars per 20 pounds offered by US buyers, others are offering
from 72 to 80 dollars. (C Mexico City 883, 7 Jan 52)
Comment: Mexican production of tungsten concentrate, although very
small, has increased from an average of three metric tons per month in
1950 to the present rate. A number of small mining properties have been
developed recently and others may be brought into production. As is the
case with.copper, the tungsten concentrates are probably being shipped to
Orbit countries through cover firms in western Europe.
11 Jan 52
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TOP SECRET
SECURITY INFORMATION
11 January 1952
CIA No. 49501-A
Copy No. ~4
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. 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
SECURITY INFORMATION
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SECTION 1 (SOVIET)
1. YUGOSLAVIA. Yugoslav Foreign Minister suggests "peaceful" solution of
Mura River dispute: Yugoslav Foreign Minister Kardelj has informed
American Ambassador Allen that in the event Hungary'rejects the Yugoslav
request for a joint commission to examine the Mura River island dispute,
Yugoslavia would give full international publicity to its position, but
had not decided "to bring the matter before any international forum."
He added that "while the controversy involved a serious territorial
principle, the island itself was of no great consequence."
In explaining the origin of the island, Foreign Minister Kardelj
stated that the Hungarians had created the island in the thirties by
constructing a breakwater into the-river on the Hungarian side which
deflected the main current. Consequently., Kardelj hinted that the
Yugoslavs would cause the island to disappear next spring by building a
breakwater farther up the river on the Yugoslav side. (S S/S Belgrade
869, 8 Jan 52)
Comment: During the past two weeks, both governments have exchanged
a series of protest notes. Hungary has claimed jurisdiction on the basis
of the Treaty of Trianon, and Yugoslavia has objected to the Hungarian
military occupation of "Yugoslav territory" and has called for an immediate
evacuation.
SECTION 2 (EASTERN)
2. EGYPT. Court adviser suggests West present new proposals directly to
King: King Farouk's chief court adviser believes that any new Western
proposals on the Suez and Sudan issues should not be presented to the present
Wafd government. Accordingly., the King's adviser suggests that any new offers
be submitted to the King, who may then determine what action to take.
The adviser believes that the present government is not sincerely
interested in negotiations and must be dismissed before any solution can be
achieved. He also considers it necessary that literate public opinion
support such action, and thinks that the opportune moment for a change in
government has not yet arrived. (S S/S Cairo 1004, 7 Jan 52)
Comments. Reports from Cairo generally agree that the King is biding his
time, convinced that for the time being inflamed public opinion is too strong
to counter. A change of cabinets at this time might result in a more serious
internal situation without any possibility that a negotiated settlement with
Britain could be reached.
TOP SECRET
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SECTION 3 (WESTERN)
3. AUSTRIA. Population puzzled by absence of US retaliation against Hungary:
The Embassy in Vienna reports that there are a number of indications'
that Austrians are in general puzzled by US failure to retaliate more
energetically against Hungary for the detention and trial of American
airmen. Austrians allegedly imply that it is difficult for exposed
countries to stand firmly against the Soviet Orbit when the US itself is
not able to do so. (S S/S Vienna 2235, 8 Jan 52)
2 11 Jan 52
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