CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000900270001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 12, 2016
• Document Release Date: January 11, 2002
• Sequence Number: 1
• Publication Date: May 7, 1952
• Content Type: REPORT

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SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
7 May 1952
OCI No. 5175
Copy No. 2 E b
CURRENT INTELLIGENCE DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This digest of significant reports has been prepared primarily
for the internal use of the Central Intelligence Agency. It does
not represent a complete coverage of all current reports re-
ceived. Comments represent the immediate views of the Office
of Current Intelligence.
State, JCS, Army reviews completed
SECRET
SECURITY INFORMATION
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THIS MATERIAL CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAWS, TITLE 18, USC, SECS. 793 AND 794, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
1. Orbit receipts of goods from and through Austria
increased toward end o 1901: Shipments of goods by rail
Through Austria from Western to Orbit countries totalled
28,532 metric tons in December 1951. This was 43 percent
above the monthly average for the previous thirteen months
and the highest figure since January 1951.
Meanwhile, rail shipments of products from the Adminis-
tration of Soviet Enterprises in Austria (USIA) to the Soviet
Union and its Satellites reached a six-month high in December
1951, but declined substantially in January 1952. About
two thirds of the 53,793 carloads shipped from USIA to the
Orbit between June 1951 and January 1952 consisted of oil-
products. (S USFA Weekly Intelligence Summary 354, 16 Apr 52)
Comment: Austrian rail transit shipments are an un-
certain indicator of the volume of West-East trade and pro-
bably constitute only a small percentage of all shipments to
the Orbit. The monthly variations in tonnage are frequently
accounted for by irregular deliveries of a few heavy but
not particularly significant items. The number of loaded
railway cars departing from USIA is also subject to wide
monthly fluctuations, some of which must be attributed to
such factors as unavailability of transport, or inadequate
routing schedules.
SOVIET UNION
2. New Soviet loan to help finance construction projects:
Sovie Finance Minister Zverev in a 5 May home service broad-
cast announced plans for the seventh postwar state loan in
the amount of 30 billion rubles.
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Zverev explained that the aim of the new loan is to en-
list the people's savings for the further development of the
national economy. Projects mentioned included the IKuibyshev
and Stalingrad hydroelectric stations on the Volga, the
Kakhovka power station on the Dnieper, the Main Turkmen,
South Ukrainian, and North Crimean canals. (R FBIS Moscow,
6 May 52)
Comment: The plan for 1952 is to raise 42.6 billion
rubles ylooano The amount of this first 1952 loan is the
same as last year when the proceeds were also allocated to
the development of the national economy. The first five
loans were designed to pay for reconstruction of war devas-
tation and to help in the expansion of industry in the USSR.
According to the Soviet press there are now about 70 million
bondholders in the USSR, compared with 65 million in 1951.
3. US protests Hungarian abuse of diplomatic pouch to ex-
port ra to equipment: The State Department instructed the
American Legation in Budapest on 5 May to protest to the
Hungarian Government the abuse of the diplomatic pouch to
cover the transportation of radio, electric and electronic
parts from the United States. The type and character of
the equipment as well as the quantity were such as to pre-
clude their use for any normal purposes and suggested that
the articles had been purchased for re-export contrary to
US laws and regulations. The Legation was instructed to
avoid giving Hungary any grounds for arbitrary or retalia-
tory interference with US couriers and pouches. (S to
Budapest 407, 5 May 52)
Comment: Since Hungary is a large manufacturer of radio
and electric equipment, the taking of relatively small quan-
tities suggests that the articles were designed for proto-
types for Hungarian manufacturers.
SECRET
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FAR EAST
4; Peiping impresses British trade delegates with germ
warfare claims: British e egates to the .scow conomic
Conference were shown a germ warfare exhibit in Peiping during
their visit in April. Some of them apparently are convinced
that there is a substantial basis for China's charges against
the United States.
The exhibit included instruments of germ warfare, posters
showing American press statements on germ research, and re-
cordings of American prisoner-of-war statements. One of the
British visitors reportedly believes that Peiping's charges
are well founded, on the ground that it is impossible for
China to fabricate such evidence. A more cautious member of
the group thinks that the Chinese made a prime facie case
which requires "serious investigation." '(C Moscow-1768,
5 May 52)
Comment: Although the volume of Peiping's propaganda on
germ warfare has diminished somewhat, the Communists continue
to press their campaign to win foreign support for their
charges.
Some success in the Communists' BW propaganda campaign
is evidenced by a 12 April statement in the British leftist
weekly New Statesman and Nation, modifying,a former stand
that the Communist claims id not even merit further
examination.
5. Pro-Communist Chinese newsmen in Hong Kong sentenced: The
action of the nogg Kong court n finding the-Chinese publisher
and editor of the pro-Communist Ta Kung Pao guilty of
sedition, fining them and suspending the newspaper for
six months, is certain to be denounced at length by the
press in Communist China. The newspaper is not an official
Communist publication, however, and the prestige of the
Peiping regime is not directly involved.
A more important issue,-in the relations between the Hong
Kong government and the Chinese Communists, is the Hong Kong
government's recent notification to the offical Communist news
agency in the Colony that it must register by mid-May or cease
operations. The Communist decision will provide a good indi-
cation of Peiping's short-range intentions toward the Colony.
(Factual data from: U Hong Kong 2993, 5 May 52)
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25X1 C
7. Karens seen resisting surrender to Burmese
despite arms shortage: Tfie commander of the Karen forces in
25X1C the Irrawaddy Delta-is under the sur-
veillance of his colleagues because of, his efforts to negotiate
the surrender of Karen insurgents to the Burmese Government.
At the same time, the head of the Karen "Government" has also
informed a representative in Rangoon of the Delta Karens' des-
perate need for arms,
Meanwhile, a final settlement between insurgent Karens
and Communists is allegedly scheduled at the next meeting of
their leaders at an unspecified time and place.
25X1A
Comment: The Karen Delta commander's present activities
a cannot confirmed, although another report indicated thathe
had actually been arrested by his followers. The Karens' seri-
ous situation in the Delta and the possibility of a Karen-
Communist alliance have been reported several times.
8. High morale of Karens in east Burma reported: The Ameri-
can Embassy-in Rangoon has rece ve reports that-the morale of
the Karen insurgents in eastern Burma is good as a result of
SECRET
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their acquisition of arms and ammunition from Thailand in
exchange for ore. Unverified reports also indicate triangu-
lar traffic in arms between the Chinese Nationalists, Burmese
Communists and Karen insurgents. (S Rangoon 1065, 5 May 52)
Comment: There is considerable evidence of Karen involve-
ment IT-Tr--a-ding ore for arms with the Thai. There have also
been reports of Karen dealings with the Chinese Nationalists,
but it is not clear how the Burmese Communists, who have neither
arms nor ore to offer, fit into the triangle.
Philippine sentiment against recognition of Indochinese
states seen changing: In connection with the forthcoming visit
to the Philippines of a Vietnamese official, Philippine Secre-
tary of Foreign Affairs Elizalde inferred that sentiment in
his country was slowly changing in favor of recognition of
the Associated States. (C Manila 3836, 6 May 52)
Comment: The former Philippine Foreign Secretary, Carlos
Romulo, often found the divergence of American and Philippine
policy on Indochinese recognition useful in proving that the
Philippines was not subservient to the United States. The
issue has not aroused Philippine public opinion. Any change
in the government's position may be partly the result of
unusually large rice import: requirements which could be par-
tially satisfied by Indochina.
Indonesian Moslem labor officials visit Peiping: Three
officials of t fie Uni e Islamic for ers of Indonesia (SBII)
left Djakarta for Peiping on 3 May. They were invited by the
All-China Federation of Trade Unions to study the labor situa-
tion in China, (R FBIS Djakarta, 5 May 52)
Comment: The non-Communist SBII was founded in 1950 with
the active support of the Moslem League, Indonesia's largest
political party. Following the Communist arrests in August
and September 1951, SBII drew large numbers away for SOBSI, the
Communist-led and dominant labor organization in Indonesia.
Although it has by no means realized its founders' ambitions
that it displace SOBSI, it is one of several important anti-
SOBSI organizations.
SBII refused an invitation to attend the May Day celebra-
tions in Peiping. The reason it accepted the second invitation
has not been reported.
SECRET
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110 Australian defense program reason for Menzies' Washington
visit: Prime Minister Menzies as o a representative of
the S Embassy that the "real reason" he wants to visit
Washington is that Australia lacks the productive capacity and
the dollars to complete its three-year defense program. Call-
ing attention to isolationist sentiment in his country, Menzies
said that he desires the defense program to be far enough ad-
vanced so that any successor will be unable to jettison it.
(S Canberra 293, 5 May 52)
Comment: Shortages of many vital materials and of manpower
are cr tic I in Australia, and as a result, the present govern-
ment's three-year program, instituted in mid-1950, is lagging.
The American Embassy has previously observed that Australia's
defense policy is not bi-partisan and that a reduction of the
defense budget would be welcomed by many sectors of the
population.
SOUTH ASIA
12, Pakistan's Interior Minister deplores Pakistani complacency
towar ommunismo T He Pakistani Minister of 1 he Interior and
o ce in ormed American Ambassador Warren on 2 May that the
noticeably increasing Pakistani attitude of complacency toward
Communism might result in demands for more tolerance toward
Communist agitators. The Minister thinks that a more active
anti-Communist press and radio campaign is needed to combat
this attitude. (S Karachi 1308, 3 May 52)
Comment: In recent months there has been an apparent
relaxation of anti-Communist security measures in Pakistan.
Certain restrictions on travel to Communist countries have been
removed and a number of Communists have been released from
jail.
There is no indication that a feeling of complacency in-
spired these moves. Rather, it seems that the present govern-
ment desires to avoid criticisms of dictatorship and that many
Communists arrested in a large-scale roundup following dis-
covery of the anti-government military plot of 10 March 1951
have been released for lack of evidence on which to hold them.
As recently as late April 1952, the Pakistani Government caused
a pro-Communist trade union delegation to abandon its plans
for attending May Day ceremonies in Peiping by refusing pass-
ports to one or more of its members.
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NEAR EAST - AFRICA
13, France will propose reforms for Morocco patterned on
Tunisia model: The chief o t e rotectora es iv sion o the
French Foreign Office outlined to the American Embassy on 5
May the reforms proposed in a draft reply to the Sultan's
demand for a revision of the Moroccan Protectorate. The
country's administration would be reorganized along the lines
of the program imposed on the Tunisians in March. It would
include French representation in municipal government, a
bicameral legislature without power or responsibility, and
the creation of a Moroccan cabinet. (S Paris 6791, 5 May 52)
Comment: Such a reply is not likely to satisfy the
Sultan, w o on 17 March not only formally petitioned for a
revision of the 1912 Treaty of Fez, but also complained about
French-sponsored attempts to undermine his prestige.
If the outlined program were effected, French interests
would be even more firmly intrenched than now, since they
would then have an actual voice in the administration of the
country and no longer have to work through the Residency in
Rabat to achieve their ends,
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WESTERN EUROPE
14. COCOM reaffirms support of East-West trade controls:
American o cia s In Paris believe t Eat the Br , rman,
French and Italian delegates to COCOM have reaffirmed their
governments' intentions, as a result of the Moscow Economic
Conference, to adhere firmly to the present export control
system in order to make clear that they will not take advantage,
of the flexibility in the control program. In general, however,
the recent COCOM meeting to exchange official views on the
Conference was inconclusive, and another meeting was scheduled
for 21 May for an exchange of more precise information.
The German delegate, who set the pace of the discussions,
stated that his government felt that the Conference did not
indicate a change in the Soviet bloc's attitude toward East-
West trade. The Federal Republic considered the Moscow Con-
ference an "initial success" because of the general interest
created in trade with the Orbit. Both the German and the
British delegates emphasized the need for common action in the
field of counterpropaganda, since further Soviet propaganda
moves against Western trade controls are expected. (S Paris
6795, 5 May 52)
Trade between East Germany and Soviet Enterprises in
Austr a reported: ra e lists a ego y govern ng a program
o goo s-exc ange for 1951-1952 between the Administration of
Soviet Enterprises in Austria (USIA) and East Germany reportedly
call for shipments in the amount of two million dollars each
way. USIA will receive primarily buna, felt, photopaper, motor-
cycles, automobiles, turbine pumps, office machinery, and sewing
machines in return for hogs, cables, oxygen bottles, and steel
products. (S USFA Weekly Intelligence Summary 354, 16 Apr 52)
Comment:. Trade between USIA and East Germany has been.
frequently reported, but the volume and kind of goods exchanged--
with the exception of Austrian-produced oil -- has not been,
known. Recent Austrian complaints that USIA was importing
German-produced automobiles, as well as collateral evidence
regarding specific shipments, lend some authenticity to the
alleged lists.
Since Austria is an importer of meat products, the expor-
tation of hogs, if Austrian in origin, suggests the way in which
USIA operations distort Austrian trade patterns.
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16. French leadership in European agricultural pool seen passing
to the Dutc - e merit anm asst' in Paris reports that unless
there Is an unexpected reversal of the Pinay government's op-
position to agricultural integration, leadership in the proposed
"green pool" will pass to the Netherlands. Both the French
National Management Association and the increasingly conservative
French farm leadership are expected to discourage the development
of a supranational organization.
French and Dutch representatives plan to meet unofficially
"for strategy purposes" before the working group'-s meeting in
Paris on 14 May. (C Paris 68049 5 May 52)
Comment: The French National Management Association's op-
posit T-o ives from fear that the pool would destroy the as-
sociation's exploitation of cartels based on restricted markets.
The Netherlands can be expected to continue to press for
the creation of a supranational pool because it needs additional
markets for its surplus agricultural products.
Belgians and Dutch may modify positions to permit initialing
or verense Community treaty; After the strong representations
the French delegate has proposed that the treaty or military Y
protocol provide for a uniform period of military service of not
less than 18 months for all the Community members. Because
the Belgian Foreign Minister intends to insist that the period
be definitely fixed at the Foreign Ministers' meeting even if
the French proposal is accepted, the Belgian delegate is finding
it difficult to get the other delegates to agree on the proposed
wording.
y the Belgian delegate-to-the European Defense Community talks
The Dutch Foreign Office states that it has modified its
delegate's instructions on the external aid question to permit
him to reach an agreement "satisfactory" to the United States.
(S Paris 67949 5 May 52; 8 The Hague 1169, 6 May 52)
Comment- The Belgians have been adamant that the Com-
munity adopt a uniform twenty-four month period of military
service.
The Netherlands has also stated that it will refuse even
to initial the treaty unless the amount and division of the
German financial contribution for the first year are settled;
but since this problem is expected to be discussed at the Foreign
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Ministers' meeting, the Dutch may withhold their objections
until then.
18. Democratic parties seen likely victors
The American massy, commenting on the Rome election campaign,
believes that the democratic parties will probably keep control
of the city administration, despite the current wave of demon-
strations by the neo?fascist Italian Social Movement (MSI), the
Communist poster propaganda, the dissensions among local
Republicans and Democratic Socialists, and the dissatisfaction
of state employees with the small salary increases approved by
the government. The Embassy recalls that in the north Italian
local elections a year ago, the Christian Democrats "managed to
pull themselves together" before the end of the campaign. (S
Rome Joint Weeka 18, 2 May 52; R Rome 4784, 5May 52)
Comment: The democratic parties, linked together for the
Rome erns and aided by the electoral law. which gives two
thirds of the city council seats to the party obtaining a
plurality of the votes, may win the election by a narrow margin.
However, in many cities.in South Italy and Sicily, social
unrest and dissatisfaction with the Christian Democratic govern-
ment's economic policies are expected to result in a substantial
number of victories for both the Communists and the neo-fascists.
LATIN AMERICA
Costa Rica will detain freighter if USSR charter or other
ship I ng v o ation can a proved: The Costa Rican vernment
T,s trying to verify rumors that the St. Nicholas, now at Port
Arthur, Texas, is under Soviet charter. The government will
detain the ship if it finds proof that the rumors are true or
that Costa Rica's shipping regulations have been otherwise
violated. The government began its investigation after repre-
sentations by the US Embassy at San Jose. (S to San Jose 155,
2 May 52; S San Jose 204, 3 May 52)
Comment: Although Costa Rica passed a new and fairly
stringer it s ipping law in January, government officials have ap-
parently made little effort to keep track of the activities of
the small Costa Rican fleet Several of the ships, including
the Ste Nicholas, have been trading Far East and Soviet Orbit
ports during the past year and are open to suspicion of being
under Soviet charter,
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TOP SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
TOP SECRET SUPPLEMENT
7 May 1952
CIA No. 49633
Copy No. 4 6
TO THE CURRENT INTELLIGENCE DIGEST
(including S/S Cables)
Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This digest 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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THIS MATERIAL CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAWS, TITLE 18, USC, SECSO 793 AND 794, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON IS PROHIBITED BY LAW,
NEAR EAST - AFRICA
Egypt considers new British proposals unacceptable:
The chic?-of King Farou ?s palace cabinet has informed
Ambassador Caffery that the new proposals on the Anglo-
Egyptian dispute which the British Ambassador brought back
from London are unacceptable. The King's adviser stated
that Egyptian authorities were extremely disappointed with
the proposals but would not reject them immediately.
The palace official promised that the Egyptian
Government would show Caffery a copy of its reply to London
before presenting it'-to the British, (S S/S Cairo 1946,
5* May 52 )
Comment: The Ambassador previously reported that no
one in Cai o considered the new British proposals acceptable
and that Egyptians were increasingly convinced that the joint
discussions would prove futile.
WESTERN EUROPE
20 British High Commissioner Pessimistic on German contract
line: British Hig Commissioner it Patric ou is that the
Allied-German contractual agreement can be signed on 20 May
because of the revisions necessary to solve Chancellor
Adenauer's difficulties with his coalition, He mentions 1
June as a more likely date and will propose that the High
Commissioners conduct a "probing operation" to ascertain
what minimum concessions Adenauer must have.
High Commissioner McCloy warns that provisions in the
agreement previously considered settled may be reopened for
similar reasons. He states that he cannot estimate how long
TOP SECRET
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it will take to settle all outstanding matters, including
the revisions. (TS Bonn 2645, 5 May 52; TS London 5018,
5 May 52)
Comment; Negotiators in Paris and in Bonn are trying
to finish drafts of the European Defense Community treaty
and the contractual agreement so that the Foreign Ministers
can sign them on 20 May. The EDC treaty drafts are expected
to be initialled this week. Adenauer still insists that
he will be able to sign the contractual agreement on 20 May.
LATIN AMERICA
3. Chilean President requests US to announce its.willing-
ness to open copper negotiations; in a meeting wi the S
m assa or in Santiago, President Gonzalez Videla requested
that President Truman "say in a press conference, or other-
wise, that he is willing to open or resume (copper) negotia-
tions." The Chilean President would then announce hisdesire
to negotiate. In partial explanation of Chile's denunciation
of the copper agreement with the US, he pointed out the grave
economic, social, and political situation created by Chile's
inability to dispose of its copper at a price expected, and
the closing of the copper mines by strikes. He emphasized
that he had never thought of withholding from the United
States copper needed "for defense and other vital purposes."
The US Embassy comments that the President's manner was
conciliatory and friendly, and that his government is trying
to keep down criticism of the US Government. The Embassy
states that he is "unquestionably right" as to the critical
domestic situation, (C, S/S Santiago 574, 5 May 52)
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