CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001000120001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 12, 2016
• Document Release Date: February 7, 2002
• Sequence Number: 1
• Publication Date: May 28, 1952
• Content Type: REPORT

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SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
28 May 1952
OCI No. 5190
Copy No, 2 6 7
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.
"Army, USAI and State Dept reviews .10 I -s k ?`
completed*a~ ,^. mr .~. s ,~F~atr
SECRET J%J i~ut -a~~ Y x, , ..
SECURITY INFORMATION BOX-
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SECRET
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, Embassy Moscow expects Soviet harassment in Berlin to
stop short of provocationz The US Embassy in Moscow estimates
t at Soviet harassing tactics may be expected to stop at a
point where the USSR believes that going further could provoke
actual hostilities involving Soviet and Western forces,
Embassy officials point out, however, that the Soviet
Union doubtless considers that much could be done to render
the Western situation in Berlin unsatisfactory by a succession
of creeping; restrictions, none of which might be expected to
appear in itself important enough for strong Western counter-
measures,
The Embassy concludes that the USSR is probably preparing
to exploit these possibilities "with great energy and impudence,"
(S Moscow 1871, 24 May 52)
2, Czech Government forced to cut electric supply to Prague
consumers: T e Ministry of Fuel and Power issued a statement
on 27 -May that the Prague electric power grid was compelled re-
peatedly to interrupt power supplies because certain enterprises
were using more electricity than the plan called for or were
changing the working hours laid down by agreement with the
power suppliers. Small consumer- were also criticized for
taxing the power supply during peak hours. Consumers were
warned that power would continue to be cut off without notices
(R FBIS Prague, 23 May 52)
Comment: This is the first indication that the chronic
winter s ortage of electric power will continue at least
through the spring. The fact that gas main pressure was also
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reduced in January points up the possibility that the power
shortage is due to a lack of coal used in the major power sta-
tions supplying Prague,
Interruption of the power supply at the transformer will
have an adverse effect on output of such strategic items as
jet aircraft engines, heavy machinery and transportation equip-
ment, and electronic equipment, the production of which is
concentrated in and around Prague.
3. Hungary attempts to repair frost damage to crops: The
Hungarian press on May admitte for t e first time that
frost had damaged spring crops and simultaneously published a
new decree on resowing and replanting. The US Legation at
Budapest noted that serious damage had been done to all crops
except small grain. (it Budapest 872, 26 May 52)
Comment: A time limit for the harvesting of first crops
was set by he cabinet decree of 18 May that required the
earliest possible sowing of second crops for fodder. This
reportedly is the first measure of the Hungarian Communist re-
gime specifically aimed at increasing second crops.
Hungary experienced two weeks of unseasonably cold weather
with snow flurries and night frosts,
4. Further curtailment of private trade in Rumania: The
American Leation in Bucharest reports that an article in the
Rumanian press has revealed that private. traders in grain,
flour, cattle, meat, horses, hides, cotton, fodder and oil
seeds, and petroleum have recently been "eliminated," (R
Bucharest 461, 24 May 52)
Comment: The liquidation of all capitalist elements in
industry and private commerce is one of the major aims of the
current iumanian Five Year Plano Since 1947, 95 percent of
the industry, 85 percent of the transport, and more than 12,6
percent of the cultivated land of Rumania have been drawn into
the "socialist sector." Elimination of the private retail
traders mentioned above will result in a further expansion of
the "socialist sector" in the field of trade, only 24 percent
of which remained in private hands by the end of 1951,
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5. Yugoslav regime continues to emphasize administrative
decentralization: The Tito regime's an - ureaucra c r ve
continues with e major emphasis on decentralization of person-
nel and the need for political education of the party, workers,
,....teachers, and youth. Difficulties in applying the principles
of decentralization are illustrated by the recent withdrawal
of the right to state employment in those instances where tech-
nicians and political agitators refuse transfers to the interior.
(S Belgrade Weeka 21, 23 May 52)
Comment: This application of "administrative methods"
reflects e significance attached by Yugoslav planners to the
problem of persuading university students to fill "unpleasant
posts" in the provinces, and inducing party members, particular-
ly those demonstrating managerial incompetence, to vacate ad-
ministrative sinecures for political work amidst the local
organs of government.
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6. Far East Command asserts Communists possess overwhelming
air super or yo a Far East Command on 27 a estim ee
that the enemy has a total of 1,115 aircraft massed in Manchuria
and that this overwhelming superiority gives him a major offen-
sive capability. The home bases of TJN F-86?s, as well as the
'headquarters of both our ground and air forces in Korea, are
well within the combat radius of the 350 jet and 35 piston
fighters based at Antung, Tatungkou, Takushan and Sinuijuo
Only a few miles farther inland on the Anshan-Mukden airfields,
30 light bombers,,240 jet and 85 piston fighters are in posi-
tion to provide support as well as additional shock power for
a striking force.
Although there are no indications of an impending air
offensive, FECOM notes that the Communists have sufficient
aircraft, personnel, air facilities and logistic support to
launch an offensive without warning in which UN planes, crowded
on Kimpo and Suwon airfields, would quite possibly sustain more
than 50 percent destruction from the initial attack. Such
losses would necessitate forfeiture of offensive aerial superi-
ority in favor of defense tactics. (S CINCFE Telecon 5848,
27 May 52)
70 Rhee plans to remove South Korean Chief of Staff: During
Van Fleet and American Charge Lightner, the.South Korean chief
executive indicated that ROK Army Chief of Staff Lee is being
removed for implication in the "plot" against Rheea
In reply to Lightner's comments that the world would
view present developments in Pusan as drastic police measures
designed to prevent the legislature from proceeding, Rhee
stated that "gangsters" had obtained control of the Assembly.
The President claimed, however,'that within two months a
duly elected National Assembly could be operative since the
principal traitors in the Assembly would be put out of the way
and their places taken by true representatives of the people.
The Embassy comments that while Rhee no doubt has a
large popular following, most of the potential leadership of
South Korea, such as the intellectuals, businessmen, an ix-
creasing number of government officials and army officers
would welcome a change. Few are willing to take a positive
stand under present circumstances. Rhee is determined to get_
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rid of his enemies at all costs. The Embassy believes that
further informal representations will be ineffective and
stronger action seems required. (S Pusan 1170, 27 May 52)
8, Communist China importing large quantity of Pakistan
cotton. Since ep em er ommun st na has pure need
0 400.-pound bales of Pakistan cotton. All except
83,000 bales have been shipped. (C Army Karachi 6, 16 May 52)
Comment:. This quantity of cotton probably cost China
over 70 m lion dollars. Heavy Chinese buying of Pakistan
cotton has not been expected, as the 1951 domestic cotton crop
was believed ample for China's needs. The Communists may be
building up their raw cotton stockpile which was abnormally
low last summer.
g. Germ warfare propaganda reported making some progress i
Burma: Accusations That the n e ates is resort ng to
germ warfare in Korea continued to be a major Communist propa-
ganda theme in Burma, according to the US Embassy in Rangoon.
The Embassy comments that while there is still a general lack
of credence regarding these attacks, the "big lie technique"
may be expected to convince many and that some progress in
Burma was already discernible. (C Rangoon 1120, 22 May 52)
Comment: Indicative of the Burmese reaction to fantastic
stories was the recent congregation of thousands of Rangoon
citizens around one of the city's lakes in response to a
rapidly spread rumor that an underwater devil had captured
and devoured a British seaman, Part of the crowd waited all
day for an investigation by "experts."
loo Opposition attacks Burmese Government on rice policy: The
polit ca oppos t on o t e aarmese oves?nt~eait e wh c s mostly
pro-Communist, is attacking the large profits obtained from rice
bought from the farmer for less than 50 dollars a ton and sold
for at least 168 dollars a ton. The US Embassy comments that
the opposition has a genuine issue with which to approach 75
percent of Burma's population and that the only surprise is
that it was not exploited sooner. (C Rangoon 1125, 23 May 52)
Comment: The controlled price paid to farmers has not
change s nce Burma became independent in January 1948, while
the price for exports has steadily increased.
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Despite the increase in price and the volume of exported
rice, there is no public accounting of most of the proceeds
by the Burmese Government or its handling agency, the State
Agriculture Marketing Board.
d1. Burmese Socialists worried by Communist peace feelers:
The Burmese rem er state In 25X1C
mid-April that the Executive Committee of the government
party had held three meetings to consider the problem of Com-
munism, The Premier said that the Commu-
nist-inspired "peace" campaign was being well-received by 25X1C
most of the people and by segments of the army, On the other
hand, the Burmese Socialists who dominate the government are
opposed to making peace with the Communists because they feel
their position is insecure and they anticipate further trouble
25X1A from the Communists if they were permitted to ?perate above ground.
25X1
25X6
A
13. Pakistan faces growing jute and cotton problem, Estimated
carry-overs o jute ah cotton past t o en o t e current crop
year on 15 July will be the largest since Pakistan became
independent in 1947. Foreign demand for these commodities is
now almost non-existent, except from India
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SECRET
The Pakistan Government is concerned over the situation,
as shown by the recall from leave of the Governor of the
State Bank, and it is actively studying the problem. No
solution has yet been reached. (C Karachi Jt, Weeka 21, 23
May 52)
Comment: Pakistani commodity markets have suffered a
decline since January. Government income is being substantially
lowered by reductions in export duties which were necessitated
by the slump in business. In the case of jute, the government
may face a long-term loss of income. Indian production of
raw jute has been increasing rapidly, and Indian mills are less
dependent than heretofore upon Pakistani raw fibre. Pakistani
mills do not yet produce considerable amounts of either jute
or cotton goods. The continued hesitation of foreign buyers
to purchase Pakistani raw materials at current prices will have
a decidedly adverse effect on that country's budgetary outlook.
14. General Motors assembly plant in India may be forced to
close By e In an Government -Es reports y p anning
import control measures which may result in the closing of the
General Motors assembly plant in Bombay by 1953. The govern-
ment apparently intends to favor so-called Indian manufacturers
who, at presento seem to be completely incapable of fulfilling
India's automobile and truck requirements.
The American Consul General in Bombay suggests it might
be pointed out to the Indian Government that the forced closure
of the American-owned General Motors plant would have a most
unfortunate influence on the flow of American capital to India,
(C Bombay 360, 26 May 52)
Comment: Fear of eventual nationalization and of the
above type of government favoritism toward Indian firms has
delayed the entry of foreign capital into India. Without such
foreign capital, industrial expansion in India will necessarily
be slow, and India will continue to depend heavily on United
States economic aid.
NEAR EAST - AFRICA
25X1X
15. Iranian Prime.Minister allegedly has reserve plan to
settle oil dispute I
25X1X the Prime Minister is prepared to reach an agreement with the
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25X1X
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SECRET
25X1C Anglo-Iranian Oil Company on the basis of the International
Bank propos4ls if British technicians are excluded ifrom
tthe
25X1 C industry.
serious in pressing Iran's claim
i
t
25X1A
er .
s
that the Prime Min
to Bahrein Island and that he has a new plan to present to
AIOC should it fail to agree to this proposal.
25X1A
Comment: The problem of British technicians has proved
one of e chief stumbling blocks in settling the oil issue.
Iran genuinely fears that the employment of the British by the
International Bank would mean a renewal of British influence
in internal affairs, and it has refused to accept the Inter-
national Bank's stipulation that it should be free to hire
personnel from any source necessary to ensure efficient opera-
tion of the industry.
Any agreement based on Iran's
claim to Bahrein, which is extremely slim, would be unlikely
to succeed.
16. Royalist group formed in Iran: A Meshed newspaper has
announce a ormation o a royalist youth group, the Fedayan-
i-Shah. The paper stated, however, that the group?s consti-
tution had not yet been formulated and that its details would
be announced later. The American Consulate comments that the
announcement appears to be a trial balloon. (R Meshed 44,
20 May 52)
Comment: The success or failure of this group will
undou to y depend upon the support accorded it by the Shah.
Although the Shah undoubtedly believes that Mossadeq's
policies are leading Iran toward disaster, there is no indi-
cation that he is yet prepared to take a determined stand
against the National Front, even to the extent of openly sup-
porting a group such as the Fedayan-i-Shah.
17. South Africa's internal security may be threatened: South
Africa s internal secur t T n 0w reatene- - is a r~ esuIt of
the government's drive against hostile individuals and groups
under anti-Communist legislation, in the opinion of the US
Military Attache in Pretoria.
Rioting mixed-breed and white garment workers protesting
the arrest of leftist union secretary E. S. Sachs on 24 May
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were quelled by "vicious" police measures which sent 66
persons to the hospital. Sachs was re-arrested on 26 May
when he again defied the government and addressed the garment
workers who were staginga one-day protest strike. There was
no violence this time. (C USARMA Pretoria 47, 25 May; R
Pretoria 209, 26 May 52)
Comment: A strong combination of whites and non-whites
against le government would seriously threaten internal
security, but there is no evidence that this' is developing
despite the vigorous reaction to recent government steps.
The garment workers have broad support in left-wing
unions and in non-white nationalist organizations, and general
sympathy from moderate opposition forces. These groups,
however, are not known to have offered to join in any con-
certed action against the government,
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WESTERN EUROPE
18. East Germans retaliate against signing of contractual agree-
ment- a react onns o e East German Government to _t Ye signing
of the Allied-West German contractual agreement are of the kind
and magnitude anticipated, and must at the moment be regarded
as only potentially explosive. The months-long propaganda build-
up against the approval of the contractual agreement portended
some vigorous reaction by the East German Government; it has,
however, made it clear that the new border decrees are not ir-
revocable.
This suggests that the primary objective of the East German
and Soviet Governments is still to block or delay the con-
tractual agreement, the European Defense Community, and any form
of European unity.
While semi-belligerent moves on the part of the East Germans
are, therefore, likely to continue and perhaps increase, they are
also likely to avoid extreme measures which would mobilize West
German sympathy for Western policies. Moreover, the East German
Government, with the assistance of possible Soviet diplomatic
moves, may be expected to continue efforts to consolidate West
German opinion against ratification of the contractual agreement
"through demands for spontaneous demonstrations, signature
25X1A m ai nns or " ?ular? decision. v9
25X6
25X1A
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25X6
21. French Socialists and Republicans favor internationnal-
izatin war in lr_doch .na o Reports from e renc Popular
e i.can and ocia st Party Congresses now in session,
indicate increasing popular dissatisfaction with the hopeless-
ness of the French position in Indochina
A motion of the centrist Popular Republicans, requesting
the government to take the initiative in proposing that the
Panmunjom conference be extended to consider all Pacific
problems a would satisfy the long-standing French desire to
share the Indochina burden. The new Minister Resident to
Indochina, who is a. member of this party, also stressed that
the burden is an international one 9 but reaffirmed his insist-
ence that France cannot abandon its mission.
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A Socialist spokesman has suggested settlement through both
international and direct negotiations, adding that talks with
China and India cannot be considered impossible until they have
been attempted. This is reminiscent of the Socialists' earlier
insistence that negotiations should be attempted with the Viet
Minh.
Although the many recent rumors that the French were
secretly seeking an armistice with the Communists have not been
substantiated, the French public?s growing awareness of the risks
involved in the Indochina policy can be expected to lead to
increased pressure on the government for an end to the present
stalemate.. (Factual data from, U Paris 7334, 26 May 52)
25X6
23. Neo-Fascist gains likely to be repeated in Italian parlia-
mentary a ec ons, The greatly ancreased strength o the neo-
asc s s., which was obtained at the expense of the Christian
Democrats, and the undiminished strength of the Communists in
the southern Italian municipal elections held on 25 May suggest
that the trend toward political extremism may continue in the
national parliamentary elections, which will take place not
later than 1953.
On the argument that the national government no longer
represents the viewpoint of the majority of voters, the neom
Fascists and the Communists may try to get the parliamentary
elections advanced to this autumn, In anticipation of these
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elections, Premier de Gasperi will almost surely try to broaden
his government by bringing into it members of the Liberal and
Social Democratic Parties, and may give representation to his
own Christian Democratic Party's right wing. He is also likely
to try to revise the national election law to provide for either
bloc voting or for single-member districts, a step which would
re-enforce the center's margin.
The decisive majority obtained by the pro-Italian parties
in the city of Trieste will strengthen the Italian Government's
determination to insist upon the return of the entire Free
Territory to Italy. (Factual data from S Rome 5067, 20 May 52;
R FBIS Rome, 26 May 52; PA Rome, 27 May 52; U NY Times, 27 May 52)
LATIN AMERICA
24.
Cuba and Peru to reestablish diplomatic relations: A
protoco eats s yang d p emat c re at ions between Peru and Cuba
will be signed within a few days at Rio de Janeiro, according
to a news item published in that city. Brazil will serve as
intermediary between the two countries. (R FBIS Paris, AFP,
23 May 52)
Comment: The Cuban Government currently has friendly
relations with all countries of Latin America except Peru.
This country broke relations with Cuba on 29 August 1949 as
the result of a controversy. over the disappearance of two
Peruvians who had sought asylum at the Cuban Embassy in Lima.
The accession to power of the Batista government, a
sympathetic regime from the Peru"ian viewpoint, is contributing
considerably toward the restoration of relations.
25. Pre-election coup possible in Ecuador: A majority of
Guayaquil-area citizens w o wcul ave voted for Salazar Gomez
in the 1 June presidential elections now favor a pre-election
25X1C Salazar Gomez has withdrawn from
the race and the New Democratic National Alliance candidate
appears to have little popular support. Defense Minister Diaz
Granados is also increasingly in favor ofa military junta or
a coup in favor of Salazar Gomez
25X1 C
25X1 C
25X1 C
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25X1 C
the pro-Salazar group
probably does not have sufficient support to launch a successful
revolt at this time, but that if the election results show that
the Conservatives are winning, an attempt is likely.
25X1A 25X1A
Comment: The Defense Minister and certain senior arm
officershave been considering a coup for some time, but, II 25X1C
25X1C I have refrained because they feel
that they lack support. Current government protests against
clerical interference in favor of the Conservative candidate,
however, may furnish an excuse for pro-Salazar military elements.
.Hondurans criticize United States for not recognizing
Bolivia: a Un to States has beencriticize by of
administration and opposition newspapers in Honduras for not
recognizing the new Bolivian Government. The prevailing view
is that recognition is tied to tin "to the eternal discredit
of the United States." (C Tegucigalpa Weeka 21, 23 May 52)
Comment: Of the Latin American countries, Honduras has
consistently been one of the most friendly to the United States.
The current criticism seems to. reflect an underlying feeling
that United States policy in Latin America is unduly influenced
by economic considerations.
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TOP SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
TOP SECRET SUPPLEMENT
28 May 1952
CIA No. 49675
Copy No. 46
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 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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la Egyptian King seriously considering replacing
present
THIS MATERIAL-CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAWS, TITLE 18, USC, SECSa793 AND 7949 THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON IS PROHIBITED BY LAW,
Prime Minister: ing arou
considering
replacing Prime
25X1 C
Afifi Pasha , is
25X1A
25X1A
x ana n is advisers are. seriously
Minister Hilali Pasha, 25X1C
Chief of the Palace Cabinet,
reportedly Farouk?s first choice as a successor,
and Minister of the Interior Maraghi Pasha is the second,.
I I
if the King rejects a reform program proposed by Maraghi, the
latter may initiate a revolution.
There is no strong evidence that Maraghi alone could
cause a change in the government without the King?s support
Comment.- There has been an increasing number of reports
in the past weeks that Prime Minister Hilali might resign or
be replaced, Former Prime Minister Sirry Pasha has been men-
tioned, along with Maraghi and Afifi, as a possible candidate
for the premiership if lu all should leave the government,.
2. France conditions further alas base grants on full US
support in or rice,. coor ing to igh Foreign five
official, France wl not consider granting the United States
base rights in Algeria and Tunisia if assurances are not re-
ceived of complete American confidence in its North African
policy.
France expects unconditional American support for the
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25X1 C
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reforms which it is ready to institute in Tunisia and Morocco.
(S Paris 7313, 26 May 52)
Comment: Faced with international criticism of its action
in North rica, France has also resorted to other pressure
tactics, such as suggesting the possibility of withdrawal from
the United Nations if that organization decides to discuss the
Tunisian question.
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