CURRENT INTELLIGENCE DIGEST
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP79T01146A001000280001-1
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
16
Document Creation Date:
December 12, 2016
Document Release Date:
June 10, 2002
Sequence Number:
1
Case Number:
Publication Date:
June 20, 1952
Content Type:
REPORT
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20 June 1952
OCI No.. 6424
Copy N`o. `~ r
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.
DIA AND DOS
RELEASE
INSTRUCTIONS
APPLY
~,
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THIS MATERIAL CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAWSa TITLE 18, USC, SECSo 793 AND 794, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON IS PROHIBITED BY LAWo
le Australia rejects British request to ease import re-
strie aria e r rag.. s recen a s w r me n s er
~iurin LondonD Australian Prime Minister Menzies was
sympathetic but re3ected'British ree~uests for ,.substantial
rela~cation of Australia?a severe restrictions an imports fram
the United Kingdamo
25X1X ~ Menzies is
"reasonably hapeful" of an early mprovement in Australia's
balance of payments p?sitiano but they also admit that that
cauratry?s drain oaa t$~e sterling area dollar: pool is can-
tinuia~g, despite its restric$ioaas a~n hard currency .imports v
Menzies is caunting on International Bank assistance
irg long?tex?m financing of Australia,?s capital development
plans, but fears it may only be obtairacd~ in the forte of loans
for specifically approved pro,~ects e
EASTERN EUROPE
'2e Reisnstatement of politically doubtful Bulgarian military
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procedure rm~rks ~, ma.~or reversal. of the former Comm~aaist policy
of emphasizing p?litical paarity in the a.etive a.nd reserve
components ~f the officer corps a brad is ixa keepi~ag with a. trend
$o~v~rd placing greater emphasis ore professi?nal military eapa-
billties than upon political ideal~- ies within the Bulgarian
has~beera accompanied by -the recall to active cfiuty of many c-f -
ficers of the Royalist Army and by the reinstatement of some
Comitsunists w~o~were purged during the postwar pearso- This
militar~r establishment,
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Comments .Although the reinstatement of military of -
ficersubtful political reliability indicates an in-
creased e~-phasis upon the military as opposed to the political
merits of Bulgarian officersy political purity continues to
be a primary q,ualificatiora for advancement o It is possible
that the recall of politically ~guestionable military pro-
fession~ls represents only a temporary expedient necessitated
by increased demands on the part of the expanding Bulgarian.
military fer competent and experienced leaderso
3o Merger of all Czech student organizations-into single
trade un on ncreases can ro over manpowero A ex s ng
s u en organ za ons ~ n zec os ova a are to be merged
into a single t-reds uxaion within the framework of the Revo-
lutionary Trade Union Movemento It will be called the Union
of Employees and Students of i7xxiversities and Scientific In-
25X1 stituteso
Comment; The unionizing of all students in higher
educe one institutes is the latest step in the government's
attempt to gain more complete control over all sources of
mahpower 4 This move is the logical cosrsequence of a recent
government decree allocating graduates of universities and
special scflools to specific eanterprises for thxee years>
Qther recent measures attempting to force school children
into the labor market include the organization of labor brig-
ade~ ire which school children and university students are
compelled t~- work for four weeks during summer vacation9 and
the eaea,~irnatioaa of 1~-year olds to determi~ae which on?s will
be permitted to continue their schooling and which-ones will
be assigned to work in mimes 9- f~.ctories and foundries o
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4e USSR reportedl takes over full control of Hungarian
aluminurs n us rye e s repor e
o eve a en over full control- of the.hither.to ~ointly-
admix~is$ered ~[agya,r-Soviet Bauxite Aluminum Comp~.n~a Simul-
taneously the chief ?f' the nonferrous metals department
of the Mina.str of Minin and his deputy were removeda
Comaraeant a The USSR has gradually been tightening its
contro over this key Hungarian industryo Assumption of
compl?te contr?~1 by the Soviet Union is logical in view of
the recent severe criticism levelled at the bauxite industry
and the critical need of the Soviet Orbit for alumixzuma
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During 1951, Hungary accounted for more than one third of
the total Soviet Orbit bauxite productions and augmented the
USSRPs production of aluminum by 15 percento The Hungarian
bauxite industr~- in 1952 is scheduled to increase its 1951
output by f ifty-three percent o
25X1X
5, Substitution of ruble for leu rumored in Rumanian There
are rumors n e uc arks area a e uman an vern-
meat is plane n to subs itute the Soviet ruble for the
Rumanian leu,
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The frightens Bucharest populace is sa ? e uy n~z a
erc andise available on the marketo
Comments T,~ere has been no other confirmation of thin
repore revaluation of tlxe Rumanian currency in January
plus constant rumors of integration inter the USSR, the recent
,judicial reform,. the current drafting of a new Rumanian con-
stitutivn which is expected to fvllaw the Soviet model, and
the purge of several top Rumanian leaders all may have con-
tributed to the strength of this rumor-that the ruble would be
substituted for the lean
25x1x
60 25X1X Yugoslav forces impress
25X1X visited Yu oslavia for a week this month
25X1 He considered that-the
military schv~-ls an emoras ra son maneuvers which he saw were
better than expected, cession was-that
the Yugoslav forces, 9
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are competent and could give a good account of themselves
i st ~.n attack from the east,
7e Yugoslavia cuts staff in Sofia to minimums 'The Yugoslav
. Governmea~t ~.s recall ng a u one o c a of its embassy
staff in Bulgaria accordin tv an official Belgrade radio
annvutacemei~t o
Comments Yugoslavia and Bulgaria. have, since April,
exehangea ~erie~ of bitter complaints concerning mistreat-
ment of diplomatic missions4 The latest Yugoslav note charged
that Bulgarian secret police kidxaapped a Yugoslav employe
from the embassy grounds in Sofia, violating extraterritorial.
rightso
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It iz~ probable that the Bulgarian staff of fQUr diplo-
matic officials in Belgrade will now be reduced, While re-
lations between the twa countries have been moving is the
direct-ion of a ccamplete breakfl it would appear to be advan-
tageous for both countries ts~ cs~ntinue maintaining diplomatic
missions fir propaganda, ixatelliger~ce at~d subversive work.
R_ Yugoslavia employs threat elf Italian imperialism as
~,~~.~
o sca ere do avora a ee press comments regarding im-
.,
proved Creek?Yugoslav rela,tionsg the i~:portant Belgrade daily
Politika emphasized the need f?r a cam~on struggle against
a rev~v~,l a~f Italian imperialis~a. "Today9" comments
Politika9 "Greece and Yugoslavia are united by the point in-
eres s of protecting their nat ona,l i de ndence and peace
in this part of the world."
Commenta It has been assumed by ~a~erican officials in
Belgra a ~,t 'the developm?nt of friendlier Greek?Yugoslav
relations has been accelerated by worsening Italo-Yugoslav
relations .
This attempt by Pcolitika to ,justify closer rel~.tions
with Athens on the bas s o realistic pelf-interest reveals
the Tito regimeo~ sexasitivity to Camixaform alleg~,tion~ of,
the creation of axn "aggressive fascist Belgrade-Aa~kara-Athens
Balkan .Alliance." It also is possible .that Titer is~ attempt-
ing to prepare the Yugoslav Communist Pare' for even closer
relations with Athenns and Ankara.
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FAR EAST
9o Japan urges early participation in COCOM: The Japanese.
Foreign ce es res ear y par c pat an n COCDM in order.
to counter the increasing Diet and public demands for relaxes-
tion of export controls, according to the American Embassy in
Tokyoo .The Japanese believe that CCC4M membership is essential.
to avoid speculation that a new organization is being planned ,.
to retain the present inequality between Japanese and European
security controlso
The Embassy points out that Japan?s export control policiea~
axe becoming an increasingly important political. issue in the
Dieto It suggests that some arrangement be made, such as
sitting with a COCDM sub-committee- groin to ive the Ja anese
a feeling of participation in COCOMo 25X1
~ommento The Japanese Government is finding it increas-
ingly~ult to defend its strict expart control policies,
particularly on items of little strategic value which are not
on the Battle Act lists, The United States has informed Japan
that it will retain its present controls pending multilateral
talkso
10< South Korea political compromise may be introduced i
25X1X
men
ave now s gne a reso u on suppor ng
a
Compromise" amendment to the constitutiono
The
will
probably be introduced on 20 June?
the
amendment would pass but warned-that
a
112 Assem y
our-Point
le islation
ssem y,re-
fused, a hunger strike would be staged before Rhee?s residence
a.nd he would be forced to dissolve the Assemblyo
The Ambassador `comments that Rh~e supporters and opposi-
ton ax?e both avoiding commitment on the conduct of the next
presidential electiono
Commenta While the compromise amendment calls for
popular e-1[~ection of the president, there is some question as
to whether the immediate election should be by popular election
or by the Assembly as the constitution now retluireso The Four-
Foi,nt Compromiseq in addition to calling for direct presidential
election and a bicameral legislature, would include measures
making the cabinet responsible to the Assemblyo
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11. Chinese Communists add engineer regiment to army:
The
Chinese ommura sts ave a e an eng veer reg men as
an in-
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te ral part c1f each army organization,
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pf the 42 regiments w
c w
ultimately be subord na e o Chinese armies, 2$ will b
e trained
in Chia and a nipped by the end of 1952.
.25X1A
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.Commenta C1ne of the significant achievements of the
Chinese.. ommunists in Korea has been their ability to add
supporting organizations in arms and services to each of their
ground armies, This progress has been shown by the addition
of artillery units. While there is some evidenge of similar
engineer support in Korea, there. has been no report of an en-
? gineer regiment subordinated to an army.
25X1
I2, Chinese Nationalists to ratify Sino-Japanese. Treaty by
small. ma or yo a Hess a ona ~ nom n sag en ral
e arm omm ee ordered the Legislative Yuan to ratify the
Sino-Japanese Peace Treaty by a very small majority to empha-
size the overnment"s eneral dissatisfaction with the treaty.
Commenta The Nationalist Government`s main criticism of
the tree. y s its failure to recognize their. claim to the
Chinese mainland. The scope of the treaty is limited to
territory actually under Nationalist control now or in the
future.
heavy ac v y y e M n orces s e y un a end of
13. Viet Minh general offensive unlikely until Septembers. No
25X1X Se tember,I
,
Some reorganization is being carried out for the
purpose of harassing French forces with regional units led
by a few regular troops,
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a variety of diseases are
prevalent in V1et Minh territory.. In the frontier area of
Tonkin there is an epidemic of chglera, the extent of which is
unknown, while other diseases-are reducing the efficiency of
two enem divisions northwest of the French perimeter.
Commenta Although stated. that the two
divas qn~s 'mentioned are prepar ng o a ac , most information
supports the canlikelihood of a general Viet Minh offensive
before the end of the rainy season in, September.
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Diseases o~ zany sorts are endemic to this area and
heretofore have not decisively reduced Viet ~dinh capabilities.
14. Indonesian war at prospect of inspecting Ka3e POW
camps: n ones an press reae on as een genera y receptive
~o Tie Americas State Department's suggestion that Indonesia..
loin other neutral nations in an inspection of conditions on
Kale Island. Editorial comment cautions, however, that the
invitation should come from the United Nations and of from
the United States alone.
Comment: The Chairman of the Parliamentary Foreign
Affairs ~e~ian commented that he had na objection to sending
Indonesian observers to Kobe, but would prefer waiting until.
approval had been obtained from North Korea. The cabinet,
.characteristically, has made no comment. The present
government,which is even more indecisive than its predecessors,
cannot be expected to give an answer unless pressed.
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WESTERN EUROPE
15. Shift in tactics of French Communist Party may reflect
Sovie po cy owar ermany: e m asst' n ar s
e eves- a e enc ommun~.st Party's shift from
agitation and propaganda to direct action against the Western
defense build-up, to the detriment of its popular support, ~~~
may be an indication of a new Soviet device of appealing to
German nationalism on a scale involving some sacrifice to
Communist strength in France. If this is the case, the
Embassy warns against possible surprise action on the part
of the Soviet Union which may r al ~. s i i ess to ay
a higher price for Germany,
Comment: The action of the French Communist Party was
proba'6ry a part of the intensified Soviet-directed" scare
campaign designed to prevent a Western defense build-up,
but the party is~now retreating to less violent action as a
result of government repression.
There have been no other indications that the USSR is
willing to pay a higher price for Germany.
25X1
16. Response to French loan disappointing: The French
Gove.rnmen ~.s sappoin a ecause a rst three weeks of +.
i:ts new loan drive: have res'hl'te'd i.aa thet~sale~,~,af.~,b,arelY half
of-the first bond issue. While 50 percent of the 457 m~.llion
dollars received so far represents a return of hidden capital
to circulation, less than 10 percent is in gold.
25X1
Subscriptions are lagging, particularly in rural districts,
partly because of pre-harvest-cash shortages, but also because
Of dissatisfactian with the government's current firm stand
a ricultural price increases.
25X1
Comment: The fate of the Pinay government will be
determine argely by the success of this drive, the money from
which is urgently needed to provide a minimum investment program
and meet the administrative and military eleficits. It is
primarily-important to the government for its psychological
effect, however, because it tests popular confidence in the
anti-inflation program.
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17d Influential Belgians favor four-power negotiations with
USSR:. any n uen a e g ans a eve a imme is e
ra~ficatian of the European Defense Community treaty and the
Allied-West German contractual agreement without any. attempt
to negotiate with the Soviet Union would-seriously reduce the
chances for an East-West reconciliation later. Furthermore,
some have stated that early discussions of the treaty are
useless, since a four-power conference on the German question
would alter the situation.
In a recent issue of the Socialist Le Peuple, the political
editor, a prominent Socialist, expressed strong opposition to
ratification of the Bonn-Paris treaties until after there had
been negotiations with Russia. He criticized the rearmament
of West Germany prior to German reunification talks, and added
that if the agreements were ratified "tomorrow," negotiations
with Russia would be useless and "peace would only be a
matter of force."
At the recent meeting of the General Council of the
Social Christian Party, the Foreign Minister stated that a
four-power conference on Germany is advisable, since "peace
on the basis of a cum rornise" he rbit is '" referable
25X1 o war . "
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lgo Dutch Prime Minister believes third world war probably
can be avoi e : n an o - e-recur speec a e e er ands-
Amer~can ns tuts, the Netherlands Prime Minister stated that
only through NATO could a third world war be avoided and that
success here was "probable." He also said that the
Netherlands, because it like other smaller European countries
is concerned with the maintenance of a satisfactory standard
of lav~.ng, cannot make any further financial contx?ibutian to
rearmament.
In the same speech, he expressed doubt concerning the
effectiveness of the European Defense Community. He regarded
as "illogical and inconsistent" the French position opposing
direct membership for West Germany in NATO and favoring only
an indirect membership for that country through the EDC.
Commenting on the speech, American officials in The
Hague state that this was the first time they had heard the
Prime Minister ex ress his views so o enly and firmly before
a group.
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19. Swiss firms press for trade quotas with. Czechoslovakia:
Because o pressure rom aznes c rms, a wiss avernment's
Economic Department during the early part of 1952 granted
large eXpart quotas for Czechoslovakia. The Georg Fischer
and Scintilla,fixms were granted quota~~ totaling 1,350,000
wins francs with the latter firm ramised a further quota,
Comment: The quotas mentioned in this report-are but a
fract~.an o those granted in previous yearso This report,
then, tends to confirm others that the Swiss are limiting
their legal trade with prbit countries in conformity. with
Switzerland?s commitments to the United States.
20. Franco .re ortedl plans to assume position of regent:
25X1X enera ranco p ans
to name the minor son of Don Juan as eir-apparent to the
Spanish throne and to assume the position of regent himself.
25X1
This action wily allegedly be taken before 18 July, the
anniver ar of the outbreak of the Civil War.
Comment: Such a step would permit Franco to remain in
power an,o zer I6 years .
The Pretender, Don Juan, has consistently refused to
relinquish his rights to the throne in favor of his son or to
recognize the validity of the 1947 'Law of Succession.
If Franco carries out this plan, he will risk creating
an incident serious enough to threaten the security of the
regime. Such action would therefore indicate his confidence.
in-the security of his position.
LATIN AMERICA
bars broadcast of US denial of press censorshi
21< Argentina
The d rec or o e rgen ne governmen -contro a ra io an
18 June refuse d, to allow the US Embassy in Buenos Ares to
broadcast the State Department?s official denial that Senora
de'Peron?s ''The Reason for my Life" has been banned in the
p:
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United Stateso The previous day the director had cut the
statement from the script of the Embassy's radio program on
the grounds that permission for its use had to came from higher
authoritieso
The Embassy comments that it is now evident that
Argentine officials will not allow the denial to be broadcast
25X1
ublished in the Spanish-language presso
' Comment: Charges that the United States has banned
Senora~e^geron?s book currently highlight Argentina's
anti-US campaigno Only two small English-language newspapers
in Buenos Aires have published a denial of the chargeso
25X1 on 19 June that she has only
a few days to lives T e Curren propaganda may be related to
this circumstanced
25X1X
22< Surinam delegates to Dutch Round Table Conference
repor e y p ann ng revo n
urxnam as o e merxean Consul there that four of the
seven delegates to the recent Round Table Conference in The
Hague held a secret meeting late last week to plan a revolt,
and later distributed "crude pamphlets" urging the people to
resist the Dutch Government<
25X1
The Commander of the Dutch Forces in Surinam, who haS
doubts concerning the reliability of 60 percent of the
native police in the capital city of Paramaribo, states that
he has reinforced the-Dutch garrison there and sent troops to
guard Zandery airporto He has also ordered his farces to
conduct maneuvers, including street-fighting exercises, in the
capital; he believes this show of siren h 'll deter
disturbanceso
Comment: The Surinam delegation to the Round Table
Conferences which was to revise the relationship of Surinam
and the Netherlands West Indies to the Dutch Government, was
thought to be relatively satisfied with the Dutch proposals
when it left for The Hagueo During the negotiations, however,
the group became divided and the dissenting faction raised
a number of objections which led to "interruption" of the
Conferences
SE~RE?T
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Although a Communist-dominated group of Surinamers in
The Hague, calling itself the National Surinam Commission,
apparently tried to exploit the dissenting position, the
Dutch Foreign Office said it felt that the Surinam delegation
considered the Commission merely a nuisance4
Renewal of student strikes feared in Panama: The Normal
Schoo o an ago, eraguas rov race, a oca point of
Communist-inspired agitation, has been closed by'the Minister
of Education after, a week of student disarderse Eight
student leaders recently expelled for their part in the
disorders are on a hunger strikeo Ruben Dario Souza, leader '
of the Communist People?s Party is in Santiago, presumably
trying to foment troubles The govern~aent is concerned over
possible repercussions in the Universit and other schacils
of Panama Cityo
Comment: The agitation in Santiago appears to be
instiga e n large part by the youth section of the People's
Party, which has recently been active among the students there.
Another student group,. the Students9 Federation of Panama,'
has reportedly been considering a general students? strike as
a protest against Remora?s vietary in last month?s presidential.
electiono However, now that the elections are over, the
government is expected to take strong measures to prevent
widespread student disarderse President-elect Reman has
declared his .intention. of clearing out Communist influence
in the University even if it becomes necessary to close it
"far about a year o"
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TOP SECRET
24 June 1852
CIA Neo 4970
Copy X04 4 ~
TOF 5ECRET SUPPLEMENT
TO THE 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 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 SE CR E T
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TOP SECRET
THIS MATERIAL CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAWS, TITLE 18, USC, SECSa ?83 AND ?94, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON TS PROHIBITED BY LAW.
WESTERN EUROPE
to New Italian. demonstrations against Allied government in
Tries a oreseen.o a mer can o a. ica v ser in rtes e
warns at a oval Italians may resort to new demonstra-
tions against the Allied Military Government as a means of
ending the widespread dissension among themselves over who is
to be appointed to the posts opened to-them by the recent
London agreementso He notes numerous rumors and several recent
developments, reflecting a serious increase in irredentism,
to Support his warning,
Although Premier de Gasperi will personally nominate
Italian officials in Trieste, he will be advised by Silvio
Innocenti, a neo-Fascist who heads the Office of Border Zones
in Romeo The expected appointment of men of markedly Irre-
dentist outlook will lead to increased friction between. Allied
Militar Government authorities and local Italian officialso
Commente Because of his weakened political position
since e'recent elections, De Gasperi willprabably be less
able than ever to withstand pressure from Irredentist and
ultranationalist elements in nominating officials far the
new posts,
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