CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001100140001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 9, 2016
• Document Release Date: December 9, 1999
• Sequence Number: 1
• Publication Date: July 16, 1952
• Content Type: REPORT

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SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
CURRENT INTELLIGENCE DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
15 July 1952
OCI No. 6440
Copy No.
~vo
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.
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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.
GENERAL
25X1X repor s t a the serv ce a tac es
o- the USSR in Iran are making clandestine efforts to in-
fluence Iranian Army and Air Force officers
The tactic
f
,
s o
the Soviet attaches include attempts to arrange secret meet-
ings with Iranian officers and a campaign aimed at discrediting
the present Iranian Army and Air Force Chiefs of Staff. They
are also warning the Iranians that the Russians will soon be
in Iran, that they are now searching out their friends in
Iran's armed services, and that they will deal harshly with
those officers who not cooperate, (C 25X1A
25X1A
Comment,. Despite the cohesive effects of the oil nationali-
zation, th armed forces continue to be the government's
primary tool for maintaining order in Iran. The armed forces,
moreover, have long been a target of Tudeh penetration. While
these Tudeh efforts have had some success among junior officers
and enlisted personnel, the higher levels of command have not
been affected.
The possibility that this report may have originated with
Iranian Army circles anxious to impress upon US authorities
the danger of an attempted Tudeh coup and the importance of
continued US aid should not be excluded.
SOVIET UNION
2. New barracks being built in Letzlinger Heide training
area o as rmany; IF-Fa-s been repor e a ex ra arracks
Ti Soviet troops are being constructed in forested areas in
the Letzlinger Heide training area of East Germany, These
barracks are capable of accommodating between thirty and
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25X1A
forty thousand troops. (S )
Comment: In the fall of 1951, additional barracks were
constructed -in the Eisenach-Ohrdruf training area and appear
to be occupied on a year-round basis. This present con-
struction in Letzlinger Heide may be intended to release
other installations for the use of the East Germans; increase
security from hostile observation; or prepare for augmenta-
tion of Soviet troop strengths in Germany, or any combina-
tion of these purposes.
3. Czech Government protests eleven more alleged violations
of airspace: The massy In ague summarizes a 17-C-E -
ore gn Office note of 7 July protesting eleven alleged
violations of Czech airspace between 1 and 15 June. The note
drops the allegation contained in the 24 June note that two
American jets had overflown Czechoslovakia on 4 June. The
Embassy intends to inform the Czechs that the two jets in
fact were their own MIG-151s.
The Czech note concludes with a charge that the authorities
in the American Zone of Germany "intextionally and in a pro-
vocative manner persist in violating sovereign Czech airspace"
and with a demand for cessation? No sanctions are mentioned.
25X1A '(S )
Comment: This note adds to an exchange of charges and
countercharges that has been increasing during the last three
months.
Both the Czech Ministry of Foreign Affairs and American
occupation authorities in Germany had previously protested
what each claimed to be a border violation on 4 June by two
jet planes of the other?s air force.
4. Growing unemployment seen in Finland next fall and winter:
Barring a substantial improvement n ore gn mar e s ere
will be a significant amount of unemployment in Finland next
fall and winter. This will be a direct result of the de-
clining demand for the country's principal exports, wood and
wood products, since the close of 1951. Prices for sawn
timber have fallen by 40 percent in the last six months and
both the United Kingdom and France have imposed drastic
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25X1A
reductions in their price ceilings for Scandinavian pulp. As
a result, the forest products industries are curtailing pro-
duction all along the line.
A special committee headed by the Minister of Communica-
tions and Public Works was appointed by the Cabinet on 5 June
to prepare a program, for coping with the major unemployment
problem anticipated for next winter. (R 25X1A
Comment: The stability of the present government is not
likely o be affected to any great degree by the threat of in-
creased unemployment in the wood and wood products industry.
The work is largely seasonal, especially in regard to timber
felling, where except during the postwar boom years there
has always been chronic unemployment. The situation is ex-
pected to be alleviated somewhat by the inauguration of a
long-term national development program for the northern area
of the country which would promote development of roads and
communications as a basis for eventual industrialization.
5? Hungarian refugees report frontier population slated
for depor a ion: A ami y o ungarian refugees w o escaped
into us r a told Austrian authorities that four hundred
cattle trucks of deportees had left St. Gotthard during the
last few days. They asserted that the deportations are
motivated by the desire of the Hungarian regime to make a no
man's land between East and West, and to prevent escapes
westward. (R London FBIS Ticker, 12 July 52)
Comment: Reports of deportations from the frontier area
arounotthard on the Austrian frontier apparently are
confirmed by this account. Deportations have been reliably
reported on the Yugoslav frontier as well as from the interior.
Security reasons appear to be the main ground for frontier de-
portations.
6. Serious mine fire in Hungary evokes criticism of mine
safety measures' u ape. newspaper repor,e on u y that
a serious a in one shaft of the important Tatabanya coal.
mines had been extinguished on 7 July after burning for nine
days. A loss of only 120 tramcars of coal is claimed and
miners assertedl have mised to make good the loss by 12 July.
(R )
25X1A
Comment: A spectacular fire destroyed part of the Budapest
opera ioouse on the night of 21-22 June and rumors of sabotage
were reported.
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7. USSR reportedly concerned over difficulties in Hungarian
coal m n nga The ega- on In Budapest as learned from a
fi er nt al source that lack of progress in mine mechanization
is causing serious concern to Soviet and Hungarian leaders.
A Soviet delegation attended the recent miners' trade union
congress and visited mines.
The Hungarian press during the past week has repeatedly
charged three coal mining enterprises with failure to raise
their coal output. The failure is blamed largely on insufficient
use and poor care of mine machinery.
Causes for insufficient mechanization of Hungarian mines,
according to the US Legation in Budapest, are said to be the
following: unsuitability of the.mines for'the use of machinery,
unfamiliarity of workers and managers with the machinery, and
especially the Russian habit of sending mine machinery without
spare parts, (R
12 July 52) 25X1A
Comment: The inability of the coal mining industry to
fulfill s augmented quotas in 1951 and the first two
quarters this year has brought repeated criticism. Lack of
coal has plagued the whole economy this year and may possibly
have led to the purging of the Hungarian Minister of Mining and
Power. Further changes may result from the investigation by
the Soviet delegation.
Great emphasis is currently being laid on speeding up
coal production in the whole Orbit,
8. Hungary to use punitive measures to force surrender of
farm products; nis er o Agricultural ocuremen 1m-re--Nagy,
in a repot appearing in the Hungarian Communist Party news-
paper, stressed the early use of "punitive measures prescribed
by law" to overcome delays in the collection of farm products
during the current harvest, The newspaper also criticized
the party leaders in one county for permitting many kulaks to
pass as middle peasants and thus avoid the higher surrender
quotas assessed against kulaksa The application of punitive
measures against kulaks and other peasants failing to meet
their obligations is reported in the press.
Nagy recently was quoted as stating that the "backward
character of agricultural production" could be "basically
liquidated only by uniting small farms in large-scale co-
operative farms," The US Legation in Budapest deduces from
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this statement and other evidence that an early revival of
all-out collectivization may be expected, perhaps in August.
e LOAIH
Comment: The collection of crop surrender quotas from
recalc ran peasants is a problem of long standing in
Communist-dominated countries. In Hungary several cases of
exemplary punishment of both kulak.s and collectives have been
reported recently. The government has attempted to hasten
harvesting activities in order to secure the maximum planting
of fodder crops. Replanting is reportedly satisfactory in
only one of the nineteen Hungarian counties at the moment.
Increasingly strong indications have pointed toward the
revival of all-out collectivization very soon.
25X1 C
9. Poles acquire industrial diamonds through Belgian agent:
Accor ng o thee-Polish begat on
in Brussels has recently been acquiring industrial diamonds
of all types for cash payments in dollars. An Antwerp diamond
merchant who also acts as purchasing agent for the Russian
Trade Delegation in Brussels has been buying the diamonds for
the Pnle=
'
.s_.s ----
r
ec
(S
25X1A
Comment: Great efforts are being exerted by the Polish
Governmen , in the face of Western import controls, to secure
by extra-legal methods goods for industry which are impossible
to obtain through normal trade channels,
10. Polish Government recruits women to help the manpower
shortage: e o s overnmen as nit u e measures o
recru large numbers of women for work in industry, the
building trade, transportation, and communications. The
American Embassy in Warsaw reports that various ministries
are issuing instructions for fixing percentages of women
hi:red 9 usually more than half of the total number of workers.
Polish women will replace many male lathe and drill
operators, railroaders, packers, waiters sales 9 clerks,
publicists and cashiers. (R
25X1A
Comment: In his recent speech to the Seventh Plenum of
the Cen Committee of the Polish Communist Party President
Bierut drew attention to the manpower shortage in Poland, and
the need to undertake new measures, such as the recruitment of
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women for work outside agriculture. The Polish Government
is apparently losing no time in putting Bierut's proposals
into effect.
11. Rumania continues collectivization drive- The American
Legation in Bucharest repor s e arr va 0 42 Soviet agri-
cultural experts who apparently constitute a planning group
for further socialization of agriculture.
During the past week, Scanteia, the official party news-
paper, mentioned an "existingl,, t6 kolkhozes," which means an
increase of 35 since the beginning of May. As part of the
anti-kulak drive the official organ of the Rumanian Union of
Working Youth, discussing a cabinet decision on the new school
year, insisted that not a single kulak's child should be
granted a scholarship or exempted from payment of school fees,
25X1 A (C )
Comment: These events, in addition to almost daily
announcements of punishment meted out to kulaks, are further
indications of the continuing collectivization drive in
Rumania. At the same time, members of the Legation have ob-
served much uncut grain and no increase in the amount of
agricultural machinery being utilized in the chief grain-
growing areas of the country.
12. Purged Rumanian leaders still in evidence: According to
the Amer c ega ion nuc cares ., eo ar orgescu, de-
posed Rumanian Minister of the Interior, apparently continues
to live under close guard near two members of *e Le at ion,
Vasile Luca is seen walking alone daily by 25X1C
0 fM=M
25X1C reported that he saw Ana r enter the
Foreign Office with several men on 10 July.
The Legation also reports that former Soviet Ambassador
Ka`-taradze left Bucharest by plane on 11 July. The fact that
he was seen off by the new Rumanian Foreign Minister, Simion
Bughici, and other high officials and Orbit diplomatic
colleagues, may indicate that he is not in official disgrace. 25X1A
His destination was not known. (C
25X1A R )
Comment: These reports serve to dispel for the time
being he?reports in the Western press that the purged
Rumanian leaders have committed suicide or been sent to the
Soviet Union.
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13. Yugoslav propaganda broadcast alludes to need for revolu-
tion in an a: a Belgrade in a roe cas o -Its ome
au ence commenting on the oppressive and depraved conditions
in Albania, mentions the desirability of a popular internal
revolt against the Communist regime of Enver Hoxha. (R FBIS
Belgrade, 10 July 52)
Comment: Yugoslav propaganda attention to the need for
an internal-revolt is notable in light of the strong Yugoslav
capabilities for the subversion of the Hoxha regime by means
of a palace revolution disguised as a genuinely popular up-
rising.
Marshal Tito is organizing and exploiting a large number
of Albanian refugees in Yugoslavia, and he has reportedly made
contact with Albanian exile leaders abroad in an attempt to
assume the leadership of the struggle for Albanian "liberation,"
However, there are no clear indications that Tito will seriously
attempt to disturb the status quo in the Balkans at the present
time.
14. Belgrade continues to pursue economic reorganization
and decen ra 1za ion: 1 3 , 1 1 , ng o Amer can o c a s, he
major reorganize on and further decentralization of the
state's economic control machinery is being rapidly effected
and is resulting in considerable confusion. All Economic
Ministries and Councils, with the exception of the Ministries
of Finance, have been abolished at both the Federal and Re-
public levels. The Ministers and Presidents of these abolished
economic agencies will retain their individual authority and
form a "Collegium of Ministries" which will apparently serve
as the governing body of the new Economic Council.
Press reports indicate that reorganization at the Re-
public level is being expedited. Some 100 industrial and
agricultural directorates have been abolished, and their
personnel assigned to local industry and government. Despite
or because of this widespread decentralization, the National
Bank retains its recently strengthened controls over in-
25X1A dividual industries as WfRIAI over the entire economy, (S
Comment: The Tito regime describes this reorganization
as on y a- nterim measure on the path to pure Marxism. Yet
the birth and development of this program of compounded
idealism and empiricism will be costly in terms of economic
efficiency and personal security. Recent reports from American
observers note that this administrative reorganization has
created a considerable degree of economic anarchy and confusion
among those officials who fear the consequences of a withering
away of the state apparatus,
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15, Clemency demanded for Japanese war criminals: The
Japanese overnment is un er Increasing pressure to obtain
some clemency for Japanese war criminals, according to
Ambassador Murphy. The Diet opposition is making this a
political issues a tactic which has evoked widespread grass
roots response and has forced even Liberal Party Diet members
to attack the government for inaction.
Japan?s Foreign Minister Okazaki has expressed fear that
unless an early reply is received from various governments
approving paroles for-54 of the war criminals, including
eight convicted by the United States, he may not be able to
prevent the Cabinet from passing a resolution calling for
immediate release of all war criminals, (C 25X1A
11 July 52)
Comment: Under the terms of the peace treaty, Japan
must get t e consent of the Allied nation which imposed the
sentence prior to granting parole or reducing sentence.
In an election year the Yoshida government cannot afford
to ignore what appears to be an organized campaign to obtain
amnesty for Japan?s war criminals.
16. Panikkar reportedly considers Peiping potential world
menace: a recent rep ace n lan m ass. or to elping,
Panikkar, is reliably reported to be convinced that
Chinese Communist leaders are "unalterably determined to push
the Communist revolution all the way."
25X1
He also told that a fully unified and armed
25X1A China w a great menace to the world," (S 2.5X1A
Comment: Panikkar's reported opinions on both these
questions have varied widely,
While Panikkar has sometimes seemed aware that the
Chinese Communist leaders are militant Stalinists with no
good will toward any non-Communist governments he has often
misled his government and the Indian public by encouraging
the view that Chinese Communism is primarily an expression of
Asian nationalism.
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sties i,n en sin were oraerea to select 1, 0 "reform-through-
labor"4.prisoners for transfer to Manchuria, according to a
17. Chinese employ forced labor in Manchuria: Chinese author-
25X1C The prisoners were to range
rote 20; to 45 years of age with sentences of 12 years or more..
It is said that these prisoners are part of some 15 000
25X1A
19.
25X1X
25X1X
who are;., being sent from all parts of China o open u new9lands
to cultivation in northern Manchuria. (S t 25X1A
Comment: The use of forced labor in China has been ad-
mittey-the Communists, who prefer to employ the euphemism
of "reform through--labor." The prisoners are employed through-
out the`. country, with the Communists apparently drawing on
those with longer sentences for transfer to outlying provinces
in the northwest and northeast.
The number of persons serving forced labor sentences is
undeter!ined, but numerous reports suggest that there may be
several:,hundred thousand.
18. 25X1CCh1na importing its largest radio transmitter from
Comment: This transmitter substantially exceeds in power
anything -lnown to be operated by the Chinese and it could pro-
vide additional facilities for overseas propaganda broadcasts.
25X1 X
stabs I .y o the Tam government. The consensus of these reports
is thatk while Tam's close relationship with the French has won
him an enduring unpopularity, the attitude of the Vietnamese
popu.lat. on.has changed somewhat during the first month of his
premiership from one of intense hostility to one of.watchful
waiting.:.
says Tam government cannot
was told by the 25X1X
that the government of Nguyen
Van Tam,is widely unpo ular.and cannot last long. The Consul
comments that the view is significant since he is
"perhaps. the most cautious man in Indochina." (C 25X1A
12 July; 52) '
Comment: Conflicting reports have been received on the
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20. Vietnamese information chief reportedly seeking downfall
of prime minister: says
tHa Minister of In mat ion ao s owed him a secret direc-
tive from Tam to all ministers to consult with their French
"opposite numbers" before taking any major decision or action.
25X1X believes this disclosure is part
of a campai n b Giao to discredit Tam and to secure his
ouster. (S 25X1A
Comment: Although this information has not been authenti-
cated-,-IT is consistent with Tam's long record of close
collaboration with the French. There have also been reports
that Bao Dai, whose personal entourage includes Giao, named
Tam premier in June in order to ruin his reputation and to
prepare the way for a more truly nationalist government.
21. Burmese Army attacks on civilians continue: During the
past month there has been a rash of serious breaches of disci-
pline in the Burmese Army, according to the American Embassy
in Rangoon. The most recent incident was the destruction of
a village in Arakan resulting in the death of 61 civilians,
including 51 women and children. Commander in Chief Ne Win
is personally investigating this incident and the War Office
has issued strict orders designed to prevent such actions in
the future.
believes that over-all disci-
pline in the army is good, but that such deeds are to be
expected occasionally from isolated garrisons manned by inex-
perienced officers. (C 25X1A
Comment: Numerous Karen and Burmese villages throughout
lower Burma have suffered the same fate as this Arakan village
during the last four years. These brutalities are partially
responsible for the continued hostility towards the government.
22. Increased insurgent activity in Burma reported: The
American massy in Rangoon reports that insurgent operations
highlighted press and military reports during the past week.
Karen nationalists blew up.Rangoon's main water supply line
for the eighthtime in two years and destroyed two railway
bridges. Burmes,e Communist rebels were reported to have con-
ducted serious raids along the Rangoon-Mandalay railway.
The Embassy comments that the insurgents "are making hay"
against lightly-held areas while government forces are being
redistributed. (C ) 25X1A
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Comment: This report indicates that the prediction by high
Burmese officials that the main insurgent groups would be de-
feated by the end of the rains is highly optimistic.
23. Burmese Supreme Court approves nationalization of minority
lands: The Burmese supreme Courl as ruled that the Lana.
NCa ionalization Act is applicable to the semi-autonomous frontier
states where very few Burmans live. The American Embassy in
Rangoon comments that this finding is an assertion of the Burmese
Government's authority bver large land-holding in those areas,
and that it is encouraging to groups desiring their division.
(C ) 25X1 A
Comment: This decision by a court which has only Burman
members comes at a time when there have been indications of
growing resentment among the frontier people toward the Burmese
Government. Agitation for land reform in areas inhabited by
ethnic minorities has been conducted chiefly by Burman Socialists
and Communists.
24. Burma wants to purchase arms in United States: The Ameri-
can Em assy in Rangoon, as been reliably informed that the
Burmese Government is prepared to allocate ten million kyats
(slightly more than 2,000,000 dollars)for the purchase of arms
and ammunition in the United States. These arms are to be used
by the police and village militia. The Embassy is anticipating
an official approach. (C ) 25X1A
Comment: The Burmese are currently making a strenuous
effort to buy military equipment, particularly small arms.
There have been reports that small arms entering Burma are
issued to irregular forces controlled by the Socialist Party
and that they have thus become a source of increased instability.
25. Ceylon seeks US rice supplies to alleviate critical
shortage: Ceylon is facing a rice shortage wHich is expected
To read- crisis proportions in August. British and Ceylonese
officials are convinced that the United States is the only
possible source for emergency supplies, and Britain is pre-
pared to authorize 20 to 25 million dollars for the purchase.
The American Embassy in London favors supplying rice and wheat:
flour to Ceylon for the furtherance of goodwill in Asia. (C
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Comment: This is the second rice crisis Ceylon has ex-
perienced is year, having resolved the first by borrowing
Burmese rice from Japan. Ceylon has been unable to compete for
rice with the larger consuming countries either in price or
with offers of dollars. Although Britain is critically short
of dollars, Ceylon's position as a heavy net contributor to the
sterling area dollar pool strengthens its claim on common dollar
holdings in its present emergency.
NEAR EAST - AFRICA
26. British Middle East army units to hold maneuvers with the
Arab Legion in Jordan:-
r an: -Jordan Has agreed to permit units o
e British a East Land Forces to hold their annul
maneuvers this autumn in Jordan in con unction with the Arab
Legion. (S
)25X1A
Comment: British units from the Canal zone staged a
parachute dropping exercise with elements of the Arab Legion
in Jordan last May, and the usefulness of the operation may have
encouraged the larger scale plans for this fall. In recent
years the British have tripled the amount of their annual sub-
sidy to the Arab Legion, which they consider the best native
fighting'force in the Middle East.
270 Agreement on Tangier reforms reported: The American
Diplomatic Agent In anger reports a ere seems to be
general agreement among the powers represented on the Committee
of Control as to the nature of the changes to be made in the
administration of the International Zone. The two chief
Spanish objectives, command of the gendarmerie and revival of
an independent intelligence bureau under Spanish control, are
expected to be met. In addition, two new deputy administrator
posts will be created, one to be assigned to a Spaniard and the
other to a British representative. The number of Italian
representatives on the advisory Legislative Assembly will be
restored to three. (C 25X1A
Comment: These changes are essentially those which
France an pain were reported last month to have agreed upon.
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WESTERN EUROPE
28. Continued strife in the Trieste Communist Party reported:
During a meeting o the Central Committee o t He ommun s arty
of Trieste on June 16, Vittorio Vidali attempted to justify the
purge of an undisclosed number of members for deviationism on
the grounds that he had been ordered to reorganize the party
along military lines. Vidali revealed one of the principal causes
for party dissension by stating that it is necessary to place
international Communist objectives ahead of national feelings.
25X1C states that recent purges in the Stalinist
in Trieste and Vidali's intransigent attitude since the Triestey
elections have created "strong discord and dissidence" in the
party hierarchy. This has reportedly resulted in the postpone-
ment of the annual P ress from July to December.
(S 25X1A
25X1A
&M )
Comment: The relatively poor showing of the party in the
predom na e-y Slovene hinterland of Trieste and its equivocal
stand on the independence issue provide fertile ground for con-
tinued intra-party strife. Moreover, a major shift in party
policy from a mass appeal to the militant, hard-core approach may
indicate preparation for the formal abandonment of the cause for
independence for Trieste and closer relations with the Italian
Communist Party.
25X1 C
ca a Th
-
- - -- ---
e of the'
suggesting that the Federal Republic uu ~vY1C`' `'untrol commission
lied telephone and telegraph cable betw
pay een oBerlin~~andoWest eGermany.
believes that this suggestion repre-
sent; w ac c by Soviet auth
iti
or
es in their Berlin haras-
sing campaign. He feels that the suggestion should be rejected,
since the Allies have always avoided any inference that the
Soviets could demand such payment. (S 25X1A
Comment: Early in June, both the British and American
Governments were dunned by the East German Government for 18 mil-
lion dollars for the use of the cable during the last seven years.
Should the cable be cut because the Allies refuse to pay, West
Berlin could, without too much inconvenience, use radio facili-
ties to communicate with West Germany.
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Meanwhile, the Allies have learned that another threatened
harassing measure is not likely to be carried out. After care-
ful investigation, engineers now believe that if East German
authorities should block West Berlin's sewage outlets, East
Berlin's sewage would be equally affected.
25X6
31. French politicians see Pinay?s downfall certain this year:
A c:on ent a survey by m asst' arcs s ows at
spokesmen for the major French political parties are unanimous
in the belief that the Pinay government will fall before the end
of the year. These politicians expect a similar rightist-
dominated coalition to replace the present government when the
failure of Pinay?s economic policies becomes more apparent.
They envisage no fundamental change in foreign policy, but
agree that Schuman will not head a ministry; Bidault is mentioned
either as his successor or as the next premier. .(C
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Comment: Although Pinay has so far successfully confounded
his criti'cs, his program stops short of the drastic reforms
necessary to stabilize the French economy.
Dissatisfaction with Schuman has become increasingly vocal
in France during the past few months. Bidault's appointment
to the Foreign Office would assure continuity of the program
for which he and Schuman have carried the responsibility since
1945, but his failing health makes his political future uncertain.
25X1X
25X1X Conference: u1a1L.Lu-iionea is of Moscow Economic
oviet nistry o Trade official has implied ethat tthestrade a
proposals made to France by Nesterov, leading Soviet delegate
at the Moscow Economic Conference, were not based 25X1C
and were.only so much propaganda. alines
there seems to be some friction be adds that
Ministry of Foreign Trade. The USSR has since the nconferenceet
refused to act on French requests for Soviet grain.
The American Embassy in Moscow comments that should France,
Italy, and Pakistan fail to obtain Soviet commodities offered
at the conference, there might be an exploitable case against
the USSR if it sponsors another international economic conference.
The outcome of British-Soviet and British-Chinese trade deals
could be decisive in the final ev
Conference. (C of the Moscow Economic
) 25X1A
Comment: This is the first indication from a Soviet source
that The :scow Economic Conference was not concerned with the
realities of Soviet trade relations outside the Orbit.
This report contrasts sharply with the initial French
enthusiasm over the value of the Moscow Economic Conference as
a means to improve French-Soviet trade relations. The French
Government reopened trade negotiations with the USSR as a result
of an offer of grain to the French delegation.
33, Austrian East-West trader seeks import
rolllin m permit for steel
g o ann ase gru er, ustr a s most notorious curer o scrap metals for Orbit he
chasers, has approached the
Austrian Government for an import urper for a 00dolla
secondhand Swedish rolling mill. Them mill, nowlatythe?smallrscrap
iron processing plant which Haselgruber
zone several months ago, is held under bondcpeSd in the Se
the permit. pending issuancce of
of
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25X1A
Despite Socialist opposition, the Austrian Government is
reportedly inclined to approve Haseigruber's application. The 25X1A
American Embassy in Vienna will file a strong protest. (S
Comment: Hdseigruber, whose international operations suf-
fered a setback last year with the trial of some of his collabo-
rators in Germany, is again frequently reported as the organizer
of dubious deals. Because of his good connections with the Soviet
occupation forces and perhaps with the People's Party, and because
of his usefulness to Austrian buyers as an intermediary with the
Russians in Austria, he has so far escaped Austrian prosecution.
The Socialists, who are frequently critical of shady deals in
the Austrian scrap market, may be expected to carry their oppo-
sition to the public through the party press.
34. De Gasperi expected to push for substantial revision of
Italian a ec ore awo n order to ma retain a war ng majority
7557 The hard--pressed centrist parties after the 1953 parlia-
mentary elections, Premier de Gasperi is expected to use the
threat of drastic revision of the electoral law to force the
minor democratic parties to accept a somewhat less extreme pro-
posal.
The two proposals have been submitted for De Gasperi's study
by a special committee of the Christian Democratic Party, the
American Embassy reports. The first would give three-fourths of
the seats in Parliament to the bloc winning an absolute majority
of the popular vote. Should no bloc obtain a majority, a new
election would be held for the top two contenders. The second
and more drastic proposal would permit proportional representation
for all parties in cities with populations over 150,000 but else-
where would provide for single-member constituencies.
According to the Embassy, the first system would give the
Christian Democrats 52 percent of the seats and double the present
strength of the minor democratic parties, giving them 22 percent
of the seats. The remainder would go to the extremist parties,
with the Communist-Socialist bloc being reduced to less than half
its present strength.
The second system, on the other hand, would result in the
virtual extinction of the small parties, whose candidates would
be restricted to a few cities. The Communist-Socialist bloc
would probably enjoy much the same strength it has now, while
the Christian Democrats would still get an absolute majority.
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The Embassy observes that if the minor democratic parties
agree to the first proposal, they will try to reduce the winning
bloc's majority in Parliament from three-fourths to two-thirds.
(Factual data from: S
25X1A
LATIN AMERICA
35. Haiti charges American mismanagement in SHADA sisal corpo-
ti
ra
on: trong criticism has been launched In i against
Viand its American management following a recent announcement
that the corporation is in financial difficulty and that the
government may have to take over credit payments due 'the Export-
Import Bank. The government has pointed to tax and rent conces-
sions and other advantages on the one hand, and to high sisal
prices on the other hand in its charges of incompetence. The
management has countered by pointing to the sharp decline in
world market sisal prices and to increased operating costs.
The Haitian Government reportedly wishes to terminate the
present management in which the United States is indirectly
involved and to propose Haitian administration of SHADA with
American technical assistance, possibly under the Point IV
program. The departure of a Haitian delegation to Washington to
discuss this proposal has been postponed pending the arrival of
an Export-Import Bank mission for an on-the-s
25X1A
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SECURITY INFORMATION
US OFFICIALS ONLY
TOP SECRET SUPPLEMENT
15 July 1952
CIA No, 49731
Copy No. 4 8
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 SE CR E T
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.
EASTERN EUROPE
1. Czechoslovakia attempts to rent West German tank cars: Czech-
oslovakia s repor a y.negotiatng to rani tank cars f six
months from a West.rjgpman firm, (S'
25X1A ? FOR CRITICAL, ;SSE URITY 9 25X1A
ttEASO S this report
is no to be further transmitted within the United States or
beyond the borders of the United States without the express per-
mission of the releasing office?)
Comment: These cars would probably be used for shipments,
now sus an sally behind schedule, of crude oil from Austria to
Czechoslovakia. Czechoslovakia has the capacity to build this
number in a relatively short time, but increased production of
tank cars beyond present levels would require some diversion of
plant capacity and materials from other produc.tion,probably mili-
tary.
NEAR EAST - AFRICA
asxea LOAMA
m on 10 July what the American attitud
e would be if the present
Greek Government were fo*ced by the detection of a few of its
supporters to depend on the Communist front faction in Parliament
to stay in power.
25X1X said Lord Mountbatten had advised him that
he would not receive opposition leader Papagos during his forth-
coming visit to Greece unles terview were approved by King
25X1A Paul. (S
25X1X Comment: The question was undoubtedly stimulated
by cu:rren opposition attempts to cause the government's fall be-
cause.o.f the defection of its parliamentary supporters. The British,
however, have tended.. to. side. with. the government and the Palace
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against Papagos9 who is favored by the United States. The refusal
of Lord Mountbatten to interview Papagos will spur Greek efforts to
exploit any difference of opinion between American and British re-
presentatives in Greece,
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transmitted outside of CIA. Access to Top Secret matter is limited to Top Secret Control personnel and those individuals whose official
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