CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001200010001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 12, 2016
• Document Release Date: December 26, 2001
• Sequence Number: 1
• Publication Date: August 19, 1952
• Content Type: REPORT

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SECRET
SECURITY INFORMATION
8 August 1952
US OFFICIALS ONLY OCI No. 6458
Copy No.
286
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 Dept. declassification & release instructions on file
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. Britain renews opposition to Japanese membership in GATT:
Britain his notified neva secretariat of the General
Agreement on Tariffs and Trade (GATT) that it opposes con-
sideration of Japan's penaing application for membership at
the GATT session in October. The Board of Trade in London
states that Britain will try to persuade other GATT members
to adopt its view.
The American Embassy in London comments that Britain
clearly intends to use all opportunities to delay a decision
and defeat the application. If these efforts fail, Britain
will attempt to persuade the other members to postpone negoti-
ation of tariff agreements with Japan as long as possible.
(C Geneva 15, 5 Aug 52; C London 684, 6 Aug 52)
Comment:.This notification, two months in advance of the
GATT meeting, occurs at a time when Britain is seeking re-
versal of sentences against two British sailors in Japan.
Britain has consistently opposed Japanese membership in
GATT because it would entitle Japan to most-favored-nation
treatment in world trade generally, and thus increase the
pressure of Japanese competition. Britain's continued fi-
nancial difficulties have fostered not only fear of Japanese
competition, but also increasing sentiment in parliamentary
and financial circles for withdrawal from GATT.
2. France reports Poland insisting on inclusion of strategic
items in trade agreement: The French delegate has told
merican officials that, despite French unwillingness to take
more of Poland's surplus supply of coal, the Poles are
stubbornly insisting on the inclusion of certain strategic
items in the French-Polish trade agreement.
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Polish difficulties in disposing of coal have led the US
State Department to suggest that some countries such as Denmark
and Italy would be under less pressure to include strategic
items in their trade agreements, because the extra Polish coal
could be procured in "secret three-way transactions with France."
(S to Paris 693, 6 Aug 52)
Comment: Poland is aware that France is determined to
expand ra a relations with the East. On the basis of its coal
exports to Western Europe last year, Poland still has about
2,000,000 tons of coal to dispose of in this market.
3. Some German prisoners returning from the USSR: In June,
286 German prisoners of war returned from the Soviet Union.
They claim that there are still 4,000 prisoners in
Stalingrad, 427 Wehrmacht members at Stalino, 143 at Schachty
and 144 at Brianka. Prisoners who came from Brest Litovsk
stated that another transport of more than 1,000 had just ar-
rived there. (C Bonn 494, 4 Aug 52)
Comment: In the spring of 1950 the Soviet news agency
proclaimed hat all but "war criminals" had been released.
There have been indications of a quiet repatriation in the
past year, but official West German figures place the number
of remaining prisoners at 70,000.
4. Czech Foreign Office admits imprisoned American citizen
has escape : e' zec Foreign Office informed the Amercan
Embassy in Pragud, in answer to a request to visit Jan Hvasta,
that he had escaped from Leopoldov prison on 2 January and
that the Czech authorities did not know his whereabouts.' (S
Prague 68, 5 Aug 52)
Comment: Jan Hvasta, an American citizen formerly em-
ployed aTie American Consulate General in Bratislava, was
arrested in October on charges of "military treason" and
sentenced to ten years' imprisonment.
This report seems to confirm recent rumors of his es-
cape. However, the possibility should not be overlooked
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that the Czech Government has planted these reports in order
to disclaim any responsibility for anything that might happen
to Hvasta while in prison.
5. Finland negotiating to export additional amounts of wood
products to the Soviet Union: Foreign Minister Tu-omioja has
confirmed a report a nand will offer a portion of its
export surplus wood products to the. Soviet Union. He stated
that Finland had made the original move in view of the USSR's
expressed willingness to purchase these products and the recent
serious decline in Finnish exports to Western markets. (S
Helsinki Joint Weeka 31, 31 July 52)
Comment: This is an indication of the Finnish Government's
anxiety over the continued slump in the world wood market and
the growing unfavorable effect on the Finnish economy. The
USSR, however, is an important producer of wood products, and
is primarily interested in the products of the Finnish metal
and machinery industry.
6. Poland receives sterling from Finland for the purchase of
copper: The Finnish-Polish trade agreement concluded in April
pr ovided that in return for $10,000,000 worth of coal, Poland
was to receive $5,000,000 worth of wood products and railway
odds and $5,000,000 worth of sterling 25X1C
25X1C When the Finns refused to
supply copper, the Poles reportedly requested sterling instead,
25X1A since they could nurchag r with sterling. 25X1A
Comment: The text of the supplementary Finnish-Polish
trade protocol signed on 4 April stated that a portion of Fin-
land's payments for 1,500,000 tons of coal was to be made by
$5,225,000 in pounds sterling.
Orbit countries have been exerting strong efforts re-
cently to secure copper, a List I item, from sources not con-
nected with the COCOM embargo.
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SECRET
FAR EAST
7, Chinese Communists offer rice to Ceylon: The Chinese
Communist official trade agency offered t o Ceylon Government
8,000 tons of "30 to 40 percent broken" rice at 75 pounds
sterling, the equivalent of $210 per ton, for delivery in
September. (C Colombo 57, 6 Aug 52)
Comment: Ceylon planned to send a mission to Peiping
this mono purchase rice to meet an anticipated deficit
of up to 100,000 tons. Peiping may be willing to sell Ceylon,_
its principal source of raw rubber, this amount at a reasonable
price. However, the price of 75 pounds in this offer is a
little higher than the present price of Burmese rice, which
Ceylon has previously turned down.
8. Indonesian Moslem party leader will ask support for MSA
agreement and an Francisco treaty: Sukiman, head of the
Executive Council of the Mas um Moslem League), is reliably
reported to be planning to call for support of the Subardjo-
Cochran Mutual Security Agreement of January and the San
Francisco Treaty at the annual Masjumi congress scheduled for
25 to 30 August. He believes that the strength of the opposi-
tion Natsir wing is declining and that he can win a majority
decision. (C Jakarta 247, 5 Aug 52)
Comment: Sukiman was prime minister during the San
Franc sci co peace conference and the MSA negotiations, and
supported Foreign Minister Subardjo on both. The cabinet fell
over the MSA issue, and was succeeded by a coalition government
which included the opposition wing of the Masjumi led by
Mohammed Natsir. The conservative Sukiman wing is not now
represented in the government.
With the exception of the Sukiman group, nearly all
levels of the Indonesian Government and articulate public
are united in desiring repudiation of the January MSA agreement
and its replacement by an arrangement which does not appear to
commit Indonesia to the West. The Indonesian Ambassador in
Washington is currently attempting to negotiate such an arrange-
ment. There is little evidence that the Masjumi will take
the political risk of supporting again the January agreement.
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9. Indonesian Communist leader reiterates party's united front
tactic: a meeting of f Se Makassar branch of the Indonesian
Comm nist Party (PKI), held expressly "to quell anxiety arising
from accusations about subversive activities," a member of the
PKI Central Committee stated that the most important point of
the party program is the formation of a strong national front.
He said that the PKI would give the Wilopo cabinet a chance
to carry out its program. (R FBIS Makassar, 5 Aug 52)
Comment: The PKI in May declared its "loyal opposition"
to the government and in June, for the first time in its
history, voted in favor of the government program.
Communist activity in the Celebes, in both the Menado and
Makassar areas, has increased noticeably during the past year.
A statement from a member of the Central Committee urging a
united front would inform Celebes Communists and Communist
sympathizers of the current tactic and would quiet fears of
Communist-inspired unrest.
10. African transportation conference planned by Portuguese:
The Portuguese delegate to the Organization o European
Economic Cooperation has indicated that Portugal is planning
to call an African transportation meeting at Lourenco Marques,
Mozambique, probably in April 1953. The invitations have not
yet been issued, but the same countries which participated
in the 1950 Johannesburg conference, to which the United
States sent an observer, are expected to attend. (C Paris
REPTO 410, 5 Aug 52)
Comment: The Portuguese were largely responsible for
calling the Johannesburg conference of 1950, although they
opposed establishing a permanent secretariat at that time.
While all of central and southern Africa suffers from a trans-
portation problem handicapping the export of strategic materials
and economic development, the Portuguese colonies, which serve
as outlets for the interior, especially need substantial port
and railroad development.
Nationalist believes UN to be only Tunisian recourse:
According to the Tunisian nationalist representing e y in
New York, France is unlikely, without international pressure,
to do anything toward effecting the autonomy which has been
promised. Although he agreed that recourse to the United
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Nations would not bring any immediate change in the French
position, he thought it would lead in the long run to a "more
realistic" French attitude.
Meanwhile a Residency spokesman informed the American
Consul General in Tunis that a "minor flap" was created in
Paris by the request of the Commanding General in Tunisia for
reinforcements to meet a possible deterioration in the public
security situation which, the Consul General states, is pro-
bable when schools reopen in October. (C New York 113, 6 Aug;
C Tunis 43, 6 Aug 52)
Comment: A solution to the present problem is seriously
handicapped by Tunisian disillusionment since the end of
World War II, as well as by the Resident General's ill-advised
insistence last March upon the dismissal of the Chenik cabinet.
As the date of the opening of the seventh General Assembly
approaches, Tunisian activity to ensure discussion of the
issue probably will be increased. France already has about
27,000 troops in the country, and should be able to keep
disorders at a minimum.
12. Change in French policy on UN discussion of Tunisia
reported: The French Director Genera of Political Affi7irs
beT ewes that his government will not oppose inclusion of the
Tunisian question on the agenda of the regular session of the
UN General Assembly, and that it will then vigorously defend
its position.
Meanwhile a British Foreign Office spokesman, antici-
pating that the French would oppose inclusion, had stated that
Britain would support France. He felt that inclusion would
create a precedent for UN interference in internal affairs
and weaken Britain's position in its colonies. He noted
that British policy in Cyprus may be placed on the agenda at
Greek insistence. (C Paris 808, 6 Aug; S London 668, 6 Aug 52)
Comment: In the past France has consistently followed a
policy opposing UN discussion of the Tunisian and Moroccan
questions. However, an increasing number of French officials
have urged reversal of this policy on the ground that the
French program for Tunisia is a good one and that the govern-
ment has nothing to conceal.
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13.
Latest East German report more laconic on Five
Year
Plan
results:
~
The
official as German report of results under t e
Fve
Year
Plan
for
the second quarter of 1952 is more laconic
than that
for
the
first quarter, suggesting that the current
security
drive
is
having a withering effect on material prepared
for public release by the State Planning Commission.
The report declares that over-all industrial production was
101.1 percent of the planned figureo Quotas for some commodities,
including raw and rolled steel, were reported overfulfilled. There
were, however shortcomings in heavy machine construction, machine
tools, and transportation equipment. Figures were not given for
certain important commodities pit coal, copper ore, seamless
tubes, phosphates and others -- the production of which fell short
of targets last quarter. Labor productivity on state-owned in-
dustry was given as 12 percent higher than last year.
There were prospects of a good harvest, and it was noted that
45 new agricultural machine lending stations had been put into
operation since January, with 3,000 more tractors and 1,000 more
mowing machines. (S Berlin Unnumbered, 30 July 52; R Berlin Un-
numbered, 29 July 52)
14. West Germans discouraged by Schuman's stand on the Saar
west on: o ow ng a conversation with Chancellor denauer, the
West German Deputy Foreign Minister expressed disappointment over
Schuman's alleged reluctance in the current talks to alter France's
economic relations with the Saar. Schuman's attitude, he feels,
is incompatible with the Federal Republic's minimum demands which
include the radical revision of the French-Saar convention and
the equal participation of all European Community nations in
the administration of the Saar.
American observers in Bonn consider that France will probably
have to modify its special economic privileges before agreement
is possible. (S Bonn 524, 5 Aug 52)
Comment: Another explosive issue, as yet undiscussed, relates
to the licensing of the pro-German Saar political parties, which
Adenauer desires as part of the general settlement.
Meanwhile, the French Foreign Office describes as "rude in
tone" a letter just received from Chancellor Adenauer character-
izing the initial Hallstein-Schuman talks as most unsatisfactory.
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15. France opposes new Belgian move for uniform conscription
period in EDC2 France will no e p the Belgian Government mol-
lify critics of its 24-month conscription period, according to
the head of the French EDC delegation. Belgium has called a
12 August meeting of EDC delegates to discuss a uniform length
of service for all six EDC countries, but France does not intend
to make any commitments to lengthen its conscription period,
despite plans to do so eventually. France moreover does not want
Belgium to use the EDC to justify reducing the service period to
18 months, and hopes to avoid tying the 24-month period to rati-
fication of the EDC. (S Paris 820, 6 Aug 52)
Comment: Although the Belgians were induced to sign the EDC
treaty without being guaranteed a uniform military service period,
they insisted that the problem be examined immediately after
signature of the treaty.
French military leaders are becoming more optimistic about
the prospects for a 24-month conscription period, but Premier
Pinay is absorbed in allaying other opposition to his government,
and will avoid such a controversial issue for the present.
"Virtual" steel cartel reported in Belgium and Luxembourg:
A high o ic. a in the French steel industry has told an American
official in Paris that Belgian and Luxembourg producers have
formed a "virtual" steel cartel for domestic and foreign markets.
He "expressed surprise" that these arrangements were made so soon
after inauguration of the Schuman Plan. The arrangements are said
to include the establishment of quotas, the setting of prices, and
the pooling of domestic and foreign markets. (C Paris TOMUS 93,
5 Aug 52)
Comment: The cartel referred to is presumably the one
reported -as organized last spring and includes French and West
German steel producers as well as those in Belgium and Luxembourg.
Producers in Belgium and Luxembourg revived a steel cartel among
themselves in the summer of 1949.
The official?s "surprise" may not be genuine since France's
steel producers had been threatened with retaliation by the other
cartel members should they try to carry out their proposed export
price reduction in dollar markets.
Common sts: The American Embassy in me believes that oc alist
Rome Embassy comments on Nenni?s
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leader Nenni's appeal for an Italo-Soviet rapprochement amply
demonstrates his determination to work for a Socialist-Communist
victory in the 1953 elections. The Embassy estimates that the
appeal will not substantially improve this bloc's electoral
prospects, but anticipates that Italy's basic socio-economic dif-
ficulties may, on a long-range basis, facilitate "penetration of
the Italian political picture" by Nenni's "peace" forces. (S
Rome 552, 5 Aug 52)
Comment: Nenni's appeal for close Italo-Soviet relations
may be--designed to exploit Italian disillusionment should progress
toward a European political community be too slow. Italy recently
announced it would reconsider participation in the European Defense
Community unless the formation of a European army were quickly
followed by political federation.
18. London Embassy estimates attitude of
French 'ant - ommun st peace movement: British labor support for
the French "anti-Communist" peace movement Fighting Democracy (FD)
is considered doubtful by the American Embassy in London. Although
the leaders of the Trades Union Congress might consider the FD
program as a formula for opposition to Bevanism, the TUC probably
prefers to check Bevan by mustering large union votes. The Embassy
points to the TUC's traditional insularity of outlook and suspi-
cion of "intellectual" groups.
Bevan has shown little interest in cooperation with foreign
groups, and would probably be wary of entanglement with those
"who may be suspect." Furthermore, Bevanites have a low opinion
of Continental Socialists. (S London 635, 5 Aug 52)
Comment: The support of British and American labor is con-
sidered indispensable to the success of Fighting Democracy by its
leader, Leon Jouhaux, who is aware of Bevan's attitude. The FD's
fellow-traveler backers are probably encouraging Jouhaux to
solicit support from the TUC.
19, Perpetuation of Trujillo's control seen in bill before
Dominican Congress: bill has been introduced into the Dominican
Congress creating the office of Commander in Chief of the Armed
Forces as of 17 August 1952. It will, in effect, deprive the
President of all control over the armed forces, and is obviously
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designed to provide a legal device for President Trujillo to
retain control after the succession to the presidency of his
brother Hector on 16 August. (C Ciudad Trujillo Weeka 83,
1 Aug 52)
Comment: Although Trujillo himself may take the post, he
is reportedly more likely to elevate a member of his trusted old
guard such as Lieutenant General Caamano, Secretary of War, Navy,
and Aviation, or Anselmo Paulino, Secretary of State without
portfolio. A more remote possibility is the president's young
son, Brigadier General Rafael (Ramfis) Trujillo, Jr., who is
known to desire such authority.
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