CURRENT INTELLIGENCE BULLETIN - 1954/12/17

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03009184
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: December 17, 1954

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17 December 1953.3(h)(2)
3.5(c)
Copy No.
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO 4
NO CHANGE IN CLASS.
171 DECLASSIFIED
CLASS. CHANGED TO: TS S C
. NEXT REVIEW DATE' "'CVO
AUTH: HR 70-2
DATE: 7/I/L REVIEWER
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
diCOMMIIIM T�P CRET Wellf013
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INISe
SUMMARY
GENERAL
1. Comment on Soviet Foreign Ministry statement on Formosa
(page 3).
2. Comment on Soviet note threatening annulment of pact with France
(page 3).
FAR EAST
3. Delay in Swedish-Swiss response on problem of Korean Neutral
Commission indicated (page 4).
4. South Korean government fears popular opposition to peaceful
unification weakening (page 5).
5. Chinese Communist junks may be engaged in amphibious training
(page 5).
SOUTHEAST ASIA
6. Recent campaign illustrates Vietnamese �army's negligible effec-
tiveness (page 6).
NEAR EAST - AFRICA
7. Iranian officers do not expect to fight in the event of Soviet aggres-
sion (page 7).
8. Greek cabinet member expects severe political crisis (page 7).
9. Moroccan nationalists decide to adopt anti-American attitude
(page 8).
EASTERN EUROPE
10. Yugoslays reported opening diplomatic relations with Peiping
(page 9).
WESTERN EUROPE
11� Rome embassy estimates annual trade profits of Italian Commu-
nists at $7,000,000 (page 9).
LATIN AMERICA
12. Uruguay prepared to assist in defense of Costa. Rican sovereignty
(page 10).
17 Dec 54
CURRENT INTELLIGENCE BULLETIN
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GENERAL
1. Comment on Soviet Foreign Ministry statement on Formosa:
The harsh tone of the Soviet communi-
qu�f 15 December on Formosa and
its linking of American "aggressive
aims" in Asia with the rearmament of West Germany indicate
that the purpose of the communique is to generate fear in the
Western camp that such actions are leading directly to war.
There is an increasing emphasis on this point in Soviet and Chi-
nese Communist propaganda and in official statements as the
French debate on ratification of the Paris agreements draws
closer.
The statement is another step in Moscow's
documentation of Communist China's claims to Formosa. The So-
viet Union and China are building up a case against the American
position on Formosa on the grounds that it violates Chinese terri-
torial integrity and sovereignty, and that it constitutes unwarranted
interference in China's internal affairs.
Like Khrushchev's speech in Peiping on
30 September and the joint Sino-Soviet communiqu�f 11 October,
this statement contains no pledge of Soviet military commitment
to a Chinese campaign against Formosa. All of these pronounce-
ments have made a distinction between the Chinese claims against
Formosa, which are endorsed by the "Soviet government," and the
stated Chinese intention to "liberate" the island, with which the
"Soviet people" sympathize.
2. Comment on Soviet note threatening annulment of pact with France:
The statement in the Soviet note to France
on 16 December that "ratification of the
Paris agreements will annul the French-
Soviet treaty" is far more specific and
unequivocal than Soviet hints to this effect in the last few days.
This indicates that Moscow still believes there is a substantial
possibility of preventing ratification by the French assembly. The
Kremlin can be expected to take other measures toward that end--
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probably more by use of threats than by offers of concessions--
before or during the assembly debates which begin 20 December.
Neutralist elements in the French
National Assembly will probably use the Soviet demarche in a
last minute effort to delay the ratification debate due to open on
20 December. In addition, Gaullist deputies can be expected to
give more attention to General de Gaulle's reiterated warnings
that Western persistence in arming Germany without negotiations
with the East might lead to "impulsive" Soviet countermoves im-
periling peace.
Nevertheless, the chances for ratifica-
tion on 23 December are still considered good despite the threat
to implementation suggested by the current French-German diffi-
culties over the Saar.
FAR EAST
3. Delay in Swedish-Swiss response on problem of Korean Neutral
Commission indicated:
wedish foreign minister Unden has
declared that the Swedish-Swiss reply
to the allied request for disposing of
the Neutral Nations Supervisory Com-
mission in South Koreaould not be expected until January, ac-
cording to the American embassy in Stockholm.
Comment: The delay in the Swedish-
Swiss response and the la�c-k-TATriTT action to remove the neutral
inspection teams from South Korea raise the possibility of new
South Korean threats and steps against Polish and Czech repre-
sentatives. Following General Hull's warning that he would pro-
tect the teams, South Korea withdrew its threat to act against
the Communists if the teams did not leave the country by 29
November.
Action at this time by "wwfficial"
armed patriotic groups would provide Rhee with a dramatic is-
sue to divert attention from any steps he contemplates against
his recently emboldened political opposition.
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4. South Korean government fears popular opposition to peaceful
unification weakening:
Comment:
Informed Koreans still oppose unifica-
tion on Communist terms, but Pyongyang b recent proposals for
travel and postal exchanges appear to have had a great appeal
among many South Koreans who prefer at least limited contacts
with the north to the bleak prospect of living indefinitely in a
divided country.
5. Chinese Communist junks may be engaged in amphibious training:
Approximately 900 junks operating in
areas near Macao on the South China,
coast have been commandeered by
Communist authorities since 1 September
and refitted and painted black, according
to reports from American military liai-
son officers at Hong Kong.
�17 Dec 54
Half of these junks were reportedly ob-
served in mid-October as they sailed
CURRENT INTELLIGENCE BULLETIN Page 5
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past Macao Macao to Shangchuan Island, off the Kwangtung coast, about
40 miles southwest of Macao. The other half left the Macao area,
apparently en route to Shangchuan, in early November. The junks
were laden with supplies and manned by crews wearing army uni-
forms.
Comment: The Chinese Communists
could use these junks, which are capable of transporting a total
of about 45,000 troops, to train crews for future amphibious opera-
tions. Amphibious training could be held at Shangchuan with little
risk of detection
The weather there is suitable for amphibious training in winter.
SOUTHEAST ASIA
6. Recent campaign illustrates Vietnamese army's negligible effec-
tiveness:
The Vietnamese army's recent indecisive
campaign against a dissident faction of
the Hoa Hao in South Vietnam is a further
illustration of inability to plan, execute
and support even a minor operation
agalnt negligible opposition, according to the American army
attach�n Saigon. One notable feature of the five-day operation,
which was discontinued on 13 December, was the complete lack of
any artillery support.
The attach�omments that the combat
effectiveness of Vietnamese army units, when compared with the
probable strength of future Viet Minh opposition, approaches zero.
Comment: The rebel Hoa Ha.o leader, Ba
Cut, with a force estimated at 2,500 men, has been harassing the
countryside west of Saigon for several months. The Vietnamese
army force involved against him totaled up to ten battalions, or
roughly 7,000 men.
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NEAR EAST - AFRICA
7. Iranian officers do not expect to fight in the event of Soviet
aggression:
/if war came with the USSR,
Iran would not fight the Soviet army but
would "just turn over to the Reds all
the arms, equipment, ammunition and other things the United
States has given us as MDAP and other aid.. In return the Rus-
sians will not only show mercy on Iran but will also pay us some
baksheesh."
The American army attache comments
that many Iranian officers, including those on the General Staff,
believe that in the event of an attack by the USSR, huge American
and British forces will immediately appear in Iran and solve the
problem for them.
Comment: The Iranian armed forces
are incapable of effective defense against a Soviet attack, and
realization of this has produced a defeatist attitude among some
Iranian officers. Neither the army b capabilities nor the offi-
cers morale is likely to be improved significantly in the near
future.
8. Greek cabinet member expects severe political crisis:
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Comment:
young activist group within the Greek Rally
which seeks to replace the "old guard" and direct a more aggres-
sive political and economic program which would still be along
pro-Western lines.
The storm of public indignation precipi-
tated by news of the UM adoption, with the Greek delegateb
concurrence, of a resolution tabling the Greek motion concerning
Cyprus seriously threatens the Papagos regime and may hasten
its collapse.
9. Moroccan nationalists decide to adopt anti-American attitude:
Many Moroccan nationalist leaders have
decided to turn definitely against the
United States because of its recent pro-
French stand in the United Nations,
These
leaders may now accept Communist support as preferable to
continued colonialism. They are considering a boycott against
all American products, and some are counseling attacks against
Americans.
The American diplomatic agent in
Tangier believes that this is a fairly accurate portrayal of
nationalist feelings. He fears for the safety of American bases
in Morocco unless the French government takes strong measures
to cope with the Moroccan situation.
Comment:
American prestige among the native
Moroccans has declined in recent months, and Moroccan leaders
may reverse their instructions that no attacks be made on Ameri-
cans.
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EASTERN EUROPE
10. Yugoslays reported opening diplomatic relations with Peiping:
Comment: Since the announcement
of Marshal Tito's current trip to Southeast Asia, there have been
varying reports that Yugoslav= Chinese Communist negotiations
have been arranged.
Yugoslavia has long advocated Western
recognition of the Peiping regime to ensure against its domina-
tion by the Soviet Union. While Belgrade has said the initiative
was up to Peiping, since the latter had never accepted the origi-
nal Yugoslav offer in 1949 to open relations, Tito may take any
opportunity offered on this trip to conduct negotiations./
Peiping is almost certainly willing to
establish diplomatic relations with Yugoslavia as a part of the
current Soviet campaign to improve relations with Belgrade
WESTERN EUROPE
11. Rome embassy estimates annual trade profits of Italian Commu-
nists of $7,000,000:
17 Dec 54
Italian press reports that the Italian
Communist Party (PCI) profits
$50,000,000 a year from Orbit trade
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with Italy are greatly exaggerated, according to the American
embassy in Rome. The embassy estimates these profits at
about $2,000,000 from legal trading activities, plus not more
than $5,000,000 from illegal trade.
Comment: The Italian under secretary
of foreign commerce last July estimated the PCI's annual profit
from legal trade at $2,300,000, and denied that the PCI was able
to carry on illicit trade. He stated that the income from trade
was a small part of the party's total income of between $61,000,000
and $76,000,000.
One of the aims of Scelba's anti-Communist
campaign, as reaffirmed on 4 December, is to reduce drastically
PCI trade profits. Although one government-sponsored company
has been set up to control trade with Communist China, little real
progress has been made. The PCI is so deeply entrenched in this
trade through hidden transactions, covert firms, and tacit support
from non-Communist companies paying blackmail that only a deter-
mined government effort could have any real results.
LATIN AMERICA
12. Uruguay prepared to assist in defense of Costa Rican sovereignty:
in case of
any acts against the sovereignty of Costa
Rica," 'Uruguay "is ready to assume all
the responsibility which is hers within
the -sccipe of the legal instruments uniting the American republics."
Uruguay is also prepared to seek Latin
American support for a declaration to this effect in the Council
of Organization of American States (OAS).
Comment: There are numerous reports
that an attempt to overthrow the Figueres regime in Costa Rica
is imminent.
Chile has also offered resolute" sup-
port for Costa Rica in the OAS�
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Effective OAS action to protect the
Costa Rican government might be impossible' since the anti-
Figueres governments would probably either try to justify their
involvement in any attack as a defensive action or claim that any
move against Figures was an internal revolt.
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