DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000600070001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 9, 2016
• Document Release Date: April 18, 2001
• Sequence Number: 1
• Publication Date: November 30, 1951
• Content Type: REPORT

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SECURITY INFORMATION
30 November 1951
CIA No. 49439
Copy No.14 s
DAILY DIGEST
*ARMY Declass/Release Instructions On File*
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence. It does
not represent a complete coverage of all current reports in CIA
or in the Office of Current Intelligence. Comments represent the
immediate views of the Office of Current Intelligence.
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BECVRM INFORMATION
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SECTION 1 (SOVIET)
3.
USSR. Kosvgin visit to Tashkent related to poor cotton harvest: The
US Embassy in Moscow believes that the presence of A.! N. Kosygin at
the 7 November celebration in Tashkent may be related to difficulties
encountered with the cotton harvest in the Uzbek SSR. The Embassy
observes that Kosygin, as Minister of Light Industry, is probably the
Politburo member most concerned with the cotton harvest, which is
closely connected with the development of textile production. This
action recalls a similar visit of trouble-shooter Kaganovitch to the
Uzbek 25th anniversary celebration in Tashkent following a bad cotton
year. (R Moscow 506, 23 Nov 51)
RUMANIA. Rumanian labor frozen: A 20 November decree by the Rumanian
Government places new restrictions on workers' transfers. Management
may now release them from contracts only for specified reasons, such
as conclusion of work, health, transfer of spouse, etc. St:ii penalties
are provided for violating the decree by forging medical certificates
or by hiring workers without proper separation documents; management
may also be penalized for refusing separations where valid reasons
exist. (R Bucharest 222, 23 Nov 51)
Comments The Rumanian regime is attempting to consolidate further
its control over manpower. The creation in April of a General Directorate
of Labor Reserves (OCI Daily Digest, 28 May 51) provided for recruiting,
training and distribution of the labor force; the new decree is directed
at reducing turnover.
YUGOSLAVIA. Yugoslavia appeals for additional financial assistance:
In an informal. appeal to the Tripartite delegations for assistance,
the Yugoslavs estimate that $70-SO million will be needed to complete
the present investment program in addition to the International Bank
loan of 28 million dollars and excluding compensation loans now being
discussed in Washington.
Tripartite delegates believe that the IBRD should provide a second
loan of 30 million dollars, which would leave an additional 50 million
dollars needed to fulfill the needs of the Yugoslav investment program.
(S Belgrade TOECA 239, 26 Nov 51)
Comment: The US Embassy in Belgrade warned ECA officials last week
that Yugoslavia urgently needs additional funds for capital investment
over and above the new IBRD loan.
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Last June the US, UK and France made the assumption that the IBRD
would furnish sufficient capital development funds. The Yugoslav economic
position, however, is such that unless additional capital is provided,
certain key investments will not be completed and production will not be
realized. In the abitence of this production, the trade deficit will not
be balanced without raising by some 35 million dollars the 125 million
dollar ceiling agreed to last June.
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SECTION 2 (EASTERN)
1. SYRIA. Military coup d'etat engineered on 29 November; The day-old
Sian Caine of aruf al-Dawalibi . was arrested earl on,29,November
when the government was taken over by the army under the leadership of
the Chief of Staff, Colonel Adib al-Shishakli. According to the US
Legation in Damascus, the immediate occasion for the coup was the as-
sumption by the deposed Premier of the defense portfolio. Shishakli
apparently believed that his own position was threatened and decided to
force a showdown with the populist Party. (C Damascus 306, 29 Nov 51)
Comments The military coup d'etat in Damascus, an essentially in-
ternal a air, re-emphasizes the dominant position of the Syrian Chief
of Staff, Col. ah.shakli, -who for the past two years"w'ha''riaintained `a behind-
the-scenes control over governmental affairs. his sudden military ac-
tion will probably put an indefinite clamp on influential Populist Party
leaders, who have been attempting to eliminate military control of the
country.
Shishakli is essentially an opportunist, intent on maintaining his.
own strong position in Syria. Since neutralism is strong in this country,
he:is not likely to direct Syria into a closer relationship with the West.
Shishakli has been appreciative of French arms shipments, but annoyed over
the lack of similar military supplies from America and Britain. He is not
believed to be sympathetic to the USSR. He is opposed to a Syrian-Iraqi
Union and has friendly relations with both Saudi Arabia and Egypt.
This coup d'etat, the fourth in the last two and a half years, under-
scores the instability of Syria. Even though the military-controlled
government may, in the short run, prevent Syria from embarking on an anti-
Western foreign policy, the establishment of a dictatorship encourages
further violence.
2. IRAN. Mossade victory anticipated in Iranian Parliamentary elections: The
Iranian Prime Minister has announced that the coming elections will be "free"
and that the government will not support any particular candidate. Neverthe-
less, Mossadeqts National Front, through its sympathizers now established in
the provincial_governmefits, is in a position to control the electoral mach-
inery. The Shah, who reportedly fears that M?ssadeq will allow dissident
elements to enter the next Parliament, has extended support to some of
Mossadeq's opponents among the tribes. (S Tehran 1973, 28 Nov 51)
Comments Iranian tradition and electoral law make it impossible to
hold freelections in the American sense of the word. The coming elections
are unlikely to depart from the traditional pattern. Pressure from the
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3.
25X1 C
25X1 C
army, the landowners. and the British will influence the outcome, but all
indications now point to a National Front victory.. The Shahs fear that the
Communists and their sympathizers may gain a foothold in Parliament is not
unfounded, for the Tudeh Party is reportedly actively attempting to engineer
the elections of its members, disguised as National Frontists, and Mossa-
deq's lenient attitude toward the TuAeh suggests that it may succeed.
Shah seriously depressed over turn of events in Iran; The Shah is
reportedly extremely depressed the resent situation and,
is be eved
1110 1Rb1111 c.v uC vu tine poln- or considering abdication.
have expressed disappointment at the Shah's lack o e ermi-
na i.on and forcefulness .nd have told one of his confidants that, under the
circumstances, there was little that could or would do to sup-
or t the monarchy if it were threatens
25X1 C
25X1 C
25X1 C
25X1A
Comments The Shah is undoubtedly depressed by the fear that the elec--
tioss wl result in an overwhelming victory for the National Front and the
con nt reduction in the influence of the moderate elements. 25X1C
want the Shah to replace Mossadeq with Qvam, who. they consider
wou a more amenable on the oil issue, and their threat to do nothing to
support the monarchy probably represents a last effort to spur the Shah to
some action. However, abdication in the near future is not anticipated.
Prime Minister justifies government's actions by blaming British;
Prime Minister Mossadeq's 25 Novem r roper o Parliament on his rip to
the US was consistently anti-British in tone. Blaming the British for the
failure of the Washington talks and for Iran's economic deterioration, the
Prime Minister emphasized that oil nationalization was only the first step
of the fight to end British influence, and that the government's future
program would be to balance the budget, exploit its oil, and hold free
elections. (C Tbhran 1939, 26 Nov; C Tehran 1935, 26 Nov 51)
Comments Mossad,eq is now in a position where he must raise his anti-
Britissh mpaign.to new heights in order to gain continued support and to
escape blame for Iran's economic difficulties.. His tactics are currently
successful -- Parliamentary opposition has again collapsed -- but they
pose serious problems for Iran's relations with the West. Without rebe-
nues from oil, Iran must have foreign aid if it is not to collapse econom-
ically. Mossadeq has led the Iranians to believe that they will receive
extensive assistance from the United States; if they do not obtain this
aid, Mossadeq may be forced by the strength of nationalist sentiment to
hold the US, as well as the UK, repponsible for his woes. The Prime
Minister is neither Communist nor pro-Communist. Nevertheless,, there is a
possibility that he may, through his current policy, out himself off from
the West..
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6.
7?
INDIA /NEPAL- Indian Prime Minister effects changes in government of Nepal:
According to the Nepalese Ambassador in New Delhi, Prime Minister Nehru o
India was instrumental in effecting the recent changes in the government of
Nepal, which culminated in the ousting of the century-old, hereditary Rana
regime and its replacement by a "popular" government. Nehru was also re-
sponsible for the appointment of-the Nepal Congress Party leader as Prime
Minister. (S New Delhi 1877, 27 Nov 51)
Comment: India has been intimately, though covertly, connected with
politics maneuvers in Nepal since the Indian-supported "democratic" revo-
lution of January 1951- Much of this maneuvering has resulted in lessening
the power of the Rarias and in strengthening Indian influence. India is
increasingly concerned with the security of its northern frontiers adjacent
to Tibet. It may be expected to continue its interest in Nepalese affairs,
possibly to the point of obtaining outright control of their administration.
Growing Indian influence in Nepal may also cause a delay in the open-
ing of a US Embassy there, since Nehru is reportedly unsympathetic to US
aims.
INDIA. Indian Ambassador to Peiping allegedly heads Indian Communist move-
m s A Bri is source in Delhi repoRs a-K.M. Pane ar, Indian
Ambassador to Communist China and member of the Indian delegation.to the cur-
rent UN General Assembly, has assumed leadership.of the Indian Communist
movement. (S Paris Delga 281, 17 Nov 51)
Comments Though Panikkar is known to be inclined toward Communism, it
is unlikely that this report will be confirmed. It probably stems from the
facts that Panikkar recently returned to India and that he has made several
public remarks complimentary to Communist China since his return. Panikkar
himself states that he hopes to be appointed Ambassador to Egypt in the
near future..
THAI LAND. Coup dletat reported: Press reports indicate that a nine-man
pro nal executive commi eeID" composed of leading military personalities
and headed by Army Commander Phin, has assumed control of the Thai Govern-
ment. This committee has announced the return of the 1932 Constitution and
has appointed an "interim cabinet" headed by Premier Phibun. (U US press
reports, 29 Nov 51)
Comment: It appears from these reports that the military element in
Thailand, w ose .influence over the political scene was enhanced following
the abortive coup of June 1951, have now assumed full control of the govern-
ment. While they will probably continue the country's pro-Western foreign
policy and are not expected significantly to alter domestic policy, their
high-handed seizure of power will alienate large numbers of civilian
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leaders and thus contribute further to Thai political instability.
The military committee which now possesses de facto atathority, is
riven with personal rivalries. Jockeying for position by its members
will also cause instability and may eventually lead to an open clash.
MALAYA.. Conservatives may remove Malcolm MaoDonalds The US Consul in
ua a Lumpur notes a , no- s an ng press references to Commissioner-
General MacDonald's popularity among Indians and Chinese, anti-MacDonald
sentiment remains widespread and strong. Both conservative Malays and the
British planter-merchant community oppose him largely because of his kid
gloves policy toward local Chinese. General Briggs told the US Consul in
confidence that his most urgent recommendation to Colonial Secretary
Lyttelton will be the removal of MacDonald's influence from Federation of
Malaya activities. (S Kuala Lumpur 93, 27-Nov 51)
Comments Since MacDonald reportedly does not enjoy the esteem of
Churc here is a strong possibility that he will be-removed in the
near future. His removal, if it occurs, is not likely to be accompanied
by any basic'ohange in British policy, which attempts to balance severity
with suasion.
INDOCHINA. Vietnamese Premier reportedly moderates views on French Unions
Premier ran an Huu arrived in Paris as head o ss country s.delega ion
to the High Council of the French Union simultaneously with an AP despatch
from Saigon quoting Huu as stating he would insist that the French Union
be modeled on the British Commonwealth. Immediately afterward, a Paris
newspaper quoted Huu as denying this report and stating that Vietnamese
independence had been achieved, that he was determined to strengthen the
French Union, and that there was no intention of repudiating agreements
with France. French authorities in Saigon, however, continue to affirm that
Huu did indeed make the remarks attributed to him by the AP despatch. (C
Paris 31L~, 26 and 27 Nov 51)
Comment: Huups "denial" as spelled out above is not necessarily in-
consistent with the position., attributed to him by the AP despatch. The
Vietnamese will attempt, in the name of the French Union, to reduce the
power of. the French to intervene in Vietnamese affairs. With the French
in effective military control of Indochina the Vietnamese have no weapon
but pure diplomacy with which to struggle toward this end.
10. CHINA. Political leaders strengthening positions vis-a-vis military:
Accounts of the proceedings of the recent general meetings of he outhwest,
Central-South and East China regional governments reveal that the principa.l
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addresses were made respectively by Tong Hsiao-ping, Teng Tzu-hui and
Jao Shu-ship. (R FBIS, 27 Nov 51)
Comment;. In each regional government of Communist China, authority
is divi edibetween the military leader of the area, who is usually
Chairman of the military and administrative council and commander of the
Field Army stationed in the region,,, and a political watchdog, who is the
Party's regional secretary and political commissioner of the Field Army.
The three persons named above are the political leaders of their respective
areas? The military leaders of these areas--respectively Liu Po-cheng,
Lin Piao and Chen Yi--would ordinarily be expected to deliver the major
addresses at general meetings of their councils. Although no firm
thesis can be constructed on the basis of this one occasion, it is possible
that the regional political bosses are now definitely superior to the
military leaders,
Ill Students are found "indifferent" to oliticss Chungking radio asserts
that a universa disregard of politics" has been observed among uni
versity,and high school students in two.major cities of the Southwest
region, The broadcast states that the students have defended'this
"indifference" with the argument that they are "very busy" with their
academic assignments, (R FBIS, 28 Nov 51)
Comment.- Only two months ago the Communist authorities publicly
lamented -the "chaotic situation" in education, admittedly the partial
result of excessive mobilization of students for political projects.
The regime has evidently not yet solved the dilemma presented by its
great need for educated personnel and its simultaneous insistence upon
time-consuming political activity, Peiping may thus deprive itself,
in large part, of both well-trained personnel and the support of student
youth,. one of the few segments of society still generally favorable to
the regime,
12, Electronic reconnaisance reveals extensive radar network on China
coast' Electronic reconnaisanee since March 1951 has detected 37 radar
locations in Manchuria and 18 in China Proper. TAese provide an almost
complete early warning system along the China coast, from Canton to
Antung. In addition, there is a "picket ship" operating in the Shantung
Peninsula-Dairen area which is used to extend the detection range of the
coattal system, Possibly other vessels along the China coast are also
equipped with early warning radar sets.
Most of the radar detected in China is used to give early warning
of appro:chi:g aircraft. Gunlaying radar (to improve the accuracy of
anti-aircraft fire) is located at Dairen, Antung and possibly Shanghai.
(TS.FEAF, IR-93-51, 30 Sep 51)
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Comments There were few known radar sets in China before 1951,
This report, which is undoubtedly incomplete, indicates how the use of
radar for defense of the coast of Communist China has expanded.
13. KOREA. UN carrier-based aircraft attacked by enemy jets on east coast:
On 27 November, four UN carrier based aircraft were attacked by two Com-
munist NIG-15 jet aircraft north of the east coast city of Wonsan,' Some
damage was inflicted on one UN plane..
The Far East Air Force observes that since the UN aircraft were
engaged in a rail cutting mission, this enemy interception may indicate
an "increased sensitivity to naval interdiction of rail traffic in this
area." (S FEAF AX 7226, 28 Nov 51)
Comment: A more serious implication to be derived from this latest
enemy n terception of UN aircraft is that the Communist air force has
now begun to expand its air defense activities over the Korean east coast.
14, ROK Government attempting to silence opposition presst The US
Military ttache in Pusan reports that the ee Government's attempt to
silence the-opposition press threatens to become a major issue in the
ROK." Indignation among members of the press and the opposition
Democratic Nationalist Party (DNP) is mounting over the recent indictment
of the editor and a reporter of a DNP-controlled newspaper. The Government
contends that the paper printed information "conducive to pyschological
,panic" and "injured foreign relations",of South Korea. (S Pusan Weeka 16,
28 November 51)
Comment: The charges against the opposition newspaper are reported
as being extremely weak. Moreover, the indictment is based on laws
imposed by the Japanese during World War II and clearly violates the
spirit, if not the letter, of the current constitution.
15, Pr oduction.gooperatives organized in North Koreas Production co-
operatives were organized in North Korea on 6 November 1951 for the pro-
duction of civilian living necessities, according to Radio Pyongyang.
Created to "raise the mateFial and cultural life of the people by raising
the quality'and quantity of production," the establishment of these co-
operatives should be completed by the end of November, a full month ahead
of"schedule. This system has reportedly resulted in an increase of 200 to
400 percent in the production of textiles and foodstuffs and greatly "over-
fulfilled" quotas in other consumer items. (U FBID, 28 Nov 51)
Comments There is ample evidence of the serious deterioration in
the living standard of the North Korean civilian population. The strengthening
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and emphasis placed on these cooperatives may be interpreted as another
attempt by the Communists to alleviate this grave problem.
16. South Korean Ambassador to Ja an recalleds ROK Foreign Minister
Pyun a vised assa or Muccio on 28 ovember that the South Korean.
Government has decided to recall Ambassador Sihn Sung-mo, Chief of the
ROK Mission in Japan. The Embassy has learned informally that the chief
prosecutors involved in the National Defense Army scandal and the Kochang
Massacre trials left Pusan for Tokyo on 19 November presumably to investi-
gate Sihn's involvement in the scandals. (C Pusan 494, 28 Nov 51)
Comment; Sinn was forced out of his previous office of Defense banis-
ter large y due to momentary presidential pique over his alleged responsi-
bility for the scandals. As one of South Korea's most powerful political
figures, Sihn has disdained for several months, probably with Rheets tacit
approval, invitations to return home to testify at the scandal trials. Pre-
sumably sufficient pressure has now developed to force Rhee's hand and order
Sihn's return?
17. JAPAN KOREA, Korean Government claims island in Ja an Seas The US Embassy
in san reports that an officia spokesman of the ROK Government claimed,
via the local press, that_Takeshima Island belongs to Korea. The press re-
lease was inspired by a report indicating that seven Japanese correspondents
had visited the island and asserted it belonged to Japan. (P Pusan 495, 28
Nov 51)
Comment; Takeshima Island consists of an uninhabited group of rocky
islets in t e Japan Sea, lying approximately midway between Japan and Korea.
Despite an official ROK request to include Takeshima among the group of
islands renounced by Japan in the peace treaty, this was not done--a de-
cision undoubtedly considered final by the Japanese. The islands were in-
corporated into a Japanese prefecture in 1905, but Korean claims were stimu-
lated by the fact that they were specifically excluded from the SOAP 1946
definition of "Japan."
18. JAPANO Ja an to be uto ado t Western export control procedure: Massy Faris reports t at, at the 26 ovem or meeting of t e Coordi-
nating Committee on Export Controls (C?COM), the German delegate withdrew
his proposal for Japanese membership, Instead, the Committee appeared to
favor having the question of Japan's export controls taken up with Japan
by the US, which would attempt to persuade Japan to adopt COCOM policies
on exports to Communist areas, (S Paris 3172, 27 Nov 51)
Comment.- Current export controls in Japan are more rigid than those
applied in the Western European nations, It is expected that Japan will
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adjust its control policies in the post-treaty period to conform with the
more liberal attitude of the COCOM participants.
19. Electrical Workers to o on nationwide strikes The AU-Japan Elec-
tricalorers Union decided on 28 November to go on full strike for an
indefinite period starting 1 December. The union has been conducting par-
tial work stoppages for the past week in an unsuccessful effort to gain a
50 percent wage increase. (R FBI Ss Tokyo Jiji 29 Nov 51)
Comments & Electric power shortages are the primary deterrent, to an
expansion of Japants industrial output. This strike; which will not affect
Occupation installations or production for the Korean war, is serious enough
to require'possible government intervention. The government, in a similar
strike last December, took the position that any serious interference with
the economy would be illegal.
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SECTION 3 (VVTERN)
GENERAL. Western European estimates of defense.ec enditures fall short: of
propose figures.-. The Western European countries recently submitted
estimates of their defense expenditures (including US aid) for the current
fiscal year to NATO's Temporary Council Committee, which is reassessing .
their politico-economic capabilities. The following tabulation shows hoer.
these estimates compare with previous US estimates of what those expenditures
should be:
ESTIMATED DEFENSE EXPENDITURES FOR 1951-1952
(in millions of dollars)
Previous US estimates
of desirable levels
Country estimates
of probable levels
Differences
jpercent)
Belgium
375
100
+ 7
Denmark
120
102
15
France
3100
2340
- 25
Italy
1005
all
- 19
Netherlands
165
395
- 15
Norway
1J.0
98
- 30
United Kingdom.
4270
4000
- 6
American officials in Paris have warned that even after proper allow-
ances are made for the different bases -- such as price levels -- used in
calculating the figures above, the remaining discrepancies are so great that
the various national estimates should not be considered merely as initial
negotiating positions which can easily be brought up to levels desired by
the US.
In view of their growing economic difficulties, the European countries
involved will probably lose their earlier optimism and refuse to make
substantially larger commitments to the defense effort than those now sub-
mitted, This, plus the publicized US intention not to increase economic
or military aid to Europe in the current fiscal year, makes sizeable modi
fications ,in NATO.plans most probable. (Factual data frormw TS Paris REPTO
5712, 15 Nov 51)
Showdown on the European Defense Community in sight: The Foreign
Ministers o e countries participating in -he European Army Conference
concur that unless basic agreement is reached before the January NATO Council
meeting, the plan had best be abandoned,
The Netherlands Ambassador in Washington, who received this report
from the Dutch delegation at the recent special, ministerial conference on
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the European Army, believes a crisis may be developing because the Foreign
Ministers have only now recognized the "real sovereignty issues involved."
(S to Rome 2467, 28 Nov 51)
Comment: The Benelux countries have voiced strong opposition to recent
French auments that political union is essential to the European Army
concept. Should the European Defense Community fail to materialize, German
rearmament and all phases of European integration would be further retarded,
3. US interests considered harmed by impact of sensational ,journalism
on Western uroe: The US dele
ate t
th
g
o
e UN Generalsebl dldt
Asmyecare a it would be "difficult to exaggerate the unfavorable impacts of sensational
American journalism on French public opinion and warned that the proposed
reprint in French of the Collier's Atomic War issue would be harmful to US'
interests abroad. In urging the discontinuance of this project, the delegate
statt1 that unfavorable agitation about the article continues to grow and
that a protest is being raised in a General Assembly committee against the
magazine's use of the UN flag and symbol. At the recent Council of Europe
meeting,. French Socialist leader Guy Mollet told US' Congressmen that such
lurid journalism, epitomized by the Collier's issue, "could only serve
Communist propaganda ends and increase European tensions," (C Paris DELGA
)400, 28 Nov 51)
Comment:. This latest statement corroborates and strengthens earlier
reports from the US Embassy in Paris of the depressing and confusing effects
upon informed public opinion in Western Europe of sensational US articles on
war. It is probable that translation and greater circulation of any articles
describing the horrors of a third world war would revive the trend toward
neutralism in France and would continue to aid the Soviet peace campaign
by associating the US with war mongering, These articles are particularly
ill-timed in view of the lukewarm French attitude toward costly rearmament.
GERI!,ANY. West Germans pressing for UN-unity hearings: Chancellor Adenauer
is report. 'to be par c ar y disturbed by the latest East German unity
election proposals, He is anxious that the Allied dele
ati
t
g
ons a
the Paris
UN meeting support a resolution giving West Germany a hearing before the
ad hoc committee on conditions for German unity. Adenauer declares that
he will need maximum UN support to counteract these East German proposals
and preserve the West German anti-Grotewohl front of the coalition and major
opposition parties. (S Paris DELGA 388, 28 Nov 51)
Comment: On 26 November the East German commission for all-German
electionion fos ormally outlined the principles for the drafting of an election
law. These principles acknowledged East German assent to some of the
conditions which the West German Government declared must be met before all-
German elections could be held,
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Adenaue r e s plea for a German hearing at the UN will not be very favor-
ably received by all the Allied delegations, since some of them feel that
this would complicate current German contractual and European defense
negotiations.
5. FRANCE. French Union High Council will not consider Chinese internees:
Repatriation o Chinese Nationalist roops from In ochina will not appear
on the agenda of the High Council of the French Union because of General
de Lattre's strong objections. According to a French Foreign office spokes-
man, however, this decision may be reversed if French need for Chinese
support in the UN makes such action desirable. (C Paris 3176, 26 Nov 51)
Comment: The French will be anxious to avoid any discussion of the
interned Chinese as long as'the Korean negotiations are in progress. If a
settlement is reached in Korea, the resulting relationship of Communist China
to the UN will probably determine the French attitude.
AUSTRIA, West East transit shipments through Austria decrease: Statistics
recently made available: by the Austrian Federal ailways show that shipments
of Western goods, probably including embargo items, transiting Austria by
rail to Eastern bloc destinations are levelling off at a sharply reduced
volume. While transit shipments of 11,212 metric tons in July represented
a slight increase over the figure for May, the July total is little more
than one-third of the monthly average for the period from November 1950 to
May 1951, and less than one-half the total shipments in February, when the
monthly figure fell from 414,000 to 28,000 metric tons.
Italy and Switzerland remained the primary sources. of goods reaching
Eastern orbit countries via Austrian railways. French, Belgian, Dutch,
British, and.Turkish shipments were insignificant in quantitative terms,
and French shipments through Austria were only one-tenth of the previous
November May average, Hungary and Czechoslgvakia received the largest
amounts of Western goods. It should be noted, however, that the bulk of
Italian shipments to Hungary in July (4,390' metric tons) was apparently
fertilizer.
While Austria is only one of a number of transit areas for East-West
trade and Austrian railways only one means of transport, the sharp decline
in the volume of such shipments may be an indication of the declining availa-
bility of Western goods for Eastern shipment and/or a measure of effectiveness
of Western trade controls. The consequences for the Satellite countries of
the declining volume.ofWestern goods may be responsible for reported efforts to
cooi'nate Satellite procurement activities in Vienna and to make increased
use of Soviet.--controlled trade agencies in that city. (Statistical data from:
Intelligence Summary No. 333, Hqs, USFA, 114 Nov 51)
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ITALY. the Dismissal. as of and surplus workers continues in Italian hear induct :
non-Zommurxist labor unions ermina e a strike
on ) November at the Breda works at Sesto San Giovanni, Milan, and have
accepted the dismissal of 3,000 workers, of whom 250'. are, to be rehired
between February and June next year, Of the remainder., 1,500 will receive
retraining courses under the Ministry of Labor,
The Communists and the left-wing Socialist papers claimed that the
strike had some good results, but that the strikers were "compromised" by
the stands taken by the Italian Confederation of Labor Unions (CISL), which
first accepted the original terms offered by the managements (S Rome.
Joint Weeka 1i 7, 2L Nov 51)
Comment: The dismissals at Breda illustrate the unutilized Italian
economic pootential for defense production. The amount of idle industrial
plant capacity is particularly important in the armaments and munitions
industries.
Another important aspect of the strike at Breda is the fact that
apparently the pro-government labor union, CISL, again unwittingly forced
the moderate Socialist-labor unionists into joint action with. the Communists.
8. SPAIN. Apathy pervades first of series of municipal elections: The IF
fm Massy in Madrid reports that the na ions-w-ide municipal elections of
councillors representing heads of families took place. on 25 November,
apparently without major incidents. The Spanish press reported that 80 to
90 percent of those eligible voted but admitted that only about 60 percent
voted in certain northern areas.
There was a general lack of interest and the large vote was probably
due chiefly to a radio announcement urging retention of certificates of
having voted for use.in renewing ration cards, The Embassy concludes that
most Spaniards view voting in this election as a chore and a necessary
.precaution against government sanctions, (C Madrid 550, 26 Nov 51)
Comment: This was the first in a series of three nation-wide elections
of new mun cipal councillors. There will be elections on 2 December for
councillors representing the Falange labor syndicates and on 9 December
for representatives of economic, cultural, and professional entities. Only
government-approved candidates may run, no campaigning on partisan lines
is permitted, and the electorate is restricted,
Tl Basque clandestine radio has urged Spaniards to show their contempt
for the Franco government by not voting. The lighter vote reported in
northern Spain may be attributable to Basque nationalist propaganda.
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9. NORWAY-SPITSBERGEN. Soviets to extend shipping activities until mid-
December: the Soviet 25X1C
o -icz s sere Have ec are they will continue shipping to and from the
archipelago until 15 December. This will necessitate the use of icebreakers,
since Spitsbergen usually becomes ice bound by 15 November.
25X1A 25X1A
Comment: The sicance of this decision is unknown., However, if the
Soviet urpose is other than the support of its legitimate commercial
interests in Spitsbergen, it is doubtful that they would have notified the
Norwegian authorities of their decision. Also, it has been previously
repo rted'that (1) shipping to Spitsbergen continued until late November in
1948 and during that winter the Russians requested additional navigational
.aids to continue shipping in the area :of their claims, and (2) the Soviet
icebreaker Leningrad (10,000 tons) was in Spitsbergen waters throughout the
winter of 1 , While ice conditions normally terminate shipping to
Spitsbergen by mid-November,`complete icing precluding entrance to the Isfjord
(main bay on which Soviet and Norwegian mining claims are located) does.not
usually take place until early January,
10, UNITED KINGDOM. Israeli request to finance pipeline o osed: Both the UK
ffMn o Fuel and Power and the British oil companies have agreed that
construction of a pipeline from Elath, Israel, on the Gulf of Agabo,to Haifa
is not a commercially attractive proposition, Oil transported by such a
pipeline would cost only a shilling less per ton than oil transported through
the Suez Canal. In addition, the Foreign Office is not inclined to take
the political risk involved in supplying the Haifa refinery with Persian
Gulf oil in the face of strong Arab opposition. (C London 2512, 27 Nov 51)
Comment:: Israel felt that the closing of the Abadan refinery would
prove a goo! talking point for the construction of this pipeline, which
would permit the full-scale operation of the Haifa refinery., However., the
British Government-.s reluctance to antagonize the Arab world further by
supplying Middle Eastern oil to a refinery in Israel has already been shown
by its refusal to send British tankers through the Suez Canal with oil for
the Haifa refinery, despite its present military control of the canal zone,
11, Japanese Peace Treaty ratified amidst criticism: The bill
ratifying the Japanese Peace Treaty has pass the hr and final reading
in the House of Commons. The. US Embassy in, London comments that possibly
.100 Labor MPTs'were opposed to ratification and that the majority of these
abstained at the second reading in order to avoid committing themselves.
Many members of both parties who later voted for ratification indulged in
vigorous criticism for the record. This criticism was generally directed
at the treaty's lack of safeguards against a resurgence of Japanese trade
competition.
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The Bevan group based its opposition on claims that the treaty had
been dictated by the US and would handicap a general settlement in the Far
East, Former Foreign Secretary Morrison, however, emphasized that there
was a clear understanding with the US that the Japanese were to decide their
own relations with China, (U NY Times, 29 Nov 51; R London 2517, 27 Nov 51)
Comment.- A division forced at thQ second reading had resulted in a
382 to vote favoring ratification.
The debate suggests the prevalence in Britain of the belief that
Japanese economic revival is likely to be rapid and expansive* The fact
that British textiles and pottery interests have already experienced mild
Japanese competition appears to have strengthened this belief, On the other
hand, the Churchill government has as yet given no indication of unusual
concern,.
12, MEXICO. US' Embassy foxesees 'possibility of Mexican neutrality in event of
wor war: In commenting upon the acceptance speech or Adolfo Ruiz ortines
as pres ential candidate of the official administration party for the July
1952 elections, the US Embassy in Mexico City states it would seem that
Ruiz Cortines, if elected, will not deviate from Alemants foreign policy,
Hence, in all probability, as far as we can now envisage, Mexico's attitude
towards the free nations in the fight against the growing danger of Soviet
aggression will continue to be one of cautious detachment, That Mexico may
decide to remain neutral and play the part of a mediator in case of a world
war should not be' overlooked," (C Mexico City D-968, 15 Oct 51)
Comment: Ruiz Cortines is virtually assured of the presidency for
the term 752-195$9. As a reputedly honest but colorless politician who "has
never outshone his political sponsors," who has been trusted "never to make
any move without consulting his political leaders," and to whom party
loyalty is the chief concern, he will probably be prone to follow con-
ciliatory policies which will preclude strong support of the U5 in inter-
national affairs. The recent election of a Mexican, Luis Padilla Nervo,
as President of the UN General Assembly increases the possibility that Mexico
may choose to remain aloof from international conflicts,
134 PANAMA. Communists involved in student strike: Colonel Antonio Remon,
former police chief., expresse to Ambassador iley the belief that all the
elements of the political opposition to his presidential candidacy, including
at least some Communists, were supporting a current student strike in
Panama, Colonel Remon also stated that the Communists who were involved
were being supported not only by money left in Panama by Guatemalan ex-
president Arevalo, but also by funds being supplied from Cuba, Ambassador
Wiley comments that in the situation as a whole the only element of strength
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which he can see is the Communist leadership, and that it alone seems to
him to know what it is doing and why;
Comment: Ex-president Arevalo is believed to have contributed money
to either `Communist or nationalist elements in Panama for the anti-Remon
compaign. There has been no previous indication that funds are being supplied
from Cuba.
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SECURITY INFORMATION
S/S CABLE SUPPLEMENT
TO THE DAILY DIGEST
10 November 1951
CIA Nog 49439-A.
Copy No.
45
Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence. It does
not represent a complete coverage of all current reports in CIA
or in the Office of Current Intelligence. Comments represent the
immediate views of the Office of Current Intelligence.
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 SECTION 2 (EASTERN)
1. SOUTHEAST ASIA. British considering Southeast Asia defense problem:
According to the Foreign Office, the problem of the defense of Southeast
Asia is being reconsidered within the British Government. It is realized
that obtaining the most competent military advice is a prerequisite to high
level political consideration. The current thinking is that the US and UK
should exchange views before the French are consulted. A formal defense
arrangement, such as an extension of the Pacific Pact, is considered pre-
mature at this time. (TS S/S London 2].67;' 28 Nov 51) .
SECTION 3 (WESTERN)
2. GE. SHAPE progress report presented to NAC Meeting: In a SHAPE report
to the North Atlantic Council Meeting in Rome, General Gruenther gave the
following estimate of the readiness and effectiveness of NATO forces:
Required to Contain Forces as of Forces as of
Soviet Thrust 31 Dec 51 31 Dec 52
Ground force divisions on
D-day 46 24 30
Ground force divisions on
D ~ 30
97 44 55
Aircraft 7600
1580 3250
Present NATO ground forces are not fully effective, however, due to
deficiencies in training and equipment; and the air force suffers from
shortages of spares, pilots and airfields. Of the 51 airfields promised by
the end of 1951, only 16 are now operational; but 35 are expected by March
1952.
If war occurs before NATO forces have grown adequate for containment, an
emergency plan exists for the use of present forces. The role of navy
carriers was emphasized, particularly in the operation of the emergency plan,
A total of 16 carriers is needed to operate in NATO waters. (TS 6/S Rome 88,
27 Nov 51).
Comment: Highlighting of present NATO deficiiicies in this report has
led to a resolution that the special Harriman committee on reconciling
economic capabilities with military requirements submit its report sufficiently
in advance of the expected February council meeting to permit action by govern-
ments at that meeting.
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UNITED KINGDOM. Libyan, independence prior to 1 January unlikely, The UK
Foreign Office considers it probably impossible to have arrangements for
Libyan independence completed before 1 January 1952. The UK hopes, however,
that agreement will have been reached by then for an interim military arrange-
ment with the federal government of Libya so that its signature can immediately
follow achievement of independence on that date. Possibly the general treaty
of alliance between the UK and Libya will also be ready for signature at the
same time. (S, S/S London 2490, 24 Nov 51).
Comment: The UN General Assembly resolution specifies 1 January 1952
as the date for Libya to attain its independence. However, some efforts had
been made to accomplish this earlier.
With the end of the British administration their influence will still be
maintained through the continued presence of British troops and through a UK
guarantee to.underwrite the budgetary deficit of the federal government.
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