DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000400190001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 12, 2016
• Document Release Date: January 7, 2002
• Sequence Number: 1
• Publication Date: September 20, 1951
• Content Type: SUMMARY

Approved For Relei 2002/05/20: CIA-RDP79T01146A0000190001-8
TOP SECRET
2.0 September 1951
.CIA No, 49349
Copy No.
DAILY DIGEST.
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.
State Dept., USAF reviews completed
TOP'S9CRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For Rely 2002/05/20 : CIA-RDP79T01146A00Q4Q0190001-8
TOP SECRET
SECTION 1 (SOVIET)
USSR, Air defense readiness noted in Vladivostok: Crew members of a B-29
who participated in a nightmission in northeastern Korea on 25 August sta-
ted that while they were within sight of Vladivostok all the city and port
area lights were blacked out simultaneously. The ability of the USSR to
black out all the lights in a critical area simultaneously has been noted
elsewhere and denotes a high degree of air defense readiness.
The crew also noted ten aircraft, believed to be single-engine jets,
which took off in pairs from an unlocated airfield and followed the bomber
for approximately half an hour at a distance of three to five miles. (S
US Air Force Far East AX 3189, 16 Sep 51)-
Comment: The interceptor aircraft appear to have risen either from a
Soviet airfield near the Korean border, on which no planes were known to
be based, or from a North Korean field just below the border, previously
believed to be inactive and unsuited to jet operations.
There is previous evidence that the USSR has reacted to UN air activi-
ty in northeast Korea near the Soviet border.
2. Soviet scientific institutions reprimanded: Certain Russian scien-
tific institutions recently have been criticized in the Soviet press for
not having participated aggressively enough in solving various urgent prob-
lems relating to the development of industry and agriculture,
The Machine Research Institute of the USSR Academy, of Sciences was
accused of failing:to produce new calculating methods for large machinery
"components" to which existing methods no longer apply. The Institute of
Automatics (Automatika) and Telemechanics was called to task for not giving
sufficient time to solving certain tasks relating to the automatic workings
of the Volga end Dnieper power stations. The Institute of Mining Affairs,
of Mechanics, and several other scientific institutions of the USSR Academy
of Sciences' Department of Technical Sciences were berated for being "too
loosely linked with industry." (R YBID, 17 Sep 51)
Comments This criticism of Soviet scientists is an indication that
technological progress in the Soviet Union is not proceeding at a pace
rapid enough to satisfy the demands of the Kremlin. Of interest is the
reference to the Volga and Dnieper Power Stations, where construction is
evidently slower than had been expected..
TOP SECRET
1 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 30
Approved For Rele 2002/05/20 : CIA-RDP79T01146A00040190001-8
TOP SECRET
FINLAND. Inclusion of Communists in new cabinet unlikely: The US Lega-
tion in Helsinki reports that inclusion of Communists in the new cabinet
is very unlikely. According to the legation, the present Social Demo-
cratic-Agrarian coalition is expected to form the basis of the new cabinet
with representatives from the Swedish Peoples' Party and possibly from
the new National Party. (R Helsinki 133, 18 Sep 51)
Comment: The new cabinet is being formed as a result of the National
Diet elections in July in which the Socia-T emocrats won 53 seats, the
Agrarians 51, and the Communists 43. The Communist Party, though likely
to be excluded from the cabinet as it has been for the last three years,
will continue to be a potentially disruptive force in the Finnish politi-
cal scene.
4. POLAND, India bars seamen from Polish liner: The Polish liner Batory is
reported to have sailed from Bombay to England without the Indian seamen
who had been signed on. The Indian Government refused the seamen permis-
sion to sail contending that working conditions aboard ship were unsuit-
able for Indian sailors and that the Polish line would not deposit enough
advance wages.
It is also reported that members of the non-Communist Bombay Seamen's
Union staged a protest demonstration in objection to the Batory signing on
men only from a rival communist union. (U NYT, 19 Sep 51)
Comment: The Indian Government's refusal was possibly based on the
fear that the Communist Indian seamen, if permitted to ship on the Batory,
would receive indoctrination and training which would enable them to ex-
ercise an even more disruptive influence among Indian maritime workers
upon their return to India.
TOP SECRET
2 20 Sep 51
Approved For Release 2002/05/20 CIA-RDP79T01146A000400190001-8
 Approved For Rel a 2002/05/20 : CIA-RDP79TO1146AOO. 0190001-8
TOP SECRET
SECTION 2 (EASTERN)
1. GREECE, Plastiras and Venizelos to collar rate in Greek parliament;
General Plastiras, leader of the EPEK party, has told the American Embassy
in Athens that he and Prime Minister Venizelos have decided to collaborate
in parliament, Plastiras believes that such a combination would command 'a
bare majority with 130 to 132 seats in parliament. According to him it was
not yet decided whether the new government should be purely EPEK with Liberal
support, or whether the Liberals should actively participate. Venizelos has
previously told the embassy that he would prefer the former, since such a
government would soon demonstrate Plastiras? utter incapacity to govern.
S. Athens 1305, 18 Sep .51)
C mm n a On the basis of Marshal Papagool plurality he presumably will
be asked to form a government. Papagos does not have a majority in parlia-
ment, and there are no indications that he will attract enough deputies from
the opposition parties to form a government, ; Venizelos-Plastiras combi-
nation would be highly unstable because of Plastiras' leftist views, the
widely divergent policies of the two men, and the attacks that could be ex-
pected from the Papagos plurality.
2. I 'RAVEL. is refi.ses to con is er ~TOr,osml a r drab Israel i ~,a
$t`e CY?AA
Israel's representative to the Palestine Conciliation Commission
meetings in Paris has informed the chairman that Israel is still not pre-
pared to receive the commission's proposals for an Arab-Israeli peace agree-
ment. The Israeli representative maintains that the PCC should restrict it-
self to the choice of agenda items, leaving the actual negotiation of so-
lutions under the agenda items to the Israeli and Arab representatives them-
selves.
According to the Israeli representative, his government can not "give"
anything in the course of the negotiations and has in fact withdrawn its
original offer of repatriating a certain number of Arab refugees, The com-
mission chairman comments that there is little hope for success of the current
meetings in Paris if Israel continues to object to further suggestions for
solving the Arab-Israeli disagreements. The chairman further states that
Israel's attitude is hurting the commission's relationship with the Arab dele-
gations, who are now more favorable toward the commission's position than at
any time in the past two and one half years, (S Paris 1698, 18 Sep 51)
Somas Israel's unwillingness to cooperate so far in the meetings of
the commission is partly due to its annoyance at the Arab refusal to meet
with the Israeli representative around the same table. The frank admission
that Israel has no real concession to "give" to the Arab States offers little
hope that the meetings in Paris will achieve any substantial success.
TOP SECRET
3 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For ReleaW 2002/05/20 : CIA-RDP79T01146A000400190001-8
TOP SECRET
3. TURKEY, Results of Turkish b e ectio: Incomplete returns from Sunday's
by-election cate that the incumbent Democratic Party won 18 of the 20
available seats. According to press reports, about 50
eli-
gible voters participated, (R Ankara 259, 17 Sep 51) percent of the en s The overwhelming victory of the Democratic Party appears to
indicate general approval of the u
months agog party u
program since it took office 14
4. I ? Brill B nk ~-, Ir m On 17 September Iranian Prime Minis-
ter Fatemi announced that authorization to deal in foreign exchange would be
withdrawn from the British Bank. A British spokesman expressed the opinion
that if the measure is carried out the bank will cease operations in Iran.
(R Tehran 1056, 1?3 Sep 51)
C n The British Bank, the oldest bank in Iran, deals mostly in
foreign exchange but holds about one-third of the private deposits. With-
drawal of foreign exchange privileges leaves the Iranian National Bank as
the only bank which can deal in foreign exchange. If the British Bank is
liquidated its capital--which by law must be deposited in the National Bank--
must, by the same law, be refunded to the investors.
5. INDI. Ch1nA.qo
Chinese Communist Purchasing mission
i
arr
ved in Bombay on 16 September to
arrange for the dispatch from India of 20,000,000 yards of cloth and 5,000
bales of yarn in return for the half million or more tons of Chinese grain
purchased by India to relieve its 1951 food shortage. (R FBID Far East, 17
Sep 51)
omm nts The Indians have been reticent about publicizing the terms
of their 1951 agreement for the purchase of Chinese ain.
first indication that cloth and yarn were among the commoditiesstosbehex-
changed.
6.
IN O SIA, strikes in vi+fl~
withdnfl~m8 The Minister of
Labor announced that the strike and lockout ban in vital industries has been
withdrawn and that a new law on the solution of labor disputes was proclaimed
on 17 September. (R FBID Djakarta, 18 Sep 51)
nts The strike ban was proclaimed last February. The present
government, which assumed office in April, promised to repeal the ban and to
replace it with effective labor legislation, Since the Indonesian labor
movement is largely dominated by Communists, it is highly unlikely that the
new law can be so administered as to avoid a renewal of costly strikes.
TOP SECRET
4 20 Sep 51
Approved For Release 2002/05/20: CIA-RDP79T01146A000400190001-8
 Approved For ReIe 2002/05/20 : CIA-RDP79T01146A00Q0190001-8
INDOCHINA. French censor, oresumed slight to General De L tre: An editorial
praising the "political victories" won by Premier Tran Van Huu during his
current visit to the US which appeared in the morning edition of the leading
Vietnamese-owned newspaper in Saigon was altered on the orders of De Lattre's
Chief of Cabinet. The afternoon edition carried a blank space in the place
of the original passage which had suggested that the purpose of General De
L attre's visit to Washington is to supplement, in the military sphere, the
political achievements of Premier Huu? (C Saigon 647, 17 Sep 51; R Saigon
6469 17 Sep 51)
C s Although the praise accorded Premier Huu in the above-mentioned
article is grossly out of proportion to Huu's mission or achievements in the
US, the action of the French authorities appears to show a rather extreme con-
cern for the prestige of General De Lattre who is, in fact, visiting the US
at the invitation of the Joint Chiefs of Staff, not primarily as a diplomat.
To the Vietnamese, censorship of this sort belies the French contention that
they are concerned only with military censorship.
25X1 C
8. CHII .
I
25X1 C
25X1 C
Chinese Communist military conference in Peiping in early. Auguste The par- 25X1 C
ticipants allegedly resolved to
(1) expand, train and equip Chinese military forces totaling
five percent (about 22.5 million) of the population by 1953,
(2) continue preparations for the liberation of Formosa,
(3) increase assistance to the Viet Minh, and
(4) study and discuss-conclusion of an "Asian People's Revolutionary
Military Alliance Agreement."
25X1 C
25X1A
n s While Chinese forces could conceivably be more than doubled
by 1953=from the present nine million (including 5.5 million poorly-equipped
and poorly trained militia) to more than 20 million--it is most improbable
that such a number could be properly trained and equipped in that time.
The Peiping regime has openly been preparing for the Formosa operation,
and has reportedly been increasing its aid to the Viet Minh for the past two
years,
Finally, omission of reference to Korea makes the whole report im-
plausible.
TOP SECRET
5 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For4wease 2002/05/20 : CIA-RDP79T011460400190001-8
1
TOP SECRET
25X1 C
25X1 C
LD/\ I li
M 8
9. pNAo paratroop divisions, total-
four
here divisions are in Chiamu.ssu
n
and one is in Mutanchiang (bo
ing 20,000 men, are n c ur a. o
northeastern Manchuria).
th i
25X1A
25X1A
25X1 C
11. Ch u E ? ai no 'Jila au 0?
Chinese Communist Premier Chou Enmlai chose the 20th anniversary of
the Mukden Incident for a lengthy denunciation of the San Francisco confer-
ence and the USmJapansecurity pact. charges that
"contributed the most" to Japan's defeat,
the peace treaty is designed to "revive Japanese militarism," is an "ex-
pression of animosity" toward Communist China and the USSR, and "threatens
the security of Asia." Both the treaty ende the pact.n werehdescribed
as evidence of US preparations for an "aggr ev
claimed that the "Chinese people" are willing to join with peoples every-
where, especially in Asia to meet the threat of "Par Eastern war expansion."
(Ft FBID Flimsy, 18 Sep 511
C mm n s: The Chinese Communists feel sufficiently strongly about the
Chinese contribution to Japan's defeat to have refused to credit the Soviet
claim to the greatest contribution, and in this particular statement Chou
did not mention the Soviets at all. However, this pronouncement adds
little to Peiping's propaganda regarding Japan for the p suggests the
vague reference to concerted action among Asian peoples again augg
possibility of an Asian conference--which would now be an almost solely
Communist affair--on the problem of an allegedly resurgent Japan.
TOP SECRET
Comme is Chiamussu has often been reported as a major paratroop school,
one report claiming that US2AirOForce aintelligence currently believesmtha ssome
school by March 1 1951.
20,000 to 25,000 Chinese Communist troops have received parachute training.
6 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For Rel& a 2002/05/20 : CIA-RDP79T01146A00QA00190001-8
12. Nat onalist guerrillas raid China mainland towns According to an
AP dispatch from Taipei, seaborne Chinese Nationalist guerrillas on 13
September raided the coastal town of Hsiaocha, located on the China main-
land forty miles northeast of the Nationalist island outpost of Quemoy,
opposite Formosa. The guerrillas were said to have started their raid
early in the morning with two hours of "sharp fighting"; they withdrew in
the afternoon, taking ten prisoners with them. The inhabitants reportedly
were "overjoyed at seeing the Nationalist flag carried by the guerrillas
and knelt in welcome to them." (U AP Taipei, 19 Sep 51)
Comment; There are no other reports available to confirm this action.
If true, the raid probably was conducted by Nationalist soldiers stationed
on the island of Quemoy. Such a small operation may have been for intell-
igence., propaganda, and/or training purposes. The delay of a week in
releasing this information points up the complaint of the Nationalists
that communications with their island outposts are very inadequate.
This may spur the Chinese Communists to take action to neutralize
Quemoy.
13. American Catholic Brother Jailed ,gr refusal to print Communi
Dronaeandal The former UK Consul General at Tsingtao has informed the US
Consul General at Hong Kong of the arrest of an American Catholic Brother
in Tsingtao solely on the grounds of the latter?s refusal to print an
anti-American article in a Catholic journal which he was publishing.
The US Consul General-comments that this is the first known instance
of the arrest of an American simply for refusal to participate in a
Communist propaganda campaign. (C Hong Kong 1103, lg Sep 51)
C s. This is the first known arrest of an American on these
specific grounds. However,, the usual Communist charges of espionage,
collusion, cultural aggression, etc., in most cases derive simply from
the refusal of US nationals to cooperate with the Communist program.
14. Peiping reports removal of several important functianariess:
Peiping radio has announced the removal from their posts of Wang Chia-
hsiang, Ambassador to the USSR, Nieh Jung-chen, Mayor of Peiping; three
top officials of the Northeast People?s Government, four top officials
of the East China administration, and 11 officials of varying importance
in the Central-South China administration. (R FBID Flimsy, 19 Sep 51)
C ens Both Wang and Nieh were in fact replaced in March 1951.
The other removals may date from the same time, or may be recent. The
Chinese Communists have recently denounced corruption and incompetence
7 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For' ase 2002/05/20 : CIA-RDP79T01146A000400190001-8
TOP SECRET
15.
and Indochina, while o
l t J hr
state employees in the Northeast. Many sources have reported
among Certain China a Peiping's dissatisfaction with tamedaare believeditoa be aserving in Korea
of the Central-South officials named
been purged.
re a
KOREA. root
nP R}+A~ w_ 3 she l i cables , L dur a visit to the U iati"o Ambassador Muccio that during n should enter
on 14 September, President Rhee declared that Korea and Japaan deho was n?
into negotiations to establish friendly heaJaaanese peace treaty does not
ported as declaring that the signing of p
necessarily establish friendly relationsndtha~Drelati 2s oulldS come into
being after direct negotiations are completed.
C mmen s Rhee?s remarks are part of the present ROK sentiment in
favor of a bilateral agreement which the Krans hie on ehentitlther le e themsto
the benefits of the San Francisco conference. negotiations and haggling over the
sees no advantage to entering into the price the Koreans would demand.
? "an+i epidemic camtai -. The Military
16. North Koreanitia
an 18 September
cam-
of the North Korean Govern enforcement of a"a~rinterbroadcast
anti-epidemic
decreed the throughout North organization and Korea. enThe program, to be "carried out vigorously
by all the people," reportedly will "consolidate the brilliant achievements
EruPfive
already made in the spring and summer anti-epidemic apai ai ngns. Er n the
typhus and recurrent fever are two diseases sp ific
decree. (R FBID Ticker., Pyongyang, 18 Sep 51)
to There is ample evidence indicating that an extremely high
incidence of contagious diseases existed in North Korea Tdduri gng the inter
of 1950?51., but no reliable statistics are available. govern-
mental caused by UN bombing, malnutrition and the disorganization of g
mental functions were primarily responsible for last year?s high epidemic
rate.
1d A y, f f ..$ .,~ o ~,o'I i eve NCOS.n, aa. u _
any. Jl'L~t'7.Ne Jaba~ 7 ~,;
Office officials [Jeiirsvc that Prime Minister YoshThese ens
to undertake effective Japanes Se tember statement to the press oppos ng
officials state that Yoshidaes 14 p
rearmament "for the time being" was prompted by a desire not to involve dthe
peace and security treaties in the debate on rearmament, andaalsob y a doubt
that Japan, particularly in the light of undefined peace
has the economic strength to undertake large-scale rearmament at the
present time.
Japanese Foreign propitious time.
e rearmament at a i
TOP SECRET
8
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
20 Sep 51
 Approved For Relea 002/05/20: CIA-RDP79TO1146A000 90001-8
The US Political adviser suggests that Yoshida may desire public
opinon to shift further before advocating rearmament, and comments that
his political wisdom appears justified by the increasing awareness of the
Japanese public, as reflected in opinion polls, of the need for defensive
strength. (C Tokyo 579, 18 Sep 51)
C Yoshida's statement, various interpretations of which drew
unusual attention in the press, actually does not reflect any change from
his cautious pre-treaty attitude toward rearmament.
. series of public opinion polls during the past year indicates
increasing support for rearmament; the latest, taken just after the peace
treaty's signing, showed 76.3 percent in favor of rearmament and only 12.1
percent opposed. The vast majority of those favoring rearmament, however,
think that rearmament should be postponed until the nation's economic re-
construction is further advanced.
It is a moot question whether rearmament solely for defense would
require an amendment of the Japanese constitution's war renunciation clause,
which in,turn would depend upon a popular referendum,
TOP SECRET
9
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
20 Sep 51
 Approved For Reld 2002/05/20 : CIA-RDP79T01146A0004v0190001-8
TOP SECRET
SECTIN 3 (WESTERN)
1. AUSTRIA. Soviet official contends Austrian remilitarization and Trieste
block treaty agreemen : The Soviet political advisor in Vienna informed
Kustrian Foreign Minister Gruber in a recent discussion that Austrian re
militarization and Trieste are the principal obstacles.to a Soviet signature
of the Austrian State Treaty -- which, he observed, his government has
always favored signing. Gruber refused to comment on Trieste, asserting
that it is an issue wholly extraneous to the treaty negotiations. As for
Austrian remilitarization, Gruber replied that the Soviet authorities were
well aware that his country is completely disarmed.
In subsequent conversations with the US Legation, Gruber renewed his
plea for an early meeting of the treaty deputies, for stronger pressure on
theSoviet Government, and for an appeal to the UN in the event of failure.
(S-Vienna 1053, 18 Sep 51)
Comment: The Soviet Union has maintained that the Trieste issue has
blocke conclusion of an Austrian treaty since May 1950. The Austrian Com-
munist press is conducting a violent campaign against the alleged rearming
of Austria by the US and predicting dire consequences from such action. The
allegations of Austrian secret rearmament indicate Soviet desires to keep
Austria outside any Western-oriented military arrangement in Europe.
25X1 C
2. FRANCE USSR. Soviets still in market for industrial diamonds:
25X1 C he head o e Russian Trade Dele-
gation in.Paris has offered a French firm some industrial diamonds of a type
called "old miners," for cash, in order to build up Soviet funds for the
purchase of other industrial diamonds. The Soviet trade head said that the
Paris organization is now responsible for all Russian sales and purchases
of precious stones and metals in Western Europe and supersedes the authority
2 5X1A of the Russian Trade Delegation in Brussels.
25X1A
Comment: The "miners" offered may be of a type that the Soviet diamond
industry cannot use; or the purpose of the offer may be to obtain funds.for
purchasing industrial diamonds which are urgently needed, such as diamond
die stones, a flawless variety used to draw fine wires. In view of the
frequent offers of "miners," the possibility also exists that the USSR is
shifting to the use of drills comparable to the type used in the US, although
there is still a Soviet demand for the old style drills.
Although "old miners" are a type of industrial stone seldom used in
drills by US or Western European industries, their offer is attractive if
the price is right, because the diamonds can be converted to gem stones and
TOP SECRET
10 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For Re$eA 2002/05/20: CIA-RDP79TO1146Ad 0190001-8
TOP SECRET
bort., An April 1951 report reveals the offer of "miners" in Belgium and
the sale of others in the Netherlands, the proceeds reportedly to be used
to pay for Soviet shipping construction on order there.
4
5.
BELGIUM. Increase in price of bread does not threaten government: On
31 ugust, the Belgian Government increased the price of bread from 6.9 to
7.5 Belgian francs per kilogram, At the,satne time the price of domestic
wheat was raised from 430 to 170 francs per hundred.kilograms. This action
is based on the international agreement on a wheat price rise, increased
transportation costs, the government's unwillingness to increase the wheat
subsidy, and the greater costs for Belgian farmers. The US Embassy comments
that, although the government will probably lose some political popularity,
these increases are not likely to jeopardize its stability. However, the
Socialists and the Communists are already using the increase in the price
of bread'as a point of attack against the government." (R Brussels Joint
Weeka 3 6, 7 Sep 51)
Comment: The one party Belgian Government has never been popular,
even among segments of its own political party supporters. An over-all sharp
rise in the cost of living coupled with a sudden increase in unemployment
could cause difficulties for the government.
ITALY. Majority of government workers respond to strike called by all unions:
More than one million government workers participated in a 24-hour nationwide
strike for higher wages on 19 September. The walkout, which was supported
by non-Communist as well as Communist unions, tied up the state-owned rail-
ways disrupted public telegraph and telephone service, and threatened to
halt government business during office hours. (R Rome 1271, 18 Sep 51;
U Washington Post, 19 Sep 51)
Comment: This strike, involving almost three-quarters of all state
employees, proved even more successful than the earlier, 60 percent ef-
fective strike of government employees on 22 June (see OCI Daily Digest,
18 Sep 51).
UNITED KINGDOM. Iraq requests British military mission to aid its army
maneuvers A Iraq's request, the-British Army is sending a military mission
for approximately three months to assist the Iraq Army in conducting its
fall maneuvers. The mission, consisting of about fifteen officers, is
headed by Major General Rawlins. The War Office hopes that this request
will result in a permanent British military mission being stationed again
in Iraq. (TS Army Attache R-2108 London, 24 Aug 51)
Comment: The former British military mission to Iraq was unpopular.
On their own initiative the British withdrew it in May 19)48 because of the
TOP SECRET
20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For Rel 2002/05/20: CIA-RDP79T01146A0 b190001-8
TOP SECRET
intensified nationalistic and apti=British feeling aroused over the Treaty
of Portsmouth. This treaty was negotiated to replace the Anglo-Iraqi Treaty
of 1930, but was never ratified by the Iraqi Government. After 1948, British
military representation in Iraq was negligible until British Middle East
Commander-in-Chief General Robertson's visit last fall led to a study of
the reorganization of the Iraqi Army by some of his officers,
The Iraqis really need and want British military aid and advice. Much
of the former mission's failure was due to the War Office's unfortunate
choice of personnel for it. New relations, however, have-now been established
by the Middle East headquarters. General Rawlins, a former chief of the
British Military Mission to Greece, is expected to continue the improvement
in relations. If he is successful in his current mission, the Iraqis may
want him to remain. The British would be pleased by any little flicker of
revived influence in the Middle East.
6. Comment on general election announcement: Prime Minister
Attlee's announcement of a 25 Octo er general election comes at a time men
his government is under fire on both cost-of-living and foreign affairs
questions. Public opinion polls show the trend running markedly against
Labor.
The decision to dissolve parliament under these circumstances probably
springs from a calculation that the Labor party would fare worse if the
election were postponed.
On the economic side there is the likelihood that Britain's situation
will continue to deteriorate; in particular, there may be a severe coal
and power shortage this winter. On the political side the Labor Party
probably feared facing three pending by-elections in which a poor Labor
showing would not only whittle down the government's already precarious
parliamentary majority but also leave it to confront a subsequent general
election with greatly diminished prestige,
SPAIN. Minister defends government controls on private industry: In his
first official public statement, Minister of Industry Planell told the press
that the new government will proceed with Spain's industrialization program
chiefly with a view to increased agricultural production. The minister
defended the government's participation in industry through the National
Industrial Institute, He stated that the institute's role, although transi-
tory, was necessary in order to stimulate production in cooperation with
private enterprise. He added, however, that the government wishes private
industry to expand its radius of activity. (C Madrid 269, 17 Sep 51; R FBIS
Madrid, 13 Sep 51)
12 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For Re2002/05/20 : CIA-RDP79TO1146A0 0190001-8
TOP SECRET
Comment: Closely identified with the National Industrial Institute's
industrialization program, Planell is expected to continue to promote its
monopolistic practices.. However, a powerful instrument of economic control
over private industry was removed from the institute when the Undersecretariat
of Foreign Economy and Commerce was placed under the new Minister of Commerce,
Arburaa, who 3'eported favors greater participation of private enterprise in
Spain's economic rehabilitation. The undersecretariat supervises all al-
locations of foreign exchange and export-import loan applications.
8. SWEDEN, Iron-ore exports to UK may be reduced: Sweden may reduce its iron
ore deliveries to the UK because of British inability to supply Sweden with
coal, During 1950 Sweden obtained 1.75 million tons of coal from the UK;
but the British promised only 500,000 tons for 1951. (S Stockholm Joint
Weeka 37, 15 Sep 51)
Comment: Under the terms of the British-Swedish Trade Agreement for
1951, h e UK is obtaining 3.5 million tons of iron ore. Even this amount is
considered by UK experts, with ECA agreement, to be insufficient to maintain
British steel production at the levels necessary for the rearmament program.
The report that Sweden is considering reducing iron ore exports to the UK
because of inadequate coal deliveries, coupled with Swedish hints that Poland
will demand strategic ball bearings for its coal exports, suggests that the
Swedes may be exerting subtle pressure on the UK -- and the US -- to obtain
more coal from the West.
9. SOUTHERN RHODESIA. Natives' opposition to Central African federation
proposals likely to prevent-progress at conference: Delegates from Southern
Rhodesia, Northern Rhodesia, and Nyasaland began a conference at Victoria
Falls on 18 September to discuss proposals for a federation of the three
British Central African territories. A request by the natives' representa-
tives that the meetings be open to the press was rejected, and the proceed-
ings are being held in camera as originally planned. (U NY Times, 19 Sep 51)
Comment: Europeans in the three territories tend to support the
proposals for federation put forward at a London conference held earlier
this year, believing that these would make for greater political autonomy
and speed the economic development of the area. However, articulate African
opinion in Nyasaland and Northern Rhodesia has indicated firm opposition to
any form of federation, owing to the fear of domination by the economically
more advanced territory of Southern Rhodesia with its European population
of 150,000 and its policy of strict racial segregation. These African
groups prefer to remain for the present under the rule of the UK Government,
whose policy is to protect African interests, with self-government along
Gold Coast lines as the eventual aim,
TOP SECRET
13 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For Relea'1002/05/20 : CIA-RDP79T01146A0004d190001-8
TOP SECRET
London regards the present federation proposals as constructive and
worthy of careful consideration by the peoples concerned, but UK Colonial
Secretary Griffiths has been unable to convince the Africans of, this,
despite strenuous efforts during the past two weeks of talks with them.
He was able to persuade the Nyasaland African Congress to send a representa-
tive to the conference only after giving repeated assurances that no final
decisions would be made there. Further progress. toward federation at
present seems possible only by ignoring African opinion, and the present
UK Government is unlikely to assent to this.
10. ARGENTINA. Peronts aide named candidate for Governor of Buenos Aires: On
September the Peronista Party named Major Carlos Aloe, aide to President
Peron, its candidate for Governor of the Province of Buenos Aires, the
second most important position in the government. Aloe was selected at a
meeting attended by Mercante, who appears to have reached some understanding
with the Perons since Senora de Peror} renounced her candidacy for vice-
president, Mercantets plans have not been announced, but it is reported
that he may be a substitute candidate for president or vice-president if
either Peron or Quijano, the present Peronista candidates, decides not to
run. (U NY Times, 19 Sep 51)
Comment: Mercante broke with the Perons when Senora de Peron displaced
him as potential candidate for vice-president, and later he was behind the
army pressure which forced her to renounce her candidacy. Mercante would
be the most likely substitute for either Peron or Quijano, who has been in
poor health. Peron is exercising the privilege of not announcing his
electoral intentions until thirty days before the elections, but there is
no indication that he will not run.
14 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 TOP SECRET
UNCLASSIFIED when 'ArW dsF6REPe{ etgpbWoo/2?p:,V#} tFuD emii@oltodq ?ded or declassi-
fied when filled in form is detached from controlled document.
CONTROL AND COVER SHEET FOR TOP SECRET DOCUMENT
DOCUMENT DESCRIPTION
REGISTRY
SOURCE
CIA CONT OL NO
DOC. NO.
DATE DOCUMENT RECEIVED
DOC. DATE
COPY NO.
LOGGED BY
NUMBER OF PAGES
NUMBER OF ATTACHMENTS
ATTENTION: This form will be placed on top of and attached to each Top Secret document received by the Central Intelligence Agency
or classified Top Secret within the CIA and will remain attached to the document until such time as it is downgraded, destroyed, or
transmitted outside of CIA. Access to Top Secret matter is limited to Top Secret Control personnel and those individuals whose official
duties relate to the matter. Top Secret Control Officers who receive and/or release the attached Top Secret material will sign this form
and indicate period of custody in the left-hand columns provided. Each individual who sees the Top Secret document will sign and
indicate the date of handling in the right-hand columns.
REFERRED TO
RECEIVED
RELEASED
SEEN BY
OFFICE
SIGNATURE
DATE
TIME
DATE
TIME
_
SIGNATURE
OFFICE/DIV.
DATE
NOTICE OF DETACHMENT: When this form is detached from Top Secret material it shall be completed in the appropriate spaces below
and transmitted to Central Top Secret Control for record.
DOWNGRADED
DESTROYED
DISPATCHED (OUTSIDE CIA)
TO
BY (Signature)
TO
BY (Signature)
WITNESSED BY (Signature)
BY (Signature)
OFFICE
p p roved Fo
ff e l e a s e 2002/05/20 :
YA! DP79TO
?f4b9A000400190001-8
DATE
FORM
B-73 26 uat PREVIOUS EDITIONS. TOP SECRET (40)
 Approved For Relea'2002/05/20 : CIA-RDP79TO1146A0004,p190001-8
TOP SECRET
20 September 1951
CIA No. 49349-A
Copy No.
S/S CABLE SUPPLEMENT
TO THE DAILY DIGEST
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.
TOP SECRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For Rele 2002/05/20: CIA-RDP79T01146A000A90190001-8
SECTION 2 (EASTERN)
to EGYPT. Egyptian King unable to prevent treaty abrogation: The Egyptian
Royal Press Counselor has informed the US Ambassador that, unless Britain
comes up soon with some new acceptable proposal, King Farouk will be forced
to allow his government to abrogate the 1936 Anglo-Egyptian Treaty. The
king, through his counselor, made it clear that he disapproved of the way
his government has handled the negotiations. However, since abrogation
has wide popular support, he feels compelled to go along. To do otherwise
would involve "dismissing the government, dissolving parliament, and ruling
by military force."
The counselor, in view of possible new proposals from the British,
stated that he would suggest to the king that he attempt to delay the
denouncement of the treaty. (TS, Ss/S Cairo 338, 18 Sep 51),
Comment: Farouk, concerned over Egyptian stability and his own position,
will delay abrogation as long as he deems such action compatible with his
own security. Even if Middle East Command plans are completed quickly and
Egypt is invited to participate, there is some doubt as to whether such an
offer would assuage Egyptian nationalism sufficiently to prevent formal
denunciation of the treaty.
2. CEYLON. Ceylon refuses to prevent rubber shipment to China: Urgent repre-
sentations by the UK and US have failed to convince the Ceylonese Government
that it should prevent the imminent shipment to Communist China of a full
cargo of rubber now being loaded aboard a 4467-ton Polish vessel in Colombo.
The details of the UK approach are unknown, but the American Ambassador
clearly pointed out the adverse effect the shipment would have on US opinion
regarding Ceylon. He also noted that, if the rubber goes forward, the US
would neither issue an export license for 1,200 tons of sulphur desired by
Ceylon, nor grant Ceylon an exemption under Kem Amendment and Battle Bill
export control regulations, (S, to Colombo 104, 13 Sep; S, Colombo 167,
15 Sep; S, S/S Colombo 171, 18 Sep 51).
Comment: No satisfactory explanation for Ceylonese behavior has been
made. Ceylon has been dissatisfied with American policy on purchase of its
rubber. It may be attempting to force the US into preclusive buying at
inflated prices. In any case, if the rubber is shipped and Ceylon is
penalized, both the Ceylonese and the Indians may be expected to accuse the
US of playing power politics in South Asia,
3. AUSTRALIA, Anxiety over isolation from global planning perceived: The US
Embassy in Canberra "thinks it perceives" some anxiety at the departmental
level lest NATO decisions be reached at Ottawa affecting Australia without
1 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8
 Approved For ReTse 2002/05/20: CIA-RDP79T01146A000190001-8
TOP SECRET
its being consulted. Officials of the Department of External Affairs
appear to feel that the admission of Greece and Turkey to NATO may further
isolate Australia from general global planning affecting it. The embassy
expects all possible implications to Australia of NATO and related decisions
to receive thorough and deliberate consideration by the cabinet before a
government position is adopted, (S, S/S Canberra 106, 18 Sep 51).
4. CHINA. US Consul General argues for economic blockade of Communist China:
The view of British Foreign Secretary Morrison that an economic blockade of
Communist China probably would be ineffective and might force Peiping to
"rely more heavily" on the USSR is opposed by the US Consul General in Hong
Kong, He points out that a blockade, while unable to disrupt the primitive
Chinese economy or destroy the Chinese military potential, nevertheless would
increase the strain on the economy, aggravate dissatisfaction over the Korean
venture,, and strengthen the position of those elements wishing to end the
Korean conflict, He believes that additional Chinese economic dependence
on the USSR would hasten Peiping's disillusionment with Soviet aid. (TS, S/S
Hong Kong 1077, 17 Sep 51),
5. JAPAN. Yoshida's popularity reaches new highs Prime Minister Yoshida's
attendance at the peace conference and the conference's unexpectedly satis-
factory outcome have materially raised Yoshida's prestige and general
popularity, in the opinion of the US Political-Adviser, Tokyo. He believes
that admiration for Yoshida's role at the conference is exercising a favorable
effect toward the treaty and security pact which will substantially strengthen
the government's position in securing early ratification by the Diet.
The political adviser also believes that Yoshida's political position
in the Liberal Party has been strengthened, with the attribute of "indis-
pensability" now being conferred on him. There are increasing indications
that Yoshida does not now intend to yield party leadership to the recently
depusged Hatoyama or any other political leader until the peace treaty finally
comes into force. The US representative warns, however, that the prime
minister's stock may again drop with the reemergence of domestic political
issues. (C, S/S Tokyo 582, 18 Sep 51).
Comment: There has been a singular lack of criticism of Yoshida's
performance at San Francisco, even among the opposition. Last week's.public
opinion toll, which overwhelmingly supported the security pact, probably was
a reflection of approval for Yoshida's policies,
There has been considerable speculation that Yoshida might step down to
make way for Ichiro Hatoyama, former president of the Liberal Party, whose
purging in 1947 made it possible for Yoshida to become prime minister.
Yoshida's current political strength, and Hatoyama's poor health, may now
make Yoshida's tenure of office secure at least until the treaty comes into
force.
2 20 Sep 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000400190001-8