DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000600160001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 12, 2016
• Document Release Date: March 12, 2002
• Sequence Number: 1
• Publication Date: December 13, 1951
• Content Type: REPORT

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TOP SECRET
SECURITY INFORMATION
13 December 1951
CIA No. 49465
Copy No. 1 : 5
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. '
*Army, USAF, DIA and State Dept.
reviews completed*
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SECTION 1 (SOVIET)
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and Minister of Interior Shehu has become pronounced since the visit of
these two Albanian leaders to Moscow in May 1951, causing factional dis-
sension in the Albanian Workers' Party. Failure to resolve their personal
differences has deepened the enmity which stems from Shehu's imprisonment
the split between Premier Hoxha
1. USSR. Italian envoy believes Kremlin does not expect US attack: In
the opinion of the_Italian Ambassador to Moscow, Soviet officials do
not actually expect an attack from the US despite their charges of
American aggressive intentions, as evidenced by NATO rearmament, German
remilitarization, the Japanese treaty, and the like. The Italian
Ambassador concludes that the Kremlin's primary fear is that when Western
"positions of strength" are established and German remilitarization com-
pleted the West will make demands upon the .Soviet Union which it could
not tolerate. These demands would primarily involve the status of the
Eastern European Satellites and the Baltic states.
The USSR Charge comments that the Italian Ambassador has had long
experience in the USSR and that he had unusual opportunities to see high
Soviet and Satellite officials recently preparatory to departure from
his post. (S Moscow 995, 11 Dec 51)
2. Middle and Near East Communists will make another attempt to hold a
Peace Conference: Partisans of Peace delegates from the Middle East and,
North Africa met in Rome in September and planned another attempt to
fulfill the World Peace Council's instruction to hold a regional Peace
Conference. The conference is reportedly scheduled for January 1952
in Cairo. F7 I
Comment: There is no confirmation that this Communist conference,
long planned by the Moscow-oriented WPC, will actually take place in Cairo.
The Egyptian Government refused to permit it to meet there last July, and
it has previously been banned when scheduled for Tunis and Tehran. Egypt
has always opposed local Communist activities, but the possibility exists
that Egyptian authorities might permit such a conference to be held as a
means of publicizing their stand against the UK. Items reportedly to be
featured on the conference agenda include all the controversial issues
of the area, such as the Middle :fast Command, Iranian oil, the Suez Canal,
and the Sudan. Since the local Communist Parties and the USSR have cur-
rently been championing the nationalists' point of view, the conference,
if held, would serve both Communist and nationalist objectives.
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of certain Hoyxha sympathizers on the grounds of political infidelity.
Hoxha is also irritated by Shehu's efforts to expand his personal power
under the guise of protecting Albania's internal security.
Comment: Rumors predicting Hoxha's political downfall have been re-
ported from time to time, but there has been no confirmation of a real
split between the Albanian Premier and the Minister of Ihterior.
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CZECHOSLOVAKIA-HUNGARY. Transportation difficulties hamper Satellite-
China trade: Czechoslovakia is leading other Satellites in developing
export trade with China and has secured the pick of Chinese barter goods
because it has the best transport agreement with Polish shi ping companies,
the Czechs
have successfully cornered available transportation-, which is at a premium,
and put the Hungarians in particular at a disadvantage. Hungarian exports
to China are held up, and the head of the import department of Technoimpex
was In China in September attempting tn the transportation dilemma.
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Comment: It cannot be confirmed that Czechoslovakia is foremost of
the Satellites in the China trade, although it is one of the leaders. The,
alleged Polish-Czech shipping agreement is reported here for the first
time. In October three vessels chartered by Poland arrived simultaneously
at Gdynia and loaded for the Far East. This fact, together with the fact
that the vessels were apparently new to the Far Eastern trade, suggests
that their employment was an emergency shipping measure to meet an in-
creased volume of goods and furnishes some confirmation of a growing back-
log on the docks.
TRIESTE. Trieste Cominformists' policy reportedly shifting to the Italian
Communist position regarding Trieste: A US official in Trieste reports
that recent developments suggest that the pro-Cominform Communist Party
is preparing the groundwork for a fundamental shift in policy on the
Trieste issue in anticipation of a gradual adoption of a position com-
patible with the party line current in Italy. This would mean that the
Trieste Cominformists would drop their agitation for the creation of a
Free Territory and discontinue their opposition to a return of the entire
FTT to Italy.
The principal support for this hypothesis is the failure of key
.party leaders in Trieste to emphasize or allude to the previous party
line on this issue, and their conspicuous failure to deny charges made
by the pro-Titoist press that the Cominformists had deserted their policy
calling for a Free Territory and the fulfillment of the provisions of the
Italian peace treaty. (S Trieste Despatch 174, 25 Oct 51)
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Comment: Questionable reports alluding to this development have
been received in the past two months. Such a shift in policy, if imple-
mented, would probably alienate many Slovene members,of the Cominform
group, as well as those non-Slovenes who based their sympathy for the
party on its former policy.
The apparent failure of the pro-Cominformists to emphasize the Soviet
line suggests that the party may be preparing for the assumption of a new
policy which would become explicit only when Italo-Yugoslav accord ap-
peared imminent.
Comment: This report appears to be a reliable summary of the impasse
facing the Italo-Yugoslav negotiators#, Neither side appears willing to
make those concessions needed for the establishment of an acceptable basis
for a settlement. Negotiations to date have not evidenced a sense of
urgency or an understanding for the need of compromise; the Italians have
reportedly threatened to terminate negotiations unless the Yugoslavs show
a willingness to adopt a more flexible approach. Italy is believed to be in
favor of postponement of a settlement until after the Italian national elec-
tions which are scheduled for late 1952,
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SECTION .2 (EASTERN)
1. IRAN. Iranian Minister of War threatens resignation if US military aid is
cut off: The Iranian Minister of War told the Chief of the US Military
Mission in Iran that he would resign if Prime Minister Mossadeq does not
accept his recommendations for the continuation of US military aid. The
US Mission chief, during their conversation, had pointed out the bad effect
on army morale and efficiency which would result from a cessation of US
military aid. (S Tehran 2067, 5 Dec 51)
Comment: Prime Minister Mossadeq has long maintained that Iran should
not nee orsign economic or military assistance. While the oil dispute
and the consequent financial difficulties of his government have persuaded
him to try to obtain economic aid from the US, he has continued his opposi-
tion to grants of US military aid and to the linking of the two. Accordingly,
he may not be willing to sign the assurances necessary under the Mutual
Security Act and thus go on record as promising to build up Iran's defense
forces. In view of his desire to maintain Iran "aloof from the cold war,"
he may also object to that portion of the assurances which calls for him
to contribute to the defensive strength of the free world.
2. INDIA. Indian Government to sell seventy war surplus aircraft: The Indian
Government has decided to sell 70 war surplus C-46 aircraft to Banwari Lal
and Co., Bombay, although the sale has not yet been officially announced.
The sales contract'f orbids export of the planes to "unapproved" destinations,
including both Nationalist and Communist China. The government reportedly
used various unorthodox procedures in handling the bids, and Banwari Lal
allegedly was not the highest bidder. (C New Delhi 2066,11 Dec 51)
Comment: The Indian Government called for bids on these aircraft last
Augus~ce they are out of the government's hands, there is some danger
that the planes or their components will illegally find their way to
Communist China.
FAR EAST. Consensus of Singapore conference is reported: A participant
in the recent Singapore conference of British representatives in Asia re-
ports that opinion was "nearly unanimous" on the following points:
(1) Communist China has been"eriously hurt"in Korea, in terms
of trained manpower, equipment, and control of inflation-
ary pressure;
(2) China "badly wants peace" in Korea, while the USSR would
prefer the conflict to continue;
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(3) Inch china is secure against Communist forces unless China
provides major assistance, which is unlikely;
O the most dangerous spot on China's periphery is Burma,
where the situation is "explosive" and there is a possi-
bility of more aggressive Chinese-Communist action;
(5) there are no signs of trouble between Moscow and Peiping,
although sharp differences may eventually develop; and
(6) although Nehru indulges in "wishful thinking" about
Peiping, his influence on the Chinese Communists "generally
will be in the right direction." (S New Delhi 2043, 10 Dec 51)
Comment: This report probably represents correctly the thinking of
British officials in Asia, but it appears over-optimistic in some respects.
Evidence is still not convincing that China has been sufficiently hurt in
the Korean fighting to desire a settlement on terms acceptable to the UN.
Overt Chinese assistance to the Viet Minh, including the commitment of com-
bat forces, is a continuing possibility. There is no indication that Nehru
has had or will have the slightest effect on Peiping's policies.
ZE. BURMA. Karens threaten. to attack Rangoon: The Karen radio on 10 December
warned foreign residents that Rangoon would be attacked on 15 December.
The US Military Attache comments that he believes this broadcast to be no
more than a manifestation of the new psychological warfare campaign recently
begun by the Karens. He doubts that the Karens could even mount a serious
raid against Rangoon's outskirts, (S USMA Rangoon 103, 10 Dec 51)
Comment: The Karens are not known to have sufficient forces near
Rangoon to threaten the city seriously. However, they recently raided the
town of Dalla, across the river from Rangoon, and caused a new influx of
refugees into the overcrowded Burmese capital.
5,
Communism gains among Chinese in Burma: The US Embassy reports
that one of the two leading Chinese secret societies in Burma plans to
call an all-Burma Congress in late February for the purpose of passing a
resolution in support of the Chinese Communist regime. The chairman of
the society is reliably reported to have received 30,000 rupees from the
Chinese Embassy, and the Chinese Ambassador is known to be pressing Chinese
leaders in Burma to cooperate with his government.
Meanwhile, the only anti-Communist Chinese newspaper (pro-KMT) in
Burma is reported threatened with bankruptcy because of mismanagement, cor-
ruption and ineptitude. (S Rangoon 540, 7 Dec 51)
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Comment: This particular secret society, the Hung Men Ho Sheng,
claims 40,000 members throughout Burma. It is the local branch of the
secret society utilized by Sun Yat-sen to.overthrow the Manchu Dynasty
in China. Control of this group would obviously give great impetus to
the extension of Communist control over the Chinese in Burma.
The difficulties of the Nationalist newspaper re-emphasize the lack
of a sense of mission or responsibility among the followers of Taipei in
Burma.
6. THAILkND. Smuggling of arms into Thailand reported: The US Naval Attache
in Bangkok has been informed by the Philippine Army Attache that at least
six submarines have unloaded hand grenades and small arms on an island off
the southern coast of Thailand. The arms are said to be stored by the few
inhabitants there before distribution in Thailand. The island is leased
by a Chinese firm in Bangkok which deals in birds nests and which, so far as
is known, is reputable and has not been previously implicated in the arms
traffic. Although the sub-source of this information is unknown, the
Attache rates it as a C-3 report and suggests that a Thai naval under-
ground, which developed after the abortive coup in June, may somehow be
involved in these activities. (S ALUSNA Bangkok, 0245Z, 30 Nov 51)
Comment: There have been several unconfirmed sightings of unidentified
submarines in the Gulf of Siam. If this report is true, it appears more
likely that the arms involved are destined for the Communist guerrillas in Ma-
layasmdthe underground in Thailand (mostly Chinese) rather than for Thai
ex-naval personnel.
7. INDOCHINA. Viet Minh launches attack: The Assistant Military Attache
reports that Viet in forces are aacking a point at the extreme south
of the Tonkin delta, and that French paratroops have been flown in from
Hanoi. (S Hanoi 316, 11 Dec 51)
Comment: No further. information is available. A press report of 12
December datelined Hanoi states that the French army has "crushed a new,
two-pronged Viet Minh offensive to link Communist forces in central Indo-
china with those near the Chinese border." According to the report, "the
drives were the biggest by the Viet Minh since last May."
Morale of Chinese Nationalist troops in Indochina reportedly
low: The morale of the Chinese Nationalist troops interned by the French
i' n Indochina has deteriorated greatly during the past six months and the
rate of desertions is very high, according to a Nationalist Foreign Office
official who just returned from a tour of the area. Disillusionment con-
berning repatriation to Formosa, the hardships of confinment, and the lure
of Viet Minh promises have caused many of the internees to escape. General
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Huang, commander of the troops, considers that those left would be of little
use to the French in case of a Chinese Communist invasion as the troops are
bitterly anti-French and unprepared for combat. (S ALUSNA Taipei, Weeka L.9,
8Dec51)
Comment: General Huangts estimate of the combat capabilities of these
troops is confirmed by other sources.
9. INDONESIA. Military police confiscate Dutch arms destined for West New
Guinea: A Cabinet member told US Ambassador Cochran that on 9 December
military police at the Djakarta harbor removed from a Dutch merchant
vessel considerable quantities of automatic weapons destined for Netherlands
troops in West New Guinea. The Indonesian police acted on the grounds that
West New Guinea is within Indonesian surveillance.
Cochran comments that the incident could prove an obstacle to the
pending Netherlands-Indonesian talks at The Hague. (S Djakarta 83,
11Dec51)
Comment: Various Indonesian officials are increasingly taking the
view at on the basis of mlauses in the Charter of the Transfer of Sover-
eignty, fast New Guinea is legally part of Indonesia.
Indonesian seizure of the arms is not surprising. Dutch shipments
of weapons to New Guinea through Djakarta would seem to be a particularly
unwise move during a period when the Indonesians are especially agitated
over the New Guinea issue #
10. CHINA. Kwangtun populace is hostile to Communist program:
K
D
25X1
wangtung reports that
northeastern
(1) the coastal area is undergoing a second land-redistribution
program which is adversely affecting nearly half the popu-
lace, and resistance to this program is widespread,
(2) marriages between Kwangtung women and military personnel
now serving with the Nationalists have been declared void,
with the marriageable ordered to remarry local men, the
unmarriageable employed on public works projects, and the
children of former unions taken over by the State, and
(3) guerrilla forces in the mountainous area of northeastern
Kwangtung have grown from an original group of 300 to'a
present strength of 13,000. (C Saigon 1172, 11 Dec 51)
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Comment: The Communists have admitted and decried popular opposi-
tion to advanced phases of the "agrarian reform." The reported rulings
on marriages are also plausible. The assertion regarding guerrilla
strength in the area, however, is doubtful, as almost all sources report
guerrilla forces in the province to be scattered and dwindling.
11. Li 7'2un9n *pa to chal~,ene Chiang Ki-shek's nositio on
legal grounds: General Li Tsung-jen, Vice-President of China who has
resided in the US since December 1949, recently stated that he has no
plan to "oust" Chiang Kai-shek from the Presidency of Nationalist China.
However, Li admitted that he hopes to compel Chiang to "relinquish" the
presidency. Li denounced as misleading the New York Times' account of
his 6 December press conference, and stated that his plan does not
include the use of force but is rather based on "logic and law."
Li also expressed his desire to assume leadership of the mainland
guerrillas, who, he feels, could overthrow the Chinese Cpmmunists if
they had the proper backing.
_omment:: The Times on 6 December reported that Li was planning
to oust Chiang. Li argued that he had become Acting President in 1949
when Chiang "retired" and, although Chiang reassumed the presidency
in 1950 when Li was in the US, Chiang legally had never been re-elected.
This argument appears to lack validity, since Chiang never "resigned"
the presidency.
12. KOREA. Report of "swept-win aircraft" on Haeju airfield believed
rroneousa The US Fifth Air Force in Korea reports that the 7 December
sighting by a US reconnaissance bomber crew of nine "swept-wing aircraft"
on an airfield near Haeju, 75 miles from Seoul, has now been discredited.
It is believed that formations of ice and snow on the ground may have
given the air crew members a false impression. In addition, it is
doubtful that jet aircraft could operate from this field. (S CINCFE
Telecon 5455, 12 Dec 51)
13. Curren indications continue to point to an enemy defnse: The
Far East Command believes that Communist forces in Korea will continue
to defend in their present positions. Indications pointing to such an
intention are seen in (1) the disposition of enemy artillery in depth,
(2) additional prisoner of war statements that orders had been issued
by the enemy to reinforce their fortifications and to prepare their
quarters for a defense until the spring of 1952, (3) prisoner of war
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reports of construction of defense installations in the rear of present
defense lines, and (4) the depletion of the enemy's forward reserve force
by, the relief of long-committed, units by reserve units. (S CINCFE
Telecon 5155, 12 Dec 51)
14. North Koreans from east coast unit.desert on wrest coast: Three
North Korean soldiers from the 13th Regiment, 6th North Korean Division,
deserted to UN forces on 10 December in the Panmunjon area. (S CINCFE
Telecon 5449, 12 Dec 51)
Comment: The North Korean 6th Division has recently been subordinate
to the V Corps, currently believed located in the Wonsan-Hamhung area.
While the location of the parent unit can not be fixed by the area in
which desertions occur, it seems strange that the deserters would make
a trans-peninsular trek to give themselves up.
1117. -ommunists develop new propaganda themes- Radio Pyongyang on
8 December initiated a new propaganda theme. It decried the "vicious
scheme, unpardonable by heaven and man," to register forcibly the
600,000 Koreans resident in Japan as ROK nationals and to deport certain
elements to South Korea as cannon fodder. (R FBIS, Radio Pyongyang,
10 Dec 51)
Comment: Koreans are so violently nati?nalistic and remain so
anti-Japanese that this new propaganda line will probably receive
heavy emphasis for some time to come, particularly since it lends
itself to associating the "Syngman Rhee traitors" and "American
imperialists" with the "reactionary Japanese Yoshida government."
16. Consumer Union stores in North Korea active in preparation for
winter: Radio Pyongyang reports that Consumers Union stores throughout
North Korea, in order to "stabilize the livelihood of the people"
during the winter, are supplying the people with necessary winter
commodities as well as preserving and processing vegetables and fruits
and other foods. Mobilization of all transportation facilities to
distribute the supplies and also fuel to the people is "being pushed
vigorously." All quotas have been fulfilled, and in many cases over-
fulfilled. (U FBIS Pyongyang, 11 Dec 51)
Comment: Frequent statements such as this are further indications
of North Korean efforts to alleviate an apparently desperate cLvilian
situation. Lack of criticism seems to indicate that this program is
meeting with some degree of success.
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EAST GERMANY. East German Government announces price cuts: Heinrich Rau,
C,?'hairman of the East German State Planning Commission, announced on 8 December
that "extensive price reductions amounting to between 10 and 79 percent"
would.go into effect on 9 December.? Rau described the price cuts, which
cover primarily food and consumer goods, as a "Christmas gift from the
government to the working population." West Berliners have been urged to
take advantage of these cuts. by shopping in East Berlin. (R FBIS, 8-10 Dec 51)
Comment: The recent removal of certain commodities from the ration list
combinh these: and previous price reductions is part of a series of
measures designed to improve worker morale in the hope that industrial
production will thus be increased. The invitation to West Berliners to buy
in East Berlin suggests an effort to.enhance the value of the East mark by
increasing the demand for it as well as an effort to attract West marks for
use in illegal East-West trade or for financing the activities of the West
German Communist Party.
GERMANY-AUSTRIA. Austro-German rapprochement stressed at Salzburg political
congress: e Bun es ag leader of the West German Free emocra is Party,,
Augur Martin Euler, stated at the recent congress of Austria's Union of
Independents (VdU) in Salzburg that the foremost aim of his party is re-
establishment of cooperation between Germany and Austria. To promote this
end, Euler called for an increase in trade between the two. countries, a
settlement of the question of German assets in Austria, and the expansion
of Austro-German cultural exchange. German culture, Euler observed, must
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become a new incentive for the revitalization of Europe and a bulwark against2 5X1
the East. (R FBIS, Salzburg Die Neue Front, 8 Dec 51)
6. AUSTRIA, Further difficulty anticipated in closing Austrian, payments gap:
Evaluation of the Austrian Government's revised import-export program for
fiscal year 1951-1952 has left ECA officials in Vienna with some doubts
that the anticipated Austrian net deficit will be within the figure now
expected for US aid. While the import program has been scaled down to
619 million dollars despite inflexible requirements for coal, grains, fats,
and raw materials, exports are not expected to exceed 492 million. The
scheduled deficit will be covered by 130 million dollars of US aid, Austrian
earnings on invisible exports, and other minor financing. If, however, the
deficit continues at the rate established during the first four months of
the current fiscal year, the deficit will exceed available financing, and
the ECA mission expects the Austrian Government will request additional aid
on an emergency basis. (0 Vienna TOECA 926, 9 Dec 51)
Comment: While a prospective cut in US aid in the vicinity of 100
million do ars has made imperative a general tightening-up of the Austrian
economy, the Austrian Government has appeared reluctant to adopt the kind of
reforms required. The current economic stabilization program, designed to
restrain Austria's creeping inflation and to prevent further increases in
export prices, is not yet, for example, reflected in any significant down-
ward trend in prices.
7. FRANCE. Police disperse Algerian nationalist demonstration in Paris Six
i#~ousand Algerians were arrested in Paris on 8 December when, despite a
governmental ban, they attempted to hold a public meeting organized by the
nationalist Movement for the Triumph of Democratic Liberties. Police also
raided various Algerian residential quarters. These measures were inspired
by the suspicion that the Communists had organized the meeting and that
inflamatory speeches would be made. (R Paris 3)463, 10 Dec 51)
Comment: The more than 10,000 Algerians imported to the Paris region
for manual labor have been the target of both nationalist and Communist
0
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proselytism and propaganda. Highly emotional and for the most part ignorant,
these workers have on previous occasions participated in Communist-sponsored
demonstrations. Firm measures have checked such demonstrations and made
serious or violent incidents unlikely.
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SECURITY INFORMATION
13 December 1951
CIA No. 49465-A
Copy No.
45
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.
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