CURRENT INTELLIGENCE BULLETIN - 1951/06/10

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02003068
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: March 18, 2019
• Document Release Date: March 28, 2019
• Publication Date: June 10, 1951

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10 June 1951
Copy No. - 9
QURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLAS.T-i:-IXO�r------"'""
11 DECLASSIFIED
CLASS. CHANGED TO: TE;
NEXT REVIEW DATE:
AUT HR i19.41
DAT. 4 r REVEVVER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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9 June 1951
Copy No.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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� SUMMARY
GENERAL
1. Britisii Admiralty officers favor China blockade (page 3).
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USSR
NEAR EAST
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4. Syrian officials concerned by Israel's "non-compliance" with UN
resolution (page 4).
WESTERN EUROPE
5. Serious East German economic difficullies reported (page 5).
6. High Commission plans retaliation against Soviet interference with
AZ, 'West Berlin trade (page 5).
7. MacArthur hearings diminish Portuguese confidence in US leadership
(page 6).
LATIN AMERICA
8. Comment on adverse Latin American reaction to the Mutual Security
Program (page 7).
9. Argentine ,Overnment paper attacks US (page 8).
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GENERAL
1. British Admiralty officers favor China .111lockade:
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British Admiralty officers are openly dis- 3.3(h)(2)
cussing the possibility of a naval blockade
of the China coast and the seizure by the
UK Government of all British-registered
vessels under Communist charter. According to CINCNELM, all
British Admiralty officers favor positive action to check the movement
of strategic cargo in British vessels to China, and are probably recom-
mending effective courses of action to higher UK authorities. CINCNELM
considers that one of the first results of this stiffening attitude will
probably be the interception of the British vessels Stanrealm and Grey-
stoke Castle, now in the Indian Ocean and reportedly carrying strategic
cargo including ammunition to Communist China.
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SEC;REE
USSR
NEAR EAST
4. Svrian officials concerned b Israel's "non-compliance" with UN reso-
lution
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According to US Minister Cannon in Damas-
cus, top Syrian Government officials have
complained that Israel is not complying in
full with the terms of the UN Security Council
resolution pertaining to the Syrian-Israeli border dispute. The Syrians
are particularly troubled by (a) Israel's announcement that its suspension
of the drainage project in the Lake Hule demilitarized, area is only a
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"token compliance," and by (b) Israel's failure to allow the return of those
Arab residents who were forcibly removed from the demilitarized region.
Cannon expresses his fear that the psychological gain obtained by the
West in Syria as a result of the passage of the UN resolution has been lost.
WESTERN EUROPE
5, Serious East German economic difficulties reported:
US authorities in Berlin report substantial 3.3(h)(2)
evidence of serious economic difficulties in
East Germany resulting in failure to achieve
production targets in key industries. There is
a shortage of materials caused by: (a) delayed shipments from the East;
(b) internal disorganization and bad planning; and (c) reduced shipments
from the West, partly reflecting improved Western controls, and partly
the general tightening of the supply of critical materials. � The shortages
are creating a notable increase in unemployment, which gives concern to
the East German Government, especially in regard to areas close to the
interzonal. border. The morale and pi)litical. attitude of the workers are
said to be affected.
Comment: This is the first report for more
than a year of appreciable unemployment in East Germany. It is doubt-
ful whether the reported d.eteti ration of the East German economy could
be ascribable in any large measure to Western controls on shipments to
the East.
6. High Com.n_ILLssl_ ja.on lans retaliation a ai)L22L3oviet interference with West
Berlin trade:
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At a special session on 8 June the C�uncil of
Allied High Commission agreed: (a) to order
the West Berlin City Council to stop issuing
certificates of origin of raw materials used
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in West Berlin exports as demanded by Soviet Zone officials; (b) to send
a letter of protest to the head of the Soviet Control Commission; and (c) to
instruct the West Berlin commandants that if the situation is not improved
by 12 Tune, all shipments from western Berlin to the Soviet Zone are to
be stopped. Francois-Poncet, the French High Commissioner, expressed
fear of provoking the USSR into imposing a new blockade of Berlin and
stated that he would have to consult his government before agreeing to all-
out countermeasures against Soviet interference with West Berlin trade.
The UK High Commissioner felt that vigorous countermeasures now were
all the more necessary "If a blockade were developing."
Comment, Tightening of Allied controls on
West German exports to the Soviet Zone, given as one of the reasons for
East German failure to achieve production targets in key industries in
connection with the Five Year Plan, may be the -reason for Soviet pressure
n West Berlin trade. This pressure could constitute a Soviet bargaining
point in the current attempt to negotiate a favorable trade treaty between
East Germany and the Federal Republic. Stoppage of shipments from
West Berlin to the Soviet Zone may be difficult to effect in view of the
attitude of the Berlin City Council, which has already yielded to Soviet
pressure in order to prevent further deterioration of the West Berlin econ-
omy. The Soviet attitude toward reimposition of a Berlin blockade is not
likely to be determined, solely by East German economic considerations.
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7. MacArthur hearin s diminish Portu uese confidence in US leadership 3.3(h)(2)
MM.\
US Ambassador MacVeagh reports that, although
the Portuguese press has not commented ad-
versely on the current US joint congressional
inquiry into General MacArthur 's dismissal
and foreign policy, private conversations with Portuguese Government
officials and other influential individuals clearly show that the inquiry is
having an adverse effect on public confidence in US leadership. A grow-
ing belief that US foreign policy is degenerating into a me appendage of
internal politics carries with it misgivings concerning US dependability
as the mainstay of the West against Communist aggression. MacVeagh
considers that this belief, taken in conjunction with the pessimistic ap-
praisal by informed Portuguese opinion of the resistance capabilities
TO
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of the other NATO powers without US aid, is at present diminishing Portu-
gal's will to resist and the readiness of its leaders to make the budgetary
defense commitments now requested by the US.
comment The continued Portuguese reluctance
to increase budgetary defense commitments has stemmed chiefly from
Prime Minister Salazar's fear of the effects on the precarious economy
of the budgetary deficit which would result from increased defense expendi-
tures. In addition, Salazar appears to feel that Portugal's contribution of
the Azores bases to the NATO defense effort should be sufficient at this
time.
LATIN AMERICA
8. Comment on adverse Latin American reaction to the Mutual Security
Program;
Almost unanimous disappointment is reported.
from many Latin American governments at.the small amount of money
allotted under President Truman's Mutual Security Program for use in
Latin America in both economic and military fields. (The basic idea of
the program, however, is generally well regarded.) Sharp criticism
was expressed even in such generally pro-US newspapers as the Important
0 Jornal of Brazil, which stressed the insignificant size of the funds pr
grammed.for Latin America relative to those allotted to Africa and the
Middle East. 0 Jornalofurther asserted that the smallness of the sums
for Latin America discredits US statements about the importance of
Point IV. Other prn-US newspapers have editorialized along similar
lioies. As was to be expected, the adminAstration press in Argentina ;
attacked the smallness of the amounts and, concluded that Latin American
nations will have to rely on. their own resources to defend their respec-
tive sovereignties.
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T-(fi�SEretRET
9. Ar tentine � overnment paper attacks US:
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An article by "Descartes" in the administra-
tion paper Democracia lists charges of US
pressure on Argentina including (a) economic
blockade, boycott, and sabotage, (b) an anti-
Argentine campaign throughout South America financed by US Government
funds, and (c) a US organization installed in Montevideo to interfere by
radio and publicity in the coming Argentine elections.
Comment:
"Descartes" is actually Peron.
His article appeared on the same date set for a meeting between US Am 3.3(h)(2)
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bassador Bunker and Foreign Minister Paz, at the latter's request, "to
discuss all points covering US-Argentine relations" -- a diplomatic ap-
proach which on two previous occasions preceded Argentina's asking for
special favors. The employment of double tactics toward the US by Peron
is not new, but the contrast in this case is sharper than during the past
few months. By the anti-US press attacks, usually explained as solely
for internal political consumption, Peron may be hoping to provoke some
form of US retaliation that would enable him to repeat in ath impending
election campaign the charges of US intervention which he made in his
1946 anti-Braden campaign and which he felt contributed substantially to
his first electoral victory.
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