CURRENT INTELLIGENCE BULLETIN - 1951/06/17

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02003073
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: March 18, 2019
• Document Release Date: March 28, 2019
• Publication Date: June 17, 1951

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17 June 1951
Copy No,
CURRENT INTELLIGENCE BULLETIN
Cor
DOCUMENT NO.
NO CHANCL IN
cus,sS. CHANGED la IS oii:41
NEXT REVIEW DATE: _
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DATE. FAN/EWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
I. British outline objections to Greek-Turkish membership in NATO
(page 3).
2. US gives Philippines new reparations formula for Japanese peace
treaty (page 4).
FAR EAST
3. French officials show increasing alarm over US activities in Indo-
china (page 4).
4. Anti-bandit campaign in Malaya makes slight progress (page 5).
5. Airline service between India and "Red" China under consideration
(page 6).
NEAR EAST
6. Anglo-ira,nian Oil Company willing to suggest resumption of royalty
advances (page 6).
WESTERN EUROPE
7. US Ambassador's estimate of Spanish Army opinion (page 7).
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GENERAL
I. British outline objections to Gr me bers N : 3.3(h)(2)
In an aide-memoire to the US Government,
the UK has stated that it agrees the defense re-
lationships between Turkey and the West should
be strengthened, but is not convinced that full
NATO membership for Greece and Turkey is the only or the best way to
achieve this objective. The UK does not take issue with the principle of
the US proposal for including Greece and Turkey, but considers that
"it would destroy the North Atlantic character of the alliance and extend
it into the Middle East, which is an area with quite different defense prob-
lems." Recommending further study of the questions involved, the British
Government specifically suggests an examination of the possibility of the US
joining France and the UK in a security guarantee to Turkey; it comments
that Turkey could then be associated with whatever joint arrangements the
the three powers devise for the Middle East. The UK also states that it
would not regard the adherence of Greece and Turkey as paving the way for
the admission of Spain to NATO. The memoire concludes with the asser-
tion that the problem of NATO membership for Greece and Turkey "cannot
be studied independently" of "the problem of command in the Mediterran,
ean. "
Comment: This is the most specific statement
to date of the UK attitude toward including Greece and Turkey in NATO,
though the general tenor of British participation in Council of Deputies dis-
cussions has hinted serious reservations about the proposal. In general,
the British Government has welcomed the marked increase of US post-war
interest in the Middle East, but has sometimes intimated that the US is not
sufficiently aware of the need for long-term, coordinated planning covering
the area as a whole. In particular, the British may feel that a regional
pact that includes the Arab states is more realistic than an attempt to treat
Greece and Turkey as Part of the North Ablaiitic community.
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lagtres ntw re. ;�,...::aiLions formula f.or Jp,..pLanese peace trati:
3.3(h)(2)
The US Department of State has requested the
US Charge in Manila to inform Philippine For-,
eign Minister 1101111110 confidentially of the gist
of a new reparations formula now being consid
ered for the Japanese peace treaty. Under tbL
formula, the Allied Powers Would recognize
that, although Japan should in principle pay re-p.
arations, it lacks the capacity to do Jan, on the other hand, would
agree to enter promptiy into regotation3 with interested Allied Powers
with a.view to making available the skills and industry of the jabanese
people in manufacturing, salvaging and other services as a means of par.
tial compensation for way damages -- providing that ouch arrangements
do not interfere with Japan's economic reconstruction, impose additional
liabilities upon other Allied 1�;owergi,, or place any foreign exchange burden
upon Japasi. The Department indicates that nomulo should understand that
the proposed clauses are Lbik ria0FA he can/ expect, and suggests that he may
wish to make a,dvairwe political preparation for this fact
Comment: The Philippine Governmint has
taken a consistenVy strong stand on the reparations cip gAton� insisting
that japan has the capgliejty to, pay, �vet a considerable period ot time,
monl of the Phi)1479pineg,' eight billion dollar claim. Since most of the Al-
lied Powers have long since abandoned any hope of obtftining reparations,
the Philippine Gi(),vrinment may consider� tlh,le, proposed Icr)trruila as a con-
siderable conces;Aon to its demands. In view of its ,doubtftil bargaining
power vis-a-vis the Soptnese, however, the Philippine, Government may
with to negotiate a more specific settlie,nt concurrently with the treaty.
EAST
,
3, French pfIltcylalp ,R}L.kcw Ecrinpr alark:n. oyer US actIvit(,..9sIn Jnbma.
TIVVVF.IVISTicita,41-,tr.V.INRIVIIA.V1,..7.X.M.41117.M.1.194,11,11,,,,Aff...INO.W.1.115Irkl,NEW7IrowtOSIMP.A.M.LOICIME16111.11.1,14,tilith�.1.141 3.3(h)(2)
An official al the Fnch Mgh Commissariat
in Indochina frankly de.scribed to a member of
the US I r)gattion In Saigon thp hardly conepaled
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French opposition to certain US programs in Indochina and plainly implied
that the French suspect the US of intending to supercede France in Indo-
china. While emphasizing French gratitude for US military aid, this of
-
tidal strongly criticized the ECA ,program and particularly ECA publ:
which he felt depreciated French contributions to Indochina. He also in-
veighed against the US infOrmation and educational program, describing
its publicity as impractical and incomprehensible "unless America ex-
pects Vietnam not to remain within the French Union. " He stated that many
of his associates could see no reason for the large number of Americans
in Indochina except as a cover for an espionage organization or as a base
for developing Indochina into a US zone of influence at the expense of the
French.
US Minister Heath in Saigon comments that these
"essentially groundless and unreasonable complaints" represent the attitude
and opinions of the majority of French civil officials and very probably
those of General de Lathe himself. He adds, however, that because US
concern in Indochina is primarily with the country's defense and because
that defense is borne solely by the French, goncessions should be made to
French osibilities. Otherwise, he states, US-FranVo-Vietnamese rela-
f tioh� in Indochina will become harmfully embroiled.
�4 Anti-bandit cam taL in Mala �.a makes sfli Yht tTOTS0 3.3(h)(2)
Disagreement exists in Singapore over the High
Commissioner's recent report claiming that
the anti-bandit campaign in Malaya is reaching
a "turning point. The favorable comparison
tuat the report draws between the periods from December through Febru-
ary and March through May is based on increased surrenders, on the grep,t-
er number of bandits killed and on improved intelligence
The British Defense Coordination Committee for the Far �Vast 3.3(h)(2)
asserts however, that there is little ground for the report's optimistic con
-
elusion, and points out that the total number of bandits continues to be be
-
twee 3, 500 and 5, 000. The Committee believes that the statistics on ban-
dit surrenders and casualties are misleading and that intelligence has
proved only by virtue of the fagtlhat it was previously non-existent
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Comment: Although information from Malaya
does not yet support the estimate that the turning point in anti-terrorist
operations has been reached or is imminent, there, are reliable indications
that British securityPeorces are making some progress in their efforts to
choke off the bandits' sources of food and ammunition.
5� Airline service between India and "Red� _China under consideration:
3.3(h)(2) -
New Delhi reports indicate that air service
between India and China may be established
soon. According to the plan now under consid-
eration, an Indian /company (either the Bharat
or Himalayan Airline) would operate the air service and receive subsidies
from the Chinese Communist Government to cover expected deficits
The Government of India is reportedly favorably inclined to this plan. The'
US Embassy in New Delhi nevertheless it:lves that the Government of
India might be induced to withhold its approval if prompt representations
were made by the US.
Comment: Either of the Indian companies men-
tioned has limited ca,pabilities, and would need considerable support and
subsidy from the Communists in order to operate ,ver the difficult air
route between U e two countries. The phinese Communists willingness
to subsidize the proposed airline, indicates the value that they attach to
the facilitation of air traffic between the two countries.
NEAR EAST
6, Anglo-Iranian Oil Com to suggest resuiion of ro
vances:
The spokesman of the Anglo-Iranian Oil 3.3(h)(2)
Company's mission that is now negotiating
the oil dispute with Iran has informed US
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Ambassador Grady that he believes the time is ripe for the AIOC to agree
to advance the five million pounds recently requested by the Iranian Fin-
ance Minister. He would also favor the resumption of royalty payments,
which he feels should never have been discontinued. He has informed Am-
bassador Grady, however, that the Iranians have now indicated that any
such advance must be 20 million pounds and not five million. Grady com-
ments that This is merely an attempt to bargain on the part of Iran.
C2DIment: The Iranian Government badly
needs the money. The AIOC' s monthly advance of two million pounds,
made in accordance with an agreement with ex-Prime Minister Razmara,
was discontinued in April when the Iranian Finance Minister informed the
company that the sums already advanced under this agreement were con-
sidered by Iran as a settlement of past claims against the company. The
Iranians may hesitate to accept the British offer unless the sum ialarger
than five million or unless it can be defined as a settlem'ent of past diabts..
WESTERN EUROPE
7. US Ambassadrat's_mailat of Spanish .my opinion:
3.3(h)(2)
US Ambassador Griffis regards as misleading
an American labor leader's report that Spanish
Army circles are ready for constitutional mon-
archy and that Spanish generals possibly re-
gard Franco as a hindrance to the development of Spanish military strength
and participation in NATO. He comments that despite undoubted monarchist
sentiments among some Army elements, no active support for a change of
regime is believed to exist. Furthermore, while some officers probably
are aware that Franco has been a hindrance to Spain's receipt of military
aid and participation in NATO, it is extremely doubtful that any group of
influential officers is plotting to remove him. Because of their doubts as
to the effectiveness of NATO and of the French army in particular, the
Ambassador believes that Spanish officers would prefer a bilateral military
arrangement with the US.
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Comment: The Spanish Army's preference
for a special bilateral pact probably stems chiefly from its reluctance to
undertake the commitments involved in NATO membership and its desire
to reserve any Spanish military effortisolely for the immediate defense of
Spain. While Spanish officers' expreSsions of distrust of French military
capabilities are undoubtedly genuine enough in the light of World War LI
events, they may also be motivated in part by sensitivity regarding the
Riffian wars, when 'Ffertch military intervention (in 1925) saved the
Spanish Army from a complete debacle.
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