CURRENT INTELLIGENCE BULLETIN - 1952/02/14

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02046545
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 6
• Document Creation Date: May 24, 2019
• Document Release Date: May 30, 2019
• Publication Date: February 14, 1952

Approved for Release: 2019/05/08 CO2046545
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SEC INFORMATION
14 February 1952
Copy No. 4 9
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS.
DECLASSIFIED
CLASS. CHANGED TO:
NEXT REVIEW DATE:
AUTH HR
IEWEF
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
SECURITY INFORMATION
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ET
SUMMARY
USSR
1. Turnover capital controlled by Soviet decree (page 3).
FAR EAST
. Quirino wants Pacific Pact discussions renewed (page 3).
3. Indonesia secretly negotiating trade agreement with USSR (page 4).
WESTERN EUROPE
4. Italy expected to ratify Greek and Turkish NATO membership
this week (page 5).
5. De Gasperi urges postponement of Trieste Zone A elections (page 5).
6. France proposes military budget in excess of NATO estimate
(page 6).
LATIN AMERICA
7. Mexico rejects draft military agreement with the United States
(page 6).
* * * *
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USSR
1. Turnover capital controlled by Soviet decree:
The USSR Council of Ministers, by a decree
of 19 November 1951, established strict
control over the custody of "turnover" capital
by prohibiting its use by industries and organ-
izaiions which were not involved in capital construction and capital
repairs.
Comment: Turnover capital, or current
funds allocated to industrial enterprises for new construction or
repairs, has apparently been diverted to non-strategic production.
Some factory managers have not only spent this money to purchase
scarce materials to manufacture consumer goods not envisaged in
Plan schedules, but have expended more than the sum allotted.
The 19 November 1951 decree requires an
annual accounting of the use of this fund, and specifically states that
it may only be spent for the production of nonconsumer goods. The
fact that the Council of Ministers issued a decree establishing such
strict control over the custody of turnover capital implies that this
abuse may be fairly widespread throughout the Soviet Union.
FAR EAST
2. Quirino wants Pacific Pact discussions renewed:
3.3(h)(2)
President Quirino emphasized to Ambassador3.3(h)(2)
Spruance in Manila his great interest in
reviving Pacific Pact discussions. In his
opinion, the US defense treaties with the
Philippines, Japan, Australia and New Zealand would be more ef-
fective if made "interlocking." The Philippine president also would
like to sponsor a conference in the near future to include Thailand
and Indonesia, in addition to the above-named countries, but would
first like to obtain American support.
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Comment: Quirino has maintained his interest
in a Pacific Pact with varying degrees of intensity since he first proposed
one in 1949. Recently-renewed agitation in Indonesia in favor of an
"independent" foreign policy suggests that that country would not at this
time consider joining discussions toward a regional defense arrangement
which had even tacit US support.
3. Indonesia secretly negotiating trade agreement with USSR:
The Indonesian Corn-
mercial Counselor, "continuing the exchange of ideas as requested by
the Soviet Government," had met again on 3 January with Mr. Andrienko,
Trade Representative of the USSR.
The Soviet proposal was described as attractive,
but Andrienko was told that it would be impossible to make further
arrangements until Djakarta had "again" considered the matter "from
all angles." Andrienko replied that he had "prepared everything and
was waiting with a request for goods from Indonesia," indicating the
possibility of Soviet export of many types of consumer and capital goods.
Comment: The Indonesian Foreign Minister
on 28 December denied to the US Ambassador in Djakarta that Indonesia
had made any decision on entering trade negotiations with the USSR. He
stated that his government had no such plans. Similarly, the Indonesian
Ambassador in London on 31 December "categorically refuted" a press
report that negotiations were under way in London for a Soviet-Indonesian
trade agreement.
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WESTERN EUROPE
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4. Italy expected to ratify Greek and Turkish NATO membership this week:
The Italian Senate may begin debate on Greek 3.3(h)(2)
and Turkish participation in NATO by 14 Febru-
ary and give its approval by 16 February,
according to the Italian Foreign Office. The
government has made no effort to speed up ordinary legislative pro-
cedures on this matter because it wishes to keep the Communists
unaware of the importance of the time element and thus avoid a filibuster.
Comment: Italy is now the only country hold-
ing up Greek and Turkish participation in NATO. Approval by the
Italian Senate should permit the completion of formalities for the ad-
mission of Greece and Turkey into NATO intime for it to be announced
during the forthcoming Lisbon meeting.
5. De Gaseeri urges postponement of Trieste Zone A elections:
Italian Prime Minister De Gasperi recently
told US Ambassador Dunn that elections in
Zone A of the Trieste Free Territory should
be postponed indefinitely. He added that
elections would damage chances of arriving at a settlement with Yugo-
slavia on the whole Trieste issue, and he hoped that they could be
avoided. He said that if the elections must be held, they should be
scheduled to coincide with the municipal elections in Italy.
The Prime Minister stated that an acceptable
arrangement on Trieste would ensure the defeat of the Communists in
the forthcoming local and national elections in Italy.
3.3(h)(2)
Comment: De Gasperi's statements illustrate
Italy's unwillingness to make any real concessions on the Trieste issue
and prove once more that the majority Christian Democratic party is
apprehensive of further losses in both the Italian and Trieste local elections.
Popular dissatisfaction with the Italian Govern-
ment on internal political and economic issues would weigh more heavily
than any favorable settlement of the Trieste issue as a determining
factor in the forthcoming Italian elections.
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6. France proposes military budget in excess of NATO estimate:
The French Government has just proposed
to American officials a 1952 military program
based on expenditures totalling four billion
dollars. The American Embassy in Paris
believes that France cannot increase defense expenditures to this
extent unless the United States provides at least 200 million dollars
In addition to present commitments in the first half of 1952, and
500 million dollars for the last half of the year.
Comment: Although .NATO estimated that
France could not support a military program exceeding 3.4 billion
dollars in 1952, the French Government is proposing a ten-percent
tax rise in an attempt to meet its commitments beyond this figure.
The proposed new taxes would cover only half the difference between
3.4 and four billion, however, and parliamentary opposition to the
increase is strong.
LATIN AMERICA
7. Mexico rejects draft military agreement with the United States:
The Mexican delegation at the current
military talks has rejected the US draft
for the bilateral agreement needed for
assistance grants under the Mutual Se-
curity Act. The basis for agreement as proposed by Mexico is
considered "completely unacceptable" by the American delegation
which feels it unlikely that any agreement can be reached at this
time. The American Embassy suggests that a formula be found
for keeping the door open for future negotiations.
The Mexicans hedged on accepting the
principle of participation in hemisphere defense by Mexican forces;
stated that Mexico should do everything possible to strengthen its
capacity to defend itself; and asked that the United States facilitate
the acquisition of equipment for improving Mexico's military industry.
The US Embassy believes that the Mexican delegation is influenced
by the government party's vulnerability to attacks from opposition
groups during this pre-election period.
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