CURRENT INTELLIGENCE BULLETIN - 1952/03/25

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02692611
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: May 24, 2019
• Document Release Date: May 30, 2019
• Publication Date: March 25, 1952

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UY 'RET
SE
TY INFORMATION
25 March 1952
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CI-IANGE IN CLASS,
; DECLASSICLj FIED
tig
NEXT REV:Ell GA 71.7: _
CH.ANGED TO: TS '161'
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SEC INFORMATION
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SUMMARY
SOVIET UNION
1. Price of Soviet oil products reduced by lowering turnover tax
(page 3).
SOUTH ASIA
2. Pakistani Government bitter over failure of latest Kashmir
mission (page 3).
NEAR EAST - AFRICA
3. Turkish official advises delay in Middle East Command meeting
(page 4).
4. Comment on King Farouk's dissolution of the Egyptian Parliament
(page 4).
5. French reform program for Tunisia awaits Bey's approval (page 5).
WESTERN EUROPE
6,, Italy requests British aid in dealing with Trieste situation (page 6).
7. Allied Commander recommends postponement of Trieste elections
(page 6).
8. New French financial program considered inadequate (page 7).
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SOVIET UNION
1. Price of Soviet oil products reduced by lowering turnover tax:
Deputy Finance Minister Uryupin issued
instructions in January permitting the Chief
Directorate of Petroleum Sales to postpone
the payment of up to 18 percent of the turnover
tax due for each payment period. This exemption was to prevail
until new tax rates were issued by the Finance Ministry.
Comment: The turnover tax, a levy placed
on sales of virtually all commodities, amounts to as much as 150 per-
cent on some consumer goods., The major part of Soviet revenues is
derived from this tax.
The Soviet Union claimed that reductions in
Industrial wholesale prices, which were decreed on 1 January,were made
possible by lowered production costs. Prices for petroleum products,
however, were decreased largely because of lower turnover tax.
SOUTH ASIA
2. Pakistani Government bitter over failure of latest Kashmir mission:
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The Pakistani Government is bitter over the 3.3(h)(2)
failure of UN Representative Graham's latest
effort to further a settlement of the Kashmir
problem, according to Foreign Minister Zafrullah
Khan,
The Foreign Minister, who communicated
this information to both the British High Commissioner and the American
Ambassador in Karachi on the instructions of the Pakistani Cabinet, also
pointed out that his government felt it had been "tricked" by the British
into permitting Graham's present visit to the subcontinent
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He said that the cabinet discussed withdrawal
from the Commonwealth and that the United States was sharply criticized
for favoring India over Pakistan on the question of Kashmir. Zafrullah
stated that a grave situation threatening the security of the present
government might arise in Pakistan when the people were informed of
Graham' s failure.
Comment: The Pakistani Government has
made similar representations to British and American representatives
on several previous occasions when it wished to influence the outcome
of the Kashmir negotiations.
NEAR EAST - AFRICA
3. Turkish official advises delay in Middle East Command meeting:
The Turkish Assistant Secretary General for
Foreign Affairs has cautioned against giving
Egypt the impression that it is being left out
of the Middle East Command at the moment
when negotiations with Britain are in prospect.
French Ambassador's staff in Ankara that
while his government in principle approved of a meeting in London to
discuss the Command, he thought it "not advisable to go forward too
rapidly in this matter." There will be time to hold such a meeting, he
said, when Anglo-Egyptian negotiations fail or drag on.
Comment: Turkey's concern stems from its
belief that an effective Middle East Command cannot be established
until the Anglo-Egyptian problem has been solved, progress has been
made toward an Arab-Israeli peace, and 'Turkey's command relationship
in NATO has been clearly defined.
4. Comment on King Farouk's dissolution of the Egyptian Parliament:
King Farouk's dissolution of the Egyptian
Parliament on 23 March, his scheduling of general elections for 18 May,
and the reconvening of Parliament for 31 May give Prime Minister
Hilali approximately the maximum time available under the Constitution
to work toward a settlement with Britain unhampered by parliamentary
opposition.
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While the action and the attitude of the Wafdist
opposition may determine the government's next move, the primary
factor still is the concessions Britain is willing to offer Egypt on the
Suez and Sudan issues. The announcement of the election date may be
aimed at inducing Britain to offer concessions before an election is held.
Unless there are prospects of a genuinely acceptable settlement on the
current dispute, the intransigent Wafd party will almost certainly be
returned to power.
The King may still suspend the Constitution and
attempt to rule by decree for a time in order to prevent the Wafd from
regaining power. Hilali has insisted, however, that lack of sufficient
concessions from Britain would induce him to hold the elections on
schedule.
5. French reform program for Tunisia awaits Bey's approval:
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The French Cabinet has approved an "evolutionary
and generous" reform program for Tunisia which
the Resident General may soon present privately
to the Bey. Presentation of the proposals pre-
supposes that the Bey will dismiss Prime Minister Chenik and his cabinet.
According to the French Foreign Office, the
proposed reforms include the formation of a two-house legislative as-
sembly; reduction of cabinet posts to eight, with four to be held and
completely controlled by Tunisians; and opening all civil service positions
to qualified natives. France would reserve absolute control over finances,
defense and foreign affairs, but after five years may allow the Tunisians
to administer public works and education.
Comment: This program probably will be
acceptable to most Tunisians. Personal antipathy between the Resident
and the Prime Minister, however, remains the principal stumbling
block to negotiation. If the Bey does not dismiss Chenik, France may
have to replace the Resident to obtain acceptance of its program.
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WESTERN EUROPE
6. Italy requests British aid in dealing with Trieste situation:
Italian Premier de Gasperi has asked the
British Commander in Rome to assist in easing
the situation in Trieste, where pro-Italian
nationalists demonstrating for the return of
the Free Territory to Italy have twice clashed
with the civil police. This assistance would
be exerted through the Allied Military Com-
mander, General Winterton, who is a British
national.
The American Political Adviser in Trieste
states there is clear evidence that the Italian Government not only gave
financial and moral support to the demonstrations on 20 and 22 March,
but did little to quiet the resultant disorders.
Comment: Demonstrations in support of
Italy's position on Trieste have now spread to Rome. The government
Is likely to continue unofficially to sponsor further demonstrations in
both Trieste and Italy in order to strengthen its position before the
forthcoming elections.
7. Allied Commander recommends postponement of Trieste elections:
General Winterton has recommended the
postponement of communal elections scheduled
for this spring in Trieste on the grounds that
announcement of an election to be held under
the Italian electoral law would be interpreted as a concession to pro-
Italian pressures and would only serve as an incitement to further disorder.
Comment: An official announcement setting
an election date concurrent with Italian local elections in May and the
adoption of the Italian electoral law which would favor a joint list of pro-
Italian parties in Trieste is scheduled to be released by the Allied
Military Government before the end of March.
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8. New French financial program considered inadequate:
After a joint assessment of Premier Pinay's
chances for solving French financial and balance
of trade difficulties, both the American Embassy
and Mutual Security Agency Mission in Paris
fear that his entire effort may collapse from inadequate planning.
Although Pinay succeeded initially in creating
the indispensable "climate of confidence," he came to office without
sufficient understanding of what steps were necessary to solve France's
economic problems. His popular price-reduction campaign is likely to
end in disillusionment unless speedily buttressed by adequate fiscal,
creditland monetary measures.
While the Premier now admits the need for
some additional taxes, he is likely to pad his estimates of possible
economies and loans and thus induce a new crisis later this year under
even less favorable circumstances. The Treasury will again be criti-
cally short of operating funds within a week, and unless the government
within the next two months adopts the strong measures necessary for
balancing the budget, a new Treasury crisis will be inevitable.
Pinay has shown little interest in the deteri-
oration of France's balance of payments position. While the Embassy
and the Mission believe that a devaluation of the franc is necessary to
reverse the trend, this would be ineffective unless made part of an
over-all stabilization program and unless Britain and Germany relax
their recent trade restrictions.
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