CURRENT INTELLIGENCE BULLETIN - 1952/05/07

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02692633
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: May 24, 2019
• Document Release Date: May 30, 2019
• Publication Date: May 7, 1952

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SEC INFORMATION
7 May 1952
Copy No.
5 3
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO
NO CHANGE IN CLASS.
DECLASSIFIED
CLASS. CHANCED TO: IS
NEXT REVIEW DATE. S40.
AUTH: HR 70-4A,
1,7 Rrvir,,NER;
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. Peiping impresses British trade delegates with germ warfare
claims (page 3).
2. France arranging to close diplomatic posts in China (page 3).
3, Australian defense program reason for Menzies' Washington
visit (page 4).
SOUTH ASIA
Soviet representative requests offer of sugar refinery equipment
(page 5).
NEAR EAST- AFRICA
5. Mossadeq wants to use US aid for army salaries (page 5).
6. Prime Minister intends to remove "spurious deputies" from
new Majlis (page 6).
7. Egypt considers new British proposals unacceptable (page 6).
WESTERN EUROPE
8, British High Commissioner pessimistic on German contract
deadline (page 7).
LATIN AMERICA
9. Brazilian Foreign Minister fears entire US-Brazilian relationship"at
an impasse" (page 7).
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1.
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FAR EAST
Peiping impresses British trade delegates with germ warfare claims:
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British delegates to the Moscow Economic
Conference were shown a germ warfare
exhibit in Peiping during their visit in April.
Some of them apparently are convinced that
there is a substantial basis for China's charges against the United States.
The exhibit included instruments of germ war-
fare, posters showing American press statements on germ research,
and recordings of American prisoner-of-war statements. One of the
British visitors reportedly believes that Peiping's charges are well
founded, on the ground that it is impossible for China to fabricate such
evidence. A more cautious member of the group thinks that the Chinese
made a prima facie case which requires "serious investigation."
Comment: Although the volume of Peiping's
propaganda on germ warfare has diminished somewhat, the Commu-
nists continue to press their campaign to win foreign support for their
charges,
Some success in the Communists' BW propa-
ganda campaign is evidenced by a 12 April statement in the British
leftist weekly New Statesmen and Natioq, modifying a former stand
that the Communist claims did not even merit further examination.
2. France arranging to close diplomatic posts in China:
the French Ministry of Finance is
willing to provide funds for "the liquidation of
our posts in China. ,as soon as possible."
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3. Australian defense program reason for Menzies' Washington visit:
Prime Minister Menzies has told a repre-
sentative of the US Embassy that the "real
reason" he wants to visit Washington is that
Australia lacks the productive capacity and
the dollars to complete its three-year defense
program. Calling attention to isolationist
sentiment in his country, Menzies said that
he desires the defense program to be far
enough advanced so that any successor will
eflbIetojeTtlson it.
in addition to setting forth Australia's
dollar needs, would seek American assurances on the protection of
Southeast Asia countries against Communism. He would also explain
the difficulties arising for Australia from the difference between Amen-
can and British attitudes toward China.
Comment: Shortages of many vital materials
and of manpower are critical in Australia, and as a result, the present
government's three-year program, instituted in mid-1950, is lagging.
The American Embassy has previously observed that Australia's
defense policy is not bi-partisan and that a reduction of the defense
budget would be welcomed by many sectors of the population.
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SOUTH ASIA
4. Soviet representative requests offer of sugar refinery equipment:
technological and power equipment for a granu-
lated sugar refinery with a capacity for pro-
cessing 600 tons of cane sugar a day, shipment
to be made this year.
Comment: This request follows upon a
vigorous drive to expand Soviet trade in South Asia., The drive reached
its peak during the Bombay Industrial Exposition in January, and more
recently at the Moscow Economic Conference. Soviet officials announced
at the Bombay Fair that the USSR was willing to accept payment for its
goods in local currencies.
NEAR EAST - AFRICA
5. Mossadeq wants to use US aid for army salaries:
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3.3(h)(2)
Prime Minister Mossadeq has asked Am- 3.3(h)(2)
bassador Henderson if the United States could
authorize use of military aid funds to pay
Iranian army salaries. Remarking that he
found it strange that a democratic country like the United States was
prepared to give guns to the army but not economic aid to the Iranian
people, the Prime Minister asserted that military expenditures were
an unbearable strain on the budget.
Comment: Iranian officials have been pro-
moting the belief that the recently signed Iran-United States agreement
on military aid foreshadowed American economic and financial aid,and
it was anticipated that the Prime Minister, who has in the past firmly
opposed foreign military assistance, would attempt to use the agree-
ment for his own purposes.
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6. Prime Minister intends to remove "spurious deputies" from new Majlis:
Prime Minister Mossadeq told the American,3.3(h)(2)
Ambassador on 1 May that his first task was
to exclude from the new Majlis those deputies
who had been elected fraudulently. He pro-
posed to ask that the Majlis expel possibly seven or eight of the 12 or
14 deputies he considered illegally elected. If they were excluded,
Mossadeq thought the elections for some 40 or 50 seats, still to be
held, would be fair. Otherwise, the vacant seats would be filled by
"British stooges."
Comment: Mossadeq has previously expressed
the hope that the "true representatives of the people" would reject these
deputies. Although he has commented on "illegitimate interference" in
elections, it appears that Mullah Kashani, one of Mossadeq's firmest
supporters, was the chief offender in manipulating elections to assure
victory for his followers.
7. Egypt considers new British proposals unacceptable:
"has 3.3(h)(2)
informed Ambassador Caffery that the new
proposals on the Anglo-Egyptian dispute which
the British Ambassador brought back from
London are unacceptable. The King's adviser stated that Egyptian
authorities were extremely disappointed with the proposals but would
not reject them immediately.
The palace official promised that the Egyptian
Government would show Caffery a copy of its reply to London before
presenting it to the British.
Comment: The Ambassador previously re-
ported that no one in Cairo considered the new British proposals ac-
ceptable and that Egyptians were increasingly convinced that the joint
discussions would prove futile.
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WESTERN EUROPE
8. British High Commissioner pessimistic on German contract deadline:
cessions Adenauer
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British High Commissioner Kirkpatrick doubts 3.3(h)(2)
that the Allied-German contractual agreement
can be signed on 20 May because of the re-
visions necessary to solve Chancellor Adenauer's
difficulties with his coalition. He mentions
1 June as a more likely date and will propose
that the High Commissioners conduct a "probing
operation" to ascertain what minimum con-
must have.
High Commissioner 1VIcCloy warns that pro-
visions in the agreement previously considered settled may be reopened
for similar reasons. He states that he cannot estimate how long it will
take to settle all outstanding matters, including the revisions.
Comment: Negotiators in Paris and in Bonn
are trying to finish drafts of the European Defense Community treaty
and the contractual agreement so that the Foreign Ministers can sign
them on 20 May. The EDC treaty drafts are expected to be initialled
this week. Adenauer still insists that he will be able to sign the con-
tractual agreement on 20 May.
LA TIN AMERICA
9. Brazilian Foreign Minister fears entire US-Brazilian relationship"at
an impasse":
The American Ambassador in Brazil believes
that there will be an early showdown on Presi-
dent Vargas' January decree that foreign ex-
change remittances of former years be recal-
culated according to a new, more restrictive formula. A revision of
the decree is opposed by a powerful nationalist group which apparently
wants foreign investors in Brazil only on its own terms and under its
control,
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Foreign Minister Neves da Fontoura has ex-
pressed his grave apprehension that the entire US-Brazilian 'relation-
ship is "at an impasse" because of this issue. He feels that more
important things are at stake than the safeguarding of American invest-
ment interests in Brazil, and that "the United States should be extremely
patient"
He also told the Ambassador that he is much
disturbed at reports from all over South America of growing anti- US
sentiment.
Comment: Neves da Fontoura is one of the
most able and friendly of Latin American diplomats. He and Minister
of Finance Lafer have opposed the decree since its promulgation, but
have felt that it could be revised if some face-saving solution were found.
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