CURRENT INTELLIGENCE BULLETIN - 1954/02/09

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02993974
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: February 9, 1954

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9 February 1954 3.5(c) r
Copy No,
84
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. _45-
NO CHANGE IN CLASS.
ill DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: .eo� 9
MYTH: HR 70-1,01
DATE:2 ,WrREVIEWER: ,
9:1
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
P,4
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I VI" JILL.A.12,
SUMMARY
GENERAL
1.
2.
3.
Australia wants consultation on any live-power conference on Asia
(page 4).
FAR EAST
4. Barter of Japanese ship for Russian oil proposed (page 4).
5. South Korea may approach US on Asian conference (page 5).
6.
NEAR EAST - AFRICA
(page 5).
EASTERN EUROPE
7. Fear of Soviet military force prevents riots in East Germany (page 6).
WESTERN EUROPE
8. Molotov's remarks on trade seen tempting to West German businessmen
(page 7).
9. Laniel believes France would reject EDC for Indochina settlement
(page 7).
10. Monnet moves for early CSC action against cartels (page 8).
LATIN AMERICA
11. Italy may allow ammunition shipment to Guatemala (page 8).
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GENERAL
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JILUICE, I
3. Australia wants consultation on any five-power conference on Asia:
The Australian charg�n Washington told
the State Department on 5 February that
his government would expect to be consulted
before acceptance at Berlin of any proposal
for five-power meetings on Asia.
Comment: Australia has long sought to
establish its right to participate in decisions affecting the Far East
and it will probably become more insistent, because Australia's
responsibilities in the Commonwealth defense plan have shifted from
the Middle East to Southeast Asia,
FAR EAST
4. Barter of Japanese ship for Russian oil proposed:
The Japanese Foreign Ministry has requested
the United States government's reaction to a
proposed exchange of a 6,900-ton cargo
ship for 223,000 tons of Soviet crude oil, in-
volving about $2,450,000 each way, the US embassy in Tokyo reports.
The Japanese say the transaction would be to
their advantage as they lack sufficient shipbuilding orders and are faced
with making increasing outlays of foreign exchange for petroleum.
Comment: If the facts are correctly repre-
sented, Japan appears to be concluding a very favorable trade, as its
shipbuilding costs are relatively high and the price of the crude oil is
quite low.
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The USSR has been attempting to place orders
for cargo ships with most major shipbuilding countries in the West and
is relying increasingly on exports of petroleum products to pay for Soviet
imports.
5. South Korea may approach US on Asian conference:
6.
George Paik, who headed the recent South
Korean mission to Southeast Asia9 intimated
to the American embassy that his government
will soon approach the United States on the
calling of an anti-Communist Asian conference. He also indicated that
President Rhee was eager to have Magsaysay take the lead in calling the
conference.
Paik commented that South Korea was "not
very pleased" at Chinese Nationalist reports that Japan would be included.
The embassy believes, however, that if Magsaysay should invite Japan,
Rhee would accept the decision.
Comment: Rhee has reportedly formed a
committee composed of Paik, Foreign Minister Pyun, Major General
Choe Tok-sin, and Rhee's two private American advisers to plan a con-
ference which would lead to an eventual alliance. To date, however9
there has been little favorable response to Rhee's plan.
NEAR EAST - AFRICA
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EASTERN EUROPE
7. Fear of Soviet military force prevents riots in East Germany:
American observers in Berlin believe that
"unrest is so near the surface" in East
Germany that only the fear of Soviet military
force will prevent demonstrations if Molotov
remains intransigent at the four-power conference. According to these
observers, open antiregime discussion in East German plants is specifi-
cally linked to the Soviet delegation's inflexible opposition to free elec-
tions.
The Soviet stand on unity together with fail-
ures of the "new course" in East Germany and continuing repression has
created a situation potentially more explosive than any since 17 June.
Comment: Communist authorities have taken
elaborate security precautions in both East Berlin and the provinces to
prevent uprisings similar to that of 17 June. The press has reported
the threat of uprisings at widely scattered points in East Germany, but
there is no evidence of any activity beyond vocal expressions of opposition.
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WESTERN EUROPE
B. Molotov's remarks on trade seen tempting to West German businessmen2
frIolotov's remarks
at the Berlin conference on the economic as-
pects of the Far East problem were arousing
great interest among West German business-
men who want to expand East-West trade. Citing the favorable comment
of a prominent newspaper on the possibility of opening vast Eastern markets,
\ must reckon with the demands of German
businessmen.
Comment On several occasions during the
conference, Molotov has called for increased trade between Orbit coun-
tries and the West. One result of the considerable pressure in the Federal
Republic for increasing such trade was the Bonn government's request two
months ago for Allied relaxation of the embargo on steel and iron to Com-
munist China.
a Moscow
trade delegation is in Berlin to explore the possibilities for increasing
trade between the Soviet Union and the Federal Republic.
9. Laniel believes France would reject EDC for Indochina settlement
Premier Laniel told American representatives
in Paris on 3 February that he believes his
government could not resist the popular and
parliamentary appeal of a plausible-sounding
Soviet proposal, no matter how insincere, for ending the Indochim. war
in exchange for French rejection of EDC.
Laniel believes, however, that EDC ratifica-
tion is possible if the existing text and protocols are presented in such a
way as to enable the Socialists and others to vote for it without reference
to domestic partisan considerations.
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Comment: Laniel's cabinet had agreed
prior to the Berlin conference to reject an Indochina settlement linked
to abandonment of EDC. The mere announcement of such a Soviet pro-
posal, however, would make it difficult for Laniel to press for assembly
ratification of EDC soon after the end of the Berlin talks.
10. Monnet moves for early CSC action against cartels:
Jean Monnets, president of the European Coal-
Steel Community, will submit this week to its
High Authority a program contemplating disso-
lution of the steel export cartel and the major
coal sales organizations within the community.
The American mission to the CSC believes
that, in view of the desire of most of the six member governments to
preserve cartel control of coal and steel price policies, the proposed
anticartel regulations will meet considerable opposition both within the
High Authority and at the 8 March meeting of the Council of Ministers.
Comment: The approaching showdown between
the High Authority and the cartel-minded coal and steel interests is expected
to determine whether the CSC can fulfill its original purpose of breaking
down the chief barriers to a free market.
Leading German industrialists have declared
their determination to re-form cartels, and in France a powerful steel
cartel is believed to have been formed last fall to defend that industry's
protected position.
LATIN AMERICA
11. Italy may allow ammunition shipment to Guatemala:
In response to American protests regarding
an order placed in It ly by a Swiss firm for
the shipment of $69,000 worth of ammunition
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to Guatemala, a Rome Foreign Ministry spokesman defended the order
on grounds that "Italy did not want to alienate a supporter for its United
Nations membership" and that "Guatemala had voted against the Soviet
bloc there."
After the American embassy pointed out the
possible repercussions of such a shipment, the spokesman promised
that the Foreign Ministry would use its "good offices" in an endeavor
to block the shipment and that it would discuss with the United States
future requests for ammunition export licenses for Guatemala. He gave
no assurances, however, that the shipment under question would not be
permitted.
Comment: The Italian government blocked
a shipment of aircraft to Guatemala in May 1951, but has refused to stop
small arms and ammunition shipments in the past.
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