CURRENT INTELLIGENCE BULLETIN - 1954/08/14

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03000928
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: August 14, 1954

erifie:07,0r Approved
for Release: 2019/08/13 C0300p280m,
14 August 1954
CURRENT INTELLIGENCE BULLETIN
- DOCUMENT NO.
NO CHANGE IN CLASS X
n DECLASSIFIED
CLASS. CHANGED TO: IS S C
NEXT REVIEW DATE: OIO
AUTH: HR 70-2
DATE: 2 �-�'1/4 SO REVIEWeR:
7
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. South Korea said planning to use Chinese-Koreans to expel
truce teams (page 3).
SOUTHEAST ASIA
2. Viet Minh reported preparing Hanoi population for presence of
Chinese (page 3).
3. French to continue exports to their enterprises in north Vietnam
(page 4).
NEAR EAST - AFRICA
4. High-level Saudi conflict seen in annulment of German contract (page 5).
5. Anti-American sentiment developing in Morocco (page 6).
EASTERN EUROPE
6. Rumors of Czech rationing or currency reform set off buying wave
(page 6).
7. Tito tells USSR that Soviet co-operation would accelerate "normali-
zation" (page 7).
WESTERN EUROPE
8. Comment on recent internal developments in Trieste (page 7).
LATIN AMERICA
9. Soviet UN delegate proposes trade negotiations with Brazil (page 8).
* * * *
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FAR EAST
1. South Korea said planning to use Chinese-Koreans to expel truce
teams:
Comment: Provost Marshal General Won
by 31 July reportedly had mobilized groups of former POW's and
sent them to areas where the truce supervisors are located. Action
taken ostensibly by "irate" former POW's could be officially dis-
avowed by Rhee. General Won effected the release of 27,000 anti-
Communist POW's in June 1953.
Won's plan would be difficult to implement
unless President Rhee is willing to risk armed clashes with American
troops. However, on 15 August, the anniversary of Korea's libera-
tion from Japanese rule, Seoul is likely to stage inflammatory demon-
strations against the truce.
SOUTHEAST ASIA
2. Viet Minh reported preparing Hanoi population for presence of
Chinese:
14 Aug 54
the Viet Minh is distributing leaflets in
Hanoi informing the population that Chinese
"friends" will arrive to help after the Viet
Minh take-over and asking that they be wel-
comed.
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Viet Minh requested the help of two Chinese Commu-
nist divisions during the battle of Dien Bien Phu and that there are
now 60,000 Chinese Communist troops in the southern part of the
delta and in the area just south of it.
Comment:
It is possible the leaflets described were
distributed by anti-Viet Minh elements to capitalize on the Viet-
namese distrust of Chinese.
3. French to continue exports to their enterprises in north Vietnam:
Pierre Charpentier, economic and financial
director for the French Foreign Ministry,
told an American embassy official on 10
August that France will not put a complete
ban on the export of any item, "strategic or otherwise," to French
enterprises in north Vietnam. He was sure that Premier Mendes-
France would agree with this, since the Viet Minh gave written
assurances at Geneva that French property rights would be recog-
nized and that no discriminatory fiscal or administrative measures
would be applied.
Charpentier said that the French government
had encouraged industrialists to remain in north Vietnam to fore-
stall the belief that France has given up hope of Vietnam winning the
June 1956 elections.
Comment: The only important French-
owned industries in Tonkin are textile mills in Nam Dinh, cement
works near Hanoi, and anthracite coal mines near Haiphong. These
establishments operated profitably during the war, repatriating their
profits at highly favorable exchange rates.
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The French decision to facilitate con-
tinued operation of these industries confirms reports that France
will try to develop working relations with the Viet Minh. This and
the lack of French support for the nationalistic Diem government
virtually preclude the development of a strong and effective govern-
ment in the south that could have nationwide appeal.,
NEAR EAST - AFRICA
4. High-level Saudi conflict seen in annulment of German contract:
Saudi Arabia's notification on 7 August
that it had annulled its contract with the
German engineering and construction
company, Govenco, probably results
niuct in nign� Saudi circles, according to Ambassador
Wadsworth.
Wadsworth states that the primary objective
of the Saudi action is to discredit Finance Minister Sulaiman, an
influential anti-American official. Sulaiman is reported to have
signed the Govenco contract last fall against the wishes of King Saud,
then crown prince, and of Prince Faisal, the foreign minister.
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5. Anti-American sentiment developing in Morocco:
Anti-American sentiment is developing in
Port Lyautey both among French residents
and the Moroccans
The French
resent the removal of American families resident in the native quar-
ter and accuse Resident General Lacoste of protecting American
interests above their own. The Moroccans allege that the United
States supplied France with the arms and ammunition to kill them.
Comment: Until recently, there have been
few open expressions of anti-American feeling in Morocco.
EASTERN EUROPE
6. Rumors of Czech rationing or currency reform set off buying wave:
Growing rumors that the Czech government
intends to reimpose rationing or institute
a currency reform have stimulated a buy-
ing wave which is described
as the "biggest boom in years." The American
embassy in Prague reports, however, that the buying spree has not
reached panic proportions.
The most widespread but least probable
rumor is that the government may replace the Czech crown with the
Russian ruble. American and British officials believe that a return
to rationing or a forced loan are more likely possibilities.
Comment: Reports circulating in Prague
in late July that employees of the government printing establishment
had been confined to the premises since 21 July on a "hush-hush"
printing job set off these rumors.
The reimposition of meat rationing, ru-
mored as early as last May, is plausible, since the shortage of meat
is becoming increasingly acute in Czechoslovakia. The drastic cur-
rency reform of June 1953 was so unpopular that it is unlikely the
government would decree another at this time.
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7. Tito tells USSR that Soviet co-operation would accelerate "normaliza-
In reply to a Soviet demarche, Marshal Tito
told Soviet ambassador Valkov on 11 August
that relations between their countries could
be normalized faster, provided the Soviet
perate in improving economic relations, return-
ing Yugoslav children retained in the USSR, and according fair treat-
ment to Yugoslav citizens in the Soviet Union.
Tito made it clear, however, that Belgrade
would maintain its complete independence and continue close relations
with its Western allies and friends, according to the report of the
conversation given Ambassador Riddleberger by Foreign Secretary
Popovic.
Comment: The Yugoslays believe that
negotiations with the Soviet Union can be profitable for themselves
and for the West. On the other hand, Belgrade's alignment with the
West is growing firmer. Its military co-operation will slowly but
almost inevitably broaden following the signing of the Balkan military
alliance.
WESTERN EUROPE
8. Comment on recent internal developments in Trieste:
���
Developments in Trieste,
are such that any
demonstrations could lead to rioting. There
are, however, no recent reports of actual
preparations to initiate violence.
Several of the extremist political groups in
Trieste are reported to have assembled "defense forces" to "protect"
various installations in the area, preparing for any necessary action
when partition is announced. The Cominform Communists allegedly
have 1,350 men organized to protect the offices of the Communist
labor union.
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war
Titoist Communists have reportedly
formed squads to protect Yugoslav establishments in Trieste and
to sabotage the Trieste electric plant and aqueduct in the event of
attack on Slovene homes and offices. Squads of the neo-fascist MSI
are prepared to act against Slovenes when partition is announced.
The leaders of the four center parties are
allegedly incensed over a derogatory report concerning them which
was prepared by Italian political adviser Fracassi in Trieste. As
a result much of Fracassi's work to moderate the attitude of the
center parties toward a possible partition of Trieste may be under-
mined.
LATIN AMERICA
9. Soviet UN delegate proposes trade negotiations with Brazil:
Soviet dele-
gate Tsarapkin has requested a prompt
reply to his invitation for Brazilian repre-
sentatives to visit the USSR during Sep-
, � /
tember as guests of the Soviet Union. TsarapItin said that Argentina,
Chile, and Mexico were sending representatives, and that the USSR
hoped for the attendance of "the most important countries."
Tsarapkin also stated that the USSR wished
to inform Brazil of preferential terms for Soviet-Brazilian trade,
especially for Soviet petroleum equipment and wheat.
Comment: The USSR recently issued an
invitation to all Latin American members of the UN Economic Com-
mission for Latin America proposing a one-month visit to the USSR
during September at Soviet expense. Thus far, only Argentina and
Brazil are known to have indicated they may accept the invitation.
During the past year, the USSR has stepped
up trade and cultural overtures toward Latin America, particularly
Brazil. While there is considerable support in Brazil for expanding
with the Orbit, fear of American displeasure is apparently one of the
principal obstacles to such expansion.
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