CURRENT INTELLIGENCE BULLETIN - 1954/09/15

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03000941
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: September 15, 1954

for Release: 2019/08/13 C03000941, �
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15 September 1954
3.3(h)(2)
Copy No.
CURRENT INTELLIGENCE BULLETIN
IF ::'...:::i.,3MENT NO. l_ 9
t\:C;) CHANCE IN CLASS
DECLASSIFIED
CLASS, CHANGED TO: TS S C
NEXT REVIEW DATE: _
AUTH: HR 70-2
Iin
DATE:7 to REVIEWE
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
COCOM quota system seen threatened (page 3).
FAR EAST
2. Comment on Seoul's espionage charges against Communist members
of Neutral Commission (page 3).
3. South Korea to commence campaign against US troop withdrawals (page 4).
4. Peiping "unable" to make advance shipments of rice to USSR (page 5).
SOUTHEAST ASIA
5. Vietnamese government crisis still in balance (page 5).
NEAR EAST - AFRICA
6. Postponements of Iranian oil agreement strengthen opposition (page 6).
7.
8. Nasr reported opposed to Arab participation in any new defense system
(page 7).
WESTERN EUROPE
9. France may favor West German membership in Brussels Pact (page 7).
LATIN AMERICA
10. Castillo collaborator plans overthrow of Guatemalan government (page 8).
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GENERAL
1, COCOM quota system seen threatened:
The American delegate to COCOM believes
that the "unsatisfactory" positions taken by
other member countries on 1955 export
quotas may destroy the effectiveness of the
COCOM quota system. In the current discussions in Paris, the quo-
tas requested for items on the new International List II have in every
case been "substantially higher" than expected. Clear agreement on
a quota has been reached for only one of the 14 items discussed thus far.
Comment: Of the 23 items on the new List II
which went into effect on IT:iliugust, nearly half were formerly embar-
goed. The American view that exports of these items to the Orbit
should be limited is not shared by other COCOM countries, which in
many cases had originally pressed for decontrol.
Unless quotas can be set by 1 October, ex-
ports of these items will be restricted only by the COCOM procedure
requiring "adequate justification." This type of control has proved
increasingly difficult to implement because there are no agreed cri-
teria for deternining what constitutes an "adequate" quid pro quo for
a specific sale.
FAR EAST
Comment on Seoul's espionage charges against Communist members
of Neutral Commission:
The Republic of Korea's charge on 14 September
that Polish and Czech members of the inspec-
tion teams of the Neutral Nations Supervisory
Commission have committed more than 200
"confirmed" acts of espionage in South Korea represents the initial
citation of specific instances of spy activity.
The statement is a result of previous instruc-
tions to the National Police to collect evidence of hostile acts by
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Communist members of the teams, An early July report stated
that South Korea lacked evidence of espionage by the Poles and
Czechs and would assign intelligence personnel to obtain employ-
ment with the inspection teams in order to fabricate evidence of
illegal activity. The Communists have undoubtedly engaged in
espionage, however.
South Korea has insisted that the NNSC
be terminated prior to the convening of the UN General Assembly
on 21 September, General Hull's firm warning to South Korea should
prevent overt Korean attempts to seize inspection team members.
The South Korean government will-probably use its "evidence" to
demand that the UN Command arrest and deport the 46 Communist
inspectors. Sporadic violence against the Communists by members
of officially controlled patriotic organizations remains a South
Korean capability against which t es I'M sv. wv� A -wry", 1 A 1, Tr^ Ai -CAN
culty providing absolute defense.
3. South Korea to commence campaign against US troop withdrawals:
The beginning of a nationwide campaign
against the scheduled American troop with-
drawal, to commence in Seoul and other
cities on 16 September, was foreshadowed
in the South Korean press on 13 September. The press declared at
the same time that South Korea was neither adequately forewarned
of the plans for withdrawal nor adequately compensated by increased
military aid,
Comment: This official campaign will
probably consist of demonstrations and protest meetings, to belittle
American assistance and discredit American motives in redeploy&
ment of the troops. While Rhee's objective is to obtain increased
military aid, his attempts to label the troop withdrawals as "abandon-
ment" will create doubts among some Asians as to American inten-
tions
Rhee's campaign of abuse and misrepresenta-
tion against the redeployment program has already produced sufficient
public uneasiness to cause a flight of capital and a further substan-
tial depreciation of Korean currency.
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4. Peiping "unable" to make advance shipments of rice to USSR:
Comment: Refusal to exceed scheduled
deliveries to the USSR during August and September implies that the
original third-quarter delivery quotas are being met. Despite the
admitted shortage, Peiping probably feels compelled to meet its total
annual export contract, which exceeds 200,000 tons this year, in order
�to pay for Soviet industrial and military equipment.
According to reports from Hong Kong, Ceylon,
and Japan, Communist China has been exporting usual quantities of
rice and other foodstuffs to non-Communist countries and making com-
mitments for future deliveries, even though the continuance of food
exports will heighten the famine expected in large areas of central
China by next spring.
SOUTHEAST ASIA
5. Vietnamese government crisis still in balance:
Ambassador Heath in Saigon reported on
13 September that tension between Premier
Diem and General Hinh seemed to be re-
laxing and that the premier appeared to
have won the first round. Diem's hand had
been strengthened by a telegram from Bao
Dai supporting the premier's order that
Hinh "take leave." Moreover, General Ely
told Heath that he agreed on the desirability of Hinh's departure for
the time being.
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Comment: Hinh's ambitions to become a
dictator probably have little future if General Ely does, in fact,
support Diem in the present crisis. However, even if Hinh can be
induced to leave the country, Diem will still face the formidable
task of establishing a satisfactory civil-military relationship while
simultaneously asserting the supremacy of the government over the
Cochinchina war lords.
NEAR EAST - AFRICA
6, Postponements of Iranian oil agreement strengthen opposition:
The Shah and Prime Minister Zahedi recently
told Ambassador Henderson that successive
postponements in presenting the oil agree-
ment to the Majlis are steadily strengthening
s opponents. They noped steps could be taken to speed the agree-
ment's consideration by the consortium members
The tentative date for submission of the agree-
ment to the Majlis is 19 September. The Senate has been called into
session for 18 September.
Comment: The agreement's present ratifi-
cation timetable sets a 25 Septeraer deadline for final Majlis action.
This provides a narrow margin if the agreement is to go into effect
by 1 October, the date on which the consortium's production guaran-
tees depend, Further delay would materially strengthen the opponents
of the agreement and add to the possibility of its defeat by the Majlis.
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8. Nasr reported opposed to Arab participation in any new defense system:
Egypt will
not discuss with either the American or British
ambassadors the revision and implementation
of the Arab Collective Security Pact proposed by Iraqi premier Nuni
Said during his August talks with Minister of National Guidance Salim.
Nasr feels there are still too many unsettled
intra-Arab issues to permit the Arabs to negotiate effectively with out-
side powers, including Turkey and Pakistan as well as Britain and the
United States.
Comment: Nasr's refusal to consider any
regional defense system, even further implementation of the Arab
pact, seems to leave Nun i Said free to propose--if he still wants to--
a defense arrangement with Pakistan, Lebanon, Syria, Britain and
the United States.
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WESTERN EUROPE
France may favor West German membership in Brussels Pact:
iimbassador Dillon reports that on
, 3 September, Georges Boris, said to
be one of Premier Mendes-France's closest advisers, expressed
considerable interest in strengthening the Brussels Pact as a means
of linking Britain with the Continent and providing sufficient controls
to assure French assembly support for West German rearmament.
He suggested that all German forces be assigned to SHAPE, and that
SHAPE be granted "some control" over all forces assigned to it.
Comment: Britain is also interested in
expanding the membership of the 1048 Brussels Pact pledging Britain,
France, and Benelux to resist any "armed attack" in Europe.
Boris' proposal is similar to Mendes-
France's "little NATO" solution, and still does not include the addi-
tional British proposal for German membership in NATO. Britain
and West Germany have not been receptive to the "little NATO" idea.
LATIN AMERICA
10. Castillo collaborator plans overthrow of Guatemalan government:
Should President Castillo Armas continue
with his plan to remove certain key offi-
cials of the "liberation army" from their
present commands, his civilian collabora-
tor, Juan Cordova Cerna, may feel forced to attempt a coup against
Castillo within a few clays.
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Several army and air force officers were
arrested as implicated in a 12 September plot against Castillo.
Comment: Although Castillo retains his
popular prestige, he has no organized support of unquestioned
loyalty.
Cordova Cerna, one of Castillo's close
advisers at the time of the June revolution, represents a well-
organized, strongly conservative, proclerical faction which wants
to use the "liberation army" as its instrument of policy while emas-
culating the regular army.
Contributing to the current instability is
the return to Guatemala of General Miguel Ydigoras Fuentes, anti-
Communist presidential candidate in 1950, who has considerable
prestige among some anti-Communist elements and perhaps within
the army.
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