CURRENT INTELLIGENCE BULLETIN - 1954/06/29

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03001372
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: June 29, 1954

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29 June 1954
Copy No.
80
CURRENT INTE LLIGENC E BULLETIN
DOCUMENT NO
NO CHANGE IN CLASS.
1 DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE.
AUTH: HR 70-2
DATE: 27/.7a,a REVIEWER: _
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. Comment on conclusion of Nehru-Chou talks in New Delhi (page 3).
2. French and Viet Minh at Geneva apparently expect early agree-
ment on Vietnam (page 4).
3. Possibility of prearranged cease-fire with Viet Minh suggested
(page 4).
4. USSR presses Afghanistan to accept further economic aid (page 5).
SOUTHEAST ASIA
5. French position on southern Annam threatened (page 6).
NEAR EAST - AFRICA
6. Israel continues to reject basic idea of Jordan River valley plan
(page 6).
7. Saudi king decrees termination of Point IV program (page 8).
8. Moroccan sultan may soon be removed (page 8).
EASTERN EUROPE
9. Joint Soviet-Rumanian Bank discontinues activities (page 9).
WESTERN EUROPE
10. Premier Scelba hopes for Trieste agreement by 15 July (page 10).
LATIN AMERICA
11. New military government of Guatemala reportedly outlaws
Communist Party (page 10).
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GENERAL
1. Comment on conclusion of Nehru-Chou talks in New Delhi:
It is. unlikely that a formal mutual friend-
ship or nonaggression pact will result
from the talks between Chou En-lai and
Nehru in New Delhi. The heavy emphasis
placed by both leaders on the preamble to the 29 April Sino-Indian
treaty on Tibet as an example for other nations to follow indicates
that this treaty is considered sufficient. The preamble laid down
the principles guiding the relationships between the two countries as
mutual respect for each other's territorial integrity, nonaggression,
noninterference in each other's internal affairs, equality and mutual
benefit, and peaceful coexistence.
Nehru's own belief in these principles may
encourage him to think that Chou is sincere in his professions of devo-
tion to them, and Nehru may therefore be increasingly critical of
Western objections to any Communist-supported settlement terms for
Indochina.
It may be noted, however, that while
reiterating respect for territorial integrity, China has not yet recog-
nized the Indo-Tibetan boundary claimed by India and still claims
parts of Kashmir, Assam, and northern Burma. Furthermore, in
stating that coexistence is possible and that an Indochina settlement
should aim at the creation of free, democratic, unified, and independ-
ent states, not subjected to foreign intervention, Chou has left the
way open for such "nationalist independence" movements as Ho Chi
Minh's to develop without interference. This portion of the commu-
nique' is similar to public and private statements made by Chou at
Geneva, aimed at gaining control of Vietnam, neutralizing Laos and
Cambodia, and fr efforts to develop a Southeast Asian
defense alliance.
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2. French and Viet Minh at Geneva apparently expect early agreement
on Vietnam:
he acting chief of the French delegation
t Geneva met with the Viet Minh delegate
n 25 June in what appears to be the first
of a series of private conversations on
"political and larger questions!" The Communist official was de-
scribed as very "agreeablta" nel, an thus to reach agreement with
the least possible delay.
The French representative is reported to
have spoken of the necessity of retaining the Haiphong "enclave" and
the question of "leaving the line as far north as possible."
In rekVonse to the Viet Minh spokesman's
bid for an early interview with Mendes-France, the French delegate
replied that such a meeting could be arranged when their talks reached
agreement and the ministers returned to Geneva.
Comment: This conversation suggests that
both parties expect an early agreement on a cease-fire in Vietnam.
It also suggests that this agreement will provide for Communist con-
trol of the greater part of Vietnam, including all the delta except a
small enclave.
3. Possibility of prearranged cease-fire with Viet Minh suggested:
who was briefed
by the French on the truce meeting scheduled
for 29 June north of Hanoi drew the conclu-
sion that "everything had been arranged" and
that an agreement would be signed on that
date. He cited reports from newspapermen who
visited Nam Dinh on 27 June that long convoys
of supplies and equipment were proceeding
north over roads which ten days ago had been heavily mined and under
frequent mortar fire and that the French were even removing electric
fans from their offices.
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Furthermore,
both French and Vietnamese units are evacuating all heavy
equipment from the Thai Binh, Phat Diem and But Chu sectors of the
southern delta, in addition to Nam Dinh. The evacuation, to be com-
pleted by 1 July, is being facilitated by currently secure conditions
along the withdrawal routes. Rumors have circulated in this region
that meetings have already taken place at a point north of Hanoi be-
tween high military authorities of both sides to rule on "partition of
zones."
4. USSR presses Afghanistan to accept further economic aid:
The Soviet embassy in Kabul has presented
the Afghan government with a 70-page list
of economic aid projects, and is applying
constant pressure to get items on the list
accepted, according to the American embassy.
the USSR and Afghanistan have actually concluded the agree-
ments for the construction of a gasoline pipeline, a hard-surfaced road .
and additional oil storage facilities.
The Afghan foreign minister has stated
that he is aware of the dangerous implications of the Soviet offers
and, although under great pressure, has accepted only the least
objectionable projects.
Comment: Moscow demonstrated its will-
ingness to give economic and technical aid to South Asian countries in
late 1953, but in no instance has it pressed so energetically as in
Afghanistan�particularly since the conclusion on 2 April of the Turkish-
Pakistani agreement.
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SOUTHEAST ASIA
5. French position in southern Annam threatened:
Recent French-Vietnamese troop with-
drawals from An Khe and Song Cau in
southern Annam suggest an "Operation
Atlante" in reverse, according to the
American army attach�n Saigon (see
ma , p. 7). There is a strong possibility that the port of Qui Nhon
will also soon be evacuated.
French-Vietnamese forces, while retreat-
ing from An Khe, lost upwards of 500 Men and over 200 trucks when
attacked by two enemy battalions, the attach�tates. The head-
quarters of a French mobile group "disappeared."
Comment: "Operation Atlante" was begun
last winter by General Navarre to clear large areas of southern
Annam. At one time, about 20 battalions were committed.
A concentration of abbut 16 Viet Minh
battalions in southern Annam has gradually increased pressure on
French forces in this area until French influence over even small
sectors is problematical.
NEAR EAST - AFRICA
6. Israel continues to reject basic idea of Jordan River valley plan:
Eric Johnston, special ambassador to the
Middle East, reports that Israel refuses
to accept the main point of the American
plan for the development of the Jordan
iver valley--the use of Jordan waters only in the Jordan valley.
He says, however, that the Israeli representatives put forward
various counterproposals, which indicated a clear intention to nego-
tiate�particularly on individual projects.
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Comment: Israel is determined to
achieve control of the Jordan River, primarily in order to irrigate
the Negev desert south of the Jordan valley.
The readiness of the Israeli government to
continue negotiations probably reflects unwillingness to bear the onus
for defeating the American proposal.
Johnston and the Arab Technical Committee
in Cairo publicly announced on 25 June their agreement on the use
of Jordan water in the Jordan basin only.
7. Saudi king decrees termination of Point IV program:
King Saud has signed a decree terminating
the Point IV program in Saudi Arabia,
according to Ambassador Wadsworth.
Wadsworth was informed on 27 June by
Deputy Foreign Minister Yusuf Yassin that termination would be-
come official with written notification from the Foreign Ministry.
Comment: Wadsworth was first told on
1 June of the Saudi government's desire to cancel Point IV--a move
in line with its increasingly anti-American policy.
8. Moroccan sultan may soon be removed:
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Comment: A change of sultans would
probably temporarily lessen the tension in Morocco, but it would
not alone settle the long-standing differences between the nationalists
and the French over autonomy and eventual independence.
Arafa is unsatisfactory to both the national-
ists and the French. Moulay Abdullah, the second son of Ben Youssef,
has been repeatedly suggested as a compromise successor to Arafa.
EASTERN EUROPE
9. Joint Soviet-Rumanian Bank discontinues activities:
Comment: The dissolution (A Sovrombank
Auggests that other joint companies, although probably not the uranium
mining company, will be returned to Rumanian ownership. However,
the USSR will undoubtedly maintain control of the Rumanian economy
through less obvious methods.
the 3pint Soviet-Rumanian companies were being
dissolved by the USSR in order to give a greater appearance of equality
to Soviet-Satellite economic relations,
a recent meeting of the Council of Mutual Economic
Assistance (CEMA) had included discussion of the possibility of organ-
izing a pool along the lines of the Schuman Plan to control Orbit steel
and oil industries.
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WESTERN EUROPE
10. Premier Scelba hopes for Trieste agreement by 15 July:
Hope for a Trieste agreement by 15 July is
the basis of Premier Scelbars new parlia-
mentary "grand design," he told Ambassador
Luce in Rome on 26 June.
If the present London talks produce a
satisfactory settlement by that time, Scelba said, he plans to use the
month remaining before tile usual 15 August parliamentary recess to
bring about ratification of EDC and of the pending military facilities
agreement with the United States. His design includes the threat of a
special session in the heat of August to force speedy ratification.
Scelba gave Ambassador Luce a formal
assurance that he would sign the facilities agreement "within 24 hours"
after a Trieste solution is announced. If the Trieste question is still
unresolved in September, he said, parliamentary action on the other
two matters would be far less certain.
Comment:
Rome is still negotiating several points in the proposals
the United States and Britain recently handed to Italy as a basis for a
Trieste settlement. Scelba's remarks, though showing new optimism,
still display his determination to make important policy decisions
dependent on a Trieste agreement.
LATIN AMERICA
11. New military government of Guatemala reportedly outlaws Communist
Party:
The military junta which assumed control of
the Guatemalan government on 27 June has
outlawed the Communist Party, according
to the Guatemalan radio, as reported from
Tegucigalpa on 28 June. The new govern-
ment is headed by a military junta consist-
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ing of Colonel Carlos Enrique Diaz, former chief of-the armed
forces, Colonel Jose A. Sanchez, former defense minister, and
Colonel Elfego Monzon.
The insurgents led by Castillo Armas have
denounced Diaz as a usurper and Diaz has proclaimed his intention to
continue military efforts against Castillo Armas. However, discus-
sions are being held in an effort to establish terms for a settlement
mutually acceptable to the two groups.
Leaders of three of the pro-Communist
political parties which backed the Arbenz administration have called
on their members to give united support to Diaz.
Comment: It would appear that the
Guatemalan government is attempting by the maneuver of ousting
Arbenz and outlawing the Workers' Party to remove the stigma of
Communism from the government and thereby take from Castillo
Armas the reason for his campaign. Most of those calling for sup-
port of the new government have long pro-Communist records.
There are unconfirmed reports that the
younger army officers are dissatisfied with the triumvirate and may
seek opportunities to unseat Diaz.
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