CURRENT INTELLIGENCE BULLETIN - 1954/07/18

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03017420
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: July 18, 1954

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18 July 1954
Copy No. SO
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO 47
NO CHANGE IN CLASS.
:1 DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE � 20 /
AUTH: HR 70-2
REVIEWER
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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3.5(c)
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SUMMARY
GENERAL
I. Soviet and French draft declarations reveal continued disagree-
ment on basic points of Indochina settlement (page 3).
2. Soviet Union presses Finland for foreign policy support (page 4).
3. Finnish exports to USSR to rise under trade agreement (page 4).
SOVIET UNION
4. New agricultural difficulties in the USSR (page 5).
SOUTHEAST ASIA
5. Laotian government indicates desire for united anti-Communist
stand (page 6).
EASTERN EUROPE
6. Comment on replacement of Semenov by Pushkin in East Germany
(page 6).
WESTERN EUROPE
7. West German defense commissioner fears consequences of rearma-
ment delay (page 7).
8. American embassy comments on Thorez departure for Moscow
(Page 8).
* * * *
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GENERAL
1. Soviet and French draft declarations reveal continued disagreement
on basic points of Indochina settlement:
he Soviet counterproposal to a French
raft declaration to be issued by the
eneva conference as part of its final
roceedings points up four main areas of
isagreement on an Indochina settlement
(1)
The Communists are seeking to prevent all three
Associated States from entering "any military
alliances whatsoever" or granting foreign military
bases, whereas the French wish to allow the states
to take necessary defense measures.
(2) The Soviet draft provides for the withdrawal of all
� "foreign troops and foreign military personnel"
from all three states, whereas the French wish to
leave this decision to the governments of the states.
(3) The Communists want general elections in all three
states by June 1955, whereas the French do not want
to fix any dates.
(4) The Communists want the conference participants to
"approve" the cease-fire agreements and commit
themselves to take "collective measures" to ensure
their observance, whereas the Frenth want the con-
ference to "take note" of the agreements and to "study
measures" to "assure respect" for them.
Comment: The French and Viet Minh
representatives had agreed on-e-TuTy that the conference should make a
declaration on the agreements reached in their bilateral talks. Issu-
ance of this declaration presupposes final agreement, not yet reached,
on the terms and supervision of a truce.
The basic disagreements between the two
parties evident in the French and Soviet drafts are the same disagree-
ments which have persisted throughout the talks.
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2. Soviet Union presses Finland for foreign policy support:
Finnish prime minister Toerngren told the
American minister on 15 July that the Soviet
Union has tried to make the signing of the
trade agreement now being negotiated depend-
ent on Finnish issuance of a statement in support of the Molotov plan
for a European security pact and one associating Finland with the Soviet
peace campaign. The prime minister stated that his government had
determined not to support the security plan and to accept the other dec-
laration only if it is couched in the most general terms and does not
associate Finland with any Soviet-sponsored group of "peace-loving
nations."
Toerngren also revealed that in connection
with the trade agreement the Soviet Union had urgently suggested the
desirability of raising of diplomatic missions to embassy status. He
feared that Finland could not avoid agreeing to this.
Comment: This is the first known Soviet
approach to a non-Communist-ifirTfor support of the European security
pact. It may be followed by similar approaches to other European
states in preparation for another European conference, which the Kremlin
reportedly is planning to suggest.
3. Finnish exports to USSR to rise under trade agreement
The Finnish prime minister has informed
the American legation that the new five-
year Finnish-Soviet trade agreement (1956-
60), which will probably be signed in the
next few days, contemplates an annual level of Finnish exports 10
percent higher than planned for 1954. Finnish exports are to average
$155,000,000 per year under the new agreement, with the USSR pay-
ing $10,000,000 annually in gold or Western currency to make up for
the lower level of Soviet exports.
The Finns resisted Soviet demands for a
much greater expansion of trade but agreed to construct two large ice-
breakers, 15 cargo vessels of 3,100 tons each and eight tankers of
4,000 tons each.
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The prime minister added that Finland
no longer intends to purchase radar equipment from the USSR, but
it still plans to buy three Soviet jet training planes. It does not how-
ever, intend to permit Soviet instructors to come to Finland.
Comment: In 1953 approximately
25 percent of Finland's exports went to the USSR and over 30 per-
cent to the Soviet bloc as a whole. Finnish exports in the past have
included considerable amounts of shipping but not so many tankers
and cargo ships of this size.
The USSR's insistence on obtaining such
vessels is in line with Moscow's almost simultaneous ultimatum to
Denmark that unless the latter agrees to deliver two large tankers
during 1955 and 1956, the USSR will not sign the trade agreement
currently under negotiations.
SOVIET UNION
4. New agricultural difficulties in the USSR:
Unusually hot and in some areas dry
weather has resulted in premature ripen-
ing of grain crops. As a result, fall-sown
and spring-sown grain are being harvested
e regions, placing an abnormally heavy burden
on equipment and personnel. The premature ripening also decreases
yields.
The embassy reports that Soviet officials
apparently consider present farm labor inadequate and are obligating
members of youth organizations and other youths to participate in the
harvesting of crops in the reclaimed lands.
Comment: A Pravda editorial on 16 July
emphasized that other difficulties affecting agriculture were causing
"considerable alarm." It stated that the plan for the construction of
grain storehouses by the Ministry of Procurement was met by only
34 percent as of 10 july, while the goal for major repairs of motor
vehicles in the first six months of the year was completed by only 76
percent.
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However, it is still too early to make a
final appraisal of the 1954 grain harvest.
SOUTHEAST ASIA
5. Laotian government indicates desire for united anti-Communist
stand:
Comment: Laos has previously suggested
its interest in a collective security system for Southeast Asia and its
desire for American moral and material backing, excluding military
intervention.
The terms put forth by the Communists at
Geneva for a Laotian settlement include Communist control of some
part of that state and a ban on Laotian participation in a collective
security system. There is evidence that the Laotian government is
split on the question of whether to compromise with the Communists.
EASTERN EUROPE
Comment on replacement of Semenov by Pushkin in East Germany:
The appointment of G. M. Pushkin to
replace V. S. Semenov as high commis-
sioner and ambassador of the Soviet Union
does not appear to indicate an immediate
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change in policy toward East Germany. Recent developments in East
Germany have pointed toward a slight liberalization of some policies,
particularly in an attempt to encourage contacts at all levels with
West Germany. There is no firm basis for the rumors that Pushkin
has stood for "tougher" policies than Semenov.
Semenov, the leading Soviet political
figure in Germany since the war, spent several weeks in Moscow
prior to the introduction of the new course in East Germany in June
1953 and again prior to the Berlin conference. If the reports of Soviet
interest in a new conference on Germany and European security are
correct, he may be returning to Moscow in order to play a key role in
its preparation and at the conference.
Pushkin is a widely experienced diplomat
who served as head of the diplomatic mission to East Germany from
October 1949 to June 1952, when he was appointed a deputy minister of
foreign affairs. In June 1953 he was made head of the 3rd European
Division which is responsible for German, Austrian, Icelandic and
Finnish affairs. The Kremlin may believe that Pushkin will be a more
appropriate representative in a period of emphasis on East German '
sovereignty than Semenov, for years associated with the control machin-
ery in Germany.
WESTERN EUROPE
7. West German defense commissioner fears consequences of rearma-
ment delay:
West German defense commissioner
Theodore Blank has expressed a concern,
reportedly shared by other Bonn coalition
leaders, that British-American plans for
West German sovereignty, with a prohibition on immediate rearma-
ment, would only offer France further opportunities to hedge on EDC
and to delay West German armament.
Many Germans had supported rearmament
only in return for regaining partial sovereignty, Blank told American
officials, and if West Germany regained its sovereignty with no such
condition support for rearmament would wane. Social Democrats,
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he said, were already returning to an antirearmament line and would
exploit these sentiments to the detriment of Chancellor Adenauer's
position,
Comment: Adenauer appears less con-
cerned with the rearmament delay. His advisers may be influenced
by the unexpectedly strong encouragement to neutralism given by the
all-German church rally in Leipzig a week ago, and the increasingly
bitter SPD attacks on a future German national army, both of which
could have serious political repercussions for the Bonn coalition.
8. American embassy comments on Thorez departure for Moscow:
Ambassador Dillon speculates that the
departure for Moscow on 16 July of French
Communist Party leader Maurice Thorez
may indicate that he was called to consult
on the party's future policy or that a decision has already been made
to revert to the Billoux "hard line" which led to the 1952 anti-Ridgway
riots. Still another possibility is that Moscow intends to liquidate
Thorez, under whose regime the French Communist Party has suf-
fered "real deterioration."
Comment: Thorez was in Moscow for his
health during the last perio-a-or French Communist hard line tactics.
After his return in April 1953 the party re-emerged from its political
isolation. His liquidation now seems unlikely, since his prestige is
still a major attraction to many party followers.
The French Communists are apparently
committed to a soft line as long as the Geneva talks hold some prospect
of success. They may be readying hard line tactics in caseGenevaJaUs
or France takes any steps to permit German rearmament.
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