CURRENT INTELLIGENCE BULLETIN - 1955/05/07

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03181208
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: May 7, 1955

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7 May 1955
Copy No. 94
CURRENT INTELLIGENCE BULLETIN
00CUNIENt NO.
NO CHANGE IN CLASS,
LI DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE- 0 /
AUTH: HR 70-2
DATE'..51/2.490 REVIEWER.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
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'taw
SUMMARY
FAR EAST
1. Menon outlines views on talks with Chou (page 3).
SOUTHEAST ASIA
2. Laos considering encouragement of popular revolt against Pathet
Lao (page 4).
3. French efforts to avoid responsibility in Vietnam anticipated
(page 4).
NEAR EAST - AFRICA
4. Comment on reported Iraqi plans for Syrian coup (page 5).
EASTERN EUROPE
5, Greece not seriously concerned at trends in Yugoslav foreign
policy (page 6).
6. East Germany reportedly not to have large-scale armaments
industry (page'?),
WESTERN EUROPE
7. Comment on possible invitation for Adenauer to visit Moscow
(page 7).
8. Luce comments on Gronchi's election to Italian presidency
(page 8).
LATIN AMERICA
9.
THE FORMOSA STRAITS
(page 10)
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FAR EAST
1. Menon outlines views on talks with Chou:
V. K. Krishna Menon, who is going to
Peiping soon for exploratory talks with
Chou En-lai on the Formosa issue, told
the American consul general in Madras
on 4 May that he does not know what Chou
has irimind as to the form and topics for negotiations. Menon
himself intends to work for bilateral Sino-American talks limited
to a cease-fire, after which conditions might be favorable for bi-
lateral or multilateral talks on a wider range of issues.
Menon, insisting that his views be re-
ported to Washington, said the Indians believe a cease-fire cannot
be concluded unless agreement can be reached on some general
formula for the ultimate disposition of Formosa. Menon will there�
fore explore the possibility of eventual settlement, after several
years, on the basis of guarantees against an attack on Formosa,
consultation with the people now on Formosa, dismantling of mili-
tary establishments there, and "some form of trusteeship . .
responsible to Peiping."
Menon spent much of the interview in
elaborate protestations of India's "good faith" and friendship for
both the United States and Communist China.
Comment: Menon appears to be interested
both in reassuring the United Stacis as to India's neutrality and in
obtaining an American response to his four-point proposal for a
Formosa settlement. His proposal seems to envisage, and would
facilitate, the eventual extension of Chinese Communist control
over Formosa.
Peiping apparently desires bilateral talks
with the United States. On substantive issues, the Chinese Commu-
nists have been arguing that there is no need for a cease-fire, that
the status of Formosa is not negotiable, and that the only matter for
negotiations is the withdrawal of American forces from the area.
This is not, however, necessarily Peiping'slinal position.,
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SOUTHEAST ASIA
2. Laos considering encouragement of popular revolt against Pathet
Lao:
Lao an officials are considering co-
vertly encouraging--with arms and money--
popular uprisings against Pathet Lao au-
thority in the two northern provinces,
accor ng ost in Vientiane. Crown Prince Savang
feels the population is ripe for a revolt which, at the least, would
seriously embarrass the Pathet Lao and might drive them out
completely. Both Savang and Minister of Defense Souvanna Phouma
agree there should be no involvement of the royal army at this time,
although the defense minister is now covertly attempting to rein-
force commando posts in the north.
Yost also reports that Premier Katay is
still hopeful of some results from the political talks with the Pathet
Lao, an optimism not shared by Savang and Souvanna. Katay has
stated, however, that the negotiations will not be allowed to drag on.
Comment: Reports from several sources
have indicated popular dissatisfaction with the Pathet Lao regime.
In the event of an uprising seriously threatening the Communist
hold over the northern provinces, the Viet Minh would be likely to
intervene.
3. French efforts to avoid responsibility in Vietnam anticipated:
Ambassador Dillon in Paris believes
that recent events have not altered the
French government's conviction that
Vietnamese premier Diem is unable to
achieve political stability and unity in South Vietnam. The ambas-
sador expects Paris to make clear that French troops will not be
available to maintain Diem in power. He anticipates French pres-
sure for the "Bao Dai solution," under which Diem would share
power in a high council with several others appointed by Bao Dai.
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If the situation in Vietnam worsens,
Paris will probably state it is considering immediate withdrawal
of French forces and the evacuation of French nationals. If
Vietnam is lost to the free world, France will be prepared to
blame the United States,
Comment: Premier Faure's personal
spokesman assured American officials on 5 May that his govern-
ment was urging Bao Dai to support Diem. He said that increas-
ing pressures were developing in Paris for a speedy withdrawal
of the French expeditionary corps.
Diem is personally agreeable to the
maintenance of Bao Dai as titular head of state, but he would be
unalterably opposed to a five-or six-man supreme governing�
council of the sort which the French and Bao Dai favor. The
roster of councilors reportedly proposed by Bao Dai and the
French appears to be more amenable to collaboration with the
Viet Minh than the Saigon "Revolutionary Council." French
charges that the "Revolutionary Council" has a pro-Viet Minh
orientation remain unsubstantiated.
NEAR EAST - AFRICA
4. Comment on reported Iraqi plans for Syrian coup:
money, arms
and ammunition are being sent into Syria
from Iraq in order to overthrow the gov-
ernment of Prime Minister Asali. Over 100 Iraqi army officers
are reported to have been infiltrated into Syria and are now work-
ing with the Druze tribesmen. light
machine guns, rifles and ammunition have been sent to the Druze.
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Iraq's Crown Prince Abdul Ilah, desirous
of becoming king or viceroy of Syria, is probably actively working
with the Druze tribesmen and some Syrian politicians. It seems
unlikely, however, that he can achieve his goal merely by working
through the Druze and Syrian politicians without the overt support
of either his own government or significant elements within the
Syrian army.
EASTERN EUROPE
5. Greece not seriously concerned at trends in Yugoslav foreign
policy:
Greek leaders have told American embassy
officials that they find Yugoslav interest
in expanding military co-operation with
Greece undiminished and that Balkan pact
military discussions are proceeding satisfactorily. They believe
Yugoslavia is willing to continue quietly its military co-operation
with the West, but that now is not a propitious time to effect the
necessary Yugoslav co-ordination with NATO.
While Athens is aware of growing Yugo-
slav support for a neutralist bloc, it is inclined to believe that pub-
lic statements regarding Yugoslavia's role between East and West
are chiefly a propaganda line subject to change. The Greek leaders
attribute this drift in Yugoslav policy both to Belgrade's estimate
that the danger of Soviet attack is now less and to pressure from
factions within Yugoslavia that have opposed Belgrade's growing
co-operation with the West.
Comment: These observations were made
after Athens had been informed ziWout the recent conversations in
Belgrade between Tito and the A.merican and British ambassadors,
which disclosed a strong Yugoslav desire to stall any further mili-
tary arrangements with the West.
Greece in general has been more optimis-
tic than Turkey about Yugoslav military co-operation with the West.
It has criticized Turkish moves to obtain an early Yugoslav commit-
ment on a NATO link.
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While it cannot be ruled out, there is
very little evidence to support the view that internal factional
opposition stands behind current Yugoslav foreign policy.
6. East Germany reportedly not to have large-scale armaments
industry:
A representative of the East German
Ministry of General Machine Construc-
tion was told by Soviet officials in
Moscow recently that his country was
not to undertake large-scale armaments production at the pres-
ent time, These officials
added that armaments production throughout the Eastern bloc will
be co-ordinated and that the USSR will provide East Germany with
armaments when necessary. The Soviet officials said that East
Germany's exposed position makes it insecure as a site for heavy
armaments production.
Comment: Permitting large-scale pro-
duction of armaments in East Germany would be inconsistent with
poposals for unifying Germany on the basis of neutrality, which
the USSR is likely to advance.
East Germany now produces some types
of military equipment, including armored cars and small arms.
Preparations for military aircraft production were discontinued
in 1953.
WESTERN EUROPE
7. Comment on possible invitation for Adenauer to visit Moscow:
Soviet ambassador Malik in London has
asked a West German correspondent
there what the German reaction would
be if the USSR invited Chancellor Ade-
nauer to visit Moscow.
Such an invitation would be intended to
put pressure on Adenauer to explore the possibilities of German
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unification through direct talks with Moscow. If Adenauer refused
to go, the USSR might invite other leading Bonn politicians, particu-
larly leaders of the opposition Social Democratic Party.
Adenauer might be willing to go to Moscow,
provided such a trip were approved by the Western powers.
8. Luce comments on Gronchi's election to Italian presidency:
9.
Ambassador Luce believes Giovanni
Gronchi's election as president of Italy
poses serious problems for the United
States. It emphasizes the existing trend
toward state economic control and possible authoritarianism,
"either of a national socialist or perhaps a socialist front type
manipulated by Moscow." The election will probably tend to
strengthen neutralist forces in Italy.
The ambassador notes that Gronchi, who
has advocated that the government be oriented toward the left, is
generally considered capable of making deals with both left and
right in pursuit of his ambitions.
Comment:1 The Scelba regime has been
under attack for its failure to carry out domestic reforms, and
pressure is growing for a government shift,to the left.
LATIN AMERICA
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THE FORMOSA FORMOSA STRAITS
Report of the 1AC Current Intelligence Group
for the Formosa Straits Problem
This report is based on information received in Washington
up to 1100 hours 6 May 1955.
1. Chinese Commi,mist jet light bombi.r gtrikck ranahilitv
from the Shanghai area may be increasing.
movement of some of the 8th Division's
BUTCHER (IL-28) jet light bombers to Hangchow from their origi-
nal base in Manchuria. Since 25 April, these bombers have been
very active in what are apparently terrain familiarization flights
over the Hangchow Bay region. On 4 May, 30 of the bombers were
noted in such flights.
Movement of the complete division would put an esti-
mated 60 BUTCHER jet light bombers at' Hangchow. The latest
available photography revealed only 39 present on 14 April. �These
bombers operating from Han chow can strike any target on Formosa,
the Quemoys or the Matsus.
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