DAILY SUMMARY - 1948/10-1948/12

• Document Type: SPECIALCOLLECTION
• Collection: Daily Summary Collection
• Document Number (FOIA) /ESDN (CREST): 06749335
• Document Creation Date: November 8, 2018

Approved for Release: 2018/10/18 006749335 50 TOPS 31 DEC 1948 877 GENERAL I. IP issues warninito Israeli Government�By direction ct Presifiecii Truman, the I5epartment of State has instructed U8 Representative McDonald in Tel Aviv to inform the POI (Provisional Govermnent of Israel) that the US is "most deeply disturbed" by apparently authentic reports that Israeli forces have invaded Egyptian territory in "a deliber- ately planned military operation." !McDonald is to call the attentice of the POI to the grave possibility that by ill-advised action Israel may: (a) jeapardtse Ream in the Middle East; (I)) cause reconsideration of Israel's apigieation for UN membership; and (c) make it necessary for the US to recon- sider its relations with Israel. The Department instructs McDonald also to Worm the POI that if reports of its threaten- ing attitude toward Transjordan should be confirmed, the US would again have no course but to undertake a substantial re- view of its attitude toward Israel. Israeli lnva8t ncRv confirmed�U8 Embassy London has learned from the VE Foreign Office that reconnaissance of the El Arish area by the RAF Indicates the presence of Israeli forces about 30 miles inside Egypt. According to the Embassy, the Foreign Office ccesiders this evidence to be conclusive confirmation of Israel's armed incursion into Egyptian territory. Document No. ; CHANGE in Mass. 0 DECLASSIFIED Class, CHANGED TO: TS S C DDA Memo, 4 Apr 77 Auth:. fiAmK E.19-78 :-."! 77/1763 A Date: Bar: Of . TO ET Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 50 GENERAL 30 DEC 1948 876 1., British estimate of Dutch intentions in Indonesia�According izwissiLm--7-7-5-mon c Foreign ofilFrestimates that the Dutch Government probably will: (a) issue a cease-fire order in Indonesia but will reserve the right to combat guerrilla or terrorist groups; and (b) announce the liquidation of the Republic of Indonesia. The Foreign Office considers that the Dutch will have great difficulty in setting up an interim govern- ment because key non-Republican governments are reluctant to participate and Republican leaders will probably refuse to cooperate, even if released. (CIA Comment: CIA concurs in this estimate of Dutch intentions and probable difficulties.) NEAR EAST-AFRICA 2. PALESTINE: Trans ordan fearful of Israeli attack�US Representative Stabler in Amman has learned that at a recent meeting between Israeli and Transjordan representatives, the Israelis asserted that Israel is no longer interested in main- taining the armistice between the two countries and insisted on immediate peace talks. According to Stabler, King Abdullah feels that the Israelis are prepared to resume hostilities to achieve their ends and will attack the Arab Legion or the Iraqi Army, or both, unless Transjordan agrees immediately to peace negotiations. (CIA Comment: CIA believes that Israel is fully pre- pared to continue military operations and at most will be only temporarily restrained by the Security Council's cease-fire resolution of 29 December.) Do,JLunent No. '-S (14-- Ct4 -5 NO CHANGE i.n Class. o < DECLASSIFIED Class. CHA11:ED TD: TS S C DDA.M:3r1-3, 4 ..,1pr 77 Auth: rA F./ /7.:.-3 � Date 6 MAR 19/8E� -- Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 50 TOP RET GENERAL I.�UK urges -4%, � on to end ambito?, . basin ore hdends to recommend to the Department of State that joint US-UE represeniatkee be made to the Greek King and Prime Minister In order to impress on the Greek leaders that the ettuation must be taken in hand and that internal political maneuvering is a Wort Greece cannot afford. The Embassy was also told that Foreign Secretary Sevin is "acid" on the subject al Greece, parthadarly concerning:the "dollars beteg sunk there which could be used elsewhere." 29 DEC 1948 FAR EAST 875 s -TS 2. CHINA: Kai-shek .; I , (don statement- - 5 -c. US Embassy '�-�17-1 � . Ma s) ;71 111 -shek y on 26 December expressed his intent to retire In favor of Vice President Li Tsung-jen and will issue a proclamation to this effect "as soon as possible." According to the Em- bassy, which gives credence to this report, Li then will mrake an open proposal to the Chinese Communists for a cease4tre order and a resumption of peace tallts. If the Comammists reject this peace proposal, Li reportedly plans to make an appeal to the US, the UK, France, and the USSR for mediation. The Embassy believes that: (a) such a pro- clamation will have a disastrous effect on whatever fighting spirit may still exist In the Nationalist armies; (b) the Com- munists will reject Les peace proposal, and (c) without Chiang, the Natimial Government will be Incapable of re- grouping its forces in order to continue resistance after having made an open peace move. (CIA Comment: CIA agrees that a government under Li would be oven less effective than the present Government In offering military resistance to the Communists. CIA Document No. 11 � 1 � NO CHANGE in Class. 0 DECLASSIFIED Cla . CILIIT'..:ED., V): TS S C ,S,i(s.s T ET uth: DDA Memo, 4 Apr 77 414116gt78-- 77/1703 By: at Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 TOP ET believes tbat the Comma:date may refuse to negotiate at all and will certainly not accede to any terms odor than those which would give them affective control of a governmeit for all Chin.) of Ma of * OM V � ti the Wet Miltiary Advisory I it,:T 0) believes that the North China Ohs of Tientsin and Tsku will fall to the Canimenists within a low days. The JIJ8MMCbL conelders, however, that the Communists will not attack Peiping but will contain Nationalist forces there until General Fe Tso-yi is forced to surrender or to reach an agreement with the Commtmists. The IMMO Chief reports that all effective Nationalist resistance north of Pangko has been eliminated and that most Nathmalist forces in the Pension area have been withdrawn smith of the Yangtze; he considers a Comnumist drive to the Yangtze to be imminent. TO 2 Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 50 FAR EAST 28 DEC 1948 1. CHINA: Peaceful turnover in Tainrciao esvected--Acting US Consul GeneTh-Ial bong expresses the view that if US Marine units now in 'rsingiao are not withdrawn until the majority of the Chinese Nationalist troops leave, the turnover to Commu- nist authorities will be peacefUl and there will be no need for the Marine detachment to remain ashore. Strong considers that because the bulk of the Tsingtao population realises that the Communists will punish looters or saboteurs, the people will therefore remain quiet. Strong suggests that if a "sig- nificant number" of Nationalist troops remain, it will be desirable to retain a small group of "carefully selected and Indoctrinated Marines." Document No. NO CHANGE .in Class. 0 )4,DECLAI.eILD Class. CHANCED TO: TS S pDA rc110, 4 Apr 77 Auth: DLA LJ, 77/.1763 Date: fttrcitffff_ By: ail 874 -Ts Approved for Release: 2018/10/18 006749335 C06749335 Approved for Release: 20'18/10/18 TOP ET GENERAL 27 , 1 US not to--The I*j*rt.. m� of 8te hms tneructedUS Representative Jessup at the UN not to support a draft resolution which the UK intends to Introduce if the UN Palestine Mediator confirms reports of recent fighting in the Negeb. (The UN. Mediator has subs.- qaently charged Israel with breaking the UN truce by atiadting Egyptian forces in the Negeb.) The proposed British resolu- tion would: (a) reaffirm the 4 November and 16 November Security Council resolutions (which call on Israel and Egypt to withdraw from the Negeb and undertake negotiations of all outstanding issues); (b) ask the SC to consider possible action under Chapter 7 of the UN Charter (presumably sanctions against Israel); and (c) fix a time limit within which Israel and Egypt must comply with the SC resolutions of 4 Novem- ber and 16 November. The Department considers that US support for the resolution would gravely jeopardize the poet- of the US on the recently formed Palestine Conciliation Commission, especially since the Israeli Government does not regard the other two members (France and Turkey) as friendly to Israel. 2. Dutchaidente --The Department of State has informed US representatives at the UN of the receipt on 28 December of a Dutch aide memotre concerning the Indo- nesian situation. The aide memoire declares that although the Netherlands Government still rejects the UN claim to Jurisdiction over the Indonesian case, the Government: (a) is giving serious consideration to the 24 December Security Council cease-fire resolution; (b) will provide UN military experts as much opportunity for observation as is possible; and (c) will establish in the shortest possible time an interim Indonesian government in which the presently detained Indo- nesian leaders will be free to participate. The Department had previously advised the US repre- gentatives to support the Dutch request for an advisory opinion e. from the International Court of justicOMAlt fluffellien of the eri security Council's competence to handiti � .. orovtded that UN actian.nii n�t the7DEA;LASS:ISEI . NO- 4= (14. yaciass. IF D 0 lass. CHANGED TO: TS S C 5-1 CP) TOPSECRET DDA Memo, 4 Apr 77 Auth: DDA REC. 77 1763 Date: 1978 lease 2016/10/18 C06749335 By; �2 Approved for Release: 2018/10/18 006749335 50 EUROPE 23 DEC 1940 872 1. YUGOSLAVIA: glia s tig�ift.k_igotement ur s-; US Ambassador Cannon expresses his serious concern over reports of a movement within Yugoslavia for setting up an Independent Croatia. Cannon urges the "extreme importance" of dissuading the members of a "separatist" group from pro- ceeding with present attempts to disintegrate the Yugoslav state. Cannon considers that grave harm would be done to Marshal Tito's ability to maintain his present stand with the USSR if it were to appear to the Yugoslav people that the US was backing a "separatist plan" for Yugoslavia, however Indirectly. He therefore recommends that the US be pre- pared to disavow publicly any support for such a movement. Document No. C/Ig NO CHANGE in Class. [3 DECLASSIFIED Class. CHANCED TO: TS DDA Auth : Metno , 4 Apr 77 771./763 Date; 1, By: 0 Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 GENERAL 22 DEC 1948 871 1. Need for ccmtinuinx US interest in Greece stresspd--US Charge Rankin in Athens expresses the belief that any official and public manifestation of diminished US interest in Greece during the next few critical months might prove fatal to the Greek will to resist Communism. Rankin points out that the Greeks, almost alone of the peoples united with the US in resisting Communist expansion, are confronted with open warfare.which is instigated and continued at Soviet behest: Rankin considers that the SAW- cesa of this technique in. Greece wank' encourage the Commu- nists to employ it elsewhere. Re concludes that It would be � extremely dangerous to make insufficient allowance for Greek morale factors when foreign aid appropriations are discussed again In the US Congress. Document No. oig NO CHANGE in Class. 0 DECLASSMED lass. CHANTZD TO: TS S C DDA 1,710, 4 Apr 77 Auth: LTA LI_L2___77D.7e3 1 6 MAK ift3 By: iatt_. Date: TOPS 5 - TS Approved for Release: 2018/10/18 006749335 (-) Approved for Release: 2018/10/18 006749335 Copy No. 50 CEN1RAL INTELLIGENCE AGENCY Special Emanation No. 98 Document No. 014 NO CHANGE in Class. 0 DECLASS1.3'IED Class. effilicir:E.D T3 S DDA 1'1:z-in), 4 Apr 77 Auth: EDA � _ 77/ 2. /.:.3 Date: ___1_644augzii By: ox.g SE Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 22 December 1948 DUTCH MILITARY ACTION IN INDONESIA Dutch military action was instituted in Indonesia on 18 December, one half -hour after a Netherlands Government representative in Indonesia had informed the Chairman of the UN Good Offices Committee (GOC) of his Government's in- tention to terminate the Renville truce agreement with the Republic. Dutch forces are now establishing military control over Republican areas in Sumatra and lava. Members of the GOC in Batavia (LIS Representative Cochran and the deputy Australian representative) immediately forwarded a report which asked for prompt Security Council action. They charged that the Netherlands Government had not fulfilled Its obliga- tions under the Renville agreement because it had failed to Inform all members of the GOC of the contemplated action and, by cutting telegraphic communications, had made it Impossible to inform the Republic. The Security Council is scheduled to hear the case on 22 December. Dutch Motives The Netherlands Government has described its military action as a move to reestablish peace and security in all Indonesia and to eliminate terrorist and irresponsible elements. Actually, the Dutch are moti- vated largely by the convictim that an interim Indonesian government under firm Dutch control must be established as soon as possible. They do not really believe that the Commu- nist movement in Indonesia represents a threat of such mag- nitude as to require action on the present scale. However, In order to establish an Indonesian government under Dutch controllthe Dutch must forcibly eliminate the Republic as a de facto government in view of: (a) the apparent impossibility of settling Dutch-Republican differences on Dutch terms; (b) the Dutch fear that the Netherlands Government could not mahrp-I. in control over an interim government in which the Republic was _ 1 - Approved for Release: 2018/10/18 006749335 . . Approved for Release: 2018/10/18 006749335 c�at) represented; and (c) the difficulty of establishing such an interim government without Republic representation. More- over, the Netherlands Government believes that maximum etinomic benefits can only be realized by restoring Dutch control over Republican-held areas. Guerrilla Warfare The Dutch have already captured the Republic capital and practically all Republican leaders. Despite this success and the apparent lack of effective Republican resistance, US security interests have been seriously threatened by the Dutch "police action." The removal from power of the pro-US moderates in the Republic has paved the way for the rise of a resistance move- ment led by militant Communists and by extremist elements formerly held in restraint by the Republican regime. In the initial stages, the Dutch can be expected to have considerable success in maintaining law and order throughout the Republic. The nationalist aspirations of the Indonesians, however, will continue to conflict with the Dutch desire to retain a maxi- mum amount of control. Guerrilla warfare and sabotage will increase and compel the Dutch to continue the commitment of substantial military forces in Indonesia. These commit- ments will delay AM Dutch contribution to a western European defense system and will constitute a continuing drain on the finances of the Netherlands Government. Soviet Reaction The present situation in Indonesia will be exploited in the Security Council by the USSR, which will champion the aspirations of colonial peoples and accuse the US of complicity in the Dutch action. Further, the USSR can be expected to capitalize, throughout the Far East, on the decline of US prestige which will follow the collapse of GOC mediation effort in which the US has had a leading role. - 2 - SE Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 5U T�tt' GENERAL t 1 DEc- 1948 870 1. Reaction to Dutch moves in Indonesia�US Embassies London and Canberra report that representatives of the Foreign Of- fices In both countries have indicated their strong displeasure with the Dutch action in Indonesia. The UK Foreign Office, however, has indicated that it would be most reluctant to Invoke sanctions under the UN Charier because of: (a) appar- ent Dutch determination to carry on "police action" despite the threat of sanctions; and (b) fear for the effects an rela- tions within the western European union. US Embassy New Delhi, meanwhile, has been reliably Informed that the Indian Government is so indignant over the Indonesian situation that it may break off relations with the Netherlands and deny the Dutch the use of Indian ports and airfields. 2. US Proposes resumption of Austrian treaty talks�The De- partment of State is transmitting, subject to British and French agreement, a note to the Secretary General of the Council of Foreign Ministers concerning possible Austrian treaty negotiations. The note proposes that the US, British, French, and Soviet deputies meet in London about 7 Feb- ruary 1949 to discuss the basis for the reopening of such negotiations and the early conclusion of a treaty reestablish- ing Austrian independence. FAR EAST S. CHINA: Continuation of US aid for South China urged--The Chief of the joint US Military Advisory Group (JTJSMAG) at Nanking estimates that the Nationalist army will be defeated In the immediate future and that the National Government will either be forced to leave Nanking or be overthrown within the next few weeks. The JUSMAG Chief believes that the Document No. 01 NO CHANGE in101ass. DECLASS=ED Class. CH:t11..ED TO: TS n 4 Apr 77 Auth: id. 77/1763 Date: 6 Nimit 1978 By:. el I Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 TO Communist armies will not stop at the Yangtze after defeating the Nationalist armies in Central and North China but will continue south, destroy all remnants of the Nationalist forces in South China, and establish a Communist-dominated govern- ment over all China, possibly excepting Taiwan. The jUSMAG Chief considers that further milita.ry and economic aid will have little effect on the National Government's position either now or in the future. He recommends, however, that as long as the present National Government continues, US aid should not be withdrawn abruptly but should be continued in South China and Taiwan. He believes that the abrupt curtail- ment of US aid would be widely condemned and would be a blow to US prestige. 2 TOP Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 �Isrtelk GENERAL 1. US views on Security Council action on Indonesia--The De- partment of State has advised the US representative to the Security Council in Paris not to "assume a position of out- standing and solitary leadership" in the Indonesian case, but to act in association with as many St members as possible. The Department considers that the Security Coun- cil's first objective should be to call upon the parties in the dispute to desist from further hostilities. (C/A Comment: CIA believes that the USSR may be preparing to take the initiative in the Indonesian case when the SC reconvenes on 22 December.) 20 DEC 1948 _ .� -Dutch-to_ . - sist in police action--US Embassy The Hague (expresses its belt,' that the Dutch intend to carry through With thei: . .: , .,. - rations in Indonesia rega action by the UN Security Council. The Embassy note t the Dutch public regrets that police action was 1947 and will now insist that the Government carry this new action to a successful completion even in the face of international condemnation. FAR EAST 869 5-S ct4 S 2. CHINA: US Embassy ews cessatim of munitions shipments-- S s US Embassy N e resses its belief t the stoppage of US munitions shipm. , I -National- � vernment at this time would inevitably be interpreted as confirmation of the al- ready growing belief that the US is "through with" Chiang Kai-shek and favors a coalition with the Communists. The Embassy states that cessation of munitions shipments would c tainly discourage forces, both in and out of the Government, wish to continue resistance and would inevitably doom their rts to failure. If US policy continues to involve support of Document No. Wit NO CHANGE in Class. 0 1y1 T.E.LASSIFIED Class. Ci iJ T3: TS S 4 Apr 77 T DDA 77,1-7G3 t : 1 6 ma m8 Approved for Release: 2018/10/18 006749335 7 z Approved for Release: 2018/10/18 006749335 these anti-Communist elements, the Embassy recommends that future munitions shipments be diverted to Canton rather than Taiwan, because: (a) when Chiang Kai-shek is forced to flee Nanking his headquarters will probably fall back first to Nanchang, then to Canton, and only at a much later date to Taiwan; and (b) military shipments to Taiwan would at this stage increase the known concern of the native Taiwan- ese over the influx of National Government organizations to Taiwan. Li Tsung-ien's leadershi uestiec cned.--US Embassy Nanking has been informed that Vice President Li Tsung-Jen has been negotiating with Communists in Shanghai and Hong Kong in an effort to secure Communist recognition of the present Government under his leadership, when and if Chiang Kai-shek leaves office. According to the Embassy, Li also approached Soviet officials in Nanking who expressed the opinion that the Chinese Communists would not recognize a continuation of the present Govern- ment, but perhaps would recognize a "temporary provisional government" under Li's leadership. The Embassy questions Li's ability to head a new government, however, because Li: (a) is confused as to the most suitable course of action; (b) appears to lack the courage to ask Chiang Kai-shek to retire as long as Chiang controls the local garrison and secret police; and (c) is not included in consultations among other Government leaders over the question of Chiang's succession. -2 Approved for Release: 2018/10/18 006749335 U Approved for Release: 2018/10/18 006749335 U TOP FAR EAST 1. CHINA: Ce....stagazip'� aid nor* of Yanortze urged--The 411MV- T5 Chief of the Joint US Military Advisory Group (JUS)LAG) at Nanking recommends that the US immediately stop all mili- tary and economic aid from entering China at any point north of the Yangtze River, except gar supplies going to Tsingtao for the exclusive use of personnel there. The JUSMAG Chief considers that the military situation in East Central China is hopeless and believes that the Government faces com- plete military defeat as a consequence of losing its forces now operating in this area. He is convinced that Fu 'rso-yi, the North China Nationalist leader, has made a deal with the Communists. Document No. NO CHANGE in Class. 0 &DECLASSIFIED Class. CILI.ED TO: TS S , 4 Apr 77 Auth 7.7/1 7 S 3 Da t e 16.144L478 By : TOP RET Approved for Release: 2018/10/18 006749335 - Approved for Release: 2018/10/18 006749335 50 s GENERAL t. 17 DEC 1948 roma currenc The Department of State has advised US representatives in Lon- don and Paris of its view that the work being done on the Berlin currency situation by the Security Council's Experts Committee is most likely to be unfruitful. The Department therefore con- siders that the western expert& dealing with the committee should "remain aloof" and not bargain, in order to avoid being led by constant pressure to make piecemeal concessions to the Soviet viewpoint without having foreknowledge of the Soviet counter-proposals. The Department believes that by refusing to negotiate with the Committeebthe western bargaining posi- tion can be preserved and the western powers can "await with some confidence" a report from the committee, if one is made, which would steer a middle course between the op- posed views of the western powers and the USSR. The Depart- ment declares that only after such a report has been analyzed In the light of political conditions then prevailing in Berlin can the western powers jointly determine whether the report constitutes a useful starting point for negotiations through the intermediation of a neutral group. 867 2. Lizonlaskandlialy_to_sm TiLlelaktialLIS --The Italian Legation In Belgrade has informed US Ambassador Cannon that an Italian- Yugoslav agreement has been reached for the opening of nego- tiations in both Rome and Belgrade on currently outstanding differences. Such negotiations will reportedly deal with repar- ations, compensation for Italian property confiscated by the Yugoslays, fishing rights, regulation of border traffic, and exchange of prisoners. Cannon comments that development of such discussions indicates a Yugoslav desire to clear the ground for more comprehensive negotiations with Italy. Document No. ocpt NO CHANGE in Class. 0 DECLASSIFIED Class. CHNGED TO: TS S C DDA Alamo, 4 Apr 77 Auth: DDA 77/1763 Da 1 6 MAK 1918 By: 0 TO ET Approved for Release: 2018/10/18 006749335 5-15 Approved for Release: 2018/10/18 006749335 TOP ET 3. US requests clarification of Dutch intentions in Indonesia--The Department of State has informed Dutch representatives in Washington that if it is the intention of the Netherlands Govern- ment to continue negotiations with the Indonesian Republic, the Government should issue an authoritative explanation to that effect1 to accompany the Dutch reply to Indonesian Premier Hatta s letter of 13 December. The Department considers that the Dutch letter of 16 December leaves little leeway for such negotiations. US Embassy The Hague reports that the Dutch Foreign Office has described the Dutch letter to Hatta as "truly the last possible move from the Netherlands side." The Dutch Foreign Minister has informed the Embassy that he can keep the situation within the Dutch Government `in hand" only until 18 December. The Embassy considers that the Dutch reply represents a demand for "immediate" Repub- lican participation in the interim government; the Embassy Indicates that the Dutch intend to go ahead in any case and do not envisage a resumption of negotiations through the Good Offices Committee. (CIA. Comment: CIA considers that: (a) a negotiated settlement is no longer possible in view of the apparent in- ability of the opposing sides to compromise their differences; (b) the Dutch remain firmly determined to establish the interim government either with or without the Republic; and (c) Dutch police action in the next few weeks is a distinct possibility.) FAR EAST 5 4. CHINA: Mutiny amony Nationalist North China forces--The Aihif r Assistant US Naval Attache in Peiping has been told by Fu Tso-yl, Nationalist Commander in North China, that at least three of his Nationalist armies and part of the Chinese Air Force have re- i fused to obey his orders and that local garrison troops are act- i ing independently. Fu also declared that unless these troops are ordered by Chiang Kai-shek to obey Fu, Peiping will fall. The Assistant NA further reports that Fu's effective forces now total only one division and that the bulk of his remaining forces have been cut off between Kalgan and Peiping. - 2 - TO ET Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 50 TOP ET GENERAL 416 DEC 1948 866 1. Dutch to angeeLeremier--Foreign Minister Stik.ker 1-5 has informed US Charge Steere at The Hague that he has been able to win Dutch Cabinet agreement for the dispatch of a reply to the 13 December letter of Indonesian Premier Hatta. Stikker had previously told Steere that: (a) he had no confidence in the possibility of reaching any agreement acceptable to the majority of the Dutch people; (b) the situation in Indonesia is deteriorating steadily; (c) there is a real danger of the Dutch Cabinet falling en this issue; and (d) there is much sentiment in the Netherlands for a strong course of action in Indonesia. IMEggLEILay__u_t_joid Sec it debate on Department of State had advised the US delegation at the UN In Paris that it much prefeirs the avoidance of Security Council discussion of the Indonesian question at this time. FAR EAST 2. CHINA: Central China Nationalist forces thouglidefeated�US s -I Embassy Nanking reports that the battle in the Pangfou-lisuchou area is entering its final stage with an early Communist victory assured. The Embassy believes that the Communists possess the capability for crossing the Yangtze in force with little prior pre- paration and for occupying the Shanghai-Nanleing area shortly thereafter. Although the US Military, Naval, and Air Attaches in Nanking concur in the view that Central China Nationalist forces have been defeated, they are of the opinion that a Communist crossing of the Yangtze River may be delayed for an indefinite period as a result of the depletion of Communist supplies. The Embassy also reports that strong opposition to the National Government enists in South China and that the Govern- ment might even face armed opposition in attempting to move to Canton. - 1 - Document No. 091 NO CHANGE in Class. 0 DECLASSIFIED Class. CHANGED TO: TS S C TOP ET DDA Memo, 4 Apr 77 Auth: DDA R-zi. 77/1763 Date: 1 6 MAR 1978 By: 021 Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 TOP RET � (CIA Comment: CIA concurs with the Service Attaches In believing that all effective Nationalist forces in the Fisuchou- Pangfou area have been successfully contained by the Communists. CIA considers it quite possible that the Communists have tempo- rarily retarded operations, as a consequence of their severe losses, in order to regroup and resupply prior to dressing on Nanking.) Chiang asks US advice.:L2pAgon ste down"--US Ambas- sador Stuart has recently been asked by an emissary of Chiang Kai-shek for advice as to whether Chiang should withdraw from active control of the Government. Stuart replied that US nationals had gained the impression that the great mass of Chinese people desired the retirement of Chiang Kai-shek, whom they regard as the principal obstacle to peace. Stuart also told the emissary that what the people of China want and are willing to support is the dominant factor in the formation of US policy as China. �TO ET Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 00674935 50 GENERAL 15 DEC 194 865 1. US-Dutch res� to Indonesian Premier's letter--The has ye Cochran In Batavia that the 13 December letter from Republican Pre- mier Matta offers adequate and practical grounds for the re- sumption of negotiations, either within or outside the Good Offices Committee. The Department has authorised Cochran to telegraph the contents of the later to the UN Security CounciL US Embassy The Hague reports meanwhile that Netherlands Foreign Office officials consider the letter to be "a major concession" by the Republic. apition cmdonesla --Premier Spank has told US Embassy Brussels that he approves the US position on Indonesia and feels that the Dutch are being "obstinate" on this question. Spank views the pressure of Dutch military leaders for military action in the area as "very dangerous," and fears that such action, unless it were Immediately and sweepingly successfnl, would create a situa- tion in Indonesia similar to that in Greece. Speak proposes that a Washington meeting be held of top-level officials of the governments constituting the GOC (US, Belgtura, and Australia). Spank considers that such an "ad hoc GOC" meeting could produce results by summoning the Republican Premier and the Dutch Foreign Minister and making strums statements to both. (CIA Comment: CIA considers that this endorsement of the Batts letter by the US, combined with Belgian support of the US position, will probably persuade the Dutch to re- sume negotiations with the Republic, thereby postponing the possibility of Dutch "police action" and the necessity for Security Council action.) TOP Document No. o NO CHANGE in Class. 1< DECLASSIFIED Class. CH;ED TO: TS S DDA Memo, 4 Apr 77 DDA Rif(1. 71/.1.763 e: dOid By: 3-5 Auth: Approved for Release: 2018/10/18 006749335 fl Approved for Release: 2018/10/18 006749335 50 TO ET GENERAL 14 DEC 1948 1. Indonesian Republic's position on renewal of negotiations--US Representative Cochran in Batavia transmits a etter he has received from Prime Minister Ilatta, which outlines in detail the present Republican position. Batta's letter indicates that the Republic accepts without qualification the principles of the Renville Agreement and emphasizes that the Republic re- cognizes the Netherlands' sovereignty in Indonesia during the Interim period. The letter specifies various concessions which the Republic is prepared to make and asks that the Netherlands voluntarily impose limitations, to be clearly defined in an agreement, on the exercise of its sovereign power. Cochran considers that this letter merits careful consideration and expresses the hope that the Netherlands Government will not only take cognizance of this reasonable approach but will agree to the renewal of negotiations and the postponement of the establishment of an interim government. FAR EAST 884 1- 5 2. CIIINA: Possibleurgirement ofshmiLlfai -shek - -Nationalist NAVY-Tf Vice President Li Tsung-jen has told the US Naval Attache in Nanking that Chiang Ical-ahek is considering the possibility of "stepping-down." According to the NA, Li suspects that Chiang may merely be attempting to forestall the develop- ment of a coup which would force him from power. Li report- edly plans to avoid being forced to accompany Chiang if the Generalissimo withdraws from Nanking without turning power over to Li. Li also told the NA that on becOming head of the National Government he plans to: (a) cease military operations and open peace negotiations; (b) call a conference of people's representatives to draw up a "realistic platform"; (c) dis- charge corrupt officials; (d) request publicly that US economic and industrial aid be distributed equitably regardless of previous political and military affiliations; and (e) move the capital to Peiping. Document No. 06r N9 CHANGE in Class. 0 DECLASSIFIED ss. C 2D TO: TS S C DDA Memo, 4 Apr 77 Auth: DDA FEG. 77/1763 Date: By: 0-a r TOP Approved for Release: 2018/10/18 006749335 � 4 Approved for Release: 2018/10/18 006749335 (CIA Comment CIA believes that decisive political developments, possibly involving the retirement or flight of Chiang Kai-shek, can now be expected at any time. A successor government under Vice President Li would find it difficult to carry out a program of its own; such a govern- ment's attempts to negotiate a settlement with the Communists would lead, sooner or later, to the establishment of a Com- munist-controlled coalition government for China.) THE AMERICAS 3. COSTA RICA: 29ssible counter-invasion_of Nicaragua�US Ambassador Shaw in Managua has transmitted a detailed report which indicates that the recent invasion of Costa Rica has had both "moral and material assistance" from Dictator Somoza of Nicaragua. 3een told by a high Costa Rican official that all forces in Costa Rica, including the Caribbean Legion, will combine to attempt a counter- invasion of Nicaragua if they are otherwise unable to dispel the revolutionary forces now invading Costa Rica. (CIA Comment: Unless the present disturbances in Costa Rica are quickly suppressed, inter-governmental re- lationships in the area will rapidly deteriorate to the point where violence and bloodshed become generalized. In such an event, US lives and property, especially at points adjacent to airports, will be endangered.) 4. GUATEMALA: mutat_ that the chi uuatemaian armed forces has approved a plan for an army coup during the week ending 18 December. NAVY -S C 14-S - 2 - TOP ET Approved for Release: 2018/10/18 006749335 fl Approved for Release: 2018/10/18 006749335 50 TOP GENERAL 1. Secuagy Concil dehitte_cux Indonesiatked--US Representative Cochran in Batavia points out that the Nether- lands Government has closed the door to negotiations between the Indonesian Republic and the Netherlands by rejecting the premises of the recent US aide-memoire. Cochran believes that there is "no alternative" to inimediate Security Council debate on the Indonesian question. Be therefore recommends that the US withdraw from the Good Offices Committee and reiterate in the Security Council that the US favors the "draft agreement" officially accepted by the GOC as a�basis for negotiation. ( The Dutch reply to the US aide-memoire tn.dicts the Republic for its failure to recognize the sovereignty of the Netherlands during the interim period prior to the establishment of a United States of Indonesia. The reply declares that unless the Republic recognizes Dutch sovereignty, the Netherlands Government will be obliged to make a "final decision" on the method of "implementing its pledges to the peoples of the Netherlands and Indonesia.") THE AMERICAS 2. COSTA RICA: Agreement with Caribbean Legion reached--A CIA source reports that the Costa Rican Government and the Caribbean Legion have reached an agreement providing for the inclusion of Legion officers, men, and materiel in the Costa Rican army. (CIA Comment: CIA believes that in order to obtain the support of the Caribbean Legion, President P igueres of Costa Rica has probably had to promise future support for the Legion In destroying the Somoza regime in Nicaragua. CIA estimates that the Legion will now also have greater Guatemalan assistance.) 18 DEC 194 863 cr A -.5 Document No. No CHANGE in Class. IKECLASSIFIED Class. TS DDd Memo, 4 Apr 77 TO' Orith: LOA Riu. Date: - By: 021 Approved for Release: 2018/10/18 006749335 r!- Approved for Release: 2018/10/18 006749335 50 TOP s 11 DEC 862 NEAR EAST - AFRICA 1. TRANSJORDAN: US reco tion ur ed--The US Representative at Amman concurs in the be e o ediat Bunche that extension of de facto recognon by the US to Transjordan might or have a desirable stabilizing effect on the work of the proposed UN conciliation conimission and contribute to a final settlement of the Palestine problem. The US Representative considers that US recognition, by putting Transjordan on an equal footin.g with Israel and Egypt, would help to overcome the reluctance of Transjordan to extend Current talks with the Israelis to the political level. US Ambassador Douglas in London transmits his belief that the British Foreign Of/Lice would welcome US East stabi11t3r., recognition of Transjoan rd as a definite contribution to Middle Doculz2ent No. 1 NO CHANGR in Class. $(.DzaLASSI.P.TZ'D Class. CILI.r.?f-1,:.D TO: TS S .af 0 , Apl-, 77 Date: Auth: LTA 4 /1'7(33 1978 Bsr: TOP ET Approved for Release: 2018/10/18 006749335 C ss SS fl Approved for Release: 2018/10/18 006749335 EUROPE 10 DEC 1948 861 1. GERMANY: East Berlin mayor may be deserting to West-- 5-16 US Ambassador Murphy in Berlin has learned that Friedrich Ebert, the newly-elected mayor of the Soviet-approved east Berlin government, has informed the western powers that he wishes to abandon his post and flee from Berlin. (CIA Coniment: CIA considers it possible that this report may be a "plant" designed to embarrass the rump east Berlin government in its relations with the USSR. If carried out, Ebert's flight will: (a) provoke a vitriolic Soviet propaganda campaign in which the USSR will accuse the western powers of kidnapping; and (b) possibly prompt the USSR into initiating as extensive a terroristic campaign In the western sectors of Berlin as its limited capabilities will permit.) 2. FRANCE: Auriol expresses fears of Governmeqt downfall-- c 1*-5 French President Auriol has confided to US Ambassador Caffery his fear that the Queuille Government may fail to procure Assembly approval of the projected budget and fis- cal reform measures. Auriol declared that If the Govern- ment should consequently resign, he would not know whom to call upon to form a new government. Auriol said that only as a last resort would he call upon De Gaulle and ex- pressed the opinion that De Gaulle would not in any event be able to secure the necessary vote of confidence from the Assembly at this time. (CIA Comment: CIA believes that although the Gov- ernment faces a real danger of falling on the question of the fiscal proposals, President Auriol has expressed his fears to Ambassador Caffery in the hope of obtaining US support for these measures.) Document No. OU _ NO CHANGE in Class. )6 DECLASSIFIED Class. CHAIT-'1]D TO: TS S DDA Memo, 4 Apr 77 th: DDA RLG.. 77/1763 ECg-f)ate: 16 MAR 1978 By: Oa Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 TOP 8. NE'THERLANDS: Thartkan interiminesneant-- 5'5 The Dutch Foreign Minister has informed S Embassy The Rape that the Nethsrlands Cabinet has decided: (a) to pro- ceed immediately with measures to set up an interim federal government for the Netherbnds East Indies, with provision for participation by the Indonesian Republic at some later date; and (b) to inform the Good Offices Committee of the Dutch Governraentls conclusions that further negotiations with the Republic offer no possibility of securing an agree meat which would be acceptable to the Netherlands. (CIA Comment CIA believes that the announcement by the Dutch of an interim government without the Republic will precipitate a Republican appeal to the Security Council. if the SC fails to obtain further negotiations between the parties, the repercussions in Indonesia will probably lead to a renewal of Dutch "police action.") FAR EAST 4. CHINA: asitattiCEDiatainfintMatiALAili--The US Military Attache in Nanking believes that the battle for Central China is approaching its conclusion. The MA re- ports that over two-thtrds of the encircled Nationalist Army group southwest of Ranch= have been eliminated and the remainder will probably be wiped out in the next three days. The MA considers that the fall of these units will precipitate the elimination of the encircled Twelfth Army Group southwest of Bahsten. The MA adds that the Nationalists appear to be evacuating Pangfou, their last line of defense north of the Yangtze, in order to avoid a Communist encirclement maneuver. (CIA Comment: CIA believes that the battle for Central China is rapidly nearing its conclusion and that Communist occupation of Nanking may nbw be only a matter of weeks.) - 2 - CRET Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 � - 1 US not tojlaticipatejn Shanghatjornmnt turov. The Department of StateUS Consul General Shanghai not to participate in any joint consular action which would place the US or its representatives in the role of guaran- tor or mediator in the turnover of that city to a successor Chinese government. The Department adds, however, that the Consul General may take action based on humanitarian considerations as long as It is clearly understood that such actions do not involve political commitments on the part of the US. Continued presence of US Navy at Tsinatao armed-- The Commander US Naval Forces Western Pacific believes that the planned withdrawal of the Chinese Navy from Tsing- tao should, by removing a possible military objective for Communist attack, strengthen the security of US forces in Tsingtao. He points out that by remaining at Tsingtao the US Naval Forces can insure a minimum of disorder in a future turnover of authority at the port. He considers that the Navy's presence at Tsingtao indicates a determination to protect US lives and interests throughout China, gives reassurance to all foreigners in China, and provides a stabilizing influence on the Chinese situation by compelling the respect of both Chinese Communists and Nationalists. He warns that the withdrawal of the US Navy would precipitate violent disorders, loss of life, and widespread destruction of property in all the large communities in China. TO - 3 - Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 9 DEC 1948 GENERAL 1.s e iM.Igii....monliLNIShugatgat--US Embassy. The Hague expresses serious concern over possible repercussions In the Netherlands caused by US representations to the Dutch Government on the current breakdown of negotiations in Indo- nesia. The ;Embassy fears that such repercussions could lead to the fall of the Government and considers that some helpful step is needed to ease the Government's situation. 2. Indonesian Republic to appeal for UN action�The US delega- tion to the UN reports from Paris that representatives of the Indonesian Republic have urged prompt Security Council action on the Dutch-Republican dispute before the Dutch Cabinet has made Its "final decision" on Indonesia. The Indonesian Re- public reportedly seeks an SC resolution which will call upon both parties to avoid military action and will expand the author- ity of the present UN Good Offices Committee in dealing with the dispute. 880 5-s -s 3. UN Media considers time - to force Arab ewish - meat-- 5-5 According to US Consul Burdette in rusa m cting IN r 5-5 Bunche believes that the psychological moment has arrived to CIA -5 exert strong pressure for an Arab-Jewish agreement. Bunche points out that: (a) Lebanon desires no further involvement in Palestine; (b) Syria is incapable of military action; and (c) King Abdullah of Transjordan has "pleaded" for strong UN directives that an armistice be reached with the Jews. Bunche adds that the main difficulty has come over Jewish-Egyptian negotiationa,but that the Egyptians have now agreed to permanent truce lines. According to the US delegation at the UN, Bunche also regards the failure of the US to recognize Transjordan to be a real factor in the problem because non-recognition has made Transjordan more hesitant about taking the initiative in political discussions with the Jews. Document No. 00 NO CHANGE in Class. 7 DECLASSIFIED Class. CHAZCIED TO: TS S C TO CRET DDA Memo, 4 Apr 77 Auth: 877 /1703 Date: By: Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 50 TO -ET 859 8 DEC 1948 GENERAL 1. UAL to takeBritish S 4 Foreign Office official has informed US Embassy London that the UK has decided to take no further initiative regarding Palestine at the General Assembly. The Foreign Office has instructed the UK delegation at the UN that it should not join In'any lobbying" and should advise the Arab delegates of the British view that their opposition to the UK draft resolution: (a) is highly irresponsible and prejudicial to the best interests of the Arabs; and (b) makes it practically impossible for the British delegation to attempt to cooperate with the Arab dele- gates any more. FAR EAST 2. CHINA: jatlonalIst Navy nt Ts tao�US Embassy Nanking and the Commander US Naval F �aces Western Pacific have been informed that Chiang Kai-shek has approved plaits for the removal of the Tsingtao Naval Training Base and other naval installations to southern Taiwan. The Embassy indicates that the Chinese Naval Academy, now at Tsingtao, is to be established on the main- land at Amoy. Fall of Nanking thought imminent�The US Naval Attache in Nanking has been informed by a usually reliable source that the feeling is prevalent in the Nationalist High Command that Nanking can hold out no longer than ten days to two weeks after Government forces in the Hsuchou sector have been annihilated. The NA reports that all civil and mill - tary aircraft available are to be used in an effort to supply the encircled Nationalist units. The NA adds that Chiang Kai- shek is pleading with General Chentniult to re-form the American Volunteer Group by any means possible. Document No. 09r - 1 - - S TS 14-5 ti-S NO CHANG..E..in :Class. DECLASSIFIED Class. CHAII:IM TO: TS S C DDA Memo, 4 Apr 77 TO CRVIt h: DDA RLC. 77/1763 Date: .1 6 IYIM B3-: 02 r Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 3CV9Er1S7 The Military Attache in Nanking transmits a Nationalist High Command report that the two surrounded Nationalist groups In the Hsuchou-Pangfou area can hold out for only a few more days. The MA considers that the situation in this sector is hope- less. -2 TOP RET Approved for Release: 2018/10/18 006749335 1 � Approved for Release: 2018/10/18 006749335 50 GENERAL 7 EC 1948 858 1. US nolicv concersing aid to Greece�The Department of s - State has informed US Embassy Athens that no attempt will be made to provide US support for the establishment of a Greek army large enough to seal the northern borders of Greece or to defend Greece against full-scale invasion. The Department indicates that US military aid will be made available to Greece only to the extent required to eliminate large-scale guerrilla activity and thereafter to maintain reasonable internal security. The Department declares that military aid furnished to Greece will be evaluated in relation to the requirements of other countries which are united with the US in resisting Communist expansion. The Department adds that the US will not reduce its assistance below that required to prevent the domination of Greece by Communist elements without giving careful consideration to the impact such a decision would have on overall US objectives. Document No. 61,3 NO CHANGE in Class. 0 ix DECLASSIFIED Class. CHANCIED TO: TS S C DDA Memo, 4 Apr 77 loath* DDA REG. 77/1763 Date I j_s_stAidaza_ By: _WA_ Approved for Release: 2018/10/18 006749335 1 Approved for Release: 2018/10/18 006749335 TOP 6 DEC 1948 50 857 GENERAL . Sealing of Greek northern border held necessarz--US Mini- ster Heath in Sofia feels that the recent efforts of President Evatt and other General Assembly officials to sarrange for the "conciliation" of Greece's dispute with the northern neighbors are irrelevant and serve to confuse the real issue. Heath considers that the US should take every opportunity to point out that the dispute is not an ordinary border quarrel but a blunt case of interference by three Soviet dependencies in the internal politics of a UN member. Heath believes that completely cutting off outside aid to the guerrillas is the only solution to the Greek problem, and he suggests that the US wait no longer to make the sealing of Greece's northern border the immediate objective of its Greek policy. (CIA Comment: .CIA considers it unlikely that the current talks between Greece and the northern neighbors will have any constructive results, notwithstanding optimistic reports from President Evatt of the General Assembly.) FAR EAST 2. CHINA: National Government. 1-a Embassy Nanking reports that a "very considerable exodus" of Nationalist officials from Nanking is already under way. The Embassy indicates that certain key Government figures will remain until the last moment in order to lend credibility to public announcements that the Government intends to stay. The Embassy estimates that the Nationalists will not be able to move the entire government and will have to abandon the "bottom third or half" of the Nanking personnel. Document No. 60 TOP S S ,�� S NO CHANGE in Class. 0 DECLASSIFIED lass. CHANCED TO: . TS S C 2( DDA Memo, 4 Apr 77 Auth: DDA RLG. 77/1763 Date: 16 MAR 1978 By: 021 -. .,.,. Approved for Release: 2018/10/18 006749335 fl Approved for Release: 2018/10/18 006749335 TO ET 3. INDONESIA: Dutch-Republican talks broken off--The US representative to e UN Good Offices Committee reports that: (a) the recent Netherland-Republican conversations have broken down, and (b) the Dutch mission is returning to The Hague where it will recommend that a provisional government be set up immediately without the participa- tion of the Indonesian Republic. The US representative Indicates that the talks broke down because of the Republic's Insistence on continued control of its own military forces and because of the failure of the Dutch to meet the Republican Premieis request for a gentleman's agreement not to use troops in the Republic's territory without the consent of the projected federal government. (CIA Comment: CIA believes that the Dutch will proceed without the Republic in the establishment of an Interim government but will not resume "police action" immediately. The Dutch will probably wait until accelerat- ed economic and political deterioration in Republican terri- tory have precipitated incidents sufficiently serious to bolster Dutch claims that military action is necessary.) TOP .2 Approved for Release: 2018/10/18 006749335 1 J Approved for Release: 2018/10/18 006749335 50 TOP SE GENERAL . US may be blamed for Latin American coupg --US Ambas- sador Warren in Asuncion expresses concern over the fact that political instability in various Latin American countries may be conducive to the establishment of further military governments similar to those recently set up in Peru and Venezuela. Warren suggests that the use of US arms and munitions by the groups accomplishing such military cows may lead democratic elements in Latin America to blame the US for such coups. The Ambassador further expresses the opinion that the present US recognition policy plays into the hands of military groups and could contribute to eventual dominance by the military caste throughout Latin America. (CIA Comment: C IA considers that military govern- ments established to date would have come to power with or without US arms and munitions. CIA agrees, however, that democratic elements favoring the civilian governments displaced by such coups may feel that US arms made the coups possible.) Document No. NO CHANGE in Class. 0 ly( DECLASSIFIED Class. CHANCED TO: TS S C DDA Memo, 4 Apr 77 Auth: DDA RE1G9.77B/y17:63 Date: 1 6 MAR 78 TOP StET Approved for Release: 2018/10/18 006749335 4 DEC 1948 R5 6 A Approved for Release: 2018/10/18 006749335 50 TOP ET GENERAL 1. US views on policing Shanghai�The Department of State Ms informed the US Consul General in Shanghai that it is disturbed by the possible implications of an international police force for Shanghai, as proposed by the ma.yor of Shanghai for the period of transition to Communist rule. The Department considers that the establishment of inter- national control during this period would involve: (a) the use of a considerable force; (b) the problem of ensuring the city's food supply; and (c) the necessary inclusion of Soviet forces. The Department also believes that, if such an international force assumed control, the Communists might not only avoid responsibility for municipal rule in Shanghai until the time seemed propitious for taking over, but might try to precipitate clashes between the inter- national force and Communist underground elements. The Department concludes that the risks aimd implications of an emergency landing of US Marines to protect US citizens appear far less serious than those involved in policing the entire city. 2. Dutch "pessimistic" about Indonesian discussions�US Ambassador Baruch reports from The Hague that Nether- lands Prime Minister Drees is "quite pessimistic" about the outcome of the Dutch-Republican conversations in In- donesia. Drees expressed to Baruch the opinion that the Republicans are relying absolutely on their impression that the US and the UN will not permit Dutch military action In Indonesia. Baruch received from Drees the impression that although the Dutch regard a peaceful settlement as still possible, Dutch military action is inevitable ff an early settlement is not reached. The US representative to the Good Offices Com- mittee in Batavia reports that Dutch-Republican conver- sations are now at an extremely critical sthge. The Document No. tSI) NO CHANGE in Class. El I( DECLASSIFIED Class. CHAIICED TO: TS S C DDA Mamo, 4 Apr 77 TOP ETuth: pil,R'pG. 77/1763 "'m 978 Date: By: �air - 1 - 3 DEC 1940 855 Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 TOP RET representative indicates that he hopes to secure from Re- publican Premier Ratta a clarifying statement on crucial military questions, which may be effective in preventing the Dutch delegation from abandoning the conversations. (C/A Comment: The key issues in the Indonesian dispute continue to be the 'method of implementing the truce and the disposition and control of Dutch and Republican military forces. CIA considers that: (a) it is highly unlikely that the Bette Government can meet the present Dutch de- mands and survive; and (b) the continuance of Dutch-Repub- lican conversations and the averting of military action depend primarily on what pressure the GOC can bring to bear upon the Dutch.) -2- 1 CRET Approved for Release: 2018/10/18 006749335 _ Approved for Release: 2018/10/18 006749335 TOP GENERAL 42 DEC 1948 4 1. US urges tri rtite statement on Berlin�The Department of State has informed the US delegation in Paris that it inter- prets Marshal Sokolovsky's recent letter to the three military governors in Berlin as a blatant attempt to place responsibility upon the western powers for the Berlin elections of 5 December, thus making them appear responsible for splitting the city's administration. The Department considers that: (a) this letter, together with recent events in Berlin, provides clear evidence that the USSR is using illegal methods to secure control of Berlin; (b) a continuation of such methods may well constitute a threat to peace equivalent to that already created by the blockade; and (c) the western powers should issue a statement which would denounce these Soviet tactics and demonstrate Soviet interference with UN efforts to solve the Berlin ques- tion. US Ambassador Smith in Moscow expresses his view that it would be advisable for the US delegation at the UN to issue a strong US statement on this matter. 2. US position on Tri olitania�The Department of State has reminded the US delegation at the UN that a US vote against Italy on the disposition of Tripolitania may not only damage US prestige in Italy but might endanger the present Italian Government. The Department has therefore instructed the US delegation: (a) to avoid voting against Italian trusteeship for Tripolitania, if possible; and (b) to regard a postponement of the Italian colonies settlement as the only desirable alter- native. The US delegation has also been instructed, in view of the US commitment to obtain a British trusteeship for Cyrenaic,a this year, to secure British approval before ad- vocating general postponement of this question. Document NO. t6 NO CHANGE .in Class. ^ li'DECLASSIFIED Class.. ..CHANGED TO: TS S C DDA Memo, .4 Apr 77 Autht DDA .REG. 7711763 TO CRET ��� Date; 16 MAR 1978 By: orit 2.; 1 Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/1.8 006749335 � tor ET � . ,p_ogaimpjajbLimgeligalea..--According to US Embassy London,' the UK Foreign Office still intends to 'make every effort at the current General Assembly session to obtain a trusteeship over Cyrenaica because the British realize that the dances for obtaining such a settlement will be less favor- able next year. Although the Foreign Office will reportedly work for postponement of a decision on Libya if the US-UK program is not approved, the British are extremely anxious to obtain an immediate disposition of the two remaining�Italian colonies (Eritrea and Italian Somaliland). The UK considers its present expense in administering these two colonies to be burdensome. FAR EAST 3 _CHINA: Removal of National Goy.% ent t usually reliable Chinese official that certain Nationalist leaders have submitted to Chiang Kai-shek a plan for the removal of the Government from Nanking to Canton and Chungking. Source believes that Chiang has concurred in principle to this plan and has given his tacit consent. In transmitting this report, US.Em- , btassy Nanking commentz that it is hard to see how the trans- planted GOvernment will be able to perform its essential functions and exercise effective control over the unoccupied portions of China. The Embassy considers therefore that provincial administrations in west, southwest, and south � China will probably develop a considerable degree of auto- nomy. The US Military, Naval, and Air Attaches in Nanking report that the Nationalist Foreign Office is "definitely" going to Canton and the other departments will probably be skit between Canton and Chungking. The Attaches consider Document No. . NO CHANGE in Class. - 2 E] DECLASSIFIED Class, cD TO: TS S DDA Mio, 4 Apr 77 DDA 1763 TO Date: Approved for Release: 2018/10/18 006749335 By: Approved for Release: 2018/10/18 006749335 rr."1 TOP that the remaining Nationalist defense positions above the Yangtze River have been made hopeless by Communist in- filtration and the prevailing general confusion. (CIA Comment: CIA believes that this belated, poorly-organized effort to move the National Government will involve a serious loss of prestige and authority. The transferred Government will probably be unable to main- tain control in the greater part of non-Communist China for long.) THE AMERICAS 4. ECUADOR: Dissatisfaction within the army increasing-- The US Military and Air Attaches in Quito roport that a "subversive movement inside the Ecuadoran Army" is grow- ing fast and that the situation is very tense. The Attaches also report "strong indications" that an army coup may be expected. (CIA Comment: CIA reports indicate that the leaders of the dissident army groups are opposed to President Gabo Plaza. These opposition forces are capable of gaining con- trol of the army by effective collaboration.) - 3 - TO ECRET Approved for Release: 2018/10/18 006749335 Approved for Release: 2018/10/18 006749335 1 DEC 1948 50 TOP ET FAR EAST 1. CHINA: International force to protect i suggested-- According to US Embassy Nanldng, the rap deterioration of the military situation may soon lead to a breakdown of local authority in Shanghai. The Embassy points out that during the chaotic period preceding the Communist occupa- tion, foreign lives and property in Shanghai may be endan- gered. The Embassy suggests that in such circumstances the US Navy "may feel obliged to take unilateral action," sending forces ashore to protect US lives and to aid in an emergency evacuation. The Embassy considers that it would be more desirable if, by prearranged invitation of the Chinese Government, an international force performed such policing, and believes that such an arrangement would probably be acceptable to the Communists. Nationalists ma have "written off" Sha i--The Commander US Na o c s con- eiders that the National Government may have already "written off" the Yangtze delta. He bases this view on Information indicating that: (a) the Government has ordered the transfer within two weeks of all Shanghai ammunition and military supplies to Fukien Province; and (b) Nationalist troop strength in the delta area is less than 30,000. Document No. 01;'5 NO CHANGE in Class. El k