DAILY SUMMARY - 1951/01-1951/02

• Document Type: SPECIALCOLLECTION
• Collection: Daily Summary Collection
• Document Number (FOIA) /ESDN (CREST): 06749480
• Document Creation Date: January 11, 2019

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T SINFMENTIN T
27 February 1951
NOTICE
By decision of the Director of Central Intelligence,
publication of the CIA Daily Summary is discontinued
with this issmr
NF1 Ilkii
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EUROPE
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1. GERMANY: Adenauer-Schumacher reach unified view--
The US High Commission in Bonn expresses the view,
after conversations with Socialist leader Schumacher and
a representative of Chancellor Adenauer, that despite the
continued existence of other differences, Schumacher and
Adenauer are prepared to maintain a solid front against
Soviet-East German politico-propaganda attacks. The
Commission also believes they will easily command a
decisive majority in the Bundestag in support of their
position in the debate on the method for answering the
recent East German appeal for German unity. Adenauer
has accepted Schumacher's proposal that a written request
be made asking the four powers to establish a basis for
free all-German elections at the Conference of Foreign -
Ministers and that a strong propaganda line be developed
challenging East Germany to do the same if it is really
interested in German unity. The Commission has learned
that every effort will be made to hold the final Bundestag
meeting before the 5 March four-power preliminary meeting
in Paris.
NEAR EAST-AFRICA
2, FRENCH MOROCCO: New agreement between French and Sultan--
US Consul McBride in Rabat has been informed by a French official
that another agreement has been reached between the Sultan of
Morocco and the French Residency. According to McBride's
informant, French officials now regard the crisis as ended.
McBride comments that it probably is. He remarks that if so,
the result is that the French have received substantial satis-
faction concerning their demands while the Sultan has been
spared deposition, complete isolation from governing the country,
and the stigma of denouncing the Nationalist movement himself.
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FAR EAST
3. British estimate of Far Eastern situation--US Consul
General Langdon in Singapore transmits the British
appreciation of the situation in the Far East for the
week ended 22 February. According to this account,
the British consider that the recent Chinese Communist
counterattacks in Korea did not constitute the expected
main offensive
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EUROPE
1. YUGOSLAVIA: British do not expect attack before summer--
The US Military Attache in London reports that the British
War Office has made. a study of recent reports indicating an
increased possibility of an attack on Yugoslavia and has
concluded that "in default of confirmation, an attack on
Yugoslavia before early summer is unlikely." The War
Office cites as its reasons for this conclusion that: (a) the
Satellite armies will not have had time before then to
absorb the new Soviet equipment being received; and (b) a
projected "Joint General Staff of the Soviet-Satellite coun-
tries" is reportedly scheduled to hold its first meeting on
20 March 1951.
8 1951
152
Its
Allen in Belgrade foresees no imminent attack-- C144-5-
US Ambassador Allen in Belgrade submits his views on
the possibility of an attack on Yugoslavia. Warning that
the Embassy has few solid facts and no knowledge of
military activity in the Satellite states indicating pre-
paration for attack, Allen says he is inclined to doubt,
from a purely political point of view, that there will be
open aggression against Yugoslavia in the near future.
Allen reasons that Tito has kept his status as a Com-
munist and a neutral sufficiently clear to make any attack
�� on him appear as flagrant aggression in the eyes of the
world, including the majority of those who, like the British
Labor Party, are still unable to perceive "a clear-cut
case" of aggression in Korea. Allen grants "it is dangerous '
to presume" that the Cominform leaders will act logically,
but he retains the belief that West Germany is more likely
than Yugoslavia to be the next point of Cominform aggression
in Europe. Tito has told Allen that if the Kremlin decides on
an attack elsewhere in Europe, and endeavors simultaneously
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to keep Yugoslavia neutral, 'he will "participate with
all his force" in opposing aggression anywhere in Europe.
Allen comments that he does not have "full confidence"
in this protestation, but points out that even a benevolently
neutral Yugoslavia would be of great benefit to the West.
2. FRANCE: Burden of Indochina operation growing�US Em-
bassy Paris foresees difficulty for the French Government
in undertaking the additional burdens of the projected 1951
Indochina program, in view of new budget demands for
Western European defense and for such increased domestic
expenditures as import subsidies and family allocations.
In this situation, the Embassy believes that once again
serious doubts will arise in the Cabinet over whether France
can continue to give a blank check to bolster the Indochinese
economy. The Embassy believes that if the French Govern -
ment actually turns over economic control to the Associated
States, as determined by the Pau Conference, France will
lose its quasi-monopoly on the Indochinese market and some
prestige and influence in Indochina. The Embassy believes,
however, that no matter how unpleasant the change may be
for the French after their tremendous investment in Indo-
china, the French Government cannot avoid the hard fact that
the growing burden of the Indochinese operation is beyond
the capacities of the French nation if it is to keep its own
economy in order and make its necessary contribution to
the defense of Western Europe.
FAR EAST.
3. INDOCHINA: New government received "tepidly"--US Am-
bassador Heath in Saigon reports that the new Viet Govern-
ment has now taken over and that its reception by the public
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has been at best "tepid." Heath states that Bao Dai's
acquiescence to the new Cabinet, which accomplishes
none of the purposes of his. national union project, appears
to be a complete abandonment of his brief essay at real
leadership. Heath believes there is not one figure in the
Cabinet capable, on the basis of record, of providing popular
inspiration or enlisting public enthusiasm; the majority of
the 16 ministers are generally believed, or suspected of
being, strongly pro-French or subservient to French in-
terests. However, Heath thinks it is premature to. write
\ off the Huu Government. He also does not believe that
the opposition will have early success in ousting Huu or
that scattered elements of the opposition will foment
popular disorder or defect to the Viet Minh. The Arabas -
sador notes that none of the-evehts since last December--the
Pau agreements, transfer of revenues, the decision to acti-
vate a national army, Bao Dai's appeals for unity and support,
de Lattre's dynamism, and French victories in the north--
has had an appreciable impact on the Viet political mind.
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1. No unusual Soviet troop movements in Rumania--In
response to a query from the Department of State con-
cerning reports of heavy Soviet troop movements in
Rumania and the possibility of an attack on Yugoslavia
about 1 March, US Embassy Bucharest replies it has
no evidence of any unusual troop movements in Rumania.
The Embassy has received similar negative reports
from British, Italian, French, Austrian, Yugoslav, Swedish,
Turkish, and Israeli representatives in Bucharest. The
Embassy does have reliable reports of "many tanks and
considerable activity" among Soviet forces at Timisoara
and other places near the Yugoslav frontier, but considers
these attributable to the normal operations of the one or
two Soviet divisions which have been stationed in that area
for some time. The Embassy regards, the recent rumors
of Rumanian-Yugoslav tension as "likely planted."
US Embassy Budapest, in response to the same
query from the Department of State, reports it has seen
no signs of unusual activity.
2. Poles woo Latin American diplomats in Brussels--US Em-
bassy Brussels reports that the Polish Minister there re-
cently entertained all chiefs of mission of those Latin
American countries with which Poland has diplomatic
relations. During this occasion, the Polish Minister
reportedly harangued the Latin Americans along the lines
of the Soviet "partisans of peace" campaign and stressed
that Stalin's Pravda interview was based on a sincere
desire for a lessening of tensions in the world. According to
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an account by the Uruguayan Minister, however, this
attempt to influence the Latin American diplomats
"backfired" when the Polish Minister asserted that�
their countries had permitted themselves to be made
dupes of the US. This remark aroused the mission
chiefs to tell the Pole in "no uncertain terms" that
US and Latin American representatives consulted on
terms of equality and that any joint policies were
certainly not the result of submission by other American
representatives to US dictation.
FAR EAST
3. INDOCHINA: Chinese Communist capabilities increased--
The US Military Attache in Saigon considers, judging from
recent "fairly well verified" reports that the Chinese Com-
munists are reinforcing the Indochinese border areas, that
the Chinese Communists are greatly intensifying their
capabilities to intervene without warning in Indochina. He
believes the period just before the rainy season (1 April-
15 May) to be the most likely for such action. The MA
adds that the French are apparently confident of holding
against Viet Minh efforts but are decidedly uneasy re-
garding possible Chinese Communist intervention.
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GENERAL
1. Nehru's views concerning Communist aggressiveness--
US Ambassador Henderson in New Delhi reports that in
a 20 February conversation which "lasted hours" Prime
Minister Nehru displayed more friendliness and seemed
to speak with more frankness than in any previous talks.
Henderson says, however, that the conversation contained
little that was new and Nehru's general theme was that he
is not convinced of the "inherent aggressiveness of inter-
national Communism:' Nehru said both sides, the interna-
tional.Communist world and the Western world, suspect
the other of aggressive intent and are preparing to resist.
In this situation, India's policy is to restore confidence
and to persuade each side the other has no aggressive
intentions.
Nehru believes that arming Germany or Japan might
well frighten international Communism and thus precipitate
adventures on the part of the USSR or Communist China
which might lead to war. He does not believe the Soviet bloc
would risk world war by attacking either Germany or japan,
if they were neutralized and left unarmed. He considers
that settlement of the Japanese problem in a manner agreeable
to Communist China and the USSR is a necessary part of a
general Far East settlement.
EUROPE
2. GERMANY: Adenauer -Schumacher views on defense--The
US High Commission in Germany transmits its comments
on the recent discussion between Chancellor Adenauer and
Socialist leader Schumacher on the basic issues facing West
Germany. According to the High Commission, the Socialists'
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basic position on defense still differs substantially from
that of the government. Adenauer is apparently convinced
that the USSR is not ready to start World War III or to
invade West Germany; Schumacher fears that such an
attack might be "provoked" if West Germany were to make
a "premature" decision on its defense contribution, that
is, in the absence of sufficient Allied strength in Germany.
Schumacher reportedly shares Adenauer's opposition to
a solution of a unified and neutralized Germany through
a four-power conference; however, Schumacher realizes
that West Germany must be prepared to accept such a
decision if it is achieved by the conference.
NEAR EAST -AFRICA
3. FRENCH MOROCCO: Crisis with French not settled--US
Consul McBride in Rabat reports that contrary to previous
information French-Moroccan relations appear still to be
in a turmoil. According to McBride, the French have
apparently abandoned their, efforts to overthrow the Sultan
of Morocco and are now reportedly threatening to ignore
the Sultan and force a rupture of relations with the Moroccan
Government if concessions are not forthcoming.
FAR EAST
4. INDOCHINA: Views on possible negotiations-- A French Em-
bassy official in London has expressed the view to the US
Embassy,that the situation in Indochina, like that in Korea,
is now abproaching a stalemate and that the establishment of
a situation of strength in Indochina might help create an atmos
phere conducive to negotiations, presumably with the Chinese
Communists. The French diplomat told Embassy London that
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if General de Lattre got the reinforcements he is asking
for (understood to be 10 battalions), de Lattre could prob-
ably maintain and improve his present relatively favorable
position. According to this official, the French are under
no illusions concerning Chinese Communist aid to the
Viet Minh, but they are as a matter of policy attempting
to play down any reference to Chinese assistance and to
ignore Chinese intervention as long as possible. Although
de Lattre continues to hope it may be possible to engage
in on-the-spot negotiations with local Chinese authorities,
he has come to realize that the initiative, if any, must
come from them.
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GENERAL
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1. Possible warning to USSR against attackin,g Yugoslavia-- apeliTS
US Embassy Moscow, in weighing the pro s and con's of
a further Western warning to the USSR and the Satellites
against launching an attack on Yugoslavia, comes to the
conclusion it is probably undesirable at this time to make
a pronouncement. The Embassy recognizes the appre-
hension of British, French, and Italian representatives
in Moscow over the possibility that considerable doubt
exists in the minds of Soviet planners as to whether the
Western Powers would react vigorously with military force
against a Soviet attack on Yugoslavia. The Embassy be-
lieves, however, that a categoric public announcement
would tend to ."engage Soviet prestige" and would there-
fore seem likely to increase tensions. The Embassy
further considers that secretly warning the USSR would
be of "doubtful wisdom" because of the possibility of
inadvertent leaks and subsequent confusion. The Embassy
also questions the advisability of giving Tito "a blank
check" through a warning to the USSR.
Concerning the possibility of Soviet or Satellite
attack on Yugoslavia in the near future, the Embassy re-
ports it has no information to suggest any greater imminence
of such an attack. The Embassy notes; however, the recent
British withdrawal, at the NAT Council of Deputies, of their
previous estimate that a Satellite attack on Yugoslavia is
improbable until after the 1951 training season and refers
to information pointing to an increase in the tempo of
Satellite military activity. In these circumstances, the
Embassy believes it may be urgently necessary for the US
and the West to consider what the military reaction of the
West would be to an attack on Yugoslavia.
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2. French-Italian conference on foreign policy--In forwarding CI 4)
a statement of the results of the recent conference between
the foreign ministers of France and Italy, US Embassy
Rome comments that the best result of the conference, from
. the US point of view, may be that it disclosed no lessening
of French-Italian support of the primacy of NATO objectives
over the long-range problems of European unification. -The
Embassy also believes that the conference-has strengthened
the Italian Government by giving it an appearance of pursuing
an independent foreign policy, with the promise of French
support of Italian views in international forums�
EUROPE
3. FRANCE: Stability of government deteriorating--US Em-
bassy Paris reports that the stability of the Pleven Govern-
ment has deteriorated in past weeks and attributes this
trend to the reluctance of the coalition parties to compromise
on their difficulties. The Embassy believes there is not
much time for the government to maneuver a way out of
the situation and points out that it is faced simultaneously
with two exceptionally tough problems: electoral law reform
and the choice of measures to cope with the economic im-
balance created by the West's rearmament program� The
Embassy considers that the most ominous sign has been the
growing indifference of the coalition partners to the fate of
the present government, with some members of almost every
party declaring that the present Assembly itself is "worn out"
and elections should take place soon, The Embassy feels that
in this atmosphere much depends on the will, skill, and per
of Pleven and on President Auriol's continued in-
tention to accept the government's resignation only if it is
overthrown by Assembly vote and not as a result of the
resignation of the ministers of one party.
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GENERAL
city PER 1951
1, Embassy Moscow's analysis of *Stalin interview--US Em-
bassy Moscow, in commenting on the 16 February Stalin
interview in Pravda, expresses the view that the most
significant aspect of the interview is the discussion of
the inevitability of war. Pointing out that Stalin declared
war can become inevitable if "the deception practiced by
�
warmongers" is successful, the Embassy remarks that
this constitutes a notice to the Soviet people and others
that war is a possibility.
The Embassy considers that the interview as a
whole may have been calculated to: (a) establish a favor-
able popular attitude toward the Soviet position prior to
the prospective C FM exploratory talks; (b) give new
.momentum to the "peace drive' on the eve of the World
Peace Council meeting; (c) demonstrate the "reasonable-
ness and righteousness"of Soviet policy for the benefit of
peoples in the Soviet orbit and wavering Communists
abroad; (d) nourish popular dissatisfaction in the West
over the economic burdens of rearmament; and (e) widen
the split now evident in the UN between Asiatic and NATO
countries.
The Embassy comments that in this interview Stalin
has permitted his reputation for superior wisdom to become
involved in much more sophistry than previously. This
may reflect a greater degree of Soviet vulnerability on the
issues involved; it may reveal a feeling on the part of Soviet
leaders that Stalin's authority is the margin needed to assure
popular support abroad for Soviet foreign policy; or it may
reflect a Soviet belief that Stalin's intervention will cause
sufficient confusion to pave the way for success in any
adventure to be undertaken in the near future.
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Looking at the question of what strategy is desirable
for the US and the "free world," in the light of Stalin's
pronouncements, the Embassy observes that Stalin has
attempted to regain a measure of the diplomatic initiative
wrested from him through effective inauguration of a Western
defense program and that it is consequently important that
the program be continued vigorously.
EUROPE
� 2. YUGOSLAVIA: Tito warns Communists to accept policT--
us Embassy Belgrade, in commenting on a speech by Tito
before a Communist Party group, notes that Tito warned
Yugoslav Communists to accept Yugoslav foreign policy �
and declared that dissension on this point "would not be
tolerated." The Embassy observes that there is probably
a minority among Yugoslav Communists who find it
difficult to accept a Yugoslav-Western rapprochement and
that this speech was aimed at such elements. The Embassy
has long felt some danger that Tito, in reorienting the
Yugoslav Government toward the West, might get too far
ahead of the Communist Party. It is now apparent that
the Party leadership is aware of the problem and has
taken steps to meet it.
FAR EAST
3. CHINA: Reported Russian military control in Peiping--
The US Air Attache in Taipei transmits a report from a
source in Peiping that Russian officials there called a
meeting on 6 February of the Chinese responsible for
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garrison control of the Peiping area and told the Chinese
that the military control in the Peiping area was too weak.
The Chinese Commander reportedly stood up to defend
his position and was told to sit down and shut up. According
to this report, the Chinese were then told that a Russian
Commander would give orders in the Peiping area in the
future. The Chinese made no open protest but deeply resent
such control by the Russians.
Source also reported that several Chinese repre-
sentatives who returned to Peiping from the recent Moscow
Conference said that the Korean cease-fire discussions have
closed, with the conclusion that no further cease-fire pro-
posal will be presented to the UN.
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NEAR EAST-AFRICA
2. FRENCH MOROCCO: Sultan-juin agreement reached-- 3/S
US Consul McBride in Rabat reports that an agreement
between the Sultan of Morocco and French General juin
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was reached at a 17 February meeting, during which
Juin declared that the affair was closed and the French
Government is agreeable to having the Sultan remain
on the throne. McBride comments that the agreement
reached is generally satisfactory for the Sultan and�
has face-saving aspects for the French. He adds that
the Sultan credits the French willingness to mediate to
the position taken on the affair by the US.
FAR EAST
3. INDOCHINA: Effects of Cabinet crisis�Following con-
versations with Bao Dai and the imperial Cabinet Director,
Nguyen De, US Charge Gullion in Saigon transmits his
views on the current Cabinet crisis. Gullion believes that
whatever Cabinet is formed now, it is certain that the gulf
between Bao Dai and Prime Minister .Huu, and between the
imperial Cabinet and the High Commissariat, is greater
than any that existed between previous Viet and French
officials. Gullion says that while Bao Dai was careful
not to accuse the French directly of delaying or influencing
deliberations, Nguyen De said flatly that the blame for the
delay in forming the government was attributable to High
Commissioner de Lattre, and secondly to Huu. Gullion is
unable to tell whether or not the French "interfered" as
De asserted, but he says it is clear that the crisis has been
triangular among Bao Dai, Huu, and the French.
Gullion believes a new Cabinet would rest on a
narrow base, only grudgingly accepted by Bao Dai and at
the mercy of the strong Dai Viet minority. Bao Dai
evidently believes he can dissociate himself from an un-
popular government by continuing his aloof tactics; Bao
Dai also could precipitate the fall of such a government
by pulling out the Dai Viet representatives.
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EUROPE
1, AUSTRIA: Soviet probing Western plans in Austria--US
Minister Donnelly in Vienna reports that the Soviet political
adviser there recently called on Foreign Minister Gruber
and told him that the Soviet Union had heard rumors of
Western Power negotiations with Austria concerning future
plans for that country. Gruber told the political adviser that
these rumors were untrue and pressed him to be more
specific, but the Soviet official refused to expand on his state-
ment. However, he went on to tell Gruber that the USSR was
very sincere in its desire to maintain the status quo and the
quadripartite agreement in Austria. He also said that the
Soviet Union favors an early four-power meeting but the US
does not, and repeated several times that his-government
"wants peace and only peace" and abhors war, Gruber was
puzzled as to the Soviet official's motivation in this con-
versation but pointed out to Donnelly that this official has
followed this line in recent discussions.
NEAR EAST-AFRICA
2. FRENCH MOROCCO: Pressure on Sultan increased--US
Consul McBride in Rabat indicates that the French campaign
against the Sultan of Morocco is "hitting a new high," with
the Sultan's deposition now thought to be a strong possibility.
McBride says that Moroccan sources consider the Sultan's
present position to be at its worst since the initiation of the
French drive to oust him. French sources are pretending
that the situation is improved, but in McBride's view local
developments "hardly appear to bear out such a contention."
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FAR EAST
3. INDOCHINA: De Lattre may hasten new Cabinet�US
Legation Saigon transmits from the British Consul in
Hanoi a report that General de Lattre, prior to his de-
parture for Dalat on 15 February, declared he was tired
of Bao Dai's indecision and intended to see that Bao Dai
"got on with it." According to source, de Lattre said
sarcastically that he hoped this action would not be con-
sidered by the British and the Americans as French
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GENERAL
1. West European views on possible USSR attack on Yugoslavia-- 5/7S
US Embassy London reports that at the concluding discussion
of the NATO deputies on the Yugoslav situation, the British 5 is
withdrew their estimate that .a Satellite attack on Yugoslavia
is unlikely until after the 1951 training season. The British
now think an attack might well come sooner, and the French-
share this view. However, the Netherlands deputy expressed the
view that because the Sitellite forces are "unreliable" (es-
pecially the Hungarian), an attack is unlikely until the Soviet
Union is prepartd(to commit its own forces.
Meanwhile, US Embassy The Hague transmits the
view held by one of Queen Juliana's chief advisers that the
opinion is gradually gaining ground among Western European
"career circles" that the Soviet leaders are greatly con:-
cerned over the growing national deviation tendency in the
Western European Communist parties and the progress of
NATO. This view holds, therefore, that the Soviet Union is
secretly passing over to the defensive in Europe, even
though outwardly maintaining the offensive, and consequently
a direct attack against the West is extremely unlikely within
the foreseeable future, though the possibility of a Satellite
attack against Yugoslavia is not excluded.
2.
EUROPE
1
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3. USSR: Soviet doubts concerning four-power conference--
US Embassy Moscow has learned that Austrian Minister
Bischoff saw Soviet Deputy Foreign Minister Zorin on
3 February and discussed with him the Austrian Government's
desire for early conclusion of a peace treaty. Zorin said
his government was willing to reach agreement but was
skeptical of the attitude of the Western Powers. Bischoff
suggested that the treaty could appropriately be on the�
agenda for a Conference of Foreign Ministers; Zorin as-
sented but seemed doubtful whether such a conference would
take place. The Austrian Minister has the impression the
Soviet Union is pessimistic about a conference.
The Embassy has also learned that Bischoff was
called to the Foreign Office on 8 February to see Zorin
(Zorin was rumored to be in Czechoslovakia at this time).
Bischoff suggests this meeting was designed to indicate
the physical presence of Zorin in Moscow on that date.
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GENERAL
1. Conversations with Tito and Kardelj --US Ambassador
Allen in Belgrade describes Assistant Secretary of
State Perkins' talks with Tito and Foreign Minister
Kardelj as highly useful. In separate talks with Tito
and Kardelj, Perkins discussed Yugoslav requests for
further assistance and pointed out that the present atti-
tude of the US Congress and the public would make addi-
tional assistance most difficult to obtain without clear
public indication by the Yugoslav Government of what it
would do in case of war. Both Tito and Kardelj said that
public opinion in Yugoslavia at this time was not ready
for close alignment with the West but that in another year
this situation might be different. Tito said he could not
join any bloc because in case of aggression against Yugo-
slavia, the Yugoslav people must be absolutely certain
that their government had done nothing whatever to justify
Soviet allegations that the Western Powers had had aggres-
sive intentions against the USSR with Yugoslavia as a base ,
of operations. Perkins advised Tito that any further sub-
stantial aid from the US would require appropriations by the
US Congress; Tito then said that perhaps for the moment
Yugoslavia would have to depend on its own arms factories.
Tito added, however, that if Yugoslavia at any time became
convinced that an attack against Yugoslavia had been definitely
decided upon by the Cominform and was imminent, his govern-
ment's position might change promptly since the present
reasons for caution would disappear.
In further conversations, Perkins informed Tito and
Kardelj that the US Ambassadors in the Cominform countr4es
did not think either the Satellites or the USSR was preparing
for an imminent attack anywhere in Europe. Tito and
Kardelj both said that their own information led them to the
1
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same conclusion. Tito said that, from his own knowledge
of Soviet psychology, he did not think the Russians would
take any action which would label the USSR as an aggressor
in world opinion.
� Allen adds that Kardelj expressed tp him much
appreciation over Secretary of State Acheson's recent
press statement regarding Yugoslavia and indicated
his government's satisfaction with the US public position
in this regard.
EUROPE
2. AUSTRIA: USSR believed tightening its controls-,-According
to US Minister Donnelly, Austrian Chancellor Figl, Vice-
Chancellor Schaerf, and Foreign Minister Gruber agree that
there has been no letup in Communist planning for disturbances
either in February or March. The Austrian officials are con-
fident that the police force can control the situation provided
the Communists do not receive overt Soviet support, and said
that they were appropriating additional funds to increase eniploy-
ment. The officials also confirmed Donnelly's impression
that Soviet controls in Austria are being tightened. Gruber
expressed the feeling that the USSR was planning something
but admitted he had not been able to find out what it was. He
pointed out that most Soviet military commanders in the
Soviet Zone had recently been changed.
3. ITALY: Communists anxious over Magnani affair--US Em-
bassy Rome believes the anxiety caused the Communist
Party by the Magnani affair may be measured by the fact
that the biggest Partyjeaders in Italy are not only denouncing
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Magnani and Cucchi but also feel obliged to respond to their
criticisms. Moreover, practically the entire resolution
voted by the Geneva Congress of the Party is devoted to
the Magnani affair.
Meanwhile, US Embassy Belgrade reports that
Yugoslav officials are following the Italian Communist
difficulties with interest, avoiding excessive optimism
while awaiting developments. The Yugoslays are reluctant
to hazard a guess as to the consequences of the Italian
defections, but they apparently feel that unless the Italian
Party succeeds in discrediting the dissident leaders with
the rank and file, there is a good chance that an independent
Marxist party may be created, with a substantial following
opposed to subservience to Moscow. The Embassy adds
that the Yugoslav press is treating the Italian Communist
difficulties with caution.
NEAR EAST-AFRICA
4. FRENCH MOROCCO: Sultan-Juin tension increasing--A high
French official has presented US Consul McBride in Rabat
with a paper containing the French point of view on the
Sultan-juin impasse, a statement which McBride finds
"not overly convincing." The French official told McBride
that although his government hopes for a conciliatory atti-
tude by the Sultan, the French are not optimistic and con-
sequently the deposing of the Sultan is "more than a strong
possibility." The French hope to avoid deposition because
French interests would suffer throughout the Moslem world.
General Juin, however, has declared he prefers to eliminate
� "possible rear guard opposition" now rather than during a
war and he utterly refuses to follow any line which might
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seriously antagonize the Berber elements .which-have
supplied 3 to 4 divisions for the Atlantic Pact army, as
opposed to the Arab League which, he says, could not
in its entirety furnish 1. effective division.
Meanwhile, the Sultan of Morocco has sent to
Consul McBride a note conveying the substance of his
reply to General Juin's oral demands of 26 January.
McBride characterizes this reply as "significantly
unyielding" and as representing a "less cooperative
spirit" than expected. McBride says he cannot hope
that the Sultan's note will ease the strain; on the con-
trary, it may cause the French to take an even sterner
attitude.
FAR EAST
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6. INDONESIA: No present plans for Asiatic meeting;--US Am-
bassador Cochran in Djakarta reports that Foreign Minister
Roem has reassured him the Indonesian Government does
not plan to initiate an Asian conference for the purpose of
studying the Indochinese question. Roem said the Foreign
Office was working on no Asiatic plans except separate
treaties of friendship with the Philippines, Burma, India,
and Pakistan. In reply to a question from Cochran, Roem
said his government was not reopening the question of re-
cognition either of Ho Chi Minh or Bao Dai.
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EUROPE
I. ITALY: Kremlin "disappointed" by Communist weakness--
US Embassy Rome has received information
that Moscow was deeply disappointed over
the weakness of the anti-Eisenhower manifestations and
wants the Italian and French Communist parties to make
a show of strength this Spring, using German rearmament
as a popular issue, tied in with protests against the rising
cost of living and unemployment, The Embassy believes,
in the light of this information, that the "disintegration"
of the Italian Communist Party, of which the Magnani affair
is symptomatic, is probably causing grave concern to the
Kremlin and that a thorough Shakedown within the Party is
in the offing. The Embassy offers as further confirmation
of the gravity with which the Kremlin regards the Magnani
affair the fact that Secchia, the third most important man
in the Italian Communist Party, has departed for Moscow
for the second time within a month.
14 FB 1951
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3.3(h)(2)
2. POLAND: Concern over "German aggression"--According C/ S
to US Embassy Warsaw, Secretary General Wierblowski
of the Polish Foreign Office told the Swedish Minister that
Poland is gravely concerned over the menace of neo-
Hitlerite aggression in Germany. Wierblowski declared
that Poland could not view with equanimity the revival of
dictatorial power which had nearly exterminated the Polish
nation and people. The Swedish Minister replied that his
government was also alert to the dangers of new aggression
but that the Swedes feared hostilities from other ,quarters;
he said that the "neo-Hitleritemenace" to which Wierblowski
referred was only a possibility but that the Stalin dictatorship
was an actual threat to European peace. Wierblowski reportedly
ended the interview abruptly with the comment, "we are not
here to discuss Stalin or the Soviet dictatorship."
1
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NEAR EAST-AFRICA
3. FRENCH MOROCCO: Sultan-Juin "battle" unresolved--
US Consul McBride in Rabat has been informed by a
high French official that General juin is "unalterably"
opposed to the idea of a call on the Sultan of Morocco
by Secretary of Air Finletter in connection with the US
air base program. The French official declared that
France is responsible for the defense of Morocco, that
the Sultan is informed of developments in this field by
courtesy, and that all matters concerning Morocco's
dealings with other countries should be handled by
Juin. According to this official, the present moment
would be especially unsuitable for such a call and would
"stiffen" the Sultan further. McBride comments that
the Sultan-Juin "battle" remains unresolved, with even
the French admitting the adverse effects of it. He adds
that tanks and other armored vehicles were noted in
Rabat for the first time on 12 February.
FREER T
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GENERAL
1. -Reported Soviet plans in Europe--US Embassy Paris
reports that
the USSR
is no p anmng arme ac ion in urope i e est re-
fuses Soviet demands regarding Germany, but will
apply in progressive stages a "short-of-war" diplo-
matic program. This program will reportedly include:
(a) intimidation of France and the UK by vigorous diplo-
matic pressure on the issue of German remilitarization;
(b) denunciation of the military clauses in the Satellite
peace treaties; (c) intimidation of the Bonn Government
designed to elicit a more favorable reaction to the
Grotewohl proposals for German unification; and (d) rup-
ture by Poland and Czechoslovakia of diplomatic relations
with the West.
EUROPE
2. YUGOSLAVIA: Estimate of public morale--US Embassy
Belgrade gives as its "best estimate" the opinion that
the morale of the Yugoslav population in Macedonia,
Vojvodina, and all other exposed areas is high with re-
ference to a possible Cominform attack. The Embassy
is convinced that the Yugoslav Army and populace will
give a very good account of themselves if attacked by
the Satellites. The Embassy believes all Yugoslav
national and religious groups will fight Cominform in-
vaders by any means possible and will not accept Comin-
form domination as long as the Yugoslav Government has
an army opposing the invaders and Western support.
Document No. 0 3?
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Factors dividing the Yugoslays are gradually weakening;
Tito's policy of granting economic assistance to backward
areas and of permitting local government through separate
republics has reduced considerably the traditional opposition
to Belgrade. Although Communism is distasteful to many
Yugoslays, they prefer the national brand to Moscow
domination; Tito's high degree of personal popularity
would tend to unify the populace and minimize national
ideological differences in the face of a common enemy.
In addition, the knowledge that the West would support
Yugoslav resistance would add to Yugoslav determination
to oppose an invasion.
Meanwhile, US Embassy London has learned that
British Ambassador Peake in Yugoslavia is concerned over
the state of public morale there. Peake indicates that there
is among the populace a lack of strong loyalty to the regime
and uncertainty as to whether the West would render Yugo-
slavia assistance if it is attacked.
FRANCE: Communists to stress economic demands--US Em-
bassy Paris sees indications that the French Communist
Party has shifted its tactics from emphasis on political
objectives to stress on a disruptive economic campaign.
The Embassy thinks the Kremlin has recognized the neces-
sity of enhancing the effectiveness of political campaigns by
allying them more closely with support for economic and
social demands, and, in terms of the present situation in
France, has chosen the time well. The rise of the .cost of
living and expected increases in coming months, such as
in the cost of materials, are very much in the minds of the
lover income groups. The Embassy considers that the com-
parative slighting of the basic social and economic concerns
of the French worker over the past two years has contributed
to apathetic, support by Communist followers recently.
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GENERAL
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2. British concern over Near Eastern defense--US Embassy
London reports that the British Foreign Office is deeply
concerned over the problem of providing defense for the
Arab States and Israel and of assuaging the deep fear per-
vading Near Eastern countries that the West is disinterested
in their fate and prepared to do little or nothing to save
them. Believing that this anxiety provides a fertile field
for Communist exploitation, the UK has sought to reassure
these countries and feels that some progress is being made.
EUROPE
3. POLAND: Protest against German remilitarization�According
to US Embassy Warsaw, the Secretary General of the Polish
Foreign Office has given oral messages separately to the
Belgian, Dutch, and Danish Ministers protesting against German
remilitarization. He said the international situation is causing
the Polish Government great concern and that the German ques-
tion is at the center of the trouble. The Polish Government
considers the small states neighboring on Germany cannot
remain passive and declares that Poland will have to take
measures if the 'situation continues. The Polish Government
hopes that before it becomes necessary for the Poles to take
puch measures, these small states will be willing and able
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to arrange a meeting of the Big Four and will make
suggestions to the Big Four regarding a basis for
such a meeting. The Belgian Minister thinks a reply
is expected regarding suggestions which the Belgian
Government might contemplate making to the Big Four,
but the Dutch and Danish Ministers think the Polish
message is largely a propaganda move to prepare the
basis fora Communist assertion that every effort has
been made by the East to come to terms with the West.
FAR EAST
4. INDOCHINA: Estimate of grand Soviet strategy-- US Lega-
tion Saigon transmits the personal estimate of the ranking
General (Hwang Chieh) of the Chinese internees in Indo-
china concerning the prospects for Chinese Communist
invasion of Indochina and over-all Soviet plans. General
Hwang believes the principal governing factor is the place
which an invasion of Indochina occupies in the over-all
Soviet strategic concept. The General is convinced the
Soviet Union believes time is its ally, not an enemy, and
it will endeavor to avoid general war for at least 10 years;
he offers the following as Soviet reasoning in this connection.
Within a decade, the resources of the Far East and Central
Europe can be exploited to the point where, in conjunction with
its own resources, the Soviet Union will be in a position to
challenge the economic supremacy of the US and Western
Europe combined. Simultaneously with the upsurge of the
economic capacity of the Soviet bloc, the Western potential
will decline, as a result of: (a) the unbearable strains
occasioned by Soviet-inspired alarms and excursions; and
(b) the inevitability of collapse inherent in the capitalist
structure. During this period, the Soviet Union will attempt
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to gain victory with "white" means, and, if this fails,
will then launch "red" warfare with a better than even
chance of final success. The Embassy comments� that
these views are significant primarily because they run
counter to what the majority of Chinese Nationalists hope '.
for: an early involvement of the West in a war with Com-
munist China.
THE AMERICAS
5. ARGENTINA: Peron's views on "third position"--US Em-
bassy Buenos Aires reports a conversation between President
Peron and former US Ambassador Messersmith, during
which Peron said that there was only one position which
Argentina "could and would take" in the present East-West
- struggle, that of full collaboration with the US and the Western
Powers. Peron agreed that Argentina had gained nothing
from her attitude in World Wars I and II. Messersmith
urged that Argentina take an unequivocable stand before
too late and pointed out that the "third position" confused
the Argentine people and decreased Argentina's prestige
abroad. Peron concluded by saying that he could hardly
�
find any reasons to differ with Messersmith's views.
4
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J1):`4L #fiAr E T
GENERAL
1. Israeli-Jordan relations strained�US Legation Amman
expresses the opinion that the recent Israeli atrocities
at Shorafat, coupled with their continued occupation of
Jisr Majami and their obstructive tactics over the Wadi
Araba dispute, will serve greatly to strengthen the forces
In Jordan against any settlement with Israel and have �
already alienated the Jordanian Prime Minister from
any conciliatory policy he may have adopted. Prime
Minister Samir spoke of these incidents in "the bitterest
terms" and told the Legation he is now convinced the
Israelis do not seriously desire a Peace settlement but
seek to keep relations strained. The Legation comments
that the Israelis missed a "golden opportunity" to obtain
a peace settlement with Jordan by continuing what the
Jordanian public considers provocativeand aggressive
e.action,inAl*.!construction and use of the road diversion
In Wa.dira.ba.and the occupation of Jisr Majami.
10 FEB 1951
1517
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EUROPE
2. CZECHOSLOVAKIA: Reported Communist purges�A Era- c/o/
bassy Prague, although unable to verify the numerous rumors
concerning the disappearance and arrest of high government
and Communist officials, expresses the view that such "rumor
waves" are usually based on some significant development
or tension within the government. The Embassy suggests
as one plausible basis for some of the rumors the split
In the Czechoslovak ruling hierarchy between the old-line
Communists, headed by Premier Zapotocky and President
Gottwald, and the Stalinist group, headed by Slansky and
11j
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others whose power is concentrated chiefly in the Party.
The old-line Communists, who are believed to have re-
tained strong nationalist sentiment, have probably advocated
a gradual approach to the development of a Socialist state,
while the Stalinist group has been pushing for violent
methods as well as collaboration with East Germany to an
extent distasteful to the more nationalistic elenients. In
addition to the strain caused by the struggle for power be-
tween these two group-s, the Enibassi believes that tension
between them may have been increased by Soviet pressure
for more drastic�measures to assure Czechoslovak compliance
with increasing Soviet economic demands.
FAR EAST
3 INDOCHINA: Analysis of military situation--US Legation
Saigon transmits in analysis (concurred in by the US ser-
vice attaches) of Viet Minh-Chinese Communist military
capabilities and intentions. The recent French military
victories, although heartening, have in no way altered Com-
munist intentions to gain control. of Southeast Asia and
should be viewed with reserve in view of: (a) severe French
losses not presently replaceable; (b) the experience gained
by Viet Minh forces in maneuvering larger forces; and
(c) retention by the Viet Minh of the initiative in determining
the objective, direction, and force of subsequent attacks.
The Legation notes as a "significant peculiarity"
that Chinese Communist logistical support had virtually
ceased during the month preceding the large-scale Viet
Minh offensive in mid-January. The Legation believes that
the most reasonable explanations for this development all
point to eventual and "fairly proximate" Chinese Communist
invasion. For example, the Viet Minh- may have wanted to
i) a is
2
4,
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achieve as much of much of their goal as possible before
calling for Chinese assistance; or, on the other hand, the
Chinese may be forcing the. Viet Minh to request inter-
vention on Chinese terms by:forcefully demonstrating
Viet Minh reliance on Chinese logistical support.
As further support for the 'view of eventual Chinese
intervention, the Legation cites: (a) the recent renewal of
Chinese Communist logistical support; (b) the possibility
that Chinese 'failure ta achieve quick victories in Korea,
-and Taiwan may create pressures which -can-cinly find
their:outlet in Southeast Asia. and (c) the ,Strong tempta-
tion posed by the comparative defenselessness of Southeast
Asia and the desire to move before the security of the area
is strengthened. The Legation thus concludes there is nothing
in recent French successes or in the general situation to
have deterred Chinese intervention and a number of factors
which may bring it closer.
4. CHINA: Estimate of current situation--US Consul General
Hong Kong transmits an analysis of the Chinese situation
by a member of the Consulate staff
The staff member concludes that
the Chinese Communists, as junior partners Of the USSR, are
fully committed to the "liberation"..of Asia and, in carrying ,
out this program,are prepared if necessary to risk war with
the US which they are convinced is their "implacable enemy."
Since the outbreak of the Korean war, Chinese Communist
political control over the country has become stronger and
the economic system, although suffering numerous defects,
is workable and effective. These strong points are somewhat
offset by widespread popular dissatisfaction and basic economic
3
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weakness arising from the strain of the Korean war and
the increasing shortage of essential industrial materials.
The staff member believes that military action in Korea
and economic sanctions are not likely in themselves to
compel the Chinese to refrain from further ventures in
Southeast Asia. He feels that the means must be found
to exploit Chinese Communist internal weaknesses and
suggests not only assistance to the Chinese Nationalists
on Taiwan but clandestine support of all anti-Communist
Chinese in order to create a "united front" which would
have more appeal than a resistance effort under sole*con-
trol of the Kuomintang. Such a program would have the
minimum aim of slowing the Communist advance in South-
east Asia, thus gaining time for Western rearmament while
avoiding measures which would result in all-out war with
China.
4
CONTint.
T MOM( T
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48141 TetalgENfiAtE
GENERAL
1. .Schumacher finds Soviet note to West "conciliatory"--
The US High Commission in Bonn reports that Socialist
leader Schumacher considers the latest Soviet note to the
Western Powers concerning 'a Coriference of Foreign
Ministers relatively conciliatory and that he feels the
prospects for a profitable conference are good. Schu-
macher thinks the Soviet note implied "significant con-
cessions" in the admitting of other questions besides
Germany to the discussion and in leaving the order of the
matters to be discussed to an exploratory conference.
Schumacher emphasized that it would be a grave mistake
to adopt the view that this particular conference might
possibly solve the whole complex of East-West problems;
he feels the most that can be hoped for is that this or even
a later four-power conference might achieve some small
success in turning the trend of events in the right direc-
tion. Schumacher feels it should not be discouraging to
know that it may take 25 such conferences to solve any of
the really big outstanding problems.
EUROPE
2. FRANCE: Stability of government still in question--US
Embassy Paris believes that neither the heavy favorable
� vote on Pleven's Washington talks nor the new proposal
on family allowances nor the new bill on electoral law re-
form has ended the possibility that the Pleven Government
will be overthrown in the near future. In the opinion of the
Embassy, the most that can be said for certain is that the
immediate danger has been put off, with inter-party dis-
agreements and mutual suspicions unallayed. The coming
1
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week may bring either a crisis or real agreement on
the basic difficulties of the present coalition, but the
Embassy believes further postponements of major deci-
sions are most likely.
NEAR EAST-AFRICA
3. FRENCH MOROCCO: juin-Sultan situation "under control"�
US Embassy Paris reports that following Resident General
juin's departure from France for North Africa, Foreign
Minister Schuman personally assured Ambassador Bruce
that the juin-Sultan situation is under control and a satis-
factory solution of the Moroccan problem can now be ex-
pected.
Meanwhile, General Juin has complained bitterly to
US Minister Plitt concerning US "interference" in a situation
involving the internal stability of a French protectorate. Juin
did not mention the Sultan to Plitt, but he stressed his inten-
tion to neutralize "political troublemakers.."
2
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GENERAL
1. British estimate of Yugoslav vulnerability--According to
US Embassy London, the British Foreign Office has gained
the impression from further conversations with Yugoslav
representative Milovan Djilas that the Yugoslays do not
think they will be attacked during 1951. The Embassy re-
ports, however, that a British military estimate, which
earlier considered an attack against Yugoslavia unlikely
before September, is now being revised "to a somewhat
earlier date." The Foreign Office now seems to think that
waiting for the Yugoslays to make a full disclosure of their
arms position might cause undesirable delays in rendering
them assistance. The British therefore believe it would
suffice for the Yugoslays to provide "adequately detailed"
lists of their requirements, which Djilas has promised to
do as soon as possible.
EUROPE
2. FRANCE: Threat to Pleven regime--US Embassy Paris
reports that although Premier Pleven no longer appears
vulnerable from a foreign policy angle, speculation is rife
as to Noili6ther his government can survive any of the issues
due for 'consideration this week. The parties of the coali-
tion are as dissatisfied as ever with each other on the issue
of electoral law reform and with the government for opposing
increases in expenditures which would have a large appeal
to the electorate but which would upset the budget. The
Embassy expresses the belief that the coalition will hold
together because the government and party leaders are still
seeking compromise solutions. Additional factors militating
against a crisis at this time include: (a) the probability of
a poor effect abroad; (b) the difficulty of forming a new gov-
ernment; and (c) uncertainty as to how the defeat of the
Document. No. 0S,
1 NO:, CHANGE in Class. Ea
DECLASSIFIED
CHANCT.D TO: TS S.
DDA Memo, 4 Apr 77-
Auth: DDA REG. 77/1763'
/APR 1W8
T Date:
Fib& b
68 FEB 1957
1515
5 /75
/c4rx..t
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E T
government would bring about a solution of the electoral
law reform issue. The Embaspy warns, however, that the
situation can change "almost from hour, to hour" and states
that the usual French impatience with any government that
has been in office for over six months must also be reckoned
with.
3. GERMANY: Analysis of present Communist campaign�The
US High Commission in Bonn reports that West German
Communists are now stepping up their campaign to capitalize
on prevailing popular indecision, fear, and general desire to
avoid or postpone positive steps toward joining in Western
defense efforts. According to the Commission, the Commu-
nists are currently posing as public-spirited Germans work-
ing for peace and unity while hiding the fact that they are
actually members of the Communist Party. Although they
are having little success in influencing the major political
parties, they are apparently making some headway with many
neutrality, peace, youth, women's and farmers' organizations.
The Commission comments that the USSR has many advantages
in the propaganda battle now going on and stresses the impor-
tance of a speedy conclusion to the proposed Four-Power meet-
ing as well as rapid progress in military and political talks
affecting the relationship of the Federal Republic with the
Western Powers.
� FAR EAST
4. INDOCHINA: Obstacles to formation of Cabinet--According
.to US Legation Saigon, it is by no means certain that President
Huu will be able to form a Cabinet in view of the differences
between him and Emperor Bao Dai. The Cabinet crisis is
TCAR
2
ET
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Aggi lijk E T
assuming the form of a contest between Bao Dai as chief
of state and the central government which has many impli-
cations for the future political life of Vietnam. The Lega-
tion points out that Bao Dai has already seized the initiative
by proclaiming his program for social and economic re-
forms, thus throwing credit for the reforms to the chief of
state rather than to the government. President Huu, on the
other hand, has declared that the principal difficulty he is
facing in persuading competent persons to join his Cabinet
is their reluctance to participate in a government which
reposes "on the will or whim of one man."
3
RET
/11
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4V8.139 72
TeeigIONMAth T-
� GENERAL
1. Analysis of Soviet note on CFM--In the opinion of US
Embassy Moscow, the latest Soviet note on the Conference
of Foreign Ministers adheres, for propaganda purposes,
to the narrow limits of the original Soviet proposal and
"tends to clarify" the Soviet intention to insist that Ger-
man demilitarization be the first matter discussed. The
Embassy also believes that the reference to the Potsdam
Protocol indicates a Soviet desire to restrict the scope
of the discussions to Germany and possibly Austria.
The Conference of US Ambassadors currently
meeting in Frankfort believes that the attack in the Soviet
note on the general build-up of Western defense, as con-
trasted to German rearmament alone,, gives the Western
allies an excellent opportunity to respond vigorously,
placing the matter in its proper 'perspective and' turning
attention to the general aggressive attitude of the USSR
and the excessive Soviet military strength in being. The
Conference thinks the time has arrived for a positive
approach which clearly identifies the basic causes of
tension and places full responsibility on the USSR. Such
an approach should make it clear that any questions in-
volving Germany, including demilitarization; must be dealt
with in relation to these basic causes of world tension.
2. British views on Chinese Communist intentions--According
to US Embassy London, the British Charge in Peiping has
informed his government that on 3 February Chou En-lai
told Indian Ambassador Pannikar that: (a) the US did not
realize the seriousness of what it had done by sponsoring
the UN resolution condemning the Chinese Communists as
1
112FiTlinfAriE
Document No.
NO CHANGE in Class. 0
DECLASSIFIED
Class. CHANGED TO: TS S
DDA Memo, 4 Apr 77
Auth;.. DDA EEC. 77/1763
Date: 3 APR MT By: 01939
*-7 FEB 1951
1514
Sis
S
0 57
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aggressors; (b) the conflict is now likely to spread;
and (c) as long as the Chinese Communists are branded
as aggressors Peiping will have nothing to do with the
UN Good Offices Committee. The British Foreign Office
is inclined to believe that Chou is merely engaging in
more propaganda aimed at widening the rift between India
and the US. The Embassy notes, however, that the British
seemed uneasy lest Chou "really meant what he said,"
especially with regard to the spread of hostilities. As
possible indications of more active Chinese participation
in Indochina, the British cited the apparent failure of the
recent Viet Minh offensive, concentration of Chinese troops
along the Indochinese border, and the relaxation of Chinese
military pressure in Korea.
EUROPE
3. YUGOSLAVIA: Decision to seek arms from West�US Am- cif, I Ts
bassador Allen expresses the opinion that the Yugoslays
have made the basic decision to seek substantial military
aid from the West but that their initial efforts will be to
obtain supplies through commercial credits. Allen states
it is evident that negotiations or feelers are going On in
several places and that the Yugoslays are trying indirectly
to find out what they can obtain; he believes the Yugoslays
will make a more direct approach if they fail to obtain arms
through commercial channels. Allen feels it is preferable to
wait until the Yugoslays make a direct request, because negotia-
tions on Western initiative would obligate the West to furnish
more supplies more rapidly" than would be feasible.
- 2
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48141 TatiFlaidAt E T
'GENERAL
1. .Schumacher finds Soviet note to West "conciliatory"--
The US High Commission in Bonn reports that Socialist
leader Schumacher considers the latest Soviet note to the
Western Powers concerning 'a Conference of Foreign
Ministers relatively conciliatory and that he feels the
prospects for a profitable conference are good. Schu-
macher thinks the Soviet note implied "significant con-
cessions" in the admitting of other questions besides
Germany to the discussion and in leaving the order of the
matters to be discussed to an exploratory conference.
Schumacher emphasized that it would be a grave mistake
to adopt the view that this particular conference might
possibly solve the whole complex of East-West problems;
he feels the most that can be hoped for is that this or even
a later four-power conference might achieve some small
success in turning the trend of events in the right direc-
tion. Schumacher feels it should not be discouraging to
know that it may take 25 such conferences to solve any of
the really big outstanding problems.
EUROPE
9 FEB 1951
1516
2. FRANCE: Stability of government still in question--US
Embassy Paris believes that neither the heavy favorable
vote on Pleven's Washington talks nor the new proposal
on family allowances nor the new bill on electoral law re-
form has ended the possibility that the Pleven Government
will be overthrown in the near future. In the opinion of the
Embassy, the most that can be said for certain is that the
immediate danger has been put off, With inter-party dis-
agreements and mutual suspicions unalloyed. The coming
Document No. 0 59
1 NO pHANGE in Class. E]
0 W.:CLASSIFIED
Clas.g.* daNGED TO: TS S
1315.1k/Memo, 4 Apr 77
Auth: DDA RIM. 774,7,93
Date: APR 1978 B;v:
� 41+,41'
T jE T
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FIBER E T
week may bring either a crisis or real agreement. on
the basic difficulties of the present coakition, but the
Embassy believes further postponements of major deci-
sions are most likely.
NEAR EAST-AFRICA
3. FRENCH MOROCCO: juin-Sultan situation "under control"--
US Embassy Paris reports that following Resident General
juin's departure from France for North Africa, Foreign
Minister Schuman personally assured Ambassador Bruce
that the juin-Sultan situation is under control and a satis-
factory solution of the Moroccan problem can now be ex-
pected.
Meanwhile, General Juin has complained bitterly to
US Minister Plitt concerning US "interference" in a situation
involving the internal stability of a French protectorate. Juin
did not mention the Sultan to Plitt, but he stressed his inten-
tion to neutralize "political troublemakers.','
2
T Mina
MLE T �
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FigettiE T
GENERAL
1. British estimate of Yagi oslav vulnerability--According to
-US Embassy London, the British Foreign Office has gained
the impression from further conversations with Yugoslav
representative Milovan Djilas that the Yugoslays do not
think they will be attacked during 1951. The Embassy re-
ports, however, that a British military estimate, which
earlier considered an attack against Yugoslavia unlikely
before September, is now being revised "to a somewhat
earlier date." The Foreign Office now seems to think that
waiting for the Yugoslays to make a full disclosure of their
arms position might cause undesirable delays in rendering
them assistance. The British therefore believe it would
suffice for the Yugoslays to provide "adequately detailed"
lists of their requirements, which Djilas has promised to
do as soon as possible.
EUROPE
11,8 FEB 1951
1515
517s
2. FRANCE: Threat to Pleven regime--US Embassy Paris
reports that although Premier Pleven no longer appears _ifif /C0,4
vulnerable from a foreign policy angle, speculation is rife
as toy.thOther his government can survive any of the issues
due for 'consideration this week. The parties of the coali-
tion are as dissatisfied as ever with each other on the issue
of electoral law reform and with the government for opposing
increases in expenditures which would have a large appeal
to the electorate but which would upset the budget. The
Embassy expresses the belief that the coalition will hold
together because the government and party leaders are still
seeking compromise solutions. Additional factors militating
against a crisis at this time include: (a) the probability of
a poor effect abroad; (b) the difficulty of forming a new gov-
ernment; and (c) uncertainty as to how the defeat of the
Document No. 0 S,
1 NO CHANGE in Class. 0
E2 DECLASSIFILT
Class. C:IANCED TO: TS S
DDA Memo, 4 Apr 7T
Auth: DDA REG. 77/3/76.3
Date : 41 AM 1i/8
MEW T
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'/DEN
1W E T
government would bring about a. solution of the electoral
law reform issue. The Embassy warns, however, that the
situation can change "almost from hour to hour" and states
that the usual French impatience with any government that
has been in office for over six months must also be reckoned
with.
3. GERMANY: Analysis of present Communist campaign--The
US High Commission in Bonn reports that West German
Communists are now stepping up their campaign to capitalize
on prevailing popular indecision, fear, and general desire to
avoid or postpone positive steps toward joining in Western
defense efforts. According to the Commission, the Commu-
nists are currently posing as public-spirited Germans work-
ing for peace and unity while hiding the fact that they are
actually members of the Communist Party. Although they
are having little success in influencing the major political
parties, they are apparently making some headway with many
neutrality, peace, youth, women's and farmers' organizations.
The Commission comments that the USSR has many advantages
in the propaganda battle now going on and stresses the impor-
tance of a speedy conclusion to the proposed Four-Power meet-
ing as well as rapid progress in military and political talks
affecting the relationship of the Federal Republic with the
Western Powers.
FAR EAST
4. INDOCHINA: Obstacles to formation of Cabinet�According
�to US Legation Saigon, it is by no means certain that President
Huu will be able to form a Cabinet in view of the differences
between him and Emperor Bao Dai. The Cabinet crisis is
2
tty
ET
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Tt1Th E T
assuming the form of a contest between Bao Dai as chief
of state and the central government which has many impli-
cations for the future political life of Vietnam. The Lega-
tion points out that Bao Dai has already seized the initiative
by proclaiming his program for social and economic re-
forms, thus throwing credit for the reforms to the chief of
state rather than to the government. President Huu, on the
other hand, has declared that the principal difficulty he is
facing in persuading competent persons to join his Cabinet
is their reluctance to participate in a government which
reposes "on the will or whim of one man."
3
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0,
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4,B 139 I z 1514
TUNFil�OgNfiAth
GENERAL
1. Analysis of Soviet note on CFM--In the opinion of US
Embassy Moscow, the latest Soviet note on the Conference
of Foreign Ministers adheres, for propaganda purposes,
to the narrow limits of the original Soviet proposal and
"tends to clarify" the Soviet intention to insist that Ger-
man demilitarization be the first matter discussed. The
Embassy also believes that the reference to the Potsdam
Protocol indicates a Soviet desire to restrict the scope
of the discussions to Germany and possibly Austria.
The Conference of US Ambassadors currently
meeting in Frankfort believes that the attack in the Soviet
note on the general build-up of Western defense, as con-
trasted to German rearmament alone,, gives the Western
allies an excellent opportunity to respond vigorously,
placing the matter in its proper 'perspective and turning
attention to the general aggressive attitude of the USSR
and the excessive Soviet military strength in being. The
Conference thinks the time has arrived for a positive
approach which clearly identifies the basic causes of
tension and places full responsibility on the USSR. Such
an approach should make it clear that any questions in-
volving Germany, including demilitarization; must be dealt
with in relation to these basic causes of world tension.
2. British views on Chinese Communist intentions--According
to US Embassy London, the British Charge in Peiping has
informed his government that on 3 February Chou En-lai
told Indian Ambassador Pannikar that: (a) the US did not
realize the seriousness of what it had done by sponsoring
the UN resolution condemning the Chinese Communists as
rmiirll
intArTE T
Document No.
5/s
NO CHANGE in Class. 0
0 DECLASSIFIED
Class. CHANGED' TO: TS S
DA
Auth:, DDA REG. 7711763
Date:
D3APIerao
RAi978., By: je
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IDEttiAr E T
aggressors; (b) the conflict is now likely to spread;
and (c) as long as the Chinese Communists are branded
as aggressors,Peiping will have nothing to do with the
UN Good Offices Committee. The British Foreign Office
is inclined to believe that Chou is merely engaging in
more propaganda aimed at widening the rift between India
and the US. The Embassy notes, however, that the British
seemed uneasy lest Chou "really meant what he said,"
especially with regard to the spread of hostilities. As
possible indications of more active Chinese participation
in Indochina, the British cited the apparent failure of the
recent Viet Minh offensive, concentration of Chinese troops
along the Indochinese border, and the relaxation of Chinese
military pressure in Korea.
EUROPE
3, YUGOSLAVIA: Decision to seek arms from West�US Am- egi Ts
bassador Allen expresses the opinion that the Yugoslays
have made the basic decision to seek substantial military
aid from the West but that their initial efforts will be to
obtain supplies through commercial. credits. Allen states
it is evident that negotiations or feelers are going On in
several places and that the Yugoslays are frying indirectly
to find out what they can obtain; he believes the Yugoslays
will make a more direct approach if they fail to obtain arms
through commercial channels. Allen feels it is preferable to
wait until the Yugoslays make a direct request, because negotia-
tions on Western initiative would obligate the West to furnish
"more supplies more rapidly" than would be feasible.
2
Tintlie RAI T
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TcJJNF1amt1tT
4. GERMANY: Current thinking on East-West German talks--
According to the US High Commission in Bonn, it now appears
that the Federal Republic will soon decline the latest East
German proposal for East-West German negotiations on
unification and will appeal to the four Occupation Powers
for free all-German elections. Most West German leaders
believe that any reply which would contemplate talks would
be most dangerous, in that once the talks began the East
German delegates would not only have a first class platform
for their propaganda but anexcellent opportunity for delaying
a final-decision on German defense. These leaders also now
doubt that the majority of West Germans would urge acceptance
of East-West German talks prior to free elections in East
Germany. In the Commission's view, most West Germans
are still "unconcerned, undecided, or skeptical" over Ahe
specific issue of the necessity of meeting with the East
Germans.
5. ITALY: Reported change in Communist policy--US Embassy
Rome expresses the view that the recent speech given by
Communist leader Secchia may mark a turning point in Com-
munist Party policy in Italy which viould bring Italian Com�
munisit into line with SOviet "proletarian internationalism'',
and away from the "nationalist" line which the Italian Party
has been following. The Embassy also believes the speech
may indicate that Moscow has realized that the Italian Com -
munist Party must be "Bolshevized" because it contains too
many opportunists, real patriots, and undisciplined members
who have given the party "quantity" but not, in the eyes of
the Kremlin, "quality." The Embassy has been told
if the present
itatian Government continues in the democratic tradition under
De Gasperi, the Party is likely to undergo considerable dis-
integration, particularly if a nationalist Communist movement
should emerge.
-3
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E T
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6. CZECHOSLOVAKIA: Communist purge reportedly under way--
US Legation Vienna has been informec
that Czechoslovak President Gottwald is under sharp police
surveillance and tension is high among the Czechoslovak people,
with large numbers of officials and private individuals being -
arrested daily< Soviet Deputy Foreign
Minister Valeri Zorin, who allegedly engineered the Communist
coup in Czechoslovakia in 1948, is now on a secret visit to
Prague.
FAR EAST
7. INDOCHINA: Indonesians reportedly attempt mediation--
US Embassy Manila has learned
that the Indonesian representative in Rangoon had been in-
structed to approach representatives Of Ho Chi Minh to
ascertain whether any useful steps could be taken to bring
about an understanding or basis for peace between Ho Chi
Minh and Bao Dal. The Embassy understands that up to the
present no reply has been received to the Indonesian approach.
Meanwhile, US Embassy Rangoon has been told by a Burmese
politician that the Viet Minh recently expressed interest in
mediation with the French and that Ho Chi Minh's terms of
reference are expected soon. The Embassy believes these
negotiations were begun on the initiative of the Indonesian
Ambassador in Rangoon.
4
Maga E T
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T C1F1AthLE
T
GENERAL
2. Indian thinking On US role in Kashmir dispiite--In a dis-
cussion of possible UN action on the Kashmir dispute,
Secretary General Bajpai of the Ministry of External Affairs
told US Ambassador Henderson that he personally hoped
the US would not at this time take the lead in any action
which might be construed as bringing pressure on India
regarding Kashmir; Bajpai thinks that if the US initiates
or plays the leading role in such action, it would be
difficult to convince the Indian press and people that the
US was not "getting back" at India for the position India
had assumed on Korea and the Far East
EUROPE
3. UNITED KINGDOM: �Support for Attlee Government lessens--
US Embassy London transmits the results of a recent Gallup
Poll which shows that since December 1950 Conservative
ilErtTME E T
o s
6 FEB 1951
1513
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�
315
THE C.I.A. HAS NO OBJECTION
TO THE DECLASSIFICATION OF
THIS DOCUMENT.
3
No. APR 1978 0/)'
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TOP E T
strength has risen sharply (from 46 to 51 percent), with
a corresponding decline in support for the Labor Govern-
zhent (43 to 38 percent). The poll indicated that only
hvice since 1945 has confidence in the .government been
SO low, once after the dollar crisis in 1947 and once after
devaluation in 1949. An analysis of the poll reveals that
support for the government fell off most sharply among
the lower income groups and the trade unions, the principal
reasons being the rise in the cost of living, shortages of
food and fuel, and steel nationalization. (The British Gallup
Poll has a consistent record for accuracy in previous surveys
of public opinon.)
,
ft
'2
Coy
01
TOP
P4RE T
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T OCiPME
GENERAL
MT
1. Analysis of Soviet position on Germany-4n an analysis
_ of the. latest East German proposal for negotiationson -
German unification, the US High Commission in Frankfort
concludes that the USSR has not yet exhausted its efforts
to win control of Germany through cold-war tactics of
pressure, intimidation, and negotiation and that these
� tactics will run their course before force is employed.
The Commission points out that the latest proposal offers
very little if any encouragement for believing that the
USSR or East Germany is ready to do more at this time
than offer concessions in bad faith and in contexts where
it can safely be assumed that the Western Powers must
refuse the concessions offered. In the opinion of the Com-
mission; the East German proposal is clearly a move to
strengthen the Soviet politico-psychological posture in
West Germany and Indicates a Soviet willingness to make
some concessions to West German opinion in an effort to
attain the Kremlin's strategic aim of a demilitarized West
Germany.
The Commission warns, however, that regardless
of the Soviet motives, the conciliatory tone of the proposal
brands it as a genuine diplomatic move which must be
answered on its merits if the German people are to be
convinced of the folly of all-German talks on East German
conditions. Acceptance of these conditions would in fact
hand control of Germany's future to the USSR rather than
keep it within the control of the four occupying powers. The
Commission adds that all-German talks of the kind proposed
by the East Germans would permit the Germans, rather than
the occupying powers, to negotiate a complex of subjects
affecting the future of Europe and Germany and would delay
and possibly disrupt present allied-West German negotiations
. �
:
...o.. contractual relationship and rearmament.
5 FEB 1951
1512
THE C.I.A. HAS NO OBJECTION
TO THE DECLASSIFICATION OF
THIS DOCUMENT.,
No. 3 APR 1978 01';
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AMGEN Till E T
FAR EAST
2. CHINA: Report on internal conditions--US Consul General
McConaughy in Hong Kong transmits information concerning
Communist China
(a) Communist control nas
been strengthenedas a result of violent suppression during
the past few months ofpersons in active opposition to the
Communists or considered unreliable; (b) the Communists
have largely succeeded in neutralizing the educated in large
cities through appeals to their patriotism and because of their
fear of a monopolization of information; (c) dislike for Com-
munism is growing; and (d) anti-American propaganda has
not .caused the people generally to manifest any dislike for
Americans, guerrilla
activity appears to have decreased; fear and lack of leader-
ship-have paralyzed many who are opposed to the Communist
regime, and there is a growing feeling that resistance is
hopeless unless the outbreak of world war, brings drastic
changes. Except among the educated class, the growing dis-
like for Communism is not specifically related to Comminist
international policy, but rather to depressed economic condi-
tions and increasingly stringent police controls.
3. KOREA: North Korea in chaotic condition--According to-
US Ambassador Mucci� in Pusan, Pyongyang radio treat-
ment of a recent North Korean Cabinet decision indicates
that chaotic conditions exist in North Korea, including
defeatism among the civil population, a serious food shortage,
and almost complete disruption of agriculture because of a
shortage Of both manpower and seed. The radio commentary
2
ToormatitE T
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T SONVEnt T
spoke of the "agrarian economy destroyed by the enemy"
and mentioned a village in south Pyongyang province where
one young man remains out of eighty farm families. The
Cabinet decision revealed that 610,000 factories, houses,
and other buildings have been destroyed and 60 percent of
domestic' animals lost.
4. INDONESIA: Attitude toward Pacific defense pact--Foreign
Minister Roem has informed US Ambassador Cochran that
"it would not be consistent with Indonesia's peace policy"
for Indonesia to participate in a Pacific defense pact now.
In reply_to a question from Cochran, Roem said that the
Indonesians would expect the US to defend them if Indonesia
is invaded by the Communists. Cochran remarked-that if
such was the Indonesian expectation, it would be better to
do some advance preparation rather than to await danger.
Cochran feels that now is the propitious time to bring the
Indonesians to face the realities of the world situation;
he believes that if the US continues a "too gentle" policy
with Indonesia, the country itself will not only become a
problem but will contribute to the strengthening of the
Asiatic-Arab bloc, thereby creating a much bigger problem.
3
NfamflAt E T
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(-)
1.
EUROPE
3 FEB 1951
2. SPAIN: Franco's views on East-West struggle--According
to US Embassy Madrid, General Franco in a recent interview
with a US correspondent openly stated he would prefer a bilat-
eral military and economic agreement or alliance with the US
rather than Spanish participation in the UN or the North
Atlantic Pact. The correspondent gained the impression that
-Franco underestimates Soviet strength and believes that Ger-
many is capable of forming a first class army.
3. AUSTRIA: Concern over Communist disorders in spring--US
Minister Donnelly reports that Vice Chancellor Schaerf is
greatly concerned over the possibility of new Communist dis-
orders in late February and early March. As an indication of
trouble in February, Schaerf pointed to the continuous training
of Communist strong arm squads in the Soviet Zone for forcible
seizure of industrial installations and public utilities, and to
Communist inspired demands for a 20 percent wage boost.
Schaerf anticipated that high unemployment might prevent effec-
tive control of the workers by the Socialist Party and that the
1
Document No.
1511
02,1
0/ 3.3(h)(2)
cvit)/..5
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0 DECLASSIFIED
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Auth: Dp1U:C. 77/1703 -
Date: 0 mrR 1978 By:
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44*v
danger was therefore greater than at the time of the Com-
munist disorders in October, 1950, Chancellor Figi also
admitted the likelihood of Communist-inspired riots in
February, but estimated that Austrian security forces were
capable of controlling the situation. He expressed the view,
however, that reduction of unemployment was essential in
order to minimize the effect.of any Communist disturbances,
FAR EAST
4, INDOCHINA: De Lattre's fears of "provoking" Chinese--
In a recent conversation with US Charge Gullion in Saigon,
General de Lattre expressed the view that a proposal to.
create a joint US-British-French headquarters for consulta-
tion on Indochinese affairs should be approached with "great
caution." Admitting that some kind of consultation was
certainly desirable, De Lattre stressed the importance dur-
ing the next four to six months of avoiding any provocation
of the Chinese; he feared that the association of the US and
UK in some kind of permanent headquarters might "touch
off Chinese reaction" and disturb the "present delicate
balance."
French interference with Bao Dai cabinet--A leading
Vietnamese official has told US Legation Saigon that French
interference is principally responsible for the complications
currently delaying the formation of a new Bao Dai government.
The official declared that the French were meddling at every
step by opposing the appointment of "real nationalists."
.$1/11IIE T
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T (Mow T
GENERA",
1. No imminent hostilities foreseen in Eastern Europe--
US Embassy Paris reports that-the chiefs of US missions
in Eastern Europe, now meeting in Paris, have agreed
that evidence available to them does not suggest the
imminence of an outbreak of hostilities in their areas.
Although the development of the military capabilities of
the Soviet Union and the Satellities is progressing steadily
(more rapidly in Hungary), present signs suggest that this
effort is designed to build up long-term military strength
rather than to support hostilities in the immediate future.
The chiefs of mission caution, however, that a change in
this situation could occur at any time and, because of the
increasing limitations on facilities for observation, might �
not be immediately detected.
These US officials believe that the chances that
the USSR will not move on its own�vOlition in the immediate
future appear greater than the chances it will. They point
out, however, that actions of the Western Powers directed
toward reducing the gap between Communist military
strength and their own could conceivably alter the present
attitude of the USSR, as could any inept move on the part
of the West. They consider, therefore, that the extent and
the manner of the rearmament of West Germany mayibe
of "paramount importance." In this connection, they cite
the intense Soviet and Satellite propaganda reaction to
the question of German rearmament and observe that � �
this reaction demonstrates "the gravity of that step to
the Soviet orbit for the future." Pointing .out that this
� rwtion appears to have been more violent in the Satel-
� lites than in the USSR, the US chiefs of mission say it is
not possible to determine whether these admonitions
Document No.
2 FEB 1951
1510
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DECLASSIFIL'D
Class. c,a-i'cim TO: TS S
DDA Memo, 4 Apr 77
Auth: DDA REG. 77/1763
E Date: 3 APR 1978 By:
T Ver
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ikEittiE T
are part of the war of nerves or whether they forecast
direct action if West German rearmament gets under
way. They estimate that because the USSR undoubtedly
realizes the Western Powers are aware of the magnitude
of military development in East Germany, the Kremlin
� probably would not be provoked per se by a comparable
effort in West Germany.
2. Yugoslays make direct arms request of British--A high
Foreign Office member has told US Embassy London
that Yugoslavia has made a direct arms request through
a Yugoslav official (Milovan Djilas) to Prime Minister
Attlee. The request was couched in general terms,
without any indication of the amount or specific nature
of the material envisaged by the Yugoslays, although
Djila.s did speak of a desire for "certain.arms, machinery,
raw materials, and license rights" for the manufacture Of
arms. He stressed the importance the Yugoslays attach
to unobtrusive handling of this Smatter. Attlee reportedly
gave a noncommittal response to this approach.
3. Yugoslays expect Soviet action against Germany--Belgian
Prime Minister Pholien has told US Ambassador Murphy
of a discussion with the Yugoslav Minister in Brussels
concerning Western defense. The Yugoslav diplomat in-
formed Pholien that his government now considers the
question of Yugoslav participation in Western defense
measures to be "premature" but has the matter under
study. The Yugoslav said further that his government be
that Soviet pressure will be directed against Germany,
because of the rearmament question, rather than against the
Balkans.
2
ONFIDENIYAr E T
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�
EUROPE
4. UNITED KINCOOM: Disillusion over Chinese Communists--
US Embassy London reports that members of the Foreign
Office are thoroughly discouraged over the failure of the
Chinese Communists to take the initiative in negotiations
on any single occasion. These British officials point out
a "striking parallel" between Chinese negotiations with
the UN and their negotiations with the UK for the establish-
ment Of diplomatic relations. The British feel it should now
be apparent to all that the Chinese Communists: (a) never
seriously intended to negotiate a peaceful settlement in the
Far East; (b) never sincerely desired to establish diplomatic
relations with the UK; and (c) have never made a serious
effort to enter the UN but have only made noises to that
effect.
3
tt ET
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NEAR EAST- AFRICA
5, FRENCH MOROCCO: French account of impasse--According
to US Embassy Paris, the French Foreign Office has con-
firmed-the report that General juin had been "rough" with
the Sultan 'ofMorocco and had threatened him with forced
abdication- if the 'Sultan was not prepared to make a declara-
tion denouncing the terrorist "Fascist" methods of the
Nationalists in Morocco, to remove certain anti-French
members in his entourage, and to 'stopstalling on reforms
which the French wish to initiate with a view to democratizing
. the regime. Explaining thatJuin'S menacing attitude toward
the Sultan was only intended to "bring him to reason';" a high
Foreign Office official discounted the possibility of the Sultan's
removal largely because he feels the Sultan will probably -
accede: He indicated no action would be taken in the situa-
tion until after juin returns from Washington.
FAR EAST
6. INDOCHINA: Chinese troops reportedly in Laos province--
US Legation.,Saigon reports that Chinese Communist troops
have crossed the border into Laos province and that the
Chinese have closed their border in the area near Laos,
Thailand, and Burma. The Legation does not regard this
'Chinese "reconnaissance in force" as a threat "in itself";
according to the French, the crossing was made to ascertain
the presence of Chinese Nationalist troops in the area, to
obtain information regarding French military, installations
and road conditions, and to determine the attitude of the
natives toward the Chinese Communists, The Legation be-
lieves that the Chinese action in closing the border in this
area may be linked with their preparations in the Chinese
province of Yunnan for a show of force against Burma and
Thailand. The British and General de Lattre, however, are
beginning to fear that a build-up in Yunnan may be a pre-
liminary step to "turning the flank" in Tonkin.
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ATM E T
1 FE 1951
1951
1509
3.3(h)(2)
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T Fin T
2, THAILAND: Reported Communist plans to incite Chinese--
US Minister Rankin in Taipei transmits a "probably true"
report from the Chinese Nationalist Foreign Office that
Communist agents in Bangkok have decided on plans to
incite the Chinese in Thailand against the Thai Government,
using up to US $1 million for such purposes. According to
source, part of this sum is to be used to bribe members of
the Thai Parliament to vote for a bill now in draft form,
which_would,require all aliens to leave certain designated
areas within 60 days of passage of the bill; these areas are
-2
IDEPTTA T
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important economic centers where many Chinese are
concentrated.- The Nationalist Government believes the
Communists see an opportunity here to cause disturbances
by inciting the Chinese to "rebel at the gross injustice"
of the Thai authorities.
NEAR EAST-AFRICA
2, FRENCH MOROCCO: Situation tense--US Minister Plitt coy. Is
in Tangier reports that the situation in French Morocco /
is becoming increasingly tense as a result of the impasse
between French Resident General Turn and the Sultan of
French Morocco over the question of the Sultan's relations
with the Nationalist political movement. A French official
has confidentially informed Plitt that Tuin has demanded
that the Sultan denounce the Nationalists and dismiss cer-
tain court personnel who are "inimical to French interests."
This official denied that an ultimatum had been-given, re-
quiring the Sultan to abdicate, and expressed the belief that
the Sultan would accede to Tuin'S terms. Plitt envisages.
"no good" in the present sittiation and says that if it is
permitted to worsen, the US position and military program
in Morocco may be seriously prejudiced.
Meanwhile, US Consul McBride in Rabat reports he
has received confirmation from official French sources that
the French are considering the possibility of replacing the �
Sultan. unless a change in his attitude toward the Nationalists
occurs rapidly.
3. ISRAEL! Soviet displeasure with Israelis�According to US
Embassy Moscow, the French Embassy in Tel Aviv has re-
ported that the recent Soviet demarche to the Israeli Govern-
ment asked for an explanation of Israel's orientation towards
3
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T aNFREAtibit
the West and accused the Israeli Government of having
already contracted military and political ties with Western
bloc countries, including Turkey. The Israeli Foreign
Minister reportedly replied that Israel is still pursuing
its non-aligning policy and had contracted no such ties.
In its report, the French Embassy commented that the
two-month delay in Soviet acceptance of the Israeli
Minister-Designate is another sign of Soviet displeasure
with the Israelis.
. EUROPE
3.
3(h)(2)
4
PIFIDENT4Ai
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48133 T oempailutur
31 JAN 1951
1508
FAR EAST
1. INDOCHINA: De Lattre urgently requests aid�The US gXMV/Iiiiii
Military Attache in Saigon transmits a request from
General de Lattre, French High Commissioner for Indo-
china, that his need for French troops and materiel in
Indochina be brought to the attention of General Eisenhower
and the Joint Chiefs of Staff. De Lattre most urgently re-
quests that Eisenhower advise French Premier Pleven to
furnish these troops and materiel because of his conviction
that: (a) the USSR will strike in Western Europe only after
the Asian flank is positively secured, and troops in Indo-
china will "buy time" for the formation of armies in
Western Europe; .(b) holding Tonkin, the gateway to South-
east Asia, would prevent the Chinese Communist forces
from overrunning the entire continent and advancing the
Soviet opportunity to seize Europe; (c) the troops and
materiel requested represent the capability for successful
tenure against the entire Viet Minh forces, plus four Chinese
Communist armies (the estimated maximum which could be
committed and supplied, considering the present Chinese
commitment in Korea);: and (d) the time gained for the forma- �
tion of a Vietnamese Army might conceivably permit the
return of metropolitan troops to France in 16 to 18 months.
De Lattre told the MA that he would personally present the
request to Pleven during February and reiterated emphatically
that he would resign his command if his request is refusbd.
The MA comments he is convinced the requested
reinforcements are adequate and necessary for the accom-
plishment of de Lattre's mission; he also considers that �
since de Lathe's assumption of command in Indochina, the
combat efficiency, general morale, and operational adaptability
1
ET
Document No. 0
1.4
NO CHANGE in Class. 0
fl DECLASSIFIED
Class. C :D TO: TS S
DDA Tlc,rao, 4 Apr 77
Auth: DDA PG. 7711763
Date: APR 1978 By:
�O21
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of the troops have greatly improved. The Attache reports
� a discussion with de Lattre's planning chief, Colonel Boffre,
concerning the formation of the Vietnamese Army, stating
that this is the first time the concept of a Vietnamese Army
was so definitely expressed by a responsible official.
EUROPE
2. FINLAND: Possible indicators of Soviet plans to attack-- agnil y Ts
The Department of the Army has advised the US Military
Attache in Helsinki that the recent Soviet propaganda attack
on Finland, as well as Soviet military interest in the Scan:-
dinavian area, warrants giving special attention to all informa-
tion indicating any possibility of a Soviet .attack on Finland.
In this connection, the Department lists as recent indications:
the rumors both of Soviet interest in Finnish mobilization
plans and of their desire for radar installations in Finland,
Soviet purchase of maps of Scandinavian waters and Finland,
East German reconnaissance of Scandinavian ports, the
November sabotage incident in Norway, and the identification
of Marshal Meretskov, the wartime Soviet commander of the
northern front, as commander of the White Sea military district.
2
MON
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CONFMENTIRE
"Th
4. YUGOSLAVIA: Soviet attack against Germany expected--
US Ambassador Allen has gained the impression from re-
cent talks with Marshal Tito, Foreign Minister Kardelj,
and other Yugoslav officials that the Yugoslav high command
has convinced itself that the "next Cominform attack" is
more likely to be against West Germany than against Yugo-
slavia. According to Allen, the Yugoslav officials believe
the Kremlin would make German operations appear to be
"unification measures" instituted by the Germans themselves,
thereby avoiding a clear-cut case of aggression against an
independent country. The Yugoslays think operations in
Germany could begin at any moment but the timing probably
would depend on developments in the Far East. Allen voices
his suspicion that because of Tito's and Kardelj's insistence
that aggression means an attack against an "independent
country" and Tito's expressed belief that a four-power
political settlement of the German question should precede
German rearmament, the Yugoslays may be building up a
position to justify their neutrality if Germany becomes a
"second Korea" and fighting is limited to Germany. Allen
believes the Yugoslays are prepared to join the fighting if
It spreads, whether Yugoslavia itself is attacked or not.
The US Air Attache in Belgrade reports that a
representative of the Yugoslav Foreign Office recently
stated that an attack on Yugoslavia is not likely this Spring.
The Yugoslav said further that the next outbreak would prob-
ably take place between East and West Germany and that
the Russians "still remain opportunists" and without a
time-table.
5. ITALY: Resignations among Communist leaders--US Em- CY/7
bassy Rome reports that the discontent which has been
brewing for some time within the Italian Communist Party
4
4
TONflAtt T
AL;
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has finally boiled over in high party circles. Cucchi and
Magnani, two of the most important Party leaders in the
Emilia region, where the party has the largest single
regional membership, have broken with the Party; Magn.ani
delivered a speech in which he committed the "heresy" of
clearly putting the interests of the Communist movement in
Italy above the state interests of the Soviet Union. The
Embassy believes it is premature to evaluate fully the re-
percussions of this action, stating it is not yet clear whether
the two men represent a large organized group nationally
or even in Emilia.
5
Nriodyi, E T
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NFIBENItt T
EUROPE
1506
1..
1
Document No. 021
�
fi"
NO CHANGE. in Class. o
O DECLASSIFIED
Class. Ca:AC-ED TO: TS S C
DDA Memo, 4 Apr 77
Auth: DDA REG. 77/1763
Dnte 3 APR 197R By.:, 9>t
ET
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Nan E T
2. HUNGARY: MA comments on travel restrictions-- The
US Military Attache in Budapest, in commenting on the
travel restrictions recently imposed by the Hungarian
Government, observes that recent field coverage through-
out the country "certainly produced nothing" to indicate
any imminent build-up by the Hungarians in the Yugoslav
border area or any unusual Soviet activity. In this con-
nection, he further observes that the current disorganized
state of the Hungarian Army, as the result of "somewhat
clumsy" attempts at a build-up, should preclude its parti-
cipation as an entity for several months at least. He grants,
however, that the army has the capability to help launch and
support logistically any partisan activity against Tito. Con-
cerning the new travel restrictions, the MA "cannot believe"
they have been imposed for any immediate purpose, either
military or political, and suggests only that they represent .
a general tightening of security in order to conform more
closely to the Soviet pattern. He points out, however, that
the possibility cannot be dismissed that the USSR ordered
the restrictions in order to hide a planned influx of Soviet
troops. He estimates that the restrictions have reduced
the effectiveness of his office by 75 percent.
3; FRANCE: Government thought "ripe" to fall--US Embassy alli
'Paris expresses the view that the Pleven Government "has
about exhausted its reservbir of good will" and may fall on cm.
any one of the issues now on the Assembly schedule. The
Embassy points out that the dissatisfactions of the Radicals,
Socialists, and the MRP with the government are related to
issues which they consider especially important because of
the coming elections. The Embassy- believes that Pleven
could get his "second wind" if he could drive the government
2
ci
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TOON-rdle T
and Assembly through to conclude the electoral reform
law and that he would be considerably helped if he could
claim, upon his return from the US, that the US has gained
in its understanding of the French point of view and certain
French needs, particularly with respect to Indochina. The
Embassy considers that given this and the conclusion of the
electoral reform law, the Pleven Government might last
until the elections. The Embassy's first guess as to Pleven's
successor, if his government falls before the elections, is
Bidault, president of the MRP. According to the Embassy,
� Bidault has a double advantage for the Radicals in that he:
(a) is a convinced proponent of close alignment with the US;
and (b) has shown extreme moderation on the electoral re-
form law issue.
Government deals vigorously with Communist fronts--
US Embassy Paris believes -the French Government's 24 Jan-
uary orders, calling for the dissolution within one month of
the World Federation of Trade Unions, the World Federation
of Democratic Youth, and the International Federation of
Democratic Women, offer further encouraging evidence of
official determination to deal energetically with the Com-
munist threat in France. Moreover, the French Government
has by this action deprived these Communist front organiza-
tions of the hallmark of respectability which possession of
a headquarters in a Western capital has heretofore given
them.
T
/9
FEENTIALE T
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I
NFI
nAt E T
GENERAL
2 JAN 1951
1505 111111
1. French estimate of situation inside Communist China--
The French Foreign Office has passed along to US Em-
bassy Paris a recent report on the Chinese Communist
internal situation by French Military Attache Guillermax
who recently left Nanking and has just arrived in Hong
Kong. According to this report, the internal situation in
Communist China has "profoundly changed," both from the
morale and economic standpoints, and the Chinese Corn- -
munists have abandoned the "primary task of reconstruc-
tion" in order to adopt measures putting the country on a
war footing. US economic measures have obviously hurt
industry, particularly in Shanghai, but they are not sufficient
to change the "present situation." Police control is extremely
strict and there is no internal danger to the regime. Although
certain divergencies exist among Chinese Communist Politburo
leaders, the absence of purges or resignations among those
leaders provides evidence of a unity of views. Chinese Com-
munist military-diplomatic successes in the first action
beyond Chinese borders in a hundred years appeal to nation-
alistic instincts and pride.
The French Military Attache makes the following
estimates concerning Chinese Communist foreign policy:
(a) China will not be able for a decade or more to rid
itself of Soviet pressure and influence in foreign affairs;
(b) China's economic weakness and relative military weakness
in "modern war" permits the USSR to take advantage and
strike at Western interests in Asia; and (c) Chinese initia-
tive is gradually adapting itself to the "rhythm desired" by
the USSR in relationship to the whole world situation, not
merely the Far East,
Document No. 013
NO CHANGE in Class.
El DECLASSIFIED
Class. CIA TCL-D TO: TS
DDA nomo, 4 Apr 77
Auth: DDA 12C. 77/1763
3 APR 7978 By:
0
Date:
MNFIDEVITIK E T
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2. Tito's views on world situation--US Ambassador Allen in
Belgrade reports that in a discussion between Tito and US
Congressman Kennedy concerning collective security
measures and the reluctance of the Yugoslav and other
governments to support such measures in Korea, Tito
said that collective security is a world-wide problem which
might fail if undue effort is expended in peripheral areas.
Tito expressed his confidence that general war would "in-
evitably result" from Soviet aggression against any in-
dependentEuropean nation, whether covered by the Atlantic
Pact or mot; he said he was confident that the Western Powers
would not be foolish enough tolet Yugoslavia, Finland, or
any other country be overrun by the USSR. Tito stressed
the vital importance of Yugoslavia's strategic position and
the fact that the Yugoslav Army would fight. He said he
does not expect an attack on Yugoslavia this spring but he
is "no prophet." He emphasized that in case of attack he
would not need foreign troops, stating he could put at least
two million men under arms, depending on the amount of
equipment he could get.
Regarding a Big Four meeting, Tito said he was in
favor of a meeting and he thought the German problem should
be settled politically before Western Germany is rearmed.
He did not specify his reasons but seemed to regard the
rearming of Western Germany prior to a political settlement
as dangerously provocative. When asked whether the West
should negotiate with the USSR until it is stronger, Tito
replied that the USSR was well aware of Western ability, to
fight a long war and would respect Western strength.
2
PS12 E T
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EUROPE
3. FRANCE: Communist "fizzle"
no sign of weakness--
US Embassy Paris expresses the opinion that it would
be "grossly misleading" to interpret the Communist
demonstration ovek.General Eisenhower's'visit'as a .
major setback for the Communist Party. Although from
a numerical standpoint the demonstration "obviously
fizzled badly," the Embassy points out that industrial
workers were notably lacking, from the display. Whether
�as a result of the governinent's effective show of force
or not, the Embassy believes the Communists decided
not to commit their cadres in any all-out demonstration
at this juncture and that.thereforeAhe demonstratton may
not be regarded as an honest test of Communist strength.
On the other hand, the Embassy states that the demonstra-
tion 'offers extremely encouraging evidence that the French
Government has both the will and capability of taking rapid
effective and energetic action against the Communists when
the occasion warrants.
NEAR EAST-AFRICA
4. IRAN: Grady proposes removal of US women and children--
US Ambassador Grady proposes, in view of "increasing tension!'
in the international situation an the difficulties and dangers
attending any emergency evacuation, fo effect a "quiet de-
crease' in the number of women and children in Tehran.
Grady says he realizes the.necessity of' avoiding -bOth hysteria
in the American community:there and the political implications
of any announced Embassy policy showing a lack of US con-
fidence in the local government or a fear of imminent war, but
he desires authorization to .evacuate the dependents of Embassy
personnel "at their request."
3
�
T SaNFICUME T
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FAR EAST
5. INDOCHINA: Possible French deal with Viet Minh--The d. b
British Charge at Saigon, according to a report trans-
knitted by US Embassy London, believes that French High
Commissioner de Lattre is thinking of negotiating With
the Viet Minh, De Lattre's purpose, in the view of the
British Charge, would be to gain time to strengthen his
position against the possibility of Chinese attack. The
Charge also considers that de Lattre hopes, by going
slow in his military campaign against the Viet Minh, to
encourage the Chinese not to intervene. De Lattre is
reported to have said he could retake Langson but he
does not wish by so doing to run the risk of forcing the
Chinese to intervene. The Charge is uncertain what
de Lattre would be prepared to offer in negatiationa,mith
the Viet Minh, believing he has not yet had time to think
through the problem, but reports a rumor that a condominium
may be contemplated for the areas of Indochina north of
the 16th Parallel. The purpose of such an arrangement
would be to keep the Chinese out, prevent the Indochinese
Communists from gaining control, and keep French troops
in the area. Indicating that a further purpose would be to
detach the Viet Minh Nationalists from Ho Chi Minh, the
Charge comments that prospects are poor for this because:
(a) Communist control is too strict to permit such negotia-
tions; (b) the continued presence of French troops would be
an insuperable obstacle; and (c) a more nationalistic govern-
ment than that of Bao Dai would be required to attract the
Nationalists.
4
11�411741
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48129 T T
GENERAL
1. Analysis of Asian anti-Western feeling--US Embassy
Moscow, in noting an increasing tendency on the part of
the Pakistani Ambassador in Moscow to be critical of
the policies of the Western democracies toward Asia,
reports that in recent conversations the Pakistani Am-
bassador has emphasized, that the Asian countries will
gravitate to the "camp" which permits them maximum
"freedom and independence." The Embassy remarks
that Soviet Communism may have tapped a deeper and
more extensive reservoir of latent but enduring animos-
ity toward the democratic West than is generally realized
by non-Asians. �The Embassy considers that the US must
frankly face the fact that these deep-seated causes of
Asian mistrust and suspicion cannot be easily or quickly
eliminated and that the USSR possesses "enormous initial
psycholOgical advantages in the battle for the soul of Asia."
The Embassy believes there may be a protracted period
before the Asian countries learn from "bitter experience"
that they have been seduced by the "subtle and deadly
imperialism of the Kremlin" and feels there is the possi-
bility of a showdown during this period when the USSR is
still profiting from its initial advantages in Asia. The
Embassy therefore suggests that the time may have come
for the US to make "a more realistic appraisal" of the
prospects for genuine alliances with selected Asian coun-
tries which are inclined for historical and cultural reasons
to be both more resistant to Soviet imperialism and more
receptive to mutually beneficial arrangements with the
West than are other Asian countries.
Meanwhile, Lebanon delegate Charles Malik has
strongly urged to the US delegation at the UN that the US
not permit itself to be deviated from a firth, consistent
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line by what he described as the "nonsense" of the Asian-
Arab world. Malik also spoke of "the growing axis" between
India and Communist China and spoke of it as being "morbid
and pathological." �He said it was impossible for one who
had not participated in the meetings of the Asian-Arab group
to understand how apparent this tendency is and how serious
for the Western world.
EUROPE
2. ITALY: Weakness of Communist Party displayed--According
to US Embassy Rome, a high official in the Ministry of Interior
believes the weak Communist display during General Eisen-
hower's visit is the latest symptom of the Party's incapacity
to arouse mass interest in its political maneuvers. He said
that if the Communists had been able to arouse wide popular.
support, there undoubtedly would have been serious disturb-
ances fomented by hardened militants, but, lacking mass
support and faced with the powerful police force, the Party
leadership probably realized the futility of expending their
cadres at the present juncture. The official reiterated his
opinion that unless the Red Army invades Italy, the Communists
will continue to be unable to create serious large-scale strikes
and disorders; the Italian workers are showing increasingly
that they will not undergo sacrifices and suffering for Political
causes even though they may sympathize with these causes.
The Embassy reports it is in agreement with the Italian offi-
cial's view and finds it hard to believe that the Kremlin has
not ordered the Communists in Italy to create serious disorders
whenever and wherever they find it expedient.
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FAR EAST
3. INDOCHINA: Evidence concerning Chinese intervention--
US Minister Heath in Saigon reports there are no indications
of increased strength of Chinese Communist forces in the
provinces adjacent to the Indochinese border, but the heavy
recruiting in this area may indicate, in addition to the need
for replacements in Korea and an increase of anti-Commu-
nist guerrilla activity, a build-up for the invasion of Indo-
china. Heath notes an increase during the month of Decem-
ber in Chinese Communist propaganda claiming French
border violations by both land and air and the killing of
Chinese civilians. Heath adds that Chinese and Viet Minh
representatives, at a meeting in Nanning at the end of
December, reportedly discussed aid to the Viet Minh, inter-
vention in Indochina, and organization of commands along
the Indochinese border.
ET
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GENERAL
25 JAN 1951
1503'
1. NATO deputies favor further aid to Yugoslavia--According
to VS Embassy London, the discussion concerning Yugoslavia
at he 22January meeting of the NATO deputies disclosed
tnat most of the deputies are concerned over the need for
caution and discretion in extending aid Yugoslavia, fearing
"disastrous result" if the Yugoslav Government is pressed
"too hard and rapidly" to orient towards the West. The
deputies definitely favored the continuance of economic aid
to Yugoslavia. The British representative stated his belief
that military rather than economic questions were now coming
.to the fore; he said that the USSR had built up the Satellites
combined troop strength to the point where they were now
"More than -a match" for Yugoslavia. The British deputy
therefore feels it is important to begin clearing the way now
for a time when Yugoslavia may make a formal request for
military assistance.
EUROPE
3/
2, ALBANIA: Increased number of Soviet personnel observed-- e-flilS
US Embassy Belgrade transmits a report from the French
Minis* at Tirana concerning the movements of Soviet
personnel in Albania. According to the French representa-
tive, during the past few weeks he has for the first time seen
Soviet armored and aviation officers in Tirana wearing the
insignia of their arta. He has also noted that Soviet technical
advisers have been brought into the Foreign Ministry, and
other government offices in greater numbers and has observed
for several weeks a sharp increase in the number of Soviet
civilians, as well as military personnel, who stay a short time
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at the Hotel Dajti and then leave for the provinces. The
French Minister ventures the opinion that Albanian au-
thorities may have in mind the use of force against
"aerial violations" which have been noted lately in greater
number.
3. FRANCE: "Truce" on electoral reform. in Pleven's absence--
Premier Pleven has told US Ambassador Bruce that he con-
siders electoral reform the most important problem, besides
rearmament, that the French nation must deal with an- d that
his government is determined to push satisfactory legislation
through the Chamber no matter what the political consequences
may be. Concerning press reports that the electoral reform�
issue might be used in an attempt to overthrow the government
during Pleven's absence in the US, the Premier said that he
had discussed this with the leading members of all the parties
except the Communists and they have agreed that "peace and
� quiet" would reign during his absence. A Committee of
Ministers with representation from each party in the govern-
ment has been appointed to make a further study of the question
� while Pleven is away.
4. GERMANY: Reaction to Eisenhower visit--US High Commis-
sion Bonn reports that German reaction to General Eisenhower's
visit has been almost universally favorable. The Commission
expresses the view that although immediate positive results
on the question of German defense contributions cannot be ex-
pected, the visit has created a more favorable atmosphere for
further consideration of the problem. According to the Com-
mission, Eisenhower's statements have provided a stimulant
for. early decision and have done much not only to overcome the
general apathy of the Germans but also to weaken the public
support Socialist leader Schumacher has been able to evoke for
his relatively negative attitude on Germany's role in Western
defense.
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00ENFinnir
EUROPE
1. USSR: - Propaganda hits at US "aggressive" intentions--
US Embassy Moscow believes that the major sppech at
the Lenin anniversary exercises on 21 January probably
marks the inauguration of a new propaganda campaign on
the theme that the US aims to destroy the Soviet structure
and national independence. The Embassy points out that
whereas the addresses on such occasions usually give a
rounded presentation of Soviet ideology, the speech by
Communist Party official Pospelov was completely devoted
to the US and contained over 40 references to "American
imperialism." The Embassy considers it noteworthy that
in its portrayal of the American society the speech made a
shift away from the likelihood of economic crisis in the US
and dwelt instead on the "barbarous repression by Ameri-
can imperialism" of the forces of peace and democracy.
There was also a parallel shift from the "inevitability' of
capitalism's downfall through economic collapse to its
defeat through war. The Embassy comments, in noting
Pospelov's assurance concerning the ability of the USSR to
emerge from a major conflict stronger than before, that
the Soviet audience could hardly draw assurance from the
speech that the Soviet Union's cause would be victorious
without war or that the Soviet people would escape involve-
ment.
'24 JAN 1961
2. YUGOSLAVIA: Foreign Minister's views on Korean problem--
In a lengthy discussion with US Ambassador Allen on Yugoslat
policy regarding Korea, collective security, and the UN in
general, Yugoslav Foreign Minister Kardelj expressed the
view that it Would be tactically unwise to declare Communist
China guilty Of aggression. Stressing the importance of Europe,
;�,11
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Kardelj expressed the opinion that UN forces in Korea should
remain strictly on the defensive and seek to withdraw "care-
fully and tactically." Kardelj thinks collective security must
have a moral basis if it is to succeed and that this basis must
be the "defense of national independence." He believes that
collective security would fail if invoked to defend colonialism
and asserted that Yugoslavia would not join in a collective
effort to maintain France's position in Indochina or the
British position in Malaya. Kardelj declared categorically,
however, that Yugoslavia would support collective security�
anywhere in the world where aggression against national in-
dependence was involved, citing Finland, Burma, Thailand, and
Indonesia as examples. He said that Yugoslavia would devote
its fullest resources in manpower and material to assist the
UN in resisting such aggression, regardless of whether Yugo-
slavia itself were attacked. Allen reports that the conversation
was interrupted-by another appointment and comments that
when the discussion is resumed, Kardelj will probably come �
to the point with a request for military assistance on the
grounds of- Yugoslavia's willingness to fight in case of aggression.
NEAR EAST-AFRICA
3. IRAN: Analysis of current political situation--US Ambassador
Grady in Tehran reports that the political situation at the
moment in Iran is characterized by: (a) the weakness of the
Razmara Government vis-a-vis the Majlis and entrenched
interests, in addition to the general lack of popular faith in
the government; '(6) the critical financial situation; (c) con-
fusion and frustration resulting from the unsettled oil question;
and (d) a gradual but steady swing toward a neutral position in
the East-West struggle reflecting in part the course of events
in Asia. Grady states that it seems apparent that the Shah,
2
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undoubtedly recalling the manner of the establishment of
his own dynasty, will never support a strong Prime Minister; -
Grady concludes that the disintegration of the Razmara Govern-
ment may be expected to continue and that within a few months
Razmara will probably be replaced by an old-guard Cabiet.,
The Ambassador believes that although the situation is neither
"cheerful nor encouraging," the following steps are necessary
to strengthen Iran as a barrier against Soviet aggression:
(a) a high-level agreement with the British, without delay,
on parallel policies in Iran; (b) continued efforts through close
personal relations with the Shah and the Prime Minister to
bolster their morale and guide their footsteps along the road
of progressive development; (c) encouragement of the earliest
possible solution to the oil question; and (d) the extension of
immediate economic and military aid to Iran on simple terms.
3
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GENERAL
1. British concern over arms aid to Yugoslavia--According
to US Embassy London, the British Ambassador in Belgrade
is "increasingly concerned": that Western defense material
ordered by Yugoslaviaivi11 probably not begin to arrive until
summer and that this delay may significantly affect Yugoslav
morale and ability to resist. Although British military
authorities consider an attack on Yugoslavia unlikely before
September 1951, that is, until the Satellites complete their
1951 recruitment and training program, the British Foreign
Office is inclined to believe that Western arms deliveries
to Yugoslavia should be assigned a higher priority. The
Foreign Office also anticipates that Yugoslavia will make a
request for arms on a government level instead of seeking
them solely through commercial channels.
23 JAN1951
2. Australian views on New Guinea issue--The Department of
State has transmitted to US Embassy Djakarta a summary
of a personal message to the Secretary of State from Australian
Prime Minister Menzies expressing Australian concern over
the possible transfer of sovereignty over Netherlands New.
Guinea to Indonesia. Menzies considers that the Indonesians
have no real connection with the inhabitants of New Guinea,
either in race or culture, and that therefore Indonesian
sovereignty over New Guinea would be no more than a con-
version from one form of colonialism to another. Menzies
says that, on the other hand, New Guinea is vital to Australia,
and he suggests that a joint-trusteeship,in which the Netherlands
and/or Australia is represented, would perhaps prove to be a
solution in the long run. Menzies expressed the hope that the
US could meanwhile delay any decision "which might have the
1
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effect of getting rid of the Dutch" and giving Australia
"an uncomfortable neighbor in the near north." Menzies
added that whoever controlled Netherlands New Guinea
could, at will, infiltrate Australian New Guinea.
3. Nehru makes poor impression in French visit--US Am-
bassador Bruce in Paris reports that Indian Prime Minister
Nehru made a most unfavorable impression upon anti-Com-
munists, both French and foreign, during his recent Paris
visit. Nehru singled out well-known Communists or fellow-
travelers for private interviews and was publicly and bitterly
critical of French policy in Indochina.
EUROPE
515.
4. FRANCE: Electoral reform issue--US Embassy Paris anti-
cipates that on Premier Pleven's return from his projected e_ vff
visit to Washington, he will be plagued by the problem of an
electoral reform law which, in the Embassy's view, is the
principal issue dividing the parties of the coalition govern-
ment. The Embassy warns that the attention being given the
issue should not be construed as a sign of French political
irresponsibility. The Embassy points out that whereas all non-
Communist parties agree on the need for electoral reform
in order to reduce Communist strength in the Assembly,
disagreement arises from the realization that the orientation
of the French Government during the next five years will be
fixed in broad outline by the nature of the new electoral law,
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rather than by the elections themselves. The Embassy
adds that all the non-Communist parties are holding
out for an electoral law which will give them the greatest
advantage. According to the Embassy, the controversy
must be settled at the government level and probably in
the last resort by Pleven. himself.
FAR EAST
5. Change in Indian Ambassador's view of Chinese Communists-- 14-/ 3
US Embassy London reports that according to
the British Foreign Office, Indian
Ambassador Panikkar in Peiping is no longer optimistic
about future Chinese developments and his reports no longer
"put the best nossible piss ' on Chinese Communist be-
havior. Panikkar has reluctantly
reached the conclusion that the Chinese Communists are
"drunk with success" and are becoming quite impossible
to deal with.. Panikknr is reportedly unhappy over the
prospect of future relations between China and the rest of
the world, and especially between China and India. The
British Foreign Office hazards the guess that on Nehru's
return there may be a showdown in the Indian Government
over the question of relations with the Chinese Communist
regime.
Pak* E T
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GENERAL
1, Reported Chinese views on Korean cease-fire�According
to US Embassy London, British diplomatic representative
Hutchison in Peiping has informed his government that
when handed the text of the Chinese Communist reply to
� the latest UN cease-fire proposal, he was "given time for
an extended but fruitless discussion" of the Chinese note
with the Chinese deputy Foreign Minister. Hutchison also
reported that Foreign Minister Chou En-lai, in a separate
interview with Indian Ambassador Panilkar, indicated that�
the Chinese reply was not meant to close the door on negotia-
tions, Both Hutchison and Panikkar "came away with the
impression" that the Chinese Communists are still pre-
pared to consider possibilities of a settlement on the basis
of the UN proposal, with appropriate modifications. The
US Embassy offers the opinion that the Chinese Communists,
during these interviews, were attempting to aggravate the
rift in the UN over the Korean issue and provide India (and to
a lesser extent the UK) with further excuse for forestalling or
at least delaying positive UN action.
FAR EAST
2. INDOCHINA: De Lattre's views on military situation-- In a
discussion of the recent Viet Minh attack with US Minister
Heath, General de Lattre stated that he is now certain of
being able to withstand Viet Minh attacks but that he must
receive necessary reinforcements from France promptly.
De Lattre insists, however, that having seen the fanatic
fighting spirit and the excellent tactical direction of the Viet
Minh troops, he will need at least a division and a half, instead
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of the few battalions he previously thought would be sufficient.
De Lattre declared he would resign his command if the French
Government does not furnish these troops. De Lattre said he
had no plans for a counteroffensive at this time. De Lattre
also said he did not want to do anything that would give the
Chinese Communists a pretext for intervening and for this
�
reason he was against the use of US training units. However,
the moment a Chinese battalion is identified as being on Viet-
namese soil, he will ask for US instructors.
3. THAILAND: Concern over Chinese intentions--US Ambassador e
Stanton reports that when the Thai Foreign Minister ihfOrmed
him of Thailand's intention to support the US resolution naming
the Chinese Communists as aggressors in Korea, the Foreign
Minister appeared "visibly nervous" over Communist China's
rejection of the 'UN cease-fire proposal and seemed to fear that
this rejection signified Communist intentions to force a world
war. The Foreign Minister was even more upset over the
fact that Thailand, in giving its firm support to the US, was
acting entirely independently of other Asian nations and had
"pretty much isolated itself from these nations in matters of
foreign policy."
6
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GENERAL
1. British to advance Iran ten million pounds--US Embassy
�London has been informed by the Foreign Office that the
Anglo-Iranian Oil Company (AIC), after Consultation
with the Foreign Office and the Treasury, has decided to
grant an urgent Iranian Government request for a royalty
advance of ten million pounds to avert a threatened closing
of the Iranian central bank. The British suspect, however,
that further requests will become necessary after a short
time, even though the contemplated advance will exhaust
accumulated royalties to date. In this connection, the
Foreign Office spokesman said that although he still sup-
ported Premier Razmara,he felt that the time had come
for a "straight talk" with Razmara on his intentions regard-
ing the pending AIOC concession agreement.
E.UROPE
2. ITALY: Communist anti-Eisenhower demonstration fails--
According to US Embassy Rome, the Communist demonstra-
tion on the occasion of General Eisenhower's visit was the
"worst Communist failure" in recent years. The Embassy
attritnites this Communist defeat to the combined opposition
of the government, the free labor movement and public
opinion. The Embassy notes, however, that although Com-
munist peace manifestations are not attracting the masses,
the Communists persist in believing that their brand of
pacifism has wide popular appeal. The Embassy concludes
that the Italian Communist Party continues to act primarily
as a party devoted to promoting military defeatism by propa-
ganda rather than as a party of action attempting to create
serious civil disturbances.
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FAR EAST
3. INDOCHINA: Report on military situation--According
to a US official recently returned from the front, the French
have definitely repulsed the recent Viet Minh attack, although
the Viet Minh are still maintaining pressure throughout the
area while regrouping. The US Military Attache in Hanoi
considers the situation secure for the moment. He points
out that the Viet Minh attacking force of 10,000 suffered
casualties of approximately 3500-4000. (French casualties
approximated 400 killed and 1200-1500 wounded,) The
French believe the Viet Minh will require 10-20 days for
regrouping before launching another attack in force.
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fl 48123 rE Mawr E T
GENERAL
1. Austrian views on Soviet policy--US Minister Donnelly
in Vienna transmits the view of Foreign Minister Gruber
that March through July will be the critical period in
Europe, with Yugoslavia as the possible Soviet target.
Gruber also feels that if hostilities do not break out by
July and if the US and the NATO countries accelerate their
defense plans, the West may not only prevent war but
weaken the Soviet position within the USSR and the Satel-
lites. Regarding Korea, Gruber remarked that US prestige
would not suffer from a forced evacuation but that it would
be impaired if the US yielded to Soviet and Chinese Com-
munist political pressure tO leave Korea..
I .9 JAN 1951
1498
EUROPE
2. GERMANY: Present status of German unity efforts--In an CIP/S
analysis of Chancellor Adenauer's reply to the Grotewohl
proposal for -East-West German talks on German unity,
the US High Commission in Frankfort notes that the reply,
though not completely satisfactory, marks an advance in
that it was agreed to by all Bundestag factions except the
Communists and aligns the West German Government be-
hind the Allied policy on German unity. In pointing out that
Adenauer's reply is being interpreted as tantamount to re-
jection of talks "which might advance the German cause,"
the High Commission stresses that the Grotewohl letter and
attendant Communist propaganda has made a definite impact
on West Germans and has demonstrated again that with respect
to German unity "blood is thicker than ideology." The High
Commission adds that popular response to the Grotewohl
e..
1
IDEARAti E T
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proposals is further indication of the recent trend toward
neutralism in West Germany and warns that the USSR will
probably make every effort to exploit West German dis-
satisfaction with the Adenauer reply. In the Commission's
view, the USSR attaches great importance to early all-German
talks in order. 'te) strengthen its hand at a forthcoming Council
of Foreign Ministers meeting.
3. ALBANIA: Anxiety spreading throughout country�US Em-
bassy Belgrade reports that the French Legation in Tirana
regards recent Albanian complaints of border violations and
espionage against Greece, Italy, and Yugoslavia as an effort
to lay the foundation for a possible appeal for outside assistance
and to rally the Albanian public to its leaders. The French be-
lieve that these Albanian actions may explain the increase in
the number of Soviet "specialists" in Albania but doubts that
the Albanian Government will be successful in overcoming the
opposition of the majority of the Albanian people who "delight
in the government's inability to prevent frontier violations."
FAR EAST
4. INDOCHINA: Estimate of military position�A French official
in Hanoi has told US Consul Blancke that he believes the battle
(now underway between the Viet Minh and the French will be
decisive "for months to come," barring full Chinese Communist
intervention. The Viet Minh, following the Chinese Communist
precedent, are not concerned with occupying territory but are
now set to meet and destroy the main French forces. The
French official stated that General de Lattre has "accepted
� the challenge" and that "all chips are down," each side hoping
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to annihilate the other. The official said further that the
Viet Minh have fairly strong uncommitted reserves 20 miles
north of the battle lines, but he believes these are insufficient
to take Hanoi if the French win the present battle. Blancke
adds, "we are optimistic" but the next four days should tell.
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GENERAL
1. No progress made in London meetings on Kashmir --A British
official has informed US Embassy London that no progress
was made toward solution of the Kashmir problem during
the recent London Conference attended by Prime Ministers
Attlee, Nehru, Liaquat, and other leaders of Commonwealth
countries. The official made it clear that in his judgment
the failure was primarily the result of Nehrtes intransigence
although he balanced this to some extent by pointing out
that public agitation in Pakistan and the resulting uncertainty
concerning Liaquat's attendance had created an unfavorable
atmosphere for the conversations. Indicating that the bulk
of these talks had centered around demilitarization, with
some attention being given to a possible plebiscite, the
British official said that action by the Security Council is
clearly the next step toward solution of the Kashmir problem.
Meanwhile, Prime Minister Menzies of Australia
has expressed to US Ambassador Gifford his "very grave
concern" over the failure to reach agreement, placing the
blame squarely on Nehru. According to Gifford, Menzies
was "most apprehensive" that continuance of the impasse
will lead to a resumption of communal strife and perhaps
to war between Indian and Pakistan.
EUROPE
2. THE NETHERLANDS: Attitude toward European defense--
In a discussion with a US official regarding the Dutch attitude
toward European defense problems, a Dutch representative
on the NATO Council remarked on the "public and official
complacency" which is to be found in the Netherlands. He
felt there had been too great a desire on the part of the Dutch
1
VONFIUMfiAt E T
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to relax and to hide behind their View both that France and
Belgium would not really fulfill their defense commitments
and that the US exaggerated what it was doing. The Dutch
official expressed the view, however, that Dutch groups
working to develop a sense of urgency in the government
had been making some progress.
3. YUGOSLAVIA: Closer ties with European Socialists sought--
US Ambassador Allen in Belgrade views the forthcoming visit
to London of a Yugoslav parliamentary delegation as a step
in Yugoslav efforts both to establish closer liaison with Western
European Socialist parties, especially the British Labor Party,
and to make the Yugoslav Parliament a functioning institution, .
Allen points out that the Yugoslays took the initiative in arrang-
ing this visit and that during the last six months the Yugoslav
Communist Party has been shifting more and more of its appeal
to Social-Democrats rather than to splinter Communist groups.
He expresses the opinion that the Yugoslav Government is
seeking, through the formation of close ties with Social-Demo-
cratic -parties, to create -a stable foundation on which to base
continuing friendship with Western states in the event that
Yugoslavia's strategic value to the West should decline. Allen
notes, however, that although the Yugoslav Government seems
anxious to develop closer ties with Socialist parties for co-
operation on international problems, Socialist ideas regarding
internal management are still not acceptable to the Yugoslays.
2
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� GENERAL
1 7 JAN 1959
149E
1. British Chiefs of Staff views on Chinese vulnerability--
US Embassy London transmits the conclusions reached
In a 14 January, study by the British Chiefs of Staff on the
vulnerability of Cbina to attack. The following conclusions
were reached,: (a) the Chinese ability to sustain, even
with Soviet help, 1.arge.-scale and prolonged campaigns
would be reduced by heavy air attacks on industrial and
transportation centers; (b) similar, but more delayed re-
sults, could be obtained by attacks on transportation
systems, oil installations, and power stations; (c) block-
ade would reilder these above actions more effective;
(d) even intensive. and prolonged air attacks, plus a block-
ade, could not in themselves bring about China's defeat;
and (e) Chinese land forces could contain any bridgehead
which might be established on the mainland, and any attempt
to penetrate inland would be an extremely hazardous operation
and would not yield decisive military result.
1 EUROPE
2. GERMANY: Need for "positive" Western statement felt--
The US High Commission in Frankfort has beeli
advised _
that it is urgently necessary to issue "some posi-
tive statement" outlining a new relationship between West
Germany and the occupying powers.
Adenauer believes that the only basis for progress in negotia-
tions is a public statement that Germany will be given its
sovereignty at an unspecified future date, that administration
by the High Commission will be liquidated as soon as possible,
and that negotiations looking toward a security treaty will be
Sir
5/7-s
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undertaken at once, the drift to-
ward neutralism is becoming more pronounced and
Adenauer's position more insecure, and that unless such
a statement of principles is issued, the situation will
continue to deteriorate. The High Commission comments
that other sources confirm the estimate of a more pro-
nounced drift toward neutralism. The High Commission
does not believe, however, that the Socialists, despite gains
in recent Laender elections in the US Zone, are likely, with-
in the next few months, to dominate the Bundesrat to such
an ,extent as to make the Adenauer regime unworkable.
FAR EAST
;Flan E T
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4. INDOCHINA: No overt Chinese action expected soon�US 5/c4,4
Minister Heath in Saigon reports that General de Lattre
is "absolutely convinced" there will be no overt Chinese
C
Communist participation in Viet Minh action during the
next few weeks. De Lattre is confident that he can suc- (4.
cessfully withstand the Viet Milth attacks which are very
likely to occur in this period. However, US Consul Blancke
in Hanoi has since been told by an officer temporarily attached I
to the High Commission that de Lattre is "gravely worried"
about the current Viet Minh offensive and that three more
battalions are coming from Saigon to assist French operations.
-Blancke comments that this information is unconfirmed else-
where although he has learned other forces were called in.
Concerning Chinese Communist activity, Blancke has been
Informed that the French have verified reports indicating
that the Communists are putting effort and expense "far beyond
the demands of normal commerce" into the Chengtu-Tali Road
which connects with the Burma Road, thereby suggesting that
Burma may be slated for possible early penetration.
3
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EUROPE
16 J4N /95i
1. Estimated Soviet position regarding Germany--In an estimate
of the position the USSR may adopt on Germany at a Conference
of Foreign Ministers meeting, US Embassy Moscow expresses
the view that the USSR, in order to achieve its primary objective
of slowing down or even suspending the rearmament of Western
Europe, may make greater concessions than would be apparent
from the Prague declaration. The Embassy also believes the
Kremlin intends to make the fullest use of another CFM meeting
for propaganda purposes and will therefore present its case
in a way which will make Western rejection "unpalatable and
possibly unpopular." The Embassy believes it possible that the
USSR may overestimate Western desire for an agreement on
Germany and may be willing to agree to German unification
on the basis of: (a) the establishment of a German Constituent
Assembly drawn from present East and West German parlia-
ments; (b) creation by that Assembly of an all-German govern-
ment in which the Communists would be represented; (c) nego-
tiation of a peace treaty with the new German government; and
(d) early withdrawal of occupation troops. The Embassy points
' out that such an offer would appear to represent Soviet con-
cetsions but would in fact not run counter to basic Soviet aims.
Withdrawal of occupation troops would be more disadvantageous
to the West than to the USSR; moreover, the German Communists
would find themselves one of the strongest political parties and
in a position to take advantage of factional differences between
the democratic parties. The Kremlin may estimate that under
such conditions it could prolong the neutralization of Germany
for an indefinite period and work towards the transformation of
Germany into another Satellite.
1
ANFIDENTIACE
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FAR EAST
2. Soviet-Chinese relationship regarding Korea--In an analysis 5/5
of Soviet and Chinese Communist motives in accepting the
grave risks of war implicit in the decision to expel all UN
forces from Korea, US Embassy Moscow expresses the
view that following the Inchon landing,the USSR was faced
with its first loss of territory since the Tito defection, a
loss which was particularly unpalatable to the Kremlin be-
cause it stood to lose much prestige in the Communist world
generally and in Asia particularly. The Embassy considers
it reasonable to assume that Communist China, before engaging
in combat with US forces in Korea, was able to obtain definite
and substantial commitments from the USSR. The Embassy
�believes the. USSR may have agreed to furnish Communist
China with military supplies to replace losses suffered in
the Korean campaign, provide large scale air support in the
event of UN attacks on China,and place Korea primarily under
Chinese rather than Soviet control.
3. Reported Chinese Communist view on cease-fire--US Ambas-
sador Henderson in New Delhi has learned of a discussion of
the UN cease-fire proposal between Indian Ambassador
Paimikar in Peiping and Chinese Foreign Minister Chou En-
lai, during which Chou, though "Somewhat noncommittal,"
suggested that the proposal would be more palatable to
Peiping if it provided for a cease-fire and conversations to
take place simultaneously. Chou said he would discuss the
matter with his government.
Meanwhile, French delegate Chauvel has told a member
of the US delegation at the UN that he feels the Chinese Com-
munists will not flatly reject the new cease-fire proposal but
will state conditions which might lead the West into negotiations
while hostilities were continuing.
2
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T 0 -041BENibtilt
GENERAL
, 1 5 JAN 1951
1. Possible Soviet concessions on Germany discounted-.-The
US High Commission in Berlin regards 'with suspicion"
the view that the USSR, in order to prevent the rearmament
of Western Germany, is seriously, considering substantial
concessions at a Conference of Foreign Ministers meeting. ,
The Commission points out tha.t.sstruly representative elections
in East Germany and the disbanding of East German para-
military forces would destroy the Soviet zone Communist
regime and undermine Soviet prestige in the Satellites. The
Commission does not believe the USSR considers its position
so weak as to justify such a retreat. The Commission also
expresses the view that the recently intensified communiza-
tion and militarization of East Germany is "out of harmony"
with rumors that the USSR intends to allow Germany to be
unified and neutralized.
2. Nehru's views on Asian security--According to US Embassy
London, the question of South and Southeast Asian security
arrangements was not discussed at the recent conference of
Commonwealth Prime Ministers except in connection with
the Japanese peace treaty. Indian Prime Minister Nehru ex-
pressed the view that rearmament of Japan would be "useless"
because such a step would focus Soviet suspicion on Japan and
military bases in Japan would be primary targets for Soviet
air attacks. Nehru pointed out, by way of example, that: Burma
was much better off in its present relatively disarmed status
than it would be if any group of neighboring powers attempted
to guarantee Burmese security. The Embassy comments that
Nehru's remarks have strengthened the view of the British
Foreign Office that there would be little point in encouraging
an Asian regional defense arrangement without the sympathetic
participation of India.
Document No. 0/1.
1
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3. French views on Schuman Plan talks--According to US
Embassy Paris, the French Government is now determined
to conclude the Schuman Plan conference at the session be
15 January. The Foreign Office has informed the
other participating governments that it would be a "blow
to the hopes of the free world" in the Schuman Plan if the
conference adjourned again without initialing a treaty and
that the French expect to "push through to a finish" at
the 15 January session.
NEAR EAST-AFRICA
4. IRAN: Probable rejection of US bank loan�Prime Minister
Razmara has told US Ambassador Grady that it is now im-
possible to submit the proposed Export-Import Bank loan
agreement to the Majlis. Razmara urges that the matter of
securing an Export-Import Bank loan be dropped rather than
subject his government and the US to the humiliation of having
the agreement rejected by the Mains. Razmara recommends
that a loan be made, as he had originally recommended, direct
to the Seven Year Plan Organization, as this would not require
approval by the Majlis. Grady points out that the difficulty
regarding the Export-Import loan lies in the interminable delays
which have occurred; he reiterates that the situation in Iran
is serious and recommends that the contemplated grant-in-aid
to Iran be re-examined.
2
T ONIFIVEMPALE T
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48118 T'IaVPNFAIENTRI TT
GENERAL
1. UN sentiment regarding action against China--The US dele-
gation at the UN, in an assessment of reaction in the UN to
the US proposal for condemning the Chinese Communists as
aggressors in Korea, reports that the US proposal has already
been approved in principle by most Latin American nations
and by several other states. The delegation adds that the
Commonwealth,countries, most of the Asian-Arab group,
and several Western European nations remain unconvinced
of the usefulness or desirability of condemning aggression
or imposing sanctions against China on the grounds either
that UN members lack the means to follOw through effec-
tively or that the proposed measures will not hurt the war-
making ability of the Chinese Communists nor deflect their
aggressive intentions. 'Many delegatesleel that condemnatory
action would provoke the Chinese Communists to new aggres-
sive moves, or at least cement their dependence on Moscow.
The delegation notes, however, that US acquiescence in the
intermediate step of adopting the cease-fire group's supple-
mental report should help win support for the condemnatory
resolution.
1
T ',commit T
1493
511
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3. BURMA: Pro-US sentiment increasing--US Embassy Rangoon fit?
estimates that anti-Communist sentiment in Burma is stronger
than ever before, despite discouragement over UN military
reverses in Korea and Commonwealth talks of appeasement
and compromise. According to the Embassy, the "softening"
British stand in the Far East has led the Burmese to look to�
the US as their only source of assistance to meet aggression.
The Embassy citbs as the most important factors preventing
all-out Burmese cooperation with the West: (a) internal military
weakness; (b) fear that the US is not yet prepared for all-out
war; and (c) a desire to prevent Burma's becoming a second
Korea.
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EUROPE �
i2 JAN 1951
1492
UNITED KINGDOM: British thinking on German problem--
According to US Embassy London, several
members of both the Labor ana uonservauve
parties have recently expressed their belief that the USSR is
gravely concerned over German rearmament and would "un-
doubtedly be willing" to make substantial concessions to block
or postpone the rearmament of Germany. These members
therefore consider that the West would be in a strong bar-
gaining position at a Council of Foreign Ministers. meeting.
FAR EAST
3.3(h)(2)
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EUROPE
1 JAN 1951
1491 '
IFI
1
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Auth: ,INA REG. 77/1763
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ONFIDEARA E T
2, POLAND: Aggressive emphasis on "strategic" value of coal--
US Embassy Warsaw indicates that since the intensification of
Western European defense preparations, Poland appears to
have become more aggressive in demanding "war potential"
material from the West in return for coal. As evidence the
Embassy cites the recent Polish trade negotiations and
agreements with the Scandinavian countries as well as the
strong pressure being brought on the Netherlands through
the cessation of Polish coal deliveries. One Polish negotiator
reportedly commented, "Coal is our strategic commodity
and we want strategic commodities in return." The Embassy
adds that Poland has raised coal prices to the level of US-
delivered coal prices.
FAR EAST
3. CHINA: Estimate of Communist intentions --US Embassy The
Hague has learned that the Dutch Charge in Peiping recently
reported to his government that the Chinese Communists
were so carried away with Chinese "volunteer" successes
in Korea that they would accept no concessions other than
complete capitulation to their demands. The Dutch Charge
also said the Chinese Communists are now in so exalted
a. state of mind that they think almost anything is possible
for 'them to achieve.
4. INDOCHINA: De Lattre's measures ludged effective�US
Legation Saigon considers that French. High Commissioner
de Lattre's "strenuous efforts to take hold of the situation,"
which at first appeared swashbuckling and unrealistic, have
definitely had a salutory effect on the morale of all troops
in Indochina. De Lattre himself declares that he is no longer
concerned over the renewal of the Viet Minh offensive and
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does not expect the French to lose an inch of ground. He has
Informed the Legation that he is postponing his projected trip
to Paris until after the middle of February, in order to be
on hand during the period of possible Viet Minh attacks, and
that in view of the necessity of rapidly building up the metro-
politan army, he has decided not to ask for heavy reinforcements �
from France. De Lattre and Bao Dai's military advisers.
maintain that they do not expect a "Chinese invasion,''
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.1 0 JAN 1951
- 1490
GENERAL
1. Current Arab attitude toward supporting US in UN--The S/S
Syrian delegate to the UN, in conversation with the US 5/5
delegation, has declared that if the US would give arms
and loans to the Arab states,the US would find them much
more ready to support the US proposal to condemn Chinese
Communist aggression., The Syrian delegate attributed
Arab hesitancy_to support the US iri the UN to the US -
policy of supporting and strengthening Israel against the
Arabs and to Arab weakness in the face of possible Soviet ,
aggression. The Syrian emphasized that the Arab states
are in an exposed position; they lack arms and are re-
luctant to rely heavily on the US because most available
US.forces are tied down in Korea. The Egyptian delegate,
in a separate conversation with the US delegation, elaborated
on Arab fear of Soviet aggression, declaring that the Arab
states will insist on being adequately armed and prepared
before assuming a provocative attitude in the UN that may
lead to war with the Soviet Union. In reply to a question
whether the UN could survive a failure to charge the Chinese
Communists with aggression, the Egyptian delegate observed
that "some countries" might quite possibly place their national
interests above the existence even of the UN.
2. Indian and British views on Chinese action in Tibet�Indian
Foreign Secretary Menon has informed US Ambassador
Henderson that the Indian Government has "definitely de-
cided" to take no UN action concerning Tibet which might
result in lessening Indian influence with Communist China.
Menon said that Tibet is lost anyway and it would be "sense-
less" for India to disturb its relations with Communist China
1
1/DrivriAl
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by raising this relatively "insignificant" matter in the UN.
According to Menon's latest information from the Indian
representative in Lhasa (dated 24 December), the spirit
of resistance in the city seems dead following the departure
of the Dalai Lama and the inhabitants are hopelessly -awaiting
the arrival of the Chinese Communists. Menon added that
for this reason India has suspended further arms shipments
tn TibPt
3. British report concerning Netherlands New Guinea impasse-- //9 A
According to information available to the British Foreign
Office, the Indonesian Government is under strong political
pressure, as a result of the impasse over the transfer of
sovereignty over Netherlands New Guinea, to denounce the
Netherlands-Indonesian union immediately. The Indonesians
are insisting that the Dutch must take the initiative if they wish
to keep the union alive; Indonesia cannot do so because Nether-
lands New Guinea rightfully belongs to Indonesia and any con-
cession by Indonesia- would be interpreted by the Dutch as a
sign of weakness. The British are worried over the consequences
in Malaya if a Dutch-Indonesian rift develops and Indonesia be-
comes hostile to the West. The British point out that the Dutch-
Indonesian impasse has already provided grist for Soviet pro-
paganda and has given new impetus to the activity of the Chinese
Communist Ambassador in Djakarta.
2
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NEAR EAST-AFRICA
4. IRAN: Serious concern felt over delay in US bank loan--
US Ambassador Grady reports that Prime Minister Razmara
is seriously considering withdrawing Iran's application for an
Export-Import Bank loan because of his "extreme exaspera-
tion" over the excessively detailed commitments reqUired
of Iran by the Bank. Grady urges that immediate action be
taken to make the loan available on the simplest possible
basis. Grady emphasizes that Iran is in a serious crisis
and adds, "we are in danger of a tragic failure here."
5
FAR EAST
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EUROPE
I. GERMANY: Schumacher's views on relations with East--
German Socialist leader Schumacher has expressed to the
US High Commission in Bonn his great satisfaction with the
unanimous decision of the Foreign Affairs Committee of the
Bundestag to recommend that Chancellor Adenauer reply
indirectly to the Grotewohl invitation to discuss formation
of an all-German constituent council by simply reiterating
in a public declaration the well-known position of the Federal
Republic concerning Gerthan unification. Schumacher de-
clared it was� completely senseless even to consider any
indirect or direct negotiations with the East German Govern-
ment as long as the 'real bosses of the Soviet Zone sit in
the Kremlin and are not ready to permit German unity based
on democratic principles." Schumacher is similarly pessi-
mistic of the results of a CFM meeting. Although he believes
the Allies must undertake such a conference, in order to
counteract Soviet propaganda and to learn more about Soviet
aims and intentions, Schumacher characterized the Soviet
proposals for the CFM as nothing but an attempt to use all
available propaganda means to increase Western confusion
and insecurity.
NEAR EAST-AFRICA
2. ISRAEL: Reported trend toward alignment with West--
In a preliminary appraisal of Israel's offer to produce arms
for Western defense, US Embassy Tel Aviv attributes the
offer mainly to the conviction of top Israeli leaders and the
informed public that Israel cannot hope to emerge from a�
third world war as an independent national state unless
T 0 IONMINCIAtt
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9 JAN 10'7'
.1489
001
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firmly allied as an active participant with the Western
Powers. The Embassy estimates that public opinion is
now awakened to the danger that by remaining neutral
during a war Israel may find itself cut off from the West,
upon which it is dependent. The Embassy believes that
the bulk of the population is now probably ready to
support a complete break with neutrality, if such a break
is linked to a political and military alliance with the West,
and that the government will have little difficulty con-
trolling opposition to open alignment with the West,by ex-
treme leftist elements. The Embassy offers a "safe guess"
that outright rejection of Israel's offer by both the US and
UK would weaken the position of Western spokesmen in
Israel and ecourage those who advocate salvation through
"increasingly uneasy" neutrality.
FAR EAST
3. KOREA: Civil leadership deteriorating--US Ambassador
Mucci� in Pusan, in reporting a progressive weakening
of South Korean morale and spirit, both civilian and
military, expresses great concern over the decline in
civil leadership. Mucci� states that President Rhee is
becoming less effective, and he considers the prospect
for other official leadership not promising as a result
of: (a) the removal by the Communists of large numbers
of potential leaders; (b) the disintegration of Korean national
life during the war: and (c) the absence of hundreds of Koreans
earlier sent to the US for specialized training.,
2
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Mit T
GENERAL
1. UN deliberations on Chinese aggression-7-The US delegation
at the UN reports that most UN delegations.are still in favor
of giving Peiping a further chance at a peaceful settlement
in Korea. There is increasing sentiment in favor of offering
a new cease-fire proposal before proceeding with a resolution
condemning the Chinese Communists for aggression and
calling for collective measures by the UN.. According to the
UN delegation, most of the Latin American delegations are
more willing than others to proceed with stronger action now,
while- some British Commonwealth and Western European
delegations and'a few of the Arab group are moving towards
a*illingness- tO. condemn Communist China if it again rejects
a Cease-fire proposal.
EUROPE
2. TRIESTE: Views on Italo-Yugoslav agreement--U$ Political
Adviser Unger in Trieste, in discussing the possibility of an
italo-Yugoslav agreement on the disposition of the Territory,
expresses the view that military factors are still the key to
any solution of the problem. According to Unger ,the basic
decision to be made is whether continued US:-UK control of
-
Trieste and the presence of Allied troops there outweigh the
desirability of regularizing Italo-Yugoslav relations, removing
�a potential sore point, and relieving the US and UK of commit-
ments there. Unger has the-impression that neither Italy nor
Yugoslavia wishes to alter the status quo, since both find the
presence of Allied troops in Trieste advantageous, particularly
in the face of the threat of war.
1
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oob
8 JAN in71
1488
sJs
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TO THE DECLASSIFICATION op
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FAR EAST
3. INDOCHINA: Bao Dai seen lacking determination--US Minis-
ter Heath in Saigon reports he was "more than usually"
disappointed by his last conversation with Vietnam Emperor
Bao Dai, although BaO Dai expressed intelligent understanding
concerning the measures needed to strengthen his government,
�he gave no evidence of urgent determination and leadership
to .accomplish them. Heath acknowledges that Bao Dal is
undoubtedly working on the formation of his army and con-
sulting with a great many people, but he states that Sao Dal �
has no definite plan fOr coping with the deteriorating situation..
Heath also noted that Bao Dal's interest and feeling for the
settled parts of Vietnam is "quite distinct" from his attitude
toward his own &Own territories, in particular those in the
southern high plateau. Heath brought away from his interview
the "distinct impression" that Bao Dai is 'toying" with the
idea, in case the Viet Minh (with or without Chinese Communist
support) takes over the arable regions of Vietnam, of continuing
resistance in the southern plateau with tribesmen and his
special mountain division.
2
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GENERAL
6 JAN 1951
1487
1. Vulnerability of Near East to Soviet aggression--US Em-
bassy Moscow, in considering the possibility Of including
Israel in Western plans for Near Eastern defense, points
to the danger that with major attention focused on the Far
East and Europe, the USSR may be planning to disturb the
"relatively quiet and neglected Near Eastern garden this
year." The Embassy believes that such a Soviet move
might range from stepping up internal subversive programs
and creating mass unrest to armed revolts supported by -
Kurdish and Azerbaijan "volunteers" from the Soviet Union.
It is considered further possible that, if the USSR is deter-
mined to precipitate World War III this year, major military
moves elsewhere in the world might be accompanied by out-
right invasion of certain Near Eastern areas, primarily with
the aim of denying to the West the strategic and petroleum
assets of the region. The Embassy points out in this con-
nection that it is questionable whether the USSR would under-
take a large-scale war of sustained duration without attempting
to gain access to Near Eastern oil. The Embassy believes that
in any case, regardless of the intentions of the USSR, the pre-
sent obviously weak and defenseless condition of the Near
Eastern countries constitutes an open invitation to the Kremlin
to indulge in direct or indirect aggression in that area.
Concerning possible Western defense plans, the Em-
bassy suggests that the recent show of Soviet friendliness
toward Near Eastern countries may well be the prelude to
surprise expansionist moves in the area and that therefore
the time has come to establish a working relationship between
NATO and the non-Communist Near Eastern countries. The
Embassy considers that the Israeli bid for US military support
provides some leverage for bringing about some degree of
rapprochement between Israel and the Arab States, a develop-
ment which would permit positive steps toward a Near Eastern
regional collective security arrangement
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2.
3. Dutch Socialists favor sovereignty transfer of New Guinea--
According to US Embassy The Hague, Socialist Party leader
Van der Goes declared at a recent press conference that his
party favors the transfer of sovereignty over Netherlands New
Guinea to the Republic of Indonesia, with the provisions that:
(a) Netherlands trusteeship is maintained for 30 years; and
(b) proper financial arrangements are made between the Nether-
lands and Indonesia and law and order is guaranteed in New
Guinea. Van der Goes said the Socialist Party would urge the
resumption of negotiations with Indonesia along these lines and
that the main thing was that a solution should be found because
cooperation with Indonesia was more important than ultimate
Netherlands sovereignty over New Guinea. The Embassy has
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learned that although Van der Goes' statement was not cleared
with the party executive board, it probably represents the
view of the majority of Socialist Party deputies in the Second
Chamber and the party executive will probably adopt this state-
ment as the official Party view with few, if any, alterations.
Meanwhile, US Ambassador Cochran in Djakarta in-
dicates that the Indonesian Government will make known its
official position on the Netherlands New Guinea problem on
8 January. Indonesian officials expressed the hope to Cochran
that the Dutch will react promptly to the Indonesian statement
in order to prevent any trend toward protest meetings against
the Netherlands, sabotage, and similar disorders.
EUROPE
4. YUGOSLAVIA: Renewed Trieste negotiations held desirable--
US Embassy Belgrade expresses its belief that the US, UK, and
French governments should let the Italian and Yugoslav govern-
ments know in the near future that the Western countries would
welcome a mutually acceptable solution to the Trieste problem.
The Embassy believes it dubious whether Italy and Yugoslavia
could reach an early agreement on their own and therefore
recommends that the three Western governments make a joint
approach, stressing the desirability of an early settlement, and
them be prepared to enter into the territorial aspects of the
problem if Italy and Yugoslavia reach an impasse.
NEAR EAST-AFRICA
5. IRAN: British officially backing Razniara�US Embassy London
reports the view of the British Foreign Office that Iranian Prime
Minister Razmara should not be replaced and that Foreign
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Secretary Bevin would not permit any effort to dismiss him.
A Foreign Office source also told the Embassy that although.
the Anglo-lranian Oil Company has been disappointed by�
Razmara's failure to obtain parliamentary ratification of
a revised contract with the company and has expressed doubt
of Razmara's reliability, it would be going "much too far"
to attribute to the company a desire to bring about his
downfall. The Anglo -Iranian Oil Company has reportedly been
given a "forcible" statement of the Foreign Office position
regarding Razmara.
FAR EAST
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EUROPE
3.3(h)(2)
Reported Communist intimidation program--US High
Commissioner McCloy transmits a report
of a conference, held in East Germany and attended
by members of West German Communist-controlled organi-
zations, to outline a program to exploit the Grotewohl proposal
for the reunification of Germany. it was
decided at the meeting that if Adenauer refuses Grotewohl's
offer, the program to be launched will include: (a) proclamation
of a national emergency for all of Germany, in an effort to pro-
�
vide the necessary authority to shift from words to "open action";
(b) development among the West Germans of a pyschology of
general resistance against their government; and (c) trials by
Peoples Courts of those Germans "in favor of war," presumably
as indicated by refusal to subscribe to the Stockholm Peace .
Appeal, in accordance with the "law for the protection of peace,"
recently promulgated by the East German Government to intimi-
date West Germans against rearming. McCloy comments that a
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considerable degree of credence is given to this report
because� it appears to be a logical extension of the current
Communist policy of alternating intimidation and moral
bribery.
'NEAR EAST-AFRICA
2. IRAN: Important political changes expected--US Embassy
Tehran transmits conflicting information concerning the
present confused political situation in Iran. The British
Ambassador has told the Embassy "he has come to believe"
that the Shah, on the recommendation of Prime Minister
Razmara, will shortly dissolve the Parliament and call
for new elections.
he Embassy concludes, on the basis of these reports
and numerous demands for changes in the government, that in any
Case, the position of Razmara is most certainly not improving
and that significant political dei,elopments may be in the offing.
THE AMERICAS
3. BRAZIL: Lively interest felt in strategic materials�US Em-
bassy Rio de Janeiro expresses its belief that the administration
of President-elect Vargas will exhibit "lively interest"' in the
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US stockpiling and strategic material program. The Embassy
reports that Brazil is vitally interested in certain materials -
and that it will establish a definite strategic materials program
of its own, which will doubtless be used as a bargaining point
if the-US presses for an assurance of continued and expanded
shipments of such materials. The Embassy indicates that Brazil's
concern over possible future difficulties in the acquisition of
essential materials from the US has been conspicuous in both
editorial and official comment.
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Adenauer's views on Soviet policy--Chancellor Adenauer
has expressed to US High Commissioner McCloy his con-
cern that Soviet acceptance of a CFM might mean postpone-
ment of any decisions regarding the future of Germany and
its Contribution to Western defense. Adenauer doubts that
the USSR, either in a forthcoming CFM meeting or in East-
West German talks, would ever agree to Western terms for
free elections and free movement of political parties; he
believes the USSR would attempt to preserve the present
governmental structures in East and West Germany, placing
both under an all-German governing council. Adenauer stated
that any such political structure would of course be unaccept-
able to West Germany, because it would imply equality between
East and West Germany and lead to renewed Communist pres-
sure from inside. He said the USSR would probably also insist
upon complete demilitarization of Germany and propose the
withdrawal of all occupying forces.
4 JAN 1951
2. Analysis of French opinion on Europe's defense�US Em-
bassy Paris finds "encouraging" the trend of French
opinion on Western defense despite the persistence of
many major elements of weakness and the vulnerability
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of the French people to Communist propaganda. The Embassy
believes that the French are increasingly convinced of the
determination of the US, UK, and other NATO members to
join in creating effective defensive strength on the continent.
The Embassy also notes a growing belief that use by the
Soviet Union of its military superiority may be prevented
"by other than purely atoinie factor The Embassy finds
heartening the limited possibilities of direct action on the
part of the French Communists when compared with their
capabilities two or three years ago. Nevertheless, the Em-
bassy warns of the continued existence of apathy and defeatism
in influential circles and calls attention to the susceptibility
of the French to various plausible sounding proposals for de-
laying a major crisis with the Soviet Union.
3. Belgian attitude toward NATO--US Embassy Brussels con-
cludes an analysis of Belgian willingness and capacity to
contribute to Western European defense with the estimate
that, on the whole, Belgium will probably meet its commit-
ments to NATO in 1951. The Embassy is inclined to believe
that despite the "undeniable" weakness of the present govern-
ment, the Parliament after considerable wrangling will re-
luctantly vote the necessary defense budget and an extension
of military service. On the negative side the Embassrcites,
besides the weakness of the government, lack of confidence be-
Cause of the country's eiPosed. military position, precautionary
measures of the Wealthy to. "cut and run" in case of invasion, and
the feeling-of the nian-in the sfreet,born of Centuries of experience
with invaders and of ignorance of Soviet methods, that he can
.outlast and outwit even Russians. The Embassy notes, however,
that these negative factors have produced a profound awareness
that Belgian independence can be maintained only by effective
union with other countries and by an actual state of collective
SedUEity. Consequently, the Belgians give Western Europe an
even chance of surviving if it pools its Military resources with
those of the US to create a balance of power which will insure
peace.
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4. Prospects for Italo-Yugoslav agreement on Trieste--
US Embassy Rome expresses the view that the prospect
at present of arriving at a solution of the problem of
Trieste acceptable to both Italy and Yugoslavia is not
sufficient to justify urging the Italian and Yugoslav
governments to initiate secret negotiations on Trieste.
The Embassy believes that neither government, under
present national and international circumstances, would
be prepared to agree voluntarily to a settlement based
on ethnic considerations. The Embassy concludes that
an unsuccessful attempt to reach a settlement might very
well embitter Italian-Yugoslav relations to a degree that
would cancel out the good progress thus far made in
rapprochement.
FAR EAST
5. British views on Asian security--A Foreign Office official
has informed US Embassy London that the UK has "no in-
tention" of broaching the question of Southeast Asian security
at the forthcoming meeting of Commonwealth Prime Ministers,
although it will discuss the question if it is raised by another
Commonwealth member. The British official felt that any
attempt to bring about a community of political interest in
Southeast Asia would have to begin with steps toward economic
stability rather than military security, and it was for this reason
that the UK had placed so much stress and hope on the Colombo
Plan. This plan was serving the "incalculable service of
bringing Commonwealth nations together and forging a common
economic bond," which, if developed along anticipated lines,
would logically lead to a common military defense program.
The official reiterated his hope that the US would participate
in the Colombo Plan in some practical form.
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GENERAL
1. British views concerning a possible CFM meeting�US Em-
bassy London, in an analysis of the probable British position
at the proposed Council of Foreign Ministers meeting, ex-
presses the view that the British will tend to concentrate
on ways and means of checkmating Soviet propaganda moves
rather than on positive proposals for the settlement of the
German problem. The Embassy believes that the UK will
remain flexible, during preparatory tripartite talks, with a
view to ensuring a common front on the part of the three
� Western Powers. According to the Embassy, British thinking
about Germany has undergone a material change; instead of
believing that British interests would best be served by the
creation of a relatively weak, demilitarized Germany, the UK
now desires the formation of a strong anti-Communist German
state that would serve to bulwark Western defense. Although
recognizing that it would be impossible to reject an apparently
sincere Soviet offer to meet Western conditions for the reuni-
fication of Germany, the British believe the West should not
agree to suspend German rearmament while reunification was
being carried out and should oppose the demilitarization of
Germany. The Embassy notes that the Foreign Office is
keenly aware of the "divisive aspirations" of the USSR and is
fully appreciative of the opportunities that a four-power con-
ference would offer for the use of Soviet divisive tactics. The
Foreign Office is particularly concerned about the French
tendency to "rise to Soviet bait."
2. Comment on Soviet reply to Western Powers--US Embassy
Paris, in commenting on the Soviet reply to the counter-
proposal of the three Western Powers for a four-power
conference; takes the view that the essential point is the
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Soviet refusal to consider widening the agenda, as the West�
proposed, in order to take in other issues besides Germany.
The Embassy observes that although the Soviet note obviously
`Seeks to exploit any differences that exist between the US,
French, and British positions, particularly in regard to
general policy on German rearmament, such differences
ought to be considered secondary to the main consideration:
namely, the Soviet refusal to initiate exploratory conversa-
tions concerning the establishment of a mutually acceptable
basis for a conference.
3. Reaction of UN delegations to Chinese fighting--The US dele-
gation to the UN reports that renewed evidences of Chinese
Communist hostilities have stiffened the determination and
will to resist of the Latin American delegations and, to a
lesser degree, the Western European delegations. The US
delegation adds that the British and French are still concerned
at the prospect of large-scale war in Asia and are thus still
anxious to attempt negotiations, which they distinguish sharply
from appeasement. The Asian and Arab states share this
concern, fearing that a UN finding of Chinese Communist
aggression, may precipitate not only a large-scale Asian
war but perhaps general war.
FAR EAST
4. INDOCHINA: Summary analysis of situation�In a year-end
analysis of the situation in Indochina, US Legation Saigon
expresses the view that the battle for Indochina and possibly
for all of Southeast Asia is being fought in Tonkin at this
moment. The Legation believes that the entire north, except
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the shrinking HanoiAlalphong beachhead, must be written
off for the time being and considers it possible that Hanoi
itself will be lost or abandoned without mass intervention
by the Chinese Communists. The Legation adds, however,
that the "assumption is now unavoidable that sooner Or
later, and probably soon," the Chinese Communists will
invade Indochina with organized units. The Legation notes
that although there has been a marked improvement in re-
lations between the French and the Vietnamese, the Bao
Dai Government has thus far failed to display any real
dynamism and has not yet won the confidence of the public.
The Legation also notes that Indochina is further weakened
by the lack of unity among Indochina's neighbors, as well as
by divergencies in the Far Eastern policies of the major powers.
Regarding the economic situation, the Legation concludes that
it is "no worse" than it has been for the past 18 months.
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GENERAL*
1. Analysis of Soviet note on CFM--In the view of US Embassy
Moscow, the Soviet reply to the Western proposals regarding
a Council of Foreign Ministers meeting is obviously designed
to leave the general impression that the USSR is willing to
engage in exploratory talks leading to an attual CFM. The
note contains no indication of any change in the Soviet posi-
tion that the quettion of demilitarization of Germany is the
most important for CFM discussion and that the USSR con-
siders the Prague declaration a proper basis for the dis�
cussion of German problems in general. According to the
Embassy, the note implies that problems having world-wide
and perhaps particularly Asiatic significance can only be
appropriately considered if the fifth world power, China, is
included in the CFM. The Embassy sees a further indication
of Soviet willingness to broaden the field of discussion, perhaps
to include the Austrian question and others of European signi-
ficance, in the statement that remilitarization of Western
Germany creates serious difficulties for those questions the
CFM should consider. The Embassy interprets this statement
to mean that the USSR may demand the discontinuance of Ger-
man remilitarization as the price for settlement of these
questions. The Embassy concludes that the wording of the
note seems deliberately ambiguous and calculated less toward
immediate propaganda gain than toward maintaining flexibility
for propaganda successes during the course of the talks them- �
selves.
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2. Soviet propaganda on German question--The US High Corn- CPO
mission in Berlin reports that the Soviet-controlled press
is continuing intensive propaganda to increase pressure for
East-West German talks, with the immediate purpose of
T
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influencing the course of an eventual four-power conference.
The maximum Soviet aim, according to the High Commission,
is apparently to have the East and West Germans reach an
understanding acceptable to the Communists prior to a
four power conference, and the minimum aim is to build�
up an "unhappy public .opinion" in.Germany so as to limit
the Western Powers' freedom of negotiation at the conference.
3. Indonesians reported. ready to dissolve Dutch Union--US Am-
bassador Cochran ih Djakarta reports that as -a result Of the
failure to reach agreement with the Dutch on the transfer olf
sovereignty over Netherlands New Guinea, the Indonesian
Cabinet has "practically decided" to denounce the Netherlands-
Indonesian union and is only awaiting the return of the Indonesian
delegate from The Hague before formalizing its decision.
EUROPE
4. YUGOSLAVIA: Tito expresses foreign policy views �According
to US Ambassador Allen, Marshal Tito recently told the British
Military Attache, in a discussion of Yugoslavia's military re-
quirements,that his object Is to keep Yugoslavia 'neutral at least
until the outbreak of the third World War. Declaring that in
order to remain neutral' he must act' neutrally,. Tito said he
would give no provocation to Moscow and could not ask for
arms from the West even if he wanted to. Tito is satisfied
that his standing army is well-equipped, or would be "in the
nearest future," and implied that Yugoslavia could fight alone
except if .invaded by the USSR. Tito said that in that event he
would need help from the West.
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