CENTRAL INTELLIGENCE AGENCY SAMPLE ISSUE OF CIA WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67-00059A000400110020-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 42
• Document Creation Date: December 9, 2016
• Document Release Date: August 29, 2000
• Sequence Number: 20
• Content Type: REPORT

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3.4una IS 1
Cam. ALT' RIB
Tow.. die 1.egvo of v A* u Veoki7 Rovtwa k boon preparatt
f ou aatori. contatanii In the OR D. icl n wookliaa s
Its ffv2l t t has uot, ho verr, been wort `uatad 4th
the Divisions. It 3e in ovary s go a iople IeOUGfl
and d neemi t .on to limitad to the
bons, '"'muff Staff and to the ORE Divigiaw
tk sae .ver",
UOM /4
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i1 C~G3U Pe
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V4W NOW
I T X R R A T 1 O 1 A L O R G A
a ? ? . . . 1 6S 3
GA retains critical attitude toward USSR . ? . . . . . . . tE 1
Soviet promauda technique timed a *3nst USSR . . . . . . 1
12*0 in Brief
Damaso. ens 4 . . . ? s ? ? ? o a ? ? ? ? ? ? ? O ? ? . ' 2
Outlook in the Greek sass . . e ? ? ? . . . 2
tC i lineup . . o . a ? e ? o a . ? ? ? ? w o . ? ? ? t . 0 2
Arab labor divided on cooperation with Israeli anions . . . 2
Z AND M,, y tests 9
Costello Government faces difficult t. . . . . . ? . . 7
DYMUM
Parliamentary crisis temporarily averted . . . . . . . . . 8
5 EQROPZ . ? .. . . ? . ... . . . . ? ? . ..w 3.5
YR&M
Do Gau1le8 a Rally of the French People loam ground . . . . 12
]dew Dollar Zxport Board to promote exports to dollar area fl z 12
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V3STER ;u.Ro? (continued)
YURNCH AND SPANISH NOM AE WEST AFRICA
Communists, propose joint nationalist-Comm rdst activity . 13
HLGIti
"Popular consultations bill on return of Leopold . . . ? . .
Postponement of *ify nng non- emntmist labor forces likely . 14
X A i E $ A.. V A 0 ? a . . ? . . . . a . . . . ? a . . . . . i6 - 24
SOVIET UNION
USSR negotiates to forestall Iranian retaliatory acts . . . 16
2 October set for first postwar international pew demonstra,-
tione: 16
Ireeslin to get larger share from Swedish production . . . . 17
TJSSR dumping below marked-priced goods on West Germans . . . is
YUGOSLAVIA
Tito's position strengthened by Security Council seat . . . 18
G7. C LOV. LA
Czechoslovak-Tugoslar trade continues . . . . . . . a . a e a 19
HSNGFART
Difficulties foreseen in Rungary's, ambitious five-year plan 20
Industry shows increasing s1&= of deterioration . . . a a . 21
Widespread repercussions of #k trial a a a e a a a ? ?. a 22
BULGARIA
Iostovu a trial to bit Satellite economic nationalism ? a . 23
911A2 A - A P A . . . . a .. . e . ? a ? . a . 73-30
4E.Ci~.47ILU
Opposition to Syrian-Iraqi 'union ? . . . a e a ? a 25
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A (cont nad)
! AA A I T - i ?r A R I Cr.?
wr+ err. .r
M=CR
Papagos and the premiership . . . . . . . . . .
. . . . . .
JORDAN
Abdullah and Arab Palestine . . . . . . . . . .
. . . . .
26
A?WL ISTAN
Difficult relations with Pakistan .
a . . . .
27
law in RUAL
A ab -I.raeli peaft talks i nder conaider ation . O i ? 0 6 . o 28
Proposed Saudi Arabian loan to Syria . . . ? a . . 28
Israel alleges mistreatment Iraqi. Jens . ? 29
Uajlis elections marked by disorders . 9
. ? . a . e 0 29
First shipaent Soviet Wheat in Iran ? O a 29
UN subcoamt ttee plan foryLibya .. . ? . . o e o o . . e . . ? a 30
Premier-designate of Oyrenalea missing . . . . . . ? a a a . D 30
Trade difficulties in Moxambique . . . ? . . s ? a , ? 30
A A A . . a a . a . a ? . ? . . a s . a ? a . , a a . . . 31-36
CHINA
United front on recognition may, not hold.. a . . . . . a . a a31
Ssechwan appears next an Communist list a .. . . . ? . . . . . 32
INDOCHIIIA
Review of the military situation . . a ? a a a ? . a 33
INDOKSIA
Cease-fire violations threaten Bound Table Conference . . . . 34
PhILIPPIUS
Violence expected in presidential campaign . 4 O a a R. a. 5
E"eted in Brief
News notes on China . . . . . . . . o ... 0 a 0 o r a . . . 36
Australia upholds conviction of Communist Laurence Shaarlaw . 36
SECRET
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ZME
LAT 1, H RICA.,.......... .. .......37-38
CMONBU
Liberal Party will attempt control of Workers' Confederation . Xi"
ARG IRL
Concern for atabi,ltt. iseds to undemocratio practices . . . .
PARAGUAY
Unrest centers around Arm Chief of Staff Dias de Yivar . . .
38
AA 111 9. R-i A T sa _ . . . . . . . . . . . . . . . . ? .39 - 40
iebrandtssn ship movements in Shanghai port . . . . . . . . 39
Egyptian restrictions on petroleum movements to Haifa refiner 39
Yugoslavia new customer for western aviation industries . . . 40
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G'A re a3, ,t, crime ; ? $ ltd H ~~r d U6,
Sae ation whether Soviet possession of the atom bomb would
?for existing political alignments eesms to have been resolved. in
x, a negative by recent roll calls in the GA, Concrete tcsts o-: W:
we action. were recently provided by the bitter struggle between
13lavia and Czechoslovakia for the Easter Batropeen SC seat mad by
;aptly disputed iecu s of observa=a of human rite in the Satellitso
ad continuation of the controversial 'esn Covwi5sion. In P-11
three, the USSR suffered resounding defeats; in. the bm. sn righta os o ,,
the majority vote was greater -han last aria So far, the USSR 'Am-'curd the going rou ser in this GA thaa in a y previous sesrai.on.r alt er
acquisition of the A-bomb, nor Vishine' ~qa now-faund eordielit7 S c t.3 ~U
esV asr
have made friends or influenced people at Lake Success, On the
;nd, when the GA considers the problem of the A-bomb itself i1 :c
martain that the fact alone that a waond major power has acq L:.r. d.
this wenon will exert new pre re a for a solution,
The Soviet device of is srn~itioaal conferences
exun ing boards for propagencia. bras bee:;a turned a mast the Sl' r 27
neatly by Yugoslavia, in a vay prowinp, she USSR a good teacher and
Y'agosl,avi.a an apt pupil. The forum wa,3 the GA Legal Committ , ratoh
,wvyA before it the propose-1 Declaration of the Rieat?? and Trade : of
Mates, Tngaelavta promptly offered 25 ame meats. ?ncludin ; a.uo'me
-Ter pointed proposals on the d ity of a state to respect the =bt1
. other states, not to foment civil war in other nations, rant o
a in slangier cat peigas or economic =atarfare against fellow RE >
etc. "oland, tried to reef a the USSR from embaTx'as uasat by raovini,- JI ^:u
he Declaration be referred to the memo iz:r sates ? a m eu -:r;
would have stalled the Yugoslav motion Indefinitely. The f rwe : _ ~Sr>
:-.'cntative was usable to refrain from ex-pressing the hope that ' r^Y aa~ Y ;a a
- uld in the ture observe the lofty a rinefples for which it .-a2 cont nd-
n ; cmd from regretting that such sentiments had not ocev rreC. .ao ?a to- ,
31ava"A two years ago.
11 w people-snd almost certainly not the l slay repAesentativee?,...
i lieve either that the arcapoeod amendments improve the draft declarr ion
? r that they have the slightest chance of being; approved, 33S9t the T1, ,o"
Haves are as indifferent to these considerations as the USSR has bse"aa on
similar oceasione in. the past. They will have attained their sole off,:.,,
ective--a world.- ids audience for doxt~ ciati a of their fo er ally.
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NWVF
ALAMPMOMM
The SyriaaY newspaper AL-.NAM reports that US Chief of -Staff
Omar Bradley is in reality an Arab 'arn in Daraaec s v er the no of
01240 BIN RA.SA1 AL -ABRRA. : D 1lawi out the plot of O MS Pinafore. n
(than cocking an additionrd emit at t ficatiori) this este d a ntes
porary relates that the infant MM Vas kidnapped by a grpsy wOmm
(poseib3y namd AL BUTTA P) who sold hiss to sea Avert oaf tourists
then dniting the Middle Wit.
Prospects for settling the Greek cane daring the Arent GA
dimmed with fatlvrc of the neiliation Wks. The uncom- roY1ieing
-=Ya do
Soviet position caring the private disacrateeions offers little hope for
al ntficant cosy ceacsione in publtt: UN debate. Therefore* the only coorae
open to the GA will be to conti UN machinery in Greece and again
call on the parties to settle their dispute by peaceful means. Actual
progress during this session will be limited to facilitating a rappraa e-
ment between the Greeks and. Yugo lava .
Although the l3 'nation Ea anomie Co ission for Asia, and the
Par at acne ated. Vie to in and the Republic of Kore=a as associate gibers
rejected the apvlication of Vietminh and Commmtst North Korea.,
Far 3astern fear of the USSR and apprehension as to the i %t a role of
Cosrmmsat China were evident in the commission vote. In the case of
*Tietn and S`tetstinh, the favorable votes were cast almost exclusively
by Western or 1estersa-aoriented c:o tries-the US, UK. Prance, Netherlands,
Australia. Few Zealand sad China. On the other hand, India fcwored the
as Lesion of both, aihil c the Philippines, Thailand., and Bt a abstained
and P. stan absented Itself. Only the Philippines sad. Thailand voted
with the Western oriented states against aftlation of North Korea.
The pg vtian, Syria?a, and Lebanese organizations hold divergent
views regarding collaboration with the Israeli nation. labor or ixation,
.Ifietadrsxth, in the projected Free Trado anion intern tional, The B ann.
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ie NW
workers, ali.thou,h not opposed to aooperattou on an international level,
have refrained from Public support of Hi tad uth becadse of their
go rnaaent0o opposition to Israel. The Syria mono 0,trong17 opposes
axe collaboration. i Lebanese UniozSo in contrast, are prepared to
!cork a'.omgitie the Iarael.l group it it ci Pfiliates. AAc'n the W and
eliixinates its Communist elements. In of case. IIietadruth is la a
difficult position intern-tionally. lot wishing to otkiaxed the USSR
because of obligations to it, for past aid and because of the Je 48h
ref ass In Eastern: Europe, It will probably try to maintain relations
both with JJ 'U and. the }mac Trade Uaiora I ternationalo
-3
S C=
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w ;w
Costello Government faces 'ficult tests in now Dail session
lthovi there 3s a passibility of its breaking up on gore
cs-
controversial issues psrttcu or1y social zi.1fare, Frio Minister O
tello ~ s flint -party Government" will probably surv3ce the cruc1
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TOLD
Pa rliamentary session co aenoing 26 October. A return of to V leap
would not be as eigz fioant for domestie affairs as for foreign af'fairel,
where Ireland. could then bo a cted to be more isolatio st and nour-
tral ity-mi ed B r, as the five parties and the independent
depaties pporting the Goverment tie brcnght togothor not by c omen
policies and, objeotivee but by common opposition to De Valera, it to
in controversial, domestic; issues that the greatest dangers for the
Oo raameat lies The next ran session win probably be dwInated by
h issues, which 01-0 appropriate for the Opp ition s favorite tactic
of attempting to exploit the divergences that have Inevitably deelops
ii bin the paradozioal coalition of light a d left.
The most dangerous Issue from the Gove tent's point of vi.a
to social welfare. The Labor Party is der!tran{lingo and has been prowls,
a codification and expansion of social t elfare legislation, lx t the
conservative Minister for Yinance is resisting. In a baclgrcnnd of an
a pected rise in the cost of living and renewed. ds ands for wage in-
oreaseso the drive for an expanded social security program has an
especial urgent o A failure to develop sa acceptable program wonid split
the coalition,, and the Goverment cannot such longer postpone making its
proposals, The adds are that it vil.1 somehow r ter.: ^ge to agree of a
gm's acceptable to all of its present supporters.
lPa~lia~?snterr~..,~~~.lr a
The minority Social I rcoratie Goverment averted an Immediate
parliamentary crisis by attaining, after prolonged debates a vote of
ccanfidente. The solution is oral- temporal7o and general elections a
yet be held, for the Govoraeata s cantin-aanoe is office rests solely
on the fact that the majority of the Moderate Liberal Party. the strongasst
opposition party, abstained from voting. The combir d votes of the other
opposition parties (0onservative, Justice, and Commmi.st) were is ficient
to unseat the government.
.though clearly unwilling at this moment to unseat the Govea ?
Ment and thus provoke a general election, the Moderate Libor is cannot
afford to reverse their present position by giving W1 support to the
Government. Their position In delicate since for the time being, at
least, they must centianxes to attack the Governs e t bat hot so strongly
as to precipitate elections. Abstention from the vote of confidence was
a strategic retreat, from a politically untenable position,
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DFMUM
-e Social Ds mocratio t rres met,, a3 tho h it could free an
election with reasonable o? fidenae that it would be retn ed to zfZiae,
does not at present wish to heat` t4 a resp ibilit for preaipitati
aa election koving that it would ,hen be a std to the opposition's
charges that it head refused to wait until, debates on speolAc 1 ;sls -
tip proposals had demo trate . A ether a ba zis for coati e4 cooperation
.etssd.
To dates only the position of the C stn in this agodag
appears to be clarifl*d. Until early 19 the G stsa mppartc the
4ovennant on most danestto issues, sod the Govezzmart an
G=zaaiist votes, as well as on those of the 0.ioa1 Moral Parts, to
srssmrs its &igsdag majoritya MorV in: 1949. hoverer the Cc niste
voted against a {icvermzent fins a meaoure nth ssinoo that time there
h -em been some epecidation as to their future o se of action. Their
vote against the Goy ar ot. in this instance seems to indicate that in
the future the Comma tets will obgtx'ugt rather than a pport the Soaiel
Democratic Goverment.
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SECRET
FACE
General da Gaulle e s inability to capitalize on the recent
Government crisis makes o1' ax' that his influence Von the political
situation has declined in 1949 and is riot likely to regain critical
importance unless the Catsts should again threaten eooneaic pro-
gress or political stability. His Rally of the French People (RPF)
probably reached perms of strength in the municipal elections of
Ccto ier 1947 and the Council of the Republic (Senate) elections of
november 1948. In the local cantonal elections of Aram 1949,p however,
after the Co list-Inspired strikes of both 1947 a 1948 had been
broken, the B1??s share of the popular vote dropped to about 25%, from
a mo m of about 39% in the municipal elections of 1947, This October
when the Communist strike plans failed to develop and the middle-of-the-
road Third Force coalltion which De Gaulle challenges rebated its weakest
point, the Rk'F was unable to increase its popular appeal.
Your special municipal elections held in Fr?cute on 16 October,
furthermore, resulted in losses for Ginllists as well a Co amts,
while the :Socialsts and 1ioderate Right gained, `a"wo of these elections
were hold in the PG s s'nbtarbs of Pantin and Scea , one at Rol acat
one in the small town of Saint-Chi, ' Socia1isi6, Radical Social.. cots
(Fioderatee), and Independents gained fron one to four c uncillers in all
four munieipalitiees, while the RPY lost more seats than the Co lens
~lta~5 0
Formation of a Dollar Export Board, soon to- be anhouneed in
France, is an effort to take advantage of the promotional slunittebs
afforded by devaluatioaa, and hence Wmntually to contribute to a reduo-
tion of 1'rance?s critical, dollar trade deficit. Although the trade
deficit with the dollar area as a whole increased only 11% over 19W
in the first seven months of 1949 (from $3909 to 49.5 ll1oa), the
meager exports to the US-.the greatest potential dollar market-di
d
over 15% in the sate period ($5.2 to 4,4 million),
Geor,ve Villiers, head of the Assocdatjo of French loyere
(MWF), who will be President of the new Soard, has outlined a plan
for promoting exports to the dollar area. A small group of top US
buyers revresenting Important mare handiainp int ?ree: tg would meet with
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p::esentativ^es of appropriate a facts rtsxg tnt,sreets In 1 ra . ML4
U*`a'~'J group could he in a position to specify items which might "Be Pur-
charsd in lard lots, and the Fr3uch would indicate present avlabilities
?
sad pxobsble prices, The French could then got together under Villiers
ga rie to and ar3'an prochetion specialization necessary for the desired
volume. Villiers hopes that those 'rench prices which may be ft d too
hi can be reduced by large-scale production and in eased efficieneyo
VilliersO plan, however, is at best a long-range one and will further-
more be hampered during; the coming twelve months by the prospective
s>: cline of French investment in ceps tal goods and the slowing of
production galas, pa i ? as a result of' the substantial out in la CA aids
T- CH n M SPA,NISI I 'ORTI V &D VEST AYRICA
A novel fawns of Commu lst operation in lynch overseas terri-
tories is now in evidence 0 Pras sbl In order to hasten raapprocbe-
?! nt between the intractable iaational1sts and the local Cosuiet
Parties, several Co unist members of the .Assembly of the French W .ion
have just a into action in North end West Africa, They are props
gating the thesis that, jointly, nationalists and Co sunisto can
better combat the approaching flaenaoe of US economic penetration
(which invariably leads to political haf,,emony) of French overseas terri-
tories by means of the Uinsidious& Point Four Program, Benefiting by
parlimentary inengtity end travelling at government exp2nee, these
envoys of subversion enjoy considerable prestige and freedom of more-
mex.t4 Their position will add weight :.o their disruptive views,
effectively convincing ccrt2im nationa ilet elements, iuf'tsing now
life into the more listless mncmb=rs of local Co=-.1st Parties, and
distorting:; the motives of the Point Four Prop, ar;,,
The rather s table Catholic - Libe ral coalition in Belfim
probably .rill not fall in the near future despite differences over
social and economic policies and the royal question. The reconvened
.a .r .i: sc=nt gear a vote e f crurnfidance to the Governmen-409 financial
plolicye indicatt g; that the C.:atholics probably will wept Liberal
SNORMT
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+ conosnic plane in exob=ge for Liberal support of a "poptth r aonsv1taa
Lion" on King Leopold.. The Catholic members of the senate, supported.
lay most of the Liberal Senators, passed a bill -Providing for a "Popular
consultation," althou& a few Liberal members joined with the Socialist
and Co gist members to dissent, Passim of the bill by the Chamber
of Deputies is also likely, although opposition by Liberal, Socialism
and. Co st Party members will be stronger, Liberal support for
Leopolcias returns after the results of the 'popular consultatUou" are
1 ovn, m not be forthcoming, however, unless he receives at least a
majority vote in Flanders, Wallonia, and Brussels. In a? ny event, con-
tro rsy over the royal question will provoke the most sr'r'oue test to
date of the stability of the Goverment, trill delay decisions on Impor-
tant, economic problems, and my solidify the position of the Socialists
a strong opposition force.
Growing opposition will probably pr*vent unification in
Italy of the non-Communist labor forces this year. coven if the ifi-
cation con,reso sched. led for 8 November is held. This congress is
sponsored by the Christian Democrat-eponsered .'rss Grcneral Confederation
of Yorkers (LCGIL) and the heads of the moderate Socialist-epublican
Italian, 'xederatioa of Labor (FIL). In recent weeks, increasing opposi-
tion to early unification has been shown by the following, gr oups:
(1) certain prominent moderate Socialist political .d labor Ien.ere
and, presmWbly, their followers; (2) the majority of the leaders of
the Republican Party; and (3) various leaders of the independent -.ions
outside the Cam unist ,nominated. General Labor Confederation (CGIL)
The oppositior, of the first two groups 3s based primarily on
,he recognition that a. merger of the LC CL and the FIL, at their
present membership leels (Is0GIL is approximately three times the el we
of the FIL with its W O-500,000 members) would mean, a complete abao Lion
oa the smaller organizetione. The loaders of the independent unions,
whose tote me3aberahip is at least as larGv as that of the VIL, distrust
the political aff illations of the heads of both these organization. The
Independents Insist that their autonomous unions should Initiate and
direct labor unification because ti;ey are not handicapped by politic
ties, and are concerned soley with trade union problems..
- l&
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SFCB T
ITALY
postponement of unification would assure fuller exploitation
of membership poteutitiities by both the LCGIL and the FIL. The latter' s
ippeal to nowt Communist elements who are now or were formerly In the
COIL and to unorganized workers who find either Comm'rmist or Catholie
domination unpalatable would then be inczseasede As a. result, the 'IL
might participate more e%fectivoly at a later date in the formation of
an organization strong enough to break the Conr untat ]hold on the Italian
labor movement. Besides, more time is required to secure the collabora-
tion of the important Independent unions in any new labor organization.
15
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.ASTir;R1I $Jxorj
'USSR op ne negotintione between bocn1 border commanders to korestaa 1.
Iranian L(~ a u_z _ ory' Tics
The Soviet-Iranian disputes over the return of fifteen Iranian
soldiers; arprxantly being held as hostages by the USSR, may be re-
solved by nogotiations reportedly underway between tho Iranian and
Soviet border a;;ommmdeere In the area where the Ir:~nia n " were tae zeds
xFolbowixag Irani= threats to cl se all Soviet establie eats in
Iran, Including the Soviet hospital a nd. VCiiS (Soviet Cultural A9=00.
if the Iranian soldiers wore not returned promptly, the USSR has re-
placed its entire personnel complement aaaal.on the border east of the
Caspian sea. In a conference betti+toen the new Soviet border comnnandor
and the Iranian border commander the Soviet officer reportedly
promised to consider the return of the Ironic i co:Lcliersa The Irani=
overnment, which has eeoepted this latest Soviet move as au indication
t:hat the ' SR intends to return the sold a rss soon, has Not implemented
its threats
The USSR's in . ttdn of negotiatiorss between the local border
cazasaarand er a is probably prompted by a d=.4sire to keep the dispute lotaya.'
;Rased as well as to gain time in its efforts to affect the return of
h 1o Soviet dof ea torso for whom the Iranian soldiers are being held as
hostages. Moreover, ssi%:-~ce the Soviet ageaiccten in Iran are especially
irepsrrtanx -z centers of Soviet espionage and subversion, the USSR
,411 probably ravoirl og vating the current dispute to the point
that the Irani an govermtieut will act to close those entabllahnants
2 October et for firs inter-Antiona : acct-war communist
dcr,~enatra .'tion
salnternational. Per' ce dos ple,ned for 2 Qetobors is the firot
coordinated,, world t idc peace dca onstre.tion staged by the Con munietn
since the en& of the warp Posslbly timed to coincide with the U
Ganeral. Assa> bly aeseion, the occasion will provide the Cos u miens
with a fresh opportunity to point to the USSR a the sole champion
of peace. The underlying purpose of this Soviet pe"ce strategy .is
to strengthen nation?+?. Coltmmist parties by enlisting the support of
as s my non-Communists as possible and to induce the uses to with-
hold support from their governmentso
Propaganda for peace is by no of snags a new Conmuniset tactic, At
the Sixth World ConVaees of the Comrnuni ; Inteernationa. (1928) it w,
-
ssolved that all Communist Parties would engage in apolitical, or
g ..izationa l , a taationml. and propagandistic work in preparation for
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International J-)&7 for the fight against imperia1iet war and defenss
of the Soviets n Since then, yearly mass damonstrations for peace
were organized., beginning 1 Au .st 1929 and continuing until the
outbreak of World liar 11,
While the anticipated propaganda themes have already boon worn
threadb^reo the Communists probably hope, by the resumption of their
pre-year tactic of simultaneous mass demonstrations, to give the
appearance of wider support and more enthusiasm for the Soviet ?peaceO
line than was exhibited at the recent peace cox-gresses in Wroclaw,
Parts, New York anct Mesieo City.
USSR to get a larger share from Swedish proftetion
Under the 1946 1 billion kronor credit agr+aane-t the Soviet
Purchasing Commission in Sw9den has recently placed orders with
the Swedish shipyards for fishing boats and sailing freighters.,
valued at 40 miliioa kronor.
In view of past Soviet rolveta,nee to place orders because of
high Swedish prices, it Is probable that the Soviets had advance
information of the sterling area devaluation plan,, since the orders
were placed at the former Swedish prices, As these co:itr?acts do
no involve current sxr.'har a of goods, the Soviets have taken advattagm
of western currency revision to bbta i.n the contracts at $$' eavinnsv
During 1948 Swedish d.elivcriss wader the credit account were
about 40 million kronor; Earlier in 1949 Swedish officials estitaatet
that, by the end of 1951, the Soviets would have received only about
OO milion kronor worth of Swedish goods. Up to now only 174 million
honor have been utilizod., and total Soviet commitments to date
amount to 360 million kronor e
The Swedish deliveries are 1ik to be murk more extonsive during
the next two ysar e, since some I port-,-nt industries are now recons td.art
certain Soviet contracts which had previously been rejected. While
the USS:.t is utilizing the temporary opportunity of lower exchange value
of the krona, Swidieh industrialists apparentl7 have Increased th4lr
inter is Soviet contracts in order to hedge ega5nst possible con.
traction of Western ma*4ketea f
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SFAM
SOVIET UNION
Sovzoue of Gerrae do ping below-market-priced goods on West Germany
narse4e ; .....
Previous reliable Information indicated that the Soviet Union
and its Satellites were studying the possibilities of dumping `i_cul-
tural and surplus chemical products on markets of Western I ropoa
One of the reasons advanced as posetbie Soviet motive for such a course
of action wast "By underselling Western competitoro the Soviet bites
can obtain dollars for the marohaae of muueh-ased,ed machinery from the
Westo"
According to recent Information, the Soviet Sono is now dumping
large quantities of household goods, obemieelsm paper, textiles and
glass on W,Ft Go=-an markets at prices believed to be below real pro-
d tetion cots in order to obtain West marks for industrial purchases
from We t Germ.
It is not surprising that the Kremlin should resort to such
action as a t vora. y oxpe;disaat- to se m the noes,sery Weatorn c
rencias for the purchases of Western industrial products which are
in short supply in the East, and sporadic activity of this type should
logically be expected in the future,
Ti$m@ss poalti.on would. be strengthened by Security Council seat
At the current 1 general Assembly session Yugoolovie, has
publicly assented its indspenience of Moscow not only be deserting
the Soviet bloc in voting on some east-We A issues, but, even more
si fies qtly, by aseking a seat on the UN Security Council, If
sacoesaful, Yu olav membership on the Security Council would acre ;thou
T- to?s defiance of the USSR because it would: (1) afford Yugoslavia s
trato .c position for direct ng U attention to dangerous Soviet pressure,
thuz providing an additional deterrent:_ngain%t Soviet aggxsssion; (2)
increase the internal and international prestige of the Tito regime, (3)
provide Tito with a more irr xressive rositruri from which to assert the
ideological superiority of Yu Slav Communism to S r;aliniom, thus en-
couraging t ho development of Titotet t .s neio+s in Cost stxaiet parts
througiiout the world and notably is the Far east.
a gS
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? 'GOS!AVIA.
Soviet reaction to the election of Yugoslavia as a Security
Council renl.acement for the Mrsine would be extr timely antagonistic,
not only because of the loss of, a seat traditionally reserved, for a
Soviet bloc member but even more because of the granting of that seat
to the Kremlin's arch-enemy. The USSR would utilize this issue as
proof that Yugoslavia is now operating as a tool of the Western rovers
against the People's Democracies.
Yo roalavia as a member of the Security Council would have eoma
elifficulty in following mn independent line in the' Security Council.
oause Tito id attempting to be the is interpreter of Communism
end has to eompaaete with the USSR in ioup Sort of Communist Interests,,
Yugoslavia could be expeedted to vote often with the USSR against that
Weit. Particularly , Yugoslavia t ould not side with the "capiteliaitO
vest on iesuee involving wegtern colonialism in the Hoar and Par East.
On many East-West issues, however? Yugoslavia would probably abstain
rather t4an ente aiee the Western Powers. But where Soviet and
Yugoslav interests clashed, as in Trieste or possibly Greece, Yugoslavia
would undoubtedly vote against the USSR. In general, Yugoslavia would
probably adopt a policy of supporting the small nations against the
"imperialism" of the great powers, both Fast and West.
CZECIOSI,AVIA
Czech-Yugoslav trade continues
CzechosxavaktaGe trade plane for August and September reportedly
include an exchange of certain essential goods with tugoslavia. In
return for 208,000 tons of pyrites, 5 tons of mercury, 1,000 tons of
hemp, ail, 350 tons of gy,mma, Czechoslovakia is to sup sly Yugoslavia
with 24,,500 tons coke, 100 tons cable, and minor quantities of industrial
equipment believed, designed expressly to meet Yugoel .v specifications.
This proposed interim is email in comparison with the forty aar
volume of trades and may be a temporary expediency for both parttee, The
ea ssation of (tech-lugoslav trade in June 19' has left Czechoslovakia
critically short of pyrites and mercury and Yugoslavia with an in-
adequate euppl,? of coke? Therefore, despite the widening rift b.te een
Tito and, the Kremlin, neither the Czechs nor the Yugoslavs appears
disposed, to let their political differences completely preclude the
meeting of it mediate economic requirements. Moreover, it is possible
that for political reasons as well neither side is yet willing to
sever completely its relations with the other.
-19-
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S
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S~Wr
The current Hn rian Thee Te:,raPlan will be completed, it is
officially claimed, seven months ahead, of echednleq and will be
replao.& by a broad ?iva-lea-r-Plan for 1950.19548
The Three-Toar-plan wee essentially P. reconstructive prop's
and vas to lacy the foundation for industrial expansion. As such,
the plan has reached Its goals. In general, production has atta;ncal
prewar levels.
'Objectives of the Five-Year-Plan aim at a radical tranaformatiou
of the national economy. It Is planned that the value of industrial
production Ill exceed th.t of agriculture. Of the total 35 billion
forints to be invested by tLLe rand of 1.9540 17 billion will- go ror
Industry and 6 billion for a ricullture.
The ?Ivve--Tear-Plan aims predominantly at the development of heavy
industry, with 20 now lants sah.ednled for the Iron and ma nine
dustrl~. By 1954, the iron and machine Industry Its to account for
34 percent of all industrial production, as compyred with 20 percent.
In 1938 and electric energy produntioun for 4.5 aercent. These
-proportions are plausible if tho industrial goals are attained. To
realize this goal a total of 300,000 now industrial workers would be
recruited., most of whom would, initially, be poorly gualifiede
Transportation facilities must be expanded along with Industry.
By the end of 1954. the comnunice,tiofl rystem is to a -cesd the 1918
level by 65 percent. This goaal armsrre possible since much modernization
has slrs? dy taken place in the rail lines Paid in motor transport
However, difficuittea are being experienced in the production of
locomotives, rail cr-re, and riverveesele, but. with expected in
creases in supilies and skilled labor. these may be overcome. The
greatest difficulties will prob:bly be experienced In highw traffic
expansion.
In the agricultural sector, the Five-Tarr-Plan calls for an
increase in livestock production, an Increase in the average yield
of wheat by 20 percent, sugar beets by 30 percent and alfalfa by
&!j ;roxi natel.y 40 percent. The fulfillment of these goals is
dependent upon success of laud reclamation =d irrigation projects,
use of a icult!u el machinery, fertilizers and high euality seed,
SEA >'T
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Difficulties foreseen in ifu ry's ambitious Five-Tear-Plan
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'EA
z. i dnatx7 shows inareasir e l n? of deterioration
fi-w
:,.~ of 1.zx4.,3sxffi$ris 1 ee.:rsnwil.c tTetoaicars.ticasr In ~.nx~ rv zr~ b?":=,in.
. nvren,sin within the M-st fo rTee
The ;arxax eee drx i
k
-ate ;nst and. 5lapter9ber Y,88 etepped up O'SrP:,1gus of oa USIGra a.t4 O ,hi,
ar :::Q,
nt1 r:! 3nc u s trial per ram ei y rox a re to unskil3 ed 1o
'.` 3 l,notal'ices ci red have serious cans-t,tations when rsTie a 1.u oo ?,
nl.t with the e W3. '--o orifying habits of the Ccnrrxxist zr assn ;ar5 ase,g~: _?t
we Included instances of gross inef"flciex g prodir?tion of d,af e cti r.s
, oceda. lower ui1t pxodretion and absente ai anon; orkere,, las taile s
1f such d ficienctes have been cited ar evicetxrria in the Model
.:-:oi'_ hera--S h*ranto factory (which is ofieie11~r piodu.ci t5~ .e:t r a,,
>", boo:, cited L-";s 2nncot fi1,d. 7. factory, an.ot er i oie
:txn??;ar)..*.n. Co , st ontsrprl se m In local spate shee Depaty I ` 1
,titer akosi ha-!t3 sp+.'skrrn. c~.l.0c$eotl4Y (f arch :ti'ai .xzbes~
om Hut ian industry is concent .tee. i thin area) aiso zonj t' r,,3
the rwar failures, In this report, p re .i tiverit7 of thy: ma 1 xf~- c =r?
for the period 1 eby:t r to 'nly 1949 is as" r*:it tern tpo 'tts"sfi-
-Iff . a
~' a ~i- $si in f ~ctc , the perc?4r3 ?,a''a Q ' 7r} ;e4 r s.
j. j> .rat 'h It? ';t' :
.dean etcm 1(% to 2 $ anothor faotoi trsi!. reported to ha r h .d
n.1, 1 ~ n r
hc3sxsttaes .ra canes day, lust=00a of log- 1rhor, morale e are
a z"epoi?~.i thr'i t sick re? ief had been f-I.Wen to workers who weY a,
r-~ ag :srom sG3lf-I 'IfUct d t:oumlk;.>
J (n at they ell,able report; the vic: iootz trend of ter. csr d ~~n 11
an es :, a O.:_e
ee ia~a
b=,c ese official, howover, various anti-Rashimite groups in Pulse,"give
Fill contiimee to agitate against the scheme altboagh their luabill"sy
to work together and their we s.1mees before Jordn& s A ab Legion mad &re
l cal opposition a negligible factor. The other Arab states no
-- 26
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I~WF N"00
JORDAN
25X6
2iW appear reeigzcd to awe tlau.
Jordan. Annexrt1 on under such oircumatez oe s would e e e Abdull l' s
prossti ;sa and Could grsatl increase the ees i of floe Paleeti
Arabs.
iffioult relatiout with Pakist"
The Government of Pakistan le adopting a hard, attitude
?Jeauard . Lfeianietan, having concluded that w7 conciliatory or co-
operative gestures are inoffeative and are viewed as evidence of
weakness by the Aff ane Parkistan's resent eertailment of freight
zvbates on petrels preducte bound for Afghanis3ta ray be only the
riret raaa ifesstation of this attitude, `Ehe GOP appareuty intends
to fulfill strictly all treaty obligations with rc gavd to the
e of geode through Pakistan and, othervi u to ,t.ntain a
severely correct position in its relations with Afghanistan. It
is bolioved, however, that the GOP also intende to re-fuse arq fa raze
1 he Afghan Govamment mq7 now as? of it and to disco tiuue cOr -
,zeesiona not legally regntred as in the case of transportation r-
`iatee a This attitude is reporter base, to the conviction that oll'ly
those can the Afghan Goverment be made to realize the desira'bilri? r
f moderation and collaboration with respect to the tribal die t
Qaad other matters of ditsagre;ament,
P;a ,s 4
Afghanistan's land looked position, its doposadc s9 on
Agb fiili5
or normal trade chanuole, and the currentfannanca crs,
are such that Pakistan may be able to impose economic pressures s;;a:-:
A. sort to force Afghanistan to adopt a Tore conciliatory c,ttitudo?
. aReaseut offer by the Afghan Foreign Minister of ':onditional n t,
`xzs Cis n" of A fg xan ?akiet 3U dissagroemante may be evidence that
ti.ost of Who railway coucoseton rates has already had a ssobs?i
(goou the Afghans. Howevera as the Afghans h e e fall d to define their
as$ani of s s naoudAtio al" and as Vile GOP, tho e willing to n as-31-2 to
on matters pertaining to the economic dov'elopront of the tribal vrroa ant
atters of internal tribal administration, will not negotiate ._a
- aat ~stagtus of they ri:aa:L are, Vneeof'e-rWs/s~say Come to z~ayopt~:a~,2{nomlpaN~l $~.:i x-~
itlorsa, Vane danger exis`is Chat an injansi~YicaeDiot ofd golae pres%'urgv,
if duo in part to actions by Pakistan, may result in further i t u iei
,mince toward Pakistan on the Afghans' part, rith Increased ret?~..l. Lion
by the Pak# ataanls resting in s serious cta r..lm nt of . fgha e~:_ t
ratiets through Pakistani.
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N~O VOW
c3 rn
AYG IS AT
The Indian subcontinent has long been vbAt riht be texm
bo front door to .Af .an .esten, and th i.e Afg'l mMat ' a be4k bas b
to ftmasla. If the Afghans feel that the front door Is closed, th y
mW tum more and more toward the USSR for the ? ake of economic re-
lief, accepting as a calculated risk the possibility af" drastic
political. .evelo meate resulting therefIr t. In the meantime, a
h-no ed lm a from the Export-Import Bank remains aatbaris .r
despite the imp trta s of that loan to Mean US relations,
The feasibili8y of holding direct Amb-loraeli peace t as
thxough the me&i of the 15imed Arm .etioe t isaion is uxsder cesk-
aldexation by Oezerel Bilays who is co waned. over the impexm ~ c?}
of current a sistioe terms he believas that do facto afire o c 'a
a wide range of relatively minor subjects might well lead to p ra&:
mvnt Battlement of the basic issues. Moreover, there are indite?a;,#z1ons
that X~7pt and Jordan my be giving ear to Israel's overtures :ox
direct gotiationo. Isra l. s adamamt stand on such matters as
rofo s e?.Y4.d tc rritoria9 boundaries, howwrera suggests that Jogs , n
and ypt would. gain little from participating In I aeaeli~span~os e
direct negottatiofso
S Judi A-rabias s proposed $6 million lean to S rta, for the
purposo of cementing relations with co the blood brother country,, 4 will
mot be eeacludvA. The Saudi Goverment appa ent believes charit
begins at hor and has dipped Into the allocated :L"s,s s to the extort
om $ million in order to most its orris obligations. By imp ' 2. q
Its immediate i i saciel position to the detrimort of Syriageo S . sdi
Arabia has as maul s:; nt In advance via irpor*trnt source of it ra ?t
The $6 llicw borrowed from the Baan(ms de L 1 , do-Ubine, was
guarautoed by an off-shores oil rental of $2 millien per ,wars hf.a
oe nrce of income will now be lost to Saudi. Arabia nutil the erd of
1951-
n28
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SECRET
NO= IN tea"
Iraqi Jove have been discriminated againet for centuries,
there appes!re to be little evldeenoe to support the Israeli clai
some 2,000 Jeve in Iraq hays recently been a r eet or place
concesntratton compe. ring the Palestine trovblee, the Iraqi
o"rerrent has dealt h rsh.3t with certain Jewieh indivic3uals aacr 4;o4
,) Communist or Zionist activity, but in gesnert:~l it hasesrted it
to prot5ct I qs s Jowl from mob actlo-. isxael? s alle tionse vhic >
,,~, ' ba official submit to to the UN in the near ff ta. e j, are prsbab
which will
come before the TW~ when the onomia Suxvecr Mission submits a pre
inaxr report about 10 Wov -ber.
l ecticxaa for the new ( ) kajlia have been market by
P-o se scattered di oordere and demonstrations S~gajugt a1le g +v
o , ent interfeeree"yoe o A contest between &4= 1 aM Shinh factions
apted into vIo1 a in the south. a in Tehran a sail oppoasi-
tion$st group con .azoteed, a deteermixd but ta?xst ooossfnl protest
against "rigged a keationag before the ohm Nov thaleess, reports
i i.cate that the go ner a nt is interfering less in the eelwtie
than ever before XMeeei, the very fact that deco etratioze are
being permitted tmg sta a certain willixa ees on the part of the
4-070r=Mt to aerpt "free" elections and th*lr trappi s,
~ww,,,,.s~~~.~~~?~ ~q~i.~t ~-I~oat ias.~: I,,,.z
i ? ae first shi ent of Soviet wheat to Iran arrived In the
northern border axaa. at Jolfa on 20 October, according to the
w.*niaara press. As additional shipments are received, the pre-
oea tion of inter .l s turf in A bal'aanm which a sL* s *ni
.se be threaten . in the frontier areas by acute food ahortagos,
e7 onld become less of a prrblm for the Iranian c. utho ties,
29
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iiW-
bci 0 - an for T
The ' political suboom i$tee's plan for Lt 7a p dt
. sr ultimate independence and meaaabersbip in the ON after a period
of administration under a US h1& commissioner assisted i a lti-
r ,tion advisory counallo pleases the Arabs ana appeases the Itallans~,
British authorities in Tripolttania, however, harms not taken kindly
to the plant chargIng that it ld make for o beres o administra-
tion expressing doubt as to' Libya's readiness for Indepeodenote
In 1952, the date specified in the plem. We srthelese, this scheme
1 errs to be the onlyy comprmisee solution assuring contiuname of
t JS strategic bases in Lib *a which is capable of wining a two-
thirds vote in the General Aasemblr.
:~~ oaf reaxaa
The Oyrenatcans are having trouble establish: their a
eve giant because Prleer .esit nateeE pat Ksk.aia is miaslang and
cannot be f a It Is rumored that Xet .a, a en ca ee atto=W
In Al dria., and his wife. who enjoys Alexandria's social a ativityu
are not enthre&astto about the somewhat dubious rewards of politica-.l,
service in Cy renaicaa
Overcrowded condition* at the port of Beira In Moz big e,
at present the most important outlet for Southern Rhodesian chrome
voquired by t ho US stookpili program, be a.l1oviated eomewbi
r-h; cal lftw r O tap lecteed by the Portu guess Gover .
got Wider W q. c r eed. imports Into the Rhodesia together with
aatime deterioration of facilities at Beira have limited the
;~ruual export of chrome. Although Southern edema normally
escpplieee only about 10% (5000 tons) of US chrome imports, US
irme have contracted for 3008000 tone of vho b^c og which Cannot
be moved from the mines because of the Beira bottlsn.ok. The
?hort-term Improvements, which include mechanical ore-e!i
f'aacilitiees$ ahou.ld be ompleted. in etdhteeu months and -,rill in-
crease port and rail facilities to the extant noeaa to
at minim US strategic materials requi-ra gents from this area.
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110M IN 32M
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V A R E A 5 T e. PAC i `i C
CHINA
The "United front" of the loading; natiore of Asia. ,
West, in regard to the q e tion of eLo jure rr ition of the ?_r`.ist-
oaiatx c Peoples s RVUblie rata the Ha .tRas ss
esnC of Chin .,
erro
collapse before the end of this year * r5w Coe aiets t balie'vi tb
ac broak in the "A ted front" on the rl of one major paver Would
cater the dissalution of the entire structure, are endeavoring to ae r`-
s de aertain major powers, and especially the "tom a-ad India, t t 1t eir
.atare s iA Chi m cannot be pseoteetsd or vw=din thb absence of
moo/ t ion. The UK and India are a;, to be more favorably dlzpoeed
to grmtlng rap Id roeo action than Is the US, and conference of top
1 officials in Southeast As la, sehed .ed for ne: t month in S .xr Fs s
:U11 ";otabted take tt this question.
Xndia appears to have been i ~rosae l pri.r :rily by the r..tirt a i-
Petic a otivation, rather that by the Co st domination, of the Ciri se
revoltt .oar,. Moreover, India does not res ret the redline of the 5 2 .onsltet
?eglme~, which it reams as depev..eut upon and anbserveut to the West.
A1thon India probably will not reeoe4aice the People Is Republic t t o t
ga in; the end the UU of Its intentions it Is quite 1i1e3y tI ar ord
recognition in spite of US-UK objections, This rat happen at any Une
end is anticipated before 1950, unless the implications of sestia
Chinese Co ists on the t Security Connoil (eespeecially in rd to
the KaeY r issue) should prove an ova rrridIng co .% idsraation,
M 4?a ODSEr erie svee, on the a n;, y,
that toi Will develop in Chin if at all, only after they peoplrs'-'s
Hepublio has been forced into economic dgperdence on the U' SR W Z h:,.c
opt its fill of Soviet exploitation in the name of *friend hip,!
."3 -
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p %e easy Coaaa:rimi t occupation of Canton haq redr ed 'atio a' .iet
in mainland China to the sout? er tert pro ,i se of Sze hw t,
ie?ei0bo w, ' ame and t an?e x.,: Ssecb an, China.e s oet popnal pro-
xi; , M its major cities, C aid Ohexagtu, Ore the most
mavi tine
objectives for the next Commantst offensive, An attack on,
Ss.e+ch son may begin within t next two weeks and t? .e Proviucag a for
centers probably will be in Co tantst harels by the ond. of 1949.
The Waif, rid mountains s a ^ df ng Szedhst? limit po i bie
. very s of inraeion, ~ the north, the most eultable route for me,
troop ve enta is the Mountain hi ,ray soath from Nanchang in Shy-nsf
to Xveneaan in Shan, and thonce to t be Szechwan basin and tba}
cities of Oh rt u and Ch-=V
,ng. From the eat, t crc are two a j:. a
one from the Pats .g-Bnshih area of northwest Mape;klh and the other inna
t.Iu Ch? ,e~ iaac area in Hunan. These routes girt just, 9naid the
3zoeI wan border and 'roam there a single rood loads reah37 to
as ae 190 miles further vest. From the south, a hii a leads to !ah,
i-n ; from wwtiyan ;, capital of Mirei ym a little over 200 Miles to th e
,,;oath. .fie > the present time, they Co +nist~s are in sOsitian at only one
+,'{A. ese four depaarH ?e oointe'+3 3the area of Ch~.`nig,e ie ia1 . haul
ing e
a che in $ ronsi Is Hu T "ue a? s present hea rter,I.
ie believed that fu aster no more then 20 to 25 thouse cob t
;f ectives despite all Nation lot reports to the coat;rarr The
tsora:;.x
a .-V En's forces is jai ti ].y low and hip ?Ield- geeneralship leaves M.chh
to be desired. The Patter Ahshut area of E h Is presently doff a?;d.c d .
vme 100,000 men nailer Sunk; iii-1ten. Nominally v der Pai Chug- a i l
co a ud,, Sunda is cc ids red unreliable and is o ected to offer n a- a i r =
z.1`'an 1Qface-oasv'in " 2 aistance at lest,
n'it ai$ the boundaries of Sstecbwan, there are some 35,000
i ,ationalist troops as well as undetermined nvzber of iudi ftorent
-9r,.Pvincial levies, tog ether with small forces wbe owe allegiance to none
.' 5 their individual warlord co ia dars, Against these troops the Coo
=.vets can throw the 150,000 men of Peng Teh-L ; s First Field ' q
as well as elements from the commands of Liu. Po "cheng and Lin Piao,
totalling more than that number. Tbase are first-class forces w capable
of overrunning the defenses of the -;rovince in ort order and the a et
n=ehine of the Co unist attar presumably awaits the redis isitiou of
s e troops, This redisposition., while unreported as yet, is pra. h1y
, lread,v well under w W,
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INDOCHINA
. .a p oi- ~~,t~ ai tt~t$en
AlthouM the French last week mounted an attadA on the Viet-
neaaaeoo resistance stroniold of Minh, an Important armsv-sstggling
2~+rtv -sseeaian of which has been vxichallengs4 for nearly three years,
of; ' tat comaasuniquea offer little hope that the over-all `renoh
tailttar position will be improved In the near future. Arrival of
some ten tale.-?sand reinforcements from Prance and. North Africa during
;hs past ee?sz 1 r4ouths(bringing troop strength in Indochina up to
-ipproxinately 1305;; n1 has not reversed the steady deterioration of
the French position in texas: out of four major fighting areas. Only
in the xoi area has thre . been any improvement.
Indicative of a growing desperation on the part of the French
cor mand is the willingness to take military measures prejudicial both
to the immediate and to the long -rrm well being of the Indochinese
economy. fruit trees and coconut palms bordering on military routes
havd been cut down in large numbers for reasons of military aecarity.
Railroad, workshops and rolling stock in resistance areas be been
destroyed. Nearly a thousand junks and sampane plying the river net"
t,pork of Cochinchina were sunk in recent operations, thus ar?ati
a shortage of rice In Saigorao already made severe by a resistance
blockade of the major producing area to the west. Rice exports for
the first half of 1949, as a result. were about 8% of prewar.
Resistance capabilities, on the other hand, appear to be in-
proving. French i+igh Commissioner Pigeon has stated that Vietnamese
military operations have passed beyond the guerrilla stage and that a
"rael war" Is now under way in Tonkin. The southern advance of the
Chi.ne?se Communists is expected to permit a flow of arms from China unto,
Vietnamese resistance areas, thus imposing a far her strain on French
re sources in order to counter such Increasing pressure. Daring the
three year period ending In 1948. French miUt expenditures in Indo-
china totalled more then 430 million dollars (US). It is estimated.
that operations for 1949 will require an I crease of 60% over the
previous years s expenditures. The time appears to be approaching
r idly when the French will be faced with the choice of granting full
sovereignty to Vietnan, or accepting the consequences of a costly
military disaster.
33
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Chang s of tolation Of the hitherto re eon VIr eucsressf i
Netherlands-Republican cease-fire agromseut have increased to, the
point where current negotiations at the Iowa Ta tee goufere ee at
T well be extsiengo red.. Although no attacks have b*en
sanctioned by either side, severe2 ailed clAshe2 and a defter O ration
of official relationships, have res'alted in rising teneioa d. tai
recent weeks uutii, at present, w1despre6d fighting is threatened
throughout Past Java.
Reoent Dicta complaints that their military positions are
being n der wined by the "infiltration" of Republican forces to accoZ-
c oo with a. well-defined plan have brought Republican replies that
the alleged infiltration process is nothing more them the emergen
of underground units already present In the areas concerned. D t th
chs-rgee that B* lican ponsored. "shadow admintstrations& are forcibly
replacing Ditch est dished. civil governments in certain rural localities
are covAtered by Repsabitcan explanations similar to those offered. for
their infiltration tactics, The Dutch have claimed., f *rthet' that the
isepublicaf Army Is being infiltrated by great re bore of ertremi.ste,
fho hold no allegiance to the S mnO government and will be In a
position to overthrow the Republic as soon as Dutch sovereignty is
melt outsbod. The Republicans say that this peril Is greatly
erated. The Republtcaena maintain that. according to the truce agrees.
menu. the Arm; was to be supplied with food and clothing bb Wn, Dtatch
du 'ing the truce and that this had, not been donee Republican spoke n
pint the blame for inereab ing impatieF and looting in their stay Ou
this lack of food and clothing. The Dutch deny such an uxaderstandintg,
althov, ;h admitting a recent informal agreement to aid certain unite in
West Java. o ver, %key, say that logistics problems have delved the
fulfillment of this pro#ni$e.
Decently, perhaps as a. result of vawasdnnsss both o*et their
exposed positions and the general deterioration of relations, the Dutch
on several occasions have surrounded sad disarmed small guerrilla bands.
The Republle? s, In tom, have retaliated by ambushing a number of
Dutch patrols. Instead of settlement of such Incidents on the level
of local military command., they are being vigo ous y argued at high
goverment lev+ l.s. This week, the Republican Minister of Defetasa pub-.
holy ancused the Dutch of legalistic a'maxeaas~t ibleneas-," and stated that,
as the result, "a rapidly deteriorating situation" was deveicpi which
could result in open warfare thr ? ag out Java and Sumatra. The - Dut ch
coro teerad the Defense Ministers s charge by stating that such public
criticism, in Itself, was a violation of the truce agreement. R aanbile,
tension In Indonesia is mounting to the point where a single serious armed
clash might well lead to a general conflict. Should such hostilities coence,
any success;fu]. termination of the iiz m Conference would be 2 . i?y improbable.
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SZC$l,"T
PHILIPPINES
Violence threatens the Philtppinss as the bitter, y-contested
presidential campaign enters its final three weeks. Sporadic &=play
has already been reported at widely separated paints--the latest inci-
dent being the murder of a proarincie campaign n r for the minority
Iaotionalisstas on 16 October. Earlier, a minority poll inspector vas
killed and four lather recent killings have been attributed to political
strife.
A high nation lista bag stated that his party is organising
combat units. composed of men "not afraid to die," to prevent election
frauds sad counteract anticipated terrorism by refaces Liberal Party
.amid the 0evermment Constabulary during the 8 November election. Upon
returning from a campaign tour last week, N'actona ista s edidate Laurel
charged "there exe definite indications of fraud and terr'oris in the
provinces , 09 Be7ond the banot, tbu para yzost and violated, what
other recourse is there for the people but recourse of was?"
The Go rnnont is aware of the dangers of election disturbances
by all factions, Including the Communisstss, and is apparently making
serious efforts to control the situation. F anila police have conducted
raids in the capital city to uncover subversive activities and the Con
sta' .arg has once gain launched an anti-Bak dri in central Lou to
"clear the groimd" for the coming election. Ifevorthelesssa, outbrerake
of lawlessness are expected throughout the Republic on 8 ovember.
Illicit firearms are plentiful end the strong sentiments connected with
the election contest ms sporadic incidents of dielsnce a certainty.
5Irrognlaritieaa at the polls, including "termites in the ballot boxes*"
will famish supporters of all political factions with ample excuse for
dissturbaaeces. The Government's law-enforcing agencies, never, are
deemed capable of keeping the situation under c=trol.
r 35 r,
SOT
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X O T E D I N BRINY
A'esw:ea o#e,ra ont CbUM
Senator Smith (IL, New Jerae,) arrived on Taiwan on 16 Octo Ur
in Genera]. MacArthur's t ersonal plane. Senator Smith "exchanged
personal views with Chic; Itai-ahek in a two ho u meeting. Gene
Chennault arrived from Hong long on the same d.,?, A Nationalist
station, calling itself 'The Voles of Tree China,' has began broad-
casting from Taiwan.
he Nationalists lost their last two major ports on the Chi-
neces mainland when the Co uaists walked into Canton ant Amoy on
15 and 17 October. These ports, the only ones of and site remaining.,
in Nationalist hands, w rc abandoned without a fight.
Shanghai suffered Its heaviest air attack to date on 15 Octobar.
The bombing was described. as "4naccurate" and "indteeariminate. 0 A
Li Teung--jen emissary has reported that Pai Ch hg-hai suffered Ohea
losses" when he Fe forded by the "Generalissimo?n treacher7" to
fight his way out of Hen a sg.
The Australian Kish. Court has upheld the conviction of the
SecretaryGeneeral of the Australian Conwanist Party, Lannuce Shhrk y..
for sedition. Shang s convietlon, which carried a three-oar prison
term, resulted from a statement made last March In whicte, man,-, other
thliig
. he implied that Australian aroskerss should support Soviet
forces In the a nt of a USSR invasion. On the Cis s contention
that such caords expressed an intent to Incite disaffection, Shank
was convicted, last June by a lower court, but senteAco was withheld
pending an appeal to the 8i, Court against the constitutionality
of the Crimes Act a--the statute =der which he was charged.
SECT
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Nlirr_ %W
L A T I N A M E A I C A
The Liberal Party will probably try to gain control of the
Colombian Workers' Confederation (CTO), a CTAL. affiliate, at the
confederation's tenth national congress meeting 28 Octo X in Bogota.
Although the Communist membership of the confederation Is extremely
small, that party has, to date, succeeded in dominating this organiza-
tion maims throvh its greater cohesiveness and skill in parliamentary
procedure. The Communists have been aided in this also by the fact
that the Liberals are singularly lacking In good labor leaders, and
that at least some of the left-wi Liberals have supported the Com-
munists in the confederation. Now, hoae'aer, in view of the growing
at ti-Com .st feeling in Colombia, continx $ C st domination of
the Liberal-ba ,ed confederattou is a serious political handicap to
the Liberals in the coming prestdenttal election. The Liberal Party
recently made Its first official =ti-Goat promo= ement and.
caused no split in the party. It is therefore in a good position to
make a greater effort than ever before to dislodge the Comma sts
from all directive posts in the confa ratioha and has a. fair chance
of success.
CM f sts?ii$S ty.1026 .to deoc
uontr to the favorable indications of a fe% weeks ago, it
not= appears that apprehension for the futnr is l.eadig the Peron
aftinistratiou to resort more extensively to anti-democratic methods
than previously seemed probable. his apprehension led to recent
politically defensive measures contrary to the spirt of deaoc cy$
such as a "gag lava providing imprisonment for offender against the
dignity of public officials and a regulation which tes the fentiation
or continuance of political parties subject to the disdretion of the
Peron-dominated federal Judiciary. Further, the Goverment have In-
creased its surveillance of disaffected elements In the military s--
tablishment e-ria well as in labor unions; has strengthened the Casa
Rosada Secret Police and the Federal Police; and appointed extreme
SEMI'
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n? tiorialiste to some key _ rerament posts--evidently as an attempt
to appease the ri t- ing ev:q faction., It is significant also
that the OovFr eent has deliberately tried to conceal the seriousness
of its economic problems from the public-,
Underlying this uneasy situation are the persistence of : : ad-
justments in the Argentine economy and the administration's fear that
economic reform cannot be tm0lemented in time to avert labor disorder
and a posoible rightist subversive reaction. Altliongh Important
measures toward a sounder economic polio y continue to be pushed by
the Government- 'notably efforts to expand trade, particularly u4th
the US, and a shift in emphasis from indunatrializ?atlon to agvi t ltural
developmseant-inflationary pressures persist, and labor is expected to
become increasingly demanding Moreover, the Governments steadil7
diminishing fia : icial resources restrict its ability to continue to
spend. as it has in the past, large suns for special labor benefits
The only altem.ative to repudiation of these benefits appears to
monetary expansion which would stimulate the wage--pr:! ce spiral. nallye
the administration continues to be plagted with the difficult ,,rob.em
of reestori Argentine production costs on many items to ir:.ver tio3 .ly
competitive love-Is.
It is believed that the success or failure of the Peron Govern-
ment's efforts toward economic reform during the next six , ont .ms
t.eill be the critical factor in the GovernwentU s stabil ..y , and that
the government will continue to resort to such and?>