WEEKLY SUMMARY NUMBER 31

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CIA-RDP78-01617A002100100001-6
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RIPPUB
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S
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23
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December 27, 2016
Document Release Date: 
July 24, 2013
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1
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Publication Date: 
December 17, 1948
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REPORT
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S. Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I,Re'T Co py No. 80 1 1 WEEKLY SUMMARY I. Number 31 17 DEC 1948 VIY! Document No. NO CHANGE in Class. ri DECLASSIFIED Class. CHANGED TO,: TS DDA Memo, 4 Apr 77 Auth: A G. 77 1763 Date: By: 0 it CENTRAL INTELLIGENCE AGENCY Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 1 1. This publication contains current intelligence exclusively and therefore has not been coordinated with the intelli- gence organizations of the departments of State, Army, Navy, and Air Force. 2. This copy may be either retained, or destroyed by burning in accordance with applicable security regulations, or returned to the Central Intelligence Agency. '61:+1, role" WARNING This document contains information affecting the na- tional defense of the United States within the meaning of the Espionage Act, 50 U.S.C., 31 and 32, as amended. Its transmission or the revelation of its contents in any manner to an unauthorized person is prohibited by law. Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 M Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET. 1 I I I I CONTENTS HIGHLIGHTS WESTERN EUROPE., EASTERN EUROPE _ 4 ? ? NEAR EAST - AFRICA FAR EAST WESTERN HEMISPHERE ANNEX # ? , ? 1 4 4 4 4 4 4 4 .1 4 ? ? 4 4 4 . Page 1 2 5 10 13 Prospects for Palestine Conciliation Commission , 14 Mao Tse-Tung, Chinese Communist Leader, ? 17 SECRET - Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 1 1 SECRET HIGHLIGHTS Chinese Communist forces have, by successfully containing all the effective Nationalist units south of Ilsuchou, virtually finished the battle for Central China While the Communist armies pause momentarily along the north bank of the Yangtze River in order to regroup and resupply, the Nationalist military offices in Nanking are beset with despondency and confusion (see page 10). Nationalist political leaders are similarly afflicted with despair and uncertainty and apparently have not made any systematic plans for the removal of the Government fol- lowing the loss of Nanking. The firm intention of the Netherlands Government to proceed unilaterally in the establishment of an interim government for all Indonesia has been deflected, at least temporarily, by the conciliatory letter recently addressed by Indonesian Premier Hatta to the UN Good Offices Com- mittee (see page 11). Meanwhile, the Indonesian Republic is continuing its efforts to win both domestic and foreign support for an eventual showdown with the Dutch. In Moscow, the Kremlin is currently holding dis- cussions with Satellite economic delegates in what appears to be an effort to bolster Satellite economies under increased Soviet control (see page 5). The serious deterioration of the vital Czechoslovak economy has largely prompted the hold- ing of the conferences at this time. SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET WESTERN EUROPE GERMANY Soviet Withdrawal Although the USSIVin the near future may officially propose quadripartite withdrawal from Germany, such a proposal would be primarily for propa- ganda purposes in view of the still inadequate Communist control over eastern Germany. Soviet propaganda has persistently ad- vocated such a withdrawal since the Warsaw Conference in May, and the Kremlin may now wish to strengthen this propa- ganda campaign with an official proposal. Meanwhile, the USSR has created the framework for an eastern German state and has hinted that after its recognition the USSR would sign a sep- arate peace treaty involving a partial withdrawal of Soviet troops from Germany. Implementation of these plans, however, would be preceded by a far more vigorous propaganda campaign in the hope of convincing the German people that the USSR stands ready to keep faith with Germany whereas the western powers insist upon continued occupation. Regardless of what propaganda proposals are made, the Kremlin cannot risk with- drawal. of its forces from eastern Germany until the Communist position there has been sufficiently consolidated, probably not before the summer of 1949, Inflationary Trends Inflationary symptoms now appearing In western Germany may eventually imperil its financial structure, the morale of the population, and the industrial production upon which much of western European recovery depends. The inflationary tendencies are being strengthened by the easy credit policy of the banks and by the Large operating deficits of most of the Laender govern- ments and the Bizonal Economic Council. Despite widely- proclaimed intentions by the German governments to economize, SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 S Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET GERMANY practically no attempt is being made to bring government ex- penditures into line with revenues. Credit expansion and the release of blocked accounts since the currency reform have increased the money in circulation from 1.1 to 14 billion marks. This increased money supply has raised prices, thereby en- couraging the reappearance of hoarding, the black market, and pressures for wage increases. ITALY Italian Colonies Although the UN has postponed until April discussion of the controversial Italian colonies question, the maneuvering which preceded this de- cision underscored the difficulty of reaching a generally acceptable solution and has already produced repercussions In Italy and North Africa. In Italy, bitter reaction to the lack of US and British support for the return of the colonies to Italy will probably cause Premier De Gasperi to soft-pedal temporarily his efforts to gain popular support for an Italian bid to join the proposed Atlantic Pact. De Gasperi's pro- west position is already opposed by neutrality-minded left- wing members of his own Christian Democratic Party, as well as by moderate Socialists, extreme leftists, and other nationalist elements. In French North Africa, French support of Italy's claim to a trusteeship over TripoMania has, by revealing France's intention to maintain indefinitely the colonial status quo, sharply increased Arab nationalist re- sentment against France. -3 SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I. SECRET FRANCE Budget Deficit The budget deficit problem will require the full attention of the Queuille Government during the next few weeks if it is to survive politically and at the same time further the progress of France along the road to economic recovery. In its efforts to bring expendi- tures into line with revenues, the Queuille Government will be confronted with: (1) opposing pressures from powerful political, economic, and labor groups for relief by govern- ment action; and (2) conflicts between France's immediate fiscal needs and US European recovery objectives. Any sound solution to France's budgetary problem must now take Into account US decisions involving such matters as the :size of ECA dollar aid for 1949 and French investment program commitments under the European recovery program. Mean- while, the internal problems of the Queuille Government are best demonstrated by the divergent official policies of two of its political supporters, the Radical Socialists and the Socialists. The Radical Socialists demand, among other things, massive cuts in government expenditures, a lessen- ing of governmental controls over business, and lowered taxes to encourage production. The Socialists, in contrast, oppose reduction of the civil service, seek stronger govern- ment control over prices and production, and urge a re-dis- tribution of the tax burden, which would mean higher taxes for business. Confronted with the task of retaining the support of both these opposing forces and at the same time reducing the budget deficit, the Queuille Government must either find a compromise course or face a vote of non-con- fidence from its awn dissenters as well as from the Com- munists and Gaullists. SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET EASTERN EUROPE Satellite Economy Strengthened Kremlin control over the Satellite ecOnonaies will probably result from current discussion; in Moscow between Soviet officials and economic delegates from all the Satellites except Albania. The presence of top political and economic leaders from Czechoslovakia and rumors of an impending visit to Moscow by a high-level Polish delegation reflect the importance the Kremlin attaches to the development of the industrialized economies of Czechoslovakia and Poland. In fact, the rapid deterioration of the highly-important Czechoslovak economy since the February coup may have prompted the Kremlin to consider immediate drastic steps to alleviate the ailing eco- nomic situation in the Satellite area. Realizing that two years of ruthless Soviet exploitation of Satellite resources, coupled with a curtailment in east-west trade, may finally be threaten- ing economic dislocation in eastern Europe, the Kremlin may have decided to exercise more direct control over the econo- mies of the Satellite nations and to implement a more closely Integrated plan for their economic development. The USSR is probably also motivated by the necessity to improve the economy of eastern Europe in order to counter the growing economic recovery in western Europe. SOVIET UNION Israeli Policy Although the Kremlin is unlikely to alter its basic policy toward Israel before the 25 Jan- uary Israeli elections, the recent marked change in Czecho- slovalda's earlier friendly attitude toward Israel may reflect an impending change in Soviet tactics in the Near East. Czecho- slovak authorities have cancelled the Israeli military training program and the Government has allegedly forbidden unscheduled -.5 SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET SOVIET UNION air flights to Israel. This latter move, by curtailing clandes- tine arms shipments, represents as obvious financial loss to Czechoslovakia and was probably dictated by the Soviet Union. The USSR may estimate that the establishment of Israel as a disruptive force in the Arab world has now been accomplished and that further military aid to a country of basically pro-western sympathies would ultimately prove prejudicial to Soviet interests to the Near East. Nevertheless, the Soviet Union, In the faint hope that Israel's pro-western itlignment may change after the 25 January Israeli electioas, Ms not yet altered its basic policy of politically supporting Israel. GREECE Guerrilla Activities Although neither the Greek A.r3ny nor the guerrillas have undertaken large. scale operations, they have continued their efforts to search out the other's weaknesses and to maneuver for position. Significantly, guerrilla logistics appear to be as satisfactory as ever. Supplies are being trucked into the Vital triangle from both Albania and Yugoslavia, and the Grammos area, laboriously cleared by the Greek Army last summer, Is again serving as a supply link between Albania and central Greece. Czechoslovak mm.Skoda artillery pieces have been found among recently captured guerrilla equipment. The guerrillas have meanwhile continued their propa- ganda efforts. In the battle zone, they have begun to use artil- lery to fire their leaflets. Behind the front, Markos' radio broadcasts to the Greek Army are emphasizing conciliation and urging the formation of unit "reconciliation committees" which would act to stop the war. Although the Greeks cannot believe that Markos honestly wishes a reconciliation with the SECRET I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET GREECE Athens government, the successful guerrilla performance at Grammos and Vitsi is causing many el them to wonder if they were right a year ago in believing that Communist "peace" efforts were prompted entirely by weakness. SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET NEAR EAST-AFRICA MIA -PAKISTAN Military Operations The impending departure on 15 January of General Sir Roy Bucher, the British officer now commanding the Indian Army, increases the possi- bility of full-scale open warfare between bdia and Pakistan. General Bucher has exerted a moderating Wham* on Indian military policy and, in cooperation with his British opposite number in Pakistan, has held to a minhnum direct encounters between the Indian Army and Pakistan's regular troops in Kashmir. His successor, Lieutenant General K. M. Cariappa, Is reportedly vain, temperamentally unstable, and lacking in sound military judgment. In attempting to give palatable mili- tary advice to the Indian Government, he may fail to give due consideration to all of the military and political factors in- volved and may use his new position to seek the personal glory that a speedy termination of the Kashmir campaign would provide. The need for a prompt political solution of the Kashmir problem is underscored not only by General Cariappa's appointment but also by the prospect that weather conditions will be more favorable for military operations after 1 January 1949. Even if India does not start a clear-cut offensive operation, Increased Indian pressure may cause an already nervous Pakistan to launch a "preventive" offensive. TURKEY Arab Relations Turkey has demonstrated the seriousness of its desire for an Arab-Zionist settle- ment by its willingness to serve, at the risk of incurring Arab displeasure, on the UN's three-power Palestine Con- ciliation Commission. Already confronted with hostile powers - 8 - SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET TURRET along a considerable portion of their frontier, the Turks have necessarily placed great stress on maintaining good relations with their Arab neighbors. Turkey voted against the partition I Palestine in 194? and in its subsequent actions has been careful to avoid any steps which might provoke Arab hostility. At the same time, however, Turkey has been concerned over the deleterious effect the Palestine dispute has had on Near East stability and the resulting opportunities for Soviet agi- tation. During the past year the Turkish Government has sought on a friendly, informal basis to persuade the Arabs that their interest would best be served by a Palestine settle- ment. Now Turkey, along with the US and France, will have to take the blame for any acts of the Commission to which the Arabs object (see page 14). SOUTH AFRICA Government Rift A growing split between the Nationalist and Afrikaner Parties has weakened Prime Minister Malan's coalition government and raises the possibility of new general elections. The rift has devel- oped as a result of differences between the leaders of the two parties over the allocation of seats for the March pro- vincial elections and over constitutional questions connected with the bill for depriving colored persons of representation In the Assembly. Prime Minister Malan apparently has the choice of risking a new election or of paying the price for continued cooperation of the Afrikaner Party, led by N.C. Revenge. In the case of new elections, Revenge might join with Smuts' United Party, a development which has been facilitated by the death of Smuts' successor-designate, J. C. Hofmyer. SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET FAR EAST Economic Conference The recent, unharmonious meeting of the UN Economic Commission for Asia and the Far East ( ECAFE) chiefly centered around: (1) renewed efforts by Asiatic delegates to secure US backing for a "Marshall Plan" for Asia; (2) continued discord between colonial and anti-colonial powers; and (3) Soviet attempts to exploit these differences. The US-Dutch attempt to bar the Indonesian Republic from membership in ECAFE was soundly defeated by an 8-2 vote. US refusal to sponsor a "Marshall Plan" for Asia has created an anti-western sentiment which the USSR is exploiting, along with the quarrel over seating the Indonesian Renublic. as nroof that "imoerialist western nations" seek to keep the Aa1at4c economy in a "semi-colonial" state. On the other hand, the USSR itself suffered a propaganda defeat when the Commission emphatically voted down a Soviet amendment to an ECAFE resolution favoring import of foreign capital. CHINA Military Debacle Despondency and confusion pervade Nanking military offices as complete military defeat comes nearer, and the Chinese public, long fed a diet of "victories" and "strategic withdrawals,' must soon be confronted with the stark fact that shattering reverses are being suffered by the Nationalist forces south of Hsuchou. The position of the encircled Nationalist forces southwest of Hsuchou and west of Kuchen is virtually hopeless. Although the Pangfou Nationalists will probably attempt to withdraw south of the Yangtze river, it is doubtful that many of these forces can be salvaged to bolster the weak Nanking defenses. The only chance for a breathing spell for the Nationalists lies in the possibility - 10 - SECRET I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I. 1 SECRET CHINA that the Communist armies will have to pause to re-group and replace expended materiel. In North China, the Nationalist position is also deteriorating rapidly. Fu has withdrawn from most of his outlying positions to the cities of Peiping and Tientsin, and Communist advance guards have already reached the outskirts of these two Nationalist bastions. Present indications are that a political, rather than a military, decision will effect a transfer of power in the area. Manchurian Autonomy Hints in the Chinese -Communist press of Dairen that Manchuria will have a special status, under Communist control, are substantiated by the Communist radio announcement of a new, unified currency for all of "liberated" China except Manchuria. Although such special status for Manchuria may be motivated, in part, by a desire to keep the relatively unstable north and central China economy from debilitating that of the Manchurian area, the special status arrangement may also be the first step in setting up a Manchurian People's Republic similar to that of Soviet-dominated Outer Mongolia. The Dairen press release carried plims for setting up the Judicial, administrative, and executive departments of a "People's Republic," and commented that the Communist Party must completely direct the affairs of the government. INDONESIA Dutch Plans Dutch plans to proceed without the Indonesian Republic in the establishment of an interim government for all Indonesia have been delayed at least temporarily. The conciliatory letter addressed by Premier Hatta of the Republic to the UN Good Offices Committee has, by making the Dutch attitude appear stubborn and arbitrary In contrast, given the Dutch Government pause. Public sea- SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 1 SECRET INDONESIA tinient in the Netherlands strongly favors a move by the Government to push ahead with its Dutch-sponsored federal movement in Indonesia. The Government will encounter resistance from its constituents if, in response to the pres- sure of the UN and world opinion, it delays this program further or renews negotiations with the Republicans. Meanwhile, the Indonesian Republic is attempting to marshal both internal and foreign support for an eventual showdown with the Dutch. The Republican Government claims that, if forced to flee by Dutch police action, it will move to southern Sumatra and, if necessary, will establish a govern- ment-in-exile in India. Indian support in such an eventuality may also include denial to the Dutch of air landing rights and an embargo on all Dutch shipping. The Republican government is also intensifying its efforts to win the support of non-Repub- lican nationalists. - 12 - SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 ?1 SECRET WESTERN HEMISPHERE ARGENTINA Economic Policy Argentina's failure to take effective measures to relieve its unfavorable economic position apparently is resulting from a conflict between leading personalities of government and finance, That Peron permits such behind-the-scenes maneuverings to nullify government action on such a vital matter?adjust- ing Argentina's foreign trade politicies to what is becoming an international buyers' market--indicates that Peron does not yet consider economic deterioration to be an immediate threat to his internal position. (His party obtained a strong majority in the 5 December elections.) As Argentina's Internal economic crisis becomes more acute, however, Peron may be forced to intervene in these backstage maneuvers to the extent of initiating negotiations leading to a broad under- standing with the US. - 13 - SECRET I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 ff?be?es?b Nr., I V Om. I VII NO-3, I= I N./ 1 I U% I I. 15 December 1948 11 1 1 2 PALESTINE \ Approximate area under Israeli civil or military control, 15 December 1948 Partition Boundary Ws accepted by the United Nations General Assembly. Nov, 19471 Inteniationel Boundary Standard Gauge Railroad W1w1 ? 34,11TON Gauge Reilmed131w1 First Clues Reed Second Chem Road 011Mpe Line 0 Jewish Communal Ana IQ 20 30 Mks C1161=11=6111111111MIlaral"".." MVO' 11112 Map Branch, CIA. 12-48 CONFIDENTIAL CIA ROPIOCHICtI011 STAT Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I. SECRET PROSPECTS FOR PALESTINE CONCILIATION COMMISSION Last-minute adoption by the General Assembly of an almost completely emasculated resolution on Palestine reflects: (1) the Assembly's unwillingness to define (as it did in the 1947 parti- tion resolution) the terms of any solution which would require forceful imposition; and (2) a consequent decision to permit the situation to work itself out along the lines of the existing Israeli fait accoropli. &Ur events had pretty well run their - course In Palestine, the GA finally adopted a resolution winch simply established a Conciliation Commission (to be composed of representatives from the US, France, and Turkey) to assist the Arabs and Jews to achieve a settlement. The GA did not recom- mend a basis for settlement, and the Commission will be con- fronted with almost all of the multiple difficulties faced in turn by last winter's Palestine Commission, last summer's Truce , Commission, by Count Bernadotte, and by Dr. Bunche, the present Acting Mediator. Although the Provisional Government of Israel considers the present as a propitious time to negotiate a favorable settle- ment, most of the Arab governments concerned are unwilling to enter into early negotiations. The Lebanese Government refuses to talk while Israeli troops occupy areas of southern Lebanon. The present political crisis in Syria was canoed in part by the failure of the government's Palestine policy, and it is extremely unlikely that any new government will either desire or be permitted to negotiate with Israel. Iraq still maintains about 15,000 troops in central Palestine, and the Iraqi Government continues to advocate concerted opposition to Zionism by the Arab states. The Iraqi Government does not dare bring home an army that has failed to defeat the Zionists; it is difficult, therefore, to imagine on what basis Iraq could negotiate with Israel. Egypt refuses to negotiate while Israeli troops continue to control the Negeb, occupy Beersheba, and hold as virtual prisoners an Egyptian brigade at Faluja. - 14 - SECRET I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 1 - SECRET There is little doubt that Abdullah of Transjordan would like to negotiate a broad settlement with Israel. A local armi- stice in Jerusalem between Israeli and Arab Legion officers is working smoothly, and Abdullah has been urged by the recent conference of Palestinian Arab notables at Jericho to proclaim himself joint ruler of Arab Palestine and Transjordan. On the basis of these two developments, agreement between Israel and Transjordan might appear to offer hope for a broad settlement In Palestine. Other members of the Arab League, however, strongly op- pose the Jericho resolution. The Kings of Egypt, Saudi Arabia, and Yemen, Azzam Pasha (the Arab League secretary general), the influential council of Ulernas of Al-Azhar University at Cairo, and the governments of Syria and Lebanon have expressed their disapproval. Unless this opposition is modified, it is doubtful whether Abdullah will act, despite endorsement of the Jericho resolution by the Transjordan Parliament. Even if he were to assume the Palestine crown and attempt to negotiate with Israel against the express wishes of other League members, he would probably gain little territory initially. His Arab Legion occupies the Old City of Jerusalem and a relatively small area bounded by Ramallah on the north and by Hebron on the south,. Abdullah Is therefore in no position to negotiate either the Negeb or the Galilee issue. Moreover, he is not likely to receive encourage- ment at this time from the UK, which is anxious to avoid responsi- bility for any development opposed by most of the Arab League and also realizes that Abdullah's authority in Palestine would be greatly limited. Eventually, however, the other Arab states may decide that it would be to their best interests to withdraw and let Abdullah bear both the onus of treating with the Israelis and the responsibility for subsequent developments in Palestine. Thus the Conciliation Commission faces a difficult task In trying to bring Arabs and Jews together in view of: (1) the absence of any basis for reaching a settlement; and (2) the re- fusal of most of the Arab states to negotiate with Israel, In - 15 - SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 I Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET effect, it will probably revert to a truce commission. It may be able to extend the present Jerusalem armistice into a demilitari- zation agreement for the area and establish an effective armi- stice in the Negeb and on the Iraqi front in central Palestine. However, it will probably have to ignore the question of boundaries and the continued presence of Israeli forces in southern Lebanon and Arab armies in Palestine. - 16 - SECRET L Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100601-6 SECRET MAO TSE-TUNG, CHINESE COMMUNIST LEADER Communist Leader Mao Tse-Tung, for 15 years the foremost champion of Chinese peasantry, has become the most powerful political leader in Asia. His stubborn, Intel- ligent leadership is principally responsible for the steady groWth of the Chinese Communist Party whose armies apparent- ly are winning the final battle for control of the Chinese nation. Mao's first ten years in the Chinese Communist Party, which he helped to found in 1921, were marked by obstinate Insistence that Communism in China could only be achieved through an organized and armed peasantry, evolutionary gradualism, and moderate bnd reform. With the expulsion of the Communist Party from the Kuomintang, the "rightist" opposition to Mao was deposed. Following the failure of Li Li-san's "proletarian revolution" in 1931, Mao's advocacy of a peasant base for Chinn* Commtmism became the Party's official program. To adapt Marxist Communism to his con- cept' of China's needs, Mao continued to build his party and his army upon the base of a strong peasantry. His doctrine continues to include a moderate land policy and, for the pre- sent at least, cooperation with non-Communist elements and a conciliatory attitude toward western nations. Although Mao's flexible pragmatism in adapting Com- munism to the Chinese situation has led many western ob- servers to believe that his allegiance to Communism is only tentative, his recent statements in the Corninform Journal Indicate that Mao will probably remain faithful to the USSR In all major issues. The possibility exists, however, that Mao at some future date will resist Soviet efforts to annex either Manchuria or the border provinces or to gain greater direct control over the Chinese Communist Party. Moreover, the return to Manchtria in 1945 of Li Li-san, an aggressive supporter of Soviet interests, might suggest that the Kremlin desires to strengthen Soviet control over the leadership of the Chinese Communist Party. - 17 - SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 SECRET D Lsrrn IBTTlCsN 1? The President 2. Secretary of State 3 Chief of :47,iff to Commander in Chief 4 Secretary of Defense Secretary of the AT:my Secretary of the Navy Secretary of the Air Force Chtirman, National Security Resources Board Executive Secretary, National Security Council 10 Assistant Secretary of Navy for Air 1,69 Chief' of 3taff, U Nrmv 12,13,14.. Chief of Naval Operations 15,16,1'7. .. Chief cif Staff, U.S. Air Force 18? ? . ? Director of Plans and Operations,General Staff,U S,Artny 19. . Deputy Chief of Staff (Operations) U.S. Mr Force 20, Deputy Chief of Naval Operations (Operations) 21 . Director of Plans and Operations, U S Air Force 22,23,29. . Special Assistant to Secretary of State, Research & Intelligence 25,26,2'7,28,29, Director of Intelligence, General Staff,U .5, Army 30,31,32,33,34 35,36,37,38,39, Chief of Naval Intelligence 40,41,42,43,44 45,46,47,48,49. Director of intelligence, U S kir Force 56 Director of Security and Intelligence,Atom Energy Comm 51 . Executive Secretary ,Military Liaison Corn:Tlittee,Atomic Energy Commission 52,53,54,55,56. Chief ,Acquisition gz Distribution Division,01CD,Dept State 57. . , Director, Federal Bureau of Investigation Secretary, joint Chiefs of Staff Chief, Policy Planning Staff,Dept,State 60 Secretary of State (Attention: Chief,Policy Reports Staff) Deputy Director, joint Intelligence Group, joint Staff 62,63. Secretary, joint Intelligence Group, joint Staff 64 . Director, joint Planning Group, joint Chiefs Staff 65 US Air Force Representative on joint Strategic Survey Committee 66,67. . Secretary, State-Army-Navy-Air Coordinating Committee 68. . Administrator, Economic Cooperation Administration SECRET Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 1 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6 1 ?Sietirr U. S. GOVERNMENT PRINTING OFFICE 2631-8-1948 Declassified in Part - Sanitized Copy Approved for Release 2013/07/24: CIA-RDP78-01617A002100100001-6-