WEEKLY SUMMARY NUMBER 67

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002200200001-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 27, 2016
• Document Release Date: May 30, 2013
• Sequence Number: 1
• Publication Date: September 9, 1949
• Content Type: REPORT

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CENTRAL INTELLIGENCE AGENCY
COPY NO. 90
WEEKLY SUMMARY.
Number 67
9 spp 1949
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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.
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.
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C O N T E N T S
Page
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L I G H T S ? . ? ? . ? ? ? . . . ? ? ? . . ? . ? . ? ? . I
WESTERN EUROPE .. .....?..?.??? 2
EASTERN EUROPE ? ?
NEAR EAS rl AFRICA ............... 8
FAR-EAST ?.???.?.?..??....?...???? 9
WESTERN HEMi'SPHERE????.?...s?11
A-RTIC ICE
Yugoslav Trade Pattern .................. 12
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H I G H lL I G U T S
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While US and British leaders were meeting in
Washington during the past week in an effort to arrive
at an understanding concerning the United Kingdom's
acute dollar shortage, there was little change in those
situations elsewhere in the world where US security is
most sensitively affected. Indications continue to grow
that the economy of Yugoslavia is being oriented toward
the West, a development which will be greatly accelerated
by the conclusion of the billion dollar British-Yugoslav
trade agreement now being negotiated (see page 12).
The possibility that the Kremlin may seriously
strive to reach a settlement of the Greek problem at
the forthcoming UN General Assembly meeting has been
strengthened by the recent marked reduction in the
capabilities of the Greek guerrillas and the impact of
the Soviet Yugoslav dispute on the Greek policy of the
USSR (see page 5).. Meanwhile, the Greek Government
has been taking steps to bolster its position in anticipa-
tion of General Assembly consideration of the matter at
this session (see page 6).
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WESTERN EUROPE
~.~ RANiCE
Political Crisis The current wa e and price program of
the euille regime is not expected to
forestall a political crisis, which will probably come to a
be-
head by November. Farmers as well. as workers are
coming increasingly dissatisfied with both xis ^g prices
and the Government's program. Hence the Cabinet's
and labor unrest instead of aver?ti g it. The Government
hopes to: (1) bring some reduction in M& presstwe for
higher wages- by permitting limited emergency food imports
in order to lower prices, (2) benefit farmers by removing
import quota, restrictions on certain IndustriAl items; and
(3) halt motion by directing the Bank of France,, to tighten
credit, Food Imports are unliksely to lower prices rap dl,
enough to prevent labor unrest from developing into wide
Spread, strike action; the Cabiaet's decision to retain import
duties will diminish the effectiveness of increased imports
in reducing prices; and, although the directive on credit will
discourage stockpiling of scarce gods, Ba of France offi-
cials may well continue to circumvent such Government ord..ers.
As economic groups become more hostile toward the Govern
meat and one another, the Govern entt's prestige will
weakened as it approaches the greatest parliamentary test
of the year in October.
easures may actually serve to promote serious farm
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ITALY
Delay in Reforms The policies of the dominant groups
In the majority Christian Democratic
Party are jeopardizing the achievement of much-needed
social and economic re-forms Italy. Premier
Do Gasperi r ? . to ins the present coalition-which he is
anxious to do as long as it serves to support his party -
he will he forced to avoid action which might arouse strong
political opposition. He will, therefore, not be in a position
to achieve an adequate solution of Italy's major social and
economic problems. Such a solution would also he delayed
De asperl succumbs to increasing pressure from both
the right: and left wings of his party to govern =lone. Such
a e le -party go7ernm ent would presumably be controlled
by the Christian Democratic Party's right wing, which is
closely associated with conservative and wealthy Italian
elements, and would oppose any legislation appreciably
altering the economic stag of the underprivileged.
ITAL N COLONIES
Independence Move The di, position of the former Italian
colonies of Eritrea and Somaliland
may be complicated in the forthcoming session of the Gen-
eral Assembly by the rapid .grown. of the independence
movement in the area.. In Eritrea, the loosely-organized
Independence Bloc (Moslem) now apparently represents
at least two-t frds of the poll Lion and has replaced the
Union Wi Ethiopia Party (Coptic) as the largest single
political group. Italy,, hoping to recapture a favored post
tion in an independent Erirea, is encouraging the 'bide
lpendence Blocs The Bloc. may send a delegation to the
heard at the , thus em.. arrassin,g the US and the UK9
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SEC R E T
AL' COLONIES
which are committed to the cession of most of Eritrea to
Ethiopia. Meanwhile, the violently anti-Ita Jan Somali
Youth League is advocating Immediate independence for
X ii .n Somaliland, or, if that is not feasible, a UN trustee-
ship from which Italy wild be excluded. It has been
estimated that between 50 and 70 thousand Somalis would
resort to violence if the.Italia returned and that if their
effort proved Initially successful, they would be supported
an additional 250 thousand So i
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-EASTERN EUROPE
Grain Production While drought conditions in-Western
Europe have had a generally adverse
effect on cereal crop production, the grain harvest in the
Soviet orbit is expected to show a moderate increase over
1948 production. Total cereal production in the orbit will
still be below prewar, however, and any real improvement
in the individual bread rations will be precluded by: (1) popu-
lation Increases; (2) export commitments, dictated by poli-
tical policy or economic expediency; and (3) stockpiling,
regardless of normal requirements. The USSR has shown
the largest increase in bread grain production while Albania,
Hungary and Yugoslavia are actually exceeding prewar.
Rumania alone will fail to exceed 1948 production. Lack
of fertilizers and equipment continue to keep the crop
the Soviet Zone in Germany substantially below prewar
level.
GREECE
GA Action Faced by a marked reduction in Greek guerrilla
capabilities and the impact of the Tito-Comla-
form struggle on Soviet policy toward Greece, the USSR may
be seriously considering the desirability of achieving a settle -
meat of the Greek problem at the forthcoming General Assembly
meeting. In any such settlement maneuvers, Albania would
figure prominently because of: (1) Soviet Interest in maintain-
ing firm control over this Satellite outpost; (2) the presence in
Albania of the largest remaining guerrilla-manpower pool;
and (3) the potential explosiveness of Greek-Albanian relations.
Current Soviet threats to charge Greece and Yugoslavia with
hostile designs against Albania may, in fact, be the beginning
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GREECE
of an attempt by the Kremlin to seal the Greek-Albanian
border and to call off the ill fated guerrilla war without
losing face. Abandonment of the Greek venture might
enable the USSR to regain some initiative in Balkan
affairs and would leave it freer to concentrate its efforts
against Yugoslavia. Even if the USSR does take steps at
the GA to settle the Greek problem, however, it is extremely
unlikely that the Kremlin would associate itself with any
UN proposal regarding Greece which did not provide in some
way for: (1) a declaration of a wide amnesty, including the
extension of political rights to most If not all guerrillas;
(2) a commitment by the Greek Government to hold free
parliamentary elections soon; and (3) es lish nt of a
border commission, including the USSR, to control Greece's
northern frontiers.
Greek Moves Greece is preparing for GA consideration
of the guerrilla issue by: (1) taking steps
toward the solution of domestic aspects of the problem;
and (2) reemphasizing the importance of international
action to seal Greece's northern borders. The Greek Gov-
ernment will soon announce a broad program which may
provide re-education and amnesty for all guerrillas except
the hard core and leadership, stays of execution for crimes
connected with the rebellion, and an early date for national
elections. To prevent Communist political resurgence, how-
ever, the government will reaffirm the illegal status of the
Greek Communist arty and will probably deny civil and
political liberties to Communists and former guerrillas for
some time. On the other hand, the Greek Government, the
press, and the radio are giving wide publicity to the crucial
role Albania played in preventing the annihilation of guer-
rillas in the Vital and Gra,mmos areas, and Foreign Minister
LE RE`L
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GREECE
Tsaldaris. has said that recent Albanian orders to disarm
and intern guerrillas are no more to be trusted than similar
assurances given a year ago. With guerrilla strength inside
Greece reduced to about 5,000 by successful Greek Army
action the Vital, Grammos, Beles, and other areas, and
i the Yugoslav border closure largely effective, it is
apparent that continuation of an organized guerrilla move
ment within Greece will depend primarily on Al .nian
support in reorganizing, equipping, and committing the
estimated 12-15,000 guerrillas now in A ni.. By stressing
this fact and by setter up a framework for Internal pacifica-
tion, the Greek Government apparently hopes to encoura
the UN to make every effort to solve the border problem but
to keep out of Greek domestic aa,irs.
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NEAR EAST -AFRICA
PALESTINE
Economic Mission The Palestine Conciliation Commission's
establishment an economic survey
mission has had a mixed reception in the Near East. Israel,
which welcomes the mission as providing a basis for delay .d
ing or averting General Assembly dismssion of the Palestine
issue, has promised to assist the mission and to give "full
consideration" to any proposal it may makes The Arab states.,
on the other hand, are likely to give to mission only half -
hearted cooperation at best. They regard the new emp .sis
on the economic approach to the PaUesbae dispute as involv-
ing tacit recognition of Israel's de facto political position.
in addition, they are generally suspicious of still another
investigating group and, with some cynicism, expect-Israel
to get the lion's share of any benefits of the missions work.
The Lebanese Foreign Minister has gone so far as to charge
that the mission was really set up to help Israel settle its
current economic difficulties, while Iraq wants the mission
to confine itself to innocuous questions of economic develop-
ment, excluding even the refugee problem as too con ?o rsW,,
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FAR EAST
CHINA
Current Situation As the Communist-controlled Political
Consultative Conference reportedly met
to form a "coalition government" which will proclaim its
authority over China from Taiwan to Tibet, the various mili-
tary fronts in China either moved slowly. or were temporarily
stabilized, and the Nationalist military situation was made
even more untenable by a reported revolt in Yunnan. Although
apparently settled without bloodshed, the revolt probably is
preliminary to an eventual accommodation between Yunnan
and the Communists. According to late dispatches, the differ-
ences between Chiang Kai-shek and Governor Lu are in process
of amicable negotiation which may defer for some time a
genuine break between the Nationalist Government and the
provincial authorities. The situation in Kunming, capital of
Yunnan, remains quiet but tennse..
Meanwhile, the Communist forces of Chen Yi, advanc-
Ing on the south-central front, reached Amoy bay and are now
within ton miles of Amoy. Communist irregulars are active
in the entire sweep of Kwangbang northeast of Canton and are
within 35 miles of the present Nationalist capital. The regular
Communist forces advancing on Canton, however, restricted
their movements to probing actions along the railway south of
Hengyang. In the far northwest, the forces of Ma Pu -fang
continued their "strategic withdrawals" and reportedly re
linquiahed Hsining, capital of Tsinghai, to the Communists.
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INDOCHINA
Ho's Defiance Recent defiant statements by Ho Chi Minh's
resistance government in Indochina have
virtually eliminated the prospect of Ho's agreeing to a compro-
mise settlement for "independence" within the framework of
the French Union. The Ho regime has flatly denied that Rao Dat
has won more concessions for Vietnam than were embodied
in earlier agreements between Ho and the French. Moreover,
the Ho regime is demanding unqualified independence for Indo-
china, offering no concessions to the French and demanding
none. Meanwhile, Ho's relationship with the Kremlin and the
Chinese Communists remains obscure. His present defiant
stand was at least in part the result of his encouragement over
Communist victories in China, and Ho has stated his willingness
to accept military equipment from the Chinese Communists.
On the other hand, Ho still maintains that neutrality between
the US and the USSR is both possible and desirable, and his
repudiation of the French Union is inconsistent with recent
pleas by Radio Moscow for FE.nco-Vietnamese conciliation
within the Anion.
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Revolt -Suppw essed The revolt staged by the Bolivian
National Revolutto ry Movement
is now virtually ended, with. calm restored in all
but two remote cities in Bolivia's southeastern section.
The Government's success in suppressing the MNR
threat can attributed to failure of Party of the Revo-
lutionary Left (P ) leaders to support the rebels, to
luke warm backing by labor umio, and, most importantly,
to the continued loyalty of the majority of the army.
Although the Government has increased its chances of
survival by gaining this temporary ad .nt.g over the
M NR, the revolt undoubtedly has ag av d ivia 's
serious economic situation, has been a serious setback,.-.
for the Important tin industry, and, as a result of charges
and counter -charges as to foreign intervention, has In .
creased tension among Latin .American nations.
VENEZUELA
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ment among enlisted, personnel of the Venezuelan Army.
Instances o2 army insubordination resulting in officer and
enliasted deaths. have been reported, but thus far no prose
exists of a split in the army. The alerted Government
Junta,, realizing that its a stence is dependelye upon the
unit and discipline of the armed forces, is tap
g progres
lively greater precautionary measures against subversion
and considered capable of handltag the present situation.
activities or the Action Democratiea underground move
Underground Movement An uneasy but not yet critical
sltb. .tion is developing in Vene-
zuela as a. result of reportedly more effective subversive
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WESTERN HEMISPHERE
BOLA
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YUGOSLAV TRADE PATTERN
The rapidity with which the Yugoslav economy is
being oriented toward the West now assures Yugoslavia
of adequate imports of essential commodities and indicates
that Soviet economic sanctions have been a failure as a
weapon to overcome Yugoslavia's intransigence. Although
Yugoslavia's postwar political alignment required a com-
plete integration of the Yugoslav economy with the economies
of the Soviet sphere, economic orientation was neither
advantageous nor natural for Yugoslavia. Aside from non-
ferrous metals, the USSR had little need for such Yugoslav
products as rough timber and foodstuffs. Moreover, eco-
nomic integration was further impeded by the Kremlin's
reluctance to supply Tito with the industrial products which
would have strengthened his ability to resist Soviet domination.
Development of trade with western nations, however,
was a natural and comparatively easy shift to make in the
Yugoslav economy. France, Italy, and western Germany, all
of which can use Yugoslav products as well as offer the
manufactured goods and industrial equipment needed for
Yugoslav industrial expansion, have already signed pacts
increasing their trade with Yugoslavia. Moreover, a billion-
dollar trade agreement between the UK and Yugoslavia cover-
ing the next five years is now pending, and Yugoslav trade
with the US, as now projected, will probably total 30 million
dollars for 1949, approximately 5 times the 1948 level.
The US and the UK are the most important sources of
imports now becoming available to Yugoslavia. The UK can
supply essential industrial equipment and raw materials, such
as crude oil, natural rubber, wool, and tin; the US can supply
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cotton, motor vehicles, and modus. industrial installations.
Both nations,,. moreover, are primary sources for spare
parts for the more than 50 million dollars worth of Ind s
trial and transport equipment supplied to Yugaslavia by
UNRRAO Thus, although Tito may have to forego in the
immediate future part of his ambitious postwar industriali-
zation program for making Yugoslavia more nearly self -
sufffficient, he will find it a relatively simple matter to
orient the Yugoslav economy further toward the West.
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DISTRIBUTION
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1......... The President
2,64....... Secretary of State
3,4b ....... Secretary of Defense
5......... Secretary of the Army
6......... Secretary of the Navy
7......... Secretary of the Air Force
8,70....... Chairman, National Security Resources B card
9,71....... Executive Secretary, National Security Council
10......... Assistant Secretary of the Navy for Air
11,69....... Chief of Staff, US Army
12,13,14..... Chief of Naval Operations
15,16,17..... Chief of Staff, U.S.Air Force
18......... Director of Plans and Qaerations,Ceneral. Staf.f,U.S.A.rrday
19......... Deputy Chief of Staff (Operations) U.S. Air Force
20......... Deputy Chief of Naval Operations (Operations)
21......... Director of Plans and Operations, D.S. Aia- Force
22,23,24..... Special Assistant to Secretary of State for Research
and Intelligence
25,26,27,28,29, Director of Intelligence, General Staff, U.S. Army
30,31,32,33,34.
35,36,37,38,39, Chief of Laval Intelligence
40,41,42,43,44.
45,46,47,48,49. Director of Intelligence, U.S. Air Force
50.......... Director of Security and Intelligence,Atomic Energy Comm.
51......... Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
52,53,54,55,56. Chief, Acquisition & Distribution Division, D,Deptt.Sttate.
57......... Director, Federal Bureau of Investigation
58......... Secretary, joint Chiefs of Staff
59......... Chief, Policy Planning Staff, Department of Sete
60......... Secretary of State(Attention: Chief, Policy Reports S if)
61......... Deputy Director, Joint Intelligence Group, joint Staff
62,63....... Secretary, joint intelligence Group, joint Staff
65......... US Air Force Representative on joint Strategic
Survey Committee
68......... Administrator, Economic Cooperation Administration
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Document No. O
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in Class.
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Class. CA"^, cO: TS
Dot? ., aro , .4 Apr 77
Ruth: DDA PEG. 77 1763,
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Date, 0/-o2- 7 S Y`
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U. S. GOVERNMENT PRINTING OFFICE
2631-S--1948
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