WEEKLY SUMMARY #87

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002300270001-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 23, 2016
• Document Release Date: May 22, 2013
• Sequence Number: 1
• Publication Date: January 27, 1950
• Content Type: REPORT

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WEEKLY SUMMARY
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Number 8?
27 JAN1950(
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Date: 3t 4fl6 BY.
CENTRAL INTELLIGENCE AGENCY
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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.
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.
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Page
HIGHLIGHTS ......................... 1
WESTERN EUROPE .................. 2
EASTERN EUROPE .................. 5
NEAR EAST-AFRICA................. 9
FAR EAST ........ ......... ...... 10
ARTICLE
French Agricultural Prospects ............... 14
SECRET
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 Developments in Europe during the week indicated
a marked stiffening in the Soviet attitude toward the
Western Powers, Soviet interference with German truck
and barge traffic to and from Berlin suggests a renewal
of Soviet efforts to undermine the position of the Western
Powers there (see page 2); Soviet actions in Austria reveal
that the USSR is still reluctant to conclude an Austria treaty
(see page 4); and apparent Soviet willingness to permit a
break in US-Bulgarian diplomatic relations foreshadows an
intensification of Soviet efforts to seal off the Satellites from
contact with the West (see page 8).
In the Far East, scattered fighting in Indonesia may reach
serious proportions unless the Indonesian Army can find a
satisfactory formula for absorbing troops of the former Royal
Netherlands Indies Army, many of whom are deserting and
joining dissident groups such as those under ex-Dutch army
officer Westerling (see page 13). Meanwhile, the Chinese
Communists have made it clear that they will give all possible
support short of armed invasion to the resistance forces of
Ho Chi Minh in Indochina (see page 10).
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SECRET
Berlin "Blockade" Current Soviet interference with
German.truck and barge traffic, to
and from Berlin is unlikely to lead to a reimposition of
the Berlin blockade, but may well foreshadow further
harassing tactics as part of an intensified Soviet effort to
undermine the position of the Western Powers in Berlin.
.The latest series of Soviet interferences began before
US seizure of the Reichsbahn administration building' in
.West Berlin and consequently appear to be a previously
planned move and thus not wholly in retaliation for the
.Reichsbahn affair. The present. Soviet actions, which
have not been aimed at blocking the Western Povmrs'
access to Berlin, are probably intended primarily to
obstruct economic rehabilitation of West Berlin and to
bring about "conditions of pauperism" deemed neces-
sary to gain the support of labor in Western Berlin for
a Communist-dominated national front.
Cabinet Maneuvers The new Italian Cabinet now
being formed by Premier.
De Gasperi, following an unexpectedly protracted period
of negotiation and inter-party bickering, will continue
the basic policies of the preceding coalition. However,
the absence of the conservative Liberal Party and the con-
tinued participation of- the reform-minded Republicans-and So-
cialists in the new Cabinet will place full responsibility. on the
majority Christian Democrats for any delays in fulfilling
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 ft
their campaign pledges for agrarian and fiscal reform.
Meanwhile, the Christian Democrats, who have been
sharply divided over the timing and extent of socio-
economic reform measures, have apparently made little
progress toward reaching agreement during the past
few weeks of negotiations. In any event, the, formation
of a new Cabinet by Premier De Gasperi will have little
effect in speeding parliamentary action on the government's
legislative proposals.
Police Tactics The continuing tendency of the Italian
police to concentrate, upon violent
suppression of public disorders while neglecting correct-
ive measures designed to promote general respect for
law ahti order may bring discredit and embarrassment
to the Government, The indiscriminate and often ill-
timed use of force by the police may be explained, in part,
by the fact that most of the police were trained in the Fascist
army and police system. Moreover, prior to the elections
of 1948, which indicated that the strength of the Communists
was waning, the police were necessarily concerned primarily
with developing their strength and tactics to meet the threat
of Communist revolutionary action. The police; who are
now capable of controlling any violent efforts that might be
launched by the Communists, seem to be missing the
opportunity to develop a program for prompting respect and
general support for law and order. Police Chief D'Antoni,
formerly police chief in the largest center of Communist
strength when force was the essential weapon against the
Communists, continues to concentrate on the use of com-
bative action to the neglect of administration, organization,
and political intelligence. Interior Minister Scelba tries to
direct all phases of police activity personally, instead of
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 SECRET
dealing through responsible subordinates, and seems to be-
lieve that only physical force can inspire respect from
extremist elements. Continued arbitraryor irresponsible
conduct by the police might intimidate extremist. groups
but would eventually lose the police and the Government
the respect and cooperation of most Italians.
Treaty Prospects Coincident with a stiffer Soviet atti-
tude in Berlin, the USSR appears un-
willing to conclude an Austrian treaty. The USSR may
estimate that: (1) the draft treaty will not create conditions
likely to compromise Austrian independence and lead to
Soviet domination; (2) Tito and anti-Soviet resistance in
general would be encouraged by Soviet agreement to end
the occupation of Austria; and (3) the over-all Soviet power
position has improved and future advantages may result
from continued occupation of eastern Austria. Meanwhile,
the USSR, in addition to continuing to obtain economic gains
from its occupation, may step up its efforts to negotiate a
bilateral agreement with the Austrian Government which
would increase Soviet influence over the Austrian economy.
The USSR may also attempt to undermine the authority of
.the Austrian Government in the Soviet Zone. In addition, the
USSR may take advantage of any weakening of general Western
strength to exert pressure on the vulnerable Western position
in Vienna. The USSR, however, is not likely in the near future
to take steps which would lead to partitioning of the country or
to incur the risk of war by imposing a blockade of Vienna.
SECRET
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 r
Increased Espionage Yugoslav-Cominform relations are
currently being acerbated by an
increase in espionage activities by both protagonists. The
thoroughness of the break between Yugoslavia and its erst-
while partners is forcing both parties to rely on covert
methods to keep informed of developments inimical to their
respective interests. This intensified espionage activity is
reflected, in; (1) the repent Yugoslav trial of -ten Albanian spies;
(2) a Bulgarian public appeal for more "information" con-
cerning Yugoslavia; (3) the pending trial of 64 Yugoslav spies
in Bulgaria; and (4) reported orders to Cominform agents in
Trieste to concentrate on espionage rather than subversion
and sabotage within Yugoslavia, Although the Cominform
espionage campaign will have little effect in bringing Tito
to terms, it will serve to keep the conflict alive and to main-
tain pressure on Tito while at the same time distracting
public attention from questions of Communist ideology and.
nationalist deviation. Propaganda exchanges on these ques -
tions have in the past often. embarrassed the USSR by em- .
phasizing the threat to nationalist aspirations implicit in
the Moscow -dominated Communist movement,
Copper Imports The difficulty of denying strategic materials
to the Soviet Satellites is illustrated by
the ease with which Czechoslovakia obtained necessary copper
supplies after losing one of its primary sources when Tito
split with the Kremlin. During 1949, Western countries are
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 estimated to have provided 34,000 of the 50,000 tons of
copper needed to maintain. Czechoslovak industrial activity.
Principal suppliers were Chile and Mexico; other suppliers
included Belgium, the Netherlands, and the UK, with some
shipments coming from "Occupied Japan."
Economic Progress Although economic progress in Finland
since World War 11 has been rapid and
production has equaled or surpassed prewar levels, Finland's
economy for the present remains vulnerable to Soviet pressure.
Copper production has increased 200 percent over 1938, while
other none-ferrous metals, such as lead, zinc ores, and pyrites,
are produced, in. sufficient quantities to permit exports. Rail-
road transport has exceeded 1938 traffic levels by 15 percent,
and water traffic is equal to that of the prewar period. Labor
force and productivity have attained prewar standards and are
on the increase. Electric power production continues to rise
and is currently meeting requirements. Finland, however,
still depends upon the Soviet orbit for vital grain and fuel, and
a large share of Finland's total foreign trade is with the USSR
and its Satellites. The USSR, therefore, is'still in a position
to exert economic pressure on Finland and could cause con-
siderable damage to Finland's foreign trade by underselling
timber producth in the world market. Although Finland is
now in a better position to withstand such pressure, orienta-
tion of Finland's trade toward the West is unlikely in the near
future and in the long run will depend to some extent upon
Finland's success in obtaining liberal credits and trade terms
from Western nations.
M
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 n.
Election Preliminaries Preparations for the Greek
national elections appear to be
taking a normal course under the administration of the new
Theotokis "service" government. Despite initial fear that
the interim regime might prove a vehicle for palace inter=
vention and the entry of Marshal Papagos into politics,
Theotokis is apparently carrying out his pledge of a free
electoral atmosphere. Restrictions on civil liberties imposed
during the guerrilla campaign have been relaxed; the armed
forces, police, and gendarmerie have been given firm orders
against interference with the campaigning; and efforts are
being made to forestall disruptive incidents by Communist
guerrillas or armed rightists.
Meanwhile, electoral prospects of the two major parties
have lessened, notably as a result of the emergence of: (1)
an extreme rightist bloc which may attract followers away
from the plurality Populists; and (2) a new left-of-center
group under General Plastiras which may lure away leftist
elements of the Liberal Party following. The Liberals and
Populists also stand to lose by the postponement of the voting
from 19 February to 5 March, which gives their numerous
less -established rivals additional time to organize. Thus the
post-election Parliament will probably be characterized by
numerous small combinations that will wield important
balance -of -power influence and may be in a position to
hamstring effective parliamentary government.
 US Relations Bulgaria's demand for the withdrawal of
the US Minister, coupled with evidence
that US missions in some of the other Satellites may also
soon be linked with deviation and espionage trials, reflects
a marked intensification of Soviet efforts to seal off the
Satellites from Western contact, As the Satellites become
less valuable as agents for obtaining strategic materials
from the West, the USSR may increasingly feel that main-
tenance of US-Satellite diplomatic relations is less important
than overcoming the serious obstacle to complete consolida-
tion of Soviet control of the Satellites represented by re-
maining US influence, Moreover, in the case of Bulgaria,
Rumania, and Hungary, the USSR may be ready to expel US
personnel in order to prepare further anti-Tito operations.
Although anti-US moves will undoubtedly increase in Poland
and Czechoslovakia, the USSR. may move more slowly toward
forcing a break in relations between the US and these Satellites,
which not only are members of the UN but still have more
exploitable trade and diplomatic channels with the West than
do the other Satellites,
ri
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 Ital.-Ethiopian Relations Recent progress toward Italian-
Ethiopian agreement on East
African issues may lead to a general rapprochement between
the two countries. With the object of inducing a relaxation of
Ethiopian opposition to Italian trusteeship over Somaliland, the
Italians are considering an approach to Ethiopia expressing
Italy's desire to reach a general agreement recognizing
Ethiopia's racial and economic interests in Eritrea and limiting
Italy's concern to the protection of the legitimate. rights and
interests of Italian residents of the territory. Such a step would
presumably imply withdrawal of Italian support for Eritrean
independence, thus paving the way for award of Eastern Eritrea
in some manner to Ethiopia by the next General Assembly; Mean-
while, tension over Somaliland is being reduced by British accep-
tance of Ethiopia's request for withdrawal from the disputed
Ogaden area and by Italian acceptance of the frontier proposed
by Ethiopia as a provisional administrative boundary. Although
political considerations will prevent a public agreement at this
time, an atmosphere has been created which is conducive to the
development of better Italo-Ethiopian relations and which can
lead to an East African settlement favorable to US interests,
11 4.:
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 Chinese Support Recent Chinese Communist recognition
of Ho Chi Minh's regime as the de jure
government of Vietnam, in addition to confirming the inten-
tion of the Chinese Communists to make good their promise
.of "moral and material aid wherever possible" to pro-Com-
munist movements throughout Southeast Asia, indicates that
the Peiping regime regards Indochina as the most immediately
exploitable of the Southeast Asian countries and hence a
priority target. An invasion of Indochina by Chinese Commu-
nist armies, however, is unlikely at. this time. The "anti-
colonial revolution" there is proceeding precisely in accord
with orthodox formulae: a Communist-dominated united
front, controlling a "national liberation" army, is driving
out Western "imperialists" and has the strong psychological
support of. Chinese Communist armies just across the border.
.Moreover., the Chinese Communists are now in a position to
provide Ho. Chi Minh's forces with sufficient assistance in
.the form of material equipment, organizers, and technicians
.to cancel the present material advantage enjoyed by the
French.
JAPAN
Socialist Split The recent withdrawal of rightwing elements
from the Japanese Socialist Party, caused by
increasing dissatisfaction over leftwing control of important
Party posts and the leftwing policy of supporting "working-
class" interests, has weakened Japan's potential "Third Force"
and strengthened Conservative control over the government.
Under leftist leadership, the Socialist Party has made progress
toward regaining trade union support, promoting anti'-Communist
SECRET
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JrMlimr 1
JAPAN
trade union "Democratization Leagues," and winning
majority control of the General Confederation of Labor,
.The split, however, will further postpone steps toward
.the merger of non-Communist trade unions.
Aid Withdrawal Reaction to the defeat of the Korean
Aid Bill in the US House'of Representa-
tives has been restrained and general comment reflects
the belief that the US will still, provide economic support
for the Republic of Korea. President Rhee's initial
.response to the news was one of shock, followed by ex-
pressions=of disbelief. Although National Assembly
members showed dismay and demanded explanations,
Pr me Minister Lee assured them that commodities now
en route or waiting shipment would continue to arrive for
some time; he pointed out. that the 1951 appropriation was
not jeopardized. Two results of the defeat of the Korean
Aid Bill may be: (1) some reduction of public support
for the Rhee Government because of increased uncertainty
regarding Korea's role in long-range US defense plans;
and (2) a more determined effort by the Government to
improve administration of the Korean. economy.
Pro-US Policy A new Australian foreign policy, emphasiz-
ing closer cooperation with the US and
constituting a bid for economic leadership in Southeast Asia,
appears to be one of the more pronounced features of the
newly-installed Liberal-Country Party Government, Minister
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 AUSTRALIA
for External Affairs Percy Spender is a personal advocate
.of stronger ties between Australia and the US. He has
indicated interest in the early conclusion of suspended US-
Australian . treaty negotiations, believes that security in
the Pacific. depends upon the US, and has promised Austral-
ian support for any US move to obtain Pacific bases.
Spender has emphasized Australia's willingness to assist
in strengthening the economy of Southeast Asia as a means
of combating Communism and hopes the US will support
Asian self-help measures. Spender was in. large measure
responsible for the action taken at the recent Colombo Con-
ference recommending Commonwealth consideration of
financial assistance for productive purposes in Southeast
Asia and a general study of proposals for the economic
development of the region.
Control Problems Recent violent attacks in the Chinese
Communist press on the performance
of Communist cadres in east and central China reflect the
acute shortage of trained political workers capable of
gaining grass-root support for the Peiping regime in the
newly won territories. Now that victory has been won, the
problem facing the Communists in gaining rural support
in these areas, in comparison with North China, is further
complicated by the absence of former incentives to win.over
the peasantry in the struggle to overthrow the Nationalist
regime. Moreover, the Communists have been shifting
their emphasis from agrarian reform to urban industrial-
ization. The present trend indicates that the Communists'
revolutionary peasant program may bog down seriously
throughout China and that the recently "liberated" rural
areas will remain unstable for some time to come.
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 0
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INDONESIA
Violence Increases Fighting between the Indonesian
Federal Army and various rebel
groups may reach serious proportions throughout Indo-
nesia unless a satisfactory formula is found for demobiliz-
ing the Royal Netherlands Indies Army (KNIL), which.was
comprised largely of Indonesians of Ambonese origin. The
Westerling affair in West Java is symptomatic of the violence
which has occurred in widely separated areas following the
failure of all attempts to absorb approximately 58,000 KNIL
troops into the new Federal Army. The war-developed ani-
mosity between KNIL and Republican troops, coupled with
failure to grant KNIL officers any top positions in the Federal
Army, has slowed the amalgamation. process and opened the
way for widespread desertions. Many deserters have joined
Westerling's forces and the danger exists that Westerling may
be able to coordinate his efforts with other dissident groups..
Such a development would require the utmost cooperation
between Dutch and Indonesians in order to avert a major.
crisis.
Pi
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Over-all expansion of French agricultural production,
a major goal of the European recovery program for Western
Europe, is not being realized, and total output in 1950 is
not likely to be appreciably larger than in 1949 (production
for 1949 is estimated to be approximately 97 percent of
the 1934-38 average). Under initial European recovery
program plans, the French were expected in 1952-53 to
have increased production sufficiently to become virtually
self-sufficient in regard to food and also to have become
the largest exporters of foodstuffs in Western Europe, thus
reducing Western Europe's dollar imports.
The anticipated failure of France to expand over-all
agricultural production during 1950 will probably be caused
largely by lack of decisive action by the government and
particularly by its failure to provide adequate incentives for
farmers who are discouraged by the present disparity be-
tween farm and industrial prices. The government has
allocated only one-eighth (about $140 million) of its total
investment budget for agricultural purposes and has failed
to apply any of this fund directly toward lowering production
costs or raising output. Moreover, the probable decline in
the government's influence over industrial prices during
1950 may permit an increase in the present disparity be-
tween farm and industrial prices. Although the use of tractors,
high-yielding seed, and other modern techniques will increase
_i11 ing 1950, achievement of French agricultural' production
goals will continue to be hampered because: (1) total tillable
land will probably remain more than 10 percent below the
1934-38 averagei (2) the use of fertilizers will fall far short
of planned goals; and (3) farmers will be discouraged from
hiring additional laborers,
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SECRET
11
1......... The President
2,64, . , . . . . Secretary of State .
3,4... ... 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 Board
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, US Air Force
18......... Director of Plans and Operations,Gen.Staff,US Army
19......... Deputy Chief of Staff (Operations), US Air Force
20.... . .... Deputy Chief of Naval Operations (Operations)
21.. . ...... Director of Plans and Operations, US Air Force
22,23,24..... Special Assistant, Intelligence, Department of State
25,26;27,28,29,
30,31,32,33,34, Director of Intelligence, General Staff, US Army
35,36,37,38,39,
40,41,42,43,44,, Director of Naval, Intelligence
45,46,47,48,49,72,
73,74,75. Director of Intelligence, Headquarters, USAF
50...........Director of Intelligence, Atomic Energy Commission
51... , .... , Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
52,53,54,55,56. Chief, Acquisition & Distribution Div.,OCD, State
57......... Director, Federal Bureau of Investigation
58 ..... . ... Secretary, Joint Chiefs of Staff
59.... . . Chief, Policy Planning Staff, Department of State
60. ....... Secretary of State (Attention: Policy Reports Staff)
61..... , . . Deputy Director for Intelligence, The Joint Staff
62,63....... Secretary, Joint Intelligence Group, Joint Staff
65......... US Air Force Representative of Joint Strategic
Survey Committee
68......... Administrator, Economic Cooperation Administration.
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 Docume'?t iJo.
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U. S. GOVERNMENT PRINTING OFFICE
2671-S-1848
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