WEEKLY SUMMARY #82

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002300320001-0
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 27, 2016
• Document Release Date: May 21, 2013
• Sequence Number: 1
• Publication Date: December 23, 1949
• Content Type: REPORT

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a WEEKLY SUMMARY
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 Ageney.
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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CONTENTS
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HIGHLIGHTS ..... 0. ..... ..?
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WESTERN EUROPE
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EASTERN EUROPE
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NEAR EAST -AFRICA ....... ...
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FAR EAST ...... ............ ...
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WESTERN HEMISPHERE
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ARTICLES:
The British Economic Position
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Communist Designs on Tibet ....... ?
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HIGHLIGHTS
? In a week during which no major changes occurred
in the situations most directly affecting US security,
even the East-West conflict was marked by nothing
more startling than Premier Stalin's 70th birthday, an
event Soviet propagandists used largely as an excuse
for further outpourings on the now jaded Soviet peace
offensive.
Meanwhile, the difficulties confronting the United
Nations were emphasized both by the obstacles to
implementation of the UN resolution on internation-
ization of Jerusalem in the face of Israeli-Jordan peace
negotiations (see page 8), and by the complexity of the
problems plaguing the UN Commissioner entrusted
with sppervising the establishment of an independent
Libya (see page 1),
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WESTERN EUROPE
FRANCE
Communist Purge The Kremlin's dissatisfaction with
the failure of the French Commu-
nist Party to aggravate social unrest, coupled with the
menace of Titoism within the Party, is leading to an in-
tensification of Party efforts to liquidate Titoists, petty
bourgeois elements, and all those suspected of disloyalty
to the Kremlin. This increasing reliance on "hard-core
Stalinists will reduce the numerical strength of the
French Communist Party as well as its political influence.
There is, however, no prospect of a disintegration of the
Party. It will become even more vigilant in the pursuit
of its political objectives and will remain on the alert to
take advantage of growing labor unrest caused by the
current increase in prices.
AUSTRIA
Labor Unrest The postwar peaceful era in Austrian
labor-management relations appears
to be ending. The steady rise in prices Which has inten-
sified the disparity between wages and prices is primarily
responsible for the current trend toward abandonment
of wage settlements on a national basis and a return to
bargaining between individual unions and their employes.
Such a trend will result not only in an increase in strikes
but in strengthening the Communist potential for foment-
ing labor unrest.
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GERMANY
East-West Relations The USSR, by transferring to
the German Democratic Repub-
lic an increasing measure of jurisdiction over technical
questions affecting relations with West Germany, may
be attempting to force the Western Powers to grant
de facto recognition to the Eastern regime. This action,
however' does not suggest that the Kremlin is making
immediate plans for using the German Democratic Re-
public to threaten seriously Western access to Berlin.
Since the formation of the German Democratic Republic
and the transformation of the Soviet Military Administra-
tion into the Soviet Control Commission, Soviet authorities
have avoided direct contact with the Western Powers on
interzonal questions of a technical nature, referring them
either directly to German officials or through Allied Con-
trol Authority (ACA) liaison channels to the Soviet Control
Commission. This careful disassociation of the Soviet
Control Commission from the direct contact with Western
representatives formerly maintained by the Soviet Military
Administration may be in preparation for abandonment of
the ACA liaison channel, in an attempt to force the West-
ern Powers to deal directly with the German Democratic
Republic on interzonal questions.
East Zone Regime In its continuing efforts to trans-
form the German Democratic
Republic into an ostensibly independent regime which
will be a reliable instrument for maintaining Soviet con-
trol, the USSR has effected several changes in the rela-
tionship between Soviet and German authorities, as well
as between reliable Communist and fellow-traveling
German officials. Instead of exercising direct control
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GERMANY
through the Soviet Military Administration, the USSR now
controls Eastern Germany indirectly, though just as effec-
tively, through the Soviet Control Commission, which has
"supervisory" powers over the policies and actions of -
the German Democratic Republic. This supervisory power
is sufficient to insure Soviet control because reliable Com-
munists occupy all important government positions and
these officials are fully aware that they can retain their
positions only as long as they carry out Soviet policies.
Meanwhile, although the USSR is ttking steps to further
diminish the role in the new Republic of fellow travelers
such as former Socialists and Soviet sympathizers in the
Christian Democratic Union and the Liberal Democratic
Party, these non-Communist parties will probably be
allowed to continue their shadowy existence for some time.
Despite these changes, however, the USSR has not yet suc-
ceeded in achieving its goal of transforming the German
Democratic Republic into a control mechanism which no
longer needs to depend in the final analysis upon the pre-
sence of Soviet troops.
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EASTERN EUROPE
BULGARIA
Soviet Problems The liquidation of Traicho Kostov, fol-
lowing a full-fledged propaganda trial
designed to impress on the Bulgarian people the danger of
defying Soviet directives, has not solved all the Kremlin's
problems with regard to Bulgaria, Kostov's denial of his
guilt and his declaration that he had been trying to protect
the economic interests of his country found a receptive
Bulgarian audience and may encourage other nationalists
within the Bulgarian Communist Party to a passive defense
against Soviet encroachment, Meanwhile, the Government
has been forced to admit that the first year of its current
Five Year Plan has been a failure. With a breakdown al-
ready apparent in the goals for rail and auto transportation
and electric power production, the Government is now taking
steps to reorganize its entire agrarian administrative ma-
chinery in an attempt to correct weakness in the planning
and implementation of its agrarian program. -These economic
difficulties, coupled with continuing nationalist tendencies
in the Bulgarian Communist Party, will probably result
in more direct and widespread Soviet control over the Bul-
garian Government. The number of Soviet personnel in the
Ministries of Transportation and Electric Power Produc-
tion has already increased and is now being augmented in
the Ministries of Interior and Commerce.
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HUNGARY
Power Shift A shift in Hungary's Communist Party
leadership and a tightening of direct
Soviet control may be foreshadowed by a recent govern-
mental reorganization, which greatly increased the
power of the State Control Commission and placed it
under the Peoples' Economic Council instead of the
Prime Ministry. This important instrument of control
has thus been taken from Deputy Prime Minister Rakosi
and given to his principal contender for leadership of
the Communist Party, Erno Gero. Gero now has a conven-
-lent instrument, if he chooses to use it, for eliminating
Rakosi's following as a preliminary to the liquidation of
Rakosi himself.
GREECE
Papagos' Plans The possibility that Field Marshal
Papagos might enter the political
arena is currently causing new flurries of uneasiness
among established party leaders. Hitherto concerned
lest the highly popular Commander in Chief be drafted
to head an interim "service government" before nation-
al elections, the regular political leadership is now fearful
that Papagos might actually run for parliament next
springna move which, in view of his great prestige,
might well make him an overwhelming choice for an ex-
tended term as premier. These fears have been stimu-
lated by indications that the King and other close friends
of Papagos are urging him to run in order to assure
Greece of having a strong, stable post-election govern-
ment.
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0 GREECE
0 That Papagos will run is still far from certain;
approaching the age for retirement, not in the best of?
health, and lacking in zest for the hurly-burly of politics,
fl he personally would probably like to return to the posi-
tion of Grand Marshal in the royal court now that his
military career has been crowned with such outstanding
success. Until his intentions become clear, however, the
major parties will tend to close ranks against him, while
the smaller parties will be haunted by fear of being on the
Li wrong bandwagon.
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NEAR EAST - AFRICA
Israeli-Jordan Talks Israel and Jordan, in their com-
mon opposition to the UN resolu-
tion favoring the internationalization of Jerusalem, may
possibly conclude a "peace treaty." Israel has agreed
in principle to give Jordan full sovereignty over a corri-
dor to the Mediterranean and free transit along the
Jerusalem-Bethlehem road. For its part, Jordan is
apparently prepared in principle to grant Israel access
to the potash works at the northern end of the Dead Sea,
to the Rutenburg hydroelectric plant east of the Jordan,
and to the Mt. Scopus area in Jerusalem.
In Jewish-Arab relations, however, there is a
great difference between agreement in principle and
settlement in detail. The problem of agreeing on the
frontier between Israel and Jordan in Jerusalem alone
has confounded Jewish and Arab negotiators for many
months. The issue of compensation for Arab properties
now held by Israel is also extremely complicated and
probably cannot be settled quickly. Furthermore, neither
country is likely to commit itself on definitive frontiers
until it knows the attitude of the UK toward extending
to Arab Palestine its obligations under the UK-Jordan
Mutual Defense Treaty, Finally, Jordan may still be
hesitant to exchange diplomatic representatives with
Israel so long as the attitude of the other Arab states
toward Israel remains so antagonistic.
Notwithstanding these problems of detail, which
may well be pigeonholed as "unfinished business," sev-
eral factors favor the conclusion of an Israeli-Jordan
treaty. Both countries recognize that a treaty would
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serve their interests by providing the UN with formal
grounds for modifying its present position on Jerusalem.
Even now, the Trusteeship Council is faced with the
dilemma of whether to expend its energies working on
a theoretically ideal plan which cannot be implemented
or whether to recommend a watered-down version of
internationalization acceptable to both Israel and Jordan.
A treaty, even if it leaves many problems unresolved,
might also lay the groundwork for a general improve-
ment in Israeli-Arab relations, a development which
both Israel and Jordan appear sincerely to desire.
LIBYA
Administrative Problems The wisdom of Solomon
and the patience of Job
will be required of the newly appointed UN Commis-
sioner for Libya. In his task of supervising the estab-
lishment of an "independent and sovereign" Libyan
state within two years, he must not only reconcile the
diversities of interest among the Libyans themselves
but must also cope with the complicated administra-
tive machinery which has been set up. Concerning the
day-to-day business of government, he will have to deal
with three different administrations, each with its own
currency: those of the British in Cyrenaica and Tri-
politania and that of the French in the Fezzan. In setting
up central government functions, he must cope not only
with a native National Assembly but with an Advisory
? Council on which France, Italy, Egypt, Pakistan, the UK,
and the US--as well as Libyans--are represented.
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LIBYA
There is little doubt that the Arab penchant for
intrigue, Italian hopes of regaining a new foothold in Tri-
politania, the British desire for a treaty with Cyrenaica,
the French lack of enthusiasm for the whole idea of inde-
pendence, and the minorities' fears of being overlooked
will all be refledted in that unwieldy body of advisors to
the advisor. These factors, together with the open hostility
of the present administrators to interference with their
authority, will do little to assist the Commissioner in
accomplishing his work, especially in a country which is
economically undeveloped and politically immature and in
which the population, ethnically and culturally diverse,
is in agreement on little more than the vague goal of
? "independence."
SYRIA
Army Revolt The recent Syrian Army revolt against
Chief of Staff Hitmawi, leader of a previous
army uprising last August, a.pparently had both military
and political origins. In part, the coup, led by Colonel
Adeb Shishakli, grew out of the factionalism which has
rent the army since General Zaim's seizure of power last
March. Of apparently equal importance, however, was the
opposition of the Shishakli group to the Syro-Iraqi union
scheme, which Hinnawi was suspected of trying to force
on the government. In fact, the immediate cause of the
coup was evidently the fear that the Syrian Constituent
Assembly, in refusing last Sunday to include a pledge of
loyalty to the republican form of government as part of the
Chief of States oath of office, was moving toward Syrian
adherence to the Kingdom of Iraq. Although Shishakli has
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SYRIA
not intervened directly in civilian affairs, his action
re-emphasizes the role of the military as a disturbing,
if not a controlling, element in Syrian political affairs.
Even if the situation now quiets down, the coup re-
presents a setback for the government's recent attempts
to re-establish civilian controls and to restore political
stability in Syria.
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FAR EAST
CHINA
Mao in Moscow One result of Mao Tse-Tung's visit
to Moscow will probably be the con-
clusion of a Treaty of Mutual Assistance and Friendship
between the USSR and the Chinese Communist Govern-
ment This treaty, augmenting the Sino-Soviet Pact of
1945 to which the Chinese Communists have already given
their stamp of approval, will probably provide for:
(1) economic and technical assistance by the USSR along
lines already developing in China, as well as an expan-
sion of cultural relations; and (2) secret military pro-
tocols providing for cooperation between the armed
forces of the two countries and the joint use and devel-
opment of Chinese military facilities, particularly air
bases. The presence of outstanding Politl3uro members
Molotov, Malenkov, and Bulganin at the meeting between
Stalin and Mao suggests that other important matters
were discussed. In all likelihood, both Stalin and Mao
saw in this visit an opportunity to re-examine questions
likely to become increasingly urgent in the near future,
such as: (1) Western diplomatic recognition and trade;
(2) the Japanese peace treaty; (3) further Communist
penetration of Central and Southeast Asia; and (4) the
extent of Soviet-Chinese cooperation in Manchuria, Sin-
kiang, and possibly China proper.
Treaty Policy Although the Chinese Communists have
stated that they will examine Nationalist
treaties individually and then repudiate or accept each
according to its merits, there is little likelihood that
they will actually take a rational view of the merits of
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CHINA
treaties with the West. The Chinese Communist regime
is severely restricted in its interpretation of treaties
by the necessity of accepting special agreements with
the USSR, while at the same time condemning similar
agreements made by the Nationalists with Western powers.
Moreover, recent information from Peking indicates that
the Communists are probably ignorant of a large part of
their inherited treaty obligations, and are apparently
convinced that all Nationalist treaties contain provisions
betraying Chinese interests. Even if such clauses do
not appear in the text of the treaties, the Communists
will probably still believe that the suspected "betrayals"
are contained in secret protocols.
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WESTERN HEMISPHERE
CHILE
Communist Plotting Reported Communist plans to
celebrate a "bloody Christmas"
by extensive rioting have caused concern to Chilean
authorities but are not believed to be an immediate
threat to the stability of the Chilean Government. Re-
cent disturbances and open Communist threats do in-
dicate, however, that the Communists still have the
ability to exploit favorable opportunities to create
trouble. Popular discontent over economic conditions
in Chile and the increased prices resulting from a new
Government foreign exchange policy have provided a
situation increasingly favorable to Communist-inspired
disturbances. It appears, however, that although the
well-advertised plans for holiday disturbances may
develop on a relatively minor scale, the government
will probably not be in any real danger for several
months.
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THE BRITISH ECONOMIC POSITION
The Labor Government apparently now intends to
"coast through" the coming pre-election months in the hope
that, with the immediate drain of gold and dollar reserves
reversed, moderate measures will keep economic forces
under control. Although there is? reasonable justification
for the Government's hope for the next few months, the
long-term prospects remain uncertain, and another finan-
cial crisis will probably occur by mid-summer of 1950
unless additional preventive measures are taken.
With the exception of the continuing visible gap
between dollar sales and dollar purchases, the general
trade and production position of Britain is improved some
Sales to the US and to Canada rose sharply during
October and November, but the net yield in dollars to the
UK has shown little change largely because of the reduced
dollar yield per unit of sale. The total value of imports
through October and November increased at a slightly
slower pace than exports, however, leaving the adverse
visible balance of trade at 35.1 million pounds; this is
the lowest point since March of 1949. The September
index of over-all industrial production, which was 6.4
percent above September 1948, reflects increased produc-
tivity since there has been no appreciable gain in the labor
force during the past year.
British gold and dollar reserves have continued
to rise since the initial $84 million inflow between deval-
uation on 18 September and the end of that month when they
totalled $1,404 million. Food and raw material stocks in-
creased by 100 million pounds during the six months ending
30 September, reducing import needs for the near term.
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The General Council of the Trades Union Congress
called upon all affiliated unions to hold wage rates at pre-
sent levels until January 1951, provided the retail price
index stays between 106 and 118. However, the retail
price index, which remained at the September level of 112
during October, may-rise above 118 by mid-summer of
1950. The wholesales price index rose 2.8 percent during
October and another 1.3 during November.
Attention in the coming months will continue to
be focused upon the degree of success attained in building
up gold and dollar reserves and in narrowing the gap between
dollar sales and dollar purchases. Any increase in dollar
exports may not show up for several months. Import prices
adversely affecting the domestic cost of living will continue
to cause concern. Anxiety over losses of dollar earnings
to third countries will grow as long as "transferable
sterling discount rates continue to widen. The problem
of the sterling balances will be widely discussed and the
Government will be urged to re-examine its policy of re-
leases against them. The Government, in the hope of
reversing the recently increased rate of withdrawals from
national savings, will continue to exhort;the British people
to increase their savings.
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COMMUNIST DESIGNS ON TIBET
The announced intention of the Chinese Commu-
nists to assume control over Tibet, coupled with growing
Soviet propaganda interest in that country, suggests that
this strongly anti-Communist area, the last on the Chinese
mainland, will be subjected to intensified Communist pres-
sures, possibly culminating in a military expedition to
Lhasa in mid-1950.
Though nominally part of China since the eighth
century, Tibet has enjoyed virtual independence during
most of the intervening years. The Tibetans, opposed to
foreign domination, have seized the opportunity offered
them by the disintegration of Nationalist China to seek
again complete independence from China; they also realize
that their theocratic government cannot survive under
Communist control. The Chinese Communists appear
anxious to control Tibet, because the establishment of
an independent non-Communist state there would be dam-
aging to the prestige of the new Communist regime in
China. A Communist Tibet would provide additional,
though limited, opportunities for Communist infiltration
into India and the border states of Nepal and Bhutan, while
neutralizing Tibet as a potential base for anti-Commiutist
activities. Tibet would, however, contribute little to the
economic or military potential of either China or the USSR.
The Tibetans, acutely aware of the Communist threat,
have announced their intention to resist a Communist in-
vasion, requested extensive US aid, and urged the US and
UK to support their bid for UN membership. India, mean-
while, recognizes the dangers of Communist expansion
in this direction, but is in no position to offer Tibet any
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significant military or economic assistance, and fears
that the extension of aid might simply result in an ac-
celeration of a Chinese Communist advance into Tibet.
Although the UK retains its concern about Tibet, it too
Is unable to offer substantial aid.
Initially, the Chinese Communists will probably
confine their anti-Tibetan activity to political penetra-
tion and subversion, concentrating primarily on exploit-
ing the pro-Chinese Panchen Lama, now in Communist
hands, and on wooing those peripheral monasteries which
resent the pro-British leanings of the Lhasa authorities.
By mid-1950, however, the Coinmunists may feel im-
pelled to attempt the military occupation of Lhasa. Al-
though a military expedition could probably reach this
center of Lamaism and establish Communist control in
Tibet, such an operation would involve immense logistic
problems deriving from the country's poverty and inac-
cessibility. Tibetan troops, however, now numbering
approximately 10,000, are inadequately supplied and
lack knowledge in the use of modern demolition materials
and techniques for mountain warfare; therefore, they are
considered capable of little more than guerrilla resistance.
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2,64. . .
3,4
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12,13,14.
15,16,17.
18.
19
20
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22,23,24.
.. *ea
epee e
25,26,27,28,29,
30,31,32,33,34.
35,36,37,38,39,
40,41,42,43,44,
45,46947,48,490
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51
52,53,54,55,56,.
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60 ?
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62,63 .. ...
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The President
Secretary of State
Secretary of Defense
Secretary of the Army
Secretary of the Navy
Secretary of the Air Force
Chairman, National Security Resources Board
Executive Secretary, National Security Council
Assistant Secretary of the Navy for Air
Chief of Staff, US Army
Chief of Naval Operations
Chief of Staff, US Air Force
Director of Plans and Operations, Gen. Staff, US Army
Deputy Chief of Staff (Operations) US Air Force
Deputy Chief of Naval Operations (Operations)
Director of Plans and Operations, US Air Force
Special Assistant to the Secretary of State for
Research and Intelligence
Director of Intelligence, General Staff, US Army
Director of Naval Intelligence
Director of Intelligence, US Air Force
Director of Intelligence, Atomic Energy Commission
Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
Chief, Acquisition & Distribution Div. OCD, State
Director, Federal Bureau of Investigation
Secretary, Joint Chiefs of Staff
Chief, Policy Planning Staff, Department of State
Secretary of State (Attention: Policy Reports Staff)
Deputy Director, joint Intelligence Group, Joint Staff
Secretary, Joint Intelligence Group, Joint Staff
US Air Force Representative on joint Strategic
Survey. Committee
Administrator, Economic Cooperation Administration'
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300320001-0
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Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300320001-0
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Document No.
NO ?NOCE in Class. 0
eSECLASSIFIED
Class. CI-10GED TO: TS S
DDA.Mmo, 4 Apr 77
Auth:
Date: 3k...-tat,_ BY:
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Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300320001-0
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300320001-0
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U. s GOVERNMENT PRINTING OFFICE
263I-S-1948
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300320001-0