WEEKLY INTELLIGENCE SUMMARY NO. 37

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A005000010037-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 27, 2016
• Document Release Date: April 24, 2013
• Sequence Number: 37
• Publication Date: November 9, 1948
• Content Type: REPORT

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- SE~ET
~ ~! OFFICE OP RII'6&TS AND ESTI6IATES
K THAN$PORTATION GROUP
O ~.
~p,? ~~~~~(9 November 1948
SECTION I. SOldk[ARY OF TRP3v*DS AND DE9ELOPESEOTS
? Direot Soviet support of the Israeli military potential, in definace
of the United Nations truce resolution, is oatogorically charged by a
fa mer member of the Israeli Air Transport Comrdand in statements to Dr,
Bunehe sad to the preens The air transport of arras into Palestine has
appeared to bo organi'zationally oeritered in Pragues Several agencies of
the Czechoslovak Goverrunent have boon implicated and ooordinated Government
direction oP the activity is, therefore, blearly 1nd3aated, Althcugh
support of the Israeli military potential has certainly boon approved by
the Soviet Union for politioal reasons, thero.is no indication of the"pre-~
else role played by th? USSB fa the Oaeoiioslovak arms traffic. Both the
Kremlin sad the Czechoslovak Communists have desired to increase and pro-
tract the confusion in the, Near Bast, rather than enhance the'proapects of
victory for either sides There is some eaidono? that Soviet and CEOCho..
elovak enthusiasm for the arms traffic with Israel has now diminished, It
is possible that therio has bees a ohango in Sovibt tactics. The USS&, now
eonvinoed that the Israelis have won their fight,:may have decided "co with-
drav its support in order to establish a closer balance of military power
between the Arabs and the Jersse (Item Poe 1, A)
The Government of Yemen has recently entrusted a small Italian Company,
Balpanavi, with the organization and mAasgemeat of a Yemen airline to pro-
viQe domestic services and maintaih communications v+ith other Arab states,
{Item Noe 2, C)
The espanaion of Italian commercial air operations in Africa and the
Near East, iF sustained, may bolster Italian efforts to restore nationAl
prestige in those arose.- (Itsru No. 3, C)
Document No. a3 7
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The Israeli Government evidently desires to develop its commercial air
transport service to Eastern Europe through a series of bilateral air
agreements and has already approached 'the Greek Government for full trafffc
rights at Athens. Should Israel formalize the present arrangement with
Czechoslovakia, and grant reciprbool air rights to other Eastern European
countries, the US-UK effort to deny the Near East to Soviet-controlled air-
lines may be seriously compromised, (Item No. 4, C)
A substantial increase in th0 Soviet Far F,aat transportation potential
may result from Communist oontro~ of Shanghai and North China ports in the
event of collapse of .:the Rationalist Government north of the Yangtze,
(Item No. 5, A)
Acquisition of. the o?eaa-going tankers c.~hich.the USSR is demanding from
current Italian production undtrr the reparations'progrsm would substantially
increase the Soviet economic and military potential. Other typos of vessels
on the .Soviet list are less important to the USSR; (Item No, 6, B)
Ths removal to the USSR oS~German inland shipping in the Soviet Zono
is continuing, although the Soviet authorities carefully picked over the
fleet and appropriated the boat vessels immediately after the and of the war,
(Item No. 7, C)
Barge traffic through the Iron Curtain on the. Danube will result from
the recent US approval for the moeomont of 100,000 tons of Hungarian bauxite
into the l~estern Zones of Germany:. In allowing the shipments, however, the
IIS vaill make it clear that the approval covers the bauxite shipment alone
and in no way constitutes eoceptance of the Sbvl.et-dominated navigation
convention which was adopted over ti~estern opposition at the recent Belgrade
oonferenca. (Item No. B, H) ?
It does not appear that work has actually started on the broad gauge
railway which according to recent reports, the IISSR plans to extend loop
into Hungary, If such a plan crsists, which is doubtful, it probably on-
viaagea the conversion of one track in a double-track lino, There are two
such lines entering Hungary from the IISSR, (Item No, 9, C)
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The reoent meetings of the working party for rail transport (Inland
Transport Committee) of the T.eonomio Commission for I~rope produced tiro
surprises, The 3ooiet-Zone' Germany, announced that it gill note participate'
in the international arrangements for freight oar exchange (RIV): Poland
sponsored a resolution, which was accepted, under which all RIV countries
Brill now eaehaage full data on the rolling stook of their respective lines,.
to include foreign .wagons broken down by country. type. and serviceabilityo
(Item Ao, 10. C} '
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SECTIOA II. CURREI3T DEVELOPdfEttTS
1, Direst Soviet au ort of,tho Israeli milita otontial, in
defienco o e e ? Long race reso u ion, za categorically
charged by a former member of the Israeli Air Trm~eport Gormand in
statements to Dr, Bunohe and to.th? press, The pilot?s statement
gives a detailed aacount',of the organization of the Israeli'Air Force
and the Israeli Air Transport Command, and describes the methods by
which considerable quantities of aircraft and munitions havo boon clan-
destinely flown From hhropo into Palestine, The. major part of the
statement is knotva to bo true from other evidence. Tho allegations
concerning direct Soli?t as?istanoee }iowever, arc not confirmed by
other reports, and some ofl them appear to be unwarranted,
Th? Israeli pilot makes the following o~aims regarding Soviot-
Israali oo2laborstion:
(s) Soviet agents travel front Praguo.to 47eatern crepe
vis.:Tel Aviv,.where tRoy irecoive.identification
papers and other travel documbntaj
(b) Israeli nationals are florin to the USSR for mili-
tary training and pilots havo been offered the
opportunity of training in the USSR for jet air-
craft operations;.
(c)
4'he USSR is paying for all arms furnished Israel
from the Satellite states;
(d) A direst USSR-Israel air route is in prospects
(e) Ramat David airfield ie being prepared as a Soviet
' air base, where 800 Soviet techaiaians are already
working; and
(f)
The Chief of the Israeli Air Force Security Police
is n Soviet citizen,
Of the foregoing claims, the allegation regarding forged travel
documents is the most likely. Such documents havo been prepared is
Israel sad would probably ba made available to Soviet agents in cases
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where this aotioxs is considered to be in the interest oP Israel. NoIIe
ofl the other statements, however, seems prdbablo, although some are
possible, Although the USSR, known to have, trained Yugoslav and
Czeehoslovalc pilots in the past, may now be training Israeli personnel,
it sevros improbable that the USSR could give such training ixi jot airo
craft. 7,7xe USSR is not payag`?or ell arms furnished by the Satellite
countries; it fa known that some of the purchases have been made with
dollar ?undse A direct IsraelmUSSR air roue;o, on crhieh Israeli aircraft
would operates ie trery unl~lcely, Even Sate313te-airlines have been on?
eluded from the U5SR. Numerous precodente suggest that the USSR could
insist on traffic transfer at some intermediate point such sa Prague,
with Israeli aircraft operaL?tng onl~r from J.arael to the transfer. point.
It'is unlikely that the Israeli Govarn~ent. would give to the Soviet
Union actual control of axiy air base in Israel, although Soviet aircraft
might be permltted to uee the facilities o;`.' an Israeli military airfiald<
The Chief of the Israeli Ai r,Foree S?oixrity Police is almost certainly
aII Israeli, although a Soviei~ national may-well be serving 1II an advisory
oapaoity on security matters,
Thv air transport of arms .into Pfileetix.:a has appeared to be organi~
zationally centered iII Pratnxb; SevereJ. agenniva of tiha Czechoslovak
Qovernment have been impiioa~ed, and oooxldin,ated Government direction
of the activity ie, thereforb, clearly indicated. Czechoslovak consuls
hale been instructed to issue 'visas for Israe:lzs and foreign volunteers
e? route to Csechoslovalcia for traix{ing, On arrival? passports have
beon~tak?n up by the Czechoslovak authorities, who hove issued idvntifi?
nation doouAents Por txsA within the country. The Czechoslovak Air Force
has conducted the training program and has 3saued Csochoslooal: uniforms
to the trainees. Thm Air Force Ass also pieced military fields at the
diepoeal of foreign a5,rdraft operators engaged in the a: ms traffiee The
Ceeahoslovek Communist Security Polio? hatre protected thnae activities,.
to insure secrecy end prevent local interferenoo. The Oe,romunist Party '
of Czechoslovakia has organized a corporation, i.n which 5.sraeli: interests
have a miIIOrity aharoy for the express purpose of facilitating the sale
and delivery of Czechoslovak mu?itions bo Israel.
In this well organised activity., a strong inoentiva to Czechoslovakia
has been the opportunity of acquiring badly needed hard currency. T"ne
feat that Cesohoalovakia has also negotiated with delegations of Arab
countries far same and has even made some deliveries pursuant to these
arrangeme?ts indioatea that sympathy for the Israeli cause has not bees
the underlying motive. This ao'ti.vity has ovrtainly been approv?;d i>y the
Soviet IInion for politiosl reasons, although there is no indicai.?.on o?
the prooiss role played by the USSR in the Czechoslovak arms traffic.
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Hoch the Hreml4n and the Czeohoelovak.Communiste have desired to in-
orease and protraot the oonilision is the Near East, rather than enhnnao
the proapeats of victory for efther Bide.
The?eame motives have probably inspired r?oent Yugoslav oollaborar
tion in these operations, (Clandestine air operations are now based at
an airfield is southern Yugoslavia.) Tito apparently is willing to sub-
ordinate his quarrel with the Kremlin to the ooatinuod support'of Soviet
Foreign policy, partioularly in aotione rMioh are directly profitable to
Yugoslavia.
There ie some eviflenoe that Soviet sad Czechoslovak enthusiasm for
the arena treffio with Israel.hea nois diminished. Israeli interests in
Prague have disoloaed to representatives of the US F2nbassy that C?eaho-
slovakia is about to discontinue the training of Israeli pilots end to
stop th? reoruitment~ia Czeohoslovakia of volunteers for Israel. The
movement oP Jewish'refugees, furthermore, vrill be more rigidly oon-
trolled. The reports even mention eotual aggressive action against
Israeli interests, including the arrest of the Zionist leader of the
Prague Je~vish community. .Persistent financial investigations have'alao
been conducted by goverm!rent inspeatora in the offices of the Amerioen
Joint Distribution CommitteeD which handles for Tercel the distribut9.on
oP Jewieh~DPs. Ther? is s~poasibility that whereas the actual intention
is to continue these activities in greater aeoreay, the reports have been
planted crith US authoribiea in order to create the impression that Czeaha-
Slovakia is terminating the ptogram. The USSR and Caeahoslovakia may
believe greater oautidn ie aoaeseary toforaetall aoousations that Czooho-
slovakia hag violated United Nations obligations. On the other hand, it
ie possible that theris has been a change in Soviet~taatiae: The USSR,.
oonvinoed that the Israelis have vron their fight, may haee decided to
withdraw its support in order to establiAh a aloaer balance of military
Compagy, Salpanavi, with the organization and management of a Yemen air-
line to provide domestio services sad maintain communicatione~with other
Arab states. Two DC-Sa, ferried from Italy by Italian ararra, are.to bs
used as a nucleus for this undertaking. Yemen had previously explored
the possibility of U3 aesistanao in starting such services. Negotia-
tions were suapended,.however,-after the-death of the Tmem in 1947, and
US reaoeaition of Israel precluded the 'reopening of discussions,
 S. Thee anaion of Italian oommeraial air operations in Africa sad
the ear s , ii sus a ne ,may is r an of or a to resters
national prestige in those arses. A news enterprise, NCRTH AFRICA
AVIATION, plane to establish an air service along the North African
littoral between Tunis and Ceirof the oompany, to be booked by Ztaliea,
Egyptian, and Libyan oapital, will employ Italian personnel for its
flying and managerial staff. In addition,~o Italian airline SALPANAVI
is direatiag the formation of a Yemenite airline (ae? item 2) which is
planning air servioes to other Arab oountriea, as well as domestic '
operations.
The sirline'SISA (~ow?reportedly merged w ith t~so other Italian sir
oarriera, AIRCNE and TRANSADRIATICA) has boon operating flights. to both
Haifa and Heirut via Athena, and plans eventually to extend its services
to Baghdad sad Basra. In addition, Italian interests supply 40 percent
of the oapital of 3ERVICE.S AERIENS INTF.RNATICNAUR de L~EGYPTE (SAIDE),
an Itelo-Egyptian air Carrier which hoe boon operating three flights
sceekly between Rome and Cairo. Italian aircraft and techniasl pares
sonnal are employed by SAIDE on this route, and the oompany plans to
inaugurate additional services to ffi
aaa~nd~oin
along the Red Sea
~
~
Coast, as well as to Abyssinia.
k, The Israeli Governeat evidentl~ desirea.to develop its aommeroial
air trenepor se oe s era ~ rou a aeriea.of bilateral
air agreements and has already approeahed the Greek Government for full
traffio rights at Atkeena, Unaonfirmafl reports have bees reooived that
similar proposals have been made to Hungary and'Rumania. It is not
known vthether an air egrec~ent has yet been proposed by Israel to Czeoho-
slovakie, but it would seem reasonable to suppose that an air route Prom
Palestine through the Balkans would terminate at Prague,
Presumably, no diffioulty would be encountered in obtaining reeipro~
cal air rights into Prague, ea Czeohoslovak Airli.aea is still operating
scheduled end unscheduled services to Haifa under permits obtained prior
to the British evacuation of Palestine. The posaibllity that the
Satellite oountries will consider Iareel~s proposals favorably is in-
oreased by the obvious policy of the USSR, which has thus far approved
the Israeli-sponsored clandestine air transportation of Czeahoslovalc arms
pr;oduots to Palestine, Although the Soviet-controlled Satellite airlines
TARS andtdAZCVLET have evinced no ambitions for penetration into the
3loditerranean, Czooh'oslovak Airlines have oonsiatently attempted to
expand their present operations into the Near East.
Should Israel formalise the preaeat arrangement with Czechoslovakia,
and great reaiprooal air rights to other Eastern European countries,
the US-US effort to deny the Noar Fast to Soviet-ooatrolled airlines mqy
STAT
 SURFACE TRANSPORTATION
b, A a lets o011 s? of the Chinese Nationalist Qovernment in North .
China may reau is s centre o an ea other orth
Chinese ports, Tha aatioipatsd close relationship bets+ean the Soviet '
Union and the future Chinese Oomrnments is Manchuria and North China
- may, therefore, result is outright Soviet control or strong influence in
the operation of all Paaifie ports above Shanghai,uQth the.exceptioa of
South Rorean harbors, In this event, the Soviet IInion would also dorm-
nate the railway transportation systems linking these ports through tcro
main lines with the Soviet Union. This greatly,inoreased transportation
potential would not, howetror, substantially increase t1:e ability of the
USSR to move goods between its western industrial areas and the Maritime
Provlnaos, because such transcontinental movements would still be limited
by the one line to the west of the point near Chita vrhere the Efianchurian
railway ties into the trans-Siberian. On .the other hand, as aggressive
program for the rehabilitation of railways is North China and Fdeachuria
would de~vislop as extensive transportation neL-~vork capable of servicing
an ambitious local industrial,expaneion: If these ob3ectivea were
aativoly pursued, the Soviet Union could create in the Far Sast a basis
for the support of n far larger military force than it could presently
maintain there in active combats If th? area were largely self-support-
ing, furthermore, the strain on the trans-Siberfea railway would ba
greatly relieved and,it scold be used primarily for the transportation
of highly critical items,
The combined normal.aspaaity of .the ports, from Shanghai to Sovetskaya
Cavan, eaoluding South Rorean ports, ie about 17b,000 tons per day, a?
volume of traffic equal to one-half that handled through New York, the
world's largest port. Acquisition of ,aoatrol over these facilities would
approximately treble the harbor capacities in Paaifia ports now directly
controlled by the Sooiet Union. Thos port facilities to the south of
those nom held by the USSR, moreover,.tvould offer the additional advantage
of being leas subject to ice difficulties in the winter than are
Sovetskaya Oavea; tRadivoatok, Dairen and Port Arthur, The port of
Shanghai, furthermore, hap extensive dry dock and repair facilities and
could be rapidly equipped for the conatruotioa of both naval and merchant
vessels.' These facilities would significantly augment the extremely.
limited shipbuilding capacity of the USSR itself,
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 Although the railway systems of North China end Manchuria are now in
extremely poor oondition, the basin feoilities (rend bads, bridge Found-
ations. tunnels, eta.) are present, and the lines could be put back in
good operating oondition iP the resources of the USSR were applied to
this ob~eotive, A ma3or strategic wseknesa of then systems lies in the
fact that only one rail line aonnmota the great port of Shanghai with
the industrial areas of Manohuriaa .Furthermore, is spite of aonyeraion
to Soviet gauge of the Soviet-controlled ldanahouli line through Manchuria
to gladivoatok, tyro gauges will~oo-exist iad?fiaitely in Manchuria, and
the Manchurian system, ea a whole, will have only limited aonneotione
8e substantiellyisugm~ t eS,Sovie oooonom~icnand miolitaf~ Italy isould
ry potential by
alleviating a sowers current weakness in the Soviet merchant fleet,
The USSR hen boon exerting pressure on Italy for then construction
of the following 89 weasels, to be delivered out of current production
under. 'the "reparations px+ogrem:
(a) 11 Diesel-propelled tankers of 8.000 UWT each;
(b) b Diesel-propelled tugs of 1;b00 horsepower each;
(o) SO Trawlers of 800 horaApowar eeah;
(d) B cargo-passenger vessels of b00 tone cargo sad
2,000 passenger capacity eaaH;
(e) 30 cargo-passenger vessels of 2,600 deadweight and
2b0 passenger capacity each; and,
~(f) , 6 refrigerated cargo weasels of 1,T00 deadweight
tons each,
In evaluating the effect which the acquisition of those vessels by
the USSR would haven on the US national interest, the chief factors are'
(s) the extent to ohich such wease]a would alleviate severe strategic
weaknesses in the Soviet eoonoa~y, and (b) the potential useilalnesa oP
the weasels in the event of hostilities, Oa the, basis of these two
factors, the importance of the vessel types to'tho USSR appears to be in
the order listed ebov~s,
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Sea-going tankers are of prime importance to the Soviet Union
beasuae muoh of its tanker fleet is confined to the land-looked Caspian
Sea. Ae the ooean-going tanker fleet at present totals only about -
200,000 doadweight toss, the addition of even the small amount of ton-
nage in question would sub'stsztially help in solving the troublesome
problem of oil distribution.
11igs are very useful in wartimo for removing hulks and clearing
channels. An essential element in the Allied North Afrioa esmpafgn, fca~
example, was the aesietanae.of sevoral tugs whioh, at?emed from New Xork '.
around the Cape of Coad Hopp to help olear the Suez Canal of sunken
vessels. Trawlers are of importance to the Soviet civilian economy in
aooounting fore part of the food supply, but they are also potentially
uaefu] in miaesvreeping and ooast guard duty.
Thera are few coastwise or foreign trade routes on which tho USSR
aould use the oargo-passenger vessels, (d) and (e) above, to good ?
advantage. While useful, such vesaols ~rould sot be indispensable Aa
wartime Deoause tho USSH'aould oonvert ordinary merohaat ships for troop
oarrying duty. Tha refrigerated oargo vossels are belioved to be of
relatively little importance to the USSR in either a civilian or mili-
tary oapacfty. Although the USSR has little or no refrigerated tonnage,
its requirements far such relatively 'small vessels of this type are
probably not urgent.
The Perot that the current Soviet list of ships does not.include dry
cargo merahaat vessels suggests that the USSR does not soasidor the
eoquisitioa of auoh shipping to be particularly urgent. It is possible
that if the USSR is unable to obtain tankers from Italian shipyards, it~
will insist upon roaeiving dry oargo ships. In view of the fact that
the USSR is nble to oharter morahant vessels tq augment its present fleet,
and is the case of hostilities rvould probably enquire substantial shipping
as a result of military action, CIA mould not view the adquieition of a
few merohant ships by the IISSR ere particularly sorioua. Large amauata of
shipping, however, in the order of 100,000 tons or m be an
undesirable addition to the Soviet merchant float,
fleet end appropriated the best vessels"immediately after the end of the
war. During the period February-July, 1948, over 100.vossels were sent
to the Soviet Union via Stettin, leaving now only dilapidated vessels to
supply island water traffic requiremeasta. Shipowners who attempt to
evade Soviet lands a aacueed of sabotaging the Military Admini~tra-
tion. STAT
 8. ~e traffio throe ~ the.Iron Curtain oa tho Danube will roault
from tip a reoent~l? approva3 or t e movoment of 100,000 tons of Hungaz'iaa
bausite into thA Western Zones oP Oormaay. The permission was granted is
order t0 replenish Western stocks o? this essential raw materiel beforo
ia0 on the uppor 1Danube makes such movements impossible, By evfdenoiag
a willingness to pormit,Satollite barges to come up the Danube into the
6deatern Zones without having reoeived corresponding rights for Western
vessels in Soviet,.oontrollod aeotors oP the Danubo, the IIS refutes the
Soviet propagandA claim that the Wost refuses to oooperete in restoration
of Danubo traffio. In allowing the ehipm6ata, hovrevor, tho US will mako
it clear that the approval covers tho bauxite shipment alone and in no
wqy aonatitutea eooeptanao of tho Soviefadominated navigation aonvontioa
which wa~-adaoted,over Western opposition at the recent Belgrade confes+~
enao, I
9. It dose not oar that work,has actuall started on the broad-
gango way w a actor ng reoen repo a, a S3R plena to~eXtend
deep into Hungary, .
It auoh a plea oxiate, tlhiati is doubtful. it probably envisages the
oonveraion of one traok iri:a double.traak line, Thore are two auoh
lines entoring Hungary from tho USSR;
(a) The line running gonerally eouthsreat Prom '
99TOBALdAUJHII.Y on the border through HATYAN-
IdI3HOTC2 to Budapestj'and
(b) The line running crest snd northcaoat from
ZAHONY, near the border, through SZOLNO$-
DE$RECEN to Budapest,. A aeoond traok might
also bo ooastructed.from the Rumanian border
' to this linen
It does not appear 2lkeiy that,the ZAfi01dY line wculd bs saleotod for
a broad-gauge pro,~eot, because an olsborato trans-shipment station has
boon built under high priority at this point, The station is belioved
t?~fioient oapsaity to Aandlo any normal poaaetime treffio,
STAT
STAT
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10, The reoenL meetin a of the workin art for .rail~trana ort?(Inland
Transport ommittee o e oaomio Commission for rope produoed two .
surprises, The Soviet Zone, Germany, eanounoed that it will now partioi-
pate in the international arrangements for freight cai exohenge (R1V)s
Poland sponsored a resolution, which men accepted, under whioh all RIV
countries will new exchange full data oa the rolling stock of their re-
spective linos, to include foreignvagona broken down by oountry, type,
and aervioeability.?
The Soviet action,wae probably designed to embarrass the ti~iestern
Powers, which have deolined sinoo April, 1948, to allow traffio origin.
ating.in or destined for the Soviet Zone to transit the Fieatern Zones,
Since the Western counter-blookade, all traffio in and out of the Soviet
Zone ha6 been refused.
The Polish cation may reflect merely a desire, possibly instigated
by the USSR, to gain accesa'to detailed data on railway transport in
Western Europe: There is no assurance that the Satellite countries will
actually oomply with the. resolution, or that they will submit accurate
data. Elitherto, the notions of Poland have apparently been guided by a
desire to divertto.its own use the .maximum amount of German rolling
STAT
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