CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000400200001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 15, 2016
• Document Release Date: June 1, 2004
• Sequence Number: 1
• Publication Date: February 24, 1955
• Content Type: REPORT

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 1?
OCR NO1697/55
24 February 1955
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DOCUMENT NO.
NO CHANGE IN CLASS. ^
^ -DECLASSIFIED
CLASS. CHANGED TO:
NEXT REVIEW DATE: 199
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NFIDENTIAL
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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Nuot
24 February 1955
OF IMMEDIATE INTEREST
COMMUNISTS PREPARE
FOR FUTURE ISLAND ATTACKS . . . . . . . . . . . . . . . . Page 1
The Chinese Communists are reported to have redeployed
air units and readied new air bases which menace Nationalist-
held islands along the coast.
FRENCH COUNCIL MAY AMEND
PARIS AGREEMENTS . . . . . . . . . . . . . . . . . . . . . Page 2
French premier-Edgar Faure will have difficulty con-
solidating his parliamentary support. He is committed to
press for early approval of the Paris agreements by the
Council of the Republic. The large Gaullist element in
his cabinet, however, and the mounting pressure for delay
may influence the senators--half of whom face re-election
in June--to amend the bills. This would require sending
the bills back to the assembly.
CONSERVATIVE VICTORY SEEN
IN JAPANESE ELECTION . . . . . . . . . . . . . . . . . . . Page 3
The leading Japanese newspaper, Asahi, predicts
Hatoyamaas Japan Democrats will win 17B'Q"seats, the Ogata-
Yoshida Liberals 134, and the Left and Right Socialists
71 and 64, res ectively, in the 27 February election.
The Situation in the Associated States: Laos: The crown
prince has indicated a strong desire that his country
adhere to the Manila pact. Cambodia: The king is
proposing sweeping constitutional changes to ensure
his position. Vietnam: Factionalism among the sects
continues to cause unrest in South Vietnam.
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CDNFIDENTIA
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SUMMARY OF CONTENTS
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
Bundestag Will Probably Ratify Paris Treaties This Week:
The West German Bun es ag will probably ratify the
Paris treaties in the second and third readings on
25 and 26 February. The Saar part of the accords,
however, will probably just squeak by. The upper
house is expected to act favorably on the treaties,
probably in mid-March. (Confidential) . . . . . . . Page 2
Satellite Reaction to Developments in the USSR: Satellite
propaganda me a Have reacted cautiously to the
recent changes in the USSR; the people are reported
to fear that domestic policies will harden. Page 2 25X1
Orbit Propaganda Emphasizes "Vigilance": The recent
seizure of the Rumanian legation in Bern may be used
by the Orbit to give new impetus to the "vigilance"
theme which has been increasingly stressed recently. 25X1
. . . . . . . . . . . . . . . . . Page 3
Afro-Asian Conference: Statements by Chou En-lai and Ho
Chi Minh clearly indicate that the Communists intend
to stress the theme of coexistence at the Afro-Asian
conference. India and Burma hope that "controversial
issues" will be avoided. . . . . . . . Page
Japan-Orbit Relations: Japan is requesting that negotia-
tions with e USSR be held at the UN in New York.
Japanese officials hope to start the talks soon
after the 27 February election. The USSR has said
it will meet with the Japanese any place Tokyo wishes.
4 25X1
. . . . . . . . . . . . . . . . . Page 5
Communist China's Food Situation: Crop losses in areas
affected by the floods o 954 were sufficiently offset
by bumper crops in other areas of China so that the net
food situation is probably no worse than it was from
1949 through early 1952. The effect of the situation
on Peiping's military plans will probably not be great.
The regime faced worse food problems in 1950; it never-
theless prepared to invade Formosa and later intervened
in Korea.
. . . . . . . . . . . . Page 5
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
Middle East Defense: Turkish prime minister Menderes is
in Baghdad or the signing of the Iraqi-Turkish de-
fense pact. r- I . . . . . . . . . . . .
Page 6
Incidents on Arab-Israeli Frontiers Increasing: Rising
tensions on Arab-Israeli frontiers may result in
. .
Page 6
The Syrian Crisis: The situation in Syria remains un-
settled an the threat of violence continues. The
Iraqi ambassador in Lebanon has indicated to the
American charge that a swing to the left in Syria
might "require" Iraq to "march in."
Page 7
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The Andhra Elections: The Communists will probably be
defeated in the Andhra elections, but the outcome
is still uncertain. F_
1 . . . . . . .
Page 7
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Communist Strikes in Italy: Communist-inspired strikes
have increased in the port and industrial area of
Genoa in recent weeks. The Communists have also
scheduled work stoppages in Rome in an effort to pre-
vent Senate ratification of the Paris accords. This
effort is almost certain to fail.
Page 8 25X1
Crucial Presidential Campaign Begins in Brazil: What is
likely to be a bit ter y contested campaign for the
presidential elections in October is now beginning
in Brazil. The stresses of the campaign, added to
the government's already serious economic problems,
will pose a threat to political stability, but is not
likely to result in a takeover by the military.
. . . . . . . . . . . . . . . . . . . Page 9
Strikes Threaten in Iceland: Twenty-four Icelandic labor
unions are rea ening to strike beginning on 1 March.
Prolonged strikes, especially if they include the dock
workers, could paralyze the economic life of the
country and force the American-manned airbase at
Keflavik to rely, at least temporarily, on air-borne
supplies. . . . . . . . . . . Page 10
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
PATTERNS AND PERSPECTIVES
SATELLITE ECONOMIC PERFORMANCE IN 1954 AND PLANS FOR 1955. Page 1
Despite claims of overfulfiliment of 1954 industrial
production goals, economic performance in the East European
Satellites during the past year has been generally unsatis-
factory. Available Satellite plan goals for 1955 reflect
an intention substanti lly to continue the new course pro-
gram.
IMPROVED AFGHAN-PAKISTANI RELATIONS NOW SEEM POSSIBLE. . . Page 3
Both Afghanistan and Pakistan appear increasingly
interested in settling the Pushtoonistan dispute over
Afghanistan's campaign calling for an autonomous region
of Pushto-speaking tribes in northwestern Pakistan.
Though there.are serious obstacles to a complete solution
of this issue, preliminary negotiations and the granting
of minor concessions on each side suggest that some prog-
ress toward rapprochement may now be made. I
CURRENT STRENGTH OF THE ITALIAN COMMUNIST PARTY . . .
The Italian Communist Party is clearly having in-
. Page 7
ternal difficulties, but no split in party leadership and
no drop in the party's electoral strength seem indicated
at this time. The recent shift in leadership and policies
in Moscow has not been reflected in the adoption of a more
militant political line by the Italian Communists. I
T
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24 February 1955
COMMUNISTS PREPARE FOR FUTURE
ISLAND ATTACKS
The Chinese Communists con-
tinue to improve their capabil-
ity for further attacks on
Nationalist-held islands.
OFF-SF[ORE ISLANDS
Available Airfield (jet)
Available Airfield (conventional)
Airfield Construction or Improvements
Nationalist-held Islands
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Meanwhile, there are other
indications of an increasing
Communist threat to Nanchishan
where the 2,800 Nationalist reg-
ulars on the island are in the
process of withdrawing to For-
mosa.
The Communists have recent-
ly occupied several islands
north and south of Nanchishan.
One group of three or four of
these islands is about
12 miles "north. An-
other--Taishan--is a-
bout 40 miles south.
Construction of
fortifications and in-
stallation of artillery
on the islands to the
north is already under
way. Taishan could be
used as a base for na-
val operations against
Nationalist shipping to
Nanchishan and the Mat-
sus.
Three Communist
fighter planes bombed
and strafed Nanchishan
on 22 February in the
first attack on the is-
land, and air raids on
Nanchishan will proba-
bly be intensified.
Some Communist
vessels have been re-
ported operating in
waters near Nanchishan
for several days.
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24 February 1955
The withdrawal of the Na-
tionalist regulars on Nanchi-
shan, scheduled to be carried
out on the night of 24-25 Feb-
ruary, is to be covered by a
destroyer and four destroyer-
escorts, together with Nation-
alist planes. With these Na-
tionalist forces operating
alone close to the mainland,
there is some possibility that
the Communists will attempt to
interfere with the withdrawal.
The situation has been
quiet in the Matsu and Quemoy
areas. Communist activity
FRENCH COUNCIL MAY AMEND
PARIS AGREEMENTS
Although all the non-
Communist parties except the
Socialists voted for Radical
Socialist Edgar Faure's in-
vestiture on 23 February, the
new premier will have difficul-
ty in consolidating his
assembly support.
Faure faces rightist op-
position to additional domestic
reforms and to a forthright
policy on North Africa. His
most difficult problem, however,
may be the attitude of Mendes-
France's followers, who fear
the effect of a successful
right-center government on a
prospective new political
grouping led by Mendes-France.
The new premier is pledged
to press for approval of the
Paris agreements by the Council
of the Republic, but he is
expected to devote much of
there could increase at any
time, however.
Communist forces can be
redeployed quickly to forward
areas opposite the Nationalist-
held islands, and final prepara- 25X1
tions for an assault will be
hard to spot. I I 25X1
his energy to domestic eco-
nomic problems.
His cabinet is about even-
ly divided between supporters
and opponents of European in-
tegration. His efforts for
quick ratification of the Paris
accords will probably be coupled
with an attempt to bring about
East-West talks.
Foreign Minister Pinay is
well thought of in the upper
house, which may win new sup-
port for the Paris agreements.
Moreover, Faure is reported
eager to overcome American sus-
picion that he may follow a
"soft" line toward the USSR if
this should seem politically
profitable.
The council's deadline
for a decision on the accords
is now 1 April, but action is
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
likely before mid-March. If
the government presses vigor-
ously, it stands a good chance
of overcoming mounting pres-
?sure for amendments which would
entail reconsideration by the
assembly. The large Gaullist
element in Faure's cabinet,
however, and the mounting pres-
sure for delay may influence
the senators--half of whom
face re-election in June--to
amend the bill.
While Faure has promised
to continue the negotiations
with the Tunisian government
initiated by Mendes-France,
his cabinet may be less liberal.
Pierre July, the new minister
for Tunisia and Morocco, is a
member of the dissident Gaullist
party which supports a firm
policy toward North Africa.
The new premier is ex-
pected to continue Mendes-
France's policy of economic
and cultural coexistence with
North Vietnam.
In the Laniel and Mendes-
France governments, Faure's
forte was economic affairs. He
will press for a boost in living
standards through wage increases
and price cuts as part of the
long-term economic revival pro-
gram he instituted under Laniel.
The appointment of Popular Re-
publican leader Pflimlin as fi-
nance and economics minister
indicates, however, a more
lenient approach to agricul-
tural problems. 25X1
CONSERVATIVE VICTORY SEEN
IN JAPANESE ELECTION
The leading Japanese news-
paper, Asahi, predicts Hatoyama's
Japan Democrats will win 180
seats, the Ogata-Yoshida Liberals
134, and the Left and Right
Socialists 71 and 64 respectively,
in the 27 February elections.
The conservative-leftist
ratio will probably thus remain
essentially the same--two thirds
for the conservatives and one
third for the leftists. It is
open to question, however,
whether the conservatives can
win the two-thirds majority
of the 467 seats which is re-
quired for the passing of
any constitutional amendments.
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24 February 1955
The Situation in the Associated
States
Laos: Despite the strongly bly would be`elected-by.-prbyin
neutralist tone of the king's cial councilors rather than
recent speech before the nation- directly. The cabinet would
al assembly, Crown Prince Savang not be collectively responsible
has indicated a strong desire to the assembly, though individ-
that his country join the Manila ual members could be removed
pact. by assembly vote. The king's
Prince Savang told the
American, British and Thai min-
isters in Vientiane on 17 Feb-
ruary that his country's sur-
vival in the event of Communist
aggression requires its adher-
ence to the Manila pact. He
maintained that the Viet Minh,
utilizing the Pathet Lao, was
more likely to create a
crisis in Laos than in Vietnam
this year. He thought aggres-
sion was unlikely in Vietnam
before the 1956 elections.
action evidently stems from his
growing fear of an opposition
movement centering around the
Democratic Party. He has not
yet made clear how political
party activity would be elimin-
ated by his proposal.
Vietnam: Factionalism
among the sects continues to
cause unrest in South Vietnam.
Spokesmen of the Cao Dai and
Hoa Hao have been urging the
American embassy in Saigon to
intercede with Premier Diem in
order to check what they repre-
The prince had previously sent as oppressive government
explained the neutralist tenor tactics toward themselves. The
of his father's speech as being embassy, however, suggests that
wholly the responsibility of Hoa Hao leader General Soai may
Premier Katay, whom he critic- be in a less bellicose mood
ized for his failure to deal than in the past, and that Cao
firmly with the Communist- Dai leader, General Phoung,
backed Pathet Lao. The prince's appears to be primarily going
failure to prevent the delivery through the motions of protest- 25X1
of such a speech by his father ing.
suggests, however, a certain
tolerance of an official
policy of neutralism.
Cambodia: The king has
announce a -plan, to be submit-
ted to a popular referendum in
April, for a sweeping revision
of the constitution. The new
system would feature a cab-
inet appointed by the king and
the elimination of political
parties.
Under the king's plan,
members of the national assem-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
Bundestag Probably Will Ratify
Treaties This Wee
Recent developments in
France and the Soviet Union
have not altered the Bonn
government's decision to
proceed with the second and
third Bundestag readings of
the Paris treaties on 25 and 26
February. Ratification of
the treaties appears assured.
The Saar bill will
probably just squeak' by., ,
however. The Bundestag's
Foreign Affairs Committee
approved the Saar accord on
20 February, but "with grave
misgivings" and solely with the
votes of Adenauer's Christian
Democratic Party (CDU). Only
scattered support for the
Saar bill is expected from
the coalition Free Democratic
nd Refugee Parties.
Action by the Bundesrat
(upper house) is expected by
mid-,March and will probably be
favorable.
Adenauer has had to fight
sentiment within the coalition
to postpone final reading of
the treaties until France has
a new government and the French
1.C6uncil of the Republic has
acted.
Although the Soviet Union
and East Germany have insisted
that ratification of the trea-
ties would preclude German
unification, the dominant
opinion in the Federal Repub-
lic is that four-power nego-
tiations will probably be
most fruitful after ratifi-
cation. (CONFIDENTIAL)
Satellite Reaction to Develop-
ments in the USSR
Satellite propaganda re-
action to the recent personnel
changes and policy statements in
the USSR has been cautious and
has generally consisted of
straight reporting of develop-
ments in the Soviet Union. Any
editorializing has been primari-
ly on Soviet economic and de-
fense policies.
The personnel shifts have
been barely mentioned in the
press, but the speeches of
Molotov, Khrushchev and Bulganin
have received wide coverage.
Molotov's speech, particularly
the sections emphasizing the
strength of the Soviet Orbit in
the face of alleged Western
aggressive preparations, was
prominently reprinted and was
the subject of approving com-
mentary in Satellite newspapers.
Popular reaction, as re-
ported by Western observers, is
one of apprehension. The people
fear that domestic policies will
harden and that the new course
liberalism will end.
Hungary is the only Satel-
lite, however, where there has
been any indication so far that
such a change might occur.
Party spokesmen have severely
reprimanded Hungn.rian writers
and newspapers'for promoting
"excessive liberalism" during
the past 18 months. Premier
Nagy, who has been most closely
identified with the new course,
has not appeared in public
since late January, and his
absence has given plausibility
to widespread rumors that he
is about to be deposed...
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
On 19 February, the regime
belatedly tried to stem these
rumors by explaining that Nagy
has been seriously ill from
coronary thrombosis and will be
unable to resume his duties at
least until April.
Orbit Propaganda
EmY p aasizes ' ig1lance"
The vehemence of the
Rumanian and Soviet reaction
to the seizure on 15 February
of the Rumanian legation in
Bern by a group of anti-
Communist Rumanian emigre's sug-
gests that the incident may be
used to invigorate the "vigi-
lance" theme of Communist
propaganda in Eastern Europe.
Orbit propaganda has
attacked the Swiss government
for allegedly fostering and
even directing the invasion.
These charges of complicity
have been expanded to include
the United States and have been
cited as proof of the persistent
Communist claim that the United
States is directing the action
of Western European governments
in aggression against the
"peace-loving" states.
Neither the Swiss charge
nor American legation officials
in Bucharest believe, however,
that the Rumanians will go so
far as to break diplomatic
relations with Switzerland.
The "vigilance" theme has
never been completely discarded
in the Orbit since Stalin's
death, but it has generally
been soft-pedaled, with only
occasional brief periods of
emphasis. In the past few
weeks, stress on the need
for "vigilance" has been in-
creased, probably to back up
propaganda assertions that the
West's "aggressive" intentions
Events in Hungary do not
indicate that there will be any
marked shift in economic policy,
although there probably will be
a step-up in internal propaganda
emphasizing the need to develop
heavy industry. 25X1
require an improvement in Orbit
defenses through a greater
effort to develop heavy in-
dustry and increase production.
Hungary and Czechoslovakia
have recently published the re-
sults of trials of members of
alleged antistate organizations
Hungary issued a new decree
last week on the protection
of state secrets which con-
siderably broadens the existing
law and provides a basis for
enforcing tighter security.
East German propaganda
has been featuring charges
that the American Military
Liaison Mission to the Soviet
Forces in Germany has been
harboring smugglers--the first
propaganda attack on the mis-
sion since the June 1953 up-
risings.
The American embassy in
Moscow has noted a number of
recent items in the Soviet
press dealing with the need
for increased vigilance on
the part of the population
and for improving "mass-
defense" work in the quasi-
military training organization,
DOSAAF. More specifically
the Soviet army newspaper,
Red Star, reported on 16
e ruary the arrest of an
"important spy" sent into the
Soviet Union by a "foreign
power." Such reports are
a usual feature of vigilance
campaigns. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
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Afro-Asian Conference
Chou En-lai and Ho Chi
Minh have officially accepted,
on behalf of their respective
regimes, the invitation to the
Bandung meeting, and their
statements clearly indicate
that the Communists intend to
stress the theme of coexist-
ence.
Chou praised the confer-
ence as the first of its kind
and declared that it offered
a good opportunity to make it
possible for countries with
different social and govern-
mental systems to "coexist
in peace." Ho similarly ac-
claimed the conference on the
grounds that it would help
develop friendly relations
among the participants on the
basis of the "five principles"
of coexistence.
India and Burma, on the
other hand, are reported to be
giving priority to cultural
and economic matters and to be
hopeful that "controversial,
issues" can be avoided. Indo-
nesia has indicated similar
sentiments.
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24 February 1955
India, however, can be
expected to take up any inter-
national political issue in
which it happens to be in-
terested.
Japan-Orbit Relations
The Japanese cabinet has
decided to propose that the
negotiations for a settlement
with the USSR be held at the
United Nations in New York
The USSR has said it will
meet with the Japanese any
Communist China's Food Situations..
Crop losses in areas
affected by the floods of 1954
were sufficiently offset by
bumper crops in other areas
of China so that the net food
situation is probably no worse
than it was from 1949 through
early 1952.
A high Burmese official
has stated that the Formosa
problem will certainly be dis-
cussed in connection with the 25X1
general subject of "easin in-
ternational tensions."
place Tokyo wishes.
Foreign Ministry adviser
Masayuki Tani has indicated
that it will be impossible to
open the talks before the 27
February election, but that
the Japanese hope to begin
the discussions shortl there-
after. 25X1
The government has been
moving food into the area,
which in normal years ships
out large rice surpluses.
These food shipments are prob-
ably insufficient to do more
than relieve the worst famine
localities.
Famine conditions in the
large areas of central China
flooded by the Yangtze last
summer are probably already
serious and will grow worse
until May or June, when the
first crops of the year in
that region are harvested.
Extensive reconstruction
and dike repairs have been
undertaken, but may not have
received the government's all-
out attention,: for official re-
ports disclose that large areas
of farmland remain undrained
and dike repair work is lagging
in many localities.
In other areas of China,
where bumper crops were har-
vested, the government should
be able to collect enough food
for its needs through the new
forced purchase program and
effective taxation.
In addition to meeting mili-
tary and urban needs, Peiping
wants to maintain exports of
foodstuffs, including soybeans,
at last year's level of more
than 3,000,000 metric tons in
grain-equivalent terms.
China's total food output
last year is estimated at
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
132,000,000 metric tons in
grain-equivalent terms, only
five percent below the. 1952
and 1953 crops, which were re-
garded as favorable, and equal
to the 1950 and 1951 crops.
The nation's food supply
now is considerably larger than
in the spring of 1950, which
had been preceded by a 1949
crop estimated at only
123,000,000 tons. Moreover,
by now the regime has probably
made at least a small beginning
on a strategic grain stockpile.
Middle East Defense
Turkish prime minister
Menderes is in Baghdad for the
signing of the Iraqi-Turkish
defense pact. Ankara has in-
dicated that it hopes to have
staff talks on implementing the
treaty within a month.
Iraq is also engaged in
staff talks with British
officials with a view to re-
placing the Anglo-Iraqi trea-
ty of 1930 with new arrange-
ments to meet British-mili-
tary requirements in Iraq.
These arrangements are to be
concluded within the frame-
work of the Iraqi-Turkish pact.
Incidents on Arab-Israeli
Frontier Increasing
During the past weeks iso-
lated incidents and killings
have again been on the increase
on the Israeli-Arab frontiers.
Small Israeli military maneu-
vers on the borders and fishing
rights disputes regarding Lake
Tiberias have added to the ten-
sion. Repeated, on-the-spot
meetings and decisions by the
While last year's crop
disasters were a major eco
nomic setback to the regime,
their effect on Peiping's mili-
tary plans will probably not
be great. The regime faced
worse food problems in 1950;
nevertheless it was prepared
,to invade Formosa and later
intervened in Korea. It
faced similar food problems
in 1951'and early 1952, when
it committed and supplied
25X1
some 700,000 Chinese troops
in the Korean war.
(Concurred in by ORR)
So far no significant for-
mal move has been made by .
either Iraq or Turkey to bring
any other Arab state or Iran
into the pact. At present
no other Arab state appears
ready to join, and an effort`
to secure adherence would
probably intensify Egyptian
and Saudi maneuvers against
the pact.
Cairo may be expected to
continue threatening to organize
its own Arab defense align-
ment, though it is unlikely to
come up with any significant
proposal. 25X1
United Nations truce teams have
failed to reduce the tension.
The Israeli press is taking
an inflammatory line, and local
military and public opinion is
quick to accept a show of force
as the only means to achieve
border stability.
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24 February 1955
The present tension may
lead to strong Arab retalia-
The Syrian Crisis
The Iraqi ambassador to
Lebanon has indicated to the
American charge that a swing
to the-left in Syria might re-
quire Iraq to "march in."
Iraq's former prime minis-
ter Jamali has been openly
preaching the need for Iraqi-
Syrian union. Lebanese presi-
dent Chamoun believes that
Syria ought to be united with
Iraq if the situation con-
tinues to deteriorate.
The British embassy in
Beirut is doing little to hide
its favorable disposition to
the idea.
Meanwhile, the situation
in Sy
ria remains unsettled and
the t
hreat of violence con-
tinues. Newly appointed Pre-
mier Asali apparently is at-
tempting to neutralize the
army commanders who are re-
ported to have threatened
the Congress--led coali-
the situation.
tion and a serious clash. Al-
though Israeli frustration
over Middle East defense de-
velopments is high, the Tel
Aviv government, still seeking 25X1
negotiated settlements, is
unlikely to lose control of
military action if his govern-
ment is not soon replaced.
Influential elements in
the army are still basically
opposed to union with Iraq, and
this may be a major factor in
the situation.
The premier, in preparing
for a vote of confidence, has
returned to the old formula of
insisting that the Arabs con-
cern themselves with their pri-
mary problem--Israel. He has
proclaimed his determination
not to join Turkey and Iraq
in a defense pact.
Pro-Western president
Atasi continues deeply con-
cerned over the leftist ele-
ments in the cabinet and over
extensive Saudi Arabian, Egyp-
tian and French intrigue in-
side Syria. He has asked Iraq
to help counter this activity.
25X1
25X1
tion will defeat Communist at-
tempts to gain a majority of the
196 seats in the legislative elec-
tions which began on 11 February.
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24 February 1955
PRESENTATIONS DIVISION
Communist Strikes in Italy
Communist-inspired
strikes in the port and in-
dustrial area of Genoa have
increased in recent weeks as
a protest against new regula-
tions that would weaken the
Communists' hold on the port
workers. The Communists have
also scheduled work stoppages
and demonstrations in and
around Rome in an effort to
prevent Senate ratification
of the Paris accords. This
effort is almost certain to
fail.
The Communist port workers
in Genoa have been on strike
for over a month, and there
have been short sympathy strikes
by the stevedores union and by
workers in various plants in
the surrounding industrial
area. Non-Communist union
leaders in the port consider
the police protection granted
their workers insufficient.
To date the Rome govern-
ment has taken no action but
is prepared, if the agitation
The Congress forces are
credited with 100. safe seats
and the Communists with 80.
The American consul general in
Madras feels, on the other
hand, that the outcome is still
doubtful.
ly legitimate claim to govern
Each party continues to
insist that it will win a
majority.
The final results of the
elections, which will not be
known until after 1 March,
have national importance, since
a victory by the strong Andhra
Communists would, for the first
time, give their party a clear-
an Indian state.
continues, to appoint a com-
missioner to enforce the new,
controversial ordinance per-
mitting private steamship com-
panies to select ship repair
workers rather than having to
accept them from the Communist-
dominated port labor company.
Meanwhile, Genoa authorities
and industrialists appear re-
solved to hold firm, realizing
that any concessions would re-
sult in a great Communist
victory.
Labor unrest elsewhere in
Italy is being aggravated. by
substantial layoffs and the
threat of further dismissals
in various key defense plants.
These layoffs, caused mainly
by cancellation and delays in
letting offshore procurement
contracts, will enhance Com-
munist prospects for gaining
greater public support.
Communist and non-Communist
unions have joined in calling
a 24-hour nation-wide strike
for wage increases for ceramic
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24 February 1955
workers on 24 February, the
date set for the opening of
the Senate debate on the Paris
accords.
While this joint strike
effort may be successful and
Crucial Presidential Campaign
Beg Ins in Brazil
Brazil is now beginning
what is likely to be a bitter-
ly contested campaign .'for. the
presidential elections in Oct-
ober. The stresses of this
campaign, added to the govern-
ment's already serious econom-
ic problems will pose a threat
to political stability, but are
not likely to result in a take-
over by the military.
President Cafe Filho and
his conservative military and
civilian backers would like to
avoid any threat to peace and
stability by having the major
political parties agree on a
single candidate. The Social
Democratic Party, Brazil's
largest, has nominated Juscelino
Kubitschek, governor of the
state of Minas Gerais, and is
seeking support from other po-
litical parties.
The military and con-
servatives assert, however,
that a victory by.Kubit-
schek would mean a return to
the corruption and inefficiency
of the Vargas regime. A bitter
campaign thus seems inevitable
unless the military choose to
intervene.
Meanwhile, Brazil is beset
by staggering economic difficul-
ties. These are largely a
legacy from the maladministra-
Communist-engineered walkouts
in the Rome area may succeed
in tying up local transporta-
tion services, any effort to
stir up violence will be ef-
fectively blocked by the police.
25X1
tion of the Vargas regime. Al-
though the present administra-
tion'has taken some measures
to curb domestic inflation
and to restore Brazil's bal-
ance of trade, it has not pressed
reforms energetically and
consistently.
Many Brazilians assert
that if the United States had
shown more sympathy toward
Brazil's economic problems, the
country might not be faced with
its present economic difficul-
ties. Brazil's traditional
friendship for the United States
has cooled considerably since
World War II. This was
demonstrated in Brazil's re-
cent rejection of a US-proposed
treaty for a combined defense
board.
Oswaldo Aranha, former key
official under Vargas, told the
American embassy on 8 February
that relations with the United
States would be an important
issue in the presidential cam-
paign and that no party would
stand up for the United States.
The Communists have an-
nounced their intention of
entering the coming campaign
and of supporting any "patrio-
tic forces" willing to fight
against "North American imper-
ialism" and for "peace.POI
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24 February 1955
Strikes Threaten in Iceland
Twenty-four unions re-
presenting over 9,000 members
of the 26,000-member
Icelandic Federation of
Labor (IFL) have threatened
to walk out around 1 March.
A prolonged strike by the
Communist-dominated dockworkers
in Reykjavik could paralyze the
economic life of the country
and force the American-manned
airbase at Keflavik to rely, at
least temporarily, on air-borne
supplies. The non-Communist
unions at the airbase itself
are not involved in the
labor dispute.
The Icelandic government
has belatedly taken measures
to avert the threatened strikes
by proposing subsidies to
lower the cost of living.
This tactic averted a
threatened general strike in
1952. Although the president
of the Communist-controlled
IFL has publicly rejected
such a proposal, the govern-
ment's further threat of
monetary devaluation may deter
the trade union leaders.
The aggressive wage policy
of the Communists, who are
spearheading the strike
movement, is designed to con-
solidate their control of the
trade union movement and to
advance their primary
objective of obtaining politi-
cal control of all labor
elements under the aegis of
the IFL. The growing dis-
integration of the badly
divided Social Democratic
Party also encourages labor
to turn to a more aggressive
"worker" party.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
PATTERNS AND PERSPECTIVES
SATELLITE ECONOMIC PERFORMANCE IN 1954 AND PLANS FOR 1955*
All the Eastern European
Satellites except Albania have
claimed overfulfillment of their
1954 industrial production plans,
but in several cases these claims
were made possible only because
the original 1954 goals were re-
vised downward during the year.
Industrial production in-
creased by amounts ranging from
3.1 percent in Hungary to 11 per-
cent in Poland. The growth rates,
however, were below the amount
called for in the original 1954
plans in East Germany, Czecho-
slovakia, and Hungary. In spite
of its claims of overfulfiliment,
Poland's growth rate was just
equal to its original plan.
A basic reason-.-tor the
Satellites' inability to
reach their original targets
was the failure of the program
to obtain greater productivity
through incentives and a more
efficient organization of
labor. Moreover, the regimes
failed to shift resources
from heavy industry to light
industry and agriculture as
rapidly as called for by the
plans.
In spite of increased
efforts, most of the Satel-
lites experienced continuing
difficulties in meeting
their plans in the key fuel
and power sectors, and these
difficulties will continue to
limit their economic growth.
In most East European
countrieq, the output of con-
sumers' goods increased by
substantial, if unspectacular,
amounts--generally 10 to 15
percent--and all of the
countries which reported on
the subject stated that the
output of consumers' goods
expanded as fast or faster
than the output of heavy
industry.
IF oncurred in by ORR.
ANNOUNCED RATES OF SATELLITE INDUSTRIAL GROWTH
PERCENT OF INCREASE OVER PREVIOUS YEAR
% EAST GERMANY POLAND CZECHOSLOVAKIA HUNGARY RUMANIA BULGARIA
0 v .. f =mar e I a I
e r 1~
52 53 54 55* 52 53 54 55* 52 53 54 55* 52 53 54 55* 52
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
i'l
The failure of agricul-
ture to reach its goals was a
major setback for the new
course, however, and pre-
vented a noticeable improve-
ment in the average diet.
Chiefly because of poor wea-
ther, the bread grain harvests
in the area as a whole were
even below the unsatisfactory
1953 level.
This failure forced the
regimes to import several
hundred thousand tons of
bread grains from the West
for the first time since the
war, thereby further depleting
sparse foreign currency hold-
ings and upsetting trade plans.
Plan goals for 1955 are
available to some extent for
all the Satellites except
Rumania. They reveal two
distinct trends.
In East Germany, Poland,
and Bulgaria,the rates of in-
dustrial growth are sched-
uled to continue their
steady declines.
Albania, Czechoslovakia,
and Hungary, on the other
hand, are to increase their
rates of industrial growth
above the 1954 levels, al-
though industrial production
will not grow as fast as it
did in earlier years.
A significant feature of
several of the 1955 plans is
that most of the increase in
industrial output is to be
achieved through the growth of
labor productivity, with heavy
reliance on greater effort on
the part of the workers. Agri-
culture will require most, if
not all, of the increment in
the labor force.
In view of the lack
of progress of the regimes'
efforts to increase labor pro-
ductivity thus far during the
new course, it is questionable
whether the 1955 production
goals will be reached.
So far, the Satellites
apparently do not intend to
reverse their new course pro-
grams to return to a policy:of
rapidly building up heavy in-
dustry, although some modifica-
tions may be made.
Both Poland and Bulgaria
are continuing to stress agri-
culture and light industry.
Bulgaria has also paid con-
siderable propaganda attention
to concessions being granted
to the peasants.
East Germany plans to in-
oreasef:productiot of !.m tnufac -..
taired?lcotisumors' gnbds')at: ;about
tb~ 'same ante as in. 195416 per-
cont: as+'comparoa= to-,a j1anned--
2 )1 porcent:;inoreaso-yin ).total
industrial output fbr.1955.
Hungarian heavy industrial
output, which declined by over
3 percent during 1954, is to
increase by 6 percent this year;
and the food and light indus-
tries of Hungary, which in-
creased respectively by 12 and
9.5. per.cekt ' in'.1954, , are i.to-grow-
by only 7 percent in 1955.
Rather than portending a
return to a policy of forced
draft industrialization, how-
ever, this adjustmentpprobably
indicates that Hungary is un-
willing to pay for a rapid
growth of light industry by
foregoing heavy industrial
expansion. 25X1
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24 February 1955
IMPROVED AFGHAN-PAKISTANI
Both Afghanistan and
Pakistan appear increasingly
interested in settling the
Pushtoonistan dispute over
Afghanistan?s campaign calling
for an autonomous region of
Pushto-speaking tribes in
northwestern Pakistan, Though
there are serious obstacles to
complete solution of this prob-
lem,, preliminary negotiations
and the granting of minor
concessions on each side sug-
gest that some progress toward
a rapprochement may now be made.
The Pushtoonistan dispute
has been the major point of
friction between the two na-
tions for several years
Shortly after Pakistan
was formed in 1947, Afghanistan
began a propaganda campaign
for the formation of an
autonomous "Pushtoonistanv" state. This:is.to include mainly
the Northwest Frontier Province
of Pakistan, which is inhabited
by Pushto-speaking tribes over
whom neither the British nor
the Pakistanis have ever exer-
cised much direct control
The motivation for the
campaign is political and psy-
chological, rather than eco-
nomic, Apparently, the Afghan
government has been concerned
mainly with keeping restive
Afghan tribes occupied with oc-
casional armed forays into Pak-
istani territory and with main-
taining their loyalty toward
the Afghan royal family by
propaganda support as well as
by monetary subsidies., Kabul
has never suggested that its
own considerable Pushto popula-
tion be included in the.pro-
posed new state.
Pakistan, which held a
plebiscite in its -tribal areas
in 1947 and won declarations
of loyalty from tribal. chief-
tains, has consistently main-
tained that there is no dis-
satisfaction within its bounda-
ries,
RELATIONS NOW SEEM POSSIBLE
Growing sensitivity to
the views of the outside world,
direct criticism leveled
at Afghanistan, and steadi-
ly deteriorating economic
conditions inside the country
apparently led gradually to-
a realization in Kabul during
1954 that something had to be
done to improve relations with
Pakistan.
Afghanistan has been
gradually emerging from its
traditional isolationism. It
is participatiig?moreaadtively
in United Nations affairs. it
is expanding its diplomatic
relations with both the West
and the Orbit.
Kabul has watched with in-
creasing concern the formula,'
tion of the Turkish-Pakistani
pact and subsequent efforts to
improve Middle Eastern defense
mechanisms. All during 1954,
Afghan leaders expressed des.
sires to participate in some
way in the Middle Eastern de-
fense pattern and to obtain
military or economic aid to en-
able"then' to do 'so effedtttely.
AFGHANISTAN-PAKISTAN
Minimum area cfa0mnil
-fur FushL:w:i:;L.n
Maximum '.rrsa rl nimOd
Pf'r9. [ur Vushtunnlslan
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24 February 1955
Kabul has been told over
a period of years by the
United States, Britain,
Turkey, and some Arab coun-
tries that its Pushtoonistan
propaganda was serving no
useful purpose and that it
stood in the way of improved
diplomatic relations with
other states and of the
receipt of economic aid. Only
India, and possibly the USSR,
have supported the campaign.
Certain high government
leaders in both Afghanistan
and Pakistan tentatively dis-
cussed the radical idea of
confederation during 1954,
but no visible progress was
made. Toward the end of the
year, however, diplomatic
exchanges on the Pushtoon-
istan issue increased.
Late in 1954, Afghan
foreign minister Naim held
conferences in Karachi, which
for the first time seemed to
produce some hope for an
improvement in the situation.
Publicity given the talks in
Karachi'caused the Afghan
prime minister to return to
a more bellicose attitude,
apparently to prevent Pakis-
tan from interpreting Naim's
reasonableness as a sign of
weakness.
More recently, however,
there have been indications
that senior members of the
Afghan royal family are dis-
satisfied with the prime
minister's continued encour-
agement of Pushtoonistan
propaganda, and there are
signs that Kabul is actively
seeking a basis on which to
continue talks with Pakistan.
Among the concessions
being considered by Afghanistan
seem to be a willingness to
state publicly that Afghanistan
has no territoriai,claims on
Pakistan and to attend a con-
ference with Pakistan without
stipulating in advance that the
Pushtoonistan issue must be
discussed.
Karachi, too, is apparent-
ly in an unusually favorable
mood toward negotiation. Gov-
ernment leaders, intensely con-
cerned with internal political
problems, displayed in late
Januar y.a firm desire to clear
away major disputes with India.
The recent addition to the
Pakistani cabinet of two men
intimately acquainted with Af-
ghan frontier problems may in-
dicate a similar aim in regard
to Afghanistan.
Pakistan's pact with
Turkey and its receipt of mili-
tary aid from the United States
have also sharpened Karachi's
awareness that its natural de-
fense line against the Orbit
lies in the Hindu Kush mount
tains of central Afghanistan.
Given any real concession from
Afghanistan, therefore, Pakis-'
tan might be willing to concede
a point or two which it actur'v
ally is under no obligation,
moral or otherwise, to concede.
Both countries face prob-
lems in attempting to resolve
their differences, however.
The Afghan government--whose
greatest fear is of a tribal
uprising against the royal fami-
ly--will have to find a substi-
tute to the Pushtoonistan propa-
ganda to direct tribal intrigue
away from Kabul.
Prime Minister Daud, who
has identified himself with
this issue, will be reluctant
to see the campaign end. More-
over, Kabul is constantly beset
by the knowledge that Karachi
can dominate it by using its
control of Afghanistan's out-
let to the sea to exact politi-
cal and economic concessions.
Karachi has been unwill-
ing to negotiate the Pushtooni-
stan question as such since
the tribal plebiscite -t held
in 1947 resulted in a favorable
vote for Pakistan. Karachi. al-
so refuses to admit that Kabul
has any right to intervene on
behalf of tribes dwelling in
Pakistan.
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24 February 1955
However, the apparently
growing desire for a rapproche-
ment in both countries may lead
to a further relaxation of ten-
sion and additional efforts to
develop closer relations. Prog-
ress probably will be slow be-
cause of practical problems and
the concern of both parties
not to lose face during negoti-
ations. This concern will be
particularly acute in Afghani-
stan, which is likely to make
occasional strong statements
to maintain its bargaining po-
sition.
Nevertheless, it appears
that through small beginnings,
such as joint projects for
economic developments, which
do not involve national pres-
tige, the way may gradually be
cleared for successful diplo-
matic efforts to eliminate th
Pushtoonistan problem. 25X1
25X6
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CURRENT INTELLIGENCE WEEKLY SUMMARY
24 February 1955
CURRENT STRENGTH OF THE
The Italian Communist
Party (PCI) is clearly having
internal difficulties, but no
split in the party leadership
and no drop in electoral
strength seem indicated at
this time.
Party chief Palmiro
Togliatti was openly criti-
cized at the PCI national con-
ference of 9-14 January, yet
he appears. to remain in full
control and to be ready to
continue the "soft" policies
of the past seven years.
The recent shift in
leadership and policies in
Moscow has not been reflected
in the adoption of a more
militant political line by
the Italian Communists.
There has always been
some discontent in the PCI
among the advocates of a
"hard" line. These elements
accuse the present leadership
of having too little energy
and of weakening the party by
taking in too many "bourgeois
elements."
Pietro Secchia, who has
long been the chief spokesman
for a "hard" line, was demoted
on 14 January from the PCI
secretariat to the position of
regional secretary for the
Milan area. Secchia remains a
member of the PCI directorate,
however, and could be the
party's next leader should a
change in tactics be ordered.
ITALIAN COMMUNIST PARTY
At least some of the
recent increase in the party's
difficulties can be attributed
to the Scelba government's
anti-Communist campaign. The
scandal involving the head
of the party's Rome organi-
zation which aroused
suspicions of moral laxity
among Communist top leaders
seems to have had a partic-
ularly strong impact. Threats
of government action against
other Communists for trade
and financial irregularities,
subversive propaganda activi-
ties, or wartime crimes have
not yet had measurable effects.
The Communists also
appear to have suffered set-
backs in some recent labor
union elections. The Com-
munist rontrolled General
Labor Confederation (CGIL)
has lost heavily in the past
few months in shop steward
elections in a number of im-
portant plants. Typical cases
are the elections at the Piag-
gio plant in Turin, where non-
Communist unions increased
their strength from 34 to 53
percent, and at the Taranto
shipyard, where the free
unions scored an 11-percent
gain, reducing Communist
strength to 55 percent.
Many observers believe
that the trend evident in
these labor elections may not
reflect a political shift,
but rather a fear among the
workers that their plants
may fail to meet the require-
ments for obtaining American
offshore procurement contracts.
In any case, the PCI
does not yet appear to be
losing its political influ-
ence over the masses. The
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24 February 1955
party, together with its
Nenni-Socialist allies, polled
35 percent of the vote in the
1953 national elections, and
has won at least this high a
proportion of the votes cast
in local elections since then.
The next major electoral
test will be the regional
balloting in Sicily on 5 June.
The campaign for these
elections is expected to
focus on the issues of
lagging land reform and pro-
tective oil legislation.
Since there is already wide-
spread dissatisfaction with
the Christian Democrats'
failure to carry out adequate
social reforms and to break
the hold of the old vested
interests, the election re-
sults may show an increase in
the PCI's strength.
CONFIDENTIAL
r
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