CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000500020001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 16, 2016
• Document Release Date: December 29, 2004
• Sequence Number: 1
• Publication Date: April 14, 1955
• Content Type: SUMMARY

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CONFIDENTIAL
6~G{2EWow
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 12
OCI NO.3290/55
14 April 1955
cam
Documa, No
No 25X1
^ DECLAS CLASS1IFIE.D TU:
CLASS. CHANGED
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AUTH; REVIEWER.
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CENTRAL INTELLIGENCE AGENCY
111 OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL
r--
ARA%&WPO F(Le (#i6~gf1l4tedIA-RDP79-00927A000500020001-6
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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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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
SITUATION STILL QUIET
IN FORMOSA STRAITS . . . . . . . . . . . . . . . . . . . Page 1
The lull in combat operations in the Formosa
Straits continued this week. There were no signifi-
cant clashes between Chinese Communist and Nationalist
forces, and there are no indications of imminent island
a acws.74 ..
,n 1 _..
by the
EXPIRATION OF TRUCE IN SAIGON
LEAVES SITUATION STILL TENSE . . . . . . . . . . . . . . Page 2
The expiration of the informal truce in Saigon on
12 April was followed by warnings from the sects against
any renewal of hostilities by the government. Neither
side, however, appears ready to undertake armed action.
AFGHAN-PAKISTANI
TENSION CONTINUES
Despite continuing friction between Afghanistan
and Pakistan, hostilities between the two countries
are probably not imminent. The Soviet ambassador may
have offered increased moral support or economic assist-
ance to Prime Minister Daud to strengthen him in his
st
ruggle with other members of the Afghan royal family.
E_ 1
,Page 2
IRAQ READY TO FORESTALL
LEFTIST COUP IN SYRIA . . . . . . . . . . . . . . . . Page 4
Iraq is prepared to fulfill Syrian president
Atasi's request of 13 April for military assistance
in the event a leftist-threatened coup materializes.
The threat comes from Syrian army supporters of the
extreme Arab Socialist- Resurrectionist Party. who have
virtually ordered President Atasito sign the projected
Egyptian-Saudi Arabian-Syrian defense pact immediately.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
HEATED DEBATE EXPECTED
AT AFRO-ASIAN CONFERENCE . . . . . . . . . . . . . . . Page 5
The preponderance of information continues to sug-
gest that heated political debate will be the order of
the day at the Bandung conference, opening on 18 April.
The heavily outnumbered Communists are attempting to
identify themselves with the neutralists, in the inter-
est both of winning support and of developing a shield
against anti-Communist delegations.
USSR OFFERS SUBSTANTIAL
CONCESSIONS ON AUSTRIAN TREATY . . . . . . . . . . . . . Page 5
In initial Soviet-Austrian talks in Moscow, the
USSR has offered substantial concessions designed to
convince the Austrians that a treaty on acceptable
terms is possible. Moscow is clearly seeking a four-
power conference to discuss ending the occupation of
Austria on the basis of strict Austrian neutrality.
EAST GERMANY THREATENS
MEASURES AGAINST WEST BERLIN . . . . . . . . . . . . . Page 6
Preparations to seal off West Berlin from East
Germany are suggested by the East German government's
charge on 12 April that West Berlin is a major spy
center of the Allied powers and that it constitutes a
threat '!which must lead to retaliation." Cutting off
West Berlin from East Germany would presumably be in-
tended to convince Western Europe that West German re-
armament is dangerous and to prevent the escape to West
Berlin of potential conscripts for the East German army.
NOTES AND COMMENTS
Sino-Soviet Propaganda on Formosa Issue Declines:
communist na s propaganda calling for e
"liberation" of Formosa has declined recently,
probably because Peiping has wanted to appear as
a co-operative participant at this month's Asian
conferences. Moscow has consistently been more
restrained and moderate than Peiping.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
Initiates Par
tial Embargo in Retaliation for
n Tolls: The es German government as begun to
stop deliveries of critical items to the East zone,
Bonn hopes by this action to obtain an alleviation
of the punitive truck tax imposed on 1 April.
. . . . . . . . . . . . . . . . . . . Page 1
Uneasy Situation Continues in East Germany: An uneasy
situation continues in East Germany, in spite of
government efforts to alleviate serious food short-
ages. Tension and discontent probably will persist,
especially as the regime increases pressure on
youth to join military training programs, but there
is little likelihood of open revolt. . Page 2
Climax Appears Imminent in Hungarian Leadership Dispute:
After more an a month of n rapary.. con c ,
Hungarian party leader Rakosi apparently is now
prepared to take formal action to remove Premier
Nagy from his post. Although Rakosi has the open
support of the Kremlin, it is doubtful that he can
restore party unity and discipline merely by oust-
ing Nagy. . . . . . . . . . . . . . Page 3
Soviet Bloc Accelerates Re-Defection Campaign: A drive.
aimed at persuading defectors to return--home ap-
pears to be under way throughout the Soviet bloc.
The "re-defection" campaign probably is intended
to undermine emigre activity, to influence foreign
reaction to past and future defections, and, at
home, to demonstrate the futility of defection.
. . . . . . . . . . . . . . . . . . Page 4
Vigorous Soviet Reaction in Lysikov Case: The Soviet
government responded with unusua vigor to the de-
fection of Valery Lysikov, exploiting the fact that
Lysikov is a minor and picturing the American de-
fection program as unprincipled and inhumane. The
incident provided an opportunity for Defense Minis-
ter Zhukov to write President Eisenhower a personel
letter and thereby establish an extradiplomatic
channel of communication with the President on the
basis of their association toward the end of World
War II. F_ I . . . . . . . . . . . . . . . Page 5
Soviet Government Fails to Announce Annual Price Cuts:
. . . . . . . . . . . . . . Page 6
For the rs time since 1947, e Soviet non ap-
parently intends to make no reductions in prices of
consumers' goods and food products this year. Main-
tenance of the 1954 price level and a doubling of the
amount of compulsory loans the population must make
to the state are among the methods the present regime
is using to reduce inflationary pressures.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
Satellite Economic Policies: Most of the East European
Satellites have modified their new course economic
policies to provide for substantial increases in
defense expenditures and to a lesser extent in
heavy industrial output, while continuing their
programs of agricultural expansion. Some of the
Satellites have recently made limited economic and
political concessions to the people designed to
raise popular morale and increase labor productiv-
ity. ? O ? ? O ? ? . . ? O ? ? ? ? O Page
Japan-Orbit Relations: Japan has rejected the USSR's
proposal a negotiations between the two coun-
tries be held in either Moscow or Tokyo and re-
iterated its preference for New York. The
Japanese have hinted, however,:at a possible com-
promise on some other "neutral" site such as
Geneva, Paris or London. There is some indication
that the Japanese attitude toward the Sino-Soviet
bloc may be hardening, and important segments of
the press are reminding the government of the im-
portance of American-Japanese relations.
Laos: The royal government has reached an agreement
with the Communist-backed Pathet Lao: to continue
negotiations in Vientiane but the rebel delega-
tion has refused to go to the capital on the ground
that the lodgings offered it are unsatisfactory.
. . . . . . . . . . . .
Page
. Page 8
Cambodia: Former king Sihanouk continues to be the most
active figure in Cambodian politics, notwithstand-
ing his abdication. His main concern is the organi-
zation of a political party to defeat the dominant
Democratic Party in the September elections.
. . . . . . . . . . . . . O . . . . . Page 9
Prospects for the New Iranian Government: The tenure of
the new Iranian government o r me.Minister Hossein
Ala, former minister of court, is expected to be
short and to be marked by political instability.
. . . . . . . . . ? . . . . . . . . Page 10
Israeli-Egyptian Border Remains Tense: Failure of
srae prime minister Sharett us far to obtain
a border settlement with Egypt by diplomatic means
may result in new military operations by Israeli
forces. F77 I . . . . . . . . . . . . .
. Page 10
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14 April 1955
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The Nenni Socialist Congress. Developments since
the close 'o the congress of Pietro Nenni's
Italian Socialist Party on 3 April indicate
that collaboration between the Christian Demo-
crats and the Nenni Socialists is under con-
sideration by elements of both groups.
.
Argentine Church-State Dispute: Recent developments
In the church-state spute have increased ten-
sion in Argentina. Both Peronista and opposi-
tion groups are divided on the issue, and the
dominant sentiment is not yet clear. The situ-
ation could lead to violence, especially if the
dispute is exploited by the Communists, who have
been ordered to support pro-church demonstra-
tions. I. . . . . . . . . . . . .
PATTERNS AND PERSPECTIVES
. . Page 12
. Page 13
FAURE BUDGET MAY CAUSE FURTHER DECLINE IN FRENCH MILITARY
STRENGTH . e . . . . . . . . . . . . . . . . . . . . Page
French military strength in Europe will continue
to decline in 1955 unless the military budget proposed
by Premier Faure is considerably increased. Already
weakened by transfers to North Africa since last sum-
mer, the French forces on the Continent are now in the
Initial throes of a major army reorganization whose
success will depend on additional budgetary provisions
for new equipment.
COMMUNIST STRENGTH IN THE ARAB STATES . . . . . . . . . . Page 2
The Communist parties in the Arab states have been
generally ineffective up to now. The party in Syria, how-
ever, is acquiring a position of unusual strength because
of the government's instability; and the Jordanian and
Sudanese parties also are making considerable progress.
F__ I
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14 April 1955
COMMUNIST CLANDESTINE RADIO BROADCASTING . . . . . . . . Page 5
Communist clandestine radio broadcasting reflected
shifts in world tension during 1954. The Sino-Soviet
bloc began broadcasts to encourage nationalist aspira-
tions in North Africa, discontinued its "Free Yugoslav"
activities, and shifted to open Viet Minh channels in
Indochina. Communist clandestine transmitters have
doubled their time on the air since 1950 but are still
broadcasting only roughly one fifth as many hours per
week as are comparable anti-Communist stations beaming
programs at the Sino-Soviet bloc.
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SITUATION STILL QUIET
IN FORMOSA STRAITS
The lull in combat oper-
ations in the Formosa Straits
continued this week. There
were no significant clashes
between Chinese Communist and
Nationalist forces, and there
are no indications of imminent
assaults by the Communists.
The Chinese Communists
have been repositioning air
units and they continue to con-
struct new air bases in moves
which may well be aimed at
EAST CHINA (incl. FORMOSA)
0 Available Airfield (jet)
-Selected Road -Selected Railroad
--- Proposed Railroad
Naut. 0 s0 i00 150 Miles
0 50 100 150
CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
PART I
OF IMMEDIATE INTEREST
K W A N G_T U N 0
CANTON SWAT
achieving a more balanced dis-
position of air strength and
plugging gaps in mainland de-
fenses.
Close to 80 jet fighters--
a full division's complement--
are based at Chuhsien, and about
40 MIG's of a combat-operational
unit are operating from the new
air base at Luchiao on the
Chekiang coast.
Major construction work
continues at Nantai
airfield near Foo-
chow, and at the
site near Swatow.
It seems un-
likely that Com-
munist China will
undertake large-
scale military ac-
tion against the
offshore islands
before or during
the Afro-Asian con-
ference, which is
to open at Bandung
on 18 April. Chou
En-lai is expected
to use the occasion
to assess the de-
gree of support he
would get for var-
ious possible
courses of action.
The likelihood
of early attacks
on the islands will
be increased if Chou,
through private talks
and the proceedings
of the conference
itself, can obtain
assurances or con-
siderable support
for a militant pol-
icy.
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14 April 1955
EXPIRATION OF TRUCE IN SAIGON
LEAVES SITUATION STILL TENSE
The expiration of the in-
formal truce in Saigon on 12
April was followed by warnings
from the sects against any
renewal of hostilities by the
government. Neither side, how-
ever, appears ready to under-
take armed action. The Binh
Xuyen has announced through its
clandestine radio that it will
continue to observe truce con-
ditions until 20 April as re-
quested by Bao Dai.
The government has not
acknowledged Bao Dai's request
and, in fact, publicly takes
the position that the govern-
ment cannot conclude a truce
with a band of armed trouble-
makers.
The Binh Xuyen meanwhile
continues to predict imminent
government "provocation," and
to disclaim responsibility for
the consequences.
American officials in
Saigon have noted that.a
recently organized "Committee
for Conciliation" is actually
a dissident grouping which in-
cludes Hoa Hao, Binh Xuyen,
and pro-Viet Minh elements.
Meanwhile, Viet Minh radio
broadcasts from Hanoi have been
designed to mi:intain a maximum
of friction between the Diem
government and its opponents.
An ostensible ex-Binh Xuyen
leader was heard over this
radio on 8 April in an appeal
to his comrades in the south
to oppose Ngo Dinh Diem and his
"dictatr'ri,,1 ---'gime of nepotism."
AFGHAN-PAKISTANI
TENSION CONTINUES
The Afghan-Pakistani crisis
resulting from the anti-Pakistani
rioting in Kabul on 30 March
has not yet been solved, but
hostilities between the two
countries do not appear im-
minent.
The delay in settling the
crisis is probably due largely
to the numerous factors which
the Afghan royal family must
consider before it takes steps
to restrain Prime Minister Daud,
who apparently instigated the
riots. A further cause of de-
lay seems to be the inability
of the Pakistani and Afghan gov-
ernments to agree on compensation
for the attacks on the Pakistani
diplomatic offices in Afghanistan
and on the Afghan consulate in
Peshawar.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
Pakistan cannot rea
ly retreat from the
..firm line it has taken
toward Afghanistan.
This will make it dif-
ficult for Afghanistan
to find a face-saving
device that would
satisfy Pakistan's
demands for adequate
compensation for the
attack on its embassy.
If the Afghan
royal family does not
succeed in disci-
plining Prince Daud
and in satisfying
Pakistan, tension and
acrimony probably will
continue for some
time,
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There has been no new
violence since the attack on
the Afghan consulate in Pesha-
war on 1 April, and the situ-
ation in Kabul is quiet. Nor
have there been any tribal
forays across the border from
either country. Pakistan dis-
persed one tribal group which
allegedly intended to attack
Afghanistan, while the Afghan
government turned back some
Afghan tribesmen who were
apparently intent on looting
Kabul.
No major troop movements
toward the Afghan-Pakistani
border have been reported,
and officials of both countries
have indicated a desire to
avoid military engagements.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
The Pakistanis have some
troops with armor and artillery
in the border town of Chaman
opposite Kandahar. Afghan
foreign minister Naim told
Ambassador Ward tT t Kabul
would station additional troops
in this area in preparation
against "eventualities," adding
that he would inform him when
or before the move occurs.
Despite these moves, how-
ever, commercial traffic across
the border at Chaman is reported
normal. F_ I
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IRAQ READY TO FORESTALL
LEFTIST COUP IN SYRIA
Iraq is prepared to ful-
fill Syrian president Atasi's
request of 13 April for mili-
tary assistance in the event
a leftist-threatened coup
materializes. The threat comes
from Syrian army supporters of
'the extreme Arab Socialist-
Resurrectionist Party who have
virtually ordered President
Atasi to sign the projected
Egyptian-Saudi Arabian-Syrian
defense pact immediately.
Iraq's Foreign Minister
Shahbandar has informed American
ambassador Gallman that mili-
tary occupation of Syria would
be temporary. Shahbandar has
asked the United States to use
its influence with Turkey and
Israel to discourage them from
taking advantage of the situ-
ation "to harm Syria."
Iraq is probably capable
of forestalling the establish-
ment of a leftist government in
Damascus. Baghdad would use
the occasion not only to es-
tablish a pro-Iraq government
in Syria but also to achieve
closer relations--economic
union, military collaboration,
or perhaps the long-desired
political federation.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
HEATED DEBATE EXPECTED
AT AFRO-ASIAN CONFERENCE
While there is still
sentiment in favor of keeping
controversy out of the Bandung
conference, scheduled to open
on 18 April, the preponderance
of information continues to
suggest that heated political
debate will be the order of
the day.
Little has been accom-
plished toward organizing the
conference. Such important
matters as the agenda and rules
of procedure are to be decided
by the delegates themselves.
This lack of preparedness is an
open invitation to controversy.
There have been increasing
indications that the Communists
are maneuvering to identify
themselves as far as possible
with the neutralists, in order
to win their support as well
as to develop a shield against
the anti-Communist delegations.
This tactic is well
illustrated by Communist ac-
tions at the recently concluded
"Asian Conference for the Relax-
ation of International Tensions"
in New Delhi which Peiping's
delegation dominated. The more
important resolutions sponsored
by the Communists--those
concerning Formosa, Indochina,
nuclear energy, coexistence and
colonialism--in no way ran
counter to the policies of
India and the other neutralists.
They are also a good indication
of what the Communists will
say at Bandung.
The Nehru-Pham Van Dong
communique issued in New Delhi
on 11 April parallels the New
Delhi resolutions in several
other respects.
Meanwhile, it is in-
creasingly apparent that pro-
Western countries will vigorous-
ly challenge the Communists
at Bandung and that ideological
lines will be sharply drawn.
The two Communist delega-
tions will be opposed by at
least eight delegations which
are staunch friends of the
West. Of the remainder, five
or six are neutralist and the
rest are anti-Communist. The
latter will be tempted to
abstain on "delicate issues."
USSR OFFERS SUBSTANTIAL
CONCESSIONS ON AUSTRIAN TREATY
In initial Soviet-Austrian
talks in Moscow, the USSR has
offered substantial concessions
designed to convince the Aus-
trians that a treaty on ac-
ceptable terms is possible.
Whether or not the Soviet
Union actually intends to pro-
ceed directly toward conclusion
of a treaty, it is at least
seeking a four-power conference
to discuss ending the occupation
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
of Austria on the basis of
strict Austrian neutrality.
Molotov made no specific
proposal for a four-power
meeting at the opening session
in Moscow, but he indicated
that he expected the Austrian
government to be helpful in
arranging a conference which
would deal only with the
Austrian treaty. It is likely
that the USSR hopes to use such
a conference proposal as an
opening wedge for discussion of
other issues.
Members of the Austrian
delegation are extremely op-
timistic concerning these Soviet
offers, but they are realis-
tically aware that snags may
arise in further discussions
during their stay in Moscow.
The USSR has not yet made clear
its position on the kind of
guarantees of Austrian independ-
ence and neutrality on which
it would expect four-power
agreement.
The Western powers would
find it very difficult to balk
on the terms of such a four-
power guarantee in view of the
strength of Austrian public
feeling in favor of concluding
a treaty.
At the 12 April meeting
with the Austrian delegation,
Molotov declared that the
Soviet government was prepared
to sign the Austrian state
treaty as soon as possible,
and made three significant
concessions:
(1) He stated that the
USSR was willing to fix a date
in "a very short time" for the
withdrawal of foreign troops.
This appears to contrast with
recent Soviet hints that Moscow
still favored a very gradual
withdrawal.
(2) Molotov said the USSR
would be willing, when a treaty
was signed, to return to the
Austrian government oil and
shipping properties which the
draft treaty reserved to the
Soviet Union. In return,
Austria would make oil de-
liveries to the USSR for six
years.
(3) Molotov stated that
the Austrian declaration
barring participation in mili-
tary alliances and foreign
bases on Austrian soil need not
be part of the state treaty,
thereby reversing his position
at the Berlin conference in
February 1954.
This is a particularly
gratuitous gesture, since
Chancellor Raab had already
publicly stated that the Aus-
trians would be willing to in-
sert such a declaration in the
treaty.
Molotov also proposed that
the four-power guarantee of
Austrian independence be kept
outside the treaty.
EAST GERMANY THREATENS
MEASURES AGAINST WEST BERLIN
Preparations to seal off
West Berlin from East Germany
are suggested by the East Ger-
man government's announcement
of 12 April stating that 521
Western spies had been arrested
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
and charging that West Berlin
is the main spy center of the
Allied powers.
The announcement says
that espionage organizations
in West Berlin constitute a
threat to East Germany "which
must lead to retaliation" and
"cause special difficulties for
the inhabitants of West Berlin."
This statement follows
recent rumors and unconfirmed
reports that restrictions on
freedom of movement into and
out of West Berlin are in the
offing.
The restrictions imposed
on 10 December, ostensibly for
the purpose of controlling the
flow of goods and currency,
were relaxed in mid-January.
A new harassing measure,
however, was introduced on 1
April when a punitive toll
was levied on West German
trucking to Berlin.
The sealing off of West
Berlin from East Germany is
one of the most likely "hard"
measures the USSR may adopt in
response to ratification of
the Paris agreements. Such a
measure would serve to demon-
strate the vulnerability of
the city to Communist pressures
and to convince West Europeans,
particularly West Germans,
that rearming the Federal Re-
public under NATO is dangerous.
In addition, the East
German government probably
considers it necessary to seal
off West Berlin prior to the
establishment of an army, in
order to obstruct the flow of
potential conscripts to the
West. The Communists have
long believed the existence
of a safe haven in Berlin has
aggravated unrest in East
Germany.
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NOTES AND COMMENTS
Sino-Soviet Propaganda
On Formosa! ssue Dec nes
The volume of attention
which Soviet and Chinese propa-
ganda has devoted to the "lib-
erate Formosa" campaign has
declined considerably since
February.
While Peiping continues
to prepare its home audiences
for the "liberation" of For-
mosa and the offshore islands,
it has tailored its commentary
for dissemination abroad to fit
its posture as a co-operative
participant at this month's
Asian conferences.
Chinese propaganda on the
"liberation" of Formosa. became
a massive effort to arouse pop-
ular enthusiasm in July 1954.
Since then, the volume of this
propaganda has risen and fallen
periodically.
It has reached peak levels
on four occasions:
(1) following Chou En-
lai's foreign policy report of
13 August in which he reaf-
firmed Chinese determination
to "liberate" Formosa;
Bonn Initiates Partial Embargo
In Retaliation for Berlin To is
The West German government
has begun to stop deliveries of
critical items to the East zone
in retaliation for the new
East German taxes on Berlin
trucking.
So far, the West German
embargo extends only to Ruhr
iron and steel. Bonn also
intends to apply an export tax
on all shipments to East Ger-
many on about 15 April.
PART II
(2) the signing of the
American-Chinese Nationalist
treaty in December;
(3) Chou En-tai's state-
ment on 24 January reaffirming
the Chinese intention to "lib-
erate" Formosa and attacking
President Eisenhower's proposal
for a cease-fire; and
(4) Peiping's rejection
on 3 February of the UN invita-
tion to cease-fire talks.
Moscow has been far more
restrained and moderate than the
Chinese since the beginning of
the campaign, thus leaving it-
self room for maneuver. The
first Soviet comment occurred
in August, when Moscow firmly
backed Communist China's "legal"
claim to Formosa and the off-
shore islands but refrained from
mentioning the "liberation"
aspects of the campaign.
Except for a few occasions,
Moscow has devoted extremely
little nronalxanda to the issue.
With this kind of "quiet
economic pressure," combined
with negotiations with the East
Germans on a "technical level,"
Bonn hopes to obtain an alle-
viation of the punitive truck
tax imposed on 1 April.
East Germany's economy,
which is operating on limited
stockpiles of industrial raw
materials, is greatly dependent
on West German shipments of coke
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and steel. East German de-
pendence is evident from the
faithful deliveries of brown
coal briquettes as a quid pro
quo for West German steel and
coke, despite the severe bri-
quette shortage in East Ger-
many.
Complete stoppage of West
German shipments would seri-
ously handicap East German
industry. The impact would be
particularly strong on heavy
industry and production for
export.
West Germany's interzonal
trade chief doubts, however,
that economic pressure will be
effective. He believes that
East Germany's political motive
--to bring about high-level
discussions with the West
Germans--is overriding, and
that it will persist until
satisfied. He feels that
meanwhile East Germany can get
the materials it needs through
other West European countries.
Uneasy Situation
Continues in East Germany
The East German govern-
ment continues to face an un-
easy internal situation.
There has been no appreciable
reduction in popular dis-
content, which will probably be
intensified by growing fears
that conscription is imminent.
Shortages of butter,
sugar, meat and flour persist
in the government-owned free-
purchase stores, though food
is now generally available in
exchange for ration coupons at
retail outlets. American
observers have described the
This may be a hint that
Bonn will not apply a very
stringent embargo, which would
not be popular with business-
men. Bonn officials explain
their hesitation by alleging a
fear of provoking sterner
harassments, possibly even a
blockade.
If West German trade
sanctions, combined with neao-
tiations, are not successful y
the end of the month, the stop-
gap funds voted by Bonn and
West Berlin to pay the new
truck tolls will be exhausted.
The Bundestag will be reluctant
to vote new "tribute" and may
consider adopting the East Ger-,
man suggestion that the matter
be discussed at a high level
between the two transport
ministries.
If this were done, a prece-
dent would be established for
dealings at the government level
between other Western countries
and East Germany.
food supply as "poor but not
catastrophic." No improvement
is expected until late this
spring.
The irritability of the
workers and the general state
of unrest in East Germany are
indicated by the strong, un-
compromising reaction of rail-
road personnel to a change of
working hours in early April.
The new schedules did not
increase the length of the
workday, but nevertheless
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inspired strong complaints and,
in isolated cases, active op-
position from the workers.
The'regime considered the situ-
ation serious enough to call
but police brigades. A few
officials in high managerial
posts were discharged after
being accused of slowness in
co-operating with the new plan.
Although work norms are
being increased, the regime has
been cautious and has introduced
them only on a selective plant-
by-plant basis where there is
no risk of serious opposition.
Public tension is being
further aggravated by an im-
pending increase in military
training programs.
All news media have carried
items in the past two weeks
urging youths to volunteer for
Climax Appears Imminent
In Hungarian Leadership Dispute
The summoning of the Hun-
garian National Assembly to
meet on 18 April and the re-
newal of attacks on Nagy's
"rightist deviation" in the
official party newspaper sug-
gest that, after more than a
month of intraparty dispute,
Rakosi is finally ready to
take formal action to remove
the premier from his post.
Moscow evidently decided
that Rakosi needed public So-
viet support in order to restore
party unity and discipline.
In his speech in Budapest on.
4 April, Marshal Voroshilov
backed the Hungarian party cen-
tral committee resolutions
which attacked Nagy and right-
ist deviation. On 3 April,
Pravda printed an article by
Hungarian deputy premier Hege-
dus reaffirming the central
committee resolution.
military service and playing up
the role of the paramilitary
organizations. Three hundred
medical students at Greifswald
University are reported to have
demonstrated on 28 March in
protest against military service.
In spite of popular op-
position to the regime, there
is little likelihood of open
revolt because of the effective
control exercised by the Soviet
and East German military and
security forces. The govern-
ment can be expected to main-
tain an uneasy but nevertheless
adequate control over the
restive population.
In any event, resistance
elements are not well enough
organized to bring about an
uprising.
The attack on Nagy in the
9 April issue of Szabad Nep,
the party newspaper, waste
first criticism of him by name
since 12 March, although attacks
on "rightist deviation" had
continued throughout this period.
Since about a week after
the central committee meeting in
early March, public statements
by several Hungarian leaders,
including even Rakosi, have
attempted to minimize the
changes in the party economic
program from the new course
"liberalism" with which Nagy
was so closely identified.
Public hostility, especially
among the peasants, apparently
provided support for the leaders
who opposed any modifications.
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that the premier's refusal to
recant was making this compro-
mise difficult.
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widely rumored in Budapest that
Moscow desired to keep Nagy in
the government--though prob-
ably in a minor post--because
of his relative popularity, but
Soviet Bloc Accelerates
Re-Defection Campaign
Both the USSR and Hungary
have taken new steps within the
past two weeks to give momentum
to their "re-defection" cam-
paigns. Bulgaria and Czecho-
slovakia have also stepped up
their activities in this field
during recent months, and it
now appears that a concerted
Soviet bloc effort, with uni-
form methods and purposes, has
been launched.
A "Committee for Return'to
the Homeland," allegedly com-
posed of former Soviet emigrds,
was set up in East Germany on
28 March. Its professed pur-
pose is to encourage other emi-
grds to return to the USSR and
to combat the idea that re-'
defectors will be punishea after
their return. The next Soviet
step may be an amnesty for de-
fectors, which has been rumored
in Soviet emigrS circles s i ace
last autumn.
The Hungarian government
proclaimed on 5 April an amnesty
for political refugees who re-
turn within a year, promising
legal immunity to those who
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removal of Nagy will be in-
sufficient to heal the split in
the party leadership, and the
resolution of this situation
may necessitate a large-scale
purge of "right-wing" party
elements.
are not charged with serious
political crimes.
Bulgaria, as early as No-
vember 1953, relaxed the pen-
alties applied to escapees and
offered immunity to those who
return within a year. Last
November, this offer was ex-
tended for another year.
The East German government
last summer began to encourage
refugees to'return by promising
them the restoration of their
property and legal rights, and
assistance in getting employ-
ment.' This program' has been
moderately successful and East
German propaganda media have
referred to it from time to
time.
The other Satellites have
not yet proclaimed amnesties,
although there have been rumors
that they would. They have,
however, been working diligently
among former nationals abroad.
Efforts include propaganda
exploitation of returnees, with
emphasis on the clemency with
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14 April 1955
which they are alleged to be
treated, personal contacts be-
tween the exiles and Satellite
representatives abroad, and per-
sonal letters from the homeland,
which attempt to exploit the
exiles' family ties, nostalgia
and patriotic emotions.
Only a small trickle of re-
defections has so far resulted.
The campaign pro ably
w ave the greatest appeal
among such groups as these,
which despair of early inte-
gration into the West.
Even if it produces few
re-defections,the campaign
will probably succeed to some
extent in weakening emigre
organizations as anti-Communist
political forces.
Vigorous Soviet Reaction
in Lys ov Case
The USSR responded with
unusual vigor to the defection
of Valery Lysikov, the 17-year-
old son of a, Soviet army officer
in East Germany.
No single defection in the
recent past, including those of
MVD officials Khokhlov and
Rastvorov, caused so many pro-
tests by officials of the Soviet
government.
The Lysikov defection
brought forth numerous repre-
sentations by Soviet military
and diplomatic authorities in
Berlin and, finally, the inter-
vention of Foreign Minister
Molotov a.nd Defense Minister
Actually,the political
effectiveness of these organiza-
tions may be only a secondary
reason for the effort being ex-
pended against them. Probably-a,
more important consideration is
the fact that their mere exist-
ence is a constant reminder of
the possibility of defection and
that they are a potential bridge
between the West and disaffected
elements behind the iron cur-
tain. It is possible, too, that
Communist charges of emigre
espionage activity reflect
genuine concern over this
possibility.
Intensive propaganda ex-
ploitation of the emigres lured
back by the campaign can be ex-
pected as a means of diminish-
ing the embarrassment caused by
past defections from Communist
ranks and of discouraging po-
tential future defectors.
Zhukov. The incident provided
an opportunity for Defense Minis-
ter Zhukov to write a personal
letter and thereby establish an
extradiplomatic channel of
communication with the President
on the basis of their associa-
tion at the end of World War II.
The Soviet government ex-
ploited the fact that Lysikov
was a minor to picture the
American defection program as
unprincipled and inhumane, capa-
ble of shattering a family and
exploiting an "immature school-
boy" for political advantage.
In addition, the USSR prob-
ably was particularly sensitive
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14 April 1955
to reflections the case might
provoke on the attitudes and
reliability of Soviet youth.
The fact that Lysikov defected
just at a time when the USSR
is intensifying its "re-defec-
tion" campaign must also have
made his return a matter of
special importance to Moscow.
To date, Lysikov's return
--of his ownH violation--has not
been explo:i i;eu by Soviet propa-
ganda media.
Soviet Government Fails
To Announce Annual r ce Cuts
Prices on consumers' goods
and food products apparently
will not be reduced in the USSR
this year. This will be the
first year since 1947 that no
such action has been taken.
No announcement of price
cuts was made on 1 April, the
date on which price cuts were
announced in each of the past
three years.
The intention to leave re-
tail prices at present levels
also was implicit in the state
budget for 1955, published in
February, which did not con-
tain the usual advance notice
of price reductions.
In addition to the failure
to announce price cuts, there
has been a reduction of propa-
ganda emphasis on all the con-
sumer welfare aspects of the
new course except agriculture.
The regime evidently has
decided to try to control the
problem of inflation, not by
quickly expanding the supply of
consumers' goods, but by re-
ducing the purchasing power of
the populatin. Purchasing
power rose much more rapidly
during the new course years
than did the supply of goods.
The output of consumers'
durable goods made large per-
centage increases in 1953 and
1954, but the absolute amounts
produced remained small.
Because of mediocre agricultur-
al production, supplies of food-
stuffs increased only slightly
and were far below planned goals
in these years.
In 1953 and 1954, in con-
trast to earlier years, prices
on the free market did not fall
following the reduction of state
store prices, showing that the
total supply of goods was not
rising proportionately with the
drop in state prices. Also in
the past year, the Soviet press
has frequently admitted the
existence of black markets and
profiteering in scarce con-
sumers' durable goods such as
automobiles.
In addition to maintaining
the 1954 retail price levels as
one means of reducing in-
flationary pressures, the re-
gime has doubled the amount of
the compulsory loans to be
made by the population to the
state--thus returning to the
high level of 1952.
In 1954, the size of the
annual price cuts was reduced,
but the compulsory loan was
kept at the low 1953 level.
According to Soviet figures,
there was a 25-percent increase
of purchasing power in 1954
over 1952.
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The regime has certainly
reasoned that the absence of
price cuts this year will not
result in active discontent a-
mong the people. Meanwhile,
the internal propaganda line
Satellite Economic Policies
Most of the East European
Satellites have taken their cue
from Moscow and modified their
economic policies to provide for
substantial increases in de-
fense expeditures and to a
lesser extent in heavy indus-
trial output.
The heightened propaganda
emphasis on the primacy of
heavy industry--following the
re-emphasis on heavy industry
in the USSR--suggests that the
original 1955 plans for con-
sumers' goods may be modified
somewhat during the year.' At
the same time the basic ele-
ments of the new course poli-
cies of 1953-1954 continue in
force.
All of the Satellites have
reaffirmed their determination
to bring about a rapid growth
in agricultural output, and the
1955 budgets published to date
allocate increased sums to
agriculture. The Czech, ;A;l
banian, and Polish budgets call
for substantial rises in de-
fense expenditures--34, 25, and
12 percent respectively--while
the Bulgarian budget continues
defense allocations at the
high level maintained in recent
years.
An attempt to raise
sharply the output of heavy
industry will confront the
Satellites with. extremely
difficult problems.
So far during the new
course they have failed to
is emphasizing that higher
standards of living depend on
increased production in heavy
industry and agriculture.
achieve the rapid increases
called for in the output of
fuel and power. This failure
was one of the causes of the
slowdown in industrial expan-
sion just before the new
course began.
Until these fuel and power
shortages are eliminated, any.
return to a policy of rapid
industrialization would proba-
bly be unsuccessful. Moreover,
allocating increased resources
to heavy industry would entail
a sharp cutback in the con-
sumers' goods program and
would largely nullify the
Satellites' plans to expand
peasant and worker productivity.
All the Satellites have
promised a continued increase
in production of consumers'
goods, and several have
recently granted additional
limited concessions calculated
to convince the people that the
new course is not being aban-
doned. Thus, nowhere has there
been a resumption of the extra-
legal security police practices
typical in the Soviet bloc
before the new course.
Some of the Satellites
have also taken specific meas-
ures--such as raising prices
paid for agricultural products
to prove their continued inter-
est in encouraging the peasants
to produce.
The Czech government re-
duced retail prices 1 April
on about 16,000 items, mostly
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14 April 1955
luxuries and hard-to-sell goods,
and raised the wages of 65,000
farmers, teachers and phy-
sicians.
Past concessions have
failed to stimulate the people
to greater effort, however,
Japan-Orbit Relations
Japan's observer at the
United Nations on 8 April
handed Soviet delegate Sobolev
a note rejecting the USSR's
proposal that negotiations be-
tween the two countries be held
in either Moscow or Tokyo. The
Japanese reiterated their pref-
erence for New York but hinted
at a possible compromise on
some other "neutral" site such
as Geneva, Paris or London.
There are signs that
Japan's attitude toward the
Orbit may be hardening.
Important segments of the
Japanese,press are now re-
minding the government that
Japan's relations with the
United States are more impor-_
tant than those with the USSR,
and even Hatoyama has expressed
disapproval of Russia's at-
titude toward the negotiations.
Hatoyama has continued,
however, to cater to the
public's desire for relations
and it is unlikely that a con-
tinuation of the regime's past
policy on a reduced scale will
bring about greater produc-
tivity. [Concurred
in by ORR)
with the Orbit. He told the
press on 11 April that it was
"right" for his government to
establish relations with the
USSR since "the Soviet Union
apparently is following a
course for peace both in Europe
and Asia."
Meanwhile, the Chinese
Communist trade mission now
in Japan is doing its best to
stir up antagonism and frus-
tration on the part of the
Japanese against the United
States.
The Chinese are aiming for
an agreement on $112,000,000 in
trade each.way, but 75 percent
of the purchases China proposes
to make from Japan are on the
embargoed list. The Japanese
are being told that if they
really want to develop trade
with the mainland, they must
refuse to bow to the "obstacles"
and "pressures" of the United
States.
The royal government has
reached an agreement with the
Communist-backed Pathet Lao to
continue negotiations in
Vienti .ne,but the rebel dele-
tLion nas refused to go to
the capital on the ground that
the lodgings offered it are
unsatisfactory.
The government had
announced on l April its in-
tention to address a formal
appeal to the International
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14 April 1955
Control Commission if the
Pathets failed to make con-
cessions "within ten days or
so." While this deadline has
passed,it is still possible
that the government will issue
such an appeal just prior to
the departure of its delegation
for the Afro-Asian conference.
A reported compromise plan,
whereby the Pathets would name
the governor of one of the two
northern provinces, was appar-
ently dropped inasmuch as the
government has announced it
will appoint both governors.
Laotian reluctance to take
stronger action against the
Pathets has resulted from un-
certainty as to the degree of
international support which
would be given such action,
from the weakness of the
Laotian armed forces, and from
the hope of "converting" the
Pathets.
India, as the leading
power on the truce commission,
Cambodia
Former king Sihanouk con-
tinues to be the most active
figure in Cambodian politics
notwithstanding his abdication.
Since his decision to head
his country's delegation to
Bandung became known, French
officials have been at pains
not to urge any particular line
of conduct on the members of
the delegation for fear that
they would thereupon do ex-
actly the opposite.
Following this conference,
Sihanouk may head a delegation
to Paris to negotiate a trade
and financial agreement with
the French.
The prince's main concern,
however, is the organization of
has influenced Laos toward the
adoption of a conciliatory
policy. Krishna Menon's re-
cently expressed doubt that the
Pathets are being aided by the
Viet Minh indicates a continu-
ing Indian tendency to be
"impartial in favor of the
Pathets,"
While the recent emphasis
placed by the Indian truce
chairman in Laos on the prompt
settlement of the northern
province question indicates
some stiffening of the Indian
position, the general Indian
attitude continues to stress
"relaxation of tension," even
at the expense of royal control
over portions of the disputed
area.
a political party to defeat the
now dominant Democratic Party.
Since-he has publicly denounced
"party politics" as being con-
trary to the interests and
aspirations of the Cambodian
people, he has chosen to call
his own party the "People's
Social Community."
The "Community" will have
a strongly Buddhist and monarch-
ist orientation. It will take
part in the September elections
in an attempt to win a majority
for Sihanouk's program of
constitutional reform. The
purpose of the proposed reform
is to restrict the scope of
representative government.
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14 April 1955
Prospects for the New
Iranian Government
The tenure of the new
Iranian prime minister, Hossein
Ala, former minister of court,
is ' xnPl ed to be short and to
be marked by political in-
stability.
The transition from Zahedi
to Ala was smooth and the new
cabinet was presented to the
Majlis on 10 April. Ala's
program, as he announced it
to the legislature, does not
suggest a significant shift in
Iran's domestic or foreign
policy. Ala emphasized that
his actions would be under the
direction of the Shah and an-
nounced that he would wage a vig-
orous campaign against corruption.
The new cabinet appears to
have been well chosen. The key
Ministries of Foreign Affairs,
Finance, and War will be under
the same leadership as before
and the new appointees are be-
lieved to be capable and have
reputations for honesty.
The government's chief
weakness arises from the physi-
cal disability of Ala--he has
already left for medical treat-
ment abroad--and the probabil-
ity that he will not be able
to provide strong leadership.
The Shah feels, however,
that Ala's weaknesses are out-
Israeli-Egyptian Border
Remains Tense
Failure of Israeli prime
minister
Sharett thus far to
obtain
a
border settlement with
Egypt
by
diplomatic means may
result
in
new military opera-
tions
by
Israeli forces.
weighed by his reputation for
honesty, his loyalty and his
public prestige.
Ala can be expected to act
only in accordance with the
Shah's directives. Implementa-
tion of the government's econom-
ic and social development pro-
grams will thus be subject to
the Shah's indecisiveness and
tendency to listen to too
many advisers.
. Intense activity by all
political factions can be an-
ticipated when it becomes gen-
erally apparent that Ala will
head the government only until
another prime minister can be
designated. Government offi-
cials, deputies and senators
will probably spend much time
assuring themselves of prefer-
ential treatment in the pres-
ent and subsequent governments.
Such maneuverings might
paralyze any constructive pro-
grams, particularly if the
Shah proves as inept at day-
to-day governing as appears
likely.
government.
have wide support in the
The new period of Iranian
political instability can be
shortened only if the Shah is
willing to designate, and then
co-operate fully with, a ca-
pable prime minister who would
In the event of another
raid on the scale of the Gaza
incident of late February, Egyp-
tian prime minister Nasr would
probably be compelled by internal
political pressure to take re-
taliatory action against Israel.
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14 April 1955
The Israeli. Foreign Minis-
try is seeking a high-level
meeting with Cairo officials
and is continuing efforts to
obtain United Nations Security
Council action against Egypt
.for promoting the border unrest.
Tel Aviv asked the American
government on 4 April to arrange
top-level discussions between
Egyptian and Israeli officials
in an attempt to prevent the
border situation from "deterio-
rating into disaster."
Israel agreed to the pres-
ence at these talks of Major
General Burns, chief of the UN
Truce Supervision Organization,
but the request for American
assistance in arranging these
meetings reveals Israel's de-
sire to by-pass the UN. The
semiofficial Jerusalem Post
has declared that "Israel can-
not rely upon the doubtful
success of General Burns' ef-
forts and, therefore, must
strengthen its permanent guard
along the border."
American ambassador Lawson's
report from Tel Aviv on 13 April
that fatal incidents on the Gaza
border have decreased and that
the Israeli press is less inflam-
matory suggests that Sharett has
been granted an interval, possi-
bly fairly limited, in which to
settle border problems by diplo-
matic means before the Israeli
government is likely to take
military action.
Egypt is not likely to
agree to a meeting with top
officials.of the Israeli For-
eign Ministry. Cairo, unwill-
ing to consider a permanent
settlement with Israel, will
probably follow its line that
border problems are matters to
be settled by local commanders
and not political officials.
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14 April 1955
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The Nenni Socialist Congress
Developments since the
close of the congress of Pietro
Nenni's Italian Socialist Party
(PSI) on 3 April indicate that
collaboration between the Chris-
tian Democrats and the PSI is
under consideration by elements
of both groups.
Christian Democratic party
secretary Amintore Fanfani has
publicly re leeted Nenni' terms
for support of the government,
but has done so only in a some-
what equivocal statement.
At his party's congress,
Nenni emphasized the desirabil-
ity of collaboration with the
Christian Democrats on a pro-
gressive economic program. A
party official subsequently
SECRET
suggested that such co-operation
be based mainly on the so-called
Vanoni plan for eliminating un-
employment over a ten-year
period through an increase in
national productivity.
Nenni asserted that this
plan of Christian Democratic
budget minister Vanoni was a
PSI plan and that his party
would take it over and carry
it forward if rightist groups
failed to support it.
He also said that in re-
turn for PSI support, the
Christian Democrats would have
to consider NATO and the West-
ern European Union as "purely
defensive" agreements and sup-
port any initiative for easing
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14 April 1955
international tension. Nenni
indicated his party would
fight for Italian neutrality
except in case of "legitimate
Italian defense against direct
aggression."
At the same time, Nenni
insisted that his party's unity-
of-action pact with the Com-
munists was as strong as ever.
Argentine Church-State Dispute
Recent developments in the
church-state dispute have in-
creased tension in Argentina.
Both Peronista and opposi-
tion groups are divided on the
issue, and the dominant senti-
ment is not yet clear. The
situation could lead to violence
especially-if the dispute. is
exploited by the Communists,
who have been ordered to sup-
port pro-church demonstrations.
The principal impetus for
the conflict is President
Peron's apparent conviction
that the church is supporting
plans for a Christian Demo-
cratic movement designed to
oust his regime. The public
controversy began last November
when Peron told a conference of
provincial governors that the,
opposition was trying to over-
throw his regime by infiltrat-
ing Peronista organizations and
by working through certain
priests.
Subsequently both Peron
and church leaders appeared
for a time to be eager to
settle the dispute, but the
president is apparently now
convinced that the political
influence of the church must
be curtailed for the security
of the regime, and that the-
first step should be taken.
in the field of education.
In a public speech on 5
-April, Fanfani replied that the
PSI offer was a step forward
in that the party recognized
the need for collaboration.
However, he added, the PSI's
ties with the Communists create
a grave risk and the Christian
Democrats will not "compromise
freedom" to hasten socio-
economic reform.
Several priests have been
removed from national universi-
ties, and the minister of educa-
tion has ordered a review of the
question of government subsidies
to church and other private
schools. Concurrently, the admin-
istration press has started cam-
paigning for a constitutional
revision providing for a separa-
tion of church and state.
The government's latest
moves, following the legaliza#pn
last December of remarriage after
divorce and several other meas-
ures disapproved by the church.,
have apparently impelled church
leaders to take a strong stand.
In late March they out-
lined their case to Peron in
a strongly worded letter which
was distributed to heads of
families with a message urging
them to resist the new govern-
ment moves by "creating an
atmosphere contrary to all this
line of conduct."
The Argentine Congress
convenes on 1 May, and the
regime seems likely to propose
revision of the constitution.
The election of delegates to
a constitutional convention
would provide a crucial test
of Peron's popular support,
which may have been damaged by
the dispute between church and
state.
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14 April 1955
PART III
PATTERNS AND PERSPECTIVES
FAURE BUDGET MAY CAUSE FURTHER DECLINE IN FRENCH MILITARY STRENGTH*
French military strength
in Europe will continue to
decline in 1955 unless the
military budget proposed by
Premier Faure is considerably
increased.
Already weakened by trans-
fers to North Africa since last
summer, the French forces on
the Continent are now in the
initial throes of a major army
reorganization, the success of
which will depend on additional
budgetary provisions for new
equipment.
National Assembly debate
on the 1955 military budget
has been repeatedly postponed
since the budget was first sub-
mitted last November, and the
armed forces are currently
operating on provisional
credits granted to cover out-
lays through June. The debate
may be held in May, but is more
likely to be delayed until late
June, after the senatorial
elections.
Nationalist elements in
both the government and the
assembly are insisting that
France cannot afford to neglect
its armed strength at the mo-
ment German rearmament is ap-
proved. The Faure government,
however, will probably agree
to no more than a compromise
budget at approximately last
year's level.
Faure's proposed military
budget reflects the view that
military expenditures are es-
sentilly "unproductive."
Estimates were admittedly set
in such a way as to subordinate
NATO requirements to the gov-
ernment's over-all program
of "financial rehabilitation
and economic expansion."
An across-thn-hoard cut of
approximately 10 percent in mili-
tary appropriations was first
proposed by iaure when he was
finance minister under Mendes-
France. There has been no drop
in,"government revenue to war-
rant such a cut at this time.
Even with prospective tax-rate
cuts, the anticipated continued
increase in the French gross
national product is expected to
yield more revenue in 1955 than
in 1954.
Military appropriations
for 1955 are set by Faure at
approximately $2,543,000,000.
Although the amount designated
for NATO remains approximately
the same as for 1954, a larger
proportion of funds will go for
higher army pay and for civil
budget items, such as pensions,
which NATO allows to be counted
as "military."
The government's long
delay in submitting the mili-
tary budget for 1955 stems
partly from indecision as to
the amount to be devoted to
French forces in Indochina.
France now seems resigned
to getting along with only one
third of the $300,000,000 in
American aid originally re-
quested for these forces.
Paris apparently hopes to
reduce its Indochina expenses
in 1955 by speeding up the re-
patriation of troops. Ap-
proximately 10,000 men are being
moved from Indochina every
month, mostly to North Africa,
and by July only 75,000 of the
180,000-man expeditionary force
are expected to be left.
Another reason for delay
was the government's wish to
avoid submitting the 1955 budg-
et until details were worked
out for reorganizing the army
over a three-year period for
"atomic age" warfare.
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14 April 1955
The latest modification
of this plan calls for trans-
forming the existing 14 stand-
ard and two smaller combat
divisions, all supposedly avail-
able for NATO use within 30
days, into a highly mobile but
numerically smaller force of
14 "light" divisions and 11
"rifleman" divisions. The
"light" divisions would' be com-
mitted to NATO and would be
ready for action in from one
to five days. The "rifleman"
divisions would be primarily
for national internal security
and would be available only
after one month.
Even when fully equipped,
the "light" divisions will
lack individual striking and
staying power as compared with
larger units,
There is considerable
doubt that the French can
.supply the additional tanks,
self-propelled guns, and other
mechanized equipment required
by the reorganization plan.
The proposed 1955 budget will
not even finance current French
output of these items.
Despite these uncertain-
ties,the French have already
scheduled three divisions for
reorganization this year. This
initial phase affects the
efficiency of SHAPE's covering
force in West Germany, where
two larger French units are
being. broken up to form three
light divisions.
It is believed that French
army combat effectiveness
COMMUNIST STRENGTH IN THE ARAB STATES
The Communist parties in
the Arab states have been gen-
erally ineffective up to now.
The party in Syria, however, is
acquiring a position of unusual
strength because of the govern-
ment's instability, and the
Jordanian and Sudanese parties
SECRET
probably will be somewhat re-
duced during the entire re-
organization period.
As it is, the army's com-
bat effectiveness declined
during 1954 because half of
its NATO-committed divisions
on the Continent were canni-
balized to provide troops and
equipment for police operations
in North Africa. Moreover, the
activation of two new divisions
for North Africa necessitated
the cancellation of divisional
field exercises last'.summere.
The armed forces are also
facing an increasing manpower
problem. The 1955 cons?r-ip-t-
class is estimated at only
138,000, or about 50,000 below
the 1954 figure
Numerous other factors
complicate the government's
task. The proposal to put the
military budget on a three-
year basis will be difficult
to get through the assembly.
The plan for a top-level re-
organization in the defense
departments creates many
additional problems.
French forces.
Last November the dissident
Gaullists (ARS) and the Popular
Republicans also decried mili-
tary budget cuts in view of
imminent German rearmaments
Both parties are now in the
government, and they may be
able to force Faure to accept
some increase in military
expenditures. If they succeed
in this, the premier could be
expected to renew demands for
increased American aid for
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
also are making considerable
progress. In time, however,
all of the Communist parties--
because of their energy and
discipline--may overcome their
organizational deficiencies
more rapidly than their general-
ly ineffective non-Communist
rivals.
Communist party members
and their supporters are esti-
mated to number no more than
ability to reach the Arab work-
ers and peasants.
Some penetration of the
trade union movement has been
registered in Lebanon and Syria
and the Sudanese Communists
have apparently succeeded in
organizing peasant unions which
eventually could form the basis
of an armed movement.
The Communist strength lies
COMMUNIST PARTY STATUS IN ARAB STATES
Serious political threat; Embryonic movement
Perennial threat to internal stability Negligible
GRE CE.
B L A C K
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LEBANON
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ERU$ALEM
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WAIT
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ARABIA flHAHRAH s `~
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24 MARCH 1955
0 100 200
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KfPdtFy
40,000 of the 40,000,000 large-
ly illiterate inhabitants of
.the Arab world--Syria, Lebanon,
Jorcln.n, Iraq, Kuwait, the Arabi-
an peninsula, Egypt, the Sudan
and. Libya. Some estimates,
indeed, place the total as low
as between 10,000 and 12,000.
Fellow travelers and other
followers far outnumha?r narty
The numerical insignifi-
cance of the Communists re-
flects their continuing in-
chiefly, however, among the
intelligentsia--teachers,
students and professional
people--and the racial minor-
ities scattered throughout the
Arab world.
Only the Syrian and Leba-
nese parties, which have been
closely linked since their in-
ception in 1924, and the
Jordanian party are tightly
organized movements ana they
are the only ones organized
on a country-wide basis.
The Sudanese Communists
are making progress toward
unification.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
The Iraqi party has been
periodically split by devia-
tionism and police repressions.
The Egyptian party, also
severely repressed, has been
splintered since the 1920's.
The Libyan party has been
moribund since its leader--an
Italian--was expelled from the
country in 1951.
In Kuwait, the Communists,
though very active, have.only
a front organization thus far--
the Kuwait Democratic League.
No party organization as
such has been identified in
the Arabian peninsula.
The Syrian and Lebanese
parties, now being run as one
party, have the most effective
leadership. Their Moscow-
trained leader, Khalid Bakhdasb,
is a member of the Syrian
parliament.
Bakhdash has been variously.
reported to be president or
secretary general of all the
Arab parties. His authority
is probably advisory rather
than executive, however, and
there is little evidence that
it extends beyond Jordan, Iraq
and the Persian Gulf.
In this area, the Syrian-
Lebanese party is the major
channel for directives and
propaganda from Moscow and.
Cominform headquarters in Bu-
charest. In Beirut, the capital
of Lebanon, local Communists
openly meet with Soviet offi-
cials in their legation, the
most active in the Arab world.
From Beirut, propaganda is
distributed southward into the
Arab refugee camps of Jordan,
northward to the Kurdish areas
along the Turkish border, east-
ward to Baghdad and then south-
eastward to the vital oil com-
plex of the Persian Gulf. Con-
tact is made with the Tudeh in
Iran at a few points along the
Iraqi-Iranian border.
The Arab Communist par-
ties are attempting to form
anti-Western "national fronts."
This tactic has been partic-
ularly successful in Iraq,
Jordan, Syria and the Sudan,
where it has been a factor in
electing Communist or Communist-
controlled candidates to par-
liament..
In Iraq, the Communist
success was so disturbing that
the newly elected parliament
was dissolved. in August 1954
by strongly anti-Communist
Prime Minister. Nuri Said, who.
proceeded to rig new elections.
The party in Syria now has
the most favorable opportunity
for. threatening the existing
political order. Long repressed
by Shishakli's dictatorship,
the Communists have used the
year of political instability
following Shishakli's over-
throw to reorganize and work
their way into legitimate
political circles.
Communists have infil-
trated the extremist Arab
Socialist-Resurrectionist Party,
which is a major component of
the coalition of leftists, anti-
Western elements and opportun-
istic politicians dominating
the cabinet of Prime Minister
Asali, The Communists are
likely to acquire considerable
influence in the government and
the army under this kind of
cabinet.
In neighboring Jordan, the
threat of Communist exploitation
of Arab refugee discontent and
of the tension between east and
west Jordanians was a major
factor in bringing the strongly
anti-Communist Abul Huda back
into power as prime minister.
The Communists emerged
from last fall's parliamentary
election as the strongest of
Jordan's budding political
parties, however, despite Huda.
Considerable progress
has been made by the Sudanese
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14 April 1955
Communists, who began their ac-
tivities among Sudanese students
in Cairo universities ten years
ago. The Communists are effec-
tively working through two front
organizations and are particular-
ly strong among the railroad
workers and the cotton-growing
peasants in the Gezira. Largely
through Communist efforts, the
only Sudanese ordinance against
Communist activity was repealed
last summer.
Communists have gotten a
foothold in oil-rich Kuwait.
They are no immediate threat
either to the government of the
sheikdom or to the Western-
owned oil industry there. They
do, however, have an opportunity
to develop Kuwait into a point
of co-ordination of their ac-
tivities throughout the Persian
Gulf oil complex.
The Communist parties in
Lebanon, Iraq and Egypt con-
tinue to be a threat to internal
stability and a check on the
pro-Western tendencies of some
Arab leaders. The Communists
are capable of periodically
fomenting or exploiting dis-
orders instigated by other
extremists, as in the case of
the Baghdad riots of 1952.
The Communists have con-
tributed significantly to the
discrediting of the West in
the Middle East, but they have
so far not come close to taking
over any Arab government. The
future, however, offers them
opportunities to become more of
a force, because of the numerous
political, economic and social
grievances in the area and the
lack of promising non-Communist
leadership. 25X1
COMMUNIST CLANDESTINE RADIO BROADCASTING
Communist clandestine radio I because of the closing down of
broadcasting reflected shifts Radio Free Yugoslavia.
in world tension during 1954.
The Sino-Soviet bloc began
broadcasts to encourage nation-
alist aspirations in North Africa,
discontinued its "Free Yugoslav"
activities, and shifted to open
Viet Minh channels in Indochina.
Communist clandestine
transmitters have doubled their
time on the air since 1950 but
are still broadcasting only
roughly one fifth as many hours
per week as are comparable anti-
Communist stations beaming pro-
grams at the Sino-Soviet bloc.
Total time on the air of
Communist clandestine radios
now amounts to 140 to 150 hours
per week. Their combined pro-
grams totaled 164 hours per week
at the end of 1953 but declined
somewhat during 1954, chiefly
As a rule, clandestine
radios operate without overt
registration and from an un-
announced location, and are
aimed primarily at subverting
the target audience. They
usually speak in the name of
an exile or illegal group.
With the exception of a
small Cambodian transmitter,
all clandestine Communist sta-
tions now operating are lo-
cated within the Orjit. This
guarantees physical security,
and location of transmitters
near large urban areas, where
major power facilities can be
conveniently tapped.
Communist clandestine
radio activities reflected
shifting world tensions during
1954.
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14 April 1955
Hungary began clandestine
broadcasts to French North
Africa to fan nationalist is-
pirations. The Cominform?s
Radio Free Yugoslavia was si-
lenced in September as one of
a number of friendly Orbit over-
tures toward Tito. In Indo-
china, most broadcasting ac-
tivity was shifted from clandes-
tine stations to the overt Viet
Minh radio.
The Cominform transmitters
also service Radio Free Greece,
which moved its operations from
Greece to Rumania at the end of
the Greek civil war. This sta-
tion reaches Greece and Greek
communities in the Near East.
GREAT
ETIj Warsaw
BRITAIN ({ POUND 11
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ALBANI.
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GREECE
TANGLE M.E DITERRANE 4 N SICILY 4 a'
MO OC O
sP `s' CLANDESTINE RADIO IN EUROPE
1955
I Cominform "Home Services"
r to France and Italy
MOROCCO A Hungarian Radio to N. Africa
ALGERIA Cominform Transmitters in
TUNISIA Rumania to Spain and Greece
~ Limited jamming or obstruction
0 250 500
LIBYA STATUTE MILES
European Communist radio
propaganda is rounded out by
the Cominform "Home Services,"
which broadcast to France and
Italy and try to create the
impression that they are "Home
Services" by their broadcasting
styles and failing to admit
their foreign origin.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1955
and central Japan on the
simple four-tube radio in
general use there.
It broadcasts Japanese news
on a same-day basis, and in
many cases has anticipated
policy statements of the govern-
ment by one to three days.
25X1
Regular clandestine broad-
casts in Arabic and North
African dialects to Algeria,
Tunisia, and French Morocco
were begun from Hungary last
July. The programs are ten-
dentious and much less re-
strained than the regular trans-
missions of Radio Moscow to
the Arabic world, the only
other Communist radio broad-
casts received in the area.
Radio
its desire to cultivate friendly
relations with the Orbit, the
present Japanese government is
not likely to take positive
action against Radio Free Japan.
In Indochina, clandestine
radio activity diminished con-
siderably during 1954. The
burden of broadcasting former-
ly borne by clandestine trans-
mitters has been assumed by
Radio Vietnam, which became
overt and official along with
the Ho Chi Minh government
and is now centralizing and
improving its facilities.
Budapest's strong anti-French
line is attracting an expanding
audience. The French reaction
has been limited to several
protests to Hungary and a few
efforts to jam the program,
Aside from some limited
jamming in Greece, Spain and
French North Africa, little is
being done to obstruct Com-
munist clandestine broadcasts.
In December, Italy threat-
ened to break off diplomatic
relations with Czechoslovakia
if personal attacks on Italian
political leaders by the Comin-
form "Oggi in Italia" ("Today
in Italy") program were not
stopped. This was the strong-
est of a series of Italian pro-
tests extending over three years,
but Rome has not carried out
its threat.
In Asia, the only impor-
tant Communist clandestine
radio now operating is Radio
Free Japan, the station of the
Japanese Communist Party which
broadcasts from North China.
This station cut out its
short-wave transmissions last
May, but on medium wave it can
be picked up well`in southern
The clandestine Voice of
Nambo, which had been broad-
casting to South Vietnam from
transmitters on junks in the
Mekong delta, announced its
"provisional suspension"
uspension on
1 December 1954 and said that
its service would be assumed
by the Voice of Vietnam.
A. third clandestine radio,
the Voice of South Vietnam,
went off the air in January
1954.
The Voice of Issarak Cam-
bodia, a small transmitter broad-
casting about two hours a day,
is the only Communist clandes-
tine radio currently known to
be operating in Southeast Asia.
It is controlled by Son Ngoc
Minh, president of the Com-
munist line government allied
to the Viet Minh.
'CONFtOENTIAL
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