Weekly Summary 9-15 December 1947

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01082A000100010041-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: June 20, 2001
• Sequence Number: 41
• Publication Date: December 15, 1947
• Content Type: PERRPT

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mislay 6uNr.ary
9-15 ;JecuiZber 1947
15 Leccribs.'-:r 1947
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NO CHANGE IN OLA::-. ',. F.-I
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DOCUMENT' NO.
Hn 7-2
DATE. Lt.-VIEWER: 372044
J.:LA.1'E concluded its second session in 22.tguio on DecoLiber 6 after
dotin c. comprehensiVe i_roe,rar.1 outlined by the US for ecenmic re-
habilit....tion of the far ..Lst. part of the outlined Lan, adopted
over .viorous ?...:30,1-1 protest, provides fur consult-tive arrarcenent
oetw., on the cor.:ission r.ne control .-....uthorities in J...1..an
The thi.j, it unneccos:-...rir to set eiL consult-ative
fre.L.:e..,4oric for oresine.: that country -,-Js liseonn to be ineel.eneent.
? It nci cuen arieiL td thA th rc1ationshi. of Jz.7..pz..:.n to the
other Var h3trn cOuntries woule oo serious elock. on ,
the .....Lencia. of this seeeion ;:xtive conaderation of th.ls
stilijl; Ct. hat': cvQrs 1.reventoe oy the protrz..eteci eeb.-..tes over tleril-
berchil .-s to the Ca.-tdssion..
25X6
Afft.irs
The Chinese Ch;lirr..-.n of ever Chinese 2,ffair6 uorLd.ssion on
5 _ccunbur er.ue coLeern over the ne-w; drzit constitution of the
i.ain Union. :One Chinese el-dm the constitution is discrit_Linzttory
to the Chinese in
7 LI-J1:ALN
Ja
L'Aivez ii tuc t.e s.,onser,/,..c.I.ve :vend in
biet. ran1inC within the .._)ocial-Lier..iecratic i t.-xty ovr a ucccor
4?,?
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to Ariculture : mister Hirano who was disuissod early in November
by Irecier -atayamaCociincawith L, breakdown in Democratic iarty
diseilline over the lassae of the .:)tato Coal Control All has urouzht
into cloaror focus a conservatite trend in the Liot.
Uthoull the recent rift uotwuon the ..ation:.1 ?or:ler& Union
Luc the Japan Pixmorsi Union, riht and loft in cduriontz; respectively
of the sociLI-Lemocratic i-rty, ovtr ilimnots successor has bon tern-
porarily ui, the basic constrvative outloon of the Unational
i'41.merst Union ana its uiss-tibfoction with tht larty still roe,!.in.
6houlo future disa:rtents ?ris,.. the or,anization Iii1ttntertain
an invitation to join a conservative coalition. The constrvative-
minded i-ealles Gopertive lerty, one of thc bOv.rLent coalition
perties, -lso Look L strong stand on the subject of Aranols successor
one could iossibly be induct? to join a new consorvative party.
Aftor the Lemocratic tarty, another of the iresent coalition
tLrtios in the cinct, had ro-ched a decision to su,,ort the Jtate
Coal eontrol .4110 a ri,f:ht winc, faction refus d to ulhold the larty
tosition. linter the of _,aron Jhidehar.., the dissident
meLlbers have formet a rc Liet ,youl, the ifoshi The possibility
now o:tists that the boshi 1$ai flay join with the Liberal iarty, the
most consorv,tive larty which is oncourat;itv other anti-Socialist
forces in the Liet to forL. a conservative bloc caller, the I Ltional
Salvation larty. Such a coalition could conceivably owt the i,atayo=a
Cabinet through L. vote of "no-confiutnct". This trent, however, dots
not necossarily irosac,o ,n ixdiate cho.n,.e in the Cabinet. Liberal
Party Irosidont Yoshida, the ,rob-ble successor to ..a,tayL..1.-..L, shows
rtluctanet. to assume res'ionsiollity for Jap,nts 1.rtLent economic
problons.
Japan---conomic
Reparations. The 1136a has rejected the US irolosal ,ofore the
..14 which was eLosi;ntd to break the deadlock on division of Japanese
indussrial facilities as reparations. stel,.:ate mo arlean over the
inability of the reparations sub-comLittee to ace on a scheLult of
tercentl._os Ior the cloven countrios conc.rntc. nortuono the US
proloste - schedule which would Live each country a sor.J.,o:.:th, sAaller
1,ercenta,_e th-n it hau hither I.e a,Tcud to act-Att. ,'or its 1..rt?
the US would receive iercont, eut of this, lt Accent would be
'nolo as a niatty'' for subeoutnt oistriootion to the et'her tun nations
on any .t.:AsiL; ith the h. rojtction, the US
is strivin? to secar, ,t,rov 1 ef the other
The refosal 1.? the 12: s.L to ace .t the lot..st US ,rotoE-1 is
irouebly another ooviot tactic to uel_q skttle_tut of -t r ,-ra:doho
rroele!?, factor in the .abwntse of zlst. euono lc revival.
To the ah, c.olay in that revival :,,ens? ,Long other thircs, contin-
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ifflOWSPh
uAtion of drain. on US occupation funds; developeient of bitterness on
the Fart of the Japanese Le-L.3.11st the US occuFe Lion authorities; and
eedntenence of uncertein economic eoneieione ehich etrve a3a fertile.
for Jai eneee comeiAniet ro-paganda.
hconoele Levcloileer.t. h:ere oefl L e tht; idet,
which are of eajor ortance. to Lee Jai anese econoray. a;:e.e..ge of
the ,;tete edntrel ii11 re:_reeent.s T.:18 eatayar.e. Uoverneentts
only success in the current session in kuttirk; throw); imFortant
lat.ionwhich deeigned .to revive to inciustrial
structure. col ahortac,e is one of the chief C....1A;e8 for the
failure of Japanese ineuetrialists to attain a level higher than 45
percent of 1:11- iev,.1 (the 1-eriod nhich the .e.0 deeles the
standard to ee eutejat for etaele econo:4). tate contrel of the coal
ineustry was felt Uzi tkie eateyarea Covera.unt to be the ansedr to
the complaints by the coal cor.q.anies that they had neither sufficient
caFite.1 funds nor other resources to to4and their ;reduction. Con-
siderable opt ouition to the bill 17L?(-,6 the Govern :ent yiele to aeend-
elente which tone to preserve the , osition of the mine oeners and
opevators under a .1:41.-iited state control.
Also passed wee; the economic eecentrelialtion Lill, which pro-
vides for re littin,; Japenese comi esies into srell units and contains
provisione which are int,eneeed t.c reven.t control ey any ore. cor.4tny
over more than a idnor 1.ortion of the JaFenese econeq,.. The bill
is a Lajor stop in 3C.el ts Irogram to coolish the eafeetsu and to
ensure the denial of oflortunity for revival of iant comoines whose
Folicies ede,Lht loaci to future e.zzression.
Foreign Trade. ::e6otietions between eno banking -.;roup
for financirk, cf J4k..I1C.8e ir.orts end ext orts throuL,h a revolvin,z, fund
aro .till in rot,resu. Under this plan, would I led ,c13720u0.?000
in Japanese,-*;eweis as security for a self-lielidatinz loan.
12out of the groundwork for the loan has Leen corelletedo but certain
legal uostions reLetin to be resolved.
'Korea
The recent currency conversion in Forth :.:oree serves as further
confimation of the existence of a Jieviet ; len to esteelish there an
indet eneent eovern. lents as a leg-1 obstacle to irepleeentetion of the
UNGA resolution on ecrea. In adeition this _top will render more un-
stable the Irceent critical economic site,ation in Jouth .Korea.
i3e4;inninz4. Leceneor axle centinuinr, for a ,erioe of about five
days Joviet occupation currency and Japanese-issued Lank of Chosen
notes -.ore e:echanL;ed for new currency issued e; the North ,:orean
L,Citra
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imiNINI/Wma
1 eolet s Council. Individual ersons mre permitted to exchange 200
wont ,no heads of families 500 wont at the rate of one for one. All
excess currency had to be deposited in state banas where it 1:Jill be
fronen for e.uout two months. The announceuent of the convcrsion
preelpit.tou e buyine, panic which was halted only by restriction of
tr.:dined; to stato-owned stores and by the recuction of rices at these
stores to about one-tenth i revious levels.
The North i.orean 1coplets Council has recently directed the &raft-
ing of a "Korean" conetitution and the prepnration of a le& 1 coca.
Jullft these measures are consido_ ed along with the currency conversion,
it bocuiles epi -rent that the US is Iroccedin:.: with a Ilan of es-
tablishin a legal basis for reco?nition of the north ::oecan Aul
regime as the :nue, enoont govurn.lent of .Lores.. This would clo-r the
way for Soviet troop withurawv 1. The new currency was issuou uy the
I collo s Council of :Torth oreal not by the occupation :.uthoritics,
ane the cenve.sion Leasure was hallon cy -adio I rongyck; as a 1.1.0V0 of
"groat political sinificanco in ace .leratinj, the form. tion of a
United :.orcan Goverment", It is not cit.ar nhother the relirinary
panic ..;as k-rt of the Soviet Ilan, but tho subsequent reduction of
prices was oesignod to have a deflationary ano stabilinirn; eff-ct on
the liorth iorean economic situation, to convince the 1 t.01 lo that con-
version was a ralseorthy Leasure and to instil cunfiuonco in the new
currency issue.
The uncertain conditions of release (no rate of exchange for the
frozen deposits has yet been announced) will inouce many North Koreans
to ho-ru _ans. of Chosen currency for illicit lurchascs in South
Korea where it is still negotiacle. This will resalt in a gzeat in-
flux of currency into south or which will acceler te tee inflation-
ary ;Ir.]. anu encourage speculation. .Liank of Chosen notes turned
over to the ::orth ,orean gOvorru..ent for exch&nc:e can be us,d . a funds
to fin,nce a,:.nts of Joviet I olicy in z'outh 'aorea. There are no im-
mediately efi ective ? ea sures 1.hich ..ncrican occupation authorities can
adopt to halt Lids currency influx.
Accordinz to press reports the exchange rate will ue announced
by the :Iorth horce.n r(..4;iLe cc 4 v eoruary. The k eople Is Council is to
meet at that time and the new "Korean" constitution will cc 1 reeunted
for its aI I royal. hence it is ro-sonaule to conclude that the Soviets
have schoouiu the cum' le tion of their prci .ratory wor:. in 1,:orth i:orea
for the ucc,inninc, of r aeco6nition of the "le& 1" and "inde-
ponoont" LpVtrru .(zit of 1,orca ace ,he wither el of ;)oviet troops, if
decioock upon by the ,relain, will 1rcbably take i Lee' at that tlue
11.1 T
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aNNOIN
CHINA DIVISION
LiilitLry
Commmist L;enerc.1 Chen Yl has izeved _dditional units southward
over thu Lunzhad rail line .no, according to press reports, has launched
,n attac,c on -aifon,L., stratezicaly ir.4ortent reil point.
e=enthilL, .iu o-chen a.s :dovea wes.u.;,..rd across the i inz-hnn rail-
rod ,.s !:ution..Liet iressurc on his ichsh n sos continues. In
Shantunc,, terrorist activity the CoLsamists is said to be urivinE
addition-I refu_ -CS iLtO ::%..ItiOrILL1L-to..ile1C1 cities. The number has
reached 220,ouu in and arouno. Tsirw,tao, where the refu,,ees seriously
encuueer the city's Loministr, tion. The Natiomdiets fina1l of_ened
to tmffic the Tsinan-iuhou sector of the Tsin-Tu rail line on 11
Leceraber.
Internal
The Chinese !.ation-1 Govern .ont, as not ?. announcec the results
of the election eenouct.A, on over.ber to ch000c e.!.1cro of the
%rItionL1 ,.sse:.b1;;-, the 'body which, ;:ith it: el.ction ef tc i resident
of the _el.uulic, will .u.t into effect reL oencLitution. The
difficulty ,f deterrinii,c; the e_tent of ..:InGritz: r, pres.nt tion, anu
the :rabic- or ' th( fictien Lr..t tie r.ew Gov-rn_cht will
been lo,u1-r1-?. cluetce, ire f-ci.urs Lhich Irobjbly c_us-1 to
the i resent in-ctien. In view of this the _:oltern.?-ent ;.111
pre?, ol o.;t. one the convocation of th.- j,tienal until l_tc
Febru-ry or 21.11 te otz..tutorL-
1,w that i1lUL oil CtiVc. LUrii1Z., the inteir. oct:;uen the ex-
tion of the valioit;,- of the ur-rt constitution of tte ..uolantarc
anu the ti_le of tau col V, rdIV, of theationai A.sue-bly.
The Lti-US kro,...,,n6- of Lht- bhinese CA): cJanistz--bcul in 1944
ul..on US I...ILL:58-0r Aurley's def.. reur. fre:a China?hes continued for
thre, :e-ro, ,,;rowini; stc-ully ?0.1%.1 violent in ,enor.
butchery' anu "aiaLressive invasion ef LI c scree soil of hina....in
leaole -With the slavish tr, itor, Chienc, sel ;, le, of
recent 6o:.t...unist invective eirectce e._hinst the US. This uo-, eoth
US bes.or btue.rt and ..n 0.74i crienc..e newsier zri uL..Ve not: c thLt
this Goaulkst Iro,-,;-nch is _,-vin.?; a ..-rh'ec effect en (,hines. lublic
o. inion, Gh] nee, Ur cit: r-no int11ecu5..1 ,:rou, s.
Stu..rt alci..resc e t. oi inion tt tcUnit( c . tate; .nfor. _Lion -er-
vice in :Alia- shoulc cir on e. k eatiVe to ue:.onetr Le ths.t
the Uh is the re :.i L11 eri lo-, r in the Fax LA,st.
160 s aoC
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"RPMfin
ko5.ternal itelations
Unconfiroed reports from China? tee Oct?Lir 191;70 indicate .
Soviet-4,011eh coopx.wation and .plans in China, Tile Sovict is r000rted.
to Le backing loliah rogistration and ropatriation, wLLleOolieh offici-
ola are to carry on the 'work of some Soviet officials ii eVcrlt a a
diplooatic break between the 1J.'8F.Z. and Chino.
The Chinese Foreigi office irotestou on 9 Lecember to the 1.xitish
orloas,:y over the eviction of Chinese recioents of oonwloon, claiming
aaministrativo jurisoiction. The thritish ,,oix.ssaoor, in a Uuters
intorvieri, ex,loined the eviction by 8-4146 it was pur0.y acmini-
stratiVo any o-oo in the interests of health an sfoty.
1,0040MiCS
The black Lar.i.et US donor e/ohonge exporienced wila fluctuations
Lor the thira consecutive week. The zoz.te soured from AC 133,000 at
the becinnino ofthe week to 160,000, then dropped to 142,000 on 10
Lecemnor. Cottoboity rices :3(co prol ortiona te13, desi i.t the govorn-
meot's effort., to oulo ,rices dotal. uohouvo-1 w,.s
caused oy the Issu-nco of ,new Lre oenowination notes of 10000, 2,00G,
ant: 5,000 Customs Gold Units, e iuivo lent to C7C 20,000I 40,000 and'
1C;0,000 refortwo releosed in O.hanghai 10 tecomeoe. The previous
roost note 100000. Gener,1 olac% mrkot tep nsa ctiohs eo sod
following irt.ssure on economic 1 olico and 1.1.tv onforcor,,,ht ants to
crock down oh unoer-coVor a-a linos . The 4 e note i VATIUA5 Will boost
the total currency in circulation to another rocoro noight. Total
issue was CC 28,061 billion up to 5 becesober, convao(twith 3,726
billion in circulation on 1 January 1947. .t this ratio the note in-
crease for the month of Oecomber is co:occteo to ec rear the Eovembor
iorcontaoo of incroose, hich as 26 leroont ovor the previous month.
Inklustry
It is rot ortea that tne 1,,U,t1011,.1 govt.r1L ,ont 1 .nt; to furnish all
cotton to do/ es tic miuls take one finishoo -,00rn ant cloth, and give
the Lill oporators a roasortablo uotton, which is one of the
favorite LiVe CCIALL,CUi ttICS, is an extro-o1;y, scarce item in
Shanghai. This woulu be another otop by the revtrru ont to orioage in
.rivats induL try JeCauSu of the dark sets in ouo,inoss rcovory
somo inoustrialists aro rel. ort.a 1.covino ?norohol LC 0/ on rills in
oono cohoitiuhs woroon it is exiooted that oro industry
will 1(o..vt. eholighai.
inrLls
A tuhosten ore recessing prooucoino 50 tons (concentration
65 iercont) leontal,:y-, is roi orteci locow000 in hong song. :otiations
Ltre uhutr oiocu,sion by a US firm to i urcha.se toe entire out; ut. The
tJSSlL has acouiroci for some time past virtually the total output.
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Transportation
Train service beteen Tsinn .n?ukou was reported resumed on
11 l'ecciMgcr. The Ludken-ieipilv line is opon at present, tut the trip
requires tour days. Le8s t,h.n1?.) percent of China's railways are now
open to traffic.
aMti-4N L1V-L4CN
Australia
tolitical. Foilowing larliaLlont.,ry passage of the bill to nation.
alihe "ustralian can:cing sybLem, the Covermants of ,,euth Australia
and Victoria joinod the private no in appe-ling to the High Court
for an injunction restraining the GovenlJent frum taking over the
banks until hearings on the Constitutionalito el it ..easure could be
held.
The irite Linister is sceAh.; -n rto. exit to thu c:onetitution
to provide for keri,4,nent Goverment control over rents -4U irices.
A referendum, required for such an aLienc?ant, is scheduled for lay 1948.
The Lal.or Government in TasmmiL rec,_ivee a severe eeteack when
Iremier 'Joszrove ws indictee on ch,r,I,s of corruption. If the Op-
position forces -n election, ,s it r.44 do, it is un1ike.14 tiut
Labor would de returned to office.
Lconomica U cioLLr-.1.,ort licenses ,4?re a-net:11dd in line with
the to ,ritLin currency coneervation pro,ram. .:.xcoitions to the
order r(.4 thoi?e coverinL: ,:ooas (a) shipped beforo 41 ectober; (b)
shi,tee under level:cc?le letter of credit; and (c) liated -..., having
hit;h priority, such as reilacerent parts for inde.stri,A
Additional cuts in iLporLs of auto chsesis, tobacco, newsprint,
gasoline) and fil2 renattances "ere announced.
Australia'$ dollar position had been worsened by the sprea6 of the
Tally Clerks stri;:e, which zi3 helo ul; wool oxports thus cutting off
temierorily an im,ortant-source of dollars.
alma
kossib e }ye-Socialist 3.1it. District leaders of the keoples$
Voluntary -r&,. 6Ltion, IVt ?. a sendmilitary groui eriLinally inspired
by Aunt San and one of tno two irincikal.ulements of the Anti4ascist
League (AJ'L), are meeting in aangoon to consider the ratification of
the merwx between the 1VC and the 'Socialist larty, the other important
faction of the AFL. Thi 4ociliA-propozed ne.:ger was to become the
mist Leauo designed to replae,6 the 1JL as the doLin:..nt iolitical
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organieation in 'eurma. ezrly reports inuic tee tie L the merger woulu
be rejkcteu and socleliete removte from the ,:;overnhent, however, the
Socialists leter awe...red to he receining some ground when it was re-
ported that the Lamist League was still under consideration, and that
he present caoinet would centinue in office until about 4 January 1.948,
(Bermes? inoelenuence uay, at which Lime 170 nomineeu would replace
some of the socielists.
ince Aung San's ueath lereonelity claehes have developed within
the Aila over the c:ueeti,n (4. fe:.eership. hyaw Nyein, the emoitious
Socialiet Home Unister, in herticulers IV-L, been uetirinh in hiu efforts
to disuolve, or at least reeucc th- effectiveness of the .?/C. It
therefore appears that this eiceting is e .Ve maneuver not only to con-
solieate their own or6anieation, but to 4,ain political dominance in
Burma at the whence:. of the hecialist. ...ince the :Je h,s a virtual
memiely of the hFL military strenth teeir policies eill undoubtedly
prevail anG if the pr-ent eituation Irecipit.tes a howdewn with the
Socialiete,, there endet three kozeibilities. First, little or no
chark:eu will ee nlhue in the irecent eereinh a:..reement ueteeen the two
hroupe. hecone, in oreer for the .ocialiets to remain in the govern-
-ent they ee.y h-ve to acctpt a. subureinete rule, lossibly to the ex-
tent of losinh their politicel ieentity as socialists, in a new erre-
nivatione Mire, the eocialiste ray be eliclice le:: the fVC whereupon
they Lay atter:4A. to join forces with the Burma CoLcupist Ferty, the
less doctrinaire of hurieals two conmunist ierties? er oierete inde-
penoently in ulposition to a iVe controlled hovernment. If, in case of
such , split, thu 1VU failed to .aintain its soliderity and a firm
grip on the goverment, IL ie poscible that tne 3umcw.; political ecene
will tike on the femiliar pattern cf numeroue lolitical parties which
evolve lore eout ;crsonelities than policleu. Lf these three possi.
uilitieu? the secone hphte.re Liu .or likely, i. e. a cuetromice. be-
tween the i IL and eociailete eecreey the hocieliLts will rtthin
certain emount of influence in the gov.rn. ent.
S *Jam
besiite cleiLe tat the AUL.* hes ueen comiletely sciareted
from tne hiatheue ,rovisionel havernhent, in accoreance with US and
M. intimations 01 displeesure et A.Iitery control, the eiLmeee Army
continue:. to .1,4 on tLe "Cohmunist-Le;ublicen menace" against which
they cielre to heve .ctee, in larts te eet,olish the .r-ent geverment.
This is thc heteral line ef the preu.ure cie?ign to 0...in US rccohnition;
ane the fact th L the exwi.ee indeteert on this feint ineichtee the
politichln-ture of the hreeeht Lilitery authority, whether it is
mwithdreen from lolitice or het". Stetel.ents by lei...et:re of tee regime
clearly ineicate teet the inetih,etors nd leheeru of the :ovemeer
coup clic-tat believe that this hew rehiee., eriteiteu te the el, hi,
incluein6 nen e.houn for their enti-colehanist utend, eill succeee in
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vrir1nin uj ort rk.coAlition thc: US.. This belief ?,..net
ic ul.,on US efforts to counter co.:Jur.unis;..... in ],uroic nd
b, the rrun iioctrino tUL t-ho i-lan.
T:Atz. *LILA, iai.t cLn oLt..r tLrk3i.ltq;.,ez.,..1 n
c,.,zfiter in j& tint to cruLte the i:-.-,ression
t_tz..t thew cteu in ziccorui.n.c,.. rc.n z...nc, to this
z:,.c.an:?.ior
L...16 free Thais with eir t. counit thrt SizA.x.. Col?
k;ilineso, t 3, in ii: L1t. cLn is
J.soL.ttriVutoo to the 'Frt.:e rdointeriretod
Lno i.;;;!
Lc, 1 Lir c1.1 tic country n..yuci .:?..to should
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it in
Approved For Release 2001/08/26 : CIA-RDP79-01082A000100010041-4