SUMMARIES OF TRENDS AND DEVELOPMENTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000300010001-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: November 9, 2016
• Document Release Date: August 17, 1998
• Sequence Number: 1
• Publication Date: July 25, 1950
• Content Type: SUMMARY

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25 July 1950
SUN M 11BIES OF TRENDS AND DEVELOPMENTS
1. The S in,-Nehruu exchange of messages underscores
the resent Soviet tacta c of promoting friendly official rela-
tions with India. Recent changes
in Indian Communist Party
policy may also be designed to conciliate Nehru.
(See page 6)
2. Then ntioAn of the US to oomz~ Mono1
_with the Monoli,ara Peap1 r o Ro~ublic MPRas~ a nucleus s
bloc
may be iorect_by__a suggestion from Kim Il Sung, Premier of
North Korea to Choi Balsan, Premier of MPR, that the "Mongolian
people establish a new peoplets entire Mongolia." In addition
to increasing the protection of the strategic Lake Baikal in-
dustrial area, this defense-in-depth measure would enable the
USSR tos (1) strengthen its position with regard to Manchuria;
(2) exert pressure on the Chinese Communists by control of
Kalgany a strategic approach to China; and (3) resist Chinese
penetration northward by Soviet support of a pan-Mongol bloc.
(See page 6
3. he oresence, a the SED Con ress~df-to internation-
a1 Cclznunzs leaders iom a a,east twer ty-thre~_rties indicates
that iml rta.nt international Communist al ,ns were communicated
to.the var ous rr re3sentntiyos .
(See page 8 )
4 . E,,,,ntr_Z_ o# _tho Socialist Un%ty Party SED the East
German Communist Party ,_into the Cominform would not foreshadow
rzny new or RtarLl3ng development in Soviettaetics toward
Germany. There is no firm indication as to whether the SED will
or will not enter this organization at some future date.
(See page 9 )
DOCU /ENTNO.
NC) CHAP ,*VCL A :S. 0
Cl DEC LA GS ei w)
LASS. CHAT ~.GED TO
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1L
i tan the USSR, has assured e]. a Jcontinu ng_f10V of
desired ruw _,motor3_a. ,s, encouraged Afghanistan to challenge
Pakistan still further, and increased Afghan economic dependence
on the Eastern Orbit.
(See page io )
6. 7r e the ,1d .,, 1h1kg11 given bvt, ie USSR to the
need for tank car, the situation is not critica?jo
(See page 17
)
7. Reported negotians fora Sovie-Mexican barter
deal. indicate that the USSR is still interested in obtaining
Mexican henoquen, wishes to increase its exports to Mexico, and
is attempting to conserve its dollar resources. The proposed
exchange of Soviet machinery, automobiles, and wheat for 20,000
tons of henoquen would be the first barter arrangement between
the two countries. In the past the USSR has paid for Mexican
henequon with US dollars.
EASTERN EUROPE
GENERAL .~..
$. Lar o ntiunhers of Soviet civil ans h have re or ed--
l been ?n, ,lltrated into Satellite countries could substantially
rzujMent .the Soviet- Satell.itearmed forces and contribute to
strengthening of Soviet information and control in Bulgaria,
Rumania and Hungary.
(See page 12 )
9. Intensification of West German Czech com ex~ tition is
indica,tedbv ama or lash in Czech textile e2morts to Turkey,
Czech cotton goods, which were quoted In the Istanbul market at
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85 cents in March 1950, were dropped to 40-45 cents during the
following two months to counter a West German price reduction
to 65 cents,
EASTERN GERMANY
10. Wier Ulbrich East erman De Zty Promierj announced
at the recent Socialist Unit Part SED Con ess that East
Germany would enter the Economic Council for Mutual Assistance
Elu]A The entry of the German Democratic Republic GDR into
-the so-called Soviet counterpart of the Marshall Plan is a
logical step in the integration of East German into the Soviet
orbit, It may be designed, in part, as a counter measure to
West German entry into the Council of Europe. The coordination
of the East German five year plan with the economies of the
other Satellites will probably be directed by CEMA.
RUMANIA
11, The socialises transformation of agiriculture in
ania was carried one step furth2 by a decree which provides
for the pooling of small and scattered plots of farm land. This
may prove to be the hardest blow thus far aimed at the moderately
successful peasant (kulak).
(See page 13 )
12. Dislocations stillexist in Rumanian domestic trade,,
in spIte of s ?oradic rear nizatjon~an ersonnel chan,esy- In
order to draw off the anticipated surplus cereal production, the
Government will try to take corrective measures.
(See page 14 )
13, Yu,osla.v concernoverthe possibility o a Soviet-
ins ,ircd? ces,-3ion is a arent gxowin Mal though no official
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anxiety has boon. revealed. On the basis of available evidence,
however, it appears unlikely that a Soviet-inspired attack on
Yugoslavia is imminent. Satellite armies, even if equipped
with available Soviet armor and equipment, are still. believed
inaapablo of overrunning the country without direct Soviet
participation.
(See page 15 )
14, Unfavorable weathox conditions in Yugoslavia are
h vin an adverse effect p n springy? l?axzted crogs p It is un-
likely that there will be a largo amount of grain available
for export purposes and there is a slight possibility of a
grain deficit. This will reduce Yugoslaviats foreign trade
earnings,
(See page 17 )
15. Prolixninary productionn estimates are that the white
gorn` crop in,.u oslaviia will be less than ' he 100. 000 ton
commitment to Eapt and ay thorefor04 affect their cotton
procurnrnerit? rogram.
(See page 18 )
16. Although mar i o traffic between E,ropqan_ USSR and
the Soviet Far East increased substantin.1l durjig the first
six months of 2.950. the net increase in the Soviet Far Eastern
merchant fleet durinrtho, swna wriod was only twovessels.
Extensive additions to that fleet in the near future are not
required, either for economic or military purposes. Future
efforts will probably be directed toward the accelerated repair
of vessels now in the area, rather than toward any substantial
not increase in their number.
(See page 18 )
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17. Recant attacks~_aggainst the Social Democrats in
Hun r.rhave ~Y~een3med nat o
ly. at those who refused tocol-
laborate with the Communists but also at those who have been
theCommunistst most doci]_o D tsa The influence of Social
Democrats, from the President of the Presidium to the un-
skilled laborers, is being eliminated in an effort to stamp
out potentially dangerous opposition.
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(See page 20)
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Stalin welcomes Nehru?s fro os.ls
The Stalin-Nehru exchange of massages under-
scores the present Soviet tactic of promoting friendly
official relations with India in an attempt to encourage
Indian 1?noutrality" and to promote a rift between Indian and
Western leaders,- Since 14 January when Stalin, contrary to
his usual custom, personally received the now Indian
Ambassador, Soviet and Satellite diplomats have displayed.
especial cordiality to Indian officials both in Europe and
in New Delhi.
An additional reason for Stalinas ready accept-
ance of Nehrurs proposals is that Nehru advocated seating
the Chinese Communists in the UN, a major Soviet objective,
while avoiding any mention of the Security Council resolution
on Korea.. It has been alleged that Moscow requested Nehru to
make his offer of mediation and suggested some points to be
included. It is not surprising, therefore, that Nehruts
appeal was warmly received by Stalin and hailed by Soviet
propagandists as "backing the Soviet point of view without
reservations."
Another development which may be calculated,
at least in part, to conciliate Nehru is the recent change in
Indian Communist Party policy, Abandoning its tactics of
violence and sabotage, which have boon roundly condemned by
Nehru in India and on his tour of Southeast Asia, the Indian
Communist Party announced on 19 July that it would concentrate
on a united front "agrarian reform" movement. (SECRET)
USSR moves toward rossiblo
Mon olian unification
On the 29th anniversary of the founding of the
Mongolian Peeplers Republic (MFR), Kim Il Sung, Premier of
North Korea sent a congratulatory message to Choi Balsan,
Premier of MPR, in which he expressed the wish that the Mogol
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people "establish a now pooplo s entire Mongolia." In view of
the USSR9s pro-Mongol. policy and increased Soviet activity in
peripheral areas of the Far East, it is likely that the USSR
instigated the North Korean suggestion and will promote its
implementation. In addition to increasing the protection of
the strategic Lake Baikal industrial area, this dofonso-in-
depth measure would enable the USSR to: (1) strengthen its
position with regard to Manchuria; (2) exert pressure on the
Chinese Communists by control of the strategic approach from
Inner Mongolia to China; and (3) resist Chinese penetration
northward by Soviet support of a pan-Mongol bloc. Specifically,
Mongol unification would enable the USSR to bring under more
direct control, the region of Hulunbuir in northwestern
Manchuria and the area of the Inner Mongolian Autonomous Govern-
ment (MG) which' comprises western Manchuria and the northern
sections of Johol, Suiyuan and most of Chahar Province. It is
also possible that the USSR would delineate the boundaries of
a now Mongol state to include all, or at least additional
portions of Suiyuan and those areas in Ningsia and Sinkiang
populated by Mongols.
Soviet plans to orient all Mongols toward the USSR
crystallized following World War II. During the past year,
this trend has become more pronounced and is evidenced by
developments intended to enhance the position of MPR as the
nucleus for this project.' (Soo D/EE Weekly, 7 Apr 50). This
is illustrated by; (1) expanded international relations of
the MPR with Soviet Satellites in Europe and Asia, initiated
by the elevation to embassy status of the Mongol mission in
Moscow; (2) adoption by MPR of the Russian alphabet and expan-
sion of Soviet-Mongol cultural. relations; (3) gearing of the
administrative apparatus for more active functioning, evidenced-
by personnel shifts in the ministries of Foreign Affairs, Trade,
Education, Health and Defense, the latter headed by Major
General Zhanchiv, reportedly a former Soviet MVD officer; (Li.)
expanded communications in the form of a newly-completed rail-
way from Ulan Bator to the Soviet border and the Trans-Siberian
railway, the construction of airfields and the reported expan-
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lion of the radio network in the MPR; (5) increased trade ro-
l.ations, evidenced by a Mogol trade mission to Moscow and MPR
trade agroemonts with the USSR and reportedly; with IMAG.
zrthermore, the establishment in January-1950 of the IMAG
capital at Kalgan, not originally included in 7MAG territory,
while probably initiated by Poking, under unification would
give the USSR control of another strategic rail approach to
China.
Militarily, the USSR is interested in the protection
of the MPR, and according to one report, maintained an army of
60,000-70,000 Soviet troops there during World War II. Recently,
there have boon unconfirmed reports that the USSR has furnished
the substantial military equipment to the Mongols in Chahar and
western Manchuria.
The effect of Mongol unification on Soviet-Chinese
Communist relations is now only speculative. In view of mutual
Mongol-Chinese antagonism, it is not surprising that the Soviet-
inspired suggestion for unification originated in North Korea;
So long as Soviet-Chinose Communist relations remain friendly,
Poking may accept Soviet sponsorship of Mongol nationalism and
increasing Soviet encroachment on Chinese borders. Should
Sino-Soviet relations became strained, however, development of
such a plan would add to the friction. (SECRET)
SED Con res ceno of hi. *h lovq]
Tntornational. Communist talks
The presence of top international Communist leaders
from at least twenty-three parties at the SED Congress in Berlin
last weak indicates that, in addition to questions concerning
Germany, important international Communist plans were communica-
ted to the various ropresentativos, Although the attendance of
many foreign guest delegations at national party congresses is
not unusual, the SED Congress included many top Communists from
Europe, indicating the high degree of importance attached by the
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USSR to this particular meeting.
In addition to questions of mutual interest con-
corning Germany, it is likely that the foreign delegates were-
instructed by Suslov and Pospolov, the Soviet representatives,
concerning the present Communist peace campaign, the Korean
situation, and perhaps gonoral plans for now Communist campaigns
in Europe for fall and winter.
While speculation has hold that this gathering of
high ranking Communists either constituted a Cominform meeting
or was held in conjunction with a Cominform meeting, those
conclusions should be discounted. The representation was too
largo for a Cominform mooting, which is generally limited to
just the eight member parties, and since the ends of a Comin-
form meeting have boon achieved at the SED Congress (opportunity
for propaganda and transmittal of instructions), another high
level Communist meeting at this time would be superfluous.
(SECRET)
Possibility of SED ~~Ea .j Gorman Communist Park
entry injc _JR Cominfarm
The participation in the recent Socialist Unity
Party (SED) Congress of high-ranking Communist officials of
all Cominform countries raises the possibility of the entry of
the SED into the Cominform. SED entry would be a logical stop
in the formal integration of the Gorman Democratic Republic
(GDR) into the Soviet orbit, would in no way-be counter to
current Soviet tactics in Germany, and would, to some extent,
provide the Kremlin with a counter measure to West German
entry into the Council of Europe. East Gorman renunciation
of the Oder-Noisse territory and the right of Germans to ro-
settle in the Sudetenland has paved the way for such a develop-
mont. On the other hand, formal integration of East Germany
into the Soviet orbit is in no way contingent on SED membership.
in the Cominform. Albania, a full--fledged Satellite, has never
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entered it. No non-Satollite Communist Party, except the French
and Italian, is a member. Even the fairly important Communist
Parties of those countries (Finland, Greece and Norway) which
have contiguous borders with the Soviet orbit have never entered.
It may also be significant that no Communist Party has entered
this organization since its formation. Moreover, there has been
no public-agitation, which might well precede entry into the
Cominform, for membership by either the East German government
or the SED. On the contrary, the East German President stated
in a speech at the SED Congress that, while "firm ideological
ties" existed, the SED was not a member of the Cominform and had
no organizational links with it.
The development of the GDR as a "Peoples Democracy"
and its integration into the Soviet orbit is already progress-
ing along well-defined lines. A Soviet decision to have the
Communist Party of the German Democratic Republic (GDR) enter
the Cominform would not in itself foreshadow any now or startling
devolopment in Soviet tactics toward Germany. (SECRET)
USSR and ,fgphanistan stn iong?,erm "B"
trade agro~ ement
The 17 July four "your trade treaty with Afghanistan,
the first post-war long-term Soviet economic agreement with
this southern neighbors will enable Afghanistan to challenge
Pakistan still further, thus promoting tension and possibly armed
outbreaks in South. Asia. This will effectively further Soviet
objectives in this area. In addition the agreement more im=
mediately provides the USSR with: (1) desired raw materials,
including wool, cotton, and hides; (2) increased possibilities
for economic penetration; and, (3) propaganda material to sub-
stantiate the avowed Soviet policy of support, through trade,
of "backward" areas.
The agreement calls for an exchange of goods origin-
ally reported at 010 million but later quoted as $20 million each
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way during the life of the treaty. Trade in recent years has
boon running about 13,5 million each way. Afghanistan will
reportedly receive more critically needed gasoline than under
the 1948-49 agreement with the USSR. This is despite the fact
that, from the strictly economic point of view, the Soviet
Union cannot afford to export gasoline outside its Orbit, The
USSR is apparently selling the gasoline at a favorable price
and is paying a fair amount for Afghan wool. The USSR may send
Afghanistan agricultural advisers as well as farm machinery.
In addition, it is logical that, as a result of strained rela-
tions with Pakistan, Afghanistan sought an alternative trade
route. Moreover, it was reported that the Afghan trade mission
was scheduled to proceed from Moscow to Prague, to negotiate
for arms, ammunition, and possibly additional agricultural
machinery from Czechoslovakia, which previously supplied these
matorials.
The USSR may hope to gain political advantages in
return for such concessions, at least indirectly through Afghan
intransigionco towards Pakistan. Soviet or Czech economic
advisers - if admitted by Afghanistan in sufficient numbers as
a result of continued economic pressure from Pakistan - could
constitute an effective instrument of penetration and could
counter Afghan reliance on Western advisors. The USSR has
evidently seized the opportunity provided by the Afghan-Pakistan
situation to boost Soviet stock in Afghanistan' to assure a
continuing flow of materials from that country, and to increase
Afghan economic dependence on the Eastern Orbit. (SECRET)
Soviet tank car shorttames
not_ acutally critic,
Periodic shortages of tank cars in the USSR have
been reported, but their size and importance are of only limited
significance in peacetime. Requirements for rail transport of
petroleum, are heavy during the spring when the ice-locked rivers
of the Soviet Union cannot supplement rail movements. Consequent
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ly a temporary delay occurs which is gradually cleared up in the
warmer months of April and May,
The Ordzhonikidze System was reported in March 1950
to be "10,000 tank car loads behind plan for the past year."
This is the maxumuri number of such cars reported for the USSR,
however it represents only a small shortage based on total
petroleum production and movements and was apparently made good
on other routes,
The 8,200 average daily carloadings of petroleum
in the USSR demonstrate that the local and usually seasonal
shortage of tank cars represents no large deficiency. Although
shortages of tank cars are sufficiently serious to warrant
Soviet managerial attention, it is not a crippling shortage on
the present Soviet scale of petroleum movements, Petroleum
production is believed well ahoad of plan and shortages even in
the most critical periods arc probably loss than five percent
of the cars loaded daily. (SECRET)
EASTERN EURO M,
GENERAL
Soviet infiltration in Satellites "Blf
strcnrth~ns Kremlin ,controls
The probability that considerable numbers of Soviets
have boon infiltrated into the Satellites during the postwar-
period is strengthened by a recent report' estimating that 4,000
Soviet civilians are in Bulgaria and 30,000 or more each in
Rumania and Hungary, spread throughout the countries. Presumably
they are in addition to those Soviet citizens who have boon
admittedly brought in as military advisors, army personnel
permitted to the US, to maintain its lines of communication, and
ttspocLallsts" invited by the puppet governments to assist local
mini.strios. Those estimates may be high, but both official and
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covert sources have from time to time made similar reports,
particularly in 1.948 when the USSR was forced by the Peace
Treaties to reduce the size of its forces or remove its troops,
The Soviet penchant for giving a gloss of legality
to its moves to strengthon control of the Satellites could
easily extend to the granting of citizenship to those Soviet
civilians. Since 1948 Hungary has had a provision in its citizen-
ship law permitting the Minister of Interior to waive the three
year residence requirement and immediately naturalize aliens
"if the naturalization is justified by serious state interests.',
It has boon reliably reported that in May 1950 Bulgaria similarly
amendod its l.aw; and it is probable that Rumania also has such a
provision.
Asido from the possibility that, in the event of war,
many of those ox-Soviets might supplement Soviet-Satellite armed
forces, their presence among the native population would be
extremely valuablo to the Kremlin for information purposes, to
spearhead propaganda activity, and to control local disturbances,
(SECRET)
RIJM NIA
Rumanian ovorru:lent issuos docrrc "B"
pooling aa 1 otp of a ricul turlmland
The socialist transformation of agriculture in Rumania
was carried one stop further by tho recent publication of a govern-
ment decree which provides for the pooling of small and scattered
plots of farm land, and their acquisiton by "working peasants,"
tillage associations, collective farms and State agricultural
holdings.
The small plots involved in pooling or compulsory
land exchange are, generally speaking, such sections of good land
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not taken from their owners by previous expropriations, or
which have not already boon put into collective farms. Several
different procedures are provided for pooling, none of which
takes into account the dosires of the owners. A successful
peasant may thus be required to give up the land he has cultivated
and improved and take, in exchange, a plot of exhausted land from
one of his neighbors.
This pooling of small plots may prove to be the
bitterest blow thus far aimed at the moderately successful
Rumanian peasant (kulak). The decree$ added to the pressures
already being exerted upon the kul.aks, may tend to increase ro -
ported acts of sabotage and outbreaks of violence. Such acts of
violence anad sabotage, however, will probably remain localized,
(CONFIDFI`ITIAL )
Further rea mnization 2f Rumanian
domestic trade yexpcatod
nBn
Dislocations in the Rumanian domestic trade system,
which have occurred sporadically over a long period of tine,,
continue in spite of reorganizations and personnel changes, The
Government has a definite interest in roctifying the situation,
particularly the continuing severe shortage of meat and other
staples. Supplies must be obtained for urban workers, and basic
production needs must be supplied to farmers.
To aid in increasing agricultural produce for urban
areas, a now compulsory crop quota collection program was intro-
duced earlier this year, and farmers were permitted to sell sur-
pluses direct to consumers. Now the Government claims that the
cooperatives have not acgiiirod a sufficient supply of 'the village
products, at least partially because of the lack of non-agricultur-
al goods nocessary to induce farmers to sell their products.
Further difficulties arose from the restrictive practices of the
state. commercial monopolies and their competition with cooperatives.
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In line with the recent editorial in Scanteia
by Secretary Vasile Luca, of the Rumanian Workers ^Party
~
"decentralization" of state commercial monopolies, measures
for the improvement of the organization of the activities
of both state and cooperative enterprises, closer control of
private and clandestine trade, and the encouragement of small
private and handicraft production are anticipated.
Since this year's production of cereal crops is
expected to be larger than that of last year, the Government
will probably try to implement the above measures as soon as
possible in ordor'to supply rural areas with goods to draw
off the farm surplus above collection quotas. Hence, unless'
increased exports reduce the supply available for domestic con-
sumption, the urban population should receive more agricultural
products, particularly grain, during the 1950-51 consumption
year. (RESTRICTED)
Xugaslav cconcern_oer passLble Soviet aggres vivo
intentionsaa rently rpwin,
Although the Yugoslav Government officially has not
displayed anxiety over the possibility of a Soviet-inspired
attack, the growing Cominform propaganda barrage against Yugo-
slavia as a US base for attack on the "People's Democracies"
has apparently begun to cause some concern in Belgrade, The
Tito Government is well aware that its ideological deviation
from the Kremlin marks it as the primary target for Soviet
aggression in the Balkans, especially in view of the lack of
success of past Soviet pressures, Recent reports indicate
that the Yugoslavs may now be strengthening their security
troops on the eastern frontiers and undertaking precautionary
civilian defense measures in the capital. In order to refute
Cominform allegations of Yugoslav aggressive plans, the Yugo-
slav Committee for the Defense of Peace has issued a call for
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inspection trips of the country by Western leftists and Peace
Partisans. Despite these indications of increased concern,
however, the Tito Government is unwilling to request direct
military assistance from the West, allegedly because it fears
that such aid would tend to substantiate Cominform propaganda
and might be taken by the USSR as direct provocation.
Although the flow of reports regarding the imminence
of Soviet aggression against Yugoslavia continues at a somewhat
reduced rate, those reports have not boon confirmed by US or
Allied observers. On the other hand, it is generally agreed
that significant quantities of Soviet military equipment have
boon introduced into the Southern Satellites.
A recent reevaluation of Satellite military capabil-
ities points to the probability that the Satellite Armies alone
would still be incapable of successfully bringing about the
defeat of Yugoslavia, even if Satellite troops were provided
with available Soviet armor and equipment. At best a Satellite
attack would force the Yugoslav-Army to withdraw to a good
defensive line in the mountains, provided that an adequate and
prompt flow of supplies arrived from the West.
Current estimates indicate that Soviet forces at
least double those now present in the Cominform countries on
the Yugoslav poriphery would be required to launch a Soviet-
Satellite invasion of Yugoslavia with a reasonable prospect of
successfully overrunning the country. Official reports from
Austria, Germany, the USSR, and Eastern Europe, however, are
generally negative with respect to the rumored Soviet troop
buildup in the Soviet Satellites adjacent to Yugoslavia. On
the basis of available evidence, Soviet troop strength in the
Balkans has remained relatively unchanged during the past six
months, with two divisions each in Austria,'Hungary, and
Rumania, and a Soviet military mission of 2000-3000 in Bulgaria,
However, Bulgaria and Rumania must be considered largely as
"unknown quantities" in which rumored military activity can
neither be readily confirmed nor disproved,
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Because of the poor prospects of a quick victory.,
it is considered unlikely that the USSR would inspire a
Satellite attack on Yugoslavia in the immediate future, In
view of strong Yugoslav defensive capabilities, it is improbable
that such victory could be obtained without the commitment of a
sizable force of Soviet troops. Unless the USSR is prepared to
commit its own troops, or would be content with only a limited
initial objective, it appears unlikely that a Soviet-Satellite
attack on Yugoslavia is imminont, (SECRET)
Weather in Yugosl via ,havin adverse of ect ""Alt
v on 1 ;ricltur l roduction
u
The deficiency of soil moisture during the spring
months, climaxed by a week (July 2-7) of high temperatures and
dry winds will probably have serious effect upon Yugoslaviats
spring planted crops. Rye and barley,, which were already
harvested, escaped serious damage. The wheat crop, although
mostly harvested by now, was slightly reduced by accelerated
ripening. According to tentative estimates by U.S, officials,
the most serious damage was suffered by early potatoes, corn,
hemp, sugar boots, and oats.
Preliminary estimates have reduced the hemp, oats,
and early potato crops by 50 percent and sugar boots and corn by
possibly 25 percent. Unless preliminary estimates are greatly
in error, it seems reasonably certain that there will be no
significant exportable surplus of corn. There may oven be a
deficit. Hemp and hops are among other crops of which exportable
supplies will be reduced both in quantity and quality. There has
been no official recognition of the problem. All published state-
ments indicate a normal crop. Obviously, official announcement
of possible food shortages might cause public uneasiness.
The most important effect of the shortage will be
decreased exports, with a consequent reduction of Yugoslaviats
foreign exchange. (CONFIDENTIAL)
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Insufficient Corn c maaffect
Yugoslav cotton _I~rocurci:xont
>B1t
Prolirzinary production estLiatcs are that the white
corn crop in Yugoslavia will. be loss than the 100,000 ton com-
mitraont to Egypt and may therefore affect their cotton procure-
mont program, An agree ent was recently mode to sell Egypt
100,000 tons of white corn, The terms are similar to those of
the 1949 contract which has not boon, completely fulfilled. White
corn is grown specifically for Egypt, whereas the corn generally
produced in Yugoslavia is of the yellow typo.
In view of the fact that no additional acreage was
planted to white corn during 1950 and that soil moisture in the
region whore this corn is being produced is wall below normal,
indications are that the crop will probably be 25 to 50 percent
below the planned production of 100,000 tons. Since Yugoslavia
depends upon Egypt for a large share of her cotton imports, this
may force the govornment to use critically needed foreign
exchange for the purchase of cotton in order to supplement the
loss in the planned procuromont through the sale of white corn.
(CONFIDENTIAL)
SPECIAL ARTICLES
USSR ilorhapt .i~ovemontsr botwoen Eu ; oraean US i,
and Sov of FarsY~East Januarv-Junco 1910
In 19!9 the movement of Soviet merchant vessels between
ports of European Russia and those of the Soviet Far East suggest-
ad a troizd toward the expansion of the Far Eastern merchant fleet
at the oxponso of the Baltic and Black Sea fleets. Evidence avail-
able for the first six months of 1950, however, indicates no ac-
coloration of that trend, nor does it show any very significant
-18-
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changes in the typo of goods carried to tho Soviet Pacific ports
by the Soviet merchant marine. Traffic, however, was much larger
in volume.
During 1949 twenty-six Soviet merchant vessels of
1.000 gross tons and over sailed for the Soviet Far Ea't, while
only eight ships made the voyage from the Far East back to
western and southern Russia, thus giving the Soviet Far Eastern
morchannt fleet an apparent net gain of eighteen ships in 1949:
During the first'six months of 1950 twenty-two vessels of 1000
gross tons and over movod,cast and sixteen west; most of them
wore between 5000 and 8000 gross tons. The not gain in the
Far East was, therefore,, six vessels,, or just ovor two percent
of the total number based in the area. Of these sixi four wore
now, 1100 gross ton cargo vessels delivered by Hungary to the
USSR for use in the Far East, Apart from merchant vessels of
1000 gross tons and over, seven fishing schooners, built in
Finland and delivered as reparations, moved to the Far East via
the Panama Canal; two other fishing craft wore transferred from
the Black Sea to the Pacific; and three floating drydocks wore
towed from the Baltic to the Far East. This last addition is
significant in that it represents a potential increase in the
Soviet Far Eastern fleet capacity to facilitate an accelerated
rate of repair for vessels in the area. Another possibly sig-
nificant movormtont, now underway and therefore not included in
the above. totals for January-June, is the transfer to the Far
East of the nowly-ropairod ox-German liner Asia. The vessel,
with a passenger capacity of 1000, passed Port.Said in ballast
on. 5 July.
Although eastbound merchant shipments did increase
from two transits each in February, March, and April to five in
May and eft in Juno, while westbound shipments declined from
four in March and April and five in May to one in Juno, cargos
carried wore not unusual. Flour, salt, cement, one shipment of
manganese ore, and two tanker loads of Diesel fuel movod east
du ing the six months period; westbound cargos through Juno
1950 included rice, soy beans, paper, and rubber. The movement
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of tugs and landing craft from European USSR to the Far East
was roportod, but in small numbers only; namely, fourteen land-
ing craft and four tugs.
Except for the drydock movement, the first six
months of 1950 revealed little of strategic or economic signifi-
cance in Soviet merchant ship movements between eastern and
western USSR. The trend in May and Juno was definitely toward
heavier eastbound traffic, but at present it does not appear
likely that the not increase in the Far Eastern merchant-fleet
in 1950 will exceed that registered in 1949. Some 1,000,000 gross
tons or 55 percent of the total Soviet merchant fleet'is based
in the Far East at the present time, and economically, Soviet
waterborne trade within the area is not largo enough to justify
further expansion. Furthermore, it is unlikely that many
additional merchant ships are needed in the Far East to support
possible military action in that locality. Future efforts will
probably be diroctod toward the accelerated repair of vessels
now in the area, rather than toward any substantial not increase
in their number. (SECRET)
:un arian Social Democrats under fire
Recent measures takon to reduce Social Democratic
influence in Hungary again clearly reveal the duplicity of
Communist tactics. The forced resignation of three former
Social Democrat cabinot'ministors, the arrest of popular
Social Democrat leaders, who, although purged from the Social
Democrat Party for their opposition to the verger of tho'Social
Democrat with the Communist Party, have been unmolested for the
past two year. s, and the widespread attacks on Social Democrat
workers indicate that the campaign is not limited to the climinn
ation of a few individuals, but rather is directed at liquidating
the non-totalitarian left as one of the most dangerous potential
enemies of the regime.
The Communists, aware of the throat from a party
whose ideological appeal infringed on their own territory,
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began in 1945 to solicit the Social Democrats as allies. Early
failures (the Social Democrats refusal to join the Communists
on a joint list in the 191+5 elections) compelled the Communists,
with the aid of certain unscrupulous Social Democrats under the
leadership of Arpad Szakasits, to got rid of the recalcitrant
Social Democrats in preparation for the fusion proceedings in
1945. Once they had reduced the Social Democrat party to a
docile group, the Communists united the two parties into the
Hungarian Workers Party.
It wasntt long, however, before even those observers,
who felt that such closo cooperation with the Communists would
insure the continued existence of the Social Democrats, roalizod
that the merger had merely boon a trick to destroy not only the
Social Democrat- organization but also the mombors. For two
years (191+5-50), the Communists kept up the pretense that the
new Hungarian Workers Party was a joint party of Communists and
Social Democrats. The Communists loudly denounced accusations
that the mass screening of the HWP, instituted lx:miodiatoly
after the ? merger, was aimed at eliminating indigestible Social
Democrats, although the purge resulted in the expulsion of
200,000 members most of whom wore Social Democrats. Also during
this period, former Social Democrats wore gradually being weeded
out of Government and party positions. The number of Social
Democratic reprosontativos in J rliamont, compared to the number
of Communists, fell from two-thirds of the OP strength in 1945
to one-third in 1949
Social Democrats who. had boon instrumental in
delivering their party into the hands of the Communists and who
had boon rewarded with high government positions have now out-
lived their usefulness as Communist puppets. Thoy are being
replaced by real Communists in fulfillment of the Communist plan
to have all top government posts occupied by bona fide party
members. Thus., in the past four months Istvan Kossa, Minister
of X11-nanco, Sander Ronai, Minister of Foreign Trade, Istvan
Riosz, Minister of Justice, and Arpad Szakasits,, President of the
Presidium, have all boon ousted. It is reported that the last
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COMPMENTIAL
Social Democrat ror.'taining in the Cabinet, Cryorgy Marosan,
Minister of Light Industry, will be roplaced in the very near
future.
The great strength of the Social Democrats in the
Hungarian trade union movement was a strong deterrent to too
groat pressure on the party in the early postwar period. With
the unions now under their full control, the Comunists are
arresting the more popular Social Democratic loaders. Social
Democrat workers who have shown signs of independence, or who
are suspected of passive resistance,, are being arrested and
tried daily in workersI courts in factories throughout the
country. Thus, the fate that awaits oven collaborators of tho'
Communists in no better than that of their strongest opponents?
(CONFIDENTIAL)
CO I'? ENI1 .
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