WESTERN EUROPE DIVISION OFFICE OF REPORTS AND ESTIMATES DIVISION WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000400040009-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: September 24, 1998
• Sequence Number: 9
• Publication Date: May 31, 1950
• Content Type: PAPER

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WESTERN EUROPE DIVISION
OFFICE Or REPORTS AND ESTIMATES
CENTRAL INTELLIGENCE AGENCY
DIVISION WEEKLY
VOL. VI - No. 21
For week ending 29 May 1950
31 May 1950
NOTICE: WOR[NG PAPER
This document is a working paper, not an official
issuance, since it has not necessarily been co-
ordinated with and reviewed by other components
of ORE. It represents the formulativo thinking
of one group of analysts in ORE and is designed
to provide the medium for transmitting their in-
formal views to other intelligence analysts of the
US Government who are working on similar or over.-
lapping problems. It is intended for the use of
the addressee alone, and not for further dissemi-
nation.
DOCUMENT NO. .w.a
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COPY FOR:
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WESTERN EUROPE DIVISION
MEEKLY SUMNARY
VOL. VI . No . 21 For week e .ding
29 May 1950
25X6A
A Some hi ',,each officials are considering e new a ro .ch
to France s cry ',- ca c o r erg, w reby tr would ....
=if- ` ena 01 P-rZ7M e promotion of e ors is to the US
to the promotion of exports to Point IV areas, of the assumption of
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a large-scale expansion of the US Point IV program. Even If
this program does not grow, the French will try to find ways
of earning dollars other than by direct sales to the US
where they dislike the stiff competition, particularly
because of the high tariffs. Further, the French will attempt
to reduce their dollar requiromonts, by buying in non-dollar
areas some of the essential imports now purchased in the dollar
zones
In France, industrial and commercial interests would
react more favorably to this independent French program for
developing markets In "backward" areas than to the present US-
promoted campaign for exports to the US. Furthermore, these
business Interests would welcome the considerably brighter
prospects for export expansion without revolutionary changes
in traditional French production methods.
The disadvantage, in terms of US objectives, of the
contemplated French aprr oath to the dollar problem is that
it would remove the maximum incentive for the French to increase
their industrial productivity, a necessary improvement if France
were to compete intensively with US goods. On the other hand,
the new approach would mean progress toward the US objective of
greater 'multilateral world trade.
FRENCH AND SPANISH NORTH AND WEST AFRICA
B The French Govor~r . x;525.OOO from the
INCA S ecia esc r and cr verseas erritor .es Bevel. moat o
purchase so: onsorva on a iiipment for rench or fr c~a (?NA) ,
hopes to step up food production in that area to care for the
growing population. Although living standards in FNA, particularly
sanitary condition,, are bad in comparison with those in Europe
and the US, the improvements accomplished by the French have so
greatly extended the life expectancy of the natives (now about 35
years) that the netpopulation gain is almost two percent annually.
Algerians now have more than the world average of arable
hectares per person, but they will have considerably less if the
destruction of soils and the increase of population continue at
the present rate. The French intend, therefore, to increase the
productivity of the arable land, and to bring unproductive land
into profitable cultivation.
In 1941, the French Government declared the Algerian
watersheds to be areas of public interest and authorized they
imposition of measures to control erosion,. Legislation passed
at that time not only provides for initial efforts to arrest soil
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destruction, but establishes farming practices which must be
followed to assure the success of these efforts. Although
ownership and title to land remain with the individual,
property rights are altered to the extent deemed necessary
in-the public interest. The law authorizes this reclamation
work at public expense, but in actual practice the owner Is
required to contribute to the costs to the maximum extent
possible.
A soil conservation service has been created to
carry out this tiork, Which consists primarily of contour
terracing, Where such an investment is economically justifiable.
From 1942 to 1946 only 2,449 hectares were redeveloped. The
program was stepped up after the war, and at the end of 1949
work had been completed on V7,970 hectares of land. With the
funds from ECA, the French Government In 1950 hopes to carry
out its program for the development of 18,000 hectares.
It will robabi accept the general French invitation_
to join the Schu aan an for the pooling of coal and steel
nd~ases and tivi3 seed to have the pool directed primarily by
governmental representatives rather than by private interests.
Italy's insistence that the agreement be in the nature
of a "political cartel" stems directly from Italy's relatively
high steel and coal costs. Italy must Import a high percentage of
its coal and Iron ore. On coal in particular a dual pricing
system is operative in '.Europe, the exporting country charging a
higher price to the importing country than to its Internal users.
This system raises the costs to Italy not only of steel production
(which is now roughly 405 more costly than in France and Germany)
but also of all consumer products using steel or coal. Further-
more such consumer goods are in an unfavorable competitive
position relative to similar products of the coup-try exporting the
coal and iron ore. This is a major factor depressing especially
the Italian mechanical industry (now operating at only about 60;~
of capacity).
Italy may fear that, If the proposed pool were con-
trolled by private interests, not only might dual pricing be
continued in one form or another, but Italy might be placed at
a. further competitive disadvantage by the elimination of compe-
tition between German and French coal and steel producers.
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Italy may also fear that its grave unemployment situation
would be further aggravated. These considerations have
induced private Italian mechanical and metallurgical interests
immediately- to oppose the Schuman proposal a
On the other hand, if, under this plan, production
and prices are governmentally determined, Italy hopes to be
able to eliminate dual pricing, particularly if it is
an equal member of the governing group determining the price
and production structure and, possibly, the allocation of
markets.
If Italy can arrange a coal and steel pool to its
liking, it would then seek to extend such integration into
other economic fields, particularly those that would facilitate
the movement of excess Italian labor across national boundaries,
thereby relieving unemployment.
B Because of Carrr?nuni st ains in southern Italy since
1946, the Italian Government wi 1 or b press" Point TV
aid for that area a The great gap between the comparatively
high standard of living of north Italians and the very low
standards of south Italians has widened further since the prewar
years, according to a recent Italian survey.
that the percentage of active employed This survey found
total population in relation to
population has increased in the north and has decreased in
the south. As a consequence, the standard of living has risen
slightly in the north since 1936 while it has fallen appreciably
in the south d
he appeal of Communism in the two geographical areas has
changed accordingly. Although the north is still the primary
locale of Communist strength in Italy, such strength has declined
somewhat since 1946 in this area It has, however, gained in the
south, where these gains have been refl-'cted in Increased land
seizures and unemployment riots. this is a matter of particular
political concern to the Christian Democrats, as a large percentage
of their vote in the national elections of April 1948 carne from
southern Italy.
Factional conflicts in the Chr;1 .stian Democratic party
have prevented the passage to da:~ -f? a ?;orely-needed national
agrarian reform program. A '2 billioc., investment program, (0200
million per year for ten years) for the rehabilitation of south
Italy has been passed, and the government has evidenced its
intention of aggressively implementing it. Substantial though
this program is, however, it is small compared to the total sum
needed for a program which would appreciably raise the standard
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of living of southern Italians. Furthermore, Italy lacks
the technical staffs necessary for a large-scale improvement
program. The Government may be expected therefore to seek
loans or grants from the US, and increased, technical assistance
under Point IV to alleviate the situation in southern Italy.
THE VATICAN
The Vatican will reject ai -t ists
to secure the support orvarious Church organizations 36-r -Me
Soviet- sponsored peace campaign. The Vatican line toward the
Communist "peace" drive in Europe is suggested by recent
statements from the Austrian hierarchy and the Italian Catholic
Action, lay organization of the Vatican. In Austria, Cardinal
Innitzer's office has issued a statement warning that the
Catholic clergy has nothing in common with the Coramunist-
sponsored "Peace Council", in spite of the fact that previously
the Austrian bishops issued an appeal for prayers and sacrifice
for peace. The Cardinal: s statement urges Catholics to promote
peace through the "inherent forces of the Church." In Italy,
Where the Communist "Partisans of Peace" invited Catholic Action
to join them in signing their recent Stockholm "pe?mce" pledge,
Catholic Action responded with the statement: "Catholicism is
linked to a. message of peace Which is perennial but suffers no
criss-cross tactics and strategic changes with the switches of
contingencies." This statement is clearly intended to resolve
any confusion on the part of several groups--.those Roman.
Catholics whose neutral-mindedness has recently been expressed
in the French press, members of pseudo-Catholic groups, such as
those in Romania, who recently passed a resolution On wport
of the Stockholm peace proposal and Catholics in and
2lovakia who su port the ?I and
campa-gn.
the Pope himself believes war before 1932
to be a strong possibility. If international events reinforce
this belief, the Vatican will be increasingly anxious to combat
Communist attempts to weaken the anti-Soviet forces through a
f1peace" campaign.
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