FAR EAST/PACIFIC DIVISION OFFICE OF REPORTS AND ESTIMATES CENTRAL INGELLIGENCE AGENCY WORKING PAPER WEEKLY INTELLIGENCE HIGHLIGHTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000500040009-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 20, 2016
• Document Release Date: May 31, 2006
• Sequence Number: 9
• Publication Date: April 4, 1950
• Content Type: PERRPT

Approved. o;r Release 2907/
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CONFIDEN7'IA
iA?, EAar./PAUIFIC DIVISION
OFFICE OF RITORTS AND ES't`IMtLT:Z
CLiTrRAL INTELLIGENCE AGENCY
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NOTICE: This document is a working paper, not an official
CIA do.iments It has been coordinated within ORES
but not with the IAC agencies. It represents cur-
ront thinking by specialists in CIA: and is designed
for use by others engaged in similar or overlapping
atudiee. The opinions expressed herein may be re-
vised before final and official publication. It is
intended solely for the information of the addressee
and not for further dissemination.
State Dept. review completed
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OFFICE OF REPORTS AND ESTIMATES, CIA
FAR EAST/PACIFIC DIVISION
INTELLIGENCE HIGHLIGHTS NO. 94
29 MARCH to 4 APRIL 1950
SECTION I. SUMMARY OF FAR EAST TRENDS AND DEVELOPMENTS
Korea's President Rhea has put off the general elections sche-
duled for May, ostensibly in order to force Assembly action on thee. 1950
budget, but possibly through fear of a lose of poser (p. 2).
China's winter famine is now at its crest and several million
deaths are expected before spring and summer crops and the crisis
(p. 3). Meanwhile, conditions of unrest in South China, although gene-
rally exaggerated, appear to present something of a problem to the Com-
munist regime (p. 3).
Conflict within Vietnamese ranks for the honor of being most dis-
agreeable to the French is presently-troubling the shaky Bao Dal regime
(pd 4)o
The Burmese Communists have ousted their dissident allies and sot
up a "pure" administration at Prommze where, if they are untroubled by
the Burmese Government, they may be able to entrench themselves (p. 5).
East Indonesian have threatened to oppose the movement of USI
troops into their area by force (p. 6).
Huk guerrillas celebrated their eighth anniversary of Philippine
operations by a series of raids in Central Luzon--one of them on the
outskirts of Manila (p. 6).
NENPO'3T
Japanese riecononmy" bud eet.squeake through.. 25X6
.,Korea's Premier resigns. .Shang a ova- 25X1
cuees...Bangkok flag-showixzg cancelled...Peip g offers to recognize USI
...Australian labor reaction to strike ban.
The marginal notations used in succeeding sections of this m1esk1y
("A", "B", or "C") indicate the importance of the item in D/FE opinion
with "A" representing the most important.
~~~ ~~ ... reset yb
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SECTION II. DE"CLOP ,, iTS III SPECIFIED AREAS
&OAR
Elections postp onmd--On 31 March President Rhee notified the Korean
National Assembly of his intention to postpone the c umming general
elections from May to November. Since the Korean Election Law (re-
cently passed by the Assembly but not yet signed by the President)
calls for elections within 20 days of the expiration of the present
Assembly's term at the end of May, legal postponement of the elections
could only be accomplished by a Constitutional amendment. President
Rhee, however, speaks vaguely of "promulgating the Election Law, but
using my veto right on the date of the election."
The ostensible reason for Rhee's action, which, in effect, ex-
tends the present Assembly's term in office, is to force early Assammm-
bly action on the Government's proposed 1950 budget, -which was pre-
sented for Assembly aporoval on 27 March and was to go into effect
on 1 April. Assembly members, besides being anxious to recess for
electioneering purposes, were in no mood to accept the proposed bud-
get without. careful study. Faced with this hostile reaction, Rhea
informed the Assembly that he had no choice but to postpone the elec-
tions so that full time could be given to the urgent matter of budget
passage.
Rhea's attempt to force action on the "balanced" budget framed
with US advice -- may spring from a new Government awareness of the
critical nature of Korea's inflationary problem. A strong letter from
EGA Administrator Hoffman to Prime minister LEE Bum auk points out
that such a balanced budget is a necessary first step in attacking
inflation. Thus, if Rhea's action is a threat to induce quick Assem-
bly approval, and if the budget is passed this week, Rhos may permit
the elections to procede as originally scheduled.
There is reason to believe, however, that Rhes is usinthe bud-
get as an excuse to continue the terms in office of many pro-Rhos
Assembly members who do not feel confident of re-election in May.
Should Rhea stand firm on postponement of the elections, the move will
further widen the split between the Government and the strong opposi-
tion Demmmocratioa-Nationalist Party.- which hopes to win a' large majority
In the next election. Postponement would also undermine the confidence
of the Korean people in the sincerity of the Rhee government and the
and result would be both an acceleration of the present trend toward
authoritarianism and an increase in opportunities for the Communists,
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CHINA
Famine report--A summary of evidence regarding the present Chinese fa-
mine proves it to be a human disaster of major proportions. As early
as December 1949, the Peiping regime reported that 8 or 9 million
people had "nearly or quite exhausted their food stores". By Febru-
ary 1950, the number of people in a "distressed situation", as totallsd
from Communist press reports, was some 40 million. Ydhile the total
number of deaths from starvation and related causes expected before
the June harvests cannot be estimated with any precision, it will prob-
ably total several millions. The areas of greatest distress are in
the North China coastal plains, between Peiping and the Yangtze River.
All of Manchuria and China, except the western provinces, however,
suffered below-average harvests in 1949.
cost famine distress has been confined to rural areas. The Com-
munists, as anticipated, have managed to keep the large cities in East
and North China supolied with food, both by dumping grain on the urban
markets and by providing Communist organizations, workers, educational,
and certain other groups with food rations.
The famine has now attained its peak. Harvests of winter crops --
primarily barley and wheat -- will bring relief at the end of May in
the Yangtze "Palley area and June in North China? Meanwhile, other
factors will begin to bring some measure of relief even earlier. The
harvest of early May vegetables, although short on calories, will never-
thelesa take the edge off the famine, while the coming of warm weather
will reduce the need for as large a caloric intake as during the winter
months.
Peiping's reaction to the famine has been realistic for the most
part. The Communists have exhorted both populace and officials to
tighten their belts and work the. crops, and have claimed that an ac-
tive and partially successful campaign of famine relief is being car-
ried out on all levels of government. Although there has been a ten-
dency In some official statements to minimise the degree of distress,
or at least to aggrandize Communist relief successes, local Communist
press reports have continued to paint a black picture of disaster and
starvation.
Communist difficulties in South China-Recent reports that South China
is in a state of chaos and that the Chinese Communists are preparing
to abandon the area, are considered grossly exaggerated. Bandit, guer-
rilla and popular resistance to the new regime, however, appear to be
widespread. Moreover, there are indications that a decision has been
taken to decentralize the Communist South China administration by moving
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certain governmental functions from Canton to Kukong, some hundred
miles to the north, perhaos due to a fear of continued Nationalist air
raids or anti}-Communist guerrilla activity in the Canton area.
The economic disruption of South China meanwhile is a well- 25X1
established fact.
n eed, the Commun is have been conspicuously unsuccees-
ful in developing local enthusiasm for either their Victory Bond drive
or the drive for conversion of Hong Kong currency. Continuing military
operations in the area, moreover, have resulted in thelevying at a
oporessive Communist taxes on both rural and urban pop
time when local food supplies are some ten precent below average.
Popular antagonism to the Communist. in South China has arisen
both from such economic deficiencies as these and from the assorted
at,
oppressions of the now regime, which is both distraught and.,
lower levels, rather incompetent. The next rice harvest in June and
July will ease the local food situation, but the effects of the Nation-
alist blockade and of the maintenance of an unwieldy military machine
Thus while the Com-
munists continue until Hainan and Taiwan are ver taken.
Sou South China by military
are capable of keeping control
means, in the immediate future the South China outlook is one of con-
tinuing economic and political unrest, with the possibility that the
Communist program of land reform and political consolidation will have
to be indefinitely deferred,
iMOM A
Cabinet crisis in Vietna-Street rioting and press attacks, together
with the resignation of the minister of Defense and two under-secretaries
from Premier Nguyen Phan Longs cabinet during the past week, have weak-
ened the Bao Dal regime's shaky structure. Meanwhile, Vietnamese
leaders have attempted to surpass each other both in insisting that US
assistance be given directly to the Bao Dal government and in clamoring
for further concessions from the French,
Although Premier Long, himself, has strongly urged that Vietnam-US
discussions looking to military and economic aid be conducted free from
French interference and has attributed the most sordid motives to French
policy, he has been vigorously attacked by' elements of the Vietnamese
press which support Hao Dal but oppose Long personally, one newspaper accusing him of "lack of courage" in the face of French pro-
crastination and of alliance with disreputable persons-
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-5-
Similar accusations against Long were registered by the former
Minister of Defense, Phan flay twat, in his letter of resignation.
Both Quat and Governor Tri, of North Vietnam, have characterized the
8 March Accords with France as "outdated", and Tri has stated that he
considers these agreements (which form the basis of present Franco-
Vietnamese relations) were forced on the Vietnamese and are therefore
not valid. Trip Quat, and other opponents of Long are members of the
Dai Vist, a nationalist party with headquarters in the north, a fact
which suggests that partisan as well as nationalistic considerations
may be stimulating current Vietnamese rivalry for the title of "hard-
est man on the French".
Premier Long has hinted that the recent resignations were insti-
gated by the French in order to destroy him politically, and that the
French have been putting pressure on Bao Dal to effect his removal.
A special trip by High Commissioner Pignon to Bao Dams mountain hunt-
ing retreat, together with French maneuvering to bring about larger
Catholic representation in the cabinet (lay leader Ngo Dinh Diem has
long been favored by some French officials as eventual Prime Minister)
tend to bear out this contention.
B
Communist oou in Burma-The recent successful cup by the Burma Com-
munist Party (BCP) which ended its partnership with the left-wing
dissident People's Volunteer Organization (PVO), has resulted in the
establishment of a purely Communist "Government" at Proms in central
Burma. BCP Secretary-General, Thakin Than Tun,.has been installed as
"Premier". The Communist action may have been designed to forestall
a counter-ooup by PVO leaders, who had been growing increasingly re-
sentful of both the BCP'a domineering attitude and its subservience to
Chinese Communist influence..It is quite possible, however, that the
move derived from a BCP desire to qualify for international Communist
assistance by establishing that "base of operations" specified by So-
viet and Chinese Communist theoreticians as essential for ultimate
"liberation". In any case, the Communists have now seized the adminis..
trative machinery of the People's Democratic Front, the organization
within which they were allied with the PVO, and probably have assumed
control over a large part of the territory formally administered by
this coalition. By arresting "unreliable" PV0 leaders and ridding
themselves of many independent-minded PV0 followers, moreover, the
Communists may have hoped to develop a smaller, but more effective
political and military organization, capable of gradually expanding
its authority in a manner modeled after the Chinese Communists.
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-6-
All things considered, however, the BCP is still deemed in-
capable of overthrowing the existing Burmese Government. In fact,
the Communists have probably weakened themselves, at least temporar-
ily, by alienating their PVO sympathizers. Nevertheless, the BCP
is the logical recipient of any international Communist assistance,
and there are strong indications that the Communists are anticipa-
ting such aid from China. If left unmolested by the Burmese Govern-
ment during the approaching monsoons, the BCP, probably could consoli-
date the area it now controls and develop a position which would be
difficult to destroy -- especially if international aid were forth-
coming.
INDONESIA
Unitary state move meets resistance--The campaign by the principal
Indonesian state, the former Republic of Indonesia, to transform the
federated USI into a unitary nation (by absorbing all other constitu-
ent, units) is meeting vigorous resistance in the important state of
East Indonesia, where many officials feel that immediate and force-
ful absorption by the Republic would mean domination by the Javanese,
who differ ethnically and culturally from the East Indonesians, and
the breakdown of present conservative traditions.
A recent USI announcement of plans to send troops to East Indo-
nesia has been viewed with great alarm, since, in instances where other
states have been absorbed, the groundwork was prepared mainly by USI
Army units who are sympathetic toward the unitary movement. Fast
Indonesian President Sukawati and his subordinates immediately stated
that they would resist the move with force and, by implication, threat
erred to use the 1,000 state police under Fast Indonesian control for
this purpose, as well as the 9,000 Dutch colonial troops (KNIL) who
have not yet been integrated with the USI forces. Although a USI--
Republic-East Indonesian conference has been scheduled for 8 April
to settle the problem, the USI order dispatching the troops to East
Indonesia has not yet been cancelled, and the East Indonesian's. threat
of armed opposition to the move has not been retracted..
PHILIPPINES
Huk violence--Thai Philippine Government has alerted all law-enforcing
agencies and placed the island of Luzon under military control as a
result of Huk violence which engulfed central Luzon provinces during
the past week. In a series of well-coordinated raids launched on
29 March, purportedly to commemorate the eighth anniversary of the
Huk movement, guerrilla bands swept through central Luzon villages
seizing arms and food supplies. At latest report, the death totalled
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68, scores were wounded and several villages were left in ruinso
The Philiopine Armed Forces, placed in complete control of Luzon on
Saturday, have not yet reported contact with the Mks, Meanwhile,
Army and Constabulary forces are manning guard posts outside the capi-
tal city of Manila while suburban and the city police are checking
all travelers and traffic.
The recent Huk forays were accompanied by Philippine Communist
propaganda inviting "every possible aid to the People's Liberation
Army tHuk and other liberation forces." Propaganda leaflets at-
tacked the US and the Philippine Government as a puppet of American
imperialism.
The recent Huk attacks were apparently timed to take advantage
of confusion in the Philippine Armed Forces resulting from current
reorganization plans to separate police and military functions. The
military reorganization, which was to precede a coordinated anti-Huk
offensive, has apparently been halted temporarily by the Hu1c violence
-- a move which may well favor the dissidents who were able to replen-
ish their supplies in preparation for sustained resistance. The Huk
raids probably also had an unfavorable psychological effect on the
local populace by further reducing confidence in the Government's
strength, The well organized outbreak indicates that Communist leader-
ship of the dissidents is becoming more effective and the daring of the
raids -- one of-which took place at the outskirts of Manila itself ---
suggests that the Huks are fully av ar? of the Govornment's ineffective
security measures,
NEWS NOTES
The Upper House of the Japanese Diet finally passed the 1950-1
budget on 3 April after lengthy debate. The margin of passage (9
votes) represented the TOSHIDA Gover ment's narrowest squeak in two
years. Despite SOAP insistence that the budget follow the disinfla-
tionary policy of the Dodge program, Diet opponents claim d that the
measure was forcing undue hardship upon labor and upon small enter-
prises. Passage virtually closes the or on efforts by the Democra-
tization League to effect increases in the basic wage level, and will
weaken the efforts of moderate trade union leadership to prevent a
resumption of Communist influence in the labor movement,
The President of Tokyo Universik, NAMBAftA Shigerea, whose poli-
tical viewpoint is reputedly conservative but whose interests have
been largely limited to the academic field, sounded a sour note on
the subject of a peace treaty for Japan in a graduation address on
=T
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28 March. Advocating world-wide repudiation of war, free access to
all raw materials and humanistic revolution to solve the cold war,
NAMBARA spoke of the dangers of a separate peace for Japan and
asserted: "As to entering into military alliance with any power or
powers or leasing of military bases on our soil, such action is tan-
tamoant to plunging the whole world into war."
Korean Prime Minister LEE Bum Suk has resigned at President Rhee's
request. (thee plans to nominate LEE loon Yung for the post and has
stated that he Intends to replace the present Ministers of Education,
Transportation, and Finance as well. LEE Yoon Yung, Rhee'a original
choice of Prime Minister in 1948, was. rejected by the Assembly at that
time. LEE's confirmation at this time is doubtful and Rhea's next
choice may be SIN Sungmo, present Defense Minister. The Cabinet
shuffle appears to be a Rhea move to eliminate Democratic-Nationalist
representation in his administration - a further indication that his
move to postpone elections steps from a fear that the Democratic-
Nationalists would roll up a substantial majority and thus threaten
his control.
The US evacuation of Shanghai may yet be conducted through Tien-
tsin or Canton. Reports indicate that the Communists have decided to
lift the ban on train travel by foreigners, an action which would per-
mit Shanghailanders to exit from other mainland cities. Meanwhile,
the "General Qordon" has continued on to Honolulu, and negotiations for
a surface evacuation from Shanghai, via Alacrity Anchorage trranshipnent,
continue. The US Manila Liaison Grou has been charged with the pro-
: of securing evacuation shps
The tS naval air demonstration over Bangkok on Coronation Day has
been cancelled at the request of Thai. Prime Minister Phibul and the
former Regent,, Prince .Rangaito Reasons: (1) a foreign aerial demon-
stration at an essentially religious ceremony lacks propriety; (2) in
view of the tense situation in Southeast Asia., the flight might be mis-
understood. Thai apprehensions on this core may have been aroused by
the recent hostile demonstrations during the visit of two US destroyers
to neighboring Saigon.
+CRET
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The "Peoples Republic of China" has notifiod the United States
of Indonesia by letter that it is now ready to open diplomatic rela-
tions with Indonesia, according to a Dutch prose announcement from
Djakarta. The same source reports that USI Premier Hatta stated that
the Indonesian Government is also ready to establish relations with
Communist China.
Leftist Australian labor reaction to the Government's strong
action against the Communist-led Brisbane waterside strike has not
been uniformly favorable. A mass meeting of the Brisbane dockers
themselves on 29 March confirmed the decision of their union leaders
to call off the rolling strike and submit their claims to arbitration.
However, the dockers demanded settlement of their dispute within a
month and resolved that if their claims were not met by 29 April,
they would resume the strike action- In New South Wales., meanwhile,
where Communists are particularly strong in the miners' unions, coven
coal mines reportedly ceased operations on 28 March as a protest against
the Government's Brisbane action. Moderate labor groups, thusfar, have
made little comment on the Government's action.
CONFODENTIAL
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