CURRENT INTELLIGENCE REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79S01060A000100300001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 16, 2016
• Document Release Date: March 16, 2005
• Sequence Number: 1
• Publication Date: January 16, 1952
• Content Type: CIAPER

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VOL. 11 No. 3
16 January 1952 Copy No. ? 4
State Department review completed
DIA review(s) completed.
CURRENT INTELLIGENCE REVIEW
DOCUMENT NO. , 3
NO CHANGE IN CLASS
f 1 DECLASSIFIED
CLASS. CHANGED TO: T1SrS
NEXT REVIEW DATE:
AUTH: H 0M
DATE, V ? REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY OF CONTENTS
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THE SOVIET WORLD . . . . . . . . Page 14.
AIRFIELD DEVELOPMENT PROGRAMS IN EASTERN EUROPE . . . . . . . . Page 7
The scope of the Soviet airfield construction and develop-
ment program in Eastern Europe is such that the Red Air Force
can now operate from four times as many major fields as existed
seven years ago. In.l945,, there were in Soviet-controlled
Europe only 11 fields with runways of over 6,000 feet. Now
there are 45 such fields, with an additional 30 undergoing con-
struction to make them suitable for all types of operations.
(SEE MAP)
DELAYS IN EUROPEAN DEFENSE PLANNING CONTINUE TO HAMPER NATO ., Page 14
Although the European Defense Community negotiators are
now agreed on most points, several fundamental issues are still
to be decided. The current government crises in France and
Belgium are expected to delay agreement and may prevent action
on this question at the forthcoming Lisbon NATO meeting.
COMMUNISTS PLAY ONLY MINOR ROLE IN CURRENT PANAMANIAN
INSTABILITY . . . . . . . . . . . . . . . . . . . . . . . Page 16
The present Panamanian crisis began to reach serious pro-
portions last October when the notoriously corrupt former police
chief. Antonio Remon was nominated as a candidate izi next May's
presidential elections. This candidacy set off a particularly
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bitter campaign which has seriously divided the country and
poses a continuing threat to stability. In the event that the
government is overthrown,.the Communists may attempt to profit.
from the general disorder but there is no indication that the
party. has the potential for playing a significant role in
Panamanian politics.
SPECIAL ARTICLE. TEE CHILEAN COPPER SITUATION . . . . . . . . . Page 18
There has been considerable evidence in recent months that
the Chilealh Government is unable, and to some extent unwilling,
to assure the uninterrupted flow of its total copper production
to Western nations. How much and at what prices Chilean copper
will be available for Western defense needs in 1952 is at best
uncertain.
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The Soviet Union's concern over the Western rearmament effort and
the defeat of*recent Soviet disarmament maneuvers in the UN appear to
have led Vyshinsky to submit new atomic energy proposals to the General
Assembly in Paris.
The new Soviet resolution is a catch-all for such past Russian
proposals as those on NATO, Korea and a Five Power Pact. It contains
"concessions" on the questions of inspection and timing which are the
most vulnerable points in Moscow's demand for immediate prohibition of
the atomic bomb. However, the USSR is still asking the West to agree
in principle to prohibit the bomb without any assurance that agreement
on control or an adequate inspection system would be forthcoming during
subsequent long-drawn-out negotiations. The USSR would also remain un-
committed to verification of its own strength in conventional armaments.
While Vyshinsky and the other spokesmen of the Kremlin were talk-
ing about disarmament and relaxation of tensions at the UN meeting, TASS,
the Soviet news agency, was charging that President Truman's State of
the Union message provided further proof that the US disarmament plans
actually cloak war preparations, According to TASS, it is well known
that American leaders intend to extend imperialist aggression in Asia,
particularly in Indochina, and that they have no intention of agreeing
to a just and reasonable settlement in Korea.
Although the Satellite governments have recently been in the fore-
front of attacks on the Mutual Security Act, the USSR now has made it
the subject of a new protest to the United States. The Soviet Govern-
ment, which often asserts that it never interferes in the internal
affairs of other states, called upon the US to "take appropriate measures
for repeal of the above mentioned lawn
An unsigned article in the authoritative Soviet Communist Party
magazine Bolshevik asserts that western military programs are under-
mining the capitalist economies and that this situation "cannot but lead
within a short time to an economic crash." Since 1948, when the leading
Soviet economist Varga was forced to recant on his view that a Western
economic crisis would be postponed for at least a decade (until 1955),
Russian theorists have been careful to avoid any predictions of dates
when such a crash would actually occur.
Heretofore the party line had been that armaments expenditures
temporarily postponed the collapse of capitalism. It is difficult to
determine whether this expectation of a crisis within a "short time" is
published purely for propaganda purposes or actually includes some wish-
ful thinking by Soviet economists based on current British and French
financial difficulties.
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One of the most important of the Soviet Union's military-economic
construction projects, the Volga-Don Canal, is still scheduled to go
into operation in the spring of 1952 despite the fact that it is re-
ported to be short of five locks and three pumping stations. If past
Soviet practice is any guide, the canal will be proclaimed with great
fanfare to have been completed on schedule. However, present intelli-
gence indicates that the whole complex of projects which are included
in the plans for the Volga-Don Canal are unlikely to be finished this
year. Thus the strategic link provided by this canal which is to
connect the Black Sea with the Caspian, Baltic and White Seas will not
be effected until such time as the other projects are in fact completed.
Czechoslovakia, Rumania and Bulgaria have announced that their
state economic plans for 1951 were fulfilled, and that targets for 1952
are being substantially increased. Rumania claims that oil output was
increased by 20 percent over 1950 and that the heavy industry plan was
completed in eleven months, while Bulgaria boasts that overfulfillment
of the 1951 plan has created conditions for the completion of its Five
Year Plan in four years.
The Czech and Bulgarian claims are at variance with admissions in
October of failures to achieve third quarter goals but probably indi-
cate over-all success in achieving true 1951 production goals. The
citations of success, however, are designed to bolster the morale of
party workers, and at the same time to prepare the laboring force for
even more ambitious production goals in 1952.
As a feature of their economic plans for 1952, Hungary and Czecho-
slovakia plan to undertake major stockpiling programs. The Czecho-
slovak Government has announced that a large-scale buildup of state
reserves of the "means of production" will be undertaken in order td
assure plan fulfillment and to strengthen national defense, while Hungary
has set aside one billion forints (US $86,058,529) for stockpiling in
its 1952 budget. These plans suggest that, following the practice of
the USSR, the two countries may establish Ministries of State Reserves
in 1952. By the end of the year, 70 percent of Czechoslovak foreign
trade will be with the Soviet Orbit as opposed to 55 percent in 1950.
Simultaneously with the announcement of plans to reach higher pro-
duction goals in 1952, Bulgaria and Czechoslovakia are calling for
additional sacrifices from their people in order to aid the North Koreans.
Czechoslovak workers are being encouraged to work overtime and to con-
tribute the pay to a fund for aid to North Korean civilians. A major
Bulgarian drive for the collection of gifts and donations for the people
of Korea was undertaken on 3 January. A similar campaign was conducted
in Rumania between 24 November and 9 December but there have been no ex-
tensive campaigns for aid to Korea in Poland and Hungary since last sum-
mer,
plans for the production of MIG-15's
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in Poland are being drafted, while in Czechoslovakia production is al-
ready under way. Production in Poland is to consist of airframe and
engine assembly while the more complicated components of the planes will
be imported from the USSR. In Czechoslovakia, production reportedly has
begun and is expected to reach a maximum of twenty MIG's per month by
1 April. However, the US air attache in Prague believes that the Czech
aviation industry is incapable of attaining a production figure of twenty
MIG's per month before September, if then.
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AIRFIELD DEVELOPMENT PROGRAMS IN EASTERN EUROPE
The scope of the Soviet airfield construction and development
program in Eastern Europe is such that the Red Air Force can now operate
from four times as many major fields as existed seven years ago.
In 1945, there were in Soviet-controlled Europe only 11 fields with
runways of over 6,000 feet. The construction program, begun on a large
scab, in 1949, has increased this number to 47, and an additional 30
? are now undergoing runway or other construction which will make them
suitable for all types of operations. Another seven existing facilities
can readily be expanded. (See Map)
In all, the USSR has at its disposal in Eastern Europe and its
occupation zones in Germany and Austria a total of 323 airfields. In
addition, hundreds of abandoned World War II fields could be activated
in case of need. Soviet standards are generally lower than those of
the Western Powers for equivalent aircraft. Only airfields with run-
ways of over 5,000 feet -- considered by the Russians to be the minimum
length for TU-4 and sustained jet unit operations -- are covered in this
report.
Prior to 1949, the Soviet policy of improving air facilities in
Eastern Europe was limited largely to the rehabilitation of bomb-damaged
fields and the improvement of personnel, accommodations for civil and
military use in the Soviet zones of Austria and Germany as well as in
Albania and Hungary. However, some military construction was noted in
other ~atellites.
The acceleration of the Soviet program was manifested during 1949
in the start of construction on seven fields with runways of 6,000 or
7,000 feet in the Soviet zone of Germany, four in Czechoslovakia, and
two in Hungary.
Improvement of the East German airfield complex continued at the
same high rate in 1950, and the construction program was extended to in-
clude Bulgaria, Rumania, and Poland. The level of construction activity
was maintained through 1951, the largest number of projects being in
the Eastern zone of Germany, in Poland, and in Rumania.
The following airfields of Class I, II and III categories are cur-
rently available to the Russians in the Satellites and the Soviet zones
of Austria and Germany:
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CLASS I*1
Austria 0
Bulgaria 0
Czechoslovakia 5
Germany 12
Hungary 6
Poland 1
Rumania 0
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CLASS III
2
3
15
0 0
3 3
1 1
TOTAL 24 23 8
The 30 airfields which are now undergoing runway and other construc-
tion, and which will probably be suitable for either sustained or limited
heavy and medium bomber operations, are located as follows: Austria, one;
Bulgaria, five; Czechoslovakia, four; Ciurtgary, 'Itwo; 'Pbland'y ;etP;. ivu ile',
Blight; . ..
Indication are that the intensive construction program in the Soviet
zone of Germany is nearing fulfillment. There is evidence that rork'"will
soon be initiated on at least two sites in Czechoslovakia anc . Hungary.
The large-scale construction program in Bulgaria is proceeding at a
slower. rate than in the other Satellites.
The airfield improvement program in Poland did not progress as
rapidly as in other Satellites until mid-1950, when major construction
and rehabilitation were apparently begun on as many as 15 Polish fields,
and evidence points to an acceleration in 1952. In Rumania, eight long
runways are currently under construction and a plan for the development
of a total of approximately 60 runways is known to exist.
Albania possesses no jet fighter or heavy medium bomber airfields
Class I. Permanent surface runways of 7,000 feet and longer, suitable
for heavy, medium, and jet bomber operations.
Class II. Permanent or temporary runways capable of supporting limited
heavy and medium bomber operations and sustained jet fighter tactical
aupport operations.
Class III. Potential heavy and medium bomber airfields, currently '
capable of supporting sustained jet interceptor operations.
dotal includes Allied airfields in the Berlin area which would most
probably fall to the Russians immediately following an outbreak of war.
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LONG HARD-SURFACED RUNWAYS IN THE EUROPEAN SATELLITES :JAN 1952
0 inn gee
Airfields capable of supporting. sustained
operations of Heavy.Bombers/Medium
Bombers and Jet Light Bombers.
Runway length 7000 feet or more.
Airfields capable of supporting limited
operations of Heavy Bombers/Medium
Bombers and sustained operations of Jet
Tactical Support Fighters.
Runway length 0000 feet or more.
Potential Heavy Bomber/Medium Bomber
airfields presently capable of sustained
operations of Jet Interceptor Fighters;
improvable to Class I or Class 2.
Runway length 5000 feet or more.
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and no airfield development is known, but there have been recent un-
confirmed reports of the arrival of Russian aircraft.
The importance of the airfield construction and development program
to the USSR emerges in the readiness with. which Soviet authorities
divert men, machinery, and materials, vitally needed for industrial
rehabilitation and expansion, to the development of the system of air
basesin the Satellites.
The current intensive expansion in Poland of facilities for high
performance aircraft, and the reported construction of similar bases in
the Baltic area of the USSR, will provide airfields from which long-
range bombers could fly missions by the polar route for attack on US
industrial targets.
The construction of a chain of airfields stretching south from the
Baltic Sea toward the Black Sea greatly enhances the military capabili-
ties of the USSR by giving Soviet air force units in the Satellites
greater maneuverability and providing suitable air facilities for ex-
pansion of Satellite airforces. The airfield network also provides
bases for mounting air attacks from the Balkan countries against the
Middle East, from Polish and East German bases against the Scandinavian
countries, and from the German complex against England and Western Europe.
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DELAYS IN EUBDPEa-,, DEFENSE PLANNING CONTINUE TO HAMPER NATO
The.recent meeting of the foreign ministers of the six countries
planning a European Defense Community made considerable progress toward
solving the political problems which the technical-level Paris
Conference was unable t o decide. Fundamental issues are still to be
settled, however, and in view of the French cabinet crisis, there is.
little possibility that an agreement can be reached before the February
NATO meeting in Lisbon.
In the past two months the Benelux countries have modified their
attitudes extensively, and all the governments concerned now seem
convinced that the proposed European Defense Force can be realized. The
ministerial discussions narrowed the areas of disagreement stemming from
the basic conflict between the Benelux view of the European Defense
Community as a loosely knit coalition under the larger NATO pact,' and
the French-German-Italian concept of a unified political entity'which
may one day become a federation of European states.
The points at issue are not new. While the financial problem is
probably the most pressing, of greater importance is the distribution
of power between the executive organ of the proposed Defense Community
and the Council of Ministers representing the participating states.
Since agreement has been reached on a common budget for the final period
of development, the French-German insistence on common financing from
the first day will probably be accepted.
Benelux reluctance to invest the European Defense Community with
real authority continues to be a major stumbling block. The larger
countries have agreed to an executive commission, but insist that the
president of this group have a preponderant voice. The Benelux countries
would subordinate the commission to the council, thus ensuring national
control.
Additional issues include Benelux insistence on national control of
internal defense forces as opposed to Community control, as well'as the
question of the treaty's duration. Because the smaller countriep want
the emphasis on a close relationship between the Defense Communi~y and
NATO, they favor a 20-year pact to parallel NATO; France, Germany and
Italy prefer a 50-year treaty which will stress the permanent character
of the proposed Community and serve, with the Schuman Plan, as the
framework for a real European union. Furthermore, questions on Which
there had previously seemed to be substantial agreement, such as the
attempt to make the use of the defense forces depend on council
unanimity, may still cause trouble.
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While the French and Germans see eye to eye in general on t }e
defense organization, there is still dispute over security control
of German armament production and the German financial contribution
to defense. Adenauer and Schuman expect to iron out the first
difficulty in a fashion acceptable to the US and Britain, and the
French are inclined to accede to Adenauer's arguments that the second
should be subject to the criteria governing the other participants
and that the German contribution must not appear as a continuation of
occupation costs.
If the French and the Germans can resolve these differences, the
Benelux countries may allow themselves to be pushed into a suprs.-
national body sooner than they'had intended. Belgium and the
Netherlands resent the French tendency to blame them for any possible
failure of the project, and feel that Francelie trying to introduce a
federal structure through the back door. The Benelux Foreign Miiisters
have nevertheless endorsed the federation plan and can be expected to
sacrifice national prerogatives for an eventual political union. The
pressure American representatives are exerting on Belgium and the
Netherlands, and United States insistence on close ties between TO
and the EDC, will probably be the determining factors.
The technical discussions of the Paris Conference have resutied, but
the current government crisis in France will probably delay the meeting
the foreign ministers had expected to hold in January. Even if a new
government is formed before February, the French Assembly will want to
discuss Schuman's commitments before NATO acts on the basis of the
ministers' decisions. Therefore, while the eventual formation of a
European Defense Community now seems fairly certain, the present NATO
schedule cannot be met, and parliamentary hurdles must still be reckoned
with in all the participating countries.
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CONI4tJNISTS PLAY ONLY MINOR ROLE IN CURRENT PANAMANIAN INSTABILITY
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The Panama Government is highly unstable because (1) President Arosemena
is a weak executive with little popular appeal; (2) the presidential candi-
dacy of Jose A. Remon for the elections next May is highly controversial;
(3) anti-Remora forces are using Communist-linked student groups as one in-
strument for protesting against the candidacy of a "military" figure, ex-
police-chief Remon; and (4) deposed president Arnulfo Arias is maneuvering
to get out of jail.
The only apparent Communist contribution to the present instability is
participation in a current strike of school and university students. While
the strike has led to minor clashes,., it has not been supported by mass
demonstrations. The student strike began at the end of last October in pro-
test against Remon1s candidacy and influence with the administration. The
students reportedly are about evenly divided between the anti-administration
faction which supports the strike and the opposing pro-administration faction.
The two organizations which appear to be supporting the strike are
the Popular Revolutionary Youth. and the Patriotic Front. The Popular
Revolutionary Youth was formed in October 1950 by the Communist People's
Party and, at least prior to the current student strike, was politically
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unimportant_ Act of early 1951 this youth group had an estimated membership
The Patriotic Front, on the other hand,, is important politically.
It was formed in 1944 and claims the 7,500 adherents requisite for formation
of a Panamanian political party. Its newspaper, controlled by nationalistic,
non-Communist Harmodio Arias, is reportedly the most influential in Panama.
Its leader, Jorge.Illueca, is reported to be under Harmodio's influence.
Though a number of Communists have infiltrated the organization and have
made common cause with the chauvinist members in their political activities,
the Communists have been in control..of the organization.
The People's Party is not believed rgapable of making a major contri-
bution to Panamanian instability. ;Warty membership in recent years has been
estimated as approximately 800, but an estimate made in December, by the US
Embassy in Panama gives a figure of only 700.
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The high point of Communist activity in 1951 was the cost-of-living
demonstration on 10 July,. a Communist-inspired movement with widespread
political. support. An attempt to repeat the demonstration 2'C days later
was a failure., however,, despite the fact that there was no significant
change in the economic situation, Evidence indicates that the failure was
caused by exposure of the Communist leadership of the first demonstrations
The present crisis has its origins in the campaign for next May's
presidential elections. It began to reach serious proportions when the
notoriously corrupt former police-chief Remon was nominated last October.,
setting off a particular bitter campaign which has seriously divided the
country and which poses a continuing threat to stability, In the event
that the government is overthrown, the Communists may attempt to profit
from the general disorder., but there is no indication that the party has
the potential for playing a significant role in Panamanian politics,
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SPECIAL ARTICLE
THE CHILEAN COPPER SITUATION
There has been considerable evidence in recent months that the
Chilean Government is unable.. and to some extent unwilling, to assure the
uninterrupted flow. of its total copper production to Western nations.
This has been shown by Chile's divergence from certain terms of its
copper agreement with the US and its failure to cooperate fully: at the
International Materials Conference. There are indications that Chile
might even take steps to abrogate the US-Chilean agreement and possibly
withdraw from the International Materials Conference. For these reasons,,
it is now uncertain in what quantities and' at what prices Chilean copper
will be available for Western defense needs in 1952.
Chile is the world's second largest producer of copper and the largest
single foreign source of copper for the United States. Production during
1950 exceeded 360,000 metric tons, and the 1951 production may have been
slightly higher. Expansion programs may bring the output to over 400,000
metric tons in 1952. About 95 percent of this copper is produced by three
US-owned companies whose combined investments are estimated at 350 million
dollars.
In the first ten months of 1950, Chile supplied about 44 percent of
all US copper imports, and about 20 percent of United States consumption
in 1950. While Chile, like other foreign sources, supplied the United
States with less copper during the same period in 1951, it still
accounted for approximately 55 percent of all US imports.
No direct Chilean copper shipments to the Soviet Orbit have been
reported since May 1950. Italy, France, Brazil, Germany, and Britain in
recent years have taken major portions of whatever Chilean copper was
not taken by the United States.
In May 1951, the United States and Chile reached an agreement designed
to settle differences involving the two countries and the large American
companies. The agreement increased the price of copper sold to the United
States from 24.5 to 27.5 cents per pound and established a quota of not
higher than 20 percent of the large US-owned companies' production that
could, be exported by Chile to countries other than the US and also used
for local manufacture and consumption. According to the agreement Chile
was to take measures to assure that its exported copper will not be re-
exported, and to make no sales to countries which are potential enemies,
or for non-essential needs. The United States agreed to assist in carrying
out expansion programs by providing essential equipment and supplies and,
in the case of the smaller mining properties, to consider granting loans
and providing engineers.
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There is nothing in the agreement td prevent the shipment of all or
part of the Chilean free-disposal copper to the US. The Chilean Government,
however, has established a minimum price of 1,200 dollars per metric ton,
f.o.b. Chile, for free disposal copper as opposed to the approximate 606
dollars per metric ton for the 80 percent of large-mine production which
Chile agreed to make available to the United States.
Several factors on the Chilean domestic scene have militated against
the smooth operation of the agreement, and have had a decidedly unfavorable
effect upon the government's attitude toward serving Western interests.
First$ Chilean political parties since early 1951 have been working toward
the September 1952 presidential election, and the copper problem has be-
come an increasingly bitter political issue. The US-Chilean agreement is
unpopular, and strong criticism involving "the inadequate 20 percent quota"
and "the low price paid for copper by the United States" is being leveled
against the administration., the Washington government, and the producing
companies,
Second, Chile is short of dollars, Bad crops, the increased need to
supplement local food supplies by imports from other areas, inflation, and
the government's ineffectual economic policy have caused pressure towards
a higher price for copper instead of increased taxes. Finally., graft and
dishonesty among some high officials who stand to gain in copper deals
have probably contributed to the administration's ill-defined copper
policy.
Chile has diverged from the terms of the May agreement with respect
to export controls on its free-disposal copper and by not cooperating in
distributing exports for essential needs. Chile accepted the recommendation
of the International Materials Conference only with respect to the large-mine
production - that is, the production specifically available for purchase
by the United States.
In spite of assurances given in the agreement, and verbal assurances
by President Gonzalez Videla, the Minister of Economy and Commerce has dis-
played an admittedly noncooperative attitude on the matter of transshipment.
Using 1950 production statistics as a frame of reference, free-disposal
copper for the first year of the agreement would amount to approximately
100,000 metric tons., including the small and medium size mines' output and
some 27,000 metric tons allocated to local fabricators by ministerial
resolution prior to May 1951,
Quickly earmarked for domestic consumption were 5,000 metric tons and
between May and October 1951 the government issued allocations for more than
half of the free-disposal copper. No specific period for these allocations
was given. While the allocations have probably been changed, it is signi-
ficant that a substantial part of this copper was scheduled to go to countries
in which there are well-known transshipment points and in quantities consider-
ably in excess of normal exports to those areas. Further., there has been
considerable evidence of cases in which the Chilean Government has authorized
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the sale of free copper to European firms known and reported by US missions
as East-West traders;
In addition to the transshipment problem.,, there is the matter of
proposed legislation in the Chilean Congress which could militate against
certain terms of the existing agreement with the USJ* and which could
adversely affect the International Materials Conference recommnendation
on copper. One bill already passed by the Chamber of Deputies and
pending before the Senate provides that the President "will" periodically
fix. the export quota for copper to be sold by the large companies.. that
is the US-owned companies.
An article of another proposed law would authorize Chile to'make
sales abroad directly. The US Embassy in Santiago stated in December
that "a real danger exists" regarding this type of legislation' and that
it may be politically inexpedient for the Chilean Government combination
to accept any measure not containing something similar to the first
provision. Both provisions could pave the way for an increased diversion
of copper to the Soviet Orbit.
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Considering the Chilean position on copper in the last six months,
and in view of the approaching election, it is doubtful that the present
Chilean Government will cooperate on the copper problem unless'.it obtains
a satisfactory price increase from the United States.
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