CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A001700350001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: December 15, 2016
• Document Release Date: May 25, 2004
• Sequence Number: 1
• Publication Date: September 24, 1954
• Content Type: REPORT

CDI rn
24 September 1954 1, _e
opy No.
DATE: 2-010 -REVIEWER: J
NEXT REVIEW DATE:1O1
AUTH: HR 70-2
CURRENT INTELLIGENCE LLETIN
DOCUMENT NO.
NO CHANGE IN CLASS>
I J DECLASSIFIED
CLASS. CHANGED TO: TS S C"*^?
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
30
25
0
State Dept. review completed
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SUMMARY
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FAR EAST
2. Yoshida reported ready to transfer premiership to Deputy Prime
Minister Ogata (page 3).
3. Comment on resumption of heavy Communist shelling of Quemoys
(page 4).
4.. Large Chinese. Communist purchase of life belts in Hong Kong
confirmed (page 5).
SOUTHEAST ASIA
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5. Bao Dai offers Vietnamese premier "freedom to resign" (page 6).
SOUTH ASIA
T. Comment. on changes in Pakistani government structure (page 7).
WEST,RN EUROPE
8. German .coalition leaders see Mendes-France plan as "intention-
ally unacceptable" (page 8).
LATIN AMERICA
9. Guatemalan assembly to be chosen in rigged elections on
.10 October (page 9).
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FAR EAST
2. Yoshida reported ready to transfer premiership to Deputy Prime
Minister Qgataa
Shigeharu Matsumoto, a close confidant
and adviser to Prime Minister Yoshida,
thinks that following his world tour
Yoshida will be able to arrange for his
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"peaceable" retirement and for "handing the baton" to his
chosen successor, Deputy Prime Minister Taketora Ogata.
Matsumoto told Ambassador Allison on 22 September that
Ogata, as new Liberal Party leader, would have the support
of influential conservatives Ikeda, Kishi_ and Ashida, and that
a majority of the Progressive Party would come over to the
Liberals.
Comment. Ogata has long been re-
garded as the most likely successor to Yoshida. A former
newspaper man and for many years the editor of a leading news-
paper, Ogata was an influential member of several cabinets dur-
ing and immediately following the war. Despite his purge during
the occupation, he is considered friendly toward the United States
and the West.
Yoshida's voluntary retirement would
remove a major obstacle to conservative unity. There is little
prospect, however, that Ogata could for long control the schisms
within the conservative movement, with its tradition of personal
loyalties and bitter rivalries for power.
3. Comment on resumption of heavy Communist shelling of Quemoys:
not yet known, but Nationalist casualties included 20 killed and 62
wounded.
pointig on a eastern end of the island where Nationalist artillery
is located, and along the western coast as far south as Quemoy
town.. Total. damage done to Nationalist military installations is
Communist artillery near Amoy resumed
its heavy shelling of the Quemoy Islands
on the evening of 22 September. Approxi-
mately 3,600 rounds were fired in much
the heaviest shelling of the islands since
the opening Communist barrage of 6,000
rounds on 3. September. The shelling of
Big Quemoy was concentrated on two
Sporadic and reduced Communist shell-
ing of the Quemoys after 3 September, together with Communist
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propaganda treating the first phase of the operation as com-
pleted, had suggested that Peiping had no desire to intensify
military operations against the island. The renewed shelling
may be in response to continued Nationalist air and sea strikes
on the Amoy area and may presage strongerCommunist mili-
tary action in that area, including the use of air power.
There are still no signs that the Commu-
nists are concentrating forces for an invasion of the Quemoys
This could be done quickly and with little warning, however. As
a face-saving alternative, Peiping might soon move to take Tatan
and Erhtan, two tiny islands now lightly held by the Nationalists
about three miles southwest of Little Quemoy.
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4. Large Chinese Communist purchase of life belts in Hong Kong
confirme o
Hong Kong police have confirmed a press
report that a "large" order for life jack-
ets has been placed with Hong Kong
manufacturers for delivery to Macao,
obviously for transshipment to the
ommun s main and. Delivery will be delayed because supplies
of cork in Hong ;Kong are sufficient for the manufacture of only
10,000 life jackets, according to the police.
The Hong Kong government will find it
difficult to prevent delivery because neither life belts nor their
components are strategic items, the American consul general
believes.
Comment: A large order for life belts
gives further substance to Peiping's announced intention of "liber-?
ating" Nationalist-held offshore islands and Formosa.
A total of 300,000 life belts- -an uncon-
firmed figure reported by the press--would go far in equipping
the 400,000 troops of eight armies which, it is estimated, the
Communists would employ in an attack on Formosa.
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This purchase would not necessar-
ily imply, however, that attacks on Nationalist bases would
soon follow. This -equipment might be assigned.to military
units in amphibious training.
SOUTHEAST ASIA
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easier or a premier "free yourself from your heavy burden,"
if he so desired. The American embassy in Saigon interprets
this as a "polite" request for Diem's resignation.
Premier Diem on 23 September re-
ceived from Bao Dai in France a
telegram offering to relieve Diem
of his oath of loyalty, thereby making it
Diem is replying that he intends
shortly to announce the reorganization of his government,
with the participation of the sects and outstanding national-
ists. He also is saying the new government will have the back-
ing of the United States.
Comment: Bao Dai is still legally
the final arbiter of the fate of Vietnamese cabinet, and is
being subjected to strong pressure by all parties to the current
dispute. During the past few days both French :and Vietnamese
officials in Paris have given American officials the impression
thatBao Dai would act soon to remove Diem.
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5. Bao Dai.offers Vietnamese premier "freedom to resign":
Like most communications from Bao
Dai, this telegram is subject to varying interpretations. Its
vague wording :is probably designed to enable Bao Dai to make
his words fit whatever situation develops in Saigon.
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SOUTH ASIA
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7. Comment on.changes in Pakistani government structure:
The unanimous action taken by the
Pakistani -Constituent Assembly on
2.1 September stripping the governor
general.of his most important powers
and strengthening the position of the
prime minister now appears to have .
been a "constitutional. coup" which will
not, however, materially change the
power structure of the Pakistani government. The basically
pro-American orientation of the Pakistani government should
not be changed by this maneuver.
The move apparently was conceived
and executed by the members of the small politico-military
clique which now controls the country, . and which is the only
group capable of evoking a unanimous vote on such an issue.
it appears to have been designed to increase the prestige .and
bargaining power. of Prime Minister Mohammad All,. who is
about to visit the United States.
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The ailing governor general, who here-
tofore has been considered unofficial leader of the clique, was
obviously uninformed of the move. He now has the choice of
acquiescence or resignation.
Mohammad All and Iskander Mirza,
governor of East Pakistan, left Pakistan on 22 and 21..September
for state visits and medical treatment respectively, while General
Ayub, commander in chief of the Pakistani army, is scheduled to
leave for the United States on 7 October o Since these three men
are key members of the ruling clique, their willingness to leave
the country at this time suggests not only their complicity in the
coup but also their confidence in the inability of the governor
general to undo their handiwork,
WESTERN EUROPE
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8. German coalition leaders see Mendes-France plan as "intention-
ally unacceptab a"o
Germany or Britain. They insist that if the conference fails,
Britain and the United States must act immediately to rearm
Germany. Failure to do this, they say, would discredit Chancel-
for Adenauer, and result in the de facto neutralization of the
Federal Republic.
at placing the blame for a breakdown of the London conference.on
West German coalition leaders interpret
the German rearmament proposals of
French premier Mendes-France as
"intentionally unacceptable," and aimed
West German defense officials specifi-
cally criticize the fact that under the French plan; Germany- would
be the only Brussels Pact member whose entire armed force would
be subject to control. German officials contend that some form of
German NATO membership is a military and political necessity.
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LATIN AMERICA
9. Guatemalan assembly to be chosen in rigged elections on
Oc o::- er:
On 21 September the Guatemalan govern-
ment set elections for a constituent as-
sembly for 10 October and decreed an
electoral law designed to assure the
election of a body favorable to continu-
ing Castillo Armas in the presidency.
Ambassador Peurifoy notes that the
elections will not be free and that "there is bound to be bitter-
ness" among anti-Communists who do not favor Castillo,
Comment- The constituent assembly,
designed primarily to give he astillo government a semblance
of constitutionality, is expected to ratify past decrees of the pro-
visional government, elect Castillo president for a fixed term,
and then adjourn.
Castillo was reliably reported on
22 September to have agreed. to form a council of state under
Juan.Cordova Cerna, a leading political figure who broke with
.Castillo last July. This may heal one of the chief breaches
which have been developing in the anti-Communist ranks. The
elections could, however, be a serious divisive factor if any of
the ma oranti-Communist factions are denied effective partici-
pation.
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