SECTION 3 (WESTERN)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000100060002-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 6
• Document Creation Date: December 9, 2016
• Document Release Date: June 8, 2001
• Sequence Number: 2
• Content Type: REPORT

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SECTION 3 (WK'S TERN)
GERI,TASTY'. Allied Retaliation against Soviet Harassing of Berlin
Trannos rto The Allied ComMandants in Kerlin o 6 March imposeic
countermeasures against the Soviets by initiating a close check of
craft navigating the West Berlin waterways, through which extremely
heavy East German traffic is now moving. Although constant Soviet
harassing measures against road, rail, and water routes between
Berlin and Western Germany have failed in their basic objective of
undermining the economy of West Berlin, Soviet restrictions on ;grater
traffic between Berlin and West Germany have reached a point where
a large part of the Ruhr and Hamburg barge fleets are now refusing
to make the run to Berlin. Using "prevention of smuggling" as an
excuse, the Allies intend to maintain restrictive controls (including
close checking of all ship's papers, etc.) until satisfactory agree-
ment can be reached with the Soviets in the entire field of water
transport. (S Berlin 1115, 6 Mar 51). CONZ7,NT: These Allied
measures were authorized by the Counci3., of ITUE Commissioners on
22 February 51, (OCI Daily, 26 Feb 51). Last July, Western retali-
atory measures were partly responsible for the lifting of Soviet
restrictions on Western barge traffic.
. Follow-
FRAi1CE. Improvised Solution of Cabinet Crisis a Possibility
ing ie failure of Socialist Guy I,-o et to o?Dtain Assembly approval
as Premier, only two other possible candidates--ex-Premier Pleven
and ex-Finance Minister Petsche--are still being discussed informally
among the deputies. Should neither of these leaders succeed, President
Auriol, who is planning a visit to Washington late this month, might
resort to forming an interim. Government presided over by a senior
statesman like Radical Socialist (moderate) I-Ierriot. Mollet's failure
was due to the fact that his program of economic controls was in part
unacceptable to the Radicals, while his plan to have the Assembly take
the initial, vote on an electoral reform bill without Government
intervention was probably not favored by most Popular Republican (1RP)
deputies. The non-Communist parties are in agreement, however, on
foreign policy and on a prompt constitutional reform to eliminate the
Communists from the caretaker government following a dissolution of
the Assembly. Should the Assembly agree to a popular referendum on
electoral reform, elections would "almost surely" be delayed until
fall. (New York Times, 7 Mar 51; C Paris telegram, un.niunbered, 2 Mar 51
and 5178, Mar 0 COVI. NT: A popular referendum is unlikely in
view of both the impatience of all.. nor,.-Communist parties for early
elections and the deputies' desire to influence the procedure determin-
ing their own chances for reelection. These parties are not likely,
however, to permit the crisis to deteriorate as far as a dissolution
of the Assembly without some electoral reform to reduce the Communists'
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representation in the next Assembly. On the other hand, as elections
approach, the parties of the middle-of-the-road majority will be less
inclined to agree on programs like Mollet's to cope with the steady
inflation in France.
ITALY. Christian Democrats Involved in Trieste Agitati6 . Recent
Italian irreFentis- activities ~n Tries e9 according to US Ambassador
Dunn, originated chiefly in Premier De Gasperils Christian Democratic
Party, vtiich can be restrained from carrying on a "provocative campaign"
against the Allied Military Government provided the British make strong.
representations to this end, coupled with reassurances as to the present
British policy, when De Gasperi visits. London next week. At that time
De Gasperi will urge the Western powers to reaffirm the March 1948
declaration on Trieste and include Italian representatives in any sub-
stantive discussions of the problem. (S Rome 3815, 2 Mar 51). COMMTT:
On the Trieste question, it is easy for the Government to arouse the
political support of all Italians including the Communists. As
anticipated, the Christian Democrats are seeking popularity by pander-
'ing to nationalism in Italy and among Italians in Trieste, with an eye
to the approaching communal elections in, both areas,,
SPAIN. Government Accedes to Popular Demand in Barcelona Strike. The
toga popular boycott of Barcelona.'ss streetcars which began on 1 March,
in protest over increased fares, ended 6 March with the Government
rolling back fares to the pre-strike level. Although the protest was
generally characterized by passive resistance against riding the street-
cars, there were instances of unnecessary police brutality in breaking
up demonstrations as well as scattered attempts by the populace to
prevent individuals from boarding the streetcars. US Consul, Barcelona,
heard rumors that the incident stemmed from a rift in the local Falange
organization and that a general strike could develop out of the
situation which might spread to other cities in Catalonia. A boycott
of Barcelona's newspapers for their silence on the issue of the street-
car fares during the boycott and for the recent. increase in newspaper
prices is reportedly scheduled for 10 March. (R Barcelona 65, 2 Mar 51;
U New York Times, 6 Mar 5l). C0IJHENT: The boycott is significant
because first time the ranco'regime has allowed a demon-
stration-of popular disapproval of a Government measure to assume such
proportions. However, despite the concession to popular demand on the
fares issue, the Government is still capable of dealing adequately with
such indications of the peoples dissatisfaction with economic con-
ditions or with. any future Falange attempt to demonstrate its political
effectiveness. In fact, it is possible that the people of Barcelona,
notorious for their political volatility, have been permitted this
"moment of triumph" in order to distract them from other more basic
and enduring hardships.
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SWITZERLAND, Swiss Consult Swedes on Fort ~Contr~ols The Swiss
press has announced the departurefor Sweden c the Chief' of the
Division of Political Affairs in the Swiss Foreign Office. This
trip follows a conference of Swiss Government officials and-Swiss
Ministers and commercial councellors from Washington, Paris, and
London held in Berne to discuss developments in east-we-,t trade
controls? (C Berne, 12749 6 Mar 51) . CO1,8112iff : The Swiss will
probably make a major policy decision in she near future on how best
to meet Western export controls objectives without impairing their
neutrality as they are anxious to avoid-being isolated from the West
on this issue, Undoubtedly, the Swedes, who likewise fear isolation;
will welcome the opportunity to discuss this question with the Swiss.
UNITED KINGDOM. Steps to Close Several. Cofsulates in China Ordezed.
T e foreign Office as or~3ered tom. takax'af~re~i?axa steps to a_
the closing by May of the UK consular offices in the Chinese cities
of Tsingtao, Nanking, Amoy, Chungking, and Kunming, (C London 47779
6 Mar 51). COM:tivNT: This order, Which in genera).. implements a
decision made C month ago, is a British reaction to the hostile
attitude of the Communist authorities that in recent months has been
responsible for the expulsion of the British consuls in Mukden and
Urumchi. The move does not signify any lessening of the British
desire to establish regular commercial and diplomatic relations with
the Peiping Government. The stations to be closed
in Tientsin, 'Shanghai, Han ow and Canton in addition to the Embassy in
Peiping,
Government Facing New Embarrassment in African
Colonial Polic Among__wTite elements in both the Union of' S?uth
rica and British East Africa marked sympathy has been expressed for
South African Prime Minister Malari.&s recent attack on the British
policy of granting eventual Commonwealth membership to nonwhite
colonial territories, A leading white settler newspaper in East
Africa has maintained that the Union, as a Commonwealth member, had
every right to ask the British not to pursue policies in Africa (ieea
granting political power to the natives) m i.ch it considers dangerous.
In South Africa itself press comment seemed to divide mainly along
party lines; but the most important Opposition criticism of Malan & s
statement focused not on its main point but on the unfriendly manner
in which it was made, and argued that the question of a black African
Commonwealth country was not an immediate one, The UK Government,
however, has reiterated its commitment to its policy of self-government
within the Commonwealth for colonial peoples. (U London Times
27 & 2?3 Feb al) , C011,F/1ENT : It seems clear that .S 1Qj -latest statement
from the generally an 1 ritish Malan has provided a, new and marked
embarrassment for the UK in its Commonwealth relations and its African
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question is whether or not these nations are to be associated with
the West through the bridge provided by the Cornmonmealth. But white
elements in Africa-, -whom the UK cannot antagonize too sharply without
colonial policy. Informed public opinion in Western countries will
probably agree with the reply of the UK Cornmexn:wwealth Relations
Secretary that new nations will arise in any case and that the real
prejudicing its whole position there, generally do not view the
uestion in this light;
ICDL.TD. Duration of Defense Agreement. (See OldI Daily, 1 liar 51)
According to US MinisterLawson, For ,n Minister Benedaktsson is
unalterably opposed to the US suggested provision that the defense
agreement with Iceland shall remain in force until NATO determines that
the facilities are no longer necessary because he is convinced that the
Goverment will not accept any'agreement which does not give Iceland
a unilateral termination right. Benediktsson insists therefore that
Icelanu have this right and proposes a clause permitting his country
to announce an end to the pact, if, six months after requesting NATO
review, no agreement is reached,, with actual termiraa-ti.on effective six
months thereafter, The Foreign Minister even stated that he, the
undeniable leader in paving the way for a defense arrangement, would
not recommend the US text to the Government, since he would rather see
Iceland remain undefended than agree to peacetime occupation for the
duration of NATO. (TS Reykjavik 165,, Mar 51). COTf,R,!FNT: The un-
popularity of a defense agreement which does not ir6~de for Iceland's
unilateral termination is a foregone conclusion,, and the imperative
need for strong Althing support from all non-Communist parties underlies
the Governmentss insistence on this point. It is believed that these
political considerations and the Foreign Minister's adamant opposition
preclude the likelihood of acceptance of an agreement not providing
for Iceland's right j`o terminate it. However, if such a prerogative
is accorded it is considered highly unlikely that Iceland would move
to end the pact in the face of NATO recommendation to the contrary.
BRAZIL. Foreign Office Requests Delay Zrbank Loan for Manganese
An. officia of the Braz liar iForei..gn. Office requested
Development.
# gt e Export--Import Bank temporarily delay action on the loan
application for Sobramil, the company owned jointly by US Steel and
the Chamrna family of Brazil for the exploitation of the vast Urucum
manganese deposits. The official stated that the application is under
detailed study by the Brazilian National Security Council, some of
whose members question the validity of the Chaimna, concession,, He also
said that some members of the NSC consider that since the concession
is located in. a frontier zone approval by both state and federal
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governments is required. The official added that the problem is
entirely domestic and connected with Brazilian law. In his opinion,
it will be resolved in the near future, and he requested that-State
Department and the Eximbank give this matter no publicity. (C, Rio
1127, 5 Mar 51). COITAENT: This action comes as a surprise. In
December an official o`US Steel stated. that only minor details had
still to be completed between his company and George Chamma, These
problems had apparently been resolved by the statement of the US
General Services Administration that it is prepared to enter into`long-
term contract to purchase the major part of the annual production.
There have been reports during the past year of a strong feeling in
the Brazilian. NSC that permission for the exploitation of these deposits
should be contingent upon a definite understanding that the shipment
of the ore would be by rail through Brazil. The loan plan, however.,
states that the Eximbank is prepared to make a 30 million dollars loan
to finance the acquisition and installation of necessary facilities
for mining the ore and for its.transport by barge down the Paraguay-
Parana River to a deep-water xnort where it would be loaded on ocean-
going vessels. Since the Brazilian constitution does not expressly
require that such concessions have the approval of state governments,
it is possible that Brazil would like to use US manganese requirements
as a bargaining point in the Inter-American Meeting of Foreign Ministers
here in Washington later this month.
URUGUAY, Communist Party Purge. Eugenio Gomez, Secretary-General of
ie UruguayanCommunist Party (11CU), has requested the expulsion of
Vicente Denis, Wilfredo Figueredo and Laurencio Gomez, and the demotion
from their present party positions of high--ranking PCU officials Juan
Acuna and Hector Rodriguez. Further ex ulsions of PCU members will
follow. 01 COP, 7NT: This develop-
ment follows c recent rerriov o r~que Rod guez from his position
as co-Secretary General of the UGT (important, Communist-dominated
labor federation). Enrique Rodriguez and, to a some chat lesser extent,
his brother Hector have been in the bad graces of the party for ap-
proximately two years for insisting that the PCU should concentrate on
domestic problems rather than force the party to take a stand on inter-
national affairs. When accusations of deviationism were leveled against
them, however,'Enrque would confess publicly that he has deviated from
the Party line. This tactic has heretofore permitted him to continue
as co-leader of the UGT, and enabled both Hector and :Enrique to continue
as members of the PCU National Committee. The demotion, rather than
expulsion of Hector is probably motivated by the PCUBs desire to keep
him within the party, if possible, in order to retain the support of
a large segment of labor which is loyal to the Rodriguez brothers.
The demotion of Juan Acuna, Secretary of Propaganda in the Department
of Montevideo, is apparently due to G?omezas conviction that the Party
organ, Justicia, has been an ineffectual propaganda medium during the
campaign,
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