DAILY DIGEST MAY 31 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000200040001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 9, 2016
• Document Release Date: June 7, 2001
• Sequence Number: 1
• Publication Date: May 31, 1951
• Content Type: REPORT

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49207
COPY NO. 39
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST
MAY 3 1 1951
Date:
NOTE: l. This summary of significant reports has been
prepared primarily for the internal use of the
Office of Current Intelligence, It does not
represent a complete coverage of all current
reports in CIA or in the Office of Current
Intelligence.
2. Comments represent the preliminary view of
the Office of Current Intelligence.
3. Marginal letter indications are defined as
follows:
nA4 ? items indicating Soviet?Communist
intentions or .capabilities
v1319 ? important regional developments
not necessarily related to Soviet/
Communist intentions or capabilities
? other information indicating trends
and potential deVolopments
DIA, DOS, USAF Declassification/Release Instructions on File
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SECTION 1 (SOVIET)
USSR. ,jets Admit Increased State ontrol is Main Purpose of Collective
Farm Consolidation. With more than usual directness a Soviet book en-
titled Collective Farm Law, published in Moscow, 1950 acknowledges that
increased state control is a primary objective of the collective farm
consolidation drive. (R SD Dispatch 625, 25 Apr 51). COMMENT: Previously
noted Soviet propaganda on the necessity for consolidation was based for
the most part on increasing productivity and efficiency in agriculture.
PRAVDA Charges that UK Unlawfully Took Bhutan and Sikkim from Tibet.
In a PRAVDA article discussing the reported agreement between Communist
China (CPR) and Tibet, the charge was made that Britain, in 1890, had
unlawfully taken the Province of Bhutan and the princedom of Sikkim from
Tibet. The Moscow press has recently been featuring the opeaceful liberation
of Tibet by the Chinese Communists. (UAP Moscow, NT Times, 30 May 51).
COMMENT: This propaganda charge, coming on top of the Peking announcement
on Tibet, servesto question the lagality of present boundaries, and in'
"directly sets the stage for claims that India unlawfully administers Sikkim,
and that the independent state of Bhutan should be incorporated into Tibet.
While the Chinese Communist Government in February assured the Indian
Government that it recognized the present boundaries between India, Tibet
and China, some maps were brought out at that time showing the Chinese
boundary to include Bhutan, Sikkim and part of the Indian province of
Assam. Though the CPR said the maps were not considered official, their
assurances to India on boundary matters were not viewed as permanent.
11.0 EASTERN EUROPE. CZECHOSLOVAKIA. Intensified Police ActionaLepeertet
Western News Agencies. US Ambassador Briggs in Praha has been notified
by his French colleague that the Acting Chief of the Agence France Presse,
a Czech national, has been arrested. Increased police activity against
Czechoslovak employees of the United Press and Reuters News agencies is
also evident. Briggs interprets this activity as an attempt to intimidate
Western correspondents into leaving Czechoslovakia or at least refraining
from reporting material unfavorable to the Communist regime. He also points
out, however, that the Czechoslovak Government may be preparing to arrest
other foreign correspondents as accomplices of Oatie. (C US Emb Praha 758.
27 May 51).
YUGOSLAVIA. Clandestine Yugoslav Activity in Bulgaria.
the Yugoslays are reportedly smuggling and
stockpiling small arms in Bulgaria. It is also reported that an armed
group of Bulgarian refugees, carrying a radio sending and receiving set
and accompanied by Yugoslav Security Police Officers, is returning to
Bulgaria in the near future with strict warning regarding security
25X1A breaches. COMMENT: Considerable evidence
is available that the Tugos avs are successfully sending espionage agents
into Bulgaria. There have also been rumors that the Tito government is
urg
25X1C
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smuggling arms to Bulgarian resistance groups including peasants opposing
mass collectivization measures.
25X1C Yugoslav authorities have organized a Bulgarian emigre
organization to conduct espionage and propaganda activities against the
Sofia regime. (0/CI Daily Digest 23 Apr 51).
"CP YUGOSLAVIA. Court Evidences Leniency in Trial of Alleged Cominform Agents,
The trial of four persons, including an employee of the Czechoslovak
Embassy, recently arrested on charges of espionage on behalf of the Czecho-
slovak Government is under way in Belgrade. Although all defendants have
pleaded guilty to the major charge, the trial has been marked by the degree
of leniency granted to the defense lawyers to defend their clients in con-
trast to previous ;trials which have been conducted along Soviet lines. The
Czechoslovak charge diaffaires was even permitted to visit the Czechoslovak Emb
employee in prison before the trial and arrange for his defense. All de-
fendants are expected to receive relatively light sentences. (U NTTimes,
30 and 31 May 51). COMMENT: Although the present trial is being conducted
according to rules of procedure which have been used in Yugoslavia since
the regime came to power,a new code of laws is soon to be put into operation
which ostensibly restores many rights to defendants. The Government un-
doubtedly hopes to use the current trial to contrast Yugoslav court pro-
cedures with those in the Soviet orbit. In the March trial of 5 Yugoslav
citizens accused of working for the Hungarian intelligence service, however,
no leniency in trial procedures or in the sentence was evident.
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SECTION 2 (RASTERN)
SC" GREECE. Commander in Chief Pa os Resi s. On 30 May Greek Field
Marshal Papagos resigned for r asons ot healths, and King Paul took
over as Commander in Chief of te armed forces? The US Consulate
in Salonika reports that during a tom. of Northern Greece last weeks
Papagos repe t his neflonitions to army officers to avoid politics
and made clear to the public that he has no political , J.itionss
(U New York Times s 31 May 54 C Salonika 33% 28 May 51). COMUENTg
While Papagoso heal to is not gososbu resi ii Uon maf , 1017
can d by the rift which has ben building betwen hi rdd King
Palls who became annoyed reco tly over toe part which Papagos al-
legedly played in the Metaxas affeir (a scandal involving one of
the King us acitvisors). Papagee has been advised repe tedly by US
officials in Greece that if he should wish to enter Gibe k politicss
.it Mould be advisable for him to do so as a private citizens and
not to run for office while either participating in a caretaker
goVernments or while holding Lne position s Chief of St f, While
Papagoe may ew genuinely be going into retirements he may re-t erge
on the political or military scene at any time. This possibility
mill be a matter of considerable conoern and inter st to the Greeks
in the caning mo ths preceding the national elections,
U
SYRIA, Possible Rear amization of thrian Government? According
traEarge C ark in Damascus s there are unconfirmed rumors in Syria that
Prime Minister al- e, m oon resign and possibly be r placed by a
coalition governnent which would include the Populist Party of former
Prime Minister Qpdsi. 1 ese reports also suggest that a new political
grouping kn s as the 4IAction Party w may soon be formed to furnish inde-
pendent support for the Pepulists even though Qudsi himself is apparently
not mentioned as a candidate for the Prime Minis rship, Clark states
that al- os administration has come under tt k from several import-
mnt political grOups for es Prime Mimi tervs alleged failure to initiate
a progressiv refo in Syria, The pressur against Ilse ,1 is reporta47
from civilian groups this time, rather than fraa the Army itself, Clark
adds that if the current Syrian Cabinet should f 19 it is not im..ssibie
that al-Azm might accept the Prime MAnizt rehip Of the succeeding govertn.
ment, (C Dame cue 677, 28 May 51). C0MidENT8 Since he became Prime
Minister last March s al-Azm has been Eiltdrappedo was his predecessors
Qudsis by the Argygs strong influence oc Syrian politics. Jil-Amaa has had
re1zttively little criticism from domestic groups in the past two months
largely as a result of the Syrian-Israeli border dispates which temporar-
ily united the major political groups within Syria against what Arabs
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generally believed was an Israeli threat against Syria. There ls no
indications however s that if a new government does came into powers
that the Army will lose its dominant position in Syrian political
affairs,
LIBYA.
DiateofIya Accorded More Favorable Ie
Eon in rLpolitaniao US Consul-General Lynch in Tripoli reporig
on 9 M-y that ed iddrisas the King Designate of Libya, after
initially being given an unenthusiastic and aim at hostile reception
in Tripolitania (See OCI afl.,y Digests 24 May Si) has traveled widely
throughout the country and has been on the whole well-received, Lynch
states that the King Designate is now so pleased that he has postponed
his departure for Benghazi (his residence in Cyrenaica) for two days.
Apparently the unfriendl public demonstrations against Sayed Iddriss in
Tripoli were largely arranged by Bechir Saadawie (S Tripoli 4000 29
May 51), CO1&ENT8 The well-known Tripolitanian political leaders
Bechir Saadawis is reportedly subsidized by Egypt and is pposed to the
UN-sponsored United Libyan Stab which would thwart his political am-
bitions. In recent months Saadsmi has voiced anti-US e imentss
following the Commurist 61inew. The unexpectedly cordial reception
which payed iddriss has had in ot er parte of Tripclitania would in-
dicate that SaadawiDs influence is sanewhat limited.
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nBu INDONESIA. Prime Minister Presents Cabinet 122111y. In a brief
policy statement to Parliament on 28 May9 Prime Minister Sukiman ,
said that preservation of security will have priority in his govern-
mentes program. Next in importance will be the formation and
implementation of a "national prosperity plan" which must include
increased production and nationalization of enterprises which are
important to the life of the people. The Prime Minister anticipates
revision ot agrarian laws9 enactment of labor legislation9 and
rescinding of the controversial turnover tax to be replaced by a
sales tax On imports and manufactured products. There will be no
change in foreign policy; continuing its policy of "independence9"
the governMent will not participate in the cold war and will preserve
friendly rClations with any state which regards Indonesia as friendly.
With regard to reconsideration of Indonesian relations with the
Netherlandk, Sukiman said the governmentes aim is to arrive at
cooperation between the t o nations o, a basis normally used by two
independent and eleweigm state . The government, however, will take
into account the findimge of the state committee set up by the former
cabinet to stu.y e::isting agreements between Indonesia and the
25X1A Netherlands. U Djakarta 16689 28 May 51).
COMMENTg The cabinet9 whose program reflects a more nationalistic
trend than did that of the former government, is expected to receive
an early tote of confidence from Parliament. Although it is prob-
able that security measures will be pressed with greater vigor and
possibly with greater success than heretofore, increased efficiency
in other fields of administration is highly unlikely9 and attempts
at nationalization will probably lead to even more muddled conditions
than now exist. Abrogation of the Netherlandt-indonesian Union and
revision of the Round Table Conference agreements of 1949 have been
pressed by nationalist parties for months and probably are inevitable.
The extent of such revision is not yet .known.
"A" CHINA, Communist Chines Trade Negotiations with Indonesijinorted
IckEtt_psigletion. 25X1
negotiations for the purchase of 4009000 tons of rice by Kadonesia
from Communist China are nearing completion. The rice is to be
shipped from China within two months. 25X1C
the rice will be paid for by a credit in Indonesia for use by the
Chinese at a later date. 25X1A
COMEENTs These negotiations (although the 41190Htons of rice
offered seems excessive in terms of Chinese capa*ilities) are
probably relat d to a previous Chinese offer to buy 509000 tons of
rubber from the Indonesian Government9 giving rice and pessibly
tungsten in exchange. Since the Indonesians have declared their
intention to respect the UN embargo resolution9 they undoubtedly
would like to avoid a rubber-rice barter arrangement, preferring
to pay in credits which the Chinese might later use to buy up rubber
frompeivate merchants.
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RC" CHINA. LejjnSoutiaSovietrersonr.
25X1C the presence, in Aril, of more than ]400N Sovietadvisor7-
echnical personnel in the Canton area and some 430 such personnel
at other points in South China.
COMMENTs Although an increase in Soviet personnel in the Canton 25X1A
area was reported in March, the above figure seems high; other
estimates are in the low hundreds. The above total for other areas
of South China is not unreasonable, but the figures are incomplete
and cannot be confirmed. 25X1C
RC" CHINA. S viet and Chinese Communist Activity in Mukden.
25X1C as of ear y 1951, (1) the return to Mukden of the
former Soviet Garrison Co ander (given as "Kao tang'); (2)
the presence of n number" (unspecified) of Soviet advisors with
the Mukden municipal government; (3) the appearance in Mukden of
Soviet airmen--who have exclusive use of two airfields in the vicinity
and of Soviet jet plane which are often seen flying in formations
of 40 to 50 aircraft; and (4) the establishment of a concentration
camp in which are confined some 30 000 ex-Kuomintang military and
civil functionaries. 25X1A
00MMENT8 This is the secbnd report of the return of the former
Sowlat gArrison Commander (presumably general K0VTUN-STANKEVICH9
C.O. in 1945-46). Soviet advisory personnel are known to be
attached to the city government. A Soviet military advisory mis ion
has also been reported, and Soviet
airmen are flying jets in the area. Thousands of counter-remolm- 25X1C
tionariesn ((mostly ex-Nationalists) have been arrested in Mukden,
but the figure of 309000 prisoners cannot be confirmed.
KOREA. naIhjsommutuaseAus of Infiltration. A 28 May North
orean broadcast, in Korean, accuses the US of employing "spies.
and destructive ale ants - - in order to - - weaken the fighting
Non
ability of our ople." The broadcast noted that these new tactics
were employed only after alleged US biological warfare and US "shame-
less forgeries" proving North Korean aggression had failed to "cover
their military failure. (R FBIS, 29 May 51). gagagg This
latest propaganda line may be an attempt to account for the unrest
and anti-Communist activity that is known to exist in North Korea.
nC" KOREA.19,sr_ijil.r..&yvitContinues in North Korea. An Air
Force operational summary of 30 May reports two recent attacks
made on UN B-26 bombers by Communist conventional type aircraft.
e attack accmPed. on 28 May in the Wonsan area on the East coast
and the other on 29 May in the vicinity of Anju on the lest coast.
(S FEAF AX 81079 DAE Eval.9 30 May 51). 012...L_AENT,s These incidents
indicate the continued ability of the Communists to launch limited
attacks by conventional type aircraft from fields probably in
North Korea.
Sor
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IMIU. Calibre of Recent C4nese
Lower than Usual.
The Intelligence Staff of the US Far Eastern Command reports
that the "calibre of Chinese Communist prisoners of war taken in
the current offensi e is appreciably lower than those previously
captured with respect to status of training and physical appear-
ance." (S DA-CINCFE Telecon # 4765, 31 Mey 51). COMMENT: This
is the first firm indication received in this office of Chinese
utilization of inferior soldiery in the Korean campaign. Previous
Chinese prisoners (particularly those from the 3rd and 4th Field
Army) were veterans With a considerable degree of training and a
fairly high level of combat efficiency.
ICOREA. ROK Governme t Demure at Inflation Control Measure,
Ambassador Muccio, commenting on inflation control in South Korea,
reports that the ROK Government still is not willing to raise the
counterpart rate (the rate at which the ROK Government collects
local currency for US financed and imported goods and deposits the
proceeds in a reserve ft) rrom 4,000 won to 6,000 won to the US
do/lar. Muccio observes that -agreement -onaccanterpart rate at a
realistic level is of utmost urgency in controlling inflation in
the ROK. Despite concurrence in ItagialWiptlinstb*'theiPrime Minister
and Finance Minister of the ROE, President Rhea and other Ministers
feel that such a "devaluation of the won" would contribute to
inflation, and that repayment of ROK loans to the UN for essential
local expenditures will be the major solution to inflation. (S
Pusan # 995, 29 May 51). COMMENT: Although there is considerable
sense in the Presidents allegations that the "UN Loan" is a
primary contributor to inflation, his stand on the counterpart rate
offers further evidence of the economic immaturity to be found in
the ROK Government.
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SECTION 3 (WESTERN)
"B" GERMANY. Vest German Leaders Disappointed Over Council of Euro e Session.
Vest German -delegates to the recent Council of Europe meeting in Strasbourg
have indicated their general disappointment with the failure of the Council
to achieve concrete results. They are naw convinced that Britain is un?
willing to join a Unittd Europe and that, without England, French support
is at best lukewarm. Leaders of the German Government coalition were,
however, pleased with the positive action of the Council in endorsing the
Schuman Plan, and want to proceed with rapid ratification of the Plan in
Bonn in order to give new impetus to the European movement. Meanwhile the
opposition Social Democrats have criticized the Council session and its
endorsement of the Schuman Plan as inconclusive,. (C Bonn Dbnumbered,24 May Si)
COMMENT: Initial west German enthusiasm over achieving equal status in the
25X6 Council of Europe has apparently maned as a result of the recent Council
session. The German Government leaders still feel', however, that the Council
can provide a good opportunity for increased German influence' in Western
European affairs, and will continue to press for the creation of an effective
European Parliament within the Council structure.
"A" New. Soviet Ditre'rference with'Ires ',Ebrii6 Trade. Soviet
authoritieFirEainF:r7g7g?SIErgiga new measures IE are seriously
holding up west Berlings export trade with the lest. Approximately two
weeks ago, Soviet authorities responsible for screening interzonal trade
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permits for certain restricted goods shipped by west Berlin firms to
western Germany, began refusing to approve all requests for permits,
insisting that they be accompanied by a certificate showing the origin
of the raw materials used in the manufacture of the goods. This EXAM
has resulted so far in the back-logging=of over 000 permits? At their
meeting on 31 May in Berlin the Allied High Commiesioners will consider
various counter-measures proposed by US officials in Berlin, including:
(1) an embargo of certain items scheduled to he shipped from west Germany
to east Germany, a tactic designed to produce the quickest Soviet reaction
and force them to approach the Allies for-ii. solution of the problem (as
in the case of the recent bayge war), arid (2) insistence on the right of
each Berlin sector con to approve deliveries of goods from his sector
without Soviet clettrahee. Berlin city officials favored the latter course,
although they felt that the possibility of its rejection by the Soviets
might necessitate a temporary stall air-lift. (C Berlin 1428, 25 May Si;
S Berlin 1437 & 1443, 29 May Si) COMMRNT: This Soviet move constitutes
the most serious recent harassing measure in Berlin, in view of the
extreme importance of west-Berlinfs trade with the lest. It also comes
on top of the recent Soviet measures considerably reducing :waterway access
to Berlin and making the delivery of goods between Berlin and western
Germany more difficult.
"B" FRANCE. Delegates Are Apathetic at Opening Session of CGT CongreSt.
MfgEZtes to the nation congress of the Communist-cola=a-Mgral
Confederation of Labor (CGT) are reported to have dutifully applauded,
without apparent conviction, the militant opening addresses by Secretaries
General'; Benoit Frachon and Alain LeIeapo Some 2,000 delegates listened
attentively to Frachonfs expose of workers f law wages, industryvs high
profits, and the governmentls anti-labor policies, but when he vent on to
the "international" tasks of the working class about a third of the audience
wandered out into the lobby where a number of unenthusiastic comments were
overheard. One delegate allegedly asked: "Haw can you oppose war production
when the plant produces nothing else? You have to quit working." (C Paris
7340, 29 May Si) COMMENT: --This is a further illustration that French
labor will support their CGT leaders so long SS the issues are purely
economic, but quickly become disinterested when political problems are
injected. The CGT has already outlined a program of lowered military
production in defense plants, and is urging conversion to "peace production"
in order to preserve jobs.
"A" ITALY. Communists Gain 'Votes Lose Control of Cit Governments in IndustriI1
gorthe In e loc e ec ions on e week-en o 27 May in provinces,
laFFly in north Italy, the Communist bloc tallied 35.3% of the vote as
compared to 32% in the national elections of 1948. The pro-Government bloc
tallied 41.1% of the vote as compared to 49% in 19480 The anti-Oomtunist
parties gained Administrative control of 2,340 out of 2,735 commbnes.
(R Rome 5425, 30 May Si; R Milan 181, 29 May Si; U NY Time, Rom ta 31 May Si;
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R Rome Radio, 30 May 51) COMMENT: The final series of spring elections,
to be held on 10 June, can be expected generally to follow the same pat-
tern, Control by the pro-Government parties of municipal councils in
most of the important industrial centers (except Bologna) across the
militarily strategic north of Italy was accomplished by an electoral system
of linked lists which permitted the large bloc of pro-Government parties
to win 2/3 of the municipal council seats mherever the bloc won a plurality
of votes. Op the other hand Communist control of industrial labor appears
stronger thau ever. The gains by the pro-Communist bloc suggest that, as
anticipated, (see OCI Daily Digest, 17 May 51) Premier De Gasperi and his
Christian Democrats were unable to-keep domestic problems (high cost of
living, unemployment) from becoming the main issue of the campaign.
Italians to Stall on New Sotiet Demand:a-for Trade reemeht. The
Italian ?reign 0 ice repo avie represen a Ives are again
pressing for the renegotiatital of a one-year trade agreement to replace
the agreement signed in November 1948, The Italians will attempt to stall
definite negotiations, especially in viewof possible complications from
the nicemn amendment, They point out, however, that it is desirable to
conclude-some type of agreement awing to Italian need for Soviet wheat
and manganese. The Italians indicated that although a trade agreement
with the Soviet Union will require them to grant a ball bearings quota,
they will not ship the ball bearing plant the Soviet representatives desire
and they will seek Western approval of ball bearings _quotas they do grant.
(S Rome 54172, 22 May 5l), COMMENT: Because of the increasingly short
ripply of raw materials the Italiansare anxious to conclude trade agree-
ments which will enable them to procure a maximum quantity of such materials*
At the sane time, however, the Italians will endeavor not to make agreements
which will be at too great a variance with western eAport controls.
SPAIN* $.0 ositian Re orted Planning New Madrid Strike, US Embassy Madrid
has been in orne a e non ommunis apposit on coalition Comite
Interior de Coordinacion) regards the 22 May Madrid consumers boycott as
having been so successful that it is planning a news, more forceful
demonstration, Rumors of a geheral work stoppage on 5 or 7 JIMA are
circulating in Madrid. The Embassy comments that the effectiveness of the
22 May boycott of public transportation, retail stores and amusement places
(described by some Spaniards ab a "peaceful plebiscite against the regime")
was greatest during the morning but dwindled by afternoon, chiefly because
the government, by using Falangist and other supporters as decoys on
public transportation, was able to delude many into thinking the boycott
had been a failure. Moreover,: many government workers used public
transportition for fear of reprisals if they were reported as participating
in the boycott by walking. Industrial labor, however, carried out the
strike almost completely throughout the day, (S Madrid 1092, 29 May Si)
COMMENT: The 22 May demonstration was more effective than had bee
iFfgrFated and suggests that the non-Communist clandestine labor groups
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(the Sogialist UGTtand the Anarcho-syndicalist CliT) may have more extensive
organizations in Madrid than had previously been estimated. A CIC call
for a general strike in Madrid during the first week in June would appear
to be overly anbitiaus. However, the CIC may feel that June would be
the most propitious time for a successful general strike, as food stocks
will be lowest during that month before the new harvest begins.
nOff bwiTZERLAND. Swiss De endent U on West for Critical Items in Rearthamen%
Program. The wiss irec er o In igence as in oimes e M ary
Attache that the Soviet Bloc does not want to sell armaments to Switzerland
and that the Swiss do not want to buy from that area because they do not
want to entertain military representatives of the Eastern powers. The last
armament purchase made from the Soviet Bloc was for 150 tank destroyers
from Czechoslovakia in 1949, that item being the only important Soviet area
equipment now in use in the Swiss army. This Swiss official further stated
that the Swiss have no illusions which side they will have to fight on if
they have to fight and that they are also sure the Soviet Union is aware
of this. They therefore prefer to buy armaments from the lest to be as-
sured of replacements, spare parts, ammunition and advice. OS MU Bern,
R-131-5I, 28 Mar Si) COMMENT: Despite important equipment deficiencies
? the Swiss army compares favorably, with other western European armies in
regard to armament. The Swiss apparently fear, however, that, as Western
rearmament increases, it will be more difficult for them to procure the
military itdms and raw materials they need for rearmament, thus making
Switzerland a weak link in the western defense line that might invite
Soviet attack in an all-out war.
"C" DENMARK. Defense Minister. Proposes Small Extension of Miitarr Servite.
The Defense Minister has submitted a bill to the lower house of PiarEent
increasing military service from 10 to 12 months, with an additional 60
days of training later, This compromise proposal represent e Denmark's
reply to a US reqUest (see OCI Daily Digests 11 and 12 May Si) that
military service be increased from 10 to 18 months. (NY Times, 30 May 51)
ComM7NT: The Danes recognize the need for an intensified-Teignse effort
but question the capacity of the Danish economy to support at this time
the cost for Additional barracks, military equipment and other facilities?
Moreover, the Danes point out that they lack the officer and noncom
personnel necessary to train recruits over an 18-months' period. The
Parliament will undoubtedly approve the present compromise proposal; but
an improvement in Denmark's economic position, plus an expansion in
officer cadres over the next year or so, may make Parliament willing to
accept a further extension of the period of military service later on
"B" bwzDEN. Foreign Policy Betbming PartisaffIsene. Sweden's abstention in
te recent-UN embargo resolution has increased the cleavage on foreign
policy between the Social Democrats and the Agrarians on the one hand
and the Liberals aid the Conservatives on the other? The latter grout)
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? is increasingly/outspoken in urging that Sweden adopt a more un-
equivocal pro-UN position on the Korean issue, while the Social Demo-
crats with Agrarian support favor the present policy which does not even
permit Sweden to brand Communist China an aggressor. The increased debate
reflects Swedish reaction to the mounting international tension, -which
tends to make the isolationists more isolationist and the anti-isolationists
more desirous of close cooperation with the ftst* (0 Stockholm Joint Weeka
No 21, 28,May Si)..COMMENT: The vigorous discussion of foreign policy,
? particularly the UM policy of Sweden, does not presage any early alteration
-1ii.Swedenvs basic foreign policy of no-alliances, or even a modification of
its abstention policy in the UN, for the Social Democrats and the Agrarians--
the most dogmatic proponents of the present policy?control the Parli nt.
Moreover, even the Liberals and the Conservatives do not advocate a change
in the basic policy, but merely favor closer cooperation in such UN measures
as the arms embargo as'an indication of Swedengs basic solidarity with the
UN and the West. Essentially, however, the debate reflects the inner .
uncertainty and insecurity of the Swedes concerning a foreign policy which
is claimed by the government to enjoy the wholehearted support of the over-
whelming majority of the nation*
"C" UNITED KINGDOM* osition Promise's art of Present Governikit Position
on Iran. 11Full suppo o H ajes y s Oppos ion was promise y
Winston Churchill in Parliament on 30 May for the goVernment position on
Iran outlined in Foreign Secretary Morrison Os 29 May statement (in which
he announced UK willingness "to consider a-settlement which wouldinvolve
some form of nationalization" but emphatically attached the condition that
snoh a settlement must be "satisfactory in other respects").* Another
Conservative MP asked and obtained a renewed assurance that British lives
and property in Iran mould be Protected; and no substantial dissents from
the government position were entressed by its left-ming back-benchers.'
(U London 6265, 30 May 51) COMMENT: ThiS closing of ranks on the Iranian
oil dispute, which is in marked contrast to the critical attitude taken
recently by both Conservative and Labor NPs toward the governments Egyptian
policy (see OCI Daily-Digest, 31 Mar Si) is a measure of haw seriously the
problem is now regarded by British public opinion. Previously? the govern-
ment had given some indications of concern over the possibility that it
might be subjected to Parliamebtary attack on its Iranian policy.
"0" MEXICO* Mpxican Labor to Withdraw from the ICFTU. The DS Embassy in
Mexico City has been informed that the National Committee of the
Confederaci8n de Trabajadores de Mexico (CTM) has decided to withdraw
from the ICFfU Intbrnational Confederation of Free Trade Unions)* The
CTM gives the folldwing reasons for its intended withdrawalo (I) The
inability of the 1OFTU to understand and to deal adequately with Latin
? American problems; (2) the undue restrictions placed by the ICFTU an
regional freedom of thought and action; (3) the domineering attitudes of
? ICFTU leaders and domination by and North Americans. Indications
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are that the CTM will not swing toward cooperation with the "third
position of Argentine labor, but will emphasize national feeling and
will concentrate on the national political scene --(C 1511 Mexico City,
28 May 51) COMNT: The CTM is Mexico's principal labor confederation,
and represents the chief Source of the governments organized labor sup-
port. Although the CTM decision to withdraw from theICFM in no way
represents Oonmrunist influence, the Communists will benefit in that the
decision provides (1) evidence of the inability of the ICFTU to form
strong anti-Conmumist Latin American labor confederation to compete with
the CTAL (Oonfederacifon de Trabajadores de ,America Latina), and (2) evidence
of a popular desirii_to concentrate on nationalaffa.irs rather than become
involved in international obligations.
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49207
CENTRAL INTELLIGENCE AGENCY
DAILY DIGEST SUPPLEMENT
MAY 3 1 1951
Not for disseminatiaa outside 0/CI and
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CENTRAL INTEILIGENCE AGENCY
OFFICE OF CURRENT INTE1TTGENCE
DAILY DIGEST OF SIGNIFICANT SA CABLES
'1 May 1951
SECTION 2 (EASTERN)
"B" JAPAN. McArthur Removal Testimony' Has Adverse Effect. According to
the US Political AdviserOiokyo? advises that the testimony by Secretary
Marshall and the JCS on MacArthur's removal continues to have an adverse
effect on Japanese public confidence in the US. The "overly frank revel-
ations" regarding present US military unpreparedness to meet the world-
wide Communist threat, the impression given the Japanese that Enrope has
the greatest defense priority and the President's reference to the "terri-
ble danger" facing the free world combine to make the Japanese grimly
conscious of their precarious position on the edge of Communist Asia.
While most Japanese seem eager to remain aligned with the US, the
"revelations" give greater plausibility to the Japanese Socialist-Communist
line that Japan has another way out of the present dilemma, namely, neut-
rality in the East-West struggle. The left-wing d.minAted Socialists, al-,
though roundly defeated in the last election, would work seriously to US
disadvantage if they were to come to power or were able to become an eff-
ective opposition to a US-aligned conservative government. (S Tokyo 2062,
31 Nay 51).
"B" IRAN. Prime Minister Again Outlines Program on Oil Issue, US, Ambassador
Grady reports that Prime Minister Mossadeq in conversing with him on 29
May, had complained that the Anglo-Iranian Oil Company (AlOC) had sent to
the Oil Commission only one man without authority to do more than listen,
Mossadeq declared that the Government would implement its plans by imposing
customs taxes on AIOC imports, supervising all Company transactions and
taking over direction of the Company. Force would not be used. Turning to
the question of conversations with the UK, Mossadeq stated that he hoped for
negotiations with the UK Government concerning the purchase of oil from the
Iranian nationalized company and with "the SI-Company" to settle the company's
just claims for compensation. He concluded by emphasizing his three point
program; (1) just claims of the Company will be paid; (2) the present staff
of the AIOC will be. retained to run the oil industry until Iranians are
trained to do s; and (3) the administrative council directing the Company
will have a majority of foreigners of a "nationality acceptable (to? the) US
and UK". (1 SA Tehran 3027, 29 May 51), COMMENT: Nossadecios program as
outlined above is consiatent with the Nationalization Law and with his
government's previous position on the Iranian oil issue. Many of the points
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he made to Ambassador Grady are reportedly incorporated in the 30 May note
which the Government handed to the Oil Company stating that the Company
would be taken over without delay. The Iranians remain determined to im-
plement the nationalization law and believe that they can do so unilater-
ally, then offering the AIOC sufficiently satisfactory terms to persuade the
Companyto continue running the industry.
"B" IRAN. Arrangements Completed to Evacuate AlCe Employees if Necessary, The
,Counselor of the British Embassy informed the US Embassy on 29 May that the
Anglo-Iranian Oil Company is authorizing its British staff to send their
dependents home if they so desire. Evacuation plans for the Abadan area
are established and provide for the evacuation of 7,000 persons including
Indians and Pakistanis. Fifteen oil tankers are available at all times, in
addition to a passenger ship and five large transport planes. Middleton
states that all but 150 technicians canbe moved within 48 hours. (S S/S
? Tehran 3034p 29 May 51). COMMENT: This natural concern for the personal
security of Commonwealth citizens in Iran does not, howeveronsan that the
UK Government is in a yielding mood on the oil dispute.
"B" AFGHANISTAN. War Minister Daud is reportedly bidd4ng for power in
Afghanistan. After canvassing informed opinion in'Afghanistan and Pakistan,
the US Embassies in Kabul and Karachi report that Prince Daud, Afghan Minister
of War and of the Interior as well as one of the moat ardent supporters of the
Pushtoonistan movement, is primarily responsible for the current unrest be-
tween Afghanistan and Pakistan which has resulted from a build-up of Afghan
armed forces in Kandahar and Kabul and from a reinforcement of border troops
in western Pakistan. Prince Daud is supposedly maneuvering himself into
position to make a "bid for power" in his country. Neither the nature of
his bid nor the power to which he aspires is mentioned. OS Kabul 374, 24 Nan
S Sis Kabul 383, 28 May; S Karachi, DWI 53, Joint Weeka 21, 25 May 51).
CONMENTs Daud may well be responsible for the recent Afghan military activ-
ities in Kandahar and Kabul, and he is believed to have strengthened his
political position in Kandahar in recent months, However, Daud 'a acti
have undoubtedly been noted by the more moderate elements of the Afghan ?
ruling clique including the King, the Prime Minister (now in the US), and
the Acting Prime Minister, and steps are probably being taken to curb his
efforts. It is believed that Daud will be unable to seize control of, his
government if such, indeed, is his plan.
"Be
SECTION 3 01A4TEW
UNITED KINGDOM, Foreign Office Estimate of Iranian Situation. The UK
Foreign Office considers that the Iranian4svernmentos attitude on the oil
dispute is softening somewhat, but continues. to believe that it would be a
mistake to send to the parliamentary' oilcommittee meetings a Briti h rep-
resentative empowered to negotiate, because there is as yet no clear indi-
cation of Iranian willingness to do so. If evidence of a basis for'nogoti-
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ating should appear during the committee's meetings with the Anglo-Iranian
Oil Company's Tehran representative, the UK is prepared to seize the opPor-
tunity and send out a high level negotiator. (S S/S London 6221, 28 1147 51)0
COMMENTs British reluctance to initiate negotiations springs from an aj.
parent conviction that the Iranians consider that all aspects of the tional-
ization question are subject to unlinteral Iranian decision. Continuation of
the present stalemate, however, could well force the Iranian Government int
some precipitate action in order to gratify clamorous nationalist sentiment,
',Su BELGIUM