DAILY DIGEST JUN 23 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000200480001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 9, 2016
• Document Release Date: June 6, 2001
• Sequence Number: 1
• Publication Date: June 23, 1951
• Content Type: SUMMARY

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it~~, 49251.
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST
Date: JUN 2 3 195
NOTE: 1. 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 views of
the Office of Current Intelligence.
3.
Marginal letter indications are defined as
follows.
"A" - items indicating Soviet-Communist
intentions or capabilities.
"B" - important regional developments
not necessarily related to Soviet
Communist intentions or capabilities
"C" - other information indicating trends
and potential developments
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SECTION I (SOVIET)
"B" USSR. Soviet Shins Reportedly Deliverer lita
Eauiument_ at Poti andBattmmi.
5X1X that port during those dates to Poti and Batumi: The ships were loaded with
paratroop supplies,, including artillery Aiecesft machine guns and ammunition.,
X1A;..
or o o e-
twreen 20 and 25 May, reported that large quantities of incendiary supplies ar-
rived at Poti during that period, it was thought that 25X1X
three ships made the shipment, Source a so ,eai a? yens of thousands" of
25X1A the incendiary bombs were unloaded and transported "somewhere into the interior."
COMM.- While these reports appear credible
concerning the fact that Soviet ships were carrying military supplies to these
Black Sea ports,, it is not possible to ascertain if eye witnesses actually ident-
ified either incendiary bombs or equipment for paratroops. There is no avail-
able-information that paratroops are among the forces in the Trans-Caucasus
Military District above the Iranian Turkish borders. So far as is known from pre-
vious reports, the principal method of supply for troops in this area is over-
land; these recent reports suggest that .a supplementary route is being used.
"B" Expansion of Soviet Tmmber in Far East. The Khabarovsk Regional Service on
21 June, described the following measures as essential to the development of the
lumber industry in the Far East (particularly Khabarovsk krai); the installation
of dozens of new large industrial lumber camps; construction of many hundreds of
kilometers of narrow-gauge and wide-gauge railways and automobile highways- the
building of lumber mills; of plywood,, furniture, packing materials,, and paper-
cellulose factories. According to the broadcast,' funds invested in the Far
Eastern lumber industry?s postwar Five-Year Plan amounted to "many hundreds of
millions of rubbles,," but the amount to be invested during the New Five-Year Plan
Is "considerably greater." It is planned by the end of the current Five-Year
Period to study the forests of this immense area,, 52% of whose timber stands have
not been studied before: This task has been delegated to the forest management
organizations of the Ministry of Forest Economy, who will be required to supply
the necessary skilled engineers and technicians: (R-FBIS, 22 June 51). COP TENT,
This elaborate program. may well be in partial reply to constant complaints of
shortages in the building, shipping,, newsprint and affiliated Industries appear-
ing so frequently in the Soviet Press, and fits in with current economic policy
to exploit the resources of the Far Eastern sections of the USSR.
:l
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"A" EASTERN EUROPE. A,rsgace violation by US Jets Alleged to be Intentional, In a
note delivered to the US,Embassy on Rl.June.the Czechoslovak Forei Office stated
that the recent violations of Czechoslovak airspace were clearly nQt accidental
overflights but deliberate incursionp. The note reiterated previous charges that
violations of Czech airspace by US planes were continually increasing, listing 116
violations since 15 January., and add4pd that in the most recent case the planes
were "heavily armed military Jets in a state'of readiness to fire0!.. For these
reasons the Czechoslovak authorities could not rely on US assurances that the 2
planes were on a training. mission, but must await the results of a very careful
examination. The note concluded that the Czechoslovak Government -views the re-
cent violation, of its aerial border as particularly serious and that it would
deal with the case in accordance with the principles of international law.
(U-Praha 837, 21 June 51).
"B" HUNGARY. US Legation Officials Denied Permission to Attend Grosz Trial. The
US Legation in, Budapest reports that permission to attend the trial'of Archbishop
Grosz was denied to the legation at the last minute and its representatives were
"turned away from the door" at the opening of the trial. The Legation concludes
that the Hungarian Goverment wishes.to shield the trial from "objective ob-
servers," (U Budapest 619, 22 June 51)o CO?i!?NT.- The only "Western" coverage
of the firet day of the trial., furnished by an AP local correspondent who is a
Hungarian citizen and therefore subject to Goverment control, featured the con-
fessions of the Archbishop and three others that they were involved in a gigantic
plot to overthrow the Government with"DS aid. Advice and encouragement were al-
leged to have been given to the'Archbishop by the former US Minister and other
legation officials. When the groundwork of US machinations is laid by the prin-
cipal defendants., the Hungarian'USIS employee8o also allegedly implicated., will
probably be used to clinch the case from ,inside observation,
Border.
that dur-
ing the-last five days wholesale evacuations of families have been taking place
in'the Rumanian Banat region., adjoining the Yugoslav and Hungarian borders.
-State enterprise trucks in Bucharest were recently commandeered and ordered to
the border area,, presumably to assist in the evacuations. Reports vary as to
destination of the evacuees but trainloads of them have been seen passing through
Bucharest. seeing two trainloads
of evacuees at Arad, near the Hungarian border. (C-Bucharest 770., 22'June 51).
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MEET-, Since the area of reported evacuation adjoins Yugoslavia, it is prob-
able that the Rumanian Goverment is attempting to lessen the possibility of mass
defections to Yugoslavia similar to those recently occurring in Bulgaria. The
inhabitants of'the Banat region may be particularly vulnerable to Yugoslav sub-
version since they include a large Serbian minority (estimated at 45,000 as of
December 1949). The action will also facilitate the concealment of any military
activity along the Yugoslav border of Rumania,
"B" YUGOSLAVIA, "Liberalized" Judicial System Subordinated to Communist Policyo
Yugoslav Goverment spokesmen have recently emphasized that the country's courts
must remain instruments for the implementation of the Communist Party policy, de-
spite the resolution for the liberalization of the judicial system adopted by the
Yugoslav CP on 5 June. Although governmental spokesmen have reiterated that the
courts should be freed from bureaucratic pressure and the supervision of the secret
police, it is sigtificant that several newly appointed judges have been former
secret police officials.' (S Belgrade Joint Weeka 24, 15 June 51; RRFBID, 22 June),
CONVENT: Although a recent Yugoslav trial of Cominform.agents was marked by an
unusual degree of leniency, the Yugoslav Goverment continues to use the courts to
implement the CP line as in recent presecution'of religious elements
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SECTION 2 (EASTERN)
"C" GREECE. Parliament to Debate Electoral Loaw. The US Embassy in
Athens repors that Prime Minister Venizelos, Populist leader
Tsaldaria, and Merkouris acting for the left=center National
Progressive Union (EPEE) approved the text of the proposed elec-
toral law calling for a modified proportional system on 20 Junee
According to Merkouris, all three parties concerned are pledged
to support passage of this law by Parliament after the latter
reconvenes on. 25 June. Despite his repeated denials, Vice
Premier Papandreou,, who does not favor the modified proportional.
system, may well resign from the government as a result of this
agreement, perhaps even before the law is submitted to Parlia-
ment. ((C Athens 15259 21 June 51), COMMENT,. Papandreou stated
on 21 June that disagreement on the electoral stem does not
lead to the disruption of Government unity, and that the
government will appear under its present form before the Parlia-
ment. Whatever political maneuverings occur in the near future,
it would appear that an electoral law will shortly be forth-
coming, and that the much heralded national elections will
probably take place within the next few months.
"C" ISRAEL. France to Ship 25 Planes to Israel.. A private French
airplane factory expects through cannibalization to ship about
25 operative Mosquito bombers to Israel. The French Foreign
Office says that 7 planes are ready, and 5 additional ones are
almost completed. Because these planes are Israeli property,
the French feel they cannot hold off delivery any longer, and
the 7 planes ready to go will be given clearance shortly. The
remainder of the 25 will probably leave between now and
November. No British objections have been made to the sales
(S Paris 8029, 22 June 51), CO s Twenty-five planes will
not be a significant addition to Israeli air power except in
terms of comrariso i with the Arab States.
"C" ISRAEL:. US Ambassador Discusses Huleh Demilitarized Zone
Situation. US Ambassador Davis in Tel Aviv feels that the
sitaat .on ii. the Huleh demilitarized zone remains potentially
explosive but that some gains have been made. He cites,
specifically, the avoidance of renewed armed conflict, the
improvement in the prestige and authority of the UN, the force-
ful in which the present leadership of the Truce
Supervision Organization (TSO) has been exerted, and the progress
being made in interviewing the Arabs formerly in the area with
a view to their return or resettlement. The Ambassador states
that the basiN problem is territorial and that, until the
Syria-Israel, border is settled in this area, disagreement over
details will continue to threaten the peace. The frontier
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question will prove difficult to settle because Israel will
resist arty attempts to establish a frontier other than that of
the Mandate while Syria wishes to acquire some of this area.
The Israeli Foreign Minister has on a eve ral occasions confirmed
that Israel will continue-to cooperate with the TSO but has
indicated that his position ?has been: materially weakened by local
reaction to the Security Counoiias resolution. The Ambassador
reports that the Forei sister has recovered some public
support for his program0 (C.. TeI 4v v 8959. 21 June 51).
Cis The Huleh demilitarized zone is within the borders of
the former Mandate. During. the ;fighting in 194&49, Syrian
forces occupied the area, and the Syrian-Israeli armistice made
the area a demilitarizedenclave0 No permanent border settle-
. meat is in sight because of the continued unwillingness of the
two sides to make peace.
"C" BURMAO Government h= Shows Surrrrisina Strength in Early
.Election Returns. 'Of the first, nine constituencies' where the
votes have been counted in the current Burmese elections, the
Anti Fascist Peoples Freedom League (AFPFL) has won seven by
large majorities. Prime Minister Thakin Nu and two cabinet
ministers were among those re=elected. US Embassy Rangoon
comments that these successes, some of idiich were in constituencies
where the AFPFL itself had been dubious of its chances., are
probably indicative of a landslide victory throughout the
country. (S Rangoon 9399 22 June 51)0
"B" CHINA. Sin &zeehoslovak Trade Nreement Signed. A trade
pact between Communist China and;.Czecboslovakla was signed in
Peiping on 21 June., according t* a Peiping badcast. China
is to exchange. raw materials for industrial equipment. The
total value of 1951 trade is to be four times larger than
arranged under the 1950 agreement, (U FBIS Daily Report, AAAJ3.j.:
22 June 51). CO s. This agreement follows closely on the
Sino=Soviet agreement which also pravided.for increased traded
.1951 trade agreements with Poland and Hungary tore signed
earlier this year in Peiping. The direction of China9s foreign
trade is being drastically reoriented whereas traditionally
it was almost wholly with the West it will soon be predominantly
with the Soviet Orbit if the present trend continues..
Area. Fifty aircraft (transports, fighters and light bombers)
and 350 paratroopers engaged in.airmground exercises in the
Nanking=Hsuchou area on 20 June, according to the
51)o COQ, BEN 8 A Chinese Communist.air ground training maneuver
on this scale is unprecedented but is consistent with increasing
Communist military capabilities. has previously reported
25X1 C
25X1 C
25X1A
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that proficiency of Communist paratrooper trainees has increased
to the point where mass Jumps from formation flights of as mar V
as 13 aircraft were being made in late May at Kaifeng9 a known
paratroop training center (see 0/CI Daily Digest,, 14` June 519
po7).o.
AN Chinese Communist Troops Reportedly Enter Indo~hina$ A
Chinese Communist force of some 4,9000 crack troops,, under Chven
Keng,, commander of Communist troops in Southwest China,, entered
Indochina from Yunnan,,
No frontal contacts wit rent a amese forces are reported
25X1C
hdd tht th C
wo asaesehinese forces are currently
deployed on garrison duty to free more Viet Minh units for front
line action. (U Taipei Ticker,, ~. June 51 a o Thi i s
25X1C the latest of a continuing flow
- alleging the entry o f a arge se Communist
troops into Indochina as m r:te Several thousand Chinese
Communists are accepted as beir spread through the Viet Minh
command in advisory capacitiesq,7t the presence of a Chinese
combat force has not yet been established.. The capability of
sending a force of 609000 troops into Indochina within a few
days is generally. acc e4 the Chinese,, but there are still no
reliable indications of'Chinese Communist intent soon to open
a ;second front in this' agree
"C" K Enema Air Acs i a Includes C~ed Jac cs Erie m? us e
of ft ghter and ground attack raft on 2 0 June against ROK
forces operating in the islands southeast of S ju is the
first reported instance of any enemy combined air combat opera-
tions. It is also the first known instance in which MIG-15
Jet fighters have aided enemy convention
_qI aircraft when attacked
by UN fighters. Far East Air Force Inte] ige a feels the
combined attack may presage further aittacks cf a similar nature
further south. (S FEAF AX 89529 21 June 53.),o
"C" JAPAN. _ ime Liz~~ ter YOSHIDA De a f El?ctIona Fall ow
"Central News" reports that Prime Minister YOSHIDA stated
Tr
that his Cabinet. has no intention`of elihquishi.ng its power,, and
that there is no necessity for holding a gen?r l election after
the peace treaty. (R FBIS Ticker,, 23 June 51)o Cis There
has been considerable speculation whether,YOSHIDA would agree to a
new election following tbe oe treaty in crdet tq permit persons
released from the purge` to regain their Diet seat. Failure to
-do 8.09 also would prevent fij, OYAMA Ichiro9 Y?SIi A`ae senior in
the Liberal Party,, from becoming Prime Minister following the
latter?s expected depurgee YOSHIDA succeeded HATOYAMA,' .-Prime
Dieter designate when the latter became subject to the purge
but reportedly promised to return the reins if and when HATOYA
is released. Consequently,, opposition parties have-b-een antici-
pating a split in the Liberal Party if YOSHIDA refuses to step
down following the treaty.
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 dropping of the charges. Informants in close contact with Berlin public
opinion have expressed concern over the loss of US--'prestige and an even
greater loss of faith by East,Germans. In an extremely resentful debate
on the affair in the West German parliament on 20 June, speakers of all
parties condemned the HICOG decision. US officials complain that the
German leaders decided to embarrass HICOG despite-the fact that they were
privately apprised of the real nature of the case. The Minister of-Justice,
Thomas Dehler., particularly attacked the US action bitterly in the Par-
liament. debate, (C Bonn 980, 21 June 51; R Berlin 1534, 21 June 51;
R'Frankfurt 10217, 16 June 51). COMMENT: The Federal Parliament is
reported to have unanimously passed bill for the protection of personal
freedom introduced by Chancellor Adenauerss party following the Kemritz
debate. The bill provided for sentences at hard labor in cases of kid-
napping and denunciation.,
authorities". West German and West Berlin newspapers have unanimously
attacked the US action in bitter tones, ignoring the reasons cited for
US, and that "there is no basis for the prosecution by Allied or Gel
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SECTION 3 (WESTERN)
GERMANY. Germans Incensed' at US Action on "Kemritz Case"o The "Kemritz
Case" as grown to 'e propo " ions - o a_ major 'scan in _ the ,West. German
_press and parliament during the past. week, (Dr. Hans Kemritz is a former
German intelligence officer who allegedly helped the Soviet MVD kidnap
Ierman nationals in East Berlin during 19:5 and 1916, but who also is
paid to have made "a valuable contribution to Western intelligence".)
On 13-June the US High Commission released a report that;, after a six
months' investigation, charges against Kemritz were being dropped by--the
n
'Csi FRANCE. Socialists' Declare."Class Revolution".No Longer Inevitable,
Leaders of the French Socialist Party are said to feel that economic
changes, particularly in the US9 have wrecked the old Marxist. dogma of
growing economic concentration' and crisis culminating in "inevitable"
revolution. Consequently the Socialists are striving for the support,
of the-growing mass of office workers, and.small shop, service station,
artisan and similar groups, including skilled workers., with small but. -
definite private property"interests. The Socialists fear that in,,spite,
of reported reductions.: in: C.cemnu 11:st me'mbership' in some regions since 1947,,
Communists are able to. take advantage of the general prosperity in France
which is antagonizing millions of low-wage-earners. (C Paris 79819.
21 June 51) CO Guy Mollet,
Socialist Secretary-General, is deeply
-concerned thatla ores purchasing power has stood still while production
'has-risen about one-third above preorld War II. The Socialists intend
--to condition. their participation in the next government-though not
necessarily their support of -it in the Assembly-oh the adoption of broad
measures to-check Communist exploitation of the major price rise. Since
the Socialists' principal support-in recent years has come from civil
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tiLr
25X1X
servants and small shop owners, the party is not likely to modify its-
social program substantially for their sake at the risk of leaving the
Communists a still freer hand with labor''
25X1X
AUSTRIA. Communists Sound Out Workers on New Strikes.
the party will
not risk attempting a general strike in connection with. the expected
fifth wage-price agreement unless it is'-certain of better results than
.hose obtained at the time of the last agreement in September and October
--950. The party will.try to delay the conclusion of a new agreement until
it has received reports (called for by 1 July) on the attitude of Com-
munist workers (especially in the Soviet-controlled industries) and non-
Communist workers toward new strikes, 25X1A
COIvMENT: The Communist attempt at a general strike last fall was broken
by resistance of the bulk of labor, The discipline in the
Communist USIA plants is even open to question this year, In April, the
workers in one USIA factory went on strike, against-the orders.of the
Soviet plant manager, in protest` against the dismissal. of one worker who
had distributed anti-Communist literature. It was necessary for the
manager to submit the worke r e s case to arbitration in order to end the
strike,
trn ITALY. Strike of Government Emplo ees, A. twenty-four hour strike of
governmen employees, c le by Communist and non-Communist labor unions
on 22 June, was about 60% successful, almost as effective as that of 8 May.
In addition employees totaling 600,.000 in semi-government and local
.'ministrations were called out on a sympathy strike. The unions asked
for increased pensions and a twelve per cent salary raise., which was
countered by a government offer of four per cent and warnings that larger
increases would entail the risk or runaway inflation. Today9s walkout
.
may -speed. -legislation regulating ,the r_igl t to strike. (U NY Time's
23. June 51) COM NT: This-latest strike of government employees has
-afforded the o fists another. opportunity to pose as the champions of
'labor, h
allissue (see OCI Daily Digest, 21 Juneg5l)eLegislation will-compromise on this
regulating the
:right to strikehas been considered ty the government for some time, but
,would appear to be inadvisable at least until the civil servant demands
are settled and the municipal elections in the autumn are concluded,
r
"B" SPAIN, Prospects of U5 Economic and Military Aid Strengthen Spansi
egirme, The Export-Import Bank ~ been a_uthorized allow Spain to
eat and other consumer goodsgout of the $62,5.1 ion Spanish
loan voted by the US Congress in 1950. Spain has'already been'authorized
one $5 million wheat loan, but has - asked for two additional $10 million
loans to buy wheat and coal. A decision is expected shortly. on these
two requests, which if approved, would mean that,wit; additional projects
which have been approved, Spain will have drawn on more'than half of the
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11311
25XIX_
total loan. Prospects are good that Spain will receive another US
loan of at least . $100 million. to be included in the US foreign aid bill
for the next fiscal year and it is, possible - that military aid may also
be given. (U NY Times, 23 June 51) COM1 NT: Spanish authorities will
be greatly encourage y-prospectsof s ea e US economic. aid., which
they have increasingly. emphasized as having priority over military as-
sistance., Francois position will be. strengthened politically bb this
development, The .opposition within Spain, which has been much encouraged
by the recent widespread strikes, will be alienated. The granting of
consumer goods loans may improve the: economic situation temporarily,
However, Spain will continue to require stopgap aid of this.type so long
as the basic economic weaknesses are not overcome and autarchic economic
policies discarded4;,The economic weaknesses will call for considerably
more aid than has been proposed; abandonment of the autarchic policies
does not appear within the political capabilities of the present regime.
100,000 tons this month, unless Denmark delivers certain antibiotic
and automobile and truck spare parts as call d for -in the Danish Polish
Trade Agreement of 'November 1950, hat his govern-
ment had learned this from Danish o imp. rs who in turn had received
the information from Polish coal. exporters, A stoppage would entail a
loss of 1,000000 tons of coal over the remainder of the calendar year.
(C Copenhagen, Joint Weeka_ No, 24s 15 ' June ' 51) CO NT a The crucial
importance of Polish coal, to Denmark is beyond queue (see' OCI Daily
Digests, 7.Apr and 15 June 51); but it is possible that the Poles are
merely resorting to indirect threats to. force Danish compliance with the
trade agreement. On the. other hand, it is possible that the Danes nay
,be exaggerating the present extent of Polish,ptessure in order to obtain
either a special allocation of Americancoal or some other form .of 115
assistance in solving the Danish fuel problem;
expects coal shipments from Poland will cease after the delivery of
1'B" . UNITED KINGDOM, British. M litarY Operati~o, s in Iran Would Be for , Any Pro e
off" if
c ion
e Onl A War ice official says
that on]e of British
lives. are endangered will, military operations" be. ordered : in Iran, in
which case troops of the.3rd Infantry Brigade. would be airlifted from
the Suez Canal Zone to Shaiba7field Iraq, and , would. proceed overland
.toward Abadan (about 4o- miles) to cover the evacuation of British
personnels These troops would be immediately withdrawn when evacuation
is completed, Fighter s4u:adrons alerted in Transjordan and Iraq would
be used only to cover troop movements if ordered; likewise a_cruiser
and three frigates in the Persian..Gulf area are on hand to assist if
necessary. Transport planes available in the.(anal Zone are being,
augmented by 15 flown out ' from `the UK, (TS Array Attache - London 77
21 June 51) COIM2ENT': This statement of British intentions with respect
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to military operations explains most of the recent scattered reports of
various UK air , sea rand land unit movements ."in in the areas The British
are apparently-sincere in. their intention to protect lives only; they
no longer refer to property-protection, and do not contemplate physical
resistance even. if the Iranians try to take over the refinery '.by force.
If a total evacuation of British personnel is ultimately found necessary,
well-laid plans, as indicated above., should diminish the-possibility of
ultoward incidents, but'.such incidents cannot be ruled out entirely while
such a tense atmosphere prevails.
ARGENTINA. Army Officers' Arrested for Plotting. Five junior-grade army
o icers are under arras , c arge with attempting to incite revolt against
'the_.government. Announcement of the arrests follows headlines press reports
of a plot..to assassinate President and Mrs Pe on. (R AP Ticker, 23 June 51)
CQMNTo Peron has increased surveillance over army officers the principal
hrea .to his regime (see OCI Daily Digest, 11 flay 51). Considerable op-
n
iositionts no evidence of Peron a (1) does a exist in
concerted important effort t Army-circles (2) he far there
? 9 b t extent
of support from enlisted men whose. position has been improved by Peron,
.and (3) a possible-successor to Peron. The'. Administration press will
'continue to propagandize such plots, real or otherwise,. in an effort to
whip up loyalty of the workers to support Peron ir} the forthcpming election
and to deal with any opposition which might try to.use forced
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CENTRAL INTELLIGENCE AGENCY
DAILY DIGEST SUPPLEMENT
JUN .2 1951
Not for dissemination outside 0/CI and 0ME.
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CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST OF SIFNIFICANT S/S CABLES
23 June 195].
SECTION 2 (EASTERN)
"B" IRAN. Air Force Placed on Alert Status., The US Embassy i T hran reports
that the Air Attache has learned that the Iranian
Air Force has been placed on alert status "for any contingencies connected
with oil nationalization issues." The Iranian Air Force has requested
authorization to replace a Hurricane patrol now on duty in Tabriz with
five F?472s with full tactical armament and accompanied by pilots, crew
chiefs, and armorers. '(S, S/S Tehran 3380, 21 Jun 5l),, CONMENNTTj The re-
quest to replace the Hurricanes by the much newer F-1+71s in the.Tabriz
area on the northern frontier, indicates that the Iranians at this time
are not concerned solely with the security problems in the southern oil
regions. 25X1X
"B" Italy Rejects Iranes Api oach for Oil Technician. MMM
has informed US Ambassador Grady in Tehran that several weeks ago Prime
sinister Mossadeq asked if the Italian oil industry could supply Iran with
oil technicians. The Italians refused this request, but agreed to send two
representatives of the Azienda Generale Italiana Petroli (AGIP). to confer
with the Iranians on how the Italians nationalized their oil industry, and
hogi it'worked out its relations with private companies,, (S, SIB Tehran
3378, 21 Sun 51)0 C a Iran has tried to get technic is and advisors.
from various countries, but so Par,, it has obtained no firm commitments
i'm,om technicians in any foreign lountryo The major US oil companies have
tacitly agreed to have no part ih Iranian oil exploitation, with the ever
increasing likelihood that Iran will find itself exceedingly hardpressed
if the AIOC pulls its personnel out of Iran. There was one report on
25 May that the Soviet Oil Administration in Austria was making a prelimi-
nary check to see who might be interested in going to Iran,, However, there
has been no confirmation of this report. 25X1X
"B" II ONESIA. Strat$gic List Exc3Z1es Rubber.
s r
25X1X that he had received the list or
materials which the Indonesian Goverment considers subject to the UN em-
bargo on Communist China and that the list omits rubber. In explaining
25X1X the omissio (1) strong Indonesian public opinion blaming the
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recent fall of rubber prices on the UN embargo; (2) Government fear that
Communist and leftist pressure could cause the cabinet to fall on the em-
bargo issue; and (3) the Indonesian trade pattern
is be or has been exported to Communist China,
the strong adverse public reaction which would develop in
the US over Indonesian omission of rubber and suggested that the Indonesian
Goverment supplement its strategic list with a statement that Indonesia is
adhering to its historic trade pattern under which no rubber is shipped to
Communist China. (S9 S/S Djakarta 1399$ 21 Jun 51), On the
basis of its "independent " foreign 'policy and as evidenced by its absten-
tion during the UN voting on the embargo., Indonesia has bean most reluctant
to support the embargo on strategic materials to Communist China. Although
forced to support it by a majority decision of UN members., the Indonesian
Government undoubtedly finds it necessary to make a poet of exercising its
neutrality by omitting rubber from.the strategic list. Moreover., there are
reports that Indonesia has been negotiating with Communist China for supply-
ing the latter with large quantities of rubber. Press criticism on the em-
bargo has been unusually bitter and the Communists have been quite vocal on
the. subject., but a firm government stand could easily override parliamentary
opposition,
"Bit Jam, Peace Conference Mar Be Held at San Francisco in Earl September,
The US and the UK are now preparing to circulate the preliminary . Japanese
peace treaty draft among the non-Communist Governments principally concerned,
It'is hoped that the draft, together with any amendments which may result
from the initial circulation, can be forwarded under Joint US-UK sponsorship
for comment to all the nations which were at war with Japan on or about
20 July.. together with an invitation to participate in a conference for
final. consideration and signature at San Francisco about 3 September (C9
State 6036, 21 Jun 51),
SECTION 3 (WESTERN)
"B" UNITE{? KINGDOM, Foreign office Clarifies Position in Ru:ir A regiment
Negotiations. A UK Foreign Office spokesman has stated to US Embassy of-
ficials in London that the sole obstacle to UK acceptance Of the proposed
Ruhr agreement protocol abolishing the International Authority of the Ruhr
is the CabineVv reluctance to give up a bargaining position In trade
negotiations currently in progress to secure an increase in German scrap
iron and steel export commitments, The Goverment believes the scrap prob-
lem to be so important that it is 4 01,, 1. to pass up the opportunity to
capitalize on the German eagerness to be free of international controls on
coal and steel, The Foreign Office is aware of the adverse French and US
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reaction to the long UK delay over this issue, but insists that the
British position should not be interpreted as a move to sabotage the
Schuman. Plan. The Embassy comments that the Foreign Office is sincerer
trying to formulate a pro sal acceptable to the Cabinet to end the
present deadlock. (S. S/London 6707, 21 Jan 51). COMMENT: The UK
has never regarded support of the Schuman Plan as a matter of immediate
concern for the protection of vital UK interests, and is therefore not
unwilling to?delay the Plan's development whenever it appears necessary
to prosecute those interests. In 1950.. Germany was the UKos principal
supplier of scrap., and therefore any difficulty in maintaining this
trade would be a matter of vital concern to the operation of the national-
ized steel industry.
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