DAILY DIGEST JUN 25 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000200490001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 9, 2016
• Document Release Date: June 12, 2001
• Sequence Number: 1
• Publication Date: June 25, 1951
• Content Type: SUMMARY

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49252
COPY NO. 39
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST
NOTE: 1.
JUN 25 195
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 Off'
i
ce of Current Intelligence.
Marginal letter indications are defined as
follows:
"A" - items indicating Soviet-Communist
intentions or capabilities.
- important regional developments
not necessarily related to Soviet
Communist intentions or capabilities
"C" - other infoimat on indicating trends
and potential developments
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State Dept. declassification & release instructions on file
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SECTION 1 (SOVIET)
"A" USSR.? Malik's Cease=Fire Proposal Ma Indicate Willingness to Settle Korean War,
In a 23 une UN Radio Broadcast,, Soviet-UN Delegate Malik.1) suggested that "as
a first step discussions should be started between the belligerents for cease-
fire and an armistice providing for the mutual withdrawal of forces from the 38th
Parallel;" (2) attacked the polio of-the three Western Powers, particularly the
"North Atlantic Military Al7.iance,6 armed intervention~_in Korea, seizure of For-
mosa,, and the transformation of the UN into an. instrument of war; and (3) sum-
marized current Soviet "peace" themesQ--(UNew-York-Times,.25 June 51). COMMENTS
Although the manner in which Malikis ceasefire proposal was made suggests that
it may have been designed for propaganda purposes.--it possibly indicates a Soviet
desire to settle the-Korean-Warn If sog-the USSR may-have preferred to assume
the role of "mediator" because of the Soviet Union's official position of non-
involvement in the Korean Ware Even-though Malik does not indicate what nations
should participate in the discussions or that North Korea would be accessible to
UN inspection teams,, Malik?s proposal is the first clear suggestion from the Sov-
iet Government that a cease-fire-might precede withdrawal of the "foreign inter-
ventionists" or discussion of a general Korean settlement. The other unacceptable
Chinese Communist demands for a peaceful settlement,, which were omitted by Malik
and concerned seating in the UN and Formosa, have been omitted from informal
statements by Soviet spokesmen and from Moscow propaganda since early April. Dur-
ing the last few month's,, there have been devious "feelers" from the Soviet Gov-
erment regarding a Korean settlement,, including Malik?s conversations with UN
delegations, and in early June, Malik accepted the UN invitation to broadcast.
HBO Ukraine Farmers Fail to Meet Quotas. According to a Ukrainian Regional
Service-broadcast of 19 June-, the present plenary meeting of the Central Com-
mittee of the Ukrainian CP9 reports that discipline and organization of work
in the kolkhozes have been improved as a result of the consolidation of small
kolkhozes into larger kolkhozes and the strengthening of their "administrative
cadres." Although the meeting found that tractors and other complex machines
were being utilized; to better advantage,, it noted that Party organizations and
state agricultural organs in some oblasts and rayons are "unsufficiently util-
izing the advantages of the enlarged kolkhozes and the increase in technical
equipment and machine-tractor stations;" Offending areas specifically mentioned
are. Shitomir and Tarnopol oblasts for underfulfilling the flax and hemp sowing
plans,, and the kolkhozes of Poltava, Kirovograd and Kamenets Podolsk oblasts, for
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failing to fulfill the early fallow plowing plan; --(R?FBIS, 21 June 51). Comments
This is one of the first press references to results-of the current plan for the
amalgamation of smallkolkhozes. However., it seems. to imply that despite some
improvements., agricultural production-has not increased-to the levels optimis-
tically anticipated a year ago.
"A" EASTERN EUROPE. Army Strength Reported to be Gradually Increasing. US Em-
bassy Warsaw reports that presentlyavailable'information indicates a trend
toward a general increase in the strength of the Polish Army. The Embassy
bases its opinion upon (1) personal observation of new persor}nel., (2) continued
~FxF increase in the use of new trucks by the-Army.,-and-(3) repeated reports of
addition, the Embassy has received
new artillery and infantry units.are being formed.
by the Embassy, has reported that the Army's
25X6 January 1952 goal is 22 divisions with approximately 228,000 men. (SO-Warsaw 983,
22 June 51). Comments The Polish Army's present strength is estimated at :ii jN
180,000 after an increase in estimated strength from 136,000 in January 1951.
On 11 May,, the US Military Attache in Warsaw reported that non=coms, specialists,
and officers were being recalled to active duty from the reserves. The report
added that men scheduled for release from. military service were being retained.
Previous intelligence has revealed that new mechanized units were being formed
in the Polish Army,
YUGOSLAVIA. Zagreb Peace Congress to Stress Co-existence. US Ambassador
Allen reports that the Yugoslav chairman of arrangements for the October Peace
Congress in Zagreb has informed him that the. gathering will emphasize the fact
that equality of the nations in the "free world" permits their peaceful co-
existence. The Ambassador was assured that each foreign delegation will be
free to add items to the suggested agenda (0/CI Daily Digest, 22 June 51) and
to express its own ideas. Allen advises that the Yugoslavs apparently have
received enough encouraging responses from foreign individuals and groups to
justify their publicly announcing the Congress, its proposed agenda, and the
fact that eminent public figures from.. foreign countries will attend. The Am-
bassador comments that the UN should not publicly endorse the Congress since
the UN "should preserve its role as a universal organ, while the Zagreb con-
ference will certainly be a partisan meeting." (R-Belgrade 1959, 22 June 51)0
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Comment.- The Yugoslav Government will undoubtedly-attempt to use'the Congress
to build up Yugoslav prestige as the leading_.exponent.of anon-Soviet brand of
Communism which can co-exist with Western democracy. If-delegates of the cal-
ibre of Mrs, Roosevelt (0/GI Daily Digest, 15 June 51) actually do attend, the
Congress can provide a powerful Western propaganda weapon. to counteract the cur-
rent Soviet Peace Appeal.
Growth of Trade With Greece Faces Difficulties. The US Ambassador in Athens
reports that US hope-for-snbstant al..trade between-.Greece and Yugoslavia has
not yet materialized, apparently because the two countries.mistrust one another
and anticipate more profitable trade elsewhere. The principal economic bene-
fits to Greece from improved relations with Yugoslavia have been secured through
more economical and faster transportation connections_with:Western Europe. The
Greek Government complains that Yugoslavia is demanding payment'in dollars in-
stead of-exports,, as provided in the trade. agreement, ',Thus:fart, Yugoslavia has
accepted only low grade tobacco., which, the Greeks allege, will release high grade
Yugoslav:. tobacco to compete with`Greek tobacco exports on the world market.
(C -Athens., 45609 22 June 51)0 Coimnento A Greek-Yugoslav trade agreement signed
on 10 Apr 51, after ten years of interrupted. trade relations, provides for trade
on a clearing basis with a settlement of-the balance in dollars six months after
expiration.of the agreement. Greek:Yugoslav relations have generally been, m
proving during thelast.six months., although the two governments retain sus=
picic s based on long-standing differences.
Exchange of Ambassadors with Canada Expected. According to US Embassy,
Belgrade, the Yugoslav and Canadian Governments will announce the elevation of
their respective legations to embassies in the near future. The decision on
the part of the Canadians was prompted largely by the difficulty of finding a
properly qualified person below ambassadorial rank to fill the important posts
in Belgrade.... Despite the apparent improvement in relations, the status of
Archbishop Stepinac_eontinues to be a matter of concern to the Canadian GoV
erment which will probably. inform the Yugoslav Government that the Archbishops
continued detention oanstitutes on. irritating factor. in Canadian-Yugoslav, rdla=
tions. (C Belgrade 195 8 22 Xugi9C?Otta-0e.,1.9479, af) CommeFt-. Yugo agreem+.ena_- to the
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elevation of Canadian relations to ambassadorial status Illustrates the Tito
Government?s readiness for improved relations with Western Powers. The Canad-
ian Embassy in Belgrade will probably add the weight of Canadian Catholic op-
inion to urge the release of Archbishop Stepinac.
mho
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SECTION 2 (EASTERN)
"BI GR CEP Greece to Offer Additional Troops f r Korea,, The US Ambassador in
Greece reports that on 24 June both the King and the Prime Minister informed
him that the Greek Government had definitely decided to offer the UN addition-
al troops for Korea,, (S Athens 45969 25 June 51),, COMMENrs Greece has
strongly supported the UN9 and the commitment of additional troops underlines
the backing which has previously been forthcoming,, A further consideration
which. may :have influenced the Greek government to take this step may have been
the desire to show the NATO deputies - currently discussing the inclusion of
Greece in NATO - that Greece is ready and willing to assume military responsia
bilit p n
bjections to a lump sum payment is based on desire to get BAPCO to commit it-
ARAB STATES,, Bahrein Sheikh to Receive Lump Sum Oil Payment as Interim Measure,,
The Bahrein Petroleum Company has decided to give the Sheikn of Bahrein a lump
sum payment9 thereby hoping to postpone any increase in payments of oil revenues
until the pattern of Middle East royalty rates becomes clearer. The comparr
feels that its original offer of increased royalties would comy a unfavorably
to those received by Saudi Arabia or those being offered to Iraq and Kuwait.
Company officials feel that an interim lump su payment would satisfy the Sheikh
who is becoming impatient because he is not receiving payments comparable to
other, Persian Gulf oil areas,, The Department of State suspects that BAPCO wants
to avoid signing an agreement which might have to be revised in favor of a 50-50
profit sharing arrangement covering both producing and refining operations,, The
Department has questioned US EmbassyLondon as to whether the UK Foreign Office?s
self to something other than a 5050 arrangement,, (C9 to London 60829 22 June
51) ,, COMMENT-. The entire Middle East oil picture is confused because of the
Iranian situation,, Increases in royalty rates are under consideration in Irags
Kuwait9 and Bahrain9 with each company wanting to avoid AIOC?s fate in Iran., but
unwilling to proceed faster than any other company. There is some indication
that the 50?50 profit sharing arrangement instituted by ARAMCO may be super-
coded by more liberal arrangements.
IN OMR LH _ AO Peiping Threatens Overseas Chinese in Indochina,, US Legation
Saigon reports that a number of local Chinese merchants have been officially
notified9 through the open il9 that their properties in China would be con-
fiscated if they failed to pay preposterous "back" taxes,, These notifications
also contained implied threats of reprisals against the families of tax nde-
linquents,n A specific example of Communist pressure upon overseas Chinese
is the case of a Chinese vice consul, who received word from his wife that she
was imprisoned in Swatow and would be executed unless he broke with the Kuo-
mintang and returned China to place (his) talents at the disposal of New
China." Of those Chinese interviewed on this matter9 the Legation states that
one fourth have indicated a decision to comply with Communist demands,, (S
Saigon 23019 22 June 51) GO Similar efforts to exploit overseas
Chinese have been noted elsewhere in Southeast Asia9 and will contribute to
the growing anti-Communist sentiment among overseas Chinese, Be long as these
Chinese see no alternative to the regime presently in Peiping9 however9 their
antagonism is likely to be hold in check and many will bow to Communist demands,
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"C" NEW ZEALAND. G ernment Rejects Watersiders? Return-to-Work Offer.
The New Zealand Government refused the most recent return-to-work
offer of the striking Waterside Workers Union and demanded resumption
of work on Government terms. The union then decided to continue the
strike. (R Wellington 106, 22 June 51). COMKENTs The four-month
watersiderso strike represents a showdown between the Government and
the WFTU-affiliated Waterside Workers Union (WV U). Following numerous
indications that cooperation with the union was impossible and convinced
that union tactics followed WFTU directives, Government strategy is
aimed at the removal of present 11WU leaders from their authority over
the waterfront. The WWU was deregistered in February and its authority
has been replaced in many ports by newly formed local unions which
have since been registered with the government. With the exception of
Wellington, work at major ports is progressing reasonably well. Mili-
tant national leaders of the MU, howsver, may be expected to postpone
oapitulation as long as possible.
"C" CHINA. 4everngr K. C. NU Receives Taiwanese Vote of Consfidenge. The
.,.administration of K. C. WU, the fourth Nationalist governor of Taiwan
since 1945, received a unanimous vote of confidence from the Provincial
Peoplews Council (PPC) at the conclusion of its semi-annual meeting 23
June. The PPC9 an elected body of 34 members, all natives of Taiwan.,
endorsed WUvs past and future programs as having been tailored to fit
the needs ' of the Taiwanese ? (U Taipei .AP, 23 June 51) COMM M -.
While the PPC has little actual power in the administration of Taiwan
affairs, its endorsement is believed to reflect a growing sentiment
on the part of the Taiwanese that the Nationalists, after getting off
to a bad start, now offer some favorable possibilities. Indications
of something more than grudging_aadeptannce of the present administration
have been observed growing in proportion to the increasingly disturbing
mainland reports which indicate the Communist alternative would be a
more. repressive regime.
"C" Go .nists Bari Feather Sxports Because of Or t Commitmauts.
The principal feather exporters in Hong Kong report that th a Chinese
Communists have a priority commitment to ship 2,880,000 pounds of
feathers to an Eastern European county, probably Czechoslovakia., and
as a result have banned exports to non-Communist buyers. (S Hong
Kong 3867, 21 June 51). CC ANT s Feathers have several military
uses, including insulation and sleeping bags. They are in short
supply in the US9 but not in Eastern European satellites which pro-,
.
duce enough for their own use. The Soviet Orbit may be buying
Chinese feathers with the intention of re-exporting them to western
countri es e
"C" KA. Intensified Emir Jet Fighter Operationso The Far East
Command views the intensification of enemy jet fighter operations
during the past week as firm indication that the enemy will continue
to provide vigorous air defense of the Yalu River border area,
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MIG-15 ? s engaged UN ai rcraft on each day last week except on the
21st when bad flying weather may have provided a reason for the
lack of activity. In addition., the improved quality of enemy
fighter operations is indicated by the fact that in each of three
aerial engagements during the week an F-86 was lost to enemy
action. This sharp increase in combat proficiency may be attributed
to the probable commitment of a new,, highly trained jet fighter
unit to the Korean air war., an hypothesis supported by the obser-
vation of new markings on an enemy jet fighter group. FEAF u s
estimate of the total number of jet fighters available to enemy
forces in Manchuria has not been increased as there is insufficient
evidence to estimate accurately whether this unit is new or one
previously active over Korea and re=committed following further
training.
"C" -0-ommunisis Plan "Peace Month". The Peace Protecti on
Committee., Japanese Communist affiliate of the World Peace Council
has designated the period 25 June to 15 August as "peace month".
Four days - 25 June (Korean War),, 7 July (Sinn-Japanese War).,
1 August (Anti-war Day)., and 6 August (Atom Bomb Day) o are ear-
marked for high pressure national drives., and each day that
bombs fell eaywhere in the nation is listed for local "peace"
expression. The committee is aiming at 1090009000 signatures
for a big-five peace pact. (S SOAP Press Analysis., 14 June 53, )?
CO N s The Japanese public has become resigned to the
inevitability of a treaty without the participation of the USSR
and Chin,. There is9 however., considerable appeal to the mar-
weary Japanese in any movement which gr omises "non-involvement"
in any futur US-USSR struggle., as evidenced by the estimated
3 to 6 million signatures for the Stockholm appeal. With the
Communist Party expecting to be outlawed following the treaty..
this campaign points to a last all-out overt effort to discredit
the Yoshida regime for its pro US policies.
"C" JAPNYUKYtlS. Manggn
ese Deposits Discovered in Rvukvus. Two
rich deposits of manganese., recently discovered on the island
of Yaeyama in the Ryukyu group are believed to be among the
worlds best., with the ore showing 70% manganese content. De-
posits are estimated at over 4 million tons., and are believed
capable of yielding 209000 tons each month for 17 years. (S
FEAF AX 89399 21 June 51) , s If this report is borne
out., the ore will serve a double need by providing exports for
the normally deficit Ryuk Yuan eccn omy9 and providing Japans s
rapidly expanding steel industry with critically needed manganese.
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SECTION 3 (WESTERN)
"B" GERMANY-FRANCE. Views on the Organization ' of a German Defense Contribution,'
25X1X does not'expec e o coming
report on the.European Army discussions to resolve the principal differences
in regard to such a force., but he believes it will provde.a basis for
considering the European Army idea together with a German defense contri-
bution to NATO. (A report of the Petersberg talks on a German NATO contri-
bution is about to be released.). To a plenary session of the European Army
25X1X conference on 22 June the view that a German contri-
bution to NATO could not be discussed by itself because the German proposals.,
departing from the.. prescribed terms., are. not accepted by the Allies, Ac-
25X1X the outstanding differences'in the European Army conference
con ern: ze of the basic military unit. and the level at.which
international integration will take plane., (2) the question of whether the
defense'commissariat shall be headed by one commissioner or a committee.,
(3) the powers of the assembly over the budget, and (4) the degree of detail
to be included in the European Army treaty. The Germans say that a treaty
25X1X cannot be signed until.political issues., such. as the occupation statute,
are settled, when the report on the Paris talks
is received about.l0 July., the-11p participating governments will then decide
whether to give new instructions to the delegates at Paris, or hold a
ministerial meeting, (S Paris 8040., 23 June 51) 'COMMENT: By considering
the Petersberg and Paris reports simultaneously., the French hope to-smother
the German proposals fcr a direct contribution to NATO. These proposals
are regarded. by the French as tantamount to plans for a German national army,
chiefly because they envisage a German general staff and defense ministry.
Postponement of action on these proposals has already been a major factor
in the reversal of the trend town ^d neutralism in France and has. helped
the French Government prepare public opinion fora major German contri-
bution to Western defense.
?'B" FRANCE, Election. Losses. not a Defeat for Communist Party. The decrease
C.ommunis pop r-v ee rom in 19 to . % 1951) can
hardly be regarded as a defeat., inasmuch..as the party again demonstrated
its ability to command the strongest popular support of any party in
France. French public opinion has., however, begun to veer away from
Communism- even though the party was in a favorable position to exploit
social discontent and the desire for peace. Communist losses were greatest
in departments where the party9s strength has been traditionally low., and
the vote fell appreciably in departments where US troops are presently
locat_ed0' The election results also demonstrated that the neutralist move-
ment has no "grass roots" following and that the Independent Communist
Movement with only 20,000 votes made no. important cut in the Communist
vote. Furthermore, the drop in Communist voters does not indicate any,
loss in-real party strength or capacity for action. The extent of the
Communist popular vote would seem to point out that large segments of the
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French people fail to understand that the French Communist Party (PCF)
is an instrument of Moscow': (S Paris 79809 21 June 51) COMNT: A -
continuation of the shift in.French public opinion away from Com-
munists is at present doubtful in. view of the unfavorable outlook for
adequate anti-inflation measures in. France0 The bulk of the Communist
electorate., which remains convinced that the PCF is the only dependable
-champion of low-income groups., considers that its. first loyalty is to
France. It is now probable that the PCF.will devote less attention to
the neutralists., but will watch carefully, the Independent Communists-,
"B" ITALY., Civil Defense Bill Meets Stiff Communist-Inspired Op2ositio'n., On
21 June the Chain er of Depuies, By a slim majority of 237 votes to 20L1,
approved in principle the Government-sponsored civil defense bill em-
powering Interior Minister Scelba to create the administrative machinery
necessary to.protect the civilian population from natural peace-time
calamities and from war-dine dangers.,. The bill still requires article-
by-article approval by the Chamber before going to the Senate, The
Communists9-:who with their Nenni Socialist allies'comprised most. of the
opposition, charged that the-bill would give exceptional war-time powers
to-the government in violation of the Constitution and would enable the
majority Christian Democrats to create a party militia modeled on the old
Fascist militia., They also announced their intention to organize a nation-
wide propaganda campaign to unite all forces opposed. to the bill. (U Rome
58809:22 June 51; R FBIS9 22 June 51; U NY Times., 22 June 51) COMPMENr:
The Communists, by their attack on the incr. ias g authoritarianism of the
Christian Democrats., have'succeeded in'rallying a large sector of the non-
Communist deputies in opposition to the. bill; Delaying tactics by the
Communists in the form of proposed amendments to the bill will not prevent
its eventual passage but may delay it, particularly if these maneuvers are
integrated into the Communist peace campaign which is enjoying considerable
public support, Security measures envisaged by the Government's bill
should further improve the confidence of the Italians in the government's
ability to maintain public order.
"C" UNITEDKINGDOd., Shortage of ManpowerSeen as-Threat to Rearmament Program,
A probable s ortage of skilled labor, rather an the more publicized
scarcity of.vari.ous essential raw materials, is likely to be the most
critical factor in Britain's expanded defense production program, Some
manpower shortages already exist., notably in.the engineering and aircraft
industries. In the machine tool industry a shortage of skilled labor will
-become acute as soon-as present deficiencies in plant capacity are over-
come. Over the economy as a whole it has been officially estimated that,
since unemployed labor is practically:non-existent, the rearmament program
will'requ.ire the transfer of.some 500,000 workers to defense industries.
The war-time authority for the redirection of labor was rescinded in 1949
and prospects for a voluntary redistribution of labor appear rather dim...
inasmuch as many of the defense jobs are not particularly highly-paid and
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21 June 51) COMMENT: Although there will be considerable anti French
feeling as the res t of this election, it is.not likely that sufficient
cohesion and backing will be obtained to secure the removal of these of-
ficials. The U'DMA is extremely vacillating and its leaders opportunistic.
While a coalition with the MTLD and Communists. might be formed.,,there is
little probability that it would develop sufficient force to threaten
Algerian stability,
the fluctuating nature of activity in these industries-may,, in a period
of full employment., discourage any incentive to transfer, It is expected .
and indeed'rather hoped-that the shortage of materials in industries
primarily engaged in supplying consumer goods will force redundant workers
to seek employment in the defense industries, Foreign labor will be
augmented as much as possible but will probably not appreciably affect
the overall manpower situation, There is also some speculation that
industrialists are attempting to obtain exemption from military service
for, specific categories of skilled labor such as that now granted to coal
miners. If a serious lag in defense production develops as a result of
a manpower shortage., the government may reluctantly -find it necessary to
reinstitute the Direction of Labor. order, This will be regarded with
extreme disfavor by the .labor rankand-file.
ALGERIA. Administrat on1s Electoral-Pressure Encourages Nationalist-
ar ist' o z;on4 Bat o ox s g an po ice pressure use in
e .,con o ege (native) and fraud in the First College (European and
Europeanized natives) were prevalent in the French National Assembly
.elections held in the Algerian Departments, in which all nationalist
candidates were defeated.- In reaction to these activities., the moderate
nationalists (UDMA) are said to be seriously considering the abandonment
of their policy of conciliation and the conclusion of an alliance with
the extremist nationalists '(MTLD)and the Communists. A liberal group is
being formed and will endeavor to obtain the removal of the.Governor General.,
the Secretary General of Government,- and the Prefect of Algiers, who are
2 -3
q'B?' FR TCH.,MOROCCO. Sentencing of Nationalist Invites Anti-French , Activity o
coca na we French moon r6U_eUYcoUr_E Sri Rabat as sentence a
nationalist leader'to three months. imprisonment on the charge of being
a threat to public security for having signed telegrams addressed to the
UN and the-French Government protesting alleged French repressive measures
in the Atlas region. The nationalist party probably will use this action
to demonstrate the party's solidarity with the Berbers of the Atlas area.
(C Rabat 160, 22 June 51) CC' NT: This is another incident through
which the French demonstrates the s determination to wipe out nationalism
and maintain the whip hand in Morocco, Inasmuch as the Moroccans lack
the means to resort to violence, such. measures appear too drastic. By
keeping the Moroccan crisis of early 1951 fresh in the public mind and
furnishing evidence of French repressive activities,, the French aid those
who seek to have the Moroccan.situation discussed in the UN0
. 10.
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"C1e UNION OF SOUTH AFRICA, New Anti-Government Group has Su ort of
Industrial and Financial in-t-erestso- US Embassy Cape town has learned
ha the War Veterans a Action cmmittee (WVAC), which was responsible
for organizing the significant multi-racial demonstration on 28 May
against the government bill depriving Cape Colored voters of their.plac
on the common voters' roll (see OCI Daily Digest, 29 May Si), has been
receiving-help from industrial and financial interests__ These interest
are strengthening the WVAC in the hope that it may help to defeat the
Nationalists at the next general election, (R-Capetown, Joint Weekas
48 and 19, 1 June and 8 June Si) 'COM~,NT: The relationship between th
veterans' group and the opposition Uni, e Party (UP) is not yet clear.
The Nationalists are not alarmed at the formation of the new group, sing
they believe it will.cause a split in the UP- which will in any case be
weakened by passage of the Colored vote bill, since Colored votes were
decisive in the UP's retaining several parliamentary seats in the Cape*
With the support of financial and industrial interests which fear the
political and economic consequences of the government's rigid race
segregation policies, the WVAC may become a rallying point for anti-
government forces which are discouraged by UP ineffectiveness. If the
.WVAC and UP should cooperate., they would constitute a threat to the
Nationalist government.
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CENTRAL IN TELLIG CE AGENCY
DAILY DIGEST SUPPLEMENT
JUN 2 5 1951 _
Not for dissemination outside 0/CT and 0/NE.
49232a-
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 Approved Foolease 2001/09/04: CIA-RDP79T011000200490001-7
SECRET
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST OF SIGNIFICANT S/S CABLES
.25 June 1951
SECTION 2 (EASTERN)
"B" IRAN. US Embassador.Comments on Mossadec's Position. Ambassador Grady
reports that while it is impossible to look very far ahead, Prime Minister
Mossadeq is currently riding the crest of the wave and is not hesitating
to use threats of terrorism against those who oppose him. He further
states that while it is to be hoped that he will not be able to do great
damage before he falls from power, this is not certain if the Tudeh are
able to exploit the situation to bring about trouble and chaos. The
disintegration of the Anglo-Iranian Oil Company's staff is the main danger,
and there are definite indications that the Iranians wish to push out
refinery superintendent Drake. Grady fears that those in power in Tehran
are as anxious for lucrative jobs in the expropriated industry as they
will be for the proceeds from the oil production. (S, S/S Tehran 3399,
22 Jun 51), COMMENT: In view of the inadequate preparations made by the
Iranians to take over the oil industry, and their apparent disregard for
practicality it is difficult to see how severe-economic disruption can
be avoided.
12
Approved For Release 2001/09/04: CIA-RDP79T01146A000200490001-7
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