CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000300020001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 9, 2016
• Document Release Date: June 8, 2001
• Sequence Number: 1
• Content Type: REPORT

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CQPY NO ~ ~ `~~
CENTRAL 3~TELLIGENQE ~.GENCSC
OFFICE OF CURIRENT 3NTET,LIGENCE
DA,I~,Y DIGEST
Datgo '
N07'Ee ~e Th~?a ~t~nm~~ of ignifirt reports ha.~ been
prepared pr3ma,ri~r ~~~ tY~~ 3.rater~1 use of the
Of'~i~~ of Cux?ren?~ In.t?7LI~,~?n~~ o ?~ dose not
represen?~ a oarr~p~ete oc~~~~?~ge ~f ~3.7L c~axrent
repax?ts in CIS ar ita the' Qf`1?i~e o.f? C~?x?ent
Ira te~~lgen ~~ a
Ccam~enta repres?x~t the pr~z~.~miraaay vievpa of
th~r O!f~ice e~~ Crent Ta~,e~,7liger~~c~o
3e Ma.r~g3raal letter indiaa?~icrax~ a.re defined ~s
foll~~s
'~A?p ~ ~.tems ,ir~,~4~.t~g Seviet~Cornm~iat
inten~~r#a~ or ~,~lai~itieao
aaBau ~ impor`~nt reg3aen~l delognents
not ne~~saa,r~. ret~d ~c~ So~riet/
C~mt~;ist :~~n.tent~,c~a~ or ' ~~pahi~.itie~
~C?~ ?ethe~^ ~sxfc~~griatie i~diting trenel
and p??~en?~ial de~~e~~~nenta
State Dept. declassification & release instructions on file
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SECTION l ~50~'IET)
USSRa Incresasdd Prices for `Waste Msterials in Lithuanian. arad Laf~vian SSR~so
US embassy Moscow r?ports that since 15 Junes procurement agencies of t~a?
USSR Ministry of Light I~du,stry have been offering 'sharply ,ia~creased
pricesea to the public for waste materialso Ref?rence is made to a notice
published on lb June in Sovetskaya Litva whicha although riot guotigzg the
actual prig?s9 lists the following proportionate increas~so defec?~ive cloth
increased 6,7 time~g cotton wadding ~. times9 wool rags 305 ti~aes~ felt
flaw.-hemp products ~4~ times9 canvas 3 times9 mined wool rags9 ootton waste9
pelts 25 times heavy sacks 1,5 times, A similar but less detailed notice
was published in Sovetskaya Latvia on 20 June9 and both artioles remind the
publio that ferrous and non ferrous scrap9 bones and old rubber s,re also
urgently needed by the State (C Mosoow 2170q .26 June 5l)n Field Commento
The Embassy observes that it is as yet unknown whether these increases
apply to the USSR as a whole or only to the Baltic areasa It also points
out that thes? upward adjustments may actually be minor9 singe state prices
prior to 15 Jame BBoould be merely a tokeno~e If true9 this mo~~e would stim~
elate publio interest to sell items to $he State that foam?rly circulated
privately, The Embassy recalls that these new prises are the first
aclanowledged rise noted in Mosoow since 19~.9a and may evidence growing raw
material shortages at least in consumer industries, C?MMENTo Althougru this
is the first direct reference to a possible need for waste materials in
the~tJSSR? there have been several previous refer?nces to ferr~uus and non?
..ferrous metals shortages as reflected in urgent public appeals to support
the scrap metal driven
EASTERN EUROPEo BULGARIAo Ntinister of Agriculture Replacedo Radio Sofia
has announced that the Bulgarian Minister of Agriculture Titko Chernokolevg
has been replaced by Nikola Stoilov, (R FBIDa. 25 June 5l~ o ~E]MN.~I~T o `t'he
Communist Government has elevated to ministerial rank a Bulgarians who? so
far as is known has held rag`important positions in eith~~? the Party or
Governmento Stoilov was listed as a Plovdiv delegate to the National Conm
Terence of Cooperative Farmers in .April 1950? The position off' Minister of
Agriculture has apparently degenerated into a facade fo~? the recent~Ly
created Politics], Administration of the Ministry of .Agriculture ~(~/Ca Daily
Digest9 6.June 51~ which has been empowe~?ed with complete control of oo~t?
iectiv3zed agrica~I.tureo -The official anna~uncement significantly did nofi~
name the head of the new Political Administration who ms,y be a Soviet
official, The or?sted Chernokolev9 a Bulgarian Communist ~.th aao training
in the Soviet Union9 but a member of the Bulgarian Politbu~?o sincea ].9d~~g
has now apparently outlived his usefulness as a convenient scapegoat for
the mass collectivisation in Bulgaria-.during 195Ca
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eapaa CZECH?~L()~'AKIAa F'x^ench ~1ow ?pp?sed to Suspension of Czechoslovak f7verfli~ht,
In an apparent reversal of positions the French Government has instructed
its representative on tYie Civil Aeronautics Bard to renew the Uzechos~avak
overflight permit for Julye Cln X49 June the-French Foreign Office advised US
Embassy Paris that the French representative on HICOM had bean instx?aacted
not to ?ppos? any US prcape~sal to suspend Czechoslovak ovsx?flLight p?rar~ss3.one
Unspecified aadiplomatic and commsroialBe reasons ware given for the present
m?veo ~S Frankfort 165159 26 June 51~ S Paris 7~~29 20 Jane 51)0 CONa
The Mats Bepartableaxt has instructed US authorities in Germaxzy to delay
approving the Czechosla~vak application for renewal of the present overflight
pexmz.t which empires on ~O Jun?, British authorities are still studying
the q`aestion9 although they have already given a pr?].iminaa~y view that th?y
favor renewing the perm`~t? (O/CI Daily I7igest9 20 June 51~?
aaBaa Rio Lar~emScale Yugoslav Border Evacuations Continu?Q The US Legationb
in Buchax^~st reports that large scale evacuations from the Yugoslav border
area continue9 with several trainloads per day undex?.military guard. obs?rved
passing through Buchan?sto The size of the evacuation has severely tweed
Rumanian xvailra~ad facilitiese and several accidents have aeportedly c~c~:urred~
The evacuees are mainly Serbs9 erthex? n?n Rumanian nationalities and aakulaksa~d
The Legation comments that9 if this is a general evacuation movemexxt of th?
Yugoslav frontier ar?a9 it would logically be only for defexnse ?ar military
opex^atioxns~, although poss~.bly on a long term basis a The Yugoslav press
alleges that the ?vacaaees users infox?med by the Rumanian militia that tYne
evacuation was necessary to save them from impending air attacks from
Yugoslavia9 where Anglo~American tx?oops rare massed for attacks ~C
Bucharest ?~71a 22 June 519 C Bucharest `77g9 25 June 5l9 1~XTa 26 June 51~ o
C4MM~N~'o The-.fact that this border evacuation9 and similax? moves in Hungary
and Bulgaria9 have occurred after accelerated military activities isa these
areas were already well under way less?ns the probability that such evacu-
ations are px?imarily connected with immediate military pregsarationsa It is
means likely that such evacuations have been ordered at this t~.,me to cut
oft the infiltratian of Yugoslav agents and the escape ~~af defectors9
both of which activities hav? been ceansiderably facilitated by the hostile
frontiex? area ps~prxlations esf the Ce~minfcrm countx?iesm
aaCaa YUGOSLA~'IAo Application t? European Payments Ural on Awaits Ass4;zrance of
Acre. pta~ac~,a US Ambassadcar Allen advises that the Yugoslav G rveaa nment pra~~
bably will apply foxy ~sembership in the Eura~pean Pa~exyt s Union ~E~ ~ 9
pxTovided that the US indicates a willingness to facilitate its me~aber?shipo
Allen raote~ that the argument that Europ?an econtamic pra~bl?ms t x?aff~sc?nd
national boundaries9 emphasized by the Yugoslav delegate to the Geneva
EGE meetingp could be used to approach the Yu$a~slav Goverrrenta know?ver9
as nothing ha,s been heard since March l~'S1 c~ancerning Yugoslav a~emb?rship
in E~Ct9 Allen railer the possibility that the pro TrTester~n Yugoslavs were
overly optimistic regarding the speed with ~aich Yug?slav leaders could
swing they rank :and file around to m?mbership in the Weste~?n Europ?axx
or~ani~atiosuo ~S Belgrade 19779 25 June 5lao ~Oa An accel?rat?d pro?
Western orientati?~n in Yugoslavia apparently is hind?red by the influence
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of a number of relatively will-placed Ma,rxis~s who feel that official ,
ties with Western capitalism constitute a repudiation of Yugoslav sacialismm
YUGOSLAVIAo Tita Evidences Fro~American Sentimento In ~, farew?11 converm
sation with the Israeli Minister to Yugoslavia who is being transferred9
Tito reportedly refers?d to th? US in the warmest terms stating that the
US alone was the champion of liberty for the world, Contrasting US policy
with that of the USSR Tito remarked thate while Stalin was absolutely
ruthless he was clever enough not to let the USSR-take an avert aggressive
roleo Tita felt that Molotov supported Stalin8s views but that, Malenkav
heads an aggressive Soviet faction which favors war b~fare the West~~^n
world rearmed The greatest danger would arise if the Ntalenkov group wez?e
to gain ascendancy, Tita added that-the USSR could never develop sac~alism
under present Soviet policy, since successful socialism could only be based
on humanisms which he was determined t4 s~hie?m f?x? '~ugosl.s-~$,~a 14~nb8ssador
Allen Comments that the increasing Yugoslav friendliness to th? US has
been pramoted by the'US policy of rendering prompt and effective assistance
to Yugoslavia, Allen notes the special importance of continuing this policy
of winning Yugoslav confidences in order to have the new Yugoslav pro US
arie~;tatian overcome the remaining apposition in the middle and lower
ranks of the Yugoslav Government, Allen is.af the opinion theta although
Tito will find it necessary to remove additional officials in this governor
r~ent9 his position in the country as a whale has been strengthened by the
new orientation, (S Belgrade 19798 25 June ~1), COMMENT a. Tyne current pram
US campaign. being carried an in the Yugoslav Ax~iy and Party is probably
aimed at overcoming some latent resistance to the Tita Gavernme~;t?s pro-
US orientation in the organizations on wYiich Titacs suppor$, restsa 8ther
reports within recent months hav? indicated differences of opinion within
the .Yugoslav Government and Farty9 and extending even a.nto the Yugoslav
Falitbura9 regarding TitoQS growing pro Western orientation.
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SECTIC~Pt ~ (~S'TERN~
~'A~ INl~IAQ Fati~^teen I'r~da.. - heave For Visit to . USSI~b f7ra 19 J't~ a pmt ~ o. f
ndiar~ , soi~n ass ~ and. ~?i . ~sx?s ~ ~ ~ fcx^ I~.kpore { Fa1~..stan~~
Kab~ (Afghanistar~,~~: arnd ~d'os~a~~nr ~~, a fou~~~~%t st~d~ "tour' of the USSR4
Whey' ire: seem off _
Se~~et Chax^ge d II~ff~.iros arad the F~;x^s?~ ~e~retar~
(~! New ~al~a.- 37~I~ ~~ J'~ 51~_ R FBIS Far E~,stQ ~0 Jura ~~.~o, C4I~NTa Oaa
9 ~p~?i.7, ~.951~ ?~e~aty~fo~.r Ihdians x~re ~vited ?~?~ v,~.sit ?~h~ gee 4~I
~Iy ~ige~t~ 9 and 26 Apr 51a) B~ca~.s~; o?rtain ind~..du.~ xBefused the
,.nnv3:tatioa~s and othdrs ~ex^e prever9.ted, bar the C~verxea~t f.~:affi 1~a~aag the
oowrat.~y~, the So?~?ts ~aC?e f?i?d~d ~ to appx^?aoh ~ ~eba~? 9f per~~a~ ~ot~ ~s~,
the~? origiraa~, 7Listb the group of 1;1~. ,u~.~.oh has fib ,
is ooi~.po~~ad. primari~.,y a3.1Y dep~?~~d for the USSR
of ixsditr3.d~.~.s about ~ho~. Ia~tlle or a~~thg is 1C~&o~,
Fx?esuartab3.y~ most aac?e Cosntna~i~ts or fe1,7.~svr `~x?avel.ldrs in ~uho~, the ~ndia~t
~verr~raerat hay 1i~~tle inte~^est mad mho ha~re been. invited bar the So~ets
znal?~,y tc~ px?everat the a~zoh~pubI.icized. trip :~?r~~ being a total, failu`~'?e?
'~~~ AF'GHANo Soviet~,~$.f? hasp. T'r~td,~ P~,ot ? ~'~,i]L~s in its ~7fil~m,~nto ~ US F~.bas~
s3-' aun. Kab~; x?eparts h~.t of 3~ ~~ g ox~s..6f ga~o a tea.
pposed. to be
c~.i.sp~;tcYi~d by the U sSR ?~o ;~f'gh.st~, `b~fox?p ~C~ ~~ 1.9;~I d~~? ?~hs t~,a~
~f the Sdviet,'~iah, farads pact ?f' 195~~ on~,y 8E34~, g~~,,a?~s mere actual
de7.ivered by 1 Juste a (~ Kabax3. 125~,~~ 22 J' 51~ s GC311~1V~?; The exohge
~f other? commodities has a~.,so l,aggede It is belies b
the cu$?re~at ~gha~S?iv3,st pant dffic~i~;1,~ ex:pix^es9, neither ~ootu~ta~?~
~. ha.~'fnl.fill.ed its c?~exats under th,e tpx~as of the p~~t~ the So~,ets
ps?ssumably~ because of hea,~* a`iiadiger~,cu~ .d Chinese demds for the~,x? ~aso~
Line and the A.f'ghan C~avers~aent beca~ise of the difficulties `~rf a;cqu.3rin,g ~.d.
aseeffiblia~g .the a~t?esd o?~odities fear shi
_to the USA, Nsither oo.tr~
appeax?s to have maci~ spe~.~ efforts to ~.rBgratiate itself ~t~a tho o?~ner~, "
acid s~o attempt to ex~egsd -the life of the p~?~t ~~ t?~ negotiate a hem one .fox?
195152 had `~beeaa absea?vedp Aoo?x?d:bsx
resu]:t in e~arnos~c and political.~ora.ez~..t~,ti ~lof ,~ ,stars tasx~x^dotheoUS R
sett to have been `anfoundeda
I~~d F~aod Su :lies ~?o~`-the ~~st ~bi~ ,
~ S'SR repci~^te y made ci ers . -au g ?~he spxng of ~,95~~,
faodgraiass tc ease the ~ latter ~~ c pp ~ n ~, ~.th ~ szp to 5C7C9~ toms ~f
td a UP press di at~h ant food c~?3:sis~ ?an 22 Jul, a~e^ord
sP ~ ~,dia, mod' the USSR sighdd ~. bax?ter ag~e~t ~
.oh .ttie USSR .~, pat?~i~de 10~~0~ toms of ~ ~~?~ ~~hange fer va~rio~ns
~c~ai~"ooc~ties believed to ia:3c].tide teas, tobao~o~ ~~.te ~mt~fact~.x?es~, a~ad
shel].~d~ S~at?city of av]:able f,~d~~ ,~;~,,~~a.a ~.a.~.
taaas ~ ~U NX" ~Ie~^a~,dl~i~ n2~t ~~~n~S~C ~ e~ C~~3'b ~e ado ~ ags?e~;d, ~,~~
re~ax?diig l~~ ~~cans of meat is b~7~r.~4rp??~`;~~~~..~_ ~? ~A~~et agr?~m.t
w~._ ~ _-
~~~. ~,~.~ ~.~ ~~: ~a ay ~n:Q.s ~a~ca the USA d Cka;~.aea h~~e _._
p~?abably thieved the ~ propaganda. effect f~?offi their- r~e~a~ offs aaf
food to Indian S~sce passage of the US fmodmto?T.ndi;a bi~..1.g .I;nclia dose riot
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reliably reported to have gone so far as to request the Commissioner of the
Rangoon Police to arrest several, anti-Communist Chinese on charges of murder
and offered to pay the "expenses80 involved. US Embassy Rangoon states that
the Burmese press is already calling upon the Government to regulate ac-
tivities in the Chinese commun4ty, and believes that further barefaced inter-
fer?ence in Burmese affairs by Communist diplomats may restdt in just such
action. (S Rangoon 942, 22 Jupe 5l). OMB s Any Burmese effort to place
roetraints upon Communist activities among the Chinese will be undertaken
only with great caution and vwi h due consideration far Peiping's reaction.
"BOO MALAY. Chinese Coman nisi Extortion Rex ;rted r Sia a c r o The Chinese
_om press in'l ,ingaapore reports that 5 members of ths local Foochow (Swatow)
communityv received extortionate demands from Communist China totalling
at least ten million Hong Kong dollars. The demands have been accompanied
with threats of reprisals against "near and distant relatives in China and
the confiscation of property. .At the same time growing anti-Conumthist sere
titnent among the Chinese is evidenced the formation of a P?Singapore Over-
Seas Chinese Anti-Communist Res t Russia Comnttteeo" This orgarisaation,
the first ove anti4Peipinng group to be formed among the Singapore Chineses
intends to support the Government in its anti-Communist struggle and is
planning an independent propaganda campaign. The US Consulate General Si ga
pore believes that this organization can perf a valuable functiong but
doubts that it will become a rallying point fcr large numbers of Chinese,
most of whom are unwilling openly to e ibit anti offi et feelinngsd (USARML09
Singapore, 23O21OZ. June 5l) . Cis The extortion technique described
in this report appears to be identical to that us ed by Chinese Communist
agents in Saigon* (See 0/CI Daily Digest, 25 June 51). Inccreasi,ng., but
as yeast ineffectual,, anti-Communist tendencies among overseas Chinese have
been noted elsewhere in Southeast .Asia.
"Bas ADji_-G2mAWjj& Camuaignn Ma iJn der "w l a, d On 15 June, Director
of Operations Sir Harold Briggs broadcast new emergency regulations aimed
at starving the Communist bandits by rigidly controlling the movement of
food throughout Malaya.. Simultaneously,, an all out military campaign was
launched to clear the state of Johore with a maximum air effort and the
commitment of every available man from headquarters bases and training
centers. tJSARMLO comments that unless satisfactory gains are achieved by
these actions in the near future. substantial changes in method and possibly
a shakeup of the high command are to be anticipated. (USARMLC Singapore,
23091OZ9 Jesse 5 1.). O NT s British f arose have been registea1,ing steadyf,
though unspectacular gains, in terms of casualties inflicted against the
Communist bandits during the past few months. but there are no indications
that they -are about to crush the Communist uprising.. The British have con-
stantly reviewed and wised their tactics in dealing with the Communists
and no doubt will coh sue to do so. The prediction of a possible shakeup
in command cannot be assessed on the basis of available inf maatiorn,
"C" 0NESIAo tr a ~e~atened in Suanatr The Medan branch of SOBSI.
Communist-led labor . f ederation9 has instructed affiliated unions in East
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Sumatra to demand . month's free pay and a gift of free d.oth from their
employers in recognition of a Mohammedan holiday which falls on 5 and 6
July. If employers refuse but are considered financially able to meat the
demmands the unions ll strike o gm i ndivi coal basis late in June,
~5X1A $ Cis During the past week,, the
Government has been faced with an increasing number of strikes,, some of
undoubtedly have been encouraged by the Government?s own statements that
the strike ban is undesirable and will soon be changed and by Labor Minister
T
?
ea
a obvious hesitation to enforce it,
"Beg zoo Minh Attack SSn French in Tonkin ill' Threatens, Viet
Minh forces are continuing to build up in the area opposite the southeast
25X1 C
angle of French defenses in Tonkin,
di
t
re
c
s
that these tro will attack in the near future. 25X1A
25X1A COMMENT-0 The French are aware o is threat, and are
9
n ably prepare to -ravwlleq~ i
f
success
u
"Ao? CHINAa CCP Jou al Endorses Malik? S h Imes No Comte c ais~o
The Chinese Communist Party journals Pe SOS (the Chinese equivalent
of avd )9 in the cone of a long-editorial reviewing the Co st
version of the Korean conflict and deriding US military capabilities,,
states that the "Chinese people fully endorse" Malik?s suggestion that a
cease fire be arranged. However,, the editoorial, asserts that., if the US
"is willing to stop the wore she should therefore fall in at once with
the just and reasonable measures for peaceful s e ttl ement.0 0repeatedly
yebposed" by the PeipInng regime (R FBIS9 26 June 53.). CO .- The
editorial does not explicitly reaffirm Peiping?s earlier terms for "peace-
ful settlement" Go withdrawal of UN forces from Korea,, admission of Communist
China to the UN9 and US abandonment of Taiwan0 The references however,, to
earlier proposals implies that Peiping?s unacceptable terms will again be
brought forward after a cease-fire is achieved,, a pattern made familiar
in Communist-NationtUlat relations during the Chinese civil., ware The
P6 ping regime appears prepared politic als9 economically and m .,itarily
to continnt its commitment in Korea indefinites,
"Ctrs o h Commst Ut Conte ted i Ko a
the capture of 8 ~- Far East Command reports
prisoners from the Chinese Communist 47th Army in the
Chorwaa area, Elements of this army,, part of the Fourth Field Army,, were
identified in South China as late as January, 1551. Chinese Nationalist
Intelligence reported the 47th moved to Manchuria in April, FEC notes
that this groom contact tes . to support the w~merous agent and PW
reports toga di .tg the commitment of fresh Fourtk yield Army units to
replace those ,t13. >of--the awe Field Amy which were returned to China
or were wit hdrmw ft mm fbrwaxd areas far rotation or rehabilitation. (S
FECOM Telecon 488. 27 June 51).
~ " d S tuet on in N~? i A prisoner of war interrogation team,,
in pass g nalong impre ss ion o n conditions in North Korea i ned from
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recently taken prisoners,, states that the food shortage has become so acute
that the Chinese CoMmur, is is stopped requisitioning food supplies about the
and of April. Some starvation exists among the civilians near the east
central front line area. Farm production is low with less than one-fifth
of the fields near the fighting zone under cultivation, although in the
rear areas most of the land is plantede Labor and fertilizer shortages
are responsible for the reduced yields. The food shortage is being blamed
on the Chinese Communist troops and is causing growing animosity between
the Chinese troops and the Korean civilians and troopso (S Pusan 10879
25 axe 51). C: NT o This is the first information received that the
Chinese forces no longer requisition supplies. Otherwise,,, the agricul-
tural outlook gs presented,, is generally borne out by other sources as
are the comments on Sino-Korean friction.
AmA??~rro~ Eh Creak North Ed reae Radio Pyongyang on both 23 and
25 June made references to smallpox in Kangwon Province on the east coast
immediately north of the 38th Parallel. Health workers are credited *ith
giving' 1d to more than 300,9000 persons,, advice to more than 809000 and
4,023 patients were cured bf smallpox caused by the Americans." (R FBIS
26 June 51). COKMENT a While the worst outbreak is in Kangwon Province,
smallpox is apparently widespread since epidemic teams are also reported
in North Pyongan and Kanggye Provinces along the Manchurian border. Reuter
reports a broadcast referring to over 40,,0O0 cases in the northeast coast
area.
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SECTION 3 (WESTERN)
f'Bt? ITALY, Resurgence of Neo-Fascism. Increasing pressure on the neo Fascist
IIta an Mial Movement- N-SI o assume an intransigently anti U'S position
is reportedly being exerted by its terroristic para-military organization.,
the Fasces of Revolutionary Action (FAR). The FAR., composed largely of
die-hard ex-militiamen of Mussolini!s Salo Republic, is extremely national-
istic, is opposed to both the Christian Democrats and the Communists, and
seeks to overthrow democratic institutions in Italy by every possible means,
It has connections with'Fascist groups in other countries and maintains-
particularly close ties with Franco Spain, Many b5 I leaders are members
of.the FAR. The MSI has received financial aid from even right-wing
members of the Christian Democratic Party. It is making considerable head-
way in gaining popular support and offers a particularly strong a e
Italian youth,
25X1A The MSI has been gradually gaining strength
since the l918 nation eections--a trend confirmed by the recent local
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elections, Although riot yet considered by `official observers as a
force to be reckoned with. (it has so far maiptained a Pro -US position on
many international issues), it will undoubtedly continue to attract sup-
port from those natior}alist minded groups who are dissatisfied with the
present Government's policy and yet oppose Communism. If, as is antici-
pated, the Government accelerates its agrarian reform program, influential
land-owner elements will tend to give the MSI increasing financial support
and, in many instances, to join the party. ,
r'C" VATICAN. Poe Believes War Inevitable. In reply to, and in implied ap-
prove of, e s rung anti-d,omm nis a atements of the newly accredited
British Minister., the'. Pope appeared pessimistic regarding possibilities
for preserving peace in our time, He indicated that the chasm between
East and West was becoming much deeper with jime.and that the establishment
of peace seems a forlorn hope. In-.a veiled reference to the breaking up
of the Paris conference of deputy Foreign Ministers., he recalled his ef-
forts to bring about a true and sound, understanding among nations, but
remarked that that objective "seems to recede farther and farther away."
(U NY Times, 2) . June 51) COM TNT It is possible that in the face of
world- persecution of .e.C urch by Communists and the persistence of
strong Communist currents in Western,Europe9 the Pope now believes that
war is the only thing that will preserve the Church's strength in Europe
and Asia.
"Cr' Policy Toward Palestine to Be Revised8 Cardinal Tisserant, who
as secretary o Ho y C ongrega ion or e Orient al Church has the
greatest responsibility for the Holy See policy in that zone., realizes
that the Vatican's Palestinian policy must be revised, High personalities
in the Church realize its insistence upon the internationalization of holy
places has resulted in the formation of a united front,between Israelites
and Arabs on this issue, Cardinal, Tisserant has beer authorized to study
the entire problem with a view to early revision holy places in Palestine. y toward
COMMENT: The Pope indic at .s 0 25X1A
for the internationalization of holy a revision of the Church's
Y places in Palestine 'might-be
possible.,. -while Monsignor Tardini, acting Secretary of State and a
conservative, is believed to have opposed any change in the Vatican's
policy? There is no Arab-Israeli "front" on this issue. The general
'impression is that the Arabs have on the whole approved the Vatican's
position regarding Palestine in genera1?a
ing Rapprochement with the Church,
v~r W~ V.Ll Viiu augme ana 4 ile Church,,
Martin Artajo.and other prominent Catholics are reported responsible,'
The Spanish Church reportedly ordered a cessation of criticism of the
government after a conference between Franco and Primate Pia, y!Deniel in
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early June, The reconciliation move was reportedly championed by the
B$shbp of Madrid and supported by the Bishop of Malaga (an outs oken
critic of the regime). Earlier the Vatican is reported, 25X1C
to have held long conversations with a Spanish
representative concerning the cancellation of the freedom frcm"eensorship
previously enjoyed by the Catholic publication TU. Meanwhile, it appears
that the Vatican directive to the Spanish clergy on social conditions did
not, as reported earlierostrongly condemn the regimes 25X1A
S Madrid Desp. 1375., 18 May 51)
ec g- supporters of the regime, No open break between Franco and the
Church has occurred and steps are apparently being taken to prevent policy
difforenees from leading to a crisis, If the report is true, it would ap-
pear that Franco has made some concessions to Church pressures and that
the Catholic Action-Monarchist group may be regaining influence in the
Government at the expense cif` the Falange, The Vatican, although desirous
of improving the welfare of the people, does not want a precipitate change
UNITED KINGDOM. British Continue Pre aratinns for Protect on o ` a.h
Evacuation of their Nationals rom Iran, oreign acre ary ere or-
has been-ordered to the vicinity of Abadan from ' omewhere in the Persian
Gulf. London circles reported that the UK Government has decided on the
early withdrawal of British personnel under cover of troop protection if
necessary, The Cairo press reported that-UK troops are expected soon to
leave for Basra, Iraq? (U NY Times 27 June 51) COM ENT: These reports
indicate further steps in the implementation of-Bra is pans already.
announced, A cruiser has been in the Persian Gulf since March,"to remain
for the duration of the emergency. Troops sent from the Canal Zone to
Basra, near Shaiba airfield,, would be in accordance with War Office plans
(see OCI Daily Digest,, 23 June 51), The British Government is under
pressure from Conservative members for firmer action, while Labor members
are more fearful of the implications of a show of strength, Although the
British are;..fol.lowing a prepared plan in the Iranian crisis, it is evident
that each step is taken reluctantly, and only when there appears no
alternative,
Support far Early German Rearmament Seen,:. The head of
the Foreign Office Qs German political dap men . has o served that, as
a result of the breakdown of the Deputiesg talks in Paris, 1) the Western
powers should press for German rearmament, 2) that the 3ritish Joint
Chiefs of Staff are of the same view, and 3), that Foreign Secretary
Morrison is "sold" on the need for an early German contribution to Western
defenses (S London 6782, 23 June 51) COMMENTS Previous indications had
been that responsible British officials f?.~ '~no great urgency in the need
for German rearmament, despite the Government's agreement in September 1950
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 to ;a German contribution to Western Det'ense, The British counseled
caution especially, during thh;many months when consideration of the
subject at a possible Foreign Ministers' conference seemed likely.
Another retarding factor has been the considerable public opposition
to German rearmament, especially in Labor circles. (See OCI Daily
Digest, 12 Mar 5~.a) Recently, however, the failure. of any serious
foreign policy rift to develop in-'the Labor Party as a consequence of
Aneurin Bevan's cabinet resignation, and the'apathetic public reaction
to the termination of the Deputies' meetings may have instilled some new
confidence into Government leaders.!-,who have regularly been ahead of public
opinion on the German question,
NICO. Student,,Rot, On. 23 June, students from various schools and the
nU i sity off`-Mexico engaged in a five hour street battle which resulted
in injuries to 150 participants and damage estimated at US $58,000. An
attempt to burn the doors of the Vocational School failed, but great
damage was done with rocks to the School of Dentistry and valuable equip-
ment was destroyed. Ambulances were attacked, and the police-badly out-
numbered--failedrto intervene. The riot.was terminated only after the
students of the Military College threatened to take part. At.first,'the
battle was reported as arising out of a university initiation; later.,
however, a press report stated that the police regard the riot as a "pre-
med3,tAted act of Communist agitators". (R Mexico City 1657, 25 June 51)
COMMENT: The battle illustrates the extent to hich the normal student
po en al for riotous behavior may be released on a holiday. It is unlikely
that the riot occurred or spread as a, result of "premeditated Communist
agitation'.'. However,. it serves',as a reminder that unpremeditated riots may
occur in Latiin America which could conceivably affect US interests.
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CENTRAL INTELLIGENCE AGENCY
DAILY DIGEST SUPPLEMENT
JUN 27 1951
Not for dissemination outside 0/CI and 0/NE.
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 Approved For ReF to 2001/09/04: CIA-RDP79T01146AO 00020001-7
SECRET
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DAILY DIGEST OF SIGNIFICANT S/S CABLES
27 !7une 11
SECTION 2 (EASTERN)
"B" AN. AIOC t s Position in Iran Deteriorating Rapidly, The "US Embassy In
London has been informed by the UK Foreign Office that as a result of
the Iranian oil commission1s letter to Abadan Refinery Manager Drake,
accusing him of sabotage Drake was flown out of Iran on 25 June. The
Foreign Office is perturbed over this news and fears it will have grave
repercussions on other Anglo-Iranian Oil Company (AIOC) personnel who
will feel if the situation is sufficiently serious to necessitate hi
departure, they should leave as well. Over the weekend the British
Manager of the small AIOC installation at Kermanshah (western-central
Iran) was notified that he was no longer in authority "because of nonce
cooperation", (S, S/S London 25 Jun 51. C, S/S Tehran, 25 Jun 51.)
CQTT; UK Foreign Secretary Morrison told Parliament on. 26 June that
all tankers have been instructed to leave immmediately, if necessary, after
unloading any oil they have taken aboard. Meanwhile, he also announced
that the British cruiser "Mauritius" had been ordered to proceed immediately
to the Abadan area., Although the UK is probably not surprised by the rapid
deterioration of AIOCss position,it is now planning on a day-to-day basis.
Drake's departure, and the order recalling all tankers are direct results
of two Iranian moves: (1) the announcement that the law was diortly to be
enacted under which any person accused of sabotaging oil production was
liable to trial by a military court and (2) the refusal by tls Iranians
to permit any loaded oil tankers to leave without a receipt signed by the
ship's master in effect acknowledging Iranian owniershIp of the oil trans-
ported. Although Moasadeq has invited the AIOC staff to stay, the condI--
tions under which they would operate, and the general attitude of the
Iranians,, make it virtually certain that a mass exodus will take place In
the next few days. The result of this will be-. (1) unemployment of approxi-
mately aO,OcQ Ira ian ,ci:l, k:ers, (2) a cut of approximately /. in govern-
ment revenues formerly derived from oil royalties---these payments were sus-
pended on 30 April (3) suspension of virtually all oil exports from Iran
due to Iranian lack of tanker shipping and a (4) complete shutdown of the
refinery due to Iranian inability to manage and, run such a complex
installation,,
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"B" Iranian Official Declares Attempt by AIOC Staff to Depart in Group Would
Be Tantamount to Sabotage. The US Embassy in Tehran reports that Daftaryq
a member of the Provisional Administrative Council, made a public statement
on 25 June to the effect that any attempt of the British staff of the Anglo-
Iranian Oil Company (AIOC) to depart in a group would be tantamount to
sabotage, and that the anti-sabotage law will probably be passed 30 June
as a matter of special urgency. Meanwhile, the position of Drake, Abadan
refinery manager is still unclear. The decision has been referred. to
London as to whether Drake's sudden departure for Iraq should be explained
as an official trip, and that he will return,, or whether he should be in-
structed to return to Khorramshahr without the issuance of an official
statement. (s, S/S Tehran 34.40, 26 Jun 51). CONMENT; D of tart'' s inflarm a.~
tort' statement is in keeping with the current mood of Iranian officials,
however, it throws some suspicion on the sincerity of previous official
statements that the AIOC personnel were free to leave Iran., though were re-
quested not to do so en masse. Drake?s return to Iran in the present circu
stances would probably not long encourage willingness among British AIOC
personnel to face further incidents arising out of the aritii=sabotage law.
"B" ISRAEL/SYRIA Situation Deteriorating in Huleh Dexniiitariz d Zone. After
consultations with General Riley, Chief of Staff of the UN 'Truce Supervision
Organization (TSO), the US Embassy in Tel Aviv reports that unless effective
action is taken promptly in the dispute over the Lake Huleh region serious
consequences are likely to result, The Embassy feels that it is clear that
no agreement for the continuation of the drainage project on Arab land will
be reached because the landowners do not want to subject themselves to Arab
displeasure,. Work on the Jewish-owned land will be completed in a few
days, and the Embassy believes that Israel will then appeal the case to
the Security Council, However, Israel has no intentions of allof4mg the
drainage project to be halted; and if a UN decision were delayed., it would
take direct action, which would undoubtedly be countered by Syria. Difficul-
ties have arisen during the interviewing of the Arabs evacuated from the
Huleh region; UN representatives felt the refugees' reactions were condition-
ed by fear of Israeli pressure on one side and Arab displeasure on the other.
Certain problems will arise in repatriating those 750 who wish to return be-
cause many of the villages have been destroyed, The Embassy estimates
that Israel by indirect means will attempt to resist their return. The
Em-
bassy anticipates that Israel will refuse to remove their police, which are
in control of virtually the entire area., and return the area to civilian
administration, (S, S/S Tel Aviv 906, 22 Jun 51). QM[!.[lt o Until some
territorial settlement in this area is arranged, outbreaks of violence are
possible at any time. Syria is determined to retain control over at least
a portion of the demilitarized zone, while Israel wants control of the en-
tire area because it lies within the former Mandate borders,
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