DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000300330001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: May 11, 2009
• Sequence Number: 1
• Publication Date: August 6, 1951
• Content Type: SUMMARY

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6. August 19 51
CIA No. 49294
Copy No.
DAILY DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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. Comments represent the
immediate views of the Office of Current Intelligence.
ARMY, DOS, JCS and
PACOM review(s)
completed.
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SECTION 1 (SOVIET)
1. USSR. Soviet propaganda advocates freer trade: An editorial in the
second issue of News entitled "A Step in the Right Direction" considers
the questions of raising living standards and improving economic rela-
tions under peaceful conditions as vital immediate problems. These ob-
jectives would contribute to a partial elimination of ?!the monstrous
injustices and incongruities of the present economic structure in many
countries." The editorial indicates that this is a problem affecting
the non-Communist sphere only, although "vitilization" of East-West
trade is conceived of as being a useful way of achieving improvement in
all countries. An international economic conference to be held in
Moscow is envisaged as a means of dealing with problems concerning
living standards, economic questions, business and trade. Scientistso
engineers, industrialists, businessmen, economists, trade unionists are
urged to assemble not for political argument or to impose their indi-
vidual social or political views, but to discuss economic developments
in their own countries and devise practical measures to ameliorate de-
pressed living standards wherever they occur.
Comment: Embassy Moscow points out that the apparent sin-
ce'rity of the appeal to freer trade and a rise in living standards
through an international conference is negated by Soviet trade practices
and Soviet behavior at international conferences. The Embassy also
feels that-.this editorial is disarming in its insistence that radical
solutions are not envisaged, even though it clearly implies that em-
phasis will be chiefly on conditions prevailing outside the Soviet bloc.
mme t: Soviet emphasis of this propaganda line is one of the
new variations of the "peace" tactics designed to capitalize on the
economic effects and popular discontents caused by Western, particularly
US, rearmament and export control policies. The USSR utilized the June
meetings of the UN Economic Commission for Europe for similar propaganda
and will attend on August 20 UN meeting on improving East-West trade,
which it may well exploit in similar fashion.
2, EASTERN'E UROPE.
ALBANIA. Resistance remains passive in Albania:
although
e majority o the population and army is against the Hoxha regime, the
people do not realize their own strength and await foreign intervention
to achieve the overthrow of the government. The few small nationalist
bands who engage in resistance actin fear exposure by uniting in the
common cause. however, there is a "well sup-
plied, largely nationalist army" passively awaiting the moment for ac-
tion. Although Titoism is hated, it is followed by some for want of
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better leadership. the National Committee for
Free Albania is the most highly rganization,
Comment: The Hoxha regime has intimidated the population'com-
pletely by countering resistance with harsh terrorist measures. The
Tito Government has achieved favor among dissident Albanian nationals
in both Albania and Yugoslavia by using propaganda effectively, sup-
-plying small arms to the resistance bands, and forming an'*lbanian ex-
ile committee to counter, the pro-Western activity of the Committee for
Free Albania. The existence of a "well-supplied" anti-Communist army
in Albania is considered highly unlikely.
3.
YUGOSLAVIA. Government exerts pressure to check peasant withdrawal from
cooperatives; US Embassy Belgrade reports that repressive measures are
being employed by Yugoslav authorities on a local level to check the
withdrawal of peasants from cooperatives. Peasants applying for with-
drawal are being threatened with exorbitant taxes and offered poor
Marginal lands in place of the land which the applicants originally con-
tributed. By these measures as well as by recent legislation designed
to make cooperative farming more attractive, the Yugoslav Government
intends to check the growing movement amo,g peasants to leave the co-
operatives.
Comment: Yugoslav leaders, including Tito, have recently served
notice that the government has no intention of abandoning the coopera-
tive movement. Although the regime has adopted several reforms which
constitute a compromise with Communist principles, the government ap-
parently considers that the socialization of agriculture is so basic
to a Communist state that the gains made in this direction cannot be
,sacrificed. Passive acceptance by the regime of the breaknpodf co-
operatives would be difficult to explain to the already restive ortho-
dox Party members. It would also seriously damage Yugoslavia's cal-
culated international position as an independent socialist state and
serve to justify Soviet charges that the regime had foresaken Social-
ism.
4. Tito orders officials to turn over military data to USt Marshal
Tito has instructed Yugoslav officials to cooperate t1to a reasonable and
feasible extent" in supplying detailed data on the Yugoslav armed forces
requested by ECA. This authorization was made following US Embassy as-
suranceB that the information requested was primarily for economic
planning purposes and in particular to show the impact of the Yugoslav
defense effort on the general economy.
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1W NOW
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SECTION 2 (EASTERN
ISRAEL. Moderate Leftist coalition is possible election outcome: Incomplete
returns from the 31 July general elections give Prime Minister Ben-Gurion's
Mapai Labor Party 45 seats in the new Knesset (Parliament). He is expected
to form a coalition government with four compatible, smaller parties-Hapoel
Hamizrachi, the Arab parties, Agudat Israel Workers, and the Progressives--
which would control 64 of the 120 Parliamentary seats. The returns give
the other major parties the following number of seats: General Zionists, 20;
the ro-Soviet Ma am 1 ? the ultra-nationalist Herut, 8; and the Communists,
5.
2, Iran: .._.Iraniar,Govetnment,inereasingiyiconcerned b r Public order: The Tehran Vik
police announced on 3 August that no permits for public meetings would be
granted until further notice. Fearing a recurrence of disorder, Parliament's
lower house on 2 August cancelled its annual Constitution Day 'on, us-
ually held on the Parliamentary grounds. 25X1
Comment: Both the Communists and the extremist, nationalists have warned
the Prime Minister that they will not tolerate any deviation from the oil
nationalization laws. The Prime Minister, as well as other government officials,
are showing an increasing awareness of the dangers posed by mob action and
terrorist assassination. The government's action suggests that it is aware
that any compromise settlement of the oil dispute increases the possibility of
violence.
INDIA. Labor's role in the national elections:. The Indian National Trade
Union Congress (INTUC) on 29 July committed its 1,500,000 members to vote
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unconditionally for the Congress Party in the forthcoming national elections
in spite of vigorous opposition from West Bengal INTUC leaders Deven Sen and
Suresh Chandra Banerjee. The expected resignation of these two men from
INTUC may lead to a coalition of their West Bengal unions with the freer ele-
ments in the Hind Mazdoor Sa.hha_ 25X1
Comment: INTUC was founded at the behest of the Indian government to
oppose the Communist-dominated All-India Trade Union Congress (AITUC), which
now has a membership of about 700,000. The Hind Mazdoor Sabha, whose great-
est strength is in the Bombay area, is financed and run by the Socialist
Party of India and has a reported membership of approximately 686,000.
A coalition of Hind Mazdoor Sabha elements and INTUC's West Bengal unions,
which represent a third of its total membership, could very nearly equalize
the strengths of Congress Party, Socialist, and Communist factions in Indian
labor. 300,000 additional members of the All-India Railwaymen's Federation,
the largest independent trade union federation in India, are also currently
in conflict with the Congress-dominated government. It therefore appears
that the Congress Party may not attract more than a third of India's vote in
the forthcoming national elections.
India and Burma. ma .n.ot sign the Japanese
peace treat : Within the last
week, both the Indian High Commissioner in London and an influential member
of the Burnese Foreign Affairs Advisory Committee, who accompanied the Bur-
mese Foreign Minister on a recent trip to India, have expressed the opinion
that India and Burma would not sign the multilateral Japanese peace treaty.
The Indian official has suggested the possibility that India might sign a
a
b
t
sep
ra
e
ilateral treaty. The India~ss has supported this view.
Comment: Prior to the end of July, all indications were that India
would sign the multilateral Japanese peace treaty after commenting for the
record on subjects such as the removal of foreign troops from Japan and the
return of Formosa to Communist China. Indian opinion then apparently began
to shift toward refusal to sign the treaty. This shift may have resulted
from India's success in demonstrating its capabilities for independent action
vis-a-vis Pakistan and the UN in Kashmir. It may also be a manifestation of
the need of the Congress-Party-dominated government to take the public's mind
off serious pre-election weaknesses within the party by displaying once more
the government's independence and prestige as a "third force" in world affairs.
Despite its recent protestations, Burma has never seriously expected to
receive reparations from Japan. It has seized upon this issue to avoid in-
dicating its real reasons for rejecting the multilateral--fear of Communist
Chinese reaction. Burma has not indicated an intention to sign a separate
treaty with Japan, but it is strongly influenced, by India in making important
diplomatic decisions.
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5? THAILAND. New indication of anti-Communist sentiment among Chinese noted: On
29 July a normally pro-Communist Chinese newspaper in Bangkok publishes a story
about a local Chinese who committed suicide because his lands in China, ob-
tained by his own "hard labor," had been confiscated and his family executed
by the Communists. The US Embassy in Bangkok comments that this is the first
time that a news item depicting the harsh effect of Communist policies upon
overseas Chinese has been published in any Chinese paper in Bangkok other than
those which are outright pro-MT publications. 25X1
6. Police and Army chiefs reported working to undermine Premier: US Embassy,
Bangkok, transmits reports that General Phao, Director of olice, and General
Phin, Army C-in-C, while ostensibly supporting Premier Phibun are cooperating
to bring about his ultimate downfallo Tension is also reported between Phao
and the Deputy C-in-C of the army, who commands the First Army, with Phao de-
siring to deprive him of his troop command. The position of the Air Force
commander in this jockeying for power is not clear.
The Embassy comments that the clear inability of the military commanders
to work together is a factor working to the long-run advantage of Phibun.
Comment; Cooperation among the four military commanders cited was res-
ponsible for the failure of the attempted coup d'etat in June 1951. Phibun's
authority suffered at the time and his success in recovering it depends upon
the maintenance of a careful balance among the generals. The forces at the
disposal of Phin and Phao are sufficient to enable them, if they cooperate,
to determine Phibun's fate.
CHINA. Movement of Communist 2nd Field Army elements to Yunnan reported by
Nationalists: Elements of four Chinese Communist armies are moving toward
Yunnan province, according to a report from the Chinese Nationalist Ministry
of National Defense. The armies are identified as the 13th, 14th, 15th and
16th, with a total strength of 100,000 men. The numbers involved in this
movement are unknown.
Comment: The reported movement of these units, ascribable perhaps to
a Chinese Nationalist desire to create a face-saving explanation for the
possible failure of Li Mils Burma-based "invasion" of Yunnan, has received
no substantiation. To the contrary are the fairly reliable indications
that the Chinese Communist forces (principally 14th Army troops) now de-
ployed in the general area under attack have more than adequately contained
and rendered ineffective the Nationalist forces committed. While the move-
ment of additional troops into this area is not precluded, the figure of
100,000 Is believed improbable.
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The 2nd Field Army has long been charged with the responsibility for
Yunnan and has maintained garrisons of the 13th and 14th armies for this
purpose within the province, a major part of
the 13th may now be in the Nanning area of Kwangsi. Two divisions of the
15th Army have been identified in Korea, while the 16th has been carried
in the Kweiohow-Kwangsi region,
Chinese students dissatisfied with Communist Policy: An editorial in
the People's Daily, official party organ of the Chinese Communists, admonishes
students that they should accept without question the jobs assigned to them
by the government. The US Consul General in Hong Kong observes that the
newly-adopted state policy of allocating students to jobs has met with some
disapproval.
Comment: Dissatisfaction among students in Communist China with the
recently established government policy of assigning them to jobs is
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indicated by recent reports. In early July the Communist press revealed
that a "very small number" of students attempted to obtain employment
directly but were later "won around" to take jobs assigned by the state.
10. Petroleum being smuggled from Macao to China::. An investigation of
smuggling from Macao has convinced the US Consul General in Hong Kong that
the Portuguese colony is an important source of petroleum products for Communist
China. An investigator from the Consulate General found excess petroleum
stocks in Macao totalling some 7,500 drums; he personally observed a cargo
of petroleum manifested for the mainland, and was told that a large syndicate
had been formed to ship petroleum from Hong Kong to the Communist mainland,
both directly and via Macao. Chinese employees of the major British and US
oil companies in Hong Kong reportedly are participating in the syndicate's
operations. The assurances of Macao officials that only negligible quantities
of petroleum were reaching the Communists via the colony are labeled by the
Consul General as glaring misrepresentations.
Comment: With Macao officials--particularly Director of Economics
P. J. Lobo--involved in the smuggling traffic, the Portuguese colony serves
the Chinese as a secure base of operations. Fishing junks from Hong Kong and
Okinawa, vessels loaded with excess bunkers at Hong Kong and other ports, and
the addition of extra drums to legitimate shipments from Hong Kong appear to
be the principal supply sources for Macao smugglers. Macao's current pros-
perity is clearly attributable to its trade with Communist China, and little
effective cooperation can be expected from the colony's authorities in curbing
this traffic. 25X1
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12. Trouble in Sik'angreported: Recent arrivals from Siklang report
"unsettled conditions" in the southeastern part of that Far Western province.
Scattered minor guerrilla activity is reported around Hueili and larger
scale activity around Yenpien, and the Communists are said to have moved
10,000 troops into the Yenpien area to put down disturbances. The bru-
tality of the Communist regime reportedly has caused some disaffect' n even
among provincial government employees.
Comment: This report may be entirely true. The Communists admitted
a month ago that they had embarked upon a policy of "out-and-out suppression"
of dissident and "counter-revolutionary" elements in Siksang, and US Army
G-2 estimated then that about 5,000 anti-Communist guerrillas were still
active in the province. However, the Peiping regime can easily spare the
troops required for putting down any large-scale rebellion in this thinly-
populated and primitive area.
14. KOREA. Offensive preparations noted in Korea th 1 ?g Last 24 hours: -~.v. According
to a 4 August report from the US Far East Command; indications that the
Communists may resume the offensive on the UN western flank have been noted
in the past 24 hours. Enemy forces in this area have suddenly tightened
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their counter-reconnaissance screen. They may also have moved armor into t
Otan area 25 miles northeast of Kaeson he
tank tracks and noted the filling-in of3anti-tankrditches~rvers have sighted
The Far East Command tentatively accepts a recent displacement
units in this sector which would not indicate an ene of enemy
early general offensive. intention to mount an
Comment: These hostile developments in the general area of the Kaeson
conference may be designed only to exert
could be pressure on the negotiations, but g
preparations to seize strategic Positions for .the launching of a
general offensive,
15. JAPAN. New list of treat del
th e ates is selected: Central News e Japanese Gover ent at a Cabinet sessio
report's
o that
of d
l
e
n on
egates t th
oe San Francisco , sthat it
would make additions peace conference but indicated the Democratic Party decid pits list
designated envoys area P
ed to artiei
p e.
rime
siit Y aTh
nseroshida; Financeinister
Jiro Hoshijima, Liberal Party official;
Ikedae
de en e t Conservative; and Hisato ' Muneyoshi Tokugawa, Upper House
Ichi
mada Go
,vernor of the Bank of Japan.
16? Communists lannin series of eacerall es
Party and its front groins are holding The Japanese Communist
for a series of peace rallies, according
almost to ClNaily meetings in preparation
for 5 and 6 August in Hiroshima , and on the 9th C E N a2 saRalli s care scheduled
the atom bomb anniversaries n to
in various prefectures Burin while peace protectionrr meetings will be held
vention in Tokyo on 15 A g 1 August cuinating in a national conm
ugust.
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SECTION 3 (WESTERN)
1. GERMANY. Legal trade ends between West and East Germalsr; All legitimate
goods traffic between We
t
d
s
an
East Germany has ceased, as a result of the
decision by the Council of the Allied High Commission not to extend the
interim trade agreement, which expired on 2 August; On 3 August, West
German frontier guards turned back goods-carrying to crass thezonal border in either direction, trucks and trains attempting
zonal t ade for East German has threatened re r sal,s~forphcsus ensiontofi
tr- 25X1
Comment: The Western decision against renewal of the interim trade
agreemen was taken in retaliation for Soviet restrictions on Berlin exports.
The principal counter-retaliation open to the East German government is the
stoppage of electric power deliveries to West Berlin, which has more
expensive sources of its own.
240 Western Powers reply to Boni on the Saar.- On 3 August the US, UK5
and France answered Chancellor A enauer-s 29 May protest on the Saar by
agreeing with him that final disposition of the territory can only be decided
by the peace treaty with Germany, but rejecting his claim that the Saar had
not been removed from the jurisdiction of the Bonn Government as a result of
its economic union with France. The reply also expressed the hope that the
..Saar problem would not be allowed to become an issue compromising the close
association of European nations,
The occasion of Adenauer's note had been the banning of apro-German
party in. the Saar, to which he had objected, asking the three Allies to
safeguard democratic rights and permit the will of the people to develop.
Adenauerts chief interest is to assure that final disposition of the
territory will be reserved for a peace treaty, and though the Allied vote
gives satisfaction on this point, it will not eliminate the Saar as an out-
standing issue between France and Germany,
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4. ITALY. Coo eration in trade controls faces Soviet re risals: As a res
o:C he recen ockIng b
th
l
t
y
u
e Kali
metals in transit through Italy for Sovie t Satellite s~areas, Eastern European
countries are diverting to ports elsewhere in W
i
t
t
d
n
e
en
s
ern Europe shipments
ed to transit Italy. Reprisals b
th
y
e
Soviet bloc may take the fo
of reduced exports to Italy of coal and bread grains. US xn
Embas Rome
that if other countries in Western Europe cannot block crit
icalsmaterialeels
shipments to the East, the Italian Government cannot be expected to continue
cooperating in the control of transit trade and prejudice its East-West trade
relationship with no resulting benefit to collective Security.
with the Soviet, bloc for the fi
Italy's trad
e
rst five months of 1951 totals!
worth of ports and -25. milli
`.37?1 mills"
on worth of exports.
25X1
Comment.. While Italy's trade with the Soviet bloc for the first five
months o 51 is only a fraction of its total trade for that period "
are valued at $845,1 million and exports $625.3 a (andorts
wheat imported from Eastern Europe are vitally Ita1-lY the can C probably
obtain sufficient wheat from the US at favorable prices. The lowered availa-
bility of European coal, however, has compelled Italy in recent months greatl
to increase its imports of higher-priced US coal, y
SWITZERLAND# East-West trade. policy defined by the ress: The
'tun as repor e y Si a e aeue Zuericher
ra e is based on the principles
g as-es ~..
f
l
o
non-participation
iri any blockade be
Power groups" and the avoidance of foreign o y tween
one group to thwart the policy of another group, measures which mi ht enable 25X1
Comment, Although the AFP has at times been inaccurate in its reporting,
the s a e-ment agrees with other reports of Sw=iss neutralit
expressed b
th
y
y,
e organ of one of the strongest Swiss politicalTparties,9
reflects the intention of Swiss business groups in general ow a policy
most advantageous to their interests, despite US pressure onothelSw ss Govern-
ment for closer restrictions on trade with the East.
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%004 1~-j
6. DENMARK. Government promises battalion for the UN: The Danish Foreign
Minis er,has stated--that Denmark in ends -o prove e a, special battalion
(1000 men) for use by the UN in accordance with its "biting for'peace"
resolution of 3 November 1950, The Danish Parliament at its October
session will consider legislation to. authorize and implement this plan.
Although the Foreign Minister stated that Denmarkts decision pointed to
the future and "only indirectly touches upon the. question of despatching
forces.to Korea", he implied that if the question of troops for Korea
again becomes to ical the Danish UN contin ent miht well be available
for service,
Comment: The armistice negotiations in Korea have provided the Danes,
as we as e Norwegians and Swedes, with an excuse to avoid an immediate
commitment concerning the UN appeal for troops for.service in Korea. The
Danes, however, have now followed the.. initiative of the Norwegians in
recognizing that the smaller nations must bear at least a nominal-share of
the military task of repelling aggression when the UN has duly called for
such assistance.
ICELAND. Soviet fishing fleet makes annual. a earance off Icelandic coast:
Mi
r
J
-
~ y
econnalsance sighted a f 5it fihil
ewovesng vesses, including one
Comment: Since 19)48 the Soviets have participated in the north coast
summer erring fishing, which commences in July, Last year their inordi-
nately early arrival, with a fleet that was allegedly larger than usual,,
caused such consternation in Iceland that the Icelandic Goverment requested
the..US to send naval vessels to the area for protection0 Because herring
catches in the summer season have been extremely meager for the past few
years,, Icelandic fishermen have so far committed fewer ships to the north
coast fisheries this year, and foreign fishing fleets are also reported to
be smaller. Soviet vessels in the 1949 and 1950 seasons numbered between
240 and 50 ships, including as many as four mother ships,
URUGUAY. Proposed constitutional reform will abolish presidency: The two
bli
ma
J p
uuual parties in Uy -th o~
,,.ruguae ors oc s and the Herreristas--
have agreed upon a draft for a constitutional reform bill,, which provides
for abolition of the presidential system in favor of a nine-man Federal
Council similar to that which exists in Switzerland, The plan will be
submitted to Congress soon, and if, as expected, it is approved by that
body, it will be submitted to the people in November in a national
plebiscite. It is. anticipated that the Federal Council, which would be
composed of six members of the majority Colorado Party and three Herreristas,
would probabl
-' ' -
th
y
e
1952.
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 Comment: The k atllista faction of the Colorado Party is the strongest
advocate o the collegial system of government, a modified form of which
was tried in Uruguay from 1919 to 1933. The Batlli.stas argue that this is
a step toward greater democracy, since it eliminates the possible abuses
which can arise when power is concentrated in the hands of one man. The
restoration of the system has been one of their announced aims since their
return to power in 1942, and President Martinez Trueba (whose four-year
term would not otherwise expire until 1955) is one of the most enthusiastic
supporters of the proposal, It is unlikely that the institution of the
system would modify to an important degree Uruguay ' s friendly attitude toward
the US .
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9. ARGENTINA. Peron invokes wartime powers to break railway strike: Peron has
again invoke- wartime emergency powers to mobilize railway workers throughout
the country under the army. He took this action in an effort to break the
strike of the railway engineers and firements union, La Fraternida, which
struck on 1 August in protest at government... intervention in its union. A
similar decree to break the January railway strikes affected railway workers
only in the greater Buenos Aires area. The present strike has been more
effective in cities outside Buenos Aires, because in the capital workers
were rounded up and ordered back to work under threat of court martial.
Train service has apparently not been seriously disrupted by the several. 25X1
explosions which followed the strike call,, Present indications are that
the government is being successful in its attempt to sup Tess the strike,
Comment: Peron's quick action in invoking wartime emergency powers
?ndica es ear that the larger rank-and-file railway union, Union Ferroviaria,
would join in a sympathy strike? While La Fraternidadis strike is based on
a genuine trade union complaint., it also promotes plans of the Communists, who
have been agitating for further strike activity since the January railwa
wal Ir-^t~t h ` r
th
w
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j
?
is ev regard as their most successful undertaking
ear er- or s o exp ol iscon en among the workers in orde to ,', r
v4
as
t
he threat to reron's cgrrently unstable regime
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6 August, 1951
CIA No. 49294-A
Copy No.
TO THE DAILY DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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. Comments represent the
immediate views of the Office of Current Intelligence.
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SECTION I (SOVIET)
SECTION 2 (EASTERN)
2. IRAN. Ex-Prime Minister Qavam returns to Tehran, Former Prime,Minister Qavam
returned to Tehran on 31 July.. Since his return, he is understood to have been
receiving many visitors, including members of Parliament. The US Embassy in
Tehran is reliably informed teat the Shah did not discourage Qavamts return.
Cots The Iranian Minister of Court, former Ambassador Ala, recently
told W..Averell Harriman that the British were organizing Parliamentary and other
support for Qavam with the aim of engineering his appointment as Prime Minister
in place of Mossadeq. While this report is not confirmed, Qavamts presence in
Tehran would obviously facilitate such an effort.
The Shah, who is anxious to settle the oil dispute, may hope that Qavam
will provide a rallying point for the moderates in the oil issue and simul-
taneously put reseuve on the Prime Minister and, the extremists. The aged Qavam
is admittedly one of the very few able figures on the Iranian scene; there is
no indication, however, that the Shah, who holds a deep antipathy toward him,
has wavered in his firm opposition to Qavam?s appointment as Prime Minister.
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 Approved For Release 2009/05/11: CIA-RDP79TO1146A000300330001-3
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fidence-on the treaty and to permit pre-conference Diet interpellations, may
still come around; however, the Socialist Party, dominated as it is by leftist
leadership, is expected to remain intransigent,
SECTION 3 (WESTERN)
5. SPAIN. ECA technical survey team to study Spanish economic needs. A group of
Utechnical experts Vill leave for Madrid on or about 12 August under joint
ECA and State Department auspices to conduct a special study of Spaints
economic needs, The functions of the group are outlined as followst
(1) To analyze the current status of projects already approved under
the $62.5 million Export-Import Bank loan,
(2) To appraise the desirability and feasibility of existing and antici-
pated projects,
(3) To determine the requirements and capabilities of Spaints economic
development in the light of possible additional U- aid,.
(4) To work under the guidance and general direction of US Embassy
Madrid so as to insure a fully coordinated US position in all rela-
tions with'the Madrid government.
A'1
Comment; yhe Madrid government will undoubtedly welcome US technical
advice in meeting the problems involved in its ambitious program for farm and
industrial development and for a general overhauling of Spaints run-down
transportation system. If followed, the recommendations of the LE experts
should insure some degree of efficiency in the application of .Export-Import
Bank loans' without which S a in would be economically incapable of p~?ccsedin
with its economic prorama
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Approved For Release 2009/05/11: CIA-RDP79T01146A000300330001-3