DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000300440001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 12, 2016
• Document Release Date: January 4, 2002
• Sequence Number: 1
• Publication Date: August 21, 1951
• Content Type: SUMMARY

Approved For Re1Je 2002/05/20 CIA-RDP79T01146A06400440001 -1
TOP SECRET
21 August 1951
CIA No. 49310
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.
State Dept., USAF reviews completed
TOP SECRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
 Approved For Reldgog 2002/05/20: CIA-RDP79T01146A00' 0440001-1
SECTION I (SOVIET)
1. USSR. Embassy reports.curbs onforei_n'air travel within USSR.- Embassy
Moscow considers it possible that a large airlift into Siberia and the Far
East may be, the cause of added travel restrictions which have been im-
posed on members of its military staff.
The trend was first observed.a month ago and travel eastward is
hardest hit. Other directions affected include Odessa. The official
Soviet excuse for placing curbs on air travel-is the need to give priority
to the movement of freight,, the consequent diversion of aircraft for haul-
ing cargo and the_resulting.shortage of passenger. space. (S Moscow Weeka 33
17 Aug 51).
Comment: Restrictions on. the movements of the Embassy staff within
the USSR are of long standing-and are part of-the Soviet internal security
pattern. However,, recent added restrictions on air travel could be due to
an airlift to the Far East in view of the USSRfls commitments to aid Com-
munist China.
2. NEWS resumes softer tone in Moscowes dual propaganda8 The most
notable articles in the third issue of News,, the Soviet English-language
journal supposedly dedicated to the improvement of East-West relations,
denied any change whatsoever in-Soviet foreign policy., urged US-USSR trade
expansion,, and editorialized on the principle of non-interference in the
internal affairs of other countries. Another article denied that the USSR
failed to demobilize after the war and asserted that the present strength
of the Soviet armed forces is approximately the same as in 1939
Field comments Embassy Moscow noted that, apart from familiar
in-
sinuations that US policy is detrimental to the interests of mater countries
and to Britain in particular,, the News editorial seemed to imply that harsh
judgments of each otheres economic and political systems should not pre-
vent two sides from working out trade and political arrangements. The
emphasis on Soviet-American trade reveals the Kremlin?s hopes for removal
of US controls. (R Embassy Moscow 291$, 17 Aug 5l).
C ento The pinch of trade reprisals against iron curtain coun-
tries probably accounts for the softer line employed in the articles.plead-
ing for East-Test trade. However,, there is no dearth of the "hate America"
and "war-scare" themes in the propaganda output of other Soviet media.
TOP SECRET ,
1 . 21 Aug 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
 Approved For Rele 2002/05/20: CIA-RDP79T01146A00440001-1
TOP SECRET
3e Russians claim US annulment of trade pact causes discords The Sov-
iet Union's note of 19 August.on.the US.decision to cancel the 1937 trade
pact makes the point that the US was the one to request renewal of the
agreement in 1942 for an indefinite period. The note also states that
American renunciation contradicts the alleged desire for improvement of
Soviet --American relations which was expressed by the US in the Truman-
Shvernik exchange, (U New York Timesg 20 Aug 51).
Commentg The Soviet protestp.coming almost two months after the
US notified the USSR of its action, was probably delayed until the Soviet
Government had decided on the form of its reply to President Truman's
message and the Congressional resolution,
4.
USAF
25X1
Moscow visits of Soviet officials from Pakistan may be related to
expansion of Soviet activities: The Karachi press reported that M. M.
Volkov, Second Secretary in charge of Cultural Affairs of the Soviet Em-
bassy, left on 12 July for a temporary visit to Moscow, Volkov was de-
scribed as a specialist in South Asian affairs and one of the most active
members of the Embassy. US Embassy Karachi noted that the USSR Ambassador
to Pakistan, A. G. Stetsenko9 and Trade Counselor Broojes, who left on
TOP SECRET
2 21 Aug 51
Approved For Release 2002/05/20 : CIA-RDP79TO1146A000300440001-1
 Approved For Rele 2002/05/20: CIA-RDP79T01146A00440001-1
17 May and 14 June,, respectively., are still absent and are presumably in
Moscow. (R Karachi 1843, 13 Jul- y 51).
Comments Observers In South Asia have. recently noted the strides
made by the Communists in reversing the traditional trade routes in the
area in favor of closer ' ties with the. Soviet-bloc, In view of the ap-
parent success of this policy., the presence in Moscow of the Soviet Am-
bassador to Karachi together with Soviet officials in charge of economic
and cultural affairs suggests further efforts to extend Soviet influence
along these lines.
6. Kremlin barter for... return..of.children-claimed as Soviet citizens:
The Soviet Government' has offered to:allow.."Soviet citizen" Maria Pyrz to
leave the Soviet Union if some children previously claimed as Soviet
citizens will be "permitted" to leave the US.
Field comments Maria Pyrz is a US citizen who desired to leave
the Soviet Union but was. refused permission by the Soviet Government. In
1948 the Kremlin made a similar offer to exchange certain persons of US
citizenship for these same children claimed by the Soviet Union. The
present barter offer is believed to be inspired not by humanitarian con-
siderations but by a desire to build up-the current propaganda charge that
it is the US which impedes freedom.of-movement of persons. ( C Moscow 242,
10 Aug 51; C SD to Moscow A?40, 17 Aug 51).
25X1 C
7, EASTERN EUROPE. POLAND. Re Orted- laps for marked expansion of Polish
Merchant Marines he primary ob-
3ectjve of the.Po sh Merchant Marine is to expand its present 270,000-ton
fleet to 600;000. To achieve this goal,,'Poland must resort to the pur-
chase of shipping from outside the orbit. The expanded fleet of ships is
expected to nearly double the 12 ships currently plying the China trade
routes.
25X1 C
25X1A
Soviet control of the Polish Merchant
Marine was initiated during discussions between the USSR and..Poland in
Octeber, 1949, ultimately resulting in a reorganized Polish Merchant.
Marjne. Since these discussions former ly re-
placed by new officers and men.
Comments Other sources have reported the reorganization of the
Polish Merchant Marine at the beginning of 1951, as well as increasing
Soviet control over most of its activities.
3 21 Aug 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
 Approved For Rse 2002/05/20 : CIA-RDP79T01146AbW300440001-1
R.UBANIL, Swiss-Rumanian trade agreement signed: The Rumanian press has
announced the conclusion of a.oneyear"trade agreement with Switzerland.
According"to the Bucharest announcement,.Switzerland will export machine
tools., miscellaneous installations and machinery, electrical equipment,
instruments, dyes, and pharmaceutical products in return for Rumanian
cereals, fodder plants, lumber, chemicals and fuel oil.
The US Legation in Bucharest understands, but has been unable to
confirm, that an agreement was simultaneously concluded whereby Rumania
agreed to payment of about 20 percent of the claims of Swiss citizens for
property nationalized by"the Rumanian Government. (U Bucharest 67,
10 Aug 51; C Bucharest 80, 13 Aug 51),
Comment: Trade and financial. negotiations began in November
1950 between the wiss and Rumanians..were terminated, reportedly because
of Rumanian intransigeance over Swiss claims for. compensation for national-
ized property.. A Swiss delegation returned to Bucharest in April.
Conclusion of a trade agreement undoubtedly indicates that ar-
rangements acceptable to both sides on. controversial issues have been made,
including, in addition to nationalized property claims, some adjustment of
the Rumanian Government assertion. that. funds.. deposited in Swiss banks by
former Foreign Minister Cretzianu.were official rather than private funds.
The US Legation in Bucharest had.previously been informed by the
Swiss Charge in Bucharest that Switzerland did-not contemplate including
in its export items "strategic.. war material" but. would consider meeting
Rumanian demands for Swiss equipment for two power stations.
TOP SECRET
4 21 Aug 51
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
 Approved For Rel a 2002/05/20: CIA-RDP79T0.1146A0 .0440001-1
TOP SECRET
SECTION 2 (EASTERN)
1. IRAN, Internal, 0 25X1 X
,71T ppositian to the present Iranian Cabinet
e
r wit r u.~ 1eaCler in an, is repor e .
25X1 C paign t a - r y
Lister,
o undermine the present Pri
e Min
-
m
i
Eashani, has indirect contacts with the Soviet Era ssy, He is represent-
ea as ving told the embassy that.th the
vial crisis, now is a ' goverment facing an imminent finan-
cial propitiousid
ti
t
me
o show Soitod
ve go will by returning the.
Iranian gold it has held since its occupation of Iran during World War II. Other
reports state that he is interested in the abolition of the monarchy as a useless
anachronism, and the establishment of a deration
25X1A iet influences., of Islamic republics under Sov-
25X1 A
Comments Kashani is a rabble-rouser and an a
shani s e orts to secure the return of Iranian gold would imp Px'the rosy ti
of a government more amenable to Soviet influence. Contacts etween Kash it and
the USSR have been rumored before,
'While he has continued to support the present Prime Minister to whose Na-
tional Front Party he belongs, Kashani has recently been particularly vocal in
urging a united Tslam, and these speeches may have given rise to the above re-
port.
The opposition of various Iranian elements hostile to the present govern-
ment Is?not yet sufficiently strong to bring about the fall of the Prime Min-
ister,
INDIA, First Indian-made aircraft undergoes trial 1li hts: The first Indian-
made aires aft, .a basic gainer produced .by Hindustan Aircraft, Ltd., made
successful trial flights in mid -.August,, (S. New Delhi, Weeka 33, 17 Aug 51).
PAS' Lebanon mediating in Kashmlr^ ? dispute:
Karachi,, is mediating .between Pakistan and .In.dia in. The n at e pteto Minister to
Kashmir problem
settle the
accordin
to
b
,
g
a
roadcast f Ci
romaro on 19 August. Cu FBID
Tickers Beirut 19 Aug .51)..
Commentt There is no evidence that Lebanon is actually mediating between
India an 'akistan; India has refused previous offers of mediation or good
offices, Pakistan, however, has been seeking the support of other countries
against India, and the Lebanese Minister is probably doing what he can to ease
the situation.
.INDONESIA, Overseas Chinese "sightseeing group" bound for tour of
The first ar?ge-scale.. organized ae e Conte-st
ga ion of ne se in Indonesia-76.
TOP SE
Approved For Release 2002/05/20 : Cl -RDP79T01146A000300440001-1
21 Aug 51
 Approved For lease 20Q2/05/20 : CIA-RDP79T0116A000300440001-1
TOP SECRET
25X1 C
The
visit China since the Communist
them ndones aneborn'e~rho?ffe~'e selected from victory is group numbers b Chinese, 33 approximately four MO nths- and the
all parts of Indonesia. The tour will last app four n s, and
delegates will proceed from Canton to Hankow and Peiping, chew, Darien,
, and Harbin and finally to Tientsin, Tsinan.. and Hang
2~ukden y
they will get a red carpet tour and-will return'to Indonesia to act as apostles
of the new China, (R Hong Kong 668, 16 Aug Si).
Chinese in Indonesia has increased
Comanenta Anti-Communist sentiment among r~Nat~.onalist newspapers are quite
surer singy during the past six monthso F
vocal, and in several cities the Communists have been unsuccessful in achieving
control of the local Chinese associations.
The
Celebes errilla force rejects scheduled
rt that.Kachar MuzaIsar hasiordered his
Defense Ministry hs.s con#irimed the repo doin so he can-
4'000 guerrillas back to the jungle in the So'gth Celebes. By g
celled J incorporation, on 17 August, into the Republican Army. The
obtained (settle mere with
East Indonesian Territorial Commander, inannouncing
the guerrillas, stated that the armed forces
are still certain elements which desire (t o# exploit the Dguerr a issue in-anR
effort to further a certain purpose."
FBID Ticker Makassar- 17 Aug 51).
Comment: reported in March that the Com-
munists een successful in hindering the governmentis efforts to restore in--
ternal security in the South Celebes? 25X1 C
25X1 C
or
Dread preparing
K4 RUR A., Chinese Communists r 1ti_ 4. __'nn ('r,mm?n,.st 39tH ,,,-visa on are
assembling in the o of southern Yunnan where money dsd September.
will attack Indochina during Sep
t th
ey
and telling local inhabitants tha
(S SOPD 381, Bangkok c-61 17 Aug 51).
25X1 C
Comment: The presence of the 39th Division in the Fohat area has be toe re
The above information also appear
o er-
ports t the Chinese Communists are planning p a 25X1 X port s ? st forces in. Burma and Thailand which would be
ation against Li s a Ho Chi M launched from Yunnmu and northern inare prepared cooperation opera ions
If the Chinese Gomm~zxu sts, h wevertempting through
anywhere in Southeast Asia, tstrictinbiet ltimited objecti~vespshouTd
the entire area instead of restricting themselves be discounted,
his duties as Supreme Commander
d
Ne Win returns: Lt. General Ne Pin resume
of Burma!s. mared forces on 14 August after a months leave, (S Rangoon 59, 18
TOP SECRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
Indochina invasion:,
f
21 Aug 51
 Approved For Re1se 2002/05/20: CIA-RDP79T01146A00440001-1
TOP SECRET
Aug 51),
Comment: This action ends all speculation, for the time being at least,
regarding e Mints rent removal from office.. It is likely, however, that
Defense Minister_UWin and the Socialists have reduced the general's influence
and now exercise a greater degree of control over the armed forces.than they
did previously.
Burma mar attend Francisco conferences The US Embassy in Rangoon, re-
Ports. ;that the Burmese -Government .-may:reverse :itself and accept the invitation
to the Japanese. peace conference in view of the Soviet Union's decision to attend,.
The Burmese might feel that the Soviet Union's presence would permit Burmese at-
tendance by removing the possibility of antagonizing Communist China
The embass
,
y
points out, however, that such action would not necessarily signify a willingness
to sign the treaty. (S Rangoon 199, 18 Aug 51).
Comment: in the matter of the Japanese peace treaty, Burmese fears of in-
curring iinese Communist ill-will have not been completely allayed and will
continue to affect a decision as to whether or not to attend the conference.
25X1A
9. THAILAND. General Phao commences tours The Director General of the Thai police,
Y
r Eu
e
d h
. ...~,..
Gri
p
e uv. ~ I
25X1 A
R .FBID Taipei, 15 Aug 51).
Comment: Phao has for some time intended to visit the King in Switzerland,
but t-e recent coup attempt delayed his departure. He undoubtedly hopes to win
Royal favor and thereby considerably enhance his prestige in preparation far be-
coming, some day, Thailandrs Premier and de facto ruler.
10. INDOCHINA., Vietnam, official says ress concern re Japanese treaty is gover rent
vice-consul.that the Central Government has ordered his service to "make enough
.
noise" to keep the Japanese treaty issue before the public, The source said that
as a result many Vietnamese are now interested in whether Vietnam will be in
vited to the treaty conference., but that a greater number take the view that if,
Vietnam's participation is vetoed on the ground that Vietnam lacks independence,
the French may be pressured into granting further concessions. The source stated
that people in North Vietnam are far more worried about mobilization and earning
a living than about the treaty issue. (S Hanoi 105, 20 Aug 51).
Comments This report tends to confirm earlier evidence that the alleged
concern_oThe Vietnamese with the treaty issue consists largely of a govern-
mental attempt to distract public attention from domestic issues by magnifying
international relations,
TOP SECRET
Approved For Release 2002/05/20 : c 1A-RdP79T01146A000300440001-1 21 Aug 51
 Approved For Rel a 2002/05/20: CIA-RDP79T01146AO 0440001-1
TOP SECRET
CHINA. Appointment indicates growing importance of China's aviation industry:
An indication of the growing importance of China's aviation industry is the
recent appointment of a veteran Chinese Communist military leader as director
of the Aviation Industry Bureau under the Ministry of Heavy Industry. The
new director is Ho Chang-Jung, concurrently Vice Minister of Heavy Industry..
The former director., according to the same Peiping broadcast which announced
Ho's appointment, was demoted to deputy director. (U Hong Kong 703, 17
Aug 51).
Comment: The first mention of the Aviation Industry Bureau in Communist
broadcasts was in June 1951. It is improbable that the Chinese have
facilities for more than sseb a.d minor repair of aircraft. An early
2 5X1 C claimed that such facilities were set
up recently at Taiyuan in North China.
12. Violence declining in "suppression of counter-revolutionaries" campaign:
The US Consul General in Hong Kong notes that, of 923 alleged "counter-
revolutionaries" reported in the Communist press as sentenced during 3 to 2 5X1X
9 August, only 19 were reported as executed. This evidence of the declinin
violence of the suppression campaign is supported
25X1X adivce given Mayor Chen Yi by the Shanghai
er of Commerce to the effect that the "execution with fanfare" policy
was "seriously affecting" popular morale. The US Consul General concludes
that, although other recent arrivals from Shanghai have not noticed a
decline in executions, the weight of evidence indicates that this is so,
(S Hong Kong 691, 17 Aug 51).
Comment: Communist and other sources indicate that the percentage
of those executed has declined considerably in recent weeks. Neverthe-
less, the campaign continues without discernible decrease in scope, and
its purpose is precisely that of "seriously affecting" popular morale,
i.e., convincing the Chinese people that present or future opposition to
the regime is-hopeless. The Communists aim to make their subjects
totally subservient, and are clearly prepared to kill several million
Chinese to that end.
13.
Chinese Communist agents for Southeast Asia to be trained: An Over-
seas Chinese Institute opened on 20 August at Nan Fang University in,
Canton and is accepting "politically pure" overseas Chinese students
between the ages of 18 and 30. Entrance standards are low, and the
students are to be maintained by the State. The US Consul General in Hong
Kong comments that the Institute is likely to emphasize political rather
than academic training and may become an important source of cadres for
subversive work among the overseas Chinese in Southeast Asia. (S Hong Kong
694, 17 Aug 51).
TOP SECRET
Approved For Release 2002/05/20 : 21 Aug 51
 Approved For Rel(se 2002/05/20 : CIA-RDP79T01146A00440001-1
TOP SECRET
Comment: Undoubtedly a major objective of the new Institute is the
training of young persons for both overt and covert assignments in South-
east Asia.
14. Pei in issues new securit re lotions:
of Public Security has issued additional regulationsncontr?ling h?telsy
amusement places and printing and e
mitted ngraving shops.. Hotels are not per-.'
near military organizations of any kind, and must submit their
guest registers daily. Printing firms must have permission to print official
forms for any government agency or to make official seals-obviously an
effort to prevent the forging of official documents. (S Hong Kong , 6q417
Aug 51).
Comment;. The Dai Diest of 14 August reported earlier regulations.
strengthening the regime's police controls. Every aspect of the lives of
Peiping's subjects will be affected by these burgeoning security measures.
15- KOREA. Weather ma ex lain inactivit
The in North Korean airfield constructions
US Far Eastern Command, commenting on th
e sharp decline during the
last few weeks in airfield construction activity in North Korea
that the weather "has been
observe
t
,
s
Par
icularly inappropriate for construction"
Communist , airfields FECOM cautions, however, that extensive UN air action against
, coupled with the Communist ability to launch effective
counter-air sorties from Manchurian bases alone, may be responsible for the
cessation of airfield construction activity in North Korea.
Telecon 5062, 20 Aug 51)0 (S CINCFE
25X1 C 25X1 C
d o h
craft from the USSR:
ave received "et aircraft tanks and naval I --I to have nl the t frovn Lion: Th
N
ed
p
e
orth Korean air force received 60
jets, in early August, concurrent with t
MIG
he return of 165 North Korean
pilots from Soviet training; 270 tanks were received prior
with the intention of equipping a tank division for each to mid-August corps; the North Korean navy North Korean
25X1 A Soviet Union. requested a trans of 11shipsu from the
25X1A
Comment: Although the amount of equipment received and
is unconfirmed, it'is known that the USSR is continuing to supply ots ededned
p
heavy weapons in small amounts and is trainin ly needed
g personnel in Manchuria or~
in the USSR to utilize such equipment. It is conside
North Korean request for naval c aft would be granted by thebUSSR,that any
17.
Communistsagain claim UN violation of Kaeson ss neutralit
Korean General Nam Il on 19 August lodged a f ormal complaint allegingth
Approved For Release 2002/05/29&TRDP79T01146A000300440001-1
25X1A
9 21Aug51
 Approved For ReUdise 2002/05/20: CIA-RDP79T01146A00-01
00440001-1
TOP SECRET
violation of the Kaesong neutral area by "over 30 armed men of your side".
who ambushed a Chinese Communist patrol. An immediate investigation of the
incident by the UN military command "failed to identify the armed bands as
belonging to any UN command military formation." However, the UN communique
concerning the investigation raised the "possibility....that the shooting
was the work of a politically guided civilian group operating under
instructions to create an atmosphere of tension which would tend to support
the breaking off of the current military armistice conference,". (R,FBID,
AFP Tokyo, 20 Aug 51; R FBID, NCNA Peiping, 20 Aug 51).
Co .anent: Kaesong. and the surrounding countryside has been an area
of operations for anti-Communist and ROK guerillas since late in 1950. There
is no evidence available indicating that this incident was instigated by the
ROK.
18. JAPAN.. O position parties agree to participate in treaty conference: The
opposition parties have agreed to participate in the Japanese peace treaty
conference, according to Reuters. The Democrats will have one member: as
a delegate, one as an alternate, and two on a 12-man Diet mission that will
accompany the delegation. The Socialist party will be represented by two
members on the Diet mission. (R FBID, Reuters Tokyo, 18 Aug 51),
Comment: Decision of the opposition to participate will strengthen the
delegation in the eyes of the participating Allied nations, should make the
treaty more acceptable to the Japanese public, and should weaken political
attacks on the government. By not participating in the main delegation,
however, the Socialists apparently are preserving their opportunity to oppose
the government on this issue after the signing.
TOP SECRET
Approved For Release 2002/05/20 CIA-RDP79TO1 1- -1 A 51
 Approved For tease 2002/05/20 : CIA-RDP79T011460300440001-1
TOE' SECRET
SECTION 3 (WESTERN)
1. GERMANY. Coal trains to West Berlin are stopped by East Germans: The
East German-controlled Raichsbahn suddenly refused to permit the movement
of extra coal trains to Berlin on 17 August, stating that the rail paths
were needed to move the harvest, and that Berlin has enough coal. These
trains had been carrying over 15,000 tons of coal a week from the Ruhr
to West Berlin, by agreement between the East and West Germans. (C
Berlin 267, 18 Aug 51)-
Comment: This move may be a Soviet retaliation to the West's
action in bringing legal east-west German trade to a halt on 3 August.
The retaliation was probably deferred until the Merlin Youth Festival
was nearly over. In January of this year, the East Germans closed the
Mittelland canal lock, through which Ruhr coal had previously moved,
and since that time coal shipments to Berlin have been difficult.
West Berlin's coal stockpile is sufficient for about thr*o months.
25X6
Approved For Release 2002/05/20 : CIA-RDP79TO1146A000300440001-1
11 21 Aug 51
 Approved For Ruse 2002/05120 : CIA-RDP79T01146A00440001-1
TOP SECRET
3. AUSTRIA. Union of Independents purges press. Tho press service of the
Union of Independents (VDU) announced on 14 August that the bi-weekly
paper, Der Angriff (The Attack), is no longer associated with the VDU.
The publisher and editor of the paper has been expelled from party
ranks for disloyalty. Der Angriff will be replaced by a new publication,
Dias Arbeiterfront (Workers' Front). (R FBIS-Graz radio, 14 Aug 51)
Comment: Austria's burgeoning "fourth party", which has long had
press troubles with the occupation authorities because of its allegedly
noo-Nazi and openly anti-Soviet editorial policies, appears to have
acquired internal press troubles. The establishment of a working class
publication is significant of recent efforts of the VDU to retain and
enlarge its following among labor, after the recent presidential
elections demonstrated the existence of such a following. The VDU
aspires to develop a broad, supra-party base, and seems willing,
therefore, to sacrifice a militant approach.
Minister of Interior foresees period of internal calm.:
Minister of the Interior Helmer has informed High Commissioner
Donnelly that9 in his personal view, no new world crisis need be anti-
cipated prior to next June. he regards the internal situation in
Austria as similarly stabilized and believes the government competent
to most any Communist disturbances. The Minister, however, expects
Communist efforts to create unity fronts in the September trade union
elections, and warns that further economic deterioration would
contribute to Communist success. H. has no evidence of increased Soviet
military activities, but reports that the Soviets are bringing quantities
of road building equipment into Austria. (S Vienna 8774, 16 Aug 51)
Comment: Idnister Helmer did not disclose the source of his
general optimism, and, on the whole, his capacities as a world-prognos-
ticator may be discounted. Allied observers--particularly on the
occasion of the Communist riots in Vienna last fall--have not fully
shared Helmer's belief that his police force is a match for any
Communist challenge; his sanguine attitude should perhaps, be con-
sidered in conjunction with Foreign`iinister Gruber's_pressure for
resumption of Austrian treaty talks. Helmer's Socialists have pre-
viously charged that blame for the current economic crisis--the meat
shortage--rests upon the Ministry of Agriculture, headed by People's
Party Minister Kraus.
5. NETHERLANDS. Anti-US feeling in the Netherlands is growing: The US
Ambassador to The Hague states that confidential and informal reports
from unofficial US observers reveal a growing feeling of resentment
toward the US on.the.part of the Dutch, who allege that US political
TOP SECRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
12 21 Aug 51
 Approved For Re wise 2002/05/20: CIA-RDP79T01146A 00440001-1
and economic policy'is becoming "increasingly dictatorial and arbitrary
as respects Europe."
25X1 C a high-ranking Dutch
Government official in the Ministry of the Interior declares his
intention of cooperating fully with the US in international agreements
aimed at the USSR, despite the possible opposition of his government.
He implied that several Cabinet members fear that US actions might
become "so aggressive as to provoke war," an attitude characterized
by the sou cc
as fall'
" g for Communist propaganda.". (C Hague 180,
25X1A 17 Aug 51.-1 1 17 Aug 51)
Comment: Although there is evidence of a growing anti-US
feeling in the Netherlands, it can hardly'be considered as stemming
entirely from Communist propaganda. The Dutch, faced with a
worsening economic situation, have given a bad press to the Kern
Amendment and the recently-announced 1CA Productivity Program. The
Netherlands undoubtedly fears that the loss of its voice in world
affairs would force the country to abide by the decisions of the big
powers.
The ever-present Dutch resentment against the US role in achieving
Indonesian independence is currently accentuated by the Indonesian de-
'mands for revision of the Dutch-Indonesian agreements and the transfer
of Netherlands New Guinea to Indonesia. Dutch cooperation in US
policies probably will be harder to achieve in the future, and the cur-
rent anti-US attitude may jeopardize implementation of the Dutch
defense program.
6. UNITED KINGDOM. Britain sceptical of proposed Palestine Commission
conference; The Foreign Office has displayed "chill scepticism"
toward the proposed meeting of the Palestine Conciliation Commission
.(PCC) in Paris on 10 September,, and has in effect instructed British
representatives in Middle East capitals to make only general replies
to queries regarding the meeting. The Foreign Office considers the
invitation to the meeting ill-timed, and emphasizes the need for a pre-
paratory "educative process" in the Middle East. The Foreign Office
indicates concern that the UK, though not a member of the Commission,
failed to receive advance notice of the impending invitation; and it
also questions the practicability of a number of the proposals to be
suggested at the conference. (C London 936, 17 Aug 51)
Comment: The proposed meeting of the FCC is intended to.bring.to-
gather representatives of Israel and the Arab States in an endeavor to
promote the solution of at.least some of the problems currently vexing
their relations. The impatience displayed by the Foreign Office reflects
TOP SECRET
Approved For Release 2002/05/20 : A-RDP79T01146A0003004~0 0 -1
Aug 51
 Approved ForJease 2002/05/20: CIA-RDP79T01146 00300440001-1
TOP SECRET
the deep concern currently felt in the UK over what, is regarded as a
general weakening in the entire British position in the Middle East over
the past six months, and suggests that the Foreign Office is for the
moment not disposed to be conciliatory on any Middle Eastern questions.
7. COLOMBIA. Communists collecting detailed personal information on
Colombian diplomatic and consular representatives: In accordance with
instructions from the Cominform, Colombian Communist leaders are col-
lecting information on the diplomatic and consular representatives of
Colombia in the US, UK, and France. The information desired includes
25X1A detailed knowledge of the subject's debts, vices, and weaknesses.
F77 -1
Comment: This is the first report that such instructions have been
issued to any Latin American Communist Party. Colombian Communists
would probably be capable of performing the assigned task.
. CUBA. Death of Chibas probably will- not bring serious political reper-
cussions: The death of Senator Eduardo Chibas y hivas, leader of the
"Ortodoxoee party, and 1952 presidential aspirant, probably will not
bring serious repercussions to the political situation in Cuba. Chibas
shot himself on 5 August after a weekly broadcast in which he called on
the people to awaken to what he called corruption in the government. .,Had
Chibas lived, he. probably would have had little chance to secure the
presidency due largely to his proven instability:
Once considered the leading presidential aspirant and "the man to
boat", Chibas derived his strength, at least in part, from the fact that
the government had not yet decided on a candidate. Recently his position
began to deteriorate as certain segments of his party began working in
harmony with Communist leaders. More recently Chiba.' prestige suffered
considerably as a result of his failure to prove charges of graft
against Minister of Education Sanchez Arango and several other government
officials.
Chibas' concentrated campaign to discredit the government and create
distrust of.all its acts did have some effect on the general public.
However, it appeared that public reaction was redounding more in favor
of ex-president Batista, another presidential aspirant, than to Chibas
himself. Many Cubans who applauded Chibas for berating the government
rather than for any qualities he may have had as a statesman. apparently
were giving their support to other candidates as election time approached.
While some Orthodoxos will now return to the government group, the
opposition leader Batista will probably derive the most benefit from the
passing of Chibaso
TO1? SECRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
14 21 Aug 51
 TOP SECRET
or declassi-aded
t
o
pMye_4?P' F Wsft210uQ12f?9IM ESfAIRBMJ '
l
bD0300440001 1
UNCLASSIFIED when bl
d document.
ll
e
f i dthd from contro
fied when filled inormseace
SECRET DOCUMENT
HEET FOR TOP
CONTROL AND COVER S
DOCUMENT DESCRIPTION
RELEASED
TIME DATE TIME SIGNATURE
DATE
NUMBER OF ATTACHMENTS
ATTENTION: This form will be placed on top of and attached to each Top Secret document received by the Central Intelligence Agency
such time as it is raded, destroyed, or
personnel and thosedindividual whose official
or classified Top within and
transmitted outs deeofe CIA. Accesse to CIATop Secret l matternisa limited to Top Secret Control until
Top Srial will orm
who attached
the TopcSecretatdocumentswilltsignfand
duties relate to the mer. Top Control
and indicate period ofatcustody inStheClefthandOcolumnslprovidedeEachoindivdual the
the ight-hnnd columns.
REFERRED TO RECEIVED
NOTICE OF DETACHMENT: When this form is detached from Top Secret material it shall be completed in the appropriate spaces below
and transmitted to Central Top Secret Control for record.
DISPATCHED (OUTSIDE CIA)
Apo
WITNESSED BY (Signature) I (Signature)
.a 79TO114
TOP SECRET
 ? Approved For Rel a 2002/05/20: CIA-RDP79TO1146A00Q00440001-1
TOP SECRET
21. August...:1951.:..
CIA No. 49310-A
S/S CABLE SUPPLEMENT
TO THE DAILY DIGEST
Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
'Thies 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.
TOP SECRET
0-
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
 Approved For Rase 2002/05/20: CIA-RDP79T01146A1300440001-1
TOP SECRET
SECTION 2 (EASTERN)
1. EGYPT.. Foreign Minister main insists denunciation of treaty with_Britain
is nez~.t. The.Egyptian . Foreign Minister has again informed the US .Ambassa-
dor in Cairo-that he thinks he will formally announce Egyptian abrogation of
the 1936 Anglo-Egyptian treaty before the end of the Egyptian Parliament's
present session. (TS, S/S Cairo 2169 18 Aug 51; U News Ticker, 19 Aug 51).
Comments The Egyptian Foreign Minister9 according to his various state-
ments, apparently cannot decide on a date for the treaty's denunciation, A
few days ago he told the US Ambassador that he intended to delay abrogation
until probably October. the Egyptian press is quoted on 19 August to the ef-
fect that the Foreign Minister would not denounce the treaty during the pres-
ent session of parliament which.. will be concluded within a few days.
Syrian Prime Minister issues statements favorable to the West.- The
new Syrian Prime Minister has issued statements to the local press which re-
veal a favorable attitude toward the West, He is quoted as saying. "Arabs
cannot face the dangers of this perplexed world alone. Neutrality is imagi-
nary when we are weak.... I do not advocate alignment with the Western bloc
for love of this bloc, but to repel the dangers threatening my country."
The Prime Minister, however, also has cautioned that there is a great
difference between his beliefs and government policy formulated by the
Cabinet. (C9 S/S Damascus 94, 16 Aug 51).
Comment: The forthright and realistic statements attributed to the
Prime Minister are in sharp contrast to the neutralism and open anti-
Westernism so commonly voiced in Syria, The Army and its Chief of Staff are
the real rulers of Syria; there is no evidence that they have assumed a pro-
Western attitude,
3, IR=. Internal opposition to the present Iranian Cabinet reportedly
developing Mullah Kashani9 a top religious leader in Iran, is reportedly
25X1 C nvolved in a campaign to undermine the present Prime Minister, Kashanig,
has indirect contacts with the
Soviet Embassy, He is represented as having told the embassy that, with
the government facing an imminent financial crisis, now is a "propitious"
time to show Soviet good will by returning the Iranian gold it has held since
its occupation of Iran during World War II. Other reports state that he is
25X1A interested in the abolition of the monarchy as a useless anachronism and t.e
establishment of a federation of Islamic republics under Soviet influences,
Commen s Kashani is a rabble-rouser and an opportunist. Presumablyp
TOP SECRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1 21 Aug 51
 41,
Approved For Re ,se 2002/05/20: CIA-RDP79T01146AO 00440001-1
Kashanirs efforts to secure the return of Iranian gold would imply the insti-
tution of a government more amenable to Soviet influence. Contacts between
Kashani and the USSR have been rumored before.
While he has continued to support the present Prime Minister to whose
National Front Party he belongs, Kashani has recently been particularly vocal
in urging a united Islam, and these speeches may have given rise to the above
report.
The opposition of various Iranian elements hostile to the present govern-
ment is not yet sufficiently strong to bring about the fall of the Prime
Minister,,
25X1A
2AN, National Front Deputies reportedluxge continuation. of oil talks' r-. I.#/%
Three National Front Deputies have agreed to urge Prime Minister Mossadeq not
bveak off the current Iranian-British oil discussions,
I I
Como The three men mentioned have all been ardent supporters of oil
nationalization. If this report is correct and it may well be, since an
increasing number of Iranians apparently now favor coming to some sort of
agreement with the UK in the oil dispute ?- it would seem to indicate that
the move toward settlement of the oil question had penetrated the Prime
Minister's own party,
5 PAKISTAN, Government accepts invitation to Japanese Peace Conference'
Pakistan&s acceptance of an invitation to the San Francisco Conference has
"gone forward." according to Sir Zafrullah Khan, the Foreign Minister. Sir
Zafrullah hopes to head the delegation if conditions in Pakistan permit him
to leave the country,, (C. S/S Karachi 173, 17 Aug 51).
6, INDOCHINA. Britain now willing to invite Indochinese states to Japanese
treaty conference- The UK Government has instructed its High Commissioner
in India to inform the GOI that, having "duly noted the views of the Indian
Government," the UK nevertheless finds it desirable to invite the Associated
States to the San Francisco conference. (C, S/S State to London 10429
18 Aug 51).
Comma The altered position of the UK9 which has previously been
reluctant to invite the Associated States in view of Indiags unfavorable
attitude, virtually assures the attendance of the Associated States at the
conference,,
TOP SECRET
2 21 Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1 Aug 5l
 Approved For Rel 2002/05/20: CIA-RDP79T01146A000440001-1
!'' CHINA, Peipin is Foreign Office reaffirms Dosition on I Lanese peace treaty:
ncv4v
he had been called to the Ministry of Foreign Affairs to receive avcopy of
Premier Chou En-laws 15.August statement on the Japanese peace treaty. The
ministry8s spokesman emphasized to the charge the importance of the conclud-
ing paragraphs of Choues statement,, (S, S/S The Hague 189, 17 Aug 51).
Comment: The last three paragraphs of the Chou statement declare that,
if Communist China does not-participate in the "preparation, drafting and
signing" of a Japanese peace treaty, Peiping will consider the treaty "illegal"
and "null and void." These paragraphs also express agreement with the Soviet
position that a peace conference should include all the states whose armed
forces were in conflict with Japan in World War II, and affirm that Peiping
is prepared to "exchange views" on a Japanese peace treaty with al such
states.
Chou's speech suggests the possibility that, after the San Francisco
conference, Moscow and Peiping will call a separate conference of the Soviet
bloc and the nations that do not sign the US-UK draft treaty at San
Francisco.
SECTION 3 (WESTERN)
4ETHEftIANDSB Dutch are dissatisfied with the present Japanese peace treat,
dtafto The Dutch Foreign Affairs Minister is somewhat doubtful whether his
country will sign the present draft of the Japanese treaty, especially if
.the Indonesians refuse to sign it. He hopes that some revision will be
possible at the San Francisco conference, despite the US and UK statements
that the draft is "final." Certain modifications of Article 14 (reparations)
would make the treaty acceptable to the Dutcher (Sp S/S The Hague 187,
omm nts The Dutch fear that the reparations clause as it now stands
will result in the Netherlands being responsible for the claims of its
citizens who suffered from the Japanese occupation of Indonesia. Other re-
ports indicate that, even though the Dutch demands for revision are not act
ed'upon, the Netherlands may sign the treaty with reservations,
TOP SECRET
Approved For Release 2002/05/20 : CIA-RDP79T01146A000300440001-1
3 21 Aug 51