DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000500050001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 21
• Document Creation Date: December 20, 2016
• Document Release Date: February 27, 2006
• Sequence Number: 1
• Publication Date: October 17, 1951
• Content Type: REPORT

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TOP SECRET
17 October 1951
CIA No. 49390
Copy No.
143
DAIJY 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, DIA, PACOM and USAF review(s) completed.
State Department review completed
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SECTION 1 (SOVIET)
to USSR. USSR protests Norway's contributions to NATO: A 15 October Soviet
note to Norway charges that Norway has violated its treaty commitments to
the USSR by in effect making Norwegian territory available to NATO forces.
The note accuses Norway of establishing air and naval bases for the use of
NATO and transferring Spitsbergen and Bear Island to the Atlantic command.
The USSR points out that actual military use of Spitsbergen would be a
violation of the multilateral treaty of 1920 forbiddin the militarization
of those islands and would endanger Soviet interests.
Comment: The Soviet note is in line with previous Russian protests
on the occasion of Norway's adherence to NATO in 1949. Threatening in
tone, the note resembles other protests to Western nations regarding NATO
or German rearmament.
Although the note does not refer specifically to current US negoti-
ations with Norway for operating rights at Norwegian air and naval instal-
lations, its contents and timing suggest Soviet awareness of such negoti-
ations. Specific mention of Spitsbergen in the note at this time may fore-
shadow renewed Soviet interest in the islands, which has been latent since
1947 when Soviet attempts to negotiate a treaty for joint Soviet-Norwegian
defense of the area failed.
Charges of Norwegian violation and assurances to the USSR may some-
what prolong these negotiations or delay subsequent ratification by Norway's
parliament. The Norwegian Government has consistently refused, however,
to be deterred. by Soviet maneuvers.
17 Oct 51
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Minc~
4. PolandQ outsttndandiig
ng economicgplanner,einna mspeech lon9 Octobe , outlined
the
Poland s ous
the views of the Communist ~srtyAcon the cordingpolicy Minc, be troubles
present economic difflculti th a concotmi.tant in
stem from the rapid industrialization of the country wiIn thnarconc Agra t in-al
crease in the non-food producing urban population. of the la production has not increased at atcthef
agricultural collectivization
necessary tempo."
Mine rejects the alternatives of slowing down industrialization or in-
creasing the rate of collectivization in order to overcome the problem.
Instead, he states that Polish eca~?ductaonefo~som? i~ebandathatbpolish
production
"phenomenon" of disproportionate
policy will be limited to measures designed to ameliorate the present cequences of the "phenomenon." Specifically he announced that the government
will wage a cam ai to see that all commodity and financial agreements are
fulfilled.
Comment: Food shortages have been a continuing problem in Poland since
the
late last spring. Their effect
population did not begin Minc9s expla-
nation have repeatedly been reported
nation is an authoritative analysis of the
real situation nwitonno he frame oric
of Communist doctrine and is probably
problems that Poland now faces.
5a TRIESTE. Inde endent arties ma withdraw from Communal Council: The non-
Communist political parties which favor an independent Trieste, are con-
sidering withdrawing their representatives from the Trieste Communal Council
which was elected in 1949 for two years, on the grounds that its continuation
in office is illegal. The pro-Tito party and the Cominform party may withdraw. Further, there are rumors that small pro-Italian parties are
contemplating a similar move because of their objections to the domination
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of the Council by the Christian Democrats.
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Comment: Even if all the independent parties should withdraw, the
administration of Trieste would not be seriously hamPould9
Christian Democratic Party would retain a quorum in the Communal Council.
Withdrawal of the parties, however, would be embarrassing to the Allied
Military Government as it would be a positive demonstration of the inde-
pendent parties' disapproval of the election poetponemento
ba YUGOSLAVIA-, Chief of Staff concerned over West's 51 ategic plans In a
conversation with General Collins, Chief of Staff Popovic expressed concern
over the apparent desire of the West that Yugoslavia
concentratenocahol?ing
the Ljubljana gap in the north and the Vardar gap in s
a general conflict. He stated that the YugoslavvGovernment, fornpolitics]-
as well as strategic reasons, must defend all part
tory with equal vigor. Popovic described as unwarranted the fear that the
Yugoslav army would quickly withdraw to the Bosnian mountains, exposing
the Allied flanks, but, he added, neither could the Yugoslav army expose
its own center by the concentration of its troops on these flanks,
Ambassador Allen reports a statement by Tito that outstanding differ-
ences on the military aid agreement were minor and could easily
Tito based his plea for military assistance on the view that if any attack
on Yugoslavia were prolonged, the conflict would probably expand into a
general war, whereas a quick Y oslav repulse of the Satellites would
lessen this danger.
Peasant intransigence continues to plague Tito re me: Evidence of
increasing peasant resistance to the government's agrarian policies is
revealed by sharp denunciations in the press and by reports of widespread
failures to fulfill winter sowing plans.
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.Peasants who are trying to leave the collective farms are being de
and
Pe -
pounced in classical 'Soviet ta~rs saha e areported the jailing rs, of saboteurs collective
enemies." In addition, newsp pe eo An important Zagreb news-
farm managers for and wheat sowing plan has been
paper reports that only
tia
n
carried out in Croa
LI
hic h was first noted c
continued
Comment: Intensified peasant resistance, w
season in July and August)
wide scale during the harvesting evidently feel that sabotaging the
up to the present timed The easanteventuals reliefs The regime, which is committed
be forced to rely on an
ian program will brim
babl
y
agrar
will pro
to a program of collectivization, wthe consequence will be an
increasing employment of coercion even though immediate decrease in grain production.
Industrialization chief economic o al: In a recent
economic Bob~ectivesc9
Chairman of the ~~~ ~?n~ouncil, listed four principal
of the Yugoslav
(1) the completion of key investment projects: electric power, steel
of coal and non?ferrous metals;
and textile industries, and the mining
(2) strengthening the national defense;
(3) stabilization of the domestic economy-, and
(4) decentralization of power to the individual enterprises presumably
dominated by Workers, Councils.
l.etion of key industrial
In addition, Kidric predicted that the comp
antici-
projects would eliminate the current ?52ficit inx theede
but warned that the deficit for 1951
pated 120 million dollars.
The US Embassy in Belgrade notes that the emphasis throughout the speech
was on the concentration of all resources to complete key projects, while a
disc in the standard of living was promised for the futures
to note that Kidric9s speech gives first and ates
Comments It is interesting
basistandardsc ondrandgthird
priority to the economic development
defense needs and an improvement of
u riorities. The speech reflects a contin edareliance mpointainn doctrine that
p
only through. industrialization can Yuaoslavia
endence and achieve ,,true socialism o'8 Kidric9s reference to the possibility
p exceed x,120,000,000 may be a warning
that aidoa s 1oe $000?000 anticipated will be requested from
fth th e $1 21259X 9
that aid in excess of 1
the West.
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1. SYRIA/JORDAN. Initial Sian and Jordan _@A reaction to Middle East Commad:
The Prime Minister of Jordan and the Syrian Chief of Staff both expressed
considerable interest in the proposed Allied Middle East Command when
US diplomatic representatives in Amman and Damascus explained the details
of the plan. Ebth officials voiced the hope that their res iv countries
might artici ate in the Middle East defense orgainzation.
25X1
Commena None of the Arab States except Egypt was to be a founding
member of the Middle East defense organization. The private views of
these two influential Arab officials reflect the initially favorable
reaction which many Arab leaders felt toward the Middle East Command
proposals, It is clear, however, that the official attitude of the
various Arab governments will be tempered by subsequent events in Egypt,,
where nationalistic demonstrations have followed Egyptes abrogation of the
1936 Anglo-Egyptian Treaty and summary rejection of the Wpsteril--proposed
Middle East defense plan.
25X1
20 BURMA. Burmese admit BCPconcentrations along China borders A 15
September press report from Rangoon states thatffiaa strong Burmese
army motorized column" has been dispatched to the northeastern frontier,,
where Burmese Communist insurgents have established well-protected overland
routes into China. The report states that while there is no evidence of
the Chinese aiding the Burmese Communists, the latter have established
supply dumps in the border area. The dispatch admits, however, that
a large number of Burmese youths are believed to be receiving military
training in Yunnan.
Comments This information is strongly supported by reports from other
sources. It may even be an unofficial Burmese Government release,since
the contents are strikingly similar to information confidentially divulged
by various Burmese political and military leaders. If this is true, it
would be a marked departure from Burmese complacency toward the threat of
Communist China.
3. Parliament passes bill for Karen States The Burmese Parliament
recently passed a bill for the establishment of a Karen State in the
poor and mountainous Salween District of eastern Burma. Under its own
terms the bill will not be fully implemented for four years. The US
Embassy in Rangoon comments that although the Karens in Salween may accept
such a state, it certainly will not please the Karens of western Burma
and is likely to drive many of them into the Communist camp.
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I
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n The available scraps of information
promised in the
han they are this
that the Karens are to be given even less t
itutional for the nullification of
nstitutione Apparently the bill calls
Burmese co representation on ethnic
of the
the cons- provision for proportional only a smal Karlens fraction" living in
lines after the Karen State is ct9. and the ecially
Karens
Ithe Irrawaddy involu Delta and in Te~n~o ss the erim seas will The v stnmajily yet of will drive Move, es
sille r dthere this be no but it to say that
act this bills but t is
theel{a~ens have never expected the present Will
them i into
the Cive them any better consideration.
Parrl liament to g
n A press dispatch
,
a ~PPk mi i a
BURMA INDIA. Pt M ni Prime M
40
from Rangoon states ,~, -- that Prime inishirs forthcomingyvisit with Nehru.a n
dingh
I
n
Nu? s rip ,o 25X1
C n ree by a wire to discuss Burma s
was - tivated9 to a considera esatuation with Nehru. The prospects for
India are
urity
assistance from
deteriorating internal sec
receiving any substantial amount of military
not brighto
t a
e
ip
ssion
r r -- swais
5. MALAYA' LAgr an_abserv.~_, epor visited Singapore received the
who recently errilla a
officer of the U5 Army in reducin
t s
that the British are no
~sCimistica
Malaya and are generally p guerrilla
ants This impression is accurate. The eradication of adual development
activity in Malaya c lisped only with the gr can be ac omp
Malayans of a sense of nationalism and an awareness of Communist a ms.
among
P J n ? t m t
and Pha a c ed of instiat
6. THAILA ? B atU P Rsan kok has been informed
The U,'~ tvuara" a rema-Gull
that the abortive coup in dune watae his principal police and military
designed by Premier Phibun to depose
Attache points outs then Phibun?s
lieutenants. If this is trues enerally realived.
position is more precarious than is g.
commonly
It that it is
l
s
eta
commenting on this report9 revea
The believed in EmbassyThai9 naval circles that the Director the theca nsvy.
e
be stimulated the coup as police support
He is covertly e is said to have attempted his romising army and pp Ed crossing it at the last moment.
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be some correlation between the Ttwo he best ions
Wis. While there may by convincing evidenced eared
neither is supported that it was exactly what it app
reported above, tea coup is Phibun
explanation of the attempted
effort by disgruntled naval elements to overthrow
to be--an the
regimen
,~,orat one The son of the That
ncp 1i Director Fhao?s brother-in-law,
a mc~--who is also for Parliament
7. persons to run
army p comm nted a n- chief, on the fl forgo Parliament
has appointed an agent to select outstanding P
from Chiengmai (an important north Thailand city) which
US Embassy states that this is?iticalsmachineete
Party ticket. The U rovinci P roach.
ions of Pto?s P general elections app
accelerate its activities as g
25X1
nlimt
re ort?a at u
- - lement
comment s Phao?s ambitions are widelyol~tical support to suPP
ock of Should he obtain considerable lice. been the
his chief weakness has lack of P
his influence with the army and P in
support as a result of the e 195a9 he would become
threlections to be h0~-
threat to Premier Phibun than he is now*
much more formidable
a
l in B On 12 and
s c e s chos..---
Peiping protested the closing
C 3Ynes mmunists r of
the
$. C ed with s following Chinese
13 October the Chinese Communist The Thai Thai in Pare charged
a Chinese school in Bangkok 11 and of 08stifling" oversea all Chinese9
STS policy of 88preparing for wait is alleged, is intolerable to all
Such persecution, the school be withdrawn.
education.
25X1 and it is 9Odeanded" that the order clos sing
in line with the periodic Chinese Communist
government is and its prcWestern policies.
Cotes This diatribe is
attacks on the Phibun S nt
not to
its The question of whether or
hamb r f C ern Q11. s
10 October as a lit the Chinese Chamber of
9. C =0a -~-- holiday s seriously P r??Communist
observe As a result, the struggle between is the more open than
Commerce in Bangkok. le Chinese
Cant sing
and pro-Nationalist fafti mmercetis thenmostCommunity
of
ever, as the Chamber
organization in Thailand-
of
The Prosecution Department edente
sec
10. icide case to warrant pro
he Thai Government has announcThaihregthere is still en sled the recent
t in the
against ever Ba.nomrghended. The Department also appe
should he e ever be apppP
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Th
acquittal of two defendants in the same case. offer furt
believes that both these incidents
of of closin the case
Government has no i f
e US Embassy in Bangkok
her proof that the Thai
or of exonerating Pridi
even by implication-
25X1
The
s g 1 0Jon agricultural reportss that rice
on the basis of official Thaa estima.
in 2 will be 50,000 tons less than they were in
ort
ex
p
1951.
ts Thailand will
por
Comment: Despite this antic
eadin asour e?ofirie l in 19529 as Burma9 s
continue to be the sto decreased While total world availab~ StY of
affected by these losses of rice expo 9 the
exports are also expectea
grain will not be seriously production of rice will their failure of Burma and Thailand to increase
of free Asia.
continue to aggravate the food problems
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iL.. Chinese Nationalists will accept US recommendations on budgets The
,Economic Stabilization Board, on which US off c als are represented as ob-
servers, will review the Chinese Nationalist budget prior to approval, accord-
ing to a proposal made by the Nationalists to,the US Embassy in Taipei The
.Economic Stabilization Board will make recommendations on both military and
,civilian sections of the budget.
As a further opportunity for the US to review the budget,'the National-
ists propose that its military sections be prepared in consultation with the
Military Assistance Advisory Group before it is submitted to the Boarde The
Nationalists also propose t reoular statements of current expenditures
and receipts to the Board. 25X1
Comment-. This is a partial surrender of sovereignty which the Chinese
Nationais s have found hard to accept, but the continuing financial solvency
of the Nationalist Government is being assured only by US aide To ensure the
efficient use of aid funds9 the US has sought effective control by American
officials over Nationalist expenditures. 25X1
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160 Chinese Communists threaten to shell commercial vessels: The Chinese
Communists have announce a a commercia vesse s sa ng eir waters
without permission will be shelled by shore batteries without warnings 0apm2 5X1
tared vessels will be confiscated, and all crew members will be imprisoned
for a minimum of three years. The Communists will not acce t excuses that
the vessels were forced off course by inclement weather,
Comment: This order would apply primarily to vessels which frequently
cross nese waters en route to Hong Kong and Macao. Communist shore bat-
teries in the Pearl River delta have' already shelled several Western-flag
vesselp, and the seizure'of Okinawan junks has been reported,
25X1
Construction of military installations in the area may account for the 25X1
sensit.vity to the unauthorized approach of commercial vessels. I I
17- French official at Shanghai believes Peiping desires cease-fire in
Koreas. The French Consul-General at Shang ai repot ed he i11-concea ed
-N-71-re" of the Chinese Communist press in Shanghai for a resumption of cease-
fire negotiations in Korea, and noted an "implied concern" over the break-
down of the talks o The French official cited, as a "possible indication" of
Peiping?s expectation of an agreement in the talks a reported "u sure"..of
economic "efforts" in Shanghai and in Tientsin. 125X1
Comments It is questionable that the Shanghai press would take an in-
depen-ecine on a major matter; the Peiping press, as presented by Peiping
radioo has not indicated such a "desire" except on Communist terms or such
a "concern" except for a possible relaxation of Chinese vigilance. The un-
specified "upsurge" of economic activity could as well be an.indication of
an expectation of continued hostilities as of a peaceful settlement,
18. KOREA. UN fi hber ilots? observations of enemy jet airoraftt During the
course o an encounter be een 80 MIG- s and 32 F- 86s in the Sinuijum
Sinanju area on the afternoon of 12 October, UN pilots. observed the follow-,
ings
(1) One enemy aircraft in a flight was "a shoulder wing type and was
believed to be a Type-15." The UN aircraft passed within 100 feet
of the enemy plane and observed the figure "1'0 but no other markings.
(2) A DIG pilot was "wearing a dark colored, close fitting helmet, The
enemy pilot also wore an oxygen mask but no goggles, and appeared
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to be light complexioned."
Conti While still not confirmed, it is entirely possible that the
enemy-Ts employing the Type-15 for combat testing purposes and is attempting
to conceal its presence among the more familiar NIG?154so
It would-appear difficult to detect the coloration of an enemy pilot
under conditions of high-speed jet combat,, It is probable, however, that
Soviet personnel are piloting some of the enemy jet aircraft encountered in
Korean
190 Enemy artillerrfire direction given in Russian languages On 13 and
]..Uctober, radioed enemy artillery ire irec ions an corrections given in
the Russian language were received on a UN divisional radio seta Although
the reception of the enemy?s transmission was poor, a competent UN Russian
linguist was able'to make out references to the ' 1st zone, the 34th zone
and height."
Comments This is the first known instance of Russian language voice
transmission being received on UN ground radio sets. While Soviet military
personnel have been frequently reported previously as serving antiaircraft
artillery in North Korean rear areas, this transmission would seem to Quu-
firm the presence of Soviet military personnel in some ground combat role.
It cannot be established from the limited material available whether
field or antiaircraft artillery fire was being directed and corrected by
this voice transmission. The word "height" could apply either to altitude
in the case of antiaircraft artillery or to elevation in the case of field
artillery. Similarly, area designators, such as "zones, sectors, or grids,"
are common to both field artillery fire direction and to an integrated early-
warning antiaircraft defense system.
2Oo ROK takes action to relieve housin shortage in South Koreas On 11
October the OK 'Minister of Social Welfare announced that, in view of ex-
cesses committed by landlords, refugees would now be allowed free lodging
in any living space they can locate. 25X1
Comments The acute housing shortage in both rural and urban areas of
South ores as further worsened the. lot of the estimated four million refu-
gees in the southern provinces (the Chollas and the Kyongsangs)o Landlord
excesses, such as charging exorbitant rents and turning refugees out for non-
payment, have forced the ROK Government into this corrective action.
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SECTION 3 (1VESTERN)
2, FRANCE. Foreign Office official suggests Big Three act together on Moscow
.vie -inspire economic conference now scheduled to be held in Moscow during
December, expressed his informal opinion that the US, the UK and France should
either agree publicly to call this a Soviet political maneuver and discourage
acceptance, or else encourage the attendance of "courageous individuals who
will speak out." An international initiating committee is currently in
session, or about to meet, in Zurich to plan the agenda,
The French Government has so far "discreetly discouraged" those French
industrialists, technicians, trade unionists, and public officials who have
been invited to the conference.
25X1
Comment: The French have recently shown a growing reliance upon
concer e action among the Big Three on all major international issues.
Nonetheless, during the past year they have repeatedly shown interest in
resuming East-West trade relations and have recently been placing increasing
emphasis on France's need for additional imports from the Orbit, Bilateral
French-Soviet trade discussions are now in progress, and the French are
probably loath to turn down any opportunity to expand East-West trade,
even though the prospective conference will not be governmental and may be
exploited as a Communist propaganda forum,
3. French refuse Italians' plea for help in gaining UN membershi :
France has reuse to sponsor UN mem ers ip or y by a irec proposal
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in the General Assembly. The French Foreign Office told the Italians that
its refusal was based on the difficulties in circumventing the Security
Council, and advised them to apply once more to that body "to see whether
the Soviets will continue to follow the same tactics and argumentation in
vetoing admission." 25X1
Comment-. While the French would undoubtedly welcome a test in the
SecurityGouncil, their refusal to assist the Italians at this time is
probably due chiefly to their reluctance to take the lead in any Western:
move which might antagonize the USSR.
FRANCE BELGIUM. French consider closing their consulates
Communist China;
Belgians are closzn eirs: According to a Frenc Foreign Office spokesman,
ranee is considering closing its consular offices at-both Shanghai and
Tientsin, as a result of reports from the French Consulate General now in
Hong Kong that the Chinese Communists have been attempting "to provoke an
incident involving him and his staff at Shanghai." If the French close
these consulates, their only diplomatic post in China would-be the French
Embassy at Peiping.
The French spokesman added that, according to the Belgian Embassy at
Paris, the Belgian Government all its consular offices in China
and recalling its personnel.
25X1
Comment: Communist China has already taken over most of France's
consular property. In the past, France has refrained from protesting similar
provocative incidents or indignities to its nationals in order to obviate
any excuse by the Chinese to invade Indochina.
Belgium's interests in the Far East are limited. One of its few consular
offices in China was closed during the summer.
5. AUSTRIA. Impending strike in US-sponsored network and newspaper called off:
e President _oT7e Au.s Tian edea~i.on o~`l.ra e .ions assure ig z om-
missioner Donnelly on 15 October that the threatened strike of Austrian
employees in the US-sponsored Red-White-Red network and the Wiener Kurier
will be avoided. The strike threat was withdrawn after the Hi o scion
re-instated three employees previously dismissed, and appointed a committee
to consider the adaptat? n of Austrian labor rocedures to US employment
conditions in Austria. 25X1
Comment: Amicable settlement of the labor dispute removes a serious
embarrassment to the US occupation authorities in Austria. The immediate
cause of the dispute was the American suspension of three employees who
objected to a questionnaire which asked for the employee's race and his
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attitude toward the forceful overthrow of the US Government, Shop stewards
had previously voted not to sign the questionnaires. There has,'however,
been a long-standing dispute between US authorities and the employees on
the introduction of the so-called "USCOA schedule" which, while increasing
wages by 50 percent,would deprive Austrian employees of certain protections
under Austrian labor legislation, The US attitude in the controversy was
strongly criticized by a leading People's Party newspaper and was widely
exploited by the Communists,
NETHERLANDS, Dutch refuse to stop transshipments of chemical presumably
ecesstinec. for Communist Ina: US s ipmen s o y rose pie, a bleaching
agen use in extife production, to the Netherlands are being re-exported
to Hong Kong, presumably for Communist China. A Dutch Foreign Office
spokesman informed the US Embassy that the hydrosulphite was licensed by
the'Netherlands Bank for sale in Hong Kong before it had left the US. He
added that the Netherlands would do nothing to stop these shipments; he
suggested that the US either propose that hydrosulphite be included on
the Coordinating Committee list, or make end-use checks prior to granting
export licenses, The Embassy is also concerned over the Dutch failure to
stop the shipments inasmuch as.t is in short supply in the
Netherlands,
Comment: The Dutch have adhered to Coordinating Committee restrictions,
and have so maintained that controls over strategic commodities should be
exercised by the originating country rather than by an intermediary handling
the transfer, The Netherlands Government has the power to requisition
strategic commodities, where such action is necessary as a last resort,
unless the title has already passed to another country.
Dutch press criticizes US "blacklisting" of forwarding concern:
Initial Dutch press reaction tote US ' blacklisting" of Van ;Udens, a Dutch
forwarding firm with headquarters at Rotterdam, has been unfavorable, The
Netherlands Government, however, has taken a neutral position, and trade
officials generally seem pleased. However, a few local officials are
concerned over the effect the US action will have on Rotterdam's reputation
as a port. Opinion is divided on the effect it will have on other
forwarding agents and the future use of Rotterdam as a transit point. US
consular officials believe, however, that the US order will discourage
"expansion of diversiona activities" among the firms at this port,
Comment: In January 1951 an official of Van Udens was reported as
pro-Communist and systematically engaged in diverting shipments of
strategic commodities to the Orbit,
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The US action will undoubtedly add to Dutch irritation over what they
regard as US economic interference.
S, ITALY, Non-Communist Press denounces Soviet rely on peace treaty revision:
non ommunis press has teat e strongly to the ovie note to the
Western powers regarding revision of the Italian Peace Treaty. Both
conservative and moderate leftist papers call the reply "absurd," ''un-
acceptable," and "blackmail." The conservative Tempo as well as the semi- 25X1
official government organ Messaggero affirm that Italy will never abandon
the Atlantic Pact. Press commeso points out tha~ the note is actually
another Soviet veto of Italian membership in the UN.
Comment: The tenor of the press comment suggests that many non-
Communiincluding democratic Socialist elements and members of the
Christian Democratic left wing,-are becoming increasingly disenchanted with
the blandishments of Soviet peace propaganda. On the other hand, there are
non-Communists who will continue, as ex-Premiers Orlando and Nitti have done
in the past., to advocate Italyes withdrawal from the NATO should the Western
powers fail to consider its interests adequately.
Italian Ambassador to Moscow believes Soviet note on treaty aimed to
bolster I ian ommunis ts: The Italian Amass- or to Moscow,, whose opinions
are highly regarded by the US. Embassy, feels that the Soviet mote imposing
conditions for revision of the Italian Peace Treaty of 1947 is "largely a
question of polemics with the Italian Communist Party in mind."_ The US
Embassy'agrees that the note appears to have been drafted with Italian
internal conditions in mind, The USSR feels its position "rather weak re
the Italian people in general and the Italian Communist Party in particular,"
While the USSR is restricting development of the national aspirations of
the Italian people, it must at the same time not "pull the rug out from
under" the Italian Communist Party.
Following publication of the Soviet note, the Italian Communist paper
Unita carried an article explaining that the Soviet Union demands only that
Italy y be independent and "pacific." In this connection, the Communist Party
militants arg -privately c ainin that the Berlin "Peace" A eal is not
going well. 25X1
Comment: The Soviet note strengthens the appeal of the Italian Com-
munis peace campaign for nationalist elements who want an armed but neutral
Italy with international parity. It does not, however, lessen the support
of the majority of Italians for the Government's pro-Western policy.
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10. Parliament. vote on foreign policy shows strong appeal of Communist
"peacett propaganda: The Chamber of Deputies concluded its debate on the
governmenn s foreign policy with a vote of confidence for Permier de Gasperi,
rejecting a Communist-sponsored motion assailing "the new political and
military pledges resulting from the Ottawa conference" with a 322-to-157
vote. However, a motion which did not openly criticize the government's
policies but called for a relaxation of international tension and for East-
West 'liiscussions" was defeated by a margin of only 265-l97. The US Embassy
in Rome believes the switch of votes reflects (1) "wooly-headed" thinking on
Communism, (2.) confusing effects of_Communist peace propaganda,-and (3) fear
that rearmament may "provoke" the USSR and may be progressing too fast in
relation to government expenditures for social reform. Embassy officials
also stress that the cumulative effects of the Communist peace campaign must
not be underestimated, and state that the government is making plans to
recapture the peace theme. 25X1
Comment: The smaller margin in the voting on the second motion reflects
the t lning of a substantial-neutralist segment of the population which
believes that a rapproachement is possible between the US and the USSR,, and
that Italy should act as a bridge to bring the two powers together0
Supporters of this view have been one of the main targets of the Communist
peace propaganda campaign.
11. SPAIN. Spanish demand special concessions from US in wolfram negotiations:
Ti" e US Embassy in Madrid reports that in return for a long-term contract to
supply the US Spanish wolfram, the Spanish Government will offer no price
concessions and has introduced quid pro quo's"which are extraneous to the
subject matter under negotiation0'r. Specifically, the Spanish negotiatiors
have demanded adequate assurance of equitable treatment for Spain in the
distribution of US goods in short supply and favorable action on a Spanish 25X1
request for a three-year 25-million-dollar cotton credit to be submitted
to the Export-Import Bank. The US Embassy has informed the Spanish Govern-
ment that the US would probably not be receptive to these demands.
Comment: Past statements by Spanish officials have indicated that the
government has expected all along to receive assurances regarding supplies
of US goods in short supply in return for any Spanish agreement to supply
the US with strategic raw materials, Large cotton credits are considered
essential in order to destroy the-black market in cotton and to weaken the
black market in pesetas. These credits would have to come from the Export-
Import Bank's revolving cotton credits funds, and the Bank opposes granting
them because it feels that Spain's economic position would be weakened
rather than strengthened thereby.
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12, SWEDEN, Relations with Poland deteriorate further: The US Embassy at .
=030 repo s a we is -Po is re a ions are deteriorating. Sweden
has had a steady influx of Polish refugees, and Polish protests against
Swedish asylum have become more vitriolic. Swedish authorities suspect
that the influx of refugees includes a number of spies and Communist agents.
The Swedish Seamen's Union has warned its members against going ashore in
Poland following the outrageous treatment of Swedish seamen there,
25X1
Comment: Swedish authorities have recently displayed a sterner and
more vigorous attitude towards Poland and Polish merchant marine personnel,
and have undoubtedly irritated the Polish Government, There is good reason
to believe that among the refugees there are secret agents for Communist
activity against the Polish refugee groups,
13, ARGENTINA, Peronistas celebrate Loyalty Da in tense atmosphere: The
Minister of e Army ias announced that the acme forces will participate
in the Loyalty Day celebrations, during which the General Confederation
of Labor will present medals to 60 army officers for loyalty during the 25X1
28 September revolt, Participation by the armed forces in these celebrations
is a new development, which may be designed to demonstrate labor-a unit
and provide an additional attraction for the populace,
Comment:: Loyalty Day, 17 October, is the most important Peronista-
create oiday and this year has been planned as a high point in the election
campaign. Special features on the program include the introduction of
television in Argentina and the formal presentation to the workers of the
expropriated newspaper La Prensa, which the General Confederation of Labor
will begin publishing on l Oc of ber. A special medal will be presented to
Senora de Peron, to whom this year's celebrations are dedicated because of
her "great self-sacrifice" in declining the nomination for vice-president.
There have been unconfirmed reports that the workers may again demand that
she run for vice-president, although this would be completely illegal if
the elections are held as scheduled on 11 November, Whether or not this
inflammable issue is reopened, general political tension has created an
atmosphere in which at least minor disturbances could be provoked,
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17 October 1951
CIA No. 49390-A.
Copy No. 49
TO THE DAILY DIGEST
Not for dissemination outside O/CI and O/NE.
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 2 (EASTERN)
1, AUSTRALIA, Government wants direct expression of US views pertaining
to Egypt crisis: A high government official informally told the US
Embassy in Canberra that, in view of the Egyptian crisis, his government
would like to receive an "independent expression" of the US attitude
regarding negotiations for a Middle East Command rather the
British interpretation of that attitude.. 25X1
Comment: The Australian Government has long been aware that it
must depend upon close cooperation with the US for its continental
defense. This report indicates increased Australian concern that close
cooperation with the UK alone is not sufficient to guarantee the
security of Australian interests in the Middle East.
2, JAPAN. US moves toward settlement of security treaty and future of
Ramkyus: Top-level consideration is now being given to the appointment
of a senior Department of State officer to work exclusively on the
administrative details of the US-Japan security pact, to the designa-
tion of a Presidential committee of three members to make recommendations
on the Ryukyus settlement, and to the constitution of a Joint Congres-
sional Advisory Committee to work with the latter, The Department feels
that announcement of these arrangements might have a favorable effect
on the debate now going on in the Japanese Diet over ratification of
the peace and security treaties by showing that the US is prepared to
move promptly on these matters; on the other hand, it might induce some
elements in the Diet to ask postponement of ratification of the two
treaties pending the outcome of the negotiations, The Department
has therefore requested the comments of the US Political Adviser in
Tokyo, General Ridgway and Prime Minister Yoshida relative to the
advisability of making uncement of these intentions,
Comment: The Japanese Government is being criticized by the
Opposition on these two aspects of the treaties, and a US announce-
ment would support the government's contentions that the administrative
details of the security pact have.not yet been worked out, and that
the Ryukyus are not permanently lost to the Japanese.
SECTION 3 (WESTERN)
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