DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000500190001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 12, 2016
• Document Release Date: February 7, 2002
• Sequence Number: 1
• Publication Date: November 6, 1951
• Content Type: SUMMARY

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TOP SECRET
SECURITY INFORMATION
6 November 1951
CIA No. 49417
Copy No.
DAILY DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
1
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. review completed
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SECURITY INFORMATION
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SECTION 1 (SOVIET)
25X1
25X1
1. USSR. Soviet note warns Turkey against Atlantic Pact: The Soviet Union
has warned Turkey that it "cannot remain indifferent" to Turkey's plans
to join the Atlantic Pact, and "awaits an explanation from the Turkish
Government." The note, announced by TASS in the Moscow press, was de-
livered in Ankara by the Soviet Ambassador, who flew from the USSR.
The note, according to TASS, drew Turkey's attention "to the responsi-
bility it has assumed by joining the aggressive Atlantic bloc and allow-
ing Turkish territory to be used for the establishment of foreign mili-
tary bases on Soviet frontiers." Major stress was laid on the air and
naval bases allegedly being established by the US near the Soviet
frontier. (U NY Times Reuters, 4 Nov 51)
Comments The Soviet Union's current campaign against the Atlantic
Pact and Western defense measures has included the delivery of notes
to such NATO countries as France, Italy and Norway. The Soviet demarche
to Turkey fits into this pattern and is similar to Moscow's protests
to Norway at the time of its entrance into the North Atlantic Pact in
1949. It may well be followed by a similar note to Greece or a Soviet
offer to renew the Soviet-Turkish non-aggression treaty, denounced by
the USSR in March 1945. Such an offer was made to Norway following the
Soviet note in 1949.
2. AUSTRIA. Austrian employees discharged at Soviet military installa-
tions: On 1 September 1951 all Soviet military installations in Vienna
were directed to discharge all Austrian employees. The process of dis-
missal, which is expected to take about two months, is determined by
the trade union representative of each installation, with non-communists
and " uestionable" communists leaving first.
Comments The report is in accordance with earlier reports of dis-
missals at Soviet installations in Austria. (.See OCI Daily 10 Oct 51)
While the move is probably a security measure similar to that taken in
East Germany, it also may be an indication of the permanent nature of
Soviet occupation, as contrasted with the alleged Soviet interest in
concluding an Austrian peace treaty.
25X1
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poles a roach France and Finland re shi palandeconclccording to
a recent report purchase of the French merchant ship
negotiations in ugust for the Wisconsin of approximately $,000 gross tons.
T lalso that Poland has been negotiating with
bedead-weight tween Poland tons
sisix gned yet ,000
por the ctts s ave l been of
ships. and Finland
No contracts
ecaus use the Poles ob ect to Finland's long delivery terms.
Commenta These reports are consistent with others that Poland is
making every effort to enlarge its merchant marine whatever the cost.
In early September it was learned that France had agreed to an
annex to the French-Polish tra~rt~e~einformationproviding
has beentreceived as
further
the Wisconsin to Poland. No
to France's final action on this sale.
Poland's approach to Finland for the construction of six merchant
vessels has not been reported previously. However, Finland does have
shipyards capable of constructing vessels
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25X1A
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 SECTION 2 (EASTERN)
1. NEAR L . Ex-Mufti of Jerusalem urges Arab attacks against Westerners:
The ex-Mufti of Jerusalem has reportedly sent word to his followers in all
the Arab countries uring }hem to attack all British, American and French
nationals and to sabotage their property. no
2 5X1A evidence of an understanding between the ex--uti and the Moslem Brotherhood
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25X1 as well as with members of other dissident groups.
CQmm s The followers of the ex-Mufti are not as numerous as those
of the fanatic Moslem Brotherhood, but they have sufficient support as
a result of the Palestine issue to promote disturbances in the area
and to increase Arab bitterness toward the Western powers.
2. EGYPT. M 1~ i ary train' g -orogr. j_3a the US for Ebyti .i a , to b ended:
The Department of State has informed the Embassy in Cairo that
"present conditions" make it advisable to suspend the training program
in the US for Egyptian army and air force personnel. Egyptian personnel
now attending US service schools, however, will be permitted t6 complete
their training. The Department states its further belief that it "does
not consider this action punitive," and it voices the hope that "con-
ditions will soon permit a resumption of the training program."
The Department suggests that, since formal notification to Egypt
concerning this decision to suspend the training program "would
probably cause considerabl- resentment, particularly in the
Egyptian Army and the A. Force," the Embassy should merely delay acting
on Egyptian applications dui' military training and explain, when asked,
that the delay is "only administrative." (S to Cairo 683, 2 Nov 51)
3. AFGHANISTAN. Czech Legation in Kabul a possible source of Communist
propaganda: The Czech Legation`in Kabul'is thought to be disseminating
Communist propaganda written in English. Several pieces of this material,
of the fellow-traveller variety clearly designed to appeal to Afghan
intelligentsia, have recently some into the possession of the US
Embassy in Kabul. (C Kabul, Joint Weeka 18, 1 Nov 51)
Comment: Relatively little is know of Communist activity in afghanistan.
It was reported in July that l~ussian language propaganda materials
were being disseminated by the Soviet Trade Agency in Kabul (see Daly
Dies ,'23 Jul 51), but the Czechs have not previously been reported
as involved in propaganda activities. Following Dr. Kratochvil's defection
as Czech Ambassador to India, in early 1951, it was rumored that the
Cominform had shifted its South Asian base of activities from India
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to Afghanistan in order to make use of the well-developed net of Czech
economic representatives in the area.
4.
PAKISTAN. Trad agreement with Ceylon: On 14 September, Pakistan signed
an agreement with Ceylon designed to facilitate trade between the two coun-
tries. Under the terms of the agreement, Pakistan will encourage exports
including 150,000 tons of rice, some wheat flour, and gram to Ceylon, while
Ceylon will export natural rubber, graphite, cocoanut oil, tea and spices.
(U Karachi Desp. 349, 20 Sep 51)
Comment: West Pakistan's normal rice surplus is from 200,000 to 300,000
tons, most of which ordinarily is sent to the deficit area of East Pakistan.
The dispatch of 150,000 tons of rice to Ceylon would force East Pakistanis,
who prefer rice, to consume more wheat, of which there is a greater surplus
in West Pakistan. India, which has imported Pakistani rice, may also suffer
as'a result of the new agreement. Pakistan utilizes very little natural
rubber and graphite and may intend to re-export these commodities.
5. BURMA. Burmese Coznffiunists and Karen insurgents reportedly sign agree_nt:
The US Charge in Rangoon was told by the British Ambassador that the Karen
insurgents in the Irrawaddy Delta have just signed an agreement to cooperate
with the Burmese Communist Party. (S Rangoon 441, 3 Nov 51)
Comment: If this report is correct, Communist capabilities in Burma
will have been greatly increased at a critical moment. Coordinated action
by the numerous Karen rebels in the rice-rich delta area of southern Burma
would facilitate the achievement of the Burmese Communists' current objec-
tive -- control of northern Burma, including territory adjacent to Communist
China.
The British Foreign Office regards the situation in Burma with con-
siderable concern and has recently suggested a joint American-British effort
to assist the Burmese Government in reaching a settlement with the Karens.
The American and British Embassies in Rangoon, however,, believe such an
approach unwise, citing extreme Burmese sensitivity to the Karen insurgency
as reflected in Premier Thakin Nu's 29 October statement that Burma would
not accept mediation.
6. IND OCHINA0 Renewed Viet Minh terrorism foreseen: The French authorities
fear that the assassination of Commissioner de Raymond in Cambodia is the
signal for a renewed and increased effort on the part of the Viet Minh to
establish a reign of terror. :After being spared any grenade throwings for
four or five months, Saigon has recently suffered three such incidents.
(C Saigon 965, 3 Nov 51)
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25X1X
7. INDONESIA
the Communist Party has penetrateT-fH-9- Indonesian'
Army in Sumatra to such an extent that a number of troops
25X1 had to be moved to Java because of their subversive
25X1 A behavior.
25X1 Commen s If I true, Col. Simbolon, military commander
of North and Central Sumatra and one of the most competent officers in the
Indonesian army, was probably responsible for shifting unreliable troops to
another part of Indonesia.
It has been estimated that five percent of Indonesian Army troops are
Communist and 40 percent are "unreliable."
25X1 C
S. Re-entry hermits denied. Oyer seas Chinese now in China: A
I Ireports that after the departure for Communist China
in August of an-overseas Chinese observation party, it was discovered that
the Indonesian Immigration Department had not included re-entry permits in
the passports and travel documents. Members of the party born in Indonesia
will be permitted to return. However, those born outside Indonesia probably
will not be permitted to re-enter the country on completion of the tour.
25X1A A prominent Chinese in Sumatra has made several visits to the Immigra-
tion Office in Medan in an effort to secure re-entry permits for the entire
Sumatra contingent of the part To date he has been unsuccessful.
F 2_1
Comment: During the weeks preceding the departure of the group, the
Indonesian Government had become increasingly irritated by policies of the
Chinese Communist Embassy in Djakarta and increasingly aware of Chinese
Communist subversive activity. Additionally influenced by the discovery
of an "underground movement which had foreign support," Indonesian officials
may persist in denying re-entry to those Chinese not Indonesian-born.
Labor front is Quiets The labor front in Indonesia is generally
quiet. Left-wing labor unions are not making excessive demands or threaten-
ing crippling strikes.
25X1 SCBSI, the Communist-led
labor ederaion, has probably passed instructions down to local unions
not to create disturbances in order either to:give the impression that the
government's security sweep was not necessary or to iul1. the government
and the public into thinking the security measures have been effective.
25X1 this is only a tactic, and that the left-wing labor
movement is prep
25X1 A sive activities.
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C st&s penetrate Indonesian Armvs
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Comments The government's security arrests included a number of SOBSI
and left-wing labor officials and several suspected Communists in the Labor
Ministry,
25X1 probably correct in estimating the current lack of labor
disturbances as a tactic, However, an additional and more immediate reason
25X1
for such quiescence is the fact that renewed activity at the moment would
undoubtedly bring renewed arrests,
ill Comm;
2 5X1X lutionary Governments A has obtained a copy of a Philippine
Politbureau resolution, dated March 1951, which sets forth the aim of.es-
tablishing a "Provisional Revolutionary Government" which would be in-.
tended to serve as a "rallying center" for the allegiance of the masses
and give them a "permanent revolutionary outlook," In areas of strong Huk
influence, town councils would be elected by a "show of hands," The coun-
cils would designate and supervise peasant committees for partitioning and
apportioning the land, and where factories exist workers' committees would
prepare for the seizure of industries. E: 7 While it is recog-
nized that there is a big difference between outlining and actually imple-
menting this plan, in areas friendly to the Huks "town councils" might be
used to gain further'mass support, although it is doubtful they could ac-
complish actual government functions since the Philippine. Communists lack
a "liberated area," (C Manila 1611, 2 Nov 51)
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12. CHINA: Chou ED-101 r=r s on state of the nation: Chinese Communist
Premier and Foreign Minister Chou En-lai's long political report to the
People's Consultative Conference on 23 October has been released by Peiping
radio. Chou made the following principal points:
(1) an "unprecedented unity" of the Chinese people has resulted
from the three-point program of aiding Koreas advancing land
reform, and suppressing counter-revolutionaries;
(2) although Chinese Communist forces in Korea have inflicted on
the US "colossal" losses, US intransigence in negotiations
has shown that the Chinese must be prepared if necessary for
a "long-term struggle";
(3) land reform now extends to 310 million peoples with 90 million
to go, and will be largely completed by the end of 1952;
(4) although "great nation-wide successes" have been achieved in
suppressing counter-revolutionaries, the movement has been
"uneven," and the struggle "must continue on a nation-wide
scale" ;
(5) government organs at all levels are working well but need to
be streamlined, to improve their cadres, and to learn to dis-
tinguish between Peiping's area of responsibility and their
own;
(6) the national minorities are being brought under Communist con-
trol while concessions are being made to local customs; and
(7) united front activities are effectively lining up the populace
to support Peiping?s policies, with even the intelligentsia,
businessmen and religionists learning to admire the Communists
and despise the West. (R FBID flimsy, 3 Nov 51)
Comment: Most of these points were made in the speeches of Mao Tse-tung
and other Chinese Communist leaders before the Conference, which discharged
its function of endorsing the regime's program in toto. The "unprecedented
unity" and wide popular "support" are clearly the products of compulsion;
almost all sources agree that the regime is unpopular with all elements ex-
cept its own functionaries.
13e O n ommunist China
25X1 in Hong Kong states that 19 nuns and 300 priests
are known. to be IF ja in Communist Chinas that 1,000 Catholic missionaries
have been forced out of China during 1951, and that the remaining 1x500 are
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expected to be jailed or expelled within the next year. (S Hong Kong
1621, 2 Nov 51)
25X1 Comment: Although Imay be correct, his figures are
higher in all categories than those supplied Even
including those under house arrest, the figure of cannot be con-
firmed by available evidence. Some hundreds of Catholic missionaries
are known to have been expelled; it is estimated that about 1,000 others
25X1 have remained. In any event' certainly right in expecting
the imprisonment or (in most cases) expulsion of those remaining, as
well as continued coercive action against the estimated 10,000 Chinese
priests and 3,0009000 Chinese Catholics.
14. Tibetan wooer sales hammered by US contra s& According to an
important Indian trader in Tibetan wool, US controls may force the
Tibetans to sell their wool to the Chinese, who urgently need it'for
making blankets. Because of US Treasury restrictions, dealers do not
know whether the US will buy Tibetan wool. The Consul General in Cal-
cutta advises a relaxation of these restrictions in order to encourage
Tibetans to bring their wool to the Kalimpong market. Otherwise they
will sell to the Chinese Communists. (C Calcutta 221, 27 Oct 51)
Comment: US Foreign Assets Control Regulations forbid payments for
merchandise in which Chinese Communist nationals have had any interest
since 17 December 1950, unless permission is obtained from the Secretary
of the Treasury. Under the regulations, US dealers cannot pay for wool
now owned by Tibetans (who are presumably nationals of Communist China).
15. Chinese Communists are still relatively unaffected bar Western
economic sanctions: Western economic sanctions have had no especially
adverse effect on China's economy, according to the US Consul General
in Hong Kong. Although the Communists have had to defer some of their
plans for industrial expansion, reports from travelers indicate that the
efficiency of many utilities--some of which depend on imported machinery--
has actually increased.
The Consul General believes that stockpiles of strategic items
already accumulated may have acted thus far as a buffer against the
effect of Western sanctions, but shortages are beginning to develop in
certain items, e.g., trucks and electronic supplies. He is of the
opinion that the next six months will demonstrate the full effects of
Western economic sanctionsa. (S Hong Kong 1612, 1 Nov 51)
ent: Sanctions have been in effect for too short a time to
permit firm conclusions regarding their effect on China's economy. The
Chinese claim that increased shipments from the USSR and Eastern Europe
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are countering the effectiveness of Western export controls. Never-
theless, unconfirmed reports that the Chinese are dissatisfied mi th the
quality of Soviet deliveries and costly efforts to develop sources of
supply in the non-Orbit areas (e.g., Macao and India) indicate that
Western sanctions are beginning to handicap China's economy.
16. KOREA. "Aerial no-man's land" reLortec ovgr northwes ern Korggl The
inability of UN medium bombers to venture north of the Chongchon River
in northwestern Korea in daylight hours is cited by the Far East Command
as demonstrating the loss of UN air superiority in this area.
The Far East Command states,.. however, that the "relative freedom
of action" enjoyed by high-performance UN jet aircraft over northwestern
Korea has in turn prevented the Communists from achieving effective air
superiority, in effect establishing an "aerial no-man's land." (S CINCFE
Telecon 5331, 5 Nov 51)
Comment: Loss of air superiority north of the Chongchon River has
caused the UN to resort to night medium bomber and fighter-bomber missions
in an attempt to continue the neutralization of the airfields at Taechon,
Namsi and Saamchan. The Communists are continuing to augment their anti-
aircraft defenses at these fields, and considerable construction work con-
tinues in the repair and extension of runways.
17. Communists adamant on possession of KagsoDg: A Peiping broadcast,
reporting the 4 November sub-committe meeting of the cease-fire talks,
states that no progress was made. The broadcast adds that the Communists
are "determined in their opposition to the absurd American demand that
they yield Kaesong" and that they will equally oppose "the fantastic
demand that Kaesong be placed under American control and moved into a
so-called demilitarized area." .
The broadcast concludes with the warning that if "the American side
stubbornly persists in their demands ... then the responsibility for
stalling the armistice negotiations will rest entirely with the American
side." (R FBID Ticker Peiping, 4 Nov 51)
Commen : Reasons for the Communists' currently intransigent stand
on the disposition of Kaesong are obscure. It may be speculated, how-
ever, that the prestige value of holding this ancient Korean capital
city, located in South Korean territory, is of equal weight with its
military value.
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1$, Chinese Communis s make coordinated tank-infantry attack in
wester sector; In the late afternoon of 4 November, an unidentified
Chinese Communist unit, estimated at division strength, launched an
attack supported by ar estimated reinforced battalion of tanks and self-
propelled guns. The at-Gack, directed against elements of the 1st
Commonwealth Division west of Yonchon in the western sector, was sus-
tained for nine hours but made pnly slight gains. UN air action knocked
out six of the twenty-two attacking tanks and one of the three self-
propelled guns. (S CINCFE Telecon 5331, 5 Nov 51)
Comment: This engagement, the heaviest reported during the past
two months, is significant in that it is the second occasion that
Chinese elements have received armored support in the attack. The armor
utilized during this action were probably elements of the Chinese Commu-
nist 1st Armored Division located in this general area.
19. North Korean Premier thanks Chinese "Volunteers" fQr having
"achieved" their mission: In a 4 November Peiping broadcast, the text
of a message from Yo-4h Korea's Premier Kim 11 Sung to the "Chinese
People's Political Consultative Conference" was released. Kim tendered
his "warmest thanks" for the encouragement received from China, and in
speaking of the feats of the Chinese "Volunteers" in the Korean war he
noted that "they have victoriously achieved the glorious mission assigned
by the Chinese people."
He added, however, that "with the militant aid of the Chinese
People's Volunteers, the Korean People's Army will assuredly defend the
unification and independence of their own country.... (R FBID Ticker
Peiping, 4 Nov 51)
Commen While this broadcast is of particular interest in that
Kim uses the past tense in referring to the mission of the Chinese
"Volunteers" in Korea, the obscure statement that they would continue
tc "defend the unification" sheds no further light on ultimate Chinese
intentions in Korea, Chou En-lai has recently stated that the Chinese
must be prepared if necessary for a "long-term struggle" in Korea.
20. Russian-born Korean named Vice Premier: Ho Ka-i was appointed
Vice Premier of the Cabinet of the Democratic People's Republic of Korea
on 2 November by the Presidium of the Supreme Peo le's Assembly, accord-
ing to Radio Pyongyang. (R FBID Ticker, 4 Nov 51
Comment Ho Ka-i takes the .lace of Vice Premier Kim Chaek, who
was a war casualty some months ago? He is believed to have been born in
the USSR and to have dual cit-_zenship. His highest official post to date
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has been that of Vice Chairman of the Central Committee of the North
Korean Labor Party. One of the few Koreans rumored to have free access
to the Soviet Embassy in Pyongyang, Ho's political star appears to be in
the ascendancy.
21. JAPAN. Korean-Japanese talks reach impasse: The US Political Adviser
reports that the Korean-Japanese taJils have reached an impasse over the
Korean request that special privileges be accorded to Korean residents in
Japan after' they attain alien status. The Japanese Foreign Cffice has
indicatedthat it will be difficult to continue the --Elks if the Koreans
insist on a status which the Japanese consider extra-.territoriality.
(C Tokyo 932, 3 Nov 51)
CioRlment: In a letter to Ambassador Dulles on 26 October, the head
of the Korean delegation complained that Japan was deliberately delaying
consideration of outstanding problems until Japan achieves full sovereign-
ty. The Koreans, mistrustful of Japanese intentions and mindful of their
former status as "second-class" citizens, apparently are seeking guaran-
tees of special treatment which the Japanese are determined not to give.
The Koreans probably also fear a wholesale deportation Of indigents and
other undesirables, despite Japanese assurances that deportation would
be applied only to "leftist troublemakers." A breakdown of the current
talks will be an unfortunate beginning for Korean-Japanese independent
25X1 relations, which are certain to be tenuous for several years.
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SECTION 3 (WESTERN)
1. GERMANY. USSR apparently seeking four-power discussion of Berlin trade
problems: East German trade officials have told their West German counter-
parts that they are now forbidden by the Soviet authorities to discuss
restrictions on West Berlin trade. The East Germans admit that this marks
a definite change in the Soviet position.from the time the interzonal
trade agreement was signed on 20 September. They declare. that the re-
strictions-can-now be. discussed only on a four power level.
The Western Allies are prepared. to open trade discussion with the
Soviet authorities, but only after suspension of the interzonal trade
agreement, a step on which Chancellor Adenauerts views are awaited.
West Berlin officials, claiming that economic difficulties are begin-
ning to be evident in Berlin, believe that immediate steps should be
taken to increase the airlift of exports. Meanwhile, confirmation has
been received that the Rothensee canal lock in East Germany has been
opened, removing one of the obstacles to barge traffic from Berlin.
(S Bonn 308, 2 Nov 51; R Berlin 672, 3 Nov 51)
Comment: At the signing of the interzonal trade agreement, the
East Germans made an oral pledge that certain devices to harass Berlin
trade would be abandoned. Prior to this time, they honored this-promise
only to the. extent of reducing the tax on truck traffic to Berlin. If
the Soviet authorities have now denied the East Germans any jurisdiction
over trade. restrictions, the purpose might be to give the USSR a free
hand to use the restrictions as one of several levers to impede progress
toward the integration of Germany into the West, and particularly to
force four-power negotiations on this issue.
The Rothensee canal lock, now open for. the first time since last
January, will not be of much immediate use to the West, as the canal
is normally closed because of ice by mid-December.
2. FRANCE. French succeed in having German EDF. contribution reduced: At
Me i stigation of the French and with German.. approval, the European
Defense Forces Conference has agreed to reduce from 18 to 12. the number
of German units (groupements) to be contributed to the EDF by 1954. The
French argued that the total cost of 18 groupements with appropriate
supporting forces amounting, according to NATO estimates, to about 16
billion dollars, would be so great as to create fears that the EDF would
not be built at all.
The SHAPE observer at the conference stated that his organization
could not modify its estimate of military requirements, but that it
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would have to accept the conference's decision on national financial.
capabilities.
The French are influenced in part by the serious balance of pay-
ments crisis, which they are convinced will compel them to curtail their
own defense program even more than they had thought a short time ago.
(T5 Paris 2585, 1 Nov 51)
Comment: The European Defense Forces plan was intended by the
French as a means of preventing a return of German military ascendancy
in Europe. The French are looking for ways to insure that, aside from
contributing.a number of units equal to their own, the Germans make an
additional financial contribution to Western defense which would com-
pensate for France's naval and overseas commitments benefiting this
cause.
FRENCH MOROCCO. Public disorders attend 1 November election: Disorders
a'ccompanied strenuous French efforts to get out -he few Moroccans eligi-
ble to vote in the l November election. Eight persons were reported
killed by police and 500 arrested. Further disorders are said to be
planned for 6 November, the date of the opening session of the UN General
Assembly. (C Casablanca 26, 2 Nov 51)
Comment: The nationalists had asked the few enfranchised natives
to boycott this election of 21 delegates to the advisory, 151 member
Council of Government, but probably did not propose any demonstrations
or disorders. Although disturbances may occur on 6 November, or the
national holiday on 18 November, the nationalists probably would not
jeopardize their case before the UN by inciting disorders.
Expulsion of Bourghiba from Tangier may increase
nationalist agitation: On 2 November the international police in
Tangier expelled Habib Bourghiba, Tunisian nationalist leader, who had
arrived the day before on a private visit. The US Legation in Tangier
considers the expulsion a hasty and ill-advised action because it may
furnish grounds for renewed political agitation. (C Tangier 168 and
169, 2, 3 Nov 51)
Comment... Although theoretically an international administration,
the International Zone of Morocco -Tangier- is dominated by France,
which in fact controls the police. The Moroccan nationalists have re-
ceived further grist for their propaganda mill,.and the Arab League
nations will probably use the expulsion in presenting the Moroccan case
to the UN General Assembly.
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mats to support French banking
6. French use occupation rece
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Austria's nationalized bank, the Creditanstalt, verifies that the
French Government is using schillings received from the Austrian Govern-
ment as occupation costs to indemnify French banks for losses incurred
in Austria's 1947 monetary conversion. The French are also reported to
have utilized 25 million schillings of occupation receipts as a deposit
to purchase an equity interest in the Austrian Laenderbank. (S Vienna
1592, 1 Nov 51)
Comment: US authorities. in Vienna have strongly resisted French
and British demands that the Austrian Government should increase its
allocations of funds to cover the costs of Allied occupation in Austria.
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made a serious mistake in the recent grant of wage concessions to labor.
As a result, he expects further strike threats from labor in January.
(C Brussels 619, 2 Nov 51)
Comrment: An influential Belgian Cabinet member has stated that the
recent turmoil" over the present government has died down, although
criticism of at-least one of the ministers continues to be severe. He
also stated that the present plan is to go before Parliament with the
government unchanged, even though the Chamber of Deputies has not specifi-
cally assured this particular government its support.
Ever since the conclusion of laborts successful campaign for wage
concessions, it.has been rumored that some changes would be made in the
composition of the Belgian Government. .
NETHERLANDS-BELGIUM. Schuman Plan is ratified by Dutch Parliament:
Dutch participation in t e Schuman an was approved on 31 October by an
overwhelming majority in the Lower Chamber of the Dutch Parliament, with
only the Communists in opposition. Thus the Netherlands becomes the first
European country to obtain parliamentary approval for the plan. The Dutch
Economic Minister attributes this early adoption to "good coordination be-
tween the government, parliament, and industry." Moreover, a great ship-
ping center, the Netherlands stands to profit from the consolidation of
industrial commodities like steel and coal.
The Belgian Foreign Minister is not optimistic that the plan will be
accepted by the Belgian Parliament and charges the opposition with tthiding
behind the constitution" as a pretext'to defeat the plan.. (R
C ment? The Dutch have consistently endorsed the Schuman. Plan as
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om r
a valuate contribution toward a federated Western Europe. The French
Assembly, which reconvenes 6 November, is expected to give early.and
favorable consideration to the plan.
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Comment: Certain Western observers have suggested that Italy's
chances for obtaining UN membership at the present time are slight.
11. Government refuses to permit neo-fascist national congress: The
Italian Interior Ministry has refused the request of the neo-fascist Italian
Social Movement for revocation of a year-old ban against the party's hold-
ing a national congress.
US representatives in Rome comment that the refusal of the Christian
Democratic government to weaken its stand against this group is motivated
by opposition on principle to neo-fascism and perhaps by fear that the vote
for the Italian Social movement may grow, particularly in southern Italy.
(S Rome Joint Weeka h4, 2 Nov 51)
Comment: The Sicilian elections in the spring of 1951 gave the neo-
fascis s the balance of power between the Christian Democrats and the Com-
munists. Partly because of the gains by the two political extremes, the
Italian Government recently postponed elections in southern Italy from the
fall of 1951 to an uncertain date, now planned for the spring of 1952.
12. Communists try new tactic to force cooperation from anti-Communist
labor unions* The leadership of the Communist-dominated General Labor Con-
federation CGIL) has stated that if the government lowers prices 15 percent
within one month, the Confederation will forego its recently announced de-
mand for a general 15 percent wage increase to offset the rise in the cost
of living. The US Embassy in Rome comments that the CGIL's change of policy
is a clever tactical move in an effort to force the anti Communist unions to
join the drive for higher wages. (S Rome Joint Weeka 44, 2 Nov 51)
Comment: The anti-Communist unions had opposed the CGIL's previous
'demand for higher wages and advocated instead a reduction in the cost of
living through lowered prices. In addition to this switch in the CGIL's
position, a development that will exert even greater influence in promoting
unity of action among all the unions is the stringent anti-strike bill re-
cently approved by the Cabinet and due for parliamentary consideration dur-
ing November.
I a _ Cnr.O IA _ Abell a lPaves Communist Party in protest: Pedro J. Abella,
h
t
as
y,
member of the National Directorate of the Colombian Communist Par
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left the party in protest against Secretary-General Vieira's policy of not
supporting the Liberal guerrillas. Abella is reportedly recruiting ad-
herents for a separatist group made up of party members and leftist Liberals.
(C Bogota 328, 2 Nov 51)
Comment: The Colombian Communist Party has been numerically insigni-
ficant and extraordinarily unattractive to Colombians for years. Abella's
policy, if carried out intelligently, would greatly increase Communism's
appeal in Colombia, although it may well result in severe repressive measures
against party members by the Conservative administration:
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SECURITY INFORMATION
6 November 1951
CIA No. 49417-A
Copy No.
49
S/S CABLE SUPPLEMENT
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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SECURITY INFORMATION
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SECTION 2 (EASTERN)
1. CHINA. Communist Chinats vulnerability to stricter economic controls
estimated: The US Consul General in Hong Kong declares that the Chinese
Communists would be squeezed much harder than they are today if US-type con-
trols were adopted and strictly enforced by all UN member nations outside
the Soviet bloc. Such controls, he states, would not have an early effect
on the ability of the Chinese to wage war in Korea on the present scale,
since the USSR would undoubtedly make a strong effort to make up for the
loss of non-Orbit supplies. Nevertheless, the Chinese urban economy would
be strained, and there would be increased dissatisfaction with the Korean war
and with Peiping's "lean-to-one-side" policy. (TS S/S Hong Kong 1634, 3 Nov
51)
Comment: The Consul General has previously estimated that current
Western controls have as yet had no especially adverse effect on the Chinese
economy as a whole. The US-typo controls he envisages would meax. a cessation
of all shipments to Communist China -- not merely a. UN-type embargo limited
to strategic items. In addition, they would include a ban on merchant ship
sailings to Chinese Communist ports. Britain and other Western European
countries have indicated their unwillingness to bar their merchant ships from
the China trade; nor are they willing to ban the export to China of so-called
non-strategic items.
SECTION 3 (WESTERN)
2. ITALY. Government delays-compliance with certain provisions of peace treaty:
The US Ambassador in Rome has stressed to the State Departnre nt that the
Italians by delays and inaction are failing to comply with Articles 78 and
83 of the peace treaty, relating respectively to UN property in Italy and to,
the settlement of disputes between a UN member and Italy by a Conciliation
Commission, The Ambassador believes that as soon as agreement is reached on
the Italian note requesting revision of the peace treaty, the Italian
Government should be told "in the strongest terms" to expedite the processing
of claims and to agree on the appointment of a third member to the
Conciliation Commission. (S S/S Rome 1977, 2 Nov 51)
Comment: Italy has also stalled on the matter of reparations to certain
UN members. It has taken no steps to initiate payments to Yugoslavia,
Ethiopia, or Albania.
6 Nov .5l
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