DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000500270001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 26
• Document Creation Date: December 22, 2016
• Document Release Date: March 29, 2012
• Sequence Number: 1
• Publication Date: November 19, 1951
• Content Type: REPORT

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1.9 November 1951
CIA No. 49431
Copy No. 143
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.
iiUll T1 AAC4VES & MUDS QA1kA
' 11DIATELY Af TER USES
JQE 1q T l / # I N K __. 5_?.
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C 297Is_,
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SECTION 1 (SOVIET)
1. USSR. New Soviet Ambassador appointed to Mongolian People's Republic:
On 14 November Pravda announced the appointment of G. I. Ivannikov
as Soviet Ambassador to the Mongolian People's Republic. Ivannikov,
former Deputy of the USSR Supreme Soviet from Turkmen SSR, will re-
rlace Y. K. Prikhodov, who was appointed in 1948.
gleeful and wideapre
even when it hurts.
Comments At this time no special significance is attached to
the appointment of Ivannikov, who reportedly was last serving as
Charge d'Affaires in Ulan Bator.
2. CZECHOSLOVAKIA. Premier Zapotocky scores trade unionss In a recent
speech Premier Zapotocky vigorously condemned several trends among
workers which the Trade Unions had not tried to correct. He de-
nounced a demand on the part of the workers for wage equality and de-
clared that wages in Czechoslovakia are to be geared to the nature
of the production and used as a lever to get more production from the
workers.
Zapotocky scolded the trade union personnel for their "unfriendly"
attitude toward "shock work" and their neglect of it. He also con-
demned abuse of the health insurance system, which he said had led to
an increase in absenteeism. In the present production crisis, the
Premier said, damage to the workers' health is not so serious as
economic damages to production.
The US Embassy reported that the speech was the bitterest yet
addressed to Czechoslovak workers and that the published version was
considerably softened. The public reaction is said to be particularly
3.
Commeata Emphasis on the overriding importance of production
results from the failure to meet the third quarter plan in mining and
industry. The emphasis suggests a more rigorous application of Soviet
trade union methods in the future exploitation of the working class.
RUMANIA. Pesumption of Yugoslav border evacuations reports a A British
Zone Austrian newspaper on 1 November reported that Rumanian authori-
ties had resumed wholesale evacuation of the Yugoslav border area.
The article indicates that the Rumanian objective is the creation of
1 19 Nov 51
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2 19 Nov 51
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a"broad no manes land" along the entire frontier. Attributing the
information to reliable sources and eyewitnesses,'?the:account+1 states
that the Rumanian authorities have already con4atenced the destruction
of evacuated villages and the building of field fortifications.
Comment- Although there is no other confirmation of these re-
ports, it is probable that the Rumanian Government has resumed evacua-
tion of unreliables in this strategic area, although not on the scale
indicated by the definitely "alarmist" Austrian newspaper account.
In June and July an estimated 20,000 to 30,000 border inhabitants
were removed largely to inland farming areas. Since the inhabitants
of this area number at'least 600,000, it is not likely that the govern-
ment would be satisfied that all undesirables had been weeded out by
the earlier evacuation.
YUGOSLAVIA. Tito analyses the Korean armistice negotiations-. In a
conversation with US Ambassador Allen concerning the Korean negotia-
tions, Marshal Tito stated that the Soviets in any negotiations arouse
expectations to a point where an agreement seems imminent, then re-
fuse to conclude it and attempt to throw the blame on the opposition,
for failure. Allen says that Tito regards this tactic as part of the
war of nerves, the ultimate aim being to break the opposition through
a succession of shock treatments designed to keep world conditions as
unsettled as possible Tito observed'-that the oni ' answ6i? to Gu:oh
tactics was "to refuse to yield an inch."
Comment- While Tito is apparently convinced that no permanent
settlement with the USSR is possible, he, as well as the Yugoslav
delegates at the UN, has stated recently that the USSR wants a global
settlement with the US on the basis of a division of the world in
spheres of influence.
Although the above views may appear to be contradictory, this
phenomenon is probably a reflection of continuing Yugoslav fears that
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the West might possibly "make a deal" with the USSR which would leave
Tito to the "not so tender mercies" of the Kremlin.
5. Yugoslav offers UN ro osals to ease Balkan tensions: The Yugo-
slav UN resolution to ease tensions in Bu t the recommends that
the governments of the USSR., Hungary, gaalks
Czechoslovakia, and Poland:
1, modify their attitude towards Yugoslavia in accordance with
the spirit of the UN Charter;
2. normalize their diplomatic relations with Yugoslavia; and
3. settle possible border disputes by means of mixed border-
commissions.
The US delegation has been advised by the Yugoslavs that they are
ready to support a proposal, if made by the US under the Yugoslav
complaint, for the establishment of a UN Peace Observation Commission
sub-committee for the Balkans which would sit in New York and be
ready to provide observation on the request of any Balkan state.
To support its general complaints against Soviet pressures, the
Yugoslavs charged that its neighbo were maintainin 2 of their 53
divisions on the Yugoslav border.
Comment. The Yugoslav indication of willingness to support this
type of a POC group is in line with an earlier Yugoslav proposal that
the POC should not be identified with Yugoslavia specifically but,
serve as a watchdog for all the Near East including the Balkans.
Foreign Minister Kardelj's references to 25 divisions on Yugo-
slavia's borders is either a gross exaggeration or the introduction
of a unique definition of a division. The figure is doubtless de-
signed to bolster the Yugoslav complaint. The best US estimate in-
dicates the presence of only 13 to 15 divisions on the Yugoslav border
out of a total of 39 in Albania, Hungary, Rumania, and Bulgaria.
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SECTION! 2 (EASThaN)
1. GREECE. Greece su, es-!; abolishment of UN B :ik .n Commis aor The
GreekUN representatives in Paris have told US delegates that
Greece favors the abolition of the UN Balkan Commission without re-
placement by a new body and without the continuance of observers in the
field. Greece fears that continued UN supervision of its borders implies
a weakness and so jeopardizes its position in NATO. Greece., moreover.,
does not wish its frontier case to reappear on the General Assembly
agenda, especially since there is an almost complete absence of significant
frontier incidents,
D-Qmmgnt. Abandoning its original contention that the Commission
should be retained, Greece recently expressed itself as sympathetic to
the US view that the Commission should be replaced by a subcommittee of
the Peace Observation Committee withoi.it Soviet or Satellite members.
More recently, however, Greek spokesmen have been very critical of
the Observation Committee and expressed the view that the Committee was
worse than no UN supervision at all.
2. Greek u en s eks r oncil ation w Y Pnt~asoso The Queen of Greece,
in an interview with opposition leader Field Marshal Papagos, told him
that she hoped "'to clear the air by frank admission of things she said
against his. candidacy" and that Papagos and the King would "resume their
amicable relations of pristine days.' Later, the Queen informed the
Embassy that, she hoped new elections would be unnecessary, but if hev
had to be held, the country could not afford to let Papagos lose.
al-0 The Queens statement is the first clear indication that
the Palace is seriously considering supporting Papagosa Liberal-leader
Venizelos, the number two man in the EPEK-Liberal coalition, has been
optimistic recently over his chances of persuading Papagos to form a
Liberal-Greek Rally electoral coalition,- the Queen?s pro-Papagos speech,
if sincere, probably indicates the Palace?s realization that new elections
are inevitable and that the victory of Papagos would be preferable to that
of Plastiras unassisted by the Liberals.
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t o
--- -cent reports concerning
longing to the poor v w,tYou n
ETHIOPIA- Revolt in Ethiopia becomes more probable. The probability o
he overnmen o iopis is gradually in-
-? a O insurreo ion a.gains
Attache in Addis Ababa, The city's
such as
ents
according to the US Army
creasing
population has been further alienated by a au,charities?of?dilapidated , houses bem
the recent destruction by iotpce or r?ecompenseo
an armed
o occur a any Mme wi. hin a yearn The Military Attache
nece
~ar wea-
5 1 e
rev- y
&-d Forces the
?oohave
ime
t
points out that the Ethgupi ess
arevolutionat thepresen, +r,
p
Connent. This is the strongest or severe r in Ethiopia* While the few Corcanunist
the possibility of an arad, dnnbtedly capitalize on and probably abed any
6. INDIA- Press almost unanimousy ressswaSovle s thaCneeu~S peace plan
p
uS EI-Mons opinion of the Indian
or - ~nVVO.,.
recently the Pakistani Government did not allow i its
Comment. Until re Several Pakisani
nations s o travel in Communist~contralled countries- r the Comnunists and fellow-traveleft rachi on 30 edtobto e er fin Peipingna wre World Peace Councils and two Pakistanis
participating in the 1 October celebrations o
elerffints in Ethiopia wou an armed revolt would be dire- y
disorders accompanying a sudden coupe ossibly with the cooperation of
instigated by dissatisfied tribal groups,iet group of Ethiopians*
army elementst rather than by any pro-So
The US Ambassador i ,Addis Ababa regard ateiss igoingoonaanderiousmably
but feels that the Emperor must be aware
is taking appropriate steps-
ISTANo Medical delegation invited to the USSR. The Soviet Union has
P~ anon of six
iondt his year-laccordingstodaaKarachi broadcast
invited the All-Pa lc'Stan
Members to the Soviet
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offered nothing new and that it was bound to fail because it was based on
principles already rejected by the USSR. The press considered the Soviet
counter-proposal more attractive to India because it provided that Cam:
monist China must be included in all deliberations affecting Asia,
.7, INDOCHINA. Vietnamese Premier hails Bao Dai?s "abdication"4 A Saigon
newspaper which closely reflects the views of Premier Tran Van Huu has
editorially praised the "loftiest love of countr `t which underlay Bao
Dai's abdication in 1945,
Comment. Neither the French nor the Vietnamese authorities have
ever c arified Bao Dai's present relationship to the throne of Vietnam,
The question of his abdication in 1915--under some prodding from the Viet
Minh--is ordinarily taboo as a matter for public discussion, Its resur-
rection at this juncture is Huu's reply to recent criticism of himself by
General de Lattre. Huu is taking up the challange posed by De Lattre?s
recently-expressed approval of monarchy by appealing to the strong repub-
lican sentiment in Vietnam.
New clandestine radio attacks French and Viet Minh. Calling
itself "The Voice of the National,Resistance Front, a new radio station
apparently located in Central Vietnam inaugurated on 12 November a series
of vehemently nationalistic broadcasts in the Vietnamese and.Cambodie.n
languages. The radio attacks both French "oppression" and the Viet Minh
"plan to "sell the country to the Russiansq" and calls upon compatriots
to "engage in the ranks of our national army of liberation" and to prevent
Vietnam's "falling under the influence of either Russia or America," US
Legation Saigon is "almost certain" that these broadcasts emanate from the
dissident Cao Dai faction under Colonel Trinh Minh The, but states that
French mnnii-nrinoc officials are not entirely convinced that this is the
25X1 case.
Comment- Colonel The and 3500. troops under his command defected from
the arm= orces of the Cao Dai politico-religious organization in June and
stationed themselves on the Cambodia-Vietnam border west of the Cao Dai
headquarters at Tay Ninh, Some doubt has remained whether the central Cao
Dai authorities, who had recently been given the brush-off by the French,
were not accomplices to this "rebellion." In any case, it seems evident
that if this radio is indeed under the command of Colonel The, then the
colonel must have powerful allies in order so to, expose himself to the
enmity of both the French and the Viet Minh, It is perhaps significant
that although French colonialism is attacked the French-sponsored Bao Dai
government is not,
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9. INDONESIA. Netherlands' reply on New Guinea issue termed unsatisfactory:
The indone sian Government termed unsa is ac ory the 16 November not om
the Dutch Government concerning the mention of New Guinea in 'the Dutch con-
stitution. Foreign Affairs Minister Subardjo, now in Paris, has been in-
structed to request further information from Netherlands Foreign Minister
Stikker. The Indonesian Cabinet will make no decision until Subardjo's re-
turn to Djakarta some-time next week.
Two days before the receipt of the Dutch note, however, Djakarta pol-
itical circles were quoted as stating that, in view of the present inter-
national political tension,-a "breakdown of diplomatic relations between
Indonesia and the Netherlands would be impossible."
Comment- The 16 November Dutch note concludes the second round of
exchanges between Indonesia and the Netherlands over proposed revisions
in the Dutch constitution. The Netherlands note, which vigorously rejects
earlier Indonesian protests, states that the revisions do not in any way
alter the position of New Guinea as contained in the Dutch-Indonesian
agreements of 1949. Although Indonesian press and political circles con-
tinue to display hostility over the matter, conversations between Stikker
and Subardjo may be successful in reducing the tension currently surround-
ing the issue.
10. PHILIPPINES. Quirino undercuts Romulo: President Quirino on 13 November
appointed Ambassador lizalde as Acting Secretary of Foreign Affairs during
the absence of Romulo, who is in Paris for the UN meeting. Romulo is due
.to return to Manila on 22 November and Elizalde may replace him as chief
of the UN delegation.
Comment: Quirino has, in the past, indicated a complete lack of Con-
fidence n Elizalde. He has also at times shown some jealousy of Romulo's
international reputation, but as recently as last August Romulo anticiSated
that Quirino would appoint him Ambassador to the US, and assume the Foreign
Affairs portfolio himself.
25X1 11. CHINA,
moor torpedo boats-,
activity at Chinese Communist ports: Eleven
harbor (near Tientsin) in late October,
speed of these ve0sels was about 20 knots.
long,
icing at Taku
The
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In mid-October, the ship yard at Dairen was building barges and tugs.
In South China, little naval activity at
Swatow and Haikou, but a few gunboats and naval b a ks were reported orted at
Dane's Ieland near Whampoa (the tort for nton).
Motor torpedo boats have also been observed at Dairen and Tsingtao.
The Dairen shipyards are believed to be constructing these vessels.
12. Department of State seeks British agreement on bunkering vessels
in China trades The US Embassy in London has been asked to explore with
rj 1s z olc al is the development of an international bunkering policy
applicable to ships trading with Communist ports in Asia. The Department
proposes that oil companies should not bunker Soviet bloc vessels pro-
ceeding to or returning from such ports. Moreover, non-Soviet bloc ves-
sels should be refused bunkers by oil companies whose governments so re-
queste Such requests would be made if the vessels were carrying, embargoed
d violation of embargoes.
a
n
.
goods or had nreviously delivered strategic goo s
I
Comments Difficulties encountered by Polish vessels in securing bun-
kers rave -made more difficult their operation in Far East waters. Western'
flag vessels operating under Polish charter, however, have found less dif-
ficulty in securing bunkers from British oil companies. In many cases,
excess bunkers have been purchased by vessels in the China trade and then
resold to the Chinese Communists.
13. Communists get three more merchant shipso The Panamanian-flagve
ships 9 n 'ontesa
Morelia
Moeena p1e
reportedly been sold to the "China cean ransport'ation Company.
new owner may be connected with the recently formed Sino-Polish Ocean.
Transportation Company, i t 'Dint-stock com an with offices in
Tsientsin and Gdynia.
Comments The "China Ocean Transportation Company'' is not identified
and may e a newly organized firm acting as a front for the Communists.
It is Communist practice to use dummy corporations which act as the nomi-
nal purchasers and registered owners of newly-acquired vessels. This use
of dummy corporations is an effective method for evading controls designed
to prevent the sale of merchant ships to Communist countries.
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s
considering processing crude oil at the g
re-exporting the refined products to non-Communist areas. The proposed plan
d ?1 a month to Kaohsiung-
of
Greater use of Formosan refinery considered: Because of a worldwide
shortage of refined products, major American and British oil companies are
ohsiun refinery in Formosa, and
g
to deliver up to .300,000 tons of cru e
has the capacity to process about
f
lnery
Comments The Kaohsiung re
80,00 tons of crude oil a month, but has been processing only 10,000 tons
a month for consumption in Formosa. Although storage facilities in Formosa
are limited, this proposed plan is probably feasible if the Western oil
companies remove the refined products promptly-
The Nationalists badly need additional revenues and will probably
welcome this proposal, which will pay them 100,000 to 200,000 dollars a
montho
the actual port operation ice-p ber
port customs, immigration, and police fall in e
41 b Chineseo
by
ve
l
ing, communications responsibility, etc-) is Soviet-controlled- The har-
bor master is Russian. The main signal tower is completely manned and
operated by Russians., and the signals from the tower follow standard Soviet
procedure.
The administrative phase of the port, however, is wstlat?velnetu- and.
y
us
ire manned and controlled exc
Comments in allowing the Chinese control of administration in Dairen,
the Russians are following explicitly the provisions of the Sino-Soviet
agreement of February 1950. The agreement also safeguards, for the next
few years at least, the controlling position of the Russians in port opera-
tion. Recording to Article 3 of the pact, "both contracting parties have
.agreed that the question of Port Darien must be subjected to examination
after the conclusion of the puce .treaty with Japan.".
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190 Communists seize UN-held islands off northwestern Korean In a 15
November night attack" a. Connunist amphibious force estimated at 800
Chinese Communists and 200 North Koreans,, possibly supported by minesweeper-
type craft" captured Tan-do, an island off northwestern Korea held by some
200 UN guerrillasp A report of 8 November states that an enemy force was
moving towards another island in this k cale.,
FECOM observes that enemy action against these islands was initiated
as early as 21 September. Since that period the enemy has occupied five
or six small islands previously held by the UN and has initiated at least
two attacks by air against friendly partisans.
FECOM believes that this enemy action is designed to improve their po-
errilla and es-
u
l
ize g
sition at the cease-fire conference, and to neutra
pionage bases. Regarding the f ormera the UN has offeried to evacuate these
t concessions.
i
s
sands as a uid pro quo for Commun
Comments Of equal significance is the demonstrated enemy capability
to con uc a successful amphibious operation in an area where previously
UN naval and air superiority would have made such an action hazardous.,
206 Chan es in US-ROK tungsten agreement ascribed to South Korean
lti ersensitiviit Severe changes in the S ROK wigs en agree men of 6
November have been suggested by the ROK Governments according to the US
Embassy in Pusan. Ambassador Muccio states that the changes are "incon-
sequential" and interprets the ROK attitude as part present hypersensi-
tivity on matters appearing . to derogate their sovereignty." The ROE
wants deletion of the word "supervision" wherever it appears; however,,
Muocio says they "will acce in practice but dislike writing
"
this into the agreement.
Comment. This is another manifestation of the touchiness of the
ROK m=aters which they think impinge on their political independence.
The tungsten agreement as envisioned by the Materiel Production Authority
of the US Government will expedite and maximize the production of tungsten,
which is in short supply in the US.
21 JAPAN. Peace treaty and security pact are ratified by Japans Following
fist Upper House passage of the "panes., sacs Treat and the US-Japan m
Security Pact on 18 November by votes of 174 to 45 and
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the
ent immediately called an extraordinary ec meofsession fici 1 on
the Governor b
th documants* Ratifica.t .on b
to bath documents
b
o
o
Cabinet and ratified
Cabinet
19 November when the Emperor affixed d h25 isN fficial seal
19
--- +-n wA.ghinF-ton
ific by the US and a
ation
rat
Comment- Following Japan's approvals
major ired in order to make o those Far Eastern Commission nations which attended the an
Francisco Conference is still r q
effective.
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SECTION 3 (WESTERN)
1. FRANCE. Foreign Office seeks to tighten administration of ex ort controls:
e Frenc Foreign Office has expressed serious concern over a recent
"startling" example of maladministration in the Finance and Economic Affairs
Ministry, which permitted strategic hydraulic press equipment to be exported
on an "obviously fraudulent" export license application and without a
destination control check. The US Embassy in Paris has proposed that an
official note be sent to the Foreign office expressing US concern over such
negligence. Foreign Office officials have privately indicated that such
a note would support their efforts to improve the regulation of exports.
Comment: Although the French have insisted upon their right to export
limited qua of critical commodities to the Orbit in exchange for
"vital" imports such as grain and coal, their attitude has been increasingly
favorable to US policy and legislation on East-West trade regulation. In
view, however, of the developing crisis in French dollar resources, French
resistance to tempting offers from Eastern Europe is likely to be lowered.
2. Communist-led strike cripples French economy: The American Embassy
in Paris sees no early solution for the serious strike by which French
Communists are obstructing the strategic French coal industry. The govern-
ment has shown no willingness to back down while such a large-scale strike
is under way, and it now seems likely that the walkout will spread to the
important Saar and Lorraine basins. Despite the opposition of Socialist
union leaders, the Socialist locals have been unable to withstand the
pressure from the rank and file and have joined the strikers.
By curtailing medical benefits which French miners have enjoyed for
over 50 years, the government precipitated the strike and presented the
Communists with a perfect situation to exploit economic grievances for
political ends.
Comment: Premier Pleven has described the 1951 coal shortage as the
greatest problem currently facing France. The government has recently
declared its intention of curtailing coal imports.from dollar sources.
Even with their current imports estimated at over 15 million tons for the
year, the French are stall unable to lift steel production over 85 percent
of capacity. The loss of as much as one week's production will be a serious
blow to.the French economy.
In view of the speed with which this strike has mushroomed, the govern-
ment'can be expected to offer an early compromise in order to prevent a
greater loss to the defense effort.
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French Communist Party waging ress offensive: The French Communist
3, promotion campaign in
party on November inaugura e a one-mont press p
an effort to combat the press Bill q Which,, pass by Cuncil of the
~immunitydbeh ndewhich Communist
F,epublic, Will eliminate the parliamentary
editors have been hidings
In a ''major report," the party's Secretary of Propaganda strongly
emphasized the financial difficulties of the party press and admitted that
these are aggravated by insufficient circulation, The circulation of the
official party daily, L'H , for example, has fallen to one-quarter of its
peak in- 1946. The party will launch a drive to increase circulation and
reduce the l2-million-franc debt,
Comment-. This "press offensive" by the French Communist Party reveals
party concern over the consequences of the Press Bill, Although whch icstwas passe i
the National Assembly by an overwhelming vote. s
oriented French newspapers have
increasing cost thelabored yandetheaexpense
newsprint and new equipment,
of tys strength the depended have lshown bility of theaparty
party strength p
press to slant current news items, Morocc 4. Arab states tentatively offer e to letnetheral Assembly ~avetind Gated
The Iraqi an Syrian e ega es o the
Morocc that they are not anxious to agree a~oatheFinclusionaoflthesitem on the agendaan
situation. If France will
for this session, the Arabs will not press for its consideration, The Iraqi
d
delegate also implied that, if France wousd1assuuree the Ara s of states goomight
Arab
25X1 intentions and plans r v c ndi oro
let the matter rest,
Comment-. Iraq, together with Egypt, has led the attack on France's
active ies and policies in Morocco official Iraqi opinion has not, however,
been convinced of the merits of discussing the case at this time,
Regardless of the Arab position,, France may not be faced with a UN
discussion n of Morocco aetheoUN sufficient postponement of
presently available to overrule
a discussion.
Tunisians seek greater governmental responsibilit A formal request
for addi ion native p ar icepation in e government o Tunisia is under
assembly, office. Demands
study French
temporarily withclimitedepo ersy creation
Tunisian an legislative eme
emplo of a wholly Tunisian cabetsTh and replac
s eepings
arenunlikell toemakench
in the Tunisian Government,
concessions to native demands.
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including the prime Minister and
Comment; The Tunisian delegation,
nis er o Justice, has been in Paris for a eodissmonti with ection-
Miwith this petition- The natives geneY and are increasingly
effectual French reform program initiated last spring,
insistent that natives share in the country's administration-
rests in Tunisia, however, strongly oppose even the
Vested French interests ressure upon the French Goverment not
present reforms, and are exerting p co romise might cause
mp
to alter the .status uTun Sian Cabinet members and Would set, off anti-
the resignation of the
French demonstrations and disorders-
oval sought for barter agreement with nze stSlov iradeT(CCC OM) o 6. ITALY- AP the coordinating Committee for the exchange
Italians are re pressing agreement which provides mainly
roval of a barter ecial steels, coal, cell pSe9
for the app against Czechoslovak special now embargoed,
of Italian ball bearings ercent of the ball bearings are types
and other goods, StY P their deliveries were made prior to the
but private contracts covering
COMOM embargo. defending barter agreement on the basis that
The Italians are h counte art deliveries are raw materials essential
to percent of the Czech that such raw materials are in short Supply
o--Czech trade may ort of certain
VQesto and that a rupture in It delay would compromise thetexp
is not aPProvedd Because further
the Italian Dover e
t
s,
seasonal Italian produc
he re
implement, part o
osition
This situation, in essence, highlights the difficult p result of h- Italians find themselves as a of coal,ewheat,k of natural
Comment;
in w manganese,
resourcese In return for important quantities the Italians feel they
the of strae gi btems
and other raw cmaterials from ertain minimum
must export a probably presented this agreement for COCOMas approval
The Italians have onomic aid under the terms of
to prevent any possible termination of tattle Bill. This bill req
m unless an
shipments of strateg uires termination of aidommwhethereor not
the B s Products were made under prior
i
Lists of shipments are to be compiled by
d
-
grante
exception is
26 November 1951.
olc aims: The
n
i
g
ainst Soviet fore
ainst
7d Italian NATO De uty warns ag ovieperi ism warns ag
Italian Depu Y o NAT in a iscussion o '' 11111111::1 ;;-nd `7
viet proposals for a five- ewer c
S
o
being taken in by
anda campaign-
a vigorous counterpropag
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Comment: Italy has consistently urged a more vigorous counter-
propagan a campaign by the West against the Soviet bloc. Last spry the
Italians suggested that a five-power meeting be held. Their warning
against such a meeting at this time can only be interpreted to mean that
they do not think any serious effort will be made by the Soviet Union. to
lessen world tension.
8. Long-term joint US-Italian develo ment of Somali.oil resources in
-term ' ~ en
doubt: For e pas year or so t e Sine a r Oi Corpora ion as
ne~ gotiating with Italian authorities over a concession for the exploitation
Two
of petroleum resources in the Italian Trust Territory of Somaliland. aTwf
factors are preventing the conclusion of ano agreement: (1) with the d esire
the Italian State Petroleum Agency (AGIP) participate unir the
Oil Company on a fifty-fifty basis, and (2) the fact that Italy,
UN Trusteeship arrangement, will have authority in Somaliland for only a
ten-year period, The Department of State is informing both parties that
develop
there is no assuraewothat uld beyhonoredlafteragreement
trusteeship ends.
Somali, oil resources
The Ethiopians are interested in these developments r owenand theucon lusion
is prospecting along the Ethiopian-,Somali or
of Sinclair-Italian agreement to develop Somali oil facilities could also
Ethiouia to the sea
facie itata the pitain~' of oil from
in every practicable phase of the
Comment: The Italians are deve op g period their economic
Somali ec-onomyso that at the end of the trusteeship p
hold on the country will enable them to exert considerable influence on the
succeeding government.,
9. Christian Democrats face possible isolation in labor field: The
Confederation o Labor Unions (CM), whit recen ly he i s na ional
congress in Naples, may be confronted with serious organizational diffi-
culties because of complaints by democratic Socialists that too few of their
representatives were elected to local executive bodies in the pre-congress
provincial and category CISL conventions. The Socialist member of the CISL
secretariat has stated that his followers will decide asCIoL urtherPastore chief
adherence to the CISL after the close of the congress. O to O
is planning to increase his organization's directing body
members so as to permit larger Socialist representation.
f the democratic Socialists from the CISL would
Comment: Withdrawal o
leave e Christian Democrats as isolated in the labor field as they now
are politically and would make more difficult the formation of a united.
anti-Communist labor front,
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10, SPAIN. Additional Cabinet changes ma occur. Persistent rumors circulating
in ans po itica clrc es indica e a Franco may be considering further
changes in his Cabinet in the near future. The changes made last July were
rumored to be only partial and to be followed by removal of those Ministers
held over from the previous Cabinet. According to current speculations and
reports, the Ministers most likely to be removed are Labor Minister Giron,
Interior Minister Perez, and Foreign Minister Martin Artajo.
A number of Cabinet Ministers and other important political figures
are known to have been endeavoring to undermine Giron and to persuade Franco
to fire him. Moreover, Giron's political ambition and his suspected part
in fomenting discontent among extremist Falange elements have undoubtedly
made Franco suspicious of him. On the other hand, Giron, who has held his
post since 1941, is practically the only Cabinet member with any popular
labor following,; he is quite likely to be retained for this reason if for
no other.
Perez and Franco are reported to be antagonistic toward each other,
Perez's removal, following the municipal elections in late November and
early December, seems possible. Martin Artajovs failure to obtain a
Concordat with the Vatican has long annoyed Franco. Relations between Franco
25X6 and the Foreign Minister are currently reported to be poor. Moreover,
Martin Artajo is pretty thoroughly discredited with Catholic Action, whose
interests he originally represented in the Cabinet. His removal appears
the most reasonable .ossihi1h of the three. Not unfriendly to the West,
Among those mentioned
as is successor is Jose equerica, now ass. or o the United States and
a Foreign Minister from 1914 to 19450 A wealthy rightist and one of the
first financial backers of the Falange, Lequerica was pro-Nazi during World
War II.
Although Franco may have certain Cabinet changes under consideration,
he may not carry them out, partly because of the difficulty of finding
suitable replacements There is no indication that if changes are made''.
25X1 the, will lead to moderation of the regimens political controls,
11. PORTUGAL. Supremacy of Portuguese Atlantic interests reaffirmed:, The
zrec or of e pro-government Lis on newspaper D1ario. e No cias, who
generally reflects the views of his close friend Premier as azar, as
publicly declared in Rio de Janeiro that while Portugal is attentive to
developments on the European continent, its real interest lies in the
Atlantic, not in Europe, The Portuguese writer and diplomat emphasized,
that Portuguese policies in the Azores since the beginning of World War II
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have been justified by subsequent events and constitute an important chanter
in the history of his country's sovereignty. 25X1
Comment.. The Portuguese maintain that now, as in the past., Portugal's
continued sovereignty depends on close economic and military ties with the
Atlantic powers. This conviction was reflected in the Lisbon government's
recently expressed opposition to schemes for a political and military
European union excluding Great Britain and the United States.
12. UNITED KINGDOM. British disturbed by course of Korean truce negotiations:
The US Embassy in London believes that Foreign Secretary Eden's 19 November
parliamentary statement on Korea will be helpful in giving "a-badly needed
explanation" to the British public. Their confusion over the issues at
stake, and doubt over the source of the obstacles placed in the way of a
settlement, is reflected in the press and "extends even into the Foreign
Office." Press comment has questioned in particular the competence of the
present UN negotiators as well as the accuracy and completeness of the
information given out by the UN Commander in Chief.
Comment: Left-wing criticism has also focused on the lack of any
British or Commonwealth representative on the negotiating committee; and
Prime Minister Churchill on 15 November evidently found it necessary to
reaffirm publicly the government's confidence in UN. leadership in Korea.
13. NORWAY. Additional Cabinet changes being made: Contrary to the request
of Me- now Prime Minister, Tour Ca ine Minis ers have tendered their
resignations. Defense Minister Hauge has announced his intention to
resign but will remain in office until January in order to participate in
scheduled NATO meetings. The Ministers of Fisheries,. Agriculture and
Finance have also resigned and their successors have been named. The US
Embassy in Oslo comments that the Cabinet changes will produce no changes
in Norway's foreign or domestic policies, and that the Defense Minister's
resignation in particular will not result in any change in defense policy.
Comment: Although no change in defense policy is contemplated,. it
is felt that actual implementation of defense plans may proceed more
smoothly, since Hauge had dragged his feet on many aspects of defense
programs. Haugets resignation is a logical development:, although
extremely unpopular in military circles and in disfavor With certain other
Cabinet Ministers., he has remained in office through the personal friend-
ship of the retiring Prime Minister. The resignation of Finance Minister
Meisdalshagen, who did not wholeheartedly favor the increased defense
expenditures backed by the rest of the Labor Party government, constitutes
the only other change of consequence.
18
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14. COLOMBIA. 'ewl acquired vessel will operate with UN forces:- Colombia
Has agreed to take possession o t e US Navy's patrol frigate Bisbee and
to man and operate it in the Korean theater for the duration of hostilities,
Colombia has had a similar frigate the Almirante Padilla, fighting under
the UN command since last May,
Comments: Colombia is still the only Latin American country to give
active support to the UN action in Korea despite strong representations by
the US to secure firm offers from other countries in the hemisphere.
16. GUATFPALA. United Fruit Company suspends discussions with government:
Following an exchange of communications concerning a possible oasis for
future United Fruit Company operations in Guatemala, company officials have
notified the government that the latter's proposals cannot provide the basis
for initiating discussions that might lead to mutually satisfactory results.
However,, the company indicated that it will be happy to "reopen negotiations"
if "after renewed consideration on the part of the government the situation
25X1 may change."
Comments; The United Fruit Company (UFCO), engaged in a contract and
wage isc' pz e with organized labor, announced in September that any increase
in operating costs would force it to withdraw from Guatemala., Its recent
request that the government guarantee certain conditions for continued
operation in Guatemala was met by a statement that the government would
agree to a proposal for renegotiation as recommended by "impartial experts
such as technicians of the International Bank." Such renegotiation would,
however, require modification of the operation of the UFCO wharves "for
the benefit of the nation," revision of tax exemptions "no longer
justifiable," revision and reasonable governmental control of contracts
between the UFCO and private banana growers, compensation to the govern-
ment for the exhaustion of the soil due to intensive exploitation, periodic
revision of UFCO contracts, and cooperation in the revision of freight
rates in the interests of national economy.
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Although the UFCO has rejected the government's counterproposals$ these
nevertheless provide a basis upon which negotiations can., and possibly; will,
be resumed. There is no convincing evidence that the company intends to
withdraw from Guatemala.
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P,
25X1
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19 November 1951
CIA. No. 49431-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 Office of Current Intelligence. primarily does
for the internal use of the
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. IRAN. Com licate!oliticl z.ntri ue continues; Britfor lcourtbap port
ports that the Shah recently discoz~?~~eedn~~~ day,hh?wever, he reportedly
in the effort to replace MossadegoThe British Embassy also stated
sent word of continued covert support.
Prim that the Shah asked Seyyid Zia~e~ anoer of Court Hussein,
forethat~lofficeaf
t'e latter would support Mines
eaof a,nti_Mossadegeopposition.
The US Embassy comments that organization
25X1 which cri les an effectiv
who has in the
thSah
ts that ,
omment: This report also sugges past bitterly opposed Qavam, is stilllllrties? concede that Qrsvaresde ld
past Mossadeq. Without^eal political p In the
pendent on personal prestige, unstable alliances and court desire to see Qavam replace Mossadeq has
present situation, the British
further complicated the situation.
n A British aide-
'ate CHINA. British rotest Nationali:st attack on hip_Lte attack on
memoire has been submitted to the Department of StateucitStar?,hen route to
30 September by a Nationalist -warship on the SS Plym released. Two
Shanghai. The merchant ship Ta?~k~nshandabdtthebWaisa.ng~yselzed by the
other British vessels i ..4-11 not been released.
The Department has been asked to use its good offices v I 25X1
a e f the vessels and to prevent further attacks.
25X1
American
the
1-14 t
o
Comment: The British are w-L 1
withdrawing merchant ships from 1 natrade1
and Hong Kong shipowners find employment of their vessels in this trade highly profitable despite the must risk
risks of Nationalist intercptien?d in collusion with sthesNation lists,
attacks by pirates, who may be operating crates near Shanghai
On 25 October, the merchant ship Hupeh was boarded by p
arship
h
ti
.
w
s
but was later rescued by a Bri
Chinese Nationalists re are cotee to rove mil;ate General Mao
the
Taipei 'reports tha N charges
` ai ,. .. _ _ .
against Nationalist Air Force General
committee. The committee will
ready for the proposed Sino-American inquiry
Hollington Tong, and probably Li Shih-fang of Yale.
be composed of Hu Shih,
Charles Edison will serge asaAmericans, representative. the Chinese Government
countered in finding two more
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hopes that Matthew Woll will consent to participate.
The report further states that an effort will be made to keep the
suit -- now pending in the US Courts to compel Mao to return the funds and
official records w1iI rah he nossesses -- separat? from she terms of reference
of the committee.
Comment: As a result of his charges that the Chinese Nationalist
Government had misappropriated US aid funds, General Mao'Pang-chu,
Nationalist Air Force purchasing agent in the US, was dismissed from his
post by Chiang Kai-shek in late August 51. Mao was accused of failure to
account for funds designated for the purchase of US military equipment, re-
fusal to hand over public funds, espousal of the cause Of disloyal staff
members, dereliction of duty, and undermining the governmentfs prestige by
spreading rumors.
A JAPAN Occupation comments on Kyoto students demonstration against
Emperor: The anti--Emperor demonstrations of 12 November by about 250 Kyoto
students drew from G-2, GHQ, the comment that there is as yet no evidence
of Japan Communist Party instigation, although the incident may represent
a revival of former JCP policies calling for abolition of the emperor
system. The Japanese press asserted on 15 November that the demonstration
was Communist-planned. G-2 believes the incident will strengthen the hand
of elements in and outside government demanding control of subversive
elements.
Comment: Three days later, on the eve of the Emperort's visit,
Communist anti-Emperor posters were scattered throughout the town of Otsu,
near Kyoto. This lends weight to the thought that the JCP is reviving its
anti-Emperor campaign, which has proved an extremely unpopular issue with
the Japanese people.
SECTION 3 (WESTERN)
5. FRANCE. French accede to American proposal on Austrian treaty: The French
Foreign office is reported to have substantially modified its attitude with
respect to the Austrian treaty and is now prepared to accept the eventual
introduction of an abbreviated treaty draft. The French feel, however,
that the text proposed by the US is still open to discussion. They also
feel that the West should make one more attempt to reach agreement on the
old treaty, and sh faith by considering further concessions to
the Soviet Union.
Comment: Inasmuch as the objections of the French to the proposed
shorter treaty reflected fundamental concern that the mechanism of treaty
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be disrupted, their concession on this point is
discussions might thereby
a considerable one. US preference for i.nmedi.ate presentation of the
abbreviated treaty upon reconvening the treaty deputies, however, has not
been shared by the British, French, and Austrian Governments.
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