DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000600030001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 25
• Document Creation Date: December 27, 2016
• Document Release Date: July 30, 2012
• Sequence Number: 1
• Publication Date: November 26, 1951
• Content Type: REPORT

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? No \???01
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26 November 1951
CIA No. 49435
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.
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SECTION 1 (SOVIET)
1. USSR. Soviet Union warns Middle East states a ainst adherence to Defense
Command: The Soviet Union,on 21 November, delivered analogous notes to
the Arab and Israeli missions in Moscow, warning against adherence to the
proposed Middle East Command.
Comment: This continues the recent pattern of Soviet protests
against Western defense measures.
The notes point up a new development in Soviet tactics toward the
Arab world in that heightened emphasis is placed on the USSRys positive
role of backing Arab interests and aspirations against the West. Equal
emphasis in the notes on foreign troops, loss of sovereignty and Western
_"exploitation" of national resources like oil and cotton is designed to
stimulate further the growth of neutralism in the area.
The several Arab governments will hardly change their essentially
anti-Soviet position at this time; nor is the note to Israel likely to
have any significant influence on the pro-Western Ben-Gurion government.
2. Soviet Unions decoration of Na..-obafliersn_edtedth
shooting down of US plane: The Moscow press announced on 23 November
that the Soviet Government had awarded two Navy fliers the Order of the
Red Banner for "exemplary fulfillment of their service duties."
Comment: This action recalls the granting of similar awards shortly
After the Baltic plane incident in April, 1950. At that time the same
decoration was awarded to four Soviet air force lieutenants "for excellent
fulfillment of their duty."
It is almost certaii that the present decorations were given in
connection with the missing US navy bomber which Deputy Foreign Minister
Gromyko claimed had violated the Soviet border 100 miles east of
Vladivostok on 6 November. As was the case in 19509 no details of the
actions meriting the award were furnished.
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4. USSR plans increased consumer goods outlets: Speaking at the Plenum
, of the Central Committee of the State Trade Workers' Union on 21 November,'
:Soviet Minister of Trade Vassili Zhavoronkov submitted data on the expansion
of trade and consumer goods output in the USSR.
. He said that some 600 large stores were 'opened in various cities of the
country during the first three quarters of 1951. The first half of 1952 is
expected to see the opening of 900 more -- 200 drygoods stores, 300 for
footwear, and 400 to supply ready-made garments.
Zhavoronkov further stated that special attention would- be devoted tO
the development of wholesale trade which is to be increased "at least 25 ;
percent.? Thirty-eight new wholesale distribution centers are to be opened,
and large establishments are planned for the industrial centers of the
Russian Federal Republic-, the Ukraine, and Byelorussia.
This year, the Soviet population is supposed to receive 20 percent ,
more meat, 24 percent more sugar, 24 percent more fabrics, and 40 percent
More furniture than in 1950.
Comment: With the graduallyincreasing mechanization of food pro-
cessing industries in the USSR, food supplies mill probably become more
plentifulv The scheduled expansion of wholesale and retail outlets en- ,
visaged,in Zhavoronkovve address is undoubtedly a reflection of the tre-
mendous unsatisfied demand of the Soviet population for consumer goods.
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5. YUGOSLAVIA. Soviet intention to evacuate diplomats from Belgrade reported:
Two Soviet trade delegates have left Belgrade for the USSR and the Yugoslav:
foreign office does not believe that they will be replaced, according to
an informant of the US Embassy. Before their departure, one of the dele-
gates reportedly told his landlord that the entire Soviet Embassy would be
withdrawn from Belgrade, except for one clerk who would stay as a watchman..
The landlord was also warned that although there was little danger of im-
mediate trouble Yugoslavia would eventually become another Korea.
Comment: There is no evidence that the USSR has revised its estimate
of the utility of its diplomatic post in Belgrade and is planning to
evacuate its remaining eight diplomatic representatives. Certainly, if the
USSR were planning to launch a military campaign against Yugoslavia it would
not advertise its intentions by such an obvious move.
6. Minister of Interior expresses interest in US assistance for Cominform
refugees: In a discussion with Ambassador Allen, Minister of Interior
Rankovic expressed interest in a suggestion that the US might help the Yugo-
slav Government in caring for Cominform refugees arriving in Yugoslavia.
Allen mentioned the efforts of voluntary private American organizations to
assist Cominform refugees and suggested that these organizations might be
willing as a first step to send food and clothing to these refugees in
Yugoslavia.
Rankovic agreed that the treatment of Cominform refugees was highly
important politically and promised to consider a proposal that a member of
his staff keep in touch with the Embassy on this matter.
Comment: This is the first time that a Yugoslav official has shown an
interest in obtaining US assistance in caring for Cominform refugees.
Shortly after the influx of Bulgarian refugees into Yugoslavia last
spring, the Yugoslav Government permitted Western correspondents to inter-
view a number of them, but Western officials have never been given access
to this potential reservoir of intelligence on the Satellite countries.
Because Yugoslav treatment of refugees has improved, the number of those
escaping across the border has increased in the past year.
7. Yugoslavia releases trade figures for January-June 1951: Yugoslavia
has released the following foreign trade statistics for the first six months
of 1951:
Exports totalled approximately 74 million dollars, and imports, ex-
clusive of foreign aid, approximately 108 million dollars. Compared to
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the same period of last rear, exports fill some 4 percent in volume and
imports fill 16 percent. This drop is attributed to last yearis serious
drought and to the structural changes in world markets arising from the
Korean war.
Exports of ores and foundry products rose 2.5 million dollars and of
timber products by 650,000 dollars. Food exports, however, dropped 20
million dollars. Imports from Austria and Germany fell off but those from
Britain, Switzerland, the US rose. Exports increased to Italy, Germany,
and the US, but fell off sharply to Britain, Austria, and the Netherlands.
By 14 November, Yugoslavia had spent approximately 44 of the 50
million dollar tripartite grant. Most of this aid was used to procure
coke, crude oil, pig iron and textiles.
124, 13 Aug 51)
Comment:. During the first six months of this year the Yugoslays ran
a 47.5 million dollar balance of payments deficit. A significant drop in
agricultural production, resulting largely from adverse weather conditions
in 1950 necessitated an emphasis on food imports and caused a decline in
the imports of other raw materials and semi-finished goods.
Largely as a result of increased defense expenditures, Yugoslav
financial officials have estimated an 84 million dollar balance of payments
deficit for the second half of the current fiscal year.
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SECTION 2 (EASTERN)
1. ARAB STATES. Arab offlaials fear return of_fargign_aplieres of
;1111mg=a The Syrian Army Chief of Staff has informed the Lebanese
Prime Minister that he believes the Middle East Command will result in
the re-establishment of foreign spheres of influence in the Near East,
and that under this defense plan France would again dominate Lebanon
and Syria.
According to the US Minister in Beirut, the Lebanese Prime MLnister
is disturbed over the possibility of his aountry's virtual return to
mandate relations with France. His concern has been aggravated by the
fact that French supporters in Lebanon have been saying for some weeks
that the Western defense plan would revive French supremacy in the
Levant.
agmagnIs Arab misunderstanding of the concept of the Middle
East Command9 as well as Soviet-sponsored propaganda, has encouraged
the rise of rumors that the Western defense plan is actually a cover
for the re-establishment of foreign spheres of influence in the Near
East. Anxiety over their national independence is probably one of the
important reasons why Arab officials have failed to give public support
to Western defense proposals.
2. IRAN. ,Xranians build National National Front spokesmen,
as well as the Iranian press and radio, are building up the impression
in Iran that American economic aid is almost certain. The US Embassy
in Tehran comments that it looks as if the Nation4 Front is trying to
put the US in a position where it will be extremely difficult to refuse
or postpone such aid without being accused of having made false promises.
The US may become the butt of Iranianresentlint" if the expected aid
is not forthcoming.
gslaw2D18 This campaign is in line with the Iranian tendency to lay
the responsibility for unsuccessful action on others. American failure
to grant the Export-Import Bank loan has already led to-accusations
that the US has joined Great Britain in an economic embargo of Iran.
There is a strong probability that failure to grant economic assistance
to Iran will cause the US as well as the British to be blamed for Iran's
economic difficulties.
3. PAEISTAN. Trade with Ja an i creases. Pakistani trade with Japan ,
'increased considerably during 19509 according to recently published
official Pakistani statistics. During that year9 Pakistan?s imports
on private account from Japan rose 273 percent over 19499 and Japan
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became Pakistan's second largest supplier providing Pakistan with about
16 percent of, its total imports by sea. Pakistan's exports to Japan also
increased to 11 percent of it total, making Japan the second largest-mar-
ket for Pakistani goods. The US Embassy in Karachi anticipates that Japan's
importance to Pakistan as a market for raw Materials and as asource of
manufactured goods will steadily increase.
kamolents. Unlike India, Pakistan has very little industry. Japan, in
its search for markets to replace those lost in China and Manchuria, may
well develop even closer economic relations with Pakistan. India, which
already ha e alienated certain political elements in Japan
will presumably find itself in economic competition with that
country more quickly than will Pakistan.
4, =A. gt&lid_11,-SkrnWitata?,-*N.gaRAA-Z1VtatoA912M?atAnatrtAtTAJALK2PAls
The Chinese Communists have approached the Nepalese representative in Lhasa,
suggesting revision of the Nepalese-Tibetan treaty of 1856. The Counselor
of the Nepalese Embassy in New Delhi stated that this move was anticipated
but that he believed Na al would not relincuish its ri hta of extr# attori-
ality in Tibet.
gammas. The treaty of 1856 gives Nepal an annual xabsidy from Tibet
of 10,000 rupees, the right to establish an Agency in Lhasa, the. right of
free trade-in Tibet, and-rights of extraterritoriality.- Its continuation
is presumably inconsistent with the dignity of the new Chiness7dominated
Tibetan GoVerhment, which- may be expected to abolish special Nepalese rights
whether or not the treatyis revised. Clarification by the Chinese of
Tibetan relations with Nepal will probably be followed by similaraction on
Sikkim, Bhutan, and possibly Kashmir,
5. INDIA. polaultuacktotW_QammO,R.Eltc...tr. According to the
Indian press, 37 of a total of 77 members of the Punjab Legislative Assembly
have resigned from the Congress Party and have joined the opposition group
led by Gopichand Bhargava, ex-Chief Minister of the Punjab. This group is
to be called the G4todhi National Congress. If two more members of the As-
sembly join it and give it AE absolute majority opposing the Congrvas Party,
Bhargava plans to request the power to form a new ministry in the state. He
i also reported, to be negotiating an electoral alliance with the ri htist
Bharatiya Jan Sangh and a powerful Sikh organization.
ammtgis Bhargava resigned from the Congress Party on 12 November be-
cause of displeasure over the candidates Chosen by its Central Election
Board to run in the forthcoming national elections. If Bhargava is able to
form a non-Congeas ministry in the Punjab before the elections are held, he
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may rally sufficient strength to defeat the Congress in that state. There
is no sign that the Congress Party will lose any ether state in India, how-
ever, and it may be expected to do its utmost to: prevent defeat in the Pun-
jab.
6. 10444. 15110-0,411 PMKTNAPe-01-2-0-11UE_GOMPAIt thrqUts Malcolm
MadPonald, the British Commissioner General in Southeast Asia, during a
recent visit to Rangoon attempted to Arouse the apprehensions of Buruese
leaders to the internal and external Communist pressures Which now seriously
menace their regime. He urged the Burmese to undertake strong measures to
defeat the Communist insurgents and specifically recommended steps to im-
prove the training and morale of tha Burmese armed forces and a settlement
of the Karen problem. MacDonald felt that Burmese -officials, Although out-
wardly responsive te his ideas, were not as concerned as the situation ap-
peared to warrant.
gmans It is doubtful that the Commissioner General has been suc-
cessful in shakingthe widespread Burmese complacency toward Communism and
stimulating Burmese authorities to more vigorous efforts tosuppress Commu-
nist activities. The continuing deterioration of the Burmese Government's
political and military positionwill tempt the influential proeCommunist.
faction of the Socialist Party to seek the removal of moderate leaders and
assume complete control of the government.
8. ITIMAILIA.
leele1VAleewaelere'Leteelgme?a Th a Under-
secretary of. the Vietnameee Foreign Office told press representatives that
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9.
the Vietnamese delegation to the forthcoming meeting of the High Council
of the French Union will request that Vietnam be represented in Peri by
ga:n Ambassador or at least a personage having the rank and privileges of
an AMbasaador.
gaammuts The High Council of the French Union consists of the three
Associated States of Indoahina and Franos and will hold its first meeting,
attended by General de Lattre and Premier Tan Van Huns, during the latter
part Of November. This meeting will probably Witness a mach more vigorous
presentation of Vietnameee natiOnalist demanda than has sharaaterized ear-
lier mestinga, Premier Huu? foraerly a close collaborator of De Lattre,
has recently swung into increasingly open opposition to the general, and
has declared, according to a late press rePort, that Vietnam will demand
status within the French Union comparable to that of a dominion within the
Commonwealth. De,Lattre i known to be opposed to this ooncgpt.
PSLLIMM?Attlia_PS-1_12,--ZIVAPinatttnAKEts The
French High ComMissariate ha a transmitted an urgent request that the Le-
gation withdrew a leadership grant to the journalist Tran Van An. The
reason given was Angs close relations with the "anti-French Czo Dai group
of Colonel The:" whose secession with troops has created a potentially ,
dangerous situation." The Legation has asked for ingtructions.
nts
Tran VanAn-gs- -
candidacy for a DS leadership grant has been known and approved by the
French for many months. This situation bears a close resemblance to Gen-
eral de Lattregs lastaminUte intervention in June 1951 to pogIpone-the -
signature of the US-Vietnam economic aid agreement, although this resment
had already been aleared.with the local Frendh authorities. Such interVen-
tion is apparently an expression of Ds Lattrega fear of US influence in
-Indochina, and cannot fail to cause the -Vietnam GoVernment to lose- face,
10. -914Am2k .ao_...zi.22anF4rEhip of 37c*Tth Vietnam:
On 16 November, Miniater of Security Nguyen Van Tam was install64 it an
elaborate, well-organized ceremony as acting governor of North Vietnam,
replacing the ailing Dang Hun Chi. Conjecture as to the significance of
this assignment of a reputedly strongly pro-French personality to the
traditional cantor of anti-French sentiment generally followed one of two
lines of reasonings (1) that Tam has replaced Hun as the favorite of the
French, or (2) that Hun is seeking to discredit one of his most powerful
rivals by saddling him with responsibilities which may prove too heavy.
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CoMmen.4 Whatever the reasons behind Tam's appointment, it does not
angur. well for the development of a popular and Stable Vietnamese Govern
Ment. Tam has conducted the Vietnamese police services with brass knuckles
efficiency Since his appointment last February, but he has done nothing to
indicate that he considers himself other than a Frenchman (he is a natural-
ized French citizen), and he has acted with at least as Much vigor against
dissident nationallats as against Communists..
11. INDONESIA, I -L. !1=, t!A 11,12.tNIsat_tkMs If
the New Guinea question is not settled through bilateral DutchIndonesien
negotiations, Indonesia may Place the issue before the UN. Although the
cabinet may wish to take a moderate stand on the New Guinea issue$ such a
position would be used by left-winR groups as an excuse to force Its fall.
Commgnis Communist and left-wing groups both inside and outside Par-
liament have consistently tried to relate the New Guinea issue to general
dissatisfaction over Dutch-Indonesian agreements signed in 1949. The In-
donesian Cabinet has been proceeding cautiously in the current New Guinea
crisis and, although indicating that it may be ?foreed to. dissolve the
Netherlands-Indonesian.Union? probably prefers less drastic action. Should
bilateral negotiations with the Dutch prove unsuccessful, the Indonesian
Government may attempt to avoid domestic complications by placing the New
Guinea Issue before the UN. ' '
13. gmagumg. Fr.. ..; re..r. ? j ;1- .;; The
US Embassy in Manila reports that its relationS with the Nacienalista
senatorsolect are excellent at the moment because of their unanimous be-
lief that the American attitude was the Most important factor in ensuring
the honesty of the elections, which resulted in their victory.
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A canvass of the Nacionalistas indicates, however, that the chances
for obtaining their support for Philippine ratification of the Japanese
Peace Treaty will largely depend on whether a specific reparations
commitment within the terms of the treaty can be obtained from Japan.
While at least one asserted that the Nacionalistas would vote to "ratify
with reservations," others contended that domestic policies required
insistence on reparations.
Comme4s Although the Japanese would be unwilling at this time
to make any long-term commitment on reparations, they may agree to
provide token services, such as the salvaging of sunken ships in
Philippine waters, which would meet the Nacionalistas4 demand.
14. lelagienar4esetesekpAdor.worried over Japeneseapeaep tregv, Claro
Recto, one of the leaders of the Naeionalista Party, Said that rati-
fication of the Japanese- peace treaty was one of his partygs most
difficult problems. Having exploited the treaty as a basis for attack
on the Liberals during the campaign preceding the recent elections, a
quick approval would make the Nacionalistas appear insincere. Recto
realizes, however, the harm to the Philivoines which would result from
a refusal to ratify.
15.
CqEmenti The NaCiona1ista6 will probably criticize the treaty
in the Senate and perhaps delay its ratification ,but they are unlikely
to cause its rejection.
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pktv10,1111 Negrees__OcciAential con:tintless Disorders in the
province of Negros Occidental arecontinuing. The Constabulary company
attempting to maintain security in the area has been reinforced by three
additional companies. The acting governor has promised to order all the
private troops of suspended Governor Laeson to Surrender their arms.
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Commentg President Quirino suspended Governor Laoson for using
his private army to terrorize voters during the recent elections.
.16. PINa4AaaDLICUA5-st_ChIPAarePortedly plane Immediate activation of. air-
hiameunitss IChinese Communist plats call
for two airborne divisions by the end of 19519 throe by June 19529 and
seven by the end of 1952 if the USSR furnishes the 19000 aircraft re-
quired. The plan calls for a total of 70.000 airboine troops in these
seven divisions
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gpmmeAti The US Air Force has estimated that 20,000 to 259000'
Chinese ComMUniet trbops have received some parachute traiAing. No
Completely formed tactical airborne units are believed to exist, how-
ever, due to insufficient transport aircraft. Such units could be
formed were the USSR to provide aircraft for them.
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19. 1 ' 1952o04IprodUctionin China estimateds Coal production in
China in 1952 will reach 88 per cent of' the '"highest annual output of
Any past year," According to a recent Chinese Communist report on Chinas
industries.
? Comment; The highest annual coal output was estimated at 60,000,000
metric tons by the 'National Coal Vining Conference held in' Peiping in
early 1950. Planned 1952 production shouid therefore amount to 52,800,000
metric tons.
Coal production in 1949, 1950 and 1951, as calculated from Commu-
nist percentage comparisons, amounted to 26,700,000, 35,160,0000 and
41,520,000 metric tons Teppectively.
20. Li a io Ch n:
retorted: The numbers of wOrkerS bUilding the raili'Oad'to LandhOU in
Kansu'Pi.ovince are not high, and progress seems to be slow, according to
a Canadian missionary who left Lanchou for Hong Kong in September. The
source doubts that the railroad will be completed to Lanahou in 1952.
He also states that a tunnel on the Paochi-Tlienshui section of the road
(which was only recently restored) collapsed on a train fairly redently.
21.
? a
a
1047
Nrthw
Comments The Chinese Communists are proceeding more slowly with
this railroad than With any other new one. The most recent deadline
reported in the Communist press for completion of the road to Lanchou is
the end of 1953.
This eye-witness account is useful because it conflicts with
numerous low-grade reports that the Communists have assigned a high
priority to the construction of this 'line.
;
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A
recent Chinese Communist official report on Chinale industry stated that
considerable expansion of the iron and steel industry is planned for
1952 and 1953. One important addition to Chines industrial capacity
will be the construction of rolling mills which, according to the re-
port, will by 1953 be able to produce "all rails required for our rail-
way construction" and most of the other rolled steel products, such as
steel plates and sheets needed in China.
Comment: As a result of Soviet removals in 1945, there is now no
large mill in China capable of rolling large elopes such as steel rail6.
It is probable that replacement Of these rolling mills by the Soviet
bloc has been requested by:China, and that delivery by 1953 has been
promised.
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Peiping has decreed that one of the operating policies for
state-owned industries in 1952 is to increase production by making
full use of existing equipment." This policy implies that the govern-
ment is now discouraging the expansion of most industries, and it is
probable that the Communists are limiting their plans for new industri-
al construction in the next two years to a few key projects, such as
the rolling mills.
22. sent sent to China mainland
.19,-Loattrxj_31.
Nationalist PremierChen Cheng reported in his
"state of the nation message on 23 Nov that 32000 speciallyetrained
Chinese Nationalist officers have been sent in the past year tothe
China mainland to direct guerrilla operations, and 'manye? others are
now being trained for similar missions.
=Grit 8
The capabilities of anti-Communist guerrillas on the mainland
have steadily declined throughout 1951 because of the lack of a uni-
fied command, communications with each other, and necessary supplies.
23. CHIN/ KOREA IncilealSbalegeataports Chineseangepuinelx desire" geese--
fire: The Indian Charge in Peiping reports a "general impression"
there that the Chinese Communists, with their forces near the 38th
parallel, now "genuinely desire" a cease-fire in Korea. He believes
that if the cease-fire talks fail Chinas attitude will stiffen, and
that the US cannot "drive back the Chinese and gain more favorable
terms."
Peo,maent; Diplomatic and unofficial. Peiping sources have been
reporting for months an "impression" of a genuine Chinese Communist
desire for a cease-fire in Iorea, and, at the same time, an nnwill-
ingnees to make major concessions. These sources have not, however,
been in the confidence of top Chinese Communist officials. Juziging
from Peipinges propaganda on Korea, the above views appear to be those
which Peiping?s leaders wish to encourage.
24. Kougi, .91.4acm?oraurtaeryaereturned to Korea The
Far East Command reports the capture of a Chinese Communist prisoner
Who claims to have deserted on 19 November from the 149th Division of
the 50th Army. The prisoner stated that his unit was located north of
the Chongchon river in northweetern Korea, where it had arrived in late
Jtne. The 50th Army, reportedly, withdrew from Korea in late February,
arrived at an unknown location in China in March, and again departed for
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Comment', Initially committed in Korea in late November 19509 the
50th Army was rendered ineffective during its defense of Seoul in
February 1951. Withdrawn from Korea in March9 it has been frequently
reported in reorgzlAzation in Manchuria.
While the taking of one prisoner from this unit is insufficient
evidence upon which to base re-acceptance of the unit in Korea9 such a
development would not be surprising in view of the return to combat of
the Chinese Communist 42nd Army with a similar Korean combat history.
25. =Maga. faraloa_pagzaid...42.y.a.T' 'inalguYilL32,44-thar
krapArktijii Radio Pusan on 21 November aceused Japan of rvicious
treachere on the bards of ?ss report that the Japanese Will press
their clatmo to Japanese property in south Korea. The broadcast stated
that the ROK has "always longed for friendship with Japan9N but that ,the
insistence of Japan in planning further negotiations to settle this ques-
tion is an "-absurd view" and "means that J an sot abandoned its ag-
gression toward Korea."
I
ammIs Japanese officials allegedly have deeared that -Article 19
of the Japanese Peace Treaty applies only to Allied nations and thus does
not deprive the Japanese of the right to claim property in Korea. These
Japanese views are reported by a Korean news servicep which probably re-
flects extreme Sensitivity on 'my matter impinging on Korean sovereignty.
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SECTION 3 'WESTERN
GERMANY. Adenauer backs UN- investigation of West Zone. The German Federal
PZFE131 haTV-igTeMa?trerTre7F555-s-e"rar=rrasson=, which mould
investigate conditions in East and West Germany to see whether they are
favorable for the holding of elections, conduct its investigation in West
Germany and West Berlin even if it is denied access to the East Zone.
Governmental spokesmen feel that propaganda advantages mould be obtained
by a West Zone investigation. Furthermore's, considerable information about
the Soviet Zone might be obtained by interviewing refugees and others in
Berlin. If Soviet Zone authorities were to deny the truth of such indirect
evidence of East Zone conditions, the commission mould be in a position to
say that it could check such data if and when it was permitted entry to East
Germany. The West Germans also believe that a West Zone investigation mould
provide valuable ammunition against any new East German unity tricks.
Comment: This is the first expression of the Federal Republicfs attitude
an thr7637;e tO be pursued if the USSR denies a UN investigating commission
access to theiast Zone.
Failure of anti-Adenauer demonstration reveals French Communist
weaknessr?Firfunsponsore emons a ion 'uring
MinFJITor Adenauerfs visit to Paris proved the partyls increasing
isolation and inability to elicit militant support to carry out Soviet
foreign policy objectives, even on such important political issues as
German rearmament.
Comment During the past year French Communists have consistently
failed to make an effective political demonstration against the government.
Although the party planned this manifestation in compliance mith Moscowls
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directives the leaders evidently were unwilling to risk arrest by challenging
the governmentls ban on demonstrations. Party leaders may also be losing
their enthusiasm for such activities particularly since recent successes
of their labor policy show that popular support can be more readily obtained
for economic than for purely political objectives.
French Christian Workers favor closer ties with international
CommunisrW=giecarcommit ee of the French Christian Workers
era ion plans to send a delegation to the proposed Moscow
economic conference in April and has resolved to recommend to the Christian
Labor International that it accept an invitation of the Coalieunist-dominated
World Federation of Trade Unions for joint discussions.
The leader of the Christian 'Workers left ming believes that the Inter-
national will react coolly toward both of these projects. According to this
spokesman s his confederation was about to announce a breaking off of
negotiations with the Communist-led General Labor Confederation because of
the la ify organized labor under Communist leader-
ship.
Comments The Christian Workers Confederation is the most aggressive
non-C3FEEM labor group and has heretofore usually been willing to join
in unity of ,action with the Communist-led confederation. Its gestures toward
closer international cooperation for labors benefit may be intended to offset
its new policy of rebuffing the dominant Communist-led confederation in
France.
5. Government concerned about lack of Soc4.112L2220,21t: The Socialists
abstaine=the recent voie of-ConfiaenFg-despite Prime Minister Pleven 7s
assurances that social progress would be protected and that no commitments
would be made in Rome with respect to the European Army. This action was
taken against the advice of several Socialist leaders.
The government hopes that the party will prove more manageable after
the church-school laws are formally accepted. The Socialist position may
be the determining factor in the forthcoming National Assembly debate on
foreign affairs., particularly with regard to both the European Army question
and the second reading of the escalator wage bill.
Comment During the recent Assembly recess s the Socialists decided
that Efinnren.government is the least dangerous of three possible
combinations. The Socialistss thens can be expected to stop short of
actually bringing about Plevengs downfall s at least until 1952.
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AUSTRIA. Forel nMinister'comments on Vi6hins conversation: Austrian
Foreign Nin s or Gru er s a es =Itns n a conversa Ion on
19 November, indicated that an Austrian settlevnt mould be achieved only
as part of a general settlement of East-West issues. Gruber is convinced
that this settlement can not be long deferred, that the Russians may make
an effort to arrive at an understanding next year, and that, if they believe
they have failed, a "period of maximum danger" will arrive inl'952.
Comment: The Austrian Foreign Minister has frequently indicated his
pessiii771.67M1 regard to the prospects of an Austrian treaty at this time.
He has, however, strongly supported Western efforts to reopen negotiations
and has approved a pS proposal for increasing pressure on the Soviet Union
by introducing a new draft treaty into the discussions.
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'8: NETHERLANDS. Stikker declares' "outlook for NATO conferences and
tn:
Minister Stikker, who has already-inaicatedW?asn,oxi-D-Mr--
friToneSian relations, also doubts the probable accomplishments at the NATO
conferences this month and in January.
Doubting the likelihood of a "meeting of minds" on a European army
within the near future, Stikker points out the disparity of the French and
Belgian positions on the EDF, with the Netherlands and Italy .occupying 4
middle position. The Netherlands, 'however, is submitting a budget plan to
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the Belgians to serve as a pessible basis for compromise between the con?
flicting views.
Comma:LI In the past, Stikker has been unduly pessimistic on world
conditions,
The Italian position favoring the plan now parallels that of the French,
9.gATIA _Cormastsloitfooniartofeacecamain The Communists
have seized upon the disastrous floods in northern and southern Italy to
attack the government. The government is blamed for not having undertaken
measures to prevent such catastrophes. In addition, prominent Communists
have addressed an appeal to Prime Minister de Gasperi to allow the NATO
Conference in Rome at a moment "when the entire efforts of the government
and all Italians should be united in mobilizing aid for flood victims."
In the meantime, the Italian Government through its Embassy in
Washington suggests that as a defense against the Communist charges "it
night be possible at the forthcoming North Atlantic Council meeting in
Rome for countries participating toiake some action indicating their
concern over the damage to the Italian people resulting from the current
Po Valley floods and their desire as partners in NATO to be of assistance."
Cmpentl. The well?organized Communist welfare organizations can be
expected to render some aid to the flood victims, but not on a scale
comparable to that of the Italian Government, or to that which is being
rendered by the US. The Italian Government is preparing a bill for the
reconstruction of the flood areas and ECA Rome has recommended that ECA
funds be made available to the Italians for reconstruction in the flood
areas.
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la. DENMARK.t Coppc,rirlaci_lesVienecl; The Danish Government, in
response to PATO pressure, has tentatively decided to increase the length
of military service to 18 months, The measure will affect the class now 25X1
being called up for military service hence the size of the armed forces
will net actually be increased until next November,
CampAt.; US military authorities
training period as inadequate, but for
reasons the Danish Government has been
service. NATO pressure and persuasion
to extend the period?
have long regarded the 12?menth
domestic political and economic
reluctant to extend the period of
has now at last induced Denmark
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26 November 1951
CIA. No. -4 9 4 3 5 - A
Copy No.
4 9
THE DAILY DIGEST
Not for dissemination outside 0/CI and 0/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 ign 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. British concerned over rumors of US mediation in Iranian oil .
glaatts British officials in Tehran, alarmed by Iranian press reports
that Mossadeq will continue to discuss the oil problem with the US Ambassa-
dor, have intimated their hope that the stories are unfounded. The
AMbassador comments that the British are "extremely anxious" that Prime
Minister Mossadeq should return to Iran. not only emptv-handed. but with-
out any prospects for further negotiations.
Comments The British in Iran have remained firm in their expectation
that Mossadeq will soon fall by his own weight and that his successor will
be more amenable in settling the oil dispute. Anti-British sentiment, al-
ready strong in Iran, will probably increase as Mossadeq blames the British
for the countryus economic difficulties. It is unlikely that any successor
to Mossadeq would be able to effect any settlement of the oil dispute which
could be construed as appeasement of foreign interests at Iranian expense.
2. JAPAN.pLittJaanesetrealeotiations with Nati2Ealiateghimeeemeaplja_114:
British Foreign Secretary Eden has rejected a US. proposal to inform the
Japanese Government that neither the United States nor Britain would object
to Japans proceeding immediately on preliminary negotiations for a peace
treaty with Nationalist China.
Eden indicated that he did not object to discussions on trade, property
claims, representation, and other practical problems, but that he could not
approve any move looking toward. Japans recognition of the Nationalists as
the Government of China. Eden feels that such approval would jeopardize the
bipartisan acceptance which the Japanese peace settlement has so far received
in the British Parliament.
Comments Any move at this time suggesting British approval of
strengthening the Chinese Nationalist position would encounter vigorous
parliamentary criticism directed in large measure at the United States,
The Japanese Government likewise has indicated it would prefer to post-
pone its negotiations with the Nationalists until after the multilateral
peace treaty comes into effect, fearing that prior negotiations might
jeopardize the treatyus ratification.
SECTION 3 (WESTERN)
3. GERMANY. General a reement reached at first Western meetin with Adenauer:
At the first meeting of the three Western Foreign Ministers and Chancellor.
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Adenauer on 22 November, approval was given to the terms of the General Agree?
ment for West Germany, which will go into effect when certain additional
conventions and the European defense treaty are completed. French Foreign
Minister Schuman, however, mentioned the limitation and prohibition of cer?
tain armaments production in the Federal Republic as a "difficult problem"
which might have to be dealt with in a separate convention.
Adenauer stated his conviction that the decisions to be taken within the
next few weeks would convince the USSR that it had failed to win over the
Federal Republic by its cold war tactics.
Commento Before complete agreement is achieved on a new political
statue for Germany, understanding must still be reached not only on the
security safeguards mentioned. by Sehuman, but on the Western "programs"
such as deeartelization and restitution, West Germanys share in defense
-costs, and the rights of Allied troops in Germany. At least another month
is expected to be consumed in these negotiations.
4. ITALY. Italians favor return of their forces treTtieptes An official of
the Italian Foreign Office recently told the US AMbassador, in a "purely
informal" converaation, that any disadvantage of a settlement of the Trieste
question might be compensated through retention of some troops in Trieste
under another "Leghorn arrangement." The Ambassador emphasizes that in
any Trieste settlement, an announcement that Italian troops would immediately'
enter the area would undoubtedly help greatly in counteracting popular resent?
ment in Italy over loss of territory to Yugoslavis4
The US Ambassador in Belgrade believes that from the Yugoslav point of
view, there ia no reason to hesitate in assuring the Italian Government that
American and British forces will leave Zone A of the Free Territory if the
Italians and Yugoslays reach an accord. He feels the Yugoslays might
secretly prefer that the troops remain, but could hardly take this position
openly.
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Cements There have been indioatlons that the Italian Government attaches
great importance to a termination of the Allied administration of Trieste and
desires Italian forces to be installed there.
5. I-419.1#1:1,p_21pare4_ty_RERLEth Euralkan Defense Forces without
Beneluxs The Italian representative to the European Defense Forces confer?
ence has expressed to the US representative a considerable anxiety over the
recent adverse Benelux reaction to the developments at the Paris conference
and asked What the "US intended to do about it?"
The Italian official states that if the Benelux countries withdraw from
this project, the important thing is "to get on with European integration,"
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which implies that Italy would continue with Germany and France in an effort
to integrate their armed forces. He believes that the achievement of this
objective would simultaneously solve the German problem and give the youth
of Europe a positive ideal for which to fight. The Italian official, in
contrast to the Dutch, does not believe that German membership in NATO is
a pressing issue at this time.
Comments The view of this official indicate that the Italian Govern-
ment is concerned lest integration of European Defense Forces be delayed and
is anxious for the US to take more vigorous action to encourage such integra,
tion.
ga2201/1111. Premier
de Gasperi is giving final review to the text of the note which Italy will
soon present to the signatories of the Italian peace treaty. The note
requests revision of certain restrictive provisions in the treaty and stresses
the anomalycreated by the treaty's existence and Italy's present position.
It points out that Italy, despite its re-establishment of democratic institu-
tions and support of UN efforts to maintain international security, is unable
because of its failure to gain admission into the UN, to take action within
that body in order to obtain revision of these restrictive clauses.
The US is instructing its missions in friendly signatory countries to
join with those of the UK and France in presentin to the overnments con-
cerned a .rc osed re .l' to the Italian note.
Comments Yugoslavia, one of the signatory countries involved, has indi-
cated it will not consider revision until disposition is made of the Trieste
issue.
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