DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000600200001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 16, 2016
• Document Release Date: October 7, 2004
• Sequence Number: 1
• Publication Date: December 19, 1951
• Content Type: REPORT

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19 December 1951
CIA No, 49475
Copy No. 145
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.
NAVY, DIA and DOS review(s) completed.
NAVY AND DIA HAVE NO OBJECTION TO DECLASSIFICATION AND RELEASE.
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SECTION 1 (SOVIET)
1. USSR. Soviet Trade Unions accused of failing to wei h economic changes:
Trade Union elections are taking place alt the present ter ein all the
ade
trade union organizations of the Soviet Union. The union leadership in Socialist competition is described as thencentral
theme of the campaign. Official criticism has been launched against the
fact that trade union, economic, and Party organizations have failed to
allow for changes, particularly those of a "qualitative" character, that
have recently taken place in the country's national economy.
The immediate task of the newly elected trade union organizations
will be to eliminate all shortcomings of a "bureaucratic or formal"
nature, as well as failings that exist in the cultural and welfare
field. Local party organizations will be called upon to assist in
organizing the training and education of new cadres and the mobiliza-
tion of the masses for Communist construction.
Comment: Stalin has been quoted to the effect that "the working
class -mu sst by systematically educated in the spirit of Communism by
means of organizing it into trade unions." In reality, however, trade
union organizations in the Soviet Union have become progressively en-
feebled, until now they amount to little more than window dressing
for-the controlling Party apparatus.
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CZECHOSLOVAKIA. Czech Commercial Counsellor admits effectiveness of US
economic sanctions: Recent action withdrawing preferential tar s
from Czechoslovakia has "severely hurt" Czech trade, according to the
Czech Commercial Counsellor in Washington. He stated that the Czechs
had lost nearly all of their dollar supply and that they are faced with
added expenses of storage and re-shipping,charges for goods already in
the United States. In addition, Czechoslovakia is having difficult in
disposing of goods normall destined for the American market 25X1
Comment: The US sanction, which grew out of the Catis case, has
placed z.e aslovakia in a dilemma which will rapidly assume the pro-
portions of a crisis. There is no indication that the Czechs have found
another way of earning dollars, which are required for paymets on
strategic metals bought in the world market.
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YUGOSLAVI.A, Further governmental reforms impending Croatian Prime
sinister Balearic in a
bl
pu
ic statement dealing with constitutional re-
forms indicated that the recently announced system of enlarging the
mocialist sector of agriculture is a new departure in contrast to the
previously employed Soviet system.
Bakaric, in his speech, also alluded to impending constitutional
reforms, then 'he stated that measures for economic and administrative
decentralization would not wait for constitutional reform,
Finally, in defending the theory and practice of "democratic
centralism," Bakario made it clear that any new constitutional s ste
would not allow for organized political opposition.
Comment: In preparation for the convening of the Yugoslav Peoples
Parliament on December 27, the legislative committees and'the committees
for the economic plan and finance of both chambers are currently in
session.
As an example of continuing governmental reform and ostensible
liberalization, the concept of "administrative misfeasance" has been
introduced by one of these committees.- The bill provides that regular
judicial control shall be instituted over all the acts performed by
administrators involving the rights and dttios of citizens,
4. Yugoslav Communists reveal wider read peasant
attempts lectives An article published by the Croatian Communist part quit cal
that sabotage by the collective farmers during the p on in dicates
sumed such serious proportions that it threatened thesentire msystemaof
collectivization in the Republic. The sabotage reportedly took the forms
of large numbers of applications to tilt the farms and serious relaxa-
tions of work discipline. 1 -7
Comment: Although the situation in Croatia may not be representa-
tive, it is significant that officials in the Republic documented peasant
attempts to withdraw from collectives. Thus it may well be that reports
during the past six months of widespread peasant dissatisfaction with
collective life and resistance may not have been too exaggerated,
Despite government pressures and refusals to honor the spirit of the
law, continued attempts by peasants to leave collectives by exercising
their legal right to withdraw after a three-year period can be expected.
For as long as the vast majority of Yugoslavia's peasantry is convinced
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that Tito is at the mercy of American public opinion, that consumer
goods will remain relatively scarce, and that life on the collectives
will remain unprofitable and unpleasant, they will attempt to imple-
ment their virulent antipathy for the policy of "forced collectiviza-
tion."
Unless the present situation improves by spring, a bitter and
costly struggle on a grander scale between the regime and the peasants
may emerge.
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SECTION 2 (EASTERN) '
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1. BURMA. Government takes steps to defend capital; Refugees arriving in Ran-
goon from. the surrounding area report that the insurgents are planning to
march on the Burmese capital. As a result, "the strongest security measures"
are being taken, including curfews, police searches for infiltrated insur-
gents~and the establishment'of milita defenses on all land and water ap-
proaches to the city.
Comments Previous reports have stated that intensified insurgent
activi y in the Rangoon area is imminent, and the Karen radio has warned
of an impending attack upon Rangoon itself.
While the spreading of rumors through refugees is an old psychological
warfare technique and there is no firm evidence that insurgent strength
around Rangoon is sufficient to take the city, the precautions being taken
by the government clearly demonstrate that the authorities are more alarmed
than their statements would indicate.
2. Nu announces he will remain as Premiers During a 15 December press
conference, Premier Thakin Nu insisted that rumors of his impending removal
from office by the Socialists were untrue and that he would head the new
regime to be formed in February. He stated that the Socialists wished him
to continue because of his prestige among indigenous minorities and foreign
countries.
The US Embassy in Rangoon comments that Nuts statement was given after
a meeting with Socialist leaders and, in all probability, had their ap-
proval. However, it appears likely that the cabinet will be increased and
some non-Socialist ministers dropped in order to increase Socialist member-
ship.
Comments As long as Thakin Nu is retained as head of the government
it is not likely to be subverted by the Communists, even if, as may be the
case, Nu is the only important committed pro-Western member of the cabinet
after its reorganization. Nuts political durability can be attributed
primarily to Socialist respect for his personal prestige. Nevertheless,
the Socialists could remove him at any time, especially if the security
situation continues"to deteriorate.
3. THAILAND. 1947 Coup group gains complete dominance of governments Included
in the new 75--man Thai cabinet are 1 members of the 19 7 coup group, and
most of the remainder are allied with it. The great majority of members
of the appointed Parliament are similarly affiliated. The military charact-
er of the government is revealed in the large percentage of service person-
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alities in the cabinet and Parliament, 99 out of 123 in the latter.
Many of the cabinet ministers have not had previous experience to quali-
fy them for their jobs, while others have taken on additional cabinet
responsibilities in addition to military commands.
The US Embassy in Bangkok comments that this new cabinet will prob-
ably be worse than its predecessor both in terms of corruption and incom-
petency, but that there is no reason to believe that it will be less
cooperative with the US, and in fact it may be more so.
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CHIN,, Communist navy promises protection against pirates in South China.
According to a HHong Kong newspaper, the Chinese Communist Navy has pro-
mised to protect coastal shipping and has warned against pirates posing as
Communists and flying the Communist five-star flag. The report said that
piracy has been common in recent weeks along the Pearl River and in the
Ladrone Islands between Hong Kong and Macao, Regular Chinese Communist
naval vessels and customs ships.,the newspaper stated, are painted gray,,
fly the naval flag of Communist China, and carry uniformed crews. The
warning advised any vessel intercepted by a suspicious looking craft to
flash SOS signals or hoist distress flags to obtain help from island gar-
risons and the Communist navy,
Comments The Communists have provided very little protection to
Chinese shipping from pirates which are prevalent along the whole coast
south of.Shanghai. This report indicates that in South China, at least,,
the Communists have more naval strength than, previously, In fact, motor
torpedo boats were recently observed in the Pearl River area for the
first time. There is no suggestion that the Communists are offering pro-
tection from Nationalists and Nationalist-sponsored guerrillas which oper-
ate farther north off the Fukien and Chekiang coasts.
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8. ROK reacts immediately to UN POW tallys The ROK Office of Public
Information took immediate exception to a news story from Panmunjon in
which a US spokesman-mentioned only 79000 to 11,000 UN prisoners in Com-
munist hands. The ROK release stated that "my government wishes to call
attention to the-fact that over 88.0000 ROK soldiers are missing in action
and more than this number of loyal South Korean civilians were seized and
carried north by the Communist invaders." The statement continued, "we
are confident that UN negotiators cannot be overlooking the ROK prisoners
as they conduct negotiations."
Comments The news story obviously referred to non-ROK personnel. This
rea.ctioaigivgives further evidence of the extreme sensitivity of the ROK Govern-
ment to any real or imagined slight.
The Communists' statement that they hold only some 79000 ROK prisoners
further complicates this situation. UN sources have claimed that upwards
of 90,000 ROK prisoners are in Communist hands. It is possible that the
Communists have forwarded only the names of those ROK soldiers who are
actually in POW camps and have ommitted9 possibly for later bargaining,
the names of those taken into North Korean military service.
9. JAPAN. Seven Japanese Communists to be tried for espionage-0 Kyodo Press
Service reported on 1 December that-a US military court will soon try on
espionage charges seven Japanese Communists arrested during 14 December
police raids on 2L Communist hideouts in Tokyo and the vicinity. The
seven are described as leading members of the "Military Intelligence Commit-
tees" or "Y Squads" recently uncovered by police. The Communists were
alleged to have been spying on American installations and on the Japanese
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police.
Comments Reports have been received alleging that the JCP formed
"Military affairs Committees" some months ago to concentrate all party
activity against armed organizations in Japan, including the police and
Occupation Forces, These reports broke the committees down functionally
into "Y" components -? for example, "Y--319 worked against the US Occupation
Forces. This press comment lends weight to the previous reports of the
existence of the "Y" group.
10. Informal Japanese-Indonesian talks on reparations are under wa s
Informal talks concerning Japanese reparations to Indonesia commenced on
15 December in Tokyo between Japanese Foreign Office officials and the
chief of the Indonesian reparations mission. It was decided to continue
informal meetings until the arrival of a ten man Indonesian delegation,
expected on 21 December, at which time formal negotiations will be ini-
ated.
The Indonesian mission chief is authorized, in addition, to negotiate
agreements on fisheries, trade, and sea and air transportation. There-
fore$ "observers" close to the scene feel that subcommittees will be
formed that will discuss these economic matters independently of the
reparations question. 25X1 A
Comments Due to internal public pressure in Indonesia, its repre-
sentatae are expected to make a large cash demand -- some one billion
dollars. Japan, however, will undoubtedly continue to maintain that it is
unable and is not compelled by the Peace Treaty to make large reparations
payments in cash. Rather, the Japanese are prepared to offer only labor
services and the processing of raw materials.
11. Increased National Police Reserve and Maritime Safety Bgard under
proposed- Security Ministry reporteds Pians of the apanese Government to
increase the National Police Reserve (NRP) by 50,000 men and the Maritime
Safety Board (MSB) by 20,000 under a proposed Security Ministry are re-
ported by two news agencies. The Security Minister, as now contemplated,
will be charged with commanding the NRP and MSB, establishing an air force,
and conducting liaison with the local police and the Special Investigative
Branch of the Attorney General's office.
The bill for the proposed ministry reportedly will be presented to
the Diet early next year as part of the government's
overall administir
tive reform plan. 25X1A
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Comments The Japanese Government has constantly reiterated that full-
scale rearmament is not economically possible, yet it recognizes the need
for a military force. An increase in NRP and MSB personnel appears to be
the method by which these two factors can be reconciled.
While previous comment relative to the establishment of a Security
Ministry has been noted, this suggestion for the formation of an air force
is the first indication that Japanese officialdom is now thinking along
these lines. ?
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SECTION 3 (WESTERN)
GENERAL. Spaak deplores lack of enlightened European leadership:: In a
conversation with General Eisenhower, Paul-Henri Spaak stated that there
is a lack of "enlightened leadership," especially from the UK and France,
capable of making the peoples of Europe understand what must be done for
survival. Pointing out the. necessity for a firm declaration of British
support for the European Defense Community, Spaak said that it was difficult
for the smaller European countries to shift from a policy based on a British-
French alliance to one based on a French-German axis. He himself resigned
from the Council of Europe to campaign for an early agreement on the European
Defense Forces, which, with the Schuman Plan, he considers the most important
step in European unification.
Both Spaak and the Belgian delegate to the EDF conference stated that 25X1
Europe would reach agreement on the EDF in time for the Lisbon meeting in
February because they fear the ion should they fail.
Comment: The British position on European unity was presumably one
of the main topics in the Anglo-French discussions in Paris on 17 December,
but there is still no indication that the British are ready to promise
anything more than encouragement for the Schuman Plan and the European
Defense Forces.
2. Collaboration of Christian Trade Union International and Inter-
national Confederation of Free Trade Unions under discussion: At a special
meeting of the executives of the Christian Trade Union International and
the International Confederation of Free Trade Unions, closer collaboration
between the two. groups was discussed, and it was decided to issue a com-
munique affirming a move as far as "organic unity." "Organic unity" is
presumed to include a committee of ICFTU-CISC representatives to determine
fields in which common action might be taken and to establish a joint policy
wherever desirable
Comment: When the ICFTU was formed in 1949 as an outgrowth of non-
Communist union withdrawal from the WFTU, the CISC refused the ICFTU's
invitation to join, but remained sympathetic to its purposes. Should there
now be closer working relations between the two groups, a more effective
means of combating Communist influence in labor, especially in the Far East
and Africa, will be available.
GERMANY. West Germans balk at size of financial contribution for European
ec fense: Chancellor Adenauer told the Allied High Commissioners on
t December that Germany will probably be unable to contribute the full
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amount assigned by NATO as the German share of Western defense costs. He
alleges that a constitutional amendment permitting the federal government
to tax sources of revenue which the state governments now tax would be
required in order to raise this sum. Adenauer doubts that Parliament would
pass such an:'clment.
Comment: The Allied High Commissioners anticipate great difficulty in
gettin-g-,779-West Germans to accept their 3.2-billion-dollar share of
European defense costs, but believe that the additional revenue can be
raised by a revision of the income tax structure. The coalition parties are
loath to raise taxes in upper-income brackets, however, and the Chancellor
probably hopes that a considerable part of the German contribution can be
financed by 'internal or foreign loans.
Trade unionist action does not presage labor unrest: West German
politicians isagree on the significance of the 3 December decision of the
German Federation of Trade Unions (DGB). to cease cooperating with the
federal government in economic affairs. The coalition deputies minimize
and the Social Democrats exaggerate its importance.
The US observer in Bonn comments that the DGB is apparently willing
to continue negotiating with the government on all substantive issues, but
is unwilling to shoulder any responsibility for the coalition's basic
economic policies. This situation will aid the government in.settling future
labor-managerial disputes, but prevent it from claiming labor support of its
economic policies.
Comment: The 3 December decision aroused speculation that West Germany
was headed or a winter of strikes, possibly with disastrous effects on Ruhr
coal production and Western rearmament plans. The DGB withdrawal strengthens'
the federation's ties with the Social Democrats, a blow to coalition hopes
for future DGB support in its legislative program, but it does not presage
labor unrest.
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FRANCE. Paris Embassy comments on Le Monde's continued anti-Americanisrm:
=ecision of the stockholders of Le Monde,, most influential Paris news-
paper, to retain Hubert Beuve-Mery as editor. is considered by the American 25X1
Embassy to be a victory "'for his particular approach" to the paper's policies
and portends a continued trend by Le Monde "toward an increasin l .harmful
anti-Americanise" under the "mask oo objectivity."
Comment: Since last spring Le Monde has abandoned neutralism as a
consistent policy because it fail-e7 to arouse widespread support.
The stockholders' decision is seriously detrimental to US interests
because Le Monde's aggravation in conservative circles of the widespread
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French irritations over US policies complements the current Communist
emphasis on discrediting "the American occupation."
FRANCE-TUNISIA. France rejects Tunisian petition; a oints new Resident
ener : 'he Frenc Ca ins has rejected the Tunisian petition for a
greater share in government, but has proposed to prolong the term of the
Tunisian Grand Council and to establish a French-Tunisian commission which
would consider the formation of a truly representative legislature..
The Cabinet has also selected Pierre Voizard to replace the present
Comment: The French Cabinet delayed denying the Tunisian petition
until it was certain that the UN General Assembly would not discuss the
Moroccan issue. Nationalist disappointment over the French Cabinet's action
will be somewhat lessened by the replacement of the unpopular and dictatorial
Resident General Perillier. Although demonstrations against the French
decision are probable, no serious disorders are likely at this time.
7.
AUSTRIA. East-West disagreement blocks relaxation of Austrian censorship.
Western representatives on the Allied Council failed last week to secure
any alleviation of communications censorship in Austria. Discussion of a
Soviet proposal to abolish censorship of international telephone communi-
cations found the Russians vague on a precise definition of "implementation"
and unwilling to guarantee unrestricted Western access to the Austrian
central telephone exchange. Should the Allies not have access to the
exchange -- located in the international zone of Vienna, but occupied and
controlled by the Russiand since 194 -- the Russians would be in a
position to establish unilateral censorship. The Soviet representative
rejected Western proposals to abolish both internal and international
censorship, or to abolish international censorship when technical imple-
mentation had been worked out or to simplify administrative procedures.
Comment: The Soviet element's proposal in the Executive Committee
of the Allied Council to end international telephone monitoring came as
a surprise to Western officials in Vienna
Soviet reneging confirms the supposition that the.proposal was designed to
shift the blame for unpopular censorship from Soviet shoulders and, if
possible, to deprive the West but not the USSR of access to sources of
information.
8. German coal allocations hit Austria hard: ECA officials in Paris
and Vienna charge a German a oca ons or ava able coal for export do
not at present reflect Western policy with respect to Austria's special
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requirements. While total German exports of coal, 95 percent of which are
distributed by the Germans themselves, have been about constant during the
past year, Austria's receipts of German coal have declined 27 percent.
German authorities allege, in reply to ECA representations, that an
increase in Austrian allocations can be accomplished only at the expense
of other importers, all of whom,. except Sweden, will be reduced on a per-
centage basis in the next quarter. Exports to Sweden cannot be reduced
since the Swedes have allegedly threatened that they would then export ore
to Poland in return for coal. The Germans assert that they can only support
the US and Britain in urging the OEEC Coal Committee to grant a large share
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of OEEC's five Percent coal reserve to making up the-Austrian shortage.
Comment: Austria's special difficulties are compounded of the declining
availability of German coal, Poland's use of its coal to extract strategic
export items from Austria, and the high prices of alternative US coal supplies.
US officials in Vienna assert that Austria cannot earn sufficient dollars to
pay for US coal, and, that a larger utilization of higher-priced US coal
would adversely affect current efforts to stabilize the Austrian economy.
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9. ITALY. Budget Minister's financial policies at variance with US defense
o. ectives: The US Embassy in Home evaluates Budget Minister Pe a's recent
speech on Italian financial policy as "conservative, full of old frequently
repeated themes, and at variance with the strenuous efforts US officials
are now making to bring about a bold Italian defense program with the help
of US aid."
Pella said that Italy must make a defense effort compatible with "its 25X1
need to safeguard civilian investments and consumption, increase employments
protect the value of the lira, and continue social progress."
Comment: Pella's fear of inflation has obstructed expansion of the
Italian defense effort. In his "'defense of the lira," Pella, who exercises
almost absolute control over the Italian budget, has the full support of
Premier de Gasperi and President Einaudi. Italian defense expenditures
are only about 2) percent of the total budget.
The need for substantial appropriations to offset the recent serious
flood damage in Italy will reinforce Pella's stand against pressure for
a greater defense effort.
10. UNITED KINGDOM. British express dissatisfaction with present UN General
Assembly session: The acting head of the Unite Nations department of
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the British Foreign Office has indicated his disappointment over develop-
ments in the UN, such as the disarmament talks, South Africa's walkout
from this session of the General Assembly, and the embarrassment caused
Britain by Guatemala in the trusteeship committee.
He reported that Foreign Office legal experts predict an unpleasant
time over the Soviet resolution about Mutual Security Act appropriations
to influence people behind the iron curtain, but offered to help the US on
this question, He could not obtain authority to tell whether the UK had
actually voted for Greece in the balloting for the Security Council seat
and admitted that the British Government would have difficulty explaining
a vote against the US and with the USSR, He noted that the US had not
supported Britain in the trusteeship committee as had been expected,
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Comment: Britain had expected US support in the trusteeship committee
against persistent Guatemalan claims to part of British Honduras. The above
assessment of current UN issues implies that the lack of Anglo-American unity
has been primarily responsible for British dissatisfaction with the current
proceedings.
U. SWEDEN, Attitude on German unification reflects basic foreign.olio : A
Norwegian representative on the UN ad hoc political committee believes that
the Swedish Foreign Minister considers the German question the most important
conflict in international politics as far as Sweden is concerned and that
Sweden must therefore demonstrate ality by following an independent
course*
Comment: The Foreign Minister apparently feels that only by disas-
socia !Eg itself from the Western and NATO nations in UN discussions can
his country counteract Soviet suspicions that Sweden's neutrality is a
veneer. While some Swedes, would welcome a strong Germany capable of
countering the menace posed by Russia, the Foreign Minister seems to fear
that a strong western Germany incorporated into NATO might incite the USSR,
while a united Germany pursuing a "neutral course" would both reduce Easy-
West tension and strengthen the prospects for Sweden's neutrality.
l2. GUATEMALA. Communists reported receiving Czech rifles: The US Air Attache
Guatemala. in an October 1951 report., 1 -1 25X1
that 7-mm hunting rifles o Czech origin "were being issued
y the government to pro-government and Communist sympathizers in the 25X1
various districts of Guatemala." Approximately 30 rifles had been passed
out to people in Tiquisate the site of the most important United Fruit
Company plantationA
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The Attache comments that r"the citizenry of Guatemala of all factions
and parties continue to arm themselves, some with the consent and knowledge
of the government and some withouut _ rr
Comment; The Czech arms are
rob
bl
p
a
y being imported by Guatemalan
pro-Communist and leftist political parties and labor groups, rather than
by the administration. The purchase of Czech arms, which were shipped by
a Polish firm,was probably determined primarily by their price and availa-
bility, though the transaction may have been favored by ideological
considerations. If the arms have, in fact, been received by Communist
sympathizers, the position of the Communists is improved in relation to
the developing anti-Communist elements and also in relation to the army,
which, though loyal to the administration, represents a potential threat'to
leftist political influence.
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gj 26 uaE PREVIOUS EDITIONS. TOP SECRET (40)
TOP SECRET
 ter.&Y;,
Approved For Rele 2004/11/03: CIA-RDP79T01146A00Q0200001-4
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19 December 1951
CIA No. 49415-.4i
Copy No.
45
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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Approved For Release 2004/11/03 : CIA-RDP79T01146A000600200001-4
 Approved For Rel a 2004/11/03: CIA-RDP79T01146A00QW0200001-4
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CTIfl(7TTn1\T 7 (C'r t7r?r n\
SECTION 2 (EASTERN)
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2a JAPAN. Reaction to Dulles 9 speech reported: According to US Political
E er Seba the major apanese-papers gave sympathetic and favorable
treatment to a l! December speech by John Foster Dulles before the
Japanese and American Chambers of Commerce. While there was some initial
disappointment thah, the speech failed to give detailed plans to implement
post treaty Japan-UN relations, Sebald believes that intelligent Japanese
realize the impracticality of Dulles g dealing with minutiae. 25X1
Comma The Japanese have widely believed that the object of the
Dulles Ur1p was to press for Japanese rearmament., urge peace negotiations
with Nationalist China., and discuss the administrative details which will
implement the Security Treaty. In general the press opposed submission to
US pressure. Thus., the press reaction to the speech might be considered
rather favorable in nature., particularly since the press on, the same day
also reported that Dulles and Yoshida had reached a basic agreement.
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19 Dec 5l