DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000600250001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 14, 2016
• Document Release Date: February 3, 2003
• Sequence Number: 1
• Publication Date: December 28, 1951
• Content Type: REPORT

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25X1 28.December 1951
CIA No. 49480
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.
*Army, Navy and State Department
review(s) completed.
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SECTION 1 (SOVIET)
1. YUGOSLAVIA. Former Army Cominformists released by regime: The Yugoslav
Minister of the interior has announced the release of 137 former army
members.. The edict, issued during the celebration of Army Day, announced
that these men have been convinced of the seriousness of their crimes and
can be expected to contribute " uilding and strengthening of our
25X1 socialist country."
Comment. The significance of this release lies in the timing of its
announcement which came during Army Day celebrations. The regime has
been releasing in the past year large numbers of "re-educated" Cominformists,
apparently in an effort to demonstrate the "unity" of the Yugoslav people
and the logic of Tito's anti-Soviet position. The propaganda objective
of this particular amnesty announcement may be an attempt to counteract
increasing evidence of Yugoslav dependence on the West and the effects.on
Communist army personnel of reported arrests of anti-Western army officers.
2? Yugoslavs reject majority rules adopted b
Belgrade Z Danube Commission: Radio
, in reporting the end of the fifth session of the Danube Commission,
states that Yugoslavia voted against the majority-adopted regulations cover-
ing the navigation on the Danube.
The Yugoslav delegate objected to the newly established rules because
they contained clauses which conflict with Yugoslav laws, oreover,
Soviet-dominated majority was also accused of ignoring "allMjustifie the
slav arguments" submitted during the present session.
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Comment; Earlier reports from US officials suggested _
ty had adopted a conciliatory attitude toward Yugoslavia. However, onjthe
more crucial issues, specifically the majority rule that the owner country
should be allowed to investigate ships involved in accidents in Yugoslav
waters, the majority apparently fulfilled its expected role by rejecting
Yugoslavia's key representations.
The result of a lack of unanimity will be the existence of two con-
flicting navigational codes on the Danube, a situation which provides an
additional basis for new provocations.
Yugo 31avia re 'acts Hun arian char e of ills al Yu oslav occu ation
of Hungarian territory; The Bel
d
gra
e radio has announced that there is
no justification for Hungary's note to fugoslavia charging illegal Yugo-
slav occupation of a Hungarian island situated in the Mura River. The
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Yugoslavs contend that the island, formed after the war by a change in
v _ _ _ o - d .
Comment: Yugoslavia had charged Hungary with an illegal occupation
of Yugoslav territory on 20 December, claimed that this was another in
a series of planned incidents, and stated that "our peoples will yield
no part of their territory to usurpers."
Hungary subsequently delivered a note to Belgrade asserting that
the island had been seized illegally from Hungary by Yugoslav peasants
who were unlawfully cutting timber.
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 2. IRAN, Iranian Prime Minister refuses to sign Mutual Security Act agreement:
Prime 'M is er Mossadeq has again refused to consider signing the agreement
required by the Mutual Security Act which provides among other things that
the recipient country contribute to the "defense of the free world." He
insisted that if formal signatures are required. the matter. must be-presented
to the Majlis and the Senate. He stated that he would be neutral in present-
ing the matter and suggested that Ambassador Henderson might judge for him-
self whether or not Parliament would be willing to give the required assur-
25X1 ances.
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SECTION 2 (EASTERN)
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Comment: There are no indications that Mossadeq will become more amen-
able to signing the agreement provided for in the Mutual Security Act. In
their present mood the two Iranian Houses will hardly mot quickly or favor- 25X1
ably on a political matter of such an explosive nature.
3.
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AFGHANISTAN. India may be supplying arms to Afghanistan- An Afghan Army
colonel told a US Embassy representative that he had just returned from an
arms purchasing trip to India.
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The Embassy comments that these arms may be part of India's assistance
to Afghanistan in return for the latter's pressure on Pakistan regarding
Pushtoonistan. The Embassy further states that the only way Indian arms
could reach Afghanistan at present would be aboard planes of the Himalayan
Aviation Company, Ltd., which recently inaugurated an otherwise apparently
un rofitable weekly service from India to Kabul via Iran. 25X1
5. CHINA. Chinese Communists plan modernization of Tibets The Chinese Communists
have launched a program for short-term modernization of Tibet, according to
Indian press reports. This program is said to include building of motorable'
roads, construction of a radio network in southern Tibet, installation of a
printing press, electrification of important towns, opening of technical
schools, and establishment of a state bank. It is reported that the modern-
ization program is supported by the Tibetan Government and that the Dalai
Lama has a Baled to the or financial contributions.
Comments Short-term modernization of Tibet will necessarily be rudi-
mentary. The Communists occupying Tibet need transportation, communication
and propaganda facilities in order to effect the political and military in-
tegration of that region with China proper* As such facilities are developed
in Communist Tibet, the stability of adjacent territories in the Indian sphere
will become threatened.
The forcing of a degree of technical culture upon Tibetans will contribute
to the ultimate elimination of Tibetan feudal traditions. It is assumed that
any public appeal made by the Dalai Lama was dictated by the Chinese Communists,
who plan eventually to expropriate the Tibetan monasteries and nobility. 25X1
6. Unidentified POW's seen at Dairen-
repor having seen about s being escorted through the
Dairen dock area by Chinese guards on 16 November. The identify of the POW's
who were taller than their guards, was not apparent. 2 5X1
4
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Comments This report does` not specify whether the prisoners were
Caucasian. If so, they might have been either Soviet troops in the Port
Arthur naval base area or UN POW's taken in Korea, Several thousand of the
latter have been reported at various points in Communist China.
KOREA. FECOM believes Comnunistswill continue on defensives As the 30-day
period of relative military nac v y in Korea approaces an end, Far East
Command interprets the meager evidence available as indicating that the
enemy will continue on the defensive. FECOM cites as evidence that Communist
artillery is still disposed in depth and a great part of it will necessarily
have to be moved forward before the enemy can engage in offensive operations.
Some POW's have asserted that their units' missions are defensive and will
remain so until mid-February, while other POW's'have reported that their
units are engaged in preparing defensive positions. No major troop move-
mentshave been noted during the past 30 days, which would suggest that an
offensive is not imminent.
FECOM warns, however, that the enemy's logistical build-up, his increasing
air power, and his strength on the ground--particularly in armor and artillery
C- point to his retention of the ca ability of launching a major offensive.
8. President Rhee states that he will not oppose planned constitutional
. amendments At the twelfth regular session of tie National Assembly whit
convene Y-on 20 December, President Rhee made the "startling and quite un-
expected" statement that. he would not oppose the proposed constitutional
amendment which makes the cabinet responsible to the assembly. The US Mili-
tary Attache comments that there is no indication yet as to the real reasons
for Rhee's announcement or if he merely intends only to give lip service to
the statement.
Comments The amendment provides for the assignment to each ministry
of one member of the National Assembly as a vice-minister, who would act
in an executive capacity and be a liaison man with the assembly. Rhee may
have acquiesced because of pressure from within his own party, a majority
of which favors the bill.
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SECTION 3 (WESTERN)
1. FRANCE. De Gaulle attacks European integration plans: A recent statement
by General de Gaulle is interpreted by the S Embassy in Paris as a possible
forerunner of attacks against the US and French Governments for having
failed at European unification by allowing Germany to become too powerful.
At a recent press conference, De Gaulle gave the first indications that
if his current bitter attacks against the European Army should fail, he would
then launch an assault on the alleged German comeback, saying that German
"hegemony" could have been prevented had he been granted power in time, The
General predicted that the present "weak piecemeal approach" to European
integration would lead to "disappointment and disgust" with the European
idea, and would result in the failure of European union and in "Atlantic
disunity."
Comment: Both the current Gaullist line and these indications of future
party a ics spell continued difficulty for the middle-of-the-road govern-
ment. De Gaulle's criticism closely parallels Communist vituperations against
the European Army and the "American occupation of France." Such a propaganda
assault is especially serious in France, where popular sentiment is innately
apprehensive both of foreign troops on French soil and of the rebirth of a
German war potential,
2. AUSTRIA. Soviet-controlled enterprise supplies railway tank cars to the
es: An Austrian manufacturer under the control of the Administration of
oviet Enterprises in Austria (USIA) is reported to have accepted a large
order for railway tank cars from the Turkish National Railways and to have
succeeded in delivering a portion of the order to Turkey Italian
middleman. F_ I two 25X1
Soviet directors o we firm were coincidentally removed from their positions
while the transaction was in progress, but a third is reported to have
consummated the deal on the plea that USIA needed the dollars involved. The
Soviet Military Bank in Vienna alleffnrily andled the financial arrangements.
Comment: While Soviet-controlled enterprises in eastern Austria have
heretofore fered surplus and non-strategic items to Western buyers in
return for needed foreign exchange, the export of tank cars must be regarded
as indicative of either a pressing need for funds or unusual zeal on the
part of individual plant directors.
3.
NETHERLANDS. The Dutch oppose other European Defense Community nations on
interna_ defense force issue: The Dutch delegates to the Paris Conference
on a European Defense Community will accept the plan favored by the French,
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Germans and Italians, whereby all internal defense forces would form part
of the European Defense Force, provided that only the national governments --
and not the Defense Community -- have the authority to commit any of these
forces to SHAPE.
The German delegate, suspecting that the Dutch are trying to retain
the nucleus of a national army, states that if the Dutch plan is adopted
West Germany will also have to create some national forces in order to secure
Bundestag ratification,
Comment: The German delegate's remark is prompted by his Parliament's
insis ence on equal treatment in the European Defense Community.. Since the
Allies, and especially the French Government, oppose the formation of any
German national forces under a wholly German command, the Dutch. proposal
would in effect discriminate against West Germany.
The Netherlands and Belgium have intimated a willingness to accept a
common budget under international control in exchange for a longer tran-
sition period (see following article). This may lead to conciliation on
the less important issue of internal defense forces.
25X1
BELGIUM-THE NETHERLANDS. Benelux indicates compromise on common budget
proposa : The Benelux delegates to the European Defense Forces conference
Have- -Mn icated a willingness to accept a common budget under international
control in exchange for a longer transition period. The Dutch and the
Belgians have intimated that if there is agreement for a transition period
beyond the proposed December 1953 deadline, they will agree to a common
budget arrangement for the definitive period following. In general, agree-
ment was reached that this common budget would include all expenditures of
the EDF forces and institutions, 25X1
Comment: The Benelux delegates have heretofore been adamant in their
opposition o a common budget under international control. Their apparent
willingness to compromise will eliminate one of the largest stumbling blocks
in the EDF plan, on which the EDF Ministers are now meeting to iron out the
remaining difficulties and to reach agreement in time for the February NATO
meeting in Lisbon.
ITALY. Italian ratification of Schuman Plan expected: The Foreign Affairs
Committee of the Italian Chamber of Deputies has already begun consideration
of the Schuman Plan treaty, but the US Embassy in Rome believes ratification
by both Houses will probably not be achieved until some time in February.
With ratification in principle supported by all the democratic parties, it
is practically certain that Parliament will take favorable action after some
debate.
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Comment: The majority Christian Democrats, with the support of other
modern e parties, should experience no difficulty in securing the bill's
passage,. even though nationalistic right-wing elements may join the Communist
Party in opposition. Implementation of the treaty may be hampered, however,
by interested industrial groups who have consistently opposed the Schuman
Plan since its inception and have been largely responsible for the long
delay in its presentation of Parliament,
6.
Italians fear Cabinet crisis: Opposition to the governments Budget
Ministry bill recently passe by tri e Italian Senate has led to speculation
as to whether a Cabinet crisis might result if it is defeated in Parliament
early in January. The bill would give added powers to the Budget Ministry,
now headed by Christian Democrat Pella.
Differences have been reported between Pella and Finance Minister Vanoni,
and even between Pella and Premier de Gasperi, on the subject of defense
spending. Long standing opposition by both left- and right-wing Christian
Democrats to concentration of financial powers in Pella's hands resulted
in a Cabinet reorganization in July.
If new Cabinet changes seem indicated, De.Gasperi "will certainly use
the opportunity to try to get the democratic Socialists and Liberals back 25X1
into the government." Meanwhile, democratic Socialist leader Saragat stated
on 22 December that his party would remain in the opposition until the Italian
national elections.
Comment: Although the Christian Democrats will probably manage to
resolve their differences temporarily in order to ensure support of the
government in Parliament, where the party has a majority, Pella's control
over the Italian economy raises serious questions regarding Italy's
participation in the Western community. Italy's contribution to Western
defense is limited by,Pella's "defense of the lira" policy, and the govern-
ments ability to survive the 1952 national elections is jeopardized by
party division over this issue.
Because the Liberals and democratic Socialists have made it plain ever
since the spring municipal elections that they have no intention of returning,
Do Gasperi may find it necessary to turn to the extreme right for support.
PORTUGAL. American aid for Portuguese defense effort urged b US Embass :
.The -Ambassa or in Lisbon believes that political considerations make it
highly important that the US reverse its tentative decision not to program
economic aid for Portugal in fiscal year 1953. He points out that the
present Portuguese plan for defense expansion, for which Portugal seeks
30 million dollars, is the result not only of American insistence on a
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maximum defense effort by all NATO countries, but also of Defense Minister
Santos Costa's personal cooperation with US officials and his influence on
Prime Minister Salazar. The Ambassador feels that failure to program aid
for Portugal would amount to belittling the Portuguese defense effort and
would undermine confidence in American leadership and adversely affect co-
operation between the two governments in all fields.
1 -1
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Comment: Portugal had estimated that its minimum defense contribution
under NATO would require 30 million dollars in additional appropriations over
the next three years. The Portuguese had insisted, however, that the domestic
economy could not support this added expenditure and that equivalent amounts
of direct American aid would be necessary. The NATO Temporary Council Com-
mittee.declined to recommend either increased Portuguese defense expenditures
or the American aid requested by Portugal.
8. UNITED KINGDOM. Small rise in UK coal production seen for 1952: British
Secretary ofState for Fuel and Power Lord Leathers has promised MS& officials
a vigorous government effort to raise British coal production and full co-
operation vrithin OEEC for solving Western Europe's coal problem., The Chairman
of the National Coal Board, however, in a later conversation predicted that
British output for 1952 would rise by not more than four million tons, while
an additional five ons might be saved by "improved" consumption.
25X1
Comment: Nine million tons, which represents an increase of about four
percent over Britain's 1950 coal production, would go less than halfway
toward meeting Western Europe's urgent need for non-dollar coal. During
1951 the various Continental countries were scheduled to import 28 million
tons from the US, thus significantly worsening their international payments
position. Although the UK has been exporting some coal to the Continent,
it is itself scheduled to receive 750,000 tons of US coal in the first
quarter of 1952.
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10. BOLIVIA. Bolivian Ambassador says US tin policy endangers good-neigh' or
o is : AT. er o Os ria Gutierrez, Bolivian Ambassador to Chile, e, has stated
a is country is losing confidence in the good-neighbor policy because
the US Reconstruction Finance Corporation, in violation of such inter-
national agreements as the Bogota Charter, has fixed arbitrary :prices for
Bolivian tin. He declared that "for the US the issue represents the price
of two bombers; for Bolivia it means an economic crisis...." He added that
what is being done today with tin may be done tomorrow with copper, coffee,
rubber, and other South American raw materials.
11
Comment: Earlier in December the Bolivian Government announced that
at a propitious moment it would ask the organization of American States to
judge the prolonged Bolivian-US disagreement over the price of tin. Mean-
while, Bolivian diplomats have been seeking support for its position in
other Latin American,countries, many of whom share Bolivians views regarding
the defense of primary producers.
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28 December 1951
CIA. No. 49480-A.
Copy No.
45
Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence. It does
not represent a complete coverage of all current reports in CIA
or in the Office of Current Intelligence. Comments represent the
immediate views of the Office of Current Intelligence.
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SECTION 2 (EASTERN)
CHINA/INDIA. Indian Government attempting to influence Peiping's position
on Korea: The Secretary-General of the Indian Ministry of External Affairs
recently told the American Ambassador that the Government of India concurs
in the view that Chinese failure to make "reasonable agreements" in Korea
would be a further indication of Soviet control of Peiping's policies. The
Indian official indicated that his government was making this point
"vigorously" to the Peiping regime.
The Indian Ambassador to Peiping told the American Ambassador that he
was confident of a successful conclusion to the Korean negotiations. Con-
ceding that such an agreement would require a "drastic change" in Peiping's
attitude, the Indian representative stated that, upon his return to Peiping
in late Januar he would make "ever effort" to induce Peiping to modify
its position.
Comment: It is questionable that the Indian Charge in Peiping is in a
positio'~ to make any point "vigorously," as he apparently does not have access
to the top officials of the regime. While the Indian Ambassador may attempt
to influence Chinese Communist leaders upon his return, the prospects for
success in such an effort are poor. Indian representations in the past have
had no discernible effect on Peiping's policies.
2. JAPAN. Political Adviser comments on significance of Japanese cabinet
reorganization: The reorganization of the Japanese cabinet on - December
caught both politicians and the public by surprise, according to US Political
Adviser Sebald. He reports that the purpose of the change is threefold:
to reduce internal Liberal Party friction, to strengthen the cabinet for the
coming Diet session, since an increa e in the effectiveness of the opposition
Democrats is anticipated, and to effect the continuation of the Yoshida
cabinet after the peace treaty comes into force.
On the transfers of individuals, Sebald comments that the promotion of
Chief Cabinet Secretary Okazaki to State Minister is significant. Yoshida
intends to make Okazaki the Foreign Minister after the Occupation; meanwhile,
he will play an important role in negotiating the administrative agreement
under the Security Treaty. Sebald believes that Okazaki's appointment
strengthens the government's hand in foreign relations. -Ohashi's transfer
from Attorney General to State Minister will make him available-to head the
proposed Ministry of Internal Security. 25X1
Comment: In general the Japanese press has viewed the reorganization
with considerable skepticism and has termed it a mere reshuffle. It probably
does not materially strengthen Yoshida's hand in dealing with the Diet
opposition.
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The Japanese press has already announced that Yoshida has virtually
ordered the Foreign Office to take its instructions from Okazaki.
SECTION 3 (WESTERN)
3. BRAZIL. Negotiations on supply of strategic materials to US authorized:
The Foreign Minister has informed the US Ambassador that the Brazilian
National Security Council on 22 December unanimously authorized President
Vargas to negotiate agreements with the US on the supply of strategic
materials. Vargas has instructed the Foreign Minister to conduct these 25X1
negotiations soon. The Ambassador states that he "will endeavor to secure
clarification of the action taken by the Security Council and the scope of
the Foreign Minister's instructions."
Comment: The significance of the Security Council's action is not
knowrn.e move may be a face-saving gesture, since Brazil has still offered
no material aid for the UN struggle in Korea. On the other hand, it may be
an effort to obtain additional railway equipment, since any appreciable in-
crease in the supply of strategic materials to the US depends heavily on the
improvement of Brazil's transportation system.
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