TOP SECRET SUPPLEMENT TO THE DAILY DIGEST (INCLUDING S/S CABLES)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000700220001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 9, 2016
• Document Release Date: June 13, 2001
• Sequence Number: 1
• Publication Date: January 31, 1952
• Content Type: SUMMARY

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TOP SECRET
31 January 1952
US OFFICIALS ONLY CIA No. 49520
Copy No. 46
TOP SECRET SUPPLEMENT
TO THE DAILY DIGEST
(including S/S Cables)
Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
DIA, DOS Declassification/Release Instructions on File
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.
TOP SECRET
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SECTION 1 (SOVIET)
1. GENERAL. US Chiefs of Mission to meet in Paris: A meeting of US Chiefs of
Mission in Eastern Europe and State Department representatives is planned in
Paris for the first week in March. Participants will discuss: (1) Soviet
short and long term intentions particularly with reference to developments
in the Satellites; (2) maintenance and conduct of US relations with the
Satellites; (3) problems of protecting US official personnel and citizens in
the Orbit; (4) possibilities of retaliation and pressure on the Soviet Orbit;
(5) US informational and cultural programs, especially Voice of America and
Radio Free Europe. (S S/S Outgoing to Moscow 507, 25 Jan 52)
SECTION 2 (EASTERN)
2. LIBYA. Libyan unity threatened by King's attitude: The Libyan King's
preference for his native province of Cyrenaica and his apparent. disinterest
in the more important and heavily populated Tripolitania province endanger
the prospects for a united Libya, according to the American Charge in Tripoli.
The King seems unwilling or incapable of thinking of the country as a whole.
Of the two cabinet ministers who have a true all-Libya outlook, one is
definitely slated to go, while the other's tenure appears temporary.
The Charge warns that American interests in the area will be jeopardized
by the King's attitude since Tripolitania contains the important'US air base,
Wheelus Field. He believes that the American, British and French representa-
tives should press the King to accept his responsibilities toward all parts
of his kingdom. (S S/S*fripoli 371, 24 Jan 52)
Comment: When Cyrenaica, Tripolitania and the Fezzan were united to
create Libya in mid-December, separatist elements were considered a threat to
its future. The elections in February will be a major test for the state
which, without energetic federal leadership, faces an uncertain future.
3. INDIA/NEPAL/CHINA. India opposed to Chinese-Tibetan official representation
in Nepalese capital: In the 6-9 January discussions between the Indian and
Nepalese premiers, India advised Nepal not to try to maintain Nepalese
representation in Lhasa, since this would enable China to insist upon
reciprocal representation in Katmandu. The Indian Government believes that
a Chinese-Tibetan mission in Katmandu would be a center for "undesirable
activities." (S S/S New Delhi 2512, 19 Jan 52)
Comment: Peiping reportedly asked permission to establish an embassy in
Katmandu last summer but was refused, apparently because of Indian opposition.
Having since occupied all Tibet, the Chinese Communists are expected to raise
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the representation issue with Nepal again, perhaps through the Tibetan
delegation now visiting Katmandu. Their approach may take the form of
bargaining over Nepal-Tibet trade relations as well as over retention of the
Nepalese representative in Lhasa.
It may be noted that in late December India had advised Nepal to try to
maintain Nepalese representation in Lhasa, and two weeks later had reversed
that advice on the basis that permitting reciprocal representation would be
disadvantageous. India and China are each maneuvering for position in
strategic Nepal. Indications are that Communist China will continue to
apply political, economic, and military pressure on Nepal, in a drive to
undermine Indian influence there.
PHILIPPINES. Special consideration of Philippine reparation claims seen as
essential in obtaining ratification of Japanese peace treaty: Ins istence by
the Japanese reparations mission, now in Manila, upon application of the
principles of the Indonesian agreement to Philippine discussions (on,the
theory that the most favored nation treatment should obtain) would prevent
any agreement being reached and result in Philippine non-ratification of the
peace treaty, according to the Philippine Foreign Secretary. The US Embassy
in Manila believes that Japan should be urged to recognize the Philippines'
claim to special consideration.
On the other hand, the Japanese position that any commitment on
reparations will be made contingent upon Philippine ratification of the
treaty is regarded by the Embassy as a good tactic which will facilitate
ratification if a reasonably satisfactory agreement can be reached. (S S/S
Manila- 2681, 30 Jan 52)
TOP SECRET
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SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
31 January 1952
OCI No. 3863
Copy No.
,183
DAILY DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared pr intarily
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.
SECRET
SECURITY INFORMATION
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SECRET
SECTION 1 (SOVIET)
1. HUNGARY. -Relative-of leading Communist defects: Albert Liebermann, for-
Hungarian Commercial.Attache.in.Tel.Aviv,.early in December refused
to return to Budapest when ordered to by his government. He has asked
the Israeli Government for asylum. Liebermann is the brother-in-law of
Zoltan Vas, director of the National Planning Office and a member of the
Hungarian Workers' Party (Communist) politburo.
Comments Vas has maintained his high position since the Communists
gained control of Hungary in 1947 despite his propensity for luxurious
living and the fact that his brother is a busii'tessman in London. He is
very close to Matyas Rakosi, and like Rakosi spent many years before the
war in prison for his Communist activities,
2. YUGOSLAVIA. Yugoslavs attack Russian objectives in the Near East: In
an analysis of.Soviet Near East . policy,. the official Yugoslav newspaper
Po it' a states that the Soviet Union is against the basic interests of
the Arab nations and that its policy "boils down to an attempt to exploit
liberation movements for the USSRts objectives." The article maintains
that the minimum objective of the Soviet strategy is to weaken the po-
sition of Britain and to isolate the Arab world from the West by pre-
venting an agreement, and that the maximum Soviet objective is to usurp
Britaints traditional role by exploiting the chaotic situation. (Plain
Belgrade 939, 28 Jan 52)
Comment: This analysis is consistent with previous Yugoslav criticism
of imperialism on the part of both major power blocs in the area.
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SECTION 2 (EASTERN)
1
1. GREECE. Inspector General of Greek Army removed: The Inspector General
of the Greek Army, General Kitrilakis, has been relieved "temporarily,"
on orders of the Minister of Defense. All remaining pro-Papagos officers
reportedly are to be removed by May. (S Athens 3416, 29 Jan; S USARMA
Athens n MID 40, 29 Jan 52)
Comments The removal of Kitrilakis, a firm supporter of opposition
leader Marshal Papagos, is the result of the struggle for control of the
armed forces which has already caused the ouster of several high-ranking
pro-Papagos officers who are also pro-American.
This action assumes serious proportions because it directly violates
an understanding between the American army mission in Greece and Greek
defense officials which provides for consultation on major changes in
assignment of Greek army personnel. It is also indicative of increasing
political manipulation within the army.
2. Marshal Papagos_sets forth conditions for collaboration with
Liberals: Opposition leader Marshal Papagos has offered to support a
government headed by the Deputy Prime Minister and Liberal leader
Venizelos, if the latter will accept conditions set forth by Papagos at
a recent meeting held by the two leaders to discuss the possibility of
Liberal-Rally collaboration. The conditions demanded by Papagos? Greek
Rally include the passing of a law calling for new elections to be held
under the majority system in May 1952, the appointment of a Minister of
National Defense acceptable to both parties, and the retirement of two
or three generals to whom the Rally objects. Rally leaders reportedly
feel that such a transition government would test Venizelos' good faith.
Papagos has stated that he would subsequently seriously consider a
Liberal-Rally coalition without resort to elections if Venizelos? con-
duct of the transition government were satisfactory. (S Athens 3387,
26 Jan 52)
Comment: This is the most concrete proposal yet offered by Papagos.
While Papagos may have made this offer in good faith, the terms he has
has set suggest that he is more interested in obtaining these con-
cessions than in collaboration., Moreover, there appears at present
little chance.. .that Venizelos would be able to live up to the conditions
and conduct the government in a manner satisfactory to Papagos.
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3.
INDIA. Kashmiri officials decry the theory of a plebiscite: Beginning
on 15 January, Kashmiri officials have made an unusual number of public
addresses questioning the sincerity of the UNes dealings with Kashmir and
censuring the idea of a plebiscite which would pit Hindus against Moslems
in determining the future allegiance of the state. The Deputy Prime
Minister of Kashmir asserted that we have demonstrated that people
cannot be divided on the basis of religion in our state." (R FBIS,
29 Jan; U New Delhi 2563, 19 Jan; U New Delhi 2519, 16 Jan 52)
Comment: Kashmiri officials have recently expressed their views in
New Delhi, Bombay, and Madras, as well as in Kashmir. Their extensive
travels suggest that they are waging a campaign to increase Indian popu-.
lar interest in the Kashmir issue. Their new argument that Kashmiris
are all brothers, despite their differing religions, seems designed to
raise Indian opposition against a plebiscite which would split the state
on religious grounds.
4. Kashmiri Revenue Minister to visit Peiping in March: According
to the Indian press, Mirza Afzal Beg, Revenue Minister of Indian-held
Kashmir, is the leader of a four-man delegation planning to visit
Peiping in March to study Communist Chinese land reforms and agricul-
tural development. (U New Delhi 2263, 28 Jan 52)
Comment: Beg has been described as a left-wing Socialist, tolerant
of Communism. The government of Indian-held Kashmir, which contains,a
number of Communists and their sympathizers, has been engaged for some
time in efforts to prevent Indian domination of its activities. The
National Conference party, which controls the Kashmiri Government, has
recently expressed a desire to participate in foreign affairs and-de-
fense matters, heretofore handled exclusively by India. The development
of close relations between the Kashmir and Tibet or Communist China
would increase the present Communist threat to the security of Indians
northern frontiers.
5. Head lama of Ladakh raises possibility of union with Tibet:
On 28 January the Indian press reported that Kushok Bakula, head lama of
Ladakh province in eastern Kashmir, had written a letter to Indian Prime
Minister Nehru outlining his opinions on Kashmir?s future. According to
the report, the lama stated that Ladakh of its own free will had chosen
to remain with Kashmir as long as Kashmir formed a part of India, but
that it would automatically merge with India if a plebiscite in Jammu and
Kashmir resulted in favor of Pakistan. If, for any reason, it became
impossible for India to annex Ladakh, the Ladakhis would seek political
union with Tibet. (U New Delhi 2687, 29 Jan 52)
SECRET
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Comments In March 1951 a senior Indian Army off icer of outstanding
ability informed the US Army Attache that the head lama of Ladakh was
oriented more toward Tibet than toward India or Kashmir and.wo uld wel-
^.ome Tibetan administration of his provinces Since the head lama of
Ladakh exercises considerable influence over the local population, his de-
sires in the matter would probably be followed by the latter. Newly pub-
lished Chinese Communist geographies reportedly show Ladakh as part of
China.
6. BURMA. Formal offer for solution to Nationalist problem mades The Burmese
sore gn Minister 21elivered an aide memo re to the US Embassy in Rangoon
officially requesting that the US urge Taipei to order'its troops in Burma.
to evacuate that country. The US Government was also asked to persuade
Thailand to facilitate the movement of the Nationalist force through its
territory.
This proposal is essentially the same as the informal suggestion made
recently by Commander in Chief Ne Win which envisioned the evacuation of
the Nationalists through Thailand to Formosa. (S Rangoon 730, 29 Jan-52)
7?
CHINA/CEYLON. Ceylonese ship rubber to Chinas The Polish vessel Tobruk
cleared Colombo on 29 January with 50 tons of rubber for Communist China.
Local Ceylonese circles expect that up to 1,000 tons of rubber for China
will also be shipped on the Russian vessel Nicolaev, now in Colombo harbor.
Still another rubber shipment to China appears in prospect for the near
future; the agent of the Polish Ocean Lines in Colombo has information that
the Polish vessel Narwik will call on 16 February with space'for 500 tons
of cargo. (C Colombo 1443, 29 Jan 52)
Comments The only other shipment of Ceylonese rubber to China was
made last October. Efforts since that time to obtain Ceylonese rubber
have been frustrated by the unavailability of shipping space. Recent re-
ports, however, have indicated increased confidence on the part of both
Chinese and Ceylonese that-Satellite shipping to carry rubber to China
would be available early in 1952.
8. CHINA. Chinese Communist preparations for attacks on Nationalist-held
islands reporteds reports that during 25X1C
first two weeks of 1952 the. following Chinese Communist activities indi-
cated impending attacks on Nationalist-held islands off the Chekiang
coasts (1) heavy radio traffic among Chinese Communist army units sta-
tioned in the areas (2) establishment of six new Chinese Communist radio
stations on Tinghai Island, off the north coast; (3) movement southward
from Shanghai of 14 naval vessels; and (4) activity among naval vessels
and landing craft off Shihp'u, on the north Chekiang coast.
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Comments The Chinese Communists captured Tung T?ou Island between
11 and 1 January. This action and other indicators have been inter-
preted to presage an offensive against other Nationalist-held islands
off the China coast as the weather conditions become more favorable.
KOREA. Replacement of ROK delegate to cease-fire talks announceds A
French news agency in Tokyo reported on 29 January that Major General Yu
Chae Hyong, Deputy Chief of Staff of the ROK Army, has replaced General
Lee as the South Korean delegate at the cease-fire negotiations at
Panmunjom., His selection marks the third change in representatives by
the ROK since last October. (R FBIS, 29 Jan 52)
Comments. Yu, a product of the Japanese military system, has been
with a Korean Gendarmerie and Army since 1946. In 191.9 Yu was a col-
onel-and conducted an effective anti=guerrilla campaign on Cheju-Island,
and in 1950 he served successively as commanding general of the 6th, 2nd,
and 7th divisions. Reported as a Major General in May 1951, Yu was ap-
pointed Vice-Chief of Staff of the South Korean Army.
10. JAPAN. Japanese emphasize need for popular support of Security Treaty
arrangmen ss Ambassador us reports that at the firs meeting or U6
and'Japanese negotiators concerned with working out the administrative
details of.the Security Treaty, the Japanese once again made an appeal
that the national sentiment of their people be considered. Pointing to
Socialist Party opposition to the treaty9 the Japanese emphasized the
necessity of gaining popular understanding and-support for the. pact,
which will provide for the stationing of American troops in Japan fol-
lowing the end of the occupation. (S Tokyo 1576, 29 Jan 52),
Comments. There is considerable concern among Japanese Government
leaders that opposition to the US-Japan Security Treaty, now being ex-
pressed by the Socialist and Communist Parties, will increase unless the
post-occupation arrangements reflect substantial, visible changes from
the current situation. The need to retain facilities-for prosecution of
the Korean war, and the lack of substitute facilities, will prevent
complete fulfillment of Japanese-desires.
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SECTION 3 (WESTERN)
1. EAST GER:SANY. Government to offer asylum to West German youths evading
military service: The East German Government has reportedly drafted a law
which will offer political asylum to West German youths evading conscription.
It plans to submit the draft to the East German People's Chamber during the
defense debate in the West German Bundestag. (R FBIS,-Konstanz Suedkurier,
Berlin, 25 Jan 52)
Comment : Such an offer, which would attract few West German draft-
evaders ad-have little effect in reducing Bundestag support for West German
defense measures, is.designed for its propaganda effect of contrasting the
"warlike" measures of the West with the "peaceful" struggle of the East.
It is unlikely that many non-Communists would be attracted by this offer,
and Communist youths might very well be ordered to remain in West Germany
for underground activities.
2. FRANCE. Barter transactions reportedly increasing in French--US trades: The
US Embassy in Paris reports that "barter" transactions between French and
US firms are increasing in frequency and volume as a result of the dollar
shortage and high price levels in France. The general barter pattern involves
the sale of French goods for US dollars at a loss, while these dollars can
be used to import US goods, later sold for enough to recoup the loss and make
a profit.
Although only a relatively small percentage of the total trade is
involved, the French economic press is concerned over "government encourage-
ment" of this practice, and the national businessmen's association is trying
to discourage it because of a fear that the tendency to calculate these
transactions at an unofficial rate of 420 francs to the dollar will exert
pressure for official devaluation from the'current rate of 350 francs per
dollar. (C Paris 4463, 25 Jan 52)
Comment: Rumors of a devaluation arose early last autumn when the
franc eEgano slip in value. The black-market rate for the dollar has
hovered near 440 francs in recent weeks, despite the government's severe
credit restrictions, which have aroused much popular opposition. The deep
cuts in exports, due to German competition and rising French prices, have
caused considerable suffering in certain French industries, such as glove-
making.
3. AUSTRIA. Police arrest intermediaries in scrap-armament shipments to the
East: The Austrian police.have arrested a number of persons implicated in
the illegal shipment of cannon and machine-gun barrels to Orbit countries.
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Austrian officials charge that 160 tons of cannon barrels and 10,000
machine-gun barrels, reputedly from hidden World War II stocks, were
delivered as "commercial steel" to the Hungarian Restitution Commission.
An additional 700 tons of such material were confiscated in Graz. Newspaper
accounts assert that Soviet Enterprises in Austria was involved in the
smuggling.
The US Embassy in Vienna reports that it had known about the German
army stocks,which had been regarded as alloy scrap unusable by the Austrian
steel industry, Recent information suggests, however, that persons involved
in transactions in armament steel in Graz may have had access to steel
.armament scrap outside of Austria. Last August, according to this source,
a steel expert in Graz appraised for an "export-import agent" 1,200 tons-of
finest Boehler armament steel, including 1,400 gun barrels, two thirds of
them precision ground. An intermediary in the prospective deal and part
owner of the materials inspected informed the steel expert at that time that
his company had previously sold to the export-import agent some 600 tons
of armament steel, then in storage in Trieste. (Factual data from: C Vienna
2457, 26 Jan 52; S Salzburg Joint Weeka 4, 26 Jan 52; S/Control SO 77692,
London, 10 Jan 52)
II. NETHERLANDS. Dutch protest delay in receipt of US military equipmenC: The
Ne er an s has officially protested to US authorities the once ain y of
deliveries of US military equipment for the two Dutch divisions scheduled
to take part in the SHAPE maneuvers next September. Officials state that
serious political consequences can be expected if the problem is not solved
soon,
The US Embassy at The Hague advises that, in view of the publicity
given to Dutch participation in the maneuvers, the US will be publicly
blamed for any failure to deliver the promised aid on schedule. Further-
more, delay of the shipments would probably force the Dutch Government to
reduce its conscription levies. This would deal a serious psychological
blow to the country's defense effort. (S The Hague 768, 29 Jan 52)
Comment: Since last spring Dutch officials have indicated that a lack
of equipment might delay fulfillment of their military commitments.
In November, the Dutch hinted that "possibility of war in 1952" was
the basis for their insistence on fielding fully equipped divisions for the
SHAPE maneuvers. A later report shows that Dutch military leaders are
firmly convinced of this possibility.
5. ITALY. Government proposes substantial social welfare program: Simultane-
ously -w h its increased rearmament program, the Italian Government has
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announced a broad program of civilian investments designed to reduce unemploy-
ment and increase over-all production. The government., proposes,. among other
things, to construct additional low-cost. housing, initiate reforestation
and work-camp programs to give employment for several hundred thousand youths,
and to expand its agricultural development programb
This proposal, which would require about 500 million dollars and some
months for implementation, represents a policy concession to important
political elements ,rho have been dissatisfied with the restrictive financial
policies associated with Budget Minister Pella, The idea has been generally
received favorably, except by the Communists and industrialists; the latter
object to the necessary additional taxes, (S Rome Joint Weeka 3, 25 Jan 52;
P Rome 323, 24 Jan 52; R FBIS, 25 Jan 52)
Comment: The announcement of this program is calculated to ease tension
within the Christian Democratic Party and dissatisfaction with the government
throughout Italy. US officials were informed by Pella some weeks ago,
however, that such a program would be announced with an eye to the forth-
coming elections, and that after the elections emphasis would be placed on
defense, rather than on civilian expenditures. In any event, US observers
do not believe that this program could be implemented-fast enough to improve
the government's position greatly prior to the national elections should
they be held this year,
6. ITALY-TRIESTE. Linked-list system urged for Trieste communal elections: The
Political Adviser In Trieste supports the recommendation of e ied
Military Government of Zone A that the Italian electoral law calling for
linked lists of parties be adopted in that zone, where local elections may
be held this year. The adviser admits that the reasons he advanced last year
against adoption of the electoral law are'still valid, but states that the
intention of the US and UK to meet Italy's wishes in these matters appears
the deciding factor in favor of its adoption, (S Trieste 712, 25 Jan 52)
Comment: Last July the US representative had opposed adoption of the
elector aw principally on the grounds that the use of linked lists would
arouse adverse reaction from the Yugoslavs and might cause a linked-list
coalition of Independentists and Cominformists (see OCI Daily Digest,
21 Jul 51).
Despite pressure from the Italian Government for linked lists, moderate
pro-Italian parties in Trieste, except for the Christian Democrats, are still
unwilling to participate'in such an arrangement. In Italy, too, the demo-
cratic minority parties are opposed to this system for the local elections
scheduled for spring in southern Italy.
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7. CUBA. Communist daily to become weekly magazine: The Communists have an-
nounced that La Ul ima Hora will become a weekly tabloid magazine instead
of a daily newspaper. The US Embassy in Havana comments that the change
is probably due to the serious difficulty the Communists are having in
obtaining newsprint, to the fact that La Ultima Hora is no longer as necessary
to the Communists now that the daily Hoy is once again in circulation, and
to the Communist Party's poor financial situation which does not permit the
continued publication of two dailies. (C Havana 1095, 8 Jan 52)
Comment: Recent reports have made continual references to the financial
strain o Fie Communist Party caused by the expenses of its publications,(see
OCI Daily Digest, 4 Jan 52). Last November, it was reported.that the party
planned to organize bond-selling campaigns and other fund-raising methods to
secure enough money to continue the publication of its newspapers. It was
considered essential, however, that the party maintain the appearance of
the "independent" status of,Ultima Hora (so that it would not suffer suppression
along with Zoy) by limiting the publicity of the fund-raising campaigns to
, - alone. This present report attests to the carrying out of this policy.
8. hMICO. Decrees will discourage private uranium prospecting and exploi-
tation: Under recently published decrees, private firms in Mexico are not
guaranteed exploitation concessions over deposits of fissionable materials
which they may discover, even if such deposits are found on property cur-
rently being exploited for other minerals. Proposed revisions of the basic
mining law involve similar provisions. (U NY Times, 30 Jan 52)
Comment: No uranium is being mined at the present time in Mexico,
though the US is interested in stimulating prospecting. The present decrees
and the proposed legislation will serve to discourage both U5- and Mexican-
owned mining companies from engaging in such activity,
9. PANAMA. Czechoslovakia and Poland seek to establish missions in Panama:'
Po an and Czechoslovakia reportedly desire to establish diplomatic missions
in Panama. When questioned about the matter,. the Panamanian Foreign Minister
said Czechoslovakia had not made an official approach, but that the Polish
representative in Mexico had formally requested an exchange of ministers,
and had even submitted the name of the proposed chief of mission,
The US Ambassador believes that he may have persuaded-,the Panamanian
Government to refuse the Polish request. (C Panama City 656, 29 Jan 52)
Comment: It was reported last September that the Czechoslovak Minister
in Washington had made approaches to Panama for establishing official
Czechoslovak representation there. There are still, however, no diplomatic
missions from the orbit in that country,
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9 31Jan52
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 Approved For Rose 2001/09/06: CIA-RDP79T01146A700220001-1
The Polish and Czech desire to establish diplomatic missions in Panama
is probably motivated by a desire.of the Soviet Orbit to establish repre-
sentatives in key areas.
SECRET
10 31 Jan 52
Approved For Release 2001/09/06 : CIA-RDP79T01146A000700220001-1