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

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000700280001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 9, 2016
• Document Release Date: June 11, 2001
• Sequence Number: 1
• Publication Date: February 8, 1952
• Content Type: SUMMARY

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TOP SECRET
SECURITY INFORMATION
8 February 1952
US :OFFICIALS ONLY CIA No. 49526
Copy No. 4 6
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
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.
State Dept. declassification & release instructions on file
TOP SECRET
SECURITY INFORMATION
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SECTION 2 (EASTERN)
1. IRAN. National Front control of new Iranian Parliament foreshadows trouble:
The Shah is worried over the probable composition of thenew Majlis,Minister of
Court Ala has told the US Ambassador. National Front leaders have resorted
to terror and chicanery to secure the election of their candidates, and the
well-organized Kashani clique may control the new Majlis, compelling Mossadeq
to conform to its desires or resign.
The Shah fears also.that e erienced men in key positions will be purged
and replaced by National Front henchmen of little experience or ability.
There are even indications that the new government might attempt to change
the status of the armed forces, subordinating them to the government rather
than to the Shah. According to Ala, Mossadeq has refused to consult the Shah
on the grounds that he did not wish to involve him in current politics. (TS
Tehran 2976, 6 Feb 52)
Comment: Incomplete election returns indicate that National Front
candidates are running well ahead. Mossadeq's well-known attitude toward the
Shah and his conviction that the influence of the Shah and the army should be
reduced foreshadow parliamentary maneuvers to limit the ruler's power.
SECTION 3 (WESTERN)
2. FRANCE. French press attacks on Draper's appointment considered unusually
severe: The US Embassy in Paris reports that the recent French press attacks
on the appointment of William Draper as US special representative to NATO are
the most intense that the Embassy has witnessed against a high-ranking
American official. These attacks have come not from Communist-or extreme
rightist sources, but from large papers reflecting coalition sentiment.
(C S/S.Paris 4605) 30 Jan 52)
Comment: Mr. Draper's record of association with Dillon, Read, and Co.,
which has valuable investments in the Ruhr iron and steel industry, is at
the basis of French bitterness. The appointment was ill-timed to coincide
with increased German pressure for membership in NATO and has contributed to
French uneasiness on the whole German question.
- 25X1 C 25X1 C
3. VATICAN-SPAIN. Reports of negotiations for concordat denied:
the Italian Government has no in ica ion o
formal negotiations for a concordat between Spain and the Vatican. Its lack
of such information is significant because the Italian Ambassador to. the Holy
See is regarded as very competent and therefore likely to be cognizant of.
any such negotiations.
25X1A TOP SECRET
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25X1X
Comment: This report supports other indications (see OCI Daily Digest,
27 Oct 51 that the Vatican is not at present disposed to conclude a con-
cordat with Franco. the
Spanish Ambassador to the Va can has been instructed to press or a con-
cordat; but even he is pessimistic regarding the results of such pressure.
From time to time Spain and the Vatican have arrived at ad hoc agree-
ments clarifying issues on Church-State relations.
DENMARK. Foreign Office sees public not yet ready to receive foreign troops:
A Foreign Office official has informed the US Embassy that although Danish
military men appreciate the need for stationing NATO troops in Denmark,
responsible political leaders feel that the public must be accustomed to the
idea gradually. He indicated his belief, however, that construction of the
facilities that would be subsequently needed for the stationing of troops in
Denmark could be started. (TS Copenhagen 570, 4 Feb 52) 25X1X
25X1X
Comment: This statement essentially agrees
see uul.
Daily Digest, an 52. e s Y.Lvu-:Iv-LJv c& ber of
foreign technicians helping NATO facilities in Denmark and some NATO air units
occasionally using NATO bases in Denmark for temporary training purposes.
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SECRET
SECURITY INFORMATION
8 February 1952
US OFFICIALS ONLY OCI No. 3869
Copy No. 2 2 6
DAILY DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared pr iniarily
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. CZECHOSLOVAKIA. Ministry of Health announces new rewards for blood
donors: The Ministry of Health has announced that after 1 February
blood donors will receive 800 crowns for the first donation and 1000,
crowns for each donation thereafter, instead of food parcels. (R FBIS
Home Service, 6 Feb 52)
Comment: A previous report claimed that blood donation centers
have operated in Slovakia since October 10/51. The cash payment appears
sizable, as the average industrial. worker earns 3500 to 4000 crowns
a month. However if cash payment equals the value of food parcels, by
shifting to cash, the government is thereby reducing the gain to the
donor since the money allowed will not buy an amount of consumer goods
equivalent to the value of the food parcels.
2. Czech trade monopolies liquidate offices in Belgium: Offices
of Czech.firms in Belgium were liquidated, prior to October 1951 and
their directors recalled Their business
has been turned over to e gian firms which deal directly with Czecho-
Comment: This move is apparently a part of a general long range
program to eliminate Czech. trade organizations and personnel abroad
which stand between the foreign trader and the Czech production monopo-
lies. Other evidence reveals that the Ministry of Foreign Trade is
holding in reserve a plan to replace various foreign trade monopolies
with a single trade organization modeled along Soviet lines.
3, : Editorial enlarges on "bourgeois cosmopolitanism": A recent
editorial in Nove Slovo labels "bourgeois cosmopolitanism" as the main
ideological instrument of the "imperialist aggression" by which the
United States renders nations which wish to remain independent of US
control ideologically defenseless. According to Nove Slovo, cosmo-
politan ideology is spread by the Vatican in the form of "Vatican
Uni-ersalism," which supports the establishment of a world political
organization dominated by the US;; by Ziorism, which is Jewish bourgeois
nationalism controlled by the US; and by right-wing socialists. (R
TSPEC FBIS Home Service, 4 Feb 52)
Comment: This commentary shows that "bourgeois cosmopolitanism,"
as the term is currently being used in Czechoslovakia, refers primarily
to international movements with some ideological foundation which
represent, to the Communist party, an actual or potential threat to
Communist ideology as developed in the Soviet Bloc nations under Russian
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leadership. It should be noted that, ideologically speaking, Zionism
is only one aspect of the large-, "threat" to Communism, and that current
attacks by Czech leaders on '"bosmopolitanism" and Zionism should be,
read in this context. Such attacks are of course double-edged because
they also exploit :.hatever latent anti-Semitic prejudice exists in the
Czech populatic...
of considerable military construction in south-
western Rumania during the latter part of 1951. This construction
activity, which involves extension of two highways and a rail line,and
construction of a narrow gauge railway, is allegedly connected with the
construction by Soviet engineers of platforms for launching guided
missiles in the Muntele Mic area.
during the summer and fall of 1951
materials for building a radar station on Costila.Mountain were trans-
ported by road and cable cars in the Sinaia area'of sbuth-central.
Rumania. In October 1951 at least five antiaircraft artillery batteries
were reportedly in position at Sinaia. 25X1A
Comment: There is no further evidel-ice that guided missile launching
platforms are being constructed in southwestern Rumania. Both Muntele
Mic and Costila Mountain, however, are excellent locations for radar
installations. It is believed, moreover, that the air defenses of the
Satellite countries, particularly in southeastern Europe, are being
developed.
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SECTION 2 (EASTERN)
1. INDIA. Kashmiri Prime Minister criticizes UN action on Kashmir:
Kashmiri Prime Minister Sheikh Abdullah told the American and British
delegations in Paris that he doubts UN Representative Graham can solve the
Kashmiri problem under his present terms of reference. The Prime Minis-
ter believes that neither India nor Pakistan can now withdraw from its
position and that Graham's authority should be widened to allow con-
sideration of new solutions. Abdullah also suggests that Kashmiri refu-
gees would have to be repatriated before a fair plebiscite could be held
although this might prove impossible (S Paris DELGA 1308, 6 Feb 52)
Comment: High Kashmiri and Indian officials seem to be engaged in a
campaign to demonstrate to the United States and Great Britain the
knotty problems still to be faced before a plebiscite can be held in
Kashmir, and to convey that a solution other than an over-all plebiscite
would be preferable.
2.
Abdullah has already made it clear that he hopes the Legislative
Assembly of Indian-held Kashmir, which he controls, will eventually be
allowed todetermine Kashmir's relationship with India. He, has also in-
dicated his desire for a substantial degree of autonomy for Kashmir. .
INDONESIA. Government appoints ambassador to Communist China: The
Indonesian Government has officially announced the appointment of
Sudarsono as its first ambassador to Peiping. (C Djakarta 1103,
1 Feb 52)
Comment: The Indonesian Government has been represented by a Charge
in Peiping since it opened its embassy there in December 1950. The
appointment of an ambassador has been delayed until a person was avail-
able whom the government considered sufficiently experienced to fill
the post. A recent shift in several diplomatic assignments made pos-
sible the appointment of Sudarsono, former ambassador to India. The
appointment does not indicate any sudden concern over Indonesian re-
lations with Communist China.
INDONESIA/NETHERLANDS. Dutch-Indonesian talks at The Hague continue
unresolved: The First Secretary of the Netherlands Embassy in Washington
informed a State Department official that the Netherlands had rejected
Indonesia's latest proposal for solution of the New Guinea dispute... The
plan specified that an Indonesian governor be appointed for Netherlands
New Guinea who would be assisted by Netherlands advisers and would not be
exclusively responsible to Indonesia. He stated that Supomo, head of the
Indonesian delegation, had been 01obviously disappointed" at the Dutch
reaction.
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A i.
The Dutch official added that the treaties thus far proposed by Indo-
nesia as a substitute for the Union State would settle few details, and
would include even less than normal treaties of amity. (S to Djakarta 834,
6 Feb 52)
Comment: The Hague talks were undertaken in December at the insistence
of the Indonesian Government. No substantial progress has been achieved
to date on either the proposed transfer of de facto control over Nether-
lands New Guinea to Indonesia or on the abrogation of the Netherlands-
Indonesian Union and the necessary revision of financial, cultural, and
military agreements between the two countries.
4. INDOCHINA. French military position in Tonkin analyzed: The US Military
Attache, the chief of MAAG and the Legation staff jointly estimate that
.French Union forces are in little danger of losing any important position
in the Tonkin delta to Viet Minh attacks within the next few months ---ex-
cept for a possible withdrawal from the Hoa Binh salient. On the other
hand, it is unlikely that the strength or spirit of the Viet Minh will
decline.
The French defense of Hoa Binh has exposed other areas of the Tonkin
defense perimeter to Viet Minh infiltration and, owing to French casual-
ties, has reduced French capabilities to oppose a Chinese Communist
attack. There is no current "acceptable" intelligence indicating imme-
diate danger of a Chinese invasion, "though the pattern, initial pre-
parations and indications for such an invasion are apparent." (S Saigon
1556 6 Feb 52)
5. CHINA. Peiping denounces "oppression" of Chinese in Thailand: A Peiping
spokesman publicly denounced the Thai Government for arresting three pro-
Communist Chinese last December and allegedly deporting them to Formosa.
The statement warned the Thai Government to stop deporting Chinese to
Formosa -- lest the Chinese people have "sufficient reason" to claim a
"blood debt." It called upon Thailand to release all "patriotic" Chinese
now under arrest. (B FBIS, 6 Feb 52)
Comment: The Thai Government periodially threatens to deport un-
desirable Chinese to Formosa, but has never done so. Two groups of de-
portees in late 1951 were sent to Chinese Communist territory. In the
past year, Peiping has denounced the Thai Government for becoming a base
of US aggression,. for collusion in Chinese Nationalist operations in the
Sino-Burma border area, and for persecuting overseas Chinese. Such de-
nunciations have not yet become sufficiently fierce and frequent to sug-
gest imminent Chinese Communist military action against Thailand.
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6. Communist journals promise "liberation" of Hong Kong: Two Chinese
Communist newspapers in Canton on 6 February charged the British autho-
rities in Hong Kong with converting the Colony into a base for aggression
against China. Both asserted that Hong Kong is Chinese territory. One
stated that the Chinese would not "stand idly by" in the face of hostile
action; the other promised that the Colony will "eventually be`liberated."
(U UP, 6 Feb 52)
Comment: The Chinese Communist press has been denouncing the UK
daily for the past two weeks. One editorial employs precisely the language
used by Premier Chou En-lai prior to Chinese intervention in Korea; the
other is the first official statement of intention to "liberate" the
Colony. The word "eventually," however, suggests that an attack is not
imminent.
25X1X
East Germany to supply synthetic oil equipment to
-r-..
fications provide that each plant is to produce 150,000 tons of aviation
gasoline annually, using coal as raw material. Chinese coal is now being
shipped to Germany for analysis. Production will start at the lants
five years after the Chinese have placed the order
Comment; The Chinese Communists now have in operation in Manchuria.
at least one of the plants built by the Japanese to produce synthetic fuel
from coal. China is in great need of petroleum products and would un-
doubtedly be interested in building additional capacity.
8. Secret police official sentenced to death for corruption: The
Chinese Communist press reports that the chief of the administrative de-
partment of the Ministry of Public Security has been found guilty of cor-
ruption and sentenced to death. (U NY Times 7 Feb 52)
Comment: This Ministry is the approximate equivalent of the USSR's
Ministry of State Security (MGB). This functionary's position in this
Ministry suggests that he was a longtime Chinese Communist Party member.
He is the highest-ranking official of the Peiping regime whose death
sentence on any charge has been announced.
g. KOREA. ROK Police forcibly collecttiland payments from farmers: A
South Koreen newspaper stated that ROK police are forcibly collecting
from farms payments in kind for the land distributed in land reform.
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The paper vigorously condemned the forced payments, pointing out that they
are not taxes and the government should instead take legal steps to re-
cover the land. (U Pusan 768, 5 Feb 52)
Comment: South Korean farmers reportedly are already complaining
about the single-tax system under which an equivalent amount of rice is
collected-instead of cash. Confiscation of rice from farmers in arrears on
their land-sale payment will be an added financial burden on the tradi-
tionally overtaxed Korean peasantry.
11, Soviet investment in Japanese industry held unlikely:
25X1X believes that the prospects
though he does not rule out the possibility of covert Soviet investment
through sympathetic Japanese, the source has heard no mention of this
among the Japanese industrialists.
or Russian investment in Japanese industry are "extremely remote." Al-
On the other hand, Japan seeks US investments in the hope that
American capital will take the form of machinery, and that Japanese com-
panies will be able to manufacture American products under patent agree-
ments. The Japanese, who realize that the USSR can offer no such inducements,
will not encourage,or permit Soviet investments. Even if they thought the
USSR had something to offer, the inherent dislike of the Soviet8;would
deter industrial collaboration. 25X1A
Comment: While covert Soviet participation in small, financially-
straitened Japanese firms would afford the USSR intelligence "listening
posts," there are few private Soviet citizens in Japan to serve as go-
betweens, and it is doubtful if Soviet diplomats in Japan would engage in
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this activity.
12. People's Democratic Party scheduled to dissolves Kyodo News
Service reports that the People's Democratic Party was scheduled to be
dissolved on 7 February in favor of a new coalition opposition party.
Preparations have been completed for a meeting of the preparatory committee
of the new party on 8 February, although the Democrats and their support-
ing political groups have not yet succeeded in selecting a president for
the new party. (R FBIS Ticker, 7 Feb 52)
Comment: For several months the Democrats, the largest conservative
opposition party, have been negotiating in hopes of attracting into the
new party all the Diet groups between the Liberals and the Socialists,
as well as a number of ranking depurgees. The Japanese press has predict-
ed for several weeks that formation of the new party and its success de-
pend upon the selection for the presidency. Several prominent politicians
are rumored to have refused the presidency, probably preferring to see
whether the party wins wide public support before committing themselves.
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SECTION 3- (WESTERN)
1. GERMANY. Adenauer softens attitude on arms restrictions: At a meeting with
the ied. ig o mmissioners on February . ance or.Adenauer vigorously
rejected a French demand that Germany accept an arms restriction convention
Which would be a part of the Allied-German Contractual Agreement. He stated,
however, that when the general agreement is promulgated., he would be will-
ing to make some form of separate declaration affirming that security re-
strictions contained in the EDC convention would have "general" application.
The US High Commissioner felt that such a device might break the current
deadlock. (S Bonn 1437,. 5 Feb 52)
Comment: The proposed declaration would probably stipulate that West
Germany would limit arms production to those fields assigned it under the
EDC. his proposal is in essence the British position on security controls;
it is acceptable to the US, but not to France which stillvants the US to be
a party to any agreement on German security controls. 25X1C
25X1X
2. EAST GERMANY. New Center Party may be establisheds-
the projected .esta is ent of anew ent r arty in East
Germany and believes it would be the most suitable vehicle for exploiting
25X1A th dissident elements of the West German Center Party.
25X1A
Comment: The Communists might'direct the formation of an East German
Centerrar y in the hope of eventually developing an Fall-German's Center
Party with neutralist objectives;'but the expulsion of Helene Wessel a
staunch neutralist, from the chairmanship of the West German Center 'arty
suggests that few West German Centrists would be attracted to such a party.
A new East German Center Party would also be designed to strengthen the
facade of "independent democratic" parties, thus cleansing the political
picture against the possibility that a UN commission may be admitted to-
investigate political conditions preparatory to all-German elections.
25X1X
3. AUSTRIA POLAND. Poles renege on food shi ments: Poland has announced that
it cannot deliver to.Austria the16,000 pigs called for under the present
that refusal of the peasants to deliver livestock has createa a serious ood
problem in Polish cities. Austria's failure to obtain rye as a substitute
for the pigs is attributed to Poland's stockpiling of grains. (S Salzburg
Joint Weeks 5, 2 Feb 52)
Comment: US officials, who have been much concerned over Austria's
shipping of ball bearings to Poland in return for coal, recently proposed
that deliveries of ball bearings be suspended for a six-week period to see
trade agreement.
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whether Poland would retaliate. The present failure to carry out the trade
agreement with respect to meat deliveries provides a favorable pretext for
initiating such a test. There is no direct evidence available to support
the belief that Poland is-stockpiling grains. last summer's serious drought,
plus peasant unwillingness to fulfill planned grain deliveries to the gov-
ernment, probably accounts f or the Austrian failure to obtain the rye.
4. BELGIUM. Belgium more conciliatory in TCC negotiations-. In the current
bilateral discussions between Belgian and representatives on Belgium's
rejection of the TCC recommendations, the Belgian delegate stated that any
change in his country's attitude toward increased defense expenditures
must be balanced by a solution to Belgium's EPU difficulties,. In view of
Belgium's heavy extension of export credits, the delegate proposes that the
EPU guarantee free convertibility of currencies and that a special pre-
financing fund La' armament expenditures be set up. He suggests that this
financing of exports through EPU be recognized as an important contribution
to the defense effort as well as a heavy burden on the economy. Belgium
is also willing to clarify the misunderstandings attendant on its objections
to the TCC procedures. (S Brussels 1076, 1097, 1105, and 1106, 31 Jan,
3 Feb 52)
Comment: Belgium has still not indicated a willingness to make a firm
commitment for increasing its defense expenditures according to the TCC
recommendations. However, there has been over-all improvement in the
country's formerly intransigent attitude on defense spending (see CCI Daily
Digest, 16 and 18 Jan 52).
5. UNITED KINGDOM. Foreign Office proposes travel restrictions on Soviet
of icia .s~ The Permanent Unersecretary.o he.Britis oreign O ice has
approved a proposal for restricting the travel of Soviet.. officials in Britain.
The US Embassy in London reports that the proposal is identical with a State
Department draft on the same subject. The cabinet has not yet acted on the
proposal. Britain has hitherto been reluctant to take such retaliatory
action for fear of inviting further Soviet restrictions. (C London. 3384,
5 Feb 52)
Comment-. According to the proposal drafted by the State Department,
in which the US Embassy in Moscow generally concurs, the travel of Soviet
officials in the US would be regulated on the basis of reciprocity. Although
the related problem of the treatment of Western nationals'in eastern European
countries has been discussed in NATO, there is no indication that Britain
is willing to abandon its relatively cautious attitude toward retaliatory
action against the Satellite nations.
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6. Eden suggests UN investigation of Chinese Nationalist troops in Burma:
In the House.of Commons .foreign.policy.debate.on.5. ebruary,.Foreign c eetary
Eden proposed a "'small"' UN Peace Observation Commission to investigate the
Chinese Nationalist troops in Burma. Stating that it was necessary to es-
tablish the facts of the situation, Eden said the British Government would
support the proposal if Burma proved agreeable to it. (R London 3407,
6 Feb 52) 25X1X
Comment: this proposal was
being considers by the government primarily for i s probably favorable
effect on British public opinion as refutation of one aspect of left-wing
Labor criticism of Conservative Far Eastern policy. There have been in-
dications that Burma would resent any such proposal which it did not initiate.
7. Britain wants early discussions with Turkey on MEC: London has pro-
posed to Washington and Paris tha urkey an eece be-brought into Admiral
Carney's Southern European regional.c ommand under SHAPE, with a reminder
from the US, the UK and France to the Turks that they are expected to make
a contribution to the NEC. The British propose an early meeting in London
between these three powers and Turkey to proceed with the organization of
an MEC. US Ambassador McGhee, who received this information from the British
Ambassador in Ankara, reports the latter as concerned over London's tendency
to seek tripartite agreement on NEC matters to be presented as a fait accompli
to Turkey. Pointing out that Turkish participation in the NEC is generally
unpopular in both government and private circles, McGhee urges against tri-
partite agreement on the meeting or any'other NEC matter without prior con-
sultation with the Turks. (S Ankara 710, 5 Feb 52)
Comment: In the face of adamant Turkish opposition, the British recently
abandoned their plan to associate Turkey only with an NEC and agreed to its
forces being placed under Eisenhower. Turkey has indicated willingness to
participate in an NEC after it becomes a NATO member.
8. BRITISH CENTRAL AFRICA. Churchill government advances date f or?conference
on federation: Br tain has ca led a conference of representatives of
Northern and Southern Rhodesia and Nyasaland for April to seek to compromise
differences on the Central African federation plan proposed under the Labor
government. (U NY Times, 5 Feb 52)
Comment;- The Churchill government has advanced by several months the
scheduled meeting on this project, which is partly intended to enhance the
economic viability of this mineral-rich area and strengthen it .politically
against expansionist tendencies in the Union of South Africa. There is
still no indication, however, of how Britain intends to meet the opposition
of the native Africans, who fear complete subordination in any federation
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including Southern Rhodesia with its highly race-conscious white settler
government.
9. ARGENTINA, Government arrests 150 persons for plotting; The Argentine
Government has arreste approximately. 50 persons, inc uding members of
the Radical Party and military and police officers, on'charges of plotting
to assassinate the Perons and overthrow the government. (C Buenos Aires
564, 6 Feb 52)
Comment: The Radical Party denies participation in the alleged plot.
An exiled naval_ officer in Uruguay states that certain members of the
Argentine armed forces are still making plans to oust Peron despite the
latter's security measures (see OCI Daily Digest., 5 Feb 52).
ARGENTINA-PARAGUAY. Paraguay to permit Latin American labor conference
to meef.in sunciona As a.resu t.of.representations made by the Argentine
an Uruguayan general labor confederations, President Chaves has agreed
that Paraguay will act as host at the Latin American labor conference
called by Argentina for 9 to 17 February. His decision was embarrassing
to the Paraguayan Confederation of Workers, which had released a state-
ment that it would not participate in an effort to form a new Argentine-
sponsored labor bloc. (C Asuncion 218, 2 Feb 52)
Comment; The government-dominated Argentine Labor Confederation is
trying to promote a third-position labor organization (see OCIDaily Digest,
1 Feb 52) and the establishment of Argentine-oriented confederations in
other Latin American countries. According to a Costa Rican broadcast., the
meeting in Asuncion will discuss a joint Latin American trade unions com-
mittee.
PANAMA. Canal Zone policies blamed for Panama's economic difficulties:
Various impor an anamanians.are.en orsing.a.ea ing.newspaper,.s.e i orial
which blames Canal Zone authorities for the progressive industrialization
of the Canal Zone and for the consequent "competition" which is "strangling
the Panamanian economy."' US Ambassador Wiley reports that-the President
and most of his cabinet approve the line taken in the editorial. The
Ambassador has been informed that the editorial is the opening gun in a
campaign which will "culminate in a demand for 'nationalization' (inter-
nationalization?) of-the Canal." (C Panama 686, U Panama 681 and 682.,
5 Feb 52)
Comment: In recent years, many Panamanians have expressed the
opinionia enterprises in the Canal Zo ne compete unfairly with enter-
prises in the Republic. Ex-president Arnulfo Arias reportedly plans to
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start a campaign for the nationalization of the Panama Canal. The only
overt expression to date in favor of nationalization, however, has been
an editorial printed in an influential tabloid last October (see OCI
Daily Digest, 24 Oct 51).
12. VENEZUELA. Cominform reportedly suggests A ril oil workers' strike:
Cuban Communist Sara accual, who was reportedly in Moscow in December,
arrived later that month in Venezuela allegedly carrying Cominform orders
for anti-government activities. She is said to have conferred with
Venezuelan Communist leaders on the possibility of calling an oil strike
25X1A in April.
1,3.
Comment: This is the first report of a Cominform directive to the
Venezuelan'-C'ommunist Party. The significance of April as a time for a
Cominform-inspired strike is not entirely clear, though it may have been
chosen to coincide with the anniversary of the government-imposed labor
contracts. Pascual was in Europe since last spring;. she reportedly visited
Czechoslovakia, Hungary and the USSR, but is not known to have visited,
Cominform headquarters at Bucharest,
CANADA. Contribution to NATO to be increased: Canada has agreed to allot
to NATO an additional 10-0 million dollars ouT of its 2.4-billion-dollar
defense budget. This sum, like the 225-million-dollar NATO contribution
previously provided for in the 1952-1953 defense budget, will be in the
form of military items manufactured in Canada. (S Ottawa 124, 5 Feb 52)
Comment: This increase in the Canadian contribution to NATO is
more substantial than had been expected after the cabinet's rejection last
month of the TCC's recommendation that Canada grant 200 million dollars
of economic aid. Finance Minister Abbott had indicated earlier that '
the contribution.. would be limited to the difference between actual de-
fense expenditures and the-amount budgeted. The cabinet still refuses
to increase. the total Canadian defense expenditure for 1952-1953.
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