TOP SECRET SUPPLEMENT TO THE DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000700290001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 12, 2016
• Document Release Date: June 12, 2001
• Sequence Number: 1
• Publication Date: February 11, 1952
• Content Type: SUMMARY

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TOP SECRET
SECURITY INFORMATION
11 February 1952
US OFFICIALS ONLY CIA No. 49527
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.
25X1X
SYRIA. Syria's difficulties blamed on French influence:
attributed Syria's
He charged that this had been made possible by American and British
acknowledgement that Syria. and Lebanon belonged to the French sphere of in-
fluence.
current difficulties to ranee s policy or see zng To exploit the country.
stated that France maintains its control over Syria primarily
through the "Banque de Syrie et Liban" and through influence over the Syrian
army. He further charged that the French had deliberately killed the
potentially important Syrian-Iraqi trade agreement and had also opposed Syrian
acceptance of US economic assistance.
According Army Chief of Staff Shishakli is becoming in-
creasingly unpopular, can get no res onsible people to join his government,
and keeps control only by force.
Comment: France considers its position in Lebanon and Syria as privi-
leged and wishes to strengthen it even at the expense of the US and Britain.
French support of Shishakli has been generally assumed. At present, rumors in
the Near East suggest, howevera that Shishakli's "puppet" Chief of State,
Fawzi Selo, might receive French assistance in attempting to end Shishakli's
power.
SECTION 3 (WESTERN)
2. SWITZERLAND. Swiss atomic energy program makes no progress: The Swiss Atomic
Energy Commission made no progress in 1551 toward the construction of a uranium
pile because it was unable to import any uranium. All attempts to obtain
uranium from Spain and Portugal have proved unsuccessful.
During the course. of 1951 the Commission held regular meetings, however,
at approximately three-month intervals, to permit an exchange of information
between scientists and industrialists. The main impulse for holding these
gatherings has come from Swiss industrial concerns.
25X1A
25X1A
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SECRET
SECURITY INFORMATION
11 February 1952
US OFFICIALS ONLY OCI No. 3870
Copy No.22 6
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.
SECRET
SECURITY INFORMATION
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SECRET
SECTION 1 (SOVIET)
1. USSR. Soviet Union reported willing to underwrite trips to Moscow Economic
Conference: The Soviet Mission in Tokyo told Kyodo news agency that Moscow
will foot all the bills for Japanese delegates to the International Econom-
ic Conference which begins on 3 April in the Soviet capital. The Mission
spokesman said that delegates from other countries will also be taken care
of since the Soviet Government has invited them to come to Moscow for the
period of the conference. Tours of the USSR will also be arranged by the
government after the conference. (U FBIS, 7 Feb 52)
Comment: The only previous information received of financial arrange-
ments for the conference was a reported offer of the USSR to pay delegates'
expenses after they had reached Prague. Soviet willingness to underwrite
the event would be further evidence of the conference's importance to
Kremlin strategy.
Another source reported that trips and entertainment would be used
to keep the visitors in the USSR until the spectacular May Day celebra-
tion.
2. Kirovograd orders radio registration: In accordance with a decision
of the Executive Committee of the Kirovograd Oblast Soviet of Worker's De-
puties on 2 February, radio owners must register their instruments at the
Ministry of Communications.
Registration of radio receivers and payment of subscription fees can
be made locally, in Kirovograd, or at any oblast, rayon, or other branch
of the Ministry of Communications. Owners'must pay subscription fees
twice annually, and those guilty of avoiding registration of radios "will
be subject to criminal prosecution." (R FBIS 8 Feb 52) STATSPEC
Comment: Enforced registration of radios performs a twofold purpose
in that it not only brings in a substantial revenue, but more important,
it exercises an additional and strict control over the owners themselves.
Varied air service found in Khabarovsk: Air flights connect Kha-
barovsk with Moscow and many other Far Eastern cities such as Petropav-
lovsk, Yuzno-Sakhalinsk, Nikolaevsk, and Vladivostok. The Khabarovsk-
Petropavlovsk journey, which requires many days travel by rail and sea,
takes only "a few hours" by air, under the airways system operated by
the Far Eastern Administration of the Civilian Air Fleet. Mats~of Pravda
and Red Star are received from Moscow in Khabarovsk within 24 hours, (R
FBIS 29 Jan 52)
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Comment:. Increased activity of Soviet transport planes has been
noticed throughout 1951. Recently, a Soviet Information Bureau article
observed that transport planes departing Moscow's Vnukovo airport had
carried 30,000 more passengers in the first ten months of 1951 than during
the entire preceding year. In the same period, one and a half times more
freight and twice as much mail as in 1950 is reported to have been trans-
ported by air.
4. CZECHOSLOVAKIA. Agenda, of Brno party meeting reveals popular dissatis-
faction: A recent regional meeting of the Communist Party at'Brno indi-
cates the extent of popular discontent in Czechoslovakia. The meeting
discussed and condemned public dissatisfaction over the decline of con-
sumer goods resulting from concentration on heavy industry, opposition to
collectivization in the villages, general resentment against the govern-
ment's wage policy and the high salaries of party officials in particular,
and general hostility to the new rationing system. .(S Prague Joint Weeka
5, 1 Feb 52) '
Comment: During 1951 the government laid much stress on the evils
of an "egalitarian" wage policy. Premier Zapotocky complained in October
that the government had been authorizing bonuses and overtime for which
it had been getting no return, and made it quite clear that in the future
wages would be used simply to get more production. Discrimination against
non-productive citizens has been evident in the new rationing system.
Minister of Defense rumored purged: The latest unconfirmed rumor
in Prague is that Minister of Defense Cepicka has been removed and is
possibly under arrest, The US Embassy observes that Cepicka, who is
fond of the limelight, was not on hand to greet Vyshinsky during his stop-
over on 23 January, and that his name has not been seen in the press for
ten days. (S Prague Joint Weeka 5, 1 Feb 52)
Comment: There has been no previous indication that Cepicka, who
is President Gottwald-Is son-in-law, is in trouble. Cepicka, a Politburo
member, is one of the youngest and most capable of the Czech Communist
leaders. As Minister of National Defense and in his earlier post of
Commissioner of Religious Affairs, Cepicka has demonstrated his ability
as a "trouble shooter".in national defense and religious affairs.
25X1C
25X1 C
6. CZECHOSLOVAKIA/HUNGARY. Most Satellite refugees flee for personal reason:
Lack of political freedom is not the reason most of the refugees from Hun-
gary and Czechoslovakia leave their countries,
Basing its conclusions on impressions gained
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25X1X
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25X1 C
most flights are caused by personal
problems arising from conditions caused indirectly by the suppression
of political freedom. If the personal problem had not arisen, the
refugee would probably have continued to live under the Communist Govern-
ment.
this does not imply
that the majority of citizens of these countries are satisfied. On the
contrary, refugees have asserted that, only about 5% of the Hungarians and
20% of the Czechs approve of their government. (S Vienna Desp 867, 6 Dec
51)
7. FINLAND. Premier's statement regarding Scandinavia poorly received: _
Finland's Prime Minister Kekkonen has
become very irritated over Social Democratic dissatisfaction with his
recent statement that the Scandinavian countries should form an independent
neutral bloc. Kekkonen has reportedly sent a letter to the chairman of
the Social Democratic Party ing
Social Democratic support. the
Social Democrats will continue to oppose what they call a onen s "boot-
licking and bowing eastward," 25X1C
According to the US Legation in Helsinki, editorial comment on the
statement was generally unfavorable, the principal objections being that
the concept of such a bloc was obsolete, and that Finland should continue
to avoid, as in the past, such gratuitous meddling in great power contro-
versies. Reports.that the move was inspired by the USSR have become more
insistent. The Foreign Minister is known to have been consulted in ad-
vance regarding the statement and no one doubts that President Paasikivi
must have agreed to it. Helsinki
Joint Weeka 5, 1 Feb 52) 25X1A
Comment: That fact that Kekkonen had the approval'of the Foreign
Minister would suggest strongly that the statement was made upon'unofficial
advice from the USSR. The lack of consultation with the other political
parties in Finland, with whom such a statement could be expected to be un-
popular, further supports the belief that Kekkonen was acting upon a Soviet
suggestion and did not wish to risk public foreknowledge which must have
occurred had he consulted with the Finnish political parties.
As a result of Kekkonen's failure to consult with the Finnish politi-
cal parties'in advance, there is little chance that they can now be per-
suaded to support him in the Diet should the matter be pushed as far as
a vote of confidence.
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8. YUGOSLAVIA. UN delegate appraises sixth session of'the UN General Assembly:
Alexander Bebler, chief Yugoslav UN delegate, believes that tensions be-
tween the US and the USSR have reached a level where they seem likely to
subside rather than to increase, and that the sixth session of the UN Gen-
eral Assembly could have marked the end of growth of these tensions.
Bebler suggests that the US delegation failed to exploit several
propaganda opportunities. He contends that the United States should have
strongly supported the principle of universality of membership and that
this support would have forced the USSR to advance conditions for member-
ship which would have been unacceptable to a majority in order to prevent
the establishment of additional Satellite relations with the West. In
addition, Bebler believes that the US. -Dermitted the USSR to pose as the
champion of a unified Germany even though it was the country most opposed
to unifications. (U Paris DELGA 1300, 5 Feb 52)
Comment: Bebler's opinion that East-West tensions are likely to sub-
side stands in sharp contrast to the recent statement of Katz-Suchy, the
Polish delegate, who advanced the opinion that the 1952-53 session of the
UN would be extremely critical because this period would be one of "su-
preme tension" between the US and the USSR.
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SECTION 2 (EASTERN)
1. GREECE. Government plans arrest and exile of dangerous subversives: Greek
authorities are preparing a list of 150 Communists and other subversives
25X1A for arrest and exile in the near future. The list includes some persons
who have been released recently from prison. The government ho es this
action will isolate the more dangerous elements.
25X1A
Comment: The program appears designed not only to increase internal
stability but also to refute opposition charges of government laxity in
screening the political prisoners it has released since taking office.
2. ISRAEL. Interest in closer military ties with the West expressed: The
Israeli Foreign Minister has informed General Eisenhower that Israel is
directly interested in the proposed Middle East Command because Arab
hostility has isolated the Jewish state from neighboring countries. He
pointed out that Israel's trained manpower reserves and expanding indus-
trial potential would be very useful to the West. He suggested that his
country should be given a separate and special position in the Middle
East Command which would guarantee Israeli territory against any Arab
25X6,
The Israeli Prime Minister has also proposed that "concrete
lens mizht well be initiated now" to establish IrrnAli +.i s.. 25X6
25X6 an exploratory mission to Tel Aviv to discuss matters
Aviv A-220, 5 Feb 52)
of strategic interest to both countries. (S Paris 4807, 7 Feb; S to Tel
Comments This is the clearest indication to date that the Israeli
Government actually desires closer alignment with the West. Strengthened
Western ties would assure, Israel protection against any Arab threat as
well as Western help in solving its desperate economic problems.
25X1X
3. SYRIA. Government may fall by end of March: 'The present- Syrian Government,
which is under the control of Chief of Staff Shishakli, cannot last beyond
March. the breach
between Army leaders and politicians is widening, and there are signs of
dissension between Shishakli and Colonel Fawzi Selo, the Chief of State whom
he recent installed. 9 Feb 52) 25X1A
Comment: Shishakli has been in virtual control for over two years despite
several efforts to remove him. Recent reports indicate increased dissatisfaction
and new plots to dispose of Shishakli. There is no indication, however, that his
removal by force would necessarily result in anything but the establishment of a
new military dictator.
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I}. EGYPT. Wafd accused of supporting recent riots in Egypt: The 26 January
riots in Cairo were financed to the extent of 10,000 Egyptian pounds or
29,000 dollars by secret funds taken from the Ministry of Interior by the
Wafd Secretary General Serageddin, who was at that time Secretary of the
Interior, theEe funds were
given to Socialist leader Ahmed Husayin, currently under arrest for his
part in the riots. It is also reported that auxiliary and regular police
helped incite students to anti-British action on the day of the riots.
25X1A
Comments While the Vfafd, according to the American Ambassador in
Cairo, is now spreading the -story that palace intrigue and British bribery
of police caused the riots, the Wafd is at least guilty of indirect involve-
ment. It deliberately fomented anti-British sentiment during past months
and openly permitted the extremists to organize into freedom battalions.
According to reliable reports the police,'who are directly responsible to
the government, did not oppose the mobs on 26 January and at times joined
with them,
5. IRAN. Foreign cultural offices in Tehran may be closed: The Iranian
Government is seriously considering the closing of foreign cultural and
information offices in Tehran, as well as the provinces. Although the
government has assured the US Embassy that the order closing provincial
offices was aimed at the British and Russians, not at the United States,
the Embassy believes that extension of this policy to Tehran would indicate
an anti-foreign policy rather than one simply anti-British or anti-Soviet.
(S Tehran 2989, 7 Feb 52)
Comment: The Iranian Government's policy of obtaining public support
through the promotion of anti-Britishsentiment has already led it to take
increasingly severe measures against foreign activities. The need to
continue such a policy as well as the growing xenophobia which it has helped
create may well induce the government to take further steps against foreigners.
6. PAKISTAN. Soviet Government, demands recall of Pakistani Embassy official
in Moscow: The Soviet Government has demanded the recall of a Third Secre-
retary from the Pakistani Embassy in Moscow. According to the. Pakistani
Foreign Office, the demand was made on trumped up charges, and the
Karachi government is considering retaliatory expulsion of a member of the
Soviet Embassy. Soviet police reportedly held the Pakistani official for
questioning and tried to extract confidential information from him in
return for his release. (S USARMA Karachi, vveeka 6, 8 Feb y2)
Comments This is the first known instance of serious diplomatic
friction between the USSR and Pakistan, although Soviet propaganda has
occasionally been unfriendly.
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The reason for the Soviet action is unclear. The USSR is presumably
aware. of the; fact that this incident will increase the suspicion already
felt by Pakistani government leaders.
INDIA. Indian requirements for American food grains in 1952-53: The
Planning Commission in New Delhi estimates that for the year beginning
1 July 1952, India will require from the United States 2,180,000 long
tons of food grains in addition to quotas allotted to it under international
agreements.
Of this total, the Indian Food Ministry has earmarked funds to
purchase 778,000 tons. In order to conserve dollar exchange, the Planning
Commission has suggested that another 675,000 tons, worth 65 million dollars
be granted to India under an aid program similar to that recently advocated
by US Ambassador Bowles. No suggestion has yet been made about financing
the remaining 727,000 tons, whieh.would cost approximately 70 million
dollars. (C New Delhi"2802,, 5 Feb 52)
Comments The United States and the Communist Orbit are the two
sources best able to supply India with the needed food supplies.
Indications are that the United States will receive the first request
for a grant or loan of most, if not all, of the 135 million dollars
worth of grain for which India has not already allocated funds.
In 1951, while.the United States was considering an Indian request
for 190 million dollars worth of American grain, the USSR and Communist
China achieved a propaganda victory by offering grain at reduced pr,4Lces
to India and by making delivery prior to the arrival of the first American
food ship.
This year, the Communist Orbit is in a position to repeat last
year's performance and has already indicated its willingness to do so.
Furthermore, Indian Communises have recently shown unexpected strength
in the national elections in the food deficit states of southern India;
unlike last year they are now in a position to debate food issues.in
both state assemblies and the national Parliament.
8. INDONESIA. Government allegedly trains group for subversive activity in
des ew ineas i een persons rom a an, par o a group the In-
donesian Government is training for subversive activity in West Irian
(West New Guinea), departed for Djakarta on 26 January. There they will
join other member- of the group from various parts of Indonesia and will
proceed to Irian at an unknown date.
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Comments An earlier report stated that this subversive action group
included members of Pemuda Rakjat, a Communist-led youth organization,
and that one of the Medan leaders had formerly participated in Communist
military activity. It seems unlikely that the government would deliberately
invite the aid of a Communist group for su}versive activity particularly
in view of its current efforts to retard Communist growth. The possibility
remains that if the government is engp.ged in committing agents to Irian,
it is unaware of extreme leftists in the group.
It appears more :.ogical that the Communists not the government are taking advantage of popular excitement over the Irian issue and are
attempting to infiltrate a subversive group into the area. They may
even have insinuated to recruits that the project was a government
undertaking.
25X1X
25X1X
9o BURNA. Chinese Communists reportedly seeking uranium&
of the Shan States, that four top Chinese Communist geologists were search-
ing for uranium in Mongkung state. 25X1A
Comments The Burmese Government?s control over northeastern Burma
is so weak that a few Chinese scientists could enter and carry on operations.
The Shan States are a good probpecting areas, and Mongkung is not far from
the site of the Bawdwin Mines at Namtu which have produced large quantities
of valuable mineral ores, including lead9 silver, copper, nickels gold and
antimonyo
10o MALAYA. MacGillivra appointment is unanimous) disapproved : The initial
reaction to the appointment on February of MacGillivray as Deputy High
Commissioner is unanimous disapproval. Asian leaders are angry because
no Malaya-experienced personnel have been retained at the top. Several
Legislative Council members who wanted an Asiaaappointed Deputy High Com-
missioner stated that they will move for a vote of censure at the first
instance of failure on the part of the new appointee.
American Consul Van Oss comments that, although the British appointment
may have erred.in rebuffing elements in Malaya whose trust and cooperation
is essential, it was difficult to find a suitable choice among the Malayan
Civil Service, and the few Asians who might have the administrative capacity
are too involved in politics. Therefore an outside choice was essential.
(S Kuala Lumpur 141, 6 Feb 52)
Comments Deputy High Commissioner MacGillivray has a recQrd of long
service in Palestine, and more recently has served as governor'of Jamaican
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The High Commissioner is General Templer, appointed on 15 Januarys He is
a former Director of Intelligence in the London War Office but, like
MacGillivray, has had no experience in the Far East.
The post of deputy commissioner, entailing primarily responsibility
for administration, was created in January to leave General Templer free
to consider broad policy matters and to concentrate on the campaign against
the terrorists.
25X1 C
11. INDOCHINA.. Threatened mutiny among Vietnamese officer candidates: The
American Consulate in Hanoi transmits reliable reports received by a
that some 200 Vietnamese officer candidates now
on leave in Hanoi have threatened to refuse to return to their training
area. The two principal grievances are that induction has been discrimina-
tory and that assignment of trainees has not taken into account their
"special intellectual status" as university students. The slogan of the
hold-outs is: "There is nothing to fear now, De Lattre,is dead." French
officials now in Indochina are hesitant to assume responsibility* (S Hanoi
531, 7 Feb 52)
Comments Since the inauguration of the officer training program last
September, there has been considerable discontent among the trainees.
Other grievances have been., inadequate food and quarters; disrespectful
treatment from French soldiers.; and inadequate appeal to nationalist
sentiment of the Vietnam National Army as now constituted. The series
of statements hinting at a negotiated peace in Vietnam made by French
Government officials is another important factor which tends to weaken the
Vietnamese will to fight.
12. CHINA. Chinese postpone Sino-Soviet Friendship Week indefinitely: The
Sino-Soviet Friendship Assoc a ion s iea qq ai in eiping announced
on 7 February that "Sino-Soviet Friendship Week" had been postponed until
further notice. The postponement was attributed to t he'demands of the
present nation-wide campaign against corruption, waste, and bureaucracy.
The-announcement stated that "appropriate celebrations'! should be held on
14 February, the anniversary of the signing of the Sino-Soviet treaty of
1950, and that propaganda designed to promote understanding of the treaty
should be carried out. (R FBIS Peiping, 8 Feb 52)
Comment: Peiping may be telling the truth'in srbating that it is too
occupied with its current anti-corruption campaign to do justice at this
time to a special drive for Sino-Soviet friendship. There is no evidence
that a cooling of Sino-Soviet relations is responsible for this develop-
ment.
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13. New roads in Yunnan Province reported: who left
Yunnan in the fall of 1951 report that the Communis s are building new
roads and repairing old ones all over Yunnan." One new road leads north
from the Burma Road at Hsiakuan toward Sikang,.which borders Tibet. The
this road had been completed as far as Atuntze near
e ST Rang border. They also heard of a new road under construction to
the Burma border, roceedin south from Chennan on the Burma Road through
Chingku to Fohai. flown from Kunming to Chungking, 25X1X
reported no airplanes other than civil transports at-Kunming or Chungking.
(C Bangkok Unnumbered., 29 Jan 52)
. Comment: Other sources establish that the Communists began building
this Yuan'Tibet" highway in 1950. There are no previous reports of
plans-to build a road from Chennan to Fohai.
14. KOREA. Rhee scores unexpected by-election victory: Government intervention,
reports Ambassador Muccio, may have occurred to some degree in the recent
ROK by-elections, in which s'pporters of aging autocratic President Rhee
made nearly a clean sweep. Seven pro-Rhee candidates were successful in
the contest for eight vacant National Assembly' seats, despite a hotly
contested campaign waged by the opposition Democratic Nationalist Party.
(C Pusan 776, 7 Feb 52)
Comment: While the success of the pro-Rhee candidates may have been
partly due to actions of the ROK police under Rhee's notorious Home Minister
"TMSontana" Chang and to Youth Corps "goon squads," Rhee's prestige played
the major part in the victory.
The National Assembly has been locked in a power struggle with the
President for a long time. Recently there has been some speculation that
Rhee's chances for reelection to the presidency have decreased. This
manifestation of por'ilar support, however, should create,a considerable
desire to climb on Rhee's bandwagon prior to the Assembly's election of
a new president this June.
15, JAPAN'. Progressive Reform Party established- US Political Adviser
Seba)d repor s from Tokyo that on February the former Democrats, the
Farmers Cooperatives and a group of depurgees called the Shinsei Club
inaugurated a new party and adopted the name of the Progressive Reform
Party. The new group has a Diet strength of 72 members in the Lower House,
out of 1466, and 14 in the Upper House, out of 250. Seventeen Upper House
Democrats refused to join the new conservative party.
The convention demanded as a Hart of its platform the conclusion of
a US-Japan defense pact on equal terms, including an independent self-
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defense corps and the early return of the Kuriles, Sakhalin, Bonins
and Ryukyus.
Most of the press was skeptical of the new party's success because
of the conflicting elements invr wed and inability to find a president
(See Daily Digest 8 Feb 52)0 (U Tokyo 1659, 9 Feb 52)
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SECTION 3 (WESTERN)
1. GENERAL" Growing friction with Europeans over Battle Act expected; The
US delegate-to.C000M believes . that. American. policy. under. the Battle Act
is likely to cause "considerable commotion," possibly with serious effects
on cooperation by other participating countries. He was recently obliged
to submit a modified statement on trade controls after the original sub-
mission was severely criticized by all the other delegates. The European
delegates objected to the "paternal tone" of the first US statement and
accused the US of trying to impose a unilateral interpretation of what
has been agreed upon. They also objected to the emphasis on the quid
pro quo principle and to the effect which the denial of US exports to
friendly countries would have on COCOM agreements. (S Paris 4742, 5 Feb 52)
2. Proposed labor secretariat for Schuman Plan may be effective
anti-Communist.weapon,..The Belgian metallurgists union is expected to
issue a manifesto calling on the mine and metallurgist unions of France,
Germany, Italy and Benelux to create a joint labor secretariat to meet
the purposes of the Schuman Plan. The program, under which demands of the
workers of the six countries would be presented to the Schuman Plan authori-
ties, is not expected to conflict with the consultative powers of the pool's
labor-management group. Francets Socialist labor federation favors the
idea and hopes that the new secretariat will attract members of the Communist
labor federation. (C Brussels 1123, 6 Feb 52)
Comment: Adoption of this program would probably take the initiative
in labor's demands from Communist elements in the German unions and from
the Communist unions in Italy. It might also serve to neutralize the
French Communist labor campaign against the coal-steel pool.
3. AUSTRIA, Government concerned over reaction to Foreign Minister's speech,
The Austrian Chancellor and Vice-Chancellor are annoyed by Foreign Minister
Gruber's recent policy address, which has been under violent Communist
attack for some days. Fearing a strong Soviet protest to the Allied
Council, the government has officially denied the implications drawn from
Gruber's speech. These were that Austria (a) has made proposals to the
West to meet any Russian move to partition Austria, (b) has decided to
refer the Austrian question to the.UN, (c) expects to place at the dis-
posal of the Americans a number of Austrian divisions, and (d) intends to
interfere with supplies for Soviet enterprises.
The Foreign Minister's speech has revitalized Communist allegations
that Austria is being remilitarized and has probably worsened the unfavor-
able atmosphere for the introduction of new proposals by the West for an
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Austrian settlement. While the government may be reluctant to drop Gruber
while he is under fire, his none-too-strong position in the cabinet ap-
pears to have been further jeopardized. The Western High Commissioners in
Vienna have cautioned the Foreign Minister that it is inadvisable to refer
to possible utilization of Austrians in Western defense plans. (Factual
data from: S Vienna 2554, 7 Feb 52; R FBIS Vienna Radio Ravag, 7 Feb 52)
4. Soviet enterprises procure petroleum machinery from Saar with
French connivances The Soviet Oil Administration in Austria (SMV) re-
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portedly received from a Saarbruecken manufacturer last summer five high-
pressure compressors useful in petroleum refinery and gas transmission
operations. Intermediaries in the original sale allegedly were an Austrian
firm in the international sector of Vienna and an Austrian engineer described
US authori-
ties reportedly asked France to prevent the delivery. The compressors,
were, however, ultimately shipped to SMV via Switzerland and the French-Zone
of Austria.
Comment: If, as alleged, the French authorities were informed of US
objections to the delivery of the items, the unusual choice of a shipping
route through Switzerland and the French-Zone of Austria may have been due
to a desire to avoid possible confiscation in the US Zoned of either Germany
or Austria.
5. ITALY TRIESTE. Early Trieste elections favored by local Italian parties
said that his statement represented the view of the-Christian Democratic
Party in Rome. (S Trieste 743, 5 Feb 52)
Comment: The Christian Democrat-dominated Italian Government, which
has been seeking US and UK approval of the extension to Zone A of the Italian
electoral law, has apparently been pressing the Italian parties in TniLeste
to support a linked-list system. Under this law pro-Italian democratic
parties could pool their votes in combined lists and thus insure a majority
in the Trieste communal council.
to confer with a high official of Premier de aspen s own o is
negotiations over Trieste were not imminent.
the local Italian parties would like elections at an early date, provided
the Italian electoral law were extended to the Zone and Italo-Yugoslav
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6.
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7. British seen as wanting to decrease importance of OEEC;
Britain . is. trying to reduce
the importance of OEEC by transferring certain of its functions to NATO,.
feels that an economic organ under NATO could not effectively
superse e OEEC without full German participation, which both Britain and
France oppose,,
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At the NATO Council Deputies' meeting on 23 January, the UK representa-
tive maintained that since the division of US aid is now a NATO matter,
future OEEC functions should be primarily in the trade and payments field.
He recommended a "clean break" between the two organs and added that this
would not occur if NATO were moved to Paris,. (S The Hague 8073 6 Feb 52;
S London Depto 868, 24 Jan 52)
Comment; Although the British probably favor the creation of an
economic unit within NATO on its own merits, their stand is undoubtedly
influenced by a desire to keep NATO in London,
8. UNITED KINGDOM-- 5 t Lr;, au a d fall 0.~ tf,5"s o f' a t4: fie, d t:u ssed
nAninterdepartmental comma ee in Lon onhas recommen e `agasns h gran ing
of .a 20-million-pound loan to Israel on either political or economic grounds.
However, it is possible that a loan, which Israeli Foreign Minister Sherrett will
discuss again with the British, may still be made for such strategic pro-
jects as improvement of the port of Haifa. Sherrett will also raise the
question of resuming full operation of the Haifa refinery. The Israelis
still consider the construction of a pipeline from the Gulf of Aqaba to
Haifa the best way to supply the refinery with oil from Middle Eastern
sources. (S Tel Aviv 801, 6 Feb 52)
Comment: In November British Treasury officials felt that the British
financial situation made it impossible to do more for Israel than permit the
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sale of 5 million pounds of sterling securities held by Israelis. The
refinery situation looks equally unpromising. The British do not con-
sider the pipeline an economically attractive proposition. In addition.,
they will not want to antagonize the Arabs by pressing Egypt to permit
passage through the Suez Canal of oil tankers for Israel as requested by
the UN resolution of last August.
9. BOLIVIA. Anti-junta demonstrators threaten violence: Police and army.
measures against a show of violence .by demonstrators resulted in a re-
latively peaceful demonstration by about 4,000 persons on 9 February.
According to police, the demonstrations were directed by the Nationalist
Revolutionary Movement and the Communist Party. The feeling of the de-
monstrators continues tense,, and demonstrations are expected to continue
until the junta is overthrown.
Comment: ' The first of the two demonstrations Rns'.;.ini.tiathed.- onc: 5.,.?F,eb nary
by the La Paz University Federation allegedly to protest food shortages,
although its main purpose was to embarrass the junta and., if possible..
aid its downfall (see OCI Daily Digest, 18 Oct 51). The Communists
may have given gratuitous., but not decisive support to the Federation.,
which is dominated by the Nationalist Revolutionary Movement.
The US Embassy in La Paz believes that President Ballivian's announce-
ment that the junta will restore constitutional order during 1952 reflects
the increased pressure exerted by the Movement during the last few days
(see OCI Daily Digest, 15 Jan 52).
3O. CUBA.. Nickel plant begins operations: Production at the US-controlled
Nicaro nickel mine has begun. It was announced that the plant will be in
full operation by 1 June, at which time it will be able to produce about
30 million pounds of nickel oxide annually., or 10 percent of world pro-
duction. It was also reported that a pilot plant is being constructed
for the principal purpose of increasing recovery of nickel pverophepen4 pro-
cesses and making possible the additional recovery of cobalt. (U NY
Journal of Commerce, 7 Feb 52)
Comment: Press reports indicate that the decisive question of whether
the new Cuban production will come under international allocation of the
International Materials Conference (IMC) has not yet been solved. Should
the IMC control its allocation, the US, which will import the entire Nicaro
output, will lose supplies from other sources since the free world countries
would share in the total supply increase.
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ll. MEXICO. Migratory labor agreement with US extended, The US and Mexico
have agreed to extend to 11 May the migratory labor agreement which was
due to expire 11 February. It is in the interest of both governments to
have no interruption to the program whereby Mexican agricultural workers
may legally enter the US when determined to be necessary, on terms agree-
able to both governments. Negotiations will begin shortly on revisions to
the present agreement to assure ,a, long-time operating program of maximum
mutual benefit. (R Tm is r~ 451/-9514_ & F.b: 52)
Comment: Mexico has been dissatisfied with the lack of control over
the employment of illegal migrants (wetbacks) in the US, and has indicated
that negotiation of a new labor agreement will depend upon the passage of
a US law to provide penalties for the employers of wetbacks. Legislation
"generally acceptable" to Mexico has passed the US Senate and is now
before the House,
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