TOP SECRET SUPPLEMENT TO THE DAILY DIGEST (Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000800170001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 16, 2016
• Document Release Date: December 16, 2004
• Sequence Number: 1
• Publication Date: March 10, 1952
• Content Type: SUMMARY

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TOP SECRET
10 March 1952
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TOP SECRET SUPPLEMENT
TO THE DAILY DIGEST
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Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
CIA No. 49571
Copy No.
46
DIA and DOS-review(s)
completed.
This summary of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence. It does
not represent a complete coverage of all current reports in CIA
or in the Office of Current Intelligence. _ Comments represent the
immediate views of the Office of, Current Intelligence.
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THIS11RATERIAL CONTAINS.-INFORMWITHINA~ION ATHECMEANI~tGEOFATHENAL
DEFENSE OF THE UNITED S
ANY AND
MANNER TO AN
TRANSMISSION AM ONW9 ION U OF 9 WHICH . IN 793
O OR REVELAT
.UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
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not be made available foy to forestall publication.
SECTION 2 (EASTERN)
1. JAPAN. Further attacks on security treaty
underlpressure
apan's ac ing Foreign mister aza r,
e.Foreign
from the Dieu has aglteateatylnegotiationsutosthof the
recent "US-Japan security
Affairs Committees of both Houses of the Diet,Waccording
to Iguchi, Vice Minister of Foreign Affairs0
minded of the Rusk-Okazaki ablicationthIguchi thought thatd
2. Britain opposes conference on Japanese export
ice.is"oppose 0 a
controls: The ri.ti.s .reign
proposal for a .multilateral confere~,ceninJludingnthe .the
United States, Britain,. France,
question of Japan's post-treaty export controls, accord-
ing to Ambassador Gifforda The British believe that in
view of the strongly critical reaction in Japan to the
US-Japan Security. Treaty, it would be best to postpone
25X1 the conversations until after the eace treaty comes
into force.
Comment: With the coming into force of the peace
treaty, Japan will be released from the strict.export
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controls now imposed by SCAP and will be committed only
to the less rigid controls.under the Battle Act. Most
.observers believe, however, that Japan will retain its
present controls at least until the Korean war is settled.
.The United States is already under considerable
criticism in Japan on the grounds that Japan was not acompletely free agent in the recent security treaty nego-
tiations, A conference on export controls prior to the
end of the Occupation is likely to lead to renewed charges
that Japan is being pressured prior to regaining its inde-
pendenceo
3, PHILIPPINES. Japanese Peace Treaty may be submitted to
ident Quirino
s Pr
es
Senate next -weeWithin a few day
p1UilS l.V auviu -- r-------
Philippines mutual defense pact to the Philippine Senate
.as national issues for which he will ask bipartisan sup-
port9 according to Foreign Secretary Elizaldeo It may
be a month before a final vote on ratification is taken.
Elizalde is aware of the embarrassment that would occur
if the security pact were approved while the peace treaty
was rejected. He believes that at least four opposition
Senators will vote to ratify; this, added to the adminis-
r tion vote, would be sufficient.
Comment: There was a clear understanding between
the American and Philippine. Governments that Philippine
signing of the Japanese peace treaty and American agreement
to the.mutual defense pact were inseparably related, al-
though this fact was not publicized. While there has
been no opposition to the defense pact, failure of the
Philippines to obtain satisfaction on their reparations
claims has subjected the Quirino administration to in-
tense criticism, especially by the opposition party.
That party's members in the Senate, however, have avoided
firmly committing themselves against ratification of the
peace treaty, ?
4, EGYPT. Egyptian Foreign Minister urges "early action" on
Anglo-Egyptian dispute: The Egyptian Foreign Minister
as strongly appealed to Ambassador Caffery in Cairo for
speedy action on the Anglo-Egyptian controversy. He
.warned that-this would probably be the last chance for
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the free world to reach a solution and that the USSR
stands ready to exploit the situation.
.The Foreign Minister also pointed out that, while
the new cabinet of Prime Minister Hilali seriously
considering urgent domestic reforms,
done about them until the dispute with the British is
settled.
Comment. Events of the past few months haveEshotn
that omen ~,c issues are so colored by the Anglo-Egyptian
controversy that it will. be difficult for any government
to solve the many pressing internal problems without
first reaching some settlement with Britain.
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f in Egypt's Premier in initiating
v
the Prime Minister is ~.
Egypt's.nation~.l aspirations.
The American Ambassador inCairo cstates thattif Bri-
tain would soon. offer substantial t could break the power
The difficulties ac g
domestic reforms timespartbc~patedbin the
Ahmed Hussein Pasha9 who
former Wafd governme has so real?rn
the new cabinet. He
public support and maintains that the government's em-
phasis on internal reforms has alrready~re okeedecharges that
erting P p
d'
treaty disputes the Hilal,L Cau - government
of the Wafdo die also notes that "if the Hilali _.. , , come next in ER:V
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SECTION 3 (WESTERN
6. GENERAL. European Defense Force goals after this year still
77 un etermine . e aria ernee on t e uropean ense
uommuni y must now fix definitive military goals for the
European Defense Force for the period after 1952. As a re-
sult of accepting the NATO recommendations for the 1952
build-up, the countries which are members of both NATO and
the EDC are now committed to furnish 31 divisions by the
end of this year. The EDF figures for 1954, originally set
at 31 divisions for lannin ur oses remain to be de-
termined, 25X1
Comment- The lack of even tentative goals for mili-
tary forces after 1952 emphasizes the uncertainty
western
surrounds the contemplated military build-up
Europe even for this year as?well as for later. The pro-
posed German contribution to the EDP' of twelve divisions
has not been considered in the above figures.
7. GERMANY. Germans viewed as coding toward Europeanitation
o the Saar - e gh. Commissioner in Bonn reporting
on growing -very*_on between France and Germany over the Saar
issue, has stated that the Federal Government seems to be
+1 -c away" from an plan for Europeanization of the Saar.
Comment- Although the Germans have been giving in-
creasing support to internationalization projects, this
report would seem to strengthen the recent French charge
that Bonn envisages a European solution of the Saar question
only as a step toward full integration of the Saar into
Germany.
8e AUSTRIA. Coalition survives explosive historical dispute-
Austrian leaders narrowly averts a government crisis last
week with a last-minute compromise on the Starhembt-rg
restitution case.
The Soda is s.wi rew eman s or con isca-
ion of property awarded to the ex-Heimwehr leader by court
order in return for amendments to restitution and public
administration laws which would permit public management
of property owned by persons suspected of treasonable
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activities. This solution thus answered People's Party
objections to challenging the independence of the courts while
should not benefit
meeting Socialist demands that Starhemberg
from restitution proceedings.
Although dependent upon legislation retroactive in ef-
fect9 the compromise nevertheless shows that ancient grudges
between Austrian conservatism and socialism are at present
secondary in importance to the current political differences
which may now be settled on their merits instead,
The Socialists have taken this occasion to renew their
warning that9 in the face of mounting unemployment and worker
dissatisfaction, they will not compromise on the deflationary
r- I
economic program of their coalition partner.
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cc1~ICn .. hen blA PR~FIe6 f~FrT i~9 fA1y2~ S f7 ~tfCk n%000y800170001-6 or declassi-
E
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10 March 1952
OCI`No? 3889
Copy No.
25J
DAILY DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
prepared pY in,arily
This summary of significant reports has been It does
r the internal use of the office ofe of rre all currenltgrPlx'its in.CIA
the
for tnot represent a complete coverag Comments represent
Current or in the office s of f the Officeeof1Current intelligence.
immediate view
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, VAT: gECORD
TTJ
S
CY ARCVE
]RE I R
ACW 5X1
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Nftxl~
SECRET
THE NATIONAL
A THE MEANING AND 794' FFECTINGTHE
THIS MATERIAL CONTAINS INFORMATION
TATS WTHIN
'794, THE
SE OF THE UNITED S8 USC ISECS, 793 TO AN
DEFENSE TITLE 159 MANNER
ESPIONAGE LAWS,
TRANSMISSION OR REVELATIR OFV EDCBy LA NY
OHIBIT
UNAUTHORIZED PERSON IS P
SECTION 1 (SOVIET)
Europe com-
eastern
the recent
USSR American Missioninhofs from
was mee agreed that
la
men on Orbit publicroom eastern Europe it some sb~C-
n hie; s Russians were having t.,Ae
us Missio in creating ti and Within the Soviea Union the the world late
n their "Hate Amer ?a tatesi Campaign sdriving majority of
impression cess i that the Unl however, the a an ear
another war. In the Satellites,
American and ho f or
y
people are still Pro is neCessar
the
even if a war
Iibe r_a 1 100 IL A
J listed as Secretary to the
tisek Pexa At a re
Par ty
nal j he the Czechoslovak the Communist Par
Of in
arty reorganization
time of the p eneral were
Comment: At of deputy secretaries g y,buro) com-
anization Secretariat Org
Septem er, the posts
establishedo
abolished and an Org
posed of six secretaries a Rd nd Gottwald was
the first reference to Pexa as secretar
This is
of the art',
CZECHOSLOVAKIA. Fran zec ommunlst
O the of t e ominform jour ental Commit tee t e merits Committee
sion of the Central
cent zech discus pexa a Secretary Of delivered an address
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to Mar 52
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3. YUGOSLAVIA. New wage policy outlined: According to the
regime's new wage policy, which will reportedly go into
effect "shortly," the government will guarantee the pay-
ment of minim%m, wages for all workers, including those
employed in Factories operating at a loss. Employees are
to be classified into minimum wage categories: skilled
workers will receive at least 21 dollars per month and un-
skilled.workers 14 dollars per month.
Maximum earnings are not fixed, although progressive
taxation will be imposed on higher incomes; they will de-
pend principally upon the size of the wage fund which in
turn depends upon the ability of the particular enter-
rise to earn a profit under the new economic system.
Comment: The introduction of a new wage system was
originally scheduled for 1 November 1951 but was postponed
by the regime until the effects of devaluation and a return
to a single-price system were apparent.
The regime apparently hopes to increase production
by identifying the worker more closely with the success
of his plant or enterprise in earning a profit through
increased production. However, due to scarcity of con-
sumer goods and the government's present financial policy,
real wages of the average worker will probably not increase
under this new wage incentive system.
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SECTION 2 (EASTERN)
3. Chinese airfield near Tonkin border improved: French
pilots told the Air Attache that, while patrolling at a
high altitude along the Tonkin-China border, they had sighted
two parallel paved runways, each 6,000 feet long, at Lungchou,
some 13 miles inside China. The Attache comments that this
is the first liable information the French have provided on
this field.
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Comment: The last reliable report on this installation,
dated Sep em er 1951, described one clay surface runway of
1,000 feet. Extens and improvement of the field has
25X1 since been reported
This field is within combat radius of the Tonkin delta
for MIG-15's without wing tanks.
4. INDOCHINA. Hatred of French in Tonkin reported at all-time
Elgh_: Vietnamese nationalists in Saigon, who are no. or 1 rily
Tmists, state that recent arrivals from Tonkin describe the
local population's hatred of the French and their Viet colla-
borators as having reached an all-time high. The pro-French
Governor Tam and the French Command are said to have destroyed
the entire populations of some villages in reprisal for their
having cooperated with the Viet Minh.
Minister Heath comments that, while this sounds like Viet
d that there
t
e
Minh propaganda, reports from Hanoi have intima
tements
t
s
.
a
e s
might be some factual basis for the
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Comment: Information repeated in Saigon is likely to
be exaggerated, but previous reliable reports indicate that
the population of Tonkin is being alienated by the undisci-
plined behavior of French troops and by the administration of
Governor Tam, whose reputation for savage police methods is
well established.
The'chief of military assistance in Indochina, General
Brink, recently estimated that the "strictly military" situ-
ation in Tonkin was not alarming but that the political
situation and loyalty of the population were uncertain add
could well neutralize the military effort.
5. French open drive against Indochinese nationalist force:
Five French infantry a ions, wit support ng ar i ery, ver
craft, planes and paratroops, are participating in an operation
dnits of Colonel
northwest of Saigon designed to engage arme
Comment: Colonel The, who has taken a strong stand
against the French and the Viet Minh, is regarded by
many Vietnamese as a national hero.
Trinh Minh The's "National Resistance Front.
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The US Legation in Saigon has previously observed tathe
military action against Colonel The would not only weaken
French forces available to counter growing Viet Minh strength
but also inflame nationalist sentiment throughout Vietnam.
Other Americans on the scene have pointed out that the United
States position, already misunderstood by many Vietnamese,
would be further compromised by the use of American-supplied
arms against anti-Communist elements.
6. THAILAND. Political crisis seen developing: Premier Phibun
is re ilbly reported Q have been advised to retire "in peace
and glory" in preference to challenging the militarists or
becoming a puppet -- a choice he will have to make within
"the next month or two." The intentions of the militarists
now in control were unmistakably revealed by one of their
prominent spokesmen who told a gathering of pro-Phibun members
of Parliament that the regime to be established under the new
constitution would not be a coalition and would include more
military men than the present government. The Embassy observes
that political d is appear to be rapidly "reaching a
boiling point."
7. INDIA. India considers "action" in case of Chinese Communist
ntervention in Burma: India's new ecre ary or ommonwea h
Relations asl-American Counsellor Steere in New Delhi
that India regards any threat to the territorial integrity of
Burma as a threat to itself. The Secretary concludes from
this that his government would be forced to take some action
if it should receive information indicating the likelihood
of Chinese Communist intervention in Burma against Chinese
Nationalist troops. tances would decide the kind of
action to be taken.
Comment: Past performance indicates that India would
content Y self with diplomatic representations providing that
the Chinese intervention posed no direct threat to India's
frontiers. There is no evidence that Burma is counting on
Indian army support; it would, however, expect India to take
the lead in the international councils concerned with Burma's
independence.
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8. IRAN. American Military Mission strongly opposed by Mossadeq:
ranian Cabinet member Bus eri as to m assa or en erson
that the Iranian Finance Ministry will have no authority to
grant funds to the US Military Mission after 20 March unless
a new contract is signed. Although Mossadeq has assured the
American Ambassador that the Mission's expenses would continue
to be met even without a contract,BBush_eri believes that
Prime Minister could not legally justify such an before the Majlis.
Meanwhile, the Prime Minister has again told Ambassador
Henderson that he has always opposed and can er support
or agree to an US-Iranian military contract. 25X1
ent attempt to appease local con-
ar
In an app
Comment:
ive opinion and avoid antagonizing the United States,
Mossadeq has suggested on several occasions thatthe Military
Mission stay in Iran after the expiration of the contract
until the situation is clarified. At the same time, however,
he has warned that neither he nor the Majlis would be inclined
to consent to a continuation of the Mission.
9. SYRIA. Syria embarks on anti-Western campaignrilThe SSyr yrian
overnmen as or ere t o qui a i.on by -p
Near East Foundation, which is financed by the Point Four
program. It has ordered the replacement of foreign company
managers by Syrians. It has forbidden civil servants tQ
"establish contact" with foreign legations and has asked
foreign missions to restrict the activities of their personnel
to their official duties.
The US Legation in Damascus thinks that the passage of
these measures is the result either of faulty coordination
between Colonel Selo, the legal head of the government, and
Colonel Shishakli, the military power behind the government,
f Shishakli who has steadily
or of insincerity on the part o
ti
on.
Indicated his pro-Western orienta
Comment: There has long been evidence of a strong anti-
Western sentiment in Syria. While the effects of the new
regulations cannot now be assessed, their promulgation means
per-
that the he Britain with
present
suading t
the West.
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SECTION 3 (WESTERN)
1. GENERAL. Seven NATO countries now ready to restrict travel of
Y6v1e- oiflcia s: even T meml ers crave a -reed to ae aver
no es o e u~:viet Embassies within their respective countries
on 10 March regulating the movement of Soviet officials on the
basis of reciprocity. 25X1
Comment: This retaliatory action against Soviet restrictions
on foreg in nationals was agreed on in principle at the recent
Lisbon meeting. Of the remaininc. seven countries, Portugal
and Luxembourg have no Soviet missions; Turkey and Greece are
expected to conform later; and the three Scandinavian NATO
members, in line with tram' ticnal dislike of actions they ?e s1
the Russians might consider provocative, have indicates
reluctance to conform,
2. FRANCE. French labor situation plays into Communists' hands:
Zli
poen i.a _ y exp os ve a or Si ua -ion e,.-is s in ranee
because the workers are more than ever convinced that the
government's econoUl.3 policies negl3ct them in favor of farm
and business interests. Non-Communist labor leaders have
repeatedly warned that the steady rise in prices is producing
rank-and-file sentiment for joint action with the Communist-led
General Labor Confederation, which most workers still acknowledge
to be the "most fearless opponent of the employers."
The American Embassy in Paris believes that, in order to
sa-_eguard contracts for military production in France, it is
e important to support the anti-Communist campaign of the
free trade unions and manage s_ than arbitrarily to exclude
Communist-dominated plants.
Comment: Local non-Communist labor spokesmen have recently
shown an increasing disposition to collaacrcte for purely
economic objectives with some veteran General Labor Confederation
leaders, who have been estranged from the Moscow-dominated
headquarters.
The latest tendency toward a rightist coalition in
Parliament foreshadows a reversal of the recent trend
Ptow rdd-a
more liberal labor policy. Ii the Assembly supports
designate Pinay's rightist program on 11 March, the Communists'
influence over French labor will be strengthened.
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3. Leading French socialist pessimistic on ratification
of the European exense ommunx y: ze European Defense
Community treaty in its presenfTorm would be defeated in the
French Assembly by 60 votes, in the opinion of Andre Philip, a
leading Socialist and the head of the French delegation to the
Economic Commission for Europe. Philip stresses that fears of
a rearmed Germany will preclude Socialist support unless Britain
joins the EDC or unless that organization provides for a real
political integration of Europe. 25X1
Comment: Socialist support for continued negotiations on
the E was won last month only after considerable compromise
by ea-Premier Faure's coalition. Socialist Secretary General
Mollet has since emphasized to US cfiiciais that the treaty
will not be ratified in its present form.
Recent indications that powerful elements in the British
Labor Party now =aver British participation in a European army
have greatly encouraged the French Socialists on this particular
issue. Since there is little likelihood that Britain will join
the EDC, however, the Socialists will probably vote for thE*
treaty if Their other conditions are met,
4. FRANCE-TUNISIA. French Foreign Office formulates reform, proposals
for Tunisia: A ten a lve agreement as been reached a the
highest level in the French Foreign Office on a reform program
for Tunisia, which will eventually be submitted to the Cabinet
for approval. The Deputy Foreign Minister admitted to the
American Charge d'Affaires in Paris, however, that the Tunisian
case probably would come before the Security Council before
formal negotiations could be resumed with the Tunisians.
The same official estimates that eighty percent of all
Tunisians are nationalists, but believes that Bourghiba's
popularity is waning: The Foreign Office is being strongly
criticized in ranee because of alleged "softness" toward the
25X1 Tunisians.
Comment: The proposed reforms as tentatively outlined to
the American Charge indicate that France has not changed its
position of 1ZI December, which precipitated the present impasse.
Should Pinay's Cabinet win approval, a more intransigent
policy toward the Tunisians may be expected.
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6. UNITED KINGDOM. American Embassy summarizes current Foreign
Office views on Fax as : ,ova ua rng current oreign U= Ice
thinking on the Far East, the US Embassy in London reports
that responsible British ofiicials now see the differences
between American and British lcng-range policy toward Communist
China as only tactical. The British are inclined to be much
more cautious because of their relative weakness.
The Foreign Office is disillusioned by its failure to
establish diplomatic relations with the Peiping regime, and
continues its representation there only because withdrawal
would needlessly antagonize the Chinese and prejudice the prospects
for a Korean truce. Even if a Korean truce is arranged, the
best Britain can hope for in its relations with the Chinese
Communists is the evolution of a tenuous relationship similar
to that with Moscow. If there should be further Chinese ag-
gression, Britain would support the United State$ without
hesitation.
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Regarding the Far East generally, the Foreign Office
officials believe that at least five years of "relative peace"
are necessary for building up the Western position against a
prospective war. The UK's Colombo Plan a:la its periodic
rice allocation con:ier-nces were cited as means of doing this
by cultivating goodwi 11. or the West in Asia.
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British refuse visas r Communist-sponsored
celebration in LucYU -x1: g~ -r. 1 . ice- a ommunbs
sponsored ce e ra Ton of "International Women's Day" on 8 March
and "National Assembly o~. Women" on 9 March was clearly a
subversive activity of the Communist "peace" campaign, the
Foreign Office refused visas to all women wishing to come to
the UK as "observers."
Monica Felton was chairman of the committee in charge of
the London celebration, which was intended as a preliminary
to the con rence "in defense of children" to be held at Vienna
in April,
Comment: Mrs. Felton toured North Korea last spring under
the auspices of the Communist-sponsored International Women's
Group and upon her return to Britain undertook a series of
lectures and articles on the "atrocities" committed in Korea
by UN troops, particularly those of the US. Last dune she was
released from her job as chairman of a Government Housing
Corporation because of "neglect of duty."
Since the fall of l a0, when Communists were prohibited
from staging a Peace Congress at Sheffield, Britain, despite
its traditional reluctance to infringe on civil liberties,
has been taking positive steps against Communist propaganda
efforts.
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Approved For Release 2005/01/26 : CIA-RDP79T01146A000800170001-6
 25X1
Approved Release 2005/01/26 : CIA-RDP79T01`I'4A000800170001-6
SECRET
MEXICO, o er ex orter wil accept ineffective end-use cartifi-
r elco is
25X -s: reports t at Co bre de M
t s which
e
e
25X1
ca
pre-pared to export copper against end-use certx-ea
while outwardly purporting to comply with existing regulations,
are worded in such a manner that transshipment to another country
is possible. Various West German -I:irms are negotiating with 25X1
for the purchase of copper.
vine +r1)Cxt11;~:r z v iEst .: ~_.~~
d1 s-
d !. f ove rn1fl ':. 1J1 4. may
..
pc ss_hx ~t ' Gb:.
ap;..K :e t+ .ac. ~ Orhi
Cobre de Mexico
Comment: Cobre de Mexico has been exemplary in submitting
foreignorers to the US Embassy for approval , and European
been
importers of Mexican copper have, in almost all cases,
investigated by the US. As a high-cost producer dependent upon
European prices for economic survival, l, however, the firm.hasl
assumed no direct, r::sponsibilit
disposition: c,:# its ;cpper in Eu;cope.
11,11C mexi r;an f o : - i it a k 1 .:w ,, k a s'in ncia i; terec;F., in the
Y ~ ^an-
r q r- 'r; a S ~': .j. L ~J~d;,l. Mme the f an'..I K..xi
orlp a:~J, ^cx ec, nc~ cid
:
10. PANAMA. United States suggests Panama cancel registration of
'LF a e
-a e :
VV es`se-Ts s7VITIL in inese ommun st
epar me11 as sugges e a ,enema cancel the registration
of vessels such as the Fairside and the Vestbay which remain
in trade with Communist China in violation of Panamanian decree
t the t'aikoral . the Navidad, and
i
ns
631. Similar action aga
the Norma was also suggested.
Comment: According to Lloyd's Shipping Index of 27 February
1952, Ye anamanian-flag vessels Orbital., Will, Norelg, and
Canis are also currently trading with Communist China in
violation of decree 631. The Panamanian-flag vessels Spalmatori
and Fortune Star have also been engaged in this trade in recent
months.
SECRET
11 10 Mar 52
Approved For Release 2005/01/26 : CIA-RDP79T01146A000800170001-6
25X1