CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001000070001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 9, 2016
• Document Release Date: June 11, 2001
• Sequence Number: 1
• Publication Date: May 21, 1952
• Content Type: REPORT

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SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
21 May 1952
OCI No. 5185
Copy No.
CURRENT INTELLIGENCE DIGEST
267
DIA, DOS, OSD Declassification/Release Instructions on File
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This digest of significant reports has been prepared primarily
for the internal use of the Central Intelligence Agency. It does
not represent a complete coverage of all current reports re-
ceived. Comments represent the immediate views of the Office
of Current Intelligence.
SECRET
SECURITY INFORMATION
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THIS MATERIAL CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE-OF THE UNITED STATES WITHIN'THE MEANING OF THE
ESPIONAGE LAWS, TITLE 18, USC, SECS. 793 AND 794, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON IS PROHIBITED BY LAW._
EASTERN EUROPE
Large new Hungarian blast furnace inaugurated.: The..much-
publicize new blast urnace at Diosgyor in northeastern
Hungary was inaugurated on 11 May. The principal speaker
was Hungarian Politburo member Gerd, who stated that the. new
furnace would increase Hungarian pig iron production by more
than one third, with a consequent increase in steel production
and resultant abundance of consumer goods as well as a strong-
er country. (R FBIS, 13 May 52)
Comment: The new blast furnace, begun last July, was
designedt-o a the largest in the country. The Diosgyor plant,
reportedly employing twenty thousand workers, allegedly sends
47 percent of its steel to the USSR.
.
Hungarian steel production in 1951 amounted to 800,000
metric tons, while pig iron production was estimated at
450,000 tons.
2. Polish Government gains new collectivization weapons:
A Polis Government resolution published on 13 May places all
agricultural-producer cooperative machinery centers under
state control.
The American Embassy in Warsaw comments that by taking
over control of the entire farm machinery pool, the Polish
Government gains a potent weapon for pushing its agricultural
collectivization program. Individual peasants needing farm
machinery will have to meet whatever conditions the Government
prescribes in order to obtain use of the necessary machinery.
(R Warsaw 655, 16 May 52)
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Comment: An additional factor motivating the govern-
ment's adoption of this resolution is the fact that tractor
production goals have not been attained by Polish industry.
This failure appears to have slowed the progress of the
collectivization program.
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3. Gas mask issue to Chinese Communists seen as propaganda
maneuver: xteen recently captured Chinese Communist so iers
revea at they were either issued gas masks or instructed in
the use of anti-gas field expedients during April 1952, accord-
ing to Far East Command. Three possible reasons advanced by
FECOM for such enemy preparations are that the Communists anti-
cipate UN use of gas, that they intend to wage chemical war-
fare, or that the gas masks are to provide "proof" for enemy
propaganda charges of the United States using CW in Korea.
FECOM concludes that available evidence fails to indicate
enemy intentions of employing chemical warfare in the immedi-
ate future. (S CINCFE Telecon DA TT 5831, 20 May 52)
Comment: The issue of gas masks, confirmed in prisoner
interrog~a ions, probably is intended to support Communist
charges of American use of chemical warfare agents in Korea.
While specific Communist propaganda allegations of US
use of biological warfare ended in early April,.a continuation
of the American "atrocities" theme has been provided by
recent charges that the United States has used CW agents in
combat.
Radio Pyongyang on 24 April detailed 33 incidents of
alleged use of chemical warfare occurring between 27 February
and 9 April, and again on 7 May charged that the United States
used CW on 22 and 25 April.
4. Further shipments of Ceylonese rubber to China: The Polish
vessel ns i departed from Colombo, ey on, on 9 May with
4,700 long tons of rubber for China.
Another Polish ship, the Jednosc, is expected to arrive
next week to pick up more rubber for China. (C Colombo 628,
19 May 52)
Comment: Inability to find shipping space has prevented
the Chi neese from getting larger shipments of Ceylonese rubber.
To overcome this difficulty, the Communists are now diverting
Orbit vessels to Ceylon. The Jednosc will be the sixth Orbit
vessel--five Polish and one Russian-- to pick up Ceylonese
rubber. for China thus far in 1952. No Western-flag vessels
have engaged in this trade.
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Trade slump in Hong Kong continues: The trade depression'
which has prevailed in ong ong since December 1951, continues,
although the American Consul General reports some indications
of improvement. April statistics show a further reduction in
Hong Kong's over-all trade, but commerce with China increased
25 percent. There is no sign, however, of a wholesale resump-
tion of Communist purchasing. (R Hong Kong 3072, 16 May 52)
Comment: A sharp decline in Chinese Communist purchases
from ong ong since late 1951 has resulted in swollen inven-
tories and widespread pessimism among businessmenin the Colony.
The slump, however, has not yet caused panic in commercial
circles. The local stock market remains firm, new construc-
tion continues, and there is little evidence of an exodus of
capital.
6. "Third force" plan to approach Chinese Nationalists
repor e : t ir- orce" ea er n ong Kong was reportedly
attempting last month to form a committee to approach the
Chinese Nationalists for terms on which they might return to
Formosa and participate in the government. (S/Control - US
25X1A Officials Only
continue to make
plans -To overthrow the Nationalists rather than to join them.
These ex-Nationalist leaders do not in fact constitute
a "third force." They have no capability,at present for
overthrowing the Nationalists; nor is it likely that they
would be given any significant power if they were to join them.
Rumors of uprising in Thailand unfounded: The American
Army T ac a in ang o reports T Eat a ruin er of reliable
sources had indicated to him that rumors of an imminent up-
rising led by junior military officers were unfounded. (S MA
Bangkok, 190800Z and 200200Z May 52)
Comment-. It was on the basis of these rumors that Thai
Governme~fficials excused their inability to attend a
reception in honor of US Armed Forces Day. This excuse now
appears to be a fabrication.
Indonesia seeks diplomatic relations with Japan: Infor-
mation nister Mononutu announce on ay ndonesia
will open diplomatic relations with Japan. He specifically
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Comment: Other "third force" figures
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declined to state whether Indonesia would ratify the Japanese
Peace Treaty. (C Djakarta 1680, 19 May 52)'
Comment: The former cabinet was severely criticized for
signing the Japanese Peace Treaty. Critics considered the
government's action a concession to the Western bloc.
The Prime Minister has implied that the peace treaty must
be re-examined, and Parliament has indicated a reluctance to
ratify the treaty until Indonesia has negotiated what it con-
siders adequate reparations from Japan.
Turkey sees Soviet attack on Iran or Iraq as NATO problem;
Turkish res en ayar an the Chief of the Turkish General
Staff told the American Ambassador recently that the Soviet
Union would have to defeat or neutralize Turkey before con-
quering Iran and Iraq. Consequently a Russian attack on Iran
or Iraq would force NATO, of which Turkey is now a member, to
decide whether or not to declare warp
The President added that Turkey would be prepared to ful-
fill its NATO obligations, but he emphasized that it would be
useless for his country to act alone against the Soviet Union.
(S Ankara 1267, 17 May 52)
Comment: Turkey, despite its membership in NATO, still
fears at a West will sacrifice the Eastern Mediterranean
in the interests of Western Europe. President Bayar's remarks
appear to be part of the continuing Turkish effort to convince
the West that the Eastern Mediterranean is vital to European
defense.
South African Government restricts left-wing labor leader:
Acting under the Suppression of Communism c , the South r -
can Government has ordered E. S. Sachs, white leader of the
trade union movement's left wing, to resign as general secre-
tary of the powerful Garment Workers Union. Sachs is barred
from union membership, may attend only religious and recrea-
tional meetings, and may not leave Transvaal Province for two
years. (U Reuters Johannesburg, 19 May 52)
Comment: Sachs has been the most prominent trade union
advoca ego'-white and non-white opposition to the Nationalists'
SECRET
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segregation program. His affiliation with the Communist Party
is less certain than that of the top South African Indian
agitator similarly restricted last week.
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11, East German Government may strengthen control over labor:
Two projected ast German labor decrees are designed to ntro-
duce a stricter disciplinary code for industrial workers and
to circumvent existing labor courts of arbitration~by form-
ing factory . commissions dependent on political directives.
"Honor courts" would be used to publicize good examples of
work and reward achievements, and also to "punish negligent
and undisciplined workers and employees by appropriate
measures." Workers would be made responsible for defective
production, with fines to run as high as one month's salary.
The work-norm system contemplated under the decrees would
require of the worker faster and more intense performance
in order to avoid reduction of his wages. .(C Bonn, 2828,
16 May 52) .A.
12. West German Social'Democrats attack EDC treaty on
constitutional groups: The Social Democratic Party, which
contends that any West German contribution to Western de-
fense will require an a.mendmetnt to the constitution, and
hence approval by two-thirds of the parliament, has formally
petitioned the Federal Constitutional Court to rule on the
legality of German participation in the European Defense
Community. The court has,agreed to consider the case on
10 June.
The Social Democrats are now also trying to force
a parliamentary debate on the Allied-German contractual
agreement on 23 May, three days before the scheduled sig-
nature, by invoking a provision of the constitution for
a special parliamentary session on the demand of one-third
of, the members. (S Bonn 2893, 17 May 52)
Comment: Several months ago Allied officials were
seriously worried that the Federal Constitutional Court
might support the Social Democrats' position and thus force
a general election or prevent German participation in the.
EDC. Several prominent German jurists, however, have since
then expressed the opinion that a simple majority in the
parliament is sufficient to ratify the treaty.
13. French Cabinet balks at European Defense Communit
signature,. T ere is considerable sejnt.ment- wit-him the
Frernc emabinet for postpon ng signature of the European
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Defense Community treaty and the contractual agreement with
Germany, according to Under Secretary Maurice Schumann. He
states that a full cabinet session will decide on 21 May
whether Foreign Minister Robert Schuman will be authorized
to sign.
Under Secretary Schumann expects that the Foreign Minis-
ter will be given the authority, but he indicated that Pre-
mier Pinay and other ministers are inclined to look upon the
European Defense Community as a complicating factor in the
government's domestic program. (S Paris 7169, 20 May 52)
Comment: Even if Schuman receives cabinet authoriza-
tion oay, the tripartite and quadripartite meetings
scheduled to precede signing will have to proceed without
a hitch if both instruments are to be accepted by 26 May.
This is a critical moment for Pinay, since the French
Assembly has just reconvened and he is staking the life of
his cabinet on parliamentary approval of a large bond issue.
14. Italy unlikely to meet current military production
-
-
-
current fiscal year indicates that Italy is not likely to
reach its military production goals. There has been a sharp
decline in the rate of defense orders for hard goods and a
25 percent decline in the rate of deliveries. Nevertheless,
the monthly rate of defense production is still substan-
tially.above that for the previous fiscal year. (S Rome
Joint Weeka 20, 16 May 52)
Comment: Political considerations have prompted the
Italian Government to retard its defense program until after
the 1953 national elections. It wants to avoid the appear-
ance that defense expenditures are too large in comparison
with civil expenditures.
goals
7
Nn
oals n analysis of data for the third quarter of the
Italy pessimistic as to benefits of trade agreement
with rmany: The Italians' recently concluded trade agree-
ment with ermany does not encourage their hope that a rise
in exports to Germany would offset the decline in exports
caused by British and French trade restrictions. Import
quotas agreed upon by Germany on horticultural products were
disappointing to Italy. Furthermore, Italy's trade deficit
with Germany in the first quarter of 1952 was considerably
SECRET
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larger than in the same period of past years. (S Rome Joint
Weeka 20, 16 May 52)
Comment: Italy's trade experts are disturbed about its
long-term trade outlook. The trend toward greater restric-
tions in international trade poses difficult problems con-
tributing to the country's trade imbalance with the EPU and
its growing dollar deficit. Italy has been increasingly
unable to obtain the imports it requires from the EPU area,
and hence forced to purchase such items from the dollar area.
16. High-level Communist discusses Rome elections of 25 May:
A member of the Communist Central Committee recently stated
that the Communist electoral front in Rome known as the
"Citizens' List" may well turn out to be an arrangement which
is a basic contribution to future party policy. The Commu-
nist official emphasized the Vatican's differences with the
Christian Democrats, but acknowledged that Premier de Ga.speri
has momentarily prevented a shift of his party to the extreme
right, which would have been "most favorable" to the Commu-
nist campaign. The neo=fascist Italian Social Movement, he
said, has gained "considerably" throughout the city.
The Communist official said excessive confidence by his
party must be avoided, because there is no possibility of
"a real Christian Democrat catastrophe," and it is uncertain
"whether the new political situation which is taking shape
in the country will be ripe by 25 Mayo" 25X1A
Comment: In the 25 May local elections, the Christian
Democrats are expected to suffer a large decrease in popular
vote and to lose control of the municipal councils in many
of the important cities of Southern Italy. Their chances
of winning in Rome have recently been improved by an intensi-
fied campaign on the part of Catholic Action committees,
according to the American Embassy.
The "Citizens' List" is composed of Communists, pro-
Communist Socialists, and a group of non-Communist neutralists
led by former Premier Nitti. Communist gains are expected
to result less from the alliance with Nitti than from the
party's reputation as protagonist of the workers.
17. Norway opposes adoption of COCOM restrictions on pyrites:
Norway continues to oppose the inclusion of pyrites on COCON's
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International List II, which places quantitative restrictions
on the export of certain goods to the Soviet Orbit. A Nor-
wegian Foreign Office official told the American Ambassador
that Norway did not intend to increase its exports of pyrites
and would keep them to the minimum level necessary to obtain
vital imports. He insisted, however, that the American pro-
posal did not consider sufficiently such factors as the im-
portance of maintaining export markets. (S Oslo 1002, 19 May
52)
Comment: Pyrites constitute an important item in Nor-
wegian exports to Poland and Czechoslovakia. Norway's at-
titude towards controls has become less cooperative as COCOM
discussions have involved List II items, such as aluminum,
ferrochrome, and abrasives, in which Norway has a direct
interest because of its trade agreements with the Soviet Orbit.
18. Sweden places embargo on re-export. of strategic com-
modities to Eastern Europe: The Swedish Government a.s in-
orma y assured t e United States that strategic goods im-
ported into Sweden against a Swedish import permit will not
be re-exported to the Soviet bloc. The US Embassy believes
that no further guarantee will be necessary, except when
there is reason to suspect a diversion to Eastern Europe
before entry to Sweden. (S Stockholm 7118, 17 May 52)
Comment: Sweden's informal observance of International
Lists and II quotas has limited the export of domestic
manufactured goods to Eastern Europe. This new assurance
that commodities will not be re-exported by Swedish firms
is a further assistance to the American program for control-
ling East-West trade.
LATIN AMERICA
19. Colombian Communists appraise guerrilla prospects: If
Colombian guerr as should unite, t ey reportedly could
count on Communist support. According to Communist leaders,
however, the Llanos guerrillas are the only ones now capable
of positive action, and activity in other parts of the country
is sporadic, uncoordinated, and incapable of delivering an
effective blow.
Due to lack of arms, insufficient numerical strength
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and fear of being outlawed, Communist Party heads dare not
aid guerrilla warfare at present. They prefer to await a
better opportunity to join in acts of violence against the
government. 25X1A
Comment: Only in the Viota district of Cundinamarca
has Communist cooperation with guerrillas been reported,
and this is attributed to the local Communist leader rather
than to party policy.
Communists have come to regard their position in
Colombia as very precarious. Police vigilance under the
state of siege has made regular meetings almost impossible
and the party is faced with financial difficulties and in-
creased Catholic opposition. Its political showing has
also been poor. For these reasons Communists have sought
Liberal support to form a "Democratic Front."
ll 21 May 52
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TOP SECRET
SECURITY INFORMATION
US OFFICIALS ONLY
21 May 1952
CIA No. 496 53
3
Copy No.
TOP SECRET SUPPLEMENT
TO THE CURRENT INTELLIGENCE DIGEST
(including S/S Cables)
Not for dissemination outside O/CI and O/NE.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This digest of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence. It does
not represent a complete coverage of all current reports in CIA
or in the Office of Current Intelligence. Comments represent the
immediate views of the Office of Current Intelligence.
TOP SECRET
SECURITY INFORMATION
Approved For Release 2001/09/06 : CIA-RDP79T01146AO01000070001-4
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TOP SECRET
THIS MATERIAL CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAWS, TITLE 18, USC, SECS. 793 AND 794, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
1, Signing of Allied-German
contractual agreement may be de-
o cials in Bonn now suggest tha
ferred: ie and German
contractual agreement be signed on 26 May instead of 24
May. This will allow an extra day for the tripartite and
quadripartite deliberations which are to precede the signing
ceremony.
Chancellor Adenauer is determined to reduce to the mini-
mum the number of outstanding questions for quadripartite
consideration. Aside from financial questions relating to
the West German military contribution, those issues currently
to be considered are the date when the contracts are to become
effective, whether or not the Federal Republic will be per-
mitted to manufacture guided missiles,and the title for the
treaty as a whole. (S S/S Bonn 2936, 20 May 52)
Comment.- This new deadline may not be met unless there
is an eater y-harmonization of opposing views on the financial
question. Allied and German negotiators have not yet reached
even the basic agreement which seems necessary before the
Foreign Ministers can discuss the problem.
Another factor contributing to the uncertainty of the
signing date is the possibility of a debate in the Bonn
Parliament on 23 May, which may cause Chancellor Adenauer to
spend vitally needed time defending the contracts.
21 May 52
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