CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001200130001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 9, 2016
• Document Release Date: June 11, 2001
• Sequence Number: 1
• Publication Date: August 26, 1952
• Content Type: REPORT

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SECURITY INFORMATION
US OFFICIALS ONLY
26 August 1952
OCI No. 8861
Copy No. 23F_.
CURRENT INTELLIGENCE DIGEST
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.
State Dept. declassification & release instructions on file
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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,
`Chiang Kai?shekes views of current Sino-Soviet talks:
Chiang ai_s a as o an merican an asst' official in
Taipei that he believes the purpose of the present Sino-Soviet
conference in Moscow is to plan a new Communist "peace
offensive" in the Far East and the pooling of economic re-
sources with a view to integrating the Chinese economy with
the new Soviet five-year plan.
He believes that discussions of military strategy will
be the least important aspect of the conference. (S Taipei
188, 25 Aug 52)
Comment-. Any announced Sino-Soviet agreements are
likely . e exploited in the Communist "peace offensive" in
Asia which has been under way for several months and is to
culminate in the Pacific "peace" conference in Peiping in
September.
The talks are expected to provide both for increased
Soviet economic and military aid to Communist China and
further, integration of the Soviet and Chinese economies.
2.
Decree demands reform of Bulgarian cooperative farm
practices-. a ounce o an--s ers and antra ommi ee of
the Bulgarian Communist Party have issued a decree criticizing
gross administrational irregularities and calling for
stricter financial and accounting discipline on Bulgarian co-
operative farms. Attention is called to the fact that grave
violations of the cooperative statutes have continued to be
observed in spite of a "Decree on the Economic, Organizational,
and Political Strengthening of Cooperative Farms" issued in
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September, 1951, and contrary to decisions adopted by the
plenary session of the Bulgarian Communist Party in April.
In the future, a "Council for the Development and
Strengthening of Labor Cooperative Agricultural Farms" will
supervise the strict observation of the statutes and maintain
a check on all activities of the cooperative farms. (R FBIS
- 20 Aug 52)
Comment: The issuance of this decree suggests that
negligence toward cooperative-owned property, waste of working
days, and misappropriation of state and public funds are
still widespread in Bulgarian cooperatives and are sufficiently
serious to necessitate new and more effective organizational
controls.
Since the spring of 1951 Bulgaria has concentrated al-
most entirely upon the consolidation and strengthening of
existing cooperatives, rather than upon the creation of new
ones. It is unlikely that a further collectivization campaign
will be inaugurated until this present program of consolida-
tion achieves some degree of success.
3. Czech Army lowers induction age to nineteen-. The Czech
Army s repor e o e ma ing preparat ons o reform the
military service law to draft youth at the age of 19 instead
of 20 or 21 as formerly. On reaching 18 all youth will be
required to register for military service and undergo a
medical examination. They will then receive one year of
para-military training in the Union for Cooperation with the
25X1A Army as preparation for military service, 25X1A
Comment-. Such a change in the military service program
would increase the effective size of the army for the next
two years by about one and one half classes without lengthening
the present two-year draft period at the expense of industrial
manpower.
Under the present draft law the major part of call-ups
for military service are made of the 21-year=olds with the
remainder from the 20m and 22-year-old groups. The Union
for Cooperation with the Army was.originally established
last November as a voluntary para=military training organiza-
tion. There have been indications that the government is
not satisfied with the activities of the Union.
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4. Finland negotiates trade agreement with China: According
to a memorandum prepared by a Finnish delegate who participated
in
the recent trilateral trade negotiations in Moscow, during
the
remainder of 1952 Finland will export to China
10,000
tons
of
cellulose, approximately 18,000 tons of: various
types
of
paper, frame saws, paper industry machinery and pumps
totalling $1,500,000.
Finland, in turn, will be compensated by deliveries of
bread grains, petroleum products and steel billets from the
USSR. (C Helsinki Desp. 70, 24 July 52)
Comment: This is an indication of the extent to which
Finland gradually being forced into expanding its Orbit
trade as a result of the slump in the world prices and demand
for its traditional exports.
Finland is also becoming increasingly dependent on the
Soviet Union for foodstuffs and liquid fuels. In 1952, for
example, deliveries by the USSR will meet two thirds of the
country's import requirements for grains and one half of its
needs for petroleum products.
5. Hungarian party leaders rumored in Moscow before Rakosi's
election: The ri s ega on at u apes receive an un-
coi d rumor that the four Hungarian Communist leaders,
Rakosi, Gero, Revai and Farkas, and the Planning Office chief
Vas went to Moscow to discuss the slow progress of the
Hungarian Five Year Plan just prior to the sudden convocation
of parliament on 14 August. Rakosi allegedly defended the
plan and asked permission to handle its fulfillment in his
own way and as a result he became Prime Minister. Erno Gero,
who advocated a severe policy, appeared "most unhappy" on
his return. (C Budapest 169, 22 Aug 52)
Comment: There is no confirmation of the rumor, but t
is in ere- i.ng that since his election as Prime Minister on
14 August Rakosi has emphasized the "realistic" nature of
the Five Year Plan, and the official party newspaper has
echoed the line.
6. Hungarian crop failure affects trade negotiations with
Austria: The e-'jii on in Bu apes no es that ungarians"
off c als told the Austrian trade delegation last week that
Hungarian exports of corn and fodder must be smaller than
had been anticipated.
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The official Hungarian Communist Party newspaper has
made the first public admission that drought has caused
serious damage to root and fodder crops. Nevertheless, the
paper demands that surrender obligations be met in full and
reassures the public that supplies will be available.
(R Budapest 171, 23 Aug 52)
Comment: Trade talks between Hungary and Austria began
on 18 August at Budapest. The Austrian delegation reportedly
planned to ask for 10,000 tons of corn, an increase of
5,000 tons over last year, and for 30,000 tons of wheat.
Last year Hungary delivered 3,000 tons of corn, 10,000 tons
of rye and 25,000 tons of wheat plus an additional 5,000 tons
of rye to meet the full wheat quota.
7. Rumanian Vice Premier describes economic development:
An ar c e In the Cominform. journal By eorg a pos o, a
recently appointed Vice Premier and Secretary of the Rumanian
Workers' Party Central Committee, described Rumania's
economic progress since 1948. According to Apostol, Rumanian
industrial output has increased threefold over that of 1948,
and the urban labor force has grown at a rate of 200,000
persons per year. Domestic output of machine tools has
risen 660 percent compared with 1949, while that of "motors"
is up 476 percent.
In agriculture, the "growth of the socialized sector"
has reportedly continued until 16 percent of all arable land
is included. There are now "several hundred" state farms
and over 200 machine and tractor stations; while "some 1,500"
collective farms and over 860 "associations for joint culti-
vation" have been formed, allegedly "on the voluntary
principle." Crop yields in 1951 were asserted to be 20 per-
cent higher than those of 1950, and for the first time agri-
cultural output was said to have surpassed that of 1938.
(C Bucharest 60, 22 Aug 52; U For a Lasting Peace, For a
People's Democracy, 15 Aug 52)
Comment: This development is attributed mainly to the
guidance and assistance contributed to Rumania by the Soviet
Union. The alleged industrial gains appear imposing largely
because of the relatively minor industrial base in Rumania at
the end of the war.
The agricultural statistics are significant in that they
indicate the accelerated rate of collectivization this year.
Of the "some 1,500" collective farms, over 400 have been
formed since the beginning of 1952. The 860 agricultural
associations are probably those of the permanent type which
have been pushed since September 19510
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8. Possible changes in ROK police and army commands reported:
On 19 August appeared likely
25X1X "in the near uture" Colonel "Snake" Kim
wou be ma e r ga ier general and appointed ROTC Army Provost
Marshal, while "Tiger" Kim, head of the police in South Cholla
Province would be made chief of the ROK National Police. The
25X1X Brigadier Generals Kim Chong-pyong and
25X1A
Yi Yong-mun, both former senior staff officers and field com-
manders, would be transferred to training commands.
010, Korea B-3, B-6, 25 Aug 52)
Comment : Both "Tiger" and "Snake" Kim, considered un-
scrupulous strong-arm men, are close allies of Yi Pom-sok.
If they are appointed to the above posts, it would probably
be motivated by President Rhee's desire to counter the grow-
ing strength of the Home Minister Kim-Prime Minister Chang
faction.
The two generals' transfer to training duties may be
due to their anti-Rhee stand during the recent political
crisis.
Pacific "peace" conference to adhere to line sketched in
June ; Kuo o-3o, airman of the China Peace Committee, s aced
on 19 August that the Asian and Pacific Region Peace Conference,
opening in Peiping in late September, will adhere to the four-
part line sketched in the preparatory meeting in June. Kuo
specified that the conference will (1) oppose preparations for
war and the use of "numerous" weapons; (2) oppose embargoes
and seek "normal" economic relations; (3) oppose the remili-
tarization of Japan and its use as a base for aggression;
and (4) call for a peaceful settlement of the current conflicts
in Korea and Southeast Asia. (R FBIS 21 Aug 52) 25X1A
Comment: Kuo's remarks are significant chiefly for his
reaffirmation of the fourth point. Radio Peiping recently
broadcast a lengthy interview with a Soviet spokesman, as-
sociating the USSR with the themes of the Pacific "peace"
conference, which did not mention any Soviet interest in
settlement of Far Eastern conflicts outside Korea. Although
Moscow still has not explicitly endorsed this fourth point,
the "peace" conference line as defined by Kuo presumably has
Soviet approval.
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10, French official presses for tripartite declaration on
Southeast Asia: high French official c a in Saigon has again
approached m assador Heath to urge a reply to a French sug-
gestion for an Anglo-American-French declaration of a com-
munity of aims in Southeast Asia. He pointed out the like-
lihood of a new Communist peace offensive after the present
Moscow meeting or the September Peace Conference in Peiping
and emphasized the need for immediate counterpropaganda.
Heath approves the French proposal primarily as a ve-
hicle for warning Peiping against aggression in Southeast
Asia. He warns, however, that American adherence to any
joint pronouncement would commit the United States far more
deeply to French and British policies in Southeast Asia than
heretofore. (S Saigon 434, 23 Aug 52)
Comment: The French have proposed a tripartite declara-
tion expressing concern for the independence of Southeast
Asian countries and a desire to aid them economically. They
wish to include only a vague commitment of assistance in case
of an attack.
11. Burma Communists to continue peace overtures to govern-
ment: Leaders of f he Burma Communist Party reportedly decided
recently to continue their peace overtures to the government,
to moderate their anti-UN propaganda, and to cooperate with
the government in any drive against the Chinese Nationalists
in Kengtung.
While admitting that these decisions were probably
reached by the Communists, the War Office stated that the
Communists were insincere in their professed desire to end
their insurrection and that their offer to aid in a drive
against the Nationalists was merely a device to embarrass the
government.
The American Embassy in Rangoon believes that the report
constitutes further evidence of a shift in Communist strategy
in Burma from open rebellion to infiltration tactics. (C
Rangoon 289, 22 Aug 52)
Comment: The government has been uncompromising in its
rejection o all Communist peace overtures to date; it is
highly unlikely that a surrender under mutually satisfactory
terms can be negotiated.
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12. Asian Socialist bulletin attacks Soviet "colonialism":
The preparatory committee for the Asian Socialist Conference
to be held in India in October has issued a bulletin in which
Soviet policy toward the East European Satellites is attacked
as essentially a policy of colonial exploitation. Asian
Socialists are also warned not to become enslaved by either
totalitarian communism or capitalist democracy and are urged
to apply socialist principles in the light of historical and
emotional conditions peculiar to Asia alone. (C Rangoon 289,
22 Aug 52)
Comment: The preparatory committee consists of many
influential Asian leaders, including Burmese and Indonesian
delegates whose parties now hold power in their respective
countries. While the bulletin reflects neutralist sentiments
typical of Asian socialist thinking, its strongly anti-
Communist tone signifies a distinct trend away from a
sympathetic attitude toward the Soviet "socialist experiment."
13. India asks Britain to stop enlistment of Gurkhas in
Indian territory: The Indian Government has formally requested
that r tain stop the "recruitment" of Nepali Gurkhas in Indian
territory. The British High Commissioner in*New Delhi, who has
recommended that the request be complied with, has indicated
his concern that a protest could lead to an Indian move to cur-
tail Britain's travel rights in Indian territory. He also
asserted that Britain would at present be hard pressed for
troops. if deprived of the Gurkhas, of whom about a division
are now serving in Malaya. (C New Delhi 786, 22 Aug 52)
Comment: Under the 1947 treaty between Britain, India
and Nepal., initial processing of Gurkhas recruited by British
agents inside Nepal is now conducted at four British Army
stations on the Indian side of the border. The Indian request
would apparently require Britain to move these facilities
outside the subcontinent.
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14. Nepalese governing body inadequate to cope with disorders:
Nepalis new five-man advisory council, appointed By weak ng
Tribhuvana, includes leftists, conservatives and opportunists,
and lacks the strength to restore order and maintain control.
A grave weakness of the council is that it has no representa-
tive oaf the powerful Nepal Congress party. There are indica-
tions that the council is intended only to keep the government
functioning until the political struggle between B.P. and M.P.
Koirala, with perennially dissident politicians mixing in,
is solved in a manner acceptable to the Indian Government.
(Factual data from: U New Delhi 677, 18 Aug; U New Delhi
4365, 23 May 52; S New, Delhi 1653, 19 Jan; C New Delhi 2642,
25 Apr; S New Delhi 3027, 30 Apr 51)
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15. East German propaganda stresses "reaction" to West German
lead: The belief o American officials in Berlin that the
compulsory military service will be officially introduced in
East Germany only after the adoption of similar measures in
West Germany has been further strengthened by the prominent play
recently given this assumption in the East Zone press. Controlled
media in East Germany on 13 and 14 August reprinted an open letter
to Pastor'Niemoller from seven East Zone clergymen who argued
that East Germany has not carried out threats to establish military
forces and that only the acceptance and implementation of the
contractual agreement would cause the East Germans to implement
countermeasures already announced.
Although this letter was ostensibly intended to refute
statements attributed to Niemoller that both the East and West
German Governments were endangering the peace, American officials
believe that it was designed to "salvage" neutralist opposition
sentiment against West German ratification of the contractual
agreement. (C Berlin Unnumbered, 23 Aug 52)
Comment: The conflict between simultaneous "remilitari-
zationn" ann "peace'' propaganda seems in this instance to have
considerably embarrassed the East German Government. It is not
improbable that the government has undermined the effects of the
"reunification" propaganda by its precipitous moves toward satel-
lization and isolation from the West.
16. Prominent Austrian rightist assails Western occupation
policies: Extending right-wing opposition to Western enazi-
catioo'n and restitution policies, Chairman Herbert Kraus of the
opposition Union of Independents (VdU) in Austria has launched a
vigorous attack against the Western occupation and demanded a
new "occupation regime." In a signed editorial, Kraus has called
for an end to Austrian "humility" and demanded that, in the
absence of .a "new and better" control agreement, the West cease
interfering in the country's domestic and economic policies.
The Kraus statement is a further indication that the VdU,
which has always exploited the denazification issue, continues
to depend upon right-wing radicalism for political survival. The
absence of criticism of the Soviet occupation, except indirectly,
and the assumption that the Russians would follow Western example
in "alleviating" the occupation suggest that the VdU may be
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developing a "blind spot" in this direction as well. The implied
demand for a new control agreement runs counter to the position
of the Western powers which have felt that the current agree-
ment is the best obtainable and should not be the subject of
renewed negotiation.
Since elections will be held in Austria within the next
year, the Kraus position appears to be a bold attempt to capital-
ize on Austrian weariness with the occupation. Such maneuvering
will probably make more difficult the continued cooperation-of
the coalition parties with the West. (Factual data from: R FBIS
22 Aug 52; S Salzburg Joint Weeka 7, 22 Aug 52)
17. Italy's top economic officials may seek more US aid: The
American Embassy In Rome believes that during their forthcoming
visit to Washington, Italian Treasury Minister Pella and Foreign
Trade Minister La Malfa will ask for an early and substantial
allotment of defense support aid, will raise the question of the
over-all level of aid for fiscal year 1953, and will probably
emphasize the importance of a substantial increase in offshore
procurement orders.
In the discussions with the Italian officials, the Embassy
suggests that the Department of, State stress that Italy can ac-
celerate the use of existing appropriations to combat unemployment
and meet its NATO defense production commitment for 1953, and that
it should increase private investments, develop its natural gas
and petroleum resources as quickly as possible, and continue its
liberalized trade policy.
La Malfa has stated recently that if British and French
trade restrictions continue, Italy will have to reconsider its
liberal trade policy because of rapidly dwindling EPU reserves.
(S Rome 799, 22 Aug 52)
Comment: Italy has approximately a $200,000,000 surplus in
EPU. But on a world-wide basis, and particularly in the dollar
area, Italy's unfavorable balance of trade is worsening.
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