CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001200170001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 9, 2016
• Document Release Date: June 8, 2001
• Sequence Number: 1
• Publication Date: September 2, 1952
• Content Type: REPORT

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SECURITY INFORMATION
US OFFICIALS ONLY
2 September 1952
OCI No. 8865
Copy No. r 5
CURRENT INTELLIGENCE DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
DIA, DOS Declassification/Release Instructions on File
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 tt~~SECURITY INFORMATION I ('
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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.
1Japan'willing to settle certain wartime financial claims
of Ita y: The Japanese Governmenthas informed the Italian
massador in Tokyo that it is ready to pay an indemnity to
settle damages suffered by Italian diplomatic and consular
officials during their period of internment in Japan between
9 September 1943 and 15 September 1945, Japan concedes that
its wartime actions toward the officers were "not in con-
formity with international usages."
The American Embassy in Tokyo reports that the Italian
Ambassador, who is "elated" by this offer, fears that Rome
nevertheless may continue to insist on reparations for
Italian property damaged between 1943 and 1945. (C Tokyo
738, 28 Aug 52)
Comment: Postwar relations between Italy and Japan,
although n`oot unfriendly, have been somewhat strained by
Italian claims for reparations for property damages in the
period after Italy quit the Axis. Although Italy was not a
party to the peace treaty signed at San Francisco, it sub-
sequently exchanged notes with Japan ending the "war." Italy
reserved the right to seek reparations and indemnities.
2. Mongolian delegation arrives in Moscow: The Mongolian
Prime Minister an his Deputy Minister o oreign Affairs
arrived in Moscow in August and were met by a delegation
headed by Mikoyan, Vice Chairman of the USSR Council of
Ministers and Chairman of the Council of Economic Mutual
Assistance. (R FBIS - 28 Aug 52)
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Comment: This arrival strengthens the possibility that
the curren Sino-Soviet conference may devise a plan for in-
tegrating the economies of the Communist Far East countries
with the USSR. Such a development would complement the Soviet-
East European economic bloc.
On arrival the Mongol Premier commented that the "new
grand program of the next Five-Year Plan of the Soviet Union
would further promote and consolidate the economic, cultural
and administrative development" of Mongolia. This, together
with the fact that Mongolia's present Five-Year Plan expires
this year,,suggests that the USSR is formulating not only a
new Five-Year Plan for Mongolia but, possibly in conjunction
with the Chinese, an over-all program for the Communist Far East.
A new Five-Year Plan for Mongolia would probably stress
the development of natural resources, particularly mining,
which would contribute to the development of the Lake Baikal
economic complex centered around Irkutsk,
3, French Communists speculate on Soviet Party Congress:
Some renc -Communists awe ow- rave ers re or ecTfy_`1.n-
terpret the forthcoming Soviet Party Congress as an indication
that the Kremlin anticipates a major showdown with the United
States.
Consequently they believe that the war economy of the
Soviet-controlled world must be speeded; the Communist parties
in the USSR and abroad must be purged; and the Peace Partisans
and other "peace" agencies must be active.
They conclude that the division and destruction of
Atlantic economic and defense cooperation will continue as
the main Communist objective in Europe, (C Paris 1256,
28 Aug 52)
Comment: Pravda is currently emphasizing the importance
of striR party iscfplane at all levels and hinting at the
necessity of punishment for any suppression of self-criticism.
EASTERN EUROPE
4. Strategically important Bulgarian rail line nears cordple-
tion: Bulgaria as announce a t fie su a an ra wa.y
o
e
n
connecting Sofia with the Black Sea ports of Stalin and
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Burgas will be placed in operation in honor of the 9 September
nniversary of Bulgaria?s liberation by Soviet forces in 1944.
The successful completion of the line9 which passes over 219
bridges and through 13 tunnels, is described as a "great labor
achievement" in which Soviet assistance and machinery played
an important role, (R FBIS - 28 Aug 52) 25X1A.
Comment: The completion and placing in operation of the
sub-B .n railway was listed among the primary targets of
the Bulgarian economic plan for 1951. This fact was conveniently
forgotten when the "fulfillment and overfulfillment" of the
1951 plan was announced in January.
In the past9 the most serious defect of Bulgaria's rail
transportation network has been the difficulty in clearing
traffic between the Black Sea ports and the interior. The
completion of the sub-Balkan line will serve at least in part
to remedy this situation.
5, Bulgarian Ministry of Roads and Construction criticized
for failures: n e for a pus is a n a otniches e De lo
on 28 August castigated the Bulgarian Ministry of oa s an
Construction for having given "insufficient and belated
assistance" and having failed to exercise strict control over,
the work of certain construction enterprises. Noting that
"many construction organizations and enterprises have recently
allowed serious omissions and shortcomings which have resulted
in great delays and considerable increases in production
costs," the editorial demanded that the affairs of Bulgarian
planning organizations "be put in Bolshevik order," (R FBIS
-29 Aug 52)
Comment: On 16 August, Rabotnichesko Delo stated that
"it was recently revealed" tha certain grave shortcomings
in our industry, agriculture, construction industry, and
cultural life are a result mainly of errors in the style of
leadership provided by our leading party, governmental, and
economic officials," A few days later, a decree of the
Council of Ministers and the Central Committee of the Commu-
nist Party sharply criticized the Ministry of Agriculture
and leaders of local party committees for their failure to
adhere to statutes and economic decrees in the administration
of cooperative farms.
Although considerable attention has been given to the
importance of disciplined, "Bolshevik" leadership in Bulgarian
party affairs for several months, a new and unusual emphasis
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was given to the problem following a speech delivered by
Premier Chervenkov on 10 August. However, there has as yet
been no indication that a purge might result.
6, Czech Minister of National Defense complains of failure
of spar s organiza ions o fulfill a ens. requirements.
Czech Mister o a i.on,a a ease exe3 ep corn-Twined
in a speech at the Army Sports Day celebration that Czech
sports and physical training were "very frequently being
carried out for their own sakes" and "did not fully coincide
with the interests of national defense." He blamed these
deficiencies, which were particularly notable in rural
communities, on the authorities of the State and the sports
association, (R FBIS - 28 Aug 52)
Comment: The Union for Cooperation with the Army was
estabc`last November by direction of the Ministry of
National Defense to utilize voluntary organizations including
youth and sports groups in para-military training. In June
the Sokol, traditional Czech sports association, was instructed
to pay increased attention to "defense education." One year
of service in the Union was reported recently to have been
made compulsory for all Czech youth.
The fact that Cepicka singled out rural communities for
special criticism underlines the current emphasis being
placed by the government on stricter controls over the rural
population.
7. Rumanian coal minister appointed: The Presidium of the
Rumanian ran a ona ssem- y as relieved William Suder
as Deputy Minister of the Armed Forces and appointed him
Minister of the newly created Coal Industry, (R FBIS _
28 Aug 52)
Comment: The appointment of Suder (not "Tudor Ghinau,"
as previous y reported in Current Intelligence Digest, 27 Aug
.52) brings an old coal miner and M nner?s' Union eta a to the
new post. A driving Communist and member of the party Central
Committee, Suder's role in the Ministry of the Armed Forces
was apparently administrative and political rather than mili-
tary. Appointment of this "trouble shooter" indicates the
regime's determination to build up the Rumanian coal industry.
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8a Yugoslav official predicts Hoxha ouster: The Yugoslav
Government believes a emier 1ox a may be dismissed soon
and replaced by Minister of Interior Shehu, according to a
Foreign Ministry official. He doubted that the Albanian
regime would be overthrown, and stated that the Yugoslav
Government would continue to avoid action which might provoke
direct Soviet intervention. (S Belgrade 253, 28. Aug 52)
Comment: This is the first comment by a responsible
Belgra ego icial since Yugoslav propaganda began in early
August to assert that Albanian anti-Cominform resistance was
increasing and that Hoxha would be'purged by his party.
Yugoslav-sponsored subversive activity against the regime has
increased, however, and there is evidence that Tito now feels
he can take stronger covert action in Albania without provoking
Soviet intervention.
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9. Radio Free Japan located in Nanking: Radio monitors have
established at ttherecent`-Ty In ;ugu rafed 720-kilocycle medium-
wave transmitter of Radio Free Japan is located in Nanking.
(R FBIS Okinawa, 28 Aug 52)
Comment: The short-wave transmissions of Radio Free Japan
were previously identified as coming from the Peiping area.
There are an estimated 250,000 short-wave radio receiving
sets in Japan, and almost ten million sets capable of receiving
medium-wave broadcasts. The inauguration of medium-wave
transmissions will permit Communist broadcasts to be heard in
approximately 55 percent,of Japanese homes.
10. Japanese Trade Ministry authorizes barter trade contract
with USSR: The Ministry o International Trade an Industry,
-
in early
August, authorized the barter of 189,00Y pounds of
Japanese rayon yarn in exchange for 13,000 tons of Sakhalin
coking coal, according to the US Embassy in Tokyo. The
transaction provides that Japanese ships will carry the coal
and that delivery of the yarn will not be effected until one
month after the coal has been received in Japan. The coal
is priced at $11 per ton f.o.b. (R Tokyo 255, 6 Aug 52)
Comment: At least three firm Soviet offers of Sakhalin
coal Have been proposed during the past year, but none of the
deals have been consummated. The willingness of the Soviet
Union to accept a non-strategic commodity for coking coal may
well stem from political rather than economic motives.
Trade between Japan and the USSR virtually ceased fol-
lowing the outbreak of the Korean war. Although Foreign
Minister Okazaki stated in June that a peace treaty must
precede resumption of trade with the USSR, it is unlikely
that the Foreign Ministry will block this kind of transaction.
11. Soviet personnel departing from Japan: The Soviet
Mission in Tokyo, on 29 August, reques a from the British
Embassy visas for 25 members returning to the USSR through
Hong Kong, according to Ambassador Murphy. The departing
members include the deputy chief of the mission and the
chief of the political section.
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The American Embassy feels this may be one of several
staff reductions to make the mission a small trade delegation.
There will be 40 working members and 14 dependents remaining.
(C Tokyo 766, 29 Aug 52)
Comment: The Soviet Mission has contended that the coming
into effect of the "illegal" peace treaty would not affect its
status in Japan. The Japanese, however, have denied it diplo-
matic privileges and are keeping the personnel under constant
police surveillance.
All aliens in Japan were required to register with the
Japanese Government by 26 July. As a possible hedge, the
mission on 22 July without comment presented a list of its
personnel to the Foreign Ministry.
12. South Korean Home Minister replaced by Yi Pom-sok adherent:
In a surprise move on 29 August, President Rhee replaced Home
Minister Kim Tae-son with a provincial governor, Chin Hon-sik.
Chin is reported by the US Mission in Korea to be an extreme
rightist and an associate of Louise Im and Yun Chi-yong,
members of the Inner clique surrounding President Rhee.
Also replaced in this latest cabinet shift was the reason-
ably competent Minister of Agriculture Ham In-sop. The new
Minister is Sin Chung-mok, a strong pro-ghee member of the
National Assembly.
Prime Minister Chang Taek-sang, who, according to a
recent constitutional amendment, must propose cabinet changes,
was not informed of this shuffle until it was announced.
(C Pusan 268 and 269, 30 Aug 52)
Comment: Rhee by this illegal move has effectively
stopped any serious bid for power that might have emanated from
Prime Minister Chang and former Home Minister Kim. The ap-
pointment of Governor Chin, an intimate of the defeated vice-
presidential candidate Yi Pom-sok, to the powerful Home Ministry
may indicate a resurgence of Yi Pom-sok's influence.
13. Sino-Dutch barter deal gets tentative approval from The
Hague: The Dutch Ministry of Economic Affairs-has given en-
a~ t ve approval to a barter transaction involving the exchange
of 17.5 million guilders (about 4.7 million dollars) or paper,
sugar, pharmaceuticals, and chemicals for an equivalent amount
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of Chinese soybeans and groundnuts. The Ministry has indicated
that exporters will have to obtain individual approval for each
shipment under this deal. (C The Hague 289, 28 Aug 52)
Comment: Following the Moscow Economic Conference, the
Chinese negotiated several barter deals with Western business-
men, hoping thus to exploit the sentiment in business circles
for a revival of East-West trade and thereby counter American
pressures for strengthening export controls. Even though the
Sino-Dutch barter deal may not involve highly strategic items,
Communist propaganda can point to it as indicative of the
profits to be expected from a relaxation of export controls.
25X1X
'14. Viet Minh prepares for fall offensive:
Tie actions of Viet
25X1X Minh military units in north Vietnam indicate that prepara-
tions have been begun for an October offensive. Although no
major shifts of divisions have occurred, there has been some
regrouping of smaller units, including artillery. A campaign
in the "middle Tonkin area" is being planned.
25X1X
here may be an offensive in
the northwestern sector of the Tonkin delta, with a diversionary
attack on the southern perimeter.
25X1
15. Removal of Tonkin Governor widely rumored: The US Consul
in Hanoirep6E+ ur ng ' rumors , which are becoming in-
creasingly persistent, that Governor Binh of Tonkin will soon
be replaced. The Governor has characterized the reports as a
phase of the "war of nerves" Premier Tam was waging against
him.
The top French official in Tonkin, while inexplicably
depreciating the significance of the rumors, said they tended
to reinforce other indications that Tam will discard Binh
before November. (S Hanoi 128, 28 Aug 52)
Comment: Another source in Hanoi has reported that Tam
has deco fdeeTrto remove Binh, and rumors of a change are current
in Saigon and Paris.
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Binh is one of the ablest, most popular officials in
Indochina and his continuance in office is considered vital by
.the French commander in Tonkin. It would be extremely diffi-
cult to find a competent replacement for Binh; a less efficient
and popular official could have a serious adverse effect on the
war effort in North Vietnam.
lFro Large-scale Communist movement in Thai-Malayan border area
discounted. British m rtary an p-0-1-ice sources in Singapore
an uala ,Lumpur discount the 20 August report of large-scale
Communist movement in the Thai-Malayan border area, The only
border activity which occurred took place when a combined force
of Siamese and Malayan police contacted 35 guerrillas. Local
?British intelligence states that unverified reports indicate
the terrorists are moving to establish liberated areas just
inside the Thai border. (S Singapore 251, 29 Aug 52)
Comment. A British official in northeastern Malaya told
the American Consul in Penang on 20 August that a force of
500 bandits was reported moving toward Padang Besar, a village
on the Thai border. British police commented at the time
that they believed the size of the force was much exaggerated.
17o Non-Communist political leader comments on Indonesian
participation in Peiping peace con erence. am unan, ice
airman o ar amen an par .mangy leader of the
Christian Party, stated to a Communist newspaper that the
September Peiping Asian Peace Conference "is a true reflection
of the feelings of friendship and love toward all peoples of
the world, even though sympathizers could be dubbed Communists."
He continued that one could hear much propaganda trying to sow
seeds of hate for "the Soviet peoples and the people of other
people's democracies" and that Indonesia should take the
opportunity presented by the peace conference "to know these
people firsthand and strengthen the bond of friendship with
them." (R Djakarta 412, 28 Aug 52
Comment. Tambunan, a garrulous advocate of Indonesia?s
"indepe en " foreign policy, is as eager to resist commitment
to the Soviet bloc as to the Western bloc. His insistence,
like that of many Indonesians, of seizing every "opportunity"
to know the "people of the people?s democracies," makes good
propaganda for the Communists and enhances to some degree the
political prestige of the Indonesian Communist Party, now
engaged in united front tactics.
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The Indonesian Government has not tried to hinder the
peace committee's plans to send a delegation to Peiping.
18. Indonesian press comments adversely on Moslem pilgrim
airli : Among unfavorable press comments on the American
airlift of Moslem pilgrims in the Middle East, the Socialist
daily in Djakarta stated that the "real reason for the airlift
is a US gesture in support of efforts to set up a Middle East
defense pact." The US Ambassador commented that Indonesians
are in no mood to accept the United States as a benefactor
in any respect. (C Djakarta 413, 28 Aug 52)
19. World Buddhist meeting in Japan may become pro-Communist,
anti-American propaganda vehicle: The world 903hist meeting
in Tokyo beginning on 25 September will be attended by an
influential Ceylonese Buddhist delegation which includes Dr.
G. P. Malalasekera, president of the World Fellowship of
Buddhists and the Ceylon Buddhist Congress. He intends to
preside over the gathering and it is reported that he plans
to make "world peace through Buddhism" the conference theme.
(C Colombo 85, 26 Aug; C Colombo Desp 982, 21 June 52)
Comment: Malalasekera is an opportunist whose opinions
have vacillated from being pro-American to anti-American,
pro-Communist. Recently he was rebuffed by American can-
cellation of a State Department sponsored trip to the United
States which had been awarded to him earlier. The cancella-
tion was made on grounds of his public anti-American state-
ments and publications.
Unwittingly, or through the influence of leftist asso-
ciates, Malalasekera might be persuaded to turn the conference
into a pro-Communist propaganda vehicle, particularly in view
of the American rebuff. A deterrent, however, would be the
traditional disinclination of Japanese Buddhists to engage
in political activities.
20. British may ask India to reconsider request on Gurkhas:
The British Foreign Office is considering asking Indian Prime
Minister Nehru to reconsider his recent request that Britain
stop the "recruitment" of Nepali Gurkha troops in Indian
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territory, but anticipates that he would probably refuse. The
American Embassy in London comments that the Indian move has
caused the British much embarrassment, since they cannot
afford to offend India, despite their concern over the possible
eventual loss of the Gurkhas.
A Foreign Office official comments that the legal status
of the British recruiting depots in India is not clearly
defined in the 1947 treaty, and that therefore Britain's
position is weak. It hopes that Nehru will agree to moving
the depots into Nepal. Otherwise it will probably be necessary
to process recruits in Malaya. Foreign Office officials also
fear that if India's "heavy-handed meddling" in Nepal's in-
ternal affairs continues, the hill tribes throughout Nepal,
Sikkim, Bhutan, and Assam, including the Gurkhas, may become
"restive,",ending their usefulness as a source of manpower
for Britain, and providing an excuse for direct Indian or
even Chinese intervention. (S London 1121, 27 Aug 52)
Communist Party holds first public political meeting in
Kashmir: The first public political meeting in Kashmir orga-
n ze y the Indian Communist Party was held in Jammu on 26
August. The Communist spokesman asserted that Kashmir's
future would be assured only through accession to India. He
also urged that the Kashmir case be withdrawn from the United
Nations. The spokesman stated that the Communist Party had
decided to work openly "under the hammer and sickle red flag."
(U New Delhi 813, 26 Aug; 826, 27 Aug 52)
NEAR EAST - AFRICA
Mossadeq considering 80 percent reduction in armed forces:
Prime Minister ossa eq, in a recent conversation with Ambassa-
dor Henderson, stated that he was considering an 80 percent
reduction in Iran's armed forces. Henderson believes that
this is not an idle threat, and that if drastic economies were
necessary, Mossadeq would prefer to cut the armed forces
rather than other government agencies.
Comment: Mossadeq has repeatedly said that he might cut
the size-o--f- the armed forces, and National Front extremists
in parliament have demanded a radical reduction. The Prime
Minister appears to realize the need to maintain the army as
an effective force, however, and there is no indication that
he will take such drastic action.
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23, Greek Chief of Staff may recommend 15 percent reduction
of armed forces: The chief of the ree enera Staff told
Ambassador Pei ifoy and Admiral Carney on 28 August that the
armed forces could be reduced to 165,000 men without endanger-
ing Greece's security. He explained that the government could
not legally reduce its armed forces until he had delivered his
technical report, which would take at least 30 days.
Admiral Carney warned that if Greece's armed strength
fell below the point necessary to defend the country, he
would be forced, as NATO commander, to make the fact public.
(S Athens 705, 28 Aug 52)
Comment: Greek officials have been insisting that the
country"s armed forces, now numbering approximately 193,000
strong, must be reduced sharply because the United States has
decreased its aid. Greece has not yet announced the forces
it will assign to NATO,
24,
Lebanese junior officers reportedly planning army coup:
Senior officers of The Lebanese Army, loyal to the present
political regime in Beirut, admit the possibility of junior
officers engineering a coup against both the government and
the military high command. The source of this information
states that the possibility of a coup is being discussed by
all classes of Lebanese society. (S SO PD 038, 29 Aug 52)
Comment: Reports from Beirut during the past three
months have indicated considerable Lebanese discontent with
the corruption and nepotism of the Khouri government. Po-
litical tensions created by various anti-Khouri forces in
June and at the end of July failed to bring the fall of the
government chiefly because opposition groups were unable to
unitee The experienced and entrenched government has
.recently made some gestures toward a reform program.
General amnesty of Tunisian political prisoners delayed
by Res ency enera : The Acting Res en General in Tunis
states tHat po ical detainees now number 542, almost 200
less than the number held six weeks ago. In the absence of
the Bey's approval of the French reform program, the Residency
plans to continue releases at about the present rate, although
the Resident General had hoped to make a gesture of general
amnesty. (C Tunis 68, 29 Aug 52)
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Comment: Despite the small number of political prisoners,
Tunisian jai is have become overcrowded in the last eight months
with persons charged with criminal offenses. This overcrowding
is so serious that authorities decided to remove some of the
inmates to Algerian prisons. In protest to the removal order,
71 prisoners in the main city prison in Tunis rioted on 29
August.
26. Tunisian nationalist offensive lags: The American Consul
General in Tunis reports that the nationalist offensive is
apparently losing its impetus. He also confirms French reports
that a disagreement exists within the Bey's advisory council.
Although the faction which advocates outright rejection of
French reform proposals is likely to prevail, the final reply
may reflect the moderating influence of the group which would
accept some of the program and request specific changes in
other parts. (C Tunis 70, 29 Aug 52)
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"mass actions" against Bonn and Paris
treaties: American officials in Berlin believe t at the appeal
of t e East German Socialist Unity Party for "mass actions"
against West German ratification of the contractual agreement
and EDC treaty and in favor of a four-power conference on a
peace treaty may presage a new and intense propaganda campaign
for German reunification. Although aimed primarily at the West
Germans, its purpose would be to convince East Germans of the
validity of satellization as an alternative to Western "obstruc-
tion" of reunification.
American officials doubt that either the Russians or East
Germans want an international investigation of election con-
ditions in the East Zone. (C Berlin 358, 28 Aug 52)
Comment: The East German Council of Ministers on 28 August
passe a`resolution in support of the latest Soviet note and
calling upon the East German parliament to take "necessary
decisions" toward the formation of an all-German election com-
mittee. That these moves are essentially defensive is suggested
by the renewal of previous offers to rescind East German security
measures once agreement on all-German elections has been reached.
A period of intensified unity propaganda is anticipated, although
the Communists no longer have any real hope of preventing West
German ratification of the Bonn and Paris treaties.
28, German Socialists favor four-power negotiations: In of-
ficial comment on the latest Soviet note, the central committee
of the West German Social Democratic Party declared that the
problems which must be the subject of four-power talks cannot
be solved by an exchange of notes. Use of the Soviet-proposed
order of agenda as a pretext for not holding such talks was
rejected.
The party press chief who helped draft the statement has
stated privately that the Socialists realize "now more than ever"
that unity cannot be achieved under present conditions. Never-
theless, he said, the West should agree to big-four talks. (C
Bonn 849, 27 Aug 52)
Comment: In his first speech since Schumacher's death,
acting party chairman Ollenhauer said that although the Soviet
note did not coincide with the Socialist views in many respects,
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the Bonn government should study the chances for a "genuine four-
power conference." However, Berlin Mayor Reuter, another Social-
ist leader, has emphatically advised American officials against
accepting the offer to negotiate now without further exchanges
and clarifications.
29. Schuman reportedly more flexible on Saar issue: A French
official close to both Schuman an Pinay believes that failure
to agree on a Saar settlement now would not threaten ratification
of the EDC treaty, but that French concessions with respect to
their economic position in the Saar would. Stating that press
accounts of the recent Schuman statements before the French
National Affairs Committee were inaccurate, he asserted that
some French territory might be ceded to a Europeanized Saar if
"agreement really depended only on this." (S Paris 1276,
28 Aug 52)
Comment: While the official's statements were ostensibly
an attempt to clarify press reports attributing an unduly
nationalistic stand to Schuman, they indicate a greater flexi-
bility in the French position than has lately been apparent.
30. Soviet official shows concern over reference of Austrian
question to UN: Soviet Political Adviser u ryavtsev, at a
meeting witf Foreign Minister Gruber on 26 August, argued against
submission of the Austrian treaty question to the UN General As-
sembly. He stated that the problem was beyond the competence of
the United Nations and that a hearing there would only further
complicate matters.
Kudryavtsev also observed that the "Austrian Government
must have known that an abbreviated treaty would be unacceptable
to Moscow." He then expressed interest in Vienna's attitude
toward the old draft treaty. (S Vienna 574, 27 Aug 52)
Comment: At the time the Soviet Government rejected the
Western proposals for a short treaty, it also took issue with
the Austrian suggestion that the old draft treaty is no longer
acceptable to the Austrian parliament. Kudryavtsev's inquiry
with respect to the old treaty could reflect Russian concern over
the possibility of losing valuable economic concessions as a
result of its long stalling on an Austrian settlement.
31. Coal-steel pool to push vigorous anti-cartel measures: Jean
Monnet, chairman of the Schuman an High Authority, has revealed
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to Ambassador Draper that he expects that most of the coal-steel
pool's difficulties will be created by government bureaucracies
and professional cartelists now issuing regulations for the coal
and steel industries. He is very optimistic, however, of the
ability of the High Authority to enforce the anti-cartel pro-
visions of the Schuman Plan. (S Paris POLTO 236, 29 Aug 52)
Comment: Monnet seemingly plans to spike criticism that
the
coal-steel pool is a reversion to the pre-1914 cartel system.
He
has
avoided identifying the pool with the Council of Europe,
as
the
British would have preferred, and hopes to gain support
for
a
European political community by getting the Schuman Plan
off
to
a good start.
32. Britain now expected to support December NAC ministerial
meeting: The British ort antic Council representative
believes that in a few days his government, which had favored
an October ministerial meeting, will express support for the
American proposals for a 15 December meeting and for completion
by that time of the NATO annual review. At the 28 August ses-
sion, all other NAC representatives "explicitly or tacitly"
agreed to try to have the review ready for ministerial action
in December.
American representative Draper comments that the 28 August
meeting was the "most constructive and vital" he has attended and
was particularly notable for the cooperative attitude regarding
the US position on the timing of the ministerial meeting. He
believes that the general discussion of German problems which
took place has greatly encouraged the smaller NATO countries by
giving them a sense of participation without endangering the
policies of the three occupying powers. (S Paris POLTO 228,
29 Aug 52)
Comment: Britain had previously doubted that the review
would be ready by December and had advocated an earlier meeting
to give a psychological boost to the members' efforts to meet
their rearmament targets for this year.
apprehensive about political
stability: The Chilean Foreign Minister foresees "peril dis-
turbances" if presidential candidate Ibanez del Campo loses first
Chilean Foreign Minister
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place by a few votes, and "much more so if he gets top ranking."
The government, the American Embassy states, is aware that
followers of Ibanez are training an "armed militia" with which
the forces of the rightist and center-left candidates "cannot
cope." The Foreign Minister stated that the Communists are
reportedly prepared to fight in the streets for any candidate
obtaining the plurality vote.
The Foreign Minister believes that Ibanez' chances now are
for third place, with the rightist and center-left candidates
running even. (C Santiago 69, 28 Aug 52)
Comment: Ibanez' followers may create disorders or attempt
a coup :fore December if the 4 September election appears rigged
against him or if he wins a plurality and is not chosen president
by the Chilean congress. One other report has stated that an
Ibanista faction was "believed to be secretly training popular
militia groups."
The Chilean Government's expressed fear of Ibanez and of
possible disturbances may be attributed in part to its desire
to have American firms give financial aid to the center-left
candidate, and may actually reflect President Gonzalez Videla's
fear of the wealthy rightist candidate,
25X1 C
34. Threat of revolt in Ecuador not seen serious:
e
olt a
a inst
resid nt
o
fo a
v
-
g
_
r 1
are again ac tivei.,y seeking supp
Velasco Ibarra. These officers expect to be removed from their
posts following Velasco's inauguration (a five-day ceremony 25X1C
which began on 30 August). the Velasco
forces feel that a revolt would most likely be attempted during
the first days of the new administration, but that it could
easily be put down.
An attempt at revolt by the senior officers at this time
does not appear probable. The senior officers were violently
opposed to the election of either former dictator and now
President Velasco Ibarra or Conservative runner-up Alarcon
Falconi, both of whom were opposed to the Liberal, anti-clerical
tradition of the army. Reportedly, these officers hoped to take
over the government prior to the June elections, but made no
actual attempt since they were unable to gain sufficient support
from the junior officers or the police. There have been no
reports to indicate that they have more support now than they
had in June.
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Although the senior officers may, through the justified
fear of being purged, make a sudden attempt as the Velasco forces
reportedly fear, it seems more likely that they will wait for
Velasco to show signs of playing dictator again and thus assure
themselves of a broader base of support. (Factual data from: S
C Quito 811,,29 Aug 52)
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