CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001200180001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 9, 2016
• Document Release Date: June 8, 2001
• Sequence Number: 1
• Publication Date: September 3, 1952
• Content Type: SUMMARY

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SECURITY INFORMATION
US OFFICIALS ONLY
3 September 1952
OCI No. 8866
Copy No.
P4 ~1,p 5
4 V
CURRENT INTELLIGENCE DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
State Dept. 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.
~ ~. ~ r x r a* 4
HEWN T CIV `~ rD .
WNORATOILY ? SECRET JOB _7-'''j?-.__
Brix
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 BYLAW,
1, Swedish importers unable to get Poland to lower coal
prices: Representatives of Swedish coal importers were
side uled to return from Warsaw on 30 August without having
secured a downward revision of coal prices. Swedish news-
papers have reported that if necessary Sweden can count on
increased imports of coal from Great Britain.
The American Embassy in Stockholm reports that the
Swedish Government was not involved in these price discus-
sions, which were carried on by the importers for commercial
reasons, and adds that these talks have nothing to do with
the official trade negotiations which are to begin at the
end of this month. (C Stockholm 271, 29 Aug 52)
Comment: It is unlikely that the Poles would undermine
theirargafning position by agreeing. to lower coal prices
before the beginning of the official trade negotiations. The
experience of the Swedish importers, however, presages probable
difficulties in the negotiations, since Sweden will doubtless
continue to demand that prices be lowered,
The Poles would like to make coal exports to Sweden
contingent on increased delivery of important steel products
and vital iron ore, but their declining bargaining position
will make this difficult. A curtailment of coal purchases
by Sweden could have disruptive effects upon the Polish
economy.
2. Soviet coal output exceeds plan quotas: Production reports
for t e it quarter of released in Moscow on 31 August
indicate that coal output exceeds planned goals and is now
8,1 percent over 19510 (U New York Times, 1 Sept 52)
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Comment: It is estimated that 1952 coal production will
be about 308 million metric tons, or about 22 million tons
more than last year. At this rate of output, Stalin's goal
of 500 million tons for 1960 could be attained by 1958.
The average annual increase of coal production in 1948-
1950 was about 25 million tons as against the 22 million
tons set in the fifth Five-Year Plan. It is likely that
the rate of output is being retarded because of increasing
supplies of crude oil, production of which is scheduled in
the Five-Year Plan to increase at a rate over twice as fast
as that for coal. In addition, increasing supplies of power
will become available upon completion of the huge Kakhovka
and other hydroelectric stations.
3. Albanian refugee reports security tightening in Albanian
Army: Yugos av newspaper on 28 August published a report
gained from an Albanian army defector that Albanian security
police recently entered First Division barracks in Tirana and
removed suspected anti-regime personnel. The same type of
incident allegedly is happening in other Albanian military
units. (C YUG 736 Belgrade, 29 Aug 52)
Comment: The reported dissatisfaction in Albania is
said to a widespread in the army, which maintains a precarious
loyalty because of relatively better food rations,
4. Czech dollar shortage continues to curtail purchases of
strategic raw materials: usually reliable source reports
that in August, ax lanitti, importer-exporter in Trieste who
handles considerable trade with the Satellites, offered 65
tons of nickel to Metalimex, the Czech nonferrous metals
state trade company. According to the source, the Czechs
desire to purchase the nickel but will not have sufficient
dollars available until September. (S Trieste Joint Weeka 35,
29 Aug 52 )
Comment: Since the import of nickel has high priority
in Czeci hoslovakia, the postponement of this shipment indicates
that a shortage of dollars continues to curtail Czechoslovakia's
ability to purchase strategic raw materials.
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5, Further Sovietization of Hungarian education reported:
Chief Deputy Minister of Education Magda Jo-boru opened the
new school year in Hungary with the announcement that po-
litical education of youth no longer would be sacrificed to
"raising the standard of studies." The statement was accom-
panied by a report that one hundred general and secondary
schools had adopted the Soviet Novikov system under which a
"directing master" regularly attends the classes of teachers
to check on their work.
It was also announced that special Russian branches
would be opened in large city schools "to welcome youth de-
siring a special knowledge of Russian." (C Budapest 196
and 199, 29 Aug 52)
6, Hungarian youth organization to promote additional
paramilitary tra ning: The official organ of the Hungarian
you organization ISZ, commenting on the recent decree
introducing compulsory physical training into the Hun-
garian universities under the direction of DISZ, called upon
the organization's units to promote attendance at "specified
sports clubs" and to emphasize the importance of securing
Ready to Work and Fight badges. (R Budapest 199, 29 Aug 52)
Comment: The Ready to Work and Fight movement provides
paramilitary training for large numbers of intellectuals,
white collar workers and industrial workers.
25X1 C
25X1 C
?, Poles obtain shipment of-pyrite through Switzerland:
o have obtained 20,000 metric tons of pyrite
or the Supply Center for the Polish Coal Mining Industry,
The sellers are two firms located in Liechtenstein. A credit
has been opened with the Paris Banque Commerciale pour
1'Europe du Nord to finance the transaction, and the shipment
is to be made c,i,f. Gdynia,
25X1 A
Comment: Poland is dependent upon imports from non-
Orbit countries for pyrite, which is used in the manufacture
of sulphuric acid. Pyrite is on US List II B for quantitative
control, but is not on an international control or embargo
list.
Falkimex A. G. of Zurich is notorious for its purchasing
activities on behalf of Poland.
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8. Polish emphasis on machine industry indicated by recent
appointments: Official announcements indicate at three
under-secre cries of state were appointed to the Ministry of
Machine Industry of the Polish Government during August.
One of the new under-secretaries was formerly the director
of the Ursus tractor factory, while another was director of
the production de artment of the Ministry. (C Warsaw 101, 29
Aug; R FBIS 6 and 20 Aug 52)
Comment: The establishment of the Ministry of Machine
Industry in February of this year indicated a concentration
of effort on the production of agricultural machinery, together
with other machinery. The appointment of three under-secre-
taries during August is a reflection of increased activity
in this sphere.
Establishing and equipping state-controlled machine
tractor stations is one of the first requisites for any
collectivization campaign. The Polish Government centralized
control over machine tractor stations in May.
9. Rumanian deportations continue: The American Legation
in Bucharest reports reliable indications that 800 to 1,000
members of the bourgeoisie were deported in early August
from Constanta to Moldavia in northeast Rumania. Evacuees,
who were each allowed to take 40 kilograms of belongings,
were not placed under arrest, but were apparently assigned to
work projects at their destination. Some deportations from
Ploesti were also rumored. (R Bucharest 69, 29 Aug 52)
Comment: Deportations from Bucharest and other Rumanian
cities have been reliably reported since early last spring,
and Moldavia was also assertedly the destination of some of
those evacuees.
Removal from Constanta suggests tighter security in the
Dobrudja area, a region of primary Soviet interest in Rumania.
It also suggests that there is currently more need for forced
labor in Moldavia on. projects such as. the Bicaz hydroelectric
station than on the Danube-Black Sea Canal.
10. Rumanian oil and manpower shortages indicated: The
American Legation in-Bucharest reports that on 26 August a
national conference of Rumanian combine operators cited lack
of fuel, lubricating oil, and manpower as the chief diffi-
culties during the harvest.
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The Legation also noted that, although women now con-
stitute 24 percent of workers in the socialist sector of the
Rumanian economy, the Central Committee of the Rumanian
Workers' Party has criticized failure to draw more women into
production. (R Bucharest 70, 29 Aug 52)
Comment: Shortages of petroleum products in oil-rich
Rumania indicate both poor distribution and high export
requirements, although Rumania does not produce much high-
quality lubricating oil.
The manpower shortage for the harvest probably refers
to trained operators of agricultural machinery, of which
there has been little in Rumania. The drive to recruit women
into industry was stressed early this year and indicates the
need for building up the urban labor force to meet increasing
demands of the industrialization program.
11 Yugoslavs issue new decrees which further integrate
Zone B with Yugos avi.a: According to the Yugoslav home
r a d i o commander of Zone B has issued
20 new decrees further integrating the territory with
Yugoslavian One group of decrees extends certain Yugoslav
civil laws relating to civil relationships such as marriage,
etc.,to Zone B. A second group extends laws of the Croatian
and Serbian republics relevant to political structure of the
government to Zone B. A third group extends Yugoslav
economic decrees furthering the der.entralization process
initiated by previous laws. (R FMS 30 Aug 52)
Comment: In May and July of this year, the Yugoslavs
promu gated decrees tying Zone B closer to Yugoslavia. These
decrees brought strong protests from Italy, both in the
Italian press and by official notes from the Italian Foreign
Office which deemed the closer integration "illegal." This
new set of decrees will cause further protests from the
Italians and will undoubtedly impair prospects for Italian-
Yugoslav negotiations over Trieste.
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12, Japanese Liberal Party's factional wrangling intensifies:
The Japanese Diet's sudden dissolution has intensified e
wrangling within the Liberal Party, according to Ambassador
Murphy. At a meeting of the Hatoyama faction on 29 August,
Prime Minister Yoshida was attacked for his alleged "unrea-
sonable method of dissolving the Diet." Although denouncing
the Prime Minister, the meeting resolved to leave the solution
of differences to a later date and to strive for a united
party victory.
A new development was created by the cabinet by its
revision of the election regulations which now require each
candidate to obtain a party affiliation certificate signed
by the party president. Ambassador Murphy comments that
this would mean that all Liberal Party candidates, including
Hatoyama, must be approved by Yoshida before running on the
party ticket. (R Tokyo 755, 31 Aug 52)
Comment: Continuation of Diet sessions favored the
Hatoyam~ action, which gained in influence as the Prime
Minister's prestige decreased. The sudden Diet dissolution
found the Hatoyama supporters without well-laid campaign
plans or adequate funds.
According to a subsequent report from Ambassador Murphy,
Yoshida has no intention of using the party certificate sys-
tem to expel pro-Hatoyama elements from the party. Murphy
adds that although present indications favor the party re-
maining outwardly united, the possibility of a split should
not be discounted.
13.. Japanese Liberal Party decides on rearmament stand: On
30 August the Liberal arty approved a ten-point platform to
be used in the October elections, which includes a national
defense plank of sufficiently general form to allow for future
elaboration, according to Ambassador Murphy. Meanwhile Prime
Minister Yoshida stated that Japan cannot rearm until it has
disposed of the "war victim problem," recovered sufficient
power to finance rearmament, obtained public approval for a
constitutional revision, and fostered a "patriotic spirit
among the people." (R Tokyo 775, 31 Aug 52)
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Comment: A Kyodo press release described the national
defense plank as advocating that Japan defend itself as an
independent nation, but that the country's defense power
should be built up gradually. As a provisional step, Japan
would depend on the US-Japanese Security Treaty. It also
proposed participation in the UN and the consideration of a
collective security setup.
14. Murphy sees no immediate Communist civil
revolt in Japan:
Ambassador Murphy in Tokyo sees no current in cation that
short-run Soviet tactics in Japan call for a Communist-led
civil revolt. Recent Japanese Communist declarations are
viewed as signifying at least a temporary shift of emphasis
from tactics of violence to one of lulling popular opinion
and avoiding major police interference. The reason for the
tactical shift is considered two-fold: first a need to use
the coming elections to intensify confusion and stimulate
anti-foreignism, and second a realization that violence
alienates large segments of opinion which are susceptible to
Communist propaganda.
The Ambassador points out, however, that there are factors
favoring revolt within the short-term period. Such action will
be more difficult after Japan has developed efficient security
organs with intelligence networks which kept the party to
miniscule size in the prewar period. While the US forces
possess the right to help put down externally instigated
large-scale riots, Murphy believes that Japanese Communist
attempts to provoke American interference in the expectation
of creating martyrs or accentuating xenophobia should not be
excluded. (C Tokyo 769, 30 Aug 52)
Chinese extend slave labor system: Further development
of the slave la-bor system in China is revealed in provisional
measures promulgated 18 August for the control of landlords,
which establish a legal basis for placing the majority of
landlords under state control. Landlords are compelled to
undergo "reform through labor" for at least five years before
they can have their class status altered. (S Hong Kong 536,
29 Aug 52)
Comment: The slave labor system was instituted by the
Chinese Communists a little over a year ago and is now helping
the Peiping regime alleviate labor shortages in the outlying
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25X1X
provinces. in western China were
reported as having seen "convoy after convoy" of slave
laborers being transported by truck toward Sinkiang.
16, Viet Minh morale reported markedly low: Viet Minh morale
is markedly lower than at is time as year, although regular
units are capable of launching major attacks in Tonkin, ac-
cording to a high-ranking French official in Indochina.
Field comment adds that there is "considerable doubt"
about a decline of morale in the Viet Minh zone. (S SO PD
40 Saigon opinion, 26 Aug 52)
Comment: Numerous reports of low morale were received
a year ago,-but vigorous Viet Minh offensives followed the
end of the rainy season.
17. Chinese aid to Viet Minh meeting difficulties: An
the
y transport o Chinese ommun s aid to t he Viet Minh
is being impeded by a lack of gasoline and by adverse weather
conditions in Tonkin.
25X1A
18, Chinese Communists reportedly end cooperation with Thai
dissidents: Chinese Communists in Thailand reportedly have
s,oppe cooperating with a group of men who were participants
in the abortive June 1951 coup because they fear security
leaks to the government. They will hereafter restrict their
activities exclusively to the large Chinese population in
25X1A Thailand.
Comment: This report for the first time links the
Chinese Communists directly to the activities of the June
coup participants, who observers believe are responsible for
distributing Communist-like propaganda among members of the
Thai armed forces. The propaganda called for preparation for
the day when Thailand will be "liberated" from the yoke of the
"war criminals" now dominating the government. It is perhaps
significant that the name of General Sarit, one of the most
powerful members of the ruling clique, is never included among
the "war criminals."
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Other reports indicate that the Chinese Communists,
through their puppet, the Thai Communist Party, are expanding
their activities among Thai groups.
19. General Phao denies Thai premier's authority to lift
press censorship: Police Director General ao has in ormed
The Thai Press Association that Premier Phibun has no
authority to order the police to discontinue press censorship.
(C Bangkok 365, 29-Aug 52)
Comment: Although Phibun is nominally Phao's superior,
he is fincT ng it increasingly difficult to counter Phao's
growing power and to assert his authority as premier.
Continued Thai Police-Chinese Nationalist cooperation
Indicated: missionary in nor ern THailand has informed
the American Embassy'in Bangkok that recently when a Chinese
Nationalist was accosted and produced a pass signed by General
Li Mi and the Chinese military attache in Thailand, the police
allowed him to proceed to Kengtung without exacting the usual
"squeeze" demanded of Chinese strangers not carrying proper
alien registration papers.
The Embassy comments that this incident tends to rein-
force the theory that Police Director General Phao has resumed
close liaison with the Chinese Nationalists in Kengtung. (C
Bangkok 365, 28 Aug 52)
Comment: According to an earlier report, Phao has dis-
sociated imself from Li Mi and the Nationalists because he
considered the connection to be a political liability in his
drive for the premiership.
Effects of rubber slump become more serious in southern
Thailan : The American Embassy In Bangkok reports a aw-
es~ snes and discontent in southern Thailand are growing as
a result of decreasing rubber prices, but that the government
is doing nothing to alleviate conditions.
The Embassy comments that many Thais are blaming the
United States for the rubber recession because of the Thai-US
rubber agreement and the ban on sales to the Soviet Union. It
is feared that this situation will provide a first-class issue
for exploitation by the Communists and other anti-government
groups. (C Bangkok 365, 28 Aug 52)
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22. Germ weapons use by US on Burmese tribe charged by Moscow:
An 8 August`firoiff st-from Moscow alleges that the United to es
is trying out new germ warfare weapons on a tribe in north-
western Burma.
The American Embassy in Rangoon believes that the broad-
cast was inspired by Burmese press accounts of a severe small-
pox epidemic among the Naga hill people, a primitive tribe
located near the Indian border. (S Rangoon 331, 28 Aug 52)
23,. Pro-Communist Burmese opposition party weakened:
25X1X
reports that the party has been
erious y wea ene by recent defections, especially by that
of Thakin Chit Maung, one of the three top leaders.
The American Embassy in Rangoon has also been informed
that Prime Minister Nu has made overtures to Thakin Chit
Maung, but that the latter is still undecided whether to
support the government. The Embassy comments that his support
of the Nu government would constitute a severe blow to the
future of the BWPP. (S Rangoon 335, 29 Aug 52)
Comment: The government's recent exposure of the BWPP's
conned
TT_
ons with the underground Burma Communist Party and the
quiescence of BWPP members during the current parliamentary
session support the belief that the BWPP has suffered serious
reversals of fortune in recent months.
24. Local leader estimates situation among Chinese Nationalists
in Burma: The aw wa o Kengtung, hereditary chieftain of the
territory occupied by the Chinese Nationalists in eastern Burma,
reports that lack of food and clothing has reduced Nationalist
troop morale to the point where many would surrender if given
the opportunity. He believes that a solution to the Chinese
Nationalist problem is possible "any day."
The Sawbwa doubts that a high-level Nationalist decision
to aid the Karen insurgents has been made. (S Rangoon 335,
29 Aug 52)
Comment: Although the Burmese War Office reportedly is
prepared o evacuate the Nationalists via Rangoon, there are
few other indications that the Nationalist position has de-
teriorated enough to warrant the Sawbwa's optimism concerning
an early solution of the problem.
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25, Soviet relief promised to India: The Soviet Trade Union
Council, in reply to a request from the "Indian United Commit-
tee for Aid to the Starving in Andhra Province," promised to
send 10,000 tons of wheat, plus other needed foods, according
to a Pravda report of 31 August. (R Moscow 410, 31 Aug 52)
Comment: This offer will be utilized by the Indian Com-
munis s as part of a gerrymandering effort to create a new
province of Andhra drawn on linguistic lines. This section of
India voted heavily Communist in the last elections.
Even though famine conditions throughout India are not
critical, this area suffers sufficiently from distribution
difficulties so that both Soviet and Indian Communist propa-
ganda will be able, as in 1951, to capitalize on token ship-
ments for political purposes.
26. Panikkar appointed Indian Ambassador to Egypt: The Indian
Ambassador-designate to Egypt, would carry credentials addressed
to the "King of Egypt and the Sudan." (AP Ticker New Delhi
CZ214 PED, 2 Sept 52)
Government announce on September that anikkar, Indian
Comment: This lends support to Egypt in its dispute with
Britain even though India proclaims that its action does not
prejudice the political issues involved. The selection of
Panikkar, recently Indian Ambassador to Communist China,
imputes major importance to the Indian Embassy in Cairo and is
added evidence of India's growing interest in the Near East.
While in Peiping, Panikkar's reporting was heavily biased
in favor of the Communists and often inaccurate. It may be
expected that his reports from strategically located Cairo
will be anti-Western. As a close friend and adviser of Prime
Minister Nehru, he has influenced Nehru's thinking on foreign
policy.
South African Government pressures cities to enforce
residential segregation: The Nationalist Government has warned
both apE own and o annesburg that they will be compulsorily
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zoned into racial areas if they do not voluntarily comply with
the Group Areas Act. Durban's group area plan has been ap-
proved by the city council and is to be submitted to the Land
Tenure Advisory Board. (R Pretoria Desp 1091, 21 Aug 52)
Comment: Implementation of the Group Areas Act which
provides f'or residential segregation of the whites, natives
and other non-Europeans into three distinct areas will further
intensify the tense South African racial feelings. The govern-
ment's segregation program has already led to a passive resist-
ance campaign by nonwhites which appears to be gaining momentum
and has resulted in jail sentences for some 3,000 protesters.
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WESTERN EUROPE
28. Saar talks seen nearing serious consideration of economic
problems: French oreign Minister c uman an est erman
Deputy Foreign Minister Hallstein agreed at their 29 August
talks on the Saar to have French and German economic experts
attend their next meeting. The American Embassy in Paris con-
siders this an indication that negotiations may "finally get down
to brass tacks" on economic arrangements for a Europeanized Saar.
Both statesmen now agree that a settlement of the economic
issues is of primary importance. Schuman seems willing to ac-
cept a practical alternative to the French-Saar economic union,
but his opinion apparently is based on the estimate of French
economic experts who do not believe that the Germans can present
a workable solution for economic Europeanization. (S Paris 1308,
29 Aug 52)
Comment: By basing French willingness to accept European-
ization on the premise that no alternative to the present
economic arrangement is possible, Schuman is presumably leaving
the way open for a later claim that an economic Europeanization
of the Saar is possible only within the framework of a fully
integrated Europe.
29, Only drastic anti-inflationary measures can save Pinay:
Frenc remier Pinay will a out of office by the end of November,
in the opinion of the Director of the French Price Administration.
He showed American Embassy representatives his report to the
Premier which pointed out that only the immediate application of
"the most drastic measures" can stem disastrous price rises.
While the Embassy considers this estimate too pessimistic,
it comments that Pinay's dilemma will force him to alienate
either the farmers or the retailers, with labor opposition
already in the offing. (C Paris 1306, 29 Aug 52)
Comment: Although Pinay halted inflation temporarily, he
cannot 'long postpone basic adjustments which will require de-
valuation of the franc, recovery of a favorable export position,
tax reform, and the development of modern means of production
and distribution.
30. France opposes Belgian proposal for licensing of trans-
shipments: The renc de 1:19ae has informed C OM t at France
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would find it impossible to adopt Belgium's proposal for licens-
ing transshipments. He points out that since the proposed system
would require control of all inansitatrade(inParench3ports, Aug
would cause intolerable shipping
52)
Comment: Belgium and the Netherlands have made their own
acceptance of transshipment controls contingent upon the adoption
of financial controls by other countries, primarily Britain.
pos-
However, Britain's desire to have sterling used
insnwidelyoasrpos
sible conflicts with any disposition to apply
31. Deterioration of Italy's economy in 1953 foreseen: In its ` MCI: report to the forecasting econom c con tons for fiscal
year 1953, Italy anticipates no significant progress in solving
its major economic problems. The MSA mission in Rome points
out that the gross national product is expected to fall substan-
tially below OEEC targets, that because of the prospective low
rate of economic expansion unemployment figures may exceed the
2,000,000 estimated by the government,and that the government's
estimate of a $223,000,000 balance of payments deficit exceeds
that of MSA by $50,000,000.
The MSA mission feels that the situation could be improved
by a more expansionary economic policy. It notes that the
prospective balance of payments deficit does not significantly
limit economic expansion and the defense program, and that un-
spent. appropriations make it possible to increase economic activ-
ity by accelerating investments. (S Rome Joint Weeka 35, 20 Aug
52)
Comment: The American Embassy in Rome has recommended that
Italy be granted aid for 1953 considerably in excess of what is
warranted by purely economic factors. This would better the
chances of the center parties in the forthcoming national elec-
are bethat ing given Yugoslavia
tions and help allay Italian l countries suspicions
priority over
Western European
various
Italy.
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