OUTLINE BRIEFING, FOR DIRECTOR'S USE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R001400150009-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 14, 2016
• Document Release Date: October 30, 2002
• Sequence Number: 9
• Publication Date: January 18, 1949
• Content Type: MEMO

-,1 TANDARD FORM NO. 84
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Office Memorandum ? UNITED STATES GOVE
TO : Assistant Director, ORE DATE: 18 January 1949
FROM : Global Survey Group
SUBJECT: Outline Briefing, for Directorts Use.
DOCUMENT NO.
(a) Peru (Oct. 148) - definitely Rightist, supported by strong conserva-
tive elements within and outside administration.
(b) Venezuela (Nov. t48) - military acted to protect own position - now
have growing conservative support - gave anti-communists as reason
1. Three new governments in three months by military coups.
Small Troubled Shots (Latin America) Aurnt R W
a-tJt 13 a EVJEWIn~.
for action but no moves against Communists as yet.
(o) El Salvador (Dec. '48) - Junta claims to be liberal - promises earlier
return constitutional government.
2. An older fourth, Costa Rica (May '48) - Junta professed paternal liberalism
and constitutional aims - no action yet in this direction.
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3. Success of these coups may encourage imitators. Situation possibly ripening
in
(a) Ecuador - popular discontent over economic situation - growing dis-
satisfaction of army.
(b) Bolivia - conspiring army officers backed by Rightist politicians and
exiles.
(c) Para s~za.v - government and army split by factions but new alignments
could lead to successful coup.
(d) Chiles Guatemala - recent military plots suppressed.
4. All new governments claim to be pro-US and anti-Communist.
5. In no case - actual or possible - are present US security interests seriously
affected,
B. The Big Problem: Relative US-USSR Power Position
The balance sheet (Jan. 1949) of these positions is the context for all Europeans
and Asiatic situations.
1, US probably up in Europe.
(a) ERP has laid groundwork for rebuilding European morale even if political
stability not certainly achieved.
(b) Anti-communist feeling more clearly developed -
(1) Western solidarity in UN General Assembly.
(2) Western labor rejecting Communist contacts.
(3) Defense agreements building up toward Pact.
(c) Local Communists put on defensive as enemies to national interests.
*(1) NB - recent "accommodation possible between West-East" speech of
Marcel Cachin in French Assembly.
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NO CHANGE ICI CLASS. C]
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CLASS. CHANGED TO1 TS S
NEXT REVIEW DATE, 0.-101/
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(d) Some signs Soviet difficulties
(1) Economic - Satellite production; Soviet Zone Germany.
(2) Political - reduced prestige Germany; national sentiments
Satellites; bad example Tito.
(e) Berlin air-lift, highlighting US firmness, has psychological value
in upping US influence.
2. USSR probably MR in .sia_,
(a) Chinese Commiunist success gives wider scope for action.
(1) Increased difficulty effective US counter-action.
(2) Makes position South Korea untenable in long-run.
(b) Dutch "action" Indonesia prolongs instability Asiatic colonial areas.
European prestige at rock-bottom - US easily identified in propaganda
as imperialist fellow-traveler.
(c) Pan Asian Conference has possibility becoming bloc with powerful poli-
tical potential and presently uncertain alignment.
3. Middle East balance-sheet uncertain. Continued unsettlement drains US-UK
resources and opens way for USSR exploitation - though hot many signs
present yet.
C. USSR war in negr_fu_s tire? Answer: Barring accidents, not likely.
Reasons: 1. USSR still gaining globally on political-sociological front - no
call to support by dangerous military operations.
(a) Even in Europe, though immediate balance favors US, Soviet-
Communist potential for continuing "cold war" far from exhausted.
2. Communist (Marxist) doctrine - assuming inevitable collapse capi-
talist (US) society - does not automatically encourage military adventures.
Asserts instead value of revolutionary ("cold war") method for speeding up
collapse.
3. USSR-Satellite economy not presently prepared to support full-scale
global war. USSR production - steel, transportation, agriculture, heavy con-
struction, machine tools, basic heavy machinery failed (1948) to reach 1940
levels. Chemicals, petroleum, coal, aluminum, electric power are above 1940
levels; but effective application to war potential impeded by deficiencies
in other categories.
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1. The recent revolutionary upsets in government in Latin America,
while disturbing to the tranquility of the Western Hemisphere, in reality
have very slight influence on the security of the United States. There is
no evidence of any Communist backing--the changes in government were rather
caused by more conservative elements (El Salvador expelled the Communists)
and are a result of economic conditions rather than political. There may
be more upsets in the near future as the President of Ecuador has recently
stopped an army revolt by buying off the non-commissioned Army officers
with an increase in pay. Communists may be expected to attempt to take
advantage of any disturbed conditions, even though those conditions were
caused by other groups.
Unstable conditions now existing (VI, other Latin American countries
may see possible revolts in the near future. For example, in Bolivia,
Army offieers,backed by rightist politicians in exile, are conspiring
against the government. In Paraguay the government 1^ "Asplit into various
factions but new alignments could lead to a successful coup. In Chile and
Guatemala, military plots recently have been suppressed,but here again new
measures may come up. In none of these cases, however, would present
United States security interests be seriously affected.
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1. No evidence that Chinese Communists are other than firmly attached
and identical with those of the Soviet Union,and their aims are being pursued
in cone mtraft= and agreement with the Soviet Union.
2. However, what may happen afterwards--whether deviationism will
occur cannot be foretold. The results of the Communist take-over of China
are:
a. Military. All of continental China will be available for
reconnaissance and preparation of bases and, on the outbreak of
war, even for occupation by Soviet forces. Conversely, any such
bases will be denied the United States.
b. Morale. The morale of armed Communists in other countries-
Malaya, French Indo-China, Burma and Indonesia-will be considerably
raised and the prospects for aid increased.
c. Politial. (1) The ill-educated, politically immature and
timid native populations of the East will get a great
PSYchological out of the apparently irresistible progress
of Communism. Native populations will tend to avoid overt
anti-Communist activities and, instead, will take out insurance
for the future by some form of Communist ticket.
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 CHINA - continued
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(2) There will be an increase in subversive activity in other
Asiatic countries and even some form of material aid. This last
is not so probable as the Chinese do not have any surpluses to
dispose of. These efforts should be particularly marked in French
Indo-China, Burma, Hong Kong, etc.
(3) With a Communist Government in China, Chinese foreign
diplomatic missions and consular posts may become centers for
dissemination of Communist propaganda.
d. Economic. For the initial period after the take-over by
the Communists, foreign enterprises in China would probably be
disturbed very little. However, there probably would be increasing
interference and restrictions imposed on foreign, particularly
American, businesses as time goes on.
e. Rice. Rice is the key to Asia's economy. Native Communists,
if they take over other Southeast Asian countries, can reduce the
export of rice from the surplus countries to the deficit countries to
foment unrest and a change of government in all non-Communist areas.
(e.g. The rice exports in 1948 were only 200,000 tons as compared
with an annual pre-war export of 1,300,000 tons.) It the amount of
C to ",e",
rice exports from Siam, Burma and Indo-China were substantially reduced,
h
acute embarrassment could be caused to the deficit countries--India,
Malaya, Ceylon, Indonesia, the Philippines--and also to Japan.
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INDONESIA
Although Stalin Communistt received a severe setback with the successful
repression of the Moeso Communist rebellion , the recent Dutch police action
is likely to unite all nationalistic elements and to tend to swing them toward
Communism unless not only law and order are promptly restored but the nationalistic
elements are satisfied by a peoedo political agreement.
SIAM
Communist domination of China may have a deep effect on Siam which
up to the present-has held down rather successfully Communist influence.
.The Government of Siam probably will not be able to resist new Communist
pressures emanating from China and the other states unless tangible British
and American support for anti-Communist measures are forthcom*ag.
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The French are having an extremely difficult time now in an attempt
to pacify Indo-China. Were China to become Communist and support even
moderately the Viet Nam in Indo China, the French forces conceivably might
have to withdraw to the Southern half of Indo-China and leave the Northern
half to the Viet Minh Communist Government. Such a withdrawal would mean the
abandonment of the greater part of what industry is in Indo-China and,
of course, provide the Soviets with potential bases still farther south
as well as an extreme loss of European prestige.
BURMA
Chinese Communist successes would encourage Burmese Communists even
though at present their influence is small and has been declining. The great
danger would come from the Burmese Socialist Party which is now the backbone
of the Burmese Government and since it is essentially Marxist in program
could easily amalgamate with the Communists. Any greatly unsettled conditions
in Burma would lead to an even greater drop in rice exports and thus start a
vicious circle throughout Eastern Asia.
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Although Communists are not numerically very great in the
Philippines, were the Communists to dominate China differences with the
Philippine Government and China would be aggravated and the Hukbalahaps
would become more recognizably Communist-inspired and controlled.
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USSR
1. The greatest problem still confronting the United States with
regard to its security interests is, of course, the problem with Russia.
The Western Block has gained considerable ground and prestige in Europe
by virtue of the ERP, the western solidarity in the United Nations, the
Western Labor Union rejection of Communist contacts, and the build up
toward a North Atlantic Pact as well as the Berlin airlift--&!! +ich
40
hgasadeead4Aa--
All of the above represents gains for United States security in the
present cold war with Russia.
2. In addition there are evidences that the Soviets are having
economic difficulties with the Satellite production as well as with the
carrying out of their own economic plans. Soviet steel production is still
below what it was in 1940,and,although a figure of 25 million tons has
been set for 1950, present indications are that this figure will not be
met. Soviet petroleum production at this time is barely equal to what
might be needed in case of war, but more than 90% of such production comes
from the oil fields in the Caucasus and Rumania, both of which fields are
open to attack in case active military operations should come. Since the
petroleum production is barely sufficient for Soviet military operations,
an ~o either of these fields would be felt immediately.
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3. In Asia it is estimated that the Soviets have acquired advantages
over the United States because of the Chinese Communist successes and the
Dutch action in Indonesia. Further, the Pan Asian conference called by
NEHRU has the possibility of becoming a block with a powerful political
potential. It must be pointed out, however, that so far this is only a
potential and has not yet developed.
4. In the Middle East, the present signs point to an end of the
unsettlement which has been a drain on United States and United Kingdom
resources and influence. If stability can be arrived at in the present
peace talks between the Israeli and the Arabs, it should be favorable to
the United States Z,-,
5. As for the question of whether there will be a war with the USSR
in the near future, the answer is that, barring accidents, it is not
likely. The following reasons will support that statement:
a. The USSR is still not being dofeated globally on the political-
sociological front, and, therefore, there is no-reason to resort to
dangerous military operations.
b. The Communist doctrine assumes that a collapse of capitalistic
society is inevitable--that such a capitalistic society carries within
itself the seeds of its own decay.
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c. The USSR-Satellite economy is not presently prepared to
support full-scale global war. The USSR-Satellite production of
steel, transportation, agriculture, heavy industry, machine tools
is still below 1940 levels. Chemicals, coal, aluminum and electric
power are barely above,1940 levels, but in no case have sufficiently
high levels been reached to support extensive military operations.
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