WEEKLY SUMMARY #88

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002300260001-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 27, 2016
• Document Release Date: May 21, 2013
• Sequence Number: 1
• Publication Date: February 3, 1950
• Content Type: REPORT

Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
1...Ut I :, DR) ?
WEEKLY
8
SUMMARY
Number :ft ft
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
1. This publication contains current intelligence exclusively
and therefore has not been coordinated with the intelli-
gence organizations of the departments of State, Army,
Navy, and Air Force.
2. This copy may be either retained, or destroyed by burning
in accordance with applicable security regulations, or
returned to the Central Intelligence Agency.
WARNING
This document contains information affecting the na-
tional defense of the United States within the meaning
of the Espionage Act, 50 U.S.C.. 31 and 32, as amended.
Its transmission or the revelation of its contents in any
manner to an unauthorized person is prohibited by law.
Declassified and Approved For Release 2013/05/21 :.CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
fl
I Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
CONTENTS
Page
HIGHLIGHTS..... 0.a . . . . ....... . . 1
WESTERN EUROPE 2
EASTERN EUROPE 6
FAR EAST... O.. ....... a ? ? ? 8
WESTERN HEMISPHERE ...........n
ARTICLES
The Saar Problem 14
Inadequate French Economic Progress . . . . . . . a 16
Possible Czech-China Air Cooperation . . . . . . . . 18
SECRET
11
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
a
SECRET
HIGHLIGHTS
During the past week, the USSR continued to press
forward against the Western position at every opportunity.
In the UN, the Soviet walkout left that organization virtually
hamstrung (see page 6); the on-and-off "blockade" of Berlin
by Soviet soldiers kept the West wondering what would happen
next; and the Mao-Stalin talks in Moscow went an in deepest
secrecy -(see page 9).
Meanwhile, the West remained preoccupied with major
problems connected with the economic and political rehabilita-
tion of Western Europe. Old German and French rivalries
promised to complicate final settlement of the Saar issue (see
page 14); British reluctance to take the steps necessary to
assure Western European economic integration again made it
impossible for the Organization for European Economic Co-
operation to formulate a program for aggressive and con-
structive action (see page 5).
In the Far East, an invasion of Tibet by Chinese Com-
munists appears imminent (see page 10); and extension of
Soviet recognition to Indonesia and the Ho Chi Minh regime in
Indochina further complicates the problems confronting Western
leaders in halting the advance of Communism throughout South-
east Asia (see page 11).
- 1 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
WESTERN EUROPE
MDAP Shipments Communist efforts to mobilize Western
European labor to resist the delivery
of MDAP arms will probably increase in the next few weeks
but will have only limited success. These efforts will be
directed primarily toward the port and railway workers in
Cherbourg, the principal port for MDAP deliveries, and may
be supported by scattered work stoppages in Belgian, Dutch,
and Italian ports. In France, where the maritime workers
may receive financial help from the World Federation of
Trade Unions, the success of the Communist campaign will
be limited by : (1) the need for work among the Cherbourg
dockers; (2) the lack of decisive Communist influence among
the laborers on the main railway line serving the port; and
(3) the readiness of French military authorities to suppress
any Communist-led disruptions. In Antwerp, Socialist dock
chiefs are confident that the first MDAP cargoes will be
unloaded after initial disturbances and work stoppages not
exceeding 24-48 hours. In Italy, Communist orders for
port strikes on arrival of the MDAP shipments may be
effective in some northern ports but will not be generally
supported in southern Italian ports. Despite the reported
allocation to the WFTU of a $250,000 "solidarity" fund
for use in the event of a prolonged strike, a major Com-
munist financial effort is unlikely unless the local "action
committees" obtain wider support among the rank-and-file
workers,
GERMANY
Unemployment Critical Unemployment in Western Germany
has become a major problem which,
if not checked during 1950, will probably threaten the economic
progress made thus far by the Federal Republic. Although during
the past three months the number of unemployed rose by half
- 2 -
SECRET
fl
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
GERMANY
a million to total more than 14 percent of the working
force, the number of employed has remained relatively
constant at 13,555,000. Industrial production has virtually
attained prewar (1936) levels, but the total population of
West Germany has increased by at least 9 million, primarily
as a result of the influx of expellees and refugees from
Eastern Europe. Thus,-induStrial production per capita in the
Federal Republic is actually no more than 80 percent of that
in 1936. Augmented by new refugees from the east, as well
as by new working age groups, the labor force will probably
continue to increase. With present levels of individual pro-
ductivity, therefore, the number of jobs available must be ex-
panded by about 35 percent if the labor force is to be fully
occupied by the end of 1950.
The Federal Government expects unemployment to
reach more than 2 million during February 1950, but has
thus far not developed a large-scale program for increasing
employment. Although the Federal Government is planning
the construction of 250,000 housing units, which would create
about 200,000 new jobs, it is doubtful whether this plan, to-
gether with other limited measures now contemplated by
the Federal Government, will have any appreciable effect in
reducing unemployment.
ITALY
Communist Plans Although the Communists will probably
be unable to interfere seriously with
MDAP deliveries, their general campaign to cripple Italy's
military rehabilitation may have local success. The announced
Communist intention to prevent or impede the unloading of US
3
SECRET -
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
n -
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
a
a
a
a
a
a
a
a
SECRET
ITALY
arms and the transformation of industries from peace to ?
war productibn indicates that the Communist plan of action
will stress disruption of port and railroad traffic and the
output of heavy industries. The -Communists do not effec-
tively control the port workers in south Italian ports, but
they may be able to interfere seriously with the unloading
of MDAP shipments to northern ports. The Communist-
controlled port workers in Genoa, La Spezia, Savona, and
Ancona have already pledged themselves not to handle such
cargoes, and strike orders have probably already been
issued in all other ports. Among the workers of the north
Italian heavy industries, who have valid economic grievances,
the Communist efforts to impede production of military sup-
plies and equipment are likely to achieve a substantial degree
of success. Widespread "sympathy" strikes and sabotage
may take place under the direction of Communist-dominated
"committees for defense of peace," which have already
pledged that they will not produce any war materiel.
SCANDINAVIA
Scandinavian Defense Despite the breakdown of Scandinavian
Joint-defense negotiations early in
1949, some military cooperation still exists and will probably
continue. Sweden's top military men, who believe less strongly
than their government in the wisdom of neutrality, will go to
great lengths to obtain military advice and materiel for Sweden's
forces. Instances of such cooperation during the past year in-
clude: (1) flights of aircraft to and from Sweden, with radar
exercises utilizing Norwegian equipment; (2) visits by Swedish
naval units to Danish and Norwegian ports with warships of the
- 4
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
fl
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
In
SECRET
SCANDINAVIA
respective countries present; (3) joint Swedish and Nor-
wegian command exercises in northern terrain where the
borders of those countries join;-and (4) high-level exchange
of intelligence information between the- countries. Norway
and Denmark will safeguard information and materiel re-
ceive from participation in the Atlantic Pact, but some
leakage of intelligence will probably occur as a result of
cooperation with Sweden.
GENERAL
OEEC Prospects Due largely to British opposition, US
hopes for marked progress this year
toward European economic intpgration have suffered a?
sharp blow. At the recent Paris session, the Organization
for European Economic Cooperation (OEEC) Council:
(1) failed to select Paul Henri Spaak, the most outstanding
candidate, as high-level "political conciliator" and instead
named Dutch Foreign Minister Snicker; (2) agreed to aim
at only a further 10 percent reduction of intra-European
import quotas by mid-1950, far less than is felt necessary?
for European rehabilitation; (3) postponed action on general
elimination of dual pricing practices; and (4) failed to pro-
gress with plans for a new European Payments Union. Largely
responsible for OEEC inability to act decisively was British
hesitation either to approve any further trade liberalization
or new payments system which might interfere with the UK's
own recovery planning or to risk further loss of precariously
depleted monetary reserves. Britain's blocking of OEEC
action re-emphasizes one of the most critical problems facing
the US in its drive for European integration: how to overcome
British reluctance to take the action necessary to achieve
substantial progress toward economic integration by 1952,
- 5 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
fl
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
EASTERN EUROPE
Soviet Walkout One major purpose of the Soviet UN
walkout was probably to contribute
to the Soviet effort to isolate China from Western in- -
fluce by making it as difficult As possible for the US to
reverse its China policy. The dramatic Soviet boycott
of the UN, along with abuses of US officials and property
in China, makes US recognition, of the Peiping regime
increasingly difficult in the face of opposition in the US - ?
Congress and press. The ? USSR is, therefore, -encouraging
a situation: in which US recognition of the Chinese Com- ?
mUnist regime could be widely construed and propagandized
as an outright surrender to Soviet pressure; The walkout,
although ostensibly designed to force ?the early unseating
of Nationalist delegates, may actually have delayed the
shift to Communist Chinese representation in the UN.
Although Chinese and Soviet recognition of Ho Chi
Minh (Communist leader in Indochina) is primarily aimed
at fostering revolutionary activityin Southeast Asia., this
action may also be parts?-of the Soviet effort to minimize
contacts between China and the West. Such Soviet moves
which effectively postpone the establishment of US and
French relations with China correspond to the general ?
Soviet policy of discouraging Western contacts with the.
Soviet Satellites in. Europe.
POLAND
Air Policy The US-UK policy of preventing the USSR
and the Satellites from obtaining airplanes
'or spare parts is again being circumvented. During 1949,
licenses for the export to France of over $800,000 worth
of aircraft parts were granted to Air Union, a firm located
-6 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
II
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
a
a
a
a
SECRET
POLAND
in Bethesda, Maryland, In a recent transaction, Air Union
shipped some parts to Polish firms,located in Paris and
incorporated as French-companies, -The orders for spare
parts originated with the Paris representative of the Polish-
airline -LOT, and delivery was made from the US to Le Havre
and transshipment aboard Polish vessels from Le Havre
via Antwerp to Poland,
- '7 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
11
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
FAR EAST
US-UK Difficulties A recent statement by a UK Foreign
Office representative to the effect
that the UK considers itself unable to interfere with the
movements of Chinese-flag merchant ships on which the
US holds defaulted mortgages indicates that the UK will
probably, take no executive action which might assist the
US in repossessing the vessels and that redress for the
US in British courts is unlikely. Moreover, the UK atti-
tude may influence the disposition of 82 transport aircraft
now grounded at Hong Kong pending establishment of owner-
ship. The total number of merchant vessels involved
represents a tonnage of approximately 250,000 deadweight
tons. Some of the merchant vessels are in Japan, under
control of the US military authorities, but the remaining
vessels, if released for Communist use, would more than
double the large-vessel tonnage of the present Communist
merchant fleet and represent a proportionately greater
increase in the Communist strategic potential. Possession
of the fleet of transport aircraft now at Hong Kong would
provide the Chinese Communists with enough aircraft to
institute air transport operations within China and outside
its borders on a considerable scale in the very near future.
The UK attitude is probably due to the fear that the British
court action requested by the US would cause the Chinese
Communists to retaliate against the UK's valuable but
highly vulnerable possessions in China. This UK reluctance
to cooperate with the US probably also reflects the basic
decision by the UK that British over-all interests would be
best served by recognizing the Chinese Communists and as
far as possible establishing normal relations with them.
More important, the British attitude will probably influence
other Commonwealth nations and even other countries where
- 8 -
SECRET
11
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
a
SECRET
the Chinese vessels may call. The UK stand, further-
more, may be an ominous indication that the aircraft
grounded at Hong Kong will be turned over to the
Chinese Communists.
CHINA
Mao-Stalin Talks Although no reliable information on
the progress of the Moscow talks
between Mao and Stalin is available, the pattern of Sino-
Soviet relations suggests that a new treaty which will
probably strengthen the position of Stalinists in the Chinese
Communist Party will be signed in the near future.
Neither Soviet nor Chinese Communist leaders
would attempt to force a transparently "unequal" treaty
on the Chinese people, who are openly suspicious of Sino- ?
Soviet "friendship." Any protocols damaging to Mao's?
position, such as the joint use and development of Chinese
military facilities, will be secret, and the published pro-
visions of the treaty will be innocuous. The treaty, or a
separate agreement, probably will provide for Soviet credits
sufficiently extensive to be impressive paper evidence of
Soviet aid to China. The number and quantity of commodities
to be exchanged between the two nations under the new trade
agreement will be increased, and the agreement will appear,
superficially, to be mutually beneficial.
Although special political arrangements with Manchuria
and Sinkiang and provisions for "joint development" of those
areas will bring the border regions further under Soviet domina-
fion, the treaty will camouflage the process by which Soviet
influence in China may become Soviet control.
-9
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
CHINA
Tibet Invasion Statements by Chu Teh and other high
Chinese Communist military leaders
indicating that the Tibetan operation will be given high
priority, coupled with the current propaganda campaign
against Tibet, point to an imminent invasion attempt: The
Chinese Communists have already achieved some degree
of penetration into Tibetan groups and institutions by in-
filtration of Inner Tibetan lamaseries and by the exploitation
of political differences within Tibet. In addition, the Com-
munists have established a provisional Tibet government
?in Tsinghai, Meanwhile, Commimist propaganda emphasizing
the fear that an "imperialist conspiracy" is plotting to seize
Outer Tibet is probably part of preparations for justifying
an invasion for "protective"purposes.
INDONESIA
Guerrilla Troubles High Dutch officials in Indonesia prob-
ably will be able to obtain the reluctant
cooperation of Dutch military leaders with the efforts of Indo-
nesia to eliminate the guerrilla activities of former Captain
Westerling of the Netherlands Indonesian Army (KNIL)? The
Netherlands Government is thoroughly supported by Dutch
public opinion in its desire to assist the Indonesians in elimi-
nating Westerling and his followers, many of whom are Indonesian
desert9rs from the 1CNIL. The Dutch forces will probably not
be called upon to act directly against the Westerling group, but
they may be asked to assume more extensive guard duties and
other non-combat functions, in order to release more of the
Indonesian Army for measures against Westerling and other
guerrilla groups. If the Dutch take stern measures against
- 10 -
SECRET
11
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
INDONESIA
? KNIL deserters and if the Indonesian Army program to?
incorporate volunteers from the ICNIL is successful, Wester-
ling's attraction for KNIL troops will probably be counteracted.
? SOUTHEAST ASIA
Soviet Pressure The extension of Soviet recognition to the
United States of Indonesia and to Ho Chi
Minh (Communist leader opposing the Bao Dai Government
in Indochina) may presage greatly increased Soviet pressure
against the Western position in Southeast Asia. In Indochina,
support from the USSR and the Chinese Communists will
probably strengthen resistance to, Bao Dai and may turn the
balance in favor of Ho. Moreover, the extension of Soviet
recognition to Ho will: (1) counteract the expected political
impact of Western recognition of Bao Dai; and (2)probably
increase the reluctance of neighboring countries to follow
the Western lead in recognizing Bao Dai, In Indonesia, where
political leaders are attempting to maintain a neutral position
between the US and the USSR, Soviet recognition will arouse
little suspicion that the USSR may eventually use its mission
to work with subversive groups. iNear the Chinese border in
the Burmese hill state of Kengtung, Chinese `?Communist"
freebooters are creating enough trouble to arouse some
apprehension in Rangoon.
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
WESTERN HEMISPHERE
PANAMA
Political Instability The continuitirstruggle for power be'--
tween President ATP4U9 Arias, and,
Polide Chief_Ftemon threatens to create a new political c,risis
in Panama. To date President Arias has not been sufficiently
strong to oust top police officials, who have threatened to?
force him out of office and install a governing junta. Aria?
weakness has resulted in an increasing amount of plotting
both by his political opponents and by his former supporters.
An attempt to oust the President is now possible, and since
Arias has armed his supporters, the ensuing struggle could
be more bloody than the coup of November 1949 which
brought Arias to power.
CHILE
New Strikes The current outbreak of strikes in Chile,
ostensibly a protest by certain segments of
labor to the administration's proposed economic program,
is not likely immediately to imperil the stability of the gov-
.ernment but will add to the serious problems facing the
Gdnzalez Videla regime. The government's policy of inter-
vention in the initial stages of labor difficulties has been
a fairly effective measure to date, but the basic problem of
continued deterioration of the economicS situation remains
unsolved. Moreover, disagreement among members of the
government coalition will probably hinder the institution of
necessary basic economic reforms, and the current strikes
may thus foreshadow more serious difficulties such as
general labor and political disturbances'.
- 12 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
BRAZIL
Manganese Exports US imports of manganese ore from
Brazil are unlikely to increase ?
.substantially for the next several years because of legal
.obstacles raised by the Brazilian Government to US parti-
cipation in mining operations and because of technical and
transportation difficulties. The Brazilian Government
. has denied the US Steel Corporation permission to mine
the Urucum deposits (largest in the Western Hemisphere)
on legal grounds. Although the legal problems may be
ironed out during the next year., at least two more years
. will be required before substantial imports can be realized
from this source. Despite expected early establishment
.of a joint US-Brazilian company to operate the Amapa con-.
:cession, technical problems in this second area will proba-
bly keep production below 100,000 tons annually until 1953.
Imports from the Minas Gerais area fell far below the
figure estimated as possible by US officials due to in-
..efficiency of the Central Railroad, Although. the Brazilian
? authorities have promised to improve the railroad service,
? there is little? evidence to indicate that shipments will
.increase during 1950.
- 13 -
? SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
THE SAAR PROBLEM
In the forthcoming negotiations with the Saar authorities,
the French are likely to arrive at an agreement which will
make it politically possible for Chancellor Adenauer to lead
the German Federal Republic into the Council of Europe.
This agreement will be of an interim nature and will re-
present some modification of the original French intention
to conclude long-term leases on the Saar coal mines. Such
a solution to the current Saar controversy, however, is not
likely to simplify the task of determining the final status of
the Saar when the German peace treaty is written. The
basic interests of France and Germany are clearly in con-
flict, and there is some dagger that in future negotiations
over this territory, the Germans may be less amenable to
compromise than at present.
French officials appear intent on proceeding unilaterally
with their plans for negotiating agreements with the Saar
Government covering leases of the coal mines, the integration
of the railroads, and the establishment of French economic
rights in the Saar. The French Foreign Office justifies
France's right to continue with these tasks on the grounds
that they were requested by the Saar leaders and that an
accord with the Saar would parallel agreements by which
the Western Powers granted greater autonomy to West
Germany.
The West German Federal Government, in strongly
opposing the negotiations, contends that: (1) ownership of
the mines rests with the German Federal Republic; and
(2) any interim agreement would prejudice the ultimate
disposition of the Saar in the peace treaty. French Foreign
Minister Schuman has stressed, however, that any conventions
- 14 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
concluded at this time will be of an interim nature, to
be superseded by the decisions laid down in the peace
treaty; he has also said he will endeavor to work out
a formula for the mine leases which will meet some of
the objections raised by the Germans.
- 15 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
11
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
INADEQUATE FRENCH ECONOMIC PROGRESS
French economic progress in 1949 fell-far short of
the necessary French contribution to Western European
rehabilitation, and any remedial actions which the US might
propose to the French would not receive effective support
in France in 1950.
During 1949, the French did expand industrial pro-
duction, improve financial stability, and reduce the deficit
in the non-dollar foreign payments account. A far greater
effort,, however, will be necessary in order to hold theee gains
and to increase agricultural output, private investment,
and housing construction., and to improve the dollar account.
Moreover, a revolution in.the' thinking of those influential,
in government and private enterprise must take place before
.more lasting results can be obtained.
.The expansion of production in 1949 was largely due
to factors which were probably temporary, including large-
scale US aid, a seller's market, broad protection against
foreign competition, steady wages, and the relative stability
of the Queuille Government. Production was not aided by any
important departures from restrictive customs or prejudices;
or by any great imaginative efforts on the part of government,
business, or labor. AR economic groups were obsessed with
their own security, and there was little enthusiasm for sacri-
f ice and cooperation to achieve long-term goals. The French
were vulnerable to the charge of taking advantage of ECA
aid to postpone essential, basic decisions.
In view of the stubborn psychological blocks among
various French groups and the outlook for prolonged govern-
mental weakness, there is little likelihood that any of the
- 16
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
fl
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
policies recommended by the ECA mission in France,
even if adopted by the French, would achieve important
results in 1950. Any efforts the French might make
would be seriously hampered by the imminent increase
in the general wage level, the growing and widespread
fears of foreign competition, the government's sacrifice
of agriculture to industrial investment needs, the in-
adequacy of private investment, and the anticipated long-
term labor unrest.
-.17 -
SECRET
1.
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
POSSIBLE CZECH-CHINA AIR COOPERATION
The European Satellites and Communist China may soon
succeed in establishing air connections entirely through non-
Communist territory, and thus facilitate the political and
economic exploitation of the Near East and Southeast Asia
by Communist agents.
The Chinese Communists not only have the aircraft and
equipment to expand air operations beyond their own borders
but also have a number of US-trained airline personnel ex-
perienced in international operations. While an extensive
Chinese air network outside China is not anticipated, certain
scheduled or non-scheduled operations might well be initiated
for commercial, political, and prestige reasons. Routes
which would be flown by Chinese Communist air carriers
would not pass over countries cooperating with the US, and
there is little possibility that such traffic could be prevented.
China, furthermore, is a member of the International Civil
Aviation Organization (ICAO), and the new Communist Govern-
ment may be expected, like that of Czechoslovakia, to take
full advantage of the air rights it automatically enjoys through
its membership. Article 5 of the Chicago Convention provides
the right for non-scheduled flights between ICAO member
states.
Meanwhile, Czechoslovakia is making determined and persis-
tent efforts to reach the Near East and Southeast Asia, and the
frustration of this ambition thus far has been accomplished by
the US and UK only through: (1) denial to Czechoslovakia of
Western-manufactured long-range aircraft; and (2) vigorous
and continued high-level representations to many countries
en route. Israel, however, occupies a key geographic position
in that four-engine aircraft, can reach Karachi from Europe
18 -
z
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
11
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
with a single refueling stop at Lydda, and is the only
eastern Mediterranean state which has not been asked
to cooperate with the US-UK Satellite aviation contain-
ment policy.
The attitude of India and Pakistan may be a determining
factor in the accomplithmelit of Chinese and Czechoslovak
objectives with respect to air expansion. India, which per-
mitted the Chinese Nationalist Government airline CNAC
to operate to Calcutta for many years, extended this right
last October to include transit across India to Pakistan
for scheduled servites terminating at Karachi. The Chinese
Communist Government, which claims title to CNAC and
whith holds a number of CNAC air transports that defected
to Peiping, will probably maintain that as the internationally
recognized Government of China, it already possesses trans-
Indian operating rights originally secured by the Nationalists.
The Chinese Communists may also claim the right to re-
store the air services formerly provided by CNAC through
Burma en route to India.
India is determined not to take sides in the East-West
conflict but may be willing to permit transit for Czechoslovak
aircraft. Pakistan, so far as is known, has not rejected
Czechoslovak overtures for entry of an air caravan to promote
Czechoslovak exports, and, in conformance with its ICAO
obligations, may feel obliged to grant permission. If the
Czechoslovaks succeed in bridging the Middle East with four-
engine aircraft, arrangements will be made with Chinese Com-
munist airlines for the onward carriage to South Asia of Czecho-
slovak propaganda agents and labor organizers, as well as for
Czechoslovak manufactured goods including ammunition and
weapons.
- 19 =
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
11
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
If the Czechoslovaks are unable to obtain long-range
aircraft and necessary landing rights, they will attempt,
as a stopgap measure, to employ aircraft chartered from
some European carrier already in possession of these?
rights. Such operations on a charter basis would be far
less effective and would not diminish the determination of
Czechoslovakia to establish air connections with the Far
?East on a more permanent and secure basis.
- 20 -
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
SECRET
DISTRIBUTION
1. The President
2,64; . a a . . Secreta.ry of State
3,4, aa.aa.a Secretary of Defense
Secretary of the Army
6 Secretary of the Navy
7. . a Secretary of the Air Force
8,70. . . . Chairman, National Security Resources Board
9,71. . . . Executive Secretary, National Security Council
Assistant Secretary of the Navy for Air
11,69a . , . Chief of Staff, US Army
12,13,14. . . Chief of Naval Operations
15,16,17 Chief of Staff, US Air Force
Director of Plans and Operations,Gen,Staff,US Army
Deputy Chief of Staff (Operations), US Air Force
Deputy Chief of Naval Operations (Operations)
Director of Plans aria Operations, US Air Force
22,23,24. , . a Special Assistant, Intelligence, Department of State
25,26,27,28,29,
30,31,32,33,34. Director of Intelligence, General Staff, US Army
35,36,37,38,39,
40,41,42,43,44. Director of Naval Intelligence
45,46,47,48,49,72,
73,74,75. Director of Intelligence, Headquarters, USAF
50. . a ? ? Director of Intelligence, Atomic Energy Commission
51. . Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
52,53,54,55,56. Chief, Acquisition & Distribution Div.,0CD, State
Director, Federal Bureau of Investigation
Secretary, Joint Chiefs of Staff
Chief, Policy Planning Staff, Department of State
Secretary of State (Attention: Policy Reports Staff)
Deputy Director for Intelligence, The Joint Staff
62,63 Secretary, Joint Intelligence Group, Joint Staff
65 US Air Force Representative of joint Strategic
Survey Committee
68. ..... a . Administrator, Economic Cooperation Administration
SECRET
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
a
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Document
0
Keei'DDCLASS1.-.
Class. .
r 1, 1 .7 vi
Auth: .
Dates 3,1__AC..11,?,
C
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7
U. S. GOVERNMENT PRINTING OFFICE
26,31-S-1948
Declassified and Approved For Release 2013/05/21 : CIA-RDP78-01617A002300260001-7