WEEKLY SUMMARY NUMBER 54

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002200070001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 23, 2016
• Document Release Date: July 18, 2013
• Sequence Number: 1
• Publication Date: June 10, 1949
• Content Type: REPORT

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Copy No. 69
:etetr?
I WEEKLY SUMMARY
Number 5 4
0 JUN 1949
Document No. , CIO/ r
NO MUNOZ in Cleo.. 0
EgoZECLASSIFTED
Class. CiANCED TO: TS
DA M-mv, 4 Apr 77?
Autht DAA LG. 77/1763
Mite: 4)ir?Olt? 70 By: 613
CENTRAL INTELLIGENCE AGENCY
afteir,
asicEava Rigcour
MAW RETURN TO
AGENCY ARCHIVES J 50X1
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lirer
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.
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CONTENTS
HIGHLIGHTS
WESTERN EUROPE 2
EASTERN EUROPE
NEAR EAST - AFRICA 9
FAR .EAST 10
WESTERN HEMISPHERE 13
ARTICLES
Dangerous Deterioration in Kashmir 14
French Military Plans in Indochina 15
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HIGHLIGHTS
The Commcil di Foreign Ministers las now been in
session in Paris for three weeks. Although Soviet Delegate
Vishinsky may at any time break the deadlock with a dra-
matic proposal intended to impress the world and the west-
ern powers with the forthright motives of the USSR, the
best indications at present are that the Kremlin finds the
price of the western nations too high and &es not want a
general German settlement on current terms (see page 13).
Meanwhile, the growing concern evidenced by Western
Europeans over the possibility that the US Congress will
not approve the Military Aid Program at the present session
re-emphasises the dependence of Western Europe's psycho-
logical balance upon US support (see page 2).
The plan of the French military leaders to shift men
and materiel from Germany and North Africa, in preparation
far an autumn military campaign in Indochina, directly affects
US security interests in both Western urope and the Far.
East (seepage 15). Besides reducing the defense potential
of the western powers the French build-up in Indochina. (to
be accomplished in pail with US arms) will constitute a drain
cc the French economy and will provide Communist propa-
gandists in the, Far East with material for charges that the
US is backing "colonialism" in Asia.
Major fighting in the Chinese civil war las been
suspended while Communist forces regroup and Nationalist
units continue to withdraw southward (see page 10). Elsewhere
In Asia, the India-Pakistan dispute over Kashmir continues to
deteriorate dangerously, as is underlined by the recent request
of Admiral Niraibs that his mission as UN Plebiscite Adminis-
trator be dissolved (see page 14).
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WESTERN EUROPE
US Military Aid The growing concern of Western Europeans
over the possibility that the US Military
Aid Program will not be approved by the US Congress at this
session once again emphasizes that the delicate psychological
balance in Western Europe remains dependent on US support.
Despite the substantial economic recovery being achieved, the
development of Western Europe as a strong non-Communist
bloc still depends to a large degree on such psychological
factors as general confidence in joint ability to resist Soviet
aggression. Failure of Congress to approve MAP vioad be Widely
Interpreted as an indication of US reluctance to assume its com-
mitments to prevent Soviet domination of Western Europe. The
resulting decrease in the general sense of security would dis-
hearten Western Europeans and weaken their determination to
resist the USSR and local Communist parties. The delay of
several countries in ratifying the Atlantic Pact Probably re-
flects in part the uneasiness already produced by fear that MAP
would not be approved and, consequently, that the Pact would
Indicate an ultimate intention of the US to liberate rather than
defend Western Europe. Beyond these important effects on
Western European morale, failure of Congress to pass MAP
would probably make many Western European nations reluctant
to increase their armament programs on the grounds that such
Increases would be valueless unless accompanied by US assist-
ance. The development of Western Union as an effective defen-
sive force would thus be materially delayed.
FRANCE
French Recovery France's economic recovery, although
reasonably assured, will probably not con-
tinue at its previously speedy pace. Investors may be deterred
at least temporarily by the difficulties France is now encountering
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FRANCE
In achieving a balanced governmental budget, continued
dollar shortages, and increasing demands for higher wages
from the labor unions. That the present favorable trend
will probably continue, for a short time at least, is indicated
by such favorable economic developments as; (1) declining
prices In some export goods; (2) a decreasing volume of cur-
rency in circulation following the first quarter of 1949; and
(3) steadily increasing industrial production beyond the peak
levels established in 1929?
Labor Front Communist efforts to create a united labor
front in France are not likely to affect seriously
French economic and political stability. The Communist-con-
trolled General Confederation of Labor (CGT) and other labor
groups have pined some new adherents recently, largely be-
cause of labor's dissatisfaction with the disparity between
prices and wages. There has been no major Shift in French
labor forces, however, and national directorates of some =-
Communist unions have passed resolutions against participa-
tion in a common front with the CGT. Although the Communists
will undoubtedly attempt to transform any evidence of coopera-
tion among the workers within plants into strike movements,
and dissatisfied labor will continue to press for a favorable
adjustment of prices or wages, improving political and economic
conditions in France will tend to nullify these disruptive tactics
against French industry.
ITALY
Labor Confederation The formation of a third Italian labor
group, the anti-Communist and independ-
ent Federation of Italian Labor (FIL), has sprung from the desire
of Italian workers for a non-partisan confederation, thus marking
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ITALY
a continuation of the trend away from the Communist-dominated
? Italian General Confederation of Labor (CGIL). Although the
COIL still retains superior strength over the other two labor
groups, the fundamentally anti-clerical FIL eventually will have
considerable drawing power for other non-Communist workers
who have been unwilling to join the pro-Catholic labor group,
the Free labor Confederation. Those moderate leftist elements
which had refused to break with the CGIL chiefly because they
wished to preserve union unity may now also align with the FIL.
Moreover, if the new labor group and the Free Labor Confedera-
tion can successfully collaborate (some Free Labor leaders have
expressed an interest in joining forces with an anti-Communist
union),then these two groups could become the nucleus for a bloc
numerically superior to the CGIL. Such superiority could be
attained through broad trade union collaboration because such a
non-Communist bloc would probably attract a large number of
Independent trade unions and unorganized workers.
GENERAL
Maritime Communists Present Communist ability to control
a substantial portion of the world's
strategic maritime unions has been demonstrated by the swift
extension to foreign ports of the strike of Communist-domin ated
Canadian Seaman Ys Union (CSU). Meanwhile, the WFTU is attempt-
ing to assimilate leftwing US and Australian longshoremen and,
If successful, would eventually be in a position to call international
maritime strikes supporting strike actions by any affiliated
national maritime unions. Since the CSU strike began, sympathy
strikes have been called in eleven ports in support of this action:
six in UK and dominion ports and minor demonstrations in other
areas. Although most of the demonstrations appear to have
been organized in response to on-the-spot appeals by striking
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CSU crews, the unprecedentedly strong support of 9,000
British dock-workers reflects prior secret coordination
between CSU leaders and Communists in the British
Dockers Union.
Simultaneously, Communist maritime organisers in
North Atlantic countries, in Australia, and within the WFTU
are attempting to strengthen Communist influence In their
own areas. The Norwegian Seamen's Union reports the trans-
ference of key Communist agents from other industries to
the merchant marine. In Iceland, Communist-dominated
stevedores and merchant shipmen have called widespread
strikes. Concurrently, the WFTU is seeking to establish a
maritime workers "department" in which it will attempt to
unite US, Australian, and other key maritime unions. The
success of such efforts to organise world-wide maritime
strikes will be determined largely by the ability of US, UK, ?
Canadian, and Australian labor organizations to keep their
leftwing maritime unions in line.
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EASTERN EUROPE
CFM Meeting Three weeks have now passed since the
reconvening of the Council of Foreign
Ministers and as yet there has been no softening of the
Initial Soviet position and no revelation of Soviet purposes
In requesting another CFM meeting. Although Soviet Dele-
gate Vishinsky may at any time, in accord with sound
? Marxian bargaining tactics, make a dramatic offer of a
formula to end the deadlock, the indications at present are
that the USSR finds the price set by the western powers
too high. A limited agreement permitting some degree of
east-west trade through Berlin still remains within the
realm of possibility, but a four-power settlement for Berlin
or Germany now appears extremely remote.
BULGARIA
Dimitrov Deified Recent efforts of the Bulgarian press
and radio to depict absent Premier
Georg' DimitroV as a beloved and almost legendary leader
suggest that his active participation in Bulgarian Party
affairs has ended. In the meantime, the Government's
success In the May elections was treated as a kind of gift-
offering to Dhnitrov for his "heroic efforts" in the cam-
paign, and his congratulatory letters called "valuable guide's"
for Bulgarian political leaders. The most recent measure
to enshrine Dimitrov's name is the establishment of "Dimitrov
Awards," to be presented for outstanding contributions to
Bulgarian Communist art, science, and industrial methods.
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GREECE
Army Campaign After its first month, the record for
Operation Rocket, the Greek Army's
current guerrilla-clearing campaign in central Greece,
seems to indicate that guerrilla evasive tactics may
effectively delay nuccessftil execution of the plan. The
Greek Army has thus far inflicted 1,600 guerrilla casualties.
The guerrillas, however, have apparently succeeded in
causing the action to spread from the limited area originally
designated for Rocket to points as far north as Mount Olympus
and as far east as the coastal mountains of Ossa and Pelion.
Moreover, despite their losses, the guerrillas--by one method
or another-- have been able to maintain their total active
strength in central Greece at almost the pre-Rocket level,
while their distribution of forces las remained about the same
despite constant movement Commander-in-Chief Papagos has
Indicated concern over the situation by directing the redeploy-
ment of troops so that the original plan -- either to annihilate
the guerrillas or drive them northward out of the Rocket area--
may be carried out.
Appeasement Fears Greek leaders are increasingly appre-
hensive that current Soviet and guerrilla
peace propaganda will stimulate strong outside pressures for
appeasement and that, despite VS statements to the contrary,
big-power talks may result from Soviet maneuvers in the Coun-
cil of Foreign Ministers. Although Greek public opinion is in
general wholeheartedly opposed to any compromise based on
the Communist peace moves, the possibility of appeasement
has already prompted a number of opportunist politicians and
fellow-travellers to gravitate to the Paris CFM meetings in the
hope of promoting appeasement proposals and offering themselves
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GREECE
for posts in an interim "recalciliation" government
Furthermore, pressures for appeasement of the guerrillas
would probably mount rapidly at the slightest sign tint the
VS was considering either a relaxation of support for
Greece or a big-power deal.
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1
1
NEAR EAST - AFRICA
MAN
Gendarmerie Merger The Iranian Army's sudden assumption
of control over the gendarmerie last
week, in accordance with a merger plan advanced by the Shah
and Chief of Staff Razmara, represents an important step in
the consolidation of the Shah's position as the most powerful
political figure in Iran. Under the merger plan, all of Iran's
security forces will be under military control, although some
4,000 gendarmerie are nominally left under the Ministry of
Interior for the execution of civil functions. Although the Shah
and Razmara have advocated such a move for many years and
probably were motivated primarily by long-run considerations,
the most immediate effect of the merger will be to enhance
the ability of army leaders to influence the coming Majlis
elections.
One significant aspect of the move is that it was made
against US counsel and despite opposition to the plan in the
Majlis, which must formally authorize the merger before it
becomes permanent at the end of six months. Further opposi-
tion may develop before the merger is consolidated, particularly
In view of the suspicion of many Iranians that Razmara may be
manipulating the merger for his own ends. Although Prime
Minister Saed, Minister of War Ahmadi, and several other top
political leaders are reportedly opposed to this grab for power,
It is unlikely that they will suddenly risk royal disfavor on the
merger issue. Moreover, the Shah's willingness to incur both
US and local ill-favor indicates that there is little likelihood
that he will accept any major change in the merger plan.
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11295 50X1
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CHINA
COMMNUNIST-CONTROLLED
AREAS
8 JUNE 1949
Area Controlled
Area of Guerrilla Activity
Communist Drive
7----3> Nationalist Movement
9
100
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CONFIDENTIAL
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do mat necessardy correspond m ell .ses ro the
houndanes recopned by the U.S Government
11295 Map Branch, CIA, 6-49
CIA Reproduction
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FAR EAST
CHINA
Military Activity Major military activity in China has been
suspended while Communist units south
of the Yangtze Valley pause to regroup and await reinforce-
ments and the Nationalists continue to withdraw their Yangtze
forces to south China and Taiwan. Although the Communists
have occupied Yulin on the Shensi-Suiyuan border and Tsinghto
In north China, they have scored no significant advances In
either southern Shensi or soutbcentral China where one Commu-
nist force Is reportedly moving slowly southwest along the
Chekiang-Slangs' railway. Another Communist force is now
near Yungfeng in central Slangs', and a third is moving slow4
southward along the railway from Wuchang. Meanwhile, the
Communists will take advantage of any prolonged lull in mili-
tary operations to extend guerrilla activities in Kvrangtung and
menace the approaches to Canton. They will also increase
underground operations in all areas which they expect to occupy.
Hong Kong Although the Chinese Communists are determined
to take Hong Kong and will probably succeed
eventually in doing so, they are unlikely to risk an all-out mili-
tary attack to capture the British Crown Colony during 1949.
Since the Communists would prefer to take the colony without
recourse to armed attack, their first step will be to launch a
propaganda campaign. Once the Communists are entrenched in
south China, their next step will be to enter into discussions with
the UK for transfer of authority over the colony. These discus-
Mons may arise as a part of negotiations regarding recognition
of a Communist government of China. If these negotiations with
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CHINA
the UK should be fruitless, the Communists will probably
bring pressure to bear on the colony through such tactics
as strikes supported by a strong Communist underground
or sabotage of the critical water supply.
KOREA
US Troop Withdrawal President Rhee is apparently aban-
doning his efforts toward postponing
withdrawal at US troops from Korea in favor of obtaining a
strong statement committing the US to "stand by" Korea in
any future troubles. In his widespread campaign to delay
the withdrawal of US troops, Rhee so successfully stressed
South Korea's vulnerability to Communist aggression that he
aroused considerable fear among South Koreans regarding
the ability of his government to maintain security. Rhee is
now having to do everything he can to restore the badly-shaken
public morale. Despite such efforts, tension will probably con-
tinue to accompany the period of US troop withdrawal. Mean-
while, friction . between President Rhee and the Assembly over
domestic issues is still acute and threatens to prevent legisla-
tive action on a number of crucial issues. A prolonged legisla-
tive breakdown during the critical period of US troop with-
drawal might lead Rhee to risk the political progress gained
In South Korea by declaring a state of emergency and govern-
ing by decree.
INDONESIA
Republican Division Although Indonesian Republicans joined
In support of the Hatta-Sukarno leader-
ship during the recent Batavia discussions with the Dutch, the
agreement itself failed to satisfy wholly any of the several
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INDONESIA
Republican factions. Expecting to be installed at Jogjakarta
by the end of June, President Sukarno and Prime Minister
Bath are confronted with the need to reconcile developing
differences among Republican political leaders, the Emer-
gency Republic= Government-in-Exile in Sumatra, and all
of the many Party factions. Failing to achieve Republican
unity, Haft and Sukarno may face an open break with:
(1) the emergency Republican Government-in-Exile, which
will refuse to support the Batavia agree-
ment because it failed to include Dutch recognition of Republi-
can authority over Java, Sumatra, and adjacent islands; (2) the
prominent Socialist Party, whose leader, Sjahrir, Is
to oppose the agreement because it did not include
broader and more specific Dutch commitments as to the Re-
publican position in the IJSI; and (3) the miscellaneous smaller
groups which will oppose the agreement as incorporating un-
necessary and undesirable Republic commitments. (The
rightist Nationalist and Masjoemi Parties as well as Republican
leaders in Java have indicated they will accept the Hath-Sukarno
policy pending further developments as implementation of the
agreement proceeds.) At this point, faced with open dissension
within Republican ranks, the Dutch might repudiate the Batavia
agreement on the grounds that such disrupted and warring
elements patently could not carry out the Republican terms
of the agreement. Bath and several close advisers, however,
are presently conferring with Premier Sjafruddin of the Gov-
ernment-in-Exile in an effort to reconcile their differences.
The outcome of this meeting may well determine the success
or failure of Republican factions to form a cohesive unit which
will facilitate governmental activities after restoration to
Jogjakarta.
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WESTERN HE
Communist Potential The inability of the Communist
parties in many major Latin Ameri-
can countries to hold annual congresses reflects an over-all
decline in support of the Communist Party by its member-
ship in Latin America as well as growing weaknesses in
Party organization and finances. In past years, these con-
gresses have been an important means of renewing member-
ship interest and activity, correcting organizational defi7
dewiest and providing a sounding board for anti-capitalist
and anti-US propaganda. Leaders of the Mexican, Paraguayan,
and Chilean Communist Parties have postponed their national
congresses indefinitely because of a combination of inadequate
finances and organizational difficulties. Argentine leaders,
harassed by dissension within the Party and fearing a Party
reorganization, have dropped consideration of a national con-
gress; and strict police surveillance in Peru and Brazil has
limited Communist activity in these countries to a clandestine
status which precludes any thought of a national congress.
Meanwhile, the Communist congresses scheduled in Ecuador
and Uruguay will probably be postponed or abandoned unless
present fund-raising drives are much more successful than
Is presently indicated.
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DANGEROUS DETERIORATION IN KASHMIR
Admiral Nimitz' recent letter to UN Secretary General
Lie, expressing his view that there is no likelihood that a
plebiscite can be held in Kashmir in the predictable future and
recommending that his mission as UN Plebiscite Administrator
be dissolved in the interest of "realism and economy," points
? up how badly the Kashmir situation has now deteriorated. Since
the first of the year when the signature of an India-Pakistan
cease-fire gave promise that the Kashmir problem was on its
way to solution, the efforts of the UN Commission for India and
Pakistan to obtain a truce agreement and to pave the way for
a plebiscite have proved increasingly futile. The Commission
now has virtually no chance of ending the stalemate which has
developed.
India must be considered largely responsible for the
present situation. It has been particularly obdurate in the Irmo
negotiations, displaying an obvious determination to prevent
the holding of a plebiscite until conditions favorable to it can
be established. Meanwhile, it has steadily consolidated its posi-
tion in the disputed state, thus stimulating Pakistan's fear of a
ftit accompli similar to those India effected in Hyderabad and
junagadh. Unless India can be made to see that its own best
interests lie in helping obtain an equitable settlement, the dead-
lock over Kashmir will become more and more firmly established.
While the UN Security Council resumes its weary din-
! CUSSiOrS of the subject, the maintenance of garrisons in Kashmir
will continue to weigh down the .Indian economy. At the same
time, the ease with which Pakistan's fanatical Moslem tribesmen
can gain access to Kashmir and the vital concern which Pakistan
has for the state increase the possibility that the turbulent
emotions already aroused over Kashmir may flare into open
conflict.
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FRENCH MILITARY PLANS IN INDOCHINA
French plans to shift both manpower and materiel
from their forces in French-occupied Germany and North
Africa for an autumn military campaign against Communist-
led rebels in north Indochina materially affect the strategic
Interests of the US in both the Western European and Far
East theatres. In addition to reducing the defense potential
of Western Union by shipping arms and equipment from
French-occupied western Germany, the French action may
impair the prestige of the US in the Far East because the
French forces will be using US-made and US-supplied arms
and equipment. Moreover, the expenditure of French re-
sources for the military operations In Indochina reduces the
effectiveness of aid received under the European recovery
program and delays the economic recovery of France.
The French, who have been attempting to suppress
a Communist-led insurrection in Indochina since 1945, main-
tain that complete control of the China-Indochina border is
necessary to keep the Chinese Communists from providing
both men and materiel to the rebels or from evading Indo-
china. The French also point out that a stabilisation of their
position In Indochina is essential if Southeast Asia is to be
made secure against the menace of Communism. As another
part of their program to re-establish control throughout Indo-
china, the French recently signed an agreement with Bao Dai,
former emperor of one of the Indochinese states, granting
him authority to establish an "independent" government for
Indochina within the French Union. Bao Dai will probably
announce the formation of his government within the next two
weeks, and the French hope that he will gain the support of the
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non-Communist followers in the rebel group. The French
are convinced, however, that substantial military success
against the resistance movement is necessary to Bao Oat's
Initial political success. In formulating their plans for
Indochina, both Bao Dai and the French envisage public
support from the US and military aid, which they have
already indirectly requested. US compliance with these
requests would provide the Far East Communist propa-
gandists with another opportunity to charge that the US is
supporting reactionary colonial powers against the interests
of the Asian peoples.
?
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DISTRIBUTION
1 The President
2,64 Secretary of State
3,4 Secretary of Defense
5 Secretary of the Army
6 Secretary of the Navy
'1 Secretary. of the Air Force
8,70 Chairman, National Security Resources Board
9,71 Executive Secretary, National Security Council
10 Assistant Secretary of the Navy for Air
11,69 Chief of Staff, U.S.Army .
12,13,14 Chief of Naval Operations
15,16,17 Chief of Staff, U.S. Air Force
18.. . .- Director of Plans and Operations,General Staff,U.S.Army
19. I Deputy Chief of Staff (Operations) U.S. Air Force
20 Deputy Chief of Naval Operations (Operations)
21 Director of Plans and Operations, U.S. Air Force
22,23,24 Special Assistant to Secretary of State for Research
and Intelligence
25,26,27,28,29, Director of Intelligence, General Staff, U.S. Army
30,31,32,33,34.
35,36,37,38,39, Chief of Naval Intelligence
40,41,42,43,44.
45,46,47,48,49. Director of Intelligence, US. Air Force
50 Director of Security and Intelligence,Atornic Energy Comm.
51 Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
52,53,54,55,56. ChiefrAcquisition & Distrfoution Division,OCD7Dept.State
57 Director, Federal Bureau of Investigation
58 Secretary, joint Chiefs of Staff
69 Chief, Policy Planning Staff, Department of State
60 Secretary of State (Attention: Chief, Policy Reports Staff)
61 Deputy Director, joint Intelligence Group, joint Staff
62,63 Secretary, joint Intelligence Group, joint Staff
65 US Air Force Representative on joint Strategic
Survey Committee
66,67 Secretary, State-Army-Navy-Air Coordinating Committee
68 Administrator, Economic Cooperation Administration
Declassified in Part - Sanitized Copy Approved for Release 2013/07/18: CIA-RDP78-01617A002200070001-9
Declassified in Part - Sanitized Copy Approved for Release 2013/07/18: CIA-RDP78-01617A002200070001-9
sirso?ERE.T...
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U. S. GOVERNMENT PRINTING OFFICE
2631-8-19411
_Declassified in Part - Sanitized Copy Approved for Release 2013/07/18: CIA-RDP78-01617A00220007000179