WEEKLY SUMMARY #93

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002300210001-2
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 23, 2016
• Document Release Date: February 28, 2013
• Sequence Number: 1
• Publication Date: March 10, 1950
• Content Type: REPORT

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WEEKLY SUMMARY
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Number 93
1 0 MAR 1950
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Auth: DDA R?:3. 77C713
Dato: By:
CENTRAL INTELLIGENCE AGENCY
14,110.1 lecorl
Pettc?n lo & Pecorth atlas
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1. This publication contains current intelligence exclusively
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and therefore has not been coordinated with the intelli-
gence organizations of the departmente of State, Army,
Navy, and Air Force. 'a
2. This copy may be either retained, or destroyed by burning
in accordance with applicable security regulations, or a
returned to the Central Intelligence Agency.
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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......?.. 00
Page
WESTERN EUROPE..000 00 0?0 00 000 0
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EASTERN EUROPE.... ......... . ?
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NEAR EAST-AFRICA.?...?.......
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FAR EAST. ... ... ?..........?....
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WESTERN HEMISPHERE....
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ARTICLES:
Ruble Revaluation..............?. .
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New Communist China Air Force ... 0006000 .
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HIGHLIGHTS
Sentiment for German unity has recently been
on the increase in West Germany and had found ex-
pression in such acts as the lifting of the West German
embargo on steel bound for the Soviet Zone (see page 2),
A popular movement favoring German unity has re-
ceived support from many shades-of political coloration.
The bitter German reaction to the recent French-Saar
50-year agreement will add impetus to this movement.
Meanwhile, the spread of French labor strikes, begin-
ning in the automotive and metal industries, is contri-
buting to the French Communist antioMDAP campaign
(see page 2),
Returns for the Greek national election of
5 March indicate that the new coalition government will
be essentially centrist and of questionable stability
(see page 8), No one of three parties which reteived
the greatest popular vote is likely to obtain more than
50 or 60 seats in the 250- man parliament, and another
general election may become necessary.
The Argentine Government may soon: be forced
to seek US financial assistance as a consequence of per-
sistent economic difficulties and increasingly unfavorable
'financial developments (see page 13), Although Peron
will face great difficulties in any attempt to revise
Argentina's economic policies in order to qualify for
US aid, continued economic deterioration may force him
to undertake such revision.
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WESTERN EUROPE
GERMANY
Unification. Sentiment Although US High Commissioner
McCloy recently challenged the
?Soviet claim that the usprt is the sole champion of German
unity by by proposing that German unity be accomplished on
:the basis. of freely-held elections, the effectivenessof ? ?
McCloy's proposal. in countering agitation for unification
will depend upon increased support from officials in the
? West' German Government:. Sentiment for German :unity
has been increasing. in many West German circles? The
recent lifting of the steel. embargo by the West German
.Government is one indication of the pressure from West
German businessmertfor increased trade :withthe Soviet
zone; organizations .of "intellectuals" advocating neutrality
.for a united Germany have been gaining popular strength;
Protestant spokesmen and the rightist-nationalist parties
.have urged German. unification on. various terms; and the
Communist Party and various COmmunist-front Organiza-
.tions continue to support the idea of a unified Germany.
Many of the extreme nationalists *envisage a future under.;
standing with the USSR which would strengthen their position
in:a united Germany..
FRANCE
Strike Wave Continuing labor agitation in France will
contribute to the Communist campaign
against MDAP. Major strikes, already in progress in
the automotive industry, are Spreading among inetal
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FRANCE
workers, and strike sentiment is growing among workers
in the Paris utilities. Prospective government counter-
measures to regulate the right to strike and to set the
minimum wage may be hampered by the present outbreak
of labor unrest, and non-Communist labor unions have
been placed at a disadvantage through political exploita-
tion of labor's economic grievances by the Communist-
dominated General Confederation of Labor. The Bidault
Government is likely to propose a bonus for low-paid
workers, but neither this concession nor basic wage pro-
posals of either government or management are likely
to be sufficient to halt the current strike wave in the near
future.
ITALY
Labor Developments Prospects are not bright for the
development of the proposed
non-Communist labor federation into an organization
capable of cutting into the membership of the Commu-
nist-dominated General Labor Confederation (CGIL).
The Socialist-Republican Italian Federation of Labor
(FIL) recently voted to create such an organization by
uniting with the Free General Confederation of Workers
sponsored by the Christian Democratic Party, but past
attempts at unification have been opposed by a substantial
portion of the FIL members who fear absorption by the
larger Christian Democratic organization. The proposed
federation would have little success in attracting members
unless workers could be offered a substantial improvement
in economic status and unless the federation could demon-
strate its independence of the Church, political parties,
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ITALY
and particularly the government. The time is not aus-
picious for economic gains by labor, largely because the
government is tending to ignore labor's viewpoint in
disputes with management, and employers are using the
weakening Communist hold on labor to increase their re-
sistance to worker demands. Moreover, the CGIL is still
regarded by many non-Communist workers as the most
effective champion of their interests. The non-Communist
unions have won some benefits for workers, but a unified
federation would have to do much better before it could
seriously challenge the CGIL.
GENERAL
Air Transport Problem The active planning among
? Atlantic Pact countries for
war mobilization, of surface shipping may lead to con,-
sideration of similar steps to be taken with respect to
transport aircraft, which would immediately be in
serious short supply in the -event of war. The emer-
gency evacuation. of European.. transport aircraft was
suggested at one time by an official of a European airline,
but.to,date n.o comprehensive plan for such a step has
been developed; and no project for joint utilization of.
Western. transport aircraft has been undertaken. The
most important element in a joint fleet of transport air-
craft would be.four-engine transports, because of their
capabilitiesjor transoceanic operations. The US civil.
.air fleet of 469 four -:engin.e aircraft represents about
60 percent of the combined Atlantic Pact transports in
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GENERAL
this category. A large number of the non-US aircraft
are suitable for immediate allocation to transoceanic
operations, whereas a substantial part of the four
engine transports owned by the US air carriers are
designed for domestic operations and would require
time-consuming conversion to make them suitable
for emergency overseas use.
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EASTERN EUROPE
Soviet Boycott The extended Soviet boycott of the UN,
now in its eighth week, is damaging
UN prestige and supplying ammunition for Soviet pro-
paganda. Despite the contention that the walkout is
illegal and the protestations that it must not be allowed
to interfere with normal UN operation, the Western
Powers privately admit that operations are not normal
and that "provocative" issues should be avoided during
the absence of the USSR. This prevailing undercurrent
of uncertainty and pessimism at Lake Success arises to
some extent from the fear that the Soviets may not re-
turn to the UN if the Chinese impasse is permitted to
drag on too long. The continued official representation
of China by the National Government on Taiwan supplies
anti-US propaganda material; Soviet-accusations that
the US is blocking the legitimate aspirations of the
Chinese people by preventing other UN members from
voting to unseat the discredited Nationalists are re-
ceiving sympathetic audiences in the Far East,
YUGOSLAVIA
Technician Shortage The current shortage of skilled
technical manpower will con-
tinue to hamper Yugoslavia's industrial expansion until
foreign engineers and mechanics can be employed to
train a sufficient number of Yugoslav technicians to
permit full utilization of capital equipment being sup-
plied by the West. Some Italian and German technicians
have been recruited, but the manpower requirements of
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YUGOSLAVIA
recently installed industrial equipment are already ?
greater than the supply of skilled workers in Yugo-
slavia. Moreover, further efforts to obtain European
personnel will not be successful until anti?Yugoslav
sentiment, engendered by ill treatment of German and
Italian nationals, can be dispaled by the Tito Govern-
ment. The Yugoslav Government may find it necessary
to turn to the US for technical assistance in utilizing
the new industrial equipment.
FINLAND
New Government Although President Paasikivi has
asked Finnish party leaders to
consider the inclusion of some Communists in the new
Cabinet; it is. unlikely that Communists will actually -
participate in: the new government. ? Paasikivi also made
this request when the previous Cabinet was being formed
in July 1948, and his present requestwill probably only
protract and complicate the negotiations among the
various parties; The ?Communists claim, they should be
represented in any coalition Cabinet because the Com-
munist-dominated Democratic Union:forms the third
largest party in the Diet and because, they obtained the
third largest number of votes in the January presidential
elections. The Agrarian; with the largest Diet repre-
sentation, are reportedly willing to form a coalition ?
Cabinet with Communists as Minister of Communications
and Public Works and as Deputy Ministers of Foreign
Affairs and Social Affairs. However, these three minor
posts are less than the Communists refused in July 1948
and are far short of the expressed Communist desire for
at leastfour portfolios, including some key posts. The
most likely coalition combination would include Agrarians,
.Social Democrats, and some rightist parties.
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GREECE
Coalition Prospects An essentially' centrist coalition
government of questionable stability
will probably result from the 5 March national elections in
Greece. Three parties have forged ahead in the popular
vote--Constantine Tsaldaris' Populists, the new left-center
bloc under Nicholas Plastiras, and Sophocles Venizelos'
Liberals. None of them, however, is likely to obtain more
than 50 to 60 seats in the 250-man parliament, and the
possibility that all three might combine forces is virtually
precluded by the mutual distrust of Plastiras and Tsaldaris.
With the collaboration of George Papandreou's moderate
group and of several lesser centrist and moderate rightist
parties, a Plastiras -Venizelos combination might secure
a parliamentary majority (Tsaldaris appears to have little
chance of rallying sufficient support for a coalition). Even
if a Plastiras-Venizelos coalition is formed, however, per-
haps 45 percent of the chamber, including the Sophianopoulis
leftists and various extreme rightists, would still be left
in opposition.
In the face of such strong opposition, the effective-
ness and stability of a coalition government will be impaired
by the difficulty in reconciling the demands of its several
nearly equal components, and another general election may
become necessary. In such an event, the formerly dominant
Liberals and Populists might be temporarily eclipsed by a
struggle between the emergent figures of Plastiras and
Marshal Papagos, who is the King's favorite for the position
of "strong man" in Greece.
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NEAR EAST-AFRICA
WFTU Plans The major international Communist
front organizations are devoting in-
creasing attention to penetrating the dependent areas of
Africa. The World Federation of Trade Unions (WFTU),
preoccupied until recently in Western Europe and the
Far East, now appears ready to take more aggressive
action in Africa, where it considers the Western Powers
especially vulnerable. In July of 1949, the Soviet WFTU
representative called for assistance to the trade pitons
of Asia and Africa as the WFTU's "most important task"
and urged the convening not later than 1950 of" af con-
ference of Asiatic countries and of the trade unions of
African countries." Although no African conference has
yet been held, the WFTU has demonstrated the importance
It attaches to this area by selecting the French Sudanese
trade unionist, Abdulla Diallo, as its representative to the
?UN Economic and Social Council and by directing him to
press vigorously for UN action against "discriminatory
measures by color or race" in the territories, of UN
members. The World Federation of Democratic Youth
has also begun to concentrate greater efforts in French
Africa.
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, FAR EAST
Hong Kong .Airehips Although Communist officials
apparently?believe that as soon -
as official documentary notification is placed in the ?
hands of ?the Hong Kong Governor the fleet of air trans-
ports involved in litigatiOn there can be flown. to China,
this plan may be delayed by British executive action. ?
On ordersfrom London- the Governor of Hong Kong has
stipulated that the aircraft documentation must be sub-
mitted through "diplomatic channels." In view of the
protracted negotiation in. Peiping for establishment of
full. diplomatic relations between. the UK. and Communist
China, this British move may prevent the speedy re-
?-moval of the aircraft by the Communists -anti-allow.time
for new legal steps to be taken by the US interests to
obtain possession of the aircraft.
BURMA
Government Advances The recent well-planned
Burmese advance into .Karen
-territory, capitalizing on. a critical Karen shortage of
arms and ammunition, may lead to the early capture of
.ToungOol the chief center of Karen resistance. Govern-
ment troops have followed up the victorious assault on
Nyaunglebin (second largest center of Karen resistance)
with a rapid northward movement on the Karen "capital.".
'The fall. of Toungoo would halt unified Karen_resiStance
in Burma and; permit greater Government concentratien
on other problems, including the _suppression-of Com-
munist and "People's Volunteer Organization". rebels,
presently obstructing the main lines of communication
between Upper and Lower Burma.
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INDONESIA
Centralization Trend Popular sentiment favoring the
abolition of the separate states
comprising the federated United States of Indonesia (USI)
has recently become so strong that Indonesia's federal
structure will probably be completely reorganized. Ag-
gressive political leaders in.. the principal state of the
US!, the original. Republic of Indonesia, have been agitat-
ing so successfully for the unification of other Indonesia
states within the former -boundaries of the old Republic
that President Sukarno has been forced to approve actions
already taken in that direction by some of these states.
A continuation of this trend means that. the original
*Republic will, eventually displace the present USI federa-
tion as the governing authority in Indonesia Of the -
sixteen states which originally formed the USI, only East
Indonesia--the largest and oldest--is likely to offer strenu-
ous opposition to this process of reorgainiation into a
centralized republic. Many USI leaders are apparently
willing to accept the trend toward liquidation of the individ-
ual states and believe that the resultant strong central govern-
ment will. save money and allow more effective utilization of
Indonesia's few trained administrators. The shift from the
present-federati.on to a centralized government, however,
will require considerable time because of strong rivalries
between. Republicans and Federalists and among competing
. Republican factions.
MALAYA
Guerrilla Trouble The elimination of the Communist
guerrillas in Malaya continues to
be a serious and long-term problem. Bandit attacks have
been increasing in recent months and British recognition
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MALAYA
of Communist China has raised bandit morale. More-
over; the link between-the terrorists and the Chinese
community in Malaya may become stronger, and there
is now the possibility of a wholesale shift olChinese
-sympathy in Malaya toward the Communist regime
in China. The Peiping radio has intensified its pro-
paganda campaign glorifying the rebellion in Malaya,
and influential Chinese in Malaya will probably increase
their efforts to develop support for the Chinese Coni
munists among local Chinese,
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WESTERN HEMISPHERE
ARGENTINA
Economic Difficulties Persistent economic difficulties
and increasingly unfavorable fin-
ancial developments during, the past few months may soon
_force the Peron Government to seek financial assistance
.from the -11S. Preliminary maneuvers apparently aimed
at eventually establishing economic -cooperation with the
US have already been made, including the suggestion by
the head of Argentina's National Economic Council. that
a US-Argentine treaty of friendship, commerce, and eco-
nomic development might assist in solving mutual problems.
More recently, the Argentine Government has offered cer-
tain assurances that it Will revise its economic policies in
.order to qualify.for US aid. Regular payments on Argentine
dollar arrears to US firms were undertaken a few months
ago, and there are indications that Peron now reCognizes
.the importance of satisfying the legitimate needs (parti-
cularly for assurances against exprbpriation).of US
.business operating in Argentina. Although Peron's poli-
tical commitmentsito state control of industry and his
dependence on. the support of nationalists opposed to
collaboration with. the US will make any moves toward
closer relations with the US somewhat difficult, continued
economic deterioration in Argentina may force Peron to
settle some of the outstanding US-Argentine trade and
financial differences.
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CHILE
New Cabinet Although a.majority of the new Cabinet
members are leftists, Communist in-
fluence will not become a threat to the stabilityof the
Chilean. Government in the near future. Government
policy, however, may shift toward. the left; a more ?
friendly attitude toward Communists may: develop; and
the President may be restricted in his use of special
.laws which previously have been invaluable in main-
taining order and in Controlling Communist threats.
COLOMBIA
Increased Unrest The Colombian Army, .already
antagonized by the Conservative
Government's transfer of Liberal officers from the
more important army posts and the creation of a
large pro-government police force, has now been
further alienated by a decree permitting the govern-
ment to retire any officer. Although the Colombian
Army has not participated in politics for many years,
President-elect Gomez now apparently feels that he
requires an army of unquestionable loyalty for use
in any emergency. The measures taken to secure
reliable armed backing for the government may back-
fire, however, by providing a focal point for civilian
and military dissatisfaction with the President-elect,
and possibly precipate a civil war. The prospects for
the success of such an attempt would be increased,
if support should be received from anti-conservative
forces in the Caribbean area (such as the Venezuelan
Accion Democratica) or from the Caribbean Legion.
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RUBLE REVALUATION
The Soviet decree of 28 February 1950 revaluing
the ruble from 18.870 to 250 appears designed primarily
to serve Soviet propaganda. purposes and to facilitate the
economic .exploitation of the Satellites within the Soviet
orbit. The revaluation will probably not have any direct
effects outside the Soviet sphere; the accompanying re-
duction of prices in the USSR, however, may improve to
some extent the living standards of the Soviet people.
Although the USSR claims that the gold content
of the ruble, has been increased, the ruble will continue
to be unacceptable as an internatianal Jinn because the
Soviet decree failed to provide for: (1) unrestricted
convertibility; and (2) the buying and selling of gold
at a fixed price in unlimited quantities .in international
'transactions. Soviet trade with the West, therefore, will.
continue to be conducted in terms of Western currencies:
The USSR is already claiming that the revaluation of
the ruble demonstrates the superiority of the Soviet:
.economy and the increased stability of the currency.
The Soviet people will benefit to some extent from price
reductions on a wide range of consumer goods including
many items of primary importance to lower paid workers.
The largest reduction in prices, however, occurred in
items still out of reach of the average consumer and the
cost of 'food compared to Western standards remains ex-
orbitant.
The February 28 decree was issued immediately
after the conclusion of Soviet-Satellite and Chinese-Soviet
trade and credit agreements for 1950, and it is likely that
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some formula for balancing the currencies of those
states with the new value of the ruble was incorporated
in the various agreements. Such a formula probably
established for intra-orbit trade an arbitrary price list
more favorable to the USSR and divorced from world
prices, as a means of furthering the Soviet aim of
integrating the economies of the USSR, the Satellites,
and Communist China.
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NEW COMMUNIST CHINA AIR FORCE
Recent developments indicate that Communist China
-is preparing a-new air force which maybe sent into.
action in the' near future,: During the past few weeks,
various' airfields in south Kiangsu and Chekiang report-
edly have been prepared for use by the Chinese Com-
munists and considerable activity has also taken place.
around Shanghai's' four major airfields; Indications. that
-the Communists will have Soviet assistance In activating
,their air force include: (1) feverish requisitioning of -
? foreign houses In. Shanghai reportedly for the, use of Soviet
air personnel; (2) the reported arrival of considerable numbers
of Soviet air personnel. in the Shanghai area; .and (3) the razing
of native villRees near Lunghua and Hungjao airfields ap-?
parently in order to establish a security zone. Moreover,
;the recent successes of the Nationalist air force Will pro-
bably force the Communists to put at least a token.force in
..the air as soon as possible.
?The Communists now possess about 40 former' Nation-
alist combat and transport planes and an unknown number
of wartime Japanese aircraft. -The.USSR.probably will con-
tribute considerable technical assistance to the new air arm
and may -even.turn.over a limited number of surplus Soviet
aircraft and spare parts to the Chinese Communists.. Per-
sonnel available to the Communists in building an air force
Include some US-trained former Nationalist Pilots and crews
who have defected; Chinese Communist air focce personnel
_reportedly:hay' e been receiving training in northeast Man- .
churia and In. the USSR since late 1046. ,The Communists
are now apparently meeting the basic requirements for
operating an effective air force, including experienced.
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personnel, adequate planes and spare parts, fuel and
lubricants. Even though the Communists probably
would prefer to avoid major air operations until these
can be conducted in cormection with an invasion of ?
Taiwan, a limited number of J combat craft may be used
in the near future in an effort to bar Nationalist planes
from Shanghai and the lower Yangtze valley.
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DISTRIBUTION
8,7?0, .
9,71. . . 0 ?
11,69.? . . .
12,13,14, ,
15,16,17. .
SECRET
The President
. Secretary of State
Secretary of Defense
Secretary of the Army
Secretary of the Navy
. Secretary of the Air Force
Chairman, National Security Resources Board
Executive Secretary, National Security Council
Assistant Secretary of the Navy for Air
Chief of Staff, US Army
Chief of Naval Operations
Chief of Staff, US Air Force
Assistant Chief of Staff, G-3, Operations ?
Deputy Chief of Staff (Operations), US Air Force
Deputy Chief of Naval Operations (Operations)
Director of Plans and Operations, US Air Force
Special Assistant, Intelligence, Department of State
4, Assistant Chief of Staff, G-2, Intelligence
22,23,2?4. .
25,26,27,28,29,
30,31,32,33,3
35,36,37,38,39;
40,41,42,43,4
45,46,47,48,49,7
73,74,75,
4. Director of Naval Intelligence
2,
Director of Intelligence, Headquarters, USAF
Director of Intelligence, Atomic Energy Commission
Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
Chief, Acquisition & Distribution Div., OCD 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
Secretary, joint Intelligence Group, Joint Staff
US Air Force Representative of Joint Strategic
Survey Committee
Administrator, Economic Cooperation Administration
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Declassified and Approved For Release 2013/02/28 : CIA-RDP78-01617A002300210001-2