WEEKLY SUMMARY #13

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002000130001-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 27, 2016
• Document Release Date: May 22, 2013
• Sequence Number: 1
• Publication Date: August 19, 1948
• Content Type: REPORT

ii
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
00P7 go.
58
I WEEKLY SUMMARY
Number la
3 AUG 1948 Doc umept No.
NO CHANGE in Class. 0
DECLASSIFIED
liass. CHAN= TO: TS S C
EDA Memo, 4 Apr 77
Auth: DDA ra0. 77/1-3
Date: BY:
CENTRAL INTELLIGENCE AGENCY
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
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 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
II
CONTENTS
HIGHLIGHTS
GENERAL
3
WESTERN EUROPE
5
EASTERN EUROPE
6
NEAR EAST-AFRICA
9
FAR EAST .
12
WESTERN HEMISPHERE.
....15
?1
I.
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
HIGHLIGHTS
A new Cominform meeting apparently has taken place
In Prague within the past fortnight at which two of the malor
topics of discussion are believed to have been Yugoslavia s
defiance of the Cominform's earlier censure and the selection
of two Satellites to participate in the European recovery pro-
gram (see page 6). At the same time, the Hungarian Com-
munist officials suspected of Tito's brand of nationalism
apparently were being purged, and a Cabinet reshuffle in
Budapest established Moscow-trained Communist Leader
Rakosi as the undisputed boss of the country (see page 7).
The USSR continued to dominate the Danube Conference,making
some minor tactical concessions presumably in in effort to
keep the western powers from withdrawing (see page 8). Con-
currently, the USSR evidenced an increased interest in the
Middle East; this trend does not- however, seem to foreshadow
an immediate transfer of primary pressure from Europe and
the Balkans to that area (see page 6).
In Franc!, Finance Minister Reynaud's economic pro-
gram was approved by the Nhtional Assembly on 11 August,
over Communist and some Gaullist opposition, by a vote of
325 to 215. Germans in the western zones were showing con-
siderable uneasiness over the rise in prices and money short-
age which have followed the recent currency reform (see page 5).
Israel's growing consciousness of its military strength
may lead to a resumption of hostilities in Palestine. The Pro-
visional Government of Israel has failed to cooperate with UN
Mediator Bernadotte, especially as regards the demilitariza-
tion of Jerusalem, and reportedly is working out plans with
Jewish extremist forces to capture the whole city (see page 9).
The dispute over Hyderabad's accession to India, meanwhile,
appears to have reached the breaking point (see page 11).
- 1 -
II SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
In the Far East, Japan's rehabilitation is being hindered
by delay and disagreement among the powers concerned over
aI.ocat1on of Japanese reparations (see page 12). Serious dis-
turbances may break out in the Philippines after 15 August
because of the failure of the dissidents auks to turn in their
arms and accept the Governmentaninesty by that date (see
page 13). Two rebellious Army battalions in Burma, with the
apparent encouragement and aid of the Communists, are trying
tg3 overthrow the Makin Nu Government in Rangoon. Although
the Government should be able to drive back the insurgents,
It will have little effective control over the country (see page 14).
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
GENERAL
The admission of new members will confront the UN
General Assembly with a major controversial issue in Sep-
tember. Admission to the UN is contingent upon a recommen-
dation from the Security Council (based on seven favorable
votes, including those of the permanent members) and fol-
111 lowed by a two-thirds vote of approval in the General Assem-
bly. However; the USSR has repeatedly vetoed the admission
of Austria, Eire, Finland, Italy, Portugal, and Transjordan,
whose applications for membership have met the charter re-
quirements.
The International Court of Justice has ruled that the
sole criterion for membership (under Article 4 of the UN
Charter) is that the state shall be "peace-loving" and "able
and willing to carry out" charter obligations. Some extra-
legal method, therefore, such as a declaration that a Soviet
negative vote constitutes no bar to an SC resolution recom-
mending admission, will probably be necessary in order to
prevent certain states from being permanently barred from
the UN. The International Court, however, would probably
declare such action illegal, in the event it reviewed the case.
I. Under present rules, Ceylon, Korea, and Transjordan
have little chance of admission. To circumvent these obstacles,
I. Argentina has raised the question of admitting those applicants
who meet the requirements and who, in the past, received the
necessary seven SC votes. GA acceptance of the Argentine
proposal to admit any such state, regardless of the negative
vote of a permanent SC member, would vastly improve that
state's chances of obtaining membership.
Conflicting national interests at the European Broad-
casting Conference in dopenhagen may lead to its sudden ad-
journment. Convened for the purpose of assigning frequencies
to all European countries, the conference bogged down over the
a 3 -
II SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
problem of allocation to Germany. Its decision to limit the
occupying powers in Germany to one or two frequencies per
zone is considered by the US as inconsistent with occupation
objectives, and such a decision, if implemented in the midst
of the East-West propaganda battle, would deal a major blow
to the entire US program for Europe. Adjournment, therefore,
is considered the best means of avoiding further damage to
US interests, particularly at the hands of French and UK del-
egates who have given more consideration to narrow technical
problems than to broader political objectives.
111
.4..
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
WESTERN EUROPE
GERMANY
Qualm aiLawis 1.j,122agLaxmaguallie t_asattatia. zones
Is, resulting from the rise in prices and the general money short-
age which have followed the recent currency reform. Although
Increased supplies and commodities have appeared in the shop
windows since the currency reform many Germans find they
do not have enough money to meet their needs, much less to
bay the many consumer goods they were led to expect would
be available to them after the currency reform. The rising
prices could lead to compensating demands for increased wages,
which would bring about another full circle in the cycle of in-
flation--the very thing which the recently-instituted currency
reform was designed to avoid until production caught up with
demand.
likp volt is twagg small German para-military
police units in the Soviet occupation zone. unfts are
being orgardzed so that they could be adapted as a cadre for
the militia of an eastern German state. A gradual expansion
of the German police forces in the eastern zone (especially
the Grenzepolizei or border police) Ms been under way for
some time. Company formations of the border police have
been active along the Soviet zone frontier; these units will
probably be formed into larger components. The USSR will
probably not establish a unified German command, however,
but instead will keep these para-military units under the con-
trol of the German Central Administration of the Interior
and particularly under the Soviet Military Administration.
- 5 -
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
EASTERN EUROPE
&11f1E-C.121121312EULAMUS apparently has been taking
place in Prague. A significant number of key Communist
figures have recently converged on the Czechoslovak capital.
Their objective seems to have been the conference table as
well as the spas. Their deliberations are believed to have
centered on two subjects: (1) Yugoslav defiance of the Comin-
form's earlier censure; and (2) the selection of two Satellites
(reportedly Czechoslovakia and Hungary) to participate in the
European recovery program. The latter action, reflecting
Soviet recognition that the European recovery program has
good prospects of success, would be designed to meet growing
Satellite pressure for modification of the Soviet ban on parti-
cipation. Such a concession would probably not be extensive
enough to satisfy the Satellites. It would, however, offer the
USSR a means of increasing East-West trade.
SOVIET UNION
I. The USSR is showing an increased interest in the Near
East. Soviet propaganda media have been devoting more attention
to this area, and Soviet activity among minority groups, partic-
i! ularly the Kurds of northern Iran and Iraq, has been intensified.
The USSR has also made new efforts to persuade the Iranian
Government to sever its close ties with the US. These man-
ifestations of Soviet interest in the Near East do not appear to
foreshadow an immediate transfer of primary Soviet pressure
from Western Europe and the Balkans to the Near East. Such
a shift will likely take place when the Kremlin discovers that
it can no lower make gains in Europe. At such time, the
transfer of pressure may be rapid and Iran may become its
focal point.
The return for education within the USSR of Soviet
children now abroad is clearly not preliminary to a general
withdrawal of Soviet nationals abroad. There is ample can-
- 6 -
I SECRET
. Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
SOVIET UNION
firmation that the primary motivation in the case of the
children has been the Soviet fear that they would be con-
taminated by contact with foreign ideas and ways of life.
HUNGARY
The reshuffle of the H_ Cabinet, following the
forced resignation of President Tildy and his replacement by
Sza,kasits, provides good evidence that Moscow-trained Matyas
Rakosi, for the moment at least, is the undisputed Communist
Loss in Hungary. Persistent rumors had suggested a split
in the Communist Party, with Lajos Rajk challenging Rakosi's
position as leader. In the recent Cabinet shift, Rajk (who, like
Tito, seems to have demonstrated nationalistic tendencies)
lost his strategic position of Minister of the Interior and was
kicked upstairs to the post of Foreign Minster, while Rakosi
gained control of the Hungarian police system and of the
Ministry of Industry. This Communist action in Hungary is
consistent with the principles laid down in the recent Com-
inform denunciation of Yugoslav leadership.
FINLAND
The Communist-led Democratic Union, which was ex-
eluded from the new Finnish Cabinet by its stubborn and ex-
? orbitant demands for major ministerial positions, may now
be willing to enter the government on a less favorable basis.
This decision doubtless results from the Communists-recent
unsuccessful experience with political strikes, the rapid im-
provement in the Finnish economic situation which has reduced
? the number of economic grievances that the Communists might
exploit, and the improbability of Soviet support for any attempt
to increase the Party's power by extra-legal action at this
time.
-7 -
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
1
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
BALKANS
SECRET
The Soviet position at the Danube Conference remains
eryieklino despite recent tactical concessions apparently designed
to teee the western powers from withdrawing, The USSR probably
6esires to keep the US, the UK, and France at the conference in
',1-5 hope of gaining entry into the US-controlled sector of the
111111b0 above Mauthausen. Furthermore, the USSR needs the con-
erlereeice (3f as many interested countries as possible in order to
Ieeei the maximum possible appearance of legality to any con-
vention wlich the conference may adopt. While there is no
1.'e3.8011 to anticipate that the western amendments will be adopted
committee, their introduction in lieu of outright withdrawal of
the western powers has afforded the west the possibility for argu-
-41.0 its case before the conference. The western nations thus have
;?rorestalled Soviet charges that the western powers have quit an
Wternatdonal conference without participating in its discussions
as soon as they found the will of the majority unacceptable. In
spite of the Soviet-dictated formula for free navigation, or any
nor concessions which the USSR may unexpectedly make in
the final text, actual Soviet physical control of most of the Danube
will certainly enable the USSR to maintain its present stranglehold
WE Danube shipping.
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
NEAR EAST -AFRICA
GREECE
The Greek Army, having compressed the 7,000 guer-
rillas in the Grammos area against the Albanian frontier, is
now poised for the final push of its eight-week-old offensive.
Guerrilla organization has not yet collapsed in the face of
mounting rebel casualties, as is indicated by the fact that
the double envelopment, which the Greek Army has Just com-
pleted, failed to result in the wholesale capture of prisoners
or materiel. The Markos forces are expected to fight des-
perately to defend their remaining foothold on Greek soil.
Nevertheless, although the guerrillas benefit by inner lines
of communication and shortened supply routes, the weight of
manpower which the Greek Army can now bring to bear along
a greatly shortened battle front ultimately should prove de-.
cisive. The Albanian frontier now constitutes the only certain
escape route for the Grammos guerrillas, although by accept-
ing the guerrillas Albania would be violating international law
and a specific injunction of the UN General Assembly. The
UN Special Committee on the Balkans probably will warn
Albania to that effect, so that if guerrilla forces driven over
the border were later to reappear in Greece, Albanian respon-
sibility would be more clearly established.
PALESTINE
ISrael's growing, consciousness of its military strength
may lead to the resumption of the Palestine war in the near
future. The Jews have expanded their territorial claims and
appear prepared to back up these claims with armed force,
even in defiance of the UN. The Provisional Government of
Israel (PGI) is demanding not only the territory allocated to ?
the Jews by the UN partition recommendation but also the purely
Arab areas which the Jewish forces have conquered. Moreover,
the POI has failed to cooperate with UN Mediator Bernadotte,'
-9-.
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
I
PALESTINE
particularly as regards the demilitarization of Jerusalem,
and is reportedly working out plans with Jewish extremist
forces to capture the whole city. Although the Arabs profess
bitterness over the "imposed" truce, they do not show any
strong or united inclination to resume fighting, and some
leaders (like Abdullah) have expressed the hope that a com-
promise with the Jews might be worked out. Despite their
military weakness, the Arabs will attempt to defend the
areas they now occupy, particularly the Old City of Jerusalem.
Although their certain defeat and probable expulsion from
Palestine would temporarily resolve the Palestine issue,
such a "solution" would raise other issues in the Middle
East of far greater potential danger to world peace and US
security.
British efforts in the Middle East in comfit% weeks
will be directed toward overcoming Arab bitterness concern-
" Ing the "perfidy" of the British on the Palestine issue, while
keeping generally in step with over-all US policy. As a part
of its efforts to rebuild good will among the Arabs,the 'UK
already has: (1) resumed subsidy payments to Transjordan;
and (2) introduced into the Security Council A resolution re-
garding the problems created by Arab refugees from Pales-
tine. If the Jews launch an attack on Transjordan, it is
virtually certain that the UK will support Transjordan to
the extent of its treaty obligations.
TURKEY
Protracted maneuvers to replace the aAre Maximo
as Oecumenical Patriarch of the Greek Orthodox Church
appear to be succeeding. After vigorously resisting for
more than a year growing opposition within the Holy Synod,
Maxims is expected to resign within the next few days. His
probable successor in the Patriarchate -- which represents
titular leadership over Greek Orthodox congregations
- 10 -
I SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
TURKEY
Ithroughout the world ? is Athenagoras, the Metropolitan
of North and South America. Athenagoras has the support
I con-
trol the Patriarchal elections. Both governments consider
of the Greek and Turkish governments, which virtually con-
that Maximos has proved incapable of coping with recent
ISoviet efforts to use the Church as a political instrument.
INDIA -PAKISTAN
The dIEELe .over HAerabad's accession to India
appearsITEave reached the breaking point. The Nizam
has made conciliatory gestures, but he is apparently con-
trolled by extremist elements in his own government which
are determined not to accede to India. Moreover, certain
leaders have responded to Indian threats with the assertion
that Hyderabad's army is fully prepared to fight. Indian
Army units have already occupied two villages in Hyderabad,
and the Indian Minister for Home Affairs has recommended
that British nationals be evacuated from the state immediately.
Unless the Nizam accepts a peaceful accession, it is likely
that India will settle the dispute by force. Such action on
the part of India would probably be followed by intensified
communal discord and a consequent widening of the breach
between India and Pakistan.
in Kashmir, military action has been reduced to
patrol activity. Although neither Indian nor Pakistan forces
have withdrawn from their positions, both governments will
probably postpone further action until the UN Kashmir Com-
mission has published the details of its cease-fire proposal.
1 - 1 1 -
I SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
FAR EAST
JAPAN
fillamajic_LcLisme!rck!nt on allocation of Japanese war
reparations continue to hinder Japan's economic rehabilitation,
although prospects for an early solution to the reparations
problem were recently increased by conditional UK acceptance
of the US-proposed allocation schedule. The US allocation
.3chedule has already been accepted by Australia, New Zealand,
Canada, and China, and it has been "approved" by France. The
UK has accepted on the condition that the British share of the
total reparations will be increased to 16 percent. This increase
would come from the US and the Australian shares; both countries
'lave indicated willingness to turn back to the "pool" sufficient
ceparationa to provide the increase requested by the UK. The
colelitional acceptance by the UK leaves the USSR as the only
me.!,or power that rejected the US proposal and may pave the
way for a unanimous acceptance of the US proposal or, at least,
a 10-member acceptance. Even a 10-member acceptance would
enable the US to arrange the distribution of the reparation proper-
ties and bring some degree of stability to the Japanese economy.
Until the reparations are effected, Japanese economic rehabilita-
tion must either continue its retarded pace or fly bunt because
of uncertainty regarding which plants will be shipped and which
will remain. Meantime, many of those plants which will probably
remain in Japan can only stand and rust until an over-all repara-
tions agreement is reached.
IiamEgt Communists are fail to obtain neral su
despite their vigorous attacks against the occupation-inspire
I strike restrictions, and they may accordingly be compelled to
modify their extreme position. Although the Socialists were
Initially embarrassed by the strike restrictions, they may emerge
Iwith increased prestige,either by fixing the blame on Communist
extremists for having caused the strike restrictions or by seek-
ing modification of the strike ban through Diet action. In the
- 12 -
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
50
45
40
35
30
25
20
U. S. S. R.
. ? ? ??-.
. _./
120
2
U. S. S. R.
3
HSINUAN
Manchou
MONGOLIA
Pamrou
f.'
TSITS01 AR
kertpshan
JAngang?ch'i
NUNKIANG'
e
T'ao?an
0
."?
?
Ch'ih?teng
Yeh.paishou
Changoeic
CH'ENG-TE
LGAN
Hs0an?hua
???
?;) TIN-CHUAN
/ (NING-SIA)
A /
?
LAN-CHOU
Hsin?hsien
S
Futhin
CHIA-NU-SSU
Hu?li
OK1AN
Chin?hsien
?f
' Ch'in?nuangtao
,
TieMtsl
PAOTIN -
P E
hih.rnen
(Shihchiachu ng)
u?IL,
USSU ZONE
OF OCCUPATION
OF JAPAN
Ta.ku
GULF OF
11 Arthur
fai.k11 Tek/**
? TSINA cc
In?fen C.7
Cliangthiq Ant ne
lisin.yang?:-Aislithsian
Po-
K A NSU 1 I
Chin?a?,-?............E- ? ,..?' ., Tung..kuan/
Tienshui /Mt
' Hsier,yan
"vs
HSI-A.?1.78i L/c'Ya 8 Cheng?hsten KAI_F N",
%--, sr--gsuchou
SHENSI '.
\.? c.....?_..1....CI /
' ' 11 0 N A N., ...; ?,.; '
???... ,...
.%. ) /I .k, , .,/ '''f-ri-e::1'11'nu
?
\--'s';, 1....-, '----,. -3..`...1........?:
. . La?..Mo-k'ou ... ...,- .--..r.lo
? _3, 1.4 II?.0 ?chi"
?.4 \,
on s, A
HAN\CE.;ANKIN
Li
oCH'ENG-T U
SZECHWAN
Chungking
: H E 11
/
1-ch'ang'
Isingtao
YELLOW
SEA
U S ZONE
OF OCCUPATION
JAPAN
c,
CHINKIANO
CHANG-SHA
Ch-ho 11
UN AN
Henglan
Kinhwa
.CH EK 1 ANG
Kuei.1.-, " ( ,Wenchow
) K 1 A NI 0 1 ...
S ... J.
) l ?Namp'ing
"`..., '-'
.-. oKamhsien FUKIEN
.
-...---:: (.roCh'ang-t'ing FOOCHOW
.:-.) .?...
I,' ' .'?-?
? Talc us
'N.- K W A N G.,..I.,..0 N G 4'1 \
Wii-chou
CANTON/.,
/ / Swatow.
/
Sams ui %It
KUEI-LIN
lJtAchou
i?pin
'ANGSI
INDOCHINA
? P'-?
CHINA
SEA se
GULF OF ioNKIA,
SOUTH CHINA
110
SEA
115
120
CHINA
necessarily correspond In all cases to the boundaries recot
nized by the U.S. Government
CONFIDENTIAL
The international boundaries shown on this map do not
AREAS, 1 AUGUST 1948
COMMUNIST CONTROLLED AREA
COMMUNIST CONTROLLED
SCALE 1:16.400000
0 100
KILOMETERS
MILES 300 400
o 100 220 300 400
125
50
45
40
35
30
25
20
109136 map Branch,
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
JAPAN
absence of adequate grievance procedures, the 2,500,000 gov-
ernment workers who no longer have a strike voice may be
forced by continuing inflationary pressures to align themselves
with the Communists in the hope of obtaining wage relief.'
CHINA
The worsening militau situation of the Chinese National
Government may be expected to continue through the early fall
and winter months. In north and central China, recent Commu-
nist successes resulted from hit-and-run tactics. Communist
dispositions around the long-isolated provincial capitals of
Tainan and Taiyuan, which must now be supplied entirely by
expensive air lift, may force the capitulation of these cities
during the coming winter. The withdrawal of Nationalist troops
from the Nationalist-held corridor between Tientsin and Chinhsien
may result in the loss of the vital Kellen coal mines. These mines
supply more than half the coal for both private and industrial use
in the north China cities and in the lower Yangtze valley. In this
delicately balanced military situation, the Nationalists must face
the constant possibility that the large and powerful Communist
forces in Manchuria could mount a dangerous offensive without
warning, a development which could spell the extinction of Na-
tionalist power in all of Manchuria and north China.
PHILIPPINES
Serious disturbances may occur after
15 August (the deadline for the dissident Huks to surrender their
arms under terms of a government amnesty offer) because of
the Huks' failure to turn in their arms and accept the general
terms of the government amnesty. The Huks are now, laying
down terms to the government under which they would accept
an amnesty. They are demanding non-surrender of arms, re-
placement by Huk sympathizers of Constabulary Chief General
Castaneda and other government officials; repeal of the parity
- 13 -
SECRET
?
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET
BURMA
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
PRTLIPPINES
LW (which give; US citizens certain economic rights equal to
those of the Fil.,pinos),,and the removal of all US air and naval
bases in the Phlippines. A serious split within the Philippine
Government nu 7 result from the Charges of Secretary of Na-
tional Defense ItupertolKaxigleon that the "government is being
sold ant" and fiat following the amnesty deadline of 15 August,
the internal defense forces of the Philippines will adopt a
strong policy. Kangleon further charges that judge Antonio
Quirino, the President's brother and chief negotiator with the
Huks for the amnesty terms, is a Communist who deliterately
engineered the present critical situation.
The Burmese Government is being threatened by in-
surgent units. The recent expulsion of a large faction of the
Peoples' Volunteer Organization (PVC)) from the Anti-Fascist
Peoples' Freedom League (AFPFL), the government party,
has resulted in alarming desertions from the Burmese mili-
tary forces. In particular, two army battalions have disavowed
their allegiance and, probably with assistance from Commu-
nist insurgents, have started toward Rangoon, with the objective
of overthrowing the AFPFL Government. The Burmese Gov-
ernment has requested military assistance from the UK, which
has thus far been withheld. However, unless the Government
becomes completely demoralized, it should be able to hold
Rangoon. The units marching on the city appear to be poorly
organized or disciplined. The Government's position is clearly
threatened but it cannot be considered hopeless at least until
the ability of loyal Government forces to resist a major attack
has been tested? It is likely that the present Government will
continue, at least temporarily, as the de jure Government, but
with little effective control over most of central Burma.
- 14 -
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
SECRET.
WESTERN BEMISPHERE
CANADA
Continued close c 4.. -ration between the US and Canada
Is expected from the decisive election of External Affairs Min-
ister St. Laurent to leadership of the Liberal Party. His elec-
tion ensures a continuance of the Mackenzie King Government's
foreign policy, particularly as it relates to the principle of
US-Canadian cooperation for Northern Atlantic security. St.
Laurent, a French-Canadian and the future Prime Minister,
will draw the important support of nationalist Quebec Liberals
upon whom the Party relies for its dominance in the House of
Commons.
PARAGUAY
President-elect Gonzalez is expected to be inaugurated
on 15 August as scheduled, probably with the protection of the
army. Despite government precautionary efforts, acts of vio-
lence may be attempted during the cere money by anti-Gonzalez
factions within the country, exiled Paraguayans who are said
to enjoy the tacit support of the Peron Government, and Peron-
1st undercover agents. Overt interference from Argentina,
however, is not anticipated.
- 15 -
SECRET
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
DISTRIBUTION
1 The President
2 Secretary of State
3 Chief of Staff to Commander in Chief
4 Secretary of Defense
5 Secretary of the Army
6 Secretary of the Navy
Secretary of the Air Force
8 Chairman, National Security Resources Board
9 Executive Secretary,National Security Council
10 Assistant Secretary of Navy for Aix
11 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 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, Research &
Intelligence
25,26,27,28,29. Director of Intelligence, General Staff, U.S. Army
30,31,32,33,34. Chief of Naval Intelligence
35,36,37,38,39. Director of Intelligence, U.S. Air Force
40 Director of Security and Intelligence,Atomic Energy Comm.
41 Executive Secretary,Military Liaison Committee,Atomic
Energy Commission
42,43,44,45,46 CMel,Acquisition & Distribution Division,01CD,DeptState
47 Director, Federal Bureau of Investigation
48 Secretary, Joint Chiefs of Staff
49 Chief, Policy Planning Staff, Dept State
50 Secretary of State (Attention: Mr. Barnes)
51 Deputy Director, joint Intelligence Group, joint Staff
52,53 Secretary, joint Intelligence Group, Joint Staff
54 U.S. Air Force Representative on Joint Strategic
Survey Committee
55,56. . . . . . . Secretary,State-Army-Navy-Air Coordinating Committee
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4
U. 8. GOVERNMENT PRINTING OFFICE
26:11-8-1948
Declassified and Approved For Release 2013/05/22 : CIA-RDP78-01617A002000130001-4