WEEKLY SUMMARY #99

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002300150001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 27, 2016
• Document Release Date: February 21, 2013
• Sequence Number: 1
• Publication Date: April 21, 1950
• Content Type: REPORT

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C WEEKLY SUMMARY
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Date: 31-1-'1 9 ' gy; 0 1 33
CENTRAL INTELLIGENCE AGENCY
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SE?RET
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I
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.
I
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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HI:GHLIGHTS;,,
Page
1
`WESTERN
EUROPE .............. .
2
EASTERN
EUROPE ,,,,,,,,,,,,,
5
NEAR EAST-AFRICA ...............
8
FAR EAST ............................
10
WESTERN HEMISPHERE ............
14
ARTICLE:
North Atlantic Treaty
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As the North Atlantic Treaty powers prepared to'
discuss the difficult problems connected with financing an
effective instrument-for the defense of Western Europe
(see page 16); 'Germany's future role in these efforts re-
maihed undetermined in the face of anticipated delays in
German acceptance of limited membership in the Council
of Europe (see page 2). Meanwhile, French and Italian
Communists continued their preparations for more militant
action, with violent manifestions likely in France and a wide-
spread farm labor strike anticipated in Italy (see pages 2 and 3).
In the Near East, prospects for an Arab-Israeli settle-
ment have become more remote (see page 8). The UN Pal-
estine Conciliation Commission has bogged down in its efforts
to bring the protagonists together, and the armistice atmosphere
is becoming more strained. In Iran, unemployment may reach
critical proportions within a few weeks unless the government
'can obtain additional funds for emergency measures (see page 9).
In the Far East, progress was made toward stability. as
the Makassar revolt was suppressed in Indonesia, (see page 11)
and the Burmese Government scored successes against.Com-
munist dissidents (see page 11). The imminent removal of
Premier Long in Indochina, however, will further delay the
establishment of an effective non-Communist Vietnamese
government (see page 12).
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GERMANY
Council of Europe Internal political considerations are
likely to further delay German accept-
ance of associate membership in the Council of Europe.
Although Chancellor Adenauer is anxious to align West
Germany firmly with the Western Powers, he hopes to
avoid antagonizing the considerable body of opinion which:
(1) believes that membership on a limited basis is not
worth the risk of Soviet reprisals; and (2) is reluctant to
take a step which might partition the country irrevocably,
Moreover, Adenauer wishes to regain the loss in popularity
and prestige of his government resulting from such recent
'.Western actions, as the Franco-Saar conventions, suspension
of important Bundestag laws, High Commission criticism of
the government's economic policies, and US efforts to enforce
restrictions on East-West trade. Adenauer will therefore
attempt to use the Council of Europe issue as a lever to
obtain concessions from the West which will improve Germany's'
international status and weaken the position of extremist nation-
alist elements in the coming Land elections.
Communist Tactics The recent gradual shift in the French
Communist Party toward greater
militancy received official endorsement at the Party's National
Congress, The' speeches and resolutions attested to a tougher
attitude, a greater reliance on younger militants, and a ruthless
weeding out of all deviationists. While not excluding the use
of organized labor and the political means at, its disposal to
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 achieve its goals, the Communist Party has embarked on
a program of more'direct and vigorous action against the
French national defense effort, possibly including direct
sabotage and increasingly violent manifestations. More-
over, the Party may be preparing its cadres to carry out
effective illegal operations if it is forced to go underground.
Farm Strike As in France, the Communists in Italy are
relying increasingly on direct action in their
offensive against the government and the defense effort. As
part of this offensive, the Communists are currently organiz-
ing a general strike of farm day-laborers which may erupt during
the next month with violence so widespread that it may seriously
tax the power of the police. As the poorest, most underprivi.=
leged class in Italy, these farm laborers are not only susceptible
to Communist leadership but can easily be provoked to violent
action. This danger is aggravated by the presence of strengthened
neo-fascist contingents supported by large landowners determined
to resist demands for higher wages; Despite considerable agitation
and possible bloodshed, the Italian police will probably be able
to suppress the anticipated disturbances,
Wage Problem As the crucial parliamentary debate on the
1950 budget begins, the Labor Government
is meeting growing opposition from labor's rank and file on
its wage stabilization and compulsory arbitration policy. It
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is clear that the majority of unions affiliated with the. Trades
Union Congress (TUC) no longer feel that a policy of wage
restraint is justified. Moreover, the system of compulsory.
arbitration carefully built.up by the government has been
threatened by the Confederation of Engineers and Shipbuilders.
This union will decide by ballot whether to submit its wage
claim to arbitration or to resort to strike action. Although
the TUC General Council will postpone ?any:action on labor's
wage demands until after the budget debate, the wage question
confronts the Labor Government with a difficult decision. The
stability of the present government, as well as the slow progress
being.made toward economic recovery, would be endangered by
either the widespread strikes which might result from failure
to grant labor's demands or the inflationary effect of higher wages.
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 Crop Production Prospects for 1950 grain crop pro-
. 'duction In the Satellite orbit indicate
that there will be an increase of 6.1 million tons over the
record postwar crop of 1949. Total production, however,
will be about 92 percent of the 1935-39 annual average.
The largest percentage increase is in the Satellites, where
1950 production will probably exceed. 1949 by 8 percent;
in the USSR, production will probably increase 4 percent.
On the basis of the 1949 estimated rates of domestic con-
sumption with an allowance made for the increase in popu-
lation, there should be an increase of 4,5 million tons of
grain over the 1949 a mount available for export and stock-
piling. Of this, the Satellites' share will probably be
2,700,000 tens and the USSR's 1,800,000 tons. The Satel-
lites are likely to increase their stotkpiles.to insure
urban food supplies as they intensify the campaign to
socialize agriculture; the USSR will probably attempt to
export most of its.surplus.
CZECHOSLOVAKIA
Anti-US Action The continuing Satellite campaign against .
Western and specifically US influence has
focussed in Czechoslovakia with the closure of the US Infor-
mation Service and the launching of a major espionage trial
involving the US' Embassy, Such actions are designed to iso-
late the,population from the West, eliminate manifestations
of contiriuec1'.US interest in the area, and reduce the effectiveness
of US missions. " These aims have been more or less attained
in the Balkan} Satellites, where the Communist regimes were
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O CZECHOSLOVAKIA
established sooner and Western traditions and ties were
weaker, The developments in. Czechoslovakia, while thus
logical and inevitable, also reflect the unquestioned
O ascendance of. the ruthlessly pro-Soviet viewpoint in
Czechoslovak policy circles, of which the Clementis
resignation was the most notable manifestation, Although
:the Communist regime apparently intends to proceed with
its anti-US policy regardless of US reaction, even at risk
O of a break in US-Czechoslovak relations, it probably still
prefers to maintain a semblance of relations with the US
(as long as US representation is ineffective), in. order to
Q help preserve the fiction of Satellite independence and to
maintain the advantages accruing from a Czechoslovak
GREECE
Plastiras Coalition Replacement of. the Venizelos
O Cabinet with a three-party coali-
tion under General Plastiras at least removes the most
Q .immediate sources of instability and ineffectiveness in
the Greek Government, though the new Cabinet faces a
number of serious difficulties. Unlike its predecessor,
O .the Plastiras Cabinet will have a small parliamentary
majority in its own right and fairly widespread public
acceptance as a government representing the verdict of
the Greek people in. last month's elections. The new gov-
ernment should thus be able to make a real attempt to
O carry out the economic reforms associated with. the US
aid program and will be in a position to seek a further
normalization of political life through such measures as
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GREECE
.the early scheduling of local elections, governmental
decentralization, and the broadening of present amnesty
arrangements for former adherents of the extreme left.
The Plastiras Cabinet, however, will. be subject to severe
internal and external pressures. Venizelos' recent
maneuvers have laid the basis for future dissension. within
the coalition, and the somewhat. headstrong Plastiras may
find it:difficult to remain in agreement with his more
moderate: colleagues. Outside the Cabinet, the Palace and
right-wing politicians are still strongly opposed to Plastiras
and will grasp every opportunity to undermine him. At the
same, time, the deputies' of. the far left, who now appear will-
ing,to go along with. the new government, will. probably soon
break with it over the difficult amnesty and wage-freeze
issues, If Plastiras falls, other temporary government
.combinations might be tried, but none' is likely to. survive
long, and new national elections would probably soon become
necessary.
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SECRET
Peace Prospects Progress toward an Arab-Israeli settle-
ment has come to a virtual standstill and
prospects for breaking the impasse are poor. The recent
efforts of the UN Palestine Conciliation Commission (PCC)
have failed, and both the Arabs and the Israelis have temp-
orarily closed the door on direct negotiations. The Arab
states have in effect rejected the PCC's new approach in-
volving a combination of mediation and direct negotiations,
while Israel has further handicapped the PCC by publicly
denouncing Arab resistance to the Commission's conciliation
efforts. The recent elections in Jordan also revealed strong
sentiment against reopening negotiations with Israel. Mean-
while, the Arab League has adopted a number of resolutions
tightening-the.Arab embargo against Israel and has drawn
up a Collective Security Pact to strengthen the Arab position
vis-a-vis Israel.
With the possibility of peace and normal trade with the
Arabs once again blocked, Israel is attempting to raise the
specter of a second Arab invasion in order to mobilize world
opinion and to induce US Zionists to contribute even. more
generously to the current United Jewish Appeal.
Thus the vicious cycle of accusation and counter-accusa-
tion has been resumed, the belief that. an arms race exists is
promoting an actual arms race, and the armistice atmosphere
is becoming more strained. With peace .apparently unattainable,
the completely negative relationship which the Arabs appear
bent on maintaining is beginning to produce in Israel a psychology
of desperation which may in time provoke a violent resolution of
the current impasse. This feeling of-desperation will fade or grow
in proportion to Israel's success or failure in solving its economic
problems, which at present seem as formidable as ever.
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 Unemployment Problem Unemployment continues to be the
nation's most serious problem
and may reach critical proportions within a few weeks unless
the government can obtain additional funds for emergency
measures. During the winter the government made limited
efforts to care for the unemployed, but destitute peasants
from, the provinces continue to migrate to the cities, where
severe industrial unemployment has existed for some months.
For example, some 20,000 jobless are concentrated at the
single town of Karaj, outside Tehran. The USSR is making
strong propaganda efforts to exploit the situation, and Iranian
sources suggest that Soviet or Tudeh agents are encouraging
the movement of the peasants to the cities. Many peasants
will'piobably return to the land during summer, and others
Will-
.be given public works jobs, but more frequent and more
violent. demonstrations among the unemployed may take place
unless the government takes more effective measures than
it has in the past. Although Prime Minister All Mansur
stated that immediate steps would be taken to provide addi-
tional jobs in the construction of roads and railroads, it is
questionable whether the government can provide emergency
help on a large-scale basis wihbut making serious inroads
into funds earmarked for the Seven Year Plan. With the
1949-50, budget already showing a reported deficit of approxi-
mately 11 million pounds sterling, the government has
borrowed 2,900,000 pounds sterling from the Seven Year
Plan Organization to pay normal salaries and to finance
current relief projects, and maybe compelled?to borrow ..
further from the present remaining sterling balances of the
Plan for emergency relief purposes.
 P
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Party Purge Friction between the Stalinist leadership
and anti-Stalinist factions in the middle
echelons of the Chinese Communist Party may'soon lead
to a public purge of selei ted anti-Stalinist Party figures.
There is no reliable evidence, however, that the purge will
extend to the Politburo or to the major Chinese Communist
military commanders.
Party Chairman Mao Tse-tung has not wavered in
his Stalinist orientation and his leadership does not appear
.to be challenged either by such firm Stalinists as. the Party's
number two man, Liu Shao-chi, or such allegedly lukewarm
Stalinists as Chou EnRlai. Even if a dispute should arise in
the Politburo, it would probably be resolved, as in the past,
without violence.
Within the Party's military hierarchy, it is not
known whether any of the major field commanders are in .
fact anti-Stalinist. These military leaders, owing to the
size and importance of their various commands, are still
in a strong position in relation to the non-military Party
leadership, and the Peiping regime will probably proceed with
caution in efforts to restrict and reduce their authority further.
None of the military leaders seems a likely candidate for purg-
ing at least until the completion of military operations against
the Nationalists, which should see them safely through 1950.
Beyond that time, Peiping will presumably be reluctant to take
action against any one of the military leaders until assured
of the fidelity or neutrality of all the rest, and until con-
vinced that political indoctrination has made the troops loyal
primarily to Peiping rather than to their old commanders.
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INDONESIA
Makassar Revolt The complete collapse of the Makassar
rebellion following the landing of USI
forces in Celebes is an important step in. consolidation of
USI authority over East Indonesia and places the USI in an
Q advantageous position to further its ambitions to create a
unitary nation at a forthcoming conference with the states
Q of East Indonesia, East Sumatra, and the Jogjakarta Republic.
Failure of the USI to act energetically on the Makassar issue
might have encouraged East Indonesian leaders to persist
in their efforts and the rebellion might have spread to other
autonomous.elements _throughout'the islands. The USI has
Q now announced plans to station its forces throughout all
East Indonesia. While sporadic resistance from former
Netherlands Indies Army (KNIL) soldiers and local police
units may be encountered on Ambon, Northern Celebes, and
.Timor, it appears that no further serious challenge to USI
authority. will be offered by the East Indonesian Government.
Military Successes Having successfully concluded the
campaign against organized Karen
resistance northeast of Rangoon, the Burmese Army is now
concentrating its efforts against Communist dissidents con-
trolling areas along the Irrawaddy River. Government
troops are making good progress in their southward drive
and have hopes of capturing the Communist "capital" of
Prome before the mid-May monsoons, thus reopening the
Irrawaddy to north-south traffic. Communist forces will
probably.avoid a pitched battle and, like the Karens, strive
to maintain their forces intact for guerrilla warfare. Even
.though such resistance may continue following Prome's
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bhWthT
BURMA
fall, the successful completion of the Irrawaddy operation
will constitute a major triumph for the Burmese Govern-
ment. Burmese prestige at home and abroad will be en-
hanced; trade and communication on the most important
trade route in Burma will be re-established; and a severe
blow will have been struck at Communist hopes for, the
establishment of a "resistance base" and.tlie receipt of
.organized assistance from foreign Communist groups.
French Tactics The imminent replacement of Nguyen
Phan Long.as Premier of Vietnam by
the less popular Tran Van Huu is apparently the result of
French displeasure over Premier Long's determination
.that Vietnam prepare its own list of US aid requirements
without French advice. French interference with the free
.choice of government officials by the Vietnamese will
further impede efforts. to establish a stable non-Communist
government in Vietnam. Although the French may. remove
Long ostensibly because of the need for installing "a gov-
ernment. which can govern," actually Long has not been
given a .chance to demonstrate his ability, especially as
the Bao Dal regime has not received control over impor-
tant sources of revenue promised by the French as long
ago as 1 January 1949. Furthermore, the most Important
source of revenue--the customs tariff--remains in French
hands pending the outcome of the still, deferred Interstate
.Conference. The absence of even a rudimentary Vietnamese
parliament (promised In a decree of July 1949) has rendered
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INDOCHINA
the Cabinet highly susceptible to French pressures, princi
pally through Bao Dai, Premier Long has charged that the
French have paralyzed his government by doling out funds
.only at the price: of compliance with French policy. Present
French tactics, therefore, can be expected to alienate the
people of Vietnam even further. fiom Bao Dai and the French.
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 n.
Caribbean Unrest The recent approval by the Council
of the Organization of American States
of its investigating committee's proposed resolutions re;-
garding the Caribbean situation constitutes a further step
toward restoring tranquility in the Caribbean. The Council's
prompt and decisive action on all of the committee's recom-
mendations, including the threat to apply the sanctions en-
visaged in the Rio treaty, will probably curb future hostile
activities by the countries implicated in the current disputes.
Even the most effective implementation of the resolutions
adopted by the Council, however, cannot be expected to
solve such fundamental causes of Caribbean unrest as the
long-standing struggle between democratic and authoritarian
elements throughout the area and the limited opportunities
for individual advancement outside of political and military
activities. On the other hand, this second invocation of the
Rio treaty has strengthened it against more serious tests that
might arise in the future, and the high degree of solidarity in
the Council's voting (only Chile and Honduras abstained on
one resolution) is evidence of the unity on this matter among
the American states:.
Communist Gains Although Communist strength and influence
in Latin America remain generally at a
low level, .the gradually declining trend which became evident
in 1947 has reversed recently in at least three countries and
has leveled out in a number Of others. The Communists have
made political gains recently in Guatemala, El Salvador, and
Cuba, where major political parties have accepted Communist
collaboration. Such collaboration has reduced Communist
political isolation, making anti-Communist action more
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 0
difficult; has increased Communist respectability, thus
enhancing Communist ability to attract new recruits and
to collect funds; and has put certain politicians under
obligation to them. The declining trend has leveled off
in Brazil, Bolivia, and Chile, although continued repressive
action has at least prevented the Communists from making
gains. While it is true that these recent developments do
not represent a large change in Communist strength and
influence, they are significant as signs of possible future
additions to the already irritating though minor Communist
capabilities in Latin America.
STAT
 e
Q
A key issue at the forthcoming North Atlantic Treaty
(NAT) Council meeting will be the crucial problem of how to
finance plans for the defense of the North Atlantic area. The
staggering cost of even minimal defensive strength (estimated
at several billion dollars) and its possible impact on the. still
shaky European economy have opened the eyes of NAT mem-
hers- to the importance of adequate financing. The chief
participants realize that. the Brussels Treaty machinery
broke down at this point when the Foreign Ministers proved
.unwilling to put up enough money for the Defense Ministers'
plans. This problem must now be faced in the wider NAT
context, and in the atmosphere of greater urgency created
by Soviet atomic development and increased Soviet. power and
aggressiveness.
All participants. recognize that only the highest degree
of joint effort can provide the extensive rearmament required
and overcome the economic weakness of the European NAT
members. Despite this realization, however, progress will
.be blocked by continuing difficulties involved in fully integrat-
ing military efforts and European reluctance to make substan-
tial outlays for defense. Defense budgets are still prepared on
primarily national lines instead of being adjusted to common
.needs; there is still an effort to create national military self-
sufficiency through balanced forces; each nation tends to prefer
its own weapons, etc. Moreover, the various members are
not making comparable outlays for the common defense. To
meet. this problem, the Dutch and Italians, for example, have
suggested some form of common financial "pool."
While in general willing to undertake whatever limited
rearmament is within their capabilities, the Europeans also
insist on giving priority to economic recovery. Moreover,
r'I
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 n.
such countries as the UK, the Netherlands, and Denmark
(the first two already spend a large portion of their budgets
on defense) do not believe that they can spend much more.
This conflict between defense and economic recovery will
become a major obstacle if the European. defense effort
.increases much beyond its present scale.
It is, thus clear that transforming the NAT into an
effective military instrument will be far more difficult than
.the initial planning phase now finished. 'Concerned over
.financial problems, the Europeans will anxiously seek US
leadership and financial'support.. They will expect the US
to take the initiative in working toward a more coordinated
defense effort and in determining the relative emphasis on
economic recovery and defense. In this respect, they will
expect the US'to compensate for any major diversion of
European funds from recovery to rearmament.
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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
7......... 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., US Army
12,13,14..... Chief of Naval Operations
15,16,17..... Chief of Staff, US Air Force
18......... Assistant Chief of Staff, G-3, Operations
19. ......... Deputy Chief of Staff (Operations), US Air Force
20......... Deputy Chief 'of Naval Operations (Operations)
21......... Director of Plans and Operations, US Air Force
22,23,24..... Special Assistant, Intelligence, Department of State
25,26,27,28,29,
30,31,32,33,34. Assistant Chief of Staff, G-2, Intelligence
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; ........ Director of Intelligence, Atomic Energy Commission
51......... Executive Secretary, Military Liaison Committee
Atomic Energy Commission
52,53,54,55,56. Chief, Acquisition & Distribution Div.,OCD,State
57.'........ Director, Federal . Bureau of Investigation
.58......... Secretary, joint Chiefs of Staff
59......... Chief., Policy Planning Staff, Department of State
60.......... Secretary of State (Attention: Policy Reports Staff)
61......... 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......... Administrator, Economic Cooperation Administration
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Document NO. 0 O 1
NO CIANGE in Class. D
E?,~ECLPASSTf-77
C1acs. C " D 1O: a3 S C
l^,. L. .., 4P?, 77
Auth: L" 's7 '3
Date: 31-1-'t8 By: m%3.
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- - U. S. GOVERNMENT PRINTING OFFICE
2631-S---1848
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a