WEEKLY SUMMARY NUMBER 40

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A002100190001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 27, 2016
• Document Release Date: July 18, 2013
• Sequence Number: 1
• Publication Date: March 4, 1949
• Content Type: REPORT

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COPY N.
1 WEEKLY SUMMARY
Number 4 0
? 4 MAR 1949
Document No.
NO CHANGE in Class.'
!WP7, DECLASSIFIED
Lass. CHANGED TO: 'TS
DDA Memo, 4 Apr.77
Auth: DDA R7G. 77 1763
Date:
linr By: CV/
'Mk
CENTRAL INTELLIGENCE AGENCY
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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
Page
HIGHLIGHTS 1
WESTERN EUROPE
2
EASTERN EUROPE
5
NEAR EAST - AFRICA
7
FAR EAST
9
WESTERN HEMISPHERE
12
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HIGHLIGHTS
It has become increasingly clear during the past
week that the strenuous efforts of the USSR to forestall
the Atlantic Pact are defeating themselves. Not only have
these Soviet efforts failed to deter Norway and Denmark,
but they have tended to strengthen support for the Atlantic
Pact in France and Italy (see page 5). The recent speeches
by Communist Leaders Thorez and Togliatti, declaring
that Western Europeans would welcome invading Soviet
forces, have been followed by a call for increased Commu-
nist militancy, suggesting that greater emphasis will be
placed upon Communist sabotage and subversion in the
future.
The dogged refusal of the Dutch to restore the
leaders of the Indonesian Republic to governmental author-
ity has continued during the past week to keep the Indo-
nesian dispute in a deadlock (see page 9). Republican
leaders point out that this refusal conflicts with the UN
Security Council's 28 January resolution and prevents them
from legally participating in the proposed 12 March round
table conference at The Hague. As a consequence of this
new impasse, the dispute will probably be brought before
the Security Council once again. Meanwhile, Belgium and
Luxembourg are displaying a growing anxiety about the
steady drain upon Dutch finances entailed by the Indonesian
problem and about the wisdom of proceeding with measures
which would make the Benelux economic union fully effective
(see page 2).
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WESTERN EUROPE
Benelux Union Development of the Benelux economic union
may be retarded seriously by the prolonged
Dutch impasse in Indonesia. Belgium has always been reluc-
tant to share the burden of the less favorable economic and
financial conditions in the Netherlands. The lack of progress
toward a solution in Indonesia and the consequent heavy drain
on Dutch finances have augmented Belgian anxiety about em-
barking on a full economic union with the Netherlands by 1 Janu-
ary 1950, the present target date. Further measures for
establishing a full economic union will be discussed at a
10 March meeting of the Benelux ministers. If no solution
to the Indonesian dispute is in sight by that time, the Belgian
and Luxembourg ministers will hesitate to make any definite
commitments, and it is thus increasingly doubtful that Benelux
will have progressed much beyond a limited customs union
by 1950. Political considerations, however, may force the
establishment in name only of an economic union, with imple-
mentation delayed until economic conditions in the Netherlands
improve.
GERMANY
Status of Berlin As one of the perinheral results of the
Berlin blockade, the question of the re-
lationship of western Berlin to western Germany is becom-
ing more pressing in its effects upon both German morale
and over-all occupation policy. The economic and financial
burden on western Germans and Berliners of maintaining
the blockade is creating political pressure for making west-
ern Berlin the 12th Laender in the new west German state.
Presently, more than half the bizonal administrative budget
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GERMANY
for 1949 is earmarked for the relief of Berlin. Thus, resent-
ment is increasing on the part of the west Germans over the
heavy financial obligations which they feel have been imposed
by the occupying powers; this resentment is being expressed
by demands to include west Berlin in west Germany, a solu-
tion bitterly opposed by the French. The citizens of Berlin,
although determined to continue resisting the Soviet blockade
to the limit of their economic and financial resources, are
seeking a more formal assurance of security than that offered
by the airlift. They, too, would like to have western Berlin
Incorporated into western Germany. West Berliners are
acutely aware of their crucial role in the east-west struggle
and feel they should enjoy maximum security in return for
the risk they have assumed in cooperating fully with the
western powers in their decision to run the Berlin blockade
Indefinitely. Meanwhile, the west Berliners are magnifying
their financial difficulties in the hope of hastening the intro-
duction of the western mark as the sole currency in western
Berlin; such a step, they feel, would greatly increase the
possibility of later incorporation of Berlin into the new west
German government.
TRIESTE
Italian Nationalism Growing Italian nationalism will make
rapprochement between the Italians
and Slovenes in Trieste more difficult and threatens to
complicate administration of the area. Italian officials in
Trieste are opposing the inclusion of the Slovene minority
(some 20%) in the local administration. Italians regard
the forthcoming Trieste elections as an unofficial plebiscite
on the future disposition of the city. To prevent competi-
tion among pro-Italian parties, Italian officials in Rome
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TRIESTE
favor a single electoral ticket composed of as many of these
parties as possible, including even neo-Fascist groups. Such
a policy, if agreed to by the Italian parties in Trieste, would
alienate both non-Communist Slovenes in the area and Italians
with moderate leftist leanings. Such an emphasis on nation-
alist issues would also heighten Italo-Slovene racial antagon-
ism, which is already being exploited by pro-Yugoslav Com-
munists. Moreover, accentuation of the nationalist issue will
make administration of the area more difficult whether by
US-UK military forces, by a UN governors or by the Italians.
FRANCE
Inflation Ends The inflationary trend in France appears to
be drawing to a close. if prices continue
to decline and the Third Force Government can follow through
with economic measures already initiated, France has an
excellent chance of attaining by spring a degree of economic
and financial stability that will permit ECA aid to be used
more for long-range constructive projects than for immediate
prevention of economic colipase.
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EASTERN EUROPE
SOVIET UNION
Propaganda Offensive Strenuous Soviet efforts to forestall
the proposed Atlantic Pact are, by
their very intensity, generally producing results opposite to
those desired by the Kremlin. The recent speeches by Com-
munist Leaders Thorez and Togliatti can be expected, if
anything, to intensify existing support in France and Italy
for the Pact. By publicly asserting that Communists in these
countries would welcome invading Soviet forces, these leaders
hoped to increase the fear of war and of Soviet occupation d
Western Europe and also to demonstrate the unreliability of
both France and Italy as prospective Pact members. This
type of attack, however, tends to reinforce other factors that
have been weakening Communist influence as a political force
In France and Italy. Moreover, Communist leaders, by call-
ing for a return to Communist militancy comparable to that
CL the late 1920's, are preparing the way for greater emphasis
on sabotage and subversion.
Meanwhile, increased Soviet propaganda pressure on
Scandinavia iz also having little effect. The USSR may soon
revive the Spitsbergen issue by asking Norway for assurances
that no military bases will be built in the Spitsbergen archi-
pelago. The Kremlin will probably claim that any defense
preparations in the area would be a violation d the Spitsbergen
Treaty of 1920. The Kremlin, anticipating Norwegian rejection
CL the Soviet-proposed non-aggression pact, is already accus-
ing Norway cl "aggression" and may use this as an excuse
for demands on Finland, possibly by proposing joint Soviet-
Finnish defense discussions. These prospective maneuvers
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SOVIET UNION
probably would not change Norway's desire to join the Pact,
and Finland's present Social Democratic Government would
probably reject any such Soviet proposals. The Finnish Govern-
ment may be strengthened by the inclusion of representatives
of other non-Communist parties and thus be prepared to offer
stronger opposition to future Soviet demands.
Merchant Shipping The USSR is attempting more and more
frequently to force the masters of foreign
vessels to open safes and sealed envelopes during calls at
Soviet-controlled ports. Such incidents have involved merchant
ships of the US, the UK, and other western powers. The USSR
probably hopes to obtain intelligence which would disclose the
disposition of western merchant shipping if hostilities broke
out.
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%AI 7*all W16111%111 I %.011%1VV "%mimic.=
1 March 1949
11184
PALESTINE
\\ Approximate area under Israeli
\ civil or military control,
1 March 1949
Partition Boundary las accepted by the United
Nations Grinieral Assembly, Nov, 1947)
International Boundary
Standard Gaups Railroad NMI
? Narrow Gauge Railroad Olivl
First Class Road
Second Class Road
Oil Ape Una
JiniriNi Communal Area
10
20
VO Milea
10 20 30 Kliematers
WV"
STAT
11184 Map Branch. CIA, 3-49 CIA Reproduction STAT
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1
NEAR EAST - AFRICA
PALESTINE
Armistice Results The military changes wrought by the
Israeli-Egyptian armistice have not,
In practice reduced the effective military control over the,
Negeb which Israel gained in its latest military offensive.
The armistice providdd for: (1) the release of the Egyptian
brigade at Faluja (already returned to Egypt); (2) the demili-
tarization of a neutral zone around El Auja; and (3) the with-
drawal of all but "defensive forces" by Israel from the
western Negeb and by Egypt from both the Gaza coastal
strip and from Egyptian territory east of the El Auil-El Auja
line. Although this partial demilitarization of the Israeli-
Egyptian border areas will give each state a greater feeling
of security against sudden aggression by the other, the reten-
tion of Israeli "defensive forces" in the Jewish settlements
will assure Israel of continued control of the western Negeb.
Moreover, agreement on these military changes, despite
Egyptian claims to the contrary, will probably set the pattern
for the territorial division of Palestine in the final political
settlement.
The armistice made no changes in the disposition of
Arab and Jewish forces in the eastern Negeb. Beersheba
was omitted from the armistice provisions on the grounds
that its control would be determined by a separate arrange-
ment between Israel and Transjordan. Any changes in north-
ern and central Palestine will depend upon the conclusion of
Israel's current negotiations with Transjordan at Rhodes and
with Lebanon at the border town of Ras Naqura, as well as on
any arrangements which may be made with Syria (and possibly
Iraq). The major issue of the Ras Naqura negotiations is the
withdrawal of Israeli forces from southern Lebanon. At Rhodes,
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PALESTINE
the Transjordan delegates are believed ready to sign a
straightforward agreement formalizing the present military
situation in central Palestine, although there is some doubt
how such an agreement can be reached without the concur-
rence of Iraq which controls north central Palestine and
which, like Syria, has shown no enthusiasm for any kind of
negotiation with Israel.
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FAR EAST
CHINA
Disunity Acting President Li Tsung-jen is making some
progress in undermining the influence of General-
issimo Chiang Kai-shek in the operation of the National Gov-
eminent. Chinese Communist Leaders Mao Tse-tung and
Chou En-lai have granted an interview to Li's peace mission,
which reports that the Communist leaders have agreed in
principle to the reopening of certain lines of communication
between Communist and Nationalist China. A Communist
broadcast has indicated that formal peace negotiations proba-
bly will begin shortly. Li's indefatigable efforts to make
peace have won him growing popular support in Nationalist
China, and he has shown political astuteness in persuading
recalcitrant Cabinet President Sun Fo to come to Nanking
from Canton for the opening of the Legislative Yuan. Des-
pite these gains, however, Li may be forced into some sort
of compromise with Chiang as long as the latter controls
the bulk of the National Government's monetary reserves
and banking facilities.
INDONESIA
I.
Deadlock Continues The Indonesian dispute will probably
once again come before the Security
Council as a result of the I March report by the UN Com-
mission for Indonesia which stated that no progress had
been made toward Republican-Netherlands negotiations for
establishment of a federal interim government. The major
obstacle in reaching a negotiated settlement continues to
be the Dutch refusal to restore Republican authority in
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INDONESIA
Jogjakarta, with: (I) the Netherlands Government firmly
maintaining that such restoration would mark the return
to chaos and the end of law and order recently gained through
Dutch "police action"; and (2) Republican leaders contending
that unless they return to Jogjakarta they cannot speak with
sufficient authority to stop guerrilla fighting. Since the Dutch
position is in conflict with the 28 January Sc resolution instruct-
ing the Dutch to deal with a restored Republican government,
the Netherlands Government will appear at a distinct dis-
advantage before the SC. Pressure from the Asiatic states
will compel the SC to reaffirm its January resolution, an
action which has already received strong US and UK support.
In fact, all parties except the Dutch insist that the Republican
government be restored as a negotiating authority. Under
these circumstances, the SC will probably instruct the UN
Commission for Indonesia to seek a solution resolving this
impasse and will agree to an extension of its timetable for
establishing an Indonesian government. Indications that the
Dutch would be receptive to the restoration of Republican
governmental authority, in northern Sumatra suggest the
possibility of a compromise along these lines.
SIAM
Abortive Coup Although Premier Phibufs Government
thwarted the 28-27 February armed revolt
Inspired by ex-Premier Pridi, tension in Bangkok remains
high and hostilities may be renewed. Phibul las used the
attempted coup as an excuse for removing General Each (a cor-
rupt army strongman intensely disliked by the pro-Pridi navy)
from control of the Bangkok garrison, but this step will only
partially satisfy Kach's bitter opponents. Thus, vahile Phi-
bul would like to rid himself entirely of his politically
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SIAM
embarrassing ally, he cannot afford to lose Kach's army
support while the navy is still exerting strong pressure
against his regime. The possibility of renewed hostilities
between army and navy factions makes a political solution
to the present situation particularly desirable. Therefore,
Phibul may be prepared to make further concessions to the
pro-Pridi opposition.
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WESTERN HEMISPHERE
Caribbean Tension Despite the success of the Council of
the Organization of American States
(COAS) in achieving a temporary settlement of the Costa
Rican-Nicaraguan dispute, the Pact of Friendship signed by
the two countries will do little to alleviate tension in Central
America. By urging that any similar difficulties be resolved
In the future by consultation between the two Governments,
COAS has merely postponed solution of the basic disagree-
ments between Somoza's Nicaraguan dictatorship and the
"democratic" regime of President Figueres in Costa Rica.
Although COAS fully exposed Somoza's complicity in
the December 1948 revolt against Costa Rica, Nicaragua has
nevertheless profited from the settlement. Somoza can point
to the agreement as proof of his willingness to negotiate;
furthermore, as a result of the negotiations, he has achieved
his principal objective in supporting the Costa Rican resolu-
tionaries, namely to forestall or at least delay a revolt against
himself by the Costa Rican-based Caribbean Legion.
Costa Rica, on the other hand, remains in the same
Insecure position with regard to Nicaragua as it did before
COAS intervened. The settlement provides no adequate
guarantees against future action by Nicaragua. Moreover,
Costa Rica has in effect been ordered to expel the anti-Somoza
Caribbean Legion. President Figueres is therefore faced with
these alternatives: (1) if he disbands the Legion, he loses his
only protection against Somoza and the Calderon Guardia rebels;
and (2) if he allows the Legion to remain, he will be subject to
continued Nicaraguan pressure for its removal.
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Peru-Colombia Mounting tension between Peru and Colombia
may lead to some violence, but it is unlikely
that full-scale warfare will result. For weeks, the Colombian
Government has unsuccessfully sought safe conduct for Haya
de la Torre, the fugitive APRA leader now in sanctuary at the
Colombian Embassy in Lima. Colombia is accusing the Peru-
vian Government of deliberately seeking an international
incident in order to distract attention from Peru's desperate
domestic economic troubles. The Foreign Minister of Colom-
bia is reportedly giving serious consideration to severing
diplomatic relations with Peru and referring the matter to
the Organization of American States. In the military field,
Colombia has concluded an informal agreement with Ecuador
against possible aggression and is quietly reinforcing garri-
SOnS along the Peruvian border. There are no indications
that Peru has taken any countermeasures.
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DISTRIBUTION
1
2
3
4
5.
6
7
8,70
9
10 ... .. ?
11,69
12,13,14. . ? .
15,16,17. ? ? . ?
18. .
19
20
21.
22,23,24
25,26,27,28,29,
30,31,32,33,
35,36,37,38,39,
40,41,42,43,
45,46,47,48,49
50
51
52,53,54,55,56
57
58.
59. ? . ?? ? ? ? ?
60. .. .. ? ?
61
62,63
65
66,67
68
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The President
Secretary of State
Chief of Staff to Commander in Chief
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, U,S?Army
Chief of Naval Operations
Chief of Staff, U.S. Air Force
Director of Plans and Operations, General Staff,U.S.Army
Deputy Chief of Staff (Operations) U.S. Air Force
Deputy Chief of Naval Operations (Operations)
Director of Plans and Operations, U.S. Air Force
Special Assistant to Secretary of State for Research
and Intelligence
Director of Intelligence, General Staff, U.S. Army
34.
Chief of Naval Intelligence
44.
Director of Intelligence, U.S. Air Force
Director of Security and Intelligence,Atomic Energy Comm.
Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
Chief,Acquisition & Distribution Division,OICD,Dept?State
Director, Federal Bureau of Investigation
Secretary, Joint Chiefs of Staff
Chief, Policy Planning Staff ,Department of State
Secretary of State (Attention: Chief, Policy Reports Staff)
Deputy Director, joint Intelligence Group, joint Staff
Secretary, joint Intelligence Group, Joint Staff
US Air Force Representative on joint Strategic
Survey Committee
Secretary, State-Army-Navy-Air Coordinating Committee
Administrator, Economic Cooperation Administration
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1
U. S. GOVERNMENT PRINTING OFFICE
' 2631-8--1948
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