WEEKLY INTELLINGENCE SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A004400030011-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 23, 2016
• Document Release Date: February 25, 2013
• Sequence Number: 11
• Publication Date: October 20, 1950
• Content Type: REPORT

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SUMMARIES OF TRENDS AND DEVELOPMENTS
USSR
10 October 1950-
1. Slifitig-lailt-AMili=a_inLih2 reberi.t AustriaA
&nide= substantial interference in Austrian police
activity and the enforced participation of USIA (Soviet con,-
trolled industry) factory workers in the demonstrations -
will probably be repeated, at least to some degree, in Commun-
ist exPlOitation.of future economic grievances,
(rage 4 )
3. The Western Export Control Program iaLtL122...retle_d?We
IIIILL:trategio considerations predominant.. This has recently
been agreed to by the Foreign Ministers of US, UK and France. In
order that these controls be effective they must: .(1) be 'broad
? and deep enough in scope to affect the entire Soviet prophiction
-complex; (2) embrace all sources of the materials controlled;
and (3) be rigorously enforced.. If this is not done, all that
will be achieved is the creation of temporary looal shortages
which can be solved by concentration of 'Soviet technical and
industrial ability.
(Page 5 )
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EASTERN EUROPE
FINLAND
4. The USSR hasornoteated to the Finnish
Government the Aaland Islands Autonomy Bill now puggIng_ta
the Finnish Diet. It seems probable that the Government
will withdraw the bill, although such a move would not be
astute as far as domestic politics are concerned.
(Page 8)
5. The Social Democrats and Communists made
cant gains in the recent Finnish communal elections at the
expense of the center and right bourgeois parties. These
changes will not be reflected in the composition of the Govern-
ment unless it should be oierthrown by a parliamentary vote
of no-confidence.
(Page 9)
HUNGARY
6, Growing resentment among the people,,added to -
increasing:difficUlties within the Socialist system. has .
caused the Hungarian Communists to intensify their War.
mgmt_faiws enemies."
? .(Page 10)'
7. Reported low crop productionlnlinngary_incseaal
the severity of the Present, food situation. More effective
controls over both the consumer and producer will be' hecess?
ary. Resulting shortages loom As a restricting factor to
planned industrial expansion.
(Page 12)
POLAND
8, Disunity within the Polish Catholic Church has .
makegyincreased since last April. While there.has as: yet
been, no noticeable effect upon the Polish people, a continu-,
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'Etion of this trend will make it simpler for the State to
organize a "patriotic" pro-Government Catholic Church.
(Page 13 )
SPECIAL ARTICLE
9. Recent shifts in "line" and tactics amsag_got-
munist_parties reveal anxious efforts to contravene the
bolder, better organized defenses against Communist Fifth
column potentials taken or contemplated by various govern-
ments. The shifts also indicate efforts to reinvigorate
"united front" tactics to further the prime Communist goal
of retarding European defense and recovery after failure of
attempts at mass action to prevent delivery of MDAP arms
and to mobilize workers for strikes or slow-ups.
(PageiA. )
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EASTERN EUROPE
U.S
Continued Soviet overt aid to Austrian Communists
expected in event of new disturbances
While Soviet action in the recent Austrian dis-
orders is unlikely to foreshadow any fundamental change in
Soviet strategy in Austria, it indicates increased willing-
ness on the part of the USSR to use the numerically small
and ineffectual Austrian Communist Party to exploit economic
grievances, and to insure it a degree of success through
overt Soviet official aid. The Austrian Communist Party has
not, in the past, played an important role in Soviet strategy,
and the recent disturbances mark one of the very few care-
fully planned and coordinated action efforts between Soviet
authorities and Communist leaders. Overt Soviet assistance
in the disorders - substantial interference in Austrian
police activity and the enforced participation of USIA
(Soviet controlled industry) factory workers in the demon-
strations - will probably be repeated, at least to some
degree, in Communist exploitation of future economic
grievances.
The general purpose of the Soviet Union in ex-
ploiting the widespread and intense labor grievance over
the new Austrian wage-price law was probably to intimidate
the Austrian Government and people and to cause a temporary
disruption of the Austrian economy. The Soviet Union's
specific purposes were probably to: (1) increase the in-
fluence of the Austrian Communist Party in the labor move-
ment at the expense of the Socialists, who control the
overwhelming majority of the working class, and (2) bolster
the morale of the party and to give it practical experience
in relatively large-scale Communist disruptive tactics.
While the recent disorders have caused, through the loss of
manhours and a few isolated acts of sabotage, some damage
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to the Austrian economy and have probably increased the
morale of the Austrian Communist Party, there is little
likelihood of any substantia]. increase in Communist in?
fluence in the labor movement, .(SECRET)
Considerations affecting export
Against the background of the increasing world
tension dramatized by the Korean War, and plans for American
and European rearmament, the Foreign Ministers of the US, UK
and prance, have agreed to review the western export control
program in order to broaden its application. Although pro?
vision is made for consideration of the economic consequences
of such a program, it was agreed that strategic considerations
should be predominant.,
The present US security control program has not
been concerned with the export Of munitions. These are
controlled under separate legislation and procedures which
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had their origin in the neutrality legislation of the 19301s.
During the last two years arms shipments from western countries
to the Soviet Union and the Eastern European countries have
been small. This has been due, however, not to export con-
trol procedures, but primarily to the fact that the post-war
Soviet Empire had not been dependent on outside sources for
its military equipment. The effectiveness of the export
control program, therefore cannot be judged by the success of
separate and distinct controls munitions.
On the contrary, failure of the European countries
to adopt programs equivalent to that of the US, has largely
nullified US efforts. (There are many political and social
factors which make any degree of "economic warfare" dis-
tasteful to strong elements in Western Europe, particularly
those on the continent. This is particularly true in
Germany and Austria because of their occupied status.)
Materials needed for the continuing development of the over-
all Soviet military potential, such as industrial diamonds,
ferro -alloying metals, machine tools, oil production equip-
ment, copper, and bearings have been acquired by the Soviet
countries with little difficulty, although controlled by the
United States. The ease with which Czechoslovakia was able
to turn to Western Europe and Latin America for about two-.
thirds of its total copper (1-B) requirements, following
the break with Yugoslavia, exemplifies this situation.
The three basic defects in the present security
control program are: (1) the narrowness of the list of
commodities now under international control; (2) the lack
of participation of Switzerland, Sweden and Austria in the
parallel action program; and (3) ineffective implementation
of existing controls.
The first of these difficulties involves the con-
flict between the security aspects and the economic consequen-
ces of a wide area of control. The avowed position of the
Western European countries, and particularly of the UK, has
been that the economic recovery resulting from East-West
European trade is more important than the resulting gain to
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the Soviet war potential. The imPortance of this trade to
Western Europe has been greatly exaggerated. The total
value of trade between Western Europe and the Soviet Orbit
was approximately $8000000,000 each way in 1949, of which
less than one-fourth was comprised of items on the US 1-A
and 1-B lists. A large part of the critical imports usual-
ly classified as from "Eastern Europe " have come from
Yugoslavia, and Finland.- Furthermore, business with the
Soviet Orbit is only four percent of total Western European
trade. The overall importance of the potential loss of
trade with the Soviet Orbit is further minimized by the
recent marked alleviation of the dollar shortage, and the
calculated benefits of MDP, and present defense programs.
The position of Switzerland and Sweden has been
determined largely by their traditionally neutral position
and understandable reluctance to initiate controls when
other countries have not been taking effective action.
Sweden cannot be expected to curtail bearing shipments
while Italy is expanding them, and shipments from Western
Germany, (albeit largely illegal) continue. Neither
country can be expected to restrict shipments of machine
tools while the UK is shipping similar items, and Switzer-
land will not effectuate controls in the free port areas
as long as the goods are arriving from or through "co-
operating" countries. There have been indications that
both Switzerland and Sweden might be induced to cooperate
when and if effective action is taken by other countries.
Austria, from and through which large quantities of
strategic materials go to the Soviet Orbit, presents a
problem incapable of solution through parallel action
procedures.
Lack of implementation of controls is one of
the weaknesses in the export control program. Smuggling,
use of false and intermediate consignees, utilization of
the facilities of the various European free port areas,
and other procedures are used to evade the control mechan-
isms. Present enforcement procedures have not been effect-
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lye in preventing a large measure of Success in utilization
of these techniques..
In order to achieve a successful program aimed at
restricting the Soviet economic war potential, three import?
ant objectives must be attained: (1) The selection of items
must be of a scope which is sufficiently broad and deep to
affect the entire production complex of the Soviet pire.
(2) All important sources for the materials agreed upon for
embargo or quantitative control must be included in the
program. (3) The controls agreed upon must be rigorously
enforced, Unless all three of these elements are present,
the result will be only to create purely temporary localized
shortages which can be solved by Orbit concentration of tech?
nical and industrial ability. (SECRET)
EASTERN EUROPE
FINLAND
kaland Island Attonomm_Bill_usSR
The Finnish Government faces a new dilemma with
the recent protest of the USSR against the Laland Islands
autonomy bill now before the Finnish Diet. This is the
second such bill before the Diet, the previous one having
been withdrawn in 1946 following a similar Soviet protest.
The USSRts interest in the bill stems from the
fact that the islands are strategically located at the
mouth of the Gulf of Finland. These islands control the sea
route from Leningrad through the Gulf of Finland to the
Baltic Sea. Incorporated in the autonomy bill is article
six of the Aaland Guarantee Law of 1922, Article six, to
which the USSR objects and which today has only theoretical
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significance, provides that in the event the Aaland Diet
presents complaints or remarks regarding implementation
of the provisions of the law, the Finnish Cabinet would,
appending its own comments, forward them to the League of
Nations Council to enable it to supervise observance of the
provisions of the law.
The Soviet Union objects to the insertion of this
article in the autonomy bill on the grounds that auclh a clause
would not be in conformity with the armistice and Peace
Treaty provisions "guaranteeing complete Finnish sovereignty
over the Aaland Islands. ? Motivating the USSR's insistence
on this point is the fact that as long as Finnish sovereignty
is maintained over the islands they will not be remilitarized.
On the other hand, the Aaland Island Diet, which
must approve any autonomy bill before it can go into effect,
insists that this hypothetical international guarantee be
preserved despite the fact that the League of Nations is now
defunct. Although the Finnish Government needs the political
support of the Syedish People's Party, which represents the
interests of the Aaland Islanders in the Finnish Diet, the
Government is likely to pigeon?hole this bill. While such a
move would not be astute politically for the present Govern?
ment, past actions suggest that Prime Minister Kekkonen will
seek Soviet favor rather than risk,any possible consequence
of Soviet wrath. (SECRET)
Social Democrats and Communists am n in Finland
On the basis of eighty percent of votes already
counted in the Finnish Communal elections, held 30 Sept ?
1 October, the Social Democrats and Communists gained at the
expense of the center and right bourgeois parties. Compared
to figures for the corresponding elections in 1947, the
Social Democrats gained 3.3 percent and the Communists 2.3
percent while the bourgeois parties lost 5.1 percent. The
Communists showed sharp increases in urban areas.
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The urban gains of the Communists are due in
large measure to the small popular turnout for the voting.
As is usual in such cases, the Communists went to great
lengths to get out their vote and were successful. The
national gains of the Social Democrats and the Communists
reflect the growing lack of popular support in the nation
for the often weak and indecisive internal and foreign
policies of the incumbent coalition Government composed of
the bourgeois parties.
Although these returns do represent a significant
reduction in the popular mandate of the Government, no change
in the Government's composition can take place unless it is
overthrown by a parliamentary vote of no-confidence. Whether
or not such a vote takes place probably depends on the ability
and success of the Government to reach a satisfactory settle-
ment of the current general strikes. (CONFIDENTIAL)
HUNGARY
Class warfare in Egnma_a.ccelerated
Growing resentment against the regime and increas-
ing difficulties within the Socialist system have caused the
Hungarian Communists to accelerate their war against "class
enemies." Similar problems are being met in the same way by
Communists throughout Eastern Europe, Resentment has been
developing among those whose private interests come in con-
flict with the regime, such as the clergy, kulaks? government
officials and bourgeoisie, and even among the workers and
peasants, the alleged foundation of the Communist Party it-
self. Expressions of opposition, such as sabotage, slow-
downs, wage frauds, and spreading rumors have been met with a
wave of arrests which have touched every social and economic
group in the country.
In blaming the Social Democrats for generally
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fomenting dissension, the Communists not only excuse their
less enthusiastic rank and file Party members, but also
provide the rationale for arresting hundreds of Social
Democrats, ranging in status from factory workers to Cabinet
Ministers. Heretofore acceptable allies of the Communists,
the Social Democrats are now accused of actually being
opposed to the interests of the workers. In an attempt to
prevent the crystallization of worker resentment over pro?
duction increases and wage reductions, the Government has
sought to eliminate any remaining vestiges of independence
among the Trade Unions. Severe criticism of the Trade Union
leadership has resulted so far in purges among the low level
officials. At the top, Antal Apro, Secretary General, and
Jozsef Harustyak, President of the Trade Union Council have
recanted, but whether this will satisfy the Communists or
whether their removal will also be called for is still un?
detErmined.
Arrests of kulaks is, of course, a continuing
process, but the tempo has been increased during recent
months. Charges against the kulaks run the gamut from
possession of firearms to killing their own pigs. Alleged
conspiracies between kulaks and parish priests have provided
excuses for arresting a number of priests, monks, and nuns.
Not content with the relatively slow methods of
eliminating the middle class, the Communists are using hoard?
ing, rumormongering, speculating, and profiteering as
grounds for arresting members of this group. Furthermore,
it is reported that the background of each Government official
is being investigated and that a new purge will be,based on
such disloyal characteristics as middle?class origin.
A large?scale purge of career army officers was
touched off by the reported plot of a handftl of top
officers to turn part of the Hungarian army over to the
Yugoslays. The fact that these officers were accused of
working with "right?wing Socialists and reactionary clerics"
reveals the motive of the Communists: to link even though
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? artificially, all their opponents so that they can be more
easily eliminated, on the ground that they are all working
against the interests of the masses.
The intensification of the war against "class
enemies" was heralded in the speeches of Erno Gem, on the
? shortcomings of the economy, and of Jozsef Revai, on the
CUurch issue, which were made on 1 June before the Central
Committee of the Hungarian Workers Party. At that time
both men emphasized that the "enemy must be eliminated in
order for Socialism to advance. Blamed for every difficulty
the regime has encountered, including the food shortage,
production failures, the reluctance of the Catholic Church
to settle its differences with the State, and agricultural
failures, the "enemy" is not specifically identified, so
that the label can then be hung on anyone the Communists
wish to eliminate. (SECRET)
Poor crops in Emma, accelerate
tightenim_of food situation
tiAn
Hungary, primarily an agrarian state, and consider?
ed to be one of the most self.-supporting agricultural countries
in Europe has had continuing food shortages since April this
year. Latest weather conditions and expected harvests indicate
that no relief from this situation can be expected, and there
is strong economic evidence that rationing of certain basic
food items will be reintroduced.
Early losses of the vegetable crop have already
been noted in the high prices and scarcity of these commodi?
ties in the local markets. More severe losses resulting from
dry weather are expected for other crops, principally, corn,
potatoes, and sugar beets.
Because agricultural products presently represent
the main items of export, the effects of low production of
food and feed crops will necessitate strong action if commit?
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ments are to be filled. Reported early slaughtering of hogs
has undoubtedly been stimulated by the growing shortages of
feed. This will mean less available supplies for future
needs, and may be the beginning wedge for initiating rationing
in the economy.
The apparent good harvest of early grain crops will
not modify the severity of this situation. Increased consump-
tion of these crops must follow in order to substitute for
shortages of other food and feed supplies. The gains therefore
can not be measured in any possible surplus, since domestic
requirements will be greater.
This dislocation of planned agricultural production
will further reduce the declining standard of living in
Hungary, and undoubtedly affect the industrialization program
which presently is related directly to the expected exports
of agricultural products. Expected necessary action will
probably be directed towards tighter imposition of controls
and collection quotas of individual farmers, and more effect-
ive distribution measures for the urban population.
The most evident fact, as revealed by a weakened
agricultural economy, is how completely dependent is Hungary
on primary production for promoting industrial expansion.
The effects of this drought will be to decrease the potential
of Hungary as a supplier of economic goods to the Soviet
Union and adjoining Satellites. (SECRET)
POUND
piunitz increases in Polish Catholic Church
. "AU '
Disillusionment and dissatisfaction within the
Polish Roman Catholic Church, while still not developed enough,
to encourage the State to create some sort of "patriotic"
dhurchvhas,increased markedly since last April. There is
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disunity and irritation among the bishops because of what they
consider. Vatican policy favoring Germany, and there is dis-
illusionment among the clergy in their relationships with the
bishops. Simultaneously the Vatican is becoming more concerned
and displeased with the policies of the Polish Primate.
This scene of disintegration within the Polish Church
Itself is further supported by reports that the Primate is tired,
discouraged, and desires to resign. Behind the Primatets weaken-
ing is the fact that Cardinal Sapieha has broken with the Primate
and is supported by the majority of the clergy. Similarly,
Bishop Choromanski, who vas largely responsible for the negotia-
tion of the Church-State agreement, has reportedly gone over to
the side of the Government. To keep the process of disintegra-
tion movingl, the Government has held a series of trials of
certain clergymen in order to maintain the tension and fear
within the Church.
The effect of the increasing disunity in the hier-
archy and the disintegration of the Polish Catholic church's
once powerful leadership has been to ureate discord, a break-
down of discipline, and distrust between the bishops and lower
clergy. This will make it simpler for the State to organize,
at the time it deems propitious, a "patriotic", pro-Government
Catholic Church. So far there has been no noticeable effect
upon the people but undoubtedly confusion and disillusionment
will spread, making them more susceptible to the blandishments
of the Communists. (SECRET)
SPECIAL ARTICLE '
Shifts in "line" and tactics in the Communist Parties
Recent shifts in "line" and tactics among Communist
parties reveal anxious efforts to contravene the bolder,
better organized defenses against Communist Fifth Column
potentials taken or contemplated by various governments. The
shift also indicates efforts to reinvigorate "united front"
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tactics to further the prime Communist goal of retarding
European defense and recovery after failure of attempts at
mass action to prevent delivery of lea arms and to mobilize
workers for strikes or slow-ups.
The synchronized "line" claims "cannibal" American
imperialism is forcing an anti-Communist psychosis upon a
world rapidly returning to fascism through the repression of
civil liberties. This line cites as proof the following
governmental actions:
(1) Norway announced an "anti-traitor law,"
said to have been drafted shortly after the
Czech coup in 1948, which provides severe
penalties for treason in peace time for
groups or individuals working in behalf of
a foreign power.
(2) West Germany, Switzerland, and Belgium
adopted measures to discharge Communists
and "other anti-nationals" in public
office, an action in which the Belgian
Communists succeeded in persuading the
Socialists to join in denouncing as
"Hitlerian." The action will involve
some 500 Communists in Switzerland.
Some Paris newspapers have clamored for
like dismissals from the French Government,
which would involve thousands; "territorial
guards" similar to civic guards in Italy
have been planned; anti-sabotage laws have
been passed; Moch expelled many foreign
Communists, and there has been discussion
of outlawing the Party (considered improb-
able).
(3)
(4) In Italy, Interior Minister, Scelba, has
planned to establish civic guards and to,
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.increase the Public Security Forces by
12,000.in order to contend with the
"squadrismo de partito" (CP para-military
squads) which constitute a real menace to
the nation.
Prime examples of "United Front" tactics in labor
circles are found in factories, offices, neighborhoods, and on
docks in various countries of "Unity of Action Committees,"
This activity retains the same goal of disruption under a guise
of sweetness and light, as in Italy where Secchia, in urging
the formation of such committees) spoke of bringing triumph to
the workerst demands by "uniting Catholic workers, workers of
other parties, and workers of no party, strongly organized
from below as the only guarantee of any solidarity possible
of achievement among labor organizations themselves," but
exposed the usual political ax in the same speech by including
the statement that "the De Gasperi Government policy is one in
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which the expenses of the armed forces must be paid by the
workers with starvation wages."
These Unity of Action Committees differ both in com?
position and attitude from the Action Committees used to achieve
the Czech coup in 1948. The present Committees have been warned
against the use of violence because of possible repressive re?
taliation and have been advised to seek the aid of all workers.
The Communists have a talent for organization however, and with
little difficulty these groups could become regulation Action
Committees under the stress of angry workers ? such as exist
in the current break?down of labor?Confindustria negotiations in
Italy.
In presenting this milder attitude, the Communists
have somewhat overextended Leninist expediency. For example,
Togliatti recently spoke of Italy as "our fatherland," a term
usually reserved by Communists for references to the Soviet
Union. This same speech repeatedly appealed to the rich and
bourgeois to join the proletariat in national unity against
Italian subservience to American imperialism. Similarly,
Thorez at Gap called for a united and victorious participation
in a "holy war" against repression of workers, ending his
speech (surprisingly) ..."never was the triumph of the Church
nearer than in the days of great persecution against Christians;
so, today, a better world is nearer, a society where there will
be bread and roses for all." (SECRET)
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