BOOK III -- WEEKLY SUMMARY - 3 JULY 1947 (#55) THRU 30 DEC 1947 (#79)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A001900020001-8
• Release Decision: RIFPUB
• Original Classification: T
• Document Page Count: 372
• Document Creation Date: January 4, 2017
• Document Release Date: June 20, 2013
• Sequence Number: 1
• Publication Date: December 30, 1947
• Content Type: REPORT

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Np CHANGE in Class.
DECLASSIFIED
Class. CHANGED T0: T5-~
DDA Memo, 4 Apr 77
Auth: DDA RyG? 77 1763
_.
~f'he ~7ee~1~ ~a~~ra~a~ ~~11 ~?~ be p~a~b~sh~d Qa 2 j~~auaa~e
~`~e ~e~c i~s~e ?f a~ie ~J~T~eg~y Saa~a~a.rg ~ ~.p~ea~ ?n 9 ja~au~?
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the ~~~~~~t~e~ ~e~ ~~~~tt 1~~.~~~~ ~~ ~ea~~,~ ~!~aea~.~ Q~rh~ ?~~.v~ ~~~~iv~d
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The British Communists' recent all-out progaga~nda attack on
the UK Government and Labor party follows the Cominform line. The
capabilities of the British Communists, however, to sabotage the UK
industrial recovery program are limited.. The Communists will prob-
ably attempt to create and exploit labor discontent with a view to
hampering production; however, Communist penetration of the trade
unions is not sufficiently great to be more than a major nuisance prob-
lem. The loyalty of British labor to the Labor Government is beyond
question, and trade union and Government officials have for some time
been actively educating the rank-and-file regarding the nature of
Communism and its tactics. t~rogress in ousting Communists from
key union positions is already evident. This trend will probably be
accelerated as a result of the open Gommunist "declaration of war"
on Labor T~artq leadership, particularly if Communist trade union
officials overreach themselves in promoting the Cominform line.
I+torway's future foreign-policy is erected to incline more
definitely toward the Western Powers, although the Norwegian Gov-
ernment will paoceed cautiously in order to avoid antagonizing Ieft-
wing elements. The Norwegian Government appears; (1) to consider
? that the- prospects for economic recovery in trYestern Europe are good;
and {2) since the breakup of the C~'M, to recognize that a rapproche-
-ment betweercthc~East-and-~~est is unlikely at present.
EASTERN EUROPE
The actual formation of the long-predicted "free" Greek ~ov-
e i moment is in itself of comparatively minor importance. The 'real
significance of this development will lie in the manner in which it is
exp}oiteci by the USSIi.'andfor the Satellites. ~ Soviet or Satellite recog-
nition of the Markos regime would undoubtedly be followed by greatly
increased aid to the Greek Communists and would therefore give
them an immediate military advantage over the US-supported Greek
Government; but recognition would also invite serious involvement
with the US. 4f the Satellites, only Albania (which is not a member
of the UN and ig not recognized by the US) would have little to lose
if faced with US or Ule1 censure or action. In Greece, meanwhile, the
guerrillas, supported by artillery, are making a strong effort to~clear
and consolidate areas adjacent to the Albanian border.
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C~~~essi~~s c~~tai~a~d b ~~,~~Zacesl~~ra~i~, id*~ its ~~c~a~~t ~?~~~.
yn~~~i~.Z ~.g~~~~~t ~it~~ ~:~~~ ~3Sfa~. ~adi~a~~ t~~.t ~Z?~ ~~?~~Zi~a sti~~&
c~~sid~~~~ it ~~~:~ss~~?y t~ e~~~?~is~ s~~~ ~~s`~~aiaat ~a d~ad~ag ~~aitk~
tk~~ ~~~~Z:?~sZ~vaZ~ ~c~~~~~~~~~~t. ~~~~&aessZca~=i~, ~~~~aii~d ~~?~ ~
i~~~P. t? a.~~~~. d~Zi~~~i~s ~e~~~isi~g ~Qolo ~?~As~~~~ g~~ads ~~d
~O~a ?~cpi~c~.~ gads--~ fay Z~~~~ p~~~~~.t~,g~ csf ~a~itaY g~~ds the
t~~ Sr~~i~L ~~i?~a dad ~a~F~i~~aaZZy d~!~a~d~d. ~~~ Z3SSR r~~,y ~av~
~~difi~d its ~~siti?~ i~~ ~~d~~ Lc~ give the i~np~~ssi?a~ Lk~at ~.t has ~s~
~t~s~ti~~ ?f d~st~a~yi~g t~a~ ~~~~ia~aZ?~~~ e~~~?~~y ~~~I~i~k~ xs g~~.~~d
t~ ih~ ~~?~d~~Li~~e cif Z~.~~~ ~~.~titi~s of ~~~~s~~~ g?~is~. ~~d~~ the
t~~ ms ~f ~:~~ ~~g~~~~~~t, ~~r~Zd p~?fc~s ~iiZ g~~r~~~ ~.ZZ it~~s of ~x-
c~ar~g~ d t~~ ~~e~~?~sB?~atgs a~?~ g~?~~t~d ~ p~.~Li~~Za~Ey fs.~r~~?a?~Z~
~~i~~ f?~ ?~~.~~ ~~~. ~~~~~~~ th~s~: ~~~~~ssi~~s, f~ZfiZk~~nt ~f
g~~ ~g~~~~~t ~iZZ i~~~s~ a ~~~~~e st~~.i~ ~~ Ling ~~~~~usl?v~
e~~~~~y t OY~ IP~SIIY~I.,E
ST.~I.EEIViA`f'E 1d~I T~?E ~i'EST
A recent article by the Yeadfi~ ~o~iet economist, E. Varga ~
appears to reflect ~e Kreffiliai's recognition that an early atta~ment
df ~omz~a~~.st o?o~ecti~yes i~a f~ir~ west is onYikely. 'Y'he article there-
fore lays the b~,~se for a tactie;al retreat on th? prvpa~erada fronto
Alf~aough lae regents the official thence of i~vitable capitalist collapse,
V'axga wr~~tes that sucia collapse is by no ~,.eazas ima~iaaent and th~.t a
protracted s~.lena~.te between capitalisma and Coaramtxaaism is probable.
Varga', presea~t thesis, co~atrasts sharply wAth a previous
~o~iet Pine, which has for the past year been predictitag a severw atom .
nomic crisis in ~e US same. tiffie iaa 1~4~. 1n fact, ~ Cllr. Varga noW
~:o~xcedes that the ~S se~cial orde8', in contrast to $hat of ~testera
Europe, "fs stiYl Waite firma."
This admission tomes on special sigrnfficaaace when mewed in
the light of the doaninant ~o~et prop~.gazada line since the a~o?,mace-
? meat oa the ~Iarsh~.ll proposals. Iharisag She past summer and fall,
C?ora~muni~ spol~esmae~a have consiste~itly emphas~ed the necessity
of acceleratang a more naiYitant ~onamu~aist progrann. They appar-
emtly taave co~idered prompt aeon fn axaeeting the challenge of tlae
E'urapean ~~cover~v plan an urge~at necessity amd seegn to have sor~ght
a~a early ecoaaoamfc aaadpolitical showdo~-n with the :crest., Var.'s
cuaerent article, therefore, mtay &~e isaterpreted as recognition tl~~at
an earlyr Victory is unlikely; he ffiay be preparing ttae way for a ~ctf -
+cai retreat on the propaganda ffa?a~ait~
The Varga article also lays stress capon the "striving for
andepeaadeaace" of the peoples of ChYna and the colonial areas of
Asia. AYthonagh he is dubious as to the chances of an early "deaxao-
eratic" victory in Europe, Varga comforts his readers with the
obser~tion that "the ba?~ad Ynasse~ of the coloniaY wor?~ers anei
lseasants are strivi~, with decisive fo~cce toavard the fl lia~,uida-
tion of the colonial syste~-." Amo:~ag the j`slave-ovniiag economies"
of .tin America and Africa, hc~ever, Varga does cot foresee any
early "democratic" sucCeSSes.
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7Che ~'~~~ ~ic~e ~~~ well reflect ~ ~ez~al~ats ~eal~~,tf~
t2~t the px,~ec~ ~ e~~Y~ ~~~:~~l~t trlct?rir~~ i~ ~?e~tes~ Et~t~e
aye dlffil~.ishl~~ ~.rad tit ~. r~~~aff~,~g of ~ctlcs ~ ntece~saa~gr ~ tT~e
e~ea~t ~.at g~re~e~t c~~-ter~e~.su~es a~a.t the ~~cces~ ?f the ~ur~~
pe~.~ ~ecove~ ~~~~ f~.~. tc+ ~~ abet the c~~~~ed ~?estslt~a Any
ch~.~ge ~a tlr~a o~ ~ctlcs ~vlll tie ~~e~e~,ated, h~th fc~r l~tel ~d
eg?~.l ~?~~~.tl?~, n?t a~ ~~ alte~~.t~ere fenced ~.~?n the USSR,
~,~t ~,s ~e tga ac~~a~a.ce wig. ~, Drell f~~?~tul~ted ~al~a~a ~/h~.e ~e
~V"a~?~ article anal ~ ~te~tded ~ prepare ~.e ~r~a~t~ ~~-?rk
fir ~?~a~le'C~a~affil~t eet~acFt,~ l~ ~ester~a Ett~c~e c~.ri~ag the
c~~l~ ffi?~tha, it ~ n? may s~~ge~t~ ~~ rel~.tl?n f~ ~~ LFgSIt~~
we~~varti pres~wre, -
'1 -
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TIC PALES'TYNE S1`TUAq'IQ+Pi
The initial Arab reaction to the X7Ae decision on Palestine
has- followed the expected patkern of "spontaneous'L rioting. In
Palestine, these oeatbrea~s consist of ar~cned clashes between Arabs
and Jews; fn the Arab states, the~?e a~?e attacks oan Jewish aluarters
axed dennonstrations dgrected larfnna,rily against the t1S. Such mtani-
festations of popular feeling. r~aay be expected to continue as a pre-
liariinary to large-scale organized Arab resistance to partition,
'the Arab lseat~e is scheduled to secon~reane on 12 December to
complete plans for the defense of Palestine, bast concerted nnilitary
action .will probably be delayed until after the British withdrawal,
which is expected to beg~u early in 194.
'I`h: Arabs do x~ot inte~ad to establish a separate governr~nex,~ .
in the Arai"-state suctions of Palestine delineated icy the T1N and are
expected to bayco~t all effoarts of the 1JN comanZission charged with
.the transfer of authority f'rbny the Dritish to the new Arab and Jewish
states.
~ ~"Ieannwhite, evidence fs i~rcreasiang that the gTSSR intends to
ffiaB~e capital of the chaos resulting ffrortn atteffipts to implement
partitfo~.. ff troops from various countries are senat~to Palestine,
the 1JSSlt will aando~abtedly seel? to include a contingent of Soviet
troops specially traine?i for subversive political activifies. At pre-
sent, the DSSR. is tang steps t? establish its influence fns the area
by sending agents to Pale~t;~e slang with illegal immigraants. A
sizeabAe aauxnber of Soviet agents are reported ly included among the
bona fide innnnigr~aan$s on the PAN ~RESCR~T and PAPS Y't3I~, twa
ships under lPanaxa~ani~s. regis~:rg scheduled to sail for Palestine
from the Ruaxnania~e port o~ Const.~za between 10 and 15 December.
Space on the vessels. h~.s also b~~~n all.otted to the '6eewish Nta.rxist
~outh,ae a Fturnanian org2~i~atic~r Oriented toward 1VFoscow.
Its Palestine tine 1TSSR is reported to be worg~ mainly .
through. the illegal Jee~ish Stern Gang, with subsidies and recruits
dispatched frown the So~.et Union via Syria. The Connanaaaists are
expected soon to shift their Near East headquarters frow I~ebanorn
to Palestine, which will then becoane the center of Soviet operations
in the area.
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DIVERGENT HEMISPhERE ~TIEWS ON ANTI-COMMUNIST STEPS
Three major South American nations- -Argentina, Bra2i1,
and Chile --have shown strong interest in common measures aga.ins#
~'o~nYnunism by the countries of the Western hemisphere. These
co~~ntrtes are likely to introduce at the forthcoming Bogota Con -
ferencea concrete proposal for joint action. Also, at least four
other co~~tries- the Domianican Republic, EI Salvador, Nicaragua,
and Paraguay-dean be expected to favor joint action and to oppose
any attempt to keep the matter from being discussed at Bogotaa
Up to the present only Colombia, Cuba, and possibly Mexico seem
to side with the US position that anti-Communist measures area
matter for individual action,
The growing sen~imeat in favor of joint action might lead
to: (1) sharp division in the Bogota Conference; and (2) the re-
emergen+~e of the ABC (Argentina-Brazil-Chile) combination as a
counterforce to US influence in the hemisphere. ? While it is not
likely that a proposal f'or joint action would be accepted at Bogota
m the face of t)S opp~ition, the ABC countries can be expected.
to use it effec~:ively as a bargaining weapon, Moreover, they might
attempt collective anti-Communist action, independently of exis9~-
ing faster-American machinery, Argentina, Brazil, and Chile for
the most part lie outside the US range of immediately effective
military action in the hemisphere. Together, they constitute the
only potentially strong opposition to the US in the Americaso They
have acted in concert, independently of the U5y on several occasions
in 4:he past: during the difficulties between the US and Mexico fol-
laving World War I, for example, and, more recently, in one of the
UNGA subcommittees with respect to UN admission criteria, Even
though none of the ABC countries would at this .time extend their
opposition to the point of backing the interests of anon-Hemisphere
paver against those of the US, they can be expected, as they further
depelop appropriate techniques of coo ration, to utilize them as a
means of extracting concessions from the USo
-9-
T ..=~f.+=~'R~ET
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TET
~ QI3`~'E ~~lS
6p`1 ~~pppp~~?~ ~'(~T ~q ~y y~9 ~jT T ~ ~ F ~~~s
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L'9a..C~~ilal.+~lA'.~pl o. o o e e e w e w w n? w s n a n? n. n n n e.? w n o. n ~a w a e n ,~
? ~~"+ ~?~.?`~Dd+ y ~`~'' ~ ?~~-~~~+~~~ a n e o o a o o u e e a w a w a e u c o w . a
Ce~pp~~a~a~~s~~~qy~~~~~7~~~~c~~7aiaay~~~?a~j,~~~ ~~~ ~~,~~~ . a a .. a a U a. e .. < a 4
A~G ~~A~~~aaM1~ ~Cq+~e~Qf~~0.i~eef~y~?,t~~ 4'a4+TV~~L~,o~j o~? s y ny~~ e aL `. o o a e e e e o a o o n o e s a
WA ~?L?3~V1 3 7R~?s7~Q4 Y L~ 11 SL6d~G ?'Y 1L 4:?61 ~Y~.al'b .Y4 ~~76 F . a w_ . ., n a w e . w c w a
~~?a,~;;~ess ~t the ~JR3 ~?~ ~~~s ~?~,g~~fi~~ ~ ~e~~~~sa~.. n . !~eaders;
and (3) to undernziue confidence in the European recovery program
by implying that military actio~a map be i~nm.xnent.
VdES'~ER~' ELOPE
The resi~atior~ of Prez~iex ~taa~adier was forced by the
growing hostility o~ fi~xs ~R~R ~oanposeei primarily of Radical
Sociaflists) t? the Socialist eco~or:'ric program ?aad .the basic dis-
agreen~ent betwee~a the 1s/ll~P (Popular Ii.epublicam I~~oveanent~ and
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r~.~~~'~ S fY'YdX~.z H.e?,~~i ~'+~ '`LiF~ .5~~%dc.Md~~d. ~F.D .v,~W ~F3;.~e~+M.~. ~~ ~KA.~@. !s'it.~~ Y~~~NfO~JY~~`Y.C+~r ~~.S~MGF.~a
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~~~~re~?~~.~~~98~~0
s~y~ ~
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Recent Communist setbacks in Czechoslovakia, fa the failure
of the Party to gain control ?f the Slovak Government, and in the
replacement of Communist fellow-traveller Fierlinger with the more -
independent Lausman as head of the Social Democratic Party, will
probably force the Communists to abandon parliamentary procedures
and adopt "tactics used by Communists in Poland, Rumania, and But=
garia. At present, the Communists, through the secret policej~are
redoubling their efforts to collect evidence fora "conspiracy trial
in which an attempt will be made to implicate the US.
De ndents of Soviet Deco anon troo s, up to the rank of
colonel, apparently are egg returns to a USSR from the Soviet
Zone of Germany prior to 1 December. The pr--unary reason for this
decision is believed to be a desire to prevent fraternization and con-
sequent "contamination," both of the dependents and the troops, and
to check increasing desertions from the Soviet armed forces in Ger-
many. During the first taro years of occupation, Soviet troops and
their dependents were quartered in small, widely-scattered towns E
As a result, the Soviet nationals were able to have close associations
with the local German population. These contacts resulted in dis-
satisfaction among the Soviet nationals and encouraged many deser-
tions because of unwillingness to give up associations with German
girls or female displaced persons. Soviet troops were then ordered
to move into concentrated areas, such as barracks and deserted
factories, and anti-fraternization regulations were more rigidly
enforced. In order to reduce further the possibility of "contamina-
tion," the tour of duty in G-ermany for Soviet troops was reportedly
reduced from two years to one year. Recently, Soviet authorities
have adopted new procedures regarding all persons going on leave
or returning to the USSR. `These individuals now are carefully
screened, relieved of their loon and thoroughly indoctrinated so
that they will not divulge details as to standard of living and other
conditions outside the USSR.
_The USSR appears to be delaying grain shipments to Western
Europe purposely until late spring or early summer f io 948 in order
to attain the maximum political effect from its "generosity." The
USSR obviously expects tfiat after Western Europe has passed
through a difficult period early in 1948 and after the US grain
surplus has probably been exhausted, the political benefit to the
- iii. -
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USSR of any shipments vtill be greatly enhancesi, Further~.ore, on ,
the basis of a better estimate which can be n1` de then of Puropean
crop conditions, the kremlin can: (1) safely default on its c~~zrrent
promises without loss of prestige, if European cxops are goody ors
(2j if Europe's grafn yield is poor, gain greater profits from So~riet
exports than: vrould be the case now with simultaneous US deliveries.
FAR E.A~'
~?he UN Good Offices committee in Indonesia is mesa ink,
serious obstacles in its efforts to carry out the S~ cease fire
order and to reopen political negotiations between the Dutch and
Indonesians (see page S).
the new Siamese regime under premier .Abhaiwon~ is
attempting to obtain farefgn recognition in order to reinforce its
position. As evidea~ce of the "civiiianr' character of.the new regime,
Government supporters poiEat: (k) to the formal transfer of power
to Abhaiwong by the military coup leader, ~arshai Phibul So~nggramn;
and (2) to Abhaiwong` .s insistence that his government will be free.
from any , influe~ace by Phibul and the military group and ~Yill honor
its inter~aatioraal obligations, However, foreign governments are
likely to defer gecognition because of the fact that the Abha,iwong
Government owes its ex~ste~ace to the military group and ti~~erefore
will- probably be susceptible to some military control.
Lawlessness continues unchecked in the Arakan Division of
Burma near the Indian border, although reinforced troops and
police forces are attempting to restore order by guerrilla operations
against mayor groups of brigands. 7Che Arakar~ area, geographically
isolated fPOm the rest of Burma, has a disti~nctiy separate tradition
which may develop into a serious separatist movenae~st if the groups
resisting the Burmese Government combirne forces. Such separatisgn
may encourage similar movements among aninority ethnic groups,
such as the I~arens, and thus ignpair the authority of the newly inde-
pendent Govea~anment of Hurma.
'I`he poss ~lit~of oeace tabs he~~een~ ~Y,ese,~ommunists
and Nationalists has been discussed recently by high Nationalist
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icials. while there is yet n~ general sent~.me~.t in fair?~ ~a
c?nspr?mise, ~?e fi~cli~aatic~n ?f sea~ae ~'~,ti?na~.i~t leaders ~~ ccn?
side~? such a g~c~ssibifli$y is ia~dic~.ti~e ?f their cuarent desp~ndc~ncy
?ver the sari?us ~ailitary sit~aati~n end ?~rer W'heir &~elie? that the
pmsitive pr~gran~ c? flIS aid ~? ~hia~a, fc~?ecast ia~ recent statea~eaats
by Secret~.ry Marshall, ir~v?l~es a~at~unts which a~9e i~aade~uate
fir ChinaAs needs. Z? the ~r~~ernmer~t ~eccmes ccn~inced teat
there is ~a? h?g~e a? rettersi~~ pz~?esea~t t~eands ~f ~iflit~,~y aid eca~
n~mic deteai?rati?n, it will pr~~ak~ly seed a c~mpr?nnise with the
~hia~ese ~~mmists as a flast~res~rt ~,ltea~a~.five t? disia~tegraa ic~a.
S? &?ng as mi~.it~,ry de~el?pmea~ts ccntinue in their ?a~r?r, hc~we~e:~,
the ~e~mmu,~.ists will not accede t~s suc~a a settle~xae~at, ~~c~~l~t ~n
teams ~yfiir~h w~tald give them ~, d?mi~aatia~g p~siti?~ ~ the ~~~e~~
meat.
Chinese. C~r~am~ist ??rces hart? ~a.ia~ed a substa~ati~.fl
strategic vict?~;py by ?ccupy~g pasiti~an.s whicfa threate~a ail ~rital .
c?m~,unicati~n.s ~~ ce~atral ~hin~,. The lat~t~~? regi?~ has nd~ dis~
placed Ii~anchuaia as the ~xa~st in~p~art~t s.re~. c? Cheese mil~.tary
?peraticns. ~'he Kati?~nalists can ~nfly disflcsdge the C?m~x~.unis~`s
?r~cm thei~? new bases by a successful, mad?r ~ffea~si~e,, SS~ch ~.
success appe~.rs du~icus ~ the ?ace ?? cu~?aently reduced .~~.ti~saa~.l~
ist military p?t.ential.
iSTEP,~' F~I~JIfS?~R.~
e Per?~ G?itern%YLtLeE3t's ~'eC~nt tende~,ci~~ tc~ attach the
liberal. newspapers that are ~-pp?sing its ece~r~?mic mad s?cia,It
p?licies a~ad t? adept a ~?re lenient p?licy t~~~.rd the C?rn~aists
are ,probably c~a~ected w~.th the ~~a~ement as determhaati~a~ t~
amerdai'~lae ~agea~tine,Ccnstituti?na ~srcu c~.n ?aily amend ~th~s
C~nstita,~ti?~ bar gai~,iyag tae supp~~?t of flange number's ?? mi~dlem
ci.ass ~a~ers wh? are deeply i~luenced by the liberal newspap~rs<
The argentine C~D%YtYYiuElists, ~ the ?ther ha-~d, are ?ew ~ ~.~~~her,
cm~ami~ed. tee a cauti~s n?n~r~v~sluti~aary p~?cgrann, and tucflined .
t~ f?cu5 their stteaati~ ilp~ irgte~ati?nal, gather th~~a d?nxestic,
questi?ns. the ~er~n regia~ae has apparently decided, the~ce?~rre,
that libe~?aI ~aewspaper ?pg?~iti?n threa~;er~s tihe Iangmterm pr~spes
?? the der?n regime while the Ce~mmunists d? nct.
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a.:.ah-..~~,~.
S?~~~,~ ~?~~~.. ~~~ eat?s~A a~~~c~~,~~~r ~~ ~~~ ~?~~~~~~.~?~~ ~~~~~~~
~?rAb~ ~h~~~;~?r~ ~~ ~k~a~~y ~~ ~.~a~~~~~~.
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1~ I~ T I C I.. E S
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Si~ee the ~.d~ort:~~a~e~~ o~ the ~oseo~o ~o~e~e~~e of ~?o~eign.
~~i~tiNte~?s o~ ?~ ~~~~ iL ~`~~~} s~~se~ue~at f~te~~~,tgo~~ eeti~~s hsve
gig?e~ ~.o ev~.dr~~~e o~ a~~r ~~~e o~ ~osit~c~a ~~r tkae ~~SJ~ ?~ tae tss~es
eo~ee~~?~it~g ~e~t~~~~ a~.d ~~st~i~, ~~~~~ ~~~ ire dis~~ssed ~t the
fo~t~-ooi~.~ ~,o~d ~oe~e~ee ~~ the ~F`~~a neither a ~~ot~?~.eted
~2eeti~~s o? the ~~st~ri ~'~eat~ ~o~n~?issio~a ~ie.a gar the
~rese~t i~.x~gel~ ~~:~$~ess eons o~ the cie~aties st ~oaado~a to re~eh
a.greeent eves o~ a~i~~r ~~~-t~rs h~.ve ihdie~.$eci a si~~t~?est ac~~
~us?rne~t o~ Soviet ~i~s si~d oh~eetf~r~s. ~~ea.~s~hile, a ~S, ~e ,
~d Pr~.~oe h~.ve re~.oiaed Moser ~.~ee~e~t o~ ~ermy ~.~d ,~~sgrfa.
L he 7~1~- ~~ ~a~L.F..Iu~'i[[ ~?s~~~~~.s~7 0~ aES~r ~5~~'~k~~ c 66 a'R~t~~~'A4~1
~~ aizi4ms sre ~r~.etie~g~ ~~.r~.i.~.ex: a rye h~ y ~eea~ d~?~.va~ into
closer ~.oeord si~ee the ~os~o~P ~o~ere~eee ~y g~~aei~~tio~ i~ the
E~xo~~ recQVe~~ ~ro~?~.~ ~~d ~~ the e~i~ir~~.o~ o~ a C?~a.~t~-
n#sts ~ro~~ tie ~'rea~ch ?e~s~~ae~t. ~veg~ t~~o~~h deeg~x?~ot?~~? c?~~-
ce~ over se~~a~it~ makes ode ~`~Te~.ch ~ositio~ o~ ~err~n~;~ de~?e~t
fxo~ th~.t of the ~T~ aid the , ~~d aitho~~h the ~'re~ct~ are got
~L2~i~~~$e~~' ~'e~~FEt~~~ ~~ ~h~ ~~~~~m~eti ~~a~ j3%'o~~~,l~l ~f'~~ ~~.1~~~
the level o~ ~er~~~~ i~ad~str~, ~?~ ~,t~ce viii .do~~tedkq ~odi~y its
position iYa the i~~~~rest o~ y$r Gster~ ~~~t~ the ~SSIt re~ai~ns is~~
fle~~le at the lac~~don ~oere~ce . ~.~ them is sucia ~ o~tco~ae,
the ~re~ach c~~ ~e ~:eete?i to ref?~L tk~ei~~ ~e~r~e nth e ~`Smii:~
domes ci to a.ecept s. hi~~!~r level ?~ i~du~strg~ for ~~~ i~ re~
~~~ for ade?i~ate security g~aramt.ee~ ~s~ch as am i~ter~aticsras.l
control pro~~.~ ~o~? the P,a~.hr amd ~ himel~d~ ~~ad ~o~~ a.~se~a?~aees o~
sm~~iciex~~ cos.l anal coke.
~'~daa~temtal So~et obgecti~res et the l~ondon m~ee~irn~;, o~ the ..
~ P~ mill ~ndo~btedl~+ ~e ~~.sies.id~r the s~;~e as moose the ~ISS~
pnrsmed at ~+e l~tosco~ ~?~ere~ace. A,t I~osco~, it ~eca~e ~vide~t
t~x~,t the USSR seeks to co~nae~i~e rm~~y ~,s ~ esse~ati~l step
f~ ~. glace. to e~te~ad ~+~zn~t~4st comtroi over a.ll Et~rolae. ~o ~~~?~
~.t r his c~~ective, f.~ae ~ISSkB deax~~ded a. share im the controa ~~
~iae R", a ~e~~trali~ecl ~ovea?nnaem~y of th~* '~dei~ar tyge ~hflch c~auld
easily ire scm~led, a payme~'t o~ reg~rations krona caa~?x?emt pa?o~
cimctioaa frahic~ v-o~ld hao.ve ?orcerl the ~S aid the ~ to Taear Bauch
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of the ?~ancial burden), and freedom for trade unions and "demo?
cratiicD~ p~.rtiies to orga~ai~e ~ ail pones. when the TJSS&t, was u~aa~rte
to obtain these demands, tine Kremlin directed its efforts toward
k~ep~g ttae Sowie~ done in ~:rrnany economically seated ?ff from
V~estern 1Europe. Such a policy was designed to reduce western
Germany to a social and economic morass and was sa~pported by
the conviction that ~e ~JS w?uld inevitably have a sewers depres?
sios~ which would force the abandonment of European ~eommitax~ea~ts.
Since the Moscow Co~ere~ace, however, mayor developments
h~.?e occurred which wilt hinder the USSIB ~ the attaiaiffie~at of its
ob~ectiwes. Chte? of these develop~.en~s has been the inception ~d
drawh~g up of the Eteropea~a recovery program. ~3earlp as signi?ta
. cant, however, ktas been the sti??eni~ag in attitode toward the ~t~SR
of the wester pa.rticipa~ats ~ ttne CENT. ~ec~.use ?f these dewelopw
~xaents, the LFSSR now is confr?nted with the inam~ent praspect o?
the aumi?icat?o~a of the three western pones . ~era~.any a~~d ~, con
seaiv~ent improweax~er~t ~ their ecoaaogny. Moreover, the predicted
~JS depression has not a~aate~?iali~ed.
In recognitio~~ o? this change ~ e situation since e F~os~
c?w ~Co~erence, the USSR may make certa offers at ~?naion w~asch
wit ~,j~pear, on thy: surface, t? ~~ new and s~~eep~g co~c~ssi~~-~s.
S~~ch concessions na~.gk~t take several fora: ~l~ some scat~g down
of. et~.ims to Cer~a.~ reparatio~as9 ~~~ a pr?posed establishment of
a ce~xtral economic administration wd~ich will appa~?ently pr?mote
~er~rraan econ?~aic unity beat ~rrould also ?~;rther Soviet political ob'
~ectives s ~3~ tP~e offered withdr~,wat ?? alt ocpation troops from
Geranany, whicfl~ woad secure the ~?emo~~l o? ~S forces from Europe
wP~ile merely re~uiri~ag Soviet aanits to fafll back t? nearby ~ota~ad.
because ~ ustria has been placed at the bofito~a of the proposed
Soviet agenda, pr?habl~vy~no Ao~s?rias~ co~acessfonswnil~b.~,e offered
~~~?.~ G.? ~~..~?i.~r..a~~i~. Q~~ tDA~. ~~.$'~a~ ~.~'~Qr?ee~9s~?a~n~? l:' o~' 0.&9w~.~~r ~~.~~~.~5,
it is likely that ar~y concessis of?er~d by the USSR will be Heads
more with an eye to their propag~ada ~ralaae than with may s~rior~s
e~ectat?oa~ ?f accep?ance. 'X'he offers w?eatd be care~lAy drawn so
a.s to prepare the way f?r plac~g the oncas of failure to reach agree?
ynes~t o~n the ll~ and the lTI~'.
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~f ~~a~s~ ?a~~:~~ ~.r~ ~ad~ acrd are r~~~~~~d ley ~~e ~es~~r~
~~~ve~?~, ~~ae ~TSSR ~F~~1 d?~bEle~~ ~t~~t~~e ~c~ a~~,~ ~h~ ~ares~n~
di~x~~a~a ?ff ~~r~a~yy ~h~re~y d~~.~ ~:? ~r~~~~~?~ ~~~?~ax~y ~
P?~~ib~.~i~y .?~ e~~~a~~~~~~~s maYa~far~~ ~?r ~Y~ ram ~a~r~r~a~~
~g ~a~~~r~ ~~rm~y aid. Ea~~er~ Ear?p~. '~`~~ USSR w~~l t.~a~.~ be
~~g~~ed ~? ~?n~~a~~ a ga~l~~y t~~.i~h '~a~ ?r~~;~~~.~~y ~.~d d?~ ?~ ~h~
hyPa~~es~~ t~a~ a ~3S w~aa~.d ~~ c~Q~~ap~~d by a d~~r~~~i?~n ~~~?~?~
~t ~c~~a~d ana~~ ~e~~er~ E~r~~~ a ~~1~~~ aid ~r?du~t~v~ ~~cs~aorn~c
aria.
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C~~Vt1!lItJNIST VIDI~ENCF IN FRANCE AND ITALY
The outbreak of Communist-inspired strikes and violence
in Fra;ice and Italy is a logical development of the Communist
reversion from political action tc~ mili~ncy. This violence repre-
sents the beginning of a militant effort to create a "revolutionary
situation:" rather tha.r~ the beginning of an immediate revolution-
ary coup.
Communist policy in Germany in the last days of the Weimar
Republic provides an his~:orical ~~cample which may illuminate
present Goinmunist vurposes. Then the Cornnnunists chose the ~oci.al
Democratic k~arty as their primary taxget and, like the Nazis,
sought'to overthrow that party and to destroy normal constitu-
tional processes, They apparently e~cpected that when a revoiutionary~
situation had thus been cre~.ted they could dispose of the Nazis in due
course. The German Re~iublic was overthro~n, ~.s they intended, but
the Communists did not profit, because the riTazfs beat them at their
own game.
? .The current Communist activity ~n France and Italy purports
to be. the spontaneous reaction of the democratic masses, against
the "Fascist menace," with which the established governments are-
either "unwilling or unable" to code, That ``menace," however, is
neither immediate nor inevitable. De Gaulpe is as yet unready and
unwilling to accept paver in ,Fr~.nce. In Italy, the elements which
might constitute an authoritarian rightist grouping are even more tin-
organized and unprepared, _ _
Although the Communists' direct attack is against real or
supposed Fascists, their actualu though indirect, purpose is to di~,-
credit constitutional goy-ernment by demonstrating its inability to
maintain order and by destroying the order and co~idence essential
to economic recovery The Communists knave well that, if they
succeed, the immediate political benefit will. accrue to the authors-
- tarian Right, rather than to themselves, and that, if the Right were
to come to power, its first endeavor would be to suppress them.,
They incur this risk because og the overriding necessity to defeat
the European recovery program at any cost and in tine elzpectation
that the Right, if forced to power prematurely, will prove incapable
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of overcoming them in the ra~volutionary situation thus created.
Thep realize that they coul~.~ more readily arouse a democratic
mass resistance to an extra-con: titutional, fascistic regime than
they ccKxld arouse the masses against a constitutional and demo-
cratic government. Thus, in pursuing their present course, the
Communists themse'ves recognize that accession of the authori-
tarian Right (as typified by De Gaulle) to power is less dangerous
to them (or rather to Soviet interests) than would be success by
the constitutional governments of France and It~.ly, aided by the
European recovery program, in bringing about a degree of eco-
nomic recovery and consequent political stability.
So far the Communist program has actually been of some
benefit to the constitutional authorities in Italy and France. De
GasperiAs response has been firm and vigorous. Ife has shown that
the relationship of his Government to the United States is not com-
parable to the servility of the Communists toward Moscow; that th,e
result of Communist disorders may be to deprive the Italian people
of the bread which he could otherwise be sure of obtaining from
the US. The net effect has been to cause Ii:aiians to rally to the
Government as the representaxive of law and order and of the best-
hope for US aid. Similarly, in France, the Socialist-led Govern-
ment has been enabled to dramatize itself as being as much oppo.:ed
to Communism as is De Gaulle and as being the defender of constitu-
tional republicanism against both Communism and Gaullism,
k
If the ~ constitutional regimes in France and Italy are able
to meet the Communist challenge firmly and effect rely, if they can
maintain a reasonable degree of order and, aided by the recovery
program, bring ,about some economic improvement, they will sur -
vive the threat from the Right as well as that from the Left. just
as the Communists require a Fascist menace, so De Gaulle (for
example) requires a Communist menace and a general sense that
the constitutional regime is incapable of meeting it. Given a
successful maintenance of order and some economic recovery,
there would be no need for a Gaullist solution which, to most French-
men, is a choice of desperation. But if~the constitutional governments
in France and Italy do prove incapable of coping with the Communist
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camnaigm of strikes and disorders, the French and Italians would
turn to the authoritarian Right for a forceful solution, In France,
the accession of lae Gaulle arould become inevitable. In Italy,
~+here the Right is soli disorganized and leaderless, the issue
~rouid be in considerable doubt,
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T ~E PA LE STYE ~SS~3E A, `f' T i
The p~~ to pa~titio~, Palestine into sepa~?ate Ayala and
Jewish states probably wail snot receive the necessary two thirds
n~a~o~?ity in th.e ~ general A ssenabl~r. Fifteen delegations h~.ve
indicat~~ that they ~r~ill oppose th.e par:?titio~. ialan; sever will ab~
stabs from vot~g. 1t is almost certain that of the ~~n~aining
thirty?five ne,~tior~s, a aturnber suffic~.ent to defeat partitioae will
eitn~r vote agaia~st it or abstain from votia~g. `The plan thus
Gould be defeated by tvt~o additional opposition votes, by ore ~.ddi~
-tio~aY o~~osifi?~~, vote eyed three more ahsteotiozas, o~? by sip
additional abstentions.]
~.f part.ition is defeated, the (a.A w$ll th~~~ vote on mother
plan: t.? establish in Palestine a unit~.~y state with a large degree
of autonomy for both the Araks and the Jews. because controversy
ia~ the ~,A over Palestine has been centred aroa~d the pa~?tition
issue, it is ir~possa}~le to predict the fate of~ the Bess-pu~alici~e?~,
Arah-supported ~cherne for a uaaitary state. The d~~eat of p~,~?ti e
tion sr~ight persuade a substantial number of states not directly
involved in the dear East to vote foa? sores for~~a of t~nit~ry s~ateam
laarticular~.y in view of probable .A~?ab co~acessions on such issue
as in~mig~?ation~-gin the theory that any solution is better thaw Sao
solution at a11. The votes of these states, togethe~? with those of
the solid Arab bFoc, .might be sufficie~at to obtai~~ the necessary
tw?ath~~'d s ~la~o~ity.
if ne~~`he~? of the two plans is accepted and the I,~ ful?i~.~tis
its pledge to withdraw f~?om Pa~.estine by August b~4~, cons3itio~as
in Palestine vrill becona.e 'chaotic. ~itte~? and sustained fight~g
betwee~s the tv~o groups wild ensue. The STS ~aay then be compeRled,
because of aroaased Zionist syrrapathy on the ia~.rt of the ~7S publ~.c,
to take an actave part in the struggle.
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~~T~RE.~.SED ~~V TR~dDE ~~'~ ~ ~ DES
~?~~sf~~~ ~~ ~~ ~~~~a~~~ f~~l~~~ cif ~~.~ fire?g~~~,~ ~3~.~a, .
~f ~:~~~ ~la~. ~3s rel~.~t~~ ~~~.~~ :~~d w~~~ ~~~~t~c~~~ aid ~~ ~~~~~~~ ~?
~f ~.~ f~~e~~~~~ ~~~.~ way ~~~ ~~~~~t ~,f ~~~~~~a~I.~.tac~a~ ~?~.~c~~i~~
~~~~t. f~y~ffi~ ~~ ~TS~R, ~.s w~ ~,~ ~a~~~ ~~~~~~t~~ ~~~~t~~~l~~~~ f~~~
~.~y ~.~?~ ~~~~g~~~~~ ~~~ ~~~~~~~R~ pfd; ~~ ~~,~~~~ ~~~.ia~ ~~~~~.~~~
f~~~~ as ~~~ ~~~~~~.~~ ~~~ ~~~~~~~~~a~~a~~~~~, ~ ~?~~r~~~~t ~.~ ~.tT
~~~~ pe~.~~~~t~ t? ~~k~ t~~~x~ ~~~d~~t~ ~,~ t~~ ~~~~t.~a~k~:t aid
~~d~~~ ~S~??~~~~.~ ~~~~s~~t~?r~ t~ ~ C~c~~~~?n~;~at'~ ~~?~?~~~ p~a~~~~~~,
~~~~ s~~~~~e~~a~d ~aafa~.~.~~?~ k~~~~ ~~~ ~ ~~3~~g ~~~ ~~~ ~u~ff~~~.e~t
c~~~~m~~ ~~a~d~ ~?~ ~t~ ~~~d~a
P~~~u~~ t~~ t.TSSR ~ti~~ faRed t? ~~~~~~ ~.~ ~du~tx?~.~ ~~d.
i~ ~.e~~~.~ ~ t~~a~?~?~~~ e~~d~r~nt era?tfl~.d ~~ ~~a~t~~~.~, r~.~~ ?G~.~~
~?~~ti~~,x, ~?n~~d~~?at~c~~? ~~~.~ an?dt~d ~~1~~~ des d~~~t~, ~~,4
~~?~x?, t~,~~.~. ~~~~ '~JSS~. i~ nit ~.~?~~~~. ~? t~?ad~ ~~ta~r~~n ~, Sa~~~~ ~~d
a~ `~~~t, ~~~~d~ ~.t s~z~h ~~d~ ~~~~,~~ t~ ~~~~e~~~ ttfl~ ~~d~~~~
~,~d w~.~ p~t~~tt~t ?f t~~t S~,t~t~ifr~m
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~e~~~~~i9~ ~~~.~~~~~~~ ?z~d~~~ aid ~~~ ~? ~~~~.~~ "a~ ~,~~~~~~~:~~~~ ~~~m.
d~.~~.?~~ ~:~ ~~~~~ee~ ~c~li~a.~~.~. ~e~~~a~..~~~~~a~ ~~~:fe~~ the Id~~~~~?1~.~~d~
~~d ~h~ d?~~~~~~,~ Repa~~~~~a
~~.A~~d ~~ ~ ~.~ced ~~h ~ ~~~~~~~~ acs ~~~~~~ gac~l~.r~ ~.~~~~~~ ~~
,~~m~~~a~~~~.~ ~?x~~~sm ~~~ ~ h~.~ ~~~ed d~.~~a ~. I3t~~ch ~~~ue~~ ~~
s~~d ?~~se~~~?~ ~? ~~~~:~ ~~~ ~~~x~~a~9 a~.~:h~ ~?s~nds fh~~ ~h~ ~
~e~~c~ ~~ ~h~ ~a~~ ~~ ~a~ e~~~~~~~d v~~s~ esf ~ ~a~k~e~ ~? ~h~ dg~na~~~
~~~, ~~d~l~ di~e~ ~~~~~ Iaa ~~~~~~ ~.~~~ ~a STS ~~~~e~~~~.~~~e
~~~~~~ ~~~ti~ec~.pa~~y a~n~.&~~.~d ~a~~~~n~~.~ ~~d~~a~~d~~~~ ~~.~~ ~a~.~ ~~
~~.~~ ~~d~?~~~d~~~~ ~~~.dea~.~~.~ ~~~~~:~ ~ ~T~~~~d ~~.~ ~~ ~~d~~~e~i~ ~~~~:~
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. TCo~~~ET ~ .
~~ ~
C ONTO I~bT~S
Wages
. IL FL F:~ N~rJ l l~ ~~ Lf~J ~ e . ? ? s e ? ? r ? n o . ? ? e ? e s ? ? ? o n ~ ? . ? o ? ? f ? f Y
A3~,TICS,E~?.e..sw????ee.ea???????so?o.??ee?o.? ~.-~
Non-~'oanm~nfst i~~a?r A~tf~3i~ fn ~'~.nee o . e ? ? .. ~ ...... A
Thee Sov~te~ Anniee~saay Celebra4.f?~ . ? ...... ~ ........ 2
The ~fg~fffcance of ate Sfa~ese Coco d'Efa4. ? . ? .... ~... ~ 3
The T3efe~ase~-,~f~es Yssa~e i~ ?~anaxa~a~fan ~olfffcs a ......~ . ~ 6
Dooument No. ~ Z~
lass. C:A.;jG~ TL ~ T5
i1t?A ?,x?o, 4 Apr 77
Auth : P a_`'?"=C.r._.77/176'~ .~ Y 1
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'TRE~T3S. 1~ BRIEF
~NESTETt~T Et3Rf3FF
~'~~~~~-Cornnaear~~st elements in the CGS are organizing
in an effort to redQace or neutralize the influea~ce of ~e CGT Co~n-
mu~nist leaders. Growirtig dissatisfaction among French workers with
Comm~xist direction of the CGT may eventualAy "create an open break
withi~a the CGT, 1~ith conserir~ent lessez~;Eng of Comm~.nist control over?~
French labor (see page Y~.
.~,it~u h JJe asoeri is now under pressure i~ronn. both the
Right and the Left to broaden the base of his Government, the Fxemier
wilt probably retain his present Cabinet which is based kaxgely on
Christian Bexx~ocratic-~.ightist pax liamentary coi.laboration. If he
is forged to extend the representation of his Cabinet, De Gaspers
wilfl undoubtedly prefer the inclusion of the non-Communist Left to
that of the varioa~s Rightist. gr?ups. ' Rowever, the preeent anti-Com-
munist tread id lta.ly has so increased the i~.portance of the Rightists
? that a percep~Cibi.e economic recovery in Italy and the formation of a
- strong Rightist bloc, possibly under the leadership of Corbino, might
force Be Gasperi's hand.
1?rime Mfr~ister ~.ttYee's rexrsovak of Rugh Balton frown the
position of Lid Chanceli.or of the E~;che~uer will resolve a c~anflict
between Sir Stafford Cripps and Balton over methods of dealing with
the ~''s economic probic~xris. ,Agthot~gh the 'appoint cent of Cripps,
already l~hiniste~? of Econoaa~ic .~ffaix~s, to 13alton's piece till ia~sure
unified economic leadership, the circumstances surrounding BaD.ton's
rezuoval will Yost tre Co~~rernmen~ and the Labor party heavily in
prestige axed cAnfidence. This of?air, coming shortly after the re?
cent expa~lsion of one Labor 1~!!P for dishonorable conduct and the
cefiisure of another P+~~, wiPi be expAoited by the Conservatives.
Labor's large parliamentiary majority anti the reluci:anee of the
Conservatives to. seek office just before ~an anticipated hard winter
will probably permit the Govex~r~.ment to weather these blows, but
its prospects of remaining in power tantil 1950 the constitutional
limits are reduced. '
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EASTERN EUROpE
The October Revolution celebration in Moscow was marked
by efforts to justify hardship, enforce discipline, and prepare the
people for Stalin's death (see page B).
A~ on the US and UK Burin the trial of Maniu, Rumanian
National Peasant leader, indicate that the furtherance o Commu-
nisi control and the destruction of the political opposition were only
secondary Communist aims in staging'the trial at this time. The
Communists were prigicipa.lly co;~cerned with eliminating US-UK in-
fluence in Rumania by demonstrating to Rumanians the consequences
of association with representatives of the Western Powers.
The Communists in Poland,who have consolidated their
political posi~~i.on following Mikolajczyk's flight by taking control of
the ~ Peasant Parties, can only maintain this position by intensifying
police controls. Attempts to weaken the Roman Catholic Church and
to industrialize the economy (next steps on the Communist program)
will meet with Strang opposition from the Polish people who will not
be easily persuaded to give 'up the Church voluntarily or to make
further sacrifices in their standard of living in order to promote the
Communist-sponsored industrialization program.
NEAR EAST-AFRICA
The question of enforcing the partitioe of Palestine remains
the chief difficulty facing the UN sub-committee on Palestine. The
UK has stated that it will not use British troops to impose any
settlement which is unacceptable to the jews~ or Arabs and that
(previous to the British withdrawal by 1 Aughst 1948) the troops wili
be responsible for the maintenance of order only in those areas which
they occupy. Thus, unless the General Assembly is prepared to or-
ganize an international police force to replace UK troops (which the
GA appears reluctant to do), any partition plan recommended by the
UN has little change of successful implementation.
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The size of Turke ~s armed farces will soon be decreased by
the release of about 150,000 men and may be kept a r uce s rength
indefinitely. Present indications are that the Turkish Government
may decide that Turkey is not in danger of imminent attack. Such
a reduction would not only lessen the burden of heavy national de-
fense appropriations but would also insub a--by the release of man-
power--an increase in the rational income f:flarouga~ economic pra-
duction.
Ratification of the Trans-nrabian Pi aline Convention by the
Syrian Chamber has again been in a finite y po pone is re-
sentment against the US is strong because of US support for the
partition of Palestine and because of Socony iTacuum's unheralded
cut in petroleum allocations to Syria. The Syrians consider that the
latter step is connected with the US stand on Palestine.
Iranian opposition to ratification of US arms credit appears
to be growing. This opposition stems from such consi erations as:
(1) fear of strong Soviet reaction:; (2) the need to conserve foreign
exchE.nge for economic and social development; and (3) a desire to
obtain more favorable terms from the US, including repayment in
Iranian currency instead of dollars. Although many Yranian officials
would welcome an outright gift from the Uw of the $ 25 million of
supplies, .as sought by Prime IVfinister 4avam, some Iranians are
reluctant to place Iran in exactly the same category as Greece and
Turkey lest such action increase Soviet hostility.
FAR EAST
Tk~e recent coup in Siam has brought to power a rayalist-
military regime which? will negate Siam's progress toward demo-
cratic government and improved international relations (see page 3},
Australia's increasingly pro-Indonesian attitude in the Dutch-
Indonesian dispute does not seem to result primarily from pressure
by the Australian Communist warty but from a growing awareness
that Australia's security in the ]Pacific depends on a practical course
of action which will not alienate the Indonesians.
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WESTERN ~EZVIISPHERE
Panama will probably reject the minimum US requirements
regarding adefense-sites agreement as a-.result of Ambassador .
Vallarino's decipion to run for president with the support of
Harmodio Arias (see page 6).
A rapprochement between Argentina and the Soviet Union
is highly improbable despite recent. spe ation to the contrary.
Instead, the available evidence suggests that: (1) the Peron regime
is preparing for drastic anti-Communist action following the
March 1948 elections; and (2) even Argentine officials expect -this
action. to lead to the rupture of relations both with the Soviet Union
and the Satellite States.
Peron has emphasised his intention to gnaintain relations
with the Soviet Union for the present. ~n the other hand, he is
known to regard the Coxniyafoi?Yn as a declaration. of war against
the Western world and to have predicted that it will express it-
self within Argentina in the form of deliberate sabotage of his
own Five-Rear. Plan.
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~ R ~' IC; L E S
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NC~1~-CUIUiI'JIUN&ST 1,A13~R ACTIVYT~ IN FRANCE
Non-Communist elements in the French Confederation of
.Labor ~CGT~ are at present grouping their forces in an effort to
reduce or to neutralize the influence of the CGT's Communist
leaderso This movement against Communist dominance by minor-
ify elements within the CGT as significant largely because it has
come from the rank and file of French laboro
PTor~-Coxnma~nist groups within the CGT haee in the past
been unorganized and anlif by shadings of political differenceso
In the past year, however, these groups have begun to fake definite
shape and haws begun to compose (heir political differences. Their
recent tendency fo loin together i.n anti-Communist actiwitp has
clearly worried the Communist,
Although fine non-Communist groups are not sufficiently
strong at present to break away from the CGT, the increased shaxp-
a~ess of their opposition and the growing dissatisfaction among
French workers seven Coxnn~a~nist workers~with Communist direction
of the CGT may lead eventually to an open break within the CGTo If
such a break should occur, Communist influence in die French labor
r~aovernent v!~ould be considerably reduced and Communist Party
caoacity to control labor activity for its own ends would be sharr~ly
ca~rbed,
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~?assis~eaa~ with tche ~~~me~~ "?~ie~ p~opaecla lie, ~??s`.et
e~a~:cs~s a~ ~~ze ~eleb~a~i~~ i~ ?~~?~v ?n 7 ~~~we~a~ae~ ~f the ihi~~ieifi
a~~E~~l~Y'~a~y ~~ the a`~~'~a~ ~~~~~e~? Rey?l~a~i~~' p8ayed aap iaate8?fl~~.-
~fc~al ~eYZSi?~ ~ ?a~der ~w ~usii~y i~e~eased hardship anal t? enf?a?~e
ide?fl~gic~.i di~~ipl~e a~ h~s~xe. The harassed S?~ie$ people were
aim gi~~e~ any ~~~edia~e p~ospc~~~ ?~ x~aa.~e~ial i~pt; o~ea~e~~ isa their
dai~~y 1~..~e. The li~~i~~ ?~ bread rati~~~promised hg S~a,l~.aa yearly.
~w?ye~p.~s ~.g?--w~.~ ~~~ ~.e~a~i?~a~e~.. ~`he ~~iy ~i~i~iea~~ ne~~e ?~~y~
~~Il3B8?3'W w~.~ e`~.. ~e'D~~w~2~~ ~L?v, ~t~:~~5rv ~~~.~'~~.~k~.~ $h3$ RBU~ t6~e~~~'~ C~~ ~.dge
~.tomi~ b?~ab h~.s 1o~v ceased ~? e~ist.g~
The ape~,~er~ de~ate?i co~sider~.~ale ~.tte~tx~ ~? r~ecalR~g the
~~~~yps ;l?~rao~.s ~.ch~ie~e~ae~ts ia~ the pass:. Tk~e ,Armed ~o~?ces wire
aar~ed ~~ rem~.iaa_ "i~ caaasta~t prepaa?edaa~:s~ ~,gaiaast ~e i~sti~;at?rs og
~. ~et~ w~.a?' ?; the ~'ar'~y dedicated i~sel~ to c~aaagi~~e the sta?~a~~le against
t3ae 66capita.lisf~ic ~~~~%'~~s ~rhic,~i ha'~e ~? desire ~~~ coopr~a?atie~at. '
~'orelgn hliaaister Y~lolot?~es speech coaa~,ined se~e~r~al hints ~~ coaa~
tern t~~vea? native ire?looicag lo~talty. ae~~ all o~ oar pe?~le,fID h~
said, "hare rid thea~sel?3es ?~ g~ieir servility and ?bse~uic~aasaness ~?
the t~Iest seed ~? c~,pit~.liss~ c~a~.~re.... ~ith~~nt ~ef~t3~a~ rid ?f these
dis ,~ ~.cef~al saaa~~tivals, one cannot be ~, reel ~?viefr citiseaa. ~' .
.~ stri~iaag feature ?~~ ~lae entire celebratioaa was the relative
lacP~ ?? p~'oa~iaaesce accorded Sta.flin. ~~ only was he absent has was
the case iaa 1~46~ ~ his n~,ane received ?anly scaaxt attenti?~ta ia~ the
nu.~er?~ p?ster~ bearing 4:he ?fficiaflly~prescribed sl?~aaas ?~' the
day. ~T~'iaile he was fre~aaeaa~y ~u~ted by seve~?al o~ the spea?~ers,
there we~?,e practieall~ no lauciat~zry txibutes ~ e s?~~ usually paid
hia~a. ~lths~a~ls Stales s health away in fad have foa?ced hi~a tQ tie a
less active ~??le ~n S??iet a~fairs9 it is e~aaally p?ssible that the
Krenal~a is ma~iaa~ a deiiberate eff?~#: tc~ accustom the people ~? his
absr~aace ?~ sash ?ccasions. ~y gradually deemphasi~~~ Stial's
pea?sonafl appeal and stressing, his symbolic value, the T~~?ea~iYa away
be g~r~p~,a?~ag its subjects ~?~ Staliai9s death.
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~ 5~+~~1k'ICAI~'CE ~~? '~`F~ SI:F!SE CC3U1} D'E'TAT
The ousting of the governs~aent of premier Thanarong on ~
~'ovenaber by a YraiZit~.ry co^~p fleas resuited i,a~ tae rem to power .
of the formes pro-~apasaese dictator of Siang, lildarshal Phib~nl Song-
gra~ca, grad of the parliamentary opposition to the go?ernffie~at of
Th~.a~arong and ~riaii. lay its forceful method of establishment and
bq its ~nhancem.e~rt of royafl powe~?, the new regime represents a
reversal of the p~?e~ious trend toward democratic, elected gove~-
rner~t.
Tlae elimination of official corruption and the alle~-iatioc~ of
the high cost of livigag were given by the leaders of the coup as the
~ustificati~n for their action. wile these problems were doubtless
important in igaspflrixag this step, additional anotives were probably
~?espoa~sible fo~? the coup. The arnsy, always flee ~raost nationalistic
gro?~p i~a Siamese politics, has ?en at~.cked ~'ha~rong's policlr as
respo~asitale fcra~e r(1) the rretrocession to ~'ramce of border terri-
tories takeza by the array in 140-49.; ~2) ~~e rise of Commwaisan in
Siam; cad ) the growth of i~afflueace in Siamaese affairs of China
~d of flee large Ch~aese a~inoa?ity in Siam, Ce~ctaba eflea~aents i~a the
army, ~:ogether wi~a some nae~bers of the Siamese political oppo-
sitiosa, appa~?ently beca~rae co~aeinced fleet lsarliaaxaentary methods
were inade~~aate to oust Thanaroaag.
'the gx?rrup responsible foz~ tiles coup is believed to be rather
s~aall.and composed of relatively-uaa~own ~ailitary and civilian
political ?~gures. l~ac~ing outstanding l~:aders tr~ithin its merraber-
ship, the group sppareaatly fi~?st secured~the leadership of general
~dul, ConarYaander i~a Chief of flee Sia~araese Array, whose opposition
to official cor~ption was well &~a?wn. ~Nhen Adul attempted go halt
flee coup in the first few hours of its development, the group them
turned to tJlarslaa,l ~'hibul who lead sought a chance to retua~a to
politics since early i~a 194?. ~Tnder phibul's leadership, the origi-
nal group hs,s nar~rc ged with a group of pror,~inent royalists, probably
in an effort to present aria appeaa~ance of legiti~raacy through seem-
ing to suppor$ the ~?oyal dynasty.
The Sian~aese .Parliament and all political parties have been
dissolved by the coup naovenaent and a new constitutioaa has been
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promulgated. Uowever, the d~ffieulties encountered in the formation -_
of a provisional cabinet by tae leader of the civilian political group,
lKhuang Abhaiwong, indicate that there is considerable apprehension
within the coup group regarding its stability and future tenure of
power. In vied of l~hibul's harsh icreatment of the princes during
his rule from 193$ to Y9~~', theR.oy~.lists in the group are unlikely
to accept his leadership for long. Civilian elements in the group
recall I'hibaxl's dictatorial regime and fear, consecluea~tly3 that Phibul
will not permit the Abhaiwong cabinet to exercise real power but will
use it only as a. democratic front. If ~hiixul does not give 1~he civil-
ia~- group real power, many civilian leaders nzay resign, .thus caus-
ing the fall of the . Abhaiwong cabinet and permitting its replacement
by a cabinet headed by Phibul.
In addi#ion to the disruptive forces present within the coup
group, the stability of the neca regime is made doubtful by the pos-
sibility of a cauflter coup led by ~icler Statesman Pridi and supported
by fhe 'gee Thai znoverxaent. Stich a coup might be also enforced by
elements in the Siazn.ese Na~ay, which bas always aligned itself with
eivYliar~ groups agaix;st the array. The strength of a counter-coup
m?vement might be augmented, if Phibul tames direct control, by
disaffected civilians of the present cd~ap group.
The policies of the nee regiane under a cabinet headed by
Abhaiwong are e~pQCted to be relatively moderate in order to avofd
ar~tagonizirtg the 17S ana the Ugh whose financial and economic aid
will be increasingly valuable to a govern~-ent pledged to alleviate
the cost of living. Certain measures restricting Chinese economic
and social activities may be revivers or inaugurated in a reflection
of the anti-Chinese bias of the Siamese A. rmy. Such measures wall
incur the resentment of the Chinese National Gavernmemmt and the
resistance of powerful Chinese entrepreneurs axed middlemen vital
to Siam's rice economy. If Phibul assumes direct authority, after
foreign apprehensions regarding the new regime have been allayed,
anti-foreign and ultra-nationalist policies may be instituted which
will adversely affect 1T~ and UI~ economic interests in Siam. Phibul's
vigorous suppression of Communisrra during his wartime administra-
tion xna~ foreshadow new anti-Communist measures vrhich will im-
pair Sian1's relations with the USSR and may even affect Siam's
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position in ttae 11I+3f ~ tae So~iefc ~3~~:',~ta opposed Siam's ?dmissian to
tike UAT aa~cl r~faas~:ei a:o err~ierta.in di '.onaatic ~ela~ions tuatil ttae Siamese
Goverrarnen`~ repealed ~e anti-Gona~i~~f legislation of 1~3~3~ The
forceful esta'~~ishmerat of a royal~.~t-~a~ailitary regime in Siam v~ill
lead to dXi 2~':e, elect per~.od of in ~~ ~~.ility whii:ch may negate the pro-
grass Siam r~a.de under cieiliaaa ac~.ministration toward rehair~ilitation,
democrstic goversarraerat, nand irnprca~ed h~termatiasa..s,l relations.
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TAT
THE DEFENSE-SITES ISSUE IN PANAMANIAN PQLITTCS
Panamanian political developr~ients have introduced new
complications into the protracted US negotiations fflr a defense -
sites agreement. As a result, Panama is naw expected to reject
the most recent US proposal for aten-year US lease on the Rio
Hato base with aten-year renewal option.
The terms regarding Rio Hato have become the principal
obstacle to an agreement in large part because of a domestic poli-
tical situation created nrimariiy by ex-President Harmodio Ariasa
Arias, ha?s recently put himself forward as the spokesman for those
who oppose Some L'S "demands" and has described the minimum
US requirements wfth respect to the base as "unreasonable and
incompatib~e with the letter and spirit of Article X of the Treaty
of 1936." He insists that Panama grant only afive-year leased
Harmodio Arias is also. knoum to have informed the Panamanian
ambassador in Washington (j.j. Vallarino) that: (1) Arnuifo Arias,
Harmodia's openly anti-US brother, will soon announce his candidacy
fo~~ the presidency; and (2) he himself, together with a substantial
majority of the v,iberal Reform faction within the present Jimenez
administration, is prepared to support Vallarino for the press-
dency. Vallarino has noun consented to become a candidate, and
there is reason to believe that in agreeing he acquiesced in Harmodio
Arias' views on the base question. These views, if they became Para-
. manian policy, would render highly improbable a favorable solution
of the bases problem prior to the Panamanian elections in May 1948.
The two Principal candfdates in the 1948 elections will be
Arnulfo Arias and j.j. Vallarino. Vallarino will probably be elected
since Arnulfo Arias cannot win without Harmodio Arias' support,
Panamanian Foreign Minister Alfaro, who is also the Panamanian
Delegate to the UN, i~ not likely, meanwhile, to adapt any position
? fn 2hQ defense -sites negotiations that would incur Vallarino's dis -
pleasure. Although President Jimenez will probably not support
any candidate, his position in the defense-site negotiations wiil be
circumscribed by the public knowledge that both the leading presi-
dential candidates are opposed to the US terms. Jimenez can, how-
ever, be counted on to permit the US to occupy the base&, without
specific authorization in Panamanian law, until. the elections.
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 ~~OI~TlEI~TTS -
Page's
TR.~~S ~ ~RI~ F .. . ............. . ........:... ~. f - vi
..
AR;T~C~ES ......... ......................:... 1 w 7
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'T' V
I~npl~ca~icras ~ the ~ Flect~~ ............? .:~ .... ~ 1
Plew Go~~~ Pol~cp in France ............... , .. 3
Sattie# Pre~s~.ra~f~s to Gain C~~rc~~ !n Greece . , ...... 4
The iM~.t~~ary Sfia~ ~ ~h~na ......... ? .....- ..... 6
~ ~ ~! .
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T1~END3 IN BRIEF
GENERAL
Soviet intenti~s in Palestine may be illuminated by simi-
larities between the December 1945 Moscow Agreement on Korea
and the recent Soviet proposals for setting up separate Jewish and
Arab states. The Korean pact provided that a joint US-USSR com-
mission consult with "democratic parties and social organizations"
in setting~p a provisional "democratic government." The Soviet
proposal on Palestine suggests that during a transitional period
the Security Council administer the entry through a special com-
mission. This commission is to elect a provisional council of
government for each part of Palestine after consultation with "dem-
ocratic parties and organizations," just as proposed for Korea.
The adoption of the Soviet proposal- would afford the USSR new op-
portunfties to delay action through interminable bickering over the
question of what parties and organizations are truly "democratic;'
just as this question has delayed solution of the Korean problem.
The decision of the UK to return the Italian battieshin
VITTORIO VENETO, despite the- apprehensions of the Admiralty
and objections within the Cabinet, reflects Benin's estimate that
Italy is not likely to come under Communist domination, at least
during the period required to complete the scrappi~tg of the ship.
Because the UK , like Italy, is eery short of steel scrap, Benin's
decision also indicates awareness of the need for the UK to improve
its relations with the present Italian Government. Anglo-Italian
relations base not been good since the war ended, and they became
sharply worse after the UK dollar crisis forced abrupt suspension
of sterling co~nrertibility arrangements on which Italy was counting
heavily to reinforce its dollar position. In another gesture toward
improving the relationship, Benin voiced his hope that the UK will
be able to begin shipping coal to Italy after next March.
WESTERN EUROPE
Recent UK ~uniciAal e, lections,.which reveal a very sharp
swing away from the LaborGovernment, indicate that the Govern-
ment has failed to convince the electorate that its increasingly
-i-
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.austere measures are necessary and suggest that a general election
in 1948 is a possibility (see page 1).
Indications that the Cominform is directing the policy of the
French Communist Party along is Soviet lines have already
caused the Party to lose prestige in France and may result in severe
losses of strength among labor and reduction of the party's domino-
. rion of the CGT (see page 3),
Small im~rovement_s in the. UK economy are appearing, al-
thaugh the general outlook remains`~teclou~e~. It now appears
likely that the year's steel production will exceed the pia~nned tar-
get (I4 million tons) and that the 1947 coal target of 2a0 million tons
will be missed by only about 2%, If production is mainffiined at
recent levels, coal' stocks will not only be sufficient to avoid any
such breakdown as occurred last winter; but should also guarantee
that essential industries will get their fall requirements during
this winter.. Small production gains are already bei~ registered
in several manufacturt~g industries in the "most essential" _ cafe -
gory, even though the Government's labor direction program is
just getting started.
Reverses suffered in three b~?-elections in Eire last week ,
reveal a trend away from Prime Minister De Valera and his Fianna
Fail Party. It is doubtful; however, that popular discontent will be
strong enough to remove De Valera from power in the coming gen-
eral election which he has no~o announced for "early neat year."
De Valera.'s times of the election undoubtedly reflects his calcula-
tions that the Government will have regained its prestige during
the winter months,
Premier De Gas~eri's attempts to stabilize his Government
by the inclusion of represenffirives of the anti-Communist Left e
making little progress largely because of Leftist fears that such
action would split the Left, 1f, however, the moderate Leftists do
not enter the Government while they still hold appreciable parlia-
mentary power, aid from abroad may so improve the Ralian eco-
nomic situation as to remove the Left's present basis for entering
the Government, R the De Gaspers Cabinet Lasts through the winter
- ii - _
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without inclusion of the madera 'Left, the )Premier's present re-
liance on Center-Right collabo on will probably receive popular
support at the polls next siring, A proposed unification of Right-
ists, similar to De Gaulle s RP ,may further strengthen the
present collaboration.
Although the recent dro~ in wholesale prices in north Italy
has .been i~luenced by the seasonal increase in production, the
do~mward trend hae been caused mainip by the Government's credit
restrictions which have forced manufacturers and wholesaleirs to
turn hoarded goods into cash to meet current obligations. These
crr~dit restrictions will continue to have a restraining effect on
prices but will not prevent some increase when the previously
bearded goods have been consumed. A reversal of the present
deflattot~ary trend can be expected unless further measures are
taken and substantial imports are assured.
EASTERN EUROPE
An intensive Soviet cam sign to in control in Greece is
indicated by reports of increas m nary a o egos and
Bulgaria and of plans for the imminent formation as a "Balkan
Army" {see page 4).
? Rumors of-the imminent ann cement of a Balkan Federation
have gained neva impetus as a result a recent meeting of Yugo-
sla.v, Bulgarian, Rumanian, and Hungarian Communist leaders in
Banlok (western Rumania). The USSR, however, has little to gain
from the establishment of a formal federation .~t this time. More
probably, the meeting was called in order to include Rumania and
. Hungary in a series of interlocking mutual assistance pacts with
Yugoslavia and Bulgaria, supplementary to the cultural agreements
already uniting the four co~u-tries. The Communist leaders of
these countries can be expected to hold further meetings in order
to plan the joint execution of the Soviet program for the Danubian, area;
The Communists are ea~loiting Czechoslovakia's severe
food shortage by emphasizing the promise of the USSR to provide .
adequate supplies ~ wheat this winter and by charging that the
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inefficiency of food administrators in Slovakia. requires their resig-
nation, ~ However, unless the USSR makes early delivery of the
promised grain, the Communists' current propaganda campaign
may boomerang. Popular discontent with the food shortage, partfc,-
ularly in Slovakia., may then be directed against the Commwnists far
their false promises of Soviet aid.
Zoltan Pfeiffer's fltaht from H~~ and the imminent dfs-
solution of his Independence Party are indicative of Communist
determination to hasten the elimination of all opposition parties.
As in other Satellite couatrfes, the Huragariaa Communists have
resorted to tts? faaailfar strategy of charging their opponents with
espiaanage. Sarankovics' Democratic People's Party will probably
be the next ~rvup to be caught in the ever-widening Communist-
designated ,spy rings."
NEAR EAST-AFRICA
A potential threat to Arab nolttical unity arises from the
long-standing rivalry of two powerful groups in the Syrian district
of Jebel D~?uze, which was brought to a head by recent fraudulent
elections. Uailess the Syrian Government can control the coffiict,
which has already reached the point of open hostilities, disorders
igay spread throughout the countayp, thus: (i) threatening the in-
ternal stability of Syria; (2) hampering Syrian military cooperation
with the other Arab states for possible action fn Palestiae; and (3)
possibly leading to intervention by other Arab states in support of
one of the Druze. groups,
The recent guerrilla attack on the Greek t of M~tsQ~
(a key town an communication lines in central Greece) was the
strangest and most prolonged yet undertaken by the gaerrillas.
Following two weeks oaf fighting, marked by the successful employ-
ment of standard tactics rather than the usual guerrilla tactics,
the guerrilla. forces are withdrawf~ noarthvvard with little pressure
from the Greek Army. It seems likely that the main puipose ~of the
attack was to draw Greek Army forces from the important towns of
Ioannina. and Florins, possibly in preparation for large-scale guerrilla.
action in those areas.
-~ iv -
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~'A~ ~~?~
Akt~~~.~~Ri~t ~~~~~ ?e ~,~~ed t? get~~ ~~~ -
~hR~~i ~:~~Id~ ~~ the ~ ~hi~e~e ~~a~~a~ai~t ~~e~~i~~9.
the ~~~~i~t~ Mill ~~~~e~:~ ~atec a i~ ~e ?~er~
~iI ~~ Q~~e Isere ~~:
~hi~e~~: ~~~~.Ii~t ~.~ _ ~~we3g ~~~ i~ ~:~~~e~ the
~~~i.~i~e ~a~t~~ i~. th~~~e~es~ l~~ti~i~: aie~e~~e ?f ~i~i~A w~i~h
~~ s ~ee~ ~e~ ~~~. ~t~ bq ~hi~e~e ~~~~ai~Pc ?~ce~ ~~p?~edAy
~.t~~~~e~i~~ the de~e~~e~~ sip ~? tee. I~ tt$e ~e~~ ~i ~$
h?w~"F~e~p ~~.ti~.Ii~t air p?w~~ will ~T~~I~' ~e ~?re ~ ~ dete~~e~t
the a ~e~i~i~e ~~~t~~ e~~~e ~~~ffi~i~~ ~~Ii~e ~~~il~ ~~-
~~~~?e ~ e~~ill~ t~~ti~~ ~ ~e~~~e ?~ a a~~eh~e ~ ~t ~t~~tr~~
t~~~ets ~ith~a ~~i~t te~?~it~~y. -
~~t~ ~ti-TJ~ ~e~.tie~t tae ~hi~ae~e C~ ~t
h~.~ ~e~~~e i~~~ea~i~~I~, e~~e~t ~ ~e~e~t week. ~hi~ i~~~~~~e ~
~ti-~JS feeli~e ~~ b~ m~ti~ted bq ~~~e~~ that: ~~~ ~a~ i15 ,p
~~,y~8~ ~~ ~~b~t~te,~.~ aid t? the ~'~ti~~a~a~~'~~~~~~~tq thit~~, ~~ta,~ii~~
~.A~~. ~~~~v~d~.~~ t6s ~i'S~~'~' ~ ~. ~~~~r ~.C~i ~1+~E.?t~v `Fr~.?~?i~~~8s~t ~:F~.~?'
~ai~~ - ~d ~~~ the ~3~ sag ~~i~t ~ ~e~~~~~ wither ~h~ ~ati~.I
C~~~ve~e~t ~.~ ~ ~~e~e~~i~ite t? ~h ai~q t~~~ ~e~~~ ?~e ~~ e
~~ffi~i~t~g ~~e~.te~t ~a~~~?~~; the ~~~~ti~ a~~ i~ei~ie~ep .~
the ~Tatfal G?~ee~t.
~?Iiti+ ~itti~ ~a ~~~ ~ te~~e ~
~i~-~~Ie~ ~d ~ad~~~s~~~e~e f~t~i a~~a~~~ C~i~ues t~
i~~~ea~e. '~h~ a~e~ ~it~ati~ss~ ~e~~ eA~~I~e9 ~ e~ eth~i~.
~~-~~s ham ~e~ t? e~~e~~ t~~i~ ~i~~~tea~t with ~~re~~at ~~im
~.~.~~~ a~~a~~~~.e~t~. _ ~ewhile, ~~ehtiaP is~~~tl~ I~a~e~s ~e
.II b~i~~ held ~.~ "pr~e~ti~'e .~~s ~itht trial.
~~~e l~u~t~~,li ~8~' ~?~e~ae~t?~ Ian ~ati~s~li~~ti ~
hay p~e~~.~it~,te~ bye ?~ the ~itte~ea~t ~Aiti~~ ~t~~~Ie~ ~ the ct~e~.
hilt?~~. Pdh~e the ~ve~?~~ent h ~ f~ie~~ Ifaffita~~ ~a~~rity
t? ~btai~a ~~~~?~~~ ?~ the ~a at the ~a~~a~t ~es~i, thy: ~~~iti~
i~ eec~eci t? ~el~,~ its i~p~e~emmtati~a ~~ ye~al aet~~. ~lae tf~-
a..li~a'sEi. i~~~~ ~~.y there~~ ccs~e de~i~i~e i~ ~dete~~~i~~ tffie Ida?~
~-~~~Tt~~~B9t~S `~~it'e..
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~~~e~~ ~a1~~~c~Y a~aa~es$ i~a a Philp ~a~s ~~ ~~aly t?
~oRl?w e ~ 1 A3c~ve~.be~ ele~tl~~ 'c~E~i~~ ~e e~~~~et~ ~? l~ac~e~.~se
e ~~~~t~~ )c~~l~y e~$~yed b~ Pme~ide~at ~?' ~3ber~l i~rty.
the ele~l~~ ~e~~~~hflp ~ ell~~a~e r~~~ec~l~e f?~~~A eager?~~~ .
$~.a.~ ~d ~~a~~ ~e~?~e: ~1) may res~ra~~ u~~ ~e Gt~iert~a~re~nt`~s .
~~e~sf~e ~~~~~~~ ~ e~?rci~~ ~~.~ a.~ael ?er; d ~2) ~y ~?pe
?~ ~?~rec~~g a ~~~~ ~e~pme ~~~ernr~e~fiaA c~r~ui~a.
~~~eq~e~~y, dl~~e~, ~~y ?ff ~~~ ~-~~i~ed by dt~~~de~t~,
l~.~less 1~~~~ ele~e~at~, ~a~.y be e~~~~ed ~? ~c~~e.
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~~~~~~~ ~~~~c~r~~
~~ ~~: a~~~ ~~~.~~~~~~ bear ?Yi~~~~, ~~~ ~r~a~~y ~~
~~,? ~~. ~~~wn ~~~ --r~~~d ~ ~~~$~~~ fir .~?~~ aid, ~?~~ ~.
.~~a~~ ~.~ ~ w~_?~a~~
epr~?~.r~.ly9, .~.~~~.~fsf~.~a~a~ w~ ~ G??~~~~a~~~ whi~~ ~s ~~~~~~m
.;~~~~ ~~~ ~~s~r~~.~~s, r~~~.~~.~tf~~ and ~~ead~~ ~~~~~~~.~~ 1~~
~~~~~: ~~: ~. ~~ ~~.~~ ~f ~?~~~~ w~.? are ~~~~.~~~ apa~t~~ ~?a ~~a~
~&e~~~.?~~o- a~pare~m .~ w~.at ~ ~a~~r~~~~~ ~ ~~ far fa~l~~
~~ ~~ is t~ ~:;~~~ ~ ~~~~~?rat~ ~ ~ a~pt~~ar ~~ar~s v~
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~~~~~ ~~~.~~~ ~~ ~~~.YY ~~~~~e~s~~ ~~ ~~~ ~~~~~Y~ ~Y~Y~B ~Y~xa~~l~
~ ~~~~ ~ ~e~~~~~~Y~~~~~~ ~~~s Y~ Y~ ~3a~~gY~ ~ ~~~a~Y p~~Y~c
~~~~~,Y ~~e ~~Y~Y~~Y ~~~~~~Ycy~~ ~~ Y3~~~~ ~.~~ R~~~~ka c~iYY r~?
~~~ ~~ Y~~?m~~~~~~ ~~~i~~~Y ~Y~~~Y~~m wYYY ~~~~~Y~ ~~~~~~ Y ~~p
~~~~;~ ~? ~~~;~~~~ YY~~~?~.~ ~~ssY Y~a~~~~~~~~ ~~~~ ~y t;~p~Y~ ups ,
~~~ ~Y~~~~~~~~~m ,
~2?
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N~1 C4NiNlUl~ttST PQLIC~ IN FRANCE
The increased subservience of the French Communist Party
to the directives of -the Kremlin has been made apparent by recent
statements of Party Leaders Thorez and Duclos that French Com
mEUnis# policy would follow the line laid down by the Cominform.
These sta#ements indicate that the French Communist
Pa~.?ty will now alter its tactics from those of a "loyal apposition,"
attempting by political mean. to share in the Government, to those
of an out-and-out opposition grotty attempting to take over control
of the Government, Consistent with the shit in the Communist
line from "anti-Fascism" to "anti-Americanism," all pretense
of patriotism except that of defending France against "American
imperialism,;' probabi~ will be dropped. To defend the nation
against that "danger,' however, the Communists are calling for
labor and "democrats" to rallq to the Communist Party and are
attempting to organize the workers in towns, villages, and factories
into `committees for the defense of the Republic.'
The public utterances of Thorez and Duclos and the Party's
activities in support of the new policy are expected to have a dual
result: a decline in Party membership and support, as ig 1839;
and a weakening of Communist domination of the General Confedeara-
tion of .Labor (CGT), .Already, some fellaW -travellers and a few
members of the Party are showing opposition to Thorez's plans.
It this trend continues, the Party will be compelled to rely only on
its hard core of militants. The open subornation of the French Com-
munists Uy 3Koscaw will lead many Socialist and labor leaders who
have not hitherto strongly opposed Communist leaders of the CGT
to work activelq against them. Yf the Communists should lose con-
trol of the GGT, they will have lost their most powerful ~~~eapon with
which to attack the Government and the Damoclean threat of a ,gen-
eral strike will be removed.
-3 -
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SOFT PREPARATIONS TO GAIN CONTktOL IN GREEGE
Reports of recent military activity in Yugoslavia and Bulgaria.
indicate that the USSR, temporarily blocked in Western Europe, may
have began a more intensive campaign to gain control of Greece. Be-
sides making preparations for increased Yugoslav and Bulgarian
assistance to the guerrillas in Greece, the USSR appears to be build-
ing those two cow-~tries as the dominant military powers in South-
eastern Europe. Full development of the Soviet plans is not expected,
however, until after the. London meeting of the CFM.
Increased Soviet military aid to Hugoslavia and Bulgaria is
indicated by reports that: (1) Soviet arms and munitions are being
sent to Yugoslavia and Bulgaria, both overland from Austria and by
water through Black Sea ports; (2J the USSR has transferred several
naval vessels to the Bulgarian Navy; and (3) extensive stockpiles of
war supplies are being built up slang the Greek and Turkish borders.
Ia addition to preparations for greater aid to the Satellites,
Communist plans to increase ciirec~t miYitiary assistance to the Greek
guerrillas are revealed by recently available reports of secret mili-
tary clauses agreed-upon at the Bled conference last August. Accord-
ing to these reports,. a General Staff of the Central Balkan Council
has been established under the chairmanship of Admiral~Rodionov,
former Soviet Ambassador to Greece. His staff will reportedly in-
clude Yugoslav, Bulgarian, Albanian, Rumanian, Hungarian, Czecho-
slovak and Greek-guerrilla officers who will assist io the operation
of an International Brigade, or a "Balkan Army," consisting
primarily of Greek, Yugoslav, Albanian, and Bulgarian personnel.
Moreover, recent indications point to. the imminent formation of a
civil governmeirt in northern Greece. Such. a development would per-
mit more overt utilization of the military forces being organized~in
Yugoslavia and Bulgaria.
Despite these intensive military preparatiaais sad the failure
of the USSR to begin withdrawal of its troops from Bulgaria (scheduled
under the peace treaty to be completed by 25 December), the USSR
probably does not intend at present to participate in overt military
operations in Greece. Instead, the USSR is preparing to meet any
-4-
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de~ele~g~e~ts ~rfs~ fr?~:o. the L?x~d?~ ~aeet~~ ?f the ~~~. ~[~~-
wh~~e, these actp~fties ~?t ~{~~g~~y ~~~re~se ~~aBSy~~.te~.litpe ~9~tentt~ fgj?,,r~8
Ci~~l?~~$~'.~`~~&d"i ffi~~~t~~"y ~.~dl t? F.id~e ~LA~?~.~.~ ~~.~?~'81g6~-4', ~~8~ ~.As? ~i~~std46i0.~.
aaa effe~ttve we~.~~n the ~a~ ?f ~ae~~es ~~~~st the meek ~ee~n-
~e~t. Ffaaa;iYy, these sett?~ns serge t? stx~ean~then ~~a~r~sl~vis. ~d
f~t~a&~~a.~?ta as eff'e~tt~e ~defens~ve -~~affers ag~.fi~st ~y ~ ~,~afaeri~tst's
ag~~?essio~a frc~~ the ss~th.
-5-
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 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8
Map Branch, GA
10862 November 1947
CHINA: COMMUNIST CONTROLLED AREAS, 1 NOV. 1947
U. S. Government Printing Off'IC~ ,
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~ ~. f A L:.
F .~ v :.J ~ti
O ?~ JrrE H O L )
3 f^?.c Ch'ih-tehg Hsimli,ty ^mi
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4
Pao-t'ou KUEI-SUI uan uan
~~~ ~~~~ ~.Ta~ ~ V hsien C_h'ang~li~yJ
? J ~ t,.~ / Tien- {y+
NINGSIA~ - ~ Wu4'ais ! c !n8
~'1 ~~i-'~ J' Hsin-hsien i' 'ING-rV~ AN
7s / `i' ~ l - ~O P E H
~HL..V, 'tlairianli5 ~ c1c.
~~'J S ti' T'ai-ku >f h~a~
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K A N S ! ~Z tr oleo Lu-an' ~1 L 1
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t) H'ANGANr~ ~ ,ENG -
S j H O N ANN ~ ?~C
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~ ~..w.J
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SZECHWAN
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f, ....,~' .~ ~t. HUNAN ~? ~.. ~t I pp /I?Y.i
CHEK'
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H S I N G A.N
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Arthur PORT ARTNUR
' NAVAL BASE AREA
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r
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meo do not neces:.uh co.resaona .n an cases m
Ina Eounaeries reoognieea Oy Ina U. 5. Govern-
ment.
/l
~G55
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S O U T H
CHINA
CONFIDENTIAL
Scale some es on mein map.
~JNONG KONG
ttx.t
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THE MILITARY SITUATION IN CHINA
Although the sixth Chinese Communist offensive in Man-
churia has failed to dislodge the Nationalists from any of the large
cities they previously controlled, the strrategic initiative in the Chi-
nese civil war remains with the Communists. The latter have in-
flicted heavy losses oa the Nationalist forces in Manchuria and
have recently extended their military operations into Central China,
south of the east west Lang-hai railroad< The Communist forces
appear to have the capability of carrying the war into other areas
of Central and Sduth China, where National Government defenses
base been weakened by the movement _ of Nationalist troops to the
. north,
At the termination of the war against japan, the National
Government possessed the best-trained and-equipped native army
in the history of modern Ch~tna, However, in the two enauiAg pears
of civil war, the,Chinese Communist forces have strikingly dem-
onstrated their proficiency fn waging effective guerrilla warfare.
They have displayed an ability to capitalize on such prominent
Nationalist weaknesses as a tendency to overestimate Nationalist
,operational capabilities, corrupt and professionally incompetent
leadership, and the ~ lacT~ of supporting communications adequate to
bring operafilosal plans to a successful conclusion.
From the begitmfng of the civil war, long-range Nationalist
objectives have included: (1) reoccupation of Manchuria; and (2)
control of the area south of the Lung-hai railroad, to be lollowed
by the opening of the Tientsin?Nanking~ (Tsin~n) railroad. To \
spearhead this offensives, the Nationalists initially employed 39
divisions trained and equipped by the US, However, the outstand-
ing ability of the Communists to avoid pitched battles, to draw the
Nationalists into extended and untenable positions, and to infiltrate
between advancing Nationalist armies and establish operational
areas in the Nationalist rear, enabled the Communists ~to rwllify
any progress made by the. Nationalist armies and to reduce the
original 39 divisions by one third. Moreover, the Communists
have rendered the Nationalist salient in Manchuria extremely vul -
nerable, re-established their bases in the Dace "pacffied" areas
south of the Lnng-hai railroad, and successfully resisted National-
ist attempts to open the Tsin-pu railroad.
-6-
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h? the fnt~rey as ~aa~o~? ATationaRist-held areas and teats
become isolated from each ether and from their bases of suppler,
Atationallst mll~t~.ry strez~~th msy be ~~ected to cleterlorate at
an increasi~~- paced ~onw.aaatatlon 4f this process--which will
lne~tabl~ t~ accompanied bar farther pol~tlcal -and ecoa~oax~ic
decerioratlon--ffia~t lead within a g~eaa~ to decisive anillt~.rp suc-
cesses for the ~hia~ese Communists and to the I~Tational ~o~--
ert~n~entss diga~tte~eationo
-7_
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 Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8 ~4~
~t ~
Peres
TR~S ~ ~R~E~......, ......................... f - ~
P~~sps~s ~~r a A~t~t~~eraF ~~r T~e~~g~ .............. ~
~e~~~t ~i?~~c~cs ~ ~~A ~?r~~ ~isc~ssi~s ........... 3
Czech?sl? Easy-~Isst ~?~?~.~e ~a.l~~.e.... '........... 4
~~g~~$c~,~i~~t~ ~ the ~~i~u~n~ :~ ~~s~ .............. 5
Dock,... -~- 1.9~a.
Y~O, C;Ii.~lGE 9.n C ~.
~,~. ;
gate : _~---~---"'_"'
ET
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?I' ~?, la. ITT l6 S I ~? U H, I E F
G~`~l~A~
Tie,. ~C~~ C o~e~e~c~ .~.t ~~~~z~ ~~~ ~e~?resent the final
o~~ortunity to orr~.n~,ze world ai~? traffic under a. n~.ultilateral air
treaty (see z~ag~ i~.
S?viet in2en~ic~~ to fores~.ll solutian aff the ~orean_flrol~lerr~
by ZTk~TGA a~?e clearly indicated by the first moves of the Soviet LTN
~elegati?n (see Wage ~~ e
Fu~.ire LTS Satellite dis~e~tes, over peace _t~?ea.ty int~~reta~
tio~~ nay he fore~~adowed ~~ the ~?ntinued refusal of the R~ungarian
Governrraent to accent the i7S contention .t US military aircaaft
are entitled to fly into lip'ngary in sun~aort of the activities of tFie US
re?aresenta.fives on the Allied control ~?sa~nraission during the 9~-day
~r~E.hdrawal Reriod ra~?ovided in the peace ~eaty~ ~Iua~gary insists
mat it has rreg~.ined full so~rereignty and-that the treaty contains no
clu~.lifications~ cog~firrning the ~S position which holds that Hungarian
ner:nits for such flights .are unraecesss.ryo
Yugoslavian effoa~ts t? ~~n~ ai~r~~.~a~ o~ei?atio~s beyond
So?~iet-~cont~?olled areas are continuing. Tlae latest evidence is:
(1 ~ a Yugoslav sopxication $o the Mice of t3S 1Vlilitary Government,
G~exrraany, for r~ex~x~ission to make a traffic stogy at Munich on a
route to saris; and (2~ current Swiss~~i'ugoslav air negotiations, ~
designating tlae near Yugoslav airli~ae J.~T (su~Posedly'entirely awned
and o~erat~cl lay Y~agoslavia~ instead of age So~.et-controlled Yugoslav
aia line ~'LIST.~i, the Yugoslavs a~o~arentl3? hole to #orestall I3S refusal
#or zonal overflight iay ~.n airline not really ov~ned and controlled by
Yugoslavia. Regardless of permission to fly through tIS occupation
zones, however, the "yugoslavs can ~.ke advantage of the Italian
r~eace treaty terms to overfly Italy into Switzerland and ~~estern
3e ~A~~/Ne o
V(~ESTER.I'eT Ei3H.~JPE
Iaestaite R.aynadier's narr~av victor~r in the vote ?f cernfietenc~,
France's political and economic situation continues desperate. The
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Centxist coalAtion Co~e~?n~::nt wiYl px~oh~.~:~~ cc~ntin~ne to be ineffective
in dealitng wftkn French ~:conoic proi~les. if either of t~~e two e~-
trea~P groups, ~e ~aa~~.le's R.T~~' or khe Coxna~t~h~is~, s.tte~pts to ~.ke
~s~ver, civnE war might res~ltQ Ra~nadiea~ wild. atte~.pt, therefore, to .
retrain pier as 1?ng as~ ~?sF~i~le. Re is ~.ike~.~ to succeed for the
newt few creeks st least while t7e Ca~xlle ar~d the Comn~tinists are
strengthening ~~e~selves for Srhe showdown which F~?enchzxaen he~
lieve is i~aevi?~b1eP
'~~e C ?~~?n~st c~~,~itio~ in ~c~.ndina~ria , ~~a~ ~,~be~~a w~ake~~cl
b~ the ,noting in r?eee~t electio~asa ~ the ~a~aish gea~eral election ?n
28 C?ctoher, ~e Com~t~nist r~~spnlar vow declined 45% and the Coa~-
rn~nist ~art~r lost 9 of its 1~3 r~ax~liarnent~.ry seatse `I?he Social I~en~-
ocr~ats anc~ the lihe~?al x~a~rties gained at ~e e~~ense of ~e e~renle
T.,eft and Righto In nation amide rnu~aicipal elections ~ I~ore~~ag on
~0 ~ctoh~r, Coxr~.mnnis~ v?ting semen declined ~.9%, ChAef factors
in the Com~raunist decline apneas t? he dislike of the Co~ninforxa~a,
a wades read feeling that the Parma is a.n i~asfi~?ianae~at of I~xe~nlin
~?lic~, a?~d a ~pe~kening of fav?~?ai~le p~a~lxc s~:ntin~eng concerning
CoFnra~t~nis~i resistance activities in wartime.
R.et~~n~ ~~??xn the Swiss r~~.ti?~ ~~e~~~ons of 26 Octohe~
in~iacate r~o ~?adieal ch~,a~ge in the nrs~~.ke=~tnof ~~~e relativelg~ conses~.-
tive Swiss iVationai Council (House of Represea~tatives~~ ~'~he gains
of the middle -of -the proa.d R~.dicals at ~ e~ense of ties left.~of
cente~? Socia~.ists seems to indicate disappro.l off the letter's of
forts to ?'eS&d State eont~?ol ?f 1nteY?31ta1 eco~aona~, while the ~ooT
showing of the Cornnra~nnists illustrates Swatzerlandas general anti-
Co~aa~rtunist feeling which was in~nsifi?d dust before a elections
b3- $he esta~lislarnent ?f the Corninforrn.
EAS'~ERiV1 EUR~??E
Czechoslovak indaastrial production and high s#aaidard of
living are endangered b~ the ~sresent pressure to starengthen eco-
nonaic ties with the USSR (see page 4} .
ii -
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r~~.3~''~~ e~feat~d by thy: r~t~~r:~ted ~ss~~~t ~~ t~~~~~ ~~, ~?a~~ Sca~~~~
ax~? f~~~~ ?:~~~~~~s t~ ~~.~~ ~z~~r?s~s~~b~.~ ~+i~t.~y a~t~ici. T~~se
mfg f~~~ 4 ~,~~ ~.~l~~~d1~ ~~d~~ c~~c~~~~a t? ~~e~~~~at ~ ~s~~p~ ~t ~x?c~~
~~~st~~~ ~~~~~~s~.ss~~,l~ ~tt~ ~~~~~~~s, ~~t ~t ~a~~~ ~~~~~~ a~ ~.~~~
~,~~ ~~t~ae~~tg ~r~~~I~.g~e~~~ ~.t~~.~t ~";~~~~ ~s~~?s~?~~~, ~~i~~ t?a ~~~~~
?~ "~~~~~.x~.ta9.~a~ ~I~~~ts ~~~ t~~ .~~a~~ ~.~d ~ .~~~ E~~c~a ~~e
~~~s~~~~ ~f ~~r~s~ ~~~~~~~s ~~l~a~ ~a~st~t~; ~ ~~s~ ?~r~~~ ~~,~tt~i~~
t~~~a ~y t~~~ S~a~~t ~~1~~. ~a~ ~~:~~~Z~ssl?~~.~ ~~~ ~.~~a~.~s~s~~e ~~
~~d~~.~~k ?~ ~~~~~t ?r~=cps pia ~9~56
~?~e,~ ~~.1 ~~ ~ce~~~~a~ ~T~.tta~~~.~, ~~~s~.~t tr~ad~~ ~~~~~ is ~?i-- ~
~~~~~ ~ a,~s~~.l ~~..tt~~~ t~f ~ a~~tasf 9~~~~~~'~~d t~~~.s~~, z~~s t~
~~st~~~ E~~~,~eW, ~.~d ~.~e~~'s ~~x~~~ct~?~ ~~. s~~~a?~.zs ~~~~s ~s s,im
~~~~st ~ ~~~~~~~~~. ~esid~s ~~.~~ ~~~ ~~ ~ ~~~~~d ~a~~t, ~?~~e~
~aess~~a~s, a~~d ~.~~i~~d~.t~?~. o~ ~gi~~~~ss~s, ~~~ ~~~a~Ets ~.~
t~~~~s~?a~~d. ~.~~ ~~ ?~t~~~`~ ~~c~~k~t ~~~~s ~~~at~ ~~~ ~~~~ss~d
~ di~sn~~ ~? de~~~d ~~ff~.~t~.
T~~ ~~s~.~~~a~~~~~ ~~ P?~ts~ ~~~s~,~t Pa~t~ ~~ad~~ ~?~.a~
~~ ~?~~s~ ~'?~a~~~~sts t? ~~~~~~t~~t~ t.~~t~ ~~~~a~ ~.~~~ c~ ~te~~tti?~
~f ~.~~~R~an~~~st e~.~~~n ~~ ~?~ts~ Sc~~last Pa~t~A ~t~~-
1~.;~~~~~'s d~.s~~~~~.~a~~~ n2~.~~ f~ ~~ss~~a~~ ~?~ ~~e ~~ca~?~~x~~~~~~t
i~.~t~,o~ ??hisF~~,?g?~.ts~n ~~s,ssg~~.t?~~~t~ ~~5~.,- t?y~,s~t~~ ~:c~~~a~ c~~ e
1~Gd,!i ~~ `~..~~'~ E~ 5~E{~. ?~1 ~. ~' ~~. X"A~i 1J ~n~~a~+'~t~~~~?9 c.YB~n~T ~~.`a~.~ ~.? ~~r~''i~.5. ~m
~~sttit~a~ ~~~vs~a~~~ ~''e~la~c~. ~~~ FSL ~t~~ ~~~ sa~~~~a~~ t~.~ ~~~-
~~~a~~~t ~~~ ~.~d e~~~~~a~Iy ~~.~ ~~~~~ ~~ ~ ~~~tt~~ ~?~~~~~a~nt~
~t ~r~ 5~~~~.it~t~ ~.~~~~,~ t~~ ~c~ t~~ ~~ C?~~~c~.ti~~~st ~'_
~~t y~ ~'a~.~.~d. C~~~~~-~~st ~~~t~~~ t S~a'~as~' ~a~~~~?s~ ,~~~
~e~~~st~~.&~d ~~ ~ s~?~ e~d~~s~~~~~ ~~~~x~ by a~s~ ~~ad~~s tc~
s~~~~~~~ dgs:3:~~afsha~le fr? G~mm~aist ~~lt~i~s. ~~nfs e~t~r~~~ I~~~?
~~z~i~a~a~YS~ ~c~sat~?~x a~ t~~ ~~~.d~;~~ ~~~~altsc~ g~~~ ~~~~~ ~~.~~~&~-~~~
~~.e~~~ts Q~t +~ t~~ ~a~ty t~ ~~~ ~~~~s~ ~r~s~l~~~s,~t~d1g' t~ ~~~~~ the
~:?a~n~~~a.ntst 1~~. ~~~~?~~~, ~~;.~~~~ ~.~~ .d~~~.~~~~es ~,t ~ ~?a~az?
nests a~~ ~a~~.~~~ t? ~s~ a ~~t~~: S~~i~l~st ~s.~~~ ~.s s. sv~~~ghe~c~~
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fo~? f~,e f~ag~rr~a~ion of a Aef~ ~~va~~g Soei~.~.i~~ ln~erg~a~i?nafl 5*~hieh ~~ould
exei~ade ~?igh~ ~rir~g ~E~ciafli~~~ a~~d ~Fro~.~.d e~m~~era.~Q ~~ttka fhe new
~'on3info~?r.:~~ ~+1una.ero~x~ eo~.fere~~aoe~ bed;~oe~a ~'vfli~b SoeaaYi~~ Party
leaders and ~e~k?e~e~a~~.~~.~e~ f~?oan oth~~ Eu~o~ea~ c?uu~~ie~ i~,dioa~e
.a~ the l'9c~lisln ,~oeiafl~.~~~ r~a~ die dying ~? e~talili~h $.he outpiine of
e~oh an o~aganizafi~,ox~ before tl~e se~xai~p~,uafl ~eettr~ of ~: Eu~o~eaxx
Sc~^i~.li~t ~a~?fcie~, to be held at ~~.n~ie ~n ~eeeero
~re~.n eoneer~.. ?~r~~ ~ a~~l~z~~ce ?~ the ~'oiee of 1~me~iea
broadea~t~ may Yee ia~~sieated by re~G~~ atwe~~te ~o ~?e~u~e ~peeifie ~_
fae~~ ~~e~e~~ed i..n she ~S frak~sn~i~~ion~~ Pre~'iou~I~s', ~,~ eomn~enf-
i~g ?~ the ba?o~.dea~w~, the So~~ie~: ~src~~ hay ~e~sed i~a ge~aer~afl
terms fide ~ie~r $.hat the ~rog~?~.~~ ado ~~~??ts~.ga.~adi~~ie. R~oen$
edifQa~a~a~.s~ snecifieafl~.~P a.e~g, ;portions of the &~roadeas ~nhieh.
ame eo~eeed ~~rith lTS sndardti~ of li~~ suggest that $~ae ~~?esent
So~~~.et ob~~~:ti~re is to r~ersuade 4~o~?iet ~a~o~?:~ey ~ ~ they are not
worse ?ff than ~S anor~ex s.
t~.R ~;~~5~~~.~'?~fl~.f~
~?,~ de~reflo~s~ez~~~ ira ~h~ flndzan ~~~e o~ ~.~.~l~rr~i~? ha~re
sued seri~aus ixn~Iiea'~~,ons ta~aat ~tey may Head ~o a ee~~.l~.~se of go~p
~:ra~ment ~.u~oritg~ in India and Pat~?ista.n or e'en to ~~ar be~nveen
$he ~o cflo~i~aLons {see~~,ge ~?o
l~n~~?o~ed nx?s~eets of ~?e~eflect$?n fo~? Prime ~inistear 5rr~c~ts
in the,n.e~ Sauth ~.~x?ie~.n genera: eflections {~hieh kill ~rob~.bk~r be
held in ~~~~~ aner~pa~e ~: li~~efliii?od mat fl3i~-~Soufi~. 4~riear~ ~?eIa-
tions ?~ri~.l re:r~aitu h~rrx~onious and advan4:aageous to fihe UKo In ttae
oast ?nth and ~. ~.xf, S~aaz~ h~.o~ gained sta~ength by f~.ilure of the
~aation~.list ot~nosit3on to rec?neile rr~.oder~.tes ~,nd e~t~emists and by
no;~ular ~.~~ro~~. of ~e fay his ~.dn-~inistratior~ h~.s hansiied tine
Indian ~in.oril~ and you ~~est. ~friea xna.~~date issues before the
~j ~6 a~ e
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BAR EAS~?
Al~u~h E~ench ~ffic~.als helia~e t~~.t an a.eee~~.~ale settle-
rue~t ~f tthe ~~e~chsViett~~rm di~~a~fe e~.~ lie ~e~~~ed i~~~~~ s~g~-
ful ~ae~~atiati~~ with fo~?mer Ee~ ~:~? ~~.~ 33aip ~.~ as ~u~e ~.i~el~
~~ ~~e a~tici~afred a~??~e~e~t ~.~?a~ld c~ecr ease t~~e e~-e~perox?'s
f?lk~vviu~ a~td! i~ac~?e~.se su~a~o~t f?~ President kl? Chi i~ltiuh and t~~e
Viet ~Iit~ka Le~.gue~ T'he ~'re~ach ~lar~ wound ?ffer tau F~~.l's uati~~-
alist f?~lo"~ers additioa~~.l coaacessious as to dz~lou~atic ~?e~~?esea~ta.-
tio~a ~.ud c?ntr?a of the ar~~~: ~.~ ~e belief .at such concessions
would fhc~?e~.se Pa? ~~.i's fol~:owe~?s and lead to a ~?s.pp~?cs~hea~en$
between diet ~Ynh elements on ~e ?t~e .side.--pe~ha~s i~acludiu~
~? C:hi Nii~'x~am-and a French end Eiao ~aa mn a ?ther~ Such a
ra~t~~c~chement would be unli~el?~, hc~c~ae~er, because cgs wed
ind8~te ~~ the natia~aalists ~.~ ~3s,o 1?ai .d caffiprorzYised in hips
de~.aa~ds f?~ independe~sce<
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~Rt~SP~CTS E'?I~ A ~dITL`~'YLATEItAI~ AlR T~A7CY
Thee future of LTS intera-ati.+~nal air transport operations may
be adversely acfected if the YCAO Con.~:erence which opens on 3 ~'overn-
ber at Geneva is not able to agree on a comprehensive multilateral
treaty. `i~ithout international agreement on basic principles, ITS o~er-
seas air operations: (l) will be increas~gly handicapped by local
restrictions in s.reas along world-wide ITS air routes; and (2j ulti-
anately may pro?e economically impractical.
Yyivergent ia~terests have splifi th~a participating countries
into three groups. The first groaap includes those countries--such
as the Netherlands, tL~~e Scandin~via~n nations, ~?raece, Canada, and
Australia--vrhich are already established as internatio~aal air
carriers and wish to exloloit their fiinitial ~.dtage with rcainimuan
hindrance. This group, therefore, desires a anultilate:cal treaty
which would provide for aaatoffiatic and obligatory exchange of air
routes between the signatories. A second group is opposed to a
aultilateral treaty. This groaap includes such countries as the Arab
League states, ChiRaa, and A rgentina, which cannot compete with the
larger countries as i$aterna$ional air ca~rrie~?s and are principally
coaacerned with developiaag local aa~d regional traffic. These countries
consider unrestricted $nter~aational air operations a serious threat
t? the development of their own air lines. 1r dr example, the Arab
League states are amious to reserve to Arab airlines alA local
traffic within their combined territory.
A third bloc of countries generally supports the YTS position
which lies between these two ex>rreines. The ITS desires a gnialtilateral
treaty which combines the naaxin~ua~ freedom in international air
operations consistent with ade~uat~ protection for locaA and regional
services. ~?he YJS itself desires that the treaty recognise ba?oad general
principles which will guarantee YTS canimercial and- strategic regeaire-
ments and create a favorable basis for the continuation off YTS pre-
eaninence in world transport. The YTS also. desires protection against
indiscriminate entry by foreign airliaaes into the YTS, the greatest air
travel Ynarket in the world. In t&ae interests of national security it
wishes to exercise control over foreign air operations into the US.
The ITS and its supporters favor the adoption of the principle of "fair
and equal opportunity~D but consider,that details of mates should be
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left to bilateral agr, enfants. These countries, moreover, are willing
to accept reasozfable restrictiofss on the volume of traffic they carry
between countries on international routes, 4'wYhile the air interests of
the. UK are not ide~ftical with those of the US, any serious differences
probably will be overridden by top political considerations, and, accord-
ingly, the Ulf delegation is expected to support the US positioaf.)
The divergent views held by the participants will present
serious obstacles to the conclusion of a multilateral treaty, at Geneva
which resolves the major controversial issues. Certain of the small
countries, wh?se cooperation is indispensable to the development of
trans-world air routes, will exploit their position to force compliance
with their individual demands. The more powerful countries, them-
selves divided, may be unable to obtain a comprehensive multilateral
treaty.
As the pattern of international air transport operations is
rapidly becoming crystallized, the Geneva Conaerence may present the.
? last opportunity to organize world air traffic on a fultilateral basis.
The failure of this Confepence would give free rein to sectionalism
and refight prevent the US from maintaining the minin'-um level of
world-wide air operations consistent with US strategic, political,and
econonfic recyuirenients.
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SST` ~'.~C`I'I~S I~ ~UN~f~.:~~R,E1~.~T ~fS~CSSSft?~
~re~.~.a~i~a~.x~y~ So~et ~~~es iaa the ~Etx~x~~.t TJ1~I~,~s. ~di~e~~~~.ora~
.off tlae ~e~~~eaaa ~a~e~iio~ ~le~.xly iaacli~ate that the ~I xSR Rs +detex~aisre~
to f?~~~t,.~~,li ya8a~ ~o~s~~.ic~~p.~ ~aff~se ~ro~R~~ by ~.~. ~a ~,~~o~?ci with
~~'er~. GYa~ s7Q~a~B~wt~.1c~~xoy, t88r~ 5~~~ ~eb~~a1t~~fia ~& aiaia`~.~~~ntiy ul~ad~~' -'
stsa~~tioaa~ ~? ~e~i~e delay~?a.g ta~ti~?~ ~a~i~~a mill pexx~it the ~TSSR to
~aia~ta~a its ~e~fitcoa'6 iga ~oxea ffo~ a.s io~ag a tg~ae ~.~ i~ a~.e~es~a~?y to
e~haaast ~ ~atie~a~e:. of ~.he ~J~ ~.~~, thxa~~gh ~S ~~,f~acix~.w, to ~~~.~~
the ~t~aatxy ~a~~n ffox Soviet ~caoai~a~,t~.on.
'~lae ~~itial Soviet ia~?o~o~~,l, the ele~te~ ~e~a"e~eaatat~.?e~ fx~a~
~SOth ~o~~~ ~ ~oxe~. be ~.lAoa~~~d t o la~.xtie~.la~.te iaa ~.1~. s~,is~?ar~~fo~a~,
f~lffil~.~ '~~~ faA.~a~io~a of ~, ~talliag t~a~ti~ iaa ev~:xy xes~eet. Yt hay ~.il
tae .~~ag~ off `~~e~o~x~.ti~~' ~~??~e~a~xe bast, at the same time, it
is ba~i~al~,y aa8aaeceptak~le to ~ ~~5, iff oily be~a~as~ t~ w?axAd be i~~o~w
~~ble t? h?l~i ele~~~?a~~ a~~ t~ tx~,~~~?rt the ele~e~ cir~l~~ate~ to ~~.~e
S~a~~e~~ ia~ ~i~e fox_t~aea~a to bca co~~~lte~ ira tlai~ ~es~ao~ off ~.~.
~t i~ i~~o~~fble to ~xe~i~t t~~e e~.~t foxa~a of ffaataaxe ~caviet
stali~ag t~.~gi~~ be~aaa~e they w~
ll g~xok~biy be i~~~?ovi~eai c~sa ~. ~~
y~-to~
.
,
day ~aw~~. ~~Ewff:~~s~ y ~t ~~ ~~'~~Ba`$,~.~~ ~~c?~t, ~~ ~?Ega~' ~oi~at D.a~ trae ~b~?o~^~~~^~
ia~g~, the Soviet ~3ele~atioaa will ~.aaa~c~a iaato a pxog~.ga~a~a at.~~ ~haxg-
ina~ that the ~S i~ xe~~s~~a~ible .fox tae ~aa~xeaat ~tale~~.te i~a ~o~ea.
'7~ he theme of ttai~ cfffe~a~i~re wgl be th~.t the [3S f~ ~etex~a~.~aeai to yet
up ~. ~ep~,xat~ Mate ba Soa~th ~oxea fox t&ae ~s~x~~a~e of `?iaxa~exi~li~t
eA?itati~s~,.R" akexial fox ~tai~ ea~calsa~~a gill be d~?aw~ fxo~ the
x~;~eatet~ ~~.ai~s ?ff ghee Sy~gaxa.~aa., le~.~~ag S?~tfa ~oxea~ Rightist,
that: he ~~.~ made ~, aiea~. ra~it~a the ~JS fox the estabAisla~e~t of ~a iaa~e-
pexade~t S?a~th ~?~nc~~a. ~?~ex~a~aent aa~a~ex his leadership. ~ a~clitio~,
the Soviet ~elegaf:io~a will pxobak~l;~ saa.plPly vola~~a~a?aas statistics ova
Rightist ~`texrox~isti~ a~ts`~& ~.g~.~ast K~exe~.~a leftists. ~7~'hexe i~ e~i~
de~~e that tT~e S~oaath ~ox~aa~a ~o~aa~aists have beea~ ~nd~x inst~?~actio~s
to ~ot~apile san~h statf~tics a.ssid~o~asly ~?ece~t ~o~ths.~ ~?he ~'SSR
will ~?a~te~ad th~.t the ~S has. saa~~tioa~ed these arts ixa oxdex i~o ~xaasta
~`aiea~aocxatic~~ oppositio~a to its "ia~apexialist'~ aiaxa.s<
.~s a last xe~~xxt9 the ~SSP. will.. pxobly ~hall~:nge a ~aaxis-
di~tioxa a~ff the iaa the ~attex~ the ~o~iet ~elegat~.on will ~l~i~a ~aat
o~al~ the foaax s~.g~~,to~?ies t? the ~I~rs~?w Y~e~isio~ have ~y leg~.l i~,tea?est
in a ~~se ~aad, faaa~~e~?9 t.t aao ~.~ cie~isfon ~~ ca~?xy y weight
armless implea~ae;~ted by the o o~~appiaag powea?so
~3~
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CZECEQSI~O~Al~ :~AS??-~ES~ ~.I~E ~AI,ANCE
the Soviet a~ck on the Eurc~aea~n recovery prograffi has
jea~p~.rdized Czechoslovakia's delicate balance of economic depe8d-
e~ce upon both the Vest and the Eas@. Forced ~ poli4ical consider- .
ations to strengthen its economic ties wifia the Soviet Unions and
Eastern Europe, Czechoslewakia is nonetheless dependent ups tr~.de
wfth the Nest to rnainta~in presenf~ inclust~ial levels and to supply tine
~rn~.nufactured goods de~naa~ded ~- the East.
`The Czech?slo~-Sor$.et fire ~e~.r ag?~reement co~gaaded ~
July l94? is desig~aed to accelerate the eastward orientati~ of the
Czechoslovak econaoffiy. Under this agreerraent, the S~rriet iTa~ion
weed to place enders over a five ~e~r period for such Czechoslovak
products as rails, locoffiotives, oil pipelines, machine tools, sagas,
shoes, sugar mill ~d shoe factory slachiuergt, and electrical equip -
anent. Ia return, CzechoslovaYeia is to receive Soviet iron ore,
mansganese, chrome, wool, cotton, a~ad agricultharal products. l[n
theory, the agreement pr?~des f?r loa~g-rase security as ag-s.f8st
? the im~aediate advantages of ~testeran aid, In practice, however, an
ianportan'~ consideratiann milYtates ag~.ia~st the fulfillmentt of this aiffi.
PYeither the USSR near the other Eastern Europeam~ cesuntries with
whom Czechoslovakia has economic agreeffiea~ts are abfe to supply
the raw ~.terials and speci~.lized ~chine~p which are ineiispemsable
to the successful operation of Czechosla~vak industry.
Primarily T~cause flee Czechoslo~k econotsy can ob4a.in its
raw ~riais only from the west, 66oJo og the cc~atstry's total trade
dorm tree farst seven months of 147 was with the i~iesteraQ natio~as and
onEy lIIoJo with tine Easter European ~$ions. Czechoslo~rakia.'s leading
customers were Switzerland,, Sweden, the lvetherlaaczds, ~elgiuxn, a~td
Yugoslavia. ~~: ,chief Czech~lo~k soces of supply vrere the US, tt~e
tT~, Switzerland, Swedes, Belgium, and the I~'etherlaaads. Czechoslovak
trade with the l3SS~t was relati~ly usiaa~portannt, fi C z~Fnoslovakia
is to maintain its present high s'.ndard ~ ~,i and industrial
production, it must convince the k~'emliBa that, unless trade with the..
West is continued, economic c?liaps~ will result and the flow of
Czechoslova& manufactured goods to fire IT~SR will cease.
-4~
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 ~~ Declassified and Approved For Release 2013/06/20 :CIA-RDP78-01617A001900020001-8
IMP Y~ICATIO]NS OF ~iE SI'I'IT.ATYOIoT IN KASHMIR
Current developments in the Indisrt State of Kashmir
co~..sLitutie a critically dangerous tF~eat to the already strained .
r8latior~s between the Dominions of Pakistan artd India, The recent
revolt agai~ast the Mahara$ah of Kashmir, the Hindu leader of this
p~edomi~ntly Moslem State, was acCoYnpanied by an invasion of
several thousand tribesmen from Pakis~.n's gTorth Nest Fr?ntler
Province, follov~ed by the tentati4e accession of Kashmir ~ the
Dominion of India and the proynpt dispatch of Indian Sikh troops to
restore order in the State. Both the Dovernment of Pakistani and
'the fanatical Moslem tribesmen of the North't~est Frontier Province
vi~v the accession oaf Kashini~ to India as a betrayal of the State's
Moslems (about 84% of the papulation) and as a serious blo~- to the
interests of Pakistan generally.
Actual warfare between the two dominions may be set off
. K Pakistan sends troops into Kashmir (on the ground that oa~ly, by
such action cars the Moslems in I~shmir be protected) or if addition-
al large numbers of frontfer tribesffien fulfill their threat to invade
the State. In any case, ft is expected that the events which have
already taken place will so seriously intensify communal bitterness
that further massacres may occur which, if su#ficiently widespread,
could lead to the collapse of all government au~aority in both do-
mfnio~is.
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 ennZ
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ii).Y ~~ ~ ~Yb~A p
C ~N~E~TS
P ~.ges_
? o n o o? o 0 0 0 o a o 0 0 0 0? o 0 0 0 o r
~~~>C ~~'^~ ? . e 4 ? O e e U O C O O ~~ . d ? . ? P ) O R ? ? ? O O ? O 1 ~ J. 41
Low qC~ o~a,~~.~Yy,~~ g~~p ~o$s~eg~~?.~o~~ya ~o US Sid
011 ~~LSd{i ,R,~ V~ LS`I~MG o ? ? p c ? ? a e < ? ? e ? e w ? o ? o ~.
I~rfllcagio~s ~~ ~ ~~en~~ ~l~~~flor~s ... ? .. e e ? e ? 2
~ooie~ T~oli~f~~.l ~o~~s lea ~e~ma~q . ? ? ? e ? ? . ? ? ? e 4
Sa~iet Su~~so~~r of 1~'R1'SC~~ l~am~~.lgon P1~,~ ? ? ? ? e e e 5
Cflafl~iese? i~Iflf,~~r ~.~~ ~:~o~oz~l~ I3~velop~ea~t e ? e e ? 6
P~?os~e~j~~l~~ C~so~ ~'~~a~~~ ~~ae~~;+~~~s
a~ ~6~??~+~~~~v~ C~~~u+~g +~+ . o? n .. e w e e a e a e o e o fl
C?rn~ne~ls~ Ql~~e~~a~es ~~. Ck211~ ? ? n ? ? n 'a ? ? w e ? . e 10
~~'gC'EA$~YYe I~i?~~~?es4s ~8 US Mall~a.~ .l4 xd w e e a c e? e e
N0 GRANGE in Cla3s. ~ .~
DECLASSIFIT'D
Mass. C3A:~~~D TO ~ ? TS S C
D A ;-.emo , 4 Apr 77
Auth ~ DDA ::?G. 77 /176:
Date : 7i ~~BY ? .~
TAF~
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Y
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T~E~T~3S I~f ~P,IE~`
GENE.E~.~,L~
Ides?tzati~~ns het~c~een the Is~w G~tantries arttt F3S~bTI~ big?nai
~.tath?rities ~~er the use ?? fshe shine ~o~ts ha.~e been suspended in
the ?a ce ~a? ia~cre~.~in~ etch and ~eA~ian ?~~?~iti?n to the $.T s-U~
~?siti~n see pie ?1~0
"~hiA~ ~~?ahs and k~e A.~?a.~ ~~?ess ~~~ti~~e theia~ ~a~,~s
a~~.inst the A.T~S~ ?~ pa.~=titic~aa pAan and a~aia~.st the ~S ??~ s~Iaia?r~n~
the' pYan, the ~x~~.~ G~~rern~r~ts are $cs1A?win~ a p~Aic~ ~? ~"wateltn?t~
wai~ng ~~ in the e~pec~n that the pAan wiAA ~e de?eated in the STN
Genr~~?~.A ~ssetaA~. 'I?A~ ~31~, which a?~a~ed s~a~e time a~~a that
it w?saAd aa~st ass~a~ne res,~~a~nsi~iFat~ fir exai'~rcirep partiti?n, nB~.~ k~e
expected tc~ e~gedit~ its wathdr~.wal fr?~ Palestine i? I,~t1G~ accept
pa~?ti~i?I'!. Yf n? decxs~?n &~ ~eaehed at dais ssssac~n f~? LJ~tG~, ttae iTI~
wiAl.pr~haB~Zy set a de?inite d~.te ??~ ~~ithdr~.w~.~. Within the new ei~?~feen
rn?nths~arad, as in I~.di~., atteaaapt d?~~?an~ the hatereening period ~~ pe~?-
~~.de tae Arsbs and e dews tea accept s~~ne sort ?? settAea~ent.
Of?ers ~? a~~ed sa~~~t t? the I~ac~i ~~r~~r a~ad ?the~? .~~?ab .
armies tez pr~:~en~ a ,~rtitis~n ~? PaAesth~e have bee~a a~re~d upon
at an F~?a~i tri~a.A ~?~ereaace, ~cep~esentiAa~ I.r~.~bs ~4A,~D~4 n?~ads.
~'hr~ must si~i?it as,pects ea? the c~nfex~ence are th~.te ~l} e
i~~.s~erahAe ch~??r~ic ant~,~?~E.:IYBS betweeaa the vari?tas gibes have
been s~n~agner~ed faa the ?ac~ ~-? the ~?~~?n dander in Palestines ~2~
the ~~dish tribes are wiAlin~ tee associate themssAwes with an es-
sentiaYl~ Arab issuer and ~~) Prue minister Sakeh Jabr is ~e hiding
?~rce ~ehinai traa~ whole m?~e~raente I? the Iraqi ~~?erra~ent pan retain
c?~t7~o~ ?? this ~l0~'0&3~d~H3~, ~1ie Governaa~eaat w~AT ~daEle at its dis~saA
??r ~ssiASAe ~.cti?a~ i~ PaAestine a ?~r~iaa~ale ??rce a? ?aa~ati~ ?i~hters,
~i carn~ai~n tc~ ~~e more active aid to the Greek g_taerriA~,s
is aande~? wad in S~.teAAite c?~a~ies. The PC,~~aaaians are hoAd~g ~~Aic
ralAies ~n behaA? ?? the g?aaerrilAas, aaad recent reports indicate that the
SatelAite states haee secretly agreed fat s. gneeting held iaa ,east at
~led~ that Albania, ~uAgaria9 arnd Yosia~a-ia sh?uld ?oran ar~aed gr?ups
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a~xd place thew at e disp?s~,g ~~ the a~~&?~"~'itB~i~'a$1~ ~~~ ?f Free
~~?~~~~.`D 'these ~~?~aed ga~c~.ps and the ~Q~e~?c~?atic ~.rzny~n mill
~?ep?rte~.y be directed ~y ~. ~i~ee~ sta~~ ~~ S?~~iet and Satellite
?~facers t~der the asp~?euidea~cyta ?~ ~d~i~?al R?dian?~, the ~~rmer
S~~~yiet A~taass~.d~r tw ~~??~:ece.
~~sc?a~te~t a a ~'~e~xeh ~o~,~ is s ~,et t~eta.cs
at the recent z~'Va.~?sa~ C~nfere~ce has led certain ~.ea~k~ers t?
~hxeatear tc auit the party. ~?he French ~c~nx~tan~sts mere dis?
af~r~cted by the refusal ?~ the ~rex~aliF.~9s delegates t? c~;nside~? the
nati?a~al i~~:erests ?f the ~~?~nch Party.
'4[~S~'ER.I1 E~~~PE
T_he F'~?ea~~h.r.~~aa~i~~.R eie~ti?~s ~~ ~9 het?be~?, ~Sy ~?~~t~r~-~
i~~.g the sing ~~ A?pular s~pp~~?t t? cxtre~~i~t gr~.pings, ~~ave un.der~
x~i~~ed the pr~sitf.?~ ?~ the ~.a~~sadie~ ~~~e~~~e~t ~pa.ge ~~.
~ a~?der t? cr~nsc~lid~.te ~~rther tineastern Zone ~~ Cer?~,
the USSR, h~.s sp~~s~~ed t~~? ~e~ pvliti~s.i ?~re~ents a~ad h~,s
ar~erged t~~ moderate pa~litical p~.rti~s see page 4}.
?I'~e anne~a~ce~ze~-t ~f the ~er.ant d~.s~aantl~,~, list has
pr~d~ced Tess vi?lent reaction in Germany tk~~,n was aa~ticipated,
a~.th?ugh th4 acttt~~a has t-e~n generally cc~ndeed the V~este~?n
7~es. I~1? st~?ilkes ,~~? dis?~?de~?s have: aecu~?a?ed aid these has b~e~a~
s?~ae evidence ?? ~?pa~lar re~.ief at "tea?~3s~g the ~?~?st.~e ~?~ne px?ess.
and radi? eaf the Soviet ~?ne claa~?ged that the t~estern Allies desi~?ed
t? rain and enslave ~eranany, but the tane ~~ these claa~?g~;s was
ccmpa~?atively mild, appare~atly because the ~,TSSR hypes th~.t the
resumpti?~ ?f disgna,.ntliangs ~iYb ~?~:suPt ~ resugnptacn ~~ reparations
deliveries, baited a year ag?.
~r~p?sals f~~? a cs~~exen~ce of ~e~?~an iVlinister Presidents
pri?r t? the L?~adon C~?~I meetg nay have ~aeen S?viet-~spi~?ed.
.~.lth?ugh the px??p~sed c?nference is pa~~?p?~rtedly intea~ded t~ Pre
vent an ~ east-~~est split h~ Ge;~a~a~$~, its p~a~p~se ~r?~ld p~ c~~ahiy
a1s? lbe t? ena,~l~ the USSP. t? present the CF'IVY. with a Germaaa plea
f?r unity. Such a plea ~v?~~d p~?ese~et the LfSSR. Frith an c~pp~rtunity
~?~ urging an early f?ra~ati?as, ?n its te~r~s, ?f a (aerman ~ceiatral
administrati?n.
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~-~~ s~~~~ss e~~ ~ ~J~ e~o~?~~~ a~~~~~~~ ~.~ ~~ ~~sa~~d
~~w~~s ~ ~ ~~~se ~~ 1~~~da~ ~~ ~ ~~m~ ~~~~ $3~ ~a~~?~a~ ~~~g ~s
~~s~ ~~ ~~ s~~si~~d. `~~~ ~~~a~ ~~~~~~am~~~ was ~~~~~d ~~ ~a~~~dan~~
~ issue--~~~r~~ ~~~~~~i i~~~~~~ d~~r~.~~ ~s ~~.~.i~~ps,~~d?@~~a ?~de~? ~~ ~~p~s,s~
ids e;~emis~s ~~rh~a ~~~~~ ~a ~~sfip?a~g ~~.~is~~agi~a~i~a~ ~~ ~~~ ~.~??n s,~d
s~eei 6aad~s~:~~. ~~ssa~e ~~ ~~~~ hili ~~~ ~al~e ~~ssihbe ~~ae e~s,~~e~a~
~ ~, s~:eei ~~~.i~~a~i~~? ~iiA ~~~ the ~~~ cax ate ~~ese~~ ~a.~Fgae~at
~~` ~~50}~ ~~s i~~~~du~~i~s~ ~~ his die ~~ca~ides an i~adf~~.~i?~. ~c~~h
c~~ ~.~~~?~~.~~ i~it~eY~~e aid o~ .~~i~ae ~inis~e~ ~E~~es c?~~e~a~ ~~~?
the a~.~i ~~ ~~.~ ~,a~c~r ~a~~.
E~~TE~~ ~tl~t~PE
'~'~~~ de~isic~~a ~~ s~~~~~?~.e ~iJ~1'5~6~~~~.~~ ~e~~? g.~~
~~..~~~~~~.?~ ~r~ Paies~ine ~~,s ~~~'~ahR~ cxes$~ed ~~i~ax?iI~ ~? ~~ea~e
%~s~ab~ifl~ ia~ ~e z~iddie fast ~sec~ ~~~~ 5).
i~i~D~?~e ~re~ie~ ~~ ~~~~.~a~?~.~., i~el~des s~g~e~~~.?a~.~haf~ (~~
a,r~ ~~s~~~~ ~~) ~~ .~.~ ~~,'~~? iaeen ~.~~?i~~eci head ?~ ~. deie~atii~n
~~ ~e~~~'a~e ~. ?~s~~i~i~ai-e~~~~~ai~ i~ea~ ~~ ~?~~; ?~ ~~~ he ma~~e
~?eii~c~~ashi~g e 7~~i~;a~=ia~ ~~er~ie~s~~ip ~,~ ~~rde~ ~e~ de~~~~* ~?~~
~~~ ~~ in~e~?~s.~ic~~ai ~~s~~~x:~~~~s~p T~~ ~ss~~~l~~ ~~~~ ~~~i~~??~
~~.~ ~~~.~~?~~~~~ f~ae ~~e~ie~shi~ a~~es.~s ~~~ i~P~elg~ be~a~se ~
~~re~isn ~~?3~ahiy s~e~~ide~s ~~~ ~~ca ~se~~i ~? alIl?~v hixn ~?~ ~:~ai~
i~ ~ui~ia ~~ a.ha~.e ~?~.a~~a~is~ ~?e~nr~e is ~i~~i~ e~.i~e~~hed
~~~;
Ct~~r~~anas~ ~Ia~s ~? ~.~?iish ~e ~?~.a.~?~hy its E~u~nania. ap~eaa
~? be ~?ea~~aia~ ~. c~fal s~~eo E~-~~ ~~.~?1, ~rh~ is ~eai~.~ig ~~-
t~~ated ~? ~Se c?~rese~oa~di~g ~~~ ~u~s.~ia~ ~t~mmut~is~, ~.~~a~en~l~
has been almtas~ ~?~vi~a~ed ~a~ he sF~?~Id ~~~~~ f? ~u~I~.~est?
(C~.~r~i ?b~ia~ed ~e~rniss~oa~ ~? ~~~~~ ~~~a.i ~ ea~Ig~ O~~~be~? ?~
~ e~~?ess ~~de~rs~andi Eha~ he :v~?a~1d ~?k n~~~i~. himself ~~~k~e
used by .~ iISS~ as ~. ~.?~~ a~ai~st t~~ s?r~~Ndi~haeln~ ?TD~e
C~r~rnuanis~ s~a~e ~?~ ~.~pea~s ~? Leo ~~) ~~ ax~a~~e ~+~:~? i~i~hael's
acce~.~a~s~ ~f. a~ ~~i~.~i~~ ~? .~~cra~ess Eli~ah~~h's ~rs~ddh~ ~~
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2Q N~~e~~e~t; ~~j ~:? ~~ e~e~~ ~ ~e~n ~? R,u~a~~; aid (~) ~o a~~~.n~e
a~s~ ~~~?~'~ ~e~ 5~~~ ~ pin w~~~d f~.~~~~fr~~ a ab?~~~-~~ ~f e
~?.~~~ &~e~~se~~g~~~~ w?~~~~ ~e~p/~e~.~~r~~~? d~~c~e~~~ .~a.e as?re
~~~~~ 19~~~.elc TVA?~'e~~e~', a itig~.~a~u 8a~ ffia~ ~ p~~~?ned l1~~:$~
~~~~~'~ ~e~~n, s~~e ~~e 1~.~~e~.w~n~d ~~.~e ~? ~?~~an~~~z a~a~
e ~~n~~~~~~n ?~ ~~~. old ~?~~~~~al ~fll~~nen~
~t~~~en~ ~.~~e~~~ ~~ ~I~e ~~~~~h ~?~e~n~e~t~ d~ pe~~? ced
w~~~a e~?~a?~~~ ~fen~e~ ~.ga~~~. a s~.~:e rna~ ~e de~~ed ~? ~?~es~l~
~e~ ~e~~~e~ ~~a~o ~ e ~~~~~ wa?e ?~ a~~e~ ~~n~e ~~e e~e~~
~~~~~ ~~ ~~.~~~.~~?, ~~~~~: ~.pp~efl~~~ded were e~~h~:~ ~~~e~~en~ ~-f~c~.~s
~~~~~~ed w~ ~~?~.~e ?~ ~~l~~afl ~'ela~~~ ?~~ a ~'e~~ ~~ ~e~?~?
f~~e~d~~ ~? a ~S ~.nd ~ ~~~. E.m~~,~sde~,
DEAR. EASE-t~.~?R~~
Tie a~.~~~~ ~?n~~~s ~~~e b~ wh~~~ tae ~~an a~~~s x ~~
~e~~d the S?~ae~ ?~1 ~~~?~~.~ ~ef~e~t~ ~ s~en~en ?~ ~~.~ ~
a~e~e~ ~~i:n?~ ~? ~e~~~~ ~?~fe~ ~~?e~~u~eo AA~~~h ~e~e~~$?s~ ~ ate
~a ~?~~~.A way an~:~.c?~~ad, e ~?~e (AQ~, ~? ~) was u~ee~~:?~y
de~g~~~e ~ ~c~w ?~ S?~T'~e~, e~~?~?~ a~ ~~~~~.~.?n and ~f tae ~~r
~~~~~~~a~. f~~~?~~?~ w~~~~ de~reic~~ed ~~~en~~ ~eeen a ~p~~~~~?~g
d~;~~?~ie~ .d ~~~r~ale~ ,~.~e A~ p~?e.~~~~n~. ~easu~e~ ~~
ee~c~~ S?~e~ a~e~~ ~? ~~ea~e dz~~?~~,n~e~ w~s~s~a n~ e
~.?~,nin G~e~rea~sen~ ~s~.~ ~e~~~ed ~~~ ~?~ ne~.~ a S?~.e~ ba~?~e~
and .s a~re~~ed, ?r ~e~?ved ~~~?~ a nee p~~~~e~s ~e?e~~l
~~~a~ad ~e~~?~..~ ~~~~ed bed S?~e~ ~~~~?~~e~~o
~- ~ed~~~i?n &~ I~Oe??0 men ~,~ ~:~.~h ~.~~ed ~?~~ea w~
~e e~~~ed d~a~ ~ w~n~e~ ~.?ne. b~. ~'~e~?~ ~~~~~~?n ~? ~'e~~~se
?~ cl~.~~ ~~ ~.~ned ~~~s~~fi~a ~ h~'~~n~e~ and ~?~~s~~~~ cafl3~
~e new glass ~fl. ~~~~~ ~~e ~~na~~ia~ sa~n~, h~e~e~, wR1
n~~ ~e ~rea~, less an~i.e~ ~.~~ ~~ released ~n l~.~ch t~ihen e
near ~?ns~~~, aye ~alledo ~. ~.~ e~en~; a subs,n~~.l ~edu~~l?n
~c~ld be e~~e~~~d In a ~.~~~a~p~i~.~l?~ ~~~ n~.~l~nal defeeo
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EAR E~.S~
~~~~e~r~~ ~:~~ ~, ~.~~ tae ~~e~~e~,~ ~~s ~ ~~ ~~~..~~e ~~ ~~~~~~
~~ES' q E~, EE ~+~~ ~E~.E
;~e~.~~~~~ ~~~~ ~~ ~:*~~e~~~a~iu~~~ ~a~si?r2~~~ ~~~~~ ~c~ ~
~~ ~ ~~~~~~~~~~ ~~~~ ~~~~ ~.4~.
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Ak~'T~~I~ES
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LC~~~>' ~~~3~'~`R~ ~~P~~l~l~~a '~~.? ~3S ~2'.Ai~I~ OId lt.I~lliTE F~~I3,~' IS~IJE
~9eg~tiatie~s ~et~~ee~ the i1~~ C~tg ies a~~i ~3~-i3~ ~iz~~ai
auth?~?itfies ffe~ the u 9e ct ~~tcY~ a~~z r~elgi p?a~ts ~~ ~JS s~aip~ie~ts
#? ~~~~~~ ~e~~a~y have beep s~spe~e~e~ ~ the face ?? ~. ~a~?ke~
sti~ge~~g the etch a~~ ~elgEa~ p~siti. ~?he e~ig~al ~e~~
sta~d~g ~eache~ at the ~~.g~e $.~ J~11 4~~'~ ?~.~.le~ t~ receive the
aplsr+~val ~~ the 1.75 ?Evc~p~.ti?nal a~thc~~rity. l~ece~$ly iTS?U~ reprem
se~ta'~i~es pr~se~te ~e~ ~~?pc~sals which ~ere~ less ~a~?~?a~ie
terms. Bch a~ei ~?~l~na~ ~eg?~tiat?~ s ha~~e re~se~ t? ~kscus~ the
~e~ preposaRs a~~ hake e~e~ ~~~ra weir agre~ar~~r~t t? the
~~'~ga.l tae `~e~ G~.
?I't~xs actic~ ~~es ~a~t ~gcate that the resa~~ptica~ ?~ the
'~~ a~iti~z~a~ rcle ?~ ~As~~~~ ~ctry ?rt as tine gateway f?r Ithi~ae
t~?a~?ic ha: become less esse~tia.l. Ora ire cc~t~?~,ry, this ele~e~t
?~ reco~stra~ct~?~ co~t~~e~ to be a raj?~ objective o? ~a~tch a~~
~elgia~ pol~.cy. ~ Il?~eve~?, tk~e ~a~ ~o~'~ries appaa?e~tly believe
that delay ~gll i~ap~ove them b~.rga~a~g ~?s~,ti?~. ~?th curies
are ~?~iac~e~t that a serious crasis ~ ~er~aa~ t~?a~sportation mill
_ soap co~p~l the bi~o~al auth?ritis~s '~~ ~ga~e use ?~ the Lour ~o~~~try
?rts. ~~~e~~hile, both countries are eecte~ to c?~at~~.e thei~?
e~~?rts tsa ~~ sy~pat.F~y ~ro~ other European ccu~tries by ~~ph~.?
si~r~g the ~co~sistei~cy trey see ~ tae ~S desire that the E~?pe~
eco~~o~zy be ?~a~ga~i~e~ ~~, ~, b~?oad i~fernati?~al basis while them
o eco~o~ic reco~str~actio~ ia~ owe i~p~r~t aspect is delayed
be~aus~ bi~e~~al oc~;upatio~ authorities a~?e p~re?~cca~pied soleby with
prct~ctg the big?u~.l ~?g ei e~chamge p?sitio~. it is n?~ rely
that: ~elgiu aid' the ~etherla~as, I~av~~ made verbal dipl?~atic
rep~?ese~ta#EO~s t? the STS ~he~ the I~ag~e agree~e~t was r~~ected
by the bi~eua~. ~,uthc~rities, ~il~. ~o~ take amore fo~?a~al steps ~ the
h?p~ ~~ obta~i~g s~.t:~s~actio~ at the g?~rer~a~e~tal level.
-1 -
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~F~EICATlG1~S O~? T ~'I~,E~TC~~ El~CTIGF~S
`the ~'~?~~~~ nxauraicipa~.l e~~cti~~~ of ~9 4~ctc~ber ~~.?~ under-
ffiined the positi?~n of the ~~.rn~.dier Gove~rn~.ent and may co~?re-~
~po~di~~~y ~~~~ ~~~ ~.bility t~ ~?~~ with ~?~~~~~~~ ~~?~?mic prc~bleans
and Eur?ope~.aa recover3~. ~~,~ resealt has been ~. ~~.rked increase in
politic~,b ~en~ion aid a c~~fused ~it~~.ti?~ iaa wh~ict~ events may move
wish e~rearae r~.pidity. In what is perhaps ~. desperate effort to re-
ta~ contr?l in tie haa~.ds of the ~.oderates, R~,dfer hay moved
swifti~ mad vi~ora~usly t? resheffle hip Cabinet seed to grass e
~.~~.~~ upon the two le~.dia~~ erer~ist ~ro~pin~.
l~s iaBdicated by preliaminary reigns, pop~.lar support has
sw~a~ sh~.rgly .away fx?ffi the moderate cente~:?, which domiaa~.tes ~
Cab~,et and Assembly, toward. G~:ner~.l de Gaaal3eEs sally of tae
ErencY~ people ~~,P~`). Two-thirds of ~ ~,~ ~ppea.r to have joined
with the F~adic~..i Socialists ~d the Right t? ~i~e the RPM` about 44%
of the p~spaalar vs~ye: Taae Co~~~ists mad the Socialists ha?~ s~b-
staz~ti.ally held their own wi~a alsout 30%'agael ~~%?, respectively.
The ignposin~ sh?w of strear~~th by ttae ~~.~~' ~ais~s fr?ffie
~l) French disiii~~ion with co~.liti?~ ~o?e~ment~ and the rigid
party sys$ena; ~2) ~~owi~a~ anti-Comffiunism sti.~aul~.ted by reaction
to the formation of the Coinfc~rm~ ~d {3) lie Gaea~le's popul~.r
apg~eal. The defeat of the 1~~ and tFae eaaaer~ence of a sty?~~ ~nti-
. Coaxa~caunist ~roug4aa~ has considerably increased political tensiosa
t~arougho~t ~'ra..nce. ~a am eff?~ to meet the new situation, R,anaadier
has revamped mad decreased the sire of hip Cabi~aet. ~?~ the first
ti.aaae he has givea~ the Socialists, who still hold a balance of ~?wer,
~. clear n~~jority of the ministerial posts ~? out cf l3). Leftist
Socialists and Gaullists have been elimi~aated t?~ dive R.aanadier
amore effective coaatr?l. The defeated A1? now is faced with the .
choice of reaaaainin~ iaa the Cabinet, and atteaaain~ t? preserve its
ide~atity as a panty, or shifting its, saapport to ~e Gaulle.
Y&'a S@&ch a situatio~a, the ability of the p~'esent Ranaadier ,
Cabinet to survive continues soaaaewhat problematical. ~e Gaulle
apparently would prefer ~,ot to assua~ae power at this tiame, mad he
c~ be expected to couzater Coa~anaunist efforts to force his Pre-
anat~?e return to power . Ike Gaulle has indicated that he will not
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~~~~ ~. g~~~~~~~a~~ r~~~l ~~a~ ~~~~~~ ?~ ~~~ ~~e~~~~v~ ~~v~ ~~~~ ~9
~a~ lead ~?a ~~~~~~ ~~ ~~~~a*~ ~~~~~ ~a~~g~~~;~ ~~: ~.~~ ~~~ ~~~
~~~~a~.~:~, the ~~~~~s~~, ~~.~ ~~ a~~e ~? ~~~,~~~~.,
?~~~ ~e~re~~.~. ~i~e~ ?~ a~;t~?~ are ?~a~~ ~? ~~~ C?~~a~~~~s:
t~a~~ ~ ~~al~. ~d~ ~~~~ t~sl~~l~ a~~~ztg t? ~~af~'a t~~~~' ~ S?~~~.~~~~~ n
cep ~~e~t ~~ p~~~~~A~a2~ ~~~~~a~e s~?~~~~~~ ~i~~ ~~ ~a~aib~.
ca1R ~ ~~~~~al ~~~~~, ~~ ~?~~d ~~~~abl~ f~fiY f~~.I~, ~3?~~?~~~, suc~~
~~m~~~~~, ~~ ~~~ ?r?d~~?s ?f ?s~?w, aye s~~?f~gi~~ ~'~~r~ch
re~~~~a?p. J
-3m
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S~aVT'~T ~~+~~'~~~?~~ ~+J~OeS t~ ~E~~~~
Sa~i~e~ e~~~;~ft~ ~ca~ ~~~~~e~ ~;~n~ca~~a~.~~~.c~~: ~~ ~~e ~a~~e~x~ ~e~~~
?~ ~e~~~,~~ ~~~ude ~e ~;~eati~~a~a ~~? ~. "~a~~.~r~a~ ~: ~ ?~a~~:~t~~~ ~~ve m
~.~~~ a~Et~ ~.:&~?LP~~N~d ~.~~~F'~s~?~,5~ d:~ '?kl~~.~~~i&T:a ~t? 1T'At~~T'~.t~e ~~F3fl a~~~?I:
~a~7~~e~F ~T~.e ~,e'~r~,? ca~g~.~~~ed l~a.~?~.~ ~?~'e~~e.~~ ~~~? i~~.~x~~~b
~'~on~~ 'y~ i~~.sed ~~ e ~~e~~a~~~~da~a ~?~~e~~ s~~ ~e~a~a~~.-~~s~~~.~
~~ae~e~?a~~?~ ~,~d a~~a~e~~f~~~r ~~ de~~g~ed ~c~ ~r~Ya ~~.taa~.~.~~~, xn~~~-
.a~~~~, ~de~~~s ~.~~d s~~.ea~~a~ des ~?~xae ~e~.~~ c~~ ~~~~~.~~ ra~~~e~~A
Ct~~r.~u~t~~x~n ~~ ~"ear~aa~'ya Vt~e~.~W~~:ae~~ ~~g~~~~~ ~~~~: e ~lA~D~fl~i'
Epee ~~:~~ia~~ ~~m~~eQ ~~'~~~q ~~~T~ ~.~ :~~.~~:~~~, ~:~~.~~e~~~~; aid
S~~~d~~,~9 ~a~e if1~~~A a~.~e ~~ ~~~e ~e~~aa~f~~ Q~: e g~ e~p~ ~ ~
~~~e~~e~~ deve~a ~u~f~~ie~~.~ ~~t ~e~.s?n ?f app ~~~aeal ~? Aa~ge
~u~~e~s o~ ~e~xx~a~~, i~~r~a~ ~~.~roge~.~r ~e~~~.~e ~~ae S~t~~e~?~p?~~~~ed
Sfl~:~~.8~~~ ~.Tr~~~ Pay ~SE~~ a~ ~:~ae ~:h~.e~ ~.~~~?rae~a~ ~f S?~e~
?~~~~~a~ ~?n~r?I a~ ~~e ~~a~~e~~ ~Q~ae,
T~ ~?~~$ex~ e ~af:~?~a~~s~ ~~,~o~e~e~~ aid. ~,~e ~~.~~e~a~.g SEJD,
^dae ~SS~ a.~a~a~ei~~i~ seeks ~~ ~:~s:fne ~x?a~~~~ae~ ~~ tae ~~~~~k~~.~
~e~e~;a~a~a~ rU~~?~ (~I~J~ ~.~d 'die ~~~ti~a~ ~e~~~~a~~~ ~~~,~~'~ ~~~'~ ~
?~ a c?~~eg ~aa~ze. Se~~;~et ~a~~ ~~~es ~,~~-.ald ~!~ ~~:~~.ce e
~?~ri~~~~a~~~.e~~ec~~?~iat~~e ~eade~s~~~ ~~ tide ~er~e~a~e ~a~~~es ~,ad
red~~;e ~n ~~~e~~..~a~~ ~ee~gs ~e ~~sfl ~?~es erg '~ese ~~a~~~es ~?
?~ae, ~h~~h ~~~~ ~~~ eat: e~~ ~, ~~.~g~ ~?'~'a ~ SEQ. ~ ~.dd~.~x~~z.,
~~~e5e ~.~~~~s ~~e~Y?~ als~~s~ ~e~'~.~~1~ darr~age ~~e ~a~~?~.~.~ as~~a4
t~es~s e~f ~e ~es~e~~ ~~~7 ~.~d ~a~~ ~~ a~~a~~s~:~i~ ~aea~ ~as~e~~
Q~e ~e~a~rese~.-,~.~~c~x~.
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~~~e ~?~~~~t ~~~~~~~?~ ~~ t~~ ~SSA4, g~ ~~p~ t~~ SHOP
a6~~aY'~~~gg~~A~tySp[~~}q+1~/~yQ~~e~~~t'p~~~O~~,~t~"~t~:~,P~~pq,/~~Q~~j}~~p~~.~~~~gq~et~~~ ~Q4y~~'~a~~e~p~~~~t~ ~?q v~9q~f~?~~?~t
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tie .A.~s .~~ r~~i~t~~. S~~~t ~~~~t~~es d ~,?~~~st ~d~ca~~~?
ate t~~ ~.~~.~~ ~~~~~~ ~f . ~~~~ity ~ t~~ ~~~ ~F~~~?~~, S~~~a a
~~~~i~ ~;~~~~~t~~~ ~i~ ~~a~~~~~~~~ t~~ ~~~r~~~ ~ ~ ~S ~ i3~ ~a
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~,~~.t t~~ ~~5~, t~ ~w~~~~ ~t~ ~~~~~~ f~~~~~~.t ~~e a~~a. ~~~
~~t~~~$~~~~~t ~~ ~.~~~~d,~~~. ~~~~~~h ~t~t~9 ~~ tie ~~~~~q~~~~t ~~M
~~~r~~ a~ ~a~ffi~a~~~t~~~~~t~~~~.t.~~F s~~~~~~~~~a ~~~~a the ~~.tel~~t~
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~~~ kA~~ iLS~.~.y E~ ea~~'.+?.3-~Y.~~~ d~Y~5.9.1t ~ ~. ~,STdP6.4~~ ~`ge
X'S~a~~~~ ~~ jQ~~ R'~.'~,~~3~ X?~ 6-~~~.~t t~~~a~~~d ~. ~~ ~a.~'t~.t~t ~~ r~~ri?
~~~?~at~d.~.p t~a~ ~~~t~. ~ t? ~?~.~ ~~~~t~ceaa~ cif the ~ ~~~~: ~~ ~ ~c~z~~tp
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sz~~t ~~~ S?~~2 ~~~~~~~t ~~ `a~~~~~~att ? ~~~~~~t~ ~~.~ ~~~? ~
~~~~~a d~ tie a~'?~~~:: G~~te~~ ,~~~~~~~ t~ ~. ~?~~~~t~t~~ a~~a~~-
~~~d~~t ? ? A.~a~.e~~~a,
~,'g~~ S~~~t ~~a~~~~ ~g ~g~a~lpg^~~~~~~ g~,,~at ~. ~~~~~~ s~~p~,te}~,q e~~?p~ ,y
~~' ~~~ ~P~~j?~'a~9 s~`~~~?H~b `~~ ~Jz~~i~?~~6.C~ ~~Wt~aa'~.HN ~.~~~~.~ta~. ~ @.8~~. ~.lSB ~~~~68
~~~~~~ ~~ ~. s~~tuf~~ ~~~~tt tcs ~S~-~~ ~~~~t~s. x"~c~~~~~~~, ~y
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?~~~? au~g~~~~ ~~ul~ ~~~~~~ ~ ~iSSR w~t~ . ~x~~~~P~t ?~~?~rt~-
gy t~ ~la~~ ~ 8~.~~~te ~~x ~e~.~~d 5~~~~t ~~~s~a~~ ~~a ~~~d ~~
c~.~a~~ ?f t~~?~t~~ t~~~~ ~~t~~~t~~~ ~~t~n l~s~~ g~~9S?~~$ cuffs.
m5e
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~~~~ ~f~ f~flfo
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a91W84~ V ti~IOB~?~~~GD ~ Sit{bJ~~ V^b41~V ~~8i db~. ~K. aY4g~{~I~/ ~~f1Q~ I~~10 ~lS~~!
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~~~PE~ ~ ~'RE1~C S~,TC~ESS SSE C~~~G~
~~~~ ~h~a~h fhe ~u~~e~~ ~?~e~~~ ~f?et~e t~ ~?r~he ~d~- .
eht ~pp~~.~s g? .~~ ~chte~e~ ~e~~.t~ Yi~t~ ~e~~~es, ~ ~~a-
~~t w~.~,l p~~~Y~ ~~~ ire s~~~essf~Y tai f?~~i ~ ~ie.~ ~e~~~li~
~e~Yi~e ~'~~~~~ p~~s~e ~.~~ weaken the c~~~~Y ?~ter,? ~e~?e ~eYes
in ?~~ has ~? a ~~ench E~~i~'e.
Ali~z~.~~h ~'~enc~ ~tli~~~ a~~hh?ri~.es ~~~ h?ldf e.ll p~.~l~~t~
~~t Ynd~h~ ~~ ~. tni~n~ anal ~~~ c~afffiin~ i~ ~ c~.~~ai t~ ~?
~~~ ~ ~ ~. stn?~ ~e~~~n ~~r~a~Y~ tai ~rde~ ~ ~~?i~ ~ p~sst~tbff~
~ ~1oT in~e~~~~~t?~~, ~.~.~?~~~ ~~e~a~h f?~~es~ ~~~~ ~ ed in ~ese ~.c~?ns
h~.~ ~~~~ ~?~tf~~ ~~ ref?~~ aid ~Pne ~Yie~~.ffi Re~~lf~.
~?~~ A~?ses ~ ~ ~'~ench i ~~~: ~~) i? ~~ ?~~Yand ar-
t~~~~ r~s ~~we~ ~teffia~ ~~~ China ~~ esi~.~l~slai~ ~?~ench
c~~I a~, the n~~e h~~~hines+~ b?~~~~, ~2~ t~ w~a~en ~e re a
s~~aa~~e ?f ~ ~te~~.~ ~.e~aYt~ ~~ i~ ?~ cap~a~i t~ Yeade~s,
~p ~r~~si ~~stt~:~ ai~is~~a e~ ifs affit~i~n ~~~ ege~t~ffie~a~ ~e4
s~~ces, ~.~~ bq `~$s~~~t i~ c? ~si~~.~te~a~ aid ~~~ farili-
~ies, and ~~) i?-~?~Y ~ Yiea~ ~e~~~Yi~, a ~esa~Y~, ~? net?~~~~
P~~e~~s f~~ stflfi~ant ~~e~.ch s~~~?ss ~ faYY ~ffenst~e
~.~?~ ffi~a~e~ Ya~~eYy ~~nse ~ e~~a ~~f$e~ add ~~ ~ie~
f?g~es w~Il ~?ns~~~+e ~h~~ ~.~ffia,~ifi?n ~~ .i~ri~Y white ~awi
~`~~~~~ f~r~e~s info ffi~n~.~~~s and di~~aY~ tterra~. ~~~ ~isY?~n~4i?r~
?Y ?~te~a~ c?ffi~~ni~~.?i~n fa~~~i~ies wt2Y ~~a~ly ~?~ se~t~s~.~
ha~~e~ ~te~ ad~infis,~i?~ d Y~~~e~ ~~se e~- ha?e ~effi?~~
s~~a~~~ ~?t ~ ~ s4 p~a~ i~ abiYt~ ~~ ~~~, ?n a ~~eniYi~e~
fasts and f? e~~?~i~.A.~ eec~i?eY~ ~ r~iYt~.~g a~~~iies ~f ~.?~~~
a.~~ see V~e.~ ~r~~$s. _ the ~'~?~n~h e~~.ti?~ ,~ ~e ~tet-
~ G?~~~~~.~ w~Yd be wiYli ~? net?~~~.te ?~ ~~ench ~~~s ?~es
~ ~~enst ?f ~~ ha~~~d ~~~ ~~te~.p~ feY~ f?~ ~ ~~en~h by ffi~
?f ~ P?.Ya~t?~ ~f n?~ihe Yn~~hi ~hsse f~eli ~~~ ~?t
as~~~fa~~ s~4eYy w4 ~ ~flei~~~ ~ep~~Yt~ ~ wa~ald c~n~e even -
if ~ ~Yiea~ Re~Yi~ sh~Id s~ffe~ ~~~?~ defeat.. ~?~~ ?f ~ p?Yi~g?
gal f't~es ~~~nc~ ~y ~ ~'~~~~~ ?~ b~ natt~e ~~As ~ ~~~n~h-h~Yd
~.~~as as aYte~~i~e~ t?~~~sid~a~t ~~ ~ e ~tena Y3e~n~Yt~ cs~
c?~~an~Il ~~~~ ~~uY~r snp~~~t ~? wea~e~a She ~i'tet~ Republic by
i~pi~t ~,~?~nt defects? f~??~ it,
-$-
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-~-
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a.~~~~?~~~~gr ~~ '~~~ ge~~.~ic ~? ~~x?~~.~a.~~ &~~y~a~a~ t~~ e~a~-rn~~~~a~~~-
'JV~e~y s~~~.~q ~f 1~ O~?b~~, ~~~ ~~. ~h~ ~~~.fl s~~ ~ ~~~~~~~~~
~~~~~~i~~ ?~~~~~~~ ~p~, ~~~ ~~~,~ ~'~~~~~~~ ter. t?r ~du~r$~~ (~~~~h
~t~x?~ ?r~e~ee~ ~~~y ~5:~~ ~~.~st ~~ ~ ~~~. xnun~:rs Ix~.c~ ~~$urt~~~ ~? .
six?~~ ~~~?~~ ~~ ~:~~ ~~~~~~~~.1 c~~~~~~~.~i~~ ~~~~~~ ~~ ~ .~, ~~~ ~~~
ce~~a~~ ~~ ~s? ~~L ~~~y.
the ~~~~e~ were ?~~~~~~ ~~ ? ~,~~~~.~ ~~. ~_~~~ ~~~~~~~ ~~ ~.~~~~a~e
$~~ ~~~~'~'~~~ ?~ ~y~~'~a&r^~.~.flQ{~~.~.~. ~'~J~6~~k~~i ~a~~~2 '~~~~.-~~,Fi~~~~pp&~$~~~.~Cy~O~.
JEC.~~?~~ ~ ?~~~1' ~~~. ~e`~.~'~ ~~l.F.~o~'J ~.~~~~.b" ~~' ~` ~8~.'~~~i, ~?~t~~s'~~Pn?, ~Y~`?~~ @Wl~+~.
a.~.~ ~~~,~ ~.~~~~~ ~srd ~ ~Fa~ ~a~?~ ~iae~~r~~ta~~ ~~ ~~ae ~~?r~a~~y c~~a-
~~~~~;~~~ S~e~a~~.~f~.
~~a~~~ ~~a~~~~ ~~~~~ ~ ~~~~~~.k~~&~Y~ ~a~A~ ~?~~~~~ ~a~~~ tie vax~?u~ d~ts?-
~~~ ~h~ ~?~~~~s ~~ ~~ee ~?~~qDs ~?~~ ~~ ~~~ self-~~P?~~~~T ~~a~~ia~~c
Thy ~~san~~~ ~f ~ c~~..~ s~~~~ ~~.ve pla~~~ ~~~ ~?~~at~i~~~
in ~ ~~~?ng ~x?~~a~~~~. p?si~gas~a ~r~.~~~ ~:~~,~~~:~ ~ ~? ~~8~ ~~i~~~n
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Al1,GEPtTIY~t~ ~TTE1tESTS ~I US M1I~TAR'Y' A~'9
The Argentine Governgnent, by requesting arrangements
for direct negotiations between its I~Iini ter of tsar and the US l~e-
partment of the Army, has taken a further step toward obtaining
benefits from the policy of cooperation it initiated at the Rio Con-
ference (see ~Teekly Surramary of 2~ September, page 6). The pur-
pose of the negotiations, according to the Argentines, is to ot~tain
technical advice on the production of war materials and on other
military problems. Such negotiations ~v?~ld presu~aably take tkHe
form of, (1) the point staff conversations betv~een the US and
other American -Republics in.1944 and 1345; or (2) the existing
~oiait US-Canadian, US-Brazilian, and US-Mexican commissions; or
(3) the present arrangements between certain foreign governments
and US government departments under the supervision of the lnter-
departraeental Co3mxn.ittee on Scientific and Cultural Cooperation.
From the ArgentinesE point of view, this would involve either the
.opening of a new avenue of contact or giving new powers to their
ffiilitary delegation on the Inter-American De#ense Board.
The Argentines would probably attempt, in the course of the
n+e~otiations, to put themselves on an even footing with Brazil and _ _
Mexico in receiving US yilitary ~.id. Subsequently, they would seek
to extend the discussions to such questions as: (1) the procurement
of the latest US-manufactured military equipment and of US-furnished
digs and machine tools with which the Argentine munitions industry
could manufacture Fie~nisphere-standard equipment; (~) ArgentiYia s
wish to have at least limited access to the results of current experi-
rs~ents and steadies in the US and $o send students and specialists to
advanced schools in the US; and (3) Argentinaes request for apre-
c?nference understanding between the two countries on the military
measures to be considered at Bogota in January 1948.
-12-
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 - , :.. - n n
f1erl~ecifierJ ~nrJ 4r~r~rrnierJ ~nr Rele~ee 7f1'14/f1R/7f1 (`14_Rf1D7S2_fl'IR'174f1f1'IQflflfl7flflfl'I_S2
o
C?~T~~TT~
Pages
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?~'~e Coal S~~?ike ~ ~Ch~le ......... . ................ 2
NU C~,PIGE in C1asS.
DECI,AS SI IrU S Q
C~.A x~~c~.. ~ APr !7
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,.
. .1Li::
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TRE~Y~S gPT ~RiE F
~ER~~:AI,
?~~?siti t? ~'~?~~~~ e~c?~iC ua~i with tie Saar ~
e~~~te~ fr? the ~JSS~ at a ~~ ~eetiu~ ?f the ~"~.~. Si~~e
the ~~s~?~ ~~~~~, the ~JSSR has a~?i~~~i ~~~~ ~pp~sitiaa t?
Fre~c~h piaus i~ the Saar, i~t the reeeut Saar eie~ti,`whieh ~.~.?e
~~~~ interpre~e~ f~??~i~~ ~i~ ~~.t~ F~~~, ..v~ ~estr?y tie
S?~iet h?pe that ties S? ~~ubd. ?~ia~se the uui~a. The ~JSSR is
~~~cti~~ a ~i~Re~t ~~.ffi,i a~ai~st uui~, a ~erffi gress
?f ~e S?wiet ~;~~ as a ~re~arati?~ f?r Sc~?iet ?~sitia~~ is L~d~
t? "u~-.ageral dis~e~i~er~e~t. a s .~
The ~ste~~e ?f a?~ ai.riirae (~~`~'~ has ivee~ cam
fir~e~ by ~ e~ ~ ?f mates ~etwee~ S~e~e~ a~ Xu~?sia~ria i~
~?~a~?~i~ nth a~g ear agr~et which ~esi~ates a Swedish
airi~e (Ai~A} auk JET as ?~er~,t?rs ?f ~ digi.~~atic courier ser~ce.
~'AT is ?ste~sibiy ~'u~~ia~~?w~ea, and it see~as ~~?abHe th~.t the
~TSSit a~a~~ Yu~~s~~,~ia, ~~ c~ti~u~ t? use ~iST.A the S~~ieta
Yu~?sla~ ~,ir~i~~} ?u~h?ut Eastern Eur?pe, I epi?y jAT i~
eff?rts t~ e~en~ ~~e~?atis int? western Eur?~e. Thr~~h .this
deice, the ~JS. ca?~ ~aeet the ~~~cti~s ?f a western P?~ae~s to
ai~? a~reeffients ~~?lg S~~.etnc?ntr?Zied airii~tes. .
i~a~~:ax~~ is atte~~~ t~ f?~ce a ~3S t? that US ~iii-
tary c~ur~e~ ~EA'~S} aircr~.ft ?Ai~hts ~ust,~e c~di~:ical ~S clears
antes f?~ an e~u~ number ?f flights acr?ss ~agS ~e Austria by the
S~iet-i:Yau~ia~a ~?~n~nercial airline (ldlaz?~let). Tk~e EATS flights
~.re needed t? sui~~?rt the withdrawaA ~f ~JS ~~iry ~ersel within
the 90eday perm fs~flA?wing flee signature ~ the Peace Treaty.
iiu~agary's actic~a is therefore indi~.ti~e ?f the -siiffiities wi~ich will
be enctered if the ~sgended flS~iiua~ga~?ian cif air neg~iatioas
are resuffied.
.
~ESTER~ E
?~E
The current str~es. iia Paris, mmfsw b~.cl~ed b~~the ~?~ffiunists,
are ~iY~~y t? bring about a reactis~ agai~tist .the C~~~unists ~ the
~u&aici electi?ns. ~?11?wing the pattern ?f cast .spring$s strides,
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the ~?aanist~~~tr?lfled C~~ ~ the C~~~u~aist ~$~ decided
tc supg~?~rt the strides ?a~fly whea~ fey s~.av that the strikes wild suc=
ceed. ~~eca?~~e a sires are causing great inc?~~e~.ie~ce t? the
p~paaiati?~. ?f saris and because Raffiad~.er Eras fl~.heled then.-. as a
ecp?li$ica.fl ffi?ve89 t~ -the e~te ?~ eflec$i~s, i~: is el~p~cted ghat 8Y1~FDp
l?wei~ middle?c4ass ~?tes i~ saris wiflfl ~e fl?st tc~ ties C?ffi~aanists.
the resits ?f tF.~e recent ~.~~e eflecticrs ~idicate ~, streng~he~-
it~g ?f the p~pul~.r ~upp~rt ?f the ~e Casperi ~ea~ern~~t. Alth~gh
the leftist Pe?gle~s lac p?lfled. ~. dew na?re ~.~~ ~~tes did
De Gasperi's Christian ~exnaacratsy ties flatte~? wt~n as ~~~ seats in
the City Cdcil and sI~?wed ~ fl3~o ~.~ imm p?pui.~ f?iR?wi~~ i~st
~. ~ 3?~ss f?~? the ~1?cs as c~napared with ~ yeaa~ age. with ~7 ~f tine
~0 se~.~s ire.-the City C?cil, the Christie Deffi~crats n~aust, hcwe~rer,
ecaatin~ae t~ refly E~Ii ri~~Z~tist ~uppt~rit t? attaiaa ~ ~a~?rii:y. A c?nxbinam
t~.an ?f the righ$ist gaarties9 which l?st ?~et 12~ in ~pufl~ baflfl?ts,
aid the, Ch~ristfaa~ ~e~acrats wceald yfe~d a t?tal cff 45 seats, a w?rP~-~
~g ,j?r:~ty.
Fie ~a~fl ffia~ ~ec~~~i~e the Italia Civet as the res~flt
?f his recent success in the R~ffie eflecti?a~s and ~f the etffect ~f the
C?ffiiYaf?r~n a~ce~ent ?n the ffi~de~ate lLeftistsq ~'he app?~int~
went new ?f a ~ext~rate S?cialist t~s ec~c~sic ~infstry wild ~?
crease Ike GasperiDs prestige and w~.ld st~e~ngth~:n a capacity ?f
his ~~rsr~a~eht as an antimC?nr~unist f?rce, with~aut gig the ap~.
pear~ce ?f iais hang yieflded to leftist pressure.
EASE Ei.?~E
.rren$ s?~iet ec?~ic ~,cti~ities in Austria are desired
t? f?rce that ccruntry int? tine Satellite ?rbit and, ~ unchecked, cast
result iai S?~iet ~pc~liticafl dc~ain.~,ti~ withh~ sia~ ffitias after ~
Auastrian .treaty ~co~es effective {see page l~.
.~ E.AS~~~ERICA
It ~.p~ears increas~~~lroh that the ~~.Resti~ae writ
pfla~a wiflfl n?t ?bt~.in the necessary tw?-thirds ana~crity in the tTId
mineral Assely despite tiS and ITS.SI3 laackin~. :~.rgentina aid Ct~a
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have declared the~sel~e~A ag~.~st partiti~, thereby raise t? 16
the number ?~ ~~~?sing states. ~re~~er, it i~ reported th~.t e
l~ethes~~.ands, ~elgiu~, ahd p~ss~.bly twrQ ?r three ~~re states
(~.u~ernbt~rgs ~'ia~, and ~ug~sla~~.~ away ~?te ag~.nnst partiti.?~
~.n~ th~.t s~ stags (the , ~~stra3i~., and fear l American
states map abst~.~ o
E~~, E,P~ST
Tension h~ ~~ar~na be r~ ~urffi~,s and thr: wrens, a~-
ethnic min?rii"~r ~.~ scup ?f tha~ee Rican pe?~ e, s reac e
rlangera~us prrap?rti~ns~and ana.y r~s~t ~ arBned dashes ~.~~ e~ea~
ci~iA war ~ the year future. :wren fears ~f the numerically
sa~perirsr ~ur~nans have been intensified since the war by she
failure ~ the ~a~ens t~ secr,~e fr?~ the ritist~, tra whom they
hears bee~a l?yal f?r a centur;~, aaiea~uate g~ar~tees fir the pr,~.~
tech?a1 ?f their rignt~ against ~ur~narsso The wren lea*i~afl
tT~ai~ hopes t? ~btaa~ ' actiw~ ?~n behalf ?f tie ~~,~ ens befmre
an ~tbreak ?c~rs. S~~ch an hacident anay take place after ~5 ~'?~
?ez~ber, the deadlia~e fray the sh~~render ~:a all illegally-head arses,
which the ~a.rens are ~?eluctant trn i:as~?n iaa because they fe~.r attack
by the ~ur~ansm The transfer ?f ~ratish oath?rity t? ~chhe ~ca~ern?
went ?f ~~arnaa e~.rA~. X945 wilt be an?ther cri~ical.date in ~~Pen~
~ur~an relati~s mad wii~ teat the new S?~es~es~ent~s capabiliities
f?r ass~ffiing independea~ce.
ST~~F~ I~IS~I~.E
Tfl2e Zack e~f ccncerteci ef~~rt bilean C?ffi~s~ists hi the
recent ' ccyal strike indica$es clearly that the strike was nc~~ desired
by the leaders _?f inter~a~,tion~l C~n~xnaanis~a as a sh?wd?wn ha the
western I~e~is~lae~?e, despite Presi~le~at G~alc~ Videla9s charges
t? that effect (see page ~~. .
' ~$~azilas decision t? break relati~as with the USSR inay
ha?e been tinned t~ prepare U'S public ?pi~i?~a, which has ~. str?ng
influence cn ~~a~iflian p~lic~r, f?r an all-cwt attack ~ the ~ra~ilian
C?~~naaaeists. The recent Fcareign Mice instratcti~ t? the Brazilian
tTI3 Aelegati~ t? supp?rt ~lae STS ~ all issa~es n~,y flea?e bcen sianilarBy
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ti~ec~. .~ f~~khea~ ~ti~fe^ag ?f the ~~a~ili~ ~?~e~~e~t's a'~tita~de
~n2~d al~ea~~g ~ho~ed it~e~ i~ the tie ~f its p~~e~t ag~ia~st a ~eee~t
a~~.~I~ ~ I~re~ide~t ~a~tra its ~ Se~~iet ia~es~. the x~.~~r~ d?~~~ti~
i~~e is ~hethe~ thy: ~~~ee~at, resg?t~e~y ~~~ i~c~easi~g
array press?e in recent x~c~ath~ t? tie ~~.stgc ceases i.~st
the ~?~~istss . fgn~re ~~~t~g ~~ytituti?~a~. ga~tees ~d
nza~e ~~~ ease ~~ the police state teeh~l~~xes ~ahirh, acs?rd~ng t? _
the ara~ny, care ~~~~ ~aee~ the chaiienge of a ctrp"~ dynamic
~~ gr?g ~c~~~~ist ~?~e~ent.
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AI~TYCLES
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SiJ'VXET ECOl~O1ViIC POLIO IFS AUSTRIA
Current Soviet intentions of forcinv Austria into the Satel-
lite orbit thro~.zgh economic dQra2fnation ,have been made clear by
the demands of fthe Soviet delegate at the meetings of the Allied
Treaty Commission (ATC) during the past five months. The USSR
has already implemented some of its objectives by: (Y) integrating
properties seized by the USSR. into the economy of the Satellite
states; (2) obstructing Austrian industrial recovery and? iiraiting
Austrian trade with the West (particularly with Germaay); and
(3) disregarding Austrian laws affecting wagos, prices, distribu-
tion, exports and imports, taxes, amd decisions concerning the
utilizatfon of fuel and power.
German asset in eastern Austria claimed by the USSR in
the ATC ,are valued at more than $?00 million and include half of
the industry in eastern Austria, all oil reserves, and three-fourths
of the oil-refining capacity and of Danube shipping. Besides its
claims for assets, the USSR has also demanded that Austria pay
for relief supplies and services delivered since the liberation, in
addition to 600 million Austrian schillings i8 exchange for the
German reichsmarks which were turned over to the Austriaa.Gov-
erritnent by ~e Soviet Axmy. The USSR also supports a Yugoslav
claim far $1 ~0 million in reparations from Austria,
Unless an Austac?ian treaty succeeds in materially reducing
Soviet demands and in modifying the present extraterritorial status
of Soviet monopolies, the USSR will probably be able to force Austria
into the Satellite economic orbit within six nnonths after a treaty
becoffies effective. Loss of political .independence will inevitably
follow economic dependence on the USSR.
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'FRET
'I'mo ~?1~I~ STS ~ ~~"tI~
13ecent events the ~a~rent ~htlean coal str~e teaad t?
confirms the ea~?Iy esttraates ti~at ixaternati~a.~ ~?nzznun~st~ did
net httend the d~~~;nte to precfpitate a raj?~ showd?, eiespite
i~resid~nt ~o~.~alez V'tdeEa's cha~?ges to that ef~'ect see ~eei~q
~una~.arq of ~Q October, page ~~~). ~So sq~paiP~q strtites i"~.~e
oca:urred $n the copper and ntt~ate indries, wi~ere the Co~~.u-
nists, becaaase off. their c~t~?~ of the relent unfa~s, ~a.~ve a~.~-
dtoulatedYq begin fn posliia~ to i~~g ~a~ffi a~sa~ce~: ~i~ws
~f tae etch and ~d?nesi~.ns c~sn~ernin~ an acceptabYe basis f?~
further net?tiaticns.
Tlae ~'re~ier ?f the. ~d?nesi~.n ~tepubYic, ~:ir S~ar.f?edd~ap
has declared t.t the ~in~~~.d~atf ~~ree~ent cast be the basis fear
~ts~e neg?ti~.t??d~s beca~s~ it ha.s i~eeaa ~ab~e~ated b~ Butch ~aYiita.~y
a~a~Q~ressi?~" and by the Itch unilateral es.b~.ishent ~f a~t~n~-
n~t~s areas: Acc~~?d~; t? Premier Sya~-if?edd~9 tIze R.ep~blic ndw
c?~as~.ders itseYf fret ~sf ang~ cenzanit~n~nts a.s a ~e~t~er ?r ~. fu~re
'tTnited Smites cf a?nesia (USIA and will c?nt~ane the st~?u~~Ye untiY
Republfcan d~ lure end de facts auth~ri~ is recc~gni~ed ?ver S~n1a~?a,
j~,va., ~.nd Madura.. S~arifa~ddYu and ?~ner ~epublic~.n sp?~esmen
h~.ve sated that nee net?~;~ti~ns ~=i11 be ~a~derta~e~ ~~aYess assurances
are given that dutch ~~?~ps will be withdr~.wn i~ t~~ree stakes: first
t~s the de~arcati?~ Yines ~f 21 pct?ber 1.46 ~f~IY~wi Which with@
dra,~ra.l net?tiatia~.s w~a~ld pr.bly be~ir~}9 they from aYY FtepubYica~
territ?~?~; and, finally, fr~an the wh?Ye cf the andies ~~?chipela~?.
~c~~z~bYtca.n s?~rces are u~aui?us i~ their beY~ef that nd even~aY
a~ree~ez~t wi&Y be i~pYes~sented by-the ~s~tcP~ anises it is tho~??u~hly
~~.rai~teed and super~sed by a third p?~=er.
The dutch, acc~rdfn~ ~ Pre~ler feel, a~ee that the
~it~~~~,d~ati ~.~ree~erat, as sa~ch, has been abr?~:ted by recent
deveY?p~entss -hut xraagntain that a p?lftgca.l fc~und~.tien f?r rehabilita-
~.~~ rray be achie~=ed ~n the basis ~f the principles ?f the ~4~reenaent,
which the Dutch G?vernrnent feels itseYf ms~rally b?a~d. In ?ther
wards, the li~utch wish ~ es~bYish a s~verei~ USI which will have
au?ri~ ?~rer a e~tfa~e a.~?chipe~.a~?. ~ithia~ this USI, the Dutch
~,'a~t a Pepublic, a~der "c?nstrarctive" Yeade~ship, which will ewer -
cise auth?rity ?ver Sinatra, Java., and 2viad~ara. The Itch have
declared that they wiYl n?t evacua&e territory ta?~en since 20 July
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without "conclusive guarantees" and without consultation with the
populations involved, because the Dutch fear that extensive reprisals
would be taP~en by the Republic against all persons who had not re
sisted Dutch occupation. IVloreover, such guarantees would be
acceptable to the Dutch only if offered by a republican government
which had accepted the Dutch view that the a~aainte~.nce of order in
all parts of the archipelago is the responsibility of the Netherlands
~overnYnent and must be secured through a joint police farce. The
question .of the joint police force was one of the points over which
negotiations bro4~e down prior to the outbreak of hostilities on
20 July.) Although Dutch leaders have not indicated their attitude
toward third-power supervision, they probably would not accept
such supervision of an eventual agreement. The Dutch view is that
political readjustments between tazdonesia and the Netherlands are
eonstitutfon~.j questions and therefore not open to third party con-
eern,
The irreconcilability of the Dutch and ltadonesian l:ositions,
? sustained by the belief of both sides in the justice of their respective
cases, indicates that the process of reaching a basis for negotiations
will be protracted. IVfeanwhile, in order to restore their occupied
areas to some semblance of productivity, the Dutch are expected
to proceed unilaterally in the organization of a political administra-
tion and in the integration of this adra~inistration with the Netherlands.
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~~~5 ~~l~il'~t3S?f' ~~ARE
~~?es~de~t ~c~~~a~e~ ~T~.~e~.a'~ charge that the c~rre~t Cora~a
m~i~t-led ~ht~e~~ soak ~tr:~e co~~t~t~t~~ a 6 e~~iow~?w~'r between
his ?~o~ex~~a~ent a~~~ tP~?~at~?r~a~ ~o~~~g~~ does not ~.~~ea~? to
be ~ub~tax~ttate~ b~ the e~i~ence ~~ hay ~~?~nght forward to ~~~port
it. Althoa~gh ~.t ~~ trace th~.t ~h~le h~.s a "~t~?ateg~.c ~mcati?zn9~ fr?~
the ~ta~t~~o~t off C?~a~a~r~t~t a~p~.rattoaas ~ the ~e~tern ~iemas~~~ere
and th~.t the ChtZ~~ ~?~~a~n~t ~a~?t~ attaches g~~at i~~orta~~e
t? wt~aang the st~?i~e~ there ~.~?e g?? re~.s?~~ for ~?al~tz~.g mat a
..
~tQOw~?~rna: is ~tencie~< ~f the G?~~s~r~tsts were ~eter~~n~ to
para~g~~e the ~h~.~ean econ?~~aY9 they woantd cert~,~~p have ca~.Ied
drat some of the ?ther ~.~~o$~,,a,,~ P~p ~e~ ~o~~~aa~u~g~ist ~o~tgroaa. ~9~?t~e~~
?~?ey~t$fl~' Strome ~.j~~9ea&'~ S.~A ~,RB ~?~S~ectS 8.o iLL~~L ~. IL~~Y~ir~L' `i+~~l~~.~
ea~s~Ioyer-worker ~~.sate o~rer wages and wag cond~t~.ons.
Any C?n3~a~ist atte~~t to force a ~how~?wn with the
~hi~ea~a Go?e~rn~.eaat at thgs t~~e woa~~d co~st~.~te a skaar~ s~eparta~re
from the ~?ecea~t pattern, ?~ ~o~.~fst actt~~t~es iYa L.at~ ~~er~ca
as a whole and ~ ~h~e y ~a ~artf caa~ax? . `these Coa~a~t~atst actz~~.t$ es
have been. clear~.p gr~dicate~i on the view that ait~out st~?a~ggles with
the Laati~a A~erica,~~ ~overn~er~ts ~~stp . the ~resea~t phase cif
~S~tTSSR relattoa~s, be ~ost~oned so as to a~?id gro~c~~~g repres?~
~%~J~ B'~Ye~S~3i~'eS. ~~~~~t J~'@~9~X'~LS ~?~1 ~h~~A~' yE~l~ICr2t~ t~t~,t t~~
~hfbe~ Co~a~ar~aast Party has e~x~tea~?~ed to ~o~a~w th~.s ~att~e~~
to the le+ttex. Amy state~e~at day ~o~~a~ez 'V~~~~a o~z ~~~~a~fs~
t~ shale rn~asty ~dorec~~gerr, be read i~ the Atght ?~ the fact that ~ht~e
has a~. apg~licatio~ for a ~~~ ~~~~?~a loan befr~rc the ~orl~fl ~an~.
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CONTENTS
_ Pages
TR~NL3S ~I RR~E ~' ............. ~.........:........ ~ - ie
A.RT~CI,ES .......:....................... ....~A-13
;e~r~,sh React3a~n to the bfl~fSCOP Repox~ .... ~........... 1
PosS~.ble ~'a~l of Raaaaad~ea Govexnarie~it ......... . ..... 3
~napB.icattoa~s o~ the T.~ Cabi~aet Changes ........... ... 4
Prospers fog Direet Com~~~st Aotgon ~ It~~y ......... S
~nplieat~ons of lla~an's CritieaA ~nterna~ Sftuca~~on ......... 8
't'he So~~et PropQSal~~or ~S-~3SSR '~~thda~awal ~tQffi Korea... 9
Economic Sitnatgon ~ Chana ..... ..... . I2
Argentina's .Eleetfon to Security ~Co~anc~l ..............13
~oQUmenL ~~' ~- d
pp ~CtiANGE 1n Class ?
~ D~CLASSITIED TO . TS g
.~k~~~' ^
~,..-; ,. C = ~~' , 4 err ,7
:~
~ f ~-1.~ A L ~,...
;;te
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TRENDS IN .BRIEF
GENERAL
A substantial~proporti~on Qf world Te~-rv does not'favor
partition as a~solution of the Palestine problem (see page 1).
An increas_i~g, numbed of UN gepresentatives doubt that
the UNSCOP ma~oritg proposal for the partition of Palestine can
obtain the required two-thirds support in the General Assembly.
These representatives consider that the probable,abstention of
the UK, the Netherlands, and Belgium, and possible similar action by
some Latin American representatives,will prove decisive in pre-
venting acceptance of the report.
Strom Arab o~o~osition to the UNSC GP xnaiori~g report
continues. Although no organized uprising is likely to take place
in the Middle East until the UN General Assembly has completed
its deliberations, 6he general strikes scheduled for 3 October in
Palestine, Lebanon, Sg~ria, Iraq, and Saudi Arabia may lead to
violence.
WESTERN EUR.OFE
The likelihood increases daily that the Ra ar~,dier Govern-
ment will fall following the municipal elections, and the rivalry
between the French Communists and DeGaulle's supporters is
in4:ensifying in anticipation of t~iat event (see page 3).
Further UK Cabinet chapges, designed to increase the
Government effecfitveness in meeting critical problems, can lbe
expected shortly {see page 4).
Although recent events in Italy have weakened Communist
prestige, the Coanmunists will probably not take direct action to
overthrow the Government but may attempt to set up a separate
Communist state in the north (see page 6).
G~rman_ strikes and demonstrations can be expected follow-
ing the resumption of plant dismantlings by the US-UK. German
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public opi~ai?~ ~~ reparations has. alte~?ed from ~ belief that a
considerable porti?~n ?f Germ~.~a capital ~odds~ shoa~ld g?~ ~ctims
of ~a~i aggression to a }relief that any plant, r~?t s?lely milit~.~?y,
sh?uld be s~a.red. Althoa~gh ~ threat of fo~?ce ~.nd the discoa~ti~aaa-
ance of food imp?rts might c?~axrol dem?nstrations, such methods.
may als? gnterfere with co~.l pr?:iuction i~a a Ruhr at a critical
time seed intensify public opp?sitioss ~ the occutio~a.
~~.STERl'~ EUROPE
So~fet officials in ~erlin~ and their adherence in tthe
S?cialist Unity Party ~SEI~) apparen~ly are g~lanning to a~er~e the
So~aiet sector of Rerl~ with the So~.~et done following the Co~cil
of ~'?~reiga~ ~!finister~' session fay ~o~tdon. 'his decision seems to
lee p~?edicated up?~ the S?~tiet con~ction that the ~ounciA will fs.i1
~ reach agreement on ~x?~ar~y. the Soviet Zone he~.deluarters
pr?bablg will be transferred t?a cgty less accessible to the ~est-
ern Powers. ~Ithough a USSR d?es not' intend, initially, to risd~
co~-pelling a per Bowers to e~.cuate Berlin, quadripartite
g?~e~rn~nent will become e~~n less of a realm than it. is now. ~
additi?n, tlne USSR plans ~ i~trex~gt~hen the ce~nLral go~e~nnffie~nt of
the S?vie'~ Zoane at the expense of a g?versaffie~ts of a ~?rcaponent
states and will , n~inin the eastern taou~ndary ?f Ge~.ny at e
der-~?eisse line.
~?he cam,~aia of a Runnanian Comnntnaists to obtain
popular support for a ~ree~ guerrillas represents the first in-
st~.snce of an organised p~ablieity and fund-raisiang da~i~e fo~? this
purpose in Easte~?n Eu~?ope. the campaigns is being pr?moted with
cus~mary ~onsmaunist fs,nat%cism and may be ass eff?rt fi.~: ~1)
divert wo~?ld atteni:fon f~?onn the direct military stapport supplied
by `~e~g~asla~aa, ~ulg~.ria, aid Albania; (Z~ denaonst~?ate that support
f?r the Greed paa?tisan cause spri~ags froxri the masses; and (3)
establish a basis f?~? propaganda designed to promote fanternatio~nal
brigades.
The detersxninatioan of f~he Eastern Ettr Comaxnunfst
regimes to consolid~.te their positions rapidly is indic~.ted by the
e~ecuti?n of. Pet$~o~ in Bulgaria and an intensified p~oga?azn of
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"treason trials" in other Satellite States. The unexpected mildness
of Bulgarian repercussions to Petkov's death may have persuaded
the Communists -that they ca~..n proceed with impunity against the
remaining democratic leaders. The trials of jaganovich and Gazhi
(Croat and Serb Peasant Party leaders) have already started in
Yugoslavia. Mikolajczyk in Poland, National. Peasant Leader Iuliu
?~aniu in Rumania, and Hungarian Opposition LeadeP Pfeiffer will
probably be victims shortly of this same type of "justice."
Thy Communist Party in Finland has launched a bitter
a~a.ck on moderate parties in preparation for the nationat elections
in March 1~J48. By means of wild-cat strikes and persistent poli-
tical pressure for the abolition of wage controls, the Communists
seek to undermine Social Democratic control 'of the labor move-
ment and to disrupt Finland's delicate wage-price balance. The
ensuing economic chaos would endanger fulfillment of reparations
deliveries tQ the USSR and tl~tis probably precipitate Soviet interven-
tion and the subsequent seizure of the Government by the Commu-
nists. Such Communist tactics have increased the political resistance
of the Social Democratic Party which may decide to seize the i~tiative
from the Communists and to demand elections prior to March 19483
in the hope that a Parliament with a smaller Communist representa-
tion could hake more aggressive action against efforts to disrupt the
Finnish economy.
NEAR EAST-AFktICA
Iran ma call into the Soviets here of influence unless it
takes st,~ps to ac eve the internal stability without which no effective
resistance to Soviet encroachments can be made (see page 8).
FAR. EAST
The Soviet ro al for US-USSR withdrawal from Korea
althou es fined promote ovie po iti jectives in Korea, .
serves to strengthen the US, position in presenting the Korean
question to the UN ;see gage 9).
. ..The thgea~ened collapse of the Chinese national currency
may produce a serious political crisis and eliminate governmental
support of Nationalist military forces (see page 12).
? iii -
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ES~~~t t~~PRE
~~~ ~a?~ ?~ ~~~e~a ~ ~ Secf~ C?a~a~cil ~a~
help ~? ~~ i~~ a~c~t an #.~c~ea~e~ acce~~e ?~ in~e~aa~i~l ~e
~1,~`~. AaaAB ~ ~ m67~L~~~ k0~ Vi8&A~& ~A. ~iGF6b'6$a7 Yd ?8iE
~~~ IJS wi~.I ~~~~~.bl~t ~~ ~~~~e~.wif~i~ ~ dew weeks. ~~i~ ac~i?~
wili be ia~~e~ ~~ a ~?zn~ai?~ ~e~n~.e~`~ i~ a~ elf?~ ~cr check
~~~a's i~creasi~n~ aa~ye~se made ~ala~ce wifh a US9 which
~e~.ched a ~ec~~ ~ high ~f ~~~,~~.~ ~ ~?~ ~ailli?~ ci~~i a ~i~s~
se~eri ~~?m~ ?~ I9~?. ~.~ a ~~a~e~ ~?I~~i~~ ?~ fl ~?Il~ di~ica~l~.e~,
Ca~a~a ~ al~? ~e eecte~ ~? ask fh~ ITS fc~? a I ?f ~.~ le~s~.
. ~ ~~? xII~.~~~, ~~ be s~~Ie~rea~~e~ P@sslp ~ a I ~~?~ p~~a~e
ha~ke~s. ~~ae ~a~a~ ~~~e~e~~ ~esi~es ~ included wi~ni~
~;~.e ~c~pe ?~ e E ?~ean ~ecc?e~y ~~ ~a ~Y tBS as~~ce ?f
di~ec~ d?lla~? help ?~a~h a P~?cn~e~~n~ ?f su~~li~~ iffi Ca~ae~,
and 'a~~?~ g~a~~en ~~?~ ~hi~d ccun~ies ~ec~f airi. .
i~
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,~I~.T~~ LE S
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jES~I REA~Tf~i~ TO ~?fl~ S~O~ fiEP~RT
~.n anaflysis of Jewish B eactio~. to the maj?rity rep?st sub-
mitted key the Specia,fl ~o$nrnitte~ ?n ~apest~e ril~S~?~~ re-
veals that a substantial pr?po~4i:ion of ~a'orld jewt?y, f?r varying _
reasons, ~?es not favor partition as a s?la~tion ?f the ~ale~tine
pr?ble~. ?Y?he e~xeme Zi?nists xe~ect partition and clam all of
Palestine and `Trans~oxdan f?r a je~~=ish s~.te. The m~es?ate
Zionists accept paition with rese~~vations, hopiatg that it wilt
lead to the acquisi$ion of all Palest~e and possibly Tra~asjordan.
The non-Zio~sist jews9 large in number but ge~seraflly non-assertive,
reject partition, a~a.abtt~.ining that the primary interests of world
Jewry axe jeopardised by the atte~}~t of a ~iflitant minorfty to
bui if it sh~uD.d later ~e suppressed as a F?litie
cab ?rgas~i~aticns (as its beade~?s appare~tbg a~tic~.pate~ tc~ c~t~aie
its actinties as a~a uuder~rd ~??e~e~t thr?u~h the wcrl~ers.
At preset the ~?~uuists are atte~pti~,~ to igaffbtrate the
uui~s whfle preserving si~ubt~,~eausig the appearau~e ?f n~ ~?~~
a~u~fst c?~etr?i t9y per~itt~~ Social ~e~~crats t? $e~aaisa iaa p~??~ai~
nest offices te~tp?rarilg. ~~he c~~rexgt C'~~~uuist strategy fs t?
train ?ver the i~dfv~.dual w~a~?her ~ aid gnus assu~ae c?ffircaaud ?f the
u~i~~ thr?u~h c?~ntm?b ?f the r and fibs. i~ar~st sea~tinaeut is
paicularilg str~ ~ the Rheiui~h-E~lestphalia~a industrial re~~
~d especiabbg pc~t~e~?ful fxa the Ruhr. l~ addition, a reliabbe A~eri~
cap trade unionist rep?rts e~ter~sive ex~ansi ~f ~?ffi~unASt tae
fbueuce ~ greater Besse. 'b`he ?verall plaBa is t? ~ai~i sufficie~at
strength t? tae hn a ptasiti~ t? shut ?ff ?r seri~usig curtail bi~~nal
pr~ductis~a.
-5~
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EE~'E~~ ~~" ~~.~L~Ia~~~ ?~'R~~!!T~' ~~~ ~.~~E~~~'~E ~~~~E~
~'~~ d~~c~~~.~ ~~ ~~~ ~?~.~~~~.~~ ~~a~ia~.,~~~.e~ ~~ea~y s~~ 15 5~~~~~~
~~~ ~n~~~~ ~~~~~ ~~~ S?~~~~~j:~~~~~~~~~ Sa~~~~~~~ a~~~~es a~ ?~p~a~~~~i~y
f~~;? ~u~~e~ ~~~~c~a ti~~~~ ~~a~yo ~?h~~, ~~t.~ ~.~a~l~~~n~:,a~~~~ ~f ~8:~~
~7S ~?l:~~y ~~ ~~~~~~~~~~~ ~~a ~~~~ ~~,~~~~~ cad ~~~ 5~.~~~~.a~~ .~.s~~~r~~~ b~~
~a~. ba~:a~9 ~? ~~~~?f~y ~~~~. ~ ~~~m~~~.~~~.?; ~~s~~~ Daly va~l~ ~~aa~~e
~ca~.a~s~ ~~~ ~~~~~~.~a9 ~~ ~~~y a~~ ~~~~.~~ ~:+~ day '~~ae ~~?~~~ ?~ x?~~i~
~.~.. ~? ~.~~ ~~~~~~~?~ d1 ea~~~~~ ~~~~~~~ ~~ ~~~~ ~~~~.~~~~ a~~~.~ a ~?~'~~
~a~.~~~ ~~~~~ ~~~?~~~~y ~~~.~ ~~~a~~y ~~~~r~~~~~e~
~.~ ~~~?~~~~ ~a~~~~ ~~.~~~~ Sa~~b~E~:~ ~.~~?~.~~~ ~~pak~~~~~ lies ~
~~~~~~ may ~~ ~~~~~~ ~? ~.~~~~~ a~~ny ~~~af~~ a~ ~.~~ a~~~e~~~~~ ~~~~~~
~~~~~~~ ~~ ~~~~~y ~f ~~~~~:~~~~ ~~~~ Sa~~~~~~~ a~~~~~e~ a~~ ~~~~~~~~Iy
s~~~~~ ~?~ ~~a~ ~iSSP~ ~~~: A?~~w~~~~~?~~ ~a~~~ay ~~ E~yp~ a~~ ~~e ~~~,~
E ~,~~ o
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w
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REI~~~i~i., ~F ~~~R~~~ ~TtEl+liiER
The recent resignation of TtarT~ish Prennier ~el~er teas
~,~
c~.used by the e~epression of dissatisfaction. with his Go~ten?n~neat
~
~,,,~?"'
iay the olspositic~xn l~ezn~ecratic Party and also by tae r~k and file
of the Goverran~e~nt's own p'eople's k~~publ~.can Pa~~ (PRP~. Rise
.~,~ ~`?~
conate~nt in the twa paies was created primax?ily ~y a Govern-
xrnent's abd~xrate a~;tit~.~.de toward criticisrzn of s?snne of its internal
policies. .
This s?rt of p~?essure, everted am -the Gove~an3e~tt fro~rn
bellow, is the strongest manifestation sinnce tine introclinc~:i?n of the
rnultiMpartp spstea~n Tess than two years ago of ttie gro~vixng strength
~OO~ of the ~exnocrats and of a dissident elements in ~ FRF~
The fact fihat lrartgr leaders p~;rrznitted ~:he Got~ernrnent try fall render ~
such circunnstances (which w?uld knave lbeen innpossible only a ~~.k
sl~o~?t tinne ago) relsresen a progressive step in TurB~ey's evolta-
tio~a as a democracy of tine ~e~tern type.
Fever's Foreign l~~nister, Masan SaF~a, has ~.ccepted
President Tnaonu's retest to form a anew catai~et. The Saka cabi~
net gill, ?f course, YsA c?mposed ?f PRP rnen~lrers, and its foreignn
policy wiil not differ fr?m mat of the Pekes governnnent. Yn in-
terxaal affairs, it" wi11 prola~.bly offe~? less o3~stinste z~esista~nce to
dex~na~nds for more liberal legislation. ~Iowever, inn dealing with
current econ?i~"ic difficulties which have been th"e basis for
cri+ticisna by P~"F as ?~ell as_ ?g~position xne~rs of tfae ~Bational
.~.sseanbly~, here is nao irnciication yet that the anew cabinet will ibe
mare corrnpetent than its predecessor.
e?_
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. , . ,. ~ ,
P~~~~ ~~,~~i~~F ?~`1~Sf~~ Y~Y ~~f3~H~V~,
'~h~ ?: ~~b~~ ~~~~~,~p Vi~~aaa~ ?f ~if~h ~o~s~~a~n~~
~a~hh~ a ~`~~~~h ~a~~?~ ~aaght p~~~~~~* ~ ~~~as~~ f~~ la~hi~a~ ~
e~:L~e~ ~~~~~h ~yl~~a~y c~ffe~siv~ ~ ~~.~e ~~~~~I~~r. ~~e~~h
n~:~~~.~~ ~%~el~~ ~~~~~ ~~~.I~~ ~~ri"~h ~~ e~gden~ ~? ~h~ ~~ah ~.~
~~?~~~~f ~~ h~~i~~~ ~h~.~ ~~~?~a~'~~~~~ ~r?~a~~ ale xn?~~ p~?f~t~a~~ ~~
~~~~~~ Af a~r~~~~d ~f~~y the ~~~~f~~ ~~~~~nm~n~ hay ~~~~ ~he~ by
~ ~?~~~~a.~~ ~~.a~paign.
~~~fh~~? fa~~~~ f~~?~a~~ ~~ ~~~~~ ~~~~~h ?~a~:~?a~i~ f~ n~~~h~
e~~ ~~a~~~. ~s ~h~; ~~.~3~ ~~~~rf?~?~~~~~ ceder f~?~fcal ca~as~gt~ar~s
of ~'~~~; h e?~aa~.~~a~~~, ~a~~~~~ ~.c~~~~~d ~ ~h~ 1~?~$h .l~f~~~~ campa~
?f ~~~~~~3 ~~~. ~~~~.au~~~ ~ ~~ ?f ~~~~~~ ?~ ~?e~lae~r~~~~e f~ h~.~
~~~~n ~~~~.~~~ shag ~~~~~~ ~~~ ~a~~a~tx~, ~a~~~ ~~~~~t~~s ~f i~ tea-
~~~?~~~ ~-~.~ ~e~?~e ~~~.b~~9 ~h~~h ~~~~~ s~~~~~~~y ~~~~a~~~~e F~~~~h
.~ ~`~~~~:h ~affe~sf~~, wh~~~ ~~h~~~r~~ ~?~n~ ~e~c~~ss ~a ~. ~~x~~y
~t'a~l~~ar~ i;~a~se, ~~.g+ ~~~a~~~, fa~;9.~,~ ~~a~~f~?a~~ ~e~~i~~~~ ~?
~~~~ch ~~~?~~~~. ~~~h~~~h F~~~~h ~~~~~~h i~ ~a~?ch~~ i~ ~~~~ffi~.~~d
~~~~ ~~f~~~ ~h~ ~n~ ~f 5~~~~h~~?~, ~~e ~~~~~~~tBAa~~t~~. ~he~e f?~~~~
~~~h~~~ ~?~~~~a~a ~m~~d ~~;~~~~ C~~h~ ~h~, d ~~~e~n :A~~a,
#? ~~~?~~~~a f~ltr~.~.~?~n fa~a~ ~~~~t~~~o ~h~~ ~~~d ~~d~n~~~ ~h~ p?~
~n?~ ~f the ~~ea~~h-~g~aa~~~~~ C~~~a~n ~h~~~ ~~?~~~~x~f ~~ fhe
~?~~~~~. ~~~~~~~~~at~.i ~?~a~i~e:~~ ~s~~.~Ai~h~d 3~ ~h~ ~~~n~h-?~caa~~~d
~~1~ ~~~?~e f~~he~ f~.~h~~~ ~s ~~~r~afy~~~x~e~w~~~3.~ap~~~,li~~a; d
~h~ ~~~~~bR~~~~ e~.~~~ ~h~, f?~~?~t~p; ~h~ ~~?~~e~e~n~ ~~~a~1f~h~~ ~y ~h~
~~~~h~~~ ~f e~e~~~sa~, s~~~ .~fsy ~y~.~h~~~~ t~ ~~~~aa~ ,y
~~?~~~ ~h~ ~~~e~ b~f~~e the mod,
-B-
~P~RET
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 a~ ~
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r 1 1 ~! JtN t,~,
~~N'TE~I'TS"
P~g~S
'TY~'DS EIS $~t.Y~T? ........ .
.....i-iii
S??ie$ it~a~4cions to ~3S Po~i~y iga ~o~ea ...... ....... 1
STS Air ~roSp~~s fn East~ra~ Enr?p~ .... ............. 3
Soei~~ ~ffo~?~S to S~r~ngthen Positio~a ia~ wry ......... ~ '.
~~~~d~~~ Probi~m~ Cort~ros~~ing Nadia and PaigiStan ... 5
Iraniaa~ R~SiS$~.a~o~ to So~i~~ ~~s~ure ................ 7
~ecerag De?ekopanen~a in ~cio~aesia ... ? .............. 8
Canadian A~iora oa ~o~la.r Stior~age < ..... > ...:...... ID
Docum?n~ L ~- -- 0
BC CHANGE in Class?
DECLASSIFIED TS
T0:
CHANGED r ?7
Class' DDA Memo, '~ AP
DDA FF?G? 77 1763
puth : ~J-~ BY
Date=
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`~~,~I~"~5 ~ ~~~~~'
fe~u~y~awe~? ~~~~~~~~ ~:~ i~~~?~~.~~ I~~~~.~~~~ w~.IY gr~?~d~ a~
~~ ~~~~~~~ ~~ I~~ ~~~~~~ ~~~~~ ~~~~I~.~~~ ~~~~~ wIII
T~~~~,~w~II~9 ~ ~i~? ~~I~.~;~~~~Is~ I~ ~:~~ ~~I~~~:~ ~f ~~s~~
~~~ ~~7~~.~~~p~ ~~~~~~p~~~q'~~L~.~q ~+y~r~*:.g~~u?~~y~~~~~~ ~y~~o~~~?~~y ~a~?+~~y~~~q~p~.~~~,~l~p~~ ~~y~ ~~
~(~~P Si.E~lf.~8F4 ~88~~63s~~ad @P..N ~A?5~^9 C.~;c:4.~ ~,~Y6 u'+di;~Gi~~.i~3 V.~~cl/~N~GF.Ad6k~ANG~d7 5MV.5'13g~~@~~'.SS&~I
~~~~~~ ~~~~~~~~,~~~ ~h~~~ ~.~ ~ ~~~~~~~~~ ~
~~~~~~y ~t~~.~d~~.y :tea' ~o~~. ~Fa~ ~~~s~~x~.II~ ~~ ~'~?~+~ ~Y'YR~~A~,r.,
~~II~~~~s:~s ~~~ w~IIQ~~~-Il~h~d Ic~~.l ~~ ~ II~~~, 4~ 3s ~~~
II~~~d ~~ ~h~ ~~~~~ ~~ ~~~~~ ~~~~~~~~ ~s ~~ p~?~~~~ ~ IJ~~~ ~ e
~rl~a~ ~~ ~ T~~~'~?~r ~~~~ ?f ~ CF's ~~ ~i~~~~ ~? ~. ~.
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i yr ~r.~icr, r
strong ~~~~. ~ositfi?~ pis ~ ?~is a western l~owc~rs .~ ~?
~rocaare ail y~ossibie benefit from. the ai~.ost ce.~ failua?e of the
conference. Sho~Yd So~Fet ~f~?~?is fait t~ iii ~?.~a~ on So~
?iet ter~s9 a Y~ea~~ wag ~sbBi~h a aster ~ebgicy9
east of tF~e gibe see Pie 4~.
~3K Prune ~iste~? Aimee wig ~~?babl~ ~ta1~e two ?~
free Cabinet changes ref?~~ ~~io~ea?, eli~i~a~in~ o~.in
~~~~ doc~inaire Socia3ist~. if ~ shonid not, how~~er, tale
~~~~ action., it wiii indfcate mat ~ Governa~,ent, des~f#e ~
econo~aic crisis, intends to rs~e a doctrinaire Specialist pro
gran his f~,Ii end even to dress for tree nati?nalization of e
steel Indus The ~ossfbiBit~ e~sts tit A~3ee himself y
re~ig~; i~a which c~.se ~e will prob~,bl~ succeed hftx~.
?f~at General de C~suile ay r ebsrn ewer in fbe event
of an econo~is and food crisis appears io ~e an creasing s$f
bili~m leis strong anti~ogn~c~nist stand, his adBnfssion of error
in aces a Co~~un4sts intio~the drench National ~o~Fnf~ee
in 1943,. ~.nd tl~e te~nporar~ wr~al~en of the French Co~n~mm~ist
Farms lr~~e. c?~bia~ed to increase his populari~ at a Effie when
e belief is beco~i~ng widespread fil~.t Est?w~r French coalition
~o?effients are incapable and ihat a str?ng go?er~ffient is, rem
~uirep. At present bB~t tw? 4es of s~oa~g rule appeal possible
f~a France: aside-pares C?~n~~nl.sg rule or a re~iffie headed
b~ Y?e Cxaulle. Tie layer would alapear to be preferr~;d ~ a
~caa~?ri~ of ~`rench~en.
The lonecontinued tende~~c~ ?f a anti ~' o~~tgnist parties
4n i~Iy to break ug into immeffecti~e, ~n~ll ?oups and bus defeat
~e~asel~es has been de~ons?a~d ?nce ffiore by a recent schisffi
in the ere~.e~rightist ~o~on In Front. l~fssident elements
of tr~is org~.ni~aon have for~e~t a new- ~ which appears to be
allying itself with neo?~'ascist and ~orchis~ groups, pro
~din~ flee Co~~.~anlsts wig new an~~~ascist pro~~~.ne li.s
lo~~ as such schisms and political inepes~~ continuep a nu~e~~?s
feel sulSeriorityP of l~rs an~~ouhist group$ wig be neu~al~
iced by a di?erge~ct policies o~ weir leaders and by a discipline
pf e ~;?~nft~nis'~ ~~,,
d if
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~ defee~~r~~ ?f eta ~~~ ~~estde~~ Care f~?~ ~e
~~~a~~~ ~e~n~~e ~t~s ~ee~ dfe~~ed ~~ ~ s~e~ ~e~a~:edl~ ~~de
Y~ ~d~fr~.~ Gab~ee~.d~.s ~~ ~ se~;~et ,fee. ~'~t~e~a~cs, eus~dq
aid ~,ee~sed ~f ~Ie~~~ ~~ ?~e~~w ~ ~~~~xe~t, seed ~~~~
~e ?~~ed tae a~?a~~ve ~fl~~. a~~~?~~ ~f ~0 ~be~ 194fi w~~a
ate ?wled~e and ~~~e~~ ~f ~"a~?~ spike ~~~e~~d~s'_~e?e-
~~ti?~, f~ fs d~~~l ~ ~~~~sr ~~1 ~.~e ~e~?~ ~ ~~.r~?~.
~e~a~se ?f a I~~er's pres~i~~ wit~a tae pe~g~e ~f P?~~~.
~~e ~~~d ~f tae ~f-I`~~~lc~ffi-~d~ ~i~~,s a c?~l~.~pse
?f ~~~s~~?~?~; aid app~~~~ ~~~ae e ~ ~f 4~e chef
e~.~s ~?~f~?t df~ a ne~~ f~~are see a ~).
A~~~ ~ ~ ~s ~ Y~ ~~~rese fir
c?~~ess~~sx~ -A~e~ba~~a~, c~~~~~~ ~f ~x~ s ~ete~~t.~?n
~~ depend ~~r~e~~ ?~~ f4s es~~~~e esf a ~.bf~f ~f a Neste
~eawe~~s ~ sup~~# f~~,~~a~ i~depet~d~nce d ~ s4?~ S~~e~ ayes
si?s~ ~. ~?ueaste E~~s~~Ze see pie ?).
_ ~~~~ed ?le~~e d fau~~t~e~ delay f~ the ~e~~~~~f?~
~~
,d tie c~~~esl~.~?dl~p~se ~~ lead ~~~ ~~~ ~ I~.e~ ~ape~~.m
t??~s taa e3f a ~epll~ ~~ ~a see pie ~);
~~lt~ ~~
~a~a~.'s ~~ t~~lla~ ~~~~?.~~ wlll p~?abl~ mouse ~.t
^~s~~~ ~~ ~s~de~' ~~~~ ~eslet~.~~ ~ ~ d ~~~stl
~'~ l~ t~.lll~~ agp~?.#e~~ ~~ ~~~ d~~~.~s see ~e ~~)a
~~~-~.'e~a~: ~~~ ~~~ ~~,~.a~.~~s deg ~e~~.~se ~f
~~~~~'~ wllll~~ss a~~ed~ ~?~ ~ de~~ ~ ~~e ~~~ f~~ ~
see~~d ~~~ ~.1~~.~e `~e~e~ ~a~.~ ~~~e~.es aid. ~~e~~~ ~~ e~~
~~ ~,~.~~~s ~.~. s~~~a ~ ~~~te weld ~~~s~~~~te ?~~~~~ ~?~p?~~.~~s
slle e~~~a~ aa.~.f,~ie. ff ~~ee~~~~: ~.~?t ~e ~ea~;~ed ~~
is fl.l ls~~e 9 ~~eslde~t t~.le~a~ ~~ ~efe~?. a p~~~le~~ ~ ~~ esf m
~?e~t ~ ~ ~e~ ~~ ~el~ ~~?~.~~ dfse~ssl~~ f tie s~~~e~t.
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i vi -vL' Vi~l`i 1
~. ~ ~` 6 ~ Ta ~a S
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a va- viJ V~\L' 1
S~~E7C FtEACTtP.~l~ ~'~ US ~CLIC~ IN KOREA
Soviet acceptance of the US proposal for afour-power con=
ference on the problem of Korean independence would clearly ins~i-
cate that the I.TSSR is confident of the strength of the present Com-
munist political organization in South Korea.. Conversely, Soviet
delay and obstr~xctionist tactics at a four-power conference yr a
coaxaplete .boycott of the conference wound indicate that the USSR
considers the Communist Farty weak in the southern zone.
Despite Sovie~. contentions that the negotiations of the joint
Commission have been laindesed by the "oppressive" and "uiradenlo-
cratic" governing policies of the US in South Korea, the records
of the ffieetings show clearly that the USSR planned the current
stalemate within the Co~issioai. `Throughout its stay in Seoul,
the ninety-man Soviet delegation subordinated its work on the- joia~t
Commission to the organization of a fifth column designed to obtain
political doffiination of South Korea. The USSR has protested the
recent arrests of Coffimunist leaders in the US Zone probably be-
cause of the effect of the wrests upon the carefully-establashed
Co~xamunist political organization there.
The US proposal for afour =power conference includes a
proposal for immediate bizonal elections to establish a provisional
I~'orean govea~~nent. Curre~at political alignments in Korea, how-
ever,~favor the eventual dom#zP.ation by the Communists of any pro-
vlsional government that may be elected on a zonal basis. soviet
domination of the northern .zone assures a solid Coffianunist bloc
of one-third of any go?ern~raent based on ~roportia~aal representa-
tion. Simultaneously, a solid lef~st front e~sts in So~xti? Korea
which is smell ba u-uianbers; handicapped by arightist-dominated police
force, and opposed by numerous rig~rtast groups. Ti~ese rigi~ieist
groups are disorganized and mutually uncooperative, and the possi b
bility exists that, in the near. future, the more AfghtYy-l~nit, though
sffialler, Communist organization can successfully oppose them.
Recent aggressive US ~.ctics have probably no$ d#srupted this
leftist structure perinanex~tly or changed the basic elements of the
situation. It is doubtful, ffio~?eover, if the presence of Ul~T observers
at the elections could alter the electoral result appreciably.
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i vi vL' Vl\L' 1
f
.A~?u~h ft ~s nit eete~l tit a ~SS~ wii~ acee~t the
~~ j3~Q)~~~5 ~~~ c ~~ffied~.a~e' ~~~89~.~.8' eRe~taQn~ s Sii~h a~~ej3$~.n~e
~reu~d fu~the~ S~~et e~~e~~re~ iu ~~e f~lle~~?n~ ways: ~1) a ~S
~~~'e~~i~e ~aliey w'?uld be made t~ ~ee~ unwa~~anted, a~e~ the
tJS wuuid a~~e~.~ rasp?~nble f~~ the ~ta.ie~ate w~th~a the jt~fn~
~?~rnf~sf?~n; c2) S?~et ~ettc~ the ~t~~t ~?~affiu~e~en w?uId nut
be eubjeeted t? ~uhYi~ e~~.t~ton ?a? deb~.te; and ~3~ ~ tea~~rary
"p~u~-i~~Q~ip' ~~~e~~ent w?uld a11~3w ~?ur~~et wcsr~ers, ?n
the ba~~s ?f f~?~end~y eu?~e~atf?n w#th the z?~ghtfs~, t~ obta~a hey
pa~a~ff?a~s w~~ich w?uld ~e ad~.nta~ee~ue when ~ pe~ent govea~n~
ffire~at i~ eAe~ted.
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1 Vi ~7riljltG lm ~
~~~~aa:l f~ta~~ ~~ftk~ t~~ e~tlis~s~. ~~~~~~ts ~# East 1~~~esia~
a~-d ~~st ,~ ~~st ~~~:~,
~##e~i~~ ~~t~~l ~y t~~ ~a~te~~ i~ t~~i~ ?#ftci~ly~?cc~p$~d
a~~ i c~t~u~ ~~ b~ i~gai~~~ ~y t~.e ~~~~~~-~~ p~~tcy ~f
e ~.~p~bii~~ e~~i~~. g~~ps. ~'~is P?ii~p ~ ~i~a~~ pri.~~iAy
~.t p~gati~~ ~~r~fp~~tr p~~~~ssi it~~a~st~i~s, d st~~il~s ~#
e~?~t, ~?c~iti~s ~i~~i s~bsi~i~y ezxa~~~.sfs ~?~n~ati~ats
d ~~ ~iidta~y st~~?~s, but its a~~~~i~.te ~~~i?~~a~ss has b~~~
b~~ ~~~a~~~i~a~ ~s~ic~as. ~a~t~h -~~?ritfes ~a~~ ~e~~a ~,~i~ ,
t? e~? aia?a~.t ~,~~~ ~~~i~ t~r~s ~# ~ib~~ d s~l~~ ~~~titi~s
?# sisai d i~ai~~, ~es~it~ ~s~d ~~~i~atie~s~s. ~ 1~~-
~~~ c~##~~ ~# t~~ s~~~~~~~a~h ~li~y3 ~?~e~~~, . may ~ t? Ie~~.
t~~~ ~ pe~?i w~ a t~~ ~~il i~~ ~i~ t? s~aip ~a~ts #x?~
~a~a ~e~~.us~ stoeP~pai~s ~~ k~e~~ ~a~st~d-~~ ~~~~~t ~~~ucti~.
h~.s ~~t ~~~?n~re ~~~c?ti~~.
_ t~~ ~iD~it~.ry ~.~~i t? ~?s~sc~li~t~ ~~~t~~i ~ ~~,~.~a~ d
~a-~t~a ~~ ~~~3i~~ ~~ti t~ ~~.?~~ s~~k~ ~?~s?3ii~~ ~iflg cue
gor ~ i~?i~~i~it~ ~i ~~s~it~ ~~te~~s ~y tk~~ ~'~ ,~~~~ity Caacii
to s~~~~ ~a ~##~~t~.?~ t~?a~~~.~ ~~~ ~~t~~ ~ ~~sti#y f~~~r ~siiit~y
~.~f?~ ~y tie cfl~iffi that ~~ii~ t~~~??~^is~ ~.~ti~.ty t~~ate~s ~~?~~~
wi~~i~ e~.s #?~ ~~i~~ t~~ ~~ ~ ~:ssa~~~~ ~~s~~sibiiaty, ~h~
~~~ii~ w~l jaasti#y its ~.~ti~~ ~a ~ ~~~~s ~.t its d~ #~,yt? ar~th~~i-
~y ~~~~ t~~ ~~~2~s ~~~ ?~~i~d! by tta~ ~c~t~~ ~~~s ~i~a~~y ~~cmmi~~~
i~ t~~ L~~gad~ati ~~~~~~~ ~# ~Ia~~h ~~47, w~i~~ s nit be~~ ~##i~i,~-
py r~~i~t~d.
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1 Vl vL' vill'i 1
~e~c~t~.~.tt~ t~ e~~ the ~:a~~~t~; ~aet~ee~ e ~ethe~~ ~~
the ~e~I~~ ~t~x ~e ~e~~ye~ ~y the ~~~~,~~ee~e~xt ~et~~ee~~ the t~~
~a~t~s~~ e~~ the c?~~,??tt~~~ ~ f~~ ne~~t~~. ~Rhe ~~t~h ~~y that they
wtA~ ~~t' ~ae~s~~te ~~ the ~e~~tc ~At~ v~~Ie~ce ~~ ~aib~te
~e~.~e~ ~hxle the e~~~~~~ ~e~..~~ thag t~h.t?~c~s ~e ~~~~
t~ ~~~~tie~r~s held ~.t the ~~t~~~e~~ ~~ h~~tiFtt~.e~ bed?~?e ~t w be~i~t
peg?ti~.ti~~. P~s~t~?~.~;te~ de~~y ~~e~ c~d~.tt~~~ t~~ ne~~t~,t~~
~,~~ ~a~the~ ~.el~y ~ t he p~~~e~~ ?~ ~e~?~t~~t~ ~he~ ~.~~de~,~e~
may I~a~ the ~aat~h t~ ~~,ch ~~~~~.tt~~~ ~e~f~e~ t? e~~~a~~te the
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? 1 Vl ~7i`iVilL' -1
~;~.~s~.d~?'~ d~~~~f~~~~f~ d~ff~~ ~f~f~~ f~ ~~~iu~ ~~~-~
1~4'~ .~~ d~f3~.~ r~~~g~~~~.~ ~f ~ ~ ~f.~lf~~~. ~f ~~~ ff~~~ ~~z
~3~?nt~ ~~ ~~~~9 ~~,'~ d~ff~~~ ~f~~ ~ ~~ s ~~~ ~iflf?~ da~f~~s,
~~~~f~ gal ~~ ~ deffcf~ f~~ off ?f ~.~~6, ~~ ~~~~ ?f d~ff~f~ ~f~~e
R ~~1~ fs ~e~g~~d ~? b~ ~~flf hf~~?;x~. `~~~ i~~ d~ll~~ c~f~f~ wfif
pra~~.~~~ ~~~~.~a~~ fie' g~~~~f~:~ ~p .~ f~ ~~~~~~~y f~ ffi?dif~s
e y~~~~~re~ ~s~~z~~~ ~r~~~~~~ ~~e UI~ s ~~~a~ ~ if f~.~
~~f~~ ?f f~ ~'~~~.df fffi~ ~wff~ ~~ ~~f1~~~.
~ff~ ~~dfa4?a~ ~~B~id d~~f~~~df~ fa~efe~ ~~~~?~~t ~
~1~~~~ by fa~~~~ ~~ ~? t~~ L~~ ~~d ~~ ~ff~~tf~r~ ~~l~ff~,~~i
~~~d~ ~~?~.~~~~~~~ f~ f~ ~~s~~a~,~ ~.~ ~~.~~. mil f~~l fffi~il~d ~
~~~~ di~?e~EQ f~~~df~~~ ~~ff~f ~~f~~~ ~~~ ~~d ?f i9~`~. ~~~ ~~~n~
~~~~ ~s f ~~e~g ?~ ~~r4 ~ ~~?f~~~~~~ $ e~f~~ic~~ caf f f~~ e
STS a.~d ~~~.~~~ b~~f in ~~~ ~~~~If~~ ~~?~~.. ~?~~ v~a~~~.t f~
~~~ f~ ~~ ~~f~.~~ ~a~~~ ~a f~~f ~t f~~.~~ ~~~ ffAf~~~ d~ff~~s.
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? `F J - - .....v- ~~~~
T T 63
~?%t~'EI3TS
Pages
~R~~sI?~~ ............................... i-~~
AR~IG~~ ..................................... 1 - 16
~'ransgsortatioa~ Problems .~Ifect~tg ~upopean Reco?ery ... e . 1
l~Nfgu~~l$$tf/yyila$t.~ear~na~l?At~ T~'~g~aAri~spoaj~ Ag~ee~.ent ......... , e ... e . 2
(~?YS~it 8d1t5ibit 6o~S 48d C~.6d~t~ba? ? ? e ? ? e ? . ? s e . ? e ? ? ? ? ? ? ? . e
Forces YTnaierffiin~g ~'~ranco's Positfon......... ? :..... fi
~e GanAle's Fte-entry Ito Politics ..... ? ........... e . 8
~o?iet P~eopagane~a Reflects Ndouaatiaag ~l'S-~S~R ~ensioa~ ..... 9
Possible Pro-So~fet Agign~ent of~ the Do~~'aion of India.....10
continued Agitation f?s Greater Syria. , =:......... ? .... ? 12
French Suppox~ o? Sao I,~a$ ...... ? ...... , ? .........13
Rio conference Sets Recognition Precedent ....'.........15
Document No. V~ 7
HO CHANGE in Class.
DECLASSIFIED ,
'lass. Ci1Aiv'G.~D T0: TS S
DDA r,4emo, 4 Apr 77
Auth : D.~A `'~:G. 7'!1763
Date: .~-__7__-~By: ~,,!
TAT
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~'REY~I~S YloT gIYtYEF
GEI~tE]ftA~
Yn~reased distribution of Ruhr coed could be effected if the
US and UR approve the "liagc~e Agree~aeat which v-ould resuffie
ate traditional use of Country po for imports into western
G-erman~a see page p~.
Discussions on civil ais?~olicy bathe US, the U~, and France,
to be meld nett meek in I.ondora, wild fux?ther improve the outlook for
a multilateral air transport agreement at the Frio ~;o~ere~ce of the
Internati~a~.l Civil Aviation Cgganization in ?ctober see page 2~.
the e~.n and Fresidea~.t Aleman. `lime sai~ning of a t~S-Zo~exican air
a~~reement at this time would.be a ma.~or step toward tine orgariiza-
. tioa~ of international air transport throughout the western Remisphere
and ~vouRd enhance the prospects for a rnuRtilateral air transport con-
vention along the Rives to be advocated bar tine I7S at the forthconsing
civil aviation conference ifn R.io.
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A~~gC~~ES
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'~'~.AF~SP?R`~ATY~~T ~R.?lt3f~NIS A~F'EC~?~i(~ Ef3R?PEAfl~ ~.EC?VEgB.Y
Western European co~uatries ~aow conferring iai saris ~ the
European rec?very program are becomia~g increasingly concerned
over the possibility that ~JS and bi~onafl authorities in Germany
v~ili snot approve' the proposed "fliague Agreement, "~ which would
resume the traditionafl flow ?f imports into Cermar~y through the
low County ports and subsequent transshipment by barge to the
Rhineland.
`the Western European countries apparentflyr feel that from
their point of view ft would be incongruous for the lTS to urge ~thean
to ta-~e ~?adicafl measures toward reorganization of economy on a
Europeyvride basis, while the ~S and , at the same tinge, .con-
t~ue the inefficient use of giambu~?g and ~reanen as ports of entry
for western Oernaany because of currency considerations deter-
mined by zonal adnninistrationn policy.
Europeaa~ misgivings in this regard are accentuated by the
present bottflenec~ in Ruhr coal distribution. 1Vlore Ruhr coal is
currenatiy being proda~ced thaga the deteriorated Berman rail
facilities cans haul away. The European countries nnaintain that
if the Reic~sbahn could be relieved of traffic from ~aanburg and
firemen which can be barged up the Rhine, more Ruhr coal could
be moped, thus benefiting the entire European economy.
before the BdS reaches a final decasion on the European
rec?~-ery program, it is prob~fle that other questions in the field
of tra~..nsportation will be raised by European countries. Continued
transportation of relief supplies fin TJS vessels, for example, gnat'
be questioned on the ground that European countries could receive
a greater quantity of relief for a gieen cost to the LTS, if unrestricted
transport in European bottoms were permitted and if idle LTS mer-
chant ships were made availabfle for operation by the European
countries with their own crews.
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1`4~71~`Iuld presumably indicate that the
Communists no longer viewed optiffiistically their chances of
success in France.
E.f~STEIt1~3 E1~t~JFE
The tactics of the I3SSI1 iri the U~ General Assembly, which
is to convene in September, are probably foreshadowed in current
Soviet propaganda (see page 6).
Soviet attea~apts to improve l~umanian rail tran~ort, throaagh
the centralization of control and ~e extension of existing lines, will
probably not elinain~.te the f~nndamental wea~esses of the fall.
railways see page S: sand insert)
Ai> ~.ines of the Satellite States have been barred ffrom
Turkey and Greece; similar action by Italy will prevent these air-
l~nes froaa~ obtaining access to the Near East see page 11).
`The recent trials of ffienibers of the Polish Peasant Farty
reveafl again CoYnmunist determination to eliminate all opposi ion
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parties. The arrest and trial in the au~~n of Opposition Leader
Il~ikola~cz~k is expected as a culxninagion of this policy, despite
Churchill s assurance that the UI~ would guarantee his personal
safety upon. his return to Poland.
Future Coanraaunist strategy in Czechaslovat~a has bees
clarified by recent denunciations ~ the Comffiunist press of the
rational Socialist Party (leading opponent of Communist leader-
s~nip). It is expected that a concerted e#f?rt will b~ made to weakea~
all Coffiarcunist opposition ~ Czechoslovakia by means of propagaatda,
parlia3nentary action, and e~etra-legal anethods.
An exodus of Greek Coxnnaunist leaders fronca Atheais has
been ordered by fhe I~ Central Committee. This order reverses
previous instructions ~!ahich kept Conaanunist leaders in Athens de-
spite mass arrests by the Greek Goeernaneaat. It is a further iridi-
ca~on--together wiith the USSR ~retoes !n the" Security Council, the
recent establishgnent of a "free" Greek gov~rnmea$, aagd the with-
drawal froffi Athens of Satellite diiplontats--that strong, taaidisguised
anilitary action against the Greek Governmeatt is imuninentp
~'ESTEItl-1 MISP~ERE
Communist domination of Nls.rtbnia~ue has been achieved
through tactics and appeals which could also be successful fn
Panama and in nearby British possessions (see page 12).
~~onomic pressures in, brazil are forcing the ]Brazilian
G~vernanent 1:o abandon a cautious financial policy said adopt ex-
pansionfst measures that zney be harxtaful to US interests (see
page 14).
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ARTICLE S
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I~~BaD~I~ E+~~I~4?1~F~ Ctal~'t3ITI~t~ l~ ~?fft'~J~AI~
The Salazar regime has been substantially strengthened by
e accoaxaplishanents of the new ~~Iinister of Economy whose trfr~or-
ous campaign to bring down the high cost of lfving has ia~aprotred~
the economic situation of the masses, increased ianportatiions of
foodsf~uffs, the repression of specula$Zion, and the removal of con-
trols on intea?naI distribution movements ha?e forced down the
prices of necessities. Blau aaaarket operatioaas are now unusual.
The I~iinister of Ecoraosny has repeatedly stated that hoard-
ing or profiteering would be considered sabotage agafnst the State,
and he has prosecuted both rich and pooa? persons who have trio-
lamed ttaat policy. .~. salutary effect on public opinion has been pro-
duced by the a~?rest and punishat3eut of certain blacl~ a~.rket opera-
tors, whose economic status lass taitherto protected them.
By ttaus reffioviaag soave of the causes of ptapular discontent,
Salaza.r's Goveraaanent teas ob~ined considerably wider sup~ort~
Such ia~aproveaneaat iaa public >r-orale doubtless encouraged Salazar
in his recent decisioaa to yafl a~ad prosecute opposition leaders who
have long agitated for the overthrow of the regiaa~e.
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UA3REST Iii R`IiE FRL~TCR COI,,C31vIAI, E1t~iPIR,E
The French have been attemptfng to meet the social and
political agitation in their Asiatic and African colonies by programs
of democratic reforms and prorraises of eventual "autonomg within
the ~`rench Union." l~atis~e nationalists, encouraged by what they
consider the benevolent attitude of both the USSR and the US toward
the aspirations of dependent peoples, have become increasingly fn-
transigent and have greeted each French move toward improveaxxent
with demands for co~rapl~te independence. Communists, both in
metropolitan France arad in the colonies, demand that natives be
given equal rights with Fa?~nchmen, but insist that union with France
be preset?~ed. Because of this insiste~ace, the natives have not gener-
ally supporfzed the Communists Tout rather base made appeals to the
US and the U~. ?1?his situation not only has furnished the Communists
with excellent propaganda material for their thesis that the US seeks
tv tape over the French E~apire but also has made other French ele-
ffients eemely suspicious of aay US offer to helg France alleviate
. colonial unrest.
In Eaiorial Africa, where French citi~ensh$p has beeaa
granted to all natiives, the morale of the French Civil Ada~aniraistra;
tion has descended to an eartrennelp law level. The natives, who feel
free and equal, refuse to work. In some instances tribes have re-
verted to cannibalisffi aa~d slave tradir~ as manifestations of their
indeliendence. French cvlonfal officials trace these activities to the
kind of understanding the natives h~.ve of US interest in colonial
peoples and tef the Atlantic Charter.
Ira forth Africa, President Roosevelt is quoted by nationalists
as having guaranteed the abolition of French domination in that area,
aa~d statements by Arab leaders are circularised to the effect that
they have received US assurances of support for their aims. Rumors
are reported frorra Paris that the US has asked for Ui~erte in e~-
change for aid to France; in Nioroc~o, the French Residency makes
minor diplomatic thrusts to offset the faeored position of the US
rep~?eseratative to the Sultan.
In Madagascar, the French are having great difficulty in
containing rebel activity which has recently increased. Fighting
is ezpected to continaae there for some tune, and order probably
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c~~?t ~~ ~est~~ed ~~attl ~e~nce~~t~~s aye ~.r~e t? the i~as~ar~e~~.
E~?e~u~h ~fffi~tal~ ~~?~ ~~~ ~?~ar~ced tT~at the ~~?~ ~~ A~e~caffi
ffi~~s~~na~ seat?ureffie~t t? the ~ehels ~ a ~~is alp fact. -
`~~~ ~~e~ach ~~?~ h~.~gered ~ ef~? cal?~ial pr~ra~ b~ ~e4
Iuc~~ce t~ ~et3e~e t.t .eta P?~ictee, ~ae~? the the .ch~a~
tip ~~ ?t~~ex~ p~we~s, ~~~ tDe cau~t~~ cal~tia-1 u~~e~t. Un1e~s
E~ar~ce eaa~ de~~~ a ~~a~ ?f c?a~uctfve sefe~~ t? p~e~e~t
?~~ a~~~?~.~ a ~uh~ect ~~~tes ?~ the c?1?~ae~ ~$nstead ?~ f~~
~~~~~ ~?et?r wkth?~t ~de~a~.te c~~at4~tt~~~m ~ut~a~e de~t~tcans ?~
~?l~~ial ~atter~ ffia~ he tee ?ut ~a a herds ?f the ~?~e~ch
,A,~~ei~ b~ Batt?e i~.c4t~~.
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FRE~~,~ S~f~LIS~'~0~lYU~" ULEAVAOE
~'he cle~.~.ge ~aetween the French Soc~.lists anti the Coan-
raists has so widened that the fatter were aisle to obtaia~- recogtl
nitdon from. even the left wing Socialists at the gecent Sdcislist
Panty congress at t~yon, although both gronps~ once ~d a close .
worf~mmg relationship. loot only did the .Socialists ignoge a Getter
~to a coYZgre~s frown Co~-~e~nist Leader ?~horez, bot~they also
charged that the USSR still holds S00 ffiilitant Socialists iffiprisoned
~.t the concentration camp in 7Suchenwald.
Thati the Socialists rernagn se~.sitive to ~Gornanunist iaafluence
tarn tl~e:'eft ~~ of the electorate was shown, however, lay the
~.ssage of se?era:l resolastiosas which urge the ~overn~ent to follow
~ grogram of stricter socialist te~:ets which would appeal to the
worms cl~.~ses. In this n~asaaaer, ~e Socialists hope hotly tca coasnter
rece~at Coffi~.asnist charges that the Socialists are `sliding to flee
R.i,ghg" and to hid for. the worki~-class ?ote ita the fall mu~aici~l
elections. ,
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f~O~I'11TY0]~S IN 'f'FiE SC3~E?i' ZONE ~E~~
In the opinion of ~om~unist leaders in Germany, the
efforts of the IISS~ to comanunize the industry and agriculture
of the Soviet Zone in Germany are failing. Thus far, such ef-
forts have lowered production, increased prxc#ion costs, and
alienated the Gera.n people.
Respite preferential treatment for high producers, pro-
duction per worker in state-owned plants has.been steadily sink-
ing, while costs have risen. '4Nhen the industries in the Soviet
o~~e were socialized, all n'anaging personnel unacceptable to the
~TSSI~ were removed. The new managers, while politically accept-
able, h~.d neither the technical skill nor the experience to fill their
positions. The workers are discontented o~rer the low food rations,
the lack of personal profit, and the fact that efficiency and effort
are rewarded only by increased quotas.
The results of agrarian reform ~ tiae Soviet Zone are simi-
lar. ~'he failure of farmers to meet their qu?tas has led to the
imposition of stringe~tt controls. The a?erage farmer finds it im-
possible to aueet ~s obligations because his necessary, expeaaditures
exceed his earnings by as much as ~5~ annually. The agricultural
crisis is caused by faulty administration and lack of basic equig-
anent, hence controls can not ignprove conditions. Faced with this
impossible situation, increasing numbers of resettled Geruaans are.
deserting their .land.
A raew series of Industrial dismantlings by Soviet officials
has seriously impaired the railroad lines and coal mines which are
desperately needed In the zonal econo~.y. The ~JSSI~, pessi~aistic
about its prospects for rapid westward expansion, is apparently
willing to forego eff~arts t? gain the good will of the Gerffian people
for the short-terarn advantage accruing fro~a the seizure of German
inciusta?ial equipment.
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~t?SSIUf,E SOVIET TA~TYGS IN TUE GEI~TERAI~ ASSE1t~~LY'
~dicatzons of probable Soviet tactics iu-the ~epteanber ses-
sion of the i~ GeneraY Assembly are to be found fu current Soviet
propagaa~da. The USSR's principal target will probably be IBS
economic aid to Europe. In e~te~sive treatax~~t of this subject, the
Soviet press has charged that the purposes of the program~areo
(1) to destroy the sovereignty of the recipients of ~JS aid; (~) to
snake all Europe an economic vassal of Fall Street; (~~ to rebuild
the econoffiic foundations ?f fascis~o.; and (4) to revfve German
miYitarisxn. So~ef observers contend that the Nfarshall proposals
are ideaatical principle to the program of US aid to Greece and
`1Curkey, and they argue that the proposals are ~ direct violation
of the principles of the U~. USSR representatives irn the General
Assegnhly are therefore likely to advocate Ul~t supervision of the
European recovery program and m~.y seep to place it. under the
Economic Coffimission for Europe.
Another favoa~ite topic of Soviet propogandists has been
"western imperialisan" as exeanplified by the US, the UK, and the
? ~ietherlands. In order to gain the favor of colonial and ses~-i-
dependent peoples, the USSII. array endeavoa? to briaag this issue be-
fore the Assembly anal rcaay try to enlist colonial support for a
resolution demandi..ng the withdrawal of all foreigai troops from non-
. Axis territory.
Soviet writers and commentators continue to eaaphasize the
subject of atomic control, and an additional zmove by the tJSSI~ before
the A ssernbly will probably be the revival of this issue in connecti?n
with a proposal for general ciisarffiament.
The ffnal position of the USSR on the Greek-Balkan situation,
recently placed on tiie agenda of the General Asseffibly at the instaaice
of the US, is still in doubt. There is, hove?er, a very real .possi-
bilaty that the fall Satelflites, and perhaYis $he USSR itself, will
sever relations with the Greek ~overnmeaat at Athens and v-ifll recog-
ni~e a provisional Greek Go?erument bbefore the Assembbly coaa~renes.
(The Ii'SSR and the Sagellites have already reca.Yled most of their
diploffiatic personnel from Athens. .Soviet and Satellite recognition
of the Greek insurgents would not only present the Assembly wfth a
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f~ ~t acca~~~~ hnt ~c~~~s~ enatale Sv~-fet deTegate~ tQ argue that the
changed s~tuatf~ had made the ~fnd~xigs ?a~ the ~a~an Tnvestigat4
Ong Gor~axn.i~sxcn fa~relevaxat. 7~he S?~et ane~ -~ate~.lite c?elegaticn~
~+ght then as~~~cate that ~. degree of recogntt~?n, st~f~.r ~rha~s
to that accorded the ~d?ne~.~9 he gt~en tae pro~s~.?nal Greed
Ge~c~rx~snet~t by the ~,~'.
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BALKANS
INTERNATIONAL >~ STRATEGIC
RAIL LINES
(ONLY STANDARD ABROAD GUAGESHOWN)
COMPLETED RAIL LINES
---- PLANNED EXTENSIONS
WAR DAM AGED LINES INCLUDEDI
q ~p '4?_ i$o zRo
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RAII.~ TRAATSPDRT I1~1 RUMANIA
While the USSR will undoubtedly improve the operational
efficiency of its Satellite raft transportation systems by centraliz-
ing their control in Moscow, neither tighter control nor the exten-
sions now under construction will eliminate the fundamental weak-
nesses of the Balkan railways.
The recent Rumanian USSR railway agreement probably
indicates Soviet intentions with respect to the rail .systems of its
other Satellites. By this agreement, the Communist-controlled
Government of Rumania has virtually abdicated control of its rail-
way system. Soviet military freight traffic will operate through
Rumania without Rumanian knowledge of the nature of the shipments
and at no expense to the USSR, The Rumanians, furthermore, have
resumed construction on large-scale railway projects which were
instituted before 1939 and were continued by the Germans. The
USSR apparently considers these projects sufficiently valuable to
warrant the expenditure of substantial Rumanian funds and re -
sources which might otherwise be applied in part to the reconstruc-
tion of railways within the USSR. This emphasis on Rumanian rail-
way development is parricularly puzzling because the Rumanian
railways are not aow operating to capacity, and their operations
away be further restricted in the future by fuel shortages. The new
lines, moreover, do not appear to reflect compelling economic con-
siderations from the point of view either of Rumania or the USSR.
The fundamental strategic weaknesses of the Balkan rail-
way, system from the Soviet point of view are:. (1) the change of
gauge between the Soviet and Balkan networks (it would be far more
difficult, for example, for the USSR to widen the gauge of Balkan
lines during offensive operations than it would be for an fnva.ding
enemy to narrow the gauge of lines within the USSR}3 (2) the limited
capacity for movement of freight between the Ukraine and the Upper
Danube on first-class rail lines over level terrain; (3} the great
barrier of the Danube, which is crossed by no rail bridge for 400
miles between Cerna Voda and Belgrade (the only trans-Danubian
rail traffic along the southern border of the Wallachian plain is
funneled through the Giurgiu rail ferry); (4) the lack of an ade?luate
rail network along flee Dalmatian and Albanian coasts below Split
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for the protection of iax~por~,nt irommunist positions at the head of
the Adriatic; and !;5) liffiated rail connections to the Bosporus and
the Aegean.
Tl~e above weal~nesses cannot be rapidly eliminated. (1)
There is no solution to the problem of transshipping freight where
standard and Soviet broad gauge lines ffieet because the Balkan
lines will reffiain standard gauge or narrower. Tt appears that the
T1SSFt, however, is requiriaag that newly-constructed and strategic
lines provide the necessai?y road 1~ed conditions, as well as bridge
s.nd tunnel clearances, so that widening to the Soviet gauge could
be quickly effected in an emergency. Even this expedient, however,
would be subject to severe practical disadvantages. (2) Through
c?nnections across Ttumania will be somewhat unproved by com-
pletion of the Graiova-Bucharest-Faurei-Tali trunk Tine, parts of
which are in operation. Because the existing line to the west of
Crsio~va is single trac&, however, this line does not actually pro- "
vide an additi?nal artery up the Danube ~.lley. T'he ~ransyl~anian
network, ckearacteri~ed by limited east west through coaanections,
will be somewhat improved for So~ri~t use by the repair of exten-
sive war damage and by the conaaection of two minor lines which
will foam a link between ~ernauti and Sighet. (3) There are mo
sig~as of bridge construction on the Danube of of the ins#allation
?f additional rail ferries at three points where Rumanian and
Bulgarian lines approach each other. f~~) A large part of Yugo-
. slaves will- still leave only an inferior narrow gauge network, and
Albania will rems.in nndefinitely without international rail conned
bons. ~~) The Gommunist~controlled Ball~an network provides only
a single rail line for 200 miles to the west of Tstanbul; rail conned
bons t? Salonil~a consist of only the line in flee Vardar valley of
Yugoslavia and a vulherable route from Bulgaria along the. Aegean
coast. `T'he latter line runs through Turkey at ohe point and, accord
ingly, could be used in an emergency only with Turkish acquiescence
or by employing force. An additional line from Sofia down the
Stru~na alley has one section o$ ~arrow~gauge line, partly in Greer
territory, which could be changed to standard gauge by anyone con
trolling both sides of the Greer-Bulgarian border,
The repair of a bridge at kteni will effect the most important
strategic change in the Balkan ne~iork by substantially increasing
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~~a~ ~alaa~fli~f~~ ?af ~ USSR ffi~~~ f~~fg~~ i~ ~~l~~~f~. ~~i~
~~id~~, wf ~s~ ~~ii ~a~~~~ ~+~fd.~e ~i Cea ~'?da,, will p~+~?
?fd~ ~f~Y~~~~p~~d ~afl c?~~ti?n fr?~ f~~ iT3S~ fi~ the ~ul~~,~a
~ki~~ rd~~. !~ gill ~1~~ P~?~de a la~~raA ~~~~~~ between
~~ ~ul~i~, Rui, ~~ad S~~et ~lacl~ Sep ~, e~ti~el~
f~degende~t eaf ~ cold Raarzf~.~ fli~t~ #~?ffi ~ea~~~~t ~h~?~a~
Ffa~e~~I aid ~'?~~i: ~-~~~~ de~vel?p~t.~ wf11, i~ fait, ~~?e~te ~
Y 3~~ ~~e twee ~e~~~ate li~e~ f~~~ tae S~~let ~~i?ra ~~~~~
w~.rd, ?aa le~l ~~?d, ~ the ~~,~~ ~f a ~~a~~ylnf~ ~lg~: ijl~
Cep?~l'~e~ti ~~~ba~e~t~~af?; ~~~ ~.~f~~`a~~ef~~~cba~e~t~
~fi~~u; d (~ ~ , e~sa -~~afl~. ~ ems. ~a ~~a.
W~fle a ~~.fl de~el~sP~e~~ ~s Rumm~a~i~. d~ ~?~ ~ e-
~el~es ~t t~w~,~d an fa~ffi~.~ent ~ilfx?~ e~e~~e~c$ i~ P~fs area,
tfiey will i~crea~e ~?e~rv.t tie S?~et ~ili~ ~te~l i~
~ulria. yt i~ entirely ~.:~kely~ tit these de~el~p~en~ represent
?~y tlae be~i~~ ~f ~ Pr?~~?affi which ~ USSR will Iate~? ee~d
aid make ~~re de~isi~re>
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~~~?1~~~'ES O~ E~STEi3,N EY3~O~'E.~N ~E~NES
Eas~:er~ Eur?~~ ctrfes, ~itk~ the e~cepti?~ ?~ Czech?~
sic~~ai~a, ~~.~~ thus far e~ctered de~er~ined ~~~sasftf~ ir~~
?i?~arl~ey ~~ ~~~~~ t~ their ~bjecti~es ~~ establishf~~ air rtes
t~ the Near East. ~~ ~taiy ahs? cc?~erates with tae ~esteri~ ~?~ers
ha YS respect, it appears 1i~~iy th~.t afri3~es ~~ the Satellite States
~ilY k~e pre~e~ted fr~ffi atY~.iuha~ heir ~.i~s.
Tea his i~pass~, a Satellite States are atteuagtia~~ by
cievf~s ffiea~s ts~ ?v~~rca~ffie Turkish i~atra~asi~effice. '~'u~~s~.~,
had hyped f?r ~rita~sh a~ista~ce f;a 2abfai~~ ~.a~as ruts ~
~'~riCey i'?r tEae '~u~c~sla~- afrli~e thr?u ttte n?~ suspended tea.
~'~~?sla~ air discussi~s. ltuaa~a~a'a afres~t have appa~?entAy
?~erfk~ Tua~~ish ar , ~ree~ tea~rit?ry at high altitude ai'tes laavi~
secured ~.a~din~ ri,~hts ~r?~ Leba?~~ and ~"~.lestine f?x? sge~gal ncm-
sc~ieduied f~hts. ~lthc~u~h it may be beyond the capilities ?~ e
hard-pressed ~?yal ~Iellenic Air ~?rce t? futerce~t flle~l traffic,
it is well ~ithfan Turkish capatailities tea prevent such ?~ea~~flights.
The Czech?~~!cva~~ aide, which has been denied perffiis-~
sf?aa t? ?ver~y Ruffi~~fa enr?ut~; t? T'ur~ey, ~Palesti~re, Ems ~~ -
Yraz~ where it has thy: necessary agrees nts, has bee~a forced t?
~y ~. ~i~?~ait~s r?a~te t? the east ~eiacie, Rc~~e, a~~ ~,tk~ens a
if ~. ~olnsh air agree~~at nth Ytaly $s con~Iuded siffiflar to that
a~ep~rted t~e~een Italy and Ra~aa~f~., a passi~flity e~sts that the
Po~.ish ~.i~^line~which, altiaoug~ lag dig r~.ghts ~ ~~?eece,
has Egyptian :sanding rights ~~.y ~e its newiy_accluired f~r~e~_
~e ~re~ach :;.rasp?:~tts for direct flights fr?~ an Italian base t?
Cafr?. ~ current ~u~ attex~npt t?~ aYi~a Italy witia ~lestern Eur-
?pe ~ ~rnatters ~ air p?lfcy old, if, successful, prevea~t such a `
de?elop~ent anal thus bar the Satellite States ?roan the o~ae re~afn~
ing route to t~~e Near East. _
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~ ~M M ~P71~UE
"~`~~ success ~f `the ~?ffi~au~ais~Party iaa ~ar~ini~e, where
it ~ used ~.ctics that ~.~~ ~?tia adaptable ~ all ~ariialsea~a a~?e~.s
in which ~~~ ~?cfial d~vi~~?~~ f?ll~v racfal lames, a~ad ~ar&~edly
different fr~~ th?se it h~.s adapted ?ver a h~~.i~~~ere a~ a wh?1~,
~?w ~~~ ~.ssured.
~'iae island's newly~r~~.ni~ed Gr~peent Repaablica~, ~~~?~
c~?atigbae, et S~cl, a beYated waited fr~~nt ~f anfii~~~mu~aist ele~era~,
cans?t th~~~f?~?~ ~ inte~?~~~t~d i~ terms a~pYi~a~l~ tea ~t~~~? We~te~?a~
~e~isphere sa~atflcns. Such a ~,?ve elsewhere iaa a Americas
would be likely ~ presage i~~ediate ~?e~rses fir ~e ~~unis.
~a aclue, where a ~~r~a~unis ~~ already w?n ??~r a a.~?a~ m .
i ~f the i~la~?~ Qtw~ ?f ,~~ie'~ three deletes ~ the ~'rencia
Assembly are ~~. axaeers, as are berth its del~.tes t~ the French
~~~acil)~ if i~ sera effip~ ~~~~~~.
?~~~ ~artini~ue ~?~anu~is~ ~~ f~ll?wed ~ clasffii~al
~.~st ~~??gad~. pa~ea. ~t b~ddi~~ f?r ~ sup~a~?# ?f tpae i~n~
~verished Ne~r?~~?rity ~f the islands ~~alatic~n, they ha?e firmed
~.~en~~u upmmn ,tla~ rich whites as ~~ direct cause ~f ~ ~e~r~ ~ ~~? a
~?~ic alas; fey eve pr?fsed ~ l~e~?es ~ siu~ ~f the lame
l~.ndae~s,-and fey have identified the ~~~ffist Party wig ~
s~?ule f?r r~.~ial eaYi~, istf t~~.t "f?r a Ate t~ ~~ at
the f;?~xan~unist Party i~ t? ~~ a.inst laielf.'' ?~hey have ~~
s.Yful use ?f "e~sidence' a ~f a alleged rcii~ati?~ mf US Y~3e~re~s,
~f US ly~c sta~sti~s, egad,?f the supposed activities ~' the ~u .
Klan; and they ha?e da?iven h?uae the theme tint the "~ag~i.l~st~?~i~
Hated". US ~vern~ent Ynust, if fir n~ Bather ~eas~n a because ~f
racfal. ~resi?aas withina its fr?ntie~s, act as ttae natal enemy ?f
s?cial pa?ess and dean~cracy, and thus as the natuaral enemy ?f the,
USSR. ~'he New?esy cana~alete ids?ran~e ?f the ~~liti~al, e~?~i?~a~e
and social eharac~r ?f the S??iet Uni?aa has these been ties Ceananau~
Baas' ~.aj?~ aYly.
~iae artini~ue ~~~~unists? enapi~sis upon aan el~~arian
redistributi?n ?f wealth at fie' sense ?f tie whites is sharply at
variasace with ties ~?llab~ratf~~aast appr?ach ~hhe C?ffinaunist~ have
adapted in a repaabYics ?f Latin Affie~?fca. were they have made
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no use of theffiaes c~ance~ed with social revolution but have based
t~efr apgseal ra$her on a va~ae concept o$ "democracy" and upon
e~pp~~sitfo~a to ~i3S a`i~peris.lisffi."
The ~on~naunis4sD success 1Viartfuf?lue is attributable to:
(l.) the frame use of racial conflict in thef~? propaganda; (Z) the early
de~oralf~atio~! and continued disunity of the island s ~,ntf-Coin$nc~-
nists; and ~~) the fact that the island fs represented in a legislative
iaranch of the &'rene~a C~overnrnent, which means teat any strength
the fwo~x~a~~u:is pick up fn lb~artiniq~ue can ~.ake itself felt in the
dit~Tsiox~ lobbies in Paris.
`There is no reasoa~ to believe that spznilar ~ontnzunist tac-
tYcs will not ~,ay large di~tidends in Other racfalYy-div$ded ~Caribbeaa
areas, loch as the ~3ritish ?Yest Indies and the republic of Panama
where ~r4tish ff~est median workers. and weir descendants are a
substa~at~al a~i~nority of the p?pulation).
Although ~llartinique under ~ounist ~ox~trol w~1.11 naturally
be hostile to the US and will pose special l;roble~s %n this con~n+ection
because it ias a European dependency, it fs unlikely to cause naa~or
dif~.culties so long as the French colonial office for other controlling
agency) is relatively free of Gosnnzunist domination. but if the Corn-
~~~.nists were t? comae to power ira,Erance, .rtiniq~xe would as a
m~.tter of c~aurse become a potential base not o~all~ for the sg~read of
~oxnnaunissn in the f;arfbbean but also, because of ifs official channels
of eo2~~iuni~ation with. an frx~por~~at Co~~uraist power in Eurr~pe, for
batelligence and espionage activities directed agafatst the entire
laemis :here.
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~'~'~`~OF~.a~~'t'~ P~ESS~J~,E ~R.~~~~
Exporter ai~dda~~r~a~i~t pre~~ure i~ apparenp f~rc the
~$ a~ilian ~e~-~ent tm ~.hand~n its relent Kati?~x~ ffnancial ~zic~
fi~ favor ?f ~xpan~i~ni~t ~e~,~ure~ t~;~t ffiap accenYu~te present in~
flaticanar~ treads, sharpy ret~.rd the devel?p~ent ?f a amass market
f?~ ~JS ~~ds, and disc~ara~e fure~A 3~S investnar~n~.
Such decent event ~r~,~il as a marked decligae i~a experts,
~. ~~?e~.t~r nu~~.~~er ~f har~gtcies, ~ sharp fall ~?l~e ?f ea1e~,
and ~.~ alar~in~ ~~~~h sh~rt~lived ham , have heez~ interpreted
h~ ~.~~ i~efa~k~nxed ~~servers ~.~ indicat~,c~ns that ec?n~na~.c re ~ ,
~e~~ia~~ ~.~ ~~rnine~,t. ~?he exp?~rter ~~.ndustrialist ~r?~~~ ~?ntend
th~.t ~~ i~it?~~ p~lic~s i~c~~d~~ synch ~e~.~~?ee ~~ credit exd
pa~~ia~r~ and excF,n~e ?~epm eciati~r~, w~.:~l prement the recession.
~epreciati.~n, th~~ sad, will help ~ra~il t? ffieet the ~~?w ~?xnpetl
titl?~ t~~e weld market ~.nd close the ;map he~ees~ exerts aa~d
a~.r~ts, while relaxatia~n ~f credit c?~tr~ls will he~.p entrr~pre~ea~rs
t? .in.~ the hi~h~p~??fit ~ar~has which ~?derlay the war-tl~e
and nedia~te pa~st~war i~aterl ~~ffi.
`~ ~i~ ~~?erne~nent needs the supp?rt ?f these ~r~ups and
w?u~id, therefore, p~esu~.ahl~ like t? meet their wfshes. At the
sane time, the ~~vernen# i~ clearl3r reluc t ~ depredate the
~~~~~~?, s'ce d~~r~c~~ti?~ w~~l~: ~~~ ~~~~~~ the ~?~~ ?f ~er~c-~
i its f~rel~~ duty Q~) reduce i~ capaciC~ t? iffip?r~ ur~en~pm
needed g~hli~ w~rkw~ e~~aip~e~tt~ and Q~) ~ interpreted b~ p~atentfal
f~rei~~ ia~~e~t~r~ as evidence ?f ~c~~n?mmaie ~stahi~.ft~. O~, the ?ther
hand, ~~~.~il cast e~.sily e.sad credit furer with~axt deprec%at~
,~ the cra~~eir?, ~i~eeget~,ri,~e i~ g~~?ieeg~,yat eredgit e~~.~si~n w?~lgd~
~~d t? ~~??d~$~P. w~~~d,. ~fi4 k.b6~ e~.S~w~~~~.e ~S lke~yl'~~.'~~~8?~, ~~.~~~.?e ~~?~3s~
and furth~:r ip~.ir the ca~~r.~etry's exchae p?~iti~~. C?nt~eenatly,
the ~ve~ent appears ~ have made an eff?rt t? find s~sbstitutes
f?r a tw? e~.~~~?e~ a~r~ed ~~ the e~?rtea~ ~ir~d~~i~ciist ~ra~p~
fir er~ple,, the 4~?Ia tariff increase it .s sp~~~s~red at the ~?
~~nference i~ ~enee~~. Q~uch an h~cre~,se would tend t? reduce !ffi~
p?~ and, h~ f~rcin~ prices up, aid a indtastrial%~~), a~td the
pr~p~asal tc~ finance a coffee crop up t~ 7~?d~ ?f i~ current ffiarket
~~~~~~~ ~~ aid ~? the ~~~~~~.~ ~~?~~~~.
~14_
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`~T~aile these sF~hsti~~te measures may sons depre~;iati~on
f?~ a ~a~e, pressure f?~ depre~;ia~on wf11 pr~ahahly continue because
e haflatioa~ wili paal~. ~ra~iliaaa prices furthier out of line said praise
cosh of p~?od~ctiona Since ~ra~il is aaot yet an active aaze~~a? of
the ~Steraaat~.o~al R2oaaa~ta'-y ~'aaazd aaad is eref?re free to carte
dev~.I~aatiaan to easy leaa~fhv gt sees fit, any devaluation it ffiight decree
wo~.ld be re,rded by as?n-~razi~.iaaas as only a first step and w?aald
the~?ef~sre ~?ntribute t? the uan~ertainty ~.n~ instabilitg of the eco?
aso~ic situation i~; Zrati~ ~.naerflca as a whole. moreover, rthe re-
s~al~.nt lack ?f c?nfidr~nce in ~ra~il's ia~a~ediate future would tend
t? reduce n iaave: i:~en f~?ogn the f7S {aAtiuou~h e~istiaa~ tTS fn~
~est~en in ~r~~il ani~ht beaaefit initially frown ti-e continued high
pa?ofi~~. Aiwa, any move toward inflatioan seed devaleaation, con-
. siderr~d iaa tae Conte aaf a ~~?~.~i~.iaaa Govea?xaa~ent's deanonstrated
iazcapacity to deal effec~vely with ate fiscal prbkale~s, suests the
ia~z~intn.ce of a "hooa~ and bust$p cycle, at the end of which ~ra~il
. can be coua~ted ?n, pleads a threat ?f ~. ~rowin~ ~oal7aniaa~aist
~o~re~eazt, to tta to the ITS f?r l~.r~e-seals finaaaeial assi~stamoe.
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C42d`~1~Yd~S
Pages
~I~EP3I)S ~T ~R,~ F.. a ........................... i - iv
Thre~ened C?~lae Qf lf~~a~r .................... 9.
IoTew G~ee~s C?nnnffi~gafs~ P~~ o~ Ackaa~a ............... ~
Pc~ssilbAe Changes h~ Saese ~?aee~?~ffien~ o ........... ~
6i
SI7PPI~R~f~1'~~'
A~t~litasg anc~ P?liti~a~ Char ~~ C~~naand
~ C?~n~safst~i-Y'ee~e ....................... ~
.Document No? ~ ~
Date:
FO CHANGE In Class. ^
DECLASSIFIED
Class. CiiA~G~D T04 Arrs77 S
DDA Memo,
,4 v
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TOP SECRE'1f
TRE~Y~S IN 3l3I3,IE ~
GEPEE~ L
The threate~aed colla~ase of Iranian Airways ar-ay eliminate
YIS garticilration in air transport in Iran. and precipitate a struggle
for garticigation by other Bowers (see page A).
Gro~~ as re~.rks on 1.4 A,u~tast in the Securit~Council,
iaa reply to the YJS warning that abuse of the veto inay lead to YIl3
action in Greece througFe recommendatioa~s of the General Asseffibly,
indicate that the YTSi~Yt anticipates possible withdrawal from YTI~ tapon
finding the veto nullified by anajorityrsale in the General Assembly.
action coucer~ain~,so~erei~. -ties iu the t~tarctic may be
u~idert~era by the YTS before the begiaaning of the fforthcoming Ant-
arctic stager season. The ~ fe~~.s that continued inactio~a in the
face of Chilean and Argentine "intrusi~s9a into ~ territorial areas
xnay weaken the British positiota, and $t is intended therefore to re-
? assert T7K soverei~aty over its legally-established possessions.
lEventually, however, the issue of sovereignty in the Aaatar~tic will
grobably be broa~ght before the YJ~ or the International Court.
~ESTERA7 EY3R~3PE
The YTS Government's ~alans to deal with tae current_aa~cial
situation have evoked disappointment, but gold action in carrying out
#hese playas c~nld relieve the crisis. It remains to be seen whether
the Cabinet will have the political fortitude to act with necessary
rtathlessness. The Governa~aent now has mmearly ten weeks ~ which
to tatadertake remedial meastares before Coxnaxaons reconvenes. YJnless
the situation is clearly improved (either by igtternal aneasure~ or by
' assts#ag?ce from the YTS) withfa~ that time; grave political developments
are likely. The Coaaseryative-'Liberal opposition will return with re-
newed vigor; the influence of Labor's Reft wing may increase. Either
motantigag ptablic dissa#isfactioaa or left-right disintegration within
the Labo$ Party cagy precipitate a, general election.
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'~ OP SEGRET
`~`h~ositiaas of the anti~Couaffisnaist Socialists in ital~ has
bed holstered by the recent s~ecess of the L~agdo ~f fission to
~'ashing$on in pxoc~~ria~g a billion dokt~s in cancelled debts and
liquid assets. Lo~bardo's new pre~ti~e naay ~~e it possi~ale fog
hi~xa to carx~ out his plan for con~ini~~; the moderate. Socialists
into a strasng ~.ntipCommauaist force. ~s Fren~ier De Caspexi saaai
a~ight-~wit~g Soci~.ist le~.ders hn~e ~.rescly approved the eve~at
lbxoadeni~?g of the present cabinet to include aa4ti~Co~-inunist
b~ftists, Los~nk~ard?'s new i.uenee ~.y en~le ~e Casp~eri to hx-
clude such Socialists ~ the cabinet and thus counter +~'omanunist
chaxg~s that the present Cowern~aent laci~s ~?rking~cisss reg~xe~
sentation.
' axe ous indices#ions of the semi-secret resuBn tio~x of
Spa~aish~JFrench trade see 'P~ee~y Su~nans.ry of g Ault, page ~~
sr~em to lfse coa~fixrtsed by a regent guarded statement by drench
~'?reign llliiaaister ~ida~.t iaeffoxe the ~isse~ly C?~nmittee ~`or-~
sign Affair, oVhile declaring that there would be no change iaa the
general poiicy of ~'xance toward 3~a3~ under Franco, ~id~.ult said
that he wished to correct cea~ain `anora;alies" resulting from the
c2oseci kaorder between tiie two ce~nntries. ?The caution wish which
the ~sench Co~ernffient is ~.ppro~.ching this maker sprhegs fro~a
fear of fleftist criticisffi of any reiati~s w'ath id r~nco. .
~tet~v ~alaats of action b~ the Creep Coa~aana~ists probably
i~tcle~de the establishgnent off a `free eek go~ere~txent f~a the
near future at~d further ~nilit~.xy action in noa~thern Ca~eece (see
page' ~~ ~ ..
Freedom of the rasa in itumanf~. has disc axed com letel
under the Coananunist~controB.led Cso~. Co~ea?nane~-t. With the sus
pension in early j~aly og the politically indelaendea~t jCTit.N'ALI3~ I3E
~E,A,?T'.A and of LitEP"TA~A, the official organ of the National
l= easant Marty, go~ernnaea~tal contgol of the press is final.. ~ the
tw~nty.,ot~e dailies re~.ining in Rua~~ia, only three make any
pretense of independence, tw? following the. Com~araunist~ line and the
third o?feriug no resistance whate?er at pa~esent.
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'1 OP SECRET
PT~AI't, EAS~d`-AFI~CA
R.uffiors of ipcreased Soviet trooa~ concentrations on fran's
northwest border remain cuaconfirrned. Sircailar ru~xnors circulated
early ~ Jane were not substantiated by air reconnaissance conducted
by the US military Air Attache Te~araxa.
The fndia~ ,press has sever r*,~critici~eci the tTS for flailing
to take a strong stand against Butch actions in Ind?nesia a~td voices
the suspicion that the LTS is at heart iffipsrialistic and. sympathetic
to the contisnued suhjugatioaa of Asia by the white races. ~y contrast9
the attitude of the US~kt has been given wide praise. Such coffinaent
implies that unless positive steps are taken to assusre co~rnplete self-
determflnation ~ Asia, US prestige in Yndia ffiay continue to decline
and pro-Soviet sentiment to increase:
FAl3, BAST
The increasing vreak?ess of the Sia~nes~ Uhaxnrong ~overn-
ffieot in the face off a possible coup by dissident'-Army elements ffiay
? result ir~t the displasci~eg of Premier T,9ha~nrong in axt effort to re-
ianforce the present coalition {see page 3~.
The decision of the Securit~Council to ~errnit particit~atfoaa
by ~donesia in the discussion of the butch-Yndonesian Repgablic
case n~aarks a growing tendency to make the United Nations a foruan
in ~vhi~h c?lanial peoples xnay express their desire for independence.
The l7&~, France, and ~elgiuffi {the three colonial empires represea~ted
on the S~) opposed gndonesian participation because they perceived
in the request another ananifestation of colonial insurgence. The
majority aneffibers of the SC overruled the legal objection that Indo-
nesia had no$ attained statehood and took the vier that the lainggadjati
Agreeffient has established the Republic as a de facto governmeaat.
This practical recognition of Indonesia as a nascent state will probably
give new impetus to the de-ds of ?ther colonial peoples, such as
the Arabs of y?rench North A?r$ca, the ~Tieth~amese, and the Sudanese.
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TOY SECKE'1'
WESTERRT HEMISPIiERE
Rapid depletion of Iceland's foreign exchan~e r_eser__ves,
accelerated by the present poor herring season, is causing marked
deterioration in Iceland's economy and may lead to an economic
and political carisis early this fall. Continued depletion of the for-
eign exchangw may lead to the fall of the present Government and
its subsequent replacement by a coalition government including
the Communists. who withdrew from the Government when the US-
Icelandic Airport Agreeffient was negotiated in October 1946,
Latest re its from Asuncion indicate no radical change
in the indecisive military situat ono recent ys. a Govern-
ment's General Staff, which says it is about to launch a counter-
attack, is markedly more optimistic than it was a week ago ~ the
grounds that: (1) morale of its troops has taken a turn for the
better; and (2) forces proceeding from the north against Asuncion
(after being by-passed by the rebels in their down-river movement)
will tip the scale in the Government's favor. The situation within
Asuncion has nevertheless become steadily more difficult. Business
is at a standstill, and a week has passed without commercial air
traffic, the immediate resumption of which ~is unlikely. The regular
river boats, upon which Asuncion depends for the bulk of its supplies,
are halting at a point ten miles below the city. Butter, milk, and
bread have disappeared from Asuncion's markets, and present
supplies of meat and vegetables will last only a few days.
Ecuador has made re resentations,to the Peruviaaza Govern-
ment concerning an alleged suurprise~"attack" by Peruvian soldiers
at a point on the Peru-Ecuador border. At the same time, it has
put officers with special instructions from the Ministry of Defense
in command of its two southern border battalions. Peru has charged
Ecuador with responsibility for the incident.
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'I OF SECRET'
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TOY SECRET
TAREATEI~TED COLLAPSE OF R3.AI~IAIR
The imminent collapse of Iranian Airways (Iranair) may
eliminate US interests in Iranian air transport activities and pre-
cipitate astruggle -for participation by other foreign interests in
these activities. The financial position of the :airline could, how-
ever, be stabilized through decisive action by the Iranian
Government. The Department of State has recently instructed
Ambassador Allen to urge the Iranian Government to assume
control and refinance Iranair.
US interests in Iranian Airways are represented by TWA,
which owns 10% of Iranair stock and has operated the line under
a management contract.. -TWA has been encountering severe dif-
ficulties in collecting its overdue management charges and is
continuing to insist on payment. This problem, added to TWA's
other financial difficulties, has brought the company to the verge
of withdrawal from Iran.
British Overseas Airways Corporation (BOAC), which may
be attempting to exploit TWA's difficulties with management con-
tracts in several other I+lear Eastern countries, has proposed a
merger of Iranair with aBritish-promoted local Iranian airline.
This latter- company, hitherto inoperative, has an Iranian license
and would use British aircraft under BOAC management and
technical control. Such a merger ~arould be favorable to the ex-
isting British commercial air establishment in the.I~tear East and
would provide feeder traffic for British international air services.
Iran cannot operate an airline satisfactorily without foreign
assistance and prefers US aid to that of any other nation. It is
possible therefore that the Government will undertake to effect the
reorganization necessary to insure the continuation of US technical
support. Only if US support is withdrawn entirely is Iran likely to
consider some form of British support. The collapse of air trans-
port operations fn Iran would be interpreted by the USSR as a
weakening of US-UK influence in Iran and as a favorable opportuni-
ty to renew its offers of a joint Soviet-Iran airline. It is doubtful,
however, in view of the present stiffening of Iran's attitude toward
the USSR, that Soviet participation- in Iranian air transport will
materialize soon, even though all other alternatives fail.
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"1'OP Sh,CRE'I'
1~dR4~' GRE~~ C(~MMUPTLST PLAN GF ACTId.~l~t
]Despite the apparent stalemate in Greek hostilities
following the Soviet veto in the Security Council, it is i~lieved
that the recent .conferences among the lSalkan Satellite States
harts produced a new plan of action against Greece. Redispo~
sition of troops north of the Greek border has been reported; the
Greek Communists have quickly reorganized after the disruption
caused by the Gover~ament's mass arrests; and the guerrillas
have utilized the period following the end of the Army drives to
regroup their forces.
Tune is no longer on the side of the Communists in Greece,
and it is probable that they ~iB act to establish a "free" Greek
government within the newt two months. Such a government would
in fact be controlled by the -USSR through Greek Communists.
Moreover, Greek ComYnunists have probably agreed that, should
they gain military co~atrol of ~aorthern Greece, they will cede
A egeaan Macedonia to the present People's Republic of Macedonia
(a federated state within Jugoslavia) .
For a conjectural chart of the military
and political chain of command from the
USS12 to the guerrillas in Greece, see
Supgalement.
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'.!'OP SECRET
P4S3ISf.E CHANGES II~t SYAMESE GO'iTERNMENT
A long-standing contest for power in the 3famese Governmennt
between the two-party government coalition led by Siamese Elder
Statesman 1?rfdi and the opposirion civilian and military elements
has recentlp been intensified. Reports indicate the possibility of a
Cabinet shakeup on one hand and a revolt by dissatisfied junior Army
officers on the other.
The present Government led by Dhamrong has been kept in
poorer for nearly a year largely through the strength of Pridi's
following, most of which is organized in the Free Thai movement.
This group was the pro Ally Siamese underground led by Pridi
during the recent war.. The friendship be9~ween Pridi and General
Adul, Commander in Chief of the Siamese Army and second to Pridi
in the leadership of the Free Thai Movement, has hitherto assured
the Dhamrong Government of support by the majority of the Army.
The civilian parliamentary opposition has criticized the
Government for inefficiency, for corruption, and for a monopoly of
power in the interests of the Free Thai movement. The opposition
has thus far been unable to oust Dhamrong through debates in Parlia-
ment. However, dissident junior Army officers, dissatisfied with
the high Bost of living.which they attribute to an incompetent civilian
government,' have made plans for a bloodless coup d'etat, reportedly
scheduled for sate in August. A similar coup was averted in mid-
July by General Adul. ~'Vhen Adel learned of the plat, he warned
Pridi and government leaders of the intended revolt and urged re-
forms to forestall. it.
Since this warning, no basic changes have been made by the
Dhamrong Government to relieve the dissatisfaction of opposition
elements. Efforts ha~+e been made to reinforce the position of the
Government by appointing reliable members of the Free Thai move-
ment to such key posts as the Directorate of Police. Such steps
have only added to opposition charges of Free Thai monopoly of
the Government. Additional impetus may be given ~ the plans of
the nationalistic Army elements when they learn of the Government's
failure to regain any of the disputed border territories retroceded
to France late in 1946.
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.TOP SECRET'
Because the opposition has associated Pre~nfer Dh~,~ong
with most of the f~Iures pf ~-is Governffient, ~ridf aua~ soon plate
mineral Add fYa the preanfershfp. As preffifer, Adse~l can lie expected
to institute sef?rn~s desired $o ~aollf~~ the opposition, partfcularll-
that ?~ ~ca3litary circles. Adel ffiay Sher utali~e his .influence ~
the Arffig~ arad an police organf~ations to strengthen the political
p?sitions off ~S?idf, the Free Thai mo~reffient, a,nd the ernment
coalition. .
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~~TF~~E~~?~d~
O
O
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MOSCOW
POLITBURO
~~~~~~~
BALKAN
CONFEDERATION
=~DIMITROFF, CHAIRMAN I
~~~~~~~
GENERAL STAFF
GEN. POPOVICH
ALBANIA
SUPPLY, EVAG,
ETD.
~~~~~~~~
r~ ~1
INTERNATIONAL DEMOCRATIC
BRIGADES ARMY
"(;FNFRAI" MARI[!1C
NOF
SLAV-MACEDONIAN
UNITS
BITOLJ
GEN DAPCHEVICH
PARTISAN OPNS
ELAS
ELAN
(ARMY 9 NAVY)
~ ~ ~
BULGARIA SKOPLJE r FLORINA (?) (
SUPPLY, EVAC., CONFED. PEOPLE'S ( FREE GREEK ~
ETC. REPUB. OF MACEDONIA ( GOVERNMENT
OPLA
TERRORIST-
URBAN SABOTAGE
EP
CIVIL GUARD
ADVISORY COUNCIL
MEMB KKE CENT GOMM,
REPRESENT EAM FRONT
ERGAS
LABOR
D NON-GREEK PERSONNEL
(~ GREEK PERSONNEL
~~~~ EXISTENCE CONJECTURAL
ENLIGHTEN-
MENT
ATHENS
PARA-LEGAL CENTRAL
COMMITTEE
KKE
POLITBURO
KKE CENTRAL
COMMITTEE
POLITICAL
COMMISSAR
EA
WELFARE
B RELIEF
EPON
YOUTH
SPECIAL
ANTI-US
DEUXIEME BURE4U
SPECIAL
ANTI- US AID
LABOR STRIKES
COMMITTEE
FOR THE
DODECANESE
COMMITTEE
FOR THE LIBERATION
OF CYPRUS
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DEUXIEME
BUREAU
KOSSA
INFILTRATWN
OF ARMY
WOMEN'S
AUXILIARY
FOREIGN OFFICE
MACEDONIAN AFFAIRS
OSNOM
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'r
CoxTENTs
Fages
TRENDS IN BRIEF ... ........................ > . , i -ifs.
ARTICLES ...... ...........................~..1-13
Czechoslovak Cooperation with the U8 in Air Transport , ...1
Arab Reaction to Possible Palestine Regime ...........2
New Burmese Communist Activity .... ? ? ? ? ? ? ? ? ? ? ? ? ? ?Z
French-Vietnam Political lOliianeuvers ............ ; ...8
_ Outlool~ #or Private Foreign Capital in China ....... ? ? ? ?9
Issues Before Rio Conference .. ................. 19
Communist Support of Brazilian Constitution ........._ . 13
DQG
Id0 CHARGE in Class. ~
DECLASSIFIED
Class. CHANGED T0: TS S Q
DDA Memo, 4 Apr 77
Auth: DDA RAG. 77 1763
Date: By: V L
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TRENDS IN BRIEF
GENERAL
Czechoslovak cooperation with the US on air matters con-
tinues despite Czechoslovakia s political subservience to the USSR
(see page 1).
Current Soviet propanda directed against the Marshall
proposals for European economic recovery emphasizes the "im-
pending economic cY~isis in the USA," the need of the US for ex-
panded foreign markets, and the serious rebuff to US political
ara~bitions caused by non participation of Eastern Europe in a
Wester bloc. Specifically, according to the Soviets, the Marshall
proposals are designed to: (1j form a Western bloc directed
"exclusively against the Soviet Union"; (2) make Germany--ex-
cep# the Soviet Zone --a "military base for American imperialism
? in the heart of Europe"; and (~) rearove the Eastern European
satellite states from the influence of Soviet foreign policy.
WESTERN EUROPE
The drastic retre~ ent and controls announced by_the YJK
in order to conserve its remaining dollar resources and to increase
its production far export can, at the mast, only delay the exhaustion
of UK hard-czrrency reserves. Together with other measures,
these nem steps should alleviate the immediate financial crisis, but
they will not make the UK solvent. These drastic measures post-
pone indefinitely the restoration of pre arar standards of living in
the UK. It is possible that British public resentment of this post-
ponement will find expression in some anti US sentiment which will
hamper a US-UK partnership in international affairs, particularly
vis-aavis the USSR.
The severity of the food situa,tio~n in France, increased by
the effect of this summer s drought upon the fall harvest, will force
the French Government either to reduce further the bread ration or
to deplete the dwindling gold reserves of the Bank of France through
the purchase of food imports. If the present drought continues, the
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'fOP SECRET
importarion of all basic foods mint increase on an unprecedented
scale, but payment for these imports with Bank of France reserves
would probably destroy all public confidence in the franc. These
considerations would appear to make necessary interim aid for '
France pending the full development of the European recovery pro-
gram.
Further arrests of dissident Portuguese Army and Navy
officers are reported imminent. Despite the resentment within milf -
fary circles oeer previous arrests of prominent officers by civil
police (see weekly Summary of 25 July, page f), Premier Salazar
apparently is still confident that he can take drastic measures to
staxaoip out his opposition without dangerously alienating Army support.
Lfttle public reaction is anricipated..
NEAR EAST-AFRICA
The attitude of the Arab- states will be the most important
factor in determining the success of the regime to be established
in Palestine by the UN. The UN's recommendation will probably
follow one of three basic patterns: (i} a single, independent state;
(2} trusteeship under the UN; and (3) partition into Arab and Jewish
states. The first would be generally acceptable to tY~e Arab states;
the second would probably be acceptable provided it restricted
Jewish immigration; the third would lead to serious instability in
the Near East (including the possibility of an Arab revolt in Pales -
tine) and would, in time, endanger US strategic and commEercial
interests fn the area (see page Z}.
Reports of increased Soviet troop concentrations along the
Iranian border are believed to have been inspired by Iranian Chief
of Staff Razmara in an effort to speed up the delivery of US miliiary
supplies to Iran. It is possible, however, that the Soviets are cone
ducting troop movements in the area for the purpose of intimidating
the Iranian Parliament into ratifying the oil proposals. There is
no convincing evidence that the USSR is contemplating direct military
action against Iran.
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FAR EAST
Burmese Communists renew efforts to obtain re resentation
iA the present Government see page ? .
The French will shortly offer peace proposals to Ho Chi Minh
in Indochina (see page 8
Non-discriminarion lust fore investors in Chfna to be
reaffirmed by the Chinese National Government see page 9 ,
Hostilities will continue in Indonesia on a reduced scale with
each side justifying viola.t9vns of the UN cease-fire request of
1 August as "defensive- operations." Conclusive steps toward settle-
ment of the situation will be delayed by the difficulty of agreeing on
the form of third-power action in the dispute. The Dutch may be ex-
pected to continue the formarion of the interim federal government
and the future United States of Indonesia. The Indonesian Republic,
meanwhile, asserts that it is no longer bound by the Lfnggadjari
Agreement and will endeavor to act with greater independence in
its relations with sympathetic nations abroad.
WESTERN HEMISPHERE
The forthco Rio Conference is expected to reaffirm, in
a form intended to be permanent, a principles of inter-American
cooperation laid down in the Act of CI~3apultepec. Because of the
substantial differences among the Republics on key issues, however,
the treaty to be negotiated at the conference is not expected to pro-
vide for procedure other than general "consultarion" or, to impose
specific measures for collective enforcement (see page 10}.
The Brazilian Communists, in actively supporting the
established form of government, may be seeking to keep a nucleus
intact for espionage activities (see page 13). v
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~R~'I~ I.~E S
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~: ~~C~~I~~V~.~ C(~1~E1~TgC~I+I WITH 'T~ tTS tDT AIR TFtAAN3FOI~T
`The I~edlq cooperative attitude of Czechoslovakia toward
frhe West in aar matters is noteworthq in view of its econo~fc and
political subservience to the tTSS~. The C?~anunist-do~fnated
Czechoslovak ~err~ment has peranftted the t3S greater freedom fn
air transport opex~.tions than has anq other ~oropean countrq.
Czech?slova~ milftarq and cf~ril authorities have facilgtated the
rraovement of ?lS aircraft, fre~entlq exercising onlq perfunctorq
co~4rol, and ~~ occasionally perm_ fitted US stews andl pas~sen~gers
to land evert wiout g~asspor4ts and visas.
The USSR r h~.vg deffionstrated its political con~ol of
CzecY~oslo~., apparetatlg~ has no interest in brim pressure to
~tadifq thf3 Czech?slo~a~s present a#r policq. The U~SIt~ anaq eve
welt?ffie ~e opport~itp' to use Czechoslovakia as an air outlet fn
mew of the n?~ble ?ai.Ile of ~e Satellite airlfa~:es to expand thehr
operations wes~;ard. The Czechoslo, ~vho are facadit$onellq
disposed. to b~?idge the gap in Easf~-West interests and ambitious to
Implement the US-~zec2~os1?ra~ aft agreeffient w$th s. Czech $r~.ns-
~tlantfc s@rdice, vrill +~ontixa~ae to f?ster 'iYS good will fn aviation
~a.tte~rs as low as theq are peraxtitt~d bq the t)SS~ to do so.
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ARAF~ FtEl~.f;TIOI~ T'G Pf)SS~L~ PALESTII~ REGIS
Because of the irreconcilable aspirations of 2fonfsts and
Arabs, no regime which the Ulf establishes in Palestine can settle
the pro9~lezn entirely, Any solutio~a adopted will, of necessity, be
a compronxise, which may through gradual evolution and modifica-
tion attain independent strength and relative stability. The most
important factor in deterffiining the success of such an evolution
and the future stability of the bear East will be the attitude of tie
Arab states.
AItl~ough many solutions of f~he Palestine problem have been
suggested, the regime tm be established by the U1~T will probably
follow one of three basis pattet~ns, each of which is capable off many
variations. The basic patterns are: ~1}aside, independent state;
~~) trusteeship under ~e U1~I; o~? (3) partition into Arab said Jewish '
states. Yt fs ps~ssible to indicate fn general terms ?nly the probable
Arab reaction to each of the foregoing possfbilfties and to estimate
e type and extent of retaliator~3r measures which the Arabs Ynight
e in the eetent ?f an unacceptable decision. It i~ certain, however,
that anYv solution which permits substaaztfal Jewish i~mn~lgration would
be viole~atly opposed and would cause an Aa~ab revolt in Palestine.
Yt aright also lead to an economic boycott of the US and the U~ and
to a reorientation of Arab forei.~n policies toward the USSR.
The first possibility--a single, independent state- would be
accep~,ble to all the Arab countries. Arab delegates at the Special
Session of the Ubi General Assembly, Arab statesmen in their parli~--
rncnts and in the councils of the Arab League, and the Arab press
have been unanimous in de~na~ding both termination of the Urftfsh
Mandate aaad atta.Yent of independence. Although the Jews might
be allowed considerable local autonoany, the Arab ma~orfty in the
rational Gover~ament would be in a position to restrict jewash i~mi -
gration and to cc~za~ol foreign policy. The Grand Ntuftf would have
no reason to start aa~ Arab revolt in Palestine; .the only serious
obstacle to cordial relations between tie US and ~ Arab states
w~Id have been removed.
The second ~ssfbil~,ty~--trustteeship under the UI~4 would
probably be acceptable to all the Arab Governments provided the
followiaig conditions were included: ~1) no further Jewish immigra-
tion e~tcept as provided for in an international agreement under which
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xaativns of fife UI~' would accept displaced persons in proportion to
their popa~lations; ~Z) participation by both .A.rabs and 7ews in the
adistration of the country in proportion to their numbers in
~a.lestine; and (3) eventual independence sad incorporation Saito
~e .drab Y~agrue. {Certaiy lra~, and possibly Syria, might at-
tempt to persuade the other states an the Arab ]League to n~airatain
their original demands for fHadependence. but Saudi Arabia,
Uebanon, Egypt, and Traa~sjordan would gladly accept an interna-
tional 'administration and thereby avoid an open brash witia the
western ~'owers< l~or r~:asons of personal ambition, the n~u~ti
ffiight start an. Arab revolt t~ithin Palestbae, but such a revolt
wouiti n?t ob$~in general support unless the UN adm~lnistration be-
trayed apro -Zionist bias
die third possibility--the paa~tition of F'a.lestine into tiro
$ndependent states- woanld lead to serious conseaguences in the
Near East. Although r~aost of the Arab g overnments would be re -
luctant to act ~ opp?sition to a LTI~' decgsion aa~d against ttce wishes
of both the US and the U~, the pressure of n~.tionalist opinion night
f?rce them into an extreme position. An Arab uprising ~ Palestine
would almost certainly ensue and would increase the pressure
againnst moderation.
In the event of partit$on, Syria would give greater support .
to an Arab uprising ~ Palestine than would any off the other Arab
states. .9~lthough the Syriac ~overnraent might shrink from openly
sa~ictioning aid to a Palestine Arabs in op~sitian to a decision
of the UN, it would amoff$cially permit the shipment of arras and
a.unitgon to Palestine and -would not prevent enthcasiast$c Syrians
from joining the lUtu#ti's forces.
Egypt's attitude toward g~.rtition would be similar to that
oaf Syria.. It might reluctantly agree to retaliatory measures against
,e US and the UY~, but, in v$ew of its -past record, would refrain
frc~ffi implementing such measures if tlhey injured Egypt's political
ox conanaerc~.I interests. ~4.t tP~e same time nationalist groups ,
would support 4he I~tufti and would urge the ~vvvernment to tape ea~-
~ereme action iAa the Arab League against the ~Yestern ~owers<
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'l`he ~a~i ~r~vern~.ent dQt~ the past ~~ months has been
une~i~rocal ~ fis de~snd for Palest??~ian in~penc3e~ace. ~'or 4bis
~?eason, alth~~h it t~a~ retreat ~ the e~$ent of re3uctantl~ aceel~t-
~ UN tragsteesp, it would ltardig~ accept partitio~a. Iraag would
insist that the .Arab lJue involge r.liatory measures a~afnst
the US ~.d #be U~. ~ .As 1~oth ~n Saud of Saudi Arabia anal
Presiden$ al alx?i off ~ba3aon hst-e indicated tl~t ~e~ would not
agree to sash ~e~isures, and as I~ Abdullah ~ Tra~s~ordan is
in no passitlo~a to do soy tkae daffier of a seri?us split in the Arab
Lease wQUld be vs~?y real.
Leba~aon would life partitlo~c no better than a~ of the other
.Arab states, but unless a comffion Arab policg of op~sition were
adapted b~+ a .b Lease, it would not ol~lg oppose partitian.
It would urge the Arals 3.,eae probably with tlae lac of Saudi
Arabia) to follow a moder~ste course in regard ~ Pales~ae and to
? a~ce~t the decision of the U14~. As ~e o~aer Arab sates, how-
c~r, a revolt iu t'aleat~e wo3ald result ~ istcr~ed sirnapat~tic
a~ft~.tion in Lebanon a~ad woaald male it all th? ngore difficult for ~e
~ver~nanen# to maintain a a~oder~.te ? positiost.
Yt is dat~a1 whether ding .Ai~da~lla~h of ~ra~)orcian is able
to follow an independent policy ixa rela~on to l~alestine. As he is
subsidised by tiie British ~ae~rnffient, his opi~on csrrie~s lfttle
weight among Arab ~tioa~alists. Although he nxap~ a resound
s~eches at~out the rhts off the I~alesiaxa Arabs, ao substantfal
sa~pport would go to lestiste from ~rans)ordan with~at the sanc~-
tion of the Uxitish?controlled Arab Iae~on.
Saudi Arabia, f'or ties she of rnain~fning the stability of the
wear East, would to persuaele the ffiembers of the Arala Lea~exe
to accept gaartition as. ~ temporary arra~e~n~nt, and Ilea Saud would
do, his best to discou ab Arab revolt in Palestine. lie is con.
winced that l .Abdullah9s plan for ~reate~ Syria is a~aore of a
~.~?eat t? thy: ~e~ ~ri~ of his ldorm d to tT~e siabili~ of the ~e~cr
East than ~i?nism4 and he is fearful lest a Palestine revolt should
develop into a greater Syria crusade.
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It is difficult to gauge accurately to what extent US interests
would ioe affected by 'these possible developments in Palestine,
Certain coa~clusi?ns are, nevertheless, inescapable. If the Ulf reco~rn~
mends and e~~.blishes in Palestine a s~gle, ind~pe~dent state, US
prestige and iue~sce in the Arab world will be extremely high and
US interests will benefit almost fnanaediately. Bilateral air agree-
ar~ents according Fifth Freedoffi privileges to US~ carriers Tong pesad-
ir~g with Iraq, Syria, aa~d Saudi Arabian would probably be rapidly con-
cluded. A decrease ~ xe~aophobia would tniprove the position of US
oil co~.panies i~a. the Arab states, whose governynents, freed frown
the pressure of local hostility toward- what are now considered pro4
Monist A~xiericans, would mot feel constrained to drive such hard
bargains. US advisers, teachers, and technical experts would be em-
ployed in increased ~a~?mbers; anal tl~e greater stability in the entire
area would increase flee possibility of the Arabs' carrying through,
togetl'~er with the US and the U~, long delayed and urgently needed
? econo~raic develop cent projects. greater economic development
and increased political ~.turity would strengthen iz~nffieasurably
the Ara3a world as a bulwark against Soviet expansion.. Such a develops
naent, however, caauiofi materialize without the aid of the tNestern
Powers ~:nd, particularly, of the US9 and the Arabs will not accept
aid from countries That are coanmitted to a Zionist policy. Conse-~
quently, apro-Zionist US, policy would make it all the wore difficult
to build flee Arab states auto a bastion. against the USSR..
the i~ramaediate effects on 'CTS interests of a Ulv decision un~
favorable to She Arabs would not be particularly serious. Occasional
attacks on US nationals, haphazard destruction of parts of the pipe 4
Tines, and vilification of the US by press and public might result, but
it is very doubtful whether any concessions would be cancelled or an
efficient bogcott on i~-ports from the US would be establisheda Several
?f the grab states, Traq particularly, would probably urge these mess
ores in conformity with tl~e decfsions of the 1946 Blue Conference,
but lack of unanimity on the part of the .Arab league ffiengbers and
their failure to implement the resoluti?ns whole -heartedly, in opposi
Lion tcs commercial interests, would render the whole caffipaign
inraocupus.
In time, however, apro-Zionist development in Palestine
would serio~isly endanger US strategic and comnnereial interests.
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'~~e ~e~tes~ da.~~e~ t~ eye i~ie~?e~f~ fs f~ili~ ~ ~fi-e ~~~ ~o~Fd,
a?~~ ~~bili~ i~ i~apii~i~ ~ aop se~lemEea~$ of the P~,estine pro3ale~
wT~ich faii~ f? a act?~~ of A~~.~ de.~. '~'~e ffiore ~favox~lble
e ~e1~e~nen~ fr?~ a ~~~~ ~ of ~tiew, ate ~e~.fe~ a eat
mil den Rear?1i i~ ~ei~e, ~~i~3r i~ a ~4- I~ae, mad ~~
~~e~ed ~eno~~obi~. wou3~ Tae s~~~~~e ?f i~i~ e~~~t. C?r~nist
ae~,~~~+y ~tro~d crease ~d,~ i~9 So~ei ia>~.ttenee. ~~ae i~fl~ae~,ee
~ presii~e of iT~e ~es~ea?aa ~~~ers wot~Id ~ecre~e Pro~so~io~afeYy.
~Fes~r~ ecoaao~ ~d ~~~ ~~resfs ~touid be se~io~siy tea-
~.rec~, ~d ire ~i?~is~ wo~id iae ~o be4~er o~ ~ i~eyr nom ~e
i~ ~oi~d, l~e~~~, ~.~ a ~l~ai.aee ?f'he ~~.estiaae issue i~ cable
of ~~ $he ~evelog~ent of ire ~r~.~ ~orl~i fr?a~n oa~e of e~i~atfo~
i~ coo~x~.~kon ~tri&~ tie es~g ~ ore of re~ola$ian nth, the st~ppor~
of ire ~TSSI~. ,
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~~~J ~iFRSE ~Cl2~MflIS`~ ~9.CZ'IX
k'oflflo~~g a period ?f ~?eflati?e acti~tq, Rur~ese Co~-
~n~-ists I~qe pursued a a~e~ p~?opaganda policy since the assas-
s~aations of Anti!Fascist Leese Headers o~n 19 j~nfly. `g`h~ ~o~-
~~ists seek to place respons3~iflity fox the assassinations upon
conservata~e ~urnzese g~~oups in fleag~e ~-ith the British ~d are
e~.deavoring to h~tiflfld. up antf-foreign se~atin~aent throughout ~urrna.
in an effort to tape ad~aatage of the politica3 ine~p~eriea~ce
?f a new fl~eag~e leaders ~ etain pa~?ticipatioFa is the Go?ern-
~ent ?f ~~ara~aa, Coffiunist flahor o~rganisati~s bee's offered se~p-
port to the aaev~ anti-~"ascist ~es.~eae Premier, T'hakin ~u. the
league is not likeiy ~.t present to pe~?nait ~e ada~nission of ~o~~
~unists to ttge ?ernnzent ian mew of the laeaga~e's contina~ed cea~aw
trot of i91 seats oat of the t?tafl of 2l.? in the ~o~astittaent ~issea~abflg.
Yf ~'hakin ;~Tu's fle~.dersiaip pr?~es adequate, however; to cope with
the pro~~.e~s of i~adepe~ade~ce, moderate i~hite 'flag ~offia~u~aists
may he readanitted to the ~owern~ent ~#hey ~~re e~elled froYn the
~?vernffient and. the fl~ea~e ~ ?ct~er 194&~ in order to deprive
the amore radicafl Red flag ~o~~aunists of poflitic~fl aanffianaition
against the ~~ti-~?ascist ~eagae's ad~haistra~kio~.
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FREI~CR-'6~ETN'AM P~3ZsITIC1~I, M.A-1~EEtJVERS
.Peace proposals will be ~reseaated shortly to ~Io Chi Minh,
President of the viet~.ffi Republic, bq the French high CoanaYais-
sioaner far Indochina, Emile Rollaert. The proposals will probably
neat be accepted, because the terms will include continuation of
French nrontrol over t~getr~aa~ foreign affairs and redaction, or
even disbanding, of the Vietasaan A,rsny.
~ the proposals are reBected, the French snag attempt to
procure the re-entry of Raa Dai, forffier Emperor of Annaan, into
Indochinese politics. As head of aFrench-sponsored provisional
coalstitutional anonarchy, based open the Annaanite I~MT and the
local Catholic parties, the e~c-Empexor would then be in a position
to aaegatiate wi~a Ro Chi Miaah. This araaneuver can be expected to
fail because Rao Doi. can probably neither anuster sufficient popu-
lar backing n?r treat successfully with Ra's administrations. ~'he
`E~ietnassa leaders consider Rea Dal both a traitor and a French
ptappet, similar to President ~Ioach of the provisional go?ernaaaent
of Coa~hias China. Furtiaergnare, fn an effort to forestall this ma-
neasver~ Ro Chi Minh will try to ~anvince the French that the
recent ~'ietnana cabinaet reshuffle has resulted in a snore moderate
gover~arnent with which the French away negotiate directly. .
Regardless of these plans, the autcoane of negotiations .in
Indochina, will be conditioned by the action of the Security Council
and the egfectiveness of third-power intervention in the lDutch-~
Indonesian situation. If the final decision fivers the Republic,
~ietatana will be strengthened snarally and will becoane snare stub-~
laornly opposed to Frasace. Conversely, of the decision favors the
Deitch, the French array be encouraged to resume milii~~r operations
when the rainy sasses ends in late September.
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OT3~?L4~}~ g'Oflt ~~I'~AT~ ~OREflGfl~' C~.P~AL ~ C~YI~t~-
the ~biazese ~fationafl G?vc~rnffient bass prepared estate=
went tP~t affirms a Foi.fcq of na~n-discriffiina~on against foreign
interest ih Ghina and invAtes tSS invest~nent~ ~ afll t=~nese
i~d~str~- nc~t reserved e~c~fleasi?eflg~ for ~k~nes? capital. ~'orei~n
i~v?stors ~na~, f~rt~er~ore, ~a~.rtioipate fn certain enterprises
under ~overn~ent nxonopofl~ (snob as ixnportast raiflwaps, arses,
essen,fl ffiiaes, and h~dr?-elec~io pflants~. 1~einitce of profits
out of China b~ forei enterprises, whl,le perffiitted in principle,
wiflfl be restricted in practice dt~~ng fife "pres~~at period" of foreign
e~ohange controfl.
IE?'or~ig~ investors will un?itedl$ weigh this statement,
wbicia is similar to ?thers issa~ed in the pasg, agai~t: ~3} tradition-
al Chinese axtipathg toward fo~?eign basbaess atad foreign investors,
{2~ obvious ev~,dence og disoriffiinatioan, in the e~ecudtion of foreig~a
exchange regxaflattores, made controls, and alflocation cf geaterials,
? ~ faivor of e~at~rgrises coniroll~l by tBae Govern~aen# and bP ir~flu-
enfl Chinese; a?~dl ~3~ iFae prospect of a long eaaaergenc~ period of
~oono~ic and fina~noi~l i~tabilit~. Private foreign ~.piira.l is tin
rely, ttaereffore, to act fmnaeediatelp ova tae Nationafl Goveraarnent's
"fnvitati?~." his ffaes~ta~cion wilfl pr~ably continue even after any
r~~tension of tJ~ Goverza~ent credYts to China,
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f~S,~S ~FOR~ BYO ~~~'R~~~E
math the i~ ~ere~ce l~ ~. meek dfst~t, the differences
a~c~an~ a .~~eric~:~ ~~e~~~bAflcs ~~ ~e~ issues are sttl s~bst~ti~.l
d arc elf t~ ~e reswkved ~gi?~ t? ~h~ 15 Ault date ~f
as~e~z~l~.
the ~ ~~er~c 3~'~i, i~ duly g9~?, sub~ittc~d t? the
~.~eric~ Rebli~:s rive q~nestis s~ Pr?~l~~as t? be salved ~.t
the c~fe~?ence. the t~ea~tg~4c~e r~:~lies ~i~cla~d~.;~ ewe ~f ~d~uiat
status fr?~a ~icar~~~ de f~ct~ ~?ve~me~t~ ia~dicate theta
~~) `the Republics ae~: that the tre~.ty t? be aae~?ti~.ted at
R1? sh?s~d c~ffi~it each si~ra~.t~ry t? assist the ~ctiffi ~? ~~ act ?f
a~~essi~u.
~~} A ~a~~rit~ ~f the c~saaat~?ies are i~ favor ~f per~~.ttiu~
each si~at~ry tai deter~e fir itself the iffi~esiiaS~e steps ~.t Ali
ta.~e t~ a.s~ist the ~cti ~' ~essi~. ~~he LAS a~c~s ia~ quest~l?~~
in~~~e ~~?~.ctica~ilit~ ?f defiui~~ ref?~eh~d the ch~.racter ~d ta.~~
i~~; of such steps. ?1~~. aid ~r~.~il, h?we?er,.aiisse~t fr?~a the
~a~?~?itg mew this p~aiht; ~~livia, ~~ the ~~ds mat the
relev~t measures should ~ deterffi~~d b~ the G~ver~~~ ~s~~.rd
~f the ~ ~.ffi~~?ic~ ~~i~~; r~.~il ~. the ~r?a~ds that a relevaaa~t
~~easur~s ~hld be s~c~rdi~ated~e thr~~h c?ffisult~,ti~ ~d men
clefiued ~p ghe ~a~a~~~u military ?a~i~ati~~ it w?e~ld Ii~e t?
see created. ~he~?~ ~.~, fu~her ~?re, eve ft~t the repYies ~ the
catrie~ ad?~ti~~ the ,~e~rit~ view, s4~Y~AAe ~entfffiea~t ~ f2.~!?fi ?f
px?i~as? g~.a~i~~ ~.~ re~axds the ~at~re ~~d ti~ain~ ?f ~e ~sisee
t~ p~'?vided,~
(~~ Ei~htee~ curies, i~cludi~~ the ~~, fa~~~~ a~a~d~~
~e~t ?f a ~aa~i~ity practice 3~ veti~~, aid held that c~B~ecti?e
~e~ures shcaa~d he~cef~rth rewire the ccurre~ce of t~?-thirds
?f a si~,t?ries. (~r~euta ~~ld ruire u~a~i~~s eeffie~t,
while dB~y ~~ld permit c?llective ~~as~a~?es leg vets ?f a
sia~tple raj?rity ~f the ~ignat~ries.~ ' S~ce ~?ffie cif the ei~htee~a
catries fisted as suPp?rte~?s ?f the ~~?~thix~ds raB.le ad?g~ted that
~?siti~a ~?re ?r less relu~tly, they ~.~ recede fr~~ it ~ the
c?~trse ?f the c~fere~acea
~~o~
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~4~ F? ccanntries -- the. X15, i~ra.~ii., ~., ~ Pana~:a. o-
w~~flai ~~ c~iiecti~e ceases ~ind~~ cry u. these c~nt~ies
tiaat have c?anred in the~p the ~.a~?~~i~ ?f -the c~n~ries w?~ui.d
ffiai~~ a ffieast~?es ~~neiina~ upa~n a~i siaa~t~~ies to the treaty. ~,
few ccu~tries wc~~iri iii~e t~ disti~ngnish between c~rci?e nneasures,
which they w~~aid ~ai~e bind~~ ~~.y e~an a curies c~arin~,
and a~I diner ~easu~ces, ~~hi~h they wed make i~lndtan~ ~~ a.ii.~
r~5~ ?The .~?rit$ ~f the curies, hacludin~ a STS, wed
p~st~~ne the creat~.~ ?f meter-A~eriea~n ~iflitary a~s~ncy untii
~~ua.ay ~~~~, wi~enn the i~~~~a ~~nfere~ce is tc c?~?enaes free
ce~tries -a a~ii~a, tine D~~ninf Re~ubiic, aa~d Peru -- w?aaid
lii~~ at kea.~t the general ~aru~sas f?~ such an a~e~ncy t? be made
at i~.
Exc~n~~es ~f dews ~~ the a~~ada. a~~l cn the decisie~ns t?
&~~ rea.ch at ~i~e ~i~ ,~cnfereace bed abet tw?~ years ?, when
the STS a.n~i ff~sur ~vt~er ct~?ies ~~e~in~i~,~~razil, Chiie, and Eeu~ior~
submitted drafts f?~ a treaty t? i~~ienaent Part Il ?f the Act ?f
~~~Ftec. etc? ~ Parma, subsequently sut~.tted su~~es-
trans based ~ the ~ra~ili~ draft. Fit ti~.e spri~n~ ?f f~~s9 the Pan
A~erica.u [~ni~a ~axblistne?i aaa ~,lgsis and c?~iaaris~mm e~f tiaese
ei~~nents. The a~ysis sh?wed that a drafts differ p~?a~ncipaJ,Ay
in tine ~e~e~nt t~ which they effib~iy specific nleast~es rather that
general pri~aciples a,nd the event tc which they assume that the
e~-cl~.si~e pure?se ~f the pr~se~i Ri? t~?eaty is t? gna~e ~r~nanernt
ce. te~cap~rary ~~?~si~s ~f the Act ~f Cha~puitepec. 'I?he tJa
drat, fear ignsta.~ce, a~th?~,~h it wed per~cnit decisi~srcns by a tw'??
thin?ds ~?~e ~~ w~ul~ ~na~e sucin deci~i?ns binding ~aaly ~ tine
ee~unt~~es c~c~~nrin~, is ccuche~ in ~e~ne~a1 terms and a~ieres
cl?~sely t? tine principles e~aciated in the .Act ?f d:h~.tepec$
the ~?li~-ian, ~cuad?ra~, and ~rugan dn?afts; by c?antrast, effi4~
k~~~y speeffi~ ~~?~?sads and enZar~e in i~~rtant particui,a.rs on
the ~hapnnltepec pattern. S?~e ?f these praposals w?uld invub~e
?anly ~?a.l e~tensicans ~f tine princiiales +af~ inter-Affierican c?-
?perati as these g~?incfples ha?e ~perated~ ~ the. Est, especially
ciuri~n~ World mar ~. a ~ua~?antees transit ruts t? tr?ops en-
~ed in c?rxn~~ actin t? resist ~~~ssicn; aan~ther assigns
cex?tai~ ~cew fe,ctiuns t? the Pan a~.ffieriean [Jnfon; an~ner pieces
certa pr~le~s under the jurisdicti~e ?f the ~ternati~nal Cc
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of justice; another commits the American Republics to recognize
no acquisition of territory by force; etc.
Other proposals, however, look to far-reaching modification:
of existing conceptions. One commits the American Republics to
reciprocal gvarante~:s of territorial frontiers; another envisages
joint action against any violation, within the hemisphere, of the
rights of man or of democratic principles; a third calls fora co-
operative military agency empowered to direct common military
action by the American Republics; another obligates the signatories,
under certain circumstances, to provide troops for commcm military
action; another provides for regulation of the manufacture and distri-
bution of armaments within the hemisphere.
Argentina is areportedly about to submit its own draft treaty
proposal, which wouiAd bring the total number of such drafts to nine.
Cuba, though it has not submitted a draft and fs not expected to do
so, has placed itself on record as convinced that the proposed
treaty should address itself to certain economic problems which it
regards as relevant to hemisphere solidarity. Still other proposals.
may be submitted before the conference convenes or may be brought
forward in the course of its deliberations. Because, however, the
conference is cer?ain to make its decisions in accardaace with the
unanimity principle, and because each of these specific proposals is
likely to elicit vigorous opposition from at least one of the Republics,
the .treaty probably will reaffirm, in a form intended to be perma-
nent, the principle of cooperation laid down in previous conferences;
will specify no required procedure other than general "consultations'; -
arzd will impose no specific measures for collective enforcement.
- i2 -
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CGMMiJ1~lGS`'~ Sl~'PPQR'1' GF lll',A~IY,IAI~I Cf~TSTITIJT'lG~t
A.l~iough the l~razilian Cora~munist Party was declared
illegal on ~ May 1947, it remains in existence and is actively
supporting the established form of government in Rra~il. This
uts~expected development in Coxn~raunist policy suggests either
that l~~azilian Communists are ~riolating I~reffilin wishes `which
is unlikely) or tl~.~.t the l;rerxalin itself leas shifted its line im Latin
.~ meraea. to favor front organisations as against political infil-
tration through party organization. ,
?T?he new Co~;~naunist policy, which parallels one reported-
ly agreed upon at a Party ~nee~ing ~ Montevideo in June 194?,
Includes: denial of any tie with the USSR; active support for the
e~st~g government of each coamtry; and $.he ans.intenance of a
functioning networF~ of intellectual, cultural, or recreational
front organisations, but with continued effort to penetrate ex-
isting political ar~d labor groups.
The pa~?tial defeat of Soviet espionage in Canada in 1946
may cause the IzSSR to place increasing reliance on Coxz~anunist-
' f~rsnt organizatio~as for clandestine operations in preference to
the traditional Communist pies. The present pattern of Com-
arcr~nist activity in brazil may therefore indicate that the 1JSS~
expects soon to need espio~aage in Brazil more than it needs
political tools. In liras with this expectation, ties Brazilian Com-
coranists will pro'~ably continue to attempt appeasement of the
Brazilian Government in order to keep intact some kind of Coffi-
axnunist nwcleus as an alternative to an openly political organi-
zation.
~13-
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~~
Tnn cF~u ~T
C~~T'~N~:3
Pales
~~'1C~C~ .................................... 1 - 5
Por~gt~ese Pv~~s~fv~~s C~~aglfcate .~z~res ~e~o~~a~~.~s ... 1
Pe~s~~ale ~esa~~~af~c~ of dash-French Tree ...... > .. ~
Resa~ts ~f ~~ Ct~~asider~.tiean ?~ Cree~C Case.... , ....... 3
Per?n's Pzrlatic~. ~?'s8~ ~c~~ac Prc~b~.e~s ......... , .. 4
Document No.
tt0 CHANGE in Class.
DECLASSIPIID.
C ass. CHANGED T0: TS
DDA Memo, 4 Apr 77
Auth: DDA F:EG 77/1765
Date:
... '~~
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~E ~~~ .Ca~~ 1751 ~E H
~E~'ER~ ~
t1S ~P~ar~-ese ne c~taata~ns n~er .~~nres ~aaes ry lie ~aasnPlf d
gated ~~ ~a~~gnese c~esixe fc~r ~. iii guarantee ~f texritc~rfai ftttegr:~-
~~we p~ ~ ~.
"gY ~~~Feg6 Ss tF Ti00~9.e?
,S,~anfsh~reneh ~?ade ~ be remttmed semi-se~re~1~ ~rSa.
~res~~cz end Fig tcagai see riage ~}.
the cri~~ai i~iiaa fa~s~d si~atiQ~a, whic~a l~s ~aee~a aggra.~ted
la3- the anadee~a.e~ Qf a 1~~? gFafn harvest, ccyns~tutea a grave pnif
te~~i thxe~,t t~ ~hhe i3e ~asperi ~vern~te~n't. Efforts bg the ~verm-~
meat t~ meet thhe ~xisis thrtn~h grain c~aileetfcens a;ad re~dis~ibatinn
are meeting stx?ng pntriie ?psitie~a. Leftfst gr?~.~ axe ~iaa#aii~~i.~g
~~n this resentment in a~i effort ~ ca~rexthrnw t~~e present ~ve~a
a7r~ent. I?~ Gasperi ~~isiaerg that eariy iarge~s~aie imp~rtss of wheat
axe ne+~essa~ in ~rc~er t~ in~xease the gash. a?atinn i?n Septem~ex a~-d
m~.tryin t incxeas~ at i~as?-until the ~~?nal electii~ans seheainied
fc~~? .~.pril Y~4~e ?~he b~,aiia~a ~:'~a~msmist Partsr hypes that the ~ISSR, fn
mew ~~ fl g~eei ,wlae~.t_ px~apee~, wii~. send wheat t?; Ytai~ in an eftert
haistEx the ~emx~aists at a g~ais as was d?ne ~~ the i~SS~ ~
the Fren~;h elewtz~ns of ~e 1~~~0
-5'wet~ela.D~ ~~L,i~F~& e~~fwi Gbb(.U l ~i3s 6buiFsk~~ LO t~~g ~T~d s~t ~Q
the ~~ a~erI ~E' th~'biame fur tae et~ntrg- ~ went c~iffie~aities, despite
the feet tit Sweden`s ~~~~S~~DQ,(~~0 five gear #xade and eredit arse..
anent s~~i'I fhe SSA is eans~ sexi~ disic.ti~a~ ita the ~edish
ee~n? Soei.al i~emne~?atfe vhes~en charge that ties ~tS aa~:~ tT~
~,~~ ~~~'~ ~w~E'~~I1 ~~~ he~F~i' YnRp?~s ?~ lC~~-~e~~elAt'~.a~~ ~~i~ ~a xl~y
~.~~e~.ii~~ edea~'s f~rei~ cnrrene~ rese~es a~?e heirg need to ~b~in
.ateriais fix pxedn~~n~a t~nc~e~? the S~v?et traeie past and deifveries
are i~eing .de t~s the USSR en ~xedit.
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The recent ~reaa;h offer ~ per~tft an incsaase f~ ~r~a~
steel prarah~ctia,~- ~ e~chaage fir ~S~-'~~ suPpc3rt for ~tcatit~r~al-.
l~atlo~ of tt~: Rehr medicates tit E-reach officers h~.ve ~od_ ~f~ed
weir attfltude toed. the Ccr~a~ cgaaes~oa~. Thfs shift may have
b~e~ caaFSeai h?;~ Ere~ch a~areaess arf a strop uagderctarrent of
olsiaiar~r at the P~.r~s corfexeaee favor~g the inclasioa~ of wester
~er~p ~. the Ea~?opeaa a?e~crvery prograaa.
Et~STEIt~ ~RO~E
ate ~oe~ ~re~s of a oer~a~ae~at has co~~~ssiv~~
certain positive res~l ~aa~re h~e~ aa;h~evec8 h~ the U~ tpavestigat~oa~
Greece see gs~.ge 3},
EAST~.E~I.~ RI~~.
"the An~io~~~ptiart diste, schech~lec~ for a ~ecoar~ltgi CocR
hear~g ?~ 5 A~gast, .~ he sefitYea~ #~- large ~easuxe "fiat of curt
an?ved from office on charges of graft. Thr~ Ydationaflist +a~ficer g~rot3p
is also resisting Pes?on's ~i~*misphere defense collaroration with the
~S ,and has made it plate to the President that it desires neiti~er STS
traizai~ig s~t~thods nor YiS e~nip~aea~t. A g~o~?p of five g~era~s reports
edly has delivered an ~altinaat den~aadi~g that Pena abaaadon co~pera-
tion t~ith the LtS.
~'orr~ser Police Chief ~e1~.~co, the mayor spo~esa of the
dissident ~~.ttonaltst oi~icers, has taken part ~ a neamber of poi4tical
~teet~gs space his ebsssal: .~llth?~gh Pega~co fs reported to have
promised Peron ~~at he ~vi1.l not eng~.ge 3,o revolutionary activities,
he has refused to cc~nf'er with the President since his reffioval. fee
i~.~co '~oanld enjoy tk~P snp,~ort of a c?~sid~rable n~ber of pronnine~at
officers in soy actin he might tame against the Government.
,Any ~?evolt against Peron in the foreseeable fn~re mould
probably be led by the Y~atioaaaiist officer groula: 'fihe dis~.ffected
officers are clea~Yy watching po3itical developments closely bnt are
not yet readp t~ ialan any early action. Appsrently fearf~ of Rationa-
list attache ~ his intimate associates, the Presid~t has ts.~n certa~
precautionary measu~?es. These measures inc~inde; (~} the collection
of all a~ai2ahle hafor~~ati?n on dissident R1~ationalistS; (2} s~arvef~aace
of ~'ela~co$ (3} ckose observation of tabor w~arest to preveaat its exploita-
tio~a lay the l~ati~aalists; (~) aflerting ~-f~itary u~s for possible troub4e;
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'CCIp C~!'^v~T
~i~., ~.p~~.~?~~il~ t~~c~.c~~ Qf d~~~ ~~ 3il.~Da~ i~~.i~.
~~.i~ ~~~c~~ ~eia~~~~~~~ ~co~v~fc .ficici ~.g ~i~~
~~~ g~~.'~ f~~3i$c~g~.?t3~ f'Q3~' ~~ ~~r~~ ~~iffi~. c ~~~mm~c~f'~
~.f~s pricy-c~~~~~~i ~~nci ?~~ti~~ ~~i r~~ ~~i. ~i~a
~c~ea~i fafi~.~cp ~~~li iii ~# e~~~y~ use ~.~c f~r~i~'~.~
sc~.r~es~ ~ ~.~~~~i~.c, gar aga~ic~, ~ ri?.~~ 4t&~~ ~-t ~~~~. .d~.r~~~~-
iia~ar~ ~cie~ d f~~r~~t ~~c~~ p~~iii~~ ~ ~i~a~~.q ~~~~ri~#c~4.
~?~ i~~ f~.~ cf a ~~~~~?~ ~.c~si #~.~ ~?i~r ~n~~r#, c?~~i~auc~aa~
3ic~~~~ fir ~~ic~ ~~~icl~s ~~~~~~ ~~c ffi~~~ ?f ~~p~r_
~ ~~~ ~~~ Aia~il '~ ~~?~, ~z~~~~ii~~ acid ~~d #tsr~ ~xc~.~~~ ~?idis
?i~cii~~~ ~.7~~1. ~c~c~~~~, i~~~ ~r~~~~ sicsc~ ~,~r~~~ r~ce~~l~
~~ ~as~~~c~ tc ~?ic~i fi~c~~~; ~i~r aa~ ~p~?~ce~:~~.fi~d x~i~~,
i~c~~ns~?i~i~ ~.~a~d~r+~~~ a ~~~. ~~iii ~ i~ may ~d ~c~~i~~
~~~ ~~~i~c~~ ~iiii pr~~.i.ir d~~pii~ a cidc~ble ~~~~e~e~~ re-
csa~ex~.
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JU
'1'O~P-$~ftE'I'
~ra~T~~Ts
Q
~ageg
TA~i~S ~i I~I~I~~ ............................... i - 1i
J~$
A~tTgC1.~S ................ , ................... 1 - 7
Strategy 'of . So~et I~ela~ in Treaty Ratificat#c~ ......... - 1 "
French ~pinian ~ German ]Production ............... 4
Tk~e .~ ssass~nations in ~urffia...... - ............... ~
I3tatch antent~ons ~ the ~I ...................... 6
Document No. Q
DECLASSIFIED
lass. CHANGED T0: TS S
DDA Pvi~mo, 4 Apr 97
Auth: DDI! RAG. 97/1763
Date: gy, n Z~
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'T,OP SECRE'T'
~.` R E Te8 i7 S fl T:d T~ flt I ~ ]~
e
GE%~RA b.
the USSR is ~eected to ~ost~one ratificatioae of the Itaflian
and Sate~.ite treatfles at fleast until Septe b ~~erhap~e~initefly,
ivt order to complete fits control over pastern l~urope aa~d to prolong
unrest on the contineea~t gage lj.
B~EST~T~.1oT ~UTTt4PT~
Ti~ tench deter~ninatioea that ~r~n-an shafli. not again laecome
powerfa~l contiaatees to complicate ~ or l~uropean recovery
Page ~~
the Soviet aa~d Satefllite trade pro~aosals to Austria may es-
ta'b&ish the pattern of future economic relations i~etween faastern
fur?pe seed the rest. `these proposals show that the USSR and the
Satellites intend to pemn~it trade with the west only by agreeaanents
whack, ?ffer cosnffiodities at prices. c~sider~lbfly hggher theses in trade
hetweeex the Satellites and the USSR. Pa~yxneeat by ttge ~dest, further-
mo~re, mast ~ nn~.de in either U~ dollars or in commodities urgently
needed ~ T~asterr~ Europe. Austria rejection of these proposals wooekcl
be e~loited by So~et pr?paganda to demonstrate that Austria fs s~ject
to US domination at the expense of fts owes wolfare.
fifth the formal arrest of the Portuguese .Army and i+Tavy of-
ficers who were forced to retire one f~ June, the Salazar oppositfaa
e~aoveYnent, Weser well orgaaaised, has lost its most iaafluentaal leadersp
Sa~asar would not have ordered the arrests without being confident of
.Army suppoi?t; his actiomm, however;' indicates that even so he does not
wish to risk dfssideeat activity iRn his country under present international
coa~dati.ons. - _
EAS?1'~T EUR?PU
~,capitali~in~ upon ~un~ag?pss political disintegration following
the a~ecent `che Communist Party has spathe imposition into
e i,_
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'T'OP SECRE'T'
?
small, ineffective groups, thus assuring its control of the coming
elections. Moreover, by extreme pressure, the Goammunists have
virtually coxr~pleted passage of a new electoral law wh#ch will provide
for Communist-controlled elections within 60 days after enactment.
This law, outrageous by i~estern democratic standards, legalizes
extremes of electoral ffianipulation comparable to those which obtained
in Bulgaria, Rumania., and Boland.
IdEAIi. EAST-AFRICA
]Persistent rumors of an impendini; ~ilitax~di~ctatorship in
Iran oriented toward the IISSI3 and headed by Ali Razmara, the ambi-
tious Iranian Chief of Staff, axe. discounted by available evidence.
Razmara has abandoned his earlier "blood and ia?on99 policy toward
Iranas anti-Communist tribes and nov- has adopted a conciliatory atti-
tude, apparently in the hope of obtaining their support in the .event of
a Soviet attack. Moreover, ~ Raz~nar~ has indicated that he favors
retention of QS Military Missions io Iran, despite continued Soviet
pressure for their discontiaiuance. ~.
FAR EAST
The strongposition of the IIurmese Anti-Fascist Lea~ae has
nat been impaired by the recent assassinations of certain League
leaders (page 5).
Dutch officials appear to be ~roceedin~ unilaterally with plans
to form an interim federal government for the ldetheriands East Indies
while executing "limited police actions's (page 6~.
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ARTYCLES
C
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'I OP SECRET'
STRATEGtY' 4F S4)VIET DEI~A~Y IN TREATY RATIy'ICATION
Six months after- the signing of the Italian and Satellite peace
treaties, it appears likely that the USSR will postpone ratification at
least until September and perhaps indefinitely. By delaying ratifica-
tion of these treaties (all have been ratified by the US, Ux, and France)
the USSR hopes to facilitate consolidation of its control over Eastern
Europe and to prolong unrest and uncertainty throughout the continent,
The Truman Doctrine and the Marshall proposals have forced
the USSR to reconsider its position in regard to Hungary, Rumania., and
Bulgaria. In the face of a lra.ssive Western policy, the Soviet Union
might have considered its control in these countries sufficiently strong
to permit early ratification of the treaties without jeopardizing its ulti-
mate domination. The effect of US aid to Greece and Turkey, however,
coupled with the Satellites' desire to share in the US program for Europe,
has intensified Soviet determination to maintain its extraordinary powers
of control over these countries, now exercised through domination of the
Allied Control Commissions and the presence of occupation forces.
Although the Dimitrov regime in Bulgaria is sufficiently well-
entrenched to stand on its own after the withdrawal of Soviet troops,
the USSR has coffipelling reasons for not ratifying the Bulgarian treaty.
Direct supervision of the stepped-up campaign in support of the Greek
guerrillas would be more difficult after the withdrawal of Soviet troops
- which both aid in the war of nerves against Greece and .Turkey and
contribute logistic support to the guerrilla bands. The recent arrest
of Petkov and the terrorist campaign against other Agrarian Party
. leaders indicate the advantages to the USSR of consolidating its control
prior to ratification. Had these actions been taken after ratification,
the Soviet Union and the Bulgarian Government would have had to answer
to the UN for violations of the peace treaty provisions. In order to avoid
foreign intervention, therefore, the USSR will probably delay ratification
until all vestiges of opposition in Bulgaria are eliminated.
Conditions in Rumania also favor postponement of treaty ratifi-
cation by the USSR. Despite nearly complete control over the Rumani-
an economy, tie Soviet position in Rumania would be insecure after
ratification so long as l[~ing Michael and Maniu, leader of the opposition
National Peasant Party, remain as symbols of popular opposition to
the Communist Government. The treaty will probably not be ratified,
-1-
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therefore, until 3Vlaniu and the lN'ational Peasant Party are eliminated
from Rumanian politics, and until some means has been found to dis-
pose of King Michael. The absence of any popular demonstration
against the recent arrest of Maniu and many of his supporters may
encourage the Communists to hasten their decision on Michael.
?
In Hungary, the USSR was confronted with a government dis-
tinctly pro PVestern. The "coup'' which resulted in Premier Nagy's
resignation iaa June was the first step in a series of necessary prepa-
rations for ratification of the peace treaty, New "rigged" elections
are expected by September. Even the holdfng of these elections does
not, however, presage early ratification because post-election house
cleaning will still be necessary in Hungary as it has been its' Bulgaria
and Rumania.
In addition to these political considerations, the USSR needs
more time to consolidate its economic and military control over the
Satellites.. Partially in response to the European recovery program,
the need has become more pressing to strengthen economic ties
among the Satellites and the USSR. Imposition by the Soviet Union
of the economic controls necessary to achieve this goal in the ex-
enemy states is far more practicable under existing.,conditions than
it would be after ratification. Through the Allied Control Commissions
and with the help of occupation troops, the USSR maintains an effective
stranglehold on the internal economy of these countries and, by con-
trolling their foreign trade, can block Western economic penetration.
:Meanwhile, the USSR is using its dominant position in the area to im-
plement a network of military alliances through which Satellite armed
forces will become no more than auxiliaries of the Soviet Army.
Although ratification of the Italian peace treaty would benefit
the USSR by forcing the withdrawal of US -UK troops, thus giving
Italian Communists a freer hand, other considerations militate against
early ratification. l6y depriving Italy of independent status, the USSR
prolongs the existing unrest and uncertainty in Italy and retards politi-
cal and economic stability. (Italian Communists capitalize~upon the
unpopularity of the Italian treaty by pointing to the "quick" ratification
by the US and UK as contrasted with Soviet "reluctance" to ratify)
Moreover, the USSR will continue to delay because ft is not yet ready
to implement the peace treaty provisions for the Free Territory of
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'fOP SECRE'T'
Trieste. There is little likelihood that a pro4Soviet governor will
lie appointed for Trieste. The USSR therefore prefers to re#ain the
status cpuo in order to m~.intain conditions favorable to infiltration
and eventual control by the 7tugoslav Communists.
0
e
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'I OP SECRET
FRENGpf OPINIGN ON GERMAN FR.OI~UGTIGN
French public opinion is united in the determination that a
powerful Germany must never again rise. The French Communist
Party has successfully adapted its propaganda line to this national
feeling by arguing that the US means to revive German industry at
the expense of France in the program for European economic re-
covery. The French steel interests, furthermore, may appeal to
the public fear of Germany in a maneuver to eliminate Germany as
a future commercial rival. -
i
Foreign Minister Bidault's recent strong protest of the new
US-UK level of industry agreement for the US UK Zones Germany
was based upon his conviction that if French views are ignored in
the revision of German levels of production, French public opinion .
will turn violently against the plan for European recovery because it
includes a resurgent Germany.
Bevin has made it clear that European recovery cannot suc -
ceed unless France participates. In order to participate and to achieve
economic recovery, the French are willing to defer their demands for
a federalized Germany and for the internationalization of the Ruhr; they
will probably even consider a reduction in reparations. The French,
moreover, are not categorically opposed to all upward revision of the
level of German industry. They are firmly against increased steel pro-
duction. French industrial planners point out that, with coke from .the
Ruhr and atith the cooperation of. Belgium and Luxembourg, the steel
requirements of all Western Europe, including Germany, can be met by
the French steel industry. Unless the French view and the US-UK view
are reconciled, the present French Government probably cannot survive,
and the European recovery program cannot succeed.
?
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TFiE ASSASSINATIONS IN ffiURMA
Events since the assassination of several important Anti-
F'ascist League leaders demonstrate the strong position of the League
hn ~turmese politics. No attempt has been made by those responsible
for the assassination #o displace the League from its controlling posi-
tion. On the contrary, the League recovered swiftly from its disaster
and formed a new Executive Council headed by ?'i>aYdn Nu. The UK
Government will add support to Thakin Nu by announcing the agree -
r~ent naatde during his recent mission to London which transfers greater
powers to the Burmese Government and ensures early consideration
lay the Ulf ~arliarnent of legislation for Burmtese independence.
f
Although no positive identifies#ion of those responsible for the
assassinations of Aung San and ether League leaders has yet been
made, considerable circumstantial evidence indicates some complicity
on the part of . U Saw, leader of the ultra -nationalist Myochit l~artp.
Since the London Co~t'erence on ~urffiese independence in January 194?,
U Saw has opposed the League's agreement with the UK and has advo-
cated immediate independence. lSecause of the League's recent pro-
posal to the UI~ Government for interim dominion status, U Saw map
have believed that Aung San had "sold out" to the l~ritish. U Saw has
fre~raently implied that Aung San was responsible for the assassination
attempt made against him in September 1946. Unusually large .stores
of arras were discovered at U Saw's home. Also, a jeep found at
U Saw's residence has been identified by a member of the Burmese
Executive Council as the one which carried the assailants of Aung San
to the scene of the assassination.
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i
DUTCH INTENTIONS IN THE NEi
f
Since the outbreak of fighting bet?veen Dutch and Indonesian
forces on 2I July, I?utch officials reportedly have been establishing
a Dutch administration for occupied Republican territory. Two Dutch
civilian administrators are believed to have been appointed for North
and South Sumatra and two prv-Dutch Indonesians for East and West
Java. It is significant that no such administrator has been named for
Central Java. 'T'his omission may indicate Dutch intention to limit the
Republican Governme~at to that area, separated from Republican areas
in Sumatra by the Dlntrh-doyninated territory in Nest Java. Neverthe-
less, top-level Dutch officials have denied any intention of destroyping
the Republic. They express the hope of "establishing a Republic '
v-iLlt which the lG~utch can negotiate for the early development of a
sovereign United States of Indonesia.
Other indications of unilateral action by the Dutch can be seen
in the apparent formation of an interim federal government for the
Netherlands East Indies. The #ormation of this interim government is
suggested by reports of recent conferences in Batavia attended by the
leaders of the pro-Dutch states of East Indonesia and West Borneo.
Further evidence of the formation of this government is the appoint-
ment of several East Indonesians to federal posts. This action suggests
that the Butch intend to proceed with the implementation of the Linggad-
~ati Agreement and the Dutch note of 27 May 1947 (as interpreted by the
Dutch) in order to present the Republic with a fait accompli if negotia-
tions are resumed.
Because of their claim that current operations are "limited
police actions," the Dutch are in a position to break off hostilities,
whenever convenient, on the ground that the objective of the "police"
action has been achieved. General Spoor, Commander-in-Chief of
the Netherlands Indies Army, has estimated that "police" operations
in certain areas will be completed in two weeks. Spoor stated that
conditions might then be suitable for implementing the Linggadjati
Agreement "in a way which cannot be done noon." {The Dutch Foreign
Office has expressed ~. hope that former Premier S~ahrir wi11 retain
his moderate attitude. This may denote a desire to use him in future
negotiations.)
_s_
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TC~-&F;faR~T
'the Iaxdonesfan ~epublfc ~ea~tw~le has appe~.led to all aaations
to brfatg its ease bed?re the ~tPT. ~?tfi ltep~bli~~aa~ Foreign. ~Viinfstea~
Salf~a ammd Sjahrfr ~.re now traveling ~ ]lttdf~. and fit Moslem countries
of ttte Middle East in ata eiiog?t to enlist support for the Republic.
'T~p CFr`~~ A
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 ,~ rS r
,.E` v. i RE~I`
..?
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CONTENTS
Pages
TRENDS IN BRIEF .................. ? ............ i -iii
WES7~ERN EUROPE
De Gasperids Position Since the Paris Conference ...... , . 1
Possible 3Vloves by the USSR in Austria ......... ? .....1
EASTERN EUROPE
Greatex Satellite Aid to Greek Guerrillas.:.......... > . 3
NEAR EAST-AFRICA
Afghan Interest in North West Frontier ............... 4
FAR EAST
Stalemate in US-USSR joint Commission for Korea ....... 5
Deacdock ~nnD~utc~~hp-In~donf~e~sian Negotiations ... ? ... ? .... 6
a M~er U~~r~ist ~8. TCi1~WW.~b ? ? ? n ? ? ? A ? ? ? ? ? ? p ? ? ? ? P
.Y IVISY#~IRN YK+/J~iiSPfiia~~
Realignment in Peron Government .................. 8
. D d-
Document lfo.
K? CAAN6Dr in Class. ^ ~
DECL-SSIXIED S ~
Class. CHANGED 20: TS
h: DDA REG. 7
Au~
,
Date : BSF
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~E OP srcRE~r
TRENDS II~T BRIEF
WESTERN EUROPE
The Communists in Ytaly are using every means short of insur-
rection to oust De Gaspers and return to power (page 1).
The USSR ma now abandon restraint in eastern Austria and
assume outrig economic con o e .
Both the North African Nationalists and the French can be expected
to exercise mutual restraint in order not to prejudice UN consideration of
the Moroccan appeal for independence, A representative of the North
African Nationai Bloc has announced that such an appeal will be presented
to the General Assembly in September> Meanwhile, the French will pre-
sumably push reforms in all their North African territories, and the Nation-
alists, while attacking French motives and the inadequacies of the reforms,
will seek to curb their extremists and to prevent disorders,
EASTERN EUROPE '
Further gtterrflla attacks upon Greece are expected from Albania
and Yugos.l:avia (page 3).
Desertions of Soviet militarp~ersonnel in Austria have markedly
increased since early May. MVD detachments charged with the prevention
of further desertions are being assigned to the Soviet units that are to be
transferred out of Austria in the near future. The high rate of Soviet
desertions in Austria, considerably greater than in Germany, is largely
attributable to the fact that deserters are not returned as they are in
Germany (within seven days after capture) under the Berlin-ACC agree-
ment.
The US has objected to the UK-Yugoslav air discussions on the
grounds that the course of the discussions has revealed that the Yugo-
slavs are clearly determined to exclude US airlines from Yugoslavia.
In the interest of US-UI~ solidarity, the British have deferred to the
US and have suspended the negotiations. Meanwhile, faced with the em-
barrassment of explaining their changed position, the British have drafted
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a note to the 7tu~goslavs which practica?~lly admits that 3YS protests a~?e
responsible for their reversal. The note makes clear that ~a~goslaria
will naw be forced to negotiate directly with the US for a TJS-'Y'ugoslav
air agreement or face certain US denial of the necessary zonal overflight
perrnissions'for its projected lSelgrade-l~~ndon route.
Substantial wins in Soviet industry and trade, moderate ad?ances
in transportation, and poor progress in ce~nstruction are indicated by
figures recently released on Soviet economic progress f?r the second
ciuarter of 194?. Progress oar the fealfill~.ent of the Soviet State Plan
appears to lie considerably better than during the previous fifteen months,
and only fog ministries out of thirty failed to fulfils theix? second quarter
quota. Sixteen bad failed to do so during the first quarter of 194?.
PEAR EAST-AFRICA
Affahan interest in lyorth Rye~t Frontier triiaesnaen is considered
ti ns .r
apolitical rcianeuver but not a threat to peace in the area {page 4) .
Se ration of the Turkish resident from art leadership, as
decided by the Republican Govesn~nent Party, is expects t ~ the
eventual resignation of President Iazonu as leader of Turkeys oldest and
strongest party. Eis resignation would represent the first major achieve-
nnent of the opposition Democratic Party (which for some tinxe has sought
to raise the presidency abo?e party politics) since the inauguration by
Inonu of Turkeys ~aaulti-party system in 1945. At the assns time, however,
such an action would also be to InonuHs advantage: by disassociating him-
self from party politics, he would, beconse more than e~-er the "rational
Chiefad and ffiight well retain the presidency even if the Der.~oc~?ats shor~ld
defeat the Republicans in a future national election.
FAR, EAST
The ne,~otiations of the l~orean ~oiaat Go~ mz~.issioa~, now deadlocked,
are expected to break down (page 5).
Major Dutch-Iaadonesfan differences continue to ~alock formation
of an interiBn federal governxnen
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The Chinese ~otxanaunists are a floitin the mou~atin um?es#
~ '~ aiwan age 7 .
The ~~ ecoaaomic pow in Siam will be .fl?~r ipro~e~ by
the concessions which Siang has x~de ~ order to obtaa a certifie
of sterling coneertibili#p from. the Ba~ais of Ea~gfland. The. British Financial
Adviser to the Siabaese (aovernffient who is also a director of the Basis of
laaagland} has naain#afaaed that such a certificate ~n be given onfl~ to a
"responsibiea' basis; he has declared that the Basis of Sian? coufld not
. q.lify as C6responsibi,e?' aanless a Brftish comptroller were appofaated.
k3o#h the Financiafl Adviser and the new British Co~aptrofller are opg~ased
to asap coanmerciafl activities ~ Siam which are not ita some wad connected
wilt British interests. ThAy t~aay therefore be expected to favor the l~-
owgied Shell ~i1' Gompan~ over the Staaadard '6~acuurn iii, Comp~g.
~rt~ter t~~~~~i8~f~g~ 4r ~n ~i~~'~ .~P~~~?nr~ i~~ ~~ ~8:
but large military operations are ?mflii$el~ before the occurrence of a
genearal Sino-Soviet breaisdown. Although So?iet militarg e~uipanent--
inciuding an anti-tams rifle, machiYne gams, grenades, grad first-aid kits--
has been captured from the +>~ater iViongolians, no evidence exists that
So~,et persoaanel were directing the ~~ag?lian operations. The I~a~ait
chieftain coffiamanding 1?caI Chinese forces claims, howe?e~? P that i~a~ais
units ita fleague with fester ~liongoaians were furnished ffii,flitary supplies
by a Soviet ffifaaeral expedition that i~ been e~loring the area worth of
Peitasha~a since A~Iay 1946.
Alth~h manw leaders caf the Burmese Anti-Fascist I..eaaue favor
intes~im donaini~ status for Burma within the i~ritish ~as~ffionweafl~a,
the I~eagne has heretofore laid such stress upoaa the issue of ,independence
that modification of this demanei would onfly furnish political caiaital to
the ~oncaa~~ist Paa?ty opposition. The ~ Go~-ernment has rejected the
propo~afl for short-reran tio~ninion status which a Burmese good-will
mission brought to Loaadon and has aaanotmced its intention to expedite
legisflati~a granting ~uraraa independence as sooaa as the lBaarrnese ~~-
stitution is completed.
V4dllaSTE k~1~ISPi~Iti
Ferod is a acted to in in oflitical force b receaa# ch s ~
his adntinistra#ion page 8~.
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~~E E~~E
~~ ~sy,~ Q~~ans~J Si 4ie~.DE~~~A~3b 1n~. ,Zgm~lr6s 6,iM~w ~6A.A ~.~:.~ ~m*bc~':u".~&p'o~,.bC~~.
S~./~. `5~7~~~3'~b~a ~.~~kl ~"^~ P~tl :b~~fi~.~~ 3,3t~~r'~~'y ~3w~ ~~~~~~~ ~ ~ ~E~3~~h"r ~~,x~3?~~~-
~~ ~~~~~~Zy ~ uf~~~~~,~~y ~~~'~~~ ~a~ ~~.~~~-~~~ ~~~~. ~~~~f~~~ are ~~~~ed
R~~~~~ ~~~~~~~P~~~~~ ~~ ~~~ 5~~~ ~~~~~~~~ ~~~.~~~ ~ ~~~~~~~~~~ ~i~~~~f
~~~f~~ ~~~~ ~~ E~~~~~ ~?~~~~~~~ ~@ ~~~~~~~~ ~~~'~'A'~'~'~ ~~.~ ~~ USSR :r~aay
new f~~r~~~?y/;'~q~po~~~,ra~~s+C~~@~.~~~~~~ ~ ~~~~z~ ~~ ~~~,~~ ~~~ ~~~~~~y ~f ~~.~~e~a
~,~.~~ Il Eaal.e ~~~M& KrV B L8 8 ~~~ USSR ~.~y ~~~~ ~~a ?~~~a~ .~~~t~i~. ~~a~~d~a~~ ~~~~f3~~
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~~ ~~q.2~~(~o~~~ {q~{! /~~~(~Y~'~y~gq ~~~(~~~~~~q~'py ~'~@~~ (~4~~?~ ~~$S~~q{,~y~p.~.$~%~~~~~y~, {)y~pp~y,~~~(!~~~q~f~~{`.
~ud@.Rf~.ll~ c)cm PA~~EdXF ~~?-?~~A~K~C LI~~?SGi~a?~ ~ tYl~ 1~~~~~iH.Ga ?.d'N ~'1ll h~i IM~S~6 ~O ~/ @l'iY
.~~~~~ o
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Er~.S`~E EO~E
,~.? S~~YY~~ ~.Y~ ~~ ~~~~~ ~~~~~YYY~.~ ~~~a~~aa~Y~
~Y Y~~~:~ Y~~~~~Y~Y~~ ,~ ~:~~~~ ~~~ ~~ ~~~~~ ~~~~ ~~~Yd ~ ale
~c~ ~aa~r
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E~~S~ ~~ ER~~~
~~~~~?~ te~e~t ~~th eat ~`~?~~tme~
`the te~est e~e~ee~ ~~ the ~.~a~~ ~s~~e~~~e~~t ~~ the ~at~~e
~f thy: ~?~ meet ~'~~~t~e~ t~~sffie~ ~. .the ~~~~~ble e~eat~~~a cif
~e~e~~~~t ~~t Mate t ~f ~~as~ ~~~th eat ~~~~t~e~ P~~ee
~~ e~~side~ ed t~ ~~ ~. ~~lft~ea~ ffia~et~~te~ wh~eh e~~t~te~ ~~ iffi~edte
t~~eat t~ e ~ea.ee ?~ ~?x~~~e~t ciao.. the ~~~ee~t, at ~~ lie~~;t~H
~~ ~n?~~vate~ by ~it?~e ~~e than ~. de~~e t~ a~~ea~ as the ir~,~~d a~e~
~~?~eet~r ~~ 4~ne b~~~e~ t~~~~e~~ ~~ ~~~ a~
~ ~e~~~~~ .A~~ha~~~ta~
a~ ~~ ~~a 9 a~~ ~h~~e ~~~
~s ~f meat ~~t~e ter
a ~a~~l ~?~e~~e~ent.
A ~~te~atia~~y ge~??~~ as
st ~~ the ~it~at~ f~ the p~s~~hil~t~ Yhat
~~r~e~t~ ~e~t~~e~t~ ~~~ ~~ee~t affi?~i~ the t~~~e~ffi~~ map
e
~~t~~?e ~a~t~e~~~~ ~~ i~ the ~a~ta~ ~~~e~a~ffie~t sh~w~ ~.~~~g ~e
e~~~
~e~t h~ een~~~-e ~e~~edati?~s t~ the nth wh~eh e~~~ca ~~- Fa~ta~
i~t~ ~e~~e~a~ ~~~?~de~.
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~~~ ~S~LISSR ~~~t C~~~~~~~~ for ~?~~~~., ~~.~~fi~ ~a~ ~~~~~
~e~~i?~~~ ~~~~~ ~ ~r~ay X94?,, ~~ yea ~~?~~sa~, ~d an e~~ta~a~~ ~~?~-~
~~~. ~~~ ~.~~~t~atx~a~~~ s.~ ~~~~~.~~~~~ l.eiy. `.~~a~; ~~y 7i~~Fsbe, ~~a~`s. ~~~.~~~
tie Sta~~et ~~eA~~~ate~ ~~~e ~tu~~e~r~~.y ~?~i~~~~ tca y~~~.d, ~~ t~ ~ +~~~~t~rs~a
~~ p~Y~t~~a~. ~~~~ t~ ~~ ~~r~~~~ted tie ~~rat~.~ ~? a ~~?~~ ~~~ ~r~?~a~
ersaea~fi. ~'~I~is ~a~~e ~~~~~~ ~~~eci ~~i~t ~ca~~x~$~~~~~~ prim
~ec~~~~ ~~~ ~~.y ~~~~.~
tie ~~rre~t ~e~~t~~~~~aa~, t1~e L~~. ~~.~ e~e~~e~ +~ ~~~~r~ e~~e~rt,
~~t~; ~?epeate~ ~ ~~~?~pr~~Z~~~~ ~~~~t.~a~~e aap~ a r~a~r~~a~t ~p~ee~w
tat~~aa ~~ ~~~~~~~ aee~xe~~t~, tca ~~~~a~;~ rs~~tf~t part~e, ~a c~ai~~s ~~?~
~a~i#f~,ll~ ~21~.~1~, i? ~?~ i~~~f~g~. `~h~ Y3~ ~~~?a . ~i~~d
~ ~ p~a~~~~l~ ~.~d ~~ ~ dpi ?a~c~ ca~~ ~~~ aa?~a~
~? ?~~1~ffi~a~t 4~h~~g. ~~ ala~~~a~~ Sa~et ~~?~~. ?? $ai~ is ~ prag~affi
.~ ~e~l#di?i~d ~~it~~h p a~gh i~ ~~~ i~ the Year Farb
a~ ?a~e ~1fCys ~i,~a~lg~ ~s~?~?i~ ~ha tISSY3. '
~'~?e~ah h1f~~~s~ ~8'a ~ S?~~~e~~ ~? ~ Ezra ~?~~~~~ ~Y'ag~~~
fs ~~ ~~ra~g ~~ ~~i~h, ~a~ ~~ea~h ilia ~a ri~.ai hied ~Isan
~~~h wiY~ which ~a~~ig~ h~ihi~~ ~ad~t~~ re~i~d ~~~~s~~~ ?ra~ the
USSR ~d ?~a~ ~~e~ch C?raa~ii~. a~dcr t?a side with tha jU~ ag~i~s~
~ t3SSR ~fd~t~t d ~a a.~da~ ~hc ~~~r F~~ach gaYicp a? g~e~~
~~ E~~~ t~~~t di~isf?~ ?f E~~?. haldiag ~ hip ca~~ag~aa~ d~ci~i~
~? ~~~~ ~ ~~ca~e ~~~g da~pft~ Sa~~~ appasfa~8 ~i t was
ca~~id~~Y2ly s~e~~ad ~y .~ ~??a ?? ~e is ~ ~hc F~a~c~a is ~
si~i~ a? a~~~~ l~~.d~~?~hi~ a~ ~ dig ~h~?e~ ~~~g. ~id~~il~ ~l~a
~~~~~~~~ h~ d is ?a~e d~~I w44h a ~'~~:~ch ~a~~~~is
~~ ae~?i~~ a 1~~~ ~u~ "ca~~~af~~~s~ wh4cYg did ~?~ icy co~a-
~i~~ a~ .~d~,~~~Y~. ~?hi~ a~~~ i~ ci~~:~iaa ?? ?d Sa~ie~ r~?as~, _
-~-~,~ da~f~d ~a di~~~~ .~ ~'~~~ch ~affi~i~ aid ~I F~e~ch lic
a~i~ia~ i~i~ind the ,~~~s~~~ ga~~~.
g ._
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Soviet oppositio~t to point action ?~ the basis of the l~rshall
proposals was based upon wore than the faaniliar concept that Cozad
ffiunisrn flourishes upon econoffiic distress. On this occasion .the t7SSR
was caught ~a a real dilemaxaa. Tf the iJSSlB. chose to participate ~ the
reeovery program, it would have been obliged to sacrifice the e~clu.s~ve
econo~i~; controls established in Eastern Europe sce the war and to
permit a western reorientation of Satellite economies into the broader
European economy envisaged by the program. Such a course, which
would jeopardize Soviet hegemony ~ Eastern Europe, was absolutely
unacceptable. On the other l~.nd, by refusing to parti~fpate the USSR
would violate a cardinal principle of Soviet policy: to permit no com-
bination of powers without Soviet participation with power of Preto. The
ultimate decisflon to follow this latfer course, despite its potential dangers
to So`riet intet?ests, was probably made is~ the confident expectation that
France woold not dare to eater the program after Soviet refusal. This
decision to gamble urn a French withdrawal gained further support froffi
Soviet convicts?n that the iJS will suffer an econoanic collapse before the
recovery program can bec?ffie effective, and that such collapse can be
hastened by Soviet non-participation.
The strength of the Soviet opposi$i?n to the Europe reconstruc-
ffon program can i?est be measured by the Oast?minu~..e refusals by the
Satellite ~..a.tions to participate. Until the final word was received froffi
those countries, there was every evgdence of their strong desire to pair..
ti.cflpa.te. Such evYdenee of overpowering Soviet opposition gives waning
that the USSR will utilise e~rery opp?rtunity to defeat the ends of the re-
coverp prpg~ana.
. In the inBrffiediate future the fYSSR can only resort to a propaganda
?nsl~ught ~h the program,, because mope overt~action +(such ~ a wave
of Comrntenist-led strikes iai Fraaaee~ might weai~eri the Soviet positive
in ~'estern Europe sill further. `moo pre~cti.ses will pr'?bablp be guiding
coa~cepts ~ the Soviet propaganda. campaign: ~Y) that tine Ea~ropean states,
because of their rtvala~ies and conflicting Ynterests, are incapable of
deveboping an effects?e program; therefore, the projected program will
only disa.pposnt the exuberant h?pes of flee participants and thus promote
fur~er a~@agonisna among there; and ~2} that fdne~t3S within a great will
undergo a~a ec?nomic collapse that will make ia~2possibYe ties fa~lfillment
- gQ ..
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of fits pr?~osals ar~d may ff~ally lead ~ the eollapse of eapitalisan gener~
~.lly. So~i'iet gr?~ag~.nd.~ wilfl thus: (1) seek to increase suspicf?n and
~i~ision a~o~g the ~rtici~at~g s~.tes; (~} eapitali~e urn emery snag
~.nd failure in 'the develc~p~ent of ~e program; (3) continue to east sus-
picion upon. Z3S :~oti~s; and (4) ~rediet the collapse of the US economay
h~fore 4he gr?gsagn can hoe fully effeet~.~e. '
I~ ~rB,ew of the eertain~ of ~goro~as 3c~et c?~teractiesn, Both
lea and ~fldauflt have shown an$fe~ regarding any delay in the effectf~e
i~ple~entation of the pro~gyecti~~-e prra~. ~e?fn is flaarticulariy appre-
hens~.ve list the i3SSflZ sh?n1~Z succeed in ~x~s~.d~g the participant Euro-
pean states that it is ~,in to hope that timely TJS aid. wifll aetc~ally be
fo~~eoffii~ag. die has predicted thatm ~ effective f,TS support is defera~~d
unfit the late fall or winter, Eurogae, ineluding Frances will be lost.
-li-
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El"'FECTS ~F' ~TO~T-FARTi~IFATIOI~ Ol~i ~ S.l~TEI.LIT'ES
l~oa-participatio~a bar the Easter. Earopeaa co~atries in the fortla-
comi~ag Farts Conference on the Idlarshall proposals will seriously coaa-
plicate the discrvssioas and will create numerous probleax-s for the Coffi-
munist-doraninated governments.
Poland, I~ungary, Yugoslavia, and Run~ani~. are in desperate need
of westea?fa econo~tic aid to reconstruct their war-ravaged economies.
'The economies of ~~e~hoslovakia and Finland, while Tess dependent art
western aid, are so ineicably tied with those of garticipating nations
that the t1SSR's decision has presented them with the gra?est problems.
`the Marshall proposal, thereforeg h~.s dramatically highlighted the basic
coa~flict in these countries between national self-interest anal subserefence
to !.the Kremlin. ABonmlZarti~ipation will inevitably increase popular re-
sentmeait ~,nd ~.gnif~ the difficulties already facing the Communists in
maa~taining their police control over these countries.
Participation ~ the plan ~ e ~sations of Eastern Europe, however,
co~~id have benefited the entire Ee~POpean eeo~omy oa~ly if the TJSSR had
also agreed to cooperate and to rela$ its economic deffiands upon the
Satellites- ~rtfculariy for Polish coal, Rumanian and Hungarian oil and
food, and ~'ugoslav raw materials, liven co~~tinued Soviet obstructionism,
therefore, western aid to the Satellites would materiaLAy increase their
ecohornic potential without producing. corgespondfgsg benefits to Wesgern
Europe.
The political nature of the Soviet derision is undeglined by the in~-
escapable conclusion #i+..at the USSR had wore to gain, econonafcally from
participation by its Satellites than ~lestern Europe. Increased Polish
coal production, without which full recovery anct greater ic~dustrialization
of the Polish economy is innpossible, is depeuslent upon the import of
westeraa ~raachinexy. lNl(oreover, Poland's decision will seriously impair
its chances to obYs.in a World Bank loan ~ $ IOQ,00?,000. "i?he USSR, there-
fore, appears vriliing to lose ais opportunity to make Poland e~ononnically
strozag ~ order- to deprive 1"~estern Europe of inc~?eeased c~uuanntitnes ok
Polish coal. The USSR would have similarly benefited by Ruafs
y~.rticipation in flee Isl~n. Increased production of Ruanani~n oil and food
rescaltiug froffi -the import of westea?n zna~hinery, agriculSural e~.ip~tettt,
seeds, etc., is essential if RunZania is to recover economic stalbility; and
the USSR probably would have dear~anded the greater share of any such
increases in the Iorm of reparations.
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~'6P~f;RET
(.~~ ~f f~~ ~~.~~~ ~~~~~.~ f~~~ ~ ~~~~r~~~ ~.f ~~~ w~I tae
~~~~~~~~?~.~.'~ ~.~~ ~Y~ ~~~ ~~~~ ~,~ fie' ~~~~~?~~ `~c't~r~ w~ f~~ ?~S~~
~.~~ ifs ~~.~~~~~f~~. ~~~~cf~l~ ~~~~$~~?~ ~~ ?f :~?~~~ ~~~f ~~ comma
e~vp~~y:.. ~~~~h6~5.~ f~~}apl~~ ~~,~~~~.{f~e.~~r.$~~pq~~~yp~~~~~p~i1~~. ~.j~~.e~~ ~~~$l~a j ~~ljw~f~yp ~as~n~~r ~{f~q~} e
'vb'~t:Y ~,~v,o o,~' A8 A3~~G~8~e ?~ ~`?.d r~"i~~Ci.~'s ~dPai~bS+7 L'VJS ~j. ~.fd~ ~~t~.~3~~ l.b~G.ri.~~?id?~~VVY 674AR~L&
~~4 ~~e ~~s ~~f~~i~ ~.w~~-~13~~ w~~4 ~ ~;:~~~~,i ~ s~~~~ X12
~~ ~ f.~~~~a~~?~~ ~1~~~~m~~ ~~~~~.~ ~ f~'a~ ~~~~~~~ ~~ Eft l~~~t-
~~~ a~ ~ ~~ ~~ f~ ~~~a~ ~~ ~ ~~~i~ ~.h~~~~ #c~ the sa~~~~~~ ~f f~~
-r~~ cF~-nET
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~*- J
~ ~ T?, ~ - 5 5
~ -. .
~~~~~~~s
Pages
'~`1R1~~S ITT ~~,~~` ..:'.. ............. . . ~......... i - ~~i
C~echcr~$~?a~ ,A~li~e C~e~ati?~s ~ tJS... .. .. _...... 1
St~.tegf~ P?sfti?~ t~f italg ~ C'?~tffie~c~.I A~a3tf?~a . ? .... 1
~STE~tI~ E~P~
Politfeal ~~lf~at~?~s ~f a ~~~e~s ~ ~ra~~e ......... 2
~1~ST~RI~ ~tTRCP~ -
S?~et ~ Sh~p~aet~ts ~ R~affiania ........ ....... 3
S~t~t~t P~a~t f~~ Y~te~;~t~I?n of Satellite Grp?~rtat~~ .. ? . 3
~~~s~led T~ainir~g e~f Suet ~~ta~ ....... ? ....... . 4
- ~~sitio~ ~ tP~ ~~C t~ ~aese [ali~g ....... ? .... ~
Chinese F~?~g~~ts ~ R~.~eha~f~.... ? ......... ? .~ .... 6
't~SRN' I~SP~~~,~.
~~an~ent P~1ltYcal C~is~ us Arge~atl~a ..:........... ?
SF~CIA.I~ ~'I`lC I.a~S .
~~. ~~q~~e~q~ ~ ~e 5e~~~~/~ygt~~~o~~ ~i ~dfa . ? ... ? ..... ~..... a .. a
A7 ar+?~Cd~e~ ~~~i3.1~4~L/]lAi7 ? . s ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? e e ? w ? ? ? ?~~ ~,
~ss~nsnL Na.
~Q C~3ANQfi in Class?
D~CLASSiFIED
..Mass. CFiANC~D T0: T9 S -
DDa1 lleras. 4 Apr_77
~'d~:~~T
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OE ~{rR~~
.~~~ ~~ ~I~g~~~~ ~~ ~~ ~
S~ER~~ E~RO~E
~~~~~~~~~~~ ask E~.a~?~~~~ ~~ ~~~~~~ ~~~~a~~~~..~~~~a. ~ ~g ~~~~#, ~~~~
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.., ?~
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EASTERN EITR?~E
~~e a~~nc~d S??i~t i~t~~ti~+n ~~~lp R~aia wi~in.
~~pre~e~~ off? t? di~~~~dit a ITS (~ 3).
`~~~ S~vi~t-R~~ani ~~.ilw~.~ a~~ee~~~t p~csbably f?resd?ws
a m?r+~ ~~eu~~i?e pi~.~ t~ i~~~.te alp S~.t~~.ii c?~~~i~.ti?n~ ~~ste~s
ceder ?~~ ~.~?~i~ .~~ 3).
la~asr ~pst~~a ~P~ 4)?
g,,., `~~~ R~..~cn p~e~~ a~qd ~?~di~~g~~e~e~tg?f?~?e ~?~epiatgi~~~lit f~~e ~gn~d
8i4E~cc~~.t~p~~~(~~~{~.~~~i y ~~qq eq~~ ~.~.?~~~y~~.??~yo~}8~. ~~.'1 ~ a~'~g4~8~nv~~q~~p~?gY~',16~.}.~~~ ~~?C .t6.8y1~w~yRy6~J~Sq~S~~~wv~` }~~~~. 688.
~.?6dL8i8'7A7{E~tJ~ Ga6~?~~91 Qom, ~~b~~lb ~o 4.~~~~~Nd~'~L.~B Yff WHffi~ `s ?iA6Hi6YAi8i~is7 nb6A~
d~,~apa~ed acid ~,~w~ ?f a '~~t ~ meow ~.i~ited t~ ~a?t~'ti?~~ f~?~ e
~~~~~~ ~?~a~a~ist p~e~~ d ~~ne ~~d?n ~ai~.~ W?~Y~~ar. R~di? ~aada~~t
~i~ ~c~~?~~iy dig i~bie f~?~ Radi? h~~~~?w d h~.~ ~d?pt~d ezm
cli~~l~ ~r?OS~~ety ~ti-~e~i~~ li~~. ~e~~,~~~~ tia~ ~~die~ i~ e~~d~r
~4~ict ~~~e~~~~~1 c~ffig~?1 d e p~~~~ i~ ~e~t i~ iin~ by i~dire~t
~~~d~r tTae ~7S aid ~ UR wiii ~ri~ T~.v~ ~.i.~ ~~a~c~ss i~ ~ee~ta
Ii~~i~~ f~e~d~~ ?f ~ p~~~s~ ~d radi?~ ~~~?~da~ac~ wig ~ t~~
?f a Fea~~ T~~~'~, ~~a~whiY~e r,~ R~~l"~~pi~ ust ~e~~nd?
f?~ ui~.~~d n~~s ~?~~~~ ?~ P~Cy a V~ic~ ?f Affi~~i~ay d iTS~
ir~~r.ti~sn b~iletiY~~.
Ake E.A.STaA~'R,~C1~
Se~~a~i i x~~~ ~~~ ~~ ~alied ~n ~~ ~?e ~~tt~e
Asti?~ ?f S?~iet i~t~~?v~~ti?~. i~ ~:?~~i~~ ~.ff~.i~:~ whi~~ ~ been d~a?
~a~~t ~i~~e ~ widw~l ?f S?~i~t tx~ps f~? I~ in T$~~.y f9~6.
F~; i~~ ~~i~ist~~ .~~~ .~ d~cia~ed &~is i~t~~fit~~ ~~ag t~ ~ub~it Y? e
l~a~if~ ~~~~~d~l~d ~~~ve~e ?~ f~ ~~A~) ~ S?~i~t ~i~. ~~?~~ai ~
w~i~~ h~ ~~d und~~ d~~e~~ i~ A~~?~ 19~~. ~ Soh ~~d a Imo, jib
~dd~tpt~dip wiil suis~t his de~i~i~~. b~ a ~~g~d S?~t ~~~~~ .
~.s~~~~~ x~~~~ni P~'?~i~~~~ ~~ ~..~aa?~ iiic~i~~ ~~ wi1F pr?~ak~iy
~~~t~~t t? a SC.
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~ Ake EAST
~ .,: stern ~~mmissf?
~~~~ wh~ii~.~ ~~~t~es str?~~ i~ the ~`ar
~~ss ?~ I~a~~h~ri~ ~ ~hi~~ ~, 13~`~ ~ei~~ a re~i p?ssi~iii~,
e~e~ ~h the re~e~st Ia~?~e~s~~.ie hi~ese ~?mm~ist ?~fensi,~e
~.ppears t? have r i~ ~?~rse ~p~.~e ~~.
STE~~ ~ET~J~RE
~~~?~'~ First p~liti~~i crisis ~.s ~reside~t ?~ Ar~e~ti~ appears
t? ~~ de~ei~pi~.~ ~~~~ ~, i~er p~5~iic ~~.te a~t~ ~~~g~?i~ is~li~p $~ ?).
`~~~ ?~~~~ dat~* .~~ ~ ~~.~ ~~~~~~~~ ~~ a IVfai~te~~c~ ~~ -
~a
peace aid Sec~ri ~i the "eete hemisphere ~ been set by ~ra2iY
fir 15 est. ~~.t3.~~s .~~ e~ issued ~ the F?rei i~xisters
?k aii ~ Americas ~te~a~ifcs e~~;ept icaraa r$wh?~~ ~~er~me~at
~:~~ ~~t ~~~~ rec~4~ed ~i~ Baer .~~.e~~.cas~ G?~ernme~ts si~ace ~~xr~.?~a's
~~ ~?~~ d'et~. ~r5a?r .t~ ~ ~?~~ere~ce9 ~ ~~ver~i~ ~~rd ?~ the
~'~.~ American ~~i~~ wii~. earl ~~t ~?~es~tat~.~~s am~n~ the ~ri~~s
~ernments ~~~~~ a principal pints ?~ the pr?~ectesl ~e~aisphere
defense lea. the ~3S ~,nd ~ra~i~.i~.r~ ~~~~~~~~~~ agree th~.t ~ ~~~~
~e~?ence ~~?a~id c~~ine ~. deiiberati~ t~ the te~?ms ?f this treaty,
which i~ t? ~i~e permanent ~~~?~ ~ e ~arinciples ~?g?p?ted i~ the
pct ~~ ~h~.pnYtepec.
Reeen~indicati~~as sn~~e~t ~t the t~ Americamms, th~h
~~~ ~~?ceedi an the tacit ~.ss~mpti~n .t they viii ~?t be ected
t? made P~'?~isi?n ~?~ it in their awn ti~a~~.i ~~e. ~ An iuential
pr? ~T~ newsga~.per, ~i `~iemp ?f ~?~?., is insister that the Aden
?~ ~.~~ enditu~?es i~a~r?i~ed in t Axner~.ca p~.icipati?~ in hemisphere
arms sr~dardi~ati~n ~e dis~iha~ted i~ acc?rdance with the pattern es~
ta~-iishec~ in ~~rld mar ~ a~ in cep w~rc, ~e erne bq the US.
?i~~m
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C~NE~.,~.I.~
C ?sl? ~ ale Oeratfoans to US
Rep?rted Czech ~tal~e ~CS~) plaa~~ for a re~lar transatl~tic
ser~ce t? New ~o~?k ~a S ?~ ease US ~o~stell~tl~s woufld knro~de
the oily through ser~ce by y coa~~e~?ctal ai~lhne fr?~ the US f~to
ptghce Igs. (Czechoslo ~, has ~eclp~?ocal a~ agreea~aeaats w~.th the
Wei, A:a~~'~, ~ ffioa~t ~~~?~~. ~?.o~~~~'8~~, B~E~o?~~~113~ ~0166+1dll~, ~~~~b~,
gYua~gary, aad ~~ag?sla~~,.) This pI to ee~d Czechoslo~aa"s ~ter?
~~.t~es~al atr operatl~ns fs pro,hly favored by the USSR, despfte Czechom
sl?~ags rel~.tt~e p?lltlcab l~depe~de~ce. `the USSR appa~?ea~tly stlAl
hopes the C?an~uu~sts wtll gam ctr?~ of this able. Shod the
Czech?sfl? Co~~u~fsts ~acx~ease thetr leaence a~ the C?ve~ent
(~hgch deaes aaoit apgear la~naffil~eaat), they wlli rene~r their eff?~ts to ~.~
conta??~. of the ~.frl~e, which coed ~e ~. ~?wel h~straaa~ent ~f So~~t
P?llcy. ff Czechosl?~a~a swings sharply toward the west, the USSR
caaa be expected to obstruct Czech~~l? ~.ir ope~?atlo~s ~ the gals.
Strate?;~c ~ositfon of Yt~ly Coznerclal ,A.~atto~
ftaly~s ge?graphic posfltlo~ as a anatura2 bridge for sh?g?t4r~e,
air ~traan~p?rt operattoans tDetwee~a the Nea~? East or gals aaad ~ester~
Ee~?olae cage b~ e~ploi~ed by etthe~? Easte~?an ?~? ~Tester~ lanterests, or h,
depe~d~ag upon ftaay~s feature political ?~~eutation.
~~
The ~i'esteru dowers, u~a~le to ?btaiaa ~~~ rights ~ the ~ s,
are usiang ltaliaea airfield o~ routes t? tie Near East. The Satellite States,
~ ~aar~; ~p~ear t?,b~ de~~i?~~ a ~?ut~ .through I~aTy gnat will obviate
.~Ylied coaacu~rea~ce t?. ~v~rflight ~f .~~asta?ia. This is sues~ed by the
receaatly disci?sed TtaliaaaORua.iaan pr?~r~sioaaa~ ?eeffieut, which pro~ldes.
for the Soet-c?antr?Iled :Rua~aaaiau ai~li~e TARS to fly thx?otagh I~~.dan ~
returan for Raliau Aandiug rights at Bucharest. Thus, as Czechoslovakia
pr?~des a~ o~ntlet fo~? Satealite aim traffic t? ~-ort~neran Eau??pe, so gtaiy away
ass~g~e c?~aparable tamp?rtce t? the Satellfltes as aan outlet to southern
Eaarope aid the Smith attic.
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SRY~T EUR~F~
?litical Y~ l~ti?ns ?f the Arrests, xn ~'~~~
the highly puhliei~ed arrest ?f a ?tag~ ~# Rightist pl?tters ley
Scseial~t l~,tericar F~fnister ~e~re map strewthen the S?eialist la?siticna
visma>~s ~~ ~?~~a~r~ists in weir strat~gie Y?~ w?r~i?elass sng~rt.
'T&~,e ~~~a~nunists have based a lame dart ?f their ea~xi~ai t~ ~?e~enter
the ~rn~ent can thei~? elaiffi t~, .fie the ?nly ~r?teet~rs ?f the w?rkers'
h~terests and ?~ ~ ehar~e that~the S~eialists have drifted t~ the ~i~2at.
~?he ensure ?f these k~i~~atist rev~l~ti?naries, ~nc~s have i~en under
e?nsta.nt g~lice surveillance and whose nuers are insi~ni#iea~st, c?n~es.
~,t s. tine when S~ialast Fren~fer R,affiadier is ab~tnt ~? ~.sk #~r an~tYaer
v?tc: ?f a?nfidenee ar~d whey the- ~~~~unist ~nreat to his re~i~ne is a~ m
~r~aehin~ ~. elfin ?1?he tflsnin~ ?f the disel~su~?e by the S~eiaa.ists, th~re~
f?reD saa~~ests an a#fc~rt t~'de~rive a C?na~t~ists ?f F?liti~l ~~anuniti?n.
-------
?recaver, the ~?vern~te~at's a~tien. f~resh~.d?ws new ~?~ ainst t2ae
Ccs~~unis~. Se~reral ffi?n~s ~'~9 ~e~~?e ode several e~aRp puhli~
cued ar~?ests ?f c?llah?ratf?nists and disei.?sua es ?$ Rightist amts cashes
dust pri?r t? tai string xneaseares a~.inst C?~nrn~ist i~iltratfl?n ~# ttfle
Farm; ~~.?lice.
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EASTERN EUROPE
Soviet Grain Shipments to Rumania
The recent announcement that the USSR would supply 80,000 tons
of cereals to famine-stricken Rumania. is a flagrant exploitation of Rumania's
food shortage for political purposes and is designed primarily to discredit
the US. The public announcement emphasized. that the USSR had agreed to
provide all that Rumania had asked for until the next harvest, and that the
Soviet price was far below that being asked for US grain. In actual fact,
the USSR is making available little more than it has demanded of Rumania
in the past few months for reparations and occupation troops. Moreover,
80,000 tons will probably not meet more than 25?Ja of Rumania's needs until
the harvest, which itself is expected to be only 50~, of pre war.
In addition to providing only slight imruediate relief, the Soviet
action in no way solves the basic causes of Rumania's critical agricultural
situation. The small quantity of food involved and the timing of the trans-
action indicate, therefore, that the USSR is interested primarily in nullify-
ing the political effect of US grain shipments to Rumania and in attempting
to counteract the Marshall proposals by showing that the USSR "takes care
of Sts own."
Soviet Plan for Inte~rafcion of Satellite Transportation
The recently announced Soviet-Rumanian railway agreement proba-
bly represents one element of a far more extensive plan. There are indica-
tions that the USSR intends shorily to integrate all Satellite communications
systems under one centrhl .authority. A multilateral Satellite air-transport
agreement has been discussed, and it is clear that strict Soviet control of
all Satellite air policy has been consistently exercised. While details are
lacking on Soviet inten#ions with regard to merchant shipping and inland
waterways, soffie features of the plan for railway development are now
available.
The USSR i.3 insisting that the existing road beds of key rail lines
be widened so that transformation of the actual trackage to the wider Soviet
gauge can be made with "incredible'] speed if res;uired, l~or the present,
however, the USSR apparently prefers the narrower European gauge for
Satellite lines because it permits the use of European rolling stock and thus
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'a'c~~~~ ~~~~~~~~~. ~'~~~' ~~ ~~~.~~~a~ ~~h~~~~~. ~~~~~T~ ~``~.~~ Ass ~~a~~~ ~~
~~ ~~~Y~ why ~~~~i ~~~ ~~ ~x~~~~ ~~~ ~ ~~~? b~~~e ?f ~t~z~~-
~~~
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~h~le ~ ?ff~c~~.~ p~bl~c~~q acc?~g~np a pr~g~?~~a'~ a?~e m
~~nt effip~na~~~~s i~~ 6`~daa~~'~~~~a~s9 ~~~~~9 ~ a~~a~ effect ~~ ~ ~1
f~ ~.~tflq~ ~~ ~c~ea~e a ~~ffi~e~ ?~ S?~~~ wc~rP~er~ ecffi~letef~ ~a~
g~~e~~aent c?rr~puY~f~n. Y~u~nu c~~~c~?fpted t~d~e~ ~~~ p~~g ~~~
~~.ffi~D1~9 ~T~ ~?ffi~~~~d ~.~~~~' '~d~ +~?3'k'~~9~~~~?~ ?F ~k'~~IC c c~~n ~ ~? wCei'~:
w~e~e~e~ d~ected fm~ a ~af~f~um of f~a~~ ~~~~.~<
?~.~
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~'AP. EAST
Oppositioga in the ~'E~ to ~'~panese ~.ligag
The problegn ?f ~'ap~ese whaling in a Anretic represeza~
one of the very few ~ur~stiogas on which t,.he Ear Easte~a ~?ffir~ission
has been unab~.e t? reach agreeggaaegat. a 9 ~~ae, the ~S igaf?r~ed ~?ep-
a?ese~itatives of ~?~?way, Ausalia, New Zealagad, and the [TIC that, des-
pise their protestsy S~AI~ would be auth?rized to send a second japaneffie
~ag~ed whaling e~ped'r~tion to the ~a~i~rotio. The igategasely bittes? oppo-
siti?n led by Australia to this relatively uuAnaiznportaaat matter is caused
partly by a fe~.r that a precedent is being estab3ished f?r commti~aued
~s.panese .Aaat~.rctic wl~.Iirag. N?t ogaly do all f?ur ~overgag~ents reg~.rd
this whaligng as ~. cora~g~erc~.al fhreat~but Australia and New Zealand
~eogasider it a dagagerous se~aarity threat. ~iow~~ver, the lJS ggaai~a~.ins
4h~t this e~peditioga, like the omme last winter, is a purely. tegga~rr~.rq e~-
pei~ient designed to provide foods and oils vital to ,~apaga which the TJS
w~ruYd othea?~ise have to supply.
.~ustrs.Yi~9 New Zealand, end the BJ~ carried fiheir protest to the
~'~C ign tine fo~?m of a paper, int~??duced by?the~llR, which woagld pr~?ohibit
all open~sea wh~ligYg by ~e p~.p~aese. A.ll a~.~ners of the ESC v?Yced
theY~? support of a p~?ogsosal, except the '~3S which refused t~ alter its
posi~ti?n. Ramer than force ~ ~~ ~~t?, t~~ ~~ s~~gest~~ ~cti~n ~~ st-
po~+aed.
Cnese prospects in a~3agachuria
doss of R~agachuri~. bef?re tine enai of 197 reffiafns ~. real possi~anlity,
e?e~. thougtn ~e recegat large-scale ~hfnese Couaaist ?ffegasive appears
to have r its coaarse. During that ?ffegasi?e, a potegntial of Chixnese Cogn-
rn.st forces din terms of rraanp?we~?, ~augaitiogas, food, troop. morale, agacl
popular supports is belie?ed to ha?e igacreased t?a large degree. at tae
e~ense of tine Natiogaalist potega~al. Any serge-scale g~aovegnegat of Nation-
alist r~pl~.ceg~aegats egad supplies fr?~ Nasrth Chime. is c?gasidered ~agalikely.
~?he ~3ati.?gaalist p?sitioga in IJorth ~han~, is also precarious, a?s a result ?f
persis$egat ~?an~unist ~.ttacks on key raiA lines and ports egad apparegat
sho~?tages of rationalist ggapower ~.d epnaegat. There is, thus fa.~r, gao
sig~a tinat a Central Co?eregat has axay deginite igatentiogas of rectifyigng
the fugadaa~negatal weal~aesses of tpae Natiog~list military seed civil sti?a-
ti?n iga R~agach~iria m- an ~~igais~ation which has played igato Coffina~ist
hands by its bugagli gnilitarg~ tactics and by its e`p~f-gger9N attempts
to donaigaate and exploit the gaati~e lVtanc~a~riaga populatioga.
o~-
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~'EST'ERY~ ~EIS~ERE
Iraa~~.e~t ~?1ttt~al ~~p,~fs A~~'~nt~~
Pei?n'~ ttr.,~tq ~~~dt~ttt~i cg~?gt.~ts ~~a~,~~?~~idp~t ~y~s,,~, ~gent~6a ~yp~,,T~~~~
~~~~ .~~A4~.~? ~~~~.' .@""~'~'-~$~.F~.'~t~ ?A XL~~~~~~6~Y'i~9~ ~~FL~~~~,.AISG~..d ~p2r~IL~?~~ &.72ii&Y1,
~~~ ~t~d~. ~w~~? ~.~ ~.1~~ ~~~?~~.~~ P~estd~~t ?t tie ~~~~nt~~ ~d~
~rs~~?~t~~ I~.~tatsat~ j. ~~~ SEC?~~ ~ ~e~~l It~~~ in ~, ~f~r, ltc
d~~a~~ aD~t A~~~a~t~ ~~~~?~~~; ~lt~~. ~lir~.~a~a, w~~ ~?~' any A~?g~~-
t~~~,s~~ad~~li~~{~-- ~~~~~~ ~?r~ t~, Il~~~~td~~t ~~~?~ ~~s~i~ -- tae
ffia~~~d ~r.~~:~a tPa~~ ~?~~~a~~a~t ~~~~t~~t ?~ b~a~I~~~s aa~d t~~,.d~, is
u~d~~. ~.t~k a~~t ?~;~ tz~ ~I~~~~~ t~~d~tt~~~lly ~~s~d t? ~ g~~~~aat ,
yy^~ve~e~gt~yg bit ~.1~? ~p,~gt~p,~ ~?@~~.-.~~d .Qa~P~g~tta~aa~i~t'pp,~~~~~.~~a-~~ts wife t~~y~
%'~~??~ ~i~~.~41~.4?~. dl ~~ 6 ~1`i?~.fL~~'~'[4~~~ y?, f i~r'+i 'J6L~~.~'~'~a~9?~~d Y.Y4E~ ~~ ~? ffi~`5~.~-~4 ~~6
~~ ~?~~t b~ ~ ~e~~nt ~~~~~.~. gat t.~~ ~,t~?a~~~i~t aaer ~'e~.~~~? ~.~ G~f
cif P?~tc~ ~ ~~~~?~ ~.t~?e~, ~.c~~u~~ ir~~d~ ?~ ~at~a~~a~~~at affid ~s~t.
~~?~ld t~~ d.~~~.te ~~a~t~n~e ~aa tt~ A~ ~~~~t f?a?~, tt wtAl ~?rce ~~~?n tc~
c~~s~ tr~~e~~ tie ~~~A~e~d~~n~ ~a~~f?~a~ end thus ~~~~igat~.te ~ ~~~~t
~?Atti~~.l c~?isf~ ~~~ ~i~ ~~~~~st~t~ t? a p~~~fld~~~.
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SPE~~.~.~ .~.R'~~~LES
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E~ OE ~ Sg~IT.~?I`~O~' ~dTJIA
'~lae di~~isi.oaa oft India, in acco~?dance with the ~ia;eroyDs plea of
3 Ju~ae 19~fi, ~~.s thin fa~? pro~:eede~ without undue disturbance, but sevez?al
factors of insa~ediate dan~e~? to the pea~;e of India sill e~ist?
In. essence, the new pZaa~ ps~avides anerely that tl~nose portions of
India, whici~ a~~e ?nn~vil.lin~ to participate ire the ~~as~itueut .~sseaxably ,
created unde~? the easZier plan (of ~~ ~iay 1.946, array establish a Con~tia
tuent A ssea~ably of the~~s own with sinniZas pow~ess, and heaace mat aaa~aority
will ~ transfesra~d by the to tWO poZiticaZ eantitfes~~the iXngon of media
(or FZiaadustaYn) anal l~akistan~0satlne~? t.~~aaa to a sin~Re waican? 14dore?vea?, in
order that the ytsansfes fDf iR?we~' may tame place Within the newt few ffionths,
rather thaw ia+i mane 194 as pse~ously intended, the new playa provides that
Risadust~ a~ad ~i~tan shall ilraitiali,y have dominion status, but it eanphasi~es
the right of either to decla~?e itself ~, free and independent natie~ at any time.
'l'lae procednare wh+~reby the ~~asio~.s areas away hfldicate their pre
fereance fo~? inclusion in ~iindnstan or ~?a3~~.stan is set fo~?th in detail in the
? place. ~arsuaant to the plan, the I.~e~islative ~sseanblies in the ~anjab and
in den ha?e determined that these t~so provinces shale be divided into
Moslean and Rindu aa?eas. thus, apero~innately three-fifths of the lajab,
coa~sistiua~ of the anoa?thern and westesan portions of the psovicace, will bece~nae
. part of Pa3cistan, with the remainder included in Flindustan; similarly, apm
pro~ianately two thirds of Pen~a.Z, ,coaasi.stiIIa~ of all beat the southwestera~a
poA?tion of the provfnce, will become past of Pa~.staaa.
~ilhii.e tine division is eeluitable on the basis of the pricaciple of self
deterr~afnati.on, the econoanic weaess of the 1~akistan area has been increased
$hrou~h loss of th$ g~?eat post of Calcutta and the a~aore featile section of the
jab. ~nfoateZy, too, it has been. iffipossible to partiti~u the ~ainjab
i8a a a~a~e~? which does not leave in each new do~rniaaion about half of the
foul anilliocn Sildas sesidin~ in the larovince. the Sil~hs ha?epeacefully
accepted the decision, because the ease most sacred to theaa~ re.hZS iaa
I~industan and because they realise that no othe~? axa~ner of partition is
feasible. they hive, h?Wevex?, coa~naenced a~itatioan fo~? aan autononcaous
Sikh state (concnprisin~ s~nost of the eastern jabs within Rfndtastan and
hav+~ proposed a tr~nsfen? of Sikhs froffi those asses to be izaclaaded in Pakis??
tan. WtA.ile it is not expected that a~it.ation for ~ autonomous state will
bec?nae acs ia~aaraediate source of trouble, this dissatisfacti~ away later
cause seriox,~s difficulties ~vlaich can invol?e both Pakistan aa~d Rindustan.
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Of the re~a~.nh~~ areas ?rially cl~.ie~ ~y ~e ~~sleffi ~~~.~
f?~? ~~, Sid jai ~aluck~ista~ ~~~~, ~.ticip~.te~, fcrma~y ~~eclared
their p~?efference f?~ ~a~ist ~~~~, with a except~~ ?f ~ pre~~~i~
~a~xtly ?~~.~~ ~is~rict ?f Sylh~t, a~~ace~at t~ eastern ~~~, was all?tted.
tQe ~~u ~$, acc~ar~a~ce w^~th ~h~ wgshes ~f the past .~~rity ~f its
i~iia~.~ait.ts. ~ refere~~~~ is t? ~~ ta~e~ i~ Syli~et t? permit its i~c~rp~ra9
tip ia~t? ~a+,~ista~ off, as is es~pecte~, .th~.t a~c~~ais with the wishes ~f its
i~ha~ita~ts< .~ refere~~;~~ will also ~~ meld i~ the ?r~h west Fr~tier
~~?ce. ,
~'~~ latter ~~~~~ still c~~stit~Qes ?~.~ ~f ~e ~~~ spas
~~ia.. Y~espite a ~~~ ?sle~ g~g~g~tis~., it has ~.t present ~. ~~~ress
party ~~ve~?~~ent. R~wever, level?pe~ts ~e~aera$ly tkre~?ut i~adia
aa~t~ strc~~ p~??pa~a~a.~i~i~~ ~~- ~~~~,~ sy~pathi~ers have s~ficie~tly i~-
crease~ ~~.le ~ se~ati~e~t within the ~~?ce ~? ~~ it apparent
t~.t the ~~~~~~~ ?f the preset ~eslaf~~.ve ~sse~~ly ~~ leer ~?ep~ese~t
the feeli~~s ~f ~~~ ~a~~rity ~f the p~p~i.ati~. R.e~.li~iffi~ that~ti~e pr~9C?~~ress
ele~e~t ~ be successful ~ the referees, ~h ~h~~l ~haffar ~ha~
~rs~~~~ci~.l Chess ~~.rty ~.~~.~~~) h~.s ?~ced that his pay wi~i b?y-
? ~~~ it ~ will ff~ht f~:~ ~ crea~ti ?f a~ i~~epe~~e~t "P~.th~ist~.n~
~flt~~a a lack ~f c~nsiste~cy ~? :~ lx~~ia, Ca~~hi aid Nehru-mwhe~ f~ all
~her:? i~astces ha?~ ~e~~a,~ce~ any te~~eucy t?ward the ~~,li~ati?a~ ~f
Y~di~.--support this sta~.~. Y~? cl~ubt t? a cster~ati ~f Ca~dhi aid
~eh~a, .~f~hasai st~~ has als? st~?~;ly iu~icat support ~f tha; free Patha~is-
ta~ ~~ve~e~t. ~t has ~x~.i~t~,i~e~ ~t ~ ~~~ t~ ~ ~~?itish. ~?rei~ Mice
t~aat the iahita~ts ?f a Pr?~~ ~,~~ ~,f~h~s, that tk~e ~~~vi~ce was ~-
nexe~ by the British up~~ the "dise~~er~eutgn Ag~ha~~sta~ f?ll?wi~~
the British-~.g~&~~a wars, ~ that the p~pulati. ~f a Pr?vi~ce which has
had ply ~.rtificial cectfl~ with Nadia pr?~aer shld be ail?we~ t? chi?se
i~~epe~aden~e ?~ rem t? ?Bthe he~?l~ ~f ~f~ha~ist~.Ae
~s the Cress str~~~ky desflres that lz~dia will eve~tu~.lly he re~
united, Cass supP?rt f?~? the cre~.tia~ ?f a free Fath~ist will aa~ded-
ly di~ish ~ vied ?f Af~ha~ist~s attide aid the p~ssi~ly receptive at-
titude ?f the A~,tlia~s aid meter trihes~e~ toward i~c~rp?rati~ i~t? ~f~taa~is-
t~. ~'hi~.e c~~sidera~le ~lshed ~~.y ~r~cur i~ the wear fore within the
Pr?vi~ce, t-ae d3sc~~?ders will A~??~ly ~e l?ca3, aid acihere~ce ?f the pr?ei~ce
t? F9al~ist~ appears certai~+. At s?e later time, seri~~ns tremble may be
expect fr?ffi the ~?rth west Pr~~atier tribesffiera.
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~~thQ~ ~se~3e~ers a~,~ ~I?e~ heci~e als~a ~~ctesi ~ ~~~~
~e~g dema~c~.#f~ of tie ~ev~ ~s~ar~a~ies ~ ~~tR gt~ ~e~ ~s~~ea~me~ats
be cane eperati~A. ~`~aese s?r~e~s, hr~~e~er, aye YiP~e~ise e~eci tm
rexrta iewaYi~e~.
~"~~ ~?.3.'~''~t~~~ ~~ ~~~~ $3~ ~~~ ~~`~.3~~:ea~ St~t~S k:~s tYt1~t~'S t~'Le reFradm'i~g
se~ree ex immeate a~cY series ~is~e~a~te~. `the egress Pa~rtq ht~Y~ that,
at f~~e termi~at~~ a~ ~r~tish ~a~?ame'~~t?~y, eaeh state mast ~cai:~ ~e ?f tae
tie d?am~#es the ~esbem ~a~~ep ~~e ether ha~~, II3aY?t~fTiS that eaCt~
state i~ i'ree t? ~e as it Yi~es., e~e~a to re~~~i~~ i~aa~e~e~ade~t if it sa~ chimes.
V~hiYe i~~icatieras a~?e th~.t m+a~ ?f the s~~te~ ~iY~ ~at~ k~hadust2~ er sta~a,
certain St thew ~netahlq Y3tq~eraha~ ~~~ `~rava~eere~ have refcase~ a:o ~?i~
eigher cio~i~.
dram ~. Ye~aYistf c ~ei~at e~ ~e~, the cYaim s~f a~q state to ~eeYare it~
seY~ it~cie~e~?de~et ~e~a~ .ear e~tirelq ~.~sti?iahYe. ~`he ~4a~itRSh, ~a~aile eie-
pYc~ri~g ~q~.er?al~ac~`s a~cl ~'ra~a.~ccare`s at~i~~e, m~.f~taiai a~Yq tthat ne suite
z~ay remain ~$thi~ the E ~sgire e~ce~ by ee~et~e~'atiexa ~Yth efther v~ the
e ~?mi~aie~s. ~'r~~m the British ~t a~ ~~e~, a mattes is ~e ~rhieh mist
Sae res?Y~eei by ~e stateda gc~~er~~zeaxts ~?~ khe ~e~Ye cf lbs.. ~ lf:Yq~.eraha~,
~`racex~e, ~~ rather stages atic~YZt ~~ amt attit~~e, the ~essfksRity cad
st~'$.Ye $I'a the ix~~cieei~ate ~t6Ts$'e a~aa~l '4-.~i~~s.
a YQ a
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~ s
S1NQ~-SOi7IET REDATI4NS
Faced with a critical ar~ilitary situation in Manchuria"and North
China and with an iFnpending_ political-~eonomiC crisis of unprecedented
severity, China's Central Government last anonth dropped all pretense of
treating the Chinese Commr~nist problem as a purely domestic issue and
took a fi~?m stand against Soviet .encroachments upon Chinese sovereignty.
Z~ey Chinese governanental and military officials have recently charged
that Soviet aid to Chinese Ce~mrnunists and Cuter Mongolian forces and Soviet
tactics regarding Dairen had brought on China's present plight, and pictured
China as the scene of an international crisis that rrtfght lead to a third World
War. Cn 25 June, the Chinese Government handed to the USSR its strongest
note to date on the Dairen-Fort Arthur issue, reasserting its right to dis-
patch troops to that area. {It is believ7ed that these effiphatic Chinese actions,
which appear to have been taken in a. spirit of defeatism approaching despera-
tion, were motivated mainly by the desire to shock the US Government and
people into eactending ennergency financial aid military assistance.3
There are Hove certain indications that the USSR, reacting to the new
Chinese attitude a.nd prabal~~y taking due no4e of recent US Government an-
nouncements that surplus~am3nunition would be sold to China and that spe-
cific Chinese projects wouici receive Exirn~ank cp~sideration, may have
decided to stiffen its own attitude toward China; o~ ~ at Yeas~~ to convey that
innpression to China and the US a.s part of a "war of nerves'?:
(l)_ During the first session of the UN Econo~.ic Commission
f?r Asia a~iri she ~'ar East (in Shanghai, ati-~5 june}, the.Soviet delegation
vacs noticeably coal toward the Chinese, consistently. sided with the Indian
delegation on controversial subjects, and attempted to block eldction of a
Chinese as ECAFE chairma~i;
~(2} During the period I4-2? june, .local Soviet officials i$ Shanghai
reportedly expressed the opinion that: {a} the recent recall of Soviet Am-~
bassador Petrov from Nanking to I~ioscow was part of "Moscow's routine,
cf changing officials when changing policy, " {b} the new Soviet "policy"
would be to counteract that of China and the US, with a possible`~howdown"
to indicate Soviet determination Hat to relinquish its position va China, Korea,
and japan, and (c) they themselves would subsequently be recalled as a re-
sult of the change in Soviet attitude. The. officials further asserted that the
chairman of the Soviet Residents Association in Shanghai was to be attached
to a newly fornried special commission in Khabarovsk (north of Vladivos#ok
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?~ ~.ia
SET
f ~ ~i~i~~ s s~;~ ?a~~I~ ~~~~ d~~ ~~?~~.~ ~~ ~~~~~ ~iCi~~~as ~a?e~. Cap.. 9 a
~~~~s ~~e~ mad ~~~~ ~~.~~i~~s: c ~~~~~ ~~-~~ i~~iii~~ ~ Chi ~~~~~~,
p~~~i?~i~I ~~S ~~@.4 ?~ NAYtic~?~~~~;~ .~;~,Yi(~~~.~~5~ O
ea
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