CURRENT INTELLIGENCE BULLETIN - 1951/07/08

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02003080
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: April 15, 2019
• Document Release Date: April 22, 2019
• Publication Date: July 8, 1951

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8 Tuly 1951
Copy No. CT- 1
CURRENT INTELLIGENCE BULLETIN lo
DOCUMENT NO
NO CHANGE IN CLASS. itr
DECLASSIFIED
CLASS. CHANGLI) T 3 C
NEXT. REVIEW DA TE�
AUTft HR dart70-''
DATE tifui..9 REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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S 1.1 WIM A R Y
USSR
FAR EAST
2. Effect of Korean War on Chinese civilian morale (Daze :3\
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3.3(h)(2)
NEAR EAST
EASTERN EUROPE
5. State Department propose' l conrtermFasures to Oaf's conVictits
(page 6).
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WESTERN EUROPE
6. Togliatti's views on Rattan Communi--ni afier thr' recent eiectii
(page 7).
7. Government moves to bar Spanisl-, lead aJe o ovie -,;�4e maw, 8
8. Comments on Saar Isue (page 8'1.
SCANDINAVIA
9. Social Democrats Wild lead in Finnish Diet elections (page 9).
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Bffeet of Korean War on Chinese civilian morale: 3.3(h)(2)
In a conversation with the US Minister in Sai-
gon,
stated that casualty lists and news of Chinese
defeats were being carefully withheld from
the public. Wounded have been kept out of heavily populated areas of
China proper even at the expense of denying them better hospital facilities.
He added, however, that "volunteers" appear reluctant to proceed to
Korea at this time and he described the general population as disillusioned
with the Red regime. 3.3(h)(2)
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In additidn,the source reported this opposition
lacks any effective means for a successful counterrevolution. Only the
student and some worker groups evince any enthusiasm for the current
regime which apparently is capable of enduring, in the absence of outside
interference, for decades to come.
Comment; The above observations have been
supported by a great variety of sources. A recent report on the arrival
of Korean casualties in thee Shanghai area emphasized the precautions
taken to limit contacts with the local populace.
3.3(h)(2)
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EASTERN EUROPE
5. State Department proposes countermeasures to Oatis' conviction:
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The US Department of State now considers
it imperative to take action against the Czecho-
slovak regime in retaliation for the Op"tis Af-
fair. The Department expresses its views
to US HICOG Frankfurt and US Ambassador Briggs in Prague that, by
giving Oatis an effective sentence of five years and by explicitly mention-
ing his expulsion at the end of that period, the Czechoslovak Government
may have left itself in a flexible position. To take advantage of this po-
tenti(al opportunity, the Department advances the following possible counter-
meagures: (a) an embargo on US exports; (b) the blocking of Czechoslovak
assets in the US; and (c) the denial of military permits for Czechoslovak
travel in Western Germany. In the opinion of the Department, the ban on
military permits offers the best recourse for quick post-trial action. To
this end, HICOG is instructed urgently to obtain British and French con-
currence in this step. The Department also suggests that Ambassador
Briggs might approach the Czechoslovak Ministry of Foreign Affairs with
a view to an exchange of Oatis for one or more Czechoslovaks now im-
prisoned in the US Zone of Germany.
Comment: In a reply to a 28 June Department
of State cable advancing similar ideas, HICOG expressed doubt whether
the British and French Governments Rould concur in a tripartite ban on
military permits and stated that such a ban would create unfavorable re-
action in German business circles. HICOG has also stated that the pos-
sibility of trading Oatis for imprisoned Czechoslovaks is questionable,
bedlutse Prague has shown no official interest in the approximately 100
Czechoslovaks imprisoned in the US Zone, of whom only five or six are
serving terms for espionage.
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US exports to Czechoslovakia during 1950
totaled approximately $6,000, 000 worth of non-strategic commodities.
A ban on Czechoslovak imports into the US would eliminate a source of
hard currency which provided Czechoslovakia with nearly $37, 000,000
during 1950.
liatti's
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n Italian Communism after the recent election: 3.3(h)(2)
At a recent meeting of the Communist Party's
Central Committee, Togliatti delivered one
of the most soft-spoken reports he has ever
made, devoted mainly to an analysis of the
elections. He concluded that the Communist bloc gained votes primarily
because the working and lower middle classes felt that in voting Com-
munist they were protesting against economic injustices.
Togliatti was pleased that the Communists
had been able to escape the label of an "anti-national force." He rejected
the doctrine that the Communist Party's immediate objective was "social-
ist revolution" and insisted that its short-term objective was gradually
to undermine capitalism.
US Embassy Rome comments that Togliatti
feels satisfied as a result of the elections that the Communists may serve
as a disintegrating force, helping-to spread military defeatism, pacifism
nnd lleutrality. The Embassy believes that so long as the less privileged
members of society see no alternative to a party which to them stands for
progress, Communism will remain a fundamental problem.
Comment: Progressive elements in the
Christian Democratic Party feel that social reforms must be stressed,
even while rearmament is in progress. The Italian Government is well
aware of the psychological shortcomings in Western propaganda efforts
and has continued to urge more initiative in seeking to overcome them.
There is a need in Italy for a strong anti-Communist Party which could
convince workers that it represents their interests. The democratic
Socialists appear best able to fulfill this role.
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� .
Government moves to bar Spanish lead sales to Soviet lac::
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The Spanish Governfrient reportedly has .issued
an order on 4 July suspending all lead export
licenses. Henceforth, export sales applica-
tions must be accompanied by a certificate of
ultimate destination. It is rumored among Spanish lead producers and
dealers that US approval of end-users will be required. Meanwhile, 1,000
metric tons of lead conSigned to the Societe Financiere Economique of
Vadux (SFEE), Liechtenstein, were shipped from Cartagena, Spain, on
28 June and are believed destined for the Soviet bloc.
Comment: The SFEE is the most active
Intermediary for Soviet iatellite buyers of Spanish lead. The Spanish
Government's order follows closely upon the visit to Spain 4.FEE's
owner, M. Antonioli. He personally placed the order for an additional
500 metric tons of lead sheet, and frankly admitted to Spanish officialF3.3thw2)
that the lead was destined for Czechoslovakia -- the first clear proof.1`
that the SFEE is engaged in this type of East-West trade.
The Spanish Govern-
ment to date has allocated lead export licenses either under compensa-
tion barfer-agreements for scarce materials or to buyers offering the
highest price; it has met all US objections concerning lead shipments by
disclaiming knowledge as to their ultimate destination.
8. Comments on Saar Issue:
' AcrirnoniotiS debate-oVei. the Saar question,
generating ill-feeling between Germany and France, is bound to continue
until a German peace treaty or other agreement makes a final disposi-
tion of the territory. This much has been made clear again in the renewed
debates over the Saar in the West German Bundestag, and in a recent
speech by Jakob Kaiser, the Federal Republic's Minister for All-German
Affairs, calling for self-determination for the people of the Saar.
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While the basic question involved in the dis-
pute is whether the area will again become part of Germany, the immedi-
ate question raised in the latest -phase of the debate is that of democratic
practice in the Saar. This phase egan in May when the Saar Government
banned the Democratic Party (DP) on the grounds that its agitation for
reunion with Germany aimed at u setting the present order. Chancellor
Adenauer reacted hy asking the A lies to restore democratic freedom in
the Saar.
There is little room for doubt that the French
discourage the free develt5pment of the will of the Saarlanders. A US
representative in France estimates that 80 to 85 percent of the people
would vote in favor of complete reintegration with Germany if a plebis-
cite were held. , Yet even the possibility of holding a plebiscite is a for-
bidden topic ofdiscussion in the Saar press. Still, it is ironic that, as
part of its campaign for democratic practice in the Saar, the Borin Gov-
ernment Should find itself defending the DPS, which experienced a very
undemocratic putsch last summer and has been identifying itself more
openly with the interests of former -.Nazi's. The DPS appears to have
received a subsidy of 800,000 Deutsche Marks from Jakob Xaiser.
� Chancellor Adenauer has expressed the hope
that initiation of the Schuman Plan will automatically solve the Saar pro-
blem, but it is precisely this prohleri which at the moment threatens
German acceptance of the Plan just as it threatened German acceptance
of membership in the Council of Europe last year.
SCANDINAVIA
Demo rats d lead in i
US Legation Helsinki reports that prelimi-
nary results of the ecent elections for the
200 seats in the Fi4nish Diet place the Social
Democrats in the lead, although the .Comm
nists iained a total of seven seats leaving
them the third. most important Finnish party.
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Comment: Preliminary Finnish comment on
the elections attributes the Communist gain partly to the apathy of the
center and right parties in getting out their votes; and partly to public
dissatisfaction with the coalition government's ineffective anti-inflation
policies. With the Social Democrats now the largest party in the Diet,
It is probable that a coalition government will be formed under a Social
Democratic Prime Minister, with the Communists kill excluded.
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