CURRENT INTELLIGENCE BULLETIN - 1952/01/14

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02046524
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: May 24, 2019
• Document Release Date: May 30, 2019
• Publication Date: January 14, 1952

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SEC INFORMATION
14 January 1952
Copy No. 4 7
Correction to
CURRENT INTELLIGENCE BULLETIN
(issue of 13 january 1952)
Please change last sentence in first paragraph of article 1, page 3,
to read:
Of this number, 500 proceeded to Tunghsing.
DOCUMENT NO.
NO CHANGE IN CLASS.
1 ' DECLASSIFIED
CLASS. CHANGED TO: T8 340
NEXT RVIEW DATE
AUTHiNHRk-ao
DATE irerf �0 RE-ViEW;7.R
Office of Current Intelligence
CEN'TRAL INTELLIGENCE AGENCY
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SECUR W I ORMATION
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SEC INFORMATION
13 January 1952
Copy No.
47
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO
NO CHANGE IN CLASS.
I DECLASSIFIED
CLASS. CHANGED TO: TS 3 Clew f
NEXT REVIEW DATE:
AUTH: HR 70;a9 A
D AT Elit .11� IREVENER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. Newly arrived Chinese troops reported north of Tonkin border (page 3).
2. Britain plans limited changes in Malayan administration (page 3).
SOUTH ASIA
3. India concerned over Communist threat to Nepal (page 4).
NEAR EAST - AFRICA
4. Iran opens new negotiations for Soviet sugar (page 5).
5. Lebanese UN delegate urges better Western cooperation in Near East
(page 5).
6. Italian Government likely to oppose British recruitment of labor for
Suez (page 6).
WESTERN EUROPE
7. Comment on the possibility of an East German currency reform
(page 7).
8. Adenauer said to be concerned over constitutionality of German
rearmament (page 7).
9. Portugese army and navy officers seized in plot against government
(page 8).
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FAB EAST
Newly arrived Chinese troops reported north of Tonkin border:
Over 15,000 fully equipped troops, mostly
of North Chinese origin, arrived at Fangcheng,
on the China coast just north of the Indochinese
border, toward the end of December
Of this number, 500 proceeded arrersis-thetrarder
4fft-e.--Teeklit. to
Comment: This report supports other intelli-
gence concerning unusual Chinese Communist activity in this locality,
and indicates a growing threat to Moncay, the only border post still under
French control. It is not unusual, however, for northern Chinese to be
stationed in the southern provinces.
2. Britain plans limited changes in Malayan administration:
The British Government plans to improve the
existing machinery for combatting Communist
terrorism in Malaya as a result of Colonial
Secretary Lyttelton's recent visit, but con-
templates no basic policy changes.
3.3(h)(2)
The role of the police in maintaining local
security will be emphasized, and an effort will be made to recruit more
local Chinese for this service. The office of Commissioner 'General in
Southeast Asia will be retained, although a decision regarding the tenure
of its controversial incumbent, Malcolm MacDonald, has not yet been made.
The new High Commissioner for MalayaNwill probably be a military man
"with good political sense, " who will be assisted by a deputyfor political
affairs.
The US Embassy in London comments that the
proposal to appoint a Deputy High Commissioner indicates Britain's
awareness of the essential role political reform must play in restoring
stability in Malaya.
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Comment: Failure to use local Chinese to any
great extent in police operations against the Communist guerrillas has
given the Malayan Chinese a "left-out" feeling, and has encouraged many
of them to think that their interests lie with the guerrillas, almost all
of whom are Chinese, rather than with the British.
SOUTH ASIA
3. Wia concerned over Communist threat to Nepal:
An Indian intention to participate in the re- 3.3(h)(2)
organization and training of the Nepalese
Army and in the defense of Nepal against
possible outside aggression emerged in the
discussions between the Indian and Nepalese prime ministers in New Delhi
6 to 9 Sanuary. The conversations included the questions of air and land
surveys of the Tibetan-Nepalese and Nepalese-Indian borders, military
and police measures to ensure the security of Nepal, road and airfield
construction in Nepal to facilitate the dispatch to strategic areas of
Indian troops, and Indian and Nepalese treaty relationships with Tibet.
The Nepalese Prime Minister, however, told
US Ambassador Bowles that he is not alarmed over increasing Communist
activities in Nepal and that Chinese Communists in Tibet still represent
no threat to his country's security.
Comment: The agenda for the prime minis-
ters' conversations strongly suggests that India has become acutely aware
of recent Communist-inspired developments in both Nepal and Tibet.
In view of the Nepalese Prime Minister's
apparent attitude, there is a real danger that Communist organizations
in Nepal will become so well entrenched and their lines of supply and
communication with India and Tibet so well established that neither the
Indian nor Nepalese government will be able to suppress them if and
when they desire.
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NEAR EAST - AFRICA
4. Iran opens new negotiations for Soviet sugar:
Prime Minister Mossadeq has told the US 3.3(h)(2)
Ambassador thM Iran must arrange immedi-
ately to obtain 100,000 tons of sugar in 1952.
Discussions are going on with the Soviet Union
whereby the latter is to furnish 60,000 to 70,000 tons of sugar in exchange
for all the rice, dried fruit, cotton and other agricultural products which
Iran can spare.
Mossadeq admitted that such a deal would
mean that the Soviet Union would absorb a large proportion of the country's
exports which would be "extremely unhealthy for Iran." However,
Mossadeq continued, any government which did not provide adequate
supplies of important tems such as sugar could not long survive.
Comment: The mass of Iranian peasants and
workers, who so far have been little affected by Mossadeq's
could be expected to react sharply to the curtailment of sugar.
The loss of sugar imports from Britain ap-
parently has created a serious situation from which the USSR could profit.
Early this month, however, the USSR refused to deliver 6,000 tons of
sugar to Iran because the latter could not furnish the 200 tons of raw cotton
required under the current barter agreement.
5. Lebanese UN delegate urges better Western cooperation in Near East:
Charles Malik, Lebanese delegate to the UN 3.3(h)(2)
General Assembly meeting in Paris, recently
told American Ambassador Jessup that the
key to a solution of Near Eastern problems
was unanimity among the United States, Britain, and France. Malik
maintained that half of the difficulties arising in the Near East were caused
137,, the Western pc ot pulling together and that even where Western
coordination had been achieved at the top level, problems arose from the
rivalry or friction among the Western representatives in the field.
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Noting that the Egyptian press exerts consi-
derable influence throughout the Near East, Malik suggested that methods
might be found for circulating American viewpoints through Egyptian
newspapers.
Comment: The difficulty of achieving West-
ern cooperation in the field Was noted recently by the American Minister
in Damascus. He warned that efforts by French or British representatives
to promote their own national interests in the Near East might seriously
hamper the achievement of Western objectives in the area, particularly
efforts to gain Arab support for the Middle East Command proposals.
6. Italian Government lllcelytoopse British recruitment of labor for Suez:
British officials are seeking 14,000 semi- 3.3(h)(2)
skilled Italian laborers in addition to a small
number they have already brought to Suez.
Britain anticipates opposition on the part of
the Italian Government which does not want to antagonize the Egyptians.
Italy is aware of its inability to protect its
nationals if serious trouble develops in Egypt. Foreign Secretary Eden
was told during his visit to Italy that the latter will follow an "indepen-
dent" course but will not take an anti-British position.
Comment: Italy wishes to avoid any Egyptian
antagonism, which might adversely affect not only Italians in Egypt, but
in other Moslem countries where they are an important minority.
Britain earlier expressed its doubts about.
the success of recruiting a somewhat smaller number of Italians to
work in the Suez canal zone.. The difficulty in replacing the semi-skilled
Egyptian workers is a key problem in keeping the Suez base operative.
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WESTERN EUROPE
7. Comment on the possibility of an East German currency reform:
Rumors of an impending currency reform in
East Germany continue to circulate in Berlin and to depress�despite.
Its recent recovery--the value of the East German mark. Although these
rumors have been denied by the East German Office of Information, re-
ports of a secret project for printing new Eastmarks and the admission
of a spokesman of the East zone bank of issue that new bills may be sub-
stituted in the "indefinite future" for old bills are not likely to quiet fears
that some reform may be in prospect.
American authorities and Berlin Central
Bank officials view these rumors with great reserve and suggest the
strong possibility that speculators interested in depressing the value of
the Eastmark may be responsible for these stories. It should be noted,
however, that currency reform accompanied by partial confiscation
would provide the East German Government with one method of maintain-
ing recent extensive price reductions, of preserving the value of the
Eastmark, and of declaring that the economic barrier to unification has
thus been removed.
Some attempts have already been made to
soak up excess purchasing power by increasing working hours without
increasing pay, and by efforts to divert a percentage of gross wages into
reconstruction loans. Such measures,. however, might be insufficient
if, as alleged, East German citizens violate regulations by continuing
to hold large cash quantities of Eastmarks. Refusal of the East German
Government to convert cash holdings in excess of authorized amounts
could effectively remove a potential inflationary threat to the new price
ceilings.
8. Adenauer said to be concerned over constitutionality of German rearmament:
3.
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Comment: The opposition Social Democrats
have frequently threatened to challenge the validity of rearmament legis-
lation. Opinion differs, however, on how the Constitutional Court would
rule in the matter.
. Portugese army and navy officers seized in plot against government:
3.3(h)(2)
The Portt.gese security police on 8 January 3.3(h)(2)
raided the Lisbon headquarters of the oppo-
sition National Civic Organization and arrested
ten army and navy officers on charges of
plotting to overthrow President Graveiro Lopes. The police claim to
have seized documents that will substantiate the charges.
�
The officers involved, all of whom are
either retired or in the reserve, previously had been convicted of com-
plicity in the 1947 revolutionary plot and were recently granted amnesty
by the Salazar government. All had actively supported unsuccessful
opposition candidate Admiral Quintao Meireles in the 1951 presidential
elections.
Comment: Bad feeling, aroused in the 1951
campaign by the tactics of Meireles followers in publicizing scandals
involving high government officials, may have inspired these arrests.
The timing may ik-16;.7ate the government's desire to prevent a repetition
of these tactics when NATO meets in Lisbon next month. The police
have kept the National Civic Organization under observation since last
August, but reportedly had not acted because of insufficient evidence.
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