CURRENT INTELLIGENCE BULLETIN - 1952/01/16

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02046525
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: May 24, 2019
• Document Release Date: May 30, 2019
• Publication Date: January 16, 1952

Approved for Release: 2019/05/08 CO2046525
SEC Y INFORMATION
16 Ianuary 1952
Copy No.
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS.
DECLASSIFIED
CLASS. CHANGED TO: 73 C
NEXT RE-VIEW DATE:
0A6
941
DATE REVIEWER
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SEC INFORMATION
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3.5(c)
SUMMARY
GENERAL
Preliminary Commonwealth finance talks show realism and
determination (page 3).
FAR EAST
2. Communists issue new regulation for handling prisoners of war (page 4).
3. Plans for aid to the Viet Minh formulated (page 4).
SOUTH ASIA
Indian Communists reportedly to move headquarters from Bombay
to Calcutta (page 5).
NEAR EAST - AFRICA
6. Mossadeq warns of imminent financial collapse (page 5).
B. Reuters correspondent implicates British officials in Iran (page 6).
7. Egypt's internal situation worsens (page 6).
EASTERN EUROPE
8. Czechoslovakia lacks hard currency resources for purchase of
strategic goods (page 7).
9. Buying wave sparked by Radio Free Europe sweeps Prague (page 7)0
WESTERN EUROPE
10. Possible Austrian Cabinet shifts reported (page 8).
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GENERAL
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3.3(h)(2)
1. Preliminary Commonwealth finance talks show realism and determination:
In the technical dicussions preceding the Common-
wealth Finance Ministers' meeting which began in
.1.-iaridankon15 January, the Canadian delegation
noted a unanimous conviction that the sterling
area must solve its own problems, and the recognition that dollar aid from
the United States would not provide the solution.
Accordihg to the Canadian officials, there was
agreement that convertibility of sterling should be restored as soon as
possible, a goal previously regarded by many sterling countries as very
distant.
The emphasis in their specific recommendations
for dealing with the short-term dollar crisis fell on domestic deflationary
measures, rather than upon purely restrictive devices, such as direct cuts
In import quotas. Fin41 decisions on these suggestions will be taken during
the Ministers' meeting i now in progress.
The United States Extbassy in London comments
that "moderate" optimism over the long-term outlook for Britain and the
sterling area is justified if the Canadian observations are borne out in the
Ministers' talks. In the Embassy's view, the critical question is whether
the conference will find the means to restore world confidence in sterling
within the next six months.
Comment: This report tends to refute earlier
widespread comment to the effect that serious strains had developed among
the sterling countries to the point of destroying the solidarity of the group.
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TbPSECET
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FAR EAST
2. Communists issue new regulation for handling prisoners of war:
3.3(h)(2)
An order on treatment of prisoners of war from
the Korean Commander in Chief, dated 7
December, provtded that no prisoners of war
were to be released, that proper records on
prisoners should be kept, and that currently held prisoners, "not as yet
registered," should be reported to headquarters. The order further out-
lined the administrative procedures for handling of prisoners.
Comment: The issuance of this order eighteen
months after the outbreak of war strongly suggests that Communist unit
commanders have enjoyed a wide latitude in their handling of UN prisoners.
It is also apparent from the order that the Communists have no record of
some of the prisoners captured to date.
�
3. Plans for aid to the Viet Minh formulated:
3.3(h)(2)
A conference of Chinese Communist military
leaders to plan activity in western Tonkin
during the first half of 1952 reportedly took
place recently at Hokow, across the border from
the Indochinese town of Laokay. It was decided at this meeting, which was
attended by a Soviet adviser, that mixed Sino-Viet Minh forces in the Laokay
sector will be reinforced by local recruitment and that they will receive
forty percent of their equipment from the USSR and sixty percent from
Communist troops stationed in Yunnan.
An independent military headquarters will be
established soon for the Laokay sector. Twenty percent of the advisers
will be Soviet officers.
Comment: Many reports have been received
detailing the build-up of mixed units in western Tonkin as well as the
provision of Soviet materiel and the presence of Soviet officers.' None of
these reports has been confirmed, but any Soviet participation in the Indo-
china war would be easier to conceal in this remote area than elsewhere
in Viet Minh territory.
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SOUTH ASIA
4. Indian Communists reportedly to move headquarters from Bombay to
Calcutta:
be scoring successes.
The Communist Party of India will move its 3.3(h)(2)
headquarters from Bombay to Calcutta within
the next several months. Communist activity
appears to be considerably stronger in the Cal-
election returns indicate that the Communists may
The US Consul General in Calcutta feels that in
view of Communist agitation in the frontier areas near Sikkim and Bhutan,
increased Communist Chinese activity in Tibet, and reported Indian Commu-
nist plans for armed violence in the Assam areas near Burma, the establish-
ment of headquarters in Calcutta would greatly facilitate Communist Party
communication and control in these areas.
NEAR EAST - AFRICA
5. Mossadeq warns of imminent financial collapse:
3.3(h)(2)
Prime Minister Mossadeq has informed the US
Ambassador that Iran's situation is desperate and
that without financial assistance government
collapse and revolution would be certain within
thirty days. Mossaereq stated that the government had used up all its available
funds, except for those received from the International Monetary Fund, and
that the government owed money for civil and military salaries and supplies.
He insisted that, although he had not yet discussed
the sale of Iranian oil with the USSR, he would have to do so if he were not
assured of American financial aid. He suggested that the Ambassador inform
Washington that if he did not receive promise of such aid within five days, he
would have to make a deal with the Russians.
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Comment: MOssadeq has not exaggerated his
financial difficulties, but his warning of imminent collapse appears to'
contain elements of blackmail. In making his plea, he was presumably
motivated by a realization that a clash with the Majlis over the devaluation
of the currency, a possible alternative, might bring about his fall.
6. Reuters correspondent implicates British officials in Iran:
The Reuters correspondent currently under 3.3(h)(2)
arrest for circulating false reports derogatory
to Iran is being held incommunicado and has
made "confessions" mentioning four members
of the British Embassy staff as the sources of his information. The British
believe that he will be given a "state trial" along Eastern European lines,
probably before the parliamentary interpellation of Mossadeq scheduled for
21 January. Iranian Minister of Court Ala has stated that the correspondent,
who was "being encouraged to talk, " has made statements which reflected
adversely on members of the British Embassy staff.
Comment: Those British Embassy officers
mentioned in the 'confessions," individuals with much knowledge and exper-
ience in Iran who have been concerned with political reporting, have been
suspected by the Iranians of inciting the tribes to revolt.
7. Egypt's internal situation worsens: 3.3(h)(2)
Continuing incidents in the Suez Canal zone have
justified the anxiety of King Farouk's top palace
adviser over the steady worsening of Egypt's
Internal situation. The French Ambassador in
Cairo points out that, while the Egyptian Government maintained control of
the country in the first months following Egypt's denunciation of the 1936
treaty, governmental authority is breaking down. 3.3(h)(2)
the widespread
popular animosity toward foreigners is also being directed against
Egypt's upper classes, and criticism of King Farouk is increasing. Demon-
strations which followed the reopening of Egypt's universities have caused
the government to consider closing them again until next September.
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3.3(h)(2)
terrorism continues in the Canal zone,
agitation throughout the country "tends to become a permanent phenomenon."
Comment:
recent demonstrations in Egypt have been anti-palace in sentiment and that
the Egyptian situation in general is steadily declining. 3.3(h)(2)
EASTERN EUROPE
8, Czechoslovakia lacks hard currency resources for purchase of strategic
goods: 3.3(h)(2)
Czechoslovakia has "exhausted its resources"
and purchases of strategic goods are being slowed
down as a consequence, according to the Czech
Ministry of Foreign Trade. The Ministry asked
for suggestions from its commercial represent-
atives in India on means of obtaining ready cash and suggested that Indian
merchants should pay cash for Czech goods usually covered by letters of
credit. - 3.3(h)(2)
Comment:
US economic sanctions, which deprived Czechoslovakia of most
of its dollar resources, have dealt a serious blow to Czech clandestine
purchase of strategic goods, such as electrolytic copper, on the world market.
Because hard currency supplies for such purchases have now been effectively
reduced, Czechoslovakia will be forced to work on a hand-to-mouth basis.
9. Buying wave sparked by Radio Free Europe sweeps Prague:
A buying wave is sweeping Prague, set off, 3.3(h)(2)
according to the American Embassy, by specu-
lations on the possibility of a currency reform
broadcast over Radio Free Europe. Purchases
are so far selective, and buyers have concentrated on textiles, gold and
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diamonds sold on the free market. The Embassy feels that the broad-
casts may provide the Czech regime with a scapegoat upon which to pin
the necessity for more stringent economic measures against the population.
Comment: Rumors of an impending currency
ref orm have circulated for several months in Czechoslovakia. A buying
panic swept Budapest earlier this month. Economic conditions in both
Hungary and Czechoslovakia make a future currency reform probable.
WESTERN EUROPE
10. Possible Austrian Cabinet shifts reported:
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The directorate of the People's Party re-
3.3(h)(2)
portedly decided at its 9 January meeting to
replace all party members now serving in the
Austrian Cabinet. The shake-up would involve
the Chancellery, the Foreign Office, the Ministries of Finance, Trade,
Agriculture, and Education, the Office of State Secret ry, and the Presi-
dency of the Parliament. Party Chairman Julius Raa1 has allegedly been
urged to assume the Chancellorship; if he accepts, F reign Minister
Gruber would be replaced by Chancellor FigL
The Embassy cautions that this report may
Indicate persisting uneasiness among People's Party leadership rather
than clear-cut decisions to initiate far-reaching changes.
Comment: If the reported Cabinet changes
were to be confirmed at the party conference on 28-29 January, they would
fortify the moderate leadership represented by Chancellor Figl and Chair-
man Raab. The success of their pro-coalition policy will depend, however,
on their capacity to maintain supremacy while still holding, the party together.
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