CURRENT INTELLIGENCE BULLETIN - 1954/09/10

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03000938
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: September 10, 1954

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Copy No.
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS X
DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: 2.010
AU1H: HR 70-2
DATE. 7 '570, to REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
60-r
10 September 1954
3.3(h)(2)
3.5(c)
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NEW
Nair'
SUMMARY
GENERAL
1. British suggest early relaxation of China trade controls (page 3).
FAR EAST
2. Chinese Nationalists reinforce Quemoy garrison (page 3).
3.
SOUTHEAST ASIA
4. Vietnamese premier takes steps to counter coup plotters (page 5).
NEAR EAST - AFRICA
5. Iraqi Communists reported plotting overthrow of Nun i Said (page 5).
6. "And then there were nine"--Comment on Egyptian council change (page 6).
WESTERN EUROPE
7. USSR seeking to encourage independent French policy on Germany (page 7).
8. Eden says German problem requires "European" solution (page 7),
9. Unqualified endorsement of German rearmament by British Labor Party
seen unlikely (page 8).
LATIN AMERICA
10. Guatemalan president may call for election of a constituent assembly
(page 9).
* * * *
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GENERAL
I. British suggest early relaxation of China trade controls:
British deputy under secretary of state
for foreign affairs Sir Harold Caccia for-
mally asked a senior State Department
official at Manila whether the United States
would oppose modification of the controls on trade with Communist
China if the Chinese refrain from further aggression.
Caccia said his government anticipates
strong pressure from both Laborites and Conservatives to relax
controls as a result of the Attlee-Bevan visit to China, and considers
it important to discuss the matter with the United States before par-
liament reconvenes in October. He said those in favor of relaxation
would argue that the Korean war, which led to the embargo, is now
ended and that there is no longer any point in maintaining separate
controls on trade with China.
Comment: This demarche indicates that
Britain is now probably prepared to press for a new China trade con-
trol list no more severe than the recently eased controls on trade
with the USSR and its European Satellites, Japan, Portugal, West
Germany, and possibly some other countries which comply with con-
trols on strategic trade with China would probably support the British
position.
FAR EAST
Chinese Nationalists reinforce Quemoy garrison:
One Chinese Nationalist infantry division and
a 155mm howitzer battalion embarked for
Quemoy on 8 and 9 September. Another
infantry division and a brigade of marines
have been alerted to stand by.
In addition to these reinforcements, the
American Military Assistance and Advisory Group is recommending
that three battalions of 105mm howitzers and a Mttery of 40mm anti-
aircraft guns be sent to Quemoy.
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Comment: About 8,000 men of the 19th
Division, an American trained and equipped unit, and approximately
1,000 artillery troops are involved in the movement, which should
take approximately 24 hours. Their arrival on Quemoy would in-
crease the garrison, now reported at 42,000 regular troops, to 51,000
regulars plus about 6,000 lightly armed guerrillas.
At present only five of the 149 Nationalist
guns on Quemoy can reach targets on the west side of Amoy Island,
and the arrival of 12 more 155mm howitzers would boost Nationalist
capacity for fire on these areas.
3.
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SOUTHEAST ASIA
4. Vietnamese premier takes steps to counter coup plotters:
Premier Ngo Dinh Diem arrested two
officers of the Vietnamese general staff
on 8 September on suspicion of attempt-
ing to launch a coup,
Chief of Staff Hinh, a
bitter opponent of Diem, initially ap-
proved of the arrest, but later demanded
custody of the officers.
Meanwhile, Diem is attempting to reach
an understanding with the Cao Dal and Iloa Hao sects and, al:word-
ing to a Cao Dai spokesman, will receive their support if he accepts
their demands for certain cabinet posts. Diem is reported to be
impressed by the apparent sincerity of these groups' efforts to
come to terms with him and also by their evident disgust with the
greedy demands of the Binh Xuyen, the gangster organization that
controls the police.
Comment: The manner in which Diem
handles the case of the arrested officers will largely determine
whether the army will throw in its lot with Hinh and thus increase
the possibility of a coup attempt.
An ad hoc coalition of the Cao Dai, Hoa Hao
and Binh Xuyen has constituted an opposition with a much more ef-
fective political organization than any at Diem's disposal. If he
could win the support of the former two and break the coalition,
Diem's position would be greatly strengthened.
NEAR EAST - AFRICA
5. Iraqi Communists reported plotting overthrow of Nun. Said:
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'public opinion is to be
prepared for a "political strike," which will be followed by attacks
on police and government centers and on British and American em-
bassies and information centers, agents were sent
to party cells in the provinces on 2 September with instructions to this
effect.
Comment: This plotting is overambitious
and is probably intende0 p-az."7"Erboost party morale.
The party may also hope--in desperation--to
ride the crest of any non-Communist reaction to Nun. Said's current
ironhanded repression of political opposition. The veteran Nun i holds
the advantage in any test of strength, but the fact that he faces the
possibility of such tests acts as a serious brake on any pro-Western
actions he might contemplate.
6. "And then there were nine"--Comment on Egyptian council change:
The official announcement on 9 September
that Major Salah Salam, number-two man
In the Egyptian Revolutionary Command
Council, has been granted an indefinite leave
of absence and is being replaced as minister
of national guidance suggests that Colonel
Nasr has again resorted to dismissal as a
means of resolving dissension within the ruling clique.
Salam's removal follows indications of
dissatisfaction with Salamis handling of recent defense talks with
Iraqi premier Nun. Said. If Salam is formally dropped from the coun-
cil, he will be the fourth member to be removed.
Nases continued success in eliminating
troublesome members of the council suggests that he is moving closer
toward one-man rule in Egypt. Despite /Uses apparent strengthen-
ing of his position, his maneuvers may lead to the eventual downfall
of the regime by antagonizing the army officer group upon which it
depends.
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WESTERN EUROPE
USSR seeking to encourage independent French policy on Germany:
Comment: Despite its evident receptiveness
to the idea of new East-West EM on Germany, the French government
has dismissed several recent Soviet overtures as offering nothing essen-
tially new. However, an 8 September press report that Premier Mendes-
France was considering a plan for a European arms pool to which even
Orbit countries might adhere may indicate willingness to enter disarm-
ament discussions.
8. Eden says German problem requires "European" solution:
Foreign Seeretary Eden told Senator Wiley on
8 September that the questions of German
sovereignty and rearmament are "essentially
European" and call for European initiative to
solve them. The American charg�n London understands that the pur-
pose of Eden's impending tour of the European capitals is to lay the
foundations for an agreement. The foreign secretary wants particu-
larly to find a firm basis among a majority of French deputies for an
acceptable solution.
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Eden holds that German admission to NATO
is still the best solution to the military problem, and that Adenauer
should undertake to abide by certain self-imposed restraints on
German rearmament. He said that the 1948 Brussels Pact might
be revised to make it more palatable to France, and that in this con-
nection Britain would undertake to maintain certain forces in Germany
for a specific length of time.
Comment: The Brussels Pact set up the
so-called "Western Union" defense organization of Britain, France and
the Benelux countries.
This is the first time Britain has been willing
to consider committing a specific number of troops on the Continent
for a specific length of time. Such a commitment is considered by the
French as prerequisite for agreement on German rearmament. Much
of what Eden states is also in accord with Adenaueris views on the
problem.
9. Unqualified endorsement of _German rearmament by British Labor Party
seen unlikely:
Because of the narrow victory at the Trades
Union Congress for a resolution reaffirming
British Labor support for German rearmament,
the American embassy, in London believes that
a similar resolution would be defeated at the annual Labor Party confer-
ence beginning on 27 September. The embassy considers it possible
that, as a compromise, the party leadership may make continued sup-
port for German rearmament contingent on a new Big Four meeting.
Comment: Labor Party and union leaders
belatedly recognized early this summer the highly emotional opposi-
tion among the rank and file to German rearmament. By the time
they had launched a campaign to gain support for the official policy,
unions had already gone on record as opposing it.
Since France's rejection of EDC, both the
left-wing British press and the Daily Herald, spokesman for the party
leadership, have urged another Big Four meeting to precede negotia-
tions on any Western alternative to EDC.
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LATIN AMERICA
10. Guatemalan president may call for election of a constituent assembly:
President Castillo Armas will announce on
13 September that elections for a constituent
assembly will be held on 3 October,
Voting will be oral to discourage antigovernment
votes. Castillo's advisers believe that this will ensure the election
of an official slate of candidates. the
constituent assembly will elect Castillo president for a fixed period,
possibly four years, and then adjourn.
The American embassy in Guatemala be-
lieves that the plan has "a reasonable chance of success."
Comment: This maneuver would strengthen
Castillo for the present. The lack of a constitution and a freely
elected national assembly, however, would probably recall both to
the Guatemalans and to other Latin Americans the strict dictatorships
obtaining in Guatemala prior to the 1944 revolution. The situation
would lend itself to Communist propaganda exploitation.
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