CURRENT INTELLIGENCE BULLETIN - 1954/09/26

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03000915
• 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 26, 1954

CURRENT INTELLIGENCE BULLETIN
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CLASS CHANGED TO: IS 8 C
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AUTH: HR 70-2
DATE: ljraiLREVJEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. Comment on new Soviet efforts to influence France (page 3).
FAR EAST
2. South Koreans plan anti-American general strike for 28 Septem-
ber (page 3)o
3. Cotnment on Chou En-laits report to Peiping National Congress
(page 4).
SOUTH ASIA
4. Comment on outcome of Nehru-Sastroamidjojo talks in New
Delhi (page 5).
EASTERN EUROPE
5. Comment on transfer of Soviet-Rumanian companies to
Rumanian ownership (page 6).
WESTERN EUROPE
6. Italians ready to accept Trieste territorial compromise (page 7).
7.
(page 8).
8. lkilendes-France to insist on his own German rearmament plan
at London (page 8).
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GENERAL
1. Comment on new Soviet efforts to influence France:
A 24 September Pravda article repre-
sents a clear effort to encourage French
opposition to agreement on any new
formula for German rearmament at the
forthcoming London conference. The
article may foreshadow additional Orbit
diplomatic approaches to France or,
it may be followed by a new note
advocating the Soviet-proposed European collective security system.
Pravda emphasizes that France has an
alternative to agreeing with American plans for rearming Germany,
that France need not be isolated in the face of a resurrected Wehr-
macht, and that it can strengthen its position as a great power.
The article recalls the "eld.stence of a French-Soviet treaty to
prevent new acts of aggression on the part of German militarism,"
and mentions the Anglo-Soviet treaty of 1942, the Anglo-French
treaty of 1947, and the Potsdam decisions on the German ques-
tion.
Pravda argues that threats to isolate
France bear witness only to the concern of American diplomacy
over present French policy and a desire to bring the French back
into line. Pravda adds that "without the support of France and
England no bilateral US-West German treaty can lead to a funda-
mental change in European policies."
FAR EAST
2. South Koreans lan anti-American general strike for 28 September:
The South Korean National Assembly's
Committee for Opposing American Rede-
ployment has instructed leaders of the
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Federation of Korean Trade Unions to stage a 24-hour nation-
wide general strike on 28 September as a demonstration of popu-
lar opposition to American troop withdrawals, according to re-
ports reaching the American embassy in Seoul.
The assembly committee has reportedly
made funds available to the Federation of Trade Unions and to
other government-controlled social and patriotic organizations
for support of demonstrations protesting American withdrawals.
Comment: The general strike would
be the most ambitious step to date in President Rhee's program
to promote tensions between South Korea and the United States.
In this artificially created atmosphere Rhee is attempting to
generate pressure to support his demands that the United States,
in effect, make South Korea the foundation of its strategic posi-
tion in the western Pacific.
Although there is genuine concern on
the part of most Koreans over redeployment, the American em-
bassy reports that there is a developing awareness among some
thoughtful Koreans that Rhee's current anti-American campaign
is working against the interests of the nation which reauires
American friendship and aid.
3. Comment on Chou En-lai's report to Peiping National Congress:
Chinese Communist premier Chou En-
lai's report to the National People's
Congress in Peiping on 23 September
confirms the regime's intention to establish closer relations with
governments which recognize it and to make new overtures for
recognition.
Chou suggested that understandings on
nonaggression might be reached with Indonesia, Pakistan and Cey-
lon on the basis of the five principles which he himself and the
Indian and Burmese premiers affirmed last June. He hinted again
at the possibility of an all-Asian security pact.
Chou revealed that negotiations for im-
proving relations with Norway and the Netherlands are under way
and that contacts are being made for establishing diplomatic
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relations with Afghanistan and Israel. He said that Peiping is pre-
pared to establish relations with Nepal, offered Laos and Cambo-
dia "the possibility" of relations with Peiping, and added that nor-
mal relations might be established with Thailand and the Philippines.
Chou denounced American support of
Nationalist China and said that the American Seventh Fleet "must
withdraw," but he did not assert, as reported by the Western press,
that the fleet must be "driven out." He made no direct reference
to American policy as regards the Chinese offshore islands.
In the economic field, Chou released
data which indicate that Communist China's industrial progress
may have been underestimated up to now. The industrial output
figures cited by Chou are the first important absolute figures for
industrial output in all of China to be released by the regime.
Chou also disclosed that the regime
plans to move rapidly toward collectivization. He said that by
1957, the last year of the first five-year plan, more than half
of China's peasants--as compared with 2 percent as at aric.ultural co-operatives.
SOUTH ASIA
iL Comment on outcome of Nehru-Sastroamidjojo talks in New
Delhi:
The communique issued by Indian prime
minister Nehru and Indonesian prime
minister Ali Sastroamidjojo on 25 Sep-
tember at the close of their talks in New Delhi, describing their
agreement to hold both a Colombo powers conference and a
larger Asian-African meeting, discloses an obvious compro-
mise which probably pleases neither of them.
Nehru presumably discouraged ambi-
tious Indonesian plans for an Asian-African conference, knowing
the lack of interest shown in it by many Asian nations and the
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impossibility of its achieving anything significant with or
without Chinese attendance.
On the other hand, Nehru agreed to
another meeting of the Colombo powers to be held in Djakarta,
despite his probable recognition that the pro-Western orienta-
tion of Pakistan and the neutral attitude of Burma and Ceylon
toward the Manila pact would continue to prevent India and
Indonesia from developing any solidarity of thought
Since the ideas of both men evidently
are still nebulous, the prospects for an early Colombo powers
conference are dim and those for the Asian-African one even
dimmer.
EASTERN EUROPE
5. Comment on transfer of Soviet-Rumanian companies to Rumanian
-Ownership:
Moscow's announcement on 25 September
of the transfer of 12 Soviet-Rumanian
joint companies to Rumanian ownership
made no mention of the two companies most important to the
Soviet economy. These are the Soviet-Rumanian companies for
the production of petroleum and uranium. The joint companies
for insurance and for printing and publishing were also not men-
tioned.
The USSR is to be reimbursed for its
share in the 12 companies "over a number of years," but Rumania
will exercise direct management of day to day operations imme-
diately. The USSR, however, retains general control over the
Rumanian economy through government and party channels and
through Soviet personnel in key advisory positions.
In cutting back its apparatus for overt
control of Rumanian industrial establishments, the Soviet Union
is seeking to strengthen the appearance of Rumanian sovereignty.
It is likely, therefore, that some Russian personnel will be
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recalled in a move similar to the current withdrawals reported
underway in Hungary. This Soviet policy is now practical in
Rumania both because a sizable number of politically reliable
Rumanian managers and technicians have been trained since the
war and because Soviet control of the Rumanianfigovernment has
improved.
The announcement supports recent
rumors that the USSR is preparing to return some joint com-
panies to Hungary. Last January, the Soviet Union returned to
East Germany all Soviet-held companies except the important
uranium enterprise�
WESTERN EUROPE
6. Italians ready to accept Trieste territorial compromise:
Comment: The agreement on territory
will remove the last major obstiae to an overall Trieste settle-
ment, though some minor details have still to be worked out.
Premier Scelba will have an easier time winning over public and
parliamentary opinion to accept the settlement if only a minimum
of land inhabited by Italians comes under Yugoslav rule.
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7.
8. Mendes-France to insist on his own German rearmament plan
at London:
Premier Mendes-France told Ambassa,
dor Dillon and Deputy Undersecretary
of State Murphy on 24 September that
the Eden proposals for rearming Ger-
many stood no chance of approval by the French National Assem-
bly because the proposals created no European organization.
His plan, however, used the Brussels treaty of 1948 as the basis
for a new European organization and therefore stood a good
chance of acceptance.
Mendes- France said that he had reluc-
tantly agreed to admit Bonn to NATO at the same time an agree-
ment setting up the proposed new European organization goes
into effect but that his plan for the new organization would have
to be presented to the assembly along with West German entry
into NATO.
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Name 61,
A Saar settlement would be a precondi-
tion to any French agreement on German sovereignty or rearma-
ment, and French-German negotiations on this point would take
place concurrently with the drafting of an agreement to be reached
at the London talks. Mendes-France thought that "with good will"
this problem could be ironed out in a few days.
Comment: Luxembourg foreign minis-
ter Bech told American minister Buchanan in Luxembourg on
24 September that the London conference would succeed unless
Mendes- France insisted on a Saar solution before he would agree
to submit German rearmament proposals to the French assembly.
American ambassadors Dillon and Bruce are convinced, however,
that Mendes- France will use the same tactics at London as he did
at Brussels.
The French and German positions on the
Saar are now further apart than they were when the Teitgen-
Adenauer agreement of late May was signed. Renegotiation of
another agreement would run into insuperable difficulties in
Germany, because domestic political considerations make it im-
possible for Chancellor Adenauer to yield further on the Saar.
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