CURRENT INTELLIGENCE BULLETIN - 1955/01/16

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02989047
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: January 16, 1955

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16 January 1955
Copy No. 9
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. _El
NO CHANGE IN CLASS.
El DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: /0
AUTH: HR 70-2
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DATE: a/vela_ REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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NOW'
SUMMARY
GENERAL
1. Afghanistan to exchange ambassadors with Communist China
(page 3).
2. USSR may propose making Berlin a free state (page 3).
FAR EAST
3, Formosa MAAG chief reports widespread confusion in Tachen
command (page 4).
SOUTHEAST ASIA
4. Indonesian Communists gain substantial vote in local election
(page 5).
SOUTH ASIA
5. Comment on Congress Party's weakening position in south India
(page 6).
WESTERN EUROPE
6. Comment on resignation of labor government in Norway ,(page 6).
LATIN AMERICA
7. Brazilian Communists promote South American youth festival
(page 7).
LATE ITEMS
8.
9. Comment on soviet can ior raitcs on uerwally wct.6v up.
* * * *
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GENERAL
1. Afghanistan to exchange ambassadors with Communist China:
Comment: The Afghan decision to
exchange ambassadors with Communist China--coming shortly
after Kabul's renewal of relations with West Germany and agree-
ment to establish relations with Yugoslavia�appears to result
from Afghanistan's growing interest in expanding its relations
with the outside world. It does not necessarily indicate a specific
interest in closer ties with the Orbit.
China has also recently evidenced a more
active interest in improving its diplomatic relations with non-Orbit
governments.
2. USSR may propose making Berlin a free state:
The Soviet government, after giving
notice of the termination of the four-
power agreement on Berlin, will pro-
pose new four-power negotiations during
which it will suggest making Berlin into a "free state,"
Plans are reported to have been worked
out three or four months ago which provide that the "state" would
be completely isolated from East Germany and that it would have
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its own currency. The East German government would be moved
to Leipzig and its chief representative in the free "state" adminis-
tration would be Deputy Premier Nuschke.
Comment: There have been previous
European press reports along these lines, some of which have
cited Danzig as a model for a Berlin free state. It is possible
they are neutralist or Soviet plants designed to arouse West Ger-
man hopes for some form of settlement for Berlin and ultimately
for German reunification, thus generating sentiment for delaying
final action on ratification of the Paris accords until settlement
prospects can be explored.
It is unlikely the USSR will seek inter-
nationalization of Berlin, since such an arrangement would be
contrary to the basic Soviet objective of forcing the withdrawal
of the Western Allies from the city. It is more likely that upon
ratification of the Paris accords, the USSR will pursue a combi-
nation of tactics which would include physical harassment and a
propaganda campaign stressing that the West, by its many viola-
tions of the Potsdam Agreement, had nullified the legal basis
for its continued presence in Berlin.
FAR EAST
3. Formosa MAAG chief reports widespread confusion in Tachen
command:
General Chase, MAAG chief on Formosa,
reports that confusion in the Tachen com-
mand was prevalent "from the staff on down"
during and after the first Communist air
attack on 10 January, resulting in higher Nationalist losses than
might otherwise have been the case. Hours were spent in discus-
sion of "trivial and various long-term items" not required by the
immediate situation, and this resulted in a lack of observation
and supervision of actions under way.
The Chinese Nationalist admiral in com-
mand of the Tachen task group left his flagship after the first air
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strike, took refuge on shore, and failed to order dispersal of his
ships--which remained in the harbor to suffer heavily in later at-
tacks the same day.
Comment: The defense command staff
has in the past been the target of MAAG criticism for incompe-
tence, although the commanding general and many of his tactical
unit commanders are well regarded by American advisers.
SOUTHEAST ASIA
4. Indonesian Communists gain substantial vote in local election:
In the election for a 15-member town
council in Pakan Baru, an oil center in
Sumatra, the first election reported any-
where in Indonesia since the present cabi-
net assumed office in mid-1953, the Communists gained a substan-
tial vote.
Pakan Baru is not a typical Indonesian
town, however, because of its large number of oil workers. The
Communists appear to have achieved almost what they hope to do
on a national scale in the first national election scheduled for later
this year. They have stated that in the national elections they will
concentrate on winning one third of the contested seats. With these
as a base, they hope to form a national front government.
The Pakan Baru election resulted in four
seats for the Communist Party and six for the Masjumi--a Moslem
party believed to be Indonesia's largest political organization and
the Communists' principal rival for the votes of urban workers and
peasants� Although lacking a full third of the seats, the Commu-
nists are believed capable of controlling the council with the co-
operation of the remaining non-Masjumi votes, most of which ap-
pear susceptible to Communist direction.
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SOUTH ASIA
5. Comment on Congress Party's weakening position in south India:
Serious weakening of the Congress
Party's position in two important south
Indian states can only be averted if the
party displays unexpected vigor and
leadership at its annual convention, scheduled to open in Madras
on 17 January.
In Travancore-Cochin, the Congress
Party has already announced its intention of withdrawing support
from the Socialist government, which cannot exist without its sup-
port. At the moment, however, the Congress Party itself seems
unable to form a government, and the only alternative to gover-
nor's rule--direct administration from New Delhi�would be for
the strong Communist group in the legislature to form a govern-
ment.
In Andhra, where elections are sched-
uled for mid-February, early Congress hopes for an easy victory
have been frustrated by party splits and the necessity for Congress,
for the first time, to form a defensive electoral alliance. The
Congress Party is running fewer candidates than the Communists
and is seven weeks behind them in starting campaign activities.
Though the national government can
always maintain control by enforcing governor's rule in any state,
the necessity of doing so indicates automatically a lack of popular
confidence in the ruling Congress Party.
WESTERN EUROPE
6. Comment on resignation of labor government in Norway:
The resignation of Premier Oscar Torp
and his Labor cabinet on 14 January is
not likely to result in any significant
changes in Norway's foreign or defense
policies. A new government�which is
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being formed by ex-premier Einar Gerhardsen, chairman of the
Labor Party--will probably retain several ministers of the Torp
cabinet, including Foreign Minister Halyard Lange, a firm sup-
porter of NATO.
The extensive cabinet changes�which
had been rumored for more than a month--are the result of a
growing demand within the Labor Party for more vigorous gov-
ernment action to deal with domestic inflation and a worsening
foreign exchange problem.
The Tarp government had already pro-
posed a seven-percent cut in Norway's 1955 defense budget� The
new government will probably propose in addition a cutback in
Norway's extensive domestic investment program. This would
entail some reduction in government spending, but Gerhardsen
Is not likely to urge any action which would seriously affect Nor-
way's modest NATO commitment.
LATIN AMERICA
7. Brazilian Communists promote South American youth festival:
The Communist Party of Brazil is mak-
ing a major effort to encourage attend-
ance at the South American youth festival
scheduled to be held in Sao Paulo from
to Li February,
the party has been clever in concealing the Com-
munist sponsorship of the meeting,
Comment: Although outlawed in 1947,
the Communist Party of Brazil has successfully continued its ac-
tivity and is today the largest and wealthiest Communist Party in
Latin America. Its membership is estimated at 120,000, an in-
crease of about 100 percent in the past two years.
The youth festival was originally sched-
uled to be held in Santiago, Chile, in October 1954 and was later
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postponed until January 1955. The Ibanez administration in Chile
forbade holding the festival in Santiago on the grounds that it was
Communist-inspired and designed to serve the purposes of inter-
national Communism.
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LATE ITEMS
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9. Comment on Soviet call for talks on Germany:
The Soviet statement of 15 January call-
ing for new four-power talks on Germany
and offering to normalize relations with
West Germany if the Paris accords are not ratified was addressed
primarily to the West German public. Having failed thus far in its
prolonged campaign to exert diplomatic pressure on London and
Paris, Moscow is shifting its attention to Bonn, where the Bun-
destag's final debates on ratification are scheduled for mid-Febru-
ary.
The offer to establish diplomatic rela-
tions with West Germany and the stated willingness to accept some
undefined form of internationally supervised German elections if
West Germany remains free of any defense commitments to the
West are the major new points designed to appeal to West Germany.
Moscow has previously urged economic
and cultural ties with Bonn, but this is its first offer to establish
diplomatic relations. The assertion that this move could contrib-
ute to "better mutual understanding and the search for more suc-
cessful paths" toward German unity is a hint that Bonn could im-
prove the prospects for German reunification by abandoning
Adenauer's pro-Western policies and seeking direct contacts with
Moscow.
The statement of 15 January is intended
to create the impression that Moscow will accept free German
elections. The reference to international supervision of German
elections, subject to East and West German approval, marks an
apparent reversal of the Soviet position. The possibility of such
a shift was foreshadowed last August by propaganda which hinted
at the possible establishment of a weak supervisory commission,
composed of neutrals and excluding the occupation powers, simi-
lar to the International Control Commission in Indochina.
In addition to its reference to international
supervision, the statement says that all democratic parties should
have "freedom of election propaganda" throughout Germany and that
the electoral law must take account of existing laws in both East
and West Germany. Past Soviet statements on Germany, however,
have very narrowly defined "democratic parties" and East and West
German election practices are incompatible.
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The latest statement fails to repeat pre-
vious unacceptable Soviet demands for the withdrawal of occupa-
tion troops and the establishment of a provisional government prior
to elections, while it accepts more clearly than before the Western
demand for elections prior to a peace treaty.
This new statement is unlikely to have
any effect on the West German schedule for legislative action on
the Paris treaties. Many Germans will still not believe that Mos-
cow is seriously proposing the unification of Germany. Others,
who may feel that Soviet policy has been liberalized, may also feel
that they will be in a stronger position to negotiate for unification
after ratification of the treaties, The Soviet statement will serve,
however, to fix German opinion in favor of four-power talks in
the next few months.
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