CURRENT INTELLIGENCE BULLETIN - 1955/03/25

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03162013
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: March 25, 1955

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25 March
1955
Copy No. 88
CURRENT INTELLIGENCE BULLETIN
51
DOCUMENT NO
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CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE � 10
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DATE: iMsitt 40 REVIEWER:
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Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. Japan warns Nationalist China against activities in Ryukyus
(page 3).
2. Danger of incident involving neutrals in South Korea seen in-
creasing (page 4).
SOUTHEAST ASIA
3. Bao Dal intervention in Vietnam sect problem urged by French
(page 4).
NEAR EAST - AFRICA
4. Turkey presses for visit of President Bayar to Iran (page 6)0
5. Egyptian minister warns Cairo against India's Asian policy
(page 6)0
EASTERN EUROPE
6. Comment on 34-percent increase in defense allocation in Czech
budget (page 7).
WESTERN EUROPE
7. French government brings court action against Poujade tax-
protest movement (page 8).
8. Comment on latest Austrian treaty developments (page 9).
THE FORMOSA STRAITS
(page 10)
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'Igoe
FAR EAST
1. Japan warns Nationalist China against activities in Ryukyus:
The Japanese embassy in Taipei, appar-
ently angered at Chinese Nationalist
sponsorship of Ryukyuan independence
activities, has warned the Chinese that
the establishment of "liaison offices,
etc." in the Ryukyus without consulting Japan "is something we
cannot take," The embassy,
emphasized
that Japan retained sovereignty over the islands even though it
agreed at San Francisco to place them under American trustee-
ship.
this exchange resulted from the Chinese government's statements
before the Legislative Yuan concerning its efforts to promote
Ryukyuan independence and "prevent Communist influence .from
penetrating that area." Nationalist officials claimed that "Wash-
ington must take Nationalist China into consideration" with respect
to the Ryukyus.
Comment: Japan has shown great sensi-
tivity in the past over Chinese Nationalist propaganda favoring
independence or a trusteeship for the Ryukyus. Tokyo may fear
that the United States could eventually be won over to the idea if
Japanese neutralism made American bases in Japan untenable.
Taipei points out that the islands were a
Chinese protectorate for more than 500 years before the Japanese
occupation in 1871, and that the population is of Chinese ethnic
origin. Taipei's present position is based on the Potsdam Declara-
tion, which states that Japanese sovereignty is to be limited to the
four main islands of Japan and such minor islands as the Allies--
including Nationalist China--may determine.
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Ng.
2. Danger of incident involving neutrals in South Korea seen in-
creasing:
The action of the South Korean National
Assembly on 23 March in calling on the
government to oust the Czech and Polish
members of the Neutral Nations Inspec-
tion Teams has increased the danger of an incident, according to
Ambassador Briggs. He notes that such an incident would involve
the American troops which guard the five neutral teams now op-
erating in the south.
Briggs reports that the government may
have sponsored the assembly's action as a means of obtaining a
"legal" mandate to act unilaterally in ejecting the Communists
from South Korea. He states that the government's impatience is
steadily mounting and that its restraint of the past few months is
now ended.
Comment: The assembly's action, prob-
ably government-inspired, may be the first step in carrying out
Foreign Minister Pyun's threat of 19 March to try South Korea's
"own legal means of throwing the Communists out."
The intensified campaign of the South
Korean government to abolish the teams, which has the additional
aim of buttressing its demands for a military build-up, may make
the Swiss and Swedes more reluctant to take positive action to
eliminate the teams or reduce their personnel. They have pre-
viously indicated their unwillingness to act under pressure.
SOUTHEAST ASIA
3. Bao Dal intervention in Vietnam sect problem urged by French:
French officials in Paris, including
General Ely, contend that Bao Dal's
immediate intervention in the dispute
between Premier Diem and the sects
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Is"
is desirable in view of the "united front"
which the sects have achieved. Bao Dal's
intervention might take the form of his re-
turning to Saigon within a few days, or
summoning Diem and the sect leaders to Cannes, with a view to
forming a "national union" government.
In Saigon, Deputy Commissioner General
Jean Daridan is taking the line that Diem should yield to the sects'
demand for a reshuffle of his government. Daridan says that Le
Van Vien, leader of the Binh Xuyen, is determined "to act" and
cannot be bought off. General Jacquot, acting commander in chief,
criticized Diem's policy toward the sects but doubted that an armed
attack by the sects was likely.
General Collins believes there is not much
unity among the sects, and that Bao Dai's return to Vietnam would
cut the ground from under Diem by encouraging new political ma-
neuvering
Comment: Bao Dai and the sects have
been drawn closer together by their reluctance to see Diem emerge
as the undisputed leader of South Vietnam. Diem, on the other
hand, is unlikely to yield his position of leadership so long as he
retains American support. He believes that with adequate secret
funds he can buy off sect leaders and eventually cripple the sects
militarily.
To circumvent the deadline of 25 March
set by the sects for a reshuffle of the government, Diem proposes
to enter negotiations but to avoid any retreat.
According to press reports, the sects on
24 March ordered a "general strike" and a blockade of Saigon
starting Sunday. Earlier the French commander in South Vietnam
had informed the American embassy that he would not tolerate
such a blockade.
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NEAR EAST - AFRICA
4. Turkey presses for visit of President Bayar to Iran:
The Foreign Ministry spokesman said
that Bayar has wanted to visit Iran "for a long time" and that, since
the Shah recently expressed the desire to see him in Tehran, it .
would be advantageous for him to go in the near future.
Comment: Turkey is anxious to round
out the "northern tier" defense alignment with Iran as an impor-
tant link.
The Shah has already committed himself
to the "northern tier" principle, but has proposed that joint general
staff talks be held as a preliminary to Iran's decision to join the
Turkish-Iraqi pact. Ankara, however, believes that Iran should
be brought into the defense alignment before such conversations
take place in order to prevent Tehran from using the resultant
planning as a device to force increased American,rnilitary.aid. A
visit by Bayar to Tehran at this time would offer an opportunity to
press Iran for early adherence to the pact.
5. Egyptian minister warns Cairo against India's Asian policy:
Egyptian minister of state Anwar Sadat,
who is heading a "good-will" delegation
to the Moslem countries of the Far East
in preparation for the Afro-Asian confer-
ence, informed Prime Minister Nasr
that India's policy in Asia is incompatible with ours."
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He warned that "Communist China, with India's support, will
endeavor to condemn America for the misfortunes of Asia."
Sadat recommended that Nasr visit
Pakistan before India, stating that it is "very important that I
see you before you go to India or Indonesia."
Comment: Sadat is one of the original
members of the Revolutionary Command Council and has been
labeled anti-Western in the past. If he can convince Nasr that
Egypt's interests as a leader of the Moslem world may conflict
with India's objectives at the conference, Cairo may adopt an
independent role despite Prime Minister Nehru's overtures for
Nasr's support at the conference.
EASTERN EUROPE
6. Comment on 34-percent increase in defense allocation in Czech
budget:
The Czechoslovak budget for 1955, al-
though providing for total expenditures
slightly below the 1954 level, calls for
a defense expenditure approximately 34 percent higher than last
year's figure. According to the official announcement of 22 March,
the 1955 defense expenditure represents 12.1 percent of the total
budget, compared with 8.9 percent in 1954.
This increase is consistent with the
Orbit's public emphasis on the need for an increase in military
power to counteract "threats from the West," but percentagewise
is considerably higher than the 12-percent rises in absolute ex-
penditures announced for 1955 in the USSR and Poland.
A large portion of the Czech increase
may be devoted to the procurement of new and improved military
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'4,100
equipment, as suggested by initial Czech receipt this year of
Soviet IL-28 aircraft. Some of the increase, however, may re-
flect a change in budgeting procedures, i.e. , some items used
by the military which were formerly included within the national
economy sector may have been transferred to the defense allo-
cation.
WESTERN EUROPE
7. French government brings court action against Poujade tax-
_
protest movement:
The French government on 22 March
instructed the Seine court to issue a
warrant and open an inquiry into the
so-called "Poujade movement" protest-
ng taxes 'me court .ction is to be taken under the "injury to
the prestige of the nation" clause of the 1935 general tax code.
The American embassy in Paris has been
informed that the inquiry will aim at obtaining suf-
ficient evidence to issue a search warrant covering Poujade's head-
quarters and the residences of the movement's leaders. Labor
unions are reported to have complained bitterly to the government
about its failure to move against Poujade and his supporters.
Comment: Premier Faure was forced
to make concessions to the Poujade movement to avoid delaying
action on the Paris agreements by the Council of the Republic.
The Paris press was extremely critical of Poujade's antics in the
National Assembly gallery during the budget debate on 19 March,
and the present legal action is probably the beginning of a stronger
government campaign against Poujade.
During the assembly debate on Faure's
request for decree powers, scheduled for 28 March, Poujade's
supporters in the coalition will probably join the opposition in an
attempt to bring down the premier.
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*aro
8. Comment on latest Austrian treaty developments:
Chancellor Raab will probably find it
difficult to refuse the Soviet invitation
of 24 March to visit Moscow to discuss
the Austrian treaty question. Raab has
already stated that he would go to Moscow
if he thought it would result in progress
toward a treaty.
The Soviet invitation comes just four
days after a radio speech by Raab in
which he seemed to go a long way toward
meeting Soviet requirements for Austrian
neutrality as stated by Molotov at the Berlin conference in January
1954. The USSR has also agreed to Vienna's proposal that the
Austrian treaty question be discussed separately from the German
question at a conference of the four occupation powers and Austria.
American officials in Vienna believe the
Austrian government is "nervous and worried" by its recent dis-
cussions with the USSR and would like to shift the responsibility for
negotiations to the Western powers.
Allied officials in Europe have expressed
concern that the Vienna government is becoming increasingly recep-
tive to the idea of some form of Austrian neutralization, which is
opposed by the three Western occupation powers, in exchange for
a treaty. The French Foreign Ministry told the American embassy
in Paris that recently Austrian officials had implied that Vienna
was discussing with Moscow the possibility of "complete neutrality,
such as that of Switzerland."
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THE FORMOSA STRAITS
Report of the IAC Current Intelligence Group
for the Formosa Straits Problem
This report is based on information received in Washington
up to 1100 hours 24 March 1955.
1, Small-scale artillery fire was exchanged in the Quemoy
area. No other ground activity was reported. Air action was
negative due to weather.
2. The sighting of additional minor Chinese Communist
naval vessels in the Min River estuary is confirmed
A long-range naval re-
inforcement of the Matsu area may have commenced, but is not
yet of sufficient scale to indicate the imminence of hostilities. Part
of the additional forces are identified as two LSrs, one gunboat
and numerous smaller amphibious types.
3. Chinese Communist frogmen attempted reconnaissance
on 17 March and 22 March of Wuchiu Island, midway between
Matsu and Quemoy, and were driven off. These are the first such
attempts on Wuchiu, the most lightly held (600 guerrillas) and most
vulnerable of all Nationalist island groups.
4. Chinese Communist propaganda attention to Formosa
has remained at a relatively low level during the past week (approx-
imately six percent of Peiping home service broadcasts), but Pei-
ping continues to reaffirm strongly its "solemn determination" to
seize the island. Broadcasts to Formosa claim that Chinese Nation-
alist morale is sinking and continue to appeal for defections. Pei-
ping Radio has been exploiting the return from Hong Kong to the
mainland on 15 March of former Nationalist General Wei Li-huang,
who had been living in Hong Kong since 1949. Peiping has noted the
rumored establishment in Taipei of a Sino-US "joint operations
center" as further evidence of US efforts to "tighten its military
occupation of Formosa and prepare for a new war" and has ascribed
the return of the Aruba to "Washington's high-handedness."
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