CURRENT INTELLIGENCE BULLETIN - 1955/11/03

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03002345
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: November 3, 1955

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3 November 1955
Copy No.
100
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO, 1-4
NO CHANGE IN CLASS.
CI DECLASSIFIED
CLASS. CHANGED TO: IS S C
NEXT REVIEW DATE: 2 0 / 0
AUTH: HR 70-2
1011�
DATE: REVIEWER' _
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
/7727A/710/
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CONTENTS
1. ISRAEL'S NEW GOVERNMENT (page 3).
2. ISRAEL SEEKING MILITARY EQUIPMENT FROM ITALY
(page 4).
3. REPORT OF FRICTION BETWEEN USSR AND COMMUNIST
CHINA ON MIDDLE EAST ISSUES (page 5).
4. SOUTH KOREA FACING SERIOUS INFLATION PROBLEM
(page 6).
* * * *
THE FORMOSA STRAITS
(page 7)
3 Nov 55
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1. ISRAEL'S NEW GOVERNMENT
Comment on:
David Ben-Gurion's return as prime
minister and defense minister in the
ew Israeli cabinet assures that Tel
viv will continue its tough border
olicy and its intensified diplomatic
ttempts to meet the Arab threat.
en-Gurion has been labeled an "ac-
tivist" because of his espousal of
firm retaliation on Israel's frontier. He is also Israel's
ablest diplomat and most experienced negotiator. His
first public pronouncement on resuming control included
a warning that Israel will continue to defend itself and an
invitation to Nasr and the Arabs to meet at the conference
table--which they will automatically reject.
His five-party coalition cabinet, which
may be characterized as slightly left of center, controls
75 of the 120 seats in parliament. In the present mood
in Israel, which is emphasizing readiness for war and a
closing of ranks, Ben-Gurion's decisions in terms of the
war crisis will receive full public and parliamentary sup-
port.
3 Nov 55 Current Intelligence Bulletin
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2. ISRAEL SEEKING MILITARY EQUIPMENT FROM ITALY
srael wishes to purchase a large
)rder of planes and military equip-
ment in Italy, according to the Amer-
can embassy in Rome.
the desired equipment included
40 F-51's, 50 Sherman tanks, 50 M-7 self-propelled guns,
120 armored cars, 500 bazookas, and as many Browning
machine guns as are available.
Comment These prospective arms purchases
would be in line with Israel's stated
policy of seeking arms from any source, preferably from
the West. In late October the Israeli cabinet in a special
session voted to spend $50,000,000 for arms. Earlier re-
ports indicate that Israel may also be negotiating for two
destroyers from Italy.
Italy would probably be willing to sell
this equipment to Israel in line with the Segni government's
desire to play a larger role in Middle East affairs.
3 Nov 55
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3� REPORT OF FRICTION BETWEEN USSR AND
COMMUNIST CHINA ON MIDDLE EAST ISSUES
Chinese Communists at Geneva
NI/ere "very unhappy" with Soviet
maneuvers in the Middle East,
the Chinese
have informed the USSR that they are dissatisfied be-
cause the Soviet Union is "spoiling the atmosphere for
working out their plans in the Far East."
Comment Soviet moves in the Middle East would
appear, on the contrary, to benefit the
Chinese by establishing a precedent in the area for closer
relations with the Sino-Soviet bloc.
Current propaganda from Peiping faith-
fully supports the Soviet position on Middle East issues.
3 Nov 55
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4. SOUTH KOREA FACING SERIOUS INFLATION PROBLEM
Comment on:
South KoTea is again threatened with
inflation that could result in a serious
weakening of the currency and a re-
sumption of bitter attacks on the United
States as responsible, according to Economic Co-ordinator
Wood in Seoul. He anticipates a price rise of at least 80
percent, and possibly as high as 140 percent, during the
fiscal year ending next July.
Wood expects that the money supply will
be increased by 80 percent during the year, primarily in
order to cover a budget deficit of about $125,000,000. Infla-
tion to this degree would undermine the effectiveness of the
American aid program by discouraging the development of
local industry and exports and by encouraging black markets,
speculation and corruption. It would also require an upward
revision of the hwan-dollar exchange rate next September,
with a renewal of the acrimony which has characterized this
issue.
The attainment of a balanced budget will
be difficult as long as South Korea maintains its present
large military establishment. This year's national defense
allocation of $165,000,000 just about equals the government's
entire anticipated revenues. The basic weakness of the
South Korean economy, which suggests the need for sub-
stantial foreign aid for years to come, is indicated by the
estimated import requirements for the next two years of
$842,000,000, against exports of only $70,000,000.
3 Nov 55 Current Intelligence Bulletin
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BIWEEKLY SUMMARY
20 October-2 November 1955
THE FORMOSA STRAITS
Report of the IAC Current Intelligence Group
for the Formosa Straits Problem
1. There were no major military developments. Shell-
ing by both sides continued in the Quemoys, where the Chinese
Communists fired about 250 rounds, most of these on 26 Octo-
ber. Nationalist artillery fired over 1100 rounds against the
Communists that day, which may have turned routine harass-
ment fire, initiated by the Communists, into an artillery duel.
The first Chinese Nationalist operation in the past
month against Communist naval vessels was reported on 30
October. Four Nationalist aircraft attacked two patrol craft
25 miles northeast of Matsu, and one of the vessels was re-
ported to have been left burning. Poor weather has restricted
naval activity by both sides during the past several weeks.
2. A MAAG-sponsored plan for the rotation of Chinese
Nationalist units on the offshore islands with units recently
trained on Formosa is under way. So far only one artillery
battalion on Quemoy has been rotated to Formosa, but the plan
envisages the eventual rotation of every unit. These rotations
will not only provide needed training on Formosa for the units
which have been garrisoning the offshore islands for some time,
but will also ensure that the offshore islands are eventually de-
fended by units which have had recent intensified training under
MAAG supervision.
3. At an 8 October luncheon given by Chou En-la! in
Peiping, he took pains to emphasize that Communist China has
no intention of attacking Formosal
who attended the lunch-
eon. Chou expressed confidence that internal collapse would
bring Formosa under Peiping's control.
3 Nov 55
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The Chinese Communists have consistently asserted
that Peiping is willing to "liberate" Formosa by "peaceful means"
but have not renounced military action if "peaceful means" fail.
4. Peiping propaganda output on the subject of Formosa
during the past two weeks (18 October - 1 November) showed
an increase in volume, with renewed emphasis on the theme
of "peaceful liberation" through negotiations with "local author-
ities," a theme not stressed since early September.
3 Nov 55
Current Intelligence Bulletin Page 8
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Primary roads
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FORMOSA STRAITS SITUATION
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DESIGNATIONS
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RUNNAY GENERALLY 5000 FEET OR LONGER.
SECONDARY: AUXILIARY OR EMERGENCY BASES, OR FIELDS OF LESSER
IMPORTANCE. RUNWAYS GENERALLY LESS THAN 5000 FEET.
(1FRA3IONAL: ACTIVE BASE FOR MILITARY & CIVILIAN AIRCRAFT.
SOME BASES USED BY PISTON TYPES MAY BE USABLE BYJETS.
SERVICEABLE: INACTIVE BASES CAPABLE OF USE BY AIRCRAFT
INKNCON: CURRENT STATUS UNDETERMINED.
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