WEEKLY SUMMARY NUMBER 62

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 05949563
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 19
• Document Creation Date: March 9, 2023
• Document Release Date: May 10, 2021
• Case Number: F-2021-00355
• Publication Date: August 5, 1949

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1 WEEKLY SUMMARY
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Number 6c-
5 AUG190
Document No. ADCD,
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Auth: rJA 77/11-f.,3
Date: 40/-oi- 78 , elf.3
CENTRAL INTELLIGENCE AGENCY
Uchival Pecorel
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1. This publication contains current intelligence exclusively
and therefore has not been coordinated � with the intelli-
gence organizations of the departments of State, Army,
Navy, and Air Force.
2. This copy may be either retained, or destroyed by burning
in accordance with applicable security regulations, or
returned to the Central Intelligence Agency.
WARNING
This document contains information affecting the na-
tional defense of the United States within the meaning
of the Espionage Act, 50 U.S.C., 31 and 32, as amended.
Its transmission or the revelation of its contents in any
manner to an unauthorized person is prohibited by law.
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CONTENTS
1
� Page
HIGHLIGHTS 1
WESTERN EUROPE 2
EASTERN EUROPE 6
NEAR EAST-AFRICA 7
FAR EAST H 10
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HIGHLIGHTS
With Western Europe faced with no immediately
crucial issues this week, and the Soviet Union maintaining
an attitude of comparative correctness in its foreign rela-
tions, some developments favorable to US security interests
occurred in Greece. and the Middle East. Estimated guer-
rilla strength in Greece has fallen below 17,000 for the
first time in nearly two years (see page 8), and Tito's
present attitude toward the conflict in Greece may be hurt-
ing the guerrillas where they are most vulnerable, namely,
in manpower. Meanwhile, the first progress in months
toward settlement of the Kashmir dispute was achieved when
the Indian and Pakistani Armies agreed on demarcation of
a cease-fire line (see page 8). Whether this progress con-
tinues, however, will depend in large part on India's reaction
to the expected proposal by the UN Commission on India and
Pakistan for a joint political meeting to consider truce pro-
posals in preparation for a Kashmir plebiscite.
ri TA In MI
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WESTERN EUROPE
GERMANY
Electoral Prospects Catholic and Evangelical Church
support of the Christian Democratic
Union (CDU) in western Germany will not appreciably affect
the results of the 14 August federal elections. Both the Ger-
man Catholic bishops and the Council of Evangelical Churches
have exhorted their followers to vote only for candidates who
will support religious education in the schools. The CDU is
the only major party which supports the Church's position
on the issue of religious education, the Social Democratic
Party (SPD) and the Free Democratic Party (FDP) having
already opposed it at the Bonn constitutional convention.
German sentiment against clerical interference in political
affairs is so strong, however, that the recent move by the
Church will probably do no more than prevent an excessive
spluttering of the conservative vote. By increasing the
hostility between the CDU and the SPD, however, the bishops'
action will make the formation of a stable two-party coalition
more difficult and will widen the breach between German
Socialists and Catholics.
Berlin Economy The financial troubles of western Berlin
continue to be a major issue for the
Berlin Magistrat, the western powers, and the various
political parties taking part in the current electoral cam-
paign in western Germany. Despite strenuous efforts by the
Magistrat to balance the 1949-50 budget, revenues are still
expected to fall short of expenditures by approximately 500
million marks. Only half of this deficit will be covered by
a subsidy from western Germany. Moreover, planned revenue
from new taxes on coffee, tea, beer, cigarettes, and cigars--
ranging up to 60% of the retail price--may be sharply reduced
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GERMANY
as a result of Soviet action in dumping large quantities of
these products into western Berlin from the eastern zone.
The necessity to convert east marks into west marks will
also be a burden for the west Berlin government as law
as economic conditions force a large number of west
Berliners to work in the Soviet sector of the city. Mean-
while, the injection of west Berlin's financial troubles as
a major issue between parties now campaigning in the west
German elections has contributed to the reluctance of the
Magistrat to face the Berlin budget problems realistically.
The German Socialist Party is promising, in the event of
a clear-cut victory, to extend unlimited aid to the city to
insure full employment, while the Christian Democratic
Union would restrict aid to loans to private industry.
Manpower Problems The influx into western Germany of.
refugees and expellees is compli-
cating the problem already created by the changing pattern of
the German population, a problem which may become in-
creasingly important as west Germany strives to regain its
prewar competitive poeition in the international market.
The postwar population in western Germany is characterized
by: (1) a shortage of men; (2) an inadequate number of people
In the working-age groups and in gainful employment; and
(3) a movement of people from "productive" to "non-productive"
employment. The refugees and expellees, who are settling in
rural areas primarily because of the extreme housing Shortage
In cities and towns, have not yet augmented to any significant
degree the industrial production potential of western Germany.
The shortage of �men, serious even in relation to the total popu-
lation, is alarming in the age group considered most important
to industrial production. The number of men and women in
the best working-age group (15-44 years) has declined to
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GERMANY
one-quarter of the population. The proportion of men in this
age group, which was decimated by casualties during World
War II, bas dropped sharply from one-half to one-third. The
proportion of the population gainfully employed in western
Germany has dropped to 43% from the prewar average of
50%. Moreover, the low level of industrial activity in west-
ern Germany, with the attendant high unemployment, has
obscured two other basic obstacles to increased productivity
in western Germany, namely the advanced age of most skilled
workers and the lack of properly trained replacements in the
skilled trades.
UNITED KINGDOM
Colonial Development British economic planners are placing
Increased. emphasis on raising the
level of production in colonial areas as a partial solution to
Britain's long-term payments problem. Despite the large,
untapped resources of many of the colonies, British post-
war expenditures for their development have been compara-
tively modest, awing in large part to scarcities of raw materials,
capital goods, and technicians in the sterling area. In seeking
non-British capital to expand the development program, the
UK is relying mainly on loans from the International Bank and
on some ECA aid rather than on extensive US private Investment.
Aside from the obvious desire to retain profitable investment
opportunities for British use, the UK fears the social and poli-
tical reaction resulting from too swift economic development.
The Colonial Office has admitted the possibility of more rapid
utilization of colonial resources but has also indicated its
intention to avoid the sort of unbalanced economic development
which has brought colonialism into ill repute in much of the
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UNITED KINGDOM
world. With Britain's large stake in colonial development
assuming greater importance in view of the UK's stubborn
dollar problem and with native nationalism already hyper-
sensitive about "exploitation" of colonial territories, the
British Government feels it cannot risk the quick profits
of an uncontrolled colonial investment program.
FRANCE
Financial Crisis With Parliament recessed until mid-
October, the principal threat to the
Queuille Government is an impending financial crisis over
the need for 25-30 billion francs to meet French Treasury
obligations between now and October. This deficit has re-
sulted primarily from: (1) lower-than-expected revenues
from taxes on tobacco and gasoline sales; (2) the failure of
small savings to increase rapidly; (3) lagging receipts from
direct taxes; and (4) the huge operating deficit of the
nationalized railroads. Under these circumstances, a crisis
could arise that might cause the downfall of the Queutile
regime. In an attempt to avoid such a crisis, the French
have requested that ECA authorize a special release of
counterpart funds. It is likely that the French will comply
with the conditions posed by ECA Paris for such a special
release.
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EASTERN EUROPE
GREECE
Guerrilla Manpower With guerrilla strength in Greece
estimated at below 17,000 for the
first time in nearly two years, Tito's present attitude
toward the Greek guerrillas and their Slavo-Macedonian
supporters may be hurting the guerrillas where they are
most vulnerable, namely, in manpower. By "gradually
closing" the Greek frontier to the guerrillas, Tito is not
only restricting guerrilla tactical movements but. is assert-
ing his control over the several thousand guerrilla reserves
remaining in Yugoslavia. By his blandishments to the
Greek Slavo-Macedonians, he is undermining a hitherto
minor source of Greek guerrilla manpower and other support
which may become increasingly important to the guerrillas
when the Greek Armed Forces summer offensive develops.
The influence Tito can exert over the total guerrilla man-
power supply, however, is not decisive. Guerrilla reserves
in Albania are larger than in Yugoslavia, and both Albania
and Bulgaria are more important as bases of supply and
manpower than Yugoslavia could be under present conditions.
The depletion of guerrilla manpower resulting from any
attempted large-scale resistance in critical areas near the
Albanian-Greek frontier this summer may provide a decisive
test of Tito's attitude toward the Greek Government and the
Greek guerrillas. �
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NEAR EAST
PALESTINE
Arms Embargo The embargo on shipment of arms to the
Middle East will probably be removed by
the Security Council as a result of British and French pressure
and the recommendation of UN Mediator Ralph Bunche. Bunche
believes that prolonging the embargo would be unrealistic in
view of the dismantlement of the truce supervision machinery
and points out that a strong Israeli argument in favor of retain-
ing the embargo would be nullified by airing Israel's past viola-
tions of the truce with regard to the immigration of "fighting
men" and the importation of arms from Eastern Europe. The
British and French have long sought to regain their freedom
to export arms to the Arab states, and Israel itself now seema
reconciled to lifting the embargo, chiefly because such action
would support its argument for removal of Egyptian restrictions
on Suez Carla traffic. If the embargo is lifted, Israers efforts
to prevent a Near East arms race will probably be exerted
through diplomatic channels rather than through the SC.
IRAN
Oil Contract Failure of the Majlis to ratify the supplemental
agreement to the Anglo-Iranian Oil Company
(A10C) r:oncession, by depriving Iran of approximately 15
million pounds of needed immediate revenue, may have serious
economic consequences. Loss of this anticipated revenue means
additiciaal strain on the country9s financial resources, already
heavilr taxed by a record budget, the recently initiated economic
devel(vment program, internal pressure for an expanded military
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IRAN
establishment, and an increasingly unfavorable balance of
trade. Maple opposition to the agreement was unexpectedly
violent and may be attributed to anti-British sentiment and
political theatrics rather than to sober and practical objec-
tions to the terms, which would have raised Iran's oil income
to a point more in line with recent Middle Eastern oil contracts.
AIOC claims that this agreement represents the company's final
compromise. It is still possible, however, that additional slight
revisions may be made in Iran's favor which, along with greater
publicity for the AIOC concessions already made, might promote
favorable consideration of the agreement when the MOM con-
venes in the autumn.
INDIA -PAKISTAN
Kashmir Dispute Agreement by the Indian and Pakistani
Armies on demarcation of a cease-fire
line marks the first progress in months toward settlement
of the Kashmir dispute. Whether this progress continues, how-
ever, will depend in large part on India's reaction to the
expected proposal by the UN Commission on India and
Pakistan (UNCTP) for a joint political meeting to consider
truce proposals in preparation for a Kashmir plebiscite.
Although Indian economic advisors are reportedly recom-
mending to Prime Minister Nehru with increasing urgency
that the Kashmir problem be settled, India is very reluctant
to risk the loss of all Kashmir through a plebiscite held in
the near future. Therefore, any efforts which the Indians
might make toward a speedy settlement would probably be
directed toward the partition of Kashmir roughly in accord
with the present cease-fire line rather than toward a
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INDIA-PAKISTAN
plebiscite as demanded by Pakistan and as originally
promised by India. Inasmuch as the Indian partition plan
would probably be unacceptable to Pakistan, and in view of
India's antipathy to a plebiscite, it is unlikely that India
will do much at this time to facilitate a settlement of the
Kashmir dispute. Unless economic considerations force
a change in the Indian attitude, the problem in its present
dangerous state will probably revert to the Security Council
for further discussion.
THE GOLD COAST
Communist Activity
left-wing nationalists
In the Gold Coast are now receiving material and money
from Communist sources in the French Ivory Coast, the
Belgian Congo, and Ethiopia suggest that the USSR is con-
cerned about the growing economic importance of colonial
Africa and is becoming more active in fomenting political
unrest there. The recent expansion of the Kremlin's anti-
colonial radio propaganda beamed at Africa is further
evidence of Soviet interest in this area. Heretofore, con-
tacts between Gold Coast nationalists and Communists have
been slight and mainly through certain London associates
of the Marxist-Influenced leader, Kwami Nkrumah. The
reported transfer of a battalion of Grenadier Guards to the
Gold Coast reflects current British concern over maintain-
ing public order there.
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SECIET
F A R EAST
CHINA
Communist Advance Chinese Communist military opera-
tions continued this week with little
Nationalist resistance. In south central China, the Commu-
nists have apparently not yet started their final drive toward
Canton, preferring first to gain firm control over the Changcla-
Hengyang area. Meanwhile, the Communists have intensified
their political and military preparations for eventual conquest
of northwest China. On the military front, the present Commu-
nist offensive into Kansu may be the beginning of a full-fledged
attempt to eradicate the rabidly anti-Communist forces under
the Moslem war lord, Ma Pu-fang. It is more likely, however,
that the Communists hope to be able to contain Ma's troops
while driving south toward the Szechwan border. Concurrently,
the Communists have increased the tempo of their political
offensive in the northwest. A "Northwest Corps," made up
of student administrators and political cadres, is being re-
cruited in eastern China and a propaganda campaign boosting
the Communist line. of "autonomy for racial minorities" is
being beamed at tilt; Chinese and Turki Moslems, as well as
at Mongols in the aorthwest.
BURMA
Official US Visit Burma Foreign Minister E Maung during
his visit to the US next week hopea to discuss
the extension of te clinical assistance to Burma under the Point IV
program and the passibility of developing defenses against the
spread of Communism in Asia. Despite some reports to the
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BURMA
contrary, the Foreign Minister appears to be making a gen-
uine effort to establish closer Burmese relations with the
West in order to restore stability and safeguard Burma's
independence. Mating is an influential cabinet member, and
the continuation of the Burmese Government's trend toward
a more moderate policy may depend on the success of Maung's
visit.
PHILIPPINES
Quirino's Visit Philippine President Quirino's forthcoming
visit to the US may have a significant effect
on the outcome of the November presidential elections. At
the moment, Quirino's prospects of defeating ultranationalist
Jose Laurel are considered only fair. However, if Quirino
returns from Washington with promises of additional financial
and military aid, his chances in the elections will be improved.
Even if Quirino is able to report no more than increased US
interest in Philippine economic and military affairs, a con-
siderable portion of the electorate will be favorably impressed.
On the other hand, nationalist leaders and the opposition press
will continue to cite Quirino's US visit as substantiation of
their campaign charges that Quirino has induced the US to
Interfere in Philippine internal affairs.
Sp�T
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SECEET
KOREA
Pacific Pact Chiang Kai-shek's visit to Korea this week
Is undoubtedly for the purpose of promoting
the proposed Pacific pact. Korean President Rhee apparently
remains unconvinced that Chiang's participation in a pact
would diminish its chances of success and persists in believ-
ing that such a group has a good chance of procuring additional
US military and financial aid. Although Rhee may not at this
time formally agree to enter into a narrow Pacific union which
includes only Chiang's tottering regime and the Philippines,
there is a possibility that the impending conversations with
Chiang may result in some formal Korean commitments to
Nationalist China. In this event, the Republic of Korea may
find itself at a considerable disadvantage should other Pacific
nations succeed in forming a more viable union excluding China.
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ha LI LIA:1
DISTRIBUTION
1 The President
2,64 � . . . Secretary of State
3,4 Secretary of Defense
5 Secretary of the Army
6 Secretary of the Navy
Secretary of the Air Force
8,70 Chairman, National Security Resources Board
9,71 Executive Secretary, National Security Council
10 Assistant Secretary of the Navy for Air
11,69 Chief of Staff, US Army
12,13,14 Chief of Naval Operations
15,16,17.. . . Chief of Staff, U S Air Force
18 Director of Plans and Operations,General Staff, U.S.Army
19 Deputy Chief of Staff (Operations) U.S. Air Force
20 Deputy Chief of Naval Operations (Operations)
21 Director of Plans and Operations, U.S. Air Force
22,23,24. . . . Special Assistant to Secretary of State for Research
and Intelligence
25,26,27,28,29, Director of Intelligence, General Staff, U.S. Army
30,31,32,33,34.
35,36,37,38,39, Chief of Naval Intelligence
40,41.42,43,44.
45,46,47,48,49. . Director of Intelligence, U.S. Air Force
50 Director of Security and Intelligence,Atomic Energy Corm.
GI Executive Secretary, Military Liaison Committee,
Atomic Energy Commission
52,53,54,55,56. Chief, Acquisition & Distribution Division,CCD,Dept�State
57 Director, Federal Bureau of Investigation
58 Secretary, joint Chiefs of Staff
59 Chief, Policy Planning Staff, Department of State
60 Secretary of State (Attention: Chief, Policy Reports Staff)
61. . . . � � � Deputy Director, joint Intelligence Group, joint Staff
62,63. � � � � � � Secretary, Joint intelligence Group, joint Staff
65. US Air Force Representative on joint Strategic
Survey Committee
68 Administrator, Economic Cooperation Administration
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