CURRENT INTELLIGENCE DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A001300150001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 15, 2016
• Document Release Date: June 1, 2004
• Sequence Number: 1
• Publication Date: October 13, 1952
• Content Type: REPORT

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13 October 1952
OCI No. 9398
Copy No. 2 9 6
CURRENT INTELLIGENCE DIGEST
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This digest of significant reports has been prepared primarily
for the internal use of the Central Intelligence Agency. It does
not represent a complete coverage of all current reports re-
ceived. Comments represent the immediate views of the Office
of Current Intelligence.
ONI, DIA and DOS
review(s) completed.
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THIS MATERIAL CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAWS, TITLE 189 USC, SECS. 793 AND 794, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNER TO AN
UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
1. Poland signs trade agreement with Iran: The trade agreement
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between n an Iran was signed on October in the office of
the Minister of National Economy in Tehran, according to an Iranian
broadcast. The agreement provides for the exchange of goods valued
at 12,000,000 Swiss francs (approximately $525,000) per year.
Iranian exports to Poland will include oil and oil products,
lead oxide, manganese, hides, cotton, wool, and dried fruit,
while such products as dyestuffs, china, pharmaceuticals, textiles,
sugar, paper, and cement are mentioned for Polish export to Iran.
According to the American Ambassador, no foreign exchange will be
used in the settling of accounts.
Comment: Negotiations for this agreement have been in progress
at leas since the beginning of this year. No details are yet
available on the quantity of oil provided for in the agreement,
which is probably at least partially political in intent. Hungary
and Czechoslovakia have also signed trade agreements this year with
Iran.
2. Yugoslavia hints at diplomatic break with Vatican: In re-
plying to a suggestion of The French Ambassador at Yugoslav-
Vatican relations might be improved if the Yugoslav Government
sent a permanent representative to the Vatican, Assistant Foreign
Minister Bebl.er said that Yugoslavia had no intention of being
represented at the Vatican and it was very likely that Vatican
representation in Belgrade would soon be terminated.
Ambassador Allen notes that the Yugoslav press had opened a
violent campaign against the Acting Papal Nuncio and the Vatican
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for allegedly forbidding the clergy to join government-sponsored
priest associations. Allen comments that the government may intend
these attacks to lead to a break of such diplomatic relations as
now exist between the Vatican and Yugoslavia.
Comment: Yugoslav government-sponsored priest associations
were successfully organized in parts of Yugoslavia in October,
1950, but it is only in the last two months that the government
has attempted to do the same in Croatia, the traditional strong-
hold of Yugoslav Catholicism.
The vehemence of the Yugoslav press attack on official Church
reaction to these efforts indicates that the government is deter-
mined to lessen the influence of the Church. These attacks may
also be part of a planned campaign against Western influences.
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chefuof,nava.1 o p Navy:
3.
as irec edorders
Presi e.Rheecontravenes
rations to
intercept Japanese. fishing vessels in the Korean sea. defense
zone and escort them into Pusan,. according to US Charge
Lightner. This.. contravenes orders. of the United Nations
Command,whi.ch..has_ass.umed opera.tional.control of South
Korean patrol craft in the area.
Lightner believes that Rhee should be told "in no uncer-
tain terms" that.thi.s is a UN Command responsibility and that
no contravention will be-tolerated. He-notes, however, that
an effort to curb Rhee might raise the-question of UN opera-
tional.con.tro.l over the South Korean Armed Forces.,.and the
equally. delicate problem.of.Japanese civilian personnel used
by the UN forces.
Comment: The UN Sea Defense Command was recently
establNiFT-to preclude threatened.Japanese-Korean. incidents
over fishing rights. near the.Koreancoast. The. move has. been
incorrectly interpreted by the Koreans as excluding Japanese
but not-Korean fishing operations in the designated zone.
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4. North Korean Navy reportedly a.ugmented.by.PT boats: The
North rean Navy recently received . a.ro -..orpe .o craft
from the Soviet Union, 25X1
These boats, with their crews, are.un er training in Unggi
harbor on the Korean. east coast a few miles from the Soviet
border.
Comment: The. North Korean Navy lost its small patrol-
torpeao oa. force at-the beginning of the war as a. result
of US naval action.
Heightened Communist efforts to de.fend.the east coast
were evidenced by MIG-15 interception. of US naval.aircraft
over Hungnam on the east. coast on .4.and 7. October, the first
such incidents in over a year.
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8. Hong Kong-Mae.ao.smuggling with Chinese. Communists. con-
ong
tinues ..ac ve. ..' a zures of smuggled . cargoes y, Hong Kong
au or ...ies appeared to be...more numerous. during August than
in the.past several months. Unofficial.reports_o.n smuggled
cargoes between Hong Kong and Macao and. China show continued
interest in steel plate, galvanized iron sheets,. steel
strapping., rubber tires, hacksaw blades auto arts and
communications equipment.
Comment: Seizures by the .Hong.Kbng marine police and
the Royal Navy show that. smuggling. from the.Briti.sh colony
continues_on.an_.exte.nsiv.e scale despite .the fairly vigorous
measures. taken by.enforcemen.t authorities. In.the case of
Macao, the.author.it.i.es have fai.led.to.take energetic measures
to prevent smuggling of . strategic. cargoes to the Chinese
Communists,
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11. Rivals for Thai premiership seek additional support:
While not open y threatening eac o er at the presen ime,
Police Director General Phao and Deputy Minister of Defense
General. Sarit are actively seeking additional political and
financial support, according to the American Embassy in
Bangkok. Phao. is reportedly negotiating with leading-sup-
porters of former Premier Pridi, while Sarit is believed to
be courting pro-Royalist leaders. Meanwhile, both are
attempting to improve relations with American Embassy
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The .Emhass.y.. also _ r.epor. ts. that while... Pr.emier.. Phi.bun' s
influence., has..mawkedly decline.d., he, is _ still capable of
holding,..h.is office. because of.. his . ability, to play upon the
Sarit-Pbao...rivalry.
Comment: Despite recurrent.rumors of a.. coup d'etat,
the po ..cal. ,.balance. of .power. in Thailand... has. changed.. .
little since. the November 19.51. coup..... Until the .Phan,-,..S.arit
conflict is..resolved.,..however, the.,possibility remains that
it will..:be settled by force.
The attempts ofPhao and Sarit to., curry. Embassy favor
mark a ..dis.t.inct reversal. of.. their recent.. coolness toward
American officials in Bangkok.
12. Phao. denies Thai.. police. knew. of departure of Peiping
delegates: Although... asser .ng. ME no was well Informed on
the movements of. the . Thai delegates to the. Peiping-Asian
Peace Conference.,. police Director General Phao denied that
the police had prior, knowledge of the delegates' intent to
leave the country illegally, after the government. had refused
to issue. them passports.
The American. Embassy in Bangkok comments that Phao's
statement' indicates that the police'do.'nbt intend to act against
the delegates when they return and that they fail to appreciate
the dangers of the activities of the Thai Peace Committee,
sponsor of the delegation.
13. Means:sought to justify advance billing for visit of
American -.officials to Manila: Regretting tihatPresident
u r no W-13, or, omes c political. reasons,. magnified: the
importance of the, late October visi.t.to..Manila of high
American-defense officials and Assistant Secretary of State
Allison, Philippine Foreign Secretary:Elizalde is seeking a
means to make the visit appear: productive.
On:his::owninitiative:, Elizalde..suggested to an American
Embassy-officer that the conferees::migh:t announce that they
had discussed the Communist:threa.t to: Southeast Asia,. and
that President.Quirino.had declared the Philippines ready
to make the. fullest . possible, contribution in: the event of
Communist aggression there. Elizalde hoped that the Philip-
pine declaration would cause Thailand and possibly Burma,
to make analogous statements.
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Comment.: Quirino's office in Man.i.la.announced to the
press l; a at. Quirino's "request," the United States was
sending three high defense officials to. meet Allison in
Manila for a top-level conference with Quirino on the
defense of the area. The Manila press has implied that the
talks may cover defense of the entire Pacific area.
Indonesian labor.federation.plans workers' "national
frontT".ac c: The .conference being a through October
y WS` ridonesia's Communist-led labor federation, and
attended by WFTU Secretary Henry Turrell, is not an annual
congress but a.s.pecial meeting to discuss strategy and
tactics. While recognizing that a people's democracy is
most suitable for Indonesia and should be observed as the
basic objective of their struggle, the. conference suggests
that such an aim should be played down.. Instead SOBSI
should call. for the establishment of a workers' "national
front."
It was. also suggested that SOBSI cease toperform the
functions. of. a political party.
Comment: SOBSI.is the largest labor federation in
Indonesi~' a,..is..active.in a larger geographic area than any
other labor federation, and unlike similar organizations, has.
seven seats in parliament. SOBSI lost ground to. non-Communist
labor organizations in 1952 and late 1951, however, and in
several instances its tactics encountered stiff government
resistance.. Apparently its new tactic will be to camouflage
its Communist character and to concentrate strictly upon
labor activity.
15. Britain sees possible Burmese preparation for nationali-
zation o British n.eres.sa The British ore gn ice ex-
presses..concern that an unfavorable decision by the Burmese
Supreme,. Court on the constitutionality of the Burmese Govern-
ment's oil venture with.. the Burmah Oil Company might prove to
be a preliminary move toward nationalization of the oil com-
pany and other British. interests in Burma.
The Foreign Office believes that the proposed Burmese
financial mission to London will not be sent if the court
opinion.is.negative on the oil venture, .. and. indicates that
under these conditions Britain would refuse any postponement
or reduction of the first payment on Burma's debt to Britain.
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SOUTH ASIA
Nehru foresees union of French and Portuguese territories
with India: In. -a major address at. - a. ras c-n . October , Prime
Minister fehru.complained that recent acts of violence against
pro-Indian. ind.ivi.duals `in.. French India had made it impossible
to holda free plebiscite there on the. question of union with
India. He-stated that French and Portuguese. territories on
the subcontinent "must. inevitably belong to the Union of
India. We...are riot going to-discuss that basic issue. . any
longer.. The only points.we.are.going to. discuss are the
details which follow from acceptance of. that issue."
Comment: Nehru's statements on such foreign enclaves
as Pon c ery and Goa, together with his attitudes on matters
affecting South African citizens of Indian extraction, stand
in striking contrast to his extreme sensitivity.regarding any
potential violation of. India's sovereignty.
According. to the American Consulate General in Madras,
the Indian_Governm.ent.probably fears that a. free plebiscite
would not favor India.
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appear to be growing., and. all evidence points to a poor
nationalist.showin ..in the UN General Assembly. 25X1
Comment: The present calm in Tunisia..is more likely
the result o.f improved discipline of Tunisian_ nationalists
than the perfection. of security controls. Some public
manifestation is certain to coincide with inscription of
the Tunisian question on the UN General Assembly agenda.
they now-have,the initiative and are, making-headway-against
the nationalists.. A.sp.okesman told the.. US Consul General
that internal. if feren.ces :among the . nationalist leaders
French officials in Tunisia.are confident they control
situation: French Residency officials in Tunis believe at
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24, Russians retaliate against Austrian firm subjected to export
controTs: American massy officials in Vienna repor t at
Soviet occupation authorities are stopping all Western export
shipments of mining fuses produced by Schaffler and Company, an
Austrian firm located within the Soviet zone. Export shipments
awaiting Soviet clearance include two consignments totalling
$700,000 destined for France. 25X1
Comment: The Schaffler Company, which produces Title I
mining fuses from materials imported in large part from Hungary,
has heretofore shipped about half its exports to Hungary, Ruwania,
and Czechoslovakia. Soviet officials have occasionally refused
permits for the plant?s Western shipments, and Embassy officials
fear that if permits for exports to the Orbit are stopped by the
Austrian Government in cooperation with COCOM controls the company
will also lose the source of its materials in Hungary. An Embassy
request for exception from strict enforcement of Title I controls,
based on the prospects of Soviet retaliation as well as publicity
and unemployment considerations, is still pending.
25. Austrian Foreign Minister calls for US action against inde-
pendent press: Foreign Minister Gruber has told American of-
ficials in Vienna that it would be to the interest of both the
United States and Austria if action could be taken to curb the
power of the dominant independent press in the Salzburg area.
Expressing concern regarding the spring elections in this area,
where the local organization of the Peoples Party is weak and
sentiment against the coalition is mobilized by independent news-
papers, he stressed the "parallel menace" arising from the under-
mining of coalition stability and of US prestige.
Gruber called in particular for American action against the
Salzburger Nachrichten as the "greatest source of local disaf-
fection." He suggested that, since US authorities had "founded"
the paper, they should either financially penetrate or neutralize
it through "legal means."
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Comment: Although the city of Salzburg has a Socialist
mayor, its independent newspapers, which follow an anti-American
line, are a potent force, particularly among radical rightist
elements. Gruber?s proposal for US action appears suspicious
in light of his recent criticism of American "interventionism"
in Austria and fairly reliable evidence that he has connections
with the Salzburger Nachrichten.
26. Paris Embassy comments on Pinay?s foreign policy leadership:
French Premier nay as succeeded at least temporarily in
creating considerable public and parliamentary confidence in
his personal ability to handle foreign policy, the American
Embassy in Paris reports. The government?s firm stand on Tunisia
and its success in postponing a foreign policy debate in the
National Assembly is said to have pleased all non-Communist
political groups.
If this new attitude persists, the Embassy believes, it
will assist Pinay in.obtaining parliamentary acceptance of
policies which many deputies have previously regarded as mere
"Schuman" policies.
Comment: Pinay?s new controlling position in the field of
foreign po ficy does not necessarily mean that he will or can win
parliamentary acceptance of current European integration proposals.
He has not yet clearly committed himself on the EDC, for example,
and this is one of the principal targets of the extreme rightist
political groups whose favor he has obviously been courting.
27. Paris Embassy comments on controversy with French over
1953 budget: American o cials in Paris report that i t s not yet
clear w ether the French Government will now refuse to discuss
with NATO,as well as with the United States, the size and content
of its 1953 military budget. They warn that the French in their
present frame of mind could seriously prejudice the NATO Annual
Review and might line up other member nations to restrict exami-
nation of military budgets.
In the opinion of these officials, Premier Pinay, hyper-
sensitive on the subject of raising taxes, probably has inferred
that the United States is seeking to encourage such a policy.
His firm stand against higher taxes is already jeopardized by
the concessions he has had to make to demands for increased
expenditures in the civil and investment portions of the pro-
posed 1953 budget.
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Raids expected to strengthen French Government's case
against Communists: A Frenc Defense Ministry official as
revealed that the recent anti-Communist raids are only the
beginning of a series intended to strengthen the government's
charge of a "plot against the external security of the state."
A primary aim of the government is to lodge charges against
the arrested secretary general of the CGT, the Communist-led
labor organization, bearing not only on demoralization of the
army but also on CGT instructions to prevent shipment of war
material. F7 I
Comment: The raids are in line with the government's in-
creasingly nationalistic spirit. They may have been part of
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Pinay's efforts to bolster his weakening political position, and
may have been timed to prevent heightened Communist activity
this fall in the port areas,
30. Uruguay may break relations with the USSR on 15 October:
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There is a strong possibility that the Government of Uruguay will
break diplomatic relations with the Soviet Union at its next
National Executive Council meeting on 15 October.
Comment: There is no other evidence regarding the agenda
of the National Executive meeting. In recent years government
officials and the press in Uruguay have periodically questioned
the desirability of continuing relations with the USSR.
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