ANALYSIS OF THE POWER OF THE COMMUNIST PARTIES OF FRANCE AND ITALY AND OF MEASURES TO COUNTER THEM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R003200020013-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 40
• Document Creation Date: December 19, 2016
• Document Release Date: December 7, 2006
• Sequence Number: 13
• Publication Date: September 15, 1951
• Content Type: MF

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MEMORANDUM FOR: The Director of Central Intelligence, Chairman, Psychological
Strategy Board
FROM: Allen W. Dulles, Deputy Director
SUBJECT: Analysis of the power of the Communist Parties of France
and Italy and of measures to counter them.
I. BACKGROUND.
On July 9, 1951, representatives of the Department of State, of Defense, ECA,
and CIA met with Mr. Averel]. Harriman and with Mr. Gordon Gray in Mr. Harriman's
office. The purpose of the meeting was to consider the implications for the
defense of Western Europe, of the continuing power of the Communist parties in
France and Italy, as evidenced by their popular vote in the 1951 Italian munici-
pal elections and the French elections for the Chamber of Deputies.
At this meeting consideration was given to memoranda prepared in the Depart-
ment of State and by Mr. Sam Berger of Mr. Harriman's office, analyzing these
recent elections. It was generally agreed that the results of these elections
had been disappointing. While the electoral mechanisms had been manipulated so
as greatly to reduce Communist representation in the French Chamber and in
Italian municipalities, nonetheless the Communist parties in 1951 had shown a
voting strength, roughly equal, in the case of Italy, to that of the previous
elections of 1948 and., in the case of France, reduced only by about 9 per cent
over the elections of 1946. It was conceded that despite the economic improve-
ments which had been realized. in France and Italy as a result of American aid
and the ECA program -- which may well have saved these countries from Communist
control -- economic aid alone and even improvement in the standard of living was
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by no means an adequate answer to the internal threat: It was felt therefore
that consideration should be given to new techniques to deprive the French and
Italian Communists of their power, recognizing that these parties constituted
a continuing threat to democratic government and even to the security of the
NATO forces in Western Europe.
The general conclusions reached at this meeting were summarized by the
Department of State in cables ssnt to the Embassies in Paris and Rome on 12
July 1951, substantially as f ol.lows:
1. Both the Italian aand the French governments have evidenced over-
reluctance to proceed forthrightly against their local Communist parties.
2. The results of the recent elections have shown that further
efforts are urgently needed to reduce substantially the communist appeal
to these countries.
This result can only be realized if determined action is taken by
the respective governments against the material sources of communist power
while continuing the efforts to alleviate distress on which communist appeal
is based.
4. The United States Government should give consideration to taking
steps with these governments so that they would adopt a more aggressive
role in the matter.
5. United States agencies, including the ECA and CIA, might appro-
priately assist in a manner to be determined in developing this program.
The undersigned, who was about to proceed abroad for a general review of
CIA work in Western Europe1 was requested'.to confer with the"Ambasoadors in
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Paris and Rome, with Ambassador Katz and other ECA representatives. in Paris
and Rome, and to consider with them: ?(a) Specific actions which the French
and Italian governments might take administratively or through legislation to
deprive the communist parties of their material resources and reduce their
power, particularly in the labor movements; (b) How the United States can best
proceed in bringing the respective governments to initiate such action, and
(c) How the various United States agencies, once such steps are initiated by the
governments, could best lend support to such policies of the governments and to
their day by day action in carrying out anti-communist measures.
II. ACTION TAKEN.
During the period July 11+ to August 7, the undersigned conferred in Paris
with Ambassador Bruce and members of his staff and Ambassador Katz, and in Rome
with Ambassador Dunn and his staff, Mr. Dayton and Mr. Lane of ECA. Without
disclosing the precise purposes of the interviews, conferences were held with
key French and Italians.
Both of our Ambassadors and their staffs, and all ECA personnel, extended
every possible assistance to the undersigned. In general they were in agreement
with the conclusions which had been reached at the Washington conference on
July 9, and felt that the time had come to develop a concrete program against
the local communist parties. As an aid in the development of this program the
undersigned was given certain reports which are appended hereto:
1. Memoranda dated July 16 and July 18, respectively, prepared for
Ambassador Bruce by Mr. William A. Crawford of his staff, entitled
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(A) "Anti-Communist Action of the French Government," (B) Actions which
the French Government might take to deprive the Communist Government of
its material resources and reduce its power. Exhibit 1.
2. Memoranda by Mr. Richard Eldridge dealing particularly with a
labor program for France. Exhibit 2.
3. A memorandum dated July 26, 1951, from Ambassador Dunn, entitled
"Program to Reduce Soviet Activities in Italy." Exhibit 3.
]+. Memorandum summar:'Czing conferences in Rome with Ambassador Dunn,
his staff and ECA representatives on specific measures to undermine com-
munist influence. Exhibit 4.
III. ANALYSIS OF THE FRENCH AND ITALIAN COMMUNIST PARTIES AND SOURCES OF
THEIR STRENGTH.
The relative Communist voting strength in France as shown by the last
elections for the Chamber of Deputies was approximately 25%, and in the recent
Italian elections (which covered roughly two-thirds of the country) approximately
34% (including the Nenni Socialists who generally presented no separate ticket).
In other free countries of Western Europe the Communists, in the most recent
general elections, have shown only the following voting strengths: Western
Germany 3.5%o, Holland 6.5%, Belgium 8%, Austria, less than 5%.
These figures show clearly that the French and Italian Communist Parties
occupy a special position in Western Europe and in considering any course of
action directed against these parties it is important to consider the factors
which have contributed to build up this strength.
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In France and Italy the Communist Parties occupy a position of respecta-
bility which they do not enjoy elsewhere in Western Europe. There are no social
or economic disadvantages to being a member of these Communist Parties. In
fact, for labor there may be certain advantages in being a member of the party
and of the communist controlled unions which largely dominate labor in the two
countries.
While the French and Italian governments claim that in some instances they
are beginning to discriminate against admitting communists to government positions
these steps are feeble and is largely because the communists have not recently
participated in French or Italia;a governments and hence are not entitled to
political patronage.
One of the reasons for communist strength and relative respectability in
these countries is the important role which the communists played in the French
and Italian wartime underground resistance movements. As a result, immediately
upon liberation they seized strategic positions, took over building sites and
appropriated other prerogatives, particularly in the field of the press and of
labor. They have never been dislodged from many of these positions.
Another reason for Communist Party strength in these countries lies in
the fact that they have become the parties of protest against somewhat feeble
Tovernments of the center. In this respect they assume the role that in other
?Testern European countries is being played by the Socialists. The Socialist
:'arty in France in recent years has lost caste in leftist cercles because it has
Seen forced to join in "middle of the road" governments as otherwise any liberal
,overnment would have been impossible. In Italy the Socialist Party is badly
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split, one section openly joining the communists and the other section splintered
and unable to exercise a vigorous role. This situation is illustrated by the
remark made to me in France by an eminent Frenchman of Socialist inclination
who had held high official positions and who was vigorously anti-Soviet, that
if he were a young man today he thought it quite likely that he would be a
member of the Communist Party as the Socialist Party offered no strong leader-
ship.
The single most important element of strength of these two Communist Parties
is the fact that in France the communists absolutely control the CGT which is
the dominant trade union organization,, while in Italy they likewise dominate
the powerful CGIL. In addition, the communists in both countries have made
deep inroads in agricultural circles and their agricultural journal, "La Terre,"
is the most widely read farm paper in France. In general their press is effec-
tive (though one of the most encouraging signs over recent years has been the
sharp drop -- almost 50% -- in the circulation of "L'Humanite," their chief
Paris organ). They have advantages, acquiesced in by the government, in ac-
quiring newsprint and in the use of buildings which they hold under government
favor. The parties have a trained leadership, clever direction, and plenty,
of money and ruthlessness. They have effectively built up their positions as
national parties and their leaders have largely succeeded in deluding many of
their followers regarding their real position as stooges of Moscow. Undoubt-
edly the great majority of the French and Italians who join the Communist
Party or who vote the ticket are not militants and do not consider that they
are aiding a foreign power.
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The Communist Parties in France and Italy, in addition to their appeal
tq those in economic distress, have thus become the home for the protesters
and for neutralists, (in addition to the hard core of Moscow followers) for
many of those who are jealous of American power in the world and view Moscow
and Washington with equal distrust, for those who are anti Atlantic Pact, anti-
rearmament, and even for misguided people who think the Communist Party is a
party of peace. Added to all these are the timid who are "occupation conscious"
and view communist allegiance as cheap insurance against possible Soviet
aggression. Together they form a dangerous fifth column behind the lines of
our Atlantic defense forces.
IV. GENERAL CONCLUSIONS.
I conclude that it should be a major point of American and of NATO policy
to cripple these Communist Parties, to uncover their true intentions, to sow
discord in their ranks and promote defection, to deprive them of privilege and
respectability, and to drive them underground.
The time is now relatively favorable for action. The reorganization of
the French and Italian governments -- weak as they are -- and the buildup of
military strength in Europe which holds out hope of an eventual defense, gives
'is a basis for starting action to undermine the Communist parties, There are
.some signs that the Communist leadership in France (and to a lesser extent in
Italy) is today less powerful and less assured than it was a few years ago and
should be vulnerable to attack. They have lost prestige by their losses of
seats in the French Chamber andiwyors in the Italian provinces. The heads of
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the present French and Italian governments will be with us in principle even
though reluctant in practice. In France failure to act would give the
deGaullist Party their strongest argument against any government of the parties
of the center. In Italy de Gaspers had already indicated a disposition to move
against the Communists.. We would be deluding ourselves, however, if we ex-
pected decisive action by either government. Hence we must not rely solely on
government action; we must encourage action by individual groups of patriotic
citizens, by the press and other media of public opinion,
V. METHODS OF PROCEDURE.
1. Action against the French and Italian Communist Parties must develop
and be presented to the people as independent French and Italian moves. It
should not appear to come under U.S.A. pressure and our support should be
covert not overt. In general we must induce the French and Italians themselves
to initiate the measures both to deprive the Communist Parties of certain
privileges they enjoy and to show them up as what they are -- tools of Moscow.
.2. The specific types of action which we should press-the French and
Italian governments to take should initially be relatively modest and we should
not disclose our full hand by presenting an over-all program at the outset. If
the initial steps are taken the scope and pace of the program can be accelerated.
3. There should be substantial increase in the covert support given to
measures to be carried out by individua), groups and organizations of patriotic
citizens., by the press, radio, notion pictures and like media, with financial
and other aid from us. (An outline of the type of such covert measures now
being carried out or programmed is given in Exhibit,)
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4* An intensive study should be made of measures to break the strength of
the Communist labor unions and to support and develop the non-communist labor
unions. Existing measures in this field should be intensified. The -continuing
aid of American labor should be sought and their ability to aid effectively in
this field should be strengthened.
5. Consideration should be given to ways and means whereby the power in-
herent in the placing of foreign contracts under the military aid program and
ECA, in the handling of shipping; and crews and the selection of ports for un-
loading our supplies, can be directed toward aiding the non-communist unions
and breaking the power of the communist unions. (This is an extremely complex
problem to which I have found no clear answer although it was generally felt in
Paris and Rome that something along these lines could be done.)
6, A general over-all pro?ram to accomplish the foregoing, to coordinate
what is now being done, and to provide a stepped up program of action might well
be considered by the Psychological Strategy Board in consultation with State,
Defense, ECA and CIA, and then coordinated with our Embassies in Paris and Rome.
he existence of such a program should initially be kept secret in order to
ainimize the effects of Communist counter-measures, to cover our own partici-
pation and not to disclose the points where we propose to strike.
7. We cannot expect the rather complacent and somewhat feeble French and
Italian governments to buy a whole program at once. They may be prepared, how-
aver, with some backing.from us and if persuaded by our seriousness, to take on,
)ae by one, a series of measures to cripple the Communist Party, This would be
tore likely to happen if the governments were convinced that their present
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complacency regarding local communism would adversly influence the American
attitude toward continuing economic and military aid. Then once we get the
two governments started on a practical course against their Communist parties,
we can expect them to be more forthright in their public attitude and declara-
tions against Communism.
8. Certain specific steps which might be taken are set forth in the
various enclosures to this report. These might furnish a basis for preliminary
consideration of a course of action,
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EXHIBIT 1
Memoranda dated July 16 - 113, 1951, prepared for the American Ambassador
to France, Mr. Bruce, by William A. Crawford of his Staff,
A. ANTI-COMMUN:CST ACTION OF THE FRENCH GOVERNMENT
Before considering what further action the French Government might
take administratively or th:rough legislation to combat Communist activities
here, it would be well to take stock of what action it has already taken
in this field. Such action may be generally summarized under the following
headings:
(1) Reorganization of the Internal Security System;
(2) Elimination of Communists from Posts of Responsibility in Public
Administration and the National Economy;
(3) Outlawing of International and Foreign Communist Organizations'
and Fronts;
(4+) Prohibition of Soviet and Cominform Periodicals;
(5) Prohibition of French Communist and Communist Front Demonstrations;
(6) Encouragement of National Deviationism within the CPF and the CGT;
(7) Anti- Communist Propaganda.
A brief statement is attached of the action so far taken by the
Government under each heading, together with recommendations for further
action wherever it would seem desirable.
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(1) Reo ganization of the Internal Security System:
The Government decree of September 30, 1950, called for the re-
organization of the French internal security system, including the
creation of a territorial guard. The decree was designed to provide the
means for dealing with the Communist fifth column in the event of a
national emergency. The Government is understood to have done little so
far to implement the decree.
STATUS: Unsatisfactory.
RECOMMENDATION: The Government might be encouraged to expedite action.
(2) Elimination of Communists from Posts of Responsibility in Public
Administration and the National Economy:
In public statements before the National Assembly on July 23, 1950,
and January 4, 1951, Defense Minister Moch declared that it is the policy
of the Government to remove Communists from "posts of command", although
not from lesser positions, in public administration and the national
economy.
In pursuing this policy, the Government has taken various steps,
some of which have been publicized. On November 6, 1950, it removed
four Communists mayors and 'twenty-nine Communist deputy mayors of Paris
communes who had transformed their "ma-tries" into Communist propaganda
centers. On January 10, 19151, it purged the Commissariat for Atomic
Energy of all remaining Communists. Also on January 10, 1951, it ordered
the removal from office of all public servants who stopped work on the
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preceding day to participate in the Communist demonstrations against
General Eisenhower; and the French military authorities suspended twenty-
one workers from national defense plants for the same offense.
In addition to these public acts, the Ministry of the Interior has
informed the Embassy that numerous Communists or fellow-traveling
directors in key posts in public administration and the national economy
have been removed from their positions.
STATUS: Relatively satisfactory.
RECOMMENDATION: A status report might be solicited.
(3) Outlawirj of International and Foreign Communist Organizations
and Fronts:
Over the past year the Government has outlawed the leading international
and foreign Communist fronts with headquarters in Paris. These include,
in the sphere of trade union activities, the World Federation of Trade
Unions; in the sphere of pacifist activities, the Committee of the World
Congress of Peace Partisans (subsequently renamed World Peace Council);
in the sphere of women's activities, the International Democratic Federa-
tion of Women; and in the sphere of youth activities, the World Federa-
tion of Democratic Youth. It is noteworthy, however, that it has so far
taken no action against the French affiliates of these international
Communist fronts, i.e., the Confederation Generale du Travail, the Com-
battants de la Paix et de la Liberte and the Conseil National du Mouvement
de la Paix, the Union des Fommee Franchises, and the Union de la Jeunesse
Republicaine de France. Nor has it taken steps to outlaw three international
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Communist fronts of somewhat lesser importance: in the sphere of the
intelligentsia, the Bureau de Liaison des Intellectuels pour la Defense
de la Paix (product of the Wroclaw Congress); in the sphere of.political
prisoners, the Federation Internationale des Anciens Prisonniers Politiques;
and in the sphere of law, the Federation Internationale des Juristes
Demoorates.
The Government has dissolved those foreign Communist groups which
were closely associated with the para-military apparatus of the French
Communist Party. In this connection, on September 7, 1950, it abolished the
Spanish Communist Party here, together with its organ Mundo Obrero, and
on the same date rounded up for expulsion from France two hundred eighty-
eight foreign Communists, the majority of whom were Spanish. On December
26, 1.950, it dissolved the Union des Garibaldiens et Volontaires Italians
dans l'Armee Francaise, a Communist front for para-military action composed
of Italian nationals.
STATUS: Relatively satisfactory.
RECOMMENDATION: The Government might be encouraged to take further
action with respect to the remaining international Communist fronts, and
possibly initial action with respect to their French affiliates.
(4) Prohibition of Soviet and Cominform Periodicals:
On. December 27, 1950, the Government ordered the prohibition of the
sale and distribution in France of five leading Soviet periodicals published
in the French language. on ~ranuary 6, 1951, it issued a similar order with
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respect to the weekly Cominform organ, Pour une Paix Durable, Pour une
Demooratie Populaire, published in Bucharest. It should be noted however
that this organ was subsequently published here in almost identical form
and content under the title) Paix et Democratie. In its new format, it has
been edited by the Communiet Deputy Auguste Touchard.
STATUS: Relatively satisfactory.
RECOMMENDATION: As the Government has taken no steps to prohibit the
Cominform organ in its new format, it might be encouraged to do so,
particularly as Touchard was defeated for re-election on June 17, and
therefore no longer enjoys parliamentary immunity.
(5) Prohibition of French Communist and Communist Front Demonstrations:
Since the beginning of the year the Government has prohibited the
holding of three Communist-organized public demonstrations. The first
was the anti-Eisenhower demonstration scheduled to take place on January 24
in front of SHAPE Headquarters. The second was that scheduled for February
15 by the Communist front Federation Nationale des Deportee Internee et
Resistants Patriotee to protest against the arrival in Paris of German
military representatives to participate in the discussions on a European
Army. The third was the mass "peace" rally sponsored by the Conseil
National du Mouvement de la Paix, the French affiliate of the World Peace
Council, which was to have been held in Paris on July 15.
STATUS: Satisfactory.
RECOMMENDATION: None.
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(6) Encouragement of National Deviationism within the CPF and the CGT:
For the past several years, the Government has given discreet assistance
to the national deviationist movement led by Darius LeCorre within the CPF
and the CGT, and to its organ La Lutte. This movement publicly emerged
some weeks before the recent national elections as the Mouvement Communist
Francais Independant and polled some twenty-three thousand votes at the
elections themselves. Although it constitutes no serious threat to the
Party as yet, it presents a rallying-ground for dissidents. The numerous
attacks which the Communist press has made upon it are an indication of
its nuisance value.
STATUS: Satisfactory.
RECOMMENDATION: None.
(7) Anti-Communist Propaganda:
On September 8, 1950, the Government established an anti-Communist
propaganda organization, "Paix et Liberte", which has done an impressive
Job in countering Communist propaganda, particularly with posters. It
now proposes to expand its propaganda activities through other media.
STATUS: Satisfactory.
RECOMMENDATION: None.
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B. ACTIONS WHICH THE FRENCH GOVERNMENT MIGHT TAKE TO
DEPRIVE THE FRENCH COMMUNIST PARTY OF ITS MATERIAL
__
RESOt ROES AND REDUCE ITS POWER.
Short of outlawing the Communist Party itself, the French Government
might resort to a number of measures calculated to reduce somewhat Its
power and material resources. In the first place it might take steps
to implement further the program of anti-Communist action which it has
already been pursuing and which is outlined in my memorandum of June 16.
In addition to these measures, there are others necessitating governmental
action which might be considered. Some of these may be briefly summarized
as follows:
1. Allocation of Newsprint:
A governmental agency, the Societe Professionelle des Papiers de
Presse, which is under the joint direction of the Federation Nationale de
la Presse Francaise and the Ministry of Information, is the only authorized
importer and distributor of newsprint in France. It allocates a percentage
of newsprint to the Communist press and publications, in accordance with
their circulation, at prices below those of the world market. In addition
to the newsprint thus made available, the Communists may also import news-
print directly from abroad at world market prices.
The Government might consider administratively reducing the allocation
of newsprint to the Communist press and periodicals and limiting the amount
of newsprint which the Communists might import from abroad on the free
market.
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2. Availability of Press E(ui went:
The Societe Nationale des Entrepri.ses de Presse (SNEP) is a govern-
mental agency charged with the responsibility for administering the press
equipment and properties of those publications which appeared during
the Occupation and were confiscated at the time of the Liberation as
collaborationist. The properties in question were taken over at that
time by the Communists, Socialists and MRP, roughly on a tripartite basis
of distribution. The SNEP subsequently formalized the de facto distribution
which had thus been effected and has since administered the properties.
The Communists are understood to be in heavy debt to SNEP, despite the fact
that a recent effort of theirs to organize a so-called "National Sub-
scription in Defense of the Democratic Press" was designed to alleviate the
situation.
The Communists are by no means the only group heavily indebted to
SNEP. However, the possibility of requiring the Communists to pay up
their indebtedness or abandon the properties in question might well merit
constderati.on.
3. A New Definition of Representivity:
The Communist-controlled CGT could perhaps be dealt a blow by legisla-
tive action amending the Law of February 11, 1950 on Collective Bargaining.
This law sets forth several qualifications for so-called trade union
"representivity", one of which is that of "independence" and another that
of the "patriotic attitude tender the Occupation" of the trade-union in
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question. The latter qualification plays clearly into the hands of the
Communists, whose so-called "patriotic attitude" was coterminous with the
Occupation.
This clause might well be modified to extend "representivity" only to
those trade unions whose "patriotic attitude" is expressed in the principle
of unqualified adherence to the national defense under all conditions and
at all times. This would confront the CGT with the dilemma either of
having to renounce its numerous defeatist pledges, such as that of never
fighting the Soviet Union, or its legal claim to "representivity".
4. Permanent Trade Union Ens:
Numerous permanent trade-union employees, both CGT and non-CGT, are
paid by the State in the sphere of nationalized industry or by management
in the sphere of private industry, rather than by the trade-unions them-
selves.
The Government might consider whether it would be feasible to remove
the CGT permanent employees from its payroll.
5. Social Welfare Benefits:
Social welfare benefits in nationalized industries are subsidized in
part by the State. Moreover, in view of the predominance of the CGT
within the trade-unions themselves, they are administered in large part
by the Communists. The result is that the Government thus frequently makes
indirect contributions to the maintenance of the CGT, and that the Com-
munists may use this means for exerting; political pressure on the workers.
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Measures might be considered for modifying this situation,
The foregoing are merely suggestions for anti-Communist governmental
action. The French may well have some of these, as well as others,
in mind. Each would require more detailed technical study before deciding
whether it Is feasible or desirable and any relating to labor would
presumably require informal consultation with our union representatives
on the ICFTU.
There are other possible measures which might well merit attention,
such as regulation of the right to strike in public services, which is
now unlimited, and the strengthening of legislation on military indiscipline
and sabotage, on the law on the press with regard to defamation, and on
parliamentary immunity to prevent the latter's serving as a cloak for
Communist deputies to disobey the law.
Probably none of these acts would be particularly effective or
popularly acceptable in Itself unless it formed a part of a broad., methodical
governmental program for anti-Communist action. If, for example, all
non-Communist parties in the Assembly united to pass a general piece of
legislation on intelligence with the enemy, a specific sanction, such as
depriving the Communists of newsprint, would be fitting and proper
retaliation for their treasonable propaganda and agitation against the
action of French troops in Vietnam and Korea.
Although it would seem a desirable principle, therefore, that sanctions
be generally carried out in support of specific legislation directed against
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the Communists, they might equally well be called into force in retaliation
against flagrant anti-national acts of the Communists, even where no such
legislation existed at the moment. Thus, when the Communists lay them-
selves wide open on anti-national grounds, such as when in 1949 Thorez
publicly condoned Soviet occupation of France by asserting that the French
people would come to the aid of Soviet troops pursuing an invader on to
French soil, the Government would have been in a justifiable position to
take vigorous measures against the Communist Party then and there. It
might well be encouraged not to let a future occasion of that kind go
unheeded.
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EYEIBIT 2
Memorandum prepared by niehard Eldridge
The attached memorandum was originally prepared as annotated agenda
of certain considerations which might justify critical review. They may be
resumed in these propositions:
1. It was Soviet Russian policy and the conservative reaction of the
majority of individua:_ French working families that sharply re-
duced Communist strength in France during 1947-50. To attribute
the weakening of communism to other lessor factors could load
to a dangerous underestimate of potential communist recovery. In
other words, a reversal of Soviet tactics permitting the French
Communist Party once more to adopt the formula of "national
patriotism" and perhaps "European neutrality" might, within a
short period, restore Communist ?Drostige, lead to another Popular
Front government and the collapse of American policy in France.
2. American policy has in effect preserved the traditionally instable
French social structu:^e by restoring"the production. levels prerequi-
site to political and social stability. At a critical moment,
intelligent American action was instrumental in preventing the
destruction of the non-communist center (Jouhaux group) of the
French CGT and facilitated the survival of other small groups.
American initiative probably saved France from a major social
revolution during the period 1947-48. But American policy has
not and doubtless could not of itself alter the unhealthy French
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structure of national income distribution; it could not break
down restraints upon output, trade and prices that have been
accentuated since the Liberation. It was this unhealthy but
long established social structure that fostered the phenomenal
growth of Christian and Marxist Socialism and Stalinist Communism
during the period 1919-50, a period in which French industry
stagnated because of its policies of restricted output, wide
profit margins and low wages. The attached annex of official
production indices indicate that French industrial production in
1949 was less than in 1930 and not one third more than in 191.3..
3. It seems clear from Socialist and leftwing MRP statements, re-
garding the conditions of their participation in cabinets,
that no democratic French government can successfully undertake
a genuine, large-scale, effort for national defense without
maintaining and possibly increasing the presently compressed
real wages of the lowest wage groups. It is equally clear that
the Socialist Party would commit suicide if it did not thus
take account of worker discontent and Communist competition, It
does not appear probable that the general elections of 1951 will
alter this situation.
4. American PId to some organizations in the French labor movement
and to some groups in the Socialist Party may have saved these
vitally important elements from virtual elimination. However,
aid was mainly restricted to non-productive forms, namely,
f_
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guaranteeing the budget of the governing bodies and Headquarters
of FO (and lesser groups) end meeting the inevitable deficits
of the incompetent management of the Paris Region Socialist
Party organ, the Populaire. One half of the non-communist
labor movement, namely the CFTC (Christian labor unions), received
no American aid worth mentioning. Productive stimulation of
the healthier regional and lower-rank FO labor unions and
Socialist Party agencies has been wholly inadequate.
5. Various measures should be taken to provide repetitive tests of
the efficacy of aid or other actions taken in France: The tests
should be made by a source independent of the agency or agent
initiaL?ing the action. Too often in the past, glowing but
inaccurate reports have been sent to Washington regarding the
efficacy of (propaganda) actions undertaken.
6. American aid and other protects should not be considered practi-
cable, at least in principle, unless initiation and implementation of
specific projects by French organizations is assured. In general
actions undertaken should be intitiated by French organizations
with American support appearing only subsequently, if at all. If
a given American proposal is such that no influential French
organization or pressure group can be found to initiate and pro-
mote it, the proposal should be abandoned or revised.
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LABOR PROGRAM IN FRANCE
In any examination of the French labor situation, consideration must be
given to those major factors that really dominate the labor situation.
The principal factor in the absolute, but not relative, decline of com-
munist strength in organized labor has been the tactics imposed upon CGT by
Soviet Russia, namely, anti-nationalist actions ranging from support of in-
dependence movements in the overseas -territories to opposition against all
national and international efforts for the recovery of French economy and
French national defense.
A second major factor has been the passive resistance of the French workers
to anti-patriotic policies of CGT; massive withdrawals from the communist-
controlled CGT took place in the period 1916-48, while in the rank and file
and among the lower union officials much open and considerably more covert dis-
content has been manifested against CGT anti-nationalist political actions.
Whereas the above two factors have materially weakened communist. strength,
both in the CGT and in the country as a whole, other major factors have been
predominant in preventing non-ccmmunist labor organizations from acquiring
strength:
The so-called "anti-labor" policies of the French government simply reflect,
in the best parliamentary tradition the necessity for parties in power to favor
their respective supporters. Farmers, tradesmen, artisans and small enterprise,
as well as large scale industry, have materially benefited from government
policy or lack of policy in many fields. On the other hand, comparable solici-
tude for the working class would. have necessitated direct action on price, profit,
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low wage and fiscal problems which the government parties have been politically
incapable of undertaking without sacrificing group interests of their own
Supporters.
These considerations indicate the difficulty of utilizing American aid in
the solution of French national economy problems such as the highly organized
control of prices and profit margins of the postwar period which has so
naterially promoted price inflation.
French labor problems may be divided into:
Problems of general state legislation and regulation, including abusive
trade practices, fiscal evasion, large scale clandestine capital exports, and
advanced social legislation. (Nationalization and other legislative measures,
adopted in a period of Communist Party cooperation with the government, have
had for effect the state delegation of authority to the communist-dominated
CGT which controls the bulk of consultative plant committees, shop delegates,
the hiring and firing of longshoremen as well as the maintenance of continued
if reduced numbers of commtuiists ox fellow-travelers in key-positions of various
ministries, such as National Education, Information, Labor and Industrial Pro-
duction, etc.).
In this group might also be classified state and municipal aid to the CGT.
!.n estimated one billion francs a.naually of state and municipal aid to CGT has
been consistently rendered during the 1947-50 period during which the CGT made
every effort to disrupt French economy and to undermine the F:each government.
This aid takes such forms as the Free CGT use of municipal labor "bourse" buildings
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in the principal cities of France and, in some cases, of municipal payments
of wages to full-time regional CGT officials. In nationalized enterprise
such as Coal, Gas and Electricity, Railways, etc,, it has long been an estab-
lished practice that trade unionists elected to full-time trade union posts
should continue to receive their wages and normal promotions from the nation-
alizad enterprise in question. Incidentally this practice is also maintained by
substantial number of large private enterprises,
Many other communist "front" organizations receive subsidies from the
French government in the form of free use of requisitioned bwildings, free or
reduced transport rates, etc.
An analysis is being made of the national and municipal budgets, so as to
determine an approximate figure of state aid to the CGT. One estimate made
a year ago calculated such support at more than one billion francs.
State aid to Force Ouvriere and CFTC is given in a lessor degree; the
unconditional elimination of such aid to all groups would therefore be violently
opposed by FO and CFTC, not to mention the Socialist Party and the MRP, both
of which also receive certain forms of state aid either directly or through
intermediary "front" organizations.
Most significant aspect of state influence upon the labor situation has
been the adverse effect of stat.a policies upon real wages. The "government
parties" have been generous in subsidies to group interests representing their
own constituencies; direct subsidies have been given to agricultural and some
other groups, and indirect subsidies in the form of subsidized low prices to
large consumers of the products and services of nationalized enterprises, such
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as Coal and Transport. Subsidies have bean a heavy burden upon the national
budget and have been largely transferred to the principal tax paying and con-
sumer group, namely the wage earning class,. In addition to indirect subsidies
benefiting "private" enterprise, the state has in a number of cases, by decree,
delegated governmental regulatory powers to representative industrial groups
for the strict control of price, marketing and other trade practices. What
may be considered one of the most harmful subsidies to agriculture, industry
and trade has been the deliberate postponement of fiscal reform and the failure
to collect ;axes o
In many industries, the discipline imposed by strong trade associations is
now far beyond anything 1iown in France before the war. Whether in marketing
or in labor policy, trade associations in key industries now largely dictate
the policies of their members and possess strength to impose penalties which
in important cases has been fortified by state delegation of authority.
Surveys of the notable extension of state delegated authority since the prewar
period and. of other cartel forms of trade association control should summarize
the documentation available in French government agencies. Since low real
wages are a fundamental obstacle to economic expansion and social stability,
intelligent long term action in the field of trade practices probably would
be the most effective, if the most difficult, method of bringing relief to that
third of the French working class which is underpaid. even by low prewar
standards.
As a general rule it is of course obvious that any American action under-
taken to encourage French political and social recovery should be preceded by
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careful review of essential facts of the problem and by consultation with
interested French groups. The :initiative of important actions in political,
economic and social questions should be assumed by coordinated French group
action, with subsequent American support. In many cases, ability to observe
this procedure constitutes a test of the practicability of the action under
consideration. Obviously, all actions should be subject to review and approval
in terms of American overall policy in France.
The followLag recommendations for possible actions exclude questions
relating to the 1951. general elections, to the "neutralist movement" and to
special Marshall Plan matters, such as pilot plants, housing projects and
technical assistance programs,
I. Government
a) Useful changes in legislation, regulations, administration policy,
aiming at:
1) Labor legislation: revision of definition of "representativity"
of labor organizations to penalize those (communist) organiza-
tions and individuals with past and current record of sabotage
of national defense and of reconstruction; elimination of com-
munist control. of hiring halls for longshoremen (result of
existing legislation); elimination of communist control of
plant committees and shop stewards in key national defense oc-
cupations (plants, transport and communications, etc.).
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2) Trade practices: revision of decrees, etc., delegating state
authority to trade associations for allocation and importation
of products and materials, production, price and other controls
with a view to imposing minimum standards in price and possibly
labor policy.
31 Nationalized enterprises: reforms in this field are under way
t+)
5)
but would benefit from closer American support, (Separate
sup-veys should be made for transport, communications, coal,
gas and el,ectrici y) ,
State and municipal subsidies: This aid is perhaps the single
most important source of communist financial strength in main-
taining a large scale national organization and, in the case of
CGT, represents an estimated one billion francs annually.
Communist influence in government and. autonomous agencies: it
remains important in the Ministries of: Information (broad-
casting, cinema, allocation of tlerxsprizit and paper to communist
press - with credit extensions - present communist possession of
state-requisitioned or confiscated printing plants); National
Education (partial control of hiring and promotion of teachers,
especially technical and secondary schools, strong position in s
some university departments); National Economy, Labor; utilization
of municipal resources in communist-dominated municipalities, etc.
Surveys of the extent of communist influence in each important
government agency should be made and periodically revised.
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II. Political Parties
Consultation and cooperation with the international sections and key
committees of political parties and, through them, with Assembly Commissions
would be especially helpful in, determining and promoting the prospects of
contemplated measures. Useful support can be thus developed in those com-
mittees where none would otherwise exist.
III. National Economic Council, Trade Associations, etc.
In promoting public and private actions, avrious (conflicting) interests
can be identified and contacted. in the CNPF (Employers) and similar organiza-
tions, end effective alliances made for the promotion of specific projects.
CGA (Agriculture), CGC (Technicians), Jeunes Patrons and other important
group interests are in a number, of cases prepared to support specific projects
listed. (That is, either the entire organization or important subsidiary
associations).
IV. Churches
The Catholic Church compares favorably with the Communist Party in the
scope and strength of its organization and influence. It has a leading part
in the application of social policies and its cooperation in many forms of
social action could be obtained.
V. Labor Organizations.
The notorious ineffectiveness of labor unions in the re-establishment
of a non-Communist labor movement is the result of political and social factors
partly exterior to labor organizations.
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It is however also due to the character of leadership, and the tendency
of Americans as well as other interested outside groups to encourage one
French non-Communist labor organization to compete with another, rather than
to present a common front on a minimum program against the CGT. Large scale
aid concentrated at top levels sharply decreases leadership interest in massive
increases in membership; it seems certain that not one fourth of American aid
has been directly used, for membership campaigns.
A curious aspect of American aid has been that it has ignored one half
of the non-Communist labor movement in France, namely the (Christian) CFTC.
In the June 8, 1950 Social Security elections, the CFTC received substantially
more votes than FO, although FO received the bulk of American aid.
A review': of past American aid would be difficult to make because various
American agencies indulge in separate unreported actions of an uncoordinated
character.
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EXHIBIT 3
MEMORANDUM
July 26, 1951
Up to the present time the program and objectives of the United States
for the reduction of Communist activities and power in Italy based upon a com-
bination of propaganda and assistance in economic recovery has been effective
in preventing the Communists from taking over in Italy. It is now clear, how-
ever, after viewing the results of the recent municipal elections in the north
of Italy that a new approach is required toward this problem if we are to
succeed in actually reducing Communist strength here.
Vast sums of money are being expended in Italy under the authority of the
U.S. Government in various ways for propaganda and information with regard to
the American assistance toward Italian recovery and also with a view to in-
fluencing Italian public opinion toward an attitude more favorable to the
United States.
The time has come when it would seem appropriate to approach the Italian
Government with a view to inducing it to improve its propaganda and informa-
tional services with a view to making 6 better presentation of what the Italian
Government is doing along the lines of improving conditions in Italy. The most
effective action in influencing the Italian people away from Communism would be
that taken by the Italian Government itself and any part we take in that effort
should be along the lines of assisting in an Italian program of action without
too much evidence of American participation.
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A further step which I consider essential would be to review the programs
which are now supported either by U.S. dollar funds or through counterpart
funds with a view to ascertaining the total sum available for propaganda pur-
poses in Italy as far as the United States Government is concerned. It seems
to me that a great portion of this available sum would be more effectively used
if it were dedicated to the purpose of assisting the Italian Government in carry-
ing out a vigorous anti-Communist program and in extending the Free Trade Union
movement. It seems to me another field which would be appropriate in combating
Communism would be to assist the non-Communist cooperatives as they are in most
cases very close to the people and operate in close connection with the in-
dustrial centers and also in the agricultural field.
A way should be studied in which the new democratic administrations which
have just taken over in the important northern cities could be assisted in
rendering services to their respective localities in a way which would sharply
contrast the benefits obtained from democracy with the lack of consideration
for the people's interests as exhibited by the former Communist administration.
There may be many ways such as building or improving the public services, in-
stituting housing programs and specific benefits to the communities of a similar
nature.
If sufficient funds are available, a most effective way of combating Com-
munism is by word of mouth and organizing the democratic political groups par-
ticularly in the industrial centers in such a way that the workers are approached
on a personal basis and made to understand what the Communist regime is really
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after and how the interests of the workers and people generally would be com-
pletely subordinated under the slave rule of a Communist regime.
Signed, James Clement Diem
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EXHIBIT 14
To report dated 15 September 1951 entitled: Analysis
of the Power of the Communist Parties of France and Italy
and of Measures to Counter them.
Memorandum prepared by Allen W. Dulles, covering a meeting held at the
American Embassy at Rome on July 25, 1951 attended by the Ambassador and
Minister Thompson of his Staff., Minister Dayton and Colonel Lane of ECA,
Mr. Dulles, and a w representative of CIA, to discuss measures which might
be taken in Italy, particularly of an administrative or legislative nature,
to reduce the threat which the Communist Party of Italy and the Communist
dominated labor union, CGIL, :represent for free government and for the
defense of Western Europe.
Consideration was given to urging the Italian government to make a
strong overt declaration against the Communist Party. There was some
difference of opinion whether it was wise to attempt this at the out-
set both because it might prematurely alert the Communists and because
it was doubtful whether strong words, if forthcoming, would be followed
by strong action. In general it was the majority view that it would be
best to start with specific steps against the Party and the CGIL, and
in particular that the government should be urged to move to eliminate
Communist Party members who held significant government payroll positions.,
In this connection it was felt that particular emphasis should be placed
on the security factors and that action of this nature should initially
be directed against Communists in the Defense Establishment, in
communications, transportation, public utilities, government arsenals,
navy yards, and strategic industries*
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B. IN THE FIELD OF LABOR.
1. Redistribution of government owned ex-Fascist property now
in the hands of the COIL. (it was generally agreed that every effort
should be made to get the full facts as to the precise properties which
the CGIL held under government favor and move against those which were
of the most strategic importance. It was also felt that if certain of
these properties could be diverted from CGIL to the non-communist union?
CISL., this would be most desirable.)
2. Removal of communists from labor employment advisory boards,
3. Consideration by the government of new labor legislation cover-
ing strikes by government employees. (It was felt that before moving
on this point it would be well to appraise the results of current
legislation in this field.)
4. Acceleration of the taking by Confindustria of an anti-
communist position and a position more favorable to CISL,.
5. Promotion of effective government investigation of cases of
intimidation of non-Communists by Communists. (The government is
already doing something along these lines but more could he done.)
6. Development of a public works program to reduce unemployment.
(The difficulty here is the present inability of the government to
finance any ambitious program along these lines. It was felt that
such a program, when feasible, should be tied in with taking the
excess workers off the rolls and putting them into productive activity.)
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7. Improvement of social security and insurance legislation.
(It was felt that this was a long term project in view of the govern-
ment's financial position, but worthy of study.)
8. Governmental refusal to confirm the election of Communists to
important positions in port agencies where the Minister of Merchant
Marine has control.
Co IN THE FIELD OF SECURITY.
1. Establishment of a commission to examine the security Pastors
relating to the employment of Communists, particularly in government
utilities and strategic industries,
2. Investigation of Communist activist "schools" and preparation
for effective legal action against those engaged in the illegal movement
and caching of arms,
D. IN THE FIELD OF THE PRESS.
1. Investigation of the Possibility of terminating the lease by the
Italian government to the Communists of the important UESISA printing
plant where the Communist "Unita," "Avantiut and other Communist sheets
are published.
2. Action to curb the false and subversive utterances of the Communist
press and other Communist information media. (This would require a more
effective government information program.)
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E. IN THE FIELD OF GOVERNMENT AND 4DMIhUTRATION.
1. Establishment of amore equitable and effective tax system.
(It was felt that this reeomm.ondation should be viewed in the light of
proposed legislation on the subject.)
2. Progressive steps to remove Communists from administrative
positions in government ministries, in schools and in universities.
(It was conceded that it would be difficult to get the government to
move along these lines, but that it was worth considering.)
3. Curtailment of governmental financial assistance to communes
which contribute financially to communist agencies, (Here the grant
by the City of Milan to the CGIL was mentioned as an example, This is
also a difficult point, but even a threat to take action might make
the communes more careful in the support they give to communist organiz-
ations.)
F. SOCIAL AND ECONOMCC
1. Consideration of the reorganization of the social security
agencies with a view to curtailing and eventually eliminating Communist
representation.
2. Examination of the practices of communist controlled cooperatives
and communist controlled export-import firms which engage in certain
selling practices whereby they acquire funds for Communist and Soviet
operations in Italy.,
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