CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000500080001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 32
• Document Creation Date: December 16, 2016
• Document Release Date: January 10, 2005
• Sequence Number: 1
• Publication Date: May 26, 1955
• Content Type: SUMMARY

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CQNc1DEMT1L
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 14
OCI NO. 4634/55
26 May 1955
Zi , H W7O
TE''~' FiE`J9ELti`ER:
DA
DC3r:urvi4
NO CHANGE iN CL SS. ^
^ DECLASSiF1ID
CLASS. CHANGF-0 TO: IQ
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DIA and DOS review(s)
completed.
CON FlOE I-L.
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
FOUR-POWER CONFERENCE . . . . . . . . . . . . . . . . . . Page 1
The USSR continued last week to press for a relaxa-
tion of international tension through "businesslike"
negotiations at the "summit" and stressed that the broad
range of issues to be discussed could not adequately be
covered in three or four days. At the same time, however,
Moscow warned that the status of the Eastern European
Satellites and the international Communist movement were
SOVIET-YUGOSLAV CONFERENCE . . . . . . . . . . . . . . . . Page 1
The Soviet-Yugoslav conference in Belgrade is un-
likely to produce any major shift in Yugoslav policy.
Soviet leaders Khrushchev and Bulganin would hardly have
consented to the trip, however, if they were not reasonably
certain that the two governments can annou
areas of agreement at the end of the visit.
SOUTH VIETNAM . . . . . . . . . . . . . . . . . . . . . Page 2
The rapid reinforcement of Vietnam army troops in the
Hoa Hao area in western Cochinchina is designed to force
the rebels to accept government terms for the integration
of their troops into the national army. Premier Diem
continues to press for a high-level conference of French,
Br
itish American and Vietnamese representatives.
F_ I
NOTES AND COMMENTS
Satellite Reaction to Soviet Visit to Belgrade: Soviet
overtures to Yugoslavia, the only independent Commu-
nist regime outside the Sino-Soviet bloc, may gradu-
ally strengthen independent nationalist sentiment
among the Satellite populations and even within the
CONFIDENTIAL
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
Soviet-Japanese Negotiations: In the negotiations with
Japan, sc e u e to open in London in early June, the
USSR's main objective will probably be to gain quick
agreement to a resumption of diplomatic relations.
The more troublesome territorial issues are likel to
be left for future deliberation. Page 2
East Germans Remain Firm on Toll Issue: East Germany,
badked by the Soviet Union, is holding to its un-
compromising position on the truck toll question and
is threatening retaliatory measures against the selec-
tive West German embargo. Soviet ambassador Pushkin
made clear at the high commissioners' meeting on 20
May, as have East German leaders, that the purpose of
the truck toll is to force de facto recognition of
East Germany by the Federal Republic.
Page
Latest Communist Tactic Against German Rearmament: The
French and East German Communist par es are actively
assisting the feeble Communist Party of West Germany
in trying to organize a broad antirearmament front
in West Germany. The campaign is aimed chiefly at
gaining the co-operation of the West German trade
unions and the Social Democratic Party, both of which
are staunchly anti-Communist but are opposed to
Chancellor Adenauer's rearmament program.
. . . . . . . . . . . . . . . . . . . Page
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USSR Offers New Incentives for
Corn Production:
A recent soviet decree indicates keen concern by
the Soviet leadership over the lag in the corn
expansion program. Party First Secretary Khrushchev
has been the principal advocate of this program.
. . . . . . . . . . . . . . . . Page
Formosa Straits: There was no significant ground or air
activity n the Formosa Straits area this week.
Chinese Communist military training and construction
work on airfieldsand artillery positions in the
coastal region continues. F_ I . . . . Page 6
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
Growing Diplomatic Isolation of Rhee Regime: The growing
diplomatic isolation of the Rhee reg me is high-
lighted by South Korea's refusal to attend a confer-
ence of the Asian People's Anti-Communist League
because Nationalist China had invited Japanese ob-
servers. I- I . . . . . . . . . . . . . . Page 7
North Vietnam: With Viet Minh control over North Vietnam
comp le e, following the acquisition of the port of
Haiphong on 13 May, French influence--except as rep-
resented by the Sainteny mission--has been virtually
eliminated from north of the 17th parallel. Russians
as well as Chinese have arrived in considerable num-
bers to help the Viet Minh regime. The country faces
a severe food shortage and control measures over the
population are being tightened.
Singapore Riots Indicative of Communist Strength: Commu-
nist influence has increased in Singapore's Chinese
community as a result of the recent strikes and riots.
The Communists are now in a position to create more
serious trouble whenever they choose. British authori-
ties are reluctant to take strong countermeasures for
fear of undermining the efforts of the fledgling local
government and alienating Britain's friends in Asia.
Page 8
. . . . . . . . . . ... . . . . Page 10
Afghan-Pakistani Situation: Since Pakistan rejected the
,terms of the Saudi Arabian "forgive and forget"
mediation offer on 19 May, the activities of both
Afghanistan and Pakistan, as well as would-be
"mediators,'} have apparently centered around trying
to decide what matters should be investigated by
Egypt, Iraq, Iran, and Turkey and whether these
matters should be studied by these nations jointly
or separately.
. Page 11
Algeria: The security situation in eastern Algeria has
deteriorated since a state of emergency was declared
on 7 April. The French government has reinforced
militar and Police forces assigned to the area.
. . . . . . . . . . . . . . . . . . Page 12
SECC~T
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26 May 1955
Dutch Cabinet Crisis: There is little likelihood that
another UTZH government can soon be formed to
replace the Drees coalition cabinet which fell on 17
May over a bill on rent increases.
. Page 12
Honduran-Nicaraguan Border Dispute: The border dispute
between Honduras and caragua, which erupted anew
in early May, is aggravated by internal politics in
Honduras. Serious violence is unlikely, though
there may be minor border clashes. The issue may
eventually be referred to the International Court
of Justice or the Organization of American States.
. . . . . . . . . . . . . . . Page 13
PROGRAMS TO OVERCOME SATELLITE MILITARY DEFICIENCIES . . . Page I
The formation of the Soviet-Satellite combined
military command will probably be followed by continued
efforts to improve the effectiveness of the East European
armed forces. Increased military allocations in four
of the five Satellite budgets thus far announced under-
line the importance the bloc attaches to this program.
D
IRAN'S STABILITY THREATENED BY RESURGENCE OF RELIGIOUS
FANATICISM . . . . . . . . . . . . . . . . . . . . . . . . Page
The steps the Iranian government has taken against
the Bahai religious sect indicate the government's
susceptibility to pressure from the fanatic Moslem clergy
which may attempt to regain its traditional influence in
civil affairs.
JAPAN'S FOREIGN TRADE PROSPECTS IN 1955 . . . . . . . . . Page 6
Japanese foreign trade may remain in the black during
1955, but by a small margin. A number of temporary factors,
which helped Japan achieve a payments surplus equivalent to
$100,000,000 in 1954, will probably decline in importance,
and a deficit may occur in the dollar accounts. This would
intensify pressure in Japan for increasing trade with the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
OF IMMEDIATE INTEREST
FOUR-POWER CONFERENCE
The USSR continued last
week to press for a relaxation
of international tension through
"businesslike" negotiations at
the "summit."
Soviet propaganda stressed
the line that Moscow is the sin-
cere champion of negotiations
and peace while the Western
powers are trying to prevent
"honest negotiations" by rais-
ing "technical obstacles" re-
garding the place and duration
of the conference.
Molotov's presence at the
special session of the United
Nations General Assembly in
San Francisco in June may afford
an occasion to work out final
arrangements for the heads of
government conference.
Moscow maintained its in-
sistence that the conference
should discuss a broad range
of issues and stressed that
consideration of urgent in-
SOVIET-YUGOSLAV CONFERENCE
The Yugoslav-Soviet con-
ference in Belgrade is unlikely
to produce any major shift in
Yugoslav policy. Soviet leaders
Khrushchev and Bulganin would
hardly have consented to the
trip, however, if they were not
reasonably certain that the two
governments can announce sub-
stantial areas of agreement at
the end of the visit.
The leaders of the two
countries can easily agree on
ternational problems cannot
be completed in three or four
days.
The USSR made clear that
neither the "Communist pro-
gressive movement" in capital-
ist countries nor the status of
the Eastern European Satellites
is a negotiable issue.. A Pravda
editorial on 21 May stated flat-
ly that "there can be no ques-
tion" of raising such subjects
at a "businesslike" conference.
Moscow's sensitiveness on
this subject was reflected by
Pravda's charge that Dulles' de-
scription of the Austrian treaty
as a victory for "policies of
strength and firmness" was de-
signed to prepare the ground for
a "wild proposal" that the con-
ference discuss the question of
restoring the "old regimes in
the People's Democracies" and
banning the Communist move-
ment in capitalist countries.
a joint statement renouncing ag-
gression and endorsing peaceful
coexistence.,
There may also be some gen-
eral statement urging considera-
tion of the unification of Ger-
many and the reduction of arma-
ments. The Yugoslav foreign
minister assured the French and
British ambassadors this week,
however, that his government
would not join the USSR in en-
dorsing the neutralization of
Germany.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
Agreements expanding the
present trade arrangement of
$10,000,000 each way annually
and providing for the return of
Yugoslav nationals held in the
USSR are likely to be concluded.
Cultural exchanges and per-
haps even economic and technical
assistance agreements may be
arranged. In particular, the
USSR may extend to Yugoslavia
its offer to share knowledge on
peaceful uses of atomic energy.
Reciprocal civil aviation privi-
leges may also be discussed.
It is conceivable that the
two countries might conclude a
nonaggression pact which the
Yugoslavs would feel they could
rationalize to the satisfaction
of their Balkan allies. Yugo-
slavia is unlikely, however, to
join the Eastern European De-
fense Command or to take steps
flatly inconsistent with its
present Balkan commitments or
strongly prejudicial to its con-
tinued receipt of Western aid.
Since First Secretary
Khrushchev is heading the Soviet
delegation, party relations are
almost certain to be a subject
for discussion despite the Yugo"
Slavs' protestations that they-
do not wish to talk about them.
While the Yugoslavs might agree
to some party arrangements which
would enhance the prestige of
Yugoslav Communism, they would
not agree to any relationship
which would weaken the party's
independent position.
There has been speculation
that the Cominform, the instru-
ment used to-oust Tito from the
bloc in 1948, might be abolished.
The USSR may consider this ges-
ture useful as an earnest of
Soviet good intentions toward
Yugoslavia, as well as another
manifestation of Soviet desire
to reduce international ten-
sions. The Cominform's co-
ordinating and informational
functions..would :then}, however,
be,continued under another guise.
The Yugoslavs probably will
not be taken in by gestures of
this kind and would consent to
re-establish close Communist
Party relations with the Soviet
bloc only in the unlikely event
that the USSR appeared thorough-
ly committed to the liberation
of the Satellites and tolera-
tion of independent national
Communism.
SOUTH VIETNAM
The rapid reinforcement of
Vietnam army troops in the Hoa
Hao area in western Cochinchina
during the past week is designed
to force the rebels to accept
government terms for the integra-
tion'of their troops into the
national army.
In a further effort to
strengthen his position prior
to consultations with the Viet
Minh on the 1956 elections,
Premier Diem is pressing for a
high-level conference of French,
British, American, ;and Vietnam-
ese representatives. The Geneva
agreement stipulates that dis-
cussions on the elections are
to take place by 20 July.
The Vietnamese army now
has about 15,Q00 troops in the
area of Hoa Hao influence. All
major cities are under govern-
ment control.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
According to the American
army attache, troop strengths
of the dissident Hoa Hao com-
mandgrs are: General Soai,
7,500; Ba Cut, 3,300; Lam Thanh
Nguyen, 4,000. National army
units are vastly superior in
firepower, and unity among the
rebel commanders is by no means
assured.
A government spokesman has
stated that no
general offensive
would be launched
against the rebels
unless they ini-
tiated hostili-
ties. Tentative
negotiations be-
tween the govern-
ment and Hoa Hao
leaders are under
way, but the gov-
ernment is not
likely to prove
patient in the
face of drawn-out
haggling.
Premier Diem
fears that unless
centers of dissi-
dent activity such
as that of the Hoa
Hao can be prompt-
ly neutralized,
the French will
be tempted to con-
nive to subvert
his government.
He points out that
General Hinh, now
at the headquar-
ters of Hoa Hao
general Tran Van
Soai, has never
Uiem considers a purported
Viet Minh plan to step up
'..,, ?PHNOM PENH AREAS OF
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AREA OF
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HOA HAO CANTHO ACTIVITY
` PARTIAL
i CONTROL
MAY 1955
0 40 8 1~O
MILES
renounced his French citizen-
ship and is an officer in the
French air force and that his
present activities are there-
fore the responsibility of the
French government.
activity in South Vietnam in
July' as justification for an
energetic government security
program. The security effort
is being supplemented by the
arrest And questioning of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
.numerous persons who have been
close to Bao Dai, dissident
elements, or the French authori-
ties. The reported house arrest
of nationalist leader Phan Huy
Quat suggests that the govern-
ment may be pushing the princi-
ple of security to extremes.
The French government has
responded favorably to the Viet-
namese request for a conference
in Saigon, but has demurred at
the idea of a foreign ministers'
meeting. It has suggested to
the American embassy in Paris
that a conference with Vietnam
of the permanent representatives
of the three Western powers
would be preferable and has
stressed the importance of a
joint French-British-American
policy on the 1956 elections
prior to a meeting with the
Vietnamese.
This is contrary to the
position of the Vietnamese govern-
ment, which has recently hinted
it would seek to avoid the elec-
tions. It presumably hopes to
develop a Vietnam-American-British
alignment against the French on
behalf of such Vietnamese objec-
tives as the withdrawal of the
French Expeditionary Corps, at
least from Saigon.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955.
PART II
NOTES AND COMMENTS
Satellite Reaction To Soviet
Visit to Belgrade
The visit of Soviet lead-
ers Khrushchev and Bulganin to
Belgrade climaxes a series of
measures demonstrating the
willingness of the USSR to
reach an accommodation with an
independent Communist regime
outside the Sino-Soviet bloc
and to deal with it on the
basis of sovereignty and equal-
ity.
A Pravda editorial of 20
May was probably intended to
satisfy Yugoslav demands for
public recognition by the Krem-
lin of the validity of the Yugo-
slav brand of Communism.
While recognizing "funda-
mental differences in our un
derstanding of a number of
important problems of social
development," the article
called attention to such simi-
larities between the two systems
as national ownership of the
means of production and the
existence of societies based
on the militant alliance of
the "working class and the toil-
ing peasantry."
Pravda also said that
both states followed a policy
of noninterference in the in-
ternal affairs of other coun-
tries. Soviet interference in
Yugoslav affairs was a major
cause of the Soviet-Yugoslav
split in 1948.
Before going so far in
recognizing Yugoslav Communism,
the Kremlin must have con-
sidered the effects of this
policy on Soviet relations with
the European Satellites.
The Yugoslav minister to
Budapest told the American
minister on 20 May that "one
of the most significant effects
of the Soviet tour to Belgrade
will be its negating influence
on Cominform dogma." He said
that he knew from his connec-
tions with second-level Hunga-
rian party leaders that they
already questioned the infal-
libility of the Cominform which
ousted Tito, and that this
doubt was bound to spread
throughout the Satellites.
The Yugoslavs have also
advanced the theory that a rap-
prochement with the USSR may
result in the purge or demo-
tion of Satellite leaders who
had been active anti-Titoists.
There is no evidence at present,
however, that any of those
leaders presently active are
likely to be purged. For ex-
ample, the position of Hunga-
rian leader Rakosi, who played
an important role in Tito's
ouster, has only recently been
strengthened.
The Kremlin's policy of
rapprochement with a Communist
regime that has openly and suc-
cessfully defied Moscow's pres-
sure may strengthen independent
nationalist sentiment among the
Satellite populations and even
within the Satellite Communist
parties. The Soviet overtures
to Yugoslavia, however, will
probably not result in a Titoist
uprising in any Satellite in
the foreseeable future, be-
cause of the effectiveness of
the Kremlin's control mechan-
ism.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955.
Soviet-Japanese Negotiations
In the negotiations sched-
uled to open in London in early
June, Moscow will probably try
to gaits quick agreement to a
resumption of diplomatic rela-
tions. Such an agreement is
likely to include a token
pledge that neither country
will intervene in the other's
internal affairs.
territory now held by the USSR
should arise, the USSR would
probably try to treat this
problem as related to the with-
drawal of American forces from
bases in-Japan and the Ryukyus.
The more troublesome ter-
ritorial issues will probably
be left for future delibera-
tion. The Soviet negotiators
thus would avoid embarrassing
sources of friction, and the
USSR would retain territory
for later concessions, partic-
ularly if neutralist sentiment
should grow to a point where
the Tokyo government would re-
consider the granting of Ameri-
can base rights in Japan.
Soviet commentary since
December, when the question of
resuming relations with Japan
became a real issue again, has
hinted that Moscow will not
demand renunciation by Japan
of its security ties with the
United States as a precondition
to the establishment of normal
diplomatic and trade relations.
If the issue of a neutral-
ity pact is raised by the Krem-
lin representatives, they will
probably be trying to exacer-
bate American-Japanese rela-
tions rather than to raise a
serious condition for settle-
ment.
If the question of the
return of former Japanese
East Germans Remain Firm
On Toll Issue
East Germany, backed by
the Soviet Union, is holding
to its uncompromising position
on the truck toll question
and threatening retaliatory
measures against the selective
West German embargo.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May, 1955
Soviet ambassador Pushkin
made clear at the high commis-
sioners' sioners' meeting on 20 May, as
have East German leaders, that
the purpose of the truck toll
is to force de facto recogni-
tion of East Germany by ?the , .
Federal Republic:
Pushkin declared that
East Germany is "master" of the
roads" in its territory and
reiterated his previous view
that the toll question must be
.solved by direct negotiations
between East and West German
authorities. Following the
Soviet declaration, the East
German Transport Ministry
promptly repeated its standing
offer to negotiate with its
West German counterpart.
West Germany has maintained,
its position that the truck
toll question falls within the
competence of the high commis-
sioners and has steadfastly.'re-
fused to negotiate on East Ger-
man terms. Following the meet-
ing of the ambassadors, West
German. deputy foreign minister
Hallstein stated that he was
prepared to support drastic
economic measures against East
Germany in spite of reprisals,
provided ,he received the backing
of the Western powers.
The East German represent-
ative at the regular fortnightly
meeting of the.interzonal trade
Latest Communist Tactic
Against German Rearmament
The French and East Ger-
man Communist parties are ac-
tively assisting the feeble
Communist Party of West Germany
in trying to organize a broad
antirearmament front in West
Germany.
The campaign is aimed
chiefly at gaining the co-
operation of the Federation of
commission on 17 May threatened
to retaliate against the selec-
tive West German embargo on
shipments of Ruhr steel and
machinery by curtailing the ex-
port of coal briquettes to West
Germany. This move would strike
at West Berlin, which depends
on East German briquettes for
heating. West Berlin has on
hatid, however, a year's supply
of briquettes..
A number. of new harassing
measures against West Berlin
have been put into effect dur-
ing the past two weeks. Customs
officials at Autobahn check-
points began searching private
travelers for the first time
in over a year. East German
authorities have provided arms
for customs officials at all
road and water checkpoints.
Twelve Western trucks
.seized earlier while carrying
scrap have been confiscated.
Two barges have been confis-
cated and 12 more detained with
prospects that they will also
be confiscated. Western barges
have been barred from the Plauer
Canal and forced to use the in-
convenient Havel River, have
been restricted to certain
specified docking points, and
their crews forced to remain
on board'during transit through
East Germany.
West German Trade Unions and
the Social Democratic Party,
both staunchly anti-Communist
but opposed to Chancellor
Adenauer's rearmament program.
Communist propaganda has
pointed out that since the
signing of the accords, a new
situation exists in which the
German working class is attacked
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
by an economic conspiracy of
the West.
New impetus was given the
campaign in May during the
Liberation Day celebrations in
East Germany. Both Marshal
Zhukov and East German Com-
munist leader Walter Ulbricht
reiterated the necessity of
Joint mass action against re-
armament in West Germany.
Ulbricht stated bluntly
that if the Social Democrats
really believed in their pro-
fessed goal of German reunifica-
tion, the first thing they must
do is collaborate with the Com-
munists on this issue. Si-
multaneously, the West German
Communists released general
proposals for the reunification
of Germany in connection with
which they again stressed the
necessity of collaboration with
the Social Democrats.
The French Communist Gen-
eral Confederation of Trade
Unions has followed the lead
- of the East German federation,
which has stepped up the ex-
change of labor delegations with
West Germany at all levels
since last fall. French Com-
munist leader Jacques Duclos
addressed a workers' rally at
Dortmund in February.
The three Communist par-
ties have made it quite clear
that they would like a movement
resting principally on West Ger-
man labor, and directed jointly
by the West German Communists
and the Social Democrats. It
would actually be controlled by
the East German Communist Party
and trade union organizations.
The French Communists would
co-operate in the general devel-
opment of the West German cam-
paign, at the same time trying
to create an interlocking rela-
tionship between Communist-
dominated labor movements in all
three areas.
Such a French-German work-
ing class relationship would
not only have short-range value
in harassing West German rearma-
ment; it would also open up
possibilities of a long-range
influence on the future of West-
ern Europe.
Even with the support of
the French and East German
parties, however, the West Ger-
man Communists are'not likely
to have any appreciable success
in gaining the collaboration of
either the trade unions or the
Social Democrats.
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SFIRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
25X1
USSR Offers New Incentives
For Corn Production
The Soviet agricultural
press on 21 May published a de-
cree of the party and govern-
ment ordering a sharp increase
in material incentives for rais-
ing corn production. According
to the decree, farm workers will
receive up to 15 percent of the
corn crop harvested over and.
above the pay normally due them.
This action, by a govern-
ment which has given material
incentives less attention in
its propaganda than did the
Malenkov regime, indicates keen
concern by the Soviet leadership
over the lag in the corn expan-
sion program. Party First Sec-
retary N. S. Khrushchev has been
the principal advocate of this
program as the solution to the
USSR's agricultural problem.
His personal prestige is in-
volved in the success of the
program.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
An obvious reluctance to
expand corn acreage rapidly is
caused by relatively highlabor
costs and unfamiliarity of the
peasants with this crop. By
15 May, only 20,000,000 acres
had been sown to corn, although
the 1955 target calls for al-
most 40,000,000 acres. Long-
range plans call for 70,000,000
acres by 1960.
The current emphasis on
production of corn is reminis-
cent of the emphasis given in
the past to the production of
other crops or to special agri-
cultural techniques publicized.
Formosa Straits
There was no significant
ground or air activity in the
Formosa Straits area this week.
Chinese Communist military train-
ing and construction work on
airfields and artillery posi-
tions in the coastal region
continues.
as cure-alls for Soviet agri-
culture.
There is at present no
major food crisis in the USSR,
and the production of food was
slightly. larger in 1954 than in
1953. Output is still below the
prewar level, however, and the
popillation has increased by 13
percent since 1938.
The new corn program is one
more effort to find a means of
reversing these disquieting trends
and thus prevent a possible future
crisis. (rre-
pared jointly with
Chinese Communist naval
operations this week near the
offshore islands were normal.
There has, however, been an
increase in the number of
sightings of lightly armed Com-
munist patrol craft in the
area between Foochow and the
Choushan Islands,l00 miles south
of. Shanghai. This.suggests that
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 there may be a build-up of
these small craft, which are
of minor importance, north
of the Matsuse
The Chinese Nationalists
are preparing to increase their
artillery strength in the Que-
moys in June. Artillery units
Approved For Relt4se 2005/01/P79-00927A0 0500080001-0
Growing Diplomatic Isolation
O Rhee Regime
South Korea's refusal to
attend a conference of the
Asian People's Anti-Communist
League, because Nationalist
China had invited Japanese ob-
servers, emphasizes the grow-
PART II
CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
'OH ER
L `fir t
4 rJ`
U N A N l., NANCHANG?NSH
A
G YANG'`.
K. I A N G S I
K W A
SANTON
CHANGTIN
T
EN A W
Nantai
T- Machiank
'QUEMOY
;aochi
LNDER E
dNSTRUCTION " F Ol
l
PESO
SWATOW
)A N G
Luchia
5' i1 WENCHOl
CHIENOU
' MATSUS
ungtien
ORE'
Taishann
NIN~
i}IAA IGHAI
b
TACHENa
EAST CHINA (incl. FORMOSA)
Available Airfield (jet)
Available Airfield (cony.)
Airfield Site
-Selected Road -+-+- Selected Railroad
--- Proposed Railroad
Naut.O 70 100 ISO Miles
0 3O 100 100
Statute Miles
fl~
0
,,WUH1
A N H W E I
HANGCH
CHIJV1SIEN
of five divisions there will be
brought to full strength, and
artillery weapons will be in-
creased from 171 to 259 pieces.
There has been no further
clarification of the Chinese
Communist position on negotia-
tions with the United States.
The British offi-
cials who have talked
with Chou En-lai
during the past two
weeks are reported
to believe that
Chou's promised
position paper on
Formosa will not
differ appreciably
from his report to
the government on
13 May.
Chou in that
report reiterated
the regime's will-
ingness to negotiate,
but also reaffirmed
Peiping's hard line
on substantive mat-
ters. The Chinese
Communists for the
past month have
consistently as-
serted that there
is no need for a
cease-fire, that
Formosa's fate is a
domestic Chinese
affair, and that
Sino-American nego-
tiations can be con-
cerned only with the
American "occupa-
tion" of Formosa.
ing diplomatic isolation of the
Rhee regime.
One of Rhee's motives in
establishing the league in 1954
was to displace Japan as the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26. May 1955
main American bastion in the
western Pacific and he now seems
willing to dissolve the league
rather than accept Japanese
participation.
An immediate result of the
South Korean boycott was an
"indefinite" postponement of
this second league conference,
a considerable concession to
President Rhee.
There has also been talk
that South Korea would organize
a new anti-Communist league,
excluding Nationalist China.
However, in virtually destroying
the present organization, South
Korea lost an opportunity to
assume leadership of a group
which might have included un-
official representatives from
Japan, India and Indonesia.
Furthermore, the Rhee regime
strained its relations with
Nationalist China without no-
ticeably affecting the Chinese
Nationalist policy of friendship
toward Japan.
The South Korean break with
the league came on the heels of
the Rhee regime's unsuccessful
opposition to the Bandung con-
ference, to which South Korea
was not invited, and at a time
when South Korean overtures to
the Manila pact nations have
brought forth little response.
Simultaneously, South Korea's de-
nunciation of Japan and demands
for a preventive war against
Communism have irritated nations
anxious to minimize tensions in
the Far East.
North Vietnam
With Viet Minh control over
North Vietnam complete, follow-
ing the acquisition of the port
of,Haiphong on 13 May, French
influence--except as represented
by the Sainteny mission--has
been virtually eliminated from
north, of the 17th parallel.
The Sainteny mission's
efforts to ensure the survival
of French cultural interests has
shown negligible results and
Sainteny intimated to the Ameri-
can consul at Hanoi on 17 May
that his mission might soon
leave Vietnam.
Sainteny has said it will
be the Chinese who replace the
French, but the size of the So-.
viet economic assistance program
suggests that the Russians will
at least be prominent.
With the exception of the
Hah.oi Tramways Company, all
important French business inter-
ests in North Vietnam have been,
liquidated.
The Chinese Communists
have technicians at Hanoi's
civil airport. There also are
reported to be Chinese advisers,
in Viet Minh ministries.
The Viet Minh announced on
14 May that it planned to open
consulates at Kunming and Nan-
ning, and the Chinese Commu-
nists are to establish one at
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
Haiphong, probably in antici-
pation of increased Sino-Viet-
namese trade.
Direct Soviet participation
in Viet Minh affairs has in-
creased since the fall of 1954,
when a Soviet diplomatic mission
arrived.
The rice harvest in the
Viet Minh zone during 1954 was
22 to 30 percent below that of
an average year. If the rice
crop now being harvested is
poor, the 'Viet Minh will be
dependent on Orbit shipments
to cope with famine conditions
for the next six months.
The cost of living of an
average working-class family
has risen 25 percent since last
October. Rice now costs twice
as much as it did last September.
The Viet Minh has in-
stituted, a series of police-
state measures' designed to con-
solidate its control over the
population. Hanoi residents
must report immediately to the
police the presence of temporary
lodgers or any change in family
status. "Self-criticism" meet-
ings between businessmen and
government tax collectors and a
number of.public trials in April
and May are other instances of
widening use of Communist con-
trol techniques.
The American consul in
Hanoi reports that the people
there appear to submit readily
to regimentation. He also re-
ports that the regime is pro-
ceeding skillfully with "carrot
and stick" tactics against the
Catholic community and there
are indications that a few soft
spots may appear in that group.
An indication that the Viet
Minh will "purify" administra-
tive organs in rural areas was
contained in a 9 May broadcast
that noted that "feudalists" had
crept into village organizations
during the period since 1945 in
order to defend their own
interests.
A reorganization of local
government organs and the
extension of the regime's con-
trol apparatus in rural areas
serve the added function of
preparing for the 1956 elections
for the unification of Vietnam.
The Viet Minh has consistently
affirmed its desire to partici-
pate in the elections and to
that end has expanded its united
front organization, the Lien
Viet, to include groups not pre-
viously a part of the front.
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CURRENT INTELLIGENCE WEEKLY'SUMMARY
26 May' 1955
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ingapore Riots Indicative
f Communist Strength
Singapore has been out-
ardly calm since the Communist-
nspired riots of 12-13 May,
ut the situation remains un-
asy. The Communists success-
ully demonstrated that they
re capable of creating serious
rouble whenever they desire.
The riots, which were
recipitated by striking Commu-
ist-dominated unions and
upported by several thousand
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 M4y 1955
pro-Communist students, did not
lead to a final showdown. The
situation remained a police
problem throughout; army units
were not used to restore order.
Several sources regard
this limited uprising as a
Communist effort to embarrass
Singapore's left-of-center
government which the Communists
fear may capture the: popular
imagination. The recent in-
stallation of this government
under the terms of a new con-
stitution was an important step
in the direction of local self-
government.
The Communists achieved
a number of objectives. They
enhanced their power position
in the Chinese community of
over 800,000 persons since anti-
Communist elements have--at
least for the present--been
thoroughly intimidated.
The fact that the strik-
ing unions gained most of
their demands is already being
Afghan-Pakistani Situation
There has been no signifi-
cant development in the Afghan-
Pakistani dispute during the
past week.
Since Pakistan rejected
the terms of the Saudi Arabian
"forgive and forget" mediation
offer on 19 May, the activities
of both Afghanistan and Pakistan,
as well as would-be "mediators,"
have apparently centered around
trying to decide what matters
should be investigated by Egypt,
Iraq, Iran, and Turkey and
whether these matters should
be studied by these nations
jointly or separately.
Meanwhile, agricultural ac-
tivities, economic development
exploited by the Communists to
encourage other unions to use
forceful means to wring conces-
sions from employers. The gov-
ernment's backdown from its an-
nounced intention to eliminate
subversion in Chinese schools
has been interpreted by the stu-
dents as a sign of weakness.
Moreover, the government's
inclination to temporize, de-
spite a strong vote of confidence
on 16 May with regard to its
handling of the riots, is not
likely to stimulate much con-
fidence among the Chinese.
This attitude is apparent-
ly condoned by British officials
who, while recognizing that
the situation is deteriorating,
feel that it is preferable to
make concessions rather than
resort to force. They believe
that use of force would end
the movement toward self-
government and alienate Brit-
ish friends in Asia.
projects, and government admin-
istration in Afghanistan have
been disrupted by the departure
of men called up by the military
mobilization order of 4 May.
Disruption of normal trade
and traffic across the Afghan-
Pakistani border is also produc-
ing shortages of a few essential
commodities in Afghanistan.
This raises the problem of
Afghanistan's turning toward the
USSR to ease critical shortages.
Prime Minister Daud is not likely
to request any considerable in-
crease in Soviet aid unless
or until he is certain that the
current "mediation" efforts are
likely to fail.
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Ct)RRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
Algeria
The security situation in
eastern Algeria has deterio-
rated so greatly since a state
of emergency was declared on 7
April that the French govern-
ment has substantia~ly rein-
forced military and police
forces assigned to the area.
Reinforcements and the ac-
tivation of reserves bring army
strength from 90,000 to more
than 100,000 men and should
provide sufficient forces for
the authorities to break up the
operations of an estimated
1,500 armed dissidents.
Evidence of sympathy for
the dissidents by some of the
35,000 North African Moslem
troops in the French army in
Algeria poses an additional
problem and has resulted in
a decision to rotate some of
these units to Germany.
The American consul in Al-
giers reports, after a visit to
eastern Algeria, that measures
taken thus far have proved in-
ept and unsuccessful. In many
instances, French settlers have
abandoned their holdings for
the security of the cities;
some of them, armed by the
authorities, seem determined
to take countermeasures.
The Moslems, on the other
hand, generally are sullen and
resentful. They claim that
security precautions are de-
signed to protect the Europeans,
while they are without protec-
tion.
The American consul feels
that the atmosphere is gloomy
and that antagonisms between
the French and Moslems are
I S__
There is little likeli-
hood that another Dutch govern-
ment can be formed soon to re-
place the Drees coalition cabi-
net which fell on 17 May over
a bill on rent increases.
Several weeks may elapse, how-
ever, before a decision is
reached to dissolve the lower
house and schedule new elec-
tions.
A leader of one of the
smaller parties, such as De-
fense Minister Cornelis Staff
may be called upon to attempt
to resolve the crisis.
In any case, Dutch for-
eign and defense policies will
not be at issue. Premier
Drees, an able compromiser who
is respected by all the non-
Communist political parties,
is apparently anxious to re-
tire from active political
life.
Although Labor deputies
precipitated the crisis by
voting against the rent bill,
the Labor Party council
recently reiterated its willing-
ness to resume governmental
responsibility and may be
agreeable to reconstituting
the Labor-Catholic People's
coalition without elections.
On the other hand, some
elements in both the Labor and
Catholic People's Party, the
two leading political parties,
favor elections instead of
waiting until next year and
meanwhile continuing present
compromises. Tension between
these two parties has height-
ened over the past year, and
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
the usual difficulties of
forming a cabinet will be
complicated by the need to
reach agreement on the rent
bill.
The formation of a busi-
ness, or nonpolitical cabinet,
as has been proposed in some
quarters, would be. only a
temporary solution. A coali-
tion of the Catholic Party and
the other confessional parties
Honduran-Nicaraguan
Border Dispute
The century-old border
dispute between Honduras and
Nicaragua, which erupted anew
in early May, probably cannot
be settled bilaterally. The
issue may eventually be re-
ferred to the International
Court of Justice or to the
Organization of American States.
The area in dispute is rel-
atively large but consists
mainly of jungle and swamps.
It is sparsely populated and
has not been under the effective
control of either country. An
arbitral award by the king of
Spain in 1906 favored the
Honduran claim, but this has
never been recognized by
Nicaragua.
The current controversy
began early in May whenpaccord-
ing to Honduran reports, Nicara-
guan troops guarding a road gang
penetrated territory claimed by
Honduras. The Honduran govern-
ment sent a strong note to
Nicaragua on 10 May, and the
next day dispatched 200 armed
volunteers to the border area.
The general commanding this
force, however, was cautioned
against hostile action.
without Labor Party participa-
tion would likely alienate
Catholic trade union elements.
The Catholic People's
and Labor Parties each hold
nearly one third of the seats
in parliament. Little or no
change in the political line-
up is. expected whenever new
elections are held, I
These moves by the Lozano
government came at a time when
its popular support appeared to
be weakening. They brought out
the strongest and most enthusi-
astic domestic backing the govern-
ment has enjoyed since it came
to power six months ago.
The initial reaction in
Nicaragua was to play down
the dispute. President Somoza
denied the Honduran charge,
attributed the entire affair
to internal Honduran politics,
and said he could see no
reason for border trouble
''unless Honduras provokes it."
Soon, however, the issue
aroused political pressures,
and on 18 May the congress
passed a motion urging Somoza
to send troops to the border.
Even the bitterly anti-Somoza
Conservative party deputies
backed the motion.
It is unlikely that the
dispute can be settled bi-
laterally. Honduras, standing
firm on the 1906 award, has
already rejected a Nicaraguan
suggestion that the disputed
area be equally divided. No
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Honduran government
could compromise on
this dispute without
risking serious in-
ternal political re-
percussions. The is-
sue will probably be
eventually referred
to the International
Court of Justice or
the Organization of
American States.
Serious
violence
is unlikely,
since
both sides appear
anxious to avoid in-
tensifying the con-
flict. The
presence
of troops
of
both
countries
in
or near
disputed
territory,
however,
might lead
to incidents.
26 May 1955
I BRIT.
'HONDURAS
i. _
GUATEMALA;
,r HON
/..
:J \ .
SAN SALVADOR
D U R A S AREA
j IN DISPUTE
}r~~ r"4--Boundary by the
/9arbitral award of the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
PATTERNS AND PERSPECTIVES
PROGRAMS TO OVERCOME: SATELLITE MILITARY DEFICIENCIES
The formation of the Sov.et-
Satellite combined military com-
mand will probably be followed
by continued efforts to improve
the effectiveness of the East
European armed forces. Increas-
ed military allocations in four
of the five Satellite budgets
thus far announced--Albania,
Czechoslovakia, Hungary, and
Poland--underline the importance
the bloc attaches to this pro-
gram.
The emphasis this year will
probably be on augmenting and
modernizing equipment holdings.
Programs to accomplish
these aims will result in in-
creased purchases of new and
used military equipment from
the USSR, and, to a limited ex-
tent, expanded Satellite arms
production.
The USSR apparently con-
siders that first priority
should be given to improving
and modernizing units which con-
tribute significantly to defen-
sive capabilities such as anti-
aircraft, electronics and modern
communications.
In Budapest, for example,
large numbers of AA guns are ap-
parently being modified for use
with fire-control radar. The
numbers involved appear to be
in excess of immediate Hunga-
rian needs and some radar-
equipped batteries could be for
distribution to other Satellite
countries..
Ground Force Programs
In line with the continu-
ing Sovietization of Satellite
ground forces, steps are being
taken to improve the balance be-
tween Satellite infantry and
armored formations. This re-
quires conversion of a number
of rifle divisions to tank or
mechanized divisions, and
there has already been evidence
that the Hungarian 5th Rifle
Division is being mechanized.
There has also been evi-
dence of the formation of new
units in some Satellite armies.
In April, a new unidenti-
fied mechanized division was
accepted in Rumania. In the
same month, an additional anti-
aircraft division was accepted
in Hungary.
In East Germany during
May, there were indications of
the formation of a third corps,
which would probably have an -
organization,consisting of one.
mechanized and two rifle divi-
sions, similar to that of the
two existing KVP (Garrisoned
Peoples Police) corps.
To accomplish these
changes, considerable amounts
of material are required.
Second-hand Soviet equipment
in significant quantities may
be available to the Satellite
armies this year because of
the extensive equipment moderni-
zation program for Soviet forces
in Eastern Europe which has been
in progress for several years.
These improvements in
Satellite ground force capa-
bilities can be effected with-
out personnel increases, and
normal registration, call-ups
and releases in the fall of
1954 and the spring of 1955
suggest that no increase in
personnel strength is likely
this year.
Air Force Programs
The light bomber aircraft
re-equipment program which
started in the Polish air force
as early as 1953 is now being
extended to the other SatelliteR.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 May 1955
The Czech, Hungarian and Ruma-
nian air forces have received a
few BUTCHER (IL-28) jet light
bombers this year, and will
probably receive more.
Operational fighter units
of Poland, Czechoslovakia, and
Hungary are equipped with modern
jet fighters. Bulgaria and Ru-
mania still have some of the
older jet fighters in opera-
tional units, but are being
re-equipped with jet fighters
of a MIG type. East Germany
has piston trainer aircraft.
The presence of jet fighters
in Albania has not been con-
firmed.
Navy Programs
Ithe Poles will re-
ceive a Soviet cruiser which
presumably would be assigned to
a new "cruiser/destroyer force."
?
COMMUNIST FORCES IN
`u
EASTERN EUROPE
A
~.
EAST
MAY 1955
,
56ERMAN
I ARMY PERSONNEL f AIRCRAFT
t?J # 100,000
000 SOVIET 000 INDIGENOUS
1 400,000 5,000
10
y ~.
SOVIET-SATELLITE COMBINED
MILITARY COMMAND
1,248
0 100 200 300 400 500
Via,', Sri