DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000400060001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 12, 2016
• Document Release Date: April 17, 2002
• Sequence Number: 1
• Publication Date: August 31, 1951
• Content Type: SUMMARY

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'Ro
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31 August 1951
CIA No. 49330
Copy No,
3AILY PEST.
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence. It does
not represent a complete coverage of all current reports in CIA
or in the Office of Current Intelligence. Comments represent the
immediate views of the Office of Current Intelligence.
*Army and State Dept reviews
completed*
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SECTION 1 (SOVIET)
25X1
EASTERN EUROPE, BULGARIA, ,rovement in Civil Aviation caimedt Bulgaria
has announced significant improvement in civil aviation "thanks to the
disinterested assistance of the Soviet Union,," A radio broadcast to Eur-
ope on 28 August claimed that TABSO (the Bulgarian civil air line) now -
has a nation-wide internal air passenger and freight service and two air-
lines connecting with Prague.. Bucharest,, Budapest and Warsaw? Equipment
is allegedly anew and comfortable, TABSO planes,, said the broadcast,
have since the spring of 1950 been carrying large quantities of fresh
vegetables and fruit to Prague and Berlin, (U FBIEID, 29 Aug 5l)-
, It is very doubtful whether the claimed improvements in
Bulgarian civil aviation have been achieved, even though TABSO may have
been merged with Soviet Aeroflot as'previously reported (see 0/CI Daily
.Digests, 24 Aug 51). Until recently., TABSO's equipment consisted of a
few antiquated planes. Scheduled flights were conducted on an infrequent
basis, and wholly within Bulgarian: Foreign air connections with Bulgaria
were being handled exclusively by Soviet Aeroflot and Czech Airlines.
3. TRITE? I-ndeuendents confident of victor-y in Trieste elegtio so
25X1 C
25X1 C a leader of the Trieste Independence
arty is confident that the political parties which advocate an inde-
pendent Trieste (presumably including Cominformiats and Titoists) will
receive at least 51 percent of the vote in the Trieste elections.
US Political Adviser Unger comments that the Independents' confidence
in victory in the Trieste elections, as well as the evidence of Italian
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fear of their suocese9 .s More justified now than previously because
of the anti-MG .press campaign in July,, and tie insistence of the pro-
Italians on linked ballot lists and on postponement of the elections,
lelre?thelees, Unge? estimates that the optimism of the Independents
is exaggerated and that thq pro-Italians, although their vote will be
reduced from that of tho 1949 elections., will still obtain a majority?
(S Trieste 239 f, 28 Aug ) ..
Co S The US am d British ,gov'err nts have agreed to postpone
the Trieste elections f tom October until Dee ber 1951 upon Ita .
assurances that they will attempt to negotiate a settlement of the Trieste
issue with the Yugoslav Goverment. If a bilateral settlement is not im-
minent by December and elections are held then, the pro-Italiah strength
will probably be even further reduced,
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SECTION 2 (EASTERN)
1? GREECE. Greek Marshal Pa a os confident of electoral victor
Papagos, a candidate in the Greek elections of 9 September, Mrivhtl
informed the US Ambassador that when has privately
went, he will ,become both Prime Minister and Minis ?? he forms the new govern-
The latter position would enable him to clear pither"deteriora edDmi.litar
situation.'? Papagos expressed the fear that if the King relinquish
the position of Commandermin.~Chief of the Armed Forces bere therelections
,
"there would be considerable embarrassment for all concerned." (S Athens
981, 28 Aug 51)
Comment.- Recent palace and government efforts to weaken Papa os9
candidacy by tampering with the army have reduced its morale and efficiency,
and he is convinced that strong measures must be taken if this influence
is to be counteracted.
25X6
unless the com gn leL,ters covering the oil agreement
company promises a basic minimum annual payment, Iep Officials
and the British Embassy in Baghdad agree that the
a stand against further dangers in the time However, ome to take
Charge reports that the Prime ~?, agreement., Hverthe British
company has issued an official comim niquelstating that an agreement had
been reached. IPC may be forced to capitulate to the Iraqi, demands, (S
Baghdad 171, 28 Aug 51)
3. Zraa Petroleum Coau axe a reernc:nt till held
t`h'i Said Yeas refused s to sa th a
u~d Prime'nister
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Comment: There has been some evidence in recent weeks that certain
natio is is elements, inspired by Iranian developments, might delay
Iraqi agreement with IPC The Prime Minister in delaying approval may
be recognizing such opposition,
INDONESIA, Medan Chinese Consul su ned _to.D.i . ae
25X1 C
tna the Chinese Com .ist Co In Medan flew to Djakarta on 20 Assts
He is believed to have been s *d there by the Chinese Ambassador to
report on the security sweep in the Medan area on, 11 Asst and during
succeeding days,
Among those arrested ding the sweep was Chu Pal Ka.n, chairmann, of
both the Overseas Chinese General Association and the China Democratic
League in Medan, Two other high ranking Chinese Communists, who- are
currently an route to China with a Com gist=sponsored "oL servation grTap"
of Indonesian Chinese, will be arrested on their return to Indonesia.
after discussing the situation with the consul,
the ambassador is expected to go to China to report on the unfavorable turn
of events in Indonesia. 25X1A
Comment: In anticipation of widespread Communist and Communist-
inspired disturbances on 17 August and for several days thereafter, the
Indonesian Government made a series of arrests throughout Java and
Sumatra variously reported as numbering between 800 and 2,000 persons.
It is highly probable that the Chinese Embassy is disturbed over-
develop-ments in Medan, where the security sweep was far more thorough than 25X6
elsewhere in Indonesia.:
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US offered strategic commodity from China: A Hong Kong business-
man called on the US Consul Gee eral to inquire whether the US would
be interested in the purchase of 2,000 cases of bristles, The Comm-
unists, it was claimed, would release these bristles in exchange for
1,500 bales of cotton yarn (an acutely short item in China) from Hong
Kong, At present, the export of cotton yarn from Hong Kong is not
permitted.
The Consul General feels that the businessman may be sounding
out the US'attitude for British officials. The British may hope-:.,that
the waiving of export restrictions in this instance to serve the
strategic requirements of the US will pave the way for relaxing Hong
Kong export controls on.other items in order to satisfy their own
interests, (S Hong Kong 797, 26 Aug 51),
Comment. Hong Kong business men are genuinely concerned over the
recent decline in the colony's business activity, Hong Kong's export
controls, imposed in response to US pressure, are blamed for the
business recession. Business circles in the colony, and also gov-
ernment officials, hope for an early relaxation of restrictions on
exports to the Chinese Communists,
7? Chinese Nationalists plan to cut expenditures: The Chinese
Nationalist cabinet, in response to the US request for planned control 25X1
of Nationalist military and civil expenditures, has prepared a new
budget providing for a cut in expenditures of 1.3 million US dollars
per month. In addition a finance stabilization committee, "tightly
controlled by the Kuomintang," will be established. The personnel of
the Ministry of Nationalist Defense, which includes the armed forces
will be cut from 640,000 to 580,000. However, since 25X1
the personnel of this agency totals only about 400,000 this still
wi leave 180,000 "paper soldiers."
The Secret Service and Political Department of the Ministr of
National Defense will not be reduced, the 25X1 C
Political Department's control now ext. o the-lowest levels in the
army.
Comment** A special committee headed by the Premier was appointed
on 13 August to deal with the reduction of the budget and the control of
expenditures. However, it is unlikely that the budget can be balanced,
as over-all expenditures now exceed income by more than 2.5 million US
dollars per month. Furthermore, the recent establishment of the
"Materials Group," to coordinate all secret service agencies, suggests
that this phase of the government's activities, already responsible for
a large percentage of expenditures, is expanding,
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KOREA. Additional reports of the Presence of "Soviet Puppet" troops
i- th Korea; G-2, Far East Command., citing several recent reports
of the presence of Caucasian troops in North Korea, states that the
multiplicity and consistency of the reports "logically demand attention
and so.e degree of credence." One of these reports stated that by
23 August a "Soviet Puppet Force" had crossed the Yalu River and was
on the way to the front line; others mentioned the presence of Soviet
and "Caucasian" troops with armor hear Kumchon. FECOM comments that
the presence of Caucasian troops as far south.as Kumchon "appears
possible" but that the nationality, size and type of the force are
not. clear. (S CINCFE Telecon 5100, 30 Aug 51),,
Comment: The presence in North Korea of a limited number of
non-Oriental troops, chiefly anti-aircraft artillery units and tech-
nicians, is considered probable?
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SECTION 3 (WESTERN)
1. GEI,'.MANr. East German amilitary force plans to establish ten mobile
opals. m ccor zng o the Ica Department of 25X1
the East German paramilitary orce as set up T/E requirements for a self-
contained mobile hospital unit and plans to activate ten such units. Each
mobile hospital would consist of nine three and one-half ton trucks and
eleven trailers with complete hospital equipment. 25X1 A
7-1
Comment: A school for training paramilitary medical personnel has
exist-e since late 1950, and the activation of mobile hospital units would
seem a logical step in the development of the East German Bereitschaften.
Mobile medical service would normally be required to handle the inevitable
casualties occurring during any military field exercises.
3.
25X6
7 31 Aug 5'1
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ITALY. De Gasperi admits Communists hold their strength in Ital Austrian
Chancellor Figl reports that Italian Premier De Gasperi recently told him
that Communist strength has shown no signs of decreasing in Italy, for which
the serious economic situation and large scale unemployment are largely..
responsible. De Gasperi told Figl in this connection that he would's'
additional economic and military assistance from Washington.(S Vienna,
29 Aug .5l) -
Coimnenfa This is the first such flat recognition of continuing Com-
munisgth reported on the part of De Gasperi, who has hitherto stressed
the physical and organizational power of Communism rather than its popular
economic appeal. His remarks regarding additional assistance in connection
with the Communist problem suggest he will insist that further US aid is
essential for an accelerated military program as well as for socio-economic
reforms in Italy,
The Vatican re ortedl disapproves of aspects of Japanese Peace Treat.
Congregation for t e Pro
a
ati
p
g
on o the Fal ro
directs the mission plan a Fide , whit
cry work of the Cath
li
o
c Church throughout the world and
presumably reflects Vatican
oli
p
cy on major issues, has indicated its dis-
approval of the Japanese peace treaty in a report from Tokyo. The report in
part: "Foreign Catholics (in Tokyo) feel that the treaty as a whole is
entirely out of harmony with the principles of social justice and human
rights as outlined by Popes Leo XIII, Pius XI,, and Pius XI.I, and are parti-
cularly concerned over the mandate to be exercised by the United States over
the Ryul ra and other islands south of Japan." The article says American
spokesmen have pointed out that Japan is too poor to support an increasing
population, and comments that "for America, to take land away from Japan
would under such circumstances-be unworthy among the Japanese." Vatican misgivings over the treatythave-beenaaddued
as one reason for the presence in the US of Monsignor Montini, Substitute
Secretary of State and one of the Popevs closest collaborators. (U NY Times
Rome, 30 Aug 51)
Comment: Propaganda Fidegs disapproval of the peace treaty presumably
derives par ly from pressure by the approximately Catholics of whom several. thousand are located in the northern Ry~s6 The Vatican
has shown increasing awareness of the necessity for competing with the Com-
munists for the support of local populations in former colonial or occupied
areas in the Far East and Africa.
25X6
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8, ECUADOR-PERU, Guarantors of 1942 Rio Protocol meet in Rio: In a statement
the pr f0 owing a ugus mee ing o represen atives of the
guarantor powers (US, Argentina, Brazil and Chile), Brazilian Foreign
Minister Neves da.Fontoura declared they had agreed unanimously that the
recent Ecuador.--Peru frontier incidents are not of a serious character. He
stated that the guarantor powerst representatives considered possible methods
for solving the boundary questions which have arisen in connection with
demarcation of the Ecuador-Peru boundary according to the terms of the 1942
Rio Protocol. The Brazilian Foreign Minister was charged to consult Peru
and Ecuador about the possibilities of a direct agreement between them or
of recourse to any other method for solution of their differences,, (U Rio
301, 29 Aug 51)
Comment: It is most unlikely that Ecuador and Peru will be able to
come roan agreement through direct bilateral negotiations, Argentina's
attitude is not known5but the other three guarantor states feel that arbi-
tration offers the best chance for achieving a final solution. They realize
it will be most difficult to get Ecuador and Peru to agree on adequate terms
of reference and to agree on an arbitrator,. A still further obstacle to
settlement by arbitration will be the unwillingness of many countries to
act as arbitrator. Both the US and Brazil have already indicated that they
do not wish to assume such a role,
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31 August 1951 .
CIA No. 49330-A
Copy No.
S/S CABLE SUPPLEMENT
TO THE. DAILY DIGEST
Not for_ dissemination outside O/CI and O/NE..
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
This summary of significant reports has been prepared primarily
for the internal use of the Office of Current Intelligence. It does
not represent a complete coverage of all current reports in CIA
or in the Office of Current. Intelligence. Comments represent the
immediate views of the Office of Current Intelligence.
TOP SECRET
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SECTION 1 (SOVIET)
USSR, Embassy Moscow speculs,tes on Soviet politer at San Francisco .
The US
Embassy in Moscow suggests that at San Franciscan the Soviet Union may at-
tempt to minimize substantive differences between the Kresnlins previously
expressed views and the tee of the US UK draft. Thus, the Soviet Govern-
ment would seek to give the impression that it could sign the treaty if
Communist China is brought in on the final discussions concerning treaty
differences, and if the treaty contains no provision for future Japanese
security arrangements, The USSR would attribute its objection to such a
provision to fear that Japanese sovereignty would be limited,
Since this position would parallel that of India, the embassy believes
that Moscow may consider it as the best hope of dissuading hesitant countries
from signing, while holding op4t the prospect that the Kremlin is willing to
make some sacrifices on the treaty in exchange for an over-all settlement in
the Far East,
Noting the lack of progress at the cease-fire conference in Korea, the
embassy also suggests the possibility that Soviet delegation members, in
private discussions with other delegates, may attempt to bring pressure by
threatening a final rupture of Kaesong talks, (S, S/S Moscow 354., 29 Aug 51)
SECTION 2 (EASTERN)
25X1
2, INDONESIAo Vice President ur~QS sini of Javanese treaty II
IUS Ambassador Cochran that when the decision was made to participate in
e an Francisco treaty conference,, Vice President Matta insisted that if
a delegation were sent t
S
o
an Francisco it should be given authority to sign
the treaty, cabinet members, inquiring whether th
the ooverm , A . ___4 'I -- -4 eY were running
Hatta's efforts to bring the Masjumi+ltopsupport the treaty I LAX"I
evidently are making progress. (C, S/S Djakarta 345, 30 Aug 51),
Comment: The Indonesian delegation was not given authority to sign the
treaty, largely because of pressure from the Indonesian press and various
political groups.. However, depending upon developments at San Francisco,,
the cabinet may yet authorize tI,e delegation to sign,
The two most vocal groups in opposition to participation at San Francisco
have been the Socialist Party and one faction of Indonesia?s largest party
the Masjumi (Moslem League),,
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SECTION 3 (WESTERN)
6, FRANCE. French seek di
French Foreign scussion in Washi ton of Allied
xr ~,
Office
ffi
_
o
cialsde
recommen. discussion, in th forthcoming
Washington Foreign Ministers8 talks, of only the major issues involved in the
substitution of contractual relations for the Occupation regime disagreements and detail would be handled by in Germarsi
y the Allied High Commisso
On some of these main issues the French
Allied rights subJect to the are strongly opposed to making
These rights include investigation e of scientific and industrial, developmr n
an Allied function which might be placed under the Council. of Ambassadors re9
placing the High Commiseioho and retention of supreme authority in a few
fields, on which the Foreign Office is not yet decided,
Furthermore, the French oppose a limitation of the reserved right of
intervention to cases of a "clear and
present
they fear the Allies would be reluctant to inte e to any crisis because
situation had deteriorated too farms (Ss S/S Paris lSOS in 29 Aug crisis until the
9 5l)
Comment.- Ever since the Brussels talks of December 195.9 the French have
insist ted at the Allies retain some sovereign rights enjoyed under the anticipated contractual agreements.
Germany beyond the
More recently, the French have become somewhat less liberal in their
titude toward restraints on the Germans than they were,, This ac-
at-
ed
ed by developments in West Germany, where the press is ? curr
his trend is influenc-
the complete abolition of all Allied rights in Germanaently agitating
The Bonn Governments moreover,
at the end of the war while recognizill
retain special, rights growing out of theing that the Allies y,, e of
9 can be expected strongly op pose tre ite arrangements
German scientific and industrial work, to ?ppe the policing of
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