DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01146A000400230001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 12, 2016
• Document Release Date: January 31, 2002
• Sequence Number: 1
• Publication Date: September 26, 1951
• Content Type: SUMMARY

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26 September 1951
CIA No. 49359
Copy No.
DAILY DIGEST
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.
DIA, USAF and DOS Reviews Completed
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SECTION 1 (SOVIET)
1. USSR. bs~s MOSCOW comments on Soviet bolicv ~r Southeast Asia: In
considering Soviet policy toward Southeast. Asia and-seeming Chinese
Communist predominance in the area, the US Embassy in Moscow expresses
doubt that the USSR has agreed to any formal demarcation of spheres of
influence, Its the?embassy$s opinion, it would be inconsistent with the
nature of Stalinism to give free play to Chinese imperialism and inde-
pendence and thus permit Communist China to become coequal with the USSR
in the world-wide Communist hierarchy,
Rowever, the embassy believes that in practice the primary responsi-
bility for operations and support of Southeast Asian Communist movements
could have devolved upon the Chinese Communists, The Chinese enjoy geo..
graphical and tactical advantage and can utilize overseas Chinese colonic s.,
Recalling the 1949 Asian World Federation of Trade Unions conference in
Peiping, the embassy points out that the "liberation" program for. South..
east Asia Was mapped out with reference to the Chinese Communist pattern
of an armed struggle with peasant support, (C Moscow 496, 22 Sep 51)
Commento The USSR always prefers to avoid direct involvement in
the "internal affairs" of other countries and, when possible, to work
through indigenous Communist movements, Continuing Soviet Interest in
Southeast Asia is indicated by propaganda attention and by reports con.
cerning Chinese Communist assistance to guerrilla forces in, Indochina and
Burma which frequently make reference to Soviet advisers.
ttn caw
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" `y a
I a
__17 raI iva su 1 base on Kunashiri Is s
G2 F'EC
O
u
M reported the development of
i
Island
aa
ov
sing A
e military supply base and training center,
ugust 1
951
During August
, food and military supplies, tanks, vehicles, fuel and
lubricants were unloaded from six oceangoing freighters at Yuzhno
Kurilak, and hauled to an undetermined location northeast of the city,
The six ships unloaded during August represent a 100 percent increase
over the number of vessels unloaded monthly from May through July 1951.
as T- that on 18 June 1951, ten tanks, identified
s were observed traveling westward from Kurilsk heading for a
camp reportedly located near Nikishoro lake. Between 24 and 28 August
artillery fire was heard "practically"" every day and small arms fire
almost daily. Light bi?-planes and monoplanes reportedly circled the
City and island daily in what appeared to be routine flights, No,..
Japanese civilians or troops were observed near Yuzhno Kurilsk,
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The field cormnents that the airfield located north of Yuzhno Kurilsk
is probably the former Japanese race track which was reported in 1948
to have been converted into an airfield, A small number of fighters may
be stationed here for air defense purposes. In addition to the increased
military activity reportedly occurring in Southern Sakhalin, it is also
possible that the Russians are building up their strength on Kunashiri
and other islands of the Kurilesd (S/C FEAF Tokyo AX 4001, 22 Sep 51,
D-1)
Comment. Because of the dearth of intelligence information regard-
ing activity in this area, it is impossible to confirm or deny this
report, However, due to the strategic position of Kunashiri Island, a
buildup of Soviet military strength there and on other islands near Japan
would be a logical development.
The reported absence of Japanese personnel in the area is contrary
to other unconfirmed reports.
ective faxes charter violate 212m $ wading Soviet ed.-
torials and articles recently commemorated the.fifth anniversary of the
decree on collective farm charter violations. Among the evils stressed
this year are individual plundering of communal property (including
diversion of land to private use)., illegal payments to non-farm personnel,
violations of democratic procedures and payment rulings on farms? The
main remedy suggested is a quarterly audit within the collective farms,
and a semi-annual audit by raion authorites to uncover violations, which
are now claimed to have assumed increasingly hidden forms. The press
declares that a struggle against violations is synonymous with the exe-
cution of the main agricultural tasks of increasing crop yields and
amounts of livestock, (S Moscow Weeka 38, 21 Sep 51)
Gommer `t The *evils" decried here reflect another phase in the
constant struggle of the peasants to recapture some individual initiative
and freedom of action in their daily affairs.
40
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5.
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25X1 C rmnassy in scot, Liuelfo Zambonig former counselor at the
h
er
i*p
asized that the Soviet Union is extremely
worried by US
ream dnt, and advanced the theory that there are two
currents in present Soviet
oli
(
)
p
cyo
a
the belief that the USSR can,
delay American rearmament by temporarily relaxing its p a
y, and (b) the
belief that US rearmament has gone too far to be stodkand the
USSR- therefore, is obliged to start war on its own terms. IntZambon3es
opinion, the Russians favor the first course, but if the relaxed policy
fails to delay rearmament within one year, they may launch a general warm
The Italian Ambassador to Moscow disagrees, arguing that the Soviet
Union is trying to delay US rearmament but has no intention of starting
a general war until it is convinced that it can win,
17 Sep 51)
6. of VOA broadcasts outsize Moscow ar
the current US Embassy program of systematically a- In connection with
language VOA broadcasts outside of Moscow, a m to toriea Rrecentl.
spent eight days in Chkalov checking reception in that istrict. Jamming
was observed to be stronger than in any other area so far visited by
embassy monitoring teams. What appeared to be jammi equipment was
observed. This equipment consisted of 24 wooden poles to which hundreds
of wires were attached. on some of the wires metal discs were attached
about two feet apart, running both horizontally and vertically from pole
to pole?
Systematic intereference was encountered on all frequencies. During
periods when systematic janmi:bg was used, its effectiveness was felt to
be more intense than in the Moscow area where occasional lapses permitted
several minutes of VOA to be heard.. (C Moscow Bela,. 7549 26 June 51)
Oonme o Because of the distance between Moscow and Chkalov it is
undoubtedly difficult to hear Radio Moscow with a standard 4-tube sets
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so short wave receivers are an essential part of radio equipment sold in
that area, The.population thus has more opportunities to listen to VOA,
and the need for preventive jamming is proportionately increased?
. ABA IA. Free Albania radio broadcasts The clandestine radio station
Voice of Free Albania" inaugurated daily broadcasts on 21 September
"for Albania, for freedom and for the red and black flag," The radio
claims that it represents the National Committee for Free Albania and
all Albanians who want a strong and free homeland. Programs include
news items and commentaries on the Albanian situation. (R FB7D, 24 Sep 51)
s It is too early for a reaction to the Voice of Free Albania
to be evident in official Albanian propaganda,
sented.the aims of the first Five Year Plan ito the Central Committee of
the Albanian Workers' Party on 21 September. In outlining the tasks
ahead,'Hoxha emphasized the need to develop coal, oils, textile leather,
timberp iron and steel production ,
, He placed particular emphasis on the
necessity of improving agricultural output and consolidating existing
cooperatives. Hoxha noted that the creation of new agricultural coopera-
tives must be preceded by detailed preparatory work to convince the pea.
sants of the superiority of collective enterprise. (R FBI?) Tirana,
25 Sep 51)
9.
e . t. t o The first Five Year Plan was announced in March 1951, but
its provisions were not stated at that time, The Hoxha governments
stress on the agricultural sector of the economy has been evidenced by
vacillating decisions on agricultural socialization plans and the reorgani-
zation of the Ministry of Agriculture early in September 1951,
BII . Industrial ministries rear anized0. The Bulgarian Praesidium
of the National Assembly has issued a decree dividing the Ministry of
Industry - into a Ministry of Heavy Industry and a Ministry of Light
Industry, The Council of Ministers will assign to the new ministries
all Bulgarian enterprises formerly under the jurisdiction of the minis-
tries of industry and of forests, The Ministry of Forests has been
demoted to the status of an administration, (U Sofia FB]D,; 24 Sep 51)
zs While recent propaganda has stressed the growing importance
of Bulgarian industrial development.. the Ministry of Industry, among
others, has consistently failed to meet the goals of the Five Year Plan,
Reallocation of responsibility for industrial enterprises will tighten
control., and at the same time bring the Bulgarian organizational structure
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for industry into line with that of the more industrialized Satellites.
No announcement has as yet been made of any changes in top personnel,
The present Minister of Industry appeared at a public meeting with other
members of the Politburo on the day following the above announcement, and
so has apparently not been purged in this reorganization,
ZMM. F1= fear USSR yet their comb It Mn?t i PR Q The managing
director of Vuoksenniska 010 . theleading.metallurgical~firm in Finland).,
which is now making preparations to begin commercial production of cobalt-
bearing metallic salts by an exclusive new process, has expressed fear to
the US Legation in Helsinki that the Soviet Union will put pressure on
the Finnish Government in order to acquire such
ti
por
ons of this extremely
strategic product as are not contracted for by the West, According to
the company s director, the USSR is still unaware of the company's plans,
but inquired six months ago concerning the possibility of purchasing
Finnish cobalt, The US Air Attache who recently visited the company's
new plant states that plant officials believe the Communist press will
have the story in a. few days,
Vuoksennlska Oy. has offered a portion of its anticipated 1952m1956
output to the vitro manufacturing company of Pittsburgh.
Vitro showed
some interest, but has not accepted the terms of the Finnish offer,
As a result, the director of the Finnish firm has proceeded to Western
Europe to follow up previous negotiations.9 remarking that if Vitro
remained unwilling to accept his offer he would place the entire pro-
duction, under long term contract in western Europe.
The US Legation in Helsinki believes the situation calls for speedy
action to preclude the possibility of Russian purchases, The legation
suggests that Vitro be urged, by the offer of government underwriting
if necessary., to accept the Finnish company's proposal, (S Helsinki
145, 21 Sep 51)
entfl: Cobalt is used for hardening steel alloys and increasing
their-heat resistance, and is thus important in the production of jet
engines. It is also used in the manufacture of magnetic steel, The US
consumed approximately 29000 tons annually in 1946 and 1947, and in 1947
it imported a total of 38 tons.
1947 was 5,000 tons. Estimated world production of cobalt in
.
Vuoksenniaka expects to produce 100 metric tons of cobalt during
1952 and. 300 metric tons annually from 1953 to 1956. The additional
production will come from a second plant, which will be operating in early
1953.
It seems probable that if large amounts of this cobalt go to Western
Europe, it will find its way to the Soviet bloc through illegal channels.
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11. RNI,A. Location of crack armored d vis o
uncertain. The US Army?
Attache in Bucharest, during a field trip to Craiova on 19 Septembers.
observed no evidence that the Tudor Vladimirescu armored division was
in the immediate area (OCI Daily Digest., 19 Sep). The attache noted
no unusual military activity in the vicinity of Craiova, (S Bucharest
135, 21 Sep 51)?
.Q z It is possible that Rumania's only armored division did in
fact move toward Craiova., but may have proceeded westward to the Turnu-
Severin area along the Yugoslav border where large-scale army maneuvers
were held last year,
relations f3CI Daily Digest, I 9 Sep .,the RumanianyForeigna0ffice has
requested visas for five new members of the Rumanian Legation in Rome,
Visas for enlarged staffs in the Rumanian legations in Paris,. Ankara
and Washington have also been requested. The US Legation in Bucharest
interprets these moves as indicative of a general program of "strengthen..
ing representations in Western countries." (C Bucharest 137., 21 Sep 51)
Comment: The number of Rumanian diplomatic representatives in these
Western countries is now smaller than the representation of those countries
in Rumania, despite flagrant harassment of Western diplomatic missions
in Rumania and continuing maltreatment of Western nationals., the Rumanian
Goverment is apparently confident that the Western countries will grant
the requested visas rather than risk further paring of their staffs in
Bucharest,
14.
~~~~? yr? atellrte attack
ke According to the Yugoslav Charge win-
the Yugoslav'
Foreign Office does not consider any early Satellite attack likely.,
although the numerous border incidents are very harassing. (S Bucharest
133, 21 Sep 51)
o tt On numerous occasions in the past few months Yugoslav
lea3.ers have pointed to the increase in border incidents but have stated
that they do not consider a Satellite attack in 1951 likely.
aar-v bi~Ateral gA+t emen+ of Tr este issue
ike In early Se ber, Foreign Minister
KardelJ reportedly
explained
supports rec that Yugoslavia officially
negotlati4ns :e weep ugoslavia and Italy because the
Allies desire it and not because it is the best way to handle the issue.
Kardelj predicted that the wide divergence of views held by the two
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countries would preclude any solution in the near future,
that it was of the greatest importance to Yugoslavia and to the people
of Trieste that the Independent movement be fostered and strengthened
in Trieste.
OQ ento This report appears to be a straightforward statement of
the present Yugoslav attitude toward the Trieste issue Even if the
Italians should consent to negotiate with the Yugoslavs on the basis of
the ethnic principle rather than the 1948 Tripartite Declaration, it
appears unlikely that either party would be willing to compromise
sufficiently to obtain a settlement,
15aRNATI?tAI, C?MI+ItTSI Youthexeetie of Cominform reported _Ila orme During the Berlin Youth Be
sti
val,.a youth "executives of the
Cominforra reportedly was established with headquarters in Prague, It
will be represented at all Cominform meetings except those restricted
to the Central Committee, This executive, a committee of four headed
by Enrico Berlinguer, President of the World Federation of Democratic
Youth, will take over direct control of all political, cultural and
sports affairs of para-Communist youth associations including the Inters.
national Youth Movement of Peace Partisans,
Co tI The only plausible reports of the Cominform organization
have broken down the Executive
Economics Council into five sections Propaganda,
, Politics, Information, and Military Affairs, Youth Affairs
was thhe third branch of the political section and came under the diree-.
tion of Miail.ov (USSR), assisted by Pesse (Italy) Therefore, the subject report may refer to a change in d
Altmann (P des ,?
for iuproved exploitation of youth rather than a change in the presen igned
Cominform organization,
t
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SECTION 2 (EASTERN)
1. GREECE. Final Greek election results: The Greek Ministry of the Interior
has announced the following d stribution of Deputies' seats: Papagos, 110;
Plastiras, 72; Liberals, 56; EDA (Communist), 9; Populists, 2; Agrarians, 1.
(R FBID Ticker, Athens, 25 Sep 51)
Comments The final results of the Greek elections show the expected
deadlock, since Marshal Papagos still does not have a majority.
The king is apparently attempting to delay calling upon Papagos to
form a new government, but he probably cannot avoid doing so for long. If
Papagos fails to form a government, it is possible that a Plastiras-Venizelos
coalition would come to power. This would result in an extremely unstable
regime.
If no party is able to form a government, new elections will be neces-
sary and will further complicate and slow down the economic progress of
Greece.
2, SYRIA. Greek Orthodox Synod in Damascus issues neutrality declaration- The
Greek Or o ox yno , a s 19 ep ember mee ing in Damascus, issue a neu-
trality declaration in regard "to the international political dispute." At
the same time the synod approved the activities of the Patriarch of Antioch
during his recent trip to the USSR, Rumania and Greece. The Patriarch had
informed the synod that his visit to the USSR was a goodwill tour, designed
to salvage as much church property as possible in the Soviet-controlled area.
Other reports indicated that the Patriarch received a considerable sum of
money, possibly 100,000 dollars, from Soviet officials while he was in Moscow.
The US Legation at Damascus comments that, while the synod's neutrality
declaration and its approval of the Patriarch's recent activities in the USSR
may assist the implementation of Soviet policy in the Near East, it does not
believe that the Church of Antioch itself has adopted a pro-Soviet policy.
The legation adds that continued criticism of the Church of Antioch by the
West would not be wise at the present time but that friendly overtures to the
Patriarch and the Greek Orthodox Clergy would achieve more in reversing Soviet
propaganda successes than would further public criticism by the West. (S
Beirut 267, 21 Sep 51; S Damascus 151, 21 Sep 51)
Comments Soviet ability to influence Greek Orthodox Church leaders out-
side the Soviet bloc has been enhanced by the facts that many members of the
church are within the Soviet Orbit and that church leaders outside the Soviet
area are unwilling to cause a division in the church. Soviet propaganda in
the church is likely to meet with further success, unless Greek Orthodox
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4.
56
leaders outside the Soviet area insist on a strong church stand against USSR
activities.
AFGHANISTAN- Administrative change in USSR-Afghan trade pacts No formal
negotiations will a conduc ed be een Afghanistan and e SSR to list in
detail the barter commodities for 1951-52, as prescribed in the four-year
agreement of July 1950, according to an official of the Afghan Ministry of
National Economy. Afghan merchants will be permitted to make contracts.
directly with Vostokintorg (a Soviet trade agency) in Kabul. Contracts will
merely be registered at Da Afghanistan Bank which maintains dollar balance
records.
The US Embassy comments that the administrative burden of managing
inter-government barter was apparently too great for the Afghan Government,
which will now merely maintain control through a government bank, (C Kabul,
Jt Wka 12, 21 Sep 51)
Comments As reported previously, exchange of goods under the pact
signe id n Moscow on 17 July 1950 has not gone smoothly.
INDIA. Communist Party has little chance of success in national electionss
Apropos
o he ommun s a I r y of n. is s desire to unc ion as a constitu-
tional party and to participate in the coming elections, Home Minister
Rajagopalachari told the Indian Parliament on 17 September that the govern-
ment has seen no concrete effort by the Party to dissociate itself from
violence. Therefore, he saw no need for himself and Prime Minister Nehru
to accede to a request of Indian Communist leaders for an interviews
US Embassy New Delhi comments that the statement of the Home Minister
is a further indication that the Indian Government intends to maintain
existing restrictions on Communist activities. These promise to reduce
materially the chances of any significant Communist success in the elections.
(S New Delhi, Jt Wka 38, 21 Sep 51)
BURM!4THAILAND. Thai coup leaders in Rangoon., According to the Thai police,
e Burmese Fanbas;s in Bangkok has veri led the presence in Rangoon of three
leaders of the abortive 29 June Thai coup, including the commanding officer
of the ship upon which Premier Phibun was held captive. The police indicated
that no action against these men was contemplated by the Thai Government for
the present, although their movements would be followed.
Bangkok reports that there are inconclusive rumors that twohofuthese are uin
gees have Communist connections. (C Bangkok 707, 22 Sep 51)
Comments The Thai government has taken no steps to extradite others
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implicated in the coup who are being held in custody in Indochina and in
Malaya.
6. INDOCHINA. Vietnamese vice-premier is pessimistic about Fre.eh-Vietnamese
re a ions: guyen Khac Ve
Vi
9
e amese vice-premier and long imeexponen
OT F renc -Vietnamese cooperation, recently revealed in an interview with
Charge Gullion his profound dissatisfaction with the orientation of the
Vietnamese Government and its sub
i
serv
ence to the French.
that any enlargement of the cabinet would only enlistment meittofnVd
et
namese who are entirely French ifl s path , mean the eat so far as the -
organization of the French Union is concerned, Premier Huu would approve
whatever the French desired. (S Saigon 688, 23 Sep 51)
Comments It is possible that Khac Ve, in uttering these familiar com-
plain srely expressing pique at curtailment of his own powers. Nev-
ertheless, there has been during the past several months a signifiocat
movement out of the Vietnamese Government, either voluntarily or under
pressure, of Vietnamese who have long subscribed to the principle of French--
Vietnamese cooperation but who have been unable to go along with the policies
.formulated by De Lattre and Tran Van Huu.
PHILIPPINES. Increased dissident activity noted: The US Embassy in Manila
no es a considerable increase in dissiden activity during the past few
weeks, consisting mostly of attacks by small units, which it attributes to
the following factors:
(1) the traditional Communist pattern of destroying con-
fidence in the government and creating a psychology of fear;
(2) the Huks' known policy of attempting to disrupt the
November elections, and
(3) continued armed forces' pressure on the Huka, neces-
sitating action to replenish supplies and rebuild morale.
(C 1105 Manila, 21 Sep 51)
Comment:
divide into- squadrons of 12 men, with each squadron domkmafndersunderborders
to carry out at ]east one ambush or kidnapping per month or be demoted.
In addition to the increased Huk activity, pre-election disturbances
not necessarily connected with the Huks are intensifying in accordance with
the pattern of previous years.
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8. CHINA. Plot to smuggle oil and rubber from Borneo to China uncovered: The
nsulGeeneral in Hong Kong believes that the 1,600-ton British vessel
Lady Wolmer is scheduled to load petroleum and rubber in Borneo for Macao
or Communist China. He adds that the vessel's owners, Wheelock, Marden and
Company, are "notorious blockade runners."
In mid-September the reporting officer was able to break up a similar
arrangement involving the Panamanian-flag vessel Nidar by notifying the
Panamanian Consul General, who obtained a written assurance that the Nidar
would not call at Communist ports or carry "war materials" to Macao or Hong
Kong. (C State Hong Kong 1174, 2L Sep 51)
Comments There have been occasional reports of the movements ofoil
productsfrom Borneo to Communist China. None of these reports has been con-
firmed, however, and the scale of this smuggling appears to be still small.
9. Provincial Police organization on Formosa en rgeds
25X1 C N 1 September a
ore gn Affairs Police Officer Group was established on Formosa within the
framework of the Foreign Affairs Section of the Provincial Police. Cheng
Yi?kuan, already chief of the Foreign Affairs Police, will direct the newly
organized group--consisting of 70 officers--in their street patrolling
duties and in various, other assignments involving foreign diplomatic missions
25X1 A on Formosa.
Comments Cheng Yi-kuan owes his job as head of the Foreign Affairs
Police o Chiang Kai-shek's son, Chiang Chingwkuo, Chiang Chingskuo's power
in the Nationalist regime has been greatly increased in recent months due
to his iron-handed control of all police and secret services activities on
Formosa.
10. KOREA. Recent Communist prisoners report serious food shortages. According
ova US Eighlh Army opera ons repo' of 1d S e p t e m b e r , Communist prisoners of
war taken recently indicate that "a marked food shortage (exists) across the
entire front." It is observed that these reports "substantiate the belief
that the UN air interdiction of the enemy main supply routes is of etive at
the tactical level." (S FEAF AX 1027, Tokyo, 23 Sep 51)
Comn nts While UN aerial interdiction of supply routes has undoubtedly
played a -major role in constricting enemy rations fpr the front lines, other
factors have also played a part. Among these are the extreme shortage of
food obtainable by foraging in the present battle area, the apparent high
priority given by the Comzwriists to the forward movement of munitions and-ord-
nance, and the food shortages known to exist generally in North Korea.
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SECTION 3 (WESTERN)
1. GERMANY. McClo'y continents on signing of interzonal trade
Commissioner McCloy believes that the West ern position would be st gh
strong in
the event that it becomes necessary for the Allies to suspend the recently
signed interzonal trade pact. He states that the USSR and the East Germans
were made sufficiently aware that their present harassing measures in
Berlin must cease as a condition for continued East-West German trade,
despite the fact that nothing was agreed to in writing. McCloy adds that
if the Soviet and East German authorities wish to reimpose restrictions,
they will do so regardless of any promises or commitments, but at least
they have been warned that such action may result in an Allied order to
suspend interzonal trade. (S Bonn 188, 22 Sep 51)
Comment: So far, the East Germans have complied with the Nest's
conditions only to the extent that they have reduced the rates of the
tax on Berlin autobahn traffic. Interference with parcel post shipments
continues, and there are indications of further delay in the promised
reopening of the vital . tothensee canal lock.
2. AUSTRIA. US reluctantly agrees to An.lo-Soviet ne otiations on air cor-
ridor: At the meeting of the quadripartite Air Directorate on 19 Septem-
ber, the Soviet and British representatives proposed withdrawal of the
air-corridor question from the agenda pending high-level bilateral
negotiations. The British representative stated that several proposals
are under consideration -- a Soviet proposal for prior notification of
flights, and two British proposals for a central traffic control center
and the creation of a corridor "funnel" involving variable-altitude
flights. Results of these discussions will be submitted to the directo-
rate for quadripartite examination. The US, strongly supported by the
French, expressed deep concern that the bilateral negotiations may
possibly prejudice quadripartite action, but agreed to the deletion
from the agenda. In private conversations American officials advised
the British of US concern that prior flight notification might ulti-
mately jeopardize air-corridor rights and create difficulties for
non-occupation airlines. (S Vienna 1096, 22 Sep 51)
Comment: The British High Commissioner has previously informed the
US Legation that the British would not agree to prior notification of
flights (see OCI Daily Digest, 18 Sep 51), Although concessions in
this or in other respects might encourage the Soviet authorities to
reopen the entire question of air-corridor rights, it would appear that
agreement on the necessity of quadripartite approval will provide
ample protection against concessions regarded as unacceptable by the
US,
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3. U3 protests Austrian transfer of prisoner to Soviet sector:
US authorities in Vienna have protested to the Austrian Government the
order of a Viennese judge transferring an Austrian prisoner held in a
US-sector jail to a prison in the Soviet zone of occupation. The order
was not cleared with the US headquarters and is wholly without precedent.
US officials regard this as a serious matter. The prisoner in question
has been accused by the Soviet authorities and the Communist press of
participation in an act of arson committed against a Soviet managed
factory by a Communist "deviationist" in the employ of the Americans.
US officials believe that the Soviet headquarters desired the prisoner
for questioning. The Viennese judge has admitted that he acted "under
pressure,n (S Salzburg Joint Weeka 38, 22 Sep 51)
Comment: The Soviet authorities in Vienna have previously shown ex-
treme sensitivity on the arson episode, apparently fearing that it may
represent a weakness in the local Communist organization. However, the
Austrian courts have up to now cooperated with the US in interzonal
police matters of this nature.
4. ITALY. Communist workers may be taught industrial sabota e in USSR:
.The Communists are preparing to send workers who are party members on
a special train to the USSR for a one-week visit with all expenses paid.
A recruiting committee of th C
e pro-ominform Communist Party of Trieste
has visited major factories in that area in order to include five local
workers in the
Comment: It is quite likely that the delegation's scheduled visit
to the Soviet Union is for the purpose of instruction in industrial
sabotage. This would be in accord with reports that the Communist Party
has recently been accelerating its program in that field.': Another pos-
sible purpose of the visit is indoctrination in the Soviet-Communist
peace offensive in order to give the campaign in Italy greater support
among the working classes.
The delegation's departure from Italy would be another instance of
Communist success in evading the government's July 1951 ban on the
issuance of passports to Italians wishing to visit Iron Curtain
countries.
5. Communist defectors describe ro gram of new movement: Communist
defectors Magnani and Cucchi have announced the program of their Italian
Workers' Movement, which held its first national congress in Rome on
23 and 24 September. They stand for national independence and opposi-
tion to the Atlantic Pact, but defense against any aggressor; abolition
of the Italian peace treaty of 1947, and direct negotiations with Tito
for the return of Trieste to Italy on the basis of an ethnical solution;
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efforts to attain a parliamentary majority that would allow the forces of
labor to assert themselves; and defense of the principle of the state's
lay character and of full freedom of worship and religion. Magnani said
that the movement was trying to unite the independent socialists.
Cucchi and Magnani said their movement has from 12,000 to 15,000
militant followers and has progressed particularly well in Piedmont,
Milan, Rovigo, Emilia, Apulia and Sicily. In the Emilia region of north
Italy, where the movement was born, the Communist Party has organized
strong-arm squads on motorcycles to intimidate would-be "deviationists."
In Bari and Foggia, in southern Italy, Communist labor federations are
undergoing a crisis, according to Magnani, and at present are being run
by party officials sent from Rome headquarters. (a FBIS, Paris Radio,
23 Sep 51; U NY Times, 25 Sep 51)
Comment: The figures given for the Italian Workers' Movement seem
reasonable. Early last spring the following was estimated at about ten
thousand. There has been little evidence recently of large-scale defec-
tion to the movement.
UNITED KINGDOM. Embassy assesses potential swing to right in general
election. In a preliminary estimate of general election prospects, the
US Embassy in London states that British speculation centers mainly
around the size of the expected Conservative majority. Stressing the
number of constituencies likely to change hands, the embassy points out
that in the February 1950 election, 183 of the 625 seats were won by
minority votes in three-cornered fights, and 45 others were won by a
majority of less than 1,000. There will be far fewer three-cornered
contests in this election, since the Liberal Party has thus far put
forward only 174 candidates. In 1950 there were 478 Liberal candidates.
An increase of only 303 percent in the Conservative popular vote in
the last general election netted the Conservatives a gain of 85parlia-
mentary. seats, while in 5 by-elections held so far this year the
Conservative share of the popular vote has risen an additional 7 per-
cent. Nevertheless, on the basis of the 1950 figures, 220 seats look
reasonably safe for Labor,168 for the Conservatives, and 2 for. the
Liberals.
The embassy warns incidentally that "there is real danger" that
the US may be injected into the campaign by Bevan or others who have
charged the government with being too much under American influence.
(C London 1479, 21 Sep 51)
Comment: The comparative scarcity of Liberal candidates in this
election is probably an advantage for the Conservatives. In 1950 the
Liberals collected 2.6 million votes. In a recent poll of Liberal
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voters, about 40 percent said that, given no candidate of their own
party, they would vote Conservative, while 21 percent said that they
would definitely vote Labor,
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7. S%EDEN. Neutrality influenced termination of ECA aid: The US Embassy
in Stockholm has learned that the decision of the Swedish Government
last month to terminate ECA aid was made by the full cabinet. The
embassy interprets the decision in part as a tendency "to crawl back
into its neutral shell." (S Stockholm 388, 24 Sep 51)
Comment: The Swedish Government fears that ECA is being trans-
formed into an economic handmaiden to MDAP, and that various ECA organs
such as OEEC will become mere economic instruments of NATO. The
government fears that Sweden would thus become in many ways a de facto
member of NATO,
8. BRAZIL.. Industrial diamonds smuggled to Soviet Orbit:
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a Brazilian and an Austrian are engaged in
smuggling industrial diamonds from Brazil to the USSR. The two men are
reportedly operating "from headquarters in Bad Gastein in the US occu-
pied zone of Austria, and are using carriers to bring the Soviet
lati-
p
num to Brazil and return with B zilian industrial diamonds," (S/(bntrol,
Comment: Reports of the smuggling of diamonds from Brazil to the
USSR have been prevalent since at least 1949. In December 1950 the US
Embassy in Brazil reported that "if the fact were established that
Russia is obtaining diamonds from sources in Brazil, consideration might
be given to the establishment of a -purchasing program similar to the
one which was in operation during World War II.," During the past year
the Brazilian Government prohibited a shipment of quartz to'Czecho-
sl?vakia, and it could be expected to cooperate in an effort to wipe
out the illegal diamond trade,
CHILE. Communists successful in two important labor union electionss
On 1212 August Communists were elected to three out of five officer
positions in both the Lota and Coronel coal mining unions. Recent
information indicates that the Minister of Labor had annulled an
earlier, technically legal union election at Coronel, and that he per-
mitted these latest elections to be held without the elimination of
Communist candidates as provided for by law. The embassy comments that
"it is inconceivable that the minister did this without the concurrence
of President Gonzalez Videla." The minister has implied that the poli-
tical affiliation of union officers is secondary to labor peace and
continuing production in the coal mines. (C Santiago D-229, 23 Aug 51)
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Comment: The Communist labor position is now strengthened by their
open domination, at least in numbers, of the directorates of these two
unions which are important to the Chilean economy. The officially con-
doned election of Communists, eulogized by Communists as the first
"free" union balloting since the passage of the anti-Communist Defense
of Democracy Law three years ago, is a forward stride in their recently
intensified campaign against the "Law." While the government's action
was partly dictated by depleted stocks of coal and the existing threat
to rail operations, electric power production and gas output, it was
a definite concession to Communists.
10. MEXICO. Communist peace campaign suffers severe set-back: The recent
release of a letter written last January by Martin Luis Guzman, in
which he resigned from the vice-presidency of the Mexican Peace Commit-
tee, is considered by the US Embassy in Mexico to be "the severest blow
suffered by the Mexican peace movement to date." Guzman, who is
publisher of the influential news weekly Tiempo, and is now Mexican
Ambassador to the UN, explained in his letter that his original doubts
concerning the committee had become certainties, and that he was con-
vinced that the peace campaign was not dedicated to conciliation or
rapprochement, but was concerned with unilateral proposals practically
identical with those which would be advanced by the USSR. The embassy
states that "what could be termed a furor has already been created
in the press and among intellectuals by the Martin Luis Guzman affair,"
and it foresees "the beginning of a new campaign to discredit entirely
the phony peace movement." (C Mexico City D-135, 13 Aug 51)
Comment: Guzman,in a conversation with the Cultural Attache of
the US Embassy, said he had been asked by representatives of Vicente
Lombardo Toledano, not to release the letter at the time it was
written for fear that "the whole peace movement would collapse in
Mexico" if he did so. Its recent release was suggested by the
Attache, whom Guzman approached in order to explain his ideological
sympathies, and was published by Guzman in connection with his rejec-
tion of an invitation to attend the forthcoming Yugoslav Peace Congress.
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26 September 1951
CIA No. 49359-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.
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SECTION 1 (SOVIET)
1. USSR, Embassy Moscow suggests approach on release of US internees in Asia:
The US Embassy in Moscow believes that the slight success achieved by the
British in negotiating with the USSR regarding the release of civilian in-
ternees:in North Korea is partially the result of the fact that the former
(pre-June 1950) British diplomatic representative at Seoul is among the
internees,- In order to bring about the release of US civilian internees,
the embassy recommends a moderate approach to the Soviet Foreign Office
emphasizing the normal character of the US attempt to seek the good offices
of the USSR as the government maintaining diplomatic relations with the two
other parties. This approach should be made on the highest possible level;
the US Ambassador's parting visit to Vishinsky might provide a suitable
occasion.
The, embassy concludes that if Soviet Ambassador Roshehin makes a
suitable representation in Peiping regarding US civilians in Communist
China, it might indicate Soviet willingness to act as intermediary since
presumably he would not be acting without authority from Moscow. (S, S/S
Moscow 503, 24 Sep 51).
SECTION 2 (EASTERN)
in Rangoon has been instructed to assure the Burmese Foreign Office that
the US has in no way been involved in the smuggling of arms to the Chinese
Nationalist troops in Burma, and that the US will take appropriate action
against any American citizen found to be engaged in such activities. The
Burmese also are to be told that the US and UK Ambassadors in Bangkok will
make a joint approach.to the Thai Government requesting full cooperation in
preventing supplies moving to those troops.
Meanwhile, reports from New Delhi indicate that the Indian Government
has been favorably impressed with an account of US efforts to solve the
problem. A high Indian official has suggested that perhaps the best pro-
cedure might be to lay "all the facts" before the Burmese in an effort "to
see what could be done," (S, S/S to Rangoon 279, 20 Sep; S, S/S New Delhi
1088, 22 Sep; S, S/S New Delhi 1091, 22 Sep 51).
Comments These reports indicate a more cooperative attitude on th
e
part of India than was previously denoted.
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3. JAPAN. State of war with Italy to be terminated: The US Political Adviser
in Tokyo reports that an exchange of notes, terminating the state of war
between Japan and Italy, will be released on 27 September. (S, S/S Tokyo
630, 25 Sep 51).
Comment: While the texts of the notes are not available, it is be-
lieved that Japan has recognized its responsibility to compensate for
damage to Italian property in Japan which occurred after g September 1943,
but has refused to extend any of the other benefits of the multilateral
peace treaty.
SECTION 3 (WESTERN)
FRANCE. French oppose Italian proposal that economic provisions of peace
treaty be revised-. The French Foreign Office has instructed its Ambassador
in Washington to oppose categorically injection of economic questions into
revision of the Italian Peace Treaty of 1947, The French take the position
that the agreement with Italian Premier de Gasperi at Ottawa. pertained en-
tirely to a revision that would give the Italians "moral satisfaction" and
free them from the military restrictions. They feel the new Italian pro-
posal involves a fundamental change of the entire philosophy behind revi-
sion, a change the French are "unable to contemplate."
The French feel that if the Italians are not confronted with tri-
partite unity on this point they will continue to push for additional changes
and exploit the differences among the three Western powers. They fear that
the Department of State might find acceptable a solution providing for bi-
lateral negotiations regarding relief from the economic provisions of the
treaty. (S, S/S Paris 1545, 24 Sep 51).
Comment: France's insistence on the provision for claims for war
damage in the Japanese Peace Treaty, as well as fear of setting a similar
precedent in a possible German treaty, may account for its opposition to
revision of the economic clauses of the Italian treaty.
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