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CURRENT INTELLIGENCE BULLETIN
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Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. Swedish and Yugoslav officials comment on Soviet approach regarding
Korea (page 3).
FAR EAST
Chinese prisoners taken recently ate of inferior calibre (page 4).
Testimony regarding MacArthur's removal affects Japan adversely
(page 4).
NEAR EAST
EASTERN EUROPE
WESTERN EUROPE
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Soviet officials interfere once again witb West Berlin trade (page 6).
Italian Communists gain votes, lose control of "'city governments in
industrial north (page 6).
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1. Swedish and Yu
GENERAL
oslav officials comment on Soviet a
I II
roach re
ardin
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Korea: 3.3(h)(2)
In a conversation with the US Ambassador in
litockholm, Swedish Prime Minister Erlander
expressed regret that the Swedish UN delegate
had confirmed the existence of a Soviet peace
feeler and indicated that he had not attached
any importance to the approach. Erlander
said that he was not at liberty to disclose
the identity of the Russian contact or of the
Swedish intermediary. In a subsequent conversation, Swedish Foreign
Minister TJnden argued that the approach might be important, because the
Russian, an important Communist, had categorically asserted that the
Korean conflict could be terminated on the basis of a return to the status
quo ante, and because the MOscow press had given prominence to similar
proposals (e. g. Senator Sohnson's resolution).
Yugoslav UN delegate Bebler has reaffirmed
his belief that the USSR is ready for bilateral US-USSR talks leading
toward a Korean settlement along the 38th Parallel. Bebler elaborated
that Chinese Communist military defeats have placed the USSR in a posi-
tion where total victory in Korea can be achieved only by open Soviet
intervention, a stake which is too high for the USSR because it does not
want a global war. He added that the USSR fears that otherwise another UN
Invasion of North Korea would result in a Soviet loss -of prestige through-
out all of Asia.
Comment: Soviet UN delegate Malik 's denial
on 28 May that the USSR has made any offer to discuss a settlement of
the Korean war can be regarded as an indication that the USSR does not
wish to become involved in bilateral negotiations on Korea at this time.
Malik did not deny, however, that the USSR might be willing to participate
in negotiations regarding Korea, despite the USSR's public protestations
of non-involvement in the Korean dispute.
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FAR EAST
. Chinese erlsoners taken recentl are of inferior calibre:
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The US Far East Command reports that, with
respect to status of training and physical appear-
ance, the "calibre" of Chinese Communist
prisoners of war taken in the current offensive
has been apprecia y lower than that of previously captured prisoners.
Comment: This is the first firm indication
that the Chinese are now using.inferior soldiery in the Korean campaign.
Previous Chinese prisoners (particularly those from the 3rd-and 4th Field
Armies) were veterans with a considerable degree of training and ,a fairly
�high level of combat efficiency.
3. Testimohy regarding MacArthur's removal affects ja
an adversely: 3.3(h)(2),
According to the US Political Adviser in Tokyo,
the testimony of Secretary Marshall and the
Joint Chiefs of Staff regarding MacArthur's
removal continues to have an adverse effect
on Japanese public confidence in the US. The "overly frank revelations"
regarding present US military unpreparedness to meet the world-wide
Communist threat, the impression that Europe has the highest defense
priority and the President's reference Ao Abe "terrible danger" facing
the free world combine to make the Japanese grimly conscious of their
precarious position on the edge of Communist Asia.
According to the US Political Adviser, while
most Japanese seem eager to remain aligned with the US, the "revelations"
give greater plausibility to the Japanese Socialist-Commtmist line calling
for neutrality in the East-West struggle. The Socialists, although roundly
defeated in the last election, can not be disregarded as a potentially
strong political party that would work Seriously to US disadvantage if it
were to come to power or become an effective opposition to a pro-US
conservative government.
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Comment: The Socialists currently face the
possibility of a split over their party's "neutrality" stand. In these cir-
cumstances, there appears little likelihood that they will be able to effect
a strong opposition. stand for a considerable period of time.
NEAR �EAST
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WESTERN EUROPE
Soviet officials interfere once again with West Berlin trade 3.3(h)(2)
�;oviet authorities in Berlin have initiated
ew measures that are holding'up West Berlin's
export trade with the West. Approximately
two weeks ago, the Soviet authorities respon-
sible for screening interzonal trade permits for certain restricted gods
shipped by West Berlin firms to Western Germany began refusing all
requests for permits, insisting that they be accompanied by a certificate
showing the origin of the raw materials used ift the manufacture of the
goods. So far, this move has resulted in a back-log of over 5, 000 permits.
gazgarial; In view of the extreme importance
of West Berlin's trade with the-West this Soviet move constitutes the most
serious recent harassing measure in Berlin. ,It follows upon recent Soviet
measures closing two canal locks and thus making the delivery of goods
between Berlin and Western Germany more difficult.
7. Italian Communists gain votesi lose control of city governments in
I-Mugs far north;
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In the local elections held on the week-end of
27 May in 23 provinces, largely in north
Italy, the Communist bloc tallied about 35
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percent of the vote as compared to 32 percent
in the national elections of 1948, while the
pro-Government bloc won approximately 44
percent as compared to 49 percent in 1948.
The anti-Conimunist parties gained administrative control of 2,340 out of
2,735 communes.
Comment: The final series of local elections,
which will be held 10 lune, can be expected generally to follow the same
pattern. The pro-Government_paktieS gained control of municipal coun-
cils in most of the important industrial centers of northern Italy (except
Bologna) by virtue of an electoral system that permitted the large bloc
of pro-Government parties to win two-thirds of the municipal council
seats whergver it won a plurality of votes. On the other hand, Communist
control of industrial labor appears stronger than ever. The gains of
the pro-Communist bloc indicate that Premier De Gasperi and his_ Chris-
tian Democrats were unable to keep domestic problems (e. g., high cost
of living, unemplbyment) from becoming the main issue of the campaign.
TC:' SE IC