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11 May 1951 atJ-3.5(c)
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CURRENT INTELLIGENCE BULLETIN

/1' ~ ~- '•'-'.~~,~
DOCUMENT NO. - - - - - - , , , - - - - - -
NO CHANGE IN CLAfJ:;. ¥ _._.JI
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NEXT R2\/iEV\I DA t E:: - - - - - - ~ ~ +
AUTH~ HRJ_9,;..~.
PATJ,
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~J.'! nEVIEW!;R· L _ _ __ _ L _ _ _
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Office of Current Intelligence

CENTRAL INTELLIGENCE AGENCY

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SUMM ARY
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GENER AL

1. India and Ceylon favor Commu nist particip ation in Japanes e peace
treaty negotia tions (page 3).
2. Comme nts by US Embass y Moscow on Soviet note concern ing Japanes e
peace treaty (page 1).
3. Comme nt on recent develop ments regardi ng Soviet and Americ an
wheat for India (page 4).
FAR EAST

3.3(h)(2)
5. Commu nist China seeks rubber from Indones ia (page 5).
NEAR EAST

6. Iran rejects UK request for arbitrat ion of oil issue (page 6).
7. Syria appeals to Egypt for aid in Syrian- Israeli border dispute
(page 7).
Bo. Some improv ement noted in Egypt's attitude toward Anglo-E gyptian
defense issue (page 7).
EASTER N EUROP E

3.3(h)(2)

WESTERN EUROPE

10. French Commu nists reporte dly prepare new strike wave (page 9).
11. Schuma n Plan ratifica tion delayed by French politica l situatio n
(page 10).
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GENERAL
1. India .and Ceylo n favor Comm unist partic ipatio n in Japan ese peace
treat y negot iation s: tb'
·~,
.,-)
Acco rding to vario us diplo matic sourc es, India ''.
and Ceylo n feel that, in order to ensur e a
~
lastin g settle ment , every effor t shoul d be made
r--u
to obtai n Sovie t and Comm unist Chine se par-
ticipa tion in Japan ese peace treat y nego tia-
tions . India is oppos ed to Japan ese rearm a- 3.3(h)(2)
ment , belie ving that Japan 's secur ity shoul d
be guara nteed by the UN. On the other hand,
Ceylo n think s that Japan , as a sover eign
natio n, has the right to look to its self-d efens e
indiv idual ly as well as colle ctive ly. Both
coun tries are oppos ed to any treat ment which
L-~~~~~~~~~~ will leave bitte rness
amon gst the Japan ese,
and neith er objec ts to the devel opme nt of norm al Japan ese ·com
merc ial
relati ons.

2. Comm ents by US Emba ssy Moscow on Sovie t note conce rning

Japan ese
peace treaty ~

The US Emba ssy in Moscow belie ves that the

Sovie t Forei gn Offic e felt oblig ed to come 3.3(h)(2)
forth with comm ent in respo nse to the draft
Japan ese peace treat y prese nted by the US
on 29 Marc h. The timin g of the Sovie t note is large ly due, in
the
bassy 's opinion, to a desir e to place the USSR's posit ion on recor Em-
befor e furth er devel opme nts occuro The Emba ssy consi ders that d
the Sovie t dema nd for a Four -Pow er Coun cil of Forei gn Mini sters (a)
June or July may be desig ned to "keep the Council of Forei gn in
Mini sters
pot boilin g for propa gand a purpo ses" in antic ipatio n of a possi
ble failu re
of the Paris _negotiations, and (b) the omiss 1on of Franc«. from
the
posed meet ing is notew orthy . Qf the five speci fic propo sals conce pro-
the peace treat y conta ined in the' note, two are devot ed to the Japaµrning
ese

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economy and tradeo The Embassy ?eels that aside from the propaganda
aspects of these proposals, it is also possi.ble that the USSR~ con-
sciously or unconsciouslyy is betraying its concern over the economic
situation of Red China if traditional Japanese economic relationships
in Asia are not re-established.

Comment: Although in the past the Soviet

position regarding the inclusion of France in a Council of Foreign
Ministers on a Japane::,..:i peace treaty has been ambiguous, it appears
that the USSR has never specifically proposed that France should join
the US, USSR, Great Britain and China in drafting the treaty. On the
other hand, the USSR has on several occasions made specific ref er-
ences to the other four powers in this regard. Its latest note makes
it clear that the Soviet Union believes France is not entitled to a major
role in the preparation of the peace treaty on the grounds that it did
not formally declare war on Japan and was not a signatory of the
Japanese surrender document. (A Free French representative actually
signed the surrender document). . /,,,,,.

3. Comment on recent developments regarding Soviet and American wheat •::.

for India: ·
~/ .1

According to the New Delhi radio, Prime

Minister Nehru told an applauding Parliament on 10 May that Soviet
vessels were already on their way to India with the first shipments
of a total of 50,000 tons of wheat recently purchased from the USSR
• for cash. Deliveries of the full amount were to be completed by the
end of June. At the same time, Nehru announced to Parliament that:,,
in his opinion, the two food bills now before the US Congress had no
political or discriminatory conditions attached to them and that "on
these grounds" there should be no objection to accepting either of
them. He added that he preferred the terms of the House bill because
they were simpler.

Stro::,1g representations were necessary to get

Nehru to make the above statement on the US food bills. It is note-
worthy ichat, in making the statement, Nehru maintained his independence

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of US favors by supporting the House bill, which provides wheat to

India solely on a loan basis. The final terms of a US loan may be the
determinin g factor governing an Indian decision to accept US or Com-
munist offerso

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3.3(h)(2)

· 5. Communist China seeks rubber from Indonesia~

The Governmen t of Indonesia is considering

Communis t Chinaes offer to purchase 50~ 000
tons of rubber. In conversatio ns with the 3.3(h)(2)

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US Ambas sador in Djakar ta, Indone sian Foreig n Minist er _Subardjo

stated that the Chines e were offerin g rice and tungste n in payme nt for
the rubber .
Comm ent: This approa ch to Indone sia, to-
gether with a simila r offer to Ceylon, is testim ony to the strong efforts
of the Chines e Comm unists to find new source s of rubber suppli es as
an alterna tive to Mal.::yan supplie s. In view of Indone sia's declar ed
willing ness to sell rubber to Orbit as well as non-O rbit countr ies,
Indone sia is more likely ~ accept the Chines e Comm unist offer than
Ceylon. In any case, Indone sia lacks the admin istrativ e machi nery
to preven t Orbit purcha ses of private ly-own ed rubber , which consti -
tutes the overwh elming bulk of its rubber output.

NEAR EAST

6. Iran reject s UK reques t for arbitra tion of oil issue: "

The UK reques t to Iran for arbitra tion of the 3.3(h)(2)
oil issue was formal ly rejecte d by the Iranian
Ambas sador in London on 8 May. He· inform ed
the British Foreig n Office that Iran will pro-
ceed with its oil nation alizati on progra m and will not submit to inter-
nation al arbitra tion. Accord ing to the UK Embas sy in Tehran , the
Anglo -Irania n Oil Compa ny's deman dfor arbitra tion was inspire d by
a messa ge from the Shah indicat ing that Iranian Prime Minist er Mossa deq
would welcom e such a deman d becaus e it would enable him to procra sti-
nate. Mossa deq is unders tood, howev er, to have expres sed astonis hment
at the deman d for arbitra tion.
Comm ent: Mossa deq' s rejecti on of the UK
deman d for arbitra tion is consis tent with his previo us stand. It was
probab ly conditi oned by the consid eration that Iran could not accept
arbitra tion under the terms of the 1933 conces sion and still mainta in
that the conces sion was invalid . Wheth er the UK action was taken at
the Shah's instiga tion or not, it will probab ly have the effect of forcing

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Mossad eq to delinea te his plans on the oil issue more clearlyo To

, date, he has indicate d that he will not take drastic action immedi ately
and that he intends eventua lly to replace Anglo-I ranian Oil Company
technic ians with Iranian s.

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7. Syria appeals to Egypt for aid in Syrian- Israeli border dispute : _, '. .) f
•t-1
US Ambass ador Caffery in Cairo has been 3.3(h)(2).
informe d by the Egyptia n Foreign Ministe r
that Syria has appeale d to Egypt for aid in
connect ion with the cu,rrent Syrian- Israeli
border trouble s, and that Egypt is "on the spot" and mus·t do somethi ng
about the appeal. The Foreign Ministe r stated that since the UN is not
taken serious ly in his part of the world, he was request ing 4mbass ador
Caffery to submit an urgent appeal to the US to take some positive
action. The Foreign Ministe r indicate d that he was taking the matter
up persona lly with Caffery so as not "to throw monkey wrench es into
the machin ery. "
Comment~ The type of aid Syria has request ed
from Egypt is not defined. Syria would logicall y turn to Egypt, the most
influent ial of the Arab countri es, since Egypt has long support ed an
indepen dent Syria against proposa ls for incorpo rating it with Iraq and
Jordan. 3.3(h)(2)

The serious crnmcern felt by the Arab States general ly

over the current Syrian- Israeli border inciden ts is underlin ed by the
fact that a special meeting of the Arab League Politica l Commi ttee is
schedul ed to meet in Damasc us on 14 May to discuss the border situatio n.

8. Some improv ement noted in EgYPt's attitude toward Anglo-E gyptian

defense issue:
The US Ambass ador in Cairo reports that the 3
situatio n involvin g the Anglo-E gyptian treaty .3(h)(2)
negotia tions has taken "a momen tary turn for
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the
the bette r." Egyp tian Forei gn Mini ster Salah eddin recen tly told t "to
US Amb assad or that if the forth comi ng Briti sh reply allow s Egyp
to
save some face, " the Egyp tian publi c will be told that the door on
to Lond
furth er discu ssion s is still open and Salah eddin will then go be
for subse quen t negot iation s. Salah eddin indic ated that Egyp t would ress
that if no prog
prepa red for discu ssion s throu ghou t the summ er but y.
had been made by Nove mber , Egypt would denounce the 1936 Treat
a break -
The US Amb assad or belie ves that the King 's desir e to preve nt
prese nt
down in nego tiatio ns at this time is the main reaso n for the
chang e in the Egyp tian attitu de towa rd the treat y probl em.
Comment~ King Farou k' s oppo sition to a
ddinY s
break in .t\ngl o-Egy ptian treat y discu ssion s, coupl ed with Salahe
d help con-
more mode rate attitu de towa rd the defen se probl em, shoul
ess,
sider ably in bring ing about a contin1,1ation of the talks. Neve rtheldefen se
a wide gap rema ins betwe en Briti sh and Egyp tian think ing on the
issue .

EASTERN EUROPE

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3.3(h)(2)

WESTERN EUROPE

10. French Communists reportedly prepare new strike wave:

/ I 3.3(h)(2)
. \ a widespread strike move-
ment will probably be unleashed following the
Congress of the General Workers' Confederation
at the end of May. Although this renewed strike activity is planned as
part of the electoral campaign, the Communist Party expects to pursue
the strikes primarily within the framework of economic demands, with
such political tie-ins as conditions warrant. The predominance of
economic over political slogans was particularly noticeable at th.i.s years 9 •
Communist May Day demonstration in Paris. Intensified French Com-
munist propaganda at the plant level in support of both economic and
politicaJ objectives has been making progress since the Easter strikes,
and several well-informed non-Communist labor leaders have affirmed
that a concentrated "unity of action" program on "exclusively worker
demands" would force the Socialist and Christian industrial unions to
cooperate or lose their fallowing.

Comment~ A new round of wage demands is

to be expected soon, because the steady rise in the price level is rapidly
nullifying benefits gained by the March strikes. The Communists seem,
however, to have picked June for fomenting new strikes with an eye to
political rather than to economic aims, since the pre-election govern-
ment will not be in a position to commit its successor to a new wage
program. Should the Communists give the strikes a too pronounced
politi~al coloring, however, labor's readiness to cooperate would be

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sharply checked because of its wariness of being exploited by the
French Communist Party.
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11. Schuman Plan ratification delayed by French political situation~ ·'

3.3(h)(2)
According to the US Embassy in Paris, al-
though the bill for French ratification of
the Schuman Plan was submitted to the Cabinet
on 9 May prior to presentation to the National
Assembly at the end of this week, parliamentary action will be post-
poned until sometime after the June elections and the organization of
the new Parliament -- that is, until at least mid-August. The delegates
of the six participating countries have_ informally exchanged ratification
documents, but the submission of the Schuman Plan to the German
Bundestag in early June is doubtful in view of the delay in French action.
The Netherlands plans ratification before the end of Parliament9 s session
on 20 July; the ratifications of the othe;r Benelux countries are being
held up by technical difficulties. As yet, the Embassy has received no
indication of the action to be taken qy Italy.

<;ommenti The opposition in France can be

expected to pose a serious threat regardless of the composition of the
next Assembly. German ratification now appears probable in view of
rec~nt trade union approval of the Plan and the f allure of the Socialists
to gain appreciably in recent provincial elections. However, undue
delay elsewhere may prejudice the present favorable outlook in Germany.

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