Created: 5/5/1950

OCR scan of the original document, errors are possible


SUBJECT 1 Thooy Cooaamlst Youth Rally in SKPlta

Tbe vKkie expressed ia GU Intelligence fomorecduo0 (Probable Effect of tbe Vnj tooth Bally in Portia)erally valid with rogsxf to Soviet intantlono..

Evcntoarch Indicate tliats ouths, in-aludlng delngatoc from numerous uouotries. will partiolaaie in tfce Bally to bo holday in the Soviet Zone0 members of the East Ccman paramilitary police Bill join in the Rally cue are not likely tc bo armedifforts will be riede to stage isolated llllllMliSlliajj in thoociora oT Berlin.

In recent tohj'ls, Oosnuoisfc propaganda preparations for ihobeocce SM-kodly lass belligerent, tfuggeottng that

tho face of vigorous Western security trecautioLa, husd any plan it nay havo had toass invasion oferlin, ro-ovor, there ie still no raanon to eeliovc that tho USSR intends to use the Rally sx anything moreowerful propaganda toudou in ita continuing campaign to undermine tha morale of Tlest Berllnerti and render untenable the peal ti on of the western Pozers in Borlin.

Despite indications that -iho USSR docs not intend to use the Pallyretext for soloing Heat Berlin and will attenpt to restrict physical violence in Seat Berlin toli- rc iseal danger teat the situation will get out of hand and that scattered incidents may develop into nideeprecd violence which eould only be controlled by Allied troopa, The mere facthoroughly indoctrinated Coaxtucloto Demonstratingivided city alreadyigh state of tensionesult of Soviet pressure cannot foil tootentially osploeive situation.

Bote: ras not teen coore:nr tod iriik lie intolHaoaeo organ! iaf iuo 'Dojo'.'ircnto of ttefctj Arr.j, tftftyj and tha

Air I'crec




Dependence of the Soviet Bloc Electronics Industry upon uie West

Western exports to Soviet orbit countries of certain electronics items, production materials, and plant equipaent, although not large in dollar value, pa rait an expanding electronics production program in tha Soviet bloc and are asking an Important contribution to the Soviet war potential. The electronics industry in Soviet orbit countries le dopendent upon Western sourcesumber of spocialiaed materials, consonantb, assembled equipcwnt, and plant equipaent, and the projected expansion of the production of electronics Items in Eastern Europe is partially dependent upon the delivery of certain critical materials and plant equipment from suppliers in Western nations, particularly the OS, the UK, and tho Existing Western export controls do not prevent export to Eaatem Kiiropo of most of those items of electronics matorials and equipaent which Soviet bloc manufacturers need and aro attempting to acquireo

Electronics Manufacturing in the Soviet Orbit.

All significant electronics manufacturing capability in Eastern Europe is in the USSR, Eaatern Germany, Hungary, Ciecboolovakia, andesser extent, Austria. Prior to and during World far II, the major part of Soviet facilities, technology, and end-products was obtained from ths US.ow point during the war, the USSR has increased its capability to produce electronics materials by: onfiscating plant, engineering data, and skilled personnel from Germany andxploiting the reorganized industries in Eastern Germany and the Sotelliteajoncentrating on developing produotion facilities and now techniques within tha DSSR.

The Soviet bloc electronics production capaoity is still extremely small In comparison to US capacity. Using the quantity of vacuum tubes manufacturedough index of electronics production capability, the capacity of the Soviet blocas less thanercent of US capacity.

The Soviet bloc countries continue to rely upon western sourcesumber of spocialiaed materials, components, assembled equipaent, and

This raaoorandua has not been coordinated with tbe intelligence organisations of the Departments of State, /irny. Navy, and the Air Force o

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plant equipment not yet being produced or not being produced in adequate quantities in tbe Soviet bloc. Furthonoore, projected expansion ofof electronics Items in Eastern Europe is partially dependent upon tha delivery of certain of these materials and plant equipaent frora suppliers ln Western nations, particularly ths US, the UK, and tbo Netherlandsa These countries have normallyarge share of Eastern European requirements for electronics items, particularlyspecialised materials, and plant Substantial orders are still being ae received* Tho-flofffcoiffi^ftrie, Canada, West Germany, Japan, and Sweden are,esser extent, manufacturers of electronics equipment, but ins "nt, nfflT iffpyrtant t-n

2. Categories of Soviet-flloc Electronics Imports.

Goods (radios and receiving tubes). Shipments oftubas', which have military and industrial as well as consumer ihave been considerable to the Soviet orbit, especially from tho US

where prices are relatively low. Probably because of foreign exchange limita^ippo and lack of consumer purchasing power, trade in radios has not been slgniflcanto Western nations have not considered radiosto devalopment of the Soviet war potential,,

equipment andI Component IteissP Soviet bloc interestnotedimited list of assembled equipment and componentneed to import such productsesult of current lack ofof diversion in effort to other lines. Thie list includes:

) Electronic test equipment

High-voltage capacitors Electrical meters Transmitting Receiving tubes

[2) iTotctypS:)



C. rts To support the needs of tba expanding electronics atanufacturing Industries in the Sovietumber of specialised parts or materials are imported from Western sources. The apparent reason Is usually inadequate existing fabricating capacity or serious technological difficulties, ratherhortage of basic raw material ln tbe Soviet bloc. Among the items requested free Western sources for Soviet orbit electronics industries are the following!

Electrolytic copper wire bare and billots

Special nickel tubing and ingots, of types

required for vacuum tubes


ingots, rod and wire

Electrical capacitor thin paper

Zirconium compounds

Graphite anodes

insulation materials

tube emission coating materials

d. Technical Data and Speciallrad Production Equipment. Theis also attempting to obtain:

Vacuum tuba and lamp manufacturing machinery

Ductile tungsten and molybdenum fabricating equipment

Technical assistance agreements

3^ US Export Controls.

Of these eighteen product-lines which the Soviet bloc electronicsapparently need from nestern sources, only four (electronic test equipment; molybdenumirconium coapounds; and vacuum tuberaachinory) are completely embargoed to Eastern European destinations by the US. Five more (transmitting tubes} electrolytic copper wire bars and bllletsj special nickel tubing and ingots, of types required for vacuum tubes; tungsten ingots, rod and wire; and ductile tungsten and molybdenum fabricating equipment) are controlled in part by quantitative (IB) restrictions on exports. For the remaining nine, which make an important contribution to tha Soviet war potential, no adequate control is administered by the US. FurthariEore, few of these aignxeen items are Known to be under export control by ftestorn European countries.

Soviet Trade Channels for Procurement of Electronics Supplies.,

The technical nature of many of the products listed llmita the number of possible trade channela. Recent intelligence information points to three principal channels for the movement of these materials po Eastern Europei

purchases by the Satellites and the USSR in the US, UK.Netherlands.

from Western countries via Austria to the Satellites,and Csechoslovakia.

Co Exportsatem European and Postern German sources to consumers and fabricators in the Soviet Zone of Germanyc

Other channels used, but apparently less frequently, include:

hrough Jobbers in Italy to Yugoslavia, the Satellites, and the USSR. oT Through jobbers and electrical laanufacturora in Switzerland to Czechoslovakia.

cD Through jobbers in Sweden to the USSR, Poland, and some other Satelliteso

<U Through Barcelona, Spain, to Eastern Europe.

Recent Indications of Trade In and Expansion of Soviet Orbit

Recent highlights In East-West trading activities In electronica supplies are outlined:

a^ An Italian firm purchased in theons of special capacitor paper (equalear's supplyarge manufacturer)oviet 9 Soviet inquiries for large quantities were directed to US sources through Sweden and Austria.

b. Shortages of vacuum-tube heaters, cathodes and grid wire wereat East German, Austrian, and Czechoslovak factories. OSW-Borlinoviet-doainated electronics manufacture) was set up aa principal supplier, obtaining tungsten, molybdenum, cathode nickel, and necessary chemicals from Vie stern sources.

Definite quotations for special nickel tubing (one year'e aupply) were requested in the US bySieboldienna, probably for ahipment to Eastern Europe.

do Foundry for molybdenum and tungsten metal fabrication was ordered by OSS-Berlin, through Sweden and Poland.

e. Summary of Austrian-Hungarian trade agreement0 (electronics itaoajj

Austria to supply Hungary0 of components, materials (molybdenum, tungsten, nickel tubing, meters, capacitors-moat must come from US, UK, and Netherlands sources).

Hungary to sell Austriaf finished products (tuboo, lamps, radio parte).

. Philips, Netherlands, agreed to provide the USSR5 millions of electronic products, manufacturing equipment, and technical assistance>

The UK shipped tungsten rastal to Eastern0 in October

h.ajor electronica plant was started In Czechoslovakia9 with initial materials and plant equipment allegedly coming from Western European sources,,

tubes the

u Frequent reports of materials shortages were made forn Eastwn ^rnany, Csecboslovakiarand


Although tho value of Western shipments of electronics items and production materials to Eastern European industries isarge part of total East-West trade, certain production materials and electronic devicesubstantial contribution to the Soviet war potential,. The major Eastern emphasis currently ia in obtaining essential production materials and facilitiespecial nature. The smaller part of tbe trade ia in assembled equipments. Shipments of the materials noted above permit an expanding productionin tba Soviet bloc, and existing Western export controls are not adequate in this field to prevent Soviet acquisition*

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Please make tho following correction on pageTho sentence9 beginning "The Netherlands,read:

Although Canada, Hast Germany, Japan, and Sseden are,easer extent, manufacturers of electronics equipment, tho Soviet orbit does obtain considerable electronics supplies from some of those oountrleo, particularly Host Germany,"

Original document.

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