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OPPOSITION TO ECA IN PARTICIPATING COUNTRIES
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c Chief. Naval Intelligence, for the Department of the Nary
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ORB
TABLE OF CONTENTS
SUMMARY
a UK. Scandinavian and Benelux countries, Portugal, and France, Italy, Iceland, and Korea
and Greece
Germany and Austria
UNITED KINGDOM
IRELAND
NORWAY
SWEDEN
DENMARK
SWITZERLAND .
BELGIUM
THE NETHERLANDS
LUXEMBOURG
PORTUGAL
TURKEY
FRANCE
ITALY
ICELAND
SOUTH
CHINA
GREECE
GERMANY
AUSTRIA
OPPOSITION TO ECA IN PARTICIPATING COUNTRIES SUMMARY
This study undertakes primarily to analyze the character and importance ol the organized opposition to thc work of thc foreign aid program In the countriesin it. and. where significant forces of opposition exist, to estimate theof the government concerned to contain them. Thc study also undertakes to point out other obstacles with which the administrators of the foreign aid program may have to contend.
Thc defeat of the European recovery program is admittedly an immediate and priority objective of Soviet policy in Western Europe. In pursuit of this objective the USSR is utilizing all means at its disposal short of war- propaganda, industrial strife furthered by local Communist parties and Commurust-dominated trade unions, and thc exploitation of Western European reluctance to abide by US directives on East-West trade. The machinery of thc Cominform appears to be an important means through which this program of obstruction Is being coordinated and controlled. In Greece and China, the USSR ls counting on the local Communist armed forces, currently engaged in war against the National Governments, as thc primary instrument In undermining the US aid program.
An analysis of the situation in the Individual countries receiving US aid indicates that ihey may be grouped In several broad categories with respect to the difneulties facing the US aid program:
in which Communist capabilities for obstruction are of no morenuisance value and In which such opposition as may develop will stemnational sensibilities. These countries arc the UK, the Scandinavian andcountries. Portugal, and Turkey.
in which the Communists, largely through their Influence in thchave the capability for considerable, though probably diminishing,These arc France and Italy, and,esser extent, Iceland and
e. Those in which the recognized government is actually at war with localmilitary forces. These arc China and Greece. The situations in these two countries differ widely, however. The Communist forces In China may shortly succeed in accomplishing their primary objective of bringing about the overthrow of thc Chiang Kai-shek Government, which would raise serious political, as welt as tangible, obstacles to the operation of the US aid program. In Greece the Communist guerrilla forces are nol presently able to overthrow tho National Government; they will, however, persist
he intelligence organisations of the Depailmcnla of Stair Armr Navy, and the Air Force have concurred in this report The information herein is as
that end. In their effort they have caused destruction to industry,and agriculture, seriously Impeding the US aid program. There are nothat their capability will diminish in the near future. In China andesser degree In Greece, the corruption, inefficiency, and selfish Interests of the political and business leaders likewise seriously impede the operations of the US aid program.
d. Defeated enemy countries which are subject to occupation forces and thegovernment of the victorious powers. These countries are western Germany and Austria. The situation with respect to these two countries likewise differs sharply. Western Germany has no government of Its own and Is subject only to the control of thc Western Powers, while Austriaegularly constituted government, subjectuadripartite Control Council in which the USSR Is represented. In western Germany, therefore. Communist capabilities for disruption are limited largely to the extent to which the small Communist Party can capitalize upon the legitimate economic grievances of the people: the major obstacles to the ECA In this area derive primarily from possibly Jurisdictional disputes with the military government and the divergence of Interests among the three Western Powers. In Austria, on the other hand, Soviet occupation of thc eastern part of the country gives the USSR the ability cither to prevent thc application of the aid program to the eastern zone or to divert (lie benefits flowing into the eastern zone to its own use. Within the western zones of Austria the position of the Communist Party Is so weak, both politically and In thc trade unions, that lt can offer no effective opposition.
OPPOSITION TO ECA IN PARTICIPATING COUNTRIES UNITED KINGDOM
I- General.
Organized opposition and obstruction will not seriously threaten thc work of the Economic Cooperation Administration in the United Kingdom at any time in the fore seeable future. Communists constitute the sole organized opposition. Theirare and will continue to be insufficient to achieve any obstruction beyond the nuisance level because: (a) the United Kingdom ls poUtically stable; <b> all important components of the British polity, Including the labor movement, arc ovemhelmingiy anti-Communist; and (c) the Communists will not resort to serious physical sabotage hi time of peace. Principal Communist strength Is within organized labor, at various levels of certain important trade unions. This strength is sufficient only to cause minor disruptions of the Industrial process by manipulation of local dissatisfactions with various governmental economic policies which are unpopular with, orby, the labor rank-and-file.
2. VUXMEHABILITY OF THE PROGRAM.
The British need to maximize industrial production and exports while reducine importsinimum has kept the standard of livingevel ofome of Labor's aspirationsetter life have been disappointed, and this disappointment provides the most vulnerable target for Corrununist tactics. Communists will therefore continue attempts to undermine and discredit Britain's domestic economic program To tWs end, they will exert their greatest pressure through the local branches or al higher policy levels of some few Important trade unions where their influence Iswill try to foment dissatisfaction among tho labor rank-and-file and willdisrupt the industrial process. They will encourage slow-downs and strikes and will agitate for higher wages, shorter hours, more amenities, and an increased housui-program; in short, they will work for the breakdown of every unpopular though vitally necessary measure of the government's stringent economic policy. They will probablv not, however, resort to important physical sabotage.
Communist propaganda will also continue to attack the motives of the United
withmr 7? etlon
WW. will exhort the British
worker to demand demobilization and to refuse to produce armaments. The success of this agitation and propaganda, however, is expected to be almost negligible; the pol.tical rrmtunty of British labor is proof against widely successful CommunistAs elsewhere in the UK. the Communists have been steadily losing prestige and power in their strongest quarter, the trade unions.
SECRET
3. Opposition Forces Pixsknt.
The highest estimate of current British Communist Party membership isactual strength is0hard core" ofof less than half that number,reater number of non-parly
The organization of the UKCP is along orthodox lines.Congress acts as the constituent body of the party and elects the working unit.which meets monthly. This committee includes aboutersons who iun the party and have served as its parliamentary candidates. The inner core of the Executive, which is believed to include onlyembers, meets weekly as aBureau to formulate policy. One hundred percent Moscow-controlled, the party has not proved strong enough to warrant its direct affiliation with the Cominform. but has openly endorsed the Cominform and has followed policies identical with those of that agency. Moscow direction is maintained through overt Soviet propaganda, control Ls operative through the usual Soviet and Communist agents, and through Soviet cultural and informational agencies.
Approximately three-fourths of parly members arc industrial workers; thc re-mainlng are among white-collar, professional, and Intellectual groups. There is no militant organized force The number in the underground is not known, but recently party leaders have directed members to work more underground than heretofore. The party exercises control over no substantial segment of the British press, but Isimited extent active In thc publishing and propaganda fields.
The UKCP Is politically isolated. No party members hold high-ranking positions In the Labor Government,oderate purge of Communists in "sensitive" civil service posts is under way. Two ofembers of the House of Commons arc overt partyew others are at least fellow-travelers None of this group, however, has any Influence In Parliament. The party will almost certainly continue to be permitted toegally recognized political organization.
For political purposes, the party has gained Influence in some student,cientific, and "peace" groups. The most significant recent change in the Communist approach In the UK is that advertised by the parly itself Inmore direct methods of industrial agitation and intensifying its propagandaagainst government policies affecting wages and taxation, the Malayan campaign, defense, and the Marshall Plan.
The Communists and their sympathizers constitute thc only organized opposition to the European recoveryew extreme Conservatives disapproved of the principles of the program in respect to the UK only, but their opposition is very unlikely to result in any serious obstruction. Attempts by US officials to influence Briialn's domestic policies, however, would lay the basis for more serious organized opposition to the program, particularly from the doctrinaire wing ol lhe labor Party
4 RzsisrANT Foacxs Par.tr.NT
In the unlikely event of serious disruptions by Communists and their few fellow-tiavelers. resistant forces are capable of fully maintaining order. Within the govern-
SECRET
raent, the labor movcrncnt, and the country at large, anti-Communist sentiment ispreponderant.
IRELAND
There is no organized opposition or obstruction to the work of ECA In Ireland and no likelihood of any,
The primarily agricultural Irish economy, while sensitive to such influences as world price-levels and the availability of certain imports, is not appreciably vulnerable to tangible, minority-group obstruction from within; nor are the stronglyIrish vulnerable to propaganda directed against the aims of the ERP.exists that Ireland is receiving loans rather than grants (in contrast to Northern Ireland which, as an integral part of the UK, theoretically enjoys the more generous terms of the UK-ECA combined grant and loonut thisis not exploitable against the Interests of the program. So strong would the resistant forces be that effective organized opposition and obstruction withinare inconceivable. Most powerful of the forces of resistance is the tremendously influential Church, but also significant are the army and the highly efficient police force.
NORWAY
1. GtNEJtAL.
The ECA program is unlikely to suffer obstruction in Norwayriendly Labor Government has an absolute majority in the Parliament, and because thesituation is stable. Thc Norwegian Communist5 percent of theis the only organized opposition force. Communist influence has neverorrunant factor and has declined sharply from its postwar peak because of theanti-Communist campaign and the general distaste in Norway for recent Soviet expansionist moves. The Communists can become an irritant factor, however, by causing work stoppages and possibly by perpetrating minor acts of sabotage in industries contributing to the ECA program, particularly Norsk Hydro and the fishing, whaling, and shipping industry. Even so they are unable seriously to hamper Norway's participation.
No significant changes are expected9 or in the foreseeable future which would jeopardize the ECA program. The Labor Government is practically assured of continuing in power until the national elections int that time the Labor Party may lose its absolute majority in Parliament, but it will continue to be the largest single party. The present decline of Communist strength will bein9 elections, and the Communists will lose several of theeats which they now hold In Parliament.
OF THE PROGRAM.
Norway's major contributions to the ECA program come from the nitrogenous fertilizer plants of the Norsk Hydro combine and the shipping Industry. These,are Uie points most vulnerable to anti-ECA programs. Communist infiltration in both industries, however, is minor.
An example of the obstructive tactics which might be usedecent work stoppage engineered by Communist union leaders at one of the Norsk Hydrohut-down resulted when the management refused to permit an arbitrary reduction of working hours by the union leaders. The work stoppage was declared illegal by the Labor Court, but Communist union leaders rejected the decision, and, by their obstruction, hindered production in affiliated Norsk Hydro plants.
The only organized opposition force is the Communist Party, representing less than one percent of the population. It is organized as an orthodox political partyr hasuteats in the Parliament, none in the cabinet, and is not capable of attracting sufficient voles from other parties to enact legislation unfavorable to the ECA program. The Labor Party government Is carrying on an active anti-Communist campaign, which, together with the general distaste felt in Norway for recent Soviet expansionist moves, has successfully counteracted the goodwill which the Communists enjoyedesult of their resistance activities during the German occupation.
Communist Influence in the labor movement is slight and is being effectively reduced through aggressive action by the Labor Party-dorriinated Federation of Trade Unions. In recent elections, Communists were eliminated from responsible positions in several locals of the metal trades and the seamen's unions which have formerly beenstrongholds. Strongest centers of Communist influence are presently in the Kirkenes unions, the Oslo building workers and the Bergen transport workers.
There is simmering discontent among several labor groups in Norway which is thc resultcarcity of consumer goods and of opposition to the government controls over wages. By skillfully exploiting these groups, the Communists can reducecontribution to other ECA countries and increase Norwegian import requirements
Communist influence in agrarian groups is Insignificant, and, in professional groups, is confinedew individuals. The Communist press, which faithfullythe party line, has had insignificant success in arousing public feeling against ECA.
lt has been reported that the Communists have made plans to sabotage iron ore shipments from Narvik by interfering withlea-Narvik rail line, but no evidence of carrying out these plans has been noted.
Forces Present.
Government controls have successfully prevented serious inflation and arelo forestall any major economic dislocation that might obstruct the ECATheremall percentage of Communist infiltration in the lower ranks o; the police and armed forces, but the great majority are loyal to the government. In the extremely unlikely event that the Communists should attempt active sabotage. Norwegian security forces are capable of maintaining internal order. Anti-Con'.niur.is:
support for the ECA program will Increase rather than decrease if Communistcontinues.
SWEDEN
The Communist Party represents the only organized opposition to the work of ECA. Communist influence hi labor and politics is insignificant, and Communist propaganda directed against ECA has been, and will continue to be. unsuccessful. Thc small but efficient police force, which would have the support ol the army In the eventajor difficulty, is capable of controlling any attempts at physical obstruction of thc ECA program.
or the Program.
The primary weaknesses in Sweden's economy are the lack of solid and liquid fuels and the vulnerability to acts of sabotage of thc centralized hydroelectric system, which ls thc only other source of industrial power. The USSR can cut off Sweden's largest source of solid fuel (Polish coal) which would reduce the industriallevelhort time.
Acts of sabotage on the railroad running from the Lapland Iron mines through Norway to the port of Narvik would seriously hamper export and production of ore. particularly during the winter months when the only other outlet, the port at Lulca on the Baltic. Is Icebound.
Forces Present.
The only organized opposition group is the Communist Parly, whichegal political parlyembership of4 percent of theOf this numberre considered fanntic Communists. The Communists nave neverontrolling influence in Swedish politics and their strength Is now declining. The general election of8 resultedossommunist scats in the lower chamber ol Parliament so that they now holdcats outotal. The Communists continue loeats (out) in tho Upper Chamber, which wos not affected by the election. There are noin the Cabinet.
There are no Communists in the Central Council of the Swedish Confederation of Trade Unions Whatever influence Communists have had In certain union locals is decreasing, even In the metal trades unions which had formerlyommunist stronghold.
Aside from Communists, the ECA program might encounter opposition in Sweden if the Social Democratic government fell that Sweden WSJ being forced intounder ECA which might compromise Swedish neutrality. Any appearance of
"dictation" to Sweden would likewise be strongly resisted, not only by thebut by the mass or the people. The Communist press has attempted to arouse fears that Swedish sovereignty and traditional neutrality are threatened byin ECA. This propaganda has been largely incfTcclivc, but the government,the left wing of the Social Democratic Party, and the peoplehole are extremely sensitive on the subject of Swedish neutrality
4. Resistant Forces Phesxnt.
General government controls over the economy, expected lo be augmented tothe mild inflation, make disruption of the economy highly unlikely.
The police force, while small, is considered sufficient and capable of controlling any potential disturbance The military would cooperate wilh the police if called upon.
Anti-Communist sentiment is increasingly strong, partly becauseublic awakening after the coup in Czechoslovakia and alsolanned anti-Communist campaign by the government.
DENMARK
ECA In Denmark Is unlikely to be endangered by organized obstruction or sabotage The Communist Party, the only organized opposition force,embership ofercent of the electorate While at the end7 aboutercent of organized labor was Communist, their influence has recently been substantially reduced toercent. With no reprcscntalion in the Social Democratic cabinet. Communistin politics Is negligible The small but effective police force, which is practically free from Communist Infiltration, would have the support of the army if necessary Anll-Communlsl sentiment In the country, especially In organized labor and within the government, is pronounced and is increasing.
or the Program
The primary weakness in Denmark's economy Is the total lack of solid and liquid fuel resources. Since Denmark has no appreciable stock-piles of solid fuel, thcor stoppage of Polish coal and coke imports would soon seriously reduce industrial production and transportation.
Thc effect of Communist propaganda is negligible because of the overwhelming public approval of ECA
There has been no evidence of obstruction or sabotage of ECA. Vigilance of the Danish authorities and the measures taken to forestall Communist violenceinimum the possibility of major aggressive nets against the program Moreover, the popular acclaim with which Danish participation In ERP has been accepted, coupled with the on tl-Communist sentiment prevailing throughout thewill arteterrent to any contemplated overt Communist action against the program
I
3^ret
Fokcks Pubsent.
The Communisl Party numberslthough there Is no known Communist military organization. It is estimated thatommunists possess small arms, having acquired them through membership in the Home Guard or through participation in thc resistance against the Germun occupation. Some months ago the government attempted to check this potential source of violence by requiring thcof all firearms.
The labor movement is predominantly Social Democratic; Communist membership is presentlyercent ofembers of the Confederation of Trade Unions which comprisesercent of organized labor. The Communists arealmost exclusively in Copenhagen and arc strong in Copenhagen locals of the unions of shipyard workers, blacksmiths, machinists, typographers, ships' stokers, transport and commercial carriers (particularly dock workers) and excavation and construction workers. Immediately after the Czech coup, the Confederationolicy ol Isolating known Communists and instructions were issued to Socialmembers to oppose election or re-election of Communists to key labor positions. The Confederation maintains files on Communist members and, in cooperation with the military authorities, ls attempting to keep Communists in the labor movement under surveillance. These measures have effectively reduced Communist influence.
There are few Communists in influential government posts and the presenthas been lessening this Influence. In thc last general election inhe Communist Party lostercent of its previous votes, and its parliamentary representation is now one seat (outn the Upper Chambereats (out) Inwer Chamber.
1ST ANT FOBCKS PlUSKKT.
Denmark's economy is relatively stable, with agricultural and industrialapproaching prewar levels and with virtually no unemployment Government controls have effectively counteracted inflation and have brought about aof Denmark's major export
The Danish police force Is well organized, intelligent, and highly respected. The loyalty of the majority of the police Is beyond question;ery small degree of Communist infiltration (lessercent) has been accomplished. There is some Communist infiltration in the lower ranks of the army and thc Home Guard, but the great majority is loyal to the government and would support the police in case of major civil disturbances
SWITZERLAND
1. General.
Switzerland is not receiving aid from the ECA program, although itember of the OEEC. Despite thc strong ideological sympathies of thc Swiss with the West
SEflRET
and their aversion to Communism, andecognition of Swiss dependence upon economic recovery in Westernajority of the Swiss have strong reservations on wholehearted participation in thc ECA program. Many business, labor, and other groups feel that participation in OEEC conflicts with Switzerland's traditionalAll groups are strongly opposed to any suggestion of interference In the Swiss economy.
Business interests are actively promoting trade with Eastern Europe and feel that, aside from the monetary gain, the exceptional importance of foreign trade toeconomy requires wide diversion of business interestsrecautionaryThere will, therefore, be considerable resistance to OEEC efforts to prevent the flow of vital goods to Eastern Europe. The danger of becoming too closely involved with unstable Western Europe economies is frequently expressed.
Although thc Communist Party Is attempting to capitalize on the reservations of thc majority of the Swiss in regard to ERP, Its influenceery minor factor. The party has0 members,nUitanls. It controlsfeats in the National Council, and has no representation In thc government offices. Its control in organized labor is negligible, and its influence in agrarian groups, the police, and the army is nil. It may be concluded that, apart from the reluctances noted above, there will be no serious opposition to the ECA program in Switzerland, and no subversive obstruction whatsoever.
BELGIUM
In Belgium the potential organized opposition to the work of ECA is negligible. The Communist Party is numerically and financially weak and is mediocre In leadership It does not enjoy lhe support of key labor groups, nor can it mobilize any Important opinion in its favor. Though it can probably foment some strikes and disturbances, these should be no more than would be expected in any country undergoing postwar economic dislocations.
All important groups in and out of the government support ERP. Police and armed forces are loyal and arc quite capable of controlling situations detrimental to ECA.
op Program.
Communist propaganda hasimited appeal despite high prices andunemployment. The same can be said for strike agitation. If unemployment continuesigh rate, however, the effectiveness of Communist propaganda,out the ECA as the cause of unemployment, may be expected to increase. Steel, coal, and transportation industries and the port of Antwerp will be primary targets because of their importance to the Belgian economy. The lack of popular support, however, will prevent thc Communists from causing widespread disorder. No change in governmental and popular support of ERP is foreseen.
Forces Present.
Thc leadership of the Communist Parly ls mediocre and funds are extremely abort The party Isember of the Cominform; directions are usually received from the French Communists or through occasional personal visits of Communist leaders to Eastern Europe. The Belgian party members are concentrated in industrial and urban areas, especially Brussels and the French-speaking industrial areas around Liege and Charleroi It Is estimated that the party0 members of0 areThere are two Communist newspapers, Drapeau Rouge (circulationnd DeRoodt
All other parties refuse to cooperate with the Communists and deny them cabinet or important government posts. The Communist Party hasuteals in the Lower Chamber anduteats in the Senate.
About ten percent of organized labor is Communist-controlled. This Includes0 members affiliated with FOTB (Socialist-Communist Trade Unionommunist control is evident principally in public servicend clothing and metal industries. Communist influence in other groups ls negligible with the exception of some influence in university circles, especially the University of Brussels. Because of its weakness, thc Communist Party may attempt to reorganize itselfmaller, compact unit, with emphasis on action committees and clandestine activities. This would not substantially increase its effectiveness.
There is little non-Communtal opposition to the program.
Forces Present.
The postwar policy of relaxation of economic controls has left the government with little power to regulate the economy, and prevent such unfavorable factors as rising prices and unemployment upon which thc Communists can capitalize.of extensive controls would meet with considerable resistance, and enforcement would be very difficult
The national gendarmerie consists0 members The organization is under the control ot the Minister of National Defense for its administration, and the Ministers of Justice nnd Interior for Its operations The local police force is under theof thc Communes. Communist penetration Into the police forces is negligible, and the ability of the police to control any situation Is unquestioned.
There0 troops in Belgiumir force personnel. The armed forces are loyal and capable of substantially aiding the police in maintaining internal order and keeping communications channels open
The anti-Communist sentiment in thc country is strongrowing even stronger The support of the Communist labor unions is based largely on economic benefits derived from membership, and does not represent support for thc Communist program.
s
THE NETHERLANDS
ECA aid lo the Netherlands will meet with little obstruction The need is clearly recognized by the Dutch; opposition forces axe negligible, and the Internal economy is stable.
Or Tin Program.
Although the economy of thc Netherlands has numerous weak points, such as lis unfavorable balance of foreign trade, the financial drain caused by unsettledin Indonesia, and the insufficiency of Dutch Industrial development to support the growing population, the Communist Party is notosition to exploit these weaknesses. Furthermore, the government has extensive economic controls with which to holdinimum those economic dislocations by which thc Communists might otherwise profit. Communist propaganda against the ECA programery limited popular appeal in the Netherlands. General support for the program by the Government and by non Communist elements is expected to continue.
position Forces Present.
The Communistsercent of the total votes In the8 elections There are0 party members;0 of these are dependable militants Their greatest strength is in industrial and urban areas, particularly Amsterdam Party leadership is mediocre. The Communists have no control of any press organs with the exception of De Wacrhetd)ew minor publications The Dutch CP isember of the Cominlorm; orders are received from Paris or CP leaders who have visited Eastern Europe
The Communists hold no cabinet or key government posts and all other parties refuse to cooperate with them. In the legislature the Communistsutcats in the Secondut ofeats in thc First Chamber. Communists are excluded from the Foreign Affairs Committee in the Secondill was recenlly passed permitting dismissal of Communists from municipal and provincial legislatures.
The Influence of the CP in labor unions Is limited. Thc Communist-controlled union (EVC)embership. but probably has onlyrercent of organised labor Its efforts to instigate political strikes have been decidedly unsuccessful The main concentration of CP strength Is In the building metal, and transport Industries
4. Resistant Forces Present
Extensive and effective government controls in most areas of the economyeconomic dislocation on which the Communist* could capitalize. The policy of the present government callsradual relaxation of economic controls in imple-
menting the Benelux Customs Union. Thc municipal police force0 is under control of the Minister of Interior; the state police forces under the Minister of Justice. During the wave of anti-Communist sentiment following the Czech coup, measures were initiated to double municipal police force with volunteers andolunteer reserve0 for the state police. Volunteer battalions are also being formed in the universities. The police are efficient, loyal, and strongly anti-Communist
In Holland, while there are only0 troops, mostly administrative, they include small operational elements which together with thc police force are adequate to maintain order, minimize sabotage, and keep communications open. Communist penetration is negligible and the morale is good.
In the country at large and within the government theretrong and determined hostility toward Communists, intensified by lhe Czech coup. This anti-Communist sentiment has resultedarked decline in Communist strength during thc last year and has ledumber of government measures to neutralize the Influence of the Communist Party. With the exception of thc Communist-controlled EVC uniort. organized labor is strongly opposed to Communism, and the EVC itself doubtlessood part of its support from considerations other than ideological sympathy with the Communist cause
LUXEMBOURG
The report on Belgium applies generally to Luxembourg. The opposition forces arc perhaps even weaker In Luxembourg than they are in Belgium. Somehas been expressed over the share of Belgian-Luxembourg ECA aid allotted to Luxembourg, and might make Itself felt In the form of political pressure.
Forces Present.
Theremall Communist Party composeducleusommunistsemainder of malcontents, whose support has greatly declined. The Communist Partyf thecats In tho Chamber of Deputies, but is not included In the government and controls no government posts Its influence on labor, agrarian, and other groups Is very small.
Forces Present.
The police force and gendarmerie. These, with the aid of an armyroops are fully capable of maintaining order.
PORTUGAL
1. General.
The ECA program foronfined to general assistance in facilitating the sale of Portuguese products to other participating countries and In obtaining allo-
BBERBT
81
cations of scarce essential, coinmodllles. machinery, and equipment needed to carry on an industrialization plan Because of the continuing unfavorable balance ln foreign trade, Portgual has requested direct ECA financial aidortugal islosely controlled dictatorship. So long as Salazar or any other government placed in power by the army retains control, there will be no significant opposition to ECA.
2. VULNERABIUTY Ot PBOGKAM.
Industrially the factor of greatest vulnerability is the limited scope and capacity of Portuguese manufacturing, which materially restrict Portugal's contribution to European rehabilitation. Even slight interruptions to production would therefore have considerable eflect. Since industry Is more or less concentrated near the two principal seaports, Internal transport problems are not of major Importance. Implementation of the program could be hinderedlowdown among stevedores and other dock and warehouse labor, but effective interference in this way is most unlikely as Portuguese law forbids strikes, lockouts, and slowdowns. Efforts lo interfere with the economy by these means have In the past been put down ruthlessly and summarily by the Govern- -ment. labor is organized into syndical corporations, which are an integral part of the governmental structure. Activities are directed through the governmentaland laborody has no influence.
Government offices important ln the administration of thc program are staffed by employees generally loyal to tho regime,ontinuous effort Is made to weed out political dissidents, particularly Communists or sympathizers. Underpaid Portuguese civil servants, however, are highly susceptible to bribery. Trie import-export program is administered by one council, vulnerable to pressure through bribery of employees.
As long as the government supports ECA, there will be no adverse propaganda or political pressure. All media of expression are subject to government censorship, and all political activity is illegal except for that of tho government-sponsored party.Ls unlikely; few, If any, Portuguese are versed In thc technique or have the means to carry It out
Forces Present.
The Communist Party ls outlawed In Portugal. It is estimated that membership may total. Control from Moscow probably channels through Communist centers in France, but it is believed that little attention Is given by the USSK to the problems of Portuguese Communists. The Portuguese party organization apparenlly rcccives no financial support from Moscow. Tlic party has no underground forces organized for direct action. It has little economic Influence. In the event of adeterioration of the economy which would further depress the low livingof the Portuguese masses, the Communist Party could probably extend itsto provoke minor Internal disorders.
Forces Pbbsbnt.
All phases of the economy arc closely controlled by theituation inherent in the corporative structure of the Portuguese Slate.
addition to the tegular police forces, thereery efficient secret policeuasi-military Republican Guard. Police forces are adequate to control domestic disturbances as long as the army remains loyal to the regime Thc armed forces will support the regime untilime as it may appear to them that governmentpolicies are detrimental to the country in general.
The people and thc government are strongly anti-Communistesult of years of official propaganda, and because of the strong influence of the Roman Catholic Church.
TURKEY
There is no organized opposition to the work of ECA in Turkey, and no dangerous obstruction is likely tomall section of the political opposition and of the-opposition press, which are generally Interested more in opposing the government than in frustrating ECA, have to some extent echoed Soviet propaganda to the effect that Turkey is surrendering its sovereignty andere vassal of the US. Such allegations, which are likely to continue, are denied by the government, and arc not accepted as true by either government or people.
Sabotage iserious factor menacing the success of ECA programs In Turkey. The overwhelming majority of the Turkish people are strongly anti-Communistariety of reasons, whichtrong sense of nationalism and devotion to the present republican form of government, as wellrofound mistrust of their powerful neighbor and traditional enemy. Furthermore, not only does the law greatlylhe freedom of subversive organizations of any kind; but in addition, the efficient police, and security organizations generally, maintain very thorough control.
Weaknesses in the Turkish economy, which is controlled by the state and In which most large enterprises are state-owned, might postpone or lessen Turkey'slo European recovery. Shortcomings in Turkey's economic structuren industry, agriculture, mining, and transport and communications) are currently being overcome. How soon and how effectively success will be reached in such efforts depends largely upon the effectiveness with which current rehabilitation and recovery programs are applied, with the aid of US and other sources of financial support,ECA itself.
of Program,
There are definite weaknesses in the economic structure, but because of resistant forces outlined below, these do not constitute dangerous points of possible tangible obstruction or for thc application of sabotageerious scale. One of the most serious economic weaknesses Is the inelasticity of the economyhole. The Turk-ish economy is ttalisl, or largely state-owned and controlled, and therefore tends to develop and maintain costly and uneconomic ventures for strategic, military, or other
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reasons. Thus the structure Is top-heavy, with highly modern Industries superimposedenerally primitive and primarily agricultural economy, with insufficientlight industry. Other weaknesses are inadequate transportation and means of storage for perishable crops, and. to some extent, the concentration of power and wealth in the handsomparatively small percentage of the population. To this must be added the economic dislocation resulting from thc high cost of maintaining large forces under arms in the face of threatened foreign aggression.
The weaknesses In the economy are particularly evident in Industry,and communications. Strenuous efforts are now being made, with US aid, to remedy those shortcomings. There is very little danger of wide-scale obstruction to US aid, whether military or economic, because of the wholehearted support of the aid programs by both government and people. Similarly, the danger of serious sabotage may be disregarded. Turkey's contribution to the recovery of Western Europe will depend largely upon the success of rehabilitation and development programs in Turkey with the aid of various US and other agencies, including ECA itself.
The government in recent years has sponsored labor legislation designed toworking conditions. Labor groups have been formed but continue to be under very strict government control. The right to strike, for example, is denied Turkish labor groups. Occasionally, small labor "syndicates" are formed In urban, industrial, and mining areas, and these Include communislically inclined individuals. They have little strength, however, and are very carefully observed and controlled by the police and security services. No strong anti-government labor group has ever existed in the Turkish Republic The danger of obstruction to ECA programs from labor groups, therefore, is very small indeed.
The Turks are not susceptible to propaganda emanating from thc USSR or its satellites. With In Turkey, membersewly formed anti-government political groupection of thc opposition press has expressed alarm concerning the US-Turklsh ECA agreement, and have even echoed Soviet propaganda to thc eflect that an infringement of Turkish sovereignty is involved. Such allegations, which aredueisunderstanding of the agreement, arc denied by responsibleofficials, and arc noi accepted as true by the overwhelming majority of the people.
Because the Turks are not susceptible to Soviet propaganda, governmentare most unlikely to become targets for obstruction and sabotage lo thc extent of dangerously Impeding the ECA program. Such sabotage as may occur, however, is likely to be directed at government-owned and operated enterprises in, for example, industry, mining, transport and communications. Among these are the Zonguldnk coal mines, the Guleinan chrornite mines, and the Erganimadcn copper mines all administered by theumber of industries operated by the Sumcrbank. such as the Kayseri textile mills, could also be targets for sabotage, as could the railroads and merchant marine, under direct control of the Ministry of Communications.
Obstruction has been limited principally to members of the above-mentioned antt-government group andmall section of the opposition press, both of which are interested more in opposing the government than in obstructing ECA Further ob-
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struclion may be expected from both sources, but it is unlikely to be any morethan hitherto. There was some dissatisfaction8 in Turkey because arrangements were apparently not being made under ECA auspices for the restoration of Turkey's lost prewar tobacco export trade with Germany. This situation has now been alleviatedecision which will start Turkish tobacco moving toward western Germany. Interruption of that flow at some future date would, of course, revive the expression of discontent, accompanied by reiterated charges that US growers were being favored at the expense of Turkey. Infrequent attempted acts of sabotage arc possible, but are highly unlikely to have seriously damaging effects upon thc program.
Forces Presknt.
There is no Communist Party in Turkey, and the few subversive elements which do exist arc subjected to rigid laws and speedy punishment. The government and Its law-enforcing agencies are in more than adequate control. There are no uon-Com-munist forces of opposition to ECA of sufficient strength inside Turkey or withdetermination even to attempt sabotage of ECA programs.
Forces Present.
There are three "pollco" organizations. The uniformed police are under control of the Ministry of Interior, usually through municipal authorities. Their duties (which have recently been subjected to re-deflnltlon) are generally confined to urban areas. In those areas not under supervision of the police, the Gendarmerie Is responsible for public order and security. The gendarmerie is paid, uniformed, armed, trained, and supplied by the military organizations, but ls responsible lo the Ministry of the Interior for any duties assigned to it concerning public order and security. Theol Security, responsible directly to the Prime Minister. Is charged with thc customary duties of secret police. Including surveillance over subversiveand Individuals. It works In close cooperation with all other security organizations and the Turkish General Staff The threeorganizations ore in effective control over public order and security.
Large armed forces are maintained In face of threatened Soviet pressure. These arc currently in process of re-equipment and modernization under the US aid program Both morale and prestigo are high, probably more so than present capabilities of the armed forces warrant In the highly unlikely possibility that their services might be needed to augment the existing law-enforcement bodies in maintaining internal order, they would be entirely capable of doing so. Their loyalty to the present republican regime, like that of thc general public, is unquestioned. Exceptadre of regulars in each of the three military services, as well as thc gendarmerie, the armed services consist of conscripts. In peace or in war.
umber of reasons, anti-Communist sentiment in Turkey is very strongCommunism, for example, is inseparably associated with the USSR, and every Turk knows how long Tsarist Russia wanted to subjugate the Ottoman Empire and control the Straits, and how often he or his ancestors had to fight to protect Turkish
territory. Thus there Is an almost innate mistrust of anything emanating from the USSR. Recent Soviet demands for special rights in the Straits and for the acquisition of Turkish territory have accentuated this mistrust. Furthermore, the Turk isconservative and nationalistic, and he is sincerely devoted to the republican regime founded by his great idol, the late Mustafa Kamal Ataturk. The Turks are. in addition, Moslems (though many of them are less devout than Moslemsnd Islamic beliefs are only with great difficulty reconciled with Marxist dogma. The strong popular azitl-Coirimurust sentiment is fully reflected In the government, and prevails for similar reasons.
There is no labor "movement" in Turkey, other than the slow advance being made by the government in drawing up and applying progressive labor legislation in acalculated to avoid relaxation of thc present stringent controls. Anti-Communist sentiment ln thc laboring classes is very strong, as it is throughout all classes, although most of the few Communists in Turkey, other than those engaged in academic pursuits, arc found in mines and factories. They are easily detected and observed, it not by planted security agents, then by their fellow workers, who consideratriotic duty to denounce Communists and any other subversive Individual of that character.to organize "classes" or to incite one class against another, are illegal in Turkey, and thc regulations are strictly enforced. It is likewise illegal lo form politicalwith foreign affiliations. In short, the labor "movements" arc effectivelyin Turkey. Subversive movements are even more thoroughly checked.
FRANCE
Because Franceey to the economic recovery and the military defense of Western Europe, the USSR considers it the natural theater for an effective assault on the European recovery program. Under the circumstances, the substantial strength of Communist forces in France renders ECA operations in that country signallylo organized opposition and obstruction. Until such time as militantwill have been defeated In France, this vulnerability will persist.
ov tue Program.
Any blow at the flow of supplies in France promptly increases the inflationary pressures which have sapped French financial health since Liberation, and thusafresh an economy which has never consolidated ils recovery.
The Communist-controlled CGT (General Confederation of Labor) is dominant among underground miners, metal workers, laborers in the building trades, and is also strong among dockworkers. Thus, thc Communist forces have ampleto deliver damaging blows to production and imports through strikes andThe power to engage In major physical sabotage is patent but has not been exercised on any large scaleatter of policy
Since Lhe inception ol the Marshall Plan in thc summerommunist lorces have incited the great strikes of7 and8iew to crippling French production and reducing French supplies. Thc preferred strike technique of Communist forces in France appears toajorin Lhe vital coal industry combined with rotating and relatively short-lived strikes in olher key industries. By short-term strikes, though thc economy is damaged, there is no excessive loss of pay to workers nor such widespread resentment on thc part of the general public as there Is lo nation-wide generalized strikes.
Itonsistent Communist course to capitalize on legitimate worker grievances and use strikes initialed in the interest of higher wages or better working conditions for avowed political ends. By the ensuing damage to the economy, Communist forces hope they will discourage Die US from supplying further assistance and persuade the US that In case of war France would noteliable ally. Thc US Is to be induced toopeless Franco to its own fate and thereby allow thc Kremlin to take charge.
3. Or position Forces
At thc time of the electionshe CP reportedly comprisedarty members, withrench men and women voting the Communist ticket. Communist voters polledercent of the national vole and thereby controlled the biggest single bloc of voles in the Assembly. At present, however, CP membership is estimated at. As elsewhere, thc hard Communist core owesobedience to theilitant pressara-military underground organization are at the party's disposal Although the Communist Party has not participated In French Cabinets sinceepresentallon In earliergovernments allowed considerable Infiltration Into government at the level of agencies and bureaus However, continuing elimination of this infiltration has been in progress since the departure of the Communists from the government Currently the political goal of the French Communist Party is to re-enter the Frenchto allow the party more effectively to sabotage European recovery or alternately to force De Gaulle's return lo power, preferably illegally. In Lhe beller that De Gaulle wouldore vulnerable enemy than Ihe present "Third Force."
The Communist Party exercises significant influenceumber of strategic labor groups. The great strike ofowever, resultedplit in the French Trade Union movement. The non-Communkst FO (Worker's Force) and Christian Unions have since vied with the Communist CGT for control of labor. The increasingly unfavorable wage-price ratio has forced non-Communist unions on occasion lo ally themselves with the CGT by presenting similar wage demands and engaging in simultaneous strikes, but refraining from "strong arm" tactics. The Communist Party engagesemagogic appeal lo the pcasanti. suggesting moderate land redistribution, short however of collectivization and prescribing high prices for farm crops At the same time, the Communist Party callseduction in the cost of living when addressing factory workers in the cities The grip of the Communists on French peasant groups, however, remains insecure and it is onworkers' groups that the Communlsl Party must rely in lhe last resort
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Through propaganda appeals to non-Communist elements in France, Communist forces have mustered and may perhaps continue to muster direct and indirectto US assistance. Suspicion of the US lsommunist monopoly in France. Many Frenchmen are opposed to the reconstruction without proper safeguardsowerful German Industry and to the elimination of further substantial reparations. Many Frenchmen also are unprepared to play the roleawn expendablear and are unhappy at the thought of Franceloody battlefield in the struggle between the US and the USSR. The suspicion is fairly widespread that the ECA Is intended to create markets for surplus US goods. Communist forces will continue to capitalize on these French suspicions and misgivings through skillful propaganda and thereby they may attract as temporary allies sizable groups of non-Communistwho will view US aid dubiously.
4, Resistant Forces.
Thc French Armed Forces are generally loyal to the regime, and Communistshas been rendered largely hieffective. Communists have been purged from key positions in the officer corps, and while there are numerous sympathizers in the rank and file, they are apparently not organized and do noterious menace. The gendarmerie0 Is thoroughly reliable and has repeatedly demonstrated Its efficiency in suppressing Communist-led riots, aided where necessary by army elements. At this time. Communist forces seem bentoderate studied sabotage of thceconomy designed primarily to destroy the benefits of ECA and thus wear out US patience. In its battle with the enemies of the US aid program the Third Force must rely chiefly on the basic anti-Communism of the French population. At some later date, particularly when and if De Gaulle comes lo power, the Communist line may harden,ew attempt be made to sabotage French economy.
ITALY
1. General.
The almost complete dependence of Italy on industrial raw materials, the partial dependence on foodstuffs from abroad, and the high level of unemployment would make obstruction of the ERP particularly damaging to the Italian economy. Because certain basic reorganizations of the domestic economy are prerequisite lo the success of the ERP in Italy, thwarting these will amount to obstructing the ERP itself. Direct interference with the working of ERP Is to be expected. Such direct obstructionist activities, on an organized basis, will originate chiefly with the Communists. The firmness and reliability of the Ministry of Interior's forces will permit thc government to act with vigor when necessary to restrain the more violent eflorts. The Army is organized and deployed primarily as an Internal security force and can again, as it has in the past, effectively support the Caraoinieri in this task Despite the largeParty enrollment, the great majority of Italians are anti-Communist.
2. Vulnerability or the Program.
Because the CommunisUlonuiiated General Confederation of Labor (CGIL) still controls the great majority of industrial workers, the Communists areosition to provoke strikes or slowdowns which reduce ERP's industrial and foreign tradeto Italy, The Communist workers either represent the majority or hold the key positions in the unions In the sensitive fields of domestic transportation andThere ls no prospect of any major change in Communist influence in these fields. Italian shipping, however, remains free of Communist control and is not likely, therefore, to be sensitive to efforts at anti-ERP obstruction.
The present Italian Cabinet includes no Communists or philo-CommunistConsequently, no positive anti-ERP policy suggestions by the Cabinet need be feared. In thc Parliament,eft Socialist criticism and discussion can delay the approval of government proposals regarding ERP and of other important legislation. The absolute majority enjoyed by tho Christian Democrats in theand their near majority In thc Senate, however, assures thc ultimate approval of most Cabinet proposals. (Only the presentation of extremist legislation ls likely to split the requisite block of pro-government votes, now, or duringear life of the present Parliament.)
Class and regional differences can easily be exploited to slow up economicunder the ERP. The fact that the ERP program will have little effect on thc standard of living of the majority of workers for atear wUIensitive point. The necessity of dismissing excess industrial workers and of ultimately closing down certain uneconomical plants will drive some workers into thc arms of anti-ERPMoreover, the owners of uneconomical industrial plants will. In someseek subterfuges that will permit their sharing in ERP help. The lack of agreement, even among the well-intentioned, about the most appropriate distribution of ERP benefits between northern industry and southern agriculture will continue to divide Italy's efforts lo achieve the aims of ERP.
When the European recovery program was first proposed, the Communists and their allies sought to block Italian participation in lhe plan, especially because, not being in thc government, they would not share with the Christian Democrats theaccruing from the success of the program. Gradually, the opposition has shiftedodified public acceptance of the ERP program accompanied by accusations that the US. through the ERP, dominates Italian poliUcal and economic life. Being unable to interfere in any important way with the delivery of ERP raw materials andthe Communists have sought to interfere, wherever possible, with the fullof ERP and by opposing government economic legislation and by indiscriminately encouraging labor demands and promoting work stoppages. For example, thesupport the poorly paid civil servants In their demands for improved wages In the hope that the great increase In government expenditures willewcycle with the attendant setback to the ERP goals.
It can be expected that the Communisls will continue to provoke labor unrestto interfere directly or Indirectly with Italian economic recovery. They will
avoid direct interference with the distribution of foodstuffs out of fear ol alienating considerable groups of workers and in the belief that industrial obstructions alone would suffice. The possibilities of success in these efforts have been reduced by the weakening Communist hold on labor and the presence in the government economic ministries of respected Socialist leaders. Alert recognition by thc government of the most pressing and reasonable complaints of the workers and. within its financialquick remedial action, could forestall thc chief weapon of Communist anli-ERP propaganda and activity.
3. Offosition to ECA.
The Italian Communist Party polled some eight millionercent) in thc national elections last spring, has an estimated membership of some one and one-half million (itnd ia excellently organized. The party is strongest in north Italy, and its militarized organization, the Apparato (membership, hns training centers along thc principal northern communications routes. The parly press, with newsprint and paper subsidized by Moscow, is extensive, and is made more powerful by the Communist control of thc printer's union. Through apact" the Communist Party is linked closely with the Italian Socialist Party, the left branch of Italian socialism; and together these groups, which raningle ticket as the Popular Democratic Front In the last national elections, control aboutercent of the seats In the Senate and aboutercent in the Chamber of Deputies.
Out of someillion employed, the Communists through thc CGIL controlorkers now that thc Christian Democrats have withdrawn to form the Free Italian General Confederation of Workerst is anticipated that, in thc period prior tohe Communist leaders will attempt to convert the party member ship to more militant Marxismore aggressive leader may be substituted for the conciliatory TogliatU) and will intensify their strikes and propaganda. If economic conditions In Italy have not improved appreciably by the fallhe Communists will seek to force their participation In thc formulation of governmental economic policy.
To attain the fullest advantage of ERP aid, the Italian Government will be obliged to introduce certain basic economic and social reforms. Some of these will arouse the opposition of interest groups, such as landowners and industrialists (especially those who own uneconomicalecause of real or fancied personal losses involved in the reforms. In some instances, the conservative forces of opposition will seek to elicit thc sympathy of the Vatican and Its cooperation in seeking to restrain thc government's efforts In the field of reform legislation
FOHCES PSESXNT.
The national police0 strong and controlledfrom Rome, are organized into legions, mainly deployed in north Italy, with several mobile units. They are assisted by0 Public Security Guards in towns and villages and by0 Finance (frontier) Guards (although thereery limited
Communist infiltration among thche army,roops. is also concentrated in the North, and could be given limited assistance by0 naval forces- The air force,0 men, operates poorly equipped and obsolescent planes.
Antl-Comniunist sentiment is vigoroushiefly agricultural country ofwho are strongly influenced by the anti-Communist teaching of thc Catholic Church. Currently thc Vatican is pursuing an increasingly militant anU-Coirnnurust campaign through the medium of Catholicay organization devoted toVatican policy, and through the LCGIL, recently formed non-Communist labor organization. Furthermore, within the CGIL the moderate-Left remains aminority, anxious to break Communist domination over labor by modifying CGIL directives, or failing that, by quitting the Labor Confederation. The Left Socialists, although they work closely with the Communists on most issues, have followed an Independent course of non-opposition regarding support of the ERP. Such nco-Fascist groups as the Italian Social Movement, represented in Pariamentenator and six Deputies, are violently anti-Communist, although the capabilities of their forces are currently very slight.
ICELAND
Thc ECA program is not likely to be obstructed by organized opposition in Iceland because such obstruction would too seriously interfere with the Icelanders' livelihood. Iceland's contribution to ECA is limited to Uie sale of products from its fishingand any reduction would resultorresponding decrease In the activities which constitute approximatelyercent of Iceland's foreign-exchange earning power. The Communists dominated the Federation of Trade Unions prior to the8 trade union election and still control Iceland's largest single union, and havetheir power totrike in the fishing industry. During their most recent attempt, however, the fishermen gradually drifted back to work when the herring run started and thereby forced the leaders tourried and unsatisfactorysettlement. This unsuccessful attempt to maintain strike discipline has made thc Communist leaders hesitant to Jeopardize their Influence further.
Iceland's acute foreign exchange shortage wouldapid reduction inimports if the fishing industry became inactiveesulttrike or other causes. The consequent shortage of daily necessities, coupled with the fishermen's urge to fish as soon as the herring start to run (because the duration or the run is so unpredictable) make It unlikely that thc Communists could maintain strike discipline lor long.
of Program.
Obstruction to the program would be most damaging it aimed at the fishingover which the Communists exercise substantial control, or the dock and transport
workers which lhe Communists dominate. Work stoppages In one or the other activity could effectively eliminate Iceland's contribution and create subsequent increased demands for ECA aid to provide Iceland with imports without which the population could barely exist
3. Opposition* Kohcrs Present.
The principal organized opposition to the ECA program is the Communistan orthodox political party holding ten of thceats in parliament but having no representation in the present cabinet. There Is, in addition, an opposition Inherent in the character of the average Icelander, who Is extremely nationalist and isolationist and who resents any foreign activity which runs contrary to those views. Iceland's official attitude toward ECA originally was one of Indifference coupledeeling that it was good for Europe but of little significance to Iceland. The Communist press faithfully and vigorously attacked the program while the government did little to counteract thc unfavorable and unrealistic impression thus created.
Communist Influence in the fishing Industry was demonstrated by the Communist-engineered striketrike discipline was not maintained, however, and acompromise had to be accepted when the fishermen gradually drifted back to their work. Thc Communists completely dominate the dock and transport workers in Reykjavik and could thereby restrict much of the export shipping and prevent the unloading of almost all of Iceland's imports. Since, however, such stoppage would generally paralyze Iceland's economyhort time it is doubtful if strike discipline could be maintained for long.
4 Resistant Foacxs Piusent.
The present coalition government adopted an anti-Communist platformasis for cooperation and has opposed Communist attempts to disrupt US-Icelandic relations The anil -Communist press belatedly stepped up Its efforts to Inform lis readers aboul the ECA program, and when the government decided to seek ECA aid, the official attitude finally crystallized in favor of active participation in the ECA program.acute foreign exchange shortage has forced the government lo request ECA assistance, so with rigid control of foreign-trade licenses and the present subsidythe government should be able toerious economic crisis until the beneficial effects of RCA aid have time lotabilizing influence.
SOUTH KOREA
General.
In any consideration of the US aid program for the Republic of Korea itemphasized that the USSR firmly controls the territory north ofhopes for eventua, control of the entire country. At present how! er bears on the problem only to the extent thaterves as ain thc southern zone and to the extent that barter trade
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provide critical supplies of power and raw materials lo the Republic. The American aid program would be completely upset by an armed invasion by North Korean troops, or by thc formationommunist-controlled "coalition" government. "Coalition" will not be accepted by South Korean leaders If they receive US economic and military aid; but North Korean troops may attack after US troops are withdrawn.
of the Program.
There arc several vulnerable points in the South Korean economy. Theof the economic controls instituted by American Military Governmentolitically and economically disastrous Increase in the present inflation.collection, rationing, and price control of rice by the government, at leasts necessary toomplete economic collapse. In addition to the basic shortage of food, low levels of production of consumer goods and exports are root causes of inflation requiring continued economic controls. The government's failure toalanced budget, collect taxes,roper central bank, or limit thc issuance of currency would aggravate the inflationary pressures. Any of these points might be exploited for the defeat of the aid program.
The economic structure is also vulnerable In that practically all manufacturing and mining operations arc dependent on limited and easily sabotaged electric power and rail transport. To overcome serious production bottlenecks. South Korea roust develop power plants to fill normal needs formerly supplied by the north, increase the Import of bituminous coal, raw materials, and factory equipment; and furtherLhe rail transport system.
Even assuming that power and raw materials arc made available, the lack of skilled administrators on all government levels, and the lack of expert technicians, willthe execution of government controls and industrial rehabilitation.
Except in the eventomplete economic collapse and disintegration of theauthority, it is very improbable that widespread strikes will occur to disrupt the aid program. The only effective organized labor group in South Korea isby businessmen and the police. It is strongly anli-Communist in policy and action. Communisl attempts Lo organize lhe small number of Industrial laborers has not been successful,ommunist-con trolled unionewin key industries.
Forces Present.
Overt obstruction and sabotage will emanate from two groups. The first consists of rightist political elements that support both the Republic and the aid program but consider essential economic controls detrimental to their personal profits. They have worked with some success in the legislature, in the executive, and in local areas lo abolish or subvert such controls. Their efforts will be more successful as theloses its backbone of American supervision and control.
The second group, the Communists, will direct their efforts al creating andlate of political and economic disorder until such time as Moscow feels
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it expedient to attempt the merger of the South with their puppet Democratic Peoples Republic of Korea.
The future strength of Communist opposition in South Korea depends primarily on the administration and policies of the government. If the government Insures adequate food distribution, continued land reform, and effective police service, the Communists will be unable to develop either popular support or large underground forces. At present, the Communists exercise little Influence In South Korea. Their efforts will depend primarily on propaganda, underground guerrilla forces, and sabotage. There arearty members distributed throughout the South withof underground units ln several mountain areas. Control ls exercised from Moscow via Soviet and Korean organisations in the northern zone. The underground forces are receiving limited supplies of arms and equipment from the north, and their leaders are being trained In guerrilla and sabotage techniques by the Russians For the present, the underground units and the front organizations lack sufficientequipment, and peasant support to disrupt the economy of South Korea seriously. Communist front organizations are isolated from moderate and rightist political parties, and known party line adherents arc absent from all sections of the governmeni.have been unsuccessful in controlling labor unions, and iheir influence on agrarian groups is restricted to local areas, principally in Cholla Pukto, Cholla Namdo, and Kyongsong Pukto. Their major efforts68 to paralyze South Korea by coordinated general strikes, sabotage, and terrorism were failures and resulted in considerable loss of strength and sympathy.
4 Resistant Forces Present.
Within Its limited administrative ability, the Republic of Korea will do its best to insure the success of the US aid program. No change in government leadership is possible, short of Communist control through invasion or "federation" with the north, that would alter thc basic desire to expedite Lhe aid program, but the problem of ineptness and corruption on all government levels remains.
The policeoyal instrument of the government With the use of Asiatic police methods plus adopted American techniques, they have been effective inorder, breaking strikes, and reslricling Communist activity. The armed forces, consisting of the Constabulary and the Coast Guard, require additional training and the screening of Infiltrated Communists The US Army is assisting in this program, and the armed forces should be capable of maintaining Internal security after the withdrawal of major US Army units. The South Koreans might not. however, be able to copeoncerted Communist instigated insurrection using guerrilla methods and receiving supplies and other aid from North Korea.
Communism does not exercise mass appeal ln Korea. Anti-Communist sentiment is especially strong among the police and leading government officials The peasantry is generally susceptible to propaganda, but their strong native nationalism has made themroup which has openly sacrificed Korean national Interest to Ihe interests of inlernallonal Communism
CHINA
I- General.
Thc single most important aspect of the China aid program from the point of view of this discussion ls that the National Government, the recipient of US aid, ia not facedotential Communist threat, but has, for the past two years, beenosing battle with strong Communist armies, and is now faced with almost certain military and political defeat. Any discussion of the China aid program must recognize that the National Government, within the next few months will lose all its significant holdings north of the Yangtze River, and will be displaced. In most of China,ommunist-dominated regime.
2. Vulnerability or the Program.
Thc China aid program, per se,econdary target for tangible obstruction by thc Chinese Communists; the National Government Is the primary target. Thus any physical destruction of US aid projects is likely toesult of military action rather than of underground sabotage. Actually, the Chinese Communists,atter of policy, have spared mines, plants, and power installations, with the Intention of taking them over intact and would thus directly profit from aid funds expended for reconstruct ton.
The plight of the National Government, despite previous US assistance and the present aid program, makes Impossible the successful Implementation of the ECAas an anti-Communist measure. The China aid program cannot turn the tide of battle in favor of the National Government.
Aside from the Communist threat to Nationalist territory, thc success of the aid program is jeopardized by the economic chaos currently rife in Nationalist China. The hyperinflation, momentarily checked by an "Economic Reform Program" and thoof new currency, has proceeded afresh: prices are rising rapidly, note issue has again been resorted to as the primary instrument of public financing,light from the new currency is now evident throughout China The financial situation inChina Is completely out of Government control.
Chinese administrators and bureaucrats, who In the last analysis must be depended on for many of thc administrative details and thc execution of the aid program, have typically been weak and not above peculation. This group has beenesult of the pressures and temptations of inflation and will look to the aid program as another opportunity for personal profit.
Although the Chinese Communists will subordinate the physical obstruction of the old program to the conduct of its war against the National Government, they have given high priority ln their propaganda to ECA activities In Chinaonsiderable extent the Chinese Communists have taken the "Partyon the ECA Program
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emphasizing that China Is beingassal state, that Chiangool ol American imperialism.
But more effective than this general line of Invective has been thc uniqueopportunities the Chinese situation offers the Communistsesult of the war-weariness widespread in Nationalist China. There has longrowingamong manyintellectuals, peasants, and even someand governmentlife under the Communists would be no wmse than their present existence under the National Government. The desire for peace at any price is so strong that, even without any encouragement from Communist propaganda organs, the US aid program has been criticized in many quarters as merely prolonging thc life of the Chiang government, without settling thc war,
Another aspect of the intangible opposition to the aid program Is the latentof nationalism in China which the Communists and other elements have channeled into an anti-US sentiment among student groups In particular. These groups are particularly susceptible to the charge that the US aid programevice which will abet US imperialism in China.
3. Opposition Forces Present.
Offering the strongest opposition to American aid arc the Chinese Communists who are now at thc threshhold of success. Military and political control under the Chinese Communist Party is rapidly expanding over wide areas. Among otherforces to US aid are the Communist and pro-Communlsl organizations nowfrom Hong Kong
These opposition forces will express themselves principally through the medium of propaganda. However, the unrest in Nationalist China constantly gives rise lo dem-onslraUons and riots, many of which are anti-US in character and have anti-USAlthough many such civil disorders develop spontaneously and may not be Communist Instigated, the Communists are quick to turn these lo their advantage.
In addition, the National Government has almost no popular support; this fact, itself, constitutes an unorganized force of opposition to any aid for that government
4. Resistant Forcks Prbsent.
The NaUonal Government reccnUy promulgated an Economic Reform Programast ditch gamble to bring the inflation under control. The provisions of thehave virtually all been rescinded and prospects for economic stability are prac-Ucally non-existent. The aid program will undoubtedly have to be implementedackdrop of continuing and accelerating inflation
In many cases the police arc physically incapable of handling civil disorders. Much the same is true of the garrison troops in the major cities and the ineffectiveness of thc troops In the field is paintully evident.
There is inmall force favoring US aid. This group is composed of those Individuals whose fate hinges directly on the destiny of the NaUonal Government or who will personally profit Trom the aid. Most of thc top government officials will sup-
port the aid program wholeheartedly, and some regional leaders may continue tothe National Government in the hope of receiving aid (or their own areas. The lack of support from the general populace, however, will militate seriously against the program's effectiveness.
GHEECE
I, GeNVRAL-
The Greek Communist Party (KKE) and the guerrillas are seriously obstructing the ECA program in Oreece. Communist-guerrilla pressure is most directly andapplied on the peasants,f whom have been driven from their land, with the resulting agrarian dislocation. Sabotage Is also directed against all communications facilities and against those industries which are not located In the cities and are therefore exposed to the work of saboteurs Sabotage and guerrilla raids will continue.
Key government officers are not subject to pressure from Communist opposition forces, and Greek labor is on thc whole sympathetic to AMAG and ERP. The general feeling of insecurity pervading Greece and the consequent reluctance of businessmen to invest in reconstruction projects constitute the chief Indirect obstructions to Greek recovery
The Greek Communist Party (numbering) was declared illegaluerrilla strength ls nowith probable reservesn thc countries to the north Although the Greek police have arrested most of the leaders of underground movements in tlic cities, sub-organizationsto operate, but necessarily with the greatest caution.
The Communists have no significant Influence in organised labor or in any agrarian or professional group of legal standing If. however, the refugee problem is not alleviated and general recovery is not forthcoming soon, many peasants and workers may turn to communism in desperation, although anti-Communist, anti-Soviet, and pro-Anglo-American sentiment is strong throughout the country and in the government.
2. Vulnerability or the Program.
Because of the nature of the Greek economy, agrarian interests have been most susceptible to Communist-guerrilla pressure. Sixty percent of the population lives from the land and seventy percent of Greek exports are agricultural. Sharp agrarian dislocation has accompanied guerrilla operations. Tlic result is that much land is not ln production, and crops, livestock, and machinery have been confiscated or destroyed Little improvement can be expected in thia situation, at least until late summer
Most industries arc concentrated in thc cities and arc therefore more protected than agriculture from sabotage The following, however, are mostly located near or on the outskirts of towns and arc subject to sabotage: flour mills, mines (mostly lignite and chrome mines inower plants, water-supply systems, dredging equipment
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on drainage projects, and road-building machinery. During the dry season (latesabotage has been directed particularly against water supplies. Emphasis will be shifted from time to time. This situation can be expected to continue until thc spring9 and possibly improve thereafter.
There are no particular bottlenecks In industry, but ail land transportation and communication facilities arc subject to sabotage. Bridges, culverts, and tunnels are subject to destruction and mining on both the roads and rail lines. Trains and motor vehicles arc subject to mining or to direct attack from ambush. The effect of these tactics can be understood when it is realized that even normally about half of Greece's production of vegetables, fruit, and fish spoils for lack of adequate refrigeration and transportation. Telegraph poles arc subject to destruction, and wire and cables to removal. This situation will probably contmue until spring9 and possibly thereafter.
The General Confederation of Trade Unionsnly national laborin Greece, has pledged its support for the Marshall Plan and has cooperated closely with AMAG and the Greek Government In solving periodic wage issues.GSEE hasew token strikes during the past year for wage increases to equal price increases since the7 national wage agreement, both rank-and-file and most of its leadership have been ready to negotiate and compromise. The Civil Servants Unionn independent union, has sponsored several strikes for higher wages, but, like the GSEE, has acted with moderation. Periodic strikes for wage-price adjustments can be expected, but there Is little danger of widespreadstrikes. In view of the current attitude of organized labor andovernment emergency law for mobilization of striking workers hi key industries.
Although key government offices are not subject to propaganda or pressure from Communist opposition forces, inefficiency, nepotism, and the evils of political patronage inherent in the Greek system willecovery program. Selfish financialresist restrictive laws and taxation necessaryecovery program. For example, individual Greeks refused to register their foreign assets in accordance with ECA terms. Such resistance can be expected to continue.
The recovery program will not be subject to adverse propaganda to any serious extent, but there can be adverse political pressure arising from special interests. When and how the pressures will be applied cannot be anticipated. The most seriousto intangible pressures will ariseeneral lack of confidence in security and the reluctance to invest capital in order to reconstruct destroyed industries or to create new ones.
There has been constant resistance by special interests to restrictions imposed by the AMAG program. For example, there was strong resistance to thc attempt to reduce an overstaffed civil service. The technique of resistance was simply inaction or noncompliance. This can be expected to continue. Sabotage and raiding by thc guerrillas havearge toll in agriculture, small industry, and all landSabotage and raids will continue; towns may be safe after the springut communications will continue to suffer.
3. Opposition Forces Present.
The best available estimate puts the strength of the KKE (Communist Party in Greece) at. Guerrilla strength is now0 with possible reserves ofn the countries to the north. So far as is known, the Communist Party is organized along standard lines; it is under Moscow-trained leadership. It is not known to what extent the formation of the "Free" Greek Government has modified the organization, and the exact relationship between the Markos Junta and thc KKE is not known. The party is controlled by Moscow through theertain weakness In Moscow's control ties in the conflicting nationalistic aspirations for control of Macedonia on the part of Yugoslavia, Bulgaria, and Greece. Thcare distributed throughout the country but are strongest in the north. Thc armed guerrillas have their strongest concentrations along thc northern border.
Within the cities, the Greek police have been generally successful In arresting the leaders of underground movements. Sub-organizations, however, continue tosuch as the "People'she EPON (youthnd the EA (mutual aid)-but they are forced to operate with thc utmost caution. Of the citythat in Salonika is probably the strongest. Clandestinely printed Communist literature appears from time lo time in the cities; in the parts of the country controlled by the guerrillas various Communist papers and pamphlets are printed and distributed. There is no Communist influence In the legal press.
The Communist Parly has been illegal in Greece sincehe political parties which once served as fronts for thc Communists have for the most part denounced the armed revolt of the Communists or disappeared. The exception is the Socialist Party ELD-SKE, which has never denounced Markos. This party is against the Marshall Plan but has little influence. From time to time It is reported to be actingedium for compromise suggestions from the Communists to theThc Communist Party has no position in the government or in the legislature.
Communist influence in organized labor has dropped sharply in the last two years. In general labor elections, the Communists could possiblyote equal toercent of the total. In some local unionsole ofercent could beGovernment arrests and the guerrilla warfare have eUminated keyleaders and lowered Communist prestige in the unions. While Communiststo have considerable influence in some local unions, in most unions their Influence is negligible, andational scale they have no representation or power in the GSEE Executive. They can be expected lo use their present limited power to provoke rightist excesses in the unions and to spread propaganda.
Thc Communist Party has no significant direct Influence in any agrarian orgroup of legal standing. Indirect influence would be to send sentiment in these groups towards the right. The appeal which the Communist dreams might have for certain depressed economic groups is more or less cancelledevulsion against their methods. However, if security is not re-established so as to allowefugees to return to their homes, and if the lot of the peasant still on his land is not bettered by thc recovery programeformed government, many of the refugees
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and peasants may turn to Communism in desperation. If thc winter Is severe or if relief machinery breaks down, this trend may become apparent by the summer
It Is not anticipated that any change in the strength or methods of the opposition forces will take place before the springhanges after that time will depend on whether or not the Kremlin and the Satellites will increase or decrease the aid to the guerrillas. It is not believed that any political solution or government compromise with the Communist opposition can take place.
There are no Important or consistent non-Communist forces of opposition.
4. Resistant Forces Present.
Through the Foreign Trade Administration, headed by an American, the Greek Government controls all imports; the FTA Is able to control the amount of exports by adjusting thc value of foreign exchange certificates. Although there is virtually no price control, in the pastumber of measures have been enacted giving the Greek Government (and AMAG) control of major sources of inflation: budget and credit controls. Increased taxes, an improved importage freeze, the installation of collective bargaining machinery,oint US-UK-Greek Currency Committee which controls the amount of currency issued. To counteract speculation in drachmas, the Greek Government has continued its earlier policy of selling gold sovereigns. The Greek Government has continued price support for the wheat, tobacco, and olive crops, but onodified scale as to give It little control over their price orMany recent control measures have gone against Greek tradition and aroused Intense political pressures; however, so long as AMAG (ECA/G) stands firmly behind tho Greek Government, the necessary but unpopular policies can continue to beeffective.
The armed resistant forces (land) in Greece consist0rmy,0 National Defense Corps. The gendarmerie and the home guard are for thc most part static and defensive. The army is deployed to resist or eliminate the guerrillas as the situation demands. To date thc land forces have been unable toguerrilla destruction of communications, small industries, homes, etc, or losubstantial numbers of guerrillas. The army may be able to restrict the movement of the guerrillas by the summer or aulumnut sabotage raids will continue until then and after.
Anti-Communist, anti-Soviet, and pro-Anglo-American sentiment is strongthe country and in the government. If the military situation continues as athowever, open criticism of the US and ECA failure to produce more spectacular results In the Greek economy will Increase by the middlehis willro-Soviet. pro-Communist trend Labor union elections7 and8 indicated that the Communists had lost nearly all influence in the GSEE and its affiliates. Union rightists have shown some tendency, when expedient, lo team up with the small Communist faction against the moderate center In local labor struggles; this tendency may be expected to continue. However, both rightists and thc moderate center, who form thc vast majority of organized labor, are firmly opjxoed to Communism and would not be Influenced by ll on any important issue.
GERMANY
The general weaknesses in postwar European economies are aggravated in the case of Germany by several facts arising from itsefeated and occupied state. Not only isignificant lack of unity In occupation policies for the whole ofbut even in the western zones, jurisdictional disputes and bureaucracy under military admin titration interpose unusual obstacles to the Implementation of the ECA program.
Of THE PROGRAM.
The points at which the program is particularly vulnerable to sabotage orobstructionism are the transportation faculties, particularly the railroads, which still show evidences of lack of maintenance and replacement, despite markedin thc past year; coal production, which Is absolutely vital to recovery, and which, in spite of considerable gains, remains one of the most sensitive points ln the whole economy; and the production of electric power, upon which much of German industry depends, and which adds to the usual vulnerability of electrical installations and the deterioration of machinery and equipment. Shortages in building materials may greatly delay reconstruction, producing widespread discontent which would offset some of the national support the program will receive.
Communist party (KPD) strength in the western German trade unions isslight, bul thc KPD has gained more influence than is indicated by unionEmphasis has been on thc infiltration of strategic trade unions and the control of individual works councils. KPD strength Is particularly great in the metal workers union; in thc harbor, transport, and public workers union; and in the chemical, paper, and ceramics union. In the Ruhr-Aachen00 ofiners Union members were KPDn recent union elections the KPD suffered heavy losses and has no representatives ln thc UK Zone Miners Union Executive Committee.
Majority control of the western German tradc-uruon movement is In the hands ol the Social Democratic Partyhis party will continue to endorse ECA unless severe Inflation develops; unless, possibly, the Berlin SPD is liquidated as the resultestern Power withdrawal from Berlin; or unless the Western Powers initiate very unpopular occupation policies. This SPD control meansommunist penetra-tration of the labor movement will be vigorously combatted:abor unrest will be diverted into channels least injurious to Industrial production
The extent of Communist penetration in key government ofllces is unknown. The Executive Committee of the Bizonal Economic Council (thc Council Itself has four Communisthe Bi-Partite Control Office atain, and Military Govcrnmenl unit* at Land or Krett level are primary targets for penetration by the German Communlit Party or by the Communlit parties of thc US, Ihc UK, and France
r< i
Laendcr governments and adminlslrativc offices are vulnerable to Communistand administrative offices at the Krels level are highly vulnerable.
The people of western Germany are only slightly susceptible to propaganda attacks against the ECA program.
The KPD hasindrance to economic recovery. With the possible exception of. Farben plant in Ludwigshafen, sabotage has beenery minor scale. KPD obstruction has taken the form of aggressive exploitation of labor unrest.management in sequestered enterprises, such as coal, has also obstructedproductionimited degree. Continuation of KPD exploitation of labor dissatisfaction will be the primary source of future obstruction. Depending ondevelopments, the KPD may also carry out industrial sabotage to aextent
3. Opposition Posers Psxsint.
The KPD Is the most significant of the forces opposed to the ECA. In Land diethc KPDercent of the total vote in the USercent in the French Zone,ercent in the UK Zone. Thc overt KPD is organizedri-zonal basis under the leadership of Max Relmann, chairman of the trl-zonat secretariat. Below this are three zonal secretaries, controlling Laender and Kreis party organizations. Leadership Is in the hands of able and reliablemost of whom have been party members for several decades
Within the overt KPD of the western zones, rigid vertical control Is exercised by the tri-zonal secretariat The Central Secretariat of the Socialist Unity Party (SED) of the Soviet Zone controls all Communist activities in western Germany. This Central Secretarial is directly controlled by both Moscow and Uie Soviet MilitaryLiaison between the Central Secretariat and the four top secretariats in western Germany is maintainedourier service.
The KPD is particularly strong in Land Nordrhein-Westlalen and Wurtlemburg-Baden. Mannheim, Mainz, andain are thc three key Communistin western Germany.
The strength of thc organized loiee available to the KPD Ls unknown, but isto be relatively slight Some subversive party activity such as sabotage,intelligence, and counter-intelligence, is carried on under the direction of the Second Party Secretary {OrgUiter) at each level of the KPD organization.
The KPD in western Germany has three principal types of printedewspapers, such as thc Taglfchc Rundschau, Vorwarts, and Neues Deutschland, which are shipped or smuggled from the Sovietosters, handbills, andwhich are printed in western Germany;ommunist newspapers printed in western Germany, such as Frcihett. Voiksttmtnc and the Wcstdeutsches Volksccho Thc demand for this propaganda material has been excessively high because of lhe limited amount of western printed material In circulation Currency reform, however, has greatly reduced the amount ol KPD propaganda material
The Communist Party is legal In western Germany. It stands ln opposition to all other political parties except certain elements of thc SPD. The KPD carries on ancampaign toedge between the trade-union wing of the SPD and the party bureaucracy for the purposeestroying resistance to Communists within the Marxist-Socialist movementncreasing KPD party strength.in governments and legislatures is slight. If outlawed, the KPD would dissolve Itself and form an underground, organizing into cells of ten members underell leader, who in turn would be in contact with the next higher party echelon. This underground would concentrate on propaganda and the penetration of otherparties and sensitive governmental agencies The subversive elements under the Orgleitcr, still in process of organization, wouldar more militant role than at present through sabotage, assassinations, and intelligence activities.
Communist economic influence upon labor is slight except for the ability to create unrest and strikes in certain unions where the Communists have significant strength. They have almost no Influence upon agrarian groups except in connection withfor land reformolitical program Beyond certain intellectual and university circles. Communist Influence on professional or other economic groups is negligible
Non-Communist opposition to ECA may developeflection of basic German opposition to such occupation policies us decarte) (ration, control of foreign trade through JEIA, denazification, occupation costs, and industrial dismantling. Thiswould be manifested in lagging production which could seriously affect the recovery effort. With increasing German control and declining occupation costs, these factors of opposition mny be assumed to be of rapidly declining Importance.
4. Resistant Forces Present.
Government economic controlsignificant deterrent to interference with the economy by opposition forces,ontinuing relaxation of controls will mean that byew controls will remain, except for the basic economic controls In coal, steel, and,esser degree, the chemical industries.
Theare differently organized in the three western zones. Total sirengtliaKSrenchhe police are considered to be competent within their limited jurisdiction and capable of controlling local situations. In thc case of the Frenchmall nucleus of Communistsin the police, despite purges tiy the occupying power. Adequate to handle normal situations, the French Zone police would be of slight assistanceeal emergency. In an emergency of wide scope the occupation authorities would assume control In all zones.
Anti-Communist sentiment is strong The average German fears further Soviet expansion and excessive Communist strength. Strongly nationalistic elements,advocate exploiting the East-West struggle for the benefit ol German nationalism, hoping to Improve Germany's international and Internal position. Within theanti-Communist sentiment is also strong. Communist personnel having been icmoved from the upper governmental echelons, ln the labor movement, although
the majority of workers distrust the Communists, personal benefit* attributable to Communist efforts might gain their support for short-term goals.
AUSTRIA
krai..
The ERP program in Austria is particularly vulnerable to obstruction because thc country Is subject to quadripartite occupation. The USSR, which occupiesone-third of Austria, has denounced Austria's ECA agreement aswith Austrian sovereignty and independence, but has not directly or actively opposed its Implementation. Nevertheless, the predominantly anti-Communistof the country, reinforced by the realization of the majority that without the ERP program Austria cannot survive, can be depended on to produce factors generally favorable to the success of the program.
of the Program.
Soviet occupation creates the points at which most effective obstruction tactics might be applied. As an occupying power, the USSR might refuse to permit Uieof lhe plan In eastern Austria. This would include refusal to grantpermits for the transport of essential goods, and. if carried lo its ultimate, would resulte facto partkUon of thc country. The USSR might make greater use of USIA (Admin istraUon of Soviet Assets in Austria) firms to drain off benefits of ECA imports and to buy up short essential commodities In Austria Further, the USSR might seize additional firms In eastern Austria as "Germanhroughoccupation poliries and the operation of USIA firms on an extraterritorial basis, the USSR has already sought to bring economic pressure to bear upon the Austrian Government, at the same time denouncing Austria's participation in thc ECAAlthough thc Soviet element has not actively opposed implementation of theontinuance of this pressure may be anticipated. Since thc AustrianParty Is relatively unimportant and the sentiment of the great majority of the population is anti-Soviet, any successful obstruction or sabotage of lhe program in Austria must be undertaken by thc Soviet element with the facilities available to it as an occupying power.
The principal economic bottlenecks, suggestive of points al which thc ECAcould be most easily thwarted, are insufficient railroad facilities and obsolete industrial machinery. Key labor groups and government offices cannot be used as agents of obstruction Some loss of government authority over minor officials in eastern Austria may result from fear of Uie USSR and from Uie realization that Uie Allied Council Is largely unable to rectify unilateral Soviet action. These factors may also encourage some Austrian industrialists to Increase their business dealings with USIA Increased wage demands and their possible attendant strikes would of course be exploited by the Communists.
A clearly evident press campaign has been conducted against the ECAwith predictions of its bad effects, particularly In the fields of finance andThis is likely to continue. Any crisis in the economy, such as might arisetrain on the government's financial position because of the blocked ECA counterpart funds, would be quickly exploited.
3. Opposition Forces Present.
Aside from the Soviet occupation forces, the Communist Party Is virtually thc only opposition force in Austria which would threaten the ECA program. TheParty (KPOc) is organized In the usual manner. The highest authority ls ostensibly the ParteUag, but the real authority Is the Central Committee which is charged with leadership and adnilnistration of the party. The Political Secretarial executes decisions of the Central Committee, and Is thc highest authority next to thc Central Committee. The lower structures of the party closely parallel the structure of thc Austrian State except in the smaller units. The Zelle, consisting usually of about ten members, is the smallest unit of organization.
The leadership of the KPOe may be under revision. There is substantial evidence that the Kremlin has been highly dissatisfied with the party, and although the same figureheads may remain In office, authority may be passing into new hands. It isthat real authority Is no longer exercised by Austrian nationals. The KPOe lsember of the Comlnform, and Moscow controls the party through Sovietauthorities.
8 estimates place the total strength of the KPOe at
(though this may now beith the largest concentration inercent).
and the following provincial figures: Lowerercent),
Carinthiand Upper Austriaercent). Of this total0
may be considered hard-core armed Communists,arger number,
considered able-bodied militants who wouldommunist coup. The major
Communist newspaper has the lowest circulation figure of any major newspaper In Austria.
In spite ofecognized party within Austria, the KPOe ls looked uponool of the USSR, and lhe coalition parlies do not cooperate with it.2 percent of the votes in5 elections, nnd elected four members to the lower house of Parliament. The four KPOc members in Parliament follow the established Communist line of voting against economic and olher measures advocated by thc government. They exercise no Influence on thc governmeni. If the KPOe were outlawed. Its policies and capabilities would remain substantially unchanged.
KPOc influence on labor unions is negligible. In the Works Council elections held at the endhe Communists obtained less thanercent of the lotal seats, while thc Socialists obtainedercent Further evidence was given in the failure to achieve nation wide strikes during the September wage-price negotiations KPOe influence is likewise negligible with agrarian, professional, and other economic groups.
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In tlic last analysis, the significance of the Communist Party within Austria Is largely dependent on Soviet occupation, and should occupation forces be withdrawn, the presently small influence of the party probably would decline. The USSRdesires on Improvement ln the activities of the KPOc,trengthening of party discipline Is apparently under way. This probably involves changes In thc real leadership.
Other opposition forcesew left-wing Socialistsery small group of business leaders who oppose ECA for fear of American competition. Neithereffective opposition.
4. RESISTANT Foacrs Pbssknt.
Strict economic controls have been imposed in Austria. These may be presumed to decrease opportunities for obstruction. The government has been successful in avoiding full allocations of raw materials or semi-finished products lo USIA firms, bul it Is realised that some allocations must be made. Some ECA Imports can be expected to go to Soviet firms, but careful screeningoint Austrian-US committee in Vienna will guard against any significant loss of strategic materials.
The Federal Police Includes city police, customs police, and prison guards. Theseith two-thirds of the personnel In Vienna. They are only partly armed with rifles and pistols, but arms and ammunition have been placed within Vienna by the Western Powers for Issue in case of an emergency. Although considerable success has been achieved In eliminating Communists from key positions, particularly In the political section, Communist influence In the economic police has not yet beenThe gendarmerie are the rural police. These0 and are somewhat better armed and trained than the Federal Police. Althoughhole thcls considered non-political, there may have been some Communist infiltration in the Soviet Zone. The game wardensegally armed group ofen. They are considered non-political
In general, the police have thc ability to maintain law and order within Austria Communist infiltration into the entire Austrian police. Including gendarmerie, was estimated atercent inhis has probably been reduced. As presently armed and constituted, Vienna police can be relied upon to control Communistprovided demonstrators are unarmed and provided there is no large-scale participation of non-Communists in such demonstrations, but they cannot copeommunist parson attempt by armed forces, unless actively supported by Western occupation elements ln Vienna Communist penetration of the Vienna police does not materially affect its capabilities. With Soviet cooperation, thc Communists could seize control in the provinces of Lower Austria (except as indicated for Vienna) and Burgenland. In the western zones of occupation, the Communists cannot seize control.
There ls no Austrian army, the only military forces being those of the occupying powers.
The overwhelming majority of the population, and aboutercent of the organised labor movement in Austria are anti-Communist, nnd the sentiment of the government is overwhelmingly antl-Communlst ns well.
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Original document.
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