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CRET
REVIEW OF THE WORLD SITUATION AS IT RELATES
TO THE SECURITY OF THE UNITED STATES
SUMMARY
1. Recent Soviet moves suggest that the
lems like the current export lag and unem-
USSR is preparing a renewed cold war "of-
ployment will probably determine its ability
fensive." Although Soviet pressure will be
to withstand attacks from opposition parties,
maintained in Europe, the USSR in the com-
including those of the extreme nationalist
ing months is likely, in association with China,
right.
to direct its main effort to Southeast Asia.
c. In view of the furor over the Saar and
2. The Soviet "walk-out" at the UN was de-
current German economic difficulties, the re-
signed to champion the Chinese Communists,
cent six-month trade agreement is a concrete
to isolate them from the West, and to make
first step toward closer Franco-German rela-
US recognition of the Peiping regime more dif-
tions.
ficult.
3. China and the USSR probably will sign
6.a. The outcome of the British general
a treaty of friendship intended to strengthen
election will have little effect on major US
the Soviet position as well as to confound the
security interests. The return of a Labor
West and conciliate non-Communist opposi-
government with a working parliamentary
tion in China. The new treaty will help the
majority seems likely.
USSR establish controls intended to prevent
b. Assuming a continuation of present
the Chinese Communists from following an
world-wide economic conditions and scheduled
independent course in international affairs.
ERP aid, prospects appear favorable for the
4. In Southeast Asia Communist pressure
UK to avoid a dollar crisis during 1950.
probably will follow the customary pattern of
Nevertheless, the UK has little prospect of
infiltration and subversion rather than open
achieving financial stability by 1952 sufficient
military action. The Chinese may, neverthe-
to warrant a return to sterling-dollar convert-
less, provide the Ho Chi Minh regime with
ibility and free multilateral trade.
military assistance that, in the absence of
c. The UK must achieve a sound economic
substantial US military or financial assist-
ance, could bring about the downfall of Bao
relationship with the dollar area, whatever its
relations are with the Continental nations.
Dai and French withdrawal within two years.
To this end a wider association than a strictly
5. a. The Saar dispute is a symptom of the
Western European union probably is neces-
deep-seated obstacles in the path of Franco-
sary.
German rapprochement and thereby preju-
dices a closer association of West Germany
7. In Italy, the Communists are likely to
with the Western European nations.
gain strength by exploiting legitimate work-
b. In Germany the Adenauer government's
ers' interests in the industrial north where
success in dealing with serious economic prob-
serious unemployment exists.
Note: This review has not been coordinated with the intelligence organizations of the De-
partments of State, Army, Navy, and the Air Force. The information contained
herein is as of 10 February 1950.
DECLASSIFIED
O. 11652, Sec. 3(E) and 5(D) of (E)
1
C.F.A.
OSD letter, April 3:31-77
By NLT- NARS Date 4-18-77
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"ocrText": "CRET\nREVIEW OF THE WORLD SITUATION AS IT RELATES\nTO THE SECURITY OF THE UNITED STATES\nSUMMARY\n1. Recent Soviet moves suggest that the\nlems like the current export lag and unem-\nUSSR is preparing a renewed cold war \"of-\nployment will probably determine its ability\nfensive.\" Although Soviet pressure will be\nto withstand attacks from opposition parties,\nmaintained in Europe, the USSR in the com-\nincluding those of the extreme nationalist\ning months is likely, in association with China,\nright.\nto direct its main effort to Southeast Asia.\nc. In view of the furor over the Saar and\n2. The Soviet \"walk-out\" at the UN was de-\ncurrent German economic difficulties, the re-\nsigned to champion the Chinese Communists,\ncent six-month trade agreement is a concrete\nto isolate them from the West, and to make\nfirst step toward closer Franco-German rela-\nUS recognition of the Peiping regime more dif-\ntions.\nficult.\n3. China and the USSR probably will sign\n6.a. The outcome of the British general\na treaty of friendship intended to strengthen\nelection will have little effect on major US\nthe Soviet position as well as to confound the\nsecurity interests. The return of a Labor\nWest and conciliate non-Communist opposi-\ngovernment with a working parliamentary\ntion in China. The new treaty will help the\nmajority seems likely.\nUSSR establish controls intended to prevent\nb. Assuming a continuation of present\nthe Chinese Communists from following an\nworld-wide economic conditions and scheduled\nindependent course in international affairs.\nERP aid, prospects appear favorable for the\n4. In Southeast Asia Communist pressure\nUK to avoid a dollar crisis during 1950.\nprobably will follow the customary pattern of\nNevertheless, the UK has little prospect of\ninfiltration and subversion rather than open\nachieving financial stability by 1952 sufficient\nmilitary action. The Chinese may, neverthe-\nto warrant a return to sterling-dollar convert-\nless, provide the Ho Chi Minh regime with\nibility and free multilateral trade.\nmilitary assistance that, in the absence of\nc. The UK must achieve a sound economic\nsubstantial US military or financial assist-\nance, could bring about the downfall of Bao\nrelationship with the dollar area, whatever its\nrelations are with the Continental nations.\nDai and French withdrawal within two years.\nTo this end a wider association than a strictly\n5. a. The Saar dispute is a symptom of the\nWestern European union probably is neces-\ndeep-seated obstacles in the path of Franco-\nsary.\nGerman rapprochement and thereby preju-\ndices a closer association of West Germany\n7. In Italy, the Communists are likely to\nwith the Western European nations.\ngain strength by exploiting legitimate work-\nb. In Germany the Adenauer government's\ners' interests in the industrial north where\nsuccess in dealing with serious economic prob-\nserious unemployment exists.\nNote: This review has not been coordinated with the intelligence organizations of the De-\npartments of State, Army, Navy, and the Air Force. The information contained\nherein is as of 10 February 1950.\nDECLASSIFIED\nO. 11652, Sec. 3(E) and 5(D) of (E)\n1\nC.F.A.\nOSD letter, April 3:31-77\nBy NLT- NARS Date 4-18-77"
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