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SECRET
REVIEW OF THE WORLD SITUATION AS IT RELATES TO THE
SECURITY OF THE UNITED STATES
205u549
SUMMARY
1. The CFM meeting, while it reached no
2. A period of uncertainty is anticipated in
basis of compromise with respect to Germany,
connection with the position of the Labor Gov-
brought into focus the essential factors that
ernment in the UK. The critical problem of
will affect East-West relations for the imme-
gold reserves is still too technical to have
diate future. The context of short-term pol-
altered the general confidence of the elector-
icy will be the now accepted fact of a divided
ate. If the Government has an agreed solu-
Germany. In this context, the strength and
tion it can probably count on adequate public
authority of the new West German State be-
support. If, however, the Government is split
comes of great importance, as does the capac-
on the issue, considerable political uncertainty
ity of the USSR to play on the theme of Ger-
is likely to develop.
man unity. The relation of the West German
3. In the Near and Middle East, there is
State to Western Europe is a significant open
nothing to note except that in Iran economic
problem. The situation in Berlin retains its
difficulties and internal political intrigue are
capacity to generate friction. Both the West
complicating the conduct of US-Iranian rela-
and the USSR have their freedom of action
tions.
restrained. The USSR is not able at present
to develop a strong political offensive in Ger-
4. In the Far East, the growth of internal
many. The way has not yet been found to
tensions in Japan is the most significant de-
reconcile the design of an international Com-
velopment, and the possibility of avoiding a
munist dictatorship with strong nationalist
sharp Right-Left conflict is becoming difficult.
sentiments in satellite and fellow-traveling
In China, the main issue is now the establish-
states. Freedom of action is further re-
ment of political authority and not military
action. The situation in Indonesia remains
stricted by unresolved economic difficulties.
viable. The situation in Indochina remains
The West, for its part, has fallen back from
the strong position it seemed to have during
doubtful.
the CFM meeting. Fundamental economic
5. There were no significant developments
reverses are taking place and seem to threaten
in Latin America.
the partially rebuilt structure of stability and
6. The development of a non-Communist
security in Western Europe. Soviet propa-
International Labor Organization in opposi-
ganda, seizing on the theme of the internal
tion to the WFTU has begun to redress the
disruption of the capitalist world, has begun
balance of influence in world labor in favor
to exploit this development.
of the West.
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 15 July 1949.
DECLASSIFIED
E. O. 11652, Sec. 3(E) and 5(D) or (E)
ECRET
3-31-77
1974
1
letter,
NARS
Date
By
NLT-
4.1±27
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