CENTRAL INTELLIGENCE BULLETIN - 1961/01/24

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02000179
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: August 14, 2020
• Document Release Date: August 27, 2020
• Publication Date: January 24, 1961

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24 January 1961
Copy No. c � 1 U
CENTRAL
TELLIGENCE
BULLETIN
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24 January 1961
CONTENTS
I.
N
1. Laotian Government continues to press French to
reduce military mission. (No Backup)
2. Congo: UAR.'s threat to withdraw its troops prob-
ably intended to pressure UN into permitting Cairo's
battalion to remain in areas where it can support
Gizenga. (No Backup)
3. Developing foreign exchange crisis in UAR may in-
crease flight of foreign capital. (Backup, Page 1)
4. Situation in Turkey unstable despite moves toward
return of civil government. (No Backup)
5. West Germany continues efforts to improve rela-
tions with Poland. (Backup, Page 2)
6. France to continue aerial reconnaissance over Libya
despite Libyan threat to break relations; flights are
for detection of any arms build-up by Algerian rebels.
(Backup, Page 4)
7. Argentina to ask Soviet bloc nations to reduce their
diplomatic representation in Buenos Aires. (No Backup)
CENTRAL INTELLIGENCE BULLETIN
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CENTRAL INTELLIGENCE BULLETIN
24 January 1961
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E(Laos: No significant military developments have
been reported during the past 24 hours. Airlift opera-
tions with S -14s continued through 23 January.
N
oun Sum government and the French rep-
resentation in Laos appear headed for a showdown. The
Laotian Government, convinced that the French are
work=�
ing with antigovernment elements for the return to power
of deposed premier Souvanna Phouma, has already re-
quested the recall of certain French advisers and is con-
sidering declaring French Ambassador Falaize persona
non grata. Paris eventually may be goaded into withdraw-
ing its representation completely, including its economic
technicians and military training mission. The withdrawal
of the French training mission would jeopardize the status
of the American training program, _which operates techni-
cally under the French. The 1954 Geneva Agreement speci-
fied France as the sole training agent for the Laotian armed
forces.
Congo: The reported decision by the UAR to withdraw
Its troops from the Congo appears related to UN directives
ordering Cairo's battalion to move from Equateur to Kasai
Province, the ytie,
battalion's commanaer received instructions from the UN -----
on 21 January to transfer his unit to Kasai by the end of the
month. The commander, pointing out to Cairo that the move
would compromise his freedom of action�presumably includ-
ing his ability to direct clandestine support to Gizenga�and
would place the unit in the midst of "famine and disturbances,"
stated that he would attempt to stall for time until Cairo sent
instructions. In threatening to withdraw its forces, the UAR
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may be attempting to pressure the UN into permitting the
battalion to remain in Equateur.
*Belgium reportedly is continuing its efforts to aid the
regimes of Mobutu and Tshombe.
about 100 Belgian military advisers to Mobutu's army re-
cently arrived in Leopoldville. Press reports indicate that
50 volunteers for the Katanga armed forces recently were
moved from Brussels to Elisa,bethville. Meanwhile, the
situation in Stanleyville reportedly is tense, with Europeans
in a state of hysteria as a result of continuing intimidation
by Lumumha followers
IJARI_Many prominent mid-eastern investors are liqui-
dating their real estate holdings and bank deposits in both
regions of the UAR because they fear a foreign exchange
crisis and further nationalization within the next few weeks.
By December foreign exchange reserves of the Egyptian
National Bank had fallen to the lowest point ever reached,
and in Syria the exchange rate of the pound has continued its
downward drift. Cairo's efforts to earn foreign exchange by
shifting some cotton sales from Communist countries to
Western Europe have met with� little success. While a
$27,300,000 drawing from the International Monetary Fund
may postpone the "crisis" foreseen by Egyptian Finance
Minister. Qaysuni before the end of February, a flight of
capital, especially to Beirut, is likely fn ennfimul from
Syria and increase from Egypi (Back-
up, Page 1)
Turkey: Despite recent moves toward a return to civil
government, which included the establishment of a Constitu- q
ent Assembly on 6 January, the situation in Turkey remains
unstable. The military regime of the Committee of National
Union (CNU) which overthrew the Menderes government last
May still lacks unanimity of purpose, full loyalty of the mil-
itary establishment, and popular confidence. Fourteen ultra-
nationalist officers who were ousted from the CNU in mid
November and dispersed to foreign diplomatic posts apparently
24 Jan 61
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retain a degree of military and civilian support within Turkey.
The two-month-old trial of members of the pre-revolutiori
government has failed to promote either popular condemna-
tion of those on trial or popular support for the government.
Meanwhile, the Turkish economy remains sluggish, largely
through lack of public confidence, and continues to be de-
pendent on substantial foreign economic aid, which the Turks
believe their Western allies should provide. Unless there is
marked improvement in the economic situation, Turkey may
accept some economic assistance repeatedly offered by the
USSR, provided it does not inhibit Turkey's political freedom
of action.
West-Geri1any7=-Po-faridIterth6ld I3eitz, general manager
of the Krupp industrial enterprises, has arrived in Warsaw for
further discussion of the possibilities of improving West Ger-
man - Polish relations. Adenauer, who wants to appear "flex-
ible" on East-West relations in an election year, has, accord-
ing to Beitz, authorized him to negotiate the establishment of
a West German trade mission in Warsaw--possibly one having
certain consular functions. Beitz returned from a similar trip
last month convinced that the Poles are willing to establish
diplomatic ties without insisting on immediate West German
recognition of the Oder-Neisse line as Poland's western bor-
der. Poland, however, continues to insist on full diplomatic
ties rather than the gradual improvement of relatinnq faunrciri
by Adenauef\_
(Backup, Page. 2)
e Afr+`
France-Libya: France has notified the US that it will again -,
--
carry out secret reconnaissance �overflights of Libya on 26-27 (!)-6-7`94' " A
January and 2-3 February despite recent protests by the� Libyans
against flights they observed on 4 and 5 January. Although the
flights have been going on approximately monthly since mid-1959 �
the early January missions were the first detected by Libya, \,
which immediately threatened that any repetition would lead to)
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L--; rupture of relations with France. The US and UK have re-
peatedly warned Paris of the dangers involved in these flights,
but the French military have insisted that they are essential
as a means of discovering any arms build-up in Libya by Al-
gerian rebels.
(Backup, Page 4)3
*Argentina-USSR: Argentina intends to ask the USSR to
reduce the size of its embassy in Buenos Aires from the pres-
ent total of 42 to 20 within the next three months. Notes will
be sent later. to Poland, Czechoslovakia, Rumania, Hungary,
and Bulgaria requesting reductions ranging from one third to
one half of the present legation staffs. Argentina, concerned
about Communist penetration in Latin America, appears de-
termined to press its request. When a suggestion along these
lines was made to the Soviet and Polish missions last Novem-
ber, it was rejected as "inconvenient."
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16.00 mrtn orinnEIP
UAR' Economic Difficulties Increasing
aarge Middle Eastern investors reportedly are disposing
of their holdings and closing out their bank deposits in both
regions of the UAR. The Deputy Ruler of Kuwait has said that
he is liquidating his assets in Syria because he fears increas-
ing economic and political instability and further nationaliza-
tion moves by Cairo731
Na,sir refused to approve its plan for guaranteeing
private and foreign investment in Syria against nationalization.
He also characterized efforts by government officials to win
the support of the business community for the region's eco-
nomic development plan as "begging," and noted that he had
dered nor approved such action.
[Cairo's efforts to earn foreign exchange by shifting some
cotton sales from Communist countries to Western Europe
have not been particularly successful, and the foreign ex-
change situation is worsening. By December, foreign exchange
reserves of the Egyptian National Bank had fallen to$55,000,000
--their lowest ever.
On an effort to alleviate the situation, Egypt drew $27,000,-
000 from the International Monetary Fund. This action may
have postponed the early "crisis" predicted by Egyptian Finance
Minister. Qaysuni, but the loan was practically wiped out by a
payment on 1 January of $23,000,000--half to the Suez Canal
shareholders and almost half to the Sudan under the Nile Waters
Agreement]
The situation will deteriorate even further if Nasir carries
out a reported plan to require all foreign firms doing business
in the Egyptian Region of the UAR to conduct their affairs
through an Egyptian "agent0
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Bonn Seeks Improvement of Relations With Poland
LBegotiations for improved West German relations with
Poland seem to be under way. Berthold Beitz, general man-
ager of the Krupp industrial enterprises, says he has been
authorized by Chancellor Adenauer to negotiate the establish-
ment of a West German trade mission in Warsaw�possibly
one having consular functions. Beitz arrived in Warsaw on 22
Januaryi3
after a conversation with Polish Premier Cyrankiewicz
during a visit to Warsaw last month, Beitz returned to Bonn
convinced that the Poles are willing to establish diplomatic
ties without insisting on immediate West German recognition
of the Oder-Neisse line as Poland's western border. The
boundary question and the so-called "Hallstein doctrine" by
which Bonn refuses to have diplomatic relations with any
country other than the USSR which recognizes East Germany
have been the major stumbling blocks to an improvement of
relations between Bonn and Warsaw-7j
CA similar attempt to improve relations in 1958-59 failed
because of Warsaw's insistence on immediate resumption of
full diplomatic ties rather than following the step-by-step
procedure desired by Adenauer. Although Heitz maintains
that Premier Cyrankiewicz indicated a willingness to agree to
exchange permanent trade missions as a first step, Polish
Foreign Minister Rapacki and other diplomatic officials have
continued to insist on full diplomatic relations'3
(The undersecretary in the West German Foreign Ministry
informed American officials in Bonn that Adenauer had not
raised the question of a trade mission with the Foreign Minis-
try and that he believed the chancellor would move cautiously
in an election year to avoid alienating the expellees and refugees
who make up about one fifth of the population. Adenauer, how-
ever, may be willing to make at least a gesture in order to
convince the German public, as well as his allies, that he can,
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Ge flexible in dealing with the East and that he is not an ob-
stacle to an international detenfe:j
lublicly taking a "positive attitude" toward
attempts to improve relations with Poland in hopes of remov-
ing the impression that the refugees are "disturbers of the
peace" in East-West relations. German businessmen have
long sought to expand formerly lucrative Eastern markets.
The Poles have expressed strong interest in West German
industrial products and also wish to increase exports of raw
material and agricultural products to West Germany. At
present, trade with Poland�a,mounts to less than one percent
of all West German foreign.trade
statements by Polish leaders
have been extremely cautious on the question of a rapproche-
ment with Bonn, but there are indications that negotiations are
proceeding on the Foreign Trade Ministry level in the estab-
lishment of economic relations while playing down the political
problems involved3
SECRE�
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France Schedules Further Overflights of Libya Despite
Tripoli's Protests
a:lespite a recent protest from the Libyan Government,
France intends to continue the series of reconnaissance
flights the French Air Force has been making over Libya
since mid-1959. A French Air Force intelligence officer
has notified the US air attache in Paris that flights north of
the 30th parallel will be flown on 26-27 January and south of
the parallel on 2-3 February
Libya has become aware of such overflights only recently.
On 9 January Libyan Prime Minister Muhammed Ben Uthman
informed the US ambassador in Tripoli that on 4 and 5 January
two French military aircraft had conducted 20,-minute low-level
surveillance over Ghat and two other villages in southwestern
Libya near and on the Algerian border. French officials had pre-
viously notified the US that overflights south of the 30th parallel
were scheduled for these dates. Uthman charged that a French
military land penetration of Libyan territory had occurred also
on 5 January, and stated that the French ambassador had been
warned that repetition of such incidents would inevitably lead to
a rupture of relations. He asked both the United States and
Britain to intervene with France. He insisted that the whole
matter be handled with the utmost secrecy, pointing out that
publicity would generate strong domestic pressure for imme-
diate actionD
French officials have regularly notified the US of the sched-
uled dates and areas for the overflights, and have as regularly
ignored US and UK warnings of the possible consequences. The
French military justify, the overflights as essential to detect a
possible Algerian rebel arms build-up on Libyan bases, and have
even claimed to possess intelligence reports that a rebel air force
is being formed there. Although arms have been transshipped
through Libya to rebels in Algeria, Paris has made no claims
that a major build-up has been discovered as a result of the over-
flights:3
gf such French activities are again detected, Tripoli may go
beyond simply breaking relations. It may invoke its mutual defensei
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Ctreaty with the UK to demand that British aircraft prevent
such incursions; it may also threaten to suspend the Wheelus
air base agreement with the United States unless US aircraft
assist in orotectine Libyan territory
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CONFIDENTIAL *10
^THE PRESIDENT
�The Vice President
Executive Offices of the White House
Special Assistant for National Security Affairs
Scientific Adviser to the President
Director of the Budget
Director, Office of Civil and Defense Mobilization
Director, National Aeronautics and Space Administration
Chairman, Board of Consultants on Foreign Intelligence Activities
Executive Secretary, National Security Council
The Department of State
The Secretary of State
The Under Secretary of State
The Under Secretary of State for Political Affairs
The Deputy Under Secretary of State for Political Affairs
The Deputy Under Secretary of State for Administration
The Counselor
Director, International Cooperation Administration
The Director of Intelligence and Research
The Treasury Department
The Secretary of the Treasury
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
Assistant Secretary of Defense (International Security Affairs)
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Chairman, The Joint Chiefs of Staff
The Director, The Joint Staff
Chief of Staff, United States Army
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Commandant, United States Marine Corps
Assistant to Secretary of Defense (Special Operations)
Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of Army
Director of Naval Intelligence, Department of Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
Atomic Energy Commission
The Chairman
Federal Bureau of Investigation
The Director
National Security Agency
The Director
National Indications Center
The Director
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