CENTRAL INTELLIGENCE BULLETIN - 1960/11/02

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02977803
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 15
• Document Creation Date: March 17, 2020
• Document Release Date: March 26, 2020
• Publication Date: November 2, 1960

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2 November 1960
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INTELLIGENCE
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2 NOVEMBER 1960
I. THE COMMUNIST BLOC
Peiping continues to stand firm in dis-
pute with Moscow; latest issue of China's
Red Flag implicitly criticizes Khru-
shchev's "gradualist" strategy.
II. ASIA-AFRICA
New effort to get France and Algerian
rebels together in direct talks decided
on at Abidjan meeting last week of lead-
ers of former French territories in
Black Africa.
Chinese Nationalist Air Force said to
have averaged two flights a month this
year supplying Nationalist irregulars in
Burma-Thailand border area.
Indonesia's new petroleum law will re-
quire foreign oil companies to operate
under contract rather than on present
concession basis.
Situation in Laos.
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SECKEI.
III. THE WEST
�Opposition elements in Guatemala en-
couraged by Salvadoran coup.
�Some possibility seen of anti-US violence
during Panamanian independence cele-
brations this week.
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CENTRAL INTELLIGENCE BULLETIN
2 November 1960
DAILY BRIEF
L THE COMMUNIST BLOC
Sino-Soviet Dispute: Peiping continues to stand firm in
Its dispute with Moscow. The latest issue of the Chinese
party's major theoretical journal, Red Flag, published on
31 October, strongly urges the necessity 7 violence in seiz-
ing state power and implicitly criticizes Khrushchev's "grad-
ualist" strategy. Delayed since mid-October, this issue of
Red Flag probably reflects decisions reached at recent polit-
buro-dtFussions in Peiping following the return from Moscow
of Chinese representatives who are believed to have been en-
gaged in lengthy negotiations with Soviet officials. The appar-
ent lack of success of preliminary meetings makes it unlikely
that the scheduled meeting this month of world Communist
leaders in Moscow during the October Revolution anniversary
celebrations will succeed in achieving any meaningful compro-
mise of opposing views; it even raises the possibility that the
meeting will be postponed. (Page 1)
II, ASIA-AFRICA
French Community - Algeria( Ivory Coast Premier Hou-
phouet-Boigny confirmed on 29 October that last week's confer-
ence in Abidjan of leaders of former French territories in Black
Africa authorized the dispatch to Paris and Tunis of represent-
ative delegations to try to bring France and the Algerian rebels
together in new direct talks. Houphouet, who is to head the
projected mission to Paris, implied that African support for
France on the Algerian question in the UN might well depend
on whether De Gaulle is willing to show greater "flexibility"
toward the rebels' conditions for a resumption of talks. The
French press has recently been referring hopefully to the pos-
sibility of mediation on the Algerian problem by French Commu-
nity states, but French officials have been cool to the idea3
(Page 3)
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Noof
Taiwan:I
the Nationalist Air Force had made an aver-
age of two flights a month this year to resupply National-
ist irregular forces in the Burmese-Thai border area
(SECRET NOFORN) (Page 4)
Indonesia: Indonesia's new petroleum law, announced
on 1 November, requires foreign companies to operate un-
der government contract rather than on the formerly pre-
vailing concession basis. Until contracts can be arranged,
probably in early 1961, existing company rights will con-
tinue to be honored. The foreign companies�Caltex, Stand-
ard Vacuum' and Shell= are less concerned over this law,
which they had long expected, than they are over the new fi-
nancial provisions decreed in August. According to one oil
company's estimate, the August decrees will raise its pay-
ments to the Indonesian Government from roughly 52 percent
to 75 percent of gross profits. (Page 5)
Laos: The membership of the Committee for Neutrality
and National Unity formed in Vientiane on 31 October ranges
from moderate supporters of Sou.vanna Phouma to members of
the Neo Lao Hak Sat (NLHS), the Pathet Lao political front.
Souvanna and NLHS leader Prince Souphannouvong are listed
as advisers of the organization. It is not yet certain which
group took the initiative in organizing the committee; but in
any event it is likely to harden the attitudes of the leaders in
Luang Prabang and General Phoumi's Revolutionary Committee
In Savannakhet, thus making more difficult a reunification of
non-Communist forces in Laos, (Page 6)
III. THE WEST
Guatemala: The 26 October coup in El Salvador has en-
couraged domestic opposition elements in neighboring Guate-
mala. These elements, which include extreme leftist and
Communist-infiltrated revolutionary factions, at the moment
2 Nov 60
DAILY BRIEF ii
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are disunited and probably incapable of staging a success-
ful coup against President Ydigoras. Salvadoran leftists
now appear influential in the new Salvadoran regime, how-
ever, and may eventually try to assist the Guatemalan
leftists. (Page 7)
Panama:Agitators in Panama apparently are not suc-
ceeding this year in efforts to organize anti-US demonstra-
tions like those which led to riots a year ago in the Canal
Zone during the Panamanian independence celebrations from
3 to 5 November, Nevertheless, small incidents or provoca-
tive actions by individuals could quickly lead to violence
among the volatile Panamanian slum dwellers living almost
on the Zone border. Criticisms of the "limited" route agreed
on by Zone and Panamanian officials for a peaceful Panamanian
flag march into the Zone have already been expressed by ele-
ments of Panama's politically dominated press and radid:-t
2 Nov 60
DAILY BRIEF iii
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Now, %iv;
Peiping Stands Firm in Dispute With Moscow
Following a period of almost six weeks during which
senior Chinese Communist representatives are believed to
have been negotiating with Soviet officials, Peiping--con-
trary to some Western press interpretations�continues to
stand firm in its dispute with Moscow. Chinese statements
on the occasion of the 10th anniversary of the entry of Chi-
nese forces into the Korean war reiterated Chinese beliefs
that the US is a "paper tiger" and that peace can be won only
through force. The latest issue of the Chinese party's major
theoretical journal, Red Flag, published on 31 October, in-
sists on the necessitTr�or Arco-fence in seizing state power and
implicitly criticizes Khrushchev's gradualist strategy.
The Red Flag editorial was apparently written to refute
a recent article in the Soviet party's theoretical journal, Korn-
munist. The Soviet article criticized the "dogmatist" (Chinese)
approach to Lenin's theory of revolution, accusing such dogma-
tists of ignoring the changes in the world since Lenin's time
and consequently of rejecting the "new propositions... and tac-
tics" of the world Communist movement.
In the course of its argument, the Red Flag editorial attacks
the basic Soviet contention that in the "new epoch," in which the
forces of socialism are superior to the forces of imperialism,
the world Communist movement can advance gradually, without
war, to a final triumph. Red Flag declares that this "new epoch"
of Communist superiority is "unprecedentedly favorable" not for
a gradualist strategy but for "proletarian revolution" in various
countries of the world, especially in the underdeveloped countries.
Delayed since mid-October, this issue of Red Flag prob-
ably reflects decisions reached at recent politburo discussions
in Peiping. The two politburo members believed to have been
recently engaged in discussions with Sayietrofficials: IVIos-
cow participated in these discussions.
The apparent lack of success of preliminary negotiations
with the Soviet representatives makes it unlikely that the sched-
uled Novemb er meeting of world Communist parties in Moscow will
CONFIDENTIAL
2 Nov 60
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succeed in achieving any meaningful compromise of oppos-
ing views, and even raises the possibility that the meeting
will be postponed. A Soviet presidium member denied to
Ambassador Thompson on 29 October that such a meeting
was scheduled. He stated that Communist representatives
were invited to the 7 November celebrations and that a de-
cision could be made then whether or not to hold a meeting.
CONFIDENTIAL
2 Nov 60
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"French" Afrecan *ders Attenipting to Mediate
Algerian Conflict
The 11 former French territories in Black Africa repre-
sented at the conference held at Abidjan, Ivory Coast, from
24 to 26 October agreed on a plan by which they will attempt
to bring France and the Algerian rebels together in new di-
rect talks, according to Ivory Coast leader Houphouet-Boigny.
Caught between nationalist pressures mobilized on behalf of
the rebels and French indications that economic aid may be
denied states which do not support France on Algeria at the UN,
the bloc of French-speaking states represented at Abidjan
clearly hopes such an initiative on its part may help to head
off, at least for this year, a "strong" Algerian resolution3
CIn a conversation with the American charge in Abidjan on
29 October, Houphouet confirmed that the conference had named
two mediatory delegations with a view to inducing both French
President de Gaulle and Algerian rebel leaders to show suffi-
cient "flexibility" to facilitate a resumption of cease-fire talks.
Houphouet emphasized, however, that the proposed demarchd to
the rebels in Tunis would be made only after the delegation to
Paris, which he himself is slated to head, is able to report some
progress. He said the African states involved--all of which are
members of the French-African Community except for Cameroun--
would have no alternative but to "do their duty" and support a
strong Algerian resolution at the UN should De Gaulle's attitude
to their intervention prove entirely negative:5
.'1'he French press has recently commented hopefully on the
possibility of Community mediation in the Algerian problem, but
French official,s have been cool to the idea. De Gaulle has in-
formed Houphouet that he would be pleased to discuss "general
problems between France and the African countries" as of 5 No-
vember--the day following De Gaulle's scheduled TV-radio ad-
dress, which is expected to deal at least in part with Algeria.
The African leader, however, has insisted that he is authorized
to discuss only the Algerian questioli.3
2 Nov 60
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vine
Nationalist China Supplying Arms to Its Irregular Forces
the
Nationalist Air Force had made an average of two flights a
month this year to resupply Nationalist irregular forces in
the Burmese-Thai border area. The planes land at a small
field in Burma under the control of the irregulars, but must
refuel at Bangkok for the return flight to Taiwan:3'
in line with previous reports that
Taipei was continuing to resupply its irregular forces. Na-
tionalist security chief Chiang Ching-kuo said on 28 October
that much flying from Taipei to Bangkok and the Burma bor-
der area had occurred in recent months and that some flights
had carried small arms which had been impounded by the Thais
but were released to the Nationalists a few months ago.i
Cahiang Kai-shek has shown increasing concern over the po-
litical situation in Laos and has offered the irregular forces
for use in Laos or in defense of the Burma-Thailand-Laos bor-
der area. In early October, he ordered a high-level intelli-
gence official to go to Southeast Asia to evaluate the situation
and probably to promote the use of the irregulars. However,
Chiang Ching-kuo has asserted that these forces would not be
used without consulting the United State-17._
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Trupe Nome
Indonesia Publishes New Petroleum Law
Indonesia's long-awaited new petroleum law, which was
made public on 1 November, requires foreign companies to
operate under government contract rather than on the formerly
prevailing concession basis. Until contracts can be arranged,
probably early in 1961, existing company rights will continue to
be exercised.
The foreign companies�Caltex, Standard Vacuum, and
Shell--in general approve of the law. Indonesia has been pre-
paring to rewrite the former Dutch mining laws since it achieved
independence in late 1949. During this period, it has refused
to grant any new concessions to foreign companies, thereby in-
terrupting the process of exploration and development as exist-
ing oil fields declined in production. The companies therefore
regard the new law as an opportunity to accelerate some of the
hitherto obstructed phases of their work.
Their principal concern, however, is over their financial
arrangements with the Indonesian Government. These are af-
fected both by the expiration of special tax and foreign exchange
arrangements favorable to the oil companies and by financial
decrees promulgated last August. One of the companies has esti-
mated that these changes will increase its payments to the govern-
ment from roughly 52 to 75 percent of gross profits. Financial
arrangements between the companies and the government are
still not settled, and actual bargaining probablv will take place
when the contracts are negotiated.
CONFIDENTIAL
2 Nov 60 CEKITD Al IKITCI I inckirc MI II I CTIKI
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The Situation in Laos
Vientiane radio announced the formation, on 31 Octo-
ber, of the Committee for Neutrality and National Unity.
Presumably intended to mobilize popular support of Sou-
vanna Phouma's policy of harmonizing the differences which
divide Laos, the committee's membership ranges from
Souvanna's moderate supporters in the center to members
of the Pathet Lao's political front--the Neo Lao Hak Sat
(NLHS)�on the extreme left. Captain Kong Le and several
of his lieutenants are included, and Souvanna and NLHS
leader Prince Souphannouvong are listed as advisers.
It is as yet unclear which group took the initiative in or-
ganizing the new committee. Douvanna had previously been
reported to be planning a new political party, but it seems un-
likely that he would have included the NLHS as a matter of
choice. It is possible that Kong Le and the Pathet Lao put
pressure on him to broaden the base of his contemplated party
and to transform it into a popular front groupj In any event,
formation of the committee would seem to reverse the recent
movement toward unifying the opposition to Kong Le and the
Pathet Lao.
Announcement of the new committee will almost certainly
harden the attitudes of the military leaders in Luang Prabang
and General Phoumi's Savannakhet Revolutionary Committee.
The Luang Prabang group, which includes General Ouane, the
armed forces commander, may construe the committee's for-
mation as sufficient evidence of Pathet Lao influence in Vien-
tiane to justify breaking away from the Souvanna government.
Phoumi, meanwhile, will probably seize on the committee's for-
mation as ample vindication of his refusal to come to terms with
Vientiane.
2 Nov 60
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Guatemalan Lists Encouraged by Salvadorant" oup
The 26 October coup in El Salvador has encouraged oppo-
sition elements in neighboring Guatemala and has generated a
number of rumors in Guatemala concerning an imminent coup
there. While these rumors are unconfirmed, their circula-
tion contributes to a climate of unrest in Guatemala, where
modified forms of a "state of siege" were enforced because of
political unrest between mid-July and mid-October. The Ydigoras
administration is currently weakened by a declining economic
situation that led the government to announce last month a dras-
tic budget cut and the reduction of salaries of government em-
p10yees.3
President Ydigoras has attempted to govern by relatively
democratic methods despite sporadic plotting against him both
by leftist, Communist-infiltrated revolutionary factions and by
rightist groups. Although Guatemalan leftists at the moment are
disunited and probably incapable of staging a successful coup,
leftists now appear influential in the new Salvadorn government
and may plan to assist their Guatemalan colleagues. If pro
Castro elements become entrenched in the new Salvadoran re-
gime, they would become a genuine threat to the Guatemalan and
other Central American governments. Cuban embassies, pres-
ently in El Salvador and Honduras, would probably step up their
covert aid and liaison to Central American revolutionary move-
mentgt;
Communist preparations
to exploit tne Saivactoran coup in Guatemala, plans
by Communist infiltrated labor and student groups to stage a
demonstration shortly, ostensibly to show solidarity with the
Salvadoran people but actually to attack Ydigoras' alliance with
the United States and to demand his resignation:3
(The ouster of Salvadoran President Lemus was a personal
blow to President Ydigoras, who had made every effort to strength-
en Lemus and to this end initiated a meeting with Lemus at the bor-
der less than three weeks before the coup":7
SECRET
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.'4I.�. VI A 1-11-44 V 1 I ri Ad
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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
Special Assistant for Security Operations Coordination
Chairman, Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Executive Secretary, National Security Council
The Treasury Department
The Secretary of the Treasury
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 Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
Assistant Secretary of Defense for 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 for 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
The Department of Commerce
The Secretary of Commerce
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
�ei9NFIDEALIIAL.
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