CENTRAL INTELLIGENCE BULLETIN - 1958/07/01

• Document Type: SPECIALCOLLECTION
• Keywords: 2018 Sanitization
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02987874
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 19
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: July 1, 1958

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1 July 1958
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CENTRAL
INTELLIGENCE
BULLETIN
DOCUMENT NO. _
NO CHANGE IN CLASS.
I I DECLASSIFIED
CLAOS. CHANGa) TO: TS SCA
NEXT REVIEW DA 5:
AUTH: I-IA
D/V _ REVIEWER:
-TOP-SECRET-
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1 JULY 1958
I. THE COMMUNIST BLOC
Ithrushchev may attend East German
party congress to show support of
Ulbricht.
Chinese Communists demand renewal
of talks with US at ambassadorial level.�
II. ASIA-AFRICA
Lebanon - Heavy fighting near Bei-
rut on 30 June. Opposition leaders
claim they can no longer count on
aid from UAR.
Turkey reinforces patrols on Syrian
border.
Sudanese premier says opposition has
offered to bring Sudan into UAR if
Nasir helps overthrow Khalil in 3
July vote.
Cyprus - EOM threatens new vio-
lence unless British talk with
Malcarios.
tyr
TOP SECRET
0 Morocco decides in principle to es-
tablish early diplomatic relations
with USSR and recognize Peiping.
� Indonesia - Menado dissidents with-
draw into hills for guerrilla action.
0 Taiwan - Chinese Nationalist vice
president becomes premier.
III. THE WEST
� France - Reshuffle of army leaders
suggests De Gaulle expects difficulty
lining up military support for Algerian
policy.
LATE ITEM
O Soviet offer to discuss economic
relations with Belgrade makes no
concession but seems intended to
ease tension.
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East Germany: Premier Khrushchev may attend the
East German fifth party congress which is to be held 10-16
July. This is suggested by an Austrian announcement that
le Chancellor Raab's visit to the Soviet Union, originally sched-
O n uled to begin 13 July, has been postponed one week because
Khrushchev "will be abroad." The Kremlin might wish to
demonstrate again is support for party leader Ulbricht.
(Page 1)
*Communist China: Peiping's declaration that the US
must resume Sino-American ambassadorial talks "within
15 days" carries an implicit threat that the Communists
0 ri may increase their pressure in the Taiwan Strait area.
(Page 2)
O/)
II. ASIA-AFRICA
Lebanon: Heavy fighting developed 10 to 15 miles south-
east of Beirut on 30 June. A UN source says rebel leaders
claim they can no longer count on UAR support, but a UN ob-
server report acknowledges presence of Syrian military per-
sonnel directing operations in Lebanon. General Shihab is
recruiting tribesmen for the army to keep them from joining
the rebels. (Page 3)
CENTRAL INTELLIGENCE BULLETIN
1 July 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
Turkey-UAR: In an attempt to insulate its southern bor-
der against UAR incursions, Turkey is moving a cavalry di-
vision, infantry elements, and small tanks to the area to
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DAILY BRIEF a 4,
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supplement gendarmerie patrols. Part of the border will
also be mined. The Turkish Government is irritated over
recent attacks by armed Syrian bandits which took place
15-25 miles inside Turkey. (Page 5)
(Map)'
Sudan-UAR: Prime Minister Khalil says opposition
political leaders have promised Nasir to bring the Sudan
into the UAR, provided he helps them oust the present pro-
Western coalition government. Khalil faces possible defeat
in a parliamentary vote set for 3 July on acceptance of the
government-sponsored American aid program. The opposi-
tion is making a major effort to buy Votes, probably using
Egyptian-supplied funds. (Page 6)
Cyprus: Communal clashes again broke out on 29 June
but were halted by British security forces. E01CA has in-
structed its followers to hold off temporarily, but threatens
to renew violence against the British unless London begins
direct negotiations with Archbishop Makarios on the question
of "independence" for the island. In Turkey the press is
less inflammatory, but mass meetings, with highly emotional
orators, continue to be held under tight security control.
Morocco-USSR: The Moroccan Government decided in
/, principle on 23 June on the early establishment of diplomatic
14) relations with the Soviet Union and on the extension of official
recognition to Communist China. (Page 7)
Indonesia: Dissident leaders, after evacuating Menado
apparently with most of their forces intact, have set up new
headquarters in hilly terrain to the south for the purpose of
lc conducting large-scale guerrilla warfare. The Chinese Na-
' tionalists are said to be planning to support this effort and
have already flown in some supplies and provided limited
air support. (Page 8)
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New Chinese Nationalist premier: The appointment of
Cheh"Chwm considered the, second most powerful man on
11 Taiwan, as premier of Nationalist China further bolsters
his prospects as successor to Chiang Kai-shek. The first
task of Chen, who presumably remains vice president as
well, probably will be to tighten the discipline of the ruling
Kuomintang, which in recent months has failed to support
Chiang on policy matters which he considered vital. 1
(Page 9)
France: Premier de Gaulle may anticipate stiffer op-
position from junior army officers, who favor a firm line
on Algeria. The premier seems to be making key personnel
appointments to lull and control, unrest among "the paratroop
colonels."
(Page 10) ss,
il *USSR-Yugoslairiai Moscow appears to have shifted from I
1
0 is designed to counter
1 1 precedes Nasir's visit to Tito ad is
its 77 -
ugh tactics with the Yugoslays in offering to discuss
charges that Soviet economic assistance is dependent upon
seveeal questions concerning ecoucmic relations. The move r()\ political considerations. It follows Gomulka's recent co
L promise on the Nagy issue and may also have been intended
as a tactical relaxationge of the bloc's political atmosphere.
(Pa 11)
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III. THE WEST
LATE ITEM
DAILY BRIEF iii
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1 AA A
I. THE COMMUNIST BLOC
Khrushchev May Attend East German Congress
Premier Khrushchev may attend the East German fifth
party congress, to be held from 10 to 16 July. This is sug-
gested by the Austrian announcement that Chancellor Raab's
visit to Moscow, originally scheduled to begin 13 July, will
be postponed for one week because the Kremlin leader "will be
abroad." Khrushchev has already gone to East Germany once
during the past year to support Ulbricht against strong in-
ternal party opposition.
Ulbricht's fight against his political opponents, which
was intensified by the Schirdewan purge in February, has
most recently been manifested by reorganization of the party
at the district level designed to present a unified front during
the congress. Ulbricht is said to fear that a continuing con-
troversy over the Schirdewan affair may erupt at the congress
and demonstrate his party's disunity to an embarrassing de-
gree.
Ulbricht, apparently emboldened by Nagy's execution,
reportedly would like to bring to trial at least one Schirde-
wan sunnorter former Security Minister Wollweber.
SECRET
1 July 58
CENTRAL INTELLIGENCE BULLETIN Page 1
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%..A../1 NI" IL/Cal I ItL.
mar' Moir'
Peiping's Demand for Sino -American Talks
Communist China's official warning on 30 June that
the United States must resume talks at the ambassadorial
level "within 15 days" or Peiping will regard the talks as
broken off carries an implied threat of increased Commu-
nist: pressure in the Taiwan Strait area. The statement
charges that continuing US "occupation" of Taiwan is "a
naked act of aggression... and the Chinese people have the
full right to take .whatever measures to repulse it."
Sino -American ambassadorial talks were carried on for
more than two years at Geneva, but have been in abeyance
since last December when Ambassador Johnson was reas-
signed. The Chinese have refused to meet with an American
below the rank of ambassador.
In its note, delivered to the US Consulate General in
Geneva and broadcast over Peiping radio, Peiping pro-
claimed that "the Chinese people are perfectly strong
enough to liberate their territory of Taiwan" and that the
US can only suffer "isolation and defeat" in its policy of
"enmity" toward Communist China.
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TOP SECRET
II. ASIA-AFRICA
Lebanese Situation
Kamal Sumblatt's Druze forces on 30 June launched an at-
tack against progovernment irregulars in the mountains five
miles east of the Beirut International Airport. Heavy fighting
began in the early morning hours and continued throughout the
day, with the Lebanese Air Force mounting rocket attacks
against the invading Druze. American and British women and
children were hurriedly evacuated from the area.
Jumblatt is disgruntled
with rebel leaders Saib Salam in Beirut and Rashid Karami in
Tripoli because of their failure to join in an all-out offensive
against Beirut. Many opposition fighters are also said to be
discontented with their leaders, who are not actually fighting.
The followers of one Shia Moslem leader are disgruntled by
Syrian aid to Sunni Moslems, who, in turn, are alarmed at ,e
large arms deliveries to Lebanese Druze. Another indication
of dissension within rebel ranks is the public defection of the
son of a prominent Shia Moslem antigovernment leader f-orla
southern Lebanon.
Army commander General Shihab has reached an agree-
ment with tribal leaders in the Biqa Valley whereby tribes-
men will be "inducted" into the army as reservists. For the
Lebanese military forces, the arrangement will prevent rebel
Inroads among friendly and uncommitted tribesmen and will,
increase the rebel difficulties in controlling the northern Biqa.
Basically, the arrangement is to bribe the tribes.
Prisoners interrogated by the UN observation group have
stated that Syrian military personnel have been actively en-
gaged in operations against Lebanese security forces, as well
as carrying out demolition activities.
the UN group, after contacts with rebel leaders, claims
they had received word they could "no longer depend
on any assistance from the outside." UN Secretary General
Hammarskjold has concluded from this that orders have gone
1 July 58
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DUrr
,itare Nine
out from Nasir to halt UAR aid to the rebels and that Nasir's
trip to Yugoslavia is "a good sign." The secretary general's
optimism appears to be unwarranted, however, since UAR
intervention in Lebanon was stepped up when Nasir visited
the USSR, and the rebels have sufficient supplies of materiel
to continue their operations for some time.
Lebanon's economy has been further weakened under the
pressure of continuous stagnation as a result of the rebellion.
Employers who have been paying idle and near-idle workers
in an effort to keep them from joining street mobs are now
becoming unable to do so. Government officials believe that ,
soon as many as 20,000 workers will be on the streets without
any means of support.
Large numbers of merchants and industrialists have nearly
exhausted their liquid funds and are'borrowing to meet current
expenclitures. The banks, however, are unable to supply funds
in the required quantities. The central bank, in an effort to
ease the liquidity shortage, reportedly has expanded the note
issue by about 10 percent in the past few weeks and could in-
crease the notes in circulation by an additional 14 percent
within the next several days. Should these actions fail to halt
the drop in liquidity, the Lebanese pound could quickly suffer
a crisis nf ennfirieneP and a run for foreign exchange might oc-
cur.
TOP SECRET
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1 JULY 1958
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Turkey Moves Troops to Counter Syrian Banditry
The Turkish Government is secretly moving a cavalry
division from northeastern. Turkey to the south-central
border with Syria to reinforce gendarmerie patrols and to
prevent the UAR from creating disorders. The transfer
will be completed by 20 July
Some infantry elements from the VII Corps
are also being shifted to the border area, 62 miles of which
are being mined eastward from the Euphrates River. Small
tanks will also be used to patrol the border.
These movements are prompted by recent armed bandit
attacks on trucks, buses, and cars on the road between Urfa
and Mardin near the Turkish-Syrian border, Some of the
bandits who came from Syria were carrying Czech revolvers
when arrested.
Prime Minister Menderes called a special session of the
cabinet to discuss the incidents. The general problem of
border security was considered by a meeting on 26 June of
high-ranking military officers, including members of the
Turkish general staff, the deputy commander of the gendar-
merie, and the commanders of the First, Second, and Third
Armies. The minister of the interior and the commander oi
the gendarmerie have been in southern Turkey since 24 June.
In addition to being highly incensed over this cross-border
banditry, Turkey seized on it probably as justification for
further strengthening border defenses in an area where mech-
anization would be of little value. Turkey fears that if the Leb-
anese situation continues to deteriorate, it too may be faced
with danger from Syria.
$'1'77
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Naze ,ftee
Sudanese Government Under Egyptian Pressure
The coalition government of Sudanese Prime Minister
Khalil will undergo a severe test of strength when it at-
tempts to push through approval of the American aid pro-
gram in Parliament on 3 July. Khalil appears confident of
winning by at least a small majority, but an intense struggle
is going on to win the votes of wavering or uncommitted mem-
bers of the 173-man house of representatives. Khalil has
stated that opposition leaders have sent a declaration to UAR
President Nasir urging his assistance and promising in re-
turn to join the Sudan with the UAR if the present government
is overthrown. They are alleged to be offering bribes of as
much as $1,500 for each vote against American aid, with
funds probably furnished by the UAR.
Failure to win the Parliament's approval would probably
mean the end of the present coalition made up of Khalil's
Umma party and the People's Democratic party. In this
case, Khalil, as leader of the largest party in the govern-
ment, might be compelled to try to form a broader "nation-
al" government, including participation by the pro-Egyptian
National Unionist party, with a decidely more "neutralist"
posture. A victory by only a small majority might also be
followed by a change in the coalition, with Khalil bringing
pro-Umma southerners into the government and expelling
the dissident members of the People's Democratic party.
SECRET
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aL.A....11.0
Noe %Iwo'
Morocco Considering Early Exchange of Ambassadors With
'USSR and Communist China
The Moroccan Government decided in principle on 23
June to establish diplomatic relations with the Soviet Union
soon, The govern-
ment is also expected to announce "official recognition" of
Communist China in a few days; diplomatic relations are
expected soon thereafter.
Moscow will probably press for immediate exchange of
diplomatic missions, once Rabat agrees to relations, and
can be expected to move quickly to persuade Tunisia to follow
suit. Soviet embassies in both Rabat and Tunis would make
possible closer coordination of the USSR's policies in France
and North Africa. The Soviet and Chinese Communist mis-
sions would be the first bloc missions in North Africa.
Morocco's recognition of Communist China might well stimu-
late Peiping to press other African countries to consider
similar steps.
In April, a Moroccan economic delegation negotiated a
trade agreement in Moscow, and a second Moroccan economic
mission left last week for the USSR to discuss implementation
of the trade agreement. A three-member Soviet economic
mission was recently established in Casablanca and is at-
tempting to expand the import of Soviet products�notably pe-
troleum and lumber--by Morocco.
A Moroccan parliamentary delegation made an official
visit to Peiping in April 1957, and a Moroccan economic mis-
sion concluded a trade agreement with Communist China in
October. The Moroccan delegation to the United Nations in
September came out in favor of Peiping's admission to the
United Nations.
SECRET
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Situation in Indonesia
The North Celebes dissidents, after evacuating Menado
on 26 June with most of their forces, have established new
headquarters in hilly terrain about 20 miles south of their
former capital from which they plan to conduct extensive
guerrilla warfare. In Djakarta, Prime Minister Djuanda
admitted on 28 June that the government still faces heavy
opposition in North Celebes despite the fall of Menado.
The dissidents are being aided by the Chinese Nationalists
in their effort to continue armed opposition to the Djakarta
government. Chiang Ching-kuo, Nationalist China's security
chief, reportedly stated his government would give the dis-
sidents as much support as possible and would continue to
use Sanga Sanga air base in the southern Philippines for re-
fueling. Some aid, mostly arms and medical supplies, has
already been airdropped,
a Chinese Nationalist B-26 transited Sanga
Sanga on 26 and 28 June.,
In Sumatra, the government apparently has sent addition-
al troops to the Medan area in an effort to control dissident
guerrilla activity there. Army Chief of Staff General Nasution
ordered
armed guards placed on estates to protect them from dissident
attacks, now increasing in intensity. He said orders had al-
ready been given to prevent damage to oil fields.
SECRET
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Nekol
New Chinese Nationalist Premier
Chiang Kai-shek's selection of Vice President Chen Cheng
to replace O. K. Yui as Chinese Nationalist premier probably
is designed to re-establish discipline within the ruling Kuo-
mintang and assure that party members in the legislature
will support the government. The esteem Chen enjoys as a
highly respected old-line party leader should aid him in ac-
complishing this task.
Chen's nomination further strengthens his position as
Chiang's successor. Chiang last October appointed Chen deo.,
uty director general of the Kuomintang, apparently with the
intention of naming Chen to succeed him as leader of the party
as well as to the presidency. Chents new position, which he
presumably will hold along with his other posts, may help fore
stall a power struggle over the succession.
Yuits ouster had been expected since last February, when
Chiang reprimanded him for "dereliction of duty" following
his impeachmeLit by the Control Yuan--the inspectorate branch
of the government.
Yuirs resignation will be followed by some other
cabinet changes, but there will not be a large-scale reorgani-
zation.
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1110 THE WEST
De Gaulle Moving to Tighten Control Over Army in Algeria
Premier de Gaulle's sudden decision to replace army
Chief of Staff Lorillot by General Andre Zeller may reflect
concern over repotted unrest among young officers in Al-
geria. Armed forces Chief of Staff Ely is said to be "very
upset" at the state of mind of the junior officers, who are
increasingly mixing in politics. Lorillot is unpopular with
many officers because he had accepted Ely's job under Pre-
mier Pflimlin. Zeller had resigned in 1955 from the post
to which he has just been reappointed in protest against the
lack of government support for the army and operations in
Algeria.
Ely was very displeased by General Salan's recent ac-
tion in appointing generals as prefects in Algeria without
government authorization, Salan is reported unduly influenced
by a group of colonels who engineered the 13 May move. Ely
said General Pierre Garbay, a devoted Gaullist, may be ap-
pointed chief of military operations in Algeria as a counter-
balance to Salan. Garbay is a stern disciplinarian who could
be expected to crack down.
Jacques Soustelle told CBS correspondent David Schoenbrun
on 27 June that he expects shortly to be named minister of
state for Algerian affairs. Such an appointment would be
hailed by the extremist settler and military elements in Al-
geria, who are unaware that Soustelle actually favors eventual
internal autonomy for Algeria.
SECRET
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Noe
LATE ITEM
USSR Proposes Economic Talks with Belgrade
Moscow's offer to Belgrade to discuss "several questions
concerning economic" relations in light of the USSR's 27 May
suspension of its credit agreement with Yugoslavia repre-
sents a shift from the rough tactics Moscow has been using
recently in an effort to forge bloc unity. The Soviet pro-
posal apparently was timed to precede Egyptian President
Nasir's visit with Tito in order to demonstrate that economic
relations with Moscow are not dependent on political con-
siderations.
The tone of the announcement is one of reasonableness
and correctnes bearing out Khrushchev's statements on 3
June at t__e Bulgarian party congress that even if party re-
lations with Yugoslavia were impossible, he wanted "normal
state relations." The Albai ians and Czechs, in a joint com-
cLunique issued on 30 June at the conclusion of a six-day
visit by the Czech premier to Tirana, said that they had
agreed to maintain state relations with Yugoslavia as long
as they are both "mutually profitable" and "in agreement
with the interests of the socialist camp."
The 27 May loan suspension had little effect on current
Yugoslav - Soviet bloc economic relations. Trade on cur-
rent account was not interrupted, and only Soviet and pos-
sibly East German credits for economic development were
suspended. The Yugoslays had scheduled the utilization
of only a portion of these credits, possibly because of cau-
tion engendered by the USSR's suspension of credits in 1957
during an earlier stage of the ideological conflict. The
Soviet announcement of 30 June does not reinstate the sus-
pended credits. The new proposal repeats an offer-- '
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originally made when the credits were canceled--to discuss
with the Yugoslav Government the cash sale or barter of
those items obligated or contemplated under the credits.
Following Gomulka's recent compromise statement on
the Nagy question, the Soviet proposal to the Yugoslays may
have also been intended as a tactical relaxation of the politi-
cal atmosphere in the bloc. Polish fears that Moscow intends
to put immediate economic pressure on Warsaw to conform
fully to bloc policies may be somewhat relieved. The Poles,
however, are unlikely to assume that any slackening has oc-
curred in Moscow's basic policy designed to achieve bloc
unity.
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