CENTRAL INTELLIGENCE BULLETIN - 1959/10/27

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03031254
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: February 25, 2020
• Document Release Date: February 27, 2020
• Publication Date: October 27, 1959

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27 October 1959
3.5(c)
3.3(h)(2)
Copy No. C
CENTRAL
INTELLIGENCE
BULLETIN
DOCUMENT NO. ...
NO CHANGE IN CIA, S
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(:LAS:,'3, CHANGED TO: if 4.15
NEAT REVIEW DATE: G.
AUTH: I-IR 70-2
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REVIEWER:
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27 OCTOBER 1959
L THE COMMUNIST BLOC
Khrushchev shows interest in Shah of
Iran's proposal to provide written guar-
antee against construction of missile
bases in Iran.
II. ASIA-AFRICA
Iraqi authorities arrest UAR contact
with one element of nationalist plotters.
Iran may push for increased share of oil
profits.
Indonesian foreign minister, angered by
his treatment in Peiping, states Indone-
sia will have to review its foreign
policy.
III. THE WEST
�Cyprus--Communal relations continue
strained, foreshadowing increased dif-
ficulties for constitutional negotiations.
LATE ITEM
Peiping offers to return captured Indian
troops.
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CENTRAL INTELLIGENCE BULLETIN
27 October 1959
DAILY BRIEF
L THE COMMUNIST BLOC
USSR-Iran: ikhrushchev, in a talk with the Iranian ambas-
sador on 16 October, expressed interest in the Shah's proposal--
made on 23 September to the Soviet ambassador in Tehran--to
give the USSR a written guarantee that Iran would not allow mis-
sile bases on its territory, but said he must "consider the matter
with his government." Ithrushchev, who probably regards the
offer as a sign of weakness, may have delayed a formal response
in the hope of drawing further concessions from Tehra,n3
(Page 1)
II. AM-AFRICA
Iraq: The UAR's contact in Baghdad with a nationalist mil-
itary group, planning an anti-Qasim coup was arrested, along
with several Baathists, on 25 October,
Iraqi questioning of this con-
tact probably will elicit information concerning his implication
with UAR intelligence and will intensify the Iraqi-UAR feud.
Page 2)
Iran: he Shah may push for a change in the 50/50 profit-
sharing formula of Western oil companies in Iran. The Shah
recently told the American ambassador that a cut in American
aid plus the drop in expected oil revenues, due in part to price
cuts earlier this year, will present a critical budget situation.
If tentative plans by one oil company to cut prices of Iranian oil
still further and hence reduce Iranian profits become known,
government pressure on the Western oil companies is likely.
(Page 3)
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Indonesia: I-Foreign Minister Subandrio has told the American
ambassador that Indonesia will have to review its foreign policy in
view of Chinese Communist threats and abuse during his recent trip
to Peiping. Subandrio, who was outraged and terrified by Peiping's
attitude, added, however, that China was a "big powerful neighbor";
he did not see how at present Indonesia could abandon its independ-
ent foreign policy, but adjustments in degree and attitude would cer-
tainly be made. Subandrio claimed he has the support of President
Sukarno, who has been reported shocked over the Chinese attitude.
Subandrio pleaded for US support and backing during the coming
years. (Page 4)
III. THE WEST
Cyprus: (London officials believe the suspended work of the
commission charged with drawing up a constitution for the Cypriot
Republic will be renewed shortly, but all indications point to an
atmosphere in which negotiations will be difficult. Communal re
lations on Cyprus remain strained despite the action of Archbishop
Makarios and Turkish Cypriot leader Kuchuk in issuing a joint
appeal to their followers for the surrender of illegally held arms./
LATE ITEM
*Sino4ndian Border Dispute: A Chinese Communist Foreign
Ministry statement of 26 October stiffly insists responsibility for
the latest clash with Indian troops in Ladakh rests with the Indians,
but the statement concludes on a moderate note. Apparently con-
cerned about the effect of the incident on Indian official and public
opinion, Peiping expresses the hope that New Delhi will "refrain
from any words and deeds further harming relations between the
two countries." As a demonstration of their "traditional friendship,"
the Chinese offer to release Indian personnel captured in the inci-
dent. In words tiimilar to those recently used by Mao Tse-tung in
conversation with Indian Communists, the statement/restates Pei-
ping's willingness to negotiate the border dispute Ili a "favorable
atmosphere."
27 Oct 59
DAILY BRIEF
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I. THE COMMUNIST BLOC
Khrushchev Defers Action on Shah's Proposal
CPremier Khrushchev, in a talk with Iranian Ambassador
Masud-Ansari on 16 October, expressed interest in the Shah's
proposal to give the USSR a written guarantee that Iran would
not allow missile bases on its territory, but deferred giving a
formal response, saying he wanted to take the matter up with
"his government." According to several Iranian accounts of the
talk--none of which came directly from Ansari--Khrushchey
also criticized Prime Minister Eqbal for his "anti-Soviet" state-
ments while attending the recent CENTO meeting in Washingtoq
(the proposal, which was broached by the Shah to Soviet
Ambassador Pegov in late September, is intended to restore
Soviet-Iranian relations to the "normal" status which existed
prior to the breakdown last February of talks for a nonaggression
pact. Khrushchey's delay in responding to Ansari, who reiterated
the offer, may reflect caution induced by the Shah's behavior in
causing the failure of the talks in February and confidence that
Moscow can draw further concessions from Tehranj
[The Soviet premier probably regards the offer as evidence
of the effectiveness of the prolonged Communist-bloc radio prop-
aganda campaign against the Shah's regime. These radio attacks
were temporarily relaxed in September concurrent with Pegov's
return to his post after an extended absence. Iranian officials
are less concerned now with the propaganda attacks, apparently
because public interest in them has diminishedl
The Shah, who discussed the Khrushchev-Ansari talk with
Ambassador Wailes on 23 October, noted that Khrushchev had
directed his fire against the American-Iranian defense agree-
ment. The Iranian ruler said he interpreted Khrushchev's re-
action as evidence that Soviet leaders look on the agreement as
an obstacle to Soviet aggression against Iran, either directly or
a "possible indirect attack by Afghanistan or Iraa with Soret
volunteers?
27 Oct 59
CENTRAL INTELLIGENCE BULLETIN Page 1
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II. ASIA-AFRICA
UAR Intelligence Contact Arrested in Baghdad
Iraqi security authorities have arrested a number of nation-
alists and Baathists in Baghdad, including the UAR's contact
with the military group which had requested UAR military as-
sistance on an anti-Qasim coup,
On 24 October, Cairo had apparentlyly ordered
$2,800 to be paid to this agent to pass along to the conspiratorial
group.
the coup had been postponed,
Meanwhile, the UAR, anxious concerning its
shipments of arms from Syria to the Baathists, requested an ac-
counting from them on 24 October to ascertain how much of the
equipment had been intercepted by the Iraqi security authorities
Iraqi forces in the Basra area have been placed on the high-
est state of alert because of exaggerated reports that Iran is
massing troops in the Abadan and Muhammara areas. The ru-
mor of large troop concentrations stems from increased Iranian
security measures connected with the current dispute with Iraq
over navigation on the Shatt al-Arab, which connects the Persian
Gulf with the Tigris and Euphrates Rivers. An Iraqi coastal
artillery battery has been ordered to the Basra area, and air
reconnaissance of the Shatt al-Arab area is to be conducted twice
a day. However,
the Iraqi Foreign Ministry would take up the matter.
TOP RET
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Shah May Push to Revise Oil Profit-sharing Formula
the Shah, concerned over the 1960 Iranian budget, recently
told American Ambassador Wailes he was considering a new profit-
sharing formula for the consortium of Western companies operat-
ing nearly all of Iran's oil industry. The Shah anticipates a critical
budget situation, because $30,000,000 worth of American budget
support provided in 1959 is not expected for next year. In addition,
1959 saw a $25,000,000 bonus payment by the Pan American Oil
Company for an oil concession; similar bonus payments are not
likely in 1960-4
scussions for Iran's next budget beginning in March are al-
ready under way. Since most budget revenue sources are fairly
stable, Tehran can gain additional funds only from the US Govern-
ment or from the oil companies. The ambassador has already
told the Shah that American aid "would be less than last year and
probably considerably less." It appears likely, therefore, that the
Shah will press for additional oil revenues from either increased
production or from a change in the profit split from the present
50/50 arrangement to something closer to the Venezuelan pattern
of about 60/40 in favor of the government. The Shah asked whether
increased purchases of Iranian oil were possible at the expense of
Iraq and Kuwaiq
*.ile Iranian oil production is likely to continue to increase
substantially, revenues may not increase proportionally. Price
cuts made on Iranian crude oil earlier this year reduced expected
revenues sharply; but total revenues are certain to exceed the
$245,000,000 received in 1958_4
World crude prices continue to be soft, and at least one oil
company in the consortium has tentative plans to reduce the price
of Iranian crude oil even further in an effort to increase sales.
Such a price cut if implemented would also reduce Iran's share of
the profits and could signal the beginning of government-inspired
agitation against the consortium with the ultimate goal of substan-
tially changing the present government-company relationship.]
SE
27 Oct 59
CENTRAL INTELLIGEtsICE BULLETIN
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Indonesia Will Review Foreign Policy but Foresees
No Drastic Change
[Indonesian Foreign Minister Subandrio has told the American
ambassador that Djakarta must review its foreign policy in view
of his experiences in Peiping in early October. He characterized
Peiping's attitude as alternately patronizing and abusive over the
issue of Indonesia's treatment of the Overseas Chinese. Subandrio
said, however, he does not know what steps to take, because China
is a big and powerful neighbor. He did not see how at present
Indonesia could abandon its active, independent foreign policy,
although he felt "adjustments in degree and attitude" would cer-
tainly take place-.1
Apparently later in the conversation, Subandrio, long regarded
as a flexible proponent of an independent foreign policy for Indonesia,
told the American ambassador that if it were not for Indonesia's
claim to West Irian (Netherlands New Guinea), a drastic change
in foreign policy would certainly take place. He stated that, un-
fortunately, Indonesia continues to require the support of the
Soviet bloc on this question:7
Waandrio said he has not retreated on Indonesia's program to
ban alien merchants in rural areas�the issue underlying present
Sino-Indonesian difficulties. In carrying out this program, he feels
he has the support of President Sukarno, who has been shocked by
the Chinese attitude.
-
(Apparently the Indonesian Government plans to proceed with im-
plementation of the ban, which is to be completed by 1 January. Su-
bandrio may hope that Peiping's threat of economic retaliation--to be
waged through Overseas Chinese in Malaya, Singapore, and Indo-
nesia�either will not materialize or will be less effective than pic-
tured by Peiping.-/
27 Oct 59
S ET
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Nopte Now
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
Office of Defense and Civilian Mobilization
Director, National Aeronautics and Space Administration
Special Assistant for Security Operations Coordination
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 Economic Affairs
The Deputy Under Secretary for Political Affairs
The Deputy Under Secretary 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
Commandant, United States Marine Corps
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
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
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