CURRENT INTELLIGENCE BULLETIN - 1957/01/15

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03161976
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 12
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: January 15, 1957

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CURRENT
INTELLIGENCE
BULLETIN
3.3(h)(2)
3.5(c) 15 January 1957
Copy No, 1.31..
DOCUMENT NO.
NO CHANCE IN CLASS.
II I DECLASSIFIED
CLASS. GRANC-IED
NEXT REVIEW DATE:
AUTH:
DAT 6 REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
1
TOP SECRET
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CONTENTS
1. EGYPT ORDERS HALT OF ALL DISCUSSIONS PENDING
ISRAELI WITHDRAWAL :page 3).
2. SITUATION IN ALGERIA
(page 4).
3. CHINESE ECONOMIC PLAN ALLEGEDLY UPSET BY
SATELLITE UNREST (page 5).
4. SYRIANS TO HOLD "UNION" DISCUSSIONS WITH EGYPT
(page 6).
5. UN OBSERVER COMMENTS ON HUNGARIAN POLITICAL
SCENE (page 7).
6. INDIA REMAINS OPPOSED TO A KASHMIR PLEBISCITE
(page 8).
7. MISSIL7ASRITALKS WITH BRAZIL SEEN FACING COL-
LAPSE (page 9).
8. LATIN AMERICA CO-ORDINATES PROPOSALS FOR INTER-
AMERICAN MEETINGS (page 10).
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1. EGYPT ORDERS HALT OF ALL DISCUSSIONS PENDING
ISRAELI WITHDRAWAL
Egyptian foreign minister Fawzi told
Ambassador Hussein on 12 January
that he had received instructions to in-
form UN secretary general Hammar-
skjold that "there will be no further dis-
cussions on any subject as long as Israel remains in Egypt."
Comment
According to press reports, the Israeli
cabinet, which met on 13 January to ais-
cuss Israeli withdrawal policy, has decided to halt Israeli
forces at a line 16 miles on the Egyptian side of the 1949 armi-
stice lines.
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2. SITUATION IN ALGERIA
Tension in Algeria has reached the stage
where rash acts by either Moslems or
Europeans designed to gain an advantage
just before or during the forthcoming UN
debate on Algeria may precipitate widespread massacres,
in this eventuality the attitude of the French mili-
tary�particularly its willingness to restrain settlers bent
on reprisals�would be in doubt.
Comment
Riots may result if the French general in charge of security in
the Algiers area carries out his threat of 13 January to force
the opening of any Moslem shops which obey the rebels' order
for an eight-day general strike coincident with the UN debate
late this month.
French premier Mollet conceded
on 8 January that an "explosion" in Algeria was possible at
any moment and could lead to 40,000 or 50,000 casualties in
Algiers alone within 24 to 48 hours, with comparable results
in other large cities. In such an event, simultaneous massacres
of French residents in Morocco and Tunisia would also be likely.
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'L.
3, CHINESE ECONOMIC PLAN ALLEGEDLY UPSET BY
SATELLITE UNREST
The USSR has told China that it is unable
to meet the increased demands of China's
Five-Year Plan.
in East Berlin.
allure of the Satellites to
deliver promised machinery and manufactured goods has
caused China to re-examine its current plan and to revise
downward the industrial section of the Second Five-Year
Plan, In Warsaw Chou reportedly is to explain that Polish
failure to supply coal to East Germany is reducing East
Germany's ability to meet China's needs, and he will attempt
to induce Poland to maintain its previous trade position with-
in the bloc by promises of Soviet and Chinese loans and ma-
terial assistance.
Comment
The Soviets last August cut Chinese pro-
posals concerning the level of Soviet
support for China's Second Five-Year Plan,
This is the first report suggesting
that the USSR may renege on its August commitment.
Previous reports have tied possible revi-
sions in Chinese plans to events in Eastern Europe and to im-
balances and shortages which developed in the Chinese economy
during 1956. It is likely that Chou En-lai, in connection with
his current attempts to bolster bloc political solidarity, is
trying to salvage what he can of Satellite commitments to
China and to ensure fulfillment of industrial deliveries from
the USSR.
The USSR has been providing China with
a yearly total of about $800,000,000 worth of industrial plants,
machinery and transportation equipment; the Eastern European
Satellites have provided an additional $400,000,000 annually.
East Germany and Czechoslovakia are responsible for about
70 percent of the Satellite exports. Peiping has consistently
criticized delays in the delivery of Satellite industrial goods.
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4. SYRIANS TO HOLD "UNION" DISCUSSIONS WITH EGYPT
A Syrian committee headed by Minister
of State Khalid al-Azm was scheduled
to depart for Cairo on 14-15 January to
discuss Syrian "union" with Egypt, ac-
cording to the American embassy in Damascus.
Azm told Ambassador Moose "federa-
tion" would be a more accurate discription than "union;' as
Syria would retain its sovereign entity. Azm thought unifi-
cation of "currency and commerce" was remote, but closer
co-ordination with Egypt in military and foreign policy was
desired now. He thought a joint committee on foreign policy
would be formed at cabinet minister level.
Comment
Syrian-Egyptian talks on union were he]Id
shortly before the Suez dispute. Cairo,
however, while publicly lauding Egyptian-Syrian union, pri-
vately takes a reserved view.
The simultaneous presence in Cairo of the
Jordanian delegation seeking Arab financial assistance sug-
gests that the Jordanian delegation may join the Egyptian-
Syrian talks.
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CONFIDENTIAL
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A ILL-, A
5,
ON HUNGARIAN
POLITICAL SCENE
Hungarian premier Kadar, still a national
Communist, hopes to retain the strictly
economic concessions promised during the
revolution but has no intention of imple-
menting any significant political concessions in the near future,
according to UN deputy secretary general De Seynes, who re-
cently returned from Hungary. De Seynes,
feels that Kadar is convinced that any
alternative to the present government would lead inevitably to
a renewed blood bath and complete chaos.
According to De Seynes, there are no Hun-
garian Communists left who are in sympathy with the USSR;
Kadar himself is closely watched by Soviet bodyguards. The
regime is totally disorganized and there is lack of contact be-
tween cabinet ministers and their staffs.
De Seynes was told by non-Communists in
Budapest that a general uprising had been planned for mid--
December, when either he or Hammarskj old was initially
scheduled to arrive, but subsequently the freedom fighters de-
cided on an undeclared truce with the regime, apparently in
order to minimize the hardships of a cold winter. A visit by
Hammarskj old now appears feasible, but in De Seynes' opinion,
it would be politically useless since it would give the regime
a measure of UN approval.
Comment Mounting economic problems and increased
difficulties with the workers during the past
several days have already caused the Hungarian regime to step
up its repressive tactics.
Premier Kadar has been forced by the USSR
and the pressure of events to act contrary to his earlier sym-
pathies with national communism and he is unlikely to push for
genuine Hungarian independence so long as the situation remains
chaotic. The re-establishment of order, however, could lead
to his reassertion of national Communist tenets and consequent
friction with Moscow.
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1 -
INDIA REMAINS OPPOSED TO A KASHMIR PLEBISCITE
Both Krishna Menon in New York and
Raghavan Pillai, secretary general of
the Indian Ministry of External Affairs
in New Delhi, have bluntly informed
American diplomats that India has no in-
tention of giving up its portion of Kashmir.
Both men were also cool toward the idea of
another visit to the area by a UN represent-
ative seeking to arrange for a plebiscite.
Menon indicated his government would re-
luctantly accept a Soviet veto if this was
the only way to avoid UN Security Council
action.
Menon said he understood that Nehru and
President Eisenhower had agreed the Kashmir situation should
not be stirred up, and expressed his hope that the UN would
take no action on the case.
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7, MISSILE-BASE TALKS WITH BRAZIL SEEN
FACING COLLAPqv
President Kubitschek told Ambassador
Briggs on 12 January that Brazil's pres-
ent counteroffer on Washington's request
for a missile-tracking base may be with-
drawn and negotiations broken off unless
agreement can be reached before the Brazilian congress re-
convenes on 1 February, He said congressional pressure
for a voice in the matter, backed by nationalist and Commu-
nist agitation, would probably make agreement impossible
after that date.
Ambassador Briggs believes a breakdown
could seriously prejudice Brazilian-American relations as
well as Kubitschek's domestic position, but notes that Kubit-
schek may assume the United States is forced to accept his
price.
On 11 January, Brazil amended the terms
of its 17 December acceptance of the American request by
adding a clause that would commit the United States to con-
clude separate agreements promising "accelerated" economic
and military aid. It was hinted that Kubitschek might send
President Eisenhower a note listing Washington's "overdue
obligations" in these fields.
Kubitschek promised to take over the
negotiations from the Foreign Ministry and await a formal
comment from Washington.
Comment Kubitschek once before, following Presi-
dent Eisenhower's personal note of 15
December, seemed determined to take charge of the negotia-
tions. However, after pushing through cabinet approval, he
turned the matter back to the Foreign Ministry and during sub-
sequent delays resumed his previous equivocal position in the
face of nationalist and Communist agitation and cabinet pres-
sure for economic bargaining,
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8. LATIN AMERICA CO-ORDINATES PROPOSALS FOR
INTER-AMERICAN MEETINGS
The Latin American ambassadors in
Washington met on 8 January at the
request of the Brazilian ambassador
to co-ordinate the Latin American po-
sition for the meeting of the Inter-
American Committee of Presidential Representatives sched-
uled for 28 January,
Urrutia said the majority agreed to
insist on two or three "fundamental proposals"--namely,
higher prices for exports to the United States and credits
for economic development�rather than "showing interest
in several dozen proposals, which would merely enable the
US to choose and approve the least expensive'?
the State :Department hoped to support
"a few secondary proposals with the ridiculous sum of
$5,000:'
the Brazilian
ambassador quoted a letter he had sent to Vice President
Nixon, pointing out "dismay" at US aid proposals for the
Middle East in contrast to the "absolute neglect of Latin
American problems:'
Comment The Inter-American Committee, which
first met in September, was established
following the meeting of American presidents in Panama last
July to seek means for making the Organization of American
States a more effective instrument of social and economic co-
operation.
Brazil has played an influential role at
inter-American meetings. Its sponsorship of the meeting on
8 January may have been prompted in part by dissatisfac-
tion with the extent of US economic aid and with the "pre-
conditions" which keep Brazil from drawing on Export-
Import Bank credits granted last July. This dissatisfac-
tion has been reflected in negotiations for a US missile
tracking site.
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