CURRENT INTELLIGENCE BULLETIN - 1957/01/25

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03161983
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: January 25, 1957

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Copy -No. 131
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7 CURRENT 1(..
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INTELLIGENCE
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OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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CONTENTS
1. NASR THREATENS TO HALT CANAL CLEARANCE
(page 3).
2. SUEZ CANAL FEES SUGGESTED AS REPAYMENT FOR SOVIET
GOLD LOANS (Top Secret Eider) (page 4).
3._BRITAU OUTLINES PLANS FOR DEFENSE ECONOMIES
(page 5).
4. POSSIBLE SOVIET AIR-TO-SURFACE MISSILE DELIVERY
OF NUCLEAR WARHEAD (page 6).
5. SOVIET-YUGOSLAV IDEOLOGICAL SPLIT WIDENS
6. HUNGARIAN POLITICAL TREALS MAY TRY TO IMPLICATE
WESTERN MISSIONS
7. SAUDI ARABIA SEEKS HEAVY ARMAMENTS FROM JAPAN
(page 9).
8. LAOTIAN CABINET HEDGING ON AGREEMENT WITH PATHET
LAO (page 10).
9. FRENC RING WITHDRAWAL FROM MILITARY BASE
IN LAOS (page 11).
10. AFGHAN REACTION TO CHOU EN-LAI VISIT
(page 12).
ANNEX--Conclusions of the Watch Report of the Intelligence
Advisory Committee
25 Jan 57
page 13).
Current Intell:igence Bulletin Page 2
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NASR THREATENS TO HALT CANAL CLEARANCE
President Nasr told Emile Bustani,
former Lebanese minister of public
works, on 19 January that he was de-
termined to stop clearance of the Suez
anal Israel refused to obey the United Nations resolu-
tion regarding Israeli withdrawal from Egyptian territory
or attempted to impose conditions for withdrawal.
Comment
During the past three days the officially
controlled Cairo press has uttered threats
along this line.
Nasr was previously
stated that he would bar British and French vessels from
the cleared canal if Israel had not withdrawn behind the
1949 armistice line,, Nasr apparently believes that that
threat is not sufficient in the present situation.
25 Jan 57
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2. SUEZ CANAL FEES SUGGESTED AS REPAYMENT FOR
SOVIET GOLD LOANS
Cairo requested its Moscow embass
"to inform Shepi-
lov that Egypt wishes to obtain Soviet
gold with which to "meet the current eco-
nomic pressure," in exchange for "a suf-
ficient amount of Egyptian goods!'
The Moscow embassy asked the Egyptian
foreign office how long a repayment period was
contemplated, what kind of goods would be available, and
whether part of the repayment could be made in hard curren-
cies from future Suez Canal revenues.
Comment Egypt's request reflects the urgency with
which Cairo now is viewing its foreign ex-
change crisis. Egypt needs at least $50,000,000 to ease the
problem, but Soviet gold holdings are more than sufficient to
accommodate Egypt's immediate needs to finance purchases
from the West. The Egyptian ambassador's query on commit-
ting future canal revenues suggests that Moscow may be seek-
ing to gain some leverage on future operation of the Canal.
With Egypt almost bankrupt and the bulk
of its cotton crop already committed to the Soviet Bloc, Cairo
must seek new means of paying for additional Soviet "aid,"
which has been characterized by quid pro quo arrangements.
Cairo is unwilling to draw on its own gold reserves, amount-
ing to about $174,000,000, since these constitute the backing
for the Egyptian pound.
25 Jan 57
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AN&
3. BRITAIN OUTLINES PLANS FOR DEFENSE ECONOMIES
Comment on:
Defense economies under consideration
by Britain's new government in the com-
ing year will cut deeply into Britain's
forces in Germany, according to the
permanent secretary of the Ministry of
Defense. Tentative plans, which envisage
an over-all force cut of 70,000 men or
roughly 10 percent by March 1958, will
remove 30,000 of the 78,000 now in Ger-
many. Informed of these plans,, the Bonn
Foreign Ministry told American officials
that the Germans would resist the plan as
it would have serious adverse political ef-
fects in the absence of a quid pro quo from
the USSR.
These over-all force cuts are called pre-
liminary to "vastly greater" ultimate reductions under a
major defense reorganization announced by Prime Minister
Macmillan on 24 January. Timing of final decisions and pub-
lic announcements is complicated by the need to prepare a
budget for the fiscal year beginning 1 April and by obligations
to consult with NATO and the Western European Union. The
annual mid-February white paper on defense, which outlines
plans for the coming year, may appear this year in March in
abbreviated form with details to follow in the fall.
The reorganization appears to involve in-
creased control over the service ministries by the new min-
ister of defense, Duncan Sandys. He will have an unusually
high-ranking officer as his principal aide in Marshal of the
Royal Air Force Sir William Dickson, presently chairman of
the Chiefs of Staff Committee, and reported as due to be named
chief of staff to the minister of defense. Speculation on Sandys'
28-30 January visit to Washington has stressed Britain's inter-
est in abandoning its expensive aircraft development program
in favor of missiles.
25 Jan 57
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4. POSSIBLE SOVIET AIR-TO-SURFACE MISSILE
DELIVERY OF NUCLEAR WARHEAD
The flight
of a
BADGER
(TU-16)
u]tbOlbr across the
Kapustin Yar rangehead at the.
time of the 19 January Soviet.
nuclear test strongly suggests
delivery of the weapon by air-
to-surface missile. The air-
craft was initially detected in
the Vladimirovka area, from
which it flew counterclock-
wise around the area of the
nuclear explosion, passing
within approximately five nau-
tical miles of the tentative
ground zero, and orbiting in
the Vladimirovka area before
landing. The area of opera-
tions is the same as that in
which TU-16's of a special-
purpose unit (X-502) launched
air-to-surface missiles with
an estimated range of 50 miles
during the period 14 September-:
10 October 1956, A TU-16
based at Ostrov/Gorokhovka,
the base of special-purpose
unit X-502, was observed on
18 January flying from Omsk
to Belaya Tserkov, and may
have been associated with the
19 Jan,uary operation.
25 Jan 57
SARATOV
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NTATIVE
POSITION OF
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NUCLEAR TEST
MOGI � 30M114:
19 JAN1957
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APPROX. CE TERA
VLADIMIROVKA 01
BOMBING RANGE
TALINGRAD
VLADIMIR
09163
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TU-16 FLIGHT ROUT
KAPUST1N l'AR AREA
19 JAN 1957 (0909 Z -1029 E)
09430
0939
0930
25 JANUARY 1957
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5. SOVIET-YUGOSLAV IDEOLOGICAL SPLIT WIDENS
\V
Comment on:
The blunt condemnation of Yugoslavia's
national Communism contained in the
latest issue of the Soviet Communist
Party's journal Kommunist approaches
an ideological excommunication of Yugo-
slavia. The article states that there is
no such thing as national Communism,
which is "nothing more than refined
bourgeois nationalism!' Claiming that
all true Marxist-Leninist parties revere the Soviet Union's
experience in the fight for socialism, Kommunist says that
there are "exceptions among the Yugoslav comrades!' The
latter are accused of revising the doctrine that a laboring-
class party must lead the state. The Soviet journal also
criticizes Yugoslav economic practices.
The Yugoslays, for their part, show no
sign of a. more conciliatory attitude. Implicitly accusing
the Soviet Communists of "dogmatizing" Lenin's writings,
the Belgrade paper Borba at about the time of the Kommunist
article stated that "in Marxism, in Leninism, there is some-
thing that is eternal...and there is also something that is
momentary, fleeting, something that coincides with the re-
quirements of immediate practical work!' At the same time,
the Yugoslav paper denied that Stalin was a "real Marxist,"
a statement which appears aimed at Khrushcheves recent re-
mark that all the Soviet Communists are good Stalinists in
the fight for socialism.
While neither side has yet mentioned the
possibility of an open break, the positions now taken appear
too firm to make a workable compromise likely. The vir-
tual dissolution of party rapport does not appear as yet to
have had a decisive effect on Yugoslav-Soviet governmental
and economic relations.
The further widening of the ideological
rift will probably serve to isolate "liberal" elements in some
of the Satellite parties and particularly will place the whole
Polish leadership in a dilemma.
25 Jan 57 Current Intelligence Bulletin
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6. HUNGARIAN POLITICAL TRIALS MAY TRY TO IMPLICATE
WESTERN MISSIONS
Forthcoming political trials in Hungary
may stress the "close ties" between rev-
olutionary leaders and Western missions
and governments. In the opinion of the
-' American legation, the trial of General Pal Maleter, ex-
premier Nagy's defense minister, may feature the alleged
activities of the British military attach�ho was recently
expelled--while anti-American accusations may be directed
primarily against Radio Free Europe.
The legation has also heard from several
sources that the extension of the martial law decree on 13
January to include the death penalty for strikers led a con-
siderable number of state prosecutors--possibly totaling 30--
to tender their resignations in protest.
Comment Soviet bloc propaganda concerning the Hun-
garian uprising has consistently stressed
Western "imperialist" complicity, but the Hungarian regime
has generally avoided specific and official charges against in-
dividual Western states. The ousting of the British military
attach�n 18 January, however, may foreshadow the adoption
of a more direct form of attack.
The resignation of the state prosecutors--
and the reported resignation of many judges as well�constitutes
additional evidence that the regime's terror campaign has hit a
major snag in party and government functionaries.
25 Jan 57
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SEEKS HEAVY ARMAMENTS FROM JAPAN
Saudi Arabia's Deputy Foreign Minister
Yusef Yasifi has stated that his govern-
ment would like to purchase from Japan
tanks, jet fighters, antiaircraft equip-
ment, and coast artillery "for the Jidla
3audi Arabia did not desire to buy arms from the
Soviet bloc and that Saudi Arabia assumed that purchases of
heavy arms from the United States would be limited.
Comment
Saudi Arabia's anxiety to obtain antiair-
craft and coastal guns to defend its ill-
armed outposts on the Gulf of Aqaba from harassment by
Israeli naval craft
Syria has respondea witn i swiss iignt antiaircraft guns and
18 French 105-mm. guns.
The Japanese ordnance industry is geared
largely to the production of materiel according to American
specifications, and the sale Of such items must be approved by
the United States. The industry, however, has recently pro-
duced Japanese-designed prototypes of self-propelled weapons
and a medium tank which are not subject to this restriction.
Although the Japanese sorely need orders, the government,: be-
cause of the tense situation in the Middle East, is likely to seek
Washington's views before deciding its policy on any Saudi pur-
chase.
Japan and Saudi Arabia have recently taken
steps toward closer contacts.
Saudi Arabia plans to conclude an oil aeveiopment agreement
with Japan following completion of a survey of Saudi oil resores
by Japanese experts
25 Jan 57
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A-.11...116....11,1-g 1
8.. LAOTIAN CABINET HEDGING ON AGREEMENT WITH
PATHET LAO
Laotian cabinet members appear generally
convinced that the government's 28 Decem-
ber agreement with the Pathet Lao requires
additional safeguards on the restoration of
1 over the two provinces, on the dissolution
of the Pathet Lao movement, and the disavowal of Communism
by Pathets joining the coalition government. This stiffening
attitude was apparently brought about by Deputy Premier Katay,
who has urged that the agreement be publicly revised. Most
of the ministers, however, appear to favor embodying the safe-
guards in a secret supplementary declaration to be signed by
the Pathet Lao.
Comment Pathet chief Souphannouvong's prolonged stay
at his headquarters in Sam Neua, where he
is seeking Pathet approval of the agreement he worked out with
Premier Souvanna Phouma, has prevented the premier from
seeking early assembly endorsement of the agreement. Now
that opposition has crystallized, he may find it difficult to win
Pathet Lao acceptance of any increased demands from the cab-
inet. While the Pathets would be most reluctant to jeopardize
the advantages they have already won in negotiations,
25 Jan 57
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9. FRENCH CONSIDERING WITHDRAWAL FROM MILITARY
BASE IN LAOS
A recommendation for complete abandon-
ment "within a few months" of the French
military base at Seno in Laos is being
sent to Paris by French ambassador Jean
ayart in Saigon, according to the latter's counselor. A re-
cent survey trip to Laos by the counselor on Payart's instruc-
tions convinced the former that the base no longer has signif-
icant military or political value. The French estimate that
Laos will eventually request their withdrawal from Seno, and
that it would be preferable to leave without being "pushed out:'
Comment France, the only foreign nation permitted
to keep troops in Laos under the 1954
Geneva agreement, is authorized to maintain 3,500 troops at
Seno. Present French strength is about 2,000, however, and
the Laotian government doubts that France could or would pro-
vide aid in the event of Communist aggression.
Strategically located in central Laos, the
Seno military base with its all-weather airfield plays a major
role in the Laotian defense system. It is also a potentially
valuable asset to SEATO for the defense of the entire Indochina
peninsula. From the viewpoint of Asian SEATO nations, France's
withdrawal would largely eliminate any reason for continued
French membership in SEATO. Western abandonment of this
base would strengthen the advocates of neutralism in Laos and
cause alarm in South Vietnam.
25 Jan 57
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10. AFGHAN REACTION TO CHOU EN-LAI VISIT
Comment on:
Afghanistan's reception of Chinese Com-
munist premier Chou En-lai during his
visit from 19 to 23 January appears to
have been confined almost entirely to
diplomatic cordialities.
A round of official social functions, dur-
ing which Chou and his party apparently went out of their way
to cultivate Asian diplomats, was followed by a tour of devel-
opment projects. The sites visited by Chou included the
Helmand Valley in southeastern Afghanistan, where an Amer-
ican construction company is working, and Sarobi in east cen-
tral Afghanistan, where West German engineers are construct-
ing a large dam.
The joint communiqu�ssued by Chou and
Afghan premier Daud on 22 January merely reaffirmed the
principles of the Bandung conference and announced that Daud
would visit Peiping sometime in 1957. It did not contain any
attack on "colonialism" or the American Middle East proposal--
endorsed by Afghanistan�which have been important targets of
Communist propaganda.
Kabul apparently has not been influenced
significantly by the heavy Chinese Communist propaganda ef-
fort in Afghanistan over the past six months. This has included
lavish participation in the International Fair in Kabul last Au-
gust, exchange of cultural delegations, and recent stationing
of a permanent representative of the Chinese Communist news
agency in Kabul.
25 Jan 57
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ANNEX
Watch Report 338, 24 January 1957
of the
Intelligence Advisory Committee
Conclusions on Indications of Hostilities
On the basis of findings by its Watch Committee the
Intelligence Advisory Committee concludes that:
A. No Sino-Soviet Bloc country intends to initiate hostili-
ties against the continental US or its possessions in the
immediate future.
B. No Sino-Soviet Bloc country intends to initiate hostili-
ties against US forces abroad, US allies or areas periph-
eral to the Orbit in the immediate future.
C. A deliberate initiation of hostilities in the Middle East is
improbable in the immediate future.
25 Jan 57
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