CENTRAL INTELLIGENCE BULLETIN - 1958/04/12

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03166570
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 20
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: April 12, 1958

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12 April 1958
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CENTRAL
INTELLIGENCE
BULLETIN
DoclimPNT NO.
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12 APRIL 1958
I. THE COMMUNIST BLOC
Possible Soviet missile-launching sub-
marine sighted.
Soviet submarines engaged in extensive
North Atlantic exercise.
Moscow orders Soviet research ship
to maintain scheduled course near
sector closed for US nuclear tests.
Soviet party journal calls on satellites
to intensify pace of collectivization.
II. ASIA-AFRICA
Indonesia - Djakarta forces' invasion
of Tapanuli district may be part of as-
sault on Padang and Bukittinggi.
Saudi Arabia may be forced to seek sub-
stantial foreign loan to stabilize cur-
rency.
-
,
0 Cairo considering purchase of Soviet
civil jet airliners.
0 Ceylon - Linguistic controversy may
cause new political unrest, civil dis-
order.
0 Rabat, Madrid encounter difficulties
in transfer of southern protectorate
area to Moroccan control.
III, THE WEST
Austria considers joining Common
Market group if European Free Trade
Area does not materialize.
TOP DET
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CENTRAL INTELLIGENCE BULLETIN
12 April 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
USSR - Guided missile submarine: A submarine
possibly equipped to aaunch:: guided-missiles has been
sighted in the Kola Gulf area.
(Page 1)
Soviet submarine activity:
the submarines which have been
engaged in probable out-of-area operations, possibly as
far as the US west coast, have appatentiv returned to
home waters.
suggest that a large-scale naval exercise is under way.
This is in addition to probable submarine operations in
the North Atlantic which may extend as far west as New-
foundland. (Page 2)
Soviet IGY ship: The Soviet research vessel Vityaz.
on an IGY-connected cruise i,n the Pacific.
The vessel, believed
to be equipped to conduct studies at sea of radioactivity.
may be in a position to collect valuable data.
(Page 3) (Map)
USSR - Satellites: Certain Eastern European satellites
have apparently been called on to increase pressure on the
peasants to join collective farms. The latest issue of the
Soviet party jburnal Kommunist points out that while col-
lectivization should be a gradual process, liquidation of
TOP RET
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ul" KEA
peasant opposition is necessary and inevitable. If Moscow
presses the satellites to take this course, it would be a
reversal of previous Soviet policy that each satellite should
decide its own speed of socialization and would seem to
indicate Moscow's dissatisfaction with the rate of satellite
collectivization. (Page 4)
ASIA-AFRICA
Indonesia: The invasion of Tapanuli district in North
Sumatra by central government forces may be part of a
concerted effort to capture the dissident strongholds of
Padang and Bukittinggi. Government military headquarters
in Medan has also launched operations intended to "wipe
out enemy concentrations" to the north. Although moving
on the offensive, Medan appears to be concerned over re-
ports that the dissidents, supported by underground forces,
are planning a new attack in the Medan area. These ac-
tions coincide with a new call by President Sukarno for
the early military defeat o the dissident movement.
(Page 5) (Map)
Saudi Arabian finances: Saudi Arabia will probably
shortly try to borrow a substantial amount of money in
order to start a currency stabilization program. The
"austerity" budget was instituted too late for savings this
fiscal year, and the country's entire financial system is in
a generally chaotic state. Saudi Arabia hopes for a balanced
budget next year, but even so. there are not sufficient re-
sources in hand to meet the critical financial problems. As
much as $10,000,000 may be required to stabilize the riyal.
(Page 6)
UAR - Soviet jet airliners: The United Arab Republic
apparently is considering the possibility of purchasing So-
viet TU-104 jet aircraft for use by the UAR civil airline,
MISRAIR. Although civil air officials in Cairo deny
12 Apr 58
DAILY BRIEF ii
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144.1
knowledge of any such action.
The Egyptian press has carried rumors
about the conclusion of a "d pal
pon: wiciespreld political unrest'; and possibly
violence, may develop in Ceylon as a result of Prime
Minister Bandaranaike's abrogation on 9 April of an agree-
ment with leaders of the Tamils, the island's minority
population of Indian origin. This agreement had provided
.for "reasonable" use of Tamil as a national language.
The prime minister's move was apparently forced by
spokesmen of Ceylon's Singhalese-speaking majority popu-
lation, who were protesting Tamil agitation. Singhalese is
officia4y Ceylon's national language.
(Page 7)
Morocco - Spain: Difficulties have apparently developed
in carrying out the agreement to transfer to Morocco on 10
April control of the Southern Morocco area which Spain has
governed as a protectorate since 1912. Moroccan Foreign
Minister Balafrej publicly warned Spain on 11 April that
Morocco would retaliate if Spanish authorities "did not re-
move obstacles hindering Moroccan forces" from assuming
control of the Tarfaia area. Apparently Spanish authorities
have refused permission for the Moroccan Army to use a
portion of the main road which traverses the Saguia el
Hamra Province of Spanish Sahara between Morocco and
the coastal population centers.
(Page 8) (Map)
12 Apr 58
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DAILY BRIEF iii
TOP CRET
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III. THE WEST
.Austria: The Austrian Government is considering
joining the six-nation European Common Market because
of the need for closer economic ties with Western Europe
and Vienna's discouragement over prospects for the pro-
jected free trade area. Such a move would require
"stretching" the Austrian neutrality law and might an-
tagOnize the USSR. The Austrians have already indi-
cated concern over the reaction of the USSR, which has
repeatedly attacked the Common Market as an instru-
ment of Western imperialism.
(Page 9)
IV. SIGNIFICANT INTELLIGENCE
REPORTS AND ESTIMATES
(Available during the preceding week)
Special National Intelligence Estimate No. 30-1-5&
Implications of Recent Governmental Changes in Saudi
Arabia. 8 April 1958.
12 Apr 58
DAILY BRIEF iv
TOP ET
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1.4.4
L THE COMMUNIST BLOC
Possible Soviet Missile-Launching Submarine Sighted
A very reliable observer sighted a large submarine,
apparently fitted to launch guided missiles, in the Kola
Gulf area of the Murman Peninsula of the USSR on 14
March. This submarine, possibly a Z-class unit, had
a large tank on the deck aft of the conning tower, which
had been heightened, possibly to house electronics
equipment. No launching ramp was reported, although
it is possible that the ramp was stowed either in the hang-
er with the missile or retracted into the main deck.
This is considered the most reliable sighted report
yet received on a possible missile-launching submarine.
The USSR has 18 Z-class units, 11 of which are in the
Northern Fleet and 4 in the Pacific. The Z-class is the
largest postwar submarine known to have been built in
the USSR and is suited for conversion to a missile-
launching role. A photograph taken in August in the
naval dockyard at Murmansk showed a Z-class unit with
a mo ification to the top of its conning tower, but no
tanif was mounted on deck,
TOPEC7ET
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T(t, I
Soviet Naval Activity
The return to Petropavlovsk on 5 April of two submarines,
one of which has apparently been on a long-range patrol
Soviet units on patrol, possibly as far as the US
west coast, have returned to home waters. Moreover, large
naval exercises which began in the Sea of Japan on 31 March
tapered off on 6 and 7 April.
a large-scale naval exercise with air
and submarine force participation may now be under way.
submarines are on patrol or exercising in the
Norm Atlantic, possibly as far west as Newfoundland.
The early starting date and the size of these exercises
imply that the Soviet Navy will probably attempt larger and
more frequent fleet operations this year.
'COP ET
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Nimmo' NM,
REPORTED POSITIONS OF SOVIET
r7 RESEARCH VESSE6ITYAZ
� 41LIPMNES
STATUTE MILES
8?0
NAUTICAL MILES
TOP .RET
ALASKA
VS NUCLEAR TEST SITE
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Soviet Research Vessel Directed to Continue Operations
earg-7TTNiro-lear Test Site
The captain of the Soviet research vessel Vityaz, which
has been operating in the Pacific Ocean on a scheduled cruise
for the International Geophysical Year, expressed doubts
concerning planned operations in an area close to the sector
set aside for US nuclear tests during April .198
He also al-
tered course from the approved track, but this action was
questioned by Moscow and the Vityaz was subsequently or-
dered to adhere to the prescribed plans.
Should the Vityaz continue to operate according to its
announced plans, it may be in a position to collect valuable
data 6n US tests. The Vityaz has Conducted radioactive stud-
ies t seaon proviouS cruises and ma be e edto a h r
Siftiilar data on this voyage.
I.
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ook COAT
Soviet Journal Calls for Stepped-up Satellite Collectivization
The USSR may be reversing its policy of permitting each
satellite to determine the speed at which it carries out its
internal socialization program. The latest issue of the So-
viet party journal Kommtmist, in an article discussing the
inevitability of tatal agricultural collectivization in the satel-
lites, calls for acceleration of this process in at least some
of them.
Publication of the article in Kommunist gives it con-
siderable authority and may signify increased Soviet readi-
ness to intervene directly in satellite affairs. Fear that
Khrushchev's Acrs reorganization plan might induce relaxa-
tion of the collectivization effort in the satellites may have
brought out the hard Soviet line at this time.
Although the article admits that collectivization must be
carried through gradually, it points out that such a policy
requires the "inevitable" liquidation of peasant opposition.
Citing both Soviet and Chinese experience'' as "useful models,"
the author singles out Bulgaria and Czechoslovakia "in par-
ticular," and Rumania and Albania secondarily, as countries
where conditions are now favorable for eradicating the re-
maining peasant opposition. Bulgaria and Czechoslovakia are
already highly collectivized and have been pushing the forci-
ble liquidation of such opposition as remains. This article
serves to reaffirm them in this policy.
Omission of any reference to East Germany, Poland,
and Hungary is probably in recognition of the peculiar con-
ditions in those countries which militate against increasing
collectivization at this time. It is probably intended, how-
ever, as a strong hint to these regimes not to overlook the
fact that they must eventually collectivize.
EN'T
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IL ASIA-AFFdCA
Indonesian Situation
The movement of government troops into the strategic area of
Tapanuli, which lies immediately north of the dissident centers of
Padang and Bukittinggi, apparently is coordinated with the continuing
westward drive of Djakarta troops through Central Sumatra. The
two drives probably are intended to meet the scheduled deadline for
the final assault in mid-April on the strongholds of the revolutionary
government.
The Tapanuli commander has been permitting dissident forces free
access into his territory and has refused orders from Djakarta to dis-
arm them. The government has refrained from entering Tapanuli here-
Ltofork, appamitly fearing such action would widen the area of revolt.
As ye 4 however, the Tapanuli commander has made no military move
against government troops.
Prime Minister Djuanda told the American ambassador on 9 April
that when Padang and Bukittinggi were occupied, Djakarta would de-
clare the revolt over and the revolutionary government dissolved. He
said this should happen very soon, probably by 15 April. President
Sukarno also reiterated Djakarta's determination for a quick military
defeat of the Central Sumatran regime in a speech on 8 April in
Central Java,
Both Djakarta and the dissidents are reported renewing pressure on
the commander in South Sumatra, Lt. Col. Bahian, to abandon his
neutral position. So far, however, no significant change in his at-
titude is apparent.
Djuanda undercut earlier statements by Foreign Minister Subandrio
when he told the American ambassador there was little likelihood of
any positive immediate anti-Communist action unless the Commu-
nists gave the army an excuse to crack down on them. The prime
minister thought overt militant action by the Communists was an
extremely remote possibility.
The government has relieved the Indonesian ambassador in Rome
because of his sympathetic attitude toward the dissidents. Apparently,
however, he has tak n si ble embassy funds with him. (TOP
riL ,,sErrET
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Saudi Arabia's Financial Condition
Since early 1956 Saudi Arabia's financial condition has
steadily deteriorated despite oil revenues exceeding $300, -
000, 000 annually. Royal spending has exceeded this level
and the country has built up a substantial domestic and for-
eign debt. On recommendations of experts from the Inter-
national Monetary Fund, King Saud earlier this year decreed
an "austerity budget" for the Saudi year beginning August
1957, designed to cut expenditures sharply in order to real-
ize a $30, 000, 000 surplus and reduce the country's debt.
Since this budget was not decreed until several months after
the year had begun, it was destined for failure, as many
government departments had already spent more than their
total allocations under the new budget.
A good deal more than an austerity budget will be re-
quired to bring order to the Saudi financial system. As a
major step, Fund officials have advocated a currency sta-
bilization fund designed to restore the riyal to its official
parity of 3. 75 to the dollar. The market rate is now fluc-
tuating at about 5 riyals to the dollar. Fund officials esti-
mate that about $1O0 000, 000 might be required to guaran-
tee the success of any plan to overhaul the Saudi financial
system.
Without an almost complete change in the system, how-
ever, it is doubtful if any scheme would work. Saudi Arabia
uses an archaic bimetallic system which has never worked
in any country and merely allows for substantial fortunes to
be made from gold and silver smuggling operations.
One factor which has contributed to the present crisis
has been substantial Saudi aid to Egypt and Syria, amount-
ing to almost $50, 000, 000 in 1956 alone. Saudi Arabia has
extended Egypt additional aid this year by accepting over-
valued Egyptian pounds for Saudi oil for which the govern-
m nt paid ARAMCO in dollars.
T
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1.1-4
Renewed Communal Violence in Ceylon Possible
Prime Minister Bandaranaike of Ceylon is again under
severe pressure from rival Singhalese- and Tamil-speak-
ing elements over the status of the Tamil language.
Singhalese has been the official national language since
July 1956. In mid-1957, Ceylon's 2,000,000 minority popula-
tion of Indian origin threatened widespread revolt if their
native language, Tamil, were not also granted official
status. Agreement in July between Bandaranaike and Tamil
leaders for the limited use of Tamil brought temporary
peace. Bandaranaike, however, failed to implement the
agreement and the Tamils renewed their agitation on 1 April
1958.
During a tense session of Parliament on 8 April, a ma-
jority of Bandaranaikets coalition firmly opposed the agree-
ments, and some 25 coalition members reportedly threatened
to bring down the government. The next day Bandaranaike,
under Singhalese pressure, announced that his pact with the
Tamils could not be implemented.
The Tamils on 11 April opened a civil disobedience cam-
paign. Leaders of the Tamil Federal party said that the
formation of a united front of all Tamil-speaking people, which
would include most of Ceylon's plantation workers, would be
suggested at the party's annual convention scheduled for 2 May.
This communal issue is one on which tempers can run
high, and the possibility of serious trouble exists. Ban-
daranaike� however, has successfully maintained peace on
previous occasions and may be able to reach some compro-
'se again.
SE
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Moroccan-Spanish Difficulties Develop in Southern Morocco
Difficulties appear to have developed in implementing
the scheduled 10 April transfer to Morocco Of control over
the protectorate of Southern Morocco, a 25,000-square-
mile strip of territory which Spain has governed as part of
Spanish Sahara. After some months of bargaining and under
threat of a forcible take-over by the Moroccan Army, Spain
finally agreed to this transfer during a secret meeting on 1
April between Foreign Minister Castiella and Moroccan For-
eign Minister Balafrej. Except for the temporary retention
of some Spanish troops in the area, Morocco apparently a:
greed to none of the concessions demanded by Spain, partic-
ularly a guarantee of the area's southern boundary.
Balafrej publicly warned Spain on 11 April that Morocco
would retaliate if Spanish authorities "did not remove ob-
stacles hindering Moroccan forces" from assuming control
over the coastal area of Tarfaia. Evidently Spanish author-
ities have refused the Moroccan Army permission to use a
portion of the main route between Morocco and the Atlantic
coast where the capital city and other principal population
centers are located. Because of the terrain, this road cuts
into the Saguia el Hamra Province of Spanish Sahara, which
Morocco also covets,
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IlL THE WEST
Austria May Seek Direct Accession to European Common
Market
Discouraged by the prospects for the European free
trade area, Vienna is actively considering the possibility
of Austrian accession in some form to the European Com-
mon Market (EEC). The government has for some time
recognized that the Austrian economy would be in serious
straits if European economic integration should hinder.
Austrian access to markets in the EEC countries. In the
cabinet's discussion of the Common Market on 9 April it
was suggested that in view of Austria's neutrality law and
long-standing Soviet objections to the EEC, Austria on
joining might make "appropriate" reservations.
Vienna is perhaps being misled by the relatively mild
response of Soviet Ambassador Lapin to an initial approach
made by Chancellor Raab last month. Lapin is said to have
been "negative, but not too much so." He warred Raab,
however, that "those people (presumably the ,Common Mar-
ket members) would have him by the throat." Moscow has
in general viewed the six-nation community as an instru-
ment of imperialism dominated, by Bonn.
Raab may hesitate to make any further approach to the
USSR until after his visit to Moscow in July, when he hopes
to negotiate a reduction in Austria's reparations deliveries.
A formal approach to the EEC for bilateral negotiations
will also depend on whether the prospects for a free trade
area improve during the negotiations scheduled for later
this/Month and early May.
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CENTRAL INTELLIGENCE BULLETIN
12 April 1958
DAILY BRIEF
I. THE COMMU T BLOC
USSR - Guided missile ubmarine: A submarine
possibiY equippe to . e
sighted in the Kola Gulf rea.
(Page 1)
Soviet submarine activity:
missiles has been
rt-He submarines which have been
engaged in probable out-of-area operations, possibly as
far as the US west coast have apparently returned to
home waters.
suggest that a large-scale naval exercise is under way.
This is in addition to probable submarine operations in
the North Atlantic which may extend as far west as New-
foundland. (Page 2)
Soviet IGY ship: The Soviet research vessel Vityaz
on an IGY-connected cruise in the Pacific
The vessel, believed
to be equipped to conduct studies at sea of radioactivity,
may be in a position to collect valuable data.
(Page 3) (Map)
USSR - Satellites: Certain Eastern European satellites
have apparently been called on to increase pressure on the
peasants to join collective farms. The latest issue of the
Soviet party journal Kommunist points out that while col-
lectivization should be a gradual process, liquidation of
peasant opposition is necessary and inevitable. If Moscow
presses the satellites to take this course, it would be a
reversal of previous Soviet policy that each satellite should
decide its own speed of socialization and would seem to
indicate Moscow's dissatisfaction with the rate of satellite
collectivization. (Page 4)
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