CURRENT INTELLIGENCE BULLETIN - 1957/05/26

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03169422
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: May 26, 1957

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CURRENT
INTELLIGENCE
BULLETIN
26
May
1957
Copy No. 34
DOCUMENT NO.
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OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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CONTENTS
ti /14Z-1� THE TAIWAN SITUATION
OIL 2. THE SITUATION IN HAITI
(page 3).
(page 5).
I 6- 3. POLITICAL CRISIS INCREASING FRANCES FINANCIAL
DIFFICULTIES (page 6).
4. SIGNS OF E CHANGE IN FRENCH POLICY ON
ALGER' (page 7).
014, 5. ABORTIVE COUP IN HONDURAS MAY WEAKEN MODERATE
GOVERNMENT page 8).
0 SITUATION IN LAOS
26 May 57
(page 9).
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,A. THE TAIWAN SITUATION
Reference
Taipei reports that as of 2230 local time
an 26 May order is being maintained un-
aler martial law and a curfew. However,
restiveness among students in Taichung,
a city of about 200,000 in central Taiwan,
is reported and martial law may also be
imposed there. Other areas of the island
appear to be quiet, and press accounts on
26 May were "apologetic," according to
the US embassy in Taipei.
The Taipei garrison commander, the com-
mander of the military police, and the chief
of the provincial police have been relieved
by Chiang Kai-shek for neglect of duty.
A high-ranking Kuomintang leader and a
police official have informed American
representatives in Taipei that the disturb ,
ances were planned in advance. The former
indicates that top-level political rivalries
provided the motive, and that the national Youth Corps, which
is under the direction of Chiang Ching-kuo, Generalissimo
Chiang's son, was used to spearhead the outbreak. Certain
Kuomintang party leaders hoped to force Premier Yui and For-
eign Minister Yeh from office by embarrassing them. The
events, however, took a more violent turn than expected by
these leaders.
Premier Yui and his cabinet resigned on
25 May but Chiang Kai-shek has refused to accept their resig-
nations for the time being. One report states that a military
man will head any new cabinet.
Japanese, South Korean, and Philippine of-
ficials are reported in the press to have stated that the disorders
26 May 57
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in Taipei demonstrate the necessity for concessions by the
United States on the issue of local jurisdiction over Amer-
ican military forces abroad.
The Peiping People's Daily calls for
"Chinese unity" in the struggle by the whole nation for "lib-
eration" from American oppression. Moscow, following
Peiping's lead, cites the disorder as a demand for Amer-
icans to "go home."
26 May 57
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2. THE SITUATION IN HAITI (As of 2100 hours 26 May)
Comment on:
The political situation in Haiti remains
explosive, although, according to frag-
mentary press items, fighting which
erupted in Port-au-Prince on 25 May
has halted. Anti-United States, pro-Communist Daniel
Fignole has proclaimed himself provisional president.
Army chief of staff Brigadier General
Leon Cantave, who seized control from an executive coun-
cil of government on 21 May, reportedly defeated an attempt
to oust him by Port-au-Prince police chief Colonel Pierre
Armand, who was backed by most members of the deposed
executive council. Armand apparently agreed to a cease=
fire on 26 May following a 24-hour battle during which his
troops attempted to rout Cantave from his military head-
quarters in the capital.
In a striking example of double-dealing
in a country where such tactics have been the rule for six
months, presidential candidate Daniel Fignole reportedly
switched his allegiance from the executive council, which
he had controlled with another candidate, and directed his
terroristic street mobs in support of Cantave, thus appar-
ently turning the tide of battle in Cantave's favor. Cantave
subsequently supported Fignole's claim to be provisional
president. Cantave and what he describes as a "majority of
the armed forces" appear to be the only authority behind
Fignole's coup.
Armand and the remaining supporters of
the executive council probably retain the support of a number
of junior officers, the air force, the coast guard, and the
police, all of whom supported Armand during the 24-hour
"civil war." This ff oup may well attempt a counter-coup.
26 May 57
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3. POLITICAL CRISIS INCREASING FRANCE'S
FINANCIAL DIFFICULTIES
Reference:
Growing prospects for a long political
crisis intensify France's serious finan-
cia,1 difficulties. The American em-
bassy in Paris reports that although
Premier Mollet decreed a cutback of almost $650,000,000
in appropriations before he was defeated, he will be unable,
in his caretaker status, to follow through on his plans to
increase annual revenue by over $400,000,000.
Mollet's present status also blocks in
principle his move to obtain a long-term advance of almost
$600,000,000 from the Bank of France to support France's
dwindling foreign currency reserves. The Finance Ministry
may be forced before the end of June to ask for short-term
advances on an emergency basis to help the treasury meet
its obligations.
While Mollet's defeat did not evoke any
appreciable signs of panic in Paris financial circles, the
dollar--officially pegged at 350--has reached 417 on the black
market after hovering around 400 at the beginning of May.
Gold turnover on the Paris exchange has increased consid-
erably.
26 May 57
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4. SIGNS OF POSSIBLE CHANGE IN FRENCH POLICY
ON ALGERIA
The view is spreading in France that
Minister Lacoste's program for pacify-
ing Algeria has outlived its usefulness,
according to Maurice Faure, Mollet's
under secretary for Moroccan and Tuni-
sian affairs. Four of the leading candidates for the premier-
ship--ex-premier Rene Pleven, Finance Minister Francois
Mitterand, Education Minister Rene Billeres, and Popular
Republican leader Pierre Pflimlin--are convinced that a far-
reaching change of policy is necessary. Faure says that the
next government can take a new line.
Faure's statements may be overoptimistic, since some par-
ties such as the Popular Republicans and the Independents-
Peasants, group may make their support of a successor to
Mollet dependent on a firm commitment not to "abandon"
Algeria. Nevertheless, in recent months there has been a
greater willingness on the part of the French press, includ-
ing the influential daily Le Monde, to discuss freely the need
for relinquishing claims to Algeria as a part of France. Even
some political leaders on the right are taking a similar ap-
proach.
26 May 57
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5. ABORTIVE COUP IN HONDURAS MAY WEAKEN
MODERATE GOVERNMENT
Comment on:
Colonel Armando Velasquez' attempt to
seize the Honduran government, thwarted
by army and police action on 24 May, may
strengthen the hand of the military clique
which recently tried to use the Nicaraguan
border dispute as justification for taking
over the country. This clique, led by De-
fense Minister Oswald� Lopez, opposes the
governing junta's plan to restore constitu-
tional rule through general elections on 21 September. The
junta had recalled Velasquez from his ambassadorial post in
Mexico early this month in the apparent hope that he would
help neutralize the clique's maneuvering.
Velasquez, who was apparently operating
independently of any major politico-military group, has ob-
tained asylum in the Guatemalan embassy, but several officers
and civilians have been arrested for complicity in the plot. The
situation will probably be used by Lopez and his clique to place
further obstacles in the way of a return to constitutional gov-
ernment. Honduras has been under authoritarian rule since
1954.
26 May 57
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LJIIJ.I LPJ JR
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6, SITUATION IN LAOS
Comment on:
Premier Souvanna Phouma's "new" planfor settling the Pathet Lao problem,
is
more advantageous to the Communists
than had been expected. It provides for
the establishment of a coalition govern-
ment by granting the Pathets two "fairly
unimportant" seats in the cabinet. Al-
though the Pathets will be asked to dis-
solve their organization and open their two provinces to
government control, they will be permitted to reconstitute
themselves as a political party "under another name" and
their troops will be integrated into the royal army after only
superficial screening.
The national assembly, which will debate
the proposals after they are presented by Souvanna on 27
May, is under mounting pressure to accept a quick settle-
ment. Prince Petsarath, who has just returned from a visit
to Pathet-held territory, has declared that the Pathet Lao
are neither Communist nor Communist-controlled, and that
they have broken their ties with the Viet Minh. He has also
written a letter urging the deputies to work for "unification
in order that Lao blood will no longer be spilled and Laos
will be neutral, completely independent, peaceful and unified!'
The only serious obstacle for Souvanna ap-
pears to be the possibility of a rapprochement between Deputy
Premier Katay and Phoui Sannanikone, leader of the second
largest party in the assembly. Although bitter rivals, both
would suffer a severe political setback if Souvanna's plan is
implemented. They reportedly are planning to unite in an ef-
fort to force the premier to demand more effective guarantees
from the Communists. Their combined strength in the assem-
bly could bloc Souvanna's strategy and possibly cause his over-
throw.
26 May 57
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