CENTRAL INTELLIGENCE BULLETIN - 1958/09/02

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03169525
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 12
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: September 2, 1958

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2 September 1958
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CENTRAL
INTELLIGENCE
BULLETIN
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2 SEPTEMBER 1958
I. THE COMMUNIST BLOC
Taiwan Strait - General military lull
continues; domestic propaganda com-
mits Peiping still further to action
against offshore islands.
USSR - Pravda promises Peiping
"moral and initerial" help but stops
short of committing USSR to any mil-
itary action.
Khrushchev cuts short vacation, re-
turns to Moscow.
USSR offers Libya broad economic
aid program.
II. ASIA-AFRICA
UAR resumes propaganda attacks on
anti-Nasir Arab governments.
I IL THE WEST
0 British, Icelandic patrol ships avoid
violence during first day of new fish-
ing limits.
0 Leftists in Mexico exert increasing
pressure for influence in next admin-
istration.
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CENTRAL INTELLIGENCE BULLETIN
2 September 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
*Taiwan Strait situation (as of 0100 EDT, 2 September)!
The general lull in Chinese Communist military activity,
which began on 30 August, has continued except for some
naval action. Peiping's propaganda to its home audience has
committed the Chinese Communists still further to action
against the offshore islands. (Page 1)
USSR: Pravda declared on 30 August that the Soviet
Union will give Communist China the "necessary moral
and material help" and warned that any "aggression by the
United States" in the Far East will inevitably lead to the
spreading of war to other areas The editorial was designed
to arouse further world-wide apprehension over the prospect
of general hostilities. The statement stops short of commit-
ting Moscow to any military action.
(Page 2)
*USSR: Khrushchev has apparently cut short his vaca-
tion;"FeT returned to Moscow from Yalta on 1 September.
Relatively low level Soviet officials in Moscow apparently
knew last week that he was returning, which makes it unlikely
that the interruption of his vacation was unexpected. It is pos-
sible that Khrushchev returned preparatory to spending the re-
mainder of his vacation elsewhere.
USSR-Libya: The USSR has submitted a broad offer of
economic aid to Libya. Prime Minister Kubar fears accept-
ance would lead to an influx of Soviet technicians, but that re-
jection on the other hand would be used by the USSR to strength-
en the hand of pro-Egyptian opposition forces.
(Page 4)
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II. ASIA-AFRICA
UAR propaganda: The UAR government-controlled
press and radio have, after a brief, lull, strongly attacked
the leaders of anti-Nasir Arab governments despite the
UNGA resolution of 21 August, �in which the Arab states in
effect pledged non-interference in each others' affairs.
The Cairo press warned Jordan on 30 August that if quick
arrangements were not made for withdrawal of foreign
troops, "tension will return to the area, and this time it
will be very severe and dangerous." The Syrian press has
been assailing the governments of Jordan and the Sudan.
In addition, on 28 August it launched the strongest attacks
to date on Tunisian Prime Minister Bourguiba, comparing
him with Iraq's late Nun i Saicl as an "agent of imperialism
and an enemy of the Arabs."
III. THE WEST
*Britain-Iceland: Incidents involving violence were
avoided during the first day of Iceland's effort to enforce
a 12-mile fishing limit, apparently because both Icelandic
and British patrol ships were under instructions not to be
the first to fire. Since each government remains deter-
mined to enforce claims incompatible with the other's posi-
tion, however, such incidents could occur at any time.
Denmark's proposal for NATO consideration of the dispute
offers little prospect of immediate settlement in view of
Iceland's adamant rejection last week of compromise efforts
by fishery experts of eight nations meeting in Paris.
Mexico: Last week's student and labor violence have
contributed to an unstable situation which the American Em-
bassy views with grave concern. While the 40-year rule of
the Party of Revolutionary Institutions will be continued un-
der President-elect Lopez Mateos, leftists who have won
increased control of key unions will seek to influence the new
administration. (Page 5)
2 Sept 58
DAILY BRIEF ii
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Taiwan Strait Situation (as of 0100 EDT, 2 September)
The general lull in Chinese Communist military activ-
ity, which began on 30 August, has continued except for one
naval action. Only about 200 rounds were fired against the
Kinmens (Quemoys) on 1 September, but firing increased
early on the morning of 2 September, when more than 830
rounds were fired.
Twelve Chinese Communist motor torpedo boats were
sunk by Nationalist naval units during the early morning of
2 September, according to a Chinese Nationalist communique.
The Nationalists reported that 30 of their seamen were killed
or wounded in the 90-minute engagement, and one Nationalist
vessel was reported to have been torpedoed but apparently
gained port. Earlier Nationalist announcements claimed that
between late .evening on 31 August and early morning on 1 Sep-
tember their artillery on Kinmen had sunk a total of 11 Commu-
nist vessels, including three gunboats, and had damaged five
others.
The Nationalists also have reported that one LCM carry-
ing supplies to Kinmen was sunk by Communist artillery fire
during the evening of 31 August, the second Nationalist LCM
sunk in this way. The Nationalists continue to move supplies
and men to Kinmen and to evacuate wounded.
Peiping's defection appeals for the first time have been
directed to Lieh Hsu (Little Quemoy). A 1 September broad-
cast called on the commander and his subordinates to "send
someone to contact us" and to "be ready to lead all personnel"
to cross over. The appeal was coupled with the warning that be-
fore long Communist artillery fire will "completely demolish
your positions."
Peiping newspapers, which have reported only scant details
on the situation, on 31 August headlined US "interference" in
China's internal affairs and declared that such intervention can-
not prevent seizure of the offshore islands. The newspaper com-
� mentaries appear further to commit the regime publicly to ac-
tion against the islands.
-C-ON1IDENTIA-L-
2 Sept 58
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Pravda Warning on Taiwan Strait Crisis
The authoritative Pravda asserted in a 30 August article
that the Soviet people support Communist China in its "just
struggle" to gain control of Taiwan and the offshore islands
and that the USSR will give the "necessary moral and ma-
terial help." It warned that a threat of attack on Communist
China is a threat to the Soviet Union as well, and that "ag-
gression by the United States" in the Far East would inevit-
ably result in an expansion of hostilities to other areas. This
is Moscow's strongest statement to date but it stops short of
committing the Soviet Union to military action in the event of
an outbreak involving American forces.
The article, which cites expressions of alarm from the
British, Japanese, and Indian press, appears designed to em-
barrass the United States by further arousing apprehension
throughout the world over the prospect of large-scale hostil-
ities. Moscow may call for a heads-of-government meeting
to consider the "Far Eastern issue" or may raise the ques-
tion at the UN. On two occasions in August, Soviet diplomats
asserted privately that high-level consideration would have to
be given this problem.
Soviet leaders apparently anticipate American retaliation
to any Chinese Communist attack on the major offshore island.
Radio Moscow stated on 29 August that the remarks President
Eisenhower made that week at his press conference "made it
quite clear" the United States "would not hesitate to use armed
force on Quemoy and Matsu."
Free World reacttionto crisis: Comment in nations out-
side the blochas not Yet assumed significant proportions. Many
nations seem to be awaiting developments. The absence of re-
ported comment from Latin America and most of Africa sug-
gests disinterest. Press and official opinion in a number of
European and Asian countries concludes that Peiping is engaged
in a political and psychological warfare maneuver, but is not
prepared to risk World War III. There is no significant read-
iness outside the bloc to echo the Communist charge that the
2 Sept 58 CENTRAL INTELLIGENCE BULLETIN Page 2
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United States is gambling with global conflict for the sake of
the offshore islands. At the same time there is very little
sympathy for Taiwan's claim to the islands.
The consensus of British press and authoritative comment
is that it would be difficult for the UK to support American inter-
vention. Japanese officials apparently believe Tokyo would have
to take a position disassociating itself from any US interven-
tion. Indian official comment has been sparse and non-com-
mittal, although elements of the Dress tend to sympathize with
Peiping.
2 Sept 58 CENTRAL INTELLIGENCE BULLETIN Page 3
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USSR Makes Broad Offer of Economic Aid to Libya
The USSR has submitted a broad offer of economic
aid to Libya which would include financing, equipment,
and assistance in petroleum exploration. Prime Minis-
ter Kubar fears acceptance would lead to an influx of
Soviet technicians, but that on the other hand, rejection
would be used by the USSR to strengthen the hand of pro-
Egyptian opposition forces.
Earlier this year the USSR instigated rumors that it
was prepared to offer Libya $28,000,000 for economic de-
velopment. Moscow apparently intended in this fashion to
open the issue of Soviet economic relations with Libya. No
offer was formally presented to the Libyans.
Although never officially acknowledged by Libya, a
Soviet offer of two hospitals submitted in 1957 is appar-
ently to be implemented, the facilities to be built and
probably staffed by the USSR.
The USSR and Libya established diplomatic relations
in 1955.
CONFIDENTIAL-
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Mexican Labor Troubles
Last week's labor and student riots in Mexico City were
probably fomented by dissident, leftist labor leaders who are
determined to gain stronger influence in the governing Party
of Revolutionary Institutions (PRI).
Outgoing President Ruiz Cortines, in his 1 September mes-
sage to the Mexican congress, warned that he would use force
against further disturbances. However, his reluctance to act
firmly against serious wildcat strikes earlier this year has al-
ready increased the power of the dissidents, and it is reliably
reported that he stopped last week's riots only by making new
concessions to the agitators. The American Embassy fears
President-elect Lopez Mateos may have to adopt a more leftist
program when he takes office on 1 December as a result of 'these
successes.
Control of the labor movement has been an important fac-
tor in the long, almost unchallenged rule of the PR!. Workers,
however, increasingly hit by inflation and low wages, now com-
plain that their politically motivated union leaders have failed
to obtain for labor a fair share in Mexico's economic growth.
The dissident leaders exploited this dissatisfaction. Their evi-
dent ability to make the government grant their demands has
helped them to gain control of important un,ions, as well as
among poorly paid teachers and politically active students.
Many of the newly powerful labor leaders are Marxists, al-
though they do not belong openly to Mexico's legal Communist
party. Lopez Mateos, who was a strong minister of labor in
the outgoing administration, will probably try to channel their
demands into a program patterned on Mexico's own socio-eco-
nomic revolution of 1910.
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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
Special Assistant for Security Operations Coordination
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Special Adviser to the President
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
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
Deputy Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of the Army
Director of Naval Intelligence, Department of the Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Department of the Interior
The Secretary of the Interior
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
United States Information Agency
The Director
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