CURRENT INTELLIGENCE BULLETIN - 1956/09/01

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03178361
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: September 1, 1956

Approved for Release: 2019/10/23 C03178361
:Fr -4;00779 ./e/ ,0077#01 kJ/ ablavu..1.
cfditt
CURRENT
INTELLIGENCE
BULLETIN
1 September 1956
Copy No. 105
3.5(c)
3.3(h)(2)
DOCUMENT NO.
NO CHANGE IN CLASS.
DECLASSIFIED
CLASS. CL-IANr.:;ED TO: TS _yertd,
NEXT REVIEW "DNI'E:
AuTh:j.9-2
DATE:
REVIEWER.
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
Approved for Release: 2019/10/23 C03178361
Approved for Release: 2019/10/23 C03178361
Approved for Release: 2019/10/23 C03178361
r-r,es eN ArN r% rrt
Approved for Release: 2019/10/23 C03178361
CONTENTS
1. FRANCE SEEN FORCING MAJOR CRISIS IN SUEZ BY MID-
SEPTEMBER (page 3),
2. TWO SOVIET SUBMARINES TO BE DELIVER,ED TO EGYPT
IN SEPTEMBER (page 4).
3. SWISS BANKS MOVE TO CURTAIL EGYPTIAN FINANCIAL
TRANSACTIONS (page 5).
4. WEST GERMANS MritY_BA_7( DOWN ON 18-MONTH CON-
SCRIPTION TERM (page 6).
5. TASS ANNOUNCES SOVIET NUCLEAR TESTS
(page 7).
6. COMMUNIST CHINA OFFERS TO WITHDRAW TROOPS
FROM DISPUTED SINO-BURMESE BORDER AREA (Top
(page 8).
7. NEGOTIATIONS FOR SOVIET AID TO INDONESIA SUSPENDED
(page 10).
8. SOVIET JOURNALIST DISCUSSES GERMAN UNIFICATION
AND EUROPEAN SECURITY (page 11).
1 Sept 56
* * *
THE ARAB-ISRAELI SITUATION
(page 12)
Current Intelligence Bulletin Page 2
TOP SECRET
Approved for Release: 2019/10/23 C03178361
" I-4 7-1 1-�rr
Approved for Release: 2019/10/23 C03178361
viper
1. FRANCE SEEN FORCING MAJOR CRISIS IN SUEZ
BY MID-SEPTEMBER
France's determination to press the
Suez issue to a climax raises the strong
possibility of a very serious crisis about
mid-September, in the view of the Amer-
ic n embassy in Paris. In its present mood, France will
not be satisfied with a partial and camouflaged Egyptian re-
treat and fears prolonged negotiations will permit Nasr to
get away with his coup.
The embassy believes that unless Nasr
yields far more than seems probable in his reply to Secre-
tary Dulles' plan, Paris will insist that the work of the five-
nation committee in Cairo is finished and will bring strong
pressure for immediate and drastic sanctions.
Ambassador Dillon believes that the
French attitude may be based on the general view that� the
USSR would not respond forcibly to an Anglo-French attack
on Egypt.
Comment
Since the London conference, the French
government has taken military and economic steps to im-
prove its ability to exert pressure on Nasr, and Premier
Mallet apparently has almost unanimous non-Communist
backing for this policy. Implementation of extreme meas-
ures probably will depend on the extent of active British
support. Thus far the two countries appear to have closely
co-ordinated their military and economic pressure tactics
against Egypt.
1 Sept 56
Current Intelligence Bulletin Page 3
-SECRET-
Approved for Release: 2019/10/23 C03178361
0-�, 1-1 1-1 #11
Approved for Release: 2019/10/23 C03178361
Nue
2. TWO SOVIET SUBMARINES TO BE DELIVERED TO
EGYPT IN SEPTEMBER
Comment on:
Two Soviet submarines are scheduled
to leave the Baltic Sea for delivery to
Egypt
lithe
schedule is followed, the submarines should arrive in
Egypt by the last week in September.
The boats will be manned by Soviet
crews not in Soviet uniform on the voyage to Egypt. Egypt
may want to retain at least some members of the Soviet
crews to supervise tactical operations after the boats ar-
rive in Egyptian waters.
1 Sept 56
Current Intelligence Bulletin Page 4
Approved for Release: 2019/10/23 C03178361
�-�
Approved for Release: 2019/10/23 C03178361
('1'i1JIjdV I 121.L4
Vise
.row'
3. SWISS BANKS MOVE TO CURTAIL EGYPTIAN
FINANCIAL TRANSACTIONS
Leading Swiss commercial banks and
the Swiss national bank have tentatively
decided to short-circuit Egypt's scheme
to make its international payments from
epos].ts to be established in Switzerland by Communist
China. They will do this by declining substantial deposits
(presumably in Egyptian accounts) from any country in any
currency other than Swiss francs.
the Egyptians have been informed of this proposed action.
Swiss bankers will take the position that
large receipts of foreign currency might eventually inflate
the Swiss franc and are therefore averse to Switzerland's
becoming the turntable for pro-Communist countries' inter-
national payments. The final decision by the Swiss govern-
ment is expected within a few days.
Comment The 20,000,000 Swiss francs reported
deposited by Communist China for Egyp-
tian clearing accounts in Switzerland is a relatively small
capital movement. Larger movements of capital in and out
of Switzerland have occurred in recent years without ad-
verse effects on the Swiss economy.
1 Sept 56
Current Intelligence Bulletin Page 5
CONFIDENTIAL
Approved for Release: 2019/10/23 C03178361
r7,104 n /7" Pr
Approved for Release: 2019/10/23 C03178361
74101 NOW
4. WEST GERMANS MAY BACK DOWN ON 18-MONTH
CONSCRIPTION TERM
A leading member of Chancellor
Adenauer's Christian Democratic
Party (CDU) says his party will have
to drop its support of an 18-month
conscription term for its armed forces or lose the 1957
election to the opposition. The American embassy in
Bonn comments that, although the government still favors
18 months, the CDU is now likely to try to take credit for
advocating a shorter term. Meanwhile, the chairman of
the Bundestag Defense Committee, a CDU member, has
supported a compromise plan whereby basic troops, such
as the infantry, would serve 12 months and specialists,
18 months.
The CDU spokesman said there is no
longer any possibility of preventing the law setting the term
for conscription from being presented to the Bundesrat,
and that there is insurmountable resistance in the Bundesrat
to the 18-month term.
Comment The conscription bill was pushed through
both houses in July without any specifica-
tion as to length of service, with the idea that the Bundesrat
could probably be bypassed and a law setting a term of 18
months pushed through the Bundestag after it reconvenes in
September, by the CDU's own majority. Since July, the
West German public has been confused by speculation over
the status of conventional armed forces, and Adenauer's
position on the need for conscription has been undercut.
1 Sept 56
Current Intelligence Bulletin Page 6
Approved for Release: 2019/10/23 C03178361
Approved for Release: 10719715723 C03178361
5., TABS ANNOUNCES SOVIET NUCLEAR TESTS
The official Soviet news agency, TASS
has announced that two nuclear weapons
tests occurred on 25 and 30 August and
that other tests will be held for the
purpose of improving existing nuclear weapons and develop-
ing new types of weapons.
TASS claimed that the fall-out of radio-
active material was reduced by the Soviet practice of
detonating the weapon "at a considerable height" and by
using "the smallest poSsible quantity of active material."
The statement reiterated previous Soviet proposals for
a ban on nuclear weapons and tests and cited recent
US and British tests as a justification for the current ..J
Soviet series.
Comment The first in the current series of Soviet
nuclear tests occurred on 24 August
at Semj.palatinsk and produced a yield of approximately 100
kilotons. The estimated yield of the most recent test
probably falls in the range of 500 to 1,000 kilotons. Three
previous tests during February and March of this year all
produced yields of less than 30 kilotons.
Announcement of these tests follows
closely President Eisenhower's recent criticism of Soviet
secrecy. The danger from fall-out to neighboring countries
implied in the President's statement probably induced
the Soviet announcement's emphasis on safety measures.
1 Sept 56
Current Intelligence Bulletin Page 7
Approved for Release: 2019/10/23 C03178361
_�7" 11 t-4 rf rt r� rri
Approved for Release: 2019/10/23 C03178361
\me'
6, COMMUNIST CHINA OFFERS TO WITHDRAW TROOPS
FROM DISPUTED SINO-BURMESE BORDER AREA
Premier Chou En-lai has declare
to Prime Minister Ba Swe o
Burma that Chinese Communist troops
"are prepared to withdraw" from the
disputed territory in the Wa States.
Chou stated that Com-
munist China finds it
difficult to accept
the present bound-
ary line but, in the
interests of a peace-
ful settlement, is
willing to accept the
Burmese suggestion
that Chinese troops
be withdrawn.
Chou, however,
called attention to the
presence of Burmese
troops near the "um-
determined boundary"
in the Kachin State
area. He requested
that these troops be
withdrawn, and ex-
pressed the hope
that Burmese troops
would also "cease to
advance" toward the
disputed area in the
Wa States in order to
avoid a situation prej-
udicial to a smooth
settlement of the
boundary question by
a joint commission.
r�
K ACHIN
? STATE
Myltkyina �
weje
Lashio �
� Mandalay
WA STATES
Rangoon
BURMA
SO AUGUST IPSO
vga undemarcated boundary
indefinite boundary
UNCLASSIFIED
0 100 200
miles
1 Sept 56 Current Intelligence Bulletin
CHINA
( YUNNAN
PROVINCE
LAOS
Bangkok
6082 8
Page 8
Approved for Release: 2019/10/23 C03178361
Approved for for Release: 2019/10/23 C03178361
Comment
Peiping had previously indicated it
would not withdraw its troops from the
disputed area but would "preserve the status quo" pending
a negotiated settlement. Its reversal of position follow
from Ba Swe which warned of "lasting enmity"
between the two countries and which threatened to give
further publicity to the issue by bringing it before the Bur-
mese parliament.
however, by no means re-
solves the Sino-Burmese border dispute as Rangoon will
almost certainly reject Chou's contention that any of its
troops in the Kachin State are in Chinese territory. The
Burmese have for some time been preparing a case con-
cerning this portion of the boundary; although no specific
representations have been made to Peiping.
Ba Swe would meet any continuing dead-
lock by renewing his effort to win the support of other neu-
tralist nations. Yugoslavia, India and Indonesia have al-
ready expressed their sympathy for the Burmese position.
.1 Sept 56
Current Intelligence Bulletin Page 9
TOP SECRET
Approved for Release: 2019/10/23 C03178361
Approved for Release: 2019/10/23 C03178361
7. NEGOTIATIONS FOR SOVIET AID TO
INDONESIA SUSPENDED
Ivan Semichastnov, the leader of the
Soviet delegation conducting negotia-
tions in Djakarta for Soviet economic
and technical assistance to Indonesia,
eorTedI1yTffleave for Moscow on 3 September. Semi-
chastnoves return to Moscow will give Bulganin and Khru-
shchev the opportunity to be briefed during the Indonesian
president's visit there, and the USSR may hope to include
a reference to Soviet aid in a joint statement at the end of
Sukarno's visit. Meanwhile, negotiations have been sus-
pended.
the Indo-
nesians had refused to be stampeded into signing an aid
agreement with the USSR, and were holding out for re-
strictions which would severely circumscribe Soviet ac-
tivities. Recently, the deputy chief of the Indonesian nego-
tiating team stated that the talks had been moving at a slow
pace because of a lack of understanding of each other's prob-
lems. Prime Minister Ali, moreover, told the American
ambassador that neither party has yet made any specific
proposals, confirming other information that each side has
been waiting for the other to take the initiative.
1 Sept 56
Current Intelligence Bulletin Page 10
-CONFIDENTIAL
Approved for Release: 2019/10/23 C03178361
Approved for Relea�se-7. -0971723 C03178361
Nor
8. SOVIET JOURNALIST DISCUSSES GERMAN UNIFICATION
AND EUROPEAN SECURITY
the
USSR did not insist that a united Germany
be Communist, it was impossible for the
USSR to abandon East Germany at the present time, just as
the West could not abandon West Germany. He said "some-
thing might be worked out" in the future if there were true
security guarantees and the question of Western bases were
settled, and if the West stopped demanding a Western-oriented
Eastern Europe. Pointing out that Molotov was no longer the
foreign minister, he urged that these questions be explored
further "without communiqu�and declarations:'
He urged a rapprochement between the
United States and the USSR and hinted that correspondence
between President Eisenhower and Marshal Zhukov on dis-
armament would be more productive than has the correspond-
ence with Premier Bulganin.
Comment Although the remarks on the present
prospects for German unification reflect
the flatly negative position taken by Khrushchev over the
past year, the suggestion of secret, informal negotiations
is new.
Soviet journalists in past conversations
have stressed the value of developing contacts between
President Eisenhower and Marshal Zhukov.
1 Sept 56
Current Intelligence Bulletin Page 11
Approved for Release: 2019/10/23 C03178361
Approved for Release: 2019/10/23 C03178361
-I I
"Nire *we
THE ARAB-ISRAELI SITUATION
(Information as of 1700, 31 August)
Egypt has protested to the UN Truce Super-
vision Organization that Israelis killed 13 Egyptian soldiers and
wounded two others in three attacks on 30 August. An Israeli
spokesman said he could neither confirm nor deny the Egyptian
complaints. Two of the attacks occurred in the Gaza strip and
the third near the El Auja demilitarized zone. The Israeli ac-
tion is probably in retaliation for the incident of early 30 August
in which two Israeli soldiers were killed and two others wounded
by the explosion of land mines near El Auja. The Israeli re-
sponse to Arab actions over the past few weeks indicates that sharp
Israeli reprisals can be expected to follow almost immediately
after future Arab incursions.
An Israeli broadcast from Jerusalem stated
on 31 August that Egypt has added the 500-ton Israeli merchant
ship Bat Galim to the Egyptian navy. The Bat Galim was seized
in the Suez CanalonSeptember 1954 as it was en route to Haifa
with meat and hides from Eritrea. Although the 10 Israeli crew
members were released in January, the Bat Galim has remained
in Egyptian hands. Egypt had previously announced that it was
going to put the ship up for auction.
The second of the two former British de-
stroyers purchased by Egypt is reported to have left the United
Kingdom. The first departed British waters last week and
stopped at Sicily on 29 August. Previous reports indicated that
both destroyers would have to sail without ammunition. Egypt
may find it difficult to find the particular type of ammunition
required.
1 Sept 56
Current Intelligence Bulletin Page 12
TOP SECRET
Approved for Release: 2019/10/23 C03178361
re, An, r9 "%Tr 1"1 Ft,
Approved for Release: 2019/10/23 C03178361
ovi
in New Delhi informed Cairo on 17 August that he had suc-
ceeded in obtaining 5,000 rifles, 20,000 grenades and 2,500
three-inch high-explosive mortar shells.
a new. Egyptian
query on the return of tanks previously requested. The
Egyptian request probably referred to the 20 Soviet T-34 tanks
reliably reported to have been delivered by Egypt to Syria in
early March. the 20 tanks were
on loan to Syria pending Czech deliveries of the Syrian-ordered
.T-34's.
1 Sept 56
Current Intelligence Bulletin Page 13
Tor SECRET
Approved for Release: 2019/10/23 C03178361