CURRENT INTELLIGENCE BULLETIN - 1956/09/18

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03178372
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: September 18, 1956

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CURRENT
INTELLIGENCE
BULLETIN
50
18 September 1956 /
:44
Ve,./007:071A
Copy No. �1
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OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
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CONTENTS
1. HAMMARSKJOLD'S VIEWS ON UN ACTION ON SUEZ
CLARIFIED (page 3).
2. SOVIET OFFICIAL ASSURES
UNLIKELY
) (page 4).
HAT WAR IS
3. EGYPT'S UNFROZEN RESERVES OF HARD CURRENCY
AND GOLD SUFFICIENT FOR PROLONGED PERIOD
(page 5).
4. CHINESE COMMUNIST PARTY CONGRESS
(page 6).
5. SOVIET-INDONESIAN COMMUNIQUE CRITICIZED IN
INDONESIA (page 8).
18 Sept 56
* * * *
� THE ARAB-ISRAELI SITUATION
(page 9)
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NOT
1. HAMMA.RSKTOLD'S VIEWS ON UN ACTION ON
SUEZ CLARIFIED
Secretary General Hammarskjold told
UN delegate Wadsworth on 14 September
that it would be futile to convoke the
Security Council on the Suez issue merely
on the basis of either side's complaints,
since that would 1 ad only to a deadlock. However, he does
believe the Security Council should be asked to invite a small
number of member nations to set up a Suez committee charged
with the limited task of exploring the possibilities of a settle-
ment on the basis of the 1888 convention.
Hammarskjold had expressed the same
opinions in a written response to a request from the Egyptian
UN delegate for Hammarskjold's views on Egypt's 10 Septem-
ber proposal for a new negotiating body, rejecting as imprac-
tical either a conference of 45 nations or a "renewed confer-
ence of 22:'
Comment These views suggest that Hammarskjold,
despite his agreement that this is not the
time for a Security Council meeting, is exploring the possi-
bilities for some type of UN action, however limited.
18 Sept 56
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SECRE-F-
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2. SOVIET OFFICIAL ASSURES
IS UNLIKELY
Comment on:
THAT WAR
Grigory T. Zaitsev, chief of the Middle
�East division of the Soviet Foreign Min-
istry,
agreed with the view
that the Suez crisis will not lead to war
gainst Egypt because the West "knows the seriousness of it
n the atomic age." I
Zaitsev said the unwillingness of a
ajority of NATO members to approve anything which would
ead to war and the disagreement within the British govern-
ent itself were added deterrents.
Zaitsev's remarks,
indicate that Moscow continues to believe that negotia-
tions can be prolonged as a means of forestalling military
action against Egypt. The Soviet statement
suggested that Moscow might take the initiative in bringing
the problem before the UN Security Council.
18 Sept 56
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3., EGYPT'S UNFROZEN RESERVES OF HARD CURRENCY
AND GOLD SUFFICIENT FOR PROLONGED PERIOD
Egyptian gold holdings and foreign as-
sets not affected by the British, French
and American freeze actions amount to
about $270,000,000, according to an of-
al in the National Bank of Egypt who informed the Amer-
ican embassy. Two thirds of this total is gold, while the
remainder is in foreign exchange and net balances against
various countries, including about $37,000,000 against the
Soviet bloc.
Comment
These unblocked reserves and the gold would allow
Cairo to pay for imports at present rates for about two years,
even in the event of a complete Western boycott of the canal.
Unless the imposition of Western economic sanctions causes
Egypt to tighten import restrictions, Egypt's 1956 foreign
exchange deficit will exceed its 1955 deficit of $88,700,000.
18 Sept 56
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4. CHINESE COMMUNIST PARTY CONGRESS
The Chinese Communist Party has used
its Eighth Congress, which is still in
session, to profess its devotion to col-
lective leadership and to take a few steps
in that direction. At the same time, the speeches at the
congress reveal that the stature of Mao Tse-tung--described
as the "great helmsman of the party"--has not been dimin-
ished.
While Mao clearly continues to dominate
the party, the distance between him and other leaders is be-
ing reduced. Mao is apparently to remain as chairman of
the central committee and politburo, but there are now to be
several vice chairmen. One of these, rather than Mao, will
probably head the new Standing Committee of the politburo.
Moreover, Mao will probably be replaced as chairman of a
new secretariat.
The congress provides fresh evidence
that Liu� Shao-chi remains the ranking Chinese Communist
after Mao. While Mao himself delivered the main address
at the previous party congress in 1945, he designated Liu to
give it this time. Liuts status will probably be formalized
by appointment as senior vice chairman of the party. Chou
En-lai still appears to be in the third-ranking position.
Chou En-lai's speech on the Second Five-
Year Plan (1958-1962) displayed Peiping's confidence that
the present rapid rate of industrial growth can be maintained.
Industrial output is to be increased by 100 percent, a rate
comparable to that which will probably be accomplished un-
der the First Five-Year Plan. Agricultural output is to be
raised by 35 percent--a very optimistic goal that is consid-
erably higher than the rate called for under the current Five
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Year Plan. Some Chinese ministries had earlier announced
higher goals, but the USSR in August Prows ed reduction in
Chinese economic plans,
Peiping's announced coals bresumabiv have been co-ordinated
with Moscow.
18 Sept 56 Current Intelligence Bulletin
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5. SOVIET-INDONESIAN COMMUNIQUE CRITICIZED
IN INDONESIA
e join donesian statement
signed in Moscow on 11 September ap-
pears to have become a highly contro-
versial issue in Indonesia and a majority
of the cabinet has joined in criticizing it.
Political and press criticism centers on
the failure of the statement to mention
Indonesia's claim to Netherlands New
Guinea and the fact that the statement it-
elf appears to be a violation of Indonesia's independent for-
eign policy.
Two major cabinet parties--the strongly
anti-Communist Masjumi and the vacillating Nandlatul Ulama--
have respectively "condemned" the statement and expressed
"displeasure:'
The press criticism has been countered
by an emergency decree banning publications critical of Indo-
nesian officials. The decree was promulgated on orders from
Prime Minister Ali, whose National Party, which heads the
coalition, has played down the joint statement as having "no
significance:' The Indonesian Communist Party has warmly
endorsed the communiqu�
The joint statement pledged closer friend-
ship between the peoples of the two countries, anticipated
increased cultural and economic relations, and listed inter-
national issues on which the two governments hold similar
views. Sukarno, now in Yugoslavia, will continue his Orbit
tour in Czechoslovakia and Communist China, where he will
participate in the anniversary celebrations on 1 October of
the Peiping regime.
18 Sept 56
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THE ARAB-ISRAELI SITUATION
(Information as of 1700, 17 September)
An Egyptian spokesman has charged that
on 16 September an Israeli patrol crossed the demarcation line
at Sabha, near the El Auja demilitarized zone, and clashed with
an Egyptian patrol. No casualties were reported. American
officials in Jerusalem reported a minor incident between Israeli
and Jordanian patrols on 16 September.
Israeli army cniei ot stall Dayan said in a
speech to army cadets on 17 September, "There is no other way
to protect the lives of oil and water drillers on our borders than
by setting a high price on their blood." Dayan said, "If we kee
away from the border, it will cease to he our frontier:'
Israel is preparing a new note to the UN
� Security Council protesting the Egyptian ban on Israeli shipping
through the Suez Canal, ac ording to a press report from Jerusa-
lem. (Press)A,0 /7
18 Sept 56
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