CURRENT INTELLIGENCE BULLETIN - 1957/11/02

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03178395
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: November 2, 1957

A;"132 for Release 2019/12/10
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CURRENT
INTELLIGENCE
BULLETIN
DOCIP17.7 NO
2 November 1957
Copy No. 138
TS lb'1 DAT
DATEin ViEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
/0107
TOP RET
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CONTENTS
1. EVIDENCE OF INDECISION IN MOSCOW
(page 3).
2. POLISH OFFICIALS' VIEW OF ZHUKOV'S DOWNFALL
(page 4).
3. CHINESE COMMUNIST MARSHAL ENDORSES KHRUSHCHEV'S
MOVE AGAINST ZHUKOV (page 5).
4.
5.
THE BERLIN SITUATION (page 6).
TURKEY REMAINS TENSE AS PARLIAMENT CONVENES
page 7).
6. JAPANESE OIL CONCESSION AGREEMENT WITH SAUDI
ARABIA AND KUWAIT EXPECTED SOON
(page 8).
7. CHINESE COMMUNISTS MOVE JET BOMBERS TO CANTON
(page 9).
8. INDIAN GOVERNMENT MAKES DRASTIC REDUCTION IN
FOREIGN EXCHANGE RESERVES (page 10).
9. LAOTIAN GOVERNMENT AND PATHET LAO AGREE ON
UNIFICATION TERMS (page 11).
10. GHANA MAY SOON AGREE TO EARLY SOVIET DIPLOMATIC
TI (page 12).
LATE ITEM
11. POSSIBLE PREPARATIONS FOR SECOND SOVIET SATELLITE
(page 13).
2 Nov 57
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1. EVIDENCE OF INDECISION IN MOSCOW
Comment on:
Evidences of a high-level meeting in
Moscow and the continuing delay in an-
nouncing a decision on Zhukov may
mean that the political struggle has
flared up again and perhaps involves
additional individuals and areas of dis-
agreement. The question of Zhukov's
future assignment or the statement of
charges against him may still be a subject of controversy
within the party's presidium or central committee.
The US embassy in Moscow reports that
rehearsals for the 7 November parade, which were last held
on 25 October, have not been resumed and that some military ve-
hicles and troops are not in their normal bivouac areas. The
embassy suggests that this situation could reflect concern
over the attitude of the military forces in the current crisis.
No unusual police activity was noted, however.
Western correspondents in Moscow have
reported that a large number of automobiles, many with mil-
itary license plates, were parked outside the Kremlin most
of 1 November. While there is some possibility that the cen-
tral committee is again in session, it is also possible that
military officers have been convened, perhaps for briefing on
the party's decision regarding Zhukov.
Other press reports from Moscow note that
the portraits of Premier Bulganin and Deputy Premier Mikoyan
and several other members of the 15-man party presidium
which were put up earlier this week have been taken down. The
removal of the pictures may reflect new uncertainty concerning
the outcome of the power struggle.
2 Nov 57
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2. POLISH OFFICIALS' VIEW OF ZHUKOV'S�DOWNFALL
Comment on:
Khrushchev at his
meeting with� Tito in Rumania in August
had agreed to allow Tito to "create a sphere of influence in
the Balkans!' In exchange for this concession to basic Yugo-
slav aspirations, Tito would support Khrushchev's measures
to "consolidate bloc CdmmunismP Khrushchev was unable to
deliver his part of the bargain because of opposition by the
military led by Zhukov.
Khrushchev and Tito are believed to have
reached a broad agreement in Rumania. Khrushchev may
have set forth a Soviet policy which would permit the graduail
development of a looser relationship between the USSR and '
the Satellites. Such a policy, in view of the events in Hungary
and Poland last fall, would probably have been opposed by the
Soviet military. This could in part have accounted for the dis-
missal of Marshal Zhukov. This interpretation reflects a nat-
ural Polish emphasis on Soviet-satellite relations but does not
give due consideration to the more basic and general conflict
between the army and party in the USSR.
2 Nov 57
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IL/ILA .111-111.41
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3. CHINESE COMMUNIST MARSHAL ENDORSES
KHRUSHCHEV'S MOVE AGAINST ZHUICOV
Marshal Liu Po-cheng's signed article
in the Peiping People's Daily on 30 Octo-
ber is an implicit Chinese Communist
approval of Khrushchev's move to oust
Zhukov as Soviet defense minister. With-
out referring directly to recent developments in Moscow, Liu,
a politburo member and one of Peiping's best known military
leaders, stressed, as do all Chinese pronouncements on party-
military relations, that "absolute hegemony of the party over
the armed forces" is a basic principle of the first importance.
Liu paid tribute to the Soviet armed forces,
stressed Peiping's debt to Moscow as a source of "basic prin-
ciples," and underlined Chinese Communist support of "social-
ist internationalism." His article implied, however, that the
Chinese had long ago taken steps to prevent the growth of a
similar problem in Communist China. Liu pointed out that the
Chinese Communists, profiting by "mistakes" made in the 1920's,
have consistently worked to ensure party control of the military.
Liu indicated continuing Chinese Communist awareness of this
problem, citing speeches made by Defense Minister Peng Te-
huai and Tan Cheng, director of the Chinese Communist army's
political department, during the Chinese Communist party con-
gress last fall.
2 Nov 57
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4� THE BERLIN SITUATION
Comment on:
Recent reports of impending restric-
tions on the East-West Berlin sector
border suggest that tighter controls
are to be established.
Ele-
vated trains will apparently no longer
cross the border but operate separately
in East and West Berlin, with passen-
gers changing at border stations now being readied for use
by the East Berlin authorities. Such action would restrict
freedom of movement in violation of quadripartite agreements,
but would not necessarily affect Allied access to East Berlin.
The ostensible purpose of this move is
to control currency, but the East German government undoubt-
edly welcomes this excuse to assert its authority over East
Berlin. Since the currency conversion on 13 October, the
new East German marks appear to have moved to the West
in such quantities as to render the conversion useless with-
out more drastic controls.
the party central committee had earlier considered
closing the sector border to prevent the flow of new East marks
to the West, but had rejected the scheme because it would have
invited economic retaliation.
2 Nov 57
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5, TURKEY REMAINS TENSE AS PARLIAMENT CONVENES
Comment on:
Considerable tension surrounded the open-
ing of the Turkish parliament on 1 Novem-
ber, with extensive military precautions
undertaken in Ankara to prevent possible
disorders. Martial law was declared in
one town in southern Turkey, following the
death of one policeman and destruction of
government property during a postelection
riot. Both government and opposition leaders have taken steps
to quiet the potentially explosive situation.
Because of the close popular vote, part of
which is being legally contested, an atmosphere of tension and
instability will probably continue for an indefinite period. If
the situation deteriorates, the government would not hesitate
to impose general martial law despite its serious psychological
Impact.
It will be a new experience for Turkey's neo-
phyte politicians to operate the National Assembly in the face of
a large vocal opposition.
2 Nov 57
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Nap,
6. JAPANESE OIL CONCESSION AGREEMENT WITH SAUDI
ARABIA AND KUWAIT EXPECTED SOON
Comment on
An oil concession agreement for Japanese
development of the Saudi-Kuwait neutral
zone offshore area may be signed soon.
The American consul general in Kuwait
reported on 29 October that the Saudis
now appear to have succeeded in persuad-
ing the ruler of Kuwait, who has equal
rights with the Saudis in the neutral zone,
to accept the Japanese proposal instead of
competing American proposals0
the agreement apparently breaches the pat-
tern of a 50-50 division of profits which prevails in the Middle
East, and provides 56 percent for the Arab governments against
44 percent for the Japanese company.
however, when large volume discounts included in the agreement
are taken into consideration, the profit split is reversed to 60-40
in favor of the Japanese concessionaire.
During the six-month negotiations, the Saudis
were primarily interested in breaking the prevailing pattern of
equal division of oil profits. They have believed that introduc-
tion of a non-American group into their oil development could in
time be exploited to obtain better terms from the present Amer-
ican concessionary companies.
2 Nov 57
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7. CHINESE COMMUNISTS MOVE JET BOMBERS TO CANTON
Comment on:
Jet light bombers were detected in an
unprecedented move on 29 October from
Peiping to Canton, via Hankow. While
this move may be an exercise, it places
up to 15 jet bombers in the Canton area
for the first time and may presage the deployment of the entire
10th Air Division, equipped with an estimated 60 IL-28's, to
South China.
The basing of a jet light bomber division
in the Canton complex would substantially increase Chinese
Communist offensive capabilities against Taiwan and the off-
shore islands.
COMBAT RADIUS
OF
IL-28 FROM CANTON
CHINA
HANKOW
FLIGHT ROUTE
29 OCTOBER 1957
2 NOVEMBER 1957
2 Nov 57
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8. INDIAN GOVERNMENT MAKES DRASTIC REDUCTION
IN FOREIGN EXCHANGE RESERVES
Comment on:
The Indian government, in a new move
to combat its financial crisis, has decided
to risk drawing down its foreign exchange
reserves to a level which could have ad-
verse internal repercussions and under-
mine India's international credit position.
A presidential ordinance of 31 October
authorizes the government to reduce the
legal reserve requirement from $630,000,000, the level of
sterling balances required since August as backing for the
currency, to a new minimum of $179,000,000. Even this min-
imum amount may be drawn on for a limited period, although
the government apparently hopes it will not be necessary to
do so.
New Delhi's action may have been prompted
by the report of Finance Minister Krishnamachari, who re-
turned from a tour of Western countries in search of foreign
credit apparently with "cautious optimism" but no immediate
commitments. The government's reported estimate that food
imports this year will have to be more than doubled as a re-
sult of the severe drought in northern India, necessitating an
additional unexpected drain on foreign exchange, may also
have been a factor.
In recent months, Indian financial circles
have expressed the fear that any further reduction in the re-
serve requirements would have serious finarwinl rinsPrmences
which might involve a flight of capital.
2 Nov 57
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9. LAOTIAN GOVERNMENT AND PATHET LAO
AGREE ON UNIFICATION TERMS
Comment on:
A settlement between the Laotian gov-
ernment and the Pathet Lao, including
the entry of Pathet representatives into
the Laotian cabinet, is now apparently
only a formality. Pathet
chief Souphannouvong
confronted leading deputies of
Laos' two major political parties in Prime
Minister Souvanna Phouma's office and an-
nounced that the Pathets had approved the
political agreement as revised by the Lao-
tian cabinet and would sign a military
agreement later the same day.
Souvanna declared that in view of these
developments, he would press for both cabinet approval of
the agreements and the investiture OLa coalition government
on the following day. The American ambassador's sharp pro-
test against such haste is probably responsible for the assem-
bly's decision not to vote for the immediate establishment of a
coalition government. Barring a last-minute hitch, the assem-
bly will approve the agreements, and a coalition government
will be presented for investiture on 11 or 12 November.
2 Nov 57
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10. GHANA MAY SOON AGREE TO EARLY SOVIET
DIPLOMATIC TIE
Comment on:
Ghana is likely to establish cliplo-
matic relations with the USSR in the
near future, thereby affording the
Soviet Union entry into West Africa
which it has sought since early 1956.
Such an agreement might in turn in-
duce Liberia, which is ,anxious not to
be outdone by its new and more pros-
perous regional rival, to accept a
Soviet mission in Monrovia.
Although remarks made by Ghana's
Prime Minister Nkrumah to the American ambassador in
Accra on 10 October suggested that Ghana was not contem-
plating early ties with Moscow, a high government official
subsequently told the embassy that it "seemed increasingly
likely" that a Soviet mission would be established in Accra
"soon." The British Foreign Office indicated on 30 October
that earlier contacts between Ghana and the USSR on the sub-
ject of relations had been renewed and that a decision might
be forthcoming "in the next few weeks' Any such talks are
presumably taking place between Ghanian and Soviet diplo-
mats in London.
2 Nov 57
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11. POSSIBLE PREPARATIONS FOR SECOND SOVIET SATELLITE
(Information as of 0100 EST, 2 November)
Comrnpnt (in�
The precise meaning of the KRUG alert can-
not be determined at this time, although this could be initiation
of practice for a satellite launching attempt within a few days.
The KRUG system was similarly alerted to activity on 39 Sep-
tember, four days prior to the launching of the first Soviet sat-
ellite on 4 October. Other range activities, which in aggregate
have also indicated preparations for a launching, have been
sporadic for the past week and are not currently firm enough to
predict a launching date.
2 Nov 57
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