CENTRAL INTELLIGENCE BULLETIN - 1958/02/27

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03179854
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: February 27, 1958

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27 February 1958
Copy No. 137
CENTRAL
INTELLIGENCE
BULLETIN
DOCUMENT NO.
NO CHANGE IN CLASS.
I DECLASSIFIED
CLASS. CHANGED TO: TS 12,20) 0
NEXT REVIEW DATE:
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27 FEBRUARY 1958
I. THE COMMUNIST BLOC
USSR hints it might modify its
conditions to bring about summit
conference.
II. ASIA-AFRICA
Indonesia - Sukarno may blame
dissidence on West in major speech
next week.
Japan and Communist China sign
agreement on substantial exchange
of steel for iron ore and coal.
III. THE WEST
British Government prepares policy
statement expected to call for disen-
gagement in central Europe.
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CENTRAL INTELLIGENCE BULLETIN
27 February 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
Summit talks--Soviet view: In contacts with West-
ern diplomats, Soviet Foreign Ministry officials are
probing to determine what steps would be necessary
to bring about a summit meeting. The French have
been told Moscow is preparing a new series of letters,
and that there would be no objections to a foreign
ministers' meeting if there were prior agreement on
a date for a summit conference.
(Page 1)
II. ASIA-AFRICA
Indonesia: President Sukarno is scheduled to
deliver a major speech on 3 March in which he is
expected to cast the current rebellion in terms of
Western support for the dissidents and to demand
an all-out campaign against the rebels. There are,
on the other hand, rumors of growing underground
resistance to Sukarno in Java. Djakarta, meanwhile,
has denounced the 20 February seizure of an Indo-
nesian-operated vessel by a Dutch warship as piracy
intended to support the rebel cause.
(Page 2)
Japanese - Chinese Communist trade: Commu-
nist China has agreed to export substantial quantities
of coal and iron ore to Japan in exchange for steel
products under a five-year barter contract with
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.2iriv,e1,3 Japanese steel industry interests involving
$280,000,01i1Pn trade each way. Japanese steel
sales to Comn,unist China have spurted since the
relaxation of strategic trade controls in 1957, and
substantial further expansion, to an extent threat-
ening remaining COCOM controls, is possible.
(Page 3)
III. THE WEST
Britain: The government is preparing a policy
statement dealing with the problem of "disengage-
ment" in central Europe. Despite lack of support in
the Foreign Office, the cabinet is anxious to show
some initiative for domestic political reasons, and
will probably call for Western endorsement of some
svc: compromise between the Rapacki plan and the 1955
Eden plan for reduction of forces and arms on either
side of the East German� Polish border. German
reunification will remain central to any British pro-
posal.. (Page 4)
27 Feb 58
DAILY BRIEF ii
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I. THE COMMUNIST BLOC
Soviet Views on Summit Conference
In recent conversations with French and American
diplomats, Soviet Foreign Ministry officials have said
that Moscow is preparing a new series of letters on a
summit conference. In a slight modification of its pre-
viously adamant stand against a foreign ministers' meet-
ing, the USSR told the French it would agree to a foreign
ministers' meeting provided there was prior agreement
on a date for a summit conference.
Foreign Minister Gromyko told the French that dis-
cussion of German unification would be pointless, and he
said that the control of outer space could be discussed
only in connection with nuclear disarmament. First
Deputy Foreign Minister ICuznetsov told Ambassador
Thompson that some topics could be settled quickly at
a summit conference with little preparation�including
a ban on testing nuclear weapons and the thinning out of
troops in Germany.
Kuznetsov also asked Thompson what type of delega-
tions President Eisenhower had in mind when he suggested
exchanges with the USSR to improve the chances for East-
West negotiations. As one possibility he mentioned an
exchange of members of the Supreme Soviet and Congress.
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IL ASIA-AFRICA
Indonesian Situation
Indonesian President Sukarno is applying "harsh
pressure" to make non-Communist elements in Java
declare their support for the central government's
campaign against the rebels,
The recent declaration of the
Nandlatul Ulama, a Moslem party, urging suppres-
sion of the dissidents, allegedly resulted from
Sukarno's threats to expose corruption in party lead-
ership. Sukarno is said also to have threatened to
jail supporters of Hatta if the former vice president
does not denounce the rebels.
Sukarno is scheduled to make a major speech
on 3 March in which he is expected to announce an
all-out campaign against the rebels and their sym-
pathizers. In an attempt to marshal mass support
for his policy of firmness, Sukarno is likely to re-
new charges of Western involvement and to demand
unity in the face of "imperialist attempts" to divide
the country.
Strong action against recalcitrant non-Commu-
nist leaders in Java might force some of them under-
ground to join Moslem dissidents (Daral Islam) now
increasing their antigovernment terrorist activities
in VJ - and Central Java. The possibility of further
t:2;ay.:;rnment efforts is suggested by rumors of
the defection of one battalion in West Java which is
said to be under the influence of dissident Colonel
Lubis. Lubis is alleged to have returned from
Smiaatra recently to foment anti-Djakarta military
action.
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Japanese Sign Major Steel Contract
With Communist China
An ambitious barter contract signed in Peiping on
26 February between Japanese steel industry representa-
tives and Chinese Communist officials calls for the ex-
change of $280,000,000 worth of Japanese steel products
for an equivalent amount of Chinese iron ore and coal over
a five-year period. Japanese response to possible polit-
ical demands by Peiping in the future, plus the quality and
price of Chinese raw materials, will determine whether
this target will be achieved.
Preliminary announcements indicate that the steel
products involved in the contract are no longer embargoed
by COCOM and are already being exported in increasing
amounts since the relaxation of controls last year. The
long-term plan, however, may envisage ultimate inclusion
of more highly strategic items. The first year's goal of
$28,000,000 each way appears within reach, inasmuch as
the Japanese indicate they can supply 250,000 tons of steel
products in 1958 and Peiping alleges that large amounts of
raw materials are now available for export to Japan.
The barter contract is separate from Sino-Japanese
talks, scheduled to begin in Peiping shortly for a general
trade agreement and exchange of permanent trade missions.
However, Japanese indications of readiness to comply with
Peiping's terms for establishment of the trade missions may
have substantially influenced China's willingness to conclude
the barter deal. During negotiations over the past years
Peiping, in an effort to extract major political and eco-
nomic concessions, has refused to supply raw materials
for Japanese heavy industry.
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II I. THE WEST
London Preparing Disengagement Proposal
Beset by public pressure to show further initiative
toward relaxing international tensions, the Macmillan
government is preparing a policy statement on "disen-
gagement" in central Europe. New British proposals
will probably call for the West to offer some variation
of the Rapacki plan, with German reunification included.
There has been Foreign Office opposition to any such
initiative, and an earlier interdepartmental study was
generally negative.
A Foreign Office official expects that the substance
of the new proposals will amount to a restatement of the
Eden plan as presented to the 1955 foreign ministers'
conference, calling for a reunited Germany and a zone on
either side of the present East German - Polish border in
which forces and armaments would be reduced and sub-
ject to mutual inspection.
Despite certain diplomatic and political advantages
in adhering closely to the Eden proposals, the final policy
review may bring Britain to advocate greater modification
of established Western positions than the official's state-
ment suggests. The Labor opposition, supported by con-
siderable independent opinion, insists that Western
counterproposals be made more attractive to Moscow.
-CONFIDENTIAL
27 Feb 58 CENTRAL INTELLIGENCE BULLETIN
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