CENTRAL INTELLIGENCE BULLETIN - 1958/05/05

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03179861
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 18
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: May 5, 1958

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5 May 1958
Copy No. 140
CENTRAL
INTELLIGENCE
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5 MAY1958
I. THE COMMUNIST BLOC
USSR trying to stiffen French
rightists' stand on Algeria and
discredit Western mediation.
Hungary endorses Yugoslav
"independent road to socialism. "
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East German regime forcing pace
of farm collectivization in face of
peasant opposition.
II. ASIA-AFRICA
Indonesia - Sukarno suggests
government may invite foreign
military "volunteers. "
Breaks in 50/50 profit-sharing
formula in Saudi Arabia would
lead to renegotiation of existing
oil concession terms in Middle
East.
Emergency measures foreshadow
tougher British repression in
Aden and possibly operations
against Yemen.
0 Laotian Communists will probably
protest 4 May elections, and have
capability of resuming guerrilla
warfare.
0 South Korea - President Fthee's
party falls short of winning
two-thirds majority in 2 May
assembly elections.
III. THE WEST
French Socialist statement of
intention to remain aloof further
reduces chances of centrist
coalition in forming new
government
Guatemala - Disillusionment with
President Ydigoras' lack of action
growing; no immediate threat to
regime.
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CENTRAL INTELLIGENCE BULLETIN
5 May 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
Soviet tactics on North African issue: The Soviet line
in Paris is to try to stimulate suspicion and resentment to-
ward American policy by means of private talks with French
leaders, particularly right-wing elements. At the same
time, public Soviet attacks on French actions in Algeria have
Increased and sharpened in tone. Moscow's aim apparently
is to stiffen French resistance to any compromise solutions
in North Africa and to discredit mediation efforts by the
United States and Britain. (Page 1)
Hungary: A Hungarian commentary on the Yugoslav
party program specifically endorses "the right of the Yugo-
slav party to f011ow its road." This deviation from Mos-
cow's current public position on the Yugoslav party program
suggests that ICadar now may be trying to follow in Gomulka's
steps--emphasizing a degree of independence from Moscow--
in an effort to gain some measure of national popularity for
himself and his regime. The fact that the Hungarian com-
ment, first published in the party's theoretical journal, was
reprinted in the party's daily newspaper is unusual.
(Page 2)
East Germany: The growing shortage of manpower in
East Germany will probably be accentuated in 1958 by an in-
crease in the number of peasants fleeing to the West. The
farmers are stubbornly resisting agricultural collectiviza-
tion, which is being pushed at such an increased pace that
675 new cooperatives were formed during the first quarter
of 1958 as compared with 520 for all of 1957. Between 35
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and 40 percent of East German farmland is collectivized,
and the regime hopes to achieve a total of 50 percent by
1960. (Page 3)
II. ASIA-AFRICA
Indonesia: President Sukarno has publicly suggested
the possibility that foreign military "volunteers" may be
invited to help Indonesian government forces. Secretary
General Aidit of the Indonesian Communist party has sent
a telegramto US Ambassador Jones threatening action
against US economic interests in Indonesia "if aid from your
country, both open and covert, to the rebels is not immedi-
ately stopped." In this connection, the Communists are the
dominating influence among workers in American-owned
oil and rubber enterprises on Sumatra, and this influence
is growing. The largest oil workers' union and the largest
rubber estates workers' unio7 are both Communist con-
trolled. (Page 4) (Map)
Middle East oil concessions: Recent actions by the
Standard Oil Company of Indiana (Stanolind) may usher in
serious new troubles on the Middle East oil scene. Stano-
lind is the first American company to break with established
contractual arrangements. The company agreed last week
to a 75/25 profit split in favor of Iran and a joint manager-
ment agreement for a concession in that country's promis-
ing offshore area. It now seems probable that the company
will seek a concession in Saudi Arabia which may also re-
sult in a radical departure from the status quo. These
moves probably will provide the basis for demands for
sweeping changes in existing concessions throughout the Mid-
dle East. A prolonged period of negotiation between area
countries and operating companies would give radical na-
tionalist and leftist elements an opportunity for increased
anti-Western agitation.
(Page 6)
5 May 58
DAILY BRIEF
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X�M
Aden-Yemen: The governor of Aden declared a state
Of emergency in the colony on 2 May following a general
strike and several bomb-throwing incidents. The increased
powers thus given the police and London's intention to main-
tain its troop strength at its recently reinforced level sug-
gest that Britain plans to take stiffer measures against
Yemeni-inspired subversion. The British now are concen-
trating on maintaining their authority by force on the un-
demarcated frontier, and they may feel compelled to coun-
ter Yemeni penetration by stimulating operations across the
disputed border, possibly in connection with an attempt to
overthrow the Imam. (Page 7)
Laos: Regardless of the number of seats they win in
the 4 May Laotian elections, the Communists will probably
protest the results, charging government fraud and repres-
sion. Failing political redrdss which could inclu-de an ap-
peal to the:InternatiOnal Control Commission, the Commu-
nists tnayresort to guerrilla warfare. Government security
forces are not considered strong enough to cope effectively
with a resumption of large-scale, organized guerrilla op-
erations.
The Communists are known to have caches of small
arms, and these could be augmented from neizhboring North
Vietnam and Communist China. (Page 8)
South Korea: In the 2 May assembly elections, Presi-
dent Rhee's Liberals have gained enough seats to command
a working majority but not the two-thirds needed to deprive
opposition Democratic Vice President Chang Myon of his
right of succession. Reports from observers in South Korea
indicate the elections were relatively free as compared with
previous voting in the country. (Page 9)
III. THE WEST
France: Mollet's declaration that he will not reverse
his Socialist party's decision against participating in a new
5 May 58
DAILY BRIEF iii
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X X
French government "even if the political crisis lasts eight
weeks" will discourage further candidates for the premier-
ship from the center parties whom President Coty had
counted on to bridge the gulf between the non-Communist
left and the rightists.
Guatemala: Disillusionment with President Ydigoras
and criticism of his failure to take positive action on any
major domestic problem has grown rapidly in the two months
since his inauguration. While no immediate threat to the
government is apparent, continuation of the present trend
would further enhance growing leftist strength and could
imperil Ydifforas' chances of completing his six-year term.
(Page 10)
5 May 58
DAILY BRIEF iv
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I. THE COMMUNIST BLOC
USSR Seeking to Exploit France's North African Problems
Soviet Ambassador Vinogradov recently told French
Socialist leader Mollet that the USSR favors a "French"
solution of the Algerian problem and implied that Moscow
would oppose any move to internationalize this question.
He indicated, however, that the USSR would seek a role in
any mediatory efforts should the problem be international-
ized. Vinogradov also attacked the US-UK good offices
mission in the Tunisian dispute as interference in French
internal affairs.
The USSR apparently is also seeking to develop closer
relations with Algerian rebel leaders. The Tunisian ambas-
sador in Paris recently stated that the permanent Damascus
representatives of the Algerian National Liberation Front
(FLN) was meeting bloc diplomats regularly. He also re-
ported that the USSR agreed last year that Czech arms should
be made available to the rebels at bargain prices and that
Moscow had recently expressed willingness to "assume the
risks" of delivery to Algeria.
Soviet policy on North Africa probably is based on the
assumption that prolongation of the Algerian conflict will
aggravate domestic troubles in France, impose growing
strains on France's relations with its NATO allies, and in-
crease the dependence of the Algerian rebels on the United
Arab Republic and the Soviet bloc for military and politi-
cal assistance. Soviet overtures to French leaders, includ-
ing right-wing elements, are intended to stiffen French re-
sistance to any compromise solutions in Tunisia and North
Africa and to discredit mediation efforts by the United States
and Britain. There are some indications that some French
leaders may be invoking Soviet assurance of support for a
Frenchs6lution of the Algerian problem to elicit more Amer-
ica9A5�ing for French policies.
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1,-� %AL 1.VLL.LL V .1 111.L1
Nagar Nue
Hungarian Party Journal Endorses Yugoslav "Separate Road"
A Hungarian commentary on the Yugoslav party program
initially published in the party's theoretical journal specifi-
cally endorses "the right of the Yugoslav party to follow its
own road," although it echoes the Moscow Kommunist article
in condemning various Yugoslav deviations from Soviet the-
oretical positions. This unusual departure from Moscow's
current public position on a key issue concerning Soviet-
Yugoslav relations suggests that Kadar may be seeking pop-
ular support for himself and his regime by trying to follow
in the steps of Poland's Gomulka--by emphasizing his inde-
pendence from Moscow.
The subsequent reprinting of this article in the Hungar-
ian party's daily newspaper is unusual. The new Hungarian
line may even be designed to soften present Soviet-Yugoslav
ideological disagreement. For example, it expressly an-
swers Yugoslav fears of a new Cominform by declaring:
"No party can be compelled to submit itself either in theo-
retical or practical issues to the decisions of international
forums." Other statements may be designed to lessen Yugo-
slav objections to Soviet leadership of the "socialist world
order" and to justify Yugoslavia's failure to join the "social-
ist camp" as well as its acceptance of loans from the West.
The publication of these pro-Yugoslav views in Hungary
may spark further internal party contention, since Moscow-
oriented hard-line elements are likely to be seriously con-
cerned if they believe this article to be a concession by Ka-
dar on the key issue of Soviet leadership of the bloc. It is
notable, ho or, that no adverse comment has been ob-
serve � the bloc press to date.
CONFIDENTIAL
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Lii11.01 VA JULP.1441, V .11.1-114
Nape Nair'
East German Campaign Against the Farmer
The socialization of East German private farmland is
continuing at a rapid rate. During the first quarter of 1958,
675 new cooperatives were formed, compared with 520 es-
tablished during all of 1957. The regime intends to social-
ize at least 50 percent of East Germany's agricultural land
by 1960--the current proportion is 35-40 percent--despite
decreasing manpower to work the socialist acreage as the
program develops.
A heavy propaganda campaign is accompanying regime
efforts to bring private farmers under state control, but
peasant resistance to these blandishments is stubborn. The
outspoken reaction of the farmers to the campaign indicates
that East Germany's shortage of manpower will be accentu-
ated by continued flights of farmers to the West.
A recent authoritative Soviet article on satellite collec-
tivization indicates that regime leaders are again, as under
Stalin, being urged to take whatever risks are necessary in
order tp push agricultural collectivization as rapidly as pos-
sibl .
CONFIDENTIAL
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INDON I
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II. ASIA-AFRICA
Situation in Indonesia
In a 2 May speech to university students in Bandung,
President Sukarno repeated official charges that "foreign
adventurers" andvolunteers from "Taiwan and even the
United States" are helping the dissidents. Ee suggested
that if volunteers from one side in the cold war were bomb-
ing Indonesia, he could easily invite "volunteers from the
other side" to assist him.
Taking advantage of the wave of official protests against
alleged American intervention, Secretary General Aidit of
the Indonesian Communist party sent a personal telegram
on 2 May to the American ambassador in Djakarta. He
threatened to encourage action against American interests
in Indonesia if "aid, both open and covert, of weapons from
your country, to the rebels is not immediately stopped."
The Communists are the dominant influence among workers
in American-owned oil and rubber enterprises on Sumatra.
, the North
Celebes dissidents have acquired more aircraft. This in-
formation, coupled with the harassment of shipping and mil-
itary movements in East Indonesia already undertaken by
the dissidents and fear that the rebellion may spread, has
convinced both army headquarters and political leaders of
the desirability of a peaceful settlement.
the North
Celebes dissidents were ,planning to attempt an amphibious
landing on 5 May at Susupu, north of Djailolo on Halmahera
Island. The landing force of 500 men was to be drawn from
Morotai, which the dissidents seized on 28 April. A force
of 200 would remain on Morotai. Government forces at
Djailolo are estimated at 300.
A rebel plane was shot down on 1 May during an attack
on Ambon, according to Indonesian press sources. They
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report that the plane crashed into the sea and that another
plane was damaged. According to the Indonesian news agency,
Antara, a third plane exploded during an attack on Makassar,
resulting in the death of two American pilots and several Na-
tionalist Chinese personnel.
The army officially announced the "liberation" of Bukit-
tinggi on 4 May.
the press
report that a rebel plane attacking Ambon was shot down,
but gives no details.
The government's mopping-up campaign in Sumatra ap-
pears to have encountered some difficulty in the Siantar area
of North Sumatra.
the situation at Siantar "is extremely critical," and that
the dissidents were "presenting great strength" at a town
southeast of Siantar. These rebels apparently are remnants
of the group that defected at Medan in mid-March.
government forces have
negligible dissident guerrilla activity in the Padang-Bukitting-
gi area.
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New Saudi Oil Agreement Seen Likely
The Standard Oil Company of Indiana (Stanolind), whose
agreement last week with the Iranian Government was a major
deviation from the established 50/50 profit-sharing formula
in the Middle East, now may conclude a deal with Saudi Arabia
which goes even further. While the Stanolind-Iranian deal,
calling for a 75/25 split, is not the first break in the estab-
lished formula--an Italian government-controlled monopoly
signed a similar agreement last August--the fact that an
American firm with substantial resources was willing to de-
part from the standard 50/50 profit split, as well as to en-
gage in a joint management scheme with an area government,
probably will result in stepped-up pressures from the Arab
countries for both an increased share in their oil wealth and
a direct hand in the management of the companies.
Impressed by Stanolind's willingness to depart from es-
tablished world petroleum practice, Saudi Arabia apparently
will offer the company a concession in the so-called preferen-
tial area. This area has become especially attractive since
the major Aramco oil discovery last October near the border
of the preferential area. The Saudi offer reportedly will
include a 60/40 profit split in favor of the government and
fully integrated marketing facilities. The latter condition,
long sought by the Arab countries, could include profits on
company operations from production, through refining, and
finally on sales "right down to the service stations."
Aramco, which under the terms of its concession agree-
ment has the right to match any offer for the preferential
area, will find itself in a dilemma. In matching the offer,
the company would have to agree to conditions it has been
fighting for several years, namely, Saudi participation in the
company management. If the company failed to match such
an offer, however, it would nonetheless be under extreme
pressure to accept these conditions in its nracorif r.oncession
area.
5 May 58
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London May Stiffen Policy in Aden-Yemen Situation
The governor of Aden declared a state of emergency in
that British colony on 2 May following the 25 April general
strike and several bomb-throwing incidents. The increased
powers given to the police by the emergency decree and
London's apparent intention to maintain the strength of Brit-
ish troops in Aden at the recently reinforced level of 2,550
suggests that Britain plans to take stiffer measures against
Yemeni-inspired subversion.
Twelve persons were injured in the bomb-throwing.
London is convinced that Yemen's accession to the United
Arab Republic will result in increased terrorism such as
the Yemeni and Egyptian sabotage of the large Aden refinery
last March. Foreign Secretary Selwyn Lloyd would not dis-
cuss the Aden situation with the American ,ambassador on
26 April beyond saying that he "didn't like it."
The British appear determined to prevent a diminution
of their control now, although they are pessimistic that they
can retain their position in Aden for more than a few years.
London apparently believes efforts to encourage a federation
of protectorate states and displays of force along the border
may prove insufficient, as direct Yemeni planning of the
latest dissident attack in Dhala appears evident.
British security and military operations are unlikely
to restore order as long as the dissidents receive material
support and sanctuary in Yemen. London may therefore
feel compelled to extend its military operations across the
disputed border into these refuge areas, perhaps in connec-
tion with an attempt to overthrow the Imam.
the Imam
expressed anxiety and stated that "it is feared that something
will happen, the results of which will not be pleasing."
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-ow�
Laotian Elections
The future direction of the Communist movement in
Laos will be largely determined by the outcome of the 4
May supplementary elections in which the Neo Lao Hak
Zat�successor to the Pathet Lao--hopes to consolidate its
overt penetration of the Laotian Government. Unless the
election results, which may take more than a week to com-
plete, justify last fall's Communist strategy in exchanging
bullets for ballots, a resumption of open warfare--as threat-
ened by the Communists in the event of their defeat--is a
distinct possibility. Government strong-arm measures
during the campaign period, highlighted by the emergence
of the heretofore politically apathetic army as a major in-
strument on the side of the conservatives, have seriously
alarmed the Communists.
Initially, the Neo Lao Hak Zat will probably seek politi-
cal redress through local and international channels in event
of a reversal at the polls. A basis for cantesting the results
on the grounds of government fraud and repression has al-
ready been laid by the Communists through documented pro-
tests to the International Control Commission, which is
watching the election carefully. P ending their evaluation of
the government's postelection policy toward them, the Com-
munists may decide that recourse to guerrilla warfare is
their only alternative to obliteration. Government security
forces are not considered strong enough to cope effectively
with large-scale, highly organized guerrilla operations.
The Communists are known to have cached arms when
they surrendered their military base in northern Laos earlier
this year, and could receive additional equipment fainl
quiglely from neighboring North Vietnam and China.
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L4Fi 'TI' JULIZJI V
South Korean Election Results
By winning a total of 121 seats in the 233-member South
Korean assembly, President Syngman Rhee's Liberal party
has gained a comfortable working majority which should
prevent legislative deadlocks. The Liberals, however, have
not gained enough strength to command a two-thirds majority,
even with the aid of independents, and thus to enable them to
pass a constitutional amendment depriving opposition Demo-
cratic Vice President Chang Myon of his right of succession.
The Democrats increased their representation in the
assembly, but fell short of the gains many experienced ob-
servers had anticipated. Last-minute promises by the Lib-
erals to introduce various public welfare measures after the
election may have cut into the Democratic vote.
Although the Democrats have charged that the elections
were conducted unfairly, few instances of violence or police
intimidation appear to have occurred. Press reports indi-
cate that the election was the quietest in the republic's history.
The "soft" tactics employed by Liberal party chairman Yi
Ki-pung apparently were successful.
Liberal morale undoubtedly has been bolstered consider-
ably by the election results, and the interest of some Liberal
politicans in effecting a rapprochement with the opposition
Democ kts probably will lessen. Liberal party discipline un-
ques onably has been strengthened, as has the two-party
sy em in Korea.
5 May 58
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III. THE WEST
Guatemalan Public Becoming Disillusioned
With New President
Two months after his inauguration, Guatemalan Presi-
dent Ydigoras has yet to show the able leadership expected
of him. He has thus far failed to come to grips with any
major economic or political problem, and his exploitation
of Guatemala's century-old claim to British Honduras has
been recognized by influential segments of the press as a
purely diversionary tactic. Disillusionment with the new
administration is growing among some politicians and army
officers, and the general public is becoming apprehensive.
While no immediate threat to the government is apparent,
continuation of the present drift would seriously imperil
Ydigoras' Chances of completing his six-year term and
further enhance growing leftist strength.
In Congress, where the pro-Ydigoras minority has been
continually on the defensive and has shown little initiative
or ability, the show is being stolen by the small but able
and aggressive bloc of the leftist Revolutionary party (PR).
The resurgent political left has made such gains in recent
months, after three years of suppression, that many -observ-
ers feel that the PR would win Overwhelmingly if elections
were held now. The Communists, already quietly active in
the PR's lower echelons, hope to gain increased influence
during the party convention scheduled for next month. Even
It maneuvering between the party's current moderate lead-
ership and the pro-Communist faction results in a split in
the party, leftists will probably continue to enjoy nearly
ideal conditions for further gains until the administration
shows firm leadership and adopts a program with popular
aDneaL-
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