CENTRAL INTELLIGENCE BULLETIN - 1958/05/13

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03179868
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 19
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: May 13, 1958

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13 May 1958
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CENTRAL
INTELLIGENCE
BULLETIN
CHild.',GED TO: -1(
NEXT REViEW DATE:
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DATE.
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REVIEWER:
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13 MAY 1958
I. THE COMMUNIST BLOC
Khrushchev's 6 May speech on Soviet
chemical industry is his most positive
statement to date claiming Soviet eco-
nomic superiority over US.
Polish-Hungarian communique avoids
mention of Soviet dispute with Belgrade.
IL ASIA-AFRICA
Lebanon - Disorders continue, with
growing indications of UAR support
for President Chamoun's opponents.
Husayn of Jordan and Faysal of Iraq
scheduled to meet shortly to set up
framework of Arab Union government.
Greece - Kararaanlis should be able to
form one-party government; Communist-
front party shows gains.
New Moroccan cabinet reflects Istiqlal
party's political dominance.
Indonesia - Mass demonstrations
planned on Java to protest foreign
intervention.
� Communist and leftist gains in Laotian
elections portend further inroads, takinf
advantage of conservative disunity.
0 India - Forced resignation of two state
governments may be start of Congress
party house cleaning.
III. THE WEST
0 France - Politicians' willingness to
risk long crisis increases chances of
a De Gaulle solution or Communist
support for leftist premier.
0 Iceland may shortly announce unilateral
extension of territorial limits to 12
miles.
Leftist trend in Chile furthered by
congressional action to make Com-
munist party legaL
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CENTRAL INTELLIGENCE BULLETIN
13 May 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
Soviet economic planning: Khrushchev's lengthy speech
on the expansion of the chemical industry delivered to the
Soviet party central committee on 6 May is his most positive
and detailed claim to date that the superiority of the Soviet
economic system now has been demonstrated. The speech,
containing extensive comparisons of current US and Soviet
economic data, will be a basic document for Soviet propa-
gandists. Khrushchev asserts that the successful estab-
lishment of the Soviet heavy industrial base will--in the
shortly-to-be-announced Seven-Year Plan (1959-1965)--
begin to compensate the Soviet consumer for his 40 years
of self-sacrifice. Khrushchev is now beating the drums
for chemical synthetics in textile production with the same
enthusiasm that marked his support of the virgin lands and
corn programs. (Page 1)
Poland-Hungary: The joint Polish-Hungarian declara-
tion signed in Budapest--unlike the Polish-Bulgarian com-
muniqu�n Sofia--emphasizes "complete agreement on all
questions discussed," and the omission of any reference to
Yugoslavia reflects the desire of both parties to remain
uninvolved in the bloc dispute with Belgrade. The com-
muniqu�hows clear signs of an attempt to shore up the
position of Kadar and the centrist faction in the badly
divided Hungarian party. ) (Page 2)
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II. ASIA-AFRICA
Lebanon: Army troops are patrolling the larger cities,
but sporadic disorders and acts of sabotage are likely to con-
tinue. In the countryside, especially in areas near the
Syrian border, the presence of armed Syrian tibesmen sug-
gests that the UAR authorities may have revived the idea of
a tribal revolt, originally planned for April. Acts of sabo-
tage, such as the damaging of an oil pipeline from Syria to
northern Lebanon, may well have been the work of UAR or
Communist agents. The political impact of the disorders on
President Chamounts re-election plans is not yet clear.
Moderate opposition elements are urging that Chamoun
postpone his plans and install a "national" cabinet. The
attitude of army chief Shihab, whom opposition leaders
are urging as a stopgap prime minister, is likely to be
decisive. (Page 3) �(Map)
Iraq-Jordan: King Husayn of Jordan and King Faysal
of Iraq- -are- expected to meet in Baghdad very Soon-
to determine the compositiok, of the Arab Union government
and parliament. The meeting follows ratification of the
Arab Union constitution by the Iraqi Parliament on 10 May,
which completed the legal measures required to set up the
new government. Unless the Arab Union begins to display
more dynamism than it has thus far, it is unlikely to be ef-
fective in hineking Nasir's o'rnuri-ncr inflnArtra arntmcr fh Aiha
Greece: Karamanlis will be' able to form a one-party,
pro-Western, right-center government, although his Na-
tional Radical Union has failed to receive as large a per-
centage of the vote in the 11 May election as it did in the
elections of 1956. The strong showing made by the Commu.
nist-front United Democratic Left is probably due more to
a large protest vote against the policies of the major non-
Communist parties than to any substantial increase in hard-
core Communist strength in Greece. (Page 5)
13 May 58 DAILY BRIEF
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New
Morocco: A new Moroccan cabinet headed by moderate
pro-Western Istiqlal leader Ahmed Balafrej was invested on
12 May, ending a four-week-long government crisis. The
new cabinet contains nine members of Istiqlal and one inde-
pendent, and represents a compromise between the party,
which had demanded an all-Istiqlal government, and the
King, who desired to main in some non-Istiqlal representa-
tion.
*Indonesia: Mass demonstrations, apparently Communist-
instigated, against foreign intervention in the Indonesian
fighting are scheduled for 16 May in Djakarta and 20 May in
Surabaya. Protests will be directed specifically against the
United States. Nationalist China. and SEATO.
Laos: Partial election returns indicate victories for
Communists and their allies in as many as 14 of the races
for 21 seats at stake in the supplementary assembly elections.
Unless conservative elements cooperate more closely than
they have in the past, Communist and leftist forces stand
a good chance of exploiting their present gains for an even
more significant victory in the 1959 national elections. Lack-
ing such cooperation, conservative influence in the assembly
apparently has been reduced to the point where the present
administration may have difficulty forming an effective gov-
ernment. (Page 6)
India: Orders from New Delhi which forced the resigna-
tion on 8 and 9 May of the Congress-dominated state govern-
ments of Mysore and Orissa indicate that the Congress party
may have begun intensive house cleaning. Top party leaders
apparently lost patience with the members in Orissa, whose
wavering loyalty had endangered the Congress party govern-
ment's already precarious working majority in the state as-
sembly. In Mysore, where the opposition is weak, New
Delhi probably hopes to end continuous intraparty bickering.
New Delhi's sense of urgency is probably heightened by the
13 May 58 DAILY BRIEF iii
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possibility that the Congress party will not be able to cap-
ture a seat from the Communists in a critical by-election in
Kerala State on 16 May. (Page 7)
III. THE WEST
France: European extremists in Algiers have called for
a general strike and mass demonstrations against Pflimlin,
who will seek National Assembly endorsement on 13 May.
Some party leaders in the center and on the right are be-
lieved willing to "risk a long crisis" in the belief that it
would force the Socialists to reverse their policy of not
participating in the next government. Prolongatioa of the
crisis, however, would probably bring about a stepped-up
compaign for the return of De Gaulle, and would raise the
possibility that, in the interim, a leftist candidate such as
Mitterrand might receive Communist support for a "liberal"
Algerian policy
Iceland: The government intends shortly to announce a
unilaTiFFrextension of its territorial waters to the 12-mile
limit. The US ambassador to NATO believes it will be
difficult to persuade Iceland to delay an announcement beyond
14 May in the absence of any new proposals. Failure of the
recent Geneva conference on territorial waters to agree on
the 12-mile limit issue aroused almost unanimous indigna-
tion in Iceland and occasioned threats that the US armed
forces at Keflavik would be asked to leave. The presently
projected move would antagonize a number of Western
European countries with important fishing interests, par-
ticularly Britain. (Page 8) (Map)
Chile: Congress's final approval of an act legalizing the
Communist party, though still subject to possible presidential
veto, will further strengthen the receht leftist trend in Chile.
This trend will probably be encouraged by anti-US sentiment
growing out of the copper question and Chile's feeling of
13 May 58
DAILY BRIEF iv
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11404
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neglect over loans. It will particularly benefit the prospects
of the Communist-supported Socialist candidate, Salvador
Allende, in next September's presidential election. He has
recently proposed heavy increases in the tax burden on the
US-owned copper companies. (Page 9)
13 May 58
DAILY BRIEF
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WEIN 1 1AL
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I. THE COMMUNIST BLOC
Khrushchev's Challenge to the West
Khrushchev's lengthy speech on 6 May to the Soviet
party central committee on the future expansion of the
chemical industry will be a basic document in the Soviet
propaganda campaign against the West. The speech ex-
pands and again renews his challenge to the West, es-
pecially the United States, to economic competition in
order to demonstrate the superiority of one system over
the other. This is the most positive and optimistic state-
ment to date of the Soviet propaganda theme that the pres-
ent economic situation in the United States clearly demon-
strates the superiority of the Soviet system.
Soviet achievements to date are alleged to be the direct
results of the "heroic self-sacrifice" by the knowledgeable
"Soviet man" in order to establish the heavy industrial base
which now has grown to sufficient size to allow a "better
life for the working people." This will be achieved by "con-
siderably greater" production of consumer goods. Khru-
shchev stated, "When the Soviet Union reaches the American
production level and leaves the capitalist world behind, then
we shall say, 'our socialist country... assures for all work-
ing people the highest standard of living.
Khrushchev said the armaments industries of the bloc
will manufacture some of the equipment required for the ma-
jor expansion of the Soviet chemical industry. This will be
possible, he said, because the reduction in the troop strength
of the "socialist countries" left their armaments plants with
idle capacity. American, Wet German, and British indus-
tries were also offered the opportunity to contribute to supply-
ing equipment for a -25-billion-dollar expansion of the Soviet
chemical industry. Western technical personnel qualified in
chemical synthesis were offered employment in the Soviet
Union, and Western governments were told that these offers
could lead to a partial resolution of their economic difficul-
Am 1
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1.11 VP ALMA I 1.11tfir _
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Gomulka-Kadar Rapprochement
Omission of any reference to Yugoslavia in the joint
Polish-Hungarian communiqu�ssued on 11 May in Buda-
pest reflects attempts by both countries to remain unin-
volved in the Yugoslav-Soviet dispute. Although both
Gomulka and Kadar will avoid taking a public position on
this issue as long as possible, they may eventually suc-
cumb to Kremlin pressure.
Emphasizing "complete agreement on all questions
discussed," the communiqu�ontains several references
which are an attempt by Gomulka to shore up Kadar and
the centrist faction in the badly divided Hungarian party.
While the communiqu�alled revisionism the chief danger,
it condemned dogmatism with almost equal vigor. The
failure to mention Gomulka's concepts of sovereignty and
noninterference in internal affairs as an essential element
of relations among Communist states probably represents
a significant concession to Kadar, who was put in power by
Soviet intervention in Hungary. The two men also found an
acceptable formula on the question of the Hungarian revolu-
tion, condemning the counterrevolution yet avoiding refer-
ence to aspects which the Poles cannot accept, such as the
"treason" of Imre Nagy.
The communiqu�xpressed the need for the Warsaw Pact
and unity in the "socialist" camp, and a desire for closer
economic cooperation. It supported the Soviet condemnation
of the nuclear armament of West Germany and the refusal to
discuss the status of Eastern Europe at the proposed summit
c9-nference.
CONFIDENTIAL
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mink
Baniyas
13
inch pipeline
MEDITERRANEAN Horns
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Tripoli
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1958
12 inch pipeline
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TO JORDAN &
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SYRIA
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II. A S.Li2L -A I.41t1: CA
Lebanese Situation:
Troops and armored equipment are patrolling Lebanon's
two largest cities, Tripoli and Beirut. While security forces
appeared in control during the curfew period on 12 May, ad-
ditional outbreaks of disorder and sabotage in all parts of
Lebanon are probable. In northern Lebanon near the Syrian
border, progovernment tribes are fighting with 300 Syrian-
armed tribesmen. Materiel support given to anti-Chamoun
tribes by the Syrian Army suggests that UAR authorities
have revived the idea of stirring up a tribal revolt originally
scheduled for April. Cairo and Damascus radios have called
on the Lebanese people to revolt against the Chamoun govern-
ment.
The effect of the disorders on President Chamoun's plans
for a second term is not clear. Army commander General
Shihab has indicated he will reluctantly support Chamoun un-
til his term of office ends in September, but intimates he will
not give assistance to the President's second-term aspirations.
Chamoun and Foreign Minister Malik have requested that
tanks be airlifted to Lebanon and have suggested the possible
deployment of a "division of American Marines" if UAR ag-
gression becomes more overt.
Moderate opposition leaders are offering a "middle of
the way" solution to the political impasse by having Chamoun
postpone his second-term plans and install a "national" cab-
inet including some of the moderate opposition politicians.
The moderate politicians are fearful that the disorders will
assume aspects of a Christian-Moslem conflict. The attack
on the USIS office in Beirut, after some opposition leaders
had told American Ambassador McClintock they deplored the
destruction of the USIS library in Tripoli, suggests the
Lebanese opposition leaders are not in sole control of the
mobs.
Sabotage in Lebanon of the Iraq Petroleum Company pipe-
line which runs to Tripoli appears to have been the work of
UAR saboteurs or Communist agents. The company has or-
dered tankers to be diverted to Baniyas, Syria. The present
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pipeline system through Syria consists of one 30-, one 16-,
and one 12-inch line. The 30-inch line ends at Baniyas,
while the other two terminate at Tripoli. Even the tempo-
rary loss of approximately 144,000 barrels per day at
Tripoli will have serious economic repercussions in Leb-
anon and Iraq. In the neighborhood of 370,000 barrels per
day flow to Baniyas.
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TA: .AJLP.14.1. I A.
:we
Greek Elections
The unexpectedly heavy vote received by the Communist-
front United Democratic Left (EDA) in the Greek national
elections on 11 May has overshadowed the absolute victory of
the conservative, pro-Western National Radical Union (ERE)
of Constantine Karamanlis. While ERE dropped to 42 per-
cent of the popular vote compared to 47 percent in the 1956
elections, it will increase its representation in the new Cham-
ber of Deputies from 164 seats to approximately 175. This
will give Karamanlis a substantial working majority in the
300-member parliament as long as he is able to control the
many diverse factions within his party.
The complex electoral law, which permitted the ERE to
tal:e a sizable majority of the parliamentary seats despite
receiving a minority of the popular vote, also works to the
advantage of EDA, which gained a large number of "bonus"
seats for running second. EDA nosed out the Liberal party,
a traditional center party and previously the second largest
party in the chamber, and will increase its representation
from 17 seats in the old parliament to approximately 75 in the
new. The Liberals will decline from 67 seats to about 36,
while two minor parties will account for less than 20 in the
new parliament.
EDA won about 24 percent of the total vote, apparently
picking up a large "protest" vote in addition to the votes of
the far left. Discontent among wage earners, who object to
the government's wage-freeze policy, and among nationalists,
who disagree with Greece's "inferior" role in NATO and the
apparent lack of progress toward a "desirable" solution of
the Cyprus problem, probably accounted for a significant pro-
portion of EDA's voting strength. The vote probably does not
indicate any substantial increase .in the number of hard-core
Communist adherents in Greece.
The position of EDA as leader of the opposition will tend
to polarize Greek politics and may lead to defections from the
Liberals and the smaller parties to the two major parties.
While EDA will not be able to challenge the final passage of
ERE-sponsored legislation in the new parliament, it can be
expected to use every means to harass and delay the pro-
Nyestern policies of Karamanlis.
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Nine
Communist Election Victory in Laos
Returns from the 4 May Laotian election indicate
victories for the Communists and their leftist allies in
as many as 14 of the races for 20 supplementary seats
and one vacancy in the Laotian National Assembly. If
final returns bear out the apparent impressive victory,
the Communists will be in a position to demand greater
immediate representation in the government. There are
indications, however, that they intend to avoid overplay-
ing their hand at this stage so as not to crystallize con-
servative opposition and thereby jeopardize their hopes
of achieving full power in next year's general elections.
The election outcome may encourage those deputies
who have previously opposed the government to support the
Communists, thus enabling them to control about one third
of the 59-man assembly. There is the additional danger
that some unaffiliated or even conservative members may
view the Communist Neo Lao Hak Zat as the "wave of the
future" and vote with it.
The incomplete election returns strongly suggest that
a unified conservative slate would have won at least a ma-
jority of the new seats. The conservatives in any event
should still hold the simple majority of seats required to
form a government. Even now, by uniting and winning the
support of unaffiliated members, they could exclude the
Communists from the new government to be formed. Past
performances, however, and the momentum of the leftist trend
in Laos argue against any interruption of conservative faction-
alism.
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Two Congress-dominated State Governments in India
Dismissed
New Delhi's action in ordering the resignations of the
chief ministers of Mysore and Orissa states reflects top
Congress party leaders' loss of patience with the continuous
intraparty bickering there and presumably is a warning to
the crumbling party organizations elsewhere in India. The
high command's sense of urgency was probably heightened
by the likelihood that the party will be unable to capture a
seat in a by-election in Kerala State on 16 May from the
Communists, who are campaigning vigorously.
Since the general elections in March 1957, in which the
Congress party in Orissa won only 66 seats in a 140-member
assembly, the Congress has ruled that state with the support
of one small tribal party, defectors from other parties, and
independents. This precarious position recently has been
jeopardized by defections and absenteeism. Prime Minister
Nehru and party leaders reportedly planned to oust Chief
Minister Mahatab in early May, but refrained from doing
so when Mahatab insisted that the Congress could command
at least a two-man majority. A few days later the party high
command ordered the government to resign anyway, prob-
ably convinced that a bare mathematical majority was no
cure for continuing party ills.
The resignation of the Mysore state government oc-
curred one day after a top party official arrived from New
Delhi with the intention of reconciling sharp intraparty dif-
ferences. A compromise apparently proved impossible,
and elections were held for a new party leader, who now is
consulting in New Delhi prior to for
13 May 58
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