CURRENT INTELLIGENCE BULLETIN - 1958/01/10

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03182292
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 17
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: January 10, 1958

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CONTENTS
0-4f- 1. KHRUSHCHEV ATTITUDE ON SOVIET MILITARY INTER-
VENTION IN EAST GERMANY (page 3).
2. SOVIET HIERARCHY MAY UNDERGO FURTHER CHANGES
(Secret Noforn) (page 4).
3. SOVIET BLOC EXPECTED TO MAKE LOW BID ON SAUDI
RAILWAY CONTRACT (Secret) (page 5).
Me.- 4. THE SITUATION IN INDONESIA (page 6).
(thoti 5. JAPANRSE ET.ECTION NOT LIKELY BEFORE SPRING
(page 7).
6. SOUTH KOREAN OPPOSITION PARTY LEADER RESIGNS
(Confidential) (page 8).
11,0 7. EUROPE REPORTED FAVORING US-USSR
TALKS C (page 9).
qt-c) 8. LONDON MAY BE PREPARING ARMS LIMITATION ZONE
PROPOSALS (page 10).
Ora, 9. RIGHTISTS AND LEFTISTS MAY AGAIN UNITE IN GUATE-
MALAN ELECTION STRUGGLE (page 11).
)14.) 10. BONN CONFIRMS PARTICIPATION IN FRENCH MILITARY
RESEARCH (page 12).
11. BLANKENHO OINTMENT TO HIGH BONN POST IN
DOUBT (page 13).
12. AUSTRIAN CHANCELLOR AND VICE CHANCELLOR SCHEDULE
MOSCOW VISIT (Secret) (page 14).
13. PREMIER BULGANIN RENEWS BID FOR SUMMIT TALKS
(Confidential) (page 15).
ANNEX Conclusions of the Watch Report of the Intelligence
Advisory Committee (Top Secret)
(page 16).
10 Jan 58 Current Intelligence Bulletin
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1. KHRUSHCHEV ATTITUDE ON SOVIET MILITARY
INTERVENTION IN EAST GERMANY
Comment' on,:
Khrushchev defined the "circumstances"
in Hungary as having involved "outside intervention" --a ref-
erence to the official Soviet charge that "Western imperialists"
instigated the uprising. He went on to contrast the Hungarian
situation with the crisis in Polancl, where Soviet intervention
had not been necessary because developments there had been
"entirely an internal affair" �meaning that GomuIka, unlike
Nagy, did not intend to take his country out of the bloc.
Soviet leaders have made clear on a num-
ber of occasions in the past year--most recently at the Moscow
conference of Communist leaders in November--that under
present conditions, the USSR would not hesitate to intervene
militarily to suppress a satellite rebellion.
10 Jan 58
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2. SOVIET HIERARCHY MAY UNDERGO FURTHER CHANGES
Comment on:
diplomat recently stated that
iment Voroshilov, chairman of the
residium of the USSR Supreme Soviet,
Ill retire after the March Supreme
Soviet elections. He also said that Premier Bulganin may
receive a new job.
It has been frequently reported that
Voroshilov, who will be 77 next month, is becoming increas-
ingly senile. The election of a new Supreme Soviet Presid-
ium after the general elections would provide an opportunity
for him to retire with honor.
did not specify what new job
would go to Bulganin, who apparently was in political trouble
last summer for failure to support Khrushchev against the
Malenkov-Molotov group. Bulganin has weathered that crisis
and in recent weeks has regained his former prominence. If
he succeeds Voroshilov as titular president of the USSR, he
will have been "kicked upstairs" to an honorific post of little
political significance.
considers Deputy Premier
Mikoyan and Party Secretary Suslov the most important men
in the Soviet Union after Khrushchev, an estimate consistent
with other evidence concerning their relative standing. He also
singled out Frol Kozlov, former Leningrad party boss who was
named premier of the Russian republic last month, as a "man
to watch." (NOFORN)
10 Jan 58 Current Intelligence Bulletin
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3. SOVIET BLOC EXPECTED TO MAKE LOW BID
ON SAUDI RAILWAY CONTRACT
Comment on:
The Soviet bloc will probably underbid
Western commercial interests on pro-
posed reconstruction of the Hejaz rail-
way. Although King Saud is not likely
to approve awarding the contract to a
Communist country, the problem of re-
jecting a low bid from the bloc would
impose new strains on his relations with
the West.
The Syrian chairman of the international
Hejaz Railway Commission said on 5 January that he ex-
pected the Soviet bloc would offer any terms necessary to
gain the contract for the railway, bids for which are due
by 15 April. No bids have been received.
The Hejaz railway, built in 1908 and de-
stroyed in World War I, has primarily a political and religious
significance. Its restoration has been a pet scheme of the King.
A Polish survey bid which was 35 percent lower than the next
lowest bid by an American company was accepted by the com-
mission in December 1955, but the Poles were denied entrance
into Saudi Arabia by Saud. The survey was completed in Saudi
Arabia during 1957 by an American firm. The Saudi foreign
exchange shortage, however, would now create added pressure
to accept a low bid with easy financing. (SECRET)
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4. THE SITUATION IN INDONESIA
Comment on:
Former Vice President Hatta appar-
ently is not yet prepared to push for a
change in the Indonesian Clovernment.
!le would
take no part in any reorganization while
Sukarno is out of the country. Hatta be-
lieves the Communists will undertake no
overt action during Sukarno's absence, but fears that ele-
ments of the Darul Islam, a fanatic Moslem group, and
right-wing youth groups might attempt some violence.
if Hatta were to return to power, it
would not be by coup but through a formal agreement with
Sukarno.
Prime Minister Djuanda, in a talk with
American Ambassador Allison, echoed the fear that the non-
Communist opposition was more likely to take some action
than were the Communists and said he expected increased
difficulty with the provinces. He was still hopeful of an
eventual Sukarno-Hatta rapprochement.
On the economic scene, the Americo. Em-
bassy reports that practically all rubber produced by small-
holders, which comprises two-thirds of Indonesia's total out-
put, now is being bartered abroad by local groups who bypass
the central government. This represents a substantial loss
of revenue to Djakarta, as rubber exports comprise about 40
percent of Indonesia's total exports by value. Most Dutch es-
tates in Java and North Sumatra have been or are being aban-
doned, thus sharply reducing production.
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5. JAPANESE ELECTION NOT LIKELY BEFORE SPRING
Comment on:
Prime Minister Kishi will probably
not hold the critical national elections
before April,
Kishi
is probably fearful that the Socialists would make gains in
any election held within the next few weeks.
Powerful business and financial interests
prefer passage of the budget before any elections so that the
present government's economic program will be continued
into fiscal 1958. The budget is to include certain welfare meas-
ures which would undercut Socialist criticism. The conserva-
tive party also wants more time to develop the charge that
Communist China has supported Socialist candidates in previ-
ous elections.
Kishi is expected to make a definite deci-
sion about 20 January on the timing of a general election, which
must be held by February 1959.
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6. SOUTH KOREAN OPPOSITION PARTY LEADER RESIGNS
Comment on:
Cho Pyong-ok's resignation as titular
head of the opposition Democratic
party in South Korea may seriously
jeopardize Democratic chances in the
National Assembly elections this spring and could permanently
split the party.
Cho ostensibly resigned to appease news-
paper critics who have been indignant over his support of an
assembly election law containing severe press restrictions.
Actually, supporters of Vice President Chang, Myon, who dis-
like and distrust Cho and resent his pre-!eminence within the
party, have sought for months to weaken his influence. The
election law controversy presented the Chang group with a
convenient device to force him from his post while simultane-
ously placating the press, an important source of Democratic
election support.
Although factionalism has rent the Dem-
ocratic party since its organization in 1955, the party's bitter
anti-Rhee policies have gained increasing public support. This
Is the most serious split to date and may greatly impede progress
toward establishment of a two-party system in South Korea.
10 Jan 58
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'7. EUROPEAN NATIONS REPORTED FAVORING
US-USSR TALKS
Comment on:
the French
and West German governments now favor
bilateral American-Soviet talks,
the Italian Foreign Ministry also
tends o favor such a move.
The only previous hint that France might
abandon its long-standing apprehensions over bilateral talks
was a suggestion to this effect by the influential commentator
Raymond Aron on 6 January. There have been no expressions
of official German opinion on the subject, but Bonn is concerned
that any negotiations in which West Germany is not represented
could lead to an agreement perpetuating the division of Germany.
American Embassy representative on 6 January that he believes
such bilateral negotiations offer the best hope of breaking the
"cold-war impasse." The Macmillan government, under fire for
not sufficiently defending British sovereignty in regard to US
bases in the United Kingdom, probably is not ready to advocate
bilateral conversations, but this official's view reflects the
spreading interest in new efforts to negotiate.
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8, LONDON MAY BE PREPARING ARMS LIMITATION
ZONE PROPOSALS
Comment on:
The Macmillan government appears to
be considering proposals of its own on
special arms limitations in central
Europe. The British representative
to the North Atlantic Council insisted on 8 January that
NATO countries should examine the Ra,packi plan with an
eye to devising a counterproposal which would help toward
German reunification,
Two statements by the British represent-
ative point to the likelihood that discussion of counterproposals
is already under way in London. He argued that if the Soviet
Union withdrew all its forces from central Europe, Moscow
could not return them as readily as it did in Hungary, where
some troops had remained. He also indicated that his govern-
ment might favor some restriction on nuclear weapons in such
a zone, because there are many different kinds of nuclear
weapons, and the matter would require "long study."
Despite vehement opposition by Secretary
General Spook to any consideration of Rapacki's "insidious
proposal," France and several other members indicated that
the plan should be mentioned in replies, and not dismissed
out of hand.
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9. RIGHTISTS AND LEFTISTS MAY AGAIN UNITE IN
GUATEMALAN ELECTION STRUGGLE
Comment on:
Miguel Ydigoras Fuentes, rightist
presidential candidate in Guatemala's
19 January elections, has made a deal
with the Communist-infiltrated Revolu-
tionary party (PR),
The agreement, based on the belief that
none of the three candidates can win a majority vote, calls for
Mario Mendez Montenegro, PR presidential candidate, to drop
out of the race and support Ydigoras in return for four cabinet
posts including the Ministry of Interior, which controls the po-
lice and election machinery.
Such an agreement would be consistent
with the objectives of Ydigoras, who wants to be president at
virtually any cost, and with those of the Communists and cer-
tain other elements in the PR, who believe it tactically unwise
to try for the presidency at this time. They believe the PR
should concentrate on winning a strong representation in con-
gress and then develop a solid position for a subsequent bid
for power.
Even if a pre-election deal falls through,
Ydigoras and the PR are believed prepared to join again in mob
violence if center candidate Cruz Salazar wins the election. Sim-
ilar action three months ago resulted in the ouster of the interim
Gonzalez regime and the nullification of the 20 October elections.
10 Jan 58
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10. BONN CONFIRMS PARTICIPATION IN FRENCH
MILITARY RESEARCH
Comment on:
Bonn is fur-
nishing German personnel for military
research projects at the St. Louis Re-
search Laboratory on the French side
eof the Rhine, and that the work is being
ijointly financed. The ministry denied
reports in the German press that German
Ynflitary experts were working "at present" at the French
rocket proving ground at Colomb-Bechar in North Africa.
The ministry stated, however, that Bonn was "ready" to
work with France in developing new weapons.
French-German cooperation in military
research and development dates back to a January 1957 agree-
ment for joint weapons development.
this cooperation would extend to the
field of missiles; German military leaders who visited Colomb-
Bechar were reported to have been extremely "impressed"
with the possibility of using the facilities for testing German
missiles.
Approximately 100 Germans are reported
to be working at St. Louis in addition to the 200 French per-
sonnel. The research activities are reported to be concen-
trated in the ballistics and explosives field. It is believed
that the type of work carried on at St. Louis could possibly
be applied to the French nuclear weapons program.
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11. BLANICENHORN APPOINTMENT TO HIGH BONN
POST IN DOUBT
Reference:
West German newspapers on 9 Janu-
ary indicate that a dispute has devel-
oped over the proposed appointment
of Herbert Blankenhorn to succeed
Walter Hallstein in the second-ranking post in the For-
eign Ministry, with Foreign Minister von Brentano object-
ing strongly to Chancellor Adenauer's desire to place
Blankenhorn in the job. Previously it had been reported
in the press that Blankenhorn was appointed to the post on
7 January.
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12. AUSTRIAN CHANCELLOR AND VICE CHANCELLOR
SCHEDULE MOSCOW VISIT
Comment cm:
The Austrian Government has announced
that the chancellor and vice chancellor
plan to visit Moscow after the Easter hol-
idays to discuss a reduction in Austrian
reparations payments. The Soviet Union
has been asked to set a date.
This decision has been the subject of
months of intragovernment controversy. Chancellor Raab
wanted to make the trip last year, but was delayed by ill-
ness, doubts over timing, and strenuous Socialist objections
to his making the trip alone. Since Raab will be accompanied
by Socialist Vice Chancellor Pitterman as well as State Secre-
tary Kreisky, Socialist fears that Raab might be outmaneuvered
will be moderated. The Socialists will also be able to claim
partial credit for any concessions gained.
With the exception of oil shipments, Aus-
tria's reparations bill ($150,000,000 in goods and 102000,000
tons of oil) has not proved particularly burdensome. The Aus-
trians are not likely to make major political concessions in
return for any reduction, but they might be willing to improve
relations with the Kadar regime in Hungary, and to be more
tolerant toward international Communist meetings in Vienna.
Some Austrian officials have long believed that Moscow will
not ask for specific concessions but will be content to establish
another instance of Soviet "generosity." (SECRET)
10 Jan 58 Current Intelligence Bulletin
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13. PREMIER BULGANIN RENEWS BID FOR SUMMIT TALKS
Comment 9n:
The principal purpose of Premier Bulganin's
letters of 9 January to the heads of govern-
ment of 19 states, including all NATO mem-
bers, is to maintain the momentum of the
Soviet campaign for a new summit confer-
ence. The messages apparently were timed to offset major
Western policy statements in speeches by President Eisenhower
and Prime Minister Macmillan and in the forthcoming replies
of NATO governments to Bulganin's letters last month.
The new round of letters goes beyond the
December messages by issuing a definite call for a conference
in the next two or three months of the heads of government of
the NATO and Warsaw Pact countries, together with "certain
countries not belonging to these groups of powers." Bulganin
asserted, however, that the USSR would not object to a more
restricted number of participants, and proposed that the confer-
ence be held in Geneva.
The Soviet premier reiterated the earlier
rejection by Khrushchev and Gromyko of the NATO proposal for
a foreign ministers' conference on disarmament. He insisted
that "it is a matter of prime importance" that the heads of gov-
ernment must participate in the proposed talks, and suggested
that a foreign ministers' meeting would only "create additional
obstacles to agreement" in view of the "prejudices which cer-
tain possible participants... would bring to the negotiations."
The agenda proposed by Bulganin for a sum-
mit conference would include the USSR's measures for easing
international tension set forth in his December letters. These
include a suspension of nuclear tests, a ban on the use of nuclear
weapons, a non-aggression pact between NATO and Warsaw Pact
powers, the creation of a nuclear-free zone in Central Europe,
and a renunciation of the use of force and interference in the
Middle East.
Bulganin's letter to President Eisenhower re-
peated in more explicit terms his previous overture for bilateral
talks. He stated that the USSR "does not reject the idea of disarm-
ament negotiations between individual states--for instance, between
the Soviet Union and the United States." (CONFIDENTIAL)
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eiONFIDEATTT A r
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ANNEX
Watch Report 388, 9 January 1958
of the
Intelligence Advisory Committee
C 7J44, 4r- 0/Y
Conclusions on Indications of Hostilities
On the basis of findings by its Watch Committee, the Intel-
ligence Advisory Committee concludes that:
A. No Sino-Soviet bloc country intends to initiate hostilities
against the continental US or its possessions in the imme-
diate future.
B. No Sib-Soviet bloc country intends to initiate hostilities
against US forces abroad, US allies or areas peripheral
to the orbit in the immediate future.
C. 1. A deliberate initiation of hostilities in the Middle East
is unlikely in the immediate future. However, tensions
in the Middle East continue to create possibilities for
serious incidents.
2. There is no evidence of Sino-Soviet intention to become
militarily involved in the Indonesian situation. However,
previously ordered military vehicles continue to be de-
livered, and the Soviets appear to be urging increased
bloc military and other aid for Indonesia. The Indonesian
Communists are exploiting political instability and eco-
nomic deterioration. Developing conditions continue to
provide opportunities for an expansion of Sino-Soviet bloc
influence in Indonesia and for a Communist take-over of
government on Java.
(TOP SECRET)
10 Jan 58 Current Intelligence Bulletin
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