CENTRAL INTELLIGENCE BULLETIN - 1958/01/21

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03182295
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: January 21, 1958

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21 January 1958
SC No. 00042/58
Copy No. /37
CENTRAL
INTELLIGENCE
BULLETIN
DCIC!IMENT
NO r.;;HANGE :11 CLASS.
OECLASSINED
C .ACS. C I -1ANGED ro IS�S 1 k.
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21 JANUARY 1958
Russians say East Germans must
clear US envoy's plane.
Tito supporting "summit meeting"
of neutralist powers.
France negotiating $48 million
loan to India.
Soviet Union asks Britain to discuss
Indochina situation.
Guatemala - Early returns suggest
no candidate won absolute majority
in presidential election.
OTHER ITEMS
Turkey sends negative reply to
Bulganin letter.
Turkey will ask for US membership
in Baghdad Pact.
Egyptian financial position worsening.
Soviet-Afghan oil agreement limited
to exploration.
Ethiopia eager for US assistance for
air force.
SECRET
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CENTRAL INTELLIGENCE BULLETIN
21 January 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
Tito% attempts to promote a more influential role
for neutralist states in reducing international tensions
are making progress. He appears to have gained the
support of Sukarno, Quwatli, and Nasir for a possible
"summit meeting" of leading neutralist powers for a
joint effort to effect a world heads-of-government meet-
ing. Sukarno will probably try to line up additional sup-
port among Asian neutralists during his homeward trip.
Bulganin's latest round of letters urged the incluslon of
neutralist representatives in any East-West heads-of-
government meeting. (CONFIDENTIAL)
Russian officials in Berlin insist that clearance of
Ambassador Thompson's aircraft from Moscow to Berlin
and return this week is the business of East Germany.
They are willing to refer the flight request to the East
Germans for action if the Americans agree. Ambassa-
dor Bruce in Bonn believes that protests will not affect
the Soviet position, which is part of a continuing attempt
to force recognition of East Germany. (CONFIDENTIAL)
II. ASIA-AFRICA
Egypt's foreign exchange position is steadily worsen-
ing. Egypt recently sold about $14,500,000 of its gold re-
serves�some 7.5 percent of its total--and now has only a
negligible amount of foreign currency. Further sales will
have to be at the expense of the currency cover, thereby
Top SECRET
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further weakening the Egyptian pound. In the absence of
successful conclusion of a financial settlement with the VI
UK, Egypt's only important source of foreign exchange kl
Zwill be Suez Canal receipts. Economic problems alone
are not likely to lead Nasir to make major political con-
cessions in the near future. (SECRET NOFORN) (Page 1)
Turkey's response to Bulganin's letter of 22 Novem-
ber, in line with Turkey's previous attitude toward such
approaches, is firm and forthright. While containing a
tS\\
sharp rejoinder to Moscow, it was also designed to win
a favorable reaction from the Arab states. The latest
^
Soviet letter, warning Turkey not to permit NATO mis-
sile bases, will probably draw a similar tough reaction. ,,,
(SECRET) \\
ti
The Turkish Government, supported by Iran and Pak- A
istan, intends to "demand" formal American membership '\\A
and sufficient economic and military support to counter the
Soviet threat. (SECRET NOFORN)
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in the Baghdad Pact at the forthcoming meeting at Ankara,
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The $15,000,000 Afghan-Soviet oil exploration agree-
ment signed on 7 January is expected to cover only surveys
and experimental drilling. Equipment will be bought from
the USSR for $8,000,000. The Soviet, Czech, and Rumanian
technicians to be employed over the four-year period will
probably total nearly 500. (SECRET NOFORN)
Ethiopia is showing increased impatience over lack
of response to its request for United States assistance for
the Ethiopian Air Force. A shift toward the USSR as a pri-
mary source of military support does not appear to be im-
minent, although the defense minister is apparently urging
such a step.
The Soviet Union has proposed a meeting with Britain,
the other cochairman under the 1954 Geneva Agreement on
21 Jan 58
DAILY BRIEF ii
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Indochina, on various financial and political aspects of
the present situation. With settlements achieved in Cam-
bodia and Laos, Moscow may now wish to spotlight the
lack of progress toward the reunification of Vietnam and
to undermine American efforts to strengthen South Vietnam.
(CONFIDENTIAL) (Page 2)
III. THE WEST
France is negotiating a loan to India of approximately
$48,000,000, apparently to be used for ships, fertilizer
plants, and irrigation machinery in connection with India's
Second Five-Year Plan. This would be the first French
loan to India. (CONFIDENTIAL)
Unofficial returns indicate that none of the contenders
in the 19 January Guatemalan presidential race is likely
to win a majority. The election will thus probably be re-
ferred to congress, where control by moderates virtually
assures the selection of the center candidate, Jose Luis
Cruz Salazar. The evident determination of President
Flores and the army to preserve order has thus far dis-
couraged violence, but disorders are possible, particu-
larly if Cruz Salazar is declared the winner without hav-
ing won a plurality. (CONFIDENTIAL)
21 Jan 58
DAILY BRIEF iii
S\\'
TOP SECRET
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I. THE COMMUNIST BLOC
No back-up material.
ct4-- IL ASIA-AFRICA
Egyptian Financial Situation
The economic restrictions by the United States, the
United Kingdom, and France have resulted in a marked
deterioration of Egypt's usable foreign exchange reserves
and an acute shortage of necessary spare parts and raw
materials, which the Communists have not been able to
supply.
In June 1956, the last month before the Western re-
strictions came into force, Egypt's working foreign ex-
change balances amounted to over $150,000,000. By 15
January 1958, when a payment of more than $6,000,000
was due Germany, these had declined to less than $6,000,-
000. Cairo has begun selling its gold reserves, estimated
to be about $1881000,000. The first sale, amounting to
about $14,500,000, or some 7.5 percent, was apparently
made within the past week. Additional sales from the cur-
rency cover will further weaken the Egyptian pound.
The crisis might be postponed at least temporarily
if Cairo and London reach agreement in negotiations
scheduled to begin on 30 January. Subject to certain
conditions, London apparently now is willing to release
over $50,000,000 of Egypt's blocked sterling balances.
Otherwise, Egypt's only important source of foreign ex-
change will be Suez Canal receipts.
Disagreement between experienced advisers and rad-
ical members of the Nasir regime who are responsible
for financial policies has become acute. However, the
crisis is not now likely to lead to any major political
changes, either in personnel or policy. (SECRET
NOFORN)
21 Jan 58
-SECRET
CENTRAL INTELLIGENCE BULLETIN
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042--Moscow Bids to Reopen Talks on Indochina
The Soviet Union has proposed a meeting of the 1954
Geneva Agreement cochairmen--Britain and the USSR--to
discuss certain aspects of the Indochina armistice. With
political settlements envisaged under the 1954 agreement
now a reality in Cambodia and Laos, Moscow may wish to
spotlight the lack of progress toward reunification of Viet-
nam as well as attempt to undermine American efforts to
strengthen the Diem government in South Vietnam. The
USSR may, in part, be responding to the pressure of Viet
Minh leader Ho Chi Minh, who recently paid an extended
visit to Moscow.
The Soviet Union specifically requested discussion of
the complicated problem of financial support for the truce
mechanism in Indochina�the International Control Com-
mission. It further suggested the discussion of political
questions, such as South Vietnam's renunciation of the
Geneva Agreement article which prohibits retaliation against
"former combatants" by either side. Moscow may also ex-
ploit any such talks to attack the US military aid program to
South Vietnam, or it might use the occasion to request the
convening of a second Geneva conference on Indochina.
S
The British Foreign Office is inclined to approve the
holding of purely financial talks, but wishes to avoid consid-
eration of political issues. (CONFIDENTIAL)
III. THE WEST
No back-up material.
CONFIDENTIAL
21 Jan 58
CENTRAL INTELLIGENCE BULLETIN Page 2
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'SOF
DISTRIBUTION
THE PRESIDENT
The Vice-President
Executive Offices of the White House
Special Assistant for National Security Affairs
Scientific Adviser to the President
Director of the Budget
Office of Defense Mobilization
Operations Coordinating Board
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
The Treasury Department
The Secretary of the Treasury
The Department of State
The Secretary of State
The Under-Secretary of State
The Counselor
The Deputy Under-Secretary for Political Affairs
The Deputy Under-Secretary for Economic Affairs
The Deputy Under-Secretary for Administration
Director of Intelligence and Research
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Chairman, The Joint Chiefs of Staff
Commandant, United States Marine Corps
The Director, The Joint Staff
Chief of Staff, United States Army
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Assistant to Secretary of Defense for Special Operations
Deputy Director for Intelligence, The Joint Staff
Assistant Chief of Staff, Intelligence, Department of the Army
Director of Naval Intelligence, Department of the Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander-in-Chief, Pacific
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
United States Information Agency
The Director
-P-000271111041717 AY
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Russian officials in Berli.n insist that clearance of
Ambassador Thompson's aircraft from Moscow to Berlin
and return this week is the business of East Germany. k
They are willing to refer the flight request to the East
Germans for action if the Americans agree. Ambassa-
dor Bruce in Bonn believes that protests will not affect
to force recognition of East Germany. (CONFIDENTIAL)
the Soviet position, which is part of a continuing attempt
key's response to Bulganin's letter of 22 Novem- \-,.\\
ber, n me �with Turkey's previous attitude toward such ;.7,'`
approaches, is firm and forthright. While containing a 2,
sharp rejoinder to Moscow, it was also designed to win
a favorable reaction from the Arab states. The latest
Soviet letter, warning Turkey not to permit NATO mis-
sile bases, will probably draw a similar tough reaction.
(SECRET)
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CENTRAL INTELLIGENCE BULLETIN
21 January 1958
DAILY BRIEF
THE COMMUNIST BLOC
Tito' attempts to promote a more influential role
for neutralist stateS'iii reducing international tensions
are making progress. He appears to have gained the
support of Sukarno, Quwatli, and Nasir for a possible
"summit meeting" of leading neutralist powers for a
joint effort to effect a world heads-of-government meet-
ing. Sulam� will probably try to line up additional sup-
port among-Asian neutralists during his homeward trip.
Bulganin's latest round of letters urged the inclusion of
neutralist representatives in any East-West heads-of-
government meeting. (CONFIDENTIAL)
France is _negotiating a loan to 'India or approximately
$48,000,000, apparently to be used for ships, fertilizer
plants, and irrigation machinery in connection with India's
Second Five-Year Plan. This would be the first French
loan to India. (CONFIDENTIAL)
Unofficial returns indicate that none of the contenders
in the 19 January Guatemalan presidential race is likely
to win a majority. The election will thus probably be re-
ferred to congress, where control by moderates virtually
assures the selection of the center candidate, Jose Luis
Cruz Salazar. The evident determination of President
Flores and the army to preserve order has thus far dis-
couraged violence, but disorders are possible, particu-
larly if Cruz Salazar is declared the winner without
tr.! WrTA
lug won a pluApproved for Release: 2019/08/20 C03182295
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d Continues toPush a&packi 161
The Poiab amb
Q,..S1.2.3Eaet
>17,(.1�
4.2)/CZ:
9 Volo, United States has
privately stated. that and would be will4RKJ0 accept
"the most rigorous possible inspection proceduresr
INGSWtbs Sapacki plan for a'auclear4ree zone in central-
.
Wove, fully recognizing that many _atomic weapons are
qnite small and easily owealed. /be Poles have also
explained that it does not necessarily entail West German
dealings with Mast Germany.
Foreign Minister Repack/ has stated privately, that
withdrawal of all troops from Murope and the concept of
a neutralized, reunified Germany are utopian ideas and
has indicated that he did not expect his own plan to be
acceptable to the West. The Polish amhumador in Washington
indicated that Poland advanced the plan to prevent West
Germany from gaining nuclear arms. The Poles also probably
hope to gain prestige by authoring a first step to broader
disarmament schemes, and to avoid Soviet demands for basing
nuclear weapons in Poland,.
-
ST
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