CURRENT INTELLIGENCE BULLETIN - 1957/12/12

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03188698
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 15
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: December 12, 1957

3.5(c)
12 December 1957
3.3(h)(2)
2 Copy No.i3s fr7
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CONTENTS
USSR OFFERS STATUS QUO SETTLEMENM_ALITERNA-
TIVE TO BOLSTE:RING NATO STRENGTH (page 3).
tli) 2. BULGANIN LETTER TO NEHRU
cIK 3. LACK OF PROGRESS IN
UP CRITICIZED IN NATO (page 5);
page .4).
MAN MILITARY BUILD-
4. ANTI-AMERICAN DEMONSTRATIONS PLANNED IN PARIS
(page 6).
to 5. IRANIAN PRIME MINISTER SAYS IRAN MAY ADOPT
NEUTRALIST POLICY ?age 7).
11�60 BURMA TO ACCEPT $10 Cla 000 savrwrr
AGRICULTURAL LOAN
0 6 7. INDONESIAN SITUATION
(page 8).
(page 9).
Lfl8. _JAPANFCF PRIME MINISTER FACES ELECTION DILEMMA
(page 10)0
Ala 9. GUATEMALAN SITUATION (page 11).
* * * *
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10 USSR OFFERS STATUS QUO SETTLEMENT AS ALTERNA-
TIVE TO BOLSTERING NATO STRENGTH
Comment on:
Soviet Premier Bulganin's letters to
President Eisenhower and to heads of
other NATO governments together with
recent private statements apparently
are intended to undermine the rationale of American meas-
ures to increase NATO's strength and unity by offering the
West a general political settlement based on the status quo.
In a conversation on 4 December with the
Swiss ambassador, Bulganin elaborated on Ithrushchev's pro-
posal of 3 December to a group of ambassadors for Western
recognition of the status quo in Eastern Europe in exchange for
a Soviet agreement not to attempt to overthrow capitalist re-
gimes. Bulganin stated that the USSR was prepared to give
assurances, on a reciprocal basis, against intervention in
the affairs of capitalist countries. He suggested that such an
agreement might cover a period of 12 or 15 years.
Bulganin denied that the Russians were
engaged in a "sputnik diplomacy." He asserted, however,
that they had achieved technological parity with the West and
that East and West should therefore come to an agreement on
the basis of the status quo. Soviet presidium member Mikoyan
took the same line in a talk with the Swiss ambassador on 7
December, stating that East-West negotiations should be facili-
tated now th'at, the. USSR has reached parity in the technolog-
ical field. He remarked that the USSR previously had suffered
from an inferiority complex which had made negotiations diffi-
cult.
Although the Soviet leaders evidently be-
lieve their technological achievements will enable them to
gain world recognition of the USSR's strategic parity with the
West, it is unlikely that Moscow considers there has been a
sufficient change in the balance of power to justify any radical
shift in Soviet foreign policy. Bulganin remarked to the Swiss
ambassador that although one side or the other might gain a
temporary lead in some particular field, this could not change
the basic situation.
12 Dec 57
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AJL/ILLL N1. .1LnIL.L.4
Itrame 11110.
2. BULGANIN LETTER TO NEHRU
Comment on:
goviet Premier Bulganin's 10 December
note to Nehru probably was designed to
add to Asian neutralist pressures on the
West to agree to immediate suspension
of further tests and to heighten Asian
suspicions of Western defense moves likely to result from
the NATO conference. As in the Soviet note to Japan deliv-
ered on 5 December, Moscow seeks to exploit Asian desires
for a test ban.
In replying to Nehru's 28 November appeal
to the USSR and the United States to cease nuclear tests and
disarm, Bulganin asserted that test suspension is "now up to
the governments of the United States and Great Britain" This
emphasis on the USSR's willingness to cease nuclear tests by
1 January 1958 will focus critical Asian attention during the
next two weeks on Western responses. While India, Japan,
and Burma as well as other countries favor control and in-
spection procedures over future nuclear development, they
are willing to see these measures instituted after the cessa-
tion of nuclear testing. Continued Western refusal to agree
to a test suspension independent of other disarmament meas-
ures probably would disappoint many Asian and African nations.
12 Dec 57
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3. LACK OF PROGRESS IN WEST GERMAN MILITARY
BUILD-UP CRITICIZED DT NATO
Comment on:
In the course of the NATO Annual Review
examination of West Germanys build-up
plans, NATO representatives criticized
Bonn's pleas of financial difficulties. The
German representative stated that rearmament was unpopular
with the West German public. The Standing Group representa-
tive pointed out that NATO military authorities were particu-
larly concerned over the serious shortfall in the German army
and air force and over the urgent need to increase the pace of
the build-up.
The German representative expressed
Bonn's firm intention to fulfill its NATO obligations, but
pointed to the economic problems created by absorbing
10,000,000 refugees and increasing the defense budget by
"leaps and bounds:" The review committee chairman replied
that refugees had been a net gain for Germany and that Bonn
has large holdings of foreign exchange and gold. He also hoped
that creation of a 12,000-man cadre for home defense would not
impede the build-up of NATO forces.
Bonn has been extremely reluctant to com-
mit itself to a long-range schedule for its NATO forces, and
the considerable hedging during the examination indicates
doubts on the advisability of investing large sums for conven-
tional forces and equipment.
12 Dec 57
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4. ANTI-AMERICAN DEMONSTRATIONS PLANNED IN PARIS
3omment on:
merican demonstrations may be
held in Paris during the NATO confer-
ence. Pierre Poujade has called for
"patriots" to gather at war memorials
on 15 December "to protest American
insolence."
the Communist-led General Labor Confederation
and other extreme leftist groups would go on strike and
that they would be joined by rightist groups.
if President Eisenhower arrives at Villacoupia,y air-
port near Paris, 40 percent of the employees will walk
out, and that a mass demonstration will be held outside
the American embassy during any reception.
the Gaillard government has made substantial conces-
sions to labor which are expected to limit labor's willingness
to go out on strike. Some support may be available, however,
from Communist militants in response to the Communist
party central committee's, call for "dignified" demonstra-
tions against NATO.
The Paris police will be particularly alert
to forestall hostile demonstrations during the NATO discus-
sions and will effectively curtail any minor manifestations
of anti-Americanism.
12 Dec 57
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IRANIAN( PRIME MINISTER SAYS IRAN MAY ADOPT
NEUTRALIST POLICY
Comment on:
Iranian 'rime ivimibter
gested to an American embassy repre-
sentative that Iran is contemplating a
neutralist policy. Apparently continu-
ing Iran's campaign to highlight its need
for additional American aith Eqbal said
that unless there was an increase in such
aid, Iran would have to re-evaluate its
Baghdad pact position, cut down its army, and apply the sav-
ings to interior economic development. He asserted the Rus-
sians were willing to give economic aid and even ships for
the Iranian navy. Tehran, he said, believes it is gaining
nothing from its pact membership and is in an exposed posi-
tion with respect to tie USSR. The prime minister also
voiced suspicions regarding the motivation of Iraq and Tur-
key--both Baghdad pact members.
One of the most recent approaches of the
USSR in its campaign to enter the Iranian economy apparently
was made by the chief of the Soviet commercial office in Tehran
on 1 December to a group of Iranian businessmen.
he offered, Soviet participation in form-
ing an oil company to extract oil in northern Iran. The USSR
would furnish all equipment and technicians. Iran would own
51 percent of the stock, and the Soviet Union 49 percent.
12 Dec 57
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6. BURMA TO ACCEPT $10,000,000 SOVIET
AGRICULTURAL LOAN
Comment on:
Burma has aecided to accept a Soviet
offer to construct two irrigation dams
in central Burma on a credit extending
over 12 years at 2.5-percent interest.
Moscow had also offered to construct a
plow factory on a five-year credit at 2.5-percent interest.
in view
of Burmese negotiations with Czechoslovakia and Japan for
a textile factory and the fact that the Chinese Communists are
already building one, the USSR was not interested in such a
project at present.
The credit for construction of the irriga-
tion dams will amount to approximately $10,000,000, about half
of which will be in foreign exchange,
12 Dec 57
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7. INDONESIAN SITUATION
Comment on:
Communist gains in Java have convinced
Sumatran leaders that the only sensible
course is to declare Sumatra independent,
The military com-
mander in Central Sumatra, Lt. Col.
Hussein, has already taken steps to protect
foreign business in his area and to see that
revenues, which previously went to Djakarta,
do not fall into Communist or central govern-
ment hands.
Hussein has ordered that Dutch enterprises
be placed under the control of the provincial administration and
that the tax on all exports be, turned over to authorities in
Padang, the provincial capital, rather than be remitted to
Djakarta. In South Sumatra, army commander Lt. Col. Bar-
Han has assured the local Stanvac manager that the Dutch in the
province will be protected and that Dutch employees of Stanvac
will not be forced to leave.
In Java, President Sukarno has made his
first statement since the speech following the attempt on his
life on 30 November. In a brief speech in Surabaya he said
there would be no letup in the anti-Dutch campaign and appar-
ently omitted any reference to illegal labor activities. He tied
the campaign to Indonesia's demand for Netherlands New Guinea,
stated that Indonesia faces "many hardships" in its battle to win
the area, and said the country's aims are supported by a major-
ity of the world's population including Communist China.
12 Dec 57
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8. JAPANESE PRIME MINISTER FACES ELECTION DILEMMA
Comment on:
Renewed faCtionalism within Japan's rul
ing Liberal-Democratic party threatens
the stability of the Kishi government an
is becoming the major consideration in
Kishi's timing of general elections.
Prime Minister Yoshida and other party leaders
Who resent their continued secondary role in party and gov-
ernment affairs are trying to topple the Kishi administra-
tion. Their maneuvers are directed against Kishits reten-
tion in the cabinet of Economic Planning Board Minister
Ichiro Kono, the strong man of the Hatoyama cabinet, who
they fear is too ambitiously expanding his power.
The Yoshida and Kono groups, which ap-
pear to be irreconcilable, are demanding that Kishi make a
choice between them. Each has threatened to quit the party
and force the government to resign if it loses.
Kishi probably will attempt first to work
out a compromise. Should he fail, a decision to hold elec-
tions in January or February, rather than next fall as Kono
desires, would aid Yoshida, who wants early elections to
limit Kono's opportunities to entrench himself further.
The open factionalism in Japan's con-
servative ranks that will result from a failure to solve this
problem would encourage the trend toward the left and neu-
tralism that has been evident over the past several years.
Any successor to Kishi, and particularly if it is Kona, not
only might loosen ties with the United States but might seek
closer relations with the Communist bloc, especially Com-
munist China.
12 Dec 57
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9, GUATEMALAN SITUATION
Comment on:
Rightist plots to seize the Guate-
malan government have received
new impetus from the failure on
6 December of the most recent
unity attempt by anti-Communist
forces. Fear of adverse United
States reaction has thus far been
an important factor in discouraging
the several military and civilian groups that are consider-
ing a coup. Extreme rightists, however, are receiving en-
couragement and financial support from Generalissimo
Trujillo of the Dominican Republic. A rightist coup would
provoke strong counteraction from leftists, who are capable
of causing serious violence.
The Communist-infiltrated Revolu-
tionary party, which on 5 December was granted the right
to participate in the 19 January national elections, is the
country's strongest single party. Although Interim Pres-
ident Flores assured the American ambassador on 9 Decem-
ber that he would never turn over the government to a Com-
munist, he is a weak leader and is hampered by his policy of
strict adherence to the law and of complete neutrality in the
coming election. He has refused to permit the return of
prominent Communist exiles, but Communists and pro-
Communists are reported still returning to Guatemala. Flores
sees little danger in the activities of leftists who, during the
pro-Communist Arbenz regime, demonstrated their subservi-
ence to Communist leadership and who now have considerable
influence in the Revolutionary party.
12 Dec 57
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SUMMARY
14 November - 11 December 1957
THE TAIWAN STRAIT
Report of the IAC Current Intelligence Group
for the Taiwan Strait Problem
1. There were no significant combat operations in the
area during the period.
2. Chinese Nationalist military authorities have professed
concern over the possibility of a Chinese Communist attack on
Ta Tan and Erh Tan Islands in the Quemoy area. Evaluation of
the evidence cited by the Chinese Nationalists does not indicate
that an attack is imminent, and Chinese Communist military ac-
tivity appears to continue at recently normal levels.
3. The 15 (possibly 30) jet light bombers which flew from
Peiping to Canton in late October have remained in the area, sug-
gesting that the deployment might be a permanent one. At pres-
ent, the Chinese Communists have 105 (possibly 1.20) jet light
bombers located within range of Taiwan.
4. Chinese Nationalist Foreign Minister George Yeh stated
in conversation with a trusted American friend on 30 November
that the Nationalists would intensify and enlarge mainland raids
to raise morale in the armed forces. Although Yeh's motives for
making this statement are not known, it is possible that the Na-
tionalists are planning a modest increase in the scope and fre-
quency of raids and ground reconnaissance patrols against the
mainland in an effort to focus world attention on Taiwan.
5. Peiping's refusal to accept a "two Chinas" solution to the
Taiwan problem was underlined on 15 November, when Chou �En-lai
12 Dec 57
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assembled the heads of all diplomatic missions in Peiping for
a two-hour briefing. Chou said the Chinese Communists were
willing to continue indefinitely Sino-American talks at Geneva,
but would not renounce force in the Taiwan area unless there
was an American withdrawal. Insisting that Taiwan is Chinese
territory, Chou declared there will be direct "negotiations" with
Chiang Kai-shek for Taiwan's liberation. In a subsequent inter-
view with a West German reporter, Chou renewed an "offer" to
give Chiang Kai-shek a high post if the Nationalists accept "peace-
ful liberation!'
6. Chinese Communist propaganda to Taiwan has begun
emphasizing charges that Soviet missile successes are weaken-
ing the US and Nationalist position on Taiwan. Nationalist offi-
cials, it is claimed, are "gradually losing confidence" in Amer-
ican strength, and prospects for Taiwan's "liberation" are "in-
creasing daily."
12 Dec 57
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*Delineated runways are explained as a defined or marked area on an airfield
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