CURRENT INTELLIGENCE BULLETIN - 1955/06/08

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03194472
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 9
• Document Creation Date: September 20, 2019
• Document Release Date: September 26, 2019
• Publication Date: June 8, 1955

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v
3.3(h)(2)
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8 June 1955
Copy No.
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO
NO CHANGE IN CLASS.
CI DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: .20/a-
ALITH: HR 70-2
DATE: 9,///e30 REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
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',tune 'tor
SUMMARY
GENERAL
1. British find Menonis account of Peiping talks obscure (page 3).
2. Soviet ambassador in Peiping comments on Sino-Soviet relations
(page 3).
3. USSR sells gold to Britain and reinstitutes trade contracts
(page 4).
SOUTHEAST ASIA
4. Diem links status of French forces to Vietnamese policy on
elections (page 5).
SOUTH ASIA
5. Afghan-Soviet agreement for establishment of new point of entry
announced (page 6).
NEAR EAST - AFRICA
6. Nasr reported intending to disband Egyptian council (page 8).
WESTERN EUROPE
7. Effect of the Sicilian elections on the Scelba government (page 8).
* * * *
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GENERAL
1. British find Menon's account of Peiping talks obscure:
British foreign secretary Macmillan,
who talked with Krishna Menon on
3 June, has described him to Ambassa-
dor Aldrich as seeming to be honest but
un xpr imself logically." Macmillan said it was
very difficult to gain a clear understanding of what Menon had
in mind and of what had actually occurred in his talks in Peiping.
� Menon apparently envisages a series
of Sino-American conferences to be held wherever the United
States and Communist China have diplomatic missions. Such con-
ferences, designed to explore the relaxation of tensions in the
Far East, might lead eventually to formal discussion of the off-
shore islands and Formosa.
Comment: Macmillan's account sup-
ports other evidence that Chou En-lai encouraged Menon to believe
in the possibility of successful Sino-American negotiations but did
not significantly modify the hard Chinese Communist line on sub-
stantive issues.
Menon's proposal for Sino-American
diplomatic contacts reflects a similar suggestion of Chou's. Chou
seems to believe that an expansion of such contacts--similar to
those of the past year between American and Chinese Communist
representatives in Geneva, on the subject of American nationals
detained in China--would lead to top-level formal negotiations and
would facilitate general acceptance of Peiping in the international
community.
Soviet ambassador in Peiping comments on Sino-Soviet relations:
Soviet ambassador Yudin recently ex-
pressed the opinion that Communist China
would be so strong in another 15 years
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Now/
that no other country would be able to tell it what to do.
while the USSR had given the Chinese scien-
tific and technical know-how in the atomic field which would
eventually enable them to produce nuclear weapons, it had not
given them either the bomb itself or the facilities for its manu-
facture.
Comment: Soviet officials seldom
comment on the international status of Communist China, aside
from the set propaganda line. Although Yudin's remark may stem
from a growing independence on the part of the Chinese Commu-
nists, it may reflect a Soviet desire to encourage the United States
to reach a compromise with Peiping.
Yudin's remarks indicate that the USSR
has actually given Communist China the scientific and technical
assistance which was offered to China and four Satellite states on
17 January. The original offer included research fissionable
materials, accelerators, and equipment for the construction of
a low-power reactor useful for research purposes.
Concurred in by OSI)
3. USSR sells gold to Britain and reinstitutes trade contracts:
A representative of a British banking
firm told Ambassador Bohlen on 6 June
that he had just signed a contract to pur-
chase $50,000,000 worth of Soviet gold
no as s aying oscow a few more days in the belief that the
Soviet Union might sell an additional $50,000,000 in gold.
The bank representative further stated
that the USSR had reinstituted in April contracts for British goods
which it had canceled last January or February.
Comment: In late 1954 and early 1955,
the USSR canceled $20,400,000 worth of orders in Britain and de-
layed trade talks and the conclusion of new contracts with several
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other Western European countries. This retrenchment was
probably a result of uncertainty on the part of Soviet foreign
trade officials as to the exact role East-West trade would play
In 1955 under the Khrushchev economic policy.
To date at least $12,600,000 of the
$20,400,000 orders from the UK which were previously canceled
have been reinstituted, some of them on deferred delivery and
payment terms.
The sale of $50,000,000 worth of gold
represents about one third of total Soviet gold sales in 1954. It
demonstrates the Soviet need for foreign exchange in view of low
sterling balances. (Prepared by ORR)
SOUTHEAST ASIA
4. Diem links status of French forces to Vietnamese policy on
elections:
Premier Diem sees the status of the
French Expeditionary Corps as closely
related to the question of consultations
with the Viet Minh on all-Vietnam elec-
ions, according o Ambassador Reinhardt. In Diem's view it is
essential that Vietnamese sovereignty be unquestioned and com-
plete before his government makes any declaration on the elec-
tions provided for at Geneva.
When such a declaration is made, Diem
and his foreign minister want to dissociate themselves entirely
from the Geneva accords. They fear that otherwise the Inter-
national Control Commission, which they profoundly distrust, will
move in and take over arrangements for the elections.
Comment: As a signatory of the Geneva
agreements, France bears the legal responsibility for carrying
out the terms for the non-Communist side. South Vietnam did not
sign and Diem thus is not legally bound to enter talks with the Viet
Minh on or after 20 July as specified at Geneva. He is therefore
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'tare 'Nee
in a strong bargaining position to negotiate with the French on the
future status of the French forces.
The Indians, who hold the deciding vote
on the International Control Commission, are, however, little im-
pressed with the legalities at issue and are apparently determined
that arrangements for the elections envisioned at Geneva shall go
forward. The Viet Minh, meanwhile, is stepping up its propaganda
campaign to the same effect and has called publicly for negotiations
on or after 20 July.
SOUTH ASIA
5. Afghan-Soviet agreement for establishment of new point of entry
announced:
ghanistan has announced an agreement
ith the USSR for the development of a new
oint of entry on the Afghan side of the Oxus
ver to facilitate the flow of Soviet goods
"nto the country, according to the American
army attach�u . With the new facilities, Qizil Qalu (see map,
p.7) will replace Termez and Kilif some distance farther west. A
new road will be built to the road junction at Kunduz, some 40 or 50
miles from Qizil Qalu.
Construction is to be by Afghan labor under
Soviet technical supervision.
Comment: The new arrangement would
materially shorten road-haul distances between the Soviet border
and Kabul and could be expected to ease long-standing difficulties
in moving goods between the two countries.
Negotiations have probably been under way
for some time. It is possible, however, that the agreement results
from negotiations conducted since Afghan-Pakistani trade was dis-
rupted by the Kabul riots of 30 March. In the latter case, the agree-
ment could represent either a serious Afghan attempt to find alter-
nate transportation routes through the USSR for use in case of
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`tope
Mary
Kushka
ISLAM
GALA
HERAT
"Ol
Qala Nair
AF
64
/Shibarghan
Matmana
Kandahar
Spin Baldak.
68
Samarkand
S.
Termez 0
R.
Stalina bad
ayza
zi Qalu
Kunduz Khanabad
72
Khorog
AFGHAN - SOVIET
TRANSPORTATION
lAr Proposed new port
All weather road
-1�f- Railroad (selected)
7 JUNE 1955
0 50 190 200
' SlATUTE MILES _
50607 3
CONJPZENTIAL
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Natior
a Pakistani blockade or merely propaganda to try to force an eas-
ing of Karachi's pressure on Kabul.
NEAR EAST - AFRICA
6. Nasr reported intending to disband Egyptian council:
Egyptian prime minister Nasr intends to
disband the Revolutionary Command
Council as the supreme authority in
government as soon as practicable,
Nasr is said to feel that he will have the
support of the "Free Officers" after disbanding the council. He
reportedly will not regard himself as "responsible" to them, how-
ever. Nasr has no definite plans for the
future torm ot government but wishes to establish "some new and
popular basis for the revolutionary regime."
Comment: Other reports from Cairo
suggest that Nasr may be engaged in a reappraisal of the regime's
organization and that a showdown involving the support of the "Free
Officers"--the 200 to 400 officers who are the basis of the regime's
control over the army--may be imminent.
Disbanding the council and attempting to
de-emphasize the military aspect of the regime might give the ap-
pearance of broadening the base of the government. In view of the
regime's failure to gain significant popular support during the past
three years, however, such actions may well result only in increas-
ing Nasr's personal authority.
WESTERN EUROPE
7. Effect of the Sicilian elections on the Scelba government:
As a result of the Sicilian elections on
5 June, there may be a vote of no confi-
dence in Premier Scelba's coalition cabi-
net when the Italian parliament reassembles
on 14 June.
8 June 55
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'Nue
Although the Christian Democrats in-
creased their representation in the 90-member regional assembly
from 30 to 37, the ability of the Communist and Nenni Socialist
Parties to hold their 30 seats and the fact that the Christian Demo-
crats' gains were at the expense of their smaller allies in the
national coalition may put Scelba in an awkward position,. Further-
more, Scelba's critics could exploit the election results as proof
that the government's anti-Communist campaign has been ineffec-
tive.
The Christian Democratic gains are due
largely to the hard organizational work put in by party secretary
Fanfani and will probably encourage him to force a reshuffle of the
Rome cabinet and to claim the posts now held by the minor parties.
The Christian Democrats do not have a majority in parliament, and
the formation of an all-Christian Democratic government would
probably not be attempted without a working arrangement with either
the Nenni Socialists or the Monarchists.
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