CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000900050001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 40
• Document Creation Date: December 16, 2016
• Document Release Date: March 30, 2005
• Sequence Number: 1
• Publication Date: July 26, 1956
• Content Type: SUMMARY

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CONFIDENTIAL
r-1 120 r-M COPY NO. 16
OCI NO.4647/56
26 July 1956
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
DOCUMENT NO. Ye ,
NO CHANGE IN CLASS.
Cl DECLASSIFIED
CLASS, CHANGED TO: T$ S
NEXT REVIEW DATE:
DATE : jl`iEVIEWER:..Q
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
State Department review completed
CONFIDENTIAL
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
Statements from Cairo suggest that the Nasr regime
is attempting to conceal the disappointment and un-
certainty caused by the West's decision not to finance
the initial stage of the Aswan High Dam project at this
time. Cairo's discomfort apparently is being increased
by conflicting reports on the attitude of the USSR, which
has three times in the past week denied committing itself
to the support of the project, but has not closed the
door to later negotiations.
ARAB-ISRAELI SITUATION . . . . . . . . . . . . . . . . . Page 2
UN secretary general Hammarskjold's visits to
Jerusalem, Amman and Cairo passed quietly with no immedi-
ately apparent results save an announcement he would re-
turn in October. While there was a lull in border in-
cidents during his stay in the area, new clashes occurred
soon after his departure.
NOTES AND COMMENTS
DE-STALINIZATION PROBLEMS .
Page 1
Page 1
As the anti-Stalin campaign moves into its sixth
month, Soviet leaders are still trying to find satis-
factory formulations for the respective roles of Stalin,
the Communist Party, and other elements in the successes
and failures of the Soviet state. The Soviet Defense
Ministry's newspaper, Red Star, has partially repudiated
an earlier position, anbas stated that through Stalin's
fault, Soviet industry and armed forces were not properly
mobilized when war began. On the question of the re-
lationship between the foreign Communist parties and the
USSR, two Pravda editorials. and a speech by party
presidium member Suslov to the French Communist Party's
14th Congress made clear that while Moscow wants,Vnity
in the international Communist movement, it does not
want to give up the advantages of having the parties ap-
pear to be national and more independent.
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26 July 1956
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PEIPING STILL CAUTIOUS
ON DE-STALINIZATION . . . . . . . . . . . . . . . . . Page 2
Peiping still seems to be steering a middle course
between outright. support of and nonparticipation in the
Kremlin's de-Stalinization campaign. The Chinese
Communists apparently hope to avoid intensive arguments
among the party rank and file and to control whatever
discussion may develop.
initial phase of policy transformation.
DEVELOPMENTS IN HUNGARY
SINCE RAKOS I' S OUSTER . . . . . . . . . . . . . . . . . Page 3
Political developments in Hungary since the removal
of party first secretary Matyas Rakosi on 18 July indi-
cate a significant increase in the power of the moderate
elements within the party. Many concessions to the de-
mands of the moderates apparently have been granted by
the new first secretary, Erno Gero. Official policy
pronouncements stress the need for party unity and re-
flect an attempt to compromise conflicting views within
the politburo and the central committee. :Moscow
oriented Gero's tenure may be a temporary one, made for
the purpose of restraining moderate elements during the
POLAND'S NEW DOMESTIC POLICIES . . . . . . . . . . . . . Page 5
The speech of First Secretary Ochab to the central
committee of the Polish United Workers (Communist)
Party on 19 July, in which he advocated a policy of re-
laxation, indicates that the reported policy conflicts
between the moderate and orthodox Polish Communists
have been at least temporarily resolved. The scheduled
reforms outlined by Ochab will probably not be sufficient,
however, to win the co-operation of the public.
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NEW ICELANDIC GOVERNMENT . . . . . , . . . , . . . . . Page 6
The six-man coalition cabinet which assumed office
in Iceland on 24 July includes two representatives of
the Communistdominated Labor Alliance. Iceland's ad-
herence to.NATO is not immediately threatened, but the
new government will undoubtedly press for revisions in
the status of the American-manned Keflavik air base
along the lines of the parliamentary resolution of 28
March calling for the withdrawal of American troops.
The Communists' participation in the government may
enable them to exercise a greater influence over the
nation's economy with a view to building a strong
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26 July 1956
PROSPECTS IN PERU
UNDER THE PRADO GOVERNMENT . . . . . . . . . . . . . . . Page 7
Manuel Prado, who is to be inaugurated as president
of Peru on 28 July, is likely to continue the policies
of his predecessor, which have made Peru one of Latin
America's more attractive areas for foreign investment.
However, Prado's political commitments to the non-
Communist, leftist APRA, which supported him in the
election, may lead to conflict between his conservative
administration and the mass-supported APRA in the
legislature. This might create conditions which would
discourage foreign investment in Peru.
FRENCH NORTH AFRICA . . . . . . . . . . . . . . . . . .
The Algerian rebels, possibly supported by Moroccan
guerrillas, have revealed their possession of more and
better automatic weapons in a series of clashes with
French forces in western Oran since 19 July. On the
political front, Tunisia's withdrawal from negotiations
with France on 13 July illustrates the sensitivity of
the Bourghiba government on the ia's
sovereignty.
Page
THE FRENCH COMMUNIST PARTY'S 14th CONGRESS . . . . . . . Page 10
The 14th Congress of the French Communist Party
held at Le Havre on 18-21 July has confirmed Secretary
General Maurice Thorez' control of the party. Emphasis
was laid on unity of action with the Socialists, fore-
shadowing an intensified campaign for Communist-
Socialist co-operation. Party organization problems re-
ceived only perfunctory attention.
TRAVELS OF SOVIET LEADERS . . . . . . . . . . . . . . Page 11
The last two weeks have seen the greatest exodus of
top Soviet leaders from Moscow since collective leader-
ship was established after Stalin's death. As of 22 July,
12 of the 20 members of the presidium and secretariat,
including the most.prominent ones, were either on
official trips in various parts of the world or vacationing.
Such a dispersal suggests the existence of a high degree
of mutual trust among h hers of the collective.
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26 July 1956
announced a second troop reduction.
EUROPEAN AND ASIAN SATELLITES ANNOUNCE
ARMED FORCE REDUCTIONS . . . . . . . . . . . . . . . . . Page 12
Czechoslovakia?s announcement of 25 July that it
would cut its armed forces brings to seven the number of
Sino-Soviet Satellites that have followed the Soviet "ex-
ample" of 14 May. Rumania, Hungary, and Poland, which,.
like Czechoslovakia, had followed the Soviet pattern of
announcing reductions in the fall of 1955, have indicated
they will make further cuts. East Germany, North Korea,
and North Vietnam have announced reductions for the
first time. Albania and Bulgaria thus far have not
JAPANESE INCREASE AWARENESS
OF INTERNAL SECURITY THREAT . . . . . . . . . . . . . . Page 13
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Japan?s vulnerability to subversion stems more from
the inadequacy of the government's security system than
from the capabilities of the Japan Communist Party. The
probability of renewed diplomatic relations with the
USSR has made conservative leaders increasingly conscious
of the security problem. The government probably will
move slowly and cautiously to improve the situation.
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NEW CHINESE COMMUNIST TRADE
CAMPAIGN IN JAPAN . . . . . . . , . . . . . . . . . . Page 14
The pattern of Sino-Japanese trade since the beginning
of 1956 suggests that Peiping has taken a new tack in its
campaign to reduce American influence in Tokyo. By easing
its demands for goods subject to trade controls, while
ordering increased quantities of nonembargoed goods,
Peiping is raising the level of its imports from Japan.
Sino-Japanese trade negotiations are scheduled for next
October, and pressures from business groups in Japan may
bring about an exchange of permanent commercial re re-
sentation at that time.
SINO-SOVIET BLOC DRIVE
IN INDONESIA . . . . . . . . . . . . . . . . . . . . . . Page 15
With Indonesian president Sukarno scheduled to de-
part on 25 August for a tour of the Soviet Union,
Eastern Europe and Communist China, the Sino-Soviet bloc
is intensifying its political, economic, and cultural
campaign in Indonesia in order to obtain maximum
advantage from the visit. A Soviet technical assistance
offer is now being considered by Indonesia, and a Soviet
mission is soon to negotiate the first trade agreement
between the two countries. 25X1
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THE PLAN FOR SYRIAN-EGYPTIAN UNION AND
OTHER ARAB UNION PLANS . . . . . . . . . . . . . . . . . Page 1
Syria's proposal for a union with Egypt, now under
consideration, fits into a pattern of plans for various
combinations of Arab states and for a union of all Arab
states which have been advanced over a number of years.
The idea of Arab union originates from a desire to
achieve a united Arab front versus the West and, more
important, against Israel. The proposal for Syrian-
Egyptian union, particularly, must be viewed in the light
of Syria's immediate wish for protection against Israel,
and on the Egyptian side, in terms of Egypt's ambition
to exclude Iraqi influence in Syria Lebanon, and Jordan.
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BRITAIN MODIFIES POLICY TOWARD SOVIET BLOC . . . . . . . Page 4
Prime Minister Eden is shifting the emphasis of
Britain's economic, defense, and foreign policies,
apparently to prepare for an extended period of sharply
competitive peaceful coexistence with the USSR. The
belief in Britain that a general war is unlikely in the
foreseeable future and the need to deal with the nation's
economic ailments are leading London to consider a
substantial switch in energy. money, and from the defense program. 25X1
SOVIET TRANSPORTATION IN THE SIXTH FIVE-YEAR PLAN . . . Page 7
Soviet goals for transportation in the Sixth Five-
Year Plan (1956-1960) are designed to keep transportation
facilities abreast of the country's fast economic develop-
ment. They include increasing railway freight traffic
by 42 percent, doubling highway and maritime transport,
and increasing oil pipeline traffic sixfold. Plans for
the railroads call for laying twice as much new track as
during the previous five years, doubling the length of
electrified lines, and greatly increasing the use of
electric and diesel-electric locomotives. Prospects are
that these goals will be fulfilled. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
OF IMMEDIATE INTEREST
Statements from Cairo sug-
gest that the Nasr regime is
attempting to conceal the dis-
appointment and uncertainty
caused by the West's decision
not to finance the initial
stage of the Aswan High Dam
project at this time. Cairo's
discomfort apparently is being
increased by conflicting reports
on the Soviet attitude; initial
Egyptian reaction to these re-
ports is an insistence that the
Arabs can "go it alone" if
necessary. Reactions from
other Near East and South Asian
countries, even though in some
cases voicing approval of the
Western action, are unanimous
in interpreting the decision
as based on political rather
than economic grounds.
While there nave been stereotypec
assertions that Western policy
is guided only by a desire to
force neutral countries into
PART
I
the Western power bloc, the
major Egyptian propaganda effort
appears to be to attack the
economic argument in the Western
announcements. In a speech on
24 July, Nasr accused the
United States of spreading "lies"
on the state of the Egyptian
economy,
In addition to pique at
the official explanation of the
Western decision, Nasr's insist-
ence on Egypt's ability to
rely on itself to construct the
dam may stem from uncertainty
about the Soviet attitude.
Soviet Attitude
Since the refusal by the
West to finance the high dam,
the USSR has three times denied
committing itself to the support
of Egypt's high dam project, but
has not closed the door to later
negotiations possibly during
President Nasr's trip to
Moscow in August. The USSR's
apparent coolness toward
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
sponsoring the project may have
resulted from a reassessment
.of the dam's ability to satisfy
Egypt's economic needs and the
over-all advantages to the USSR
when weighea against the risks
and the costs involved.
During the past week,
statements by Soviet foreign
minister Shepilov and ambas-
sador to Egypt Kiselev suggest
that the USSR will not renew
its offer to finance the dam
at this time. According to
Ambassador Bohlen, Shepilov
told correspondents "quite
explicitly" at the Belgian em-
bassy National Day reception on
21 July that industrialization
was much more important to
Egyptian development than the
Aswam dam, and that the Soviet
Union was prepared to consider
Egyptian requests for assistance
in industrial development.
In addition, an Egyptian
newspaper report of a statement
by Kiselev at a Polish embassy
reception on 22 July that
"Russia stands by her word as
given to Egypt regarding fi-
nancing the high dam project"
brought an immediate denial
from Kiselev,.who said he merely
reiterated Shepilov's statement,
ARAB-ISRAELI SITUATION
UN
1iammarskjold's visits to
Jerusalem, Amman and Cairo
passed off quietly with no im-
mediately apparent results.
While there was a slight lull
in border incidents during the
secretary general's stay in
the area, new clashes of more
serious proportions occurred
soon after his departure.
"but I made no mention of the
high dam:', Further confusion was
created by reliable press re-
ports from a Cairo refinery
dedication ceremony on 24 July
that Kiselev said "We are ready
to finance the Aswan High Dam
if Egypt asks for it." That
evening the Soviet embassy press
attache in Cairo issued a denial
which said, "Ambassador ICiselev
did not make any statement re=garding the high dam today."
The.. refusal of the USSR to
reaffirm its offer suggests
previous... reports that Shepilov
had renewed the Soviet offer
during his visit--this-was de-
nied by Shepilov--were fabricated
or exaggerated by the Egyptian
government to press the West
into liberalizing its terms.
However, as a result of the wide-
spread impression that the USSR
was bidding for the contract,
Moscow will be under increasing
pressure to honor its original
offer. A Yugoslav broadcast
has already challenged the
USSR to take this opportunity
;n show its "real capacity and"
willingness... to give aid to
underdeveloped countries."
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Iiammarskjold reportedly
warned both Israeli and Jor-
danian leaders that retaliatory
raids did not constitute de-
fense, but he seemed to have
made little or no progress on
the positive side in "narrow-
ing the gap" between the Arab
and Israeli stands regarding
a settlement. On leaving Cairo
on 23 July, he announced he
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26 July 1956
plans to return to the Near
East in October.
While the calming effect
of Hammarskjold's mission last
April lasted at least a few
weeks, the effect of his most
recent effort seemed to depart
with him. There was an out-
break of serious fighting
on the Israel-Jordan border
PART I
west of Jerusalem on 25 July.
If peace is maintained in the
area, it would seem to depend
not on the secretary general's
efforts but on fears, such as
those expressed last week by
Jordan's Chief of Staff Nuwar,
who said he doubted his army
could withstand an Israeli
attack for more than ours.
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26 July 1956
NOTES AND COMMENTS
DE-STALINIZATION PROBLEMS
The anti-Stalin campaign
this week moved into its sixth
month with the Soviet leaders
still trying to. find satisfac-
tory formulations for the respec-
tive roles of Stalin, the Com-
munist Party, military leaders,
and the. Soviet people in the
successes and failures of the
Soviet state.
Stalin's role in Soviet
military preparedness for World
War II and the question of re-
sponsibility for the early de-
feats have proved to be two
of the most controversial issues
in the whole area of historical
revision.
Last May, the Soviet Defense
Ministry newpaper, Red Star, at-
tacked another Defense Ministry
organ, Military Herald, for its
"incorrect, harmful opinion"
that "our army was forced to
retreat, conduct defensive bat-
tles ...as a result of failure
to bring troops to.military pre-
paredness," Subsequently,' Red
Star itself was rebuked in the
171-story journal, Voprosy Istorii,
for its attempt to embellish"
the story of the war by minimiz-
ing Soviet defeats,
On 19 July, however, Red
Star was willing to admit TTiat
aall was not well in the Soviet
Union on the eve of the war
While the paper again stressed
that "during the years of build-
ing socialism the party under-
took all measure for providing
the armed forces with trained
command personnel... and took
care of equipping them," it
blamed Stalin's intransigence
for the inability of the armed
forces to cope with the German
Wehrmacht in the early years of
the'war. He "did not undertake
the necessary measures for still
greater strengthening our mili-
tary power during the period
when war already raged in Europe.
and when it was clear that Fas-
cist Germany would attack the
USSR. Our industry was not
truly mobilized on time for pro-
viding the army with a sufficient
quantity of military equipment
and arms."
Differences in the patty
line on the war issue appear
to arise from the problem of
blaming Stalin for wartime de-
feats without at the same time
ascribing so much power to him
as to credit him with the final
victory, and without placing in
doubt either party infallibility
or the reputations of certain
living political and military.
leaders.
The shifts in line probably
reflect differences of opinion
among party leaders on how best
to solve the problem, rather
than a tug of war between the
party and the army. They may
even reflect a change in the
opinions of individual leaders
in response to internal and ex-
ternal reactions to the de-
Stalinization campaign.
Problem of Independence
A Pravda editorial on 16
July chatarged that the United
States was engaged in a politi-
cal campaign to exploit the de-
Stalinization issue in order to
"introduce dissension and con-
fusion" in the international
Communist movement. The purpose
of this campaign, it was stated,
was to isolate individual Com-
munist parties, and particularly
to sever their ties with Moscow,
in order to destroy them. The
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
editorial continued that in "ex-
pressing the national charac
tcristics 01 their peoples, `'
the Communist parties must not
forget the fundamental need
for unity. According to a
Pravda article of 24 July, the
members of the Communist move-
ment are progressing along dif-
ferent roads, but will achieve
the same goal because they are
using the "compass of Marxism-
Leninism."
A speech by party presid-
ium member Suslov to the 14th
French Communist Party congress
also urged unity and a consoli-
dation of the ties between Com-
munist parties, but it said
nothing about the plotting of
Western groups. More emphasis
was placed on the primary need
of each party to set its own
tasks "in conformity with...the
national interests of its peo-
ple." Suslov said that the forms
of Communist party co-operation
"cannot be modeled after the same
pattern suitable for all times
and circumstances."
The speech was a further in-
dication that while Moscow
wants fundamental unity in the
Communist movement, it does not
want to give up the advantages
of having the parties appear
to be national and more inde-
pendent.
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PEIPING STILL CAUTIOUS
ON DE-STALINIZATION
Peiping still seems to be
steering a middle course be-
tween outright support of, and
nonparticipation in the Krem-
lin's de-Stalinization campaign.
The Chinese Communisf.:3 apparent-
ly hope to avoid intensive argu-
ments among the party rank and
file, and to control whatever
discussion may develop.
Peiping's recent publica-
tion of a book of material on
"criticism concerniYig the Stalin
issue"--primarily statements.
released by various Communist
parties--is the regime's only
contribution since 5 April to
the de-Stalinization campaign.
Moreover, while the Kremlin's
resolution of 30 June and Togli-
atti's statements are said to
be included in Peiping's book,
Khrushchev's "secret" denuncia-
tion of Stalin is not.
People's Daily Editorial
The definitive Chinese
Communist position on Stalin
was set forth in the Peo le's
Daily--the party's journal--on
5 April. The editorial followed
the general pattern of the in-
dictments published in the USSR
at the time, but it showed the
Chinese to be less inclined
than the Russians to dwell on
Stalin's errors, Stalin was.
credited with "indelible" achieve-
ments, he was not blamed for
any Chinese misfortunes, and
his works were described as
meriting "serious study" in China.
At no time since the de-
Stalinization campaign began
have individual Chinese Commu-
nist leaders made any public
statements on Stalin's stature.
When a foreign newsman recently
asked Chou En-lai to comment,
the Chinese premier replied
that he had "nothing to add" to
the editorial's."complete re-
view of China's position."
On two occasions, Moscow
.has reprinted those sections
of the Chinese editorial criti-
cal of Stalin, thus apnarently
hoping to convey to other
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non-Soviet Communists Chinese
support of its re-evaluation
of Stalin. While the USSR
may have wished for stronger
support from Peiping--its prin-
cipal ally--it would not be ex-
pected to press Peiping on the
matter.
Mao's Position
Peiping's restricted partid-
ipation in the campaign sug-
gests sensitivity to the entire
question of "collective leader-
ship," The Chinese editorial
strongly implied that the cam-
paign had no relevance to the
Chinese party leadership, The
Chinese party for many years
has been, and still appears to
be, dominated and directed by
Mao Tse-tung, Propaganda treat-
ment of Mao as an eminent lead-
er continues. His photographs
are displayed prominently in
public places, and his views
DEVELOPMENTS IN HUNGARY
SINCE RAKOSI'S OUSTER
Political developments in
Hungary since the removal of
party first secretary Matyas
Rakosi on 18 July indicate
a significant increase in the
power of the moderate elements
within the party. Many conces-
sions to the demands of the
moderates apparently have been
f:=ranted by the new first secre-
tarv, Erno Gero.* Official
*The term "moderate ele-
ments" refers to the party fig-
ures who oppose Rakosi's person-
al leadership on grounds rang-
ing from conviction that great-
er liberalization is required
in all sectors of domestic pol-
icy to a mere difference as to
the best tactical approach in
implementing current policies.
on party and government policy
are cited as authoritative.
The Eighth Congress of the
Chinese Communist Party, sched-
uled to convene this September,
is expected to reconfirm Mao
as the party's leader but at
the same time to narrow the
gap between Mao and other lead-
ers in preparation for Mao's
death or retirement. This would
follow the strategy of the
.government reorganization of
1954, which reduced Mao's con-
stitutional powers and enhanced
the roles of leaders such as
Liu Shao-chi and Chou En-lai.
Although Mao will almost cer-
tainly remain dominant in the
party, the congress, in distrib-
uting greater authority among
other party leaders, will be
looking toward a succession
to Mao which will be more nearly
a "collective leadership" in
fact as well as in theory,
policy pronouncements stress
the need for party unity and
reflect an attempt to compro-
mise conflicting views within
the politburo and central com-
mittee. The Moscow-oriented
Gero's tenure may be a tempo-
rary one made for the purpose
of restraining moderate ele-
ments during the initial phase
of policy transformation within
Hungary.
Party realignment accom-
panying the Rakosi ouster sig-
nificantly increased represen-
tation for moderate elements
not only within the politburo
but also on the central commit-
tee.
Appointments to the central
committee include such moderates
as Gyula Kallai, a former "home-
grown" Communist who was imprisoned
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26 July 1956
in 1951, and four local party
secretaries who are apparently
proteces of Istyan Kovacs, an
old-time party worker and secre-
tariat member with a reputation
for moderation.
Another new central com-
mittee member, Imre Horvath,
who reportedly will be named
foreign minister shortly, per-
haps epitomizes the attitude
of the moderate camp. An intel-
lectual Communist of long stand-
ing, Horvath privately told
an American official in April
that the Hungarian party had
lost the "trust of the people"
and that the party, in the
long run, could not maintain
itself in power without genuine
majority support.
Policy Announcement
The resolution summing up
the central committee meeting
of 18-21 July is conciliatory
in tone and appears to be in
part a synthesis of divergent
views. While reasserting basic
Communist tenets, it modifies
the Rakosi line in virtually
all areas of policy.
The resolution proclaims
the primacy of heavy industry
and agricultural socialization
but calls for a number of slight
revisions in the Five-Year Plan
directives in order to improve
production and workers' living
conditions. It also urges im-
mediate boosts in real wages.
Part and parcel if this
aspect of the program are the
energetic efforts of the new
leaders to gain the support of
the workers. Gero,.in a reveal-
ing statement on 18 July, said,
Touch wood, there has been no
Poznan in Hungary."
In censuring right-wing
opportunism, the resolution
nevertheless conceded that past
"symptoms of wavering and mis-
trust of the party" were in
large part the result of "mis-
takes committed by the top
layer of the party," and that
justifiable criticism had erro-
neously been branded as "right-
wing opportunism,"
The emphasis on the role
of the People's Popular Front
has also been altered by the
resolution. New concessions
have apparently now been made
to moderate demands that the
front be made into a more gen-
uinely representative body.
The resolution indicated
that, in line with moderate
demands, the rehabilitation of
purged Communists and fellow
travelers--many of whom were non-
Muscovites imprisoned in the
late 1940's or 1950's---would be
"completed," The resolution
added that greater control would
be exerted over Ministry of
Interior ersonnel
Gero, whose health is re-
portedly had, may be only a
provisional appointment, de-
signed to check the more extreme
forms of factionalism and anti-
party expression. Over-all policy
will occupy a middle-of-the-road
position and strong efforts will
be made to restrain advocates
of dramatic liberalization. The
American legation in Budapest
doubts, however, that the present
compromise will halt pressure
for further liberalization.
The moderate forces are aware of
Gero's history of doctrinal ri-
gidity, and are unlikely to
allow their position to be under-
cut by only limited cessions.
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26 July 1956
POLAND'S NEW DOMESTIC POLICIES
The speech'of First
Secretary Ochab to the central
committee of the. Polish United
Workers (Communist) Party of
19 July, in which he advocated
a policy of mC deration, , indicates
that the reported policy con-
flicts between the moderate
and orthodox Communists have
been at least temporarily
resolved.
Ochab,'who had been're"
ported as desiring to return to
a hard course, stressed the
need for greater democracy and
for decentralization of the
administration in Poland, and
he outlined a reduction in the
industrial production targets
for 1960. The major difference
remaining between Ochab and
the moderates appears to be on
the question of public criticism,
with Premier Cyrankiewicz
stressing the need for it, and
Ochab, the necessity to limit it.
.Economic Matters
Much of the ' first secre-
tary's speech was taken up with
a discussion of economic matters,
particularly those economic
weaknesses which brought about
the Poznan riots. He noted the
country's inadequate standard
of living, wage cuts, poor
working conditions,-the unduly
high income tax, and the indi f-
ference of the trade unions.
He admitted that real wages in-
creased by only 13 percent be-
tween 1950 and 1955, blaming
this largely on the unforeseen
need to create an armaments
industry after the outbreak of
the Korean war.
Ochab announced.that the
1956-60 Five-Year Plan would
provide for a 53-57.percent
increase in industrial produc-
tion, in contrast to an announce-
ment made earlier this year
calling for a 70-percent
increase. In spite of his
emphasis. on the need to im-
prove the standard of living,
Ochab acknowledged that real
.wages, would increase by only 30
percent during, the next five
years and that even after such
an increase, the standard of
living would still be relatively
low. He announced that the
acute housing.shortage another
cause of widespread complaints--
will not be significantly im-?
proved.
Along with the increased
emphasis'it is placing on
improving economic conditions,
the government. apparently
vlans to improve the adminis-
trative structure. Four pairs
of economic ministries have
been merged. during the past
few weeks, and a new chairman
has been appointed to the much-
criticized State Economic Plan-
ning Commission. In. his speech
Ochab stressed the need for
administrative decentralization
so that local problems could be
solved quickly on, the local level.
Freedom of
Criticism
On the'question of freedom
of criticism, Ochab took a more
orthodox position than Premier
Cyrankiewiez and the party
moderates. Whereas Cyrankiewicz
recently stated that such
criticism is healthy and still
insufficient, Ochab warned that
much` of it had gone too far.
While condemning bureaucrats
for their drive to suppress
"sound" criticism, he said that
!'criticism from the position
of the enemy" would not be al-
lowed. He complained that the
party press, including Trybuna
Ludu--organ of the central com-
mittee whose editor was recently
dismissed--had failed to present
the achievements as well as the
failures of the past year, and
he warned against future out-
bursts against the party.
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26 July 1956
Although the scheduled
reforms do not go as far as
the moderate Communists would
like, they probably will enable
the two groups in the party to
work together in at least
NEW ICELANDIC GOVERNMENT
The six-man coalition cabi-
net which assumed office in
.Iceland on.24 July includes
two representatives of the
Communist-dominated Labor
Alliance. Iceland's adherence
to NATO is not immediately
threatened, but the new govern-
ment will undoubtedly press for
revisions in the status of the
American-manned Keflavik air
base along the lines of the
parliamentary resolution of 28
March calling for the withdrawal
of American troops. The Com-
munists' participation in the
government may enable them to
exercise a greater influence
over the nation's economy with
a view to building a,strong
political machine.
Composition
The Progressives, the
Social Democrats and the Labor
Alliance, which consists of
dissident left-win; Socialists
and Communists, each received
two posts in the new government
which is headed by the oppor-
tunistic Progressive Party
chairman Herman Jonasson.
Despite the opposition of the
Labor Alliance, Gudmundur I.
Gudmundsson, vice chairman of
the Social Democratic Party,
obtained the post of foreign
minister, this having been the
Social Democrats' condition for
participating in the government.
The new incumbent is a strong
pro-Western, right-wing Social
Democrat.
ostensible harmony for the time
being. It is unlikely, however,
that they will be sufficient to
win the genuine co-operation of
the public.
Ludvik Josefesson, a Com-
munist, obtained the Ministries
of Commerce and Fisheries. The
Labor Alliance also secured the
Ministry of Social Affairs,
shorn, however, of the tempting
Unemployment Compensation
Fund, which it had hoped to
use to strengthen its position
with labor. Through these posts
Communists hope to promote
socialization and nationaliza-
tion schemes.
Base Question
The Labor Alliance presum-
ably accepted the Social Demo-
cratic condition for participa-
tion in the government that the
new government issue a declara-
tion of Iceland's continued
adherence to NATO. Gudmundsson,
who arrived in Oslo on 22 July
for "private talks," has reported-
ly assured Norwegian leaders
that Iceland does not intend
to leave NATO, but he also reit-
erated Iceland's decision to
bring about a withdrawal of
American troops. Gudmundsson
is said to believe that American
planes, equipment and specialists
should remain, but not "uniforms."
In a radio broadcast on
24 July, Prime Minister Jonasson
stated that his government's
aim was to adhere to NATO but
that the treaty of 1951 between
Iceland and the United States
should be revised immediately
so Icelanders themselves could
maintain and guard the Keflavik
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26 July 1956
air base, allowing United States
troops to leave the country.
Otherwise, Iceland would leave
NATO. However, no precipitous
action is anticipated. The
Progressives' demagogic appeal
suffered .a severe repudiation
at the polls as shown by the
Conservatives' tremendous gain
in popular vote. Moreover,
Foreign Minister Gudmundsson
appears determined to-keep
matters under control.
The Communists undoubtedly
will seek to expand Iceland's
already large trade with the
Soviet bloc in order to end the
nation's dependence on the
foreign exchange earnings
of the Keflavik base. This
would eliminate a major eco-
nomic motive for supporting
the Keflavik activities. The
Czech minister of trade, ac-
companied by an entourage of
economic experts, arrived in
Iceland on 24 July for a week's
stay to study the fishing and
i fish-processing industries.
25X1
PROSPECTS IN PERU
UNDER THE PRADO GOVERNMENT
Manuel Prado, who is to be
inaugurated as president of
Peru on 28 July, is likely to
continue the policies of his
predecessor. which have made
Peru one of, the more attractive
areas in Latin America for
foreign-investment. However,
Prado's political commitments
to the non-Communist, leftist
APRA, which supported him in
the election, may lead to a
conflict between his conserva-
tive administration and the
mass-supported APRA in the
legislature. This might create
conditions which would reduce
Peru's attractiveness as a
foreign investment area.
Political Situation
Prado and most prospective
members of his cabinet come
from a conservative background
and belong to the white elite
which has maintained the tradi-
tional social and political
structure more successfully
than anywhere else in Latin
America. Prado's negotiations
philosophy, but were merely an
effort to swing the organized
APRA vote away from the govern-
ment candidate.
The large APRA vote, which
was apparently delivered to
Prado in the belief that his
election offered the best chance
of legalizing the party, re-
sulted not only in his unexpect-
ed victory, but also in a new
congress of heterogeneous
with leaders of the outlawed elements.
APRA just before the elections I
reflected no basic change in I APRA is unlike other
his conservative political ~ Peruvian political groups in
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26 July 1956
PERUVIAN CONGRESS
( ACCORDING TO PRESS REPORTS)
economic and political stability
which has contributed heavily
to the favorable climate for
foreign investment in Peru.
Prado?s ability to cope with
this situation is doubtful. He
ruled as a dictator during most
of his 1939-45 presidential term
and gained no experience in deal-
ing with a freely elected con-
gress. His proposed inclusion
of several,Communist-linked fig-
ures in his administration sug-
gests that he may try the con-
servatives' old tactic of using
the relatively weak Communists
as a counterweight to APRA.
185 SEATS
CHAMBER OF DEPUTIES
BELAUNDE(Supported by dissident APRA elements)
INDEPENDENT ( Reportedly APRA )
DEMOCRATIC CHRISTIAN
NATIONAL UNION
El PRADO
that it is a modern political
party with mass appeal. It is
typical of several Latin Ameri-
can political parties in being.
Marxist-influenced and prolabor,
although non-Communist and not
avowedly a labor party..
It apparently plans modera-
tion in pressing most of its de-
mands on the new administration
and will ..devote its main strength
to securing legalization. Popu-'
lar support for such legalization
is countered by bitter conserva-
tive' and military opposition.
Legalization of APRA would
almost inevitably be a prelude
to extensive social and economic
change, while failure to legal-
ize the party would probably
be conducive to serious popular
unrest. The problem thus posed
seems likely to threaten the
Economic Boom
For the past several years,
Peru has been experiencing boom
conditions. As the fourth larg-
est Latin American country, with
a diversity of natural resources
exceeded only by Brazil and Mexi-
co, Peru has attracted consider-
able foreign capital and has
displayed an unusually friendly
i attitude toward it.
The most important of
current projects is"the exploi-
tationof an estimated one bil-
lion tons of over 1 percent
copper ore in southern Peru at
a cost of $200,000,000. A new
American-owned company has begun
development at Toquepala, and in
four years it expects to export
140,000 tons of copper yearly,
slightly over a third of current
production in Chile.
The pressures of economic
growth have been reflected in
significant wage increases
for mining and agricultural
workers. Urban labor, which
was permitted no increase in
real wages during the 1951-55
period, gained substantially
through successful strikes in
the pre-election freedom of
the first half of 1956. A
continuation of sharp wage rises,
perhaps through the efforts of
the APRA-controlled National 25X1
Confederation of Labor, would
threaten inflation.
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26 July 1956
Algeria
The Algerian rebels, pos-
sibly supported by Moroccan
guerrillas, have revealed their
possession of more and better
automatic weapons in a series
of clashes with French forces
in western Oran since 19 July.
In these actions, the rebels
reportedly showed greater
strength than at any time since
late May.
Tunisia
Tunisian withdrawal from
negotiations with France on 13
July, when an impasse was reached
on the critical defense issue,
illustrates the extreme sensi-
tivity of the Bourghiba govern-
ment on the subject of Tunisia's
sovereignty. The Tunisian nego-
tiators walked out when they
could not secure France's recog-
nition in principle that French
troops would ultimately evacuate
Tunisia, including the strategic
French base at Bizerte. France
is unwilling to make such a
commitment in view of the prob-
ability that the Tunisians are
supporting the Algerian rebels.
French officials in Paris
look on the suspension as a
"minor family row," expecting
that the serious economic and
financial situation in Tunisia
will force the Tunisians to seek
to reopen negotiations. The
Tunisian government, however,
strongly supported by the Con-
stituent Assembly, is not likely
soon to take such an initiative.
Faced with the widespread
appeal of Salah ben Youssef's
extremism, Premier Bourghiba
cannot afford to yield to the
French. The premier may attempt
to break France's economic
stranglehold over Tunisia by
seeking economic aid elsewhere.
French sponsorship of Tunisia's
application for membership in
the United Nations, which Paris 25X1
hopes will mollify the Tunisians,
is not likely to do so.
25X1
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26 July 1956
THE FRENCH COMMUNIST PARTY'S
24TH CONGRESS
The 14th Congress of the
French Communist Party held at
Le Havre on 18-21 July has
.confirmed Secretary General
Maurice Thorez' control of the
party. Emphasis'was laid on
unity of action with the So-
cialists, foreshadowing a
heightened campaign for Com-
munist-Socialist co-operation.
Party organization problems
received only perfunctory at-
tention,
Socialist rank-and-file co-
operation against the recall
of reservists for Algeria.
Such a campaign can be expected
to concentrate on the govern-
The congress was geared
to give incontrovertible evi-
dence of party solidarity de-
spite the effects of Moscow's
de-Stalinization campaign.
Maurice Thorez' re-election as
secretary general and the So-
viet delegate's.reference to
him as a "dear friend" empha-
size his continuing leadership.
Thorez paid lip service to the
value of criticism of the cult
of personality, but he stressed
that such criticism could not
be "transferred mechanically"
to the French Communist Party.
The.de-Stalinization drive
within the French party thus
.seems to be successfully checked,
and Thorez' strong attack on
the haphazard discussion of any
subject appears to signal a
.mafflin, of all intraparty crit-
icism.,
Unity of action with the
Socialists was given special
emphasis at the congress; and
the chief of the visiting Soviet
delegation stated 'in his "direc-
tive"' the great importance at-
tached-to such collaboration.
The most immediate result of
this policy is likely to be a
stepped-up effort to secure
ment's reported plans to import
foreign labor to meet the short-
age stemming from the manpower
needs of the present military
effort. Labor grievances are-
on the rise generally, and
mounting living costs are arous-
ing increasing unrest which
the Communists can readily ex-
ploit.
Jacques Duclos' speech on
21 July further underlined the
need for united action, even
at the risk of not being ideo-
logically consistent. Speak-
ing on the role of "municipali-
ties for the workinf: masses,"
he stressed that all local Communist
officials were subordinate to
local party organizations.
The 14th Congress devoted
relatively little. time to in-
ternal party organization as
compared.to the congress in
1954. Thorez played up the
party's strength and undertook
to refute arguments of those
who think that the Communist
Party can disappear. He claimed
that nearly 50,000 new members
have joined since January, but
added that some recruitment
weaknesses exist, particularly
among metal and mine workers.
He also emphasized the weakness
of the Communist youth organi-
zation, and baited an appeal
to intellectuals to join the
party by reiterating the "dif-
ferent roads to Socialism"
thesis.
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26 July 1956
TRAVELS OF SOVIET LEADERS
The last two weeks have
seen the greatest exodus of
top Soviet leaders from N.oscow
since collective leadership was
established after Stalin's death.
As of 22 July, 12 of the 20 mem-
bers of the presidium and secre-
tariat, including the most prom-
inent ones, were either on of-
ficial trips in various parts
of the world or vacationing.
This left only five of 11 full
members of the,presidium in
Moscow. Such a dispersal sug-
gests the existence of a high
degree of mutual trust among
the members of the collective.
Some of the top leaders
left Moscow early in July even
though the Supreme Soviet was
scheduled to meet on the 11th.
Presidium members Mikoyan,
Kaganovich and Saburov were
reported by Soviet officials
to have left on vacation around
2 July. Kaganovich returned
to Moscow in time for the Su-
preme Soviet session. Saburov
is still on vacation, as appar-
ently are Shvernik and Aristov.
Mikoyan, however, apparently
went to Budapest sometime around
18 July. His presence in Hun-
gary at the time of the party
plenum at which Rakosi "re-
signed" was not officially re-
ported until Mikoyan left for
Yugoslavia on 21 July. After
a brief conference with Tito
on the island of Brioni, Mikoy-
an stopped off in Sofia on 23
July en route to Moscow.
Presidium candidate Furtseva
left for London on 12 July as
head of a parliamentary dele-
gation, and Suslov and Kirichen-
ko, both full members of the
presidium, arrived in Paris
on 16 July to take part in the
French Communist Party congress.
On 19 July Khrushchev,
immediately after seeing off
the last of a long series of
visiting Communist delegations,
flew east to Sverdlovsk to at-
tend an agricultural conference
and what may turn out to be
the first of a series of mass
rallies of agricultural workers
in the new lands areas. On the
last day of the conference,
Khrushchev addressed a crowd
of 200,000 and then, accompanied
by?party secretary Belyayev,
KHRUSHCHLV _ Sverdlovsk, Novosibirsk
BELYAYEV
SUSLOV -Paris
KIRICF!ENK0
FURTSEVA -London
SABUROV
SHVERNIK -On vacation
ARISTOV
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
visited various collective
farms and went on to Novosi-
birsk to attend a similar con-
ferencea
Bulganin and Zhukov left
Moscow on 21 July for Warsaw
to represent the Soviet Union
at the celebrations of the
"12th anniversary of the libera-
tion of Poland," After touring
several provincial towns, they
are expected back in Moscow
about 27 July.
For a brief period, re-
sponsibility for government
and party affairs was left in
the hands of Malenkov, Moro-
shilov, Kaganovich, Pervukhin,
Molotov, Shepilov, and party
secretaries Brezhnev and Pos e-
lev.
25X1
EUROPEAN AND ASIAN SATELLITES
ANNOUNCE ARMED FORCE REDUCTIONS
Czechoslovakia's announce-
nient of 23 July that it would
make additional cuts in its
armed forces brings to seven
the number of Sino-Soviet Satel-
lites that have followed the
Soviet "example" of 14 May..
Rumania, Hungary, ,and Poland,
which, like Czechoslovakia,fol-
lowed the-Soviet pattern of
'announcing reductions in the
fall of 1955, have indicated
they will make further cuts.
East Germany, North Korea, and
North Vietnam have announced
.reductions for the first time.
No ,.indications
have been received
concerning the inten-
tions of Bulgaria and
Albania, although
they also may be ex-
pected to toe the
line. In May, Czech
.premier Siroky had
stated in an inter-.
view that the Czech
forces were already
at the "peace level,"
and that further re-
ductions would be
undertaken only if
the West took the ini-
tiatives
In most instances,
the proposed cuts are
reductions, which would have
little effect on military ca-
pabilities but which might be
of considerable propaganda
value.
While most of these an-
nouncements were designed to.
have an impact on world opin-
ion, the East German announce-
ment was timed specifically
to embarrass the West German
government, then in the.. process
of enacting a conscription bill.
Besides declaring its intention
to implement a-25-percent cut,
ANNOUNCED ARMED FORCES REDUCTIONS IN SINO-SO
PRESENT
ESTIMATED
STRENGTH
REDUCTIONS
1955
REDUCTIONS
1956
USSR
4,200,000
640,000
1,200,000
ALBANIA
31,000
9,000
BULGARIA
189,600
18,000
CZECHOSLOVAKIA
192,000
34,000
10,000
EAST GERMANY
1 18 ,000
30,000
HUNGARY
161,500
20,000
15,000
POLAND
292,700
47,000
RUMANIA
236,200
40,000
NORTH KOREA
365,500
80,000
NORTH VIETNAM
298,000
80,000
* Has announced intention to reduce,
but figure not yet made public.
little more than token 26 JULY 1956
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CURRENT INTELLIG ,LANCE AYE KLY SUMMARY
26 July 105G
and to fix the strength of its
armed forces at the resultant
90,000 men, East Germany indi-
cated that it would maintain
its forces on a voluntary basis.
Tha,s decision was probably,
influenced by the critical
manpower shortage in East Germany
and by public opposition to the
introduction of conscription,
which could, however; be intro-
duced at a later date to meet
the "threat" of West German
rearmament.
25X1
JAPANESE INCREASE AWARENESS
OF INTERNAL SECURITY THREAT
Japan's vulnerability to
subversion stems more from the
.inadequacy of the government's
security system than from the
capabilities of the Japan Com-
munist Party (JCP). The prob-;
ability of renewed diplomatic
relations with the USSR has
made conservative leaders in-
creasingly conscious of the
security problem. The govern-
ment probably will move slowly,
and cautiously to improve the
situation.
Japan has no anti,,-espionage
legislation and no laws safe--
guarding military information
other than that applying to
materiel received under the
Mutual Defense Assistance Agree-
ment with the United States,
Regulations on handling Jap-
anese government classified
information provide extremely
light penalities. A lack of
physical security facilities?
and lax security discipline
contribute to this unsatisfac-
tory situation..
Position of Communist Party
The JCP has limited sup-
port among the people and
possesses little direct politi-
cal influence on national policy.
Its status as a legal party
and its policy of infiltrating
? the leadership Of non-Communist
mass organizations, however,
has allowed it to promote con-
siderable popular support for
the objectives of undermining
PART II,
the American position and pro-
moting policies contrary to '
American interests. The party,
reportedly, also has attained
some success in placing members.
in minor government positions
and to a lesser degree in the
enlisted ranks of Japan's
defense . forces.
Government and Liberal-
Democratic Party leaders-are
becoming increasingly conscious
of the security threat posed
by the JCP, particularly in
view of pending diplomatic rela-
tions with Moscow. They, how-
ever, are divided on ways to meet
the threat along the same lines
as over the.Sovi?e.t peace treaty.
Those who favor a "quick" peace
settlement fear that a strong
anti-Communist policy at home
will jeopardize the peace nego-
tiations, and the advocates of
a "go-slow" policy tend to sup-
port tighter security controls.
This division of opinion, the
fear of being charged with
reviving the prewar "thought
police," and Preoccupation with
intraparty politics has thus
far prevented any tightening of
security controls.
Counterespionage Legislation
Prior. to the 8 July upper
house elections, the chief cabinet
secretary announced that the
government intended to introduce
a counterespionage bill in the
next Diet. Socialist election
gains, in conjunction with
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Japanese public sensitivity to
any hint of prewar police activ-
ities,will increase government
reluctance to promote such a
law and may preclude its intro-
duction. Possibly the govern-
ment will seek passage of a
weak counterespionage law with
the idea of strengthening it
later.
25X1
NEW CHINESE COMMUNIST TRADE
CAMPAIGN IN JAPAN
The pattern of Sino-Jap-
anese trade since the beginning
of L)5$ suggests that Peiping
has taken a new tack in its
campaign to reduce American
influence in Tokyo. Since the
beginning of 105(1, Chinese im-
ports from Japan have increased
vihile sales to Japan have do-
clined. At the same time, Pei-
ping has apparently eased its
demands for goods subject to
trade controls in exchange for
exports to Japan.
So far this year Peiping
has bought or is negotiating
to buy about X7,000,000 worth
of nonstrategic goods from
Japan. Further orders are in
prospect as the demand increases
for construction'materials and
APR 9.6
11.3
SINO -JAPANESE TRADE
1955 - 1956
(MILLIONS OF US DOLLARS)
1956 1955
Government leaders will
probably move to tighten exist-
ing security controls through
better liaison among security
agencies, improvea co-ordination,
and the expansion of existing
agencies. Some reorganization
of Japan's security agencies
also likely.
chemical fertilizer to carry out
Peiping's expanded industrial
and agricultural programs.
Large Chinese orders for
unembargoed commodities, which
the Japanese can ship without
embarrassemna, will remove one
of Tokyo's principal objections
to trade with Corr.ranist China--
that Peiping has offered to
buy strategic materials as a
political weapon. Increased
Chinese purchases will whet the
demands of Japanese business in-
terests for closer official ties
with Communist China, which in
turn would facilitate greater
trade.
The increase in Chinese
orders also illustrates the new
"co-operative'-' ap-
proach toward Japan
advanced by Chou n_
tai in a recent news
conference. Chou told
visiting Japanese re-
porters that the most
important thing in
Sino-Japanese rela-
tions was "practical
co-operation," and
said that problems
such as resumption
of diplomatic rela-
tions could be set-
tled later.
1956 Sino-Japanese
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26 July 1956
are scheduled for next October,
and pressures from business
groups in Japan may bring about
an exchange of permanent commer-
cial representation at that
time. The Japanese government
has already indicated it would
approve establishment, of a
Chinese Communist trading office
in Japan and that it is consider-
ing a new payments agreement
with Peiping.
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SINO-SOVIET BLOC DRIVE
IN INDONESIA
With Indonesian president
Sukarno scheduled to depart on
26 August for a tour of the
Soviet Union, Eastern Europe
and Communist China, the Sino-
Soviet bloc is intensifying, its
political, economic, and cul-
tural campaign in Indonesia in
order to obtain maximum advan-
tage from the visit. Prime
Minister All is scheduled to
make a similar tour-later this
year.
Commercial
A Soviet technical assist-
ance offer is now "under pro-
found study," according to an
Indonesian Foreign Ministry
spokesman, and a Soviet mission
is to arrive soon to negotiate
the first trade agreement be-
tween the two countries. The
mission may also discuss credits
and the assistance offer, al-
though Indonesian Foreign Min-
istry officials have stated
they would prefer not to final-
ize the assistance agreement
until after Sukarno's return
from his tour.
Indonesia will soon send
an industrial mission to the
USSR and Eastern Europe, and
plans to send a delegation to
Communist China for renegotia-
tion of an annual commercial
agreement.
Both Peiping and Moscow
have expressed a desire to buy
rubber--Indonesia's principal
export--and the Chinese are
also interested in increasing
their purchases of copra, an-
other product which Indonesia
is anxious to sell.
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Indonesia has signed a
credit agreement with Czecho-
slovakia, and trade and payments
agreements with three other
Eastern European Satellites are
scheduled for renegotiation.
According to one report, even
North Vietnam is angling for
a trade treaty.
Cultural exchanges have
developed rapidly, and several
Indonesian sources have stated
to the American embassy that
word is being spread that "al-
most anyone" who wishes to.
visit the USSR or China can go
whenever he desires and at no
expense to himself.
(money ap-
pears to be no bar to any aspect
of the Communist cultural
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26 July 1956
offensive. The Soviet embassy's
monthly Indonesian-language.
magazine is published at four
times the cost of its American
equivalent,
Diplomatic
On the diplomatic front,
the Czech minister arrived in
mid-July, soon after the ar-
rival of Poland's charge and
Hungary's minister. Bloc dip-
lomatic representation in In-
donesia hitherto had included
only the Soviet and Chinese
ambassadors.
All Communist nations rep-
resented in Djakarta are
reported to be enlarging their
staffs.
The Indonesians seem eager
to extract the maximum benefit
from the bloc's travel grants,
and the government--having
.placed renewed emphasis on
"balancing" its foreign policy
--is receptive to expanding
diplomatic. and commercial rela-
tions with the Communist world.
The extent of increased Indone-
sian relations With the Sino-
Soviet bloc, however, probably
depends in great degree on
President Sukarno's impressions
during his tour and the nature
of any additional offers the
Communists may make to him..
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26 July 1956
THE PLAN FOR SYRIAN-EGYPTIAN UNION AND OTHER ARAB UNION PLANS
Syria's proposal for a
union with Egypt, now under
consideration, fits into a
pattern of plans for various
combinations of Arab states
and for a union of all Arab
states which have been'ad-
vanced over a number of years.
The Syrian proposal, however,
must be viewed particularly in
the light of Syria's immediate
desire for protection against
Israel, and on the Egyptian
side, in terms of Egypt's de-
sire to exclude Iraqi influence
in Syria, Lebanon, and Jordan.
tremendous unshared oil wealth
of Kuwait.
Arab Motivation
Arab desires for unity are
primarily a reaction to the
fragmentation of the Arab world
following the breakup of the
Turkish empire after World War
I. If the Arabs could cast off
the artificial divisions which
they believe were imposed in
order to keep them weak, and
unite in one great Arab state,
they could, they believe, present
a united front to (1) the West
and (2) more important, against
Israel. The theme of unity has
had new impetus as a result of
the bitterly humiliating defeat
Israel handed the Arabs in
1948. If the Arabs had been
united, they believe, this
would never have occurred.
Unified, they could become a
force capable of determining
their own destiny.
Union, too, would right
the unequal share of the natural
resources between the Arab
states which resulted from the
division of the Middle East into
individual states. Many Arabs
feel that the oil--the only
major Arab resource--should be
shared for the benefit of all.
There is considerable criticism
of the way Saudi Arabia uses its
oil revenue monies, and of the
Variety ,of Plans
There have been a variety
of plans for Arab unity. Iraq
has long favored a union of the
Hashemite dynasties of Iraq and
Jordan and of union with Syria.
Syria seeks the reabsorption of
Lebanon, which was carved out
of Syria by the French. The
re-establishment of the his-
torical "natural" Syria, the
union of the fertile crescent
states--Iraq, Syria, Lebanon,
Jordan, and Palestine--is
another dream. There have also
long been dreams of the-union
of all the Arab states into
one great state, an idea which
brings visions of the days of
the Arab conquests from the
seventh through the eleventh
century.
Unity in Practice
Despite the multiplicity
of plans for union, none has
been established. The closest
the Arab states came was the
formation of the Arab League
in 1945. But the league as
established underscored Arab
disunity and the desires of
the Arab rulers and governments
to maintain their independence
and sovereignty rather than
achieve unity. The Israeli war
clearly indicated that Arab
rivalries take predominance over
unity of action. The league .
remains a discredited debating
society rather than any real
basis for Arab union.
Vested interests have arisen
as a result of the establishment
of individual states. Each
state, while paying lip service
to unity, jealously views another
state's attempts at a combina-
tion not as a move toward Arab
unity, but as an attempt to
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26 July 1956
establish predominance. The
opposition of Saudi Arabia to
any spread of Iraqi influence
and the present contest between
Egypt and Iraq are examples.
Egypt, probably correctly, views
Iraq's joining of the Baghdad
pact as an attempt to lure
other Arab states to Iraq and
away from Egyptian influence.
British backing of and
French opposition to union plans
also have been important factors.
Britain favors the union of the
Hashemite dynasties it estab-
lished after World War I, but
opposes plans which might
threaten their influence.
France views union of its for-
mer mandate Syria with other
LEA.
ISRAtL
Arab states as a threat to
French influence.
Syrian-Egyptian Union
The Syrian proposal for
union with Egypt'stems most
immediately from a desire to
achieve a firm tie with a mili-
tarily strong protector against
Israel. Iraq, the other pos-
sible protector, is tied in
Syrian eyes to the West and
hence cannot be entirely de-
pended on in a crisis.
Syria made its first pub-
lic bid for union with Egypt
in January 1956. Nazim al-Qudsi,
a leader of the conservative
Populist Party, proposed at a
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26 July 1956
banquet in Damascus honoring an
Egyptian delegation, that Syria
and Egypt unite politically as
a first step toward comprehen-
sive Arab unity. According to
the press, the Qudsi proposal
had advance approval from all
Syrian political parties and
parliamentary groups. Qudsi
said a parliamentary delegation
would visit Egypt to hold
preliminary discussions.
The issue came to the fore
again in June at the time of
the formation of the present
"national" government headed
by Prime Minister.Sabri al-Asali.
Disagreement over a statement
on union with Egypt was an im-
portant factor which held up
the forming of the Asali govern-
ment and almost brought it down
before it was confirmed.
Syrian-Egyptian union is
most actively being promoted by
the leftist, pro-Egyptian Arab
Socialist Resurrection Party,
which holds two ministries in
the Asali cabinet. Most con-
servatives, though they cannot
speak out against Arab unity,
are privately opposed, and con-
sented to the cabinet statement
only because its proponents
agreed to include provisions
opening the arrangement to
other states.
On 6 July, after prelim-
inary talks in Cairo, the
Syrian parliament approved a
unanimous cabinet decision to
set up a ministerial commission
--composed of the prime minis-
ter, the foreign minister and
the minister of interior--to
negotiate "federal union"'with
Egypt "provided this union shall
be open to other liberated Arab
states." Asali said that when
agreement was reached with
.Egypt, a bill would be presented
to the Syrian parliament for
approval.
The Form of Union
The Syrian parliamentary
resolution stated that the
union would be a federal union.
Egyptian president Nasr has
used the term "federation"
rather than merger. Syrian
foreign minister Bitar, quoted
in a press interview in Cairo,
indicated that the arrangement
would include cultural, economic,
military and foreign policy
union, and stated that the
plan eventually would result
in a combining of the Egyptian
and Syrian constitutions. II
union would pro-
vide for (1) joint irrigation
projects in Syria and the
settlement of Egyptians on the
reclaimed land, (2) joint cul-
tural and education projects,
(3) union of the Syrian and
Egyptian armies, (4) joint in-
tergovernmental standing com-
mittees, and (5) a common con-
stitution.
The Egyptian ambassador in
Damascus told American embassy
officials that once the Syrians
agree, Egypt will accept any
form of association the Syrians
propose.
Egyptian Reaction
Though the plan for union
as envisaged by the Syrians
would firmly place Syria in the
Egyptian camp and prevent the
extension of Iraqi influence
into Syria, Lebanon, and Jordan,
the Egyptians appear to be
somewhat cautious of the Syrian
proposal. 'Nasr said on 6 July
that he received the Syrian
parliament resolution with
"great satisfaction" and that
Syrian-Egyptian union would be
a "fundamental step toward the
formation of the Arab nation,"
but the Egyptian press has been
lukewarm on the subject.
Saleh Salim, a former RCC
member, warned in his newspaper
that no concrete steps should
be taken until it is clear that
a substantial majority in both
countries will support union
"irrespective of the opposition
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
which is bound to develop from
within and without." Ambassador
Byroade commented on 6 July
that he doubts Egypt is now
interested in pressing federa-
tion beyond the talk stage, al-
though Egypt will be compelled
to avoid a flat rebuff to
Syria's advances. Byroade added,
however, that if Iraq and Turkey
make an issue of the union pro-
posal, Egypt may be forced to
take a more positive stand.
Syrian Disenchantment
Syrian disappointment over
Egypt's reaction is indicated
in the remarks of a high offi-
cial in the Syrian Foreign
Ministry. This official told
the American embassy on 3 July
that the Syrians were then
more or less convinced that
Egypt was opposed to union now.
He said this was indicated by
the Egyptian requirement that
all Syrian parties agree and
the Egyptian proposal to set
up study committees. The offi-
cial said that there may be a
move to combine diplomatic
representation in some countries
and closer economic association,
but he considered other develop-
ments unlikely in the near future
The American ambassador in Da-
mascus commented on 7 July that
it was unlikely that Syria would
force the issue at this time.
Outside Opposition
The mere mention of Syrian-
Egyptian union has aroused con-
cern outside Syria and Egypt.
Officials in Turkey, Iraq's
partner in the Baghdad pact, told
American officials in Ankara
that the union project is ob-
viously intended to prevent
Syrian orientation toward Iraq
and the West.
Saudi concern over
e degree of Egyptian influence
in Syria. Lebanon would also be
seriously alarmed by such a union;
since this would exert pressure
on Lebanon also to join with
Egypt. Jordan too would prob-
ably find it impossible to main-
tain its independence between
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the two opposing camps.
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BRITAIN MODIFIES POLICY TOWARD SOVIET BLOC
Prime Minister Eden is
shifting the emphasis of Brit-
ain's economic, defense, and
foreign policies, apparently
to prepare for an extended peri-
od of sharply competitive peace-
ful coexistence with the USSR.
The belief in Britain that a
general war is unlikely in the
foreseeable future and the need
to deal with the nation's eco-
nomic ailments are leading Lon-
don to consider a substantial
switch in energy, money, and
manpower away from the defense
program.
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26 July 1956
In relaxing diplomatic bar-
riers and encouraging trade ex-
pansion and increased contacts
at official levels, the British
government is reflecting the pub-
lic's hope that the Soviet bloc
may be so opened to Western in-
fluences by these policies as
to bring about eventually.a
basic modification of the Soviet
system. At the same time,Brit-
ain maintains its guard against
Soviet influence in such vital
areas as the Near East and
Southeast Asia.
Public Optimism
If not actually leading
opinion, Prime Minister Eden
has at least kept pace with the
public's belief that'the danger
of war has decreased ever since
the Geneva "summit" conference.
"We seem to be moving from a
cold war to a tepid peace," typi-
fies the trend of his public
utterances.
The more cautious view of
most British officials appears
not to affect the outlook of
Eden, whose personal direction
of foreign policy probably ex-
ceeds that of Churchill during
his later years as prime minis-
ter. Eden's tendency to adjust
policies has not been restrained
by official estimates to the
effect that Soviet forc
i
es
n
Germany as of late June were
more powerful than at any time
since 19466, despite the recent
withdrawals. Similarly, the
dangers the Foreign Office sees
in the greater appeal of the
"softer" Communist line since
the 20th party congress are
not publicly stressed by Eden.
In recent months, public
pressure for policy changes has
been increasing. Above all, _ the
spectacle of Malenkov, Khrushchev
and Bulganin soliciting popular
favor in Britain this spring
strikingly emphasized to the
British public the metamorphosis
in the Soviet approach. Popular
impatience with Western policy
is indicated by the favorable
reaction to the USSR's announce-
ment on 15'May of its intention
to reduce its armed forces by
1,200,000. A USIA poll taken
immediately thereafter revealed
that, in a complete reversal of
previous sentiment, Britons cited
the USSR twice as often as the
US as the country making the
more serious effort toward
general disarmament.
The prime minister's state-
ments also return to plague him
in opposition attacks. In the
House of Commons, the day-to-day
emphasis of Labor speeches,
questions, and motions is that
the change in the international
climate requires the government
to revise its policies on a wide
range of topics, from Chinese
UN membership to nuclear test
explosions.
Economic Problems
Britain's continuing eco-
nomic difficulties also argue
for policy,chan,ges, particularly
at. a time when the Soviet bloc
is conducting a sharp trade of-
fensive. Industrial and some
financial observers speak in
"crisis" terms, and Eden, speak-
ing in late June, said the loss
of export markets would do to
Britain "what the U-boats twice
failed to do."
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26 July 1956
The recent modest improve-
ment in Britain's balance of
payments has not significantly
lessened the threat posed by
domestic inflation. The result-
ing slow but steady rise in
British export:-prices has in-
creased the difficulty of com-
peting abroad. In addition,
in the engineering industries,
which are assuming increasing
importance. in Britain's foreign
trade, the shortage of labor
is particularly acutetland it is
with these key facilities that
military production competes
most directly.
Pressure for Defense Cuts
Pressure for changes in
British policy to meet the twin
conditions of the decreased
danger of war and the economic
crisis at home has been directed
principally at reducing the de-
fense burden in order to con-
centrate on improving the coun-
try's competitive position.
By mid-July, public demands
for sweeping defense cuts reached
a crescendo. On 18 July, the
Parliamentary Labor Party urged
a "substantial" reduction in the
defense budget and an end to
conscription by the end of 1958.
A few days earlier, the Liberal
Party leader, Clement Davies,
had advocated a slash of one third
in defense spending.
The government is evidently
considering a fairly drastic
across-the-board defense cut--
far beyond the three-percent
reduction in current spending
announced in late June, which
left the size and shape of forces
intact. Press. reports-, apparent-
ly officially inspired, state
that a reduction of about one
fourth in the defense budget is
planned. The government has
denied this.
Although these reports are
probably exaggerated, they do
suggest the magnitude of the
current reappraisal. The Ameri-
can embassy in London believes
'that Britain will move "as fast
PART I I I
and as far as possible" to re-
duce its forces within the lim-
its necessary to cover its over-
seas responsibilities.
Highest among these respon-
sibilities is London's pledge
to retain its four ground and
one tactical air divisions on
the European continent. Brit-
ain can obtain release from
this commitment only by major-
ity agreement of the Council of
the Western European Union;(the
Benelux countries, France, Ger-
many, Great Britain, and Italy),
except in a dire overseas or
economic emergency. The trend
of the public defense debate
indicates that Britain will
claim that improved weapons
will prevent any. planned re-
ductions from actually lowering
the: effective strength of Brit-
ish forces in Germany. British
officials have stated that,
in any case, they will not reduce
forces without consultation
with their allies.
Some clearer indication
of the government's plans may
come out in the defense debate
scheduled for the week of 30
July.
Diplomatic Efforts
The trend of British diplo-
macy since the Bulganin-Khru-
shchev visit-has suggested an
increasing effort to encourage
the new.approach in Soviet
policy. Notably, Britain at-
tempted in May to gain Soviet
co-operation on a UN Security
Council resolution on the Pales-
tine dispute. The original
draft of Eden's reply to Bul-
ganin's disarmament letter
credited the Soviet Union with
contributing to a better inter-
national atmosphere by its.
announcement of troop reductions,
but this statement was withdrawn
because of objections raised
in the North Atlantic Council.
There have also been sev-
eral efforts to promote per-
sonal Anglo-Soviet contacts.
Air Secretary Nigel Birch,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
when in Moscow in June, invited
a group of Soviet air special-
ists for the first time to ob-
serve the annual British air
show in September. Eden al-
ready has announced the specif-
ic date for his own visit to
the USSR ten months in advance.
He plans to depart for Moscow:.
on 5 May 1957.
Attitude Toward Soviet Activities
The shift to "competitive
coexistence" has aroused hopes
for new trade in Britain. A
few traders foresee the open-
ing of vast new markets in
Eastern Europe once restrictions
are removed, even though that
area has never accounted for
more than five percent of Brit-
ain's exports. The possibili-
ties of an eightfold increase
in exports to the USSR were
dramatized by Khrushchev's of-
fer in April to buy 2.8 billion
dollars worth of British goods
over a five-year period. Govern-
ment spokesmen have emphasized
that two thirds. of the; list of
proposed goods is not subject
to trade controls.
In the competition for over-
seas markets, many people are
wary of a contest with a totali-
tarian power that can manipu-
late its commercial dealings
for political ends, but some
observers believe that Britain's
SOVIET TRANSPORTATION IN
Soviet goals for transpor-
tation in the Sixth Five-Year
Plan (1956-1960) are designed
to keep transportation facili-
ties abreast of the. country's
fast economic development.
They include increasing rail-
way freight traffic by 42 per-
cent, doubling highway and mari-
time transport, and increasing
oil pipeline traffic sixfold,
long experience and special
talents will ensure its even-
tual triumph. Reports of long
delays in the construction of
the Soviet-backed steel mill
in India, and of Soviet back-
tracking on the Aswan High Dam
offer will support that limited
self-confidence.
In the meantime, the cabi-
net is reported by the American
embassy to be deeply concerned
over the present threat of
Soviet economic, political,
.and psychological penetration,
especially in the Middle East
and South Asia. Thus,London
is emphasizing the counter-
subversive activities of the
Baghdad pact organization,
and in April allowed the Singa-
pore self-government talks to
collapse rather than lose ef-
fective control over internal
security there.
The government's contin-
uing: efforts to offer induce-
ments and rewards to friendly
states are seen in such measures
as raising the contribution to
Libya by $1,400,000 and a pos-
sible offer to provide Iran
with some naval training and
to conduct joint exercises.
In view of budget stringencies,
however, such efforts are ex-
pected to remain .mea r
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THE SIXTH FIVE-YEAR PLAN
Plans for the railroads call
for laying twice as much track
as during the previous five
years, doubling the length of
electrified lines, and greatly
increasing the use of electric
and diesel-electric locomotives.
Prospects are that these goals
will be fulfilled.
Soviet planners are peren-
nially concerned with the problem
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
HT TON 1(ILOM TER
of reducing the role of trans-
port as a factor in economic
development. Attempts to re-
duce the average length of
freight and passenger haul and
the instigation of regional
self-sufficiency programs have
succeeded only in easing the
pressures tending to increase
transportation's claim on Soviet
resources. During the current
five-year plan any relative
reduction in transport':t role
is unlikely.
Railroads will continue
to carry about four fifths of
total traffic, despite plans
to increase the relative role
of all other carriers.
The Railroad Plan
Currently haul-
ing about 970 billion
ton-kilometers (ton-
nage carried times
distance) per annum,
the rail system is
scheduled to carry
42 percent more freight
in 1960 than in 1955.
The plan accordingly
provides for (1) ad-
dition of approxi-
mately 6,500 kilome-
ters of new lines,
(2) double-tracking
of about 6,600 kilome-
ters of existing lines,
(3) replacement of
65,000 kilometers
of light duty rail
with a new type ca-
pable of supporting
greater traffic den-
sity, and (4) elec-
trification of 8,100
kilometers, or 3.5
times the amount elec-
trified in the Fifth
Five-Year Plan.
Foremost among
its targets, the rail-
road dvelopment plan
calls for use of die-
sel-electric and elec-
tric motive power to
haul 40 to 50 percent
PERCENTAGE INCREASE OF THE LAST YEAR
OVER THE FIRST YEAR OF EACH PERIOD
4381
TRANSP- - ORS TAB TjpN
SECRET
SOVIET GROWTH RATES
TRANSPORT, TOTAL INDUSTRIAL OUTPUT,
AND GROSS NATIONAL PRODUCT
1940-1950
1951-1955
1956-1960 (PLANNED)
of all freight traffic by 1960,
compared to 14 percent in 1955.
To accomplish this, electric
locomotive output is scheduled
to rise 184 percent between
1955 and 1960 and diesel-electric
output to increase elevenfold..,
Steam locomotive production is
to be discontinued in 1957.
Since early 1956, the Soviet
press and radio have frequently
discussed gas turbine and nu-
clear-powered locomotives, and
mass introduction of the former
is scheduled for the end of
the Sixth Five-Year Plan. How-
ever, since the gas turbine
locomotive is only in the initial
stage of production, plans may
not be realized. No evidence
points to serious efforts to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
construct an atomic
locomotive, but it,
too, could go into
production prior to
1960.
PERCENTAGE
DISTRIBUTION OF
TRAFFIC
dift
us USSR
F R E I G H T
PERCENTAGE BASED ON TON KILOMETERS
into remote marginal
.areas, thus contin-
uing the trend toward
greater average length
of freight haul.
The plan pro-
vides also for in-
creas1 ng the average
weight of freight
trains by 25 percent
over 1955, a reduc-
tion of 17 percent
in cost of railroad
operation, and an
increase of 34 per-
cent in labor pro-
ductivity. These
goals will be facili-
tated by the sched-
uled delivery to
the railroads of at
least 255,000 high-
capacity 4-axle
freight cars and 18,-
600 modern passenger
cars. Moreover, by
1957,all cars are
to be equipped with
automatic couplings,
and by 1959, auto-
matic brakes are to
be installed on all
rolling stock. Wid-
er use is to be made
of automatic bloc
signaling' and of
automatic devices
for switching, load-
ing and unloading of
cars.
The plan empha-
sizes the necessity
of decreasing the
1955 average turn-
around time of 6.2
days by 15 percent.
This goal, however,
will prove exceed-
ingly difficult to
accomplish. Any
gains accomplished
in decreasing. turn-
around time by in-
creasing average
train speed will
probably be offset
by plans to expand
agricultural and
industrial activity
PASSENGER
PERCENTAGE BASED ON PASSENGER KILOMETERS
SECRET
As part of the
emphasis on eastward
expansion, new rail
lines are projected
for Central Asia,
Northern Kazakhstan,
the Urals, and adja-
cent areas. Of major
importance is the
line planned from the
industrial city of
Magnitogorsk westward
to Abdulino, provid-
ing a direct outlet
from the South Sibe-
rian trunkline to the
European part of
the country and by-
passing the heavily
used Chelyabinsk-Ufa
line. In addition,
the Stalinsk-Abakan
line at the other
end of the South Si-
berian is to be com-
pleted. Soviet work
on the Trans-Sinkiang
railway to China will
extend from Aktogay
on the Turkistan-
Siberian Eailzoad to
the Soviet border,
and probably as far
as Urumchi, 525 kil-
ometers beyond the
border.
North of Leningrad,
the Belomorsk-Murmansk
line is to be double-
tracked to within 100
miles of Murmansk,
and a line is being
extended from the
Kotlas-Vorkuta rail-
road to the White Sea
port of Mezen. Work
on the BAM (Baikal-
Amur-Magistral) line
north of Lake Baikal
has been resumed,
with the line possibly
completed to Kirensk
and even farther;
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
NORTH
SEA
MILES
600
-t
Existing railroad, selected
Existing electrified railroad, selected
Lines scheduled for electrification
--- Lines scheduled for completion
Highway Objectives
The Sixth Five-Year Plan
makes little provision for
highway construction. Kagano-
vich at the 20tt congress said
of the country's highway net-
work: "It is necessary to
say that we have few improved
highways; the question of the
development of a network of
highways is awaiting solution.
In the construction, repair
and maintenance of highways
great importance must be laid
on local initiative,"
The volume of highway
traffic is scheduled to be
doubled in 1960, which would
bring performance to about 85
billion ton-kilometers. Vehi-
cle production will be at an
annual rate of 650,000 units
by 1960, or about 46 percent
above the 1955 rate. The plan
also emphasizes the production
.Yeniaeysk .Kirensk
USt-Nut
and use of large-tonnage trail-
ers and more efficient vehicle
engines, both of which will be
instrumental in increasing labor
productivity to the planned
level of 36 percent over 1955.
Finally, a larger share of
highway haulage is.to be placed
under the administration of
central motor pools to eliminate
inefficiencies of transport in
the agricultural, extractive
and industrial ministries.
Inland Waterway Program
The plan envisages an in-
crease in inland waterways
freight traffic in 1960 by about
80 percent over 1955, primarily
through fleet expansion port
improvement and increased co-
ordination with other carriers.
However, co-ordination may not
prove to be a key to success be-
cause some shippers have gen-
erally refused to ship by
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
waterways,. which are slow and
closed to navigation in some
areas for as much as nine months
a year.
Physical improvements are
planned to canal and river sys-
tems. Work has been resumed
on Volga-Baltic waterway, which,
when reconstructed, will improve
the internal waterway system
in the European USSR, allowing
deeper-draft freight vessels,
submarines and medium-draft
destroyers to pass freely among
the seas bbrdering western Rus-
sia.
Additions to the river
fleet, while replacing obsolete
vessels in some cases, will ap-
preciably increase the fleet's
total capacity. Vessels with
a total of 720,000 horsepower
will be added to the self-pro-
pelled fleet. In 1955 this
ROEtoV
('Tbilisi
L/~ }~'.~, p ~+'flYi yaleyn46F
fleet had a total of 1,300,000
horsepower. Additions. to the
non-self-propelled fleet, which
had a cargo capacity of 9,656,000
tons in 1955, will increase its
total freight capacity by 2,245,-
000 tons.
Plans for port improvement,
which envisage considerable
mechanization, are designed to
overcome cargo delays and con-
commitant increases in turn-
around time of vessels, which
have been perennial problems
for river transport officials.
Merchant Ship
Bulganin told the 20th
congress that "development of
trade with the Chinese People's
Republic, the Republic of India,
the Union of Burma, and other
countries will result in a
larger volume of export and
Selected inland waterways with head of navigation
Ports scheduled for improvement-
Selected trunk oil pipelines
Selected transmission gas pipelines
Planned trunk oil pipelines-
Planned transmission gas pipelines-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
import goods being carried
in Soviet ships. There will
be a big increase in freight
carriage between our Black Sea,
Far Eastern, and other basins,
and via the Northern Sea Route."
The Sixth Five-Year Plan
goal for the maritime fleet
is to more than double the 1955
performance; The fleet is
scheduled to receive 1,140,000
tons of dry-cargo capacity and
460,000 tons of'tanker tonnage.
Since many of the fleet's'ves-
sels are over-age, inefficient
and slow,, making a retirement
program highly desirable, the
net gain in tonnage will prob-
ably be somewhat less than
35 percent.
Reconstruction and develop-
ment is projected for seaports
in all areas of operation.
The port'of Makhodka is given
a high priority, indicating its
importance in Far East opera-
tions as an auxiliary port for
nearby Vladivostok. Other ports
scheduled for improvements are
Petropavlovsk (on Kamchatka
Peninsula),,_Odessa, Zhdanov,
Nikolayevsk, Leningrad, Murmansk
and Vladivostok. Emphasis is
placed'on new piers, quays,
and warehouses,: all to be highly
mechanized.
Civil. Air Transport
The Sixth Five-Year Plan
gives very little information
on air transportation. It
provides for a 'doubling in air
freight traffic and an-increase
in the volume of passenger traf-
fic by 3.8 times the 1955
volume. It also calls for mod-
ernization and expansion of the
operations of the civil air
carrier, Aeroflot. Reconstruc-
tion of major airports is pro-
jected as is the introduction
into the fleet of fast, multi-
seat passenger, planes,
including jet and turbo-prop
planes of Soviet manufacture.
The TU-104 twin-engine jet went
into serial production this year
and flights over-certain Aero-
flot routes are under way.
Four-engine jet and turbo-prop
transports are now under develop-
ment.
Although the plan does not
provide for an increase in its
network, Aeroflot can be ex-
pected to extend its operations.
In 1955, as a result of air
agreements with Western coun-
tries, traffic on USSR inter-
national airlines increased
significantly. This expansion
will probably continue during
the Sixth Five-Year Plan period.
The greatest increase in
domestic air traffic in the
Fifth Five-Year Plan was to
distant regions of the north,
Siberia and to the Far East.
Khabarovsk airport, at the east-
ern end of the important Moscow-
Irkutsk-Khabarovsk route, was
second only to Vnukovo airport
at Moscow in the volume of civil
air traffic, and Magadan rose
to fifth place. These areas
will increase in importance
as Aeroflot augments its route
by additions from the regional
administrations and from polar
aviation..
Pipeline Development
The Sixth Five-Year Plan
proposes the construction of
14,500 kilometers of new trunk
oil pipelines, which would al-
most double the present net.
New trunk lines will further
serve to connect the Ural and
Emba regions with each other
and with the new lands area of
northern Kazakhstan and central
Asia. Other lines will extend
eastward to the area of Lake
Bykal, and in the European USSR
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 July 1956
new lines will connect the Ural-
Volga regions with the Kama
area, with Moscow, and also
several large industrialized
centers to the north and south
of Moscow.
A sixfold increase in
annual pipeline traffic is pro-
jected. Such an increase would
relieve the excessive freight-
loading presently imposed on
the railroads and cut transpor-
tation costs as well, since
transport by pipeline costs
only one third that of rail.
transport.
Use of fuel gas is rela-
tively new in the USSR, and as
of 1955 the installed gas pipe-
lines totaled only 5,260 kilo-
meters. The present plan calls
for a fivefold increase in the
output of natural gas, a two-
fold increase in manufactured
gas, and the concurrent construc-
tion of 9,000 kilometers of new
gas transmission lines. These
proposed gas lines will be
instrumental in exploiting the
newly discovered natural gas re-
serves at Shebelinka, Stavropol,
and Berezova,and the recently
expanded Dashava reserves-
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