CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000900120001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 48
• Document Creation Date: December 23, 2016
• Document Release Date: May 24, 2012
• Sequence Number: 1
• Publication Date: September 13, 1956
• Content Type: SUMMARY

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 16
OCI N0.6111/56
13 September 1956
OQCZJME T NO. /
NO CHANGE IN CLASS. C7
? DECLASSIFIED /~
CLASS. CHANGED TO: S V
NEXT RgVIEW CIAT : ~ _ ..
AUTH:,t,H i 70-
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
00,0
xt to I*
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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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
11,', .September =1956
T H E W E E K I N B R I E F
PART I
OF IMMEDIATE INTEREST
THE SUEZ SITUATION . . . . . Page
British and French Moves: Prime Minister Eden's
announcement of pans for a users' association to control
transit through the canal came amid signs that transit
may break, down within a few days. Most non-Egyptian
pilots evidently plan to stop work by 15 September.
British and French military preparations continue. The
British parliamentary debate has demonstrated the sharp
division of,British opinion.
Egypt's Position: Eden's plan for a users'
association was.promptly denounced in Cairo. Nasr?and
his advisers apparently are lining up support in the
Arab world and in South Asia for the nowinternational
conference which Nasr proposed in his statement of 10
September following the departure of the Menzies mission.
Soviet Tactics: The USSR has Continued its efforts
to discourage British and French military action against
Egypt. A Pravda article warned against the possible
spread of war beyond the Middle East. Moscow would still
like to see prolonged negotiations on the whole Suez
question and probably would favor its referral to the
United Nations.
PART II
NOTES AND COMMENTS
CYPRUS . o . a o Page 1
Britain continues determined to press its campaign
against EOKA, and Governor Harding has announced
that Cyprus is "absolutely crucial" in the Suez crisis.
,British distrust of the Karamanlis government in Greece
may have abated, but not to the extent where London is
willing to approach Athens on the question of a Cyprus
settlement. London appears less concerned than pre-
viously ove the nassibilit UN consideration of
25X1 the issue.
CONFIDENTIAL
It] -
THE WEEK IN BRIEF
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
NORTH. AFRICA . . . . . . . . . . . . . . . . . . . . . . . Page 1
Algerian rebel leaders have informed Paris they are
prepared to "reopen" negotiations. At the same time,
the rebels seem to have stepped up their military
activities. The expulsion of 60 members of Presence
Francaise, the die-hard settler organization in Morocco,
seems likely to complicate the financial, economic and
defense negotiations now under way in Paris.
ARAB-ISRAELI SITUATION . . . . . . . . . . . . . . . .
Israeli actions over the past week indicate that
Israel will continue to retaliate quickly and sharply
against any Arab depredations. Israel's Arab neighbors
are negotiating more intra-Arab military pacts which,
though ostensibly aimed at increasing strength against
Israel, appear in fact to be more concerned with Arab
25X1 power politics.
PROSPECTS,FOR A SOVIET-JAPANESE SETTLEMENT . .
Page 3
. . Page 4
Both Japan and the USSR have indicated they are
willing to shelve the territorial issue when discussions
for a settlement are resumed. Thus, prospects are im-
proved that the prolonged peace negotiations will soon
be concluded. Prime Minister Hatoyama plans to go to
Moscow late this month to seek a settlement for re-
storing relations without a formal peace treaty.
Whether his mission is successful or not, it may be
followed by his retirement if the conservative leaders
can agree on his successor.
CONFIDENTIAL
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THE WEEK IN BRIEF
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
PEIPING BIDS
FOR CLOSER TIES WITH NEPAL . . . . . . . . . . . . . . . Page 6
The visit this month of Nepalese prime minister
Tanka Prasad to Peiping provides Communist China with a
new opportunity to exploit Nepal's desire for a reduction
of India's predominant role in its foreign affairs,
Although Peiping probably will make an effort not to
appear as India's competitor for Nepalese good will, the
visit is likely to strengthen New Delhi's belief that
Communist China is making inroads in its traditional
4P
sphere of influence" along the Sino-Indian border.
LAOS . . .
Page 7
There has been no progress toward a final accord
between the Laos government and the Pathet Lao. The
Pathets have not sent negotiators to Vientiane to work
out the details of a settlement. They are likely to
continue temporizing until Prime Minister Souvanna
Phouma return, -week medical checkup in
France.
7
BONN'S UNIFICATION NOTE CRITICIZED . . . . . . . . . . .
The West German opposition parties, which have long
urged the Adenauer government to approach Moscow on the
subject of German unification, have criticized the
government for its failure to advance any "really new
proposals" in its note of 7 September. They have also
attacked Adenauer for doing nothing to improve the
poor diplomatic relations with Moscow before dis-
SOVIE T-SPANISH RELATIONS . . . . .
The USSR and Spain have reached agreement on the
direct repatriation of Spanish Civil War refugees, and
reportedly a "great number" will be permitted to re-
turn to Spain. The Soviet Union is moving slowly
toward proposing formal diplomatic and commercial
relations with Spain. Franco's reported conditions
for discussing the establishment of relations are the
return of the remaining Blue Division prisoners and
of the to the USSR during the civil war.
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iii
Page
Page
THE WEEK IN BRIEF
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
EUROPEAN SOCIALISTS MEET . . . . . . . . . . . . . ... , Page 10
The present discussions of European Socialists
will culminate in the formal session of the Bureau of
the Socialist International in London on 20 September.
Unification of the Italian Socialist movement, Socialist
contacts with the Yugoslav Communists, and relations
between the Icelandic Socialists and Communists are to
be discussed.
that it can meet its high targets.
LAGGING BUILDING MATERIALS
INDUSTRY CONFRONTS KAGANOVICH . . . . . . . . . . . Page 11
The failure of the Soviet building materials in-
dustry during the first half of 1956 to achieve the
increases called for under the first phase of. the Sixth
Five-Year Plan has jeopardized the planned expansion of
capital construction. First Deputy Premier Lazar
Kaganovich was appointed head of the Ministry of Building
Materials on 3 September. to bolster the ministry so
not covered by the decree.
SOVIET UNION ISSUES
NEW MINIMUM WAGE DECREE . . . . . . . . . . . . . . . . Page 12
Seven to eight million workers of the total Soviet
labor force of almost 100,000,000 will receive sub-
stantial wage increases when the regime's new minimum
wage decree takes effect on 1 January 1957. Collective
farmers, who constitute half of the labor force, are
SOVIET BOARDING SCHOOLS
MAY BE PROTOTYPES FOR NEW SYSTEM . . . . . . . . . . . . Page 13
The boarding schools being established in the USSR
in response to Khrushchev's recommendations at the
20th party congress appear to be prototypes for a new
educational system. Although certain of the schools
may evolve toward an elite status, they are apparently
not intended to provide a preferential education for
the children of the upper classes. The existence of
juvenile delinquency arising from unsatisfactory home
conditions is probably the immediate the
establishment"; of these schools.
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13 September 1956
SOVIET SUBMARINES EXTEND
LONG-RANGE OPERATIONS
On three occasions between 30 August and 7
September, American naval forces positively identified
Soviet "W-class" submarines operating in Far Eastern
waters. From 28 August to 5 September, six submarine
contacts of varying validity were reported in the
western Atlantic, the Gulf of Mexico and European
waters. Increased use of distant international waters
as submarine patrol areas is a logical corollary to
the great expansion of Soviet long-range submarine
forces which has occurred in recent years and demon-
strates a growing capability to conduct independent
long-range submarine operations.
Page 14
LEFT WING GAINS INFLUENCE IN
JAPANESE LABOR FEDERATION a Page 16
The "action policy" adopted by the Japan General
Council of Labor Unions, the country's largest labor
federation, demonstrates again the ability of the
council's extreme left-wing minority to influence
policy. In a tumultuous display of factional strife,
the followers of pro-Communist Minoru Takano have been
able to force a policy compromise on the council's more
moderate leaders, although they failed to secure leader-
ship of the council.
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THE WEEK IN BRIEF
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13 September 1956
PATTERNS AND PERSPECTIVES
YUGOSLAVIA'S PRESENT POSITION . . . . . . . . . . . . . . Page 1
While Yugoslavia's expanded economic' relations with
the Sino-Soviet bloc pose a potential threat to its
future economic independence, it has maintained its free-
dom from outside political control. Yugoslavia has con-
tinued to move closer to the USSR, but there remain basic
ideological differences concerning the application of the
"many roads to socialism" concept. The coincidence of
Yugoslavia's views with those of the USSR on most inter-
national issues has aroused new suspicion of Tito among
PROBLEMS FACING THE ITALIAN GOVERNMENT . . . . . . . . . Page 4
The growing possibility of a split between the
Italian Socialist and Communist Parties and of a
rapprochement between the two Socialist Parties in con-
tributing to the problems faced by the Italian govern-
ment. As parliament is preparing to reconvene, the
government is confronted with the need to make decisions
on its own political complexion, its relations with the
opposition, action on long-delayed legislation, and
timing of national elections, now scheduled for 1958.
ONE YEAR OF AUSTRIAN NEUTRALITY . . . . . . . . . . .
In the~year since the occupation came to an end,
Austria has engaged in a continuing internal debate over
the obligations imposed by its neutrality law. Disputes
over the meaning of the law have encouraged a tendency
to "appease" both the West and the Soviet bloc.
Sensitive to the problem of their eastern border, the
Austrians feel they cannot afford to offend the Soviet
bloc. Thus far they seem to believe that their security
depends on wider participation n community
and the United Nations. 7
Page 7
NEW SOVIET AIRCRAFT . . . . . . . . . . . . . . . . . . Page 11
Preliminary study of 11 new Soviet aircraft observed
in connection with the Air Force Day show in Moscow on
24 June shows that these aircraft, which included the
first Soviet supersonic fighters, are of advanced design.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
PART I
OF IMMEDIATE INTEREST
THE SUEZ SITUATION
British and French Moves
Prime Minister Eden's an-
nouncement on 12 September of
plans to form a users' associa-.
tion to control traffic through
the Suez Canal came amid signs
that transit may break down
within a few days. According
to the plan, which he said had
French and American support, the
new authority would collect
tolls on its own shipping, pro-
vide its own pilots, and pay
Egypt an "appropriate""amount
for the use of Egyptian facili-
ties.
Eden cited the 1888'Con-
vention on Suez as authorizing
users to furnish their own pilots,
and noted that'Nasr had recently
reasserted Egypt's support of
that convention. Cairo immedi-
ately made clear its rejection
of the plan, however.
Fully anticipating the
failure of the Menzies talks,
Eden and Premier Mallet on 10
and 11 September concluded their
plans for immediate steps to
maintain the pressure on Nasrm
Apparently the first result was
the Suez Canal Company's advice
on 11 September to its non-
Egyptian employees in Egypt to
stop work on 14.or 15 September.
In Port Said, a spokesman for a
majority of the non-Egyptian
pilots has stated that they plan
to quit the night of the 14th.
Large numbers of the non-
Egyptian pilots will evidently
be available to the new users'
association.
Beyond not paying tolls to
Egypt, no intimation of plans
for further economic sanctions
appeared in Eden's statement.
Because of the limited tanker
supply, he specifically ruled
out boycotting the canal.
Eden left the door open
for possible use of force as a
last resorts Mollet probably
hopes that a breakdown in canal
transit resulting from the res-
igilation of the non-Egyptian
pilots will make Britain more
amenable to joint military
action. French officials' op-
inion that intervention would
be easy and effective has some
British support.
Military Preparations
Both nations have continued
their military preparations.
Britain's: Lieutenant General
Sir Hugh Stockwell has been ap-
pointed to command British-French
forces preparing for possible
operations against Egypt.
The British build-up, on
a reduced scale, has brought na-
val reinforcements, including three
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PART I OF IMMEDIATE INTEREST Pate 1 nf
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a
JSARIIINIA
T1RRH0 IAN .SEA
F-6 Novy-
1 Destroyer
Royal Air force-24 Combat jets end
9 Royal Navy combat jets t~
Royal Navy- 2 Aircraft co tiers with 62 combat jets
1 Light cruiser
10 Destroyers
I Corvette
7 Sebmorines
1 Minelayer
I Amphibious warfare cgoooron
4 Minesweeping squadrons ~,
I Destroyer start
RNll
RR.A 0 y
O
CYPRUI
British Army- 26,600 Troops
Royal Air Force- 156 Combat jets
Royal Novy-- 3 Corvettes
LEBANON
Belrud
REPORTED DISPOSITION
OF BRITISH, FRENCH,
AND
EGYPTIAN FORCES
b I00 200 300
13 SEPTEMBER 1956
24302
mine-sweeping squadrons totaling
23 vessels to Malta, and three
landing ships are en route to
the Mediterranean. Ground
troops in the Middle East area,
estimated at 49,700, were to be
augmented by the departure from
Southampton on 8 and 9 September
of two troopships carrying more
than 1,400 service and support
troops, including one heavy anti-
aircraft battalion of 600 men.
No significant air moves have
been reported in the past week.
Six troopships are still
standing by at Southampton, near
where troops of the Third In-
fantry Division are on alert.
The status of this division prob-
ably remains the best indicator
of British intentions with re-
gard to using military force.
No combat troops are known to
have embarked to date. Five
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
SECRET
cargo ships that have been
loading divisional equipment
have left Southampton and are
believed anchored in the chan-
nel ready to sail.
French ground forces
brought to Cyprus totaled an
estimated 4,300 early this
week, with an eventual build-up
to 7,000 to 10,000 by 15 Sep-
tember forecast by the French
press. About a third of the
4,300 came from France, the
remainder from two divisions
in North Africa, one of which
t'te press refers to as a "para-
chute division,"
Also, 1,200 French air
force ground personnel report-
edly are already on Cyprus, al-
though no French planes desig-
nated for the new command have
yet left their bases in France.
PART I OF IMMEDIATE INTEREST Page 2 of 5
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CURRENT INTELLIGENCE `WEEKLY SUMMARY
13 September 1956
Aircraft known to be designated
for Cyprus are mostly F84-F's,
but a fighter group of Mystere
IV-A's is among units alerted
and presumably scheduled to
move. The French Mediter-
ranean fleet has apparently re-
turned to Toulon after "ma-
neuvers,,".
At the same time the "drift
out" of British civilians, de-
pendents, and embassy personnel
from Egypt and Jordan is being
intensified under official di-
rection. Advised to be out by
15 September, over 1,300 of the
3,000 British nationals in Egypt
had left by 4 September, and
the last embassy families with
minor exceptions were to leave
Cairo and Amman by 15 September.
Gesture to UN
Britain and France's letter
on 12 September to the Cuban
president of the UN Security
Council informed him of the
continuing steps to resolve the
dispute peacefully, but asked
for no Security Council action
at this time.
Most UN members believe
some type of action is neces-
sary, although they differ on
which UN body would provide the
best.forum. Brazilian ambassa-
dor Muniz has suggested that a
special session of the General
Assembly be called for 20 Sep-
tember,,when representatives
of all members will be in New
York for the international.
atomic energy conference,
On both the question of
consulting the United Nations
and on the threatened use of
force, Eden faces a far more
sharply divided country than
does Mollet, The Labor Party
attack on the government in
the special session of Parlia-
ment stressed both points.
Eden's view of the seriousness
of the Laborite assault was
demonstrated by his decision
to call for a vote of confidence,
despite earlier indications thak.
he wished to avoid providing
such graphic evidence of the
parliamentary split on the is-
sue,
In contrast to widespread
approval in the British press of
the American position in the Suez
dispute so far, the French press,
until announcement of the users'
association plan, blamed the
United States both for setting
off the crisis and for the
I'softness" in the Western posi-
tion,
Egypt's Position
Nasr and his advisers are
still maintaining there will be
no compromise of Egypt's control
over the operations of the canal.
They apparently are lining up
support in the Arab world and
in South Asia for the new con-
ference of user nations which
Nasr proposed in his statement
on 10 September following the
departure of the Menzies
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PART I OF IMMEDIATE INTEREST Page 3 of 5
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25X1
25X1
CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
other pilots. Press reports
have referred to some 40 Chinese
Communists, about 100 Western
Europeans, and a sprinkling of
Indians and Japanese as interest-
ed in Suez jobs.
According to some observers,
the economic squeeze being ap-
plied by France and Britain is
being felt sooner than was ex-
pected by Egyptian officials,
but there is no sign that short-
ages of pharmaceuticals, machin-
ery spare parts, and other
Western products, are having
much impact on the course of
Nasr's diplomacy.. Dissatis-
factions created by wholesalers'
hoarding of consumer goods and
by the almost total disappear-
ance of foreign exchange for
even necessary business imports
are not, so far, being trans-
formed into resentment against
the Nasr regime or its Suez
policy.
In conformity with its now
established policy of avoiding
any overt act which Britain and
France could use as an excuse
for intervention, the government
has announced that canal pilots
are free to leave, if they de-
sire, in accordance with the
canal company's statement author-
izing its non-Egyptian employees
to depart. Reports from Port
Said indicate that non-Egyptians
will walk out as soon as possi-
ble, probably'beginning about
14 September; in most cases
their dependents have already
departed.
Cairo apparently intends
to keep canal traffic moving if
possible despite the departure
of the bulk of the pilots. Pre-
sumably, the Egyptian authority
expects to be able to utilize
fairly quickly the services of
Should the Egyptians find
that available pilots cannot
keep ships moving through the
canal at something close to
their present rate of about 30
to 45 per day, one observer has
suggested they may enforce their
31 August order that all ships
must pay tolls in Egypt in
Egyptian pounds, and refuse
passage to those ships which
refuse payment under these con-
ditions. This situation. might
bring the volume of traffic
down to a level that could be
handled by a much reduced pilot
corps. In view of the danger
that this situation could lead
to an incident, however, it
seems unlikely that Cairo would
adopt such a plan except as a
last resort.
Soviet activity over the
past week has been limited pri-
marily to propaganda while
Bulganin, Khrushchev and Shepi-
lov have been vacationing at
the Black Sea.
Previous sober but quali-
fied warnings by Soviet leaders
on the possible spread of war
beyond the Middle East were re-
peated in Pravda on 8 September.
The timing o die article sug-
gests growing Soviet concern
over the threat of British and
French military action.
Unconfirmed press reports
of Communist origin on 6 September
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OF IMMEDIATE INTEREST Page 4 of 5
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
25X1
25X1
According to some observers,
the economic squeeze being ap-
plied by France and Britain is
being felt sooner than was ex-
pected by Egyptian officials,
but there is no sign that short-
ages of pharmaceuticals, machin-
ery spare parts, and other
Western products., are having
much impact on the course of
Nasr's diplomacy.. Dissatis-
factions created by wholesalers'
hoarding of consumer goods and
by the almost total disappear-
ance.of foreign exchange for
even necessary business imports
are not, so far, being trans-
formed into resentment against
the Nasr regime or its Suez
policy.
In conformity with its now
established policy of avoiding
any overt act which Britain and
France could use as an excuse
for intervention, the government
has announced that canal pilots
are free to. leave, if they de-
sire, in accordance with the
canal company's statement author-
izing its non-Egyptian employees
to depart. Reports from Port
Said indicate that non-Egyptians
will walk out as soon as possi-
ble, probably'beginning about
14 September; in most cases
their dependents have already
departed.
Cairo apparently intends
to keep canal. traffic moving if
possible despite the departure
of the bulk of the pilots, Pre-
sumably, the Egyptian authority
expects to be able to utilize
fairly quickly the services of
PART I
other pilots. Press reports
have referred to some 40 Chinese
Communists, about 100 Western
Europeans, and a sprinkling of
Indians and Japanese as interest-
ed in Suez jobs.
Should the Egyptians find
that available pilots cannot
keep ships moving through the
canal at something close to
their present rate of about 30
to 45 per day, one observer has
suggested they may enforce their
31 August order that all ships
must pay tolls in Egypt in
Egyptian pounds, and refuse
passage to those ships which
refuse payment under these con-
ditions. This situation: might
bring the volume of traffic
down to a level that could be
handled by a much reduced pilot
corps. In view of the danger
that this situation could lead
to an incident, however, it
seems unlikely that Cairo would
adopt such a plan except as a
last resort.
Soviet Tactics
Soviet activity over the
past week has been limited pri-
marily to propaganda while
Bulganin, Khrushchev and Shepi-
lov have been. vacationing at
the. Black Sea.
Previous sober but quali-
fied warnings by Soviet leaders
on the possible spread of war
beyond the Middle East were re-
peated in Pravda on 8 September.
The timing o 'he article sug-
gests growing Soviet concern
over the threat of British and
French military action.
Unconfirmed press reports
of Communist origin on 6 September
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
25X1
25X1
According to some observers,
the economic squeeze being.ap-
plied by France and Britain is
being felt sooner than was ex-
pected by Egyptian officials,
but there is no sign that short-
ages of pharmaceuticals, machin-
ery spare parts, and other
Western products, are having
much impact on the course of
Nast's diplomacy. Dissatis-
factions created by wholesalers'
hoarding of consumer goods and
by the almost total disappear-
ance of foreign exchange for
even necessary business imports
are not, so far, being trans-
formed into resentment against
the Nasr regime or its Suez
policy.
In conformity with its now
established policy of avoiding
any overt act which Britain and
France could use as an excuse
for intervention, the government
has announced that canal pilots
are free to leave, if they de-
sire, in accordance with the
canal company's statement author-
izing its non-Egyptian employees
to depart. Reports from Port
Said indicate that non-Egyptians
will walk out as soon as possi-
ble, probably'beginning about
14 September; in most cases
their dependents have already
departed.
Cairo apparently intends
to keep canal traffic moving if
possible despite the departure
of the bulk of the pilots. Pre-
sumably, the Egyptian authority
expects to be able to utilize
fairly quickly the services of
PART I
other pilots. Press reports
have referred to some 40 Chinese
Communists, about 100 Western
Europeans, and a sprinkling of
Indians and Japanese as interest-
ed in Suez jobs.
Should the Egyptians find
that available pilots cannot
keep ships moving through the
canal at something close to
their present rate of about 30
to 45 per day, one observer has
suggested they may enforce their
31 August order that all ships
must pay tolls in Egypt in
Egyptian pounds, and refuse
passage to those ships which
refuse payment under these con-
ditions. This situation, might
bring the volume of traffic
down to a level that could be
handled by a much reduced pilot
corps. In view of the danger
that this situation could lead
to an incident, however, it
seems unlikely that Cairo would
adopt such a plan except as a
last resort.
Soviet Tactics
Soviet activity over the
past week has been limited pri-
marily to propaganda while
Bulganin, Khrushchev and Shepi-
lov have been vacationing at
the. Black Sea.
Previous sober but quali-
fied warnings by Soviet leaders
on the possible spread of war
beyond the Middle East were re-
peated in Pravda on 8 September.
The timing of t e article sug-
gests growing Soviet concern
over the threat of British and
French military action.
Unconfirmed press reports
of Communist origin on 6 September
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foreign exchange position may
necessitate Soviet bloc sub-
sidies in the form of gifts or
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
asserted that military leaves
in the Soviet bloc have been
canceled because of the Suez
crisis. Similar rumors may be
expel ted as a reflection of
Soviet concern and to impress
on the British and French the
possibility of direct Soviet
intervention, although there
are still no indications that
Soviet offers to Egypt have ex-
ceeded those of "volunteers"
and economic and military aid.
Since Egypt's nationali-
zation of the canal, there has
been no evidence that the USSR
has provided Egypt with arms
or goods other than those con-
tracted for in exchange for
Egyptian cotton. With Western
economic sanctions, it would
probably become incumbent on
the Soviet bloc to provide at
least essential POL supplies,
industrial equipment, food, and
necessary consumer goods such
as drugs. Egypt's deteriorating
loans.
In addition to the pilots
it is making available to Egypt
for the canal, the USSR could
provide sufficient numbers
of skilled maintenance per-
sonnel to continue uninter-
rupted operations.
Moscow presumably still
seeks prolonged negotiations
on the Suez conflict, and
probably would favor its re-
ferral to the United Nations.
In the Security Council, the
USSR could veto action inimical
to Egypt's interest; in the
General Assembly, a decision
favorable to Egypt would be
fairly well assured by the
votes of the underdeveloped
and anticolonial bloc of
nations with those of the So-
viet,bloc. The USSR, however
has not yet shown a disposi-
tion to introduce the issue
itself.
A long Izvestia article
on 7 September on the Panama
Canal argued that the Re-
public of Panama is the proper
owner of the canal and stated
that American "pretensions'"
that the canal is an American
waterway are "illegal." This
was the first reference to
other waterways since the Lon-
don conference on the R,I,F?
Canal.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
PART I I
NOTES AND COMMENTS
CYPRUS-
Britain appears deter-
mined to press its campaign
against EOKA violence to a con-
clusion before taking any new
steps toward a political set-
tlement. Governor Harding
stated on 10 September that
Cyprus is "absolutely crucial"
to Britain in the Suez crisis.
Britain's distrust of the
government of Greek prime
minister Karamanlis may have
abated somewhat, although London
is not about to initiate meas-
ures to improve relations with
Athens or move toward a Cyprus
settlement. Permanent Under
Secretary Kirkpatrick's pro-
fessed recognition that any
successor to Karamanlis would
be more intransigent on the
Cyprus issue may represent a
reversal of London's estimate
of the probable situation in
Greece were Karamanlis' govern-
ment to fall.
Lord Radcliffe plans soon
to return to Cyprus to discuss
his constitutional proposals,
but it is unlikely he will get
any more co-operation from the
Cypriots than he did on his
earlier visit. There is no
indication that the British
will agree to discuss the pro-
posals with Athens.
London appears less con-
cerned than previously over the
NORTH AFRICA
Algeria
Algerian rebel leaders in
exile have informed Paris they
possibility of UN consideration
According to a Colonial
Office official, London plans
to publish,a large new selec-
tion of captured EOKA documents
in about two weeks. This may
cause a hardening of Karamanlis'
attitude, which has recently
become more conciliatory. It
may also lead the Greeks to
step up their press expose of
British intelligence activities
in Greece.
Turkish Views
Meanwhile, Turkey may prove
less intractable on the Cyprus
problem than Ankara's public
statements would indicate. The
American embassy in Ankara feels
that progress on the Cyprus prob-
lem might now be made through
.direct contact between the creeks
and the Turks. The embassy also
believes that, as far as Turkey
is concerned, self-determina-
tion for Cyprus "might be en-
tirely feasible" in 20 years.
are prepared to "reo
tiations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
The Algerian nationalists
.may have taken this initiative
.following Marshal Juin's sup-
port of a "federal solution"
on 27 August, There are no in-
dications, however, that they
have modified their basic de-
m*.nd that France recognize
Algerian independence.
Meanwhile, the Asian-
African bloc is considering
sponsoring the Algerian issue
at the forthcoming session of
the'UN General Assembly. A
member of the bloc recently
estimated it was assured of 34
,votes and therefore needed to
pick up "only about six votes"
to gain inscription of the is-
?sue.on the assembly agenda.
Possibly in concert with
these diplomatic efforts, the
rebels have stepped up their
activities in Algeria, partic-.
ularly west of the capital
city of Algiers. Recent French
reports of pacification gains
appear somewhat exaggerated,
as reports from Algeria indi-
cate that peace is tenuous at
best, even in the sectors east
of Algiers where formal cere-
monies of allegiance to France
,have taken place. Widespread
distribution of arms for the
.self-protection of repacified
villages would seem to be an
open invitation to the rebels
to attempt to capture these
weapons or induce their newly
armed compatriots to join the
guerrilla forces.
Considerable secrecy sur-
rounded French premier Mollet's
visit with Robert Lacoste, min-
ister residing in Algeria, on
7 and 8 September. The American
consul general in Algiers be-
lieves the-sole purpose of
Mollet's visit was to put the
final touches on an anticipated
statement regarding the future
status of Algeria, and he ex-
pects the statement to be made
in October before the French
National Assembly reconvenes.
Continuing friction be-
tween French settlers and Moroc-
cans was highlighted by the
arrest and expulsion on 12
September of some 50 members of
the die-hard settler organiza-
tion, Presence Francaise.
These expulsions followed close-
ly on the heels of the arrest
on 6 September of five organi-
zation members who were charged
with distributing tracts urging
the Berbers to revolt. French
ambassador Andre Dubois has
protested the manner in which
the expulsions were carried out.
The Istigial party,.which
in August itself precipitated
a crisis by demanding a one-
party government, has termed
the activities of Presence
Francaise a plot against the
state. Presence Francaise,
which in 1954 and 1955 sponsored
French counterterrorist activi-
ties, probably has contributed
to present tensions. It may
also have been bolstering the
small Shoura party, which claims
to rival the Istigial in strength
and popular following.
The arrests seem likely to
complicate financial, economic
and defense negotiations now
under way in Paris as well as to
prolong the present unsettled
atmosphere in Morocco.
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occupied with the Suez crisis.
Hussain suggested certain
Western powers involved in the
canal dispute might be pushing
Israel to attack. Jordan army
chief Nuwar told the ambassa-
dors that widespread hostilities
might break out if additional
provocative acts continued from
Israel.
CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
Israeli actions over the
past week indicate that Israel,
while taking no steps to exploit
Egypt's preoccupation with the
Suez crisis, will continue to
retaliate quickly and sharply
against any Arab depredations.
Twice in the last few days, Is-
raeli patrols have retaliated
almost immediately, first against
the Egyptians for the dynamit-
ing of a section of the Tel
Aviv-Beersheba rail line, and
second against Jordan for an
attack on an Israeli patrol.
Israel's quiet but tougher
policy has apparently been in
force since early September,
when the Israelis resumed
close-in border patrols. Prime
Minister Ben-Gurion, according
to UN truce supervisor Burns,
has said Israel rejects all of
the UN Security Council's pro-
posals for improving the border
situation and the armistice
machinery. Israel has long
maintained that Arab commit-
ments to the armistice agree-
ments are worthless and that,
in any event, the UN is incapa-
ble of obtaining strict Arab
compliance. In the present
circumstances, the Israelis
feel they can be bolder in as-
serting this belief officially.
King Hussain of Jordan
called in the British, French,
and American ambassadors on
12 September, following the
Israeli retaliation of 11 Sep-
tember which resulted in the
death of 23 Jordanians. He
told them he thought Israel
was deliberately trying to
provoke Jordan while Egypt was
Intra-Arab Pacts
Meanwhile, Israel's Arab
neighbors continue to.negotiate
more military pacts. Though
these pacts ostensibly are
aimed at increasing Arab co-
operation and strength against
Israel, the Arabs appear in
fact to be more concerned in
these negotiations with intra-
Arab power politics. Lebanon
has consistently sought to
avoid any strong ties with an
Arab state.
Though Jordan, too, has
sought to maintain a more or
less neutral position in Arab
politics, its desire for arms
and its lack of money are lead-
ing it toward closer alignment
with Egypt, Syria, and Saudi
Arabia. Jordan is, however,
apparently still trying to
avoid a direct military alli-
ance with Egypt. The fact that
Jordan is urging Lebanon to
enter an arrangement with Syria
suggests that it hopes the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
inclusion of Lebanon in the
intra-Arab pact system would
lessen the exclusive influence
of the Egyptian-Syrian-Saudi
bloc in Jordan. One result of
PROSPECTS FOR A
SOVIET-JAPANESE SETTLEMENT
Both Japan and the USSR
have indicated they are ready
to postpone the territorial is-
sue in order to normalize re-
lations. The removal of this
obstacle opens the way to a
settlement, without a formal
peace treaty. Japanese prime
minister Hatoyama is planning
to visit Moscow at the end of
September,
The proposal Hatoyama is
to take to Moscow envisages
the shelving of the territorial
issue, a declaration terminating
the state of war, an exchange of
ambassadors, the immediate re-
turn of Japanese detainees by
the USSR, the implementation of
the Japan-USSR fisheries agree-
ments, and unconditional Soviet
support for Japan's admission
to-the UN. While the prime
minister apparently at this
point has been granted little
discretion by his party to
negotiate, Moscow's readiness
to accept indicates the pro-
longed peace negotiations may
soon be successfully resolved.
A Moscow broadcast of 11
September followed up previous
informal hints from Premier
Bulganin and Soviet fishery
mission chief Tikhvinsky that
the USSR was willing to accept
the Hatoyama proposals as a
basis for agreement. The USSR
this maneuvering appears to be
at least the promise of some
additional Arab arms assistance
to Jordan.
may balk at agreeing to the
Japanese proposal that Soviet
support for Japan's admission
to the United Nations be made
unconditional.' The USSR has
given no indication it has backed
down from its attempt to tie
Japan to Outer Mongolia in a
package admission.
While Moscow has not offi-
cially accepted the Japanese
plan, it is probable the Krem-
lin would accept an informal
restoration of relations with
Japan, since the USSR has con-
sistently stressed that its
goal is to bring about normal-
ized relations. The Soviet
leaders may feel Japan's present
proposal represents capitulation,
since it embodies a procedure
essentially the same as that
proposed by the USSR and re-
jected by Japan in January.
Japanese government leaders,
however, want a firm prior com-
mitment from the USSR, and a
letter from Hatoyama to Premier
Bulganin has been sent which
seeks official Soviet confirma-
tion that an "Adenauei?-tYPe"
solution would be acceptable.
Hatovama's Future
Success or failure at Mos-
cow may set the stage for
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
Hatoyama's retirement since he
has said he would be willing to
retire once relations with the
USSR were restored. A failure
might sufficiently discredit
his leadership to force him out
of office. Japanese business
leaders have become alarmed over
the increasing chaos among the
conservatives and have called
for the retirement of the prime
minister.
Although pressure from
business circles alone would
not be likely to force Hatoyama
out, this, added to another in-
fluences working against Hato-
yama, both within and outside
the conservative ranks, could
be enough to tip the scales.
The prime minister's retirement
alone would not solve Japan's
basic difficulty--the choice of
a new prime minister. Until that
question is resolved by the con-
servative leaders, any calm on
the political scene is likely
to be only tem orar .
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
PEIPING BIDS
FOR CLOSER TIES WITH NEPAL
The visit this month of
Nepalese prime minister Tanka
Prasad to Peiping provides
Communist China with a new
opportunity to exploit Nepal's
desire for a reduction of
India's predominant role in its
foreign affairs. Although
Peiping will probably make $n
effort not to appear as India's
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NOTES AND COMMENTS Papa= A of s,17
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
competitor for Nepalese good
will, the visit is likely to
strengthen New Delhi's belief
that'Communist China is making
inroads in its traditional
sphere of influence along the
Sino-Indian border.
Premier Chou En-lai will
probably seek to duplicate his
success with the premiers of
Cambodia and Laos and gain a
commitment to neutralism from
the Nepalese prime minister.
Chou will probably attempt to
get Prasad to sign a joint com-
munique affirming the princi-
ples of "peaceful coexistence"
and a pledge calling for closer
economic and political rela-
tions.
As Peiping's ambassador
to Nepal offered "co-operation
and assistance" to Katmandu
last February, the Chinese
can be expected to make a more
specific offer to Prasad. The
Nepalese prime minister would
probably welcome an offer of
'"unconditional" economic aid.
He told an American embassy
official last May that Nepal
would accept a Chinese Commu-
nist offer of financial aid,
provided Peiping did not in-
sist on sending Chinese tech-
nicians.
Meanwhile., Chinese Commu-
nist and Nepalese negotiators
have reached an agreement on
a new Nepal-Tibet treaty, ac-
cording to press reports. The
treaty draft, which is said to
give Nepal "highly favorable
treatment" in Tibet, has been
sent to both governments for
formal approval.
India, which has displayed
a growing sensitivity to
There has been no progress
on a final Laos-Pathet Lao
accord because the Pathet Lao
has failed to send representa-
tives to Vientiane to work out
Communist China's overtures
to Nepal, has attempted to
reassert its special role in
the formulation of the border
kingdom's foreign policy. An
Indian official recently told
the American charge` in New
Delhi that India "has been
able to explain" to Peiping's
negotiators that India ex-
pected friendly nations not to
attempt to establish diplomatic
missions in Katmandu. He said
that Communist China, which
carries on diplomatic rela-
tions with Nepal through an
ambassador stationed in New
Delhi, no longer" intends to
establish an embassy or con-
sulate general in Katmandu.
During his visit to New
Delhi this December, Premier
Chou En-lai will presumably
try to allay Nehru's appre-
hensions regarding Communist
China's intentions in Nepal.
New Delhi's reported
success in dissuading Peiping
from seeking a diplomatic
mission in Katmandu at this
time will almost certainly
antagonize the Nepalese if it
results in Peiping rejecting
Nepal's request for a consu-
late in Lhasa. That Nepal is
already chafing under contin-
ued Indian domination is in-
dicated by Prime Minister
Prasad's announcement on 21
August that he planned to seek
revision of the Indian-Nepalese
treaty of 1950. This treaty,
which Prasad feels is not com-
patible with the "five princi-
ples of coexistence" limits
the tax Nepal can put on ex-
ports to and imports from India.
the details of a settlement.
Laotian prime minister Souvanna
Phouma, meanwhile, departed on
8 September for a three-week
visit to France for medical
treatment.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
Although Souvanna had on
31 August "summoned" his half-
brother Souphannouvong to come
to Vientiane with his negotiat-
ing team, he had apparently re-
ceived no'reply prior to his
departure. According to the
British ambassador, however,
Pathet Lao representative Nouhak
met with Souvanna on 6 September
and told him Pathet leaders
were "full of good will" but
were having difficulty convinc-
ingtheir subordinates. The
latest report from Vientiane
states that the Pathet nego-
tiators are expected to show
up on 15 September.
Vice Premier Katay, who is
skeptical of Pathet "good faith"
and who when premier, took a
"hard" line with the Pathets,
will-be in charge of the gov-
ernment during Souvanha's ab-
sence. He could be expected
to stiffen the government's,
BONN'S UNIFICATION NOTE
CRITICIZED
The West German opposition
parties, which have long urged
the Adenauer government to ap-
proach Moscow on the subject of
German unification, have criti-
cized the government for its
failure to advance any "really
new proposals"" in its note of
7 September. They have also at-
tacked Adenauer for doing noth-
ing to improve the poor diplo-
matic relations with Moscow
before dispatching the note.
By its memorandum, Bonn
has not only launched its long-
promised effort to explore the
unification subject with the
USSR, but has also, in effect,
opened the Adenauer regime's
campaign for re-election in
next year's Bundestag elections,
The government is trying to
convince the West Germans that
all legitimate efforts are be-
ing made to unify the country,
will to resist damaging con-
cessions, and it therefore
seems likely that the Pathets
will avoid serious negotiations
until Souvanna returns.
The immediate icy reception
,the note received in Moscow was
not surprising in view of the
wrangle between Bonn and Moscow
on the repatriation of each
other's nationals and Moscow's
pique at the ban on the West
German Communist Party. Soviet
deputy foreign minister Gromyko
said flatly that German unifi-
cation was impossible because
of West Germany's rearmament
and suppression of civil liber-
ties, The Soviet attitude may
put a crimp in Bonn's hopes for
a protracted exchange of notes
which would keep the West Ger-
man populace satisfied until
the elections next year. The
USSR will not give the present
Bonn government any satisfaction
on the score of unification, in
order, if possible, to get rid
of the Adenauer regime next
year.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
The West German government
did not call for a new interna-
tional conference, but only for
a continued exchange of views.
As previously, the government's
key idea is still free elections
throughout Germany, although it
was praised by most German pa-
pers for its apparently "flex-
ible" attitude, notably its
willingness to consider any
European security system based
on unification. Bonn incor-
porated the idea proposed last
wear by Prime Minister Eden of
a zone between East and West,
including a unified Germany,in
which armaments would be regu-
lated.
Although this scheme was
featured by Bonn officials as
giving its note a "forward
look,'' the opposition was quick
to point out that the USSR had
rejected Eden's so-called "de-
militarized zone" plan when
it was first advanced.
The Federal Republic's
handling of the note raises
SOVIET-SPANISH RELATIONS
The USSR and Spain have
reached an agreement on the
direct repatriation of Spanish
civil war refugees and reported-
ly a "great number" will be per-
mitted to return to Spain, pos-
sibly. in September.
Unconfirmed reports have
placed the number of Spaniards
still in the Soviet Union as
high as 5,000. Most of them
were sent to the USSR from the
Loyalist areas as children for
"safekeeping" during the civil
war in Spain in 1936-39. Their
return as well-indoctrinated
"Soviet" citizens would seem
to pose a problem for anti-
Communist Spain. In addition,
there are still in the Soviet
Union about 70 prisoners of
some questions about the degree
of co-ordination with the three
Western powers which Bonn will
observe in its future dealings
with Moscow. Although Bonn
accepted various modifications
in the note proposed by the
West, it did not accept the
suggestion of deleting reference
to the demilitarized zone. It
is also noteworthy that Bonn
consulted NATO only belatedly,
whereas it has been arguing this
year that all major foreign
actions of NATO members should
be fully co-ordinated in NATO
beforehand.
The Adenauer government
has made a possible shift in
its position on the military
status of a united Germany more
difficult by informing the
Soviets that "freedom of alli-
ance" for an all-German gov-
ernment is a "cornerstone" of
its policy. The note did not
reveal any hesitation by Bonn
about rearmament, or any incli-
Germans.
the Blue Division, which fought
against the USSR in World War II.
The arrangements for the
return of the refugees have been
worked out largely through the
International Red Cross. In
April 1955 a representative of
the French Red Cross informed
the Spanish ambassador in Paris
that the Soviet Union was will-
ing to return all Spanish citi-
zens. In May 1956 Madrid de-
cided that rather than intervene
directly, it would leave the
matter to the Red Cross.
Press reports in Madrid
in July stated that 500 persons
were to be allowed to go home,
and data on those individuals
believed still in the USSR were
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
requested by Foreign Minister
Martin Artajo, A French radio
broadcast in late August said
1,300 Spanish refugees would
leave the USSR by ship on 20
September.
The Soviet Union appears,
however, to be moving slowly
toward proposing formal dip-
lomatic and commercial rela-
tions wits Spain. In 1954, the
USSR released 289 Spanish pris-
oners from the Blue Division
at the same time it repatriated
prisoners from other countries.
In September 1955, Molotov in-
dicated the Soviet Union would
not oppose Spain's application
for admission into the UN in
the 18-nation package plan.
EUROPEAN SOCIALISTS MEET
The present discussions
of European. Socialists, which
will culminate in the formal
session of the Bureau of the
Socialist International in
London. on 20 September, promise
to be among the most important
meetings of moderate leftist
leaders in the postwar period.
While these discussions are
unlikely to have a decisive
impact on the attitudes of in-
dividual parties, they will un-
doubtedly have considerable in-
fluence. The range of national
and international topics which
is to be discussed testifies
to the increasing importance
of these efforts to harmonize
Socialist views.
Two major items on the
bureau's agenda. axe the present
efforts to unify the Italian
Socialists (see Part III, p. 4)
-and the attitudes of the various
parties toward the establishment
Franco's reported condi-
tions for discussing the es-
tablishment of relations are
the return of the remaining
Blue Division prisoners and of
the gold sent to the Soviet
Union during the Spanish Civil
War--estimated to equal as much
as half a billion dollars.
There were unconfirmed reports
of preliminary discussions last
winter which reportedly broke
up over disagreement on the
amount of gold in auestinn
of contacts with the Yugoslav
Communists.
Italian Question
On the Italian item, it is
evident that bureau officials
have been playing a far more
active behind-the-scenes role
than had been previously indi-
cated. The bureau is scheduled
to hear a preliminary report
from French senator Pierre Com-
min on the results of his medi-
ation efforts and the outcome
of his conversations in early
September with the Italian
Socialist leaders, Nenni an
he bureau may have
o consider giving its "official"
PART II
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NOTES AND COMMENTS
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
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blessing to Commin's inter-
vention, the possible interim
financing of the Nenni Social-
ists, and the advisability and
timing of a possible admission
of a unified Italian Socialist
movement--presumably led by
Nenni--into the International.
Yugoslav Question
The question of contacts
with the Yugoslav Communists
was reportedly the subject of a
"spirited discussion" at the
meeting of the bureau last June.
was decided that the bureau's
secretary should "collect in-
formation" on the views of the
affiliated parties toward Yugo-
slavia for discussion in Sep-
tember, prior to a vote in the
council next December,
In the absence of agreement, it
ponents of such contacts had
the advantage--a view shared
by the American embassy in Lon-
don, which reported then that
Socialist leaders had shown
"rapid disenchantment" with
Tito because of his recent "Com-
munist" behavior and the renewed
harassment of Milovan Djilas
during the early summer.
Other Questions
The chairman of the Nether-
lands Labor Party recently told
the American embassy in The Hague
that, following the meeting of
the bureau, there would be a
special meeting of Socialist
Party chairmen, at which time an
attempt would be made to pressure
the Icelandic Social Democrats to
end their participation in the
government coalition, which in-
cludes the Communists. The Dutch,
whose government has been partic-
ularly concerned over recent
Icelandic developments, are evi-
dently taking the lead in this
LAGGING BUILDING MATERIALS
INDUSTRY CONFRONTS KAGANOVICH
The failure of the Soviet
building materials industry
during the first half of 1956
to achieve the increases called
for under the first phase of the
Sixth Five-Year Plan has jeop-
ardized 'the planned expansion
of capital construction. Capital
investment reached only 86 per-
cent of the plan from January
through June.
First Deputy Premier Lazar
Kaganovich may have been ap-
pointed head of the Ministry of
Building Materials Industry on
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
3 September to bolster the minis-
try so that it can meet its high
targets under the Sixth Five-
Year Plan. He had previously
held this post briefly in the
immediate postwar period, when
reconstruction of the country
was in full swing.
Soviet cement output of
11,600,000 tons in the first
half of 1956 was 7 percent
greater than in the corresponding
period last year, but fell short
of the estimated goal by 1,200,-
000 tons; brick production of 9
billion units was an estimated
700,000,000 units short; and
precast concrete production of
3,500,000 cubic meters was an
estimated 400,000 cubic meters
short.
These failures have been
attributed by the Soviet press
mainly to poor organizational
and technical leadership and
SOVIET UNION ISSUES
NEW MINIMUM WAGE DECREE
A joint decree issued by
the Soviet government and the
Communist Party central committee
on 8 September raised basic min-
imum wages for urban workers to
300 rubies per month and wages
for workers other than collec-
tive farmers living in rural
areas to 270 rubles. Higher
minimums, up to 350 rubles per
month, are to be provided for
production workers in industry,.
construction, transportation and
communications. A companion de-
cree raised the minimum monthly
income on which income taxes can
be levied from 260 rubles to 370
rubles.. All these provisions
are to become effective on 1
January.
Some 7,000,000 to 8,000,000
workers from the total Soviet
labor force of about 100,000,000
failure to complete new plants.
The poor leadership, however,
may have been partly because
the ministry did not have a
ministerial head from 10 April,
when Pavel Yudin died, until the
appointment of Kaganovich.
Although the goal for cement
output was achieved in the Fifth
Five-Year Plan, construction of
new cement plants has lagged
badly since 1955. This has re-
suited in existing plants being
overworked.
Very ambitious plans have
been set for future production,
which is to rise from 22,400,000
metric tons in 1955 to 55,000,000
in 1960--surpassing present
production in the United States.
Failure to fulfill plans for
construction materials would
hold back the development of
heavy industry, housing, and
other branches of the economy.
are apparently to receive sub-
stantial wage increases when
the new rates take effect. The
decree applies, however, only
to those persons included in the
category "workers and employees,"
which covers government workers,
wage earners in most branches of
the economy, and workers on ma-
chine tractor stations and state
farms. Collective farmers, who
account for about half of the
total Soviet labor force, are
not included.
Minimum basic wages at pres-
ent range from around 200 to
250 rubles per month, which
would not provide even subsist-
ence. For most workers, however,
bonuses for above-norm output
and overtime payments have
raised wages well above the low
basic levels. The average
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
monthly wage for workers and
employees in recent years has
been generally estimated at 600
to 700 rubles, The various
types of additional payments
are to continue unchanged under
the decree.
billion rubles annually to the
monetary income of consumers,
which was estimated at about
600 billion rubles in 1953.
The r.ecent law raising pen-
sions in the Soviet Union F_
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1
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The establishment of higher
minimum wages is an interim
step in a broad program which
was inaugurated more than a
year ago to overhaul the entire
structure of salaries and wages
in the USSR. This reappraisal
of the wage structure is the
first to be made since 1932 and
is intended to eliminate the
many inequities which have de-
veloped over the years in wages
paid for similar work in dif-
ferent branches of the economy.
In addition, the present wage
structure is said not to pro-
vide adequate incentives for
workers to increase productiv-
ity.
The decree on minimum wages,
which was foreshadowed in
Khrushchev's speech at the 20th
party congress, will add 8
will add another 13 billion
rubles each year. These meas-
ures are aimed at raising the
income of the low income seg-
ments of the population, and
constitute a marked departure
from the policy generally pur-
sued in recent years of at-
tempting to stabilize consumer
income.
These methods of increas-
ing the purchasing power of
consumers also have a some-
what different impact than the
widely publicized annual price
reductions on consumer goods,
which were employed for the
same purpose from 1947 to 1954.
The price cuts affected luxury
goods as well as necessities,
and benefited higher-income
groups as well as worker
s
the low-income brackets, 125X1
(Prepared by ORR)
SOVIET BOARDING SCHOOLS
MAY BE PROTOTYPES FOR NEW SYSTEM
The boarding schools being
established in the USSR in re-
sponse to Khrushchev's recom-
mendations at the 20th party
congress appear to be proto-
types for ,a new system of gen-
eral education. Although cer-
tain of the schools may evolve
toward an elite status, they
apparently are not intended to
provide a preferential educa-
tion for the children of'the
upper classes. A Pravda edi-
torial in June asserted that
"boarding schools in our coun-
try must become in the future
the basic form of universal
secondary, polytechnical edu-
cation of the growing genera-
tion,"
A "provisional instruc-
tion" issued by the minister
of education of the Russian
Republic states, "Children of-
unmarried mothers and of mothers
with a large number of children,
of disabled veterans and persons
disabled at work, and orphans,
as-well as children of families
which lack the necessary condi-
tions for raising them, enjoy
priority in admittance to
boarding schools." This and
other press statements lead to
the conclusion that the exist-
ence of juvenile delinquency
arising from unsatisfactory
home conditions is probably the
immediate motivation for estab-
lishment of the boarding schools.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
The overwhelming majority
of Soviet mothers must work to
help provide even a minimum
standard of living for their
families, and the fact they are
unable to pay adequate atten-
tion to raising their children
is clearly a major cause of
juvenile delinquency,
The Soviet aim in estab-
lishing the schools is broader,
however, than just to provide
relief for working mothers and
to ameliorate poor home condi-
tions. Through a broad net-
work of boarding schools, the
party-state could greatly in-
crease its influence over the
growing generation, both in
the positive sense of training
them to be obedient Communist.
citizens and in the negative
sense of counteracting the in-
fluence of "survivals of the
past," such as religion.
SOVIET SUBMARINES EXTEND
LONG-RANGE OPERATIONS
On three occasions be-
tween 30 August and 7 Septem-
ber, American naval forces
positively identified Soviet
"W-class" submarines operating
in Far Eastern waters. From
28 August to 5 September, six
submarine contacts of varying
validity were reported in the
western Atlantic, the Gulf of
Mexico and European watersa
Although positive identifica-
tion was not established in
the latter instances; some of
the submarines probably were
of Soviet origin.
Increased use of distant
international waters as sub-
marine patrol areas is a logi-
cal corollary to the great ex-
pansion of Soviet long-range
submarine forces which has
A relatively modest begin-
ning is to be made this year in
the founding of boarding schools.
A reported 166 schools will open
in the Russian Republic, 50 in
the Ukraine,*8 in Kazakhstan,
5 in Georgia, etc. Because there
were 167,500 elementary and
seven-year schools and 26,900
ten-year schools in the Soviet
Union in the 1955-56 school year,
it will take considerable time
for the boarding schools to be-
come the "basic form of univer-
sal secondary education."
Most boarding schools open-
ing this fall will accept pupils
in only the first five or seven
grades. Ultimately, a boarding
school will include not only the
first ten grades, the present
normal span of Soviet secondary
schooling, but a nursery and
kindergarten as well. Thus, it
of parental influence.
will provide cradle-to-factory
education, with only a minimum
occurred in recent years. Re-
cently evidenced Soviet disre-
gard for secrecy while opera-
ting in Pacific waters probably
is equivalent to a Soviet decla-
ration of intent to operate more
openly in this area in the future.
A Soviet "W-class" submarine
was sighted 53 miles west of St.
Matthew Island in the Bering
Sea on 30 August. Another unit
of this class was sighted on 4
September 150 miles north-north-
west of Attu. These units,
probably based at Petropavlovsk,
made no immediate effort to a-
void detection and appeared, in
fact, to invite observation.
On 7 September another 'IV-class"
submarine, number 87, was ob-
served 145 miles east-southeast
of Vladivostok in the Sea of
Japan.
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CURRENT INTELLIGENCE WEEKLY
13 September 1956
Three unidentified sub-
marine contacts were made in
American waters on 28 August:
an American naval aircraft
sighted a submarine on the
surface 265 miles southeast of
Newport, Rhode Island; an Amer-
ican naval vessel made a prob-
able submarine contact in the
Gulf of Mexico, 130 miles west
of Tampa, Florida; a Coast
Guard vessel established sonar
contact with a possible third
submarine, 30 miles north of
Bermuda. Another vessel, pos-
sibly a submarine, was con-
tacted in American waters on
4 September in an,area 100 to
500 miles north-northwest of
the Bahamas.
Denmark reported the de-
tection of two possible sub-
merged submarines in the
southern part of the Great Belt
on.31 August; one of the vessels
was on a northerly course. On
5 September, a possible
submarine was sighted in the
English Channel.
The submarine contacts re-
ported in American and European
waters are believed to have been
Soviet. The number of valid
contacts with presumably Soviet
submarines throughout the world
has risen steadily during the
past two and one-half years.
Peacetime patrols in Amer-
ican coastal waters would give
extremely valuable training to
Soviet submarine crews, which
in wartime might be assigned
mine-laying?operations.in prin-
cipal American harbor entrances,
guided-missile launchings against
coastal targets, or anticonvoy
duties. Most of the recent
sightings probably involved
training and area familiariza-
tion patrols, indicating a
growing Soviet capability to
conduct independent long-range
submarine operations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
LEFT WING GAINS INFLEUNCE IN
JAPANESE LABOR FEDERATION
The extreme left-wing
minority of the Japan General
Council of Trade Unions (Sohyo),
--Japan's most influential la-
bor organization,'with over
2,800,000 members--has, in the
council's seventh national con-
vention which ended on 27 Aug-
ust, again extensively influ-
enced its policy. Following a
bitter struggle between the
minority faction of pro-Commu-
nist Minoru Takano and the more
moderate supporters of Secretary
General Akira Iwai, an "action
policy" for 1956-57 which was
heavily amended'with-,leftist'jro-
posals was adopted. The amend-
ments follow the line of the
Communist-front World Federation
of Trade Unions.
Accompanied by cheering from
Communist-packed galleries for
visiting pro-Communist and Com-
munist guests of the convention,
the Takano faction was able to
reverse some of the more moder-
ate policies advocated by Iwai.
A clause calling for the
reconciliation of differences
with the anti-Communist Inter-
national Confederation of Free
Trade Unions was dropped; a pro-
posal to hold an Afro Asian
labor union conference in 1957
with Communist China partici-
pating was added; an earlier de-
cision not to take part in the
US-sponsored productivity move-
ment was reaffirmed; and, in a
compromise agreement, a decision
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
was reached to participate with
the Japan Communist Party in
future joint programs, although
not to support it on political
matters.
The extreme left wing, how-
ever, did not completely carry
the day. Majority faction lead-
er Iwai was re-elected secretary
general without opposition.
Yukitaka Haraguchi, president
of the All-Japan Federation of
Metal Mine Workers Union and a
stanch anti-Communist, was
elected president. The initial
left-wing motion to support the
Japan Communist Party failed to
receive the votes of more than
56 of the 208 delegates who de-
liberated on the policy draft.
The convention also decided
that Takano should resign his
headquarters post and be re-
called to his own union.
Some delegates may have
voted for various Takano-spon-
sored amendments, having taken
SECRET
at face value Communist policy
changes emphasizing peaceful
coexistence rather than violent
revolution.
The convention battle dem-
onstrated the factional con-
flict between Iwai and Takano.
Since succeeding Takano as
secretary general last year,
Iwai has tried to wean Sohyo
from its far-leftist political
orientation and to emphasize
economic betterment of the
worker. Takano and his fac-
tion wish to align the organi-
zation with the Japan Communist
Party and stress political ac-
tion.
The Takano faction made
an impressive showing at the
convention, and the outcome of
the conflict could well fore-
shadow an expansion of Commu-
nist influence in Japanese
labor,
PART I I NOTES AND COMMENTS pA ap IV, ?* ,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
YtSLAVIA'S PRESENT POSITION
While Yugoslavia's ex-
panded economic relations with
the Sino-Soviet bloc pose a po-
tential threat to its future
economic independence, it has
maintained its freedom from
outside political control.
Yugoslavia has continued to
move closer to the USSR', but
there remain basic ideological
differences concerning the prac-
tical application to be given
the "many roads to socialism"
concept. The coincidence of
Yugoslavia's views with those
of the USSR on most internation-
al issues has aroused new sus-
picion of Tito among various
Western nations.
The Yugoslavs declare that
their present position--one
they claim they will maintain--
is midway between East and West.
They consider themselves ideal
moderators between the big-
power blocs. However, their
propaganda and policy declara-
tions have been sufficiently
friendly to the USSR to arouse
serious doubts in the West.
Belgrade defends its position
by maintaining that the forces
of liberalization developing in
the Soviet world must be en-
couraged and that public state-
ments critical of these changes
would only strengthen the rem-
nants of Stalinism.
The restoration of ties
with the Soviet bloc does not
appear to have developed any
serious factionalism within the
league of Yugoslav Communists.
While some of the pre-1948, hard-
core Communists may feel more
at home in an atmosphere of
greater comradeship with an
apologetic Soviet Communist Par-
ty, the determination of the
regime to retain its independ-
ence and hold to its own-road..
to socialism appears to receive
the full support of the party
hierarchy.
Party Relations With Bloc
Yugoslav Communist Party
relations with other Communist
parties were given a flying
send-off by the joint Yugoslav-
Soviet Communist Party communi-
qug in Moscow in June. Although
there have been exchanges of
governmental and quasi-govern-
mental delegations with the USSR,
very few major. party exchanges
have since taken place in pub-
lic.
The Yugoslavs believe the
time is not ripe to form any
multiparty organization even if
it included Socialist as well
as Communist parties. They
continue to favor only bilater-
al associations with other Com-
munist parties and their affil-
iated organizations. Relations
have been renewed with the
Italian Communist Party, and a-
greement has been reached with
the French Communist Party to
hold talks this fall. Besides
those with the USSR, party con-
tacts have taken place with Po-
land, Czechoslovakia and Rumania..
Poland's party delegation at the
end of August was the first such
group from the Satellites to
visit Yugoslavia.
Despite the surface ap.
pearances of a close rapproche-
ment with the Soviet Communists,
there still remains an apparent
underlying tension between Bel-
grade and Moecow over the ques-
tion of the latter's role in
international Communism. The
argument now is about the appli-
cation of the concept of "each
country's own road to socialism."
Soviet party boss Khrushchev
publicly recognized this as true
Communist doctrine, both at the
20th party congress and in the
joint party communique` with Tito
this June, but there has been
little public emphasis on it by
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CURRENT 'INTELLIGENCE. WEEKLY SUMMARY
13 September 1956
the USSR since then. In fact,
the Soviet party pronouncements
in late June and early July em-
phasized international Commu-
nist unity rather than its di-
versity, as advocated by Yugo-
slav ideologists, One.Soviet
article even attacked the "na-
tional Communism" concept.
Belgrade's propaganda ap-
parently has maintained silence
on these pronouncements and it
seems the Yugoslavs are con-
siderably displeased, as is in-
dicated by the current propa-
ganda interchange between the
Soviet bloc and Yugoslavia con-
cerning the latter's trials of
former Yugoslav Cominformists.
A period may now follow in
which Belgrade's line will ap-
pear more balanced between East
and West. Such a shift in line
would be designed in part to
show the Kremlin that it must
still make further concessions,
including concrete actions, on
the fundamental ideological is-
sue of "many roads to socialism."
It would also be motivated by
a desire to impress the West
that Belgrade is not being
"taken in" by the USSR.
The Yugoslavs remain criti-
cal of those with a Stalinist
approach in Western Communist
parties,.such as Vidali in
Trieste and Thorez in France,
but the Satellites are the main
arena for this question of free-
dom from Moscow control. The
long-term subject of Satellite
independence probably will not,
in the near future, affect Yugo-
slavia's basic rapprochement
with the USSR, but events re-
lated to this question will
affect the pace and further
degree of Soviet-Yugoslav ac-
cord.
Governmental Relations
Belgrade still strongly
desires to enhance its politi-
cal and ideological influence
in Eastern Europe. Developments
to date within the Satellites--
a term no longer used by the
Yugoslavs--have generally been
to Belgrade's satisfaction, ex-
cept in Albania and, to a lesser
extent, Bulgaria. Tito has wel-
comed the gestures made by the
Satellites in his direction and
all indications of their in-
creasing independence of Mos-
cow.
The concept of a Balkan
Federation--the pre-1948 idea
of including Yugoslavia, Bul-
garia, Albania, and possibly
other states in a federated
grouping--still sporadically
comes to the surface, but Tito
denies any interest "at the
present time."
Whatever Tito may be doing
to influence the course of events
in the Satellites and particu-
larly to encourage their in-
dependence of Moscow, remains
obscure. There have been hints,
from Hungary at least, that he
is active. Yugoslav propaganda
treatment of Polish develop-
ments suggests an effort to in-
fluence the Polish regime to
assert greater freedom from
Moscow and to modify internal
conditions. The sudden ac-
celeration in the exchange of
parliamentary delegations be-
tween Yugoslavia and the Satel-
lites may be an indication that
Tito feels it is now opportune
to try by this means to in-
fluence Satellite developments.
Economic Arrangements
Western suspicions of Bel-
grade's avowals of nonattach-
ment to either East or West have
increased since the Yugoslav
announcement on 3 August of an
agreement for a 700,000,000-
ruble ($175,000,000) credit from
the USSR and East Germany, the
largest single Soviet bloc credit
ever granted to a nonbloc state.
This credit is to be used to
give Yugoslavia the capacity to
produce 50,000 tons of aluminum
annually by 1961; subsequent
credits from the same source, to
be. agreed on later, are to double
this capacity.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
Yugoslav officials had re-
peatedly indicated prior to the
announcement that they greatly
preferred Western European and
American assistance for the
development of their aluminum
industry and had submitted a
prospectus to the West only
three weeks before the announce-
ment of the deal with the USSR
and East Germany. They now ex-
plain that the arrangement with
the bloc would be in addition
to Western aid.
This transaction and the
explanation for it have con-
fused the whole question of
Belgrade's attitude on economic
aid from the West. The Yugo-
slavs may feel they need nothing
more from the West than a mere
"open door" for emergency use
for bargaining purposes against
the Soviet bloc.
Approximately 30 percent of
Yugoslavia's total trade is now
with the Sino-Soviet bloc, and
promises of credit from this
source total $464,000,000 as
opposed to about $120,000,000
available from the free world.
Yugoslavia appears confident
that these arrangements pose no
threat to its maneuverability,
and continues to accept Soviet
offers which it considers to
be in its interest. The actual
implementation of the agree-
ments,however, entailing, among
other things, the return of So-
viet technicians and advisers
to Yugoslavia, could well prove
a vexing problem for the regime.
Confronted with the problem
of obtaining sufficient wheat
to fulfill their needs for this
fall, the Yugoslavs turned to
the USSR after they failed to
secure surplus grain from the
West. It was announced on 10
September that the USSR has
promised 300,000 tons to tide
them over. the next two months.
If Yugoslavia obtains the rest
of its next year's wheat re-
quirements--approximately 1,000,-
000 tons--from the USSR, it will
have to orient its exports
increasingly toward the East
to pay for these grain imports.
Relations With Western Nations
The apparently satisfactory
relations Yugoslavia had de-
veloped with several West
European nations prior to Tito's
Moscow trip have since gone in-
to a decline. The decidedly
pro-Egyptian stand that Belgrade
has taken on the Suez crisis,
coupled with the more recent
aluminum deal, is causing Brit-
ain and France to undertake a
reappraisal of policy toward
Yugoslavia. Statements regard-
ing the compatibility of Soviet
and Yugoslav Communism which
Tito made during his trip to
the USSR, moreover, shook what
little confidence the Socialist
parties of Western Europe had
in the Yugoslav "experiment."
Relations with West Germany
have suffered from several re-
cent events, most notably the
aluminum deal, which is the
first government-level agree-
ment Yugoslavia has concluded
with East Germany. This trans-
action, with its implied recog-
nition of the East German govern-
ment, will make more difficult
ratification this fall by West
Germany of the $71,000,000
World War II claim settlement
Yugoslavia concluded with Bonn
last March. Ratification has
already been postponed as a .
result of Tito's joint state-
ment with the USSR last June
concerning "two sovereign
states" in Germany.
Formal Ties
The Yugoslavs have agreed
with the Greeks that, unless
the Balkan pact is put "back on
the track," bilateral co-opera-
tion between Athens and Belgrade
should be expanded. It is not
clear whether abrogation of the
pact is envisioned or simply to
increase Greek-Yugoslav ties
at the expense of the Turks,
leaving the pact in cold storage,
Belgrade still sees in the pact
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%wor SECRET
CURRENT. INTELLIGENCE WEEKLY SUMMARY
13 September 1956
a link with NATO, an organiza-.
tion unpopular in official
Yugoslav circles but regarded
as essential to counterbalance
the Warsaw pact. Publicly,
however, the Yugoslavs have
discounted the need for fur-
ther military planning under
the pact and have called for
its development in the cultural,
economic and political areas
as proof of effective "active
coexistence."
Yugoslavia has apparently
not entered into military co-
operation with the USSR or the
Satellites, and continues to
count on fulfillment of the
American military aid program
originally agreed on for the
period 1950-1955. Belgrade
still refuses, however, to
broaden its military planning
with the West--a prerequisite
for any future additional mili-
tary aid program.
Western Economic Aid
Belgrade continues to seek
long-term economic co-operation
commitments from the West. In
addition to its request for
credits amounting to $673,000,-
000 for developing its aluminum
industry, Belgrade has also
asked for a total of about
$54,000,000 to finance the
Majdanpek copper complex. The
Yugoslavs have stated that the
USSR has offered to support
this project, but maintain they
hope for Western aid instead.
This attitude probably arises
in part from their realization
of the necessity for continuing
to comply with Battle Act re-
strictions on strategic goods
exports if they hope to receive
additional American aid.
Relations With Neutralists
Yugoslavia continues to
pursue its friendship with the
"uncommitted" states, although
its increasing rapprochement
with the Soviet bloc may have
caused its prestige in those
areas to decline. The Tito-
Nasr talks in July probably
led to closer Yugoslav-Egyptian
co-operation. However, the
Nehru-Nasr-Tito talks immediate-
ly following on 3rioni--hailed
in Yugoslavia and Egypt as a
high point in co-operation
among nonbloc states--actually
appear to have accomplished
little. Nevertheless, Tito
will probably continue to try
to act as a moderator between
area this winter.
East and West and reportedly
will make another visit to
India and other states in thn
PROBLEMS FACING THE ITALIAN GOVERNMENT
The growing possibility
of a split between the Italian
Socialist and Communist Parties
and of a rapprochement between
the two Socialist parties is
contributing to the problems
faced by the Italian government.
As parliament is preparing to
make decisions on its own po-
litical complexion, its re-
lations with the opposition,
action on long-delayed legis-
lation, and timing of the na-
tional elections, now scheduled
for 1958.
reconvene, the government is Legislative Progress
confronted with the need to
The Segni government, par-
tially because of Communist
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
and Nenni Socialist support on
several controversial issues,
has made more legislative prog-
ress than any postwar govern-
ment. The constitutional court
has been set up, a tax reform
bill has put teeth into the
collection of income taxes,
foreign investment has been
encouraged by relaxing controls
on the conversion of profits,
local and national election
laws have been revised, and a
bill regulating petroleum ex-
ploration and development has
passed one house. On the other
hand, the serious unemployment
problem continues, despite the
otherwise relatively bright
picture of Italy's postwar
economic progress. Economic
growth in the south has not kept
pace with that of the north,
and the promise of speedier eco-
nomic reform continues to be
an effective campaign weapon
for the leftist parties.
For the first time since
the end of the war, the govern-
ment can relax somewhat on the
problem of the Communist Party.
The gradual decline of the
Italian Communist Party over
the past two years has been
considerably accelerated in
recent months. At the party
congress in November, Secretary
General Palmiro Togliatti faces
a real threat to his leadership
because of his comments on the
Khrushchev anti-Stalin speech
and the subsequent rebuke to
him by the CPSU's resolution
of 30 June, his continued in-
ability to influence Italian
government policy,. his loosening
grip on the voting population,
and his apparently weakened
ties with the Nenni Socialistis.
The evident alarm in the
immediate reaction of the Com-
munist leadership to the meeting
of Socialist Party leader Pietro
Nenni with Democratic Socialist
leader Giuseppe Saragat on 25
August reveals a fear of being
isolated and of losing the
leadership of the Italian left
to Nenni. Togliatti is now
particularly vulnerable to
attack from elements in his
party who all along have re-
garded the alliance with Nenni
as dangerous and unprofitable.
A power struggle within the
Communist Party could conceiv-
ably force a break from the
party by either the revolution-
ary elements under Vice Secre-
tary.Longo or by conciliatory
elements, possibly under Umberto
Terracini. If Togliatti or
his rising young lieutenant,
Giancarlo Pajetta, maintains
control, however, he may be
able to find a compromise to
placate the dissidents.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
Socialist Gains
While the apparent strain
on the Communist-Nenni-Socialist
unity-of-action pact tends to
divide and weaken the leftist
opposition and move Nenni toward
the Democratic Socialists,it
also threatens to bring about
a change in, the composition of
the present government. This
development, however, could
result eventually in a stronger
and broader-based government.
Even if the Democratic
Socialists quit the cabinet now,
Premier Segni would have to
rely on their support for a ma-
jority, in order to avoid de-
pendence on the discredited
right.
The Democratic Socialists
hold four important cabinet
posts,and certain measures
favored by them--such as the
tax and election law revisions--
were approved in the past year.
Their influence over the gov-
ernment would be strengthened
by a reunification with the
Nenni Socialists, particularly
if the reunited party were
represented in the cabinet.
The Liberals (conservatives).
would leave the cabinet if the
Nenni Socialists were to par-
ticipate.
Nenni, with three times
the number of deputies and
popular following of Saragat,
major domestic issues are sup-
ported by all groups left of
center. Nenni agreed with the
Western position on Suez and
on the Poznan riots, but his
utterances on the question of
Italy's ties to Western defense
are still equivocal.
The Christian Democrats
The Nenni-Saragat rapproche-
ment and a possible cabinet re-
organization are only two of
the problems facing the Christian
Democratic Party.
In mid-October, its con-
gress must deal with the ques-
tion of the representation of
various party elements in party
organs. Party secretary general
Amintore Fanfani has succeeded
in strengthening the party or-
ganization as a'whole but has
been under fire from some of
the older leaders because he
has failed to consult them and
has managed to place his own
men in strategic party positions.
He may have difficulty holding
all elements together if a uni-
fied Socialist Party wins greater
influence.
Additionally, a Socialist
merger might complicate the
labor picture, particularly if
a unified Socialist-oriented
labor union, including the
Communists, were to develop.
ITALIAN CHAMBER OF DEPUTIES
(1953 POPULAR VOTE IN -ER?IT )'
REPUBLICANS ?(2%-) MISCELLANEOUS AND
DEMOCRATIC (4.5x) (1.6%) LOCAL ELECTIONS
_ (NO SEATS ACQUIRED)
ably be necessary CENTER COALITION
ing. If the Social-
ist merger does e-
volve over the next
few months, the
question of Nenni's
relationship to Mos-
cow will be paramount.
A foreign policy
issue would presum-
could expect to be
the key figure in
a unified Socialist
Party even if he
brought only half
his present follow-
since most of the
to test his sincerity, J PARTICIPATING
TI GOVERNMENT
SUPPORTING
GOVERNMENT
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NEO-
MSI FASCISTS
? COMMUNISTS
SUPPORTING COMMUNISTS
OTHER OPPOSITION
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
Controversial. Legislation
There are a number of con-
troversial legislative proposals
which might cause political fire-
works. Among these, the pro-
posal to separate the govern-
ment holding company from the
manufacturers' association,
Confindustria, is opposed by
the right, and the government
will probably postpone a show-
down.
A bill regulating agrarian
contracts, which the Democratic
Socialists have urged for over
two years, has not been fully
formulated by the Council of
Ministers.. It will be held
as long as possible to avoid
clashes within the cabinet, but
a recurrence-of the 1956 farm
strikes might force some action,
thereby reducing its value to
the Communists as an election
issue.
The quarrel over a law
to regulate the exploitation
and development of oil resources
and. the role of the government-
controlled petroleum develop-
ment agency has been decided in
the lower house, and the senate
may act on it by the end of 1956.
The Vanoni Plan
A more likely source of
political fireworks is the
Vanoni plan for Italian econom-
ic rehabilitation. Political
jealousy between its author
and former premier Mario Scelba
blocked it when it was first
proposed in late 1954, just be-
fore Vanoni visited Washington
to sound out the possibility of
American financing for it.
The government revived the
plan early in 1956 as a campaign
issue in the May local elections.
It has since appointed a committee
to investigate possible allo-
cations to the plan from vari-
ous government ministries, all
of which, however, have only
limited funds.
The Vanoni plan has great
appeal as an attack on the
problems of unemployment and the
wide divergency between the
economies of southern and northern
Italy. It has been regarded as
a possible bridge between Nenni
and its Christian Democratic
sponsors, partly because Nenni
came out in quick and vehement
support of it, while the Com-
munists rejected its freeze on
wages and consumption. If the
Christian Democrats could ob-
tain OEEC funds or other for-
eign loans to implement the
plan, they might continue to
push it with an eye to the na-
tional elections, and might
then decide to advance the
elections now sehe_di11 P for
ONE YEAR OF AUSTRIAN NEUTRALITY
In the year since the oc-
cupation came to an end, Austria
has engaged. in a great internal
debate over the obligations im-
posed by its neutrality law.
Disputes over the meaning of
the law have encouraged a tend-
ency to "appease" both the West
and the Soviet bloc. Sensitive
to the problem of their eastern
border, the Austrians feel they
cannot afford to offend the
Soviet bloc. Thus far they
seem to believe that their se-
curity depends on wider partic-
ipation in the European com-
munity and the United Nations.
Defining Neutrality
Aside from the extreme
rightists, who opposed the
neutrality law, the most re-
stricted view in the. neutrality
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
~~yCORSICA
}F?nnce 7~
%W101 SECRET
13 EEPTSMBER -1256
debate is generally held by the
Socialists, who maintain that
Austrian neutrality is limited
to making no foreign military
alliances and permitting no
foreign military bases on
Austrian soil. At the opposite
pole are the Communists, who
argue that neutrality applies
across the board and that Vienna
must be-absolutely neutral be-
tween East and West--in all
international and domestic
policies.
The tendency of some
People's Party leaders, other-
wise anti-Communist, to waver
somewhere between these extremes
is responsible, in.part, for the
delayed development of a foreign
policy which would apply neu-
trality realistically. Thus,
many Austrians are'exaggerating
their country's capabilities
to act as a "bridge," "mediator,"
or an "island of peace."
U S S R
presence of the World
Peace Council head-
quarters in Vienna,
but ousted the WFTU;
they resumed diplo-
matic relations with
Albania, but also
with West Germany and
Spain.
While there have
been fewer occasions
for clear-cut "deci-
sions between East
and West" lately, the
pattern in some re-
spects has remained
the same.
The fact that a
major test of Austria's
neutrality law has
not developed is at-
tributable in part to
the USSR's circumspect attitude
toward Vienna since the end of
the occupation. The state
treaty provides ample basis for
intervention, but Soviet bloc
pressures on Austria have
largely been confined to the
economic and cultural spheres.
It is too early as yet to
determine if reparations pay-
ments to the USSR and new or
renewed trade agreements with
most of the bloc countries are
producing a redirection of
Austrian trade. Recent un-
official figures show that
trade, exclusive of reparations,
with "six major bloc countries"
more than doubled in the first
half of 1956 over the same
period in 1955. Austrian trade,
however, is increasing in general,
and much of the increase with
the bloc reflects the appearance
in Austrian trade channels of
commerce the USSR carried on
during the occupation outside
these channels. Moreover, Orbit
deliveries have fallen short of
expectations,, part of an old
problem: Austria has plenty to
sell, but the bloc has little
the Austrians will buy.
they tolerated the continued I More serious than the in-
crease in trade with the European
SECRET
The American embassy in
Vienna last spring, in a list-
ing of acts of the Austrian
government favorable to the
West or to the USSR, found they
nearly balanced. For instance,
while the Austrians accepted
Soviet arms they also accepted
American military equipment;.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
Satellites are the pressures to
expand trade with Communist .
China. Both business and gov-
ernment were receptive to re-
cent East German offers to
give Austrian firms a "cut" in
Chinese contracts supposedly
held by East Germany, and a
large Austrian delegation has
recently returned from Communist
China with contracts allegedly
totaling $19,000,000. These
offers make continued Austrian
co-operation with COCOM and
CHINCOM uncertain. Peiping,
evidently aware of this, has
installed a lavish trade delega-
tion in Vienna for China's first
participation in the fall fair.
Cultural Coexistence
In their search for vul-
nerabilities, the USSR and the
European Satellites have shown
increasing interest in Austria's
devotion to sports and the arts.
A "cultural offensive" has not
developed thus far, but Orbit
leaders have badgered the Aus-
trians to increase the exchange
of theater ensembles, artists
and musicians,
The Austrians have been
cool to the political aspects
of such fraternization. Of-
ficial attitudes have oscillated
between a tendency to minimize
the importance of such contacts
and the excessive caution of
such officials as Minister of
Education Drimmel.
Border Incidents
Incidents along the borders
have recently encouraged other
government officials to espouse
a cautious attitude. Long re-
sentful of iron curtain behavior
to the north and east, the Aus-
trians have been shocked by fre-
quent border incursions and the
actions of trigger-happy Czech
and Hungarian guards. Follow-
ing the recent death of an Aus-
trian who mistakenly crossed
the demarcation line, Austrian
state secretary Kreisky public-
ly declared he could not imagine
even social exchanges with
countries "which show such pro-
found disrespect for human
life. "
Coming on the heels of a
Hungarian show of "razing the
technical barriers," these
potentially explosive episodes
have compelled the Austrians
to look to their defenses.
Formation of the Austrian army,
long delayed by political,
legislative and budgetary prob-
lems, is now making headway and
the press has shown increased
recognition of its need and
purpose.
Refugees
The continued flow of ref-
ugees from neighboring Commu-
nist countries is also a po-
tential danger in Austria's re-
lations with East and West. As
of 1 January, about 150, 000
refugees resided in Austria,
nearly 30,000 of them in fed-
eral camps. Monthly increments
are growing and, in July, 665
Eastern Europeans--547 of them
Yugoslavs--sought asylum.
The government has attempted
in general to abide by interna-
tional conventions respecting
refugees. At the same time, it
wants to avoid Soviet reprisals,
foreign infiltration and the
economic burden involved. So-
viet repatriation missions are
still a feature of the Austrian
scene, and the Soviet press
recently blasted the Vienna
government for "forcibly pre-
venting" the return of Russian
citizens.
Yugoslav refugees, who
account by far for the largest
monthly increment, are a special
problem. The sizable Slovene
minority in southern Austria was
used by the Yugoslavs to justify
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CURRENT INTELLIGENCE WEEKLY SUMMARY
,13 September 1956
their postwar territorial claims
against Austria. Cultural au-
tonomy?is guaranteed' by, the state
treaty, and there have been
sensational stories in the Aus-
trian press over alleged Yugo-
slav infiltration. The pro-
vincial governor of Styria re-
cently called for police meas-
ures to support. what he called
the "struggle of the border
population" against these en-
croachments.
Search for Friends
Increased doubts over
Tito's ultimate intentions
vis-a-vis the bloc have curbed
earlier Viennese inclinations
to flirt with Belgrade. While
Yugoslav officials have empha-
sized a common interest with
Austria in "keeping out Soviet
influence," some Austrians fear
that Tito is "attempting to
build a Danubian bloc." Al-
though Chancellor Raab has said
that the Yugoslavs would "never
be able to include Austria" in
such a bloc, Vienna continues
to be interested in actively
participating in the Eastern
Danube Convention. Last Jan-
uary, the pro-Yugoslav Austrian
envoy in Belgrade told an
American official that the West-
ern powers were underestimating
what could be done in tying
Yugoslavia to the West through
the development of closer Austro-
Yugoslav relations.
A tendency toward Real-
politik has not served the Aus-
trians well in their relations
with Italy;. A friendly rela-
tionship there would avoid the
domestic and international com-
plications of closer ties with
Bonn and the fears of another
Anschluss, as well as pressures
from the bloc to establish
similarly friendly relations
with East Germany. Because of
domestic Austrian politics,
however, the long-dormant claims
of Austria to the Italian South,
Tyrol have recently been revived,
and the appointment in the new
government of a state secretary
for South Tyrol affairs threatens
further difficulties with Rome.
"European Sentiment"
Vienna's continuing in-
terest in the "European Com-
munity" as a whole and in the
United Nations is a more hope-
ful sign. This interest is not
without reservations. Austrian
entry into the Council of
Europe was preceded by great
hesitation, particularly on
the part of the chancellor,
who feared Moscow's-reaction.
There also have been doubts
that neutrality would permit
an extension of Austria's pres-
ent` economic agreement with
the Coal-Steel Community. Never-
theless, "European" sentiment
as such remains high, stimulated
by economic need, a search for
security and the "European" con-
ferences which convene in Vienna.
United Nations membership
brought further misgivings.
Some of the chancellor's clos-
est advisers argued the need
of a "special status" that would
exempt Austria from charter re-
quirements to participate in
collective sanctions and to'
furnish armed forces to pre-
serve peace. In the end, how-
ever,'Vienna, like neutral
Stockholm, decided to join with-
out any special exemptions,
rather than to shun the UN
like the neighboring neutral
Swiss.
"Statutory neutrality" may
in the long run prove awkward
but, for the moment at least,
Vienna is taking comfort from
its increased participation in
world affairs and in its UN
membership. For example, after
diligent preparation, the gov-
ernment has evidently been
successful in bidding to make
Vienna the site for the pro-
posed international atomic
energy agency, a development
that is expected to bring in-
creased prestige to the nation
as well as some P_['.nnnmic benefit.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
NEW SOVIET AIRCRAFT
Eleven }yew Soviet aircraft
were observed in rehearsal
flights for the Air Force Day
show in Moscow on 24 June, in
the show itself, and in a
ground display at Kubinka air-
field the next day. Prelimi-
nary studies show that these
aircraft, which included the
first Soviet supersonic fight-
ers, are of advanced. design.
The number of new models.
displayed shows that the USSR
is engaged in a program to
develop aircraft'of the diver-
sity and quality required by
modern warfare. The extent of
the Soviet effort is reflected
in the appearance of sevaral
fighter designs from which one.
or two may be selected for pro-
duction,
The New Fighters
Two families of fighters
were displayed at the air show,
each having both delta-wing and
swept-wing versions. Construc-
tion of two.versj.ons of the
same aircraft may have been
developed to ensure against
possible failure of one of the
models. The observed external
characteristics of all the new
fighter types indicate that
they were designed for speeds
between Mach 1,5 and Mach 2,
or one and a half to two times.
the speed of sound. These are
the first Soviet fighters be-
lieved capable of supersonic
speed,
FISHPOT/FITTER.Family: A
large e tea-wing fighter, de-
.signated FISHPOT, and its swept-
wing counterpart, FITTER, were
the most striking aircraft
shown in Moscow. Apparently
designed for speeds approach-
ing Mach 2, both aircraft are
very clean in design and have
virtually identical fuselages.
The latter appear to have been
designed to conform to the
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that CAMP would be used by
Aeroflot as a cargo transport.
New Attack Aircraft
Two additional new air-
craft, both described as very
crude in appearance, were dis-
played to foreign visitors at
Kubinka airfield. Since
photography was not permitted,
only superficial analysis is
possible.
One was a twin-jet ground
.attack aircraft with slightly,
swept"wings, described as
SECRET
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956
roughly similar in configura
tion to but larger than the
USAF B-26. Armament consisted
of six guns mounted in the nose
and four rocket launchers
under each wing.
The other, described by
Sloviet. officials as a naval
attack/support aircraft., had
a single turboprop' engine with
the cockpit located immediately
behind the propeller. External
armament consisted of bombs
and rockets.
(Concurred in by OSI
PART I I I PATTERNS AND PERSPECTIVES Pn oa 1A ^* 1A
Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP79-00927A000900120001-1
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP79-00927A000900120001-1
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMAR'
13. September 1956
suggests that tests of this
design are also well advanced.
FLASHLIGHT Modifications
Also displayed at Moscow
were two modified versions of
the FLASHLIGHT (YAK-25) all-
weather interceptor (now de-
signated FLASHLIGHT "A") which
first appeared in the 1955 air
show. Analysis of the new
models, designated FLASHLIGHT
"B" and "C," suggests more
thrust and an improved speed
capability. A pointed nose
has been substituted for the
speed-reducing blunt nose of
FLASHLIGHT "A" and the engine
nacelles have been lengthened,
probably to incorporate after-
burners. These refinements
have improved FLASHLIGHT's
climb capability and boosted
its Speed to something over
Mach 1.
The FLASHLIGHT "B" has a
pointed glassed-in nose and a
radome under the fuselage which
probably houses bombing-navi-
gation radar. A second crew-
man probably occupies a posi-
tion in the nose. This air-
craft appears suited for
rocketry, bombing, reconnais-
sance and possibly training.
FLASHLIGHT "C" has a two-
seater cockpit and a pointed,
solid nose, which probably
houses air-borne intercept
radar. This model is believed
to be an all-weather inter-
ceptor.
New Light Bomber
A new swept-win,. jet light
bomber, designated BLOWLAMP,
appeared in rehearsal flights
and'at Kubinka airfield but not
in the show. Probably a re-
placement for the BEAGLE (IL-
28), the aircraft is estimated
to carry a crew of three: pilot,
bombardier-navigator and tail
gunner.
The sharply. swept wings
and high thrust engines--be-
lieved to be versions of the
FISHPOT engine without after-
burners indicate that BLOW-
LAMP was intended to. be super-
sonic, and it has been so de-
scribed by Soviet officials.
The USAF Air Technical Intel-
ligence Center estimates, how-
ever, that the aircraft is not
capable of supersonic speed
in level flight.
BLOWLAMP's armament is
believed to be two. fixed for-
ward-firing 23-mm, guns in the
nose and two 23--mm, guns in
the tail turret. A large bomb-
ing-navigation radome is carried
under a rather thick fuselage.
Turboprop Transport
A new twin-engine turbo-
prop military transport, des-
ignated CAMP, also was intro-
duced. This aircraft is similar
to the USAF C-123 but about 30
percent larger. Its configura-
tion indicates it may be in-
tended as an assault transport
capable of moving personnel
and equipment in close support
of ground troops. The upswept
lines of the rear fuselage in-
dicate the CAMP probably con-
tains a.loading ramp.
Although the model which
was displayed had a manned tail
turret--unusual in a transport--
representatives of Aeroflot,the
Soviet civil airline, have stated
SECRET
PART III PATTERNS AND PERSPECTIVES Page 13 of 14
Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP79-00927A000900120001-1
 VW.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP79-00927A000900120001-1
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
13 September 1956-
that CAMP would be used by
Aeroflot as a cargo transport.
New Attack Aircraft
Two additional new air-
craft, both described as very
crude in appearance, were dis-
played to foreign visitors at
Kubinka airfield. Since
photography was not permitted,
only superficial analysis is
possible.
One was a twin-jet ground
attack aircraft with slightly
swept wings, described as
SECRET
roughly similar in configura-
tion to but larger than the
USAF B-26. Armament consisted
of six guns mounted in the nose
and four rocket launchers
under each wing.
The other, described by
-Soviet officials as a naval
attack/support aircraft, had
a single turboprop ? engine with
the cockpit located immediately
behind the propeller. External
armament consisted of bombs
oncurre n y
PART III PATTERNS AND PERSPECTIVES Page 14 of 14
Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP79-00927A000900120001-1
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP79-00927A000900120001-1
Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP79-00927A000900120001-1