CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001200070001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 38
• Document Creation Date: December 20, 2016
• Document Release Date: August 15, 2005
• Sequence Number: 1
• Publication Date: May 2, 1957
• Content Type: SUMMARY

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 17
OCI NO. 1422/57
2 May 1957
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OFFICE OF- CURRENT INTELLIGENCE
CONFIDENTIAL
SIECRuf W-.1
State Department review completed
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CENTRAL INTELLIGENCE AGENCY
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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
2 May 1957
King Hussain, with the
support of loyal elements in
the army and police, retains
control in Jordan. He has ap-
proved additional measures to
strengthen the administration
of martial law by appointing
military courts with extraor-
dinary powers in East and West
Jordan, and six military gov-
ernors to administer the sev-
eral regions.
The military governor gen-
eral of Jordan has dissolved
all National Guidance Commit-
tees, which functioned as front
organizations for the four
left-wing nationalist parties
dominating the legislature.
Parliamentary immunities were
abolished on 27 April, and
some leftist deputies are re-
ported to have been among
several hundred individuals
detained. The curfew has been
progressively relaxed during
most of the daylight hours in
Amman and other cities, per-
mitting the populace to pre-
pare for celebrations from
1 to 3 May observing the end
of Ramadan. Military courts
will begin trials after the
holidays.
The king's suspension of
the extraordinary session of
the legislature on 28 April
will permit the cabinet of
Ibrahim Hashim to function
without the required vote of
confidence until the next
ordinary session in November.
The roundup and surveil-
lance of antiregime elements
have included efforts to
neutralize centers of Egyptian
influence in Jordan. Premises
of the Egyptian-controlled Mid-
dle East News Agency were entered
and searched on 28 April
While tightening his hold
on Jordan, King Hussain moved
to reduce the appearance of dis-
cord among the Arabs. Jordan's
border with Syria has been re-
opened, and the communique
issued following Hussain's meet-
ing with King Saud on 28 April
reaffirmed adherence to the
principles of Arab solidarity.
Iraq, in addition to fur-
nishing Hussain some financial
assistance, has continued to
increase its forces at H-3
pumping station, 40 miles from
the Jordan border, to at least
6,000 men, approximately two
infantry brigades with artillery
and armored supporting units.
3,000 Syrian troops in North
Jordan have not yet been with-
drawn.
Soviet Activities
The USSR has continued its
propaganda campaign begun on 23
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2 May 1957
April to back up "progressive"
forces in Jordan and to encour-
age Syrian and Egyptian attempts
to undermine King Hussain.
Moscow is restricting its
activities to the diplomatic
and propaganda fields.
On 26 April, Soviet UN
delegate Sobolev interrupted
the debate on Suez to charge
that the Sixth Fleet movement
toward the eastern Mediterranean
was "an attempt to take vindic-
tive measures against the people
of Jordan." He urged Security
Council action to prevent it,
but evinced no intention of
formally introducing his charges
to the council.
The Soviet Foreign Ministry
statement of 29 April on Jordan
was chiefly a call for Arab
cohesion against "imperialist
intrigues" and an effort to
encourage Syrian and Egyptian
attempts to undermine King
Hussain's position. A com-
paratively mild recapitulation
of recent Soviet propaganda
on Jordan, the statement avoided
direct personal criticism of
Hussain or the Hashim government.
The declaration censured
the Western powers, the "United
States above all." It also
singled out Israel and Iraq
for criticism and reflected
Moscow's concern over the
possible disruption of the
Egyptian-Saudi-Syrian pact.
The Soviet Foreign Ministry
warned of possible "dire con-
sequences" and called the dis-
patch of the Sixth Fleet an
"overt military demonstration
against the Arab east which is
further aggravating the situa-
tion."
Nasr-Saud Split
Relations between Nasr
and King Saud, already irri-
tated by'the role which Nasr
attributes to Saudi influence
in Jordan, appear to have de-
teriorated further. Nasr has
repeatedly indicated he would
retaliate against Saud, very::.:_
possibly by using Palestinians
who work for Aramco. Saud al-,
most, certainly fears such action.
One effect of the growing
Egyptian-Saudi rift has been to
move Saud toward his traditional
bete noire, Iraq. Saud has
been scheduled for some time
to visit Baghdad on 11 Ma
while, Saud has gone as far
as to advise that Iraq be urged
to extend further help to
Hussain and that Western finan-
cial aid for Jordan be channeled
through Iraq. The Iraqis in
turn have indicated they would
not move in Jordan militarily
unless such a movement had been
co-ordinated with Saud in ad-
vance.
While these developments
mark a considerable advance
over previous relations between
the Iraqis and Saud, a complete
break between Saud and Egypt
is still unlikely unless Nasr
comes out openly with an at-
tack on Saud.
Suez Canal
Britain is resigned to
using the Suez Canal provision-
ally on Egypt's terms, and the
French may be considering aban-
doning their boycott. London
is attempting, via banking
channels, to obtain Egyptian
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
acquiescence to paying tolls
in transferable sterling, and
two British-flag vessels have
already transited the canal
after paying in foreign cur-
rencies.
London evidently still be-
lieves some gains may be pos-
sible in a final settlement, but
the British do not believe that
any further negotiations with
Nasr now would be fruitful.
Nevertheless, Britain takes
the attitude it should "keep
up the pressure" on Egypt to
improve the offered terms, and
Foreign Secretary Lloyd, at
the Suez Canal Users' Association
meetings this week, recommended
that another UN Security Council
session be called promptly to
try to get Egypt to say it does
not intend to modify its dec-
laration unilaterally. London
also said this proposal is a
holding action while negotiations
with Egypt regarding transferable
sterling payments are proceeding..
The association adjourned
without endorsing any substantive
resolution, however, and seems
to be disintegrating because
of a divergence of views among
the various members. Adminis-
trator Bartels has already ten-
dered his resignation.
The French UN delegate,
who has sharply criticized the
Egyptian declaration, on 27
April suggested that negotia-
tions for the surcharge favored
by a majority of Hammarskjold's
advisory committee to cover
costs of canal clearance might
be a device to begin co-opera-
tion between the Egyptian canal
authority and the representa-
tives of shipping and trade re-
ferred to in the Egyptian canal
declaration.
Britain has so far denied
planning any initiative to re-
establish diplomatic relations
with Egypt, and continues to
block Egyptian sterling balances
valued at $280,000,000. Rela-
tions are more likely to be
re-established with Saudi Arabia
before either Egypt or Syria.
London remains suspicious of
Saudi designs on Aden and the
British-protected states in the
Persian Gulf. There are no
indications of any French plan
to re-establish diplomatic re-
lations with Syria, Jordan,
Egypt or Saudi Arabia.
Israel
Israeli prime minister
Ben-Gurion has in effect re-
jected a bid by UN Secretary
General Hammarskjold to visit
Israel to discuss further steps
toward using the UNEF on the
Israeli as well as the Egyptian
side of the armistice line. In
a letter to the secretary gen-
eral., Ben-Gurion said this
question could not be discussed,
although he would "welcome"
Hammarskjold's coming to talk
about Israeli complaints.
Hammarskjold fears that unless
Israel's attitude toward the
UNEF changes, the contributing
governments may begin to with-
draw their contingents from the
force, and the whole UN program
for maintaining the armistice
would be threatened.
The Israelis have repeat-
edly indicated they have no
interest in maintaining an
armistice which they officially
regard as having lapsed, and
the UNEF commander, General
Burrs, has stated he believes
the Israelis are seeking to
discredit the force despite the
fact; that there has been no
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2 May 19 57
fedayeen terrorist activity
along the Gaza strip border
since the UNEF began partici-
pating in patrols there.
The Israelis' hostile at-
titude toward UN "interference"
has also been demonstrated re-
cently on the Syrian border,
where three-successive serious
shooting incidents occurred
last week. UN truce observers
were brought under fire from
both sides. The Israelis held
off UN personnel from their
positions at gun point, and re-
fused to accept a message from
the chief of the Israeli-
Syrian mixed armistice commis-
sign calling on them to halt
provocative tactics along the
border.
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COI~f'~TIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
NEW SOVIET PROPOSALS FOR A LIMITED DISARMAMENT AGREEMENT
Following his return from
consultations in Moscow during
the Easter recess, Soviet dis-
armament delegate Zorin pre-
sented new proposals for a par-
tial agreement to the American
delegation in London on 26
April. These proposals contain
a number of features apparently
intended primarily for bargain-
ing in the next phase of nego-
tiations for a limited agree-
ment. In a meeting with the
American delegate,. the next day,
Zorin indicated that if his
latest proposals were unaccept-
able, further negotiation might
produce a compromise formula.
The USSR declared itself
willing to consider a partial
agreement which would include
three features: reductions in
conventional forces and arms,
a ban on the use and testing of
nuclear weapons, and a limited
system of inspection and con-
trol. 7orin included under
these headings, however, a num-
ber of controversial suggestions
that would be almost as difficult
to agree on as the original com-
prehensive Soviet plan.
In the field of conven-
tional weapons, the new Soviet
proposals called for a 15-per-
cent reduction in armaments and
defense budgets instead of the
10 percent proposed by the
United States, and a commitment
to undertake an additional re-
duction after reaching the force
levels proposed by the Western
nations (2, 500, 000 for the US, the
USSR and Communist China and
750,000 for the UK and France).
This second stage would bring
force levels down to 1,500,000
for the US, the USSR and China
and 65Q, 000 for the UK ana;
France
Zorin commented that the
American proposal of 2,500,000
for the US and the USSR, with-
out a commitment to a further
reduction, "does not display a
realistic approach" because
their geographical and strategic
positions are not. equal. He
stressed that the American plan
.is "proposed in isolation from
further reductions" and from
steps toward prohibition of
nuclear weapons.. In addition,
the USSR introduced a new
proviso that the "strength of
armed forces must include the
personnel employed in the armed
forces on a civil status, but
attending in fact to military
equipment and installations."
While Soviet spokesmen have
previously stated that agreement
on a second-stage. force level
of :L , 500, 000 for the US,,, the . USSR,
and Communist China must be an
essential part of a limited
agreement, 7orin told the Amer-
ican delegate on 27 April that
the amount of. force reductions
was "negotiable,"
The new Soviet proposals
continue to stress the nuclear
test ban issue, which Moscow
apparently believes is the
point of greatest vulnerability
in the West's position. Zorin
declared that cessation or sus-
pension of nuclear tests and a
pledge by the great powers not
to use atomic and hydrogen weap-
ons of any type are the minimum
requirements for a partial
agreement. He suggested that
a test ban should be put into
effect as a separate measure
before the first stage of a
partial agreement.
Zorin had made clear before
the Easter recess that the USSR
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2 May 1957
SOVIET AND US AERIAL INSPECTION PROPOSALS
considers a Cessation or sus-
pension of nuclear tests to be
an essential part of a limited
agreement. However, the pledge
to renounce use of nuclear
weapons probably was added to
the list of "indispensable" re-
quirements primarily for bar-
gaining purposes. The Soviet
delegate attempted to convey an
impression of considerable
flexibility on tie question of
nuclear controls, stating that
he would be glad to examine any
American proposals for prevent-
ing "fourth countries" from
obtaining such weapons. He
also indicated willingness to
reconsider the.whole question
of nuclear controls in a par-
tial agreement.
On the question of inspec-
tion and control, the new Soviet
plan proposed that a control
organ be established within the
framework of the UN Security
Council. During the first
stage of force reductions, its
functions would be limited to
"receiving and examining the
information provided by the
states on the implementation
of the partial measures."
Further, the control posts,
originally proposed by Premier
Bulganin, would be established
only in the western "border
regions" of the USSR, in France,
Britain and other countries
belonging to the NATO and War-
saw alliances, and in the '"east-
ern part of the United States."
Establishment of control posts
at airfields would be deferred
until the second stage of force
reductions and must be related
to "'appropriate measures" for
banning and destroying stock
piles and nuclear weapons,
These new provisions on inter-
national control represent a
sharp curtailment in the author-
ity and functions of the con-
trol organ as previously de-
fined in Soviet proposals.
Responding to the American
proposals for aerial inspection,
the new Soviet plan modified
the zones suggested by the
United States both in Europe
and the Far East. In Europe,
the Soviet proposal includes
a much smaller section of So-
viet territory than the US had
proposed, In the Far East,
the Soviet proposal substantial-
ly expanded the area suggested
so as to include approximately
equal areas of each country,
including better than two thirds
of the continental United States.
Zorin indicated on 27 April
that the exact definition of
zones for aerial inspection
could be subject
negotiations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
SOVIET INTEREST IN DEMILITARIZED NEUTRAL ZONE IN EUROPE
The USSR is showing in-
creasing interest in a neutral,
demilitarized zone in Europe
and is hinting that this might
be an appropriate topic for
discussion at a great-power con-
ference. Moscow probably in-
tends to exploit increasing
West European interest in a
USSR's proposed "neutral zone of limitation and inspection"
500-mile distances east and west from selected points
along NATO-Warsaw pact country borders
(Proposed by USSR on 17 November 1956)
USSR - proposed zone of aerial survey (26 April)
US-proposed zone of aerial survey (April)
neutral belt to counter the
trend toward an integrated non-
Communist Europe which Soviet
leaders believe would be dom-
inated by West Germany.
Soviet deputy premier
Mikoyan told Austrian officials
on 24 April that a detente with
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 19 57
the West "will simply have to
be found," and suggested in
this connection the possibility
of a wide demilitarized zone
in Europe. In his 20 April
letter to Prime Minister Mac-
millan, Bulganin said the So-
viet Union was ready "to re-
sume discussion" of the Eden
plan as a first step toward
a European security system if
the Soviet plan would also be
discussed. Soviet delegate
Zorin told the American repre-
sentative at the London dis-
armament talks on 16 April
that the establishment of a
"zone of limitation and inspec-
tion" would set the stage for
a collective security agree-
ment and political settlement
in Europe.
Soviet delegate Zorin re-
stated Moscow's concept of such
a zone on 29 April. It would
include both parts of Germany
and adjacent states. Ceilings
would be placed on the forces
of the United States, Great
Britain, France and the USSR
stationed in the zone. Nuclear
military formations and the
location of nuclear weapons in
the zone would be prohibited,
and the states included would
assume an obligation not to
use force to settle disputes.
A joint inspection plan would
be instituted to ensure that
the obligations of the agree-
ment were fulfilled. In future
negotiations, the USSR may pro-
pose that its plan for aerial
inspection over a zone 500 miles
on either side of the East-West
line in Europe be applied as a
concomitant to a neutralized
zone in Europe.
Moscow sent a threatening
note to West Germany on 27 April
offering the Bonn government the
choice of keeping open the pos-
sibility of reunification by
supporting the Soviet position
on a demilitarized neutral zone
or maintaining its ties with
NATO and running the risk of
nuclear devastation in the event
of war. The note, the latest in
a series to NATO countries warn-
ing them against allowing nuclear
bases to be established on their
territories, was delivered on
the eve of the first meeting of
the NATO foreign ministers to
be held on German soil.
During the London disarma-
ment talks, Soviet delegate
Zorin has shown a special in-
terest in a reciprocal reduction
of forces in Europe, especially
in Germany. The USSR's 26 April
proposal for a partial agree-
ment on disarmament calls for a
one-third reduction of forces in.
Germany.
REACTIONS TO BRITAIN'S "GRAND DESIGN" FOR EUROPEAN CO-OPERATION
The Council of Europe
meeting just concluded in
Strasbourg highlighted dif-
ferences between Britain and
the six Coal-Steel Community
(CSC) countries over closer re-
lations among the Western Euro-
pean nations. Britain's "grand
design" for a single consulta-
tive European assembly seems
too sweeping to most Continental
countries, and the six CSC coun-
tries appear united in the be-
lief that this plan may actually
retard their own integration
along; the institutional lines
typified by EURATOM and the Com-
mon Market.
Pressure for a consolida-
tion of the various parliamentary
assemblies for European co-opera-
tion has been mounting for some
time because of the increasing
time demands and travel burdens
placed on the members. At present,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
the Council of Europe Consulta-
tive Assembly and the Western
European Union (WEU) Assembly
meet in Strasbourg, the Con-
ference of NATO Parliamentarians
in Paris, and the CSC Common
Assembly in Luxembourg. The
assemblies to be established
for EURATOM and the Common
Market under the two still un-
ratified treaties are expected
to merge with the CSC Assembly
at a site as yet undetermined.
Britain's "grand design"
presented to the WEU council in
March-proposed that a single
consultative assembly with a
common location and secretariat
be created, with the functional
commissions of this assembly
then replacing the several ex-
isting parliamentary groups.
While the WEU council generally
agreed on the desirability of
a common location, the CSC coun-
tries insisted on.a separate
assembly to control the CSC,
Common Market and EURATOM,
West Germany is particu-
larly fearful that Britain,
which has traditionally tried
to keep its relations with
Continental powers on a loose
"'functional" basis, may try to
dilute the envisaged operational
authority of the six-nation
assembly by submerging it in
an over-all body with only ad-
visory powers. Bonn is there-
fore reportedly drafting a plan
of its own to prevent any "wa-
tering down" of the suprana-
tional aspects of the Continental
community..
Meanwhile, a report from
Stockholm indicates further
opposition to the "grand design"
on the part of the "neutral"
members 'of the Council of Eu-
rope--Sweden, Austria and Ire-
land--who are unwilling to sit
in any assembly which might
consider military problems.
Neither the British proposal
nor any present alternative
plan meets this objection,
since it would presumably .near
dissociating the WEU and NATO
assemblies from the single
assembly.
THE MACMILLAN-ADENAUER MEETING
British prime minister
Macmillan, on his own initia-
tive, is going to Bonn for talks
with Chancellor Adenauer from
7 to 9 May. Besides trying to
reassure Adenauer of the firm-
ness of Britain's military com-
mitment on the Continent, Mac-
millan may use the occasion to
sound ou'. 1 :enauer on British
ideas for ..ew moves on East-
West issues,
A strain in Anglo-German
relations has developed this
year from a German feeling that
London is unilaterally under-
taking major changes in military
plans that directly affect Ger-
many--first, by the plan to
withdraw about one third of
Britain's forces from Germany,
and :Later by the announcement
in its defense white paper of
the intention to end conscrip-
tion while concentrating on the
nuclear deterrent.
Macmillan hopes to temper
AdenaLuer's opposition to the
full reductions, which the West-
ern European Union (WEU) will
consider again in October, pre-
sumably by underlining Britain's
determination to honor its
commitment to the ground defense
of West Germany. The prime
minister is also aware that
British defense plans have
stimulated further controversy
in West Germany on the question
of nuclear weapons for the
German army.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
Many British officials
fear Germany's present demand
for equality with other allies
in the possession of nuclear
weapons may grow into insistence
on manufacturing its own. For-
eign Secretary Lloyd told Amer-
ican disarmament delegate Stas-
sen on 26 April that he believes
Germany would be quite certain
to follow France in any decision
to go ahead with a nuclear
weapons program. Lloyd also
believes the French decision
is only a few months away. Mac-
millan will want to probe
Adenauer's thinking on this.
In general, Britain's plan
to emphasize its role as a Euro-
pean power will be at issue.
In apparent recognition of the
widespread Continental belief
that London is still trying to
water down the integration
effort, a high British official
has said that any further Brit-
isb, efforts to push the "grand
design" for centralizing the
various bodies for European co-
operation are awaiting the Mac-
millan-Adenauer meeting.
Macmillan will also prob-
ably try to reassure Adenauer
that London will steadfastly
support German reunification in
any forum where Germany does
not sit--such as in the UN Dis-
armament Subcommittee meeting--
or in any future Macmillan visit
to Moscow. In the same vein,
Adenauer may be expected to
press for assurance that Mac-
millan is totally unsympathetic
to opposition leader Gaitskell's
proposal for a central European
neutral belt, which assumes
that a reunified Germany would
leave NATO.
LABOR UNREST AND BUDGET PROBLEMS THREATEN MOLLET
Mid-April strikes of trans-
portation workers and spreading
labor unrest in the metallurgi-
cal industry point up French
premier Mollet's weakening do-
mestic political position. Mol-
let's request for more than
$428,000,000 in new taxes will
lead to his most difficult test
to date when the National Assem-
bly returns on 14 May, and he
may try to meet it by broaden-
ing his coalition.
Mollet was spared labor
agitation in his first year as
premier, but in the past three
months it has become a major
problem. Workers in national-
ized industry are becoming in-
creasingly restive over the
wage-price freeze of last July
and government manipulation of
the official price index. In
private enterprise, where small
raises had followed productivity
increases, wage demands are also
growing.
This is an embarrassing
problem for a Socialist govern-
ment, particularly since Mol-
let's Algerian policy has had
more appeal to rightist parties
than to his own. Some Social-
ists have already been alienated
and new discontent can be ex-
pected over the wage question.
Socialist leaders are also con-
cerned because Mollet's social
program has won little new
labor support, despite the Com-
munist Party's isolation as a
result of the Hungarian and
Suez issues.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
The pressure for wage in-
creases is a direct threat to
Mollet's economic policy of
"expansion without inflation,"
which is already shaken by
France's worsening dollar and
gold position. The premier's
inability to reduce government
spending sufficiently is forcing
him to ask the assembly for
more than $428,000,000 in new
taxes. Such a request will be
fought by the right center,
which in the general policy
debate on 28 March clearly in-
dicated its discontent over his
economic policies.
These social and economic
problems may lead to a reshuffle
of the coalition to include the
Popular Republicans and former
premier Rene Pleven, who is a
possible interim successor to
Mo].let, The Popular Republicans
are close to the Socialists on
social policy, but differ on
the church-school issue. Any
move by the Socialists to bury
differences with the Catholics
would be played up by the
Coamunists to subvert Mollet's
own, rank and file. It would
also raise the possibility of
a withdrawal of the 14 Radical
ministers and secretaries from
the present cabinet. Neverthe-
less, the mounting economic and
financial pressures may force
Mollet to grant political con-
cessions to the center and
right.
GREECE SEEKING INDEPENDENT STATUS FOR CYPRUS
Athens is now pushing for
a Cyprus settlement providing
for independence under some
kind of trusteeship after an
interim period of self-govern-
ment under continued British
sovereignty. Ankara, however,
is suspicious of Greek inten-
tions and:.is forcefully reiter-
ating its demand for the parti-
tion of the island, despite
Greek moves to placate Turkey
and Archbishop Makarios' recent
effort to reassure the Cypriot
Turks.
A recent official Greek
statement chiding Turkish prime
minister Menderes for "unneigh-
borly" public comments, and re-
cent meetings between Greek for-
eign minister Averoff and the
Turkish ambassador have soothed
emotions in Greece.
Menderes, however, has told
the American ambassador that he
had already postponed a state-
ment to the Grand National
Assembly on Cyprus but must now
"face up to political require-
ments in Turkey." The Turks
handed Ambassador Warren a new
aide-memoire on Cyprus on 27
April which Warren says adds up
to a "flat, unequivocal, exclu-
sive Turkish decision for parti-
tion,"
The Turkish press has be-
come less inflammatory in the
last week although press attacks
on the patriarchate and on the
Ist4Lnbul Hellenic Association
continue. Ambassador Warren is.
"much concerned" over a published
report that the United States
will. propose an independent
Cyprus under NATO auspices at
the current North Atlantic
Council meeting at Bonn. The
ambassador fears that further
publicizing of this line will
make the Turkish reaction to
Governor Harriman's invitation
to Makarios "seem like a tea
party." A Turkish Foreign Min-
istry official complained to the
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2 May 1957
ambassador on 27 April that the
views of Averoff were "striking-
ly similar" to American views.
The Greek government and
Makarios probably will even-
tually agree on a moderate pol-
icy, although Makarios is un-
likely to abandon his goal of
eventual enosis. Athens, eager
to gain credit for moderation
among its NATO allies, appears
determined to avoid any further
worsening of relations with
Ankara, which would almost
certainly lead to a diplomatic
break.
By-elections in Syria for
the four parliamentary seats of
deputies convicted of having
plotted with Iraq against Syria
last year are to be held on 4
May. These elections will be
a trial of strength between con-
servative and leftist elements.
Balloting will take place in
Damascus, Homs, Suwayda, and
the Jebel Druze area. Martial
law, which still prevails
throughout Syria, has been
lifted in these districts until
the elections are held.
Mustafa Sibai, leader of the Mos-
lem Brotherhood, is the rightist
coalition candidate. The left-
ists are supporting Riad Mulki,
a lawyer and the brother of the 25X1
assassinated leftist "martyr" 25X1
Colonel Adnan Mulki. The Com-
munist candidate withdrew in
The contest for these seats,
formerly held by conservative
deputies, will be between a co-
alition of rightist groups--
Populists, Arab Liberation Move-
ment, the Moslem Brotherhood,
and rightist independents--and
a coalition of the leftist Na-
tional Front--Communists, Arab
Socialist Resurrection, and
leftist independents.
The most significant elec-
tion will be held in Damascus,
where the lines between right
and left are most clearly drawn.
Syrian elections normally
are contests between rivals
within the ruling group itself.
While this week's elections are
unique in that ideological is-
sues are being stressed for the
first time, they are really
contests between local political
figures and those supported by
the machinery of the central
government.
The outcome will depend
on the amount of pressure the
government can or is willing
to exert in support of its
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
outbreak of ocal violence is
a strong likelihood.
Considering the conditions
under which these elections are
being held, the outcome is
highly uncertain. The leftists
have an advantage, since they
dominate the Interior Ministry
which carries out the elections.
They also are willing to"use
force wherever an excuse can
be found. The rightists are
less well organized, however,
and, until the recent develop-
ments in Jordan, were thoroughly
discouraged. Improved morale,
plus local influence, may give
them a better chance than they
otherwise would have had.
HONDURAN-NICARAGUAN BORDER DISPUTE
Honduras, mobilized early on
2 May.
President Somoza told
the American ambassador in
early March that if Nicaraguan
forces were attacked, he would
order an immediate march on the
Honduran capital. The Council
of the Organization of American
States met on 1 May and again
on 2 May to decide on methods
of settling the dispute.
The belligerent Honduran
stance seems due, at least in
part,. to the intri-
0 Area of de facto Nicaraguan
control since 1937
0 Area in dispute
? Area of new Department
created by Honduras;
-Road
-Limit of Segovia Rive
watershed
Boundary by the arbitrat
award of the King of Spain, I9DK.
,Aga
~Nta>agva
guing of a military
clique desirous of
obtaining more con-
trol in the govern-
ment, possibly to the
extent of ousting
moderate leaders such
as Major Roberto Gal-
vez, a member of the
governing junta. Gal-
vez has been the
chief proponent of
a quick return to
constitutional civ-
ilian government, an
attitude not to the
liking of many offi-
cers who have come to
enjoy the authority
SECRET
The Honduran military jun-
ta, under heavy domestic pres-
sure, appears willing to risk
war in the current flare-up of
the century-old border dispute
with Nicaragua. A clash oc-
curred . on. I., May. when Honduran
troops, which had been ordered
to occupy all territory claimed
by Honduras, seized the town of
Moeoron, located in that por-
tion of the disputed area under
de facto Nicaraguan. jurisdiction
for 20 years. Nicaragua, whose
armed forces are generally con-
sidered superior to those of
BR [915H ' C A
HONDURAS
PART II
ALVADOR v
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
and personal benefits which
they have gained since the mil-
itary coup last October.
Nicaragua flatly rejected
the Honduran note of 24 April
protesting alleged depredations
by Nicaraguan troops in the
disputed area. On 28 April the
Honduran foreign minister de-
clared that there is no longer
any point in negotiations, and
that Honduras must defend it-
self. Elements of the Honduran
army sent to the frontier in-
clude 200 soldiers of the bat-
talion trained and armed by the
United States which, under terms
of the defense agreement, is to
be used only for defense of the
hemisphere. The air force has
been alerted.
The area in dispute, though
large, is mostly jungle and
swamps, sparsely populated and
almost completely lacking in
transportation facilities. The
entire area was awarded to Hon-
duras by the arbit-ral award of
the king of Spain in 1906.
Nicaragua later rejected the
award and, since 1937, has
been in de facto control of a
po::rtion of it.
Realizing that Honduras
was losing its claim by default
and anxious to unify the country
politically with a popular
issue, the Honduran government
last February established the
new department of Gracias a
Dios in the area, and announced
an ambitious plan for coloniz-
ing it, with the goal of winning
it for Honduras. These actions
were taken with considerable
fanfare, which was provocative
present crisis.
to Nicaragua and led to the
Relations between the Dja-
karta government and the non-
Javanese provinces entered a
new critical phase on 27 April
when territorial army commanders
at an army conference in Dja-
karta threatened a final break
which could lead to civil war.
Previously, Lt. Col. Hussein of
Central Sumatra had presented
Prime Minister Djuanda 11 spe-
cific conditions--bluntly reit-
erated in essence at the con-
ference--as the only basis for
a settlement of differences.
Although Djakarta is quite
unlikely to accept the condi-
tions or even to use them as a
broad basis for compromise, Hus-
sein has clearly and publicly
outlined the differences be-
tween provincial and centralist
leaders.
Included among Hussein's
demands are the "immediate
abolution of centralism,"
recognition of the Central Su-
matran governing council and
the legalization of actions it
has taken since December, the
return of former vice president
Hatta to a position of joint
national leadership with Presi-
dent Sukarno, a "proper finan-
cial understanding" between
Djakarta and the provinces, the
elimination of "nonreligious"
parties from the government
and the organization of Sukarno's
national advisory council into
a senate which would represent
the provinces. Hussein also
demanded that army chief of
staff General Nasution under-
take army reorganization only
with the consent of the terri-
torial commanders.
Hussein was supported at
the army conference by the com-
manders of South Sumatra and
East Indonesia and by the chief
of staff of the Borneo command.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
Hussein stated that Sumatrans
do not wish a final break with
Djakarta, but that every recent
government move appeared specif -
ica:lly designed to this end.
Hussein stated on 30 April as
he was leaving Djakarta that,
as a result of the army con-
ference, he was now convinced
there was no possibility for a
settlement?
The cabinet has completed
a draft bill for the formation
of a national council as pro-
posed by President Sukarno. It
,;rill be headed by Sukarno and
empowered to "advise" the cabi-
net, regardless of whether
advice is solicited or not. It
will include "functional" rep-
resentatives of."all.significant
groups of Indonesian society
and. at least seven specific
regional representatives. As
set forth in the draft law, it
in no way fulfills provincial
demands that it function as a
senate representing regional
areas,
Despite the country's
critical situation, elaborate
plans are under way for a 19-
day reception and tour, beginning
6 May, for Kliment Voroshilov,
titular head of the Soviet state.
His tour will be limited to
those areas of Indonesia which
are under Djakarta control--
Java, Bali and North Sumatra.
Sukarno probably hopes Voro-
shilov's visit will popularize
the Soviet Union in Indonesia
and prepare the way for imple-
mentation of the $100,000,000
Soviet technical aid agreement,
which was signed in September
1956 but never submitted to the
Indonesian parliament for rat-
ification.
The government had wished
to avoid an acrimonious parlia-
mentary debate and also has been.
unsure as to how to fit the
$100,000,000 into its develop-
ment program or how to control
Soviet administration of aid.
Sukarno and the central govern-
ment, however, are now eager for
additional funds to finance
projects in the disaffected prov-
inces and are therefore likely 25X1
to be less wary about the terms
assistance.
on which they accept Soviet
Actions by Pakistan's Na-
tional Assembly during its Ap-
ril session have improved Prime
Minister Suhrawardy's position
in West Pakistan and advanced
his objective of holding gen-
eral elections in 1958. Suh-
rawardy's efforts during the
same period to strengthen his
position in East Pakistan, how-
ever, were not successful and
pro-Communist Maulana Bhashani's
influence over the East Pakistan
Awami League apparently remains
strong.
Following its approval of
the government's move to extend
President's Rule in West Pak-
istan until 20 September, the
National Assembly passed a bill
on 24 April establishing a
joint electorate system through-
out Pakistan, The bill amended
the electorate act of October
1956 which provided that East
Pakistan was to have a joint
electorate in which the minor-
ity communities are given equal-
ity of franchise with the Moslem
majority, while West Pakistan
was to vote under 'a separate
electorate system in which each
minority elects its own repre-
sentatives to a fixed number of
seats,
The question of joint'versus
separate electorates has long
been a bitter political issue
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2 May 1957
in Pakistan, and Suhrawardy's
success in establishing the
principle of joint voting by all
communities in West Pakistan as
well as East Pakistan probably
will add to his prestige as a
national leader and bolster the
position of his Awami League.
The Moslem League, which
vehemently opposed the govern-
ment proposal as contrary to the
injunctions of Islam and as a
threat to Pakistani nationalism,
attempted to incite the people
of Karachi to protest the action
by strikes and demonstrations
but evidently failed to get more
than a token response.
Members of the Republican
Party had opposed joint elector-
ates last fall. Their support
of Suhrawardy's policy now,
which enabled the prime minister
to raise the issue again without
risking defeat, may have re-
sulted from a promise by Suh-
rawardy to support restoration
of the suspended Republican
government in West Pakistan.
Suhrawardy's attempt to
establish his control over the
East Pakistan Awami League by
securing the support of the mod-
erate Krishak Sramik Party in
East Pakistan and breaking with
the left wing of the Awami League
led by Bhashani has failed, at
least temporarily. Negotiations
in Karachi with a section of
Krishak Sramik leaders broke
down, apparently over the lat-
ters' main demand for a clear-
cut commitment by Awami leaders
to cleanse the East Pakistan
government of pro-Communist and
pro-Indian elements.
Suhrawardy was evidently
persuaded by his colleagues in
Dacca that it would be unwise
to force a showdown with Bha-
shani at this time. Action has
still not been taken on the lat -
ter's proffered resignation as
president of the East Pakistan
Awami League, and has been de-
ferred until the prime minister's
return from his trip to Japan
and Southeast Asia.
The setback suffered by
Suhrawardy and his allies in
the party was pointed up by
Bhasshani's increased agitation
for provincial autonomy and his
reported demand that the party
decide whether it wants him or
Suhrrawardy. Bhashani's state-
ment to the press that elections
within the year would bring the
victory "of all our brothers in
both wings of Pakistan against
our enemies, the reactionaries,"
is another indication he plans
to divorce the East Pakistan
Awami League from Suhrawardy's
nomiLnal leadership, and, by
seeking leftist allies in West
Pakistan, to establish his or-
ganization on a ,national basis.
SOVIET MILITARY ASSISTANCE PROG1AM IN AFGHANISTAN
Under the Soviet bloc mil-
itary assistance program for
Afghanistan, shipments of light
and heavy arms to depots in
Kabul, Mazar-i-Sharif and else-
where are being made in quantity.
The deliveries presumably are
being made under terms of agree-
ments negotiated with Czecho-
slovakia and the USSR since 1955,
Increasing numbers of Soviet
military advisers and technicians
have been reported in Afghanistan.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
~--1 Broad gauge railroad
Narrow gauge railroad
All-weather road
MILES IEO
2 MAY 1957
Meshe
V I I
MILES
USSR or j
?.JAMMU
AKI TANS: Alvo
KASHMIR
Pes away (Status in dispute)
Rawalpindi
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
SUPREME SOVIET TO CONVENE
The meeting of the Supreme
Soviet scheduled to open in
Moscow on '7 May is to give for-
mal consideration and approval
to the sweeping reorganization
of Soviet industrial administra-
tion outlined by Khrushchev
last March (see Part III). The
Supreme Soviet may also be
called on to formalize impor-
tant personnel changes neces-
sitated by the reorganization.
These changes may provide new
clues to the relative strengths
of the various members of the
hierarchy.
One of the current politi-
cal questions which may be
clarified at the session in-
volves the reassignment of day-
to-day government responsibili-
ties which are parceled out to
several members of the top lead-
ership. The jobs of at least
three--Malenkov (minister of
electric power stations),
Kaganovich (minister of build-
ing materials industry), and
Pervukkiin (chairman of the
short-term planning commission)
--are being abolished as a re-
sult of the reorganization.
There may also be a reas-
signment to provide stronger
SOVIET WORKERS DEMAND VOICE IN FACTORY MANAGEMENT
Technical personnel and
party members employed in So-
viet industry have recently de-
manded workers' control of in-
dustry at the factory level,
including the election of man-
agers, according to an editorial
in the 15 March issue of the
authoritative party journal,
Kommunist, which deplored the
develop.ont. These demands
indicate widespread resentment
among workers, and even among
party members, over the effects
leadership for the new planning
appaLratus, since N. K. gaybakov,
the present head of Gosplan,
has not given the impression
of being able to carry enough
political weight for the task
involved. Pervukhin is a like-
ly candidate for' this post un-
less he has fallen into disfavor
as a result of his role-in the
recent reduction of 1957 eco-
nomic goals.
At the same time, the re-
organization may bring a few
new faces close to the top as
understudies for some of the
choLce spots in the central par-
ty and government apparatuses.
It provides a good opportunity
to use patronage on a grand
scale and facilitates moving
the foot-draggers and the sul-
len "old school" bureaucrats to
jobs where they can do the
least harm.
proceeding with the reorganiza-
tion, however, suggests that
they believe it can be carried
out without undue strain.
Khrushchev may try to manip-
ulate the shifts to enhance his
personal control. The speed
with which Soviet leaders are
The publication on 22 April
of a previously unpublished
article by Lenin against work-
ers' control, and the continu-
ing sharp criticism of worker
councils in Poland and Yugo-
slavia also lend substance to
reports that metallurgical
workers in Leningrad had de-
manded certain reforms late
last year, including the estab-
lishment of some form of work-
ers' control.
of extreme centralization and The Kommunist editorial,
ruthless management of the So- in line with current propaganda,
viet economy. sharply attacked the arbitrary
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2 May 1957
practices of factory managers
toward employees, but strongly
reaffirmed the quarter-century-
old principle of part y-controlled
''one-Haan management" of Soviet
industrial plants, as neces-
sitated by the complexity of
Soviet industrial development.
The editorial observed
that Lenin had checked the
attempts by the "workers' op-
position" in the party during
1920-22 to replace centralized
control over industry with a
"congress of producers" under
the then relatively autonomous
Soviet trade union movement.
At the 10th party congress in
1921, he bludgeoned the 'workers'
opposition" by gaining the pow-
er to expel from the party those
who failed to comply with high-
level decisions.
party.
Like the "workers' op-
position" of the 20's, the pres-
ent-day dissidents within the
Soviet party and working class
are probably stronger in numbers
than in leadership or program.
By invoking the authority of
Lenin, the' Soviet leaders are
attempting to set the limits
of the impending "decentraliza-
tiori" in the economy and to
silence any opposition within
the party.:: Like. Lenin,.. the
pre.-Bent Soviet, leaders recognize
that freedom,of criticism in
the party can. degenerate..froiii
a ":Luxury" to.- a "disease,"
but unlike Stalin, they seem
to prefer to resolve rather than
repress differences within the
USSR DEPLOYS SUBMARINE TENDERS TO NORTHERN FLEET AREA
The USSR transferred five
submarine tenders from the Bal-
tic to the Northern Fleet area
Two
tenders were similarly deployed
last year. These vessels may be
destined for either the.North-
ern or Pacific Fleets, where ad-
ditional submarine tenders are
needed to support rapidly ex-
panding submarine forces.
In addition to the support
mission, these submarine tenders
will also permit dispersing sub-
marines as a defensive measure.
Each of these tenders could fur-
nish routine supplies for approx-
imately 10 submarines in anchor-
ages away from main naval bases.
These vessels, small by Western
standards, are apparently de-
signed to provide submarines
with diesel fuel, torpedoes and
mines. They also have berthing
facilities which could be used
by submarine crews when in port.
Sometime ago the official
naval newspaper, Soviet Fleet,
carried an article t t1e Anti-
atomic Defense of Coastal Ob-
j ec. 'icives" which concluder'. that
a reduction in 64 ze and the
dispersion of units r vere among
the best methods for protecting
or reducing damage to coastal
installations.
The most important bases for
Soviet submarine operations are
in the Northern and Pacific Fleet
areaLs, where the USSR has relative-
ly unrestricted access to the
open seas.
The USSR now has 24 sub
marine tenders: six in the Bal-
tic, four in the Black Sea, five
in the Pacific, and will have
nine in the Northern Fleet area.
with the arrival of the vessels
now en route. Some of the
Northern Fleet units may, how-
ever, be transferred to the Pa-
cific this summer across the
Northern Sea Route. Two years
ago, the USSR's largest sub-
marine tender, the Neva, was
transferred from the Black Sea
via the Norti r
the Pacific.
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2 May 1957
PEIPING INCREASES PRICES OF CONSUMER GOODS
The Chinese Communists
have been forced to permit a
consumer goods price rise aver-
aging 2 percent because of in-
flationary pressures built up
by the increases last year in
their investment program and in
worker an i1 peasant incomes.
Peiping has admitted that the
sharply increased investment
program and wage bill, coupled
with last year's disappointing
harvest, resulted in critical
market shortages of raw mate-
rials anu consumer goods.
The goods affected by the
increases include pork, some
edible oils, the more expen-
sive cigarettes, some handi-
craft products, Woolen textiles
and salt. The actual increases
on these goods are higher than
2 percent since the average
includes the entire range of
consumer goods, and prices of
consumer staples like food
grains and cotton cloth have
not changed.
Rations on these staples
have, however, been cut and the
rationing system tightened. For
example, the cotton textile
ration was recently cut by 50
percent for the May-August pe-
riod of this year. Chen Yun
and other economic leaders
have been advocating such
rises not only to check
inflation by reducing de-
mand, but also as incentives
to increased production and
better quality, arguing that
rigid controls in the past had
caused production slumps and
a general decline in quality.
Peiping probably intends
to pass along part of these
price increases to the peasants
who raise and deal in the af-
fected products, although it
has clearly indicated that the
state treasury will be a pri-
mary gainer,
The Chinese Communists
suffered a marked loss of pop-
ularity last year as a result
of shortages of food and con-
sumer goods brought about by
disappointing harvests and
inept planning. They have ad-
mitted they are inexperienced
as economic planners and inevit-
ably make mistakes, large and
small. It has become apparent
to them that they overreached
themselves in their economic
program last year. The present
price alterations are part of
a recent trend to economic
realism. To assist the Chinese.
Communists over their present
difficulties, the Soviet Union
has agreed to a reduction in
1957 Chinese exports of pork,
edible oil, pig iron, and other
goods in short supply. Pei-
ping's 1957 deficit in trade
with the Soviet Union will be
map next year.
(Prepared by ORR
CHINESE COMMUNIST UNIVERSITY ADMISSIONS CUT BACK SHARPLY
A shortage of educational
facilities is forcing Peiping
to cut back sharply the number
of young people admitted to
Chinese universities in the
coming school year. The regime
feels that the urgent need for
investment funds in industry
precludes for the time being
necessary enlargements in the
physical plants of the univer-
sitiesa Middle and primary
school students have been told
to accept the fact that, because
of crowded conditions, "for a
rather long time to come" only
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SECRET
2 May 1957
part of them can aspire to a
university education. The dis-
appointment to Chinese students
is being compounded by official
exhortations urging them to re-
turn to peasant status rather
than take up urban jobs in
keeping with.their educational
attainments.
This development is in
marked contrast to Peiping's
vigorous efforts in 1956 to
increase university enrollments.
Last year's enrollment target
of 180,000, almost twice the
1955 quota, exceeded the number
of middle-school graduates, and
it: was necessary to recruit
new students from the govern-
ment, armed forces and industry
to realize the goal.
The enrollment upsurge in
1956 proved to be a serious tax
on existing facilities. Less
than one fifth of the new floor
space and equipment necessary
to accommodate the large influx
of new students was on hand at
the beginning of the school
year. Classroom space was in-
adequate, and intolerable over-
crowding in dormitories was
reported. Difficult study con-
ditions may have been a con--
tributing factor in bringing
on the discipline problems re-
flected in the Chinese press
last fall and winter. Faculties
were enlarged to cope with the
increased load, but the quality
of instruction suffered from
the necessity of using inexperi-
enced teachers,.
The increase in school
enrollment last year came at
a time when the regime was over-
reaching itself generally in
its investment program, The
effort to meet investment goals
built up strong inflationary
pressures in the economy, and
Peiping apparently now feels
that a breather is necessary,
during which it must do-empahslze
investments in fields like
education which do not yield
an early return.
A recent People's Daily
editorial urged st ;nts W1 o
cannot continue their education
to 'take up work in rural areas
where their help is urgently
needed. They were called on
to rid themselves of the atti~-
tude that physical labor is
degrading and to accept the
challenge to be among the first
generation of "modern and liter-
ate" peasants. As in the So-
viet Union, graduates have al-
ready been expressing dissatis-
faction with jobs assigned them,
and the call for some students
to discontinue their studies
to engage in farm work will
bring serious morale probems
to those who sought schooling
in the first place as a means
to escape the rigors of rural
life. (Con- 25X1
curred in y vax)
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COTh1'TiAL
CU RENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
PATTERNS AND PERSPECTIVES
PROBLEMS OF 030VIET INDUSTRY
The Soviet government is
preparing to consider Khru-
shchev's proposals for a basic
reorganization of economic ad-
ministration. Although the
December central committee ple-
num directed that 1060 produc-
tion goals be "revised" and
although fundamental economic
weaknesses would seem to dictate
some downward revisions, there
is no indication such changes
are now envisaged. The leader-
ship apparently fecls'that ' the
reorganization, along with
other correctives, should re-
store the momentum of Soviet
economic growth. It is no cure,
however, for the weaknesses re-
vealed during the past year,
and even carries the long-run
possibility of changing the
system itself, although no
change in basic policy is in-
tended by the Soviet leaders.
Economic growth will
continue to be very
rapid by Western
standards.
Economic Reorganization
Khrushchev con-
tends that an "ab-
solutely fundamental"
reorganization is re-
quired because of
shortcomings in the
existing system at
the present stage of
"socialist construc-
tion." Yet he as-
serts that these
shortcomings do not
involve "failures"
within the economy--
ci t i . the high rate
of Soviet economic
growth. Most of
them, he points out,
have been developing
for a long time: ex-
cessive red tape,
disproportionate eco-
nomic development of
certain geographic
areas, \.idespread lac'.-.
of specialization in industry,
and wasteful transport practices,
such as "cross-hauling." The
criticisms leveled at the ex-
isting system appear valid--
they have been made repeatedly
by Western and Soviet observers
alike.
The cumulative effects of
such shortcomings have further
complicated an already unsatis-
factory economic situation,
threatening the goals of the
Sixth Five-Year Plan. While
Khrushchev has disclaimed any
connection between his proposals
for reorganization and this
situation, they followed hard
on the heels of the 1056 plan
fulfillment announcement which
reflected serious difficulties
in raw material supply and con-
-7trvi-ti.on, Ind the. announcement of
an unexpected modest 1957 plan.
SOVIET CARTOON MOCKING; "CROSS-HAULING" AND CONSTRUCTION FAILURES
FROM KROKODIL, 30MARCH 1957
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 19 57
O
IffiNSTRUCI CITY OF M~,S?l
7' L
MOSCOW CITY COUNCIL
AND ITS DIRECTORATES
SECRET
MOSCOW CITY
COUNCIL OF NATIONAL ECONOMY
TECHNICAL
COUNCIL
As the capital of the USSR, the
osoow city government is outside
tie jurisdiction of? the RSFSR
Counc of Ministers Dn~.R ~, ?_
1r i i al government activities r---
SCIENTIFIC RESEARCH
INSTITUTES
While strengthening cen-
tral economic planning, Khru-
shchev proposed that operational
efficiency be enhanced by in-
creasing the responsibility and
authority of local managers by
expanding their scope of action
for detailed, on-the-spot admin-
istration of policies. He pro-
posed, further, to replace the
present ministerial structure
with economic regions under
local Councils of National
Economy, An authoritative pre-
view of the organizational
structure of. a region was pro-
vided by Madame Furtseva, Mos-
cow committee chairwoman, in
her announcement of the proposed
structure for the city of Mos-
cow, which is itself to comprise
a single "region,"
The administrative reor-
ganization is apparently to
proceed swiftly. There is some
evidence that the Soviet
leaders hope to benefit from
some of the anticipated econ-
omies as early as 1958. Such
speed could involve a drastic
upheaval in 1957 operations,
but may be considered neces-
sary to the timely recovery of
USSR
STATE
PLANNING
COMMITTEE
USSR
MINISTRIES
COMMITTEES
OF THE USSR
COUNCIL OF
MINISTERS
t J
----------,-J
ECONOMIC
COUNCIL
ACTIVITIES OF UNION AND BRANCH-
OF- INDUSTRY SIGNIFICANCE
SCIENTIFIC-RESEARCH INSTITUTES
CONSTRUCTION BUREAUS
SPECIALIZED CONSTRUCTION BUREAUS
DESIGN ORGANIZATIONS
EXPERIMENTAL PLANTS
CONSTRUCTION
BUREAUS
momentum essential to achieve,-
merLt of the 1960 planned goals.
Certainly the reorganiza-
tion will be less than the
panacea Khrushchev makes it
appear. Transport probleits
probably can be solved under
they regional structure, but re-
organization alone probably will
not effectively improve special-
ization of production by in-
dividual plants. Moreover,
realization of the possible
advantages of the new system
will be limited for some time
to come both by the mechanics
of central planning and by the
inertia in Soviet public life.
Central authorities will be
loath to give up their old
powers and prerogatives, and
local officials will tend to
be timid and lethargic in
asserting their new rights.
The proposed changes could,
however, in the long run, dras-
tically alter Soviet economic
development and affect the
strategic capabilities and vul-
nerabilities of the USSR. If
through reorganization a crys-
tallization of local and republic
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DIRECTORATES OR TRUSTS
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 19 57
interests should eventually
develop, the primacy of all
Union interests and the mono-
lithic nature of the Soviet
national economy would be en-
dangered. Fragmentation of
economic decision-making might
then dilute the effectiveness
of central planning. Ulti-
inately these centrifugal forces
might be even more responsible
than the present inefficiency
for slowing down the rate of
Soviet growth. On the other.
hand, tendencies toward
"localism" may be met by
strengthening central control
organs or even by the develop-
ment of new central adminis-
trative bodies with much the
same powers as those now con-
demned.
Industrial Problems
A resolution of the
December party plenum specified
that the Sixth Plan goals were
to be refined by the middle of
the year, and presented to the
Supreme Soviet. Since then they
have been under active considera-
tion by the leadership. Recent ,
reiterations of a number of the
original plan figures indicate
that a major revision is not
likely. Since establishment
of the original targets by the
20th party congress, weaknesses
in the economy have become so
acute, however, as to make
achievement of these targets
highly unlikely. Behind a
shortage of essential materials--
iron and steel, coal and cement--
are shortfalls in the construc-
tion of new production capacity,
obsolescence of machinery, the
depletion of better grade raw
material deposits, and growing
labor difficulties.
The construction of new
production facilities has
lagged since 1951, but the
ministries and plant managers
had been able to overcome this
lag by drawing intensively on
existing capacity. By 1956,
however, such opportunities had
been reduced to a minimum.
These construction lags stem
from policy decisions on the
part of the leadership to di-
vert resources from basic
USSR.1957 PLAN REVISIONS
GOALS FOR KEY COMMODITIES
MILLION METRIC TONS EXCEPT WHERE NOTED
1956 PRODUCTION INCREASE ACHIEVED
1957 PLANNED INCREASE (PERVUKHIN COMMITTEE REVISION)
ANNUAL INCREASE REQUIRED IN 1958260 TO MEET 1960 GOAL (SABUROV 6th PLAN GOALS)
60
5.6
35.6
- 2.5
48.6.
45.3 3.3
OUTPUT 1956 1957 G1960
OAL
ELECTRIC
POWER
BILLIONS KWH
1957 1950
GOAL
SECRET
2.4
51..5
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USSR 1957 PLAN REVISIONS
2 May 1957
PERCENT INCREASE OVER 1955
PERCENT PLANNED INCREASE OVER 1956 (PERVUKHIN COMMITTEE REVISION)
PERCENT ANNUAL INCREASE REQUIRED IN '58-'60 TO MEET 1960 GOAL
(SABUROV 6th PLAN GOALS)
1960
PLAN
CURRENT INTELLIGENCE WEEKLY SUMMARY
1957 1960
PLAN PLAN
ALL
INDUSTRY
investment'and maintenance to
production..
1957
PLAN
1957
PLAN
Other factors affecting
production shortfalls include
the continued use of a consider-
able amount of outdated equip-
ment, partly because, for many
years, Communists refused to
accept the principle of obsoles-
cence, and partly because of
poor performance in producing
new models. Moreover, the
richer and more accessible
sources of metals and fuels are
being exploited to their full-
est, making exploitation of the
poorer, less accessible sources
increasingly necessary.
1960
PLAN
. Finally, labor
is posing serious
problems. Although
over-all supply is
probably adequate for
this year, it may not
be adequate in the
latter years of the
Sixth Plan. Further-
more it is difficult
to attract labor to
certain ley places,
such as the coal
mines and eastern
areas, a problem
which has assumed new
importance with the
1958 decision to abate the
extreme coercive meas-
ures of the Stalinist
era.
The disturbances
in the European Satel-
lites last fall placed
additional pressure on
domestic output of
certain commodities,
notably coal. Imports
of coal from Poland
had to be reduced and
exports to Czechoslo-
vakia and Hungary in-
creased. The upris-
ings also made less
feasible reliance on
armed forces to sup-
plement the labor
force, and probably
also have indirectly
increased pressures
for diverting more re-
sources to production of con-
sumer goods.
The 1957 Plan
The 1957 plan and budget
contain a program designed, with
the reorganization proposals
outlined above, to meet the prob-
lems presented by the country's
economic weaknesses. To relieve
economic strains, production
increases for industry and for
most of its key commodities
have been placed at levels ap-
preciably below 1956 achievement.
To build essential new capacity
where it is most needed, 30 per-
cent of the increase in capital
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
outlays is to be directed to-
ward the coal and metallurgical
industries.
The large increase in
.equipment outlays embodied in
the 1957 plan is intended to
facilitate project completions
and the replacement of obsolete
equipment. To increase incen-
tives, housing construction is
to be considerably expanded,
retail trade increased at a
rate greater than in 1956, and
disposable income raised through
higher minimum wages, reduction
in the size of the compulsory
loan, higher pensions, tax re-
lief, and wage-scale revisions.
The proposals for administrative
reorganization already discussed
are designed to increase manage-
ment's contribution to efficien-
cy.
Although this program may
to some degree lay the ground-
work for a resumption of high
growth rates, there is small
chance that it will ensure a
resumption of rates high enough
to achieve original 1960 tar-
gets. Assuming that performance
in 1957 just matches the plan,
industrial output in 1958-60
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5r:i-rz~?r
will. have to grow at an average
rate 30-percent greater than
that for 1956-57. Output of
iron and steel in the final
three years will have to in-
crea.se at a rate 50-percent
more than that of the first two
years, while thatof cement will
have to double the 1956-57
performance rate.
It is highly unlikely that
enough new capacity can be con-
structed in these industries
in time to permit such improve-
ments. The high priorities of
agriculture and housing dictated
by the requirement to increase
worker incentives and-thereby
maintain rapid industrial pro-
ductivity growth will continue,
and will still limit resources
available to industrial con-
struction. Toward the end of
the plan period, capacity short-
ages may be replaced by labor
shortages as the impact of the
low birth rates of the war years
is felt. Though the reorgani-
zation proposals should result
in some improvement in efficien-
cy, they will not materially
improve the prospects of the
1960 goals being reached.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
NEO-STALINISM IN HUNGARY
The Hungarian regime's
continuing struggle to reassert
control over the overwhelmingly
Hostile population has been ac-
companied by an accelerating
return to the Stalinist methods
of political repression. The
promises to avoid the mistakes
and excesses of the past occur
with decreasing frequency, while
justifications for the over-all
harsh line are presented in
ideological terms. Although
adjusted to more liberal eco-
nomic concepts, the Hungarian
and the Soviet leaders apparent-
ly foresee no practicable alter-
natives to an all-encompassing
reliance on mass intimidation
and strict adherence to the
orthodox line of a "proletarian
dictatorship."
Rebuilding the Party
During the revolution, the
Hungarian Workers (Communist)
Party virtually disintegrated--
the legacy of three years of
confusion, belated concessions
and "socialist legality." Thus,
on 4 November, when the present
Hungarian Socialist Workers
Party was founded by Janos
Kadar, on behalf of the USSR,
it had few assets other than
the support of the Soviet army.
For the first two months of its
existence, the party appeared
to consist only of the leadership
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CURRENT INTELLIGENCE WEEKLY SUMMARI
2 May 1957
and a relatively small internal
security force. Its activities
centered almost entirely on the
problem of ending strikes and
eliminating armed opposition.
Its ideology was confused and
contradictory.
In January the regime be-
gan to concentrate on a clari-
fication of the party line.
Premier Kadar formally launched
this process by proclaiming the
restoration of the "proletarian
dictatorship." This coincided
with the 6 January communique
following the meeting of Soviet
and Satellite leaders in Buda-
pest which returned Hungary's
political relations with the
Soviet Union to the 20th party
congress basis.
. With only occasionallapses
in consistency, the regime has
since sought to re-establish
not only the prerevolutionary
situation but also, in much of
the political sphere, the meth-
ods and concepts of the Stalin-
ist period. Official sources
claim that the total membership
of the Hungarian Socialist
Workers Party now exceeds an
impressive 260,000. This fig-
ure, if accurate, is probably
not an index of genuine strength
but the reflection of a hurried
and indiscriminate recruitment
campaign. Despite the party's
attacks on the unreliable mass
nature of its predecessor, prob-
ably more than half of the
present members are unreliable
or "politically immature."
Many are mere opportunists,
membershin name only, or persons
who have been forced to join,
Kadar has branded the re-
gime's postwar policlcs toward
the bourgeoisie as not repres-
sive enough; Minister of State
Marosan, the party archdema-
gogue, has declared that since
not enough fascists were hung
in Hungary after the "libera-
tion" in 1945, they had better
be hung in 1957; and the party
press has charged the Rakosi
regime with overly lenient:
treatment of party liberals.
Soviet-Hungarian Parallel
The treatment of Rakosi
himself--now in Moscow--has
become almost identical. to that,
accorded Stalin in the USSR.
Parry leaders have recently as-
serted that Rakosi's achieve-
ments should not be berated
merely because he made some mis-
takes; and that there is no
such thing as "Rakosiism"--or
Sta]'.inism--since these are only
errors committed by individuals..
This parallel between the
Soviet and Hungarian lines may
have been the result of a uni-
lateral Soviet decision, to
which Kadar and some of his
colleagues--who bear no love
for Rakosi--have reluctantly
acquiesced. On the other hand
it may reflect. a jointrealiza-
tiocL that the attempt to build
a middle-of-the-road following
by condemning Rakosi as a symbol
of the Muscovite left and Nagy
a symbol of the nationalist
right was neither attracting
adherents nor reducing popular
hostility.
Josef Revai, a former too
Communist theoretician who fled
to Moscow during the revolution,
expressed hard-line convictions
in early March when he returned
to Hungary. In an article ap-
pearing in the party daily, he
served notice that unless the
new party abandoned certain
Nagyist tendencies, he and
others like him would not sup-
port it.
Although Revai's article
stirred up a major controversy,
his general emphasis on an un-
compromising approach has since
been given the blessings of both
Premier Kadar and Soviet premier
Bulganin. The way is now clear
for the Revais--not excluding
members of the Rakosi clique
still in the Soviet Union--to
endorse the party and to work
with the Kadar group in "good
conscience." Lower-level
doctrinaires are already heav-
ily represented in the government
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
apparatus and probably within
local party organizations as
well.
Some members of the party
who came in with Kadar are
distinctly unhappy about these
developments and have said so
more or less openly. Their re-
sponse to the Revai article re-
vealed that at least latent
factionalism--similar in micro-
cosm to the '"bards" versus the
"lofts" controversy prior to
the revolution--still exists
within the Hungarian party.
Thus, Kadar's acceptance of the
doctrinaires may have added to
the strength of his party, but
at the cost of losing the whole-
hearted support of those who
joined Kadar because they ad-
mired his anti-Rakosi past.
Implementation of Policy
The Hungarian regime has
adopted the standard totalitar-
ian techniques of handling pop-
ular opposition. Arrests, de-
portations and executions have
been used as weapons against
key figures and groups. Intim-
idation--through security con-
trols, political pressures,
threats and psychological war-
fare--underlies virtually all
policy. It is the regime's
apparent intention eventually
to force the people into at
least grudging co-operation
with its program and to replace
revolutionary spirit with gen-
eral resignation.
Official pronouncements
show progressively less concern
for maintaining even a facade
of enlightenment. When the re-
gime decreed the formation of
a new secret police force in
early January, for example, it
assured the people that the
"arbitrary acts of the past will
not recur" and that the police
would be controlled by the
"courts of law." A few days
later, however, the regime is-
sued a blast at these same
courts for their ""intolerable
liberalism" and purged a number
of state prosecutors and judges,
thus scarcely concealing its
attempt to guarantee police con-
trol of the courts. Popular
hatred of the AVH (security
police), once openly admitted,
is now ignored, and acts of the
AVH during the revolution have
recently been glorified in the
press.
The campaigns against the
various segments of society also
illustrate the regime's neo-
Stalinist techniques. Individ-
ual factory workers' councils--
established throughout the coun-
try during the revolution--
retain a legal existence of
sorts. In order to render them
impotent and perhaps eventually
abolish them, however, the re-
gime has moved against them in
piecemeal fashion, not unlike
the moves against non-Communist
political parties after the war.
Action has been taken
against the troublesome intel-
lectuals, suspending the activi-
ties of the writers' union in
mid--January and arresting a
number of the more prominent
members; those who continue to
write are told to reinstate the
values of "socialist realism."
Other professional groups have
also been dissolved and new
groups have been founded along
the lines of those existing
during the Rakosi era. The re-
gimE! has dealt harshly with
the churches and the schools,
hoping to reassert its control
over religion and restore the
old standards of Communist
educational theory. The party
also has announced its intention
to play a greater role than ever
before in the military forces.
The moderate policies of
the post-Rakosi period have
been applied consistently only
in the economic sphere, to sus-
tain popular hopes for a better
living. Political bribery--
attempts to convert the popula-
tion through concessions--has
been abandoned as unworkable and
dangerous; the occasional
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
promises of enlightenment and
legality appear to reflect an
attempt to keep the opposition
off balance rather than win it
over.
The party line on the rev-
olution must accommodate con-
tradictory propaganda goals.
On the one hand, the regime ap-
parently has found it useful
to call attention to the revo-
lution by alluding to its eco-
nomic consequences and to the
evil deeds and strength of the
"counterrevolutionaries." Con-
versely, it hopes in the long
run to erase from the popular
mind the significance of the
revolution. It is trying to
remove the physical reminders
of the fighting and, at the
same time, to resume conven-
tional Communist propaganda
technique and content, almost
as if the interruption of last
fall never had taken place.
The USSR, through the im-
position of neo- Stalinism, has
Nationalist China's armed
forces continued to improve dur-
ing 1956 and have reached a new
high in military efficiency.
Improvement can be expected to
continue, but at a slower pace,
as present plans for the build-up
of forces near completion. The
Nationalist forces, while having
a fairly high degree of initial
combat-readiness, are not, by
American standards, fully ready
for sustained combat. Morale
and leadership are believed to
be reasonably satisfactory, but
maintenance of the present
level-of combat capability and
the will to fight will be in-
creasingly difficult as the
Nationalist: leadership's goal of
a return to the mainland fades
as a. realistic objective.
in one sense solved its Hun-
garian problem. With bayonets
as the ultimate determinant,
Hungary--with the help of the
local party, weak as it is--is
not likely again to become a
major strategic threat to the
Communist world. But Hungary
under bayonets alone would be
a political and economic lia-
bility. The Soviet Union,
therefore, probably hopes with
time to reduce the dependence
on mere force and to transform
the Hungarian party into an
effective instrument.
It may well envisage a
Communist Hungary patterned
after present-day Czechoslovakia,
where political pressure and
repression is constant, but
not extreme, and where most of
the people, regardless of their
basic antagonisms, have ap-
parently learned to live with--
and work for--the Communist
regime.
. Capabilities
The Chinese Nationalists
are not believed capable of
defending Taiwan and the Pes-
cadores Islands against a
determined Communist attack
without American air, naval,
and logistical support. The
offshore islands of Quemoy and
Matsu are particularly vulner-
able to an air and sea blockade.
Nationalist offensive capa-
bilities are limited. Despite
their recent boasts, the Na-
tionalists could not, in the
absence of revolt on the main-
land, maintain a beachhead on
the China coast. The navy might
successfully land approximately
24,000 men, provided the element
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
of surprise were present and
adequate air support available,
and it might be able to shuttle
70,000 more troops from the
Quemoy Islands to the landing
area. If air-borne'troops.were
also used, as many as 100,000
men, might reach the mainland
near the Quemoys. These forces,
however, would not outnumber
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
Chinese Communist forces in the
immediate area nor match them
in firepower.
The Nationalists have the
capability to launch commando-
type operations of up to regi-
mental size against the mainland.
They can and do stage an occa-
sional naval bombardment of a
shore targ;:t, and they could
launch a sizable air strike
within the range limitations of
their jet fighter bombers.
The Nationalists have at-
tempted very few ground recon-
naissanceraids during the last
year, however. The last assault
in strength was in July 1953 and
ended with heavy casualties and
unattained objectives.
By American standards, the
Chinese Nationalist armed forces
are not fully ready for sus-
tained combat; they are, however,
more ready than ever before.
Officials have insisted since
last December tflac military prep-
arations are complete for the
promised "return to the main-
land."
Great progress has been
made since the arrival of the
first American Military Assist-
ance and Advisory Group (MAAG)
team in 1951. The armed forces
have been completely rearmed
and reorganized along American
lines, units unsupported by
American aid have gradually been
abolished or transferred to
paramilitary organizations, and
American military doctrine is
gradually'winning acceptance.
Several noteworthy achieve-
ments were registered in the
past 18 months. Two corps-
level army maneuvers demon-
strated that higher-level mil-
itary commanders have begun to
master the art of utilizing
large units in a modern sense.
In September the navy and marines
massed 12,000 troops and 53 ships
and carried out a reasonably
successful division-size landing
exercise, setting the stage for
larger operations now being
planned.
The navy, once regarded as
the most backward of the three
services,iias now completed a
reorganization begun in 1955.
This has resulted in a general
over-all improvement of adminis-
trative and operational effi-
ciency. In addition, the navy
has vastly increased its de-
liveries of supplies for the off-
shore islands while rotating
five of the six army divisions
stationed on the Quemoys. An
observer has commented that its
most bitter critics are willing
to admit that more imp=,ovement
took place in 1956 than in any
previous year.
The air force has virtually
completed transition flight
training from piston fighters
to its new F-86F jets. Progress
has been slow, however, and
several serious accidents appear
to :indicate that more instru-
ment training is needed. Never-
theless, in a series of engage-
ments in July 1956, Nationalist
flyers shot down two Communist
MIG--15's and damaged others,
demonstrating their ability to
meet their enemies on a man-to-
man basis on even or better
terms.
Within the next year almost
all of the equipment scheduled
for the initial build-up of the
forces as envisaged in the 1950-
51 mutual defense assistance
plan will have been delivered
from the United States. Most
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CURRENT INTELLIGENCE WEEKLY SUMMARY
2 May 1957
combat equipment is in service
now. However, the air force
lacks some aircraft; the navy,
electronic equipment; and the
army, new signal equipment and
transport vehicles., There is
no plan to provide American
support for additional combat
units.
Many deficiencies continue
to exist in the armed forces.
Logistical training needs im-
provement; combined arms train-
ing is weak; personnel manage-
ment procedures, although im-
proved, need refinement; and
American military doctrine is
not fully accepted, particularly
at higher command levels.
Leadership and Morale
In terms of military hard-
ware and the ability to use it
on an individual basis, the
Nationalist armed forces are
quite capable and are still im-
proving. The most serious
weaknesses appear in their lead-
ership.
Although most observers
agree that the commanders of
the individual services are
capable, Chiang Kai-shek's main.
criterion when promoting an of-
ficer is still personal loyalty
rather than professional com-
petency. Several officers, be-
lieved by American advisers to
be among the best in the serv-
ices, have been given important
command positions recently.
Others, however, are of the
"war lord" type, who either
cannot or will not understand
modern equipment and methods.
In addition, Chiang's prac-
tice has been and still is'to
interfere directly with command
functions without regard to nor-
mal channels, although this
practice is becoming less fre-
quent. Centralization of com-
mand at the highest level, with
little delegation of authority,
continues to hamper the develop-
merit of initiative and willing-
ness to accept responsibility
on the. part of commanders at
all, levels. This deficiency,
if allowed to continue, will
limit the combat effectiveness
of the services in any future
military operations.
The morale of the Chinese
Nationalist armed forces is
good,in the opinion of most ob-
servers. The number of defec-
tions to the Communists is not
known accurately but is believed
to be small.
The Nationalists themselves
are worried over the increasing
proportion of native Taiwanese
in the armed forces; they con-
stitute at present about 28
percent of.the enlisted strength
of the army. They fear these
young men, while anti-Communist,
are not motivated by the same
desire as the mainland soldier
to reconquer the mainland, and
that, as time passes and more
Taiwanese enter the services,
the desire for a counterattack
will diminish. As a result,
they have stepped up the politi-
cal training of the Taiwanese
in an effort to develop a genu-
ine enthusiasm for the National-
ist cause. Whether this will
succeed, however, is questionable.
Future Prospects
Improvement in the combat
capability of the Chinese Na-
tionalist armed forces will con-
tinue to grow in the next year
or two, although at a slower
rate than in the past. Increas-
ingly, the leaders' problem
will shift from efforts to im-
prove to efforts to maintain
proficiency and the will to
fight. This will be difficult
as :Long as the present military
and political stalemate contin-
ues and the government's objec-
tive of a return to the main-
land fades as a realistic goal.
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