CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001300020001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 45
• Document Creation Date: December 16, 2016
• Document Release Date: February 4, 2005
• Sequence Number: 1
• Publication Date: June 6, 1957
• Content Type: SUMMARY

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/f
CONFI~
(CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY N0. 17
OCR NQ, 3056/57
6 June 1957
f7000MENT NO.
NQ CHANGE tN CLASS. ^
^ DECI.ASSiElEt3
CLASS. CHAtd3Ek~ T
NEXT REVIEW *JI+TE:
A~iTH: HR 70.2
pp~E; REVIEtiNER:
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DIA and DOS review(s)
completed.
CONFIDENTIAL
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THIS MATERIAL CONTAINS INFOFMATION 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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OF IMMEDIATE INTEREST
WEST EUROPEAN OFFICIAL REACTION TO THE DISARMAMENT TALES Page 1
Western European nations have shown new fears that
the US may reach a bilateral agreement with the Soviet
Union on disarmament. They profess to believe that re-
cent American discanssions with the Soviet delegation to
the London talks 9?violatet? their insistence on prior,
continuing, and complete consultation. Several fear
that establishment of a European inspection zone might
prejudice-their security, and Bonn fears that Moscow
would insist that the East German government take part
in any treaty involving Europe.
PRESSURE FOR REVISING COCOM . Page 2
Britain?s decision to relax controls on trade with
Communist China has strengthened the likelihood of an
early movement to narrow the scope of COCOM controls on
trade with the Soviet bloc. Sentiment favoring such a
change- has been evident in COCOM for over a year, and
gains strength from the desire of West European busi-
ness interests to improve their competitive position.
Domestic political and economic considerations may lead
the British government to spearhead such changes.
USSR AND YUGOSLAVIA MOVE TO RESTORE TIES Page 3
Moscow and Belgrad+~ are both issuing strong declara-
tions of intent to develop friendlier relations .although
each is reaffirming its ideological position and appar-
ently testin out the other to see if it will make an
concessions.
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MIDDLE EAST DEVEIAPMENTS -Page 4
At least two vessels: probably under Israeli cha~c-
ter have transitted the Suez Canal in the last two weeks,
but Egypt has not changed its opposition to passage of an
Israeli-flag ship. The Israeli-flag freighter Atlit, en
route from Haifa. to Eilat via the Cape of Good Hope, is
due to arrive in the Gulf of Aqaba. about 9 June. The
Arabs apparently do not want to risk hostilities with Is-
rael at this time by offering overt military opposition
to the vessel's passage through the Strait of Tiran.
In Lebanon, the political crisis, which was high-
lighted by riots on 30 May, has been eased by the gov-
ernment's appointment of two new cabinet members to sit
on a committee to judge election disputes--a concession
to the opposition.
In Syria, moderate and right-wing deputies have
threatened to resign from parliament, ostensibly because
of a Communist deputy's charge that they were serving
"imperialism." Such resignations would result in
strengthened leftist control of the legislature and the
government.
CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II
NOTES AND COMMENTS
ADENAUER GRAPPLES WITH DISARMAMENT AS ELECTORAL ISSUE Page 1
With the September Bundestag elections~in mind, Chan-
cellor Adenauer has been trying to convince the West Ger-
man public that the disarmament plans he discussed in the
United States will not prejudice German unification. While
the chancellor has met some criticism, the German public
has evidently been reassured that the link between unifica-
tion a.nd a general disarmament agreement has been preserved.
Moreover, the public shows greater readiness than Adeaauer
to consider a. European inspection zone as a first step
without immediate progress on German reunification.
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INTERNATIONAL COMMUNIST FRONTS? DRIVE
AGAINST NUCLEAR TESTS . . . . Page 2
International Communist fronts headed by the World
Peace Council (WPC) have initiated a world-wide mass
propaganda movement in support of the USSR's position
against nuclear tests. The WPC plenary session at Co-
lombo from 10 to 16 June, to be attended by over 500
delegates from 74 countries, will kick off a drive to
implement the WPC Berlin a cal of A ril which called
for an "atomic truce."
KHRUSHCHEV'S TELEVISION INTERVIEW Page 2
In his interview with American correspondents broad-
cast on 2 June over an American television and radio netr
work, Khrushchev repeated established Soviet positions on
a wide range of international issues. As in his 10 Maq
interview with a New York Times executive, the Soviet
party chief coupled protestations of the USSR!s desire
for normal and friendly rel ations with the United States
with expressions of suspicion of American intentions. In
broadcasting the text of the interview to the Soviet pub-
lic, the Moscow radio omitted Khrushchev's denial that
any "contradictions" existed between the masses and the
leaders in the USSR, the sole omission from an otherwise
complete text.
PROSPECTS OF THE ZOLI CABINET . . . Page 3
The Italian Sena.te's confirmation of Premier Zoli
on 4 June will probably shortly be followed by similar
action in the Chamber of Deputies. Zoli's announced pro-
gram indicates that he does not plan merely to mark time
in anticipation of new elections. Lacking a parliamen-
tary majority, however, he will be dependent on uncertain
support outside his own Christian Democratic Party.
FRENCH POLITICAL CRISIS Page
The pressure of Fra.nce's financial and Algerian prob-
lems continues to mount as the search for a premier draws
to the end of its third week. The Socialists' refusal to
back Pflimlin or to undertake a new government themselves
suggests that the crisis will not come to an end soon.
President Coty ha.s now placed his hopes on the ability of
outgoing defense minister Botarges-Maunoury's Radical Party
to straddle ma or arty differences as it has in the past.
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CURRENT INTELLIGENCE 1~EEKLY SUMMARY
EFFORTS TO IMPROVE TUNISIAN-FRENCH RELATIONS FAIL Page 5
New clashes between French and Tunisian forces in
Tunisia have created additional tension between Tunis
and Paris, and Premier Bourghiba has renewed his demand
for negotiations on the evacuation of 33,000 French
troops from Tunisia. The Tunisian government has pub-
lished four decress which move the country toward eco-
nomic sovereignty, but Bourghiba has not yet received
specific offers of financial aid from any source.
CYPRUS . . Page 6
A renewal of violence on Cyprus seems likely in
view of the stalemate over the next step toward a so-
lution of the problem. London recently rejected Arch-
bishop Makarios' request for bilateral discussions, and
propaganda activities have been stepped up by EOKA's
political branch b the Greek-Cypriot press, and by
Athens radio.
CRACKDOIVN ON OPPOSITION LEADERS IN SPAIN Page ?
Recent arrests of Spanish Catholic and Monarchist
leaders. on charges of conspiring with exile groups to
overthrow Franco suggest that the Spanish government
will continue to resist demands for a liberalization of
its fnternai policy. The crackdown is likely to aggra-
vate discontent among Franco's pro-Monarchist support-
KISHI'S ASIAN TOUR Page S
Prime Minister Kishi of Japan has declared that his
recently completed six-nation Asian tour was a victory
for Japan's "diplomacy for peace," but Japanese observers
doubt that any remarkable results were achieved by the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
6 June 1957
DJAKARTA MOVES TO ASSERT CONTROL IN EAST INDONESIA Page 9
The Indonesian government has again seized the initi-
ative in the see-saw relationship with the disaffected
provinces and is concentrating its principal efforts in
East Indonesia
e as n ones an pro em is so di fi-
cu t a o avoid a "complete breakdown,^ the government
must move "slowly and with discretion."
CABINET CRISIS IN LAOS . . . . . Page 11
Deputy Premier Katay, leader of the Nationalist Party,
the largest in Laos, has been chosen to form a new govern-
ment, and prospects are fairly good that he will succeed.
Katay is apparently assured of support from the Independ-
ent Party, the second largest in the National Assembly;
and the small Democratic Party ma.y also loin to form a
strong anti-Communist coalition.
INDIAN FOREIGN E%CHANGE CRISIS . . . Page 11
India's foreign exchange reserves, which have de-
clined by over one third in the last 14 months despite
stringent control measures, leave an insufficient amount
for foreign trade operations above .the legal minimum for
currency backing. Since the Indian government is deter-
mined to import the industrial goods needed to fulfill the
Second Five-Year Plan, it probably will be willing to
risk its reputation for financial stability by reducing
the foreign exchange reserves legally required as cur-
rency backing. This will be only a stop-gap measure,
however, and India probably will seek large-scale finan-
cial assistance from the United States in the near future.
EAST GERMANY'S ECONOMIC PROBLEMS . . Page 12
East Germany's economic plan for 1957 calls for an
increase in industrial production of only 6 percent.
This goal represents a further contraction of the rate of
economic growth which has been declining since 195., and
it indicates that most of the economic problems which
have caused serious disagreements among East German of-
ficials will remain unsolved during 1957. The growth of
the raw materials and fuel base has lagged far behind in-
dustrial development, and the regime?s plan to concentrate
investment in these industries will again forestall any
real im rovement in supplies for the consumer.
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SOVIET AGRICULTURAL CHANGES Page 13
Now that the Soviet industrial reorganization pro-
gram has been launched, Khrushchev has again turned his
attention to agriculture. He has tried to spur the pro-
duction of agricultural consumer goods, particularly meat,
wool and dairy products, and has announced that compulsory
deliveries of produce from private plots will be abolished
in 1958 in order to create a "better political atmosphere'!
in farm areas.
FATTERNS AND PERSPECTIVES
REPERCUSSIONS OF BRITAIN'S ACTION ON CHINA TRADE
CONTROLS Page 1
Britain's abandonment of the China differential in
strategic trade controls appears likely to be followed
in the near future by similar action throughout most
of the free world. Nationalist China regards Britain's
step as a serious blow to its international position.
The volume of Peiping's trade is not eupected to rise
significantly as a. result of the easing of controls
but the commodity composition may change.
FACTIONS IN THE POLISH COIdMUNIST PARTY Page 3
The factional struggle in the Polish United Workers'
(.Communist) Party has persisted for more than a year, and
continues following the bitter debates of the ninth cen-
tral committee plenum in lday. The plenum reflected a far-
reaching reversal for the Natolin group of anti-Gomulka
Stalinists, who made it clear, however, that they look to
the party congress this December as the main battleground
for control of the Polish party. Gomulka continues to
appeal to the mass of party functionaries for support.
He has warned extremists of both left and right that
they will be expelled from the party if they persist in
their heretical or disruptive activities. His success in
the plenum debates against the Natolin group puts him in
a.
trong position for the December congress.
s
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CURRENT INTELLIGENCE IYEEKLY SUMMARY
6 June 1957
FRANCE PLANS TO EXPLOIT OIL IN THE SAHARA Page 9
France has embarked on an ambitious oil exploitation
program in the Sahara in the hope of reducing its depend-
ence on Middle Eastern oil. The French anticipate limited
production by early 1958, with the area making a sub-
stantial contribution by 1960. The cost of the program
presents considerable difficulties to the French govern-
ment, which is already overcommitted financially. In any
case, before France can get the full benefits of Saharan
oil, it must reach some working agreement with the Al-
gerians as well as with the Libyan and Tunisian govern-
ments.
THE WITHERING A1NAY OF.THE:..MyD. ... Page 12
The once powerful USSR Ministry of .Internal Affairs,
(MVD) is continuing to lose many of its functions to
other central ministries and to union republics. The
process began with the separation of the secret police,
now called the KGB, from the MVD in Ma.rcb 1954. The
decentralization of the civil police (militia) and the
reorganization of the penal system are the latest de-
velopments in this trend. The remaining MVD functions,
.including responsibility for archives, geodesy, cartog-
raphy, border troops, and civil defense, could readily
be disposed among other central and local administrative
agencies, and the MVD dissolved. Such a step would
have propaganda advantages and would be in accord with
the policy of decentralizing Soviet government agencies
and increasing the administrative responsibilities of
republic and local governments.
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CONFIDENTIAL
6 June 1957
OF IMMEDIATE INTEREST
Western European nations
have shown new fear that the
United States may reach a bi-
lateral agreement with the So-
viet Union on disarmament. They
profess to believe that recent
American discussions with the
Soviet delegation to the London
talks "violate"'.their insistence
on prior, continuing, and com-
plete consultation. Several
fear that establishment of a
European inspection zone might
prejudice their security, and
Bonn fears that Moscow would
insist that the East German gov-
ernment take part in any treaty
involving Europe.
The disarmament talks have
been recessed until 11 June,
while the four Western delega-
tions examine the informal Ameri-
can paper of 31 May. Several
Western European officials have
expressed annoyance that this
paper was placed in the Soviet,
delegate's hands before "thor-
ough" Western consultation.
French delegate Moch spoke of
the trouble this procedure had
caused in Paris, and implied,
that it would add to the dif-
ficulties of maintaining West-
ern unity. The British dele-
gate has also spoken of London's
dismay, and the Dutch Foreign
Ministry has reported a "rumor"
that the United States is about
to make a deal behind NATO's
back.
Meanwhile, NATO Secretary
General Spank is trying to set
up new procedures to promote
continuation of effective con-
sultation. He has proposed, for
example, that a member of the
NATO Secretariat, "when ap-
propriate," be sent to London
to 'sit in on meetings of the
four Western subcommittee mem-
bers.
Both inside and outside the
North Atlantic Council, doubts
about the working of a European
inspection zone have been ex-
pressed. The .Norwegian NAC rep-
resentative said he was unhappy
that the US proposal included
"all of Scandinavia" and "little
or nothing" of the USSR. The
Italian representative asked
that each individual country
inspected have the right to in-
spect an equivalent area on the
other sides Suggestions have
appeared in the French press
that justice would require the
inspection of nine square miles
of Soviet territory for every
one square mile of Western
nations.
The West German government
has offered serious reservations
regarding a European inspection
zone. Wilhelm Greve, chief of
the Political Department in the
Foreign Ministry, recently told
the American chargd that he
believed the USSR would insist
that the East German government
take part in a multilateral
treaty necessary to establish
such a zone. Greve added that
Bonn hoped the United States,
in initial talks with the USSR,
would not go beyond discussing
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,aerial inspection of the Arctic
regions.
Canada has reacted favora-
bly to having its Arctic regions
included in the first-step in-
spection. External Affairs
Minister Pearson, in the final
stages of the general election
campaign, has publicly endorsed
this idea. A Canadian memo
given the US delegation in
London nevertheless expresses
doubt that the USSR will be in-
terested in the separation of
an Arctic inspection zone from
the Euro can zone.
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Britain's decision to re-
lax controls on trade with Com-
munist China has strengthened
the likelihood of an early
movement to narrow the scope
of COCOM controls on trade with
the Soviet bloc. Sentiment
favoring such a change has
been evident in COCOh~ for over
a year, and gains strength from
the desire of West European
business interests to improve
their competitive position.
Domestic political and ecenomic
considerations may lead the
British government to spearhead
such changes.
1'he American embassy in
London on 4 June reported its
belief that Britain will make
proposals for a relaxation of
the COCOM controls "in the not
too distant future." In response
to parliamentary questions in-
dicating growing pressure, the
government informed Parliament
on 4 June that it would not
move unilaterally on this issue,
and that, it would not now "feel
justified" in resorting to some
form of exceptions procedure to
bring about relaxation of the
COCOM controls.
In the pas t, the British
have taken the position that
revision of the COCOM system is
necessary because of the inequi-
ties and difficulties of admin-
istering the present system.
Essentially, they have previously
suggested a revision of the
COCOM lists so as to limit re-
strictions to items affecting
Soviet thereto-nuclear capabili-
ties.
Past attitudes suggest that
all COCOM governments would wish
to reconsider their policies
toward COCOM in the event of
pressure from any member for a
revision. A considerable body
of opinion holds that greater
trade contact with the European
Satellites would facilitate
loosening of their bonds with
the USSR. Widespread interest
exists, too, in the possible
benefits of increased trade with
the Soviet bloc in items pres-
ently controlled.
France, in particular, would
welcome a British lead to revise
the controls, although a French
Foreign Ministry spokesman in-
dicated on 5 June that a move
toward reduction of COCOM con-
trols would be premature at this
time. He said Paris plans in
the near future to introduce a
proposal to bring more flexibility
into the control system through
annual review of the commodities
list.
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USSR AND YUGOSLAVIA MOVE TO RESTORE TIES
Moscow and Belgrade are
both issuing strong declarations
of intent to develop friendlier
relationsD although each is re-
affirming its ideological poai-
tion and apparently testing out
the other to see if it will make
any concessions.. 'The USSR is
reported'to have instructed the
Satellite parties that they
should again develop closer
relations with Yugoslavia.
The Soviet leaders prob-
ably... feel that national Commu-
nist pressures in Eastern Europe
are sufficiently in check to
warrant a more moderate attitude
toward Tito, which in turn would
allow them to concentrate on
presenting a peaceful coexi~t-
ence front to the outside world.
It is also possible that Moscow
has been influenced by the
Chinese, who umge that all Com-
munists co-operate with one
another, letting differences
eventually be resolved through
time and patient effomt.
Alluding to the anniversar
of the Soviet-Yugoslav comm-
unique signed two years ago at
the end of the ghrushchev-Bul-
ganin trip to Belgrade, the
Moscow press and radio have ex-
tolled the friendship between
the two countries and pointed
to their common foreign policy
position. At the same time,
Pravda has said that the friend-
ship between the two countries
must '?be impregnated with the
spirit of proletarian inter-
nationalism"--a euphemism the
Yugoslavs usually have inter-
preted as indicating that the
USSR wants Yugoslavia to be a
subservient member of the `'soc-
ialist camp headed by the USSR.
Moscow radio stated that the
Pravda has returned to
the o~iet line that only
the imperialists gain by any
dispute between the two coon-
tries, and warned Yugoslavia
of the dangems of relations
with bourgeois countries,
where the '4wolf law`? applies --
the strong ?ppressing the weak.
This last will probably not go
over well in Belgrade, where
Marshal Tito only last week
praised his melations with the
capitalist states, noting that
they did not endanger Yugoslav
??socialism.??
The Yugoslav press has
also called fo~? better relations,
but stressed the fact that the
Belgrade declamation issued two
years ago was lbased on ''active
coexistence9?? a principle which
at the height of the ideological
argumemmts last winter was said
by Moscow to be inapplicable to
relations between socialist
states. Belgrade makes no men-
tion of proletarian internation-
alism and emphasizes the fact
that the Yugoslav concept of
differing roads to socialism
should apply to all Communist
countries, not just the USSR
and Yugoslavia,
The Yugoslavs apparently
believe that their relations
with the S?viet blo w -
rove .
Tito is no long-
er in a rem ~n?s deep freeze
is found in the visit to Belgrade
of Czech premier Siroky, sched-
uled for the end of .Tune . Siroky
will be the first high Soviet
further development of relations
depends on what policy Yugoslavia
will pursue.
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6 June 1957
bloc official to come to Yugo-
slavia since last October.
The Yugoslavs have indi-
cated they will soon test Mos-
cow's willingness to have friend-
ly relations "despite ideolog-
ical differences" by pressing
for reinstitution of "postponed"
Soviet credits negotiated in
1956 for an aluminum combine
and a nitro en fertilizer plant.
Aqaba and Suez
At least two foreign-flag
vessels which were carxying or
have carried Israeli cargoes
and probably were under Israeli
charter have been permitted to
transit the Suez Canal in re-
cent weeks. The Israeli-flag
freighter Atlit, en route from
Haifa to Eilat via the Cape of
Good Hope, is expected to arrive
in the Gulf of Aqaba .about 9
June. At least four foreign-
flag vessels. are also expected
to call at Eilat this month.
Syria
The "resignations" of
Populist Party leader Rushdi
Kekhya and 48 other moderate
and conservative deputies,
ostensibly because Communist
deputy Ba.khdash had accused them
of serving "imperialist" in-
terests, was evidently a planned
move to show up the government's
high-handed tactics, In theory,
if sufficient moderate and con-
servative deputies resign from
the 142-man legislature, the
resulting inability to convene
a quorum would cause the leftist-
dominated cabinet to resign.
Failure of the legislature
to accept Kekhya's and his sup-
porters' resignations suggests
that the maneuver will not
succeed. Kekhya's move appears
tactically unsound, moreover,
since the cabinet might elect
to dissolve the legislature.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Under Syria's martial law, the
moderates wodld hawe less influ-
ence outside of parliament than
within, and .the leftist-domi-
Hated gowernment would be even
less subject to opposition than
before.
Lebanon
The Lebanese po~.itical
crisis, which was brought on by
pre-election rioting in Beirut
on 30 May, has been eased by a
compromise between the govern-
ment and the opposition. Two
additional ministers without
portfolio have been appointed
to serve on `a committee of four
which will hear election com-
plaints.
Earlier, General Chehab,
commander of the Lebanese army
and main prop of the present
government, expressed concern
that the majority sought by
President Chamoun in the par-
liamentary elections ioeginn~ng
9 June would upset the delicate
balance between Christians and
Moslems and turn one group
against the other. He told the
American army attachd on 31 May
that the Moslems, regardless
of their real sentiments, would
be forced by present develop-
ments into an anti-Western posi-
tion and into the Egyptian-
3yrian-Communist camp, The
general therefore considered
that it was desirable for Cha-
moun to make some sort of com-
promise with opposition lead-
ers and give their candidates
a better chance in the elec-
bons.
General Chehab has warned
opposition leaders against
fomenting further trouble, and
is aware of Egyptian-Syrian
designs to provoke disorders
throughout Lebanon. The elec-
tions will be held as sched-
uled, beginning Sunday, 9 June,
and on succeeding Sundays in
June
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NOTES AND COMMENTS
ADENAUER GRAPPLES WITH DISARMAMENT AS ELECTORAL ISSUE
With the September Bundes-
tag elections in mind, Chancel-
for Adenauer has been trying to
convince West German public opin-
ion that the disarmament plans
he discussed in the United
States will not prejudice German
unification. While the Chancel-
lor has met some criticism that
"he adopted more of Washington's
political plans than Washington
adopted of his," the German
public has evidently been reas-
sured that the link. between
unification and a general dis-
armament agreement has been pre-
served.
Moreover the public shows
greater readiness than Adenauer
to consider a European inspec-
tion zone as a first step with-
out immediate progress on German
reunification. The Christian
Democratic Union (CDU) and many
independent commentators are
applauding the results of Ade-
nauer's Washington visit, which
they consider made it unmistak-
ably clear that the United
States wiews a general disarma-
ment agreement as unacceptable
without German unification.
They therefore believe that the
chancellor succeeded in his
major objective. Although the
opposition Social Democratic
Party (SPD) initially opposed
the 28 May Eisenhower-Adenauer
communiqud as meaning that a
Western-Soviet detente on the
basis of German partition was
being considered, prominent:
SPD leaders noW favor a L~iro-
pean inspection agreement which
they consider would be the moat
important step toward a detente.
Various independent German
commentators have explained
that President Eisenhower'.
refused to link German unifica-
tion with the first phase of
disarmament: because he desires
leeway in the conduct of the
London negotiations. Most influ-
ential independent papers are
coming to see a first step with-
out unification as inevitable,
and conducive to the mutual trust
which would eventually make the
German question easier to solve.
To allay the fears of German
voters who might not agree with
this optimistic point of view,
Adenauer has made several state-
ments to the press since his
Washington talks, elaborating his
ideas both of a "first-step"
agreement and a European inspec-
tion zone. Expecially in this
election year, he has to support
schemes to relax tensions, and
yet it would be disastrous for
the CDU to advocate any plan that
seemed likely to hinder German
unification.
Adenauer has tried, in the
first place, to deflate the ini-
tial inspection zone as an urgent
campaign issue by estimating that
negotiations with the USSR on
"this highly complex matters'
would take a long time--even
years. Second, he has indicated
that he did not believe the first
inspection zone would be in Eu-
rope. Third, allowing perhaps
for his own possible error, he
has stated his opposition to an
aerial inspection zone consisting
only of Germany, and has even
said that all of Europe would be
too small, categorizing it as
"only a fraction of a defense
belt." Adenauer and other Bonn
officials are Worried about the
problem of dealing with the East
German regime on inspection.
In view of the most recent
favorable evolution of German
opinion toward a European agree-
ment, however, Adenauer himself
is likely to take a more liberal
attitude toward such a possibi-
lity.
CONFIDEN ~ ~A~
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International Communist
fronts headed by the World
Peace Council (WPC) have ini-
tiated a world-wide mass prop-
agandal. movement in support of
the USSR's position against
nuclear tests. The WPC plenary
session at Colombo from 10 to
16 June, to be attended by over
500 delegates from 74 countries,
will kick off a drive to imple-
ment the WPC Berlin appeal of
April which called for an
"atomic truce."
The WPC effort is keyed to
Moscow's continuing propaganda
against nuclear tests. Radio
Moscow will inaugurate a series
of forum broadcasts in June on
its English-language interna-
tional service dealing with
prohibition of atomic testing.
WPC headquarters declared
in April that a truce on testing
"would give a breathing space,
making it possible to bring
about a total suspension of
tests and to make a start on the
abolition of hydrogen and atomic
weapons and disarmament." The
WPC says it wants to see
"throughout the world every sort
of movement and organization at
every level support our appeal."
It is not stressing uniformity
of approach but will let each
national movement decide the
forms of action. The WPC has
asked national committees to
"consider seriously" a signature
campaign, which it calls one of
the most effective propaganda
forms.
Other international Com-
munist fronts are lining up
behind the WPC effort. The In-
ternational Organization of
Journalists published a state-
ment in Prague the end of Maq
urging its membership, alleged
to be 60,000, to "display a
special sense of responsibility"
in protesting nuclear weapons
tests. An appeal along the same
lines from the chairman of the
Women's International Democratic
Federation was broadcast from
Moscow on 23 May.
The campaign will receive
added impetus from the Third
International Conference for the
Prohibition of Atomic and Hydro-
gen Weapons to be held in Tokyo
in August on the anniversary of
the Hiroshima blast. This con-
ference is an annual affair. It
claims to have no Communist
connections, although it was
originally inspired by the WPC.
Preparatory committees have been
set up in Japan and India and
are pressing for intense national
propaganda campaigns against
testing prior to the conference.
The Colombo session will be
the first the WPC has held in
Asia, where, according to the
WPC, "people have suffered most
from the effects of nuclear
tests." The WPC regards the
inclusion of Asia as most sig-
nificant in effectively develop-
ing a representative world move-
ment, and as a "sign of the
changing world." The Communist
world has found in nuclear
testing an issue upon which
Asian opinion is especially sen-
sitive and against which Asian
leaders have often declared
themselves.
In his interview with Amer-
ican correspondents broadcast
on 2 June over an American tele-
vision and radio network, Khru-
shchev repeated established
Soviet positions on a wide range
of international issues. As in
his 10 May interview with a
New York Times executive, the
~ie~par~y chief coupled
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-CURRENT-INTELLIGENCE ~KEERLY SUMMARY
protestations of the USSR's
desire for normal and friendly
relations with the US with ex-
pressions of suspicion of Amer-
ican intentions.
The Khrushchev interview
reflected the divergent pres-
sures and aims which shape Mos-
cow's attitude toward the
United States. The Soviet
leaders' desire to restore the
pre-Hungary atmosphere of in-
ternational detente was evident
in Rhrushchev's proposals for
normalizing Soviet-American
relations through increased
trade and cultural exchange
and his assurances of Moscow's
desire for friendly relations
based on peaceful coexistence.
On the other hand, efforts to
contain the centrifugal tend-
encies in Eastern Europe and
the world Communist movement
which threaten the USSR's pres-
tige and leadership impelled
Khrushchev to portray the
United States as an aggressive
power bent on policies which
could plunge the world into a
nuclear war.
On the question of European
security, Bhrushchev repeated
proposals he has made on several
occasions in the past six months
for a mutual withdrawal of
Soviet and American forces from
all foreign territories. This,
he said, would be a "useful
first step to test the good will
of the two sides."
On the question of disar-
mament, Bhrushchev stated that
"we are quite prepared to limit
ourselves to some small step,
instead of going after a com-
prehensive agreement at once."
He listed the steps the USSR
has taken to facilitate agree-
ment and complained that the
Western powers have refused to
take a "mutual step."
He said that, since the
United States insists on aerial
inspection, the USSR is ready
to come to an agreement on in-
spection, "but on definite
reciprocal terms," such as those
outlined in Soviet delegate
Zorin's 30 April proposals.: to
the Disarmament Subcommittee.
in London. This apparently
was intended as a reference to
the Soviet proposal to establish
"approximately equal" zones for
aerial inspection in the terri-
tory of the USSR and the conti-
nental United States, It map also
have been intended ~s a reply to
US suggestions that a start
might be made by setting up an
aerial inspection zone in Alaska,
parts of Siberia and Canada. In
this connection, Foreign Minis-
ter Gromyko stated on 1? May
that any exchange of aerial in-
spection would have to be on a
mile-for-mile basis and that
Moscow would permit aerial in-
spection of its territory only
if it received access to an
equal area of the United States.
Following the American broad-
cast of the interview, the text
was featured in the Soviet press
and on the radio. The sole omis-
sion from the "transcript" was
F~rushchev's denial that any
contradictions exist between the
masses and the leaders in the
Soviet Union.
The Italian Senate's con-
firmation of Premier Zoli on
4 June will probably shortly
be followed by similar action
in the Chamber of Deputies. The
support of the Monarchists in
the chamber will be sufficient
to give Zoli's cabinet final
confirmation.
Since Zoli's ma3ority in
the Senate did not depend on
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the votes of the nine neo-
Fascists, the threat of a left-
wing revolt in his own Christian
Democratic Party has apparently
subsided for the time being.
Some Christian Democratic ele-
ments, however, have been deeply
reluctant to have the party
govern with only right-wing
support, and Zoli's acceptance
of Monarchist backing is a~re-
versal of the stand taken by
the party congress of October "
1956.
Zoli's announcement on
29 May of a moderately left-of-
center program indicates that
he sees his government as having
more than a mere caretaker func-
tion. It is evident, however,
that he will have to rely on
ad hoc majorities for each
piece of legislation. Should
he fall in the near future;, the
next step would probably be an
attempt to reconstitute a coali-
tion of either three or four
center parties. In any case,
.there is increasing likelihood
that new elections will be held
before the June 1958 deadline.
The pressure of France's
financial and Algerian problems
continues to mount as the search
for a premier enters its third
week. The Socialists' refusal
to back Pflimlin or to undertake
a new government themselves sug-
gests that the crisis will not
come to an 'end soon. As on
past occasions, the impasse
has given rise to speculation
on the possibility of a non-
parliamentary solution.
The Socialist Party's de-
cision on 5 June to forego par-
ticipation in a Popular Repub-
lican-led government doomed the
cabinet-forming efforts of
Pierre Pflimlin, who had cut
himself off from rightist sup-
port by virtually committing
himself to follow Mollet's
social and economic program.
Radical Socialist Rene
Billere's refusal to undertake
the formation of a cabinet fol-
lowing Pflimlin's failure and
failure of a second appeal to
Mollet puts President Coty in
a particularly difficult situa-
tion. The present candidate,
outgoing Defense Minister
Bourges-Maunoury, is also a
Radical and Coty probably hopes
this party will be able to
straddle major party differences,
as it has in the past, and ob-
tain sufficient support or ab-
stentions to permit an investi-
ture. Such a solution would
tend to be shaky, however, since
the major parties could exploit
the Radicals' internal weaknesses
and bring down the government
without fear of raising the
strong antagonisms which have
prevented all efforts to date
to organize a viable coalition.
Meanwhile, the continuing
political dilemma has already
led to a' new flurry of rumors
that a military coup may be
attempted, particularly if`
things continue to go badly in
Algeria. The upsurge in vio-
lence there has evoked a sharp
reaction in Paris, where it
may encourage those who would
choose a forceful end to a pro-
longed cabinet crisis.
There
has also been some speculation
~~EC,R.~~''
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CURRENT INTELLIGENCE WEEKLY SUMMARY
that General de Gaulle may be
returned to power, and a Paris
newspaper has reported. that
President Coty may consult .the
general if the crisis lasts
another week or two.
Coup rumors are a normal
accompaniment of ~. French cabi-
net crisis, and there is no
indication that, barring a com-
plete political collapse, the
military would take over or
De Gaulle would be called by the
assembly. These rumors, to-
gether with the growing recog-
nition of the need for an early
shift in Algerian policy, may
make a compromise cabinet look
more attractive.
EFFORTS TO IMPROVE TUNISIAN-FRENCH RELATIONS FAIL
New clashes between French
and Tunisian forces in Tunisia
on 29 and 31 May and 3 June
have created additional tension
between Tunis and Paris. After
the 31 May clash, ib which sev-
en Tunisian soldiers were killed,
Tunisian premier Bourghiba re-
newed his demand of last July
for negotiations on the evacua-
tion of the 33,000 French
troops in Tunisia.
Although Paris has reluc-
tantly made some $4,000,000
available to the empty Tunisian
treasury and has allocated some
foreign exchange for Tunisian
imports, the "bad reaction" in
Paris to Bourghiba's speech on
2? May precluded a more generous
attitude on the part of Mollet's
caretaker government, which on
20 Maq had suspended the first
installment of a $34,500,000
loan. Bourghiba's speech, de-
signed to calm the anxiety of
the Tunisian population regard-
ing the suspension of French
credits, was restrained, but
Paris was angered by his. decla-
ration that Tunis "would broad-
en its economic and commercial
horizons and thus escape from
the French monopoly."
Bourghiba's French adviser
for economic affairs claims
that Tunis will not be hasty
in establishing a bank of issue
and does not intend to sever
connections with the French
franc zone. The finance minis-
ter expects that the unscram-
bling of Tunisian-French finan-
cial ties will be ~ lgng process.
Four economic decrees pub-
lished on 1 June indicate that
Tunisia is seeking economic
sovereignty as soon as possible.
They modify the customs code
established by the 1955 economic
convention with France; estab-
lish a commission to negotiate
trade agreements; set up a
fund to guarantee the transfer
of interest and dividends, an
apparent effort to attract non-
French capital; and establish
controls over property trans-
fers, possibly to hamper an
exodus of French property owners.
Bourghiba is not known to
have received specific offers
of either economic aid or ma-
teriel from abroad to equip his
small army and police forces,
from which France has withheld
supplies. Although the Soviet
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ambassador in Paris has in-
formed his Tunisian. colleague
that the USSR is prepared to
"give Tunisia anything it needs,"
Bourghiba has indicated that
acceptance of a Soviet offer
is "absolutel unthinkable."
25X1
A renewal of violence on
Cyprus seems likely in view of
the stalemate over the next
step toward a solution of the
problem. London recently re-
~ected Archbishop Makarios'
request for bilateral diseus-
sions, and propaganda activities
have been stepped up by EOKA's
political branch, by the Greek-
Cypriot press and by Athens
radio. Slogans demanding union
with Greece are reappearing on
walls in Cypriot towns and
student demonstrations have
resumed.
Britain still hopes an un-
derstanding can be reached with
Greece and Turkey on the future
status of Cyprus through the
good offices of NATO's Secre-
tary General Spaak. The Brit-
ish government plans to invite
representatives of the Cypriot
communities to discuss self-
government only after some in-
ternational understanding
through NATO is reached, al-
though Governor Harding has
been urging London to initiate
these discussions sooner. The
British continue to refuse to
recognize Makarios as the sole
Cypriot representative, and they
evidently hope his prestige will
diminish sufficiently for more
amenable Cypriots to demand
representation in any Greek
Cypriot delegation.
There are, however, no
signs of weakening of the ab-
solute faith and confidence in
Makarios of the Greek Cypriots
or of lessening of his prestige
in Greece. Makarios appears to
be concerned only over possible
threats to his leadership from
Cypriot extremists, including
EOKA chief Grivas. One of the
archbishop's closest confidants
told the American embassy in
Athens on 2 June that Makarios'
request to the British prime
minister was in response to the
pressure from Cyprus "to do
something." The Greek consul
general on Cyprus told the em-
bassy he is convinced EOKA will
resume violence if a Greek
Cypriot recently sentenced to
death for carrying firearms is
executed.
The British embassy in
Athens believes Makarios' re-
quest was intended to lay the
groundwork for a resumption of
violence by provoking an in-
transigent reply from London.
pro a y oes no ave e
capability of resuming violence
March.
on a large scale, it nevertheless
can probably carry on a more
restricted campaign, which would
restore the atmosphere and con-
ditions existing before the
suspension of operations last
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Recent arrests of Spanish
Catholic and Monarchist leaders
on charges of conspiring with
exile groups to overthrow Franco
suggest that the Spanish gov-
ernment will continue to resist
demands for a liberalization of
its internal policy. The crack-
down is likely to aggravate dis-
content among Franco's pro- Mon-
archist supporters
Most of the 26 persons re-
ported arrested late in May are
Monarchist in sympathies. Among
them are Francisco Herrera,
brother of the reform-minded
Bishop of Malaga and a self-
styled "Catholic republican,"
and Enrique Tierno Galvan and
Antonio Menchaca, leaders of
the republican-oriented anti-
regime Organization for the
Functional Unity of Europe,
They were charged with maintain-
ing relations with important
exiled "red elements" for sub-
versive action against the re-
gime.
The release pf Tierno Galvan
on 3 June suggests that the re-
gime is now less concerned over
immediate plotting than with
assuaging discontent among its
own Monarchist supporters at
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CURRENT INTELLIGENCE WEEKLY SUMMARY
6 June 1957
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KISHI'S ASIAN TOUR
Prime Minister Kishi of
Japan has declared that his re-
cently completed six-nation
Asian tour was a victory for
Japan's "diplomacy for peace,"
but Japanese observers doubt
that any remarkable results
were achieved by the tour. The
trip revealed differences of
opinion between Kishi and other
Asian leaders, particularly
Prime Minister Nehru of India,
which will make it difficult
for Kishi to represent himself
in forthcoming Washington talks
as the spokesman of Asia.
Kishi is the first postwar
Japanese premier to visit South
Asia. Although he was received
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cordially in Burma, India,
Pakistan, Ceylon, Thailand
and Taiwan, there was a general
lack of enthusiasm. He at-
tempted to attune himself to
the general themes of Asian
aspiration and succeeded in
gaining nearly unanimous agree-
ment on Asian co-operation in
the United Nations, on general
disarmament, and on the cessa-
tion of nuclear tests. On the
latter point, Nehru indicated
that Japan's demand for prior
registration of nuclear tests
as a fi'~st step to their total
prohibition was meaningless and
that efforts should be made for
an immediate, over-all ban.
Kishi judiciously attempted
to avoid discussion of potential
points of diff erence, but in
India and Pakistan was drawn out
on the subj act of diplomatic re-
lations and trade with Communist
China.
In general, there was
little support for the Asian
Development Fund which Japan
favors strongly. Kishi sought
to allay lingering suspicions
about Japanese militarism by
citing constitutional restric-
tions which prevent Japanese
participation in collective
security arrangements like
SEATO.
Observers in Tokyo agree
that the tour was successful
in establishing the groundwork
for better relations with indi-
vidual Asian nations. These
observers questioned, however,
whether the results of the trip
would strengthen Kishi's posi-
tion in Washington discussions.
They pointed out that Asian
solidarity does not exist, par-
ticularly on the methods for
maintaining peace, and said
Japan is playing an anomalous
role in assuring support to
Chiang Kai-shek of Nationalist
China, while at the same time
attempting to resolve rela-
tions with India, which favors
recognition of Peiping as
the sole government of China.
25X1
DJAKARTA MOVES TO ASSERT CONTROL IN EAST INDONESIA
The Indonesian government
has once again seized the in-
itiative in its see-saw rela-
tionship with the disaff acted
outlying provinces. It appears
to be concentrating more effort
in East Indonesia, in terms of
both direct negotiation and
intrigue, than in Sumatra,
where government attempts to
resume direct control have
reached an im ease. 25X1
the
East Indonesian problem is far
more difficult than originally
believed, and that to avoid a
"complete breakdown," the central
government must move slowly acid
with discretion.
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The army chief of staff,
General Nasution, has made
several attempts since early
March to remove the East In-
donesian territorial commander,
Lt. Col. Sumual. Thus far,
Sumual has successfully re-
sisted efforts to remove him.
The chief of staff plans
eventually to divide Sumual~'.s
command into four military re-
gions. In order to carry out
this reorganization, the gov-
ernment has intensified its
efforts to win the support of
local elements, and has been
at least partially successful
in south Celebes.
General Nasution personally
activated one of these new com-
REPUBLIC OF INDONESIA
Disaffected provinces
Provinces under central government
SECRET
wands--in south Celebes--on 1
June, and announced that it was
directly responsible to D3akarta.
Apparently the government ex-
pects to postpone the activa-
tion of the other three commands
until local civil and military
opinion makes such a development 25X1
more acceptable.
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CURRENT INTELLIGENCE WEEKLY SIIIiMARY
Deputy Premier Katay, lead-
er of the Nationalist Party, has
been chosen by the crown prince
to farm a new government, and
there is a fairly good prospect
that he will succeed. He is a
vigorous advocate of a firmer
policy toward the Pathet Lao
and is benefiting from the as-
embly's r?eactiAn against Prime
Minister Souvanna Phouma's pot=?-
icy of appeasement. Although
critical details remain to be
negotiated, Katay is apparently
assured of Independent Party
support,and the Democratic Party
may also join to forma strong .,
anti-Communist coalition. The
Independent Party, led by Phoui
Sananikone, is second only to
the Nationalist Party in repre-
sentation in the assembly. The
functioning of a Nationalist-
Independent,? alliance depends
on submersion of intense per-
sonal conflicts between Katay,
Phoui and Souvanna.
Souvanna Phouma, who con-
trols a large wing of the Na-
tionalist Party, appears to be
a key figure in determining
Katay's prospects. He reported-
ly has indicated that he will
support Katay, who has been
his strongest critic, if the
latter will continue to follow
a policy of accommodation with
the Pathet Lao. Katay has re-
fused to enter into such a deal,
but would probably be willing
to offer Souvanna a prominent
post in his cabinet in view of
the latter's strong bargaining
position.
If Souvanna allies himself
with pro-Pathet opposition lead-
er Bong Souvannouvong in an ef-
fort to block Katay, a prolonged
political crisis may result.
The Pathets would undoubtedly
seize such as opportunity to
foster disunity among Laotian
politicians while working for
the return of Souva~ina to office .
In this connection, members of
the Pathet Lao delegation in
Vientiane are lobbying with asp
sembly deputies in an effort:. to
inf lueace the formation of the
government, and an anonymous
tract which threatens deputies
with violence if they vote for
a "ffatay" government reportedl
is being distributed. 25X1
25X1
INDIAN FOREIGN EXCHANGE CRISIS
India's foreign exchange
reserves, which despite strin-?-?
gent control measures have de-
clined by over one third in the
last 14 months, now are insuf-
ficient to support .foreign tr~lde
operations and still maintain
the legal .minimum required
for currency backing.
The Second Five-Year Plan
called for a gradual $420,000,000
reduction by 1961, but the re-
serves have already fallen from
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CURRENT YNTELLYGENCE WEEKL7t ~$Y
6 dune 1957
$1.566 billion on 1 April 1956
when the plan began to $1.003
billion, which is $143,000,000
below the level projected for
1961, They would have fallen
even lower if India had not
borrowed $127,500,000 from the
International Monetary Fund
earlier this year. Although
the Indian government placed
severe restrictions on the im-
portation of consumer goods
and on foreign travel more than
six months agog the reserves
continue to decline rapidly:
having fallen $126,000,000 in
the last two months.
The government has recent-
ly taken additional steps to
reduce the gap in its balance
of payments. It reportedly
has decided to suspend the
assembly of American cars in
India in order to save the
foreign exchange cost of im-
ported components. It has also
taken steps to encourage for-
eign investment, and Finance
Ministe~? Krishnamachari has
instructed B.K. Nehru, sec-
retary of the Ministry of Fin-
ance, to discuss the conclusion
of a treaty of "friendship and
establishment" and a treaty
for the prevehtion of double
taxation during his visit to
Washington this month. In
addition, the 1957-58 budget
presented to parliament on 15
May called for a. sharp rise
in taxes to reduce deficit
spending and hold down the
price level so as to stimulate
Indian exports.
As long as India maintains
imports of industrial goods at
the present rate despite the
gap of over $1 billion in the
foreign currency resources
needed to fulfill the plan, the
control measures adopted will
be of only marginal signifi-
cance. At the present rate of
declinne, the reserves will be
down to the $840,000,000 required
by law as currency b~.cking,
within a few months even if
India utilizes the remaining
$72,500,000 of its $200,000,000
line of credit with the Inter-
national Monetary Fund.
Since Prime Minister Nehru
and the other Congress Party
leaders have staked their future.
on the successful fulfillment
of the plan, they probably will
be willing to risk India's
reputation for financial stabil-
ity by reducing to $649,000,000
the foreign exchange reserves
held as currency backing, which
can be done in a financial
emergency, While this will
allow the government to main-
tain the rapid pace of economic
development for an additional
six months, it will be only a
stop-gap measure, and India is
likely to request a long-term
loan of between $500,000,000
and $1 billion from-'the United
ear. future.
East Germany?s economic
plan for 1957 calls for an in-
crease in.~ndustrial production
of only 6 percent. This goal
reflects the contraction of
the rate of economic growth,
a contraction which began in
1951. It indicates that most
of the economic problems which
have caused serious disagree-
meats among East German offi-.-
cials will remain unsolved
during 1957.
The growth of the raw
materials and fuel base has
lagged far behind, industrial
development, and the regime's
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~EC~~i~
plan to concentrate investment
in these industries will again
forestall any real improvement
in supplies for the consumer.
Shipments of Soviet raw mate
ria.ls and fuels have increased
30 percent during ,the first
four months of 19 57 but wi 11
only partially meet East Ger-
many s needs, and shortages
generated in part by 1956 pro-
duction failures will continue
to restrict output.
The Ministry of Coal and
Energy will receive one fourth
EAST GERMAN GROSS INDUSTRIAL
PRODUCTION
(ANNOUNCED PERCENTAGE INCREASE OVER
PREVIOUS YEAR)
0
1951 1952 1953 1954 1955 .1956 1957
(PLAN )
of all 1957 state investments,
but rationing of power to in-
dustry will still have to be
maintained during 1957, accord-
ing to Deputy Premier Leuschner.
Coal reserves for rail trans-
portation have reached for the
first time in several years a
satisfactory level--20-25 days'
operating supply--largely be-
cause of increased imports and
stricter internal economies
made possible by a relatively
mild winter. But this situation
may only be temporary,
Production of consumers
goods is to be about the same
as in 1956, and any increase
in the standard of living dur-
ing 195? will come largely
from improved housing, for
which investment has been in-
creased 62 percent.
Party Secretary Ulbricht
has admitted that food ration-
ing will not be ended in 195?,
as promised, and it is even un-
likely that the present sugar
ration (10 percent of caloric
intake) can be maintained. To
compensate for its failure to
procure additional food sup-
plies abroad, the regime is
asking for a ?.6-percent in-.
crease in domestic output of
agricultural products, but under
the existing agricultural pro-
gram, such an increase in pro-
duction is not likely.
Ultimately the East German
leaders will have to respond
to growing demands of the people
for an improvement in living
standards. Knowing this they
have already reluctantly
abandoned or postponed some
long-range investment projects.
This is reported to have been
the subs ect of bitter argument
within the East German polit-
buro. The present policies are
a retreat by Ulbricht under p~res~-
sure: ~ fxom some of his less
doctrinaire, more ra matic
colleagues.
(Prepared by ORR
Now that the Soviet in-
dustrial reorganization pro-
gram has been launched, Khru-
shchev has again turned his at-
tention to agriculture. He has
tried to spur the production of
agricultural consumer goods,
particularly meat, wool and
dairy products, and has an-
nounced that compulsory de-
liveries of produce from private
plot. will be abolished in 1958
~~'CR~T
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CURRENT INTELLIGENCE WEEKLY SUg1idARY
6 June 1957
in order to create a "better
political atmosphere" in farm
areas...
Livestock Goals
-The unrealistically high
meat and milk goals for 1960,
implied by Khrushchev in his
boast that the USSR caa catch
up with the US in per capita
,production of milk by 1958 and
of meat by 1960 or 1961, may
reflect a form of statistical
gymnastics comparable to the
gross overestimates of grain
production carried by the USSR
.prior to 1953 when production
was reported in terms of "bio-
logical yield,." which ran some
20-30 percent higher than actual
production.
The milk .goal set forth
by Khrushchev appears to be in
line with the original Sixth
F~:ve~Year-Plan {156-1960) goal,
which was itself
overly ambitious.
Khrushchev's goal for
meat,; however, is
far higher-wand even
more unrealistic--
than the one set
Earth in the Five-
Year Plan, which
called for a doubling
of meat output.
Admitting that
he ignored the views
of some,af his own.
experts, Khrushchev
said he disagreed
with "soave econo-
mists" wiJ? had cal-
culated `i?hat the Ua~i.
SECRET
Corn Cutbacks
According to the Soviet
press, the planned area for corn
in 1957 has been reduced to
some 42-45,000,000 acres,
roughly the-same as the 1955
corn acreage but some 15,000,000
acres less than the 1956 corn
area. This reflects a recogni-
tion that the turn program has
been pushed at too rapid a pace.
Despite the reduction in acre-
age, Khrushchev in recent
speeches, has continued to refer
to corn as "the queen of the
field crops," and the Soviet
press continues to emphasize
the importance of corn as a
fodder crop.. Soviet hopes for
increasing livestock production
have been closely-tied to an
expansion in corn production.
Rather than abandonment of the
corn program, some ,substitution
of potatoes--which Khrushchev
has been championing of late--
AREA SOWN TO CORN
MILLION ACRES
could not Latch up
with the United States in per
capita meat production until
1975.
Meeting these meat and
milk output goals will be par-
ticularly difficult i,n view of
the marked lack of success. of
the meat program in 1956 and
the retrenchment in the corn
program.
1957 1960
~ PLAN ~
or other fodder crops in areas
unsuitable for corn appears
probable.
Wool Output Increases
According to revised plans,
sheep husbandry in the USSR is
to be "at least" doubled during
the remainder of the Sixth Five-
Year Plan. In the original.
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CURRENT INTELLIGENCE WEESLY StJ-[ld~lRY
PRIVATE LIVESTOCK HOLDINGS
PERCENT OF TOTAL
Sixth Five-Year Plan, wool pro
duction was supposed to be ex-
panded by 82 percent between
1955 and 1960. The authorities
are now asserting that flocks
can be increased by more than
100 percent between the middle
of 195? and 1960 and that the
quality of wool can be markedly
increased. Achievement of this
increase seems improbable, how-
ever, in view of the admission
that sheep husbandry has been
"lagging" recently and the fact
that 1956 wool output increased
only about 3 percent .over 1955.
Abolition of Peasant Quotas
Plans for abolishing com-
pulsory deliveries of produce
from the peasants' private plots
during 1958 may prove to be the
most significant of all of the
recent developments- in agri-
culture. In a speech on 22 May,
Khrushchev asserted that the
amounts of produce received by
the state from private plots
through compulsory quotas is
small and not worth the bother
of collection. He also acknowl-
edged that the abolishment of
compulsory deliveries would
COLLECTIVE
FARMS
STATE
FARMS
INDIVIDUAL
HOLDINGS
"create a better po-
litical atmosphere"
in farm areas, imply-
ing that the peasantry
has been disgruntled
because of the de-
crease in income from
a drop in sales and
prices on the collec-
tive farm market in
1956.
Abolition of com-
pulsory deliveries
from the private plots
is a further exten-
s ion of the pos t-
Stalin policy of re-
laxing the battle
against the private
plots. Nevertheless,
the long-term goal of
reducing private pro-
duction probably re-
mains. This move
may be part of the ef-
fort to exgand livestock pro-
duction, since a large percent-
age of the livestohk in the
Soviet Union still remains in
private hands.
Merger of Ministries
The reunification of the
Ministry of State Farms with
the Ministry of Agriculture was
announced in the Soviet press
in late May, This merger is
consistent with the campaign
initiated by Khrushchev in 1955
when he called for a top-to-
bottom reorganization within the
Ministry of Agriculture in terms
of the reassignment of personnel
to posts more directly connected
with the "practical" day-to-day
affairs of farming. This reor-
ganization completes the cycle
of ministerial changes in agri-
culture initiated in 1953, and
brings all important agricultural
activities again under a single
ministry which is aow under the
direction of V. V. Matskevich,
minister of agriculture since
1955, who has advanced rapidly
since ghrushchev came to power.
(Prepared by
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PATTERNS AND PERSPECTIVES
REPERCUSSIONS OF BRITAIN'S ACTION ON CHINA TRADE CONTROLS
Britain's abandonment on
30 May of the China differen-
tial in strategic trade controls
appears likely to be followed
in the near future by similar
action by most of the members
of the China Committee.
Western Europe: Britain's
announcemen as a ready been
followed by a similar one from
Norway. Official statements of
"regret" from several other
countries are attempts to blame
Britain for a China trade pol-
icy which they also favor and
now will follow. A Chinese
Communist delegation reportedly
will arrive in Italy in early
July to discuss trade possibil-
ities, West German industrial
representatives will go to Pei-
ping in October, and the Danish
government is studying the ques-
tion of a trade agreement with
Communist China. France will
not take action until after the
present government crisis, but
strong French opposition in the
past to the China differential
indicates that France will fol-
low Britain's example.
Asia: The Japanese govern-
ment is pressed on the one hand
by demands from business circles
that the British lead be fol-
lowed and on the other by con-
cern for US-Japanese relations
on the eve of Prime Minister
Kishi's visit to Washington.
Tokyo has offered to mediate in
any effort to reach a compromise
acceptable to all China Commit-
tee members. Failing this, it
will not accept a discriminatory
position vis-a-vis the remainder
of the CHINCOM group.
The Chinese Nationalist
government considers the Brit-
ish announcement a serious blow
to its own international posi-
tion. Taipei reacted by reaf-
firming publicly its "port clo-
sure" of all mainland Chinese
ports. Rear Admiral Liu Ho-tu
stated on 31 May that the Chi-
nese navy will continue to in-
tercept British ships entering
Chinese mainland ports south
of the Yangtze. In practice,
a full blockade is maintained
only over Amoy harbor. As re-
cently? as. 27 May? a British ship
was fired on but slipped past,
and on 31 May the Nationalists
claimed to have crippled a 1,-
500-ton "Communist transport"
which more probably was a Brit-
ish vessel.
Communist China's Reaction
Editorial comment carried
in Peiping's broadcasts inter-
preted the British decision in
regard to trade controls as a
sign that the American embargo
policy was "in a state of paral -
ysis." Chinese Communist prop-
agandists predicted that the
British move would start a
"chain reaction" of resistance
to restrictions "imposed by the
United States on its allies."
Disagreement between London and
Washington on the issue was
cited by the Chinese Communists
as evidence of a growing rift
in the Western alliance.
Economic Effect on Peiping
The value of Communist
China's foreign trade with the
free world, which has increased
annually for several years, is
not expected to rise significant-
ly solely as a result of the
easing of controls. For the
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CURRENT INTELLIGENCE WEEKLY SUGARY
past several years, China has
built only small foreign ex-
change reserves so that any
significant increase in trade
would require added sales by
China to the free world. China
has indicated, however, its ex-
ports are likely to fall in
1957 because of domestic eco-
nomic problems. Peiping also
has assumed an obligation to
provide hard currencies, earn-
ed largely in its free world
trade, to Eastern Europe.
Reduction of trade restric-
tions to the level of those
applied to the Soviet bloc could
increase China's annual foreign
exchange earnings as a result
of savings from reduced trans-
portation costs, permitting a
10 percent rise in trade with
the free world.
The commodity composition
of Communist China's free world
trade may change. Although
total deliveries under the ex-
ceptions procedure which was
liberalized in 1956 are not
known, incomplete returns from
some West European countries
indicate that strategic goods
form an increasingly larger
share of Chinese purchases.
Sales of strategic goods
under the exceptions procedures
indicate that Peiping will seek
addit~.onal quantities of iron
and steel products, automotive
equipment,including trucks,
tractors, bulldozers and cranes,
locomotives, rolling stock,
precision instruments and elec-
trical machinery.
Peiping probably will pur-
chase more of these items, now
supplied primarily by the So-
viet bloc, but such purchases
will not be so large as to of -
fect China's bloc-oriented
trade and industrialization
program. Peiping is expected
to continue to rely on the So-
viet bloc for complete installa-
tions supporting its industrial
and militax?y development.
Trade with Japan may see
a larger increase than with
Communist China's free world
trading partners in Western
Europe. Japan is seeking to
purchase large amounts of Chi-
nese raw materials such as coal
and iron ore which Peiping has
withheld to press Tokyo into
seeking a revision in trade con-
trols and,at the same time, to
loosen its ties to the United
States. If Communist China now
makes such exports, the stimulus
this gives to trade with Japan--
already China's largest free
world trading partner--could in-
crease total exchanges by about
$100,000,000 to more than $250,-
000,000 annually. 25X1
(Prepared jointly w ORR
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The factional struggle in
the Polish United Workers'
Party (PZPR)?, which has per-
sisted for more than a year,
continues following the bit-
ter debates at the ninth cen-
tral committee plenum in Delay.
The plenum reflected far-reach-
ing reversals for the anti-
Gomulka Stalinists; and an in-
crease in the strength of the
Gomulka supporters. The Stalin-
ists made it clear that they
look to the party congress this
December as the main battle-
ground for control of the Polish
party. Gomulka continues to ap-
peal. for support from the neutral
mass of party functionaries.
He has warned extremists of
both left and right that they
.will be expelled from the party
if they persist in their herat-
Y.cal.~ or disruptive activities.
His strong stand in the plenum
debates against the Natolin
distinct groups: (1) the
Gomulka supporters, (2) the
pro-Soviet Stalinist or "Natolin"
group, (3) the liberal extrem-
ists, and (4) the neutral or
uncommitted mass of tried party
functionaries, including many
provincial and district party
activists.
Gomulka Supporters
This group consists of
Gomulka's close confidants, the
old Communists, the party mod-
erates, and the ex-Socialists.
During the ninth central com-
mittee plenum, this group at-
tained a majority in the cen-
tral committee.
Close Confidants: The
close con an s, o whoa there
are five, are in effect all
"old comrades." They have been
Gomulka's close associates since
the period prior to his disgrace
during the Stalin period and
continue to enjoy the particular
trust and confidence of the party
leader. They are Marian Spy-
chalski, 8okossovski's successor
as minister of national defense,
who shared Gomulka's fate in Pol-
ish prisons; Zenon Kliszko, who
handles proceedings for Gomulka
in the Sejm and who was elected
to the party secretariat at the
May plenum; Ignacy Loga-Sowinski,
trade union chief, who was ad-
mitted to the politburo along
with Gomulka; Wladyslaw Bien-
kowski, Gomulka's minister of
education; and Mieczyslaw Moczar,
deputy minister for internal
affairs.
group, improved his control of
the central committee and puts
him in a strong position for the
December congress.
Since Gomulka took over
last October, the PZPR has'been
divided into the following
Old Communists: This group
is qu to strong a the central
committee, reportedly making up
about one fourth of the members .
ship. It consists of prewar Com-
munists, many of them of Jewish
origin, who harbor bitter feelings
against the USSR for the treat-
ment accorded the Polish Communist
Party during the great purges of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
the 30's. They also resent
the anti-Semitic attitudes
recently indicated both by the
Soviet leaders and by the lead-
ers of the Natolin group. They
therefore support Gomulka, es-
pecially in his ~?efusal to be
subservient to the Soviet Union.
As old Communists, they are,
however, sympathetic to the
views of the Natolin group on
such basic internal issues as
agricultural policy and the
policy toward the church. Typ-
ifying this group is politburo
member Roman Zambrowski, who
has supported Gomulka since
October.
Party Moderates: The main
characteristic o~the moderates,
who form about a fifth of the
central committee, is that they
resent the Stalinist past and
essentially agree with Gomulka's
policies, although many would
like to see the liberalizing
reforms extended. The moderates
take a more realistic approach
to the difficulties confront-
ing Gomulka and his policies
than the liberal extremists.
In this moderate group,
Jerzy Morawski has been one of
the most important leaders from
the outset, and now appears to
hold a key position. He was
elected to the politburo in
October along with Gomulka, and
was brought into the party secre-
tariat at the ninth plenum in
May. Also leading in this group
is the party secretary of Warsaw
city, Witold Jarosinski, and
several of the more important
provincial secretaries. Former
party chief Edward Ochab, who
has been one of Gomulka's
strongest supporters against the
June 1945
November 1949
1950
March 1956
October 1956
November 1956
Post-World War II
September 1948
November 1949
1949-56
July 1956
October 1956
May 1957
Organizer of Communist underground "People's
Guard." Chief of Staff. Close associate of
Gomulka.
Deputy Minister of Defense.
Expelled from party Central Committee for
nationalist deviation.
Arrested
Released from prison.
Readmitted to PZPR Central Committee.
Appointed Minister of National Defense.
Organized underground Communist press in
Poland; helped to form PPR (Polish Workers
Party). Joined "People's Guard." Close
associate of Gomulka.
Chief, Personnel Dept., Central Committee, PPR.
Demoted to candidate member, Central Com-
mittee, released from party post, accused of
being accomplice of Gomulka.
Expelled from Central Committee.
Arrested, imprisoned.
Rehabilitated, appointed Deputy Minister of
Justice.
Readmitted to Central Committee.
Appointed member, PZPR Secretariat, in charge of
Organization Department.
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C USRENT I NTELLI GENCE WEEKLY SUM~I