CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001500040001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 50
• Document Creation Date: December 16, 2016
• Document Release Date: February 7, 2005
• Sequence Number: 1
• Publication Date: November 7, 1957
• Content Type: SUMMARY

Approved For Release 2005/02/17 : CIA-RDP79-00927A00'1500040004-A-
CONFIDENTIAL
T
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. i;
OCR NO. 6412/57
DATE EVIEWER:
^ DECLASSIFIED
CLASS. CHANGED TD
NEXT REVIEW DATE:
AUTH? HR 7n 2
7 November 1957
DOCUMENT NO.
NO CHANGE IN CLASS ^
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
On file USDA release instructions apply.
DIA and DOS review(s) completed.
CONFIDENTIAL
25X1
25X1
0
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved FoRr-Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
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.
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 CONFDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
SOVIET 40TH ANNIVERSARY CELEBRATIONS . . . . . . . . . . Page 1
Khrushchev's three-hour opening speech has domi-
nated the 40th anniversary celebrations in Moscow. He
touched lightly on domestic political problems and
spoke frequently of the principles of party unity and
of the supremacy of the party in all spheres of Soviet
life. Referring briefly to recent conflicts in the
party's top ranks, he asserted that the central com-
mittee had upheld these principles in ousting the "an-
tiparty" group in June and Zhukov in October.
On the economic side, he reaffirmed the policies
and programs announced last September and gave pre-
liminary production figures for 1972 for certain key
industrial items in support of his assertion that catch-
ing up with the United States is an achievable goal.
In foreign relations, Kbrushchev emphasized the impor-
tance of an understanding between the United States
and the USSR and called for a high-level East-West meet-
ing.
Approved For Release 2005/ DP79-00927AU01500040001-3
THE SECOND SOVIET EARTH SATELLITE . . . . . . . . . . . . Page 3
Sino-Soviet propagandists are hailing the launch-
ing of the 1,120-pound second Soviet earth satellite
to a maximum of 930 miles on 3 November as an "out-
standing victory of Soviet science and vivid testi-
mony to the gigantic success of the first Socialist
state." This follows the same pattern of propaganda
exploitation used after the first launching. The
military applications of sputnik II have already been
implied in Soviet bloc comment. Free world reaction
ranged from praise for the achievement to calls for
a greater exchan a of scientific knowledge among the
Western allies.
iDL;T1Mt
i
Approved For Release T /EM: VA-MM-00927A001500040001-3
 Approved For-Release 2005/02/17: CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
PART I (continued)
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . . Page 6
The UN debate on Syria's complaint against Turkey
has ended inconclusively. Syria continues to make propa-
ganda charges against Turkey. Turkish military strength
near the Syrian border remains substantially unchanged.
The nalitical isituatinn in Jordan continues unstable
25X1
25X1
NOTES AND COMMENTS
PROBLEMS OF THE NEW FRENCH GOVERNMENT . . . . . . . . . . Page 1
France's new premier, 38-year-old Felix Gaillard,
presides over a tenuous alliance which faces immediate
decisions on the Algerian and other highly controver-
sial problems. Gaillard has reiterated Mollet's offer
to the Algerian rebels for a cease-fire and negotia-
tions. Despite the large majority vote for his investi-
ture, both major supporting parties--tbe Socialists and
the Independents--remain at odds over economic policy
and seem in agreement only on the need for a government.
The serious divisions in both groups over participating
in his government make doubtful their continued support.
ALGERIAN REBELLION . . . . . . . . . . . . . . . . Page 2
The Algerian rebel high command recently met in
Tunis and reiterated its demand that France recognize
Algeria's independence before cease-fire negotiations
are held. The rebels have substantially improved
their military capabilities and may concentrate on
isolated French positions, such as those protecting
Saharan areas under oil development.
COMMUNISTS TIGHTEN CONTROLS ON BERLIN SECTOR BORDER . . . Page 3
The Communists have established new stringent
customs and currency controls on the East-West Berlin
border, but apparently do not contemplate closing this
border entirely in the near future. Although the new
controls violate quadripartite agreements on freedom
of movement within Berlin, they do not necessarily
affect Allied access to East Berlin, as they appear
to be directed primarily against Germans.
SECRET
ii
25X1
25X1
Approved For Release 2'/O1*g C-R%W-00927A001500040001-3
 Approved For Release 2005/02/17 : CIA-RDP79-00927AQQ1500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
SOVIET INDUSTRIAL OUTPUT CONTINUES HIGH FOLLOWING
REORGANIZATION Page 5
For the three months following the 1 July 1957
reorganization of Soviet industrial administration,
production in the Russian republic, which accounts
for roughly two thirds of the USSR's industrial out-
put, was 12 percent above that for the same period
a year ago. This total figure, which is somewhat
higher than is implied in Khrushchev's anniversary
speech, suggests that to date at least the results
of the reorganization scheme have at the minimum
offset any initial disruption of supply and person-
nel. Nevertheless, some modification of the new
system may be made if 1957 performance figures re-
veal specific weaknesses in its operation.
1 -1
YUGOSLAV REACTION TO ZHUKOV DISMISSAL . . . . . . . . . . Page 6
President Tito's absence from the Moscow cele-
bration of the 40th anniversary of the Bolshevik
revolution suggests that as a result of the ouster
of Marshal Zhukov the Yugoslav leader is having
second thoughts about his alignment with the USSR.
Belgrade is unlikely to take any steps which would
further its alignment with Moscow until the inten-
tions of the new Soviet. leadership are clarified.
RUMANIAN OVERTURES TO THE WEST . . . . . . . . . . . . . . Page 7
In an effort to enhance the appearance of Ru-
manian independence of the Kremlin and to bolster
foreign trade, the Bucharest government is making
another serious effort to 'improve relations with
ENLARGED SCOPE OF STATE FARMS IN SOVIET AGRICULTURE . . . Page 8
The recent Soviet emphasis on state farms in agri-
culture has resulted in the formation of 674 new state
farms in the USSR in the first half of 1957. This trend
has been closely related to the development of the New
Lands and, more recently, to increasing pasturage in
the new areas to enhance the meat and milk production
drive.
SECRET
iii
25X1
Approved For Re1easd51 :RNA 9-00927A001500040001-3
 Approved For Release 2005/03
7C I DP79-00927A901500040001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
PART II (continued)
DI VITTORIO'S DEATH WEAKENS ITALIAN COMMUNISTS' HOLD
ON LABOR . . . . . . . . . . . . . . . . . . . . . . . . Page 9
The Italian Communist party leadership is faced
with a difficult problem in finding a successor to
Giuseppe Di Vittorio, who died on 3 November after a
ten-year term as secretary general of the party-dom-
inated Italian General Labor Confederation. Likely
successors would not have Di Vittorio's stature and
popularity, and must be acceptable to the Communists,
the Nenni Socialists, and the rank and file. The Com-
munists' hold on labor is threatened by weakening
morale in the labor organization and an increasing
divergence of interests between Communist and Nenni
Socialist members.
MACMILLAN GOVERNMENT FORCING SHOWDOWN ON WAGES ISSUE . . . Page 10
Industrial strife is probable in Britain this
winter as a result of the trade unions' conflict
with the Macmillan government over general wage in-
creases. The government insists that the pound
sterling would be weakened by further wage increases
unaccompanied by rises in productivity. The show-
down may come in mid-December, when the government
is expected to reject the demands of 500,000 rail-
way men to whom it has yielded in previous years.
YEMENI CROWN PRINCE BADR'S VISIT TO LONDON . . . . . . . . Page 11
The ten-day official visit to London of Yemeni
Crown Prince Badr, which begins on 9 November, may
provide a start toward a limited settlement of the
Aden-Yemen border dispute. The Yemenis view the
trip as strengthening the prospects of Badr to suc-
ceed to the throne. The British view the crown prince
with suspicion because of his Soviet connections, but
presumably hope his visit will facilitate future deal-
ings with him should he succeed the present Imam.
RETURN TO CIVILIAN GOVERNMENT IMPERILED IN COLOMBIA . . . Page 11
A factional struggle within the Conservative party
in Colombia imperils the prospects of an orderly transi-
tion of power from the military junta to civilian con-
trol. The repudiation by the right-wing Conservatives
of the joint Conservative-Liberal presidential candidate
may be seized by the military as a pretext to remain in
control.
SECRET
25X1
Approved For ReleaseTl5 :A3-00927A001500040001-3
 Approved For-Release 2005/02( C IS,-7DP79-00927AOD1500040001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
PART II (continued)
THE SITUATION IN GUATEMALA . . . . . . . . . . . . . . . . Page 12
Little if any progress is being made by the di-
verse and antagonistic anti-Communist political groups
in Guatemala toward agreeing on a coalition candidate
for the presidential election, which will probably be
set for January. If the impasse continues and the
government remains neutral as it has promised, the Com-
munist-infiltrated Revolutionary party might win. Gov-
ernment support for any candidate would probably set
off renewed violence.
DEVELOPMENTS IN INDIAN ECONOMIC SITUATION . . . . . . . . Page 13
The Indian government took action on 31 October
to make available nearly all of its dwindling foreign
exchange reserves to meet commitments under its Second
Five-Year Plan, as widespread crop failures tightened
the squeeze on its financial resources. New Delhi ap-
parently is counting heavily on American authorization
of additional surplus food shipments to ease the new
drain on its foreign exchange necessitated by emer-
gency food imports.
PHILIPPINE ELECTION CAMPAIGN . . . . . . . . . . . . . . . Page 14
In the last week of intensive campaigning for the
12 November Philippine election, President Garcia is
still widely believed to have an edge over his op-
ponents, although an upset by either Liberal party
candidate Yulo or Progressive party candidate Manahan
cannot be ruled out. Despite local expectations of
widespread electoral frauds, and numerous reports of
terrorism, government agencies responsible for the
conduct of the elections appear to be making an ef-
fort to ensure free elections.
INDONESIA . .
The Indonesian government has postponed the second
national conference from 15 to 25 November, apparently
to give its "Regain West Irian Drive" more opportunity
to stimulate national unity before the meeting opens.
The second phase of this anti-Dutch drive is to start
on 10 November, and a third phase is set to coincide
with the UN General Assembly debate on Indonesia's
claim to the area later this month. Antagonism be-
tween Sukarno and Hatta may be intensifying, with Hatta
reportedly prepared to take active leadership of anti-
Communist elements against the President. F_ I
SECRET
. . Page 15
25X1
25X1
Approved For Release 51D 7 :CIA- 9-00927A001500040001-3
 Approved For Release 2005/02/17 : CIA-RDP79-00927AQQ1500040001-3
SECRET
PART II (continued)
THAILAND . . . . . . . . . . . . . . . . . . . . . . . . Page 15
Marshal Sarit is seeking to give the impression
that he fully controls the situation in Thailand.
Earlier reports that he was "losing his grip" may have
been exaggerated by ambitious colleagues, such as In-
terior Minister Prapat, who probably hope to succeed
Sarit as Thailand's de facto ruler.
SITUATION IN LAOS . . . . . . . . . . . : . . . . . . . . Page 16
The Laotian government and the Pathet Lao have
concluded negotiations on the terms of a settlement,
and Prime Minister Souvanna Phouma plans shortly to
request National Assembly approval for a coalition gov-
ernment. Influential conservative leaders are opposed
to the manner in which Souvanna pushed through the set-
tlement. However, there is widespread sentiment for
national reunification, and it is probable that Nation-
al Assembly approval will be forthcoming.
CHINESE TO PRESS FOR FURTHER SCIENTIFIC COOPERATION
WITH USSR . . . . . . . . . . . . . . . . . . . . . . . . Page 17
Mao Tse-tung's entourage in Moscow includes two
scientific and technical delegations which will ne-
gotiate a Sino-Soviet agreement for joint research
and cooperation. Soviet missile and earth-satellite
development and nuclear advances are viewed by the
Chinese as impressive examples of Soviet supremacy
in science and undoubtedly have prompted the Chinese
to press for agreements which would give them a
larger share in the benefits of the Soviet successes.
DROUGHT THREATENS WINTER CROPS IN COMMUNIST CHINA . . . . Page 18
Drought lasting more than 100 days threatens the
winter wheat and rape crops in most of North China,
large areas of the central provinces, and some of
South China. Crop failures would aggravate serious
problems already facing the regime in the countryside.
SECRET
vi
25X1
25X1
Approved For ReleaseZOU5/UZ1TT IEI46FY9-00927A001500040001-3
 Approved ForFTe-lease 2005/02/17 : CIA-RDP79-00927AY01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
PATTERNS AND PERSPECTIVES
THE ZHUKOV OUSTER: BACKGROUND. AND IMPLICATIONS .
. Page 1
POLICY TRENDS-IN THE NEW WEST GERMAN GOVERNMENT . . . . . Page 8
During Chancellor Adenauer's third term, West Ger-
many is likely to demonstrate an increasingly self-as-
sertive role within the framework of the Western alliance.
Unwilling to leave its fate in the hands of other major
powers, Bonn will probably seek a gradual extension of
its political influence to a point commensurate with its
already important world economic position. In the mili-
tary field, Defense Minister Strauss is likely to con-
centrate on equipping existing forces with modern weap-
ons.; In foreign policy, an early effort toward improv-
ing relations with the Eastern European satellites,
principally Poland, seems likely, although Tito's re-
cent recognition of East Germany may delay this step.
F_ I
NEW PAKISTANI GOVERNMENT'S GROWING ECONOMIC PROBLEMS . . . Page 11
The, new Pakistani government, while retaining the
pro-Western foreign policy outlook of its predecessors,
seems unlikely to pursue strong domestic. economic poli-
cies. This refusal to face up to economic realities may
result in serious deterioration of the country's economy.
Growing economic instability and continuing political
confusion may neutralize the effectiveness of American
military aid and make Pakistan increasin ly dependent on
foreign economic assistance.
25X1
25X1
SECRET
vii
THE -WEEK
Approved For Re1ease
51U2TT7 :CIA=RDP79-00927A001500040001-3
 Approved For-Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
ql~ReRer
COWIDENT1AL
CURRENT INTELLIGENCE WEEKLY HU A1Y
7 November 1957
OF IMMEDIATE INTEREST
SOVIET 40TH ANNIVERSARY CELEBRATIONS
Khrushchev opened the 40th
anniversary celebrations in Mos-
cow on 6 November with a three-
hour speech to a gathering of
over 15,000 officials of the
Communist world, including 61
foreign delegations and deposed
leaders Malenkov, Kaganovich,
and Shepilov. Khrushchev re-
viewed in glowing colors 40
years of Soviet achievement and
made confident predictions for
the future. He touched lightly
on domestic political problems,
and spoke frequently--in general
and conventional terms--of the
principles of party unity and
of the supremacy of the party
in all spheres of Soviet life.
Referring briefly to recent con-
flicts in the party's top ranks,
he asserted that the central
committee had upheld these prin-
ciples in ousting the "antiparty
group" in June and Zhukov in
October.
In his first formal pro-
nouncement on Stalin since the
attack at the 20th party con-
gress, Khrushchev struck the
now-familiar pose of balancing
Stalin's vices against his mer-
its. He asserted piously that
Communists had the strength to
admit mistakes, but rejected at-
tempts to attribute Stalin's
mistakes to the Soviet system.
Attacking the concept of "na-
tional Communism," he damned
Djilas and Nagy as revisionists
whom the West described as "lib-
eral Communists." Although he
condemned the two ideological
extremes of "revisionism" and
"dogmatism," Khrushchev avoided
entirely any discussion of the
problem of nonconformity in So-
viet intellectual life.
In the field of foreign re-
lations, Khrushchev emphasized
the importance of an understand-
ing between the United States
and the USSR and called for a
"high-level meeting of repre-
sentatives of capitalist and
socialist countries to exclude
war as a means of solving polit-
ical questions," to end the
arms race, and to establish re-
lations between states on the
basis of peaceful coexistence.
Khrushchev sought to por-
tray the Soviet Union as the
champion of peace, in contrast
to the West's alleged desire to
"keep the world on the brink of
war." He declared that "wars
are not needed for the victory
of socialism" and that the USSR
would never "use any means of
destruction" except in retalia-
tion against an attack by "im-
perialist states."
The confidence which marked
Khrushchev's speech suggests
that the Soviet leaders believe
their technological achievements
have given them a strong polit-
ical initiative which will in-
crease pressure on the West to
make concessions, particularly
in the disarmament field. The
Russians apparently believe
they can, from their new "posi-
tion of strength," isolate the
United States and persuade Amer-
ica's allies that their inter-
ests dictate a more independent
policy.
Khrushchev cited the eco-
nomic "victories" of the past
40 years of Soviet rule and
forecast Soviet production 15
years from now for certain key
CO F DE N
PART I Approved For Rele.Qs4 2b#YAAt/ :ThIAI d 927A0015000400bq-1 of 8
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY 5J4
industrial items. His prelim-
inary 1957 output figures were
considerably less impressive
then his image of the victorious
past and they seem to have made
him conservative in his vision
of the promising future. Only
the most moderate overfulfill-
ment of the modest 1957 plan
for total industrial production
seems implied by Khrushchev's
figures.
At the same time, the 1972
"goals," while impressive, imply
growth rates considerably below
both reported 1950-1956 indus-
trial growth and the increases
originally planned for the now-
defunct Sixth Five-Year Plan.
tempt to "do everything at
once"--though apparently at
a somewhat less headlong pace.
From the statements in his
speech, it would appear that
Khrushchev intends to continue
to implement policies toward
the satellites which are based
on the decisions of the 20th
party congress and which were
reaffirmed in the declaration
of 30 October 1956, i.e., "the
countries of the great common-
wealth of socialist nations can
build their relations only on
the principle of full equality,
respect of territorial integ-
rity, state independence and
sovereignty, and noninterference
25X1
Khrushchev claimed, however,
that the USSR "can in the next
15 years not only catch up
with the present volume of out-
put ...of the United States but
also outstrip it."
Besides the theme of
"catching up" with the United
States, Khrushchev also dwelt
at varying length upon those
other economic policies and
programs of the regime which
will go into the long-term plan
announced as under preparation
for the 1959-1965 period. His
discussion of agriculture, hous-
ing, sputnik, education, and de-
fense suggests a continued at-
in the domestic affairs of one
another." This is further in-
dicated by the front-paging in
Pravda on 5 November of a de-
tailed restatement by Polish
party leader Gomulka of his
well-known "separate roads to
socialism" doctrine.
Khrushchev was followed to
the rostrum during the ten-and-
a-half hour session by a parade
of Communist leaders, headed
by Mao Tse-tung. Mao went out
of his way to endorse Khru-
shchev's major domestic poli-
cies, which would have the ef-
fect of strengthening the lat-
ter's hand in any further party
SECRET
PART I OF IMMEDIATE INTEREST Page 2 of 8
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved For Release 2005/02/17: CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
struggles. There are some in-
dications that Khrushchev has
not completely eliminated his
opposition within the party
(see page 1, Part III).
Mao described as "wise
steps" Khrushchev's plans to
decentralize management of
industry and construction, the
agricultural development pro-
gram, and actions taken against
"antiparty groups" and toward
"improvement of political in-
doctrination in the army."
Mao's support may make Khru-
shchev more receptive to any
Chinese requests for additional
.Soviet economic, military, and
scientific aid. 25X1
The launching of the sec-
ond Soviet earth satellite was
announced by Moscow radio on 3
November after the satellite
had completed at least one or-
bit. The official announcement
stated that the new vehicle
weighs 1,120 pounds, is some
930 nautical miles above the
earth at the farthest point
The orbits of both satellites are constant in
relation to the axis of the earth- -65* to
the equatorial plane.
Orbits are shown schematically.
in its eliptical orbit, and is
carrying a dog, together with
instrumentation for transmit-
ting data.
The announced weight of
the new satellite is by far its
most significant military char-
acteristic. The propulsion ca-
pability demonstrated by placing
560 nautical miles
SECRET
PART I Approved For ReleM 2;?/II#TEIAl-927AO0150004008$I?e 3 of 8
 Approved ForRelease 2005/02/17 : CIA-RDP79-00927AW1500040001-3
SECRET
such a weight in orbit is read-
ily adaptable to an ICBM or a
reconnaissance vehicle.
Soviet statements continue
to imply that the Russians will
launch several more such satel-
lites during the coming year
and that they intend to attempt
a launching to the moon.
Communist Exploitation
Following the same pattern
of propaganda exploitation used
after the launching of the first
earth satellite, Soviet prop-
agandists again are concentrat-
ing on hailing the second
launching as "an outstanding
victory of Soviet science and
vivid testimony to the gigantic
success of the first socialist
state."
Considerable attention is
being given to foreign reac-
tions, particularly American.
Pravda assessed US reaction to
th-e-lunching of the second
satellite as ranging from "sin-
cere admiration to panic, hys-
teria, and malicious rage."
TASS reported "considerable
confusion" among Washington
political circles and quoted
American press sources as say-
ing the Soviet accomplishment
leaves no doubt in Washington
that the Russians are able to
launch an ICBM'against'points
in the United States.
One Eastern European radio
commentator told his domestic
listeners on 4 November that
just as the October Revolution
opened "Chapter II of the
world's history," so the sec-
ond earth satellite began "Chap-
ter III entitled 'Man is Begin-
ning to Conquer the Cosmos'."
The Bulgarian press commented
that the two satellites have
ended a "long and carefully
nurtured" American delusion of
technical and scientific suprem-
acy, and said that nothing can
dim the Soviet star.
The Yugoslav radio, taking
the humanitarian tack it fol-
lowed a few weeks ago, commented,
"If one side is able to do this
today, the other side will be
able to do the same thing to-
morrow. What sense does it make
then to continue the race and
the launching of new arms?"
Peiping is symbolizing the
second satellite as the "Red
Moon" which "deals a heavy blow
to the saber-rattlers." The
theme of "socialist superiority"
and the "failure of Western
capitalism" which was developed
gradually in publicizing the
first satellite is now foremost
in every Chinese Communist com-
muniqud. While direct military
implications are avoided in
favor of scientific claims,
pointed references are made to
new Soviet achievements in So-
viet launching techniques.
Non-Communist comment, less
voluminous than that on the
first earth satellite, general-
ly follows the same line. Sev-
eral newspapers have said that
the new satellite was launched
to divert attention from the
ouster of Marshal Zhukov.
Western European press and
official circles stressed the
scientific achievement, and the
SECRET
PART I Approved For Relea9e 200~IUZ/T~TEI WDP7N=UD927A0015000400v =~e 4 of 8
 Approved For Release 2005/02/17: CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
need for greater coordination
of Western scientific programs.
Bonn government supporters said
that the December NATO meeting
must come up with a tangible
program. The second launching
set off speculation in "in-
formed quarters" in Bonn that
West German participation in
rocket development, now pro-
hibited by the Paris treaties,
was necessary in catching up
with the USSR, and the question
was raised of a possible Euro-
pean rocket production pool
and of rocket production by Ger-
many itself or with the United
States and France.
The European press gener-
ally expressed alarm over the
lead assumed by the USSR over
the West, said by the British
press to be two years.
The launching has received
a big play in the Middle East
press as an additional demon-
stration of Soviet scientific
superiority, a further loss for
American prestige, and another
reason for spreading neutralism
throughout Asia and Africa.
Both the leading English
daily Times of Tndia and the
nationalist Tndian Express ex-
pressed confidence inntthe United
States' ability shortly to pro-
duce its own sputnik and the
Times added that there is there-
o-no question of the USSR
bargaining from the position of
comparative advantage. Both
papers see this Soviet achieve-
ment as carrying the promise of
a new and better future, and
the Times adds that the realiza-
tion of the promise will depend
on the measure in which the two
power blocs are prepared to co-
operate.
Political and press circles
in Ceylon saw the launching of
the second satellite as prob-
ably science's most notable
achievement. It was generally
agreed that a satellite race
between East and West could
become as bitterly contested
as arms races and might finally
be settled only by war.
Japan seems impressed with
the size of the new earth satel-
lite. Kyodo News Agency noted
that it "might well be" imagined
that the USSR already possesses
transcontinental ballistic
rockets that could deliver
hydrogen bombs to any part of
the world.
Prime Minister Kishi on
6 November asked Ambassador
MacArthur when the United States
would launch its earth satel-
lite. He said that not only
were the Socialists using the
Soviet success to criticize
his government's security and
foreign policy, particularly.
as it related to close coopera-
tion with the United States,
but that some of his own Lib-
eral Democrats were concerned
as well. When informed by
MacArthur that an American
pilot satellite would be
launched in December and a
more instrumented IGY satel-
lite in March 1958, Kishi
commented, "From our point
of view, the sooner, the
better."
SECRET
25X1
25X1
PART I Approved For ReIeM 2 M MT.FeIA- 0927A001500040 y 5 of 8
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
Turkey and Syria
International concern over
Turkish-Syrian tensions has
diminished markedly following
the close of the UN debate on
the problem last week, but the
Syrian regime has continued its
propaganda barrage charging
Turkey with overflights and
asserting the Turks have not
made any move to ease the bor-
der situation between the two
countries. Even more than pre-
viously, this Syrian activity
appears to be inspired by do-
mestic political considerations,
especially the regime's need to
maintain an atmosphere of crisis
in order to hold itself to-
gether and prevent any rally
of potential opposition.
The Turkish maneuvers
originally scheduled for 30
October have been delayed, at
least until 15 November
Reports
that Turkish group orces have
withdrawn from the border area
have not been confirmed. The
Turks recently prohibited the
American air attache from en-
tering an area about 65 miles
from the frontier where they
have a major air base. The rig-
orous restrictions the Turks
have placed on the movement of
foreign, including American,
newspapermen who have sought
to report on conditions in the
border area may well give An-
kara a bad press which will hin-
der efforts to counter Soviet
and Syrian propaganda.
culties are likely to loom
larger than they have for the
past several months. The un-
interrupted development of
closer military and economic
relations between Syria and
the Soviet Union, plus the ap-
parent Syrian responsiveness
to Soviet diplomacy during the
UN debates, is leading Tel Aviv
to step up its own diplomatic
efforts. The Israelis have in-
dicated they intend to make
a new request to the United
States for heavy weapons,
probably the latest jet fighters
and possibly some submarines.
Israel is already scheduled
to receive antisubmarine war-
fare equipment from Britain.
These moves suggest that
the Israelis anticipate a new
build-up in tensions with the
Arabs in general and Syria in
particular during the coming
months. Local frictions, any
of which could easily devel-
op into major problems, re-
main on all of Israel's
frontiers, but particularly
at present on the borders
with Syria and with Jordan,
where the problem of the
Jerusalem neutral area and
Israeli tree-planting and
digging continue to fester.
Behind Jordan's insist-
ence that the West publicly
espouse its cause in discus-
sions with Israel lies the
pro-Western government's ever
more pressing need for
25X1
support in its domestic dif-
Israel
As Turkish-Syrian tensions
subside, Syrian-Israeli diffi-
SECRET
X1
23
PART I Approved For Release 2~~1TECfANRDP79-00927A001500040001gT 6 of 8
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY S U&RY
25X1
It is not clear whether
the flare-up last week end in
the propaganda war between
Cairo and Amman is related to
a possible move by the "free
officers" group. Cairo charged
that King Hussayn's government
had been negotiating with Is-
rael, "selling out" the Arab
refugees for $30,000,000 of
American aid, and implied that
Hussayn should share the fate
of King Abdullah, who was as-
sassinated in 1951 by anti-
Israeli fanatics. Amman re-
plied with a venomous personal
assault on the "little colonel
of low birth and lower manners."
The Egyptian leaders are
very probably considerably re-
lieved to see the Syrian-Turkish
question calming down. Egyp-
tian Foreign Minister Fawzi
played a major role in leading
the Syrians to accept an incon-
clusive finale to the UN dis-
cussions. The easing of the
international situation ap-
parently has given Nasir an op-
portunity finally to do some-
thing about cabinet changes
which have been rumored for the
past several months.
Three shifts were an-
nounced on 3 November, but the
nature of the changes is not
indicative of a major reshuf-
fle. Nasir for some time has
been dissatisfied with some of
his ministers, particularly with
the unpopular reception some
of them received during the
parliamentary elections last
July. The director of Libera-
tion Province, accused of in-
efficiency and corruption, is
to be thrown as a sop to the
public, to give the tame Egyp-
tian parliament an opportunity
to stage an "investigation."
The Nasir regime also an-
nounced this week the consti-
tution of the "National Union,"
the latest attempt to provide
some link between the regime
and the public. The new Na-
tional Union has little more
chance than its predecessor,
the Liberation Rally, of be-
coming more than a convenient
device for organizing parades
and other political demonstra-
tions.
SE CRET
PART I OF IMMEDIATE INTEREST Page 7 of 8
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
Soviet treatment of the
Syrian question this week was
Sr_ CRET
designed to counter the
feeling that the "war threat"
in the Middle East is
over. Soviet propaganda
charges against Turkey have
been continuous although
the tone has become more
moderate and the volume has
declined during the past week.
Moscow will probably con-
tinue to emphasize the
dangers in the area for
the benefit of numerous
African and Asian dele-
gates who arrived in the
USSR to witness the cele-
brations.
25X1
PART I Approved For ReWas; 9'bM: UfX -00927A00150004 @ -38 of 8
 Approved For Release 2005/02/17 : CIA-RDP79-00927AW1500040001-3
CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY VZMIT
NOTES AND COMMENTS
France's new premier, 38-
year-old Felix Gaillard, pre-
sides over a tenuous alliance
which faces immediate decisions
on the Algerian and other high-
ly controversial problems. De-
spite his investiture vote of
337 to 173, both major support-
ing parties--the Socialists and
the Independents--remain at
odds over his economic policy
and seem in agreement only on
the need for a government. The
serious divisions in both groups
over participating in his gov-
ernment make doubtful their
continued support.
Gaillard's cabinet is one
of the smallest in recent years,
but it includes a wider range
of political views than any
government since the 1951 elec-
tions. Despite its breadth,
however, there is no sign of
planned coordination among par-
ty leaders. The Socialists have
some assurance of continuity
on party policy, since such key
posts as the Foreign Ministry
under Pineau and the Ministry
for Algeria under Lacoste are
in the same hands as they were
under Mollet and Bourges-Maunou-
ry. Popular Republican desires
to regain control of the For-
eign Ministry have been partial-
ly met by the appointment of
one of their leaders, Pierre
Pflimlin, as finance minister.
Gaillard has avoided a com-
mitment on Socialist-backed so-
cial welfare legislation, how-
ever, by a plan to refer it to
round-table conferences. The
Independents, who are repre-
sented in the cabinet by com-
parative unknowns, seem less
firmly committed to Gaillard
and are already threatening
difficulties if the Socialists
refuse to yield on this issue.
Gaillard has tried to head off
any early internal dissension
by threatening to resign if any
party bolts the coalition.
Gaillard has put Algeria
at the top of his legislative
program and will probably get
early assembly approval of an
amended basic statute. He has
reiterated Mollet's offer of a
cease-fire and negotiations,
but he has also indicated a
willingness to make further con-
cessions to the right, thus prob-
ably increasing the restiveness
CpENTIAI
PART II Approved For Relea M/0 :(MI( J-00927A0015000400l'I ?. - of 19
 Approved For Release 2005/02/17 : CIA-RDP79-00927A01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
of the Socialist rank and file,
who want a more liberal Alge-
rian policy. Antiregime senti-
ment in the army in Algeria,
meanwhile, is said to have in-
creased during the prolonged
government crisis, and the
French press in Algiers is wag-
ing a violent campaign against
the basic statute.
Further clashes over basic
policies are in prospect when
the cabinet takes up the prob-
lems of internal inflation and
the exhaustion of the financial
resources required for govern-
ment operations and for foreign
trade. Gaillard is anxious to
have France make an effort to
put its financial affairs in
shape by drastic economies and
new taxes before he asks for
foreign aid, but the American
embassy in Paris sees "precious
little" recognition by French
leaders, the mass of deputies,
and public opinion of the need
for belt-tightening. There are
already signs that labor will
lose no time in renewing strike
activity for new wage hikes.
F__ I
While military developments
in Algeria do not bear out the
contention of some rebel spokes-
men that a new offensive has
been launched, the Algerian re-
bellion--which entered its fourth
year on 1 November--gives no
indication of subsiding. The
rebels in fact are believed to
have substantially improved their
military capabilities during the
past few months. At the same
time they have concentrated on
enlisting support abroad pre-
paratory to the forthcoming
United Nations debate on the Al-
gerian question.
Divergences of opinion
within the nine-man executive
committee of the Algerian Na-
tional Liberation Front (FLN)--
believed to be the rebel high
command--seem to have been elim-
inated at a five-day strategy
conference held from 25 to 30
October in Tunis. The committee
reiterated its demand that
France recognize Algeria's in-
dependence before cease-fire
negotiations are held, in effect
repudiating the more moderate
position of the FLN's representa-
tive at the United Nations in
September.
25X1
Tunisian President Bourgui-
ba, who has urged the FLN to be
conciliatory and whose UN emis-
sary had espoused the earlier
FLN proposal for a conference
of France, Morocco, Tunisia,
and FLN representatives in an
attempt to solve the Algerian
dilemma, rebuked the FLN for
its negative stand. He has
sent an emissary to Morocco in
an apparent attempt to enlist
the support cf King Mohamed V
for a possible joint Moroccan-
Tunisian effort to influence
the FLN or perhaps to make a new 25X1
attempt to mediate between France
and the Algerian nationalists.
The rebels appear to be
biding their time militarily.
They claim to be prepared to
SECRET
PART II NOTES AND COMMENTS
Page 2 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
 Approved For Release 2005/02/17 : CIA-RDP79-00927A 01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SU kARY
Tunis
1 . --ggourt ? 1 L O~l
1
Hassi Messar, i
A L G E R I A\\\\\\\~\
MAURITANIA '?`
Oilfields under development ?~~,?
N I G E R
put 100,000 men in the field.
An Italian journalist who has
visited FLN camps rates these
forces as "highly mobile, well
trained, adequately armed, and
unbeatable in the back country."
Conceding defeat in the urban
areas, where French security
forces are largely concentrated,
the FLN probably will concentrate
on isolated French military
positions in Algeria, such as
those protecting Saharan areas
under oil development.
It-
Toward this end, rebel
forces have for some months
been moving southward, and a
small concentration of rebels
is reported to be in the Fezzan
Province of Libya. The French
expect these groups in Libya
to make an attack on the oil
field at Edjele, near the
Libyan border, and have rein-
forced some of the desert
garrisons.
COMMUNISTS TIGHTEN CONTROLS ON BERLIN SECTOR BORDER
lished new stringent customs
and currency controls at the
East-West Berlin border, but
apparently do not contemplate
closing this border entirely
ing with Allied access to East
Berlin. The ostensible reason
for tighter controls is to check
the flow of goods and the new
currency between the two parts
SECRET
FEZZAN
25X1
PART II Approved For Release ZOD5T02W: CIA P79=00927AO01500040001--e 3 of 19
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUUARY
of the city, and to cut down
the number of refugees fleeing
to the West. The East German
regime undoubtedly also wel-
comes the opportunity to assert
more control over East Berlin.
Although the new controls vio-
late quadripartite agreements
on freedom of movement within
Berlin, they do not affect Al-
lied access to East Berlin as
they appear to be directed pri-
marily against Germans.
The renovation of tempo-
rary elevated stations near the
sector border in East Berlin
which were built about three
years ago,for the purpose of
customs control, together with
the reported plan to reroute
traffic between Potsdam and
East Berlin to eliminate the
necessity for traversing West
Berlin, suggests that elevated
traffic is to be greatly
restricted in order to fa-
25X1
SECRET
cilitate customs and cur-
rency checks.
Since the currency con-
version on 13 October, the new
East German marks appear to have
moved to the West in such quan-
tities as to render the conver-
sion ineffective without more
drastic controls. As part of
one reported over-all plan, the
Communists may operate the ele-
vated trains in separate sys-
tems within each sector. During
the past few days, the East Ger-
mans have intermittently chosen
one car of the trains leaving
and entering East Berlin and
subjected the occupants to rig-
orous searches.
All foot traffic crossing
the sector borders is being
closely controlled. Persons
going to West Berlin are forced
at least to show the contents
of their briefcases and wallets
and to leave East marks with
Autobahn
Highway
r'21 'At'l - Railroad
PART II Approved For Releas4 ?/A :c9--' %-00927A0015000400 '--3e 4 of 19
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMEARY
the guards. Many persons carry-
ing goods to West Berlin have
been arrested for smuggling,
while those going to East Ber-
lin have had Western goods and
currency confiscated. The num-
ber of police at vehicle cross-
ing points allegedly has been
quadrupled, and all cars are
thoroughly searched.
Rather than attempt to
close the border completely, the
regime will probably continue
to use random, though severe,
spot checks, in the belief that
the very unpredictability of such
SOVIET INDUSTRIAL OUTPUT CONTINUES HIGH FOLLOWING REORGANIZATION
For the three months fol-
lowing the 1 July 1957 reor-
ganization of Soviet industrial
administration, output in the
Russian republic (RSFSR) was
12 percent above that for the
same period a year ago, accord-
ing to N. Baibakov, chief plan-
ner and first deputy premier
of the RSFSR. Linking the new
regional administration to this
increase, Baibakov implies that
the new form of administration
has been markedly successful.
The Russian republic is
the largest in the USSR and ac-
counts for roughly two thirds
of Soviet industrial output.
In 1955, the RSFSR accounted
for the following percentages
of total USSR output: steel,
59 percent; oil, 70 percent;
automobiles, 92 percent; cotton
cloth, 89 percent; cement, 65
percent; and coal, 58 percent..
For the first half of 1957
industrial output in the RSFSR
reportedly increased 9 percent
over the comparable 1956 period.
For the year 1956, the report-
ed increase over 1955 was al-
most 10 percent. If, in the new
control measures will act as
a deterrent to currency and
goods smuggling. The controls
have led to widespread dissatis-
faction and increased tension.
In some instances, strikes and
passive resistance have been
threatened if there is not some
relaxation. The present prac-
tices will probably be contin-
ued, however, as the East Ger-
man regime seems determined to
minimize the currency leakage
to the West and to assert its
authority.
conditions resulting from the
reorganization, the 12-percent
figure for the third-quarter
increase is comparable to that
used in arriving at a figure
for 1956, it would suggest con-
siderable success -for Khru-
shchev's reorganization scheme in
at least offsetting the initial
disruptions in supply and per-
sonnel accompanying the changes.
Some modification of the
new system may occur if the de-
tailed forecasts of plan ful-
fillment for the full year in-
dicate specific weaknesses not
now apparent. For example,
changes might be necessary in
the pattern of interregional
supply of raw and semifinished
goods, if press statements
stressing the priority of in-
terregional above intraregional
deliveries actually reflect mal-
functioning of the system of
supply. Such problems could
prompt consolidation of certain
of the 105 councils of national
economy and redefinition of the
economic regions administered
by them. (Pre-
pared by ORR)
SECRET
25X1
25X1
PART I I Approved For ReleasdN02W.: T?00927AO01500040o $e 5 of 19
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
YUGOSLAV REACTION TO ZHUKOV DISMISSAL
President Tito's absence
from the Moscow celebration of
the 40th anniversary of the
Bolshevik revolution suggests
that, as a result of the ouster
of Marshal Zhukov, the Yugoslav
leader is having second thoughts
about his alignment with the
USSR. Although Belgrade prob-
ably will not for the present
significantly alter any of its
policies which generally paral-
el those of Moscow, the Yugo-
slavs appear genuinely disturbed
over the possible ramifications
of Zhukov's removal and are un-
likely to take any steps which
would further their alignment
with Moscow until the inten-
tions of the new Soviet leader-
ship are clarified.
On 29 October Belgrade an-
nounced that a sudden attack
of lumbago would prevent Tito
from traveling abroad for the
next few months. The American
embassy reports, however, that
high Yugoslav officials at a
Turkish embassy reception on
29 October made no attempt to
maintain the position that Ti-
'to's illness was anything but
political. This is further
borne out by Tito's refusal to
grant an audience to the Soviet
ambassador on the latter's re-
turn from Moscow on 1 November.
Neither Belgrade's announce-
ment of Tito's "illness" nor
the curt Soviet acknowledgment
three days later was accompanied
by any statements of regret
concerning his absence from the
Moscow celebrations.
Tito apparently had con-
siderable personal confidence
in Zhukov and regarded him as
a stabilizing influence in the
Soviet hierarchy. High Yugo-
slav officials had indicated
previously their antipathy to
"one-man rule" in the USSR and
their support for the Khru-
shchev-Zhukov "team." On 1
November Jose Vilfan, a confi-
dant of Tito's, told the Ameri-
can chargd in Belgrade that
there had been no prior indica-
tions that Khrushchev intended
to upset the balance of power
within the Kremlin. Vilfan in-
timated further that a "reap-
praisal of the Yugoslav analy-
sis" of Yugoslav policy toward
the USSR is now required. The
fact that the Soviet leadership
was maneuvering to unseat Zhukov
while the latter was allegedly
representing the USSR on a good-
will visit to Yugoslavia has
undoubtedly contributed to Ti-
to's irritation.
Zhukov were disgraced, it worrr-
uld
be evidence of a very serious
situation. Press reports from
Belgrade state that the prev-
alent view within the Yugoslav
Foreign Ministry--despite Vil-
fan's implication of a Khru-
shchev-Zhukov fight--is that
Khrushchev, because of his pre-
carious hold on the Soviet cen-
tral committee, was forced to
cooperate with the so-called
Stalinists who initiated Zhukov's
removal.
This explanation is of
course consistent with the view
long held in Belgrade that the
Khrushchev-Zhukov "team" faced
serious opposition in the party
and required all possible sup-
port for its policies if the
opposition were to be overcome.
The Yugoslav radio announced
on 2 November that Soviet party
secretary Mikhail Suslov--a
Stalinist in Yugoslav eyes--de-
livered the final report before
the Soviet central committee
on Zhukov's ouster.
Yugoslav Vice President
Kardelj is heading the
SECRET
25X1
PART II NOTES AND COMMENTS pa 0 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927A00150004gU-3
 Approved For Release 2005/02/17: CIA-RDP79-00927A901500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
"party-state" delegation--prob-
ably the same that would have
accompanied Tito--now in Mos-
cow. While the other Communist
delegations are of a higher
level, Belgrade, by sending its
most prominent delegation since
the 1948 break to attend the
Moscow celebration, has clearly
indicated its desire to continue
its contacts with the Communist
world despite any displeasure
over recent developments in
Moscow. 25X1
RUMANIAN OVERTURES TO THE WEST
In an effort to enhance
the appearance of Rumanian in-
dependence of the Kremlin and
to bolster foreign trade, the
Bucharest government is making
another serious effort to im-
prove relations with Western
countries and to re-create the
relatively favorable diplomatic
climate which existed prior to
the Hungarian revolt.
It has reopened negotia-
tions with Bonn to facilitate
the repatriation of Germans in
Rumania, liberalized the grant-
ing of exit visas to Israel,
eased tourist and emigration
controls generally, permitted
the French to open a library
in Bucharest, promised to lift
the ban on American visitors,
and agreed to sponsor a tour
of the USIA's architectural
exhibit "Made in USA." Final-
ly, a Foreign Ministry spokes-
man intimated during a state
banquet for Senator Ellender
on 2 November that US Minis-
ter Thayer's long-blocked re-
quest for a public reading room
and permission to distribute
an American magazine would re-
ceive the favorable treatment
accorded similar French re-
quests.
Presumably, these initia-
tives were made after consulta-
tion with Moscow. When Foreign
Minister Ion Maurer returned
to Bucharest from his meeting
with the Yugoslavs, he summoned
many of his ambassadors home
for consultation before flying
to the United Nations. In New
York he unsuccessfully at-
tempted to secure a seat for
Rumania on the Political Af-
fairs Committee of the General
Assembly.
In keeping with their idea
that such diplomatic moves en-
hance their prestige, the Ru-
manians are seeking to play
down their subservience to the
Kremlin. When Senator Ellender
and Minister Thayer met with
top government officials last
week, politburo member Emil
Bodnaras complained that Ameri-
can officials refer publicly
to Rumania as a "satellite"
and "captive nation." Minister
Thayer noted the obvious ap-
probation with which Premier
Stoics and politburo member
Mogioros, who were also present,
accorded Bodnaras' rather emo-
tional outburst.
The Rumanians can be ex-
pected to capitalize on the
propaganda benefits which may
accrue from a relaxation of
emigration and tourist controls
and to attempt to convince the
free world of their sovereignty
and independence. Domestically,
they may hope that closer con-
tact with Western countries will
persuade the Rumanian people
that their government is ac-
cepted on equal footing by the
rest of the world.
SECRET
25X1
PART II NOTES AND COMMENTS Page 7 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY 'SUMMARY
ENLARGED SCOPE OF STATE FARMS IN SOVIET AGRICULTURE
The recent Soviet emphasis
on state farms in agriculture
has resulted in the formation
of 674 new state farms in the
USSR in the first half of 1957.
State farms have been increas-
ing in importance since the in-
itiation of the "New Lands" pro-
gram in 1954, and now account
for more than a quarter of the
total sown area, as compared
with approximately 12 percent
in 1953. Conversely, the role
of collective farms, still the
largest and most important sec-
tor of agriculture, has been
somewhat de-emphasized.
TOTAL
SOWN AREA
AREA SOWN
TO GRAIN
N.A.
CATTLE,
SWINE
SHEEP 4 GOATS
TRACTORS
(IN AG ICULTUMAL USE)
N.A.
COMBINES
N.A.
TRUCKS
IN AGRICULTUM AL USE)
N.A.
-,.- -7 II ,.0-3
Although state farms are
proclaimed by Soviet leaders to
be the highest form of organiza-
tion in socialist agriculture,
the current emphasis on the role
of state farms does not appear
to be based primarily on ideo-
logical grounds. Instead the
trend is apparently explained
largely in terms of the present
programs in Soviet agriculture.
Most of the state farms organ-
ized during 1957 were in the
remote steppe areas of Kazakh-
stan and the Volga areas where
the vast natural pasture lands
could be exploited as part of
the widely publicized program
for increasing meat and milk
output. This appears to be an
extension of the policy of rely-
ing heavily on state farms for
the development of virgin lands.
In these areas, as well as
in more highly developed regions,
state farms were also formed to
supplant existing farming units
which had proved uneconomical,
including "backward" collective
farms with excessive land re-
sources, and small farms under
the jurisdiction of various in-
dustrial ministries.
Other state farms were es-
tablished to implement the Sixth
Five-Year Plan directive to
create specialized dairy and
vegetable state farms for urban
supply, for developing the Golod-
naya Steppe and other irrigation
schemes in central Asia, and
for increasing production of
citrus, tea, and other specialty
crops.
Although the establishment
of 674 state farms in a six-
month period is without parallel
in Soviet agriculture, the re-
sulting institutional structure
should not be viewed as fixed.
Soviet agriculture has been
modified repeatedly in the past,
and experimentation will con-
tinue. From 1951 through 1956,
1,053 new state farms were
formed, including the 425 grain
farms organized in the "New
Lands," but during the same
period, 942 state farms were
liquidated. Changes over the
next few years may result in a
similar pattern. In any event
SECRET
STATE FARM PARTICIPATION
IN SOVIET AGRICULTURE
(PERCENT OF TOTAL)
1953 1956 1957
O 5 10 1s 20 25
PART II NOTES AND COMMENTS Page 8 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved For Re-lease 2005/02/17 : CIA-RDP79-00927AA01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Soviet leaders apparently do
not intend to convert the bulk
of collective farms into state
farms by 1960, as has been re-
25X1
25X1
(Prepared by ORR)
DI VITTORIO'S DEATH WEAKENS ITALIAN COMMUNISTS' HOLD ON LABOR
The Italian Communist par-
ty leadership is faced with a
difficult problem in finding a
successor to Giuseppe Di Vit-
torio, who died on 3 November
after a ten-year term as sec-
retary general of the Italian
General Labor Confederation
(CGIL). Likely successors
would not have Di Vittorio's
stature and popularity and must
be acceptable to the Communists,
the Nenni Socialists, and the
rank and file. The Communists'
hold on labor is threatened by
weakening morale in the labor
organization and an increasing
divergence of interests between
Communist and Nenni Socialist
members.
The CGIL's decline since
1952 has been evident in a con-
tinuing drop in membership and
its falling strength in shop
steward elections. It is now
believed to have about 3,000,-
000 members, compared with 4,-
000,000 in 1952, and this year,
for the first time, it has won
less than 50 percent of the shop
stewardships decided thus far.
A major factor in this decline
has been the subordination of
CGIL policies to the Communist
party's political ends.
Di Vittorio had made some
efforts to resist this exploita-
tion, and in August 1956 said
the CGIL should become independ-
ent of all political parties.
His reputation as an unorthodox
Communist may have been one
reason for talk at the 1956
CGIL congress about creating a
new position of "president" for
him, but his strong personal
influence over the organization
and the lack of a suitable suc-
cessor as secretary general en-
abled him to remain in his posi-
tion.
From the Communist point
of view, this is not a propi-
tious time to pick a successor.
The CGIL rank and file is un-
enthusiastic about the candidate
the Communists had favored in
1956, CGIL Secretary and Commu-
nist Deputy Secondo Pessi. A
Nenni Socialist such as CGIL
Secretary Fernando Santi would
probably seem undependable to
the Communists.
A likely compromise candi-.
date is Communist Senator Renaldo
Bitossi, who is also a CGIL sec-
retary and has a reasonably
strong following but is less
trusted than Pessi by the party
leadership. Another likely
candidate is Communist Deputy
Agostino Novella, a former CGIL
secretary. Oreste Lizzadri,
the fourth CGIL secretary, is a
Nenni Socialist considered to
have close ties with the Commu-
nists, but his tendency to put
his personal interests first is
likely to make him unacceptable
to the Communist party leader-
ship.
In any case, it will prob-
ably become increasingly diffi-
cult for the Communists to allow
the CGIL to bridge the gap be-
tween them and the Nenni Social-
ists, as occurred in July 1957
when the CGIL took a position
half way between the :two parties
SECRET
ported, and Soviet officials
have denied there is to be a
big switch to state farms. C
PART I I Approved For ReleasdO 29 Mk 00927A0015000400CJR&y'e 9 of 19
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
on the European Common Market
torio's successor. The CGIL
and EURATOM treaty issues.
and WFTU have differed on the
issues of the European Common
The CGIL's relations with
Market and Soviet policy toward
the World Federation of Trade
Hungary, even though Di Vit-
Unions (WFTU)
may also
be
af-
torio was also the WFTU presi-
fected by the
choice of
Di
Vit-
dent.
25X1
MACMILLAN GOVERNMENT FORCING SHOWDOWN ON WAGES ISSUE
Industrial strife is prob-
able in Britain this winter as
a result of the trade unions'
conflict with the Macmillan
government over general wage in-
creases. The government insists
that the pound sterling would
be weakened by further increases
unaccompanied by rises in pro-
ductivity. On 1 November the
government rejected an independ-
ent tribunal's recommendation
of a 3-percent pay raise for
workers in the National Health
Service.
Wage demands have already
been submitted by over half of
Britain's 9,000,000 trade union
members. The decisive test may
come in mid-December when the
government is expected to reject
the demands of some 500,000
railway men. Action on these
demands usually sets the pattern
throughout British industry, and
the railway men have forced pre-
vious Conservative governments
to yield by going on strike.
The government seems ready
for drastic measures. In the
past year prices have risen
about 4 percent, 1 percent more
than the previous year. Govern-
ment spokesmen maintain that,
despite any temporary gain in
Britain',s gold and dollar re-
serve position resulting from
the increased bank rate and
other credit restrictions, the
drain on reserves will continue
unless inflation is checked.
Trade unionists show no
signs of accepting the govern-
ment's argument on wages. They
are fully backed by the Labor
party, which has charged the
government with penalizing work-
ers for the results of a defec-
tive fiscal policy. Some inde-
pendent newspapers have made sim-
ilar charges. Labor leaders
probably hope to increase their
normal trade union support with
some of the 3,000,000 unionist
votes that usually go to the
Conservatives.
Chancellor of the Exchequer
Thorneycroft indicated to the
American ambassador on 3 Novem-
ber that the government is ready
to accept this political risk,
believing that it has consider-
able popular support on the wage
issue. Under the present condi-
tions of growing inflation, how-
ever, the Conservatives are
steadily losing their grip on
the electorate, as shown by
their loss of an average 7 per-
cent of the vote in the 13 by-
elections held since Macmillan
took office in January. They
evidently feel that success in
halting inflation would change
the political outlook by the
time a general election must be
called--May 1960 at the latest.
25X1
SECRET
PART II NOTES AND COMMENTS Page 10 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved For Release 2005/02/17: CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
The ten-day official visit
to London of Yemeni Crown Prince
Badr, which begins on 9 Novem-
ber, will encourage a continua-
tion of the present lull in
skirmishes on the Aden-Yemen
border, and may provide a start
toward a limited settlement.
The Yemenis regard the
visit as so desirable that they
have met significant British
preconditions, including with-
drawal from the disputed plain
of Shukair, and have retracted
their own demand for extensive
preliminary substantive talks
which they hoped Badr would
formally conclude in London.
The Imam appears to believe
that the trip will greatly en-
hance the prestige of the crown
prince, whose right to succes-
sion is opposed by many tribes
supporting the Imam's brother,
Prince Hassan. Badr's trip to
London is probably also intended
to offset his trip to the So-
viet Union and Eastern Europe
in the summer of 1956, and thus
make him less suspect in the
West.
At most, the Yemenis hope
for an agreement on establish-
ing a joint border patrol or
machinery for joint investiga-
tion of incidents. There ap-
pears to be good reason to be-
lieve, however, that the Imam
might maneuver his way out of
any commitments, as the pro-
Western Yemeni ambassador-des-
ignate to Moscow charges.
The British government ap-
pears to share such misgivings.
It hopes the talks may help to
do something toward reducing
the difficulties to be expected
from Yemen as a recipient of
Soviet equipment and Egyptian
counsel, but it is apparently
not inviting any of the native
rulers of the Aden Protectorate
to London now, as it had indi-
cated it would do if serious
negotiations were in prospect.
The British want to do
nothing to contribute to the
prestige of Badr, whom they
view with suspicion, partly be-
cause of his key role in ar-
ranging the supply of Soviet
arms. They presumably hope,
however, that his visit will
facilitate future dealings with
him should he succeed the pres-
ent Imam.
RETURN TO CIVILIAN GOVERNMENT IMPERILED IN COLOMBIA
A factional struggle with-
in the Conservative party in
Colombia imperils the prospects
of an orderly transition of
power from the military junta
to civilian control. The re-
pudiation by the right-wing
Conservatives of the joint Con-
servative-Liberal presidential
candidate may be seized by the
military as a pretext to re-
main in control.
The interim military junta
promised to restore civil gov-
ernment when it ousted dictator
Rojas last May. It has sched-
uled a plebiscite on constitu-
tional amendments for 1 Decem-
ber, presidential elections
next May, and its own withdraw-
al from government by August.
In an effort to avoid a resur-
gence of the traditionally bit-
ter and violent struggle be-
tween Liberals and Conservatives
in two-party Colombia, leaders
of both have reached agreement
on the bipartisan presidential
candidacy of Leon Valencia
SECRET
25X1
PART I I Approved For ReleaN9Tt /0?7 Ce M9-00927A00150004 e3 11 of 19
 Approved For... elease 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
and political parity in the
government for the next 12 years.
The return to constitutional
government is threatened by the
actions of the autocratic, ul-
traconservative ex-president of
Colombia, Laureano Gomez, who
is determined to dominate the
Conservative party at any cost
and is prepared to carry his
fight for control to the elector-
ate, where he may have majority
support. He now demands that
legislative elections be held
before the presidential elec-
tion--a move opposed by the
moderate Valencia faction, which
believes it can obtain a larger
share of the Conservative vote
once Valencia is securely in of-
fice.
Liberal leader Alberto
Lleras has reaffirmed his par-
ty's original support of the
Valencia candidacy but has im-
plied he will accept as the au-
thentic Conservative party the
faction which emerges strongest
from the elections for congress.
The question of when these elec-
tions are to be held is now be-
fore the junta and cabinet for
decision.
The Valencia wing, repre-
senting the industrial interests
which have been politically
dominant for decades, thus finds
itself in a precarious position.
Should the supporters of Gomez
emerge from the legislative
elections as the dominant fac-
tion of the Conservative party,
the prospects of the Valencia
wing will be dim once Liberal
support is withdrawn. In addi-
tion the present cooperation
between the two parties would
become much more difficult. Any
marked revival of interparty
strife may be used by the mili-
tary as an excuse to back down
on the proposed transfer of pow-
er to civilian control.
Little if any progress is
being made by the diverse and
antagonistic anti-Communist po-
litical groups in Guatemala to-
ward agreeing on a coalition
candidate for the presidential
election, which will probably
be set for January. If the im-
passe continues and the govern-
ment remains neutral as it has
promised, the Communist-infil-
trated Revolutionary party (PR)
might win. Government support
for any candidate would probably
set off renewed violence.
tial candidate, the leftist but
non-Communist Mario Mendez
Montenegro, would win the elec-
tion.
Communists are active in
the lower ranks of the party
despite repeated assurances from
its leaders that Communists would
be kept out. The president of
the pro-Communist law students'
association was recently added
to the party directorate after
Communists had demanded more
voice in policy makin
The PR, which emerged from owever, a
the late October violence as a ommunis s oppose the party's
probably the strongest single attempt to gain power now, be-
party, is actively organizing lieving that an economic col-
for the coming election. Many lapse, which they expect after
Guatemalans of diverse political a year or so of rightist rule,
convictions are convinced that will permit the PR and the Com-
the party's probable presiden- munists to take control in
SECRET
25X1
25X1
PART II NOTES AND COMMENTS ~a 12 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040 0
 Approved For_R Iease 2005/02/17 : CIA-RDP79-0092 X01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY STMA
the wake of a strong wave of
popular discontent.
The principal obstacle to
an anti-Communist coalition is
the determination of rightist
Miguel Ydigoras Fuentes, lead-
ing opposition contender in the
20 October election, to run
again. A group of army offi-
cers who distrust Ydigoras and
remnants of the moderate par-
ties which backed the late pres-
ident Castillo Armas are at-
tempting to agree on a candi-
date to oppose both the PR and
Ydigoras.
Even in this narrowed po-
litical spectrum, however, there
are bitter divisions and con-
flicting ambitions. Leading
presidential contenders of this
group are Lt. Col. Jose Luis
Cruz Salazar, young and ambi-
tious ambassador in Washington,
and the 49-year-old Col. Enrique
Peralta. Both have enemies in
the faction-ridden army and
neither is widely known to the
public.
It is unlikely that any
anti-Ydigoras, anti-PR coalition
candidate could win the required
absolute majority of votes in
the election unless he had ob-
vious support from the govern-
ment. Such official favoritism
would almost certainly provoke
renewed popular disturbances.
DEVELOPMENTS IN INDIAN ECONOMIC SITUATION
The Indian government took
action on 31 October to make
available nearly all of its
dwindling foreign exchange re-
serves to meet commitments un-,
der its second Five-Year Plan,
as widespread crop failures
tightened the squeeze on its
financial resources. New Del-
hi apparently is counting heav-
ily on American authorization
of additional surplus food ship-
ments to ease the new drain on
its foreign exchange necessitat-
ed by emergency food imports.
Since India's reserves
were expected to dip below the
statutory minimum prior to the
mid-November session of Parlia-
ment, a presidential ordinance
was issued on 31 October author-
izing reduction of the legal
reserve requirement from $630,-
000,000--the level of sterling
balances required since August
as backing for the currency--
to a new minimum of $179,000,-
000. This balance as well may
he drawn on for a limited peri-
od, but a gold reserve of $241,-
000,000 must be retained. On
the same day, the government an-
nounced that it would not con-
sider any new applications for
the purchase of capital goods
abroad--except for maintenance
and replacement purposes--which
required initial payments before
April 1961.
These financial measures
followed within a few days the
return of Finance Minister Krish-
namachari, who reported to the
cabinet on his trip to the United
States, Britain, and West Germany
is search of long-term loans.
Krishnamachari reportedly ex-
pressed "cautious optimism,"
mainly because he felt India's
economic situation was now better
understood abroad, but he re-
turned with no firm commitments.
The "sympathetic" consideration
given his appeals in Western
capitals will be followed by
more detailed study by each
government and further negotia-
tions.
As a result of the severe
drought in northern and central
India, Indian officials estimate
SECRET
25X1
PART II NOTES AND COMMENTS Page 13 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
that the government will have
to increase its imports of food
grains by at least 2,000,000
tons. The' minister of food and
agriculture told Secretary Ben-
son on 1 November that available
stocks of imported grain, in-
cluding reserves and expected
shipments, stood at not more
than 2,500,000 tons, little more
than eight months' supply at the
current rate of use. The Indian
off i vial expressed fear of a
break in the supply next spring,
and was concerned that the pub-
lic's lack of confidence in the
government's ability to supply
famine areas would have disrupt-
ing effects. The main question
on the mind of Indian officials
and reporters who talked to Sec-
retary Benson was how much ad-
ditional American surplus food
might be available and how soon
it could arrive.
PHILIPPINE ELECTION CAMPAIGN
The final phase of the
Philippine election campaign
has been marked by charges and
countercharges and some out-
bursts of violence. President
Garcia is still widely believed
to be maintaining an edge over
his opponents, but if elections
are free, the possibility of an
upset in the presidential race
cannot be ruled out.
In central Luzon, where an
American embassy observer re-
ports that Garcia is trailing
both opposition Liberal candi-
date Yulo and Progressive candi-
date Manahan, the President is
now stressing a "land for the
landless" theme. In the past
week, he has ordered the expro-
priation of five haciendas and
promised to help even the work-
ers on Yulo's sugar estate to
acquire the land they work. Yulo
and Manahan are charging that
Garcia is leading the country
to economic ruin, and Senator
`tecto of the Nationalist-Citi-
zens party is accusing the three
other parties of "political a-
nachronism" in the Asian strug-
gle for "economic equality"
with the West.
Although Garcia has pledged
the "cleanest, freest and most
orderly elections" on 12 Novem-
ber, there has been some ter-
rorism, including the slaying
25X1
of four Liberals on 1 November
by Nacionalista followers of
Garcia in his native province
of Bohol. The American embassy
also reports that local observers
in many Philippine provinces
continue to expect widespread
fraud and intimidation on elec-
tion day,
The agencies responsible
for the conduct of the elections
appear, however, to be making
an effort to ensure free elec-
tions. The Commission on Elec-
tions, which supervises the actual
balloting, has been actively in-
vestigating the financial state-
ments of all party treasurers
and reports of political distri-
bution of government relief funds.
About 11,000 constabulary
and army troops have been de-
ployed throughout the country
for election duty. Although con-
stabulary chief Cabal has desig-
nated at least 20 of the 53 prov-
inces as "potential trouble
spots," his assertion that "the
atmosphere is a lot calmer than
that which preceded previous
national elections" appears to
be borne out by a comparison of
reported pre-election incidents
with those preceding the 1953
and 1955 elections.
25X1
SECRET
25X1
PART I I Approved For Release X 02/4 'TDC?P- %0927A0015000400( ffe 14 of 19
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SVWRY
7 November 1957
The Indonesian government
has postponed the second na-
tional conference from 15 to
25 November. The postponement
apparently is intended both to
permit more time for conference
preparations and to give the
government-inspired campaign
to "regain" Netherlands New
Guinea greater opportunity to
penetrate the provinces and
stimulate national unity be-
fore the meeting opens.
Prime Minister Djuanda is
making no progress in his ef-
forts to restore an effective
partnership between President
Sukarno and former vice presi-
dent Hatta, a development which
he feels is the only course
which can forestall Indonesian
fragmentation and prevent Com-
munist control of Java. Sukar-
no will not accept Hatta as
prime minister, and Hatta re-
portedly is ready to announce
his support of those elements
opposing the President and his
political concepts. This newly
reaffirmed antagonism between
the two men and their supporters
is unlikely to be relieved by
either the national conference
or the campaign for the ac-
cession of New Guinea.
The second phase of the
government's "Regain West Irian
Drive," which is to be "executed
more fiercely," is scheduled to
begin on 10 November. A third
phase, the details of which have
not been revealed, will be car-
ried out at the time of the UN
General Assembly debate on the
subject, probably sometime after
18 November. Probably serving
to increase the intensity of
the campaign is a joint state-
ment issued on 6 November by
Australia and the Netherlands
reiterating their intention to 25X1
resist Indonesian demands.
A major objective of the
Irian campaign continues to
be the distraction of the Indo-
nesian public from its genuine
domestic problems and to raise
national sentiment to such a
pitch that it will reduce the
appeal of provincial demands.
So far, however, only provincial,
elements in Makassar, the major
city geographically closest to
New Guinea, have shown any sup-
port for the campaign.
The situation in North
Sumatra, where an abortive coup 25X1
in mid-October temporarily
threatened local violence, is
quiet for the moment.
Marshal Sarit, Thailand's much better condition than a few
armed forces chief, has returned months ago and is seeking to
to Bangkok after having spent give the impression he is in
most of October at a seaside full control of the situation
resort. While not in perfect in Thailand.
health, he appears to be in
SECRET
PART II Approved For Release ZD0 i2M1 S -V9S 0927A00150004000'fage 15 of 19
 Approved For-Release 2005/02/17 : CIA-RDP79-009274001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
There are growing signs
that conflicting interests
among Sarit's military subordi-
nates will become his most ser-
ious domestic problem.
The provisional govern-
ment under Premier Pote Sarasin
and the Sarit military group
have as yet shown no intention
of altering Thailand's pro-
Western foreign policy, which,
for domestic consumption, is
now labeled an "independent"
policy. During a 40-minute talk
with New York Times correspond-
ent Suzbergerrit insisted
that he personally would make
sure that only a pro-Western and
anti-Communist premier would
be appointed after the Decem-
ber elections. He also ex-
pressed his admiration for Pote,
which seems to confirm reports
that Sarit is urging Pote to
stay on as premier after the
elections. Pote, however, has
indicated a preference to re-
turn to his former position as
SEATO secretary general.
The election campaign re-
mains in low gear, although
voting is now only about a
month away. This situation is
probably attributable both to
the martial law which still
prevails in many parts of the
country and to the difficulties
many candidates for the 160
National Assembly seats at
stake are having in gaining
backers on such short notice.
The Laotian government and
the Pathet Lao have concluded
negotiations on the terms of a
settlement, and Prime Minister
Souvanna Phouma plans shortly
to request National Assembly
approval for a coalition govern-
ment. In view of the widespread
popular desire for an early
settlement, assembly approval
will probably be forthcoming.
Influential leaders such
as Crown Prince Savang and
Foreign Minister Phoui Sananilaxie
have expressed dissatisfaction
with the lack of safeguards in
the accords and resentment at
the high-handed tactics Souvanna
has used in his attempts to
drive through a final settlement.
However, their capability to
delay or significantly alter the
form of a settlement appears to
have been undermined as a result
of the recent equivocal behavior
of Interior Minister Katay,
formerly the leader of elements
working to restrain Souvanna.
The windup of the negotia-
tions came on 31 October when
Pathet chief Souphannouvong re-
portedly announced to leading
deputies of Laos' two major po-
litical parties in Souvanna's
office that the Pathets had ap-
proved the political agreement
as revised by the Laotian cab-
inet and would sign a military
agreement later the same day.
SECRET
25X1
PART II Approved For Release LOM2/ CIA%DI ? -00927A001500040001-e 16 of 19
 Approved Fo!elease 2005/02/17 : CIA-RDP79-0092 01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SMMRY
7 November 1957
Under these agreements,
Pathet Lao representatives will
enter a coalition government
prior to the actual take-over
of the two Pathet-controlled
northern provinces and the Path-
et 'forces.. Even when the
government extends its authority
over the provinces, the Pathets
will be in a position to frus-
trate its control at the grass-
roots level, since present Path-
et functionaries will remain at
their posts at the village and
town level, while at county
level 'the administrators
will be appointed on a 50-50
basis.
The military agreement ap-
pears to be more stringent in
that it stipulates that no more
than 1,500 Pathets will be inte-
grated into the royal army and
that all Pathet arms are to be
surrendered. The remainder of the
Pathet soldiers will be enrolled
in reserve status and transported
to their villages. Implementa-
tion of the military agreement
is to be com leted within 60
days. 25X1
CHINESE TO PRESS FOR FURTHER SCIENTIFIC COOPERATION WITH USSR
During Mao Tse-tung's visit ! Details of the plan have never
to Moscow for the 40th anniver-
sary celebrations the Chinese
plan to request considerable
aid and cooperation in scientif -
ic and technical matters and
press for agreements which would
give them a larger share in the
benefits of Soviet successes.
Missile and earth-satellite de-
velopment and nuclear advances
may be among subjects the Chi-
nese will discuss.
Two scientific and techni-
cal delegations, led by Kuo Mo-
jo, president of the Chinese
Academy of Sciences, were in-
cluded in Mao's entourage. One
group of 77, Peiping says, will
push for an agreement on joint
research and cooperation. The
"problems" of such cooperation
are to be discussed by a second
delegation of eight.
The larger delegation is
also intent on soliciting So-
viet opinions on Peiping's 12-
year scientific development
program drafted early in 1956.
been published, but the Chinese
have declared they hope to raise
their scientific competence to
Western levels by 1967. Chou
En-lai urged China's scientists
last year to study good points
of "capitalist" science and
technology, but spokesmen for
the regime have repeatedly em-
phasized that China must place
primary reliance on the "so-
cialist" bloc.
Nine of Communist China's
top military leaders, including
the armed forces' chief of staff,
and the commanders of the air
force, navy, and armored forces,
suddenly left Peiping for Mos-
cow on 6 November. They pre-
sumably were summoned by Mao
Tse-tung and Defense Minister
Peng Te-huai to join in high-
level talks with Soviet leaders.
The deputy leader of the Chi-
nese military delegation de-
clared recently that Soviet mis- 25X1
sile successes are "priceless
assets of all the countries of
the socialist camp."
(Concurred in by 051
and 25X1
SECRET
PART II NOTES AND COMMENTS Page 17 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved For_Release 2005/02/17: CIA-RDP79-0092ZA 01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY ?g-RY
7 November 1957
DROUGHT THREATENS WINTER CROPS IN COMMUNIST CHINA
Dry weather affecting most
of North China, large areas in
the central provinces, and parts
of South China has lasted over
100 days. The drought threat-
ens serious damage to next
spring's crop of winter wheat--
which normally accounts for 13
percent,of food crop produc-
tion--and the rape crop--source
of 20 percent of the country's
edible oil needs. Peiping has
ordered local party cadres to
devote their time to combating
the drought, and the official
People's Daily observed on 27
October that it has been "im-
possible for many localities
to fulfill their autumn plant-
ing assignments."
Meteorological reports in-
dicate that a high-pressure area
has dominated the region for
weeks, confirming the drought
reports. Weather maps as of
4 November showed that the high
remained over the area. Local
showers over the past two weeks
may have afforded some relief.
It is still too early to
predict with any certainty the
extent of the damage. A moder-
ate amount of rainfall in the
next two weeks would go far to-
ward saving the crops, as only
enough moisture to permit ger-
mination of the seed is neces-
sary this time of year. A West-
ern observer was told by a pro-
vincial authority in Hupeh that
HUNAN Drought-stricken provinces
HUNAN Provinces where drought poses more serious
SECRET
25X1
PART I I Approved For Release 'S 12MP c i-WffA%- 0927A00150004009VP 18 of 19
 Approved For-Release 2005/02/17 : CIA-RDP79-0092ZA401500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY S1 ARY
if there were no rain by early
November there would be "diffi
culties with the wheat."
Areas in Honan, Shantung,
and Anhwei, all traditionally
grain-deficit provinces, seem
to be in the gravest danger.
All suffered heavily from floods
earlier in the year. Peiping
radio reports that in Honan,
15,000,000 peasants are fight-
ing the drought and have sunk
150,000 emergency wells. A ,
youth brigade, working day and
night for five days, dug a 28-
mile canal to bring water from
the Yellow River to the parched
fields.
The regime is having trou-
bles enough with its agricultu-
ral programs and has undertaken
a campaign to persuade the peas-
ants, to comply with state tax-
ation, procurement, and collec-
tivization policies. China's
economic planners have already
revised the long-range plan
for agriculture and have prom-
ised more investment to that
sector in an effort to raise
farm output. Grain reserves
have been reduced to danger-
ously low levels, and Peiping
has warned that food-short
areas cannot expect to receive
relief supplies in the amounts 25X1
that tided them over natural
disasters in 1956.
SECRET
(Prepared by ORR)
25X1
PART II NOTES AND COMMENTS Page 19 of 19
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
 Approved For-RP-lease 2005/02/17 : CIA-RDP79-0092ZA0.01500040001-3
CONFIDENTIAL
PATTERNS AND PERSPECTIVES
The ouster of Marshal Zhu-
kov, just four months after his
elevation to full membership on
the party presidium and the dis-
missal of Malenkov, Molotov, and
Kaganovich, once again under-
lines the dynamics of change
in the leadership of
the Soviet Union. In
the known facts, re-
ports, and rumors re-
lating to Zhukov's
downfall, there is
enough reasonably re-
liable information to
make possible a ten-
tative reconstruction
of the actual events.
Rise of Zhukov.
and the Army
Khrushchev's
rise to power after
Stalin's death in
1953 was facilitated
by close cooperation
between the Communist
party and the Soviet army. Un-
til last month, each major Khru-
shchev victory in the party
presidium was accompanied by a
step upward by Zhukov in party
and government. Four years of
this alliance resulted in the
increased independence of the
armed forces from the political
controls of Stalin's day.
Evidence that Stalin's suc-
cessors intended to use the
army and Zhukov as a prop for
the regime Appeared the day af-
ter Stalin died, when Zhbkbv.
emerged from four years of vir-
tual exile as a first deputy
minister of defense. Zhukov
and the army played a major
role in the purge of secret po-
lice chief Beria in July 1953.
Zhukov's reward was promotion
from candidate to full member-
ship on the party central com-
mittee.
During 1953-55, Soviet
military leaders apparently be-
came fearful that Malen-
kov's program of increased con-
sumer goods production would
result in cutbacks in defense
production and perhaps in the
military budget. They accord-
inv_ly side' with Khrushchev in
favor of the contin-
ued primacy of heavy
industry. Their re-
ward came in February
and March 1955: Ma-
lenkov was ousted as
premier, Zhukov was
promoted to replace
Bulganin as defense
minister, and a num-
ber of top military
officers received
promotions.
Khrushchev con-
tinued to woo the
military at the 20th
party congress in
February 1956. In
his secret speech de-
nouncing Stalin, he
praised Zhukov's qualities as
a military leader and suggested
that he had often defended the
marshal against Stalin. Follow-
ing the congress, Zhukov was
made a candidate member of the
party presidium.
Zhukov was called on to
support Khrushchev for the last
time in June 1957, when,accord-
ing to most reports, he lined
up against Molotov, Malenkov,
and Kaganovich. In the realign-
ment.which followed the purge,
he was named to full membership
on the presidium, a promotion
which for the first time in.So-
viet history. placed a career
soldier in a position to exert
the full weight of the army on
the formulation of policy.
Other less spectacular con-
cessions were made to the army
during this period. One of
these appears to have been the
admission of professional mili-
tary officers into the ranks of
Approved For Release 0~ONF(~?flAL
02/17: 90-RDP7g-p0g~7A0015000400 1-3
PART III PATTERNS AND P-RSnECTIVES Pa?e 1 of 13
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
25X1 -
the secret police. Army influ-
ence may have played a major
role in the decision to split
Beria's secret police empire in
1954 and assign all secret po-
lice and intelligence functions
to the Committee of State Secu-
rity (KGB). The party also ap-
proved the concept of unity of
command which considerably re-
duced the powers of political
officers in the army. Politi-
cal deputy commanders below the
regimental level were removed,
and those at higher levels are
no longer able to countermand
the orders of 'the unit commander..
The result of this enhance-
ment of Zhukov's authority,
coupled with the gradual reduc-
tion of the party control mech
anism in the armed forces, was
the creation of a power center
which was gradually becoming
more independent of the party
and potentially inimical to its
leader.
The Developing Crisis
The point at which Khru-
shchev decided to move against
Zhukov is not known.
25X1
Crimea, returned to Moscow by 5
October. He faced a number of
serious problems if he was suc-
cessfully to cut Zhukov down to
size,. He had first to sell the
idea to the party presidium and
then, at the very least, to
neutralize the military estab-
lishment.
The dominance Khrushchev
had achieved in the party presid-
ium in June made the first task
easier. Nevertheless, he needed
some issue on which to base his
argument other than his desire
to eliminate a potential rival.
He seized on the role of the
party in the armed forces, part-
ly because there was some evi
dence that Zhukov had curtailed
party control in the army and
partially because the party lead-
ers are particularly sensitive
to the question of party control
over any and all sectors of So-
viet society. There are also
some suggestions that Zhukov
had taken his political role
more seriously than appeared
seemly to the other members of
the presidium, who may have be-
come apprehensive concerning
his political intentions.
25X1
25X1
Yugoslav General Gosnjak,
when visiting the Soviet Union
in June, had presumably invited
Zhukov to visit Yugoslavia.
Zhukov's trip ..may therefore
have been only a coincidence. of
which Khrushchev took advantage.
Zhukov, who is believed to
have returned from his vacation
in late September, left Moscow
25X1 for Yugoslavia on 4 October
1; 1,11, rus c ev, who
had been vacationing in the
By mid-October Khrushchev
had made considerable progress.
He had apparently secured ap-
proval to issue a secret letter
in the name of the central com-
mittee to party organizations
in military districts, armies,
formations, and units, and may
have received provisional ap-
proval for Zhukov's ouster pend-
ing reaction of military per-
sonnel to the letter.
SECRET
PART III Approved For R pp]M?/0 : p1C 7A0015000400iSi,& 2 of 13
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
The letter, dated 19 Octo-
ber, charged that party politi-
cal work in the armed forces
had fallen behind in recent
years, that the political ap-
paratus had been shoved aside,
and that commanders had not
properly. evaluated political
work in the army. Basic blame
was placed on the leadership of
the Defense Ministry, but nei-
ther Zhukov nor anyone else was
named specifically,,possibly to
leave an avenue for retreat if
there was adverse reaction to
the charges.
The traditionally apoliti-
cal attitude of the Russian
soldier and the legacy of the
drastic purges of the Red Army
high command in the 1930's may
have deterred any hostile re-
action by top military leaders.
However, it is possible that
Zhukov simply did not command
the respect, admiration, and
support in military circles
popularly attributed to him.
Otherwise, it is inconceivable
that greater security precau-
tions would not have been noted
in and around Moscow when news
of his demotion became known.
There is, in fact, a sug-
gestion that Zhukov's new polit-
ical role was resented by other
military leaders, that he may
have tended to lord it over them
and treat them as part of his
personal retinue. These charges,
at least, figure strongly in
the official communiquds and
editorials. First Deputy De-
fense Minister Ivan Konev, for
example, writing in Pravda on
3 November, said thatukov
strove to decide on his own all
questions relating to the lead-
ership of the armed forces,,with-
out listening to the opinions of
others and fully ignoring their
views." Such charges may have
been largely fictitious, but the
heavy play given them in offi-
cial propaganda suggests that
they have a strong appeal.
On 22 October, the presid-
ium again met and voted to oust
Zhukov as minister of defense.
At the same meeting, the trans-
fer of Marshal Konstantin
Rokossovsky from Moscow to head
the Transcaucasian Military
District was decided. Rokos-
sovsky's transfer may have been
intended solely to add to Soviet
pressure on Turkey in the Turk-
ish-Syrian crisis, but it is
conceivable that he was a strong
Zhukov supporter and was moved
in order to minimize his influ-
ence on the other top military
leaders and to serve as an ex-
ample to anyone who might be
inclined to waver from the par-
ty line.
The presidium's decision
and the reasons for the ouster
were explained to party members
in the armed forces at meetings
in military units all over the
Soviet Union. The meetings in
the Moscow Military District
were held on 24 and 25 October
with Khrushchev, speaking both
days, detailing the charges
against Zhukov.
Marshal Zhukov returned
from his trip on 26 October.
There is a possibility that Khru-
shchev had ordered Zhukov's stay
in Albania prolonged in order
to complete the action against
him. Certainly there is no 25X1
obvious reason in Soviet-Albanian
relations why he should spend
days the F"no- EtE
2 X1
Zhukov did not learn o his re-
moval until his return. The
25X1
Zhukov, however, may have 25X1
learned of the Rokossovsky trans-
fer and resented that it was
made in his absence.
25;
5X1
SECRET
Approved For Rele 0 aff?R5/02/17 C A- 79-00927A001500040001-3
PART III PAE S AND P R P CTIVES Page 3 of 13
 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
secret letter dated 1 November
to the party membership giving
some background details on Zhu-
kov's removal as minister of
defense and the other, the pub-
lished resolution of 2 November.
Zhukov was held guilty of (1)
frustrating party control of
the armed forces; (2) deliber-
ately promoting hero worship of
himself; (3) encouraging mis-
representation of World War II
history in his own favor and at
the expense of others; (4)
proneness to adventurism in for-
eign policy and management of
defense affairs.
Even if it is assumed--as
official Soviet treatment of
the case and obvious'leaks would
none can be disco
viet public media.
have it--that the main charges
against Zhukov that he tried
to weaken party control of the
armed forces and to build him-
self into a potential Bonaparte
are the real basis for the ac-
tion against him, there is still
no satisfactory explanation as to
why these issues became para-
mount at this time. The avail-
able evidence indicates that
Zhukov has long sought to hold
the party's interference in
military command functions with-
in limits determined by himself.
And if Zhukov's urge for self-
glorification was as overwhelm-
ing as the party now alleges,
it could hardly have been a
well-kept secret. Ther.e'would.
almost certainly.:have._been'vis
ible signs.of.any concerted 25X1
build-up of a Zhukov "cult,:" :yet
Only last June , barely three
months before Zhukov left Mos-
cow for Yugoslavia, he had been
promoted to the party's highest
body. Conceivably, a hot de-
bate over political control of
the military, of which there were
no public manifestations,. broke
out in the presidium after June.
The only published explanation
of this paradox by a Communist
source is that offered by the
Moscow correspondent of the
London Daily Worker who wrote
aImely: tfiThe appointment
of Marshal Zhukov as a full
member of the presidium of the
party at the last session of the
central committee, it was thought
that his position would change.
Instead, it was found that even
greater difficulties were being
placed in the way of the work
of the Communist party organi-
zations in the army and it was
also said that Marshal Zhukov
was getting himself boosted in
every sort of way."
The official charges against
Zhukov seem to be primarily
SECRET
5X1
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
PART III PATTERNS AND PERSPECTIVES Page 4 of 13
 Approved For.Release 2005/02/17: CIA-RDP79-00927AQ01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
debating points which evade
more fundamental causes of con-
flict. Unquestionably, Zhukov's
party position, his prestige,
and his command of a powerful,
organized force gave him at
least the potential for inde-
pendent political action. It
can only be conjectured when
and how Zhukov began to exer-
cise his power in a-, way to
arouse suspicion or fear in
Khrushchev and his party col-
leagues.
As minister of defense
and, later, as a full, voting
member of the presidium, he
would have had occasion to ex-
press himself on a broad range
of policy issues touching on
the military interest. The 2
November central committee re-
solution on Zhukov contained
the accusation that he was "dis-
posed to adventurism both in
his understanding of the main
tasks of the Soviet Union's
foreign policy and in heading
the Defense Ministry." Though
purposefully vague, the state-
ment points to issues of policy
beyond the question of polit-
ical control of the., armed
forces.
anecdote related by Khrushchev
at the Turkish National Day re-
ception on 29 October about the
little Jew and the burly anarch-
ist was intended as a hint of
a divergence on the USSR's pol-
icy.in the Turkish-Syrian dis-
pute. In this story Khrushchev
portrayed himself as following
a bold policy while the pro-
fessional soldier held back.
Whatever may have been
Khrushchev's purpose,. there
is no evidence to support the
thesis that Soviet actions in
the Syrian crisis precipitated
a showdown between Zhukov and
the party leaders. Zhukov's
strong statement in his Tirana
speech on 24 October about So
Viet readiness "to strike with
determination at any military
adventure near our southern
borders" conformed closely to
the official Soviet line as
stated by Khrushchev, Bulganin,
and Gromyko.
Another possibility is
that the issue goes back to the
1956 crisis in the satellites
and the Middle East and that
Khrushchev is accusing Zhukov
of taking a tough line at that
time which limited Khrushchev's
freedom of action.
There are some indications
that another difficult and del-
icate: issue may have arisen
between Zhukov and the nonmili-
tary members of the presidium--
the issue of control of the
security apparatus. There is
little doubt that Zhukov had
used his influence to limit the
powers of the police. It is
not unlikely that one of his
main political objectives was
to ensure against a resurgent
police organization.
Khrushchev, in speeches to the
party organization of the Mos-
cow Military District on 24 and
25 October, alleged that Zhukov
had sought the removal of I.A.
Serov as security chief and
SECRET.
25X1
-009 PART III Approved For Re41W/0'~I - ;PCVkRy 7A0?1500040~age 5 of 13
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
his replacement by a military
man and had also recommended
the appointment of Marshal
Konev as minister of interior.
It is conceivable also,
though Soviet comments do not
suggest this, that Zhukov was
removed because he may have re-
sisted economic allocation pol-
icies which implied a reduction
in military expenditures. Khru-
shchev is publicly committed to
increase foodstuffs, housing,
and consumer goods, to main-...
tain a high rate of industrial
growth, and, of course, to main-
tain a high rate of defense ex-
penditures. The problem is how
to do everything at once. The
necessary decision on priorities
is almost bound to arouse some
further dissatisfaction and it
is within the realm of possi-
bilities that Zhukov was re-
moved because he opposed a
solution which would force the
Soviet military machine to give
up, for example, some part of
its 175 divisions.
On the face of it, Khru-
shchev has again won the day
and it seems entirely possible
that he can parlay his winnings
to achieve eventual one-man
control. There certainly are
strong signs that this is the
goal, and it might be expected
that having already gone so far
in this direction, Khrushchev
would feel compelled to complete
the job quickly.
In many ways the time is
ripe. Certainly the power of
most of the other presidium
members is now only a shadow of
what it was immediately follow-
ing Stalin's death, and six of
the ten veteran presidium mem-
bers--the Stalin heirs--have
been deposed. The party ap-
paratus headed by Khrushchev
has in turn beaten down the po-
lice, the economic bureaucracy,
and now the army.
Some of the consequences
of the latest move are quite
obvious. Khrushchev's policy
has consistently been to':
strengthen the standard party
organs at the expense of the
special political organs. He
may be expected to bring the
armed forces more closely under
the direct authority of the .
party central committee, per-
haps by dissolving the special
political organs in the armed
forces as he has eliminated
them from agriculture and trans-
port. The sole arm of the party
in the military would then be
the standard party organiza-
tions, subordinate to the party
apparatus which Khrushchev ap-
parently controls, and the armed
forces as an independent locus
of power would be weakened con-
siderably.
Another important implica-
tion is that with the possible
exception of Mikoyan, the removal
of Zhukov leaves no strong figure
in the presidium who could be ex-
pected-to exert an effective re-
straining influence on Khru-
shchev's impetuousness. As a
result, Khrushchev's policy will
probably more than ever be So-
viet policy, and policy formula-
tion may pass gradually from
the hands of the presidium mem-
bers to those of the central
party apparatus.
This latest move, of course,
is bound to have undesired ef-
fects. Among the populace, the
apathy and cynicism noted after
the June purge will probably in-
crease, and the purge of Zhukov
will add to the doubts and un-
easiness of the public in gen-
eral. The extent to which the
leadership and propaganda ap-
paratus has been employed in
stating the regime's case in-
dicates the seriousness with
which the question of public
opinion is regarded.
Effect on Military
Opposition within the So-
viet military hierarchy is not
expected to express itself open-
ly in either violence or formal
complaints. Surprise and some
SECRET
PART IIIApproved For Ry.My?/0 :Iqfif7A00150004000 6 of 13
 Approved For F3elease 2005/02/17 : CIA-RDP79-0092ZA001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
resentment at the lower levels
undoubtedly will be countered
with effective political in-
doctrination.
Given the probable desire.
on the part of the leadership
to present a semblance of unity,
the traditional nonpolitical
role of most officers, and the
opportunism of others, there is
not likely to be a far-reaching
purge resembling that of the
thirties. There probably are
strong pro-Zhukov elements in
the military, however, who, in
time, will feel the effects of
his degradation. Retirements
and reassignments are likely to
occur, including some within
the Defense Ministry.
Party Reaction
Khrushchev may find that
his greatest obstacle lies with-
in the apparatus of the party--
the very instrument of power
which he has fought to strengthen
since becoming first secretary
it September 1953. There have
already been suggestions that
Khrushchev has not been able
to exert full control over the
central committee despite his
success in adding his followers
to its membership. The plenum
of December 1956 and probably
also that of June 1957.ma.y not
have moved exactly as?Khru-Phchev
Not all the changes that
may occur will be politically
motivated. It would be normal,
for example, if Marshal Malin-
ovsky should appoint some of
his former associates or friends
to key staff and command posi-
tions which, in turn, could be
reflected in the lower echelons.
Some of the appointments may be
a combination of this factor and
political considerations. While
Malinovsky may be expected to
desire a chief of staff of his
own choosing, the removal of
Marshal Sokolovsky would also
serve Khrushchev's political in-
terests.
There is little evidence
on which to base political align
ments within the Soviet military
hierarchy, and the lines of
cleavage, always obscure, may
change with the political tides.
It is generally assumed, how-
ever, that Marshal Sokolovsky at
least, and possibly Marshals
Meretskov and Vasilevsky, are
pro-Zhukov.
had planned.l
There have been some sug-
gestions that the secretariat
is not completely subservient
to Khrushchev.
Party Secretary Suslov be-
longs to a Stalinist faction
and cannot be considered in
Khrushchev's.camp. These hints
of continuing division within
the leadership, plus the obvious-
ly disquieting effects of two
purges of the hierarchy within
four months and the implication
that Khrushchev is bent for to-
tal power, could bring about a
move against him while some
chance of success still remains.
There are other possible
developments which would in-
crease the opposition to Khru-
shchev. A move on his part
to make the secret police his
25X1
25X1
25X
25X1
25X1
25X1
SECRET
PART I IIApproved For Re qh% j02/ ,b: yFjj 1Qa 7A0015000400Q1_--ge 7 of 13
 Approved FonRelease 2005/02/17 : CIA-RDP79-00924001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
personal tool would undoubtedly
provoke the strongest reaction
and he might therefore wish to
avoid it. Yet personal control
of the secret police is the next
step in achieving a one-man
dictatorship, and the temptation
to seize this control and there-
by prevent the development of
another plot against him would
be very powerful indeed.
Foreign Policy
There has been considerable
speculation that the purge of
Zhukov means the removal of an
important restraining influence
on an impetuous and unpredict-
able Khrushchev. This inter-
pretation, however, may rest on
a superficial reading of Khru-
shchev's character and his
methods and tactics in the for-
eign policy field. He has shown
a high degree of skill in ex-
tracting the maximum political
advantage from such issues as
the Suez conflict, the Turkish
Syrian dispute, and disarmament
POLICY TRENDS IN THE NEW WEST GERMAN GOVERNMENT
West Germany is likely to
demonstrate during Chancellor
Adenauer's third term a more
self-assertive role within the
framework of the Western al-
liance. Increasingly distrust-
ful of leaving its fate in the
hands of other major powers,
Bonn will probably seek a grad-
ual extension of its political
influence to a point commensu-
rate with its already impor-
tant world economic position.
In the military field, Defense
Minister Strauss is likely to
concentrate on equipping exist-
ing forces with modern weapons.
In foreign policy, an early ef-
fort toward improving relations
with the Eastern European satel-
lites, particularly Poland, seems
likely, although Tito's recogni-
tion of East Germany may delay
this step.
These moves would be logical
extensions of the accomplish-
ments of the Adenauer govern-
ments over the past eight years,
in which stress had to be placed
first on economic reconstruction
and political rehabilitation.
The altered emphasis to be ex-
pected now is reflected in Ade-
nauer's cabinet changes. While
most of the cabinet remains in-
tact, the prominent position
given Ludwig Erhard as vice
SECRET
by assuming forceful, even
threatening, postures. However,
this public posture has thus
far always been accompanied by
careful avoidance of any action
committing the USSR to a course
which might lead to the involve-
ment of Soviet forces in a mili-
tary conflict.
The principal device of
Khrushchev's diplomacy in both
the Suez conflict and the Turk-
ish-Syrian dispute has been the
use of calculated ambiguity in
statements setting forth Soviet
positions and intentions. This
technique reflects, not a tend-
ency toward impetuous and-reck-
less action, but rather a cool
and astute appraisal of oppor-
tunities for scoring heavy po-
litical gains against the West-
ern powers. It is a technique
which Khrushchev probably con-
siders he can employ with ins
creasing effectiveness as the
military strength of the Soviet
bloc grows. 25X1
Contributions
by ORR)
PART III Approved For R "J%6/%47 0J* ?J -fJ%27A001500040~1-3 8 of 13
 Approved For_Rglease 2005/02/17 : CIA-RDP79-00927AO01500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
chancellor and economics min-
ister is indicative of the
forthcoming shift toward a more
expansive foreign, military,
and economic policy. In re-
placing Fritz Schaeffer as fi-
nance minister with Franz Etzel,
Adenauer has done away with
an ultraconservative financial
influence which would, among
other things, have blocked he
desired new changes in mili-
tary policy.
Military Policy
Defense Minister Strauss
has already indicated that an
increase in the defense budget
will be necessary to support a
continued build-up of the armed
forces. He is still planning,
however, a commitment to NATO
of only 340,000 men by 1961
instead of the original German
figure of 500,000. Strauss
has placed some emphasis on
the creation of home-defense
forces, to be solely under Ger-
man command, which on at least
one occasion he indicated
might eventually reach the goal
of 200,000 men.: If this plan
should be adopted, Strauss would
have thus split the original
500,000-man NATO goal between
NATO and non-NATO forces.
The Defense Ministry has
also shown growing interest in
obtaining modern weapons. It
has been opposed to any ac-
celerated build-up of its NATO
contingent before NATO has
thoroughly considered the im-
plications of modern weapons
developments. In forthcoming
NATO and WEU meetings, the Ger-
man delegation is expected to
raise the question of obtain-
ing nuclear weapons, and also
to argue in favor of a German
contribution based on the
smaller, more mobile pentomic-
type divisions supported by
modern weapons, including mis-
siles. Bonn has already 'in-
formed the United States, Brit-
ain, and France of plans to ask
for a revision of the WELL treaty
in order to permit a German firm
to produce a small antitank mis-
sile which it has developed.
Strauss' defense policies
will encounter opposition in
the Bundestag, since both the
Social Democrats and Free Demo-
crats continue to favor a small
professional military force and
have made a major issue of the
atomic weapons question. The
government's majority, however,
should ensure the increased de-
fense appropriations it seeks.
Economic Policy
Franz Etzel's appointment
is regarded by political ob-
servers as?a concession by Ade-
nauer to industrialist circles,
and his policies are expected
to reinforce Erhard's continu-
ing efforts to expand Germany's
foreign trade. There are some
indications that, with this
aim in view, the government
will initiate a more extensive
program of technical assistance
and other forms of economic aid
to the underdeveloped countries.
SECRET
PART III Approved For ReQW5/02/17 PERSPECTIVES 7A001500040 Page 9 of 13
 Approved Fop-Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
Within the Federal Re-
public, Etzel can be expected
to promote policies designed to
encourage private savings as
a new source of capital for in-
dustrial growth. In addition
to extensive tax reforms, the
trend toward deficit budgets
will also continue, as well as
some liberalization of corpora-
tion profit taxes. The estab-
lishment of a new ministry for
state-owned property will fa-
cilitate the new policy of
selling stock in the govern-
ment's industrial holdings--
such as the Volkswagen plant--
as an additional stimulant to
investment by small shareholders..
Inflationary pressure can
be expected from some of these
programs, but the administra-
tion has already taken some
countermeasures, such as reduc-
ing tariffs, increasing reserve
requirements for foreign de-
posits, and making an advance
payment to the International
Bank for Reconstruction and
Development. Nevertheless,
American officials in Bonn ex-
pect prices to go up 2 to 3
percent in the next six months.
Foreign Policy
Adenauer's election victory
was generally interpreted as
an affirmation of the "policy
of strength" through the NATO
alliance, and the basic ele-
ments of Bonn's foreign policy
will continue unchanged. There
is, however, an inclination for
a more "active" policy toward
the Soviet bloc.
The opposition parties
have long pressed for an ex-
pansion of trade relations with
the Eastern European satellites
and even for the establishment
of political relations. A com-
prehensive review of Eastern
European policy was being con-
ducted by the Foreign Ministry
when Tito's recognition of East
Germany precipitated a crucial
decision as to how far Bonn
should go in creating a favor-
able atmosphere for a rapproche-
ment with Poland. The Social
Democrats and Free Democrats
will continue to prod the gov-
ernment to improve relations
with the East. Any action
taken in this direction will
be endorsed by the opposition
parties, but anything short of
the achievement of reunifica-
tion will still be decried as
insufficient.
WEST GERMAN CABINET OCTOBER 1957
TITLE
Chancellor
Vice Chancellor and
NAME AND AGE
Konrad Adenauer - 81
Minister of Economics Ludwig Erhard - 60
Ministers of:
Foreign Affairs Heinrich von Brentano - 53
Defense Franz Josef Strauss - 42
*Franz Etzel - 55
Interior Gerhard Schroeder - 47
Justice Fritz Schaeffer - 69
Atomic Affairs and
Water
Labor and Social
Structure
Transportation Hans-Christoph Seebohm - 54
Post and
Telecommunications *Richard Stuecklen - 41
Refugee Affairs Theodor Oberlaender - 52
Food and Agriculture Heinrich Luebke - 63
Housing *Paul Luecke - 42
Family Affairs Franz-Josef Wuermeligg - 56
Bundesrat Affairs Hans-Joachim von Merkatz - 52
Federal Property ?Hermann Lindrath - 61
? New Members
7 NOVEMBER 1957 71105 3
Although the Foreign Min-
istry favored a break with Bel-
grade for reasons of prestige
and to discourage further rec-
ognition of East Germany, the
explanation of this policy was
couched in such a manner as to
allow an approach to Poland.
Chancellor Adenauer, in his
policy statement on 29 October,
referred to West Germany's "de-
termination to settle the ques-
tions still in dispute" with
the Soviet bloc countries in a
peaceful manner.
SECRET
25X1
PART III Approved For $IQA517p~~~pf~ g927A00150004Q00g1e 10 of 13
 Approved For Release 2005/02/17 : CIA-RDP79-00927A001500040001-3
. SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
In planning closer rela-
tions with the. satellites,
Bonn's main political motivation
is the hope that diplomatic re-
lations would provide an oppor-
tunity for weakening Polish
support of East Germany and en-
listing support for at least
some of Bonn's unification terms.
Increased trade and economic
aid are seen as means of
strengthening the Gomulka gov-
ernment and encouraging a more
independent Polish foreign
policy.
NEW PAKISTANI GOVERNMENT'S GROWING ECONOMIC PROBLEMS
The new Pakistani govern-
ment under Prime Minister Chund-
rigar, though retaining the pro-
Western foreign policy outlook
of its predecessors, seems like-
ly to reverse the trend started
by former prime minister Suhra-
wardy toward more rapid economic
progress and to revert to drift-
ing policies. This refusal
to face up to economic realities
may result in serious deteriora-
tion of the country's economy.
Increased economic instability,
coupled with continuing politi-
cal confusion, would neutralize
the effectiveness of American
military aid and probably make
Pakistan increasingly dependent
on foreign economic assistance.
Pakistan has suffered from
political instability throughout
the ten years of its existence.
Its national constitution was
put into effect only in 1956,
and it still has not held its
first national election. Its
economic development has been
slow, and plans prepared by the
government have not been effec-
tively implemented.
economic miracle,
Suhrawardy, during his 13
months in office, performed no
did, however, accomplish two
important things. By close
personal attention, he material-
ly improved the efficiency and
morale of government departments
and gave their personnel for
the first time in recent years
a sense of "going somewhere."
He also began a concerted at-
tack on Pakistan's most press-
ing economic problem--that of
increasing food production.
New Government
Chundrigar, the new
minister,
cabinet represents mainly the
landowning elite of West Paki-
stan, a group which is not likely
to take decisive action on such
SECRET
25X1
25X1
5X1
25X1
5X1
Approved For 05 02/17 : CIA-RDP79-00927A001500040001-3
PART III 5XIM, ND PERSPECTIVES Page 11 of 13
 Approved For-Release 2005/02/17 : CIA-RDP79-00921A001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
essential programs as land re-
form and rural development for
fear of losing its political
and economic power.
Cabinet members, during
their tenure in office, will al-
most certainly be more concerned
with politicking than with eco-
nomic development, a subject.in
which most have neither train-
ing nor special interest. Their
positions are shaky at present
and the existing government coa-
lition may not last long. Since
any successor government would
take some time to consolidate
its position politically, eco-
nomic development seems virtual-
ly certain to be retarded for
a considerable period, and one
or more of the country's econom-
ic problems may in the meantime
become critical.
Food and Population
In the last ten years,
Pakistan's food production has
not increased significantly,
while the population has risen
by about one million persons
annually. Previously self-suf-
ficient, Pakistan now must im-
port 600,000 tons of grain each
year to maintain its 1948-52
level of supply. Because of
summer flood damage in 1957, it
has recently requested 100,000
tons of additional emergency
wheat shipments from the United
States for this year.
Trade and Payments Position
Production of raw jute and
cotton, Pakistan's two largest
foreign exchange earners, has
been relatively unsatisfactory
this year. Exports of jute
goods for the year ending in
June were below the previous
year in quantity' and,:, de-
spite good prices, declined 15
percent in value. World demand
for jute is dropping gradually,
and the future of the industry
is bleak. Exports of cotton
declined during the year ending
in July, and Pakistan seems to
to be losing most of its markets
other than France and Japan.
Tea production showed a 21.8-
percent decrease between April
.and August 1957, as compared
with the same period in 1956,
while there was a 95.2-percent
drop in tea exports.
At the same time its for-
eign exchange earnings have
gone down, Pakistan has found
the price of imports going up.
Its balance of trade has been
adversely affected, and was un-
favorable by $56,000,000 for
the year ending June 1957. Its
balance of payments position
also deteriorated, the present
balance being $131,300,000 less
than in June 1956.
Most of the increase in
payments was on behalf of the
government, a large part for
food grains, and this seriously
limited exchange allocations to
private business. Private pay-
ments rose only slightly during
the year. Foreign exchange re-
serves were reduced by $40,800,-
000 during the year ending in
June, and in that month stood
at $252,105,000. By the end
of August, they were still go-
ing down and were reported as
fast nearing the minimum safe
level.
Pakistan's money supply
increased by $94,500,000 from
July 1956 to June 1957, follow-
ing an increase of $136,500,000
in the preceding year. The
government's rate of deficit
financing reportedly is running
at twice the level anticipated
in the budget, and inflation
has become an increasingly seri-
ous-problem. Since 1955, for
example, inflation in East Paki-
stan has caused an estimated
20- to 25-percent price rise
in mass consumption goods.
Development Plans
Despite the fact that the
development program seemed to
be stimulated during the first
half of 1957 under Prime Minis-
ter Suhrawardy,' industrial
SECRET
PART III Approved For fthmg W5 17pp,1 -pl l?J9jW27AO0150004 e3 12 of 13
 Approved For-Release 2005/02/17 : CIA-RDP79-00927A.001500040001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
7 November 1957
production leveled off somewhat
during the year. Well-informed
sources estimate that West Paki-
stan manufacturing plants are
operating at only about 50 per-
cent of capacity. There has
also been considerable bickering
within the government on the
nature and advisability of con-
structing new steel and ferti-
lizer plants. Pakistan's trans-
poration system is overburdened,
and no significant progress in
improvement is being made.
On 7 September, the Paki-
stan Planning Board, on the in-
structions of the finance minis-
ter, recommended a 40-percent
cut in development expenditure
targets for fiscal 1959. This
indicates that the Five-Year
Plan (1955-60) will fall well
short of its goals. Despite
the cut in expenditures, Paki-
stan will probably find it dif-
ficult to increase exports to
compensate for more expensive
imports. Defense expenditures
are still running high, and an
all-out effort is needed to
step up domestic production.
Widespread labor unrest
was evident during October. A
nationwide strike of post and
telegraph workers and a strike
of government employees in East
Pakistan were staved off by
promises to review pay scales.
SECRET
A strike of. 20, 000 workers at
the Adamjee Jute Mills in East
Pakistan closed the mills. A
strike of the Transport and
Carriers Union swamped the rail-
way and dockyards in Karachi.
A strike at the Wah Ordnance
Factory continued and the Paki-
stan Petroleum Workers' Federa-
tion served notice on all major
oil companies of an impending
strike. This unrest is the
result of the steadily increas-
ing cost of living.
International Disputes
In addition to these do-
mestic matters, Pakistan faces
such international issues as
the disputes with India over
Kashmir and the distribution
of irrigation canal waters. The
present government leaders seem
less qualified than Suhrawardy
to handle negotiations. As
long as serious economic prob-
lems plague this leadership,
India will be disinclined to
make any major concession to
its smaller neighbor. Indian
High Commissioner Desai in Ka-
rachi recently indicated that
anyone would make a better prime
minister than Suhrawardy, ap-
parently indicating that, from
India's point of view, Suhra-
wardy might eventually have
strengthened Pakistan to India's
disadvantage, while under Chund-
rigar there'is no such danger.
25X1
PART III Approved For PA" q, 0 (j1,R?Wpp@ l ?927AO01500044a%1e313 of 13
 25X1 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500040001-3