CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
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• Document Creation Date: December 20, 2016
• Document Release Date: June 5, 2006
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• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
OCI NO. 1793/58
12 June 1958
I)OCUMENT No.
n, ASS. 13
p D#C1.A ~~r~~,.
CLt $. CN a TO,
AUTH: R 70 25X1
RE'l1EWER:
pATE~
CENTRAL INTELLIGENCE AGENCY
III OFFICE OF CURRENT INTELLIGENCE
State Dept. review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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UUJVI-IUENIIAL --
CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
DE GAULLE'S PROBLEMS . . . . . . . . . . . . . . . . . . . Page 1
General de Gaulle faces increasing criticism, both
from extrema :rightists and from the French Communist
party, which may resort to other than legal methods of
opposition. Algeria, is his most urgent problem and it
is not yet clear that his rebuke to the all-Algeria Pub-
lic Safety Committee has brought extreme rightist agi-
tation under control. De Gaulle appears, however, to
have narrowed the rift between Algeria and the metropole.
Although still determined to fight on for independence,
Moslem nationalist rebel leaders are apparently fearful
of the possible effects of the French integration offer
on the Moslem *asses and on the rebels' international
position. Meanwhile, Tunisia has accepted "substantial-
ly all" of France's proposals to evacuate the 9,000
French troops outside Bizerte in four months, but has
balked at giving written assurances that Bizerte will
remain at the disposal of French forces. 25X1
LEB SE SITUATION, . . . . . . . . . . . . . . . . . . Page 4
The rebel forces appear to be stepping up their ef-
forts in anticipation of establishment of the UN observa-
tion group. In Lebanon the political lines have hardened
and the domestic economic situation'.is deteriorating
steadily.
TURKEY CONSIDERING SOVIET ECONOMIC HELP . . . . . . . . . Page 5
r key as urgently re-
quested Western economic a ut is impatient over the
length of time required for surveys, such as the one about
to get under way by the OEEC and IMF. 25X1
INDONESIA . . . . . . . . . . . . Page 6
The government's military campaign against North
Celebes has increased in intensity during the past week,
and the encirclement of the dissident capital of Menado
appears to be progressing rapidly. Although discussion
CONFOMTiAL
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
..PART I (continued)
of a cabinet reshuffle is continuing, a high Indo-
nesian official has told the American ambassador
not to'expect any changes before the end of June.
PART II
NOTES AND COMMENTS
SOVIET NUCLEAR POWER PROGRAM DELAYED . . . . . . . . Page 1
As a result of 'difficulties in carrying, out its
nuclear power program, the USSR will probably be able
to complete only one third to one half of its orig-
inal announced goal by the end of 1960. Nevertheless,
with an installed capacity in stations designed for
power production of about 700 electrical megawatts,
plus at least 200 electrical megawatts derived from
plutonium production reactors, the USSR will probably
rank first in the world in installed capacity by the
SOVIET INTEREST IN WESTERN PLANTS AND EQUIPMENT . . . . . Page 2
Soviet interest in purchasing machinery and equip-
ment in Western markets was given renewed publicity by
the Soviet announcement last month of new plans for ex-
pansion of the USSR's chemical industry, and by 1hruc;.
shchev's trade proposal to the United States last week.
The USSR has been seriously negotiating for Western
plants and equiprent' since. mid-1957. Declarations
that current, Soviet requirements could result in an
expansion of trade with the United States alone to
several billions of dollars in the next few years,
however, overstate Soviet trade capabilities in com-
modities desired by the United States.
INSTRUCTIONS ON RELATIONS BETWEEN SOVIET ARMY AND PARTY
REVISED . . . . . . o . . . . . . . . . . . . . . Page 4
The "Instructions to Party Organizations in the
Soviet Army an.d Navy" Issued in 1951' have been'revised,
according to recent articles in Red Star and Soviet
Fleet. The original instructions were intended to de-
fine the ektent of party control of military affairs,
but recent evidence indicates that the new instructions
have not resolved the differences between military of-
ficers and party cadres in the arme'd' forces, The re-
visions seem intended to outline more clearly the rights
and privileges of the military commanders vis-a-vis the
party.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
PART II (continued)
SOVIET COMPOSERS OFFICIALLY CLEARED . . . . . . . . . . . Page 5
A decree of the Soviet party central committee of
28 May officially clears Dmitri Shostakovich, Aran
Khatchaturian, the late Sergei Prokofiev, and other
leading Soviet composers of the stigma attached to
their names during the Stalin era. The new decree,
which attributes much of the blame to Molotov, Malen-
kov, and Beria, is probably designed to serve several
purposes: to confirm Khrushchev's cultural policy of
"comradely persuasion" of erring artists, to facili-
tate the planned exchange of composers with the United
States, and to discredit Malenkov and Molotov in yet
another sphere.
YURY ANDROPOV, SOVIET ADVISER ON BLOC POLICY . . . . . . . Page 6
Recent activities of Yury Andropov, Soviet ambas-
sador to Hungary at the time of the Hungarian revolt
in October-November 1956, suggest that he may have in-
creased influence on Soviet policy toward the bloc.
He is now head of the Soviet party central committee's
department dealing with bloc party affairs. 25X1
CHURCH-STATE TENSIONS INCREASE IN POLAND . . . . . . . . . Page 7
Tensions between the church and the government in
Poland, which have long smoldered beneath the surface,
are now being discussed in the press. If the conflict
is intensified, popular opinion will almost certainly
rally to the church, thereby further reducing party
First Secretary Gomulka's popularity. Gomulka and the
Polish primate, Stefan Cardinal Wyszynski, met for
the first time on 7 January 1958 in a ten-hour dis-
cussion. Wyszynski?s major demands were rejected
by Gomulka, and the regime will probably not grant
more than the minor concessions already made.
YUGOSLAVS TAKE PRECAUTIONARY MEASURES AGAINST PRO-
COMINFORMISTS . . . . . . . . . . . . . . . . . . . . . Page 8
The reported arrests in Yugoslavia of Soviet
sympathizers are probably precautionary in nature
and not indicative of a substantial active opposi-
tion to Tito. Belgrade is determined to forestall
any Soviet intrigues with dissident Yugoslavs simi-
lar to those which developed following the 1948
break. The arrests will serve to warn Moscow that the
Yugoslav Government is prepared to move against any
activity directed at the Yugoslav party, as well as a
warning to~ any Yugoslav Communists who may be wavering
in the present dispute ,with Moscow.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
THE BLOC AND THE WORLD COTTON MARKET . . . . . . . . . . . Page 9
The Sino-Soviet bloc's imports of raw cotton
from underdeveloped countries have increased about
40 percent since 1955. Egypt is its main source,
supplying approximately 70 percent of the 216,000
tons imported in 1957. Syria, which first supplied
cotton to the bloc in 1956, is now the second most
important supplier, accounting for a little over
10 percent of the bloc's impotts last year. Since
1955, bloc imports of cotton from Egypt and Syria
have almost doubled, while imports from Pakistan
and Brazil have decreased appreciably The USSR
remains a net exporter of raw cotton. 25X1
CYPRUS . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Long-feared communal clashes between Greek and
Turkish Cypriots have continued following the ex-
plosion of a bomb near the Turkish Information
Center in Nicosia on 7 June. Rioting has spread
throughout the island, and several deaths and
scores of injuries have been reported. The gov-
ernment has banned processions and public gather-
ings, imposed curfews in all major towns, and called
on Turkish- and Greek-Cypriot leaders to restrain their
followers. Meanwhile, London has presented its new
proposals for Cyprus in Athens and Ankara and plans to
announce them in Parliament on 17 June.
BRITISH-ICELANDIC FISHING DISPUTE WIDENS . . . . . . . . . Page 11
The British-Icelandic dispute over territorial
fishing limits continues to generate difficulties for
the Western alliance. Iceland's insistence on uni-
laterally declaring control over fishing rights to
a 12-mile limit is stimulating similar claims from
Norway and Denmark's Faeroe Islands. The USSR has an-
nounced its support for Iceland's position, and pres-
sures are increasing on the Macmillan government to
take a tough line toward Iceland.
CORRUPTION CASE SHAKING AUSTRIA'S COALITION GOVERNMENT . . Page 12
The current investigation of a widely publi.
cized'corruption case involving prominent Austrian
political and banking officials may undermine the
coalition which has given Austria a stable govern-
ment for almost 13 years. Relations between coali-
tion leaders are already considerably strained, and
further revelations could result in a government.
crisis.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
PART II (continued)
PAKISTAN AND AFGHANISTAN NEGOTIATE TRANSIT AGREEMENT
Pakistan and Afghanistan on 30 May reached agree-
ment on a ten-year transit agreement which probably
will result:in routing increased Afghan trade through
Pakistan and an improvement in the political Climate
between the two countries. Although Afghan officials
have stated that the transit agreement will not be
ratified until chronic disputes over trucking rights
are settled and American financing"'for extension of a
railroad from Pakistan to Torkham in northern Afghan-
istan is assured, the advantages to Afghanistan indi.
cate the likelihood of ratification in the near future.
. . Page 13
CEYLON . . . . . . Page 14
The Ceylonese Government has taken a decisive step
in the Tamil-Singhalese linguistic crisis by informally
extending the emergency powers invoked on 27 May and by
cracking down on leaders of the Tamil-speaking minor-
ity. Peace has been restored to the island, but special
security forces are stationed in Tamil-dominated areas.
The Tamils probably will submit for the present, but
their bitterness will remain and rename agitation is
likely in the future.
BURMA . . . . Page 15
Premier Nuts narrow victory in the parliamentary
no-confidence vote, in which he relied heavily on Com-
munist-front support, foreshadows an unstable government
and an increase in Communist strength in Burma. Burmese
leaders speculate that Nu may negotiate a settlement
with insurgent Communists, granting them status as a
legal political party. Should this occur and the split
among non-Communists ?continue, the Communists and their
f
ll
o
owers will probably make major gains in Parliament
i
th
n
e projected October elections.
OKINAWAN DELEGATION...TO.YISIT`.:TJS. . . . . . . . . . . . . . Page 16
The chief executive of the Ryukyu Islands, Jugo
Thoma, and a government delegation will begin negotia-
tions in Washington on 25 June requesting a revision of
the American land acquisition policy, proposing an ex-
pansion--with further American aid--of the economic de-
velopment program in the islands, and probably seeking
a ban on?puclear weapons on Okinawa. Thoma believes po-
litical agitation for the immediate reversion of Okinawa
to Japan will subside if the United States is able to
solve the land r and aid the development program.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
PART II (continued)
VENEZUELA'S COMMUNIST PARTY IMPROVES POSITION . . . . . . Page 17
The Venezuelan Communist party has improved its
position during 1958. Two top Venezuelan Communists
now claim that three of the 13 Venezuelan cabinet minis-
ters are dues-paying Communists and that the. party has
close contacts with two others. Aided by its dominant
influence among newspapermen, it has achieved at least
temporary legal status, an extraordinarily friendly
climate of opinion, and elected a sympathizer as head
of the Chambers of Commerce. The three non-Communist
parties, however, have recently shown igns of turning
against the party. F 7
CONTINUING POLITICAL UNREST IN PANAMA . . . . . . . . . . Page 17
Important cabinet changes and substantial conces-
sions to student demands made by President de la Guardia
following the recent riots in Panamawill not solve the
dissatisfactions which caused the outbreaks, and polit-
ical tensions will continue. De la Guardia, who has co-
operated with the United States during his 20 months in
office, still faces opposition from many quarters, and some
of.'these,.;oftOsition elements will not hesitate to stir up
anti-US feeling in a nos ibie attempt to oust the Presi-
dent.
PART III
PATTERNS AND PERSPECTIVES
DE GAVL]aE AND THE FRENCH UNION . . . . . . . . . . . . . . Page
While an Algerian settlement is Premier de Gaulle's
most pressing, problem, he seems to envisage changes in
the status of all French territory overseas, mainly by
establishing a federal relationship with France. Within
the past year or two, the French Parliament has hbown
some readiness for constitutional reform in the territo-
AFGHAN PRIME MINISTER DAUD TO VISIT THE US . . . . . . Page 4
Afghanistan's Prime Minister Prince Daud, whose vis-
it to the United States is to begin on 23 June, is attempt-
ing to modernize his country while maintaining an independ-
ent and stable government. He will probably continue his
efforts to secure aid from both the Soviet bloc and the
free world in the belief that such assistance can be accept-
ed without jeopardizing Afghan independence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
PART III (continued)
OUTLOOK FOR INDIA'S SECOND FIVE-TEAR PLAN . . . . . . . . Page 7
India, after encountering serious economic diffi-
culties during the second year of its Second Five-Year
Plan (1956-61), bow faces its gravest financial crisis.
A drought, a severe setback in the textile industry,
and failure to obtain the financial resources needed
to fulfill the plan indicate that not even its princi-
pal targets will be fully met. The governmentis in-
ability to reach the goals on which it has staked its
future, combined with the political deterioration of
the Congress party organization,could result in iner
creased acceptance of the Communists' claim that a
democratic system cannot bring about rapid, sustained
e
i
conom
c growth in anddl
unereveoped country.
CZECHOSLOVAKIA TODAY: ACHIEVEMENTS AND PROSPECTS . . . . Page 11
Czechoslovakia, the "model satellite," has achieved
a political and economic stability unequaled in Eastern
Europe. The party, headed by Antonin Novotny, Moscow's
chosen lieutenant, continues to display a united front.
Although rumblings of popular discontent, stemming from
mass dislocations of administrative workers and 'repres-
sive policies in agriculture, are reported throughout
the country, party leaders have not been openly opposed,
in part because the population has long been stable and
cauti
d
ous an
sanars reatively high. _
ivingtdd ilLntll
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Premier de Gaulle's most
urgent problem is still Algeria,
and it is not yet clear whether
his rebuke to the all-Algeria
Public Safety Committee will
succeed in quieting extreme
rightist agitation for a com-
plete "change of regime" in
France. The French Comminist
party also appears to have re-
ceived Moscow's approval of its
sharp criticism of De Gaulle
and may resort to other. than
legal methods of opposition,
especially if the government im-
poses new austerity controls on
labor. Meanwhile, De Gaulle
has completed his cabinet and
is turning his attention to such
major issues as disarmament pro-
posals, constitutional reform,
and economic retrenchment.
The new French cabinet,
combining party representatives
and nonpolitical experts, has
essentially advisory duties.
De Gaulle is expected to keep
defense and foreign policy deci-
sions in his own hands but to
delegate economic policy plan:-
ping to Foreign Minister Pinay.
De Gaulle's radio address sched-
uled for 13 June will probably
set forth the broad outlines of
his program.
During the summer, the new
premier will meet with Secretary
Dulles and the heads of govern-
ment of the major Western allies.
Speculation about the possibil-
ity of a De Gaulle-Khrushchev
meeting has increased since the
11 June announcement that France
is preparing to put forth its
own proposal for "real, complete,
and controlled" disarmament.
The referendum date on the
revised constitution has been
announced as 5 October, leaving
economic policy as the most im-
mediate problem to be faced on
the domestic front. Pinay plans
to propose a drastic reduction
of government expenditures, in-
cluding the removal of subsidies
and special privileges, a tight
credit policy, and floating of
a large bond issue tied to the
price of gold. Such a program
seems designed to reassure labor
as to the equal sharing of the
economic austerity burden, but
it will meet with strong opposi-
tion from agricultural and in-
dustrial interests if it threatens
to reduce their subsidies sharply.
The French Communist party
now appears to have received
Moscow's approval of its criti-
cism of De Gaulle and his "ille-
gal" method of coming to power.
The Communists leaders, who have
thus far confined themselves
mostly to overt opposition, at
least partially because of re-
ported rank-and-file apathy, are
reported preparing for under-
ground activity. They can be
expected to try to exploit the
austerity aspects of his program
in an effort to rally broad anti-
Gaullist opposition. Recent
gestures by De Gaulle to cul-
tivate and reassure the non-Com-
munist labor organizations, how-
ever, may further isolate the
Communists and undercut their
hopes of reconstructing a pop-
ular front movement.
Algeria
In Algeria, which remains
De Gaulle's most urgent problem,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
the premier appears to have nar-
rowed appreciably the rift which
had developed between Algeria
and metropolitan France follow-
ing the 13 May take-over. Junta
military and civilian extremists
have continued, both during and
since De Gaulle's 4-6 June visit
to Algeria, to exert strong
pressures aimed at influencing
the general's still largely un-
defined Algerian policy and pro-
moting further changes--appar-
ently in an authoritarian direc-
tion--in Paris. So far, how-
ever, the premier has succeeded
in steering a moderate and in-
dependent course which has
avoided any fundamental conces-
sions to the extremists and re-
established much of the Paris
government's authority.
A cardinal objective of De
Gaulle's approach has been the
complete subordination of the
military to his directives and
their gradual removal from the
political role they recently as-
sumed. Simultaneously, however,
he has lavished praise on the
army's conduct in the recent
crisis and indicated--by appoint-
ing General Salan his delegate-
general for Algeria and confirm-
ing Salan's supreme civil as
well as military authority--his
determination to rely, at least
for the present, primarily on
the army for the administration
of the area.
Contrary to the impression
recently given by S'alan, however,
De Gaulle reportedly intends
eventually to reinstall a civil-
ian administration responsible
to civilian ministers. Military
personnel have not yet been or-
dered to disengage themselves
completely from the network of
extralegal public safety com-
mittees throughout Algeria, but
De Gaulle's prompt chastisement
of General Salan on 11 June for
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forwarding an "insulting" resolu-
tion prepared by the all-Algeria
committee, which is still co-
chaired by General Massu, sug-
gests such an order may be forth-
coming soon.
While avoiding, at least
for the time being, direct sup-
pression of the committees, De
Gaulle is endeavoring to confine
them to propaganda activities on
behalf of the much-publicized
Moslem-European "reconciliation"
campaign and, especially, to
override their revolutionary
claim to a governing role in Al-
geria. This claim is formally
founded on a statutory declara-
tion, signed by Salan prior to
De Gaulle's investiture, which
established the all-Algeria com-
mittee as the repository of
"popular sovereignity" and con-
ceded to that body the capacity
to "participate actively in the
elaboration of decisions."
The committee's 10 June
criticism of the De Gaulle gov-
ernment's original intention to
hold municipal elections in Al-
geria "in about a month" and
call for a "real" public safety
government in Paris demonstrated
the continuing assertiveness of
the rightists, including some
military elements. There are,
however, increasing indications--
especially since De Gaulle's
prompt and firmly unfavorable
reaction to the committee's res-
olution--of differences within
the junta over future action,
and the premier now appears to
be progressively reducing and
isolating the most radical of
the extremists. Already it
seems probable that in any ulti-
mate showdown these elements
would have little, if any, overt
support from even their closest
military collaborations. The
process may yet take some time,
however, as the committees have
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
still to be physically evicted
from the offices they appropri-
ated in the principal govern-
ment buildings throughout Al-
geria, and there will have to
be a gradual "weeding out" of
the principal troublemakers.
FLAT Stand
Leaders of the Algerian
National Liberation Front (FLN),
who have recently reaffirmed
their long-standing demand for
"unconditional recognition of
Algeria's independence," are
endeavoring to counter any pos-
sible adverse effects on their
domestic and international posi-
tions resulting from De Gaulle's
offer of equality to Algerian
Moslems.
Tunisia
In Tunisia,::-the.:Bourguiba
government has indicated that
it could accept "substantially
all" of France's proposals of
8 June, which included an offer
to withdraw within four months
the 9,000 French troops located
outside Bizerte. Bolding firmly
to the substance of the 15
March good offices proposals,
Tunis balked at giving written
assurances that Bizerte will
remain at the disposal of French
forces and proposed instead to
give France a letter binding
itself to start negotiations
for a "provisional regime" at
Bizerte prior to 1 October.
The Tunisians went beyond
the good offices proposals,
however, in being willing to
grant freedom of movement for
French troops at Bizerte when
evacuation starts rather than
on its completion. The French
charge in Tunis has strongly
recommended that the Tunisian
counterproposal be accepted
without delay as the maximum
likely to be obtained. Never-
theless, as of 10 June it was
reported that Paris considered
the Tunisian counterproposal
as "too vague" and probably
would not, accept it.
The Tunisian foreign sec-
retary has appealed to the
American ambassador that the
United States and Britain not
shirk the responsibilities un-
dertaken by their good of-
fices mission. He intimated
that only by supplying Tu-
nisia with much-needed arms
could the West dispel the pop-
ular belief that Bourguiba's
pro-West policy is not worth-
while. At the same time,
Tunisia has approached Iraq and
possibly Cairo for small arms
and ammunition.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
The United Nations Security
Council action in establishing
an observation group to go to
Lebanon has placed pressure on
both the government and the reb-
els to establish the best pos-
sible political and military
positions for themselves before
the UN group can begin to func-
tion. The rebels, who this week
appeared to be making some sig-
LEBANESE SITUATION
AS OF 9 JUNE 1958
Army Organization and Strengths
Infantry Battalions . . . . . . . . . . . . .;
Artillery Battalions ........... 3
Reconnaissance Battalions ? ? 2
Tank Battalions .................1
Total Army Strength . . . . . . . . 9809
Gendarmerie
Total Strength ................ 2800
Loyalist Partisans. . . . . . Approx. 35J0
Air Force
Total Aircraft ................ 38(incl.10 jets)
Total Personnel ..............332
Lebanese Armed Opposition (Estimated)
Total Strength Approx. 10.200
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1,400
450
SITUATION
nificant gains despite government
air action against them, probably
hope to link up their operations
and, possibly, provide a base
on which a "free Lebanon" govern-
ment might plausibly be estab-
lished.
A drive launched on 10 June
by a band of several hundred rebF
el Druze - to .:'.cut the.,.;.-Beirut-
% C.' Hawik
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2,200
/ BIQA SECTOR
Arsaal*
~?
/ Balabakk f
5 /
PROVI')? ~ 400
Qiinaytirah ?
I
ISRAEL I
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Selected Road
PART I OF 'IMMEDIATE INTEREST Page 4 of 7
000
Lebanese Army
Lebanese Gendarmerie
Syrian Army
Lebanese Armed Opposition
Main Reoel Supply Point
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
Damascus highway appeared aimed
at isolating the Biqa Valley
from the government-held Beirut-
Mount Lebanon area.
Concern over possible fur-
ther deterioration in the mili-
tary situation, together with
signs of increasing anarchy in
the countryside, has led moderate
Lebanese to the conclusion that
only intervention--military or
political--from outside the
country can redeem the situa-
tion.
Political lines remained
hard in Lebanon this week, in
large part because the various
elements were awaiting the out-
come of the UN debate.
Nasir desires a "compromise"
soon because of concern over
developing difficulties in the
Syrian region of the UAR.
TURKEY CONSIDERING SOVIET ECONOMIC HELP
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PART I OF IMMEDIATE INTEREST Page 5 of 7
While there apparently are some
political problems there--
particularly the long-standing
irritation caused by Arab Social-
ist leader Hawrani's independent
attitude--and some friction be-
tween military officers from the
two regions, they do not seem
sufficiently serious in them-
selves to lead Nasir to back
out of the Lebanese imbroglio.
Economic pressure within
Lebanon for an early settlement
continues to grow. The amount
of capital which has been sent
out of the country is estimated
at about $50,000,000; normal
trade channels have been closed
because of the fighting; and
while factories in the Beirut
area have been kept open, em-
ployers reportedly will have to
cease paying the nearly idle
workers within two weeks. Since
much of the transit shipment
of goods from the port of Beirut
to Syria, Jordan, and Iraq has
stopped, the port's warehouse
space is filling and can re-
ceive cargo at present rates
only until the end of June. Ob-
servers fear that unless the
economy returns to near-normal
conditions within the next few
weeks, it will be difficult to
avoid a breakdown in Lebanon's
financial structure.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 Juno 1958
apparently eased controls on
barter arrangements with the
bloc countries in an effort to
ease domestic commodity short-
ages.
The Turkish Government is
determined to find some immedi-
ate relief from the country's
economic problems. It prefers
to get assistance from the West,
especially the United States
and West Germany,
Western aid is not forthcoming,
Turkey would be strongly tempted
to turn to the USSR. The So-
viet Government probably con-
siders that conclusion of a ma-
jor economic assistance agree-
ment with strongly pro-West
Turkey would undermine opposi-
tion to similar agreements in
less developed countries.
Turkish leadets-',prof es,$
their cbutinuifig:..,diStriist:.ot
the USSR, teaffirm.itheir:,loyalty
to the West, and insist they
know how far they can safely go
in accepting Soviet economic
assistance. They are probably
overconfident in their ability
to deal with the USSR, however.
Ankara has urgently re-
quested Western economic aid
and is impatent at the delay re-
quired for surveys, such as the
one about to get under way by
the IMF and OEEC. Economic
survey teams representing these 25X1
organizations are due to arrive
in Ankara in mid-June.
INDONESIA
Government operations
against North Celebes and par-
ticularly the area surrounding
the dissident capital of Menado
have increased in intensity dur-
ing the past week, and the en-
circlement of Menado is progress-
ing, Djakarta on 9 June landed
troops at Bitung, an important
port approximately 35 miles by
road from the dissident capital.
Indonesian ::Army communiques
state that the government has
taken an airfield 80 miles West
of Menado, and that key offshore
islands in the Menado-9itung
area have been occupied.
Information Ministry an-
nouncements from Djakarta claim
that government forces, with the
aid of loyalist guerrillas, have
occupied eight small towns in
the three major areas of troop
activity-around Bitung, Gorontalo,
and Poso. The air force has been
reported active since 8 June in
the Menado area against airfields,
dissident shipping, army barracks,
and other military targets. Th'ieee
government corvettes shelled the
dissident capital on 8 June.
Although discussions on a
cabinet reshuffle apparently are
continuing, Abdulgani, the vice
chairman of the National Council,
tOld the American ambassador
it was doubtful anything would
be done before the end of June.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
qN~(/ 3~~" JNOAIOR[
/Pakanb2iu.
Padand.
DJAKARTA
Tolitoll, T_.._..R
-~ Djailolo'
Gorontalo
B O R N E O ,,9onggala..Toboli+"'
duQkpapa . Palu 1
nFbu
Surabaya
Pok,p
l '.K6ndari
11 June and apparently will be 25X1
turned over to the Indonesian
Navy.
Two small Soviet tankers
arrived in Djakarta on 10 and
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
PART II
NOTES AND COMMENTS
SOVIET NUCLEAR POWER PROGRAM DELAYED
Although the Soviet Five-
Year Plan (1956-1960) called
for the construction of nuclear
power stations with an in-
stalled capacity of 2,000-2,500
electrical megawatts (EMW) by
the end of 1960, present indi-
cations are that the installed
capacity of stations specifical-
ly designed for power produc-
tion will not exceed 700 EMW by
that time. At least 200 BMW of
generating capacity, based on the
use of heat from plutonium pro-
duction reactors, will also be
?installed. In spite of its
failure to achieve its goals,
the USSR, with a total of at
least 900 EMW, will probably be
first in the world in terms of
nuclear power plant capacity.
Analysis of papers-,pre-
pared by the Belgrade World
Power Conference and the Soviet
reply to a UN questionnaire on
peaceful uses of atomic power
led by July 1957 to the con-
clusion that the installed ca-
pacity of nuclear electric-power
stations by the end of 1960
would amount to about 1,400 EMW.
Subsequent information
has led
A second large nuclear pow- 25X1
er station with two 100-MO
graphite-moderated reactors has
been
der construction. In 25X1
the earlier estimates, this sta-
tion was expected to have a
capacity of 400 EMW by 1960. Re-
design of the reactors has, how-
ever, limited progress, and it
is now estimated that only one
reactor with a capacity of 100
EMW will be completed by the
end of 1960.
In the absence of contrary
evidence, it is assumed that
the four smaller experimental
reactors included in the Sixth
Five-Year Plan, with a combined
capacity of 175 EMW, will be
completed by 1960. The total
capacity of the reactors de-
signed for power production
would therefore approach 700
EMW.
In addition to the forego-
ing reactors publicly announced
as specifically designed for
power production, it is reported
that two reactors now under con-
struction At.. A , major atomic
production center at Tomsk will
have an associated electric-
generator system with a capacity
of about 200 EMW and are ex-
pected to be in operation well
before the end of 1960. From
their location, these are be-
lieved to be plutonium produc-
tion reactors, the heat from
which will be used to generate
electricity. This use of heat
from plutonium production re-
actors is in accordance with
remarks made by Academician I.
V. Kurchatov in 1956 at Harwell.
There is no indication, however,
that such power was included in
the ooriginal 1960 goals for
atomic power stations.
to a new, lower estimate. In
November 1957 a representative
of the Main Administration
for the Construction of Atomic
Power Stations, under the USSR
Ministry of Electric Stations,
writing about the current pro-
gram, mentioned only one large
nuclear power station, of 420
EMW capacity and two reactors,
which will begin generating
power in 1960. The description
of this station coincides with
the pressurized-water reactor
station which a Soviet official
at '.the Belgrade World Power
Conference said was under
construction.
CONFIDENTIAL
NOTES AND COMMENTS
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ifiiii Aii
CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET NUCLEAR POWER PROGRAM
(TO BE COMPLETED BY THE END OF 1960)
ORIGINAL PLAN APPARENT REVISION
FEBRUARY 1956 MARCH 1957
2,000 -2,500 EMW 1,400 EMW
LARGE-SCALE
PLANTS
SMALLER
EXPERIMENTAL
PLANTS SEVERAL WITH
CAPACITY OF
CAPACITY (EMW) 5-70EMW EACH
SECRET
CURRENT ESTIMATE
900 EMW
(PARTIAL (BY PRODUCT
OPERATION) POWER)
LLLL hLhh
P PRESSURIZED WATER REACTORS
H HEAVY-WATER-MODERATED GAS-COOLED REACTORS
This decrease in the amount
of nuclear generating capacity
to be installed through 1960
indicates that the USSR was
overly optimistic with regard
to its ability to solve quickly
the technical problems as-
sociated with the construction
of large-scale power reactors.
G GRAPHITE-MODERATED, WATER -COOLED REACTORS
SOVIET INTEREST IN WESTERN PLANTS AND EQUIPMENT
Soviet interest in pur-
chasing machinery and equipment
in Western markets was given
renewed publicity by the Soviet
announcement last month of new
plans for expansion of the USSR's
chemical industry, and by Khru-
shchev's trade proposal to the
United States last week.
The USSR has been serious-
ly negotiating for Western
plants and equipment since mid-
1957, when a contract Was signed
for a $28,000,000 British tire
plant. In the last two weeks
the USSR has ordered in Western
Europe about $30,000,000 worth
of synthetic fiber and cement
plants. A French firm is to
supply materials and construct
the "world's largest cement
plant" in the USSR worth $14,-
000,000. Krupp of West Germany
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
has just secured contracts to
deliver $12,500,000 worth of
machinery to produce synthetic
fibers and may conclude addi-
tional contracts for cement
plants among other things.
A British company expects
to conclude negotiations this
week for at least one, and per-
haps three, large synthetic
fiber plants and a cellophane
factory using "maximum auto-
mation," as requested by the
USSR. Requests from American
firms for export licenses sug-
gest a recent increase in So-
viet interest in US machinery,
plant equipment, and technical
know-how as well.
The USSR is also negotiat-
ing in Western Europe for food-
processing machinery, equipment
for the production of plywood
and plastics, and several other
types of chemical and synthet-
ics plants. In addition, the
USSR renewed last month its in-
vitation to a Swedish firm to
submit a bid on a major 1,900-
mile oil pipeline system, the
cost of which is estimated at
more than $300,000,000. Late
in 1957 an American firm was
approached by Soviet representa-
tives interested in acquiring
specialized iron ore mining
and processing equipment which
could cost up to $1 billion.
Soviet inquiries to the
United States largely concern
machinery and technical data to
produce synthetic fibers, but
requests for export licenses
also indicate that negotiations
have occurred in regard to re-
frigeration equipment and metal
and raw materials processing
machinery. Export requests for
the delivery of US machinery and
plant equipment to the USSR
reached $13,500,000 by early
June, compared with only $3,700,-
000 in 1957 and $6,000,000 in
1956. The American equipment
for which the USSR has negotiated
this year includes $7,500,000
worth of plants and technical
data to produce synthetic fibers,
and over $5,000,000 worth of ma-
chinery to process metals.
In addition, an application
was approved in principle in
March for an export license for
two very large gold dredges
valued at $12,000,000.
The wide publicity given to
the USSR's plans for raising liv-
ing standards and its efforts to
purchase equipment in the West
suggests that while political
motivation still ranks high,
these activities are not a repe-
tition of the abortive negotia-
tions with Britain in 1954. At
that time large orders for Brit-
ish plant equipment--including
textile, agricultural, and pow-
er generating machinery, and
machine tools and television
equipment--were placed but sub-
sequently canceled.
It is unlikely, however,
that the USSR seriously expects
the United States Government
to grant it short- and long-
term trade credits to support
a large expansion of trade as
suggested in the Khrushchev
note. Furthermore, the USSR's
declarations that its trade with
Britain could soon reach $550,-
000,000 a year and that Soviet-
US trade could total "several
billion dollars in the next few
years" overstate Soviet trade
capabilities. Khrushchev has
stated that the USSR is willing
to use gold to support an in-
crease in trade. However, the
USSR's foreign trade and its
commitments in East Europe al- 25X1
ready require large gold sales,
which amounted to $300,000,000
last year.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
INSTRUCTIONS ON RELATIONS BETWEEN SOVIET ARMY AND PARTY REVISED
The "Instructions to Party
Organizations in the Soviet Army
and Navy" issued in 1957 have
been somewhat revised, accord-
ing to recent articles in Red
Star and Soviet Fleet. The
original instructions were in-
tended to define the extent of
party control of military af-
fairs, but recent evidence in-
dicates that their application,
presumably resulting from mis-
interpretation of Zhukov's oust-
er, led to considerable confu-
sion. The revisions seem in-
tended to outline more clearly
the rights and privileges of
the military commanders vis-a-
vis the party.
The problem of party con-
trol versus military authority
is one which has always plagued
the Soviet Army. The introduc-
tion and then abolition of po-
litical commissars, the creation
of deputy commanders for polit-
ical affairs at all levels of
the armed forces, the removal
of the latter from company level
and below are some of the de-
vices which have been tried and
found wanting. The original
instructions, which apparently'
attempt to draw a line of de-
marcation between party and mil-
itary authority, were interpret-
ed as.a sign of the ascendency
of the military,. personified
by Marshal Georgy K. Zhukov.
After the purge of Zhukov
in October 1957, however, the
tempo of party activity among
the military increased, with
stress placed on those elements
in the instructions which in-
creased party control in the
armed forces. Criticism of lax
party training began to appear
in the press,: and military
training schedules were revised
to provide more time for polit-
ical work. Local party commit-
tees were encouraged to pay a
more active part in military
affairs, and greater prominence
was given in the military dis-
tricts to the military councils
on which the ranking civilian
party official is believed to
-sit.
Since Zhukov's ouster, the
heads of the chief political
directorates in at least half
of the 18 military districts and
in three of the four naval dis-
tricts ha#e'been-demoted or
shifted.:. .The :replacement in
late 1957 of Colonel General A.
S. Zheltov as head of the Chief
Political Directorate of the
Ministry of Defense by Colonel
General F. I. Golikov, a profes-
sional military officer, indi-
cates, however, that, despite
this increased political activ-
ity, there is no intent to under-
mine the commanders' authority
in military matters.
Military commanders have
evidently been sorely harassed
by overzealous party officials
in recent months. By May this
year articles in Party Life and
Red Star indicatessatisfac-
on on the part of the military
with the increased participation
of civilian party officials in
military affairs and confusion
regarding the limits on the au-
thority of political officers.
Judging from the few ex-
cerpts of the original instruc-
tions which have appeared in the
Soviet military press, it would
seem that the commander was
formerly authorized to direct
the work of the party organiza-
tion "in person or through his
deputy." The revision drops the
reference to the' "aepiity and
makes a distinction between the
duties of a commander who is a
party member and one who is not.
The former apparently is given
greater authority. One of the
other revisions seems designed
to protect the commanders from
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
criticism from below. The new
wording states that party in-
fractions by commanders and po-
litical officers will be
examined "by party commissions
attached to a higher political
organ," thus relieving com-
manders from criticism by
their subordinates.
SOVIET COMPOSERS OFFICIALLY CLEARED
A decree of the party cen-
tral committee of 28 May offi-
cially clears Dmitri Shostako-
vich, Aram Khatchaturian, the
late Sergei Prokofiev, and
other leading Soviet composers
of the stigma attached to their
names during the later years
of Stalin's life.
The new decree, which at-
tributes much of the blame to
Molotov, Malenkov, and Beria,
and formulizes what in fact
has been Soviet policy toward
these composers for over a
year, is probably designed to
serve several purposes: to
confirm Khrushchev's cultural
policy of "comradely persua"'-
sign" of erring artists, to
facilitate the planned exchange
of composers with the United
States, and to discredit Malen-
kov and Molotov in yet another
sphere. There is no indica-
tion, however, of any softened
policy toward composers and
musicians, or any artistic
figures, who fail to toe the
party line.
The chief emphasis of the
decree and of the related
Pravda editorial of 8 June is
on spelling out cultural policy.
Quoting copiously from Khru-
s.hchev, Pravda, makes: the. dis-
tinction between the sweeping
condemnations of these com
posers during the later:. years
of Stalin's lifetime and
Khrushchev's policy of timely
"persuasion" and "explanation."
The decree suggests that
Stalin's personal preference
for simple melodies and folk
themes was at the bottom of
the mistaken criticism, but it
adds that his cultural policy
"was rather unfavorably influ-
enced by Molotov, Malenkov, and
Beria." Khrushchev made similar
charges in his pronouncements
on literature published in
August 1957, although Molotov's
name was omitted.
At that time, Malenkov was
characterized as Beria's "shadow
and tool" who "very skillfully"
took advantage of Stalin's
weaknesses in the last years
of his life. This, however,
is the first time Molotov has
been linked publicly with
Beria. Now, by putting the
taint of Beria publicly on
Molotov, it will probably have
the effect of reminding people
that Molotov is still very such
repudiated, even though his
Eastern European policies may
seem to be vindicated in prac-
tice.
This objective seems, how-
ever, to?,have been secondary.
In view of the exchange visits
to the United States of com-
posers--including Shostakovich
and Khatchaturian--scheduled
for next fall and winter, the
leadership probably feels it
advisable to point up for
foreign consumption the im-
proved treatment accorded cul-
tural figures by the post-
Stalin regime and also to make
clear to these composers just
what the limits are on their
creative activity and individ-
ual expression.
Perhaps these top com-
posers, together with the play-
wright and full member of the
party central committee A. E.
Korneichuk, whose record is
also cleared by this decree,
are such valuable assets to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
the leadership that they could
insist on having their names
formally cleared in return for
services rendered.
In the regime's perennial
campaign to stimulate cultural
"production" of high artistic
quality without encouraging
artistic expression at variance
with the party line, control
of the musicals sphere::)isnnthe
most difficult of all cultural
fields to maintain, principally
because of the abstract nature
of music, which does not read-
ily lend itself to analysis
for political content. In
October of last year, after a
series of blistering attacks in
the press, the chief editor and
several of the staff of the
journal Soviet Music were fired
for "discrediting the party's
leadership" of the arts.
However, the desired con-
formity was not achieved.
Pravda on 8 June again severely
criticized Soviet Music for re-
cent "revis oin st" articles
which, under the guise of "at-
tacking the cult of personal-
ity, tried to cast doubt on
the basic propositions of
party decisions."
YURY ANDROPOV, SOVIET ADVISER ON BLOC POLICY
Recent activities of Yury
Andropov, Soviet ambassador to
Hungary at the time of the Hun-
garian revolt in October-Novem-
ber 1956, suggest that he may
have increased influence on
Soviet policy toward the bloc.
He is now head of the Soviet
party central committee's de-
partment dealing with bloc
party affairs.
The absence of party secre-
tary Mikhail Suslov from the
recent meetings in Moscow left
Andropov as the principal ad-
viser to the Soviet leaders in
their talks with bloc leaders.
He participated in conversa-
tions Khrushchev had with the
party and government leaders
of East Germany, Bulgatia,
Hungary, North Korea, and
China, and took part with party
secretary Mukhitdinov in talks
with North Vietnamese leaders.
Andropov's deputy, I. T. Vino-
gradov, participated in the
talks with Rumanian leaders.
Andropov, furthermore,
was the only party function-
ary with experience in intrabloc
relations selected to accompany
Khrushchev on the premier's re-
cent trip to Sofia. This visit,
ostensibly to observe the Bul-
garian party congress, was
clearly used to further the
present Soviet policy of
tightening bloc discipline and
solidarity.
A party careerist, Andro-
pov served between 1940 and 1951
in the Karelo-Finnish Republic
as Komsomol first secretary,
wartime partisan leader, Petro-
zavodsk city party boss, and
then republic party second
secretary. In 1951 he was
transferred to work of an un-
disclosed nature in the cen-
tral party apparatus in Moscow.
Following Stalin's death, he
was assigned as Soviet charge
in Hungary, and succeeded
Yevgeny Kiselev as ambassador
to that country in July 1954.
In March 1957 he was trans-
ferred back to Moscow to head
the newly created party depart-
ment for bloc affairs, then
under the supervision of Suslov.
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CURRENT INTELLIGENCE WEEKLY 'SARY
Soviet bloc policy today,
particularly regarding relations
with Yugoslavia, may thus re-
flect some of the .k;uowledg* and
experience Andropov gained in
Hungary, particularly in the
period immediate( before and after
the Hungarian revolution. For
example, the charges in Khru-
shchev's 3 June speech at the
Bulgarian party congress that
the Yugoslav Embassy was
"in essence a center" for the
Hungarian revolutionists and
"a refuge for the capitulatory,
treacherous Nagy-Losonczy
group" may well have been in-
spired by Andropov.
Boris Ponomarev, former
Comintern worker::-who now heads
the Soviet central committee's
department dealing with Western
and possibly all nonbloc Commu-
nist parties, did not participate
in the recent Moscow talks,
prob-
ably
because it was strictly
a
bloc
affair, although he was
in-
vited
to the dinner for the
visit-
ing delegations.on 24 May.
For
over a year before Andropov
re-
turned to central party work,
Ponomarev had had apparatus re-
sponsibility for relations with
both bloc and Western Communist
parties. Andropov's increasing
influence would thus seem to be
at least partially at Ponomarev's
expense. F_ I 25X1
Tensions between the church
and the government in Poland,
which have long smoldered be-
neath the surface, are now be-
ing discussed in the press. If
the conflict is intensified,
popular opinion would probably
rally to the church, thereby
further reducing party First
Secretary Gomulka's popularity.
Gomulka and the Polish primate,
Stefan Cardinal Wyszynski, met
for the first time on 7 January
1958, according to recently
available information. Their
ten-hour discussion resulted in
only minor concessions to the
church, involving permission for
priests to study in Rome and the
return of certain church treas-
ures. Wyszynski's major demands
--restoration to the church of
the charity organization Caritas
and property confiscated by the
former Stalinist regime and per-
mission :;to print a Catholic
daily newspaper--were rejected
by Gomulka. The regime will
probably not grant further con-
cessions.
In one of the sharpest at-
tacks on Wyszynski since his
release from four years of "house
arrest" in October 1956, the
Polish ariny..paper Zolnierz
Wolnosci accused the cardinal on
June of failing to condemn
"the wild fanaticism of the
clergy." The newspaper was re-
ferring to continuing instances
in rural areas of parish priests
refusing burial in church ceme-
teries to nonbelievers. Zolnierz
Wolnosci also objected to the
cardinal's ".having stated, in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
connection with preparations
for the Polish millennium cele-
brations, that religion has al-
ways been a national link of
the Polish people.
One impasse between church
and state came to light on 4
June, when the Warsaw daily
Zycie Warszawy revealed that
the government had broken off
negotiations over the distri-
bution of relief supplies do-
nated by an American Catholic
welfare agency. The following
day, in his first direct public
criticism of the government,
Wyszynski stated that the joint
negotiations "have not given
results...and the difficulties
seem to be insurmountable."
Wyszynski, in breaking his
long abstention from direct com-
ment on government policies,
may be warning Gomulka that any
retreat on church policies along
the lines of the recent restric-
tions put on cultural affairs
will be strongly resisted by
the church hierarchy. He may
also be attempting to reassure
the predominately Catholic
Poles and right-wing elements
of the clergy that the church,
in reaching a modus vivendi
with the Communists, has no in-
tention of collaborating actively
with the government. Finally,
the cardinal, aware that
Gomulka fears his widespread
popularity, may feel that con-
tinued silence in the light of
the recent breakdown in the ne-
gotiations weakens Wyszynski's
position.
YUGOSLAVS TAKE PRECAUTIONARY MEASURES AGAINST PRO-COMINFORMISTS
The reported arrests in
Yugoslavia of Soviet sympathiz-
ers are probably precautionary
in nature and not indicative
of a substantial active opposi-
tion to Tito. Belgrade is de-
termined to forestall any Soviet
intrigues with dissident Yugo-
slavs similar to those which
developed following the 1948
break. The arrests will serve
to warn Moscow that the Yugo-
slav Government is prepared to
move against any activity di-
rected at the Yugoslav party,
as well as a warning to any
Yugoslav Communists who may be
wavering in the present dispute
with Moscow.
According to press reports
from Belgrade of 7 June, nearly
200 persons have been arrested
in a government roundup of pro-
Soviet sympathizers and "securi-
ty risks." Several of those
detained reportedly had copies
in Serbo-Croat of Khrushchev's
speech delivered in Sofia on 3
June in which Yugoslavia and
its leaders were bitterly at-
tacked. The speech was not
published in Yugoslav newspapers.
The critical portions, however,
were excerpted and broadcast to
Yugoslavia by Moscow.
Rumors circulating in Bel-
grade claim that several ex-
Cominformists have fled to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
neighboring satellites. Sur-
veillance and security checks
along Yugoslavia's borders
have been tightened.
Tito's top aide, Vice
President Aleksandar Rankovic,
at the Yugoslav party congress
on 23 April disclosed that a
number of former Cominformists
were still actively hostile,
and warned the USSR that Bel-
grade would not permit anyone
to use these individuals a sec-
ond time against the regime.
A resumption of widespread
arrests on the level of those
which followed the 1948 break
is unlikely inasmuch as pro-
Soviet Yugoslavs now constitute
only a small group outside of
the party--most of the former
Cominformists were not read-
mitted to the Yugoslav party.
According to official fig-
ures, 15,800 Cominformists were
prosecuted in Yugoslavia between
1948 and 1955, only 1,400 of
whom were still in jail in 1956.
Most were arrested in 1948 and
1949. Within Yugoslavia, Com-
inform sympathizers were most
numerous during that period in
the armed forces and the uni-
versities.
After the 1948 break, many
pro-Soviet sympathizers were ar-
rested trying to escape to
neighboring countries, where
defectors were used by the So-
viet bloc to broadcast propa-
ganda against the Tito regime.
Camps and training centers for
subversive activity were set
up in these countries along the
Yugoslav borders. There was
little evidence of sabotage
within Yugoslavia, however, and
Cominform efforts were directed
primarily toward building up an
underground organization and
creating dissatisfaction with
the regime rather than with
perpetrating acts. of open resist-
ance. The Yugoslav security
forces prevented these operk-
tions from becoming a serious
threat.
THE BLOC AND THE WORLD COTTON MARKET
The Sino-Soviet bloc's
imports of raw cotton from
underdeveloped countries have
increased about 40 percent since
1955. Egypt is its main source,
supplying approximately 70 per-
cent of the 216,000 tons im-
ported in 1957. Syria, which
first supplied cotton to the
bloc in 1956, is now the second
most important supplier, ac-
counting for alittle over 10
percent of the bloc's imports
last year. Since 1955, bloc
imports of cotton from Egypt
and Syria have almost doubled,
while imports from Pakistan and
Brazil hap*! decreased"appreciably.
The _:.European satellites
are the primary bloc importers
of cotton, but the USSR, itself
a major producer and exporter
of raw cotton, has substantially
increased its imports of cotton
from Egypt and Syria as part of
its economic offensive in the
underdeveloped countries. Since
the Soviet Union's imports of
cotton exceed its requirements,
it is believed that some of this
cotton as probably re-exported
to the European satellites.
During 1957, Egypt became
increasingly dependent on the
bloc as a market for its cotton,
with about 57 percent of its
entire output' going to that
area. Probably about 25 per-
cent of the proceeds of these
exports were used to pay for
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12 June 1958
the more than $250,000,000
worth of bloc arms purchased
since 1955. Partly because of
the need for a large volume
of exports to the bloc to pay
for arms and essential imports
such as petroleum products
and partly because of the in-
herent difficulties in re-
gaining Western markets, no
great change in the trade pat-
tern with Egypt and Syria is
expected in 1958.
Although a shortage of
raw cotton has prompted Pei-
ping to curtail the cotton cloth
ration in the past two years,
Communist China has reduced its
imports from nonbloc countries
since 1955. An important part
of the regime's agricultural
policy is to become self-
sufficient in cotton pro-
duction, and recently Pei-
ping announced that large-
scale reclamation projects
were under way in Sinkiang
to prepare new land for
cotton growing.
SING-SOVIET ROC COTTON IMPORTS AND SOURCES OF SUPPLY
TONS
EGYPT
049AN
ST2U
OUR
PAKISTAN
MN
0
TOTAL
USSR
14,591
-
4,041
-
16,683
CINNA
23,724
1,874
6,548
32,854
-
-
65,998
SATELLITES
48,761;
8,506
15,716
-
1.706
21
73,770
TOTAL
87,077
11,379
21,772
32,864
5,247
91
158,360
Tin
277,375
284,136
175,706
168,677
29,756
28,436
964,067
BY Ma
31.3
4.0
-
12.3
19.1
17.6
I
?uU.
16.4
USSR
8,989
-
998
-
1,018
1,448
-
12,383
01615
13,988
11,641
2,214
1,150
15,057
-
595
44,647
?
N198rTAN
SATEUMI
63,400
9,227
7,537
11,816
-
3,631
3,515
98,116
TOTAL
86,317
90,870.
10,739
12,966
16,075
5,079
4,110
156,156
TOTAL
234,844
544,640
56,140
142,931
133,045
40,371
42,397
993,469
9Y 9lOC
38.7
6.0
19.0
9.0
12.1
12.5
9.6
15.7
USSR
65,798
1,997
2,633
-
2,058
2,996
-
75,480
CNINA
21,391
2,243
8,106
25
10,925
-
-
48,600
?
SATELLITES
58,776
1,795
13,199
7,733
-
4,834
5,265
91,901
TOTAL
151,963
0,035
23,938
7,758
12,983
7,630
5,265
215,772
TOTAL
f2rORIf
264,119
00,428
86,727
na
118,352
39,129
49,674
618,429
9T etac
57.5
9.9
27.6
tv
10.9
I 20.0
10.5
T 34.8
The bloc, with the exception
of Poland, imports no cotton from
the United States, the world's
largest exporter of raw cotton.
In 1957, Poland imported 36,000
tons of US cotton under Public
Law 480. Prepared by ORR) 25X1
Long-feared communal
clashes between Greek and Turk-
ish Cypriots have continued
following the explosion of a
bomb near the Turkish Informa-
tion Center in Nicosia on
7 June. Rioting has spread
throughout the island, and sev-
eral deaths and scores of in-
juries have been reported. The
government has banned proces-
sions and public gatherings, im-
posed curfews in all major towns,
and called on Turkish- and Greek-
Cypriot leaders to restrain
their followers. Control of
Turkish-Cypriot mobs is particu-
larly difficult for the govern-
ment, as a large proportion of
the police force is made up
Turkish Cypriots.
Foot may also have hesi-
tated to antagonize the Turks
on the eve of the announcement
of a new British policy for
Cyprus, which London subsequently
presented in both Ankara and
Athens. Announcement that these
proposals are scheduled to be
made public by 17 June has pro-
voked bellicose speeches by
Turks and Turkish Cypriots, who
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
fear that the new plan 'will not
provide for partition--Turkey's
announced s mfle qua non for set -
tlement of the Cyprus issue.
The Turkish-Cypriot riots were
probably timed to exert the
greatest possible influence on
the British Government's plans
for Cyprus.
had indicated willingness to ac-
cept the anticipated British
proposals for Cyprus if eventual
self-determination were not
specifically precluded. 25X1
In Athens, the Greek Gov-
ernment reacted calmly but an-
grily to events on Cyprus, called
for an immediate meeting of the
NATO Council, postponed indefi-
nitely the return of the Greek
ambassador to Ankara, and.warned
that it would appeal to the UN
Security Council if attacks on
Greek Cypriots continued. Arch-
bishop Makarios, just back in
Athens from Egypt where he se-
cured public support from Pres-
ident Nasir for Cypriot self-
determination, called on Greek
Cypriots to organize for their`
own defense. Prior to the com-
munal outbreaks on Cyprus, both
Makarios and Premier Karamanlis
BRITISH-ICELANDIC FISHING DISPUTE WIDENS
The British-Icelandic dis-
pute over territorial fishing
limits continues to generate
difficulties for the Western
alliance. Iceland's insistence
on unilaterally declaring a 12-
mile limit on fishing rights
is stimulating similar claims
from other countries. The USSR
has announced its support for
Iceland's position, and pres-
sure is increasing on the Mac-
millan government to take a
tough line toward Iceland. The
US Embassy in London warns of
a growing danger that both sides
may become committed to unal-
terable positions.
Iceland's intractability
is summed up in the foreign
minister's remark that no sin-
gle party there can publicly say
it favors negotiations. The
chain reaction started by Ice-
land 'is evidenced in a 6 June
declaration by Denmark's Faeroe
Islands' local legislature that
it also is adopting a 12-mile
fishing limit effective on 1
September. Although the pro-
vincial legislature has no Au-
thority in matters affecting
foreign relations, this move
puts strong pressure on the
Danish Government to support
the Faeroese demands--and, by
analogy, similar demands regard-
ing Greenland. Also on 6 June
a Norwegian Foreign Ministry
official contented that it
would :be ;.almost impossible:.
for -his:. goyer1imentl .:.to;_ ..avoid
similar action if the Faer-
oe Islands' or Greenland's
fishing limits are extended.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
IRE LANS
FAEROE ISLANDS
(Den.)
nomic sanctions, but
it is generally be-
lieved than any reim-
position of London's
boycott on Icelandic
fish would be coun-
tered by a purchase
offer from the USSR,
which has already
supported Iceland's
right to fix a 12-
mile limit.
The official
British view still is
that a unilateral dec-
laration contravening
W E5T SEAS I
NET N. GERMANY)
In Britain, there is great
annoyance at Iceland's refusal
to negotiate and-strong pres-
sure both inside and outside
the Macmillan government to
take a strong line. A sizable
element in the cabinet, appar-
ently including Foreign Secre-
tary Lloyd, is said by the Am-
erican Embassy to consider Ice-
land "an.impudent upstatt that
ought to be smacked down." The
British press has mentioned eco-
international law cannot be ac-
cepted but that an amicable set-
tlement can be negotiated by the
countries concerned agreeing to
waive some of their acknowledged
maritime rights. The Foreign of-
fice working level believes the
best prospect of maneuvering Ice-
land into such negotiations lies
in talks with Denmark on Faeroese
and Greenland waters which might 25X1
lead to a regional conference
which the Icelanders could
scarcely ignore.
The disclosure that promi-
nent Austrian political and
banking officials are deeply in-
volved in a widely publicized
corruption case is threatening
to undermine the coalition which
has governed Austria for almost
13 years. Interparty relations
are already considerably strained
and a government crisis could
result if the completed investi-
gation makes it possible for
either coalition partner to ap-
proach the electorate compara-
tively untarnished.
This latest scandal--there
have been several in postwar
Austria--has been brought to
light by the recent shutdown of
the largest privately owned
steel company in the country
and the dismissal of its 1,200
employees. The company, headed
by Johann Haselgruber, who has
made a sizable fortune with de-
liveries of embargoed items to
the Soviet bloc, now owes some
$10,000,000 to the Austrian
Savings Bank. Haselgruber ob-
tained large advances by making
heavy contributions to the Peo-
ple's party and, it is suspected,
by paying substantial kickbacks
to individual bank officials as
well.
But for the suspicion that
some of these bank officials
may be Socialists, this situa-
tion would be tailor-made for
Socialist exploitation--neither
in forcing policy concessions
on outstanding coalition issues,
or in eventually taking the case
to the polls. A campaign fought
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CURRENT INTELLIGENCE WEEKLY STIKABY
12 June 1958
on such...issues as the personal
integrity of coalition leaders,
the safety of "widows and or-
phans' savings," and the na-
tionalization of private enter-
prise would be certain to be
bitter. Whether interparty
cooperation could be re-estab-
lished after such a contest
would be open to question.
Equally serious conse-
quences mj;ght also result, how-
ever, from an attempt by the
coalition parties to hush up
the affair if both, in fact,
are involved. Most Austrians
recognize that the "coalition
system" has been an almost es-
sential stabilizing mechanism
for reconciling the prewar hos-
tility between Socialists and
Catholics. Some have also been
aware, however, that the lack of
real political opposition has
prevented effective policing of
government shortcomings. Public
cynicism over the relikbility of
these parties, which heretofore
have received 89 percent of the
votes, could encourage the de-
velopment of the extremism which
the Austrians have heretofore
rejected.
PAKISTAN AND AFGHANISTAN NEGOTIATE TRANSIT AGREEMENT
Pakistan and Afghanistan
on 30 May reached agreement on
a ten-year transit agreement
which probably will result in
routing increased Afghan trade
through Pakistan and an improve-
ment in the political climate
between the two countries. Al-
though Afghan officials have
stated that the transit agree-
ment will not be ratified until
chronic disputes over trucking
rights are settled and American
financing for e?tension of a
railroad from Pakistan to Tork-
ham is northern Afghanistan is
assured, the advantages to Af-
ghanistan indicate the likeli-
hood of ratification in the
near future.
The agreement provides that
customs duties no longer will be
collected--and later rebated--
on goods in transit to and from
Afghanistan, a procedure which
has caused friction in the past.
Pakistan will earmark an area
in Karachi port as an Afghan
transit area, which will provide
Afghanistan with nearly all the
advantages of a free port. The
agreement also specifies that
the railway will be extended
from Chaman across the border
to Spin Baldak, and Pakistan has
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Selected railroad
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
agreed to meet Afghanistan's
requirements for railway cars
on both the Karachi - Spin
Baldak and Karachi - Landi
Kotal routes.
Two problems remain which
could delay ratification of the
agreement. A meeting by 15
June has been called to settle
disputes as to trucking rights
on the Chaman-Kandahar and
Kabul-Peshawar routes, and the
Afghans state that if no solu-
tion is found, the transit
agreement will not be ratified.
In addition, the two govern-
ments have agreed to study the
extension of the railway from
Landi Kotal to Torkham, and Af-
ghan officials reportedly plan
to insist that the United States
agree to finance such an ex-
tension before they ratify the
agreement. In view of the ad-
vantages to the Afghans of the
transit agreement and an Ameri-
can offer to finance improved
Afghan transportation facilities
if a transit agreement is reached,
they probably will be flexible
on these issues.
The provisions of the trans-
it agreement should eliminate
some of the problems that have
contributed to the poor rela-
tions between Karachi and Kabul
in the past. The day-by-day
working of the agreement, how-
ever, will be in the hands of
low-level officials who are less
concerned with improving rela-
tions. Progress in eliminating
past difficulties probably will
be slow, but even so, it is like-
ly that Pakistan's importance
relative to the USSR as a trans-
it route will be increased.
Emergency rule invoked in
Ceylon by the governor general
on 27 May after five days of
violence between the Tamils and
Singhalese continues, evidently
with parliamentary approval, al-
though Parliament did Batt for-t
ma11y vote to extend it, and how
long it will remain in effect
is unclear. Peace has been re-
stored, but special police and
military forces are stationed
in the areas dominated by the
Tamils.
The government apparently
has decided that the only prac-
tical way to solve the immediate
crisis is to crack down on the
leaders of the 2,000,000-strong
Tamil-speaking minority, despite
the fact that Singhalese ex-
tremists provoked the initial
riots on 23 May. Some 58 Tamil
Federal party leaders have been
arrested, including one senator
and all eight Federal party par-
liamentary representatives. The
leader of an extremist Singha-
lese group was also arrested,
probably as a token measure of
justice .s well as a warning to
extremists on both sides that
further violence will not be
tolerated.
The Singhalese majority is
likely to be satisfied as long
as the government does not grant
the Tamils wider linguistic and
political recognition and main-
tains its disciplinary attitude
toward the Tamils and the Singha-
lese extremists, with whom most
Singhalese are not in sympathy.
The Federal party, whose
political effectiveness had
diminished even prior to the re-
cent violence, probably will be
further weakened as a result of
the widespread arrests of its
leaders. The Tamils probably
will maintain an uneasy peace
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CURRENT ' INTELLIGENCE WEEKLY i t*VOY
12 June 1058
for the time being because of
the absence of leadership and
the informal exteas.ion of emer-
gency rule. The Tamils' bit-
terness will remain, however,
and renewed agitation is like-
ly in the future.
An emergency closed session
called by Parliament on 4 and 5
June to discuss tho crisis ap-
pears to have been relatively
calm. The opposition apparent-
ly made no effort to overthrow
Bandaranaike's government, pos-
sibly because of Bandaranaike's
willingness to blame the Tamils
rather than,the'Singhalese for
recent violence. Parliament is
schednied to reconvene on 24
June, when business is expected
to be devoted entirely to the
presentation of Bandaranaike's
third and. most. crucial budget.
It is unlikely that there will
be any serious consideration
of a final solution to the Tamil`
Singhalese problem at that time.
The Soviet press has suggested
that "colonial powers" pro-
voked the crisis.
25X1
25X1
Premier Nu, relying on 44
votes of the Communist-dominated
National Unity Front (NUF) and
the six votes of the Arakan Na-
tional Unity Organization, nar-
rowly won the 9 June confidence
vote in Parliament by 127 to
119. Burmese leaders fear he
will thus be under severe Com-
munist pressure for a negotiated
settlement with'.the insurgent
Burma Communist party, (BCP),
and Home Ministry officials
speculate that he may have
agreed to legalization of the
BCP in return for NUF parlia-
mentary support.
The closeness of the par-
liamentary vote and the divers-
ity of Nu's support strengthen
the probability that he will
call for general elections fol-
lowing the budgetary session of
Parliament in August. Elec-
tions would occur within 60
days after being called. If the
insurgent Communists are made a
legal party and the split among
non-Communists persistsf,the Com-
munists and their followers would
probably make major gains in
parliamentary membership. Al-
ready the leftists are profiting
from the Anti-Fascist People's
Freedom League (AFPFL) split, as
war-weary rural voters appear to
be accepting the NUF campaign
line of "Peace with Np and the
NUF." Nu recognizes the likeli-
hood of Communist gains--and is
expected to disown both the Com-
munists'and the NUF before the
election--but he reportedly ex-
pects to increase his non-Com-
munist support sufficiently to
offset left-wing gains.
The possibility of violence
will increase sharply during
the election campaign and immedi-
ateJ.y following the announce-
ment of returns. The army has
declared its readiness to take
action should Communists be in-
cluded in the government, and
Communist electoral gains would
increase the prospects of trouble
among the Shan tribesmen of
eastern Burma. The Mahadevi
of Yaunghwe, wife of Burma's
first president, is prepared to
lead a Shan secessionist move-
ment should the Communists win.'
This would almost certainly
launch a civil war, as the gov-
ernment is pledged to fight, if
necessary, to preserve the union.
Parliament, which in the
past has been a rubber stamp
for the AFPFL, now has its first
opportunity to control govern-
ment policies, but it is likely
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CURRENT INTELLIGENCE WEEKLY SUMMARY,
12 June 1958
to accomplish little. Each
contending faction will be
maneuvering to build up its
own strength and undermine its,
opposition. The stability of
Nu's government is especially
uncertain as the NUF, which is
not represented in the cabinet,
has committed itself to vote
for the government only on
specific votes of confidence
aAd:.-.-othertrise Jijtb-.icontifue
in the o position.
OKINAWAN DELEGATION TO VISIT US
The chief executive of the
Ryukyu Islands, Jugo Thoma, and
a government delegation will
begin negotiations in Washing-
ton on 25 June requesting a re-
vision of the American policy
of "lump-sum" payments for land
acquired by US forces and, as
a substitute, the payment of an
annual rent subject to renego-
tiation every three or five
years. In addition, Thoma prob-
ably will propose an expansion-
with further,:US.:.ai,d- of ahe:~eao-
nomic development program, which
the Ryukyuans consider nearly
as important as the land-rental
issue.
Ryukyuans are opposed to
lump-sum land payments because
they regard the procedure as
tantamount to complete surrender
of proprietary interest in the
land and because the single-
payment system fails to take in-
to account possible inflation.
They were encouraged by US High
Commissioner Moore's announce-
ment on 11 April that further
land acquisition and lump-sum
payments would be suspended
pending a review of American
policies in Washington. The
delegation's visit is largely
the result of that announcement.
Thoma, in a conversation
with Ambassador MacArthur in
Tokyo, has commented that pres-
sure for immediate reversion of
Okinawa to Japan would subside
and become less subject to po-
litical agitation if the-United
States solved the land problem
and aided the economic develop-
ment program.
At the same time, however,
the American Consulate in Naha
believes-the delegation is fear-
ful that direct contacts between
the Ryukyus and the United States
Government might jeopardize
Japan's residual sovereignty
over the islands. The members
therefore planned to consult
with Tokyo en route on any po-
litical or legal question which
may affect the position of the
Ryukyus. The Ryukyuans desire
to limit rental contracts to
the period of American admin-
istrative control and, In this
way, hope to obtain an indica-
tion of a date for the termina-
tion of the American occupation.
As an aftermath of recent
American guided-missile demon-
strations on Okinawa, Communist
propaganda accusations that the
United States is turning the is-
land into a nuclear weapons base
have encouraged the Ryukyuan
legislature to pass a resolution
calling for the complete ban of
such weapons from the:i.islaidds.
The delegation to Washington
probably will discuss this sub-
ject in its forthcoming visit.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
12 June 1958
VENEZUELA'S COMMUNIST PARTY IMPROVES POSITION
The Venezuelan Communist
party has improved its position
during 1958. Two top Venezuelan
Communists, Jesus Faria and
Gustav Machado, state that
three of Venezuela's 13 cabinet
ministers now are dues-paying
Communists and the party has
close contacts with two others.
While they may be boasting,
Finance Minister Mayobre was in
fact active in Communist party
affairs at least in the 1930's;
Foreign Minister de Sola was
legal counsel for the Czech Le-
gation in 1950 and deposited a
Czech bank draft in 1954; Educa-
tion Minister Pizani is accept-
able to leftist-inclined stu-
dents; and Interior Minister
Namu Quevedo has apparently
failed to stimulate his police
to anti-Communist action.
According to the new elec-
tion law promulgated on 23 May,
all political parties previously
organized in accordance with
legal requirements are consid-
ered-legal--a provision which
at least temporarily legalizes
the Venezuelan Communist party
as well as the mass-supported
leftist but non-Communist Demo-
cratic Action party. Furthermore,
general friendliness toward the
Communists as corevolutionaries
who helped overthrow the dic-
tatorship has not been dissi-
pated. A right-of-center former
president, Lopez Contreras, told
the press in late May for ex-
ample, "I have not quarreled
with the Communists...Gustavo
Machado is my friend."
A key factor in the pro-
longation of a climate friendly
to the Communists is the domi-
nant Communist influence among
newsmen. This influence--to a
considerable extent a legacy
from the dictatorship--is suf-
ficient to give most news sto-
ries an anti-US slant and keep
criticism of Communists out of
the papers, even in comment on
the riots during Vice President
Nixon's visit. The wide ex-
tension of this friendly climate
is indicated by the election in
late May of a reported pro-
Communist as president of the
Federation of Chambers of Com-
merce.
Of late, however, Vene-
zuela's three major non-Commu-
nist parties have shown signs
of turning away from the Com-
munists. They have issued
joint political statements,
pointedly excluding the Com-
munists.
CONTINUING POLITICAL UNREST IN PANAMA
Important cabinet changes
and substantial concessions to
student demands made by Presi-
dent de la Guardia following
the recent antiadministration
riots in Panama will not solve
the dissatisfactions which caused
the outbreaks, and political
tensions will continue. Dis-
gruntled officials ousted from
the cabinet will probably chal-
lenge the President's authority
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CURRENT INTELLIGENCE WEEKLY SUMMARY
within his already tenuous coa-
lition party, and serious divi-
sions of opinion among high ad-
ministration officials are a
threat to his retention of power.
The replacement of the po-
litically ambitious foreign
minister, Aquilino Boyd, by a
career diplomat is interpreted
by the American Embassy as an
indication that De la Guardia
hopes to avoid exploitation of
Panamanian-US issues for domes-
tic political purposes. This
view is borne out by the sub-
sequent resignations of two of
Boyd's most nationalistic ad-
visers, one of whom has proposed
that Panama receive half the
gross revenues of canal opera-
tions. Boyd's ideas will prob-
ably find welcome support out-
side the cabinet, however, since
there have been many charges
that De la Guardia has failed
to defend Panama's claims in
the Canal Zone.
Ousted Labor Minister
Cecilia Remon, astute widow of
the assassinated former presi-
dent, now may decide to assist
her brother-in-law,
politician Alejandro Remon, in
his reported plan to withdraw
the large Remon faction from
the government coalition.
National guard leaders, who
are De la Guardia's main support
and who incurred strong public
resentment by their use of force
to quell the riots in late May
in which several people were
killed, are displeased with his
promises to curtail their un-
regulated power. De la Guardia
made these promises to striking
students whose demonstrations
for school improvements were
turned into antiadministration
violence by nationalistic op-
position political groups and
some leftists. The guard com-
mandants and other administration
leaders of the traditional rul-
ing clique are suspicious of a
group of liberal presidential
advisers of Marxist background
whom De la Guardia refuses to
dismiss.
Since no president of Pan-
ama has completed his term since
1936, there is much specula-
tion that one or a combination
of those groups which oppose De
La Guardia's moderate policies
may decide the best solution
for the present unrest--which
is hurting Panama's already weak
economy--would be to remove
him from office. Encouraging
anti-US agitation by student
groups and by the unemployed
would be one means of attacking
the President.
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NOTES AND COMMENTS Page 18 of 18
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