CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001800050001-8
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• Document Creation Date: December 20, 2016
• Document Release Date: December 6, 2005
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• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
s CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
CLASS. CHANGED T~ T5&~
NEXT REVIEW DATE:
AUTH;nHR /1HR 7Q-Z.
NO CHANGE N CLASS. D
O 0ECLAS:3t HfE0
3 July 1958
DOCUMENT NO.
DATE !
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DIA, State Department review(s) completed.
CONFIDENTIAL
R URN TO ARCHIVES & RECORDS 25X1
4ETFR 1!77 CENTER
~~~ BQX 25X1
COPY NO. 50
OCR NO. 1796/58
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
OF IMMEDIATE INTEREST
Interest in the possibility
of a political compromise of
the Lebanese situation has re-
vived since UN Secretary General
Hammarskjold's mission. Two
rebel spokesmen, Abdullah Yafi
and Husayn Uwayni, believe con-
ditions probably will not per-
mit Parliament to elect a presi-
dent on 24 July or even on 23
September, when President Cha-
moun's legal term expires.
Their suggestion is that Cha-
moun finish his term, but that
agreement be reached now on a
mutually acceptable successor
and on a new cabinet.
Yafi and Uwayni admitted
that opposition leaders are not
in close touch with each other
and are uncertain of their ob-
jectives; it is therefore prob-
lematical how many rebel lead-
ers would go along with such a
compromise. Nevertheless, the
suggestion is a significant
comedown from previous rebel
demands that Chamoun quit un-
conditionally now, and the reb-
els may well be willing to bar-
gain further.
Chamoun himself gives no
sign of willingness to compro-
mise, however, and has given no
indication,
that he has changed
his long-held opinion that he
alone is capable of maintaining
Lebanon's pro-Western orienta-
tion. Chamoun clearly expects
,no support from the UN obser-
vation group; press reports
from Beirut indicate that rela-
tions between the UN officials
and the government are strained.
Under these circumstances, Cha-
moun might well ask for fur-
ther UN Security Council
action, possibly as a prelude
to a request for Western in-
tervention, if the military
situation should suddenly
deteriorate.
Lebanese army action dur-
ing the past week has been more
vigorous than previously, but
has remained within the defen-
sive policy set by army com-
mander General Shihab. Severe
fighting in Tripoli was con-
tained; the rebels inside the
city, probably short of ammu-
nition and supplies, apparently
sought to open supply lines
to rebel forces to the east.
A somewhat similar situation
may prevail in Beirut. Rebel
sive moves toward Beirut, which
began on 30 June, may have had
as one aim the resupply of in-
surgent elements still holed up
in the Moslem quarter there.
CONFIDENTIAL
MQxr, r,
PART I OF IMMEDIATE INTEREST
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SECRET
CURRENT INTELLIGENCE WEEKLY S
3 July 1958
-k
GOMULKA COMPROMISES ON NAGY, YUGOSLAV ISSUES
Polish party First Secre-
tary Gomulka's decision to break
Poland's official silence on
the Hungarian executions and to
take a sharper line on Yugosla-
via in a speech at Gdansk on 28
June was probably made under
strong Soviet pressure to get
into step with the bloc on these
two vital issues.
Although the Polish leader
criticized Nagy as a revisionist
who capitulated to the counter-
revolutionaries during the Hun-
garian uprising, he did not echo
the bloc's charge that Nagy was
responsible for a "long-prepared
conspiracy," and he avoided com-
ment on the justice or severity
of the verdict. He severely
criticized the "false and in-
jurious" Yugoslav position which,
he said, only serves the aggres-
sive aims of the imperialists.
The Yugoslavs appear to have re-
ceived the statement without
rancor and to be adopting a
position of friendly criticism
toward the Poles, in distinct
contrast to the sharpness of
their exchanges with other bloc
countries.
Gomulka's statement was
carefully phrased to appease the
USSR by a stronger subscription
to Communist orthodoxy and
solidarity while trying to avoid
taking a position on the Nagy
execution. Poland's disapproval
of the death sentence had been
made clear by its long public
silence on this action.
If Gomulka is pressured to
take a stronger stand on the
Nagy issue and to make addition-
al statements to appease the
Kremlin, he would probably do
so, but would continue to in-
sist on Poland's right to its
own "road to socialism." Con-
tinued defiance would inevitably
bring him face to face with the
Soviet capacity for military in-
tervention. Reports last week
that Soviet military forces
were on the move to bring pres-
sures on the Polish leader were
apparently false, but nonethe-
less point up that the Kremlin's
"preseneb" leaves Gomulka
few opportunities for real
independence.
SOVIET MOVES ON EAST-WEST NEGOTIATIONS
Premier Khrushchev's let-
ter of 2 July to President
Eisenhower was intended to re-
assure the non-Communist world
that recent events in Eastern
Europe do not presage a rever-
sion to a harsh Stalinist line
in Soviet foreign policy. Khru-
shchev appears anxious to over-
come the damaging effects of
the Hungarian executions and to
recapture the initiative on sum-
mit talks. At the same time,
however, Moscow attempted at
the opening of the Geneva tech-
nical talks to force the United
States to agree in principle to
a cessation of nuclear tests in-
dependent of other aspects of
the disarmament problem, or,
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PART I OF IMMEDIATE INTEREST
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMVARY
3 July 1958
failing this, to throw the blame
on the United States for a break-
down of the talks.
In an effort to display
fresh initiative on a subject
which both sides have frequent-
ly proposed as an agenda item
at summit talks, Khrushchev
called for a joint study by mil-
itary experts from the United
States, the USSR, and possibly
"certain other states" of meas-
ures to prevent surprise at-
tack. These experts would draw
up recommendations which would
be considered by a heads-of-
government conference.
Khrushchev's choice of this
subject for a new overture to
the United States probably was
designed to appear as a response
to repeated American policy
statements stressing the impor-
tance of preventing surprise
attack and calling for tech-
nical discussions on this and
related issues.
This move is reminiscent
of a similar Soviet effort to
dissipate the hostile reactions
throughout the free world to
the suppression of the Hungarian
uprising in 1959. Moscow is-
sued an omnibus statement on
disarmament on 17 November 1956
which indicated for the first
time Soviet willingness to dis-
cuss aerial photography over a
zone in Europe 500 miles on
either side of the line dividing
NATO and Warsaw Pact countries.
Moscow at that time also sug-
gested holding a summit confer-
ence to discuss disarmament and
other issues.
Khrushchev's new initia-
tive, in Moscow's view, has the
additional advantage of again
focusing world attention on
Soviet charges of provocative
American nuclear-armed bomber
flights toward Soviet frontiers.
In his letter to President
Eisenhower, Khrushchev pointed
out that these flights have made
the problem of preventing sur-
prise attack "especially acute."
He said that "on the day when
the American Government issues
the order to cease flights of
this kind, the danger of atomic
war, which threatens mankind,
will be greatly reduced."
Soviet propaganda has be-
gun to link the forcing down of
a US Air Force transport air-
craft in Soviet Armenia on 27
June with Moscow's earlier al-
legations concerning Strategic
Air Command bomber provocations.
Moscow radio declared on 3 July
that "this time the SAC has been
caught red-handed" and charged
that this incident proves that
the United States "is not tell-
ing the truth when it asserts
that the US Strategic Air Com-
mand is not committing acts of
provocation toward the Soviet
Union."
This propaganda may fore-
shadow a major Soviet diplomatic
offensive, including another
appeal to the UN Security Coun-
cil, using this latest incident
to show that provocative US
flights are not restricted to
the Arctic area. The counselor
of the Soviet Embassy in Paris
has Stated that the USSR intends
to be as difficult as possible
regarding the release of the US
Air Force crewmen, since they de-
liberately burned their downed
aircraft--an act which Soviet
authorities consider as destroy-
ing evidence of espionage.
The Soviet bloc experts
attending the Geneva technical
talks on detecting nuclear tests
are carrying forward Moscow's
campaign to force the United
States to make an unequivocal
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PART I OF IMMEDIATE INTEREST
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
statement agreeing that the ex-
perts' discussions should be
"subordinated" to the "main
task" of achieving a test cessa-
tion agreement. The Soviet
leaders apparently decided to
send their delegation to Geneva
only after they realized that
their 25 June aide-memoire,
with its implied threat of a
boycott, had failed to draw the
United States into a polemical
exchange on the issue of a
prior agreement to halt tests.
Moscow's 28 June note signif i-
cantly omitted the boycott
threat but charged that the
United States had evaded clarify-
ing its position on the purpose
of the experts' meeting.
At the opening session of
the Geneva talks on 1 July, the
Soviet chairman immediately
raised this issue by insisting
that his delegation would re-
fuse to proceed with technical
talks until the Western delega-
tion made an "unequivocal"
statement agreeing that a test
cessation is the objective to-
ward which the scientists would
be working. If the West con-
cedes this point, he said his
delegation would be willing to
SECRET
PART I OF IMMEDIATE INTEREST
"spend any amount of time" nec-
essary to reach agreement on
controls.
Moscow probably will in-
terpret any Western acceptance
of the Soviet definition of the
purpose of the talks as con-
stituting a commitment to a test
cessation. If, on the other
hand, the West rejects the So-
viet demands, Moscow probably
believes it will be able to
throw the blame on the United
States for a breakdown of the
talks. With this end in view,
the leader of the bloc delega-
tion presented an outline of
Soviet views on detection meth-
ods--obviously prepared for
possible future publication--
designed to show that the USSR
is not hostile to inspection
and is ready for serious dis-
cussions once the political
hurdle is overcome. He empha-
sized, however, the argument
frequently repeated in Soviet
propaganda that technical con-
trols merely provide additional
guarantees and are not essential
for a cessation of tests--a
line Moscow will undoubtedly
follow if the talks break down.
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CONFOLNTIAL
CURRENT INTELLIGENCE WEEKLY SdRY
3 July 1958
NOTES AND COMMENTS
STATUS OF THE USSR SEVEN-YEAR'PLAN
Production goals for 1956
for a number of major Soviet
industries have been announced
during the past few months, in-
dicating that the main lines of
economic development for the
forthcoming Seven-Year Plan
(1959-65) have been established.
The average annual rates of
growth required generally are
below those contemplated in the
original Sixth Five-Year Plan
(1956-60). They are, neverthe-
less, above the rates envisioned
by Khrushchev last November in
his 15-year forecast and the
rates planned for 1957 and 1958.
The Seven-Year Plan was to
have been completed by 1 July,
according to last fall's direc-
tive. However, no announcement
concerning the plan emerged from
the two central committee meet-
ings held during the last two
months, both of which discussed
economic problems. The American
Embassy in Moscow has recently
received a report that publica-
tion of the plan may be delayed
until September, which would
mean that work remains to be
done on the plan or only that
publication is to be delayed.
The fact that individual goals
have already been revealed for
such important areas as ferrous
metallurgy, fuel and power,
building materials, chemicals,
and consumer goods suggests
that remaining decisions would
relate to distributing produc-
tion responsibilities rather
than to such matters as rates
and direction of growth.
The Seven-Year Plan is the
first long-term plan to be drawn
up'under the new sovnarkhoz-
type administrative structure
and the first in which a con-
certed attempt apparently has
been made to coordinate So-
vict? and satellite economic
USSR: Mummy GOALS OF 004M PLAN (19.651
P R O D U C T 1 O N
ANNUAL INCREASE (%)
1958
1965
1972
~
1956.60
1958-72
9
1957
PLANNED
7-YR
PLAN
V S
ORN'IRY1l
1OlRO911i 'S
7 YR
PLAN
.
FORECAST
6TH 5?YItPUW
FORECAST
PIG IRON
MILLION TONS
37
39
64
75.8'I
9.9
5,3
7.3
CRUDE
STEEL
MILLION TONS
51
53.6
80
100-120
8.6
5.3
5.9
F SLED
MILLION TONS
40.2
41.7
68-69
-
8.3
-
7.3
PETROLEUM
MILLION TONS
99
113
230
330-400
13.3
9.4
10.5
CEMENT
MILLION Toss
29
34
76-82
90-1110
19.5
8.6
12.9
NATURAL
&WON
18.5
31
145
260-310
32
16
24.9
GAS
CUBIC METERS
ELECTRIC
BILLION KWH
210
231
500
800.900
13.5
9.8
11.7
WOOLEN
TEXTILES
MILLION
YARDS
305
315
547
600-710
6
5.2
8
SILK TYPE
MILLION
8&3
1,624
-
13
8
TEXTILES
YARDS
KNITWEAR
463
-
940
-
9
-
9
PIECES
LEATHER
MILLION
31
3
342
515
600-700
9
4.9
6
FOOTWEAR
PAIRS
CONIifENTIAL
PART II NOTES AND COMMENTS
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SECRET
CURRENT :INTELLIGENCE WEE$JY SUMMARY
3 July 1938
relationships on a long-term
basis. Either of these circum-
stances may have required more
work than was contemplated near-
ly a year ago when work on the
plan was begun.
The date of publication of
the plan may be determined in
part by an attempt to maximize
the considerable propaganda
possibilities inherent in'a
seven-year plan which apparently
will reflect an optimistic ap-
praisal of Soviet economic ca-
pabilities.' Roth the individual
goals announced-thus far and a
report in Le Monde on 31 May
giving infV nano obtained by
members of a French delegation
to the Soviet Union suggest
that industrial production wi-._.
be scheduled to i.ncreasse. ap-
proximately 10 percent annually
during the seven-year period.
Such a plan, following a rela-
tively troublesome two-year
period in which continued high
rates of growth seemed to be
threatened by raw-materials
supply problems and inadequate
plant capacities, would be par-
ticularly impressive.
(Prepared by ORR)
CEMA CONSIDERS ECONOMIC INTEGRATION PROBLEMS
The ninth plenary session able to maintain its trade with
of the Council for Mutual Eco-
nomic. Assistance (CEMA), which
concluded in Bucharest on 1 July,
discussed the problem of trans-
forming into action Khrushchev's
suggestions for increasing bloc
economic integration. The com-
muniquC announced a program for
more cooperation. Implemental'
tion,- however, will be slow and
beset by disagreements between
member governments interested
in preserving their national
economic interests and domestic
sources of supply.
The differing points of
view of the industrially devel-
oped member countries and those
basically agricultural countries
aspiring to industrial develop-:
ment probably were discussed at
this meeting. Bulgaria, for
example, has complained to Mos-
cow that the more'economically
advanced states are applying
world market prices to intra-
orbit trade. Bulgaria, with
relatively low labor productiv-
ity, cannot Compete on this
basis and is consequently un-
Czechoslovakia and Poland. Fur-
thermore, the Bulgarians charge
that the leading industrial
satellites are not complying
with CEMA directives to aid in
developing Bulgaria's industry
and are instead expanding their
own production to avoid pur-
chases from Bulgaria.
Czechoslovakia, with a .
highly developed economy, re-
portedly is resisting Soviet
pressures to reduce consumer
goods production and buy certain
of these goods elsewhere in the
interest of promoting a division
Of labor within the bloc. Czech
officials claim such action will
lower living standards and in-
crease domestic political
difficulties.
Implementation to date of
economic specialization, designed
to lead to the rational economic
development of the Soviet bloc
as a whole, has been quite limes
ited. Because of ' national-
istic tendencies within the
satellites, plans which the
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SECRET
CURRENT INTELLIGENCE WEEKLY SIIMXARY
3 July 1958
ninth CEMA session promulgated
on 1 July to promote such spe-
cialization do not break sharp-
ly with former policies and
trade patterns directed at
achieving as much self-suffi-
ciency as possible. Additional
committees to promote coordi-
nated planning were established,
but, at most, CEMA member states
probably agreed only to forego
production plans not yet well
established. The gradual in-
tegration process in Western
Europe, however, may foster in-
creased economic cooperation in
the bloc to provide a more uni-
fied front and a stronger trade
bargaining position vis-a-vis
the West. Pre- 25X1
pared by ORR)
YUGOSLAV-BLOC RELATIONS
Recent developments in
Yugoslavia's dispute with the
Sino-Soviet bloc tend to dis-
credit bloc allegations that
there will be no return to the
Stalinist methods used follow-
ing the 1948 break. Yugoslav
protestations, however, that
there is no essential difference
in the methods used now and in
1948 seem to exaggerate the
situation. Anti-Yugoslav mani-
festations are steadily increas-
ing, and the concern of Yugoslav
officials over a further in-
crease in pressures does not
appear unfounded.
Despite its dispute with
Yugoslavia, the Sino-Soviet bloc
has generally voiced a desire
to maintain "correct" diplomatic
relations. Nevertheless, whether
the snub Peiping administered
Tito's departing ambassador last
week will be followed by similar,
perhaps concerted, moves by the
rest of the bloc remains un-
clear. Recent Albanian attacks,
however, branding Tito an "enemy
and traitor" suggest that Mos-
cow does not oppose attempts to
provoke Tito into withdrawing
his ambassadors and placing
diplomatic relations on the
purely formal level which was
the general pattern between
1949 and 1954.
The execution of Nagy may
open the way for anti-Tito trials
similar to those which occurred
after 1948. Bloc propaganda
has already accused Yugoslavia
of actively directing agents in
the satellites to subvert the
"fraternal parties." Albania
has been particularly vitupera-
tive on this matter, and the
Bulgarian press has- hinted at
a further crackdown on several
writers recently fired for al-
leged Titoist leanings.
Bloc propaganda on many
recent occasions has equaled if
not surpassed the vitriolic
tone employed against the Yugo-
slavs subsequent to 1948. The
Albanians, Chinese Communists,
Czechs, and Bulgarians are most
extreme in this respect. Por-
tions of Yugoslav broadcasts
orginating in Belgrade have been
jammed since 19 June, apparent-
ly from Hungary, and the bloc
may be contemplating a resump-
tion of the 1949-54 blackout of
all Yugoslav transmissions.
Moscow's offer of 28 June
to hold "businesslike" discus-
sions with Belgrade on questions
concerning economic relations
in conjunction with the USSR's
suspension of credits to Yugo-
slavia suggests that the USSR
does not contemplate the imposi-
tion of a total economic boycott
similar to that in 1949. Since
the outbreak of the present dis-
pute, both Poland and East Ger-
many have signed agreements
which will increase the level of
trade with Yugoslavia.
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SECRET
CURRENT INTELLIGENCE ENLY
3 July 1958
The .terms of.' the - Sovi eat of -
f er, however, ? do Yiot envision toe
reinstitution of the suspended
credits, but simply hold out
for Belgrade the possibility of
getting industrial development
materials in exchange for Yugo-
slav commodities. The move ap-
pears to be tactical, timed for
the arrival of UAR President
Nasir as Tito's guest and to
counter the sympathetic recep-
tion Tito's attacks on Soviet
"aid with strings" have had
among "neutralist" nations.
Moscow's offer simply restates
a proposal contained in the
suspension note last May which
was rejected by Belgrade and
blames the Yugoslavs for the
resultant strain in relations.
Besides the absence of an
No emigre
groups are known to have been
formed, although some pro-Comin-
formist Yugoslavs have made their
escape to the bloc. Some sched-
uled visits by bloc delegations
to Yugoslavia have been canceled,
but many other exchanges are
taking place. Yugoslav newsmen
are still present in all bloc
capitals.
Reflecting Yugoslav con-
cern over an intensification of
the bloc's anti-Yugoslav activi-
ties, Belgrade has recently a-
dopted a policy more in line
with its protestations of "in-
dependence" between East and
West. Yugoslav support of many
Soviet foreign policy objectives
is now frequently balanced by
favorable comment on Western
policy. Yugoslav Foreign Minis-
ter. Popovic made the unprece-
dented remark in a recent speech
that the USSR was attempting--
like the West--to conduct its
foreign policy from a position
of strength.
During his negotiations
with Nasir, Tito will presum-
ably make a major attempt to
strengthen his independent
position between East and West.
Belgrade undoubtedly hopes its
more "neutral" foreign policy
will increase the possibility
of Western loans, which the
Yugoslavs have indicated they
will seek in order to compen-
sate for the recent cancella-
tion of Soviet credits.
(Concurred in by ORR)
NEW HUNGARIAN THREE-YEAR PLAN (1958-60)
The new Hungarian Three..
Year Plan schedules increases
in production for 1960 only
about half as great as those
envisaged under the Second Five-
Year Plan (1956-60), which was
scrapped in the fall of 1956.
The investment timetable and
foreign trade goals would have
to be fulfilled as planned--a
feat rarely achieved--if even
the modest over-all target is
to be reached. In addition,
if this year's harvest is below
average as expected, it could
cause the plan to fail. Person-
al consumption is the only sec-
tor for which plans could be
cut back, but any lowering of
the living standard would in-
crease tension between the pop-
ulace and the regime and would
endanger production plans by
removing the incentives given
farmers and workers since the
revolt.
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PART II NOTES AND COMMENTS
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.:SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
During the three-year
period, production in social-
ized industry is to rise 22
percent above the 1957 level,
with rates of growth for heavy
industry exceeding those for
light; agricultural output is
HUNGARY:
GROSS PRODUCTION
OF SOCIALIZED INDUSTRY
ANNOUNCED PERCENTAGE
DIFFERENCE FROM 1955 LEVEL
ACTUAL
PLANNED
9
2
1955
LEVEL
8
1954 1955 19956 11957 1958 1960
DISCARDED
SECOND
FIVE -YEAR
PLAN
(1956-60)
3 JULY 1958
to increase 12 to 13 percent,
"provided weather conditions
are average." Although Hungary
may not achieve agricultural
targets, the modest industrial
goals may be realized, since
the level of production planned
for 1960 is only about 6 per-
cent above that claimed to
have been reached during the
fourth quarter last year.
Investment, lower under
the Three-Year Plan than be-
fore the revolt, is primarily
for replacement rather than
for new construction. In the
allocation of investment funds,
heavy industry is again em-
phasized, while the share for
agriculture is reduced. Parm-
ers are being told to do their
own investing. Allocations
show a marked shift in favor
of the electric power indus-
try at the expense of engi-
neering and metallurgy, which
received much larger portions
in earlier plans. Hungary is
poor in power resources, but is
still depending heavily on its
engineering industry for in-
creasing exports.
Although information on
the Three-Year Plan does not
include specific goals for for-
eign trade, the unpublished
1958 plan reportedly demands
adjustments necessary to re-
establish a balance of trade.
This may not be achieved this
year; during the first quarter
of 1958,Hungary continued to
import more than had been
planned. A poor harvest this
year may cause the export plan
for food products to fall short
and could make necessary an in-
crease in food imports. Re-
payments on foreign loans in
1959 and succeeding years will
continue to hamper recovery
toward a favorable balance of
trade.
As a result of scheduled
production increases, national
income is supposed to rise 13
percent by 1960, and real wages
according to planning chief
Arpad Kiss, are to "exceed the
1956 level by 6 percent." If
Kiss is quoted correctly, real
income during the Three-Year
Plan is actually to be depressed,
since real wages rose during
1957 by 14 to 16 percent and
peasant Income by 8 to 10 per-
cent. The regime previously
admitted that no increase in
living standards can be ex-
pected for the three-year
period, and an actual lowering
is indicated under the difficult
circumstances. Production
in 1957 recovered to the 1955
level, but national income
did not, and the budget was
balanced only with the help of
foreign credits, which created
a temporary and spurious pros-
perity. (Pre- 25X1
pared by 0 R
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CURRENT INTELLIGENCE WEEKLY -'RY
3 July 1958
SOVIET ADVANCES IN THE ANTARCTIC
The Soviet position in
Antarctica has been enhanced
by the work of the third
Soviet Antarctic expedition from
September 1957 to June 1958.
The expedition supplied existing
and additional new stations with
improved equipment, established
a 180-man replacement staff to
continue operations through the
winter, set up a new station,
Vostok, at the South Geomagnetic
Pole, continued oceanographic
and hydrographic operations of
the vessel Ob, and began mete
orologibal rocket launchings
from the Ob.
Departed V.ip.r is.-24 May '58
Departed T.k.hu.no-I Jun. '38
THIRD SOVIET ANTARCTIC EXPEDITION - SEPTEMBER 1957- JUNE 1958
140 130 120 110 100 90 80 70
USSR station * United States station
Area seen by Soviet explorers, 1955-57
Operations of oceanographic vessel Ob
I Meteorological rocket launching site
Oceanographic, hydrographic and aerial
surveys, exploration and mapping
3 JULY 1958
To Laster Island
and
..s! to Valparaiso
Only one major goal of the
expedition was not met. Sovet-
.skaya station had to be tempo'
rarij.y established .400. miles
short of the Pble of Relative
Inaccessibility. 'Plans for next
season call for its , relocation
at this most remote spot on the
continent.
The expedition also set up
Komsomolskaya station as-an
intermediate station between
Mirnyy:anid Vostok and Sovetskaya,
,bringing to six the number of
manned Soviet stations. Two
automatic meteorological stations
-CHILEAN CLgy FUEGO FAL15 AND
,W
B0UVET I5.
(BOUVETOYA)
PRINCE
0 EDWARD
I5.
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CURRENT INTELLIGENCE -WEEKLY SUMMARY
3 July 1958
were established, one 153 miles
south of Mirnyy and the second
at Drygalski Island. Cross-
country glaciological studies
indicated base rock in some
places to be hundreds of meters
below sea level, suggesting
that the Antarctic may not be a
continent but rather a series
of islands under a massive ice
sheet.
Operations of the Ob in-
cluded extensive hydrographic
and oceanographic surveys in the
Indian and South Pacific oceans.
Over 7,000 square miles along
the coast were explored, includ-
ing serial photography along
more than 1,000 miles of coast-
line east of Mirnyy. Previously
unknown areas were mapped, and
numerous significant corrections
were made to earlier charts.
One new island, Chugunov, was
discovered 37 miles northwest of
Oazis Station, and claims are
made that 35 other geographical
features were discovered.
The Soviet whaling fleet,
normally operating incommunicado
in the South Atlantic, broke
into the news when its research
CHINESE COMMUNISTS PUSH
Prospects for an increase
in most agricultural products
this year in Communist China
are good, but not as favorable
as statements emanating from
Peiping would indicate.
The prestige of Mao Tse-
tung and his most influential
lieutenants is heavily commit-
ted to a "giant leap forward"
in construction and production,
and particularly in agricultural
production. Liu Shaochi at the
party congress in May pleaded
vessel Slava-15 landed operation
parties on Zavodoski and Mon-
tagu islands in the South Sand-
wich Islands group.
The USSR still has not ex-
tended its cold-war antagonisms
into Antarctica, probably to
preserve the cooperative atti-
tude which was developed during
the IGY and which is necessary
for the continuation of a scien-
tifically productive interna-
tional post-IGY program.
The Soviet note accepting
an invitation to attend a US-
proposed Antarctic conference
is the first official statement
reserving the right to make a
claim, calling for the continu-
ation of research in Antarctica
"for a long time into the fu-
ture," and expressing a desire
for freedom of research by in-
ternational agreement. It also
champions--as the USSR did in
its memorandum of 1950--the in-
terest of any nation wishing to
participate, making specific
reference to India.
(Prepared by ORR; Concurred in
by OSI)
AGRICULTURAL CAMPAIGN
for special efforts in 1958, in
order to "prove to the doubters"
that they are wrong.
Agricultural officials have
made some extravagant "estimates"
of this year's crops, and even
the more sober statements pre-
dict an increase of 10 to 20
percent in grain output.
The basis for the current
predictions of unprecedented
harvests is the extensive work
done in water conservation last
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
winter and spring. In the six
months ending 30 April, Peiping
claims to have brought 58,000,-
000 acres under irrigation, an
increase of 69 Percent. Vir-
tually all of this increase
comes from small, local proj-
ects. A sizable portion of the
expansion, of course, does not
involve much actual construc-
tion, and regime spokesmen have
warned peasants that much of this
work will probably be washed
away by summer rains. Never-
theless, important increases in
crop yields should result.
The central government, in
addition to providing more
chemical fertilizers, insecti-
cides, and powered irrigation
equipment and farm machinery
than in past years, has ordered
urban workers and members of the
armed forces to help in rural
work. To boost the program,
even such notables as Premier
Chou En-lai have taken part
in "socialist labor" on water
conservancy projects.
To stimulate aggressive
planning at the local level,
two sets of targets were estab-
lished. The central authorities
drew up an original set that was
"reasonable" and "certain" to be
accomplished; the regional or-
ganizations "examined and debat-
ed" the assigned targets and
then announced their own goals,
which almost always greatly ex-
ceeded the targets set by the
central government. On this
high tide of enthusiasm, some
local authorities pledged to
complete in one year the long-
range goals set for 1967.
Despite unfavorable weather
in many important agricultural
areas, nearly all reports echo
the theme that harvests this
year will set new records pro-
vided no serious calamities
occur.
On 30 June the Ministry of
Agriculture announced that ac-
cording to "first results" the
summer harvest--winter wheat,
rape, and barley, which ordi-
narily constitute about one
sixth of total grain production
--had reached 47,500,000 tons,
17,500,000 tons more than last
year. This increase is almost
as large as the increase claimed
by Peiping for all food crops
during the First Five-Year Plan.
This claim is made in spite
of dry weather that has persist-
ed since last autumn in the major
wheat-growing areas. Peiping has
admitted that winter wheat acre-
age had been reduced from the
previous season's 67,675,000
acres to 59,675,000 acres, which
would mean that startling in-
creases in yields would be
necessary to reach the claimed
level of output.
In South China the pros-
pects for a large early rice
crop are good, iospite excessive
rains during May in Hunan, a
flood along the Kan River in
Kiangsi, and more than the usual
trouble with insects in some
areas.
Peiping probably has not
had time to gather accurate
statistics to substantiate its
claims for crops already har-
vested. Tan Chen-lin, member
of the secretariat of the cen-
tral committee and the regime's
chief spokesman on agricultural
matters, suggested that early
claims were inflated when he
admonished the agricultural
cooperatives to pay attention
to honesty and exactness in
reporting production figures.
Regime spokesmen warn that the
autumn harvest--which provides
the great bulk of agricultural
production--can still be great-
ly influenced by weather and
that an intense effort is still
required of the peasants.
ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
DE GAULLE'S PROBLEMS WITH THE MILITARY
An important factor delay-
ing French Premier de Gaulle's
elaboration of a precise policy
on Algeria may be the necessity
of assuring complete control
over the French Army there,
Recent and prospective appoint-
ments to key military posts
seem aimed at consolidating the
government's position.
Lorillot by General Andre Zeller
may have been prompted by con- 25X1
cern over -unrest among junior
officers.
Many career officers, iso-
lated in Indochina and Algeria
for several years and embittered
by the vacillation of Paris, are
less susceptible than their
elders to De Gaulle's prestige
and are intoxicated by the suc-
cess of the 13 May coup. They
are increasingly suspicious of
De Gaulle's reliance on the
political figures they denounce.
De Gaulle fears clarifica-
tion of his views would crystal-
lize opposition from the various
elements in Algeria. The Euro-
pean settlers use the slogan of
"integration" to cover their in-
tention of retaining the Status
quo. Some military elements
seem to believe that full in-
tegration of Algeria into France
is possible. Many army officers,
however, are intent only on re-
taining Algeria for France; they
feel the way to hang on to Al-
geria is to give the Moslems
increased political, economic,
and social status, even if this
means some sort of a federal
relationship.
The premier's sudden re-
placement of Army Chief of Staff
The government's jitters
over these issues were apparent
on 26 June when it seized two
leftist weeklies which charged
a purge of liberal political and
military elements in Algeria.
De Gaulle previously had public-
ly rejected the practice of
press censorship.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
SPLIT WITHIN MOROCCAN ISTIQLAL PARTY
The stability of the Moroc-
can Government, formed in May
by moderate Istiglal Premier
Ahmed Balafrej, is threatened
by a split within the ruling
party. The moderate leadership
of the party, which also pre-
dominates in the government, is
challenged by a powerful left-
wing faction which seems deter-
mined either to force the party
to adopt its neutralist anti-
monarchical views or to break
away and form an opposition par-
ty. Specifically, this faction
demands that the party's con-
gress, now scheduled for 25 Sep-
tember, be convened in July.
Istiglal, after its forma-
tion in 1944, became the most
important group in the Moroccan
struggle for independence. As
a result, it attracted members
with a variety of political
views. Its organizational struc-
ture is largely the work of
Ahmed Balafrej, who has served
as secretary general since the
party's inception. After Bala-
frej entered the government in
the spring of 1956, however,
his party functions were dele-
gated to Mehdi ben Barka, con-
sidered the leader of the left-
wing faction. He is a member
of the party's political com-
mittee and president of the Mo-
roccan Consultative Assembly.
The party has been on the
verge of splintering several
times since Morocco became in-
dependent on 2 March 1956. By
astute maneuvering, the moder-
ates have avoided a formal split
and maintained their ascendancy.
The present situation, however,
appears to be by far the most
serious to date, and the party's
executive committee is reported
as a last resort to be consider-
ing the expulsion of Ben Barka
and his principal lieutenants--
Mahjoub ben Seddik, secretary
general of the Istiglal-affiliat-
ed Moroccan Labor Union, and
Abdullah Ibrahim, former minis-
ter of labor. The expulsion of
Ben Seddik, who is said to be
completely under the spell of
Nasir, might lead to the crea-
tion of a labor party which could
pose new difficulties for the
Moroccan Government.
Moderate party leaders with-
in the government, competing
with left-wing leaders for popu-
lar support within the party,
are taking a more intransigent
line on popular issues. This
was particularly noticeable in
the joint communiqud issued on
15 June at the close of the
visit of Ghana's premier, which
declared an intention to follow
a "foreign policy based on non-
alignment," a theme adopted some
months ago by the left-wing fac-
tion. Endorsement of nonalign-
ment was carried one step further
on 30 June when the Moroccan
Government lodged a strongly
worded protest with the American
Government regarding a routine
change in command at the American
air base at Nouasseur, which the
Moroccan press on this occasion
played up as an "aggressive de-
sign of the United States to
commit Morocco to side with the
West."
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CURRENT INTELLIGENCE WEEKLY SU $T
3 July 1958
Despite denials by both
Cairo and Damascus of any im-
pending currency reform, ru-
mors of an imminent change
are increasing.
Syrian
usinessmen,in order to avoid
financial losses, are said to
hope that Egypt will devaluate
its pound before any unified
currency is issued. Egyptian
devaluation appears unlikely,
however, since it would be
tantamount to an admission of
Nasir's failure in the eco-
nomic sphere, and currency re-
form imposed by Cairo could
increase Syrian conservative
opposition to Nasir.
In mid-1956 the Egyptian
pound was bought and sold
relatively freely at close to
its par value of $2.88. How-
ever, the economic stagnation
which followed the Suez seizure,
coupled with Soviet cotton-
purchasing practices, soon re-
sulted in a steady decline in
the pound's value. Thus far,
Cairo's stopgap measures have
failed and by 20 June, after
a temporary increase in value
in early 1958, Egyptian pound
notes dropped on the Zurich
market to an all-time low of
about $1.62--or less than 57
percent of par.
Unlike the Egyptian pound,
the Syrian currency is stable,
relatively easily convertible
into foreign exchange, and
backed by substantial gold
and foreign currencies. Fol-
lowing union with Egypt on 21
February, there was a flight
of capital from Syria to Beirut
and Zurich, reflecting the ap-
prehension of the business
community over Nasir's designs.
Prompt action by Syrian finan-
cial authorities succeeded, at
least temporarily, in restor-
ing confidence in the currency.
Plans for introducing a
unified currency reportedly
call for exchanging 10 or 11
Syrian pounds for one new
"dinar." Since this exchange
rate understates the real
value of the Syrian currency
by about 43 percent, it would
amount to a virtual expropria-
tion by Egypt of millions of
dollars worth of Syrian pounds.
Such a move, would enable Egypt
to acquire a major portion of
Syria's $70,000,000 worth of
gold and foreign exchange at
cut-rate prices.
If Nasir undertakes such
plans, it would indicate that
he believes the conservative
forces in Syria have been
effectively neutralized and
that the stage has been set
for an accelerated Egyp-
tionization of Syria.
The Finnish quadrennial
parliamentary elections on 6
and 7 July will be held at a
time when Finland's relations
with the Soviet Union, par-
ticularly on the question of
increased economic ties, have
again become a major concern.
President Kekkonen, who
made a state visit to the USSR
from 22 to 31 May, returned
with a Soviet offer of a ruble
loan of $100,000,000 to
$125,000,000 for industrial
development, particularly in
the depressed northern prov-
inces. In view of the short-
age of development capital,
there will be some sentiment
among the non-Communist parties
favoring the Soviet loan, but
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
FINNISH DIET
1954 QUADRENNIAL ELECTIONS
POPULAR VOTE
rFNTER CENTER
" Includes 51 regular Social Democrats and 3 dissidents
who in March 1958 formed the separate "Independent
Social Democratic Diet Group" (Skogists).
it is unlikely that Parliament
will approve utilization of the
entire amount.
At the same time, Finland
desires to strengthen its eco-
nomic ties with the West and
is considering specifically
some form of association with
OEEC, if such a development
will not adversely affect Fin-
land's trade commitments with
the USSR.
Foreign policy matters
have been the most conspicuous
subject in an election cam-
paign which has been described
as unusually passive. The
Agrarians have sought to pre-
sent themselves as the party
best suited to continue former
President Paasikivi's policy of
rapprochement and cooperation
with the USSR. The other non-
Communist parties agree that
the primary objective of Fin-
nish foreign policy must be to
maintain a strictly neutral
position in big-power disputes
and to pursue a policy of
friendly cooperation with the
"big neighbor to the east."
The Finns are presently
confronted by a number of se-
rious economic problems, such
as budgetary difficulties, the
relationship of farm prices to
the wage level, and the short-
age of investment capital for
industrial expansion. The elec-
tion may help to clarify the
situation by indicating public
opinion on party programs. Since
November 1957, Finland has been
governed by nonpolitical cabinets
made up largely of civil servants,
and a delineation of public opin-
ion may permit the formation of
a more responsible and normal po-
litical government.
While the recent executions
in Hungary may affect adversely
the fortunes of the Communist-
front Finnish People's Democratic
League (SKDL), the league may
profit from the long-standing
feud between the trade union
faction and the party organiza-
tion. Splinter Social Demo-
cratic candidates are running
in only four districts. While
they are unlikely to be elected,
the regular ticket may suffer.
The Agrarians, the largest party
in the country, may gain a few
seats in addition to the 53 they
now hold. No party is expected
to obtain a majority, however,
and the most likely outcome of
the election will be the forma-
tion of an Agrarian-dominated
coalition go .r nt.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
Manifestations of unrest
in Portugal which characterized
the recent presidential election
campaign are likely to continue
after the inauguration of Presi-
dent-elect Americo Thomaz on 8
August. The Salazar regime's
refusal to make concessions to
check political discontent may
encourage Communist activities.
Strikes or partial walk-
outs have been reported in 12
widely separated localities in
the past month, and in late June
a demonstration of farm laborers
in central Portugal resulted in
two deaths from police gunfire.
Slogans carried in the demon-
stration suggest it may have
been instigated by the Commu-
nists.
Dissatisfaction is also
reported among junior army of -
f icers, whose general discon-
tent has been heightened by
Defense Minister Colonel Santos
Costa's political activity.
They resent his use of the mil-
itary to repress disorders dur-
ing the elocti.on campaign
and his alleged firing of the
director of the Military College
for failure to dismiss two of-
ficer-teachers sympathetic to
the opposition candidate, Gen-
eral Humberto Delgado. Many
army officers are also described
as highly critical of the re-
gime's policy of branding as
Communists those who do not
agree completely with it.
The regime will probably
try to alleviate discontent by
expanding housing, school, and
hospital construction, but is
also planning more restrictions
on freedom of expression. Prime
Minister Salazar on 30 June pub-
licly proposed changing the con-
stitution to provide for the
election of the president by
the upper house of Parliament
rather than by direct popular
vote. Such moves are likely
to antagonize supporters of the
regime who considered Delgado
a demagogue but shared his view
that socio-political conditions
could be improved. Salazar is
reported unwilling to listen
to the advice of conservatives.
who has been urging him
government'if he wishes to avoid
throwing the country into the
arms of the Communists.
POLITICAL DETERIORATION IN HAITI
Political and economic
conditions in Haiti have de-
teriorated to the lowest point
since the 16-year American oc-
cupation ended in 1931. Dr.
Francois Duvalier, President since
last October, appears to have
made considerable headway in
suppressing his domestic op-
ponents, but in the process,
the army has been so weakened
by continuing purges that it
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CURRENT INTELLIGENCE WEEKLY SU ARY
3 July 1958
may no longer be able to pre-
serve law and order.
Racial and class tensions
have been aroused to such a
pitch that the mulatto minor
ity, the country's social and
economic elite, is under a
virtual reign of terror. The
government, although strongly
biased in favor in the blacks,
has had few resources and lit-
tle time and energy to devote
to improving the extremely-, low
living conditions of the Negro
masses,-who are becoming in-
creasingly sullen and restive.
The opposition, though
disorganized and with most of
its leaders in exile, neverthe-
less continues determined to
force Duvalier's ouster. A
seemingly coordinated campaign
of arson, which began on 24
June, may be part of the op-
position's efforts.
Inflammatory radiobroad-
casts directed from the Domin-
ican Republic against Duvalier
for the past several months
confirm Trujillo's direct inter-
est in Haitian affairs. Reports
that he has offered material
assistance to Duvalier's enemies
have been increasingly frequent
since Duvalier ousted pro-
Trujillo General Kebreau as
Haitian army chief of staff
last March.
anarchy.
It is unlikely that Duval-
ier's opponents would stay united
if And when they succeeded in
ousting him. No identifiable
Haitian leader or political
group has sufficient'popular
support or politico-military
strength to bring stability to
the country in the near future.
There is real danger that the
reported_Trujillo-backed plot,
or any-other violent act, might
spark uncontrolled and spon-
taneous rioting and looting
among the Haitian masses.. The
result.could be a state of near 25X1
THE NEW BELGIAN GOVERNMENT
The formation on 1 July
of a Social Christian party
(PSC) cabinet, Belgium's 13th
postwar government, ends a
month-long political crisis
but ushers in a period of po-
litical instability, which will
probably continue until autumn
when the Brussels Fair is over
and new elections can be held.
The PSC holds only a slim ma-
jority in the Senate and failed
to gain control of the Chamber
of Deputies in the 1 June elec-
tions, but succeeded in ousting
the Socialist-Liberal coalition
of Prime Minister Van Acker by
registering a 5-percent vote
gain over 1954 figures. As a
consequence, the new government
can be overthrown at any time
by the Socialists and the Lib-
erals, both of whom refused to
join the Social Christians in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
a coalition and are eager to
recoup their election losses.
Gaston Eyskens, prime min-
ister in the PSC-Liberal coali.
tion of 1949, heads the new
government. He is considered
an outstandingly able man, but
faces a number of controversial
domestic problems,
including serious
overproduction in the
high-cost coal in-
dustry. He may be
forced to resort to
increased restric~
tions on coal imports
from the United
States as a short-
term solution, but
mounting stocks will
necessitate more de-
cisive and political-
ly difficult meas-
ures. Another con-
troversial measure
included in the Eys-
kens program is "free
education" for chil-
dren up to 18 years
of age. He .will
probably try to re-
store to parochial schools, in
the face of bitter Socialist
and Liberal opposition, sub-
sidies reduced by the previous
government.
Other foreign policy changes
are unlikely. Eyskens, as well
as the new foreign minister,
Pierre Wigny, favors European
integration as well as NATO,
and is favorably disposed to-
ward the United States. However,
the new foreign commerce minis-
ter, Andre Duquae, who will act
The prime minister is firm-
ly committed to NATO, but will
attempt further to reduce the
military service term as prom-
ised by the PSC during the
election campaign. The Social-
ists and Liberals, with the
next election in mind, would
probably hesitate to oppose
this measure. Arthur Gilson,
the new defense minister, is a
firm believer in a gradual re-
duction and possible elimina-
tion of compulsory military
service in favor of long-term
volunteers to fulfill Belgium's
commitments to NATO.
as foreign minister in Wigny's
absence, has been critical of
American trade policies. The
new minister of economic affairs,
Raymond Scheyven, reportedly
favors increased East-West "con-
tacts," including contacts with
Communist China. Recognition
of Peiping is generally favored
in Belgium, but has never
been
actively
pursued because
of
American
opposition.
The
appointment of a
new
minister
of colonies has
been
delayed,
although Governor Gen-
eral Petillon of the Belgian
Congo reportedly has been of-
fered the position. Many Bel-
gians hope for a more progres-
sive policy in the Belgian Congo
with the departure of tradition-
alist Liberal Minister of Colo-
nies Buisseret.
SECRET
NOTES AND COMMENTS Page 15 of 17
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
INDONESIA
The North Celebes dissi-
dent capital of Menado fell on
26 June, but resistance is con-
tinuing in other areas of the
peninsula, directed from new
rebel headquarters in the hills
south of Menado. The dissidents,
in their effort to continue
armed opposition to the Djakarta
government,are receiving assist-
ance from Nationalist China.
(Chiang Ching-kuo,
Nationalist China's security
chief, has stated his govern-
ment will give the dissidents
as much support as possible.
In Sumatra, dissident gue-
rilla activity against economic
targets continues to increase.
As of 28 June, facilities of
seven estates in the Medan area
and one palm oil factory had
been completely destroyed. Sev-
eral other estates have been
the targete of destructive
raids. Communist estate work-
ers in the area are again be-
ing given arms, creating a fur-
ther security threat.
Army Chief of Staff General
Nasution told the American army
attache on 28 June he had ordered
armed guards placed on the es-
tates to protect them from dis-
sident attacks and had given
orders some time ago for meas-
ures to prevent damage to the
oil fielde and installations in
Central and South Sumatra. Gov-
ernment troops in North Sumatra
are being reinforced in an ef-
fort to control guerrilla activ-
ity there.
program.
from Japan under a reparations
The government has taken
another step toward supplying
critically needed interisland
shipping by signing a contract
with Poland on 26 June for the
construction of 24 ships. Earlier
this year, the Soviet Union
sold Indonesia ten small mer-
chant ships and two small tank-
ers.. Indonesia has also nego-
tiated the purchase of nine ships
SOUTH KOREAN POLITICAL SITUATION
President Rhee, now 83,
continues to be the dominant
political figure in South Korea,
but with increasing age has be-
gun to display a greater depend-
ence on his political subordi-
nates. During the past two
years, he has allowed his min-
isters increased authority and
responsibility, although he
has continued to shift govern-
ment officials virtually at
will. Concurrently he has del-
egated considerable authority
over Liberal party affairs to
his chief political lieutenant,
Yi Ki-pung.
Rhee's appointment of Cho
Yung-sun, a compromise nominee,
as chief justice of the Supreme
Court is a recent indication of
the President's mellowing at-
titude in handling domestic af-
fairs, Despite his long-standing
displeasure over the judiciary's
SECRET
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SECRET
3 July 1958
failure to give him the unques-
tioning obedience he demands
from other branches of the gov-
ernment, Rhee accepted Cho as
a second choice for the post
following prolonged judicial
opposition to his first-choice
candidate. Cho, nevertheless,
probably will be more suscep-
tible to presidential influence
than his predecessor.
As a result of the Liberal
party victory in the 2 May Na-
tional Assembly elections, Yi
Ki-pung was easily re-elected
speaker, and, despite a rise in
party factionalism earlier this
year, he appears to be success-
fully tightening his control
over party affairs.
The opposition Democrats
also are attempting to improve
party discipline, anticipating
that the administration will
SECRET
NOTES AND COMMENTS Page 17 of 17
call elections some time before
24 January 1959 for the as-yet-
unconstituted upper house of the
legislature. Long-range pros-
pects for Democratic harmony,
however, are likely to be jeop-
ardized by factional maneuvering
for the party's 1960 presidential
nomination.
As the new assembly session
gets under way, the Liberals
are allowing the Democratic op-
position to question several
ministers regarding the procure-
ment of faulty soap for the
military, the embezzlement of
37,000 bushels of government-
held rice, and alleged election
irregularities. The Liberals,
however, probably will use their
control of the legislature to
prevent the Democrats from se-
riously obstructing the work of
the assembly for any great
length of time.
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 19 58
PATTERNS AND PERSPECTIVES
ULBRICHT AND THE EAST GERMAN COMMUNIST PARTY
Walter Ulbricht, tough old
Stalinist leader of the East
German Socialist Unity (Commu-
nist) party (SED), is carrying
forward his plans to assure his
continued control of the party.
Recent occurrences indicate
that the SED is not the strong,
monolithic structure Ulbricht
would like, and he is proceed-
ing ruthlessly to prevent any
possible opposition moves either
prior to or during the party
congress beginning on 10 July,
in an effort to_present '.to the
country. and the world . ,a facade
of.party solidarity.
Party Shake-up
The shake-up Ulbricht con-
sidered necessary in several
district party organizations em-
phasizes the party's fundamental
weakness and reveals the lack of
genuine support for the Ulbricht
Pro-Ulbricht
Anti-Uhricht
* Non-Communist
Ulbricht
Norden
Hager
Mueckenberger
Neumann
Verner
Grueneberg
Froehlich
Honecker
PARTY COMMISSION FOR
DEFENSE AND SECURITY
GOVERNMENT ORGANS
DEFENSE - Stoph
STATE SECURITY - Mielke
INTERIOR - Maron
JUSTICE - Benjamin
leadership at the middle and
lower echelons. Old-time local
leaders were replaced by new
men in an attempt to rejuvenate
the lethargic party apparatus
and demonstrate to dissident
and apathetic functionaries
that safety for them lies only
in diligent activity on behalf
of Ulbricht.
Something of the scope of
the shake-up was revealed by
secretariat and politburo mem-
ber Alfred Neumann to the 36th
central committee plenum., i-;;.
held on 10 and 11 June. He
noted that the composition of
a large segment of the SED lead-
ership at the local level had
proved unsatisfactory and that
district leaders had often been
lax--at times to the point of
"sabotage"--in carrying out in-
structions from superiors. To
correct this situation, the
EAST GERMANY:
PARTY AND GOVERMENT CONTROL STRUCTURE
FULL MEMBERS CANDIDATES
Ulbricht Honecker
Pieck Mueckenberger
Grotewohl Leuschner
Matern Warnke
Ebert
Rau
Stoph
Neumann
PARTY COMMISSION FOR
CULTURAL AND EDUCATIONAL
AFFAIRS
Kurella
GOVERNMENT ORGANS
CULTURE - Becher
EDUCATION - Lange
CHURCH AFFAIRS - Eggerath
UNIV. AFFAIRS - Girnus
PHYS. ED. & SPORT - Ewald
RADIO & TV - Reiss
CONFIDENTIAL
COUNCIL OF MINISTERS
Prime Minister Grotewohl
1st Deputy Prime Min. Ulbricht
Deputy Prime Min. Stoph
Deputy Prime Min. Selbmann
Deputy Prime Min. Leuschner
Deputy Prime Min. Loch*
Deputy Prime Min. Bolz *
Deputy Prime Min. Scholz *
Deputy Prime Min. Rau
Deputy Prime Min. Max Sefrin
Member Maron
Member Rumpf
Member Lange
PARTY COMMISSION FOR
ECONOMIC AFFAIRS
Apel
GOVERNMENT ORGANS
STATE PLANNING
COMMISSION - Leuschner
ALL ECONOMIC AGENCIES
(Economic ministries to be
dissolved)
PART III PATTERNS AND PERSPECTIVES Page l of 17
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
central committee formed spe-
cial "brigades" to visit each
district headquarters during
the party conventions which
elected delegates to the party
congress. The major task of
the "brigades," of course, was
to ensure that only loyal U1-
bricht adherents were elected
and thereby forestall the pos-
sible eruption at the congress
of protests against his dicta
torial rule.
In his speech, Neumann
mentioned specific shortcomings
in the party leadership in the
Halle, Erfurt, Cottbus, and
Gera districts. Because of
their inability to cope with
ideological, economic, and
organizational., problems,
these area executives had
to be "strengthened." Neu-
mann said that only
quick and effective
action by the cen-
tral committee in
changing the composi-
tion of the leadership
at the district level
had prevented a seri-
ous setback for the
party. He criti-
cized district or-
ganizations for fail-
ure to combat "op-
portunistic and re-
visionistic views"
with sufficient
vigor, and for per-
mitting party educa-
tion to lag, with the result
that stagnation in both thought
and action had become increasing-
ly evident.
Neumann warned against a
tendency to adopt liberalistic
and revisionistic interpreta-
tions of events and emphasized
the need to combat the "oppor-
tunistic policy of the factional
group." In this connection, he
reminded his audience that "the
central committee has unanimous-
ly and resolutely warded off the
attempt of the opportunistic
Schirdewan-Wollweber-Ziller
group which was favored by Com-
rades Oelssner and Selbmann.
Attitude Toward Schirdewan.:
Since the 36th plenum,
probably encouraged by the Nagy
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
Fie;e
FEDERAL
SECRET
werin NEUIRANDENBU
4) Suh1,
execution, Ulbricht has apparent-
ly made a dramatic shift from
his former moderate attitude to-
ward the Schirdewan group--
purged from the leadership in
February 1958--and has inten-
sified his attacks on this op-
position faction. He is said
to be passing the word that the
case of former Minister for
State Security Ernst Wollweber,
a loyal Communist functionary
since 1919, is not just a party
disciplinary problem, but that
he must be brought to public
trial. Ulbricht has also or-
dered cancellation of Woll-
weber's free medical treatments
and is attempting to have him
ousted from his quarters in
the Soviet compound
at Karlshorst. Since
the latter move would
have to be ordered by
Soviet authorities, it
appears that Ulbricht
is taking the initia-
tive in trying to per-
suade the Russians to
approve more drastic
action against his
opponents.
Party publica-
tions are now reflect-
ing the tougher line
and have begun to re-
fer to Schirdewan and
Woliweber as "enemies
of the party." Former
party theoretician
Fred Oelssner and
Deputy Planning Com-
missioner Fritz Seib-
mann, both of whom
have opposed Ulbricht
in the past, have been
requested, along with
Schirdewan,to submit
explanations of their
conduct to the-polit-
buro. Such requests
are demands for public
self-criticism, pre-
sumably at the party
congress. While Oelss-
ner may comply, Selb-
mann almost certainly
will not, and it is
doubtful that Schirde-
wan and Wollweber will
confess abjectly, as Ulbricht
probably has demanded.
The execution of Schirde-
wan or Selbmann, however, both
of whom have some popularity in
the party and among the people,
would undoubtedly cause a wave
of revulsion and resentment
against Ulbricht which might
be difficult to control. Since
few East Germans, even party
members and functionaries, were
really convinced that Schirde-
wan had done anything which war-
ranted removal from his party
posts, even fewer would swallow
Ulbricht's explanation that his
guilt was so heinous as to re-
quire his execution. Ulbricht
SECRET
1ubrandenburg
FRANKF T
' RL1N Frank
Leipzig
LEIPZIG
COTTBUS
~ Gera Chemnitz
GERA KARL MARX
STADT,J"
CZECHOSLOVAKIA
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
probably has no desire to create
martyrs who might be more trou-
blesome dead than alive. Fur-
thermore, a blood bath would
not help East Germany's efforts
to prove its respectability and
fitness to join the family of
nations as one of two legiti-
mate German states.
The stepped-up campaign
against the group identified
with Schirdewan indicates that
there is more pro-Schirdewan
sentiment within the SED than
is desirable from Ulbricht's
standpoint and that he is de-
termined to take whatever steps
necessary to suppress it. The
Austrian announcement that
Chancellor Raab's visit to Mos-
cow would be postponed for one
week from 13 July because Khru-
shchev "will be abroad" raises
the possibility that he may. at-
tend the congress. His attend-
INDONESIAN DISSIDENTS INTENSIFY GUERRILLA WARFARE
The Indonesian central gov-
ernment is faced with the prob-
lem of guerrilla activity by
several thousand armed dissi-
dents, even though resistance
on Sumatra ended in early May
and has all but ceased in North
Celebes. This activity has al-
ready been more intense and ef-
fective than any dissident ac-
tions during the more conven-
tional phase of the civil war,
and, in the months to come,
will constitute a serious drain
on central government resources.
There may be serious political
repercussions, not necessarily
in the direction hoped for by
dissident strategists.
Although the army controls
the major towns in North and
Central Sumatra, Djakarta has
been unsuccessful in re-estab-
lishing its former authority
on the island, principally be-
cause of the presence of guer-
rilla bands, passive resistance
among large segments of the
population, and the reluctance
of experienced civil officials
to resume their former posts.
The dissidents have been par-
ticularly active in ambushing
government troops, uestroying
bridges and vehicles, and
in making hit-and-run night
attacks on government-held
towns.
Most recently, the Sumatran
dissidents have embarked on a
systematic campaign to destroy
the economic assets of Sumatra,
which are of critical importance
to the economic viability of
Indonesia. Installations on
seven rubber estates in the
east coast region of North Su-
matra have already been razed.
SECRET
ance--his second visit to East
Germany within a year--would
be construed as support for
Ulbricht and his hard-line pol-
icies and would virtually guar-
antee that the continuing con-
troversy over the Schirdewan-
Wollweber affair would not erupt
in an embarrassing display of
factionalism.
While there is undoubted-
ly substantial opposition to Ul-
bricht on both personal and
political grounds, the odds
would appear to favor his rid-
ing out the present wave of op-
position. However, Ulbricht's
control of the SED and his sup-
port by the USSR are mutually
interdependent: the USSR would
have no use for a leader who
could not control his own party,
and, without the knowledge of
Soviet support for Ulbricht, the
SED would quickly throw him over-
board.
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3 July 1958
In addition to the rubber estates
in North Sumatra, some of which
are American-owned, Caltex and
Stanvac oil installations in
Central Sumatra and: possibly
those in South Sumatra may be-
come targets for guerrilla at-
tacks or sabotage.
With the collapse of organized
resistance, the dissidents have
probably concluded that econom-'
is warfare is the most effec-
tive means still open for forc-
ing Djakarta to accept the
revolutionary government's de-
mands. The dissidents still
hope for a new government in
Djakarta which will be anti-
Communist in orientation and
which will also satisfy their
desire for a greater economic
return from the provinces' na-
tural wealth.
The dissidents are capable
of causing considerable damage,
particularly in North Sumatra.
While government forces there
outnumber the dissidents possi-
bly by as much as four to one,
these troops are widely dis-
persed and preoccupied with the
restoration of normal conditions
in the larger towns. With their
present strength, they cannot
prevent widely scattered guer-
rilla attacks on rubber and to-
bacco estates in addition to
maintaining the security of
their own positions and lines
of communication. In the face
of mounting dissident activity,
reinforcements from Java may
be required to permit central
government forces to maintain
even the present inadequate
level of security in North Su-
matra. Army Chief of Staff
Nasution, affirming his concern
over the problem, has indicated
that armed guards will be placed
on the major estates, protection
of which is a seemingly impos-
sible task for present troops
in North Sumatra.
Major Nainggolan, the dis-
sident operational commander in
North Sumatra who is based in
the Lake Toba region, is re-
ported to have 1,000 men under
arms and allegedly would have
no difficulty in substantially
augmenting that force if it were
not for a shortage of weapons.
One tribal group in North Su-
matra--the Bataks, many of whom
are Christian--is said to be
completely united against the
Javanese, and dissident sources
claim over 10,000 youths have 25X1
volunteered for service.
In Central Sumatra, dissi-
dents seem finally to be recover-
ing from the defeat suffered at
the hands of the sizable central
government force which landed
in the Padang area in late April.
Dissident forces have been re-
organized, and the rebels have
launched night attacks against
towns in the Bukittinggi area.
Several districts north of Bukit-
tinggi and east and southeast of
Padang are reported clear of
central government troops and
under dissident control, and
at least one government counter-
attack is said to have been re-
pulsed.
The Central Sumatran rebels
have as yet made no attempt to
sabotage Caltex and Stanvac oil
installations, possibly because
of a lack of trained demolition
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
personnel. Acts of terrorism
in Central and perhaps South
Sumatra, however, might bring
about a disruption of produc-
tion, thus achieving the same
goal.
With the collapse of formal
resistance in North Celebes,
dissident forces there under
the command' of Lt. Col. Sumual
will probably also revert to
guerrilla warfare. While Celebes
is of less economic importance
than Sumatra, its copra exports
are in normal times an impor-
taut source of government reve-
nue and foreign exchange. More-
over, the continued commitment
of a sizable number of troops
from Java needed to cope with
guerrilla warfare in North Cele-
bes will put a further strain
on the Djakarta government.
Dissident guerrilla warfare
will undoubtedly hurt Djakarta,
both because of the military
drain and the loss of revenue
from'destroyed installations.
It is open to question, however,
whether it will have the effect
apparently intended by the dis-
sidents of making the central
government more amenable to
compromise. On the contrary,
PRINCIPAL ECONOMIC ASSETS OF SUMATRA
TS'Pakanbaru
Bnkittingg\. 't E N T R Al k'"
^ PolmOil
0 Tobacco
do* Oil Field
Q Rubber
0 Tin
- Pipeline *-+ Railroad
'_ '4 SUMATRA Rengat
Paden ? _ ,- '- ,i,
SECRET
5' t~ ( T H C if I AT A S F' A
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
the gulf between the two sides
may actually widen, and there
is the additional danger that
Djakarta might turn increasing-
ly to the Sino-Soviet bloc for
economic aid to compensate for
any loss of revenue.
The dissidents' guerrilla
warfare tactics will also pro-
vide the Indonesian Communist
party and its affiliated front
groups with yet another op-
portunity to appear on the "side
of the angels" by voicing in-
dignation over what must seem
to the average Indonesian
loyalist to be the wanton
destruction of the nation's
vital economic assets.
OVERSEAS CHINESE EDUCATION IN TAIWAN AND COMMUNIST CHINA
Mainland Chinese political
movements since the turn of the
century have traditionally
sought the personal and material
support of Overseas Chinese
communities in Southeast Asia
and elsewhere. With the emer-
gence of two Chinese regimes,
Peiping and Taipei are competing
for Overseas Chinese loyalties.
The primary targets in Southeast
Asia for both Communist and
Nationalist China are the polit-
ically active student-age Chi-
nese, who have provided the pop-
ular leadership for all Chinese
movements since World War I.
Nationalist and Communist
governments alike have particu-
larly receptive audiences in
Southeast Asia because of the
strong cultural and emotional
ties the Chinese communities
have maintained with the home-
land. When possible, Overseas
Chinese students in Southeast
Asia have sought Chinese school-
ing from the primary grades
through the university level.
Primary and middle-school train-
ing has usually been provided
through local community schools
supported by Chinese business
groups.
Opportunities for higher
education, however, have been
lacking in the Overseas com-
munities, and mainland Chinese
universities have long been
the goals of Overseas Chinese
seeking higher education. The
fall of mainland China to the
Communists did not halt this
movement but tended to encourage
it--particularly as Communist
China appeared to be gaining a
position as a major power and
to be exercising growing in-
fluence over Southeast Asia.
Accurate statistics on
Overseas Chinese going to the
mainland are not available. Be-
tween 1951 and 1956, the number
of Overseas Chinese students
in mainland universities is es-
timated to have been 4,000-5,000
per year. Recently there has
been a marked decline in the
numbers from Malaya, Singapore,
and Indonesia, the main sources
of students going to the main-
land. This decline has, how-
ever, been partially offset by
increased numbers from Burma,
Laos, and Cambodia.
there will be a net decline in
the number of students from
Southeast Asia in coming years.
The chief reason is the restric-
tions which Peiping is placing
on all higher education, be-
cause of overtaxed facilities.
Also, there is a declining in-
terest on the part of Peiping
in catering to Overseas Chinese
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
CHINA
30,000 LAOS
250,000 CAMBODIA
261,000 BRITISH BORNEO
(Br,znr,, N Hnrnvo
,rzd .Barn wnkl
300,000 THE PHILIPPINES
300,000 BURMA
830,000 SOUTH VIETNAM
893,000 SINGAPORE
2,216,000 MALAYA
2,500,000 INDONESIA
3,000,000 THAILAND
MALAYA
S MATRA
I I I I I I
0 Number of ethnic Chinese in each country 3,000,000
students. Formerly, special
privileges were extended to
these students, but now they
are increasingly being charged
fees for their schooling. In
addition, the Overseas students
are reported dissatisfied with
the food, lodging, and educa-
tional opportunities provided.
Many have been found to be in-
adequately prepared for higher
education and have been shifted
off to technical schools and
lower grade vocational train-
ing, while others appear to
have become disillusioned with
the political content of their
training.
In the past, Taiwan had
little appeal as an educational
PACIFIC OCEAN
AUST'RALIA
center. Its facilities were
little known and its government
appeared unstable. Few Chinese
had been educated there during
the 50 years of Japanese occupa-
tion. Today the situation on
Taiwan presents an encouraging
contrast to that on the main-
land. Overseas Chinese suspi-
cions regarding the stability
of Taiwan and the worth of its
educational facilities are be-
ing overcome, while National-
ist doubts about the loyalty
of Chinese living elsewhere
are gradually being eliminated.
There has been a steady
improvement in the quality of
colleges and universities on
Taiwan and an increase recently
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
in the number of Overseas Chi-
nese going there for education.
In 1951 there were 60 Overseas
Chinese enrolled in schools on
Taiwan. By early 1957, 2,014
new overseas students were
registered, and in the fall
there was reportedly a total of
6,363 such students studying
there.
As of March 1958, Taiwan
had six universities--five sup-
ported by the national and pro-
vincial governments and one by
American missionaries--and five
independent colleges, three of
which are privately financed.
In addition there are six gov-
ernment-sponsored technical in-
stitutes and at least 168 mid-
dle schools. All of these are
open to Overseas Chinese stu-
dents. At present, 53 percent
of American educational aid to
Taiwan is spent on projects as-
sisting Overseas Chinese to ob-
tain an education on Taiwan.
This trend to Taiwan has
been encouraged by the develop-
ment of Chinese Nationalist
government and private scholar-
ships, fellowships, and other
aid programs for the Overseas
Chinese and by a general, if
vague, expectation that Taiwan
will remain, for the foreseable
future, free from mainland dom-
ination.
On the basis of present
trends, it can be expected that
proportionately fewer students
will be going to the mainland
and more to Taiwan in the fu-
ture. On the other hand, should
opportunities increase in
Southeast Asia either in na-
tional universities or in
Chinese colleges, the flow of
students to Communist China
and Taiwan may well be re-
duced. Continual pressures
by national governments for as-
similation, as in Thailand,
Malaya. South Vietnam, and Burma,
will also tend to restrict
the movement of students to
either the mainland iwan.
25X1
To the majority of Argen-
tine workers, Peronism is a sym-
bol of the new economic and po-
litical status Peron gave them
and, in this sense, Peronism
remains strong. President
Frondizi achieved office by suc-
cessfully exploiting this view
of Peronism among the electorate.
The military, who would vigorous-
ly oppose any revival of influ-
ence of Peron's followers,
strongly resent Frondizi's prior-
ity attention to amnesty for.
the Peronistas and his slow ac-
tion on economic problems. The
Peronista rank and file as well
as the leadership is split over
whether Peron is now the best
agent for their interests.
Frondizi realizes that
Peronista-instigated strikes
could threaten both political
stability and his economic pro-
gram, which emphasizes the need
for increased production. He
faces the difficult task of win-
ning Peronista support without
critically antagonizing either
the military or Peron, who is
supporting Frondizi at least
temporarily on condition that
labor's rights be protected.
Within this framework and with
his promise of democratic gov-
ernment, including free politi-
cal and labor activity, Frondizi
has less room for maneuvering
than did Peron.
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CURRENT INTELLIGENCE WEEKLY BLRY
3 July 1958
Peronism and Labor
Under Peron, Labor became
the most powerful single polit-
ical force, and, since Peron's
flight into exile in 1955, it
has demonstrated its determina-
tion not to return to its pre-
Peron status. Peron's improv-
ment of the near-feudal condi-
tions for many sectors of Ar-
gentine labor and his build-up
of the formerly weak General
Confederation of Labor (CGT)
from some 250,000 members into
a powerful organization claim-
ing 6,000,000 members were the
main reasons labor backed Peron
for the presidency in 1946 and
1951. To the majority of work-
ers, the fact that Peron used
dictatorial methods in granting
them this new economic and po-
litical status was less impor-
tant than the gains achieved.
Having acquired a power
status and a dominating influ-
ence in the Peronista party,
labor exerted pressure on Peron
which was often successful but
on occasion was crushed by force.
Many leaders became casualties,
but labor had realized its
strength and gained valuable
experience, especially at local
levels, where there was relative-
ly free organization. When Peron
in 1954 crushed the Communist-
led strikes which had capital-
ized on the issue of deteriorat-
ing real wages, he lost consid-
erable labor support. His crea-
tion of a General Confederation
of Employers was also resented
by labor as a threat to their
special interests.
Frondizi's Approach
Frondizi's inaugural ad-
dress on 1 May highlighted his
campaign promises to promote a
full amnesty, national concilia-
tion, and "the rule of law," and
emphasized as well the serious-
ness of the economic situation,
which he termed a "national
crisis." Once in office he gave
priority attention to an amnesty
bill, approved by Congress and
signed by him on 22 May.
The amnesty law forgave
political, military, labor, and
common crimes committed with a
political intent and revoked
restrictions on political and
labor activity by Peronistas.
The bill did not revoke the
provisional Aramburu govern-
ment's decree outlawing the
Peronista party and banning prop-
aganda under the Peronista label,
but this is now under congres-
sional consideration.
Frondizi in May made an
equally conciliatory gesture
toward Peronista labor by can-
celing Aramburu's decree turning
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3 July 1958
over control of the CGT to an
executive board of labor lead-
ers, mostly anti-Peronistas.
Mainly because of large-scale
Peronista abstention from union
elections during the Aramburu
regime, anti-Peronista elements
had won control of 32 unions
controlling some 1,500,000 mem-
bers, while the Peronista-Com-
munist bloc won elections in
62 unions,which controlled only
800,000 members. Anti-Peronista
labor leaders fear Frondizi's
intervention may now forecast
his support of Peronista ele-
ments when the CGT elections are
held in the near future.
Frondizi has also granted
executive pardon to a number of
formerly important Peronista
officials whose cases were not
covered by the amnesty law.
This action, which absolved
Peron's last federal police
chief of torture charges, par-
ticularly offended conservative
military elements, who felt
the spirit of forgiveness was
going too far. The executive
pardon also renewed speculation
as to whether Frondizi would
pardon Peron of treason charges,
despite the obvious threat to
stability in such a move and
despite Frondizi's declaration
that the courts would decide
Peron's case.
Peron
Although Peron denounced
the amnesty law as a "trap," he
in fact acknowledged its legal
basis by submitting through his
lawyer a petition for benefits
under the law. The judge's de-
cision, which was that some of
the charges against Peron were
covered by the amnesty law but that
of treason was not, may serve
to establish Peron's guilt in
the eyes of some former Peron-
istas and thus aid Frondizi in
reducing Peron's prestige through
legal processes.
Despite this, Peron on 9
June reiterated his pre-elector-
al support of Frondizi at a
Peronista celebration commemorat-
ing the abortive Peronista re-
volt of June 1956. In a message
recorded in exile in the Domin-'
ican Republic, Peron instructed
his followers to "support the
work of national recuperation
and to collaborate in this di-
rection with the work of Arturo
Frondizi." Peron also warned
that "if the Frondizi govern-
ment abandons the national line
and the defense of the people,
then we will move into the op-
position."
Peron's message tends to
support reports of a Frondizi-
Peron agreement to the effect
that the government will permit
Peronistas to engage freely in
political activity, provided
Peron remains abroad and ends
Peronista obstructionism and
hostility toward the government.
Peronista Groupings
There are three principal
groups asserting Peronista lead-
ership: the so-called Peron-
ista Tactical Command which fol-
lows Peron's orders, a group of
neo-Peronista leaders who disavow
Peron, and the Peronista lead-
ership in labor. These factions
are more akin to pressure groups
than to large well-organized
political parties, and there is
an area of'overlap in their
activities and influence.
The failure of Peronista
leaders to reorganize effective-
ly has been attributable not
only to the provisional govern-
ment's repression of party ac-
tivity but even more importantly
to disagreement and conflicting
ambition among the Peronistas
themselves. The dearth of ef-
fective Peronista leadership
stems in part from Peron's former
practice of preventing the de-
velopment of outstanding lead-
ers who might have become his
competitors.
The lack of Peronista unity
was sharply reflected in both
the constitutent assembly
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
elections in July 1957 and again
in the general elections last
February. In both cases Peron-
ista leadership was split on
participation. In the July
elections, the blank vote, which
was considered to be mainly
Peronista and in response to
Peron's orders, amounted to
scarcely one fourth of the to-
tal, in contrast to the 1954
Peronista polling strength of
about two thirds of the total
vote. These weaknesses, in
combination with Peron's loss
of strong military support,
help explain way Peron has given
Frondizi his conditional en-
dorsement.
There have been intermit-
tent reports that Peron might
return to Paraguay--his first
place of exile--although Presi-
dent Stroessner, reputedly a
friend of Peron, believes Peron
would first ask permission,
which would be refused. Stroess-
ner has also expressed the
opinion that Peron would soon
return to power in Argentina
and might retaliate for any un-
friendliness from Paraguay.
Anti-Peronista Reaction
The military are determined
to prevent Peron's return or
a revival of Peronista influ-
ence. There are some signs of
their discontent over Frondizi's
appointment of Peronistas to
important but subcabinet-level
positions, although only two of
Frondizi's eight cabinet mem-
bers represent the left wing
of his party and his congession-
al majority is dominated by the
moderate wing. The strongest
dissatisfaction, however, occurs
in those anti-Peronista quarters
--civilian as well as military--
which were previously antagonized
by Frondizi's demagogic campaign-
ing for the Peronista vote,
which contributed heavily to his
landslide in the electoral col-
lege.
The appointment of other
nonparty members as well as
Peronistas has caused dissen,-
Sion within the UCRI, which has
been debating opening the party
registers to Peronistas prior
to party elections. Those who
opposed the proposition on
grounds that regular UCRI lead-
ership would be reduced, lost
out on 12 June, when the party
formally announced its new pol-
icy of "national integration."
The growing concern over a
possible revival of Peronista
influence was acknowledged in
late June by two top officials.
In a nationwide radio address
on 23 June, the interior minister
implicitly sought to reassure
anti-Peronista elements and
warn Peronistas that the govern-
ment's recent political meas-
ures were not intended to help
the Peronistas regain power.
One passage referred to ele-
ments who delude themselves in
believing they have vested rights
and in expecting a "resurgence
to power." According to Vice
President Gomez, this was a
clear warning to the Peronistas.
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CURRENT INTELLIGENCE WEEKLY, SUMMARY
3 July 1958
ANNEX
SINO-SOVIET BLOC ACTIVITIES IN JAPAN
1. General Bloc Policy:
Sino-Soviet bloc activities di-
rected at Japan during the last
six months--the period of this
report--were characterized by
intensive efforts--including
crude political and economic
pressures and harsh propaganda
attacks--to influence the Kishi
government to modify its anti-
Communist policies in favor of
closer relations with the USSR
and Communist China. Bloc lead-
ers are striving especially to
bring about a deterioration in
Japan's relations with the
United States in the hope of
causing a retraction of Ameri-
can influence throughout the
Far East and of leading even-
tually to the withdrawal of
American military forces from
Japanese and Okinawan bases.
2. Bloc propaganda and
local Communist and front
groups continue to. agitate
against the presence of Ameri-
can forces, ,and to exploit wide-
spread Japanese pacifist senti-
ments and concern over such
themes as nuclear testing and
bases and rearmament. Peiping
is making a major bid through
the lure of increased trade,
to use the Japanese business
community to bring pressure on
Kishi for political ties. Prior
to the general elections in May,
both Moscow and Peiping tried
to aid the Socialist opposition
--which favors closer ties with
the bloc--by launching propa-
ganda attacks on the Kishi gov-
ernment and by their activities
in the negotiations for com-
mercial and fishery agreements.
3. Diplomatic Represen-
tation: Japan has diplomatic
relations with the USSR, Poland,
and Czechoslovakia. Their mis-
sions in Tokyo are staffed by
approximately 85 bloc nationals,
of whom about 60 are attached
to the Soviet mission. The
Soviet mission is highly quali-
fied: a large percentage of
the personnel consists of Japa-
nese experts and linguists, many
of whom served previously in
Japan, and the new ambassador,
N. T. Federenko, a deputy for,
eign minister since 1955, is
one of the Kremlin's top experts
on China and the Far East. The
Soviet Union is also scheduled
to establish a commercial mis-
sion with-a 25-man staff, at
which time the diplomatic mis-
sion will be reduced by five
persons.
4. During the period of
this report, Communist China
made intensive efforts to force
Tokyo to take the first steps
toward recognition of the Pei-
ping regime. In March it ap-
peared that with the conclusion
of the fourth annual trade agree-
ment, which called for the ex-
change of trade missions and
guarantees by the Japanese Gov-
ernment regarding the opera-
tion of the agreement, Commu-
nist China was progressing to-
ward its goal of eventual rec-
ognition. Tokyo refused, how-
ever, to recognize the "right"
of the Chinese Communists to
fly their flag over the proposed
trade mission, and on 1 April
Peiping bitterly accused Kishi
of blocking enforcement of the
trade agreement. Subsequently,
Communist China called a halt
to Sino-Japanese trade and
cultural exchanges, deadlocking
its campaign for closer rela-
tions. Rumania, Hungary, and
Bulgaria have also continued to
seek diplomatic ties with Japan.
The Japanese Foreign Ministry
had deferred consideration of
exchanging representatives with
these countries for over a year,
but as of early June prepara-
tions for establishment of re-
lations were apparently under
way.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
5. Economic Relations:
Japan's trade with e no-
Soviet bloc in 1957 totaled
$186,000,000, a threefold growth
since 1950; over the same peri-
od, however, the bloc's share
of Japanese commerce declined
from 3.5 percent to 2.6 per-
cent. Although Japanese trade
with Communist China fell by
20 percent last year, it still
accounted for three fourths of
Japan's total trade with the
bloc. Japan's other main bloc
trading partners were the USSR,
North Vietnam, and East Germany.
Japanese sales to bloc coun-
tries included iron and steel
products, machinery, chemicals
and fertilizers, rayon yarn,
rubber belting, and other fin-
ished products, while imports
consisted largely of soybeans
and other oilseeds, fuels,
foodstuffs, lumber, and in-
dustrial raw materials. Ja-
pan's trade with almost all
bloc countries is characterized
by large import surpluses,
most of which are settled
by Japanese payments of
sterling.
6. Japanese commercial
relations with the USSR are
covered by governmental agree-
ments. The current trade agree-
ment, concluded in December
1957, provides for a $28,000,-
000 level of trade each way,
but the rate of trade thus far
in 1958 is far below this level.
In 1956, as part of the Soviet-
campaign to normalize relations
with Japan, the Japanese Gov-
ernment agreed to a 10-year
convention to regulate fish-
ing on an annual basis in
a prescribed area of the
northwest Pacific. Moscow
has since used the annual
negotiations of the conven-
tion as a political lever to
weaken Tokyo's position on
other issues and to pre-empt
additional areas for the ex-
pansion of Soviet fishing, in-
cluding the Sea of Okhotsk,
which will be completely closed
to Japanese salmon fishing
after this year.
7. A shipping agreement
concluded in June 1958 author-
izes both Soviet and Japanese
ships to serve the Japan-Nakhodka
(near Vladivostok) and Japan -
Black Sea routes. Initial sail-
ings are expected before the
end of June, but the USSR does
not have ships available for
the latter route. The USSR also
is pressing Japan for a commer-
cial air agreement which would
authorize flights between Tokyo
and Khabarovsk in Siberia. The
Japanese are opposed to an air
agreement which does not give
them overflight rights to Moscow,
and they plan to reject a Soviet
inducement to allow Japan Air
Lines to purchase TU-104 jet
transports at $1,100,000 each.
8. Japanese business in-
terests have concluded four
private trade agreements with
Communist China since 1952, but
the agreement negotiated in
March 1958 precipitated the
major dispute which led Peiping
to suspend virtually all Sino-
Japanese trade. Communist China
and private Japanese fishing in-
terests also have had agree-
ments covering Japanese fish-
ing in portions of the East
China Sea; the most recent
agreement expired on 12 June,
at which time Communist China
announced it would not renew
the pact because of the "hos-
tile" attitude of the Kishi gov-
ernment. In April the Japa-
nese Government signed a trade
and payments agreement with
Poland. Private Japanese
firms also concluded trade agree-
ments with Bulgaria and Rumania
in 1957 and with North Vietnam
in March 1958.
9. Cultural and Propaganda
Activities: ]Exchanges o dele-
gations between Japan and bloc
countries increased from approxi-
mately 155 in 1956 to about 200
in 1957. Japanese groups visit-
ing bloc countries in 1957 out-
numbered bloc delegations travel-
ing to Japan by over three to
one. Half of the Japanese dele-
gations visited Communist China,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
while Soviet groups accounted
for about one half of the bloc
delegations visiting Japan.
Significant visits to Japan
thus far in 1958 include an
extended tour throughout Japan
by the Bolshoi Ballet and a
two-week appearance in April
by the Leningrad Symphony Or-
chestra at the Osaka Interna-
tional Trade Fair. The orches-
tra was transported on two So-
viet jet airliners, the first
commercial jet transport air-
craft to appear in Japn. On
18 April-Japan and the Soviet
Union concluded an agreement
to facilitate tourist travel
between the two countries, and
on 11 June Moscow formally pro-
posed an agreement regulating
cultural exchange activities.
10. Bloc radiobroadcasts
beamed at Japan total approxi-
mately 47 hours per week, a
slight rise since late 1956.
Programs originating in the
USSR account for about one half
the total, with Communist China
and North Korea supplying the
remainder. In 1957 six Soviet
feature films were shown in
Japanese theaters, as compared
with two or three each year
from 1949 to 1956. The USSR has
also entered the documentary,
educational, and cultural short-
film field with considerable
success and has succeeded in
some cases in placing shorts
on the same bill with popular
American full-length features.
11. Bilateral friendship
societies are a major instru-
ment in stimulating closer po-
litical and economic relations
with the bloc and cultural ex-
change travel. With the forma-
tion in 1957 of a society urg-
ing closer ties with North Viet-
nam, at least one such group
exists for almost all bloc coun-
tries; there are 11 such so-
cieties, with an estimated 400
branches, for friendship with
Communist China, and 12 socie-
ties, with an estimated 175
branches, for friendship with
the USSR.
12. Subversive Activities:
The Japan Communist party-(TM)
has undergone a sporadic decline
in membership since its post-
war high of 100,000 and now has
an estimated 45,000 members, ac-
cording to Japanese authorities.
In the May 1958 general election,
the JCP polled 989,000 votes--
2.5 percent of the total--losing
one of the two Diet Lower House
seats it had won in 1955. The
party increased its percentage
of the total vote by one half
percent, largely because its
candidates remained in the race
in almost every district, instead
of withdrawing in favor of the
Socialists as many did in 1955.
13. Since late 1957 the JCP
has intensified its open efforts
to effect a united front with
the Japan Socialist party, which
advocates essentially a policy
identical to that of the current
"peaceful" Communist line. The
JCP's position as an important
political force rests mainly on
its ability to exploit popular
grievances and labor unrest, its
influence over left-wing So-
cialists, students, and intel-
lectuals, and its manipulation
of a large number of front or-
ganizations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
3 July 1958
17. Japanese Reactions to
Bloc Activ y: Japanese fee ng
toward a ASR and Communist
China is conditioned by tradi-
tional attitudes: the Japanese
fear and distrust the USSR and
generally believe that as Orient-
als they know how to deal with
the Chinese better than do West-
erners. There is widespread
and fairly intense pressure in
Japan for closer relations with
Communist China, although the
Kishi government has relegated
diplomatic ties to the indefi-
nite future. Peiping's direct
pressure on the Kishi govern-
ment in May boomeranged and
probably cost the Socialists
some seats in the Diet elec-
tions; it failed, too, at least
temporarily, to secure official
trade ties.
18. The consistently
"tough" Soviet policy toward
Japan--rejection of Japanese
demands for return of the con-
troversial southern Kuril Is-
lands, increasing restrictions
on fishing in the northwest
Pacific, and continued Soviet
accusations that Japan is sub-
servient to the United States--
has generally antagonized the
Japanese. Tokyo's willingness
to restore relations in 1956
with the USSR stemmed from the
necessity
of ga
ining a fishing
agreement
and f
rom a strong
desire for
dipl
omatic relations
with all major
powers, politi-
cal ideology
notwithstand-
ing.
19. The Outlook: The Sino-
Soviet bloc's oug " policy
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CURRENT INTELLIGENCE WEEKLY BUYNII*T
3 July 1958
toward Japan has been largely
counterproductive in moving to-
ward long-term objectives, and
a continuation of this, approach
would probably serve. further
to irritate Tokyo. Moscow and
Peiping will continue,nonethe-
less, to manipulate such sensi-
tive political and economic is-
sues as trade and regulation of
fishing. The appointment of
such a high-level official as
Federenko as Soviet ambassador
probably reflects concern in
Moscow over its recent loss of
prestige-in Japan by its heavy-
handed tactics in opposing Kishi
in the recent election. The
Soviet Union is likely there-
fore to concentrate on cultural
and scientific matters in the
near future, while both bloc
and local Communist propaganda
will continue efforts to portray
the USSR as the champion of in-
ternational.peace and O nuclear
disarmament.
20. The Kishi.government,
now endorsed by the electorate
in its policy of cooperation with
the free world, will probably be
somewhat less subject to neu-
tralist pressures from within Ja-
pan. Although postwar political
and economic changes make a
phenomenal growth in Japan's
trade with the Chinese mainland,
as envisaged by many Japanese,
almost impossible, the lure.of
increased trade--particularly
if Japan's free world markets
do not continue to expand--
will probably force Tokyo in
the long run to move to-
ward closer relations with
Communist China.
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