CURRENT INTELLIGENCE WEEKLY SUMMARY

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 7
OCI NO. 0292/6
10 August 196
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DOCUMENT NO,
NO CHANGE IN CLASS. ^
^ DEPRASSIFIED
CLASS. CH,, NGeD TO: TS S
NCI;T Gv~i;y~'J DATE:
AUTII: Hl 10.2
DATE: t1 jllw .
Lqa~25X1
S14 a *.4
g r "' ENTIAL25X1
State Dept. review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
10 August 1961
T H E W E E K I N B R I E F
EAST-WEST RELATIONS. .. . . . . . . . . . . ... . . . . . . Page 1
Khrushchev's speech of 7 August on Germany and Berlin
climaxed a series of Soviet pronouncements last week which
illustrate the Kremlin's effort to maintain a careful bal-
ance between appeals for negotiations on the one hand,
and threats and moves to strengthen Moscow's position on
the other. Khrushchev has urged the West to begin negotia-
tions and to take the initiative with a specific proposal.
At the same time, he has sought to sharpen the impression
that, in the absence of a negotiated settlement, Western
countermeasures cannot deter the USSR from concluding a
separate peace treaty and transferring Berlin access con-
trols to East Germany this year. The immediate Soviet
aim of this combined tactic is to generate pressure for
early negotiations and to shift the blame to the West
for heightening tensions over Berlin.
BERLIN . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4
The flow of East German refugees to West Berlin has
continued to register a steady over-all increase. Thus
far, attempts to reduce the flow have relied for the most
part on an intensification of existing police measures.
Steps are being taken to strengthen the Security Alert
Police in and around Berlin, and there is an urgent re-
cruiting drive under way to bring the border police up to
full strength by 1 September. At the same time, the regime
is continuing efforts to reduce imports from West Germany--
chiefly by finding alternative sources in the West--in
a move to offset a possible West German treaty. The deteri-
oration of the domestic food supply appears to have been
checked temporarily.
BIZERTE . . . . . . . . . . . . . . . . . . . . . . . . . Page 6
The special General Assembly session on Bizerte
sought by the Afro-Asian bloc is to begin on 21
August. Meanwhile, Tunis and Paris are each waiting
for the other to take the initiative to open discussions
in Bizerte. The Tunisians are strengthening their po-
sitions in the area, and have complained of an increasing
number of French over-flights. The Tunisian press is
contrasting the "failure" of Bourguiba's special envoy
to Washington with the "success" of a mission to Moscow
which reports it has been assured of Soviet support if
new fighting should break out.
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FRANCE-ALGERIA .
00. . . . . . . Page 7
PAG leaders have reiterated their readiness to resume
negotiations provided the French offer some new formula-
tion on the Sahara. They presumably are also waiting to
see whether the National Council of the Algerian `,evolu-
tion, scheduled to meet soon, endorses the PAG position.
De Gaulle has probably not abandoned hope for successful
negotiations, but has his government working on possible
unilateral solutions of the Algerian probl".
The near-unanimous acceptance of Premier Adoula by
a previously divided parliament appears to have convinced
both Gizenga and Tshombd that they must reach some accom-
modation with the new central government. Although Gi-
zenga continues to receive support from the UAR~
his followers appear willing
stated that his government will follow a policy of "non-
alignment" in international affairs and accept aid from
any quarter. The Elisabethville government appears
shaken by events in Leopoldville and by Adoula's warnings
to participate in the Adoula government. Adoula has
that Katanga must reunite with the Congo.
LAOS . . .
. Page 10
Page 11
The talks between Souvanna Phouma and Prince Boun Oum
resulted in only slight progress toward formation of a
coalition government. Souvanna has returned to Xieng
Khouang Province to confer with Souphannouvong as well
as to bolster the morale of his neutralist supporters.
There have been small-scale military actions in several
areas in the past week, and there are indications that
fighting between the Meos and Kong Le - Pathet Lao forces
in Xieng Khouang Province will be intensified.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
10 August 1961
The recent currency changeover is to a degree a
forced loan from the public and will considerably enhance
the regime's financial position in the short run. During
the changeover the regime suspended nearly all Interna-
tional traffic in order to prevent the conversion of
Cuban currency held abroad, A Brazilian-Cuban trade
agreement, which would primarily serve political purposes
in view of the rather limited possibilities of trade be-
tween the two countries, reportedly is being considered.
President Balaguer's program for liberalizing the
Dominican Republic's political system has suffered a
severe setback from excessive police measures against
impromptu opposition demonstrations on 4 August. Oppo-
sition resentment is high, and there may be further out-
breaks. Moderate dissident leaders still maintain they
intend to follow a course of nonviolence, but they are
faced with increased pressure for revolutionary action.
The largest opposition group is seeking US intervention,
claiming that unless the US acts promptly it will en-
counter great bitterness and disillusionment.
Page 12
. Page 13
BRITISH GUIANA ELECTIONS . . . . . , . e . . . . . . . . . Page 14
The Communist inclinations of Cheddi Jagan and other
leaders of the ruling People's Progressive party (PPP)
have been the principal issue in the increasingly acri-
monious campaign for the British Guiana legislative elec-
tions on 21 August. Observers expect the elections to
be close, with Jagan slightly favored to win. In any
case, the'PPP's well-disciplined organization will prob-
ably win enough seats to prevent either of the two main
opposition parties from forming a stable government.
Page 15
The new Soviet Communist Party Statutes call for the
replacement of at least six members of the presidium at
the 22nd party congress in October but do not appear to
have altered the basic principles of party operations.
The statutes, which govern the organization and activities
of the party, have been completely rewritten to incorpo-
rate much of the language of the recently published party
program. The requirement for a specified minimum in the
turnover of the membership of party committees and bureaus
at each level in the hierarchy will create the impression
of safeguards against a return to one-man rule. It will
also give more Communists the prestige of party office.
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10 August 1961
PEIPING STEPS UP ANTI-AMERICAN PROPAGANDA . . , . . , . . Page 16
There has been a sharp upsurge of anti-American venom
in Peiping's public commentary following the recent an-
nouncement of new US military measures. In contrast
to the recent affable approaches by Chinese Communist
diplomats to US representatives in Europe, the Chinese
now charge that the Kennedy administration has exceeded
the "brinksmanship" of its predecessor and is trying to
gain its ends through "limited war." They call on the
bloc to concentrate on an unceasing "head-on struggle"
against the US--language which echoes the line Peiping
took during the Sino-Soviet dispute last year.
INDUSTRIAL PROBLEMS IN COMMUNIST CHINA . . . , . . , . . , Page 17
Recent reports of production declines, stoppages, and
related problems in China's industry reflect the cumulative
effects of economic difficulties brought on by the excesses
of the "leap forward," two successive years of poor crops,
widespread food shortages, the withdrawal of Soviet tech-
nicians, and generally inept planning and leadership. The
"leap forward" effort strained both men and machines, and
reports suggest that over the past six months malnutri-
tion and lowered caloric intake have affected not only
the morale of the workers but also their physical ability
to carry a full work load. Reduced working efficiency is
believed to be a contributing factor in current shortages
of coal and iron ore, which are in turn causing local
stoppages in heavy industry.
Page 19
First Deputy Premier Mikoyan's trip to Japan to open
a Soviet trade fair on 15 August--the first visit to that
country by a top Soviet leader--reflects Moscow's desire
to offset Japan's continuing strong suspicion and mis-
trust of the USSR. Mikoyan's visit will be the high
point of a prolonged Soviet effort to stimulate Japanese
interest in trade with the USSR. He undoubtedly will use
the occasion to offer even greater prospects for increases
in Soviet-Japanese trade, which more than doubled in 1960.
The visit is certain to focus Japanese attention on this
marked growth in trade and on the possibilities of fur-
ther expansion in the immediate future.
NORTH KOREA AND JAPAN RENEW REPATRIATION AGREEMENT
Page 21
North Korea and Japan have agreed to a one-year exten-
sion of the 1959 Calcutta Accord, under which nearly 70,000
Koreans in Japan have been repatriated to North Korea.
Pyongyang values the program as an irritant to Japanese -
South Korean relations and has consistently maneuvered
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
10 August 1961
to prolong it. Initial press commentary in Seoul has
been adverse
INDIAN DEFENSES ON NORTHEASTERN FRONTIER . , . . , . . . Page 22
The Indian Army is continuing its efforts to improve
its defensive position in the northeastern frontier area
opposite Tibet, despite differing views in New Delhi on
the immediacy of the Chinese Communist threat. Indian
leaders feel that in view of the continuing Sino-Indian
impasse they must be prepared for further Chinese en-
croachments in this area, where they feel most vulnerable.
BRITAIN AND THE COMMON MARKET . . , . . . . . , , . , . Page 23
Britain's application for membership in the Common
Market (EEC), f brmally submitted on 10 August, has been
widely hailed as a milestone in the European movement.
Negotiations on accession, however, are likely to be
difficult. The Common Market is already a going concern
in which national, bureaucratic, and commercial interests
are deeply entrenched, and its members are loath to make
major changes in the EEC treaty. Macmillan for his part
will be limited in his maneuverability by lack of a clear
popular and parliamentary mandate to enter the EEC
ITALY . . . . . . . . . . . . . . . . . . . . . . . . . Page 24
Premier Fanfani's trip to Moscow last week seems to
have been aimed primarily at further strengthening his
government's domestic position following the vote of con-
fidence the Chamber of Deputies gave him in mid-July.
He reportedly took a "very firm" line with Khrushchev
and now may be encouraged to push harder for Italian
participation in big-power meetings.
SPECIAL ARTICLES
THE USSR'S ROLE IN THE CONGO .
. . . . . . . . . Page 1
Soviet influence in the Congo reached its high-water
mark during the ascendancy of Patrice Lumumba, and then de-
clined on his overthrow and arrest last September. A year
ago, when Soviet leaders saw an excellent opportunity in
the Congo to advance their goals for the entire African
continent, Moscow's objective of unifying the country un-
der Lumumba coincided with the aim of many independent
African states. Soviet leaders, however, underestimating
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CURRENT INTELLIGENCE WEEKLY SUMMARY
10 August 1961
the extent of Afro-Asian support for the UN organization,
overplayed their hand, and bloc aims suffered a severe
setback as a result of Moscow's inability to exert de-
cisive influence on Congolese developments. Today, never-
theless, with political forces and structures still in
flux, the Congo remains a potentially fertile ground for
bloc activity.
COMPARISON OF SOVIET AND US INDUSTRIAL PRODUCTION . . . , Page 7
Moscow's economic statistics for the first half of
1961 indicate that in production of most basic commodities--
such as steel, oil, and electric power--the USSR continued
to narrow the US lead. Some consumer-oriented industries,
however, remained much at a standstill for a variety of
reasons, including an insufficient supply of agricultural
raw material and the changeover in light industry to the
seven-hour day. The Soviet goal is to match US produc-
tion of major industrial items by 1965 and to reach the
present level of total US production on a per capita basis
by 1970.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
WEEKLY REVIEW
EAST-WEST RELATIONS
Khrushchev's speech of 7
August climaxed a series of
Soviet and bloc pronouncements
last week on Germany and Berlin.
This speech--as well as the
Soviet notes of 3 August, Khru-
shchev's remarks during Italian
Premier Fanfani's visit, and the
Warsaw Pact meeting--illustrate
the Soviet leaders' attempts to
maintain a careful balance be=
tween appeals for negotiations
on the one hand, and threats
and moves to strengthen their
position on the other.
Khrushchev has urged the
Western powers to begin nego-
tiations and has made it clear
that specific proposals are up
to the West. At the same time,
he has sought to sharpen the
impression that, in the absence
of a negotiated settlement, the
USSR cannot be deterred from
concluding a peace treaty and
transferring access controls
this year. The over-all aim
of these statements is to shift
the blame to the West for
heightening tension by resort-
ing to a military build-up and
failing to respond to Soviet
overtures for negotiations.
Khrushchev's Speech
In his radio-television
address, Khrushchev adopted a
general line on Berlin which
suggests that he feels obliged
to emphasize in increasingly
stronger terms that the USSR
will not be deflected from its
declared intentions on Berlin
by any measures the Western
powers may take. Khrushchev
adamantly asserted that the
Soviet Union could not renounce
its policy on a peace treaty
or agree to a delay of several
years. Such a course, he con-
tended, would be taken by the
West as a "strategic" break-
through and a Soviet retreat
"under pressure,"
Khrushchev accused the Presi-
dent of using threats against the
USSR and presenting a "kind of
ultimatum." He also went to some
lengths to portray the current
situation as precarious, and
"frankly admitted" that it was
not possible to exclude the
threat of a military attack by
the West. He warned that a
war over Berlin could not be
limited to a conventional
conflict in Europe and that
the Soviet Union would be
prepared to retaliate against
American bases "throughout the
world."
Khrushchev used these al-
legations that the West was
pushing toward the brink of
war to justify possible Soviet
countermeasures. He stated
that a partial mobilization
of reserves might be necessary
to prepare Soviet forces for
any eventuality. He also
foresaw a possible transfer of
Soviet divisions inside the
USSR to the western frontier.
He stressed, however, that
these moves were only precau-
tionary steps and "reciprocal"
in character, since the US had
announced measures of a "mobili-
zation nature." Khrushchev was
also careful to play down the
necessity of a full-scale in-
dustrial mobilization. He
cited the "preliminary opinion"
of the party central committee
and the government that further
increases in the defense budget
would not be necessary. He
explained this on the grounds
that circumstances did not
warrant imposing additional
hardships on the Soviet people.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The general intent of
Khrushchev's presentation on
military steps appears designed
more to impress the West with
his determination than to alarm
the Soviet public. He invoked
the authority of the central
committee and the Soviet Govern-
ment to back up his repeated
assurances that the USSR was
seeking a negotiated solution.
He appealed to the Western
powers to display reason and
join the USSR at the conference
table, and he reassured his
Soviet audience that the USSR
had passed through similar
"acute situations" in the past
without war.
On the substance of the
Berlin and German issues, how-
ever, Khrushchev held to his
unyielding position. He reit-
erated that a separate peace
treaty would be signed with
East Germany and would invali-
date all existing agreements
on Berlin access. While he
again asserted that there would
be no blockade of Berlin or
infringement of the "legal in-
terests" of the Western powers,
he added that the West would
have to deal with the Ulbricht
regime after a separate treaty.
Finally, Khrushchev offered to
accept in the context of a peace
treaty settlement the "most
effective guarantees" for Ber-
lin.
Warsaw Pact Meeting
On the eve of Khrushchev's
speech, the Warsaw Pact coun-
tries published a communique
intended to demonstrate bloc
solidarity behind the USSR and
East Germany. The communique
stressed the bloc's "inflexible
determination" to conclude a
peace settlement this year and
sought to create the impression
that plans for a separate treaty
were being stepped up, but made
no reference to bloc-wide military
preparations.
A negotiated solution was
also highlighted as the pre-
ferred course. A clear dis-
tinction was drawn between the
situation in West Berlin if
the Western powers agreed to
a treaty and the city's situa-
tion if they refused. The pact
members asserted that "reliable
and effective guarantees" for
Berlin and access to it would
be included in a peace treaty
with the two German states. In
the case of a separate treaty,
however, communications with
the outside world would be
dependent on "agreements which
will be concluded with the GDR."
The timing of the Warsaw
Pact meeting to coincide with
Western consultations in Paris
was a further example of Moscow's
intention to duplicate Western
moves. This was also the general
approach adopted by the Soviet
notes of 3 August answering
the notes of the Western powers
and Bonn. Having characterized
the Western notes as essentially
confined to "old positions."
the Soviet leaders concentrated
on recapitulating their position
and refuting Western charges
in a relatively moderate but
lengthy polemic on the necessity
of a German peace treaty.
The note to the US warned
that the Soviet Union would not
be dissuaded from its policy by
the affirmation in the American
note'that a treaty with East
Germany "would have no validity
in international law." The note
claimed that by refusing to
negotiate a treaty, the US would
place itself in position of
having the West Berlin problem
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CURRENT INTELLIGENCE WEEKLY SUMMARY
decided without it, "with all
the consequences flowing from
this for the rights of the
Western powers based on the
capitulation of Germany."
The notes attempted to dem-
onstrate some flexibility on
negotiations. They stated that
the USSR is ready "once again"
to begin negotiations and
would proceed with a separate
peace treaty with reluctance.
The note to the US refers
to the abortive Paris summit
meeting and points out that
while the USSR took into con-
sideration the change in the US
Government, "the idea of dis-
cussing the problem of a peace-
ful settlement with Germany"
was never considered "buried,"
In an apparent reminder of the
Soviet offer shortly before
the Paris conference for a two-
year interim agreement on Berlin,
the Soviet note stated that
Khrushchev did not go to Paris
"empty-handed." This state-
ment was apparently intended to
reconfirm the offer of an in-
terim solution contained in the
aide-memoire given President
Kennedy in Vienna on 4 June.
All three notes to the
Western powers invite them to
make proposals. The free city
proposal is described as show-
ing the Soviet Union's readiness
to settle the status of West
Berlin after a peace treaty.
No deadlines for a peace treaty
are given, but the note to Bonn
states that "one way or another"
a peace treaty will be concluded
this year,
Fanfani's Visit to Moscow
Khrushchev's offer to open
negotiations and his expressed
determination to reach a settle-
ment by the end of the year
were also highlighted in his
talks with Fanfani. I
As in his 7 August speech,
Khrushchev dwelt at some length
on the military consequences
for Europe of a war over Berlin
and stressed Soviet military
superiority and the vulnerabil-
ity of Europe.
In the only notable public
statement during Fanfani's visit,
Khrushchev provided a brief summary of the
essence of his current policies. He
emphasized that the USSR would
continue to make "every effort"
to convince the West to reach
an agreed settlement on a peace
treaty "before the end of the
year"; but if there were no
agreement, Khrushchev added,
the bloc would be faced with
the necessity of signing a
separate treaty.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Under the impact of the
bloc's announced determination
to sign a separate treaty with
East Germany in the event nego-
tiations with the West fail,
escapes to West Berlin have
continued to increase. A total
of 13,349 refugees registered
at the Marienfelde reception
center between 1 and 9 August,
and the flow appears to have
been stimulated by Khrushchev's
threatening television speech
on 7 August.
The Ulbricht regime has
been relying to date on scare
propaganda and an intensifica-
tion of existing police controls
in an attempt to reduce the
flow. Regime leaders are faced
with the dilemma that the ac-
resorts to economic countermeas-
ures if and when a separate
treaty is signed. Some planned
long-term investment projects
requiring imports from West Ger-
many are to be delayed until
other sources of supply are
found. Projects well under way
and those of high priority pre-
sumably are excepted from
these plans. The regime is seek-
ing to replace imports from
West Germany with goods from
other West European and NATO
countries, particularly the UK,
France, and Switzerland, either
by importing directly or by
using other bloc nations as mid-
dlemen.
tions necessary to halt it wouldTOTAL ANNUAL REFUGEE FLOW INTO WEST BERLIN AND WEST GERMANY
intensify existing popular dis-
content in East G
400'000
ermany.
The regime is using open
coercion to pressure "border
crossers'?--East Germans and East 200,000
Berliners who work in West Ber-
lin--to give up their jobs. In 100'00?
the latest phase of this campaign,
East Berlin city officials are
forcing border crossers to reg-
ister with authorities and to
pay their rent and utility bills
in West marks at the legal rate
of one West mark to one East
mark. Failure to do so could
mean heavy penalties, including
three-year prison terms. West
Berlin officials have countered
this tactic by increasing the
proportion of West marks paid to
The regime is trying to in-
crease the capabilities of its
Security Alert Police (SAP) and
Border Guard (BAP) units.
000
000
000
000
EASTER
000
000
}
a major reorgan za ion, w
also involved the movement of
significant SAP forces into
East Berlin, was in progress,
with a 1 September deadline. A
recruiting campaign also is
in progress for the armed
forces.
WEST BERLIN REFUGEE TOTALS
COMPARISON OF 1960 AND 1961 BY WEEKS
A significant reduction of
East Germany's current dependence
I on imports from West Germany--
Concurrently, the regime especially of steel--would re-
is moving to improve its posi- quire East Germany and other
tion in the event West GermOny FI E ilp
entries to make costly
AU
10 Aug 61
WEEKLY REVIEW
Refugees entering West Berlin (most
of whom later go on to West Germany)
Refugees entering West Germany directly
across East-West German zonal border.
_ ~.-TOTAL ARRIVALS IN WEST BERLIN & WEST GERMANY
3 10 17 24 31 7 14 21 28 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 4 11 18 25 1 8 15 22 29
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST
1834
1678 1691
1510
1650
IZA4
1334
IYZ3
1255
1753
1306
-
1240
1361
1259
1350
1308
9Z3
1
701 _
111_.,.
096
9B4
ZS
864
$67
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CURRENT INTELLIGENCE WEEKLY SUMMARY
economic adjustments. The de-
cision to delay some of the less
important long-term investment
projects. requiring imports from
West Germany will affect only
a very minor portion of current
interzonal trade.
East Germany this year has
increased its efforts to shift
to other West European countries
as sources of needed imports.
Although West Germany continues
to provide by far the major por-
tion of East German imports from
West Europe, the relative im-
portance of trade with other NATO
countries has greatly increased.
will not yield on the question
of West Berlin's freedom.
The US Mission reports
that the Berliners are, however,
apprehensive that what they con-
sider to be vital elements of
Berlin's present status may be
"bargained away." They base
their fears on what they refer
to as the willingness of certain
"political and opinion-forming
groups" in the United States
to make "damaging compromises"
and on their belief that the
British eagerness to negotiate
reflects a readiness to make
unilateral concessions.
The deterioration of the
food supply situation in East
Germany appears to have been
checked during the last two weeks,
and there is little immediate
danger of a further deteriora-
tion. Supplies of bread, vegeta-
bles, and potato substitutes--
such as macaroni--appear to be
satisfactory, although
butter ratio
and sporadic shortages of meat
continue. The spring harvest
has helped, and government pres-
sure is still being applied to
maintain an orderly market sup-
ply of foods. Continued refer-
ences by the regime to a high
mortality rate among livestock,
coupled with feed shortages,
portend a decline in the domes-
tic production of meat, milk,
and butter during the remainder
of 1961. Although the regime
claims it will not increase food
imports above the 1961 level,
those already planned will tend
to offset the anticipated de-
cline in food supplies.
In West Berlin, although
the "stanchness" of the city's
leaders remains ostensibly un-
impaired, the US Mission believes
that their outward optimism ap-
pears to shield greater doubt
regarding the future of the
city than at any time since the
Soviet ultimatum of November
1958. The morale of political
and public leaders is subject
to "more fluctuations" than pre-
viously as new East-West nego-
tiations draw near. Berlin's
leaders still believe that the
USSR does-not want war and re-
main convinced that 25X1 West
co
Khrushchev's attacks on
West Germany have evoked bitter-
ness and resentment in Bonn gov-
ernment and political circles.
The deputy chairman of the So-
cial Democratic party expressed
deep gloom over the situation
in general and thought that
Soviet space achievements had
perhaps blinded Khrushchev to
realities of the world situation.
He stated that he thought Khru-
shchev's speech was well written,
ably delivered, and likely to
have "maximum effect everywhere."
American officials in Bonn sum
up current West German politi-
cal and public opinion as an un-
conscious blending of fear of
nuclear war, fear of a Western
surrender to the Soviet demands,
and an almost "pathetic" reliance
upon the Western powers and es-
pecially the United States to
find a solution avoiding both war
and significant concessions.
On 4 August, Defense Minis-
ter Strauss stated that plans
were being made to complete the
build-up of West Germany's eight
divisions assigned to NATO,
which are now at 70 to 80 percent
of authorized strength. Strauss
also announced new commitments
totaling $550,000,000 for the
purchase of military equipment
in the United States and Great
Britain. Economics Minister Er-
hard and Finance Minister Etzel
told a Christian Democratic cam-
paign rally on 4 August that the 25X1
German people must be willing
to make sacrifices for the de-
fense of liberty.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The special General Asse -
bly session on Bizerte sought
by the Afro-Asian bloc has been
set to begin on 21 August.
Bourgulba late last week author-
ized his representatives in
New York to hold back on an
emergency session in the hope
that the Western foreign minis-
ters' meeting in Paris might
persuade De Gaulle to make some
conciliatory gesture to break
the diplomatic deadlock on Bi-
zerte.
Tunis and Paris, meanwhile,
are each wa.iting for the other
to. take the initiative to open
discussions in Bizerte. Tuni-
sian Defense Secretary Ladgham
confirmed to the American am-
bassador on 7 August that the
governor of Bizerte had instruc-
tions to "welcome any construc-
tive move" such as a telephone
call from the French consul gen-
eral in Bizerte saying he had
instructions about "normal
(intrabase) communications."
The consul general affirmed the
same day that he had no instruc-
tions regarding substantive dis-
cussions and indicated that he
saw his role as the performance
of routine consular functions.
Foreign Minister Couve de
Murville had stipulated that
Paris' minimum requirements call
for a bilateral meeting at Bi-
zerte, although not necessarily
with the French base commander--
who remains anathema to the Tu-
nisians. Couve said that when
such a meeting occurred, the
French would specify the hour
when French troops would with-
draw from positions held out-
side the Bizerte base complex
and the Tunisians would indi-
cate that they would not inter-
fere with normal .intrabase
communications. A joint com-
munique would outline the points
agreed on. When normal con_
ditions had been restored,
France would agree to enter into
negotiations on Bizerte's future
on the basis of De Gaulle's
statement that France did not
intend to remain in Bizerte
forever.
The US Embassy in Paris
believes that the Foreign Min-
istry is operating within bound-
aries fixed by De Gaulle which
do not permit any consideration
of third-party or UN interven-
tion.. Paris has been suggesting
that diplomatic channels are the
proper means for solving the
entire Bizerte problem.
The Tunisians have fre-
quently reiterated their will-
ingness to guarantee intrabase
communications, but apparently
continue to insist that they
can take no initiative in break-
ing the deadlock until France
complies with the Security
Council's resolution of 22 July
recommending the pulling back
of forces to positions held be-
fore the outbreak of fighting
on 19 July.
Meanwhile, on 8 August,
Ladgham called Ambassador
Walmsley's attention to the in-
creasing number of violations
of Tunisian air space by French
military aircraft. He claimed
that planes frequently fly at
treetop level and that flights--
formerly conducted mostly at
night--now are "around the
clock." Another Tunisian of-
ficial has warned that if these
provocations continue, Tunisia
may retaliate and inform the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Security Council it had acted
under Article 51 of the UN
Charter, which guarantees the
right of self-defense in the
event of an attack.
The Tunisian press and
radio are contrasting the "fail-
ure" of Bourguiba's defense min-
ister in Washington with the
success of the foreign minister's
visit to Moscow. The $27,500,-
000 ten-year credit announced in
a joint communique following the
visit appears to have been under
discussion since January, when
it was announced that the USSR
would assist in the construction
of three small dams and a school
for engineering. En route home
from Moscow, the minister had
visited Prague and Warsaw, and
is expected also to stop in Bel-
grade,
The
Tinian Arabic-language press
claims that a military agree-
ment with the UAR was signed in
Cairo on 7 August and that sup-
plies are "to begin arriving
this week." Any forces which
arrive are expected to be small
in size and not significant to
the over-all situation. Tuni-
sia's greatest need is for mate-
riel, not personnel, and Tunisian
officials apparently continue
to want equipment without tech-
nicians.
The proffered medical mis-
sion and supplies from the UAR,
as well as a mission from Kuwait,
arrived early this month. The
UAR mission has visited Bizerte
and the hospitals where the
wounded are being treated, and
some Tunisian officials have
voiced their concern 25X1
that s unit is "so completely
military." Tunisian embassies
abroad continue to inscribe the
names of volunteers; Bourguiba,
who has twice solicited token
forces from "friendly nations"
to support him in his struggle,
probably is still unwilling to
admit foreign forces at this
juncture.
PAG leaders are reiter-
ating their readiness to resume
negotiations and appear hopeful
that international pressures
and the prospect of another UN
debate will prompt a Paris
initiative. The PAG has re-
quested that discussion of the
Algerian problem be scheduled
late in the UN General Assembly
session "in order to give more
time for successful completion
of negotiations." In any event
the PAG probably would like to
bolster its position by ob-
taining UN endorsement of its
position that the Sahara must
be an integral part of any Al-
gerian settlement.
The National Council of
the Algerian Revolution (CNRA)
is scheduled to convene this
month, probably in Libya. The
CNRA, the 62-member "supreme
governing body," which combines
military and political repre-
sentatives of the Algerian rebel
movement, has not met since
January 1960. During the Evian
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CURRENT INTELLIGENCE WEEKLY SUMMARY
and Lugrin talks, the PAG sought
to use the threat of a CNRA
meeting--as top PAG negotiator
Belkacem Krim put it--"to bring
the French to their senses,"
since the CNRA would, according
to the PAG, inevitably install
an even tougher PAG line-up.
Present PAG .leaders ap-
pear to feel that-it is only a
matter of time before France
will capitulate. Ultimate
PAG strategy depends on which
way De Gaulle decides to go--
toward meeting PAG demands on
theSahara, or toward regroup-
ment or the establishment of a
"third force" in Algeria without
the FLN. Until Paris' course is
set, the FAG will probably con-
tain its internal struggles,
present a public position of
unity, and hold to its course,
although some concessions may
have to be made to mollify the
"hard-line" military types.
These may include allusions to
future acceptance of substantial
Sino-Soviet aid--and the addi-
tion of some "hard-liners" to
the PAG. A PAG delegation is
scheduled to attend the 1 Sep-
tember meeting of "nonaligned
states" in Belgrade, where it
will endeavor to obtain further
support.
French officials stress
their belief that the Bizerte
problem rather than the issue
of Saharan sovereignty caused
the breakoff of negotiations.
Although this belief would seem
to hold out some hope that talks
could be resumed if France and
Tunisia reached an agreement,
French comment regarding future
negotiations has been pessimistic,
and Paris may be trying to play
down the effect of the French
refusal to treat the Sahara as
part of Algeria. In a conversa-
tion with the American consul
general at Algiers on 5 August,
Minister for Algerian Affairs
Louis Joke and his chief assist-
ant said the prospect of ne-
gotiating anything with the
present PAG team was not good.
In reviewing other methods
of easing the Algerian burden on
France, Paris may again be con-
sidering the establishment of a
Moslem-European government not
formally under PAG control. Joxe's
deputy recently pointed out that
the referendum of 8 January 1961
provided for the establishment
of executive and legislative
bodies and the assignment of
government responsibilities to
Algerians. He said that another
referendum could determine areas
of Algeria in which a majority
wished to remain with France.
He thoughtregroupment of pop-
ulations within those areas
would provide an internationally
acceptable method of transferring
sovereignty, presumably both in
areas the PAG controlled and in
those which voted to retain ties
with France.
the
government may aga n e examining
the possibility of finding a
Moslem "third force" to which
power might be transferred. The
US Embassy in Paris reports ex-
tensive regroupment planning
under way, however, and it is
not clear whether Paris intends
an independent third-force govern-
ment to have control of all or
Just the French-sponsored part
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CURFENT INTELLIGENCE WEEKLY SUMMARY
The government which
emerged from the week-long
session of the Congo parliament
on 3 August repres-:ants a coali-
tion of moderate splinter
parties together with a con-
siderable number of at least
nominal Gizenga adherents. In
the absence of delegates from
Katanga, one vice premiership
went to anti-Tshomb6 leader
Jason Sendwe and the other to
Gizenga. About half of the
cabinet and lesser posts were
filled with persons associated
in various degrees with Gizenga,
although such persons will not
necessarily prove responsive
to him in their new posts.
Cyrille Adoula's accession
to the premiership--by near-
unanimous approval--represents
at least a temporary setback
to Gizenga, whose spokesmen
had claimed they controlled
sufficient votes in parliament
to install him as premier. Al-
though his followers appear
prepared to participate in the
Adoula government, Gizenga has
not said whether he will go to
Leopoldville.
Gizenga seems to have to
choose between taking up his vice
premiership ?inder Adoula under
the best terms he is able to
obtain, or remaining in Stanley-
ville with the risk that his
followers will gradually desert
him to form new alliances in the
fluid political arena in Leopold-
ville. On 7 August,
Gizenga informed
the bloc an neutralist diplomats
in 3tanleyville that the Aloula
government is the only legal
Congolese regime.' He did not,
however, commit himself to par-
ticipate in the government.
Adoula has stated that his
government will follow a policy
of "nonalignment" in interna-
tional affairs and will accept
aid from any quarter provided
no political strings are at-
tached, He emphasized his de-
sire to e tablish a truly nation-
al government, to reunify the
Congo army, and to resolve the
tribal conflicts which have con-
tinued to plague the country.
!Foreign Minister Bomboko was
noncommittal when queried by U'3
Embassy officials as to whether
Leopoldville would accept the
Peiping mission accredited to 25X1
3tanleyville.
Adoula's statements since
his assumption of the premier-
ship have emphasized his inten-
tion to make Katanga an in-
tegral part of the Congo again.
His warnings of possible mili-
tary action against the Tshomb6
regime have been implicitly
supported by UN officials, who
have reaffirmed that moves by
the central. government to re-
integrate Katanga with the Con-
go would not be opposed by the
UN.
The American Consulate
in Elisabethville reports that
Adoula's warnings have made a
strong impression on Tshomb6
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and his followers, and that
Tshombe appears to be searching
desperately for means of pre-
serving stability in Katanga.
Tshombe apparently is also
attempting to improve his rela-
tions with Leopoldville and has
sent, 16 legislators to parlia-
ment. Elisabethville insists,
however, that its participation
in the legislature will
not prejudice its claim to
a substantial degree of autonomy
when the constitution is re-
vised.
Belgian Foreign Minister
Spaak has stated that he is
"deeply worried" over the pos-
sibility that the UN and the
Leopoldville government may
use force to integrate Katanga
into the Congo. Spaak fears
that should Belgium support
action against Katanga, the
Katanga government might con-
fiscate Belgian economic instal-
lations and molest Belgian
nationals, While Spaak has
thus far had the support of
most Belgians for his policy
of cooperation with the UN in
the Congo, new violence directed
against Belgians there would
undermine his position and
could bring about the
fall of the Lefevre-Spaak
government.
The talks at Phnom Penh be-
tween Souvanna Phouma and Boun
Oum resulted in only slight
progress toward formation of a
coalition government: The prin-
cipal point of agreement was a
decision to seek an entirely
new basis for formation of a
government, rather than to ex-
pand either the Boun Oum govern-
ment or the Souvanna "govern-
ment" recognized by the Commu-
nist bloc.
According to the communiqu?
issued by the two princes on 4
August, negotiations on the com-
position of the government are
to be conducted by delegations
representing them and Prince
Souphannouvong--at Ban Namone
or "any other place in Laos."
Souvanna and Boun Oum will then
meet in Luang Prabang--accom-
panied, they hope, by Souphannou-
vong--to present to the King
"all necessary elements for the
appointment of a national coal-
ition government." Souvanna is
apparently convinced that both
Boun Oum and Phoumi have tacitly
accepted him as the new premier,
a supposition which may be pre-
mature.
Souvanna has flown back to
Xieng Khouang Province, seat Of
his shadow "government," to con-
fer with Souphannouvong on his
conversations with Boun Oum
and Phoumi. Nothing was
achieved at Phnom Penh that is
likely to meet with Souphannou-
vong's objections, but difficul-
ties may arise over the site of
the projected talks. The Pathet
Lao has insisted that these
negotiations be held at
Namone, while the Boun Oum
government has sought an alter-
nate site.
There have been small-
scale military actions in sev-
eral areas during the past week.
In Xieng Khouang Province, gov-
ernment Meo units have become
more aggressive in their har-
assment of Kong Le and Pathet
Lao positions. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The recent currency "re-
form''--which permitted Cubans
to exchange a maximum of 200
pesos of the old currency,
required that all in excess of
that amount.be deposited in
the Central Bank and imposed
rigid controls on future with-
drawals from such accounts
presents the Castro regime
with what amounts to a forced
loan from the.public. It
also gives the regime another
effective instrument of con-
trol.
Announced by the govern-
ment as a security measure to
'"prevent the employment of coun-
terrevolutionary resources
abroad" against the regime,
the currenncy . changeover seems
also aimed at halting infla-
tion, providing a census of.
cash assets, and forcing an
increased public savings pro-
gram. The measure will con-
siderably enhance the regime's
financial position in the short
run. Those Cubans most drasti-
cally affected are already
largely disaffected from the
regime, but,there may be some
increased opposition from
urban workers whose savings
are threatened.
Castro's 8 August comments
on the decree setting a 10,000-
peso ceiling on bank accounts
established under the new cur-
rency law betrayed some concern
over the difficulty of "not
hurting some innocent persons"
by such a law. He claimed,
however, that "only some 3,000
persons have over 10,000 pesos,"
and that "the middle classes
have been respected; their
savings accounts have been
respected completely."
To prevent the conversion
of Cuban currency held abroad,
the regime barred virtually all
international traffic for the
period of the changeover. Traf-
fic to and from the US naval
base at Guantanamo was stopped,
and some Cuban employees were
turned back as they attempted
to return home'after work on 4
August.
Che Guevara's speech to
the conference combined a bitter
attack on US policy in Latin
America and alleged plots against
the Castro regime with a cal-
culated appeal for Latin. American
support, including conciliatory
references to Cuba's desire to
"coexist with the rest of Latin
America." According to the
Prensa Latina account of the
speech, Guevara. also said that
bloc credits to Cuba now amounted
to $357,000,000, with another
$100,000,000 now being negoti-
ated, and he defined the Cuban
revolution as "socialist," whose
representative "sits down at a
conference of socialist coun-
tries and is considered a broth-
er."
A Brazilian study of the
possibilities of expanding
Cuban-Brazilian trade begun in
June has been completed, accord-
ing to a Prensa Latina report
of 2 August, and a Brazilian
delegation is to come to Havana
to negotiate a formal agreement.
The US Embassy in Rio de Janeiro
reported that the Brazilian
delegation will leave for Havana
on 13 August.
A trade agreement between
the two countries would be
primarily a political gesture,
since the principal exports of
both countries are competitive
and their past exchange has
been limited on each side to
less than 1 percent of total
trade.
The Colombian Government's
sharp note to the Cuban Foreign
Ministry demanding the immediate
release of Colombian Foreign
Minister Turbay Ayala and his
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CURRENT INTELLIGENCE
party, who were aboard the U$
commercial airliner diverted to
Cuba on 9 August, may have been
instrumental in bringing about
the prompt release of the plane
and its passengers. The note
warned that failure to release
Turbay would be considered by
'1TTK.LY iUA2.1A.;:{Y
Colombia an "act of hostility."
The Mexican Government, which
had Just played host to the Tur-
bay party, also sent a note to
Havana expressing its "confidence"
that the plane and its passen-
gers would be allowed to proceed.
DOMINICAN, RFPUELIC
President Balaguer's pro-
gram for liberalizing the Domini-
can `lepublic's political system
was dealt a major blow by the
excessive measures used by the
police on 4 August against im-
promptu opposition demonstrations
and by the overnight jailing of
numerous dissidents. These
events illustrate the basic dif-
ficulties the program faces:
the inability of important
segments of the public to be-
lieve that liberalization is
possible as long as General
Ramfis Trujillo is in power;
the ineptness of opposition
leaders and the inclination,
especially of younger elements,
to take provocative action; and
the tendency of the police
toward overly severe measures
against the opposition.
Opposition elements affect-
ed by the police action belong
to two groups: the politically
moderate National Civic Union
(UCN), which has extensive
middle-class support, and the
14th of June group, which in-
cludes some UCN members but
also contains extremely venge-
ful and uncompromising anti-
Trujillo elements. The police
found lead pipes and similar
weapons in the 14th of June
group's headquarters but, de-
spite claims to the contrary,
not at the UCN offices. As far
as is known, the pro-Castro
Dominican Popular Movement was
not involved in the violence.
President Balaguer was ap-
parently unaware of the police
excesses until well after the
event. Ramfis Trujillo may
be having some difficulty con-
trolling some of the "old-line'
officers. He had apparently
had some success earlier,
however, in neutralizing his
uncles--Generalissimo Hector
Trujillo and General Arismendi
Trujillo--who had hoped to re-
store the dictatorship. The
appointment on 3 August of
Dr. Francisco Gonzalez Cruz
as secretary of state for the
armed forces and the earlier
shake-up in police commands
appear to be steps toward
moderation.
Balaguer and Ramfis are
still encountering pressures
against liberalization from
elements in the armed forces
and from other members of the
Trujillo family. Both are
said to believe that some kind
of Uri recognition or support
is imperative if their efforts
are to succeed.
Among the opposition,
resentment and bitterness are
high, and there may be further
outbreaks. The moderate leaders
of the UCN, who still claim
an intention to follow a course
of nonviolence, were still
dominant in their organization
as of 6 August, but pressure
on them for drastic revolutionary
action has increased. On 5
August, an authorized UCN
spokesman "officially" requested
immediate US action against
"the forces repressing the coun-
try," He said his group was
prepared to form a provisional
government to replace Balaguer's,
and added that the US will face
great disillusionment and bitter-
ness unless it takes prompt
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CU11ENT INTELLIGENCE w 1. EXLY SUMMARY
BRITISH GUIANA
The Communist inclinations
of Cheddi Jagan and other lead-
ers of the People's Progressive
party (PPP) now running the
colonial government are the
principal issue in the.-increas-
ingly acrimonious campaign for
the British Guiana legislative
elections on 21 August. The
outcome will probably be deter-
mined in those of the 35 con-
stituencies where independents
are running against candidates
of the PPP and the other two
major parties--the People's Na-
tional Congress (PNC), a Negro
racialist socialist party, and
the multiracial United Force
(UF), formed last fall as an
anti-Communist party.
Ousted from office by
the British in 1953 for seek-
ing to establish a Communist
state, the PPP was allowed to
return to political life in
1956 and since 1957 has been
the ruling party. Full internal
self-government, with London
controlling only defense and
foreign affairs, became effec-
tive in July 1961. London de-
signed the new 13-member Senate
to act as a brake against ex-
tremism, but eight of its mem-
bers are to be appointed on the
advice of the new premier, who
is likely to be Jagan. Jagan's
US-born wife Janet, considered
a more doctrinaire Communist
than her husband, reportedly
wants to become president of
the Senate. Nhatever the elec-
tion outcome, the British plan
to grant complete independence
in about 1963.
The PPP draws its strength
largely from East Indian rural
workers; it is running no can-
didates in six heavily Negro
districts. The 1961 redistrict-
ing of constituency boundaries
has improved the PNC's chances
at the expense of the PPP, and
Cheddi Jagan faces a hard fight
in his own constituency against
a popular fellow Fast Indian who
recently defected from the PPP
and is running as an independent.
Nevertheless, the PPP's superior
organization--probably combined
with some intimidation of
voters--makes it a formidable
opponent.
The PPP leaders, while pro-
fessing to be socialists, have
been less equivocal recently in
denying their belief in the in-
evitable triumph of Communism.
A known Communist, the young,
Harvard-educated Ranji Chandi-
singh, is slated for a ministeri-
al post in the event of victory,
and at least 14 other. PPP leg-
islative candidates are known
or suspected Communists. This
has already caused some East
Indian businessmen to shift to
the UP.
The British continue to
believe that the PPP will win by
a narrow margin. The American
consul in Georgetown, however,
feels that a narrow majority by
either the PPP or the PNC is
possible. The UF is expected
to win only a few seats. These
estimates are partially based
on the fact that in the .race-
conscious colony, approximately
one third of the voting-age pop-
ulation is East Indian, one
third is Negro, and the rest is
mixed.
In any event, the PPP will
have a well-disciplined group
of representatives in the next
assembly, since it is placing
members of the party hierarchy
with little popular following
in fairly safe East Indian
districts. It could thus prob-
ably thwart any attempt by
either opposition party to form
a stable government, even if
the PPP lost the election. PNC
leader Burnham, who had some
Communist associations before
he split with Jagan in 1955,
is widely distrusted as an op-
portunist. In any case, the bit-
terness created last spring when
Burnham's party failed in an at-
tempt to unite with the UF would
make a PNC-UF government hard to
arrange.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET PARTY RULES REVISED
The new Soviet Communist
Party Statutes will require the
replacement of at least six mem-
bers of the presidium at the
22nd party congress in October
but do not appear to have altered
the basic principles of party
operations. The statutes, which
govern the organization and ac-
tivities of the party, have been
completely rewritten to incor-
porate much of the language of
the published party program, and
include--without elaboration--
the few substantive changes
called for. These changes are
primarily refinements of exist-
ing practices.
The principal change is the
requirement for a specified min-
imum in the turnover of the mem-
bership of party committees and
bureaus at all levels. For ex-
ample, one fourth of tine presid-
ium. lust be replaced at each
regular party congress--normally
every four years--and "as a rule
the members will be limited to
three consecutive terms. How-
ever, this latter provision,
which could affect only Khru-
schev, !Aikoyan, and Shvernik at
the present time, need not apply
in the case of officials of
"recognized authority, high po-
litical, organizational, and
other qualities." This undoubt-
edly exempts Khrushchev and
Mikoyan, but Shvernik, a rela-
tively minor figure in the pre-
sidium who has been in ill health,
will probably be dropped.
Others on the 23-man presid-
ium who may be dropped to satis-
fy the turnover requirement are
Kuusinen, who will soon be 80
years old, and Aristov, Ignatov,
Kalnberzin, Pospelov, Pervukhin,
and possibly Furtseva, all of
whom have suffered political
setbacks in recent years. The
party secretariat is excluded'
from the requirement for periodic
refurbishing.
The minimum turnover at
each regular election is one
fourth for the central committee
in Moscow, and one third for the
republic and regional party com-
mittees, Half the members of
PERCENTAGE TURNOVER IN REPUBLIC CENTRAL
COMMITTEES AT REGULAR PARTY ELECTIONS
THE PROPOSED 1961 PARTY STATUTES REQUIRE A CHANGE OF AT
LEAST 33-1/3% OF THE COMMITTEE MEMBERSHIP AT EACH ELECTION.
ARMENIA
AZERBAYDZHAN
BELORUSSIA
ESTONIA
GEORGIA
KAZAKHSTAN
KIRGIZIA
LATVIA
LITHUANIA
MOLDAVIA
TADZHIKISTAN
TURKMENISTAN
UKRAINE
UZBEKISTAN
Figures in red are below the new norm. 25X1
1952 1954 1956 1958 1960
33 55 21
50 51 32
44 27 12
19
35
31 32 28 25
56 68 23 26
36 30 41
59 24 33 26
29 33 26 36
40 37 35 26
31 37 27 28
48 26 23 29
? 25 23 27
44 24 30
61 18 18
* No elections were held.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
lower party committees must be
replaced at their biennial elec-
tions. These provisions for
"systematic renewal" will result
in a considerable expansion in
the number of party members
drawn into committee work at the
lower levels. The net effect
on the central committees of the
several republics will vary some-
what, but there will probably be
a tendency to standardize turn-
over near the one-third minimum.
The percentage of change in the
central committees has averaged
slightly over 35 percent for
the last decade, but has fluctu-
ated widely from year to year
and from republic to republic.
Half the time, changes have been
less than the new requirement.
For 30 years, political fac-
tors and normal attrition have
made the turnover in the central
committee in Moscow run well
above the new 25-percent minimum.
In 1952, 53 percent were replaced;
in 1956, it was 40 percent; al-
most half the current members
seem slated for replacement at
the congress in October.
The renewal provisions will
create the impression of safe-
guards against a return to one-
man rule and should increase
the incentives for party work
by affording more party members
the prestige and accompanying
status benefits of minor par-
ty office.
The new statutes were pub-
lished in the Soviet press on
5 August instead of 20 August
as originally scheduled, prob-
ably because more time was
needed for "public discussion"
of the rules prior to the lower
level party conferences which
begin later this month. An
all-out campaign to explain
the program and the rules and
register opinion about them.
has been launched through the
party's organizational and
propaganda channels. Although
the rules will not go into ef-
fect until formally adopted by
the congress in October,.the new
provisions will probably be
implemented in the elections
at the lower echelon con-
ferences and congresses pre-
ceding the national meeting.
At the congress, some
minor changes--derived from the
public discussion--will probably
be made in the rules for the
sake of appearances, but major
revisions are unlikely
PEIPING STEPS UP ANTI-AMERICAN PROPAGANDA
The announcement of US mil-
itary preparations for dealing
with the Berlin crisis has been
followed by a sharp upsurge of
anti-American invective in Pei-
ping's public commentary. The
President's 25 July speech on
Berlin was cited by Peiping as
evidence that Washington had
embarked on "frenzied war prep-
arations' the Chinese have re-
peal .edly condemned US "distortions"
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CURRENT INTELLIGENC: WEEKLY SUM MARY
of Soviet proposals on Berlin
and have charged that Washington
is trying to use the crisis as
a pretext to solve deepening
internal economic problems.
Chinese attacks on the Ken-
nedy administration, which have
grown progressively shriller
since the inauguration, reached
a new peak in a People's Daily
commentary of 2 August character-
izing the administration's first
six months as a period of "ad-
ventures and failures." The
article charges that the Pres-
ident's "aggressive" policies
exceed the "brinksmanship" of
the previous administration and
incorporate the strategy of in-
stigating "limited wars." Peo-
ple's Daily warns, therefore,
that the bloc must maintain a
heightened state of vigilance
because the US is impelled by
repeated failures to take in-
creasingly reckless gambles.
The article suggests that
bloc strategy should center
around a "head-on struggle"
against the US--language remi-
niscent of that Peiping used to
belittle the possibility of de-
tente with the US in the course
of the Sino-Soviet dispute last
year.
Much of Peiping's recent
invective has centered on US
strategy for keeping Communist
China out of the UN. According
to the Chinese, the Ui is plan-
ning a series of "provocative
incidents" in the Far East de-
signed to involve Peiping in a
situation which would under-
score its belligerence before
the Chinese representation issue
comes up at the next UN General
Assembly session.
In contrast to the belli-
cosity of Peiping's public anti-
American posture, Chinese Com-
munist diplomats several weeks
ago were unusually affable in
a series of approaches to US
representatives in Europe. The
regime's aims in these ap-
proaches seem to have been
modest: to get a reading on
the prospects for change in the
new administration's China pol-
icy and to emphasize Communist
China's unyielding stand on ma-
jor points at issue. It seems
unlikely, in view of the tone
of its public utterances, that
Peiping had much confidence that
these approaches would lead to
an early rapprochement.
Recent reports of produc-
tion declines, stoppages, and
related problems in China's in-
dustry reflect the cumulative
effects of economic difficulties
brought on by the excesses of
the "leap forward," two succes-
sive years of poor crops, wide-
spread food shortages, the with-
drawal of Soviet technicians,
and generally inept planning and
leadership. The "leap forward"
effort strained both men and
machines, and reports suggest
that over the past six months
malnutrition and lowered caloric
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CURRENT INTELLIGENCE WEEKLY SUMMARY
intake have affected not only
the morale of the workers but
also their physical ability to
carry a full work load. Re-
duced working efficiency is
believed to be a contributing
factor in current shortages of
coal and iron ore, which are
in turn causing local stoppages
in heavy industry.
Because coal mines in Chi-
na are still far from mechanized,
the stamina of the labor force
has an important bearing on the
output of the industry. The
widespread indications of food
shortages imply a decline in
productivity in practically all
labor-intensive industries,
even though heavy industry has
been receiving preferential ra-
tions for its workers. The
government has even shortened
hours and reduced time spent
in political meetings in an ef-
fort to ease excessive work
burdens on food-short workers.
Morale has clearly been hurt
by the government's failure to
fulfill its grandiose promises
of 'the "leap forward" period
or even to maintain the pre-
v:. ously low standards of living.
The consequences of worker
disillusionment and apathy are
difficult to calculate in terms
of production and efficiency of
distribution. However, avail-
able information suggests that
health problems in 1960 and 1961
have at least slowed production
through absenteeism and reduced
efficiency on the job. Among
the extractive industries, which
are dependent on a high level
of labor input, it can be as-
sumed that the output of coal
and iron ore mines is lagging.
Stoppages in industrial pro-
duction in recent months have
been attributed most often to
shorts es of raw materials and
fuel.
The Nanking Hs n ua 25X1
Daily ~published an editorial
o3 July defining the current
major problem in industry as an
"insufficient supply of raw ma-
terials and fuel."
Coal, which has been re-
peatedly cited
as a cause for production s op-
pages, accounts for more than
95 percent of the total produc-
tion of energy in China. In-
formation is not available to
refute or to confirm Peiping's
1960 claim for coal production
of 425,000,000 tons. Because
of the relatively high content
of noncombustible matter in-
cluded in Chinese coal, however,
it is estimated that the 425,-
000,000 tons claimed for 1960,
if expressed in units of energy,
would equal only about 300,000,-
000 tons of standard fuel--an
increase of only about 10 per-
cent over 1959.
The shipment of uncleaned
coal from the mines not only
puts a heavy burden on the
transport system but also dis-
rupts those industrial processes
which require consistent stand-
ards of quality in their fuel. 25X1
reports 25X1
cite complaints of low-qual-
ity coal rather than in-
adequate quantities. The re-
gime's attempt to correct
this problem by expansion of
coal-cleaning facilities now
may be delayed by the cut-
back in industrial construc-
tion. F_ I 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
MIKOYAN'S FORTHCOMING TRIP TO JAPAN
Soviet First Deputy Premier
Nikoyan's trip to Japan to open
a Soviet trade fair on 15 August
will be the first visit to that
country by a top Soviet leader
and reflects Moscow's desire to
offset Japan's continuing strong
suspicion and mistrust of the
USSR. Moscow probably hopes
the trip will help to regain
some of the political leverage
which it felt it had achieved
with the fall of the Kishi re-
gime last summer.
There are outstanding chron-
ic irritants in Soviet-Japanese
political relations, however--
including Soviet occupation of
the southern Kuril Islands and
continued restrictions on Japa-
nese .ishing rights--which pose
formidable obstacles to rapproche-
ment between the two countries.
More recently, Moscow was annoyed
by Japanese Prime Minister Ikeda's
trip to the United States. In a
speech on 6 July, Khrushchev
attacked the trip as proof of
Japan's complete subjection to
US policies. Moreover, Japan
recently refused to permit top
Communist party representatives,
including Soviet presidium mem-
ber Mukhitdinov, to attend the
eighth Japanese Communist party
(JCP) congress.
Mikoyan can be expected to
hold discussions with Liberal-
Democratic party leaders con-
cerning closer relations with
Moscow and will probably hint
to them that a serious offer by
the Ikeda government to enter
into peace-treaty negotiations
might lead the USSR to adopt a
less intransigent attitude on
the Kurils. Mikoyan will prob-
ably also make known to JCP
leaders the USSR's continued
support for their program of
gradual revolution in Japan and
cooperation with leftist groups
in joint demonstrations against
the government.
Although Mikoyan is traveling
at the invitation of the Japan-
Soviet Society rather than as a
guest of the government, the
Foreign Ministry expects to treat
the visit as semiofficial in or-
der to maintain some control over
Mikoyan's schedule, and is at-
tempting to discourage all po-
litical activities in connection
with the visit and trade fair.
Nevertheless, leftist organiza-
tions will probably attempt to
stimulate widespread celebrations
as evidence of public desire for
a closer accord with the USSR.
Cabinet officers suspect
that Japanese rightists, who
are opposed to the visit and
have protested to the govern-
ment that it "runs counter to
the national sentiment of the
Japanese people," are planning
counterdemonstrations. The
government, fearing violence,
is preparing extensive security
measures to prevent a clash
between the two groups.
Mikoyan is likely to have
much more success in the economic
than in the political sphere.
His visit will be the high point
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CURRENT INTELLIGENCE VV'EEKLY SUMMARY
of a prolonged Soviet effort to
stimulate Japanese interest in
trade with the USSR, and he un-
doubtedly will use the occasion
to offer even.greater prospects
for trade increases. Although
many specific problems remain
unsolved and the Japanese are
increasingly.frustrated by Soviet
bargaining techniques, the main
obstacles barring the steady
development of trade have been
cleared away. Like most of the
industrial countries in Western
Europe, Japan has become a major
supplier of Soviet import needs
for advanced industrial machin-
ery and equipment,
The trade goals specified
in the three-year trade pact
signed in March 1960 were sur-
passed last year; total Soviet-
Japanese trade rose to $147,000,-
000 from some $62,000,000 the
year before--although trade with
the USSR still accounts for less
than 2 percent of Japan's total
trade. While the balance of
trade remained heavily in favor
of the USSR, the conclusion of
a number of major import con-
tracts by the USSR, including
the purchase of $62,000,000
worth of ships and $42,000,000
in paper-making machinery, has
cut this imbalance in recent
months.
Other negotiations for im-
portant items included in the
three-year trade agreement have
collapsed or are bogged down by
Soviet price and credit demands.
The stimulus of the first major
deals, however, has served its
purpose, and Moscow has played
up these transactions as an
example of the profits to be
made in Soviet markets, stress-
ing in particular the position
Japan could occupy as a source
of imports for the development
of the eastern regions of the
Soviet Union.
Other indications of the
USSR's long-range intention of
fostering trade with Japan in-
clude the conclusion of three-
to six-year contracts for sales
of oil, coal, and timber to
Japan; the successful bid to
increase the size of the Soviet
trade mission in Tokyo from 25
to 39 persons; and the recent
agreement to allow expansion of
Japanese shipping services to
the Soviet Far East, Moscow's
efforts to encourage exchanges
of industrial missions have led
to a growing number of such
visits in recent months, which
probably will pave the way for
more trade deals.
The Japanese trade fair in
Moscow last summer and the Soviet
fair in Tokyo this year are the
first exchanges of this kind
between the two countries. A
proposal by the heads of Japan's
two most powerful business asso-
ciations, the Federation of Eco-
nomic Organizations and the Japan
Chamber of Commerce and Industry,
to hold a formal dinner for Mi-
koyan is indicative of high-level
Japanese response to the Soviet
efforts to encourage trade.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NORTH KOREA AND JAPAN RENEW REPATRIATION AGREEMENT
Japan and North Korea have
agreed to a one-year extension
of the 1959 Calcutta Accord,
under which nearly 70,000 of
the more than 600,000 Koreans
in Japan have been repatriated
to North Korea. The Calcutta
Accord, due to expire in Novem-
ber, is a private agreement
between the Japanese and North
Korean Red Cross societies but
has the official backing of both
countries. The extension was
arranged through an exchange
of telegrams between leaders
of the two societies. No ad-
ditional formalities are planned,
and the absence of fanfare
should to some extent mollify
South Korea, which has strongly
opposed permitting Koreans in
Japan to go to the Communist
North.
From the beginning Pyong-
yang has valued the repatria-
tion program for its effect on
Japanese - South Korean rela-
tions. Conclusion of the re-
patriation agreement in 1959
prompted Syngman Rhee to sever
trade relations with Tokyo
and break off all negotiations
with the Japanese. The Chang
Myon government, while opposing
repatriation in principle,
tended to ignore it.
Extension of the accord--
on the eve of renewed talks for
a settlement of Japanese -
South Korean differences--drew
adverse official and public
reaction in South Korea.
lthough
Seoul has indicated that it
will "soft-pedal" the repatria-
tion issue providing Tokyo does
not press for immediate estab-
lishment of a resident diplo-
matic mission in Seoul., dis-
trust of the Japanese runs deep,
and there have been indications
of strong anti-Japanese feelings
among the younger officer elements
on which the leaders are dependent
for support.
Pyongyang's own enthusiasm
for the repatriation program
has been somewhat dampened by
the problems of resettling the 25X1
repatriates, who are accustomee25X1
to better Japanese living stand-
Registrations fell off sharply
last winter, and Pyongyang tem-
porarily suspended the program
in February to allow the Korean
front group in Japan time to
build up a backlog of applications.
The Koreans in Japan continue to
show reluctance to return to
North Korea; at the 70th
sailing on 4 August only 737
out of more than 1,000 regis-
trants who were alerted appeared
at the port of embarkation.
Pyongyang may prefer to
replace the present system--
under which repatriates are
processed and moved in large
groups--by some procedure in
which they would return singly
or in family groups. In this
way North Korea could keep the
program going indefinitely
and continue to exploit the
returnees in propaganda. At
present, however, the Japanese
continue to press for rapid
removal of as many as will
agree to be repatriated, and
a backlog of about 10,000 ad-
ditional registrants remains.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
There continues to be a
strong sense of urgency in
the Indian Army's efforts to
improve its defensive posi-
tion in the Indo-Tibetan fron-
tier area, despite indications
of varying estimates in New
Delhi of Chinese Communist
intentions. Many Indian offi-
cers are apparently convinced
that there will be further
Chinese border encroachments
in this area and that a test
of military strength between
Chinese and Indian forces will
occur in the near future; others
take a longer view of the prob-
lem. Prime Minister Nehru 0
continues to be con-
cerned over the possibility of
some "aggressive" move by the
Chinese this fall.
There does, however,
appear to be agreement, from
Nehru on down, that India
cannot afford to give up any
further territory to the
Chinese and that it must pre-
pare for the worst, in view
of the dim prospects for re-
solving the wino-Indian border
dispute.
.oaa ms m umpirtei -
~..JCEASf-FjRE GINS. ....
inagar
Ppt.`eh~~
B
Road constructed by
.,Chinese in 1957
Boundary shown on Indian maps
Boundary shown on recent
Chinese Communist maps
Motorable road
-- Motorable road
under construction
- Minor road or trail
--E S
Mt. Everest
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Gyangtse
P
Shillong-
Imphal
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CURRENT INTELLIGENCE WEEKLY SUMMARY
BRITAIN AND THE COMMON MARKET
Although Britain's applica-
tion for membership in the Euro-
pean Economic Community (EEC,
or Common Market), formally
submitted on 10 August, has
been widely hailed as a mile-
stone in the European movement,
nearly all observers anticipate
difficult negotiations ahead.
All the EEC countries--and
especially France--are loath
to change the EEC treaty in
any basic respect, yet Macmillan
has posed conditions which will
have to be met to some degree
if he is to secure parliamentary
approval for such a basic change
in British foreign policy.
Before formal talks can
open, probably in late September
or early October, a number of
procedural questions will have
to be settled. Although the
EEC Commission acted as the
Common Market's agent in the
recent talks with Greece, the
six member countries are likely
to insist on individual represen-
tation at the conference table
this time. Some of these coun-
tries as well as Britain hope
to induce Belgium's 3paak to
chair the negotiations, a serv-
ice he performed with distinc-
tion when the EEC treaty was
written. The EEC will probably
refuse to bargain simultaneously
with any of Britain's partners
in the Outer Seven, but it
will. be difficult to avoid
their intervention.
Most of the substantive
issues have already been iden-
tified, and prospects for even-
tual agreement hinge largely
on France. Because the French
regard the EEC both as a "prime
instrumentality for progress
toward European union" and as
a major means for achieving
national economic and political
goals, the American Embassy in
Paris expects France to insist
that London accept the EEC treaty
largely as it is. 'While in
many respects Britain appears
ready to do this, London is
counting on the other EEC coun-
tries and the US to persuade the
French to be "reasonable" con-
cerning the changes the British
feel they need.
Despite the desire of both
sides to reach agreement, ready
solutions to a number of diffi-
cult problems are not yet in
sight, and some observers be-
lieve London has been far too
slow in seeking negotiations.
The EEC is a going concern in
which bureaucratic and commer-
cial--as well as national--
interests are deeply entrenched.
Moreover, the EEC is on the
verge of important decisions--
for example, on its agricultural
policy, its relations with Africa,
and the transition to its second
stage. Even those who have strong-
ly favored Britain's accession
have questioned whether the EEC
should "come to a halt" while
the bargaining with London
goes on.
Room for compromise may
also have been reduced on
Britain's side by Macmillan's
delay in announcing his decision.
A recent poll has shown that
public support for an approach
to the EEC has declined from
44 to 38 percent in the past
month; moreover, the large
majority the government re-
ceived following the parlia-
mentary debate of 2 and 3
August was due in part to Mac-
millan's emphasis that no
final commitment was involved.
Thus, even with his success
in this initial stage, Mac-
millan will be keenly aware 25X1
during the negotiations that
he has as yet no clear mandate
to enter the EEC.
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Premier Fanfani's trip to
Moscow from 2 to 5 August seems
to have been aimed primarily at
further strengthening his gov-
ernment's domestic position
following the vote of confidence
given him by the Chamber of
Deputies in mid-July. He re-
portedly took a "very firm" line
with Khrushchev, and may now be
encouraged to push harder for
Italian participation in big-
power meetings.
When Parliament recessed on
21 July, Fanfani's position was
perhaps more solid than at any
time since his investiture a
year before. Socialist leader
Nenni had been constrained to
press for a no-confidence vote
to forestall a revolt by his
party's pro-Communist wing,
which was encouraged by Social-
ist electoral losses to renew
its criticism of Nenni's mere
abstention when Fanfani was in-
vested.
The no-confidence motion,
however, obliged the small cen-
ter parties--Social Democrats,
Republicans, and Liberals--to
reaffirm their support for Fan-
fani's all - Christian Democratic
cabinet with the more or less
explicit admission that no al-
ternative is in sight, at. least
until 11 November. After that
date, when President Gronchi
begins his last six months in
office, the constitution pre-
cludes the President's ability
to threaten Parliament with
dissolution.
Fanfani's eagerness to go
to Moscow underlines the changed
political atmosphere in Italy.
In 1960 the Segni cabinet's
approval of a similar trip by
Gronchi was used as an excuse
to overthrow the government.
Fanfani presumably saw in such
a trip at this time an opportu-
nity to spike Communist charges
of anti-Soviet intransigence on
the part of the Italian Govern-
ment and at the same time to
impress rightists at home and
Italy's allies with his firm-
ness.
The Rome daily Il Messaggero,
a government mouthpiece, reports
that Italo-Soviet relations have
deteriorated slightly as a re-
sult of the Moscow visit, This
opinion is presumably aimed at
fostering the impression that
Khrushchev was disappointed by
Fanfani's strong support of
NATO. A bid for Italian par-
ticipation in big-power talks
is apparent in the paper's cita-
tion of Fanfani's statement that
Khrushchev expressed no prefer-
ence for a specific number of
participants in negotiations
with the West,
The Italian Communist party
has attempted to link the South
Tirol problem to the Berlin
issue by raising the question of
"pan-Germanism," but the Italian
ambassador in Moscow implied to
Ambassador Thompson that the
South Tirol question was not men-
tioned in the Fanfani-Khrushchev
talks. The German minority prob-
lem in northern Italy continues
to threaten Italian political
stability, however, and Fanfani's
next domestic hurdle may come
this fall if rightist extremists
press the issue.
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SPECIAL ARTICLES
THE USSR'S ROLE IN THE CQNGO
A year ago, Moscow thought
it saw an excellent opportunity
to influence the Congo's polit-
ical and economic development,
and to advance Soviet goals for
Africa as a whole--by establish-
ing a firm advisory position
within the central government
t Leopoldville. For a time,
the USSR's objective of unify-
ing the country under Patrice
Lumumba coincided with the aim
of independent African states.
Soviet leaders, however, under-
estimating the extent of Afro-
Asian support for the United
Nations, overplayed their hand,
and ;bloc aims in Africa
suffered a severe setback.
Although its opportunities
to influence the situation have
diminished, the USSR does not
consider the Congo a lost cause.
An eight-man Soviet diplomatic
mission arrived unannounced in
the Gizenga stronghold of Stan-
leyville early last month, pre-
sumably anticipating the recon-
vening of the Congolese parlia-
ment. Two members of the Soviet
Foreign Ministry told an Amer-
ican official on 27 July that
the USSR expected the forma-
tion of a Congolese government
representing all factions in
parliament. Moscow has begun
to lay the groundwork for cul-
tivating Congolese extremists
and those elements sympathetic
to the Communist bloc.
Congolese during the pre-inde-
pendence Round Table Conference
in Brussels early that year.
Principal responsibility
apparently was assigned to the
Belgian Communist party (PCB)
and, within the party, to cen-
tral committee member Albert
Deconinck. Trips to East Ger-
many, Prague, and Moscow were
offered to the delegates, and 25X1
some--including Gizenga--visited
the bloc during and immediately
after the conference.
The Economic Round Table
in late April and early May of
1960 gave the PCB and bloc rep-
resentat1ves in Brpssels further
occasion for contacts with the
Congolese.
After the Belgian Govern-
ment ended its administration
of the Congo on 30 June 1960,
Khrushchev sent a personal mes-
sage recognizing the regime
and requesting diplomatic rela-
tions. The Soviet delegates
attending the independence
ceremonies remained more than
a week in Leopoldville, and at
their departure an agreement
to exchange ambassadors was
announced.
Early Soviet Attitude
Soviet actions in the
months before the Congo re-
ceived independence gave no
evidence that the Kremlin lead-
ers anticipated the later de-
velopments there. Prior to
1960 the bloc maintained lim-
ited contacts with Congolese
political figures through the
Czech Consulate in Leopoldville.
The Communists began system-
atic cultivation of leading
The mutiny which broke
out a week after independence--
among Congolese troops near
Leopoldville who demanded in-
creased pay and the removal of
Belgian officers--initially was
not politically inspired or
primarily anti-European in
character. It received im-
petus, however, from inflam-
matory anti-Belgian speeches
by Lumumba, who had come out
ahead of his rivals in elec-
tions a few weeks earlier and
GpT1AL
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CURRENT INTELLIGENCE WEEKLY SUMMARY
headed a "national coalition"
government representing 25
different factions and parties.
His.abcession to the soldiers'
demands-led to the army'ind.isci-
pline and rioting throughout
most of the provinces and
prompted a request from him
and President Kasavubu for UN
assistance in controlling the
outbreak.
Influencing Factors
The rapidly deteriorating
political and economic situa-
tion which followed gave Soviet
leaders an opportunity to estab-
lish a strong bloc presence
deep in Black Africa and at the
same time to further the USSR's
pose as champion of anticolonial-
ism, benefactor of newly inde-
pendent African states, and de-
fender of African and Asian na-
tionalism. In addition, it
offered the possibility of open-
ing to Communist penetration a'key
area adjacent to the still de-
pendent territories of British
East Africa, the Portuguese
colonies, and, within the
French Community, the new Cen-
tral African Republic and Congo
Republic (Brazzaville).
The collapse of the Paris
"summit" meeting two months
earlier had ended Moscow's pre-
summit attitude of conciliation
toward the West, and Soviet
leaders had adopted an increas-
ingly belligerent posture. More-
over, the Congo situation fol-
lowed in the wake of the con-
ference of Communist leaders
at Bucharest in late June, at
which the Chinese openly ac-
cused Khrushchev of softness
toward the West. A specific
point at issue was the degree
and character of support the
bloc should give nationalist
movements in the underdeveloped
areas.
Soviet leaders apparently
felt that developments in the
Congo could be fully exploited
without undue risk, and Moscow
mounted an extensive campaign
of official statements, diplo-
matic activity, and propaganda
as part of its strong anti-US
line.
Bloc Tactics
Belgium's airlift of re-
inforcements to the Congo to
assist its troops who re-
mained there by treaty was im-
mediately denounced by Khrushchev
in a special press conference at
the Kremlin as an attempt to sup-
press the Congo's attainment of
independence. This was followed
by a Soviet Government statement
accusing the Western powers of
seeking to "liquidate" the new
state through direct military
action.
The USSR initially support-
ed UN action to deal with the
situation in an effort to pre-
vent unilateral Western inter-
vention, force the withdrawal of
Belgian troops and civilian ad-
visers, and strengthen the cen-
tral government. Premier Lu-
mumba's extreme anticolonial
nationalism supported the bloc's
objective of removing European
influences from Africa.
The independent African
states favored UN intervention
as a means of easing tension,
restoring than authority of the
Leopoldville regime, and avoid-
ing extension of the cold war
into Africa. Ghana and Guinea,
already aiding Lumumba finan-
cially as part of their effort
to promote claims to African
leadership, were particularly
eager to cooperate with the UN.
In addition, they saw an oppor-
tunity to enhance their role
within the international or-
ganization, to insulate the
Congo from unwelcome foreign
intervention, and--by acting
as mediator between the Congo-
lese premier and the UN--to set
a precedent for future situa-
tions elsewhere in Africa,
At the Security Council
session convened to discuss the
situation, the Soviet delegate
demanded a resolution condemn-
ing Belgium's "armed aggres-
sion," accusing the US of col-
laboration, and calling for the
withdrawal of Belgian forces.
In the early days of the
crisis, Soviet leaders sought
to create the impression that
N
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the USSR might intervene. In
reply to Lumumba's and Kasavu-
bu's request on 14 July to
"watch developments closely"
since the Congo might "find it
necessary" to ask for Soviet
help, Khrushchev promised
"resolute measures" and the
"required help" if further "im-
perialist aggression" made such
action necessary. Responding
to Lumumba's reiterated threat
a few days later to request
Soviet troops, First Deputy
Foreign Minister Kuznetsov told
the Security Council that the
USSR would "answer all requests"
of peoples struggling for lib-
eration. These carefully non-
committal pledges, by appearing
responsive to the Congo Govern-
ment's concern, were also in-
tended to bolster Lumumba's
tenuous hold over the govern-
mental machinery.
Meanwhile, the USSR began
rallying neutralist support
for its campaign to brand the
Western countries aggressors.
First Deputy Premier Mikoyan
and Foreign Minister Gromyko
expounded Soviet views on the
Congo situation to diplomats
at a reception on 13 July and
called on the Afro-Asian coun-
tries to join the USSR in de-
nouncing the West's interven-
tion.
However, Soviet leaders
were careful to avoid becoming
isolated from the Afro-Asian
position. In the Security Coun-
cil, Kuznetsov withdrew his
resolution calling for evacua-
tion of Belgian forces within
three days and accented a mod-
10 Aug 61
erate one for "speedy" with-
drawal sponsored by Tunisia
and Ceylon.
Bloc Intervention
While Soviet diplomats
were taking the lead in urging
UN assistance to the Congolese
Government, Moscow was obtain-
ing maximum propaganda advan-
tage by circumventing the UN
facilities and delivering aid
directly to the Congolese. The
first Soviet planeload of food
supplies arrived in Leopoldville
on 20 July; from then until mid-
September, when bloc personnel
were expelled from the Congo,
she Soviet bloc provided Lu-
mumba's extremist faction with
17 aircraft (including a per-
sonal plane for Lumumba), 100
trucks, and unknown quantities
of small arms, money, food, and
medicines. The bloc sent 350
to 400 technicians and several
high-level political and eco-
nomic advisers, and Soviet IL-18s
ferried Ghanaian and Guinean
troops to the Congo in support
of Lumumba.
The aid and support of bloc
and radical African states encc-.: --
aged Lumumba to take a hard line
with his opponents and to defy the
UN.in order-to achieve his goal of
unifying the Congo under his per-
sonal rule. He boasted of bloc
support and of the Soviet troops
which would be sent.if he re-
quested them.
Soviet leaders apparently
became concerned over the ex-
aggerated Congolese expectations
Imm
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CURRENT INTELLIGENCE WEEKLY SUMMARY
of bloc support. A party of
Soviet representatives headed
by Foreign Ministry official
Fomin--later appointed Soviet
charge d'affaires--arrived in
Leopoldville in late July
aboard a Soviet food plane to
coordinate future moves with
the Lumumba government and
channel first-hand information
to Moscow.
During Lumumba's visit to
New York at the end of July,
the USSR sought to moderate
Congolese demands. Two Soviet
Government statements issued
between 31 July and 5 August
reaffirmed the USSR's readi-
ness to "take resolute measures
to rebuff the aggressors," but
they carefully avoided com
mitting Moscow to unilateral
action.
An offical statement on
20 August contained the first
reference to "volunteers," a
flood of which could come from
among "loyal friends" in Africa
and other continents if addi-
tional NATO units were sent to
the Congo. The Congo three
days later rejected Soviet mil-
itary help, however, stating
that:it did not need foreign
volunteers. Soviet propaganda
began to claim that Moscow's
action had prevented the US
from intervening in the situa-
tion.
Attitude Toward the UN
Soviet leaders from the
outset regarded the UN opera-
tion in the Congo as no more
than a temporary expedient for
eliminating Belgian influence
and creating conditions favor-
able to advancing bloc aims in
Africa. The African"states ex-
pected that the UN would act in
support of Lumumba and use
force against opposition elements
--particularly secessionist
Katanga Province--to unify the
country under Leopoldville They
feared that political fragmentation
into autonomous provincial govern-
ments would encourage continued
economic dependence on Brussels
and that national allegiance
would be subordinated to tribal
and sectional loyalties.
Secretary General H.ammar-
skjold, however, ruled that
the UN resolutions did not author-
ize UN troops to use force on
behalf of the central govern-
ment. His failure to move
against Tshombe's Belgian-backed
regime in Katanga drew strong
Afro-.Asian and bloc criticism.
Moscow accused Hammarskjold and
Under Secretary Bunche of con-
nivance with the Western powers
to perpetuate colonial control
under cover of the UN,
When Mobutu overthrew Lu-
mumba on 14 September and sub-
sequently expelled all bloc
representatives, Soviet tactics
entered a new phase, The USSR
launched an all-out campaign
to wreck the UN's Congo opera-
tion. Moscow, for the first
time, broke with the Afro-Asians
by vetoing in the Security Coun-
cil a moderate resolution spon-
sored by Tunisia and Ceylon de-
signed to confirm Hammarskjold's
stand against unilateral military
support to the Congo, General
Assembly approval of the reso-
lution on 15 September provoked
the first Soviet propaganda
criticism of the Afro-Asian
position, In his shoe-pound-
ing address before the General
Assembly a week later, Khru-
shchev reaffirmed the USSR's
support for Lumumba and made
his "troika" proposal for
replacing the UN secretary
general.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Soviet Influence Wanes
The bloc's direct involve-
ment. in the Congo virtually
ceased with the closure of the
Soviet and Czech embassies at
Leopoldville on 17 September,
and the USSR sought to channel
assistance to pro-Lumumba
forces through Guinea, Ghana,
and the UAR. UN control of
the major airfields prevented
any substantial amount of aid
from reaching the rebels
In the UN, Moscow
refused to pay its share of the
Congo operation expenses and
demanded that Hammarskjold sub-
mit proposals for withdrawing
UN military forces.
The USSR responded to
Lumumba's arrest in early De-
cember with a government state-
ment scathingly attacking Ham-
marskjold and the UN command
and laying the blame entirely
on what it alleged was US in-
terference. The statement
again voiced displeasure with
those African and Asian states
which "have not preserved the
requisite unity" on the Congo
issue.
Soviet leaders took a cau-
tious attitude toward the rump
government proclaimed in Stan-
leyville by Lumumba's pro-
Communist deputy Antoine Gizenga
in mid-December, presumably to
maintain flexibility with re-
gard to events in Leopoldville.
Gromyko stated publicly that
the USSR recognized Gizenga as
acting premier, but Moscow did
not extend formal recognition
to his regime. After a delay
of ten days, Khrushchev replied
to an appeal for material as-
sistance from Gizenga by reit-
erating general promises of
Soviet support and sympathy.
The UAR, however, threw
its entire support to Gizenga.
A "diplomatic" mission.was.es-
tablished for him in Cairo, and
UAR officers in Stanleyville
provided military advice and
technical assistance. Nasir
withdrew the UAR unit from the
UN command and urged Ghana and
Morocco to do the same.
Moscow apparently regarded
UAR support for Gizenga as
strengthening the position of
the extremists and thus facil-
itating Lumumba's eventual
restoration. It sought to co-
ordinate bloc aid efforts with
the UAR and made available to
Gizenga's mission in Cairo a
substantial sum of money and a
small quantity of arms. Bloc
states joined the UAR, Ghana,
and Guinea in urging Sudanese
officials to permit UAR over-
flights en route to Stanleyville.
With Khartoum's refusal to grant
this permission, bloc and rad-
ical African support for the
pro-Lumumba group was restricted
to demands for Lumumba's release
and reinstatement and for the
disarming of Mobutu and Tshombe
forces.
The Soviet leaders saw in
Lumumba's death--announced in
mid-February--an excellent op-
portunity'to carry forward their
campaign against colonialism and
again identify the USSR with
anti-Western elements in Africa
and Asia. They hoped it would
lead to the withdrawal of the
remaining Afro-Asian contingents
in the Congo, and block any effec-
tive Western-backed UN action to
deal with the situation.
Moscow also seized on the
issue as a pretext for renewing
Soviet attacks on Hammarskjold
and for pressing Khrushchev's
plan to reorganize the UN in the
hope of garnering Afro-Asian
support. In letters in late
February to Nehru and other heads
of government in Asia, Africa,
Europe, and Latin America, Khru-
shchev sought to establish the
point that Lumumba's death jus-
tified the Soviet proposal and
Moscow's attack last fall on
Hammarskjold. He proposed that
all "foreign troops" be with-
drawn from the Congo and re-
placed with a commission of
African states.
As a gesture of restraint
toward the new administration
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CURRENT INTELLIGENCE WEEKLY SUMMARY
in Washington, Khrushchev did
not directly implicate the US
in Lumumba's death, but he
obliquely warned against any
unilateral intervention in the
Congo.
Shortly thereafter, Com-
munist China and the bloc sat-
ellites formally recognized
Gizenga's regime and agreed to
exchange ambassadors.
Moscow's bitter denuncia-
tion of Hammarskjold reflected
the frustration the Soviet
leaders had felt since Lumumba
was overthrown and bloc mis-
sions expelled from the Congo.
In attacking the UN organiza-
tion, however, the USSR lost
support among the African and
Asian countries. While the
Asian-African states disagreed
with some of Hammarskjold's
policies, they were unanimous
in upholding the institutional
authority of the secretary gen-
eral, and they considered the
United Nations the only alter-
native to involvement in East-
West power struggles.
Soviet hopes in the Congo
were further frustrated by an
apparent conflict of interest
between Moscow and Cairo. As
early as January there were
signs that the Soviet.Union'
was becoming concerned over
the UAR's influence with Gig
zenga and the possibility of
unilateral UAR aid.
The Soviets
were also sad
to feel that
Nasir was paying "lip service"
to African nationalism while
resting on the "laurels" of
10 Aug 61
his success in influencing
Afro-Asian opinion.
In late February, follow-
ing the adoption by the UN Gen-
eral Assembly of a moderate
resolution sponsored by the UAR,
Liberia, and Ceylon upholding
Hammarskjold's authority in the
Congo, a top Soviet official
characterized the 25X1
UAR's African policy as "equiv-
ocal" and said Nasir's real aim
was to isolate the "socialist
camp" from Africa.
The failure of renewed So-
viet efforts to provide aid to
Gizenga and to install him as
Lumumba's legitimate successor 25X1
closed out this phase of Moscow's
attempts to influence events in
the Congo,
Nevertheless, with political
forces and structures still in 25X1
flux, the Congo remains a poten25Xl
tially fertile ground for blo
St25X
viet Foreign Ministry official
Semenov warned Ambassador Thomp-
son in mid-May that the Soviets
had been restrained with respect
to the Congo, but that if the
situation should deteriorate,
they would act "very forcefully."
Should the current unstable rela-
tionships among Congolese fac-
tions break down, Moscow could
be expected to move quickly in 25X1
an attempt to influence subse-
quent alignments and recoup its
former position.
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CURRENT INTELLIGENCE WEEKLY SUM RY
COMPARISON OF SOVIET AND US INDUSTRIAL PRODUCTION
Moscow's official economic
statistics for the first half
of 1961 indicate that in pro-
duction of most basic commcad-
i.ties such as steel, oil,
and electric power--the USSR
continued. to narrow the US
lead. Some consumer-oriented
industries, however, remained
much at a standstill for a
variety of reasons, including
an insufficient supply of agri-
cultural raw materials and the
changeover in light industry to
the seven-hour day. The Soviet
goal is to, match US production
of major industrial items by
1965 and to reach the present
level of total US production
on a per capita basis by 1970.
Industrial Production
Soviet gross industrial
production in 1961 has gained
on that of the US. In 1959
and 1960, the USSR's industrial
output was about 40 percent of
the US figure,, by the end of
1961 it promises to be closer
to 43 percent, and by 1970 the
USSR may reach the 1961 level
of US production. On the as-
sumption that Soviet industry
is growing at 9 percent an-
nually and that of the US at
4.5 percent and that Soviet
output now is about 42 percent
of that of the US, however,
Soviet industrial production
would be about 67 percent of
that of the US. by 1970, and 103
percent by 1980. During the
past year, the USSR's indus-
trial production actually grew
at about 8.4 percent, while
that of the US declined.
The Soviet gain on the.US
in steel production--inferred
from the 1961 midyear plan
report--reflects primarily a
10 Aug 61
drop in demand in the US. While
Soviet steel output shows an in-
crease of 9 percent over mid-
1960, US steel production ac-
tually dropped by about 26 per-
cent. Thus,while total US
capacity for producing steel
is far greater than that of the
USSR, the USSR is using its
capacity to the fullest and,
at the same time, is adding to
it rapidly. At the beginning
of 1960, Soviet steelmaking
capacity was about 46 percent
of that of the US industry and
by the end of 1960 was about
50 percent. The Soviets, plan
to commission 7.2 million tons
of new capacity in 1961, the
largest addition on record.
The trend in crude steel
production in 1961 appears to
be consistent with that envis-
aged in the Seven-Year Plan
(1959-65). Taken in conjunc-
tion with the increases in
1960, it indicates that output
of crude steel should reach at
least the level of 86-91 mil-
lion tons planned for 1965 and
probably will approach 93-95
million tons. US production
of crude steel has declined
fairly steadily from 106 million
tons in 1955 to 90 million in
1960, a figure that will prob-
ably not be exceeded in 1961.
Machine Tools
In the production of ma-
chine tools, there was an ab-
solute drop in US production--
8 percent--which, although
smaller than the decrease in
steel, still contributed sub-
stantially to the over-all
picture of relative Soviet
progress. In the first six
months of 1961, the USSR pro-
duced almost as many metal-
cutting machine tools as did
the US in the entire year 1960.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
'While the Soviet Union is out-
producing the US in machine
tools--and is, incidentally,
exporting a considerable num-
ber to the underdeveloped na-
tions--the variety of Soviet
output is limited, and the
machine tools produced are con-
siderably less complex than
those of US manufacture.
While the USSR continued
its steady increase in produc-
tion of'metal-cutting tools, it
was not at a rate sufficient
to meet the sharply increased
revised goal for 1965 of 270,-
000 units. Moreover, produc-
tion of-metal- forming machines
showed no increase,although
Seven-Year Plan goals for that
item were also sharply in-
creased in'December 1960. It
is probable that work is still
proceeding on the development
of prototypes of new models
which have not yet been put
into production on a signif-
icant scale,
Electric Power
q
Khrushchev has set his
sights on complete electrifica-I I
Leather Footwear mil pairs 332 210 63 259*
INDUSTRIAL OUTPUT: USSR AS PERCENTAGE
MID 1960 MID 1961
CRUDE 85 8x/? CRUDE OIL ELECT
STEEL POWER
40.1% 44% 33%
o
11 1 IM L_
SULFURIC ARTIFICIAL AND TRUCK
34.4%
3
% us
u unit s
220
85
RIC
35.5%
S AND
2%
23% 30%
26% 36%
OF US
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grew by less than 3 percent.
Output in excess of domestic
needs is increasing, and the
USSR is beginning to compete
in world oil markets. In 1960,
the USSR sold 19 million tons
of oil outside the bloc,4 mil-
lion more than in 1959. Oil
pipeline transport increased
23 percent in 1960, and a simi-
lar increase is apparently
planned for 1961. On the other
hand, although the Soviet petro-
leum industry gained on that
of the US in the past year and
gains steadily each year, pro-
duction planned for 1965 is
still well below that of the
US in 1958.
The USSR lags far behind
the US in production of natural
gas. While the ambitious So-
viet..plan was not fulfilled in
1960, the industry produced 10
billion cubic meters more than
in 1959. Again, in 1961, while
the gas industry is running be-
hind plan, an increase of 28
percent was achieved in the
first six months over the first
half of 1960,while US production
dropped by some nine billion
cubic meters. The continuing
Soviet plan shortfalls are due
mainly to inadequacies of stor-
age facilities, gas-consuming
equipment, and compressors for
pipelines rather than production
difficulties.
Chemicals
Despite ambitious plans the
USSR will have a difficult time
closing the gap between its own
production of chemicals and al-
lied products and that of the
US. The US has a much broader
base and is technologically far
ahead of the Soviet Union in
this field. While the record
of the past year shows impres-
sive gains in some areas--nota-
bly in artificial and synthetic
fibers--they can be attributed
largely to slowdowns in US pro-
duction rather than significant
increases in that of the USSR.
Consumer Goods
There were indications in
the midyear plan report of a
slowdown in the rate of growth
of Soviet light industry, which
has traditionally lagged dras-
tically behind the US consumer
industries. Little progress
was achieved in closing this
gap even though in many instances
US production fell off.
In the USSR less cotton
and linen fabric, for example,
were produced in the first six
months of 1961 than in the cor-
responding period of 1960. Pro-
duction of rayon and synthetic
fabric was only slightly above
that produced in the first six
months of 1960 and still con-
siderably below the output
achieved in the corresponding
period of 1959. The output of
wool fabric and leather footwear
increased in the first half of
1961 but at a rate below that
achieved in 1960. The USSR
outproduces the US in wool, but
the high quality of synthetic
fabrics in the US has decreased
the demand for wool in this coun-
try.
Continued progress was made
in increasing the output of con-
sumer durables even though lans
were not met , 25X1
25X1
CON MIfIAL
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CONFIDENIAL
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300040001-2