CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A003600080001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 46
• Document Creation Date: December 21, 2016
• Document Release Date: June 3, 2008
• Sequence Number: 1
• Publication Date: May 25, 1962
• Content Type: SUMMARY

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SECRET
VW
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 113
OCI NO. 0418/62
25 May 1962
CENTRAL INTELLIGENCE AGENCY
I I I OFFICE OF CURRENT INTELLIGENCE
SECRET
State Dept. review completed
ARMY review(s) completed.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 May 1962
T H E W E E K I N B R I E F
(Information as of 1200 EDT 24 May)
CHINESE REFUGEE PROBLEM AT HONG KONG . . . . . . . . . . . Page 1
The Chinese Communists., were apparently surprised: and
embarrassed by the scale of the exodus resulting from
their relaxation of emigration restrictions. By 21 May,
the daily figure for illegal entrants into Hong Kong had
exceeded 5,000 and the British authorities are having in-
creasing difficulties in handling the border crossers.
The Chinese Communists have indicated to British officials
that they now will attempt to halt the refugee flow. The
mass exits, however, began against a background of wide-
spread disaffection and.demoralization on the mainland, and
Peiping has yet to demonstrate its willingness to take the
harsh measures needed to bring the refugee flow under con-
trol.
LAOS . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3
Souvanna, en route to Laos to resume coalition talks,
has indicated that upon his return he will first seek an
audience with King Savang and, subsequently, convene a
meeting of the three princes at the Plaine des Jarres.
Phoumi, while declaring his readiness to enter negotiations
with Souvanna, still appears opposed to the formation of
. . . . . . . . . Page 5
Europeans in Algiers and Oran appear increasingly
aware Lhat OAS excesses are destroying their future in Al-
geria. 1
Meanwhile, the provisional Algerian govern-
ment, Yonder pressure to halt the slaughter of Moslems, may
be forced. by the forthcoming meeting of the National Revolu-
tionary Council to adopt a less cooperative attitude to-
ward implementation of the Evian accords.
SOVIET FOREIGN POLICY DEVELOPMENTS . . . . . . . . . . . . Page 6
During the past week, Moscow indicated that it would
defer any moves to bring the issue of Berlin and Germany
to a head, at least until further bilateral talks have been
held. In speeches during his Bulgarian visit, Khrushchev
warned the West against additional delays in reaching a
Berlin settlement and again raised the threat of a separate
peace treaty if no agreement with the West was reached.
The Soviet-Bulgarian communique indicated Moscow's interest
in continuing the US-Soviet talks and attempted to leave
the impression that West Germany, rather than the US, was
the main obstacle complicating the bilateral talks.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 May 1962
KHRUSHCHEV'S VISIT TO BULGARIA a . o o . . a . . . . . Page 9
One of the main reasons for Khrushchev's 14-20 May
visit to Bulgaria probably was to ensure support for Mos-
cow's decision to improve the Soviet bloc's relations with
Yugoslavia. His planned visit to Rumania in late June and
rumored later visits to other European satellites may have
a similar purpose. Khrushchev's intention to broaden
political, economic, and cultural contacts with Belgrade
suggests that he is indifferent to the views of Communist
China and Albania on this matter. Other important reasons
for the Bulgarian visit were to bolster Bulgarian leader
Zhivkov's de-Stalinization program and, to inspect the Bul-
garian economy.
SOUTH VIETNAM o 0 .
o . . 0 0 . . Page 12
The grenade throwings in Saigon on 17 and 19 May are
the first terrorist acts directed at Ainericans since the
attem at to kill the ambassador last July.
Recent propaganda from Hanoi
also suggests that Communist agents may try to provoke
incidents between American troops and 'Vietnamese citizens
in Saigon. Hanoi is trying to get Indian members of the
International Control Commission to modify a forthcoming
report which is expected to cite violations of the Geneva
accords by both North and South Vietnam.
CONGO a o 4 , o
o Page 13
Tshombd is back in Leopoldville for a third round of
talks with Adoula, but, despite UN representative Gardiner's
efforts, there has been no substantial change in the posi-
tion of either side. Pressure tactics and propaganda by
both sides suggest an early breakdown. Adoula appears to
be merely going through the motions of negotiation and to
be more interested in getting a firmer mandate for the UN
command or in obtaining help from the Afro-Asian states to
enable him to take new military action against Katanga
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25 May 1962
FURTHER CUBAN POLITICAL CHANGES . e, a o o a o 4 e n Page 14
Political changes further consolidating the position
of Fidel Castro and his brand of Communists at the expense
of veteran Communists have been made in Matanzas and prob-
ably other provinces.
These developments appear to be
a sequel to the denigration of veteran Communist Anibal
Escalante last March and his expulsion from leadership in
the dominant political machine.
ARGENTINA o . . . . . . . . . . . . . . . . , . . . . . Page 15
In an effort to end the political stalemate, the Guido
government on 20 May outlined its plan of action to return
the country to full constitutional rule. The plan calls
for electing a new Chamber of Deputies on 31 March 1963 and
a new president on 27 October 1963; meanwhile the political
parties would be reorganized and proportional representation
instituted. Guido's decrees recessing congress until 1963
and ordering party reorganization have prompted strong pro-
tests. Further political unrest is likely to result from
strikes planned to protest economic difficulties,
WEST GERMANY . o o a b o, o o,., e o. a o 0 4 0 o n? Page 16
While recent high-level US-German talks have removed
much of Bonn's misunderstanding overUS proposals on Berlin,
the US Embassy notes that it will take some time for the
wounds of the recent controversy to heal. Adenauer was heavily
criticized in the Federal Republic for his remarks in Ber-
lin--not so much for what he said as for poor judgment in
disrupting US-German relations---but his authority does not
appear to have been impaired by the controversy.
THE STRIKFS IN SPAIN o , , , o , , . . , a , 6 , , , , a M1 Page 17
The political opposition has increased its efforts to
exploit Spain's continuing labor unrest, but there is no
immediate threat to the regime. The government has taken
a relatively moderate attitude toward the strikes--which
are illegal in Spain-.but the Labor Ministry and other govern-
ment bodies concerned have been slow and apparently inept
in their efforts to deal with the strikes without violence.
Further wage pressure from labor is likely.
BRITISH OPINION ON THE COMMON MARKET 0 0, U G 0 m 4 e o a Page 18
There are signs of some shift in the British public's
attitude toward joining the Common Market--until now generally
favorable. The Labor party, although still officially uncom-
mitted, has been issuing increasingly critical statements.
A small group of Conservative backbenchers is launching a
drive designed to harden Commonwealth opposition and so arouse
British opinion as to kill the chances of entry. These develop-
ments are not giving serious trouble to the government but
may stiffen its defense of Commonwealth interests in the Brus-
sels negotiations.
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CUR FNT TNTELLIGFNCE WEEKLY SUMMARY
25 May 1962
CHINESE COMMUNISTS ENCOURAGING TRADE WITH THE WEST . . . . Page 18
Communist China is broadening its economic ties with
Western industrial countries and is seeking nonbloc bids
on a variety of development projects, including a major
hydroelectric project formerly being built with Soviet aid.
In addition, the Chinese have increased exchanges of com-
mercial missions with Western European countries and have
requested medium-term credits to finance imports of Western
industrial goods. China's trade with the USSR and the
European satellites has declined sharply in the past two
years, primarily because of China's economic disloc.tions
and the disruption of the Sino Soviet economic alliance.
INDIAN INTEREST IN BLOC AIRCRAFT .
. . . . . . . . . . .
India is negotiating with the USSR to buy high-perfor-
mance MIG-21 jet fighters, but no firm commitment has yet
been made. India's urgent need for supersonic fighters,
the failure of its own fighter project, the continued de-
cline in 'foreign exchange reserves and the ersuasi
e
Page 20
P k, V LA W ls
of Krishna Menon may ultimately outweigh concern over p
olit
ical
ical and economic repercussions in the West. polit-
MOROCCO-FRANCE . . . . . . . . . . . . . . . . . . . . . . Page 21
The meeting of Morocco's King Hassan with De Gaulle
on 10 and 11 May appears to have been the first step to-
ward close relations between the King and the French Govern-
ment. Negotiations are slated to begin in Paris this week
to work out details of an expanded cultural agreement and
economic, financial, and military assistance. Moroccan
leftists are likely to seize on the visit'to renew agita-
tion against the monarch, charging that the French pro-
tectorate is bein re-established in another form.
NAS IR' S CHARTER FOR THE UAR . . . . . . . . , , , . . . Page 22
Intended as a blueprint for long-term economic and
political development of the United Arab Republic, the
national charter announced by Nasir this week envisages a
socialist state under collective leadership. A gradual
extension of public ownership is contemplated, but pri-
vate economic activity will be retained in some areas,
including light industry and retail distribution. Foreign
private investment will be severe' limited.
AFTERMATH OF JAPANESE-SOVIET FISHERY PACT . . . . . . . . Page 23
The impact of increased restrictions on Japanese sal-
mon fishing in the northwest Pacific raises the possi-
bility that, rather than face an estimated 20-percent cut
in fleet operation, Japan may seek negotiations for ex-
panded operations in the convention area established by
the Japan-US-Canada tripartite fisheries reement.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 May 1962
PANAMANIAN PRESSURE TO RENEGOTIATE CANAL TREATY , . < . . Page 23
The acquisition of greater benefits from the Panama
Canal has long been the primary issue in Panama's domestic
politics and foreign relations, and internal pressures for
renegotiation of the treaty have been increasing notice-
ably in the past three years. President Chiari, in a
letter accepting an invitation to visit Washington in mid-
June for preliminary discussions of US--Panamanian relations,
attempted to make the invitation appear tantamount to US
agreement to renegotiate the treaty.
BOLIVIAN CONGRESSIONAL ELECTIONS
Page 25
Tha Nationalist Revolutionary Movement (MNR), which
has ruled Bolivia since the 1952 revolution, is likely to
retain majorities in both houses in congressional elections
scheduled for 3 June. Disaffection and apathy have increased,
however--in large part because the government-operated
sector of the Bolivian economy has failed to live up to the
expectations that had been raised by the revolution. The
MNR's loss of popularity, particularly in the capital, is
such that it may be able to maintain its ascendancy over
more conservative groups only by resorting to extensive
electoral fraud.
ECUADOR
Page 26
The congressional elections in Ecuador scheduled for
3 June are expected to result in another rightist majority.
The campaigning has been overshadowed in public interest,
however, by President Arosemena's various cabinet changes.
He has dismissed extremists of both right and left In an
effort to increase his freedom to push his social reform
program.
CZECHOSLOVAKIA: INCREASED DIFFICULTIES IN THE "MODEL
SATELLITE" , , , , m , a o , o o o , . o , , , . Page 1
Czechoslovakia, long the "model satellite" because
of its economic growth and political stability, has been
beset with economic difficulties for the past year. The
growth rate for industrial production has declined, agricul-
ture is stagnant, quality foods are in short supply, and
increased imports reduced the 1961 export surplus and con-
tributed to a shortage of foreign exchange. Although there
have been signs of some improvement in the economy, cer-
tain 1962 production goals have already been lowered, and
the regime will probably have to reduce the planned rate
of growth through 1965. Food shortages have led to several
small-scale riots, a form of protest rarely resorted to by
the Czechoslovaks. The present level of popular discon-
tent does not appear to pose a threat to the regime's sta-
bility.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 May 1962
THE WEST BERLIN ECONOMY , o , , , 4 , o 0 0 0 ? , m . , , Page 5
In the nine months since the Communist wall was built,
West Berlin's industrial output has generally held firm.
Private savings deposits have showh recent gains, and last'
fall's population outflow has been reversed. Labor shortage
is a continuing problem, however, and there has been some
decline in investment and in new industrial orders. West
Germany has provided emergency grants, but has not made the
commitment to long-term assistance which Berliners want
EUROPEAN SPACE DEVELOPMENTS . . a . , m . e . Page 8
Eleven West European countries, after a year and a
half of effort, have agreed to create a European Space Re-
search Organization (ESRO). By,pooling talents and funds,
ESRO should assist Western Europe in maintaining and
developing its scientific stature and in acquiring the
technology essential to "full-scale participation in the
space age. Six of the ESRO countries plus Australia have
been members since April of the European Launcher Develop-
ment Organization (ELDO), which is developing a three-
stage launching vehicle utilizing Britain's Blue Streak
booster. This vehicle is expected to be used for the
latter phases of ESRO's initial space program, although
it will be less advanced than existing US vehicles. The
ELDO project could also contribute to the development of
military capabilities by individual countries in the M18 -
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CURRENT INTELLIGENCE WEEKLY SUMMARY
WEEKLY REVIEW
CHINESE REFUGEE PROBLEM AT HONG KONG
The Hon Kon overnment
has learned
at the Communist
ecis on to relax restrictions
on emigration to Hong Kong
was made in Peiping last
month as a result of popular
pressures inside China and
complaints Overseas Chi-
nese.
the Communist au-
thorities had decided to allow
persons to leave for Hong Kong
so they could learn for them-
selves that they were not wel-
come there. Accordingly the
Chinese had freely issued exit
permits and directed border
guards not to prevent entry
into the colony.
This decision apparently
represented a miscalculation
of the degree of popular dis-
satisfaction;
officia s
had been surprised at the num-
bers of persons trying to leave
China and at the persistence
of the border crossers in the
face of British efforts to
turn them back.
China's embarrassment over
the size of the exodus--some
5,300 were caught by the Hong
Kong police on 21 May--prob-
ably caused some rethinking
of the problem in Peiping;
the British state that they
now have received assurances
that the Chinese Communists
will attempt to halt the flow
of refugees.
The mass exits, however,
began against a background
of widespread disaffection and
demoralization on the mainland,
and the British are uncertain 25X1
about Peiping's ability to
bring the refugee flow back
under control. The dissatis-
faction may also have infected
the security forces which have
observed the mass refugee
flights of recent weeks. Hong
Kong authorities, however,
have denied rumors that any
security or army units have
entered the colony along with
the refugees.
Meanwhile, the Hong Kong
government has reinforced the
fences along the 18-mile land
border that divides the colony
from the mainland and is using
helicopters to help locate
groups of refugees hiding in
the undergrowth-on the Brit-
ish, side. Despite such ef-
forts, local officials be-
lieve that large numbers of
border crossers, at least 15
percent, have eluded capture,
often with the help of Hong
Kong residents.
No major incidents have
occurred to date, but the
authorities remain apprehen-
sive. The refugees, many
of whom have made several
attempts to enter the colony,
are becoming more difficult
to handle; the Hong Kong bor-
der guards, reinforced with
Gurkhas and some British troops,
have had little rest in the
last two weeks. Resistance
among the refugees may increase
shay-ply as they realize that
their return to China could
mean arrest.
The principal clashes
so far, however, have been
between the police and the
Hong Kong Chinese, many of
whom hope to find relatives
among the refugees. Local
sympathy for the border cross-
ers could generate a difficult
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NUMBER OF BORDER CROSSERS ARRESTED BY HONG KONG GOVERNMENT
DAILY AVERAGE
(1?S MY)
DAILY AVERAGE
(6-10 MAY)
security problem for the Brit-
ish authorities. To minimize
the chance of incidents, the
escapees now are being sent
back in closed trains rather
than truck convoys.
Most of the refugees are
peasants living within a rel-
atively short radius of Hong
Hong, although in the past few
days there has been a growing
number of Canton residents
among the border crossers,
including dissaffected students.
Hunger or the fear of hunger
to come remains the principal
reason for trying to leave the
mainland. Precipitation this
spring was below normal, and
the harvest prospects in much
of Kwangtung are not good.
The American consul gen-
eral in Hong Kong believes that
discipline among local Commu-
nist cadres has been badly
eroded by mounting public criti-
cism of policy failures. Local
officials may have shrunk from
attempting to maintain disci-
pline when faced with increas-
ing pressures among the people
to flee to Hong Kong--as has
been done before in bad times.
The Chinese Nationalist
Government is attempting to ex-
ploit the refugee problem for
political gain. Nationalist of-
ficials have criticized the Hong
Kong government for repatriating
the refugees to Communist China.
Vice President Chen Cheng on 21
May said that the Nationalists
would accept all refugees who
wished to come to Taiwan. Before
admitting any refugees, however,
Taipei will probably insist on
official negotiations with the
British Government,, which recog-
nizes Peiping, and will delay ac-
ceptance of any large number in
order to screen out political un-25X1
desirables.
There is
no indication t at Peiping wants
to exploit the refugee problem to
threaten British control of Hong
Kong at this time. Exports to
the colony provide one of the
principal means by which the Com-
munists can acquire badly needed
hard currencies, and Hong Kong's
well-developed financial facili- 25X1
ties have proved useful to Pei-
ping; in its trade with the free
world.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Souvanna Phouma, returning
to Laos after a seven-week visit
in France, has stopped off in
Rangoon to confer with several
key aides who flew to the Burmese
capital for this purpose. Pre-
sumably, they will brief him on
the recent take-over of Nam Tha
and Muong Sing by Pathet Lao
and North Vietnamese forces
without the participation of
Souvanna's troops--actions he
condemned as contrary to his
instructions.
Souvanna, who has expressed
his concern over the deteriorat-
ing political and military sit-
uation, will probably seek an
early meeting with King Savang,
to be followed by tripartite
talks at the Plaine des Jarres.
In any negotiations, Souvanna
will probably press for a balanced
apportionment between the Boun
Oum and Souphannouvong factions
of technical and political
ministries, while reserving for
himself the key posts of defense
and interior in addition to the
premiership. Souvanna has in-
dicated he would agree that
"important decisions" concerning
defense and interior be con-
curred in by all three princes.
General Phoumi has returned
from a "goodwill" mission to
TaiLpei, where he received con-
siderable encouragement but
probably little in the way of
materiel commitment. He now
has agreed to enter negotiations
toward a coalition government
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CURRENT INTELLIGENCE WEEKLY SUMMARY
under Souvanna in which the
neutralist leader would hold
the defense and interior posts.
However, this conciliatory man-
ner is probably designed to-ease
Western and Thai pressure while
Phoumi consolidates his posi-
tion in the south.
The military situation re-
mains relatively quiet. However,
Communist leaders may feel that
is view of Phoumi's transfer of
troops to the Southern Area Com-
mand--a move which threatens
Communist supply routes to
the Viet Cong--preventive mili-
tary action may be necessary.
Bloc propaganda last week
continued to attack the
movement of US troop,
I and to make o bliq e
rea s that any intervention
in Laos by these troops would
lead to increased bloodshed.
Such statements were combined
with claims that all the
"neutralist" and Communist forces
want coalition negotiations.
In an 18 May speech at
Obnova, in Bulgaria, Khrushchev
asserted that the decision to
land troops is
unwise and wiii not ead to
peace in that part of the
world. He added that the Soviet
Government considers the most
sensible course in Laos would
be to adhere to the already
ag:reed method of forming a
coalition government headed by
Souvanna Phouma. This was
followed by a 20 May article
in Pravda by Observer which
warned against SEATO inter-
vention in Laos, since this
would be "collective interven-
tion and is bound to evoke
retaliatory action on the
other side." At the same time,
they article reaffirmed the
Soviet desire for an "independ-
ent, neutral" Laos.
The strongest Chinese
reaction to the landing of
troops carne in a 19 May People's
Daily editorial, repeated by
TA-3 3-, which sharply stepped up
the urgency given the situation 25X1
by a Chinese Communist commentary 25X1
three days earlier. The editorial
charged that "US aggressive moves
in southeast Asia are a serious
threat to the security of China.
The Chinese people cannot remain
indifferent to this...." Al-
though there was no mention in
this editorial of a coalition
government headed by Souvanna
Phouma, Peiping continues to
report Pathet Lao and neutralist
statements backing the forma-
tion of a coalition. Peiping,
however, is also publicizing
statements suggesting that the
Pathet Lao may insist on US
withdrawal from Laos as a
condition for negotiations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Europeans in Algiers and Joxe's reported arrangement to
Oran appear increasingly aware draft by 1 June 6,000 European
that the excesses of the Secret 19--year-olds in Algiers and
Army Organization (OAS) are Oran will probably curb most of 25X1
destroying their future in Al- the young toughs presumably
geria. responsible for the bulk of pres-
ent OAS terrorism.
Meanwhile,
the provisional Algerian govern-
ment (PAG), under pressure to
halt the slaughter of Moslems,
may be forced by the forthcoming
meeting of the National Revolu-
tionary Council (CNRA) to adopt
a less cooperative attitude
toward implementation of the
Evian accords.
Jacques Chevallier, an ex-
mayor of Algiers, told a US
Embassy officer in Paris on 15
May that he thought the PAG
might be receptive to any prop-
osition that would divert OAS
energies from terrorism.
French High Commissioner
Fouchet is said to be losing
patience with the Europeans,
and has given the impression
that the government is deter-
mined to make them suffer, even
though many have given only pas-
sive assistance to the OAS.
Minister for Algerian Affairs
The US consul general in
Algiers predicts that European
departures from Algeria--now in-
creasing sharply despite OAS
harassments--will assume fairly
massive proportions by mid-June.
The presence of these embittered
persons in France, coupled with
the likelihood of stepped-up
OAS activity in the metropole,
will create a serious security
problem for the government. If
many technicians or civil serv-
ants are among those leaving
Algeria, their departure will
increase the difficulties the
new Algerian government will
face following the referendum
in July, when it takes over a
virtually paralyzed administration
and a disrupted economy.
Recent PAG demands for
stepped-up anti-OAS measures,
particularly for the employment
of greater numbers of Moslem
troops and police, probably re-
flect sensitivity concerning
the CNRA meeting reportedly to
begin in Tripoli this weekend.
Reports from Algiers indicate
that there is great pressure from
the Moslem masses for an imme-
diate improvement in the situa-
tion, and that nationalist leaders
in Algeria and the FAG are at-
tempting to adjust their policies
to meet this pressure. Although
Paris appears to have agreed to
at least some of the PAG demands,
there are indications that
French security forces will re-
tain the major role in combating
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET FOREIGN POLICY DEVELOPMENTS
During the past week, while
the USSR bluntly restated its
fundamental position on Berlin
and Germany, there were continued
indications that Moscow would
defer any new moves to bring
the issue to a head, at least
until further bilateral talks
have been held. During his visit
to Bulgaria, Khrushchev spoke at
length on international affairs.
The Soviet-Bulgarian communi-
que published on 20 May underscored
Moscow's interest in continuing
the talks but pointed up the
Soviet desire to move the dis-
cussions off dead center. The
communique reiterated the USSR's
denunciation of the NATO minis-
terial meeting in Athens and
implied that any nuclear arming
of West Germany would lead to
disaster. The statement repeated
Moscow's basic position that any
agreement on an international
access authority for West Berlin
can be reached only after the
"liquidation of the occupation
regime" and the withdrawal of
Western forces. It maintained
that an agreement could be reached
whereby small troop contingents
of neutral states or the UN
could be stationed in West Berlin
"for a definite period of time."
The statement pointed out,
however, the "benefit of con-
tacts" between the US and the
Soviet Union on the German ques-
tion and attempted to leave the
impression that West Germany,
rather than the US, was the main
obstacle complicating the US-
Soviet talks. Khrushchev sought
to inject a sense Of urgency in
the bilateral talks. He warned
against further delays in reach-
ing a Berlin settlement and
again raised the threat of a
separate peace treaty with East
Germany if no agreement with
the West was reached. He did
not, however, set a time limit.
Soviet press commentary on
President Kennedy's 17 May news
conference also emphasized the
point that despite the US-French
disagreement on the Berlin is-
sue--which TASS alleges the
President tried to play down--
and continuing US discussions
with West German leaders, the
US still intends to continue
talks with the USSR on the Ger-
man problem. A 19 May Pravda
commentary on Berlin also a n-
tained that West German circles
were the main stumbling block
to a "joint agreement" on the
liquidation of the foreign
occupation of West Berlin. The
article repeated the Communist
stand that any international
access authority for West Berlin
could act only as "arbiter"
in case misunderstandings arose
over the "implementation of an
agreement with East Germany on
communications with West Berlin."
Walter Ulbricht reiterated
this position during his trip
to Czechoslovakia last week and,
while welcoming the US-Soviet
talks as "constructive," main-
tained that his regime would
not relinquish any of its
sovereignty in favor of the type
of international control authority
being proposed by the Western
powers.
In the first substantive
discussion on restoring normal
relations between the US and
Soviet commandants in Berlin,
General Solovyev proposed on
17 May that the impasse could
be resolved simply by lifting
the bans which had been imposed
on their travel across the sec-
tor border. He repeatedly
stressed that the USSR could not
discuss changes in the laws of
the "sovereign German Democratic
Republic." After the bans were
lifted, he said, civilian advisers
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CURRENT INTELLIGENCE WEEKLY SUMMARY
accompanying the US commandant
on visits to East Berlin would
be required to show their
identification, in accordance
with East German regulations.
After further emphasizing
thier position that East German
sovereign control over its
borders is not negotiable, the
Soviets eventually may permit
uncontrolled sector crossings
by the US commandant accompanied
by civilian aides of his choice.
The Soviet political adviser in
early April indicated interest
in such a formula, first proposed
by the British commandant last
January.
Continuing Soviet interest
in removing this local irritant
to Soviet-US relations in Berlin
was reflected in a recent remark
by an official of the Soviet
Embassy in East Berlin that US-
Soviet negotiations on the Berlin
issue as a whole were progressing
slowly but satisfactorily and
that this "minor fact" of the
Berlin problem should be settled
on the military rather than the
diplomatic level.
The Soviets and East Germans
continue to refrain from harass-
ing US Military Liaison Mission
teams in East Germany. However,
the Soviets are continuing
sporadic interference with Allied
military convoys at the Autobahn
checkpoints.
Moscow appears to be at-
tempting to establish as a
regular procedure the practice
of advance notice for Allied
convoys using the Autobahn--
an effort to underscore its
contention that Allied access
depends on Communist sufference.
The five-hour "official deten-
tion" of a six-vehicle US con-
voy at Babelsberg on 23 May
was the longest such delay in
recent years. After the con-
voy traveled the Autobahn, it
was held up for another hour
at the Marienborn checkpoint
on the East - West German bor-
der. Both delays followed a
shorter, unofficial detention
of a US convoy at Marienborn
on 20 May and the turnback of
a French military bus at the
Berlin end of the Autobahn on
18 May.
Any sustained and consist-
ent increase in harassment of
Allied military convoys on the
Autobahn probably would be de-
signed to support recent Soviet
political and propaganda efforts
to :inject a sense of urgency
in bilateral talks on Berlin and
Germany. There is no indication
at present that Moscow is will-
ing to risk jeopardizing these
talks by, a clear-cut challenge
to Western access rights.
Disarmament and Nuclear Issues
Khrushchev used his speeches
in Bulgaria to reaffirm in
routine terms Soviet interest
in an agreement on general and
complete disarmament. In a
speech of 18 May at Obnova,
he sarcastically referred to the
current deliberations in Geneva,
noting that the conference dele-
gates sit and drink more tea than
work. He accused the Western
delegates of paying only lip
service to disarmament and termed
the situation "a sorry state of
affairs." The Soviet-Bulgarian
comm.uniqud briefly endorsed So-
viet disarmament proposals and
the recent compromise test ban
proposal advanced by the neu-
tralists. The communique also
said that the Western powers
at Geneva show "very little evi-
dence" of a desire to reach
agreement on a test ban and ex-
pose themselves as "enemies" of
general and complete disarmament.
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According to the US dele-
gation at Geneva, Soviet bloc
delegates appear to be develop-
ing a unified and direct attack
on the US disarmament plan and
to be embarking on a series of
studied, "phony questions which
cannot be satisfactorily an-
swered" by the US delegate,
particularly with respect to
controls. In corridor con-
versations with other delegation
members, bloc delegates seem
to be emphasizing the irrecon-
cilability between the US and
Soviet positions.
There is no indication,
however, of Soviet intent at
present to break off the 17-
nation conference; chief delegate
Zorin's recent expression of
willingness to continue the
conference without a recess and
First Deputy Foreign Minister
Kuznetsov's recent statement
to a US official that he may
soon replace Zorin temporarily
suggest that the USSR intends,
for the time being at least, to
continue to participate. It
would be considerably more diffi-
cult for the Soviets without
prejudice to leave the current
conference, in which nonaligned
powers are taking part, than
in previous negotiations in 1957
and 1960.
After Khrushchev's remark
to Western newsmen at Varna,
Bulgaria, that the current US
tests will "force" the USSR
to renew nuclear testing, a West-
ern correspondent asked Foreign
Minister Gromyko about Soviet
test plans. Gromyko said,'"We
shall certainly resume testing,"
but he refused to say when.
Soviet sensitivity to US
statements concerning the
ability to wipe out the USSR
with a nuclear strike was further
reflected by Khrushchev in a
speech in Sofia on 19 May. Khru-
shchev made his first public
comments on President Kennedy's
statement last March to Stewart
Alsop concerning conditions un-
der which the US might use nu-
clear weapons first against the
USSR. The statement had been
promptly denounced in the So-
viEet press.
Khrushchev said that while
the President had tried to
soften his words, once spoken
they could not be called back.
He asked if the President's
words did not indicate that
Kennedy and Khrushchev should
engage in competition "as to
who will be the first to
press the button." The So-
viet premier termed this in-
human and unreasonable; he
accused President Kennedy of
"following the way of his
predecessor on the road of
threats"; and he warned that
the Soviet Union had the
means to answer "with a
crushing blow." 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
KHRUSHCHEV'S VISIT TO BULGARIA
One of the main reasons for
Khrushchev's 14-20 May visit to
Bulgaria was probably to ensure
support for Moscow's decision
to improve the Soviet bloc's
relations with Yugoslavia. His
planned visit to Rumania in
late June and rumored later
visits to other European satel-
lites may have a similar purpose.
Other important reasons for the
Bulgarian visit were to bolster
Bulgarian leader Zhivkov's de-
Stalinization program and to in-
spect the Bulgarian economy.
A key to the motivation
behind the trip was the inclu-
sion'in Khrushchev's ten-man
delegation of Foreign Minister
Gromyko, who had just returned
from a visit to Yugoslavia in
late April. The groundwork for
the Khrushchev visit to Bulgaria
was probably laid by the Soviet
party's agitprop spokesman,
Leonid Ilichev, who attended an
ideological conference in the
satellite on 23-24 April. This
visit was the starting point
for a notable shift in emphasis
in Bulgarian propaganda. Pre-
viously it had tended to restrict
the anti-Stalin campaign to de-
personalized strictures against
the personality cult and--re-
flecting Bulgaria's traditional
preoccupation with its neighbor,
Yugoslavia--had focused on the
dangers of revisionism to the
virtual minimization of the
dangers of dogmatism. After the
visit, the propaganda turned
strongly against "dogmatism and
sectarianism" and pushed the
dangers of revisionism to the
background.
Khrushchev followed the
start made by Ilichev by prais-
ing the greatly improved Soviet
state relations with Yugoslavia.
In his 16 May speech at Varna,
he noted with ""satisfaction" that
present relations are "good"
in contrast to the "tense" re-
lations of the past. He stated
that the USSR is prepared to
expand economic, cultural, and
scientific relations with
Yugoslavia, and to exchange
"delegations." Plans for a
visit sometime in June of the
first Yugoslav parliamentary
delegation to Moscow since 1956
were announced by Belgrade on
23 May. It will be a 12-man
group led by Petar Stambolic,
chairman of the Federal People's
Assembly and member of the Com-
munist party's executive com-
mittee.
Khrushchev admitted the
persistence of differences on
a number of ideological and
political--problems, but de-
scribed improved state relations
as being in the interests of
peace and of helping the Yugo-
slav people "consolidate them-
selves regarding socialism."
Major concessions which Moscow
might grant Belgrade would be
observer status on the bloc's
economic organization, CEMA,
and possibly the extension of
bloc. economic credits. Khru-
shchev's reservations on
ideological differences would
appear to preclude the re-
establishment of Communist
party contacts at this time.
Satellite leaders are
probably wary of improved
bloc relations with Yugoslavia
because of the unsettling
effects on their parties of
the last period of rapproche-
ment in 1955-57. They may
be pressed by moderate elements
in their parties who would inter-
pret a new bloc line toward
Yugoslavia as a vindication of
Tito's brand of Communism and
a signal to pressure on their
own ,behalf for greater independ-
ence from Moscow. Satellite
leaders are also likely to be
pressed by hard-line elements
in their parties who believe
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CURRENT INTELLIGENCE WEEKLY SUMMARY
that the Chinese and Albanian
statements concerning Khrushchev's
pro-revisionist leanings have
been proven correct.
In the Bulgarian party,
there are also historical dif-
ficulties to contend with.
Khrushchev's favorable refer-
ences to Yugoslavia's war rec-
ord and acknowledgment of its
size and importance probably re-
vive the traditional Bulgarian
fears of a Yugoslav hegemony
among Balkan Communist states.
Nevertheless, Zhivkov finally
gave grudging approval to
Khrushchev's remarks at Varna
through which he reportedly sat
with a stony expression. Al-
though he did not echo Khru-
shchev's new line on Yugoslavia
until 19 May, he asserted then
that "we will continue to do all
that is required of us to develop
Bulgarian-Yugoslav cooperation..."
The reaction of Communist
China and Albania to Khrushchev's
Bulgarian visit reflects their
recognition of his indifference
to their opposition to any im-
provement in bloc-Yugoslav re-
lations. The day after Khru-
shchev's Varna speech, the
leading Albanian paper commented
at length on Tito's 6 May speech
candidly spelling out Yugoslavia's
economic difficulties. The paper
noted that Yugoslav internal and
foreign policies merely affirm
the correctness of Stalin's
anathema of Tito, and stressed
the "illusionary" nature of any
hopes that Tito will correct his
errors. The Chinese threatened
the entire Khrushchev visit cur-
sorily, as they have treated the
visits of all other Soviet dele-
gations abroad in the last, two
years. In summarizing the Varna
speech, the Chinese press reversed
the order of Khrushchev's
remarks on Southeast Asia and
Yugoslavia--giving the former
first place--thus making clear
Peiping's views on which is
the more important.
Khrushchev went first to
Bulgaria to expound his Yugoslav
policy because Bulgaria tradi-
tionally has played an important
role in bloc policy toward
Yugoslavia, and because of the
many Stalinists in the Bulgarian
party. Khrushchev's second most
important task in Bulgaria,
therefore, was to support the
de-Stalinization efforts of his
protege, Zhivkov. Khrushchev
went out of his way in the many
speeches he made around the
Bulgarian countryside to demon-
strate his esteem for Zhivkov.
He said that the Soviet leader-
ship had welcomed Zhivkov's elec-
tion as first secretary in 1954,
and that since that time he has
done much toward eliminating from
the regime abuses that had crept
in during the Stalin era. Khru-
shch.ev found frequent occasion
to state that the Soviet party
and government maintain the
closest relations with Zhivkov
and Premier Yugov.
Khrushchev's support should
assist Zhivkov in suppressing any
challenge from the numerous hard-
liners in the Bulgarian party
before its next congress, sched-
uled for late August. Prior to 25X1
the Khrushchev visit, Zhivkov's
efforts to repress the hard-liners
appeared to be faltering.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOUTH VIETNAM
Grenade throwings in Saigon
on 17 and 19 May--in which three
Americans, two Germans, and
several Vietnamese were injured--
are the first acts of terrorism
apparently directed at Americans
since the attempt to kill the
American ambassador last July
earc es by Saigon police have
yielded some 300 pounds of ex-
plosives in the past few weeks.
It is also possible that
the Viet Cong will try to provoke
incidents between Americans and
Vietnamese citizens. Recent
North Vietnamese propaganda has
painted a picture of growing
antagonism, claiming that
several American soldiers have
been beaten up on the streets
of Saigon.
Hanoi, sensitive to exposure
of its direction of the Viet
Cong, is trying to get Indian
members of the International Con-
trol Commission (ICC) to block 25X1
or at least modify a pending
commission report which will
condemn North Vietnam for sub-
version in the South, and South
Vietnam for violating the Geneva
accords' ban on introduction of
new weapons and military per-
sonnel. North Vietnam's army
chief, General Giap, has written
Partthasarathi, Indian chairman
of the ICC in Vietnam, warning
that the proposed report would
be a "grave offense" against the
Vietnamese people and asking in-
steaad for ICC condemnation of US
actions in South Vietnam. Hanoi's
official party newspaper on 22 May
attacked Parthasarathi for turning
a blind eye to US aggression while25X1
slandering the "patriotic movement"
in South Vietnam as Communist sub-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
UN representative Gardiner,
despite strenuous efforts in
the month since the second round
of the Adoula-Tshombd talks
ended in mid-April, has not been
able to narrow substantially the
differences between the two lead-
ers. Adoula has called Tshombe's
latest proposals "totally un-
acceptable." The Katangan leader
--now back in Leopoldville--has
asked that a new constitution,
to be approved by parliament and
submitted to a national referen-
dum, be drawn up providing for
"real autonomy" for the provinces;
until then, Tshomb6 states,
Katanga will remain separate.
Premier Adoula has insisted,
however, that Leopoldville will
not consider any transitional
period for Katanga's reintegra-
tion, and that Tshombd must
submit completely to the Belgian-
drafted constitution, the Loi
Pondamentale.
Gardiner, who will continue
to mediate but is reported deeply
discouraged, aims to get the two
to indicate general agreement in
a communique after the present
round of talks and to relegate
the specifics of reintegration
to a series of joint commissions
headed by UN officials. Tshomb6
has indicated he is willing to
proceed in this manner.. Adoula
at first stated flatly that only
his proposal of 16 April provid-
ing for strong centralized con-
trol can be the basis of the
talks, but when the two resumed
discussions on 22 May he also
agreed to Gardiner's procedural
suggestions. The atmosphere sur-
rounding the talks has been one
of charge and countercharge and
of propaganda gambits and pres-
sure tactics by both sides, sug-
gesting that an early breakdown
may occur.
Adoula's attitude and ac-
tions suggest that he regards
the talks as futile. His appeals
for assistance from Afro-Asian
states outside the UN framework
have not produced any visible
benefits to date, but his appar-
ent lack of concern about a
breakdown suggests he may have
some commitments. Adoula's
stalling may also be connected
with his interest in a renewed
discussion of the Congo in the
Security Council--which he hopes
would produce a tougher UN man-
date to support Leopoldville.
U Thant has indicated that a
Security Council meeting on the
Congo at the end of May might be
required "to seek further guid-
ance." The Soviet charge in
Leopoldville, who has been quiet
up to now, visited Gardiner twice
in one day last week to complain
of the UN's inability to resolve
Katanga's secession and to sug-
gest that another Security Council
mandate seemed required.
Adoula has previously said
that if no agreement is reached
with Tshomb6, he will have no
alternative but to renew hostili-
ties in northern Katanga. Adoula's
growing propensity to think in
terms of force is indicated by
his recent efforts to purchase
four A-26 aircraft in the US.
He has, moreover, insisted that
"Congo national sovereignty"
required that negotiations for
these aircraft be conducted out-
side the UN framework.
The chief of the Congolese
Army, General Mobutu, has just
completed a tour of inspection
in eastern Congo and northern
Katanga with General Lundula.
Mobutu will be in Europe from
25 May until about the second
week of June. While his. absence
may delay any military moves, it
also increases the danger of rash
action by the military, either 25X1
in northern Katanga, or in
Leopoldville against Tshomb6
personally.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
FURTHER CUBAN POLITICAL CHANGES
Political changes further
consolidating the position of
Fidel Castro and his brand of
Communists at the expense of
veteran Communists have been
made at the provincial levels
in Cuba and reportedly will
occur at the national level as
well. These developments ap-
pear to be a sequel to the
denigration last March of
veteran Communist Anibal Es-
calante and his expulsion from
the National Directorate of
the Integrated Revolutionary
Organizations (ORI), Cuba's
developing single political
machine.
In Matanzas, long-time
Communist Leonidas Calderio
was recently replaced as
secretary general of the provin-
cial ORI directorate by Major
Jorge Serguera, a "new Communist"
long closely associated with
the Castro brothers. Calderio
is a brother of Blas Roca (born
Francisco Calderio), ranking vet-
eran Communist on the ORI
National Directorate and direc-
tor of the party newspaper Hoy.
Castro seemed to go out of Ti'lls'
way to avoid antagonizing Roca.
Calderio's removal was said to
be for health reasons, and
Castro excused Calderio for
party failures in Matanzas by
acribing them to the "sectarian-
ism" fostered by Escalante.
Thus, while the removal of his
brother from the key provincial
post would appear to weaken
Roca's position, he does not
appear to be immediately threat-,
ened with a like fate.
A Havana radiobroadcast
of 23 May reports a number of
changes in municipal ORI units
in Matanzas Province following
Calderio's retirement as provin-
cial party leader.
Changes are known to have
taken place in the provincial
ORI directorates in Camaguey
and Havana provinces, but no
details are available. Until
the recent changes, veteran
Communists had been secretaries
general of both the ORI and
the JUCEI (governmental organiza-
tion) in each of Cuba's six
provinces.
At the national level, Castro
has attacked veteran Communist
Lazaro Pena
Cuban Communist labor boss for
nearly 30 years, Pena now is
also a member of the ORI National
Directorate. Last year he was
named a vice president of the
Communists' World Federation of
Trade Unions. He would be a
logical victim if Castro were
seeking to undercut the power
of other veteran Communists or
to use them as scapegoats for
the regime's failures. Pena
is probably the focus for much
of the dissatisfaction among
organized workers, especially
in the cities, and Castro would
probably gain popularity by
denouncing Pena for his "errors."
The CTC-R under Pena's
direction was given important
responsibilities in the assign-
ment of housing under the urban
reform law, and Castro report-
edly intends to oust him on
grounds of unfairness and in-
efficiency in discharging these
responsibilities. Pena is also
vulnerable for his close collab-
oration with Batista during
the dictator's 1940-44 term.
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Now
CURRENT INTELLIGENCE WEEKLY SUMMARY
In an effort to end Argen-
tina's political stalemate, the
Guido government on 20 May out-
lined its plan of action to
return the country to full
constitutional rule. The plan
calls for electing a new Chamber
of Deputies on 31 March 1963 and
for presidential, provincial,
and municipal elections on 27
October 1963. The latter date
may be advanced to 31 May 1963
"if circumstances permit." The
plan limits the term of the
present government to 30 April
1964, the scheduled end of
ex-President Frondizi's term.
Political reforms under the
plan are similar to those which
leaders of Frondizi's Intran-
sigent Radical party (UCRI)
negotiated with the military
before Guido took office. They
envisage adopting proportional
representation, outlawing
totalitarian parties, and en-
couraging the badly split
democratic groups to unite.
Steps will be taken to ban the
use of trade union funds for
political purposes, as has been
the custom of the Peronistas.
Guido's first steps to
implement the political plan
were two decrees on 20 May
recessing congress until a new
Chamber is elected and order-
ing political parties to re-
organize within 120 days after
the new law on political par-
ties is published. Guido said
the government would observe
the constitution insofar as
was possible during the "non-
functioning" of the congress
because of lack of a quorum.
He stated that the revision
of the statute on political
parties would prevent the
existence of totalitarian
civic groups and facilitate
the -Formation of strong demo-
crat_Lc parties.
Argentine reaction to
these decrees has been mixed,
even within parties. Although
lacking a quorum, some 65
deputies tried on 22 May to
hold a minority session, which
was marked by fistfights and
vituperative oratory. The
government's critics have not
suggested alternate plans.
The independent daily La Nacion
commented, "Any plan is better
than the state of restlessness
which the absence of a plan
generates."
Further political unrest
is being created by strikes to
protest rising living costs,
unemployment, and nonpayment
of wages. The drop in in-
dustrial production to some
10 to 15 percent below the
comparable 1961 level has
idled about 100,000 workers
in recent weeks, and many others
are on shortened weeks. Other
reductions are planned if
business does not improve soon.
The railway strike on 21 May
was reported effective, and
general strikes are planned
for 29 May and 18-19 June.
Peronista and other opposition
groups may try to exploit eco-
nomic,difficulties to promote
subversive strikes.
ments agreement with the USSR.
Economy Minister Alsogaray's
measures to attack the financial
crisis may add to unrest. His
postponing payment of salaries of
government and military personnel
for two months was one of the
reasons for the railway workers'
strike. Military expenses are
also being cut. The government
cited the need to promote multi-
lateral trade and free enterprise
as its reason for denouncing on 18
May its 1953 bilateral trade and pay-
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While recent high-level
US-German talks have succeeded
in removing much of Bonn's mis-
understanding over US Berlin
proposals, a restoration of full
confidence and agreement on
"details" of Berlin policy are
still remote. The US Embassy
notes that it will take some
time for the wounds of the recent
controversy to heal. The Bundes-
tag leader of the Bavarian affil-
iate of Adenauer's Christian
Democratic Union (CDU) told US
officials on 15 May that "deep-
seated mutual irritation" could
soon lead to a new flare-up.
Although the opposition
Social Democratic party (SPD)
and the coalition Free Democratic
party (FDP) generally support the
US approach to Moscow, a group
within the CDU continues to op-
pose the US plans, chiefly on
grounds that they overly enhance
East Germany's status.
Adenauer, in taking a public
stand in Berlin against specific
points in the US position, struck
a popular note among most CDU
Rundestag members. Even his sup-
porters, however, criticized his
use of a public forum for this
purpose. The German press was
heavily critical of Adenauer,
not so much for the actual
position he took as for poor
judgment in disrupting US-German
relations. SPD leaders attacked
him for "petty fault-finding"
with Washington and accused him
of "losing his perspective."
Adenauer's authority does not
appear to have been impaired by
the controversy, however.
Recently Adenauer has stressed
publicly the importance of
America to West German security,
and rejected rumors of an im-
pending Bonn-Paris alliance by
asserting that while Europe's
influence in world aff,Rirs must
be preserved, Europe should not
set. up a defense community
separate from the US. His pub-
lic; assertions that "normal
cordial relations" with the US
have been restored have prob-
ably been motivated in part
by a desire to answer his
critics and to limit possible
SPI) exploitation of German-
American differences in the
impending election campaign in
the., important state of North
Rhine - Westphalia. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The political opposition
has increased its efforts to
exploit Spain's continuing
labor unrest, but there is no
immediate threat to the regime.
The relative moderation with
which the government has dealt
with the strikes--which are
illegal in Spain--will probably
inspire further labor pressure.
The regime's reluctance
to suppress the strikes by force
is apparently attributable in
part to recognition by some re-
gime officials of the strikes'
valid economic basis--at least
in the Asturias region, where
the principal walkouts occurred.
The absence of violence by the
workers was an additional factor,
as was the government's interest
in international prestige--
particularly in connection with
its application for Common Mar-
ket association, forthcoming ne-
gotiations on the US base agree-
ments, and the growing importance
of tourist trade.
The church also exerted a
strong influence on the govern-
ment's attitude, particularly
through pastoral letters and
an editorial in the Catholic
Action Ecclesia giving the
strikers moral support. The
strikers have thus been able
to challenge the concept of
illegality--in general without
serious personal molestation or
economic reprisal, and also
with church sanction.
The indecisiveness with
which the strikes were handled
points up defects in the govern-
ment apparatus, particularly the
syndicate system, which the re-
gime has played up as a model
for labor-managment relations.
Changes will probably result,
leading perhaps to replacement
of the labor minister, recogni-
tion of economic strikes, and
broader worker participation in
the election of syndicate of-
ficials. Government leaders
from Franco down are said to
believe that Spain is in "a
transitional economic state lead-
ing to better times," but the
regime is divided on what this
means for labor, and a long pe-
riod of worker restlessness is
likely.
Similar stirrings are ap-
parent in the political field.
Joint declarations of support
for the strikers have been
issued by six opposition groups,
ranging from the Socialists to
the Monarchists, and demonstra-
tions by sympathizers of the
strike have been held in both
Madrid and Barcelona. The Com-
munists failed in efforts last
week to start general strikes
in two major cities but they
are continuing to call for
collaboration by all anti-Franco
forces. The clandestine Com-
munist radio, for weeks the
only news medium reporting the
strikes, has probably enlarged
its audience, now that relative
prosperity has put thousands
more radios into Spanish homes.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The generally favorable
British public attitude toward
joining the Common Market shows
signs of changing as the nego-
tiations with the EEC move into
their most critical stage.
Opposition focuses on the ques-
tion of Britain's Commonwealth
ties, a potent issue in domestic
politics.
to kill the chances of Britain's
becoming a member. In the House
of Commons they seek to convey
the impression that the EEC is
placing intolerable demands upon
the Commonwealth, and by inviting
government spokesmen frequently
to reiterate the UK's negotiating
conditions they hope to exasperate
the EEC governments.
Although available polls
point to a predominantly favor-
able opinion in both major par-
ties, public views have not yet
crystallized, partly because of
the Macmillan government's own
cautious position. The Labor
party has officially suspended
judgment until it learns the
conditions of entry, but its
statements have become increas-
ingly critical. Party leader
Gaitskell recently warned against
accepting terms that would mean
the end of the Commonwealth,
and the party's foreign affairs
spokesman called for "permanent
safeguards" for the entry of
Commonwealth goods to Britain.
The small Liberal party supports
Britain's entry, but the Common
Market issue has not figured
significantly in the Liberals'
recent dramatic gains in by-
elections and local elections.
The only potential source
of serious parliamentary trouble
lies within the Conservative
party, where a group of back-
benchers--perhaps one tenth of
the Conservative strength but
as yet too few to threaten the
government--is launching a drive
One of the Tory backbench
leaders has told the US Embassy
in London that he plans to travel
to eight Commonwealth countries
this summer to try to stiffen
their views on the EEC prior to
the opening of the Commonwealth
prime ministers'conference on 10
September. He believes a strong
Commonwealth front against
Britain's entry would offer a
chance of defeating the govern-
ment's policy at the ensuing
Conservative party conference and
doom the Common Market in the
House of Commons. 25X1
continuing criticism by the pro-
emnire Beaverbrook press is
already having some success.
These developments are not
yet giving serious trouble to
the government but may stiffen
its dogged defense of Common-
wealth interests in the nego-
tiations at Brussels and tend
to discourage tendencies to-
ward compromise. On the other
hand, British negotiations
may find these trends of some
use in seeking the best pos-
sible terms of entry. 25X1
F_ I
CHINESE COMMUNISTS ENCOURAGING TRADE WITH THE WEST
Communist China is broaden-
ing its economic contacts with
Western industrial countries and
is seeking nonbloc bids on a
variety of development projects.
Continuing Chinese commercial
probes are leading to exchanges
of delegations and specific
offers from Western suppliers.
While China's industrial imports
from both the Soviet bloc and
the West have been curtailed as
a result of Peiping's economic
difficulties, eventual recovery
of the economy may be accompanied
by a shift toward greater imports
of machinery and equipment from
the West.
Chinese trade with the USSR
and European satellites has
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CURRENT INTELLIGENCE WEEKLY SUMMARY
declined sharply during the past
two years, primarily because of
China's-internal economic dis-
locations and the need for large
imports of grain available only
in the West. According to a re-
cent Soviet publicationgSino-
Soviet trade in 1961 totaled only
$910,000,000--down 45 percent
from 1960 and less than half the
peak year of 1959. In addition,
the withdrawal of Soviet techni-
cians in mid-1960 and the failure
to reconcile basic ideological
differences with the USSR com-
pounded trade difficulties and
disrupted the Sino-Soviet econom-
ic alliance. While there is no
indication that a complete rup-
ture of Chinese trade with the
Soviet Union is imminent, a full
return to the former relationship
appears unlikely. Similarly, the
abrupt decline in Chinese trade
with the European satellites in
1931--down by more than half of
1960 trade--will not be easily
reversed.
There have been numerous
recent indications of a growing
Chinese interest in Western
equipment and technology. These
have included discussion with
several nonbloc countries for
supplying equipment for a
hydroelectric project formerly
being built with Soviet assist-
ance; negotiations with British
and French aircraft firms and
the purchase of six transports
from the UK last year; probes for
possible acquisition of modern
steelmaking facilities from
Austria; and increased visits
of Chines: trade missions to
Western Europe and of Western
commercial delegations to China.
Other indications include nego-
tiations with the Italian state
fuels monopoly (ENI) for the pur-
chase of chemical plants and
equipment; travel to China by
representatives of Western banks;
and some requests for niecium-term
credits to finance increased
industrial imports from the West.
Peiping
appears extremely cautious on the
crucial question of admitting
foreign technicians, and has not
yet dropped its traditional
opposition to such a practice.
Peiping's willingness to
soft-pedal its previous insistence
on political concessions from
Tokyo as a prerequisite for in-
creased Sino-Japanese trade has
led to a gradual expansion of
commerce since late 1961. The
extent of Japanese optimism over
prospects for this trade suggests
considerable encouragement from 25X1
the Chinese in the form of pro-
posed orders of industrial equip-
ment.
Chinese interest in offers
of nonbloc equipment to com-
plete the Sanmen Gorge hydro-
electric project--one of the
most important of the former
Soviet aid projects--probably
is the most significant indica-
tion of the disruption of long-
range Sino-Soviet economic
relations. The dam structure
for the Sanmen Gorge instal-
lation was completed with Soviet
aid during 1957-60, and by the
end of 1960 the first of eight
generating units had been
delivered. Since then, dis-
cussions for the supply of the
seven remaining turbines and
generators for Sanmen have
been held with Japanese and
French officials., 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
INDIAN INTEREST IN BLOC AIRCRAFT
Prime Minister Nehru's de-
cision late last month to seek
high-performance MIG-21 jet
fighters from the Soviet Union
has generated considerable heat
within the Indian Government and
has introduced new strains in
New Delhi's relations with Brit-
ain and the United States. This
is not the first time New Delhi
has sought Soviet aircraft; since
1955 the Indians have on several
occasions negotiated with Moscow
for various types of aircraft dur-
ing periods when India's relations
with its neighbors dictated the
need for modernization. Before
1960, however, India always re-
turned to its traditional West-
ern suppliers to meet its new-
felt needs.
Indian Defense Ministry officials
debated for more than a year the
merits of several high-perform-
ance Western aircraft and ac-
celerated their own efforts to
develop a supersonic fighter.
Pakistan's and China's subsequent
acquisition of such modern air-
craft made the need for moderniza-
tion even more urgent. The appar-
ent failure of the Indian fighter25X1
project provided Krishna Menon
with the added ammunition necessary
to convince Nehru in April
that India
had no alternative but to seek
MIG-21s from Moscow.
New demands on India's
aging transport fleet brought
on by the flare-up in Sino-
Indian relations in 1959 brought
the aircraft question again to
the fore, and in 1960 India sat-
isfied part of its urgent require-
ments through the purchase of 29
additional C-119s from the United
States. However, the need for
heavier transports, the decline
in foreign exchange reserves, and
Defense Minister Krishna Menon's
persuasiveness made Moscow's
bargaining points--low prices,
immediate availability, and rupee
financing--even more attractive.
India therefore abandoned its ex-
clusive reliance on the West for
transport aircraft in 1960 by
purchasing Cub (AN-12) transports,
Hound (MI-4) helicopters, and
Crate (IL-14) light transports
from the Soviet Union. The In-
dians saw particular advantage
in emphasizing Soviet "support"
for their position through the
purchase of aircraft to facili-
tate the Indian build-up on the
border with China.
Additional helicopters were
ordered during each of the follow-
ing two years
INDIAN AIR FORCE INVENTORY
TOTAL AIRCRAFT: 1,396 (885 jet) of which 367 jets and 257 propeller
types are tactically assigned to units.
Fighters (all jet)
VAMPIRE NF-54 (UK) 28 27
VAMPIRE FB-52 (UK) 162 35
OURAGAN (FR.) 96 53
MYSTERE IVA (FR.) 105 48
HUNTER F-56 (UK) 147 80.
GNAT I (UK) 36 32
Bomber/Reconnaisance
CANBERRA (jet) (UK)
LIBERATOR B-24 (US)
68 53
18 10;
SIKORSKY S-62B (US) I 1
MI-4 HOUND* (USSR) 9 9
SIKORSKY S-55 (US) 4 4
BELL 47G2 (US) 8 4
TOTAL 22
Transports (propeller)
SUPER CONSTELLATION (US) 7 7
AN-12 CUB* (USSR) 7 7
C-1 19-G (US) 52 46
C-47 (US-UK) 94 67
C-87 (US) 2 2
VISCOUNT (UK) 2 2
IL-14 CRATE (USSR) 23 23
MISC. LIGHT TRANSPORTS 68 60
255 214
Trainers (half jets, all Western) 459 54
A
decision in favor of bloc mili-
tary aircraft was avoided while
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Indo-Soviet negotiations
now are well advanced, although
Nehru, in response to Western
pressures and in anticipation
of possible counteroffers from
the Nest, has apparently ordered
a slowdown; a final Indian deci-
sion is not expected until after
the middle of June, when the de-
tails of the proposed purchase
will be presented to the cabinet
for final review. Despite divided
counsels at home, however, the
Indians appear more serious about
this matter than during any pre-
vious recourse to the bloc. Re-
gardless of the merits of any pos-
sible counterproposal from the 25X1
West, Menon's persuasive ways with
the still ailing prime minister may
carry the day for MIGs.
The visit of Morocco's King
Hassan II to Paris on 10 and 11
May, motivated primarily by his
need to find additional aid for
Morocco's depleted treasury, ap-
pears to be the first step to-
ward close relations between
the King and the French Govern-
ment.
Mohamed V was impelle y suc
criticism to cancel a projected
meeting with De Gaulle in 1959.
the King, in an exceptional y cor-
dial interview, requested a
stepped-up technical and cultural
cooperation program, expansion of
commercial preferences for Moroc-
can products in the French market,
and resumption--in the form of
project aid rather than a budget
subsidy--of financial assistance
which was suspended in 1957. The
Moroccans also requested replace-
ment of military equipment which
has become worn out since France
transferred it to the Moroccan
irimy in 1956. Although French
planning officials are reluctant
to make economic commitments to
other North African states until
the extent of France's financial
responsibilities to Algeria can
be ascertained, De Gaulle was
sympathetic to Hassan's request,
and negotiations are beginning 25X6
in Paris this week.
A projected technical and
cultural agreement will seek to
assure continued employment in
Morocco of about 9,000 French
technicians and professional
people and provide for university
and professional training in
France for some 8,500 Moroccans.
France will continue to provide
900 instructors and other military
specialists. Preferential commer-
cial arrangements are likely to
continue in effect for the present.
Apparently, Hassan indicated to
De Gaulle that if independent
Algeria chooses association with
the Common Market, he will feel
politically able to follow suit
and intends to do so. Meanwhile,
a joint commission will look in-
to the possibility of meeting
Morocco's budget and franc for-
eign exchange deficits through
credits from the Bank of
France.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NASIR'S CHARTER FOR THE UAR
The national charter promul-
gated by Nasir in his speech on
21 May to the UAR's recently
formed National Congress of Pop-
ular Forces is in effect a blue-
print of planning goals embracing
political principles and policies
he has long espoused. The charter
was over six months in preparation
by Nasir in consultation with his
economic planners and close ad-
- s
ers
Hassan's bid for improved
relations with France has been
criticized by his leftist oppo-
nents, who may be spurred to
greater activity. Their charge
that the King is re-establishing
the French protectorate may be
the keynote of the long-awaited
congress of the National Union
of Popular Forces, scheduled to
open in Casablanca on 25 May.
nor slavishly follows abstract
theories. While the tools of
production are to be controlled
by the people, the charter speci-
fies certain areas of private ac-
tivity, including light industry
and retail distributive trade.
All imports, however, and three
fourths of export trade will be
under public control. Foreign
business investment will be
limited to areas in which the
UAR lacks technical canabiliti-
and he evi-
dently regar s as the defini-
tive statement of the permanent
imprint he hopes to leave upon
Egypt.
The charter envisages a
socialist state under collective
leadership during the present
period of revolutionary effort.
Representatives of farmers and
workers will hold 50 percent of
the seats in all representative
bodies, including the future
national legislature. According
to the Cairo press, Nasir will
shortly issue further plans for
eventual election of the legisla-
ture, which will draft a perma-
nent constitution guided by the
principles set forth in the
charter. Since the revolution,
the country has been governed
under a provisional constitution
imposed by the original Revolu-
tionary Command Council.
The charter stresses the
eclectic character of "Arab so-
cialism," which neither shrinks
from borrowing foreign practices
ine vAK will prefer foreign
governmental assistance in the
form of unconditional grants,
but will accept loans.
The charter indicates a
further reduction in the per-
missible size of individual land
holdings to approximately 100
acres per family. Families
presently holding more than this
will be required to sell the
excess for cash within an eight-
year period. The charter con-
templates no nationalization of
land. Control of real estate
to prevent private exploitation
will be continued by existing
tax and rent control laws.
In the trade union field,
which despite strict government
control is known to have given
Nasir concern for some time,
agricultural labor unions are
to be established and the trade
union role generally to be broad-
ened by encouragement of coopera-
tive mousing, consumer cooperatives
and production im rovement.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
AFTERMATH OF JAPANESE- SOV][ ET FISHERY PACT
The Japanese salmon fishing
industry, faced with a drastic
contraction of operations as a
result of the increased restric-
tions laid down by the 1962
Pacific fisheries agreement with
the USSR, is pressing the gov-
ernment to explore avenues of
relief. A 20-percent cutback
QProvidenlye
~
C.P. Novonn
j
F/
Fishing area open to Japanese only
under restrictions defined by Soviet-Japanese fishery treaty of 1956.
EAST
CHINA A
SEA
Japan, has prompted demands
for government subsidies. It
also raises the possibility the
Japanese may seek negotiations
for expanded operations east of
175 degrees west longitude, in
the convention area established
by the Japan-US-Canada tripartite
pact of 1952. In the past, Jap-
Areas prohibited to Japanese salmon fishing in progressive stages since 1958.
A new zone for restricting Japanese salmon fishing in 1962.
in fleet operations, necessitated
by a 15-percent reduction in the
salmon quota in the northwest
Pacific and by the establishment
of a new restricted zone in the
western Pacific and the Sea of
anese fishing in this area has
threatened to deplete salmon
resources around Bristol Ba and
the Alaskan Peninsula. 25X1
PANAMANIAN PRESSURE TO RENEGOTIATE CANAL TREATY
The acquisition of greater
benefits from the Panama Canal
has long been the primary issue
in Panama's domestic politics
and foreign relations. Pana-
manians contend that the basic
1903 treaty was not negotiated
or even signed by one of its
own nationals, and that sub-
sequent revisions have not satis-
fied important national aspira-
tions or recognized that Panama's
geographic position, as its
greatest national resource,
should be its primary source of
income. Internal pressures for
renegotiation of the treaty have
been building up for the past
three years, encouraged by the
oligarchy for its own political
purposes.
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
President Chiari requested
renegotiation discussions last
September, and his letter of
a few days ago accepting Presi-
dent Kennedy's invitation to
visit Washington in mid-June
is a detailed and careful at-
tempt to make the invitation
appear tantamount to US agree-
ment to his request. Chiari
initially told the US ambassador
that he would come to Washing-
ton for a preliminary discus-
sion of US-Panamanian relations
only if specific topics were
agreed upon.
A memorandum accompanying
Chiari's acceptance lists eight
points he will raise and ex-
pect to have covered in a decla-
ration following the meeting.
These include "exact compliance"
with 1903 treaty provisions for
US maintenance, operation,
security, and protection of
the Canal; express recognition
of Panamanian sovereignty over
the Canal Zone; "re-establish-
ment" of Panamanian jurisdic-
tion over lands and waters of
the zone which are not indis-
pensable to specific US treaty
rights; replacement of the
treaty's perpetuity clause by
a fixed date; and a higher
income from Canal operations--
"past and present"--"propor-
tionate" to Panama's contribu-
tion in allowing the construc-
tion and operation of the Canal.
Other points are elimina-
tion in the zone of all US Gov-
ernment commercial and indus-
trial activities and of wage
and hiring practices considered
prejudicial to Panamanians, and,
finally, the "rehabilitation"
of the port facilities of the
city of Colon, at the Atlantic
terminus of the Canal.
A financial adviser to
President Chiari mentioned to
the US ambassador on 17 May
specific economic and financial
guarantees, not involving treaty
revisions, which Panama would
like to raise. Chiari probably
feels that progress on these
items would provide immediate
and tangible benefits which would
help alleviate the strong
nationalistic pressures which
could threaten his administration's
political control.
Chiari has chosen competent
advisers from the most impor-
tcantcoalition and opposition
parties--including former
President Ricardo Arias--to
accompany him to Washington.
The US ambassador believes this
taLctic, as well as Chiari's
efforts to put the responsibility
for his visit on the US Govern-
ment, is intended as a safeguard25X1
against domestic criticism
should he fail to achieve his
major objectives.
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%will, SEC'R ET
CURRENT INTELLIGENCE WEEKLY SUMMARY
The Nationalist Revolu-
tionary Movement (MNR), which
has ruled Bolivia since the
1952 revolution, is likely to
retain control of both houses
in congressional elections sched-
uled for 3 June. Its principal
rivals are a moderately con-
servative MNR splinter party
and the right-wing Bolivian
Socialist Falange. The govern-
ment has also created a party
which purports to be in opposi-
tion and has made conciliatory
gestures to encourage some gen-
uine opposition participation--
for example, by eliminating an
electoral provision giving extra
weight to the majority party.
The opposition's popular-
ity apparently has increased
in the past year or two, partly
because the government-operated
sector of the economy--includ-
ing the nationalized tin mines,
which provide most of Bolivia's
foreign exchange earnings--has
failed to show much progress.
In the private sector, however,
petroleum, agricultural, and
mineral production has risen
significantly. The peasants
are still pro-MNR, but the
party has lost ground in the
capital city.
UNCLASSIFIED
SENATE
CHAMBER OF
DEPUTIES
TOTAL NO. HELD BY OPPOSITION SEATS TOTAL NO.
OF SEATS OPPOSITION AT STAKE 3 JUNE AT STAKE
APPROX. SHARE
NATIONALIST REVOLUTIONARY MOVEMENT (MNR) 73%
MNR SPLINTER 16%
BOLIVIAN SOCIALIST FALANGE 10%
BOLIVIAN COMMUNIST PARTY 1%
BOLIVIAN TROTSKYITE PARTY 0.14%
The major contest for polit-
ical power in Bolivia for the
past ten years has taken place
within the MNR. Present MNR
electoral slates reflect the
success of President Paz and
Vice President Juan Lechin in
dominating the MNR convention
in April. Supporters of an
insurgent faction of mixed
political orientation were
given almost no places, al-
though they have considerable
strength in the present congress.
Paz is moderately leftist, while
Juan Lechin has tended to be
more extreme.
In addition to public
disaffection, the MNR faces in-
creased apathy among its mem-
bers. Reregistration of party
members, now nearly complete,
came to only 85,000--possibly
20 percent of the expected
vote--and this figure has ap-
parently been padded. When one
MNR member last March brought
in only 18 reregistrations
from his district, for example,
he was reportedly told to return
the next day with a manufactured
list of 500.
Resort to obvious fraud in
the election is likely to en-
courage opposition activity
both in and out of the party.
Si].es, now ambassador to
Uruguay,
has stated that a
few months after the election
he will return to the country
"to rid the party of its
gangster element and redirect
the national revolution along
sane lines."
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CURRENT INTELLIGENCE WEEKLY SUMMARY
In the Ecuadorean elec-
tions scheduled for 3 June,
all 73 seats in the lower house
of congress are to be filled,
along with many major municipal
posts, including those of the
mayors of Quito and Guayaquil.
The voters have shown little
interest in the campaigning,
however, and the plethora of
"independent" candidates re-
flects the disorganization
of most of the nonrightist
parties. The lack of effective
competition tends to assure the
right wing a comfortable majority
in the new congress.
The elections have been
overshadowed in public inter-
est by President Arosemena's
"creeping cabinet crisis."
Since the end of March, six
of the nine original cabinet
members have left office.. Con-
servatives and Socialists have
been successively replaced by
middle-of-the-road figures
having no strong party affilia-
tion.
17 May with the resignation
of the defense minister. Three
other ministers resigned two
days later, and all were speedily
replaced by independent rightists.
The new cabinet appointments
reflect Arosemena's evident be-
lief that after 3 June he will
have to deal with a rightist-
dominated congress. His first
placating move probably will
be the dismissal of the "leftists"
on his staff, whose presence
has been a source of continuing
contention with rightists and
military leaders.
By forming his new cabinet
of men with no effective party
affiliation, Arosemena has
given himself considerable
freedom of action. The new
cabinet, which is not as far
right of center as the congress
is likely to be, will be more
responsive to his direction
than its predecessor. He now
is in an improved position to
resume pushing for tax reform,
agrarian reform, and housing
development, which have been
The most recent round of
cabinet changes started on
stalled in the various ministries.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SPECIAL ARTICLES
CZECHOSLOVAKIA: INCREASED DIFFICULTIES IN THE "MODEL SATELLITE"
Czechoslovakia, long the
"model satellite" because of
its economic growth and polit-
ical stability, has been be-
set with economic difficulties
for the past year. Among the
most serious problems are a de-
cline in the growth rate of indus-
trial output, stagnation of agri-
culture and a widespread short-
age of quality foods, increased
imports leading to a sharp de-
cline in the export surplus in
1961, and a shortage of foreign
exchange. Although the per-
formance of the economy should
improve in future months, some
1962 goals have already been
lowered, and the regime will
probably be forced to reduce
the planned rate of growth
through 1965. The food short-
ages have led to several small-
scale riots, a form of protest
rarely resorted to by the Czech-
oslovaks. The government never-
theless retains effective con-
trol, and the present level of
popular discontent does not ap-
pear to pose a threat to the
regime's stability.
Industry and Investment
The Czechoslovak economy
is one of the most industrially
advanced in the bloc. Czecho-
slovakia has supplied large
amounts of machinery to the
rest of the bloc and is second
only to the USSR as a partici-
pant in the bloc aid program in
underdeveloped countries. In
recent years, moreover, Prague
has increased its importance as
a source of credits to other
satellites. Throughout the
postwar period, industrial
growth has been rapid because
of a high rate of investment,
a skilled and disciplined labor
force, and a high level of
technological development.
In 1961, industrial pro-
duction continued to expand
rapidly--by 8.9 percent, nearly
the planned rate. However, the
rate of growth generally de-
clined as the year progressed,
and was only 6.8 percent for
the final quarter. For the year
as a whole, moreover, there
were substantial production
lags in such key sectors as
hard coal, building materials,
and, most importantly, steel.
Steel output rose only 4.1
percent compared with a planned
increase of 10 percent.
The shortfall in steel,
which was only partly alleviated
by increased imports of rolled
products, in turn affected
maebine building. Production
of heavy machinery, especially
of types for the chemical and
construction industries, fell
behind plans.
Official reports so far
in 1962 reveal continuing strain
in industry. The claimed rate.
of growth for the first quarter
was only 6 percent, whereas a
growth of 9 percent had been
planned for the year as a whole.
Steel production continues to
be a trouble spot, and output
plans were underfulfilled for
all major products of the metal-
lurgical industry.
The key factor causing
difficulties in industry has
been the serious lag in the
program for introducing tech-
nological improvements. As a
result of this lag, plans for
increasing labor productivity
have not been met, and in 1961,
increases in employment were
larger than anticipated. Ad-
ditional problems mentioned in
official reports were ab-
senteeism and lax observance
of working hours, poor work
or?;anization, shortages of
skilled workers, and the
tendency of regional adminis-
trators to give priority to
local projects.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Expenditures for capital
investment (including capital
repairs) increased 8 percent
in 1961, essentially as planned.
However, because of ineffective
state controls over expenditures,
key programs were delayed.
Shortages of building materials
and steel, increased absenteeism,
and lags in productivity of con-
struction workers caused delays
in the construction or ex-
pansion of industrial plants--
especially those engaged in
the production of metallurgical
machinery, metals, and chemicals.
Shortfalls in machinery pro-
duction and consequent lags
in the delivery of machinery
disrupted the program for ad-
vancing the level of technology
in industry. On the other hand,
private housing, and possibly
other forms of nonproductive
investment, grew more rapidly
than planned.
Official reports for the
first quarter of 1962 indicate
that shortfalls in construction
plans and in plans for introduc-
ing technological improvements
have persisted, and may even
have worsened.
Agriculture
Agriculture, which repre-
sents 13 percent of the gross
national product in Czecho-
slovakia, continues to be a
major problem for the economy.
Gross output increased only
one percent in 1961, a sharp
contrast to the planned rise
of 7 percent. Net output prob-
ably declined and remained below
prewar levels. Production was
hampered by adverse weather
conditions in some areasof the
country, but it also suffered
from chronic problems of in-
efficient administration and
inadequate incentives for peas-
ants in a system which is 90-
percent socialized. Investments
in agriculture were at a high
level in 1961 but often were
wastefully implemented; efforts
to recruit young workers to
supplement overage farm workers
were largely unsuccessful.
Poor results in fodder crops
led to premature slaughtering
of hogs during the final months
of 1961. Livestock production
thus far in 1962 has been ham-
pered by the decline in hog
numbers and a continued short-
age of fodder. Field work this
spring has been delayed by
unusually cold weather. During
the first four months of the
year, procurement of slaughter
animals, milk, and eggs was
considerably(behind plans, and
probably declined from last
year's level in absolute terms.
Foreign Trade
Difficulties in industrial
and agricultural production
adversely affected foreign
trade, and Czechoslovakia's
export surplus declined sharply
in 1961, wherea~a large increase
had been planned. The surplus
fell from $114 million in
1960 to $22 million in 1961,
and during the last four months
of the year a large import
surplus was incurred. Pro-
duction deficiencies led to
imports of steel and agricultural
products larger than expected)
while coking coal had to be
imported for the first time.
Exports of machinery (gen-
erally one half of total ex-
ports) grew by only 6 percent
in 1961, far below the plan
for the year and the average
annual growth of 16 percent
attained during 1958-60. These
disappointing results were
related to a sharp curtailment
of trade with Communist China
as well as to lags in production.
Models produced for China prob-
ably could not easily be used
domestically or sold elsewhere.
Czechoslovakia generally
runs a deficit with the West
in exchange of services (trans-
portation, insurance, etc.),
which is paid for by a surplus
in commodity exchange. Czech-
oslovakia's balance on commodity
exchange with Western countries,
however, shifted from an export
surplus of $2.3 million in 1960
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CURRENT INTELLIGENCE WEEKLY SUMMARY
to an import surplus of $2.4
million in 1961. The resulting
shortage of foreign exchange is
believed to be hampering re-
covery of the economy in 1962.
Recent reports indicate that
the regime has initiated a
series of restrictions on
foreign travel and on expendi-
tures by officials abroad in
order to conserve hard currency.
Czechoslovak consulates in
Salzburg and Monterrey recently
were closed for reasons of
economy; others may be closed
in the future.
Plans for 1962
Although the regime has
shown considerable concern over
unfavorable economic develop-
ments, plans for 1962 released
early in the year indicate that
it is attempting to maintain
rapid rates of growth. Never-
theless, certain goals for 1962
as outlined in the Third Five-
Year Plan (1961-65) have been
abandoned. The planned level
of output for machinery has
been reduced, and the completion
dates for many investment proj-
ects--including- an electric
power plant to be exported to
Poland--have been set back.
The 1962 plan for industry
calls for a 9-percent increase
in output. In order to speed
up the introduction of techno-
logical improvements, the re-
gime has instituted tighter
central controls over capital
investment;fsuch a change could
help somewhat. On the other
hand, the manpower situation
may be more stringent in 1962
than in 1961, when in general
increases in employment were
actually greater than planned.
Although the completion of
carry-over investment projects
may provide a more rapid in-
crease in output of steel than
in 1961, the 12.4-percent in-
crease slated for 1962 appears
unrealistic.
The 1962 plan for agricul-
ture calls for an increase in
output of 5 percent, which
also is unrealistic consider-
ing the chronically poor per-
formance of this sector in Czech-
oslovakia and the unfavorable
weather early in the year. The
P0037 results in 1961 probably
will delay the implementation
of ,the regime's program--already
meeting peasant resistance--for
introducing a fixed money wage
system for collective farmers
while abolishing private plots
and income-in-kind. Currently,
the regime is promoting the
introduction of partial social
security benefits for collective
fanners. Although the measure
is a step in the direction of
improving incentives, it is too
limited in scope to reduce sub-
stantially the problem of peas-
ant lack of interest in ~roduc
tion results.
Popular Discontent
The poor performance of the
economy has led to increasingly
open popular discontent, the
primary focus of which is the
widespread shortage of quality
foods. Retail food sales
reportedly increased 6 percent
in 1961, probably reflecting
the accelerated slaughtering of
pigs and larger than anticipated
imports, as well as a reduction
in domestic stocks. Nevertheless,
the demand for quality1 f Dods rose
more rapidly than the supply, and
shortages ensued. The shortages
have worsened in 1962 as a
result of the decline in procure-
ment of slaughter animals, milk,
and eggs.
On May Day, demonstrating
students in Prague probably re-
flected widely held sentiments
when they chanted slogans
blaming shortages on Czecho-
slovak economic aid to foreign
countries--particularly Cuba--on
the Communist economic system,
on Soviet economic exploitation,
and on the country's leaders.
For the first time in
years, prolonged queueing for
foods has become a regular
practice, with lines in some
instances starting in the .
middle of the night. The food
lines have given rise to minor
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riots in at least three cities and
have been springboards for criti-
cism of the regime on long-stand-
ing grievances as well as for
rumors of impending rationing,
price increases, and pay cuts. In
the past Czechoslovaks were will-
ing to tolerate the repressive
economic and social measures of
the regime as long as personal
consumption was maintained at a
relatively high level and fairly
steady increases occurred. Con-
sumption of quality foods still
is at a fairly high level by
nutritional standards, but the dis-
appointment caused by shortages and
the inconvenience and annoyance of
queueing have apparently angered
the population. Moreover, fre-
quent official reports on the
ills of the economy have probably
added to the anxiety of the pop-
ulation.
A growing lack of public con-
fidence has come at a particularly
inopportune time for the regime,
already beset with political prob-
lems. No one believes the official
indictment charging that former
politburo member and Interior
Minister Barak was guilty of mis-
use of state funds. The public
is more inclined to accept party
chief Novotny's earlier statement
of 22 February that Barak--who,
in contrast to Novotny, is a pop-
ular figure--attempted to seize
control of the party. Similarly,
both the party rank and file and
the populace have remained unim-
pressed and somewhat confused by
the party leaderships muddled
and unconvincing attempts to
throw the blame for past Stalinist
practices on deceased party leader
Gottwald.
There are indications that
the party is seriously split on
these issues, with supporters of
Barak and supporters of at least
a modicum of de-Stalinization at
variance with Novotny, who has
maintained control of the party
but not without some loss of pres-
tige. Two central committee
plenums have been held since No-
vember, however, without definitive
resolution of any of these prob-
lems. There apparently is wide-
spread disgust over the leader-
ship's attempts to paint a picture
of calm and unity instead of
squarely facing such difficul-
ties.
A number of stopgap admin-
istrative measures have been taken
to relieve the pressure of public
dissatisfaction. With the pos-
sible exception of a major amnesty
for political prisoners which
Novotny announced on 9 May, none
of these bureaucratic remedies
will have much immediate effect.
Moreover, these include an ex-
tensive series of steps over the
past nine months which appear to
more than cancel the much-pub-
licized "democratization" and de-
centralizations of 1959-60.
Prospects for the Economy
The economy has been able to
rebound from difficulties in the
past, and its performance should
improve as the year progresses.
Industrial-output growth this March,
for example, was reported to be
8.3 percent. However, the diffi-
culties encountered in 1961 and
thus far in 1962 are symptomatic
of basic problems under the Third
Five-Year Plan. In an effort to
maintain rapid rates of growth
under conditions of a limited re-
serve of manpower and because of
a tendency for capital investment
costs to rise per unit of increased
output, great stress in planning
has been placed on increasing labor
productivity through technological
and, organizational innovations. It
seems likely, however, that inno-
vations will not be introduced
rapidly enough to enable fulfill-
ment of production plans because
of ineffective state controls and
inadequate incentives for workers
and managers.
A reduction in the high rate
of expansion of industry of recent
years and continued poor results in
agriculture would force adjustments
elsewhere in the Five-Year Plan. The
regime may be tempted to reduce the
plans for the growth of personal
consumption, but it is unlikely to
risk a decline in personal consump-
tionor a prolonged stagnation under
present conditions of open popular
discontent. The program for increas-
ing Czechoslovak economic penetration
of underdeveloped countries and as-
sistance to other bloc countries
also may be affected, although the
present level of aid is not likely
to be curtailed unless economic and
political difficulties become more
intense.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
THE WEST BERLIN ECONOMY
In the nine months since
the Communist wall was built,
West Berlin's industrial output
has generally held firm. Private
savings deposits have shown re-
cent gains, and last fall's pop-
ulation outflow has been reversed.
Labor shortages and a drop in
investments and industrial
orders are, however, continuing
problems. West Germany has pro-
vided emergency grants but has
not made the commitment to
long-term assistance which Ber-
liners want.
The West Berlin Economy
Despite the handicaps of
its isolated position, West
Berlin remains West Germany's
largest industrial city. Out
of a labor force of over 900,000,
some 315,000 are employed in
industry. Output of electrical
products, food, beverages, cloth-
ing, and machinery accounts for
about 70 percent of total indus-
trial production. Approximately
300
1961-1962 (1952-100)
200
1961 1962
-INDUSTRIAL PRODUCTION
1960 1961 --- .
two thirds of West Berlin's
production is sold in the
Federal Republic, and the
city is heavily dependent on
Bonn's financial assistance.
Brown coal is the only major
necessity procured from East
Germany.
Varied dislocations caused
by the wall have accentuated
difficulties existing even be-
fore construction of the wall
last August. Overall, indus-
trial production for the period
between August 1961 and March
19132 was slightly higher than
for the same period a year be-
fore. The rate of industrial
growth has been substantially
slower in recent months than
in late 1960 and early 1961,
however, with February and
March production failing nar-
rowly to meet that of February
and March 1961.
West German - West Berlin
trade figures have shown gains
WEST BERLIN INDUSTRIAL INDEXES
1960 - 1961-
YEARLY AVERAGES
s3
INDUSTRIAL ORDERS
(1952-100)
INDUSTRIAL PRODUCTION
(1936-100)
SEPT OCT NOV
1961
DEC JAN FEB MAR 1952 1953
1962
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CURRENT INTELLIGENCE 'WEEKLY SUMMARY
for early 1962, following a drop
in late 1961. There has been a
decline in new industrial orders
since August 1961 which threat-
ens to reduce the large backlogs
of orders at many firms. New
investment also showed some de-
cline in early 1962. Large
firms,,which are usually,subsid-
iaries of West German concerns,
have tended to be less affected
than medium-size and small firms.
Some West German parent firms
have transferred Berlin opera-
tions back to the Federal Re-
public, and Berlin entrepreneurs
have remarked, with some justi-
fication, on the cold-blooded-
ness of some West German custom-
ers in canceling orders. In
general, however, the early
pessimism of the city's business
leaders has not been borne out.
West Berlin retailers--
particularly those near the
sector border--have been the
principal economic victims of
the wall. Conversely, business
has boomed for the West Berlin
Transport Authority, which has
supplemented its bus network to
handle increased traffic result-
ing from a union-sponsored boy-
cott of the East Berlin - con-
trolled city railway (S-Bahn)
system. Recent statistics
indicate the boycott continues
to be effective.
The purely financial reper-
cussions of the wall have been
relatively small. Deposits in
savings banks, a sensitive barom-
eter of the Berlin mood, declined
moderately until mid-December,
when a favorable trend began.
For the period January to mid-
March 1962, private savings rose
almost $10,000,000, as compared
with about $16,250,000 during
the same period of 1961. Sight
and time deposits suffered
similar initial losses, but by
the end of 1961 were again above
mid-August levels. Prices
for stocks of purely West Berlin
concerns have generally fluctu-
ated less and fared better than
have West German stocks.
Population Movements
The wall made perhaps its
most serious impact in the form
of an increased outflow of
people from the city. At its
peak in September, the net loss
of residents was about 1,100 a
week. City officials maintained
that this total was not serious,
but the exodus, when joined with
the natural loss through the
excess of deaths over births,
added up to an estimated popu-
lation decline of 15,000 for
the last quarter of 1961.
Beginning in the week of
4-.February and continuing to
the present, a few more people
have been arriving than leav-
ing. Lower income taxes and
the lack of a military draft
are. strong attractions. While
the average wage is somewhat
lower than in West Germany,
the cost of living is also
lower. Also, Berlin is Berlin--
a big, pleasant place, and a
city Germans like. The factor
of excess mortality, however,
still points to a population
loss of about 3 percent for
1962.
Labor Problems
A serious aspect of the
population outflow has been
the high proportion of able-
bodied laborers leaving the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
city. This factor was especially
serious when considered in con-
junction with the loss of 50,000
daily border crossers to the
West Berlin labor market after
13 August. More efficient
operations, together with over-
time work, initially minimized
the effects of the labor short-
age, and a city-sponsored re-
cruitment program has had modest
success in bringing into West
Berlin some 4,000 additional
workers by March 1962.
A complicating factor in
the manpower problem is a level
of job absenteeism twice that
for West Germany. This is at-
tributed partly to a relatively
high age level of Berlin workers
and a high proportion of women
workers, and also to psycholog-
ical reactions to the wall.
Assistance From West Germany
On 12 September 1961 the
West German Government announced
that $125,000,000 would be made
available to West Berlin to com-
bat the adverse effects of the
wall. This sum is in addition
to the regular Federal Republic
contribution, which totaled
some $287,500,000--about one
third of the city budget--in
1961 and will reach an estimated
$310,500,000 this year. Bonn
has been slow, however, in
actually allocating the addi-
tional aid. In late December,
final federal approval was
given to plans for marriage
loans and vacation bonuses, and
on 1 March a reduction of Berlin
air fares made possible by
federal subsidy went into effect.
More far-reaching proposals
such as a graduated reduction
in income taxes for Berliners
and various steps to increase
the attraction of West Berlin
,for capital and investment proj-
ects were given preliminary
federal approval on 22 March.
Berliners have been generally
doubtful,. however, of Bonn's
willingness to provide effec-
tive long-term aid. They re-
portedly have been more for-
giving of their own city lead-
ers for slowness in the program
of promoting West Berlin as a
cultural, educational, and
international convention center.
City officials now are planning
for the establishment in West
Berlin of a training center for
less developed countries.
While the outlook for the
months ahead is promising, much
remains to be accomplished by
Berliners in conjunction with
the Federal Republic. The
levels of investments and
industrial orders from West
Germany must be raised to
counter the leveling off in
the economy. A prominent
Berlin official has emphasized
the need for further long-range
economic assistance, rather than
piecemeal measures.
Further measures are also
necessary to encourage the flow
of population to Berlin? since
city authorities estimate that
15,000 new workers per annum
are necessary just to replace
those lost through death and
retirement. In addition, Ber-
liners must remain convinced
that their city, by surviving
the wall, has acquired a new
meaning for the future. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
After a year and a half of
negotiations,an organizational
basis has been established for
a cooperative Western European
program for the exploration of
outer space. The convention
about to be signed by the 11
participants* sets up a European
Space Research Organization
(ESRO) to develop scientific
satellite experiments and to
conduct related research. ESRO
is patterned after the highly
successful European Center for
Nuclear Research (CERN) estab-
lished ten years ago by virtuall
the same countries for coopera-
tion in the nuclear field.
In addition, six** of these
countries are also members--
along with Australia--of the
European Launcher Development
Organization (ELDO), established
a month ago for the development
of space-launching vehicles.
Its program was inspired in part
by Britain's desire to salvage
some of its investment in an
abandoned military missile.
ELDO has the drawback that it
would produce a vehicle consid-
erably less advanced than exist-
ing US vehicles. It could also
contribute to the development
of military capabilities by
individual countries in the
missile field. Nevertheless,
ELDO's members consider their
cooperative program necessary
in view of the high costs in-
volved and to enable Western
Belgium, Denmark, France,
West Germany, I tal y, the Nether-
lands, Norway, Spain, Sweden,
Switzerland, and the United King-
dom.
**Belgium, France, West Ger-
many, Italy, the Netherlands, and
the United Kingdom.
Europe to participate fully
in the evolution of the space
age.
Development and
Organization of RO
Informal discussion of
European space cooperation
began in early 1960, but formal
negotiations date from an 11-
nation conference at CERN head-
quarters in Geneva that fall.
This conference appointed a
preparatory committee headed
by Britain's Sir Harry Massey
and charged it with drafting
concrete proposals for an or-
ganization, research program,
and supporting budget. These
proposals were largely complete
by last January, but conclusion
of the necessary convention has
been delayed for several months
by difficulties over voting
rights, distribution of costs,
and location of the various
ESR() installations.
The top policy authority
of ESRO will be the council
composed of two representatives
frorn each of the member coun-
tries; a secretariat seated in
Paris will provide executive
direction in the organization.
The major ESRO establishments
will. be the space technology
center (ESTEC) in the Nether-
lands, at Delft; a space center
(ESDAC) at Darmstadt, West Ger-
many; ap~pace laboratory (ESLAB)
and a launch range
(ESRANGE) near Kiruna, Sweden.
Additional tracking and telem-
etry stations will also be
constructed to supplement such
well-developed facilities as
Britain's Jodrell Bank. ESTEC,
the most important of the new
ESRO installations, will be
staffed by an estimated 800
people engaged in applied research
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CURRENT INTELLIGENCE 'WEEKLY SUMMARY
in space technology and re-
sponsible for the development
and manufacture of instruments
for rockets and satellites.
ESRO Budget and
Research Program
ESRO expenditures are
expected to total $78 million
in the first three years and
$122 million in the next three,
with a ceiling limit of $306
million for the first eight-
year program. As in the case
of CERN, financial contributions
have been levied in proportion
to national income, but no mem-
ber country is expected to con-
tribute more than 25 percent
of the total budget.
ESRO planners expect this
relatively modest budget to
finance a program of space
activities of progressively
increasing complexity and sophis-
tication. During the initial
three years of operation, in
which the various installations,
laboratories, and tracking
stations would be set up, space
experiments would be restricted
to investigations of the upper
atmosphere utilizing both in-
struments and biological
specimens. These probes--from
the Kiruna range--would carry
payloads averaging 100 pounds
to altitudes of 90 miles. Small
satellites in close orbits--
100 to 500 pounds to altitudes
of 300 miles--would be attempted
in the fourth year; space probes
and larger satellites up to
5,000 pounds would follow in
the sixth year; and a lunar
satellite is planned for the
seventh.
Purpose and Origin of ELDO
The ESRO convention provides
for no specific source of pro-
pulsion equipment for these
I experiments, and the organiza-
tion is ostensibly free to choose
from whatever equipment is avail-
able in Europe or offered by
the US or the USSR. The Euro-
pean Launcher Development Organi-
zation was founded, however, on
the expectation that ESRO would
choose to rely on ELDO-developed
vehicles, at least for the latter
phases of its initial space pro-
gram.
ELDO is largely the brain-
child of Britain's Minister of
Aviation Thorneycroft and was
conceived in the aftermath of
the Macmillan government's de-
cision in April 1960 to abandon
its Blue Streak ballistics mis-
silee program after an estimated
expenditure of $182,000,000.
Thorrneycroft proposed that the
Blue Streak and the UK's Black
Knight become the basis for a
"European" space vehicle. This
scheme was turned down by the
ESRO planners, but the Blue
Streak was subsequently accepted
after the French were mollified
by ache substitution of a French
rocket for the Black Knight.
Paris and London jointly spon-
sored the conference in early
196]. from which the ELDO conven-
tion eventually emerged.
ELDO Organization and Program
The ELDO program as finally
agreed to calls for the develop-
ment by mid-1965 of a three-
stage rocket, the first stage
of which will be the Blue Streak,
the second stage the French
Veronique, and the third a new
rocket to be developed by West
Germany. Italy has been allotted
the design, development, and con-
struction of the test satellite;
Belgium will supply the guidance
system; and the Netherlands will
direct the work on a long-range
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telemetry link. Test firings La:rgely as a result of US re-
of both the modified Blue Streak monstrances, however, the charter
and of the completed multistage was modified to provide that
vehicle will be from the Woomera
range in Australia, which was
constructed for the Blue Streak
and on which little if any fur-
ther work will be required.
London has had to agree to
pay one third of the estimated
$200,000,000 cost of this
development program, the re-
mainder being financed by the
other participants in proportion
to their national incomes. This
presumably reflects in part the
comparatively limited opportuni-
ties for subcontracting in the
conversion of the Blue Streak,
although the Italians in partic-
ular have pressed hard to par-
ticipate in every phase of the
program. Both Italy and West
Germany strongly opposed having
ELDO bound too firmly to the
Blue Streak project and success-
fully insisted on a review
after two years to "take account
of the progress made and to con-
sider the possibilities for the
future."
Security Considerations
From the beginning, the
ELDO project has caused the US
concern that it would contrib-
ute to the wider dissemination
of missile technology and to
the development of military
capabilities in this field.
As drafted last fall, the
ELDO convention provided merely
that the organization should
not concern itself with military
applications of space vehicle
launchers and stated specifi-
cally that each member should
have the right to procure "for
any purpose of its own" equip-
ment jointly developed by ELDO.
ELDO will be concerned only with
peaceful applications of launch-
ing equipment,) which may be pro-
cured by the members-for peaceful
purposes only.
The US also sought pro-
vision in the ELDO charter
against release of information
to Communist-oriented countries,
but such a "cold war extension"
was objected to by a majority
of the participants, and the
most that could be agreed to
was an article providing that
information could be released 25X1
to other countries only by unan-
imous consent of the members.
Nevertheless, ELDO provides
no organizational control over
the application of ELDO-acquired
information to the development
of independent missile forces.
In assessing the ESRO-ELDO
potential, it must be borne in
mind that both organizations
will complement existing and in
some cases well-established
national space programs. The
value of the cooperative approach
will therefore be judged in part
by the extent to which it suc-
ceeds in discouraging wasteful
duplication.
So far as ESRO is concerned,
most observers consider it is
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CURRENT INTELLIGENCE 'WEEKLY SUMMARY
making a promising beginning in
this respect. ESRO intends to
create a scientific forum to
discuss, guide, and coordinate
national and joint space efforts;
to provide central research,
technology, and management
facilities to supplement national
capability; and to encourage
interchange of thought and
experience by visiting and
research fellowships. Thus,
ESRO is geared in considerable
part to the creation of a solid,
scientific basis for a space
program, taking into consider-
ation that the available talent
is both dispersed and compara-
tively inexperienced.
The joint space explora-
tions contemplated by ESRO, al-
though not expected to yield
significant scientific data
initially, are similarly geared
to the development of experience
for more sophisticated experi-
ment7 ESRO is therefore taking
a "do-it-yourself" approach, but
it has nevertheless welcomed
NASA advice (e.g., concerning
cost estimates and tracking sta-
tions), and it would like to
have some sort of liaison with
the USSR. According to the
secretary of the preparatory
committee, ESRO has no intention
of competing with either the US
or the USSR but still feels there
are many areas in which the Euro-
peans can make a useful contri-
bution.
ELDO Reservations
Since NASA is prepared to
sell ESRO the Scout and the
Thor, and will cooperate with
ESRO in the use of the Atlas
for experiments of mutual in-
terest, the decision of the
Western Europeans to proceed
with the development of an in-
dependent European launching
system appears largely motivated
by political, commercial, and
prestige considerations.
The ELDO planners have vari-
ously contended that the organi-
zation would (1) advance Euro-
pean economic and political in-
tegration; (2) provide European
technicians and industry with
much-needed experience in missile
technology; (3) eventually supply
European space programs with a
booster less expensive per unit
than any comparable American ve-
hicle; and (4) preclude permanent
European reliance on American-
produced launchers. ELDO's pro-
moters have especially stressed
that an independent launching
capability is necessary before
European countries can enter the
communications satellite field.
While most of these argu-
ments have been questioned by
ELDO's critics, the organization
is in keeping with the trend to-
ward a revivified, more self-re-
liant Europe. Even those Euro-
peans who initially were strongly
opposed to ELDO have been im-
pressed by the argument that the
Europeans cannot afford to see
the space race permanently
monopolized by the US and the
USSR. American offers of launch-
ing equipment have not, for ex-
ample, convinced the Dutch, who.
have said that Europe can de-
velop needed technology only
if the US goes further and agrees
both to European manufacture of
American rockets under license
and to active European partici-
pation in the development of new
rockets.
Against these considerations
must be balanced the fact that
ELDO, in developing a vehicle
which may be entirely suitable
for European purposes, will be
covering ground already passed
by the US and the USSR. Cost
estimates, moreover, have prob-
ably been set too low, and
American experts question that
the European vehicle will be
available, as ELDO anticipates,
at half the unit cost of similar
American equipment. Finally,
given the advance which American
and Soviet boosters are expected
to be making in the meantime,
these experts also question
that ELDO's vehicle--with
roughly twice the weight-lifting
capability of the Thor-Agena B--
wi]l have the useful lifetime
of five years which ELDO expects.
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