CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A004000070001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 12, 2016
• Document Release Date: July 19, 2002
• Sequence Number: 1
• Publication Date: September 19, 1958
• Content Type: REPORT

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19 September 1958
Copy No. 5 9
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DOCUMENT NO.
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IG fighters shot down and one Communist motor torpedo boat
ulting, according to Nationalist claims, in five Communist
men area involving Communist and Nationalist air and naval
elements occurred during the afternoon of 18 September, re-
CENTRAL INTELLIGENCE BULLETIN
19 September 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
Taiwan Strait situation; A series of clashes in the Kin
eiping has issued another warning--the sixth--against intru-
ionalist vessel was damaged by Communist artillery fire.
unk and another damaged by Nationalist aircraft. One Na-
ions by US warships.
Watch Committee conclusion- -Taiwan Strait; The Chi-
ese Communists, wi continue their efforts to interdict sup-
ly lines to the offshore islands.
The Chinese Communists now possess a capability to
launch major attacks against the Kinmens, the Matsus, and
smaller offshore islands with little or no warning. Seizure
of one or more of the offshore islands is possible, but am-
phibious lift necessary for an invasion of Kinmen and Lieh
Hsu (Little Kinmen) and Matsu has not yet been observed. The
Chinese Communists probably do not intend to initiate major
offensive military action against Taiwan and the Penghus
(Pescadores) but possess a capability for major air attacks
against them.
The Chinese Nationalists, fearing US concessions in talks
with the Chinese Communists, might undertake independent
provocative action calculated to embroil the US in hostilities.
Increasingly concerned over failures to resupply the Kinmens,
lone
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the Chinese Nationalists will put heavy pressure on the US
to assure supply of the island.
Available evidence fails to reveal that the USSR has taken
any measures, precautionary or otherwise, which might re-
fleet preparation for an early implementation of Soviet com-
mitments to the defense of Communi - ina.
Hong Kong. A number of recent incidents off Hong Kong
indicate a Chinese Communist intention to apply the 12-mile
limit to the territorial waters around Hong Kong. On 15 Sep-
tember, two Communist naval vessels forced two Royal Navy
motor launches off course until they nearly ran aground within
the. colony's waters. Britishauthorities seethe,possibility'of an "ex-
change of fir@,?! sinde~the withdrawal of-their.patr6lst Would r~esqu It
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in serious,,dAmage to British prestige.,
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Yugoslav-Bloc relations: A number of Yugoslav officials
have emphasized recently that they expect the Sino-Soviet
bloc's anti-Yugoslav campaign to intensify this fall. The Yugo-
slav chargd in Washington has declared that a break in diplo-
matic relations with Peiping could occur any day. A further
deterioration in Yugoslav-bloc relations is likely, but the Yugo-
slavs ma-v be exaaaerating the rlearee_n~ the deterioration.
-Uggin-Inctonesia - : Moscow has agreed to supply Indonesia
ith 200)000 tons of rice worth $20,000,000 under a new long-
erm credit. Communist China will probably deliver the rice
Djakarta, charging it to the Soviet trade account. Indonesia
19 Sept 58
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has now been offered Sino-Soviet bloc economic aid worth
$218,000,000, and more than,. half of this has been obligated.
II. ASIA-AFRICA
Al eri t The announcement of the establishment of an
erian government-in-exile, which is scheduled to be made
9 September, may be timed to facilitate its admission to
nembership in the Arab League along with Morocco and Tu-
isia. The announcement would also be intended to add im-
etus to the boycott of the French constitutional referendum
hich the FLN has ordered in Algeria. Headquarters of the.
overnment-in-exile will probably be in Cairo.
N
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Watch Committee conclusion- -Middle East: The survi-
val of the Jordanian regime continues to be threatened. If
the regime in Jordan collapses, action by Israel and other
neighboring countries, to take control of Jordanian territory
is likely.
Within the Iraqi regime, growing instability, dissension
and fragmentation offer increasing opportunities for local
Communist exploitation and action by Nasir to bring about
an outcome favorable to the UAR.
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Violence.in Lebanon may occur incident to
the change of government on 23 September.
and followinLr
Cyprus: An American vice consul, a British airman, and
two Turks on Cyprus were wounded on 18 September in separate
attacks. This action may signal the-beginning of the EOKA
campaign of violence designed to frustrate UK eff orts to im-
plement the plan for limited self-government and to demon-.
strate the need for immediate attbntion to the problem by the
United Nations. F I
IV. SIGNIFICANT INTELLIGENCE
REPORTS AND ESTIMATES
Courses of Action. 9 Sept 1958.
(Available during the preceding week)
Special National Intelligence Estimate No, 36-6-58, The
Outlook in Saudi Arabia and the Consequences of Possible US
19 Sept 58 DAILY BRIEF iv
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I. THE COMMUNIST BLOC
Taiwan Strait Situation
In a series of clashes in the Kinmen area during the aft-
ernoon of 18 September involving both Communist and Nation-
alist air and naval elements, the Nationalists claim to have
shot down five Communist MIG fighters, sunk one Communist
motor torpedo boat and damaged another.
A Nationalist convoy consisting of one LSM and two patrol
craft, en route to Tungting, a few miles south of Kinmen, re-
ported early in the afternoon that one of the patrol craft had
been damaged by Communist artillery fire and was "helpless."
The convoy also reported that two enemy vessels were approach-
ing and requested US naval assistance.
A short time later the Nationalist :Kinmen Defense Com-
mand reported that a Communist MIG had strafed a Nationalist
vessel 2 to 3 miles south of Kinmen. The strafing incident,
the first of its kind, may have coincided with the arrival of a
scheduled convoy to Kinmen. Following the strafing incident,
the Nationalist joint operations center reported that four Com-
munist motor torpedo boats were attacking three Nationalist
patrol vessels in the vicinity of Tungting and that the Nation-
alist vessels were also under attack by Communist artillery.
The Nationalists diverted aircraft to the scene of action, and
sent four additional aircraft armed with bombs. The four Com-
munist motor torpedo boats were attacked by Nationalist air-
craft, with one boat claimed sunk and another "dead in the
water." The two remaining':torpedo boats headed for the main-
land.
About 1800 (Taipei time), approximately three hours after
the,sinking of the motor torpedo boat, eight Communist MIG's
attacked four Nationalist F-86 aircraft about 20 miles south-
east of Kinmen, resulting in three MIG's shot down. A second
encounter in the area resulted in two additional MIG's shot
down. The shoot-downs were confirmed by gun camera film.
Apparently no Nationalist planes were lost.
Despite considerable improvement in the Kinmen supply
situation, successful deliveries since 23 AuLzust have totaled
F
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only about 950 tons. It is believed, however, that it may soon
be possible to supply 180 tons per day and ultimately 300 tons
per day if Communist artillery fire remains at present levels.
The 180-ton. figure is estimated to be the minimum daily ton-
nage needed for survival, and does not 'allow. for the logis-
tical requirements of any major Nationalist counterbattery fire.
The Nationalist Air Force, which has been dropping small
quantities, of supplies, could deliver up to 100 tons daily for
a period of about 20 days.
Peiping's Foreign Ministry issued its 6th warning on 18
September against intrusions by US warships engaged in con-
voy escort into its claimed territorial waters. The aggressive
Communist interdiction actions on 18 September, a reversal
in the recent pattern of Communist air operations,,;. suggest that
Peiping may hope to provoke US counteraction which could be
exploited in the UN as US aggression.
Japan's Foreign Ministry.-has accused the , USSR. of, being
"one-sided" in charging that Japan is supporting American ".ag-
gressive intentions" in the Taiwan Strait. An official Japanese
spokesman said that the Soviet warning to Japan ignored the
cause of the current tension in that area. The note apparently
was delivered too late to exploit Japanese fears of involvement
in the crisis.
West German Chancellor Adenauer, discussing the Far
Eastern situation with Premier de Gaulle at their recent meet-
ing, reiterated his belief that the USSR harbors real fears of
the Chinese Communists.
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Chinese Communist Aggressiveness in Hong Kong Waters
May Lea =o
Clashes
A number of recent incidents in the Hong Kong area sug-
gests that the Chinese Communists intend to apply the 12-mile
limit to the territorial waters around Hong Kong. On 15 Sep-
tember, two Communist naval vessels nearly forced two Royal
Navy motor launches aground on the Soko Islands, within the
colony's waters, and another British vessel, also in colony
waters, was directed by a Communist shore station to "leave
Chinese territorial waters:' These. provocative actions followed
a recent incident in which a Communist patrol boat fired on a
fleet of fishing junks about 12 miles south of Stanley Peninsula.
British authorities think the incidents may lead to an "ex-
change of :fire, ".since the withdrawal of their patrols would re-
sult-in serious damage to Britain's prestige.
Although the British Government informed Peiping on 13
September that it recognizes only a three-mile limit, London
has for some time assumed that the Chinese Communists
would claim the 12-mile limit, and is aware that protecting
the Hong Kong fishing industry now will be more difficult. Brit-
ish naval strength in the area consists of one destroyer, one
frigate, three minesweepers, and six armed motor launches.
Peiping's 12-mile limit would place any approach to the
colony through its western entrance in Communist waters,
and require considerable detours for ships on southward routes
and drastic curtailment of naval practice.
In the past two months, Peiping has increased its pres-
sure on Hong Kong by other deliberate provocations, includ-
ing an official protest on 27 August and vituperative demon-
strations against the closing of a Communist-controlled school.
In addition to indicating Peiping's abiding interest in "protect-
ing" the colony's Chinese population, the Chinese Communists
may intend their actions to serve as warning to the British
against support of US policy on the Taiwan issue.
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Yugoslav Relations With the Sino- Soviet Bloc
The Sino-Soviet bloc's anti-Yugoslav campaign has ap-
parently evolved into a slow grinding away at the Yugoslavs
without the startling pyrotechnics of the past summer. Mos-
cow's primary objective for the present apparently is to dis-
credit Yugoslav "revisionism" thoroughly, but in such a way
as to "give. the Yugoslavs little basis for retaliation.
Yugoslav officials have recently claimed that the anti-
Yugoslav campaign will intensify markedly this fall. The
gradual deterioration in Belgrade's relations with the bloc
probably will not be checked, but the Yugoslavs may be de-
liberately exaggerating the level that will be reached, prob-
ably in an effort to gain additional Western and "neutralist"
support and to ensure popular backing in Yugoslavia.
Most recently the Yugoslav charge in Washington, with-
out citing any particular cause, commented that a break in
diplomatic relations with Peiping "could. occur any day:' It
does not appear likely, however, that the initiative for such
a move would come from Belgrade, which continues to main-
tain that admission of Communist China into the UN and ex-
panded Western recognition of Peiping are essential steps
in any solution of the Taiwan problem. While it is possible
that Peiping would break off diplomatic. relations, it seems
unlikely at this time, inasmuch as the Chinese Communists
have approved the Soviet policy of maintaining formal state
relations between bloc countries and Yugoslavia.
Moscow has now curtailed the circulation of Yugoslav
publications within the USSR. Recently it reneged on coal
deliveries to the Yuugoslav steel industry. Communist Chi-
nese and Albanian anti-Yugoslav propaganda continues to
be more vituperative than that from the rest of the bloc.
Belgrade has publicly accused the Albanian regime of at-
tempting to incite the Albanian minority within Yugoslavia
to revolt.
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USSR Offers Delivery of Chinese Rice to Indonesia:
Moscow has agreed to supply Indonesia with 200,000 tons
of rice worth about $20,000,000 under a new long-term Soviet
credit. The rice is to be supplied by Communist China. Pei-
ping presumably will divert rice originally allocated for
delivery to the USSR, charging it to the Soviet trade account.
Communist China already is supplying Indonesia with
45,000 tons of rice, half of which is being delivered on credit
available from. the $40,000,000 in aid which China extended
to Djakarta last spring. The remainder is being supplied
as a normal commercial transaction. Indonesia has received
Sino-Soviet bloc economic aid offers totaling $218,000,000,
and more than half of this now has been obligated.
Indonesia's chronic rice shortage will require rice im
ports of 700,000 tons this year.
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11. ASIA- AFRICA
Algerian Government-In-Exile
The Algerian National Liberation Front (FLN) is expected
to announce the creation of an Algerian government-in-exile on
19 September. The timing of the announcement may be intended
to add impetus to the FLN-ordered boycott of the French con-
stitutional referendum in Algeria as well as to permit the Arab
League, which recently. received applications for membership
from Morocco and Tunisia, to admit these three North African
countries simultaneously. The FLN may also have desired to
improve its position before the Algerian question is again de-
bated in the UN General Assembly.
Cairo newspapers listed the moderate Ferhat Abbas as
premier. Six of the 13 "ministers" are members of the FL.N's
executive committee which began to act as.a cabinet last June,
four have been imprisoned near Paris. since their. capture by
the French in October 1956, and the remaining three are mem-
bers of the FLN's 54-member National Council of the Revolu-
tion who lobbied for the FLN in foreign. capitals. The cabinet
is almost equally divided between the young military leaders
of` the rebellion and the political leaders who were drawn in
greater part from the educated and propertied classes.
The location of the government-in-exile in Cairo improves
Nasir's opportunities for expanding his influence in Algeria
and throughout the Maghreb while at the same time diminishing
the moderating influence of Tunisian President.Bourguiba and
Moroccan King Mohamed V over the FLN. Morocco and
Tunisia, which since last spring have sought to dissuade the
Algerians from taking this step and complicating already dif-
ficultMoroccan-Tunisian relations with France, probably will
feel compelled to recognize the government at least as soon as
does the United Arab Republic.
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Greek Cypriot Violence May Be:Opening of Major Campaign
The EOKA outburst on 18 September during which an
American vice consul, a British airman, and two Turkish
Cypriots were wounded in separate but almost simultaneous
attacks--may be the beginning of the expected EOKA campaign
of violence, designed to frustrate implementation of the Brit-
ish plan for limited communal self-government and to dem-
onstrate the need for immediate United Nations attention.
The Greek Cypriots, increasingly dissatisfied with
Athens in its handling of their case in international forums,
are particulary concerned over the scheduled arrival in
Nicosia about 1 October, of an official representative of the
Turkish Government, which they consider a first step toward
partition. Athens in turn has warned that installation of the
Turkish official on Cyprus will have "very serious conse-
quences," but the British are going ahead with preliminaries
aimed at an early implementation of their plan. The Greeks
apparently would like to. have a three-year moratorium on the
Cyprus issue, but there is little likelihood that either the
Turks or the British would agree to this.
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III. ' THE WEST
Contibaj,nCg Political Tension in Venezuela
Rumors of another.-.Coup attempt in Venezuela--follow-
ing the abortive military effort on. 7 September--and the inT
ability of political parties to agree on a common. presidential
candidate reflect the continuing tension in the country.
Political parties have reached, a virtual impasse in
negotiations to implement a program of truce and unity
for the scheduled November elections--a program which
public opinion sees as its principal guarantee against a re-
turn of military rule.
In the latest attempt to reach multiparty agreement on
the elections, junta President Larrazabal has been put for-
ward as a unity presidential candidate by the party, which
is probably third-ranking in strength, but the two other
major parties may reject the proposal. He reportedly
will resign from the junta shortly to enter the race as an.
"independent". in. a move which could split the parties or
cause a radical realignment of political forces.
Larrazabal apparently has the solid backing of the
navy, commanded by his brother, as well as widespread
public popularity and substantial party support, including
that of the Communists. His presidential ambitions, how-
ever, might throw some civilian backing to dissatisfied
elements of the now disorganized ground forces.
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THE PRESIDENT
The Vice President
Executive Offices of the White House
Special Assistant for National Security Affairs
Scientific Adviser to the President
Director of the Budget
Office of Defense and Civilian Mobilization
Special Assistant for Security Operations Coordination
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Special Adviser to the President
The Treasury Department
The Secretary of the Treasury
The Department of State
The Secretary of State
The Under Secretary of State
The Under Secretary of State for Economic Affairs
The Deputy Under Secretary for Political Affairs
The Deputy Under Secretary for Administration
The Counselor
Director, International Cooperation Administration
The Director of Intelligence and Research
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Chairman, The Joint Chiefs of Staff
Commandant, United States Marine Corps
The Director, The Joint Staff
Chief of Staff, United States Army
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Assistant to Secretary of Defense for Special Operations
Deputy Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of the Army
Director of Naval Intelligence, Department of the Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Department of the Interior
The Secretary of the Interior
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
United States Information Agency
The Director
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