CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A004300250001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 12, 2016
• Document Release Date: August 7, 2002
• Sequence Number: 1
• Publication Date: February 13, 1959
• Content Type: REPORT

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13 February 1959
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CENTRAL INTELLIGENCE BULLETIN
13 February 1959
DAILY BRIEF
13 February or talks on economic and technical assistance.
King Mahendra committed himself to accept Soviet aid dur-
ing his visit to Moscow in June 1958, but he has since lost
enthusiasm for Soviet assistance an will probably be cau-
tious in accepting Soviet aid offers.
(Page 1)
I. THE COMMUNIST BLOC
USSR-Neal: A Soviet delegation arrived in Nepal on
the oil company operations will be strengthens .
ting will increase, and forces favoring greater pdartici ion in
II. ASIA-AFRICA
Middle East oil: Price cuts in Middle East oil may be
imminent. This development, following the recent cut in the
Venezuelan crude price resulting from the current world-wide
oversupply of oil, is likely to dismay Arab government offi-
cials. The Arab governments have actually planned on larger
oil revenues. Arab pressure for more favorable profit-split-
France? Tunisia disclosure of a French es-
-
-- - o
1Alegia
ment concl ded last August to modernize Tunisia's telecommu-
nications
h s stem
ora
deter
missed all French employees in its Postal, Telephone, and
Tunlsla
pionage network in Tunis probably will result in a substantial
tion of its relations with France. Tunisia has dis-
i
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France: Paris intends to propose to the North Atlantic
Council that the NATO area of responsibility be extended to in-
clude the Sahara. France's future relations with NATO may
largely be determined by the council's reactions to the proposal;
Premier Debrd recently emphasized that unless France obtains
NATO backing for its Algerian policies it would be compelled to
maintain its NATO-committed Mediterranean naval units "sep-
arately." De Gaulle, however, explained that such units would
"rush" to join NATO forces in case of -IF
LATE ITEM
*USSR-Iran: Moscow has acted quickly to establish a record
designed to justify retaliatory moves against the Shah's regime
by broadcasting a Soviet memorandum handed to the Iranian for-
eign minister in Tehran on 10 February, following the breakdown
of negotiations for a nonaggression pact. The lengthy memorandum
13 Feb 59 DAILY BRIEF
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describes in detail Soviet efforts to meet the Shah's initiative
by accepting Iran's initial draft and by conceding that Iran could
remain in the Baghdad Pact. Moscow charges, however, that
the decision of the Shah's government to renounce its own pro-
posals was "prompted by the Americans," and marks a "turning
point" in Soviet-Iranian relations. In reminding Tehran that the
1921 Treaty of Friendship obligates Iran "not to permit the con-
version of its territory into a base for military action against
the USSR," the memorandum suggests that Moscow is prepared
to denounce a US-Iranian bilateral defense agreement as a vio-
lation of the treaty. F
IV. SIGNIFICANT INTELLIGENCE
REPORTS AND ESTIMATES
(Available during the preceding week)
Implications for the Free World and the Communist Bloc of
Growing Nuclear Capabilities. NIE 100-5-59. 3 February 195
25
01
4
9.
Consequences of a Soviet-Iranian Nonaggression Pact.
SNIE 34-2-59. 3 February 1959.
j 59 DAILY BRIEF iii
13 Feb
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I. THE COMMUNIST BLOC
Soviet Delegation to Begin Economic Assistance Talks in Nepal
Moscow has announced that a Soviet delegation arrived in
Nepal on 12 February to open talks on economic and technical
assistance. King Mahendra had committed himself to accept
Soviet aid during his visit to the USSR in June 1958 and had agreed
that, after study of specific assistance projects, his government
would negotiate final details with a team of Soviet experts. How-
ever, Mahendra apparently had been discouraging the visit of the
Soviet delegation
The Soviet offers, renewed during a visit to Katmandu by
the Soviet ambassador in early December, reportedly involve
a variety of projects, including roads and road-building equip-
ment, a hydroelectric plant, and civil air assistance. Moscow
would lend Nepal up to $7,500,000 to finance the cost of the projects.
The Soviet announcement of the delegation did not refer to
the subject of a visit to Nepal by President Voroshilov, c oscow
has reportedly exerted heavy pressure on Katmandu for the long-
planned visit following Voroshilov's trip to India starting 24 Febru-
ary, but Katmandu has attempted to put it off until next fall, using
as an excuse the parliamentary elections scheduled to be held be-
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tween 18 February d 3 April under the new constitution.
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II. ASIA-AFRICA
Impending Price Cuts in Middle East Oil
Plans of Western oil companies to cut prices of Middle East
crude 5 to 10 percent within the next few days probably will set
off a round of demands by area governments for a larger share of
the profits in an effort to stave off revenue losses.
The threat of price cuts, the first since 1953, comes at a
time when Arab governments are demanding continued substan-
tial production increases and a larger say in company operations.
The reaction probably will be most severe in Saudi Arabia, which
has experienced only moderate increases in revenues during the
past two years in comparison with other Middle Eastern countries.
Saudi Arabia's director of petroleum affairs last
week indicated that his government was considering ways to put
pressure on the Arabian-American Oil Company (Aramco) to
assure a continually rising income.
Cuts in the posted. prices of Middle East crudes would be in
reaction to cuts in Venezuela last week and reflect the world
oversupply of crude oil. In recent years, Middle East output has
been increasing at a faster rate than world demand, causing pro-
duction declines or relatively slower rates of growth;. in other
parts of the free world.
This pattern, however, apparently now is due for a change.
Petroleum consumption in the free world is expected to grow be-
tween 5 and 10 percent annually over the next few years. Since
the remainder of the free world's oil producers are seeking a
larger share of this increase, expansion of Middle East output
presumably will have to be curtailed. Coupled with lower rev-
enues from lower prices, this condition is likely to increase ten-
sions between the companies and. the local governments in the
area.
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Tunisia's Relations With France' Again Deteriorate
CDisclosures regarding the operations in Tunisia of a French
espionage network- -together with President Bourguiba's claim to
a portion of the Sahara and the French shelling on 9 February of
a Tunisian village--probably will result in a substantial deteriora-
tion in Tunisia's relations with France. The espionage network
involved some Tunisians as well as French telephone and. embassy
employees. It is reported to have been directed. by an assistant
French military attache, and to have sought information on Alge--
Tian rebel activities and contacts with high Tunisian officials by
tapping telephone lines, including Bourguiba's telephone
he Tunisian secretary of interior claims that the network
operated. under cover of a French technical assistance program
concluded in August. Under this program, France was to expend
$1,640,000 toward the replacement of the Tunisian telephone sys-
tem. This project and a contract let to a French firm in Novem-
ber may both be terminated,
part of the emphasis Tunisia is placing on these disclosures
maybe the result of France's refusal last month to transfer
Tunisia's franc zone holdings to Tunisian control and to under-
write Tunisian financial losses incurred by the devaluation of the
French franc. The incident will be used to reduce still further
France's influence and control in Tunisia. The dismissal of all
French employees in the postal, telephone, and telegraph system--
all of whom were under contract- -was such a move, and will win
popular acclaim because of widespread unemployment among
l
ti
t
b
a
an
s
Tunisians. Bourguiba probably will also demand a su
reduction in the 650-man French Embassy staff.
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III. THE WEST
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proposal to extend the NATO area of responsibility to include
France to Propose Extension o NATO Area to Include Sahara
he French Foreign and Defense ministries have drafted a
the "whole of the Sahara,"
The French definition of "Sahara" appears to be in geograph-
was removed from NATO military jurisdiction in 1954 at France's
requesf)
ical terms, in view of De Gaulle's previous private allusions to
extending the NATO area to the Sahara "as far as the Red Sea."
The new proposal stems from official French views that NATO
is being outflanked to the south and. that NATO support of France
in North Africa, particularly in Algeria, is vital not only to
France but to the whole Western world. French attitudes toward
Egyptian President Nasir suggest that the proposal is also con-
ceived in part as blocking further Egyptian influence
Premier Debrd bluntly told. Secretary Dulles on 6 February
that unless France was backed in its Algerian policy it would re-
tain its Mediterranean naval units "separately." De Gaulle as-
sured Dulles, however, that the French fleet would "rush" to
NATO and become part of NATO forces in case of warp Algeria
De Gaulle has previously criticized the "inadequacy" of
present NATO naval command arrangements covering the Med-
iterranean and Atlantic communications between France and
North Africa, and has indicated his desire that a new naval com-
mand be established. combining these areas under a French of -
ficer. Debrd told. General Norstad in late January that France'sA
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allies did not fully appreciate the contribution France was mak-
ing to the alliance by its effort in Algeria)
CThe vehemence with, which the French are presenting these
views suggests that Allied reaction will be a major determinant
in France's attitudes toward future relations with NATO.
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LATE ITEM
Soviet reaction to breakdown of talks with Iran
The USSR's initial reaction to the breakdown of negotiations
with Iran for a nonaggression pact attempts to establish a record
designed to justify retaliatory moves against the Shah's regime.
On 12 February Moscow broadcast to Iranian listeners and its
home audience a Soviet memorandum handed to the Iranian for-
eign minister in Tehran which sets forth a step-by-step account
of the negotiations. After describing Soviet efforts to meet the
Shah's initiative for a pact, the memorandum charges his govern-
ment with following "an evil game" in order to mislead public opin-
ion, particularly in Iran.
The memorandum points out that the USSR not only accepted
Iran's initial draft of a treaty, but also conceded that Iran might
remain in the Baghdad. Pact and was even willing to discuss revi-
sion of the Soviet-Iranian 1921 Treaty of Friendship.
Moscow claims that the decision of the Shah's government to
renounce its own proposals--a point repeated several times--was
"prompted. by the Americans," and marks a "turning point" in
Tehran's relations with the USSR. According to the memorandum,
this decision is proof of a "hypocritical and insincere policy"
toward the USSR which will lead to "serious consequences."
The memorandum foreshadows other bloc moves aimed at dis-
crediting the Shah and stimulating apprehension and discord within
Iran. The broadcast renews Soviet accusations that the Shah's re-
gime does not represent either the national interests of Iran or the
aspirations of the Iranian people.
The memorandum also reminds the Iranian Government that
it is obligated under the 1921 Treaty of Friendship "not to permit
the conversion of its territory into a base for military action
against the USSR." This suggests that Moscow is prepared to con-
demn a US-Iranian bilateral defense agreement as a violation of
the treaty.
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CENTRAL INTELLIGENCE BULLETIN
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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
Executive Secretary, National Security Council
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
Assistant Secretary of Defense for International Security Affairs
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
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
The Department of Commerce
The Secretary of Commerce
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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