CURRENT INTELLIGENCE BULLETIN - 1956/09/08

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03178366
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: September 8, 1956

.or pproved for Release: 2019/10/23 CO3178366
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CURRENT
INTELLIGENCE
BULLETIN
8 September 1956
Copy No.
11 a
DOCUMENT NO
NO CHANGE IN CLASS. sfitt,
0 DECLASSIFIED
CLASS. CHANGED TO: TS
NEXT REVIEVIr DATE.
AUTH: 70-2
DATE.
REV1EWER:_
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
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Nor'' Nlue
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CONTENTS
1.
ANGLO-FRENCT MILITARY
ACTION AGAINST EGYPT ON 8 SEPTEMBER
(page 3).
2. SUEZ CANAL PILOT DEVELOPMENTS (
(page 4).
3. FAILURE TO CHECK NASR MAY FORCE FRENCH
CONCESSIONS IN ALGERIA (page 5).
4. KUWAIT AND TUNISIA SEEK TO DUMP STERLING FOR
SWISS FRANCS (page 6).
5. TURKISH CONCERN OVER DEVELOPMENTS IN MIDDLE
EAST .) (page 7).
6. riIRZ7FISH VIEWS ON RELATIONS WITH GREECE
(page 8).
7. DEVELOPMENTS IN SINO-BURMESE BORDER DISPUTE
(page 9).
8 Sept 56
THE ARAB-ISRAELI SITUATION
(page 10)
Current Intelligence Bulletin Page 2
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ANGLO-FRENCH MILITARY
ACTION AGAINST EGYPT ON 8 SEPTEMBER
Comment on:
Britain and France would be unlikely
to undertake military action while the Menzies committee
talks have any prospect of continuing. A decision to act on
8 September would have had to be taken while it was still unclear
how long the talks would last.
Furthermore, the British government
would not be likely to take such decisive action in advance
of the special reconvening of Parliament on 12 September.
Top British spokesmen have consistently indicated that
military action would come only as a last resort after other
devices had been tried, including appeal to the United Nations.
An attack at this time would come a week
in advance .of the long-scheduled 15 September target for
completion of the British redeployment into the eastern
Mediterranean. In recent days these plans appear to have
been slowed down. The Third Infantry Division's departure
from Britain reportedly was deferred until 10 September at
the earliest.
France has given every indication of
moving only in concert with Britain.
8 Sept 56
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N�ppo' New
2. SUEZ CANAL PILOT DEVELOPMENTS
Comment on:
Egypt appears to be having some suc-
cess in obtaining pilots for the Suez
Canal. Between 1.5.0 and 200 new pilots
would be required if most of the pres-
ent non-Egyptian pilots left.
Egypt has received a firm offer from
East Germany of eight pilots. In addi-
tion, at least one Pole, two Rumanians,
and several Russians have applied.
Egypt is reviewing the applications of
10 to 15 Greek pilots,
Radio Peiping announced on 5 Septem-
ber that 29 pilots in Shanghai had "vol-
unteered" for service with the Egyptian
canal company, and on 6 September the
four Belgian cand-
ictates had been accepted. The Moscow press reported on
7 September that the first group of Soviet pilots had left for
Egypt.
8 Sept 56 Current Intelligence Bulletin
Page 4
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Now
3. FAILURE TO CHECK NASR MAY FORCE FRENCH
CONCESSIONS IN ALGERIA
Premier Mollet's chief hope of mini-
mizing the threats to his government
over the Suez and Algerian crises ap-
pears to lie in a radical shift in Algerian
policy�possibly along the lines of a
negotiated cease-fire. He may undertake
this even at the risk of strong attacks by
the right on the government when the
National Assembly reconvenes on 2
October.
The American embassy in Paris reports
a growing conviction among government officials that Minis-
ter Lacoste's Algerian policy of pacification before negotia-
tion must be altered before November since France has
failed to achieve a strong negotiating position in either the
Suez affair or Algeria.
Despite some weakening in the ultra-
nationalists' feeling on Algeria, as evidenced by Marshal
Juin's suggestion of a federal solution, there is still strong
resistance in the assembly to negotiations with rebel leaders.
Mollet's position will be further jeopardized if Minister
Lacoste does not respond favorably to a switch in policy.
Much of French official opinion continues
to be that unless Premier Nasr is removed from power or
suffers a loss of prestige, there is no hope of holding Algeria.
8 Sept 56
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VA-4 AL
4. KUWAIT AND TUNISIA SEEK TO DUMP STERLING
FOR SWISS FRANCS
Switzerland has been approached by
representatives of Tunis and Kuwait
with specific proposals for converting
Tunisian and Kuwait reserves of for-
eign excnange from pounds sterling to Swiss francs. A
spokesman for Kuwait intimated his country wished to con-
vert 250,000,000 free sterling pounds into Swiss francs and
a similar sum into dollars and other currencies.
Swiss financial authorities have been
informed by Arab representatives that the Arab bloc is
beginning to regard the Swiss franc as the only currency
whose free convertibility is completely assured, and that
similar requests from other Arab countries will follow soon.
Swiss authorities see serious technical
monetary objections to the mobilization of the very large
volume of Swiss francs which acceptance of the Arab pro-
posals would involve. Swiss monetary authorities have not
made any decision on the problem.
Comment The Arab proposal presents a
dilemma to the Swiss government, whose
liberal economic trade policies commit it to maintain free
money markets in Switzerland. In view of the serious con-
sequences to the pound sterling of such Arab action, the
British exchange control authorities presumably would make
every effort to prevent the transfer of sterling held by the
Arab bloc. The sheik of Kuwait's huge oil royalties are one
of the largest private sources of investment capital in the
London money market.
8 Sept 56
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5. TURKISH CONCERN OVER DEVELOPMENTS IN
MIDDLE EAST
Prime Mihister Menderes
Turkey feels subjected to pressures from
all sides because of developments in the
Middle East, and is increasingly dependent on the leadership
of the United States.
Menderes criticized a lack of American
leadership in the area and the failure to keep Ankara ade-
quately informed. He feels that Turkey should be regarded
as more than a junior partner. He probably overemphasized
his country's foreign problems in order to underline its stra-
tegic position.
The prime minister said that besides Greek
pressures on the Cyprus issue, which have virtually killed
the Balkan pact, Turkey is concerned over Nases growing in-
fluence in the Arab states. He added that Turkey "cannot
stand �idly by" while Syria, having a 500-mile common bor-
der with Turkey, becomes more vulnerable to Soviet and
Egyptian penetration.
8 Sept 56
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Tvairr
6, BRITISH VIEWS ON RELATIONS WITH GREECE
British Foreign Office permanent un-
der secretary Kirkpatrick states that
Britain recognizes the importance of
maintaining the ICaramanlis government
reece, an hat its probable successor would "no doubt"
be more intransigent on the Cyprus issue.
Kirkpatrick stated, however, that
Britain does not plan to respond to the recent indications
of a more conciliatory Greek attitude by initiating discus-
sions with Athens on the British constitutional proposals
for Cyprus now being prepared. He said Greece should
demonstrate its changed attitude publicly, or at least to
the Cyprus ethnarchy and the Greek Cypriots.
Comment Kirkpatrick's statement may indicate
a reversal of Britain's estimate of the
probable situation in Greece were ICaramanlis to fall.
London does not appear, however, to have overcome its
suspicion of Karamanlis sufficiently to set about improv-
ing relations with his government.
8 Sept 56
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7� DEVELOPMENTS IN SINO-BURMESE BORDER DISPUTE
Kne tsurmese ambassador in Peiping has
urged Rangoon that the press campaign
against Communist China in connection
with the border dispute be moderated
and that Burma seek intervention by the
Colombo powers only as a last resort,
in late August that Chou En-lai had been extremely annoyed
over the press attacks and that the Chinese premier assumed
the Burmese government had inspired these attacks.
Chou appeared sensitive to suggestions
that Burma might appeal to the Colombo powers to inter-
cede with Peiping on its behalf. He was anxious that India
and Indonesia be kept out of the dispute.
U Nu has been unsuccessfully seeking to restrain
Premier Ba Swe from antagonizing the Chinese Commu-
nists too openly. Ba Swe reportedly intends to "educate"
those Burmese who still do not believe the Chinese Commu-
nists are guilty of subversion in Burma.
Comment
Prime Minister Ba Swe will continue,
to take a much firmer stand in all matters affecting Burma's
relations with the Sino-Soviet bloc than did his predecessor,
U Nu.
8 Sept 56
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*gale
THE ARAB-ISRAELI SITUATION
(Information as of 1700, 7 September)
8 Sept 56
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