CURRENT INTELLIGENCE BULLETIN - 1957/03/30

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03160437
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 17
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: March 30, 1957

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CURRENT
INTELLIGENCE
BULLETIN
/0/
3.5(c)
30 March 1957
copy No.
131
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RaVIEVVER
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
SECRET�TOP- re
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CONTENTS
MARSKJOLD REPORTS ON EGYPTIAN TALKS
'V (page 3).
2. ISRAEL CHARGES PRESENCE OF SAUDI TROOPS IN
JORDAN VIOLATES 1949 ARMISTICE
(page 5).
.AN 3. "NONPOLITICAL" SENIOR SYRIAN OFFICERS PLANNING
COUP (page 6).
\\4. USSR REPORTEDLY TO CLOSE SEA OF OKHOTSK TO
0 FOREIGN FISHING BY 1959 (page 7).
5. USSR URGES JAPAN TO SUPPORT NUCLEAR TEST BAN
(page 8).
6. JAPAN TO SEEK ATOMIC POWER TREATY WITH USSR
U` page 9).
7. ITALIAN OIL COMPANY BEGINS PRESS CAMPAIGN
AGAINST WESTERN OIL INTERESTS IN MIDDLE EAST
(page .10).
tA. INDIA MAY APPROACH UNITED STATES FOR LOAN
(page 11).
\69. CHINESE NATIONALIST AND JAPANESE LEADERS DISCUSS
0 ASIAN TRADE DEVELOPMENTS (page 12).
4-10. LAOS MAY EXCHANGE DIPLOMATIC MISSIONS WITH USSR
0\ (page 13).
YA11. DISSIDENT CENTRAL SUMATRAN COUNCIL REPORTED
D WEAKENING (page 14).
'6 12. MASS RELOCATIONS REPORTED IN BULGARIA
�e) (page 15).
0\4,113. TENSIONS SAID TO BE RELAXING IN POLAND
(page 16).
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1
1. HAMMARSKJOLD REPORTS ON EGYPTIAN TALKS
Reference:
Secretary General Hammarskjold told
Ambassador Lodge on 28 March he be-
lieves that, as a result of his talks with
the Egyptian government, satisfactory
arrangements between Egypt and the
�UNEF in the Gaza strip now exist. Hammarskjold said
Egypt accepted a memorandum prepared by General Burns,
the UNEF commander, which set forth the conditions which
Burns feels are necessary if the UNEF is to prevent infil-
tration across the Israeli-Egyptian armistice line and main-
tain order inside the strip.
Egypt did not make deployment of UN
forces on Israel's side of the line a condition to the contin-
uation of the UNEF in Gaza, except that UNErs right to
shoot Egyptian infiltrators was conditional on a similar right
to shoot Israelis. The Egyptians did definitely promise Ham-
marskjold that no Egyptian troops would move into Gaza, and
he believes the Egyptians "very much want" to keep the UNEF
there. Hammarskjold said he told the Egyptians that if feda-
yeen raids were renewed he would order the UN force to with-
draw, and he regards this threat as giving him some leverage
on Egypt's behavior.
The secretary general confirmed previous
reports that the Egyptians have no intention of asking the UNEF
to leave its positions at the entrance of the Gulf of Aqaba. He
said Cairo is in fact "closing its eyes" to the Aqaba situation
and reported that Egyptian foreign minister Fawzi avoided
commenting on what Egypt's action would be if Israeli ships
proceeded through the Tiran Straits.
Regarding Egypt's memorandum of 26 March
on the Suez Canal, Hammarskjold said he had found the Egyptians
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very difficult to budge on any of its points. At his insistence,
however, they had named the Bank of International Settlements--
which he considered as good as the IBRD--for the receipt of
tolls and had agreed to consider the memorandum as only a
draft pending comments from other governments. Hammar-
skj old emphasized regarding the outcome of his talks that
"nothing is agreed with me ort Gaza or the Suez"; he intends
to put the Egyptian promises on Gaza before the UN advisory
committee on the use and functions of the UNEF.
�
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2. ISRAEL CHARGES PRESENCE OF SAUDI TROOPS IN
AN VIOLATES 1949 ARMISTICE
Comment on:
The Israeli Foreign Ministry warned
Jordan on 27 March that deployment of
Saudi forces to the Jordanian port of
Aqaba would be a violation of the 1949
armistice agreement. Although Saudi
Arabia made a token participation in
the 1948-49 war against Israel, it did
not sign an armistice agreement as did
the states bordering Israel.
A Saudi regiment of about 2,500 men has
already been stationed in northern Jordan for several months.
IsraePs warning reflects its sensitivity over its own port of
Eilat following a recent Egyptian announcement that Saudi
forces would be stationed in the Jordanian port of Aqaba, only
a few miles away.
Jordan has deployed an infantry battalion
with armored car and light antiaircraft support in the Aqaba
area, and reportedly is deploying a tank battalion near Maan.
the Jordanian command
wishes the Saudis to move an additional infantry battalion, a
reconnaissance company, and a field artillery battery�about
1,200 men--into the Aqaba area.
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3. "NONPOLITICAL" SENIOR SYRIAN OFFICERS
PLANNING COUP
The "Damascene" officer group in the
Syrian army is planning a coup dtetat
in the next few weeks,
The group may
co-operate witn Chief of Staff Nizam al-Din, Colonel Nufuri,
and other antileftist officers at first, but its ultimate goal
is to replace the chief of staff with General Daghestani, who
now commands forces on the Israeli border, and to elimi-
nate politically active colonels of both the Nufuri and Baath-
ist officer groups.
Comment The Damascene officer group is made
up of senior army officers who want to
take the army out of politics and restrict its activities to
the "barracks." The capabilities of this group to operate
alone against both the Baathist and Nufurf officer groups
simultaneously appear questionable.
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4. USSR REPORTEDLY TO CLOSE SEA OF OKHOTSK TO
FOREIGN FISHING BY 1959
Comment on:
The USSR has informed Japan that by 1959
at the latest the Sea of Okhotsk will be per-
manently and entirely closed to all foreign
fishing, but that the Japanese may be al-
lowed to fish there in 1958, according to Ambassador Bohlen.
This move, if carried out, will be the strongest ever made by
theUSSR in denying access to the open seas around Siberia.
Since World War II, the USSR has appeared
secretive about the area from a security point of view, and
permanent restrictions might be related to military activities
or weapons testing in the area. Closure would lessen the pos-
sibility of any future return of the Southern Kurils to Japan.
The Soviet Far East has become the most important fishing
region in the USSR, and closure would pre-empt the area for
rapidly expanding Soviet fishery activities. The 1956 catch
in the Soviet Far East increased an estimated 57 percent over
1953 and current plans call for significant expansion of fish-
ing fleets and shore facilities. The exclusion of Japanese fisher-
men would have a serious impact on the Japanese industry since
even in a restricted season the area accounted for approximately
10 percent of the 1956 salmon catch.
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5. USSR URGES JAPAN TO SUPPORT NUCLEAR TEST BAN
Soviet deputy foreign minister Zorin,
the USSR's chief delegate to the disarm-
ament subcommittee talks in London,
told
that the proposal sponsored
in me UN oy Japan, Canada and Norway for registration and
limitation of tests would serve no purpose, and that Japan
should join India in proposing the elimination of nuclear tests.
Soviet ambassador Malik, also present, declared that the
three-power plan would actually serve to increase tests.
Zorin added, however, that the USSR was expressing no at-
titude in the subcommittee.
When Japanese ambassador Nishi asked
Zorin if the USSR would agree to a limitation of tests, Zorin
replied that the USSR would consider it. Nishi believes the
Soviet Union firmly intends to oppose the three-power agree-
ment and doubts whether it would support a limitation of tests.
Comment The USSR, which advocates an agreement
to stop nuclear tests immediately, has been
capitalizing on efforts by the Japanese to promote at least a
limited agreement on the cessation of nuclear tests. Zorin
told the subcommittee on 27 March that the only way to pro-
ceed with the discussions was to consider nuclear tests first.
He also is pressing for personal appearance before the sub-
committee of representatives from Japan, Norway, India and
Yugoslavia--all of which are promoting either a limitation or
banning of tests.
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6. JAPAN TO SEEK ATOMIC POWER TREATY WITH USSR
Comment on:
The Japanese cabinet decided on 29 March
to open negotiations for an atomic power
treaty with the Soviet Union apparently as
part of the government's program to draw
upon a wide range of experience and material resources in
developing Japan's atomic energy industry. Atomic Energy
Commission chairman Uda's statement that Japan's action
was based on the acute power shortage reflects the belief of
Japanese industrialists that Japan is reaching the limit to
which water and coal resources can be exploited and that eco-
nomical nuclear power must be made available as soon as
possible.
A Socialist Diet member who serves on
the Joint Committee for Atomic Energy indicated, following
a visit to the USSR during September and October 1956, that
Moscow was willing to conclude a technical agreement with
Japan on the peaceful uses of atomic energy. He said once
the agreement was made the USSR would supply atomic re-
actors, atomic fuel and other necessary supplies on a purely
commercial basis with no strings attached. A Foreign Min-
istry official subsequently expressed the belief that Japan
would be offered an atomic agreement following the restora-
tion of diplomatic relations with Moscow.
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7. ITALIAN OIL COMPANY BEGINS PRESS CAMPAIGN
AGAINST WESTERN OIL INTERESTS IN MIDDLE EAST
Reference:
Mattei reportedly suggested the following
treatment of the pending Italian-Iranian oil deal: implica-
tion that the deal would go through "unless British and US
pressures prevented it;, reference to participation by German
and Japanese interests, reducing Italian capital outlays; and
claims that Mattei had rejected an attempt by the Iranian Con-
sortium to have him call off the deal by giving him a "small"
share in the Consortium. The claim that his company's profit
split with the Iranian government would not violate the 50/50
principle was also to be emphasized.
An article by the Rome correspondent in
the 28 March New York Times and American wire service
dispatches from Rome have reported similar statements. A
broadcast to Egypt in Arabic used Matters
approaches and said King Saud will study the Italian deal with
a view to asking American companies to amend their oil agree-
ments.
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8. INDIA MAY APPROACH UNITED STATES FOR LOAN
Comment on:
Indian finance minister Krishnamachari
told the American ambassador in New
Delhi on 25 March that India intends to
ask the United States whether this is a
propitious time for conversations on the gravity of India's
foreign exchange position. Indian foreign exchange re-
serves, which were scheduled to decline by $420,000,000
during the five years of the plan, have already fallen by
$425,000,000 in the first year, and would have fallen even
further had India not borrowed $127,000,000 from the Inter-
national Monetary Fund. Krishnamachari said he wants to
go to Washington this year for "intimate discussions" of
the matter with American officials.
India's Second Five-Year Plan (1956-61)
originally had a $1.68 billion gap which the government
hoped to close by foreign assistance. This figure has since
increased to about $2.5 billion due to price rises and more
realistic cost estimates for certain projects. India has thus
far obtained about $500,000,000 of this sum and expects to
secure another $500,000,000 from the International Bank for
Reconstruction and Development and a continuation of US aid.
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V
9. CHINESE NATIONALIST AND JAPANESE LEADERS
DISCUSS ASIAN TRADE DEVELOPMENTS
Reference:
Chinese Nationalist foreign minister
George Yeh has discussed with Japa-
nese prime minister Kishi Taipei's
growing concern regarding pressures
in Japan for increased trade with Communist China. Yeh
reportedly informed Kishi that he recognized Japan's need
to increase exports but felt that Japan could locate new mar-
kets in free Asia, and that it is in Japan's interest to do so
rather than to build up Communist China to a point where
It will become a serious competitor for markets in South-
east Asia.
Speaking "confidentially and personally,"
Yeh told Ambassador MacArthur that there might have to be
increased flexibility in the Chinese Communist embargo list,
with even a few items removed, to avoid the risk of a break-
down of the CRINCOM control system. Nationalist policy,
however, will probably continue to oppose any modification
of current restrictions.
Yeh states that Kishi reacted favorably to
his endorsement of some kind of Asian development arrange-
ment which would include a regional fund to which free Asian
nations--along with the United States�would contribute.
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31,(L-AcE., I
10. LAOS MAY EXCHANGE DIPLOMATIC MISSIONS
WITH USSR
Comment on:
The belated announcement by the Laotian
Foreign Ministry on 27 March that the
USSR had recognized Laos--a step taken
formally in October--once again raises
the prospect that Laos may soon exchange
diplomatic representatives although Prime
Minister Souvanna Phouma on 28 March
told the American ambassador that Soviet
representatives would not be received for
"two or three years!' As a result of the Soviet repression in
Hungary, the Laotian cabinet last November reversed a deci-
sion to exchange representatives with the USSR.
In any decision to develop closer contacts
with the Soviet Union, Souvanna would probably be influenced
by a desire to improve the climate of the deadlocked Pathet
Lao negotiations by giving substance to his agreement last
fall with the Pathets on a neutral foreign policy.
Prince Petsarath, in his first press inter-
view since returning to Laos from exile, called for the open-
ing of diplomatic relations with Communist China and North
Vietnam. Laos took a step in this direction on 16 March when
it signed an agreement with the Viet Minh on postal services
and telecommunications. Full diplomatic relations with Hanoi
and Peiping, however, will probably depend on a settlement of
the Pathet Lao problem.
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V V
11. DISSIDENT CENTRAL SUMATRAN COUNCIL
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.The dissident "Benteng Council" now
?ruling Central Sumatra is beginning to
weaken as the result of factionalism
and economic deterioration,
"Political and
economic adventurers" are said to be taking advantage of
the inexperience of council members and are taking most
of the proceeds of the business enterprises which had been
expected to support the province. Moreover, local pro-
duction and shipping facilities are inadequate to carry out
the ambitious development program planned for Central
Sumatra.
Although the Benteng group is still op-
posed to the central government, the Communist Party,
and Sukarno's concept of government, Lt.- CoL Hussein,
who heads the council, and Colonel Simbolon are becoming
disheartened and state that everything depends on former
vice president Hatta.
Comment Benteng leaders made no arrangements
before seizing the Central Sumatran gov-
ernment on 20 December to sustain themselves economically
in a prolonged struggle with Djakarta. They apparently as-
sumed that business would be conducted as usual and that
foreign companies would pay taxes locally rather than to the
central government.
Reports have been received suggesting
that Sukarno from the beginning has expected that the auton-
omy movements would develop internal frictions which could
be exploited in the interest of maintaining a unified state.
Previous reports from the area have indi-
cated that Hussein was in control and had popular support.
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12. MASS RELOCATIONS REPORTED IN BULGARIA
Thousands of "former bourgeoisie" in
Sofia are being arrested for deportation
to the provinces, according to a 28
March report to the Greek Foreign Min-
istry from its legation in Sofia. The report states that while
there have been many arrests since the events in Hungary
last year, the current wave of arrests is on an unprecedented
scale.
Comment The regime may be attempting to avoid
any trouble arising from unrest due to
heavy unemployment and reductions in the bureaucracy. Re-
cent speeches by Bulgarian leaders, however, have not re-
vealed unusual concern with public discontent. Rumors of
public demonstrations in January have not been confirmed.
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13. TENSIONS SAID TO BE RELAXING IN POLAND
The exaggerated fears and pressures of
the revolutionary period have receded,
according to a usually reliable source
who left Warsaw in early March. The
source feels that the workers have ceased to expect miracles
and are not under the illusion that conditions will change over-
night.
The food supply in towns has improved as
a result of increased marketing by farmers who have left the
collectives and are benefiting from the increased sales of
their products. The improvement may also result from re-
lease of reserve food stocks.
,Comment Relaxation of tensions would ease some
of Gomulka's problems, but he still faces
serious difficulties in imposing his control over the party in
order to neutralize the ultraconservative Natolin faction, over-
come the bitter disillusionment of the liberals, and enlist sup-
port of the uncommitted mass of government and party func-
tionaries.
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