CENTRAL INTELLIGENCE BULLETIN - 1958/04/25

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03190718
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: April 25, 1958

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25 April 1958
Copy No. 140
CENTRAL
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25 APRIL 1958
L THE COMMUNIST BLOC
Yugoslav denunciation of Soviet
threats lessens chances for recon-
ciliation.
USSR apparently equipping some new
submarines with antidetection coating.
IL ASIA-AFRICA
Saudi defense Minister asks that US
flag no longer be flown at Dhahran.
Nasir and Suez Canal Company agree
on settlement, resolving issue before
UAR president leaves for Moscow 29
April.
Indonesia - First bloc arms arrived
in Djakarta on 22 April.
0
a forces closing in on Suma-
tran dissidents.
0 Ceylon - Government workers' strike
increases pressure on Bandaranaike.
III. THE WEST
Chile - President Ibanez yielding to
left-wing pressures on copper issue.
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CENTRAL INTELLIGENCE BULLETIN
25 April 1958
DAILY BRIEF
L THE COMMUNIST BLOC
USSR-Yugoslavia: Further developments at the Yugo-
slav party congress make remote the possibility of any
Yugoslav-Soviet party reconciliation. Yugoslavia's top
ideologist, ICardelb, diverged from the relatively mild pre-
pared version of his speech to the congress to reiterate
Yugoslav rejection of Soviet threats to read his country out
of the Communist world. He declared, along with several
other pointed remarks, that "we do not need a Marxist. and
Leninist certificate issued by others" to practice Commu-
nism.
Soviet submarines: Two new Soviet Submarine constru.c-
ton projects in the Far East are being supplied with a ma-
terial which may be intended to prevent detection by anti-
submarine devices. These projects are being shipped large
quantities of "coating rubber" which appears to be designed
to absorb and attenuate active sonar signals. The USSR has,
conducted extensive experiments in antsonar coating since
World War IL (Page 1)
IL ASIA-AFRICA
Dhahran Airfield: Saudi Defense Minister Prince Fahad
has asked that the American flag no longer be flown over the
United States' military installation at Dhahran. This request
is in line with the recent Saudi public statement outlining a
olicy of "positive neutrality" opposing pacts with non-Arab
states, and specifically denvina that Dhahran is an American
"base." (Page 2)
TOPS ET
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Suez Canal compensation: Egypt and the old Suez Canal
Company have reached agreement on compensation; it may
take two months to work out the details. The terms are close
to Nasir's recent offer of about $65,000,000 for the company's
nationalized property, payable in installments, plus some
$14,000,000 which the company would retain from canal tolls
it collected after nationalization. Nasir has wanted a quick
settlement, and the British have pressed the company to re-
solve this issue before Nasir's departure for Moscow sched-
uled for 29 April.
*Indonesia: The military situation in Sumatra is essen-
tially unchanged, with central government troops rapidly
closing in from several directions on the Bukittinggi area.
The Indonesian chief of staff, Nasution, has publicly demanded
the unconditional surrender of the dissident leaders, possibly
in response to reported dissident offers to discuss peace.
Former Vice President Hatta is reported pessimistic as to
the possibility of any compromise agreement between the dis-
sidents and the central government.
The Soviet vessel Ismail, carrying the first known ship-
nt of bloc military equipment purchased by an Indonesian
arms mission, arrived at Djakarta on 22 April.
(Page 3) (Map)
Watch Committee conclusion -- Indonesia: There is no
evidence of Sino-Soviet intention to become militarily in-
volved in Indonesia. Developments continue to favor local
Communist and Sino-Soviet bloc exploitation of the situation.
j 0 A military defeat of the dissidents would not resolve the
basic issues which led to the revolt.
Ceylon: Strikes by railway, postal, and port workers
are placing considerable new pressure on Prime Minister
Bandaranaike, whose government is already plagued by
agitation over recognition of Tamil as an official language.
Should the strikes spread to other government workers and
25 Apr 58
DAILY BRIEF
11
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employees in private industry, they would, as did those of
last November, result in economic disruption throughout
the island. Governor General Goonetilleke has called on
the army and navy to run essential services. Two days be-
fore the strike, he held that conditions were approaching
crisis proportions, and that a general election could lead
to the coming to power of Trotskyite N. M. Perera. Bandara-
naike has successfully weathered similar crises before, how-
ever, and a serious threat to his government has not vet de-
veloped. /
Chile: President Ibanez plans to ask the Chilean con-
gress to repeal the law which bans the Communist party and
may also support the proposal of left-wing presidential can-
didate Allende to increase appreciably the tax burden on US-
owned copper companies. Both moves would be in response
to the recent rise in leftist and anti-US sentiment occasioned
by the copper question. (Page 5)
25 Apr 58
DAILY BRIEF
111
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1
L THE COMMUNIST BLOC
New Soviet Submarines Apparently Being Equipped With
Antisonar Coating
annual requirement for 120 tons of "coating rubber" for
submarines of two new projects under construction at the
Komsomolsk shipyard in the Soviet Far East. This ma-
terial could be used on submarine hulls to absorb the ac-
tive sonar signals of antisubmarine forces and reduce
their effectiveness. Extensive tests were conducted by
the USSR in this field from 1948 through at least 1953.
It is not stated how many hulls of each project, identi-
fied as 629 and 641, are included in the requirement. In-
asmuch as an exterior coating would probably be applied
in the last stages of construction, at least one unit of each
project may be available for delivery to the Soviet Navy
this year.
Since the USSR has practically stopped building con-
ventional attack submarines, construction of classes of
more advanced design, including missile-launching units
and those equipped with nuclear propulsion, may be ex-
pected. Because Komsomolsk, since World War II, has
consistently been the last yard to participate in new major
building programs, construction of these new classes at
Komsomolsk suggests that series production may also be
in progress at other Soviet yards.
TO9EC�I:
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IL ASIA-AFRICA
Saudis Ask That United States Flag Not Be Flown at
bhahran Airfield
The request by the Saudi defense minister on 16 April
that the United States discontinue flying its flag over the
American military installation at Dhahran Airfield reflects
Crown Prince Faysars effort to implement the Saudi Gov-
ernment's recently announced policy of "positive neutrality."
The Saudi request is also in line with the specific declara-
tion in Faysal's foreign policy statement of 18 April that
Dhahran is not an American base, but a Saudi base at which
the United States enjoys certain transit and servicing facili-
ties.
Faysal apparently wants to establish a basis for recon-
ciliation with Nasir� whose propaganda has accused the
Saudi dynasty of yielding sovereignty to alien interests.
The Saudi request is based on the contention that for-
eign flags should not fly on Saudisoil. The American com-
mander at Dhahran explained to Defense Minister Prince
Fahad that the present King's father had permitted the Amer-
ican flag to be flown as long as it remained imbedded in a
concrete block above ground and was not actually in Saudi
soil. The precedent may not be upheld, however, since
the objection to flying the flag is underst7d to be shared
by Faysal.
1CONFID IAL
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Situation in Indonesia
In North Sumatra, where the dissidents appear to
have put up stiffer resistance than in Central Sumatra,
a central government battalion reported on 22 April
that it had withdrawn from Kota Tengah to more defen-
sible positions outside the town in anticipation of a dis-
sident attack. The unit requested air support beginning
23 April. In Tapanuli, however, central government
forces are continuing to advance, apturing Sibolga on
24 April.
Djakarta has lifted its naval blockade of Central
Sumatra, thus permitting the Sumatrans to resume
their barter trade with Singapore. This step apparently
reflects the central government's judgment that, with
the dispersal of the main dissident forces, the time has
come to conciliate the local population in order to draw
away mass support from dissident guerrillas remaining
in the field.
Dissident representatives in Singapore on 20 April
were reported to have told an agent representing himself
as speaking for high military officers in Djakarta that if
the army proved itself capable of acting independently of
President Sukarno and the Communists, the dissidents
would "consider" a rapprochement with the central
government. The dissidents would want a military junta
to run the government and would demand complete am-
nesty. A Djakarta newspaper also has stated that dis-
sident leaders want peace talks to begin. Army Chief of
Staff Nasution's reported reiteration on 24 April of a de-
mand for the unconditional surrender of the dissidents
indicates, however, that for the present there is almost
110 basis for compromise. This is supported by the views
regardless of what tvve of former Vinci Pracitiont Hata, who
saw little hope for compromise
of government might evolve in
Djakarta.
SECET
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74k
equipment purchased by an Indonesian arms mission earlier
this year.
that the vessel carried 2,700 tons of military equipment, in-
cluding military communications vehicles, 25 "workshops,"
and large crates, possibly containing aircraft.
BASTE)
Egyptian President Nasir has agreed to sell Indonesia
Soviet surplus arms,
in Cairo. While the amount of arms allegedly to be sold--
$112,000,000 in value�seems excessive, it is possible that
Nasir has carried out a long-standing promise to Sukarno
to make available some arms to Indonesia.
TOP �ET
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Ouifimf LI
.110
III. THE WEST
Chilean Left Benefits From Anti-US Feeling on
Copper Question
Chilean President Ibanez may support the proposal of
the left-wing Communist-supported presidential candidate
Salvador Allende to increase the tax burdens on the US-
owned copper companies whose investments total over
$500,000,000. The proposal would also divest the US com-
panies of control over the sale of their products. This
action would be in response to increasing leftist sentiment
occasioned largely by irritation against the United States
on the copper question. This sentiment may also lead him
to propose to Congress the repeal of the law which since
1947 has banned the Communist party.
Chile, which receives 65 percent of its foreign ex-
change from copper, has been hard hit by the drop in the
price of copper from 46 cents in 1956 to its present 25
cents per pound. These developments, added to the en-
franchisement of Communist party members, are expected
to greatly strengthen Allende's already good chances in the
4 September presidential elections.
,
25 Apr 58 CENTRAL INTELLIGENCE BULLETIN Page 5
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4 CONFjDENTIAL
DISTRIBUTION
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 Mobilization
Special Assistant for Security Operations Coordination
Operations Coordinating Board
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
The Treasury Department
The Secretary of the Treasury
The Department of State
The Secretary of State
The Under Secretary of State
The Deputy Under Secretary for Political Affairs
The Deputy Under Secretary for Administration
The Deputy Under Secretary for Economic Affairs
The Counselor
Director, International Cooperation Administration
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, 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
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
CONTIJENTIAL
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CENTRAL INTELLIGENCE BULLETIN
25 April 1958
DAILY BRIEF
L THE COMMUNIST BLOC
USSR-Yugoslavia: Further developments at the Yugo-
slav party congress make remote the possibility of any
Yugoslav-Soviet party reconciliation. Yugoslavia's top
ideologist, ICardelj,, diverged from the relatively mild pre-
pared version of his speech to the congress to reiterate
Yugoslav rejection of Soviet threats to read his country out
of the Communist world. He declared, along with several
other pointed remarks, that "we do not need a Marxist and
Leninist certificate issued by others" to practice Commu-
nism.
Soviet submarines: Two new Soviet submarine construc-
tion projects in the Far East are being supplied with a ma-
terial which may be intended to prevent detection by anti-
submarine devices. These projects are being shipped large
quantities of "coating rubber" which appears to be designed
to absorb and attenuate active sonar signals. The USSR has,
conducted extensive experiments in antisonarcoatinl since
(P e 1
WRIWWW1 W OW' -
n Indonesiat�Vhere isii�
ev ence o Sib-Soviet intention to become militarily in-
volved in Indonesia. Developments continue to favor local
Communist and Sino-Soviet bloc exploitation of the situation.
A military defeat of the dissidents would not resolve the
basic issues which 1pd tn the revolt.
Ceylon: Strikes by railway, postal, and port workers
are placing considerable new pressure on Prime Minister
Bandaranaike, whose government is already plagued by
it t* nition o
-
e.
react toot roverment vagker.g,
private industry, they wouict, as Mu tilUbe
last November, result in economic disruption throughout
the island. Governor General Goonetilleke has called on
the army and navy to run essential services. Two clays be-
fore the strike, he held that conditions were approaching
crisis proportions, and that a general election could lead
to the coming to power of Trotskyite N. M. Perera. Bandara-
naike has successfully weathered similar crises before, how-
ever, and a seriatim thrAat tn him renvprnmAnt has not yet de-
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