CENTRAL INTELLIGENCE BULLETIN - 1960/09/02

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03184167
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 18
• Document Creation Date: March 17, 2020
• Document Release Date: March 26, 2020
• Publication Date: September 2, 1960

ApprIviiiiisy3164167
3.3(h) (2
3.0)
2 September 1960
Copy No. C 7
CENTRAL
INTELLIGENCE
BULLETIN
SOCUMENT NO, 2.
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101�41
2 SEPTEMBER 1960
I. THE COMMUNIST BLOC
Soviet and Communist Chinese press ar-
ticles make veiled references to economic
sanctions.
Khrushchev bids to influence Japan's
elections by hinting at concessions on
Kurils.
II. ASIA-AFRICA
India--Krishna Menon considering send-
ing military mission to Moscow to seek
data on helicopters and other equipment.
Burmese Army leaders dissatisfied with
Nu government.
Japanese Government may ask cancella-
tion of Dutch aircraft carrier visit.
Situation in the Congo.
III. THE WEST
Cuba seizes additional US-owned busi-
nesses; threatens seizure of remainder. (D
LATE ITEMS
0 East Germany may continue travel
curbs after 4 September, possibly hop-
ing to reduce refugee flow.
� Situation in Laos.
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Con L,:3: UN oosa-c;
_
Tshombe must fa caiF
nOrthern.Katanga if an'
an invasion. - The eifG
assistance In Western
The central COMITlitt
patty IS again planning to ._..
Lumumba,
Is reported pressing K.
force him to reshuffle
n i,PL'%( e6ifjr:ilt
of a ril in
� r: et
a KatattEta cle:zifil ion to secure
notioi'Ir to be uhstic(
,f President Kasavuba's Abako
einpt the early ove-rthrow of
'Ihe comt=iiitttNe
11-1u to summon Luniumba and
bit or rii nins
ti support of ifiajor t rti � .re..tot-4 in the wc..-Cei�ti �onyo. .,-lev-
@kal prominent politicians mda few dissatisfied senator%
from Lumumba's party. committee is said to be consid-
ering the assassination LuimiTiba and to have tircatica;cri
to kill KasaVubti's famii ii he does not .cooperate
THiT, WEST
Cuba: Armed Forces ' ..niter Raul Castro told a labor
featly early mil .Septernhef that American private businesses
remaining in Cuba will he seized one by one "until we elim-
inate the last rusty tentacle of colonialism '' Later on the
tune day, Castro seized US-owned tire and rubber compa-
iiittb Valued at about- c.,430.t)00,600 The mass rally scheduled by
Fidel Castro for 2 September "to give Cuba's answer" to the
tecent OAS meeting may e the occasion to announce further
bittif0�. Castro will
at that time announce the nationalization of the local branches
of American banks. Of approximately $1.,000,000,000 in private
Atherican investment in Cuba when Castro came to power, only
Some $150,000,000 remains in US hands.
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II. ASIA-AFRICA
India USSR: Defense Minister Krishna Menon report-
edly is considering sending a military mission to Moscow
for further evaluation of Soviet helicopters as well as to ob-
serve other types of military equipment. The three Indian
military services strongly oppose the proposal, gs they did
ithe purchase of one Hound (MI-4) helicopter in August and __,
Menon's interest in buying five or more of these Soviet crattj
Nehru has used every opportunity recently to demonstrate
New Delhi's cordial relations with Moscow as a means of in-
fluencing Peiping. While it is doubtful that he would feel
that a reversal of India's general policy against procurement
of Soviet arms is warranted now by either political or military
considerations, he might approve the purchase of additional
helicopters. , (Page 4)
6
Burma: Army leaders in Burma are becoming increas- 6 le---
ngly-Wiliatis ed with the government of Prime Minister Nu, �s3JL'
d may be considering action to resume control of the govern-L
nt. They are reported preparing to press former Prime d
mister General Ne Win to take action because of their dis- n ?
ontent with the present inept administration and fear of possi-v0
le attempts by Nu% government to undermine army solidarity.)
e Win _whe_returngd the_ountry to. civilian =train April, '
-P
rmy_protests, has asked for a confetence with U Nu to (>3
iscuss the situation. Despite increasing pressure from his
subordinates, Ne Win will robabl be able to forestall army
ntervention for some time. Page 5)
Japan-Indonesia: he Ikeda government may request the
cancellation of the visit of the Dutch aircraft carrier Karel Door-
man as a result of Indonesia's threat to withdraw its ambassador
from Tokyo and the likelihood of reprisals against Japanese
commercial interests. Tokyo is under considerable pressure
to maintain the position of Japanese business in Indonesia. A
breach in relations could adversely affect Tkpdats nrosneets in
the forthcoming general elections this fall
2 Sept 60
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IV. WATCH COMMITTEE CONCLUSIONS
CRaragraph C of the Watch Committee Conclusions, pub-
lished in the Central Intelligence Bulletin of 1 September, has
been amended in view of late information to read as followl0
The new Souvanna Phouma cabinet, comprising sup-
porters of both General Phoumi and Souvanna, appears
to be acceptable to Lao officials. The new Laotian Gov-
ernment will probably adopt neutralist policies which
would afford opportunities for increased Communist
presence in Laos. If Kong Le feels that the coup pro-
gram is not being carried out by the new government,
he may seek an alliance with the Pathet Lao and thus
pose a political and military threat to the stability of
the country. ..1
V. SIGNIFICANT INTELLIGENCE
REPORTS AND ESTIMATES
(Available during the preceding week)
Outlook for the Sudan: Stability of the Abboud Regime; Likely
Trends in Foreign Policy; and Economic Prospects. NIE 72.1=60.
30 August 1960.
LATE ITEMS
*East Germany: The remarks of East German Deputy Foreign
Minister Otto Winzer on 31 August suggest that the regime will
continue its present curbs on West German travel to Berlin even
after expiration of the five-day period (31 August - 4 September)
stipulated in the 30 August declaration. East German border
guards and police are exercising increasingly strict controls
2 Sept 60
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over West German civilian travel to West Berlin at main
border crossing points and over East Germans desiring
to enter Berlin. As a countermeasure the West Berlin Gov-
ernment has announced, according to press reports, that
it will fly free into the city all West Germans prevented
from making the trip by East German border guards. One
of the purposes of the regime's move against West Berlin
may be to reduce the East German refugee flow through the
city. During the week ending 30 August, 4,544 East German
refugees arrived _there the third highest total for any week
since 1955. r j (Page 6)
*Situation in Laos as of 2345 EDT: The response of the
Pathet fao to Premier-designate Souvanna Phouma's com-
promise government appears to be the one missing element
in the negotiations for a return to normal government con-
ditions in Laos. In order to promote successful negotiations,
Prince Souvanna Phouma has ordered Royal Laotian Army
units not to fire upon the Pathet Lao. He has already held one
meeting with Pathet Lao representatives, including Prince
Souphanouvong's wife and his former chief advisor, in Vientiane
and has urged Pathet Lao leaders to renew their previous trust
in him, send representatives to Vientiane for discussions, and
"end the civil war and killing among all Laotians." So far, there
has been no response from the Pathet Lao in the jungle. In other areas of negotiations, coup leader Captain Kong
Le has reaffirmed his acceptance of the new cabinet, including
General Phoumi, and announced the transfer of all administra-
tive authority in Vientiane to Prince Souvanna Phouma; General
Phoumi, Vice-Premier and Interior Minister-designate, has
abolished his Counter Coup Committee, pledged support to the
new government, and urged reconciliation with Kong Le; and the
entire cabinet has been formally presented to the king in Luang
Prabang. On 2 September, the assembly and cabinet, with the
exception of General Phoumi, are returning to Vientiane for
formal investiture.
2 Sept 60
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Moscow and Peiping Hint at Soviet Economic Sanctions
Against China
Soviet and Chinese Communist press articles in recent weeks
have made veiled references to the prospect of Soviet economic
sanctions against China. The Soviet provincial press has on at
least two occasions this past month mentioned China specifically
as an example of progress through aid and commented that such
progress would be unimaginable "if this country were to be iso-
lated."
In a recently translated Peiping People's Daily article of
f 13 August the Chinese linked a strong appeal or self-reliance
with implicit criticism of the Soviet Union. The article asserted
that China had made progress despite American economic sanc-
tions and declared that it was improper to "merely stretch out
our hand for aid and seek a quick and easy way." China had begun
its progress with bare hands, the article concluded, and must con-
tinue to rely on its own efforts.
The article angrily criticized those who opposed China's ef-
forts through "leap forward" and the communes to advance quickly
toward Communism. In a possible allusion to the USSR's head
start in industrialization, the article cited Mao's observation that
"those who come last take the top position" and averred that Com-
munists should not begrudge the top position to latecomers.
An intimation that China's continued opposition to Soviet pol-
icies could lead to its exclusion from the socialist camp appeared
in the 25 August issue of a Bulgarian farm newspaper. Citing the
Yugoslav case as an object lesson for today as well as in the future,
the newspaper warned that any "individual people" who left the bloc
would inevitably be attacked and destroyed by imperialism.
-CONFIDENTIAL
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2 Sept 60
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4.01
Khrushchev Hints at Possible Return of Southern Kurils
According to press reports, Soviet Premier Khrushchev hinted
to visiting Japanese Socialist leaders in Moscow on 29 August that
the USSR would be willing to return the southern Kuril islands if
Japan abrogated its security treaty with the United States and be-
came a "truly neutral nation." Moscow has hitherto taken the posi-
tion that these islands were awarded to the USSR by the Yalta and
Potsdam agreements and that their status is not negotiable.
When the USSR and Japan resumed diplomatic relations in Octo-
ber 1956, Moscow pledged to return Habomai and Shikotan to Japan
after the conclusion of a peace treaty. The Soviet Union, however,
withdrew this pledge in reprisal against the signing of the US-Jap-
anese security treaty in late January 1960. Tokyo considers Habomai
and Shikotan, small islands off the northern coast of Hokkaido, rela-
tively insignificant and has always predicated a formal peace treaty
on the return of at least the major Soviet= occupied southern Kuril
islands--Etorofu and Kunashiri.
Japanese Foreign Minister Kosaka has publicly characterized
Khrushchev's hint concerning the Kuril Islands as "incomprehensi=
ble" since the islands are an "integral part" of Japanese territory.
Kosaka reaffirmed Tokyo's long-standing position that Soviet at-
tempts to make a peace treaty contingent on the abrogation of Jap-
an's security ties with the United States represent unwarranted in-
terference in Japanese internal affairs. A leading newspaper edi-
torially described the statement as a tactic to assist Japanese
leftists.
� The Japanese claim to the southern Kuril islands has broad po-
litical support, except for the Japanese Communist party. This was
underscored by the reported assertion of Mosaburo Suzuki, the
Socialist visitor to whom Khrushchev spoke, that the demand for
the return of the islands came from the whole nation. Chief Cab-
inet Secretary Ohira told the press he was not interested in the de-
tails of the Soviet premier's statement and would not question Suzuki
when he returned to Tokyo.
If the press reports are accurate, Khrushchev's offer is a bid
to sway Japanese public opinion prior to the forthcoming parliamentary
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elections by suggesting Soviet readiness to make concessions to
a Japanese government inclined to a more neutralist policy.
Khrushchev probably also hopes to use the issue as a means of
creating pressure on the Ikeda government to demand the return
of the American-occupied Ryukyu Islands.
With the exception of some early-warning facilities, all sig-
nificant Soviet land, naval, and air forces were withdrawn from
the southern Kurils early this summer.
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*op,
Menon Considering Military Mission to Moscow
Defense Minister Krishna Menon is reportedly considering
the dispatch of a military mission to Moscow to continue evalua-
tion of Soviet helicopters and to observe the characteristics of
other types of Soviet military equipment. All three military
services are opposed to the proposal& the same grounds that
they opposed his purchase of one MI-4 (Hound) demonstrator in
early. August and his desire to buy five or more additional Hound
helicopters--i. e. their concern about complicating India's spare-
parts situation.
Menon may get his way on the purchase of additional heli-
opters from the USSR. ahis model alone has demonstrated it
(Ian meet payload and altitude requirements for use in the Hima-
layan border regionj It costs less than competing Western mod-
els, and can be bought without outlay of scarce foreign exchange.
Menon is not likely to make much headway with his cabinet
colleagues, however, in his apparent attempt to broaden the scope
of Indian procurement from the Soviet Union. Such a decision would
represent a major reversal of India's general policy of procuring
military hardware from Western sources only. It is doubtful that
Prime Minister Nehru, despite his recent efforts to exert pressure
on Peiping by demonstrating continued Indo-Soviet cooperation,
would feel that such a reversal is warranted at this time. Nehru
would probably calculate that adverse political reactions at home
and abroad would outweigh any military or economic advantages.
SE2C-RET-
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..)LA,AXIL, I
%eV VINO?
Burmese Army Leaders Restless Under U Nu Government
(Army discontent with Burmese Prime Minister U Nu's gov-
ernmental policies and inept administration has grown to the
point where military leaders are considering direct action to
resume control of the government. Although Nu has been ex-
tremely careful to avoid direct interference with army person-
nel or programs, his government has countermanded as many
as possible of the army's reforms and has allowed the adminis-
tration to sink back into stagnant inefficiency. The army fears
that the ruling Union party may try to undermine army solidarity
and influence by creating party units within the army or by devel-
oping the police as a partisan counterforce. Army leaders intend
to press former Prime Minister General Ne Win to take action to
halt the country's political and economic deterioration3
General Ne Win, who overrode army protests when he al-
low U Nu to resume the prime ministership in April, is re-
ported to have lost some of his control over the army during his
recent three-month visit to the United States and Europe. He has
asked U Nu for a conference to discuss the country's deterioration
and is likely to warn Nu of the growing dissatisfaction. It is un-
likely, however, that he would approve any army action to take
over the government at this time. Aside from his personal dis-
taste for political office, Ne Win recognizes both the army's un-
popularity and U Nu's tremendous personal following. Even the
army rank and file is reported to have voted overwhelmingly for
Nu in the February electionsl
Trime Minister Nu may attempt to tighten up his administra-
tion ollowing warnings from General Ne Win. If he does, however,
he will face threats of revolt from within his own party, which is
a loose coalition of divergent factions. He has been shown to have
little influence over his following since he resumed control of the
governmenc
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Nimpro
East Germans Threaten Continued'Ban on Travel of West
German "Revanchists" to Berlin
In a press interview of 31 August, East German Deputy
Foreign Minister Otto Winzer reasserted the� Ulbricht regime's
claim to the right to control traffic on Berlin access routes,
suggesting that travel restrictions to West Berlin will continue
even after the expiration of the five-day period (31 August - 4 Sep-
tember) stipulated in the 30 August declaration of the East Ger-
man Council of Ministers. Winzer reiterated the regime's stand-
ard position that East Germany is a "sovereign state in which
and for which occupation rights have ceased to exist," and added
that the basic quadripartite agreement of 4 May 1949 does not
guarantee "free traffic to and from Berlin." Winzer denied, how-
ever, that current measures are intended to disrupt traffic to
West Berlin, perhaps to dispel any speculation that a blockade is
intended.
The regime is exercising increasingly strict controls over
West German civilian travel to West Berlin, and West Germans
are being barred from East Berlin. There are reports that a
number of passengers have canceled their airplane reservations
to attend the meetings of West German refugee associations which
furnished the pretext for East German action. Nevertheless, Bonn
authorities still anticipate that some 200 West German officials,
including 50 members of the Bunde stag,, will attend the main rally
on 4 September.
There continue to be strong indications that one major pur-
pose of the regime's move against West Berlin may be to reduce
the East German refugee flow through the city. Refugees ar-
riving in West Berlin have reported that members of East Ger-
man paramilitary organizations are assisting civil police in ex-
amining credentials of persons traveling to Berlin. The refugee
flow, which includes a high proportion of intellectuals, has
mounted during the summer to a peak of 4,544 during the week
ending 30 August--this is 510 more than the preceding week,
1,721 over the corresponinweekif a year ago, and the third
highest week since 1955.
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mrup,
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the regime is requiring daily reports on
tne reactions oi tne populace to the new security measures.
Initial responses are inconclusive, although
agitators posted in railroad stations
noted that people were ignoring the subject of "revanchists" in
favor of that of the Olympic Games.
Moscow and its satellites are providing full Propaganda sup-
port for the East German moves. Soviet commentators welcome
the East German declaration as a timely warning to the Western
powers and agree that use of Berlin for provocations against the
bloc cannot be tolerated. Broadcasts to internal and external
audiences also stress that "outbursts of West German revenge
seekers" have become increasingly violent over the past week.
the
psychological effects of the East German actions may damage
West Berlin's economy. Stressing that the Communists were ob-
viously testing Western reactions, Brandt emphasized that their
future use of this tactic depended on the firmness of the Allies
in this case. West Berlin officials, however, have decided a-
gainst retaliatory measures, including interzonal trade sanctions,
on grounds that they are likely to lead to more serious counter-
measures by the East Germans. In the meantime, the West Ber-
lin Government has offered, according to press reports, to fly
free into the city West Germans prevented from making the trip
by East German border guards.
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CONFIDENTIAL
*kiwi
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
Director, Office of Civil and Defense Mobilization
Director, National Aeronautics and Space Administration
Special Assistant for Security Operations Coordination
Chairman, 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 Political Affairs
The Deputy Under Secretary of State for Political Affairs
The Deputy Under Secretary of State 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
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
Commandant, United States Marine Corps
Assistant to Secretary of Defense for Special Operations
Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of Army
Director of Naval Intelligence, Department of Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
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
CONFIDEN TM L
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