CENTRAL INTELLIGENCE BULLETIN - 1960/05/21

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03179251
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 19
• Document Creation Date: March 17, 2020
• Document Release Date: March 26, 2020
• Publication Date: May 21, 1960

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21 May 1960
Copy No. C
CENTRAL
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3.3(h)(2)
INTELLIGENCE
BULLETIN
DOONMENT NO.
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21 MAY 1960
I. THE COMMUNIST BLOC
Peiping makes show of firm support for
Khrushchev, but indicates concern that
he may not maintain uncompromising
stand toward West.
Much of East German populace concerned
over summit breakdown; open criticism
of Khrushchev noted.
Sino-Algerian rebel communique reflects
Peiping's efforts to align "liberation
movements" with anti-US policies.
II. ASIA-AFRICA
India to construct two more oil refin-
eries; Soviet assistance likely.
Kishi under attack from press and left-
ists for "undemocratic" methods of se-
curing lower-house approval of US-
Japan security pact.
Proffered resignation of South Korean
army chief of staff may affect military
capabilities if other officers follow suit.
Saudi Arabia--Saud and Faysal clash as
King moves to regain domination over
government.
III THE WEST
� Castro governnnt orders Western re-
fineries to begin using Soviet crude oil.
LATE ITEMS
Comment on Khrushchev's East Berlin
speech.
0 Comment on USAF r-47 fnrepd clown in
East Germany.
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CENTRAL INTELLIGENCE BULLETIN
1,5
k\ Communist China: Although Peiping is making a big
show of support for the Soviet Union following the
summit conference, a People's Daily editorial of 20 May
contains some indications that the Chinese may fear that
Khrushchev will not maintain, in the long run, his present
\\ uncompromising attitude toward the West. In justification
of Peiping's pre-summit position, the editorial states that
It_ the outcome of the conference was no surprise to those who
view the international situation correctly and are not misled
by "certain superficial phenomena." The editorial suggests
the Chinese probably, hope to use current developments to in-
21 May 1960
DAILY BRIEF
I. THE COMMUNIST BLOC
crease their influence throughout the Communist world as
the most accurate interpreters of Marxist-Leninist theory.
(CONFIDENTIAL) (Page 1)
Ii
post in Peiping,
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East Germany:
Communist party public opinion surveys show open criticism
among the populace, particularly workers, of Khrushchev's
use of the U-2 incident to wreck the summit conference. The
surveys suggest widespread concern among East Germans
over the breakdown of negotiations, even among intellectuals
who publicly endorsed Khrushchev's stand. The whole party
apparatus was mobilized to turn out a mass welcome for
Ithrushchev in East Berlin and to propagandize his remarks
throughout the country. (Page 2)
Communist China - Algeria: The Chinese Communists,
who are calling on "liberation movements" to focus hostility
on the US, would "welcome" an Algerian rebel diplomatic
There was no time set for establishing
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the mission and 1:11.d not mention Chinese
military aid to the Algerians. The leader of the rebel del-
egation, on his departure from Peiping on 20 May, however,
expressed his thanks for China's "material sifrifices" on
behalf of the Algerians,
the
rebel delegation, which has been touring the Far East, did
not request Chinese volunteers for Algerian fighting and was
reluctant to agree to Chinese demands to denounce the US openly
and to publicly oppose the US-Japanese security treaty.
Algerian reluctance on the security treaty
was overcome.
IL ASIA-AFRICA
India-USSR: New :Delhi has announced plans to construct
two additional government-owned oil refineries during the
Third Five-Year Plan (1961-66). These would presumably
be in addition to a previously announced medium-size refin-
ery slated for the Bombay region. The scheduled visits to
Moscow next month by President Prasad, Finance Minister
Desai, and Mines and Oil Minister Malaviya are likely to re-
sult in additional assistance to the Indian petroleum industry,
including an offer to construct the two new refineries. The
bloc is already assisting the construction of two other refin-
eries. (Page 4)
Japan.: Prime Minister Kishi is being attacked by most
of the press and by leftists for alleged undemocratic and un-
parliamentary methods in securing lower-house approval of
the US-Japan security treaty. The vote on 20 May, which
overrode Socialist violence and a boycott, appears to assure
final ratification by upper-house action prior to President
Eisenhower's visit on 19 June. More leftist-sponsored dem-
onstrations can be expected, and the two Socialist parties
have said they will continue to boycott the Diet. Kishi's con-
trol of his party will depend on the extent and depth of adverse
public reaction, which his party rivals will be alert to exploit.
(Page 5)
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South Korea: The proffered resignation of South Korean ..
,
Army Chief of Staff Lt, Gen. Song Yo-chan could adversely s
A
affect South Korean military capabilities if it leads to a
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rash of resignations and retirements by able senior officers.
Song's resignation may have been prompted by a desire to
save the prestige he gained as a result of the army's restrained
role in the disturbances that toppled R.hee from power. Song
would be vulnerable to criticism for the significant role he
played in delivering the �idlers' vote to the Rhee regime in
the 15 March ,elections.
\
Saudi Arabia: King Saud, taking advantage of Crown Prince
Faysalis impending departure for at least six weeks of medical
treatment abroad, has made the first move in his plan to regain
domination over the Saudi Government,
le refused to accept Faysal's suggestions for interim ap-
pointments to supervise government affairs. The crown prince
responded by issuing a virtual ultimatum to the King,
the disagree-
ment between the two royal brothers has reached the point that
Fa,ysal might either have to remain abroad or return to take
over as king. (Page 6)
III. THE WEST
Cuba: The Castro government on 18 May ordered that each
refinery in Cuba for the rest of this year must purchase approx-
imately 300,000 tons of Soviet crude oil, now arriving under the
Cuban-Soviet trade agreement. This affects three large refin-
eries--Esso, Texaco, and Shell--which produce about 95 per-
cent of Cuba's refined petroleum products. Cuban controls on
US dollar remittances have been tying up the funds of the oil
companies, and the Castro regime is using this form of pres-
sure to make the companies purchase the Soviet crude for re-
fining. Relations between the Castro regime and the government
of Venezuela�Cuba's chief source of petroleum--are likely to be
further alienated by Cuban purchase of competitive Soviet oil.
) (Page 7)
21 May 60
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USAF C-47 INCIDENT- 20 MAY 1960
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LATE ITEMS
A*USSR: The main purpose of Khrushchev's speech in East
Berlin on 20 May probably was to provide assurances that
despite the collapse of the summit conference and his clear
intention to maintain harsh attacks on the United States, the
USSR:does not plan to abandon its peaceful coexistence line or
revert to a hard, "Stalinist" posture toward the non-Commu-
nist world. Khrushchev appears anxious to demonstrate that
his detente policy continues to be valid and justified. Although
&' the Soviet premier claimed that the breakdown of the Paris
0 meeting has given the Soviet Union and its allies a "moral right"
Jr to proceed without further delay with a separate peace treaty
with East Germany, he stated that the "status quo" with regard
rr to a German treaty and West Berlin will be maintained until
another heads-of-government meeting takes place, which he
"assumes" will be in six to eight months. Khrushchev's rela-
tively moderate line in this speech will displease any critics in
the Communist world who had opposed his peaceful coexistence
diplomacy and had interpreted his performance in Paris as fore-
shadowing abandonment of this line. 'Page 8)
*Air incident in East Germany: On 20 May, a USAF C-47
transport en route from Copenhagen to Hamburg with nine per-
sons aboard apparently was forced to land about 15 nautical
miles northwest of Wismar in the extreme northwest corner of
East Germany at approximately 1205Z.
it was forced down by Soviet fighters. No
fighter activity, however, was noted at that time
although some Western radar reflections sug-
gest such activity. The transport was tracked for some 25 min-
utes by Soviet radars. No information, including weather condi-
tions, explains why the aircraft had deviated from its intended
course, the aircraft was
undamaged and the personnel were turned over to the Soviet com-
mandant in the area.
the American personnel were later transported by helicopter
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Nor
Peiping Vindicates Its Interpretation of US Motives
Despite Peiping's major demonstrations of "firm support"
for the Soviet Union following the summit conference, the Chi-
nese are taking advantage of the conference breakdown to vin-
dicate their views against accommodation with the West. A
People's Daily editorial of 20 May states that the outcome of
the conference was no surprise to those who view the interna-
tional situation correctly and are not misled by "certain super-
ficial phenomena."
The Chinese had maintained all along that there had been
no real change in the American attitude toward the Communist
world and that the principal task of the bloc was therefore to
expose the false nature of American peace gestures. A few days
before the summit meeting was to convene, Mao Tse-tung had
implicitly criticized Khrushchev for having "illusions" about
"US imperialism."
The 20 May editorial contains some indications that the Chi-
nese may fear that Khrushchev will not maintain, in the long run,
his present uncompromising attitude toward the West. In this
connection, the editorial assesses the summit breakdown as
"helpful" because it "laid bare" the "ferocious" features of "US
imperialism" and calls, as did the Chinese in the pre-summit
period, for further exposure of the United States.
By emphasizing that the Chinese were right and Ithrushchev
wrong, the editorial suggests the Chinese probably hope to use
present developments to increase their influence throughout the
Communist world as the most accurate interpreters of Marxist-
Leninist theory.
That Moscow now is on the defensive can be seen in Soviet
Ambassador Chervonenk:o's speech at a rally in Peiping on 20 May.
"Like other people," he said, "the Soviet people have never de-
ceived themselves with illusions and have always remembered
the imperialist intrigues." On the contrary, People's Daily said
on the same day, events of the past few days prove misguided
those who had naively thought that imnerialism eculd be dealt with.
CONFIDENTIAL
21 May 60 CENTO A I Ih.11-roi I io".kie.r el Iiirvik. Page 1
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�StEeRET
East German Workers Criticize Khrushchev's Moves to
Wreck Summit Meeting
Crash public opinion surveys made by Socialist Unity
(Communist) party (SED) officials in East Germany from 17
to 19 May reveal open criticism among the people�par-
ticularly workers--of Khrushchev's 11qP nf the 11-2 inrident
to wreck the summit meeting.
East Germans are greatly concerned
over developments in Paris and in some cases have public-
ly contrasted with Khrushchev's disruptive moves the attempts
Of Western leaders to continue the negotiations.
� SED headquarters in Potsdam District reported that work-
ers in many factories were expressing "indefinite" and "nega-
tive" views, such as: "The airplane should have been the last
item on the agenda instead of the first"; "Khrushchev shouldn't
play the spoil sport"; "Everyone must compromise"; and "The
summit conference needn't be shattered because of this, there-
by killing the hopes of the people." In two cases party members
had expressed such opinions.
Similarly, Magdeburg officials reported on 17 May that
workers in one factory accused Khrushchev of using "sledge-
hammer tactics." Even among intellectuals who have pub-
licly supported Khrushchev's moves, there is obvious concern
over the breakdown of negotiations. For example, students
at RostockUniversity said!' "If the summit conference had tak-
en place, at least something would have resulted for Germany."
The regime's propaganda apparatus has been put into full
swing to counteract such opinions and give maximum coverage
for Khrushchev's statements in East Berlin. It is nevertheless
probable that the already low morale of the East German pop-
ulace has dropped further as a result of the developments in
Paris. Many East Germans will probably fear that access to
West Berlin may soon be barred by the regime and attempt to
flee now. The flow of refugees to West Berlin has already
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reached proportions of the 1.958 mass flights as a result of last
winter's collectivization drive, despite the regime's urgent ef-
forts to stop them. In the week ending 17 May, 3,883 refugees
reached the city--an increase of 550 above the preceding week
and more than 2,000 above the comparable week last year. Since
the East-West German border is practically sealed as a result
of heightened security precautions, nearly all East German refu-
gees now are using the West Berlin escape hatch.
--SEeRET-
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IL ASIA-AFRICA
Planned New Indian Refineries May Receive Soviet Assistance
New Delhi has announced its intention to construct two
additional oil refineries during the Third Five-Year Plan
(1961-66). The location and the financing arrangements for
these new government-owned projects were not made public.
They would presumably be in addition to a medium-size re-
finery in the Cambay region near Bombay for which plans
were announced in April. Promising oil strikes were recent-
ly, made in that area by bloc technicians under contract to the
Indian Government.
Scheduled visits to Moscow in June by three Indian dele-
gations led by President Prasad, Finance Minister Desai,
and particularly IC D. Malaviya, Indian minister for mines
and oil, will afford the Soviet Union an opportunity to expand
its dominant position in India's oil industry by making further
offers of assistance. Moscow is likely to offer to aid in the
construction of the two new refineries and may also propose
further Indo-Soviet collaboration in the petroleum industry.
India will receive some Soviet-refined POL products this
year under terms of the current Indo- Soviet trade agreement.
Moreover, Moscow has recently offered "unlimited" quanti-
ties of crude oil, at discount and for rupee payment- a pro-
posal which the Indians will be able fully to utilize only when
they possess their own refineries. In addition, the USSR and
Rumania are assisting the Indians in construction of two other
refineries in eastern India for processing Indian crude oil;
aid thus far committed to these projects amounts to $40,000,-
000, about 5 percent of total bloc aid to India.
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Japanese Reaction to Security Treaty Vote
Most major Japanese newspapers are accusing Prime Min-
ister Kishi of violating democratic and parliamentary principles
in forcing lower-house approval of the US-Japanese security
treaty on 20 May. One paper, however, stressed Japan's need
for such a treaty under present world conditions, and another
paper criticized the opposition Socialists for their resort to vio-
lence prior to the vote.
The two Socialist parties are claiming that passage of the
treaty was illegal and invalid and are now boycotting the Diet
session. The governing pberal Democrats, although they have
enough seats to conduct parliamentary business without the So-
cialists, are almost certain to undertake negotiations with them
in an effort to end the boycott and return to normal procedures.
A demonstration led by extreme leftist students broke out
In the vicinity of the Diet soon after the treaty vote, and some
students forced entry into the grounds of Kishi's official resi-
dence. More leftist-sponsored demonstrations can be expected,
although previous extremist efforts have failed to attract popu-
lar support.
The lower-house vote appears to assure final ratification of
the security pact before President Eisenhower's visit on 19 June.
The treaty has been referred to the upper house and, even if this
body fails to vote, approval will be automatic after 30 days. A
50-day extension of the Diet session assures the necessary time
period.
Some Japanese political observers believe that Kishi's chances
�
for winning a third term as president of the government party in
January 1961 have been weakened by the steps taken to obtain ap-
proval of the treaty. They note that several of his party rivals,
including Ichiro Kono, absented themselves during the vote. While
Kishi's rivals will be alert to exploit any adverse public reaction,
his control of the party will depend on th7 extent and depth of such
popular sentiment.
CONFIDENTIAL
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Struggle for Power Within Saudi Royal Family
Crown Prince Faysal is expected to leave very soon for
at least six weeks of medical treatment in Europe, and King
Saud has taken the first step in his plan to regain omination
over the government, he refused
to accept Faysal's suggestions 'or interim appointments to
supervise government affairs. The crown prince responded,
1py reiterating his recom-
menaations in tne iorm iDI a virtual ultimatum to the King. This
names, as acting prime minister, Prince Musaid Ibn Abd al-
Rahman, who served in that capacity during Faysal's absence
in Europe from October to December last year, and as presid-
ing officer over the Council of Ministers, Prince Fand Ibn Abd
al-Aziz, minister of education, who headed the Saudi delega-
tion to recent Arab League meetings.
The next move is up to King Saud. His personal advisers,
some of whom are corrupt holdovers from Saud's bungling and
extravagant rule from 1953 to 1958, are urging him to press for
a complete showdown. If he does, the outcome is likely to be
determined by the attitudes of ten or twelve influential senior
princes. While this group was responsible for easing the King
out of power in favor of Faysal in March 1958, several of its
members reportedly have since become unenthusiastic about
supporting the crown prince.
The quarrel within the royal family has become so serious
as to reduce political stability. The way might be opened to or-
ganized plotting by antiroyalist groups not only in the bureaucracy
and merchant class but also in the army, where disaffection is re-
ported spreading.
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CONFIDENTIAL :Noe
III. THE WEST
American Refineries in Cuba Ordered to Process Soviet
Crude Oil
On 18 May, the Castro regime notified officials of the
Texaco refinery in Cuba that for the rest of this year each
refinery in the country must accept approximately 300,000
tons of Soviet crude al, which has begun to arrive in Cuba
under the Cuban-Soviet trade agreement signed in February.
This will affect the three refineries--Texaco, Esso, and
Shell--which together produce over 95 percent of the petro-
leum products refined in Cuba. These companies have some
$40,000,000 worth of outstanding requests for dollar remit-
tances which the Cuban National Bank has not yet approved.
Cuban controls on US dollar remittances have been tying up
the funds of the refineries, and the Castro regime evidently
is using this form of pressure in an effort to make the com-
panies accept Soviet crude. Soviet crude is received by
Cuba under a barter arrangement, and the refineries would
not be required to pay for it in foreign exchange.
Official Venezuelan relations with the Castro government,
which have grown increasingly cool in recent weeks, are like-
ly to be further alienated by Cuban purchases of competitive
Soviet oil. In 1958, Venezuela exported about 75,000 barrels
a day of oil and refined products to Cuba, about 8 percent of
which presumably will now be supplied by the USSR. In a
front-page editorial, one prominent anti-Castro Venezuelan
newspaper recently condemned the Soviet-Cuban oil arrange-
ments. Venezuela is also facing a potential loss to the USSR
of a portion of its market for petroleum in two other Latin
American nations--Uruguay and Brazil.
CONFIDENTIAL
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LATE ITEM
Khrushchev's Speech in East Berlin
IChrushchev used his speech in East Berlin on 20 May as the
occasion for his first major foreign policy statement since the
collapse of the summit meeting. His main purpose probably was
to provide assurances that he does not intend to abandon his peace-
ful coexistence line or revert to a hard, "Stalinist" posture toward
the non-Communist world.
Despite his clear intention to mount on all-out propaganda
campaign to discredit and isolate the United States on the issue
of "aggressive and provocative actions" toward the USSR, IChru-
shchev apparently hopes to salvage as much of his detente policy
as possible. He stated that he assumes that another heads-of-
government meeting will take place in six to eight months, and
declared ublicly what Foreign Minister Gromyko had pledged
n 17 May to :British Foreign Secretary Selwyn Lloyd-z)
that the USSR will do nothing in the interim that might "aggravate
the international situation and take us back to the dark time of the
cold war."
On the key issue of Berlin, IChrushchev said he had reached
agreement with East German leaders that, since a summit meet-
ing will be held in six to eight months, no unilateral moves would
be taken until a further effort can be made to reach agreement with
the three Western powers on a peace treaty with the two German
states. Although he claimed that the breakdown of the Paris meet-
ing has given the USSR and its allies a "moral right" to proceed
without further delay with a separate treaty with East Germany, he
pledged that the status quo will be maintained until a summit meet-
ing convenes. This commitment, however, was made conditional
on the Western powers' willingness to avoid "any unilateral steps"
which would prevent such a meeting in six to eight months.
� The line Khrushchev took in this speech suggests that he feels
under the necessity of demonstrating that his detente policy in re-
cent months was right and justified and is still valid. He recalled
that after returning from his visit to the United States he had pointed
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out that President Eisenhower was in a "difficult position" as a
result of a "hidden" struggle in the United States between the
"forces of the cold war" and the "advocates of peaceful coexist-
ence." He observed that he had recognized such "alarm signals"
long before the summit meeting and implied that the U-2 incident
resulted from the victory of the "cold war forces:'
Khrush.chev's relatively moderate tone in outlining his future
course of 'action will displease any critics .in the Communist world
who had opposed his peaceful coexistence 'diplomacy and had inter-
preted his performance Lr. PA ri sas fnrpahadn big a complete
abandonment of this line.
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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
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 Politica; 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 Intelligeuce, 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
riNAISITWIVTIA 1.
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