CENTRAL INTELLIGENCE BULLETIN - 1960/01/26

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03031267
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 12
• Document Creation Date: March 17, 2020
• Document Release Date: March 26, 2020
• Publication Date: January 26, 1960

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26 January 1960
- Copy No. C
CENTRAL
INTELLIGENCE
BULLETIN
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26 JANUARY 1960
I. THE COMMUNIST BLOC
Peiping issues inflated production
claims in communiqu�n 1959 economic
results.
II. ASIA-AFRICA
Algeria--De Gaulle pledges restoration of
order in Algiers; confronts local author-
ities with need for decision to use force
against insurgent Frenchmen.
Tunisian President Bourguiba calls for
French evacuation of Bizerte base;
French position reportedly "not nego-
tiable."
Indonesia�Rapid inflation continuing;
may lead to unrest.
THE WEST
Cuba--National Bank head "Che"
Guevara forbids rediscounting of crop
loans by foreign banks; could be prelude
to nationalization of the banking system.
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CENTRAL INTELLIGENCE BULLETIN
26 January 1960
DAILY BRIEF
I. THE COMMUNIST BLOC
Communist China: Peiping has issued a glowing, but
exaggerated, communique on its economy during 1959. A
40-percent rise in industrial output is claimed, but is more
likely closer to 25 or 30 percent. Contrary to Peiping's claim
of increased harvests over 1958, agricultural output is be-
lieved to have dropped--in the case of grain, by some five to
seven percent. (Page 1)
II. ASIA-AFRICA
Algeria-France: The reinforcing by settler insurgents
of two strong points in downtown Algiers poses the threat of
further clashes between European extremists and French
security forcesm The number of hard-core extremists man-
ning the barricades--many of whom are armed with automatic
weapons and grenades--reportedly rose from 1,000 to 2,500
during a de facto truce on 25 January. Demonstrations have
also taken place in Oran, Bone, and Constantine. One insur-
gent leader stated that his followers would lay down their arms
only if De Gaulle would guarantee a "French Algeria."
In Paris, however, following a special cabinet meeting,
De Gaulle pledged himself to restore order in Algiers and to
press forward with his program for Algerian self-determina-
tion. This presents the Algiers authorities with the problem
of using force against Frenchmen. The dilemma may be re-
flected in some dela in im lementin De Gaulle's sublic sta e-
ment.
SECRET,
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Irsor Nod
Tunisia: President Bourguiba in a speech yesterday in-
sisted that France withdraw all forces from Bizerte and
served notice that on 8 February he will implement meas-
ures to ensure French evacuation. A year ago Bourguiba
offered to permit France to retain its base at Bizerte if
Paris would end the Algerian war and meet nationalist de-
mands; his current action is probably aimed at pressing
France for ultimately more favorable solutions to outstand-
ing French-Tunisian differences. It probably also springs
from his concern over developments in Algeria and his de-
sire to impress the All-African People's Conference, meet-
ing in Tunis, with his stature as an African leader, as
well as his strong opposition to the proposed French nu-
clear tests in the Sahara.
The French ambassador, who returned to Tunis from
Paris on 19 January with new instructions for other negotia-
tions, told the US ambassador that the French position at
Bizerte is not negotiable, although France is willing to re-
duce its personnel there. (Page 2)
Indonesia: Recent reports on the Indonesian economic
situation emphasize its accelerating deterioration. A con-
tinued rapid build-up of inflationary pressures may provoke
serious popular unrest. A major immediate cause of the
present inflation is the flight of Chinese capital which has
followed measures taken against Chinese retailers in rural
areas. There has recently been a heavy security guard over
First Minister Djuanda because of concern over possible
demonstrations. (Page 3)
III. THE WEST
Cuba: "Che" Guevara, the pro-Communist president of
the National Bank, has told the manager of an American
branch bank in Cuba that foreign banks--principally Amer-
ic
an- -will no longer be permitted to rediscount with the
National Bank their crop loans to either American- or Cuban-
owned sugar companies. Guevara explained this policy as
26 Jan 60
DAILY BRIEF ii
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one means for Cuba to defend itself against the "hostile and
aggressive" policy of the US Government. While this action
appears primarily one of discrimination against American
banks, it could also be the prelude to depriving all private
banks of the profitable and traditional short-term loans to
sugar companies--a step toward nationalization of the entire
banking system, one of Castro's early stated objectives.
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DAILY BRIEF iii
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CLAIMED CHINESE
PRODUCTION FIGURES
(million tons)
1958
1959
Steel
8
13.35
Coal
270
347.8
Grain
250
270
Cotton
2.1
2.41
00125 3 UNCLASSIFIED
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I. THE COMMUNIST BLOC
Communist China's Economic Claims for 1959
The official communique on the Chinese economy issued
by Peiping on 22 January claims a 31.1-percent increase dur-
ing 1959 in the value of industrial and agricultural output. In-
dustrial output is said to have risen almost 40 percent and ag-
ricultural production 16.7 percent. These claims are exagger-
ated, but not as greatly as those advanced early last year for
the 1958 "great leap forward."
The claim of a 40-percent rise in industry is almost cer-
tainly inflated, although an increase of 25 percent may have
been achieved. Peiping's figure includes the usual inflation
from double-counting. In addition, Peiping acknowledges that
4,720,000 tons of the 13,350,000 tons of steel claimed to have
been produced last year came from local plants, and that small
furnaces contributed over half of the claimed national output
of over 20,000,000 tons of pig iron. The output of some of
these plants and furnaces is of limited utility. Nevertheless,
impressive increases were scored last year in the production
of key industrial products, and a groundwork for further rap-
id advances was laid. Investment went up last year by almost
one fourth, and 671 projects went into full or partial operation
during the year.
Despite Peiping's rosy picture of China's agriculture dur-
ing the past year, unfavorable weather is believed to have re-
duced farm output below the level of 1958, a good year. Grain
production probably fell from some 210,000,000-215,000,000
tons in 1958 to around 200,000,000 last year. As a result, food
supplies continue to be tight, but Peiping's strenuous efforts
to stretch out supplies will probably forestall a critical nation-
wide shortage before the early harvest next June.
CONFIDENTIAL
26 Jan 60 CENTRAL INTELLIGENCE BULLETIN
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No4 Narri
II. ASIA-AFRICA
Tunisia Seeks French Evacuation of Bizerte Base
President Bourguiba in a 25 January speech served notice
that on 8 February he will implement measures to ensure evacu-
ation of all French forces from the base at Bizerte. France
presently maintains about 7,000 army, navy, and air force per-
sonnel there. The date is the second anniversary of the French
aerial bombardment of the Tunisian village of Sakiet Sidi Yous-
sef on the Algerian border, which Bourguiba had exploited to
obtain the withdrawal of all other French troops from Tunisia
by the autumn of 1958.
Bourguiba made his statement to an open-air rally convoked
in connection with the All-African People's Conference meeting
in Tunis to protest the projected French atomic bomb tests in
the Sahara. Last February, he had offered to reach an agree-
ment with France regarding Bizerte if France would end the
Algerian war and meet Algerian nationalist demands. His pres-
ent demand probably springs from concern over developments
in Algeria, belief that the French Army may wish to reoccupy
Tunisia, and a desire to impress the All-African People's Con-
ference--some participants of which have criticized him for co-
operating with the West--with his devotion to African national-
ist causes, as well as his strong opposition to the proposed
French nuclear tests in the Sahara.
The French ambassador in Tunis, who returned from Paris
on 19 January with instructions regarding negotiations with
Tunisia on problems outstanding between the two governments,
has informed the American ambassador that the French position
regarding Bizerte is not negotiable. He added that France, how-
ever, might be willing to reduce personnel at the base to the
minimum necessary for the base's security.
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CONFIDENTIAL
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New Inflationary High in Indonesia
Indonesia's steadily deteriorating economy has reached
a new inflationary high. The open market rate for the rupiah,
which was devaluated to 45 to the US dollar last August, has
jumped within the past two weeks from 300 to 500 to the dol-
lar, and prices of essential products have continued to rise.
The primary cause of the suddenly increased rate of
rupiah depreciation is the flight of Chinese capital which, in
turn, is the direct result of Indonesia's ban on alien retailers
in rural areas. Many Chinese, although not immediately af-
fected by the ban, are so acutely aware of the uncertainty of
their future status in Indonesia that they are leaving the coun-
try or at least transferring their funds. Figures are not avail-
able on the number of Chinese or the amount of capital in-
volved, but sailings for Hong Kong are booked solidly through
August. Other causes of depreciation are public expectation
of further devaluation and the continued shortage of essential
commodities.
Parliament, the press, and labor unions have become
openly critical of the government's economic policies, but so
far with little effect. The Communist-controlled labor union,
SOBSI, has demanded wage increases, and various protest
groups have attempted small-scale demonstrations at govern-
ment offices. Although the army has warned that the ban on
demonstrations is still effective, further public action appar-
ently is anticipated, During the past few days a heavy military
guard has been placed at the office of First Minister, and con-
currently Finance Minister, Djuanda. The government plans
to announce shortly a prohibition on wage increases for 1960.
It is generally believed that inflationary pressure must be-
come considerably greater before there is a threat of serious
unrest. The present economic situation, combined with con-
tinuing political reorganization, however, contributes to in-
creasing uneasiness and to further opportunities for the Com-
munists to stir up dissension.
CONFIDENTIAL
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111101
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 for Political Affairs
The Deputy Under Secretary 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
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
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
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