CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000700010001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 36
• Document Creation Date: December 16, 2016
• Document Release Date: January 12, 2005
• Sequence Number: 1
• Publication Date: November 17, 1955
• Content Type: SUMMARY

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C- q
COPY NO. 20
OCI NO.8856/55
17 November 1955
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
NO CHANGE IN CLASS. [J
f DECLASSIFIED
CLASS. CHANCED TO: TS
AUTH: N 7
VAT E. REVIEWER: 25X1
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
--SEE
25X1
State Department review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 November 1955
T H E W E E K I N B R I E F
PART I
OF IMMEDIATE INTEREST
FOREIGN MINISTERS' CONFERENCE. . . . . . . . . . . . . Page 1
Soviet strategy at the end of the foreign ministers' con-
ference was primarily designed to gain greater consideration in
Western Europe for Soviet security plans and to convince the West
Germans that they must deal directly with the Soviet bloc if they
are to achieve unification. Molotov's concluding statements
emphasized points on which he alleged that East and West were
25X1 in agreement.
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ARAB-ISRAELI SITUATION . . . . . . . . . . . . . . . . Page 3
Tension on the Arab-Israeli borders has decreased, and only
minor incidents were reported last week. Both Egypt and Israel
are maintaining their military positions while UN truce chief
Burns is working for a withdrawal of troops in the El Auja and
Gaza sectors. At the same time, negotiations are taking place
between Syria and Czechoslovakia on an arms purchase deal..
THE AFGHAN TRIBAL ASSEMBLY . . . . . . . . . . . . . .. . . Page 4
The Grand Assembly of the Tribes which convened in Kabul
on 15 November is now considering Prime Minister Daud's policy
on Pushtoonistan. If it approves the policy, an acceleration of
the last two years' trend toward closer relations with the
Soviet bloc will probably result... Afghanistan's traditional
concern for its independence, however, will probably lead it
to continue its contacts with the West as a counterbalance.
NOTES AND COMMENTS
Relations Between the USSR and Israel: Despite the serious
Implications for Israel of Soviet bloc arms shipments to
Egypt, Soviet-Israeli relations have remained ostensibly
correct though restrained. I E Page 1 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
French North Africa: The triumphant return of Sultan Mohamed ben
Youssef to Ra at on 16 November, while apparently without
any untoward incident, does not answer the all-important
question of whether terrorism will end. The record high
of 91 incidents of bombing and shooting during the week
ending 11 November may either be evidence of continued
nationalist pressure on Paris or may indicate that the
moderate nationalist leaders have lost control to the
25X1 extremists. . . . . .. . . . Page
Brazil: The interim government of President Nereu Ramos seems
to be succeeding in restoring order in Brazil and in
creating conditions which will make possible the inaugu-
ration on 31January of President-elect Juscelino Kubitschek.
Elements of instability remain, however, particularly
among the military leaders who want to prevent Kubitschek
25X1 from taking office. I I . . . . . . . . . Page 4
Argentina: The new Argentine government of General Pedro Aramburu,
which came to power in the bloodless coup of 13 November,
probably has much broader support than its predecessor
among both the armed forces and civilian groups. Aramburu,
who took over on the ground that the ultranationalist
Catholic elements were becoming dominant in the Lonardi
government, is generally re arded as both able and pro-US.
25X1 I I. . . . . . . . . . . Page
Japanese Conservative Merger Brightens Government's Prospects:
The formation o tfieLiberal-Democratic Party on 15 November
by the merger of the former Democratic and Liberal Parties
gives the Japanese government a strong parliamentary
majority and improves prospects for a stable regime. The
merger of the two conservative parties necessitated a
difficult compromise on the party leadership question, how-
25X1 ever, and this issue may well continue as a divisive factor.
. . . . . . Page 7
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 November 1955
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Chinese Road Construction in Tibetan Areas: Since 1950 the,
Chinese Communists have been engaged in an extensive
highway construction program designed to link Tibet with
China proper and to extend their political administration
into areas never before controlled by a Chinese government.
The concurrent extension of roads along the Himalayan
frontier has important strategic implications for India.
The new roads built this year in Tsingbai support important
Chinese geologic exploration. I. Page 9
Philippine Election Results: The Nacionalista Party's sweeping
victory in tenatorial and provincial elections last
week was a reflection of the continuing high popularity
of President Magsaysay and of popular support for his pro-
American policies. Nevertheless, the prospect is for some
party realignments, and the president's reform program'
will continue to meet heavy opposition in the Congress.
.. , . ? 6 . . . Page 10
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Laos: Political efforts by the Laotian government to regain
administrative control over the two northern provinces of
Laos are apparently being supplemented by plans for armed
action should political means fail. Page 11 25X1
Discontent Grows in East Germany: Popular discontent in East
Germany has deepened in recent months, particularly among
young people of draft age who fear they will be absorbed
into a new army. Food shortages and the expected formal
announcement of a national army will further depress morale,
but the East German government is expected to remain in
firm control and large-scale demonstrations are unlikely.
Page 1.2
French Election Situation: Premier Faure is still pressing
for National Assembly elections as soon as possible, but
he now has little chance of forcing balloting before
January. In any event, Faure's tenure will be short.,
His coalition is deeply split, and his dependence on
Communist backing in recent assembly votes on the elections
issue makes it impossible for him to retain the premier-
shia unless early dissolution of the assembly is voted.
25X1 ... . . . . . . . . . . . . . Page 13
Hungarian Government Shifts Domestic Political Tactics: Major
policy statements and personnel s s in the Hungarian
hierarchy during the past week signify a shift to more
moderate party tactics. Such tactics will bring the
Hungarian party in line with currently espoused Soviet
policies and probably reflect First Secretary Rakosi's
success in restoring party discipline and control.
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PATTERNS AND PERSPECTIVES
INDIA NEEDS OUTSIDE AID TO CARRY OUT FIVE-YEAR PLAN. .
. . Page 3
Hard pressed to make a success of its second Five-Year
Plan for developing the Indian economy, the Nehru government
has recently expressed renewed friendliness toward the United
States, but will probably seriously consider any new offers
of economic assistance from the Soviet bloc. Such offers will
almost certainly be made during the visit to India of Soviet
prime minister Bul anin and party leader Khrushchev.
YUGOSLAVIA MAINTAINS BALANCED POSITION BETWEEN EAST AND
WEST . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4
To compensate for the rapid improvement in relations with
the Soviet bloc during the past summer, Yugoslav leaders have
again adopted a friendly attitude toward the West.
CHINESE COMMUNIST ECONOMIC AGENCIES DEVELOP ON SOVIET
PATTERN . . . . . . . . . . . . . . . . . . . . . .. . . Page 6
The number of agencies for enforcing economic controls
continued to increase in Communist China in 1954 and 1955 as
various sectors of the economy developed and as China increasingly
modeled its economic and political institutions after those of
the Soviet Union. Many such Chinese offices closely resemble
Soviet prototypes, and the Soviet practice of creating new
agencies by subdividing old ones is also being followed. In
spite of some weaknesses, the system provides the strong
controls re uired for the ambitious program set by China's
leaders.
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MAJOR REVISIONS IN THE SOVIET SCHOOL SYSTEM. . . . . .. . . Page 8
Major changes recently introduced in the Soviet educational
program are steps in the gradual transition of the general
school system to provide all Soviet youth with a ten-year tech-
nical education which will not only prepare students for uni-
versity training but will also give them the skills required
by workers in an industrialized economy. The number of grad-
uates from ten-year schools increased from 428,000 students
in 1952 to 880,000 in 1954, and apparently to over 1,000,000
in 1955.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
OF IMMEDIATE INTEREST
FOREIGN MINISTERS' CONFERENCE
Germany and European Security
Foreign Minister Molotov's
purpose in restating more strong-
ly than ever at Geneva the So-
viet position on Germany was
apparently to disabuse the
world of any notion that the
USSR would accept the unifica-
tion of Germany on Western
terms, which envision including
it in NATO. The Soviet leaders
probably calculate their tac-
tics will eventually convince
the West Germans that their
only hope for unity lies in
direct talks with the East
German regime and with Moscow
in which the principle of neu-
trality for Germany would be
assumed.
In the meantime, the USSR
hopes that other West European
powers can be maneuvered into
abandoning their support of
the present Western position
that agreement on German reuni-
fication is an essential part
of consideration of any Euro-
pean security scheme.
To achieve these ends, the
USSR must assure the Germans
that its unyielding opposition
to Western terms for unifica-
tion does not mean that bi-
lateral talks with Moscow would
be unprofitable. In addition,
the British and French must be
persuaded that Soviet security
offers are genuine and reason-
able.
Soviet charge Kudriavtsev
in Vienna dropped a hint to an
Austrian official, presumably
in the expectation it would be
relayed to Bonn, that the posi-
tion on Germany taken by
Molotov at Geneva was not nec-
essarily final and that he could
imagine a possible solution
along the lines of the Austrian
settlement.. He warned, however,
that the USS. would never agree
to a unified Germany within
NATO-
V. A. Zorin, who will be
the first Soviet ambassador to
West Germany, told correspond-
ents in Moscow that Soviet-West
German negotiations on German
reunification are "entirely pos-
sible" and could even be arranged
before the exchange of diplo-
matic representatives between
the two capitals.
More such hints, aimed
primarily at strengthening the
position of the Social Democrats
and other West German critics of
Adenauer's foreign policy, can
be expected.
Meanwhile, the Communists
are likely to continue steady
pressure, particularly on such
vulnerable points as Berlin, for
recognition of the East German
regime by Bonn.
Molotov put forward a wide
variety of security plans in the
hope of interesting Western
European opinion in one or the
other of them. There were two
variations of long-run security
plans involving the eventual
dissolution of NATO and the
Warsaw pact, and a proposed
short-run agreement between the
two blocs. not to use force a-
gainst each other and to consult
in case of a threat to peace.
Molotov also proposed that
nearly all foreign troops be
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 November 1955
withdrawn from Germany; or that
half of these forces be with-
drawn, with each power sub-
sequently demobilizing an e-
quivalent number of troops.
He expressed interest in pro-
posals originally made by Eden
for limiting and inspecting
forces in Central Europe.
The ultimate aim of any
of these proposals by Moscow
is to undermine the effective-
ness of NATO and obtain the
withdrawal of as many American
troops as possible from Europe.
Molotov sought also to lay
the basis for the eventual es-
tablishment of some security
plan by getting four-power en-
do.rs,ement., of six general prin-
ciples which the United States
had already cited as common to
the proposals made by both the
USSR and the Western powers.
However, the Western foreign
ministers pointed ou.t?that--such
a declaration would be mis-
leading in the absence of agree-
ment on German unity.
When the foreign ministers
took up the East-West trade and
contacts questions which had
become stalemated at the experts
level, Molotov made no serious
effort to reach agreement. The
USSR continued to seek only an
endorsement of the programs of
exchanges it has been engaging
in lately and an agreement that
strategic trade controls should
be abolished.
The USSR was obviously put
on the defensive by specific
Western proposals for the re-
moval of Soviet restrictions on
the free flow of information
and,tra.vel into and within the
Soviet Union. Molotov rejected
these suggestions sharply and
charged that the West was de-
manding freedom for war propa-
ganda.
Moscow is as interested as
aver in exchange programs that
will bring it benefits, partie-
ular.ly., in the industrial, agri-
cultural, and technical fields,
but it is going to limit care-
fully the openings it permits
in the iron curtain.
Disarmament
Three days of discussion
on disarmament ended in an im-
passe between the Soviet and
Western positions practically
identical to that at the con-
clusion of the UN Disarmament
Subcommittee meetings last
September. Molotov appeared,
however', to be making a greater
effort to record a measure of
agreement on this subject than
on either of the other two
items on the Geneva agenda.
As Premier Bulganin did at
the summit conference, Molotov
reaffirmed the USSR's 10 May
proposals as his basic position
and stressed the areas of agree-
ment with the Western disarma-
ment position. He repeatedly
urged the Western ministers to
agree to a. "moral and political
condemnation" of the use of
atomic weapons as an important
step toward the full prohibition
of such weapons and the conclu-
sion of a general international
convention.
Molotov made' no direct
reference to President Eisen-
hower's latest letter to Bulgan-
in offering to add the Soviet
ground control plan to his
aerial inspection proposals. lie
appeared anxious to forestall
further discussion of this idea
by declaring that the ground
control plan could not be
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CURRENT INTELLIGENCE WEEKLY SUMMARY
divorced from the general Soviet
disarmament plan of 10 May.
This evasiveness may reflect
apprehension that the USSR's
case for moving ahead with a
general disarmament agreement
is vulnerable to a broadly based
inspection plan encompassing
both Soviet and American programs.
Molotov repeated previous
Soviet criticisms that the Presi-
dent's proposals failed to come
to grips with the central problem
of ending the arms race and re-
ducing the danger of war. He
also argued that the Eisenhower
plan would increase tensions by
providing foreign states with
military information which might
be used for a surprise attack.
However, the Soviet leader-
ship sought to balance these
criticisms with a more positive
statement that it was ready to
adopt "a favorable attitude"
toward the Eisenhower plan if
it were made "an integral part"
of a general agreement for the
reduction of armaments and the
prohibition of atomic weapons.
Molotov suggested that the
President's plan might be in-
cluded in the "final stage" of
implementation of such an agree-
ment.
ARAB-ISRAELI SITUATION
holotov's interest in com-
mitting the Western foreign min-
isters to a declaration endors-
ing the Soviet stand on ending
the arras race. and banning nu-
clear weapons prompted him to
approach Secretary i!)ulles
privately before the final ses-
sion on disarmament on 12 Novem-
ber with a draft declaration
which, he said, represented an
attempt to record provisions on
which the viewpoints of the four
powers seemed close.
After the Western ministers
had rejected this declaration
because of its reference to pro-
hibition of atomic weapons,
Molotov released it to the
press on 15 November. Like the
final Soviet statements on
European security and East-Jest
contacts, this declaration was
designed to give the impression
that the conference had succeeded
in extending the area of agree-
ment among the four powers on
basic issues, to demonstrate
Moscow's continuing interest in
further negotiations on these
issues, and to strengthen the
Soviet position for blaming the
West for tree. failure of the con-
ference to reach agreements on
any of the three agenda items.
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Tension on the Arab-Israeli
borders has decreased, and only
minor incidents were reported
last week, Both Egypt and
Israel are maintaining their
military positions, while UN
truce chief Burns is worsing
.for a withdrawal of troops in
the El Auja and Gaza sectors.
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CURRENT INTELLIGENCE 'WEEKLY SUMMARY
Israel is continuing ef-
forts to dramatize its need for
military aid and security guar-
antees from the West. Tel Aviv
is now even encouraging the
strengthening of the Turkish-
Iraqi pact, which it previously
denounced as being anti-Israel.
The Arab states continue
to jockey for position among
themselves, with Iraq and Egypt
competing for leadership. Jor-
dan has reportedly refused to
sign a military pact with Syria.,
and thus far has resisted Turk-
ish pressure to join the Turk-
ish-Iraqi pact. Lebanon has
indicated that the military
pact which Syria is seeking
The Grand Assembly of the
Tribes which convened in Kabul
on 15 November is now consider-
ing Prime Minister Daud's policy
on Pushtoonistan. If it ap-
proves the policy, an accelera-
tion of the last two years'
trend toward closer relations
with the Soviet bloc will prob-
ably, result. Afghanistan's
traditional concern for its
independence, however, will prob-
ably_ lead it to continue its
contacts with the West as a
counterbalance.
Daud reportedly posed two
questions for the assembly's
decision: (1) should the gov-
ernment continue support of in-
dependence for Pakistan's Push-
toon areas, and (2) if so,
should it build up its defensive
strength. Implicit in the sec-
ond is the necessity of estab-
lishing, closer ties with the
Soviet bloc.
with it will only emphasize an
existing agreement.
At the same time, negotia-
tions are taking place between
Syria and Czechoslovakia on an
arms purchase deal.
No additional shipments
of arms from Czechoslovakia to
Egypt have been reported in the
past week. Egyptian minister
of state Answar Sadat reported-
ly has stated that all arms con-
tracted for in the Soviet bloc
deal will be delivered by July
1956. Concurred
in by ORR)
Daud's statements to the
assembly concerning unsuccessful
efforts in the past to obtain
American help on the Pushtoon-
istan issue suggest that he is
trying to prepare the anti-Com-
munist tribesmen to accept So-
viet bloc aid. He will probably
interpret even equivocal ap-
proval as committing the whole
nation to his own extreme policy
on Pushtoonista.n.
If Daud obtains an endorse-
ment from the tribal assembly,
he will be susceptible to new
Soviet offers when Bulganin and
Khrushchev visit Kabul next
month. He is, however, primari-
ly. interested in serving his
own ends and has shown no desire
to become a tool of Soviet policy.
The USSR has reportedly
offered to take over the Ameri-
can-financed and constructed
Helmand Valley development
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 November 1955
program and,the Afghan govern-
ment has requested Morrison-
Knudsen, the-American company
working on the project, to ship
all incoming equipment through
the Soviet Union. The tradi-
tional caution of the royal
family as a group, however,
makes it likely that the door
will remain open to Western
approaches.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 November 1955
Relations Between
The USSR and Israel
Despite the serious im-
plications for Israel of Soviet`
bloc arms shipments to Egypt,
Soviet-Israeli relations have
remained ostensibly correct
though restrained.
Soviet spokesmen have side-
stepped Israeli protests by
justifying the arms deal with
Egypt as a legitimate commercial
arrangement available also to
Israel under certain circum-
stances.
TASS and Izvestia have both
denied, however, at the USSR
has actually offered or intends
to offer arms to Israel. A
Polish broadcast on 23 October
stated that if Israel had shown
even "a minimum of independent
policy," it could have obtained
arms from the Soviet bloc just
as Egypt has. Rumors stating
that Moscow plans to sell arms
to both sides remain unconfirmed.
Moscow is certainly aware
of the bargaining power it
possesses as a result of Is-
rael's desire to obtain the
necessary weapons to sustain it-
self and Israel's deep concern
over the status of some two and
a half million Jews inside the
Soviet bloc.
There have been several
hints to Israel by Soviet bloc
spokesmen that emigration of
these Jews might be permitted
if Israel would abandon its pro-
Western orientation. Soviet
authorities have continued to
encourage the Israelis by grant-
ing a few exit permits to elder-
ly Jewish citizens who have
relatives in Israel.
According to the Israeli
minister to Rome, Foreign Minis-
ter Molotov told Prime Mins-
ter Sharett at Geneva, that the
sale of arms to Egypt was un-
important and that Israel should
welcome the current Egyptian
attitude because it was directed
against the Baghdad pact.
During the conversation, which
was described as "heated,"
Molotov accused Israel of being
a tool of the United States
and an American base in the
Middle East, an accusation
which has also been emphasized
in Communist propaganda..
Soviet accounts of the re-
cent border clashes between
Israel and the Arabs have been
decidedly slanted to condemn
Israeli aggression, and com-
mentaries on the incidents in-
evitably imply that American
policies are, in the last analy-
sis, responsible.
Meanwhile, however, econom-
ic and cultural relations be-
tween Israel and the USSR are
proceeding with little change.
A trade agreement was announced
on 3 November providing for an
increase in trade under the
two-year-old Soviet-Israeli
barter arrangements.
Moscow probably considers
its recent moves have enhanced
its capabilities for influencing
both Israel and the Arabs. A
Moscow broadcast has noted that
while foreign spokesmen have
dwelt on the serious implica-
tions of the arms deal, no one
has raised the question of
convening the UN Security
Council.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The triumphant return of
Sultan Mohamed ben Youssef to
Rabat on 16 November, while ap-
parently without any untoward
incident, does not answer the
all-important question of
whether terrorism will end.
The record high of 91 incidents
of bombing and shooting regis-
tered during the week ending
11 November may either be evi-
dence of continued nationalist
pressure on Paris or may in-
dicate that the moderate
nationalist leaders have lost
control to the extremists.
The answer may not become ap-
parent for several weeks. If
violence continues, formation
of a Moroccan government will
be exceedingly difficult and
negotiations for an agreement
re-establishing Moroccan au-
tonomy will be delayed.
The sultan will have to
maneuver cautiously if he is
to work successfully with the
French government. Neverthe-
less, several nationalists who
claim to have helped draft the
sultan's speech which he will
read on 18 November--anniver-
sary of his enthronement in
1927--have cryptically suggest-
ed that he will take a tough
nationalist line.
Andre^Dubois, former pre-
fect of the Paris police who
has succeeded General Boyer de
Latour as resident general, has
informed American officials in
Paris that ending terrorism
will be his main problem. He
said that he would work primari-
ly through the new Moroccan gov-
ernment, and that he believed
the key to the situation might
lie in Ahmed Balafrej, secre-
tary general of Istiglal, who
is now in Paris.
Meanwhile, prominent Isti-
qlal leaders have emphasized
to American officials that they
will continue to seek firm as-
s u r ances from France of com-
plete Moroccan independence,
but that they will accept inde-
pendence by stages. The party
will oppose a vaguely worded a-
greement, such as France con-
cluded with Tunisia, and will
insist on Moroccan diplomatic
representation and autonomous
armed forces.
The party is reported to
have established three condi-
tions for participation in a
Moroccan government: (1) a
minimum party representation
of 40 percent, (2) approval of
the prime minister, and (3) ap-
proval of the prime minister's
detailed program. These de-
mands probably represent the
Istiqlal's maximum position,
but the party leaders are aware
of their strength and are not
prepared to concede any point
unnecessarily. The Istigial
leaders are also aware of the
pitfalls facing the sultan as
he attempts to hold a middle
course between Moroccan and
French pressures.
The sultan has implicitly
criticized the United States
for recognizing his successor,
Mohamed ben Arafa, according to
the Spanish ambassador. When
queried by a press correspondent
concerning his attitude toward
the American air bases in Mor-
occo, the sultan replied that
one of the first tasks of his
government will be to find out
what the "obligations are and
discuss them with both parties."
The fact that he was not con-
sulted regarding the 1950 French-
American base agreement has been
a sore point with both the sul-
tan and Moroccan nationalists.
Even though the sultan indicated
to a high American official in
1951 his satisfaction that the
bases were being built, he may
now demand more direct benefits
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for Morocco from the agreement.
He can also be expected to de-
mand that France transfer
the bases and installations,
which under the 1950 agree-
ment are the property of the
French government, to Morocco.
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The government of interim
president Nereu Ramos seems
generally successful so far in
its efforts to return Brazil to
normal and ensure the inaugura-
tion in January of President-
elect Juscelino Kubitschek--
the purpose for which the coup
of 11 November was apparently
undertaken. Elements of in-
stability remain, however, par-
ticularly among the military
leaders who had sought Kubi-
tschekb exclusion from office.
The coup was engineered by
Gen. Henrique Teixeira Lott a
few hours after he was dismissed
as war minister by acting pres-
ident Carlos Luz for attempting
to discipline an anti-Kubitschek
officer. Lott, a lifetime op-
ponent of military interference
in political affairs, defended
this violation of the consti-
tutioii by announcing that his
purpose was to "defend the con-
stitution," and he immediately
proceeded to legalize his move
by summoning a special session
of Congress-. Congress by a
better than two-to-one majority
confirmed Ramos, who, as vice
president of the Senate, was
constitutionally next in line
of succession. Virtually all
open opposition to the new Ramos
administration shortly capit-
ulated, and on 14 November Luz
resigned his post as president
of the Chamber of Deputies,
thereby eliminating his consti-
tutional claim to the presidency.
Ramos, 66 years old, comes
from an old and politically
prominent family and has previ-
ously been governor of a state,
vice president of Brazil (1946-
1951), and president of the
Chamber of Deputies (1951-1954).
Although a member of Kubitschek's
Social Democratic Party, he
apparently supported another
candidate in the presidential
campaign. He is considered
friendly to the United States.
In his first broadcast as
acting president, Ramos stated
that his "brief term in office
will not permit any administra-
tive accomplishments," adding
that his work would be "fully
dedicated to the re-establish-
ment of an atmosphere of mutual
understanding"among the politi-
cal forces. It is generally
assumed that this means he will
work for Kubitschek's peaceful
inauguration on 31 January.
Several of Ramos'.new
cabinet appointees had reportedly
been under consideration by
Kubitschek for similar posts in
his own administration next year.
The new foreign minister, Jose
Carlos de Macedo Soares, also a
member of a politically promi-
nent family, emphasized his
friendship for the United States
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17 November 1955
in his initial statement on
taking office. The new labor
minister, Nelson Omegna, how-
ever, has often been critical
of the United States and has
lent his name on occasion to
Communist-front activities.
Like Vice President-elect Joao
Goulart, Omegna is prominent
in the Brazilian Labor Party
and has on occasion staunchly
defended Goulart, who was
ousted as labor minister by
military pressure in 1954 for
attempting to build a polit-
ical labor force with Com-
munist co-operation.
Although calm and order
apparently preva.Li, tensions
are expected to continue for the
remainder of Ramos' term and on
into the Kubitschek adminis-
tration. The elements of under-
lying instability, reflected
in the maintenance of press cen-
sorship, are both constitutional
and military. The legal presi.-
dent of Brazil is still Cafe
Filho, who is merely on leave
recuperating from a heart d.t-
tack and who is thus technically
entitled to resume office at
any time before Kubitschek's
inauguration.
A second threat is the
continuing disaffection of
many important military lead-
ers. Those in command of the
important district of Rio Grand 25X1
do Sul have not yet announced
their allegiance to the Ramos
government
The Communists are also a
source of potential difficulties
for the Ramos government.
Written instructions report-
edly were given to all party
units on 11 November to sup-
port General Lott's move by
all mass actions possible,
and party members in the
armed forces were ordered
to be ready to divert arms
"to the people" in case of
resistance from anti-Lott
forces. Party press mani-
festoes on 12 and 13 Novem-
ber also called for sup-
port of Lott.
The police on 12 Novem-
ber, nevertheless, announced
the arrest of 10 Communists
for holding street-corner
meetings and distributing
propaganda.
Argentina
The new Argentine govern-
ment of General Pedro Aramburu,
which came to power in the
bloodless coup of 13 November,
probably has much broader
support than its predecessor
among both the armed forces
and civilian groups. Aram-
buru, who took over on the
ground that the ultranational-
ist Catholic elements were
becoming dominant in the Lon-
ardi government, is generally
regarded as both able and
pro-US.
The coup was precipitated
by ex-president Lonardi's
naming of two extreme right-
ists to replace the highly
respected and democratically
inclined Dr. Eduardo Russo in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
his dual post as minister of
interior and justice. This
move, following several days
of growing dissension in the
Lonardi government over how
to deal with ex-Peronista
leaders, unified the armed
forces against Lonardi. It
also provoked the resignation
of all but two members of the
National Consultative Council,
the advisory body serving in
lieu of congress and composed.
of members of all political
parties except the Peronistas
and Communists. Subsequently
the council resignations were
withdrawn on Aramburu's re-
quest.
Aramburu was army chief
of staff under Lonardi, having
risen to the rank of major
general
Most
his in
that government, notably the
rightists, have been replaced,
while Busso has been reinstated
in the cabinet.
Aramburu is reported to
have the "full support" of the
armed forces and of democratic
organizations. The unity of
the armed forces will be se-
verely strained, however, if
the government carries out a
radical purge of the military
in its efforts to shatter all
sources of former Peronista
strength. Younger military
officers are reported pressing
for a public investigation
and drastic purge of officers
who served under Peron as well
as stronger measures against
the Communists and the Peron-
ista-dominated General Confed-
eration of Labor (CGT).
The government moved to
crush the CGT on 16 November
by putting a government admin-
istrator in charge of the con-
federation until new union e-
lections are held. This ac-
tion and other firm measures
were prompted by the general
strike called on 15 November
by the CGT to protest the
confederation's loss of con-
trol over various unions.
Troops were called out to main-
tain order and protect the
large numbers of workers who
remained on the job. In con-
sequence, the work stoppage
even in Buenos Aires was esti-
mated at about 50 percent ef-
fective and concentrated in
the industrial area, while
commerce and public services
were scarcely affected.
Communist aggressiveness
and propaganda activity have
increased considerably in
recent weeks. On 7 November
the police had difficulty in
dispersing a surprisingly
belligerent crowd of some 4,000
people who staged a demonstra-
tion near the center of Buenos
Aires following a Communist
party meeting to commemorate
the Bolshevik revolution.
The Communists have also
stepped up activity among uni-
versity students and probably
labor, although their precise
influence in the CGT is not known.
Since the lack of concrete meas
ures against the Communists was
one of the military's complaints
against Lonardi, the new govern-
ment will probably give higher
priority to formulating an anti-
Communist program.
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Japanese Conservative Merger
Brightens Government's Prospects
The formation of the Liber-
al-Democratic Party on 15 Novem-
ber by the merger of the former
Democratic and Liberal Parties
gives the Japanese government a
strong parliamentary majority
and improves the prospects for
a stable regime. The merger of
the two conservative parties
necessitated a difficult com-
promise on the party leadership
question, however, and this
issue may well continue'as a
diversive factor.
Under present plans, Hato?-
yama will continue as prime
minister for the time being, and
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CURRENT INTELLIGENCE WEEKLY SUMMARY
a new party chief will be e-
lected next spring, at which
time the Liberal-Democratic
position at the national and
local level will be consoli-
dated. In the interim,party
affairs will be directed by a
committee composed of Hatoyama,
former Liberal Party president
Ogata, and senior party leaders
Bukichi Miki and Bamboku Ono.
Apparently Hatoyama will con-
cern himself primarily with
government administration while
Ogata manages party affairs in
anticipation of his succession
to both party and government
leadership.
The primary objective of
the new party is to counter the
rise of the Socialists, and
only after its position is con-
solidated will a popular vote
of confidence be sought in
general elections.
Although former prime minis-
.er Yoshida has refused to join
the party, promises of cabinet
and party positions and reluc-
tance to stay off a successful
bandwagon have persuaded practi-
cally all of his faction in the
Liberal Party to go along with
the unity move.
The government, with the
backing of 298 members of the
467-member lower house of the
Diet, is facing the extra-
ordinary Diet session opening
on 22 November with confidence.
Plans call for Hatoyama and his
cabinet to resign on 21 November,
for Hatoyama to be re-elected
prime minister the following
day, and for his third cabinet,
which reportedly will include
seven former Liberals and nine
former Democrats, to be formed
immediately thereafter.
The new government is ex-
pected to adopt the stronger
policies of the old Liberal
Party in negotiations with the
USSR and the settlement of
reparations to the Philippines.
There is a good chance that
Shigemitsu will be retained as
foreign minister to emphasize
the party's friendship for the
United States and firmness to-
ward the USSR. The new party's
announced policy toward the So-
viet Union includes demands for
the immediate repatriation of
Japanese detainees, the uncon-
ditional return of Shikotan, the
Habomais, and the southern
Kurils, and the calling of an
international conference to
settle the status of the north-
ern Kurils and South Sakhalin.
The new government may not ad-
here to this policy, however,
and Tokyo may still come to an
agreement with Moscow on the
latter's terms.
The new government is not
likely to alter the present
policies of permitting and en-
couraging the development of
contacts with Communist China,
since sentiment for closer re-
lations with the Communist main-
land enjoys long-standing and
widespread support in Japan.
The conservative amalgama-
tion is a significant step to-
ward political stability in Japan
and should permit the government
to devote primary attention to
the country's pressing economic,
defense and foreign relations
problems. The generally con-
servative Japanese outlook sug-
gests that the new government
will move to improve the domestic
security situation but is un-
likely to speed up rearmament
and constitutional revision to
legalize military forces. Tokyo
also will probably continue to
assert increasing independence
in dealing with the United
States.
The ties binding the con-
servatives have yet to be tested
and the competition for leader-
ship could disrupt the alliance.
The traditional tendency of
Japanese politicians to give
their loyalties to individuals
rather than to party organiza-
tions will also be a continuing
thr
eat to the new-found unity.
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Chinese Road Construction
In Tibetan Areas
Since 1950 the Chinese
Communists have been engaged in
an extensive highway construc-
tion program designed to link
Tibet with China proper and
to extend their political admin-
istration into areas never be-
fore controlled by a Chinese
government. The concurrent ex-
tension of roads along the Him-
alayan frontier has important
strategic implications for
India. The new roads built
this year in Tsinghai support
important Chinese geologic ex-
ploration.
Completion of both the
Sikang-Tibet and Tsinghai-Tibet
roads in 1954 was a major a-
chievement by the Chinese and
provided Tibet with motor-
transport links to the outside
world for the first time.
Maintenance of these key roads
has been a major problem this
year, when the monsoon season
was unusually severe and there
were a number of washouts and
landslides.
New construction in Tibet
this year has been concentrated
in the area of heaviest popula-
tion. A triangular road system
linking the three largest towns
--Lhasa, Shigatse, and Gyangtse
--was announced completed by
Peiping on 1 November. In
conjunction with this project,
a new steel bridge was built
across the Lhasa River, while
another, the first to be built
across the Brahma.putra River
in Tibet, is under construction.
The Chinese have also been
making a motor road out of the
main caravan trade route from
Lhasa to the Indian border via
Gyangtse and Phari Dzong. This 25X1
project is nearly completed,
and
the inese soon intend to ex-
tend a motor road from Shigatse
down an old caravan route along
the Arun River valley to Nepal.
The steady Chinese expansion
of roads in the vicinity of
the Indian and Nepalese bound-
aries seriously concerns New
Tibetan Road Development
Highway
-- - - Highway planned or
under construction
-t-~ Railroad, selected
????.?. Caravan route
???.?????? Chinese boundary claim
SINKIANG
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17 November 1955
Delhi, whose frontier area ap-
pears vulnerable in the face
of unrest among border tribes
and a separatist "Naga independ-
ence Movement" in Assam. Recent
confusion over the western
Tibetan-Indian frontier in the
vicinity of Bara Hoti has re-
sulted in Sino-Indian discus-
sions of exact boundary align-
ment. In the meantime, India
has moved military forces into
border areas which it considers
its own, such as Tawang near
Bhutan, in proximity to Chinese
garrison forces in Tibet.
On the northern Tibetan.
plateau in Tsinghai Province,
extensive Chinese geologic
prospecting in the Tsaidam
Basin has been accompanied this
year by important road construc-.
tion. The Chinese claim the
area is rich in a. wide variety
of mineral resources, and
petroleum exploration in partic-
ular has received great pub-
licity. Along the northern
and southern edge of the basin,
two 500-mile east-west roads
have been developed from car-
avan routes linking Sinkiang
Philippine Election Results
The Nacionalista Party's
sweeping victory in the Philip-
pine elections last week was a
reflection of the continuing
high popularity of President
Magsaysay and of popular sup-
port for his pro-American
policies. The Liberal Party
was virtually eliminated from
the Senate.
Of the nine Liberal can-
didates for the Senate, only
Senator Recto--the president's
archcritic who ran as a "guest"
on the Liberal ticket--managed
to win a seat. He made a
poorer showing, however, than
with the main Tsinghai-Tibet
highway. In addition, a new
600-mile road is being con-
structed north from the Tsaidam
across the rugged Humboldt
Range to the Yumen oil fields.
The degree to which the
Chinese are extending their
control into remote areas of
Tibet is illustrated by the
construction of a new 125-
mile road from Sining into
the Kwo Lo district east of
the Amne Machine Range. This
region, at the headwaters of
the Yellow River, had not been
subjected to Chinese control
prior to 1950 and is the loca-
tion of warlike and independent
nomadic Mongol tribes which
until the advent of Communist
rule retained their 13th
century organization established
by Genghis Khan. Along all
these important new roads
Chinese semimilitary settle-
ments have been established
and the influx of thousands
of Chinese settlers for the
first time in Tibet will have
lasting effects on the area.
had generally been expected and
his influence has undoubtedly.
been diminished. In the prov-
ince, the Nacionalistas won all
but a handful of the 52 gov-
ernorships..
Despite this Liberal de-
bacle, the Philippine Congress
will not be a rubber stamp for
the president's programs. The
powerful Senator Laurel, who
actively campaigned for Recto,
has announced that he will lead
the opposition in the new
Senate, thus clearly indicating
that the Nacionalista "old
guard" will continue to obstrttet
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the adoption and implementation
of Magsaysay's program.
The Laurel opposition will
provide a focal point for Phil-
ippine legislators of both
parties who give only lip"
service to the reforms advocated
by the president. The Laurel-
Recto team may eventually form
the basis for a new opposition
party which would probably ad-
vocate a loosening of the close
Philippine American relation-
ship. At present, however,
Laurel and Recto can count on
the occasional support of not
Political efforts by the
Laotian government to regain
administrative control over
the two northern provinces of
Laos are apparently being
supplemented by plans for armed
action should political means
fail. Although similar plans
have been canceled in the past
because of disagreement among
government officials, it is.
probable that there will be
less reluctance to launch a
campaign after the December
election if the talks with
the Communists break down as
is expected.
The government is going
ahead with plans to hold the
national assembly elections
on 25 December without Pathet
Lao participation. Of the
235 candidates for the 39 seats
at stake, only three or four
are believed to be Pathet Lao
supporters. The two major
Laotian parties--one headed by
Premier Katay,the other by
the foreign minister--have
formed a coalition in an at-
more than ahalf-dozen senators;
they have a larger following
in the House of Representatives,
of which Laurel's son is speaker.
The elections have placed
Magsaysay in an almost unchal-
lengeable.position to retain
the presidency in 1957. Any
significant progress in the
carrying out of his program,
however, will require more
effective utilization of presi-
dential authority than has been
the case in the past.
tempt to ensure the defeat of
any pro-Communist candidates.
It is possible that a govern-
ment reorganization will follow
the elections and that this will
affect plans for military action.
A military campaign in the
north would raise severe
logistic and command problems
stemming from terrain and com-
munications difficulties. The
government now has about 5,000
troops in Phong Saly and Sam
Neua Provinces, most of them
in isolated outposts. Rein-
forcement of these troops could
be achieved only with difficulty
and would further aggravate the
present air-supply problem.
The Pathet Lao force in
the two northern provinces, which
receives. political and military
direction from the Viet Minh,
now numbers about 6,300 and could
be reinforced by up to 18,000
Viet Minh troops in the Laotian
border area.
The royal government may
be counting on American or
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Manila pact resources
for support in any
armed action. It
has already urgently
requested additional
aircraft from the
United States for
use in supplying the
royal forces in the
north. It is also
showing increasing
interest in Manila
pact developments.
Meanwhile,
Premier Ka.ta.y has
cited the futility
of continued negotia-
tions with the Pathet
Lao and has requested
the International
Control Commission
to refer the ques-
tion to Britain and
the USSR as cochair-
men of the 1954
Geneva conference.
However, when.
0
P HON G
S A L Y '-
i'HONG SALY
PROVINCE -
Il
FOTAL FORCES
-ANL700
I
PL WO
ANL4500 ,
PL PATHET LAO FORCES
ANL LAOTIAN NATIONAL ARMY
Molotov and British foreign
secretary Macmillan met in
Geneva, on 14 November on the
Vietnam problem, Molotov re
discontent Grows
In East Germany
Popular discontent in
East Germany has deepened in
recent months, particularly
among young people who fear
they will be absorbed into a.
new army. Loss of hope and
fear of the future are a. ma.jcr
cause of the substantial flow
of refugees to the West, which
in October reached the highest
point for such defections since
June 1953.
The flood of refugees has
recently been given further
impetus by the growing feelitg
among the people that the trans-
fer of Soviet responsibilities
for border control to East Ger-
25X1
portedly put off any discussion
of Laos with the excuse that talks
there were still in progresso
many has brought new restrictions
and that greater restrictions
can be expected. Other reasons
given by refugees for fleeing
East Germany are food shortages
and the pressures of "socializa-
tion," such as increased work
norms, forced participation in
political activities, anti-
church measures, and police
surveillance.
A major factor affecting
popular morale, which will be-
come more important during the
winter months, is the deterio-
ration of the food situation.
Demonstrations protesting the
food shortages were reported
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CURRENT INTELLIGENCE WEEKLY SUMMARY
in October from Karl-Marx-Stadt,
Cottbus, and Erfurt. The poor
1955 potato crop in East Ger-
many and Poland, the major
source of East German imports,
will result in a serious short-
age of this staple food during
the winter and spring.
Premier Grotewohl, in a
speech at the 25th plenum of
the Socialist Unity Party on
25 October, blamed the potato
shortage on poor administration
(presumably transportation and
distribution), the lack of man-
power on the farms and incen-
tives to the farmers, weather
conditions, and late harvest-
ing. In an effort to stimulate
.the marketing of agricultural
products,the regime decreed
on 12 November that, as of 1
January, peasants will be per-
mitted to sell more produce
on the free market.
There have also been re-
ports of opposition to the
signing of pledges not to enter
West Berlin as well as to Com-
munist demands for pledges of
extra work. In addition to
these forced pledges, East Ger-
man workers in a number of in-
dustries are burdened with in-
creased work norms imposed by
the regime as part of its
economy drive. These increases
may be based on an as yet un-
published decree which was re-
portedly adopted last May and
which provides for wage reduc-
tions and higher work norms.
French Election Situation
Premier Faure is still
pressing for National Assembly
elections as soon as possible,
Persistent efforts by the
regime to force young men into
military service have resulted
in their demoralization. Many
youths have been especially
fearful of the prospect of
forced military service since
the passage of the constitu-
tional amendment on 26.September
permitting military activities.
This amendment is popularly re-
garded as a prelude to conscrip-
tion. A number of East German
leaders, moreover, have in re-
cent weeks publicly referred
to the government's military
obligations under the Warsaw pact
and the need for an army now that
East Germany is a sovereign
state. East German youth leaders
were instructed in early October
that all youths must have it
drilled into them that their in-
terests lie in East Germany, and
that only through military serv-
ice can they protect and defend
these interests.
The expected formal an-
nouncement of a national army,
even though it may not entail im-
mediate steps to institute con-
scription, will probably cause
further deterioration of popular
morale.
Rather than resulting in
serious demonstrations against
the regime, however, the popular
discontent will probably result
in a continuation of the unusual-
ly high rate of escape to the
West this fall and winter,
F__ I
but he now has little chance of
forcing balloting before Janu-
ary. In any event, his tenure
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CURRENT INTELLIGENCE WEEKLY SUMMARY
will be short. His coalition
is deeply split, and his de-
pendence on Communist backing
in recent assembly votes on the
election issue precludes his
retaining the premiership un-
less early dissolution of the
assembly is voted.
A wearied assembly turned
down Faure's proposal to con-
tinue in session through the
early hours of 17 November.
When it reconvened later in the
morning, it agreed to consider
the Council' of the Republic's
plan for single-member constitu-
encies. December elections
would not be possible under this
measure, which requires a run-
off vote if no candidate wins a
majority on the first ballot.
Despite indications that
the single-member constituency
plan is gaining favor in the
Hungarian Government
Shifts 156mestic Political Tactics
Major policy statements
and personnel shifts in the
Hungarian hierarchy during the
past week signify a shift to
more moderate party tactics in
Hungary. Such tactics will
bring the Hungarian party more
in line with current Soviet
policies land probably reflect
First Secretary Rakosi?s suc-
cess in restoring party dis-
cipline and control. This has
been the problem of highest
priority since the removal of
Imre Nagy from the premiershlp
on charges of "rightist devia-
tion" last April.
An attack against left-
wing extremism was initiated,
with Rakosi?s approval, by
politburo member Istvan Kovacs
in the principal address at the
Budapest commemoration of the
October Revolution on 6 November.
assembly, there is no assurance
that it will be accepted. Many
who profess to favor it may
vote against it if passage seems
likely, because it could pre-
vent their re-election. Oppo-
nents of early elections and
opponents of the single-member
system may combine efforts to
drag out the debate.
Those conservative deputies
who fear for their fortunes
under the single-member system
may be induced to support it,
however, if the compulsory
voting measure put through the
assembly on 16 November becomes
law. Compulsory voting would
help the conservatives. The
parties of the left, being
better disciplined, have al-
ways had an advantage in getting
their voters to the polls.
Kovacs indicated that the main
offense will continue against
right opportunism, but that
left-wing deviationists who are
injuring party policy by "forci-
ble administrative methods" must
be checked.
On 10 November the central
committee of the party announced
that three district leaders had
been expelled from the party and
"other people called to account
for using methods alien to the
party and violating socialist
legality." From the published
criticism of those expelled,
this action appears to be an
implementation of Kovacs' threat
against leftist elements.
Following a central com-
mittee meeting from 9 to 12
November, the party announced a
number of personnel shifts which
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also appear to be steps to im-
plement this tactic. Kovacs,
who in the past has frequently
attacked excesses in both the
right and left wings, was
elected to the secretariat of
the central committee. At the
same time, Janos Matolcsi was
transferred from the secretariat
to become minister of agricul-
ture, replacing Ferenc Erdei,
who was elevated to deputy
premier.
While this shift does not
portend a basic change in
agricultural policy, the trans-
fer of a party operative like
Matolcsi may indicate a desire
for closer and more active
party supervision of agri-
culture. The elevation of
Erdei, a former secretary gen-
eral of the Peasant Party,
represents an encouragement
to the moderates. These
changes, while indicating a
moderation in Hungarian domes-
tic policies, probably will
not result in a basic re-
orientation.
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17 November 1955
Hard pressed to make a
success of its second Five-Year
Plan for developing the Indian
economy, the Nehru government
has recently expressed renewed
friendliness toward the United
States, but will probably se-
riously consider any new offers
of economic assistance from the
Soviet bloc.
India's history since 1947
has been one primarily of frus-
tra.tions and disappointment.
Politically, the Congress Party's
popularity has deteriorated and
the government has been sub-
jected to growing criticism.
Economically, the Congress Party
government has been unable
to demonstrate to the satis-
faction of the Indian people
that it is achieving a real im-
provement in the standard of
living.
Internationally, Nehru's
ambition to make India. an im-
portant world power and to lead
the nations of Asia has been
.hampered by the constant di-
version of his attention to
domestic political difficulties,
transportation crises, and
food shortages.
By late 1954, Congress
Party leaders recognized the
need for revitalization and
CARRY OUT FIVE-YEAR PLAN
actively began to tighten the
party structure.
Following Nehru's visit
to Communist China. in October,
however, it became clear that
political steps were not enough
and that economic problems
would have to be tackled more
intensively than under the
first Five-Year Plan if the Con-
gress Party was to maintain con-
trol of India and if India were
to compete successfully with
China for leadership in Asia.
In January 1955, there-
fore, the Congress Party for-
malized Nehru's plan for rapid
advancement through socializa-
tion of the Indian economy.
In April, P.C. Mahalanobis
of the Indian' Statistical Insti-
tute produced a draft second
Five-Year Plan to implement the
Congress Party's program. Under
this plan, which apparently had
Nehru's blessing, private in-
dustry was assigned a distinctly
subordinate position.
Subsequently, however,
certain government officials,
independent economists, and rep-
resentatives of private indus-
try pointed out numerous practi-
cal difficulties which- had been
overlooked by the government
and Mahalanobis in their
planning.
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By midyear, New Delhi
apparently saw that it was faced
with the dilemma of raising
considerably more funds than it
could see any likelihood of do-
ing, or of drastically altering
the scope or contents of the
plan. Otherwise, the second
Five Year Plan would fail--pos-
sibly to a greater extent than
the first plan which ends in
1956.
Need for Foreign Aid
The combination of these
factors seems to have produced
a sense of urgency on the part
of Nehru and his government and
acknowledgement that their ambi-
tions could not be fulfilled
without large quantities of
foreign aid. By July, Indian
officials were informing the
American embassy in New Delhi
that they were thinking in terms
of obtaining such aid.
In September, the Indian
government let it be known that
it was prepared to adopt a new,
friendly attitude toward the
United States, presumably in
return for increased economic
assistance. V. K. Krishna Menon
startled observers by publicly
supporting the United States.
Since then, there has been
continuous comment from a wide
variety of sources about India's
need for large quantities of
foreign aid and about the
desirability of improved re-
lations with the United States.
These sources have since Octo-
ber included Madame Pandit,
Indian peasant leader N. G.
Ranga, and a series of obvious-
ly inspired newspaper articles
in both the Indian and American
press.
At the same time, India is
probably prepared to accept So-
viet bloc aid as well. New Delhi
has never been opposed to Soviet
and Satellite offers of trade
and technical help, though polit-
ically it is reserved in its
attitude toward the bloc. Its
reluctance prior to 1954 to
deal with the Soviet Union re-
sulted from the latter's failure
to follow up economic propa-
ganda with actual deliveries.
Moscow, since 1954, has demon-
strated a new willingness to
make and fulfill commitments,
and Soviet bloc offers are cer-
tain to receive serious consid-
eration by the Indian government.
Delay or failure by the
West to respond to current In-
dian overtures would probably
increase India's willingness to
accept substantial Soviet aid,
particularly if generous terms
were offered. Bulganin and
Khrushchev will almost certainly 25X1
make such offers during their
visit to New Delhi.- F
ORR)
25X1
YUGOSLAVIA MAINTAINS BALANCED POSITION BETWEEN EAST AND WEST
Following the rapid im-
provement in relations with the
Soviet bloc during the past
summer, Yugoslav leaders are
trying to restore balance to
their international position.
Belgrade has again adopted a
friendlier attitude toward the
West as a counterweight to its
more favorable comments about
and actions toward the Soviet
bloc in recent months.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Relations with the West
President Tito's talk with
Secretary Dulles on 6 November
and the pleasure expressed by
the Yugoslav press over the visit
constitute the clearest public
expression of an improved Yugo-
slav attitude toward the West.
Tito was cordial, and the talks
generally friendly and under-
standing. On the two subjects
on 'rhich the Yugoslavs have been
most clearly anti-West in the
past, the German and Middle
Eastern problems, Tito expressed
moderate views, suggesting in-
creased sympathy for Western
policy aims.
Late in September, Belgrade
leaders made a number of con-
cessions in negotiations with
Deputy Under Secretary of State
Murphy. Belgrade agreed to an
increase in the size of the
American Military Assistance
Staff, and top defense officials
promised to make themselves more
accessible to Americans and to
answer requests for information
more promptly. It remains to
be seen to what extent Yugoslavia
will actually follow through on
these. assurances, some of which
invove questions in vigorous
dispute for nearly a year.
As a step toward revitaliz-
ing Balkan co-operation, Yugo-
slavia reportedly agreed at a
military conference with Greece
late in September to joint con-
struction of border fortifica-
tions. Belgrade officials have
told American representatives
that they regard as very un-
fortunate the deterioration in
Balkan pact relations caused
by the Cyprus problem and would
like to do anything in their
power to restore confidence
among the three Balkan states.
There are, however, a few
unsettled questions which are
potential trouble spots in Yugo-
slav-Western relationships.
Yugoslav officials have shown
considerable disappointment over
the failure to obtain a loan
from the Export-Import Bank for
the Majdanpek copper mines, long
a pet Yugoslav project. Also,
Belgrade's long-standing re-
quest for American, British, and
French aid in obtaining a re-
scheduling of all its medium-
term foreign debts has not been
formally acted on.
Yugoslav relations with
the Soviet bloc reached a high
point with the signing on 1
September of the fairly compre-
hensive economic agreements with
the USSR. Delegations of all
descriptions are being exchanged
by Yugoslavia and the bloc
countries in increasing numbers.
The press on both sides has been
replete with stories of progress
observed by these visitors and
with professions of fraternal
friendship and good will, al-
though not all of the Yugoslav
stories are uncritical.
While it seems probable
that the high-ranking Communists
in some of the Yugoslav delega-
tions have taken the opportuni-
ties afforded by such visits
to discuss theoretical problems
with Soviet bloc Communists,
there has been no evidence of
any formal contact between the
Yugoslav party and that of any
bloc country. Belgrade con-
tinues to call for exchange of
ideas and experience among all
"socialists," but it apparently
remains firmly opposed to any
association which would jeopard-
ize its independence.
The major unsettled ques-
tion in relations between Bel-
grade and the Soviet bloc is
that of economic obligations un-
fulfilled at the time of the
break in 1948. Yugoslavia has
made no progress'in obtaining
satisfaction from the Satellites
on its debt claims. Yugoslavia
may also become disillusioned
with the Soviet bloc if there
continues to be little evidence
of Soviet action to carry out
the Belgrade declaration of 2
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CURRENT INTELLIGENCE WEEKLY SUMMARY
June which sanctioned independ-
ent roads to socialism. Yugo-
slav leaders still profess
hope for eventual liberaliza-
tion and independence in the
Satellites, an idea reaffirmed
by Tito in his comments to
Dulles.
'Yugoslav Motives
Yugoslavia's recent ef-
forts to balance its foreign
policy by increased friendli-
ness toward the West appear to
be based on the belief that
its best interests lie in steer-
ing a course of comparative
independence of either the East
or the West, while seeking wnat-
ever ties may be possible with
other countries unattached to
the two power blocs. Belgrade
has carefully sought not to
follow any policies which could
seriously jeopardize its rela-
tions with either the East or
the West.
I while at the same
time consistently refusing
CHINESE COMMUNIST ECONOMIC AGENCIES DEVELOP ON SOVIET PATTERN
The number of agencies for
enforcing economic controls cai-
tinued to increase in Communist
China in 1954 and 1955 as vari-
ous sectors of the economy de-
veloped and as China increasing-
ly modeled its economic and
political institutions after
those of the Soviet Union.
Many such Chinese offices close-
ly resemble Soviet prototypes,
and the Soviet practice of
creating new agencies by subdi-
viding old ones is also being
followed.
The large numbers of Soviet
advisers assigned at all levels
from the State Council--China's
equivalent of the Council of
Ministers of the USSR--down to
individual plants have contrib-
uted greatly to the Soviet cast
being given to Chinese manufac-
turing and productive processes,
management and control techniques
and planning procedures.
. There is no evidence of
regular Soviet participation
in major economic planning
decisions, but.the USSR may
well have decisive influ-
ence on policies dependent
on Soviet aid.
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Soviet requests for strategic
goods.
The theme of the lengthy
review of Yugoslav foreign
policy given by Yugoslav foreign
secretary Popovic before the
Federal Assembly on 11 November
is that Belgrade was more than
satisfied with the success of
its foreign policy and antici-
pated no significant
present objectives.
1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 November 1955
Organization of the Economy
Communist China's economy
is formally controlled by two
commissions, four specialized
agencies and 26 ministries--all
directly responsible to the
State Council, There were only
13 economic control agencies in
early 1951.
The State Planning Commis-
sion is the key economic control
body. It must resolve conflicts
between other economic agencies
over the scarce resources of
capital, raw materials and
skilled labor, Its Bureau of
Technical Co-operation probably
administers the vital program
of technical aid from the USSR
and the European Satellites.
Probably the major reason
for the creation in September
1954 of a State Construction
Commission was the need for
co-ordinating the activities of
the numerous construction units
of the various industrial and
transport ministries, local
government enterprises, military
units, and the Ministry of
Building. A recent announce-
ment said there were 183 civil
engineering construction bureaus,
8 installation bureaus, 50 de-
signing units, and 178 other
enterprises engaged in construc-
tion work in Communist China.
New Ministries Formed
The new ministries formed
in the past year and a half re-
flect trends toward increasing
specialization and centralized
control. Future expansion of
the economic control mechanism
probably will involve the further
subdivision of key industrial
ministries to reflect the growth
of the economic sectors under
their control. For example,in
June 1955 the Ministry of Fuel
Industry was split into three
ministries controlling the coal,
petroleum and electric power
industries.
The new Ministry of Local
Industry and the Ministry of
the Third Machine Building
Industry control industries
operated by provincial or local
governments. The Ministry of
CONTROL OF COMMUNIST CHINA'S ECONOMY
Economic Agencies Under the State Council
State Planning Commission
National Construction Commission
SPECIALIZED AGENCIES
State Statistical Bureau
People' s Bank of China
State Bureau of Measures
& Standards
Central Handicrafts Administrative
Bureau
Civil Aviation Bureau
Central Industry & Commerce
Administrative Bureau
Agriculture-Agricultural Procurement-
Building Construction -Coal . Industry-,
Commerce - Communications-
Electric Power Industry - Finance-
Food - Foreign Trade - Forestry-
Geology - Heavy Industry - Labor.-
Light Industry - Local Industry-
First Machine. Building -'Second.
Machine Building(Defense Industries)-
Third Machine Building (Local
Enterprisers).-petroleum Industry-
Posts & Telecommunications -
Public Security- Railways -Supervision-
Tectile Industry - Water Conservancy.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
17 November 1955
Agricultural Products Procure-
ment,formed in June 1955, ap-
pears to have been set up in
response to the urgent need
for a more comprehensive con-
trol over grain supplies than
was provided by the Ministry
of Food.
Important economic control
functions are handled by the
Ministries of Public Security
and Supervision which act as
watchdogs over the economic
agencies to combat inefficiency
and mismanagement. The Chinese
Communist Party maintains tight
control over the economy through
the placement of party members
in key posts within the govern=
ment hierarchy and in all im-
portant industrial installations.
Administrative Weaknesses
Certain administrative
weaknesses are suggested by
Chinese press and radio com-
plaints of waste, inefficiency
and mismanagement. Accounting
and statistical techniques are
still deficient,though"improving.
There appears also to be con-
siderable duplication and an
overelaborate hierarchy,
MAJOR REVISIONS IN THE
The Soviet Union has re-
cently introduced major changes
in its educational program in
order to adjust the school sys-
tem--now approaching universal
ten-year schooling--to meet the
basic needs of the state. For-
merly geared to preparing a
select few students for higher
education, the secondary school
program is now being oriented
primarily toward preparing
students to go directly to work
after graduation. Greater
stress is being placed on
scientific subjects than pre-
viously, and extensive practi-
cal training has been intro-
duced.
Political reliability rather
than technical and administra-
tive ability has often been the
criterion for appointment to
important posts, with the re-
sult that incompetent party
members hold many critical posi-
tions. With a shortage of
trained managerial personnel,
the Communists have substituted
quantity for quality at execu-
tive levels. Much waste and in-
efficiency can also be traced
to wholesale adoption of Soviet
techniques, which are often not
intelligently adapted to special
Chinese conditions.
In spite of these weak-
nesses, the progress made by the
Chinese Communist economy to
date in industrial production
and construction, the efficiency
of taxation policies, and the
apparent success in control-
ling inflation, are evidence
that the system is increasingly
developing an ability to pro-
vide the strong controls re-
quired for the ambitious develop-
ment program set by Communist
China's leaders.
(Prepared by ORR)
SOVIET SCHOOL SYSTEM
These changes are steps in
the gradual transition of the
general school system to one
capable of providing all Soviet
youth with a ten-year polytechni-
cal education which will not only
prepare students for university
training but will also impart the
skills required by workers in a
highly industrialized and com-
plex economy.
Rise in Number of Students
The limits of compulsory
education have gradually risen
in the USSR from four years
schooling in the 1930's to
seven years since the war, and
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17 November 1955
considerable progress has been
made toward the goal of making
ten years universal by 1960.
The number of graduates from
ten-year schools increased from
428,000 students in 1952 to
880,000 in 1954, and apparently
over 1,000,000 graduated in
1955.
With the rapid expansion
in the number of ten-year school
graduates, the existing school
curriculum became increasingly
less suitable.
In the past, the program
had been geared to prepare the
most capable students for higher
education and therefore offered
a basic and thorough academic
fare. Since secondary schools
including grades eight to ten
were then limited in number,
there was stiff scholastic com-
petition for entrance into the
last three years, and only the
most talented students were
admitted. Only 9 percent of
the children in the RSFSR who
entered school in 1942 graduated
from complete middle school in
1952. Nearly all of them
could enter a higher educational
institute. The vast majority
of students, on the other hand,
were forced to leave school at
the end of the seventh grade.
They were either directed into
the labor force immediately or
entered some vocational program,
a tekhnikum with courses from
two to five years, or factory
apprentice courses.
The number of graduates
from the ten-year school has
now far outstripped university
facilities. Two thirds of the
graduating class of 1954,
though scholastically and psy-
chologically prepared for
college, could not be admitted.
It was not the intention of the
regime, however, to have these
students obtain a higher educa-
tion since the primary need of
the government is for a large
number of people with practical
technical training which can be
applied to the immediate needs
of the economy.
Curriculum Modified
The regime, therefore, re-
jected the idea, of significantly
expanding the higher educational
network to accommodate these
graduates and instead began to
emphasize technical training and
preparation for work rather than
college.
The previously stringent
academic program was modified
and a larger proportion of time
is being devoted to basic science
and manual training, while lit-
erature and the humanities re-
ceive shorter shrift. The
amount of text book material in
courses such as literature,
history and geography was re-
duced, in some cases by as much
as 25 percent. Biology, physics
and chemistry texts, however,
were affected to a lesser degree,
and the reduction was compen-
sated for to a large extent by
increasing the number of hours
devoted to these subjects. In
the 1955-1956 school curriculum,
561 hours previously allotted
to subjects in the humanities
group are given over to math,
physics and natural sciences.
Study of humanities will now
comprise only 47 percent of the
total ten-year curriculum.
Polytechnic Training
The most radical change in
the school program has been the
introduction of so-called "poly-
technic" training. A modest
start was made in 1954, and this
year manual training has been
extended to all grades. In the
last three grades several hours
a week are being devoted to on--
the-job group training. Students
will study agriculture, mechan-
ical science or electrical
technology, with the aim of ac--
quiring knowledge of and ability
to handle basic machines and
instruments used in industry and
agriculture.
By combining theoretical
training with its practical
application to present-day in-
dustry, it is hoped that students
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will be better equipped to
enter the labor force directly
upon graduation. According to
Soviet educational spokesmen,
such changes as have been intro-
duced thus far are only the
first step in a long-range
program aimed at full-scale
conversion to polytechnic
education.
Time taken away from class-
room study for practical train-
ing is made up by extending the
school term by periods ranging
from nine weeks in the primary
grades to two weeks in the
upper grades. With the addi-
tional hours devoted to science
and the lengthening of the
school year, the schools will
be able to cover approximately
the same ground in this area
as before.
Students who graduated
last June have had five years
of physics, five years of chem-
istry, four years of biology,
one year of astronomy, and ten
years of math including algebra,
trigonometry, and geometry.
This year even more time will
be devoted to science and in
addition students for the first
time will have an elementary 25X1
knowledge of basic production
machinery.
'IL,
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