CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A003700370001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 12, 2016
• Document Release Date: June 21, 2002
• Sequence Number: 1
• Publication Date: June 12, 1958
• Content Type: REPORT

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CENTRAL INTELLIGENCE BULLETIN
12 June 1958
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DAILY BRIEF
1. THE COMMUNIST BLOC
Soviet summit tactics: Soviet officials have used the
line in private conversations with Westerners that the stif-
fening of the Soviet attitude in Eastern Europe reflects the
influence of a "Stalinist faction," which is also obstructing
Khrushchev's summit conference policies. This line is prob-
ably designed to soften the West's approach to summit nego-
tiations by encouraging the belief that there is a flexible
group in the Kremlin headed by Khrushchev with whom fruit-
ful negotiations can be conducted.
(Page 1)
Soviet nuclear power program: The USSR will probably
rank first in the world in installed nuclear-power plant ca-
pacity by the end of 1960, with an installed capacity in sta-
tions designed for power production of about 700 electrical
megawatts, plus at least 200 electrical megawatts derived
from plutonium production reactors. As a result of diffi-
culties in carrying out its nuclear-power program, the USSR
will probably be able to complete only one third to one half
of its originally announced goal by the end of 1960.
Communist China - Japan; Communist China is refus-
ing to extend the private ino-Japanese fishing agreement
in further efforts to force Toyko to take the first steps to-
ward recognition of the Peiping regime.
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II, ASIA-AFRICA
Lebanon: Opposition elements are likely to make a
speci-laie fort to improve their position before the UN ob-
servation team begins to function. There appears to be no
political solution in sight. In the military situation, gov-
ernment forces are trying to parry rebel attacks directed
against the Beirut-Damascus highway, which, if successful,
ould cut the main supply route from the coast to eastern
Lebanon.
Lebanese economic crisis: The cumulative: effects of
the present crisis are beginning to take their toll of Leba.-
non's merchant economy. The flight of capital in recent
weeks- -estimated to be over $50,00,000--has reduced the
liquidity of local banks to dangerous levels.
I I
Okinawa: A delegation of Okinawan leaders who are to
begin negotiations with American officials in Washington on
25 June over the issue of payment for expropriated land are
strongly opposed to lump--sum payments. The delegation
believes that if Okinawan proposals for renegotiable annual .
rentals rather than a single payment for a long-term lease
are disregarded, a severely adverse reaction will develop
in the Ryukyus. The Japanese Government strongly sup-
ports the Okinawan position.
(Page 9)
Cyprus: Athens' appeal to NATO over Turkish-inspired
violence on Cyprus is regarded by the Greek people as a
real test of the solidarity of the Western alliance system.
On Cyprus, EOKA is organizing locally to combat further
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Turkish forays. Turkish Cypriots, who claim that civil
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12 June 58
DAILY BRIEF
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1. THE COMMUNIST BLOC
Alleged Kremlin Factionalism Used as, Summit Gambit
Soviet officials have recently begun to develop the line
in private conversations with Westerners that the stiffening
of the Soviet attitude toward Eastern Europe reflects the in-
fluence of a Stalinist group in the Soviet leadership.
this group has also sought to obstruct rus c ev
to arrange a summit meeting by foot-dragging on conference
preparations.
A Soviet Foreign Ministry official in Moscow recently
echoed this line when he told a Western diplomat that summit
preparations might be delayed somewhat due to a difference
of opinion within the Soviet Government.
This argument is probably designed to soften the West's
approach to the summit by encouraging the belief that the
ons
a
be obtained from nego
pest results can
shchev and his "flexible group" in the Kremlin.
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Soviet Nuclear Electric Power Program Delayed
Although the Soviet Five-Year Plan (1956-1960) called
for the construction of nuclear power stations with an in-
stalled capacity of 2,000-2,500 electrical megawatts (EMW)
by the end of 1960, present indications are that the installed
capacity of stations designed for power production will not
exceed 700 EMW by that time.
This decrease in the amount of. nuclear generating ca-
pacity to be installed through 1960 indicates that the USSR
was overly optimistic with regard to its: ability to solve
quickly the technical problems associated with the construc-
tion of large-scale power reactors. V. S. Yemelyanov, head
of the Chief Directorate for the Utilization of Atomic Energy,
recently told a visiting Western nuclear scientist that the
delays have been caused, not by basic scientific problems,
but by problems such as difficulties in fabricating tubes of
stainless steel with welds which would not corrode under
severe operating conditions. Similar problems are also
being encountered in the US.
Despite the delay in execution of its program, however,
the USSR will probably be in first place among the nations
of the world by the end of 1960 in terms of nuclear power
plant' capacity.
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Peiping Refuses to Renew Sino-Japanese Fishing
Agreement
Communist China, as part of its effort to force Tokyo
to take steps toward recognition of the Peiping regime, has
announced that its agreement with Japanese fishing interests
will not be extended after the expiration date--12 June. The
Chinese say their action was caused by Japanese Prime
Minister Kishi's "unfriendly" policy toward Peiping and his
government's attempt "to create two Chinas." Peiping's
action foreshadows further Chinese harassment and seizure
of Japanese fishing vessels off the mainland coast.
Japanese fishery interests already have urged the gov-
ernment to ease its stand against Peiping, and the Ameri-
can Embassy in Tokyo reports that the economic situation
of medium and small Japanese firms that are dependent
on trade with the China mainland is becoming desperate.
As long as the economic recession in Japan continues, seg-
ments of large industry as well as elements in conservative
political ranks are expected to press for resumption of trade
relations with Communist China.
The Japanese Foreign Ministry, according to a major
Tokyo newspaper, is considering steps short of recognition
such as fishery, postal, and sea rescue agreements, -.during
the period in which the government and ruling Liberal-
Democratic party are deciding on how far they dare o in
effecting a general rapprochement with Peiping.
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II. ASIA-AFRICA
Lebanese Situation
The antigovernment opposition, faced with the prospect
of a United Nations "watchdog" team which may arrive in
Lebanon as early as 12 June, seems likely to step up efforts
to win a quick victory over the Chamoun government. Just
prior to the UN move--voted on 11 June--opposition leaders
had been giving increased publicity to the possibility of set-
ting up a "Free Lebanon Government."
Political lines between the opposition and government
have become so?rigid that more and more Lebanese are con.-
cluding that it is beyond Lebanese capabilities to find a solu-
tion to the impasse. They feel that the only hope is outside
military or political intervention. The state of increasing
anarchy'.in the countryside, as well as the terrorism in the
cities, buttresses this state of mind. Some influential per-
sons believe that a dismemberment of the country is the only
solution--with the Tripoli area being attached to the UAR.
The rebels meanwhile appear to have made some signifi-
cant military gains. Rebel Druze forces have moved toward
their objective of cutting the Beirut-Damascus road and
isolating the capital. Other rebel bands are reported in the
area just east and southeast of Beirut; one target of these
bands may be Beirut International Airport, where additional
security measures have been taken. Air action against these
rebel concentrations has been hampered by weather condi-
tions. Heavy fighting has also occurred in Tripoli, where
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army tanks were attacked by rebels with grenades. How-
ever, the government has reduced the Tripoli citadel, a
rebel strongpoint.
Reports persist that a group of army officers who are
pushing General Shihab for the presidency are looking for
an opportunity to stage a coup. If the military situation is
still deteriorating by 13 or 14 June, these officers are said
to intend to call on. Chamoun in the name of the army to re-
sign in favor of the general.
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Lebanon's, Economy Dangerously Shaky
Lebanon's merchant economy, built on supplying goods
and services to neighboring countries, is beginning to feel
the cumulative effects of the current political strife which
has closed normal trade channels. The flight of capital--
largely to Zurich-.- apparently has already reached about
$50,000,000, and, with the total liquidity of the Beirut area
estimated to be only about $70,000,000, this has resulted in
critical capital shortages in local banks. Only the willing-
ness of the banks themselves to avoid calling loans and press-
ing for, repayment has avoided a crisis thus far.
Factories in. the Beirut area generally .have been kept
in operation despite mounting inventories. However, em-
ployers who have been paying idle and near-idle workers
as a means of keeping them from joining street mobs..report-
edly will cease these payments within one or two weeks. In
Sidon and Tripoli, factories and shops are almost completely
closed.
The Port of Beirut, keystone to the country's economy,
reportedly can receive cargo at the present rate only until
the end of June when currently available warehouse space
will have been completely filled. As a result of the disor-
ders, much of the transit shipment of goods to Syria, Jor-
dan, and Iraq has ceased. Lebanon's Finance Minister
Pierre Edde believes he may have to recommend limiting
imports within two or three weeks.
Lebanon's wheat shortage is becoming increasingly
serious. Extensive disorders in the Biqa Valley--source
of about 70 percent of the country's wheat production--and-
loss of Syria as a source of supply have increased the need
for extraordinary imports. Government authorities esti-
mate that between 60,000 and 80,000 persons have been
seriously affected by crop failures.
Unless Lebanon's economy returns tonear=-normal con-
ditions within the next few weeks, it will be difficult to avoid
a breakdown in the country's financial structure.
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Okinawans Oppose Single Payments for Land
A Ryukyuap Government,d egatiori will begin ,.negotiations
in Washington on 25 June on the controversial issue of lump-
sum payments for land acquired by US forces, The Ryukyuans
believe that accepting a lump-sum payment would entail a
complete surrender of their proprietary interest, with its
strong ancestral bonds, and offer no protection against pos-
sible inflation. Instead they want an annual rent subject to
renegotiations every three or five years.
The delegation believes that if Okinawan proposals are
disregarded, a severely adverse reaction will develop in
the Ryukyus. They assert that moderate political leaders
in the Ryukyus are staking their future on the outcome of
this issue and that if the mission fails, pro-Communist ele-
ments which made sizable electoral gains recently will
benefit.
To protect Japan's residual sovereignty over the island,
the delegates plan to consult with Tokyo on any political or
legal question which may affect the status of the Ryukyus.
Japanese Foreign Minister Fujiyama recently expressed to
Ambassador MacArthur the hope that the United States Gov-
ernment will consider Ryukyuan wishes concerning the
change from lump-sum payment to annual rental. He said
that any deterioration of the Okinawan situation would have
an immediate effect on the internal Japanese situation and
adversely affect US-Japanese relations.
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Cyprus
Clashes between Greek and Turkish Cypriots continued in
various parts of Cyprus on 11 June despite intensive British
efforts to control the situation. Governor Foot has stated that
security forces will take whatever action is necessary, "how-
ever drastic," to brin unal violence to an end. There
is general agreementc omm
hat the riots--inspired by Turkish Cypriots,.
re designed to force London
to accept eventual partition othe island. Turkish-Cypriot
leaders have refused to cooperate with the authorities in re-
straining their followers, and Radio Ankara continues to beam
inflammatory broadcasts to Turkish Cypriots.
In Greece, the press is uniformly hostile to Turkey and
condemns both Britain and America for not taking strong ac-
tion against Ankara. Radio Athens, however has advised
Greek Cypriots to control their emotions
OW long Grivas will or can restrain his followers i
provocations continue, however, is not known, and he has al-
ready warned the Turks that his patience is "at an end."
Greek Cypriots are creating a "national defense corps,"
under central control, which will be used to protect the Greek
community from future Turkish forays. The comparatively
mild reaction of Athens and the Greek Cypriots to the recent
attacks is probably due mainly to realization that further vio-
lence would sustain the Turkish contention that the two com-
munities cannot continue to live together.
London has presented new proposals for Cyprus to both
Athens and Ankara. These apparently involve a form of com-
munal self-government with neither self-determination nor
partition permanently precluded. Many Greek observers see
Athens' present appeal to NATO as a test of the value to
Greece of its Western alliance and a political crisis for
Premier Karamanlise
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