CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A004600080001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: September 9, 2002
• Sequence Number: 1
• Publication Date: July 9, 1959
• Content Type: REPORT

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9 July 1959
Copy No. C 63
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CENTRAL INTELLIGENCE BULLETIN
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9 July 1959
DAILY BRIEF
Ie THE COMMUNIST BLOC
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Watch Committee conclusion--Berlin: No significant
indications bearing on the possibility of hostilities. r-
Communist China. While losses sustained in China's, early
season f oods have not been catastrophic- -less than 5 percent
of the early rice crop has been lost--Peiping continues to give
heavy play to the threat of further floods. The marked atten-
tion being given the subject probably represents, an effort on
the regime's part to explain away current shortcomings in its
farm programs and to hedge against a likely failure to reach
its highly inflated. 1959 crop goals.
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II. ASIA-AFRICA
P4
cials have threatened to leave the franc zone.
(Page 3)
trade is now nearly at a standstill, and some Moroccan offi-
Nepal: Prime Minister Koirala's new government and
Nepal first popularly elected lower house of parliament which
took office on 1 July under the new constitution are expected
to provide a period of relative stability. Koirala's cabinet is
actively engaged in drawing up an economic development pro-
gram stressing "impact" projects probably will accept aid
from the bloc as well as the West.
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Watch Committee conclusion--Middle East: Situations
susceptible o direct exploitation by Sino-Soviet bloc action
which would jeopardize US interests exist, particularly in
Iraq and Iran.
The initiation of significant hostilities is unlikely in the
immediate future,
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France- Tunisia: [De Gaulle is said to have informed
Tunis that regardless of international opinion France will
not give up its Bizerte base. The French Embassy in Tunis
indicates it will do its best to make continued French posses-
sion of the base politically palatable to the Tunisians. The
officials in charge of the Tunisian Government while Pres- 25X1
ident Bourguiba. is vacationing in Italy are said to have "re-
acted violently" at first but to have displayed at their next
meeting with the French a greater willingness than previous
to press toward conclusion of a provisional agreement on the
base in talks which have been in progress since Maya
Morocco-France: Recently improved French-Moroccan
relations may suffer from the financial problem confronting
Rabat in connection with its establishment on 1 July of a
national bank in place of a French-controlled institution. As
a result of related French financial moves,. Morocco's foreign
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III. THE WEST
Cuba:, Fidel Castro recently told an associate that he
had. de-ci ed to relinquish the office of prime minister and to
assume the direction of the agrarian reform program,F__
he may well resign the top cabinet post.
~: ~as ro
would, however, remain the controlling figure in 7u-5a. He is
convinced that agrarian reform is basic to his entire revolu-
tionary program and if he feels it needshis personal direction,
Britain -West Indies: Trinidad's anti- US Premier Eric
Williams is stepping up Nis campaign for revision of the 1941
US- UK Caribbean base agreement. London is seeking to pla-
cate Williams and is inclined to include him in any revision
conference held with the United States. Williams' ultimate aim
is to force the US from its naval base at Chaguaramas. He has
warned that the people are excited and that there could be spon-
taneous demonstrations against the base.
LATEITEM
M
*South Vietnam: In the first incident of violence against
American personnel since October 1957,, two American mil-
itary advisers were killed and one wounded at Bien Hoa on
8 July. The assailants, numbering five to ten,, presumably
Vietnamese Communists, used automatic fire and grenades in
an attack on the messhall of a MAAG detachment. Earlier this
year, the government launched a major security sweep in this
general area against a Communist force of several hundred.
President Diem recently expressed concern that the Commu-
nist underground was planning a new phase of violence and
requested American assistance to cope with it. F
9 July 59
DAILY BRIEF iii
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,as
Peiping Continues to Exaggerate News, of Floods
Flood. waters- in South China are subsiding, although a
local storm dumped an additional eight inches of rain on east-
ern Kwangtung and southern Fukien from 5 to 7 July. The area
hardest hit during the recent floods was the East River area of
Kwangtung Province; the Pearl River delta and Canton were
spared serious flooding. Losses due to the early floods will
probably run to something less than 5 percent of China's early
rice crop. The entire early rice crop, in turn, normally ac-
counts for only about one fourth of total annual rice output, or
about 10 percent of total annual grain production.
The Peiping regime has been using the Kwangtung floods
as an object lesson for the people in the major river valleys to
the north of what might happen if the necessary flood-prevention
measures are not taken. It is giving a considerable amount of
attention to the organization of flood-prevention teams, to the
gathering of flood-fighting materials such as stone, timber, and
sandbags. in easily accessible places, and to the inspection and
repair of the all-important dikes. Such reporting is normal at
this time of year when the major rivers are entering their high-
water stage, but the volume of reporting this year appears
greater than in the past few years.
The regime may be using these stories of real and. threat-
ened natural calamities to divert attention from continuing and
embarrassing food shortages, to explain away shortcomings in
its farm programs, and to hedge against a likely:failure to reach
fantastically inflated 1959 crop goals or, perhaps, even to match
last year's good harvest.
9 July 59
CENTRAL INTELLIGENCE BULLETIN
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II. ASIA-AFRICA
Financial Crisis Threatens French-Moroccan Relations
The Moroccan financial crisis growing out of the establish-
ment on 1 July of a Moroccan national bank of issue in place of
a French-controlled institution could seriously disturb Rabat's
relations with Paris--which in recent months have been relative-
ly good. This might delay or at least complicate the meeting be-
tween King Mohamed V and French President de Gaulle which has
long been projected and now appears set for early August.
The crisis stems largely from Morocco's refusal, because of
nationalistic pressure, to agree to a ceiling on its future with-
drawals from the franc zone's foreign currency pool. In the ab-
sence of such a commitment by Morocco--for which the French
reportedly pressed daily since mid-June- -France suspended
Morocco's access to the fund when the new bank came into being.
Rabat, in an effort to conserve its meager foreign exchange
holdings, immediately prohibited all transfers of capital outside
Morocco. Developments since then have thrown the Moroccan
business and commercial world into confusion, virtually paralyzed
Morocco's foreign trade,and provoked some Rabat officials to
threaten Morocco's withdrawal from the franc zone.
Meanwhile, the free market rate for the Moroccan franc
fell sharply during the first days of July as a result of a further
decline in public confidence. Devaluation of Morocco's currency--
which for domestic political reasons did not occur when the French
franc was devalued last winter--now may be imminent.
9 July 59 CENTRAL INTELLIGENCE BULLETIN Page 3
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Situation in Nepal
The final procedural steps necessary for the establish-
ment of a popularly elected government in Nepal are now being
taken. The constitution promulgated by the King in February
took effect on 30 June and the members of Nepal's first elected
lower house of parliament were sworn in on 1 July. Prime Min-
ister B. P. Koirala's temporary cabinet formally resigned at the
same time and was immediately reconstituted, apparently with
the same personnel- -three of whom were promoted from deputy
minister to minister. The final step of establishing the senate
will soon be completed and both houses of parliament may con-
vene by 15 July.
Koirala's new government, which is expected to pursue
moderate socialist, neutralist policies, is apparently prepared
to undertake its tasks with vigor and is already reported drawing
up an economic development program stressing "impact" projects
designed to gain it mass support. Indian Prime Minister Nehru's
visit to Nepal from 11 to 14 June is said to have cleared the air
between New Delhi and Katmandu, and Koirala has indicated his
intention '( of cooperating with both.. India and the West. Though
his government is committed to accept Soviet economic aid,
Koirala has intimated that he intends to go slow in utilizing it.
He will be under increasingly heavy pressure from the Commu-
nist world, however, as a Soviet embassy is to open in Katmandu
soon and the Chinese Communists may press for the same privilege.
The United States will also open a mission shortly.
Koirala's main difficulty is likely to be not with his cabinet
but with the King, who dislikes Koirala and will probably at-
tempt to curb him if his popularity appears to threaten royal
prerogatives. This could lead to considerable friction and
create further instability in the country. The King has well-
entrenched conservative elements supporting him, while Koirala
has the mandate of the people as expressed in the recent national
elections.
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CENTRAL INTELLIGENCE BULLETIN
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Fidel Castro May Resign as Prime Minister to Direct
Agrarian Reform
Fidel Castro recently told an associate that he had
decided to relinquish the office of prime minister and to
assume direction of the agrarian reform program,
Castro
is convincea tnat agrarian re orm--a major cause of opposi-
tion to his regime--is basic to his entire program. If he
feels it needs his full-time personal direction, he may in-
deed resign as premier. He has been harassed by a heavy
workload as prime minister and has shown extreme sen-
sitivity to the growing criticism he has encountered in that
office. Even if he resigns, his personal prestige is such
that he would remain for a time at least the controlling fig-
ure in Cuba..
Castro has chosen his successor,
and Mat we new prime minister - designate--whose name
he did not reveal--has accepted on the condition that he be
permitted at the outset to make a strong anti-Communist
declaration. This is consistent with the rising concern
among many Cubans over Communist activity, but there
is no indication that Castro is yet prepared to endorse an
effective anti-Communist campaign.
Meanwhile, Castro continues determined to oust the
Trujillo regime in the Dominican Republic. He now real-
izes
that Trujillo.. is too strong for a successful
frontal assau , so he is preparing to launch an invasion of
Haiti by Haitian exiles and Cubans. Castro's intention
would be to establish a revolutionary government in Haiti
that would cooperate with Cuban efforts to oust Trujillo.
A Cuban-basked attack on Haiti, however, would probably
provoke Trujillo's intervention in support of the Haitian re-
gime.
9 July 59 CENTRAL INTELLIGENCE BULLETIN Page 5
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Pressure in Trinidad for Revising US-British Agreement on
West Indies Base
Trinidad's anti-US premier, Eric Williams, is stepping up
his campaign for revision of the 1941 American-British agree-
ment which gives the United States rent-free use of Caribbean
bases--notably the naval station at Chaguaramas, Trinidad--
for 99 years. Williams is promoting a conference of represent-
atives from the United States, Britain, the West Indies Federation
government, and the Trinidad government to consider revision
and is publicly attacking the federation's prime minister, Sir Grantley
Adams, because of Adams.' request that the Macmillan government
arrange a meeting with United States, British, and West Indies
federal government officials, but without separate representation for
Trinidad
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[Williams insists that Chaguaramas be the site for the capital
of the year-old federation and has rejected US assurances that
the m need for Chaguaramas will be reconsidered about
ilitar
1968.
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on on is convinced that talks on revis-
ing the base agreement must be held soon because nationalist
sentiment is rising and Williams may one day be West Indies
prime minister. Britain is inclined to include him in any talks
agreed to.)
Williams will probably not long be satisfied with revision of
the agreement since his ultimate aim is to force the United States
from Chaguaramas. He must show some progress in this direction
before September or run the risk that federal politicians will choose
another site for the capital. Since he has apparently decided to
stake his prestige on the issue, Williams may well choose to forti-
fy his position by calling general elections if his demands are not
me t.
9 July 59 CENTRAL INTELLIGENCE BULLETIN
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THE PRESIDENT
The Vice President
Executive Offices of the White House
Special Assistant for National Security Affairs
Scientific Adviser to the President
Director of the Budget
Office of Defense and Civilian Mobilization
Special Assistant for Security Operations Coordination
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Executive Secretary, National Security Council
The Treasury Department
The Secretary of the Treasury
The Department of State
The Secretary of State
The Under Secretary of State
The Under Secretary of State for Economic Affairs
The Deputy 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 the Army
Director of Naval Intelligence, Department of the Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Department of the Interior
The Secretary of the Interior
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
United States Information Agency
The Director
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