CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001800110001-1
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• Document Page Count: 50
• Document Creation Date: December 20, 2016
• Document Release Date: June 30, 2006
• Sequence Number: 1
• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 50
OCI NO. 4042/58
14 August 1958
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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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UUt `? I L11L
CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
UN GENERAL ASSEMBLY SESSION ON THE MIDDLE EAST . . . . . . Page 1
The Soviet Union has taken a "moderate" line in the
special General Assembly session in order to attract max-
imum neutralist and small-nation support for early with-
drawal of American and British troops from the Middle
East. Referring to President Eisenhower's proposals as
a "so-called peace program," bloc propagandists have em-
phasized that the principal issue is still troop with-
drawal. Initial Western European reaction highly favored
the President's proposals, but the response in Asia and
the Middle East was divided, ranging from Cairo radio's
denunciation to general support in Japan, Jordan, and Leb-
anon. UN Secretary General Hammarskjold believes that
the best this session can accomplish will be to adopt a
broad set of principles under which he could later take
practical steps.
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . . Page 4
Lebanon's President-elect Shihab is still seeking
to persuade the Lebanese factions to compromise their
most serious differences, but Christian elements are
increasingly fearful that a political victory for Mos-
lem Arab nationalism will end their privileged posi-
tion. The Jordanian Government remains tense, appre-
hensive both of a revolt inspired by its enemies and
of abandonment by its friends. Cairo authorities prob-
ably are considering plans for a new Arab League which
would include Iraq, Saudi Arabia, and any other Arab
state which adopts a neutralist foreign policy. The
UAR may also intend to seek increased payments -from
the new Syrian budget calls for expenditures tar in
excess of normal revenues.
TAIWAN ?ST,~AIT SITUATION . . . . . . . . . . . . . . . . . Page 6
The 14 August air battle east of Foochow between
Chinese Communist and Nationalist aircraft suggests
that an increase in air clashes can be expected. Chi-
nese Communist jet fighters are now operating out of
three and possibly four previously unoccupied airfields
in Fukien Province opposite Taiwan, and there are indi-
cations that the Communists are preparing to activate
two other coastal airfields between Amoy and Foochow.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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PART I (continued)
Peiping's propaganda, however, does not reflect a real
effort to whip up popular fervor for a Communist mili-
tary venture.
PART II
NOTES AND COMMENTS
SHAH OF IRAN STRUGGLING TO MAINTAIN STABILITY . . . . . . Page
The Shah of Iran, who is known to fear a coup, is
evincing increasing concern for his personal safety, as
well as doubts over the loyalty of the army. Believing
that the absence of combat troops would make a coup less
likely, he may be considering eventual removal of all such
units from Tehran, leaving only the reinforced imperial
guard.
NORTH AFRICA . . . . . . . . . . . . . . . . . . . . . . . Page
Internal difficulties in Tunisia and Morocco are
disrupting the North African solidarity achieved during
the recent Tangier political conference. The conflict
between Tunisian President Bourguiba's policy of seeking
a rapprochement with France and the Algerian National Lib-
eration Front's aspirations for total independence for Al-
geria is likely to continue. Bourguiba also fears the
trend toward neutralism in Morocco, where the moderate
Balafrej government is struggling for survival.
MACMILLAN'S CYPRUS MISSION . . . . . . . . . . . . . . . . Page 2
The British cabinet is now considering whether the
results of Prime Minister Macmillan's 7-12 August explor-
atory discussions in Athens, Ankara, and Cyprus warrant
some modification of Britain's 19 June Cyprus plan.
Greece's objection to the provisions for Greek and Turk-
ish government representation on the proposed Governor's
Council appears to be the main obstacle to acceptance of
the British interim seven-year plan.
EUROPEAN APPREHENSION ABOUT DE GAULLE . . . . . . . . . . . Page 3
Premier de Gaulle's assurances to Italian Premier
Fanfani on 7 August regarding weapons cooperation should
reduce the apprehension with which the De Gaulle govern-
ment continues to be regarded on the European continent.
In West Germany and Italy particularly, there has been of-
ficial concern that France will seek a predominant politi-
cal position through the acquistion of a nuclear weapons
capability. France's smaller neighbors and Germany are
disturbed over French internal developments, particularly
nationalistic tendencies.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
PART II (continued)
JAPANESE ECONOMIC ACTIVITY IN AFGHANISTAN . . . . . . . . Page 4
Japanese private enterprise and the activity of tech-
nicians have placed Japan among the primary free world
nations whose economic activities are helping to counter
the USSR's growing economic relations with Afghanistan.
By Afghan standards, Japanese investment and construc-
tion activity is substantial. Although Afghan-Japanese
trade has declined during the past two years, Kabul is
apparently interested in continuing and expanding Japa-
nese economic activity in Afghanistan.
JAPANESE COMMUNIST PARTY CONVENTION . . . . . . . . . . . Page 5
The Japanese Communist party's recent national
convention, the first in ten years, has confirmed
the existing leadership and endorsed organizational
changes which give greater emphasis to collective
leadership. The convention failed, however, to ap-
prove an action program because of strong disagree-
ment over objectives. Party dissidents, who have
been demanding violent action, caused no trouble, but
serious factionalism continues and the party probably
will remain politically weak.
HUNGARIAN WHITE BOOK ON NAGY . . . . . . . . . . . . . . . Page 6
The official summary of the recently published
Hungarian white book on the "conspiracy" of Imre Nagy
goes to great lengths to blame the national uprising
of 1956 on Nagy and Western "imperialists" and to give
the present regime a clean slate--clearly an attempt
to stop talk that Janos Kadar, because of his past close
involvement with Nagy, would be removed as party leader.
Hungarian Stalinists, who ruled Hungary before Nagy,
are depicted in a favorable light; some of these, who
were strongly condemned by Kadar for their share in
former party leader Matyas Rakosi's mistakes, may soon
be allowed to return to Hungary from the USSR. Kadar,
however, appears to remain Khrushchev's chosen instru-
ment in Hungary.
THE THINNING RANKS OF STALIN'S INDUSTRIAL
ADMINISTRATORS . . . . . . . . . . . . . . . . . . . . . . Page 8
Of the men who played a vital role under Stalin
in the establishment and expansion of the Soviet in-
dustrial base, only a few are still active in high
government posts. The death last week of Stepan Akopov,
former minister of transport machinery, brings to eight
the number of these officials who have died in the last
two years. Others such as Lazar Kaganovich, have
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14 August 1958
PART II (continued)
suffered severe political setbacks, while some, like
oil expert Nikolai Baibakov, appear merely to have
been demoted. While the way has been opened for the
rise of new industrial administrators, none has so
far attained the same high level in both the party
presidium and the Council of Ministers as did some
of their predecessors.
KHRUSHCHEV ANNOUNCES DECISION TO STRESS THERMAL
ELECTRIC POWER . . . . . . . . . . . . . . . . . . . . . . Page 9
The construction of thermal electric power sta-
tions will take priority over hydroelectric stations
during the next seven or eight years, according to
Nikita Khrushchev, to permit the USSR to increase
electric power production in the shortest possible
time. In his speech dedicating the Kuybyshev hydro-
electric station on 10 August, Khrushchev said that
the long-term economy of lower operating costs in
production of hydroelectric power is to be sacrificed
to reduce initial investment and gain time in economic
competition with the West.
STATUS OF SOVIET HOUSING PROGRAM . . . . . . . . . . . . . Page 10
The new Soviet urban housing program, aimed at solv-
ing the most pressing problem facing the government in
the field of public welfare, has been in operation for a
year. Construction in the first half of 1958 indicates
that the 19-percent increase scheduled for the year as a
whole will probably be achieved. Preliminary statements
on Seven-Year Plan (1959-65) goals point to a leveling
off at a high rate after 1960.
COMMUNIST CHINA. PLANS BIG INCREASE IN IRON AND STEEL
PRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Communist China plans an extraordinary expansion of
the iron and steel industry that may increase capacity
to three to six times the present level of about 5,200,-
000 tons by 1962. Peiping hopes to achieve this increase
through a program that looks to the construction and ex-
pansion of large modern plants, relatively modern medium-
and small-sized factories, and small, primitive, locally
run facilities. Plans for the large and some of the me-
dium-sized facilities appear feasible; the outline of the
program for small plants, however, is vague.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
PART II (continued)
LAOTIAN POLITICAL CRISIS . . . . . . . . . . . . . . . . . Page 13
Disunity in conservative ranks has frustrated ef-
forts to resolve Laos' four-week-old cabinet crisis. The
government's authority in the countryside is deteriorat-
ing, and some provincial officials are resigning out of
fear of growing Communist strength. Young anti-Commu-
nist leaders are coming to the view that the only hope
lies in the imposition of a strong government by the
crown.
Premier Sihanouk is visiting Communist China with
the announced purpose of strengthening Cambodia's po-
sition in relation to its Western-supported neighbors.
Cambodian officials deny that Sihanouk intends to enter
into a military agreement with Peiping, but some form
of tangible Chinese Communist support for Cambodia in
its disputes with Thailand and South Vietnam seems in
the offing.
THAI CABINET RESHUFFLE . . . .
. . Page 14
. . . . . . . . . . . . . . Page 15
The recent cabinet reshuffle in Thailand may result
in a modest improvement in the performance of Premier
Thanom's government, but real political stability will
probably hinge on whether Marshal Sarit, the leader of
the ruling military clique, remains in good enough health
to play an active role. Of seven cabinet changes, the
most noteworthy were the dismissals of the leftist deputy
minister for education and two other deputy ministers
whose corrupt activities had been exposed.
NETHERLANDS NEW GUINEA ISSUE . . . . . . . . . . . . . . . Page 15
Acquisition of Netherlands New Guinea continues to
be a major national goal of Indonesia despite its more
pressing problems of regional warfare and economic de-
terioration. Indonesia probably has no intention of
using military force to acquire the area. Dutch offi-
cials, on the other hand, repeatedly charge that the Su-
karno government will attempt to seize New Guinea and
have decided to send limited reinforcements there.
COMMUNIST PROSPECTS IN THE IBERIAN PENINSULA . . . . . . . Page 17
The small clandestine Communist parties in Spain
and Portugal appear to be preparing for a more active
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
PART II (continued)
role in exploiting popular unrest, possibly in the fall.
By sponsoring public demonstrations and strikes, they
could establish themselves as a rallying point for
other opposition groups, even though such disturbances
would not immediately threaten the stability of the
Franco and Salazar regimes.
PATTERNS AND PERSPECTIVES
DE GAULLE'S ATTITUDE TOWARD NATO . . . . . . . . . . . . . Page 1
French Premier de Gaulle's recent assurances of
solid support for NATO objectives have been coupled
with insistence on a more active role for,France with-
in NATO. He can be expected to try to use NATO to en-
hance France's international power and prestige by
pressing for changes in, the command structure and by
seeking to expand the geographic area covered by the
AUSTRIA AND THE ADMINISTRATION OF THE DANUBE .
Chancellor Raab's commitment to bring Austria into
the bloc-dominated Eastern Danube Commission was made
to encourage Soviet concessions on reparations; Raab
may also have had in mind Vienna's aspirations to wield
greater influence in the Danube area. France, which has
had somewhat similar aspirations, is angered and dismayed
by the Austrian move; Bonn, however, seems likely in the
long run to follow Vienna's lead.
. Page 3
JAPANESE DEFENSE SITUATION . . . . . . . . . . . . . . . . Page 7
Rearmament has made slow progress in Japan since it
was inaugurated in 1951, and the present Self-Defense
Forces are not yet capable of defending the nation. The
partial withdrawal of US forces has not stimulated the de-
fense build-up; the public; however, is Orradually accepting the
new Japanese forces and Prime Minister Kishi shows awareness
of the need for adequate defense. Japan is drafting a
program to adapt its forces to the missile age, but is
caught between general reaction against conventional
forces and strong public opposition to nuclear weapons.
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14 August 1958
PART III (continued)
REFORM OF SOVIET SCHOOL SYSTEM PLANNED . . . . . . . . . . Page 10
Decisions will apparently be made soon to implement
Khrushchev's call last April for a reorganization of the
Soviet educational system. The reorganization is being
officially described as a step toward extension of uni-
versal education from 7 to 12 years. The new system,
however, would continue the trend toward increasingly
specialized training for specific vocations according
to the capabilities of the student.
SINO-SOVIET BLOC ACTIVITY IN LIBYA . . . . . . . . . . . . Page 14
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CURRENT INTELLIGENCE WEEKLY SUNIARV
14 August 1958
In their initial reactions I Belgrade radio carried an
to President Eisenhower's speech
before the UN General Assembly
on 13 August, Sino-Soviet bloc
propagandists all emphasized
that he "virtually ignored the
principal and most urgent prob-
lem--the question of immediate
withdrawal of US and British
troops"--while doing "all he
could to justify the interven-
tion" of those troops. The
President's proposals were re-
ferred to as the "so-called
peace program" and were de-
scribed as a "dirty game" and
a "screen" for gaining US con-
trol of the whole region. The
economic aid proposal was termed
a means of political blackmail
and pressure--a means of con-
tinuing imperialist exploitation
of the Middle East, since the
contributing agencies would be
"US controlled." The UN force
idea was called a "trick" where-
by US troops would remain as
"police," under the UN flag,
"to crush Arab independence."
All bloc transmitters
broadcast summaries of Presi-
dent Eisenhower's and Gromyko's
speeches, with the latter re-
ceiving greater attention. VOA
Russian-language broadcasts of
the two speeches were heavily
jammed by Soviet transmitters.
There was no personal criticism
of President Eisenhower, and a
Warsaw Home Service report said
that both speeches were moderate
in tone. The commentator went
on to say that Gromyko was in
"a very strong position because,
as he recalled, there are no
Soviet troops, no Soviet bases,
no Soviet oil concessions, no
Soviet profits from this ter-
ritory in the Arab region."
extensive review of both speeches
and related comment. Politika
said that the withdrawal of a US
battalion from Lebanon "cannot
satisfy" the Arab peoples and
other peaceful countries "for
the simple reason that this
intervention actually constituted
the beginning of the Middle
East crisis. Therefore, this
crisis cannot be resolved with-
out a complete withdrawal of
the interventionist troops."
Initial reaction in Western
Europe was enthusiastic from
governments and opposition
sources, whether conservative
or socialist. Only Communist
comment, reflected in the Lon-
don Daily Worker and L'Humanite
in Paris,, was s arply c ritical.
Immediate official support came
from British, Norwegian, Italian,
and Irish spokesmen. British
liberal papers--the Manchester
Guardian and the News Chronicle,
which are often highly critical
of American policies--praised
the President's plan as a step
toward peace in the Middle East.
The independent Times expressed
some reservations on establish-
ing a UN police force, pre-
ferring an expanded observer
group instead, and noted that
major difficulties must be over-
come before the development plan
achieves its purposes. 25X1
Preliminary comment from Latin
America was favorable.
OF IMMEDIATE INTEREST
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
Reaction in Asia and the
Middle East was divided and
generally less enthusiastic
than in Western Europe. The
UAR radio and government-con-
trolled press unanimously de-
nounced the President's address
as an attempt to mislead the
Arabs and divert them from a
policy of "neutrality." All
sources strongly attacked the
continued presence of American
and British troops in the area
while giving scant attention
to the proposal for economic
development. No "official"
reaction was immediately avail-
able.
Baghdad radio presented a
straight resume of the speech,
devoid of criticism of any type.
Jordanian newspapers welcomed
the address, with some reserve,
and stressed the need for solu-
tion of the Palestine problem
before stability in the area
could be achieved. Limited of-
ficial reaction in Lebanon was
favorable, with Premier Sulh
describing the proposals as "an
excellent and constructive proj-
ect:" Opposition leaders with-
held immediate comment. Among
the Israelis, disappointment
was expressed that Israel was
not mentioned, and there was con-
cern over a possible arms embargo.
In a speech in Parliament
on 14 August, Nehru maintained
that he had not received the
full Eisenhower speech and so
could not comment on it. He
reiterated his position,calling
for the withdrawal of foreign
troops, opposing the sending of
UN armed forces to Lebanon or
Jordan, and favoring an increase
in observer group personnel.
While reaffirming India's sup-
port for nonalignment, he was
opposed to "enforced neutrality"
if it were against the will of
the countries concerned.
Japanese Foreign Ministry
officials voiced wholehearted
support for the proposal for an
Arab-run economic development
fund and technical assistance
program and applauded the speech
for its "spirit of peace." They
believe caution should be ex-
ercised on the President's pro-
posal for a UN police force and
oppose a "hasty decision" on
means for coping with indirect
aggression. Yomiuri, a leading
nationalistic newspaper, regarded
the speech as a "last-resort"
attempt to secure leadership of
the UN session and to "curry
favor" with the Arabs.
Sino-Soviet Tactics
Soviet Foreign Minister
Gromyko's 13 August speech and
the USSR's draft resolution sug-
gests that Moscow has taken a
"moderate" line in order to at-
tract maximum neutralist and
small-nation support for early
withdrawal of American and Brit-
ish troops from the Middle East
and, at the same time, to lay the
basis for future claims that
Soviet diplomacy had "forced"
their withdrawal. Although So-
viet UN delegate A. A. Sobolev
on 22 July had vetoed a watered-
down Japanese resolution to
strengthen the UN Observation
Group in Lebanon because it did
not condemn the presence of Amer-
ican troops, the 13 August So-
viet draft resolution calls for
the General Assembly to "recom-
mend" the immediate withdrawal
of troops from Lebanon and Jor-
dan, for reinforcing the ob-
server group in Lebanon, and
for sending UN observers to
Jordan to observe "the with-
drawal of US and British troops
from Lebanon and Jordan and
the situation on the frontiers
of these countries."
Gromyko avoided a point-by-
point rebuttal of the President's
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
new plan for the Middle East,
repeating Moscow's charges that
this plan, like that offered
by UN Secretary, General Hammar-
skjold, evaded the basic issue,
the immediate withdrawal of
American troops from Lebanon
and British troops from Jordan.
On 12 August Gromyko suggested
privately to Secretary Dulles
the possibility of a joint So-
viet-American statement which
would give "full assurance" con-
cerning the political independ-
ence and territorial integrity
of Lebanon and Jordan in order
to speed the troop withdrawal.
In his 13 August speech, he of-
fered to consult any delegation
to seek a formula for withdrawal.
"Unanimous agreement" be-
tween Moscow and Peiping on ma-
jor international issues, a line
emphasized in the 4 August,Khru--
shchev-Mao communique, is echoed
in Chinese Communist propaganda
solidly endorsing Soviet tactics
in the Middle East crisis.
Moscow has attempted to
minimize propaganda losses in-
curred from Khrushchev's 5 Au-
gust scuttling of an early heads
of-government conference on the
Middle East in favor of an im-
mediate General Assembly meeting
with a concerted diplomatic and
propaganda effort "to set the
record straight." In a 10 Au-
gust note to-British Prime Min-
ister Macmillan, Khrushchev re-
peated Soviet charges that the
American and British governments,
by backing away from their ear-
lier agreement to a special
heads-of-government-conference
within the "framework" of
the Security Council, are
responsible for the breakdown
of negotiations for a sum-
mit meeting. He expressed the
"hope" that the special session
of the General Assembly would
"pave the way" for an early
East-West summit conference on
global issues.
Hammarskjold's Tactics
UN Secretary General Ham-
marskjold believes that the best
this emergency session can ac-
complish will be to adopt a
broad set of principles under
which he later could take prac-
tical steps. To facilitate
this and also to set the stage
for a constructive nonvituper-
ative debate, Hammarskjold out-
lined three basic principles
for UN action in the area at
the opening meeting. He defined
these as (1) desirability of
"UN presence" in the Middle
East, (2) UN expression of hope
for inter-Arab agreements on -
such matters as noninterference
in internal affairs and guar-
antees on producing and trans-
iting oil, and (3) UN recogni-
tion of particular problems and
aspirations of the peoples of
the Middle East.
Meanwhile, the secretary
general has continued to increase
the number of observers in Leb-
anon and has ordered new truce
observation posts set up in West
Jordan. On 8 August, Hammar-
skjold told the British UN dele-
gate that he would consider es-
tablishing a UN force of 4,000
to 5,000 men on the west bank of
the Jordan River. The unit would
be supplied through Damascus and
Beirut, thereby enabling the UN
to maintain large numbers of
personnel in Syria and Lebanon.
However, permission for the
entry of any UN force into the
area rests with the host coun-
try, and King Husayn is opposed
to any form of UN supervision,
including the stationing of a
UNEF along the Jordan borders.
The British, however, are at-
tempting to dissuade Jordan
from its extreme opposition to
any UN presence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
Recent activity at the UN
suggests that various delega-
tions are attempting to draft
a resolution which would en-
compass both the secretary gen-
eral's and the West's sugges-
tions in broad terms and yet
accomplish Western troop with-
drawal. General support for
Western troop withdrawal is
widespread among UN members, but
is tempered by a realization
that the UN must develop some
constructive plan for the area
beyond a mere call for troop
withdrawal. It is this senti-
ment the USSR is attempting
to exploit with its current
posture of "reasonableness."
President-elect Shihab is
still trying to compromise the
most serious differences among
the various Lebanese factions,
with the main objective of per-
suading President Chamoun to
resign or leave the country, as
the opposition demands. Shihab
apparently agreed, however, to
send Foreign Minister Malik to
represent Lebanon in the UN
General Assembly, despite the
opposition's intense dislike
for him. A dissident delega-
tion of two opposition leaders
apparently intends to go to
New York too.
Christian elements are in-
creasingly fearful that the vic-
tory of Moslem Arab nationalism
will spell the end of their
privileged position in Lebanon.
Militant Christian organizations,
such as the Phalange, say they
will defy attempts to disarm
them and are threatening to set
up "closed areas" in Beirut and
the countryside such as those
established by the rebels. If
tension between the religious
groups continues to grow, an
outbreak of religious fighting
is possible.
Troop dispositions and the
extra security measures put
into effect by the Jordanian
Government are reported to have
resulted in postponement of
plans for a pro-Nasir revolt
which several sources had fore-
cast for this week. However,
there has been no fundamental
improvement in the government's
position, and Prime Minister
Rifai admits that almost all
possible courses of action have
been blocked except surrender
to the pro-Nasir elements. King
Husayn nevertheless still in-
sists that he will fight to the
end, and Rifai claims to be will-
ing to abandon West Jordan, with
its overwhelming refugee popula-
tion, to Israel if that is nec-
essary to maintain the govern-
ment in Amman, the symbol, ac-
cording to Rifai, of the Hashe-
mite monarchy.
Husayn also has reiterated
his opposition to any plan for
making Jordan a "ward of the
UN" if it involves stationing
UN troops there. Husayn has
said he would welcome a UN
"guarantee," but would continue
to rely in practice on American
and British support. London
still wishes, however, to with-
draw its forces at the earliest
opportunit .
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CURRENT INTELLIGENCE WEEKIaf SUMMARY
14 August 1958
Husayn appar-
ently fears that the Western
powers might be tempted to sac-
rifice his position in an at-
tempt to reach a broader agree-
ment on Middle East problems.
UAR - Saudi Arabia
President Nasir is report-
ed to have gone on "vacation"
this week, but UAR Vice Presi-
dent Amir is doing some very ac-
tive leg work. He went to Da-
mascus after his visit last week
to Saudi Arabia, and press re-
ports have hinted that a commu-
niqud containing some surprises
might result. Discussions of a
revived Arab League, composed
of those Arab states which have
a "liberated"--i.e., neutralist
--foreign policy, apparently are
under way, and it seems probable
that this question was also dis-
cussed in Saudi Arabia. Saudi
Crown Prince Faysal has denied,
however, that any agreement
was signed, and states that the
sole purpose of Amir's visit
was to open a "new era of frank
and cordial relations" between
Saudi Arabia and the UAR,
The. Syrian budget, which
Nasir approved this week after
considerable high-level debate
within the UAR, suggests that
an effort may soon be made to
increase the payments received
from Western companies operat-
ing pipelines through Syria.
The budget envisages expendi-
tures of about $130,000,000--
58 percent of them for "secu-
rity"--a figure far in excess
of Syria's revenues from nor-
mal sources. While oil trans-
it dues are the most obvious
source. of increased income,
the budget probably also pre-
sages an increase in economic
controls on the Egyptian model,
and this may add to the dissat-
isfaction already displayed by
Syrian commercial interests
over UAR economic policy.
Cairo, which has sent a
large number of assorted experts
to Baghdad since the 14 July
coup, may now have decided to
back Deputy Prime Minister Arif
as a man more likely to cooper-
Iraq
ate closely with UAR policy
than Prime Minister Qasim.
Arif himself has appeared
increasingly as the public
spokesman of the regime. He
25X1
25X1
has been touring the provinces,
making speeches considerably
more violent in tone than the
reassuring statements given
Western diplomats by the Bagh- 25X1
dad. authorities.
The social and economic
reforms which the new regime is
promising would mean the end
of the large landholdings of
the tribal leaders, and these
leaders may be encouraging un-
rest. Previous instances of
tribal unrest have been sup-
pressed by the army, and it
seems doubtful that a tribal
effort against the present gov-
ernment would be any more suc-
cessful.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 April 1958
The Ruler of Kuwait cut
short his formal visit to Tehran
this week and refused to talk
politics with Iranian officials.
This action is another symptom
of his fear of association with
any anti-Nasir forces. A Cairo
press report stated that the
deputy ruler of Kuwait was
to arrive in the UAR capital
on 12 August, but gave no rea-
son for the trip.
TAIWAN STRAIT SITUATION
The Chinese Nationalists
claim to have shot down two and
possibly three Chinese Commu-
nist jet fighters in an eight-
minute air battle over the Tai-
wan Strait east of Foochow on
the morning of 14 August. One
Nationalist plane is believed
to have been lost.
Ra o
Peiping has announced that Chi-
nese Communist interceptors
damaged and drove off two Na-
tionalist planes flying in the
Foochow area on 13 August.
Since the Chinese Commu-
nists are determined to have
control of the air over Fukien
and the coastal waters off the
mainland in the strait area and
the Chinese Nationalists appear
equally determined to carry out
their reconnaissance missions,
an increase in major air clashes
can be expected. Three and pbs-
sibly four previously unoc-
cupied airfields in Fukien Prov-
ince have been made operational
by the Chinese Communists since
the end of July, and there are
indications that Peiping is pre-
paring to activate at least
two other airfields along the
East China coast between Amoy
and Foochow. Jet fighter op-
erations from these fields
should give the Communists com-
plete control of the air space
over Fukien and the coastal
waters in the Taiwan Strait.
The status of Communist
ground and naval forces in East
China remains unchanged. There
are no indications that major
hostilities will be initiated
against the offshore islands,
but the Communists have the ca-
pability to do so at any time,
possibly without warning. The
Communists are exercising cau-
tion in their "liberate Taiwan"
propaganda, and apparently are
not making an all-out effort to
whip up popular fervor for a
military initiative. The Tai-
wan theme reappeared in late
July, but has never approached
the intensity of the 1954 "lib-
erate Taiwan" campaign. The
populace in coastal areas op-
posite Taiwan is told to
strengthen "defenses" and to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
TAIWAN STRAIT SITUATION
SYMBOL
AIRFIELDS WITH
RUNWAY SURFACE
DELINEATED RUNWAYS
?
7000 feet or over
(P) - Permanent
6000 feet to 6999 feet
(T) - Temporary
(N) - Natural
5000 feet to 5999 feet,
(UC) - Under Construction
UNK) - U
k
(
n
nown
?
4000 feet to 4999 feet
Seaplane station
STATUS OF AIR FACILITIES
OPERATIONAL Air facilities printed in red are known or evaluated to ue consistently
used by military or civilian aircraft.
OTHER - Air facilities printed in black are those under construction, unserviceable,
or on which the availability of information is such that the current status
cannot be determined.
't Delineated runways are explained as a defined or marked area on an airfield
prepared or selected for landing and take-off of aircraft.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
"increase production" in order
to bring about Taiwan's "liber-
ation"--language suggesting a
long-range effort,
assaaor Drum
right believes the Nationalists
will take no hostile action of
any kind against the mainland
in the near future unless the
offshore islands are directly
attacked. The Nationalist Navy
is making plans to supply the
offshore islands at night, and
night aircraft landings have
been inaugurated.
The Nationalists seem as
concerned over the psychologi-
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PART I OF IMMEDIATE INTEREST
cal threat posed by the Commu-
nist action as they are over
the military threat. Minister
of Defense Yu Ta-wei has asked
that plans for a US Seventh
Fleet air defense exercise in
the Taiwan area and plans to
provide the Sidewinder air-to-
air missiles to the Nationalist
Air Force be made public. Yu
believes that this would serve
to reassure the Taiwan public
and to deter the Communists.
The Nationalists may be tempt-
ed, however, to adopt a more
aggressive air combat policy
after re-equipment with Side-
winders.
An experienced American of-
ficial in Taipei reports that al-
though no formal request has been
submitted through diplomatic
channels, what the Nationalists
really want is a formal US pledge
to defend the offshore islands.
They believe this would be the 25X1
best way to forestall a Commu-
nist attack.
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CONFIDENTIAL
CURRENT I1 LLIGNNCE WEEKLY SUm YABY
14 August 1958
NOTES AND COMMENTS
SHAH OF IRAN STRUGGLING TO MAINTAIN STABILITY
The Shah of Iran, who is
known to fear a coup, is evin-
cing increasing concern for his
personal safety, as well as
doubts over the loyalty of the
army. Believing that the ab-
sence of combat troops would
make a coup less likely, he may
be considering eventual removal
of all such units from Tehran,
leaving only t4e_rointprced im-
perial guard.
While senior military lead-
ers, with few exceptions, prob-
ably would remain loyal to the
Shah in the event of a coup at-
tempt, the loyalty of the junior
officers is in doubt. Many Jun-
ior officers are dissatisfied
with the lack of opportunity
for advancement. The Shah re-
cently began an investigation
to uncover disgruntled groups
within the army. Possible con-
spirators in the army, however,
may be taking extra precautions
to avoid detection in view of
the experience of General Val-'
idllah Gharani, former G-2 who
was arrested last March for con-
spiring against the Shah. Gha-
rani!s"scheme was discovered
largely because of poor cover.
Educated urban groups and
the semiliterate urban lower
classes are also dissatisfied,
particularly with government
graft, inefficiency, and repres-
sion, and associate the Shah
with these abuses. The Shah's
slow progress in making reforms
has led them to advocate limita-
tion of his powers or his re-
moval. The Shah, although
eager for rapid government re-
form, is proceeding slowly for
fear that wealthy groups and
others who benefit from the
status quo will attempt '.to',
force their will on him.
The UAR and the USSR are
putting increasing pressure on
Iran, particularly through sub-
versive radiobroadcasts. UAR
radio propaganda is designed
to arouse nationalist elements
among the 500,000 Kurdish tribes-
men in northwestern Iran to
unite with the 800,000 Kurds in
Iraq, 250,000 in Syria, and
1,500,000 in Turkey in a se c-
rate Kurdish state.
Through a clandestine broad-
casting station in Leipzig,
bloc propagandists, professing
to speak for the outlawed Iran-
ian Communist Tudeh party, are
calling for the overthrow of
the Shah.
The Iranian Government is
taking steps to counter the
impact of this propaganda
on the Kurds. The effec-
tiveness of its measures
has not yet been deter-
mined.
NORTH AFRICA
Internal difficulties of
the moderate Tunisian and Moroc-
can governments are disrupting
the North African solidarity
achieved during the recent Tan-
giers political conference.
Tunisian President Bourguiba's
difficulties with the Algerian
National Liberation Front('FLN)
over his pipeline concession
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
to a French company now seem
somewhat less serious than they
appeared last month, but the
conflict between his policy of
seeking a rapprochement with
France and FLN aspirations for
total independence is likely to
continue. Bourguiba also fears
Morocco's trend toward neutral-
ism.
Bourguiba's problems with
the FLN have worsened as his
relations with France improved.
Resentful of Tunisian curbs on
its activities--imposed so that
improving relations with France
might not be jeopardized--the
FLN has admitted that it magni-
fied the pipeline issue both to
maintain the prestige of its
leaders with rebels conducting
guerrilla operations inside
Algeria and to bring Bourguiba
to heel so that he would drift
no further toward a pro-French
policy and compromise the Al-
gerian war effort.
Counting on Moroccan sup-
port, the Algerians demanded a
meeting of the Maghreb Secre-
tariat to discuss the pipeline
issue and the creation of a
Maghrebian Consultative Assem-
bly. Bourguiba, however, in-
sists on a conference with FLN
leaders before the Secretariat
meets and wants to postpone
creation of an assembly. The
conference--made possible by the
arrival on 11 August in Tunis of
several members of the FLN ex-
ecutive committee--may be stormy
because the Tunisians suppressed
the 8 August issue of the FLN':s
newspaper for articles critical
of Tunisia. Meanwhile, Bour-
guiba is hoping to secure West-
ern arms from other than French
sources quickly enough to
strengthen his position relative
to that of the Algerians.
In Morocco, the Balafrej
government is struggling for
survival in the face of left-
wing Istiglal criticism, rumors
of projected coups by the polit-
ical opposition, and an insecure
southeastern border area where
new clashes apparently occurred
recently between Moroccan ir-
regulars and Algerian rebels.
Some observers anticipate that
Balafrej will be displaced as
party secretary general during
next month's Istiglal party
congress and later be succeeded
as premier by either Vice
Premier Abderrahim Bouabid or
Consultative Assembly Presi-
dent Mehdi ben Barka, both
leaders-of the Istiqlal left
wing.
Seeking to retain power,
Balafrej has adopted a more
intransigent position toward
the evacuation of French forces
and American base negotiations.
Even if he weathers the crisis,
Moroccan policy probably will
continue to shift toward neu-
tralism and more contacts with
the Sino-Soviet bloc. This
would reduce Bourguiba's influ- 25X1
ence throughout North Africa and
isolate him in his outspoken sup-
port for the'West.
MACMILLAN'S CYPRUS MISSION
London is now considering
whether the results of Prime
Minister Macmillan's 7-12 Au-
gust top-level discussion in
Athens, Ankara, and Cyprus
justify some modifications of
its 19 June Cyprus plan in
order to secure Greek accept-
ance.
In the talks--in which he
sought to encourage a more
favorable atmosphere for nego-
tiations on settling details.
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14 August 1958
of the plan and drafting a
constitution--Macmillan ex-
plained the plan for seven
years of self-government. Lon-
don appears determined to con-
centrate on securing agreement
on an interim solution and re-
fuses to prejudge the ultimate
disposition of Cyprus by mak-
ing long-term commitments now.
In Athens, Greek opposi-
tion to the plan appeared to
waver on some points, but Greece
still objects to provisions
calling for Turkish and Greek
government representation on
the proposed Governor's Coun-
cil. The Turks have regarded
the government representatives
as one of the most attractive
features of the plan, however,
and probably would not accept
their removal.
Concurrent conversations
between Governor Foot and Arch-
bishop Makarios resulted only
in an evasive statement by
Makarios agreeing that preser-
vation of peace on Cyprus was
important. The British have
already made it clear that he
will be permitted to return to
Cyprus only after a limited
period of peace. The success
of the recent drive against
EOKA may preclude an im-
mediate resumption of civil
violence, which ceased on 4
August. In a further effort
at personal diplomacy, Mac-
millan, on his return from
Ankara, stopped at Cyprus for
talks with Greek- and Turkish-
Cypriot leaders and made a
radio appeal for peace and co-
operation.
In Ankara, where the Brit-
ish plan was originally rejected,
there has been a reappraisal
and conciliatory statements
that the "partnership" aspects
of the new proposals can be
reconciled with the Turkish
demand for eventual partition.
EUROPEAN APPREHENSION ABOUT DE GAULLE
Premier de Gaulle's assur-
ances to Italian Premier Fan-
fani on 7 August regarding
weapons cooperation should re-
duce the apprehension with
which the De Gaulle government
continues to be regarded on
the European continent. In
West Germany and Italy, partic-
ularly, there has been official
concern that France will seek
a predominant political posi-
tion through the acquisition
of a nuclear weapons capability.
The smaller countries and Ger-
many are disturbed over French
internal developments, partic-
ularly nationalistic tendencies.
French-German relations
have cooled somewhat as a re-
suit of the re-emergence of what
American officials term a "funda-
mental distrust" of De Gaulle in
Bonn. Bonn was particularly
annoyed by the French desire ex-
pressed in early July to recon-
sider the French-Italian-German
agreements of January 1958 for
armament production and devel
Opment ..
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 August 1958
,,L'Europe c est moi ... !"
cr3 !
.Itl
GERMAN VIEW OF EUROPEAN REACTION TO DEGAULLE
Die Welt, 29 July 1958
ports that Italy is
willing to accept De
Gaulle's aspirations
as European spokesman
in any summit meeting
on the Middle East in
return for French
agreement to implement
the first phases of
the Common Market and
EURATOM agreements.
Suspicion of French
policy on the matter
was somewhat modified
when France agreed to
adopt a more flexible
attitude toward the
free trade area pro-
posal'at the recent
Intergovernmental Com-
mittee meeting of the
17 OEEC countries.
France's smaller
neighbo's share pre-
viously expressed
West German concern
over the French domes-
tic political outlook.
observers also have ex-
The Italian press re-
pressed doubts on the future of
French democracy, based partly
on certain provisions in the
new draft constitution and part-
ly on the possible key role of
Information Minister Soustelle
in the future.
JAPANESE ECONOMIC ACTIVITY IN AFGHANISTAN
Afghanistan is showing con-
tinued interest in Japanese
technical services and is seek-
ing ways of increasing Japanese
trade and investment. -The Af-
ghans have hired about 25 Japa-
nese technicians since Afghan-
Japanese, diplomatic relations
were established in the fall of
1955, just before the USSR of-
Zered to lend Afghanistan $100,-
000,000 for economic develop-
ment These technicians and.
their Japanese companies have
placed Japan among the princi-
pal free-world nations whose
economic activities are counter-
ing the USSR's growing economic
relations with Afghanistan.
In 1956, the Afghan Govern-
ment hired Japan's Gosho Company
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CURRENT INTELLIGENCE WEEKLY RUMMARY
14 August 1955
to build a water syp.tem in.
Kabul and four Japanese techni-,
cians to help improve the Kabul-
Khyber Pass road. In 1957, sev-
eral private Afghan businesses
followed the government's ex-
ample and secured the services
of Japanese technicians, who
appear more willing to work in
difficult surroundings and for
less pay than their Western coun-
terparts. Japan's Marubeni
Company, jointly with Afghani-
stan's Ittehadiyeh Cotton Com-
pany, invested in a porcelain
factory in Kunduz in northern
Afghanistan, thus far the only
foreign private investment in
an Afghan business. Other Af-
ghan companies have hired Japa-
nese to run a match factory, a
ceramics factory, and a new ray-
on plant, all in Kabul. These
companies all use Japanese ma-
chinery.
While the number of Japa-
nese technicians and companies
working in Afghanistan has in-
JAPANESE COMMUNIST PARTY CONVENTION
The seventh national con-
vention of the Japanese Commu-
nist party, held 21 July to
1 August in Tokyo, confirmed
the leadership which actually
has been in control since 1955,
but the: convention's failure to
agree On an action program in-
dicates that factionalism re-
mains a major problem. The
meeting emphasized the party's
intention to push united-front
activities and its "peaceful"
party line.
The convention, the first
since 1947, had been postponed
several times since 1955 until
the leadership was confident of
thwarting young dissidents who
are anxious for a return to vio-
lent tactics. Several "dis-
graced" former central commit-
teemen and others around whom
creased, the country's trade
with Japan has declined. Afghan
cotton exports to Japan have fal-
len drastically since 1954, which
probably was partly caused by
Afghanistan's increased need to
barter its raw cotton to pay for
imports from the USSR.
Afghan-Soviet barter trade
apparently had an additional ad-
verse effect on trade with Japan
by cutting into Afghanistan's
textile imports from India, which
found its balance of trade with
Afghanistan increasingly un-
favorable. Since the end of
1956, New Delhi has not allowed
Afghan merchants with credits
in India to convert them to dol-
lar and sterling credits to pay
for imports from Japan. These
developments are making it in-
creasingly difficult for Afghans 25X1
to import Japanese machinery and
other goods.
the dissidents had hoped to ral-
ly were recently expelled by the
party.
Delegates at the convention
approved the expansion of the
central committee from 15 to 31
members, and replaced the first
secretary's post with two new
offices--secretary general of
the party, held by Kenji Miya-
moto, and chairman of the cen-
tral committee, filled by for-
mer First Secretary Sanzo No-
saka. The replacement confirms
the rise of Miyamoto to power
and prominence at the expense
of Nosaka and others. These
changes were designed to pro-
mote greater collective leader-
ship; Moscow reportedly opposed
concenttation of the party's
power in a single office. The
election to the central committee
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CURRENT INTELLIGENCE WEEKLY S Y
14 August 1958
of Shigeo Kamiyama, who repre-
sents the interests of the dis-
sident Tokyo Metropolitan Com-
mittee, which enjoys wide pre-
fectural support, indicates
that the Miyamoto-Nosaka con-
trol is not complete,
Inability to agree on an
action program was over the
question whether Japan had ac-
tually achieved independence or
was still "subservient" to the
United States. A large opposi-
tion group argued that the pro-
gram should be directed primar-
ily against Japanese monopolists
and not against American in-
fluence as stated in the draft.
Japan's Communist party
probably will remain weak polit-
ically, at least until internal
problems are solved.
During the Ma-y-19"
elections, the party received
989,000 votes--2.6 percent of
the total--losing one of its two
seats in the lower house of the
Diet.
The official summary of
the recently published Hungar-
ian white book on the "conspir-
acy" of Imre Nagy goes to great
lengths to pin the onus for the
national uprising of 1956 on
Nagy and Western "imperialists"
and to give the present regime
a clean slate--clearly an at-
tempt to kill predictions that
Janos Kadar, because of his
past close involvement with
Nagy, would be removed as party
leader. The presentation also
depicts the Hungarian Stalin-
ists, who ruled Hungary before
Nagy, in a very favorable light,
suggesting that some of these
individuals, who were strongly
condemned by Kadar for their
share in former party leader
Matyas Rakosi's mistakes, may
soon be allowed to return to
Hungary from the USSR.
Erno Gero, economic czar
under Rakosi and party leader
on the eve of the revolution,
was not to be allowed to return
for three or four years because
of his acquiescence in Rakosi's
errors, but former Premier
Hegedus, former Minister of In-
terior Piros,and former Minister
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CURRENT INTELLIGENCE WEEKLY SUGARY
14 August 1958
of Defense Bata were scheduled
to come back at the end of 1958.
This deadline may now have been
advanced by Moscow in an effort
to conciliate the important
hard-line wing of the Hungarian
party, with the ultimate aim
of strengthening party "unity."
Kadar, nevertheless, ap-
pears to remain Khrushchev's
chosen instrument in Hungary,
judging from the Soviet pre-
mier's statement to Adlai Ste-
venson on 5 August that he "had
decided to spend his vacation
with Kadar this summer." A
meeting with Khrushchev at this
time would greatly strengthen
Kadar's hand in dealings with
party Stalinists who have been
encouraged by the executions
of Nagy and Pal Maleter to hope
for Kadar's eventual fall. Ka-
dar also appears to be publi-
cizing his activities in order
to combat the impression that
he is losing control. It is
notable, however, that the full
texts of his recent statements
have not been published. His
policy statement to the central
committee on 25 July has not
been published at all, and he
has made no really important
speech in Hungary for a long
time. Although he is manifest-
ly attempting to remain aloof
from the Nagy affair, apart
from a belated endorsement of
the executions, he has sought
to create the impression that
the terror is now ending, in
an obvious attempt to gain pop-
ular approval.
In support of Kadar's re-
cent statement that the execu-
tion of Nagy "closes the book
on the counterrevolution," the
white book states that no ac-
tion is being taken against
certain individuals who did not
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14 August 1958
actively participate in the
"conspiracy" or who subsequent-
ly turned state's evidence.
Among those specified are the
liberal Communist pundit Gyorgy
Lukacs and Mrs. Julia Rajk,
widow of the Hungarian Commu-
nist leader whose execution on
charges of Titoism in 1949 is
still decried by the Hungar-
ian regime. Several other
close associates of Nagy, whose
"confessions" are cited in
the white book, are not listed,
however, suggesting that they
have been or will soon be tried.
THE THINNING RANKS OF STALIN'S INDUSTRIAL ADMINISTRATORS
Of the men who played a
vital role under Stalin in the
establishment and expansion of
the Soviet industrial base, only
a few are still active in high
government posts. The death
last week of Stepan Akopov, for-
mer minister of transport ma-
chinery, brings to eight the
number of these officials who
have died in the last two years.
Others, such as Lazar Kagano-
vich, have suffered severe po-
litical setbacks,' while some,
like oil expert Nikolai Baiba-
kov, appear merely to have been
demoted.
The reorganization of in-
dustry last year has, of course,
reduced many former ministers
to posts of lesser importance
and necessitated new alignments
in the industrial administra-
tion. While the way has been
opened for the rise of new in-
dustrial administrators, none
have so far attained the same
high level of combined standing
on the party presidium and the
Council of Ministers as did some
of their predecessors.
The eight leading officials
who died during the last two
years, in addition to being
prominent as industrial mana-
gers, had long careers as party
functionaries. With one excep-
tion, all were members of the
party central committee. All
were in their middle or
late fifties .at:: the.. -tiiie
of death. The eight include
Pavel A. Yudin, long-time min-
ister of the building materials
industry; Ivan Likhachev, an
"old Bolshevik" prominent
in the establishment of the
automobile and highway trans-
port industry; and Ivan
I. Ngsenko, :overseer of
transport machinery and ship
construction.
The death of Avraamy Za-
venyagin in December 1956 and
of Vyacheslav Malyshev in Feb-
ruary 1957 removed from the
scene two top men directing the
Soviet atomic energy program.
Maly-
shev was probably the highest
ranking official of the eight
who have died. In addition to
serving a number of times as
a deputy chairman of the USSR
Council of Ministers, he was
a member of the party politburo
(now presidium)for a brief
period just before Stalin's
death. He had various top posts
in the heavy transport construc-
tion field before taking over
direction of the Soviet atomic
energy program in 1953. Za-
venyagin took part in the de-
velopment of the metallurgical
industry during the thirties
and apparently was involved in
the atomic program from its in-
ception. He was a deputy chair-
man of the Council of Ministers
and minister!' of medium machine
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CURRENT INTELLIGENCE WEEKLY SUZY
14 August 1958
building (atomic program) at
the time of his death.
Others who have died in-
clude Ivan Tevosyan, top Soviet
specialist in metallurgical
production, who ranked in the
party and government almost on
a level with Malyshev; Fedor
Loginov, construction chief of
many of the major hydroelectric
installations and later minister
of power station construction;
and most recently Stepan Akopov,
a close associate of Malyshev
in the machinery building field.
In addition to the economic
administrators who have died,
there are those who because of
their involvement in the move
to upset Khrushchev in June
1957.now find themselves cool-
ing their heels at work below
or outside their special capa-
bilities. The most prominant,
is Lazar Kaganovich who probably
did more than any other living
Soviet leader to transform the
economic base of Soviet society.
Also removed from prominence
were Mikhail Pervukhin, top
expert on electric power, fuel,
and chemical industries, and
Maksim Saburov, veteran economic
planning administrator. Per-
vukhin technically still re-
tains a position on the party
presidium,but his post as am-
bassador to East Germany re-
moves him from influence in
Moscow.
Several other once prom-
inant administrators appear
to be currently out of favor;
Nikolai Baibakov, long-time
minister of the oil industry;
Mikolai Dygai, for many years
minister of construction of
machine building enterprises;
and David Raizer, associated
with Dygai in the construction
field.
KHRUSHCHEV ANNOUNCES DECISION TO STRESS THERMAL ELECTRIC POWER
The construction of thermal
electric power stations will
take priority over hydroelectric
stations during the next seven
or eight years, according to
Nikita Khrushchev, to permit
the USSR to increase electric
power production in the shortest
possible time. In his speech
dedicating the Kuybyshev hydro-
electric station on 10 August,
Khrushchev said that the long-
term economy, of lower operating
costs in production of hydro-
electric power is to be sacri-
ficed to reduce initial invest-
ment and gain time in economic
competition with the West. The
savings in investment can be ap-
plied either to naiug electric
power targets or to other in-
dustrial branches over the next
seven years.
The construction of thermal
electric stations requires con-
siderably less initial invest-
ment and construction time per
unit of electric generating c_
capacity than that of hydroelec-
tric stations. In addition,
the more rapid tempo of placing
new capacity in operation would
allow further increases in labor
productivity through the earlier
availability of electric power
for industry.
The Kuybyshev hydroelectric
station, the largest in the
world, has been the subject of
much propaganda, and Khrushchev's
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CURRENT INTELLIGENCE WEEK4,Y SUNRARY
14 August 1958
remarks there were not entirely
appropriate to the occasion.
They 'were, however, more a rec-
ognit