CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002300100001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 44
• Document Creation Date: December 20, 2016
• Document Release Date: December 20, 2005
• Sequence Number: 1
• Publication Date: October 19, 1999
• Content Type: SUMMARY

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(CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
OCI NO. 3530/59
23 July 1959
DOCUMENT NO. , /6__
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DAT REVIEWER:
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
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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NFIDENII~AL
CURRENT IN LIGENCE WEEKLY SUMMARY
23 July 1959
Resumption of private
four-power negotiations during
the second round of the for-
eign ministers' conference has
not produced any modification
of the uncompromising Soviet
position which ties any Berlin
solution to the establishment
of an all-German committee to
discuss, among other things,
reunification.
In declaring "unaccept-
able" on 20 June the new West-
ern proposal for continuing
indefinitely the Geneva con-
ference to consider the Ger-
man problem as a whole, So-
viet Foreign Minister Gromyko
maintained Moscow's firm posi-
tion. Reserving the right to
comment further at a later
date, he charged that the new
proposal does not reflect a
desire to find an acceptable
substitute to the Soviet pro-
posal for an all-German com-
mittee, since the Western plan
differs basically from that
of the USSR.
In a lengthy speech on 22
July, he defended Moscow's in-
sistence on negotiations be-
tween the two Germanys as in-
tended to permit a more real-
istic assessment of the diffi-
culties to be overcome. In
stating Moscow's position on
the possibility of unilateral
Soviet action, he pledged that
while an interim agreement on
West Berlin is in force, as
well as during the negotiations
following such an agreement's
expiration, no unilateral ac-
tion would be taken by the So-
viet Union.
Khrushchev's remarks in
Poland touching on the inter-
national situation--such as
his pledge on 17 July in
Szczecin of Moscow's continued
support to preserve both the
frontier between East and West
Germany and the Oder-Neisse
line "as if they were Soviet
borders"--were probably pH-
manly for local consumption.
These remarks could also have
been intended as a reminder
that any solution to the Ber-
line-German problem must be ne-
goti:a,ted in the context of a
"two Germanys" approach and to
put at rest any thoughts either
inside or outside the bloc that
Moscow would ever allow the
establishment of a reuni-
fied Germany which would be
either Western-oriented or
independent.
Khrushchev refused, when
approached directly at a So-
viet Embassy reception in War-
saw on 21 July to comment on
the progress of the negotia-
tions, saying that it was Gro-
myko's position to do the
"thinking on this subject."
Khrushchev chose the final
communique to warn the Western
powers that their stand in Ge-
neva "may lead to aggravation
of the situation, pregnant with
danger to the cause of
peace in Europe," The communique
reiterated the admonition that
the two countries will sup-
port East Germany "in meas-
ures which it may recog-
nize as appropriate to liqui-
date the abnormal situation
in Berlin." Calling for a
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
heads-of-government conference
"to lessen international ten-
sion,"' the declaration assert-
ed that a certain amount of
positive work had been done at
the foreign ministers' level.
It "emphasized the special
right" of Poland and Czecho-
slovakia to participate in any
East-West negotiations on the
German problem and European
security.
Meanwhile, it is rumored
in Moscow that a top-level bloc
conference of bloc leaders is
to be held early in'August.
The Soviet leaders prob-
ably view Vice President Nixon's
visit to the USSR as a major
opportunity to examine East-
West positions with aview to-
ward narrowing the gap suffi-
ciently to satisfy Western re-
quirements for holding a sum-
mit conference. Moscow prob-
ably hopes during the visit
to probe for possible future
movement in the American posi-
tion, as well as any splits in
Western unity.
Soviet propaganda has crit-
icized the vice president and
has alluded to incidents during
his trip last year to Latin
America as indications of what
the peoples of other nations
think of American leaders.
Khrushchev's decision to
cancel his Scandinavian tour
originally scheduled for 9-27
August leaves Moscow free to
bid perhaps during the vice
president's visit--for an early
summit meetings Although the
Soviet leaders would probably
expect the Western powers to
reject a call for a mid-August
meeting on the grounds of in-
sufficient time for prepara-
tion, they may believe that
such a move would increase pres-
sure in the West, particular-
ly on London, for agreement to
hold a top-level meeting in the
near future.
Despite the complete stale-
mate in the negotiations at
Geneva, bloc propaganda and
public statements by officials
for both internal and external
consumption continue to be op-
timistic about the final out-
come, probably in order to
keep the West from precipitant-
ly breaking off the negotia-
tions. However, a 20 July TASS
article repeated a Western news
comment on the alleged split
growing between the United
States and Britain over Ameri-
can "obstinate rigidity." So-
viet propagandists have at-
tacked President Eisenhower's
proclamation of "Captive Nations
Week," noting its coincidence
with, Vice President Nixon's
trip to the USSR.
Nuclear Test Talks
Initial Soviet reaction to
the Western proposal intro-
duced at the conference on 20
July--providing for control-
post staffs consisting of one
third from the host country,
one third from the "other side,"
and one third from the nonnu-
clear countries--was mixed.
The Soviet delegate called the
proposal a step forward, al-
though not far enough "to be-
come a subject for agreement
between us," He opposed the
introduction of personnel from
nonnuclear countries because
the "chief burden" should fall
on the three nuclear powers,
which bear the main responsi-
bility under the treaty. He
alleged that he was "taken
aback" by the Western statement
that the new proposal repre-
sented a final concession on
staffing and charged that this
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
sounded like an "ultimatum not
conducive to agreement."
The Soviet delegation has
continued to press for agree-
ment on its draft proposal for
an annual inspection quota,
claiming that the American del-
egation's silence on this is-
sue reflects pressure by cir-
cles in the United States op-
posed to agreement,
After much prodding by the
Western delegates, the Soviet
delegate on 17 July gave an
item-by-item review of Moscow's
position on the veto and added
that the USSR continued to in-
sist on the principle of una-
nimity on various topics, but
did not care whether this was
brought about by veto rights
in the control commission or
by specific treaty provisions
for three-power unanimity on
these topics.
West German Views
Following a period of con-
f'usibni:. and Foreign Minister
Brentano's recall to Bonn for
discussions with Chancellor
Adenauer on 16 Jiily, the West
German Government has apparent-
ly abandoned its 1Q: July memo-
randum to the Western powers
suggesting an adjournment of
the Berlin negotiations and
calling for a summit confer-
ence on disarmament and unifi-
cation. Bonn's press chief
confirmed publicly that the
memorandum represented Ade-
nauer's views, despite press
reports that it had been dis-
tributed without his consent.
He also stated, however, that
Adenauer still supported a sum-
mit conference with a broad
agenda and considered it dan-
gerous to limit such a meeting
to the German and Berlin ques-
tions.
In a press conference on
20 July, West Berlin Mayor
Brandt reiterated the Berlin
government's stand on the points
Which must be covered in a
Berlin settlement. Brandt said
that Western rights in Berlin
must be maintained undiminished,
-along with the right of free
access, and that the gradual in-
tegration of West Berlin with
West Germany must not be dis-
turbed. He repeated his ear-
lier suggestion for a German
"interadministrative" commission
to handle technical problems
such as interzonal trade, travel,
and cultural exchanges. Brandt
emphasized that Berliners were
less interested in obtaining
formal Soviet recognition of
Allied rights than in the fact
that; the Western powers would
continue to exercise these 25X1
rights.
British Pressures
Continued British pressures
to achieve a heads-of-government
meeting were reflected in Ambas-
sador Whitney's 16 July conversa-
tion with several representative
Conservative Members of Parlia-
ment. The MPs stated that if a
summit meeting failed to materi-
al.ize3, , the British public would
place the blame on the United
States, and that some resentment
would also be directed at the
Conservatives, whose chances
would be;hurt in the general
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
election anticipated this fall.
The MPs noted that the British
public is not dptimistic that
a summit meeting would produce
results, so that even an unsuc-
cessful meeting just prior to
elections would not adversely
affect Conservative prospects.
The British press, mean-
while, has taken a pessimistic
MIDDLE
Iraq
tone with the sharpening of the
East-West differences at Geneva.
Vice President Nixon's visit
to the USSR is now seen as
providing an opportunity for
progress. The independent
Times believes this should
clai Tfy Moscow's "real in-
tentions."
(Concurred 'in by
from the high command, that those.
who mislead "simple soldiers"
and instigate violence will be
severely punished, and that it
is his intention to act as the
protector of the rights of all
communities, parties, and in-
dividuals. Members of the Turko-
man community are being urged
to return to their homes and to
assist the authorities in the
investigation of the incidents.
The celebration on 14 July
of the anniversary of the Iraqi
revolution now seems to have
increased rather than alleviat-
ed political and communal ten-
sions. The large-scale dis-
orders which broke out in the
northeastern center of Kirkult
on that day, even though they
were suppressed within three
or four days, may be symptoms
of dangers still to come rather
than a climactic development.
The scale and ferocity of
the Kirkuk incident apparently
owed as much or more to antip-
athies between the Kurdish and
Turkoman communities as it did
to possible Communist instiga-
tion. From the Qasim regime's
standpoint, the most dangerous
aspect of the affair was the
rapidity with which the local
police and army units disinte-
grated into factions which
chose one or the other side in
the fighting.
In a speech on 19 July be-
fore a Christian minority group,
the prime minister again under-
lined his determination that his
government, and his government
alone, will decide who is plot-
ting against the revolution,: that
the army must take orders only
Qasim has so far seemed to
rely primarily on appeals
to the better nature and
patriotism of the Iraqis to
prevent violence, which could
lead to long feuds, particular-
ly in outlying areas where old
antagonisms are easily awakened.
He may well have to take tougher
preventive measures, however,
if he is to avoid a general
breakdown of government author-
ity outside the capital.
Iraqi-Soviet Relations
Soviet leaders, concerned
over current difficulties of
Iraqi Communists, are placing
major emphasis on efforts to
show Qasim that the USSR is
Iraq's best friend. The high-
level delegation from Moscow
to the 14 July celebration
carried an invitation from
Khrushchev to Qasim to visit
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
the Soviet Union. Kuznetsov,
Soviet deputy foreign minister
who headed the delegation, saw
Qasim at least twice during the
festivities. Moscow- radio's
world-wide propaganda coverage
of the Iraqi celebrations was
favorable and extremely heavy--
over 100 commentaries, which is
far more than similar celebra-
tions in the UAR have received.
Cairo's propaganda media
have charged that the Kirkuk
incident was part of a broader
Communist plot. There is no
evidence to support this asser-
tion, which is itself a part of
Cairo's not-too-subtle effort
to embroil Qasim with the Com-
munists as much as possible
While the Cairo press has
given most of its attention to
the events in Iraq, it has also
discovered a new Anglo-Israeli
conspiracy concerning the Suez
Canal. London has again indi-
cated it hopes the World Bank
will postpone consideration of
the UAR's application for a
canal-improvement loan until at
least some more of the outstand-
ing economic issues between
Britain and the UAR have been
settled. While Nasir has re-
peated that he would like to
see an improvement in his re-
lations with Britain and France,
this kind of pressure tactic
has in the past produced a neg-
ative reaction from the UAR
President, and the Egyptians
associate it with their dispute
over Israeli shipping rights.
Israel
The Israelis remain the
UAR's most immediate foreign
policy problem. Tel Aviv is
continuing its diplomatic prob-
ing of the UAR's position on
freedom of navigation of the
Suet Canal. The Israelis re-
gard this as primarily a po-
litical rather than an economic
problem, since they claim that
the port of Eilat at the head
of the Gulf of Aqaba can ade-
quately handle the relatively
small percentage of Israel's
foreign trade which moves to-
ward Asia and East Africa.
The Israelis insist that
their free use of the gulf,
without which Eilat would be
only a minor fishing haven, is
the :really vital issue, and
the Suez Canal question is for
them a kind of diplomatic buff-
er in front of it. With Prime
Minister Ben-Gurion on vacation,
Tel Aviv is not likely to take 25X1
any new decisions on this is-
sue unless some UAR antinn
forces a move.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
Tension has increased-along
the Algerian-Tunisian border
in the wake of an attack on 14
July by a 500-man band of Alge-
rian rebels on a French out-
post at Ain Zana. The attack-
ers subsequently withdrew into
Tunisia, which is apprehensive
that the French may retaliate
in force. Tunis has, proclaimed
a state of emergency in one
border region after charging
that unidentified Algerian
elements had attacked Tunisian
Army posts.
The current border tension
appears to reflect attempts by
the rebels to provoke incidents
between the French and the Tuni-
sians in order to direct inter-
national attention to the Alge-
rian problem. The attack at
Ain Zana--possibly designed to
provoke a French strike into
Tunisia--was on a larger scale
than usual for the rebels, but
appears to have resulted in few
casualties and little damage.
Long-standing Tunisian con-
cern over the situation along
the border with Algeria--where
Tunisians have been involved in
incidents with rebel as well as
with French troops--is doubt-
less heightened by recent rumors
that the French plan a major
strike at rebel installations
in Tunisia. A rebel communique
alleging that the French are
planning a "massacre" of Moslems
in the border area by troops
disguised as Algerians appears
designed to play on this con-
cern and to blame the French
in advance for any future in-
cidents.
The "highly emotional"
protests of Premier Debre and
other French Government leaders
to American and NATO officials
over prospective US and Norwe-
gian shipments of arms and am-
munition to Tunisia stem basi-
cally from French fears that .
this materiel might enable the
rebels to mount a new offensive
in Algeria. This would under-
cut French claims that the Alge-
rian war has been won, and en-
courage additional domestic and
international pressures on France
for a rapid settlement. Paris
has long maintained that'.the
rebels have been able to hold
out only because of foreign
support. and encouragement.
Norway has decided to re-
fuse export licenses for the
time being, and Tunisian offi-
cia]Ls deny any deal with the
Norwegians. Oslo's decision
has not deterred Paris from
insisting that the United
States halt its shipments.
Suspension of arms de-
liveries contracted for in
June would probably evoke a
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
violent reaction from Premier
Bourguiba., American and West-
ern prestige in Tunisia would
almost certainly suffer, and
prospects for an amicable
settlement of the Bizerte ques-
tion and other outstanding
French-Tunisian issues would
decline sharply.
Underlying the French pro-
tests is the general dissatis-
faction of Paris over its fail-
ure to obtain solid American
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backing for French policy in
Algeria, establishment of tri-
partite US-UK.-French consulta-
tion on global affairs, and
American help in the French nu-
eleznr program. A similar.French
reaction to the recent Moroccan
requests for American arms can
also be expected. Although the
French are reported reinforcing
their forces in the border area, 25X1
there is no firm evidence they
intend to strike in force into
Tunisia.
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'rt
W. v
1VM
23 July 1959
Fidel Castro's action on
17 July forcing President Manuel
Urrutia's resignation by pub-
licly defaming him has served
once more to demonstrate his.
hold over the Cuban masses,
His authoritarian behavior, how-
ever, has probably weakened his
support among middle-class ele-
ments, where respect for demo-
cratic methods has always been
strongest, and has tended to
further Communist objectives.
Although Castro. resigned
as prime minister on 17 July
in his maneuver against Urrutia,
he remains the recognized "maxi-
mum leader of the revolution,"
the informal position that gives
him his real power. The new
president, the 40-year-old
lawyer Osvaldo Dorticos,.is ex-
pected to be a compliant front
man for him.
Castro's major charge was
that Urrutia's strong anti-Com-
munist declarations on 13 July
bordered on treason because they
had given aid and comfort to
the Cuban "reactionaries" abroad
who are trying to sabotage the
revolution and provoke foreign
intervention by making false
charges of Communist infiltra-
tion in the Cuban regime. Castro
reiterated in his 17 July speech
that neither he nor his govern-
merit is dominated by Communists
and that Cuba's new democratic
ideals prohibit "persecution"
of Communists.
Communists quickly joined
in the emotional public expres-
sions of support for Castro and
against Urrutia, A party lead-
er, declaring that the revolu-
tion was in danger, called for
the formation of a "truly revolu-
tionary government" with Commu-
nist participation, Although
Communists are unlikely at this
time to be accepted into any
government coalition, they have
undoubtedly been encouraged by
the events of the past week.
There are indications that
Raul Castro, who as armed forces
chief has facilitated Communist
penetration of the military, may
have gained increased influence
in the government with Urrutia's
ouster. Friction between Raul
and Urrutia over government ap-
pointments may have contributed
to Urrutia's ouster, and Raul
has attended cabinet meetings
in -the past week, not the normal
practice of military chiefs, 25X1
Raul Castro remains his older
brother's heir to leader-
ship of the revolution
PEIPING'S EFFORT TO ESTABLISH PROPAGANDA NETWORK IN LATIN AMERICA
The touring delegation of
Chinese "journalists," now in
Cuba after visiting Chile,
Uruguay, and Brazil, has been
trying to develop a propaganda
network in Latin America of lo-
cal reporters in order to fur-
ther anti-US sentiment in the
area. The Chinese Communists
hope to build up popular senti-
ment favoring recognition of
their regime in an area where
no government has accorded rec-
ognition. Peiping, which re-
portedly plans to open a New
China News Agency (NCNA) office
in Chile, has appointed the
editor of a Chilean Communist
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
weekly as official NCNA rep-
resentative in the country, and
the delegation reportedly tried
to hire local reporters in
Uruguay.
While in Uruguay, the dele-
gation attended the opening of
a Uruguayan-Chinese Friendship
Society. This makes the fifth
such society in Latin America,
and preparations are afoot to
establish others, notably one in
Colombia under the nominal lead-
ership of the congressman who
led the recent congressional
delegation to the USSR and China.
Peiping appears to be mak-
ing Cuba a center for its propa-
ganda activities in the area.
It has already established a
press office in Havana and it
plans to have the local Commu-
nist press print a Chinese-
language newspaper. The Chi-
nese will probably also exploit
the new Latin American Press
Agency, which is penetrated by
Communists and has editorial of-
fices in the same building as
NCNA's Havana bureau.
The delegation of, Chinese
"journalists" had an interview
with Raul Castro during which
he told them, according to Pei-
ping radio, that among Latin
American youths Mao Tse-tung is
"one of the most respected fig-
ures." In alleging many similar-
it:Les between Cuba and China,
Raul Castro equated Chiang Kai-
shok with Batista and added
that the enemies of Cuba and
ChiLna are supported by the "same
international reaction."
The "Journalists" have ex-
ploited all opportunities to
hint at the desirability of
Cuban adoption of Chinese Commu-
nist land-reform techniques;
Peiping claims that at the.re-
cent international land reform
forum in Havana, the delegation
was besieged by Latin American
delegates with questions on this
subject. Peiping will probably
try to impress a Cuban women's
delegation now visiting China
with the applicability of Chi-
nese Communist ,experiences"
to Cuba.
ARGENTINE NAVAL OFFICERS THREATEN MASS RESIGNATIONS
. Argentine President Fron-
dizi's determined stand to re-
tain Rear Admiral Estevez as
naval secretary, despite strong
navy opposition, has strained
further his military support and
is a psychological handicap in
dealing with continued labor
pressures. Some 100 high naval
officers have reportedly offered
their resignations in protest.
Frondizi, who is dependent on
the support of the armed forces,
will probably have to give in
shortly--as he did in the re-
cent army crisis--in order to
avoid a larger threat to stabil-
ity.
Most naval officers are
reported pressing for Estevez'
ouster. The majority feel that
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,23`.. Jaiy 1,95#
his strong loyalty to Frdndizi'
has limited his effectiveness in
maintaining discipline and in
presenting the navy's viewpoint,
particularly concerning the need
for stronger measures against
the Peronistas and Communists..
Generally the same views
were voiced by army. dissidents.
a few weeks ago. Compromise
partly resolved the army com-
plaints and resulted in,.anumber
of command changes, as well;ath
the appointment of a new army
secretary. Moreover, the cabinet.
reorganization of late June,
which also removed many sub-
cabinet aides at least temporar-
ily, quieted the considerable
apprehension regarding Commu-
nist and Peronista infiltration
of the government, The appoint-
ment of Alvaro Alsogaray--a
strong exponent of free enter-
prise--as minister of economy
and acting minister of labor
reportedly pleased the majority
of the armed forces.
Alsogaray is using a pub-
lic relations approach in trying
to (counterwidespread criticism
of austerity measures under the
US-backed stabilization program.
In weekly speeches, he emphasizes
the government's efforts to bear
the brunt-of austerity and to
prevent price gouging. Admitting
that; the cost of living has more
than doubled, over the past year,
Alsogaray is trying to persuade
workers to reduce their wage de-
mands.until production increases.
'phis will be a, herculean
task, however, in view of low
real wages, the various limitations
on expanded output, and threats
by Peronista and'Communist la-
bor groups for joint action
against: the stabilization program.
Meta.lltirgical workers struck.
on .20 July and threaten to pro-
mote a general strike if wage
demands are not met.
Such agitation increases
Frondizi's reliance on the
armed forces and in part
is responsible for the
tension. in the armed forces.
COMMUNIST ACTIVITY IN HONDURAS INCREASING
The weak Communist party
in Honduras has become increas-
ingly active since 12 July when
armed civilians and the military
put down a revolt led by an in-
veterate plotter wh.o_was sup-
ported in the main by national
police. The Communists are ex-
ploiting the long-standing civil
military feud that has become
intensified since the revolt and
may be able to consolidate gains
being made if President Villeda
Morales does not act quickly'.to
curtail their influence. Hon-
duras is not likely, 'however, 'to
fall under Communist control in
the foreseeable future.
The role of the armed forces
has long been a subject of con-
troversy in Honduras. They con-
sider themselves the guarantors
of Honduran political institu-
tions and have strenuously re-
sisted:all attempts to encroach
on their constitutionally en-
dorsed status of autonomy within
the government. On the other
hand, the administration Liberal
party believes the civil govern-
ment will never be secure until
the military is brought under
contrrol. Even though the armed
forces remained loyal during the
12 July attempt, militant mem-
bers of the Liberal party demand
that the power of the army--which
now 1.s responsible for supervis-
ing the national police--must be
drastically reduced.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
The :axit'i-mi'lit'ary- line has
been taken up vehemently by Com-
munist-led students who, like
hundreds of other civilians,
were armed by the government
during the early hours of the
revolt. They have since taken
over some police functions. Com-
munist-controlled information
media in Tegucigalpa-have sup-
ported student demands that the
police not be put back under
military control. The Gommu-- ? ' '
nists will presumably attempt
to furnisha nucleus for a re-
organized police force and have
already suggested a Communist
for the post of chief.
Villeda Morales has tried
to avoid taking sides, He is
probably aware of the peril pre-
sented by the Communists in
their attempt to win influence
by promoting the extreme demands
of the Liberal party. However,
the President's past hesitation
to confront difficult situations
with firmness suggests that he
will take no effective action
against the Communists.
The army is restrained from
taking over the country only by
the realization that such action
would provoke widespread and sus-
tained civilian resistance. Out-
breaks are possible for some
time both in the 'capital
and in outlying areas, where the
Liberals control armed groups of
civilians known as the "black
army."
Communist line.
The 500-member Honduran
Communist party, f irst organized
in :L954, is weak and has suffered
from lack of adequate financing
and from factionalism. Even its
efforts to win control of the
country's largest segments of or-
ganized labor have had little suc-
cess. Its greatest successes
have been among student groups
in the capital, where the party's
influence is largely indirect,
working through student leaders
sympathetic to declared Communist
aims. A Communist writer on the
editorial staff of a leading
Tegucigalpa newspaper for more
than a year has converted the
paper into an outlet for the 25X1
THE JAMAICAN ELECTION
Jamaica's role in the year-
old West Indies Federation is
the main issue in the island's
28 July general election. This
could be the decisive factor in
determining the future of the
Federation, since Jamaica is the
largest and wealthiest unit in
the organization.
The Peoples National party
(PNP), which controls the pres-
ent '. government, and the Jamaican
Labor party (JLP), are the main
contestants to fill the 45 seats
in the House of Representatives.
The dominant figures in the cam-
paign are the rival party lead-
ers, Norman Manley of the PNP
and Sir Alexander Bustamarte
of the JLP.
Bustamante, who from the
beginning has opposed the Fed-
eration, has made it the over-
riding political issue in the
election campaign. He is ex-
ploiting the fact that sentiment
against the Federation is ramp-
ant among business and commercial
interests, which are convinced
that Jamaica will suffer indus-
trially and financially for the
benefit of less-developed West
Indian colonies. They are par-
ticularly apprehensive about
the proposed federal customs
union, and see in the Federation
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CURRENT INTELLIGENCE WEEKLY SMOIARY
23 July 1959
plan to levy income taxes ret-
roactively. to 1958 a direct
threat to Jamaica's 1957-67 de-
velopment program which is de-
signed to entice new invest-
ments.
In the face of such vehe-
ment opposition and the antici-
pated closeness of the election,
Manley', a principal sponsor of
federation, has yielded to opin-
rr`AICOS ISLANDS
IX; .
TURNS ISLANDS
HAITI
CAYMAN DOMI
ISLANDS
MAICA
to allow for the island's "spe-
cial circumstances," namely, that
Jamaica's superior economic po-
sition and its greater popula-
tion and wealth merit economic
concessions and a more prominent
role in the Federation Govern-
ment.
ATLANTIC OCEAN
PUERTO
RICO VIRGIN
L_./-Ise NDS 'A Nevis
St. Christopher 1i~*`Antigua
Montserrat GlGuedeloupe
Chagtiaramas .Tobago
-_ RINIDAD
Federation of the West Indies
COLOMBIA
*Dominica
flMeramique
?St. Lucia
St. Vincenta a
BRITISH
N'UTANt
ion within his own party. Al-
though he,also leads the party
controlling the federation legis-
lature, he now is on record fa-
voring Jamaica's withdrawal un-
less the constitution is revised
Although it is doubtful
either Bustamante or Manley
would at the present
time actually withdraw
Jamaica from the Fed-
eration, a Bustamante
victory would be inter-
preted as a greater
threat to Britain's ef-
fort to bring the scat-
tered Caribbean col-
onies to independence
through this device.
The vehemence with
which the issue is
being debated and es-
pecially Manley's
change of view have
already weakened the
Federation. Jamaican
hostility toward the
Federation also
strengthens the hand
Trinidad's anti-American
premier, Eric Williams. in
Federation policies.
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The Christian Democratic
party (CD) on 21 July failed to
line up sufficient votes among
the right-wing parties in the
Sicilian assembly to assure a
regional government excluding
Communists, Socialists, and
Silvio Milazzo's dissident Social
Christian faction. Milazzo now
has a better chance of being
elected regional president when
the balloting, scheduled for 27
July, takes place, The Sicilian
impasse will tend to increase
the polarization within the CD
at the national level between
those forces led by
Premier Segni, who f a-
vor continued accept-
ance of the support
of the Monarchist and
neo-Fascist parties,
and the forces led by
ex-Premier Fanfani,
who favor a center-
left orientation.
Although Milazzo
heads a Sicilian as-
sembly group of only
nine votes out of 90,
his strength lies in
his willingness to
accent the 32 votes
of the Communists and
Nenni Socialists if
23 July 19591
collaboration with the Commu-
nists. The CD was able to block
the election of Milazzo on 21
July by boycotting the balloting
and thereby precluding a quorum--
a temporary expedient which only
revealed the CD's uncertainty
that its alliance with the right
wou:Ld hold together during a
secret ballot. On 27 July the
quorum rule will not apply.
Fanfani will use the CD's
failure to arrive at a working
majority with the right-wing
parties in Sicily to support
SfCILIA1 BE .OVAL ASSEMBLY
soci~L
DEMOCRATIC
PARTY
COMMUNIST
PARTY
21
CHRISTIAN
DEMOCRATIC
PARTY
34
90
SEATS
the Christian Democrats prove
unwilling to compromise with
him on his terms, which are cer-
tain to include retaining him
as regional president.
The CD leaders may feel
forced to accept this compromise,
but until now they have been un-
willing to appear to reward rath-
er than punish a notorious flout-
er, of party discipline and of
the Vatican injunction against
his contention that the party's
destiny lies in an "opening to
the left." To the consternation
of Premier Segni, this view Was
supported by party secretary Aldo
Moro in a speech to regional par-
ty leaders on 3 July. What-
ever its outcome, the strug-
gle for power in Sicily is
certain to accentuate cleav-
ages between the two major
trends in the party.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SICILIAN CHRISTIAN
SOCIAL UNION
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
FINLAND AND AUSTRIA AND THE LITTLE FREE TRADE AREA
Pravda's warning of 19 July
on the dangers to Finnish neu-
trality in joining the proposed
little Free Trade Area (FTA)
will most likely deter Finland
from formally joining that group
The Finns were warned that par-
ticipation in such "NATO-domi-
nated, c losed economic organiza-
tions'.' would place them under
the control of the United States.
The Soviet warning may also
complicate Austria's participa-
tion for the same reasons.
Finland's interest in join-
ing any little FTA is motivated
by a desire to preserve the com-
petitive position of Finnish
goods in Western European mar-
kets; about 62 percent of Finn-
ish exports in 1958 went to
Western Europe. The Finns have
been concerned, however, over
Moscow's reaction to their pro-
posed participation and have
sought to assure the USSR of
Finland's good will and deter-
mination to maintain the level
of its trade with the Soviet
bloc; this amounted to about 25
percent of Finland's foreign
trade in 1958.
Finnish officials have pub-
licly stated Finland would par-
ticipate only in a purely eco-
nomic organization without any
political and supranational over-
tones. Finland's future moves
will definitely be influenced
by the USSR's attitude, since
the present Finnish Government,
including President Kekkonen,
is not disposed to act contrary
to explicit Soviet wishes. The
Finns may try to reach bilateral
arrangements with the members
of the new group in order to
retain its markets in Western
Europe.
The Soviet warning will
aggravate Vienna's problem in
working out an acceptable re-
lationship with the Common Mar-
ket countries, which account
for half of Austria's total
trade. Soviet officials have
repeatedly warned the Austrians
that association with the Common
Market would be considered a
violation of Austria's military
neutrality law and have hinted
that association even in con-
cert with other countries would
be objectionable. Vienna has
nevertheless clung to the hope
that it might be able to par-
ticipate in the broader European
economic association which the
little Free Trade Area is in-
tended to promote. Austria has
little interest in the smaller
grouping as such, which accounts
for only 11 percent of Austria's
foreign trade.
in by OR
The Soviet attack is not
likely to deter the other "Outer
Seven" countries from proceed-
ing with their plan, any more
than a Soviet attack on the Com-
mon Market in early 1954 pre-
vented the formation of that
organization. The economic
ministers of the Outer Seven
countries meeting near Stockholm
agreed in principle on 21 July
to the formation of a little
FTA. Finland's nonparticipation
would eliminate British concern
that Finnish adherence would
prove a political impediment to
association of the smaller group
with the Common ket in a larg-
er FTA. (Concurred 25X1
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CURRENT INTELLIGENCE WEEKLY SUTARY
23 July 1959
During Khrushchev's visit
to Poland from 14 to 23 July
for the 15th anniversary of
Poland's liberation from Nazi
domination, he repeatedly spoke
on topics which have a special
appeal to the Polish people.
The Soviet leader expressed his
approval of party First Secre-
tary Gomulka and his policy of
independence in Poland's in-
ternal affairs. The Polish
party, he said, holds firmly
to the correct course toward
the solution of the problems
of "building socialism" in Po-
land. The Polish people's re-
ception of Khrushchev has been
calm and friendly, but marked
more by curiosity than enthusi-
asm.
Khrushchev in numerous
speeches played on the deeply
ingrained fear of renewed
German aggression, apparently
seeking to assuage the old
anti-Russian feeling by empha-
sizing the German danger. He
reassured the Poles that any
future East-West agreements
would contain the guarantee
that Poland would retain the
former German territories
gained at the end of World War
II. In his speech at Szczecin
Khrushchev appeared to reject
the reunification of Germany
and thus ease Polish apprehen-
sions of a unified Germany on
its Western border. Pledging
Moscow's support not only for
the Oder-Neisse line but also
for the existing border between
East and West Germany "as if
they were Soviet borders,'
Khrushchev declared, "We shall
fight for that frontier
against any foe who may try to
encroach on it.,'
Khrushchev categorically
rejected the thesis that Po-
land occupies a special place
among the "socialist countries"
because of differences in ap-
proach to internal problems.
This thesis, he said, was ad-
vanced by the imperialists in
hope of tearing Poland away
from the "socialist camp" and
sowing distrust between the
Polish people and the peoples
of the other bloc countries.
In. none of Khrushchev's
public utterances has there
been any indication of pressure
on Poland to adhere more close-
ly to the Soviet pattern. When
Gomialka declared in a speech
at Rzeszow that "only we are
responsible for everything
that goes on in this country,"
Khrushchev nodded, while star-
ing impassively at the crowd.
Khrushchev stated in a speech
in Warsaw on 21 July that "one
cannot demand that the Polish
party, in solving any question
of the internal life of Poland,
pursue a policy which coincides
fully with the policy of the
Communist party of the Soviet
Union. Each people must build
socialism and advance toward
Communism by taking into con'
sideration its national, cul-
tural, and ideological peculiar-
ities."
The Soviet leader also en-
dorsed 'Gomulka's policy of
voluntary collectivization of
agriculture, stressing that
while collective farming is.
the best way of organizing farm
work, no one should be forced
into joining a collective farm.
He admitted that the reorgani-
zation of agricultural produc-
tion is a complicated process
and that the USSR itself had
encountered "no little diffi-
culties on this road."
Khrushchev voiced the most
outspoken criticism of the com-
mune system made so far in
public by any high Soviet of-
ficial in a speech to Polish
peasants at a collective farm
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
near Poznan from which Western
newsmen were barred. While he
did not mention specifically the
Chinese communes, Khrushchev
told the Polish peasants the
USSR has found through ex-
perience that communes are the
wrong way to start on the "road
to socialism." The Chinese will
undoubtedly interpret Khrushchev's
comments as implicit criticism of
their communes and will prob-
ably urge that Soviet opposition
to them be kept in private
channelso
Turning to Polish internal
party affairs, Khrushchev struck
t both dogmatists and revision-
ists within the Polish party,
Khrushchev maintained that while
revisionism remains the greatest
danger, the dogmatists who opposed
Gomulka's policies and at the same
time claimed they were good friends
of the Soviet Union were doing
the party great harm. Their
activities could only lead to
this weakening of the party and
provide "nourishing soil for re-
visionists and opportunists>"
Those who oppose the policies
of the party and Gomulka,
Khrushchev declared, if not re-
visionists themselves, are tools
of the revisionists, and con-
stitute a menace to the party.
A threatening statement
in the final communique calling
for the end of the "occupation
regime" in West Berlin, coupled
with a pledge of Soviet and
Polish support for East Germany
in measures it might consider
necessary "to liquidate the
abnormal situation in West
Berlin," was the only specific
pronouncement on the Berlin
problem during Khrushchev's tour,
25X1
FORTHCOMING SOVIET CENTRAL COMMITTEE PLENUM ON AGRICULTURE
The USSR has announced that
a plenum of the central commit-
tee will be held in late Novem-
ber and early December to con-
sider progress under Khrushchev
agricultural programs. It will
probably consider measures to
increase agricultural output
and labor productivity in view
of the extremely ambitious
Seven-Year-Plan goals for
agriculture, the continuing
problem of making further labor
available to industry, and the
harvest results this year, the-
prospects for which now seem no
more than average.
The advance notification of
time and agenda marks the second
time this has been done--the
first was for the June 1959
plenum--and continues the prac-
tice of publicizing central
committee plenary sessions as
propaganda forums for boosting
Khrushchev's programs.
A congress of collective
farmers scheduled for early in
1959 has not been held. It
seems likely that it was post-
poned to await high-level res-
oluti.on of problems of agricul-
tural organization.
Discussion of agriculture
in the central press in recent
months indicates that various
proposals by Khrushchev are
being pushed. With a view to
improving the productivity of
the kolkhoz system, more wide-
spread use of the wage-payment
system has been urged to replace
the system now used by most
kolkhozes> This will make it
easier to put collective farmers
on a strict profit-and-loss basis
and will bring the accounting of
collective farms in line with
that of state enterprises, Addi-
tionally, expansion of the in-
divisible fund--capital assets
of the kolkhoz held jointly by
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
its members--has been cited as
the best source for capital to
improve agricultural production
through mechanization and for
soil and stock improvement.
It will also supply capital
for a progressive construction
program which will gradually
eliminate the differences be-
tween the city and farm through
the rebuilding and consolidating
of villages into "city-like"
communities with modern urban
facilities.: Also to be built are
numerous projects such as
electric power stations, agri-
cultural. processing plants, and
cultural centers. Such building
is to be carried out jointly by
several kolkhozes working through
interkolkhoz agencies.
On organization topics,
the press has noted the possi-
bility of creating collective
farm unions at successive admin-
istrative levels, abolition of
repair-technical stations, and
the restriction of responsi-
bility of the Ministry of Agri-
culture to broad planning and
control functions. The plenum
will probably also 'consider a new
The training program this
year of the 20 divisions of
the Group of Soviet Forces,Ger-
many (GSFG) has not changed ap-
preciably from previous years,
despite the Berlin crisis. All
line divisions are at their
home stations conducting regi-
mental-level tactical training.
Activity during the last two
months has included a large-
scale command-post exercise, a
weapons display, and a ten-day
didisional exercise in June.
The start' of the summer
field-training period was high-
lighted, as it was last year,
by a large display of ground-
forces equipment and demonstra-
tions of its use of two of the
major training areas during the
first ten days of May. The most
significant event was the laying
of a pipeline, without flota-
tion equipment, across the Elbe
River. Mock-ups of American
missiles were 'used as targets
during strafing demonstrations.
River-crossing demonstrations,
including the use of amphibious
equipment, were again stressed
this year. During this period
the line divisions generally re-
mained at their home stations,
while 'tank, artillery, and
SECRET
movement to transfer skilled
chailrmen of leading collective
farms to backward collective
farms in order to bring them
up to a higher standard. Khru-
shchev initiated this movement
in his speech at the June 1959
plenum.
Organizational and admin-
istrative changes in Soviet ag-
riculture are also likely to
be reviewed and appraised at
the plenum. The need to strength-
en collective farms so as to
make it economically feasible for
them to purchase and operate their
own machinery--now that the
machine-tractor stations have
been abolished--has resulted,
through mergersg in a rapid de-
cline in collective farms during
the past 18 months. Khrushchev
stated in March 1958 there were
about 78,000 collective farms
at that time. About a year later,
he indicated the number had
decreased to about 68,000. The
195EI semiannual plan fulfillment
report indicated that the total
number of. collective farms in
the USSR on 1 July 1959 was a=
bout: 60,000.
(Prepared byORR)
FORCES IN EAST GERMANY
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
antiaircraft and engineer de-
tails of battalion size rotated
to' firirig ;ranges land 'field-
training areas.
Most of the six ground
armies have conducted their own
command-post exercises;,since
last winter. During early June
the Soviet Union closed all of
southern East Germany to Allied
military missions and conducted
its largest command-post exer-
cise so far this year. The ex-
ercise was controlled by Head-
quarters, GSFG, and involved
the command and communications
elements from at least five of
the ground armies and their
organic line divisions. It is
believed that there was only
minor troop participation.
From 12 through 22 June,
major elements of the Twentieth
Guards Army left their home
stations in the Berlin area and
conducted a divison-size exer-
cise, including a crossing of
the Elbe River. This exercise
was similar to one conducted by
this army in March 1958.
It is expected that the
scope and tempo of field ma-
neuvers will increase during the
summer, culminating with exer-
cises involving whole armies
during September and October.
After that, about one third of
GSFG's 315,000-man-force--the
throe-year men--will be rotated
home. The next training year
will then commence as their
places are taken by recruits.
RUMANIAN REGIME PLANS TO RAISE WORKERS' LIVING STANDARDS
In a report to a plenum of
the Rumanian party central com-
mittee, First Secretary Gheor,-~
ghiu-Dej announced that the,re-
gime will raise the low living
standard of the workers and
create incentives to help meet
the demands of the new six-year
plan (1960-65). This announce-
ment may also be intended to
mitigate the effects of recent
political repression. The meas-
ure will bring Rumanian condi-
tions more in conformity with
those in. the satellites which
have been able to provide an
increase in the standard of liv-
ing during the last few years.
This program is to be ac-
complished by an average in,,. r;
crease of 10 percent in wages,
price reductions on 2,600 in-
dustrial and food items, income
tax reductions, and an average
50-percent increase in pensions.
Workers in the lower wage brack-
ets will receive the highest
wage increases--20 to 30 per-
cent. Foremen, who will spur
the next productivity drive,
are to receive highest rates
among the better paid groups.
All of these benefits may add
to an increase in real income of
15 percent or more, which would
fulfill the 1960 wage plan in
1959. The need for such drastic
action, however, tends to con-
tradict earlier statements by
Gheorghiu-Dej that the Rumanian
standard of living had increased
26 percent between 1955 and the
end of 1958.
Benefits mentioned in the
announcement are almost entirely
for the urban worker. The pen-
sion increases apply to several
additional categories, but ex-
clude most peasants, who have
yet to be pensioned. Peasants
are told to be content with the
boost in living standards they
received in 1957, when prices
for produce were raised .and
compulsory produce deliveries
were abandoned. These benefits
are undoubtedly exaggerated,..
and additional incentives may
be necessary to counterbalance
the effect on production of the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 19591
hard agricultural line which has
brought about 67 percent of ,
agricultural land into the "so-
cialist sector."
The regime may have trouble
holding the line against infla-
tion after this reform, since
the output of consumer goods in
1959 is unlikely to equal the
increase in real wages, and re-
serve stocks do not appear ade-
quaLte to make up the difference.
Price controls and increased
imports at the expense of in- 25X1
vestments probably will be
necessary if the standard of
living is to rise
BULGARIAN ECONOMIC DIFFICULTIES
The Bulgarian regime, rec-
ognizing. serious shortcomings
in its accelerated.economic pro-
gram, is maneuvering to absolve
itself of blame in the likely
event the 1959 economic targets
are not met. A central committee
plenum on 9 July approved a party
letter calling for nationwide
discussions of problems in the
critical areas of construction,
industry, labor payments, inter-.
naltrade, and livestock produc-
tion prior to consideration by
central committee plenums sched-
uled monthly from October 1959
through February 1960. These
plenums could witness a down-
grading of targets and organ-
izational or personnel changes.
There may be purges or demotions
of individuals considered in-
efficient, handy as scapegoats,
or both.
unemployed by the end of the
year. Both industrial output
and labor productivity will have
to be sharply accelerated, how-
ever, if the 1959 "leap" target
is to be meta
Party First Secretary Todor
Zhivkov on 9 July presented
fragmentary information on the
performance of the economy for
the first six months of the "leap
forward." Industrial production
by midyear had risen 21,5 per--
cent--even higher than the sub-
stantial rise during the com-
parable period of 1958--and
labor productivity 5,4 percent.
By far the larger share of the
increase of industrial output
resulted from additions to the
labor force which, according to
the 1959 plan,. apparently'.
put to work almost all.of-the
The regime has allowed it-
self some flexibility in relat-
ing economic achievements to
goals by maintaining more than
one set of targets. The present
rate growth in industrial pro-
duction, while not sufficient
to meet the present 1959 target,
will permit realization of the
goal!. announced last October to
fulfill the original '.five-year
(1958-62) goal by 1960 or 1961.
In agriculture, "leap" demands
were fora 100-percent increase
in production this year, although
the 1959 plan calls for only a
74-percent increase, and fulfill-
ment by 1960 of the original
five-year-plan goal for 1962
could require as little as a
14-percent increase this year.
The future plenums prob-
ably will have to recognize that
the extreme goals of the "leap"
will not be reached. Since the
"leap" cannot be disavowed, how-
ever, short of a major shake-up
in the party's leadership which
does not appear likely at.this
time, it may be quietly over-
looked in favor of more rational
goals, in the same way that the
more extreme ideological claims
made last November for the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959.
"leap" have been quietly
dropped.'
Perhaps the most signifi-
cant result of the 9 July plenum
was Zhivkov's attempt--by call=
ing for a nationwide discussion
of outstanding problems--to es-
tablish a collective responsi-
bility of the party leadership,
the party rank and file, and the
masses for the probable failure
of the "leap." Despite the
claim that it evolved out of a
"popular upsurge;".there is
little doubt that;the,program:.
is popularly identified with the
politburo and with Zhivkov himself.
ETHIOPIA INCREASES TIES WITH BLOC
Ethiopian Emperor Haile
Selassie's recent visit to the
USSR and Czechoslovakia resulted
in significant agreements with
both countries and may indicate
a modification in his country's
traditional foreign policy or-
ientation.
The Emperor obtained a
$100,000,000 credit from Moscow
umors
persist that a secret protocol
provides for Soviet military as-
sistance for Ethiopia's nascent
territorial army and an addition-
al $7,000,000 for the Emperor's
personal security forces.
Czechoslovakia offered to
deliver capital goods to Ethiopia
on a credit basis and to negoti-
ate economic, cultural, and tech-
nical assistance agreements.
By establishing nationwide
responsibility, Zhivkov would
be protecting both the party
from popular criticism and him-
self in his position as first
secretary from those who could
use the failure of the "leap"
as an argument that he should
be replaced. Such a sentiment
could conceivably. arise from
within the party's ranks, es-
poused by those who reportedly 25X1
are discontented with the "leap"
because of the excessive strains
imposed by its targets.
The :Leaders of the two states
also decided to raise their
respective diplomatic missions
to embassy level, and Czech-
oslovak President Novotny ac-
cepted an invitation to visit
Ethiopia.
the Czech
credit will total 20,000,000
for, among other things, the
purchase of military equip-
ment and the construction of
a munitions factory. The
only previous Czech aid to
Ethiopia was a $Z,000,,000 line
of credit extended last year
for the purchase of hos-
pital. equipment and supplies.
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rwr
CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1955)
WEST AFRICAN MEETING
The first meeting of the
leaders of West Africa's three
independent nations--Liberia,
Ghana, and Guinea--in Sanniquel-
lie, Liberia, ended on 20 July
with agreement in principle on
a proposed Community of Inde-
pendent African States to be dis-
cussed at a larger conference in
1960. A nine-state conference
of foreign ministers is'to be
held at Monrovia in' early August;
it is expected to consider,a
number of controversial prob-
lems, such as the Algerian.and
Cameroun situations,
President Tubman of Liberia,
Prime Minister Nkrumah of Ghana,
and President Tourd of Guinea
met in an effort to reconcile
their opposing views. Tubman,
who distrusts the militant Af-
rican nationalism espoused by
Nkrumah and Tourd,has favored
a loose association of states
cooperating in economic, cul-
tural, and health matters but
preserving their own political
identities. Nhrumah, on the
other hand, envisions a union
under one flag, with common for-
eign policy and defense arrange-
ments.
The discussions,the initial
sessions of which were reported
to be chilly and constrained,ap-
pear to have resulted in a Tub-
man victory and a setback to
Nkrumah. Tourd, who reportedly
desires to negotiate an agree-
ment with Liberia to permit the
shipment of Guinean iron ore
through Liberian ports, gave Tub-
man. increasing support as the
talks progressed. Tubman's
keynote address stressed that
any definitive arrangement
must await the independence
in 1960 of Cameroun, Nigeria,
and Togo--all of which are now
governed by moderate groups.
A declaration issued by
the three leaders after their
talks proposed a larger con-
ference next year to organize
a "Community of Independent Af-
rican States" to be based on
principles which clearly reflect
Tubman's concept of a future Af-
rican organization, Each state
would retain its own constitutional
framework and national identity and
control over its foreign policies.
All African states would be eligible
for membership on gaining inde-
pendence, The principal avowed
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 195EI
No, ruquellie
roo NIGERIA
me -CAMEROUws
*Yaounde
purpose of the Community would
be to help dependent African ter-
ritories obtain early independ-
ence.
The three leaders strongly
criticized the proposed French
nuclear tests in the Sahara,
condemned racial discrimination
by South Africa, and proposed
that a meeting of the foreign
ministers of nine independent
African states--expected to be-
gin on 4 August in Monrovia--
consider recognition of the Al-
gerian provisional government.
The August meeting may create
problems for the West, particu-
f
larly France. Guinea, and even
Liberia, may recognize the Al-
gerian rebels.
A Cameroun government-in-
exile may be proclaimed by exiled
nationalist extremists, who hope
to receive some diplomatic sup-
port from the independent African
states.. The extremists seek re-
new-ad pressure on the part of
the African nations for further
examination of the Cameroun situa-
tion in order to obtain new elec-25X1
tio:ns before the Cameroun be-
come independent next Janu-
ary.
IRAN FACING MORE ECONOMIC STRAINS
A sharp rise in the cost
of living in Iran, sparked prin-
cipally by an extreme increase
.in food prices earlier this year,
is causing Tehran growing con-
cern. The price increases were
particularly severe in urban
centers, reflecting in part
heavy livestock losses during
the especially harsh winter and
the initial inflationary conse-
quences of last year's tremen-
dous expansion in government
spending.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
The situation has been made
worse by the anticipated loss
of $26,000,000 in expected oil
revenues resulting from cuts in
oil prices. Although the con-
sortium of Western companies
operating Iran's nationalized
oil industry has increased out-
put sharply in an effort to ease
the loss of revenue, production
this year probably will fall
short of the 1,000,000 barrels-
a-day average the government
feels is essential.
On the labor front unem-
ployment is high and a serious
strike in the oil fields was
averted only by a government-
sponsored wage and fringe bene-
fit settlement. The basic causes
of discontent remain.
The present crisis reflects
a number of short-term difficul_
ties, including low agricultural
output and excessive land specu-
lation for which the government
is planning administrative reme-
dies. The Shah, for example,
has recently made several state-
DEVELOPMENTS IN
The approaching Philippine
provincial and senatorial elec-
tions in November have intensi-
fied internal strains within
both the governing Nacionalista
party and the newly formed op-
position coalition of the Liber-
al and Progressive parties.
Nacionalista leaders are accus-
ing President Garcia of trying.
to handpick candidates for pro-
vincial governorships as well as
the party's ticket for the 8 out
of 24 Senate seats to be con-
tested. Several prominent Na-
cionalistas, including two sen-
ators up for re-election, are
openly at odds with Garcia. Al-
though no major split in his
party is imminent, Garcia re-
portedly fears that the old
ments that the government must
accept full responsibility for
.controlling prices. He and
other Iranian officials seem to
be unaware, however, that the
basic cause of the rapidly grow-
ing inflationary pressures is
the rise in government spending
at a rate faster than the growth
in real output.
During Iran's last fiscal
year, government spending in-
creased 32 percent, and this
year an additional 20-percent
increase has been budgeted.
Since government revenues will
fail to meet planned expendi-
tures, Tehran probably will re-
sort; to deficit financing, thus
increasing the upward pressure
on prices. The real over-all
deficit in the current budget is
about $124,000,000. The Soviet
Union has recently included
in its propaganda criticism of
the inflationary symptoms in
Iran, linking them directly
to American-supported mili 25X1
tary expenditures.
guard is maneuvering to support
another candidate for the 1961
presidential nomination.
At the same time, opposi-
tion, unity is threatened by the
rival political ambitions of
coalition leaders and by an_al-
most total lack of Liberal-Pro-
gressive cooperation on the local
level. Under pressure from its
old-guard wing, which opposes
any concessions to the Progres-
sives, the Liberal party execu-
tive committee has unilaterally
announced a coalition senatorial
slate-which includes two Progres-
sives, one of the two. disaffected
Nacionalista senators, and a
weak group of Liberals.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
In response to the Liberal
move, Progressive leaders are
discussing with dissatisfied
younger Liberals and anti-Garcia
Nacionalistas the possibility
of a "third-force" ticket. The
Progressives apparently hope
these discussions will force
changes in the Liberal party
ticket before the filing dead-
line on 10 September. A Liber-
al-Progressive coalition col-
lapse, however, would seriously
reduce opposition chances of
making headway against the well-
entrenched Nacionalista party
machine.
Although the campaign will
be fought primarily on domestic
issues, including charges of
inefficiency and corruption
leveled against the Garcia ad-
ministration and the possible
inflationary effects of his ef-
forts to stabilize the peso, it
may also affect the course of
current diplomatic talks on
American bases.
ecution.
blood," while the guards are
protected from Philippine pros-
Considerable progress has
recently been made toward an
agreement on US relinquishment
of unneeded base lands, but the
sensitive issue of jurisdiction
over American troops remains`
unresolved. Ambassador Bohlen
has warned that unless early
agreement is reached, preoccupa-
tion with the campaign and the
stimulation of nationalist feel-
ing may again jeopardize the
negotiations. This danger is
pointed up by the current pub-
lic charges of a local prosecutor
that petty thieves caught by
Filipino guards at a US air
base have been "shot ' in cold 25X1
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CURRENT ~IGENCE WEEKLY SUMMARY
23 July 1959
PATTERNS AND PERSPECTIVES
SOVIET PIPELINES
The USSR is seeking to in-
crease oil exports to obtain ad-
ditional foreign exchange neces-
sary for the purchase of equip-
ment and technology required to
achieve the Seven-Year- Plan goals
in several basic industries.
The current expansion of the So-
viet oil pipeline system which
taps the large oil reserves of
the Urals-Volga region will not
only supply increasing bloc con-
sumption but will also permit
increased oil exports.
The most significant ex-
tension of the pipeline sys-
tem is west from the Urals-
Volga region. This extension
will serve refining centers in
the European USSR and the Euro-
pean satellite countries. It also
will include pipelines to the
Baltic, where a large petroleum
base is being developed, in or-
der to facilitate export ship-
SOVIET OIL PIPELINES
Existing oil pipeline
Planned or proposed oil pipeline
Possible alternate oil pipeline
Crude oil region
Selected refinery
AND OIL EXPORTS
ments to the free world, principal-
ly the countries of Western
Europe.
Reserves and Production
The Urals-Volga region,
which has estimated proved re-
serves of 22 billion barrels of
crude oil, is the largest known
oil region in the USSR, account-
ing for more than 75 percent of
the estimated Soviet reserves.
Soviet reserves of 29 billion
barrels compare with American
reserves of 33 billion barrels,
but such reserves are dwarfed
by the 174-billion-barrel re-
serves of the Middle East coun-
tries.
Soviet proved reserves are
growing rapidly, not only from
new discoveries but also from
the further exploration of known
deposits, and may considerably
Rome Belgrade RUMANIA
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CONFr TIAL
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r , lBerlin* c
uEsr ( EAST
GERMANY
BAI"OIC W
_Klaipeda
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BLACK SEA Tuapsbit6 GroZnyy
Penes" Kuybyshev
Saratoy
PART III PATTERNS AND PERSPECTIVES Page 1'of 14
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
exceed American re-
serves by 1965.
The USSR pro-
duced 2,300,000 bar-
rels of petroleum per
day (b/d) in 1958
and plans to increase
production to 4,700,-
000 b/d during the
Seven-Year Plan. Ap-
proximately 68 per-
cent of the 1958 pro-
duction came from
the Urals-Volga re-
gion.
1958 1965,
_ X19
B6 ~ X00 - TOTAL AVAILABLE 366. -,4
,7
C NSUMPTION
470 2, 40 %CIVIL
Increasing Exports
While the USSR expects to
double the rate of production
of crude oil during the Seven-
Year Plan, domestic consumption
during this period is not ex-
pected to increase as much.
Thus surplus production and more
efficient refining practices
are expected to give the USSR
an exportable surplus of about
960,000 b/d by 1965--more than
three times the 1958 level.
. Exports of petroleum to
the other countries of the Sino-
Soviet bloc are expected to ac-
count for about 400,000 b/d in
1965, leaving 560,000 b/d avail-
able for export to the free world.
Allowing for Soviet deliveries
elsewhere in the free world,
the USSR by 1965 could, from its
E, ?RTS
EUROPE
SECRET
own resources, sell Western Eu-
rope 400,000 b/d of crude, 8
percent of the estimated minimum
5,000,000 b/d Western Europe
will need at that time.
Even this small share of
the European market could, through
uneven distribution, affect some
Western European countries sub-
stantially. In 1958 the USSR
supplied 75 percent of the oil
imports to Iceland and over 50
percent of those to Finland. So-
viet oil available for export
to Western Europe by 1965 is ex-
pected to be more than 25 per-
cent of the import requirements
of the Scandinavian and Benelux
countries and West Germany--an
area which could readily be
served from the export base
being; developed at Klaipeda
(Memel). The USSR could gain a
dominant position as
the oil supplier of
one or more of these
countries.
In 1958, the USSR
sold 122,000 b/d worth
$131,000,000 to West-
ern Europe. If the
price of petroleum is
maintained at the 1958
level and if Soviet
exports of petroleum
to Western Europe in-
crease in 1965 to 400,-
000 b/d, the value of
this trade to the
USSR will be $430,-
000,000 by then.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
.23 July 1959
Plans for Pipelines
Pipelines will not only
permit increased deliveries but
also will reduce transport costs
and thus the over-all costs of
crude oil and products. One
westward branch will extend a
line to Poland and East Germany
and another line to Czechoslo-
vakia and Hungary. Another,
branch, terminating at Klaipeda
on the Baltic Sea, will handle
exports to. Western Europe and
the Scandinavian countries, Both
of these branches may be tied
in with lines servicing the
western USSR.
Completion dates depend
largely on the extent of West-
ern support available; the USSR
is now seeking engineering ad-
vice and pipe from Sweden for
construction of at least that
branch of the system designed to
supply oil to Western Europe.
The quant,.,ties of petro-
leum to be transported by the
new branches of the pipeline
system are large enough to jus-
tify, on an economic basis, the
use of large pipe, more than
24 inches in outside diameter.
However, the United States, the
only country with enough capacity
in large-diameter piping to
meet requirements, prohibits
the export of large-diameter pipe
to the bloc. Consequently the
USSR may be planning more than
one parallel line of 20- or 24-
inch pipe. Western European
countries have already been ap-
proached for pipe of these di-
ameters,
The Klaipeda line from the
Urals-Volga area could be com-
pleted in less than three years
with Western equipment and tech-
nical aid. If forced to rely
on its own resources, however,
SECRET
the TJSSR will require four to
five years to construct a line
from Tuimasy in the Urals-Volga
area to Klaipeda. There is no
evidence that construction on.'
such a line has begun, but there
is a depot at Klaipeda which was
in partial operation in 1958.
_= rr4
iER 9
SAUDI
ARABIA
NU AAIT
DISTRIBUTION OF PROVED WORLD
OIL RESERVES
60
EUROPEAN
SATELLITES
IIIAO
AND
COMMUNIST
25
CHINA
32
)
-
IIIAN
33
USSR
Z9
MIDDLE
EAST
OTHER FREE SINO-SOVIET
WORLD BLOC
As a time-saving alterna-
tive, the USSR is considering
an extension of the pipeline al-
ready under construction to
Bryansk to service the depot at
Klaipeda. Such a line could be
completed by the end of 1961--
even without Western equipment
and technical aid.
The USSR plans to have the
branch now planned to service
East German, Polish, Hungarian,
and Czech refineries in opera-
tion at a 30,000 b/d rate in
1965. The satellites are
largely responsible for pro-
ducing or procuring the materials
necessary for the construction of
the portions of the line with-
in their boundaries and are also
seeking.some material for this
construction from the West.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
FRANCE'S DEFENSE MOBILIZATION PROBLEMS
France is undertaking a
reorganization of its defense
system and a modernization of
its armed forces in line with
new French strategic and tac-
tical concepts. Military lead-
ers are taking steps to con-
vert French divisions into
small, highly mobile striking
forces designed to combat
"brush-fire" wars either with-
in the French Community or,
with a view to De Gaulle's de-
mands for a greater role in
Western global strategy, any-
where in the world. This plan-
ning is more in keeping with
national than with NATO require-
ments. While the reorganiza-
tion is well suited to French
needs in North Africa, the pro-
tracted and costly Algerian
fighting pre-empts funds and
resources which would be re-
quired for the modernization
program.
Reorganization
A comprehensive overhaul-
ing of the entire French defense
structure has been accelerated
under De Gaulle in terms of the
missions, organization, and
equipment of the individual
armed services. The defense
reorganization embodied in de-
crees issued last January rests
on three premises: (1) "defense"
permeates every aspect of na-
tional life; (2) the distinc-
tion between states of "peace"
and "war" is dwindling; and (3)
the executive must have suffi-
cient authority and a suffi-
ciently flexible defense or-
ganization to deal with what-
ever form a national threat may
take.
A new category of national
"defense service," supplementing
normal active military service,
was created to meet emergency
needs not of a strictly military
nature. During a general mobili-
Zat:ion or partial "alerts,"
property can be requisitioned
and citizens drafted for service.
The Defense Committee,
closely resembling in composi-
tion and responsibilities the
National Security Council of
the United States, has been es-
tablished to determine defense
policies for France and the
French Community. The
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959)
Constitution of the Fifth Re-
public has enhanced the presi-
dent's responsibilities in de-
fense matters, and the military
has direct access to him. The
chief of staff, General Ely,
now reports directly to the
president and the premier rath-
er than through a defense min-
ister.
Nationalism Conflict
Considerations of national
prestige seem likely to steer
France's modernization of its
armed forces away from common
Western defense concepts em-
bodied in NATO. De Gaulle is
more interested in achieving
self-sufficient national armed
services oriented toward both
the European and global in-
terests of France.
The French desire for a
nationally controlled nuclear
deterrent has led to increased
spending on items duplicated
within NATO. Thus France has
persisted in pushing a costly
nuclear weapons program; it is
developing an attack-bomber for
carrying nuclear weapons, as
well as missiles adapted to
nuclear warheads, rather than
concentrating on badly needed
all-weather interceptors; and
it has sacrificed some of the
submarine and escort vessel
construction desired by NATO in
favor of an expensive new air-
craft carrier program.
A more serious divergence
of views is apparent in French
ideas on army reorganization.
Citing their experience in In-
dochina and Algeria, French
Armor planners now stress the
desirability of replacing the
present French NATO divisions
in Europe with small, highly
mobile ground striking forces
capable of intervening rapidly
anywhere in the French Community
or at remote points where "brush
fires" warrant attention. These
striking forces would be backed
up by large local reserves capa-
ble of rapid mobilization and
trained primarily to combat an-
ticipated Communist guerrilla
and sabotage action.
Both Marshal Juin, the
"voice of the army," and air
force General Challe, the su-
preme commander in Algeria ,have
hailed the French Army organi-
zation and tactics for opera-
tions against guerrillas there
as patterns which Western armed
forces should adopt to prepare
for the most likely form of
hostilities. This runs counter
to present NATO planning in its
tendency to stress national mis-
sions and national control.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
Modernization vs. Algeria
Overshadowing French mod-
ernization plans for the indi-
vidual armed services is the
detrimental effect of the four-
and-a-half -year-old Algerian
war. The. army has suffered
from attrition of arms and
equipment and from the dispers-
al of the French NATO-committed
divisions from Europe into
small units for garrisoning and
conducting operations against
guerrilla groups. The fact
that approximately half of
France's army--including 10 of
its 14 NATO-committed divi-
sions-~-is 'in Algeria would seri-
ously disrupt full French mo-
bilization. Major French Army
participation in large-scale
NATO maneuvers has virtually
ended.
French Air Force readiness
in Europe has been affected ad-
versely as a result of thewith-
drawal to Algeria of many pi-
lots and technicians. The
military aircraft industry has
been kept going primarily by
foreign orders, and several
promising aircraft research
and development programs have
been severely cut back or elim-
inated, The navy has been the
least directly affected of all
the services, but budgetary
cuts have crippled its new
construction programs.
Some senior
pro-NATO officers apparently
fear France risks having
outmoded armed forces'.in several
years, both because of inade-
quate funds for new weapons
development and production,and
because its army will not be
organized in pentomic divisions
for nuclear warfare
Economic Aspects
The conflict of priorities
between modernization and the
Algerian war and the dispute
over the form modernization
should take are heavily influ-
enced by economic conditions.
The cost of replacing worn and
obsolete equipment and of es-
FRANCE: DEFENSE EXPENDITURES"
_MI 0 'LARS
(CONVERTED AT 493.7 FRANCS TO THE DOLLAR)
2,975
37,498
3,160
3,443(EST)
7.1
41,396
47,398
OEEC DEFINITION
g3 JULY 1`559
sential services such as com-
munications has risen sharply
since 1957. The price increase
for naval materiel, for example,
is put at approximately 20 per-
cent. Rising costs particularly
affect the replacement in Al-
geria of US-supplied equipment,
much of which now is becoming
worn out more rapidly than en-
visaged originally.
The 1958 and 1959 defense
budgets include the cost of
Algerian operations which for-
merly were covered by an "extra-
ordinary" defense budget. This
budgetary consolidation, al-
though technically desirable,
has in practice facilitated in-
ternal transfers of funds to
the Algerian campaign at the
expense of maintenance, coh-
struction, and research and de-
velopment.
Even if major hostilities
in Algeria ceased, a consider-
able portion of the armed for-
ces is likely to be retained
there for years to maintain
order and continue the public
works and administrative burden
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
undertaken by the army; More-
over, the demands of the Con-
stantine Plan for the economic
development of Algeria will
bear directly on the amount of
funds available for defense.
The plan will be increasingly
costly during the next five
years, and barring expanded
hostilities, will probably'de-
flect resources which might
otherwise go to a major expan-
sion of the :defense plant.
De Gaulle's stabilization
program has been more success-
ful than anticipated'. If the
gains can be consolidated. and
the economy further expanded,
the growing gross national prod-
uct (GNP) promises to make in-
creased funds available for all
government programs. As in re.-
cent years., however, the govern-
ment may choose to channel a de-
creasing percentage of GNP to de-
fense needs. Moreover, the Al-
gerian war continues to
take
priority over armed forces mod-
ernization,
and pressures which
would orient
modernization
toward purely
national
rath-
25X1
er
more
than
likely
NATO
to
goals
grow
appear
than
IMPLICATIONS OF SPAIN'S ECONOMIC STABILIZATION PROGRAM
The Franco regime is taking
a calculated risk with the pro-
gram recently adopted to reorient
and stabilize the Spanish econ-
omy. The program on 20 July
brought Spain full membership
in the organization of European
Economic Cooperation (OEEC) and
extensive financial assistance
from the United States and in-
ternational lending organiza-
tions, The Spanish public, how-
ever, fears that the stabiliza-
tion program will aggravate
rather than remedy the present
economic situation and that the
austerity called for by the plan
may have serious political re-
percussions. Failure of the
program would probably set off
a new inflationary cycle and
cause widespread popular unrest,
posing a serious challenge to
Franco's position.
The Stabilization Program
Since mid-February Spanish
Government officials have ne-
gotiated with experts of the
OEEC and International Monetary
Fund (IMF) on a program designed
to help Spain achieve internal
financial stability, redress
its deteriorating balance-of-
payments position, and qualify
for full OEEC membership. The
program calls for a reduction
in public expenditures, restric-
tions on the extension of bank
credit in the private sector,
elimination of price and trade
controls, removal of curbs on a pri-
vate, foreign investment, and a. unified
exchange rate for the peseta--
which has been devaluated from
42 to 60 to the dollar.
Spain has agreed to liberal-
ize its imports gradually, free-
ing most imports of raw materials
and foodstuffs from quota re-
strictions,and to convert by
stages most of its trading ar-
rangements with OEEC countries
from a bilateral to a multilateral
basis.
In return for these reforms,
Spain isto receive a "package"
of outside aid to help it meet
balance-of-payments needs' and
to bolster confidence in the
currency during the first six
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
months following liberalization.
Of a total of $245,000,000, the
IMF will supply $75,000,000,
the OEEC $100,000,000, and
American banks $70,000,000. The
United States will supply an
additional $130,000,000 in the
form of defense support ($40,-
000,000), surplus agricultural
commodities ($60,000,000), and
loans from.the Export-Import
Bank ($30,000,000)0
Official Government Attitude
Spain's reform program is
a tacit admission that its
previous economic policies have
failed to halt inflationary
pressures and that a broad re-
orientation of the economy is
now necessary to hasten Spain's
adjustment to conditions pre-
vailing elsewhere in Western
Europe--particularly the trend
toward freer trade and full
convertibility of currencies.;
The regime has not yet
moved to inspire popular con-
fidence in the program, however,
and has not yet issued a clear
statement on the program's
objectives and implications.
Franco himself, although said
to be fully in favor of the pro-
gram, has avoided a public com-
mitment of support, perhaps to
escape personal blame for hard-
ships it. is likely to impose on
industry and labor.
Recent pronouncements on
the stabilization program by
Commerce Minister Ullastres and
Finance Minister Navarro Rubio
have contained inconsistencies
and omissions and have side-
stepped the more controversial
aspects, thereby tending to
increase public apprehension.
On 1 June Ullastres stated that
stabilization could be achieved
without harsh repercussions on
production and employment, and
that the program would make
better living standards possible.
He denied that internal demand
would drop, although he antici-
pated some price increases and
economic dislocations, and made
no direct promises of aid for
firms faced with reduced sales.
Both ministers have been
less than candid regarding credit
curbs. Ullastres has publicly
denied that private bank credit
is now being restricted. Rubio
stated on 9 June that during
19591, credit would not be reduced
below the 1958 level but would
be expanded by $262,000,000 in
the private sector. This figure
actually would represent a re-
duced rate of expansion, however,
since in 1958 credit grew by
$500,000,000.
Reaction of Economic Groups
Banking and business cir-
cles are fearful that the pro-
gram's austerity measures will
slow rather than stimulate eco-
nomic activity. They are par-
ticularly concerned that credit
curbs will put even relatively
efficient enterprises out of
business and, force a general
curtailment of production. These
groups point out that during the
past year many firms, faced with
declining sales and yet obliged
to keep permanent workers on
the payroll, have accumulated
large inventories and eliminated
overtime work. Restrictions
on credit are likely to force
these manufacturers to suspend
operations. A temporary short-
age of funds has already obliged
a number of firms to suspend
payments to creditors.
Labor, which has increas-
ingly, felt the pinch of rising
living costs since the last
general wage boost late in 1956,
is apprehensive of further re-
ductions in overtime pay and
further layoffs of temporary
workers. Such cutbacks, togeth-
er with the government's opposi-
tion to general wage increases
despite rising prices, led to
strikes in depressed industries
in the Barcelona area in May.
'The success of the stabi-
lization program will depend
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
largely on the government's abil-
ity to resist pressure from
various sources for a modifica-
tion of its "austerity" aspects
and a return to deficit financ-
ing- as an easier and more popu-
lar approach to industrial de-
velopment. Refusal of the gov-
ernment to continue with any of
the specified reforms would
probably bring a threat from the
.IMF and the,OEEC to withhold
further financial aid.
The American Embassy in
Madrid feels the program has
too great an imbalance between
expenditures in the public
and private sectors of the econ-
omy. With a'ceiling of $1.905
billion imposed on 1959 public
expenditures--an increase of
$119,000,000 over the amount
spent in 1958--and private in-
vestment expenditures expected
to decrease from one billion
dollars in 1958 to about $762,-
000,000 as a result of credit
curbs, the belt tightening is
all in the private sector. The
embassy points out that the cut
in private 'sector .expenditures
may create dislocations unless
austerity measures in some-areas
are combined with measures to
stimuate demand for current pro-
duction'of other areas
Too sharp effects on the
private sector, such as reduced
sales, cuts in overtime, further
layoffs, and a sharp rise in
prices, would probably force the
government to scuttle the pro-
gran and grant a general wage
increase. The resulting new
inflationary cycle would ag-
gravate hostility to the regime
among opposition groups, labor,
and small businessmen. Any
indication that the country was
approaching economic chaos could
well impel Franco's main props--
the army, church, big bankers,
industrialists, and landowners--
to withdraw their support. Seri-
ous popular unrest might impel
top military leaders to seek 25X1
Franco's removal in order to
forestall a complete collapse
of public order.
SOVIET ARCHITECTS TAKEN TO TASK
A dispute'concerning archi-
tectural design in the Soviet
Union has emerged in the Soviet
press for the first time since
the 1954-1955 period, when Khru-
shchev condemned the elaborate
style of Stalin's day and sup-
ported'the standardized func-
tional designs which character-
ize Soviet architecture today.
Soviet architectural theoreti-
cians evidently are trying to
find some way to reconcile the
regime's desire for inexpensive
standardized styles with the
need for individual expression
felt by many architects.
The disagreement has appar-
ently become important enough
for the regime to issue indirect
warnings that architects must
remain within specified bounds.
The May issue of Architecture
USSR directed architects to
stop "contemplating Western
styles" and work out a "truly
scientific" style, and Khrushchev
took architects to task in his
speech at Kiev the same month.
The two sides of the dis-
pute are sharply illustrated in
two recent issues of the Soviet
architectural journal, one in
May which is devoted entirely
to the dull standard construc-
tion endorsed by the state,
whereas the March issue features
imaginative sketches of both
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23 July 1959
DESIGN PRESENTLY DESIGN BY STUDENT OF
ENDORSED BY MOSCOW ARCHITECTURAL
REGIME .-FROM JANUARY ARCHITECTURE USSR INSTITUTE FROM MARCH ARCHITECTURE USSR
'30626 2A
housing and industrial construc-
tion by architectural students
in Moscow. These designs would
be considered unusual and ex-
pensive in the West.
The May issue scores the
error of "finding the highest
form of architecture in the im-
perialist countries" and the
failures of some designers to
incorporate the views of Marx
and Lenin in their efforts. The
line is sharply drawn between
what can and cannot be done.
Soviet architects and builders
are urged to study present-day
foreign experience in the de-
velopment and use of advanced
methods and materials in con-
struction, but are also told
"no one at any time has directed
Soviet architects to adopt the
styles and artistic qualities of
23 JULY 19b9
contemporary Western architec-
ture.
This recent attack on West-
ernism is focused on a Soviet
work entitled "The Basic Theory
of Soviet Architecture," pub-
lished in late 1958. Despite
the author's cautious approach
in praising certain Western de-
velopments and in stating that
something could be learned from
the West, he is attacked in a
heavy-handed way in Architecture
USSR by a fellow architect o -
vlouisly stating the party's
views.
A more immediate source of
annoyance to the Soviet regime
than the theoretical study, how-
ever,, may well be the contents
of the March 1959 issue of Archi-
tecture USSR. That issue was
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23_ July 1959
PRESENT DESIGN
dominated by contemporary archi-
tectural designs of apartment
houses and individual houses
drawn up by architectural stu-
dents, and it included some in-
stitutional and industrialstruc-
tures closely resembling contem-
porary Western designs.
This presentation contrasts
sharply with most past issues
of this journal. In the first
part of the February. issue, for
example, there were sketches
of apartment houses with asbes-
tos-cement walls--the material
used in the World War II tempo-
rary buildings in Washington--
and the January issue featured
the usual sketches of block and
panel construction. In the past;,
gram, the cost of which is al-
ready exceeding plans. Speak-
ing on construction in May,.
Khrushchev said, "Many of. our
architects still do not under-
stand fully the tasks facing
them. They do not always,give
good advice." During his tour
of the American exhibit under
construction in Moscow, he dis-
played interest in the construc-
tion techniques being used,
particularly those for the.
geodesic dome of the central
pavilion.,
the appearance of contemporary
designs in Architecture USSR
has coincide with special oc-
casions, such as the World
Festival of Youth and Students
held in Moscow in 1957 and the
Congress of the International
Union of Architects, also in
Moscow, in 1958. It is possible
that the Brussels Fair provided
the stimulus for the March 1959
issue.
That issue was undoubtedly
objectionable to the more con-
servative faction of Soviet ar-
chitects. Khrushchev.apparent-
l.y felt it necessary.to warn
architects indirectly not to
gaze longingly at Western de-
signs when every effort should
be made to carry out the USSR's
present large-scale housing pro-
Khrushchev has had to deal
with architects before.. He took
strong measures in 1954 and 1955
to subdue certain architects
who were accused of violating
the party and government line.
Then, as now, the line called
for the simplification of de-
signs in order that buildings
would be more functional,cheaper,
and suitable for industrial
methods of construction, al-
though the line then represented
a step toward Western practice
and away from the old-fashioned
ornateness of Stalin's era.
The earlier dispute reached
a peak at the Builders'. Confer-
ence of December 1954, when
Khrushchev outlined his position
on the issue. Following the
general adoption of his recom-
mendations, a meeting of archi-
tects was held in the fall of
195;5 during which there was con-
siderable feeling expressed on
the part of a group of undetermined
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CURRENT INTELLIGENCE WEEKLY SUMMARY
23 July 1959
size which opposed parts of the
scheme--apparently those parts
which confined them to the job
of grinding out standardized de-
signs. In a decree of November
1955, extravagances in architec-
tural design and construction
were cited as being deviations
from established Soviet policy.
Leading architects were dis-
missed, others sharply repri-
manded, and all design organi-
zations sternly warned to ad-
here to the party line.
The main target of the de-
cree was unnecessary expendi-
tures on exteriors of buildings,
especially housing in Moscow.
"Millions of square meters of
housing" could have been built
with the resources used in the
construction of unessential
columns, cornices, and towers,
it was stated. Architects were
instructed to concentrate on
providing more living area and
to work out designs suitable
for mass production techniques.
Models of public buildings shown
at the Soviet exhibit in New
York nonetheless show that, de-
spite criticism, these same fail-
ings of Soviet architecture per-
sist.
Although some architects
undoubtedly chafed at such
assignments, until recent
months there had been no sign
that disagreements between
the state and architects were
again of significant pro-
portions. The recent intensi-
ty of the discussions con-
cerning architectural policy
may be related to the fact
that the present expanded
housing construction program
is apparently scheduled to
level off at a plateau after
1960. Since it would take
Soviet builders several years
to develop the techniques re-
quired for construction along
contemporary lines, certain
architects may be lobbying
for consideration of these
designs now n
No significant shift to
contemporary designs could be
contemplated seriously before
1960, however, if then, since
the present big push in hous-
ing construction is under way
and building costs are not
being reduced as planned. Shifts 25X1
to contemporary designs would
increase costs substantially
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