CENTRAL INTELLIGENCE BULLETIN - 1961/04/19

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02001987
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 22
• Document Creation Date: August 14, 2020
• Document Release Date: August 27, 2020
• Publication Date: April 19, 1961

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19 April 1961
Copy No.
CENTRAL
INTELLIGENCE
BULLETIN
LIG
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19 April 1961
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CENTRAL INTELLIGENCE BULLETIN
CONTENTS
1, USSR: Ithrushchey implicitly links Cuba to Laos in
letter to President. (Page t)
2. Watch Committee Conclusion on bloc reaction to Cuban
situation. (Page tt)
3. Cuba. (Page tit)
4. Laos. (Page v)
5. Congo: Kasavubu's agreement with UN to reorganize
Congolese Army apparently made independently of
Mobutu. (Page vt)
6. USSR: Soviet gold sales. (Page vt)
7. Yugoslavia: Regime shows confidence. (Page vt)
8. Austria: Business interests again urge recognition of
Communist China. (Page vii)
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CENTRAL INTELLIGENCE BULLETIN
19 April 1961
DAILY BRIEF
USSR-Cuba-Laos: The first official Soviet pronounce-
ments on the Cuban situation foreshadow a massive prop-
aganda and diplomatic campaign to mobilize world opinion
against the US and generate alarm over the consequences of
the fighting in Cuba. While the Soviet leaders will not hes-
itate to make maximum political capital from Cuban devel-
opments, neither Khrushchevis letter to the President nor
the official government statements goes beyond the general
warning that "we will extend to the Cuban people and its gov- 0
ernment all the necessary aid for the repulse of the armed
attack on Cuba." 1Chrushchev's letter, however, implicitly
links the Cuban situation to Laos by warning that "in general
it is impossible to carry on affairs in such a way that in one
area the situation is settled and the fire is put out and in an-
other area a new fire is lit." Although the Soviet leaders prob-
ably will be careful to avoid any commitments to specific
counteraction in Cuba, Khrushchev's letter suggests that
Moscow may continue to stall on cease-fire arrangements
in Laos and may sanction increased military pressure against
the Vientiane government. The Soviet Government statement,
appealing to all UN members to "render all necessary aid"
to Cuba and demanding that the UN General Assembly urgent-
ly study the "aggressive actions" of the US, was followed by
the Soviet resolution along the same lines presented in the
UN yesterday evening.
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41.
Watch Committee Conclusion:
ahe Watch Committee at a special meeting on 1 April
reached the following conclusior_g
jtn connection with the Cuban situation, the Committee
met to review Sino-Soviet bloc military posture and, in par-
ticular, to discuss a reported alert of East German and Polish
force

recall of personnel from leave, and to "a battle alert" and
mentioning the Cuban situation. The first,
is probably unrelated to bloc reaction to the Cu-
ban situation; the other, cannot
be assessed, and there is no way to determine whose forces
the operators are discussinzj7
abnormalities have been noted in the posture of Soviet
and other bloc military forces. A condition of communications
readiness in bloc forces can be expected, as has been the case
in past periods of international tensio_
as an adjunct to Soviet political -efforts in the UN and else-
where, it would be characteristic of the bloc to raise fears of
spreading hostilities. Although we have no information to date,
the bloc may in addition harden its position noticeably in vari-
ous areas in reaction to the Cuban situation. We do not believe,
however, that the Cuban situation in itself is likely to lead to
the overt employment of bloc forces in Laos or to bloc actions
in other parts of the world that would, in the bloc's view. in-
volve serious dancer of major hostilitiei9
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610,1193
ISLE OF:
PINES
CUBA
SELECTED ROAD
� SELECTED RAILROAD
AIRFIELD (6000 ft. or over.)
UNCLASSIFIED
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*Cuba: (Information available as of 0430 EST) Fidel Castro's
forces, supported by air, tanks, and artillery, are hitting hard
against the anti-Castro fighters in southern Las Villas Province,
and the next day or two will be critical ones. according to a re-
port from one observer, Soviet-type MIG aircraft were used
against the anti-Castro landing forcq
There is still no information of a general Cuban uprising,
upon which anti-Castro forces that landed in Cuba on 17 April
presumably had counted for assistance. The Castro govern-
ment continues to maintain silence on the situation in the battle
area. The regime is, however, stepping up its moves to arrest
units in Las Lam and Camaguey
actual or potential anti-Castro elements,
provinces to "search churches, convents, and religious colleges
in an orderly manner," arresting all "counterrevolutionaries."
On 18 April the Cuban national radio network reported the ar-
rest in Havana of the Roman Catholic auxiliary bishop of Havana
Province, long one of the church's most outspoken critics of the
Castro government. Another 18 April broadcast stated that
Castro's ex-Minister of Agriculture Humberto Son i Mann, who
allegedly was involved in an assassination plot against Fidel
Castro, was wounded and captured by government forces.
Many Latin American political leaders are sympathetic to
the anti-Castro cause, and there have been several anti-Castro
demonstrations in Costa Rica, Panama, and Colombia. This
anti-Castro sentiment is probably reflected in the comment by
a Peruvian Foreign Ministry official, who said he was "privately
delighted" with the action against Castro. An "anti-Communist
guerrilla legion" reportedly was being formed in Guatemala on
18 April; an announcement claimed the organization had 400 men
ready to "help in the fight against the Communist regime in Cuba."
On balance, however, pro-Castro and pro-Communist groups
In Latin America have been more articulate, though almost always
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through relatively small groups. Yesterday saw pro-Castro
demonstrations, of varying sizes and frequently aimed against
US installations, in most Latin American countries; the Com-
munist and pro-Communist direction of these efforts seemed
most evident in Argentina, Chile, Colombia, Mexico, and
Venezuela. In Panama, several hundred Castro sympathizers
are said to have tried to enter the Canal Zone to demonstrate
there. Further demonstrations of "solidarity with Cuba,"
some possibly violent, are likely.
On 17 April, the Venezuela Chamber of Deputies unanimously
approved a resolution condemning "armed intervention by a
foreign country" in Cuba. This followed approval of a similar
resolution in the Venezuelan Senate two days earlier. In Chile,
Communist and other leftist groups have been urged by the
Cuban ambassador to prepare strikes and work stoppages in
support of Castro, a tactic which may be employed by pro-
Castro elements elsewhere. Press reports state that "vol-
unteers" to help the Castro forces are being enrolled in Brazil,
Colombia, and Venezuela, and the Cuban press service claims
that "more than 1,000 volunteers" will leave Mexico for Cuba
to fight for the Castro regime. (Map)
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Phong Sa y
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IWO GOVERNMENT Forces in
4110 KONG LE - PATHET LAO Contact
KONG LE - PATHET LAO AREAS
ROAD
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ROUTE NUMBER
n4/92
50
.It.
STATUTE MILES
Kam Keut
/4%/0�41(
Lak
KHAMM-UANE,
rphommarat
�
Thakhek Mahaxay;
5c.iyan mil< he
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,
�//
*Laos: on 17 0 4-
April the government post of Mahaxay, 25 miles east of oLL-L-Lkek)
Thakhek was evacuated. 1 ezt 4_.t.,...t
ordered this withdrawal in the face of the enemy --'' '
threat. Government troops in the Thakhek area continue to a
occu defensive ositions about 11 miles east of that town
Fragmentary reports suggest that there may be a de- rf/
veloping threat to Muong Sai, a key government post north
of Luang Prabang. Some Pathet Lao elements are reported
about six miles to the north of Muong Sai, while others are
reported moving southward from Phong Saly Province with
the mission of taking Muong Sal. The fall of this post would
endanger the remaining western area of the tiro ince and
Luang Prabang city itsel (Backup,
Page 1) (Map)
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Banana
Brazzaville
Matadi
Kitona
IN
Luanda
INDIA
300
SUDAN
400
TUNISIA
NIGERIA
INDONESIA
MOBUTU
Leopoldv le
ysville
public of the Congo
.Gemena
Scattered -orce
ETHIOPIA
Lisa
t
MOBUTU
800
Ike la.
Francqui
uluabourg
Bakw
GHANA
1600
Approximate area nominally controlled
Kasavubu-Mobutu
Gizenga
Kalonji
641 Tshombe
United Nations Forces (Service Forces
-Selected road not included)
Selected railroad
--r Selected airfield
I 001
STATUTE MILES 400
Akeh
GIZENGA
7,000
MALAYA
870
LIBERIA
k 230
ETHIOPIA
ETHIOPI
INDIA
3000
Kongolo
Kabalo
Albertville
NIGERIA
90Q
*Marion()
TSHOMBE
7,000
-lisab
hville
NIGERIA
500
Usumbura
angonyJko
IRELAND
650
SWEDEN
650
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Congo: Although President Kasavubu is still avoiding any 04-
commitment to allow re-entry of UN troops into Matadi, he 41:1(
declared his willingness on 17 April to cooperate with the UNg 4
and to permit a reorganization of the UN army under UN aus-i)
pices. His agreement on reorganization of the army appears 6
to have been made independently of Army Chief Joseph Mobutu.'"
It appears likely that Mobutu will demand assurances that suchio,
a reorganization will not be used as a pretext for disarming
the army. Mobutu claims to have re-established his author-
ltv over Gizenga's forces in Orientale Province.
(Backup, Page 3) (Map)
USSR: File Soviet gold sales which began on the London
market in mid-March, and which,
amounted to $47,000,000 between 15 and 27 March,
anded to include the Paris market as well.
fflotal sales during the period 15 March -
10 Apri may have reached as
high as $156,750,001. This is the largest amount of Soviet gold
sold in such a short period and could presage sales for the year
far in excess of the recent annual average of about $200,000,000.
Sales of this magnitude are still consonant with the Soviet Urx=
ion's own growing foreign trade imbalances. Increased imports==
largely industrial equipment�from Western Europe and the
sterlin area have resulted in a shift of Moscow's trade balance
with these areas from an export surplus in 1958 to an import
surplus in 19607 (Backup, Page 4)
Yugoslavia: Belgrade is showing confidence in its ability
to develop its domestic economy and to achieve greater public
participation in achieving the regime's goals. The two most re=
cent steps, the Third Five-Year Plan (1961=65) and a far-reach-
ing economic reform, have the avowed purpose of reaching by
1965 a per capita income comparable to that of present-day
Italy, i. e., about $575 per year. The initial adjustment to the
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reform, however, has not been as smooth as the regime had
hoped, and certain elements in the party are concerned that
inflationary trends accompanying the reform may create pub-
lic dissatisfactioj23 In the political sphere, the regime has
further demonstrated its confidence by releasing from jail
Milovan Djilas, author of The New Clas and continuing to
ease pressures on the CatholicWurch.
(Backup, Page 5)
Austria - Communist China: /the Austrian Government 0 '
is again under pressure from business interests to consider
recognizing Communist China. A delegation from the League
of Austrian Industrialists reportedly has urged recognition on
Foreign Minister Kreisky, who said that he personally favored
am_eei I
such a move but that it would require time--perhaps half a
year�to maneuver the government into position for it. Kreisky iP
said he would raise the matter at a meeting of the new Gorbach
cabinet. Kreisky has told Polish Foreign Minister Rapacki
that there would be "no difficulty for Austria to recognize" Pei-
ping but that Ausra had not so far dor so because of Wash-
ington's position] (Backup, Page 7)
NOTE: he Department of State believes that Kreisky's
personal attitude toward Communist China is well known, and
feels it unlikely any chanYe in Austrian policy wi take place
in the foreseeable futufel
19 Apr 61
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Laos
:)rior to the latest Soviet response to the British on Laos,
Prime Minister Nehru was becoming increasingly upset about
Soviet delay in agreeing to a cease-fire,
On 10 April Nehru reportedly
sent a letter to Khrushchev expressing his concern and pointing
out that each day without a call for a cease-fire not only wors-
ened the internal situation but made eventual agreement more
� difficult3
ouvanna Phouma told Ambassador Thompson in Moscow
that inclusion of the Pathet Lao in a new government is essen-
tial. In Souvanna's view, the new government would be provi-
sional and elections would have to be held in six or eight months.
Souvanna was critical of past American policy toward Laos and
indicated he had so expressed himself to Soviet leaders but said
he thought the present administration had changed policy. Sou-
vanna apparently was equally frank in making it clear to Khru-
shchev and Gromyko that he wanted a neutral Laos, and was
opposed to Communismj
CA-mbassador Thompson found most disturbing Souvanna's
remark that when he last visited Communist China in 1956 he
had been convinced that the Chinese wanted peace in S
Asia for 20 years in order to build up their economy)
Soviet transports continue to be scheduled for airlift op-
erations into Laos. On 17 April, nine Soviet IL-14s and one
North Vietnamese IL-14 flew from Hanoi to Xieng Khouang in
airlift operations.
Communications continue between the Phong Saly head-
quarters of Colonel Khammouan and Kong Le headquarters in
the Plaine des Jarres concerning the former's request for the
paradropping of arms and supplies under an agreement he had
reached with Souvanna's "defense minister" Quinim Pholsena
and Pathet Lao leader Souphannouvong at Dien Bien Phu on 6
April. In addition to weapons and ammunition, clothing, food,
and medical supplies are included in the requested material.
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the
urgent need for the supplies to "re-establish stability in Phong
Saly Province and to settle any misunderstanding between our
forces and Pathet Lao forces." The relationship between the
various forces in Phong Saly Province is somewhat obscure,
but Souvanna lists Khammouan's troops along with Kong Le's
forces as "his troops" as distinguished from the Pathet Lao.
an
armored car training school was to be opened on 16 April at
_a_nlace_ahout_5_milerthest of Xieng Khouang town.
forwarding to the Plaine des
Jarres area of Laotian Government military and civil person-
n1 Auhn have either defected or been captured.
food and lodging be prepared for three govern-
ment soldiers who "rallied with their weapons" at Ban Pha.
SECRET
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CONFIDENTIAL
The Situation in the Congo
The 17 April claim by Congo Army headquarters that Gen-
eral Mobutu has reached agreement with the authorities in
Orientale Province has yet to be confirmed by any spokesman
for Gizenga. The position of the Leopoldville government rel-
ative to its rivals appears to have improved, however, as a
result of the internal dissensions besetting the Gizenga and
Tshombe regimes. In Stanleyville, the leader of one faction
was briefly under arrest in mid-April for subversive activi-
ties; in Elisabethville, Tshombe's freedom of action has been
limited both by factional rivalries among his subordinates and
by diminishing popular support
President ICasavubuts declaration of his willingness to
cooperate with the UN contrasts with Tshombe's recent
warnings against any reinforcement of UN troops in Katanga.
That Kasavubu desires further to isolate Tshombe is suggested
by a passage in his agreement with the UN calling for the ex-
pulsion of all foreign political and military functionaries
hired by any agency other than the Kasavubu government
As of 17 April, approximately 900 Indian troops had been
airlifted from Tanganyika to Kamina base in Katanga. UN
officials, however, have charged that Tshombe has revived
efforts to boycott the UN in Katanga and to prevent it from
purchasing food and other supplies.
On 14 April Albert Ndele, governor of the Congo National
Bank, briefed foreign diplomats and businessmen on the
financial condition of the Congo, which he described as grave.
According to Ndele, governmental expenditures in the last
half of 1960 exceeded income by US $12 million per month.
Ndele observed that falling imports had brought serious
inflation, and charged various government agencies, particu-
larly the Congo Army, with fiscal extravagance.
CONFIDENTIAL
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Soviet Gold Sales
though there is a possibility of double counting, reports
indicate that the USSR sold $101,750,000 worth of gold on the
London market between 15 March and 10 April, and another
$55,000,000 to the Bank of France in the first week of April.
Such sales, if substantiated, would be well above the unusually
low volume in 1960 (estimated at $125,000,000), suggesting
that the total for the year may exceed the $300,000,000 level
in the peak year 1959j
/These large-scale transactions may be attributed to a
combination of circumstances. Soviet imports from Western
Europe and the sterling area are expanding at a greater rate
than exports. Moscow's balance of trade with the sterling
area has changed from a slight surplus in 1958 to a deficit of
about $100,000,000 in 1959 and an estimated deficit of about
$130,000,000 in 1960. Similarly, Soviet imports from the
rest of Western Europe in 1960 increased almost 50 percent
over 1959, while total exports to the area rose less than 20
percent, thus reducing the USSR's traditional export surplus
with the area from $164,000,000 in 1959 to $76,000,000 in
1960. This shift in Soviet trade with nonbloc areas, coupled
with the small sales of gold last year, has undoubtedly caused
a drain on Soviet foreign exchange reserves necessitating re-
entry into the gold market:7
(Although no evidence exists, it is possible that the USSR
is acting as an agent for Chinese Communist gold transactions.
Peiping is currently short of foreign exchange, and a part of
its gold holdings is assumed to have been sent to the USSR for
minting and presumably for ultimate disposal in Western mar-
ke?j
SEC
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Internal Developments in Yugoslavia
Yugoslavia's parliament convened on 18 April to approve
the annual report of the Federal Executive Council (the cab-
inet) on economic development and the primary tasks to be
faced in the coming year. While the report itself contains
little of dramatic import, it comes at a time of significant
change in Yugoslavia. On 1 January Belgrade announced that
its Second Five-Year Plan (1957-61) had been completed one
year early and that the third would be begun immediately.
The economic reform accompanying the new plan will
bring Yugoslavia's foreign trade practices into closer accord
with those of the West by lessening central government con-
trol over trade, unifying the exchange rate of its currency at
750 dinars to the dollar, and using simplified, direct tariffs.
Belgrade hopes that these changes will increase foreign trade
by 74 percent in the next five years. The reform also calls for
further decentralization of Yugoslavia's political administra-
tion and economy. By vesting more power at the local level,
the regime hopes to solve a problem which plagues all Com-
munist regimes�how to stimulate individual initiative and in-
dustrial efficiency without endangering the regime's control.
)The reform has had unsettling domestic effects,rind as a
result, some party officials fear that popular unrest may de-
veloRB Retail prices for certain consumer goods have risen
sharply, necessitating the extension of price controls. Under
the new system, some industries have engaged in monopolistic
practices, forcing up prices despite the regime's expectations
to the contrary. Belgrade has not been able, moreover, to re-
duce controls on as many commodities as originally planned,
because some of the Western aid--totaling $275,000,000--sup-
porting the reform is relatively short term, high interest, and
restricted as to its use.
Yugoslavia is making ideological claims about the reform
in an attempt to justify a program which some party cadres
apparently consider non-Marxist. Moreover, these cadres may
feel threatened by the regime's policy of emphasizing efficiency
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rather than party loyalty. The front organization and the trade
union federation have undertaken a campaign to win popular
support and to ensure compliance with the reform by local eco-
nomic functionaries. In addition, Yugoslav courts have begun
handing out jail sentences in cases involving economic malfea-
sance by executives.
In order to reflect more accurately the extent to which the
Yugoslav system has been decentralized and "democratized"--
i. e.�, more persons involved in the processes of administra=
tion�a new constitution is being written which will institution-
alize current practices. Avowedly, it will also broaden civil
rights and, perhaps, attempt to provide a mechanism which
would ease the transfer of power after Tito's death.
Djilas was released after serving only four years of his
ten-year jail sentence for "hostile propaganda"; he is not be-
ing subjected to normal parole restrictions, Djilas hopes to
publish in Yugoslavia some of the five books he wrote while in
prison and expects to resume a significant role in Yugoslav
politics, although the latter seems unlikely during Tito's life-
time.
Similarly, Belgrade has moved since the death of Cardinal
Stepinac in February 1960 to improve its relations with the
Catholic Church; a working relationship has already been
reached with the Moslem and Orthodox Church communities.
Although progress has been made, a disagreement over ap-
pointment of an apostolic delegate, who the regime insists
ugoslav citizen, has not been resolved.
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Pressure in Austria 'or ttecograzIng communist China
tfn its session with the foreign minister, the delegation
from the League of Austrian Industrialists argued that Austria
should recognize Communist China before the US did, in order
to avoid giving the impression that Austria was an American
satellite. Kreisky, one of the prominent Socialist members of
the coalition cabinet, replied that he could not move alone in
the matter because his political enemies, particularly in the
coalition People's party, were jealous of his growing prestige
and would label him a Communist. He said that the Socialist
party in general favors recognition because of its interest in
developing the country's nationalized industries. Kreisky also
told the delegates that in 1958 he had changed Austria's position
in the UN from one of supporting the moratorium on Chinese
UN representation to one of abstention on the issue, and that
Austria's future attitude would depend on circumstances in the
next General Assembly;
ffn the first ten months of 1960 Austrian imports from Com-
munist China were worth $5,200,000, practically double what
they were for the same period in 1959. Exports, however, re-
mained at about the same level, around $11,000,000 in each
period. Austrian businessmen have frequently complained that
lack of political ties is hurting Austria's export trade. Austria's
trade with Communist China makes up about 13 percent of its
total trade with the bloc. Austria has no diplomatic, consular,
or commercial representation in either Nationalist or Commu-
nist China. A trade commissioner resident in Hong Kong
handles Austria's trade matters in the areg
eisky, in telling US Ambassador Matthews about his
discussions with Polish Foreign Minister Rapacki during his
visit to Vienna from 8 to 11 March, implied that establishing
Austrian diplomatic relations with Communist China was main-
ly a matter of time. Kreisky said he had turned down Rapacki's
offer of mediation because of the domestic political situation,
adding that the USSR had made a similar offer but that he pre-
fers the mediation of a neutral like Switzerland which already
has an embassy in Peipinli
SECRET
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044idCONFIDENTIAL
114.0f
THE PRESIDENT
The Vice President
Executive Offices of the White House
The Special Assistant for National Security Affairs
The Scientific Adviser to the President
The Director of the Budget
The Director, Office of Civil and Defense Mobilization
The Director, National Aeronautics and Space Administration
Chairman, Board of Consultants on Foreign Intelligence Activities
The Department of State
The Secretary of State
The Under Secretary of State
The Director, International Cooperation Administration
The Deputy Under Secretary of State for Political Affairs
The Deputy Under Secretary of State for Administration
The Counselor and Chairman of the Policy Planning Council
The Director of Intelligence and Research
The Treasury Department
The Secretary of the Treasury
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Assistant Secretary of Defense (International Security Affairs)
The Assistant to Secretary of Defense (Special Operations)
The Chairman, The Joint Chiefs of Staff
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Chief of Staff, United States Army
Commandant, United States Marine Corps
U.S. Rep., Military Committee and Standing Group, NATO
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Director, The Joint Staff
The Director for Intelligence, The Joint Staff
The Assistant Chief of Staff for Intelligence, Department of Army
The Director of Naval Intelligence, Department of Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Department of Justice
The Attorney General
The Federal Bureau of Investigation
The Director
The Atomic Energy Commission
The Chairman
The National Security Agency
The Director
The United States Information Agency
The Director
The National Indications Center
The Director
Approved for Release: 2020/08/11 CO2001987
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