CENTRAL INTELLIGENCE BULLETIN - 1959/01/02

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03000012
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 21
• Document Creation Date: February 25, 2020
• Document Release Date: February 27, 2020
• Publication Date: January 2, 1959

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2 January 1959
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CENTRAL
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3.3(h)(2)
INTELLIGENCE
BULLETIN
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2 JANUARY 1959
I. THE COMMUNIST BLOC
Evidence indicates Khrushchev's op-
ponents will be expelled from party,
but not executed or jailed.
Soviet commandant in Berlin hints
East Germans now responsible for
US military personnel detained in
East Berlin.
Strong Soviet note calls for talks
with Iran before Tehran signs de-
fense agreement with US.
II. ASIA-AFRICA
Violent clashes increasing between
pro- UAR and pro-Communist ele-
ments in Iraq.
Algerian rebels ordered to attack
Frenci nil ninplino from Rahara to
coast.
Shah of Iran considering purchase
of 25-percent interest in oil con-
sortium.
I.
0
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CIDI; -
\
0 South Vietnam and Thailand engaged
in plotting against Sihanouk regime
in Cambodia.
C) Sudan faces economic crisis next
March failing large external aid or
cotton sales.
co
III, THE WEST
Cuban rebels acting to take over
country following collapse of Batista
regime.
France--Regardless of political at-
tacks, new austerity program offers
best chance since 1945 to stabilize
economy.
Final preparations for French nu-
clear weapons test may be under
way.
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CENTRAL INTELLIGENCE BULLETIN
2 January 1959
DAILY BRIEF
I. THE COMMUNIST BLOC
USSR: Lividence indicates that Ithrushchevis defeated
opponents--Malenkov' Molotov, Kaganovich, Shepilov, and
� Bulganinare slated for expulsion from the party, but not
for imprisonment or execution. Khrushchev's attack at the
December plenum of the party central committee appeared
to foreshadow some further move against them. The 21st
party congress later this month would provide a convenient
forum before.which to make the announcemena
Berlin Situation: In a communication of 27 December,
the Soviet colairarilant in Berlin indicated that the East Ger-
mans now are responsible for cases of US military personnel
detained in East Berlin. This is a hint that the USSR already may
have relinquished to the East Germans an element of its quadri-
partite responsibilities in the city.
(Page 1)
USSR-Iran: koscow's latest note to Iran, delivered on
29 December, calls for a series of Soviet-Iranian talks to
settle outstanding issues before Tehran undertakes the "hos-
tile" step of signing the proposed Iranian-American defense
agreement. The Soviet campaign to pressure Iran into drop-
ping its military ties with the West emphasizes Soviet charges
that an Iranian-American "alliance" would threaten the security
of the USSR and the Arab wor19 (Page 2)
II. ASIA-AFRICA
Iraq: Clashes between pro-UAR and pro-Communist ele-
ments are becoming increasingly violent. More serious out-
breaks seem likely, since both groups apparently feel they
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cannot yield to threats of force. A breakdown of public
order on a large scale might encourage army leaders to
attempt to remove Prime Minister Qasim; limit his au-
thority; or order him to crack down on pro-Communists.
(Page 3)
Algeria: The Algerian rebels may soon attempt to
sabotage the 420- mile 24 inch oil pipeline France is
constructing from the Hassi Messaoud field in the Sahara
to the Algerian coastal city of Bougie.
the rebels" defense ministry in Tunis
to make "the greatest
possible effort" to prevent construction of the pipeline and
to launch "vigorous actions against all enemy facilities."
(Map) (Page 5)
Iran: The Shah of Iran is considering a plan to pur-
chas-e�r25-percent interest in the consortium of Western
oil companies which operates the country's petroleum in-
dustry. He prefers this to a change in the 50/50 profit-
sharing formula. Apparently seeking US Government sup-
port Toi; his plan, the Shah noted that increased oil reve.:
nues would decrease Iran's need for American assistance'
(Page 6)
!South Vietnam-Thailand-Cambodia: alotting by South
Vietnam to over hrow t e Sihanouk government in Cambodia
Vietnamese agents in Cambodia recently exfiltrated
former Premier Sam Sary to head a resistance front against
Sihanouk based in Thailand. Thai leaders, including Marshal
Sarit, have indicated willingness to lend clandestine mili-
tary support. This plotting apparently is not yet connected
with recently reported plans by Dap Chhoun. Cambodian
warlord, to overthrow Sihanouk.
Sihanouk is already alert to growing domestic and
eternal intrigues against his rule. He may denounce these
intrigues as Western inspired and turn to the Communist
bloc for suppoi.:g (Page 7)
Sudan: The prospects are for an economic crisis some-
time inMarch when the Sudan's free currency reserves will
have been exhausted. Severe economic dislocations apparently
2 Jan 59 DAILY BRIEF
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can be avoided only if substantial balance-of-payments aid
or large cotton purchases come from outside sources be-
fore mid-March. (Page 8)
III. THE WEST
*The Situation in Cuba (0130 EST, 2 January): The Fidel
Castro rebels moved swiftly to consolidate their control of
the country after the sudden collapse of the Batista govern-
ment on 1 January. Santiago, second largest city, fell and
the rebels claimed control over the capital of Camaguey
Province as well as the important seaport of Cienfuegos. A
pro-rebel army officer, Colonel Ramon Barquin, is in con-
trol of the armed forces. Fidel Castro's hand-picked choice
for the presidency, Manuel Urrutia, is expected in Havana
at any moment. The Communists can be expected to exploit
the fast-moving situation--perhaps by supporting a general
strike--in an effort to gain political freedom and even le alit
rfor_theArrty, Which was outlawed in 1953 by Batista.
(Page 9)
France: The bold austerity program offers the best
prospect since 1945 for stabilizing the French economy, but
will nevertheless encounter some political hazards. Social-
ist opposition to it gives the Communist party new leverage
In its constant appeal for working-class "unity of -attion."
Some prominent leaders of the powerful Union for the New
Republic, the largest party in the Assembly, have previous-
ly opposed austerity measures in the hope of broadening the
new party's appeal to labor. They Will probably welcome
any opportunity to seek relaxation of the program.
(Page 11)
4f..ance--Nuclear Weapons: LThe reported 29 December
departure from France of a group-EC-100 to 120 persons, in-
cluding "the commander of the French atomic test site," sug-
gests that final preparations for a French nuclear weapons
test may be under way. The group was said to be bound for
"a town southeast of Colomb-Bechar," presumably Regga&
2 Jan 59 DAILY BRIEF
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i 'oasis in the Sahara which was previously reported to be the
�site of an installation preparing for tests of French nuclear
weapons. It is estimated that the French now have enough
fissionable material to explode a nuclear device, and severa
recent reports have indicated that the gov rill" an+. 117nQ nulnif-
ing the "psychological moment" to do sd-.)
2 San 59
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I. THE COMMUNIST BLOC
Berlin Situation
The Soviet commandant in Berlin notified the US com-
mandant on 27 December that East German police are hold-
ing in custody an American soldier who had been found in
East Berlin the preceding night. The Soviet note added that
"German" authorities had said they would release this man
to an American representative.
The US Mission in Berlin points out that this is the first
time Soviet authorities have stated that it is necessary to
deal with the Germans for the release of Allied military per-
sonnel taken into custody in East Berlin. This in effect turns
over to East Germany jurisdiction which has been a Soviet
responsibility under quadripartite agreements. The same
responsibilities do not apply to similar cases in East Germany
outside the city itself. American officials note, moreover,
that this is the first time a question of military personnel
has formed the subject of a communication from the Soviet
commandant, such matters having previously been handled
on the provost-marshal level.
Moscow also appears to be making preparations to with-
draw its headquarters from the KarlshorSt compound in East
Berlin to some locale outside the city. The number of Soviet
personnel at Karlshorst already has been diminished by the
withdrawal of Soviet advisers from the East German Army
and certain ministries. The post exchange at Karlshorst
will be closed down on 1 February 1959,
and a Soviet administrative team which has
closed down other compounds is being assigned to close out
the Karlshorst installation. [Outside Berlin, construction of
administrative buildings is being rushed in one area, possibly
for use of Soviet officials being transferred from Berlin.
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Soviet Warning to Iran
6_v_Ioscow's efforts to forestall the conclusion of an Iranian-
American defense agreement have resulted in a noticeable
cooling of Soviet-Iranian relations. The Shah of Iran said
that Soviet Ambassador Pegov told him on 26 November that
if Iran continued to follow its present polities, Moscow would
be forced to regard it as an enemy. The latest Soviet note,
delivered on 29 December, called for a series of talks on out-
standing issues and deplored growing tension between Moscow
and Tehran. It alleged that conclusion of the bilateral agree-
ment would result in the basing of US troops in Iran and the
stationing of the US Navy in the Persian Gulf�actions which
could only lead to further deterioration of relations. Pre-
vious Soviet notes on 27 November and 31 October had warned
Tehran of the dangers Iran would face in placing its territory
at the disposal of an "aggressor group" and had stated that
Moscow "will not remain indifferent" to this added threat to
its southern frontierq
ljy holding up work on border river surveys and normal
purchases of Iranian rice, Moscow has hinted at further eco-
nomic pressure if relations continue to deteriorate, while
at the same time promising economic advantages if Iran adopts
a "friendly" course.]
Lviet Deputy Foreign Minister V. S. Semenov on 15 De-
cember rejected an Iranian protest against remarks in the 27
November Soviet note and chided the Iranian ambassador on
"secret clauses" in the projected agreement. Semenov asked
the Iranian ambassador to inform the Shah that the Soviet Gov-
ernment considered conclusion of this agreement a "hostile"
act directed against the USSR which Moscow could neither
ignore nor tolerat9
2 Jan 59
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I L ASIA-AFRICA
The Situation in Iraq
Open clashes between Communist sympathizers and pro-
UAR elements are increasing and spreading throughout Iraq.
Centered in Baghdad, these clashes may be the prelude to
more violent outbreaks as the opposing factions gather their
forces. Apparently determined to demonstrate that Commu-
nist violence does not intimidate them, UAR supporters have
reversed their previous policy of lying low and now are try-
ing to make a show of strength. Communist gangs are roam-
ing Baghdad streets at night looking for anti-Communists,
while Baathists have been reported assassinating Commu-
nist partisans. Although the army has quelled disturbauces
in such provincial towns as Ramadi, Falluja, and Kirkuk,
a further deterioration of public order might encourage army
leaders to attempt to remove Prime Minister Qasim or limit
his authority if they cannot force him to reverse those of his
present policies which aid the Communists.
The funeral of a member of the Communist-infiltrated
Popular Resistance Organization (PRO) was used by Commu-
nist sympathizers as the excuse for large-scale demonstra-
tions demanding expansion and arming of the PRO to "pro-
tectrthe people" against the "fanatic enemies of the Republic."
the demonstra-
tors chanted slogans in support of Qasim and shoute
the heads of supporters of the former royal regime.
The war of words between Baghdad and Cairo has reached
new heights, with the Baghdad press "demanding" the naming
of "those responsible for inspiring Nash.% attack on the Sy-
rian Communists." Cairo radio has broadcast the resolution
s-
2 Jan 59
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of the Kuwait Arab Literary Conference which condemned
the Iraqi representatives for their charges that the con-
ference was not a free forum.
-SECRE-T
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Algerian Rebels Ordered to Sabotage., Partially Completed
Pipelip F e r2m Saharan e
The defense ministry of the Algerian rebels' provisional
government ordered the rebel command for eastern Algeria
to launch "vigorous" sabotage
operations against the 24-inch pipeline which France is build-
ing from the Hassi Messaoud oil field in the Sahara to the
Mediterranean.
The order, which urged "the greatest possible effort" be
made to forestall French use of the pipeline, was evoked
informing the ministry that the French
were laying pipe at a more rapid rate than had been expected
and had installed about 36 miles as of mid-December. An
earlier report indicated the French are working around the
clock in an effort to extend the line its full 420 miles to the
Algerian coastal city of Bougie by October 1959. As the route
followed necessarily traverses extensive tracts of rebel-in-
fested territory, the rebels may have greater success in im-
plementing this instruction than they have had previously when
ordered to take general action against other targets.
No attacks on the Bougie pipeline construction project,
which began about three months ago, are known to have oc-
curred as yet. The rebels have reportedly caused occasional
brief interruptions in the flow of Hassi Messaoud oil along
the temporary combination six-inch pipeline and rail route
activated last January, largely for psychological purposes.
Despite these interruptions, however, some 11,617,000 barrels
of oil had been shipped from Algeria by September, and year-
end figures will probably come close to the 2,450,000-barrel
target set for 1958.
France hopes to ship Hassi Messaoud oil at the rate of
85,000 barrels a day immediately upon completion of the
Bougie pipeline, increasing this to 240,000 b/cI by 1961
together with equal shipments from an-
other remote Saharan field by a pipeline across Tunisia on which
construction is scheduled to start in 1959, would provide the
French communit2 with virtually all its estimated crude require-
ments by 1962. atovvever, 'Tunisian President Bourguiba several,
months ago was reported to have assured the rebels that no Sa-
haran oil will flow through Tunisia until Algeria becomes inde-
penden_g (TOP SECRET EIDER NOFORN)
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2 Jan 59
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AFRICA
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Shah of Iran Considering New Oil Policy
rthe Shah is considering a plan whereby Iran would pur-
chase a 25-percent interest in the consortium of Western oil
companies which operates most of the country's petroleum
industry. The consortium, which took over the operation of
the Iranian oil industry in 1954 as part of a general settlement
following the nationalization of the Anglo-Iranian Oil Company,
currently operates under-a 50/50 profit-splitting agreement
which is scheduled to remain in force until 1994]
'fflhis new plan, if implemented, technically would not
breach the traditional 50/50 formula but would, -in effect,
give Iran about 62.5 percent of the profits of the consortium's
operations. Such a device was used in three concessions re-
cently awarded to American, Canadian, and Italian companies.
Since Iran does not have sufficient funds to make the suggested
purchase, the Shah probably envisages a loan from the consor-
tiunD
apparently seeking US Government support for his plan,
the Shah noted that an increase in oil revenues would cause a
proportionate decrease in Iran's needs for American economic
aid. The Iranian budget for the year beginning 21 March 1959
currently is estimated by Tehran to have a deficit of about
$100,000,000 for which substantial American aid may be re-
quested in addition to the "normal aid program."}
[Unlike the recent agreement in Venezuela, the Iranian-
consortium concession agreement apparently prevents a uni-
lateral change in the profit-sharing formula. Despite this
legal block, the Shah may decide to press for increased oil
revenues by other methods if his suggested purchase plan is
proposed and rejectecj3
2 Jan 59
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South Vietnam's Intrigues Against Sitianouk Regime
Guth Vietnam is actively plotting to engineer the re-
moval of Crown Prince Sihanouk from power in Cambodia
in the conviction that his close relationship with the Com-
munist bloc menaces Vietnamese national existence.
one of Cambodia's
top political figures, Sam Sary, was smuggled out of the
country on 21 December for grooming in Saigon as head of
a resistance front against Sihanouk to be based in Thailand.
Sam Sary's flight was arranged by South Vietnam's envoy in
Phnom Penh, Ngo Trong Hieu. Vietnamese agents in Bang-
kok are coordinating these plans with Thai military leaders,
including Marshal Sarit, who have promised clandestine
military supporg
Vitenam's plotting, at least at this stage, seems to be
apart from coup plans against Sihanouk being hatched by Dap
Chhuon, Cambodian military leader who is alarmed at grow-
ing Communist influence in Cambodia. Chhuon� however,
contemplates support from both South Vietnam and Thailand
to facilitate a takeover
/here is serious danger that Sihanouk, who is already
alert to growing domestic and external intrigues against
him, will denounce this plotting as Western inspired and
turn to the Communist bloc for support. South Vietnam's
representative in Cambodia informed Saigon that the situa-
tion in Phnom Penh "i8 dangerous...with the authorities
watching for the slightest chance to place us under arrest,."-]
TOP SECRET
2 Jan 59
CENTRAL INTEI I InENCE RUH FTIN
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Sudan Faces Economic Crisis
Both the Sudanese Government and the American Embassy
expect a severe economic crisis in the Sudan sometime in
March when its free currency reserves will have been exhaust-
ed. The deteriorating economic situation, in large part a re-
sult of the government's unrealistic cotton marketing policy,
now has reached a point where Khartoum cannot solve the prob-
lem without assistance. In this atmosphere of economic crisis,
the Sudanese Supreme Council apparently is moving into a de-
cisive phase.;of its foreign relations. The Sudan's longer-term
policy may be decisively influenced by whether increase"d eco-
nomic aid comes from Western or Sino-Soviet bloc sources.
Thus far the Sudan has not concluded large barter deals
with the Sino-Soviet bloc, but the present 230,000-bale sur-
plus of long-staple cotton and the prospect of an additional
620,000 bales from the near-record crop now being harvested
probably will make Khartoum receptive to a Soviet offer of a
large barter deal. A high-level economit delegation expected
to arrive in the near future may bring an offer of substantial
assistance not only for the immediate crisis but for long-term
development projects as well.
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III. THE WEST
The Situation in Cuba (0130 EST2 2 January)
Following the sudden collapse of the Batista regime in
Cuba on 1 January, the Castro rebel movement moved quick-
ly to seize control of the country. Fidel Castro declared he
would not accept an army-backed provisional government and
threatened to call a general strike unless Manuel Urrutia,
his personal choice for president who is en route to Havana,
is given power. A walkout has paralyzed air service to and
from Havana, and there are indications a general strike might
be spreading in the western provinces.
Col. Ramon Barquin, a former military attache in Wash-
ington who had been in prison since leading an unsuccessful
military coup against Batista in 1956, announced that he has
assumed control of the armed forces in Havana.
Rebel units have stepped up their efforts to seize key
cities in the three eastern provinces. On 1 January they cap-
tured Santiago, Cuba's second largest city and capital of
Oriente Province, and claimed control over the capital of
Camaguey Province and the important seaport of Cienfuegos
in Las Villas Province. Rebel columns were also reported
to be marching toward Havana, where Castro sympathizers
were attempting to restore order as rioters roamed the streets
looting and burning.
Several Cuban embassies abroad have jumped on the
Castro bandwagon. The chiefs of mission in Bonn, Paris,
and Rio de Janeiro announced support for a rebel government,
and exiles took control of the embassies in Washington, Mex-
ico City, and Montevideo.
The outlawed Popular Socialist (Communist) party (PSP)
may now increase its efforts to ally itself with the rebel cause
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vor
in an attempt to gain political advantages or recognition under
a new government. On 2 January the Communist chief announced
support of the rebel movement and called for a "united front."
Although the PSP has been rebuffed in numerous previous at-
tempts, it has given strong propaganda to the rebellion and has
offered to cooperate in any general strike.
Communist sympathizers are believed to have penetrated
the rebel movement on a low level, and the anti-American
sentiments held by some rebels�particularly within the group
commanded by Raul Castro--could well be exploited to the
Communists' advantage.
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sularo Noire
New French Austerity Program Faces Political
Complications
The broad new economic program announced by Pre-
mier de Gaulle and Finance Minister Pinay on 28 December
offers the best prospect since 1945 for a stabilized French
economy. For the time being, at least, France probably
has the capability to support both a stabilization program
and the current drain of resources in Algeria.
The austerity program is already under attack by the
official Socialist party newspaper as well as by the Commu-
nist party. This situation gives the Communists their best
opportunity since De Gaulle came to power to seek working-
class "unity of action." Socialist leader Guy Mollet now
may find his self-assigned role of leader of the "loyal oppo-
sition" to the new government complicated by Communist
success in seeking "unity from below." Although the Popu-
lar Republican party is expected to support the austerity
program, MRP leader Pierre Pflimlin is reported particu-
larly apprehensive over its impact on peasants and labor.
Both of the major non-Communist labor unions--the Socialist-
oriented Force Ouvriere and the MRP-oriented Christian
Workers' Confederation--had repudiated austerity programs
in advance although they do not intend to attempt protest
strikes.
While a spokesman for the "Gaullist" Union for the New
Republic (UNR), which is by far the largest group in the
Assembly, has announced full support for the new program,
some UNR leaders have previously opposed austerity mea-
sures. Michelet, Debre, and Frey, for example, hope to
win broad labor support partly through a policy of economic
expansion. Such men will probably seize any opportunity to
seek relaxation of those portions of the new program which
appear objectionable to labor.
CONFIDENTIAL
2 Jan 59
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%ad
THE PRESIDENT
The Vice President
Executive Offices of the White House
Special Assistant for National Security Affairs
Scientific Adviser to the President
Director of the Budget
Office of Defense and Civilian Mobilization
Special Assistant for Security Operations Coordination
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Special Adviser to the President
The Treasury Department
The Secretary of the Treasury
The Department of State
The Secretary of State
The Under Secretary of State
The Under Secretary of State for Economic Affairs
The Deputy Under Secretary for Political Affairs
The Deputy Under Secretary for Administration
The Counselor
Director, International Cooperation Administration
The Director of Intelligence and Research
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Chairman, The Joint Chiefs of Staff
Commandant, United States Marine Corps
The Director, The Joint Staff
Chief of Staff, United States Army
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Assistant to Secretary of Defense for Special Operations
Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of the Army
Director of Naval Intelligence, Department of the Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Department of the Interior
The Secretary of the Interior
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
United States Information Agency
The Director
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