CENTRAL INTELLIGENCE BULLETIN - 1961/03/06
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03007378
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Publication Date:
March 6, 1961
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6 March 1961
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CENTRAL
INTELLIGENCE
BULLETIN
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TOP-SEGREL__
The Daily Brief of the CENTRAL INTELLIGENCE BULLETIN is
produced by the Director of Central Intelligence in consultation
with representatives of departments and agencies of the United
States Intelligence Board. Back-up material is produced by CIA
with as much consultation with other departments and agencies as
is practicable. When, because of the time factor, consultation with
the department or agency of primary concern is not practicable,
the brief will be produced by CIA and marked with an asterisk.
Intelligence in this publication is based on all sources, including
Interpretations of intelligence information in this publication rep-
resent immediate and preliminary views which are subject to modi-
fication in the light of further information and more complete
analysis.
Certain intelligence items in this publication may be designated
specifically for no further dissemination. Other intelligence items
may be disseminated further, but only on a need-to-know basis.
WARNING
This document contains classified information affecting the national
security of the United States within the meaning of the espionage
laws, US Code Title 18, Sections 793, 794, and 798. The law prohibits
its transmission or the revelation of its contents in any manner to
an unauthorized person, as well as its use in any manner prejudicial
to the safety or interest of the United States or for the benefit of any
foreign government to the detriment of the United States.
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6 March 1961
CENTRAL INTELLIGENCE BULLETIN
CONTENTS
1. Situation in the Congo. (Page t)
2. Laos: Souvanna Phouma reported planning to leave on
world tour this week. (Page i)
3. Pakistan and USSR sign agreement on oil exploration.
(Page
4. West Germany revalues the mark. (Page JO
6. Panamanian delegate to "peace conference may intro-
duce resolution on Canal Zone sovereignty. (Page iii)
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CENTRAL INTELLIGENCE BULLETIN
6 March 1961
DAILY BRIEF
*Congo: The situation in the Banana-Matadi-Kitona area
remains teilse, and the 120-man Sudanese garrison at Matadi
has withdrawn to avert further clashes. Congolese forces ap
parently have ignored a cease-fire negotiated earlier by UN
special representative Dayal and Congolese Foreign Minister
Bomoko. UN Secretary General Hammarskjold, following a
two and a half hour emergency meeting of the UN's 18-nation
Congo advisory committee, is reported to have ordered the UN
commander to meet today with Congolese military leaders in
an effort to restore UN control in the area. Dayal confirmed
on 4 March that he had orders from Hammarskjold to hold
Banana and Kitona at all costs, and to retake them if lost,by
force if necessary.
Brussels radio has announced that Gizenga and ICashamura
will attend the round-table conference called by Tshombe which
is to begin on 6 March in Tananarive. Tshombe, ICalonji, and
Ile� arrived in Tananarive on 4 March, and Kasavubu reportedly
will join them on 6 March, following a plea from Tshombe that
the conference would not succeed without him. The conference
Is unlikely to result in more than broad agreements to cooperate
on "unifying" the Congo. The proclamation on 4 March of the
State of Maniema, in Kivu Province, by Antoine Omani is prob-
ably an effort on his part to align himself with the anti-Communist
grouping of Tshombe, ICalonji, and Ileo announced on 28 February.
It is doubtful that Omar controls enough of Kivu Province to make
this move significant.
Laos: Th'ormer Laotian premier Souvanna Phouma is report-
edly�Fa�ming to leave Cambodia between 7 and 11 March on his
world tour seeking support for his "legal" government. Former
finance minister Inpeng Suradhay is still trying to arrange talks
between Souvanna and General Phoumi. Inpeng, who arrived in
Vientiane and Luang Prabang during Souvanna's recent visit ti53
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5ebel-held territory, planned an early return to Phnom Penh
to convey Phoumi's willingness to meet Souvanna, possibly in
Rangoon73
ei team from Taipei was expected to arrive in Bangkok by
6 March to negotiate arrangements for the repatriation of Chinese
Nationalist irregular troops from the Thai-Burma-Laotian border
area. The team plans to visit villages in Laos and Thailand, where
Irregulars crossing over from Burma have concentrated, to per-
suade as many as possible to return to Taiwan. Although a Lao-
tian government spokesman has stated that Kuomintang elements
in Laos are now being disarmed, in the border
area has reported seeing a well-armed unit in his village.
about 1,000 ir-
regulars enc m eci in northern Thaziana m v nave crossed back
Into Burma.
Pa1ustan-1.M1-.: The agreemen on oi exp o ation signed in
Karachi on 4 March after several months of bargaining is the first
major Soviet aid program accepted by the Pakistani Government.
The agreement provides for a credit of $30,000,000 to finance a
five-year program of technical assistance in oil prospecting and
surveying. The credit carries the usual favorable terms- repay-]
znent over 12 years at 2.5-percent interest. Pakistani officials,
impressed by the discoveries of Soviet teams in India and Afghan-
istan, hope that the Soviets will succeed where Western oil com-
panies have failed. Leaders of the military government probably
are also motivated by political considerations. While maintaining
Pakistan's commitment to its Western alliances and continuing to
rely strongly on US aid, President Ayub and his associates have
sought in recent months to demonstrate a greater "independence"
in foreign policy as a reminder that Pakistan's cooperation should
not be taken for granted. (Backup, Page 3)
West Germany:On a sudden move, Bonn has raised the ex-
change value of the West German mark 5 percent in an effort to V
halt the steady influx of foreign exchange�chiefly dollars--which
has contributed to US balance=of-payments difficulties. The Netherlands
has announced that the guilder is being similarly revalued. Althoughi
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Ceerman government and banking �flit ials�under strong pres-
sures from industrial and commercial interests�had re-
peatedly rejected revaluation, the failure of Bonn's recent
easing in its tight monetary policy to correct West Germany's
chronic billion-dollar payments surplus and the threat of
another wave of speculation apparently convinced Bonn offi-
cials that a more realistic pegging of the mark was unavoid-
able. This action which applies a brake on inflation but
also makes German exports more expensive
May be
intended to demonstrate Chancellor Adenauer's willingness to
take additional steps to ease pressure on the dolla9
Latin America:CA demand for full Panamanian sovereignty
in the Canal Zone is likely to be one of the propaganda highlights
of the Communist-backed "Latin American Conference on National
Sovereignty, Economic Emancipation, and Peace;' meeting in
Mexico City from 5 to 8 March. Pro-Castro deputy Thelma King,
head of the Panamanian delegation, reportedly will introduce the
resolution on the Canal Zone and another condemning US "aggres-
sion against Cuba." The conference is sponsored principally by
former Mexican President Lazaro Cardenas, a Stalin Peace
Prize winner whose prestige as a revolutionary is high in Latin
America, although he has allowed himself to be used increasingly
by both Castro and the Communists.
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DAILY BRIEF iii
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Brazzaville,n.
Banan �
�Kitona
Matadi
SUDAN
390
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IN
1,150
MALAYA
150
Gem era
TUNISIA
MALAYA
610
MOBUTU
7,200
Scattered Forces -
MOBUTU 1
2,700
Coquilhatville
�Boende
Scattered Forces
Leopoldvipe- -
Thysville :
GHANA
1,900
{4)Luanda Approximate area controlled by:
Ti Kasavubu-Mobutu
Gizenga
Kalonii
Ishombe
M United Nations Forces
Selected road
Selected railroad
Selected airfield
X Cut railroad
STATUTE MILES
MOBUTU
31594 C
1,500
t Francqur,
uluabourg
Bakw
Luputa
MOROCCO,
IRELAND
655
LIBERIA
ETHIOPIA
Kamina-
.404
w AA.
a
ETHIOPIA
GIZENGA
7,000
NIGERIA
ongb175
Albertville.-
NIGERIA
CManono
SWEDEN
680
TSHOMBE
4,000
Elisa hviIle
Usumbura
Lake
Tanganyika
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Situation in the Congo
The fighting around Banana has resulted in casualties
on both sides--which will make it even more difficult for
either UN or Congolese forces in Leopoldville to control the
situation. Congolese troops have used
artillery, mortars, and even a small amphibious operation
against the Sudanese UN forces0
the incident could touch off fighting else-
where.
3e1g1um will not insist on tne
departure of the Belgian military, paramilitary, and polit-
ical personnel who are under contract to the Katanga govern-
ment. Military technicians not under contract�probably
about 40 in various ministries of the Katanga government--
apparently will be recalled, however. Tshombe would react
strongly to such a move.
Gizenga, after having indicated several times that he
would not attend the Tananarive conference, informed UN of-
ficials on 4 March that he was eager to participate and asked
the UN to furnish transportation. The conference, originally
planned for Geneva, was suddenly reset for Tananarive on 1
March�apparently without the Malagasy government's having
been consulted. There is no known agenda, but some reports
indicate that the conference will last for six days. Malagasy
President Tsiranama, who apparently will take no part in the
meetings,on 3 March broadcast advice to the population to
receive the Congolese as brothers but not to take sides with
any faction.
Meanwhile, Gizenga continues to explore ways of getting
outside help for his hard-pressed regime.
--sEeRgz,
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Pakistan and USSR Sign Agreement on Soviet Aid in Oil Ex-
ploration
Agreement in principle on the Soviet credit was reached
in Moscow in December during the visit of the Pakistani min-
ister of fuel, power, and natural resources, but consumma-
tion of the deal was delayed pending further negotiations in
Karachi. Pakistani officials had originally hoped that Moscow
would agree to share the expense of exploration if oil is not
found--Pakistan paid only 25 percent of the cost of explora-
tion undertaken by Western oil companies--but this idea was
promptly dismissed by Soviet negotiators. Pakistani officials
also pressed for even more favorable credit terms than they
received, including repayment in nonconvertible rupees. In
the end Pakistan apparently conceded its main points, al-
though the Soviets, in agreeing to rupee repayment, probably
assured Pakistani officials that Moscow would not demand
conversion to hard currency unless acceptable exports were
not available.
The Soviet ambassador recently discussed publicly the
possibility of additional assistance in such areas as atomic-
energy development for peaceful purposes, medical training,
and agrarian problems. He also expressed hope that a cul-
tural agreement would be signed. Pakistani officials have
shown some reluctance with regard to further aid programs,
but conclusion of the oil deal may make it difficult for them
to turn down publicized offers in the social welfare field,
because these are keyed to popular demands and have stirred
considerable public interest.
Despite President Ayub's repeated reaffirmation of
Pakistan's pro-Western foreign policy and commitment to
the CENTO and SEATO alliances, neutralist tendencies have
been increasingly evident in government circles since mid-
1960. A number of top officials, sharing the view held by
many intellectuals and large sections of the public, question
the value of a rigid commitment to the West, noting that
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Sgtgt. lkari
neutralist countries often gain more by exploiting the competing
interests of both major power blocs. The military government
since early this year has permitted much of the press to carry
on a sustained editorial campaign calling for "gradual disen-
gagement from the role of a committed nation" and for improved
relations with the bloc. The line taken by the press presum-
ably has reinforced the latent neutralist sentiment of the bulk
of the population, especially in East Pakistan.
Cm n his latest conversation with Ambassador Rountree, Ayub
explained that in view of Pakistan's "extremely difficult stra-
tegic position"--with enemies or potential enemies on all sides,
excepting Iran--it was essential to avoid trouble with Commu-
nist China. Ayub felt he could not secure a border settlement
from Peiping--which would ease the threat to Pakistan's se-
curity from that direction--without modifying his government's
position on Chinese representation in the UN and specialized
agencies. Ayub indicated that Pakistani delegations would
abstain on procedural questions involving the seating of Chinese
Communist representatives, and would have to vote for ac-
ceptance should a substantive resolution come to a vote_
CAyub and his associates also calculate that an accommoda-
tion with Peiping will increase pressure on India in connection
with the Kashmir dispute, and that better relations with Moscow
will put Afghanistan at a disadvantage in its dispute with Pak-
istan over the Pushtoonsta,n issue
ThTeR.E.
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Bonn Raises Value of West cierman mark
[Foreign exchange trading in West Germany was briefly
interrupted on 4 March and then resumed at a new rate of four
German marks to the dollar, compared with the old rate of
4.23. Later, Economics Minister Erhard confirmed that Bonn
has revalued the mark and described himself as the "initiator
and driving force behind the action." He explained the move as
a necessary step to maintain the stability of the German cur-
rency and price levels in West Germany, as well as to stem the specu-
lative influx of dollars into the country. International financial
circles have long been concerned over Bonn's chronic balance-of-
payments surplus, which increased another $2 billion in 1960 for
� a total gold and foreign exchange reserve of more than $7.5 bil-
lion. Revaluation is intended to help correct this imbalance.
Although the move benefits German consumers through lower
or stable prices, German businessmen and labor leaders are
critical because of the resultant reduction of Bonn's competitive
price edge in world markets, which they fear may put a damper
on Bonn's continuing booni:-)
CWhile praising the move, some Western officials have ques-
tioned whether a 5-percent revaluation is sufficient to reverse the
imbalance. These officials suggest that instead of an immediate
flow of dollars back to the United States, speculators might stand
pat in anticipation of further changes not only in the mark but in
other currencies as well.
Lin a press interview, on 5 March, Erhard gave assurances that
in addition to revaluing the mark, Bonn intends to go ahead with
plans for a billion dollar aid program for underdeveloped coun-
tries as a further means of easing the US financial burden.
-carifriagrAmAL,
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Hostility to Trujillo Intensifying
Arrests and tortures have increased markedly in recent
weeks, particularly in traditionally anti-Trujillo cities in the
interior, according to information reaching the American Con-
sulate from a number of independent sources. Although oppo-
sition to Trujillo extends to all social and economic levels ex-
cept the generally politically inert peasantry, it has long been
led by middle class and professional elements who are moderate
and friendly to the United States. It is these groups that have
been most gravely weakened by the government's repression and
by the economic difficulties of the past two years. Dissident
leaders fear that unless Trujillo is soon ousted, there will be
little hope of a moderate successor.
The military and police organizations, which remain the
key to Trujillo's survival, show no sign of disaffection. How-
ever, relatives of certain key officers have been victims of
Trujillo in the past year, and these and other officers may well
desert him if they become convinced that his end is near.
The American Consulate noted on .3 March that Trujillo,
who is probably aware of the gravity of the current political and
economic situations, may be planning a simulated coup. Under
such a plan, the government would be turned over to a military
junta composed of officers ostensibly opposed to Trujillo but
actually controlled by him. After OAS sanctions against the
Dominican Republic had been lifted and the government assured
of a market for Dominican sugar in the US, Trujillo would be
recalled. Such a strategy is consistent with Trujillo's mentality
and with tactics he has used in the past.
--SEGREZ
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unnuurust ana uastro intmence Dominant in Latin American
L
Peace Congress
n attack on the US position in the Canal Zone would be en-
thusiastically supported by delegates to the conference, as well
as by observers who are attending from most Communist coun-
tries, including China. The Panamanian demand for sovereignty
may be used as part of a campaign against US retention of the
naval base at Guantanam6-3
['Thelma King has a long record of involvement in subversive
political activity, and her current plotting with other
Panamanian politicans has contributed to the instability of the
Chiari government. Reportedly subsidized by Castro, she has
been successful in arousing support for him among student and
other groups-3
Ehe conference seems to be the fruition of Communist ef-
forts to convene a Latin American "people's congress," originally
set for April 1959 when Castro's prestige was at its height. De-
signed to promote anti-US and pro-Castro sentiment, its agenda
includes such topics as anti-imperialism, anticolonialism, de-
fense of national resources, and disarmament, as well as support
of the Cuban revolution_D
(A
secretariat drawn from Communist-front peace groups in
sev ral Latin American countries has been in Mexico since De-
cember working out details of the meeting, Programs to arouse
interest have been held recently among student, labor, and cul-
tural groups in various countries, particularly in Mexico. Car-
denas--whose widespread popularity in Mexico gives him some
influence in the Lopez Mateos government�and other conference
organizers have met several times recently with the Soviet am-
bassador to Mexico, Bazykin, and two Venezuelan delegates called
on the envoy soon after their arrival on 16 Februar
CBazykin plans to leave soon on a Latin American tour prob-
ably designed to explore possibilities for increasing Soviet diplo-
matic and economic ties. Several countries, including Panama,
have delayed issuing visas requested by him, and Colombia has
actually refused to grant a visa, saying the "time is not appro-
priate for such a visit:";
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Ntaire
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 Investibation
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
--CCAFIDEN-T-LAL_
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