CURRENT INTELLIGENCE BULLETIN - 1956/06/10

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03015159
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: June 10, 1956

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CURRENT
INTELLIGENCE
BULLETIN
0
10 June 1956
Copy No. 103
JOCUMENT NO. 1.1
:0 CHANGE IN CLASS.
1.:VC:LASSiFIZD
CLASS. CHANGED TO: IS
NEXT REVIEW DATE
AUTH: HR 70-2
OATFtskill REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
3.3(h)(2)
3.5(c)
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1 LW ,JLUHL I
NIS
CONTENTS
1. CHINESE COMMUNIST LANDING PARTY THREATENS
VIETNAMESE-HELD ISLAND IN PARACEL GROUP
(page 3).
2. RESIGNATION OF KAGANOVICH
(page 5).
3. CHINA AND EAST EUROPEAN SATELLITES PUT ECONOMIC
PRESSURE ON JAPAN (page 6)0
4. NEW BURMESE CABINET
(page 7).
5. BRITAIN MAY RENEW EFFORTS TOWARD POLITICAL
SETTLEMENT FOR CYPRUS (page 8).
6. ARGENTINE REBELLION QUELLED
10 June 56
THE ARAB-ISRAELI SITUATION
(page 10)
(page 9).
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1. CHINESE COMMUNIST LANDING PARTY THREATENS
VIETNAMESE HELD ISLAND IN PARACEL GROUP
According to reports from a small Viet-
namese weather unit on Pattle Island in
the Paracel Group, just below the 17th
Parallel in the South China Sea, Chi-
nese Communist troops on 10 June landed
on Robert Island, three miles away. The weather unit, fear-
ing for the safety of the 20-man garrison, asked Saigon for
permission to evacuate.
South Vietnamese foreign minister Mau;
however, is urging immediate reinforcement of the garrison,
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10 June 56
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and President Diem is anxious to determine whether this
Chinese Communist "aggression" would result in "action
under the SEATO treaty."
Comment The Paracel Group, which lies about
200 miles southeast of Hainan Island,
is claimed by South Vietnam, Communist China and Nation-
alist China. Though strategically located astride the main
shipping lane through the South China Sea, the islands are
of little potential military value. None is large enough for
airfields, and the islands' waters are not suitable for naval
bases.
If Chinese Communist troops are actually
involved in the occupation of Robert Island, they may have
been sent there in anticipation of a possible Chinese Nation-
alist move in the Paracels, as well as to establish their
"sovereignty" overtly. Two Nationalist destroyer escorts,
which are now visiting the Spratly Islands, 500 miles to the
south, to give substance to Nationalist claims of sovereignty
over the Spratlys, may be ordered to the Paracels to dis-
lodge the Communists there, according to reports from Taipei
on 7 June.
The Communist landing party may have
involved civilians rather than troops, however. Some 200
Communist workers have been processing guano deposits
on one or two islands in the Paracels for the past nine months.
South Vietnam can be expected to offer
token resistance to any Communist effort to dislodge the Pat-
tie garrison. Saigon would undoubtedly utilize the incident
to support its claims that current Communist "reasonable-
ness" and professed desires for a peaceful reunification of
Vietnam are essentially a facade hiding aggressive intentions.
10 June 56
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Nair
2. RESIGNATION OF KAGANOVICH
The resignation of Lazar M. Kaganovich
as chairman of the State Committee on
Labor and Wages continues the pattern
of relieving members of the party presid-
ium and first deputy premiers from direct administrative
responsibilities. Of the five first deputy premiers--Kaga-
novich, Mikoyan, Molotov, Pervukhin, and Saburov�only
Saburov retains a specific post, that of chairman of the State
Commission for Current Planning. This policy is probably
intended to permit top members of the party hierarchy to de-
vote themselves to policy formulation and special problems.
Kaganovich was named chairman of the
State Committee on Labor and Wages when that body was cre-
ated in May 1955. As the USSR's foremost economic trouble-
shooter, with long experience in transport and heavy industry,
Kaganovich apparently was charged with increasing labor pro-
ductivity by revising labor norms and wage scales to conform
with technological advances and a more rational distribution
of manpower in industry and agriculture. Although Kaganovich
was one of Stalin's most trusted henchmen and, like Molotov,
has been rumored to have opposed the recent stepping up of
the anti-Stalin campaign, he does not appear to have resigned
in disfavor.
Kaganovich 's successor, Alexander P.
Volkov, appears to be a protege of Khrushchev, since he rose
through the party ranks to become a secretary of the Moscow
Oblast party committee under Khrushchev in 1950 and was trans-
ferred to government work as chairman of the executive com-
mittee of the Moscow Oblast soviet in 1952. He was not elected
to the party central committee until February 1956 at the 20th
Party Congress. (Concurred in by ORR)
10 June 56
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3. CHINA AND EAST EUROPEAN SATELLITES PUT
ECONOMIC PRESSURE ON JAPAN
he European
Satellites are co-operating with Com-
munist China to exercise economic
pressure on the Japanese.
Japan is currently running an unfavor=
able balance of trade with China exceeding $50,0009000.
East European Sate
lites have agreed not to pay for imports f mei Japan with
foreign exchange which Japan could use to reduce its debt
to China.
By this strategy and the refusal to ac-
cept additional commodities which Japan has offered to China,
Peiping is attempting to prevent Japan from paying its debt.
Peiping probably hopes to use Japan's increasing indebtedness
to force it to establish official economic relations with Commu-
nist China, a first step toward diplomatic recognition.
(Prepared jointly with ORR)
10 June 56
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4. NEW BURMESE CABINET
he make=up of the new Burmese cabinet
eaded by U Ba .Swe reveals that the So-
ialist Party, which heretofore has done
ost of its ruling from behind the scenes,
as greatly eniia�its direct control of the Burmese gov-
ernment. It also suggests that the present government lead-
ers do not actually want U Nu to return to the premiership
after a year's retirement.
Not only have the Socialists increased their
representation in the cabinet, but those ministers who are close-
ly identified with Nu have been relegated to relatively unimpor-
tant posts. The retention of Foreign Minister Hkun Hkio, a
Shan, is a sop to the ethnic minorities, as foreign policy will
undoubtedly continue to be formulated by the Socialist hierarchy,
possibly with the advice of U Nu.
Premier Ba Swe, who is also secretary gen-
eral of the Socialists, is retaining the portfolio of defense min-
ister and assuming control of national planning. His chief
rival in the Socialist Party, U Kyaw Nyein, will serve as min-
ister of the national economy and as a deputy premier, and their
apparently overlapping responsibilities could produce serious
friction. The other posts held by Socialists appear to be about
equally divided between the supporters of the two leaders.
10 June 56
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5. BRITAIN MAY RENEW EFFORTS TOWARD POLITICAL
SETTLEMENT FOR CYPRUS
Amid increasing public criticism, the
British government is preparing a new
attempt to get a political settlement re-
garding Cyprus while continuing its ef-
orts to pacify the island, according to the American em-
bassy in London.
In current British policy discussions,
the Colonial Office evidently is proposing resumption of
negotiations with Greece and Turkey on the basis of a
"liberal" constitution, to be drafted by a special British
committee, and a new formula that might go as far as set-
ting a date for the exercise of Cypriot self-determination.
Archbishop Makarios would not be brought into the negotia-
tions until "a later stage."
The embassy concludes that the ground is
laid for a difficult and embarrassing British policy shift, and
that at least some high officials are now prepared to contem-
plate eventual British withdrawal from political control of the
colony.
Comment This is the clearest indication yet received
that the British government has lost confi-
dence in the purely military approach to the Cyprus problem
it adopted on exiling Makarios on 9 March. The Greek govern-
ment would probably insist that Makarios participate in any
negotiations from the outset, and many British observers be-
lieve it is too late to obtain a political settlement short of
granting outright union of Cyprus with Greece.
10 June 56
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6. ARGENTINE REBELLION QUELLED
The Argentine provisional govern-
ment's drastic measures to put down
the brief rebellion of "Peronista=
Nationalist" elements on 9-10 June
demonstrated a determination to deal
swiftly and severely with any armed op-
position. Further violence could result,
however, if the regime prolongs rigorous
enforcement of the severe martial law
regulations it has announced and fails to consider some of
the complaints stated in the rebel communiqu�There is
considerable dissatisfaction among influential army groups
over the continuing atmosphere of political turmoil.
The rebels, reportedly led by retired
generals Raul Tanco and Juan Jose Valle, included parts of
army units in Buenos Aires and La Plata as well as retired
military and Peronista civilians. The government also
charged that Communist elements participated.
General Valle was reported in mid-May
planning a rebellion�possibly in two stages and including
high army officers on active duty--which had objectives sim-
ilar to those cited in the rebel manifesto. The manifesto
called for immediate release of all political and trade union
prisoners, returning control of the trade unions to the workers,
measures to fight "the enormous price increases," and general
elections within 180 days with no political party excluded.
Political tension in Argentina will proba-
bly increase with the approach of 16 June, the anniversary of
the first phase of the anti-Peron revolution of 1955, which
ended in overthrow of the government in September.
10 June 56
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THE ARAB-ISRAELI SITUATION
(Information as of 17002 10 June)
UN truce observers on the Israeli-Syrian
border have reported that the Israelis appear to be constructing
tactical defensive positions, probably bunkers, in the demilitar-
ized zone near Banat Yacov. The observers, who have hereto-
fore had free access to the area where the construction is taking
place, have been forcibly prevented from approaching the area on
two occasions since 7 June. The chairman of the Israeli-Syrian
mixed armistice commission believes the Israelis eventually will
allow an investigation, but that they will not heed a UN request to .
demolish the construction. The chairman noted that the Israeli
attitude toward the UN truce teams has stiffened since the 4 June
Security Council resolution, which produced a very unfavorable
reaction in Israel.
The American military attache in Caro be�
lieves that a previous report of cancellation of army leaves begin-
ning 5 June is true, although the Egyptian army foreign liaison
officer has said it is only a rumor. The attach�urther believes,
however, that the cancellation is connected with the political cele-
brations which begin 18 June and culminate in the plebiscite on
23 June,
10 June 56
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