CENTRAL INTELLIGENCE BULLETIN - 1960/05/17

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03160550
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 15
• Document Creation Date: March 17, 2020
• Document Release Date: March 26, 2020
• Publication Date: May 17, 1960

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17 May 1960
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17 MAY 1960
I. THE COMMUNIST BLOC
Chinese Communist militia system ap-
parently has some domestic opposition.
II. ASIA-AFRICA
Turkish tension revives as rival political
demonstrators clash.
Afghanistan may have asked USSR to
build dam near Iranian border.
III. THE WEST
USSR proposes three-year extension of
oil-wool trade with Uruguay.
LATE ITEM
Chronology of Communist exploitation of
(DU-2 incident--Page 6.
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agreement with Afghanistan on division of the Helmand waters
will increase if the USSR decides to build this dam.
(Page 4)
III. THE WEST
Uruguay: _resident Nardone, head of Uruguay's new con-
servative government, has told Ambassador Woodward that he
is inclined to accept a new Soviet trade proposal which expands
for a three-year period Moscow's one-year oil-for-wool pro-
posal of last November. The new offer includes an immediate
cash purchase of $13,000,000 worth of low-grade and defective
wool--an attractive feature in view of Uruguay's critical foreign
exchange situation and its problems in disposing of this season's
wool clipi: (Page 5)
LATE ITEM
For a chronology of Communist exploitation of the U-2 inci-
dent, see Page 6.
17 Itlay 60
DAILY BRIEF ii
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CONFIDENTIAL
I. THE COMMUNIST BLOC
Peiping Armed Forces Chief Defends Militia Program
Lo Jui-ching, chief of Peiping's General Staff, has pub-
lished a long justification for expanding the size and functions
of Communist China's militia forces. The motive for the ar-
ticle--in the 15 May issue of Red Flag, theoretical journal of
the Chinese Communist party--is indicated by Lo's criticizm
of the views of "some persons" who hold that the regular forces
are sufficient for defense of the country and that militia organ-
izations are of no value in the campaign to increase production.
In refuting these views, Lo leans heavily on citations from the
writings of Mao Tse-tung advocating a large and vigorous mili-
tia.
In an apparent attempt to placate those who oppose Peiping's
militia program, Lo concedes that the regular forces are the
"backbone in safeguarding national defense in peacetime and the
main force in organizing and expanding armed units in wartime."
He maintains, however, that the task of defending a country as
large as China with inferior weapons necessitates arming all of
the people.
Lob article is the latest move in a campaign to enlarge the
scope of the militia that has included two national conferences
and numerous provincial conferences this year. The article re-
affirms recent declarations that the principal mission of the mili-
tia at this time is participation in the drive to increase produc-
tion both in agriculture and industry.
CONFIDENTIAL
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Page 1
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SECRET
IL ASIA-AFRICA
Turkish Internal `Situation
he clashes between pro- and anti-Menderes elements in
Izmir on 15 May may be followed by others throughout Turkey
as the governing Democratic party (DP) attempts to demon-
strate widespread support for the Turkish premier. Opposi-
tion Republican People's party (RPP) leaders anticipate that
the Democrats *ill try to recoup recent losses of support by
staging a series of pro-DP demonstrations in rural districts
and outlying urban communities. A high-ranking RPP spokes-
man has warned that his party will attempt to stage counter-
demonstrations against the government, relying to a large de-
gree on the discontent spread by students who returned to their
homes after the universities in Istanbul and Ankara were closed)
Ole army continues to maintain a vigilant but nonpartisan
attitude. senior army of-
ficers have actively sought to prevent the police from using
martial law as a pretext for arresting RPP adherents and search-
i ng their houses. New demonstrations and the resulting vio-
lence, however, would increase the pressures on the army to
adopt a policy in favor, of the present government]
LThe possibility that the government will call a surprise elec-
tion has been voiced by RPP officials. An election held in the
near future would pose serious difficulties for the opposition,
which has been prohibited from engaging in political activity since
18 April when the Grand National Assembly established the com-
mission to investigate the activities of the RPP. Menderes' state-
ment in his speech in Izmir on 15 May that he wants elections
"as soon as possible" will increase RPP fears that the premier
may attempt to capitalize on the present weakened condition of
his oppositior.9
Qeanwhile, rumors continue to circulate that Menderes is
suffering from mental disturbances.
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says that Menderes' nervousness and in-
somnia have reached a state where the maximum safe dosage
of tranquilizers is no longer effective. Reports that the pre-
mier is undergoing treatment for mental illness have long been
heard in Turkey, and the opposition would tend to exaggerate
such reports at this time.3
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Afghans Apparently Seeking Soviet Aid for Dam Project Near
Iranian Border
Kabul is probably negotiating for Soviet aid for the construc-
tion of a new $10,000,000 diversion dam projected by the Afghans
for the lower Helmand River valley. Afghan Prime Minister
Daud had originally requested US assistance for this project and
had hinted he would turn to the USSR if American aid were re-
fused. The presence of Soviet engineers during the past several
weeks in southwest Afghanistan near the Iranian and Pakistani
borders suggests the USSR had undertaken preliminary survey
work and may soon reach a decision on building the dam.
Iran's concern over its inability to settle its dispute with
Afghanistan regarding the division of the Helmand waters will be
increased if the USSR decides to construct this dam. Iran prob-
ably would regard construction of the proposed dam as aimed at
forcing it to accept what it regards as an unsatisfactory distribu-
tion of the waters.
Such an undertaking presumably could divert some personnel
and resources of Afghanistan's Helmand Valley Authority now be-
ing used to develop agriculture in the more promising upper Hel-
mand, where American assistance has been used for some years
to construct irrigation dams and canals. The presence of Soviet
engineers for several weeks in a provincial capital located in the
US project area, and Afghanistan's dissatisfaction over the slow
development of agriculture there suggest the further possibility
that Soviet technicians and advisers may be employed to help
speed up exploitation of newly irrigated lands in the upper Hel-
mand.
Daud now has been visiting the USSR for a month and may
have been influenced loy Soviet views on problems and develop-
ments in his part of Asia. He may, therefore, be more willing
than in the past to give the USSR a role in the development of the
Helmand.
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III. THE WEST
CONFIDENTIAL
Uruguayan Government Interested in fsTew Soviet Trade Offer
adoscow's riew trade offei4 to Uruguay apparently has aroused
greater interest within the conservative Uruguayan Government
than the November 1959 offer, chiefly because it involves an im-
mediate Soviet cash purchase of $13,000,000 worth of almost un-
marketable wool, most of it low grade and defective. Uruguay's
already critical foreign exchange situation is continuing to de-
teriorate despite the enactment last December of a foreign ex-
change reform law. Wool exports, which normally provide about
half of Uruguay's foreign exchange, have slumped sharply as a
result of flood damage to the current wool clip and resistance by
wool producers to export taxes under the new law,)
[tinder the new proposal, Moscow would purchase $75,000,000
worth of wool over a three-year period if. Uruguay would agree to
buy $50,000,000 worth of oil. On an annual basis, these amounts
represent about 30 percent of Uruguay's total wool sales for 1958
and about half the country's annual crude oil requirements. The
November proposal covered only one year, and the amounts in-
volved were one third as great as those in the present offer.]
CThe Uruguayan government which took office 13 months ago
has indicated consistently that it would like to reverse the trend
of the last few years toward greater dependence on Soviet mar-
kets, but has found no alternative. The Executive Council post-
poned a decision on Moscow's November offer, hoping it could get
long-term credit from Western oil suppliers. The government
also hoped its December foreign exchange reform law would pro-
vide the basis for extensive Western financial assistance. There
are indications, however, that the government solicited the new
Soviet offer, probably to gain some relief from its mounting
troubles with economic reformj
apparently. Uruguay will seek some modifications in the Soviet
offer--principally an increase in the amount of low-grade wool to
be purchased immediately. The government may also request a
7durtion of the time period of the agreement from 36 to 18 months.*)
�ee. NRDENTIAL
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Chronology of Communist Exploitation of U-2 Incident
� 5 May - Khrushchev speech to Supreme Soviet reveals that an
American plane has been brought down inside USSR on
1 May; deliberately withholds important details; gives
pessimistic assessment of summit prospects.
7 May - Khrushchev speech to closing session of Supreme Soviet
gives further details, including captured pilot's admission
that flight had espionage mission.
E9. May - Private conversation between Khrushchev and Ambassa-
dor Thompson in which Khrushchev expressed his "resent-
ment" of 9 May statement by State Department, particularly
argument that "because USSR had closed areas and secrets,
this was justification for overflights." Khrushchev also
reaffirmed intention announced on 5 May to take issue to
UN.
9 May - Khrushchev in statement at Czech embassy reception
carries his criticism further, stating "I do not preclude
that the government of the United States knew of this
flight."
9 May - Chinese Communist People's Daily editorial says, in ef-
fect, "We told you" that imperialism has always been up to
no good, charges that "concealing crimes of imperialism
only lulls the vigilance of the people."
10 May - Formal Soviet protest to the United States.
11 May - Exhibition of U-2 evidence opened in Moscow. Gromyko
holds formal press conference charging US with act of ag-
gression. Khrushchev in informal press conference crit-
icizes President and asserts USSR will take issue to UN
General Assembly if blocked in the Security Council; indi-
cates that question of President's trip to USSR should be
further discussed at Paris.
12 May - TASS in� official, release carefully edits Khrushchev's in-
formal press conference of preceding day to give impres-
sion that USSR feels summit conference should take place.
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13 May - Communist party headquarters in Moscow in a radio-
telephone conversation with a party official in 1Camchatka
gives orders for immediate organization of protest meet-
ings "everywhere" against "provocative US statements" on
the U-2 incident.
13 May - Chinese Communist People's Daily editorial, specifi-
cally not aimed at US, states US is threatening security
of the world; peace can be won only by aggressive exposure
of US schemes.
14 May - Khrushchev arrives in Paris and makes brief arrival
statement without direct mention of U-2 affair; Soviet press
increasingly involves the President in its criticism.
(15 May - Khrushchev in conversations with Macmillan and De Gaulle
shows them bulk cdr written statement giving ultimatum to the
President
16 May - People's Daily, in abrupt shift, gives first warm endorse-
ment in months to Soviet summit policy, says Chinese Com-
munists have consistently supported the drive for summit talks
and firmly support the "positive attitude" of the USSR in seek-
ing to ease world tension.
Ll_6 May - Khrushchev refuses preliminary meeting with President,
De Gaulle and Macmillan alone. Meeting with advisers be-
gins one hour late. Khrushchev delivers ultimatum shown
previous day to Macmillan and De Gaulle; proposes postpone-
ment of President's visit to some "riper" date and postpone-
ment of summit talks for six to eight months; in abusive
language demands as conditions for proceeding with talks
on summit agenda items that US condemn previous overflights,
punish those responsible, and renounce future flights. Khru-
shchev leaves door ajar for possible resumption of summit
talks, however, by suggesting that President make his summit
statement public, by indicating he does not oppose bilateral
conversations with President, and by not actually leaving
Paris. Both President's and Khrushchev's statements to con-
ference made public after meeting,D
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SECRET
16 May - Three Western heads of government confer. Macmillan
sees Khrushchev.
17 May - Rumors assert that Macmillan will have another meeting
with Khrushchev, and that Khrushchev will hold a press con-
ference.
17 may 60 CENTO A I Ilk ITC1 I letwor.c 121 II I CTIAI
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CONFIDENTIAL
N."
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
Director, Office of Civil and Defense Mobilization
Director, National Aeronautics and Space Administration
Special Assistant for Security Operations Coordination
Chairman, Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Executive Secretary, National Security Council
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 Political Affairs
The Deputy Under Secretary of State for Political Affairs
The Deputy Under Secretary of State 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
Assistant Secretary of Defense for International Security Affairs
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Chairman, The Joint Chiefs of Staff
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
Commandant, United States Marine Corps
Assistant to Secretary of Defense for Special Operations
Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of Army
Director of Naval Intelligence, Department of Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Department of Commerce
The Secretary of Commerce
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
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