Document Type: 
Document Number (FOIA) /ESDN (CREST): 
Release Decision: 
Original Classification: 
Document Page Count: 
Document Creation Date: 
January 27, 2020
Document Release Date: 
January 30, 2020
Sequence Number: 
Case Number: 
Publication Date: 
February 17, 1958
PDF icon CENTRAL INTELLIGENCE BULL[15772362].pdf595.45 KB
Approved for Release: 2019/08/20 C03169409 ivr at�icci 17 February 1958 Copy No. CENTRAL IYTELLIGENCE BULLETIN DOCUMENT NO. NO CHANGE IN CLASS. I I DECLASSIFIED CLASS. CHANGED TO: Tzsoi 6 NEXT REVIEW DATE. AUTHi HR 7 2 DATE/ ed TOP SECRET j;orkp�pr�o4dfor Release: . . 201 9/08/0053169(OV REVIEWER: 4040kpproved for Release: 2019/08/20 C03169409 TAD e121CHT Approved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 C03169409 1 v." 16. Li I Ni101 17 FEBRUARY 1958 I. THE COMMUNIST BLOC Soviet leaders may be engaged in in- ternal policy dispute. II. ASIA-AFRICA Proclamation of rival government dims prospects for peaceful settle- ment of Indonesian issues. Tension in Tunisia subsides; both sides hold to basic positions. Moroccan officials fear repercus- sions of Tunisian situation. Syrian military continues apprehen- sive over intervention and inter opposition to union with Egypt. Japanese prime minister under busi- ness pressure to cede diplomatic privileges to Peiping. Chinese Nationalist cabinet resigna- tion may lead to drive against cor- ruption. III. THE WEST West German budget deficit will prob- ably increase popular interest in dis- armament proposals. Legalization of Venezuelan Communist party can lead to serious military- civilian friction. TOP SECRET Approved for Release: 2019/08/20 C03169409 x Approved for Release: 2019/08/20 C03169409 T-G4P�SEeftEr� NroP CENTRAL INTELLIGENCE BULLETIN 17 February 1958 DAILY BRIEF USSR: The Soviet leaders may be currently embroiled in an internal policy dispute. The proceedings of a high- level economic conference which met early in February have not been publicized, suggesting that disagreements arose which are still unresolved. Ithrushchev's machine tractor station proposals have also not received the ex- ected propaganda build-up in the Soviet press. (Page 1) LI I. THE COMMUNIST BLOC IL ASIA-AFRICA Indonesia; The 15 February proclamation of a rival Indonesian government by Lt. Col. Hussein in Central Su- matra seems to preclude a peaceful solution of the dissident problem unless President Sukarno replaces the Djuanda cabi- net with a new, strongly anti-Communist government. The prospects are that Djakarta will declare the new government illegal and try to suppress it by whatever means are avail- ; 10��able, including economic sanctions, political subversion g" and perhaps military action. The viability of the dissident movement will depend on its making satisfactory economic arrangements with foreign commercial interests in Suma- tra and obtaining support from other areas of Indonesia. (Page 2) Tunisian situation: Tension in Tunisia has subsided IIj somewhat FranTers�announcement that it will accept Amer- ican good offices probably will have a further moderating \-\ TOP SECRET lApproved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 CO3169409. *idTIT 'crr effect, but Bourguiba continues to demand total French evacuation. Morocco: At an emergency cabinet meeting bf_the Moroccan Government, fear was expressed that Tunisian developments may incite popular demands for the evacua- tion of French troops from Morocco. Several ministers also criticized the United States for a "deliberate policy of forcing North African countries" to accept French pre-eminence in the area, (Page 3) Syrian internal situation: The Syrian Army command remains apprehensive over Possible Western military inter- vention coordinated with antire ime activities of internal opponents to union with Egypt. There are no indications that any such action is like- ly to occur. Some civilians and army officers are reported to have been arrested, and the authorities are attempting to recall arms issued to certain reserves and public resist- ance forces which now are regarded as of doubtful loyalty. (Page 4) Japan - Communist China: Strong domestic pressure In Japan for increased trade with Communist China is forc- ing Prime Minister Kishi to give ground in the face of de- mands by Peiping that diplomatic privileges be accorded a prospective Communist Chinese trade mission in Japan. Peiping has refused to conclude a new unofficial trade agree- ment until concessions are made on this issue. (Page 5) Taiwan: The resignation of Chinese Nationalist Pre- mier O. K. Yui and his cabinet on 15 February may be fol- lowed by further efforts by Chiang Kai-shek to eliminate corruption. YuPs resignation resulted from a reprimand reluctantly delivered by Chiang for "dereliction of duty" and misuse of government funds. Chiang, who had strongly supported Yui, however. probably will cipiay accepting Yuic's resignation. (Page 6) 17 Feb 58 DAILY BRIEF ii \\\ lApproved for Release: 2019/08/20 C0316940k\ 0\�\ Approved for Release: 2019/08/20 C03169409 14� TOP SECRET wow III. THE WEST West Germany: The Bonn government faces deficit financing for the first time since 1952. The sizable deficit expected at the end of this fiscal year on 31 March will be increased in subsequent years by the schedule of rising military expenditures unless taxes are substantially raised. The German taxpayer is expected to show growing interest in disarmament proposals as offering an easier alternative. Page 7) Venezuela: The legalization of the Venezuelan Commu- nist party�now under consideration by the governing junta-- could lead to serious friction between the military, who oppose the move, and the non-Communist party leaders, who seem to favor it. The political situation has remained outwardly calm since late January, but a representative group of officers ad- vised the junta at that time that the military would withdraw its united Qvinnrir+ in +ha avail+ +ha re,,,,,m,,r,;Q+ na ri-x7 III A To/3 1.410 !UT nized. \N 17 Feb 58 DAILY BRIEF iii TOP SECRET 17;;;;;7M7ii;1;T;7iiiM7Oiai'ECITrgiCik 11 Approved for Release: 2019/08/20 C03169409 4. .11�..4.1. I AL AL .MA14 I. THE COMMUNIST BLOC Possible Soviet Policy Dispute The unusual reticence of the Soviet press concerning recent high-level economic meetings and policy proposals suggests that the Kremlin leaders are again in disagree- ment over their domestic economic policy. The work of a recent nationwide conference of sovnarkhozy chairmen and oblast party secretaries has been treated with noticeable reserve. Speeches made at the conference by Khrushchev and planning boss Kuzmin have not been published or com- mented on. Discussions of the proper apportionment of resources and investment funds and the problem of cen- tralized political control may have revived old disagree, ments. Although there have been isolated moves to implement Khrushchevis proposal to transfer Soviet agricultural ma- chinery from the machine tractor stations to the collective farms, this radical step has been largely neglected in So- viet propaganda. The fact that most Soviet leaders have been out of pub.. lic view since 8 February suggests that economic problems are currently being scrutinized at the highest level. CONFIDENTIAL 17 Feb 58 CFMTDAI !MITI I inckirr RI II I PTIkl Page 1 Approved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 C03169409 *110 II. ASIA-AFRICA Djakarta Likely to Take Strong Measures Against Dissidents in Sumatra The Indonesian Government in Djakarta will almost certainly resort to strong measures in an effort to sup- press the rival regime proclaimed in Central Sumatra on 15 February. Such measures would include economic sanctions, political subversion, and perhaps military force. Army Chief of Staff Nasution and a majority of the cabinet are in favor of quick military action which could involve air strikes, a limited naval blockade, and commando raids. President Sukarno's 16 February statement following his return to Djakarta ignored the Sumatran problem, but it seems likely he will advocate a strong policy against the dissidents. In this he will be strongly supported by the Indonesian Communist party. Sumatra has in its favor the reluctance of large ele- ments of both the army and civilian groups to take up arms against fellow Indonesians. Lt. Col. Barlian in South Suma- tra, for instance, has so far refused to support the rival government, but has indicated he would refuse to permit central government forces access to Central Sumatra through his own command. Two of the three army territorial com- manders in Java reportedly would order their troops not to participate in a civil war. The viability of the rebel government depends on its ability to counter Djakarta's and the Communist party's ef- forts at subversion and to win economic and political sup- port. The dissidents hope to make business arrangements with foreign economic interests in Sumatra and are counting on support from/other areas of': Indonesia and, if possible, from foreign countries./ 17 Feb 58 rCkITD A I IN.ITCI I 1Clk.le'E bull C7114.1 Page 2 Approved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 C03169409 NSW Morocco_ Anticipates Deterioration in Relations With France At an emergency cabinet meeting in Rabat on 11 February to assess the repercussions of the French bombing of a Tunisian border village three days ear- lier, the Moroccan Government recognized that Tuni- sian developments were likely to incite popular de- mands for the evacuation of French troops from Moroc- co. This would probably also involve agitation for the withdrawal of Spanish and American forces. The cabinet formally decided to give all possible political support to Tunisia. It recognized that the No- vember offer by Morocco and Tunisia of their good of- fices for an Algerian settlement was no longer useful and that Morocco's moderating influence with the Al- gerian rebels would decline because rebel headquarters reportedly had moved to Cairo. Several ministers criticized the United States for a "deliberate policy of forcing North ,African countries" to accept French pre-eminence there. Probably at the instance of Minister of National Economy Bouabid, who has been particularly resentful over the language of the American economic aid agreement now being negotiated and has been irritated over recent economic aid to France, the cabinet unanimously agreed that American enndi firms fnr riPfPrme support were wholly unacceptable. 17 Feb 58 CFKITRAI IKITFI I inFtwr RI II I PTIN page 3 Approved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 C03169409 - The Syrian Internal Situation Syrian security authorities are taking great precau- tions to prevent any trouble before the 21 February pleb- iscite over union with Egypt. The press announced that some army reserves have been called up and the public resistance organization has been ordered on the alert. At the same time certain reserves and resistance forces re- garded as unreliable by the regime are being disarmed. While the government has not officially released details, the press has been allowed free reign to speculate on the number and character of individuals arrested following the uncovering of a "plot" against the regime. In con- trast to the ostensible external peril, security precautions within Damascus are relaxed and tourists are being al- lowed to circulate freely. The present crisis appears to stem from the active opposition of certain civilian and military elements to union with Egypt and has been heightened further by rumors of intervention by external forces. Publicizing the alleged conspiracy at this time appears to be a device to whip up support for the plebiscite. 17 Feb 58 rrk1TD A I IKITFI In.FNCF RI II I FTIN page 4 Approved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 C03169409 ldfV M. � ..p. Japan to Compromise on Trade Mission Exchange With Peiping Japanese Prime Minister Kishi is moving toward de facto recognition of Communist China in order to satisfy strong domestic pressures for increased trade with the China mainland. Kishi informed Ambassador MacArthur on 14 February that these pressures, which are wide- spread and represent all political elements, were forc- ing him to compromise on terms for an exchange of permanent trade missions. Behind this pressure is Peiping's refusal to conclude a new private trade agreement unless the trade mission issue is settled. Communist China has insisted that mem- bers of its proposed mission in Japan be accorded full diplomatic privileges and not be fingerprinted as required by present Japanese law. Kishi plans to relax the fingerprint requirement and to extend certain diplomatic privileges which presumably would include guarantees of personal safety and immunity against arrest, use of communication codes, and freedom to travel throughout Japan. He has insisted, however, that the number of Chinese representatives be limited to 15 and that these measures should not be interpreted as an indica- tion of Tokyo's willingness to grant formal diplomatic recog- nition. Japanese economic interests believe that the drop in Sino-Japanese trade to $126,000,000 in 1957, or 16 percent less than the previous year, is due to the absence of a new trade agreement. Meanwhile, Peiping has consistehtly in- serted new issues with political overtones into the trade picture and Indicated that, unless they are re SO lved,, the Sino- Japanese trade trade potential cannot be realized. CONFWENTIJI 17 Feb 58 CENTRAL INTELLIGENCE BULLETIN Page 5 Approved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 C03169409 ...II V a. mn. � Noir Chinese Nationalist Cabinet Offers Resignation President Chiang Kai-shek of Nationalist China may feel compelled to take stronger measures against official corruption as the result of the resignation of Premier 0. K. Yui and his cabinet on 15 February. Yuits resignation resulted from a reprimand reluctantly delivered by Chiang for "dereliction of duty" and misuse of government funds, for which Yui was impeached last December by the Control Yuan, the inspectorate branch of the government. Chiang had strongly opposed Ytii's impeachment. While Yuits resignation probably does not foreshadow any change in Nationalist policy, it appears symptomatic of weakening Kuomintang party discipline and increased harassment of the administration by the inspectorate and legislative branches of the government. Yui has long desired to give up the premiership, but heretofore President Chiang has always refused his re- quest. This time the President will be likely to accept Yui's resignation, but probably not until sufficient time has elapsed to cushion the administration's loss of prestige. Chiang may have trouble, however, finding an acceptable successor to the premiership, a post subject to strong harassment from the Legislative and Control Yuans. -CONFIDENTIAL 17 Feb 58 eFKITDAI IMTPI I ir-zpi�IrF RI III FTIKI Approved for Release: 2019/08/20 C03169409 Page 6 Approved for Release: 2019/08/20 C03169409 Notv III. THE WEST West Germany's Budgetary Deficit The West German Government, largely because of rising defense expenditures, faces deficit financing for the first time since 1952. It will end the current fiscal year on 31 March with a deficit which American officials feel may reach $960,000,000. The American Embassy in Bonn feels that, with defense costs expected to rise from - $3 billion this year to $3.8 billion in fiscal 1959-60 and $4.7 billion in fiscal 1960-61, the deficit will continue to rise substantially unless "politically unacceptable" meas- ures such as high taxes are adopted. The 1958-59 budget has been approved in principle by the Bonn cabinet and will be debated by the Bundestag in early March. It makes no provision for payment of sup- port costs to foreign troops. The West German Govern- ment plans a loan to compensate for the deficit in this bdget and one top official in Bonn has indicated next year will see a sharp increase in German taxes to meet rising military costs. The American EMbassy fee's, however, that the German taxpayer is likely, to be increas- ingly interested in limited disarmament as an easier al- ternative to the defense burden. SECRET 17 Feb 58 CENTRAL INTELLIGENCE BULLETIN Page .7 Approved for Release: 2019/08/20 C03169409 Approved for Release: 2019/08/20 C03169409 N...011.11 V E. JULA".4.4.L V41. ./Ia ALMA 14.�4 %Me DISTRIBUTION 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 Mobilization Special Assistant for Security Operations Coordination Operations Coordinating Board Board of Consultants on Foreign Intelligence Activities Special Assistant for Foreign Economic Policy The Treasury Department The Secretary of the Treasury The Department of State The Secretary of State The Under Secretary of State The Deputy Under Secretary for Political Affairs The Deputy Under Secretary for Administration The Deputy Under Secretary for Economic Affairs The Counselor Director, International Cooperation Administration 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 Deputy Director for Intelligence, The Joint Staff Assistant Chief of Staff, 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 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 d'-'40-17\777711-17/7 worry 4 y Approved for Release: 2019/08/20 C03169409