CURRENT INTELLIGENCE BULLETIN - 1957/11/01

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03176906
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 15
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: November 1, 1957

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CURRENT
INTELLIGENCE
BULLETIN
CO3176906
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1 November 1957
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7
:JOB NO
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
3.5(c)
3.3(h)(2)
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CONTENTS
Afdl. ZHUKOV REPORTEDLY ASSIGNED TO URAL MILITARY
DISTRICT (page 3).
ri0 2. USSR PREPARING NEW PROPOSALS TO EGYPT
(page 4).
Jj)3. TITO'S CONCERN OVER SOVIET POLICY IN MIDDLE EAST
(page 5).
4. CHINESE REPRESENTATION ISSUE AT THE NEW DELHI
RED CROSS CONFERENCE (page 6).
5. JAPAN APPROVES CREDIT EXTENSION TO INDIA
(page 7).
0 6� PRESIDENT SUKARNO POSTPONES TOUR ABROAD TO DEAL
WITH DOMESTIC PROBLEMS (page 8).
7. SYRIAN INTERNAL SITUATION
tio 8. POSSIBLE NEW REBEL OUTBREAK IN OMAN
(page 10).
9. TUNISIAN-FRENCH RELATIONS
0 /10. FRENCH POLITICAL CRISIS
(page 9).
(page 11).
(page 12).
ECONOMICS MINISTER ERHARD APPOINTED VICE CHANCEL-
LOR IN NEW BONN CABINET (page 13).
ANNEX--Conclusions of the Watch Report of the Intelligence
Advisory Committee
(page 14).
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1. ZHUKOV REPORTEDLY ASSIGNED TO URAL
MILITARY DISTRICT
Comment on:
An official communiqu�n the final de-
cision in the Zhukov case will be issued
on 1 or 2 November,
It will probably state
that Zhukov has been removed from the party central committee
and presidium and has been relegated to a post in the Ural Mil-
itary District.
Khrushchev, at
the central committee meeting on Zhukov's future),s�T that
Stalin acted correctly in banishing Zhukov after World War II.
If Khrushchev decides to engage in public
defamation of Zhukov's character, it is not unlikely that there
will be some manifestations of discontent in the army and in-
creased apathy and cynicism among the populace.
some members of the central committee
have advocated a further shake-up in the Soviet high command.
the Ural Military District is more important
than the ordinary provincial military district and might in fact
be an alternate�presumably wartime�headquarters of the Min-
istry of Defense. This supposition is based largely on the fact
that the present commander of the district, Army General N. I.
Krylov, apparently held important assignments during 1955-56,
and had previously been a depu1v to Marshal M.linovsky in the
Far Eastern Military District.
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2. USSR PREPARING NEW PROPOSALS TO EGYPT
Comment on:
The USSR may make new "military,
political, and economic proposals"
when Egyptian Defense Minister Amir
visits Moscow in November.
In view of Egypt's recent discussions with
the UK and France and adverse developments in the UN on the
Turkish-Syrian issue, Moscow probably feels the neett for
greater attention to its relationship with Egypt. Moscow may
now for the first time be preparing to make specific offers
to assist in the economic development of Egypt. The Soviet
commission which concluded an economic aid agreement with
Syria on 28 October is now visiting Cairo at the request of the
Egyptian government.
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3. TITO'S CONCERN OVER SOVIET POLICY IN
MIDDLE EAST
Co mulent-pn:
Yugoslav concern over Soviet policies
in the Middle East may account for Tito's
decision to cancel his trip to the Far East
this winter as well as to Moscow next week.
The Indonesian foreign minister told Amer-
ican Ambassador Allison on 29 October that
Tito's visit to Indonesia in January had been
postponed indefinitely because of Tito's worry
over promems nearer home, such as the Middle East and the bel-
ligerent tone of the USSR in international affairs.
While Belgrade's publicly stated views have
generally been similar to those of the USSR regarding the Middle
East, Belgrade is not in sympathy with
Moscow's efforts to exploit the Turkish-Syrian crisis. Tito, dur-
ing his visit to Egypt in January 1956, warned President Nasir on
too close an association with the USSR.
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4. CHINESE REPRESENTATION ISSUE AT THE NEW DELHI
RED CROSS CONFERENCE
Comnient on:
Prospects of getting a Chinese National-
ist delegation seated by the International
Red Cross Conference in New Delhi--at
which a Chinese Communist delegation
as already been seated--appear to have dimmed considerably
since the session formally opened on 28 October. Chief US
delegate McClintock, who previously warned that a showdown
vote might be so close that it would be interpreted in the world
press as the "beginning of a landslide toward eventual admis-
sion of Communist China to the UN," now estimates that any
resolution specifically directed at seating the Nationalists is
almost certain to be defeated. He still holds out some hope for
admitting the Nationalists through a purely procedural resolu-
tion, but even this faces opposition from the Indian chairwoman.
The Red Cross conference in Toronto in
1952 resolved a similar dispute by seating both rival govern-
ment delegations. The position of the Chinese Nationalists,
however, has been seriously weakened this time by their long
delay in rejecting an invitation addressed to them last May as
the "Government of Formosa:"
The Chinese Communists in recent years
have insisted that there could be no further application of the
"two Chinas" concept in resolving representation issues in in-
ternational events. If the Nationalists are eventually seated.
the Chinese Communists will walk out
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5. JAPAN APPROVES CREDIT EXTENSION TO INDIA
Comment on:
The Japanese cabinet has approved yen
credits, estimated at between $30,000,000
and $50,0002000, to finance Japanese ex-
ports to India, the American embassy in
Tokyo reports. The action followed dis-
cuss ons � e ween rime Ministers Kishi and Nehru during the
latter's visit to Japan early in October. The Japanese finance
minister had initially opposed the plan as one which Japan
could not afford.
A mission of Indian experts is scheduled
to go to Tokyo shortly to negotiate details. Actual terms have
not been determined, but the Japan Export-Import Bank, a gov-
ernment institution, probably will finance the exports at an
interest rate of 4-5 percent�
In addition to this governmental action, a
mission of Japanese textile machinery manufacturers has con-
cluded an agreement with the Indian State Trading Corporation
for a long-term credit under which India will import textile ma-
chinery from Japan on a deferred-payment basis. The amount
of credit was not announced.
These offers derive from the Japanese
program to improve economic cooperation with South and South-
east Asia. India has been led to accept Japan's offer because
of its critical foreign exchange problem and its needs in connec-
tion with the Second Five-Year Plan goals. Other discussions are
expected on a long-term agreement for the exchange of Indian iron
ore and Japanese capital goods.
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6. PRESIDENT SUKARNO POSTPONES TOUR ABROAD TO
DEAL WITH DOMESTIC PROBLEMS
Comment on:
President Sukarno has postponed his
long-planned trip to southern Asia and
Latin America until late December to
deal with the "unsettled conditions?' in
Indonesia. He is probably particularly
anxious to continue his personal direc-
tion of the government's current cam-
paign for the "return" of Netherlands
New Guinea. According to the minister
of inforniation, the second stage of action for the "liberation
of West Irian" will begin on 10 November and will be "executed
more fiercely." A Foreign Ministry official has stated that
action taken so far is only the "expression of sentiments liv-
ing among the people, executed in a democratic way."
Sukarno undoubtedly hopes this campaign
will demonstrate to the world and to the United Nations the
intensity of Indonesia's demand for New Guinea. His continu-
ing demand for national unity, however, indicates that he also
regards the New Guinea campaign as an important weapon
against provincial dissidence.
There have as yet been no significant re-
actions from the provinces. Some support for the New Guinea
campaign may develop outside Java, particularly in East Indo-
nesia because of its geographic proximity to the disputed terri-
tory. In general, however, dissident leaders can be expected
to give only lip service to the matter and to refuse to be de-
flected from their own demands for greater local autonomy.
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7. SYRIAN INTERNAL SITUATION
Divisive tendencies in the Syrian gov-
ernment which have been in abeyance
during the "Turkish crisis" may in-
crease now that international tension ap-
pears to be subsiding.
A civilian faction reportedly including
Socialist leader Hawrani, President
Quwatli, and Prime Minister Assail want
to relax tension in order to regain full control of foreign pol-
icy from Army Chief of Intelligence Sarraj. The army itself
is still� split between the adherents of Sarraj and Assistant
Chief of Staff Nafuri. At the present time the two groups are
cooperating on the basis of an equal division of power. An
army shake-up will probably occur when either leader feels
he can oust the other.
The local Communists are seeking to ex-
ploit this confusion. The Socialist ideological leader, Michel
Aflaq, reportedly has told Egyptian President Nasir that the
Communists were making a strong bid for Syria by recruiting
members of his party. Aflaq said that the only way to combat�
this menace is a coalition government including the relatively
conservative Populist party. .Aflaq is said to have asked Nasir
to use his influence toward this end.
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8. POSSIBLE NEW REBEL, OUTBREAK IN OMAN
Cipmment on:
Renewed activity by well-led Omani
rebels may again threaten the Sultan
of Muscat's shaky control over inte-
rior Oman,
In a recent foray against Muscat troops from their
secure highland redoubt, the rebels were defeated only by
the fortuitous presence of British armored cars, a small
number of which were left to support the Sultan after Brit-
ish action against the rebels in July and August. The Brit-
ish believe that the dissidents are still led by Talib ibn Ali,
brother of the fugitive Imam, who still controls possibly
three hundred men and has been able to bribe and intinii-
date tribal-elements with some success:
between 500 and 700 Onianis,
who disappeared from the eastern province of Saudi Arabia
during late summer, are now being trained as reinforcements
for the rebel �"army."
Sustained dissidence in Oman may jeopard-
ize current indirect negotiations between Saudi Arabia and the
British for settlement of boundary disputes in Southeast Arabia
and restoration of diplomatic relations. Similarly, the Sultan
of Muscat's ability to negotiate effectively with King Saud would
be seriously set back if his authority in Oman is again threat-
ened.
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9� TUNISIAN-FRENCH RELATIONS
Comment on:
New frictions are developing in Tunisian-
French relations even though the Algerian-
Tunisian border area remains quiet. Talks
regarding the transfer of civil aviation
responsibilities to the Tunisian government, which began on 29
October, have not gone well; new French financial measures will
raise the prices of consumer items and will probably cause pop-
ular discontent; and the chronic financial problem caused by
the withholding of French credits is worsening.
French military units within Tunisia have
become involved in incidents not calculated to improve relations.
The French military recently turned over a barracks to the Tuni-
sian army after smashing the windows and tearing out the plumb-
ing.
Additional difficulties are probable as the
French political crisis lengthens. Further friction is likely to
result from the recent meeting in Tunis of the high command of
the Algerian rebels. Bourguibat tacit sponsorship of this meet-
ing may not be offset by his public rebuke on 31 October to the
Algerians for reiterating that France must recognize independ-
ence for Algeria before cease-fire negotiations are undertaken.
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10. FRENCH POLITICAL CRISIS
Comment on:
/Premier designate Gaillard, who will
seek National Assembly approval on
5 November, is favored by the growing
tendency in Paris to consider a minor-
ity government based on the small center
parties, with some measure of support
or at least benevolent abstention on the
part of both Socialists and Independents.
Some Independents consider his economic
philosophy preferable to that of the Socialists, but they have
reservations about his youth, and fear that he would repeat
Bourges-Matmoury's economic and Algerian programs. The
Socialist decision to support Gaillard may buttress these
fears. The statements of preliminary support issued by both
Independents and Popular Republicans are so hedged that they
are practically meaningless.
Although the French public is not yet aware
of the gravity of French finances, this situation may have increas-
ing influence in the assembly's decision. Payment of France's
October European Payments Union debt will virtually wipe out
the convertible currency account in the Exchange Stabilization
Fund, and,without external aid, gold reserves, already down to
almost $500,000,0002 will be further reduced in December.
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11. ECONOMICS MINISTER ERHARD APPOINTED VICE
CHANCELIORIN NEW BONN CABINET
Comment on:
Economics Minister Ludwig Erhard's
appointment as vice chancellor places
him in a dominant cabinet position,
second only to Adenauer. The chancel-
lor was quoted as refusing to name a "crown prince," either
as a party leader or as a prospective chancellor. Erhard's
impressive performance in the election campaign raised his
standing within party circles, and may have been decisive in
overcoming any opposition to his assuming the vice chancel-
lorship.
Erhard�s appointment, however, was
probably also due to the importance which Adenauer attaches
to economic problems, rather than to an intent to downgrade
Foreign Minister Brentano, who has hitherto been considered
the leading candidate for the succession. Adenauer underlined
this attitude by devoting a major portion of his 29 October pol-
icy statement to the economic tasks confronting the new cabi-
het-.Adenauer may feel that Erhard needs increased stature
within the cabinet in order to put through tax reforms and other
policies designed to promote private savings for industrial in-
vestment.
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ANNEX
Watch Report 378, 31 October 1957
of the
Intelligence Advisory Committee
Conclusions on Indications of Hostilities
On the basis of findings by its Watch Committee, the
Intelligence Advisory Committee concludes that:
A. No Sino-Soviet bloc country intends to initiate hostil-
ities against the continental US or its possessions in
the immediate future.
B. No Sino-Soviet bloc country intends to initiate hostilities
against US forces abroad, US allies or areas peripheral
to the orbit in the immediate future. Although Soviet
statements have strongly implied that the USSR might in-
tervene with its own forces in the event of a Turkish at-
tack on Syria, available evidence indicates that the USSR
has not made military preparations on the scale which would
be anticipated for dealing with the broader contingencies re-
sulting from such intervention.
Unstable conditions and tensions stemming from develop-
ments concerning Syria continue to create possibilities
for conflict in the Middle East. Although major Turkish
forces continue to be deployed on the Syrian frontier and
in position to attack Syria, we have no evidence that Turkey
has reached a decision to launch such an attack. The situ-
ation; however, remains tense.
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