CENTRAL INTELLIGENCE BULLETIN - 1958/04/04

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03177791
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 17
• Document Creation Date: January 27, 2020
• Document Release Date: January 30, 2020
• Publication Date: April 4, 1958

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4 April 1958
Copy No. 140
CENTRAL
INTELLIGENCE
BULLETIN
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4 APRIL 1958
I. THE COMMUNIST BLOC
Peiping suggests Japanese failure to
implement flag rights may void trade
agreement.
Ulbricht maintains firm control in
East Germany despite continued
opposition within party.
II. ASIA-AFRICA
Indonesia - Orders for paratroopers
now committed in Sumatra to regroup
in Djakarta suggest new action by cen-
tral government in near fi ture.
Algerian rebels' plans for provisional
government reported ready.
Saudi Government fears possible sub-
versive activities by Egyptian nationals
remaining in Saudi Arabia.
Pakistani leaders suggest considera-
tion of neutral foreign policy.
III. THE WEST
France - Gaillard insists neutral
observers must operate on both sides
of Algerian-Tunisian border.
Cuba - Government forces still in
control in Santiago.
@Paraguay - Stroessner's position
weakened despite suppression of
.1 April revolt.
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CENTRAL INTELLIGENCE BULLETIN
4 April 1958
DAILY BRIEF
I. THE COMMUNIST BLOC
Communist China - Japan: The Chinese Commu-
nists have leveled bitter criticisms against Japanese
Prime Minister Kishi in an effort to forestall Tokyo's
yielding to Taipei on the Com:munist flag issue. Pei-
ping regards provisions in the Sino-Japanese trade agree-
ment,which give a trade agency in Tokyo the right to
fly the Chinese Communist flag as a major break-
through in its campaign to win diplomatic recognition
from Japan. The Japanese are implicitly warned that
failure to implement the flag provision may void the
agreement. (Page 1)
East Germany: Ulbricht continues to maintain
firm control in East Germany despite opposition from
a number of influential party figures. There are indi-
cations that security controls are being tightened, but
)J1) in general he is moving cautiously; he does not appear
to be pressing the economic provisions of his hard-line
policy.
IL ASIA-AFRICA
Indonesia: A 28 March order for the early with-
drawal of paratroopers from North Sumatra to Djakarta
"to face any future tasks" suggests strongly that these
troops may be used in new action by central government
so forces in the near future, possibly against Padang or
Bukittinggi. These paratroopers were effective both in
TOP ET
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4 TOP CRET
the capture of Pakanbaru in Central Sumatra and in coun-
tering the attempted coup at Medan in the north.
The Central Sumatran dissident government's dis-
covery of a plot by pro-Djakarta elements within its
ranks to overthrow the dissident regime appears to have
removed the immediate danger from this quarter.
(Page 2) (Map)
Watch Committee conclusion - Indonesia: The general
Indonesian situation continues to favor the local Commu-
nist position and provides expanding opportunities for ex-
ploitation by the Sino-Soviet bloc through aid and propaganda,
although there is no evidence of $ino-Soviet intention to be-
come militarily involved. Evidence indicates that the Dja-
karta government intends to pursue its military objectives
against the dissidents, but a resolution of the basic issues
is not an early prospect.
Algeria: The Algerian National Liberation Front, whose
nine-member executive committee is at present in Cairo,
may be ready to proclaim a provisional government. The
Egyptian ambassador in Tunis asserts 28 states would recog-
nize such a body and that another 10 probably would do so.
The Tunisian foreign secretary, however, claims that the
Algerians are withholding such a decision until they can as-
certain whether the Anglo-American good offices mission
could "produce anything useful" for Algeria.
(Page 3)
Saudi Arabia - Egypt: The Saudi Government remains
concerned over continuing subversive activities by numer-
ous Egyptian personnel remaining in the kingdom. It has
ordered investigation into a reported Egyptian plan to dis-
tribute antigovernment leaflets to employees of the Trans-
Arabian Pipeline.
4 Apr 58
DAILY BRIEF
11
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Watch Committee conclusion - Middle East: A de-
liberate initiation of hostilities in the Middle East is
considered unlikely in the near future. However. seiT-
ous incidents are likely to continue.
Pakistan: Pakistan has apparently embarked on a
campaign to impress the United States with the possi-
bility of its adopting a "neutral" foreign policy. This
campaign reflects Pakistani frustrations over Kashmir,
the scheduling of US military aid, the publicity being
given to American economic aid to India, and Egypt's
growing influence in the Near East. The line being
taken by Pakistani officials and the press seems at the
moment to be a tactical maneuver. However, some
overtures toward the Sino-Soviet bloc may be expected.
(Page 4)
III. THE WEST
*France-Tunisia: Domestic political considera-
tions' seen mainly responsible for Gaillard's reitera-
tion of his demand that neutral observers be stationed
on both sides of the Tunisian-Algerian border as part
of the settlement of French-Tunisian differences. How-
ever, he is also genuinely concerned over the extent of
Tunisian aid to the Algerian rebels. Gaillard made one
concession on 2 April when he accepted the stationing
of a neutral observer at Bizerte to check on Tunisian
claims that the base is being used for French air force
operations against the rebels, but this concession is
not likely to sway Bourguiba, who on the same date
formally objected to neutral control on both sides of
the border. (Page 5)
Cuba: Government forces retain full control of
ckSantiago despite Castro's initial success in isolating
)Oriente Province by disrupting transportation and
4 Apr 58
DAILY BRIEF iii
TO CRET
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FOP A
communication systems. The call for a general strike
has not yet been issued, although absenteeism has in-
creased among transportation and sugar workers and
employees of two US-owned nickel plants in eastern Cuba.
Batista has issued three decrees designed to thwart the
threatened strike.
Paraguay: Although the minor revolt at Encarnacion
on 1 April was easily crushed, the position of President
Stroessner, the last remaining dictator in South America,
seems weaker than at any time since he took office in 1954.
Dissidence within the ruling Colorado party has increased,
although under control for the time being; Stroessner
seems to have endangered his vital military support; and
the Catholic Church has for the first time criticized his
regime. (page 6) (Map)
IV. SIGNIFICANT INTELLIGENCE
REPORTS AND ESTIMATES
(Available during the preceding week)
National Intelligence Estimate Number 54-58.
Outlook for Ceylon. 18 March 1958.
4 Apr 58
DAILY BRIEF
iv
The
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I. THE COMMUNIST BLOC
Peiping Warns Kishi on Flag Issue
The Chinese Communists, concerned over the Japanese
Government's effort to mollify Nationalist China on the flag
issue, are warning the Japanese against making concessions.
The official Chinese Communist news agency has charged
that Kishi's overtures to Chiang Kai-shek expose his inten-
tion to "wreck" the fourth Sino-Japanese trade agreement.
This commentary plus a scathing editorial in the party news-
paper and a speech by Peiping's vice minister of foreign
trade are intended to remind the Japanese of Peiping's ada-
mant position on the flag issue.
Peiping regards the Sino-Japanese trade agreement,
providing for a Chinese Communist trade mission in Tokyo
with the right to fly the Chinese Communist flag, as a major
breakthrough in its campaign to win diplomatic recognition
from Japan. The Communists were therefore highly
gratified by Chiang Kai-shek's threat to sever diplomatic
relations with Tokyo over the flag issue. Current Chinese
Communist commentary is an implicit warning to Kishi that
his efforts to reach an accommodation with Taipei may
void the trade agreement. Kishi has told the American am-
bassador in Tokyo that he cannot take steps which would
jeopardize the agreement.
SE7 d'T
4 Apr 58
CENTRAL INTELLIGENCE BULLETIN Page 1
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IL ASIA-AFRICA
Situation in Indonesia
Djakarta's order on 28 March for the withdrawal to
Djakarta of one company of army paratroopers from Medan
strongly suggests new offensive action in some other area
by the government in the near future. Possible targets are
the Padang-Bukittinggi area and North Celebes.
Paratroopers were used effectively in the
capture of Pakanbaru in Central Sumatra and in countering
the attempted coup at Medan in North Sumatra.
The Padang regime's announcement of successful ac-
tion against a counterrevolution within its own ranks prob-
ably refers to activity which ,begin in mid-March. At that
time an army major and the Bukittinggi police chief de-
fected from the dissident movement and withdrew to the
hills with two companies and two platoons respectively.
Padang reportedly has since arrested four officials and
discharged others. These defections and reports of other
antidissident activity among Javanese settlers about 80
miles north of Padang raise the possibility of pro-Djakarta
guerrilla activity against the Sumatran dissidents.
The government's continuing search for aircraft and
its insistence on exploring both free-world and bloc sources
apparently have prompted an approach to Japan for C-123
military transport aircraft and parts. Indonesian officials
have suggested that the purchase be covered in part by dol-
lar credits and in part by deductions from Japanese repara-
tions.
T9ECIET
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SECRET
A
Proclamation of Algerian Government-in-Exile
May Be Imminent
The Algerian National Liberation Front (FLN) may be
about to proclaim a provisional government. All nine mem-
bers of the group's executive committee, which directs the
rebellion, are now in Cairo despite the fact that the organ-
ization's headquarters remain in Tunis. The Egyptian am-
bassador in Tunis asserts that such a government would be
recognized by at least 28 states and probably by ten more.
The FLN would not expect Tunisia, in light of its present
difficulties with France, to be among the first countries to
extend recognition.
Location and composition of such a government have not
yet been divulged, although earlier reports claim that Fer-
hat Abbas, one of the more moderate members of the FLN
directorate, would be its nominal head. The Egyptian am-
bassador added that a provisional budget has been worked
out, with operating expenses within Algeria to be raised lo-
cally. External expenses, including arms purchases, could
be met by contributions totaling $42,000,000 from friendly
powers.
The Tunisian secretary of state for foreign affairs, how-
ever, claims that the FLN has reached no final decision on
the formation of a government but is waiting to see whether
Anglo-American good offices could "produce anything use-
ful" with respect to Algeria,
SE ET
4 Apr 58 CENTRAL INTELLIGENCE BULLETIN
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Pakistani Leaders Raise Possibility of Neutral Foreign
Policy
Pakistan appears to have launched a publicity campaign
designed to demonstrate that it cannot be taken for granted
and might adopt a neutral foreign policy. Possibly inspired
by favorable public reaction to Prime Minister Noon's speech
on 8 March, which included a threat to "turn elsewhere" if
Western aid on Kashmir were not forthcoming, other politi-
cians and the press have followed suit.
The Pakistani finance minister said in a published inter-
view on 25 March that US military aid is "proving a strain on
Pakistan's economy" and that the American recession is af-
fecting Pakistan's exports, especially of cotton and yarn. A
Peiping broadcast, quoting this interview, added that the fi-
nance minister hoped the volume of trade with the "socialist"
countries would increase. The newly elected president of
the Moslem League, Pakistan's most important opposition
party, said on 30 March that Pakistan's friendship for the
United States had unnecessarily earned it the enmity of some
other countries. Two Karachi newspapers on 30 and 31 March
advised a careful rethinking of Pakistan's foreign policy and
suggested it adopt a "judicious neutrality."
� The new campaign probably does not reflect a firm Paki-
stani government decision to turn from the West, but seems
designed to explore Western reaction. It is possible, never-
theless, that Pakistani ambassadors to the Near East, who
were recalled to Karachi for a conference on 28-29 March, dis-
cussed the advisability of taking new attitudes toTward that area.
They may also have discussed a new Pakistani-Iranian-Turkish
political alliance. presumably outside the Baghdad Pact.
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:114TE 1
III. THE WEST
Gaillard Adamant on Neutral Observers for Both Sides of
Tunisian-Algerian Border
French Premier Gaillard has reiterated his demand
that neutral observers be stationed on both sides of the
Tunisian-Algerian border as part of the settlement of
French-Tunisian differences. He told the US-UK good
offices mission on 2 April that interposition of UN control
only on the Algerian side of the border would be publicly
interpreted as proof that the French were in the wrong,
and added that his discreet soundings of sentiment within
his government indicated such a proposal was domestically
unacceptable regardless of its possible beneficial interna-
tional effect. Foreign Minister Pineau commented that
French acceptance of control on only the Algerian side
would2 in the public mind, constitute UN action in Algeria.
Although Gaillard did not specifically mention it, he
also is probably genuinely concerned over the extent of
Tunisian aid to the Algerian rebels, which many French
now regard as the key obstacle to the success of their
pacification effort.
Gaillard made one concession on 2 April when he ac-
cepted the stationing of a neutral observer at Bizerte to
check on Tunisian claims that the base is being used for
French air force operations against the rebels, but this
concession is not likely to sway Bourguiba, who on the same
date sent a letter to Secretary Dulles formally objecting
to neutral surveillance of the border.
SE
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4 APRIL 1958
80403 - 3
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Political Instability in Paraguay
Paraguayan government forces had no difficulty in
crushing a minor revolt near Encarnacion on 1 April, but
new antigovernment demonstrations have been reported
and the position of President Stroessner, the last remain-
ing dictator in South America, seems weaker than at any
time since he took power in 1954. The loyalty of the army,
bulwark of Stroessner's regime, may have been substantial-
ly weakened by the administration's decision to revive the
ruling Colorado party's armed Guardia Urbana in the face
of new plotting. According to the US army attache in Asun-
cion, the army is "tense and strongly opposed" to this move.
Moreover, dissidence within the Colorado party itself has
increased sharply although it is not yet out of control.
Taking advantage of increased factionalism, former Presi-
dent Higinio Morinigo appears to be attempting a new bid
for power through disaffected Colorado and military elements.
Frank criticism by the Catholic Church has highlighted
the widespread unrest in Paraguay, and a recent pastoral
letter, though more moderate than earlier sharp attacks by
one parish priest, stated the situation was symptomatic of a
power crisis in the government and a civil crisis among the
people requiring "common sense and a conciliatory attitude."
Mounting dissatisfaction with the regime has stemmed
primarily from political rather than economic conditions,
which have improved somewhat since the US-backed stabiliff-
tion program was initiated last August.
4 Apr 58 CENTRAL INTELLIGENCE BULLETIN Page 6
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JR. .E.M .M..t
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
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CENTRAL INTELLIGENCE BULLETIN
4 April 1958
Watch Committee conclusion - Indonesia: The general
Indonesian situation continues to favor the local Commu-
nist position and provides expanding opportunities for ex-
ploitation by the Sino-Soviet bloc through aid and propaganda,
although there is no evidence of Sino-Soviet intention to be-
come militarily involved. Evidence indicates that the Dja-
karta government intends to pursue its military objectives
against the dissidents, but a resolution of the basic issues
is not an early prospect.
Watch Committee conclusion - Middle East: A de-
liberate initiation of hostilities in the Middle East is
considered unlikely in the near future. However, seri-
ous incidents are likely to continue.
East Germany: Ulbricht continues to maintain
firm control in East Germany despite opposition from
a number of influential party figures. There are indi-
cations that security controls are being tivhtpmpta
Saudi Arabia - Egypt: The Sandi Government remains
concerned over continuing subversive activities by numer-
ous Egyptian personnel remaining in the kingdom. It has
ordered investigation into a reported Egyptian plan to dis-
tribute antigovernment leaflets to employees of the Trans-
Arabian Pipeline.
Indonesia: A 28 Marc order for the early with-
Cuba:
Government forces retain full control of
Santiago� despite Ca,stro's initial success in isolating
Oriente Province by disrupting transportation and
communication systems. The call for a general strike
has not yet been issued, although absenteeism has in-
creased among transportation and sugar workers and
employees of two US-owned nickel plants in eastern Cuba.
Batista has issued three decrees designed to thwart the
threatened strike.
Paraguay: Although the minor revolt at Encarnacion
on 1 April was easily crushed, the position of President
Stroessners, the last remaining dictator in South America,
seems weaker than at any time since he took office in 1954.
Dissidence within the ruling Colorado party has increased,
although under control for the time being; Stroessner
seems to have endangered his vital military support; and
the Catholic rhiireh hAQ fnr tho firat tire% his
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