CENTRAL INTELLIGENCE BULLETIN - 1959/06/10

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03191545
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 16
• Document Creation Date: February 25, 2020
• Document Release Date: February 27, 2020
• Publication Date: June 10, 1959

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10 June 1959
Copy No. C
62
CENTRAL
INTELLIGENCE
BULLETIN
3.5(c)
3.3(h)(2)
DOCUMENT NO.
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10 TUNE 1959
I. THE COMMUNIST BLOC
Chinese Communists refuse to offer
any concessions for return of Dalai
Lama.
IL ASIA-AFRICA
Iran prepares "white paper" denying
Soviet rights of military intervention
under old treaties.
Libyan oil production may reach
100,000 barrels daily by 1961.
Laotian cabinet decides to release
pro-Communist leaders from house
arrest.
Indonesia�President Sukarno is ex-
pected to put 1945 constitution into
effect by decree upon his return in
late Tune.
Indian economic mission returns from
Moscow with new aid agreements.
Ceylon cabinet reshuffled.
0
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III. THE WEST
0 West Germany--Strong Erhard
statement keeps CDU controversy
alive.
IV.
0 Conclusions of the special USIB
committee on the Berlin situation.
LATE ITEM
� Probable ICBM launched from Tyura
Tam.
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CENTRAL INTELLIGENCE BULLETIN
10 June 1959
14
fO
DAILY BRIEF
I. THE COMMUNIST BLOC
Peiping-Tibet: Communist China's Chairman Liu
Shao-Chi told the Burmese ambassador on 3 June that,
while Peiping was willing to take back the Dalai Lama
and all other Tibetan refugees, there would be no bargain-
ing on Tibetan "independence" to obtain their return.
Liu guar-
anteed returned Tibetans only "food and work." He claimed
that "India now realizes" Tibet is an "internal affair," and
that an "unpleasant misunderstanding" was being cleared up.
The Indian and Chinese views on Tibet actually remain un-
reconciled although both capitals are seeking to ease the
recent strain. (Page 1)
II. ASIA-AFRICA
Iran-USSR: Tle Iranian Foreign Ministry has prepared
a white paper on Iranian-Soviet relations emphasizing that
articles of the 1921 treaty concerning the right of Soviet mil-
itary intervention in Iran are void. Now that the Shah has re-
turned from Europe he will probably make an early decision
on its publication. Meanwhile the Shah is being urged by some
elements to reach a detente with Moscow.)
(Page 2)
*Libya- Oil: Libyan oil production is expected to reach
100,000 barrels lly by early 1961 and yield the government
about $36,000,000 annually in oil revenues, according to Amer-
ican oil company officials. This estimate covers only one field,
r although oil has been discovered in five other areas. Pipeline
construction probably will get under way later this year or early)
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Lin 1960. Oil revenues should go a long way toward making the
country self-supporting; in recent years the economy has been
maintained only by foreign assistance, largely in return for
Western base right,/ (Page 3) (Map)
Laos: The Laotian cabinet's decision after much debate
to release top pro-Communist political leaders from house
arrest on 8 June apparently has aggravated the underlying con-
flict between old-guard conservatives and young reformers who
opposed the move. This latest schism could lead to general in-
stability and further disruption of the government's anti-Commu-
nist program. Despite the release of these leaders and the an-
nouncement that operations against the defected Pathet battalion
have ended, the bloc will probably continue to protest publicly
over the situation in Laos. (Page 4)
Indonesia: e political impasse created by the Constituent
Assembly's recent rejection of the 1945 constitution continues.
Most sources, including Premier Djuanda, feel that any action
will await President Sukarno's return from his world tour on
28 June, and that the 1945 constitution then will probably be put
O into effect by presidential decree. Army chief Nasution is said
to be working with the attorney general on a legal basis for such
a presidential decree)
11
VA
lama- uwtt: .ine nign-ievei Inman economic mission wnicn
recently returned from Moscow obtained Soviet agreement to un-
dertake preparatory work on the construction of a large machine-
tool plant in India. In addition, a previously discussed $20,000,000
loan for assistance in building pharmaceutical plants in India was
signed, bringing total bloc aid to date to $324,000,000, about ten
percent of all foreign aid. While no definite action was taken on
other Indian requests--such as doubling the capacity of the Bhilai
steel mill--Soviet officials apparently made it clear to the Indians
that they were ready to assist these projects and gave preliminary
estimates of planning and scheduling. (Page 5)
Ceylon: Prime Minister Bandaranaike's cabinet reorganiza-
otion announced on 9 June is primarily an effort to put on the appear-
ance of change. Despite press reports of "sweeping changes," the
10 June 59 DAILY BRIEF
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reorganization consists mainly of assigning additional duties to
certain ministers to fill the gap left by the resignation of two
leftist ministers in mid-May. While Banclaranaike faces a tough
fight on a no-confidence vote when Parliament reconvenes on
30 Jun p heRH11 qpemq likehi tn giirvivp
I I I. THE WEST
Vest Germany: Economics Minister Erhard's strong state-
ment after his return to Bonn has disrupted efforts of the Chris-
tian Democratic Union (CDU) to close ranks in the face of an
anticipated strong opposition attack in the Bundestag--in the 11
June budget debate--on Adenaueres decision to remain as chancel-
lor. Although Erhard has ruled out any possibility of accepting
support from the opposition parties in challenging Adenauer, he
will apparently demand a clear expression of confidence from
Adenauer and the party. It is not yet clear, however, whether
he would go so far as to resign or force a full showdown over the
chancellorship and control of the CDU.
IV. CONCLUSIONS OF SPECIAL USIB COMMITTEE
ON BERLIN SITUATION
The USIB has taken note of the following conclusions reached
by its special committee on the Berlin situation. The committee
pointed out that its conclusions were to be used in context with
SNIE 100-2-59 (24 February 1959) and with the review of that es-
timate in SNIE 100-2/1-59 (17 March 1959):
1. The information available to the Committee on
the Geneva foreign ministers' conference and Commu-
nist public statements do not indicate any basic change
in the Soviet position at Geneva on Berlin and Germany.
Foreign Minister Gromyko--who appears to be playing
for time on the assumption that the West will weaken--
has maintained that any new arrangements regarding
10 June 59
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Western, access to West Berlin must be within the
framework of the Soviet free-city proposal.
2. So long as the USSR estimates that nego-
tiations at Geneva are promising or that prospects
for a summit conference are good, it probably will
not conclude a separate peace treaty with the GDR
or turn over access controls to the East Germans.
However, negotiations may be reaching a stage where
the USSR might consider it to be advantageous to in-
crease threats of such action as a form of pressure
on the West. The threat of a separate peace treaty
may be raised while the East German leaders are in
Moscow. The actual physical transfer of controls
could be accomplished with little or no warning.
3. While there have been hints that the East Ger-
mans might harass West German civilian access to
West Berlin, there are no reliable indications of an in-
tent to seal off West Berlin in the immediate future.
The USSR 'could take such actions with little or no
warning.
4. There have been no significant changes in
Soviet capabilities to respond to possible Western ac-
tions in the event of turnover, harassment, or blockade.
5. West Berlin's over-all economy is at an even
higher level than this time a year ago. Morale continues
to be good, although some apprehension exists as a result
of press speculation that the West at Geneva may be con-
sidering some relinquishment of its rights in Berlin.
6. Adenauer's decision to remain as chancellor does
not appear to have had any immediate effect on his govern-
ment's position at the foreign ministers' conference.
10 June 59
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LATE ITEM
*USSR: Preliminary analysis indicates that a probable
ICBM test vehicle was launched from the Tyura Tam Missile
Test Range at about 2030 GMT (1630 EDT) on 9 June.
the operation and its objectives were similar to those
of the 30 May ICBM flight which traveled an extended distance
estimated at 4,000 to 5,500 nautical miles.
It has been estimated that the USSR might launch a Venus
probe attempt from Tyura Tam during the week of 8 June. The
9 June launching does not rule out the possibility of such an at-
temnt in the near future
10 June 59
DAILY BRIEF
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I. THE COMMUNIST BLOC
Liu Shao-chi "Explains" Peiping's Views on Tibet and Dalai
Lama
The newly elected chairman of Communist China's govern-
ment, Liu Shao-chi, has ruled out any possibility of a negotiated
"independence" for Tibet in exchange for the Dalai Lama's re-
turn. Liu told
the Burmese ambassador on 3 June that the Dalai Lama and all
other Tibetan refugees could return, but Peiping would guarantee
them nothing beyond "food and work." Liu did not repeat the
claim that the Dalai Lama is held in India under duress, and
his comments suggest Peiping may counter any major public
statements from the Dalai Lama by linking him with the "small
minority" opposed to Tibetan "reform."
Liu implied New Delhi's recent effort to avoid contention
with Peiping over Tibet is in response to bitter Chinese de-
nunciation of Indian "interference." "Now India realizes it
was an internal affair," Liu said, and added that the "unpleasant
misunderstanding" was being cleared up. While the Indian and
Chinese views on Tibet actually remain unreconciled, Peiping,
too, has shown a desire to end the earlier recriminations and
has greatly curtailed press comment critical of India. The
pains Liu took in explaining Peiping's Tibetan policy to a Burmese
official, as well as similar discussions Chou En-lai has held with
other neutral diplomats, indicate a serious effort to repair the
damage which Peiping's prestige has suffered as a result of the
Tibetan revolt.
TOP SECRET
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IL ASIA-AFRICA
Iranian Ambassador to Moscow Recommends Concessions to USSR
Iran's ambassador to Moscow, Masud-Ansari, a persistent
advocate of a detente with the USSR, proposed
that as a means to improve Iranian-Soviet relations, Tehran
cease all counterattacks against Soviet propaganda for one month
and, if the USSR reciprocates, send Foreign Minister Hekmat to
Moscow as the head of a good-will delegation. Hekmat's mission
would be to reaffirm the nonaggression article of the Soviet-Iranian
treaty of 1927 and to announce that Iran will not become a military
base against the USSR. Masud-Ansari's proposal probably has little
chance of acceptance, since the Shah is in no mood to permit ac-
tions which would cause Iran to lose face. Furthermore, the
Shah believes that the USSR has decided to cause his immediate
downfall, and probably feels that Soviet propaganda would not
cease even if Iran were to refrain from counterpropaganda.
Masud-Ansari, who assumed his post at the end of March,
has been attempting to assuage Soviet anger over the breaking
off of nonaggression treaty talks in February and the signing
of an Iranian-US defense agreement on 5 March. He has re-
peatedly complained to Tehran that Iran's counterpropaganda and
actions are undermining his efforts to create a friendly atmosphere
in Moscow. Masud-Ansari now fears that unless prompt steps
are taken, a demonstration may soon be made against the Iranian
Embassy in Moscow in retaliation for the recent arrest in Tehran
of two employees of the Soviet Embassy on the charge that they
were distributing anti-Shah pamphlets�
(The Iranian Foreign Ministry has prepared for the Shah's ap-
proval an extensive white paper on Iranian-Soviet relations.
The paper will emphasize that Iran regards as void articles 5
and 6 of the 1921 treaty with the USSR which authorized the USSR
under certain, conditions to send military forces into Iran)
10 June 59
CFNTPAI INTFI I ICZFNCF RI II I FTIN
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UNISIA
� SHELL NO.1
BIR TLASCIN
GULF OASIS DAHRA *OA .1 BAHI
OASIS DAHRA B-1-32
EMGAYET NO.1
�B-1-32
� �STANDARD(N.J.)
CFP NO.B-1-49
NO.1 ZELTEN
ALGERIA
90610
�STANDARD (N. J.) LIBYA
NO.1 ATSHAN
10 JUNE 1959
FRENCH
EQUATORIAL
AFRICA
SUDAN
� DISCOVERY OIL WELLS
UNCLASSIFIED
O Statute, Miles 4C1/0
24987
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JI:A.AiL,
Libya Likely to Become Major Oil Producer
CLibyan oil production is expected to reach 100,000 barrels
daily by 1961 and yield the government about $36,000,000 an-
nually in 'oil revenue,
Libya is described as one of the "hottest" wildcat areas outside
of the United States. In less than 17 months, eight discovery
wells have been drilled--four in the past two months alone.
French, British, Dutch, German, and American interests,are
represented in the 15 companies now active in the country)
CInterest in Libya was sparked by the country's geographic po-
sition, which affords Europe a source of oil free from Nasir's
control of the Suez Canal and pipelines across Syria. Libyan crude
prices should be strongly competitive, because they will not in-
clude the pipeline and canal transit charges which add some 40
cents to the cost of each barrel of oi)
eh oil strikes promise in the course of a few years to make
Libya economically viable. As its oil income becomes significant
and its need for Western economic aid becomes less acute, the
Libyan Government will probably become less dependent on the
Income derived from American and British military bases. Fu-
ture Libyan policy decisions on this issue are likely, however,
to be complicated by internal political changes and by provincial
tribal rivalries. The most promising oil discoveries have been
in Cyrenaica Province, while the most important Western military
installation- Wheelus Air Base- -is in Tripolitania.
10 June 59
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Laotian Cabinet Divided Over Policy Toward Domestic
Pro-Communists
The Laotian Government's decision to end the house arrest
of top pro-Communist leaders and to drop plans to prosecute
them for allegedly inciting the rebellion of former Pathet Lao
troops has aggravated the underlying conflict in the cabinet be-
tween old-guard politicians and young reformers. Although
Premier Phoui Sananikone swung a majority of the cabinet be-
hind his policy of moderation after a bitter debate on 6 June,
there are indications that the young reformers are unrecon-
ciled. This controversy may revive the factional disputes that
plagued the government in February and March and served to
divert its attention from the important rural aid program.
Secretary of Defense Phoumi and Deputy Chief of Staff Ouan
on 6 Tune said they felt that the government's policy of leniency
toward the Communists was a mistake and speculated that the pre-
mier may have been motivated by fear that the military were
seeking to maintain tension in order to take over the government)
FOreign Minister Khamphan Panya told the US charge on
7 JulIe that he and several other proponents of a "hard line"
might resign from the cabinet in protest, but later indicated
that the reformers together with the crown prince might instead
put pressure on Phoui to reverse the government's policy. The
premier, however, does not expect that the crown prince will
push t e issue to a showdown or that the young reformers will
resign..
Despite the Laotian Government's release of the pro-Com-
m .ist leaders and its announcement that operations against the
defected Pathet battalion had ended, the Communist bloc probably
will continue to protest publicly over the situatim in Laos and call
for th1 reconvening or the International Control Committee for
Laos
CONFIDENTIAL
10 June 59
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India Obtains Soviet Assurances of Increased Aid for Third
Five-Year Plan
The high-level Indian economic mission which recently re-
turned from Moscow apparently was successful in obtaining as-
surances of increased Soviet aid for India's Third Five-Year Plan
(1961-66). The mission, in addition to signing a previously dis-
cussed $20,000,000 loan agreement to construct pharmaceutical
plants in India, secured Soviet agreement to undertake prepar-
atory work on the construction of a large machine-tool plant
in India.
No definite action was taken on other Indian requests--such
as doubling the capacity of the Bhilai steel mill--which would
have an estimated foreign-exchange cost of $735,000,000. Soviet
officials apparently made it clear, however, that they were ready
to help with these projects and gave preliminary estimates of
their planning and scheduling. Soviet aid to India now totals
$324,000,000--about ten percent of the total foreign aid received
by India�and will increase to nearly $400,000,000 if, as seems
likely, India accepts earlier Soviet offers to construct a petroleum
refinery and an oil drilling equipment factory.
Moscow's latest offer will enable the Soviet bloc to play the
predominant role in developing India's heavy machinery complex,
a series of seven plants which is a major goal of India's third plan.
The USSR had previously agreed to build plants to produce heavy
machinery and coal-mining equipment, and Czechoslovakia had
agreed to construct a large foundry-forge. Although India appar-
ently still hopes to obtain Western assistance for the remaining
three units, determination to complete the heavy machinery com-
plex during the third plan may make India receptive to further
Soviet offers.
CONFIDENTIAL-
10 June 59
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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 and Civilian Mobilization
Special Assistant for Security Operations Coordination
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 Economic Affairs
The Deputy Under Secretary for Political Affairs
The Deputy Under Secretary 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
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
Director for Intelligence, The Joint Staff
Assistant Chief of Staff for 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
The Department of the Interior
The Secretary of the Interior
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
United States Information Agency
The Director
PriNTVITIVNIPI A I
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