CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001300010001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 39
• Document Creation Date: December 20, 2016
• Document Release Date: August 15, 2005
• Sequence Number: 1
• Publication Date: May 29, 1957
• Content Type: SUMMARY

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CONFIDENTIAL
C D. lc--d
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
D DECLASSIFIED
CLASS. CHANGED TO:
COPY NO. i,
OCI NO. 2690/57
29 May 1957
DOCUMENT NO.
NO-CHANGE IN CLASS. 0
AUT$gV t 70?
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
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CONFIDENTIAL
State Department review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
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COEJ1IAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
OF IMMEDIATE INTEREST
Pressure for Nuclear Weapons
Pressures favoring a
nuclear weapons program for
France are mounting to the point
that any government emerging
from the present political crisis
will probably be unable to with-
stand them. Mollet's earlier
offers for France to "abstain"
from becoming a nuclear "fourth
power," provided a satisfactory
disarmament agreement could soon
be reached, probably could not
be upheld by any new government.
Chances are slim that any candi-
date for the premiership could
avoid promising the assembly to
insist on agreement to a French
nuclear program in disarmament
negotiations.
Jules Moch, the chief
French disarmament negotiator,
has indicated on several occa-
sions during recent UN Disarma-
ment Subcommittee discussions
that France would be prepared
to forego a nuclear weapons
program provided an interna-
tional agreement could be
reached soon and certain other
conditions met--including sus-
pension of nuclear tests and a
stop to manufacture of fission-
able material for weapons. A
27 May commentary by the French
Press Agency stated that while
there is "no official policy"
on this subject, Moch's inti-
mates have quoted him as fore-
seeing a US-USSR agreement and
having stated that France could
accept it only with difficulty.
Moch has told subcommittee
representatives several times
during the current series of
disarmament talks that France
could not long put off starting
its own national nuclear weap-
ons program unless there were
prospects for an agreement.
soon.
Foreign Minister Pineau,
who proposed at the North At-
lantic Council in Bonn early
this month that nuclear warheads
be stored under SACEUR rather
than national control, stressed
that "only the present govern-
ment under present circumstances"
in France was not partisan to
Franch manufacture of nuclear
weapons.
It is possible that the
timing of the expression of
French sentiment on the subject
is officially inspired as a
maneuver to exert pressure on
the London disarmament confer-
ence to reach an early agree-
ment. However, it seems more
likely that Mollet's parliamen-
tary defeat plus the accumu-
lating impact of other events
has swollen nationalist pres-
sures beyond the point of con-
trol by any French government.
Such factors include the in-
fluence on French opinion of the
British decision to rely on
nuclear deterrent power, an-
nouncements of plans to over-
haul the French defense estab-
lishment to meet the demands of
nuclear warfare, and accumulat-
ing frustrations arising from
France's setbacks in Algeria
and the Middle East.
CO~I~f~AL
PART I OF IMMEDIATE INTEREST
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
The formation of a new
French government has been
blocked primarily by the in-
transigence of the Socialists,
and the deadlock probably will
not be broken until at least
one attempt to invest a new
premier has failed. An interim
center coalition may then be
necessary, but the delay prob-
ably favors Premier Mollet's
chances of eventually heading a
new, more broadly based govern-
ment. As the stalemate is pro-
longed, France's pressing finan-
cial problems grow worse.
Former premier Rend Pleven,
who is sounding out the parties
for President Coty, has indi-
cated that he favors another
government headed by Mollet,
but with wider participation
than the present cabinet.
Pleven has made little progress,
however, in his effort to in-
duce the Socialists to over-
come their pique at the Inde-
pendents, who caused Mollet's
defeat. There had been some
hope earlier that the impending
meeting of the Socialist national
council and an imminent Popular
Republican convention would give
Pleven the basis for concrete
recommendations. The Socialists
may not schedule this meeting,
however, until Coty has desig-
nated a candidate in hopes of
demonstrating that the Independ-
ents are unable to form a
government.
The Socialists still main-
tain that they are not willing
to participate in any new govern-
ment, and that the time is ripe
to let the right take responsi-
bility. The Popular Republicans,
some Radicals, and Pleven's
small Resistance Union continue,
however, to insist upon Social-
ist participation. Greater
Radical cohesion can be ex-
pected if Mendes-France defi-
nitely resigns from party leader-
ship; a reunited Radical group
would again be in a strategic
position to assert assembly
leadership.
The Popular Republicans
and the Independent-Peasant
group may make their support
dependent on a firm commit-
ment not to "abandon" Algeria.
Popular Republican Party leader
Pierre Pflimlin is reported
convinced that far-reaching
changes in Algerian policy are
necessary, however, and this
view is shared by three other
leading candidates--Pleven,
Minister of Justice Francois
Mitterrand, and Education Minis-
ter Rend Billeres. Mollet has
warned that the Socialist Party's
position on Algeria must be
supported, but his party does
not exclude the possibility of
a political settlement; there
are indications of a growing
view that Minister Lacoste's
pacification program has out-
lived its usefulness.
In the meantime, with
Mollet acting only in a care-
taker capacity, efforts to
shore up France's worsening
financial situation are at a
virtual standstill. Mollet
had decreed a cut of almost
$650,000,000 in appropriations
before he was defeated but had
not yet obtained assembly ap-
proval to levy over $400,000,000
in new taxes. The Finance Min-
istry has been forced to seek
assembly approval for short-
term advances from the Bank of
France to meet its obligations
during the crisis. The franc
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
has markedly weakened since
Mollet's defeat and rumors of
devaluation are increasing.
An early agreement on a
short-lived makeshift govern-
ment to handle France's immedi-
ate needs is still possible.
The American embassy in Paris
believes, however, that the
crisis has not yet deepened
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PART I OF IMMEDIATE INTEREST
enough to permit the formation
of a government, and reports a
growing feeling that a more
durable broadly based govern-
ment is possible if the crisis
is allowed to work itself out.
In either event, it seems likely
that action on the EURATOM and
Common Market treaties will
be postponed until fall.
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29 May 1957
NOTES AND COMMENTS
Reaction to the anti-Ameri-
can riots in Taipei on 24 May has
been strong throughout Asia.
Japanese, South Korean and
Philippine officials have
stated that the disorders dem-
onstrate the necessity for con-
cessions by the United States
on the issue of local juris-
diction over American military
forces abroad.
The Japanese Communist
Party has issued instructions
for an anti-American propaganda
campaign exploiting the acciden-
tal killing of a Japanese woman
by an American serviceman on a
rifle range.
In South Korea, the gov-
ernment for some time has been
pushing for a revision of the
status-of-forces agreement which
would give South Korea some de-
gree of administrative control
over foreign troops.
In Bangkok, the newspaper
controlled by Marshal Sarit, the
minister of defense, warned the
government against the danger
of allowing more American mili-
tary personnel into Thailand.
In Hong Kong, the vernac-
ular Chinese press has showed
little or no sympathy for the
United States in discussing the
riots. Non-Communist papers
there admit serious damage to
US-Nationalist China relations.
The Indian newspaper
National Herald, which is
generally anti Western but not
pro-Communist, declared that
the riots demonstrate the dif-
ficulty Chiang Kai-shek ex-
periences in maintaining "what
amount to occupation troops,"
and predicted that the episode
is the "beginning of a shake-
up whose effect might be far-
reaching."
The independent English-
language Times of Indonesia,
presenting a more balanced
view, acknowledged the value
of US aid and condemned the
"hooliganism" of the rioters,
but blamed "Americans them-
selves" for an incident which
stemmed from US insistence on
"extraterritoriality." An
Indonesian Nationalist Party
newspaper, the Observer, has
declared that since Taiwan is
regarded as an American "stooge,"
events there come as a "real
surprise" to other Asians.
Cairo radio asserted that
the issue goes deeper than a
merely local outburst of passion.
"Behind each dollar," it said,,
"lies a demand. Honor is in-
jured and rights usurped."
Israel, Cairo concluded, "will
share Taiwan's fate."
Chinese Communist officials
described the Taipei riots as
providing the "first overt
sign" of increasing discontent
over the presence of US forces
on Taiwan. Peiping will prob-
ably interpret the disorders
as evidence that the chances
for "peaceful liberation" of
Taiwan are improving, and it
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
can be expected to redouble its
subversion and psychological
warfare efforts.
A major propaganda campaign
is already under way stressing
the "patriotic unity" of all
Chinese to oppose US "colonial-
ism." Peiping broadcasts are
vilifying Chiang Kai-shek as a
toady and are spreading atrocity
stories of alleged American
"brutality."
Peiping will watch closely
for indications that the attack
on the embassy has produced
widespread public resentment in
the US, and is probably hopeful
that recent developments will
undercut American support for
the Nationalist government.
American officials on Tai-
wan have reported considerable
evidence of planning for the
riots by certain Chinese Na-
tionalist officials. The
motives involved are not yet
clear. Students, apparently in-
doctrinated in advance, were the
principal leaders in the dis-
orders, which appear to have
gone beyond what the planners
intended.
A high-ranking Kuomintang
leader has stated that the riots
were intended to embarrass
Premier Yui and Foreign Minister
Yeh, and that the National Youth
Corps carried out the disturb-
ances under the control of
Chiang Ching-kuo. A police of-
ficial--who was observing the
disturbances with considerable
satisfaction--said that he had
been given instructions not to
use firearms or gas on the crowd
but to protect the lives of
Americans. The events, however,
took a more violent turn than
expected.
the island.
The court-martial verdict
acquitting an American MAAG ser-
geant of the shooting of a Chi-
nese "peeping Tom" struck the
Chinese in a particularly sensi-
tive spot, arousing strong
latent antagonism against prewar
"extraterritoriality:" Ambassa-
dor Rankin reported that the lack
of a United States-Republic of
China status-of-forces agreement,
together with extensive press
coverage of the parallel Girard
case in Japan, aggravated these
feelings. In addition, Ambassa-
dor Rankin believes the tradi-
tional distrust and dislike of
Western influence was probably
heightened by the disparity in
American and Chinese living stand-
ards on Taiwan, special privi-
leges for Americans, and their
conspicuous presence in almost
every phase of Chinese life on
During the past week,the
publicized activities of party
first secretary Khrushchev
reached a new high. He was
reported every day as either
suggesting new programs at
local meetings, visiting agri-
cultural or industrial in-
stallations, sending congratu-
latory messages, receiving
awards or conversing with
foreigners. In volume of per-
sonal publicity, in number and
diversity of policies associated
with his personal sponsorship,
and in influence on personnel
appointments,he surpasses all
the other members of the col-
lective leadership. His present
pre-eminence in these respects
clearly marks him as the single
most influential man in the
Soviet Union today, but he
is either unwilling or un-
able to assume Stalin's
mantle of personal dictator-
ship.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
Despite Khrushchev's in-
creasing dominance, a form of
"collective leadership" has con-
tinued. Within the confines
of the 11-man presidium, the
arena within which top policy
is hammered out, each member,
according to Khrushchev him-
self, can express his views
freely and thus have an in-
fluence on the policy adopted.
Khrushchev has shown a willing-
ness to listen to the opinions
of others and, on occasion, to
modify his own views in order
to achieve general agreement
on policy. He probably relies
more on his drive, optimism,
and powers of persuasion to
win acceptance of his views
than on political coercion.
Once a decision is reached,
these same qualities help him
to put the program over.
The mass of Soviet people
probably initially felt little
or no identity of interest
with any of the post-Stalin
leaders, but Khrushchev's
efforts to meet and talk to a
wide range of people and his
championing of various popular
measures have gradually gained
him many adherents among the
workers, peasants and local
administrators. His extensive
and frequent tours of collective
farms and local factories have
apparently paid off handsomely
in this respect,
Khrushchev, already the
most decorated presidium .member,
received a unique gift from the
workers of Leningrad on 23 May.
They presented him with a
leather-encased silver plaque
inscribed:
To the outstanding .
worker of the Communist
Party and Soviet State,
loyal Leninist, and First
Secretary of the CPSU
Central Committee, Com-
rade N. S. Khrushchev,
from the workers of the
Kirov works as a token
of our affection and un-
limited loyalty to the
Communist Party and its
Leninist Central Com-
mittee.
No Soviet leader has
received similar approbation
since Stalin's death.
One of the important fac-
tors in Khrushchev's success as
a leader has been this ability
to engender rank-and-file
enthusiasm for his grandiose
schemes and to translate this
enthusiasm into meaningful
activity. There is a strong
element of the "ham" in him,
and he appears to be extremely
sensitive to the response of
his audience. It is at farm
meetings that he is truly in
his element. He alternately
cajoles, lectures, confides
in and scolds his audience, an
approach which seems to be
enthusiastically received.
Khrushchev's folksy ap-
proach has not met with so
much success among the better-
educated technical and cultural
intelligentsia. More than
anything else they seem to
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29 May 1957
resent what they feel is his
lack of dignity and refinement.
While some grudgingly admit
admiration for his immense
drive and energy, they consider
him comic, crude and uneducated
--a mockery to the high office
of party first secretary. This
lack of rapport between Khrush-
chev and the Soviet intellectual
may account, in part, for the
regime's current inability to
deal effectively with intel-
lectual ferment.
Khrushchev's real power in
the Soviet hierarchy was most
clearly revealed in February
and March this year,..when,
apparently dissatisfied with
the attempts of the economic
administrators in the top
leadership to cope with Soviet
economic problems, he stepped
in as champion of a program for
reorganizing the administration
of Soviet industry. He broached
the program at a dramatic
meeting of the party's central
committee in February and,
in March, provided the main
outlines of the scheme for a
nationwide public discussion.
He then presented the proposals
to the Supreme Soviet early
this month and was chairman
of the commission elected to
draft the law which the Supreme
Soviet adopted.
Khrushchev's increasing
participation in the industrial
policy field has not meant a
reduction of his role in the
agricultural field. Speaking
on 22 May to a conference of
agricultural workers in Lenin-
grad in a manner clearly reveal-
ing his continued dominance over
Soviet agricultural policy, he
boasted that the USSR could
overtake the United States in
per capita output of meat and
dairy products in the next few
years.
Admitting that he oc-
casionally ignored the views
of his own experts, Khrushchev
said he disagreed with "some
economists" who had calculated
that the USSR could not catch
up with the United States in
per capita meat production until
1975. This statement, at a time
when the whole Five-Year Plan is
presumably under review in the
Soviet Union, illustrates
Khrushchev's general optimism
about Soviet economic progress
and suggests that he may oppose
efforts to reduce other plan
goals.
Khrushchev earlier this
spring revealed that some re-
trenchment would take place in
the large-scale corn program
which he launched in 1955. He
denied that.he was "sounding a
retreat" and emphasized that
corn was "the queen of the field
crops," but in effect said that
the corn program should not be
carried to the extremes he him-
self had advocated earlier.
The confident manner with
which Khrushchev continues to
exert leadership over Soviet
agricultural policy while at the
same time assuming responsibility
for industrial policy strongly
suggests that his political posi-
tion is secure and he is able to
modify his earlier agricultural
measures without serious loss
of face.
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29 May 1957
The Soviet leaders will
try during their 6-13 June visit
to Finland to recoup the USSR's
prestige and may make certain
overtures to the Finns on trade
and the sale of arms with a
view to encouraging neutralism
in the Scandinavian countries.
No appreciable change in Fin-
land's foreign policy is likely
to follow,since all the non-
Communist Finnish parties are
united on this subject.
The USSR has in the past
cited Finland as an example of
how a small non-Communist nation
can live in peaceful coexistence
with the USSR by following a
policy of neutrality.
The particular subjects on
which the USSR seems most likely
to make proposals are the pur-
chase of arms, the use of the
Saimaa Canal, and trade relations.
While the Finns would wel-
come any proposal which would
give them more freedom of ac-
tion, particularly from the
manpower limitation on military
forces in the 1947 peace treaty,
they will be extremely cautious
regarding any suggestion for
purchasing arms from the USSR.
Mindful, however, that the So-
viet embassy in Helsinki has
expressed displeasure on sev-
eral occasions that Finland
was not buying any arms from
the East, the Finns might agree
to buy token quantities of
Soviet bloc arms in order to
balance their acquisition of
military equipment from the
West.
The Finns would be unen-
thusiatic over any Soviet offer
merely to permit Finnish use of
the ceded portion of the Saimaa Canal--
which connects the lake district
with the Gulf of Finland at the
former Finnish city of Vyborg--
since the canal has lost its
economic value to Finland.
Nevertheless, the strong emo-
tional attachment of the Finns
to Karelia, which was ceded to
the USSR at the end of World
War II, demands that the gov-
ernment throw no obstacles in
the way of any gesture which
suggests the ultimate return
of some of Karelia to Finland.
The Soviet intimation dur-
ing Fagerholm's visit to Moscow
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PART II NOTES AND COMMENTS
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29 May 1957
last February that "the proper
time will come" for border dis-
cussions has encouraged the Finns
to hope that the subject may
again be introduced. There
have been no signs, however,
that the USSR intends to make
further territorial concessions
to the Finns at this time.
Finland's economic diffi-
culties and interest in the
European free-trade area may
prompt the Soviet leaders to
make some economic offers to
Finland. In reply to Fager-
holm's statement in Moscow that
the Soviet-Finnish trade im-
balance must be rectified, So-
viet officials agreed to dis-
cuss this later and indicated
that certain accommodations
"only for Finland" could be
made.
Finland, however, does not
wish to increase further its
economic dependence on the Soviet
bloc, with which it conducted
between 25 and 27 percent of
its foreign trade in 1956.
Finland's export surplus to
the USSR, an acute problem at
the time of Fagerholm's visit
to the USSR in February, now is
less than anticipated at that
time, and the Finns have already
submitted proposals to Moscow
presumably to bring the trade
into balance. The Soviet lead-
ers might offer Finland addi-
tional quantities of oil prod-
ucts, as originally desired by
the Finns, in return for in-
creased Finnish exports at a
time when these are meeting
severe competition in Western
markets.
The Finns apparently are
primarily concerned lest the
Soviet leaders exploit Finland's
policy of maintaining correct
relations with the USSR in such
a way as to make Finland seem
unneutral or even subservient
to the USSR. They seem partic-
ularly nervous about Bulganin's
and Khrushchev's desire to par-
ticipate in the 50th anniversary
celebration of the Finnish Con-
federation of Labor on 9 June
and are endeavoring to limit
this participation to mere at-
tendance.
The creation on 21 May of
a State Committee for Cultural
Relations with Foreign Countries
under the USSR Council of Minis-
ters is the most recent indi-
cation of Moscow's desire to
break out of the isolation im-
posed by its actions in Hungary
and the Suez crisis. The USSR
has been conducting a vigorous
campaign to restore contacts
at all levels with the West.
In recent letters to Prime
Minister Macmillan and Premier
Mollet, Bulganin stressed the
USSR's interest in expanding
cultural contacts and proposed
that representatives be ap-
pointed to study ways of ac-
complishing this. Since the
beginning of the year, Soviet
officials in Moscow and Washing-
ton have frequently indicated
their desire to revive the So-
viet-American cultural exchange
program which was suspended
after the revolution in Hungary.
At a news conference called
to announce the creation of
the new committee, Georgy (Yury)
Zhukov, former deputy editor
of Pravda and chairman of the
committee, stated that its "pri-
mary duty" will be to "facili-
tate" the work of foreign cor-
respondents in the Soviet Union.
He said the committee would al-
so "co-ordinate" artistic,
theatrical, scholarly and
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29 May 1957
scientific exchanges with other
nations and would negotiate
agreements on a governmental
level for such programs. Zhukov
is a skilled propagandist who
has established numerous inter-
national contacts during his
service as a foreign correspond-
ent. He has acted on many oc-
casions as an unofficial spokes-
man for the Soviet government
in conversations with members
of the foreign press.
Moscow's increasing empha-
sis on foreign cultural and
propaganda activities was evi-
dent in Minister of Culture
Mikhailov's speech to the Su-
preme Soviet in February in
which he stated that his minis-
try planned to organize visits
by Soviet artistic companies
and individuals to more than
60 countries during 1957. He
also said that about 5,000
artists and cultural workers
will go abroad this year and
that a "large number" of for-
eign artists will be invited
to the USSR.
The Soviet exchange program
enjoyed its biggest year in
1956. Until world reaction to
events in Hungary last fall
sharply curtailed the program,
the USSR had exchanged more
than 1,500 delegations--15 per-
cent above 1955 and triple the
number in 1953. An increasing
number of high-ranking govern-
mental or "prestige" groups
traveled to and from the USSR
last year, parliamentary dele-
gations alone numbering 20. Ac-
cording to Soviet sources, 30,-
000 tourists from the free
world visited the Soviet Union
and 20,000 Soviet tourists went
abroad, one fourth of them
visiting free world countries.
The marked rise in the number
of scientific, technical and
professional delegations sug-
gests that Moscow has become
less interested in exchanges
profitable only from a propa-
ganda standpoint.
The establishment of the
new Cultural Relations Committee
was preceded by another move
designed to encourage exchange
delegations, tourists and busi-
nessmen to visit the USSR. On
1 April, Moscow introduced a
special ruble premiums system
in noncommercial exchanges with
30 free world currencies, in-
tended apparently to compensate
for disparities between the of-
ficial ruble exchange rates and
international money market
valuations of these currencies.
SUEZ CANAL AND AQABA ISSUES
French foreign minister
Pineau returned from the
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French-requested UN Security
Council session on Suez with
professions of satisfaction
with the result, which he in-
terpreted as a transformation
of the Egyptian memorandum in-
to a "definitive instrument
binding Egypt and the canal
users." He said the use of the
canal by French ships was a
problem which the government
alone could decide. An uncon-
firmed Mideast News Agency re-
port on 27 May stated French
agents were arranging for pas-
sage of the canal by about 40
French ships, reportedly an-
chored at Djibouti.
Referring to rumors of the
prospective passage of an Is-
raeli test ship through the
canal, Pineau commented last
week that "other questions are
more urgent, especially that of
freedom of passage through the
Gulf of Aqaba, which now appears
assured." The continued pres-
ence of the two modern French
destroyers at Djibouti suggests
that Paris is prepared to have
them escort any Israeli vessel
in the area.
In the first official con-
tact between the two countries
since the Suez campaign, rep-
resentatives of Britain and
Egypt have been discussing
financial questions and a
settlement of claims in Rome
since 23 May.
Britain is now
seeking primarily the deseques-
tration of an estimated $168,000,-
000 worth of British property in
Egypt, and Egypt in return the
partial unblocking of its ster-
ling current account now worth
about
$72,000,000.
London
has
stated
that releases
from
the
blocked account will depend on
what Egypt offers on deseques-
tration and on the withdrawal of
discriminatory measures against
British firms and residents.
London has emphasized that
it is not considering a resump-
tion of diplomatic relations with
Cairo now. The British hope to
resume some trade in the near
future and will defer govern-
ment claims--for Suez Canal
shares and seized stocks in the
former Suez Canal base--if Egypt
will defer its demand for war
damages and move ahead on dese-
questration.
Meanwhile, the British
maintain that they will continue
to try to exert pressure on
Nasr and will go to the Security
Council again if they consider 25X1
Egypt to be operating the canal
the 1888 convention.
unsatisfactorily or violating
The withdrawal from North
Jordan of the 3,000- to 5,000-
man Syrian force in response to
an official Jordanian request
on 21 May strengthens the posi-
tion of King Hussain. Jordan's
government had previously been
reluctant to make an outright
demand for departure of the
Syrians, lest it be exposed to
a charge of weakening Arab de-
fenses against Israel, and had
attempted various indirect pres-
sures to achieve this purpose.
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Prior to the delivery of
Jordan's official note, the
Jordanian command moved a
3,000-man Saudi Arabian regi-
ment into position immediately
south of the Syrian encampment
at old Mafraq air base, and in-
stalled approximately 1,000
Jordanian troops nearby. The
transfer of the Saudi regiment,
which will occupy the facili-
ties evacuated by the Syrians,
will assure the presence of a
force loyal to Amman in North
Jordan after evacuation of the
nearby new Mafraq air base by
British Royal Air Force per-
sonnel scheduled for 31 May.
Egypt and Syria initially
attempted to discourage Jordan's
request for the Syrian with-
drawal on the grounds that the
matter had not been referred to
the Arab Joint Command in Cairo.
The government of Jordan, how-
ever, took the position that
the action integrating Jorda-
nian army headquarters with the
Arab Joint Command had been
undertaken by former chief of
staff Nuwar without government
approval.
Egyptian and Syrian deter-
mination, meanwhile, to aid
and encourage anti-Western and
antimonarchical elements in
Jordan resulted on 22 May in
an "appeal to the Jordanian
people" by the refugee "Jor-
danian national conference" in
Damascus--representing Jordan's
left-wing political groups--
denouncing the "imperialist
conspiracy... to annihilate
liberated Arab nationalism."
On the surface at least,
the situation in Jordan con-
tinues calm, and the curfew
was completely lifted on 25
May. The situation is such
that the previously deferred
visit to Amman by King Saud is
now scheduled to take place on
8 June.
Jordan remains bedeviled,
however, by its chronic inabili-
ty to meet expenses and support
its army.
The principal issue of the
Lebanese parliamentary elec-
tions, scheduled to begin on 9
June, is the struggle between
pro-Western President Chamoun
and Prime Minister Sami Solh
on the one hand and the pro-Egyp-
tian Lebanese National Front
on the other. The contest
is between two groups of
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politicians, rather than parties
in the Western sense--the group
led by Chamoun and Western-
oriented Solh against that led
by former prime minister Abdul-
lah al-Yafi, an admirer of Nasr.
President Chamoun, a Maronite
Christian who is stanchly pro-
American and anti-Nasr, consid-
ers the elections a test of
the possibility of altering the
constitution so that he may suc-
ceed himself.
The members of the new par-
liament, to be elected between
9 and 30 June, will elect the
next president in 1958. Under
Lebanon's parliamentary system,
the president exerts strong in-
fluence over foreign and inter-
nal policy.
The largely Moslem Lebanese
National Front is split by the
refusal of Christian and Druze
members to go on record against
the American Middle East pro-
posals and the reluctance of
several pro-Saudi leaders to
follow Egyptian and Syrian bid-
ding, especially at a time when
some aspects of King Saud's
foreign policy coincide with
that of Americans in the area.
The split in the Front
has accentuated the division be-
tween Christian and Moslem
Lebanese to the point where it
could lead to serious disturb-
ances.
Lebanese politics are fur-
ther complicated by the fact
that parliament is constituted
on a confessional basis. Nine
religious groups are apportioned
seats according to their tradi-
tional communal share of the
population, and both contending
political groups include repre-
sentatives of all these sects.
Because of the possibility
of violent outbreaks, the elec-
tions are to be held in differ-
ent regions on four successive
Sundays, thus enabling the ad-
ministrative and security forces
to concentrate in each electoral
region.
The dominance of Chamoun
and Solh in the executive and
parliamentary branches of the
government gives their candi-
dates a significant advantage.
After three years of ma-
neuvering to maintain a stable
government in Libya, Prime Min-
ister Ben Halim resigned on 24
May. Reportedly precipitated
by a cohflict with King Idriss
over relatively unimportant
domestic issues, the resignation
has its roots in Ben Halim's
nearly constant battle against
personal enemies, Egyptian in-
trigue in Libyan affairs, and
the often faltering confidence
of his king.
There is no indication that
the new government will effect
any major changes in the policies
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
initiated by the former prime
minister. Ben Halim was a
strong advocate of co-operation
with the West. The success of
the visit by the Richards mis-
sion and the amicable relations
maintained with the US in mat-
ters dealing with American air
bases owe much to his adroit
handling. Similarly, Soviet
offers of financial and military
assistance were rejected and
Egyptian subversive efforts in
Libya suffered a considerable
setback as a result of his ef-
forts.
Abdul Majid Kubaar, the
new prime minister, had served
as Ben Halim's deputy since
last March and reportedly was
chosen at that time because of
his loyalty and reliability.
Six of the previous cabinet
members are being retained,
and of the three new appointees,
only one appears to have been
in conflict with Ben Balim.
The reported appointment of
Ben Balim and another former
prime minister, Mahmud Muntasser,
as "royal advisers" with status
comparable to that of the new
prime minister may prove dis-
advantageous to the orderly
conduct of government.
One of Ben Halim's
most exasperating duties had been
to combat the king's disre-
gard for constitutional and
democratic processes and to
nullify the efforts of his
pro-Egyptian confidants to
gain royal favor. If Kubaar
proves incapable of main-
taining Idriss' full suppor
dissident internal elements
may be expected to cause
considerable instability and
threaten the continuation
of Libya's pro-Western or-
ientation.
A crisis in French-Tunisian
relations has developed over
France's suspension on 20 May
of the first installment, amount-
ing to $5,700,000, of a $34,500,-
000 loan agreed to on 20 April.
The French are demanding that
Tunisia give assurances that
French financial aid and mili-
tary equipment are not being
used to assist the Algerian reb-
els before these funds are re-
leased. Premier Bourghiba seems
determined to use this crisis
as a means of reducing Tunisia's
economic dependence on France.
Although French officials
say that only a temporary
suspension of the $5,700,000 is
involved, Bourghiba told the
Tunisian people in his weekly
radio address on 22 May that
France had unilaterally abro-
gated the financial agreement
signed in 1955. Under this
agreement, Tunisia became a mem-
ber of the French franc zone and
entered into a customs union
with France.
While Bourghiba apparently
has not made any specific re-
quests for financial assistance
from other countries, he sum-
moned Arab and Western ambassa-
dors and advised them of the
situation. This maneuver prob-
ably implies that future rela-
tions may depend on what offers
are forthcoming. The vice premier
has asked the United States to
"consider carefully" a suggestion
to divert temporarily some $5,-
000,000 to $7,000,000 in American
aid to pay bills for Tunisian
development projects which fall
due in June. Reports that the
USSR offered to make a trade
agreement with Tunisia probably
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derive from alleged overtures
made by a Soviet delegation
to Tunis last March rather than
from any new approach.
objects to Bourghiba's recent
initiative, in concert with
former Libyan premier Ben Halim,
in trying to arrange a settle-
ment in Algeria.
The French justify the with-
holding of funds by citing the
5 May capture of a truckload of
arms, presumably destined for
the Algerians, while being con-
voyed by the Tunisian national
guard.
Bourghiba accused France
of failing to live up to its
commitments to equip Tunisia's
1,500-man army created last
July, and charged that French
authorities confiscated Belgian
arms procured by the Tunisian
army to offset this deficit.
France also has taken other
steps to prevent the Tunisians
from obtaining materiel from
non-French sources. Bourghiba
has protested a recent French
aerial bombardment and shelling
of Tunisian territory, which he
said resulted in injuries to
seven Tunisians.
Although Bourghiba is un-
likely to give Paris the assur-
ances it desires regarding aid
to the Algerians, he is not yet
willing to risk a complete rup-
ture with France. He informed
the Tunisian National Constit-
uent Assembly on 27 May that
Tunisia was ready to negotiate
with France on a basis of "mu-
tual interests," and reportedly
warned the delegates both against
overenthusiasm for breaking ties
with France and of the possible
consequences of the nation's
"new economic independence."
Bourghiba has confined the cur-
rent crisis to the economic and
financial convention of 1955,
and has not renewed his demands
for the immediate evacuation
of France's military forces
Prime Minister Souvanna
Phouma's cabinet voted to sub-
mit its resignation on 29 May
after the government suffered
a defeat in the National Assem-
bly on its handling of the Pathet
Lao negotiations. This opens
the prospect of a long political
crisis.
Deputy Premier Katay and
Phoui Sananikone, leader of the 25X1
Independent Party, appear to have 25X1
the best prospects of forming a
new government.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
In the event that the major
leaders are unable to reach
agreement, Prince Petsarath may
be the strongest alternative.
He recently returned from a
visit of Pathet-held territory
allegedly convinced that the
Pathets are not Communists and
are no longer controlled by the
Viet Minh.
Meanwhile, press reports
that Souvanna on 27 May read
before the National Assembly
a letter from Pathet chief
Souphannouvong in which the
latter promised to surrender
control of the two northern
provinces and the armed forces
immediately after the formation
of a coalition government sug-
gest that the Communists have
switched to more conciliatory
tactics. This proposal was ap-
parently designed to strengthen
Souvanna's position, by permit-
ting him to point to the develop-
ment of Pathet "reasonableness"
as a positive achievement or
his policy of accommodation.
In the event Souvanna's resigna-
tion is accepted, the Pathets
may well make some dramatic 25X1
gesture during the cabinet crisis
return to office.
in the interest of promoting his
Continuing efforts to re-
move Lt. Col. Samual from his
command in East Indonesia are
likely to broaden the breach
between Djakarta and the out-
lying provinces.
On 27 May, an army spokes-
man announced that Samual had
been relieved of his command
and was being "transferred" in
accordance with a decree signed
by President Sukarno last month
calling for reorganization of
the military structure in East
Indonesia. This was the second
time in less than 10 days that
army headquarters had ordered
Samual's removal. The announce-
ment also stated that Prime
Minister Djuanda, in his capac-
ity as defense minister, had
decided to split East Indonesia
into four military regions.
Djakarta's actions are
likely to be interpreted in the
provincial commands as a direct
challenge from Sukarno; and in
view of the apparent inability
of the central government to
enforce compliance, the moves
will probably be greeted with
defiance and scorn. Samual
will almost certainly ignore
this latest set of orders, and
he may carry out his threat to
break relations with Djakarta.
In whatever course he chooses,
Samual will be able to count
on the support of the dissident
leaders in Sumatra and Borneo.
Prospects for compromise
will continue to diminish as
long as Sukarno, apparently
surrounded by pro-Communist ad-
visers, remains opposed to any
significant concessions to the
provinces. The hostility of
anti-Sukarno Indonesians reached
a new high last week when for-
mer premier Harahap, the Masjumi
parliamentary leader, strongly
denounced the president for
"irresponsibly" declaring mar-
tial law, for violating the
constitution by appointing a
cabinet himself, and for "de-
mocracy."
molishing every form of de-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
The atmosphere of tension
in Cuba has been sharpened by
the extensive sabotage of
Havana's electric power system
on 28 May and by reports of
new fighting with Fidel Castro's
rebel force in the eastern part
of the island. High government
and armed forces officials are
manifesting concern over re-
ports that new revolutionary
attempts are imminent.
There has been an increase
in rebel activity in eastern
Cuba during recent weeks, in-
cluding the landing of possibly
as many as 100 rebels on 24
May. The government recently
began transporting 1,000 troops
to Oriente Province to rein-
force an equal number already
engaged in hunting down Castro's
men. The size of Castro's force
is estimated at 140 men operat-
ing in small bands in the
rugged Sierra Maestra Mountains.
While Castro's forces are not
considered capable of over-
throwing the Batista regime,
they have become a running sore
of considerable nuisance value.
A majority of inhabitants of
Oriente Province--variously
estimated at between 50 and 85
percent--are believed to be
sympathetic to the rebel cause.
In Havana, the electrical
workers, supported by bank and
telephone employees, have been
reported as backing opposition
groups and planning a nation-
wide power strike in conjunction
with renewed revolutionary
activity. Although slowdowns
during the latter half of May
were severely dealt with by
the government and ended with-
out serious incident, discontent
has not lessened, and the elec-
tricalworkexsmay well be simply
biding their time. A violent
explosion blacked out Havana on
28 May, but no disturbances were
reported in the capital immedi-
ately following the blast.
Reports that new disturb-
ances are imminent both in
Havana and near the rebel
stronghold in eastern Cuba are
sufficiently numerous to cause
real concern to high government
officials. These reports also
suggest that President Batista
may have to act decisively to
remain in power until the end
of his term in February 1959.
The bulwark of Batista's regime
is the army, and as long as he
continues to command its
loyalty, he will probably be
able to control any threats to
his government. There have
been reports of disaffection
among the ranks and of plotting
among the officers, but the
great majority of the armed
forces ar. believed loyal to
Batista.
The installation of leftist
presidential candidate Daniel
Fignole as provisional pres-
ident of Haiti on 26 May quieted,
at least temporarily, the ex-
plosive political situation
which has kept the country in
turmoil for six months, but the
capital remains tense and new
disorders may erupt at any time.
A general strike which had para-
lyzed the national economy since
21 May has ended, and stores and
shops have reopened, although
trade was reported only 25- to
50-percent normal.
The army, which split wide
open during a battle between
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
rival chiefs of staff on 25 and
26 May, was superficially re-
united when both claimants re-
signed and Colonel Antoine
Kebreau was named to head the
army.
Fignolc3 made a strong enemy
when he switched allegiance from
Louis Dejoie, with whom he had
controlled the executive council
of government which was ousted
on 21 May, to Brigadier General
Leon Cantave, ex-army chief of
staff who engineered the coun-
cil's fall. The switch occurred
during the 24-hour battle in
which Cantave's control of the
army and the government was
threatened by the council-sup-
ported Port-au-Prince police
chief who was attempting to sup-
plant Cantave as chief of staff.
Cantave subsequently supported
Fignole's self-appointment as
provisional president.
Fignole named a ten-member
cabinet on 28 May which, accord-
ing to the American embassy,
consists of second-rate politi-
cians. The cabinet represents
all leading presidential candi-
dates except Dejoie, who is prob-
ably regrouping his rather for-
midable supporters for an attempt
against Fignole's government.
Dejoie has a large following
among merchants and industrial-
ists, and with the co-operation
of these groups, is fully ca
pable of calling a crippling gen-
eral strike, as he has in the
past.
One of the most serious
potential threats to Fignole's
government is his Claim
that his role as provisional
president does not exclude him
from running for permanent pres-
ident in the forthcoming national
elections, most recently sched-
uled for 16 June. This claim
will provoke accusations that
he will rig the elections in his
favor--the familiar cry which
has led to the downfall of two
previous provisional governments.
Fignole and Cantave, as
well as the two major presiden-
tial candidates currently sup-
porting Fignole, are believed
to represent the interests of
ousted president Paul E. Magloire
and the remnants of his sup-
porters. The new army chief of
staff has also been connected
with the corrupt Magloirist
group. Fignol4 has often been
called a Communist or pro-Com-
munist, and his Workers' and
1easants' Movement was outlawed
in 1950 for havine Communist
affiliations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
Recent developments indi-
cate that at least a partial
truce has been declared in the
ideological and political war
between Belgrade and Moscow.
This may or may not extend to
the economic area and result in
the reinstitution of Soviet
credits "postponed" last Febru-
ary, but high-level personal
contact is being resumed with
the scheduled visit of the
Yugoslav defense minister to the
USSR in June.
In an interview published
in the Yugoslav newspaper
Politika on 24 May on the oc-
casion of Tito's 65th birthday,
Tito said that the Yugoslav
leaders had decided to take the
initiative to prevent the "fur-
ther sharpening of relations" be-
tween Yugoslavia and the Soviet
Union. He asserted that the
Soviet leaders "have indeed
halted the campaign against
Yugoslavia and, in my opinion,
have insisted that the other
countries also treat Yugoslavia
differently and not attack it
from unprincipled positions."
In another press interview
earlier last week, Tito said
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
that the day would come--"and
it is not perhaps remote"--
when Yugoslavia's relations
would be good with the USSR
and the Satellites. Tito's
optimism may reflect an exchange
of correspondence with the
Kremlin leaders.
Defense Minister Gosniak's
planned trip to Moscow is
"purely courtesy"
gesture. Tito in the 24 May
interview said the trip was
consistent with Yugoslavia's
policy of "coexistence and co-
operation with everyone" and
with its right to see "what
headway the Soviet Union has
made . "
The first firm public indi-
cation of a change in Soviet
attitude was noted in a Soviet
radio broadcast of 15 May in the
Macedonian language wishing the
Yugoslav people success "in the
building of socialism"--a formu-
lation missing from the Soviet
May Day slogans issued on 20
April, although last year's
slogans had described Yugoslavia
as "building socialism." This
was followed by a birthday
greeting to Tito on 24 May from
the Soviet Communist Party cen-
tral committee calling for de-
velopment of wide co-operation
between the two countries and
their Communist parties.
A Moscow radio commentary
the next day emphasized the
identity of the policy views of
the two countries and recalled
Khrushchev's request in mid-
April that attention be given
to what unites rather than what
divides the two countries. The
Moscow commentary noted that
Tito re-echoed this idea in his
Politika interview.
The real political-.ideolog-
ical gulf between the two
Communist states--though called
only "slight differences of an
ideological nature" by Tito--
was being clearly revealed in
Soviet propaganda as late as
27 April, when a Kommunist
article reiterated the s andard
attack on Tito and other Yugo-
slav leaders for their "incorrect"
characterization of last fall's
events in Hungary. Kommunist
also repeated the line enunciated
by Soviet party presidium mem-
bers Molotov and Furtseva on
Lenin's birthday, 22 April,
concerning the impossibility
of building socialism in isola-
tion from the Soviet bloc.
In view of this Soviet at-
titude, and Yugoslavia's re-
peated insistence on the right
and necessity of its own road
to socialism, it is doubtful
that either the Kremlin leaders
or Tito expect a new rapproche-
ment in the foreseeable future
to be as close as that of spring
1956. The Soviet leaders, how-
ever, now may believe they have
"national Communist" pressures
within the bloc sufficiently in
check to allow a cessation of
the public battle with Tito.
The Kremlin leaders may
feel it now useful to give
tangible evidence of their more
moderate attitude by action in
the economic area. Yugoslav-
Soviet bloc trade has continued
at the relatively high level of
late 1956 (about one quarter
of all Belgrade's trade), but
action on Soviet investment
credits and agreement to sell a
nuclear reactor have been at a
virtual standstill. There has
been an unconfirmed press report
attributed to Belgrade diplomatic
sources that Soviet minister of
power stations Malenkov may at-
tend a world power conference to
be held in Belgrade.starting
5 June. Such a visit would
present an opportunity to offer
aid in electric power facilities,
strongly desired by the Yugoslavs
from any foreign nation tha
help them. 25X1
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29 May 1957
The escape to Yugoslavia
by Major General Panajot Piaku,
who was an Albanian minister
without portfolio and a member
of the party central committee,
is the first high-level defec-
tion since the Albanian regime
chose to follow Moscow's lead
at the time of the split with
Yugoslavia in 1948. He was re-
moved last October from the sen-
sitive post of deputy defense
minister.
Two other members of the
43-man central committee were
revealed as pro-Yugoslavs in
the past two years.. These were
Tuk Jakova, vice premier, and
Bedri Spahiu, minister of educa
tion, removed from their posts
in June 1955 for "inefficiency"
but later reportedly arrested
for being connected with party
elements who favored more in-
dependence from the USSR and
greater friendship with Yugo-
slavia.
Fear of Yugoslav attempts
at subversion or domination is
a crucial factor in both Alba-
nian internal policies--prac-
tically unchanged since the
Stalin era--and foreign policy,
which closely follows Moscow's
lead. Implicit in Albania's
claim that its loyalty to Mos-
cow has given it the status of
a "truly independent" nation is
the view that the Albanians
must remain strictly subservi-
ent to Moscow in order to avoid
returning to a subsatellite
status under Tito.
The Albanian party was
created by the Yugoslavs and
nurtured by them during
and after World War II, when
Albania was essentially a Yugo-
slav satellite. Ever since
Hoxha chose to side with the
Russians in the 1948 Yugoslav-
Cominform split, the party has
been trying to purge the pro-
Yugoslav elements from its
midst. How many of these ele-
ments still remain, particu-
larly at high levels, is un-
known, but speeches by Alba-
nian leaders indicate they still
fear the group's subversive
potentialities.
Following the major show
trial in 1949 of Koci Xoxe,
minister of interior and Tito's
chief supporter among the Al-
banian Communists, the party
was purged at several levels.
Xoxe's guilt was reaffirmed
last spring while most of the
other Satellites were rehabili-
tating their major "Titoists."
Last November two former high
party officials, Liri Gega and
her husband, Dali Ndreu, who had
been purged from power in 1949
for their connections with Xoxe,
were executed for an alleged
attempt to organize an armed
revolt.
During the April visit of
Albanian leaders to Moscow,
Khrushchev stated that Tirana's
relations with Belgrade were even
worse than Moscow's and ought to
improve. Recently, there has
been some moderation of the Al-
banian propaganda attacks on
Yugoslavia, probably at Moscow's
insistence. Though Plaku's de-
fection is a sore point with the
Albanians, they have not initia-
ted da battle over it.
25X1
The new 450-page publica-
tion "Industry of the USSR" is
the fifth in a series of statis-
tical publications that began
with the general survey of the
economy, the "National Economy
of the USSR," published in 1953.
Since then the USSR has published
statistical handbooks on retail
trade, cultural construction,
the economy of the RSFSR, and
now a general statistical survey
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29 May 1957
of Soviet industry. Publication
of these statistics indicates
that the USSR is gradually re-
turning to the more liberal
policies which existed prior to
1937 in regard to releasing
economic information. The new
industrial handbook contains
almost as much detail as the
summary statistical publications
of the mid-30's.
The new handbook does not
contain the 1960 industrial
goals set forth in the Sixth
Five-Year Plan directives is-
sued last year and appearing in
the earlier handbook "National
Economy of the USSR." The omis-
sion suggests that major Sixth
Plan goals were still under re-
view as of 6 March when the
volume went to the printer.
The significance of the new
compendium is not so much that
it reports information previous-
ly suppressed entirely, but that
it simply and conveniently
fills in many of the gaps which
had confronted Western research-
ers. The volume includes pro-
duction data for most nonmili-
tary machinery products for 1940,
1945 and the 1950-55 period,
trends in labor productivity
(for the same periods) in the
bulk of Soviet industry, de-
tailed information on the struc-
ture of fixed capital for most
of industry, and a vast amount
of data on regional distribu-
tion of production.
Information on military
end items and nonferrous metals
is still withheld from this
statistical publication. In
general, commodity production
data which previously required
lengthy research now are readily
available.
The industrial handbook
throws new light on the diffi-
culty of expanding the basic
materials industries fast enough
to support the rapid rates of
growth desired by Soviet leaders.
For the past five or six years,
the growth of output of basic
materials, metals, primary energy
and building materials--while
growing extremely rapidly by
Western standards--has not kept
pace with the voracious demands
of the Soviet economy. Nor have
these industries kept pace with
the remainder of industry in
growth of labor productivity and
in the ratio of output to new
investment. As long as these
industries lag behind in labor
productivity and require more
capital investment per unit of
increased output, the USSR will
be very hard put to maintain an
industrial growth rate of 10 to
11 percent per year as envisaged 25X1
in the original Sixth Five-Year
(Prepared by ORRJ
Plan directives.
MALAYAN-BRITISH AGREEMENT PAVES WAY FOR SMOOTH TRANSFER OF POWER
The Malayan and British be only a formality. With in-
delegations reached agreement dependence virtually achieved,
on all controversial issues in the moderate federation govern-
the proposed Malayan constitution ment must now prepare to deal
in talks which ended in London with the conflicting interests
on 21 May. The successful con- of 1.1alay and Chinese groups who
clusion of the talks removes the fear that certain constitutional
last major obstacle to Malayan provisions will lead to domina-
independence, scheduled for 31 tion of one race by the other.
August 1957. Ratification of
the agreements is expected to In the talks, the problem
of racial antagonism was centered
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
on the question of dual citizen-
ship privileges for citizens of
British colonies and Commonwealth
countries, mainly of Chinese
origin, who are resident in Ma-
laya. A compromise was reached
which will allow dual citizen-
ship only to those who are resi-
dent in the federation at the
time Malayan independence is
achieved. While this compromise
is a setback for Chief Minister
Rahman, it does alleviate the
primary Malay 'fear of a sub-
sequent influx of Chinese who
are citizens of Hong Kong and
Singapore. Nevertheless, Malay
opposition to the compromise
can be expected and could pos-
sibly lead to a unilateral re-
view of this clause following
Malaya's independence.
The prestige and influence
of the Malayan Chinese Associa-
tion (MCA), which represents
the Chinese population in the
federation government, may be
hurt as a result of this agree-
ment, since MCA was identified
with the government delegation
in opposition to any form of
dual citizenship. Thus, the
fact that a concession to the
Chinese was obtained despite
tacit MCA opposition makes that
organization vulnerable to
charges that it is no longer
capable of protecting Chinese
rights. The weakening of MCA's
influence is potentially danger-
ous to the future of Malaya be-
cause the racial make-up of the
country (50 percent Malay and
38 percent Chinese) is such
that, if political stability
is to be maintained, the govern-
ment must remain in the hands
of parties who support inter-
racial political co-operation.
Other somewhat less contro-
versial issues settled in London
include the maintenance of the
present right of appeal to the
Privy Council from the Federa-
tion Supreme Court, the exten-
sion to the new states of Penang
and Malacca of the present pow-
ers of the nine state governments
to reserve land for special use,
and agreement that the first
governors of Penang and Malacca
will be appointed jointly by
the British queen and the Ma-
layan Paramount Ruler,with later
appointments by the Paramount
Ruler only.
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UUNfIULN I IAL,
CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
Widespread dissatisfaction
with the political situation
in Greece may force new elec-
tions late this year. Normal-
ly, elections are not due until
1960. The government has
weathered two serious crises
recently--the first over con-
sideration of the Cyprus is-
sue by the UN General Assembly
in February, and the second in
connection with the arrival in
Athens on 17 April of Cypriot
archbishop Makarios.
Prime Minister Karamanlis'
party, the National Radical
Union (ERE), is made up of com-
peting factions with conflict-
ing ambitions and loyalties.
He has not been able to estab-
lish himself as its undisputed
leader, nor has he built up a
party machine through which it
will ultimately result in the
government's fall. Part of
the rationale behind opposi-
tion actions is the view of
the average politician that the
premiership should change hands
as frequently as possible.
Karamanlis is the only prime
minister except Marshal Alexan-
der Papagos to have remained
in office for more than nine
months since the end of World
War II.
could develop into a lasting
force in Greek politics.
The opposition parties
are maintaining a constant bar-
rage of attacks on the govern-
ment, evidently on the assump-
tion that unremitting pressure
Karmanlis has so far lost
only four of the 165 deputies
his party elected to the 300-
member parliament in February
1956, but several times that
number are merely awaiting the
most propitious occasion for
defecting. Many others are
controlled by private interests
which might decide at any time
to withdraw support from the
government. Since Karamanlis'
majority in parliament is slim,
relatively few defections could
cause his fall.
m
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29 May 1957
GREEK PARLIAMENT
DEMOCRATIC PARTY OF
THE WORKING PEOPLE (DKEL)
NATIONAL PROGRESSIVE UNION
UNITED
DEMOCRATIC
LEFT (EDA)
At least three leading
cabinet members covet the
prime minister's job. Minister
of Commerce and Industry Papa-
ligouras, probably the ablest
as well as the most ambitious,
has been actively courting
American sponsorship. Minister
Without Portfolio Kassimatis,
recruited from the Liberal Party
by Karamanlis, has concentrated
on undermining Foreign Minister'
Averoff, presumably in an at-
tempt to use the Foreign Min-
istry as a steppingstone to
the premiership. Deputy Pre-
mier Apostolides, generally
believed to represent important
private interests and to be
close to influential palace
advisers, is also actively un-
dermining the prime minister. 25X1
By the en o
March, when he was known to
be considering a government
reorganization, 67 ERE deputies
had submitted written requests
to him for ministerial appoint-
ments.
The Opposition
Leading Greek industrialist
Bodossakis and his publisher
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PARTY OF PROGRESSIVES 1
AGRARIAN PARTY
POPULIST
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 19 57
associate, Dimitrios Lambrakis,
supply the principal financial
support of Spyros Markezinis'
right-wing Party of Progressives,
which is composed of those who
left the Greek Rally when Marke-
zinis broke with Marshal Papagos
in 1954. Last fall the Bodos-
sakis-Lambrakis-Markezinis group
induced the defection of an ERE
deputy from Karamanlis' home
town. Although an expected
larger exodus did not occur,
Lambrakis' influential news-
paper To Vima has since edito-
riallyTaken up the opposition
demand for new elections, and
the group can probably cause
several new defections from the
ERE whenever it chooses.
The reunion last February
of the Liberal Party and the
Liberal Democratic Union, the
two largest opposition groups
in parliament, substantially
strengthens the centrist opposi-
tion. This new Liberal Party
has since been trying to live
down the onus of collaboration
with the extreme left in last
year's elections; Karamanlis
reportedly complained on 7 April
that its efforts were depriving
him of the claim that his is the
only reliable anti-Communist
government available. The Na-
tional Progressive Union of the
Center (EPEK) has similarly
purged itself of the taint of
collaboration with the Commu-
nists.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
Negotiations appear to be
nearing fruition for a resurrec-
tion of the once-dominant Popu-
list Party, the traditional
alternative to the Liberals in
the period from 1910 to 1946.
The adherence of several promi-
nent independent politicians
close to the palace, as well
as of Stephanos Stephanopoulos
and Panagiotis Kanallopoulos,
deputy premiers in Papagos'
Rally government, may make the
Populists an attractive alter-
native to Markezinis' Progres-
sives for future ERE defectors.
Stephanopoulos will presumably
merge his insignificant Popular
;.socialist Party with the Popu-
lists.
The American embassy re-
cently estimated that new Greek
elections might take place as
early as next September. Since
then, however, parliament has
been prorogued until 15 October,
thereby delaying any elections
GHANA'S VOLTA RIVER HYDROELECTRIC PROJECT
Ghana's proposed develop-
ment of the vast hydroelectric
potential of the Volta River
would significantly change the
country's economy by permitting
the growth of an important alu-
minum industry. The project
is estimated to cost about
$850,000,000, and uncertainty
as to whether the necessary
capital can be obtained from
Western sources might affect
the new nation's international
orientation.
SECRET
until some time after that date.
The new parliamentary session
will probably inaugurate a
period of intense political
activity, with constantly in-
creasing pressure for a new
electoral law and the calling
of elections. Unless dramatic
progress is made on the economic
front and Karamanlis discovers
how to discipline and unite his
party, this pressure may soon
become irresistible, especially
if there is a niw flare-up of
the Cyprus issue.
If present trends continue,
new elections would probably
force a return to coalition
government, since neither of
the major groupings--ERE and
Liberal--could produce a par-
liamentary majority. Markezinis'
Progressives, and the Populists
on the right and the Communist-
front EDA on the left, would
probably hold the balance of
power.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
n
n
n
PROPOSED_PAM _ L.
Western/ Region
mss, i '~'
Bauxite
..l
The hydroelectric plan,
providing for an installed capac-
ity of 620,000 kilowatts of pow-
er, received serious considera-
tion in a British white paper
published in 1952. Utilization
of the hydroelectric potential
of the Volta River could sub-
stantially relieve the Gold
Coast (Ghana) of its dependence
on cocoa. Damming the river
at Ajena and creation of a
3,500-square-mile lake--the
largest man-made lake in the
world--could provide the elec-
tricity needed to process baux-
ite into about 210,000 tons of
aluminum a year. At Awaso, with-
in 180 miles of the dam, are
proved bauxite deposits contain-
ing at least 140,000,000 tons
of ore. The plan also includes
the new port of Tema near Accra,
now under construction, and pos-
sible irrigation of the Accra
plains and development of a
fishing industry and transporta-
tion on the lake.
As envisioned
in 1952, the cost
would have been
$400,000,000, the
financing to be shared
by the British and
Ghana governments,
as well as by private
aluminum companies.
Of the total, Britain
was to supply about
40 percent, Ghana
27 percent, and pri-
vate companies--Alu-
minium Ltd. of Canada
and British Aluminium--
33 percent..
Conditions have
changed drastically
since 1952. A 1956
report of the Pre-
paratory Commission,
which was created to
study the plan, esti-
mated the cost at'
about $650,000,000.
Because of rising
construction costs
and earlier overopti-
mistic estimates, however, the
total cost would probably ap-
proximate $850,000,000.
This increase in costs
creates a serious problem because
sufficient capital is not readi-
ly available. Ghana's share of
the costs, now estimated at
about $229,500,000, can no longer
be covered by Accra's develop-
ment fund reserves. With the
sharp fall in the price of cocoa
since 1954 from 73 cents a pound
to the present 25 cents, the
Ghana government has not been
able to accumulate sufficient
reserves to finance both its
regular development program and
the hydroelectric project.
Ghana's minister of finance
stated in March 1957 that the
country had only about $23,-
000,000 in uncommitted develop-
ment funds, and general economic
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CURRENT INTELLIGENCE WEEKLY 51T
conditions are not expected to
improve substantially. Since
private aluminum companies have
invested in other areas, par-
ticularly in French Africa,
where the quality of the baux-
ite is higher and the investment
return more promising, they are
not disposed now to make a
large investment in Ghana.
Britain, too, is less able to
undertake heavy new commitments,
and certainly would not partici-
pate on the scale proposed in
1952.
Ghana officials have con-
tracted the World Bank, which
sent a mission in November 1956
to report on the general econo-
my, but not specifically on the
Volta River plan. The World
Bank has notified Ghana that
under present economic conditions
the country could not afford
such a development expenditure
and that the bank has never
loaned such a large sum.
Prime Minister Nkrumah and
most Ghana politicians regard
the Volta River project as much
a political as an economic prob-
lem. The governing party has
propagandized throughout the
rural areas that it alone can
bring development to Ghana. Un-
less the party fulfills this
pledge, its rural support will
29 May 1957
disappear. Because of the de-
creased revenues available for
all development projects, the
government is cutting back on
building roads, bridges, schools,
and village buildings--moves
which have already aroused the
wrath of party "backbenchers",
in the Accra legislature. Di-
versification of the country's
economy and freedom from re-
liance on cocoa, which now ac-
counts for about 70 percent of
Ghana's foreign exchange earn-
ings, can come about only through
the development of the aluminum
potential and general industrial-
ization which electric power
from the Volta River could pro-
vide.
is limited.
cials realize their influence
Before risking the economic
and political dangers inherent
in dropping the project, the
prime minister is expected to
consider all means of financing
it. He believes the West is
the most likely source of capi-
tal, and this belief is a strong
factor in Ghana's international
orientation. The new commis-
sioner of development, who has
been responsible for the project,
says the government will not
wait more than 18 months for
financing to materialize. After
this time, Nkrumah will probably
attempt to squeeze additional
revenues from the private firms
operating in Ghana and agree to
closer economic and political
ties with the Soviet bloc in
order to obtain capital from the
Communists. Efforts are being
made by those friendly to the
Western nations to prevent the
government from taking any ac-
tion which might discourage pri- 25X1
vate investors, but these offi-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
PRESENT STATUS OF SOVIET. MILITARY COMMAND STRUCTURE
Since Stalin's death, the
Soviet Union has made a number
of organizational and personnel
changes in its military command
structure in an effort to keep
pace with the requirements im-
posed by developments in modern
warfare.
Policy Level
As Soviet minister of de-
fense and commander in chief of
the armed forces, Marshal of
SOVIET MILITARY COMMAND STRUCTURE
the Soviet Union G. K. Zhukov
has authority over all aspects--
policy, administration and oper-
ations--of the military organi-
zations. He is di-
rectly responsible
to the Council of
Ministers, but impor-
tant questions of
military policy prob-
ably are decided in
the party presidium
on which Zhukov is
a candidate (non-
voting) member.
There are some indi-
cations of growing
operational autonomy
for the individual
service headquarters,
but the general staff
maintains ultimate
operational dontrol
it particularly over the ground
forces which the USSR still-
apparently regards as the main
military arm.
Zhukov is assisted by four,
possibly five, first deputy
ministers plus several deputy
ministers, all'. but one of whom
have additional responsibilities
within the ministry. Marshal
Konev, as commander in chief of
the Warsaw pact forces and as
first deputy for general of
fairs, is Zhukov's ranking aide.
First Deputies Sokolovsky and-'
Malinovsky~are responsible for
the general :staff 'and ground
forces respectively. Admiral
S. G. Gorshkov, possibly with
the same rank, is'responsible
for naval affairs. First Dep=
uty Vasilevsky probably is in
a semiretired status. The
next highest rank, deputy min-
ister, goes with particularly
important commands and adminis-
trative positions such as Com-
mander in chief of the air com-
ponents and of the air defense
troops.
The Soviet general staff,
which over the years has assumed
numerous administrative re-
sponsibilities beyond its pri-
mary function as the planning
GENERAL
STAFF
iAIN POLITICAL
DIRECTORATE
GROUND
FORCES
AIR
DEFENSE
MILITARY
DISTRICTS
AIRBORNE
TROOPS
SECRET
MAIN
INSPECTORATE
AIR
FORCES
LONG RANGE
AVIATION
GROUPS
OF FORCES
MAIN
DIRECTORATE
OF THE REAR
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CURRENT INTELLIGENCE WEEKLY SUMMARY
21 May 1957
body of the Soviet armed forces,
seems to enjoy greater prestige
now than at any time in its
history.
This staff receives gen-
eral strategic directives from
the civil leadership through
the minister of defense and
translates these into specific
orders directly to headquarters
and field commands. It has
three planning directorates--
operations, intelligence, and
organization and mobilization--
and a number of administrative
directorates. Directorate VI,
a new addition, has been iden-
tified with the mission of con-
trolling scientific research
installations. Directorate X
has been identified as re-
sponsible for Warsaw pact af-
fairs, indicating that the pact
headquarters is an integral part
of the Soviet Defense Ministry.
A Supreme Armed Forces
Technical Council reportedly was
established in Moscow in early
1955 for the purpose of super-
vising the equipping of the
armed forces with modern weap-
ons. The council may have grown
out of a technical committee
representing all arms and serv-
ices which advised the general
staff on questions of research,
development, and design of
weapons. The entire Soviet
guided-missile program may be
co-ordinated by this committee.
Ground Forces: Headquar-
ters, Groun Forces of the So-
viet Army, is responsible for
the general development of doc-.
trine, administration, training,
and supply in ground weapons.
It is not involved, however,
in the operational chain of
command flowing from the min-
ister of defense and his gen-
eral staff to each of the major
commands.
In early 1956, Marshal R.
Ya. Malinovsky, formerly com-
mander of Soviet forces in the
Far East, was appointed com-
mander in chief of the ground
forces and elevated to first
deputy defense minister, re-
placing Marshal I. S. Konev,
Konev in turn moved ahead of
the ailing Marshal A. M.
Vasilevsky to become first
deputy for general affairs.
During the. war, Malinovsky was
associated with Khrushchev on
the'Stalingrad military council.
Although the position of com-
mander in chief has changed
hands three times since Stalin's
death (Zhukov, Konev, Malinov-
sky), the composition of the
staff appears to have remained
relatively stable.
Naval Forces: Headquarters,
Naval Forces, 1 e that of the
ground forces, is responsible
for the technical and adminis-
trative control of its subordi-
nate elements. In the headquar-
ters there are directorates for
naval supporting arms, such as
naval aviation and the coastal
defense forces ashore, and
possibly for the submarine
forces as well.
In 1955, Fleet Admiral N.
G. Kuznetsov was replaced as
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
commander in chief of the navy
by Admiral S. G. Gorshkov, who
has been described by a Soviet
naval officer as "an expert on
modern weapons." Gorshkov was
reportedly appointed to adapt
the navy to the technical de-
velopments of the nuclear age.
Other personnel changes
in the Soviet navy include:
(a) appointment of a new deputy
commander in chief for ship-
building and armaments, (b)
change of at least three deputy
chiefs of the main naval staff,
including the chief of opera-
tions, and (c) the return to
Moscow as second in command to
Gorshkov of Admiral Golovko,
chief of the main naval staff
from 1947 to 1952, from his
command of the South Baltic
Fleet.
Traditionally, some
strategic elements of the So-
viet armed forces have been held
as a "Reserve of the High Com-
mand," and units of the Long
Range Air Force possibly are
also held in this reserve.
Air Forces: Although op-
erations control extends di-
rectly from the defense min-
ister to the major ground and
naval commands, the growing
emphasis on air power in the
USSR is reflected in indica-
tions that Soviet air components
are approaching a semiautonomous
status.
In January 1957, Chief
Marshal of Aviation P. F.
Zhigarev was replaced by Mar-
shal of Aviation K. A. Vershinin
as commander in chief, a posi-
tion from which the latter was
removed in 1949. Zhigarev
is thought to be a long-range
aviation advocate, and there
is some evidence that Vershinin
was previously his deputy in
charge of air defense. Ver-
shinin's administrative qual-
ifications would make him a
logical successor. Zhigarev
has been appointed to head the
growing Soviet civil air fleet.
Other Directorates: Other
directorates on the same admin-
istrative level as the services
include a Main Personnel Direc-
torate, Main Artillery Direc-
torate, and Main Tank Directorate.
Both artillery and armor are
represented within the ground
forces headquarters, but the
main directorates have ordnance
functions. The Main Artillery
Directorate is concerned with
the procurement, supply and
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
maintenance of all weapons and
ammunition for the entire So-
viet military establishment.
In addition, in conjunction
with the Academy of Artillery
Sciences, it is responsible for
weapons research and develop-
ment.
Operational Level
The major operational com-
mands under the general staff
are the military districts and
air defense districts within
the USSR, groups of forces such
as the command in East Germany,
naval fleets and flotillas.
Headquarters of long-range
aviation, air defense and possi-
bly air-borne troops, although
within the military and air
defense districts, are centrally
controlled and operationally
responsible to the defense min-
ister. The development and
procurement of the Long Range
Air Force's equipment and the
basic training of its personnel
are the administrative responsi-
bility of Vershinin. Its pres-
ent commander is Marshal of
Aviation Sudets, probably the
third commander of this force
since Stalin's death.
The antiaircraft element
of the Air Defense Troops (PVO)
is administratively under the
artillery command for training
and equipment, while the air
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element is under the air force
for similar functions. The
commander of PVO, however, main-
tains operational control over
the interceptor aircraft and
antiaircraft components.
There is some evidence to
suggest that recent Soviet
public attention to the impor-
tance of air defense reflects
a greater autonomy for the air
defense forces. They now may
be represented at the Defense
Ministry level by two people,
PVO chief Marshal Biryuzov and
Marshal of Artillery Nedelin,
both of whom are probably dep-
uty defense ministers. There
is some suggestion that air
defense headquarters is on the
same administrative level as
the other services.
Like the PVO, the air-.borne
troops are directly subordinate
to the Ministry of Defense.
This headquarters is responsible
for the formulation of air-borne
doctrine and the supervision
of air-borne training.
In the ground forces, these
various commands have remained
relatively unchanged. There
have been some modifications
in the number and bou darieg
of military districts7
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CURRENT INTELLIGENCE WEEKLY SUMMARY
29 May 1957
PEIPING'S TRADE PROGRAM IN SOUTH ASIA
Determined to capture a
larger share of the South Asian
market, for political as well
as economic reasons, Communist
China increased its exports
to this area by 80 percent dur-
ing 1956 despite serious in-
ternal economic difficulties.
oug imports remained approxi-
mately the same in 1956 as in
1955, total Chinese trade with
major South Asian countries
rose some 37 percent to almost
$250,000,000. Normally a net
importer in trade with South
Asia, China achieved in 1956 a
larger export balance in trade
with the area, chiefly through
price cutting and stepped-up
sales of light industrial prod-
ucts. Peiping's decision in
late 1955 to allocate a larger
share of investment funds to
light industries was probably
dictated in part.-by a desire
to meet the growing demand in
these countries for light in-
dustrial products.
In the case of countries
having large Chinese popula-
tions in South Asia, such as
Malaya and Indonesia,
China is attempting
with considerable suc-
cess to develop mar-
kets for native Chi-
nese products, most-
ly consumer goods.
China's exports to
Indonesia were three
times the volume of
imports, and to Ma-
laya, more than five
times imports. Pei- INDO NDIA
ping is also court-
ing Indonesian and
Malayan exporters
with visions of an
almost limitless
Chinese demand for
MALAYA
INDONESIA
INDIA
their products. Chi- CEYLON
nese purchases in
late 1956 following
the removal of the
embargo on rubber
have been disappointing to
Malaya, but China may shift
purchases to this area after
expiration this year of its
rice-rubber contract with
Ceylon.
Peiping has been attempt-
ing to expand its trade rela-
tions with Ceylon beyond the
five-year rice-rubber pact,
and will probably insist on
settling its trade debt to
Ceylon--normally paid in ster-
ling--with Chinese goods as a
means of introducing goods
other than rice into the Cey-
lonese market. For their part,
the Ceylonese would prefer a
continuation of the existing
arrangement, and their trade
mission, recently back from
Peiping, failed to find signif-
icant quantities of suitable
Chinese goods.
$500,000
in
1954 to
over $2
5,-
000,000
in
1956. Bu
rmese
resentment
over the
fact th
at
China's large purchases
of rice from Burma in 1955 and
1956, ostensibly to reduce Ran-
goon's exportable surpluses,
enabled Peiping to raise its
trade with Burma from less than
CHINESE TRADE WITH SOUTH
AND SOUTHEAST ASIA
IMPORTS
I EXPORTS
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6 -
16
111
1 956(ESTIMATE)
70504 4
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29 May 1957
China resold much of this rice
to traditional Burmese cash
customers was in part dispelled
by the satisfaction Burmese im-
porters have expressed for Chi-
nese goods. Burmese importers
are now purchasing such large
quantities of these goods that
Burma, having reduced rice ex-
ports to China because of in-
creased free world cash sales,
has had to put imports from
China on a cash basis.
In 1956, China boosted its
formerly negligible exports to
Pakistan by agreeing to deliver
$3,500,000 worth of coal to re-
lieve Karachi's almost complete
dependence on Indian supplies,
an arrangement which may con-
tinue. In addition, Pakistan
accepted China's offer of 60,000
tons of rice last year to reduce
famine conditions in East Pak-
istan.
re ularl available in quantity.
In India, where Chinese
exports had amounted to less
than 50 percent of imports,
Peiping reversed its trade posi-
tion in 1956 by selling raw
materials required by India's
growing industries. Heavy in-
dustrial materials such as iron
and steel products and chemicals,
as well as raw silk and news-
print, actively competed in
markets normally held by non-
Communist traders and were pri-
marily responsible for the more
than 100-percent increase last
year in Chinese exports to India.
Over 25 percent of India's pur-
chases of chemicals in 1956 came
from China. Indian importers,
expressing satisfaction with
these new Chinese industrial
materials, have indicated they
will divert more of their busi-
ness from traditional sources
when Chinese products become
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