CURRENT INTELLIGENCE WEEKLY SUMMARY
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Publication Date:
March 27, 1958
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CONFIDENTIAL
S~fAFZ
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 14
OCR NO.0038/58
27 March 1958
CLASS. CHANGED TO:
NEXT REVIEW DATE:
DOCUMENT NO.
NO CHANGE IN CLAM 0
0 DECLASSIFIED
DATE.M&EVlEWER:
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL
.,, .S Et RECORDS CENTER
AFtER USE 25X1
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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CURRENT I NE ' ALY SUMMARY
%WW
CONFIDENTIAL
OF IMMEDIATE INTEREST
KHRUSHCHEV ASSUMES SOVIET PREMIERSHIP
Soviet party First Secre--
tary Khrushchev, by assuming
the premiership, has taken one
of the final steps in negating
completely the post-Stalin myth
of collective leadership. He
has apparently disregarded the
risks of being accused of be-
coming a latter-day Stalin, and
there appear to be no forces
in the party presidium to stop
him. As in Stalin's day, the
personality of the leader will
-greatly affect Soviet policy.
A Khrushchevian flavor is al-
ready apparent in virtually all
aspects of Soviet domestic and
foreign affairs. Khrushchev
has gone far down Stalin's road.
He has moved faster, but has
not yet had to use terror.
Khrushchev's assumption of
the premiership in addition to
his duties as party first secre--
tary may be explained in part
by his desire to be recognized
as.the top Soviet government
representative for purposes of
high-level international nego-
tiations. This alone, however,
is probably insufficient reason
for him to assume the additional
burdens of office and the lia-
bilities inherent in a further
personal build-up. Khrushchev
probably feels he can best run
the show alone and that the
Council of Ministers under Bul-
ganin was a hindrance to putting
his policies into c f ect rapid-
ly. Similarly, he undoubtedly
chafed under committee rule,
considering it a system which
was too cumbersome and produced
too many compromise decisions
for his impatient nature.
Khrushchev has indicated
recently that he intends to rely
more and more on the party at
the expense of the government;
this trend will undoubtedly con-
tinue.despite his new day-to-
day responsibilities as head
of the government. He has
shown phenomenal ability in the
past to delegate authority and
this practice will have to be
expanded. The recent decentrali-
zation of state administration
and the decrease in the size
and authority of the Council of
Ministers.. make the premiership
somewhat less rigorous than it
was under Stalin.
The composition of the
Council of Ministers is almost
certain to change. There have
been indications that some min-
isters will not be reappointed
at the Supreme Soviet session,
and other shifts are likely to
follow once Khrushchev is in
his stride. The key posts of
defense and foreign affairs,
however, will probably not be
affected.
The Supreme Soviet meeting
was `probably preceded by-a par-
ty central committee plenum
where changes in the party hier-.
archy as. well as Bulganin's
removal were approved. An
official listing of party pre-
sidium members attending the
Supreme Soviet moves Pospelov
from first among the candidates
to last, replacing Pervukhin, 25X1
who recently became Soviet am-
bassador to East Germany.
CONFlDENT-
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CURRENT INTELLIGENCE WEEKLY 8IARY
SOVIET SUSPENSION OF NUCLEAR TESTS
A resolution will be read
to the Supreme Soviet session
that opened on 27 March stating
that "the Soviet Union, from
today, will stop all tests with
nuclear weapons," according to
the press. A uflilaterT l suspension
would be intended to put pres-
sure on the Western powers to
stop their tests without agree-
ment on an inspection system
for test suspension and to in-
crease pressure on the United
States for a summit conference.
The Soviet statement was
preceded by a 14 March speech
by Khrushchev and private diplo-
matic hints pointing to a uni-
lateral Soviet suspension of
both testing and production of
nuclear weapons.
The tempo of Soviet testing
since the first of January has
been the highest observed in
the history of the Soviet nu-
clear weapons development pro-
gram, perhaps indicating an at-
tempt to complete the present
series of tests quickly in order
to announce a test moratorium
at a time when the United States
is about to begin a new test
series.
Moscow probably believes
the public impact of its 'demon-
strations over the past six
months in the field of weapons
systems would eliminate any ap-
pearance of military weakness
which might otherwise have been
suggested by a unilateral sus-
pension. Ambassador Thompson
has noted recent references by
Khrushchev to the dangers of
radiation, which probably were
psychological preparation for
a Soviet announcement of uni-
lateral suspension.
A major aim of such a So-
viet announcement would be to
undercut Western efforts to en-
force a suspension of tests
through an inspection system.
Soviet leaders have always been
wary of any form of inspection
in the USSR yet probably antici-
pate that world opinion will
eventually force some type of
control if not suspension of
tests. The Soviet action would
have a heavy impact in Britain,
where the Labor party is advo-
cating a temporary test sus-
pension and some of its mem-
bers are publicly demanding
a complete halt in nuclear
weapons production.
(Concurred in by OSI)
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Indonesian Government
forces have secured the east
coast of Central Sumatra,.in-
eluding the Caltex and Stanvac
oil production areas, and are
now moving overland toward the
dissident centers of Padang and
Bukittinggi. Dissident troops,
which put up their chief re-
sistance in these areas at river
crossings, probably will con-
tinue to harass government
forces at such points as the
latter proceed westward. Dis-
sident commander Lt. Col. Hus-
sein's strategy allegedly is to
conserve his forces' strength
for a major defense effort in
the west, where mountainous ter-
rain will be more favorable to
his troops.
The most serious clashes
to date have occurred in N6rth
Sumatra. These followed the
withdrawal of dissident units
southward from Medah to Siantar
and then toward Prapat, and the
appearance of other dissident
units from Tapanuli. The gov-
ernment claims substantial dis-
sident surrenders. Insurgent
forces are now returning to
Tapanuli, and the Siantar-Prapat
area appears to be under govern-
ment control.
In North Celebes, a lull
in military activity continues.
Lt. Col. Somba, North Celebes
dissident commander, has ar-
ranged an alliance with a guer-
rilla organization of some 300
men, and has recalled to service
inactive and retired personnel
of both the Indonesian Army and
the former Royal Netherlands
Indies Army.
. In Djakarta, the government
is preparing to submit for par-
liamentary approval a Chinese
Communist agreement of $20,000,-
000 which would provide for a
textile factory, 20,000 tons of
rice, and 70,000,000 yards of
textiles. In view of present
shortages in Indonesia, ar-
rangements are being made
for deliveries of the rice and
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textiles before the loan agree-
ment is finalized.
An Indonesian Foreign Min-
istry official has said he un-
derstands Russian officers will
continue to serve on the mer-
chant ships recently purchased
from the Soviet Union untila
sufficient number of Indonesians
are qualified, and that the Rus-
sians will also instruct in the.
merchant marine school on the
use of the vessels.
Increased Indonesian Com-
munist party activity is re,-
CURRENT INTELLIGENCE WEEKLY SUMMARY
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flected in an anti-US, anti-
SEATO student demonstration
at the American Embassy in
Djakarta on 25 March, the
appearance of anti-Western
slogans on Djakarta streets,
and a wave of anti-SEATO,
noninterventionist petitions
to the American Embassy from
Communist-front groups. Al-
though all activity thus far
has been orderly, the Commu-
nists have the capability to
inspire mass demonstrations
which could easily 1 elt out of
control.
MALAYA
PoaE"?`?
SUMATRA
.Tandjung Pinang
RIAU ISLANDS
B 0 R N E 6
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NOTES AND COMMENTS
The month-long parliamen-
tary recess beginning 28 March
will give Premier Gaillard a
respite but will not free him
from rightist clamor on the Tu-
nisian issue or from possible
Socialist demands for conces-
sions to labor, either of which
might result in cabinet resigna-
tions and cause the downfall of
his government. The Socialists
and Independents are increas-
ingly at odds as the campaign
for the 20 April General Council
elections in the departments
develops.
Gaily rd's most pressing
problem is -#~o avoid a showdown
on Tunisia. '-Many Independents
were determined to provoke a
crisis on this issue, and both
they and the Social Repurblicans
have set up "watchdog" commit-
tees to function during the re-
cess. Both parties have taken
strong positions against any
concessions to Tunisia on Bi-
zerte, the airfields, or "neu-
-trality" in the Algerian war,
but they are following a wait-
and-see strategy until Gaillard
makes some definite .response'
to the good'offices propos-
als.
Meanwhile, a rash of 48-
hour strikes is expected in
early April among transportation,
power, and postal workers. These
labor disputes could seriously
embarrass the government if the
Socialists feel obliged to de-
mand wage increases for labor.
Gaillard has managed so far to
maintain the major aspects of
his austerity program.
The electoral campaign is
deepening the rift between the
wings of the coalition, par-
ticularly as pressure for work-
ing out deals for the 27 April
run-offs aggravates political
tensions. Socialist party Sec-
retary General Guy Mollet has
charged that the Independents'
electoral program is directed
principally against his party.
He warns that if some local In-
dependent leaders attempt to
form run-off alliances with':
the, Poujadists, the Communists
will be provided with an oppor-
tunity to make an attractive 25X1
offer to the Socialists for
a united stand against a
"fascist menace."
Delegates of the dominant
Moroccan Istiglal and Tunisian
Neo-Destour parties; and the
Algerian National Liberation
Front (FLN) will hold a congress
on 27 April in Tangier with the
objective of establishing the
bases for a united Maghreb
(North African federation) and
of seeking the means to realize
such a union. The delegates
probably will also seek more
effective support for the Al-
gerian rebellion. The creation
of a united Maghreb is also
viewed by these groups as a way
to lure Algerian nationalists
from Cairo's influence, as well
as to maintain pressure on Rabat
and Tunis to prevent concilia-
tory arrangements with Paris.
The Algerian nationalists, who
have intermittently debated the
advisability of creating a
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government-in-exile, may hope
that Morocco and Tunisia, which
may have discouraged such an
undertaking, can be maneuvered
into sponsoring it in order to
launch a united Maghreb.
Tunisian President Bour-
guiba is impatiently awaiting
Paris' response to the latest
good offices proposals for im-
proving relations. He has in-
dicated that he can make no more
concessions and that if Paris
does not endorse the proposal
he will press for UN action.
Gaillard has apparently been
stalling for time until the Na-
tional Assembly adjourns for
the Easter recess on'28 March.
Despite assurances to the
contrary, Bourguiba still fears
the French military may attempt
to reoccupy the country or that
a French-backed coup may be at-
tempted against him. The FLN
has publicly declared that all
its facilities would be placed
at his disposal should hostili-
ties break out with France.
In Algeria, Minister La-
coste has again declared that
the battle of the Tunisian bor-
der is being won. While Lacoste
has been optimistic regarding
implementation of the new basic
statute, he has set back from
1 April to July the date when
appointive local councils are
to be ready to assume responsi-
bility. As watered down by
successive amendments, the basic
statute is unlikely to satisfy
Algerian aspirations for first-
class citizenship and responsi-
bility for their own affairs.
In Morocco, pressure is
being built up for a firmer
posture toward France and Spain.
When informed that France would
withdraw 10,000 of its 40,000
troops in Morocco, Rabat indi-
cated it expected a complete
evacuation. Meanwhile, a new
attempt may be made to reach 25X1
an amicable settlement of Mo-
rocco's territorial dispute
over Southern Morocco.
SOVIET TACTICS ON THE GERMAN QUESTION
The Soviet Union, to in-
tensify pressure on the West
for a summit conference, is
trying to create an impression
of flexibility on the German
question. Moscow is handicapped
in this effort by its continu-
ing opposition to German unifi-
cation which, under any feasi-
ble scheme, would be less de-
sirable in the Soviet view than
the status quo. Moscow hopes
to avoid summit discussion of
this topic and instead has pro-
posed discussing a German peace
treaty at the summit. In its
19 March aide-memoire to Bonn,
the USSR suggested that such a
treaty be concluded with a
delegation agreed upon by
the East and West German gov-
ernments.
The USSR's present sugges-
tions resemble that country's
tactics in 1952 before it ac-
ceded to Western insistence
that free elections be the first
step toward unification. A Ger-
man peace treaty, proposed by
Moscow as an agenda item in a
note to the United States on
28 February, has been advertised
by Soviet spokesmen as a move
toward unification. The Soviet
ambassador to Bonn has claimed
that'the peace treaty proposal
was based on suggestions made
by West German Bundestag Presi-
dent Gerstenmaier in discus-'
sions with Soviet officials.
The Soviet aide-memoire
of 19 March denied that two
separate German treaties would
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10 December 1957
Letter to President
Eisenhower
8 January 1958
Letter to President
Eisenhower
B January 1958
Proposals to NATO
and India, Egypt,
Sweden, Afghanistan,
and Austria
"It goes without saying that
questions directly relating
to Communist China can be
solved only with its participa-
lion"
I February 1958
Letter to President
Eisenhower
28 February 1958
Aide-memotre to
President Elsen-
hower
1 March 1958
Letter to Pineau
6 March 1958
Letter to President
Eisenhower
14 March 1958
Letter to Macmillan
24 March 1958
Aide-memolre to
President Eisen-
hower
Agree first to hold sum-
mit conference - then pro-
cedural questions can be
handled through diplomatic
channels
In the nearest future;
time, place, definite com-
position, and agenda of
summit conference to be
determined by conference
of foreign ministers
Suggested: June 1958 -
firm agreement on date
should be reached (in dip-
lomatic talks in near fu-
ture) before fore min-
isters con erence
To be determined by for-
eign ministers' conference
- USSR favors "early con-
vocation In accord with the
aspirations of all nations"
Calls merely for "meeting
of the heads of government"
NATO and Warsaw states -
also "some" neutrals - (of
paramount importance that
talks be on highest level
with participation of heads
of government)
1) all NATO and Warsaw
states with participation
of such neutrals as India,
Afghanistan, Egypt, Yugo-
slavia, Sweden, Austria, or
2) narrower composition:
two or three from each
grouping, or
3) US, USSR, and one neutral.
To be determined by foreign
ministers' conference: possible,
AR NATO and Warsaw states
and a number of neutrals, e. g.,
India, Afghanistan, Egypt,
Sweden, and Austria
Parity basis - e, g.,
West: France, US, UK, Italy;
East: USSR, Poland, Czecho-
slovakia, and Rumania
and some neutrals mentioned
in 8 January proposals (Sweden,
Afghanistan, Austria, Yugo-
slavia, India)
To be determined by foreign
ministers' conference
PRELIMINARY FOREIGN
MINISTERS MEETING
USSR against preliminary for-
eign ministers' conference
(biased participants; might pre-
clude summit meeting)
Preliminary foreign ministers'
conference would create ob-
stacles to summit talks; hold
such conference after (to draw
up agreements recd at sum-
mit)
Wish to avoid making summit
conference conditional on out-
come of foreign ministers' con-
ference (biased participants,
create obstacles to summit con-
ference) - if agreement on hold-
ing summit conference reached,
procedural questions can be settled
through diplomatic channels
April 1958 - to be strictly Limited
to organizational questions - in a
place acceptable to the other par-
ticipants - same composition as
summit conference, or, if nar-
rower conference desired: US,
UK, France, Italy, USSR, Po-
land, Czechoslovakia, Rumania,
India, Yugoslavia, and Sweden.
(But such possible limitation
should in no way predetermine
composition of summit confer-
ence)
Suggested: Geneva, April 1958 -
in diplomatic talks in near future
composition, time, and place of
foreign ministers' conference
could be determined as well as
time of summit conference - for-
eign minis(ers' conference could
prepare agenda and determine
composition of summit conference
Some questions involved could be
settled through diplomatic channels-
but USSR ready to meet US sugges-
tions on foreign ministers' confer-
ence half way - it could be called
in April to draw up agenda and de-
termine composition, time, and
place of summit conference
Suggested: April - limited to deter-
mining agenda, composition, time,
and place of summit conference
Same as 14 March 1958 note
to Macmillan (above)
1) US, USSR, UK (a) ban use nu-
clear weapons, (h) suspend tests
as of 1 January 1958 for 2-3
years.
2) atom-free zone in central Europe
3) NATO-Warsaw nonaggression pact
4) Middle East - agree not to infringe
independence, no use of force
5) halt propaganda
6) restore normal trade
7) scientific, cultural, sports con-
tacts
8) US- USSRtrcaty of friendship (USSR
willing discuss questions other
participants might find necessary)
After confidence established:
(A) cut armed forces and arma-
ments
(B) nuclear weapons: complete
ban, stop manufacture, de-
stroy stockpiles
(C) withdraw foreign troops from
NATO-Warsaw states
(D) establish system collective
security
Proposals 1b, 2, 3, 5, and 6 above,
and
9) reduction foreign forces in NATO-
Warsaw states
(also steps (A) thru (D) at future
stage of negotiations)
Proposals 1 through 7 and 9 above and:
10) measures to prevent unexpected
attack; disarmament controls-
-control posts
-800-kilometer zone aerial
photography east and west of
line dividing NATO and War-
saw states
Proposals 1 through 6 and 9 and 10
above, and
11) (a) USSR ready to examine question
of intercontinental rockets if
West willing to agree to (biban
atom and hydrogen weapons, (c)
end tests and (d) liquidate for-
eign military bases
USSR willing discuss other "construc-
tive proposals" - all participants should
be In tali accord on necessity of consider-
ing such proposals (discussion of Security
Council veto, Eastern Europe, and Ger-
man unification ruled out)
Proposals 1 thru 6, 9, 10, 11 (points a
and d only) and "other constructive
proposals"....also:
12) conclusion German peace treaty
(with East and West German par-
ticipation)
13) development personal contacts
(discussion Eastern Europe and
German unification ruled out)
On 15 March 1958 USSR expanded this
proposal to include:
-ban on use cosmic space for military
purposes, and rocket launching only
under agreed International program;
-elimination foreign military bases,
primarily in Europe, Middle East,
and North Africa
-international control through UN of
above obligations
-UN agency for international coopera-
tion in study of cosmic space
Issues should be included on agenda
by mutual agreement - discussion
of reunification of Germany In con-
nection with atom-free zone and of
cessation of manufacture of fissiona-
ble materials in connection with test
ban ruled out
Proposals 8, 11 (points (a) and (d)
only), 12 and 13 - USSR prepared at
any time to sign agreement on point
(B) above "with appropriate Interna-
tional control"-
prepared to discuss other construc-
live proposals... (but none which fall
in province of internal affairs of other
states - e. g. , Eastern Europe and
German unification) - also:
14) ways of strengthening UN (but
not giving up Security Council
veto)
Proposals of 8 January 1958 - also:
11 (a and d), 12, 13, 14 and "other
constructive proposals" - still un-
willing to discuss Eastern Europe,
German unification, elimination of
Security Council veto
Proposals identical to those mentioned in
28 February 1958 alde-memoire
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CURRENT INTELLIGENCE WEEKLY SUMMARY
be necessary or that a confed-
erated German state must first
be formed to negotiate the."?
treaty. Yet Moscow continues
to oppose German reunification,
a step which would be necessary
before a peace treaty could
take effect. Further, Moscow
would insist, as in the past,
on an advance pledge of neu-
trality for a reunified Germany.
For-this reason, the proposal
for a peace treaty as a topic
for discussion at the summit
has had a negative response in
West Germany.
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CURRENT'INTELLIGENCE WEEKLY SUMMARY.
27 March 1958
SOVIET STEEL INDUSTRY
The Soviet steel industry
will probably be able to achieve
an annual production of 100,-
000,000 to 120,900,000 metric
tons of crude steel in about
15 years, as proposed late in
1957 by Khrushchev. The Soviet
goal is equivalent to about
90 percent of present US capa-
city. Construction plans will
probably not be fully met in
1958 and 1959, but by the end
of 1960 the effects
of inadequate invest-
ment in the past,
particularly in iron
ore mining, will
gress in February 1956, when a
behind-the-scenes-struggle
between the technologists ad-
ministering ferrous metallurgy
and the.planners emerged.
The decision in late 1956
to accept a limited increase
in production while concentrat-
ing capital and material re-
sources on eliminating the
imbalance has resulted in lower
25X1
USSR: CAPACITY INCREASES I N IRON AND STEEL INDUSTRY
MILLIONS OF METRIC TONS
probably be largely TYPE OF 1956
overcome. CAPACITY PLAN ACTUAL
Although efforts
have been made over
the years to balance
the growth of all
parts of ferrous
metallurgy, Soviet
planners have at the
ORE MINING
& PROCESSING
BLAST FURNACE
STEELMAKING
1957 1958 1959 ORIG.61H
PLAN ACTUAL PLAN PLAN 5-YR PLAN
20.0
7.OEST.
10.0
24.7
84.0*
1.0
2.1
2.1
4.7
7.1
16.8
1.4
3.0
2.1 ESL
2.5
-
15.8
* May have been raised to 91,000,000 tons.
27 MARCH 1958
same time insisted on greater
steel output without providing
the necessary investment. This
policy was reflected in the
Fifth Five-Year Plan (1951-55)
when crude and finished steel
production exceeded goals, but
nearly all other targets in
ferrous metallurgy were missed.
The problem was not openly
aired until the 20th party con-
growth rater for Steel production
and made the ferrous metallurgy
goals of the Sixth Five-Year Plan
(1950-60) unattainable. Goals
more consistent with 15-year tar-
gets are expected in the upcom-
ing Seven-Year Plan.
In 1957 the planners sched-
uled production increases small-
er than in 1956,and this year's
plan calls for still more modest
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N-W sICKI-1
CURRENT INTELLIGENCE WEEKLY S
production increases. Plans
for the construction of new
capacity during 1958 and par-
ticularly 1959 indicate a con-
tinuing effort to balance seg-
ments of the industry by con-
centrating on expansion of the
industry's raw material base.
The USSR's crude steel
output last year, second largest
in the world, was up 5 percent
from 1956, which compares with
rises of 4 percent in West Ger-
many and 5 percent in Britain
and a 2-percent drop in the
United States. Soviet crude
steel production during the
first quarter of 1957 was 44
percent of that of the United
States but is expected to rise
to 73 percent in the first quar-
ter of 1958, principally as a
result of the reduced American
production rate. In crude
steel production capacity, how-
ever, the Soviet industry grew
by 5 percent in 1957 and the
American b over 9 percent.
Prepared by ORR) 25X1
HUNGARY RESUMES MEASURES AGAINST "COUNTERREVOLUTIONARIES"
After a short lull, the
Hungarian regime in recent weeks
has returned to the practice of
holding secret trials of "coun-
terrevolutionary criminals" and
publicizing the sentences in a
final effort to dispose of the
remaining cases of persons ac-
tive in the 1956, revolt and
suspected sympathizers. Its
policy has been to punish such
elements severely.
The minister of justice has
ordered that trials be speeded
up. Two leaders of the impor-
tant Csepel Island group of
revolutionaries were recently
put to death, after the Supreme
Court reversed its original ac-
tion commuting their death sen-
tences; nine other Csepel work-
ers reportedly have been hanged
recently. In the provincial
city of Szeged in southern Hun-
gary, ten defendants received
sentences ranging from two
years'imprisonment to long
prison terms and death. A
writer, Andras Sandor, received
a somewhat moderate sentence
of eight years on charges of
organizing a national committee
in Sztalinvaros and inciting
the populace against the secu-
rity police and the USSR. Final-
ly, the trial of Sandor Racz
and Sandor Bali--leaders of the
important central revolutionary
workers' council--is expected
"momentarily" in Budapest.
This wave of trials suc-
ceeds a period of relative calm
following the confirmation of
Janos Kadar as party first sec-
retary and the elevation of
Ferenc Muennich to the premier-
ship on 27 January--a lull which
may have been intended to get
the "new" regime off to a good
start. The regime, however,
never relaxed its intention to
wreak vengeance on its oppo-
nents--as indicated by state-
ments of both Kadar and Muen-
nich--and it is currently con-
ducting a purge of the legal
profession to ensure rigorous
fulfillment of its objectives.
Sporadic deportations from
Budapest to the provinces are
continuing as a convenient way
of getting rid of individuals
who showed any sympathy for the
revolution. Some workers have
been dismissed from their jobs
as "unreliable," according to
the official trade union news-
paper. Finally, as a minor form
of harassment, a number of Buda-
pest residents have had their
driver's licenses canceled,
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SECRET. .
27 March 1958
.CURRENT INTELLIGENCE WEEKLY SUMMAR'f'
apparently because of political
unreliability.
The regime has not yet
indicated its intentions con-
cerning former Premier Imre
Nagy and his colleagues, still
interned in Rumania, but it
has indicated an intention to
call revolutionary hero General
Pal Maleter to account. Pub-
lic statements relating to Nagy
suggest that no final decision
has been reached on his fate,
although the campaign against
"revisionism" has been pressed
with considerable vigor. The
Nagy case is connected with
bitter factional strife within
the Hungarian party,
In any case,
the timing an procedures used
in the Nagy case will be de-
cided in relation to Moscow's
estimate of international re-
percussions,
25X1
25X1
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SECRET
CZECHS MOVING TOWARD COMPLETE COLLECTIVIZATION OF AGRICULTURE
The Czech regime's recent
action requiring settlement by
the end of March of arrears in
compulsory deliveries of agri-
cultural produce appears to
signal the reopening of the
collectivization campaign, which
in 1958 should bring Czecho-
slovakia close to total agri-
cultural socialization. Last
fall the government decreed
that private peasants and agri-
cultural cooperatives would
have up to 1960 to liquidate
debts in installments. Moving
up the deadline to the end of
March this year will place the
heaviest burden on those with
farms of 12 to 50 acres,which
make up the major portion of
the remaining private holdings.
This action will,~provide a
powerful lever for forcing pri-
vate farmers into collectives,
if they do not meet back de-
liveries,;which in many cases
will be impossibly high.
The regime has also raised
1958 compulsory delivery quotas
for all farmers, with the great-
est demands falling on private
peasants with small holdings
of up to 12 acres, and is re-
quiring those factory workers
who operate small farms to make
deliveries to the state for the
first time since 1953.
These actions provide a
legal means for expropriating
the land of private farmers and
a method for combating infla-
tion in the countryside. Last
year the government was forced
to pay higher prices for pro-
duce because farmers held back
compulsory deliveries. Now,
those who manage to eke out
payments will be left with lit-
tle more than enough to meet
expenses.
The socialist sector,
which comprised 44 percent of
all agricultural land at the
beginning. of 1957, reached 65
percent by the end of the year.
Collectivization goals were
raised repeatedly, and an
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SECRETy
CURRENT INTELLIGENCE' WEEKLY SUMMARY
27 March 1958
CZECHOSLOVAKIA
DISTRIBUTION OF AGRICULTURAL LAND
JAN 1957 JAN 1958
(ESTIMATED)
intensified collectivization
drive reduced the area of agri-
cultural land in the private
sector by one third. Should
this year's drive be pushed
equally hard,. as the-US Embassy
believes it will be, well over
80 percent of the agricultural
land could. be socialized, and
Czechoslovakia, with Bulgaria,
would then approach the Soviet
standard of complete socializa-
tion.
While officials contend
that production goals for the
Second Five-Year Plan (1956-60)
can be met only if all land is
socialized, collectivization
generally results in at least
temporarily lowered agricultural
production. Underfulfillment
of last year's plan for agri-
cultural output can in part be
ascribed to the fact that land
was collectivized faster than
mechanized farm equipment was
made available. Collectiviza-
tion also caused many farm work-
ers to migrate to cities. With
insufficient machinery and a
reduced agricultural labor force,
production goals for 1958 will
be extremely difficult to
achieve. I(Pre- 25X1
pared by
PEIPING ELICITS PLEDGES TO MEET EXTRAVAGANT ECONOMIC GOALS
Peiping, in a far-reaching
campaign to achieve levels of
production greatly in excess of
those now planned, is encourag-
ing ministries, localities, and
enterprises to make extravagant
pledges. The campaign goes far
beyond a normal exercise in so-
cialist competition and will
probably result in some upward
revisions in official targets
for both 1958 and the Second
Five-Year Plan (1958-62).
The extent to which indus-
trial targets have been raised
is reflected in a suggestion
from Peiping that the gross val-
ue of industrial production this
year might rise by as much as 33
percent over last year, as com-
pared with the 14.6-percent in-
crease called for in the 1958
plan. approved last month. Con-
struction schedules have been
speeded, and a number of indus-
tries which were called on late
last year to pass Great Britain
in output in about 15 years are
now pledging to do it in five
or ten.
An "overwhelming majority"
of the nation's counties now
plan to fulfill five years ahead
of schedule the main targets of
the 12-year agricultural devel-
opment program, just revised
late last fall. Over 764 coun-
ties and cities, farming 30 per-
cent of China's cultivated land,
have undertaken to reach the
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,- SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
27 March 1958
program's 12-year grain yield
goals this year, and 115 other
counties and cities have prom-
ised to meet the program's cot-
ton yield goals in 1958. An
official of the Ministry of Ag-'.
riculture comments that if these
pledges are fulfilled and'.'
other areas follow suit, China's
agricultural output
will increase by
"more than 10 or even
20 percent a year,"
as against the aver-
age annual rate of
only 3 or 4 percent
in the past five
years.
Peiping hopes to
attain a sizable por-
tion of the increases
in industrial produc-
tion by pressing
plants to produce
more at less cost. At
the same time heavy
reliance is being
placed, both for 1958
and the future, on
pacity has its limitations" and
pointed out that not every work-
er can meet Stakhanovite stand-
ards. While some party leaders
probably sympathize with this
view, they are not openly ques-
tioning the new line. The Chi-
nese Communists are building a
strong head of political pres-
COMMUNIST CHINA: PLEDGED PLAN OVERFULFILLMENT
MILLION METRIC TONS, EXCEPT AS NOTED)
1958
PLANNED I PLEDGED
STEEL
COAL
CHEMICAL
FERTILIZERS
ELECTRIC POWER
BILLION KWH
HOGS
MILLION HEAD
SUGAR
small and medium enterprises at
the local level. Peiping first
began to explore the potentiali-
ties of such enterprises a year
ago and has given them new em-
phasis in the present campaign.
Industrial ministries are draw-
ing up "standardized blueprints"
for local use. Peiping has ex-
pressed the hope that every
county in the nation will estab-
lish "substantial numbers" of
enterprises which would use'a
minimum of state funds but would
still increase industrial pro-
duction by "leaps and bounds."
Peiping has admitted there
is some opposition to the pro-
gram and has called present dis-
cussions of the problems in gov-
ernment offices and production
centers a "severe struggle be-
tween progressive and backward
views." Those opposed to rapid
achievement of higher production
targets--among both managerial
personnel and the workers--have
argued that "human working ca-
6.25
150.7
7.0
168.0
150.0
1.01
1962
PLANNED I PLEDGED
12.0
230.0
15-16
300.0
220.0
sure behind their effort to meet
raised production goals, and
the regime will probably suc-
ceed in developing the proper
"enthusiasm," even among con-
firmed skeptics.
There is little evidence
that the planning commissions
in Peiping have successfully
blended the extravagant and of-
ten contradictory output pledges
into a balanced plan, in order
to avoid the serious competition
for scarce funds and raw materi-
als which occurred during the
last great upsurge in 1956.
When this is done, some of the
more grossly inflated goals now
proposed will have to be modi-
fied, especially since they are
predicated on wildly optimistic
increases in agricultural out-
put. The net result will prob-
ably be some upward revision
in the official plans both for
1958 and the Second Five-Year
Plan. Prepared 25X1
by ORR)
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SECRET` "
CURRENT INTELLIGENCE WEEKLY SUMMARY
JAPAN - NATIONALIST CHINA RELATIONS
. The impasse between Japan
and Nationalist China continues
over whether the Chinese Commu-
nists are to be allowed to fly
their flag over a projected
trade mission in Tokyo. The
Japanese have proposed sending
a special representative of
Prime Minister Kishi to Taipei
to explain the government's po-
sition regarding the private
trade agreement recently con-
cluded with Peiping, but the
Nationalists have indicated
that the representative would
be welcome only if he brought
a satisfactory statement re-
garding the flag issue.
The Japanese appear to be
attempting to find a formula
which, while it indicates gov-
ernment approval of the pri-
vately negotiated trade agree-
ment, would satisfy Taipei on
the flag issue. Nationalist
Foreign Minister Yeh has strong-
ly denounced a Kishi statement
to the effect that Japan would
not take cognizance of any Chi-
nese Communist flag flown in
Japan.
The Nationalists have al-
ready broken off trade rela-
tions with Japan and may take
additional measures designed to
force the Japanese Government
to disapprove i f lying i the Commu-
nist flag. Demonstrations may
be organized and possible action
against the Japanese Embassy in
Taipei may occur if these get
out of hand. Another meas-
ure might be promotion of an
Overseas Chinese boycott of
Japanese goods, which in the
opinion of most observers would
not be very effective.
It is also possible that
Taipei might order the seizure
of Japanese shipping within the
operating radius of the Nation-
alist Navy, particularly ships
bound for Communist China.
Chiang Kai-shek has announced
his intention to break rela-
tions with Japan if the Chi-
nese Communist flag is raised
in Tokyo.
Peiping radio has main-
tained a discreet silence on
the subject of the Taipei-Tokyo
impasse, although Moscow radio
has attempted to exploit the
issue by asserting that Chiang
Kai-shek's strong stand is the
result of American support. The
Chinese Communists probably
feel that the political gains
to be won are important enough
for them to remain adamant on
the flag issue.
25X1
25X1
CHANGES IN NORTH KOREAN LEADERSHIP
Kim Il-sung, North Korean
premier and party boss, has
recently elevated several lead-
ing Communists to the party
presidium, the first additions
to the party's highest ranking
organ since the third party
congress in April 1956. Most
of the promotions have gone to
individuals who are believed
to have helped Kim put down the
attacks against his policies
in the fall of 1956. Their
appointments assure continua-
tion of Kim's policies of em-
phasizing heavy industrial
production and combating any
liberal tendencies.
The only individual pro-
moted to full membership on the
presidium is former alternate
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SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
27 March 1958
member and party theoretician,
Kim_ Chang-man, who takes the
seat forfeited by the leader
of those purged in 1956. As
a leading intellectual, Kim
Chang-man last year was given
the job of eliminating liberal
tendencies at the university in
Pyongyang.
Two new alternate members
of the presidium have been
named. One, Han Sang-tu, is
director of the organization
commission under the central
committee. He replaced Kim
Sung-hwa as chairman of the
Korean Federation of Trade
Unions when the latter was
implicated in the "antiparty"
plot of 1956. The highly
placed individuals in this
conspiracy had hoped to re-
verse Kim Il-sung's program
of heavy industrialization and
divert funds to the manufacture
of consumer goods and light in-
dustry. Reportedly they also
accused the premier of practic-
ing the "cult of the individual,"
but, after failing to win suf-
ficient support at a central
committee plenum, they were de-
nounced and later purged.
Also promoted to alternate
presidium membership was Kim
Ik-son, the chairman of the con-
trol commission under the cen-
tral committee. Since the con-
trol commission has quasi-police
powers, its chairman is in an ex-
cellent position to support Kim
II-sung in any future purge of
opposition elements.
In addition to these chang-
es, Pyongyang announced on 8
March that alternate presidium
member Pak Ui-wan had been re-
placed as vice premier by Min-
ister of Finance Yi Chu-yon, who
holds the important party post
of chairman of the auditing com-
mission under the central com-
mittee. Since Pak has not been
identified as an alternate mem-
ber of the party presidium for
six weeks, he probably has lost
that position as well. He had
previously been relieved of his
most powerful post--chairman of
of the state construction com-
mission, which had been under
attack for several months for
its inefficiency and backward-
ness.
PRO-COMMUNIST LEFT THREATENS UPSET IN LAOTIAN ELECTIONS
The left-wing opposition
alliance dominated by the Com-
munist-led Neo Lao Hak Zat
(NLHZ) is waging a vigorous
electoral campaign in Laos and
may emerge the victor in the
4 May elections unless the con-
servative parties forge a uni-
fied slate of candidates and
overcome their complacency.
. Campaigning for the first
time since its recognition in
November 1957 as a legal polit-
ical party and successor to the
dissident Pathet Lao, the NLHZ
is masking its revolutionary aims
by posing as a loyal opposition
supporting established Laotian
traditions, the crown, and
Buddhism. Conservative spokes-
men have failed to sharpen the
issues by attacking these NLHZ
pretensions, possibly because
Prime Minister Souvanna Phouma
feels this would be inconsistent
with his rationalization of the
Pathet Lao settlement terms on
the grounds that the Pathets
were not Communists but mis-
guided Laotian nationalists.
The NLHZ has a number of
strong candidates and, together
with its fellow-traveling ally,
the National Union party, a
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---
CURRENT. INTELLIGENCE WEEKLY SUMMARY
27 March 1958
network of political activists
canvassing full-time at the
village level. It is also ex-
ploiting popular revulsion at
corruption in Vientiane, where
the ostentatious living and
conspicious consumption of the
politicians is in marked con-
trast to the villagers' need
for basic improvements, med-
icine, and blankets.
The party is also benefit-
ing from the growing instabil-
ity within the Laotian Govern-
ment as a result of the impasse
in American-Laotian monetary
reform negotiations and the
suspension of American aid
payments. There are indica-
tions that left-wing elements
are organizing anti-American
demonstrations and that these
tensions may be exploited as a
campaign issue. Finally, the
unified slate of 21 leftist
candidates ensures the left
against a split in its elec-
toral support.
conservative parties continue
to wage a competitive campaign
and fail to reduce their pres-
ent 53 candidates to a unified
slate approaching 21, it is quite
possible the left-wing alliance
might win more than half the con-
tested seats in the 59-member
assembly.
GOVERNMENT PARTY SWEEPS CAMBODIAN ELECTIONS
The personal command of
Crown Prince Sihanouk over the
government and people of Cam-
bodia was emphatically demon-
strated in the sweeping victory
of his Sangkum party in the 23
March elections to the 62-seat
National Assembly. The party
won 61 seats, one seat remain-
ing vacant. The major political
and ideological development of
these elections, however, was
the adoption of an all-out anti-
Communist line by the hereto-
fore neutralist Sangkum..
Sihanouk's personal pop-
ularity and active support of
all Sangkum candidates, even
before the election campaign
began, virtually assured suc-
cess to each of the hand-picked
men by overwhelming proportions.
{haen in Kampot, the Cambodian
city considered most strongly
pro-Communist, the Sangkum can-
didate won 88 percent of the
vote cast.
The ideological position
of the Sangkum during the cam-
paign was first stated in early
January when Sihanouk personally
denounced Cambodian Communists.
Although he has continually in-
sisted on Cambodian neutrality
in foreign policy and is increas-
ingly irritated by "unsolicited"
Western advice and "misunder-
standing" of his domestic anti-
Communist stand, he neverthe-
less has sought clearly to iden-
tify the close interrelation
between Cambodia's internal
Communists and international
Communism.
The PracheachQn (Commu-
nist) party, running only five
candidates, three of whom with-
drew on the eve of the election,
attempted to blur the election
issues by its espousal of the
SarfL'kum.. party and by asserting
its 'Loyalty to Prince Sihanouk.
Its spokesmen urged voters to
ignore party labels and to
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.....
SECRET1% of
CURRENT INTELLIGENCE WEEKLY SPRY
choose representatives on the
basis of personal qualities,
alone. To counter the Prachea-
chon party, however, the gov-
ernment labeled it the "party
of destruction and foreign al-
liances," associating it with
the Viet Minh.
Despite the overwhelming
victory of Sihanouk's Sangkum
party and the party's strong
anti-Communist ideology, how-
ever, the danger of Communist
infiltration in Cambodia con-
tinues as the government's
principal political problem.
Among the elected Sangkum can-
didates, selected with Sihanouk's
support, there are now five
with known Communist affilia-
tions and one of these is con-
sidered the actual leader of
Cambodia's Communists
Tension is mounting in
Cuba with the approach of the
early April deadline set by
rebel leader Fidel Castro for
the beginning of the "final
phase" of his fight against
President Batista. Castro has
announced that his forces are
invading all of Oriente Prov-
ince, that they are intensify-
ing action throughout the
country, and that a general
strike will be called when
conditions are ready.
Support for the general
strike plan may be growing:
student and Catholic youth
groups, Castro's National Labor
Front, and even the outlawed
Popular Socialist (Communist)
party have declared their sup-
port, but the leader of the
powerful Confederation of Cuban
Workers has reiterated his op-
position to a politically in-
spired strike. Castro claims
many members of the armed
forces have responded to his
plea to desert and join the
rebel movement, and it is prob-
able that some, especially
among those stationed in Oriente
Province, have actually done
so. However, desertion is not
believed to have become a seri-
ous problem for the government.
cent and by making several
changes in top military com-
mands designed to tighten con-
trol over the country. He has
placed the Havana police force
under the direct supervision of
the army. He has also attempted
to induce defections from Cas-
tro's forces by offering a
general amnesty and intimating
that the revolutionaries, if
they lay down their arms, may
be given an opportunity to par-
ticipate in the general elections,
which have been postponed from
1 June to 3 November. Batista
has further said he would con-
sider favorably any request
formally presented by the op-
position for UN or OAS super-
vision of the elections.
Batista is countering
Castro's moves by increasing
army strength by some 30-per-
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SECRET
CURRENT INTELLIGENCE WEEKLY 8 RY
27 March 1958
Fundamental differences
between Britain and France may
cause negotiations for estab-
lishing a Western European
Free Trade Area (FTA) to link
Britain and ten other OEEC
countries with the six of the
Common Market to break down at
the meeting of the Ministerial
Intergovernmental Committee
on 31 March-1 April.
~p
30 a' 20
10 ~0\ 0 10 20 30
/
1
THE PROPOSED FREE TRADE
AREA
1 o
:qt:=:::
"
(ALL OEEC COUNTRIES)
FEq
.
N'
'
-
~o _
'
. C " .::b??
POPULATION GNP 1955
S J R N a
E
1956
Milli
(Billion
D
9
(
ons)
ollars)
30
EUROPEAN ECONOMIC COMMUNITY
(EUROPEAN COMMON MARKET):
BELGIUM-LUX ........ 9.2
9.75
FRANCE .......:........43.6
52.00`
WEST GERMANY..... 51.6
ITALY .................... 48.2
41.80
21.70
NETHERLANDS ....... 10.9
8.20
Ev
TOTAL ....... 163.5
I33.45
9
3~
COUNTRIES THAT PROBABLY WILL
O
FINLAND
JOIN FTA WITH FULL OBLIGATIONS:
r
W
AUSTRIA ............... 7.0
4.21
R~ ".:..-. ....r:,.
._ LF`
" '
N o
_ Oslo '?}
" ? ''.; Helsinki';
' ,,[~ Siacxnolm?:::'-?.:='i'
E~~'"
?
DENMARK ............... 4.5
NORWAY ..... ....... 3.5
SWEDEN ............ ... 7.3
SWITZERLAND ....... 5.0
UK .....................51.2
TOTAL .....
. 78.5
4.15
3.38
8.74
6.24
57.40"
84.12
s
0~
.~
O
? r
?
`'a
.
'"-
OB
COUNTRIES THAT PROBABLY WILL
RF
-
ub,~
SA?
::
;'
-
.
JOIN FTA WITH SPECIAL CONDITI
GREECE
8
0
ONS:
2
15
Nr .O.
..i_"
...............
.
ICELAND ............... .2
IRELAND ............... 2.9
.
.16
1.52
%
PORTUGAL ............ 8.8
1.78
TURKEY .... _ 24.8
3.92
TOTAL ....... 44.7
9.53
-
N'
GRANDTOTAL ...... 286.7
227.10
IBe,;;n? (
! W--
*1956
ANY( POLA N D
Prague
.
CI
E
CH
O
ti
"
L 0 VA KIA
Vi
,
S
Wl~
enna
" A11g TRIA ?RudaOesf
Rouo': ?
H"NO A R Y
Odessa
40 '
(rsyen>:
~U
RUMANIA
`?:Jg~ O lg.ade
_?
...
40
P~'~ad ra
N
~ nuco rest
YUGOSLAVIA
BULGARIA
S
.-
-. ...C ?K
5 A 4
-- n t
.. GR EEC.E
K
"j' U R E Y
Member nations of the Free Tr e
ine
nd the OEEC
Area
a
a
Member nations of the European
Ed Economic Community (European
F d:.
`Q
'
Common Market)
LEHAV
0
200 400 600 800 Miles
?iriPm, - '
- S
0
200 400 600 800 1000 1200 Kilometers
E `4
;%
.~
'
'
??`
- -?
-
ORGAN
?
.
:
.
?::: .'. '(
'"'"
)
.'..I .::ir.':: ISRA
SAO
NT A
P
24854
27 MARCH 1958
]0
0 y
' :20
R'
`
q
SECRET
PART II NOTES AND COMMENTS Page 15 of 19
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CURRENT INTELLIGENCE WEEKLY SUMMARY
27 March 1958
Other ECC members, while
agreeing that some protection-
ist concessions will be neces-
sary to secure ratification by
the French Assembly, are con-
cerned over the French request
for a delay. Some spokesmen
for West Germany, Italy, and
the Netherlands see in failure
to establish an FTA a danger
of two rival economic groups
arising and hence of a basic
political cleavage in Western
Europe "from which only the
Russians would benefit." Bel-
gium has assumed the role of
mediator between France and
Britain.
With the approach of the
intergovernmental committee
meeting, both France and Brit-
ain have shown some willing-
ness to make at least tactical
concessions to prevent an open
rupture. In mid-March, France's
chief delegate to the OEEC re-
ported that growing awareness
of the French isolation and of
the political division of Europe
that might result from failure
of the negotiations had led
both Premier Gaillard and Maur-
ice Faure, secretary of state
for foreign affairs, to switch
from opposing to supporting the
FTA. France now has agreed to
let its original memorandum
be adjusted to the views of the
other five EEC members.
On the British side, the
Foreign Office now seems ready
for some concession on the ex-
clusion of agricultural imports
from the FTA, a point on which
Britain has rigidly insisted
heretofore.
At next week's meeting,
an ingenious compromise form-
ula submitted during the last
few days by Italy has raised the
possibility that progress may
be made on the highly contro-
versial problem of tariff levels
on imports passing through other
FTA countries into EEC coun-
tries. Britain and France,
however, still remain so
far apart in their basic
views of the proper scope
and function of an FTA that
little substantive progress
is to be expected at this
time.
AUSTRIA PURSUING MORE ACTIVE FOREIGN POLICY
The Austrian Government is
pursuing a more active foreign
policy than has been the case
since passage of its neutrality
law in 1955. Top government of-
ficials have scheduled trips
to Moscow and other world capi-
tals during the year and Chan-
cellor Raab is again demonstrat-
ing an interest in playing the
role of mediator of East-West
problems. For the first time,
the coalition Socialists are
receptive to various "disengage-
ment" proposals which Austria
might support.
The new trend is exemplified
in the preparations for the visit
to Moscow of Chancellor Raab,
Vice Chancellor Pittermann, and
other high officials--recently
rescheduled for July. The
chancell,-r has publicly denied
speculation that he intends to
act as "messenger boy" between
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Achieving the main purpose
of the July visit to Moscow--a
possible reduction in repara-
tions deliveries--has long been
seen by Vienna as related to
larger East-West developments.
Many Austrian officials believe
the agreement on the Austrian
state treaty prepared the way
for the last Geneva conference.
They now feel that Moscow will
ask Austria for no major conces-
sions in return for a repara-.
tions reduction, but will be
content to demonstrate again--
at a time when another summit
meeting is being discussed--
the value of friendly negotia-
tions. In the meantime, Vienna
is unlikely to risk offending
the USSR on such minor issues
as allowing international Com-
munist meetings to convene in
Vienna.
packi plan appears, moreover,
gagement proposals as the Ra-
increasingly under challenge.
The government-"s initial
position that Austria should
take no stand on such disen-
Socialist party's foreign policy
expert, State Secretary Bruno
Kreisky, has declared his inter-
est in the Rapacki plan as "a
starting point" and has added
suggestions for its geograph-
ical extension and for inspec-
tion procedures drawn from
Vienna's postwar occupation ex-
perience.
None of these developments
suggests any real change in
Austria's pro-Western orienta-
tion. Vienna is actively par-
ticipating, for example, in the
free trade area negotiations
and has recently sounded out
Soviet attitudes toward Austrian
accession to the Common Market.
The desire to show initiative
in international affairs, how-
ever, may make Vienna's foreign
policy seem less predictable 25X1
than heretofore and,, on occasion,
may unintentionally lend itself
to Soviet purposes.
Officials in London and
Rome are increasingly concerned
over the possible expansion of
Egyptian influence in Somalia
and the economic problems con-
fronting this Italian trust
territory scheduled for inde-
pendence by 1960. The'?pro-
Western Somali leaders already
face a serious challenge from
pro-Egyptian elements in par-
liamentary elections to be held
within the next few months.
Somalia appears unable to
solve its own serious adminis-
trative and economic problems;
subsidies from Rome=now cover
its annual budgetary deficit of
about $6,000,000. The phasing
out of direct Italian adminis-
tration and planned decreases
in financial aid would provide
an opportunity for increased
Egyptian--and ultimately So-
viet--influence in the terri-
tory.
At a meeting of British
and Italian officials in Rome
on 3-4 March, it was agreed that
the Western nations must take
the initiative to prevent de-
terioration of the Somali sit-
uation. Rome agreed, subject
to parliamentary approval of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
funds, to continue the annual
$2,000,000 banana subsidy and
to shoulder an educational and
technical assistance program
costing about $1,000,000 an-
nually`. This would account
for half the estimated annual
deficit.
London, which has a strong
interest in.Somalia because the
trust territory adjoins Kenya
and the British protectorate
of Somaliland, claims that it
does not have the financial
UAR
(EGYPT)
MILES
24940
Khartoum C ~~ J
? Asmara
CONGO
(BEL.)
UGANDA} KENYA gadisClO
Entebbe Lak!. ' ,.._?..
resources to continue its an-
nual assistance of about $6,-
000,000 to its own protectorate
and give more than technical
assistance to Somalia. Egyp-
tian or Communist domination
of Somalia, however, would
threaten British overflight and
aircraft refueling rights in
the area, lead to the spread
of subversion into the British
protectorate, and threaten Lon-
don's defense and economic in-
terests there.
might develop between Ethiopia
and Somalia over their disputed
The British also fear
Somalia would be used as a cen
ter for subversion against
British .'interests' in East
Africa and that further conflict
boundary.
In Mogadiscio, pro-Western,
Somali leaders fear'that pro-
Egyptian elements will take ad-
vantage of forthcoming elections
to increse their influence.
These leaders had hoped to post-
pone elections until late 1958
because of-the present internal
party conflict over tribal mat-
ters. The Italian administra-
tion, however, intends to dis-
solve parliament in May and to
schedule elections for August,
and reportedly plans to start
a withdrawal of Italian per-
sonnel if the elections go well.
It contemplates that only a
skeleton Italian staff will re-
main in Somalia until-1960 .
25X1
25X1
CONSTITUTIONAL CRISIS THREATENS UGANDA
A constitutional crisis of a British proposal fundamen-
threatens Uganda, an East Afri- tal to orderly political ad-
can protectorate of Britain, vancement in Uganda may lead
because of separatist demands to a delay in London's plan to
by officials of the key province develop the area into a single
of Buganda and growing African - independent state -in a few years.
agitation for faster political
evolution. Rejection by the A British play, for direct
Buganda legislature on 19 March election of 18 of the 33 African
SECRET
1 M (FR )q n
Ojib BRITISH
(Addis Ababa SOMALILAND'
1.`ETH,I.OPIA
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SECRET
members in the Uganda legisla-
ture of 62 members was rejected
by the Buganda provincial leg-
islature on 19 March. The Na-
tionalists oppose non-African
representation in the Uganda
legislature because non-Afri-
cans number only one percent of
the population. They demand
that all members be directly
elected.
In Buganda, where one
third of Uganda's 5,000,000
persons live and the vast ma-
jority of its economic develop-
ment is located, the
situation is especial-
ly complicated by the
personal ambitions of
the powerful native
king. He achieved
considerable national-
ist support when he
was exiled by Britain
in 1953 because of
his opposition to
British policies.
London agreed
to his return in
1955 after an agree-
ment was reached
specifying Buganda's
cooperation in Ugan-
da's political evo-
lution and the king's new role
as a constitutional monarch.
Recently, the king, fearing
that popular participation in
the government--such as direct
elections to the legislature--
would destroy much of his own
power, has become increasingly
uncooperative toward Britain
and the Uganda administration.
By cooperating with the nation-
alists at this time, the king
apparently hopes to thwart Brit-
ish plans for Uganda.
Working through his local
chiefs, the king has helped to
develop widespread opposition
in Buganda to British policies
by instigating protests, council
resolutions, and finally the re-
jection of the proposal by the
Buganda legislature. One of
Buganda's five representatives
in the Uganda legislature re-
signed in January, and the Bu-
ganda Electoral College refused
to name a successor.
These Buganda actions con-
front London with a serious po-
tion, the result would probably
spur Buganda separatism and en-
danger London's policy of de- 25X1
veloping Uganda as a sin le in-
dependent African state.
litical situation. Britain can-
not resolve the problem by forc-
ing the resignation of the
Buganda Council of Ministers.
On the other hand, should Brit-
ain ignore Buganda and consti-
tute the Uganda legislature
without provincial representa-
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CONFIDENTIAL"
CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET ATOMIC ENERGY ASSISTANCE PROGRAMS ABROAD
The USSR is trying to es-
tablish itself as the world
leader in peaceful uses of
atomic energy through an exten-
sive program of atomic aid to
Sino-Soviet bloc countries am-
offers of assistance to free
world countries, as well as
through domestic development.
The satellite nation _$.i -' =
ceiving material and technical
aid in exchange for raw materi-
als, Most Soviet offers of
assistance elsewhere have not
been accepted. The only signif-
icant aid to date outside the
bloc has gone to Yugoslavia and
Egypt, where research reactors
and associated equipment are
being installed. These Soviet
offers have usually been made
on a bilateral basis, although
the USSR is showing increasing
interest in working through in-
ternational agencies.
In January 1955, the USSR,
in its first significant move
toward atomic aid for the satel-
lites, offered information, ma-
terials, and equipment to sev-
eral bloc countries to aid them
in developing atomic energy for
peaceful purposes. At a meet-
ing in Moscow the following
April, delegates from Communist
China, Poland, Czechoslovakia,
Rumania, and East Germany nego-
tiated formal atomic aid agree-
ments with the Soviet Union,
Similar agreements with Hungary
and Bulgaria were negotiated a.
month later. One condition of
the agreements is that the aid
recipients supply the USSR with
uranium ores.
This aid program is slowly
being carried out, Rumania,
Czechoslovakia, and East Germany
now have in operation 2,000-
kilowatt research reactors re-
ceived from the Soviet Union,
and reactors will soon be oper-
ating in Poland, Hungary, and
Bulgaria. Installation of
China's reactor--a seven-mega-
watt, heavy-water type, consid-
erably larger than the model
supplied the European satellites
--was scheduled for completion
by the end of 1957; Peiping an-
nounced on 7 March 1958 that
the reactor and a 25-million-
volt cyclotron are "basically
complete."
Moscow has expanded the
aid program in some satellites
from the research-reactor phase
to promises to aid in the con-
struction of nuclear power reac-
tors. Hungary and Rumania have
announced that the USSR will
give such aid during 1960-61.
Soviet and East German officials
met in Moscow in July 1956 and
shortly thereafter announced an
agreement according to which
the USSR would set up in East
Germany an atomic power station
of 100,000-kilowatt capacity;
construction of this installa-
tion is now under way. Radio-
isotopes have been sent to all
bloc countries.
A bloc-wide research or-
ganization called the Joint Nu-
clear Research Institute, estab-
lished in Moscow in mid-1956,
is attended by a large number
of scientists from all bloc
countries. The USSR claims
that during 1957, it trained
500 foreign specialists, most
of whom presumably came from
the bloc. The USSR provides
nearly half the funds to sup-
port the institute, and the rest
is supplied by the satellites.
Some satellite scientists, how-
ever, have said they would rath-
er have the money available at
home for research of their own
cb --)os ing .
The Soviet Union in 1956
began extending offers of atomic
CO~Ir1DCNTIAL
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CURRENT INTELLIGENCE WEEKLY.SUMMARY
SOVIET DISPLAYS AT SWEDISH FAIR, MAY 1956
aid to nations outside the bloc.
In some cases, these have been
little more than offhand prom-
ises made, apparently for prop-
aganda purposes, by traveling
Soviet dignitaries. Moscow has,
however, offered to supply Yugo-
slavia and Egypt with research
reactors, laboratory equipment,
and technical training.
The agreement between Yugo-
slavia and the Soviet Union,
signed in Belgrade on 28 Jan-
uary 1956, provides for general
cooperation and exchange of ex-
perience in the field of atomic
energy and for construction in
Yugoslavia of a nuclear reactor
with a thermal capacity of 6,500
to 10,000 kilowatts. The USSR
is to give scientific and tech-
nical aid in planning and con-
structing the reactor, which
reportedly should be completed
this fall, and will provide
necessary equipment and nuclear
fuel at prevailing world market
prices.
The agreement with Egypt
was concluded in February 1956
in the face of direct competi-
tion with American firms. Mos-
cow promised to assist in estab-
lishing and equipping a nuclear
physics laboratory in Cairo and
in carrying out work in peace-
ful uses of atomic energy, An
atomic research center near
Cairo will be provided with a
2,000-kilowatt research reac-
SECRET
tor, a 3,000,000-electron-volt
cyclotron, and other apparatus.
Egyptian scientists and spe-
cialists are attempting nuclear
research establishments in the
Soviet Union.
Soviet proposals of aid
elsewhere in the free world have
generally been tailored to the
capabilities of the intended
recipient. In some instances,
the offers appear designed to
ensure the continuing presence
of Soviet technicians in the
countries involved. However,
the bulk of the offers consists
of furnishing scholarships and/
or radioisotopes to underdevel-
oped nations. As the capabili-
ties of these countries increase,
the USSR may offer to construct
nuclear power stations.
To date, few Soviet offers
have been accepted by free world
countries, largely because of a
preference for American or pos-
sibly future UN programs. In
some countries, such as Burma
and Indonesia, students selected
over a, year ago to go to the
Soviet Union are still awaiting
final arrangements. In other
countries, such as Iran, Thai-
land, Greece, and Mexico, offers
of scholarships in the USSR,
most of them made in mid-1956,
either have been rejected or
have not been acted on for fear
that acceptance would rule out
any chance to obtain similar
bids from the United States,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The Soviet Union has not
yet given any specific atomic
aid to India, although an atomic
reactor, auxiliary nuclear
equipment, and necessary tech-
nical assistance for installa-
tion were offered during the
Moscow Conference on Peaceful
Uses of Atomic Energy in July
1955. Nehru, at the opening
of an Indian-built reactor at
Bombay in January 1957, stated
that the Soviet offers would be
followed up. On 27 February
1958 he said India is "studying"
a Soviet proposal to train stu-
dents from friendly, underde-
veloped countries in the peace-
ful uses of atomic energy.
Soviet offers in the free
world have not been limited to
scientifically backward coun-
tries. In early 1956, the USSR
offered Norway ten kilograms of
2-percent-enriched uranium and
50 to 100 kilograms of zirconium
and urged an expansion of sci-
entific exchanges in the nu-
clear field, including Norwegian
participation in the work of
the Joint Nuclear Research In-
stitute. Since then, Moscow
has offered more highly enriched
uranium in amounts greater than
ten kilograms; the Norwegians
would be allowed to keep the
plutonium derived from use of
the uranium fuel. It is not
known if the Norwegians have
accepted this offer. A reactor
was offered to Austria as a gift
with the provision that Soviet
operators remain indefinitely
with the installation; this of-
fer was refused. Japan, too,
has been offered research reac-
tors, fuel, and technical aid
if formal agreements regarding
technical interchange can be
concluded.
The USSR has, on several
occasions, displayed an exhibit
on peaceful uses of atomic en-
ergy in free world countries,
mainly in South and Southeast
Asia, where its propaganda im-
pact would be greatest. A per-
manent Soviet exhibit is to be
set up this year in Djakarta.
International Organizations
The most notable Soviet nu-
clear cooperation efforts through
international agencies have ap-
peared in the International
Atomic Energy Agency (IAEA), an
outgrowth of President Eisen-
hower's Atoms for Peace Plan
inaugurated last August. The
USSR, the first to ratify the
IAEA statute, has pressed hard
for appointment of Soviet na-
tionals to top positions in the
agency, and has succeeded in
having one appointed deputy di-
rector for training and informa-
tion. A Polish national has
been given a temporary appoint-
ment as director for personnel.
Moscow has suggested that the
post of director general, now
held by former Representative
W. Sterling Cole of New York,
be rotated among the leading
powers. The USSR was unsuccess-
ful in efforts to have invita-
tions extended to the Moscow
and East German Institutes of
Nuclear Physics to attend the
1957 general conference of IAEA
as observers,
In addition to offering
uranium to the agency, the USSR
has offered scholarships for
students--including 50 from un-
der:ieve loped areas--and the So-
viet Union has advanced train-
ing for specialists in isotopes
and other nuclear fields. At
a meeting on 10 March 1958 of
the IAEA Executive Board, the
USSR recommended prompt estab-
lishment of assistance programs
for underdeveloped nations, par-
ticularly in isotopes, training,
and exchange.
The USSR has also partici-
pated actively in the atomic
energy programs of UN special-
ized agencies and has urged the
formation of nuclear energy
working groups under UN auspices,
In October 1957 the Soviet dele-
gate to UNESCO submitted a re-
quest from the Soviet Youth
Organization for UNESCO cooper-
ation on a project for peaceful
uses of atomic energy. Two
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CURRENT INTELLIGENCE WEEKLY SUMMARY
months later the Soviet dele-
gate unsuccessfully proposed
enlargement of that organiza-
tions' atomic energy work. The
USSR through UNESCO has offered
Syria five scholarships for
study of nuclear physics in the
Soviet Union which have not yet
been accepted.
In May 1957, the USSR pro-
posed the formation of an Atomic
Energy Committee under the UN
Economic Commission for Europe
(ECE) to further the exchange
of scientific and technical
experience and joint develop-
ment of nuclear energy for
peaceful purposes. A decision
was postponed until the 1958
session. An earlier Soviet
proposal had called for the
establishment of a European
regional committee within the
ECE to study the economic as-
pects of peaceful uses, with
scientific information exchange
between the Joint Nuclear Re-
search Institute in Moscow and
the European Center for Nuclear
Research located in Switzerland.
At the February 1958 con-
ference in Malaya of the Eco-
nomic Commission for Asia and
the Far East (ECAFE), Soviet
delegates offered nuclear aid
for that area and proposed crea-
tion of a. standing committee to
deal with peaceful uses of
atomic energy.
In April 1957 the USSR re-
turned to the World Health Or-
ganization (WHO) after an eight-
year absence and now is seeking
an active role in the agency,
including election to the Ex-
ecutive Board, WHO is interest-
ed in negotiating an agreement
with the International Atomic
Energy Agency for joint re-
search on the health aspects
of radiation,
25X1
25X1
(Prepared by OSI)
RECENT UNITED-FRONT TACTICS OF LATIN AMERICAN COMMUNIST PARTIES
Latin American Communist
parties have displayed consid-
erable flexibility in applying
their traditional united-front
tactics to the large number of
elections held since 1956, and
they apparently are planning
to exploit this device in this
year's elections, particularly
in Chile and Brazil. As em-
ployed by Communists in Latin
America, the united-front de-
vice is often simply an elec-
tion arrangement with one or
more political groups. Targets
for such Communist overtures
include not only Socialist par-
ties, as in Ecuador and Uruguay,
but a variety of parties that
are either left of center or
nationalistic, as in Argentina,
Brazil, Peru, Chile, and Gua-
temala. In some instances,
non-Communist groups may have
initiated the bargaining for
Communist support.
The illegal status of most
Communist parties in the hemi-
sphere has not been a serious
handicap to such political
deals, although the Communist
parties are usually not accept-
ed as public partners in polit-
ical groupings. There are a
number of recent instances--in
Brazil, Ecuador, Argentina,
Costa Rica., and Peru--in which
non-Communist parties have tac-
itly accepted Communist elec-
toral sup:,rt, but the nature
of the quid pro quo, if any,
has not been identified.
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,.Il...r SECRET ~...,.,
CURRENT INTELLIGENCE WEEKLY SUMMARY
27 March 1958
Communist objectives in
seeking election agreements,
covert or overt, vary consider-
ably according to the immediate
situation, but generally in-
clude the following: to win
greater prestige and respecta-
bility for the party; to pro-
mote a legal status for the
party, if outlawed, or to fore-
stall possible government ac-
tion against the party, if
legal; to infiltrate non-Commu-
nist parties and the government;
to gain an opportunity to run
some Communist candidates on
the slate of a legal party; and
to further Soviet political
and economic objectives in the
hemisphere through association
with influential and victorious
political groups.
Recent Latin American Com-
munist activity probably reflects
LATIN AMERICAN COMMUNIST PARTIES
Legal Status and Estimated Strengths
M 4,500
S 80,000
CUBA 4e ':
M 8,000-12,000
c 75 nnn"_3n nnn C1~L
GUATEMALA
M 300
BR. HONDURAS
HONDURAS
M 500
55 0
NICARAGUA
r' M 200
\__ S 1,000
PANAMA
M 100
DOMINICAN REPUBLIC
M None
HAITI
M Less than 100
Illegal status
Estimated membership
Estimated sympathizers
In Bolivia, the party participated in
the 1958 elections.
In Mexico, the party does not meet
minimum legal membership requirements
to enter candidates in national elec -
tions.
27 MARCH 1958
24936
BOLIVIA
M 4,400 Z?
~? S 4,500 )
v VENEZUELA
M 9,000
Cn1 OMB1A 1 S 18,000
BRAZIL
M 60,000
S 100,000-200,000
M 5,000 S GUIANA
S 10,000-20,~0
r
PERU(
6,000 ~../( l??~
40,000
1i M 500
1,000
SURINAM
T.
CHILE
M 20,000 ? ARGENTINA
S 504000 r M 80,000-90,000
S 140,000
SECRET
f
URUGUAY
M 2,800-3,000
S 15,000
PART III PATTERNS AND `;?ERSPECTIVE S Page 5 of 11
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CURRENT INTELLIGENCE WEEKLY SUMMARY
27 March 1958
the increasing importance
which the USSR has placed on
the united-front tactic, as a
parallel policy to peaceful co-
existence, since the Soviet 20th
party congress in early 1956.
Stress on this policy has been
evidenced in Khrushchev's
speeches and also by the WFTU
program of united action of all
unions announced at its Octo-
ber meeting in Leipzig, which
was attended by a sizable
Latin American representation.
An effort is under way to
improve coordination among
Latin American Communist par-
ties; it was probably inspired
by the sessions of their repre-
sentatives in Moscow last fall
at the time of the 40th anni-
versary celebration of the Oc-
tober revolution. A discussion
of political and labor ex-
periences, including applica-
tion of the united-front tactic,
may be a principal item on
the agendas of the scheduled
congresses of Middle American
party leaders at Mexico City
this month and of all Latin
American parties at Buenos
Aires this summer.
The major Communist success
with the united front in Latin
America in recent years has
been in Venezuela, with Colombia
and Chile at present offering
favorable prospects. In cer-
tain other countries, however,
Communist efforts for electoral
agreements have produced limited
or transitory results, In
Guatemala, for example, Commu-
nist efforts to infiltrate the
leftist Revolutionary party
(PR), which won over 25 percent
of the vote in the January
presidential elections, have
apparently been checked by an
increasing awareness among PR
leaders of the dangers of a
Communist alliance.
On the other hand, in ap-
plying the united front to or-
ganized labor, the Communists
have chalked up considerable
gains in Chile and most notably
in Uruguay, where they control
the larger of the two principal
labor confederations and have
penetrated or influenced some
elements in almost all impor-
tant sectors of labor. They
have also had some success with
labor "unity" in other countries
such as Venezuela, Brazil, Ar-
gentina, Guatemala, and Nicara-
gua.
Venezuela is the only Latin
American country in which the
Communist party (PCV) is par-
ticipating in a political coali-
tion of all parties. The Pa-
triotic Front, organized clan-
destinely in the summer of 1957
with Communist support and the
participation of the three
other major parties, played an
important role in the overthrow
of dictator Perez Jimenez in
late January. The front now ap-
pears to be the principal in-
strumentality through which the
interim governing junta will
coordinate its policies with
civilian elements during the
scheduled 18-month transitional
period before the restoration
of constitutional government.
By virtue of its member-
ship in the front, the PCV has
already gained considerably in
prestige and may obtain legal
status, which is seemingly
favored by leaders of the other
three parties in the front,
Even now, however, Communist
leaders who have returned from
exile or have been released
from prison are operating with-
out legal restrictions.
The front's program of
political unity, which offers
the Communists a wedge for
penetration of local and central
governments, is endorsed by all
four parties and in the forth-
coming elections may lead to an
allotment of seats to each party
in the Congress, state leg-
islatures, and municipal coun-
cils. If such an arrangement
is agreed on, the PCV may be
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CURRENT INTELLIGENCE WEEKLY SUMMARY
expected to receive,a share of
the seats, although probably
the smallest among the four
parties. Moreover, a program
for a unified labor movement,
also endorsed by all parties,
appears to guarantee the Com-
munists an overt association
with non-Communist labor unions
and organizers.
The Colombian Communist
party (PCC) is working on re-
organization and rejuvenation
in light of the legal status it
has acquired through the blanket
nullification of decrees pro-
mulgated by the former dictator-
ship. The PCC is believed to
be the principal organizing
force behind the People's Lib-
eral Front (FLP)--a coalition
of Communists and their sym-
pathizers,. leftist Liberals,
intellectuals, and guerrilla
elements.
This is the first Commu-
nist attempt to apply the front
tactic in Colombia since an
abortive effort in 1951-52 and
is probably one of the principal
devices through which the PCC
will attempt to participate in
the government over the next
12 years, under the constitu-
tional provision which estab-
lished parity between the Lib-
eral and Conservative parties
during that period to the ex-
clusion of all other parties.
Chile
The Chilean Communist par-
ty (PCCh), one of the best or-
ganized parties in Latin Ameri-
ca although technically illegal,
is actively campaigning for the
left-wing Socialist presi-
dential candidate, Salvador
Allende, in the September elec-
tions. Victory for Allende,
whose chances are almost as
good as those of any other can-
didate in the race, would prob-
ably mean that the PCCh would
be legalized and its members
permitted to vote openly and
to participate in the government,
as they did in 1946 when the par-
ty backed the victorious presi-
dential candidate.
The PCCh's campaign activity
is to a large extent carried out
through the Popular Action Front,
a Communist-promoted and -con-
trolled coalition of leftist
parties, and through the Com-
munist-dominated Single Labor
Central of Chile, Chile's only
important labor confederation,
The PCCh has been extremely suc-
cessful in the promotion of front
movements since 1938, when it
played a key role in the forma-
tion of the Popular Front, which
elected three successive Radical
presidents.
Argentina
The legal Argentine Commu-
nist party (PCA) has generally
been unsuccessful in its re-
peated efforts to promote united
fronts under various names
since the early 1950's. After
all major parties rejected whole-
sale Communist overtures for
a "national democratic front"
in the presidential elections
of 23 February, the PCA announced
its support of Arturo Frondizi,
victorious candidate of the In-
transigent Radical party (UCRI).
Frondizi tacitly accepted the
Communist backing, but there
has been no substantiation of
accusations that he made a cov-
ert agreement with the PCA.
As a result of its public
activities on behalf of the
UCRI, the PCA has probably gained
a measure of prestige. The par-
ty hopes it can thereby counter-
act pressure to disqualify it
as a legal electoral group and
capitalize on Frondizi's nation-
alistic economic views to in-
crease trade with the Soviet
bloc and impede any rapproche-
ment with the United States. On
the other hand, the PCA seems
to lack the necessary bargaining
power to effect an alliance with
any major political party, in
spite of its reported sharp
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CURRENT INTELLIGENCE -WEEKLY` SUMMARY
increase in membership since
early 1957.
The illegal Brazilian Com-
munist party (PCB) has tradi-
tionally advocated a united
front and officially recon-
firmed this policy at its last
national congress in 1954. Dur-
ing the past year the Communists
have increasingly stressed this
view, although a top party of-
ficial defected allegedly be-
cause the party leadership had
failed to emphasize this tactic
adequately.
Having had little past suc-
cess--and with little prospect
for success in the future--in
establishing open alliances with
other political factions, the
PCB frequently makes covert
gaining considerable prestige
for a brief period after his
inauguration. The PCB is now
working actively in Sao Paulo
to promote a united front for
the October congressional and
gubernatorial elections, and
the party will probably make
similar efforts in other parts
of the country.
COMMUNIST STRENGTH GROWING IN INDIAN LABOR MOVEMENT
The influence of Communist-
controlled labor unions in In-
dia has been growing, while that
of unions controlled by the Con-
gress party has declined. In-
creasing unemployment and ris-
ing prices have contributed to
this development, but the gov-
ernment's ill-conceived labor
policies have been the major
factor. Unless these policies
are revised in the near future,
the Communists may become the
dominant influence in the labor
movement, particularly among
government employees and among
workers in the key heavy indus-
tries being established under
India's industrialization pro-
gram.
Indian labor unions, or-
ganized and controlled by po-
litical parties, have tended to
place party objectives ahead of
workers' welfare. The first
national trade union federation,
the All-India Trade Union Con-
gress (AITUC), was organized
soon after World War I chiefly
to enlist the support of the
working class in the struggle
for independence. Although
AITUC was not officially affil-
iated with any political party,
it was controlled largely by
Congress party leaders until
World War II, when the Commu-
nists gained control following
the: jailing of the Congress
leaders who refused to support
Britain's war effort.
The Congress party leaders
decided when India became inde-
pendent in 1947 that the Com-
munists were too well entrenched
in AITUC to be removed quickly,
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election arrangements at the
local level in an effort to
gain support for legal status,
respectability, and occasional-
ly the right to run some Com-
munists on the ballots of legal
parties. In 1957, for example,
the party collaborated with the
governor of the state of Sao
Paulo and supported the latter's
unsuccessful candidate in the
mayoralty race in the capital.
In 1955 the Communists backed
President Kubitschek's candidacy,
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CURRENT INTELLIGENCE WEEKLY ;SUMMARY
27 March 1958
so they established the Indian
National Trade Union Congress
(INTUC) with the few remaining
Congress-controlled unions in
AITUC. The socialist-controlled
unions also left AITUC and
formed the Hind Mazdoor Sabha
(HMS). These moves were fol-
lowed in 1949 by the establish-
ment of the United Trade Union
Congress (UTUC) by a group of
Trotskyite and other extreme
leftist parties.
Within a few years INTUC
was able to displace AITUC as
the largest labor federation,
partly because of the financial
aid supplied by the Congress
party and the favoritism shown
it by the government, but even
more because of the policy of
violence adopted by the Commu-
nist party soon after independ-
ence, in line with the general
Communist policy in Asia at
that time. Most of the Commu-
nist leaders were jailed and
the workers realized that the
Communists placed the welfare
of the party above that of the
workers. Despite the fact that
the Communists ended their ter-
rorist tactics by 1951 and their
leaders were released from jail,
they had so damaged themselves
that they could make little head-
way for several years.
The government occasional-
ly investigates the union's ex-
aggerated claims of membership
and issues official figures
which are somewhat more accurate.
The government's last release
showed the following as of 31
March 1955:
INTUC -- 931,968
AITUC -- 306,963
HMS --- 211,315
UTUC' --- 195, 242
Total--i,645,488
There are about a million
workers in such fields as rail-
ways, government, banks, and
posts and telegraphs whose un-
ions are not formally affiliated
with any of the major federa-
tions.
While all federations have
affiliated unions in various
industries, their relative
strengths vary from industry
to industry. INTUC's strength
is concentrated in cotton tex-
tiles, leather tanning, plan-
tations, and steel '.in the
states of Bihar, Bombay,, Uttar
Pradesh, and Assam. HMS's
strength--chiefly among trans-
port, government, chemical, and
oil workers--is concentrated in
Madras and eastern India. AITUC
has its greatest strength in
South India and West Bengal--
but is not the dominant union
in any one industry. UTUC draws
a large part of its strength
from port workers in West Bengal
and Kerala.
Since the last official
figures on membership were re-
leased, the Congress-controlled
unions have been losing ground
to the Communists. Food prices
have been rising since late
1955, wages have increased lit-
tle, and unemployment has grown.
Even if the Second Five-Year
Plan (1956-61) is successfully
carried out, it will provide
work for only 8,000,000 of the
10, 000, 000 people who will enter
the labor force during the plan
period.
INTUC Weaknesses
INTUC's major difficulty
stems from the nature of trade
unionism in India, the relation-
ship between the INTUC and the
Congress party, and the govern-
ment's labor policies. Many of
the workers have only recently
left their villages and have
yet to adjust to urban life,
much less to the idea of trade
unionism. The workers have lit-
tle bargaining power vis-a-vis
their employers because of the
large'number of "unemployed.
They also are generally too un-
educated to run their own unions.
and too low on the caste scale
to deal directly with employers,
so the leaders must come from
outside.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Thus most labor leaders
are intellectuals from the po-
litical parties. Their ties
with the workers are weak and
they give only part of their
time to unionism. The unions
are often too poor to employ
enough organizers and staff to
serve the workers adequately,
although the Communists appar-
ently are making rapid strides
in this respect and some of the
other unions are raising dues
and enlarging their staffs.
INTUC's close tie with the Con-
gress party has become a liabil-
ity as the Congress has declined
in popularity and the Communist
unions have been stressing eco-
nomic rather than political is-
sues.
In addition, INTUC has
suffered because of the govern-
ment's harsh labor policies. In
order to reduce the loss of out-
put through strikes, arbitration
has been made compulsory and
labor courts have been set up.
The arbitration procedures and
labor courts are extremely slow,
however, and disputes often take
several years before a final
decision is rendered.
The government's labor pol-
icy toward its own employees
has been highly paternalistic
and authoritarian. Needing all
the resources it can acquire to
carry out the Second Five-Year
Plan, it has been unwilling un-
til faced with threatened'
strikes even to consider grant-
ing any significant wage raises
as the cost of living has risen.
The government usually appoints
a commission which takes at
least a year to examine the
workers' claims, and then it
often refuses to carry out the
recommendations of the commis-
sion.
Such tactics have resulted
in a continual decline in INTUC's
strength among government em-
ployee unions, for TNTUC has
been obliged to support such
policies despite their unpopu-
larity with the workers. De-
spite declining INTUC influence,
the government has continued to
favor INTUC unions, even to the
point of dealing with INTUC un-
ions when they represent fewer
workers than other unions, thus
increasing worker resentment.
Growing Communist Threat
As a result of such poli-
cies, INTUC has been losing
ground to AITUC except in South
India, where, under energetic
and somewhat independent lead-
ership, INTUC has made noticea-
ble progress during the past
year. While AITUC is still far
below INTUC in total strength,
the combination of growing Com-
munist strength and declining
INTUC influence has given new
impetus to the Communists' al-
ready intense efforts to become
the dominant labor organization
in India.
The greatest Communist
threats appear to be among gov-
ernment workers and in the
state-owned heavy industrial
complex that is developing in
eastern India. Government em-
ployees, particularly in the
railway and post and telegraph
unions, are reportedly bitter
toward the government for push-
ing through Parliament in 1957
a bill outlawing strikes which
forced them to cancel a strike
threat and accept a government
offer to appoint a commission
to look into their demands.
This commission has done vir-
tually nothing to date.
An equally serious threat
appears to be developing in the
emerging state-owned heavy in-
dustries. So far the govern-
ment seems to have given little
thought to the labor policies
it will adopt when the new steel
and heavy machinery factories
begin operations. If it attempts
to deal only with INTUC unions,
it probably will face widespread
worker resentment which the Com-
munists would be ready to ex-
ploit. If it outlaws trade un-
ions in these plants--as it
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already has at one large loco-
motive factory ip West Bengal--
it probably will prevent the
development of sound manage-
ment-employee relations and
increase Communist political'
influence among the workers.
Some members of the Indian
Government are becoming aware
that the government's labor
policies are contributing to
the rise of AITUC and the de-
cline of INTUC. In addition,
some of the younger INTUC lead-
ers want. the organization to
become more independent of the
Congzess party and to merge
with HMS so they can meet the
growing Communist threat. The
government and labor officials
who hold these views are still
in the minority, however, and
they have been unable to win,
high-level support. While Prime
Minister Nehru is reportedly
worried about the decline of
INTUCIs influence, he still is
concerned primarily with push-
ing the Second Five-Year Plan
to completion and is unlikely
to adopt more liberal labor
policies or allow INTUC greater
freedom. Therefore, a contin-
ued growth of Communist strength
in the labor movement appears
likely.
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