CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A004600270001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: September 24, 2002
• Sequence Number: 1
• Publication Date: July 31, 1959
• Content Type: REPORT

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31 July 1959
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CENTRAL INTELLIGENCE BULLETIN
31 July 1959
DAILY BRIEF
Ia THE COMMUNIST BLOC
USSR-Geneva: Khrushchev9s renewed call for a summit
meeting in his speech on 28 July, taken with the absence of
any important modifications in Gromyko9s positions at Geneva,
suggests that Moscow may agree to terminate the Geneva talks
and then press for an early summit meeting. Gromyko may,
however, make some last-minute adjustments on such prob-
lems as the link between an interim Berlin arrangement. and
all-German negotiations. If these do not produce agreement,
he may propose that the foreign ministers prepare a docu-
ment setting forth their differences and agree on a date for a
summit conference.
25
(0 ' prises except in metropolitan areas. The law is directed
1 January 1960 will prohibit alien ownership of retail enter-
Communist China - Indonesia: (piping has asked for
reconsideration of the recent Indonesian decree which after
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since enforcement could have severe repercussions on the
[Primarily at the Overseas Chinese. Peiping is reported to
be "very disturbed" and says that if the law becomes effec-
tive, full compensation for those affected will be essential
to continued good relations and. further economic aid for Indo-
nesia. Djakarta may proceed cautiously with implementation
Indonesian economy.
II. ASIA-AFRICA
Laos: Additional pressure for reactivation of the Inter-
national Control Commission in Laos is being placed on the
UK by its Geneva cochairman, the USSR. Although Britain
has thus far opposed such a step, the current fighting and the
hreat of expanded hostilities involving North Vietnam may
orce it to reassess its position. Meanwhile the Laotian
Government's military position in Sam Neua Province con-
inues precarious despite the arrival of some reinforcements.
Skirmishes in central Laos have also been reported.
I
a e$ uncon irme report states a an enemy bands al-
eg edit' North Vietnamese elements, overran a government
utpost in the far- northern Province of Phong Saly on 29-30
ul .
31 July 59 DAILY BRIEF ii
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Cyprus. The 29 July announcement in Athens by former
EO ea er Grivas that he "dissociated" himself from the
February agreements settling the Cyprus dispute has brought
his rift with Archbishop Makarios into the open. Makarios ap-
pears convinced he can defeat Grivas in a contest for political
supremacy at this time. The outcome of the struggle between
the two will depend largely on the attitude of former lieutenants
of Grivas in the EOKA movement, several of whom are cur-
rently working with Makarios in the transitional Cypriot cab-
inet.
*Meanwhile, the denunciation of Grivas and strong support
for Makarios contained in Premier Karamanlis' 30 July state-
ment will probably cause the ex-EOKA leader to.hasten his for-
mal entrance on the Greek political scene. Opposition politicians
in Athens have long hoped to capitalize on Grivas' popularity to
bring down the government,
Japan-Korea. South Korea officially proposed to Japan on
30 Jury the "unconditional" reopening of talks for the normal-
ization of relations, which would include the question of repa-
triating Koreans to. South Korea, Seoul's reported position that
the talks would not touch on Tokyo's policy of repatriating some
31 July 59
DAILY BRIEF iii
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Koreans to North Korea, if adhered to, would be a significant
reversal of the Rhee government's attitude. Norean officials
have previously indicated their hope that a resumption of talks
with Tokyo would delay any repatriation to North Korea,, and
might even result in North Korea's abrogation of the agreement
with JaP2,9
C&Pan has informed the US of its agreement in princ,
to resume negotiations on the basis of Seoul's propos~alj
I I
I I I. THE WEST
iple
Italy: The re-election of former Christian Democrat Silvio
Mila-zzo as chief of the Sicilian regional government- -mainly
with Communist and Nenni Socialist votes- -threatens a period
of instability in Sicily that will have repercussions at the national
level. The Rome government's policy of collaboration with the
right-wing parties received a setback in Sicily and has been the
object of increasing criticism within the Christian Democratic
ranks. I
IV. SIGNIFICANT INTELLIGENCE
REPORTS AND ESTIMATES
(Available during the preceding week)
Communist China. NIE 13-59. 28 July 59.
31 July 59
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I. THE COMMUNIST BLOC
Khrushchev Renews Call for Summit Meeting
Khrushchev's statement in his speech at Dnepropetrovsk
on 28 July that the "time has come" for the heads of govern-
ment. to tackle "complex unsettled international issues" sug-
gests that he is less hopeful about drawing further conces-
sions from the Western foreign ministers on the key issue
of all-German negotiations. The tenor of his speech and the
absence of any important modifications in the Soviet positions
on an interim Berlin arrangement and all-German talks in the
paper Gromykb handed the Western ministers the same day may
indicate the USSR will now press for an early summit meeting.
Khrushchev made a perfunctory appeal to the ministers to
"exert fresh efforts" to reach agreement "on what they can agree
upon," but contended that the "other, more difficult matters, mat-
ters of principle, will be considered by the heads of government."
He rejected the "pessimistic estimates" of prospects at Geneva
made by "some Western leaders" and claimed that the foreign
ministers have already accomplished some "positive work,"
The Soviet premier, however, continued to insist on linking
an all-German committee to an interim Berlin settlement, saying
the USSR "attaches great importance to the solution of these ques-
tions."
In anticipation of an early conclusion of the foreign ministers'
talks, Gromyko may make some last-minute adjustments on such
Soviet positions as the link between a Berlin arrangement and all-
German talks, the 18-month time limit on a Berlin agreement,
and the 3,000- to 4,000-man ceiling for "token" Western forces
in West Berlin. If these moves do not produce agreement, he may
propose that the ministers prepare a document setting forth their
differences and agree on a date for a summit conference,
31 July 59 CENTRAL INTELLIGENCE BULLETIN
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.Peiping Expresses Concern Over Indonesian Restrictions on
Overseas Chinese
L_; ommun s China is very
disturbed" over the recent Indonesian decree prohibiting alien-
owned retail enterprises outside metropolitan areas after the
end of the year. The ban was directed at Overseas Chinese,
who control most of the retail trade in Indonesian villages.]
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Djakarta may proceed cautiously in implementing the
decree, since its enforcement could have severe repercus-
sions on the Indonesian economy. Chinese merchants may
be able to evade the decree by hiring Indonesians as nominal
heads of their businesses,
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II. ASIA-AFRICA
Laos
Lhe Soviet charge in London, in a 28 July approach to
the Foreign Office, repeated the USSR's arguments for the
reconvening of the International Control Commission (ICC)
in Laos, alleging that Laos, together with the United States,
was violating the Geneva agreements in such a way as to be-
come a military threat to its neighbors, Although the For-
eign Office reiterated its opposition to the return of the ICC,.
it may be forced to reconsider its position by the threat of
expanded hostilities in Laos with North Vietnamese participa-
tion. Hanoi has categorically denied Laotian accusations that
it has instigated the current fighting-)
.Indian Prime Minister Nehru will probably interpret cur-
rent developments in Laos as confirmation of his long-standing
fear that the Laotian Government's increasingly open identifica-
tion with the West risks provoking Communist military reaction,
upsetting the status quo established by the Geneva armistice
in 1954. India can be expected therefore to bring additional pres-
sure on Britain for reconvening of the ICC, at least on a tempo-
rary basis. Canada, also a member of the ICC, has sided with
the British on this issue but has stated that an outbreak of hostili-
ties would put it in a vulnerable position vis-a-vis India. Laos,
however, will continue to resist any move for the ICC's return j
LThe Laotian-Government's military position in Sam Neua
Province meanwhile continues precarious despite the arrival
of some reinforcements, including paratroop forces. The in-
habitants of Sam Neua town have panicked, and a general exodus
of civilians and officials has begun by air and on foot. First-
hand accounts report that infiltration of the area by Communist
partisans is taking place during the confusion@J
t least. two incidents of harassing attacks on small army
detachments in central Laos have occurred since 27 July. These ,
31 July 59 CENTRAL INTELLIGENCE BULLETIN
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appear on the surface to be designed to pin down troops other-
wise available as reinforcements for the north, but may be part
of a broader Communist clan for country-wide action. I
government troops
f Saly were
at an outpost in the tar northern province o ivno
dispersed with casualties after an attack on 29-30 July by an
enemy band,allegedly North Vietnamese elements. Phong Saly,
along with Sam Neua Province, was a stronghold of the Commu-
nist Pathet Lao prior to the settlement reached with the govern-
ment in 1957
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South Korea Proposes Resumption of Talks With Japan
. FIn a memorandum to the Japanese Foreign Ministry on
30 July, the South Korean Government has proposed an "uncon-
ditional" resumption of talks to normalize relations between
the two nations. The memorandum noted that the status and
treatment of Korean residents in Japan is a major cause of
tension which can be relieved by !'mu filly.arranging"-the re-
moval of the difficulties blocking the repatriation to South
Korea. If this-is done, Seoul is ready to encourage a mass
return of Koreans and to expedite the exchange of Japanese
fishermen now held in Korea and all Korean detainees in
Japan. The Japanese press reports assert that Japan has
been assured that the discussions would not involve Japan's
policy of repatriating some Koreans to North Korea]
Esouth Korea apparently hopes that a reopening of talks
would delay action on Japan's present agreement to return
Koreans to North Korea. As recently as 27 July, South Ko-
rean Vice Foreign Minister Kim strenuously insisted to Am-
bassador Dowling that if Japan wants an agreement with Seoul,
Tokyo should not object to postponing further negotiations with
Pyongyang. He noted that in order to obtain President Rhee's
consent for proposing a resumption of talks with Tokyo, he
found it necessary to assure him that both the International
Committee of the Red Cross and the Japanese Government
would cooperate in postponing repatriation to North Korea.
Kim has also expressed the hope that a resumption of talks
with Tokyo might lead Pyongyang to abrogate its agreement
with Japans
The question of Japan's compensating Koreans returning
to South Korea probably will be a major issue in negotia-
tions. Japan has been willing to provide some subsidy, pos-
sibly as a resettlement payment, provided Japan can avoid
liability for similar payments to Koreans going to North
Korea. Seoul has been vague as to the criteria for deter-
mining the amount of such payments although it has insisted
that payments be publicized as compensation for "forced"
Korean labor in Japan
rwhile Japan. exp.re.sseditsswillingness to reopen negot _e
tions with South Koreas:-it-,-has begun preparations for theJ
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[repatriation of Koreans to North Korea, and is unlikely to de-
lay or abrogate this agreement. Pyongyang is also preparing
to carry out the repatriation agreement and, while urging im-
mediate signature of the pact, has not yet stated its demands
as an ultimatum
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Sicilian Political Instability Accentuated by Milazzo Success
Silvio Milazzo, leader of a dissident Christian Democratic
faction in the Sicilian regional assembly, was re-elected presi-
dent of the regional government on 28 July by a 45-43 vote, in
which he was supported by 21 Communists and 11 Nenni Social-
ists. Milazzo's victory marked the culmination of a long strug-
gle against a coalition composed of Christian Democrats and
rightist parties which succeeded in electing its candidate for
regional assembly president on 8 July.
The failure of the Christian Democrats to apply in Sicily
the national pattern--a Christian Democratic government sup-
ported by the Liberal Monarchist and neo-Fascist parties-- -
will be interpreted by certain influential persons within the
Christian Democratic party, notably ex-Premier Fanfani, as a
vindication of the concept of an "opening toward the left,"
Similarly, the critics of the Christian Democratic leadership
within the party will argue the merits of dissociating the par-
ty from undue clerical influence, pointing to the evident popu-
larity of Milazzo despite the Vatican injunction against collabora-
tion with the Communists.
A Sicilian "cabinet" has not yet been formed and the Ameri-
can Embassy reports Rome political commentators as seeing
some slim possibility that before it is formed there will be a
reconciliation between Milazzo and the Christian Democrats.
Failing such a reconciliation, Milazzo will be under pressure
to assign an increasingly important role in the Sicilian admin-
istration to the Nenni Socialists and Communists,who constitute
his chief support. This will aggravate tensions between Rome
and Sicily.
Since Sicilian deputies are notoriously resistant to party dis-
cipline, the slimness of Milazzo's majority leaves the possibility
that the orthodox Christian Democrats--still the largest. single
party in the Sicilian assembly--may upset his majority in subse-
quent assembly votes. F_ I
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CENTRAL INTELLIGENCE BULLETIN
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THE PRESIDENT
The Vice President
Executive Offices of the White House
Special Assistant for National Security Affairs
Scientific Adviser to the President
Director of the Budget
Office of Defense and Civilian Mobilization
Special Assistant for Security Operations Coordination
Board of Consultants on Foreign Intelligence Activities
Special Assistant for Foreign Economic Policy
Executive Secretary, National Security Council
The Treasury Department
The Secretary of the Treasury
The Department of State
The Secretary of State
The Under Secretary of State
The Under Secretary of State for Economic Affairs
The Deputy Under Secretary for Political Affairs
The Deputy Under Secretary for Administration
The Counselor
Director, International Cooperation Administration
The Director of Intelligence and Research
The Department of Defense
The Secretary of Defense
The Deputy Secretary of Defense
Assistant Secretary of Defense for International Security Affairs
The Secretary of the Army
The Secretary of the Navy
The Secretary of the Air Force
The Chairman, The Joint Chiefs of Staff
Commandant, United States Marine Corps
The Director, The Joint Staff
Chief of Staff, United States Army
Chief of Naval Operations, United States Navy
Chief of Staff, United States Air Force
Assistant to Secretary of Defense for Special Operations
Director for Intelligence, The Joint Staff
Assistant Chief of Staff for Intelligence, Department of the Army
Director of Naval Intelligence, Department of the Navy
Assistant Chief of Staff, Intelligence, Department of the Air Force
Supreme Allied Commander, Europe
Commander in Chief, Pacific
The Department of the Interior
The Secretary of the Interior
Federal Bureau of Investigation
The Director
Atomic Energy Commission
The Chairman
National Security Agency
The Director
National Indications Center
The Director
United States Information Agency
The Director
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