THE PRESIDENT'S DAILY BRIEF 10 MARCH 1971

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005992521
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: March 10, 1971

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The President's Daily Brief
10 March 1971
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
10 March 1971
PRINCIPAL DEVELOPMENTS
The themes to be highlighted at the Soviet party
congress are discussed on Page 1.
The Communists have taken the last major government
base on the eastern rim of the Bolovens Plateau in
Laos. (Page 2)
Cambodia
/ (Page 3)
William McMahon has been chosen by the Australian
Liberal Party as the new prime minister. (Page 4)
The effect of the massive outflow of US short-term
capital to Western Europe is discussed on Page 5.
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USSR
the themes
to be highlighted at the Soviet party congress have
been distributed by the party to its own members
and to East European parties. The congress, it is
said, will cite the precarious nature ?of current
US-Soviet relations and will portray these relations
as unlikely to improve in 1971. US actions in Indo-
china and alleged intransigence at SALT will be men-
tioned as factors contributing to this situation.
The congress will hail three foreign policy "victo-
ries": Soviet advances in the Mediterranean area;
the move from fighting to talking with China; and
the Soviet and Polish treaties with West Germany.
These themes are fairly predictable. We
do not expect anything to be said at the
congress that would close the door to con-
tinued US-Soviet negotiations on various
issues, but the sober assessment of US-
USSR relations may appear particularly
gloomy alongside the foreign policy "tri-
umphs" that will be loudly proclaimed at
the congress. Indeed, if improved rela-
tions with Western Europe are to be em-
phasized at the congress, a certain amount
of criticism of the US is especially nec-
essary to satisfy those party members who
are concerned that not enough is being
done to maintain Communist "vigilance."
On the domestic front, according to the report,
the congress will dwell on two "victories": the
good 1970 harvest, and the promise of improved con-
sumer welfare under the new five-year plan.
Predictions that the congress will focus
on the consumer reinforces our belief,
that real economic reforms
will be eschewed in favor of promises and
exhortations./
except for this report,
there has been remarkably little authori-
tative communication from Moscow on the
prospects for the congress. Soviet lead-
ers seem to be scratching to compile a
positive record and a program that will
head off criticism of their performance.
Polish events in December have added to
their anguish and most likely contributed
to the decision to beat the drums on con-
sumer welfare.
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MILITARY ACTIVITY ON THE BOLOVENS PLATEAU
BURMA
LAOS VIEENAM
Saravane
AREA
THAILAND
CAMB ? DIA
Thateng
Ban Houei Sal.
Paksong
Chavane
Site 22
Overrun b
mmunists
So/ovens
Site 165
Plateau
ttopeu
CAMBODIA
25 50 miles
551119 3-71 CIA
Site 22 on the eastern edge
of the Bolovens Plateau,
overlooking the Se Kong
CE Communist-held location
0 Government-held location
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LAOS
Site 22, the: last major government base on the
eastern rim of the Bolovens Plateau, was evacuated
by its four battalions of irregular defenders yes-
terday after more than two days of almost continual
shelling and ground attacks by a Communist force es-
timated at three battalions. On 8 March, two irreg-
ular battalions abandoned Site: 165, which is some
five miles southwest of Site 22. All six irregular
battalions are withdrawing westward, and heavy:gov-
ernment air strikes are being called in on the enemy
forces.
Fighting in the Bolovens region had been
at a low ebb since early January, when
government defenders repulsed a Communist
assault on the northern side of the Plateau.
Communist forces have been regrouping for
a new thrust at the irregulars, especially
on the eastern rim where the government
bases have been an irritant to Communist
operations along the infiltration corri-
dor into Cambodia.
The tenacity of the assault on Site 22
suggests that the Communists place consid-
erable emphasis on clearing the heights
overlooking Route 16 and the Se Kong River.
These have not yet figured prominently in
the Communists' logistic effort in the
lower panhandle, but it is possible that
the enemy would like to make greater use
of the westerly river and road routes to
Cambodia in the waning months of this year's
dry season.
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CAMBOD I A
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AUSTRALIA
The Liberal Party today chose former foreign
minister and deputy party: leader William McMahon to
replace John Gorton as prime minister. McMahon will
lead a coalition government composed of the Liberal
and Country parties, which has a majority of six in
the larger and more important 125-member House of
Representatives. The coali-
tion is a minority in the
60-member Senate, however,
and its control there will
depend on support from the
small Democratic Labor Party.
McMahon brings to his posts
a depth and breadth of. gov-
ernment.experience and ex-
pertise equaled by few of
his colleagues. He has been
a firm supporter of the Aus-
tralian-American alliance;
of an Australian military
presence in Southeast Asia,
and of the allied commit-
ment in Vietnam. McMahon
has displayed some sensitiv-
ity, however, over the de-
gree of US influence on the
Australian economy because
of extensive private Ameri-
can investment.
William McMahon
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US WESTERN EUROPE
The_massive-outflow of US short-term capital.
to Western Europe, which has occurred since the re-
duction of, interest rates in the US, has caused deep
resentment on the part of Europe,in central bankers,
.Between
1 April 1970 and 28 February: 1971,.Western European
central_banks increased their dollar holdings by .
about $11 billion. West Germany took in nearly. $7
billion of this total including $900 million in
February alone. The short-term capital flow to Eu-
rope, which totaled over $1 billion in the last week
of February, has continued at a high rate in early
March.
This flow has made it particularly diffi-
cult for the Europeans to exercise the
monetary controls they believe are neces-
sary to fight their own inflationary prob-
lems. If they were to combat the influx
of dollars by making parallel rate reduc-
tions of their own, they would, of course,
only add to their problems. The present
situation greatly strengthens the long-
felt resentment in Europe over large US
balance-of-payments deficits, which have
forced European bankers to accumulate bil-
lions of unwanted dollars year after year
instead of gold. Europeans may express
their displeasure in the short run by con-
verting some of their dollars into gold.
There is no doubt about the antidollar mood
of European central bankers. Other eco-
nomic officials, as well as political and
military leaders, however, may be less,
willing than the central bankers to accept
the consequences of a disruption of present
international monetary arrangements.
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NOTE
Pakistan:: There has been: little significant
movement in the dispute between East and West.
President Yahya Khan is expected to arrive in Dacca-
soon,'presumably to see whether it is still possible
to reach a compromise with Mujibur Rahman. The
general secretary of Mujib's Awami League says the
party is now: in de facto control of the province's
civil administration, but he fears that the military
will soon try to re-establish its Control and to
arrest or kill.Awami League: leaders.
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