THE PRESIDENT'S DAILY BRIEF 22 MAY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993829
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: May 22, 1973

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The President's Daily Brief
22 May 1973
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5B(1),(2),(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
22 May 1973
PRINCIPAL DEVELOPMENTS
The dollar again came under sharp pressure in Euro-
pean currency and gold markets yesterday. (Page 1)
Prospects have improved for the Soviet Union's grain
harvest, but the country will still have to import
large amounts of grain to meet domestic and export
requirements in fiscal 1974. (Page 2)
New passes accrediting Allied military liaison mis-
sions to Soviet forces in East Germany--announced
by the Soviets last week and supposed to go into
effect soon-are the first direct Soviet challenge
Of Western Allied rights and practices in Germany
since the Quadripartite Agreement on Berlin. (Page 3)
JPrdan7
/ (Page 5)
If Iceland's other appeals for help in the Cod War
are rejected, the government may tie a request for
Washington's support to US base negotiations.
(Page 6)
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INTERNATIONAL MONETARY DEVELOPMENTS
The dollar again came under sharp pressure in
European currency and gold markets yesterday. In
the last two weeks the dollar has depreciated by
about four percent against the European joint float
currencies, and by almost five percent against the
independently floating Swiss franc. Gold closed in
London at about $112 an ounce, up $7.50 from Friday,
and up $22 since May 7. Traders apparently still
are reacting to the US political scene rather than
to any new economic development.
If the dollar continues to depreciate,
pressures within the European joint float
will increase. The currencies participat-
ing in the float so far have floated up
against the dollar more or leis in har-
mony. If strong differential pressures
should develop among the currencies, how-
ever, this would be the first test of the
members' declared commitment to a common
currency.
Despite the rapid appreciation of the
mark in recent weeks, it remains at the
bottom of the European band and thereby
retains more room for further apprecia-
tion than its partners in the joint float.
FOR THE PRESIDENT ONLY
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USSR
An early spring and a massive sowing campaign
have improved prospects for the Soviet Union's .
grain harvest this year. Even so, the country will
probably need to import large amounts of grain to
meet domestic and export requirements in fiscal
1974.
The present outlook is for a total harvest of
about 154 million tons of usable grain, 20 million
more than last year. This includes 37 million tons
of winter grains--a disappointing harvest--and a
possible record yield of 117 million tons from the
spring sowing now in progress. Projections at this
stage are still very uncertain, however.
The total Soviet requirement for grain in fis-
cal 1974 is estimated at 165 to 170 million tons.
Even given this year's expected harvest, the USSR
will need an additional 11 to 16 million tons of
grain before the fall of 1974.
Moscow has recently contracted for more grain,
but major portions of the new purchases are intended
to make up remaining shortfalls from the 1972-73
crop year. Thus the USSR will still have to arrange
for substantial imports for the 1973-74 year. In-
deed, a sharp rise in the wheat futures market on
May 17 and 18 in both the US and Canada was sparked
partly by rumors of new Soviet purchases of wheat
from three major US companies.
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USSR - EAST GERMANY
The Soviets announced last week that passes
accrediting Allied military liaison missions to So-
viet forces in East Germany have been revised. The
new passes, which are supposed to go into effect
soon for US, UK, and French liaison personnel, au-
thorize travel "in and through the German Democratic
Republic," rather than "in the area of stationing
of the Group of Soviet Forces, Germany," as has been
the case since 1947.
This move is the first direct Soviet chal-
lenge of Western Allied rights and prac-
tices in Germany since the Quadripartite
Agreement on Berlin, and is quite incon-
sistent with Moscow's effort to regularize
the status quo in the interest of detente.
Moscow may want to test the Allies' resolve
now that they are moving to improve rela-
tions with the GDR. The Soviet challenge
may also be a pro-forma fulfillment of some
sort of pledge to Pankow. Moscow is not
likely, however, to push the new passes if
faced with a firm Western reaction.
FOR THE PRESIDENT ONLY
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FOR THE PRESIDENT .ONLY
USSR-MOROCCO
Two Soviet ships carried some Moroccan
military equipment and possibly troops to
Syria in late April.
The Soviet reversal may reflect Moscow's
wish to exercise caution prior to the UN
Security Council debate on the Middle East
and the summit meeting in the US.
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JORDAN
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FOR THE PRESIDENT ONLY
ICELAND-UK
Over the weekend two British frigates escorted
the British fishing fleet inside Iceland's 50-mile
limit. Reykjavik ordered its coast guard not to en-
gage the British ships, but closed all Icelandic
airfields to British military aircraft. Reykjavik
has also recalled its ambassador in London.
Iceland's UN representative has been instructed
to "take soundings" on a special Security Council
meeting, despite suggestions from some of the NATO
allies that Reykjavik seek a solution first through
the NATO secretariat. The government believes it
could get the dispute on the Council's agenda.
Reykjavik fully expects a British veto, but may make
the attempt to garner sympathy and support for its
position.
The Communist ministers in the government are
trying to involve the Soviet Union and Eastern Eu-
rope in the dispute. Fisheries Minister Josefsson,
currently visiting Warsaw en route home from Moscow,
reportedly has asked his hosts for a coast guard
cutter to supplement the small Icelandic force.
If all of Iceland's appeals for help are
rejected, the government may tie the US
base negotiations directly to a request
that Washington support Reykjavik in the
dispute.
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FOR THE PRESIDENT ONLY
NOTE
North Korea - UN: North Korea reportedly has
applied to Secretary-General Waldheim for observer
status at the UN. Given Pyongyang's recent admis-
sion to the World Health Organization, Waldheim
probably will approve the request.
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Top Secret
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