THE PRESIDENT'S DAILY BRIEF 6 JULY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993868
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: July 6, 1973

Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00-636A-011600010082-8
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The President's Daily Brief
6 July 1973
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Exempt from general
declassification scheduk of E.O. 11652
exemption category 58(1).(2).(3)
declassified only on approval of
the Director of Central Intelligence
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011600010082-8
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011600010082-8
FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
6 July 1973
PRINCIPAL DEVELOPMENTS
Sihanouk's uncompromising statements yesterday may
not actually preclude negotiations. All the parties
on the Communist side agree that he must play a cen-
tral role in reaching a settlement. (Page 1)
The Laotian negotiations are at a standstill as
Prime Minister Souvanna Phouma waits in the hope
that the Communists may soften their demands.
(Page 2)
The dollar continues to weaken, primarily because
the international money managers believe that other
currencies, particularly the German mark, are more
likely to appreciate in the short term than is the
dollar. (Page 3)
President Allende's new cabinet continues to reflect
the composition of his Marxist political coalition.
(Page 4)
President Tito has warned his people that he may
not be in the public eye as often as in the past.
(Page 5)
Notes on Rwanda and the Philippines appear on Page 6.
FOR THE PRESIDENT ONLY
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CAMBODIA
The Communists are adhering to their tough ne-
gotiating positions. Prince Sihanouk's refusal on
July 5 to talk with Washington may not actually pre-
clude negotiations, but shows that he is in no mood
to compromise--and all the parties on the Communist
side agree that he must play a central role in a
settlement. His terms include an end to US military
involvement, removal of the Lon Nol government, and
acceptance of a government led by himself.
Both Peking and Hanoi have recently reaffirmed
their support for these terms, and Moscow, although
not as committed to Sihanouk, has recently referred
to him positively.
Both Sihanouk and the Asian Communist
states have presumably been encouraged to
stick to their present demands by the ex-
pectation that the US combat role will
cease next month. They may hope that the
US will accept Sihanouk to achieve a truce.
FOR THE PRESIDENT ONLY
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LAOS
The Laotian negotiations are at a standstill.
Vientiane's chief negotiator Pheng Phongsavan said
on Tuesday that he and his Communist counterpart
Phoumi Vongvichit agreed that no further progress
is possible unless concessions are made on the major
political and military differences separating the
two sides. Pheng does not expect to meet with
Phoumi again "in the next few days" since Prime Min-
ister Souvanna Phouma has no plans "for the time
being" to come forward with additional concessions
to the Communists.
Souvanna's self-imposed deadline of July 1
for final agreement has lapsed, but he ap-
pears disposed to bide his time in the
hope that the Communists will soften their
demands.
2
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FOR THE PRESIDENT ONLY
INTERNATIONAL MONETARY DEVELOPMENTS
The dollar continues to weaken, primarily because
international money managers believe that in the
short term other currencies, particularly the German
mark, are more likely to appreciate than the dollar.
To the extent that the money managers act on their
belief, it is a self-fulfilling prophecy.
Europe's narrow currency band is an inviting target
for money managers and speculators. The relatively
fixed rates within the band provide the same oppor-
tunity for low-risk profit available under the ear-
lier system of world-wide, fixed exchange rates.
Because much of the world's liquid assets are in
dollars, speculation generally results in dollar
sales.
The German mark is the currency favored by traders
primarily because of its remarkable performance in
the last few years. Since December 1966, the ap-
preciation of the mark has been extraordinary--over
60 percent. West Germany's exceptional export earn-
ings?likely to be enhanced by the most recent ap-
preciation--and the government's aggressive anti-
inflationary program suggest to money managers and
speculators that the mark will probably be revalued
again shortly.
Although the dollar may show temporary strength when
traders take profits or repay dollars borrowed to
exchange for other currencies, there is little chance
for a sustained recovery in 1973. In traders' minds,
the near-term burdens on the dollar?inflation, the
psychological impact of continuing domestic polit-
ical uncertainty, the potential damage to the US
balance of payments by agricultural export controls--
clearly far outweigh longer-term prospects for
balance-of-payments improvement resulting from the
dollar's substantial devaluation.
The most vulnerable point in the European joint float
may be the Danish crown, which has firmly entrenched
itself at the bottom of the band amid rumors?offi-
cially denied--of impending devaluation. The weak-
ness of the crown is largely due to a rising trade
deficit.
3
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FOR THE PRESIDENT ONLY
CHILE
The new cabinet installed by President Allende
yesterday continues to reflect the composition of
his Marxist political coalition. Seven new minis-
ters were named and eight retained from the previous
cabinet.
Allende called on the ministers to redouble
their effort to carry out the coalition's programs
and, in particular, to implement a new plan designed
to reverse the country's political and economic de-
terioration.
The new plan calls for a further extension
of state controls including distribution
of food and other essential consumer goods
by the state.
Allende's speech at the swearing in was
not conciliatory. He did not address the
concerns of the armed forces. Neither was
he provocative. He did not reappoint any
previously impeached ministers as he had
earlier said he would.
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FOR THE PRESIDENT ONLY
YUGOSLAVIA
In his first major speech in more than two months
President Tito warned his people "not to be surprised"
if he must devote his time to foreign policy--an im-
plication that he will not be in the public eye as
frequently as in the past. He noted that three of
the four founders of the nonaligned movement--Nehru,
Nasir, and Sukarno--are dead and said that he, as
the sole survivor and "main initiator" of nonalign-
ment, has great responsibility for the movement's
future.
The 81-year-old Tito has frequently ex-
pressed a desire to limit his role in do-
mestic affairs, and in the fall of 1970
ordered creation of a collective state
presidency to ease his burdens. He began
to withdraw from internal political dis-
cussions earlier this year and has only
attended two Dartu sessions since late
April.
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NOTES
Rwanda: Rwanda's National Guard, the country's
army, seized control of the government on July 4,
claiming that it did so to head off civil war. While
the cabinet and national assembly were dismissed and
all political activity suspended, President Kayibanda
remains in office. His future role is unclear, how-
ever. A "National Committee for Peace and Unity"
has taken over administration of the country. The
coup probably arose from a deadlock between northern
and southern tribal factions in the *government.
Personal rivalries and disagreement over policy to-
ward the country's Tutsi minority are major factors.
Philippines: Local security officials fear that
a severe rice and corn shortage in two central prov-
inces may result in rice riots if the situation does
not improve. Manila believes the shortage stems in
part from the unwillingness of wholesale and retail
dealers to sell rice at the government-imposed price
ceiling. Local warehouses are empty, and there is
speculation that dealers have hidden their stocks ?in
outlying areas. The government is seeking to import
at least 400,000 tons of rice to meet domestic re-
quirements between now and November, when the next
rice crop is harvested, but so far no contracts have
been signed.
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Top Secret
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