THE PRESIDENT'S DAILY BRIEF 7 JULY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993869
• 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 7, 1973

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The President's Daily Brief
7 July 1973
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5B( I
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
7 July 1973
PRINCIPAL DEVELOPMENTS
European financial leaders are growing increasingly
alarmed by the dollar's decline, and pressure is
building toward a new call for .a conference of the
major powers and another attempt to restructure the
exchange rate system. (Page 1)
The Soviets are producing a new nuclear-powered
attack submarine which may incorporate major changes
in its sensors, weapons, or ship control systems.
(Page 3)
Given favorable weather, the Soviet Union could
reap a record grain harvest this year. It will
nevertheless need substantial imports--perhaps as
much as 15 million tons--to meet domestic and for-
eign requirements. (Page 4)
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Italian Prime Minister-designate Rumor has obtained
the agreement of the Socialist" Party to participate
in a new center-left coalition. (Page 5)
Notes on East Germany - Berlin and on Iraq also
appear on Page 5.
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FOR THE PRESIDENT ONLY
INTERNATIONAL MONETARY DEVELOPMENTS
European financial leaders are taking an
increasingly pessimistic view of the in-
ternational monetary situation. The crisis
on world money markets seems to be building
up to a call for another conference of the
major powers and another attempt to re-
structure the exchange rate system.
With the acceleration of the dollar's decline
in Europe, Paris has raised the specter of possible
European countermeasures, President Pompidou's
economic and financial adviser told the US Embassy
on July 5 that West European governments would be
compelled to take protective action--for example,
import surcharges--if the monetary situation was
not stabilized. The adviser expected that European
exchange markets would soon be closed if the dollar
depreciation continued. He also noted, as Finance
Minister Giscard D'Estaing later stated publicly,
that the upcoming multilateral trade negotiations
are threatened by the monetary problems. Finally,
he reiterated the French view that Washington should
intervene to support the dollar.
On July 2 German Finance Minister Schmidt ex-
pressed a somewhat different view of what the US
should do in the present crisis. He emphasized
that he would not particularly welcome US interven-
tion to support the dollar if it involved the sale
of marks obtained through swap arrangements; this
would adversely affect the German anti-inflationary
program. He also said there could be no Bundesbank
support for the dollar because it would add to in-
flationary pressures in Germany. Instead, Schmidt
suggested that Washington and European nations sell
gold, although he did not mention a price. Schmidt
expressed hopes that the revaluation of the mark
would help stabilize the situation, but he emphasized
that, rather than revalue again, he would advise
Bonn to abandon the joint float band and let the
mark float independently.
Swiss and Belgian officials have now joined
the French in pressuring Washington to support the
dollar. EC officials are reportedly studying con-
tingency plans which ?focus on strengthened controls
over the inflow of dollars, although such controls
have continually proven inadequate in the past to
deal with massive speculation.
(continued)
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FOR THE PRESIDENT ONLY
The dollar again declined sharply against Euro-
pean currencies yesterday and--for the first time in
several weeks--against the yen. Several major West
German banks halted trading in dollars an hour ahead
of time as a result of market uncertainties. Sterling,
however, has declined against the dollar over the
last several days, partly in response to rumors that
it would be repegged at a lower rate.
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eningrad 0 (Ajte___
A is l'a Lv iet rs.oad Biryie7
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?Gor'kiy
USSR: New Attack Submarine
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FOR THE PRESIDENT ONLY
USSR
The Soviet Union is producing a new nuclear-
powered attack submarine at the Gorkiy shipyard on
the Volga River.
About 330 feet long, the new submarine
is similar to but some 30 feet longer
than the V-class attack submarine. The
added length, in the forward half of the
hull, suggests that the new ship may in-
corporate major changes in the sensors,
weapons, or ship control systems, rather
than any changes in the propulsion system.
One of the new submarines has been built, and
another is under construction.
The Gorkiy shipyard has also built a new trans-
porter dock that is specially equipped to move these
longer submarines through the inland waterway system
to the White Sea--a development suggesting that con-
struction of a number of these submarines is planned.
A shipyard in Leningrad continues to .build
the standard V-class--about two a year.
The V-class has been principally used in
antisubmarine operations in the Mediter-
ranean and North Atlantic.
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USSR
A record sowing of spring grains has raised
the total grain area to its highest level since
1965.
So far the weather has been favorable for
? the development of both winter and spring
grains. The spring grains, however, are
? now in a critical stage, requiring ade-
quate rainfall and cool temperatures. If
the weather continues favorable, the grain
? harvest could amount to 157 million metric
tons of usable grain compared with 150
million in 1970, the previous high.
So far this year, the Soviets have contracted
to import about nine million tons of grain, in-
cluding almost seven million from the US.
Nevertheless, they will need as much as
six million more to meet domestic and
foreign requirements, even if the harvest
is a record high. Soviet grain buyers
appear to be inactive at present, proba-
bly because of high world grain prices
? and US grain export controls. In addi-
tion, Moscow is probably waiting to see
how the present crop develops.
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FOR THE PRESIDENT ONLY
NOTES
Nationalist China:
Italy: The Socialist Party has agreed to par-
ticipate in a new center-left coalition under Prime
Minister-designate Rumor. The government program
concentrates on economic matters such as tax reform
and fighting inflation; decisions on more trouble-
some issues have been deferred. The government is
given some flexibility in dealing with the Italian
Communist Party by the agreement that proposals from
opposition parties may be adopted if all members
of the coalition approve. Rumor still faces the
task of assigning the various ministerial and under-
secretarial posts, an exercise which should be com-
pleted in the next several days.
East Germany - Berlin: East Germany has warned
Western officials that it will severely restrict
traffic into East Berlin during the World Youth
Festival, which will be held between July 28 and
August 5. Such restrictions would allow East Ger-
many to control the Festival more thoroughly and
assure that its anti-imperialistic flavor is not
diluted. The restrictions, however, would be a
violation of existing travel agreements, and the
West Berlin Senat will probably appeal to Bonn--
and possibly the allies--to protest.
Iraq: Saddam Husayn Tikriti, deputy chairman
of the Revolutionary Command Council and leader of
the civilian wing of the ruling socialist Baath
Party, probably masterminded the conspiracy which
led to the assassination of the country's Minister
of Defense last weekend. The execution of the
security chief who carried out the plot has just
been announced; he was thought to be Tikriti's man
and may have been set up as a scapegoat. The De-
fense Minister and Interior Minister--who was
wounded and is reportedly under house arrest--
supported President Bakr. Bakr is said to be in
virtual seclusion, and Tikriti seems to have taken
an important step in his continuing drive to take
over the government.
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Top Secret
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