THE PRESIDENT'S DAILY BRIEF 25 SEPTEMBER 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993940
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: September 25, 1973

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The President's Daily Brief
25 September 1973
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Exempt from general
declassification schedule of E.O. I 1652
exemption category, 513(1
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
25 September 1973
PRINCIPAL DEVELOPMENTS
Brezhnev's public castigation yesterday of Peking
shows that Moscow has virtually no hope for improve-
ment in relations in the wake of China's Tenth Party
Congress. He took particular pains to deny China's
?contention that the USSR has aggressive designs on
it. (Page 1)
In Chile, the new government has begun to confront
economic problems. A discussion of its initial de-
cisions and their probable effects appears on Pages
2-3.
King Husayn's amnestying of fedayeen has infuriated
many East Bank Jordanians, but most of the army ap-
parently will go along with the move as long as the
King makes no more concessions. The amnesty prob-
ably will not pry loose the suspended subsidy from
Kuwait. (Page 4)
There is increasing concern among EC officials that
the community may face a crisis this fall because of
conflicting views on how fast economic and monetary
union should be achieved. (Page 5)
The USSR is getting ready to launch a Soyuz space-
craft--possibly within the next week. There are
some tenuous signs that it will be manned. (Page 6)
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FOR THE PRESIDENT ONLY
USSR-CHINA
Brezhnev's sharp attack on Peking during
a speech in Tashkent yesterday suggests
that Moscow sees virtually no hope for
improvement in Sino-Soviet relations in
the wake of China's Tenth Party Congress.
Referring directly to the congress, Brezhnev
condemned the "frenzied anti-Sovietism and absurd
concoctions" that have followed it. He singled out
China's charges that Moscow has aggressive designs
on it, protesting that "the whole world knows how
utterly false" these are. Brezhnev speculated that
"internal motives" may explain why Peking continues
to take this line. Perhaps, he said, the Chinese
leaders are using the "specter of a nonexistent
threat" in order to scare their own population.
In defending Soviet intentions Brezhnev also
revealed that last June the USSR again offered to
conclude a nonaggression treaty with China, and
contended that the Chinese "did not even take the
trouble to answer."
Brezhnev's unusually blunt remarks add to
the mounting Soviet political offensive
to ostracize China. His tone also shows
how much sting there is in Chinese charges
of Soviet military intimidation.
Available evidence does not substantiate
allegations that the Soviets are planning
a military/ move against China.
Although the USSR continues to
flesh out forces already there, if the
trend this year continues there will be
less change in the Soviet border force
in 1973 than in any year since the build-up
began eight years ago.
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CHILE
Despite continued preoccupation with security,
the junta's economic policy is taking shape. The
new government is concentrating on reviving produc-
tion, controlling government finances, and securing
foreign credit and investment. Nationalized indus-
tries will remain in government hands. The junta is
anxious to resolve the dispute with US firms over
compensation, however, and US technical advice will
be requested on a contract basis.
The new regime has told industrial workers that
their economic gains are secure, and a profit-sharing
program has been promised. There will be little tol-
erance of politicized labor activity, however, and the
government is in the process of ridding the state
sector of leftist militants.
The junta has announced a program to bring gov-
ernment finances under control in an initial step to
arrest inflation. It has frozen the money supply
and declared that public enterprises must become
self-financing. Price controls on agricultural prod-
ucts probably will be lifted as an inducement to in-
crease output, and peasants on legally expropriated
lands will be given individual title.
These moves will bring higher prices ini-
tially, but if the regime can reduce the
public sector deficit sharply and stem the
growth in money supply, inflation should
eventually decrease. There are also likely
to be strict controls over wages and ex-
penditures, which would produce a reduction
in workers' real purchasing power. This
result would be partly offset initially by
an increased availability of goods, but in
the longer run, rehabilitation of the econ-
omy and the promised "preservation of work-
ers' gains" will to some extent be incom-
patible.
(continued)
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The junta wants to postpone the next meeting of
the "Paris Club" of Chile's creditors until a high-
level international commission can be put together
to prepare an impartial report on the nation's eco-
nomic condition. The government also hopes that a
scheduled Interamerican Committee for the Alliance
for Progress country report on Chile can be completed
in time for use at the meeting. In the meantime
Brazil is preparing to extend significant economic
assistance.
The response to Chile 's open door to pri-
vate foreign investment may be sluggish.
Investors with a stake in Chile may be
willing to return, but the junta will prob-
ably find it considerably harder to attract
new venture capital.
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JORDAN-FEDAYEEN
King Husayn's amnestying of imprisoned and ex-
iled fedayeen has infuriated many East Bank Jorda-
nians, but most of the army has apparently accepted
the King's rationale and will support the move as
long as the King makes no more concessions. So far,
only a few fedayeen have trickled back into the coun-
try, after spending a day or more undergoing border
security checks.
Damascus has welcomed the amnesty, but President
Asad remains noncommittal about resuming diplomatic
ties. He may believe he needs more time or a more
substantial gesture from Husayn before he can over-
come opposition to the rapprochement from radical
elements in Syria.
There is no indication that the amnesty will
pry loose the suspended subsidy from the Kuwaitis.
Their first reaction, in fact, was one of anger;
they regarded themselves as under pressure to re-
lease the five terrorists who temporarily took over
the Saudi Embassy in Paris earlier this month.
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EUROPEAN COMMUNITIES
EC officials believe that an internal community
crisis could develop this fall, largely because of
conflicting views on how fast economic and monetary
union should be achieved.
Germany, France, and the Netherlands want to
delay implementing the union's second stage well
beyond the beginning of 1974. The second stage in-
cludes measures for closer policy coordination and
a start toward pooling of monetary reserves. Paris
maintains that, contrary to the general understand-
ing, the EC summit last October made no commitment
to inaugurate the second stage "automatically" next
January. Bonn wants the first stage measures to be
consolidated before moving ahead. Also, the unlike-
lihood of Britain and Italy joining the floating
band of EC currencies provides further argument for
delaying such major steps toward union.
An impasse on this issue could hold up
progress on such other matters as a new
policy for development of economically
depressed regions. This includes a com-
munity fund that would especially help
Britain, Italy, and Ireland. In turn,
failure to set up a regional fund would
be a severe blow to already faltering
public support in the UK for participa-
tion in the EC.
Despite these major difficulties, the Nine
will seek to avoid an internal crisis in
the hope of presenting a common front in
their relations with the US, as well as
with the East. They may well seek a com-
promise lumping together some agricultural,
labor, and industrial questions in order
to preserve some forward momentum.
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NOTES
USSR: Preparations are now under way for launch
of a Soyuz spacecraft--possibly within the next week.
There are some tenuous indications that
the spacecraft will be manned. The Soviets have not
had a manned space mission since the ill-fated Soyuz
11 in 1971, when three cosmonauts died during re-entry.
Australia: The Labor government's loss of an
important by-election--which it had regarded as a
major test--will reinforce Prime Minister Whitlam's
doubts about calling national elections. By-elections
usually favor the opposition party, but the Liberal
margin of victory was unexpectedly large. Although
the Liberals spent five times as much as Labor on
the contest, they probably won the bulk of the vote
by hammering on the inflation issue--an issue of
equal concern to the national electorate, and one on
which the government has no convincing defense.
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Top Secret
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