THE PRESIDENT'S DAILY BRIEF 2 MAY 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006014787
• 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 2, 1975

Declassified in Part - Sanitized Copy Approved for Release 2016/07/15 : CIA-RDP79T00936A012600010024-1
The President's Daily Brief
May 2, 1975
Declassified in Part - Sanitized Copy Approved for Release 2016/07/15 : CIA-RDP79T00936A012600010024-1
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Exempt from general
declassification schedule of ED. 11652
exemption category, 51311 ),(2),(3)
declassified only on approval of
the Director of Central Intelligence
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Declassified in Part - Sanitized Copy Approved for Release 2016/07/15 : CIA-RDP79T00936A012600010024-1
I. LI 1. J. .1_, J. `I
May 2, 1975
-Table of Contents
Vietnam: The new administration in Saigon has is-
sued directives concerning security, weapons
collection, and public property. (Page 1)
China: Peking has marked the communist take-over
of Saigon with congratulatory comment, but
some statements suggest that the Chinese have
reservations about the growth of North Vietnam-
ese power. (Page 2)
USSR-Israel: Moscow is making a fresh effort to
develop contacts with Israel. (Page 3)
Saudi Arabia: Riyadh has drastically reduced new
purchases of sterling-denominated assets and
made a further deep cut in oil production.
(Page 5)
Notes: Laos; Portugal (Page 7)
FOR THE PRESIDENT ONLY
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VIETNAM
The new "revolutionary administra-
tion" in Saigon issued three directives
on May 1 concerning security, weapons
collection, and public property. Like
earlier communiques broadcast from cap-
tured cities and provinces, the new
directives promise that there will be
no retribution against those who co-
operate, but they threaten "severe
punishment" against those who do not.
Foreign property and diplomatic residences are
to be protected, with communist soldiers ordered to
maintain order around these areas.
A separate communique from the Provisional
Revolutionary Government's Foreign Ministry, head-
quartered in the former presidential palace, in-
structed all South Vietnamese missions and embass-
ies abroad to "remain at their posts and await new
orders." Most of these diplomatic staffs, however,
have already requested asylum in the US or other
countries.
The communists, according to press reports,
state that they have completed the "liberation"
of South Vietnam by seizing four holdout provinces
in the delta and disbanding four divisions of the
South Vietnamese army. Intercepted messages, how-
ever, indicate that some pockets of resistance re-
main. According to a May 1 message, resistance
was continuing around Tan Son Nhut air base.
1
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1 iL r IN,L;a11_,Ed N /
CHINA
China has marked the Vietnamese com-
munist take-over of Saigon with an out-
pouring of congratulatory comment. The
statements suggest, however, that Peking
has reservations about the growth of North
Vietnamese power.
Mao Tse-tung and Premier Chou En-lai sent a
message of congratulations to PRG and North Vietnam-
ese leaders, which was delivered personally by Vice
Premier Teng Hsiao-ping to Vietnamese communist em-
bassies in Peking. People's Daily also carried an
editorial on the take-over on May 1.
The two statements praised the PRG, but gave
only a minimal nod to Hanoi's role. The editorial,
in fact, was addressed to the people and army of
South Vietnam and mentioned North Vietnam's help
only once. Both statements implied that China hopes
for an eventual unification of Vietnam, but the
leadership message also spoke of a "democratic and
national revolution" in the South still to occur;
this suggests that Peking would prefer that unifi-
cation not take place any time soon.
People's Daily referred to Moscow as expansion-
ist.and ambitious--certainly an indication of Chi-
nese concern over postwar Soviet role in the region.
Both statements expressed hope for a "free and in-
dependent" Vietnam.
US "imperialism and aggression" were portrayed
as defeated by the Vietnamese, hence no longer a
threat to the region. An NCNA dispatch on US evac-
uation from Saigon, in fact, gave favorable treat-fl to Secretary Kissinger's remarks that the US
would consider a new Asian policy in consultation
with other Asian states and that Washington would
carefully avoid overcommitment.
There is other evidence that Peking hopes
Washington will concentrate on areas such as Europe
and Japan and that the Chinese are worried that,
in the wake of Vietnam, the US will and ability to
act will be sapped by domestic controversies.
2
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USSR-ISRAEL
Moscow is making a fresh effort to
develop contacts with Israel.
Since the meeting in early April of two Soviet
emissaries and Israel's top leaders, Moscow has sug-
gested a wide-ranging agenda for talks in London
between a Soviet scholar on the Middle East and an
Israeli representative. The proposed agenda for
the London meeting suggests that, at least in this
venue, Moscow is not making any false claims to
evenhandedness in the Arab-Israeli dispute, but
that it is seeking to show its flexibility on terms
for a Middle East settlement.
The Soviets are suggesting, for example, that
if the Israelis promise to withdraw from occupied
territories and acknowledge the right of the Pal-
estinians to their own state, implementation of
these promises could be delayed. The Soviets also
suggested, as did Foreign Minister Gromyko publicly
on April 23, that Moscow would be willing to "guar-
antee" Israel's existence as a state.
The agenda also includes the highly sensitive
issue of Soviet Jews. The Soviets call for Tel
Aviv to quit using "Zionist interests" in the world
to pressure Moscow on the treatment of Soviet Jews.
They did not say what they would do in return, ex-
pecting no doubt that Israel would make its own
demands on this issue in due course.
It is doubtful, however, that Moscow views
these contacts as the main arena for its dialogue
with Israel. For one thing, the Soviets have entree
to top Israeli policy-making circles through such
contacts as the reported mission to Tel Aviv in
April and through discussions in Washington between
ambassadors Dobrynin and Dinitz.
The unofficial contacts do, however, give the
Soviets a way to float trial balloons and to create
an appearance of a continuing exchange with Israel
(continued)
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2- .2 J. 2- 1. .1.1.2-h- .2 1- '4 J- LF.L '4 1._.11.
on substantive issues. The Soviets may hope that
this will encourage Israel to participate at Geneva
and add to Moscow's image as Middle East intermedi-
ary.
Tel Aviv remains suspicious of Soviet inten-
tions and of the Soviet's ability and intention to
deliver on any promises. The Israelis have shown
no sign that they are persuaded that Moscow's pro-
Arab Middle East policy has undergone a fundamental
change. Nevertheless, from the Israeli government's
point of view, the contacts in and of themselves are
useful if only to remind Washington that Tel Aviv
could establish non-US channels for a dialogue with
the Arabs.
4
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1. VII, .1 1 AL I JALJAI-Z.L..,/ NI I. l./1
SAUDI ARABIA
Saudi Arabia has drastically re-
duced new purchases of sterling-denom-
inated assets during the past two months
in favor of assets in continental Euro-
pean, Canadian, and Japanese currencies.
The change probably reflects a pessimis-
tic assessment of sterling's prospects
by the new Saudi financial leadership
and will make it more difficult for the
UK to finance its payments deficit.
With the deaths of Anwar Ali--who headed the
Saudi Arabian Monetary Agency for 15 years--and
King Faysal, Saudi financial leadership passed to
a group of young and less conservative technocrats
centered around Prince Fahd. They are moving to
change the composition of Saudi holdings, which at
the end of 1974 were 80 percent dollar-denominated,
10 percent in sterling, and 10 percent in other
currencies.
In March, the Monetary Agency acquired $65
million worth of West German marks, Swiss francs,
Japanese yen, and Canadian dollars. During April
these purchases more than doubled, reaching $130
million--or over 10 percent of all new investment.
Increasing diversification is expected to con-
tinue with new investments widely spread among
currencies. Any concentration in major continental
currencies would probably result in the imposition
of controls by West European governments that are
unwilling to see their currencies appreciate.
Saudi Arabia stopped accepting sterling pay-
ments from oil companies in December and now has
halted the purchase of sterling-denominated assets.
No new sterling purchases have been noted since
early March. So far the Saudis have not tried to
sell any of $2 billion of assets they hold in
sterling.
Riyadh's move will make it more difficult for
the UK to finance its estimated $6-billion current
account deficit this year. Last year, some $6
billion of new OPEC investment in the UK covered
roughly two thirds of the British deficit. Saudi
(continued)
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'.JI. I IL :Lk, I ivi_?,31.1_,/:A. J. l/1 N L.
Arabia alone put about $1.5 billion into sterling
assets. With less of this effortless deficit financ-
ing, London will be forced to borrow more in private
capital markets. London borrowed more than $2 bil-
lion last year, but private lenders have become de-
cidedly more cautious about lending to the UK.
News of the Saudi shift/
may result in a reexam-
ination of investment policies by other OPEC in-
vestors. Private Western bankers may see the change
as an indication that the UK's credit worthiness is
going to deteriorate further.
Saudi Arabia's willingness to take
a further deep cut in its oil production
last month indicates the new leadership
plans to continue the late King Faysal's
policy of strong support for OPEC.
In April, Saudi output fell below 6 million
barrels per day, down at least 600,000 barrels per
day from March levels. The cut has resulted from
Aramco's decision to reduce its floating oil stocks
rather than from a decline in consumption. It re-
presents a 35-percent drop in Saudi output from
last October's peak of 8.8 million barrels per day.
If the companies continue their policy of reducing
oil stocks, as now seems likely, some further cut
in Saudi production can be expected through August.
Several other OPEC states, hard pressed for more
oil revenues, are now trying to increase their oil
output. If they succeed, Saudi output is likely to
be cut even further.
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_I_ I I L I IVE.0.11.-/1_,/ N I ./1 NI L., I.
NOTES
Yesterday's well-organized and strongly anti-
rightist demonstration in the Laotian capital is a
good indication of the Pathet Lao's capabilityto
muster large-scale support on their behalf and can
only further damage the morale of the non-communists
in the government coalition.
com-
munist victories in South Vietnam and Cambodia have
already caused despair among the non-communists.
Key civilian and military leaders have concluded
that the refusal of the US Congress to provide emer-
gency assistance to. South Vietnam and Cambodia means
that the non-communist side in Laos can no longer
depend on help from Washington either. As a result,
many prominent non-communists reluctantly are begin-
ning to believe that an eventual Pathet Lao "victory"
in Laos is inevitable and some are making long-range
plans to leave the country.
Yesterday's May Day celebration in Portugal
brought an upsurge in party rivalry, as the Commu-
nists sought to offset the moderate parties' elec-
tion victory last week.
The Communist-dominated labor confederation
sponsored a large rally in Lisbon, in which they
refused to allow the center-left Popular Democrats--
second after the Socialists in the election--to par-
ticipate. At the rally, Communists. and Socialists
engaged in a shouting match that interrupted a
speech by Prime Minister Goncalves. May Day also
marked the promulgation of a law, approved earlier,
which places Portuguese labor under a'single, con-
federation--the Communist-dominated Intersindical.
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Top Secret
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