THE PRESIDENT'S DAILY BRIEF 1 NOVEMBER 1969

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006146381
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: November 1, 1969

Declassified in Part - Sanitized Copy Approved for Release 2016/04/27 : CIA-RDP79T00936A007700010001-1
The President's Daily Brief
1 November 1969
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THE PRESIDENT'S DAILY BRIEF
1 November 1969
PRINCIPAL DEVELOPMENTS
In Australia, Prime Minister Gorton seems to be
heading for a fight for the leadership of his
party. (Page 1)
President Thieu's critics are having a field day
lambasting his new austerity program, and he can
expect rough treatment from the assembly. (Page 2)
Ecuador's political, economic, and social problems
may once again overwhelm President Velasco. (Page 3)
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AUSTRALIA
National Resources Minister Fairbairn announced
on Friday that he will no longer serve under Prime
Minister Gorton. He says he is going to decide next
week whether to challenge Gorton for the leadership
of the Liberal Party. Although a good many influ-
ential Liberals have come out in support of Fair-
bairn or have conspicuously failed to endorse Gorton,
one knowledgeable party member told the US Embassy
he believes Fairbairn lacks the strength to win a
direct test with Gorton.
Even if Gorton fails to challenge Fair-
bairn, the Liberal Party and the Liberal-
Country Party coalition seem to be in for
a testing time. Another election soon is
a real possibility.
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SOUTH VIETNAM
President Thieu's new "austerity" taxes on most
imported goods have provoked harsh criticism through-
out the country. The decree, issued on 23 October,
produced almost immediate public panic and extensive
? hoarding. As a result, prices of most basic con-
sumer goods, domestic and imported, have soared.
Sharply worded attacks on Thieu's decree have come
from progovernment and opposition politicians, as
well as the press.
According to a US Embassy survey, many
Vietnamese believe that the measure hurts
the poor far more than the rich, and that
the government should have warned the pub
Zia. In addition, some Vietnamese are
saying that the new cabinet, which was to
give first priority to solving the coun-
try's economic problems, now has actually
worsened the situation.
The most violent reaction has come from the Na-
tional Assembly. Both houses have passed a series
of resolutions condemning the tax increases and ac-
cusing the Thieu administration of acting unconsti-
tutionally in failing to consult the assembly. Some
deputies are trying hard to have the decree annulled,
but there seems little likelihood of this.
President Thieu devoted part of his Na-
tional Day speech on 31 October to ex-
plaining the country's economic problems,
and he threatened to resign if his aus-
terity measures were not allowed to go
into effect. The government is claiming
that prices will go back down soon, and
that then public furor will subside. For
the moment, however, Thieu's relations
with the assembly are at an all-time low,
and his legislative programs may face
rougher treatment in the future.
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ECUADOR
After 14 months in office, President Jose Maria
Velasco finds himself in the not-unfamiliar posi-
tion of wondering how much longer he can hang on to
his job. As the septuagenarian has discovered three
times before in his long and colorful career, his
personal charm and his popularity with the voters
are far more useful in getting elected than in coping
with Ecuador's many problems. His most immediate
concerns this time are an outbreak of student dis-
orders and a more than usually bad fiscal situation.
Student disorders that have plagued Guayaquil
for two weeks now are spreading to other cities.
The students have long been resentful, but things
came to a head when an outraged Velasco ordered a
high school closed after students had insulted him.
This gave radical leaders a tailor-made issue. The
security forces, acting under orders from Velasco,
have not let the disorders get out of hand, but since
mid-October four students have been killed in riots.
Although there is reasonable doubt that the police
were responsible, agitators use the students' deaths
to support allegations of police brutality. The
acrimonious atmosphere enhances the probability that
student disorders will continue.
More fundamental perhaps are Ecuador's fiscal
difficulties. Attempts by the government to secure
foreign loans for budget support have come to naught,
and exports, although rising, are still far below
last year's level. Velasco got little help from the
legislature, which passed a budget that has no rela-
tionship to revenue-raising capabilities. The Pres-
ident has also had only minimal success in wresting
control from the myriad of autonomous agencies that
hamstring his efforts to control revenue collection
and expenditures.
(continued)
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? The cabinet, especially the ministers of defense
and government, has been pressuring Velasco to assume
extraordinary powers to resolve the economic crisis.
The defense minister has warned that hungry soldiers
whose salaries are now three months in arrears will
not tolerate existing conditions much longer.
Memories of the political difficulties
encountered by the military junta of 1963-
1966 continue to haunt leaders of the
armed forces, and we expect that they will
continue supporting Velasco for now. But
if Velasco loses what public support he
now has by overreacting to or doing noth-
ing about the current unrest, the mili-
tary may overcome its reluctance to assume
power.
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WARSAW PACT
As expected, the Warsaw Pact foreign ministers
issued a call for an East-West European security
conference after their two-day meeting in Prague.
Ye'sterday's communique makes broad and generally
noncontroversial proposals for an agenda. Even US
participation is not excluded; the issue is left
open.
The proposal obviously is designed to
elicit a positive response from the NATO
foreign ministers, who will be meeting
in December.
As the foreign ministers were finishing up,
military representatives from all the Pact countries
were gathering in Prague.
This meeting will probably review the
past training year, define training tasks
for 1970, and observe a joint Soviet-
Czechoslovak training exercise now under
way.
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NOTES
Laos: The fighting in the north has slowed.
/Although the Communists have been able to
bring in more supplies, they have been less success-
ful in reducing government harassment. During the
past week, elements of the North Vietnamese 312th
Division have made many attempts to overrun govern-
ment positions; all have failed. In the northern
portion of the Plaine des Jarres, the enemy's dif-
ficulties appear to be more profound.
Lebanon: Yasir Arafat, the Fatah leader,
showed up in Cairo just as the Lebanese representa-
tives were about to give up and go home. The Leba-
nese may be able to work out some kind of arrange-
ment with Arafat--certainly they got nowhere at all
without him. Caretaker Prime Minister Karami some
days ago said he would go to Cairo to talk with
Arafat, but we have no information about his plans
now.
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