THE SITUATION IN SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A000400010069-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: December 15, 2016
• Document Release Date: July 14, 2004
• Sequence Number: 69
• Publication Date: March 16, 1966
• Content Type: REPORT

SE Ckpyrpu1For Release 2004/07/16 : CIA-RDP79T00826A000400010069-6= C 0
OCI No. 0365/66
Copy No. 1 3
WEEKLY REPORT
THE SITUATION IN SOUTH VIETNAM
16 March 1966
INTELLIGENCE AND REPORTING SUBCOMMITTEE OF THE INTERAGENCY
VIETNAM COORDINATING COMMITTEE 25X1
SECRET
GROUP 1
Excluded fro ??r?m?r{c
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
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Next 2 Page(s) In Document Exempt
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THE WEEK IN PERSPECTIVE
Premier Ky's initially smooth removal of I Corps
commander General Thi is now posing increasing prob-
lems for the government. Although Thi is currently
proving cooperative in attempting to quiet down protests
in I Corps over the government's move, intervention by
the Buddhists to foment demonstrations in support of
their own demands may tax the government's ability to
maintain control.
The over-all' level of Communist-initiated activity
declined slightly. Allied activity continued at a high
level for the fifth week, with emphasis on search-and-
destroy operations. The kill ratio favored Free World
forces 7. 3 to 1.
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. THE SITUATION IN
A. POLITICAL SITUATION
1. The Ky government's replacement of General
Thi as commander of I Corps on 10 March has set off
a wave of peaceful protests in all of the five prov-
inces of the corps area. This activity now is in-
creasingly taking on the character of a Buddhist-di-
rected campaign against military rule which may
jeopardize the viability of Ky's regime.
2. The initial focal point of political agita-
tion on behalf of Thi was the city of Da Nang, where
there have been daily public rallies and two almost
totally effective general strikes by shopkeepers and
workers. There has been evidence of considerable
collusion by local officials and military officers
owing their positions to Thi and by Nationalist Party
(VNQDD) factions permitted to flourish under Thi's
tutelage.
3. Unrest involving primarily students and low-
ranking military troops spread rapidly to Hue, Hoi An,
Tam Ky, Ouang Ngai, and Quang Tri--the respective
capitals of Thua Thien, Quang Nam, Quang Tin, Quang
Ngai, and Quang Tri provinces. Most of this activity
appeared in the form of school boycotts and small-
scale meetings at which speakers challenged the gov-
ernment's motives in removing Thi and demanded his
reinstatement. This protest activity was organized
largely in the name of a "civil and military struggle
committee for I Corps," although a student committee
against corruption and in defense of the "revolution"
also surfaced.
4. There is little evidence that the Buddhist
hierarchy instigated the political activity in sup-
port of Thi, but Buddhist leaders have moved rapidly
to exploit the situation. On 12 March, a communiqud
was issued by Buddhist Institute chairman Tam Chau
in Saigon, alerting the government to certain Bud-
dhist demands in the interest of national unity.
These included the reinstatement of all generals who
served the 1 November 1963 "revolution," an obvious
reference to the former Minh junta rather than to
General Thi who was in exile at the time. The communique
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also called for an elected national assembly, more
drastic social change, and, indirectly, for civilian
rule.
5. There have been indications in recent months
of increasing Buddhist dissatisfaction with the pres-
ent government. Ky's recent cabinet reorganization,
which increased Catholic representation, has tended
to unite the rival Tam Chau and Tri Quang factions in
a stronger opposition stand. The Buddhists had al-
ready been contemplating cautious demonstrations to
protest the government's ineffectiveness in curbing
inflationary pressure and its postponement of a genuine
popular assembly through the device of a hand-picked
advisory council "for building democracy." Although
there is evidence that the Buddhists had come to dis-
regard General Thi as a possible means for bringing
about a government satisfactory to their interests,
they appear to regard his ouster as a step toward the
consolidation of power by generals they deem to be
"reactionary," notably Catholic Chief of State Gen-
eral Thieu and Deputy Premier Co. This first open
breach in the facade of military unity, moreover,
may have convinced them that an opportunity was at
hand which they could exploit in the hope of bring-
ing about favorable government changes.
6. Premier Ky reportedly had received assurances
that the Buddhists would not become openly involved
on Thi's behalf, and that the trouble in I Corps would
not be "too serious." The protest meetings of the
past few days, however, particularly in Hue and now
spreading to Saigon itself, are increasingly indica-
tive of a Buddhist campaign in support of their four
major demands, An orderly demonstration occurred in
Hue on 16 March, involving 5,000-10,000 persons,who
marched to the home of the Thua Thien Province chief
to present a petition covering the four demands of
the Buddhists. The first Buddhist-sponsored meeting
was reported on 16 March in Saigon.
7. The Ky government, meanwhile, has reversed
an early decision against allowing General Thi to ap-
pear in I Corps. Thi, who is still under orders to
leave South Vietnam for temporary exile in a few days,
was permitted to return to I Corps on 16 March after
apparently agreeing to cooperate with Saigon in at-
tempting to calm his supporters. Although there is
some risk that he may try to seize the opportunity
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to rally support for himsel
is public rema
genuinely directed toward urging the populace to ac-
cept his own removal and the central government's
authority.
8. If Thi's cooperativeness sticks, there is a
possibility that the government may be successful in
undercutting its critics, including the Buddhists who
privately maintain that they are not seeking the over-
throw of Ky, but rather an end to military infighting
and ineffectiveness. On the other hand, Buddhist in-
tervention in the situation now may be sufficiently
deep that continuing demonstrations in support of
their demands can only be curbed by repressive mea-
sures or major concessions on the part of the govern-
ment. The extent of Buddhist involvement with various.
political elements seeking to gain a foothold in the
government is still unknown.
9. Premier Ky has for the most part indicated
confidence that, by winning nearly unanimous endorse-
ment of top military officers for his move against
Thi and by obtaining Buddhist assurances that they
did not oppose Thi's removal, he can keep the situa-
tion under control and emerge with his authority
strengthened.
10. The new I Corps commander, General Nguyen Van
Chuan, has been given authority to use any measures
needed to curb unrest, but has taken the line that,
in the absence of disorders, he does not intend to
interfere with protest activity, Chuan told a US
consular officer that he regarded the increasingly
pro-Buddhist character of the protests as a cause
for concern, but that any decisive steps to curb
Buddhist political activity should be taken first
in Saigon, not I Corps.
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11. On 15 March, the government executed an over-
seas Chinese importer recently convicted of "economic
crimes" after rejecting his appeal for clemency. The
execution was obviously designed to demonstrate to
the Vietnamese public the Ky regime's determination
to crack down on corruption and to deter the more
blatant forms of speculation and profiteering by
business elements. In an effort to prevent any
charges of a vendetta against the Chinese community
and to demonstrate toughness toward official venality,
the new special court simultaneously ordered the death
sentence for a former government treasurer from the
resort town of Dalat, who confessed to embezzlement
of public funds. This execution will almost certainly
also be carried out. Although unlikely to have more
than a temporary deterring effect on corruption, the
executions may lead to increasing uncooperativeness
and capital flight on the part of the Chinese com-
merical interests.
12. Minister of Economy Thanh is elated over the
favorable press reaction to his proposal on 7 March
for an annual foreign exchange tax of five million
piasters. Proposals to raise the rates of several
taxes (e.g., petroleum, automobiles, property rentals)
have already been drawn up and are awaiting final ap-
proval by Thanh. In the meantime, Thanh, apparently
under pressure from Premier Ky, has given his approval
for US experts to work with the Ministry of Finance
in drafting a number of other more significant tax
proposals. US advisers will recommend that tax in-
creases be adopted which will raise tax receipts to
an annual level of 30 billion piasters during 1966.
The key elements in the implementation of the pro-
gram will be the participation of US officials with-
in the GVN customs system, rapid clearance through
the ports of the great volume of imports, and the
determination of Minister Thanh to collect noncustoms
taxes and back taxes in full. Other key elements of
the Honolulu economic agreements which have been or
are being carried out are: the release of GVN for-
eign exchange for imports, the appointment of a port
director with increased authority, establishment of
security stockpiles, and review of import procedures.
Still under discussion are an import deposit system
and the revocation of ninety-day customs credit.
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1 7
13. Rice deliveries from the Mekong delta to Sai-
gon have been at a nine-year low since the beginning
of 1966. Rice prices have risen almost 20 percent
above the price levels at the end of December 1965,
and almost no rice has been sold to the government at
its price of VN $720 per 100 kilos. In an effort to
maintain the consumer price of rice at a moderate
level and to maximize rice deliveries from the delta
to Saigon, counterpart funds will be used to subsi-
dize the price of imported rice at VN $830 per 100
kilos. Moreover, government purchases in the delta
will be resumed in approximately one month at a
price slightly less than VN $800, but considerably
higher than the current government price of VN $720.
14. The new Thi Du steam power plant will be of-
ficially opened about 15 April. This 33 MW plant,
which will raise the Saigon capital district gen-
erating capacity to 86 MW, is expected to eliminate
the power shortage caused by Viet Cong attacks in
May 1965 on power lines from near Dalat to the cap-
ital area. On 11 March, an agreement was signed for
the design and installation of a 3,000-kilowatt power
plant to serve some 25,000 farm families in An Giang
Province in the southwestern delta area, a priority
area selected by the GVN for its pacification efforts
in 1966. Electricity will be supplied to the An
Giang rural cooperative at cost. Two other pilot
cooperatives are in the planning stage. One is in
the central highlands and another in the growing in-
dustrial complex of Bien Hoa, a priority area about
40 miles north of Saigon.
15. Retail prices in Saigon showed little change
from the previous week. USAID Retail Price Index was
approximately one percent above a month ago. Prices
of imported commodities continued to fall, apparently
as a result of the government's recent actions against
profiteering. Retail prices of fish and vegetables
dropped but were offset by higher prices for beef,
Nuoc Mam, charcoal, and firewood.
16. The blackmarket rate for dollars increased
by three piasters to 173 and the blackmarket rate of
gold by two piasters to 235. In each case, this was
the highest price thus far in 1966 although lower than
the all-time highs of October 1965. MPCs (scrip) rose
one piaster to 119 per dollar. In Hong Kong, the
piaster-dollar cross rate was unchanged at 159.
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B. MILITARY SITUATION
1. The over-all level of Communist-initiated
activity for the week ending 12 March declined
slightly.
2. During the period there were 686 Communist-
initiated incidents compared with the previous week's
733--less than the weekly average for the last half
of 1965 and that of 1966. There were 10 attacks (all
but three were small-scale) and 466 incidents of
terror compared to 13 and 445 respectively for the
week before. The large-scale attacks occurred in
Thua Thien, Binh Dinh, and Binh Duong provinces. The
kill ratio favored Free World forces 7.3 to 1, up
from 5.9 to 1. Viet Cong casualties included 1,224
killed and 106 captured. The preceding week's totals
were 1,622 killed and 193 captured. South Vietnamese
casualties for the reporting period were 131 killed,
362 wounded and 42 missing or captured--a total of
535 compared to the last report of 684. Total US
casualties decreased to 319 from the 665 of the pre-
vious week; total third country casualties dropped
from 49 to 22. The South Vietnamese lost 139 weapons
and captured 234 from the Communists; enemy losses
included 10 crew-served weapons, while friendly forces
lost two.
KIA
WIA
MIA/Captured
Total
Casualties
US
33
272
14
319
ARVN
131
362
42
535
Third Country
4
18
0
22
Viet Cong
1,224
---
106
1,330
GVN/Allied Activities
3. Friendly activity continued at a high level
for the fifth week with emphasis on search-and-destroy
operations. Small-unit operations increased while
battalion operations and enemy contacts decreased.
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4. I Corps continued to be the focal point. of
attention as a result of the highly significant
victory won by ARVN and US forces in Quang Ngai Prov-
ince, as well as a defeat suffered as a result of an
attack on A Shau Special Forces Camp in Thua Thien
Province. Friendly activity was hi hl* hted by the
results of the combined Operation 25X1A
in Quang Ngai Province. USMC, ARVN 2d Division, and
airborne troops trapped the PAVN 21st Regiment in
well-prepared positions in the valley area 15 kilo-
meters northwest of Quang Ngai City. Friendly forces
lost 115 (83 US) killed and 340 (204 US) wounded.
The Viet Cong, in their attempt to take control of
the rice harvest, lost 532 killed, 24 captured, and
43 suspects detained. They also lost 59 individual
and 11 crew-served weapons. The ARVN 1st Division
continued Operation n Thua Thien 25X1A
Province until 6 Marc although forces (Opera-
were withdrawn on 3 March. Viet Cong
losses were 310 killed, 41 captured, 38 suspects
detained, and 11 ralliers returned. In addition, the
enemy lost 124 individual and 18 crew-served weapons.
5. In II Corps on 6 March, the large-scale US/
ROK/ARVN Operation in Binh 25X1A
Dinh Province terminated. Total friendly losses
since the operation's beginning on 24 January were
384 killed (245 US, 129 ARVN, 10 ROK), 1,259 wounded
(876 US, 359 ARVN, 24 ROK), and 12 missing (6 US,
6 ARVN). The Viet Cong sustained losses of 2,389
killed, 701 captured, 2,184 suspects detained, 11
returned ralliers, 313 individual weapons, 66 crew-
served weapons and a large cuantit of ammunition
and documents. Operation being conducted 25X1A
by the 1st Brigade, US 101st Airborne Division,con-
tinues in Phu Yen Province. Cumulative results are
32 US killed, 135 wounded, and two missing. The Viet
Cong forces have lost 218 killed, 12 captured, 63
individual and eight crew-served weapons. RVNAF
Marines conducting pacification operations in the
northern coastal area of Binh Dinh Province suffered
seven killed and 30 wounded. The Viet Cong sustained
losses of 31 killed, 17 individual and three crew-
served weapons.
6. In III Corps, the US 1st Infantry Division
terminated Operation on 6 March. Final
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results were 15 US killed and 15 wounded; Viet Cong
losses were 199 killed, 10 captured, 15 individual
and four crew-served weapons plus a quantity of am-
munition. On 7 March combined US/ARVN Operation
F was initiated in Long Khanh
Province. To date no significant contact with the
Viet Cong has been made.
7. Only one friendly operation in IV Corps
(Operation produced significant results.
In Ba Xuyen Province a regional force company and
one popular force platoon engaged a Viet Cong local
force company. Friendly forces lost five killed and
nine wounded while the Viet Cong suffered 37 killed,
one captured,and the loss of seven individual weapons.
8. Free World forces conducted 100 battalion
or larger-size operations during the week, 36 of
them achieving contact--27 RVN, two ROK, and seven
US. There were 22,733 small-unit operations, in-
cluding 2,834 conducted by US forces. Of the 144
which achieved contact with the enemy, 101 were con-
ducted by US units.
9. There were eight B-52 Stratofortress missions
flown over South Vietnam during the period 7 to 13
March 1966; ground exploitation was scheduled for
three of these missions. No bomb damage assessment
has been received. During the period 4-10 March 1966
a total of 3,425 tactical air strikes and armed re-
connaissance sorties was flown by the combined ef-
forts of the US Navy, Air Force, Marine and VNAF air-
craft. In addition to close air support, direct air
support and interdiction missions in support of ground
operations, the following damage was inflicted: 2,536
structures, 152 sampans, three bunkers, two rice
storage areas, one AW site and one radio relay sta-
tion were destroyed; 1,956 structures, 90 sampans,
three bunkers and one rice storage area were damaged.
In addition, there were five road cuts made, one cave
sealed and 63 secondary explosions observed. Three
US aircraft were reported lost, one marine and two
air force. The fate of the crew of the marine F4
is unknown; the pilot of the air force Al was res-
cued; three crew members of the AC-47 were rescued and
one is missing, while the pilot and copilot were
killed.
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Communist Activity
10.. Communist activity decreased in I Corps
area from that of last week although there was a
multi-battalion attack on the A Shau Special Forces
Camp, in western Thua Thien Province on 9 March.
After two days of heavy fighting, the camp was
abandoned to the enemy. Of the camp's 17-man Spe-
cial Forces Team, five were killed and 12 were
wounded and evacuated. Four crew members of a
downed AC-47 were killed and the remaining three
rescued. Of the 370 Vietnamese military personnel
and 37 civilians at the camp, 172 were evacuated.
During the attack one USAF AC-47, one USAF A1E.Sky
raider, and three USMC H-34 Choctaw helicopters were
lost.
11. In II Corps, an estimated Viet Cong batta-
lion attacked the command post of the 3d RVNAF Marine
Battalion in Binh Dinh Province. Friendly and enemy
losses were not reported. The incident rate continues
to drop in II Corps with 103 reported during the week.
12. There was a definite increase of enemy ac-
tivity in III Corps, with the 166 incidents almost
doubling the number of the previous week. On 6 March,
a Viet Cong force of unknown strength overran Long
Thuong outpost in Long An Province. On 7 March, an
unidentified Viet Cong force (considered by MACV as
possible elements of the 165A, 271st or 273d Viet
Cong regiments), attacked the 4th Battalion, 48th
ARVN Regiment at Tan Uyen, Binh Duong Province. The
attacking force used 81-mm. mortars, 57-mm. and 75-mm.
recoilless rifles, and small arms. No losses were
reported.
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CURRENT OPERATIONAL STATUS OF MAJOR TRANSPORTATION ROUTES AND COASTAL RAILROAD
+-i-+r Section of operable railroad
Section of inoperable road
Note: Routes are inoperable primarily
because of Viet Cong sabotage/
interdiction efforts.
Information as of 12 March 1966
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14. National Route 1 is closed in Quang Tin,
Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh
Thuan, Binh Thuan, Binh Tuy, and Long Khanh prov-
inces. Route 14 is closed in Kontum, Pleiku, Quang
Duc, Phuoc Long, and Binh Long provinces. Route 19
is closed west of Duc Co, Pleiku Province. Route 7
is closed in Phu Yen Province. Interprovincial
Route l is closed in Binh Duong and Phuoc Long prov-
inces. Interprovincial Route 2 is closed in Phuoc
Tuy.
15. The National Railroad is operating between
Saigon and Xuan Loc, Long Khanh Province; between
Ninh Thuan Province (border) and Ninh Hoa, Khanh
Hoa Province; between Dalat and Phan Rang, Ninh
Thuan Province; and between Da Nang, Quang Nam Prov-
ince, and Hue, Thua Thien Province.
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Qua
,Tri
19
Hue
National priority area
for revolutionary
development
'- khu Lai
?Quahg Ngai
.tong Hpi
Pleiku.
SOUTH VIETNAM
CURRENT SITUATION
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C. REVOLUTIONARY DEVELOPMENT
1. While the first class of revolutionary devel-
opment cadre undergoes an intensive 13-week training
program, US mission and GVN officials continue to
examine points raised at the Honolulu conference.
Minister for Revolutionary Development General Nguyen
Duc Thang has listed the following six general areas
for improvement: agriculture, hadicraft and light
cottage industries, land reform, rural electrification,
construction materials, and training of village offi-
cials. It has not been specified how the GVN officials
will measure the progress of the revolutionary devel-
opment groups. General Thang has, however, approved
the establishment of an inspection corps made up of
nine seven-man teams, five for the central revolutionary
development council and one for each corps council.
The Thu Duc officers candidate school will provide
most of the personnel, except for the two civilian
members on each seven-man team.
2. Each province will have a revolutionary de-
velopment council and a 15-man cadre control staff.
They will be subordinate to the province chief, who,
in turn, will report to the division commander.
General Nguyen Huu Co and General Thang have assured
the Honolulu conferees that necessary forces will
be available to support the pacification effort since
it now is the primary mission of the division com-
mander. It remains to be seen how this critical
issue of security for the revolutionary development
cadre will be resolved. In the past, division and
corps commanders have tended to use their troops for
nonpacification purposes in the case of any conflict
of interest.
3. The province chief, nearly always a military
officer, will continue to be the key GVN official
in the implementation of the revolutionary development
program. Provincial revolutionary development repre-
sentatives fear that the control staff will be com-
posed of persons not familiar with the program. They
feel the staff should report to the provincial revo-
lutionary development director rather than the province
chief.
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sures for tangible progress will start to develop
about May and will be most noticeable at the time
of the next Honolulu conference this summer. They
have also stated unofficially that VC strategy is
to apply military and psychological pressures on
the four national priority areas (see map). VC
terrorist activity against effective civilian pro-
grams is evidenced by the murder of three new-life
hamlet workers on the outskirts of Saigon. On 11
March, the VC attacked the Vung Tau national cadre
training center with mortars, grenades and small
arms, killing one Peoples Action Team (PAT)
trainee and seriously wounding 5 others. Theore-
ticians in official VC journals chide workers to
sharpen the political struggle in order to obviate
the GVN rural pacification and resettlement plan.
5. A review of the rice harvest protection
operation undertaken in Phu Yen Province on 24 Jan-
uary, and still continuing, reveals demonstrative
gains. A three-district area around Tuy Hoa, the
provincial capital, has been denied to the VC, who
have depended on it for 10,000 metric tons of rice
annually. The rate of Chieu Hoi returnees is in-
creasing and the VC are hampered by food shortages.
National police, rural cadres and Peoples Action
Teams now are engaged in pacification efforts in
preparation for the resettlement of 30,000 refugees
in their home villages. MACV reports that the VC
still control 80 percent of the hamlets in Phu Yen,
and that the Communists have effectively impeded
the new-life hamlet program there. A captured
document, passed down from VC Military Region V,
reveals that the Viet Cong had begun a campaign
in late 1964 for control of the rice-producing
lowlands of Phu Yen.
6. Returnees (Chieu Hoi). The February total
of 2,011 returnees surpassed the previous high of
1,672 for January. Approximately 40 percent of the
returnees came from Binh Dinh, Phu Yen, and Tay Ninh
provinces, where significant military actions have
taken place recently. The State Secretariat for
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Approved For Release 2004/07/16 : CIA-RDP79T00826A000400010069-6
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SOUTH VIETNAM BATTLE STATISTICS
5 - 12 MARCH 1966
Total Personnel Losses SECRET
(Killed in Action, Captured or Missing in Action, excluding Wounded in Action)
US only
US Combat Casualties in Vietnam
(including North Vietnam)
Cumulative. 1961-1964
255
Cumulative, 1965
1365
Cumulative, 1966 to date
877
TOTAL
2497
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1524
6110
4461
12095
12
136
24
172
I APR 1 MAY 1 JUNE I JI> 1 AEI PI C7 JAM FE A 1
Total Friendly Forces Personnel Losses
(US/GVN/Other Free World)
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SOUTH VIETNAM BATTLE STATISTICS
Viet Cong Incidents
Attacks Terrorism = Sabotage Propaganda = Antiaircraft Fire
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OCT NO DEC JAN FEB MAR
Viet Cong Attacks
Weapons Losses
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