THE SITUATION IN SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A002300260001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 16, 2016
• Document Release Date: July 28, 2005
• Sequence Number: 1
• Publication Date: July 10, 1967
• Content Type: IR

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Secret
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C6
Intelligence Report
DIRECTORATE OF
INTELLIGENCE
The Situation in South Vietnam
(Weekly)
Secret
143
10 July 1967
No. 0358/67
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DECLASSIFICATION
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
THE SITUATION IN SOUTH VIETNAM
(3 July - 9 July 1967)
Land reform; Revolutionary Develop-
ment Cadre highlights; Refugees;
"New Life Development" activities.
Prices; Currency and gold; Rice
deliveries and stocks; Saigon
electric power failures.
ANNEX: Weekly Retail Prices in Saigon (table)
Saigon Free Market Gold and Currency Prices (graph)
Rice Deliveries from the Delta to Saigon (graph)
Saigon Cost of Living Index (graph)
South Vietnam Money Supply (graph)
South Vietnam Foreign Exchange Reserves (graph)
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Developments in Legislative Elections,
12. Sixty-four senatorial slates, including 640
candidates and 81 alternates, had been submitted to
the Provisional National Assembly (PNA) by the filing
date of midnight 30 June, The central election coun-
cil set up to oversee the senate elections will begin
examining dossiers of the candidates on 8 July. It
is possible that several of the lists will be with-
drawn or will be eliminated after review by the elec-
tion council.
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14. At its session on 4 July the PNA fixed the
minimum membership of the lower house at 121 deputies.
As in the 1966 elections, each province and autonomous
city will constitute a single constituency, with the
exceptions of Saigon--which will be divided into three
electoral districts--and Gia Dinh Province--which will
have two. Some districts will have more than,one seat,
depending on their population, and any constituency in
which the number of registered voters has increased by
more than 25,000 since the 1966 elections will have an
additional seat.
Government Moves Against "Peace" Candidate
15. The government apparently has layed the ground-
work for the disqualification of Au Truong"Thank, the
self-styled."peace candidate in the presidential elec-
tion. A formal complaint was filed against Thanh on 6
July bya National Assembly deputy closely associated
with the , ruling. Directorate. The 'complaint, which was
given substantial publicity, in. Saigon this weekend, al-
leges that Thanh has a long history of association with
pro-Communist activities: It.charges that Thanh's tenure
as minister'for national'economy was spent implementing
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"Marxist-Leninist" policies in an effort to sabotage
the nation's economy, and calls for his disqualifica-
tion under the provision of the election law that
disallows the candidacy of anyone who "directly or
indirectly... worked in the interest of Communism."
16. The government also moved to discredit Thanh
by linking his name to the recent arrest of allegedly
pro - Viet Cong intellectuals in Saigon. The arrest
of the intellectuals, who apparently were associated
with the Intellectual Proselytising Section (IPS) of
the Saigon Communist organization, was announced by
the police at a press conference on 7 July. A police
spokesman asserted that Thanh and several other well-
known politicians would have to answer for their roles
in the IPS.
17. A number of Thanh's former associates are
now taking pains to disassociate themselves from him,
and there is a widespread sentiment in the National
Assembly and among the military that Thanh has gone
too far in pushing his "peace at any price" line. The
tiS Embassy believes that the government's campaign
against Thanh is also meant as a warning to other pres-
idential and assembly candidates that discussion of the
peace issue must be kept within acceptable limits.
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II. REVOLUTIONARY DEVELOPMENT
The Government of Vietnam since the
beginning of 1967 has distributed more than
70,000 permanent land titles to farmers.
This activity in combination with other
GVN-sponsored land reform projects is in
part calculated to reap immediate short-term
political advantages as well as longer range
economic benefits. Revolutionary Develop-
ment cadre efforts continue to meet with
varying degrees of success in several widely
scattered parts of the country. The reset-
tlement of some 7,000 persons currently
underway in Pleiku Province is now 80 per-
cent complete. The newly settled areas
are, however, already showing signs of Com-
munist penetration. In Saigon, a pilot
program of free medical service for the
needy was scheduled to being last month
and it is hoped to expand it into the prov-
inces during July.
Land Reform
1. US officials in Saigon have reported that
the Government of Vietnam (GVN) has distributed more
than 70,000 permanent land titles since 1 January 1967.
These permanent titles replace temporary land-owner-
ship certificates issued during the Diem regime and
have been issued by the GVN to farmers cultivating
former French lands and lands seized in 1956 under
Ordinance 57. Permanent land titles have reportedly
been issued in cases where full payments for the
land have not yet been made to the government. The
title holders are, however, still liable for the
payments due.
2. Two recent decrees are concerned with re-
structuring the land tenure system. One, a decree
of 19 May, clarifies the status and policies of the
government relating to lands distributed to people
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by the Viet Cong but which since have come under
government control. The second forbids either land-
lords or government officials from using the Viet-
namese military to collect back rents on these
lands. In most cases the collection of back rents
on the redistributed lands has been suspended by the
government.
3. Major problems and inequities which continue
to plague the rural areas include: the violation
of tenant-landlord contracts, and terms of tenure re-
lationships; a biased or inadequate village adminis-
trative authority to cope with land disputes; exces-
sive landlord influence on village affairs; and
the problems caused by the Communist land distribu-
tion and taxation systems.
4. The basic legislation for the redistribu-
tion of land in Vietnam--Ordinance 57--was written
in 1956. This legislation limited riceland holdings
to 247 acres per landlord and an additional 37
acres was allotted for burial purposes. Provisions
were made in the legislation to provide payments to
landlords for land expropriated under these laws.
Of the approximately 772,000 acres seized under
Ordinance 57, 615,000 acres were redistributed.
Much of the remainder of the land is in insecure
areas and no actions have been taken concerning this
land.
5. Land reform projects currently sponsored
by the GVN are directed toward the redistribution
of land and rent controls in order to achieve an
immediate political return and some long-term
economic benefits. By giving the farmer a firm,
permanent title, the government hopes to induce him
to invest labor and capital in the land in order to
raise production above a marginal level and create
an agricultural surplus.
6. One of the programs to strengthen land
tenure is being tested in the An Giang(Province)
Priority Area. In this area, aerial photos are being
taken of the entire province and maps of land hold-
ings are being made from them. This method offers
speed, accuracy, and security since little work needs
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to be done on the ground. A title produced by this
process contains a description of the land and a
photo of it, and since the titles are easily repro-
ducible, copies may be given the owner as well as
filed centrally. This program has suffered from
technical problems, however, and 70 percent of the
aerial coverage done thus far must be reflown.
7. Although accurate statistics on rural
affairs are not available, USAID has made the follow-
ing estimate of the percentage of farmers by tenure:
Tenure
Southern
provinces(%)
Central low-
land provinces(%)
Owner-operators only
23
29
Operators with only
rented land
47
11
Operators with both
owned and rented land
30
60
Revolutionary Development Cadre Highlights
8. In an attempt to eliminate corruption found
in his area of operations, the leader of an RD team
in Chau Doc Province provided provincial authorities
information on the illicit activities of the chief
of the village in which his team was operating. The
village chief had been using the local Popular
Forces, to terrorize the local residents, collect
illegal taxes, and unlawfully seize private property.
9. In an effort to stop the RD team's investi-
gation of these activities, the village chief had
gone so far as to have two of the villagers who had
been cooperating with the team killed. Provincial
authorities had been reluctant to take any actions
against the offender but--when faced with evidence
of the murders and with the threat of the resigna-
tion of the RD team leader--finally jailed the
village chief on murder charge. The team leader is
continuing to investigate the villagers' charges of
corruption against colleagues of the village chief
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who are still in office. The province chief--al-
though commending the RD team leader for his ac-
tions--has warned him of "danger to his personal
security."
10. In Binh Dinh Province on 14 June two
RD teams--recent graduates of the National Training
Center--moved into two hamlets in the southern part
of the province where the Communists in 1964 had
forced the majority of the local residents to
leave. The arrival of the RD teams was soon followed
by the return of approximately 1,200 former in-
habitants of the area. In addition, an estimated
600 residents from nearby hamlets have temporarily
resettled in the two hamlets for security and have
indicated that they will return to their native
residences when RD teams are available to help them
reestablish their hamlets.
11. Elsewhere in this province, an RD team
operating in Phu Cat District enlisted the support
of the US engineer battalion to blast rock needed
to build a dam being constructed under the self-
help program. When the US unit first arrived they
had to do all the work themselves; soon, however,
the villagers and RD cadre had taken over the
manual labor while the engineers provided only
technical guidance. This joint venture reportedly
has generated more cordial relations between
villagers, RD personnel, and US troops in the area.
12. In Vinh Binh Province four RD teams have
been working in what were Communist-controlled
areas of Cang Long District since February 1967.
At the end of May the teams began to discern signs
that they had finally begun to overcome the people's
apathy and distrust. The teams have been able to
stimulate the people to commit themselves to work-
ing on a variety of programs designed to improve
hamlet life and have enrolled large numbers of the
children in government schools. In adjacent Tien
Can District, RD teams have helped newly resettled
families--who in the early part of the year had
left areas under enemy control--to build approximately
400 new homes for themselves.
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13. In Phuoc Tuy Province, the Provincial
Intelligence Officer--using intelligence furnished
by an RD team operating in one of the villages--
apprehended 17 members of that village's chapter of
the "Liberation Women's Association." The suspects
have been sent to the Provincial Interrogation
Center.
14. In Khanh Hoa Province the RD Control Com-
mittee has initiated a series of broadcasts from
the Nha Trang radio station stressing the importance
of RD work in the province and citing examples of
the people's participation in RD efforts. This is
one of the first reported instances of a provincial
control committee taking advantage of the local
radio station to promote its RD effort. Similar
promotional work needs to be done by Vietnamese
officials throughout the country in order to
explain the goals and achievements of the RD pro-
gram to the local populace.
Refugees
15. The Edap Enang highlander resettlement
project in Pleiku Province which has as its goal
the resettlement of approximately 7,000 people is
now approximately 80 percent complete. When the
project is completed, approximately 1,200 families
will have been moved from the.Pleiku-Cambodia border
areas and resettled along Highway 19 east and
south of the city of Pleiku. The movement of the
people is the responsibility of the US 4th infantry
Division, with Civil Operations and Revolutionary
Development Support (CORDS) and the GVN's Special
Commission for Refugees (SCR) providing the person-
nel and resources to assist the montagnards in
resettling. The security of the resettlement area
is being maintained by a Vietnamese Ranger battal-
ion, two Regional Force companies, and two Popular
Force platoons.
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16. As of the middle of June over 5,600
people--residents of 44 of the 51 hamlets scheduled
for resettlement--were evacuated from their previ-
ous residences with the majority of the people
electing to relocate in the new areas. Within the
resettlement areas construction has been completed
on 439 new homes while 782 are still being built.
There are indications, however, of Communist
penetration of the resettlement area. On at least
four occasions in May large numbers of highlanders
were cajoled or pressured into abandoning the re-
settlement area by Communist cadre. One of the
prevalent propaganda themes of the Communists is to
circulate among the highlanders rumors that the US
forces do not have enough rice to feed them and
that all US forces will soon be leaving Pleiku
Province.
17. in Phu Yen Province work has begun on
approximately 1,163 self-help homes for refugees.
The SCR has announced that it will pay a second
resettlement allowance to previously resettled
refugees who are constructing new homes for them-
selves and, in addition, the SCR will provide these
people with seed and farm land. The progress made
so far in 1967 in the Phu Yen refugee program is
encouraging; in 1966 provincial activities were
catagorized by US advisors as "stagnant."
"New Life Development" Activities
18. The Vietnamese Mutual Assistance Associa-
tion, a voluntary organization, in cooperation with
the Ministry of Social Welfare is making plans to
provide free medical check-ups and treatment to the
needy. Approximately 300 civilian and military
physicians have volunteered to participate, and
pharmaceutical companies in Saigon have agreed to
contribute drugs valued at over 500,000 piastres.
The program was scheduled to begin in Saigon at the
end of June and expand into the provinces during
July. Needy persons seeking medical assistance
under this new program have to contact their pro-
vincial social welfare center to obtain examination
tickets.
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After having shown a slight decline
each week since 29 May, the retail price
index for Saigon was unchanged during
the week ending 26 June. Currency and
gold prices were mixed on 26 June. The
rice situation in Vietnam continues to
improve. According to an agreement
signed by the GVN and USAID on 29 June,
Saigon electric power generation and
distribution facilities will be doubled
during the next four years.
1. After having shown a slight decline each
week since 29 May, the sampling of Saigon prices on
26 June used in the USAID retail price index showed
no change from the previous week. The price of the
grade of rice consumed by the working class has held
steady since 12 June at 24 paisters per kilogram.
During the week ending 26 June pork and chicken. prices
fell, but the price of fish increased 12 percent.
Prices of charcoal, firewood, and calico declined
slightly, while prices for all other nonfood items
were unchanged. (A table of weekly retail prices
in Saigon is included in the Annex.)
2. Wholesale prices for selected US-financed
imported goods fell about seven percent during the
week ending 27 June, bringing the price index for
imported goods to its lowest level since December
1966. The sharp decline was largely the result of
much lower prices for galvanized iron sheets, new
stocks of which were released to dealers by the GVN'
thereby alleviating a shortage which has existed for
several months. Fertilizer prices continued to fall
and the prices of all types used in the index are
now down to the new official levels.
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Currency and Gold
3. Currency and gold prices were mixed on
26 June. The price of dollars and MPC (scrip) each
rose two piasters above the level of 19 June to
158 and 113 piasters per dollar, respectively.
The price of gold, on the other hand, fell two
piasters to 195 paisters per dollar. (A graph on
weekly and monthly currency and gold rates is in-
cluded in the Annex.)
Rice Deliveries and Stocks
4. According to the latest statistics pre-
pared by the US Mission in Saigon, the rice situa-
tion in Vietnam continues to improve. Despite a
low level of deliveries from the delta, stocks are
rising rapidly because of the arrival of imported
rice. Deliveries of rice from the delta to Saigon
(see graph included in the Annex) amounted to only
125,600 metric tons during the first five months of
this year compared with 164,000 tons and 225,600
tons during the corresponding periods of 1966 and
1965, respectively. It is estimated that total de-
liveries during 1967 will amount to about 233,000
metric tons, or 28 percent below deliveries in 1966.
Imported rice, however, has been arriving in ample
quantities. During Janaury-May imports totaled
374,964 metric tons, of which 27,862 tons came from
Thailand, 21,250 tons from Taiwan, and the remainder
from the US. As a result of the high level of im-
ports, stocks of rice held by the GVN in Saigon
and the rice-deficit provinces and stocks held by
private dealers in Saigon amounted to 161,742 metric
tons at the end of May compared with 36,199 tons
at the end of February.
Saigon Electric Power Facilities
5. According to an agreement signed by the
GVN and USAID on 29 June, Saigon electric power
generation and distribution facilities will be
doubled during the next four years. USAID will
grant $32 million and the GVN will contribute about
one fourth of that amount for the procurement and
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installation of two 66,000-kilowatt generators. In
return for the USAID grant, the GVN has agreed to
carry out US recommendations to establish a new,
independent and self-supporting public power com-
pany, which will operate the new plant as well as
the facilities now run by a French-owned company
whose franchise expires at the end of this year.
The new company, which will absorb all other public
electric facilities in the Saigon area, presumably
will be managed by US experts until Vietnamese per-
sonnel can be trained to take over. Design engineer-
ing on the new project is to begin by 1 October and
facilities are to be completed in 1971. Officials
believe that the new facilities will provide suf-
ficient power for industries and homes constructed
during the next four years and expect that con-
sumer rates can be reduced by the time the installa-
tion is completed.
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Weekly Retail Prices in Saigon a/
13 June 3 Jan. 5 June 12 June 19 June 25 June o
1966 b/ 1967 1967 1967 1967 1967
0 Index for Food Items
P -
(n
U)
~m
[)
(In Piasters)
190
-0 0,
Rice-Soc Nau (100 kg.)
Cr1 Pork Bellies (1 kg.)
Q Fish-Ca '`re (1 kg-)
0 Nuoc Man (jar)
tz Index for Nonfood Items
C
W Of Which:
0 (In Piasters)
-C Firewood (cu. meter)
Cigarettes (pack)
White Calico (meter)
Kerosene (liter)
1,250
9o
130
70
225
11
0
Pi
271 269 267 267 i?-
i~
295 293 294 c/ t7
En
.(D U]
1,700 2, 5 50 2,1+00 2, 4oo
130 150 160 170
150 160 16o 160
9o 150 150 150
144 195
360 560 550 600
10 14 14 14
27 33 32 32
7.8 10.5 10 10
a. Data are from USAID sources. For all indexes 1 January 1965 = 100-
b. Price level just prior to the 18 June devaluation.
c. Preliminary.
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2, )4oo
150
180 1" y
150 ;o
219 217 c/ a
C
In
m
S O
550 5)+0
14 14
34 33
10 10
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1964 1965 1966, 1967
us $10 MPC Military Payment Certificates (scrip).
26 1T
APR' 'MAY JUN
1967
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 AMX
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Saigon Cost o HOME dex
",. Wo, kingClass Famil
20d
Vietnam
i tna.~m
Supply
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Thousands of
Metric Tons
MAY
22.3
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Saigon Cost': of Living Index *
(For Working Class Family)
MILLIONS OF US DOLLARS
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Secret
Secret
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