LETTER TO MR. RICHARD HELMS FROM ALVA R. FITCH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R000500060014-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 15, 2016
• Document Release Date: October 8, 2002
• Sequence Number: 14
• Publication Date: February 23, 1966
• Content Type: LETTER

Approved For Flea ell'rt2~z : CIA~Bb~d~1'~7E3R00050006001
S-18/DD
Mr. Richard Helms
Deputy Director
Central Intelligence Agency
Washington, D.G. 20505
DEFENSE INTELLIGENCE AGENCY
WASHINGTON, D. C. 20301
2.5 FEB 1965
l' L, ,fzje.radf,d at 12 'y'ear.
frR6Ip sP 2nfl2L W2 : CIA-RDP80B01676R00f15O0z0,PQ1Q.1,4-&t
SE C.O R
au;.cmatically declassifi: d
ORN
25X1
 SECRET lvc)i=nRi-
Approved For-l lease 2002/10/22: IA- Q000500060014-8
Sincerely,
ALVA R. FITCH
Lieutenant General, USA
Acting Director
2
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
SECRET NOFORN
 STAT Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80B01676RR0005000600
}f sL Ric?- . d-l!31 19
bard else
Daputy
Att u nts?
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060gg014-8
cc: 3+r. Car7er, SAVA RHelms/ecd - 21/2/66. Ori1 - ,$.see
ERV
Dear Joe t
the DIA TOM Chief for
1
of D `AMP.'2V to p pare DT A #a input. t s3
not only drafted a most useful oonU-Ibution but also
t t CAE 34tCV and obtained a s cable row.= of current
data frets lei.
I an attaching heravith a cow of the document that
a band wid brought In Lteut.nax t C
Lot
it .eon S i3 ng end a cam` or
ttal. The White House was very pied
leas asked that all hardo who psrtici-
X Should like to thank you for DT-A' a
8t that you ega"s onw appreciation to
I *nd , particularly,.
25X
 C- 2, ? ca,"' I)
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
20 February-1966
The Honorable Edmund'S. Muskie
Dear Senator Muskie:
At the request of dir. McGeorge Bundy, we have
prepared the attached memorandum for you setting forth the
evidence available on the military, political and psychological
returns realized over the past year from the U. S. investment
in Vietnam and, particularly, from the increase in our air
and ground force commitment which be an late last spring.
Though not a formal, coordinated paper, this
memorandum represents a joint effort which has profited
greatly from. the assistance of our intelligence community
colleagues in the Defense Intelligence Agency.
We hope the information provided will be of assist-
ance.
Sincerely yours,
7s/ Ric"---,,-l,d Helms
Picha.rd helms
Acting Director
Attachment
Memorandum
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
21 February 66
Mr. McGeorge Bundy
George A. Carver. Jr.
Return. on lava strment Memo
Attached is a revised draft of yesterday's
memorandum. The figures are as accurate as we
and D$A, in concert. can make them. You, of
course, are as familiar as we with the manifold
problems involved in ,nailing down statistics an
Vietnam.
Qa the 1966 Chteu ;Ho# statistics, page 7,
para. 2) we have simply adopted the figures in
para. 2 of Lodge's cable. though we can't support
them in Washington. The IT Mission in Saigon.
however, is better placed than we to,-know.
Furthermore, the 1, 600 figure for January is
already circulating In the press and eyebrows
would be raised if the President should give a
lower number.
The casualty figures in the same paragrsaph.
area the latest statistics DIA has.
GEORGE A. CARVER. JR.
Approved For Release 2002/10/22: CIA-RDP80BO1676R000500060014-8
 Approved For Release 2002/10/22: CIA-RDP80B0167 Rf _0 050006001
I
Z1 b'ebrwwy 1966
MEMORANDUM
SUBJECT: The Return on Our Investment: Demonstrable
Improvements in the Situation in Vistas"' since
the Spring of 1965
EFFECTS IN THE SOUTH
The US investment in Vietnam. particularly the sharp increase
in the US air and ground force commitment which began to reach Vietnam
in the late Spring of 1965. has produced a number of derwonstrable returns.
The most significant return, however, is the marked difference between
the situation. atmosphere. and trends eavideclkt prior to the massive US
input (i. e.. We last Spring) and the situation, atmosphere and trends
which are evident today. Last year, defeat was staring the GYM In the
fact; this year the military situation has been stabilized. confidence has
been regained. the GVN has markedly improved its military and political
performance. the attitudes of the South Vietnamese people have begun
to shift, and it is our adversaries who are beginning to have serious
doubts about the wisdom or probable success of their present courses
of action.
The Viet Cong insurgency is designed to create a politico-military
climate which will permit the establishment of a Communist government
in South Vietnam under North Vietnamese Communist control leading to
political control over the whole country by the North Vietnamese Communist
Party. Though portrayed publicly as an internal revolution, this Insurgency
Is directed and supported by North Vietnam. By the end of 1963. the Viet
Crag were optimistic about their chances of succeeding and had every
reason to be so.
From the Ap Bac battle in January l9 t,.3,, where the Viet Cong
fought for several days, to the widespread vargee of terrorism fallowing
Diem's downfall, the Viet Cong constantly i :proved their military and
political situation throughout the countryside. Viet Cong forces. bolstered
Approved For Release 2002/10/22 : CIA-RDP80B01676R000500060014-8
 Approved For Release 2002/10 2 : CIA-RDP80BO1674W00500060014-8
'by infiltrated troops, continued to expand and improve their capabilities
for larger scale rrailitary operations. Their rAllitary successes during
:1964 included gains in territory and population control in the coastal
,regions of lot and tad Corps (i. e.. the northern half of South Vietnam)
as well as the virtual isolation of government forces in many provincial
and district capitals. Similar but not quite s,o successful efforts were
made in the 3d and 4th Corps areas (the southern portion of the country
including the Mekong Delta). Fairly large scale operations involving one
or more battalions were carried out by the Viet Cong with relative impunity.
By the end of 1964. VC military gains coupled with their terrorism and
propaganda efforts. particularly among the rural population4 had given
them an aura of invincibility and convinced many Vietnamese. particularly
in rural areas, that a Cori muaist victory was inevitable.
The Viet Cong maintained their initiative and momentum during
the first half of 1965. They made great strides in force development
by infiltrating at least 5, 700 troops, including major elements of the
North Vietnamese 325th division, during this period. Local recruiting
within South Vietnam was stepped up, and newer and heavier weapons
were delivered in increasing quantities. They had repeated successes
on the battlefield which improved their image and damaged the morass
of the GVN and its supporters.
In a December 1964 battle with three Viet Cong regiments at
Binh Gia hamlet, southeast of Saigon. at least two GVN battalions--
including a general reserve unit--were put out of action. In large scale
attacks in February 1965, heavy losses were inflicted on government
forces in Binh Dinh Province. Similar Viet Cong victories occurred
in the Bay Gia battle in May and in the overrunning of Tou Morong and
Dak nut district towns in June and August. Serious disruptions of lines
of communication occurred-.,the central highlands were completely
isolated for extended periods--and the Viet Cong made appreciable
territorial gains. VC morale was high. the rural population was
intimidated and the VC found, it easy to gain now recruits.
By mid-year, government forces were finding it difficult
to stem the Viet Cong tide. The Aft.VN (South Vietnamese Army) was
being whipsawed and its reserves were stretched to the breaking point.
The Viet Cong had the capability of conducting multi-regimental sines
operations in three widely separated areas of South Vietnam while the
ARVN could react with sufficient force to cope with only one 'such. threat
Approved For Release 2002/10/22 : CIA-RD'80BO1676R000500060014-8
 Approved For. Release 2002/10/22: CIA-RDP80B0167F ,000500060014-8
at a time. In the Spring of 2965. the Viet Cong had a major campaign
prepared designed to control major areas of the highlands. to cut up
South Vietnam. and separate the Binh Dinh-Quang Ngai area from the
western Pleeik i area.
These plans, however, were foiled and this Viet Cong drive
was blunted. Viet Cong gains were hatted by the massive use of air
power, of a type made possible by the introduction of faster-reacting US
jet aircraft, and aggressive friendly ground actions'. made possible by
the reixesivee mid-year introduction of US combat troops.
By the late summer of 1965, the initiative had begun to shift to
the US-supported GYN. Slowly but surely the GVN began to gain a momentum
of its own--the number of Cor::munist successes declined and there were
some important government victories. Severe Viet Cong losses accrued at
Doug Xoai in June and at Bu Dop in July, and the siege of Due Co was broken
in August. Major US contributions were the victory south of Chu Lai in
August, the opening of Route; 19 from (ui Nihon to An Kher, the successful
resupply of Ploiku, and the destruction and harassment inflicted by increased
air strikes. These successes, followed by a decline in the tempo of Viet
Cong activity. allowed the govern.-cent to gain a semblance of political and
military equilibrium by early Fall.
Since the all of 1965. US forces have increasingly moved out of
their base perimeter areas to conduct search-and-destroy operations
against Viet Cong main force units in their previously sacrosanct base
areas. In November, for e:r:ar,:--ple, US let Cavalry Division (Airmobile)
troops inflicted over 1. ZOO casualties on three North Vietnamese regiments
in the la Drang Valley area ,of western Pleiku province in the Central High-
lands. Prisoners captured froux t :,esee units in the same area during an
operation in January 1966 Claimed that their units had not yet received
replacements for their losses (in either men or materiel) and were not yet
ready to resume large scale operations.
Since the end of 1965, the rate of Large, scale Viet Cong attacks
has been declining. even though there has been some increase in the total
number of armed attacks. Large scale attacks--regimental level--declined
from four in November to one in December and none in January. Battalion
strength attacks declined from 8 in November to 7 in December and sharply
dropped is January to 3. Ilioreoveer, since the la Drang battle in November,
there has been a general tendency for Communist units to avoid large-scate
engagements with US and South Vietnamese forces.
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Rgase 2002/10/22 : CIA-RDP80B01676500060014-8
A much higher rate of harassment against Communist
forces is now possible and is now being sustained, both in the form
of B..SZ Stratofortress air strii:as on previously inviolate Communist
base areas and in the form of c eratiors on the ground. Recent GVN
and allied actions have taken the initiative and put the Communists on
the defensive, forcing them to abandon their own plans for attacking
at times and places of their choosing. Operation HARVEST MOON,
8-l9 December, in the luang Nam/Quang Tin border area. forced
two Communist regiments (one identified as North Vietnamese) to
defend themselves.
Operations JEFF ERSON and VAN I3UREN, which began
31 December in Phu. Yen Province. apparently disrupted the operational
plans of the 3d Viet Cong and 95th North Vietnamese Regiments, and
killed hundreds of Communist troops. Operation MATADOR. 4-18
January forced the 3Zd, 33d, and 66th North Vietnamese Regiments
In, Kontum and Pleiku Provinces to disperse. Operation MASHER-
WHITE WING, begun Z4 January, upset the plans of the North Vietnamese
lath and Quyet Tam Regiments, and the Viet Con; Zd Regiment in
northern Binh Dinh Province. Theme operations have inflicted almost
1, 600 casualties (ILIA) so far on the Communist forces. This type of
pressure will increase as the built-up allied forces consolidate
themselves and as experience is gained.
These harassing and spoiling operations which the US a
troop commitment now parr .*G the allied side to mount have unquestionably
disrupted Communist planning and thrown Communist forces off balance.
(Captured documents. for e;.ar.ple, indicated that the Communists
planned to end the recent Ts:t truce with a burst of activity. but their
plans were foiled by the offenvive operations the GVN and its allies
were able to mount.) Such ground operations, combined with the B.5Z
strikes and tactical air strikes against Viet Cong base areas, will-.
make It increasingly difficult for the Viet Cong and North Vietnamese
units to mass and retain the elements of surprise. There Is, of
course. no room for excessive .optimism. The Viet Cong are not
abandoning their previous strategy of progressing toward a more
conventional military force structure and, where favorable opportunities
present themselves. they will continue to attempt large scale attacks.
some of which will probably be successful. The increased US
presence. however, is making such attacks increasingly costly and
drastically reducing their chances of success.
Approved For Release 2002/10/2'`CIA-RDP80B01676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80BO16766RR000500060014-8
The over-all Improvement in South Vietnam's military posture
during the past year is reflected in a host of statistics. In 1965, the Viet
Gong lost about 35, 400 men? almost double their fatalities in any previous
year. Almost 24. 000 were killed in the last six months of 1965 along, The
South Vietnamese lost U. 250 killed last year. about 4. 000 more than i>ts many Communist weapons as in 1964. Toward the end of last year.
the ratio of weapons lost as between friend and foe favored the government
forces for the first time since. mid-1963.
Communist prisoners. defectors and captured documents all,
indicate that the events of the past year have had a demonstrably adverse
effect on Viet Coin morale and shaken confidence in ultimate victory
throughout Viet Cong ranks. Communist Party instructions issued In mid-
1965 stated that n.ajor succesL:ses, especially in the central highlands. were
a necessary precondition for a general offensive and uprising in 1966. The
Party warned that, otherwise, the war would become very protracted.
These successes did not materialize and hence the realization is grooving
throughout Viet Cong ranks that they are in for a long haul, a realization
which at least among some units has resultt:d in serious discouragement and
despondency. All available sources of information suggest that the Viet
Gong are being faced with a growing desertion problem among their own
troops and among the local citizens they rely on for various kinds of
support (e.g., porters).
Many VC captures have spoken of the large number of sick
troops in their units an ci the inadequate medical attention they receive.
Rice shortages have also been mentioned, especially in the Highland
Provinces. AU have spoken of the fearful effect of U'S/GVN air power and
artillery strikes.
Prisoners taken from the 2d battall on 33rd PAVN regiment
on 9 January stated that 50 percent of the soldiers have malaria,
Captive a from the .1-1-13 battalion state that the battalion has
many personnel AWOL. and many are stricken with malaria.
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Re .ease 2002/10/22: CIA-RDP80BO1676W00500060014-8
Prisoners from the 9th battalion l6th North Vietnamese regiment
state the 7th battalion of this regiment lost all. but 130 men during the attack
on the Phu Cu outpost in Se"itexxaber 1965. The remaining roan were formed
into one coupany and attached to the 9th battalion which had only two
companies remaining. No now personnel joined the 9th battalion during
the period Nover .ber 1965 to January 1966; `.while; in the Kim San area,
another battalion was reformed using VC from local force units..
Prisoners from headquarters cove-parry of the North Vietnamese
Cuyet Tam regiment stated that on many oc+u;:s,sions the regimental
headquarters had been forced to move almoat immediately afterr, being
set up, because of armed helicopter strikes? . These captives had the
specific mission of rounding up deserters and soldiers accidentally
separated from their unit. One prisoner stated that after the fighting at
Bong Son his regiment was to receive replacements from local forces.
On 8 February the regimental commanding officer Issued a command for
all units to disperse and go into the surrounding hamlets and act as guerrillas.
The diary of a VC captured on 1I January 1966 stated: "Have
spent four days in tunnel. .About 6 to 9 thou.tsand American soldiers were
in for a sweep-operation. The attack was fierce. in the last few days. A
number of underground tunnels collapsed. some were caught in them and
have not been able to get out yet. It is not kaowa what have become of
sisters Bta. Bay. Hong Hanh and Tau He in these tunnels. In their attempt
to provide security for the a,gency. Tam and Ut wore killed. Their bodies,
left unattended and deteriorated. have not been buried yet. In the afternoon.
one of our village emit members trying to stay close to the enemy for
reconnaissance was killed and his body has not been recovered... Oh!
' :that hard days, one has to stay in tunnels, cat cold rice with salt, drink
uztboiled water 1 However, one is free and fools at ease. "
A VC letter dated 20 September 1965 captured by the let Air
Cavalry Division in Binh Dinh Province stated: "There to an acute forced
labor shortage in the area. The local peo`l.'a morale is low. There has
been ineffective and poor perforn.ance of various echelons of cadre within
the area. Front Tina supply committees at district and village level area
ineffective; three rice mills were closed because of the inability of forced
labor to transport adequate amounts of rice, and finally. as a result of
repeated RVNAF and US sweep operations within the area. the over-all
picture is gloomy and the main objective (control of the highlands) bag
not been attained. "
4-
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For release 2002/10/22 : CIA-RDP80BO1676WO500060014-8
Another indication of declining Con-muuniat morale is the
fact that last year's returns from the government's psychological
warfare program, called "Clhieu Hoi" (rhymes with "you boy") or "Open
A.rmss, " are most impressive. This program is designed to entices both
civilians and military personnel from the Viet Cong to the government
side. All told, the Chicu Hai program brought in 42, 552 persons in
1965--about three times as , cony as in 1964. Even more to the point,
the number of returnees who could be identified as Viet Cong military
cdfectora was five times an auraerous--9, 472 in 1965 compare4 to 1, 943
in 1964. The defectors last year also included an appreciable nurmber?-
2,174--of "politis:;a1 cadres. " I. e., Viet Cong Bu6versive agents who
at least at one time were strongly indoctrinated Con=unissta.
Those losses to Viot Cong manpower through both casualties
and defectors are showing an, even greater increase this year. 6.230
Viet Cong/North Vietnamese soldiers can. be confirmed as having been
killed in the period I January through 19 February 1966. or 20 463 more
than the total killed (3.767) during all of January and February 1965.
As ,for defectors, there were 1.672 Viet Cong "returnees" during
January 1966, and 789 during the first ten days of February alone. as
compared with less than 600 during all of January and February 1945.
As the Viet Cong have continued to sustain, this heavy drain
on their u anpower, they have been forced to resort to increasingly
draconian means to meet their needs. The Communists have stepped
up their forced recruitment drives among the peasants, and only last
week issued a call for the creation of a combat support force--"youth
shock teams"-- utilising women as well as amen; The present forced
draft nature of Wet Gong recruitment is reflected in the appearance
in combat cA several recent occasions of a tremoly young and often
poorly trained South Vietnamese who state that they were impressed
into service. They also resort to youths recruited in North Vietnam
for Infiltration Into South Vietnam--often now draftees with minimal
training. Additionally, the introduction of regular North Vietnamese
adlitary units sattesb to the manpower proble;me of the Viet Cong.
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80BO167W00500060014-8
At the same time, the Viet Cong have imposed ever greater
financial burdens on the pea,sixute in areas under Communist control.
To help finance their aggreaeion, the Viet Cong have doubled and
even tripled their rate of taxation on the populace. Recent reports
list taxation rates this year oS 65174 and even 70%4 of the rice being
barveeted in Viet Conk,-held areas of the delta and central coast.
There are also reports, verified by Viet Cong prisoners, of growing
peasant recalcitrance at these levies on production. Where government
troops have moved in to drive out Communist units during the rice
harvest, such as in a major allied operation of the past several weeks
in coastal Phu Yen Province north of Saigon, a favorable peasant reaction
has been immediately apparent. Peasants in this long Viet Cong-held
area have been providing the government information on the location
and movements of the Communist troops in the province. The rural
population has shown itself increasingly inclined to support GVN and
allied forces (e. g. , by volunteering useful and accurate intelligence
information) in areas in which the peasantry has come to feel
relatively secure from Viet Cong retaliation. Captured Viet Gong
docents attest to this trend in their exhortations to Viet Cong cadre
to tighten up on local security.
The Viet Cong resort extensively to terrorism in their
effort to impose their will on the people in the countryside. Last year,
the Communists in South Vietnam killed 1, 695 civilians and kidnapped
12.780 more. These included 230 government officials murdered--
often in gruesome fashion--and 323 others kidnapped. This resort
by the Communists to such brutality against the Vietnamese peasant does not
square well with the Viet Cong boast that they have the support of the
people in a war against Saigon.
Moreover, the hug* influx last year of refugees from
insecure areas in the hinterland to government-held, territory be' oaks
efforts of the peasantry to get out from under the Viet Cong. Nearly
300, 000 such refugees have been officially tallied thus far. The bulk
of these--about 442, 500--are still living in temporary shelters
provided by the Saigon government with US assistance, but large
numbers have already been resettled and reintegrated into the national
social structure. From time to time, reface centers are the target
of Viet Cong terrorist raids which attest to Communist displeasure
at the outflow of such human resources from the areas they control.
Approved For Release 2002/10/22 4Z;IA-RDP80B01676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80BO1676.W 0500060014-8
Firm statistics cx"x2he degree of control exercised respectively
by the Saigon government and by the Viet Cong over the population of
South Vietnam are difficult to assess, particularly since "control" is
such a hard concept to define in measurable terms. However. the trend
is now running clearly, albeit slowly, in favor of the government.
Available figures (which are fairly reliable as ordor of magnitude
indicators) show that as of last December (1965), the government controlled
52.1% (7, 724, 200) of the 16.3 million population as against only 43%
(5, 944. ZOO) a year previous. The rural population under firm Viet Cong
control Increased slightly in the early part of 1965 to a high point of 24 Ps
(3, 600, 000) in 3uly; but by year's and. this figure had declined to Z2.7%
(3, 357. 400). The remaining 25. Zoo (3. $00. 000) of the population are
listed as residing in contested areas..
It is important to recognize that more than death and destruction
have been Invested In South Vietnam and that returns are being realized
in the improvement of the political We and physical well-being of our
allies as well as In the raialtiplication of problems for our adversaries.
I?esspits the ravages of the war in the countryside. our assistance
during 1965 enabled some 700. 000 South Vietnamese farmers to irrigate
and improve 6000 000 hectares (about Is 975, 000 acres), thus significantly
increasing the value of ;their land. Additionally, 33,042 peasants received
agricultural loans Indirectly financed by US assistance. In fiscal year 1965.
525 new rural wells were dug with our help. Since a crash program of
assisting South Vietnamese hcm1ets -tae smallest rural population unit--
in elementary education-was begun in 1963. more than 3. ZOO harslet class-
rooxmss have been built under the USAID prod;iram, more than 5.200 teachers
trained, and more than 7 million textbooks delivered. Another 7 million
books are already contracted for delivery. These figures do not include
16.000 harulet self-help projecto Initiated by the Vietnamese themselves.
List year, about 6.7 million Viet emcee were vaccinated
against small-pons: and cholera. diseases frequently of epidemic proportion*
throughout Southeast Asia. Vaccination of farm animals against disease
since 1963 has reduced outbreaks of epide :.i.cs in that period to only four.
with only 120 animal fatalities from disease. Rodent control programs saved
an extir ated 760 n zillion piasters worth of food crops last year alone.
US aid to South Vietnam's fishing industry has boosted the tonnage of catch
in 1965 to 360, 000 tone, compared with only, 52, 000 ten years ago. All of
these, and other US programs of assistance in agricultural extension, health#..
hou9sing, and education. are parr itting South Vietnam to continue to develop
and =ova forward despite the massive and continuing drain of the war on
its own resources.
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80BO167 1 p00500060014-8
Under the medical civic action program last year, over
four and a half million Vietnamese received medical treatment from
the US armed forces. There were more than 2400 military civic
action construction projects, such, as bridges? schools, road repairs,
and drainage controls. Units and individuals contributed to the
support of hundreds of orphanages, schools, and hospitals.
bays
An economic boom Aaccornpanied thjui, expansion of our
military effort. Planned US construction projects in South Vietnam
at year's end were valued at nearly $1 B ost. Petroleum eonsur iiptioa
rose from 250, 000 barrels in January ko more than I million per month
in }ecember.. Imports by ship into South Vietnam rose
jc per cent
vehil.e intercoastal shipping doubled, from the January/tonnage figure
of 'k5, 0.00. Civilian personnel working on military construction
projects totaled only a few thousand in January but were over 20. 000
at the end of the year. Measured against the ideological promises..,
and threats--of the Com=uaists, these are positive factors. Much
of this development has, of course, been forced-draft activity
Inspired by war and possessed of inflationary potential, but nevertheless
It has provided jobs, incomes and physical facilities where none
*.,dated before.
The Most significaeat return on the US investment of the.
,iaaasst year--and, In the final analysis, the most important one--hen
been its total political impact. Within South Vietnam the most marked
and hopeful development of the past year is an apparently growing
conviction among the populace --both urban and, especially. rural..
that the Viet Cong no longer are eertaiin, perhaps not even likely. to
emerge victorious. This more favorable public attitude, in turn,
has helped Saigon's military leaders provide the country with a
progressively greater degree of governmental stability and political
progress. Improvements in this area should not be over-stressed or
over-sold. but the definite bci; mg.s of solid iMprovmment have been
=ado.
Although there are still enormous problems yet to be
overcome, South Vietnam's leaders are steering a course which they
hope by the end of next year will bring national elections and the
creation of a democratic national assembly. These leaders-.who have
been in office for a longer period now than any government since
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For F ase 2002/10/22 : CIA-RDP80BO1676W0500060014-8
t iern*s overthrow--are-roes who represent a rising generation of
genuine nationalist elements,. Even before they took office they
showed an awareness of popular desire for social improvement in
South Vietnam. With our assistance and such programs as those
recently delineated at Honolulu. they are now able to hold forth, the
concrete prospect of social, and political progress and, at the same
time. make increasingly apparent to all the hollowneaa of false promises in
this sphere long made by Communist propaganda.
Approved For Release 2002/164f: CIA-RDP80BO1676R000500060014-8
 Approved For glease 2002/10/22: CIA-RDP80BO16764P00500060014-8
EFFECTS IN THE NORTH
The US/GVN air offensive against North Vietnam has been a
highly restricted campaign designed to minimize civilian casualties
while reducing North Vietnam's ability to support Communist activities
in South Vietnam. There are several positive indications that this air
campaign is producing concrete results.
The air attacks have been able to impose an increasingly high price
on the ZRV's support of the war in the South. The air attacks are also
a significant factor in keeping the morale and will to fight of South Vietnam
at a high level.
North Vietnam has been forced, by the air attacks, to forfeit an
increasing amount of foreign trade earnings=-some US$ six million in
1965. The DRV has lost almost 17 percent of its national bulk petroleum
storage capacity and over 25 percent of its electric power generating
capacity. North Vietnam has had to forego or postpone plans for orderly
economic development and to suffer increasing upheaval of industrial
output.' Reconstruction efforts have been hampered by difficulties in
allocating manpower. The regime is also meeting increasing problems
in the distribution of food. particularly to relocated elements of the
population and to large increments of workers detailed to reconstruction
and repair. activities.
The greatest brunt of the air attacks has been felt on the railroads
and highways used to support the logistic supply of the Communist forces
and to infiltrate PAVN forces into South Vietnam. Air attack alone
cannot completely stop this flow of men and supplies. But it can and has
disrupted this flow and made it a considerably more difficult and costly
process. Large amounts of manpower have been diverted from productive
employment to repair and keep open the linens of communication running
through the southern provinces of North Vietnam and Laos to South Vietnam.
Moreover, the DRV has been compelled to use night-time operations
only in the forward movement of men and supplies. This slows up u ove-
mont considerably. making the trip by truck from Hanoi to the South
Vietnam border almost three times longer. The Communists have also
been forced to expend much manpower and resources in constructing new
roads, by-passes. and other expedients to keep traffic moving in both
North Vietnam and Laos.
-12-
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
'ter,
Aiov
A final effect of the US/GVN air attacks is that they increase
the already heavy dependence of North Vietnam on Communist China
and the USSR. '4 hile the amount of their military and reconstruction
aid cannot be quantified precis oly. It creates an additional drain on the
economies of these two countries, particularly Communist China.
In a 3 February 1966 speech in Hanoi, Le Duc The--North Vietnamese
Lao Hong (Corrrauniet) Party Politburo member and the Chief of the
Party's Organization Department-admitted that some members of the
party apparatus have developed "erroneous thoughts and views" and
have made "an incorrect assessment of the balance of power between the
enemy and us. " The claimed, naturally, that such "erroneous thoughts"
were confined to "a small .uruber of comrades, " but the fact of internal
dissension within the Party itself would never have been publicly
acknowledged. even in this manner, if North Vietnams leaders did not
consider it at least potentially serious. What Tho obviously meant is
that the nature and size of the present joint US/GVN effort is beginning
to generate doubts even within the North Vietnamese Communist Party
itself about the wisdom of the intransigeant and militant policies of
Hanoi's leaders. The is telling us, in short, that present US policy
and the massive US investment of the past year are beginning to produce
exactly the kind of political results they were devised to create,
-13-
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 25X1 Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
Approved For Release 2002/10/22 : CIA-RDP80BO1676R000500060014-8
 Approved For Release 2002/10/22 : CIA-RDP80B01676R000500060014-8
e Agency
D. C. 20301
, aad I am
6~-/.P/.
copies of *e *am* c nts. a is, of course,
a ropreaeeta#vet to any trtppai ite Dr eg.
wall be in
. In the may nit e I WOUl4 appreciate
w q portinout news that may, cone fro: rm Parts.
.31CIo ureo (2)
NIPE: TAP:drm
Distribution:
Original and 1 w/encls. - Addressee
1'w/o ER
1 w/o
1 w/o -? NIPE chrono
1 w/o ? TAP chrono gf- Es?~rrp ?+
Approved Fqr Rise 200214}~8~71 8#