THE PRESIDENT'S DAILY BRIEF 23 AUGUST 1971

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005992819
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: August 23, 1971

Declassified in Part - Sanitized Copy Approved for Release 2016/06/14 : CIA-RDP79T00936A009800190001-9
The President's Daily Brief
23 August 1971
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THE PRESIDENT'S DAILY BRIEF
23 August 1971
PRINCIPAL DEVELOPMENTS
Vice President Ky's decision not to campaign again
threatens to make a mockery of the South Vietnamese
presidential elections. (Page 1)
The new Bolivian Government, headed by retired Colonel
Banzer, will abandon the leftist policies of the Torres
regime and chart a course of moderation in domestic
and foreign affairs. (Page 3)
Hectic and confused trading conditions are expected
as major money markets open this morning, but central
banks in most countries intend to intervene firmly to
prevent further substantial appreciation of their re-
spective currencies vis-a-vis the dollar. (Page 4)
Peking's low-key denunciation of? the US dual repre-
sentation proposal serves to remind the international
community of China's terms for joining the UN. (Page 6)
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SOUTH VIETNAM
Vice President Ky's decision not to cam-
paign in the October presidential election
again raises the spectre of an uncontested
travesty. Ky may have concluded that the
odds were stacked too heavily against him
to allow a respectable showing. Even in
a relatively honest election, his inade-
quate financial support, the dearth of pop-
ular appeal for his candidacy, his north-
ern background, and his role in suppressing
the Buddhist protest movement in 1966 all
would have lessened his chances of mount-
ing a strong challenge to Thieu.
Ky delayed his decision in order to sound out
various political and religious groups, and he may
have been discouraged by their reactions. Follow-
ing an earlier press conference, two of Ky's aides
told embassy officials that the attitude of the An
Quang Buddhists would be a decisive factor in Ky's
decision.
In view of the An Quang leadership's re-
luctance openly to endorse Big Minh, whose
defeat they felt would then hurt their own
political options, it is unlikely that they
would have given much encouragement to an-
other sure loser?and especially to the
man who crushed their protest movement in
1966.
Ky's proposal--allowed by the constitution--
that he and Thieu resign and permit the Senate chair-
man to assume control of the government and call for
new elections is a possible way out of the present
imbroglio. Thieu, however, has all along taken a
relatively complacent attitude about the possibility
of a one-man race and has suggested that the elec-
tion could be a referendum on his policies.
The widespread criticism of Thieu's methods
following Minh's actual withdrawal will no
doubt continue in an even stronger fashion
now that Ky has also backed out. Nonethe-
less, Thieu is most unlikely, to be willing
to relinquish control and thus probably
will conclude that it is better to ride
out the storm rather than risk the uncer-
tainties of an interregnum period and new
election.
(continued)
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? Attacks by North Vietnamese forces along the
Demilitarized Zone eased up this weekend, but there
are fresh reports that a new round of Communist mil-
itary activity and political agitation is scheduled
for sometime this week. Intercepts indicate that a
Viet Cong unit in the north of the country has been
ordered to "create tension and discord," starting
on 24 August, and that some unidentified units have
moved into the area north of Saigon; agents also re-
port that the Communists plan attacks in the central
highlands. The Communist actions apparently are in-
tended to embarrass the government on the eve of the
Lower House elections next Sunday; there is no evi-
dence they involve large-scale military operations.
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FOR THE PRESIDENT ONLY
BOLIVIA
The new government Zed by retired Colonel
Hugo Banzer is-avowedly anti-Communist and
will reverse the leftist policies of the
Torres regime. A political conservative,
Banzer probably will adopt a moderate na-
tionalist stance while remaining receptive
to foreign investment.
The government's control is firm but it is
likely to experience many strains in its
formative period. Banzer is inheriting a
chaotic financial and political situation.
The old hatreds between the military, who
are likely to be the leading force in the
coalition, and the two political parties
that participated in the coup are strong.
Moreover, past bitterness between the mod-
erate leftist National Revolutionary Move-
ment (MNR) and the moderate rightist Bo-
livian Socialist Falange (FSB) may make
it difficult for them to cooperate in the
new government.
Banzer, at least initially, probably will
receive strong support from leaders of
the private sector who provided financial
backing for the coup. Other governments
in Latin America, concerned by Bolivia's
leftist drift under Torres, will extend
moral support, if not rapid recognition.
Late yesterday Banzer appointed most of his
cabinet, which appears to be evenly split between
the MNR and the FSB. The foreign minister, Mario
Gutierrez, is a respected member of the FSB. Fi-
nance Minister Raul Lema, an MNR leader, served in
the government of President Paz Estenssoro in 1964.
Most of these individuals, as well as some of the
key military figures, appeared before a mass rally
in La Paz late yesterday afternoon. Banzer himself
was given an animated reception by the crowd.
All organized resistance has ended in La Paz
and the interior, although armed civilians are still
at large. Some sniping, looting, and terrorist ac-
tivity remains a possibility in coming days. In ad-
dition, leftist organizations have called for a gen-
eral strike, according to press reports.
The government faces a difficult problem
in working toward restoring a degree of
harmony among contending political groups.
The bitterness and violence of the recent
period could continue if the new adminis-
tration indulges in repressive action
against the left.
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FOR THE PRESIDENT ONLY
INTERNATIONAL MONETARY DEVELOPMENTS
The European Community's failure last week to
come up with a common policy can be attributed in
part to personality clashes between the German and
French finance ministers, according to sources of
the US Mission to the EC. Although doctrinal dif-
ferences and inadequate preparation were also im-
portant factors, the personal antipathy between the
two made positions more rigid and brought about mis-
understandings. Most of these sources, while not
"wildly optimistic," nevertheless do not rule out
the possibility that the EC Council may move toward,
and perhaps achieve, a common position at the 13
September council meeting.
When most foreign exchange markets open today,
trading conditions are likely to be hectic and con-
fused because of the backlog of foreign exchange
transactions and the diverse trading arrangements.
However, the various central banks are expected to
intervene both to inhibit fluctuations and prevent
any substantial appreciation of their currencies
vis-a-vis the dollar. The dollar is expected to be
devalued from two to ten percent in the various West
European markets.
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EGYPT-USSR
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FOR THE PRESIDENT ONLY
NOTE
Communist China.- US - UN: Peking's denuncia-
tion of the US "dual representation" proposal repre-
sents Communist China's official response to Wash-
ington's inscription of its proposal on the General
Assembly agenda. The statement, issued by the For-
eign Ministry on 20 August, is primarily a low-key
exposition of Peking's position. It accuses the
United States of pushing a "two Chinas" policy,
firmly declares this is totally unacceptable to the
Communist government, and reiterates that the main-
land regime will not enter the UN unless the Nation-
alist government is first expelled. In setting forth
its position in these uncompromising terms, Peking
probably hopes to convince wavering states that no
deal on the representation issue was reached with
Dr. Kissinger last month and that passage of the US
resolution would keep the mainland out of the UN for
at least another year.
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Top Secret
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