THE PRESIDENT'S DAILY BRIEF 16 MAY 1969

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005976777
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 8
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: May 16, 1969

Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDh9T00936A007100130001-4
The President's Daily Brief
_16 May 1969
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FOR THE PRESIDENT ONLY
MAJOR PROBLEMS
VIETNAM
The Vietnamese Communists are being cautious in their
initial reaction to the President's speech. A proforma
denunciation of the proposal for 'a mutual troop withdrawal
was made by a Liberation Front spokesman in Paris but this was
apparently intended to buy time while the entire package was
studied in Hanoi. Radio Hanoi did not comment in the first
24 hours and the head of the North Vietnamese delegation in
Paris cancelled a scheduled public appearance 'in Sweden, prob-
ably to participate in consideration of the content and for-
mat of the official response. First reactions from the rest
of the Communist world have been perfunctory and limited to
the press; more authoritative reaction will await further
study and a cue from Hanoi. Predictably there has been no
reaction from Peking.
Most South Vietnamese political figures echoed President
Thieu's prompt endorsement,Of the speech and the Proposal
for mutual troop withdrawals Was received enthusiastically.
The press in Western and uncommitted countrias, as well as
the governments,, h sbeen studying the speech and editorial
comment is still sparse.
The tempo of enemy-initiated military activity continued
to decline and was at a lower level today than yesterday.
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Soviet FOXBAT Interceptor Believed in Limited Production
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Length
Span
Gross weight
Combat radius
Maximum speed
Combat altitude
ceiling
Armament
65 feet
44 feet
65,000 pounds
420-800 nm*
1700 knots
75,000 feet
13,200 pounds
*Range varies with armament, speed, and altitude. External fuel
tanks may add 160 to 300 more miles. ?
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FOR THE PRESIDENT ONLY
EUROPE
An early resumption of the run on the mark is a strong
possibility. Although Bonn's proposed measures to counter
speculation are virtually certain to be approved by the
Bundestag, failure to present a more credible package re-
flects a deep division in the governing coalition. The
relatively small outflow of foreign funds this week suggests
that big speculators remain convinced that Bonn will have
to revalue eventually.
The anemic domestic restraints announced by the govern-
ment are not likely to slow down the rapidly developing do-
mestic boom. More severe deflationary measures, however,
would inevitably increase the already excessive foreign
trade surplus and choke off some of the exports of long-term
capital that have thus far balanced the foreign accounts. It
is thus probably.only a question of time before the author-
ities will have to resort to revaluation as the sole remaining
alternative to severe domestic inflation, a prospect even more
distasteful to the population than'revaluation.
SOVIET AFFAIRS
Eight "Foxbat" fighters were seen in satellite photography
of a week ago at the airframe plant in Gorkiy. This would in-
dicate that the aircraft is now in limited production--not un-
expected in view of the extensive testing which took place dur-
ing the past year.
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FOR THE PRESIDENT ONLY
The Foxbat, one of the largest fighters the Soviets have
developed, holds world records for speed and altitude. It
probably will be used as an interceptor, tactical strike and
reconnaissance plane. It is the most expensive fighter that
the Soviets have produced and may be delivered to operational
units more slowly than other models.
MIDDLE EAST
U Thant is considering setting up a special three-man
team to study the refugee question, as a companion effort to
the four-power search for the outlines of a peace settlement.
He mentioned Robert McNamara as a possible US member. Thant
thinks a resettlement plan might be built around a long-range
economic development program which keys development to absorp-
tion of refugees. In any event, he believes it would be un-
realistic to expect Israel to take back all the refugees.
OTHER IMPORTANT DEVELOPMENTS
MALAYSIA
Despite heavily reinforced security forces, the situation
in Kuala Lumpur and vicinity remained tense today. Numerous
large fires were seen as of noon (local time) and new ones
were being reported at the rate of several an hour. There was
also scattered gunfire and a tear gas barrage. Prime Minister
Rahman is said to have left for the State of Malacca, where a
continuous curfew has been imposed but there is no information
of a worsening situation.
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FOR THE PRESIDENT ONLY
Yesterday, Rahman, blaming Peking for much of the
trouble, announced plans for a "national defense force" and
invited youth to join "the forces to defend the country
against the terrorists." This scarcely veiled call for
Malay vigilantism will cause new apprehension among the Chi-
nese, who know that to the Malays, "terrorist" means Chinese.
Furthermore, the suspension of the elections in East
Malaysia (Borneo) raises the possibility of disorders spread-
ing to that area. Their outcome would not in any event have
affected the government party's majority in parliament, and
their postponement will merely fan already strong sentiments
for autonomy, particularly in Sarawak.
IRAN-CONSORTIUM
Iran has accepted the consortium's package proposal of
about $930 million in oil revenue and about $80 million in
an interest-free advance payment. This adds up to a little
more than the $1 billion the Shah had demanded for the year
which began on 21 March. The advance payment is to be re-
paid next year, but the consortium has agreed to consider
similar advance payments for each of the three years left in
Iran's. five-year development plan. Despite this, we expect
increasingly hard bargaining in the years to come, as the
gap between Iranian demands and consortium production esti-
mates widens.
The settlement will doubtless inspire Arab oil states
to push for matching hikes in revenues and benefits.
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FOR THE PRESIDENT ONLY
CHILE
Although presidential elections are sixteen months away,
precampaign politicking is seriously dividing President Frei's
Christian Democratic Party. A number of leftist, leaders and
the leaders of the youth group resigned from the party last
week because the party assembly voted to tun its own presiden-
tial candidate rather than join with the Communists and So-
cialists behind a "popular unity" candidate.
The Christian Democratic candidate will be named this
summer. His major task will be to unite the left--the Christian
Democrats and all others--particularly on the problems of eco-
nomic and social development. Radomiro Tomic, former ambas-
sador to the US, remains a possibility. He has stated that he
would not run without Communist and Socialist support, however,
and both those parties have repudiated him.
Thus far, only one issue has been surfaced that all left-
ists seem to agree on--the nationalization of the US copper
companies. Frei has been trying to avoid such drastic action,
offering instead a complicated formula giving the government
a greater share of the companies' revenues. The exigencies of
politics, however, may force him to accept legislation that
goes beyond the limits his plan sets.
Whoever the Christian Democratic candidate is, he probably
will face formidable opponents in conservative ex-president
Alessandri and pro-Castro Socialist Senator Allende. The
Radical Party has not yet decided whether to field its own
candidate, and probably will wait to see who the Christian Demo-
crats pick.
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Top Secret
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