THE SITUATION IN SOUTH VIETNAM - 1967/12/04

• Document Type: SPECIALCOLLECTION
• Collection: Tet Declassified
• Document Number (FOIA) /ESDN (CREST): 02717218
• Document Creation Date: July 27, 2018

Approved for Release: 2018/07/11 CO2717218
,Natit kale
DIRECTORATE OF
INTELLIGENCE
Intelligence Report
The Situation in South Vietnam
(Weekly)
Approved for Release: 2018/07/11 CO2717218
cret
1
4 December 1967
No. 0379/67
Approved for Release: 2018/07/11 CO2717218
Syeret
,WARNING
'This document contains information affecting the national defense of the
United States, within the meaning of Title 18, sections 793 and 794, of the
US Code, as amended. Its transmission or revelation of its contents to or
receipt by an unauthorized person is prohibited by law. �
1GROUP 1
EXCLUDED FROM AUTOMATIC
DOWNORADINO AND
DECLA531FICATION
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/-11 CO2717218
n ,
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
THE SITUATION IN SOUTH VIETNAM
(27 November - 3 December 1967)
CONTENTS
Section
POLITICAL SITUATION
Some discontent with new government;
Military manpower; Lower House activities.
REVOLUTIONARY DEVELOPMENT II
Revolutionary Development, public adminia-
tration, and corruption; Plans for new
political party; Press and information;
Deployment of Revolu-
tionary Development and Truong Son teams, 1 Novem-
ber. (Map)
ECONOMIC SITUATION III
Prices; Currency and gold.
ANNEX: Weekly Retail Prices in Saigon (table)
Saigon Free Market Gold and Currency Prices
(graph)
-����
ET
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 CO2717218
r I
I. POLITICAL SITUATION
There is apparently growing discontent
with the new government among some of the
senior generals, particularly supporters
of Vice President Ky, but Ky is counseling
moderation and has already averted one poten-
tial crisis by persuading police director
Loan to withdraw his resignation for the
time being. The Senate, concerned that
the government's mobilization decree may
be unconstitutional because it was promul-
gated before the full legislature had been
invested, intends to invite Prime Minister
Loc to discuss the decree and answer questions.
A number of Lower House deputies spent a
recent ten-day recess seeking better secur-
ity and more government assistance for their
constituents. Members of two Lower House
groups--one oriented toward the Catholics
and the other toward the Buddhists--have
reportedly agreed to form a loose alliance
in an attempt to offset the influence of
the progovernment Democratic Bloc.
Some Discontent with New Government
1. Discontent with the new government appears
to be growing among at least some of the senior gen-
erals. The discontent stems from the continuing
Thieu-Ky conflict and from what the generals regard
as the new government's "soft" attitude toward Com-
munism.
2. \
much of the disenchantment is among
Ky supporters. Deep mutual suspicion exists between
the Thieu and the Ky camps, and tends to
color the outlook of each, with the result that ac-
tions are judged not on their merits but rather in
the context of the power struggle. Ky's supporters
have come to realize that he does not have the power
he had as prime minister and that he is neither making
nor significantly influencing key decisions. Their
disenchantment is aggravated by Ky's apparent will-
ingness to sit back and take it.
3.3(h)(2)
I-1
Approved for Release: 2018/07/11 CO2717218
3.5(c)
3.3(h)(2)
3.3(h)(2)
3.5(c)
3.3(h)(2)
3.3(h)(2)
Approved for Release: 2018/07/11 CO2717218
vosi
Ky's supporters, particularly police director
Loan and III Corps commander Khang, feel that Ky
should be more aggressive in protecting his own and
his camp's interests before they are all "forced
against the wall" by Thieu.
3. Thieu's appointment of Nguyen Van Huong
as his secretary general has apparently brought
the discontent to a head. There is,
a fairly widespread feeling among the
generals that Huong is a Communist or at least a
pro-Communist, and that his appointment to a posi-
tion of such power will endanger national security.
4. Thieu reportedly intends to take on intelli-
gence and budgetary matters as his own responsibili-
ties, rather than the prime minister's. This would
give Huong significant access to and influence over
these matters. Loan is naturally skeptical about
having a man whose background he regards as question-
able placed in a position to influence intelligence
organs. Loan and others close to Ky,
fear that Huong might actu-
ally be Thieu's. prime minister designate" who is
being kept in readiness for the day when Prime Minis-
ter Loc makes a political faux pas.
and security
5. Ky's supporters reportedly fear that Loc
is likely to do just that. They think he is too anx,
iousto please everyone, including Communist sympathi-
zers, and is not helping matters by his attitude
toward Thieu and Ky. He is courting both men and
attempting to act as a bridge between them. The
government consequently is acting as three govern-
ments rather than as a unified body, in the source's
opinion.
6. Despite all this, a
political crisis is not imminent. General Khang
has reportedly threatened to resign and has said
other generals, including Joint General Staff chief
Vien, might also quit over what they believe is the
government's general lack of effectiveness and its
soft attitude toward Communism.
1-2
3.5(c)
3.3(h)(2)
3.3(h)(2)
3.3(h)(2)
Approved for Release: 2018/07/11 CO2717218
3.5(c)
3.3(h)(2)
Approved for Release: 2018/07/11 CO2717218
%AulW S E CR-FT
Ky has reportedly
urged Khang and Loan to give Loc a chance, although
he agrees that Loc is not particularly effective.
Ky has also attempted to stem fears that Nguyen Van
Huong will be a danger to the government, pointing out
that,even if the accusations are true, Huong will
be able to do little for the Communists with the
glare of publicity on him and with Ky's supporters
alerted to his pro-Communist leanings.
Military Manpower
9. Defense Minister Vy is reportedly dissatis-
fied with the caliber of Vietnamese Army officers
and is considering revampimg the selection process.
Rather than use a college degree as the sole criterion
for admission to officer candidate school, Vy would
reportedly first induct college graduates as privates
and then screen them for officer qualifications before
giving commissions to those who measure up.
1-3
Sj.011.ET
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 002717218
:111,L1K H.
10. The Senate also took up the subject of mili-
tary manpower during its session on 25 November, in-
dicating general displeasure with the government's
promulgation of the mobilization decree before the
legislature had been invested. Although a number
of senators criticized the substance of the decree,
particularly the lowering of the draft age, the major-
ity were concerned with its constitutionality. It
was finally agreed that Prime Minister Loc or his
representative should be invited before the Senate
to discuss the decree and to answer questions. Final
language of the invitation was to have been decided
on at the Senate's session on 28 November.
Lower House Activities
11. The Lower House recessed between 21 November
and 1 December while its rules committee began work.
A number of deputies spent the period seeing to the
needs of their constituents. Several members from
central highland provinces met with Defense Minister
Vy on 21 November to request better security along
roads in their area. Other deputies distributed
relief supplies in their constituencies or approached
the government for such things as more refugee assist-
ance and better compensation for war damage.
12. Several deputies of apparently differing
persuasions reportedly spent the recess in forthinq
a loose alliance. /
19 members of the largely Catholic Independent Group
met on 22 November with 13 members of the Progressive
Bloc, which is composed primarily of central Vietnamese
Buddhists. It was agreed that the two groups could
probably never be integrated because of their differing
views on some controversial issues, but that these
differences should not prevent them from acting in
concert on a number of other issues. The stated pur-
pose of the alliance is to prevent domination of
the Lower House by the progovernment Democratic Bloc,
but the coalition will probably need several additional
members before it can effectively counterbalance the
influence of the 50-member Democratic Bloc.
1-4
"felt ET
Approved for Release: 2018/07/11 002717218
3.5(c)
3.3(h)(2)
3.5(c)
Approved for Release: 2018/07/11 CO2717218
I
II. REVOLUTIONARY DEVELOPMENT
The problem of corruption seems to be
inexorably woven into government attempts
to strengthen its national administrative
apparatus and make progress in Revolutionary
Development. Despite some efforts to
eliminate corruption and to upgrade the
training of provincial and district officials
corrupt officials at the higher levels of
the government are seemingly immune from
prosecution. It remains to be seen, however,
if the Thieu government will make a genuine
effort systematically to root out the dis-
honest officials.
General Thang and the RD cadre program
appear to have become involved in the ef-
forts by Senator Nguyen Gia Hien to form a
broadly based political party. Press and
information activities have been elevated
to the prime minister's office. Korean
forces in South Vietnam will reportedly take
stronger action against elements of the
civilian populace suspected of harboring
the Viet Cong. A map is attached which shows
the provincial deployment of the RD and
Truong Son teams as of 1 November.
Revolutionary Development, Public Administration,
and Corruption
1. In a recent conversation with US officials,
Vice President Ky described his government's plans
for the training of provincial officials at the Vung
Tau Revolutionary Development Training Center and
for the reorganization of the civil administration.
According to Ky, a four-week Vung Tau training course
will be instituted in December for selected civilian
and military officials. This training will be to
give these officials an understanding of their
duties and responsibilities and attempt to make
clear to them the need for a new approach to Vietnamese
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 002717218
Nriol SE.P-TrET
public administration--providing for the greatest
good for the greatest number of people,
2. In his remarks, Ky indicated that most
province chiefs would be replaced in January 1968,
and that in administrative affairs the chain of com-
mand for the province chiefs will be taken out of
the hands of the corps and division commanders and
authority will be given to the minister of the in-
terior, Corps commanders will, however, retain
their military responsibilities. In light of the
current political machinations in the South Viet-
namese government and the apparently persisting in-
fluence of the corps and division commanders, it is
somewhat doubtful that province chiefs, almost all
of whom are military officers, will accede to the
wishes of the Ministry of the Interior in Saigon
and not take notice of the desires of the local
corps and division commanders,
3. Recent remarks by Colonel Khoi, the chief
of the Vietnamese RD Cadre Directorate, have
amplified some of Ky's statements. The four-week
Vung Tau course will reportedly be mandatory for
all province chiefs, district chiefs, and the pro-
vincial RD chiefs. According to Khoi, very few
Vietnamese Army officers are now requesting assign-
ment to the province and district chief positions
and, therefore, military officers are being detailed
to these jobs.
4. The reluctance of army officers to seek the
province and district commands may be a result of
concern on their part that they might be made the
scapegoats in any anticorruption drive. Thus far,
the only officials known to have been affected by
the anticorruption measures of the government have
been provincial and district officials. Tran Van
Huong, who since his defeat as a presidential con-
tender has assumed the role of an elder statesman,
recently told a US Mission officer that he believed
the anticorruption campaign would be restricted to
the provincial and district levels, since these in-
dividuals were by and large without any substantive
-2-
Approved for Release: 2018/07/11 002717218
a
3.3(h)(2)
Approved for Release: 2018/07/11 CO2717218
cprip-
political support. Huong does not believe, however,
that the worst offenders--many of whom he believes
are occupying high positions in the government will
be punished.
5, In early October Nguyen Cao Ky suggested
that as vice president he would assume major respon-
sibility for the elimination of the "corrupt
elements" in the government. About 'this same time,
there was a spate of Vietnamese press reports on
disciplinary measures taken by Ky against allegedly
dishonest officials. Ky reportedly authorized
sanctions against seven officials in, Kien Giang
Province: three former province chiefs, one former
deputy province chief, and two service chiefs. �He
also reportedly ordered the removal of the Chief of
the Police Special Branch in Vung Tau City and the
finance chief in Binh Duong Province, and a reor-
ganization of the automobile registration service
in the Ministry of Transport and Communications to
"correct its poor procedures." At about this time,
the province chief of Phuoc Tuy and the mayor of
Vung Tau were replaced.
6. During September-October, the province
chief of Binh Dinh was relieved, tried for corrup-
tion, and sentenced to death. Several Binh Dinh
Province staff officers were tried along with him
and also judged guilty; however, they received
lesser sentences. The Vietnam Press on 30 October
announced that several aaarETEnal officials in-
volved in the refugee program in Binh Dinh Province
had been apprehended for the embezzlement of some
10 million piasters. The former chief of the re-
fugee service in Binh Dinh, the former Hoai Nhon
District chief, and several other officials involved
in the case have been charged with the misuse of
public funds, ,Investigation of this case was begun
on the basis of complaints from the local inhabit-
ants.
7. Blatant corruption has long been reported
to be widespread at the higher levels of the govern-
ment. In this connection,
III Corps Commander Khang, who
-3-
1
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 CO2717218
SEGKET
reportedly believes that corruption is rampant among
several of the higher-ranking generals, has recom-
mended that two corps commanders be replaced.
Khang reportedly claims that both II Corps Commander
Loc and IV Corps Commander Manh are deeply involved
in corruption and should be removed. As an example
of their actions, Khang cited their handling of a
Tet bonus given all corps commanders last year by
then Premier Ky for distribution among their division
commanders and other subordinates. In contrast to
his own action in distributing the million-piaster
bonus as instructed, Khang said that Loc and Manh
apparently pocketed most or all of their bonuses.
Khang also alleged that Minister of Revolutionary
Development Nguyen Bao Tri and Minister of Interior
Linh Quang Vien are notoriously corrupt,
8. According to unofficial sources, as many
as six province chiefs and 40 to 50 district chiefs
have thus far been removed from office. It remains
to be seen, however, if the Thieu government will
make a genuine effort systematically to root out
dishonest officials, The possibility exists that
the anticorruption measures initiated during October
and November will subside.
Plans for New Political Party
9. General Nguyen Duc Thang has reportedly
agreed to use his official position at the Joint
General Staff to work with Senator Nguyen Gia Hien
to form a broadly based political party.
-4-
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 CO2717218
SE-eIZET *so
10. Hien foresees
a nonsectarian national political party with his
Greater Solidarity Forces (GSF) as the nucleus.
Moderate Buddhist Thich Tam Giac has reportedly
agreed to provide some of his followers for the
plan, and Thang will allegedly attempt to recruit
Hoa Hao and Cao Dal cadres to broaden the political
base of the proposed party. Hien will begin work
on his party in January or February of next year,
at which time he intends to announce the formation
of a Nationalist Democratic Socialist Front as an
extension of his National Democratic Socialist
Bloc in the Senate. His organizers in the Revolu-
tionary Development teams will operate under the
front's aegis, and he hopes to transform the front
into a party by early 1969.
11. Thang is reported to have been quite
enthusiastic over the idea of building a political
party system in South Vietnam./
Vice President Ky is said to be aware of Mien's
aspiration and has sanctioned the idea of pulling
12 GSF members into RD teams,/
12. It appears that Thang, Hien, and Thich
Tam Giac are convinced that a political party is
needed at the grass roots level to counteract Com-
munist political work,
the three men believe such a
party must be created as soon as possible
any advantage the Viet Cong might have in
the war ends by negotiation.
political
to offset
the event
13. A similar plan by Senator Tran Van Don and
his followers to establish a grass roots political
organization has been developing very slowly. One
of the individuals involved in this effort, Tran
Van Tuyen, recently told a US Embassy officer that
he was very concerned at the lack of any national
�5�
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 CO2717218
tiF1( _j�e�-f-i I
political organization, adding that once the level
of hostilities began to subside, political problems
would be further compounded if a grass roots polit-
ical organization was not in place and functioning.
Press and Information
14. In the new government, internal and ex-
ternal press and information activities are being
directed from the prime minister's office. The
creation of an office of the Director General of
Information and Press (DGIP) in the private office
of the prime minister, separates Chieu Hoi and In-
formation activities--previously handled by the
Ministry of Information and Chieu Hoi. This re-
organization suggests that the government has be-
come more concerned with its domestic and inter-
national political image. The DGIP is Nguyen Ngoc
Linh, an ex-adviser to Vice President Ky and a
former director of the Vietnam Press.
15. Linh is willing to undertake a major re-
organization of government information activities.
In the new organization, functions will be con-
solidated and staff levels between the executive
staff and the operating staffs will be eliminated.
The DGIP's reorganizational plan must, however,
still receive Prime Minister Loc's approval. Linh
has, however, already established a single Viet-
namese Information Service (VIS) Division which en-
compasses both Saigon and all field elements. A
second operating division will handle all external
information programs. All service functions will
be grouped under a single administrative office.
16. Linh's proposed reorganization of the
DGIP also includes the removal of censorship from
press and information activities, the establishment
of a central policy and programming office with a
research and analysis capability, and an inspectorate
staff responsible to the director general. Linh
has indicated to US officials that he would like to
weed out "patronage employees," and has expressed a
strong interest in employee training and certifica-
tion as a requisite for continued employment. It
-6-
P, I
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 CO2717218
bEl_. I
remains to be seen how effective Linh will be in im-
proving the general output and performance of the
VIS, one of the most ineffective provincial agencies.
�7�
Approved for Release: 2018/07/11 CO2717218
3.5(c)
3.3(h)(2)
3.5(c)
Approved for Release: 2018/07/11 CO2717218
NILS `*(10
A...
SOUTH VIETNAM
Revolutionary Development Cadre
I November 1967
Revolutionary Development Teams
Total Personnel: 26078
Total learns: 516
Truong Son Teams (Montagnard)
Total Personnel: 6,081
Total Teams: 110
Static Census Grievance Cadre (SCGC)
Total Personnel: 5,366
Total Cadre: 37,525
RD Priority Provinces for 1968
NORTH\
.\.yI E TNA
1� f NiG5
ri-2.1 4
Hu
18 I HUA
I itr_N
� 4.����.,
)
29 t29 7,354
739
DEMARCATION LINE
NOTES:
Da tat Autonomous City: music/drama teams
An Giong Province: 20 man Community Development
Teams
In training Vung Tau, 7,644 (classes 6, 7, 8, and lead-
ership, medical, and intelligence classes)
In training Pleiku: 1,459 (class IS, and refraining and
leadership classes)
4\
LAOS
.01.JANCi NAM j
1
21
/ANG TIN
3.5(c)
4
s_TSNTIJM
11
44
ti.41`41T.
4
4
I A
3
U NON
7
PHNOM PEN
? 3
5.--.......,,k ,.,..,
L 12 ,.,.11�1
_
'A:NH
)
.1 3
,,LiC
7
4
5
PHUOC:
LONG
7
TLIYTN
Da Lattal
DUC
7
_AM DON
7
� �
�
6�
`�,
5-Lt
KiEN.X
LONG
IANH
5
7 4
TUY
)
PHINIJOC
10
":-HLIONG
TN EN
12
VINH
BINH
r> ung Tau2
Capital
Military District
NH
THUAN
15
111 CORPS
TEAMS STRENGTH
73 3,618
13 651
SCG CADRE
1,285
CORPS
TEAMS SlitistOtH
,,,161 7.1-99
_ .
XUYEN
5
0 2,5
5,0 75 100 Miles
025 1 bo Kilometers
, .
3.5(c)
68786 12-67 CIA
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 CO2717218
kviroo P_MIKT, vas,
III. ECONOMIC SITUATION
The retail price index in Saigon held
steady for the third consecutive week at
a level on 20 November 33 percent higher
than on 3 January. Free market currency
and gold prices rose sharply in response
to the devaluation of the British pound
and the Hong Kong dollar.
Prices
1. Retail prices in Saigon continued to be
stable for the third consecutive week at a level on
20 November 33 percent higher than at the beginning
of the year. The price of the rice consumed mainly
by the working class, which is used in calculating
the USAID index, rose somewhat, as did the price of
US remilled rice, but other domestic rice prices were
unchanged. The embassy attributed the increase in
the price of imported rice to the small amount re-
leased from government stocks. Despite the increase
in the price of rice, the over-all level of food
prices was unchanged as better traffic conditions
allowed larger deliveries of fish and vegetables.
Prices of charcoal and firewood also declined as the
result of increased deliveries, but the price of
calico rose slightly.
2. Since the beginning of the year food
prices have increased 39 percent, while nonfood
prices have gone up 19 percent. Rice, pork, and
fish are among the leaders, having risen 41, 65, and
67 percent, respectively. These foodstuffs account
for about one third of the weights used in calculat-
ing the over-all price index, the weights being
ratios of total expenditures on each item to total
expenditures of an average family budget. (A table
of weekly retail prices in Saigon in included in
the Annex.)
3. The USAID index for prices of US-financed
imported commodities was unchanged during the week
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 CO2717218
cFriW''<
ending 21 November at a level only 8 percent higher
than on 4 January. Prices of many goods were higher,
reportedly in part because of rumors of higher taxes
and customs duties. Substantial new arrivals caused
the price of cement to fall, offsetting the increases
for other items.
Currency and Gold
4. Free market currency and gold prices
rose sharply on 20 November in response to the de-
valuation of the British pound and the Hong Kong
dollar. The price of green dollars rose eight pias-
ters to 164 piasters per dollar, and the rate for
MPC (scrip) increased six piasters to 121 piasters
per dollar. The price of gold leaf rose to 211
piasters per dollar, nine piasters higher than the
previous week. (A graph on monthly and weekly cur-
rency and gold prices is included in the Annex.)
111-2
Approved for Release: 2018/07/11 CO2717218
Approved for Release: 2018/07/11 002717218
TABLE
Weekly Retail Prices in Saigon a/
13 jun
b/
3 Jan
1967
30 Oct
1967
6 Nov
1967
13 Nov
20 Nov
1967
225
301
300
Index fc.)1-.. all Items
Index for Food items
Of Which:
(In Piasters)
Rice-Soc Nau (100 kg.)
Pork Bellies (1 kg.)
Fish-Ca Tre (1 kg.)
Nuoc Mam (jar)
index for Nonfood items
Of Which:
(In piasters)
Firewood (cu. meter)
Cigarettes (pack)
White Calico (meter)
Kerosene (liter)
2,400
220
250
150
262
2,250
220
260
150
233236233
530
14
L,6
9
337
2,350
220
260
150
1,250
90
130
70
140
1,700 .
13C.
150
90
2,300
230
270
150
230
560
-14.
0
1139
520
14
/-
4(
10
27
7
560
14
33
10.5
46
a. Data are fr= USAID sources. For all indexes 2. January 1965
h. Price level ust oior t the IT June
Preliminary.
=
Approved for Release: 2018/07/11 002717218
1/
Approved for Release: 2018/07/11 CO2717218
*FS
al on Free Market Gold and Currency Prices
PIASTERS PER US DOLLAR
31 OCT
D: Basis gold eaf worth $35 per troy ounce
GREEN
. : A.
.Payment Certificates
_
-
Approved for Release: 2018/07/11 CO2717218
ret
Approved for Release: 2018/07/11 CO2717218
Nwe
Approved for Release: 2018/07/11 CO2717218