THE SITUATION IN SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00472A001800040004-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 12, 2016
• Document Release Date: January 31, 2002
• Sequence Number: 4
• Publication Date: October 27, 1965
• Content Type: REPORT

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WEEKLY REPORT
OCI No. 0643/65
Copy No. 110
THE SITUATION IN SOUTH VIETNAM
27 October 1965
INTELLIGENCE AND REPORTING SUBCOMMITTEE OF THE INTERAGENCY
VIETNAM COORDINATING COMMITTEE
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DIA and DOS Reviews Completed
GROUP 1
Excluded from automotic
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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OCI No. 0643/65
Published by the Directorate of Intelligence
Central Intelligence Agency
(21 October - 27 October 1965)
Page
THE WEEK IN PERSPECTIVE iii
Map, South Vietnam, facing page 1
I. THE SITUATION IN SOUTH VIETNAM 1
A. POLITICAL SITUATION
An ill-defined restiveness is at-
tributed to growing economic discon-
tent (p. 1); Recurrent coup rumors lack
solid foundation (p. 1); Capital District
commander sees rumors as Viet Cong effort
to sow dissension (p. 1); Premier Ky's
press conference focuses on economic prob-
lems (p. 2); Government drops project for
advisory council (p. 2); Economic situa-
tion overshadowing political developments
(p. 2); Two government actions to combat
inflation and commodity shortages (p. 3).
B. MILITARY SITUATION 5
Viet Cong - initiated incidents increase
for the fourth straight week (p. 5); VC
mounts a major effort against a Ba Long
Valley outpost (p. 5); No large-scale op-
erations in III or IV CTZ (p. 5); Plei Me
camp is target of week-long multibattalion
attack (p. 6); Interdiction of roads and
rail lines is outlined (p. 7).
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Page
C. RURAL CONSTRUCTION 8
Rural Construction Ministry may be
consolidated into the Interior Min-
istry (p. 8); General Co would be
overall coordinator under the pro-
posed reorganization (p. 8); Ex-
planations are offered for failure
to expend budgeted rural construc-
tion funds (p. 8); Chieu Hoi return-
ees show sharp decrease (p. 9);
Map, North Vietnam, facing page 10
II:;: DEVELOPMENTS IN THE BLOC 10
MIG force in North Vietnam is possi-
bly being augmented (p. 10); Sino-
Soviet trucks are helping to keep es-
sential goods moving through North
Vietnam to the south (p. 10); DRV
delegation moves carefully at trade
union congress to avoid Sino-Soviet
controversy (p. 10); North Vietnam-
ese call for postponement of scheduled
Afro-Asian conference (p. 11).
III. THIRD COUNTRY DEVELOPMENTS 12
GVN moves to gain admission to pro-
posed Afro-Asian conference (p. 12);
Foreign Minister Do offers Cambodia
compensation for misdirected GVN air-
strike (p. 12); Several ambassadorial
appointments are awaiting decisions by
the Military Directorate (p. 12).
ANNEX: South Vietnam Battle Statistics
(Weekly)
US Combat Casualty Figures in
Vietnam (Weekly)
(The Weekly Report on the Situation in South
Vietnam is based on contributions from CIA,
DIA, and INR; it is edited and published by
CIA without final coordination.)
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THE WEEK IN PERSPECTIVE
Viet Cong terrorist and military activity increased for
the fourth consecutive week. The 811 incidents for the week
ending 23 October were the highest this year and the most
recorded in a seven-day period since mid-September 1964.
The recent aggressiveness of the Viet Cong is highlighted
by the week-long siege of the Special Forces camp at Plei
Me in :Pleiku Province but, in addition, there were several
scattered attacks by battalion- and company-strength enemy
forces. The II Corps Tactical "one remained the most
critical combat area. Enemy casualties continue to run
high, however, and the balance of military success re"nained
with government forces, as reflected in favorable kill and
weapons-losses ratios.
The political situation continues outwardly calm, but
signs of underlying restiveness persist. Low-level coup
rumors are again being heard in Saigon, but they are not
credited by observers as having any solid foundation. The
government is concerned that popular discontent over rising
prices and commodity shortages may be exploited politically
by opponents of the regime.
Premier Ky is focusing his attention on the economic
problems, and has announced that remedial steps are being
taken. Ky has also debunked rumors that he might resign,
taking the line that the more difficulties he encounters the
longer he will stay in office to eliminate them.
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MILITARY BOUNDARIES
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1. THE SITUATION IN SOUTH VIETNAM
. POLITICAL SITUATION
1. Although the political situation in South
Vietnam remains outwardly calm and uneventful, there
continues to be an underlying malaise and restiveness
that defies definition. Growing discontent over rising
prices and commodity shortages is a factor in the-pic-
ture, and this aspect perhaps more than any other at
present is-susceptible to exploitation by opponents of
the Ky government.
2. Low-level coup rumors are recurrent3n Saigon.
Although these rumors are dismissed by Vietnamese
officials and Western observers as lacking solid foun
dation; they deserve to point up a lack of political
robustness in the present Saigon administration.
However,.the various segments of the Vietnamese com-
munity are still inclined more toward a wait-and-see
posture than toward any definite positive or negative
stand regarding the government.
25X1 C^-
3.
25X1 C has offered several,
explanations ?Or the recent spate of coup rumors.
In part, he attributes them to Viet Cong efforts to
sow dissension. The Vietnamese national police
have reported recently that the Viet Cong political
apparatus in Gia Dinh Province near Saigon has been
instructed by the Liberation Front to study ways to
exploit dissension among the ruling generals and
among the various political parties and religious
groups, in an effort to convince the people that
the Saigon government is unstable. Viet Conk cadres
of all echelons, I I, 25X1C
have been alerted to watch the situation-for an op-
portunc time to incite popular demonstrations.,However,
these instructions would.seem to,be.standard operating
proceduresIfor.the Viet- Gong, and.,sim,ilar reports have
been received from time to time during, the past few years.
25X1C 4. also feels that Premier Ky's
recent illness--a bad cold--has contributed to the
coup rumors. In addition, 0 believes that a 25X1C
measure of uncertainty has been generated among some
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civilian groups by General Nguyen Huu Co's dis-
satisfaction with the loss of. his major military
responsibilities as a result of his new assignment
as deputy premier. In any event, 0 seems confident 25X1C
that there is no person nor group strong enough at
this point to attempt a coup.
5. Premier Ky nevertheless appears perturbed
by the ripples of discontent, and is alert to the
danger that the rapidly rising cost of living may
be exploited effectively by elements hostile to his
regime. At a press conference in Saigon last week,
Ky focused on the economic, situation and Stressed
that the government was taking steps to relieve these
problems (see Economic Situation, paras 7.13). Ky .
also used the press conference to debunk reports that
he might resign in the face of mounting problems,
taking the line that the "more difficulties there are,
the'longer I will stay until all difficulties are
eliminated."
6. The Ky government, meanwhile, is backing
off from its project to form an advisory council
in the near future. Instead, the government in-
tends to convene meetings of provincial and pre-
fectoral council representatives on an irregular basis and with carefully prescribed agendas. The
government also hopes to form an economic and social
council as provided for in its charter of 19 June.
Directorate members candidly admit that these steps
are part of a. cautious effort to engage political
"out elements" in the responsibility of'kovernment
while at the same time not affording critics any
forum for attacking the administration.
Economic Situation
7. The US Embassy reports that concern over
economic problems, particularly the threatening
inflation, is currently overshadowing political
developments in South'Vietnam. This was reflected"
in Premier Ky's discussion with the press on
22 October, during which he concentrated on the
country's economic difficulties.
8. As a measure of past inflation, USOM's
general retail price index was about'30 percent
higher this month than a year ago, with most of
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the increase concentrated in the period since the
end of April. Last week the price picture was mixed,
with some commodities showing sharp increases and
others, mainly imported commodities, falling in
response to two government actions. In the first
of these, the government rescinded most of the im-
port duties announced on 24.'September. This led
to price declines in the affected commodites and
may have a favorable psychological impact. However,
the loss in government revenue will have an un-
favorable effect on inflationary pressure since
the major causes of inflatbn have been the fiscal
deficit and accompanying increase in the money supply.
9. The second government action was the an-
nouncement on 11 October that the GVN would make
$25 million of foreign exchange airailable for imports
during the fourth quarter. Probably associated with
this action was the fall in the price of US dollars
during the week. On 20 October, one US dollar went
for VN $158/161, compared with VN $172/175 on 15 Oc-
tober, although the present rate is still somewhat
higher than the 11 October rate of VN $154/157,
10. Retail prices of rice fell slightly during
the week, and wholesale prices held steady although
stocks continued.to decline. While there is still
concern over a possible tight stock situation in
November and over the unfavorable crop prospects for
next year, it is notable that rice prices since June
have been an element of stability in the total com-
modity price picture. This is largely due to the
massive rice imports, mostly PL-480 shipments.
11. In his talk with the press on 22 October,
Premier KY blamed "'roes and friends alike" for
"sabotaging the government in the economic field
after failing to do so in the military and political
field." Ky also said he might "convoke" leading
Chinese merchants to warn them about price rises and
hoarding. As a possible concrete measure, he men-
tioned that the GVN was considering instituting
rationing of essential foodstuffs in Baigon. This
would be a dubious step, however, especially in
view of the serious administrative problems that
would accompany such a program.
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12. There also has been a report-that Minister
of Economy and Finance Ton may be relieved and re-
placed by former prime minister Nguyen Ngoc Tho,
However, in his latest talk with a US Embassy officer,
Ton expressed guarded optimism that he had weathered
the storm for the moment although it is clear that
he is faced with mounting pressures. His xeplac:emeat
would be another example cta tendency to look for scape-
goats rather than to cope with the essential problem.
13. In the meantime, inflation and commodity
shortages will probably continue to be a serious
problem in South Vietnam. Inflation has been widely
blamed on spending by US forces and it provides a
convenient political weapon to opponents of the Ky
adminstration.
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B. MILITARY SITUATION
1. For the fourth straight week, the number
of Viet Cong = initiated incidents increased. The
total of 811 is the highest this year--last year"'s
high was 975 during the period 12-19 September.
There were 11 attacks, including four of batalion
or larger size, compared to four small-scale attacks
during the period 9-16' October. Of all incidents,
about 30 percent occurred in IV Corps; I and II Corps
each had about '23 percent, and `20 percent 'occurred in
III Corps. .I"n"cidents yin the Capital'Military.Region
deelined .,from '34 to 22.
VIET CONG - INITIATED ACTIVITIES
2. In I Corps, an estimated three Viet Cong
battalions launched an attack against a GVN out-
post in Quang Tri Province on 20 October. This
was the first major effort on the part of the
Viet Cong to eject GVN forces that had occupied
the Ba Long Valley 20 kilometers southwest of
Quang Tri city in mid-August, following a B-52
Stratofortress raid on this Viet Cong base area.
In Quang Tri Province, also on 20 October, an
estimated two Viet Cong companies attacked a Re-
gional Force bivouac. Other activity in I Corps
was limited to harassment, sabotage, and terrorism.
3. On 20 October in II Corps the Viet Cong
launched a "mult'ibatt ali.bn attack on the Plei Me
Special Forces Camp in Pleiku Provincp.,(see para 6).
In Binh Dinh Province, the?Viet Cong again avoided
contact with friendly forces. Since this is the
peak period of the rice harvesting seascain this
region, it is likely that the Viet Cong are devoting
a great deal of effort to protecting this crop.
4; In III Corps, Viet Cong activity Was limited
to harassment,-mining, and antiaircraft fire. The
absence of large-scale operations indicates that"the
Viet Cong are still concentrating on training, re-
cruiting, and re-equipping their forces. Recent
friendly actions probably have kept the Viet Cong
off balance, and the capture of sizable.quant.itie.s;;
of supplies will have at least a temporary disruptive
effect on the Viet Cong logistical system in parts of"
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the area. During a search-and-destroy operation
approximately 50 nautical miles west of Saigon in
Kien Tuong Province, GVN forces uncovered a hand-
grenade factory on 27 October. Included in the
cache were 20,000 grenades, 2,000 mines, 3,000
detonators, 900 kg TNT, and three weapons; three
Viet Cong were captured.
5. In IV Corps, the Viet Cong conducted three
attacks against lightly~defended.Regional and Popular
Forces installations. Throughout the area, the Viet
Cong continued harassment, sabotage, antiaircraft
fire, and terrorism.
GVN/ALL lEI3 ACTIVITIES
6. The II Corps Tactical Zone remained the
most critical combat area this week as large GVN
forces maintained the intiative along the coast
and a multibattalion Viet Cong force in the west-
central highlands attacked the isolated Plei Me
CIDG outpost in Pleiku'Province. The camp was
defended by four CIDG companies, reinforced on
21 October by two GVN Special Forces ranger air-
borne companies. On the 23rd, a ,three battalion
GVN relief force was heavily engaged 12 kilometers
north of the camp. The Viet Cong maintained pres-
sure on the camp for seven days despite being hit
with round-the-clock tactical air support strikes
and numerous armed helicopter sorties. It is
probable that elements of a North Vietnamese (PAVN)
regiment, which had infiltrated into South Viet-
nam during the past two months, were involved in
the battle. Cumulative Viet Cong losses are an
estimated 458 KIA (158 confirmed by body count).
Friendly losses were 80 killed (12 US) and 165
wounded (9 US).
7. On 22 October during a road-clearing
operation in Quang Due Province, an attempted am-
bush was turned into a GVN victory. Friendly losses
were two killed, including the province chief, and
seven wounded but about 100 Viet Cong were killed.
Another engagement in Phu Yen Province'between a
GVN battalion and an estimated Viet Cong battalion
resulted :in,' 'an estimated 200 Viet Cong killed; GVN
losses were five k-il l:ed ' and' 19 wounded . On : 26 October,
in. Phu Y.en';'PrdViinco, ~ two GVN' battalions assisted'
by ~ tactical air support' intercepted a Viet
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Cong force that had unsuccessfully attacked a bridge
defended by a Regional Force company. Casualty re-
ports confirmed 148 and estimated an additional 400
Viet Cong killed. Viet Cong losses in these actions
were attributed mainly to highly responsive and
effective close air support. While the exceptionally
high Viet Cong casualties in Phu Yen Province have
not been confirmed by body count, it,seems clear that
the Viet Cong in this province have been dealt a
serious setback.
8. In the IV Corps area, GVN forces continued
to counter Viet Cong attempts to utilize the infiltra-
tion routes between Kien Hoa and Tay Ninh provinces.
Allied forces went on with clearing operations in their
respective areas, but no significant contact was made
with enemy forces. The first regimental combat team,-
of the ROK Tiger Division arrived at Qui Nhon on 22
October and began occupation of its assigned area near
Binh Khe.
9. National Route 1 is closed in Quang Ngai,
Binh Dinh, Ninh Thuan, Binh Thuan and Binh Tuy ,
provinces. Route 9 is closed in 4uang Tri Province.
In Pleiku Province., Route 19 is closed. Route 14 is
closed in Kontum, Pleiku, Quang Duc, Phuoc Long, and
Binh Long provinces. In Phu Bon and Phu Yen provinces,
Route 7 is closed. Route 15 is closed in Bien Hoa
`Province. Closed interprovincial routes include:
Number 1 in Binh Duong and Phuoc Long provinces, and
Number 8 in Dien Giang Province. Provincial Route 10
is closed in`Hau Nghia Province. The national rail-
road is operating between Song Luy, Binh Thuan Provr
ince, and Ninh Hoa, Khanh Hoa Province; between Dalat,
Tuyen Duc Province, and Phan Rang, Ninh Thuan Province;
and between Da Nang, Quang Nam Province, and Hue, Thua
Thien Province,
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C. RURAL. CONSTRUCTION
1. Minister of Rural Construction General
Nguyen Duc Thang recently disclosed to General
Lansdale that the National Leadership Council would
be asked to abolish the present Ministry of Rural
Construction and consolidate it into the Ministry
of the Interior as a secretariat. Thang hinted
that he might be appointed to head the Interior
Ministry.
2. The change in the organization of the rural
construction effort reportedly is opposed by Premier
Ky and Chief of State Thieu, but Deputy Premier Gen-
eral Co, who is also minister of war and reconstruc-
tion, is backing it strongly. General Co would be-
come coordinator of military and civilian programs
associated with pacification under this proposed
reorganization, and rural construction would be
firmly in the civilian chain of command running
through province and district chiefs. Rural con-
struction cadres and political action teams would
probably come under the Ministry of the Interior along
with the police. Another significant change would
transform the Ministry of Psychological Warfare into
the Ministry of Information and Chieu Hoi.
3. USOM reports that rural construction funds
budgeted for the year 1965 probably will not be ex-
pended by the end of the year. Overall, it appears
that no more than one quarter of the total funds will
be expended; in some areas, notably public works and
construction-type activities, probably no more than
five percent of the available funds will be spent.
Officials of the Ministry of Rural Construction, rep-
resentatives of other interested ministries, and USOM
officials cite as reasons for the lack of progress
in the construction portion of the program a)''absence
of local security, b) shortages of construction ma-
terials and technical personnel, c) unrealistic price
restrictions, d) competition from US military construc-
tion (presumably for manpower and materials), and e)
cartels formed in certain provinces by contractors who
portion out the work among themselves and circumvent
competitive bidding practices.
4. An increase of 17,000 was recorded in refugee
numbers during the week ending 19 October, bringing the
total to date to 697,000.
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5. The number of Chieu Hioi returnees dropped
sharply during the past week, according to'figures
provided by GVN officials. Only 179 returnees of
all categories were recorded, compared with the
934 who had returned to government control the pre-
vious week. Of the 179, 65 were military returnees,
six political cadres, and,108.civilians, as opposed
to 283, 90, and 934 in these respective. categories
the previous week.
6. USOM reports-that they are closely watching
three provinces (Phuoc Long, Vinh Binh, and,Bac Lieu)
where prevailing conditions are described as possibly
similar to those leading up to the withdrawal of the
USOM team from Binh Tuy Province in September. In
the latter case, the province chief threatened the
lives of the USOM team after they had made investiga-
tions into alleged corrupt practices on his part.
USOM hopes to prevent a recurrence of the Binh Tuy
episode, and therefore has ordered evaluations on the
effectiveness of all province chiefs from their pro-
vincial representatives.
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II. DEVELOPMENTS IN THE BLOC
1. There are indications that the MIG force in
North Vietnam is possibly being augmented and that
at least four more of the MIGs that have been at Phuc
Yen Airfield have been deployed to Kep Airfield.
During the week, one additional high-altitude photo-
drone was destroyed by SAM fire in the Haiphong area.
A second drone failed to return from a mission over
the DRV and is also presumed to have been destroyed
by a.surface-to-air missile. To date, four drones
have been lost to missile fire. Photography of SAM
site 32, near Phu Lang Thuong, showed both occupancy
and operational status on 21 October, but when a strike
on the site was executed, pilots found that it had been
evacuated. Antiaircraft, artillery had remained, how-
ever,'~ and accounted for the loss of one of the attack-
ing aircraft. The continued arrival of Soviet- and
Chinese-made trucks in North Vietnam is contributing
to Hanoi's ability to maintain a slow but steady flow
of goods and materials to the south and southwest.
The tonnage being transported, its destination, and
its planned use cannot be determined, but by a combina-
tion of porters, trucks, and inland waterways, the
North Vietnamese keep essential goods moving south--
including materials destined for guerrilla forces in
Laos and South Vietnam.
2. The North Vietnamese moved carefully this
week in order to avoid becoming embroiled in the Sino-
Soviet controversy. At the World Federation of Trade
Unions' (WFTU) congress recently concluded in Warsaw,
the DRV attempted to stay"in the middle as the Chinese
and Soviet delegates attacked each other on the issue
of peaceful coexistence and on several procedural
questions that each considered important to its posi-
tion. Hoang Quoc Viet, head of the DRV delegation,
confined his major address to the situation in Vietnam.
He reiterated Hanoi's standard line on a settlement
of the war, gave balanced praise for the support
rendered by both the Chinese and Soviets, and called
upon the congress to adopt resolutions supporting the
Vietnamese people. Hoang left to the second ranking
member of his delegation, Nguyen Minh, the attempt to
bridge the ideological gap that had split the congress.
Minh, in a short speech several days after the major
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Soviet and Chinese address, called?upon the WFTU to
"support the policy of coexistence of socialist
countries, not treating it, however, as the only
possible way to fight for peace." The Vietnamese
abstained from voting on these issues on which the
Chinese and Soviets were at odds.
3. Fear of being commited to one side or the
other in. the rift may also have prompted the Viet-
namese to call for a postponement of the upcoming
Afro-Asian conference in Algiers. DRV Foreign Min-
ister Nguyen Duy Trinh informed his Algerian counter-
part on 23 October that the DRV, "sharing the views
of many Asian:and African countries," deemed it
necessary to postpohe the conference. A crucial
issue in the preparations for the conference has
been whether or not the Soviet Union may be officially
represented at Algiers. The Chinese have bitterly
fought any move to invite the Soviets, and the Viet-
namese would find themselves in a difficult position
should they be required to vote on Soviet representa-
tion. An additional reason for the DRV's call for
postponement may be the recently announced Chinese
decision not to attend the conference if it is held
as scheduled. With Chinese influence absent from
Algiers, the possibility of the passage of a moderate
resolution on the Vietnam issue would be greatly im-
proved. Hanoi has been increasingly concerned that
such a resolution would crop up at this or a similar
conference. Indeed, this concern probably prompted
regime officials earlier in.the month to urge rep-
resentatives to the OAU Conference in Accra to avoid
discussing the Vietnam question altogether.
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III. 'THIRD COUNTRY DEVELOPMENTS
A. AFRO-ASiIAN.CONFERENCE
Foreign Minister Tran Van Do informed Ambassador
Porter on 25 October that the GVN plans to cable
Algerian Foreign Minister Bouteflika affirming Sai-
gon's right to participate in the Afro-Asian confer-
ence scheduled to begin in Algiers on 5 November. A
foreign ministers meeting on 28 October precedes the
conference. The GVN also intends to send instruc-
tions to its representatives in the various Afro-
Asian countries whose foreign ministers are likely
to attend the meeting, requesting that these countries
argue for the admission of the South Vietnamese dele-
gation.
Foreign Minister Do told Ambassador Porter that
he had called in the Japanese ambassador and asked
him to transmit a verbal statement to the Cambodian
Government accepting GVN responsibility for the 15
October incident in which a Cambodian border village
was bombed. The statement also offers to consider
compensation. Do stated that he had handled the
matter in this manner because the GVN had never re-
ceived an official protest from the Cambodians.
C. AMBASSADORIAL APPOINTMENTS
1. The appointment of Vu Van Thai as the GVN ambass-
ador to the US i still not officially approved and
the letters of credence have not yet been signed.
The State Department has learned that Thai has been
informed that Ambassador Tran Thien Khiem is not
planning to leave his post until after January,
which has resulted in Thai giving serious considera-
tion to resuming his job at the United Nations. With
Khiem slated to become ambassador to Taiwan, he re-
portedly has investments in the US that he must
liquidate.
2. In the meantime, Foreign Minister Do has in-
formed the US Embassy that he would attempt to get
final approval on the Thai and Khiem appointments.
He added that he is also awaiting a definitive de-
cision from the Military Directorate on the appoint-
ment of Pham Dang Lam to Manila.
-12-
Approved For Releas> 6IND Gf$JRET00472A001800040004-5
NO FOREIGN DISSEM
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 Approved For RJ ase 2002/05/20 : CIA-RDP79T0047241800040004-5
SOUTH VIETNAM BATTLE STATISTICS, 1965
WEEKLY REPORT
16 Oct - 23 Oct
PERSONNEL LOSSES (KILLED IN ACTION, MISSING IN ACTION, CAPTURED)
GOVERNMENT
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