THE PRESIDENT'S DAILY BRIEF 4 OCTOBER 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993948
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: October 4, 1973

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The President's Daily Brief
4 October 1973
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Exempt from general
declassification schedule of E.O. 11652
exemption category 58(1),(2).(3)
declassified only on approval of
the Director of Central Intelligence
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THE PRESIDENT'S DAILY BRIEF
4 October 1973
PRINCIPAL DEVELOPMENTS
Austrian officials are searching for ways to preserve
their country as an emigration route for Soviet Jews
without reneging on their pledge to close the Schonau
transit center. (Page 1)
Soviet Foreign Ministry official Kuznetsov has pri-
vately summarized Moscow's current position on the
force reduction talks. (Page 2)
Kosygin's, visit to Yugoslavia Marked another step in
the improvement in Soviet-Yugoslav relations, despite.
continuing differences on some big issues. (Page 3)
Chinese
Burma. (Page 5)
Peking is purchasing factories from the West at a
much higher rate than ever before. (Page 6)
On Page 7 we discuss the background of Bolivian Pres-
ident Banzer's decision not to visit Washington this
month.
Notes on an easing of the price of gold, on Peron's
call for a purge of Marxists, and on shifts of top
figures in East Germany appear on Page 8.
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AUSTRIA - MIDDLE EAST
Austrian officials are searching for ways
to preserve their country as an emigration
route for Soviet Jews without reneging on
their pledge to close the Schonau transit
center. Chancellor Kreisky wants above all
to prevent future terrorist incidents in
Austria. The transit center ?had been the
target of previous attacks, convincing
Austrian officials that it was becoming an
unacceptable security risk.
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Austrian officials argue that the closing
of Schonau will have only minimal impact
because most emigrants spend only two or
three days there before departing for Is-
rael. The Zack of facilities will never-
theless create difficulties since the num-
ber of Soviet Jews passing through Austria
is quite high, amounting to 678 last week.
Soviet media have given minimal coverage to the
incident and have avoided noting that the terrorists?
targets were Soviet emigrants.
This treatment reflects the broader dilemma
Moscow faces in dealing with the problem of
Jewish emigration--how to placate Western
demands that restrictions be eased without
further disturbing Soviet-Arab relations.
The generally favorable reaction of Arab
states to the terrorist incident makes the
Soviet policy choice more difficult.
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USSR-MBFR
Soviet First Deputy Foreign Minister Kuznetsov
told Under. Secretary Casey on Tuesday that force re-
ductions in Europe should apply to both stationed
and indigenous forces. He did not state a prefer-
ence between simultaneous reductions in both cate-
gories and the US approach of phased reductions
starting with US and Soviet forces.
Kuznetsov said that detailed instructions for
the Soviet delegation are still being prepared. He
listed three other basic points that would go into
the instructions: no harm should be done to the
security interests of any state, stationed troops
should return to their homeland with their armaments,
and only the 11 "full" participants should make de-
cisions at the talks. Each of them has been a staple
of the Soviet position for some time.
Kuznetsov also made a strong pitch for continued
US-Soviet consultation on force reduction questions,
noting that "we" had worked out many problems during
the preliminary talks and urging similar contacts
when the substantive talks open in Vienna on October
30.
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USSR-YUGOSLAVIA
Premier Kosygin's week-long trip to Yugo-
slavia marked another step in the general
improvement in relations since 1971, but
left the two countries still at odds on
some fundamental issues.
Kosygin stressed socialist cohesion while his
hosts emphasized nonalignment and separate roads to
socialism. The Yugoslays persuaded the Soviets to
insert favorable references to nonalignment and re-
spect for the "existing characteristics" of the two
countries into the final communique.
The two sides wrestled specifically with eco-
nomic problems, presumably focusing on how Belgrade
would use the $540-million credit extended by Moscow
last year. The communique does not indicate what,
if any, specific agreements were reached. Its ref-
erences to long-term cooperation and planning are
couched in purely bilateral terms, avoiding any ref-
erence to CEMA, where Yugoslavia holds observer status.
Kosygin traveled widely outside Belgrade, visit-
ing four republics. The Yugoslays interpreted his
presence in Macedonia as support for their position
in the age-old feud with Bulgaria. In a later speech,
however, Kosygin offended some Yugoslays by praising
Soviet nationality policy while passing lightly over
Yugoslavia's efforts in this field.
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CHINA-BURMA
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CHINA
Peking's purchase of a $300-million petrochemi-
cal complex from France last week raises China's plant
purchases this year to about $900 million. The Chi-
nese also are negotiating with both Japan and West
Germany for a $375-million steel mill.
This year's contracts, mostly for the fer-
tilizer and synthetic fabric industries,
already total about nine times the previous
high set in 1965. The purchase from France
is the largest import contract China has
ever signed with a Western country.
The sharp increase reflects Peking's deci-
sion to make much greater use of foreign
equipment and technology in seeking to
increase agricultural production and pro-
vide more consumer goods.
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BOLIVIA
President Banzer's decision not to visit the US on
October 16 as scheduled may well have been motivated
by a belief that the trip would not produce signifi-
cant economic aid.
The Bolivians have officially explained that stern
new economic measures and the anticipated negative
public reaction will require Banzer's presence in
La Paz. Such measures are probably necessary before
the IMF will advance further funds, but they could
have been put off. Previous discussion centered on
delaying the measures until after elections next May,
and Banzer had hoped that the US trip would open up
new financial sources and make austerity--always
politically dangerous--unnecessary.
Banzer considers the US response to his expressed
"needs" to be niggardly, however, and apparently
sees no reason to come to Washington unless he can
return with substantial aid. By dramatically show-
ing his displeasure in a last-minute "postponement,"
he may hope to elicit a more sympathetic response.
It is also possible that Banzer fears a plot. He
is aware that the largest party in his coalition is
not fully committed to his government and that
younger military officers are restive. In recentZy
cracking down on labor unions, he alleged a vast
conspiracy involving Cuba and political exiles, but
these charges appear to be without substance.
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130
100
90
80
a
0
1973
March
?
London Gold Price
April May June July August * September Oct
Renewed currency
turmoil begins
60.
European Joint Float
implemented
554664 10-73
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NOTES
Gold: For the first time since May, the price
of gold has now remained below $100 an ounce for
three consecutive days. The IMF meetings in Nairobi
produced no sign that an increase in the official
gold price was in the offing, and this apparently
helped reduce speculative demand. At the same time
the principal gold suppliers, South Africa and the
Soviet Union, have continued their relatively heavy
sales. Two weeks ago Pretoria sold gold from re-
serves, as well as from new output, in order to pay
for increased imports.
Argentina: Peron's call for a sweeping purge
of all Marxist elements could stir up trouble with
radical leftist youth and labor groups, and even
with provincial governments. The potential for
trouble is particularly strong within the labor move-
ment, where a mass expulsion of leftists could lead
to extensive violence. Suspicions that left-wing
Peronists were responsible for the recent killing of
a key labor leader may explain Peron's decision. It
is also possible that the term "Marxist" will be ap-
plied indiscriminately to justify action against any
opponent of the regime.
East Germany: With Premier Willi Stoph moving
up to be chief of state, party leader Erich Honecker
has promoted a protege, Horst Sindermann, to the pre-
miership. Sinderman's new post gives him enhanced
influence and enables Honecker to tighten his grip
on the party and regime. Honecker now may seek to
move further away from the collective leadership
principle and toward personal dominance.
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Top Secret
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