THE SITUATION IN SOUTH VIETNAM

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• Collection: Tet Declassified
• Document Number (FOIA) /ESDN (CREST): 06772384
• Document Creation Date: January 28, 2019

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DIRECTORATE OF
INTELLIGENCE
Intelligence Report
The Situation in South Vietnam
(Weekly)
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5 February 19683.5(c)
No . 0506/68
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receipt by an unauthorized person is prohibited by law.
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
THE SITUATION IN SOUTH VIETNAM
(29 January - 4 February 1968)
C ONTENTS
Section
POLITICAL SITUATION
Government reaction to current crisis;
Support for government measures; Impact
on the government; Impact on the popula-
tion; Communist propaganda treatment of
the offensive.
REVOLUTIONARY DEVELOPMENT II
Effects of the Communist offensive on
Revolutionary Development efforts.
ECONOMIC SITUATION III
Rice situation; Unequal taxation;
Prices; Currency and gold.
ANNEX: Weekly Retail Prices in Saigon (table)
Saigon Free Market Gold and Currency
Prices (graph)
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I. POLITICAL SITUATION
After getting off to a very slow start,
the government has begun to give its
attention to problems of a nonmilitary
nature arising from the current crisis.
A joint Vietnamese-US task force has been
set up under Vice President Ky to
handle emergency assistance to victims
of Viet Cong attacks and such other
tasks as clearing major lines of commu-
nication. The National Assembly has
pledged its support for the government
and various other circles are offering
assistance, but the government is still
coming under criticism for its slowness
in acting.
The population is generally confused
and fearful and a number of wild rumors
are rampant. Massive refugee flows have
been reported throughout the country,
public services have been curtailed or
interrupted, vital supplies are short,
and prices are soaring. There is little
evidence, however, that the Viet Cong
have received any significant popular
support, despite their propaganda treat-
ment of the offensive as a spontaneous
popular uprising aimed at overthrowing
the Saigon government and replacing it
with a coalition government. Communist
radio broadcasts claim that an organization
called the "Alliance of National and
Peace Forces" has been established and
has become the rallying point for coor-
dinating political action. Although the
Communists claim the "alliance" is a
national organization, only the Saigon
and Hue branches have been specifically
referred to and the "alliance" shows no
signs of being anything more than a paper
organization.
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Government Reaction to Current Crisis
1. After a slow start, the government has
begun to give its attention to problems of a
nonmilitary nature brought on by the current
crisis, and it ha received the public support
of the National Assembly and many elements of
the population.
2. With President Thieu in My Tho when the
Viet Cong offensive broke on 30 January, Vice
President Ky took command at the Joint General
Staff and ran the government effort until Thieu's
return, when Ky reportedly advised Thieu to
declare martial law and impose certain other
emergency measures. On the evening of 31 January,
Thieu announced martial law, a 24-hour curfew,
closure of all places of entertainment, and a ban
on meetings and demonstrations. Thieu has since
told American officials that, although his actions
were not taken under constitutional provisions,
they do come under a previous law, still in
effect, which permits the emergency application
Of such measures.
3. Prime Minister Loc
was rather bewildered
by the whole situation. Loc reportedly told an
adviser that civilians should do nothing until
the military had subdued the Viet Cong and
returned the country to a semblance of normality.
As a result on 1 February,
Loc rejected the adviser's suggestions that the
government strengthen health, postal, and informa-
tion services to help the people and demonstrate
to them that the government had not been completely
immobilized. He also reportedly refused to do
anything toward enlisting the active support Of
labor, Buddhist, intellectual, and other groups.
4.
government functioned
first few days of the
lack of coordination,
conflicting orders to
to report for work during the curfew.
not enough had been done to reassure
the people throughout the country and feared a
further deterioration of public morale in Saigon
although the
"reasonably well" during the
crisis, there was a noticeable
evidenced particularly in
civil servants about whether
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and a severe shortage of supplies if the Viet
Cong were not soon cleared out of the city.
5. By 2 February, however, the government
had begun to take hold of the situation. Thieu
reportedly met that day with Loc, Ky, and several
key cabinet members and military men to discuss
urgent food and medical needs and to arrange
for a public pledge of support from National
Assembly leaders. On 3 February a joint Vietnamese-
US task force was formed, under the chairmanship
of Vice President Ky, to handle both the most
immediate and the longer range problems. The
task force will set up an operations center in
Saigon and similar centers in the provinces
and will receive both requests for help from
the local populace and offers of assistance
from any quarter. These centers will be under
Vietnamese guidance and US assistance will be
provided where needed. The task force will
address itself to such efforts as clearing major
lines of communication'tb assure sufficient
passage of vital supplies and improving the
information and psywar effort.
6. Although the emergency measures remain
in effect and have in fact been increased with
the addition of press censorship, the 24-hour
curfew has been eased in Saigon to permit civil
servants and others to return to work and to
allow the populace to procure needed supplies.
Water and electricity, which had been out for a
time early in the crisis, have been returned to
near normal in Saigon, and on 4 February trucks
selling foodstuffs were circulating in the city.
Th-ieu has announced that police and members of
the armed forces throughout the country will
assist in the provision of food and other
supplies and will help victims of Viet Cong
attacks.
Support for Government Measures
7. Offers of assistance and pledges of
support are beginning to come in to the government.
Upper and Lower House officers met on 2 February
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and on the following day issued a communique
denouncing the Communists' actions, pledging
the assembly's cooperation with the government
in efforts to restore security and help attack
victims, and calling for national unity in the
face of the Communist offensive. A plenary
session of the Lower House, attended by only
about 30-35 deputies, issued a similar resolution
on 4 February, adding an appeal to the people
to support and cooperate with the emergency
measures imposed by the government. The Upper
House defense committee has also requested public
support.
8. Both the Vietnamese Confederation of
Labor and its Saigon Council have publicly
pledged their organizations' support for the
government, and the confederation is planning
to organize a committee to provide food and
temporary housing for victims of the Viet Cong.
Moderate Buddhist Thich Tam Giac, working in
close cooperation with the government, has
mobilized his northern Buddhist organization to
begin collecting and distributing relief supplies
in Saigon and its suburbs. Even militant
Buddhist leader Thich Tri Quang, according to
a clandestine source, has proposed that the
militants open reception centers to which the
people could come for emergency supplies.
9. Despite this widespread assistance, the
government has not been free of criticism. Tri
Quang, for instance, refuses to give a public
promise of support because he is reportedly
angered by the government's violation of his
An Quang Pagoda, where a force of Viet Cong were
entrenched for several hours on 1 February. Tran
Quoc Buu criticizes "government inaction" in the
crisis and, when the government rejected his
proposal that meetings be organized in workers'
neighborhoods to rally the people against the
Viet Cong, he charged that "the government does
not want the help of its own people."
10. Some National Assembly members have also
scored the government's slowness in acting, and
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one prominent senator told an embassy officer
that the Communist attacks revealed the government's
"weakness and ineffectiveness" and said he
regarded the situation as serious enough to
warrant assembly consideration of a no-confidence
vote. The assembly as a whole, however, has
taken care to present a unified face to the
public and to assure the public that it is firmly
behind the government.
Impact on the Government
11. No clear picture can be gleaned at this
point of the long-range impact of the crisis on
the government. Prime Minister Loc's indecisiveness
and apparent complete failure to take any necessary
steps to help the situation may prove to be his
undoing. He is becoming the target of widespread
criticism and appears to be getting slightly
defensive about it. In a statement possibly
designed to cover up his own ineffectiveness, he
reportedly told a cabinet member on 4 February that
he now fears the cabinet will be dissolved through
military pressure and that Thieu will rule indef-
initely by decree.
12. Although this is, of course, a possibility,
there is no evidence to indicate that such a
situation is developing. The government's decrees
have thus far received support from the legislature,
and no extra-legal measures have yet been taken.
As for the military, even the most political of
the senior generals appear to be too much involved
with fighting the war at the moment to concern
themselves with pressuring any governmental
changes.
13. Both President Thieu and Vice President
Ky have apparently acted correctly, and Thieu has
shown an ability to make decisions in a crisis
that has not always been evident in less drastic
situations. Some observers seem to have seen in
Ky's actions during the first day of the crisis
a possible move to assume some power for himself,
but there seems little else he could have done
with Thieu out of town, and his actions since
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have, given no evidence that he is contemplating
such a move. On the whole, the various elements
of the government, despite some continued internal
sniping, appear to be conducting themselves well
under the circumstances and to have a realistic
picture of what must be done and how it must be
accomplished.
Impact on the Population
14. Popular reaction to the crisis has, in
general, been one of confusion and fear. Rumors
are rampant in some areas of a possible coup in
Saigon, a possible coalition government, and more
Viet Cong attacks. Rumors began on the first day
of the offensive that, since Vice President Ky
had signed the martial law decree, President
Thieu had either been killed by the Communists
or kidnapped by forces staging a coup. Confusion
on this issue is still prevalent in some areas,
as are rumors that the US permitted the attacks
as a means of pressuring the government into
negotiating.
15. Attitudes toward the Viet Cong and their
actions range from outrage at their flagrant
violation of the cease-fire to fear and surprise
at their strength. Many have criticized the
government's failure to provide security for
them, and some local observers fear that the
net result will be a popular loss of confidence
in both the government and the US. Despite this,
however, there has been no indication of a
significant swing to the Viet Cong and no apparent
public response to the new Communist front
organizations.
16. In addition to the psychological impact
on the people, there has of course been a severe
disruption of their normal lives. Massive
refugee: flows have been reported throughout the
country, both into and out of urban centers,
depending on the situation in various areas.
Public services have been all but curtailed in
some localities and vital supplies are running
low. Prices have soared; Saigon reports tripling
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and quadrupling of prices on many food items and
other commodities, and the situation is the same
in other areas.
Communist Propaganda Treatment of the Offensive
17. The Communist military offensive is
being portrayed by Hanoi and the Liberation
Front as a spontaneous popular uprising by
"revolutionary forces" aimed at the overthrow
and replacement of the Saigon government. The
political and military role of the Front is
apparently being downplayed deliberately, and the
"revolution," as the Communists c&-11 this push,
is said to have generated new, broadly based
organizations which will eventually establish a
coalition government for the South, in conjunction
with the Front.
18. A statement issued by Viet Cong head-
quarters on 31 January said that the time had
come for a "general offensive" and claimed that
a national organization called the "Alliance of
�National and Peace Forces" had become a rallying
point for coordinating political action. Com-
munist broadcasts claim there has been an enthu-
siastic popular response to a call from the
"alliance" demanding that the US withdraw and
end the war, and that negotiations be conducted
with the Liberation Front to restore peace and
bring about "independence and sovereignty" for
the South. An appeal from the "alliance" in Hue,
broadcast by the Viet Cong radio on 2 February,
mentioned a coalition government for the first
time, claiming that one of the "alliance's"
goals was the establishment of a "national
coalition administration" in the South and the
setting up of normal relations with the North
in order to effect reunification.
19. The new "alliance" presently shows no
signs of being anything more than a paper
organization created by the Communists to serve
their purposes. Although the "alliance" is
presented as a national organization, Communist
broadcasts have referred specifically to alliances
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only in the cities of Saigon and Hue. There are
no details about the organization in Saigon; a
Hanoi broadcast reported only its establishment
and said it had issued a manifesto. In Hue,
however, Hanoi claims the "alliance" is headed
by Le Van Hao, a doctor of ethnology and professor
of Saigon and Hue universities. Hao reportedly
read an "appeal" over Hue radio.
20. Hao seems to be a non-Communist political
nonentity of the same stripe found throughout
the ranks of the National Liberation Front. He
was active in the 1966 Buddhist struggle movement
and was imprisoned between June and October of
that year. Little is known of his influence in
central Vietnam or even at Hue University, but
he may be able to generate some support for his
"alliance" among university students, who have
frequently been active in antigovernment agitation.
21. Beyond their apparent enlistment of Hao,
however, there is virtually no evidence of any
substance to Communist claims of mass support.
Even the existence of the "revolutionary organizations"
and "alliances" is unproved and there is nothing
to suggest they have any popular support or
following. The Communists' purpose in creating
such an organizational facade remains unclear.
They may have intended to use it to help set up
a coalition government if their offensive won
popular support, and they may still intend to do
so even though this has not happened. They could
also use these organizations as scapegoats for a
failure of their 'uprising" if their current
efforts peter out.
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II. REVOLUTIONARY DEVELOPMENT
It will probably be some time before the
full scope of the enemy's military offensive is
known, especially in the rural areas. The Revo-
lutionary Development cadre programs seem to
have avoided serious losses; however, other
pacification-related programs appear to have
suffered heavily. The withdrawal of Vietnamese
Army troops from RD support may, however, force
the RD teams to relocate also. The time it will
take for the Vietnamese to begin functioning
again is anyone's guess, but the programs which
must bear the brunt of the rehabilitation effort
--refugees, health, welfare, and psychological
warfare--have not responded well in the past. It
is still questionable whether, despite intensive
US efforts to assist, the South Vietnamese will
be able to meet the burdens they presently face.
1. It will probably be some time before the full
scope of the Communist offensive is known, especially
in the rural areas. The unprecedented wave of attacks
during the enemy's self-proclaimed lunar new year cease-
fire involved forays against at least 32 of South Viet-
nam's 44 provincial capitals and the autonomous cities
of Saigon and Da Nang. Fragmentary reports indicate
that over 50 district headquarters were also attacked
between 30 January and 2 February.
2. It is somewhat unlikely that the enemy military
action was designed to hold permanently any of the prin-
cipal towns; however, there are indications that the
Communists were willing to commit some of their reserves
to exploit any successes, and that they may have sought
to retain control of some cities for at least several
days.
3. Despite heavy losses, the enemy retains a sig-
nificant military capability. Available evidence indi-
cates that as of 3 February, the Communists still had
major, uncommitted combat elements in I and II Corps.
The situation in III Corps is less clear, but it may
be substantially the same. In IV Corps, most enemy
battalions apparently were committed, although their
degree of commitment varied.
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4. The psychological impact on South Vietnamese
attitudes--and international opinion--of the enemy's
ability to enter major towns and bases, if only tem-
porarily, and to disrupt the country seriously is
bound to be significant and possibly far-reaching.
Friendly morale may be further eroded as a result
of the heavy civilian casualties. The enemy has un-
doubtedly succeeded in shaking civilian confidence
in the Saigon government and, as information comes
in, it may become apparent that he has also inflicted
serious setbacks to security and pacification programs
throughout the country. Vietnamese and allied resources
may have to be diverted from pacification tasks for
some time, and the success of the 1968 pacification
plan is in doubt before it has even begun to be acted
upon.
5. There are tenuous indications that one of
the strategic objectives of the enemy campaign may
have been to gain, or in many cases to regain, control
of large segments of the rural population, utilizing
guerrilla and district units, while allied forces
were diverted toward the protection of the urban areas.
Tactically, the Communists appear to have already
partially succeeded in forcing extensive allied troop
redeployments, tying down and thinning out allied mili-
tary units in defensive positions, disrupting the GVN
administrative structure in p:eparation for possible
future Communist political agitation, and demonstrat-
ing the inability of the GVN to protect the population
under its control.
6. Initial reports tend to verify the supposi-
tion that the enemy may be seeking to regain control
of portions of the rural areas lost to the GVN. A
US official in Binh Long Province, located in northern
III Corps, indicates that, except for the hamlets
surrounding the provincial capital, the Communists
probably control most of the hamlets in the province.
In the II Corps coastal provinces of Binh Dinh and
Binh Thuan, the enemy--after being driven out of the
capital cities--was reported to be attacking and/or
occupying hamlets on the fringes of the urban areas
and along segments of National Highway 1, principal
pacification zones in both provinces. In Revolutionary
Development (RD) priority provinces such as Quang Ngai
in I Corps and Vinh Binh in IV Corps, there is as yet
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little information about the situation in the rural
areas or the status of the RD teams. The same is
true of most other provinces in South Vietnam, and
it may take at least a month before the enemyss impact
on the rural areas can be assessed.
7. In most of the urban areas, US officials
have reported that the Communist attacks and, in
particular, allied reactions have made many thousands
of people homeless. This problem is compounded by
the movement in some provinces of large numbers of
rural inhabitants toward the cities. For example,
the population in Quang Tri city has reportedly tripled
or quadrupled in the past 72 hours, Hue has about
4,000 homeless persons, Quang Nam Province is reported
to have "masses" of refugees, about 5,000 people are
reported to be homeless in Phan Thiet--the capital
of Binh Thuan, and Bien Hoa city has anywhere from
6-8,000 refugees. Other provinces which have reported
significant numbers of refugees or homeless include
Darlac, Kontum, Gia Dinh (including the city of Saigon),
Dinh Tuong, Chau Doc, and Kien Hoa--where about 50 per-
cent of the provincial capital was reported to have
been destroyed.
8. One of the principal thrusts of the pacifi-
cation program, the Revolutionary Development teams,
may have been by and large bypassed by the Communists.
In most of II and III Corps, advisors have reported
that the enemy incidents between 29 January and 3 Febru-
ary were not heavily directed against the resources
of the RD cadre programs. The enemy actions forced
the RD teams out of their hamlets, however, and prob-
ably caused serious damage to the pacification program
in the II Corps provinces of Kontum and Darlac.
9. In Quang Tri Province in I Corps, the teams
were forced to relocate when the Vietnamese Army bat-
talions in support of RD were withdrawn into the city.
Prior to this, the teams in Quang Tri had suffered
only light enemy harassment. Moreover, enemy forces
driven off from their attack on Quang Tri city are now
spread throughout the pacification area, where heavy
fighting may be required to dislodge them. In most
of IV Corps, the status of the teams remains generally
unknown.
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10. The low RD cadre casualties thus far reported
may be due to the Tet holidays. In most provinces,
only 50 percent of the teams' members were in place.
It is possible that some of the cadres away from the
teams may have been injured while others may have be-
come discouraged to the point where their return is
unlikely. The loss of life to as well as the psycho-
logical impact of the enemy attacks upon government
district and provincial officials may have been sig-
nificant. Since the RD cadre programs stand or fall
on the confidence and interest of these officials in
them, the officials' future support of these programs
may be in question. At a minimum, the cadre programs
will probably suffer a lengthy period of inactivity
in many provinces.
11. Another pacification related cadre group,
the Provincial Reconnaissance Units, appears to have
been heavily engaged in combat in many provinces.
These units were reported to have made a credible
showing.
12. It may take at least 30 days before the US
CORDS advisory effort is again functioning smoothly.
The time it will take for the essential ingredient--
the Vietnamese--to begin functioning again is anyone's
guess; the cadre programs, however, will probably be
functioning before other pacification related opera-
tions.
13. The weakest GVN programs--the care and hand-
ling of refugees, social welfare, health, and psycho-
logical warfare--are the ones which must bear the
brunt of the rehabilitation efforts in the wake of
the Communists' offensive. These programs have not
responded well in the past and may not be able to
meet the burdens they face at present. Intensive
US efforts are under way to assist the Saigon govern-
ment in these areas.
14. Some incidents have come to light which sug-
gest that segments of the Vietnamese populace knew
that some of the recent attacks were impending but
may not have alerted GVN officials. One example of
this is the lack of Tet celebrations by residents in
Chau Doc Province. The drop in the price of rice in
Saigon in the week prior to the holiday may even in-
dicate a widespread sell-off by merchants sensing
something in the wind.
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15. These factors, plus the Communists' ability
to mass units close to major towns and infiltrate
agents in advance suggest that the enemy may command--
by intimidation as well as persuasion--either more
general support than has been estimated, or that the
population is even more apathetic than generally assumed.
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III. ECONOMIC SITUATION
The rice situation appears more
favorable than it did a year ago, with
production up slightly and stocks adequate,
but several problems remain to be solved.
The Minister of Finance reportedly will
try to eliminate tax inequities resulting
from political influence. Retail prices
in Saigon continued to rise during the
week ending 22 January as expenditures
for the Tet holidays increased. Free
market currency and gold prices declined
for the third consecutive week.
Rice Situation
1. The rice situation in Vietnam--production,
stocks, and prices--appears more favorable than it
did a year ago, although there are some disturb-
ing factors which probably will cause trouble for
,looth US'and_Vietnamese officials during the next
few months.
2. The estimate for the �new crop now being
harvested indicates that output in 1968 will in-
crease slightly for the first time since 1964 (see
the Situation in South Vietnam (Weekly) of 15 Jan-
uary). The increase, however,,results entirely
from higher production in the delta, which in turn
can be accounted for by a recovery of production in
four provinces that were hit by floods in the fall
of 1966. These four provinces, An Giang, Chau Doc,
Kien Phong, and Kien Tuong, produce mainly red
floating rice, which most Vietnamese in the delta
and Saigon do not eat. In the past this type of
rice was either exported or shipped to central Viet-
nam. This year, however, the government will have
a difficult problem disposing of this "surplus"
.because exports are now banned, the deficit in cen-
tral Vietnam is being covered by imported US white
rice, and the price of red rice is currently too
high to compete with corn for animal feed.
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3. The production of white rice during 1968
will not be much changed from 1967. US officials
estimate, therefore, that imports of about 850,000
metric tons will again be needed to meet require-
ments for Saigon and the ripe deficit area in the
north. Actual imports during 1967 of about 750,000
tons were lower than planned because of negotiating
and shipping delays. Deliveries of surplus domes-
tic rice from the delta, however, reached about
275,000 tons, or about 75,000 tons more than ex-
pected. Unlike early 1967 when government stocks
of rice in Saigon were approaching zero with insuf-
ficient imports scheduled to fill the void, the
government now has sufficient stocks and there
should be no shortage of rice. The current govern-
ment stock consists of some domestic rice and some
Thai rice, but mainly US long and medium grain
rice. The stock of medium grain--the most widely
consumed of the types of imported rice--reached a
low point in mid-November, but new shipments of
this rice are now arriving, and the US Embassy re-
ports that the government may soon resume sales to
retail dealers.
4. The price at which the government sells
US rice to retailers is currently one of the major
economic issues under discussion between US and
Vietnamese officials. Since US rice began coming
into the country in 1965, the Vietnamese govern-
ment, the sole importer, has subsidized its sale
to retailers in order to keep imported rice prices
down to the level of domestic rice prices. During
the first three months of 1967, however, prices of
both imported and domestic rice in Saigon rose
sharply because of a shortage of imported rice at
a time when the major part of consumption was being
met by imports. This increase in rice prices dur-
ing 1967 was considered a healthy development by
US officials. Higher retail prices resulted in
higher prices paid to farmers, not only halting the
decline in the peasants' real income, but also, ac-
cording to US officials, providing incentive to in-
crease production.
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5. US officials feel that in order to ensure
that domestic rice prices stay at a level that
would guarantee a suitable price to farmers during
this harvest period and also reduce the large
government expenditure on the subsidy, the govern-
ment should now raise the vqlolesale price of US
medium grain iice. Vietnamese officials have been
reluctant to irritate urban consumers by raising
the price, but have said they would take action if
there were any evidence that paddy prices were
falling. They have also postponed announcing an
official paddy price, which would guarantee farmers
a price at or near recent market levels. The
embassy reports that paddy prices did begin to fall
about 17 January (see paragraph 7), but it is prob-
ably too early to tell whether the decline will
continue. One source reports that during the
cabinet meeting of 25 January a decision was made
to increase POL taxes and rice prices, but other
reporting indicates that the price increase pertains
only to the rice sold in government commissaries
for civil servants and the military, who, of course,
are among the _groups least able to afford such an
increase. The Vietnamese have been telling US of-
ficials that steps to increase taxes and rice
prices will be taken after Tet, but it now seems
probable, in view of the disruption caused by the
recent widespread VC attacks, that these measures
will again be postponed.
Unequal Taxation
6. Minister 3.3(h)(2)
of Finance Luu Van Tinh told the cabinet on
25 January that stricter and more equitable enforce-
ment of tax laws would greatly increase government
revenues. As an example of present inequities, he
cited the great difference in taxes paid in 1967 by
four major Saigon hotels, which he said have roughly
the same type and volume of business (in thousands
of piasters):
Continental 18,000
Caravelle 2,000
Dong Khanh 360
A Dong 280
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3.5(c)
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SFr:
Tinh believes these differences result from political
influence, not ministerial inefficiency, and he
stated his intention to act at once to eliminate the
inequities. the Continental
and Caravelle hotels are owned by foreigners whereas
the other two are owned by Chinese, who know how to
manipulate taxes.
Prices
7. Retail prices in Saigon continued to rise
during the week ending 22 January as consumer pur-
chases for the celebration of Tet (30 January) in-
creased. During the month before Tet, the USAID
weekly price index rose six percent, although this
increase was smaller than those occurring during the
same period in both 1966 and 1967. This year rice
prices did not rise as in past years, and, in fact,
during the week ending 22 January they dropped
sharply. The embassy attributes this decline to an
increase in the supply of new crop rice which farmers
sold in order to obtain piasters for Tet expenditures
In addition, farmers were anxious to sell because
the government has not yet announced an official
price for paddy, which would guarantee farmers a
price near the relatively high market level prevail-
ing during December. Among nonfood items the price
of haircuts rose 60 percent, apparently because of
Tet. The price of white calico, however, declined
9 percent as demand fell off because it presumably
was too late to have new clothes made in time for
Tet. (A table of weekly retail prices in Saigon is
included in the Annex.)
8. Prices of US-financed imports declined for
the third week as businessmen reportedly were liqui-
dating their inventories, which are known to be
substantial. Prices of all goods sampled were either
unchanged or lower.
Currency and Gold
9. Free market currency and gold prices in
Saigon continued to decline as of 22 January. The
price of green dollars declined two piasters to 165
71(..t,
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3.3(h)(2)
3.5(c)
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f
piasters per dollar, and the rate for MPC (scrip)
declined one piaster to 115 piasters per dollar.
The price of gold leaf was 208 piasters per dollar,
or three piasters below the price on 15 January.
(A graph on monthly and weekly currency and gold
prices is included in the Annex.)
III-5
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TABLE
Weekly Retail Prices in Saigon/
13 June
196612/
3 Jan
1967
2 Jan
1968
8.Jan
1968
15 Jan
1968
22 Jan
1968
Index for all Items
Index for Food Items
Of Which:
(In Piasters)
173
225
308
308
318
326
190
L4g
344
342
354
360
Rice-Soc Nau (100 kg.)
1,250
1,700
2,500
2,600
2,600
2,450
Pork Bellies (1 kg.)
90
130
220
210
210
230
Fish-Ca The (1 kg.)
130
150
230
220
240
250
Nuoc Mam (jar)
70
90
150
150
150
150
Index for Nonfood Items
140
195
241
245
251
263
Of Which:
(In Piasters)
Firewood (cu. meter)
360
560
600
650
700
700
Cigarettes (pack)
10
14
14
14
14
14
White Calico (meter)
27
33
52
52
55
50
Kerosene (liter)
7.8
10.5
9
9
9
9
a. Data are from USAID sources.
For all indexes 1 Jan 1965 =
100.
b. Price level just prior to the 18 June devaluation.
500
400
300
200
100
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Saigon Free Market Gold and Currency Prices
PIASTERS PER
US DOLLAR
/
A
/I \
1
,/ -\
,
31 DEC
218
167
L_L_L_L_L_L_L_L_uLLJ_L_J I I I I 1 I I
11111111111
1111-1111111
1965
1966
1967
1968
GOLD: Basis gold leaf worth $35 per troy ounce
.--... US $10 GREEN
- US $10 MPC Military Payment Certificates (scrip)
22 JAN
20
8
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NOV DEC JAN
1968
69482 2-68