Created: 6/19/1962

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a. As i goes oo and the extraordinary Chinese Communist military buildup continues, our confidence in the assessment that this movement is primarily defensive ln purpose Is dwindling. Wo are unable to faOO any fully satisfactory explanation for this large movement, and we therefore feel that the possibility of some offensive action (perhaps against the offshore Islands) cannot be dismissed.

b. We now have indications that

divisionsoWHfw rj Military Region. This would moreouble the f ground forces deployed in the area before the current

c. Tho buildup is being carried out rapidly (with obvious prior, secretly (with obvious design to achieve tacticalnd, ln the case of ground forces,cale far ln excess of that which we would expectenerally Improved defensive posture were its sole purpose. we note that forces seem to be concentrating in the areasthe Nationalist-held offshoreto tho exclusion of other (more likely) areas of Nationalist attack.



The President


reports from Vientiane suggest that the constitutional wrinkle which halted progress yesterday was smoothed outeeting between Souvanna and the King early today. We have no details yet,lane la being dispatched to tbe Plalne des Jarres to bring Soupbannouvong to Vientiane, presumably forof the new government.

For The PresidentSecret

4. CanadianMinister Diefonbaker's

Conservative Party suffered heavy Losses in Monday's elections but remains in power. Final returns show the standings ineatto be: a loss; Liberals 97 (gain; and one undecided.

5. expected, this weekend's truce




For The President

and amnesty agreement has boonby die-hard elements ln the OAS. We note that no Important Moslem leader has allowed his name to be associated with the putative agreement either, and wo doubt that any will. Nonetheless, the truce announcement will probably serve its primary purpose, which seems to be to allow those in the OAS who wish to give up the fight to do so grace-

Late press reports state that coalition talks have broken down over distribution of ministries, and Premier-designate Inonu has again submitted his resignation toGursel. We do not yet know the outcome of an eleventb-hour conference between the President and political leaders, but Inonu will probably again accept equest from Gursel to give it another try. Falling this, tbe military, perhapsod from Inonu, may novo in.


Belgian Queen Mother Elisabeth has abandoned plana to visit Cuba.

Indonesian demands for Dutch assurances having now boon met, we expect that the secret talks will be resumed sometime next week.

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