The damage inflicted to North Vietnamese
 industry by the bombing undoubtedly has crushed
 North Vietnam's immediate hopes for continued
 economic growth. Modern industry, however, plays
 only a small and limited role in North Vietnam's
 ability to continue the war. By any measure, even
 by the standards of a less developed country, North
 Vietnam's industry has offered few lucrative targets
 in terms of military significance.

The damage inflicted on military targets
 also has had little significant impact on North
 Vietnam's overall military capability. Attacks
 against these targets, however, have disrupted
 normal military activities, have caused the abandonment
 of many facilities such as barracks and supply
 depots, and have forced widespread dispersal of
 equipment and forces. Despite these disruptions,
 the North Vietnamese have been able to strengthen
 and improve the capability of many military systems.
 During the past three years, Hanoi has developed its
 air defense from a rudimentary state to a complex,
 sophisticated system and has increased its troop
 strength from 240,000 to 385,000 men.

The cumulative effects of the bombing have
 caused numerous management and logistical problems
 for the North Vietnamese and have raised the cost of
 Hanoi's support of the insurgency in South Vietnam.
 Up to 600,000 persons are engaged in full-time or
 part-time work defending against or countering the
 effects of the bombing. The movement of men and
 supplies has become more difficult and time consuming,
 and a substantial volume of war and war-supporting
 material has been destroyed in transit.

The increased intensity of the air war in
 1967, particularly during the past three months, is
 shown in the tabulation below, which summarizes the
 value of damage to economic and military targets.
 The estimated cost of damage inflicted on
 economic and military targets during the first eight
 months of 1967 was about 40 percent greater than
 the damage inflicted in all of 1966. Damage to
 economic targets in the last three months, even with
 bomb damage assessment incomplete, was about equal
 to the damage inflicted in the five-month period of
 January through May.

- 11 -

TOP SECRET
 TOP SECRET