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FOREIGN RELATIONS OF THE UNITED STATES 1961-1963, Volume I Vietnam, 1961 Department of State Washington, DC

62. Telegram From the Embassy in Vietnam to the Department of State/1/

Saigon, May 26, 1961, 6 p.m.

/1/Source: Department of State, Central Files, 751K.5-MSP/5-2661. Secret; Priority. Repeated to Bangkok and to CINCPAC for PolAd.

1800. Task Force VN 3./2/ Reference Deptel 1414./3/ Task Force Saigon considers new bilateral arrangement with GVN neither necessary nor desirable at present time.

/2/The numbers in this and subsequent telegrams to and from Task Force Saigon refer to the points in Document 56.

/3/Telegram 1414, May 19, stated that negotiations for a new bilateral agreement with Vietnam should not begin until further notice and asked the Embassy in Saigon to transmit its views on the subject. (Department of State, Central Files, 751K.5-MSP/ 5-1961)

1. Presumably purpose of new bilateral would be to reassure Diem of US support and restore his confidence in firmness US determination not permit Communist seizure of Vietnam. Believe this already accomplished to large extent by Vice President Johnson's visit and concrete actions flowing therefrom. Moreover, believe way we handle ourselves in connection with Laos likely be more important touchstone GVN confidence in our determination than discussion of bilateral arrangement, on theory actions speak louder than words.

2. GVN itself has not expressed interest in such new arrangement and on basis Diem's past attitude toward association with SEATO it is questionable that GVN would be particularly responsive to idea. In past whenever Diem has been asked whether he wishes join SEATO, his answer has been that Geneva Accord precludes GVN entry into military alliance. Diem's motivation probably is that as SEATO protocol state Vietnam receives whatever benefits SEATO provides without liabilities which would arise from membership in SEATO, e.g., Geneva Accord problems, Communist propaganda, et cetera.

3. While Diem probably now dubious full membership of SEATO would take effective action, he has always realistically viewed US as real source SEATO strength and thus of guarantee to Vietnam under SEATO protocol. Diem would therefore probably feel that US would be about as likely take action under SEATO, either unilaterally or jointly with those SEATO powers which are willing, as under bilateral arrangement. Under indirect US planning guidance all VN contingency war plans are based on expressed assumption that US and/or SEATO forces will intervene immediately (24-72 hours) after overt attack on VN. This assumption so well established that he would probably therefore view bilateral arrangement as adding little to existing tacit guarantee.

4. Type of US-GVN bilateral being discussed would represent direct violation Article 19, Geneva Accords. While Embassy has recommended US-GVN denunciation Articles 16 and 17 (Embtel 1752/4/), believe similar action re Article 19 cannot be justified on basis requirements GVN self defense, ICC failures, or DRV violation, and not of much real value in meeting present Communist threat. Moreover, inclined believe political repercussions flowing from such violation Article 19 might provoke ICC into withdrawing from Vietnam taking with it such deterrent as it offers against DRV direct aggression.

/4/Telegram 1752, May 16, stressed the need to consult with the British, Canadians, and possibly the French concerning any increase in military equipment or personnel in Vietnam beyond the limits that the Control Commission could agree to. (Ibid., 751G.00/5-1661; printed also in Declassified Documents, 1975, p. 319A)

Despite above, we would not wish exclude possible resort to bilateral arrangement at some point in future when it may be more needed or useful than at present in bolstering GVN confidence in US.

Nolting

 

63. Telegram From the Department of State to the Embassy in Vietnam/1/

Washington, May 26, 1961, 11:40 p.m.

/1/Source: Department of State, Central Files, 751G.00/5-2261. Secret; Priority. Drafted by Wood; cleared with McConaughy, Admiral Heinz, Johnson (G), L, NEA, EUR, IO, and S/S; and signed by Secretary Rusk. Also sent to London, Ottawa, Paris, and New Delhi and repeated to CINCPAC for PolAd, Vientiane, Phnom Penh, Bangkok, and Geneva.

1457. Task Force VN. Saigon's 1752 and 1788, New Delhi's 2782, Deptel 3404 to New Delhi./2/ On May 15, Asst. Secretary McConaughy called in representatives British, French and Canadian Embassies/3/ to inform them that due DRV violations we have been required expand MAAG by about a hundred, that we did not seek justify this on basis MAAG ceiling, but rather as response DRV infractions Geneva Accords. McConaughy emphasized we not over throwing Geneva Accords, but did not wish our hands tied by following them in all respects while DRV violating them. He emphasized this personnel was for training. (Department intends soon inform Indians of above only.) FYI. There will be considerable further increases in MAAG/Viet-Nam beyond 100 referred to above. End FYI.

/2/Regarding telegram 1752, see footnote 4, Document 62. Telegram 1788, May 24, restated the need to consult with members of the Control Commission. (Department of State, Central Files, 751G.00/5-2461) Telegrams 2782 and 3404, May 22 and 24, discussed various aspects of making an approach to Nehru on this problem. (Ibid., 75lG.00/5-2161 and 5-2261)

/3/Memoranda of McConaughy's conversations with the British and French are ibid., 751G.00/5-1561.

On May 19 Ledward, British Embassy, asked Departmental Officer how we planned handle MAAG increase and whether Indians would be informed since problems likely arise. Ledward said Fon Off on being informed above conversation with McConaughy had replied it well understood reasons MAAG increase and had no reservations, but was anxious be informed our next move. Departmental officer replied decision not yet final, but it appeared unlikely we would seek justify any further increases as being within MAAG ceiling (although it could be argued as basis MAAG increase that there were about 1500 trainers in VN at time Geneva Accords). Our tentative view was that due vital threat to GVN posed by DRV directed guerrillas in Viet-Nam, GVN entitled defend itself without being limited by restrictions on bringing in men and materiel set forth Articles 16 and 17 Geneva Accords for VN.

Dept officer continued main reason GVN fighting for its existence today was that these restrictions had consistently been ignored by DRV since Geneva Accords went into effect. However, whatever decision was reached with GVN on Geneva Accords, we would not seek contravene main purpose Geneva Accords which was to prevent one side from violating the cease-fire and attacking the other. GVN was being clearly attacked by DRV through guerrilla methods; GVN certainly did not intend to cross demarcation line and attack DRV. Its aim was to defend itself and preserve its independence. In this we intended support GVN.

Action addressees should also point out that U.S.-GVN decision not be limited by Articles 16 and 17 would be in accord with recognized principle international law that material breach of a treaty obligation by one party relieves the other of full compliance with its obligations until first party resumes observance (II Yearbook International Law Commission 1959, Articles 18 and 20 on law treaties, pp. 45, 66, 66-71). The U.S. specifically intends that this action will be limited to period during which communists continue violate their treaty obligations. The U.S. will return to complete compliance as soon as the communists discontinue their violations.

Addressees should also emphasize that U.S. and GVN consider DRV has continuously breached Article 24 Geneva Accords which states that armed forces each party "shall commit no act and undertake no operation against the other party." (Copies Geneva Agreement pouched to addressees January 13, 1960.) There is continuing evidence that armed DRV personnel acting under DRV orders have for years traveled from DRV territory into Viet-Nam and carried out hostile acts. The Kontum attack of October, 1960 when several hundred armed persons attacked across the Vietnamese frontier in unit formation is one example.

Finally, should emphasize this decision does not reflect desire upset ICC mechanisms. As set forth Department's 3404 to New Delhi, we believe that mechanism of ICC should be perfected. The present situation in Viet-Nam results to some extent from the fact that the ICC as set up by the 1954 Agreements has not been able to act effectively. This is why we have urged that the ICC mechanism in Laos be made effective.

For Saigon

Above rationale and procedures outlined below should be discussed promptly with GVN. Following points should be made to GVN:

1. We are anxious move ahead very soon in cooperation with GVN on lines this message and would welcome early expression GVN views. It is hoped that Ambassador Nolting may be able inform Embassies London, Paris, and Ottawa very soon of GVN concurrence. Embassy New Delhi to make its approach four days thereafter. We think it important to make U.S.-GVN position on MAAG clear to world opinion soonest.

2. We hope GVN will consider making its own demarche at New Delhi, as well as at Paris, London or Ottawa if it so desires. Most important will be GVN note to ICC. We hope Embassy and GVN will be able coordinate these moves, in advance. Urge GVN use suggested rationale.

FYI. As soon as embassy satisfied re GVN concurrence, it should notify other action addressees.

Department will inform GVN Embassy here four days after transmission this telegram unless contrary advice received. End FYI.

For London, Ottawa, Geneva and Paris

Suggest upon receipt telegram Saigon indicating GVN concurrence this be discussed confidentially along above lines with British, Canadians and French and that they be informed we intend bring up matter in New Delhi four days after receipt this telegram.

For New Delhi only

Unless addressee posts perceive strong objections, GOI should be informed of above four working days after receipt telegram from Saigon indicating GVN concurrences./4/

/4/The Vietnamese agreed to follow the proposal outlined in this telegram on May 29. (Telegram 1813 from Saigon; ibid., 751K.00/5-2961)

The Department of State on June 1 instructed Nolting to tell Diem not to send a note to the Control Commission, but await further views on the timing of an approach to India. (Telegram 1484; ibid.. 751K.5-MSP/5-3161)

Rusk

 

64. Telegram From the Embassy in Vietnam to the Department of State /1/

Saigon, May 27, 1961, 5 p.m.

/1/Source: Department of State, Central Files, 751K.5-MSP/5-2761. Confidential; Priority. Also sent to CINCPAC for PolAd and Vientiane and repeated to London, Ottawa, Paris, Geneva, New Delhi, Bangkok, and Phnom Penh.

1803. Task Force VN. In full talk with Thuan May 26, he led off by saying President Diem would like for me to accompany him on tour of country in near future, which I accepted (dates not fixed).

Thuan then said (Embtel 1794/2/) Diem has carefully considered question introduction of US combat brigade as trainers, and had concluded that this would not be desirable at present time. Diem thought that an addition of up to one thousand MAAG personnel, over and above present number, would be desirable and could be accomplished through ICC decision. These, he believed, would suffice for training additional Army units. For training civil guard and self-defense corps, Diem felt that US military personnel in civilian clothes should be used. These would be over and above the number MAAG military personnel mentioned above. GVN envisaged direct training.

/2/Telegram 1794, May 24, reported that Nolting discussed the introduction of fully equipped U.S. combat units as trainers for the Vietnamese Army with Thuan on May19 and on two subsequent occasions without result. (Ibid., 751K.5-MSP/5-2461)

I told Thuan that we do not wish to proceed against his Government's judgment in these matters and that I would wish to have General McGarr's and Washington's views before making any final comments; but that certain preliminary comments occurred to me: (1) an obvious relation exists between the number of US trainers needed and the number of Vietnamese forces to be trained, their time-phasing, etc., (2) another factor was how we should decide together to handle the whole ICC matter, especially Articles 16 and 17 of Geneva Accords; (3) another factor was whether or not training of civil guard and self-defense corps by US military personnel in civilian clothes was a good idea militarily or politically. I had some doubts on this in light Laotian experiences; (4) still another factor was whether it is a good tactic to argue for an ICC-approved increase in MAAG personnel when it is apparent that the final requirement is likely to exceed number which ICC will approve. To me, a more forthright approach to problem presented by ICC had considerable merit. In summary, I wondered whether the way proposed by Thuan of meeting the problem was adequate from the military point of view and whether it was good from the political point of view.

Thuan seemed interested in idea that Articles 16 and 17 of the Geneva Accords might be ignored, but worried that this might bring about the abrogation by the Commies of the entire Accords, and/or the withdrawal of the ICC. He said that the GVN felt that Geneva accords and ICC had certain deterrent value worth preserving. Thuan suggested as alternative position that we should work together to sound out opinion of our allies re denunciation of Articles 16 and 17, while at same time proceeding to build up numerical strength of MAAG under existing regulations. This matter was left inconclusive. We need Washington reactions to our Embtels 1752 and 1788./3/

/3/See footnote 2, Document 63.

I then discussed Thuan's trip to Washington, and asked him tell me the major things that would be taken up in President Diem's letter to President Kennedy. He said letter had not yet taken final shape, but would include (a) a request for approval of GVN army build up to 100,000 over and above 170,000 already agreed, over two and one-half year period; (b) cost estimates in MAP and in local currency for a force of that size; (c) some suggestions re long-term economic plan for South Viet-Nam. I told him that we had recently submitted comments to Washington on a possible build-up to 200,000 (increase by 30,000 over present-agreed force); that I did not know what our reaction would be to a larger figure, but that I was sure we would like to hear their considered views and their justification for such a force. My impression was that we were thinking in terms of a phased build-up to see if we went along what the ultimate requirement should be. Thuan said the figure for an additional 100,000 came to them from his generals, who had been asked to submit their estimates of what it would take to (a) guard against overt frontal attacks; (b) control borders; and (c) mount successful anti-guerilla operations.

I made clear to Thuan, pursuant Deptel 1433,/4/ that while our officials in Washington were anxious to hear President Diem's views on matters raised by President Kennedy's letter/5/ about Vice President's talks, there would obviously be many matters including cost-sharing, to be worked out specifically and in detail after his return, which could not be done finally in Washington and could be better done here. In other words, final agreements should be negotiated out in Saigon. Thuan understood and readily agreed to this.

/4/Telegram 1433, May 23, instructed the Embassy in Saigon to tell Thuan that U.S. agencies would listen sympathetically and give his views serious attention, but would not commit the United States prior to completion of the financial team's study and until Nolting and Diem had reached agreement in Saigon. (Department of State, Central Files, 751.5-MSP/5-1361)

/5/See Document 48.

I then brought up subject which President Diem had discussed with me at length in Dalat/6/-- namely, his hope that we could work out together a comprehensive, joint, long-range plan embracing measures in various fields. Diem had stressed the need to have such plans fit the local situation here, rather than having them "made in America". I told Thuan I felt sure my Government would be interested in developing Diem's thoughts along these lines; we did wish to help in ways which would fit local situation, and I personally thought a high-level joint planning group here would be most useful if GVN wished to suggest it. I said we had a number of ideas in several interrelated fields which could be discussed by such a group, and perhaps then referred to joint subcommittee for detailed study and eventual implementation. Thuan replied, while GVN limited re expert personnel, he felt something could and should be done along these lines. Mentioned fact that GVN would have "opposite numbers" for US financial and economic experts expected around June 17./7/ He could not say who they would be at this point, but promised to have them ready. He mentioned fact that military planning already going forward in joint committee. I expressed our willingness to have, and my own personal availability to serve on, a joint steering committee if President Diem wished to set one up. (I did this not only because I think it would be best way to have our task force proposals studied systematically, but also to meet Diem's earlier insistence that plans and actions here should have an indigenous character, in order to promote his basic aim of encouraging a counter-dynamic on the part of his people against the Communists. I hope he will follow up on this.)

/6/Nolting recalled that Diem had invited him and his family to Dalat the weekend of May 20 21 to review all the things that had been discussed with the Vice President and to evolve a working plan for a cooperative effort. (Department of State, Office of the Historian, Vietnam Interviews, May 25, 1984) No other record of the discussion at Dalat has been found.

/7/Regarding the establishment of a special group of U.S. financial and economic experts (the Staley Group or Special Financial Group), see Document 72.

In course of conversation, I asked Thuan to expedite giving us figures which Gardiner had requested some time ago re aid requirements, in order that these might be available for study by special Financial and Economic Mission. He said they were being worked up and he agreed to expedite.

Nolting

 

65. Memorandum From the President to the Secretary of State/1/

Washington, May 27, 1961.

/1/Source: Department of State, Conference Files: Lot 65 D 366, CF 1883. Attached to a memorandum from G to S/O, June 1, which stated that the President made a similar request to the Secretary of Defense and that the Vice President made an oral request along these lines.

I am extremely anxious that we implement any promises that the Vice President may have made in the various countries he visited during his recent trip. I would appreciate it if you would put someone in charge to check on these promises and send me a report on it after my return from Europe next week./2/

/2/The President was in Vienna, June 3 for talks with Premier Khrushchev.

John Kennedy

 

66. Telegram From the Chief of the Military Assistance Advisory Group in Vietnam (McGarr) to the Chairman of the Joint Chiefs of Staff (Lemnitzer)/1/

Saigon, June 7, 1961, 5:45 p.m.

/1/Source: National Defense University, Lemnitzer Papers, 1961, Eyes Only Messages In. Secret: Eyes Only; Exclusive.

SGN 376. Increasing pressure being brought to bear by State Department to bring British, Malayan and other third country trainers into anti-guerrilla training program of RVNAF which is MAAG's mission. Have pointed out strongly the confusion that will result if coordinated counter-insurgency doctrine and training which MAAG has developed, using best of other country experience applicable here, should now be redirected and diluted by individual third country trainers with different concepts and methods. Diem had assured me these third country trainers in MAAG field not desired. However, Ambassador here and Ken Young new Ambassador Thai land leaving for Washington visit today making concerted effort change Diem's mind by indicating VN has much to learn from British and Australians. I do not agree and am [not?] certain history would show U.S. had to be "bailed out" by them as in past. I am unable here to pin down "Thompson group" qualifications and, more important, its authority; only that they are anti-guerrilla "experts." Feel we must insist they convince us by furnishing concrete anti-guerrilla material for our evaluation and consideration before we approve their coming. Also, if State forces it, that it must be understood any actions by them in MAAG field are controlled by MAAG.

Now that MAAG has fought through major RVNAF reorganization and strengthening of command structure, taken over Civil Guard training, and gotten approval on a long overdue 20,000 RVNAF increase, we are just beginning to show positive results as manifested by increasing offensive operations against Viet Cong. I am convinced US prestige as well as that of US military will suffer in Southeast Asia if third country individuals are to be forced into MAAG field here. I have no objection to their operations in other fields and this is already mostly agreed by the country team. This should suffice to "show the flag." If State Department insistence result of political expediency, then believe strongly Defense Department must, to protect itself, go on record that we are now progressing in a military sense and have already set the stage organization and strength-wise for further successes. New approach by Ken Young here yesterday with Thuan and me was have "international counter-guerrilla warfare school," which has been considered by Washington Task Force, for location somewhere in Far East definitely located South Vietnam. MAAG is resisting this maneuver for reasons above and in addition, because feel it will conflict with and retard our hot war effort by sowing seeds of doubt our methods with other countries trying to get into act operationally. Better results obtainable by location of "international counter-guerrilla warfare school" in say Malaya, with field research work here by its "students." I am convinced participation by third country trainers would be militarily counter-productive MAAG's mission here.

As a fall back position, if forced to have "international counter-guerrilla warfare school," in Vietnam, believe we could possibly compromise on Asian trainers, such as Filipinos and Chinese Nationalists, as they really knowledgeable, would be more acceptable to GVN, mix better ethnically and would not downgrade US effort to extent British participation.

Augmentation of RVNAF is being delayed by US failure so far to assure the GVN of the necessary defense support funds as differentiated from MAP funds already promised. While admittedly an economic problem, the GVN high officials say they cannot by themselves finance the local currency costs of the 20,000 augmentation presently approved, the 30,000 additional augmentation proposed nor the 100,000 augmentation to achieve the requisite 15 division force which they are convinced they need and with which MAAG analysis agrees, all concurrently with maintaining paramilitary forces which they also supporting local currency-wise. In view GVN economic base, cannot expect GVN carry this added security load. In addition attempting this would result serious curtailment of Diem's economic and social programs. USOM attitude here apparently strongly supported by ICA and State in Washington is to sit by and wait for Special Financial Group (SFG) to arrive and analyze economic and financial situation. This could take months and every day the RVNAF mobilization is further delayed is dangerous. These fiscal and diplomatic types fail or refuse to realize the time lag for training and equipping military forces.

In view feeling by GVN that we have not lived up to our commitments in the past, following on heels of deteriorating Laos situation and Vice President Johnson's statements here, more delay could well trigger an attitude of neutralism in both the military and certain dissident political circles which could be disastrous to US Presidential policy pronouncements again reiterated in Kennedy address this morning emphasizing deeds not words./2/ General Sibley accompanying Secretary Defense Thuan to Washington and will see you. Sincerely hope Secretary Defense Thuan will be given solid commitments on defense support aid. President GVN defense budget for 1962 limited by USOM to 3.150 billion piastres, whereas 7.7 billion piastres required if RVNAF augmentation is not to suffer further delays.

/2/For text of President Kennedy's address to the American people, June 6, concerning his meeting with Khrushchev at Vienna, June 3-4, see Public Papers of the Presidents of the United States: John F. Kennedy, 1961, pp. 441-446.

 

67. Telegram From the Embassy in Vietnam to the Department of State/1/

Saigon, June 9, 1961, 8 p.m.

/1/Source: Department of State, Central Files, 751K.5-MSP/6-961. Secret. Repeated to CINCPAC for PolAd.

1863. Task Force VN 25. Reference: Deptels 1494, 1496./2/ In course of discussions with Thuan on June 8, following points arose relevant GVN thinking concerning financing present and future increase force level. Meeting had been arranged in advance at Thuan's request to clarify certain matters before Thuan's trip to Washington. It was understood that we were not negotiating, but simply seeking clarification. Thuan was supported by Secretary Economy Thanh, economist Buu Hoan from National Bank (who will accompany Thuan to Washington), and Thinh, Deputy Budget Director. Gardiner and Howe of USOM accompanied me.

/2/Dated June 3 and 6, respectively. The former requested information on the Vietnamese military budget, while the latter asked for cost estimates for FY 61 and 62 military assistance program requirements. (Ibid., 751K.5-MSP/6-261)

(1) Thuan opened subject of aid level to GVN for FY 62. In requesting $30 million additional aid in memorandum to Vice President Johnson,/3/ Thuan said GVN intended to seek a total of $169 million for FY 62 on basis 170,000 force level. They calculate this on basis 1961 aid level at $110 million new money, $15 million pipeline draw down, and $14 million PL-480,/4/ plus $30 million additional needed for force level of 170,000. $169 million, with customs duties added thereto, was judged to be adequate to finance armed forces of 170,000 (and presumably leave a balance for economic projects, although GVN representatives did not say so). Import list submitted to USOM by Ministry Economy, June 3, representing $149 million, was disowned as not responsive to military requirement.

/3/See footnote 4, Document 54.

/4/Formally entitled the Agricultural Trade Development and Assistance Act enacted July 10,1954, P.L. 480 provided for the donation of U.S. agricultural surpluses to friendly governments; for text, see 68 Stat. 454.

(2) $169 million aid requirement calculated by GVN on basis 30 percent flexible waiver "Buy American" restriction, and freedom from 50 percent shipping restriction. (On latter point, believe we made convincing argument that GVN funds could be devoted to buying cheaper freight, leaving greater amount in US aid funds for purchase commodities.)

(3) Thuan agreed that level of GVN foreign exchange reserves should not rise above approximate present level of $210 million, but also insisted that present foreign exchange reserves should not be depleted to finance additional forces.

We made it clear that final resolution of aid level for 1962 and subsequent years could not be accomplished until SFG advice available and funds voted for FY 1962. We very much hoped, however, that during this summer we and GVN could agree on a sound long-term financial plan. Meanwhile, I hoped nothing would be allowed to interfere with build-up of forces to 20,000 agreed increase as fast as possible. This was regarded as necessary by both GVN and US. Was it true, I asked, that the build-up of the 20,000 was being delayed for financial reasons?

Thuan said, yes, inductions are now being deferred since GVN does not have funds to take on additional obligations. I emphasized that we were not trading, but exploring possibilities within framework of our mutual desire to raise 20,000 troops as quickly as possible. Thuan then threw out proposal that GVN should finance as much of 20,000 increment as could be raised for FY 61, but said this would have to be done at cost of stand-still on certain economic-military-social projects now under way (mentioning roads, canals, and land development). I told him that US considers many of these projects as necessary in the fight against the Viet Cong, and that I do not wish at this time to be in position of recommending priorities between necessary projects. This proposal of Thuan's was later withdrawn, after GVN budget man had pointed out that transfer of funds from other budget appropriations to military is not possible during current year (for reasons, we assume, appropriation law).

I persisted in exploring ways to continue inductions for the 20,000 and to finding method to pay for them without further loss of time. We calculated the sum involved to be about VN $350 million for the remainder calendar year 1961. Having withdrawn his original suggestion, Thuan then said that there were only two ways to meet this problem: (1) By borrowing from National Bank; (2) By cash grant from US. The first course GVN rejected as inflationary, and likely to cause criticism from IMF authorities due soon for annual consultations. The second alternative, I said, appeared impractical from our side, for reasons of lack of funds and on principle (i.e., cash grant in relation to over-all balance of payments position). As a personal suggestion, in order to solve the problem of 1961 payments without further loss of time and without prejudice to SFG and subsequent negotiations, I threw out the following: (1) That the cost for 1961 for the additional 20,000 be calculated as precisely as possible; (2) That Thuan then might suggest in Washington that the cost be divided between GVN's own funds and remaining counterpart and other US-controlled availabilities. (An agreed table of counterpart, Section 402/5/ and PL-480, utilization, was available, showing a remaining balance of $5.1 million equivalents (178.5 million piasters) unprogrammed after providing $159 million equivalents for 1961 military budget and $15.9 for economic projects.)

/5/For text of Section 402 of the Mutual Defense Assistance Control Act of 1951 (the Battle Act), enacted October 26, 1951, see 65 Stat. 644.

Thuan thought this idea had possibilities. I made clear that I could make no commitments. (Comments: I urge that this matter be cleared up promptly, either in Washington or on instructions here, in order that agreed force increase be not further delayed and to clear decks for study and negotiation on future program, perhaps involving much larger forces. To do so, in my judgment, would preserve and build confidence, keep up momentum, and enable us to work much more effectively in future negotiations.)

In responding to point that we consider it necessary to maintain economic projects which were part and parcel of counter-insurgency effort, Thuan said that GVN was taking steps to improve tax collections and back up certain tax rates. Tax revenues estimated by GVN to rise by VN $600 million in 1961 over 1960. Forecasts of exports and budget details requested by USOM in April were still not available. We urged that they be ready soon for SFG study; exports for 1961 were estimated by GVN at $70 million compared to $85 in 1960. We also requested breakdown proposed US aid-financed import list of $169 for fiscal 1962.

These discussions, I think, were useful in bringing clarification and perhaps in drawing positions together. Both Diem and Thuan mentioned their usefulness to me today (June 9). I repeat that we have not made any financial commitments here, and will not do so pending further instructions.

Nolting

 

68. Editorial Note

Secretary of State for the Presidency Nguyen Dinh Thuan arrived in Washington on June 12, 1961, for a 6-day visit. That evening he dined with Assistant Secretary McConaughy, Cottrell, and members of the Staley Financial Group that were about to depart for Saigon. The next day, he met with McConaughy at 5:30. On June 14, Thuan met with Lansdale, President Kennedy, the Deputy Secretary and Secretary of Defense, and General Lemnitzer, followed by a dinner given by the Vice President aboard the yacht Sequoia. On June 15, he met with Under Secretary of State Johnson, Secretary Rusk, the Managing Director of the Development Land Fund, Frank M. Coffin, and Rostow. Following meetings with Congressional leaders on June 16, Thuan left for New York before returning to Vietnam on June 17.

Only the memorandum of the conversation with the President is printed here. The meeting with McConaughy is cited in footnote 1 thereto. A record of the meeting with Coffin and copies of Thuan's schedule of meetings are in Department of State, Vietnam Working Group Files: Lot 66 D 193, 22.2 Thuan Visit GVN 1961. No records of the other meetings have been found.

 

69. Memorandum of a Conversation, The White House/1/

Washington, June 14, 1961, 10:15 a.m.

/1/Source: Department of State, Central Files, 751K.5-MSP/6-1461. Secret. Drafted by Wood, cleared by McConaughy, and approved by the White House on July 22. A summary of the conversation was transmitted to Saigon in telegram 1526, June 15. (Ibid., 751K.5-MSP/6-1561) McConaughy had a similar conversation with Thuan at 5:30 on June 13. A summary of this conversation was transmitted to Saigon in telegram 1525, June 15. (Ibid.)

SUBJECT
Aid in Viet-Nam

PARTICIPANTS
President Kennedy

Assistant Secretary McConaughy

Secretary of State Nguyen Dinh Thuan

Chalmers B. Wood

The President opened the conversation by recalling his visit to Viet-Nam in 1951 and the fact that he had met President Diem at a luncheon given by Justice Douglas in 1957 during President Diem's visit to the United States./2/ He asked Mr. Thuan to convey his greetings to President Diem. After acknowledging the President's kind words Secretary Thuan gave the President a letter from President Diem./3/ The President read the letter carefully and then explained to Mr. McConaughy that the letter requested U.S. support for an increase in the Vietnamese armed forces to a total of 270,000 men and that the cost of providing initial equipment for this increase in the size of the armed forces would come to about $175 million dollars, to be distributed over the 2Y2 year period needed to activate these units and that thereafter annual maintenance for this force would increase the military assistance program by about $20 million dollars a year.

/2/For documentation on Diem's visit to the United States, May 8-10, 1957, see Foreign Relations, 1955-1957, vol. I, pp. 792 ff.

/3/Dated June 9; for text, see United States-Vietnam Relations, 1945-1967, Book 11, pp. 167-173.

The President then asked Mr. Thuan how much of the communist movement in Viet-Nam was indigenous. Mr. Thuan replied that during the Indo-China War the French had occupied only the cities and main roads. This had permitted the communists to occupy the country side and exercise their subversive influence over the population. Mr. Thuan also mentioned the flow of Viet Cong from North Viet-Nam to Viet-Nam, stating that Vietnamese armed forces had recently occupied reception centers on Route 9 which had been used by the Communists. Records in these reception centers showed that about 2,800 men had moved through them on their way south to Viet-Nam during a 4 month period.

The President then asked about cooperation with Cambodia. Mr. Thuan spoke of Prince Sihanouk's "versatile" qualities and commented that if Prince Sihanouk's policies appeared to be changeable it should be remembered that they were based on one unchanging assumption, namely Prince Sihanouk's belief that the communists would win in Asia, and that he must tailor his policies accordingly.

The President then inquired about living conditions in North Viet-Nam. Mr. Thuan explained that life for the average citizen in North Viet-Nam was extremely difficult, that food and clothing were hard to obtain and that morale was low. The President then asked about the problems of infiltrating Vietnamese forces into North Viet-Nam. Mr. Thuan replied that a few highly trained troops were available but that if Viet-Nam were to risk these men in an attempt to stir up unrest in North Viet-Nam, the United States should be prepared to make a major effort to give them the full support needed to carry out such an action to a successful conclusion. The President then asked about the war in South Viet-Nam. Mr. Thuan replied that the South Vietnamese troops were having increasing success in their fight against the Viet Cong. An interesting index of this success Mr. Thuan said was that although the Vietnamese troops were kept on the line for long periods their rate of desertion was very low, and that those deserted did not desert to the Viet Cong but only to return home to see their families. On the other hand he said there had been increasingly large numbers of Viet Cong who had surrendered. As one of the difficulties faced by his country Mr. Thuan cited the length of the land and sea frontiers to be protected.

The President then asked how long it would take to get started on the 20,000 man increase in the Vietnamese armed forces from 150,000 to 170,000. Mr. Thuan explained that there has been a 6,000 man increase but that unfortunately the Vietnamese simply did not have the liquid assets necessary to pay the local costs of continuing this increase to 170,000. Vietnamese finances he continued had been stretched to the point where it had recently been necessary for them to cancel the International Fair scheduled for 1962 near Saigon. After further discussion it was agreed that Mr. McConaughy would report to the President on the following day as to how this matter could be resolved in order to continue the mobilization as rapidly as possible.

The President then discussed with Mr. Thuan President Diem's request for support in increasing the Vietnamese army to 270,000. He asked that President Diem's letter be made immediately available to Mr. McNamara who was testifying before the Senate the same day, in order that the Senators could better understand and appreciate the magnitude of the task involved in helping Viet-Nam to maintain its independence. In discussing the share which Viet-Nam might pay the President asked if it was not true that Viet-Nam had a foreign exchange reserve of over $200 million. Mr. Thuan said it was true but he expressed his government's fear that if this reserve were drawn down below the $200 million mark most of the capital in Viet-Nam which was primarily foreign owned (French and Chinese) would find ways of leaving the country and thereby cause a serious economic situation. Mr. Thuan also said that the Vietnamese government had already drawn down its foreign exchange reserve by $6 million.

The President then asked whom Secretary Thuan would see during his visit in Washington and particularly suggested that he see some Republican Senators, notably Dirksen and Hickenlooper, as he felt this might be useful in the extremely difficult struggle which would be involved in obtaining the funds requested by President Diem.

The President also said that we should continue to increase the size of our MAAG in order to handle speedily the training of the Vietnamese troops and that this increase should be done quietly without publicly indicating that we did not intend to abide by the Geneva Accords.

 

70. Telegram From the Embassy in Vietnam to the Department of State/1/

Saigon, June 14, 1961.

/1/Source: Department of State, Central Files, 751K.5-MSP/6-1461. Secret. Also sent to CINCPAC for PolAd and repeated to London and Kuala Lumpur.

1876. Task Force VN 6. Reference: Department telegrams 1429 and 1475./2/

/2/Dated May 22 and 30, respectively. The former reported that the British were anxious to inquire of Diem what kind of assistance they might provide. (Ibid., 751K.5-MSP/5-1361) The latter stated that the British offered to send to Vietnam officers with counterinsurgency experience who were serving in Malaya. (Ibid., 751K.5-MSP/5 2661)

1. I have sent letter to British Charge Stewart proposing following fields of possible British assistance to GVN subject of course to mutual GVN-UK agreement and in coordination with appropriate US agencies (full text of letter being pouched/3/);

/3/Transmitted as an enclosure to despatch 579 from Saigon, June 16. (Ibid., 641.51K/6-661)

Administration-a) Advice and assistance in administrative techniques, particularly re operations Ministry Interior, coordination of activities at local level and training civil servants for work in countryside in close contact with people; b) Studies of methods of government administration in face Communist subversion through Vietnamese visits to Malaya and attendance at British schools, and visits of British personnel to Viet-Nam; c) Support of GVN programs related to Montagnard population in order reduce Viet Cong infiltration in mountain regions.

Police and Security-Training courses in Viet-Nam or elsewhere for members Surete, appropriate judicial elements of Civil Guard and border control and immigration elements of Ministry of Interior, in protection of government leaders and facilities, and techniques of population control, identification, investigation and interrogation.

Information and Propaganda-Advice and training in techniques of information and propaganda, and actual production of such material for dissemination in both South and North Viet-Nam.

Intelligence-Assistance to new central intelligence organization in training of personnel and in developing techniques of centralizing and coordinating results obtained from GVN intelligence activities. Letter emphasizes that at outset CIO operation necessary avoid strengthening certain GVN elements seeking compete with it and importance close coordination between US and British effort to avoid conflicting advice.

Military-Aside from use of such facilities as jungle warfare school in Malaya, letter suggests that military not a field of particular British assistance to GVN at this time and explains that MAAG has drawn on Malayan end other anti-guerrilla experience in developing doctrine for Viet-Nam.

Material and Equipment-Contributions of material and equipment welcome particularly in fields proposed for British assistance, but with detailed prior coordination with US agencies to assure adequate logistical preparations.

Medical and Other Units-Assignment of mobile medical teams to assist in caring for battle casualties and similar teams in fields social services, preventive medicine, etc. This particularly important in view shortage of doctors in SVN.

Pilot Area-Selection of pilot area, e.g. one province, for multipronged projects designed reduce insurgency and strengthen GVN and permitting development and testing of techniques which could later be given wider application.

Advisors or Advisory Group-Increase of present number British advisors working in Viet-Nam and possible establishment of assistance or advisory group working under single supervision and control.

2. Stewart informed DCM he very pleased with our response as set forth in letter and particularly impressed with suggestions re pilot area and medical and other teams.

We shall push forward with British here on above proposals./4/

/4/Stewart replied in a preliminary letter of thanks on June 15, and on June 26 wrote further that the British were studying the proposals, but agreed that any effort must be fully coordinated. He added that they hoped to be able to send R.G.K. Thompson, a former Defense Secretary in the Federation of Malaya, to head a small advisory group in Vietnam. (Washington National Records Center, RG 84, Saigon Embassy Files: FRC 66 A 878, 350 GVN-TF)

Nolting

 

71. Telegram From the Department of State to the Embassy in Vietnam/1/

Washington, June 16, 1961, 8:25 p.m.

/1/Source: Department of State, Central Files, 751K.5-MSP/6-1461. Secret; Niact. Drafted by Cottrell, Fowler, and Furst (ICA); cleared with McConaughy and ICA; and signed for the Secretary by Cottrell. Repeated to CINCPAC for PolAd.

1534. Task Force VN 11. Joint State/ICA. Refs (A) Embtel 1874, (B) Embtel 1863./2/

/2/Telegram 1874, June 14, reviewed various aspects of the Vietnamese military budget. (Ibid., 751K.5-MSP/6-1461) Telegram 1863 is Document 67.

In conversations at highest level Thuan has repeated statement reported Ref B that induction 20,000 being deferred because GVN "simply does not have the liquid assets necessary to pay the local costs of continuing this increase to 170,000". In view urgency avoid delays in mobilization plans, problem received high level review Washington with following conclusions:

A. Issue concerns how total CY 1961 GVN budget costs can be financed by joint US/GVN actions. Military budget represents critical aspect but should not be resolved except in total context.

B. Additional US dollar aid not justified on economic grounds in light GVN reserve position.

C. Analysis info Ref A indicates there is now available for commitment from combined US/GVN sources total of 6,066 million piasters (5,366 million US and 700 million GVN) against estimated total military budget requirement including additional 20,000 men of 6,579 million piasters. This represents approximately 94% of total required or on monthly basis about eleven months of CY 1961 requirements for commitment. US commitment alone to date represents 80% of total or about ten months requirement. Do not therefore see any financial reason for GVN suspend mobilization plans at this time.

D. Recognize, however, that by suspending mobilization on grounds lack of assured budgetary financing, GVN has created politico/military rather than economic issue and is attempting place onus for slow-down on US. In order resolve this political issue, you authorized negotiate agreement with GVN to resume mobilization within one of following positions, set out in order preference from US point of view:

1. US willing now commit to 1961 MBS additional 178.5 million piasters ($5.1 million equivalent) available from US controlled sources (Ref B) provided GVN (a) proceeds without delay with mobilization effort and undertakes major effort meet balance 1961 military budget requirements from own resources. SFG arriving Saigon shortly assist GVN in developing ways and means meeting budgetary requirements. (FYI) We unable confirm availability 178.5 million but assume USC'M analysis takes account of restriction against commitment US-owned local currency prior to deposit (End FYI).

2. If above insufficient inducement, one of following additional concessions could be offered: MBS of $153.3 equivalent assumes FY 1961 non-project aid level of $110 million of which $97.4 million allotted to date, leaving balance $12.6 million. Since GVN requirement is not for foreign exchange, but for local currency, piasters needed to pay for 20,000 man increase could be raised by charging Vietnamese importers same rate (i.e. 73.5 to 1) for balance of FY 61 non-project assistance as GVN charges importers for most of its own exchange. Customs and other taxes would be additive as with GVN financed imports. This rate would raise at least additional 485 million piasters which when added to commitment of 178.5 million piasters current availability per 1 above more than sufficient cover remaining gap 1961 military budget.

3. Final alternative would be to increase FY 1961 dollar aid level by $4.55 million with agreement these dollars would generate piasters at 73.5:1 rate as per (2) above and thus generate 334.5 million piasters which, together with 178.5 million under (1) above would cover remaining requirements CY 1961 military budget.

In discussions with GVN on resolution current problem you should also point out that (a) inflationary pressures resulting from drawdown of existing local currency pipeline or from increase GVN foreign exchange reserves much the same as those resulting from budget deficit and (b) that additional dollars provided by US would go either reserves or finance non-essential goods. After careful US examination resulting in considerations outlined above GVN would appear unduly concerned that if it pays local currency costs 20,000 man increase, serious inflationary pressure would result.

Rusk

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