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

V. Special Financial Group Mission to Vietnam
June 17-July 15, 1961

72. Editorial Note

In a letter to Diem, May 8, 1961 (see Document 48), President Kennedy offered to send a special group of economic and fiscal experts to Vietnam to work out a financial plan on which to base United States-Vietnamese joint efforts. Following Diem's agreement to this proposal, the Department of State began to look for a prominent American economist to head the mission. Personal commitments prevented Neil Jacoby, Head of the UCLA Business School, from taking on the assignment, and Eugene A. Staley, Research Director of the Stanford Research Institute, subsequently accepted the appointment. Colonel Black, William Diehl (Department of the Treasury), Paul Geren and Warren Green (Department of State), and Herman Kleine (ICA) completed the group.

On June 1, the Embassy in Saigon transmitted the terms of reference for the group:

"Purpose of Special Financial Group (SFG) is to provide expert economic and financial advice to assist Ambassador in reaching agreement with GVN on a financial plan, based on appraisal of present resources that may be available to the GVN including contributions from abroad. Plan should be designed to use resources to finance:
 
"1) appropriate level-military and security forces
 
"2) continuing social programs now underway, and their expansions where necessary;
 
"3) continuing economic development." (Telegram 1828; Department of State, Central Files, 751K.5-MSP/6-161)

Staley had "a rather thorough initial discussion on Saturday afternoon [May 27] with Sterling Cottrell". (Staley letter to Bowles, May 29; Yale University, Bowles Papers, Box 292, Folder 0421 Staley) The Staley Group held its first meeting on May 31 and met again on June 5. Two days later Staley discussed Vietnam with Lansdale. On June 14, he talked with senior Defense Department officials, and on the following day, with Vice President Johnson before departing for Saigon on June 16. Staley's shorthand notes on the conversations with Lansdale and the Vice President and his appointment book showing the schedule of meetings are in his personal papers. No records of the other discussions have been found.

 

73. Memorandum From the Secretary of Defense's Assistant for Special Operations (Lansdale) to the Deputy Secretary of Defense (Gilpatric)/1/

Washington, June 26, 1961.

/1/Source: Washington National Records Center, RG 330, OSD Files: FRC 71 A 6489, Viet-1. Secret. Copies also sent to McNamara, Heinz, and Levy. The source text bears the stamped notation: "(SecDef has seen)".

SUBJECT
Special Financial Group (SFG) to Vietnam

The first report from Colonel Ed Black on the progress of the SFG has just been received by me. It touches on contention between Defense and ICA, about which Cottrell is aware already. I am passing copies of this memorandum to the Defense members of the Vietnam Task Force for their information and to pass to Cottrell. Colonel Black's report follows:

"1. First week devoted primarily to USOM briefings. Spent first afternoon with Ambassador and Country Team and one morning with MAAG. Administrative and other arrangements for our group are handled by Gardiner (USOM).
 
"2. Brief initial meeting with the Vietnamese occurred 23 June, followed by an hour and half ARVN briefing given personally by Gen. Khanh. President Diem has arranged four-day trip for US and VN groups 24-27 June. Will visit Ban Me Thuot, Nha Trang, Hue, Tourane and villages in vicinity of each stop. First real opportunity to mix with the Vietnamese group occurred at stag dinner 23 June. Thuan returned Saigon 23 June and obviously VN are stalling until he reports to Diem on Washington trip.
 
"3. Staley has right philosophy and instincts. Have stressed over-riding importance of understanding VN point of view so as to establish true communication between U.S. and Vietnamese groups. Staley agrees and has established good rapport with Thuc (Yu Quoc Thuc, Dean of the Law School, University of Saigon, whom President Diem appointed to head the Vietnamese economic group to work with Staley). Staley is determined to remove any economic obstacles to prompt solution of security problem which he considers must receive first priority. Within U.S. group Defense and State support Staley's humanistic approach, whereas Treasury and ICA press for hard negotiation to make the Vietnamese bear larger share financial burden.
 
"4. Have urged Staley to hold joint press conference with Thuc for purpose of making following points to VN and world press.
 
"a. Staley group one of a series of follow-up actions stemming from Vice President's trip.
 
"b. Staley-Thuc have agreed. to a completely joint study and have merged their groups for this purpose.
 
"c. One of first things Joint US-VN Group did was make trip together to see situation at village level.
 
"d. Solution of security problem prerequisite of any successful program of economic development.
 
"e. Joint group will develop emergency economic program to provide immediate support to military operations at village level.
 
"f. Confident that Vietnam will win battle against Communists, the joint group is also preparing 3-5 year outline plan for economic and social development.
 
"Ambassador has now concurred and USIS is arranging press conference after we return to Saigon.
 
"5. Staley proposes four-part joint US-VN report which he and Thuc would submit to their respective Presidents as follows:
 
"Part 1. Military-security problem and financial measures required by both governments to insure its rapid and successful solution.
 
"Part 2. Emergency program of economic development designed to provide immediate support to military effort.
 
"Part 3. Outline of a 3-5 year economic development program with priorities of effort indicated.
 
"Part 4. Recommendations as to method and joint organization for implementation of over-all program.
 
"6. Appears to me that unless pressure is brought upon Treasury, ICA and State in Washington to take more liberal view of U.S. piaster support for initial 20,000-man increase priceless weeks will be lost and success of Staley mission may be jeopardized. Important to understand Ambassador is handling this particular negotiation entirely separately from Special Financial Group's effort. Obviously if Vietnamese get impression that U.S. is unwilling to take generous view of financing first 20,000-man increment, Staley will find it difficult to convince them we are sincerely trying to help save Vietnam from Communism. Somehow ICA and Treasury in Washington must be made to understand that the Vietnamese consider they should receive some credit on fiscal balance sheet for Vietnamese casualties in daily fight against Viet Cong. Help is urgently needed at Washington end as positions are frozen here. MAAG, favoring liberal approach and USOM with hard nosed position provide little prospect for any meeting of the minds within country."

 

74. Telegram From the Commander in Chief, Pacific (Felt), to the Joint Chiefs of Staff/1/

Honolulu, June 26, 1961, 12:34 p.m.

/1/Source: Department of State, G/PM Files: Lot 64 D 354. Top Secret; Priority. Repeated to the Departments of State and Defense and three military installations. The copy printed here is the one sent to the Department of State.

2622342. Navy message.

1. I would like to offer some tangible evidence of aid programs which have kept a free nation out of the Communist orbit. The following illustrates the vital requirement for military assistance in the preservation of internal security of countries currently under attack from within by the Communists.

2. At the end of the Indo-China war, South Vietnam was politically, economically and militarily weak and a ripe target for Communist expansion. High level analysts concluded that unless the South Vietnamese showed an inclination to make individual and collective sacrifices, which they had not made as of that time, no amount of external assistance could long delay complete Communist victory in So. Vietnam. As a point of fact, after the passage of seven years, the Communists have not been successful in taking over So. Vietnam. I would suggest that there are three reasons why they have not been successful:

a. Substantial US military and economic aid.
b. Pres Ngo Dinh Diem's determined leadership and successes.
c. Communist strategy and tactics.

3. The internal problems facing Diem in 1954 ranged from nearly complete demoralization of the nation in general and the armed forces in particular, to seemingly inevitable unification with North Vietnam which would have resulted in Communist domination over all of Vietnam. However, in the late spring of 1955, Diem managed to work a minor miracle by standing up against the sects-the Binh Xuyen, Hoa Hao, and Cao Dai-contrary to recommendations of his key advisers. He had been urged to accommodate with these groups, allowing them concessions and a continuation of their essentially feudalistic privileges in exchange for their tolerance of his govt and avoidance of deals with the Viet Cong. Diem's moralistic stand on this issue won him wide support among Vietnamese intellectuals and attentistes and also favorably affected international opinion.

4. Diem's successes in this period were due in great part to the steadfast support he received across the board from the US-political, economic and military. It was the success of the Vietnamese Army against the Binh Xuyen in Apr-May 1955 that gave the other dissident groups pause for thought, made the Communists realize that So. Vietnam was ready to fight for her freedom and provided the loyal So. Vietnamese with a renewed confidence in the govt's ability to provide for their security.

5. When the Jul 1956 unification deadline approached, Diem again displayed wise leadership. Despite remonstrances from the French and others, he circumvented the issue by the simple device of maintaining that the French, not the Vietnamese, had made the commitment and that Vietnam would not be bound thereby. Diem was able to take this strong stand solely by virtue of his growing power assets, the most conspicuous element of which was his armed forces in being, by this time solely supported by the US. It can be hypothesized that Diem's ability to circumvent an undoubtedly disastrous unification in 1956 was possible only because of US support-military and otherwise-of So. Vietnam.

6. By Jul 1957, the Communists' passive and political efforts had been frustrated by Diem's action, and the Viet Cong concluded that a change in strategy was necessary. The Viet Cong strength in armed personnel at this time was about 2000. Their new objective was to create a lack of confidence in the ability of Diem's govt to guarantee security. A reign of terror was substituted for peaceful penetration, acts of terrorism were started against local govt officials and the peasantry, murders and abductions were an integral part of this strategy of terror. Fortunately, this change of tactic did not take place until after Diem had achieved a considerable degree of military and political stability. Further, economic reforms introduced by Diem gave him increased support from the populace. This stability provided Diem a base from which he could fight the Communists. Without military and economic assistance, the development of this base would not have been possible.

7. Pres Diem, supported by increased US military and economic aid, acted to counter these increased Communist activities. In Nov 1957, the 1st Observation Group of the ARVN Special Forces was activated. The number of ARVN personnel undergoing special forces training was increased. A full-time special forces qualified US adviser was assigned to the MAAG, and the ARVN increased and expanded their psywar and civic action programs.

8. The Communists continued their propaganda and acts of terrorism, and during 1958 began successfully to infiltrate the remaining dissident element of the sects. This campaign produced results. By the spring of 1959, the Viet Cong strength was estimated at 3500, and the hostile acts had increased.

9. In early 1960, US personnel in Saigon obtained detailed information of a Viet Cong master plan which called for the Communist take-over of So. Vietnam during 1960. Communist activities during the past eighteen months confirm that their goal is domination of So. Vietnam. Also, during the past eighteen months, the Vietnamese have demonstrated a willingness to make individual and collective sacrifices, i.e.:

a. The results of the 1961 presidential election reflected to a considerable degree the confidence of the Vietnamese in Diem's govt in spite of the fact that many of his anti-Communist programs required great sacrifices on the part of a majority of his populace.

b. In the first months of 1961, the Civil Guard and self defense units have displayed an increased level of aggressiveness in many small operations against the Viet Cong. This increase in operational efficiency and attitude can be directly attributed to US military support and assistance now provided to these units since their reorganization under the Ministry of Defense.

c. Again, as a tangible result of US military advisory efforts and assistance, the regular units of the ARVN have initiated in 1961 more attacks against the Viet Cong than those taken against them by the Viet Cong. This initiative has resulted in a larger number of Viet Cong reported killed and has definitely bolstered ARVN morale and capability.

10. It is clear that the Communists view the attainment of control of SVN with deadly seriousness. In their eyes, they are only delayed in obtaining what they presume to be theirs as the spoils of the Indo-China war. The only real block to a Communist take-over in SVN today is the combination of Diem's strong leadership and the increased capability of SVN armed forces. It is this combination which we must continue to support. While the Communists have not accomplished their goal in So. Vietnam, neither have they been beaten, nor have they desisted. In fact, the new threat occasioned by Communist successes in Laos has produced the most crucial period in S. Vietnam's short history.

11. A predominantly Communist-controlled Laos would vitally threaten So. Vietnam's independence; would greatly extend the Communist frontiers with So. Vietnam; would bring substantially greater Communist military power to bear on the crucial Saigon defense complex; and would facilitate Communist infiltration and subversion.

12. The pattern of Communist activities in SE Asia is clear. Laos is a stepping stone on the Communist road to So. Vietnam. It is now evident that the Communists plan to split Laos from north to south in order to give them better access to So. Vietnam. The key terrain in current Communist operations is that part of southern Laos which is contiguous to So. Vietnam, Cambodia and Thailand.

13. Other authorities and Task Force Vietnam may be able to use the foregoing.

 

75. Editorial Note

On June 26, 1961, President Kennedy sent a letter to his Military Representative, General Maxwell Taylor, outlining the functions that he was to undertake in his new position. With regard to Vietnam, the President wrote

"Review the planning on Vietnam and give me your comments thereon along with your views on how to respond to President Diem's request for a 100,000 man increase in his army."

The President concluded that Taylor would want to confer with the officials responsible for critical areas such as Southeast Asia in formulating his response. (Washington National Records Center, RG 330, Lansdale Files: FRC 63 A 1803, General Taylor File; attached to a memorandum of transmittal from McGeorge Bundy to Secretary of Defense McNamara, dated June 28)

In his reply, dated June 29, Taylor outlined the following four steps:

"A. Dispatch an interim reply to Diem at once.
 
"B. Consider an additional 30,000-man increase from 170,000 to 200,000 but withhold a decision until the report of the Special Financial Group.
 
"C. Query the Chief, MAAG, as to the possibility of reducing the time required for inducting and training the new levies-the rate seems too slow to me.
 
"D. Obtain recommendation of the Ambassador, Chief MAAG, CINCPAC and Defense as to the ultimate goal to be set for the Vietnam Army." (Memorandum for the President; Kennedy Library, National Security Files, Vietnam Country Files)

 

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

Saigon, June 28, 1961, noon.

/1/Source: Department of State, Central Files, 751K.5-MSP/6-2861. Secret; Priority. Repeated to CINCPAC for PolAd. Received at 3:17 a.m., June 28.

1945. Task Force VN 11. References: A. Deptel 1534, B. Icato 1904./2/ I had full discussion with Thuan June 26 regarding financing 20,000 army increase for 1961. I told him (para b-1 reftel A) that I was now authorized to make available 178.5 million piasters from US-controlled sources provided GVN continues mobilization at full speed and on understanding that balance of 1961 military budget would be met from GVN resources. Thuan said that this offer had already been made when he was in Washington, that he had said then that GVN was unable to fill remaining gap, but that nevertheless GVN had moved ahead on mobilization as he had agreed to do in Washington. He said that he had upon his return again looked into GVN's budgetary situation and had found the cupboard bare; it was for this reason that they had been forced to cancel the international fair. While he had in good faith given me impression before his departure to Washington that problem might be solved by roughly 50-50 split of additional costs (i.e., by use $5.1 million equivalent plus GVN funds), it was now unfortunately true that GVN could not make up the difference nor any part thereof. They simply did not have the funds, he said. I told him that neither I nor my government wanted to take advantage of the fact that GVN was moving ahead on mobilization; nor did we wish to put squeeze on other essential programs required to win battle in Viet-Nam. However, the only available funds were those mentioned. Thuan said that this left him in an extremely exposed position; that the possibility of an increase in aid (amount unspecified) had been mentioned in Washington; and that he had confirmed that GVN would not put up additional funds.

/2/Telegram 1534 is Document 71; Icato 1904 has not been found.

In studying instructions beforehand, I had decided, after talking with Staley, that it would be unwise to use positions B-2 and B-3 because of their exchange rate feature, which would be prejudicial to SFG's work and predictably unacceptable at this stage to GVN. Nevertheless, I did try out alternative 2, i.e., conversion of $12.6 million balance at VN $73.5 to US $1, plus customs and taxes. Thuan said he would not be able to close the gap on this basis; that he hoped the SFG could work out some arrangement for future financing which would give a more realistic piaster yield for imports and would be acceptable to GVN, but he simply could not prejudge that issue in context of this problem. If he did, he said, he could not get it approved.

During discussion Thuan showed me, as evidence GVN's good faith, a chart of proposed tax increases for 1962 to be presented to the national assembly. Unable to agree, we left it that we would meet again on problem in a couple of days.

I did not use alternative 3.

As Thuan apparently expects additional dollar aid based on conversations in Washington, and it is not yet timely to discuss higher rates of conversion (changes in rates cannot be broached now without prejudicing SFG studies) believe advisable proffer additional aid now. Can be done if USOM receives immediate allotments. USOM proposes pay entire amount for industrial equipment.

Following is proposed negotiating line for which prompt approval requested.

Estimated 500,000,000 piasters required meet ARVN expansion balance 1961. (This estimate may prove to be high in light rate of induction and other factors undetermined at this time. If so, can be adjusted in 1962 aid figures. But optimum induction should be provided for at this time.) Can meet 200,000,000 piasters from remaining unprogrammed counterpart. Remaining 300,000,000 can be generated by present rate 35 plus 8 customs duties plus production taxes say 7 piasters, by allotment $6,000,000.

Therefore propose proceed pay 12.6 million final 1961 allotment on usual terms (which must do by June 30 to prevent lapse funds) and provide additional $6 million for above-specified purposes.

Foregoing will not prejudice SFG operations (although SFG will doubtless take $6 million into account) but would be proffered to GVN without prejudice to basis of future calculations of appropriate aid levels.

Please advise soonest, as this matter needs to be cleared up promptly if momentum and confidence to be maintained.

Nolting

 

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

Washington, June 28, 1961, 8:l9 p.m.

/1/Source: Department of State, Central Files, 7slK 5-MSP/6-2861 Secret; Niact. Drafted by Wood and Furst (ICA) and cleared with Heinz, Cottrell, B/FAC, FE, and ICA. Repeated to CINCPAC for PolAd.

1591. Task Force VN 11. Joint State/ICA. Embtel 1945./2/ Department and ICA have agreed release $4.5 million FY 1961 (see separate ICA message/3/) on basis Ambassador's strong recommendation as political demonstration of full U.S. support at time when Lao situation poses most grave military and psychological threat to GVN. No further funds available FY 1961; prepared review need additional aid in connection FY 1962 program.

/2/Document 76.

/3/Not further identified.

In making this decision Washington agencies have taken into consideration fact that no economic justification for this additional aid at this time. Have also considered whether grant of additional assistance might be misinterpreted by GVN as evidence U.S. no longer pressing economic reforms which would enable GVN meet internal financing problem without additional external aid urged by U.S. in past. Believe danger such misinterpretation considerable, but hopeful problem can be contained through subsequent effort Staley group, Brookings team and through Country team pressure, as appropriate to persuade GVN adopt needed reforms.

Agree that U.S.-GVN good will and mutual cooperation achieved by Vice President's visit and clear public indications that our backing of Viet-Nam is among highest objectives U.S. foreign policy should not now be weakened by further debate with GVN over question financing 20,000 man increase. To obtain maximum political benefit we prepared approve immediately balance of remaining FY 61 funds, $4.5 million. Also agree it would damage U.S.-GVN relations if GVN obtained impression, however erroneous, we were holding back our support to take advantage of fact they committed to mobilization.

Making these funds available to GVN should not only maintain momentum GVN mobilization and defense effort, but also put U.S. in stronger position to negotiate with GVN on problem sharing cost burden between U.S. and GVN. We will have responded generously to GVN request. Mobilization to 170,000 will be going on into early CY 1962. In this situation and when findings Dr. Staley's SFG are received there will be time examine mutual cost problem in calmer atmosphere and with more facts available.

In informing GVN funds available you should make clear we have made crash effort to meet request in view their good faith in starting mobilization and due to grave situation in SEA. In return we would welcome official GVN assurance that they will make extraordinary effort solve their financial problems by means available to them. We shall look forward later to full discussion mutual financial problems including aid levels.

FYI. Although no recent mention level GVN contributions to military budget, assume that 700 million piasters remains floor for 1961. End FYI./4/

/4/Nolting informed Thuan of the substance of this telegram on June 29 and Thuan responded that he was authorized to say that he could put up 50 million piasters to help finance the additional 20,000 troops. Nolting reported that the U.S. concession had a salutary effect and believed it would enable the Staley Group to reach a more satisfactory understanding than would otherwise have been possible. (Telegram 1955 from Saigon, June 29; Department of State, Central Files, 751K.5-MSP/6-2961)

Rusk

 

78. Memorandum From the Secretary of Defense's Assistant for Special Operations (Lansdale) to the Deputy Secretary of Defense (Gilpatric)/1/

Washington, June 30, 1961.

/2/Source: Washington National Records Center, RG 330, OSD Files: FRC 71 A 6489, Viet 091. Secret. Signed "Ed". Copies also sent to McNamara, Heinz, and Levy.

SUBJECT
Vietnam Economic Report

Colonel Ed Black has sent me the following information about the joint report by the Vietnamese government and the U.S. Special Financial Group headed by Dr. Staley. I will send him comments as he requested,/2/ including suggestions I have given to the U.S. Army Civil Affairs team which departs tomorrow for Vietnam. Colonel Black's message:

/2/Not found.

"Following is my outline of joint U.S.-VN economic report which was adopted by Staley-Thuc groups 28 June:

"1. Introduction:

A. How report came to be written. Outgrowth of Johnson visit.

B. General philosophy adopted by the two chairmen. (See Joint Press Release/3/).

/3/Not found.

"2. Military-Internal Security Program:
 
A. Brief resume of security situation, taking into account (1) the stepped-up level of VC activity and (2) the potential effects of events in Laos on the GVN security problem.
 
B. The general defense concept of the GVN.
 
C. The ARVN.
 
D. The civil guard.
 
E. The local defense forces.
 
F. The youth corps.
 
"3. Emergency economic program:
 
A list of programs designed to insure the success of the military-internal security program by providing immediate, impact-type economic and social aid to the villagers and other important groups.
 
"4. Medium range development program:
 
The broad guidelines of a 3-5 year program designed to make Vietnam a self-sustaining economy.
 
"5. Financial recommendations:
 
Recommendations as to the financial and other measures to be taken by each government in support of the three essential programs outlined above.
 
"6. Organizational recommendations:
 
Specific recommendations concerning the establishment of procedures to assure continuing joint GVN-U.S. refinement of the plans and supervision of the implementation of the three essential programs outlined above.
 
"I am working directly with Gen. Khanh and MAAG on sections 2, 3 and 6. Under section 3, the Vietnamese have proposed the following with first priority to A and B:
 
A. Communications at village level including wire, radio, and community.
 
B. More agrovilles.
 
C. Flying doctor program.
 
D. Free distribution of insecticides and fertilizers.
 
E. Widespread program of rubber planting on small holdings on basis of 3 hectares per family.
 
"Wolf Ladejinsky (advisor to President Diem on agrarian affairs) also places village communications in highest priority. Would appreciate your suggestions for section 3.
 
"Under section 6 we are looking for recommendations as to desirable joint U.S.-VN agencies which would bring U.S. and VN opposite numbers into continuing personal contact, thus improving understanding and trust in dealing with daily problems. As examples, we are considering desirability of joint committee on rural reconstruction along lines of Taiwan experience. Also joint U.S.-VN defense board patterned after similar organizations in Philippines and Japan. Would appreciate your views."

 

79. Memorandum of a Conversation, Department of State/1/

Washington, June 30, 1961.

/1/Source: Department of State, Central Files, 751K.00/~3061. Secret. Drafted by Ainsworth and initialed by McConaughy.

SUBJECT
Viet-Nam and Laos

PARTICIPANTS
Mr. D. N. Chatterjee, Charge d'Affaires a.i., Indian Embassy
Mr. Walter P. McConaughy, Assistant Secretary for Far Eastern Affairs
Mr. Rogers B. Horgan, Officer in Charge, Indian Affairs
Mr. Thomas W. Ainsworth, Acting Officer in Charge, Viet-Nam Affairs

Mr. Chatterjee called at Mr. McConaughy's request to discuss the situation in the Indochina area./2/ Mr. McConaughy opened the conversation by remarking that the Department had been very busy recently with questions concerning Laos. General Phoumi, who was still here on his current visit, seemed to have decided to proceed further with the necessary steps looking to the attainment of a situation of guaranteed neutrality for Laos. The developments in Laos had required us to look carefully at the situation in all of Indochina. In particular the relationship to the situation in Viet-Nam was very close. Events in Viet-Nam and particularly the Communist guerrilla activities and infiltration of agents from the North had created a very grave problem which in our view clearly involved violations of the Geneva Agreements by the Communist side. In this connection we had reached a decision recently, because of the Communist violations and their stepping up of infiltration and subversion, that it was necessary to increase the strength of MAAG Viet-Nam by about 100. This was done solely because the Communist violations made a step-up of training GVN forces necessary. Our action did not mean that we did not respect the Geneva Agreements of 1954 or that we intended to push aside any part of these Agreements, even Articles 16 and 17. It was necessary, however, to have a freer hand to cope with the violations by the Communist side. The addition of the 100 personnel did not increase the strength of MAAG to the point where it would become a public issue. It might be necessary, however, to go higher in the future. This would involve only the minimum number necessary. We hoped that such an increase would not be necessary but that would depend on what the Communists did. We felt it most important to inform the Indian Government of this decision and our view of the situation because of the extremely important role India has played and is playing with regard to affairs in the Southeast Asia area. This included India's part in the present conference concerning Laos as well as in the earlier Geneva Conference and in the International Commission.

/2/On June 13, Cottrell informed McConaughy that the British, French, Canadians, and the U.S. Embassy in India all believed that the time had come to inform the Indian Government about the increase in the MAAG in Vietnam. (Memorandum, June 13; Department of State, Vietnam Working Group Files: Lot 66 D 193, 3-D GVN, ICC, April-June 1961) On the memorandum McConaughy wrote: "Pls make appt. with Indian Embassy."

Mr. Chatterjee thanked Mr. McConaughy for the information and commented that presumably the additional 100 personnel, or whatever the MAAG might amount to in numbers, merely indicated a stepping-up of the training effort and not that the American personnel would don uniforms and fight. Mr. McConaughy replied that Mr. Chatterjee's interpretation was completely correct. There was no intention at all of having the Americans take over the fighting.

Mr. Chatterjee continued that he had asked this because of the reports concerning Laos where it was said that American officers had been sent directly to the front with the local forces. He wished to raise one other point. Because of the possibility of escalation he wondered whether the US intended to "hit North Viet-Nam in kind." When he talked recently with Mr. Rostow,/3/ the latter had been much exercised over the situation where cadres, potential leaders in South Viet-Nam, were being wiped out by the Communist action and had indicated that he felt it essential to take stronger countermeasures against the source of the problem. Certain press reports had also suggested that we might be thinking of retaliation in kind against North Viet-Nam.

/3/No record of this conversation has been found.

Mr. McConaughy said that of course he could not answer for all contingencies in the future, but the assignment of this group of 100 personnel to MAAG had no relation to such a change of policy. They were intended to improve the training of the Vietnamese forces for counter-guerrilla action. While we have to preserve our freedom of action as regards possible contingencies, there was no plan to take action at this time of the sort Mr. Chatterjee had inquired about and this increase was not related to any action of that kind.

Mr. Chatterjee remarked that after his talk with Mr. Rostow, he had informed the Ministry of External Affairs. He expected to be seeing Mr. Rostow again on this subject. One of Mr. Rostow's main complaints was that the ICC was not really fulfilling its functions by investigating all complaints of violations. He felt he should point out two matters in this regard. First, the American attitude was based on the view that whenever a complaint against North Viet-Nam was filed, the North Vietnamese objected and this blocked any action by the ICC. Information he had received from India confirmed that North Viet-Nam had done this but that South Viet-Nam had actually done it on more occasions. He did not have complete information but believed that the Ministry might be assembling it.

Mr. McConaughy asked Mr. Ainsworth whether our information confirmed this. Mr. Ainsworth said that we had had reports that the Vietnamese Government had on several occasions objected to proposals for ICC investigations within its territory, but suggested that there seemed to be a considerable difference between the substance of the proposed investigations in complaints filed against the GVN and those filed against the Communist side. The GVN took the view that not being a signatory to the Geneva Agreements, its cooperation with the ICC was a voluntary act on its part.

Mr. Chatterjee said that the second of his points was that the Indian Government had now told the Indian Chairman of the ICC (in fact long before his conversation with Mr. Rostow) that the ICC must investigate complaints and that obstacles by either government were no excuse for inaction. Mr. Chatterjee had asked the Ministry for further details. Mr. Desai plans to get in touch with Ambassador Galbraith to discuss these questions at length. The problem was not that the Indians ignored complaints but that the Poles in particular made things extremely difficult and in fact the Canadians were also difficult on some occasions. When the Poles and Canadians each took a rigid position on a subject, Gopala Menon and some others had tended to take a middle position regardless of the merits of the issue. India hoped to correct this tendency but it would be difficult if both sides continued to take inflexible polar positions. He hoped that if the Indians' attitude had appeared negative before, it would be more positive now. Mr. Desai's attitude should be a great help in this respect. As for MAAG, it is a fact that it exists. A quantitative augmentation in MAAG was one thing, but a qualitative change such as would be involved in a significant alteration of its functions was quite another and would be likely to give an excuse for the neighbor to the North to come in. One may overestimate the Chinese Communists either as to their capabilities or as to their inclinations to embark on aggressive adventures, or both, but on our side we must be careful not to give them unwarranted excuses for such action. It seems that the military sometimes are likely to take the bit in their teeth and run. A partisan war (of which Mr. Chatterjee said he had had some experience in the sense of having spent some time in the jungle on the CBI front in World War II) presents special problems and this is often likely to lead to a situation where the obvious military solution appears to be attacking the home base of enemy forces as was the case in Kashmir and in Korea.

Mr. McConaughy observed that with us the military would not make the fundamental decisions on such questions by themselves. Even in the case at hand of the MAAG increase, care had been exercised that the number which was traditionally regarded as the MAAG ceiling was not exceeded. We shall take the minimum action necessary to deal with the problems we face.

[Here follow three paragraphs on the situation in Laos.]

Mr. McConaughy said that he desired to clarify his earlier reference to a MAAG "ceiling". The MAAG strength was not now over what had traditionally and unofficially been regarded as the MAAG "ceiling" but we could not tie our hands. Mr. Ainsworth observed that according to our understanding the most recent ICC communication on the subject of MAAG (which had been a letter to the Vietnamese Government) had not said anything about a specific numerical "ceiling" for MAAG. Consequently when we mentioned a MAAG ceiling we were simply speaking in general terms and did not mean to imply that we felt that a specific figure had been set in this respect.

Mr. Chatterjee replied that the numbers of the MAAG were less important than its quality and the role it played. There was also the matter of one's over-all assessment of the situation. Mr. Krapf, the German Minister in Washington, had recently remarked that the Russian national game was chess, the American national game was baseball. This might have some significance in terms of the difference in habits between rapid reflex action and long range planning. It was often hard to tell which move on a chess board was really the significant one. At the present time, to return to the baseball metaphor, there appeared to be quite a number of balls flying about, what with Laos, Berlin, etc. Walter Lippman had also stressed that one should never get held or committed by a move in one part of the map. As for the Chinese, his (Chatterjee's) view was that they generally play in their own court unless they think they can get a quick victory. Thus they had moved into Ladakh which was easy but would be most unlikely to move seriously against India proper. Concerning Viet-Nam, the Chinese would weigh the factors carefully but any development which would give them an excuse to move in there would be a great temptation. They obviously had strong capabilities in the area and it would give them a chance, which he believed they would welcome, to chasten Ho Chi Minh. It was certainly not desirable to have another Korea. In a MAAG the quantity was less important than quality, it was important not to give the Chinese an excuse. The people of South Viet-Nam, he continued, would be our most valuable ally against the Communists. Diem was still completely dependent on the US. It would be most helpful if the Vietnamese could display more initiative on their own which would make them a true ally. North Viet-Nam was certainly no attraction to them. It was by all accounts a completely drab area. As regards South Viet-Nam, a combined political and military solution was needed. Mr. McConaughy observed that we also hope that measures would be taken to increase the political incentive for a more active Vietnamese popular participation in the struggle against the Communist subversion. Diem had already taken some steps, which we thought should be useful in this respect.

On the way to the street, Mr. Chatterjee explained to Mr. Horgan that one reason he raised the question of our "hitting North Viet-Nam in kind" was that the Soviet Embassy had conveyed to him the Soviet impression that the US had this intention. He had not mentioned this to Mr. McConaughy because he had not been able to assess the Soviet purpose in telling him this: whether it was merely argumentative; or whether it was a matter of serious concern to the Soviets which they presumed Mr. Chatterjee would convey to the US.

 

80. Memorandum From the Deputy Director of the Vietnam Task Force (Wood) to the Director of the Task Force (Cottrell)/1/

Washington, July 1, 1961.

/1/Source: Department of State, Vietnam Working Group Files: Lot 66 D 193, VN 1961 TF/10 thru 21. Secret.

SUBJECT
Conversation with Mr. Rostow/2/

/2/The date of this conversation has not been determined.

Rostow made the following points:

(1) He has reason to believe that within the next three to six months we will need all the documentation we can to show the seriousness of Viet Cong infiltration in Viet-Nam in order to forestall an attempt by Adlai Stevenson to suggest UN intervention in Viet-Nam. He suggested urgently that CIA be required to prepare and keep current a dossier with covering summary memorandum designed to show the intensity, trend and seriousness of Viet Cong infiltration in Viet-Nam. (Comment: I concur.)

(2) He referred to the present ARVN sweep in Vinh Binh province and asked pointedly what would be done to insure that after this operation was over the Viet Cong would be kept out of Vinh Binh province. Did the ARVN have plans and capabilities of keeping the area clean after the sweep was over. I pointed out that Vinh Binh province was between two rivers and the sea but said that I had no information as to future plans for keeping the province sterile.

I said that in general terms we regretted that there was no plan based on the geography of Viet-Nam for sweeping the country clean, and pointed out that Thompson had made a report to the Vietnamese government in April 1960/3/ suggesting the framing operations which had succeeded in Malaya. I said that you and I had discussed this and were in agreement that such framing operations should start in Saigon which was the ultimate target of the Viet Cong and move northwestward on the road to Phnom Penh up to the Cambodian border and the Tay Ninh salient which was one of the worst bases for Viet Cong operations. Thereafter the framing operation could be extended northeast-southwest along the Cambodian border.

/3/No copy of Thompson's report, given to the Vietnamese Government by the British Embassy in Saigon on April 13, 1960, has been found, but a three-page summary of the report, prepared by Wood and dated April 4, is in Department of State, Vietnam Working Group Files: Lot 66 D 193, VN 1961 TF/10 thru 21.

Rostow jumped to his feet and said "This is the first time I have heard a practical suggestion as to how we should carry out our operations in Viet-Nam". He asked that the Task Force prepare a telegram for Saigon inquiring about a plan for operations to push the Viet Cong out of Viet-Nam and said that we should query them about the Thompson plan concept. I agreed to do so./4/

/4/At this point on the source text, the words "on the condition that we did not mention the fact that this idea had originated with the British" are crossed out.

Later Bob Johnson said that he and Rostow were also concerned as to whether the command structure set up by Diem was really working or whether Diem was still running everything himself in a rather haphazard manner. I pointed out that the counter-insurgency plan enabled us to check from time to time as to whether the Vietnamese were living up to their end of the bargain before we made further commitments and suggested that we put in as two prerequisites to a 200,000 man increase (1) a requirement for an overall strategic plan for ridding Viet-Nam of the VC and (2) assurance that the chain of command concept was really taking root in the GVN.

Comment: I don't think this need hold up plans for increasing the 200,000 since the increase will not commence until February 1962.

There is attached a draft telegram along the above lines./5/

/5/Not found attached to the source text. No such telegram sent to the Embassy in Saigon has been found.

 

81. Editorial Note

On July 3, the Chief of the Military Assistance Advisory Group in Vietnam, General Lionel McGarr, delivered to President Diem an aide-memoire reviewing the military situation in Vietnam and presenting recommendations for improvement in the performance of the Vietnamese armed forces. A copy of the aide-memoire is in Washington National Records Center, RG 84, Saigon Embassy Files: FRC 66 A 878, 350 Poll Affairs. It is printed in full in United States-Vietnam Relations, 1945-1967, Book 11, pages 227-238.

 

82. Letter From the Acting Secretary of Defense (Gilpatric) to the Secretary of State/1/

Washington, July 3, 1961.

/1/Source: Department of State, S/S-NSC Files: Lot 72 D 316, NSAMs. Top Secret.

Dear Dean:

The Department of Defense, as directed by National Security Memorandum No. 52,/2/ has made an assessment of the military utility of a further increase in South Vietnamese armed forces from 170,000 to 200,000. It is our view that with the present deteriorating situation in Southeast Asia it is in the best interests of the United States to support in principle this increase in the force structure for Vietnam to provide for two divisions or their equivalent (including necessary Naval and Air Force augmentation). With the critical increase of Communist insurgency in South Vietnam, the present military posture of North Vietnam, and the Communist potential resulting from the expansion of Communist controlled areas in Laos, a 30,000-man increase in South Vietnamese forces is justified.

/2/Document 52.

Such an increase, which would require additional MAP and Defense Support type funding, would permit activation of the two additional infantry divisions requested by President Diem in his letter of 9 June 1961 to President Kennedy./3/ Since President Diem envisages an eventual increase of the force level to 270,000, it should be made clear that U.S. approval of the 30,000-man increment would not imply U.S. acceptance of the 270,000 force level.

/3/See footnote 3, Document 69.

This increase of 30,000 should not be initiated until the currently authorized increase of 20,000 is properly amalgamated into the GVN force structure. It is our view that the additional increase should proceed only as rapidly as the GVN is capable to receive, support, administer, train, and maintain forces in being as well as to provide for the increase.

Sincerely,

Ros Gilpatric

 

83. Memorandum of a Conversation Between the Executive Secretary of the National Security Council (Smith) and the President's Military Aide (Clifton), The White House/1/

Washington, July 3, 1961.

/1/Source: Kennedy Library, National Security Files, Vietnam Country Series. Secret.

General Clifton reported that the President, in approving the text of a letter to be sent to President Diem as an interim reply to Diem's letter of June 9,/2/ expressed a desire to know more about the military considerations involved in Diem's request to increase his military forces by an additional 100,000 men.

/2/See footnote 3, Document 69. President Kennedy's reply is infra.

The President asks that the appropriate officials consider sending to Viet-Nam a qualified military group which would study the Viet-Namese request for additional soldiers. This U.S. group would be able to supply to the President its informed judgment as to whether the U.S. should assist Diem to increase his army by 100,000. In the President's view, the military survey group should be in Viet-Nam before the economic group headed by Dr. Staley has completed its study. The President is interested in knowing what share of the cost of equipping and maintaining 100,000 additional men would be borne by the U.S. He noted that the 20,000 increase of Viet-Namese forces was to be jointly financed.

The President commented, in discussing who should undertake the military survey, that it would probably not be possible for General Taylor to go to Viet-Nam at this time.

Bromley

 

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

Washington, July 3, 1961, 5:27 p. m.

/1/Source: Department of State, Central Files, 751K.oo/7-361. Secret; Priority. In telegram 12 to Saigon, July 4, the Department asked the Embassy to insert in the text an additional sentence-the second sentence in the fifth paragraph of text as printed here. (Ibid., 751K.00/7-461) In telegram 18 from Saigon, July 5, the Embassy referred to both telegrams 8 and 12 from the Department and reported that the President's letter was delivered to Thuan that day, but since Diem was unavailable there was no reaction to report. (Ibid., 751K.00/7-561) No copy of the letter delivered on July 5 has been found.

8. Task Force VN. There follows text of a letter from the President to President Diem. In presenting it to President Diem the Ambassador should explain that it is not intended for publication.

"Dear Mr. President:
 
I have read with care your letters of May 15 and June 9/2/ and have discussed with your able representative, Secretary of State Nguyen Dinh Thuan,/3/ the grave problems which you and your people are facing. Vice President Johnson has told me of the valor of the Vietnamese.
 
/2/See footnotes 4, Document 55, and footnote 3, Document 69, respectively.
 
/3/See Document 69.
 
In view of the communist menace in Viet-Nam and of the serious threat posed to your country by the situation in southern Laos, both of which were set forth cogently in your second letter, I am very pleased to learn that the process of increasing the armed forces of Viet-Nam from 150,000 to 170,000 was recommenced recently, before a final understanding on financing had been reached. I am also gratified to know that on June 29 your government reached agreement with Ambassador Nolting on the joint financing of this increase./4/ Due to the gravity of the situation and to the Vietnamese government's willingness to go ahead with this increase in its armed forces even before the question of joint financing had been settled, we have sought to be as cooperative as possible.
 
/4/See footnote 4, Document 77.
 
Meanwhile, as the mobilization to 170,000 is continuing, the Department of Defense is urgently studying your request for support in a further long term increase to a 270,000 man force. In addition to exploring the usefulness, methods and procedures of such an increase we will both have to give the most careful attention to the large amount of funds which such an increase will involve for our two countries. I hope that the findings of Dr. Eugene Staley may provide helpful guidelines for both our Governments.
 
Returning to your letter of June 9 I was gratified to read of the determined and intelligent efforts being made to continue the economic and particularly the educational progress which Viet-Nam has made despite the Communist campaign of violence. Such programs are among the basic developments which will nourish the aspirations of the Vietnamese. I have also noted the new political institutions which were mentioned in your letter. I hope that these institutions and others like them will be strengthened by the participation of the rising generation and that they will have a healthy growth.
 
As to Cambodia, the communist threat to Southeast Asia would appear to clearly outweigh all other considerations and to necessitate improved relations among the free nations of the area. Would it not be in the interests of your Government to seek accommodation with Cambodia on the questions of improved border control and the settlement of the debts which are outstanding under the Paris Accords? Ambassador Nolting is at your disposition should you wish to discuss the matter further.
 
In closing I would like to affirm to you in the strongest terms that we support your government's determination to resist communist aggression and to maintain its independence.
 
We admire the courage and tenacity displayed by the Government and people of Viet-Nam and particularly by their President.
 
With warm personal regards,
 
Sincerely,
 
John F. Kennedy"

Rusk

 

85. Memorandum From the Director of the Vietnam Task Force (Cottrell) to the Assistant Secretary of State for Far Eastern Affairs (McConaughy) /1/

Washington, July 8, 1961.

/1/Source: Kennedy Library, National Security Files, Vietnam Country Series Secret. Drafted by Cottrell and Wood. The source text is attached to a typewritten note of July 11 from Robert H. Johnson to Rostow, in which he wrote the text was a "bootleg copy" for Rostow's private information pending receipt of a copy through regular channels. Johnson gave the following appraisal of the memorandum:

"The answers look generally all right to me. I do think that the Soviets would think several times about creating simultaneous crises in Berlin and South Viet Nam. They might have considerable trouble managing two crises at once, particularly in view of the fact that North Vietnam and Communist China have different interests in the Viet Nam situation. Moreover, they would probably worry about our ability to handle two crises simultaneously. They might fear that such a situation would produce a convulsive reaction on our part or other forms of irrational, unpredictable behavior."

SUBJECT
Viet-Nam

REFERENCE
Memcon dated June 21 between G-U. Alexis Johnson, and Professor Rostow/2/

/2/Reference is to U. Alexis Johnson's memorandum of his telephone conversation with Rostow on June 21 in which Rostow expressed the view that "we were in a brief interval before great heat might be put on us in Viet Nam, and he wouldn't be surprised if it should come to a head at the time of the Berlin crisis." Rostow also expressed concern about the effectiveness of Diem's administrative proposals and that McGarr's support of these proposals reflected "desperation." Rostow urged that "we should not look just on the surface of the request for 100,000 men, but look beneath it, and should really figure out where we stand and what we do." Rostow suggested that if the President went ahead with his plans to name Maxwell Taylor as his military adviser, Taylor "might go out and take a thorough look on the ground at the military administrative program." Johnson agreed with Rostow's idea that the U.S. Government should prepare for the contingency that the Vietnam question would be raised in the United Nations by assembling evidence and preparing a case. Johnson said that "the material was around but had not been assembled for that particular purpose." (Department of State, Johnson Files, Telephone Conversations)

In the reference conversation Professor Rostow raised certain questions which Ben Wood and I would answer as follows:

Q: Will not the communists put great heat on Viet-Nam, perhaps timed for a crisis over Berlin?

Ans: We think this very possible. They might also time the "heat" to coincide with the end of the Geneva Conference on Laos.

Q: How are Diem's administrative "reorganizations" progressing? Is he continuing to operate everything from his own desk?

Ans: Reports indicate that Diem still exercises a tight, personal control but we hope this may be loosened gradually within the framework of the new organizations.

Q: Diem is now asking for a 100,000 force increase above our agreed 170,000. McGarr s endorsement/3/ sounds tike desperation. In reviewing this request, should we not look beneath the surface and figure out where we stand?

/3/See Document 66.

Ans: The President has informed Diem (Deptel 8 of July 3/4/) that "the Department of Defense is urgently studying your request for support in a further long term increase to a 270,000 man force. In addition to exploring the usefulness, methods and procedures of such an increase we will both have to give the most careful attention to the large amount of funds which such an increase will involve for our two countries. I hope that the findings of Dr. Eugene Staley may provide helpful guidelines for both our Governments."

/4/Document 84.

At the present rate of mobilization the Vietnamese armed forces will not reach 170,000 until February 1962. This gives us time to study further increases. We believe that the following prerequisites to further increases in ARVN should be obtained: (a) assurances from Task Force Saigon after consultation with the GVN that the reforms which have been decreed in Viet-Nam to tighten the chain of command and to unify the intelligence function are actually being implemented, (b) that MAAG and the Vietnamese military work out an overall geographical strategic plan for driving the Viet Cong out of Viet-Nam, (c) agreement with the GVN, after the Staley recommendations are received, on the basis of cost sharing between the U.S. and GVN.

In addition to the above affirmative action on the part of Diem, the question is whether a 270,000 force level makes any sense. The arguments are:

1. In Malaya a force of 400,000 was needed to bring the guerrillas under control. (The guerrillas did not have substantial outside help.) If the Vietnamese armed forces are increased by 100,000 the total size of the security forces including 270,000 ARVN 68,000 Civil Guard and 50,000 Self Defense Corps will be 388,000. If the Police Force is thrown in the total would be just about 400,000, the same size as was needed in Malaya.

2. In Malaya the job was easier for the following reasons: (a) a narrow isthmus frontier (b) the guerrillas were mostly Chinese and easily identifiable (c) the guerrillas could be starved out more easily because food is much less readily available than it is in Viet-Nam (d) experienced British officers were running the show far more directly than is the case in Viet-Nam where our MAAG still acts in an advisory capacity.

3. Given Viet-Nam's long exposed flank adjoining southern Laos, which may soon be an open base for Viet Cong operations against Viet-Nam, it may not be a sin but a necessity to increase the Vietnamese armed forces as rapidly as the Vietnamese military absorptive capacity permits.

4. As the Viet Cong step up operations in SVN, additional troops are necessary to guard villages, etc. The step-up may be greatly accelerated in the near future-too soon to train and field the additional 100,000-but the requirement for more troops will be urgent.

5. If the ARVN is called upon to operate in Southern Laos this will raise troop requirements.

6. The main reasons set forth by Diem for the increase are: a) to guard against a DRV drive across the 17th parallel, b) to set up effective border controls, c) to prosecute the counter guerrilla operations, d) to allow relief and retraining of his present troops who are fully committed.

7. MAAG, CINCPAC and JCS are now weighing the above and other factors to determine whether Diem needs 270,000. General Taylor has prompted an inquiry by JCS to MAAG and CINCPAC on whether the present training rate for the 20,000 increase cannot be accelerated.

8. JCS is requesting CINCPAC and MAAG to set forth their strategy for destroying the Viet Cong. This should reveal data applicable to the problem of whether the 270,000 force level makes sense.

Q: Are we getting prepared on a contingency basis if the Viet Nam question gets into the United Nations?

Ans: Task Force Viet Nam has requested INR to assemble a dossier (including photos) of DRV aggression in SVN. CIA will cooperate with INR.

Q: Would if be a good idea to request General Taylor to have a look on the ground at the military administrative program?

Ans: We think it would, if the General has the time.

 

86. Editorial Note

On July 8, 1961, as Ambassador Nolting was returning to his residence in mid-afternoon from the Embassy chancery in Saigon, two unidentified men on a motor bicycle threw a hand grenade at his automobile. The grenade hit the automobile, but did not explode. The assailants escaped. In telegram 34 from Saigon later that day, Nolting briefly described what had happened. Expressing the hope that "no special notice" would be taken of the incident, Nolting said that the Embassy would continue business as usual. (Department of State, Central Files, 123-Nolting, Frederick E.)

To prevent unnecessary anxiety on the part of American residents in Saigon, Nolting issued a notice on July 11 urging that they also continue business as usual but that they conduct themselves prudently in the near future. A copy of the notice was sent to the Department of State as an enclosure to despatch 27 from Saigon, July 13, which provided further details on the July 8 incident and concluded that the evidence suggested that the attack "was not part of a campaign of terror directed against Americans but was more probably an isolated incident instigated by overzealous but unskilled Viet Cong cadres." (Ibid.)

On July 31, Nolting wrote to Cottrell about the safety of Americans in Vietnam and enclosed reports of rumored Viet Cong terrorist activities in the Saigon area. Nolting stated that he was not requesting any specific protective actions but was merely letting Cottrell know "how things look to me in connection with the security of Americans, and to send you some of the confusing reports with which we are daily confronted." The Ambassador concluded:

"What it all adds up to in my judgment-and, I think it is fair to say, in that of our Security Watch Committee-is a scare campaign on the part of our adversary to weaken and if possible destroy U.S. influence and action in this country. To the threats, the Communists add from time to time an action or two, to lend credence to the threats. What, if anything more, they can or will do remains to be seen. We here are unanimous on the proposition that we will not be bluffed, or terrorized, out of the necessary work to be done here.
 
"The safety of American dependents weighs heavily on my mind, as you can well understand. In the light of all evidence available to me, I see no reason for changing our present policy with respect to dependents, which is that they should be permitted to come to this post, subject to a full briefing of the officer concerned on the conditions here, after which he should make his own decision. If directly asked, I should myself say that I see no compelling reason not to bring dependents." (Ibid., Vietnam Working Group Files: Lot 66 D 193, Administration-U.S. Embassy Saigon)

On May 23, 1962, a special military tribunal in Saigon condemned to death four students for various acts of terrorism and sabotage. One of them was implicated in the assassination attempt on Ambassador Nolting, although the student claimed his participation was indirect. (Telegram 1523 from Saigon, May 25, 1962; ibid., Central Files, 751K.00/5-2562)

 

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

Washington, July 10, 1961, 9:45 p.m.

/1/Source: Department of State, Central Files, 751K.00/7-1061. Secret; Priority. Drafted by Cottrell and Wood, cleared with McConaughy, initialed by Cottrell for the Secretary, and repeated to CINCPAC.

35. Task Force VN. Keen interest in Viet-Nam continues at highest levels here, status reports are widely read as well as individual reports from all U.S. agencies in Viet-Nam. At this point we have need and request for a personal general assessment from Ambassador Nolting as to how he views our progress. For example does he believe Diem reforms in military command, intelligence, economic and social fields are taking hold? Or are they mere paper devices to cover Diem's continued personal detailed management? How successful was the recent Delta sweep? Will it be followed up by further sweeps of same area as means establishing real sterilization? Is this example of improved military coordination planning and strategy or does [it] represent flashy operation without real permanent improvement in area? Is there any effective central planning done by any agency other than Diem himself? Is real progress discernible as result recent U.S. moves or is progress expected or is it business as usual? What is your judgment GVN's control security situation Saigon in view grenade attempt on you?/2/ Assessment need not be limited to above subjects but these are the type of questions which are being asked. Reply by the Ambassador will give weight to the answers relayed to highest levels.

/2/See Document 86.

Rusk

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