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THE SECRETARY OF DEFENSE

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KEMORAHDIM FOR U?HE SECRETARY OF TILE ARMY -

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THE SECRETARY OF THE AIR FORCE. --THE CHAIHMAIJ, JOI171 CHIEFS OF STAFF ;;* THE ASSISTANT SECRETARY"OF DEFENSE i m *~ (international Security Affairs)

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J : SUBJECT:. \] Capability to Deal vrith Local Aggression In Vietnam . '

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* ' ' "■ REH5RE?ICES: Memo for NSC from Executive Secretary, subject:

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\j:':±n Vietnam", dated.l6 September 1955; NSC 5602/I;

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" 1* At its meeting on 7' June 1956, the National Security Council

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a. '] .'Noted and discussed a presentation on U.S. capabilities, .''■....'■/• ' preferred to in NSC-5501, to deal with local aggression

-,.'•'" in Vietnam in accordance vith the provisions of current . ■ ' ;i - .\ policy (lISC 5602/1). The presentation was made by the , .

Chairman, Joint Chiefs of S f, for the Department of " ' ■ "■ Defense pursuant to NSC Action No. 1522-c. / ■ -- ,

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■ - /- / b.. Noted the President's viev that it would be desirable

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(2) -To discreetly manifest in other "ways U.S. int rest in assisting Free Vietnam, *in accordance with the * Manila Pact, to defend itself against external aggression.

; ' 2. The action in paragraph l~b above, as approved by the President,

has subsequently been transmitted to the Secretary of Defense for appropriate implementation. t , . / ./ : ..

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NATIONAL INT E L UGENG E

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Supersedes N!S 63.1-3-55 end N!S 63.1-55)

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ji'/te following intelligence organizations parti ". led in the preparation of this estimate; The Central Intelligence Agency and ike intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and The Joint Staff.

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on 17 JvJy 1956. Concurring ioete the Special Assistant, Iniel-Ugmce, Department of State; (he Assistant Chief of Siciy, Intelligcn-ce, Department of Vie Array; the Director of Naval Intelligence; the Director of Iniellijcnce, USAF; end the Deputy Director for Intelligziica, The Joint Stag. The Atomic Energy Commission Representative to His I AC and the ^issfsi-ant Director, Federal Bureau of Investigation, c^bsU:ir.ed, the subject being outside of their jurisdiction.

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PROBABLE DEVELOPMENTS IN NORTH. AND SOUTH

VIETNAM THROUGH MID-1957

I

THE PROBLEM

To analyse the current political, economic, and military situation in North and South Vietnam and to estimate probable developments through mid-1957.

CONCLUSIONS

1. We believe that the Communist "Democratic Republic of Vietnam" (DRV) will not attempt an open invasion of South Vietnam or a large scale guerrilla warfare effort during the period of this estimate because of the clanger of US or possibly SEATO counteraction and because such action would prejudice Bloc emphasis on peaceful coexistence elsewhere. The Communist regime will almost certainly remain in firm political control throughout the period of this estimate, despite some passive resistance and serious economic difficulties. It vail require continued large scale Bloc aid to make even limited progress toward developing a self-supporting economy. The DRV army will retain the capability of defeat-incr the total forces of South Vietnam, Laos and Cambodia. (Paras. 7-11, 13-16, 18-21, 64-68)

2. In South Vietnam, the trend toward political stability and popular confidence in the government will probably continue, barring a DRV invasion, larj ale guerrilla action, or the death of Diem. Nevertheless, such contingent developments :; intensified Bloc support for DRV objec-

tives or reduction in Diem's international support could stimulate greater Communist subversive pressure, weaken the Soutli Vietnam government's confidence, cause some loss of its public support, and revive opposition efforts for reeoncilia^ tion with the north, (Paras. 35-39, 69-72)

3. Progress toward resolving basic economic problems will probably continue slow, but economic, conditions in South Vietnam are not likely to have serious adverse political effects during the next year, as rice production, rubber expofl and large scale US aid provide reasonable living standards. (Paras. 40-46)

4. All significant sect resistance in South Vietnam has been eliminated, but some 8,OQO-10,000_aayned Communists and a | Communist political network scattered \ through the villages continue to pose a . serious internal security problem. The " effectiveness of the South Vietnam army j will probably improve gradually as more units are released from security missions for training, but by mid-1957 it will still be, unable to contain a DRV attack for a prolonged period. (Paras. 47-55)

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DISCUSSION

I. INTRODUCTION

5 Under the terms of the 1954 Geneva Ac-' corc ] S on Indochina, the area of Vietnam north

of the 17th parallel was placed under the administration of the Vietnamese Communists. The French assumed responsibility for implementation of the Armistice provisions in the area south of the 17th parallel, but neither the French nor the Diem government has acknowledged responsibility for implementing the political settlement envisaged in the Final Declaration of the conference.

6 The UK and the USSR, as co-chairmen of the Geneva conference, met in London in April and May 1956 and reaffirmed support for the political settlement foreseen at Geneva but implicitly approved postponement of its implementation, including the nationwide ejections. The co-chairman called upon all parties to* preserve the status quo and requested the International Supervisory and Control Commission (ICC) to continue supervising the Armistice. Thus no steps have been taken to bring about unification or a political settlement in Vietnam, and the partitioning of Vietnam has been tacitly accented by the Geneva conference powers for an indefinite

" pericdV time. In the meantime, the Communist regime in the north and the Diem government in the south have been developing their own institutions and preparing for an extended period of struggle for control of Vietnam.

II. NORTH VIETNAM-CURRENT SITUATION AND TRENDS

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7, The Communist Party of Vietnam (commonly called the Viet Minh) and its governmental apparatus, the "Democratic Republic of Vietnam" (DftVj continue to exercise firm and effective control over the estimated 13 million inhabitants of North Vietnam. Although critically lacking in technically trained personnel, the Communist regime possesses a large number of experienced po-

litical workers' and has made considerable progress in developing an effective administrative machine. It has strengthened its control despite severe food shortages, continued passive resistance to its internal policies, and the gradual reduction of its prospects for early domination of all Vietnam.

8. Ho Chi Minh continues to occupy a preeminent position among Vietnamese Communist leaders, despite some de-emphasis of his public role. His prestige as a nationalist leader is still a significant factor in the attitude of many people in South Vietnam and Southeast Asia toward the Vietnamese Communist regime. Power relationships at the level below Ho are not clear, but party Secretary Truong Chinh, Premier and Foreign Minister Pham Van Dong, and army corrtmandcr Vo Nguyen Giap appear to share top level responsibilities. We have no evidence of policy or personal differences among these three men or of the existence of "pro-Chinese" and "pro-Soviet** factions in the party. *

9. The regime's primary concern in the past year has been to develop more effective controls over the people and the economy and to deal with such immediate problems as irehu bilitation, malnutrition* widespread disease, famine, tightening of the party apj ratus, and the development of the armed forces. Although violence and iritimida on have been employed selectively, the Communists have so far refrained from the publicized, widespread terror employed in Corrmunist China during the consolidation perloc in 1951-1952. Strenuous efforts are still being made to rally popular support behind front groups on the basis of nationalist and unification slogans. The most important of these is The Fatherland Front which is designed not only to mobilize support in the north for immediate reconstruction tasks but also to attract support in South Vietnam for Communist efforts to unify the country*

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10. The Catholic population of approximately 759 000 appears to be the main center of passive resistance to Communist indoctrination and DRV control. The Communists appear to have recognised the special nature of the Catholic problem and, probably with an eye both to reducing opposition and impress-in* the evacuees in the south, have moved slowly to restrict church activities. At the same time, they are attempting to weaken the hold of the clergy over the communicants by various means including visits of "puppet" priests from Eastern Europe. To date the Vietnamese Catholic hierarchy appears ' to have been fa My successful in maintaining its position among file Catholic population,

11", The substantial ethnic minorities, v.'ho live outside the river deltas, have an ingrained - (Sslike for all Vietnamese and there have been some instances of armed opposition by the tribal groi of north and northwest Tonkin. To integrate Giese minorities politically and to lessen their opposition to Communist leadership, the DRV has established "autonomous administrative areas" nominally controlled by tribal dignitaries loyal to the Communists. In any event, Communist military and security forces are capable of eliminating any active resistance m the north.

Economic Policies and Courses of Action

1% The regime is moving gradually to extend its contra! over all aspects of the economy," but it hr-.s not yet attempted detailed over-all panning, the nationalization of small productive units Hid domestic trade, or the col-■ Icctivizalion of agriculture. At present, the regime is attempting to deal with immediate problems on the following priority: (a) increasing agricultural production; (b) restoring the transportation network; and (c) rehabilitating export industries, e. g., coal, cement, phosphates, and textile and other light industries. Thus far the regime has not begun to stress heavy industrial development and is concentrating a major portion of its industrial production on consumer goods.

13. The regime's major economic problem is io meet the minimum consumption needs of the population while developing a self-sup-

porting economy. Prior to 1954 the annual rice deficit of North Vietnam averaged about 200,000 metric tons. As a result of wartime damage to irrigation facilities and an unprecedented series of floods, droughts, and insect scourges, the rice deficit in each of the past two years has amounted to at least 500,000 metric tons. With shipments from South Vietnam cut to a trickle since 1954, the DRV appealed to the Eloc for relief. However, imports through April 1056, consisting of token shipments from Communist China and some 200,000 tons of Burmese rice purchased by the USSR, have fallen far short of minimum requirements. In December 1955 the DRV announced that the per capita food consumption in that year had dropped at times to as low as 500 calories per day.

14. There will probably be some improvement in the food situation in 1956-1957. The USSR has agreed to accept up to 400,000 tons of Burmese rice each year through 1959. It is likely that the Burmese will actually vShip a high percentage of this figure and that the D'KV will receive a major share of this rice. Although the spring crop in 195G will probably again fall below normal because of continued adverse weather, the extensive efforts of the regime to mobilize all segments of the population for irrigation repair, reclamation of abandoned land, cultivation of new land, and planting of subsidiary crops should lead to a gradual increase in domestic output,

15. However, North Vietnam will not achieve self-sufficiency in rice in the next few years even with optimum weather conditions. Planned investment to increase the supply of fertilizers, pumps, improved seeds, and agricultural implements appears insufficient to achieve a substantial increase in output in the near future. Moreover, the current program for redistribution of land will probably depress production.

16. Rehabilitation of modern industries has gone slowly due to a lack of raw materials, technicians, and equipment. Coal production in 1955 is estimated to have been about 700,-000 tons compared to 900,000 tons under the French, in 1953 and the pre-World War II peak of 2,600,000 tons. ■ The rate may reach

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800,000 to 1,000,000 tons in 1956, permitting an 'export of 300,000-500,000 tons. By the end of 1956 cement production may reach its former annual rate of 300,000 tons. Tfhe large textile plant at Nam Dinh returned to limited production in December 1955 but even when operating at full capacity it will provide only about half of North Vietnam's requirements and it is dependent on'imported cotton/

17. Wife Chinese Communist technical and manpower assistance, rapid progress has been made in restoring transportation and com-

.. munication facilities. The rail link from Hanoi to the Chinese border at Nam Quan has been restored and the Haiphong-Kunming line will probably be fully restored this year. This construction will link southwest China with sc$ transport at Haiphong and the main

-Chinese rail system at Nam Quan. The line from Hanoi to the 17th parallel is also being rehabilitated and it is possible that service south to Vinh will be established by the end of the year. With Chinese assistance, the DRV has also made rapid progress in rehabilitating North Vietnam's highway system. A

• bridge building program for 1955 is aimed at eliminating most of the ferries on primary roads. Rehabilitation of the Hanoi-Lai Chau route and of roads south from Hanoi toward the 17th parallel will facilitate the movement of troops and supplies to any point along the borders of Laos and South Vietnam.* Soviet assistance is making possible the improvement of port facilities at Haiphong which will further expedite the distribution of Bloc military and economic supplies.

18. The chronic deficit in the balance of payments position of the North Vietnam area has been deepened by the failure to restore agricultural and industrial production and by the abnormal requirements for foreign goods and .technical aid. The foreign exchange position has also been worsened by the break in complementary trade relations with the south. A measure of the deficit and of the critical economic situation is suggested by the magnitude of Bloc grants to the DKV. In July 1955, Communist China granted the sum of 800,-000,000 yuan (about $330,000,000 at official rates) and the USSR promised 400,000,000 rubles ($100,000,003 at official rates). Smaller

grants have been extended by several of the European Satellites. A substantial portion of the aid received has been in the form of consumer goods.

19. We believe that during the period of this estimate the DRV will continue to concentrate, with moderate success, on efforts to increase agricultural, mineral, and light industry production. The DRV has the resources to increase exports and to support a modest industrial development. However, at least for several years, it will require substantial Bloc assistance to support even a minimum standard of living and there appears little prospect for substantial forced saving to support rapid industrialization in the near future.

DRV Military Strength

20. The "Vietnam People's Army" (VPA) now has a total strength of about 268,000 men organized in 16 infantry divisions, 2 artillery divisions, 1 AAA groupment, 10 separate infantry regiments, and 5 border and coastal security regiments. As the VPA continues its evolution toward a modern force, several more divisions may be organized using existing separate regiments. Although further substantial increases in the numerical strength of the army appear unlikely, a ready pool of semitn.incd manpower exists among the 117,000 men now in regional and popular troop units. The recent announcement by the DRV of a troop reduction probably reflects the release of unfit personnel since the Armistice.

21. More extensive training was probably made possible by reduced commitments to internal security missions and reconstruction projects, and multidi visional maneuvers were reported in late 1955. We believe that about half of the major combat units are combat-ready and the remainder probably will reach that status during 1956. Even at its present level of training, the VPA is capable Of defeating the total military forces of South Vietnam, Cambodia, and Laos. " - *

22. There were no significant changes in the dispositions of VPA units during the past

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year and the largest concentration remains in the Delta region, approximately 300 miles from the 17th parallel. However, clandestine guerrilla operations, foetading infiltration of small units, could be conducted against South Vietnam and Laos without major troop movements. „ .

23, The Vietnamese* Communists have' no combat air capabilities at the present time, but some air training probably is underway in Communist China. It is possible that the DRV will have one or two regiments of piston fighters operational in 1957. There are 26 former French air fields in North Vietnam, five of which could be used with little or no development to support sustained operations by Communist Jet fighters, and one of which could probably support sustained jet light bomber operations. 1 DRV has no separate naval organization and coastal defense depends on small armed craft and ground

DRV External Relations ana 1 Policies

• 24. Relations loith the Mac. We believe that the DRV is firmly committed to the policies of the Sino-Soviet Bloc, even to the extent of subordinating or postponing the pursuit of its local or regional objectives in the interest of over-all Bloc tactics and strategy. The attitude of DKV leadership follows from its Communist world .outlook and from the fact that DRV objectives can only be realized with Sino-Sovici Bloc support.

25. Despite its close ties with and dependence on Peiping and Moscow, the DRV on occasion acts in less conform!; :y with the. Bloc than the European Satellites. A number of considerations account for tMs special status. The Vietnamese Communists fought their own fi«ht against French colonialism. The DRV possesses an army and security organization which was developed >r to 1950 independently of Sino-Soviet m rial assistance. The appearance of relative independence created by some DRV actions may, nevertheless, serve to further Bloc interests elsewhere in Southeast Asia.

year, Bloc economic and

expectations. Bloc deliveries of rice have been far below levels necessary to prevent widespread debility in North Vietnam. Mi-koyan's visit to Hanoi in April 1958, the first by a major Soviet official, was made a great public occasion and DRV propaganda suggested some expectation that new aid or economic agreements might result. No new Soviet-DRV arrangements were announced; however, and in fact Mikoyan departed without issuance of the usual joint communique. J The USSR also failed to press DRV demands [ either for the "strict implementation" of the Geneva Agreements with respect to north-south consultations and elections, or for reconvening the Geneva conference. The Soviet position, as it developed at the April-May Geneva co-chairmen talks, accepts main 1 , nance of the status quo for the time being. Although the Chinese Communists have been more forthright in supporting the stated DRV position, the Soviet Union has shown no disposition to support the DRV's basic objective of securing control of all Vietnam Vt the risk of jeopardizing Soviet policy objectives in other areas or the Bloc's campaign of emphasising "friendship" and reducin

ig tensions.

26. Over the p

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diplomatic support m y not have met DRV

27. The rather aloof position of the USS which increases the dependence of the Vietnamese Communists on Communist China, may be disappointing to the DRV, ; ne element of the traditional Vietnamese distrust of the Chinese probably survives among Vietnamese Communist leaders, despite the bond of Marxism, and the DRV may well wish that it could counter Chinese influer 2 with closer Soviet ties. ,

28. Substantial differences over policy toward South Vietnam, and possibly 1 ds, may 6 velop between the DRV and the USSR and Communist China if prospects for an early extension of Communist control to South Vietnam continue to decline. Even in this .event, however, and despite the DRV's potential capacity for independent action, we believe that other considerations would prevail to cause the DRV to continue its loyal adherence to the Bloc.

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29. Policies Toward South Vietnam. Lack-in** lull Bloc support for its reunification demands and recognizing that the July 1956 deadline for elections would not 'be met, the DRV is now adjusting its policies for the longer pull. The regime's public position that the Geneva provisions must be fulfilled and that nationwide elections must be held remains unchanged, - However,-the DRV is now playing: down the demand for early reconvening of the Geneva conference and increasing-its demands for direct north-south consultations. The DRV has accepted the position taken by the Soviet Union at the London talks that the ICC and Joint Armistice Commission should continue their functions despite the dissolution of the French High Command. The DRV has also enlarged the scope of its diplomatic activity to enhance its international prestige and position and to secure the broadest possible foreign support for eventual implementation of the Geneva Agreements.

30. At the same time, the DRV has maintained its network of political and paramilitary cadres in the south. It has continued "its efforts to penetrate the government of South Vietnam and probably is maintaining contact with non-Communist but anti-Diem Vietnamese, chiefly those now in exile, who favor conciliation with the north. Through use of nationalist themes and front organizations, it is attempting Jo retain popular following in the south.' Ninety-five thousand

, men were evacuated from the south in the first few months following the Armistice. The* DRV probably views this group as a possible Instrument for subversive activity in South Vielnam and some may have been retrained,

i reindoctrinated, and perhaps even reinfil-

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Zh'Policies Toward Laos and Cambodia. The Communist rebel movement in Laos, the Pathet Lao, is completely dependent on DRV support and assistance to maintain its position in the northern provinces. Although the DRV continues to support the Pafchet Lao, it has begun to soften its line toward the Royal Lao government. In place of its earlier criticism of the Lao government, the DRV now praises the Lao government's professed

adherence to the "five principles of coexistence," encourages Laos to adopt a neutral foreign policy and to enter into direct consultations with the Pathet Lao to resolve their differences,

32, DRV policy toward Cambodia encourages 1 neutralism and the establishment of wider contacts between the Cambodian government and the Communist world. The Hanoi radio has virtually eliminated its previously bitter condemnation of the Cambodian government and is now extravagant in its praise of Cambodian foreign policy and its "resistance" to alleged US "plots" to undermine Cambodian independence. Future DRV policies with respect to Laos and Cambodia will probably reflect the guidance of Moscow and Peiping.

33. Policies Toioard Other Countries. In its relations with other states in Asia, the DRV has attempted to increase support for its position on unification, to further the general Bloc peace campaign, and to obtain diplomatic contacts and recognition-. At present, North Vietnam is recognized by all Bloc countries, but no non-Bloc country has extended full diplomatic recognition. India and Indonesia have exchanged consular representatives with both North and South Vietnam and Burma has permitted the DRV to maintain an Information O.Tice in Rangoon. The DRV has taken special pains to woo the Indian delegates to the ICC.

34, The DRV has severely curtailed remaining French cultural activities in North Vietnam and the much publicized commercial arrangements have been too restrictive to hold or attract any significant economic activity by the French. However, the DRV has won French agreement to the establishment of a commercial and cultural mission in Paris. Its presence will complicate French relations with Diem and facilitate the maintenance of DRV influence among Vietnamese resident in France.

III. SOUTH VIETNAM-CURRENT SITUATION AND TRENDS

Political

35. During the past year President Ngo Dinh Dicrn's government has greatly strengthened

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its internal political position in South Vietnam, a country with an estimated population of 12 million. ' The national referendum in October 1955 established the legitimacy of the Government of Vietnam (GVN), and completed the elimination of Bao Dai as Chief of State and as a major political factor in Smith Vietnam. By the end of March 1956, Diem reduced. the 'Cao Dai' and Hoa Kao groups to political impotence by a series cf moves which culminated to the elimination" of the Cao Dai army as an independent military force and the* capture, trial, and execution of Ba Cut, the last important active Hoa Hao resistance, leader.

36. On'4 March 1956, in South Vietnam's first national elections, 80 percent of the eligible voters participated to electing 123 deputies from 405 candidates for the Constituent Assembly. The returns gave pro-Diem forces a substantial majority. Although nearly one-third of the government-favored candidates were defeated, no openly anti-Diem deputy was elected. This was due in part to govern-mint manipulation of the election campaign and in part to a boycott of the elections by most of the opposition parties. Despite efforts by the Vietnamese Communists and other resistance groups to disrupt and sabotage the voting, the elections generally were calm and orderly. The Constituent Assembly will sit for a four-year term as the first National Assembly.

37. The deputies in the Constituent Assembly; which convened 15 March, are divided among political parties as follows: National Revolutionary Movement (NRM), 61; Revolutionary Workers Party (EWP), 15; Citizens Rally (CR), 26; Movement of Struggle for Freedom (MSF), 6; and Independents (including one ■ Dai Viet), 15. The NRM is the Diem government's primary source of organized political power. Although Information Minister Tran Chanh Thanh is its titular head, a large part of the party is controlled by Diem's brother, Ngo Dinh Can, who controls Central Vietnam. The KWP> also a government party, is led by Diem's brother, Ngo Dinh Nhu. While the CR, MSF, and most Independents now support Diem, they contain some members

who have reservations about some of Diem's methods and are potential centers of parliamentary opposition.

38. Diem will probably maintain his dominant political position in South Vietnam dur-. tog the period of this estimate. The constitution, which has been drafted under Diem's supervision, gives the President wide powers including the right to appoint the first Vice President and to suspend civil rights during the life of the first Assembly. Diem's personal prestige will probably be enhanced by improvement in internal security and by continued frustration of Vietnamese Communist objectives. However, he will continue to face serious problems in attracting additional active support for his government, in part because of his reliance on a small circle of relatives and trusted friends. While Diem's control of the Assembly during the period of this estimate will probably be adequate to insure adoption of any important measure he wishes enacted, his inclination to hold a tight rein on the legislature may accelerate the development of an active opposition.

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39. The appointment of a Vice President by Diem, now 55, will remove much uncertainty over presidential successorship. Nevertheless, Diem's death, whether by natural causes or assassination, could result to serious factional disputes in the government and among the major political parties which could strain the new governmental institutions. Ngo Dinh Nhu and Tran Chanh Thanh, key figures in the RWP and NRM, have a great deal of political power and would play important roles in any redistribution of power, but neither of these men-has a wide popular following. To some government critics and government supporters Thanh symbolizes the more regressive features of the Diem regime. At the moment, Secretary to the President and Acting Minister of the Interior Nguyen Him Chau appears to enjoy Diem's .favor and has grown rapidly to stature a«d power, but he has no organized political backing apart from his support by Diem and Nhu. Ngo Dinh Can would probably play an important behind-the-scenes role in any redistribution of power, but his lack of national stature and poor

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health would almost certainly rule him out ? s"a leading contender for leadership. Tran Vfcn lam, leader of the CR, is ambitious and enjoys considerable popularity in the-southern provinces, but his political position is weals. Although the army high command has been trying to keep the army out of politics the prestige and strength of the army v.miM.almost certainlyj>Iay a major and possibly decisive role in the redistribution of political power. The numerous anti-Diem nationalists in South Vietnam and France would probably attempt to re-enter the picture and their -maneuvers\vould add to the confusion. However, many of these men are discredited because of their past relations with Bao Dai, the French, or the Communists, and it is doubtful that any of them could muster sufficient backing to gain control.

Economic

40. South Vietnam is normally an agricultural surplus area, exporting rice and rubbei. During World War II and the civil war periods large portions of cultivated land were abandoned and the transportation and irrigation systems deteriorated. Current rice production is less than two-thirds the pre-Workl War II levels, and exports in 1955 were only about 100,000 tons as compared with the prewar annual total of more than one million tons. Current rubber output of 54,000 tons exceeds the prewar level by about 10,000 tons and rubber has replaced rice as South Vietnam's leading foreign exchange earner. In 1955 hi^h" market prices raised the value of South Vietnam's rubber exports almost 80 percent above 1954 and to more than, half the v^hie of all exports.

41. Because of the decline in rice exports and the large imports of consumer goods and, to a lesser extent, capital goccls for rehabilitation, South Vietnam is running a large deficit in its balance of payments. In 1954 exports covered 17 percent of imports while in 1955, even with unusually high rubber prices, exports covered only 25 percent of imports. At present, US aid is filling the gap and is an important factor in the relatively high standards of living prevalent in much of South

Vietnam. For the fiscal years 1955 and 1955 the planned level of US economic and military aid for South Vietnam totaled approximately $520 million (not including the value of US equipment already in Vietnam and transferred* to the GVN), At present the US is financing about 90 percent of the GVN military budget, 65 percent of the combined military-civilian budget, and 75 percent of all South Vietnam's imports.

42. The withdrawal of French military forces, the termination of France's preferential trade status, and the loosening of French-Vietnamese political ties have combined to curtail the scale of French industrial and commercial activity in South Vietnam. French business interests are withdrawing about as rapidly as Vietnamese restrictions on currency transfers permit. South Vietnam's import trade is moving away from France toward Japan and the US. In 1953 and 1954, France supplied about 80 percent of South Vietnam's imports. In 1955 the figure dropped to 50 percent and the downward trend is continuing. In the same two-year period, Japan's share of South Vietnam's imports has increased from three to 12 percent.

43. The GVN has not yet effectively come to grips with its economic problems. President Diem has stated that 195G will be a year of economic consolidation, but through the first six months of the year, GVN attention continued to be focused on security and political issues. Only the most pi ing economic problems have received serious government attention and those have generally been dealt with by ad hoe methods or authoritarian decrees. For example, the government has attempted to cope with a serious threat of inflation by a series of decrees controlling prices and inventories for many items and establishing high fines and even the death penally for attempts to corner the market. These n ls-urcs have contributed little to preventing inflation and have aroused the, resentment of the Important Chinese community. Inflationary pressures have been held in check primarily because the government has been able, with US aid, to maintain a fairly high level of imports of consumer goods.

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44 progress has been slow in the resettlement of refugees and in the implementation of other measures to increase agricultural production. The limited land reform program inaugurated in 1S53 is unattractive to the peasant in comparison with extravagant Communist promises. Landlords arc objecting to the low rents provided for in the program and their opposition plus the general lack of-official determination and administrative competence has led to the stagnation of land reform,

+

45. Nevertheless, the GVN has made some progress in building the organizational structure necessary to replace institutions of the French colonial period. The GVN has created an independent national bank, a foreign exchange office, an investment fund, a government-owned commercial bank, and an independent currency* President Diem has proposed establishment of a High Economic Council to guide the country's economic development and he has made informal reference to the possibility of a four or live year plan for economic.rehabilitation and development. In

addition, government officials now administer "a substantial import program and the application of a substantial US foreign aid program. Although these new institutions and economic activities provide an essential beginning for further economic progress, they are not yet fully operative or elective.

4G. Though South Vietnam cannot become economically self-supporting to ] g as it must maintain armed forces of the present-size, its economic position could be substantially improved by economic and fiscal re-

" forms. ' However, during the period of this estimate there is little prospect for mark* development of South Vietnam's economy o for a significant reduction in its balance of trade and budget deficits.. Inflationary pressures are almost certain to continue. How-

' ever, the food supply, a critical political factor, is likely to be more than adequate for domestic needs. Provided security conditions continue to improve, the GVN will probably give economic problems increased attention during the coming year and will probably be able to make some progress toward solution of several specific economic pro!;!cms. A pro-

gram to resettle 100,000 refugees on abandoned land has been developed and some 40,000 of these have already been relocated. This project will probably be followed by further resettlement projects which are likely to reduce substantially the refugee problem during the estimate period. Additional land will probably be brought under cultivation. Some improvement is likely in tax collection and in handling the problem of French dlsinvest-ment. By mid-1957, economic development planning will probably be wall advanced, but concrete results are unlikely within the period.

Military

47, Current strength of the Vietnamese National Army (VNA) is approximately 145,000 troops. The VNA is organised into 4 field infantry divisions (8,500), 6 light infantry divisions (5,225), 1 airborne groupment ..(4,000), 13 territorial regiments, 5 separate sect regiments, and 3 5 assorted combat battalions. Although some progress has been made during the past year, the e:; tensive plans for training and reorganizing the VNA have fallen behind schedule because most major units have been dispersed with many of them engaged in security operations. Principal VNA weaknesses are an inadequate logistical and technical support system, an ineffective chain of command, and inexperience at the command and staff levels. At least six months of uninterrupted training' will be necessary to bring the VNA to minimum operational effectiveness at division level. VNA loyalty to President Diem and ( his policies seems assured. The army's ssAf-eonfi&eaiee and morale are generally good,

48. When the French High Command was inactivated on 23 April 1056, all previous French-Vietnamese military agj jments were terminated. All French combat units have been withdrawn from Vietnam. After 1 July, only a few French army personnel remained in South Vietnam, in addition to a 1,000-man French military support group for the* ICC. The Vietnamese and the French are now negotiating concerning French support for the ICC and the French role in braining the Vietnamese forces, particularly air and naval

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forces. The primary US-directed effort has bsen the training of a Vietnamese instructor corps and the development of training 'programs throughout the Vietnamese army, US personnel are detailed to VNA training centers, to units at division level, and to major territorial commands to supervise progress and implementation of the training program. The US" military] group In -South Vietnam has been held to Its prc-Gcneva size despite, the near complete withdrawal of the French mission, which totaled about 2,500 personnel prior to the Armistice, However, a 350-man US Temporary Equipment Recovery Mission (TERM)* is being established in South Viet* nam. ■

e

* <D. South Vietnam's embryonic air fore '(VNAF) has grown only slightly during the

, past year. Its current strength of 3,338 includes 103 trained officer and enlisted pilots and 100 pilot trainees. VNAF aircraft inven-

. tory is 143 planes, mostly trainer/liaison and transport types. Although the air force Is receiving F8F piston fighter-type planes, it is unable to maintain even limited flight operations because of a lacl: of qualified maintenance personnel. The VNAF has a limited capability to provide air support to ground troops, artillery' observation, air evacuation, liaison, and air lift for paratrcop operations. No significant increase in VNAF capabilities .

. appears likely during the next two to three

. years.

<

50. South Vietnam's navy is under operational control of the Chief of Staff of the VNA and under the admin .strati vc command of a senior naval officer." Personnel strength is 142 ofa-' cers and 1,755 men, with a Marine Corps of 44 officers and 1,775 men. The forces afloat, which have been an anted over the past year by additions from the withdrawing French forces, include 3 submarine chasers (PC), 3 coastal.minesweepers (J£SC (O)), 1C am-phfr.-us vessels (2 LSM, 2 LSSL, 5 LSIL, 5 LCU), and 170. smaller amphibious and patrol craft. The Vietnamese navy has lim-. ited effectiveness, but it is capable of undertaking river patrol and minor coastal and amphibious operations. Capabilities should improve substantially in the near future be-

cause of continued US aid and intensive training programs which include technical training m the US arid France.

51. We believe South Vietnam's military and •security forces are capable of maintaining

the government in power against any potential armed opposition now located^ south of the 17th parallel, fin the event of large scale, concerted guerrilla'warfare supported by infiltration of men and supplies from the north, relatively large areas of rural Vietnam probably would be lost to government control/; In the event of full scale invasion, the Vietnamese forces at present probably could not delay for more than 60 days a Vietnamese Communist advance to the Ban Me Thout-Nha Trang line. If the trend toward Improved internal security and increased effectiveness of the Civil Guard continues, it will be possible to step up training and reorganization of the VISTA, thereby improving its capabilities during the period of this estimate. However, by mid-1.957 Vietnamese forces will still be incapable "of delaying for more than SO days an advance by DRV forces beyond the Ban Me Thoiit-Nha" Trang line.

Interna! Security

52. The internal security situation in South Vietnam has improved substantially during the past year." The sects are no longer a major security problem for the GVN. Host of

'the important non-Communist sect leaders of a year ago have either Sect the country, been killed or captured, lost control of their forces, or rallied to the government. Remaining sect armed bands are scattered and disc d

and probably total no more than 2,060, Although various bandit groups will probably continue to cause local disturbances, it is likely that organized non-Conununist resistance will virtually disappear during the period of this estimate.

53. With the sect problem basically under control, the Communist underground represents the only serious threat to internal security in South Vietnam. Reports on Communist armed strength in the south over the past year have ranged from 5^00 to 10,000. Our best, estimate of current si h is £,000 to

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■-

*

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10,000 with approximately 5^000 organized in skeletal company and battalion sized units which could be expanded through , # rccruit-picnt. Thes6 armed forces are generally scattered through the mountains paralleling the Annam coast and the remote swampy regions of Cochin-China. They are capable of harassing actions against VNA outposts and of widc-

- spread intimidation,'assassination, sabotage, and terrorism, especially in rural areas. They could disrupt north-south traffic throughout Central Vietnam and interfere seriously with provincial and local administration. Eow-

! ever, any sustained guerrilla operations would

I require a flow of reinforcements and supply

1 from the north.

54. Tte Communists have an unknown number of political cadres fa the south engaged in

"subversive and propaganda activities. Although Communist cadres probably exercise effective control over some remote communities where the GVN has not yet attempted to establish its authority, and have some influence in villages through much of South Vietnam, over-all Vietnamese Communist political

* influence in the south appears to have diminished during thejast year. However, if the 'Communists^ecidcUo exercise their capability for armed intimidation and terror they could

S ouickly reassert political control or influence,

' at least in some rural areas where GVN authority is tenuous. £?J .

55. During the past year the Communists in South Vietnam have remained generally quiescent. .They have passed by a number.of opportunities .to. embarrass the Diem regime. Although some cadres and supplies are being infiltrated across the 17th parallel, the DRV

! probably has not sent any large scale rein-"forcement or supply to the south. Communist activity in the south appears to concentrate on protecting vital bases and supply caches, developing clandestine paramilitary organizations, and implementing a broad program of infiltration and subversion. While

' seeking to maintain intact as much of their armed strength as possible, their main activity seems to be an effort to weaken the Diem gov-' eminent by subversive and political tactics.; Communist directives indicate that penetration and subversion of the GVN military and

security forces is a major objective.' Although there is little specific evidence, they probably have penetrated lower echelons of the VNA, especially the integrated sect forces, and probably hold positions of influence in some provincial governments and village councils. Local Communist groups probably gave some assistance to the Cao Dai and Hoa Kao forces opposing the government. Since the collapse of sect armed resistance it is possible that the Communists are seeking to take over the remnants of the sect forces.

56; The GVN has organized a Civil Guard to relieve the VNA of many static internal security duties. Current strength of the Civil Guard is approximately 48,000 men organized in lightly-armed mobile companies. Its mission is to maintain law and order, collect intelligence, and conduct countersubversion operations at the provincial level in areas pacified by the army. Although considerable progress and refinement in its training and organization will be necessary before the Civil Guard can fully discharge its responsibilities, it has shown considerable potential as an instrument for maintaining internal security. A 60,000-man village Self-Defense Corps (Dan Ve Doan) is being organized to provide security at the local level.

Foreign Relations

* 57, GVN foreign policy objectives are to win recognition as the legitimate government of all Vietnam." to obtain maximum foreign military and economic aid and guarantees of foreign assistance in the event of Communist aggression, and to develop foreign support for its position with respect to the Geneva Agreements. Forty-one nations have recognized the GVN. In addition, India and Indonesia maintain consular relations with the GVN,

58. President Diem consistently has maintained that South Vietnam is not bound by the 1954 Geneva Accords and has no legal responsibility for their implementation. He has refused to deal directly with the*DRV on any issue and has been steadfast in his rejection of all-Vietnam elections until "democratic processes can be assured in North Vietnam." He believes that any consultations or implied recognition of the DRV would have

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■ adverse political effects in the south and ■could lend to increased internal and international pressure for reunification of -Viet-

■ nam under a coalition government with the Communists.

•

59. His refusal to permit nationwide elections and to assume responsibilities under the Geneva Accords raised the possibility of a withdrawal of the ICC following the deactivation of the French High Command in April. To deal with this situation, representatives of the Geneva co-chairmen (the UK and the USSR) met in London during April and May 1958. The USSR failed to press DRV demands that the co-chairmen reopen the Geneva conference. Instead, the co-chairmen final*? agreed upon identical letters to the DRV "and GVN requesting them to prevent any violation of military clauses of the Geneva Accords, to insure implementation of the political terms, to submit at the earliest possible time a convenient deadline for direct consultations and for holding 'all-Vietnam elections, and to give every assistance to the ICC. The co-chairmen requested the ICC to

■ continue supervising the Armistice. They requested the French government to continue its^ood offices in support of the ICC, to reach agreement with the GVN to facilitate the task of the ICC and the Joint Armistice Commission (French-DRV), and to preserve the status quo until such new arrangements could be put

into effect.

60. Desolto his past refusals to assume responsibilities under the Geneva Accords, in his response to the co-chairmen's message Diem agreed to respect the Armistice and to pro-vfde security for ICC members. He recognizes the deterrent value inherent in the presence of the ICC, and appears willing to take action necessary to continue its function but continues to avoid the acceptance of any legal obligation under the Geneva Accords.

Gl. Franco-Vietnamese relations continue to reflect considerable ill-will and distrust on both sides. Recent causes of friction include disagreements concerning the future status and role of French military training missions, residual military base rights in South Vietnam and the equivocal French attitude to-

ward the Communist regime in the north. The French now exercise little influence in Vietnamese affairs and there is little prospect for any improvement in relations in the near future. '

62, South Vietnam-US relations have remained close and friendly during the past year. There have bsen few evidences of Vietnamese resentment of increasing US influence and activity in South Vietnam despite continual efforts by the Communists and some local French to stir up dissatisfaction on that score. The GVN would like the US to rai:: the mutually agreed ceiling on VNA force* levels and desires greater autonomy in administering the foreign aid program. Diem* would also like the US to exercise maximum political pressure, especially on the UK, India, and France, to enable the GVN to avoid any responsibility for the Geneva Accords.

63. Relations between South Vietnam and Cambodia have been strained by activities of resistance groups in border areas" by treatment of minority groups, by boundary disputes, and most seriously by disagreements relating to trade arrangements. A trade stoppage early in 1056 was removed through informal mediation by the US, and by the terms of settlement official representatives have been exchanged for the first time. The basic causes of friction remain, howevc Vietnam does not desire full diplomatic relations with Cambodia because it fears such action would lead to Cambodian recognition of the DRV as well. There are no pressing prob is in Lao-Vietnamese relations and South Vietnam's re-

. lations with the Philippines and Thailand are generally good.

IV. THE OUTLOOK IN VIETNAM

Probable Communist Courses jf Action Toward South Vietnam

164, The DRV probably estimates that its lehanc.es for securing control of South Viet-nam by,means short of open attack or large scale guerrilla action supported from the north will gradually diminish with the passage of time^J. As indicated by Soviet and Chinese Communist performance in the past

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several months, the DRV probably cannot expect strong support from the Bloc for the "strict implementation" of the Geneva Agreements, The lack of strong Bloc pressure

' strengthens international acceptance of the status quo in Vietnam and increases confidence in the future in-South Vietnam. Al-• though the DRV may still believe that it could obtain control* of all Vietnam through ICC supervised nationwide elections, Vietnamese Communist leaders are probably increasingly doubtful on this point because of

' - their own internal difficulties and the growing nationalist stature of Diem. ["The DRV ■ probably ate© believes that its covert..assets

..! in South Vietnam will gradually decline if

I) the Diem [ rnment is permitted,to concentrate on internal security and economic prob-j lems free of external harassment.'?

C5. Despite the declining prospects for the "peaceful" take-over of South Vietnam, we believe that the USSR and Communist China will almos!" certainly continue unwilling to support open DRV military action against South,Vietnam during the period of this estimate, They are probably unwilling to risk the chance of US or SEATO intervention which would make it difficult to limit the conflict to Vietnam, and probably believe that overt DRV military action would seriously undercut the worldwide effort of the Bloc to. win friends and supporters. Although the DRV retains the capability to launch an independ- ■ ent military action against South Vietnam, the chances of such action in the absence of assured Bloc ' upport appear to be extremely

small.- •*...■

» •

/65. The only remaining course of action holding out some promise for the early achievement of Communist control in South Vietnam * ■ appears to be the development of large scale guerrilla warfare in the south. In recent weeks a number of reports from sources of untested reliability have indicated that the Communists mAy have started preparations in both Smith Vietnam and in the north to begin guerrilla action. DRV allegations of Vietnamese violations of the demilitarized zone along the 17th parallel and Communist claims of US-Diem plans to violate the Arsnis-

■

tice could be propaganda cover for the initiation of guerrilla action against the south.

■

67. However, the possible indications of armed action appear inconsistent with the DRV's insistence on the continued functioning of the ICC — which is in a position to make at least limited observations of DRV activities. More-. over, guerrilla action in South Vietnam, if it were to be sustained and not to result simply -in the identification and gradual elimination of Communist cadres, would., require large scale support from the north. - This would in-volve some risk of detection by the ICC and of interventionJjy. theUS.and possibly SEATO. It would also tend to prejudice current Communist maneuvers elsewhere in Asia. For these reasons, we believe that the DRV will refrain from instituting large scale guerrilla action within South Vietnam during the period of this estimate. Communist capabilities for guerrilla warfare in South Vietnam will exist for some time, however, and the chances of their being employed jvould probably increase in the event of any substantial deterioration in the domestic situation in South Vietnam — such as might conceivably occur on the death of Diem. The chances of Communist guerrilla warfare would also be increased by deterioration of the international aspects of the situation, such as a withdrawal of the ICC under circumstances which would permit the Communists to place the blame for this event on the CVN.

*

68. The DRV will continue to seek maximum Bloc support for its objectives and will seek, within the limits of Bloc strategy, to liar ass and undermine the government in South Vietnam. It will continue to seek direct contar with South Vietnam, offering economic and cultural exchanges while castigating Diem for

tn

.t-;.

blocking

unification. It will continue efforts to penetrate the government "of'South Vietnam and to improve its covert organization throughout the area. It may attempt to increase pressures for a reconvening of the Geneva conference and to unsettle the Diem government by fabricating or provoking incidents along the demarcation line and by demonstrations of armed strength within South Vietnam.

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Trends in South Vietnam

•69 Barring a major Communist effort to disrupt the Diem regime by renewal,of* large i scale guerrilla operations, the over-all prospects for improved security of South Vietnam are good. The VNA, as its training progresses and^as more units are released from static security duties, probably will be able to pacify and extend government authority into.,many of present Communist influence./ Dicm's

areas

> !success in by-passing the July 1956 election Wdate without evoking large scale Communist military reaction will reassure many Vietnamese and encourage them to cooperate with GVN programs to expose and root out Com-j munists. Continued improvement in internal • security will depend in some measure on the government's ability to deal with economic 'and social.problems and on the effectiveness 'of the administrative apparatus. ■

70. If the Communists were to undertake large scale guerrilla action 'in South Vietnam, they probably would not toe able to develop widespread popular support", especially if the VNA were to register some early military suc-

icess. The GVN is being increasingly accepted lias a nationalist alternative to Communist i. leadership. Public confidence in the GVN, combined with general war-weariness, may have already reached the point where any effort to upset the government by force \Vpuld lead to a strong popular reaction against the

guerrillas. [

. ... *

71. The trend toward increased political stability in South Vietnam will probably continue during the period of this estimate and President Diem Will probably continue to exercise effective political control, f" The trend toward

: authoritarian rule through the political par-: ties led by Diem's relatives and small circle of trusted associates will probably continue. Isolation and neutralization of government crit-'

ad

ics and men disliked or distrusted by Diem ; will also continue. Diem and his associates ' are likely to exert strong pressures against any opposition in the Assembly. Thus it is J not likely that Diem or his government Willi

•

meet any serious opposition in the National Assembly during the period of this estimate; however, over a longer period the accumulation of grievances among various groups and individuals may lead to development of a national opposition movement./ The major economic problems will undoubtedly continue and over the longer run may handicap South Vietnam in competition with the Communist north, but economic conditions are unlikely to affect political stability during the period of this estimate.

72. Despite the moderately favorable outlook projected for South Vietnam, the situation contains many elements of instability, and progress will continue to depend on firm US "support. A number of contingent developments could create new tensions*among the foreign powers concerned as well as between the GVN and the DRV. For example, the steps which Diem is willing to take toward facilitating the operations of the ICC may not be adequate to satisfy India whose representative serves as chairman of the Commission. Should the Commission withdraw, DRV agitation might well be intensified and international Communist pressures on the diplomatic level would probably increase. The UK might become less firm in its support of Diem's position. Weakening of international support for Diem, a marked increase in Bloc support for the DRV, or a substantial increase in Communist activity within South V tnam would probably weaken the government's confidence in its position, cause some loss of public support, and lead to renewed efforts by opponents of the regime in the direction oi .^conciliation with the north.

SECRET

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(

^Tjte'nfcer 5, 1956

TOP SECRET

.?.» Terences:

A.

B. C.

D.

E. F» G.

H.

I.

J. K.

NOTE BY TKS EXECUTIVE SECRETARY

to the NATIONAL SECURITY COUNCIL

on U.S. POLICY IK MAINLAND SOUTESAST ASIA

N3C 5U05

"NSC Actions Nos. 1^26-b and 1527-c

NSC C M9/ C j } paragraph 5-d

NSC 5^29/5j Annex A

NSC Action No. IH15-C

NSC Action No, 1571

Memo for N3C from Executive Secretary t subject: "U.

Policy in the Event of a Renewal of Aggression in

Vietnam"; dated September %6 t 1955 Progress Report, dated July 11, 1955, "by OCB on NSC

5*tf)5 and Portions of NSC 5^29/5 NSC 5^10 NSC 5612 NSC Action No* 1599

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The President has this date approved trie statement of policy in K3C 5ol2, as t ided and adopted by the Council and enclosed herewith as NSC $612/1$ directs its implementation "by all appropriate Executive departments and agencies of the U. 3. Government; and designates the Operations Coordinrt-ing Board as the coordinating agency.

■

The enclosed statement of policy, as adopted and approved, supersedes NSC 5^05 and Annex A of H30 5^9/5*

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JAMES 3* LAY, JR. Executive Secretary

The Secretary of the Treasury

She Attorney General

The Secretary of Commerce - ,

The Special Assistant to the President for Disarnanent

The Director, Bureau of the Budget

The Chalncan-> Joint Chiefs of Staff

The Director of Central Intelligence

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1082

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

i

STATEMENT OF POLICY

TOP SECRET

rn

on

U, S, POLICY IN MAINLAND SOUTHEAST ASIA*

I

■ > .

I. -GENERAL CONSIDERATIONS

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1* General , Since mainland Southeast Asia does not represent a unified area^ courses of action must generally bo determined xn the light of widely varying country situations. However, basic objectives and main directions of U. S, policy can and should bo established on a regional basis.

2. Conseque nces of Co mmuni st Domination. The national security of the United States would bo endangered by Communist domination of mainland Southeast Asia, whether achieved by overt aggressions subversion,, or a political and economic offensive.

a. The loss to Communist control of any single free country would encourage tendencies toward accommodation by

the rest, . - -

* a

'b. Tie loss of the entire area would have a seriously adverse impact on the U, S, position elsewhere In the Par East^ have severe economic consequences for many nations of the free world, add significant resources to the Communist bloc in rice,, rubber, tin and other minerals, and could result in severe economic and" political pros? sures on Japan and India for,accommodation to the Communist ibloc* Tee loss of Southeast Asia mainland could thus have farreachlng consequences seriously adverse to'U. S, security interests-.

3

The Communist Throat

a.

0vert Aggrossion > Although Communist policy now

emphasizes non-military methods, the danger of overt aggression will remain inherent so long as Communist China and North Viet Nam continue a basically hostile policy supported by substantial military forces. There is .only a cease-fire in Viet Nam and sporadic hostilities continue in Laos. Tee Viet Mirih have continued to improve

"Mainland Southeast Asia 1 * consists

For purposes o± tois paper of Burma, Cambodia, Laos, Thailand, Viet firm, Malaya and Singapore. In addition, there is .attached a supplementary statement of policy on the special situation in North Viet Nam. "

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their combat capabilities since the* Geneva Conference : of 1S5 1 I-

£• Subversion . In most countries of Southeast Asia a threat also arises fron the existence of extensive local Communist capabilities for all types .of subversive activities, ranging up to armed insurrection. Additionally, the largo overseas Chinese communities in South-oast Asia offer a fertile field for subversion. The weal; internal security systems of the Southeast Asian states nicilce ,_them highly vulnerable to such activities.

5L • Communist Political and Economic Of f ensive . At present overt aggression and militant subversion art.; . less likely than an intensified campaign of Communist political, economic Slid cultural penetration in the area, The political instability, economic backwardness, export problemsj and extreme nationalism of these countries provide many opportunities for Communist exploitation by trade and econot&ic assistance, conventional political and diplomatic activity, and extensive infiltration, This offensive now constitutes a threat to U. S. interests mora subtle and more difficult to cope with than other threats.

4. Unit ed States Hole . The. United States is likely to remain the only major outside source of power to counteract •the Russian-Chinese CoLimunist thrust mtp Southeast Asia. Thusj the retention of this area in the free world will continue to depend on the extent and effectiveness of U. S. support as vie] 1 as on the local efforts of the countries themselves.

* a. Political. Tne underlying purpose of U. S.

assistance in the area is to help the non-Covrimunist

countries, develop more effective political organizations,

strengthen their internal administration and enlist

! greater allegiance in both urban and rural districts. In

part this purpose will be served by programs for military and economic aid dealt with below-. In part it will require an intensification of present programs for training competent Asian nanagorial and technical personnel. And in part nevr approaches, both governmental • ■ and private, will be needed. These should not con-

1 ' contrate exclusively at the national level, but should

include activities designed to strengthen and vitalize indigenous traditions and institutions and to have an i.roact on village life, rural socioty, and educational systems. . - •

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b. Military. Because those countries do not have

the capability of creating armed forces which could effectively resist largo-scale external aggression:., the United States will be required to provide a basic shield against Communist aggression. For the foreseeable future local will to resist aggression will depend on a :conviction in Southeast Asia that the United States will "continue its support and v/ill maintain striking forces adequate*to'counter aggression in Southeast Asia with the capabilities described in NSC 5e02/l (paragraphs 11, 15 and lo). The combination of such U. S. forces and local will to resist would constitute the best deterrent against aggression. Should the deterrent fail, this combination would also provide the most effective insurance that, in conjunction with indigenous and allied forces, the United States could suppress aggression in the area quickly and in a manner and on a

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calculated to avoid the hostilities broadening into general war.

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c. Economic and Technical, The insistence, through-

out most of the area ^ on <jconCmic development provides .the strongest lever for the exertion of influence by the free world or by the Cqrmnunist bloc, Without increased external help fro a some source, most of the governments .of the area will be unable, even with adequate indigenous effort, to nanage the political demand for rapid betterment in the cDhditiotis of life and "provide for sound econoraic development,' Failure to obtain such assistance from the free world will tend'to drive these countries toward economic dependence* on the Coxmnuuist bloc. The general preference in" Southeast Asia for Western technical and economic assistance gives the United States and the free world an opoortunit - to obtain primacy over Communist efforts in key economic sectors. The outcome may, however, be strongly influenced by the success with which, the free world can cope with Communist efforts to exploit the existence of Southeast Asian export problems, particularly those involving rice. In the period ahead, flexibility of U. S, procedure and rapidity of U, S. action will be increasingly important, if effective advantage is to be taken of unexpected and transient opportunities. • ■ #

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Rio Problem of Regional Association, Over the lon;>

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run, the snail; vulnerable, and essentially .dependent nations of Southeast Asia cannot exist satisfactorily as free nations without closer associations than now exist. . *

6.

The Preblen of Alignment. To preserve their independence, strengthen their internal stability, and protect themselves against aggression, some countries in Southeast Asia

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-^efer to join regional security arrangements. Sofiie, however, r^cfter t° avoid alignment with other nations. The basic Objective of both groups* is to maintain the independence of Kieii* countries free of outside .interference or dictation, and •*e independence and vitality of both are iniportar

mt to the Waited States and to each other,

. - . .. ., II. POLICY CONCLUSIONS '

7. The national independence of the mainland Southeast Asian states is important to the security interests of the United States. If such independence is to be preserved, U. S,. oolicies must seek to build sufficient strength in the area at least to identify aggression, suppress subversion, prevent Communist political and economic domination, and assist the non-Communist governments to consolidate their domestic positions. U. S. policy should not depend primarily on the degree and nature of Communist activity at any particular time, but should seek to promote these goals within the limits of the economic capacities of the countries concerned and U. S. resources available for the area.

; '. 8, ' Where a national determination to maintain independ-\ . ence and oppose external aggression is sufficiently manifest, i t the United States should be prepared to provide military as-

sistance based upon the missions of the forces as indicated in the "Country Courses of Action" (pari: V, below).

9. In the event of aggression against a Southeast Asian | state willing to resist, the provisions* of the UN Charter or \ the SEATO Treaty should be invoked, but the "United"States

\ • should not forgo necessary action in behalf of such, a state \ or states because of the possibility that other allies might

! "be loath to participate or to furnish more than token military forces■

| * . 10'. ■ In the long run, the ability of the non-Communist

1 governments, to attain political, economic and social objectives

l will be the dominant factor in defeating the Communist attempts

I to dominate Southeast Asia. The United States should assist

i " the non-Communist states of the area to formulate and excute

I . \ ■ programs designed to promote conditions of sound development, I | to demonstrate that they can achieve growth without reliance

on, Communist methods or dependence on the Communist bloc, and to give their .peoples a greater stake in the continued inde-! pen-denc.o of their countries.

f

j " 11. The United States should continue to make clear its

; own devotion to the principle of collective security, its belief that regional security arrangements provide maximum pro-V tuetlon at minimum cost for all, and its expectation that a

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country's decision to participate in such arrangements is based on its own calculation of its best interests and does not of itself constitute a claim for increased financial aid. Where countries participate, measures to assure adherence are desirable, normally including preferential treatment in the fields of economic and military assistance as justified by U. S. strategic objectives* Where new opportunities for affiliation develop they should be encouraged. The United States should, however, accept the right of each nation to choose its own path to the future, and should not exert pressure to make active allies of countries not so inclined. The genuine independence of such countries from Communism serves U. S. interests even though they are not formally aligned with the United States. The United States should accordingly support and assist them so long as they remain determined to preserve their own independence and are actively pursuing policies to this end.

III. OBJECTIVE

#

12. To prevent the countries of Southeast Asia from passing into or becoming economically dependent upon the Communist bloc; to persuade them that their best interests lie in greater cooperation and stronger affiliations with the rest of the Free World; and to assist them to develop toward stable, free, representative governments with the will and ability to resist Communism from within and without, and thereby to contribute to the strengthening of the Free World.

IV. REGIONAL C01TRSES OF ACTION *

13. Support and assist the countries of the area on the basis of their will and ability to defend and strengthen their independence.

14. Respect each country's choice of national policy for preserving its independence, but make every effort to demonstrate the advantages of greater cooperation and closer alignment with the Free World, as well as the dangers of alignment with the Communist bloc.

15. Encourage the countries of Southeast Asia to cooperate closely with each other on a basis of mutual aid and support, and support indigenous efforts to develop regional associations so long as they do not weaken SEATO or the spirit of resistance , to Communism.

* The regional courses of action are not applicable to Malaya and Singapore.

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16. Participate actively in SEATO, and seek to develop with its military and non-military aspects in a manner that will convincingly demonstrate the value of SEATO as a regional association, the usefulness of which extends beyond deterrence of Communist expansion. Encourage limited participation of non-Communist, non-SEATO Asian nations in certain SEATO activities.

17* Encourage and support the spirit of resistance among the peoples of Southeast Asia to Chinese Communist aggression as well as to indigenous Communist insurrection, subversion, and propaganda,

18. Maintain, in the general area of the Far East, U. S. forces adequate to exert a deterrent influence against Communist aggression, in conformity with IJSC 5602/1.

19. Should overt Communist aggression occur in the Southeast Asian treaty area, invoke the UN Charter or the SEATO Treaty, or both as applicable; and subject to local request for assistance take necessary military and any other action to assist any Mainland Southeast Asian state or dependent territory in the SEATO area willing to resist Communist resort to force: Provided, that the taking of military action shall be subject

to prior submission to and approval by the Congress unless the emergency is deemed by the President to be so great that immediate action is necessary to save a vital interest of the United States-

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20. In case of an imminent or actual Communist attempt to seize control from within, and assuming some manifest local desire for U. S. assistance, take all feasible measures to thwart the attempt, including even military action after appropriate Congressional action.

21. As appropriate, assist the police forces in Southeast Asian countries to obtain training and equipment to detect and contain Communist activities.

22. In rder to strengthen the non-Communist governments of the area and to help forestall their economic dependents on the Communist bloc:

a- Provide flexible economic and technical assistance as necessary to attain U. S. objectives*

b. Encourage measures to improve the climate for private investment, both domestic and foreign, and to mobilize the maximum investment of U. S. private capital in the area consistent with the prevailing climate-

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c- Encourage United Nations agencies, other Colombo Plan countries, and other friendly countries to contribute available resources to promote the economic growth of Southeast Asia.

d. Encourage the Southeast Asian countries to orient their economics in the direction of the free world and to rely primarily

on non-Communist markets and sources of supply for trade, technicians, capital development, and atomic development.

*

e. In carrying out programs involving disposal of U. S. agricultural surpluses abroad:

(1) Give particular attentiofi to the economic vulnerabilities of the Southeast Asian countries and avoid, to the maximum extent practicable, detracting from the ability of these countries to market their own exportable produce*

(2) Give particular emphasis to the use of the resources to promote multilateral trade and economic development.

Promote as appropriate the expansion of trade relationships between the United States and the countries of Southeast Asia.

g. Take advantage of adverse local reactions to Communist barter agreements with countries in the area by demonstrating the advantages to these countries of conducting trade on a multilateral commercial basis.

23. Make a special, sustained effort to help educate an expanding number of technically competent, pro-Western civilian and military leaders, working bilaterally, through the United Nations, with the other Colombo Plan countries and with other friendly countries. Stress the development of potential and secondary leadership to support the thin stratum of elite now administering the central governments and bring to their support modern techniques and technology in public information and organ!nation.

2U. Place increased e asis on community development projects, educational programs, and other activities aimed to influence the welfare and attitudes of the people at the village level.

25. Strengthen informational, cultural and educational activities, as appropriate, to foster increased alignment of the people with the free world and to contribute to an understanding of Communist aims and techniques.

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26. Hold or reduce the number of U. S. officials in each country to a strict minimum consistent with sound implementation of essential programs, in order to head off an adverse political reaction to the presence of a large number of Americans in relatively privileged positions.

27. Promote increasing Asian Buddhist contact -with and knowledge of the free world. Explore with friendly religious organizations ways of developing Buddhist fraternal associations and identification with free world religious leaders and movements,

28. Continue activities designed to encourage the overseas Chinese communities in Southeast Asia (a) to organize and activate anti-Communist groups and activities within their own communities; (b) to resist the effects of parallel pro-Communist groups and activities; (c) generally, to increase their orientation toward their local governments and toward the free world; and (d) consistent with their obligations and primary allegiance to their local governments , to extend sympathy and support to the Chinese Rational Government.

29. Discreetly encourage local governments to work toward assimilation of racial minorities.

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30. Implement as appropriate covert operations designed to assist in the achievement of U. S. objectives in Southeast Asia.

31. Promote economic cooperation between the countries of the area and Japan and with the Government of the Republic of China, to the extent feasible without jeopardizing the achievement of U. S. objectives toward the individual Southeast Asian countries. ,

32. In order to promote increased cooperation in the area and to deny the general area of the Mekong River Basin to Communist influence' or domination, assist as feasible in the development of the Mekong Rivei* Basin as a nucleus for regional cooperation and mutual aid.

V. COUNTRY COURSES OF ACTION IN ADDITION TO THE "REGIONAL COURSES OF ACTION" ABOVE

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BURMA

33. In view of the emerging opportunities in Burma and the repercussions that developments there will have on the uncommitted areas of Asia and Africa, make a special effort to influence an increasingly favorable orientation in Burma's policies.

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3I*. Encourage and support those elements in Burma which do maintain a stable free government that identifies its interest with those of the free world and resists Communist inducements, threats, and programs to subvert Burma's independence.

35* Encourage Burmese assumption of regional and international responsibilities compatible with our own objectives.

36. For political purposes, upon Burmese request make available military equipment and supplies on a loan or reimbursable basis, as consistent with U. S. interests.

37. Encourage the Burmese Government to establish internal security throughout the country, and discourage further foreign assistance to Chinese Nationalist irregulars and ethnic rebel groups in Burma.

38. Should overt Communist aggression occur against Burma, Invoke the UN Charter and, subject to Burmese request for assistance, take necessary military and any other action to assist Burma if Burma is willing to resist Communist resort to force and U. S. vital interests are involved: provided that the taking of military action shall be subject to prior submission to and approval by the Congress.

CAMBODIA

39. In order to maintain Cambodia's independence and to reverse the drift toward pro-Communist neutrality, encourage individuals and groups in Cambodia who oppose dealing with the Communist bloc and who would serve to broaden the political power base in Cambodia.

i*0. Provide modest military aid for indigenous armed forces capable of assuring internal security.

Ul* Terminate economic and military aid if the Cambodian Government ceases to demonstrate a will to resist internal Communist subversion and to carry out a policy of maintaining its independence.

1*2. Assist where possible in solution of Cambodian-Thai border problems and in fostering good relations between Cambodia and Viet Nam*

LAOS

1*3 # Seek to strengthen the determination of the Royal Government to resist subversion and to maintain its independence.

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44. In order to prevent Lao neutrality from veering toward pro-Communism, encourage individuals and groups in Laos who oppose dealing with the Communist blow.

if5- Develop an attitude of confidence on the part of the leaders that the UN Charter, SEATO, and U. S. support provide a favorable basis for Lao resistance to Communist pressure and inducements.

46. Encourage and support close bonds between Laos and Thailand; including such political associations, economic cooperation, and joint military planning as feasible.

il7- Support the expansion and reorganization of police, propaganda, and army intelligence services* provided anti-Communist elements maintain effective control of these Services.

48• Continue support of the Royal Lao Army to assure internal security and provide limited initial resistance to an attack by the Viet Minh,

49. Terminate economic and military aid if the Lao Government ceases to demonstrate a will to resist internal Communist subversion and to carry out a policy of maintaining its independence.

THAILAND

50. Promote the development of Thai leadership which is increasingly united, stable and constructive, is supported by the Thai people, and willing to continue the alignment of Thailand with the United States and the West. '

51. Utilize Thailand's central location in Southeast Asia as a point from which to create discontent and internal difficulties within nearby Communist-dominated areas and thwart Communist subversive efforts in I neighboring free countries, to a degree consistent with U. S. polici* and programs in neighboring free countries. 1

52. Provide military assistance to Thailand for support of forces sufficient:

a. To maintain internal security.

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external

To present limited initial resistance to aggression.

£. To.make a modest contribution to collective defense of contiguous SEATO areas.

53. Encourage and support close bonds between Thailand and Loos and between Thailand and Cambodia, including' such political associations, economic cooperation, and joint military planning as feasible«.

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VIET NAM

54. Assist Free Viet Nam to develop a strong, stable and constitutional government to enable Free Viet Nam to assert an increasingly attractive contrast to conditions in the present Communist zone.

55. Work toward the weakening of the Communists in North and South Viet Nam in order to bring about the eventual peaceful reunification of a free and independent Viet Nam under anti-Communist leadership.

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•* 50. Support the position of the Government of Free Viet Nam that a11-Viet Ram elections may take place only after it is satisfied that genuinely free elections can be held throughout both zones of Viet Nam,

57. Assist Free Viet Nam to build up indigenous armed forces,, including independent logistical and administrative services, which will be capable of assuring internal security and of providing limited initial resistance "to attack by the Viet Minh. * "

. 58. Encourage Vietnamese military planning for defense against external aggression along line's consistent with U. S,. planning concepts based upon approved U. S, policy, and discreetly manifest'in other ways U. S. interest in assisting Free Viet Nam, in accordance with the SEATO Treaty, to defend itself against external aggression.

•

SI NGAPORE A ND THE FEDERATION O F MAL AYA "(The following courses of action only, and not the regional courses of: action, are applicable to the Federation of Malaya and Singapore,)

59.' Accept the present primary role of the British in Malaya in so far as they arc willing and able to maintain it, and collaborate with the British so far as practicable.

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60. Encourage the British and local authorities to take vigorous actions to curb^Communist subversion, and be prepared to assist in such action as requested by British or local authorities. . ■ ■

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61. Employ all feasible means to prevent Singapore and the Federation of Malaya from falling under Communist control. In the case of armed attack, place initial reliance on Commonwealth, ANZUS, or SEATO resources as appropriate, but be prepared to take such additional U. S, action as may be required.

" , 62. Encourage the development of a strong, stable, independent Malayan nation within the Commonwealth.

63. Seek to assure.free world strategic interests- in Singapore, favoring, only if consistent with this an&j elective institutions in Singapore and Singapore's incorporation with an independent Malaya 'within the Common we a] th

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64. After Malaya attains full self-government and independence, be prepared, as appropriate and consistent With recognition of Commonwealth responsibility, to assist Malaya to maintain stability and -independence, and encourage it to join SEATO.

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VI. SUPPLEMENTARY STATEMENT OF POL ICY

on **

THE SPECIAL SITUATION IN NORTH VIET NAM

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r>. Treat the Viet Minh -as not constituting a legitimate government,, and discourage other non-Communist states from developing or maintaining relations with the Viet Minh

regime.

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65. Prevent the Viet Minh from expanding their political influence and territorial control in Free Viet Nam and Southeast Asia. * -

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67* Deter the Vict Minh from attacking or subverting Free Viet Nam or Laos. ■*".'".

68. Probe weaknesses of the Viet Minh and exploit them internally and internationally whenever possible.

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69. Exploit nationalist sentiment within North Viet Nam as a means of weakening and disrupting Sino-Soviet domination,

70. Assist the Government of Viet Nam to undertake programs of political, economic and psychological warfare against Viet Minh Communists.

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71, Apply j as necessary to achieve U. S. objectives, restrictions on U, S, exports and shipping and on foreign assets similar to those already in effect for Communist China and North Korea,

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16 Nov 1956

MEMORANDUM FOR THE SECRETARY OF DEFENSE

Subject: U.S. Force Commit merits to the SEATO

1. Reference is made to ADMIN CINCFAC Message 0^f0151Z July 1956, subject: "Preliminary Summary of SEATO Third Military Staff Planners' Conference, Singapore, 11-27 June," which stated, inter alia , that CINCPAC would require high level policy guidance on the matter of U.S. force commitments to the SEATO.

2» The permanent SEATO Military Planning Staff is scheduled to be established in Bangkok by 15 January 1957- As force requirements planning progresses toward detailed plans, there will be increasing pressure placed on the United States, particularly by the Asian members of SEATO, for information as to availability of U.S. forces to support SEATO plans.

3. The United States should not.duplicate the pattern of NATO and its significant standing military forces by earmarking U. S. forces for Southeast Asia. Instead, the United States should maintain mobile striking power readily available for immediate operations and sufficient, in concept with other nations, to defeat overt Communist local aggression in the SEATO area. The Joint Chiefs of Staff consider that although detailed U.S. strategic plans should not be discussed with military representatives of the SEATO nations, the United States should discuss her capabilities and methods of providing support to these nations without making a specific commitment of forces. The major effort of the United States should be to provide those types of forces which are needed in the SEATO area and logistic support to indigenous forces,

U. The Joint Chiefs of Staff recommend that the United States make no specific force commitments to the SEATO but that the U. S. Military Adviser, at the next meeting of the SEATO Military

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advisors be authorized to reassure the SEATO nations of UoSo support in the event of overt Communist aggression 0 The Joint Chiefs of Staff further recommend that the U.S. Military Adviser be authorized to inform the SEATO nations, in broad terms, of the major U„S. forces deployed to the Western Pacific and those forces available to CIBCPAC for contingency planning, emphasizing the flexibility and mobility of these forces 0

For the Joint Chiefs of Staff:

/s/Arthur Radford ARTHUR RADFORD,

Chairman, Joint Chiefs of Staff

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April 15, 1957

In reply refer to; 1-13^75/7

Dear Mr- Robertson:

Recent developments have brought about a new urgency in resolving the problem of the ceiling on U, S. military personnel in Viet-Nam. You will remember that by interdepartmental agreement early in 1956 there was established a ceiling of 692, which includes .31*2 for the MAAG and 35O for TERM, the Temporary Equipment Recovery Mission.

Two facets of the problem now point to the necessity of doing away with the MAAG ceiling and permitting the Departments of the Army, Navy, and Air Force to augment MAAG Viet-Nam with the additional personnel necessary to accomplish the mission there.

The first aspect is that raised in the telegram from the Embassy in Saigon to the Department of State, 2772, of 12 March 1957 j which points out that the International Control Commission is becoming increasingly more restive in respect to 3 I and recommends consideration of several courses of action. The Department of Defense concurred in the April 9 Department of State telegram to Saigon which stated that a solution of the problem along the lines of incorporating TERM into an increased MAAG was under study and that the Department of State would discuss the problem with the Canadians, British, French, and Indians. This telegram was the result of a conference c arch 20 of staff representatives of the two departments in which Ambassador Durbrow participated -

The second aspect of the problem is the necessity for taking over the training of the Vietnamese Navy and Air Force- It will be remembered that TERM was created for a dual purpose, to provide a logistical organization to resolve the problems of excess property in Indochina and logistical training in Viet-Nam, and to free the MAAG from other duties so that its personnel could concentrate on the training of the Vietnamese Army* The withdrawal of the French Army training personnel required this increased emphasis on training. In the telegram from Chief, MAAG Viet-Nam 56O7 of k April, we have been Informed that President Ngo Dinh Diem told the Chief, MAAG that agreement had been reached with the French Aiak&ssador for the withdrawal of the French Air Force and Navy training missions upon the completion of the present courses of instruction- The first completion is scheduled for this month, and additional U.S. military personnel will be required to p:i ck

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up the training from the French. CINCPAC has requested in his 062352Z of 6 April that additional personnel over and above the present ceiling reach Viet-Nam in June of this year.

Other aspects of the problem of the ceiling include a request from President Diem for additional Army instructors at the Viet-Nam military academy, a proposal by CINCPAC to transfer underway training of the Vietnamese Navy from Subic Bay to Viet-Namj and the current difficulty in operating MAAG and TERM efficiently within their present ceilings.

*

An increase in MAAG strength to achieve a rapid improvement in the effectiveness of Vietnamese forces to compensate for the withdrawal of French forces is considered a matter of urgency. While the French have withdrawn approximately 190,000 regular troops from Viet-Nam since the Geneva Agreement was signed the Viet Minh have continuously reorganized and re-equipped their forces during the same period so as to increase their regular combat strength from six to eighteen divisions. These forces have a capability of conducting combat operations at Corps level. The Vietnamese Army consists of ten divisions which are in the early stages of training at regimental and division level* The current military situation requires that the Vietnamese armed forces expeditiously attain a satisfactory level of combat effectiveness.

In view of the forthcoming visit of President Diem to Washington on Kay 8th, 9th, and 10th and of the impending -training crises for the Vietnamese Navy and Air Force I recommend that steps be taken as a matter of urgency to secure the necessary international concurrences in the abolition of the ceiling on MAAG Viet-Nam. I feel it might be desirable to have this problem resolved, if possible, prior to the arrival of President Diem in Washington so that he could be informed at that time of our plans to assist him in the training of his Navy and Air Force.

Sincerely yours,

(Signed) Mansfield D. Sprague

Mansfield D. Sprague Assistant Secretary of Defense (ISA)

Honorable Walter S. Robertson Assistant Secretary of State Department of State

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. HEM 6 (For Information)'

•. EROGKESS REPORT OH Mj UMAH) SOUTHEAST ASIA CNSC5612A)

BACKGROUSD

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1. The current U.S, policy on SE Asia (NSC 56l2/l) was approved 5 September 1956. ©lis is the first progress ro]>ort thereon and covers the period through

13 March 1957. • . .'

Y

EECOMMEKDATB

7. -It-is reccsmonded that you note the report'without exception

TO? PWi 3-5.Q o

•

• : 2. Mo review of 1JS0 policy i« recommended by the OCB* *'""

' .-" • 3. Burma appears to be moving closer to the J^ree World* Although her basic "policy of neutralism is unlikely to change, Burma has indicated interest in obtaining U.S. economic and military assistance. The 1JL.SU has been unable to influence . .tombbdia In the direction.of development of a stable government and non-involvement -■ ' . with the imunist Bloc. The situation in Laos worsened, the government being threatened with the possibility of downfall if negotiations with the Pathct Lao ' should collapse* The F ederati on of_Malaya made further progress in its transition * : " to independence. T hailand-f s slow progress toward free representative government continued, and Vietnam seems clearly persuaded that its interests lie in stronger .affiliation with, the Eree World. ';...* * O ■ -

s- ', . 4« A combined SEATO military exercise vas held to improve military cooper a-. V_. tion.among the SEATO nations. Prospects that other nations might participate in J . SEATO did not improve, with the exception of Vietnam* On the whole, EDAF has begun - " to make a contribution. In Vietnam the Army is now capable of insuring internal ' security, and in Cambodia the KAAG lias made some progress toward achieving a working relationship with the Cambodian general staff. In Laos M3AP has made en army possible. In Thailand the armed forces ore considered car * Ic of meeting any indigenous threat to internal security, retarding external aggression, and making a token contribution to collective defense. ' " ...

- • • !

5. The economic aid programs in the area have all continued to show slow progress* No new U.S. commitments have been entered into during the reporting period. Efforts live been made "to lessen demands upon U.S. resources and upon local * . economies (NSC Action Ho* 1599-e)* In Cambodia and Lac -;■ the armed forces were reduced, and in Vietnam the U*S» has refused a request for an increase of forces. In Burma, for overriding political considerations, it vas found necessary to grant • Burma r s request for needed loan assistance. In Thailand no formal consultations .have been held with regard to the purposes of HSC Action Ik). 1599-e*

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- . 6. As you know, the JOS recently recommended that U.S. policy re Cambodia be modified to restore the mission for its atoned forces of resisting external aggression* Me have recoiiMended that you non-concur in the JCS recommendation* *

♦

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(Supersedes relevant portico of NiE 63-56)

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27/s following intelligence organhaiio?is "participated in the preparation of this estimate: The Central Intelligence Agency and the intelligence organi tiions of the Departments of Slate, the Army, the Navy, the Air Force, and The Joint Staff.

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on 14 May 1957. Co ^/Ing :jcre the Special Assistant, In-telligenee, Dap tent of State; the Assistant Chief of Staff* hiielligence, Department of the Army; i7ie Director of Naval Intelligence; theMireetor of Intelligence, USAF; and the Deputy Director for Intelligence, The Joint Staff. The Atomic Energy Commission Representative to the I AC, and the Assistant Director, Federal L of Investigation, abstained, th$ subject being outside of their ydrisdiciion.

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SECRET

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PROSPECTS FOR- NORTH VIETNAM

THE PROBLEM

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To analyze the current political, economic, and military situations and to esti mate the prospects for North Vietnam over the next year or so. ■

.. CONCLUSIONS

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1. Although the Communist regime in North Vietnam (DRV) has probably lost a considerable measure of its original popular support and has been faced with sporadic outbursts of violence, it remains in firm control largely because of the loyalty and effectiveness of the army. Moreover, with substantial help from the Bloc, it has apparently made significant progress toward economic restoration, particularly in agriculture. (Paras, 13-16, 20-21) *.

2. The DRV has undertaken to "correct its mistakes 11 which it admits caused popular resentment, and it will probably be able to regain some of the popular support which it lost. If the party organisation is sufficiently strengthened and if crop prospects are good, steps toward further socialization of agriculture may come as soon as the fall or winter of 1957, Local disturbances may recur but for the foreseeable future the DRV will be capable of maintaining effective control. (Paras. 17, 23-26)

■

3. The DRV is generally isolated from the outside world except for close ties with the Bloc, on which it depends for aid and

support. However, the DRV has probably been disappointed by the lack of effective Bloc support for its objective of unifying all Vietnam under DRV rule. The DRV, With Bloc logistical support, could easily overrun South Vietnam, Camboclia, and Laos if opposed only by indigenous forces. However, the Bloc would support such an attack only if Moscow and Peiping were to estimate that such action carried little risk of US military intervention. (Paras.

29-34) ■ .

*

4. The DRV will probably continue its tactics of "peaceful competition" with South Vietnam for the support of the Vietnamese, although it will continue its of-forts to infiltrate and to subvert official and nonofficial organizations .aid to exploit dissident and dissatisfied groups in South Vietnam. In Laos, we believe that the DRV will continue to su] t Pathet Lao efforts to negotiate a political agreement with the Royal Lao Government, with the ultimate objective of Communist control, and may encourage local Pathet Lao military action in order to bring pressure to this end. The DRV will probably not, in the immediate future, play a primary role in Cambodia. (Paras. 34-36)

SECRET

Declassified per Executive Order L3526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

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MAY 1 5 19S?

INT£RNATIOKAL SSCUKIVY AFFAIRS

MEETING dETf/EEN'VBESIDEHT DIEJ1 AKI) DEPUTY SECRETARY QUAKLKS 10- Hav 1 957, 104 0 to 1210 Room 3E924 . The Pentagon,

Present wer-e: President Ngo Dials Die.:;i

General Traa Van Don, St Str.fi:

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Vietnamese Ambassador Tr Kcj uy e n f! u u Gh a u t Sec r e t a

Interior and to the P Kcar Admiral D, L, Mel)on

Hgo Di nh Di era Deputy Secretary Donald General K a t !i a i: V , T W i n i n Mr, Mansfield D, S'pragu.e

of Defense (ISA). it.. General Alotizo P. Fo US Ambassador to Viet-Na As s i s t a iit Secret ary of S . Mr* Kenneth i'eung, Dept« H-r. Sedge wick (Interpret Captain B. A, Robbins t Jr

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Secretary Quarlcs opene'd the mcetj instead of a briefing for President Ngo bee n* schedu led, it v/as felt that this u " pres'tmptuoiis In view of the Presidents Asia, and therefore the President v;z$ i views on he situation.

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of invasion along the border area has no after the enemy passes tlrrough the Annaui soft area for defensive purposes. Either one, or a combination of botli , of the above routes is possible an3 feasible. Above the 17th parallel the Viet Miah have 200,000 regular troops and 250,000 -regional troops. Secretary Quarles raised the question qs to restriction on those forces by t lie. Geneva Accords, "It was --stated that there is no restriction on the numbers, The troops, however f have been given modernized equipment and training by the Chinese Communists and their re-equipment is a violation of the Geneva Accords, President Ngo also stated the Russians arc particularly concerned with the training of these forces and in accordance with Russian practice have emphasized artillery to the point that they

much as Viet-Mar;i 0 He stated that the has been training in Communist China

a-ve three times as friet-llinli air force since 1951*

The Vi ctnamese the entire border* lightly populated.

do

not have sufficient forces to guard Laos has a weak army, very poor roads and is Infiltration through Laos is both easy and dangerous to Viet-Nam, It is believed possible . that the Viet |,Iinh could infiltrate this interior route with as many as a . 100,000 troops disguised as coolies which could be very dangerous. President Ngo views a strictly defensive plan as unsatisfactory if only because of the demoralizing factor* lie feels the plan mist be both offensive and defensive. He covered this concept as follows: (1) Vietnamese do not know

the SEATO Plan, sive plan which

(2) The General Staff first conceived a defen-

was considered demoralize ng. (3). They have now conceived an offensive-defensive plan which has been referred to General V/illiams, (4) Population of the North is against CoamunisEn If free to move it would-move out to the South. In the North soldiers are the principals in the priviledged class. (5) It is believed necessary in the event of aggression to bring airborne troops into the high plateau area of Laos-Viel~Mam t and also conduct airborne operations to pin down the Viet Hinh and make possible an offensive to the North. In addition the line of the 17th . parallel must be held as this is thc airborne landings must be Vietnamese Foreign troops should be limited to use' below the 17th parallel as support forces*

route of refugees, Any troops not foreign troops.

Big question for Vietnamese is whcn do they get the foreign troops, Thai forces "will be otherwise occupied, The civil guard is poorly equipped and would not be effective* There are no other ground forces available in the Southeast

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Declassified per Execu live Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 2011

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Asia area* In answer to a question as to whether the troops to be used in the pSatcau -q-o-uld be Thai, the President answered no. Laos is afraid of the Thais; they are afraid of a Pan-Thai movement to swallow Laos. Laos 'hates Cambodia, distrusts the Thais but likes the Vietnamese. They would like an outlet to the sea at Tourane. They have promised to send officers to be trained by^the Vietnamese, President Ngo then consented . on' his planned sacond counter move which is to fill up the vaciiuu of the high plateau area, the forest border area and the Plaine des Jones. This plan will be begun by placing trained demobilized men from the Civil Guard in these areas with their -families, 3,000 so far. He is no w appeal i ng to the people of the central Viet-Ham area to settle on .the high plateau and is asking people of South Viet-Nam, the southern areas, to move into* the Plaine des Jones. \

SEATO has always recognized the need of the fight against subversion. Planting men in these areas will construct a human wall effective against Communist infiltration and subversion. The above goes hand in hand with construction of roads in the above areas. Stationing men and building roads serve both a strategic and economic purpose. The road building projects is really a stage of*the French plan that goes .back to 1919 and continues to 1942.

Secretary Queries asked the status of the road construction now. The President answered it had not yet begun but Capital Engineering Firm was starting construction studies and he thought construction could begin next year. These roads in the interior are important because .the roads along, the coast is easily disrupted. It has many bridges and that is why French, thinking of the possibility of Japanese aggression along the coast t thought roads in this area desirable. This wa's part of the French Empire Plan to tie together Faet-Haia Cambodia and Laos. It is still a good plan for the defense of Southeast Asia. It includes a road across the interior to Paksc on the Mekong which is near the Thai Railroad terminus at Ubon. Konte 9 from Tour a no to Savannakhet is too close to the 17th parallel, but Laos is interested in an outlet to the sea for economic reasons. SEATO principals are CD to pary aggression (2) struggle against subversion and (3) economic and social aspects required to support the above. The French and British are interested mostly in number 3. The military strategic a$[2ct of offensive-defensive plan are favored by the air force and navy. In case of aggression tactical atonic weapons could be used. Vietnamese feel they must emphasize ground weapons because the Viet~Han war showed that it was difficult to use air effectively in tit is country. Communist

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Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

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troops are very mobile. Tije irregular forces advance ahead of regular troops to sabotage and cut coKinniB-i oat ions. They also follow the regular troops .to subdue the population* Use of atomic weapons against the aggression through" the spsree settled territory of Laos would not be effective. Therefore, the President believes that the Vietnamese mist reorganize their Army to^be prepared for such a struggle*

Despite the efforts of General 0 T Daniel the present Array structure is now not satisfactory. This is due to the French policy which insisted on keeping Vietnamese forces, in small -units no larger than a battalion, preventing the development of a proper Viet-Naia Amy. This is why Diem could not come to power sooner.- .French said Vietnamese couldn t t be trained and were too weal; physically. They limited them to light forces. After the Armistice the French continued to control the forces. Following the French phase out t| and the elimination of French forces, training was conducted under a mixed French- • US training group. The French concept of light battalion, light division, heavy division, made no sense at all not even for use against the sects,, I therefore felt the Army should be completely reorganized and consolidation of training into a strictly US mission Bade this possible. The U.S. military know that the Vietnamese make good soldiers, I have talked over ny idea with General Williams t and it is to reorganise lay 6 light and 4 heavy divisions of 5,600 and 8,300 men respectively, into the sane number of field divisions with 10,000 each/ with 3 regiments per division. To achieve this the Array must increase to 170,000. This would avoid a complete shift of the present division. If we stay at the present 150,000 nen it would be necessary to shift or change the basic structure* If our total forces are raised to 170 thousand we could increase each division to 10,000. To reduce the impact OK the budget I have decreed a draft as a stop gap plan. Draftees will be Inducted for 1 year terms in the age group 20 to 21, Beginning 1 August 150 per day will be inducted. This will amount to 40,000 per year. In 3 years this will make it possible to replace 2/3 of the Array at the end of 3, years. The budget will be stabilized. At the present time Vict-Hara stray is organised along French colonial lines with. the families traveling with the troops* The average pay is a thousand piasters a month. The military budget is 170 million dollars a year. The use of draftees would reduce the cost by half. Draftees would be young people with no families* The . US* Eijiitary reconnend that I not replace all my troops with draftees but retain 30,000 minimum as a hard core, I believe the above is necessary because in lay view to meet aggression in my country requires enp.ha.sis on the ground forces. As the

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At this point Secretary Qaarles noted that the President was clue at the Press Club shortly and requested tine for a few U.S. questions. His first v/as whether the Geneva Accords inhibited (US) training personnel. President Diem replied that there had been no protests - there had been cmbarras sing questions, but the Geneva Accords only prohibited troop reinforcements.

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the status of orcc, General Don renoh had been

and then returned, and co minimi cations e placed with the no t!ie Geneva h training of the oor because the at-Nam Air Force raining for mechanics dequate. VJhen the * heir training cement to withdraw he exception of til the end of the * 3 rernests would be the MAAG provide tors for the mi 1 i ~

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' ' yROQRESS HBft) OK U.S. POLICY JN MAINLAND SOUTH EAST ASIA ( NSC 5612 /1.)

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BACKGROUND *'.•'• • . '

W"^U.S. Policy in Mainland Southeast Ada was approved on 5 September 1956. This progress rbport. covers the period 13 March through 6 November 1957•

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b; - Burma cautiously*developed closer relations with the Free ■ World while maintaining publicly .its neutral position and * '; continuing to receive Communist aid. Awareness of the Co:a~

.munist danger increased. The Government recognised and r began to cope with its foremost problem, the preservation , of law and order,

c. I^o^* Although the outlook improved with the formation 0

" a conservative eabinfet, negotiations for a cabinet including ■"' Pathet Lao (Coiranmiist-lcd) representatives became more ac--' tive/ The threat posed by Pathet "Lao control of two north--* erri provinces continues, and security conditions in the areas under government control deteriorated*

OEPRET • ■ .

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PB Meeting ' j

r ' . " ■ 26 November 1957 ITEM A '• \

I.

2, General. Many surface developments seemed to favor the Free World, although the Communists, often working underground, may have made gains of their own. The coup in Thailand, the repercussions of which are still to be felt over-shadowed all other developments. If Thailand orients itself toward

"neutralism, some of the Free World gains might well.be reduced. The S5AT0 staff was strengthened, and the September Military Advisers 1 meeting was highly successful. There was modest progress in developing SSATO economic and social ■" programs. Nevertheless, the generation of public attitudes favorable to col- \

■lectlve security pacts and the V. f est in general is becoming increasingly diffi- J cult in the area. The adverse effect on U.S. "political objectives of PL 480 » rice sale!* temporarily receded because the area nations found ready markets for i their produce in 1957. \ * \

■ 3* Political items of interest on specific countries are; t

a. T hailand : The dependability of assurances that Thai*foreign : ■" " * r policy will not change re; ins to be seen. A period of considerable domestic instability*is anticipated. Adjustments ' ■ to Communist China will probably continue* Owing to the

f* changed situation, various U.S. programs-, particularly mill-; tary and economic assistance programs, are.being reviewed.-

i

d. Cambodia: A sharper awareness of the Communist "danger ap- ;• j

.* *: pearcd to create a more friendly climate toward the U.S.,

. / : '■ and the government showed an increased*will to resist inter- " !

( , V ; nal Communist subversion. Nevertheless } the overall internal

;y . ' • ■ security situation deteriorated as a result of more vigorous - }

' . Gouaminist activity. • \ ' • •' t . ■ ..;

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Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

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o. Vietnam maintained its close relationship with the U.S. , *" progress was made in developing a representative govern-

* . • ment, while executive leadership remained strong. Ef-

fective countspleasures against non-violent Communist ,! * subversion remain a priority requirement,

f, "Maiaya became an independent member of the British Com- ' * , i "* • monwoalth in August, and good will continues to exist " • • '-•• * ""toward Great Britain, The new cabinet is conservative

and pro-Western, but present indications are that Malaya

'■ " : will not Join SBAtO. Communist terrorists continue to : j

threaten internal security. The government is opposed ■ .■ - [

* to any political fusion with Singapore at this time. ■ . "'' '"'"'■* " \

■-

g. The Singapor e government, although beset with internal " ■ .\ political difficulties, weakened the Communists by ad I

ditional arrests of known subversives.

... 4^ Econom ic. Serious obstacles to regional economic cooperation remain* such"as preoccupation with 4 domestic affairs, political antagonisms, and lack ; . « Of complementary economies. Economic development throughout the area is

/severely handicapped by lack of trained manpower. The Sino-Soviet Bloc eori-• -"'."'"tinuGs a high degree of economic activity in the area, with demonstrated ,-' . : .flexibility. (Annex B is" a discussion of Bloc-Southeast Asian economic relations,) Southeast Asian nations are comparing U.S. and S3no-Soviet Bloc aid j programs as to aid levels, administrative procedures and controls, and speed of * | performance. Complaints continue regarding U.S. aid program* delays. Con- . . " J .flicting claims on U-S, aid and inefficient use of local resources present "* I problems in some countries, The climate for U.S. private investment leaves j much to be desired. Planned expenditures for U.S." economic and technical assistance for FY 1958 in millions are: Burma - §10.0; Thailand- $35.Oj Cambodia - $35.0; Laos - $36.6; Vietnam - §209.4; Malaya -'none. These expenditures total £326 million, compared to estimated expenditures of $379 million for FY 1957. ' .

■I

5m Hilitary. The U.S. has, or will have, Overseas Internal Security i Programs in Cambodia, Laos, Vietnam, and Thailand, U.S. police experts will j make a survey in connection \rith a Burmese request for assistance, and the - ... ■ Burmese have been informed that £10 million U.S. military assistance wil* be

available• The Vietnamese armed forces improved significantly, and Communist ..capabilities for resistance in South Vietnam were neutralized". Tl>3 current.

situation in Vietnam does not permit any reduction in forces, but the U.S. did . ■. not accede to President Diem's request for increased troop strength. Th ** ; *; Malayan Government agreed to the continued stationing of British Commonwealth troops in Malaya and to their bearing defense responsibilities for Malaya, . ' . ; Estimated Military Assistance expenditures for FY 1958 (with FY 1957 estimates "in parentheses) are, in millions: Thailand - $20. A ($25*3); Cambodia ,- $6.2 . ($31.1)3 Laos - §5.7 ($3.8); Vietnam - U3-5 ($105.0); total - $75-8 ($155.2).

> *

6,. Recomme ndation Regarding Policy R eview. After the'December elec- ■ * tions in Thailand, consideration should bo given to the need for a review of ■ ( the ' pertinent sections. The section pertaining to Malaya is outdated and should be reviewed. • \ ' ♦

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COMKSNTS

'The sharp drop,in estimated MAP expenditures for Vietnam for FY 1958* .„ arcd with FY 1957, reflect a drop in the program ($38.9 million for FY 1958 compared to $74.2 million for FY 1957) and a levelling off of the pipeline. " *

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Burmese representatives are expected to arrive 5n Washington on approximately 8 December to negotiate the details of the first military assistance program for Bufma, The U.S. team of police experts is now conducting its survey in Burma, . *

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9 # Since approval of the report, the Pathet Lao symbolically surrendered authority over the "two Northern provinces under its control and a coalition cabj.net including two Pathet Lao representatives was formed. The actual imposition of government control over the northern provinces and the integration of 1500 Pathet Lao troops into the army, as agreed, are still uncertain of achievement, , . . , .. . ■ , ■-•>"■'

,10. - The paper is considered to be generally acceptable/ . * '' .". / teOQMMEKDATICy '

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347th NSC Meeting 5 December 1957

I*

'••■''' : . " ITEM 5 (For Discussion)

*

' PROGRESS REPORT ON U.S. POLICY IN MAINLAND

■*■» * • ■ ■' -

SOUTHEAST ASIA (NSC 5612/J.)

BACKGROUND

1 # U, S» Policy in Mainland Southeast Asia was approved on 5 September * ,

1956. This progress report covers the period 13 March through 6 November 1957.

SUMMARY * " * ' * '■■ ■■ <■■» ■ — *• \ •*-—

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2;. Po litical: -^ •• . ' '

Ui ! a,- Thailand: The coup in Thailand overshadowed all other developments

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'in the area. The dependability of assurances that Thai foreign policy will not change remains to be necn t Owing to the changed situation, |

various U. S» programs arc being reviewed, - -

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■b. : " .Burma cautiously developed closer relations with the Free World

1

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while maintaining publicly its neutral position and continuing to receive Communist aid, . v

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■ c.' Laos: Negotiations for a cabinet including Pathet Lao (Communist-led} * ./~ representatives became more active. The threat posed by Pathet Lao control of two northern provinces continues, and security conditions : in the areas under government control deteriorated. >

• 1

f d, * Cambodia: A sharper awareness of.the Communist danger appeared

to create a more friendly climate toward the U. S. Nevertheless, the ■ overall internal security situation deteriorated as a result of more . • viporous Communist activity.

3

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\ e» Vietnam maintained its close relationship with the U. S. Progress

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was made in developing a representative government, and t .ecutive " leadership remained strong. . . •

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h i t Malaya became an independent member of the British Commonwealth

in August, and good will continues to exist toward the U. K. The

* *

new cabinet is conservative and pro-T/cstern, but present indications are that Malaya will not join SEATO. Communist terrorists continue to threaten internal security.

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tf. Singapore: The government weakened Communist strength by " :

additional arrests, . . m I

: ;.. SECSff, nil. " ' " ■; . ;

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7 3 Economic: The Sino-Soviet Bloc continues a high degree of economic activity"in the area, with demonstrated flexibility, and Southeast Asian nations are'comparing U. S. and Sino-Soviet Blpc aid programs. Complaints continue regarding U. S. aid program delays.- Planned expenditures for U. S. economic

id-technical assistance for FY 1958 (with FY 1957 estimates in parenthesis) are, in millions: Burma ~ $10.0 ($0.0); Thailand ~ $35.0 ($39.8);, Cambodia ~ $35.0 ' ■ ($4-1.0); Laos - $36.6 ($47.9); Vietnam -.$209.4 ($249.8); total - $326.0 ($378,5).

4 Military: ' In Vietnam, the armed forces improved significantly, "but the current situation does not permit any force reduction. Burn':a has been informed that $10 million in U. 5. military assistance will be available. Estimated Military Assistance expenditures lor the area for FY 1958 (with FY 1957 estimates in parentheses) are, in millions:- Thailand - $20.4 ($25.3); Cambodia - $6,2 ($21.1); Laos ~ $5.7 ($3.8}j Vietnam ~ $43,5 ($105.0); total ~ $75,8 ($155.2). ;

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-5 Recommend ation r egarding Policy Review. After the December elections -'in Thailand consider ation. should be given to the need for a review of the pertinent section&~-" j rfThc section pertaining to Malaya is outdated and should be reviewed.

* * :

-

COMMENTS

6 Vietnam: The sharp drop in estimated MAP expenditures for Vietnam for s v FY I9 r )8 as compared with FY 1957, reflects a drop in the program and a levelling >i off of the pipeline. L aos: Since approval of the reporfcj a coalition cabinet including two Pathet Lao representatives has been formed, .'

7 # The report is considered to be generally acceptable HE COMMENDATION . ■• .'■ \ ,'.... . ; - ' .

8, It fes recoromended that you note the report without exception.

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NSC >309 m: m m -• TOP SECRET

Apj/_^ ^ j-jvO

NOTE BY THE. EXECUTIVE SECRETARY

to the NATIONAL SECURITY COUNCIL

on .

U.S. POLICY IN MAINLAND SOUTHEAST_ASIA ■ ' References; A* NSC i?6l2/i" ~ ,-.'-*. , - • B.- NSC Action No 0 1826

C-, Memos for NSC from Ex- . . \" ecutive Secretary, same subject, dated .. February 20 and March 3, 1958 D» NSC Action No. 1885

stuoxuut; uj. j'.oo ?oi/i/ij prepared oy one w-jsu rj.annj.ng aua.ru in accordance with NSC Action No, l826~b and transmitted by the reference memorandum of February 20, I$>?8; subject to:

a* The following comment by the Attorney General:

■

"Agree^ subject to the substitution of the phrase 'of the proviso 1 .for the word f indi " eated 1 in the last line of paragraph 6hl\ so as to make.Identical the references to the taking of independent action in -paragraphs -(&A and 6 l rD c It is felt that such an amendment would.obviate any future implication that independent tX c S„ military action in defense of Malaya might be undertaken without regard to the proviso in paragraph 19."

b e The following ca&s&ent by the Secretary of Commerce:

*

■ . . "The Department of Commerce does ) j*& consider

' that grant economic assistance to the Federation -of Malaya is necessary or desirable at this time and understands the revision doc * not incorporate such provision,, Also the Department does not feel that loans to*the . Federation of Malaya for economic developmenl purposes cire necessary at this time and shou! a proposal for such loans be advanced, would desire- participation in the early stages of consider at ion*' 1 ■ "*

NSC 9^) ."' .1113 TOP SEC7

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

TOP SECRET

The above revisions to NSC 5612/1, including the revision proposed by the Attorney General,, were approved by

ident on Aprl,l 2,, 1958* The President directs that

_ .- V." 'fc.--

the

NSC 56-12/1 a &s amended and approved and enclosed herewith

- -

as RSC 5b09 5 be implemented by all appropriate Executive departments and agencies of the U, S* Government; and designates the Operations Coordinating Board as the coordinating agency.

A Financial Appendix on the subject 3 which accompanied NSC £6.12/1« has not been reproduced, A new Financial Appendix will be prepared when the policy is next reviewed* ■

NSC'5809 supersedes NSC 5612/1,

JAMES S. LAY, JR. Executive Secretary

•

cc

The Secretary 01 the Treasury

The Attorney General

The Secretary of Co-snerce

The Director,j Bureau of the Budget

The Chairman^ Joint Chiefs of Staff

The Director of Central Intelligence

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Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

TOP SECRET

STATEMENT OF POLICY

on

U. S B POLICY IN FiAINLAND SOUTHEAST ASIA*

1~ GENERAL CONSIDERATIONS

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I c GenevBl^ Since mainland Southeast Asia does nou represent a unified area, courses of action must generally be determined in the light of*widely .varying country situations. , However, basic objectives and main directions of U. S. policy can and should be established on a regional basis.

2 * ConseQuences of Cpmmuni st Dom inat ion, Th e national ' security of €he United States would Je endangered by Communist . domination of mainland Southeast Asia, whether achieved by overt aggression, subversion, or a political and economic offensive.

a.

/

_ The loss to Communist control of any single free country would encourage tendencies toward accommodation by the rest,

b* The loss of the entire area would have a seriously adverse impact on the U. S. position elsewhere in the Far East, have severe economic consequences for many nations of the Free World, add significant resources to the Communist bloc in rice, rubber, tin and other minerals, and could result in severe "economic and political pressures on Japan and India for accommodation to -the Communist bloc. The loss of Southeast Asia mainland could thus have farreaching consequences seriously adverse to U. S. security interests.

3* The Communi st Threat

■

a. Overt Aggra s s1on. Although Communist policy now

emphasizes non-military me.thods, the danger of overt ag-

. . grass!on will remain inherent so long as Communist China

and North Viet Nam continue a basically hostile policy

supported by substantial military forces. There is only

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■-■ For purposes or 'cms paper } Mainland Southeast Asia" consists of Burma, Cambodia, Laos, Thailand, Viet Nam, Malaya and Singapore. In addition, there is attached a supplementary statement of policy on the special situation in North Viet Nam,

1115

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!, At present overt aggression and ? except in the

cases of Viet Ham and Laos, militant subversion are less likely than an intensified campaign of Communist

political, economic and cultural penetration in the area/'

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TOP SECR3

a cease-fire in Viet Nam and sporadic hostilities continue In Laos. The'Viet Minh have continued to Improve their combat capabilities since the Geneva Conference

ox" 195 1 *.

*

■

Ps Subyerslon^ In most countries of Southeast Asia a threat axso^&i^i&oo from the exi&fcano© of &:;tariDiva local Coiftmunist capabilities for all types of subversive activities, ranging up to armed insurrection. Additionally ., the large overseas Chinese communities in-Southeast Asia offer a fertile field for subversion. The Break internal security systems of the Southeast Asian

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states

them highly vulnerable to such activities.

c. Communist Political and Economic Offensive.

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overt, assiession and militant subversion are

less likely, than -.an itenslfled campaign of Communist political^ economic and cultural penetration in the area. The polity!cal instability economic /backwardness, export problems, and extreme nationalism of these countries provide many opportunities for Communist exploitation by trade and economic assistance, conventional political and diplomatic activity,, and extensive infiltration. This offensive now constitutes a threat to U, S. interests more subtle and more difficult to cope with than other threats.

*. U. S. Role, The United States is likely to remain,the

only major outside source of power to counteract Chinese Co&muhlst thrust into Southeast Asia, retention of

the

THUS j

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the

S13il

this

area in the Free World Will continue to depone on the extent and effectiveness of U. S. support as well as on the local efforts of the countries themselves.

•A

Political« * The underlying purpose of U. S.

-

assistance in 'the area Is to help the non-Communist countries develop more effective political organizations 3 strengthen their internal administration and enlist greats:? allegiance in both urban and rural districts. In part., this purpose will be served by programs for military and economic aid dealt with below. In part it Hill require an intensification of present programs for training competent Asian managerial and technical personnel* And, in part, new approaches, both governmental and private, vrlll be needed. These should not concentrate exclusively at the national level, but should Include activities designed to strengthen and vitalize Indigenous traditions and institutions and to have an impact on village life, rural society, and educational systems.

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TOP SECT!

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

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TOP SECRET

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k* Mil itary , Be cause these countries do not have the capability of creating armed forces which could effectively resist large-scale external aggression, the United States will be required to provide a basic shield against Communist aggression/ For the foreseeable future , local will to resist aggression will depend on a conviction in Southeast Asia that the United States will continue its support and will- maintain striking forces . adequate to counter aggression in Southeast Asia with capabilities described in current basic national security policy, The combination of such U. S. forces and local will to resist would constitute the best deterrent against aggression. Should the deterrent fail, this

the

combination would also provide the

most

effective in

sur'dnce th^t* in conjunction with indigenous and allied forces, the United States could suppress aggression in

area quickly and in a manner and on a scale best

calculacec. to avoid the hostilities broadening into general war.

£• Economic and Technical, The insistence, through-ut most of the area, on economic development provides

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the strongest lever for the exertion of influence hy th< Free World or by the Communist bloc. Without increased external help from some source, most of the governments of the area will be unable, even with adequate indigenous effort, to manage the political demand for rapid betterment iri the conditions of life and provide for sound . " economic development. Failure to obtain such assistance from the Free World will tend to drive these countries toward economic dependence on the.Communist bloc. The general preference in Southeast Asia for Western technical end economic assistance gives the United States and the Free World an opportunity to obtain primacy over Communist efforts in key economic sectors. The outcome may, however, be strongly influenced by the success with which the Free-World can cope with Communist efforts t) exploit the existence of Southeast Asian export problem; particularly those involving rice. In the period ahead, flexibility of U. S, procedure and rapidity of U, S. action will be increasingly important, if effect ve advantage is to be taken of unexpected and transient opportunities,

is,

5.

Problem of Regional Association, Ovep the long

run,

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small, vuln

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and essentially dependent nations

of Southeast Asia cannot exist 'satisfactorily as free nations without closer associations than now exist. -

NSC 5309

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Declassified per Executive Order J3526, Section 3.3 NND Project Number: NND 63316. By; NWD Date: 201

TOP SECRET

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6.

The Pr ob 1 em of AI i gn ment. To preserve their indepen-:^enathen their internal "stability and protect them-

de;ice, ;

selves against aggression, some countries in Southeast Asia prefer to join regional security arrangements; Some, however, prefer to avoid alignment v;ith other nations. The basic objective of both groups Is to maintain the independence of their countries free of outside interference or dictation, and the independence and vitality of both are important to the United States and to each othe

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i:

POLICY CONCLUSIONS

S.

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7 # The national independence of the mainland Southeast Asian states is -important to the security interests of the United.States. If such independence Is to be preserved, U. policies must seek to build sufficient strength in the area least toiidentify aggression, suppress subversion, prevent Communist political and economic domination, and assist the non-Communist governments to consolidate their domestic positions, U. S. policy should not depend primarily on the degree and nature of Communist activity at any particular time, but should seek to promote these goals within the limits of the economic capacities of the countries concerned and U. S. resources available for the area*

8 C Where a national determination to maintain independence and oppose external aggression is sufficiently manifest, the United States should bo prepared to provide military assistance based upon the missions of the forces as indicated in the ,: Country Courses of Action 11 (Part V, tielow).

9.

w< of aggression against a Southeast Asian

>^><^>'

In the state willing to resist, the provisions of the /UN Charter ox

the

53"TO Treaty should be invoked, but the United States

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not forgo necessary action in behalf of such a state

or states because of the possibility that other allies migno

be loath forces.

to participate or to furnish more than token military

% 10. In the long run, the ability of the non-Communisc governments to attain political, economic and social objectives will be the dominant factor in defeating the Communist attempts to dominate Southeast Asia, The United States should assist the non-Communist states of the area to formulate and execute urograms designed to promote conditions of sound development, to demonstrate that they can achieve growth without reliance • on Communist methods or dependence on the Communist bloc, and to <"/ive their peoples a greater stake in the continued independence of their countries.'

KSC 5609

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By; NWD Date: 2011

TOP SECRET

11. The United States should continue to make clear its own devotion.to the principle of collective security, its belief that regional sepurity arrangements provide maximum protection at minimum- cost for all, and its expectation that a country's decision, to participate in such arrangements is based on its own calculation of its best interests and does not of itself constitute a claim for increased financial aid. Where countries participate, measures to assure adherence are desirablej normally including preferential treatment in the fields' 1 of., economic and military assistance as justified by U. S. strategic objectives. Where new opportunities for affiliation develop they -should be encouraged. The United States should, however, accept the right of each nation to choose its own path to the- future, and should not exert pressure to make active fillies of countries not so inclined.

The

genuine independence

of

s

uch countries from Communism, serves U. S. interests even though they are not formally .aligned with the United States. The United States should accordingly support and assist them so long as they remain determined, to preserve their own independence and are actively pursuing policies to this end,

III. OBJECTIVES

/

" 12. To prevent the countries of Southeast Asia from-passing into or becoming economically dependent upon the Communist bloc; to persuade them that their best interests lie in greater cooperation and stronger affiliations with the rest

of the Free World; and to assist

j. i

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to develop toward

stable, freej representative governments with the will and ability to resist Communist from within and without, and thereby to contribute to the'strengthening of the 'Free World.

xv. rkotonatj nounrtrcs of action*

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13. Support and assist,the countries of the aren on the basis of their will and ability to defend and strengthen their

independence. I

14. Respect each country r s choice of national f^licy for preserving its independence, but make every effort \o demonstrate the advantages of greater cooperation and closer alignment with the Free World, as well as the dangers of alignment with

'one

Communist bloc.

• •

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The following courses of action are not applicable to the State of Singapore at this time: paragraph 13, lU, 16,

-a,

and 32

5809

' 11 ?G

(Revised H/lO/59)

TOP SECRET

Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 2011

*.

TOP SECRET

15. Entourage the countries of Southeast Asia to cooperate closely with each other on a basis of mutual aid and support,, and support indigenous efforts to develop regional associations so long as they do not weaken SEATO or the spirit of resistance to Communism.

16* Participate actively in SEATO 4 and seek to develop both its military and non-military aspects in a manner that will convincingly demonstrate the value of SEATO as a regional association^ the usefulness of which extends beyond deterrence of "Ccrsmunist expansion* Encourage limited participation of n on-Communist,, non-SEATO Asian nations in certain SEATO

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17. Encourage and support the spirit of resistance among ■

the peoples of Southeast Asia to Chinese Communist aggression

as wall as to indigenous Communist insurrection, subversion,

and propaganda.

■

lo. Maintain,, in the general area of the Par East* U. S. forces adequate to exert a deterrent influence against Communist aggression, in conformity with current basic national security policy.

19. Should overt Communist aggression occur in the Southeast Asian treaty are a., invoke the UN Charter or the SEATO Treaty, or both as applicable; and subject to local . request for assistance take necessary military and. any other action to assist any Mainland"Southeast Asian state or copendent territory in the SEATO area willing to re-sist Communist resort to force: Provided, that the taking of military action shall .be subject to prior submission to and approval" by the Congress unless the emergency is deemed by the President to be so great that immediate, action is necessary to sava a vital interest of the United States.

20^ In case of an imminent or actual Communist attempt

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ssiEe control from within, and assuming some manifest local desire for U. S* assistance,, take all feasible measures to thvrart the attempt, \including even military action after appropriate Congressional action"^

21* As appropriate,, assist the police forces in Southeast Asian countries to obtain training and equipment to detect and contain Communist activities.

22 c In order to strengthen the non-Communist governments

the

and to help forestall- their economic dependence

on trie Communist bio

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?p^e'7,\ pary. 2,g-a. Add the following to the end of the S3 .In the framing o? U. S c aid programs to Southeast Asian

■

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countries take into account the" economic and- technical

» assistance being provided by other Free World natlpns and

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, ~oy international institutions^ coordinating with such nations and institutions where appropriate. f?

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TOP SECRET

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a 0 Provide flexible economic and technical assistance as necessary to attain U. S. objectives.

Encourage measures to improve the climate for private investment, both domes-tic and foreign., and to mobilise the maximum investment of U, S. private capital in the area consistent with the prevailing climate.

. cy Encourage United Nations agencies/ other Colombo Plan countries, and other friendly countries to contribute available resources to promote the economic growth of ,Southeast Asia. ■ . ' .

d

__ Encourage the Southeast Asian countries to orient their economies in the direction of the Free World and # to rely primarily on non-Communist markets and sources of supply for trade, technicians, capital development,, and atomic development«

£* In carrying out programs involving disposal of U. S, agricultural surpluses a.broad:

+

(1) Give particular attention to the economic vulnerabilities of the Southeast Asian countries and avoids to the maximum extent practicable, detracting from the ability of the&e countries to market their own exportable produce,

(2) Give particular emphasis to the use of the resources to promote multilateral trade and

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economiLC development.

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_ Promote as appropriate the expansion of trade relationships between the United States and the countries of Southeast Asia,

Take advantage of adverse local reactions to Communist barter agreements with countries in the area' by demonstrating the advantages to these countries of conducting trade on a multilateral commercial basis.

e

23,, Tfeke a-specialj sustained effort to help educate an xpanding number of technically competent, pro-Western civilian and military leaders, working bilaterally, through the United Rations, with the other Colombo Plan countries and with other friendly countries. Stress the development of potential and secondary leadership to support the thin stratum of elite now administering the central governments and bring to their support modern techniques and technology in.public information and organization.

1123

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e.

Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

TOP SECRET

JT?*P

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24, Place increased emphasis on community development urojeets^. educational prpgramSj arid other activities aimed "to influence the welfare anci attitudes of the people at the village level. - ■

standing of Com-r.o.nist alms and techniques.

25, Kola or reduce the number of U. S. officials in each country to a-strict minimum consistent with sound implement-3/bioh of essential programs,, in order to head off an adverse political reaction to the presence of a large number of Americans in relatively privileged positions. . . *

27. Promote increasing Asian Buddhist contact v/ith and knowledge of the Free World, Explore v/ith friendly religious organizations ways of developing Buddhist fraternal associations and identification with Free World religious leaders and movements. - .

28. * Continue activities designed to encourage the overseas Chinese communities in Southeast Aftia (a) to organize snd activate anti-Communist groups and activities within their c?;n communities; (b) to resist the effects of parallel pro-Communist groups and activities; (c) generally,, to increase their orientation toward their local governments and toward the Free World; and (d) consistent v/ith their obligations and primary allegiance to their local governments^ to extend sympathy and support to the Chinese National Government.

" 4

29, Discreetly encourage local governments to work toward assimilation of racial minorities.

zo as Asia.

Implement as appropriate covert operations designed rsist in the achievement of U« S. objectives in Southeast

30

achievement; of U. S« oajt^v east Asian countries.

.32.

In order to promote increased cooperation in the *

w*fl c

area

na to deny the general area of the Mekong River Basin

K r SC 5S09

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■ TO? SECRET

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Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 2011

OFFICE OF JCS PROPOSAL

Page 8- Add new paragraph after paragraph 32* in Section IV (Regional

Courses of Action).

*

Exercise caution to insure that the United States does not become so identified, either in fact or in the eyes of the "world, with particular regimes, individuals or political factions in the countries of the area as to hinder U. S. accommodation to evolutionary changes in the political scene."

REASON : Initially, this paragraph was intended for insertion in the section on Cambodia as guidance for our dealings with Sihanouk. ' At the suggestion of State it now is proposed as regional guidance so as to be applicable to other countries of the area where we may develop

■

similar problems.

1125 •

Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 2011

TOP SECRET

t?

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•**5t influence or domination, assist 7].r>C(T^^v: ont 0 f the Mekong River Basin as

.7?.e c ^ r '"^oo6oeratlon and mutual aid.

as.feasible in a nucleus for

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as

Immediately following par, 32, add, the following

«—s- * •

oax'agraph j

? ^ ; Should any country in" the area cease to demonstrate a will to resist internal Communist subversion and to *

ft

carry out a policy of maintaining its independence,

* .

terminate U„ S*- economic and military assistance programs to such nation,"

Declassified per Executive Order 13526, Section 3.3 NND Project Number; NND 63316. By: NWD Date: 2011

CAMBODIA (Revision of pars, 39-^+2 of NSC 5809,)

39* Seek to increase Cmabodia's respect for and confidence in the United States and the Free World in order to assist in maintaining Cambodia's independence and in curbing its tendency to increased orientation toward the Sino-Soviet Bloc. To this end demonstrate continued friendly U. S. support for Cambodia's independence, understanding of its policy of neutrality and concern for its economic and social progress.

1^0. In shaping particular courses of action in Cambodia, take into account the fact that Prince Sihanouk enjoys widespread popularity, particularly among the rural population and controls all major sources of political power. Devote special efforts toward developing Sihanouk's understanding of U, S. policies arid of the U. S. position in Southeast

Asia, bearing in mind his extreme sensitivity to any suggestion of pressure or slight. I " kl. Since real or fancied threats from neighboring Free World

countries have been a major factor contributing to Cambodia's sense of

«

■

insecurity an 1 its consequent readiness to accept Sino-Soviet Bloc support^ endeavor persistently and firmly to improve Cambodia's relations with these countries, particularly Thailand and Viet Warn. Take every

appropriate occasion to impress on the governments of neighboring countries the importance of repairing their relations with Cambodia

1127

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

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" ' "^2* Seek means effectively to" promote a sense of responsibility on the part of Sihanouk and other Cambodian leaders for exerting sustained effort to create conditions conducive to better relations with neighboring countries and for avoiding contentious and provocative statements € When feasible and.consistent v/ith over-all U. S« interests 3 take steps to prevent provocative actions by any of the countries concerned.

Jt3« Encourage positive cooperation between Cambodia and neighboring countries such as joint participation in the de r

■

velppment of the Lower Mekong River Basin as a nucleus for

• regional cooperation and mutual aid

B

;-\( t*A* Continue to provide modest military aid to enable

*

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A

the Cambodian armed forces to maintain internal security /agrainst' Cc unist subversion/^ and to discourage Cambodia frc

v ;' * < ; ■ jKr~* ■ \t?\

accepting substantial military aid from the Sino-Soviet Bloc,

& Treasury--Budget proposal

■» — »- I. .~w- . s >.*•_.

k5>* Concentrate'Uc S e economic and technical assistance

j primarily in those areas in which increased Communist in-

fluence would entail the greatest threat to Cambodia's

■ •

neutrality and independeiiGe 0

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t

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b t 6u In vicy/ of the relatively strong position still maintained

*

bv Sranca in G&afcodla., seek opportunities for greater mutual ur.*er~ •» . .,

standing and cooperation v/ith the French in the furtherance of b&nmon Free World objectives • \ •-'. /

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

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LAOS (Revision of paras 0 ^3-^9 of NSC 5809)

lf7o Provide military assistance for the development and support of Loa armed forces capable of maintaining internal security /against Communist subversion/* a ^d providing limited initial resistance to external aggression by the Viet Minh /and Communist China/'.## Encourage Laos to formulate and implement a broadly conceived security plan, including both internal and external security, which encompasses the services of all branches of the Royal Government, civil and military.

If8c In the provision of UoSo assistance direct our programs to the promotion of social and economic progress and unification of Laos, thus helping maintain the confidence of the Royal Government in its anti-Communist, pro-Free World "neutrality" D

1*9 # Continue to promote conditions engendering confidence by Lao leaders that the UN Charter, SEATO, and Free World support provide a favorable basis for Lao resistance to Communist pressure and inducements,

and at the same time continue to impress upon the Lao the need for a sense

I

of responsibility and recognition that too drastic actions may have adverse

international implications 0

# Treasury-Budget Proposal*

** Treasury and Budget propose deletion*

lf9A» Encourage the Lao to observe constitutional and legal processes

as providing the soundest basis for the growth and vitality of democratic

institutionsj discourage resort to force in political affairs„

i

per Executive Order 13526, Section 3.3 NND Projecl Number: NND 63316. By: NWD Date: 2011

* * *

, ■ » . _

* ■

* ^9B 0 Encourage and' support cooperation between Laos and otner ■ Southeast Asian countries,, particularly Thailand, V&et-Najn, the Philippines^ Malaya^ and Burma 7 including such joint effort in the

ar

rfci-subversion, economic^ communications, and military fields as is

feasible

49G* Develop greater mutual understanding and cooperation wita

■ «*

the French in the furtherance of common Free World objectives*

Iff}* Strongly support an expanded UN presence and technical assistance in taos 9 and make a special, intensified effort to ex>

&

courage other friendly powers to provide assistance

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TOP SECRET

52o Provide military assistance to Thailand for support 0 f forces sufficient;

a* To maintain internal security

p

b* To present limited initial resistance to external aggression*

I , .. ; c* To make a modest contribution to collective

defense of contiguous SEATO areas*

Continue efforts to persuade Thai officials to eliminate non-MAP supported forces which do not contribute to the above objectives,

53* Encourage and support close bonds between Thailand and Laos and between Thailand and Cambodia* including such political:associationsj economic cooperation* and joint military planning as will serve to draw Laos and Cambodia closer to the Free World without weakening Thailand's position with regard to the Free World*

■VIET NAM

$h* Assist Free Viet Kan to develop a strong, stable and constitutional government to enable*Free Viet Nam to assert an increasingly attractive contrast to conditions in the present Communist zone* * •

55* Work toward the weakening of the Communists in North and South Viet Haia in. order to bring about the eventual peaceful reunification of a free and independent Viet Nam under anti~Communist ..leader ship B

"56* Support the position of the Government of Free Viet Nam that all-Viet Nam elections may take place on3y after it is satisfied that genuinely free elections can be held throughout both zones of Viet Nam, ' (

$? t Assist Free Viet Ham to build up indigenous armed ,forces* including independent logistical and administrate, a services ? which will be capable of assuring internal security and of providing limited initial resistance to attack by the

Viet Minh,

■ ■ J 58* Encourage Vietnamese military planning for defense against external aggression along lines consistent with U* S. planning concepts based upon approved U* s; policy, and discreetly manifest in other ways U, S* interest in

*

NSC 5S09

■ 1131

(Revised V9A r 8)

TOP SECRET

Declassified per Executive Order 13526. Section 3 3 NND Project Number: NND 63316. By: NWD Date: 2011

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0 Treatyj

assisting Free Viet Nam, in accordance with the SEAT to defend itself against external aggression.

VIET i'iAM

Page 12 , par# j3i. « Add the follov/ing to the end of the paragraph*

"In this regard encourage and assist public relations and

public information programs of the government of

Viet Ram directed both internally to the free Vietnamese

■ and externally to north Viet Nam, In thxs effort pri-

oriiy should be given to areas of greatest dissidence.

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particularly in the extreme south."* Page 12 par* $7* Add the following to the end of the paragraph•

.»*•"_ *-"**--

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"Also encourage and assist elements of the Army of

■

Viet Nam to establish and utilize specific anti-subversive guerrilla formations and operations. In the anti-guerrilla campaign encourage the government of Viet Mara to use the Vietnamese Array in a way which v/ill help

l-Ot f%

ith the favor of the local populace in order to obtain

its support for their campaigns^ particularly for in-

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telligence purposes • t, ^;>

# CIA proposal.

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Ir.mediately following par* $$> add the follovdng new

paragraph-

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Encourage and support an improvement in relations

■between Viet Kara and Cambodia."

Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 2011

|

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VI.' SUPPLE HEHTARY STATEMENT OF POLICY

on THE S PECIAL SITUATI ON IN NORT H VIET MAM

| F I ' — ■ ■ ' ■ ■ - i i . . i-l , __ —. | l „ . , . . . . | ■ ■ -

73. Treat the Viet Minh as not constituting a legitimate * government 3 and discourage other non-Communist states from developing or maintaining relations with the Viet Minh regin

7*L Prevent the Viet Minh from expanding their political influence and territorial control in Free Viet Nam and Southeast.Asia, "

75. Deter the Viet Minh from attacking or subverting Free Viet Nam or Laos,

'76. Probe weaknesses of the Viet Minh and exploit them internally and internationally whenever possible.

+

■ 77, Exploit nationalist sentiment v;ithin North Viet Nam' as a means of weakening and disrupting Sino-Soviet .domination,

78. Assist the Government of Viet Nam to undertake programs of political, economic and psychological warfare against Viet Minh Communists.

79. Applyj as necessary to achieve U. S. objectives, restrictions on U. S, exports and shipping and on foreign assets similar to those already in effect for Communist China and North Korea. r

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NSC 5809

(Revised 11/10/59)

1133"

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63310. By: NWD Date: 201 I

SECRET

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OPERATIONS COORDINATING BOARD Washington 25, D. Co

* " , ' May28, 1958

REPORT ON SOUTHEAST ASIA (NSC 56.12/1} . ' ":•

(Aj»p*"Oved by the President September 6, 1956) (Pc/.'iod Covered: From November 6, 1957 through May 28,1950)

\ \ ' ■

N^S 5612/1 was revised on April £ ' and issued as NSC 5809.

L^

A

L REGIONAL

\

.A; SUMMARY EVALUATION . ■ " .-'•.;.

y * 1. . General. Burma and Caxnbodia, showed a more friendly atti-

■ —*■* — » ■ ■ — — ■'■-—

tude toward the United States and the Free World, and Cambodian leaders made eomc attempt to control communist subversion* Thailand's new ^regime re-invigorated the pro-SEATO, anti-communist policies of its 'predecessor g, and Viet«Nam maintained close relationship with the ■ United States* - "' , • ,.'-.*.

On the other hand, as the price for. regaining control of the

i * *

two provinces previously dominated by the Pathet Lao, the Lao Govern-rnent accepted two Pathet Lao loaders in the National Cabinet and as si-.milated some Pa the t Lao troops into the Royal Lao Army* The conservative governing coalition in ne\vly--independsnt-Malaya suffered some political ) setbacks. The communist-supported leftist party did very well in Singa- / pore municipal elections in contrast to the poor showing of moderate and conservative political par tie s 0 ■ "

■ ■ , The short-run economic outlook' in "Southeast Asia, is somewhat

clouded by declining foreign exchange reserves and prospects for lower export earnings resulting from poorer rice crops and lower prices for ovher export commodities* In the long-run better prospects exist* as<- J cuming favorable political developments* because pit (a) the wealth of human, agricultural and raw materials resources of the area and (b) the developing power, communications, irrigation and other basic facilities supported by external financial assistance*

, •* 2, SEATO*. Satisfactory progress continued at the operational level in military and civil aspects; however* the Asian members still scek'an expansion of economic activities* Atomic-cap able weapons were

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

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SECRET

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successfully introduced without adverse psychological reaction in the re- ty

cent "Phiblink" exercise, and a number of military exercises have been • scheduled and approved for the coming year* Standardization of equipment : is being accomplished between military forces of member nations which ,' ; ■ will lead to a.reduction of the technical obstEicles to fuller cooperation

in mutual defense. There were .significant administrative improvements;

political consultation in meetings of the Council Representatives.improved *, in quality and content;■ and.a successful counter-subversion seminar was held

in'Baguio; and a cultural round table, attended by seme non-member govern-'. v> .

merits/.was held in Bangkok* In addition, the United States has committed' .'$2 million for skilled labor training and agreed in principle to assist . "Thailand in the SEATO context to develop university engineering facilities*

k V * * : What is generally considered to have been the most successful

- Council fnpeting to date was held in Manila in March. Among other things, the Council at that time authorized the Secretary General to enter into limite'd contact with other regional defense organizations and agreed to a ' proposal that contact with non-member states be continued and expanded in the coming year,

• - .■■■' .'..*- *.

3. Mekong River Development The four-power Coordinating Com-rnittee established by Thailand, Laos, Cambodia and Vict-Nam to plan the development of the Mekong River basin agreed to set up a system f or. the cooperative collection of basic data en the river ba.sin. In line with our regional objectives the U, S, offered at the time of the recent ECAFE meeting at Kuala .Lumpur to contribute n total of $Z million to establishment j of this system* The offer, which was accepted by the four riparian coun-tries, produced a favorable impact in the ECAFE area* The U. S„ con- . tributionp together with funds offered by the* UN and other friendly govern-

» *

ments, is sufficient to finance the costs for approximately the first year of the development pIan--$2, 5 million—recommended by the Wheeler survey

*

mission.

Imi -•

4. No review of policy is recommended*

B.- MAJOR OPERATING PROBLEMS FACING THE UNITED STATES

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*■ • 5. Obstacl es to Regional Cooperation . - At present more factors obstruct the development of regional cooperation in Asia than facilitate it, The most important ones are nationalistic preoccupation with domestic.

SECRET

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SECRET

' affaire* political antagonist mo and suspicions* and the general lack of .complementary economies* . *" '. ' ;

.V •T • -

- •* '-' •-"' '■'" "v- . ;, ;" While four riparian states are now agreed on the collection of basic data regarding the Lower Mekong River Basin, difficulties will probably arise if the time comes to determine means of developing and utilising power, irrigation, and navigation facilities«

.s The Regional Telecommunications Project has fallen fax.

behind schedule chiefly because of problems with the engineering contractor* A top-level advisor has completed an evaluation of the funda-

* mental plan of the contractor in an attempt to expedite the project.

• * * •

6. Slow Ec onomic Development. Economic develo23mcnt in the; f area is slow because of a shortage of both public arid private capital* and 1* " "• limited basic facilities such as power, communications, and transporta- .

* * . tion, as well as the limited number of trained, skilled personnel. The

resistance of .many Southeast Asia countries to measures which might ,/' ; ' -encourage or assist overseas Chinese and other minority groups, also "- ; ; * ;;■. retards economic and business development. Thecal! of prices for the ■ ■ . basic export commodities of the area, with resultant government revenue -•

losses, may slow economic development.

» • * ■ *

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"."■.■• . .It has been difficult to find appropriate means of encouraging

Free World industrial countries to contribute to the economic development, of Southeast Asia. In the case of Japan, at"present Asia's only important

■ ♦ " industrial country, it is difficult to-determine the extent to which the U*S, should encourage Japanese economic development activity in Southeast Asia. While Japanese proposals of June 1957 for Asian regional financial institutions, to be funded largely by the U.S. and joined by other non-regional participants, were not found practicable by the U.S*, the U.S. continues to recognise the desirability of close economic ties between Japan and Southeast Asia? and has offered to cooperate with Japan and

* * interested Southeast Asia countries on a case-by-case basis.

7„ p ublic Attitudes. Efforts to encourage favorable public attitudes in the area toward collective security pacts and toward the U» and the Free World in general continue to face important obstacles, including: (1) demonstrated growth of Sino-Sovict scientific, military, and economic power; {?,) Asian fear of involvement in nuclear warfare; (3} the appeal of communist coexistence propaganda3 (4) increasing public interest in dome otic f economic, financial and socird problems; (5) doubt that participating in collective defense measures offers more benefits and less disadvantages than neutrality; and (6) national sensitivity which

.-

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Declassified per Executive Order 13526, Section 3*3 NND Project Number: NND 63316. By: NWD Date: 2011

' .* / . ' ■ ' SECRET

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continues in most Southeast Asia countries regarding the presence of" large numbers of U«S, , British and French citisens,

8* SEATO* SEATO has a continuing problem in p5pularisdng the organisation within Asian member countries as well as in. the general treaty area. It is essential that this problem be solved if the leaders of Asian member countries are to succeed in countering domestic criticism of SEATO "mender ship; and if SEATO is to attract new members (notably Malaya). From the position taken by representatives of the Asian members in various SEATO forums, it is clear that they consider membership in SEATO should enable them to obtain preferential treatment in the alloca-

tion of economic assistance.

V

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9. Sino-Sov iet Bloc Eco n omic and Psychological Inroads . A com- i^ bination of fairly widespread acceptance of communist coexistence propaganda ? a desire to profit from communist "largess" and conviction that -communist infiltration is controllable* facilitates communist efforts to promote acceptance of their economic aid programs* In addition* although bloc aid has "boomeranged psychologically in certain instances, notably in Burma and less so in Cambodia* the resistance to bloc aid.is reduced by its reputation for "speed 11 , "easy terms' 1 and ihe apparent absence of "strings 11 . In some instances, U«S. assistance, because of premature commitments or assurances of aid on the one hand and subse-quent delays* apparent inflexibility and conspicuous checks and control procedures on the other, suffers by comparison in these respects* The high political imj xt of communist aid projects emphasises the importance of continuing efforts to maximize the effectiveness of U*S. aid

programs, \ .•..">*"' . .

< While Burma, and Cambodia continue to be the chief bene- l/ . ficiaries of bloc aid* a general offer of assistance to .the underdeveloped Asian countries was made by the Soviet delegate at recent ECAFE meetings in Bangkok and Kuala Lumpur* Also- in axldition to credits of up to five years for the purchase of machinery and equipment* the USSR ?:\z,cr? m z<j " announced it would consider long-term agreements for the purchase of ' ■

basic exports. The USSR has offered a trade agreement to Thailand*

Burma has indicated its intention to use Soviet assistance in the priority construction of a technological institute, a hotel and a hospital, The number of Soviet technicians in Burma is soon expected to increase greatly* 1 Communist China's assistance to Burma was extended in the form of an agreement with Burma for a $4« 2 million loan* Burma continues to be receptive to bloc assistance but is revising its barter agreements with bloc countries to trade on a permissive and cash basis.

J

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Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

* 4 _

So far Cambodia has received Approximately one-quarter of a programmed $22,4 million grant from Communist China and seems satis** fied-with the program, which has received favorable publicity* New buildings for the Cambodian National Parliament will be included in this program. The Chinese Communists have also offered one million riels ($28, 571»at official rate of 35 to 1) to construct a modern building for a 20 kilowatt radio transmitter donated by the Chinese/

* % ■ ■

Thailand has not yet accepted a Soviet offer of a "cobalt

bomb" for hospital use,

10, Economic Aid Program Delays, Much political and psychologic cal credit as well as operational economy and efficiency continue to be lost because of premature commitments and assurances of aid on the one hand and the inordinate X4 ime required for formulation and implementation of our economic and technical assistance programs on the other. Recipient countries continue to complain of delays. This raises serious problems with respect not only to "the assistance programs, but to U.S. relations in the area. In addition* "particularly in uncommitted countries, it # . 'also'materially reduced the attractiveness of U.S. aid as compared wiih co mmuni s t b lo c ai d.

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. . • Commitments for physical construction arc frequently made .before reconnaisance, engineering and cost estimates are available,

• "•. .In view of Vae impact of premature commitments and as stir- ■ jmces of aid, and aid program delays on U,S, relations in the area and on the ability of the U,S, to meet the economic challenge of the communist > # bloc-| increased emphasis will be given to a concentrated! coordinated attack to eliminate these difficulties. State and ICA are giving urgent consideration to these problems with a view to reconciling the limitations imposed on our aid programs by statute, by Congressional relations factors and by uotfmal administrative requirements on the one hand* with the need for obtaining an optimum mixture of economic, political and psychological benefits on the other.

■ , 11, Efforts to Lessen Demands Upon U.S. Resources and Upon

Lccal Economies (NSC Action No, 1599-c), Under this requirement the I>opartmeiit of State in consultation with the Department of Defense was to explore the possibility of arranging conferences with the nations in the* SEA TO area to achieve agreements as to future U.S* aid programs which will be more moderate in their demands upon U.S* resources and the local economies. Under present circumstances, this objective has not been accomplishedo

SECRET

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Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316, By: NWD Date: 2011

SECRET

■ II, BURMA

• j

A. SUMMARY EVALUATION

Hfcte*^^wy^^-fcr» ■ fc ^^ ^ ■ ■■*■■%-*■ f—

121 There has been a significant, if modest improvement in the position of tho U,S» in Burma* and in the attitudes and actions of tho Burmese Government as they-bear on U.S, objectives* However, the Soviet Union and Commmnct China have been i ble to continue their economic activities in Burma, even though, domestically, both communism and Marxist ideology have received a sharp setback. On January 29Prime Minister TSSu, with unanimous approval of the Anti-Fascist Peoples Freedom League (AFPFL) Executive Committee, announced the Government Party f s complete disavowal of Marxism as its guiding political philosophy, •

B. MAJOR OPERATING PR OB EEMS FACING THE UNITED STATES

«■ 1 ... ■ - ■*■ ' fc— T ■ ■' I" ■ » — ■.■— « * . ,• . ... I . I I ,» —.*. « i_ . ... „ .-..,.. ■ » ■ I , , , .-,,,, _ , ^.11 P — »

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13* General^ % We necessarily attempt to accommodate our assistance programs to the political sensitivities and the technical deficiencies of the Burmese Government. However, difficulties in coping \V;.;h Burmese attitudes, which often fail to take account of MSP legislation and ICA procedures, result in protracted and continual delays. While those disagreements thus far have been reconciled amicably> the consequent delays inevitably tend to vitiate the favorable re suits we hope to derive from assistance programs.

4 . As a result there may be unfortunate contrast between our

seeming rigidity and the apparent flexibility of the communist bloc in

its economic and technical aid programs, <

■14. PL 480 Sales, The signing of a new PL 480 Sales Agreement with Burma has been delayed by Burmese Government requests foi* special treatment which though not inconsistent with the law re qui* sd repeated exceptions to established policies,.. The fact,that the Burmese Government is aware that substantial concessions have been made in the PL, 480 agreements with other countries, particularly Poland, ha" com- •'■ plicated these negotiations 0 Final agreement appears to be at haiuU;

f *

4. * I '

15, D eveloprnen t Assistance, An approach by the Burmese for a new Development Assistance Loan in the amount of $75 million-is antici-pated* Difficulties in developing projects on an acceptable basis under the present $25 million loan portend inevitable difficulties in the use of the DLF for financing future Burmese projects»

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Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 201J

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16. Mi litar y Ass is tanc c Program. A tfcl&y which must aj>pcar to

■ "*flie Burmese as inordinate has taken place in the Washington formulation ' "of a specific offer, with regard to the magnitude and terms of the military

assistance which we are committed in principle to make available to the ' Burmese* Legal difficulties encountered here have now been resolved . and Embassy Rangoon 1ms been supplied with negotiating instructions*''

■ *

.• 17, -Police'Assistance Program. Although negotiations on the $10/ million police program loan are still going on, the program'has begun, A way was found for initiating the program promptly by providing tempore ary draw^down against the existing line of credit for the period required to-negotiate and conclude an effective agreement* The Burmese appear . satisfied that the U»S* is demonstrating a timely interest, A survey of requirements hgui been completed and procurement of equipment is under

- way* * . <

• ** » • < ■

.'.*.. 18* U. Kyaw Nye in Vis it, Plans a?:e being drawn up for a visit

to the United States by Deputy Prime Minister U. Kyaw Nye in in the late

"summer or fall of 1958, Our inability to provide official "red carpet"

-' treatment to U* Kyaw Nyein, who has been lavishly entertained in the

•USSR and Communist China, is being at least partially overcome by sup-

* it

■ elemental assistance from the Asia Foundation*

-+*

'.v.-

' m » CAMBODIA; m \ • ' ;

A. SUMMARY EVALUATION • . ' .

+ ■

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19. As a result of sustained efforts of the communist bloc to consolidate advantages it gained in Cambodia in 1956, the internal security situation has .clearly deteriorated. However, there has been evidence re ; -: cently that Prince Sihanouk and other Cambodian leaders arc increasingly aware of the potential dangers of communist activities, and some steps have been taken to control subversion* In the short run, the situation in Cambodia is not alarming, since the population as a whole remains strongly Buddhist, loyal to the monarchy and united under the leadership of Prince Sihanouk,, and it has* not yet been heavily subjected to communist influence* In the long run, there is greater danger that the extension of communist influence may overcome such counter measures as the Cambodians-may be prepared and able to take.

»

There has been a reduction in pro-communist sentiment within the Chinese community in Cambodia- largely because of the Carnbodic Government^ action in the internal security field*

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

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B. MAJOR OPERATING PROBLEMS FACING THE UNITED STATES

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20« Cambodian Neutrality

« •

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a* ' Cambodia's neutrality inhibits it from taking a strong stand in favor of the Free World, and together with the long-standing animosity between Cambodia and its neighbours, prevents close associa .tion with'them in regional organizations.

• .-

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',' - V * b* Cambodian neutrality also limits the opportunities for the

/ . -t . .' United States to work closely with the Cambodian Government. It is f • ■ / . difficult to take measures to encourage Cambodia to meet the dangers - of internal communist subversion without at the same time seeming to \.\ .contravene Cambodian neutrality. We should encourage the Cambodian •* ■ .-' . to orient their policy in a direction more favorable to the West but any

evidence of undue pressure on our part to change the basic policy of • * neutrality could easily cause Cambodia to abandon its .new iirmex posture toward communism, . • ■

s

21* Internal Security. In spite of increasing awareness of the

I

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magnitude of the communist effort in Cambodia* Cambodian leaders have taken far too'few steps to counteract such influence« Implementation of the police training program has progressed satisfactorily* but unification of all Cambodian police services has yet to take place and implementation of an r.greed action program, is hampered by administrative ineffectiveness

0

22. Developme nts Relati ng to Operating Problems. It is possible that the Cambodian developments of the past few weeks, which indicate a new awareness of the communist threat and a determination to oppose it* may require that consideration be given to revision of certain paragraphs in £JSC 5u09 relating to Cambodia. In particular, paragraph 39#. implying a continuing drift toward pro-communist neutrality, and paragraph 41,

-.implying that Cambodia might cease to demonstrate a will to resist inter" nal communist subversion* may need to be replaced by paragraphs calling for U*S. action to promote increased awareness of .the danger of subvert -sion and to provide means to combat that danger., as well as U.S. economic, aid in which continued stress should be put upon specific technical assistance. * "

23. Government Administration Weaknesse s. One of Cambodia 1 -? most urgent needs is for effective civil administration. The ICA program is attempting to strengthen the"most important public services: education, agriculture, health and transportation. In 1957 the government requested U*S* advisory assistance to improve its budget operations, tax administration! and customs collections* One advisor has been recruited; two advisors remain to be recruited.

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IV'. LAOS

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A, SUMMARY EVALUATION

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24* ' Tho formation in November, 1957, of a coalition cabinet ' with Communist Pathet Lao participation, additional communist gains of places in army and civil service, and permission for the Pathot Lao to operate ao a legal political party throughout the country were generally considered a setback for U.S. objectives* On the positive side the Royal Lao Government has gained substantial control of Sam Neua and Phong Saly and the Royal Lao Army now occupies the frontier* posts bordering on China and north Vie£~Nam. U.S. policy was reevaluated, following the Lao Cover nment-Pathet Lao settlement, talcing into account the Prime Minister 1 s declaration in January that the Lao Government was determined to tolerate no subversion and his request for U.S. assistance, particular-' ly for the purpose of winning the crucial May elections. It was decided to continue U.S.. aid as before, but with the clear understanding that provision of such aid depended upon future Lao performance. Our effort, "has ill -fore shifted from the negative one of attempting to prevent disastrous concessions to the Pathet Lao to the positive one of helping the Lao Government carry out the settle men! already readied, with a mini-mum of damage to the Free V/orld position. In this connection, the U.S. carried out an impact program of material and administrative assistance. Solution of the exchange: rate problem through monetary xeiorm has been deferred until after the; recent supplementary elections, new cash transfers of aid dollars meanwhile being placed in an aecount;>blocked by action of the Lao Government until agreement on monetary reform is reached with the U.S. Government. ►" . •

■

B. MAJOR OPERATING PROBLEMS FACING THE UNITED STATES

25. Pathet Laq>» Inasmuch as the Pathet Lao have apparently chosen to concentrate on political means-to achieve their ends, the : ite« gration and demobilization of Pathet Lao forces have taken place relatively smoothly and the Lao National Army has moved into the two former Pathet Lao provinces. The Pathet Lao made an all-out effoi't in the May 4 nationwide election campaign £qr 21 National Assembly seats, utilising well-organized grass-roots cells and demobilized Pathet Lao soldiers as propaganda agents. Firm final results have not yet been announced but . it may safely be assumed that the communists (Neo Lao Hak Xat) have won ,-9 seats and the,Neutralists (Santiphab) have won 4- out of 21 seats at issue ■" in the elections. Since there are 8 leftists in the National Assembly already, a leftist coalition could possibly control about one "third of the seats in the new enlarged Assembly (us many as 21 out of 59 seats). Although Lao officials claim that the strong showing of communist candidates

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does not indicate a choice of conrceaunism by the Lao electorate but six7iply a protect vote against war and corruption and in favor of peace, neutrality and new faces, it is clear that the Neo Lao Hak Xai'has emerged as a well-organized and disciplined legal political party whose aim is to establish communist control of Laos, probably by parliamentary means.

■ The conservative leaders have been badly shaken by the com-

• * *P A m k

munists show-of strength which resulted largely from conservative failure to agree on a minimum consolidated list of candidates* Available figures indicate that conservative candidates received a clear majority of the popular vote but that conservatives got only a minority of the seats at

- stake * It is possible for the conservatives \ if given a little organization and discipline^ and reasonably effective leaderships to form an all-conservative government* Thrry have a majority of .the enlarged As sern-

V bly and they possess the psychological advantage of having received a popular majority in the elections* We are now considering various possibilities relating to a re~appraisal of our effort in Laos*

-.

■-\/ 26* .Monetary Refo rm* Negotiations to achieve a single realistic . .-•* ■ »f : : rate of exchange, without; trade and exchange restrictions were pursued ! \ . ' V 'first in Vientiane and later in Washington during and after the Lao Prime %• " '.'' Minister's visit* Because the U.S. could not guarantee that immediate *

devaluation would not jeopardize conservative chances in the elections* ."*/ ; as unanimously contended by Lao leaders, the U.S 0 agreed that monetary reform should not take place until some time after the recent supplementary elections * The U.S.* insisted^ however^ that new releases of aid dollars be placed in a segregated escrow account pending devaluation and assurances that the ultimate kip value would eventually be deposited into the counterpart fund. The U.S. declined to effect further dollar transfer (project aid was not suspended) owing to the Lao Government's reluctance to accept lenient escrow arrangements offered* Scandalous import )icensing was stopped when negotiations led to acceptance by the Lao . Government of new procedures proposed by the U*S« There have been no abuses since. The Lao Government proposed that U,S, aid dollars .' henceforth be placed in a segregated account in the Lao National Bank •*! ■■ - ' and,not be used until agreement is reached between the U*S C and Laos

on such matters. The U.S. agreed that this device would be acceptable -until negotiations are reopened in June in the hope that this would accom~ * . plish U.S* objectives and also permit the Lao to save face*

* >

# ' "• 27* Lao Nation a l Army T raining. Because the French Military Mission is so reduced in strength and quality that it is unable to fulfill' its responsibilities* fee Lao National Army is not receiving proper train ingi resulting in deterioration of its capabilities and increasing lack of

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discipline. Furthermore, French assessment of the nature and magni-* tude of the communist threat posed against U.S. objectives through the Nco*Lao Hafc Xat.(e:a>Pathet Lao} make it questionable whether or not :V-French military advice and training of the Lao National Army will sexvo \ our best interests* We are now studying the practicability of a new approach to the French Government to bring French policy in Laos into agreement with our own and British views on the nature of the communist throat and to induce a.more cooperative attitude 021 the part of the French representatives in Vientiane, At the same time a U.S. MA AG cannot be established because of the present desire of the UoS, to respect the Geneva Agreement prohibition against the introduction of foreign military . personnel* This means that U.S. financial and material assistance to the •Lao Army is not used to maximum advantage for Laos and the U.S. As an interim solution* consideration is being given to furnishing Filipino civilian trainers to the Lao Army with PEG (Civilian MAAG) assistance. Representations to the French concerning their training responsibilities appear to be an urgent necessity, •

; V. FEDERATION OF MALAYA

^^ ■__■_■ ■ ii m ■ n nTJ 1 ■■ fc I — l _ ■ ■ ■ ■■■■ »" 1 ifc ~ "" * » ~" ■ ' 1 # *~ ■ 1 ' "" -~ * "*" ■ "T* "" * " «

A. SUMMARY EVALUATION

p. m

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28, The government has shown continued determination io fight > :-eomm\mist terrorism and subversion, and has succeeded in maintaining-*

: a strong, stable administration and a considerable degree of inter -racial-harmony. However, recent local election returns indicate some * weaken-

• ing of support for this basically pro-Western government as underlying racial tensions manifest themselves in a drift toward socialist and ultra- . nationalist opposition parties * Tins deterioration of the government's political ci vength, particularly among Chinese and Indian voters supporting neutralis' -oriented parties favoring recognition of Communist China -and the Malay Communist Party, could neutralise the progress made in ; . achieving U,S. objectives in Malaya*

'"B. MAJOR OPERATING PROBLEMS FACING THE UNITED STATES

29, Requests for B eono rnic Assistance. As of April 30 a total of $19 million in applications had been received, by the DLF from the Federation Government, Of the two projects submitted, one is under serious consideration, the deep-water port facilities project for $10.9 million; the other, a teaching hospital, has been rejected*" . % . ;: '

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support are likely "to result in proposals for new aid projects. The IBRD team and ICA advisors arc Assisting the Thai in planning the best utilization of their own resources, v .

■ * ■ , * . » * *

VIII. VIET-NAM

' • •

■ . A. SUMMARY EVALUATION

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depend on foreign aid, the largest part of which goes to support the military establishment. U. S. aid still accounts for approximately 85 percent of imports and two-thirds of the budgetary revenues. Some improvement in the investment climate occurred with the exchange of notes between the United States and Viei-Nam effecting an Investment Guaranty Agreement and with acceptance of the U« S* view that that portion of International Development Corporation capital financed by the U. S. would be available to aid private enterprise only. Howeycr, economic nationalism and excessive government intervention continue to discourage private foreign and domestic investment. Moreover, it is likely the Government of Vietr-Nam will continue to insist that certain larger industrial projects be rovomment-controJlcd, at least in their early years of operations* '

•.-•"■ ■ j

" - 42. Politicp.l and Security Problems of the Diem Government

^ f MM .. H M „ J- , M . _J HI ~ — - ■ ■ ——■——^ ^- — M ■-—^— ■ ■ M m ■ I 'I ■ I —* ■ ■ ■ ' ■ ■ M M ^■■J-^J.fc, ! ^ ■ ^ M ■ ■ ■ 1 ^ ■ _— Ml ■ I -I I. M-M I M PT ■ ■■. !! J U " ■ ■

President N^o Dinh Diem's policy of strict control in the political and economic fields has caused a certain amount of internal dissatisfaction* Should the President's exercise of personal authority develop too far t; ire may bo danger that the resultant frustration of government'officials nught' weaken the united support for his regime which the situation requires. Likewise, the President's stern police measures and his emphasis on internal security have led to some criticism of the government. This emphasis on internal security stems from the recent emergence of the country, the continuation of communist-inspired violence and subversion, and such incidents as the assassination of local officials in rural areas of southern

Viet-Nam. * # . - *

* 40. hi general we are achieving U. £. objectives in Viet-Nam. Relations between Viet-Nam and the Government of the Republic of China Eire improving since the Chinese community in Viet-Nam has accommodated itself to Vietnamese legislation concerning citizenship and certain key

occupations. - ■

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■ - B. MAJOR O PERATING PROBLEMS FA CIN G THE U N ITED STATES

• . • • " •

: 41.. Viet-Nam's Continued Dependence on Foreign Aid. In spite

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of some.evidence of greater economic stability, Viet-Nam continues to

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Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

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.' ■ '. FINANCIAL ANNEX- TO ..REPORT ON KOU.THEAST..ASIA

• . ,(In millions of dollars over $5 million. Up to

$5 million shown in nearest tenth million.)

EXPENDITURES AND DELIVERIES - CERTAINUL S.TCTJVITIES

FY W5B-

Ac bivity

Military Assistance ("ea. footnotes?'"'a/ and —-*— . . »,>.,.» —— —

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Economic Assistance

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Technical Assistance

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Educational Exchange

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Total

FY 1957

112

Est.

22

Est.

Total

50

FY 1959 (Est. as

of .47.5 8....

43

*Ext. through 3/3T758T" MAP Sales of Military Equipment & Services

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' • ; ' SECRET

" VIETNAM PIPELINE ANALYSIS, MUTUAL, SECURITY PROGRAM

(in Millions of Dollars)

. *- '".'■■

Military Assistance — *~

Prior to FY 1957

FY 1957 . .

FY 1958 (est,) •

FY 1959 (est.)

Economic Assistance

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. . Prior to FY 1957

FY 1957 - FY 195C (est.) ■ • FY 1959* (est.)

• * * • •

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. T e chni c al Co opegation .,

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. ; FY 1957 " , ' \ 4,4 ' 1.8 5.4

" -./FY 1958 (ect.) / . '.->..■ 4,2 " , 2.3 , 7.3,

. FY 1939 (est.)' , '" . " " 4.5 . " 3.9 7.9

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a/ Includes value of all grant military assistance, whether on a country, '•' regional or worldwide basis, with the exception of the value of excess stocks,- (In the MAP programming process, country programs include • materiel and equipment, training and dollar costs cf consumables and construction. Regional or worldwide programs include items such as packing, crating, handling and transportation; spare'parts; cost of re habilitating excess stocks; and advanced weapons, as appropriate) b/ Excludes $3] million programmed from stocks excess to U. S. Service ~ -or other MAP requirements for FY 1950-59* °* which $9 million was ■ delivered prior to FY 1957 and $22million is estimated to be delivered "during FY 1957-59. • ' *' * " '

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Revise par*, 5-R (l) Qg HSC *&29/5 aa> follow:

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(*i) Issue a directive to its amecL forces tuat^ in %h& even"c of tmpravokect Cciaaunist armed attack against U_ S. military or nc:a-. ■' military psrsesmel^ air crafty-or vessels outside Ccsxssu&isru

territory* U* S. forces in the area xd.ll ts&e against the Gonsitmist

* „ attacking force during the course of the attack £^3&dato-3£<5

aggressive protective i^easuros^ including if necessary gafl feasible hot irane&iate pursuit of the Ccir^uniat attaching force into hostile

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1. Subject to par, aph£ 2 arid 3 Delc^ in the event of

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SUBJECT': "Hoi Pursuit" and Pursuit UnSsr the Doctrine of

Solf-Preservation

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Legal ASvisar f s office of th&u agu£icy ana It is in &g?ee&32t vrith tha course of action ?$<xxss23g&56& "oy the oth : .; ancl gtf£3£S7i&3C "fasho'v*

It >&£ a^ra^d th&frj as pointed oat in the JC3 ©tufiy- tmclar'corisidara-tics* the terra "Hot Pursuit" has a t:;aaitiana"_ ; fioetriii&l ni:ag in interB&tlonal'3£& vhleh is Kora restidetiv^ than the 3 :nin^ oivio\ :ly intended in the t\;o I^TSG papers* OSss&s $&g also ag^ggiisnt that the tsrsi ruy also bo i\5cd in a non-Xeg&l contont x-jxtli regarfi to activities ana

S2/CU&tXG;2S 5o£L&? t«£^vA fcSQS'J CLA^OCyXy CiiVJ-ES,geO- oy u,i<J O.g^gTvv:.' &QCv 3

Df confusion regarding -ona -cra^ n-sanang ci tna isrja fco« Jrursui^ ^ aaa^ Ivt^ofey ^.g It cosc^il/^3 a p^rtic^lar principle of intersatlonal 1 .v confusion ao to its relationship to other princinl^s^ esp^cinlly tha doctrine of osnf-ciofonna on self-nnesjrvatiun.

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. (2) In addition to the action directed in (l) aoova,.

constitutionally authorized and specifically approved by ths President^ take such additional punitive action as nay ba naeassary and appropriate.

P.

arasrapns

•vo

1 and 2-a of ITSG 560* should ba redrafted

s follows:■

1. Subject to paragraphs 2 and 3 "belov^ in the event of unprovoked Cosmitmist jaWK?3 attack against U a 3. aircraft outside Conssunist territory., those U. 3, aircraft attached or locatad in ths irinediata area of the attack nay take against the Cc^uiiist attacking force during the cour^a of tha attack /Irr^diata ana/ asgrfessive protective ^a^L-c^ ; including if n .^ary and feas5Jble /'"hot purjuitj' i-^adiata pursuit of tha OcSes^-ist attacking force into hostile air spaea.

2.

• *

a.

/^Rot pursuit; \/ ouch pursuit vill not include prolonged rairsuit dee*o into hostile air 3'caca*

in no vay

s/ Sobero Uacnerv Ganeral Counsel

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

Cotober 23; 1!

;S SivOY on HO? gOagHEg MP TO asUXS? y] 3 58 ZKXS5GDBS OF

■—-

.- . 1. The tsm "hot pursuit 11 has "been used In various joint and service papersj as n;all as "by {kEE&saoS&EB in the field ; in connection vith the protective measures United Staves 22ij.ite.ry forces ere authorized to take in self-defense * SSie tera has also "bean used vith reference to its special s~eanin£ under international lew;* The purpose of this paper is to clarify the concepts involved vith a viev to eliminating scaie of the confusion which has arisen fre:a the interch^nenable use of the tera.

2. QSie ter^i "hot pursuit" has a \;ell»establishod and special meaning in international lav* It is reeo^jnized as the right of a coastal State to pursue CC:-3SRCIAL vessels of a foreign State suspected of violating the laws or regulations of the coastal State applicable to its territorial sea or conti{^uor.s zone* Basically.;, it is a peacetime concept not connected vith hostilities or the threat of hostilities by the nilitary forces of a State* Parsuit under this doctrine does not include the right to pursue varships or military aircraft^ or for that matter any tyoe of aircraft* In addition, under -custoM and practice, hot *oursuit Kay be undertaken only under certain limited conditions 0 For e:-: le-5 theVarsued vessel or one of its boats isust "be vithin the territorial sea

mm

or contiguous acne of the coastal State "before pursuit can "begin* Once the pursued ship enters the territorial craters of its flag state or a third state; the ri^ht of hot pursuit ends* Although hot pursuit sasy "be undertaken for a violation of any lav or regulation enacted pursuant to the sovereign authority of the teastal State vh-en tke violation occurs \rithin internal waters or the territorial sea^ it can be undertaken for a violation of only those lavs eovari&g customs^ fiscal*, an^pa/sicn^ or sanitary natters vhen the violation occurs within the contiguous sone«

3. In marked contrast^ the right of parsuit under the doctrine of self~preserration or self-defense is a avaeh broader concept; not dependent on the territorial sea or contiguous ^one*. International law recognizes the right of a State to tahe v:hav -ar r'leasires aire necessary

in tii^e of peace nay repel or resist any hos'cxle acu couriur^a or threatened against it

lorej

■s *r*\ XT--'z* <-z- • ' r\ m '* fi^v^Tii 1 *!

£he ripit to

repel and resist includes T, the ri^ht of pursuit 11 wz&gs considered feasible and necessary to ensure the safety of threatened forces or territory* In this connection, a hostile act has "c^d. defined in varic instructions as l e:ay act vhieh involves a clear and present ganger to the security o'Z the United States or its forces,- territory, possessions,

A,

or territory under the United States administration*" vhat nay constitute hostile acts are:

So:^ exssralea of

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

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guns; rockets, torp\dc*es, or other irenpsas at any ;caterhorne; air, or ground target other thSB reec^ni^ed Papons raftgaa, end

h* Overt and covert actions "by naval or air forces that place in o^opravy cr^ft^ installations* cr personnel of the Uhi\:ed States.

As to the "right of poateiilt 11 incident to repelling a hostile aetj instructions provide that craft or subversive units of a Stkta ccaa.ittins hostile acts i:hxch are sporadic^ isolated or snail scale in nature should he counterattacked irn^aiately by authorised nsans availrihle to

craft* This includes purauit as feasible and necessary to ensure tlis safety of United States forces or territory* Instructions also provide .that United States forces shall not conduct prolonged pursuit deep into ■ hostile areas or neutral territory p nor shall thay deliberately and

As is readily apparent., there exists a clear distinction set een this concept and the concept discussion in narearanh 2 e

k* In vie-7 of the cTcova and in order to Ein&aize confusion, the term "not pursuit" should he reserved to express the precise eirev stance as visualised under its reeo^i^sd scssatSng in iute:;natisanl lav* the # tera "defensive paa*sult u should he used in connection uith the ri^ht of pursuit under the doctrine of a^lf-preservaticn.

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OPERATIONS COORDINATING BOARD

V/a«hittgtpa 25, D f C»

•January 7„ 1959

"• • ■ REPORT ON SOUTHEAST ASIA (NSC 5G09)

(Approved by the President, April ?,, 1950) (Period Covered: From May 23, 1958 through Januasry 7„

959}

I. REGIONAL

A,' SUMMARY EVALUATION

LI General

■ * . - aV Progress was irregular in assisting the countries in

Southeast Asia to develop toward stable, free representative governments \yith the will and ability to resist communism. The danger that any of them may pass into the communist orbit varies from country to country, Thailand, Vict-Nam and the Federation of Malaya maintained an anti-communist position* A drift toward political confusion in Burma was * interrupted by General Ne Y/in f s accession to the premiership and his immediate stand against communism. The Lao Gqvernm it withstood neutralist*and .communist efforts to overthrow it, eliminated communists from cabinet positions mid took initial steps toward countering communist political and subversive progress in the countryside* Its prospects of successfully Yarding off communist subversion and achieving stability have improved considerably since the low point reached in the May elections, | but genuine non-communist unity has riot yet been achieved* -Cambodia, while maintaining its neutral position., made a swing to the left in recog** nizing Cc lunist China and then Prince Sihanouk tried to balance this move to. some extent with a visit to the United State s? In Singapore thu moderate governing Labor Front failed to improve its position. In the , future it may be seriously threatened by the extreme leftist People 4 9 A tion .

Party which has shown increased evidence of popular support* * .

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V - - . b« Slight progress was made ih a second objective of per suading the countries that their best interests lie in greater-cooperation &nd stronger affiliations with the rest of the,.£rec worlds Under SEATO •satisfactory progress continued on both the military and civilian sides of the organisation* The Military Planning Office in Bangkok developed a, \ comprehensive plan for combined SEATO military exercises in FY 1959* ': ; Informal political consultation improved and was characterised by the active participation, of all of the member© f Particularly note'v/brthy was the improvement in $ho materia! produced by the Public Relations Office^

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The Asian members continued to seek an expansion in economic activities under. SEATO, and the U« S 9 accordingly committed $2* 3 million for --.skilled labor training and $425, 000 to assist Thailand in establishing a ' / SEATO Graduate School of Engineering,, A moat successful Council meeting .was held in Manila in March which authorised the Secretary General to •enter into limited contact with other regional defense organisations and agreed to a proposal that contact with non^membor states be continued and expanded* ■ • .

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Some progress was made in developing regional projects Agreements were signed in June with Thailand, Viet-Nam and Laos to provide $27 million of U* S* funds toward the cost of a regional telecommunications system. Funds were also tentatively earmarked for the possible inclusion of Cambodia* A mild expression of interest by Burma for participation in the project has been explored, and Burmese participa ticm seems unlikely in the near future* ICA has appointed the prime engi Steering contractor for the project* A second regional project relating to .

. .English language teaching has fallen behind schedule because of problems in obtaining the participating countries 1 understanding of the project and in

. drawing up the necescary documentation, ". . /

There have been two main themes in Southeast Asian

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attitudes toward the Taiwan Strait crisis P The initial note of fear that the whole area might be involved in war was replaced, to a large extent, by satisfaction that the U« S* did not back down on this isc-uz.*

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c B Progress in preventing Southeast Asian countries from becoming economically dependent upon the communist bloc varies from country to country* Seemingly generous trade and aid offers from communist bloc countries have proved tempting to some Southeast Asian nations*, t Burma and Cambodia have been most vulnerable In Singapore and the ' Federation of Malaya the Chinese Communists, for instance* -operate through banking and trading interests * The Federation is taking steps to reduce ■the influence of the Communist Bank of China* In Thailand, the volum- of imports from Communist China, which is small but increasing, has important propaganda value to tho communists 0 Laos has so far resisted Chinese Communist'trade and aid offers* Even assuming favorable political developments,, many uncertainties exist for the economic development of Sont' ea&t Asia* Some obvious weaknesses include limited understanding by government and other leaders of the elements essential to economic development aijd mobilization of capital, both domestic and foreign, lack of managerial and technical experience, lack of diversity in export commodities and vulnerability to price fluctuations for these commodities* Some apprehension exists regarding the possibility of obtaining reasonable prices for the favorable rice crops now expected ir\ the area, particularly Burma*

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2 f No review of policy is recommended

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themselves have not been sufficient to effect a rate of growth satisfactory to these underdeveloped countries'whieh tend incrca/singly to compare their national economic progress with that claimed by communist controlled Asian * countries* The urgency of the problem is emphasized by. the developing communist economic offensive* From the U, S* standpoint^ dissettisfaction '-' " is particularly important in these countries s which have come to expect

. ,-Athat 'their alignment witli^the free world will bring them the external ; •

..-• ^"assistance needed for more rapid economic development* !

: - . . -. Status of U* S», Actions: Considerable progress has been made.

during' this period in defining policies and the "broad approaches which the •United States will employ in increasing our effectiveness in assisting these countries to achieve a satisfactory rate of development* These policies and approaches were summarized in the President's recent speech to the Colombo Plan Conference in Seattle and are applicable to all underdeveloped areas* including Southeast Asia* The President presented a program addressed to the following major requirements for economic growth:

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expanded international trade . ..,.■-, '

technical skills

private investment " m . .

normal bankable loans , * • . * /..

financing to cover other sound projects which will afford the borrower flexibility regarding terms of repayment*

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, * < . Action to meet some of the requirements under each of these

.points is receiving considerable emphasis in present programs*' Considcra** tion is being given to increasing the emphasis on other elements not yet -adequately developed* The President has created the Draper Committee to consider, among other things, the impact of our military assistance programs on those related portions and objectives of the mutual security effort which are directed primarily at the economic betterment and growth of the free world and to appraise the relative emphasis which should be given to military and economic prcgrams s particularly in the less developed areas* .Certain other major problems involved in carrying out current programs are also under study by such groups as the Straus Study Group and the World Economic Practices Committee* "

The problem of economic development as it relates to South-east Asia reflects the need for clarification of U« S, basic policy in order to.determine the objectives? conditional and time period which should govern U c S« economic assistance for this area* The attention of the NSC io invited to this pressing problem in the context of NSC 5810/1*

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" \ 5** Public Attitudes Toward the U,^S<.- Effects (o encourage . : \

favorable public "attitudes in the area toward collective security pacts and -' toward the U* S* and the free world in genera,! continue to face important, " ■•

obstacles* including; (I) demonstrated growth of Sinb**Soviet scientific ■ " j military and economic power; (2) Apian fear of involvement in nuclear warfare; (3) the appeal of communist coexistence propaganda; (4) increase Sng public interest in domestic economic* financial and social problems; (5} doubt that participating in collective defence measures offers more benefits and lees disadvantages than neutrality; and (6) national sensitivity which continues in moot Southeast Asian countries regarding the presence of large numbers of foreign citizens, * \

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6, Sin fv-Soviet Bloc Economic an d Ps ychological Inroads g A com

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. bination of fairly widespread acceptance of Communist coexistence propa* ganda, a desire to profit from conim^Jnist "largess" and conviction that communist infiltration is controllable; facilitates communist efforts to promote acceptance of their economic aid programs* Resistance to bloc aid. is reduced by its reputation for 1 'speed/Voasy terms" .and the apparent absence of "strings"* In some instances, U© S* assistance suffers by com* parinon iu these N rcsp0cts*

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Burma and- Cambodia continued to be the chief beneficiaries of • bloc aid* Howcvcr f the general offer of assistance to the underdeveloped Asian countries made by the Soviet delegate at ECAF12 meetings in Bangkok and ICuola* Lumpur early this year has not been followed up« Impressive progress has been made in implementing Soviet assistance projects in Burma, which include, a technological institute* a .hotel* a hospital and, tech-' nical assistance iu agricultural projects* Under General He Y/rn^ Burma in ' likely to be less receptive to bloc assistance* Barter agsreeasoents with bloc ' countries have already been revised to provide for trade oi:i a, periTJ.Gs5.ve

and case basis** The USSR is making progress on the SOO^bed hospital it is "giving' 1 Cambodiaj la connection with Cambcdia's extension of diplomatic . recognition to Comfnunint China in July 1953 p the Jattotf has offered to in**. crcac-o It<' p>:o5ir!StiVincd.t:!4 *& $22*4 milK/mby {&& e^atealexft ri about " '

£f>* 6 million,

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States "of Uo S. Actions: Some of the obstacles outlined above involve the U« S» world position in its entirety said require action beyond the scope of the information program alone. We expect that these" obstacles will continue to be a serious problem in gur efforts to present U* S* policies and programs to the leaders of Southeast Asia* Efforts.continue to be made* however, to provide information and.public relations support for U« S, political^ economic and military policies and programs in order to achieve more favorable public attitudes

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Cheap cotton textiles and small manufactures from Commu». nist China appeared in greater quantities during the past year in many Southeast Asian markets© This sharp competition has mainly affected exports from Japan and India* but also* in some instances* the production of local textile mills. ' ■'

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Status of U. S. Actions: With a vie / to offsetting the high political impact of communist aid projects* the U. S. continued to publicise the more dramatic accomplishments of U. S. aid programs, . In this connection cuch a program as PL 480 assistance in the form of raw cotton . 'for processing in third countries was one means of curbing further Chinese Communist inroads into the textile market. A supporting factor in offsetting communist aid projects is that remittances from overseas Chinese, to relatives on the mainland have decreased markedly since the establishment of people's communes,, From August to October* remittances' .through the Kong Kong branch of the Bank of China reportedly dropped . 40 percent to the lowest volume since 1955* and a similar decrease is

reported from Singapore. I?art of this reduction is attributed by some to the development of communes on the mainland*' . .♦ "

7. Economic Aid Program Delays. Despite recent improvements* the impact of aid program delays on U. S. relations in the area and on the

-■ ability of the U. S. to meet the economic challenge of the communist bloc requires continued attention and emphasis at high levels within State and

M * ICA on eliminating these difficulties. Specifically* project apptfGvalpro-cedtircs* contracting and procurement still need faster handling. Personnel Selection* though greatly improved* requires continuing attention.

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Status'of Uc S 0 Actions: Substantially faster program approval have occurred this year under new programming procedures. Progress has also been made in the initiation of corrective measures to reduce delays in implementing econoviic aid activities. Several of these improvements stem from action by the special committee recently established under the ICA Director. .• .' " .

* . r . The problem of delays has been made in ore acute in the past

by premature commitments and assurances of aid. New legislation e *ec« tive this year prohibits obligation of any economic assistance funds for projects costing over $100,000 and requiring substantive technical or financial planning until necessary engineering* financial or other plans are completed and a reasonably firm cost estimate made. On the other hand* the new legislation will also tend to increase the amount o? time required between formulation and initiation of certain projects.

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G 0 Political I nstab ility v Political instability is a potential problem in all the countries of the area* owing to the relatively narrow base upon

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which their political frameworks rest; and the iinportance of the unpredictable persona! factor in national politico* Thus the removal of the prin« cipal leader, by whatever rc3an3 s or changes in attitude of the leader b 0 can have grave repercussions in many of the countries*

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Statue of U« Sc

Actions: Indicated, where applicable, under

individual country headings*

9* Problem of Overseas Internal Security Program. The Overscan Internal Security Program in Southeast Asia, constitutes part of a larger operating problem on a world-wide basis on which policy guidance is needed* On December 8, 1958, the President approved a National Security Council action relating to certain policy issues in connection with the Mutual Security Program which: ^

Requested the Operations Coordinating Board to review the Overseas Internal Security Programs (OIS?) with respect to: (1) The " * validity of the policy stated in the following portions of the basic

national security policy, reporting the results of this review to the • _ * Council: to the extent possible without sacrifice of U* S v security, - , the United States should seek to reduce requirements for military assistance by encouraging selected recipient nations (principally non~ European) *♦#"#** (b) to emphasize police and constabulary type [■ forces for internal security purposes in lieu of largo indigenous mili*» tary establishments* (2) Certain operational matters raised in the

Status Report on the Mutual Security Program, «

'" Status of Uo Sc Actions: The OCR is currently seized with the above problem*

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III, CAMBODIA

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A. SUMMARY EVALUATION

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14> Recent developments relate particularly to a U# S 0 course of action to reverse the drift toward pro-communist neutrality and to assist * • where possible in a solution of the Cambodia-Thailand border problem

and in fostering go6d relations between Cambodia and Viet-Nam e Cambodia 1 0 .neutral position swung to the left with the recognition of Communist China* Sihanouk's subsequent visit to the United States may have restored, some-what, better balance to Cambodia's neutrality but there has been a net loss ■ 'to the free world's position in Cambodia* The deterioration of Cambodia's .. relations with Viet-Nam and Thailand (the most important international ■ problems in Cambodian eyes) exacerbated the problem of inducing Cam-' ' -bodia to take adequate counter measures against-the communist danger*

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15. Cambodian Neutrality* In view of the Cambodian definition of neutrality as requiring oscillation to the right and the left in order to , balance international pressures and influences, we expect some Carnkodian actions to be contrary to our interests, and some to be favorable to us* Thus Sihanouk's reaction to his visit in the U* S* may presage at least a brief period mora favorable to the U* S* '

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Status of IT* S» Actions* The U. S» is continuing it;! assist-

ance programs as long as Cambodia demonstrates a will to maintain its

independence. U* S« influence continues to be discreetly applied in the

.hope that the Cambodian Government will be more receptive of U e So views*

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16* Relations vrVh Viet-Nam and Thailand* Cambodia's dispute

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with its neighbors are a m\ior obstacle to regional cooperation- deter the focussing; of Cambodian atceation on communist dangers, and inhibit the favorable exercise of U* S« influence in Cambodiabecau.sc of the identi-fication of Viet-Nam and Thailand as U 0 S« allies,,

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; ' Status of U ? B 9 A c tion s : We continue to urge settlement.of ,

these disputes through p££.e*ttdl negotiations, but have avoided involvement as mediator because of the risk of alienating one side or the other and our doubt that any of the parties genuinely desire a settlement other than on its own terms.

17* Subversion* The Cambodian Government is handicapped in

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dealing with the problem of subversion by its over-confident belief that

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it is aware of the existing dangers arid can cope with them* A danger exists that by expanding its contacts with Communist China and Communist North Viet-Narn it will permit subversion ospecially of the Vietnamese and Chinese communities to a point beyond its control*

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Stat vis of U« S e Actions: Advantage is taken of whatever skepticism Sihanouk may have regarding the assurances he. received from Chineee Communist leaders. Efforts are being continued to try to bring about an improvement h\ the preponderantly pro-communist press and to

implement the police program* ." .

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18. Reduction, of Informational Outlets. During the five-month period preceding Prince.Sihanouk's recent visit to the United States! placement of USIS preo3 material and other non^USIS originated material which supported U. S* interests dropped char ply while press usage of prp-»Commu*» hist material increased correspondingly. The decline in the usage of U« S, material won Caused by the Ministry of Information's prejudicial treatment of the U. S* in its official press service* by government;, 1 closure of several newspapers which had'formerly been receptive to USIS approaches and by the refusal of others to accept USIS output, hi view of the apparent coin munist influence in the Ministry of Information, USIS activities in other medio could be seriously affected by one-sided administration of the government 1 ? recently promulgated, communique on propaganda, activities

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Status of II* S. Actions: Special efforts have been made, with .come success, to persuade the Cambodian Government, particularly the Ministry of Information, to apply restrictions upon ideological propaganda equally to pro-communist and free world information activities* Since Prince .Sihanouk's visit to the United State b 9 the Ministry of Information has taken steps to decrease pro-communist propaganda. VThether or not this represents a permanent change in emphasis remains to bo seen*

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A. SUMMARY -evaluation ' -'.-.■.

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19, Recent developments related particularly to the U, So course of action to strengthen the determination of the Royal Government to resist subversion and to maintain i^ s independence. The Phoui Sananikone Government, by announcing on October 10 its decision to undertake monetary reform, faced the first test of its ability to survive with unaccustomed . firmness and self-confidence* Subsequently, it foiled an attempt by communists* neutralists and certain disgruntled.elements of the Rally of the Lao People to bring * £ down by a no confidence vote m the National Assembly. The government emerged from this first test with increased authority and in a stronger position to proceed with the establishment of genuine non*-- . communist political unity and the development of a grass roots organization. Its prospects of successfully warding off communist subversion and achieve ing stability have improved considerably since the low.point reached in the May elections, but genuine non-communist unity has not yet been

achieved

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20* Implementation of Monet: Reform Decision* Maintenance of monetary stability in Laos will continue to be a problem of major U, So , concern, The exchange of notes and protocol of September 30, 1958, con* Stituting agreement on monetary reform,provided for periodic discussions between U« S* and Lao representatives to review economic developments ■ and to consider measures which appear to be necessary to maintain a reali tic rate of exchange for the Lao currency* This will involve constant TL S vigilance and resistance to inflationary policies and proposals*

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qtions: U. S* officials Continue to exercise

vigilance in order to resist any Lao inflationary policies

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21, Planning for General Elections: The Lao Government is

expecting to hold general elections for the National Assembly, probably in

December 1959* The outcome of the elections may be of crucial importance

in determining the future international alignment of Laos* particularly hi

its relations Vvdth the. United State So % ■ ■ "■ . ■

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Status of U % S« Actions: V7c are discussing" with the Country-Team at Vientiane a ■ Country .Team plan for major U; S. . ■

effort to bring about a favorable outcome in the forthcoming general elections* The planning and execution of this effort will involve at least State, ICA, Defense, VSIA and probably other agencies* " The Errbassy has

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submitted, a preliminary plan of action, parts o£ which are already being carried out, . *

22, Lao National Army Training* French representatives in Laoc ha.vc been reluctant to accept U* S, and British views on the nature of the cormrmnict threat in Laos and on the need for training of the Lao National Army by qualified persons other than the French, , .

Status of U 0 'So Actions: Much progress has been made in

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bringing French policy in Laoc iiito agreement with out own and British viows on the nature of the communist threat in Laoc, especially since last Mayo Furthermore*" the French have agreed to accept Filipino civilian traincro for the Lao ax*my # and ntepo aro being taken to strengthen the PEO by the ascigmncat of regular- military officers in civilian clothing.

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wVlII," -VIETNAM.

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•■•' .A. .SUMMARY EVALUATION . . •

"» * * 32* Developments related particularly to a U* S* course o£ action

■ « ■' to assist Free Viet»Nam to develop-a strong* stable and constitutional

government which would*work toward the weakening of the communists in both North and South Vi.et-Nam. President Diem remained firmly in control despite some political dissatisfaction with his government* As a strongly committed anti** communist country, Vict-*Nam displayed a serious concern about developments in Laos, Garnbodia's recognition of Communist China/ " and the U* S* position in the Taiwan Straits* The communists and dissi~

dents continued their campaign of assassinations* especially of officials in * rural areas and carried out attacks aimed at disrupting Viet-Nam f s eco~ nomic progress* Although the government gave increasing attention to ' : ;j ', .development of the economy, such development continued to be inhibited by almost pre-emptive mllita.ry requirements which utilized a substantial » . portion of Viet-Nam f s total resources* including U v S* aid« " At the same • time, communist North Viet-Natn continued to exploit for political ahd % ...

'psychological purposes its own reportedly rapid economic development*

B » MAJ OR O PERATING PROBLEMS FACING THE UNITED S TATES

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33* Diem'c Internal Political Position; Diem increased his travels

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throughout the country for the purpose of popularising .his regime* ing accomplishments of the government in the economic and social fields should also have beneficial political results. Nevertheless, the .failure of the government to fully rally certain elements of the middle class, the intellectuals and former officials to its support, the frustration and rest-lessnesG of some of the present officials, and some discontent fax the army-are source a of political weakness* This dissatisfaction is caused primarily by the authorttarian and pervasive political controls of the Ngo family and its associatec 0

Status of U. S» Actions: The desirability of liberalizing po

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• litical and ftdniinxstrative controls is brought to the attention of the Vi< * namese GoVeiwneftl? when considered appropriate by the U« So. Ambassador^ Possible Unas of U«. S, action are greatly limited due" to the extreme sensi-* .tivity of. Vietnamese loaders on this subject,

34, Internal Security It has become increasingly clear that" the communist/), 7xo longer expectant that Free Viet»N&m will fall-to their control through peaceful methods, are executing a carefully planned can>paign of violence aimed at irn^prmiaing the stability of £he Diem Government*

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Their concentration of activities in rural areas where communications and terrain make it difficult for the government to cope with thorn recalls the tactics used against the French during the Indochina War, . Assassinations, particularly of officials in rural areas, continue at an alarming rate of about fifteen to thirty-five a month* Attacks on rubber plantations and reported communist plann to break up the land development, land reform and . agricultural credit programs indicate deliberate efforts to interfere with Viot-Nam'a economic programs.

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Status of Up S« Actions: After a long period of negotiation, President Ngo Dinh Diem has now agreed to place the Civil Guard under the .. 'Minister of Interior. The Embassy and the Government of Viet-Nam have reached an understanding on a program to be presented to Washington for (raining arid equipping the Civil Guard to enable it to cope with the situation described above* The program, if approved, would be for the training and equipping of only about 32, 000 of the Civil Guard and not the total current force of 48,000* A major question is whether this situation requires an improvement in the Civil Guard, or whether other existing Vietnamese security forces, including the Army, can adequately deal with the situation. This question is being discussed by the agencies concerned but agreement Han not yet been reached* .

35 % Economic Development, Economic development, though pro-grossing, is still at a rate below that which is politically necessary to enable Free Viet~Nam to compete successfully with the communist regime in North ; Viet-Nam. The rate of development is also below what is politically desirable in order to enable Viet-Nam ultimately to reduce-its heavy dependence upon external assistance. This problem is further exacerbated at the present time because demands on available resources to meet the communist mill* tary and subversive threat are rising. It appears doubtful, therefore, whether our political objectives can be achieved to the degree desired,

Status of U. S* Actions: Means of mobilising additional Vict-* \

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namecc resources for development are under study by the Vietnamese Government. Defense support aid available for economic; development wa reduced by $40 million in FY 1958 and further reduced by $ 1 5-20 million in FY 1959* Vietnamese access to the Development Loan Fund {which is expected as soon as project engineering studies are complete) may offset • .the FY, .1959 reduction but will probably not bring total aid available for development back.to. the FY 1957 level.

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.- ; "■- " The Embassy has been a'oked to reexamine Vietnam's military and civilian budgets for CY 1959 to determine what items, if aiiyi' might be postponed for funding until late U 6 S*. FY 1959 when addi-; tional resources might bocomo available!? or, in view of the lag between the calendar and fiscal years* until U* *S* FY I960 when they might be ♦considered t&i- priority financing from FY I960 aid funded .This review enabled come reduction isx the 1959 military budget* but itio ctlll $3 million highoi 1 than the 1958 budget* \

.'.

NOTE: The following NIEs are applicable to Southeast Asia:

' NIE 64*58* The Federation of Malaya, Jan. 14, 1958 NIE 62*58* Tha0and, Aug. 19, 1958,

NIE 63»56^ Probable Developments in North and South Viet^Nam . ..' : Through Mid-1957, July IV, : 1956 4 ^ /

• '" NIE 63; 2-57 # "' The Prospects for North Vict-Nam, May 14, 1957."^ Nil:- 6l*'£>6j, Probable Developments in Burma* Api'il 10, 1956 e SNIE 100«*12*58j Probable Developments, in the Taiwan Str'a'it • ' \ . Crisis, October 28, 1958 0 ," . •. " |

. ' NIE I3t»2*57i Communist China 1 © Role in Non-Coninvdnict '

" \ Asia* December 3 f . 1957 e "

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Attachments:

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Annex A * Additional Major Developments*

Anne;: B *• CIA Intelligence Annex, dated December JO/ 195&

Financial Annex &ad Pipeline Analyses*

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>:.

.'*'"'■. ANNEX B

• '■.-■, ■■'■ ' ' "" * December 18, 1958

SINO-SQVIET BLOC ACTIVITIES IN MAINLAND SOUTHEAST ASIA

Sino-Soviet Bloc Activities in Mainland Southeast Asia* (Prepared by CIA without interagency coordination as an Informed.document for use by the OCB Working Group and as background for the information of

y the^-OCB and the NSC) -

* * ,*

: * 40. General Bloc Policy: The Sino-Soviet bloc is actively working to encourageneutx'&Hsm in Southeast Asiai- to destroy the Southeast Asia Treaty-Organization/ and to encourage the creation of a group of independent* ' ^ [

nationalist anti-Western entities which might ultimately come under close ;ino-Soviet, influence. •

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41. Bloc policy has been flexible and opportunistic, adjusting itself to the degree of anti-communism evident in each state* Peiping and Moscow have avoided pressing too urgently and have sought to influence by example the states in which conditions have been most favorable to them* Thus in . \

.Cambodia and in. Burma"-at least up to the change in governments who re !

bloc activity has been most pronounced, Moscow and Peiping have attempted to be circumspect and have tried to fulfill economic aid agreements smoothly and satisfactorily. • ■ ■ , : -

i

42. Communist China and the USSR for the most part appear to have _ '

reserved a judgment for the present on developments potentially adverse to them in Burma ; Laos, and Malaya, The bloc continues to stand on-a pro** . jessed plank of noninterference in the iraternal affairs of other states embodied in the "Five Principles" enunciated by Chou En-lai and Nehru in 1954* Chou ;

• repeated his^advice" to Cambodia's Chinese to "refrain from taking part ni.-'.political activities" during the August visit of Cambodia's Prinze Sihanouk ' \ . I

to Peiping* « .; m ,

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43. -The immediate aim of local Communist parties is two~fold»*>to •achieve legality and eventually to turn their governments* policies into neu-

1 tralist channels* The USSR and Communist China complement that aim by i

! discreet ancl frequent offers of "disinterested" economic aid and wider . ..

cultural relations. . . ;

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44. Diplomatic Acti vity, Repeated bloc initiatives to expand diplomatic representation met with success in Cambodia but not in Laos. Cambodia, : .' which already has resident missions from the USSR and Czechoslovakia, " . recognised Communist China in July and ambassadors have been exchanged* This is a significant diplomatic victory for Peiping in Southeast Asia and \ ill considerably raise Communist China's prestige among the Overseas Chinese ' ■ ■

- ,.' In the area, Malayan Prime Minister Abdul Rahman continues his policy of* *

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By; NWD Date: 2011

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Refusing any formal relations with the bloc until the ten year Communist rebellion in Malaya is ended, 4

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■ ' 45. Burma has the broadest bloc representation* having relations with the USSR, Communist China* Poland, Chechoslovakia, Rumania, and

Mongolia* In Thailand only the USSR maintains a mission whiph, with come 60 officials, is considerably overstaffed in terms of the work at hand. Except for some 25 Polish officials on the international Control Commission^ there

a-eno-bloc officials in South Viet-Nam*

■ -46r Eco nomic A ctivity: Malaya, with its large Chinese population, has . >een a focal point of Communist China's commercial drive in Southeast Asia* .

Peiping is competing with Japan and Kong Kong and has intensified its trade

promotion activities in Singapore since April* A wide variety of new Chinese,

*onim6dities are appearing at prices slashed 10*>20 percent below those of

normal suppliers. The "effectiveness of this campaign is reflected in a 40 ■ "••••• >

Percent risp pi the value of Chinese Communist goods imported during the irst seve,n'months of 1958 over the comparable period in 1957* Malaya's tot .exports to the bloc from December 1957 through May 1958 were about $43 million* Compared with the first half of 1957, exports to the bloc as a vholc increased during the December-May period by .42 percent and imports declined 5 percent*- Communist China was once again the principal bloc purchaser, :The marked increase in exports was caused by a doubling of -ubber exports to 75, 800 long tons —15 percent of Malaya's total rubber

sports in the first half of 1958 c . ' •

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47* China's drive for economic influence in Malay a, may* however, be | jeopardized by recent Peiping threats of trade sanctions against Malaya and Singapore in retaliation for anti-Peiping moves by the Federation governv ment. Even if trade is only temporarily affected* Peiping f s actions.have caused sharply critical comment in-the Federation and have bolstered the, alliance government's determination to curtail Chinese Communist economic activities* •.-,.."

. 48,' Cambodia made its first import allocations in April under trade agreements with the USSR;, Czechoslovakia and Communist China. The value of export licenses issued was much lower than the level set for imports* However, the allocations totaled about $2, 600, 000 and, if actually used, would raise imports from the bloc in 1958 to at least 10 percent of Cambodians planned imports, exclusive of those under aid programs^

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49» The level of bloc trade with Thailand continues to be less than one

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percent of total trade because of the relatively satisfactory economic con*» ditions in Thailand, its pro-wost alignment* and extensive American aid*, ■ Thailand refused Soviet formal trade overtures in March, but did lift its

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embargo on rubber exports to Communist China and North Korea on 22

August* An undetermined amount of illegal trade with Chinese Communist

is transacted through Hong Kong* Burmese trade with the bloc continues to

* ' decline, and rice commitments to the bloc in 1958 have been cut back to " ;

40, 000 tons. Total trade declined in 1957 to $57, 500, 000 or 11 percent of . Burma 1 o foreign trade* Bloc trade with Laos and South Viet^Nam remains negligible*

* ♦

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50, In the field of economic aid, bloc activities are concentrated on

• Burma and Cambodia, Cambodia is now in the second phase of a £22, 400,000 Chinese Communist grant-in-aid program, which appears to be proceeding smoothly. Phriom Penh has completed plans for various social and economic projects and sites have been selected for the four plywood, cement! paper, and textile factories that form the core of the program* At the end of Sihanouk's Peiping visit, Cambodia accepted an additional grant of

. $5, 600,000 and Peiping offered to expand the program to include construction

• of small iron and steel works and surveys of underground fuel resources.

In addition, a Cambodian economic delegation headed by the economic planning!

• counselor sent to the USSR completed preliminary economic and technical aid talks in September,, Construction is now underway on the Soviet "gift 11 hospital in Plmom Penh and Cambodia has included in its 1958 import plan $1-, 000, 000 worth of aid«financed goods to raise funds to defray local costs*

*

* >

51. Bloc countries, principally the USSR, have extended an estimated $41, 600, 000 in loans to Burma* Implementation of Soviet "gift 11 projects appears to be progressing satisfactorily and construction has begun on the technological institute in Rangoon, a ploy/ factory, and irrigation projects* Two Soviet loans totaling approximately $8, 500, 000 were announced in early 1958 but have not yet been implemented. Communist China completed ex-

pansion of a (-oven, acnt-owned textile factory during the first half of 1958

■;

52. There we: ^ approximately 140 bloc technicians in Burma in the first, half of 1958 and the number of Soviet technicians will undoubtedly increase markedly as work on the Rangoon Technological Institute progresses* In Cambodia there w.eraabout 30 bloc technicians, mostly from Communist China; additional Soviet Chinese technicians are expected* (Note: There are current unconfirmed reports that the Ne Win Government intends to . cancel bloc technicians 1 contracts but no action has so far been taken, )

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53* Cultural and Propaganda Activity: The bloc shift to winter schedules brought an increase in weekly broadcast output in native languages from 79 to 93 hours. Bloc cervices in Burmese rose from 10, 5 to 17, 5 hours, and Peiping increased its Cambodian service from 7 to 10 a 5 hours weekly. There ,vac a slight increase in total Vietnamese weekly output. In addition Moscow raised its English language broadcasts to South and Southeast Asia from 17c 5 to 19* 75 hours weekly* . ■ " ■ * .

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54 6 Bloc propaganda activities have been especially marked in Cam*v -bodia> where Communist China, the USSR, and North Vict«Nam have all made rapid progress in the film field* During the first nine, months of 1958 over Soviet films appeared as compared with a total of 15 to ?-0 during all 0:? 1957, A number of Chinese technicians have arrived in Phnom Penh to install the 20 kw radio transmitter presented to Sihanouk last year* The bloc's propaganda efforts within Cambodia have been aimed primarily at youth through the educational system, and Soviet diplomatic personnel have continued to make aggressive efforts along this line.

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59*. Reaction t o Blo c Activities? Generally speaking, tjie government if-the area are preoccupied with and somewhat fearful about resurgent

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55, Subver sive Ac tivity,- Bloc officials'in the area have usually concentrated on developing correct cordial relations with constituted authorities.

-, Covert contacts, however, are maintained through embassies and through Chinese.Cornmunist-controiled banks in places such r.s Burma and Singapore,

' .The banks provide legitimate financial support to pro-Peiping a.dhorents and are also a means of psychological and economic pressure on the population,

^ * *

56.* Communist China exploits extensively pro-Peiping elements within

'Overseas Chinese communities throughout the area- These groups are

culturally to a large extent resident aliens regardless of formal citizenship !

and they are drawn toward the ''homeland 11 regardless of politics, ■ "' " i ,

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57-o In.Thailand,' South Vict-Nam, Malaya, and Singapore the Communist parties are outlawed and far the most part fragmented* Although ciid may ^nve.been given from time to time to insurrectionary forces r both the bloc ■ . ad local Communists generally would prefer legality to continued illegal ■ r .

* ' and guerrilla activity* Bloc subversive efforts have been aimed primarily

it stimulating existing discontent among non-'Communists* ' ['■

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5S. The developing political situation-in Laos, where the Communist dominated Nco Lao Hak Zat (NLHZ) v/on 13 of the 21 assembly seats up for [V

election last May* has shown the Communists to be successful in using legal j

c

md semi "legal tactics c The victory, was made possible by superior NLHZ j;rass roots organization and by lack of unity among hon« communist elements who won a majority of the popular vote but dissipated this advantage by running too many candidates* . The NLHZ appears to be making strong gain In almost every sector of Laotian society including a swell of pro-NLHZ sentiment among Laos 1 13, 000 Buddhist monks who have some influence o/er - /illage opinion*' The NLHZ alco appears to be making some headway in * \.

' penetrating the army and eroding government authority in the provinceG* Some locally elected officials in rural areas are reported to be resigning

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Communist China 1 s rapid rise from n semicolonial M status to economic and military stature as a great power. There is also a great deal of respect for ^ China's cconomk achievement* Local opinion tends to separate the Russians as outlanders* and except for localised incidents* the pattern of Soviet activity does ntil evoke a cencc of thread comparable to that of fcommunist.

China 9 ■ ' . * - . •

*

„-■■ 1 * " » ■ W

60. Some resentment against Communist China has been evidenced in "Burma over the protradted'Chinese border dispute and in Burma and Malaya

over bloc efforts oii behalf of opposition parlies or dissidents. Singapore * and Malaya both have been irritated by Russian tin dumping on the world market and by Chinese Communist textile dumping. On 1 October Singapore

and- Malaya restricted imports of Chinese textiles. ■ '*

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61. Outlook: . The Sino»Soviet bloc's fluid and opportunistic approach

; "\vxtbiri the framework of a policy of developing wider contacts and relations on all levels with the nations of the area, will probably continue. The development of sentiment that is initially neutralist^ independent, and v

nationalist v/ill remain the general bloc aim. Communist China and the USSPv will probably bend every effort to developing a smooth implementation of the economic relationship with Cambodia as a demonstration of what neutrality .can brings Normalisation of relations with Communist China should lead to an increase in Communist activity in Cambodia. At no time in recent ■■. JLao history has the government been more pro-Free World in its foreign policy. Nonetheless* Communist influence is still increasing domestically although at a somewhat slower rate. The bloc is likely to make little progress in South Viet-Nam unless political unrest should!develop.and disturb the tenure of President Diem. President Diem is now anticipating a .sharp upsurge in-Communist guerrilla, activity and terrorism in South Viet^Nam. Thailand and Malaya will probably continue to pursue policies of minimal. * relations wita the bloc, although in the former there are a few indications "of a softcninn toward the bloc. The trend toward the left in Burma has been abruptly terminated by the accession of General Ko Win and for the dura/don o£ his premiership^ Communist influence should diminish* Communist

. China's economic offensive in Malaya and its appeal to"the targe Chinese minority thcre«~38 percent of the population—wllX probably result ixi an increase of unofficial Chinese Communist influence©

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 i

■ *>

FINANCIAL ANNEX TO R&PCKT :.K ~< J.XH.EAST.ASIA

(In millions of dollars over $5 million. Up to &5 million shovm in nearest tenth million.)

BURMA ' •. .

8CPEHDITUH2S AND DELIVERIES - CERTAIN It, 'S. ACTIVITIES

" M WW

Activity

■ i--"*

Militar y Assi stance (c QC . footnotes £,/ andb/)

a..

-. - .-

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Economic Assistance

^ Through ^ s *' # 1957 l fSm To to:

0

* ■

! Technical Assistance

Information Services

r-

Educatioiial Bcchange

-* *■ ■■'—"

Total

HAP SalGsofl-Iilitary Equipment & Services

M AP Offshor e Pro cigeirient Payments (Defense expen-ditures entering into int*! balance of payments.) Other U.S. Govt. Pa^raents (affecting int ! l bal. of payments -.mil, & civ. pay, construction,procurement of U.S. mil* supplies & equipment.)

LOANS'

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Totol

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FY 1 9 59 (Est. as J

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...........-«

Z9.67

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PUBLIC LAW 480 AGREEMENTS

• Date

_ ■ ■' ii % - »-.»»

Title

5/27/ 5i

I

Amount

18. 0'^

*

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Est. 55 Dels.

100%

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Major Commodities

cotton

Use of Local Currency or Other Comment

Ur Eco.DeVo

Uses Loan

Petals

3.55

►-

14.45

18.0

v^lnclucles $i 8 .loan agree*-

ment av/aitm£ signature

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" ■ : ' BURMA ' •■■- *

.. PIPELINE ANALYSIS, MUTUAL SKCURITY.:J?ROGRA.M . . v - - ' (In Millions of Dollars)

Military Assistance *— — ;/ Prior to 1957 FY. 1957 ■ FY 1950 ' ■'.'*'

FY 1959 (est*)' V *,

Programs

■

I

£

2.0

. .20, 0

Deliveries 2.0

Carryover

•

10.2

20.0 9.8

• »

Economic Assistance

-.->*.

t*

Prior to FY 1957 • .-FY 1957

FY 1958 , . . FY 1959 (cot.) ■

Obligation £ 0

-

0

24.2 8.8

Kxp enclitu re s

0

.0

.3

18.0

Carryover 0

23.9 14.7

■-' '

a/ Includes value o£ all grant military assistance, whether programmed on a country or non~country basis f with the exception of the value of * excess stocks and cost-sharing prog rains, (In the MAP programming process^ country programs include such items as materiel and equip-mentj training and dollar costs of consumables a?id construction,, Non« country programs include items such as packing,crating » handling and transportation: spare parts; cost of rehabilitating excess stoclc$j and advanced weapons)* * .

and

b/ Excludes $1.3 million programmed/delivered £rossj stocks excess to "~^U* S^S^rvice or other MAP requirements prior to FY &9$7«

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'. FINANCIAL ANNEX TO ? SFDS'T ?iT ZZ -JTHEAST A»TIA

(In millions of dollars over $5 million. Up to

$5-million phovrn in nearest tenth million.)

:" CAMBO.OIA

■ EXPENDITURES AND DELIVERIES - CEKTAIlTOr^TTCTlVITIES

■

• ---~

*

LOANS

LOAtIS BI

IDRD

ex-im mm

DLF

During Period

to

Disbursements

Repayments

New Loans Authorized

• •*-<

As of

Undisbursed Commitment

s

Outstandi: Debt

PUBLIC LAW 400 AGREEMENTS

■ i

- *

Date

F y 59*

Title

i ii ^ * ■>■ ■ ■ »

Amount

1» 1 eot.

\

\

V

•^4- r/

Est.% Dels.

to be determined.

Major Co rqniodi tie

tobacco"

s

Use of Local Currency or Other CoJflmerit

In process of negotiation

All Notes and Comments relating to the above- figures are shoim on a separate page

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PIPELINE ANALYSIS, MUTUAL SECURITY PROGRAM ■

(2ii rmlUcnrs of dollars) • . •

1 _•_

4 i ■

*.**" .

*•■■ ' . ; *'/ b/

Military Assistance £:' £-'

Priov to 195V , •

FY 1957 ' * V

FY, 1958

FY 1959 (oet s )

Progyctmo

50. 4

8.1

6.2

12.0

Doliveric

s

*m * ,-^

24,9

21.4

.7.6

6.0

Carryover

2 r 5.5

12.2

10.8 16,8

- -■

'

Economic Assistance

■ii», i-<--."~'

Prior to 1957

FY 1957

FY 1953

FY 1959 (est*) ■

Technical Assistance

; Prior to 1957

FY 1957 ■FY 1950

FY X959 (est;)

•.

.- •_- *

Obligation o 8L t 0 32,5

25,9

22.5

1.9 2.0 2.1 2.2

--„--.

Expenditure? 40*0*" ~ . 40,1 37.3 27,5

0.4-1.0

1.9. 2.0

1.5 2.5 2.7 2.9

•-■

a/ Includes value of all grant military assistance, whether programmed on a country or non-country basis, with the exception of the value of excess stocks and cost-charing programs* (In the MAP programming process, country programs include such items as materiel and equipment^ training"' and dollar costs of consumables and construction? Non-country programs inclu/ ■'-■ items such as packing, crating, -handling and transportation; spare? .parts; cost of. rehabilitating excess stocks; and advanced weapons}**

ther MAP

b/ Excludes $0.o 1 million from stocks excess to U* S« Service or o

requirements for FY 1950-59; of which $7*4- million is estimated to he • delivered by the end of FY 1959*

c/ Information hot available except for Indochina (Associated States, Gambodia* Laos and Viet-Nam) reported as §19* 3 million in. FY 1957, * $Z m 0 mfiUott in FY 1953 and' $l 0 Y milUon in FY 1959. '

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FINANCIAL AHMEX TO JB&PORT OK COUTH EAST ASIA (In millions of dollars over $5 million. Up to $5 million ghovm in nearest tenth million,)

LAOS

EXPENDITURES AMD DELIVERIES - CERTAIN !s.> S* ACTIVITIES

Activity

FY 1957

Mi litary Assista nce £ M footnoteo a/ and b/J

-' :" '

Economic Assistance

Technical * Assistance.

■f ■ - I- ~ ■ ■ ■ ■— ■ !■!■ ■ I- . ~ " fc " !■*»■■■■■*

Information Services

Educational Exchange

Total

M AP Sales o f Military Eq uipment fc Service

s

MAP O ffs hore P rocu rement Pa yments (Defense expenditures entering into intVl balance of payments.) Other U.S. Govt . Payments (affecting int'X bal. of payments ~ mil. & civ. pay, construction,procurement of U f S. rail, supplies & equipment,) $J

4 0 3

47 t r

*

0.6

■ ■■•*■■*»■»■• + ■*■■-•#*•»

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♦ 058

FT 195$

Est.

Through

i.Q/.5.CL

•^■••4*ri«»>ii»«tii»

0.2

V -<**

Est. Total

4.6

FX 1S 59

(Est. as of...ll./i>3

35,0

iltill'tii ■,*■«■»■#«<

1.2

i »i -• t» i

0.5

5/-.

NA

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0.2

......•.*.-..4«<>...

■ .070 ■4i;S7C

.21,9

1.6

0.7

■*».#. 'rP--l'l»«l

NA

.093

NA

v.

LOAMS

PUBLIC LAW 480 AGREEMENTS

X

All Notes and Comments relating to the above figures arc shovm on a separate page,

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v .- • '.'• .. • ;• laos ' ..:-•■-.. -

• PIPELINE ANALYSIS, MUTUAL SECURITY PROGRAM ..... .- ' '•■ • . (In Millions, of. Dollars)

Military As ci stance^ Priett to FY 1957"~ FY 1957 > FY 1958 ' ■

FY 1959 (cot.)

a/ b/

ProfiTct.mn ""33." 0

7.4 9.3

10.3

Deliveries

•»**•■■*-

20,4 4.3 4.6 6.4

Carryover 4* 6 7 # 7 12.4 16.3

\

«-■

■

Economic Assistance

■ ■■ m . .*—*+•

ryw < v ni>'^ v

Prior to FY 1957 FY 1957 ■' •

FY 1958 . • FY 1959 (est.)

Technical As si stance

PricTr to FY '195?

FY 1957

FY 1958

FY 1959 (est.)

Obligations

88.5

42.9

29.7 20.0

1,0 1.5 1,5 1.7

EicpcncUtures Carryover

a/ Includes value of all grant military assistance, whether programmed on a country or non-country basis, with the exception of the value of excess stocks and cost-sharing programs, (hi the MAP programming process, country programs include such items as materiel and equipment, training ■ and dollar costs of consumables and construction. Non-country programs include items such as packing, crating, handling and transportation! spare parts; cost of Rehabilitating excess stocks; and advanced weapons*)

b/ Excludes $11*8 million programmed from stocks excess to TJ« So

*~ Service or other MAP requirements for FY 1950-59; of which $11* t million

is estimated to be delivered by the end of FY 1959*. * j

* ■

*

c/ Information not available except for Indochina (Associated States, Cambodia, Laos and Yiet-Nam) reported as $19- 3 million in FY 1957, .$2 A '0 million in FY 1958 and $J, 7 million in FY 1959 f -

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' FINANCIAL ANNEX TO REPORT CM r/OUTHEACT^AETA .

(In millions of dollars over §5 million. Up to * :

."" " $5 million shown in nearest tenth million;) * .. MALAYA AND SINGAPORE ■

*. •

•• i

?xi:^

«**•"»«? ^#i#**«* ■•"-* > -■*■ +

EXPENDITURES AK r D DELIVERIES - CERTAIN 0. S, ACTIVITIES

Activity

»•-*

FT 1S57

M Q i tzxTv Ass is tanco

1

Economic Assistance .

4

Tech nical Assista nce

( Malaya Informati on Serv ices ( Singapore

• . "-«*■ ( MaUtya

Educate ona Excha nge /

:—■ ^- ( Singapore

Total'

KAP Sales of Mil itary EquJ pment &.Services

MA P Offshore Procu remen t Pa yments -(Dofense expenditures entering into int ! i balance of payments.) Ot her" P .S.Govt. Payments (affecting int f l bal. of payments - nil. & civ. pay ; construction,pro-cur client of U.S. nil. supplies & equipment.)

0 # &

c *

.22

Via*** ■■•■ I Jfc ■ * i. i

0. 02

FY

T95F

Est.

Est.

Total

F2T1959 (Est. as

ofli/M

• Incl5d i s Eing ap o re. LOANS

■ : •■ \ . ■ : ;

1 During Period 5/31/53 to 10/31/5

*f**|.+ »..*• ft It. 4* + *fe I I

0.4

.17

:.079

0.4 0,2

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*-069

0.899

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IBRD

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O

Disbursement

s

\

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Repayments

New Loans Authorized

35. S

1 o, ***

As of 10/31/50

Undisbursed Commi tments

35,

Outstanaing Debt

■ : ■ y*

35. 6 *

#*#"'0r Jjo, I larr; trait - early July, PUBLIC LAW 480 AGREEMENTS

Dat

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Title

Amount

Est.% Dels,

rfft.-.^- .«-..-.. *

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Major Commodities

■*«♦*—***»»*K-»^ y ' ■ !' ■ * i

Use of Local Currency or Other Comment

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^ v For Malaya only* Agreement providing for this loan has been siguedj but the loan does not become effective and disbursements thereunder do not Si > until ' tho borrower and guarantox* tnkc c^ytaia actions and furnish certain Soeume&t

s

to the Bank*

n 80 ■'.

Declassified per Executive Order 13326, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

.

r? C'CU.TKEAST ASIA

FINANCIAL ANNEX.TO REPORT (In millions of dollars over $5 million. Up to $5 million shovm in nearest tenth million.)

. vist-,nam: •-xpenditilres and deliveries - certabtt. 3.'activities

■

Act 'ity \

FY 1957

FY 19 5$

Est.

Est. Total

Military Assistance (Cce footnotes a7 and b/)

••

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\

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Economic Assistance

un

Jochnical Assistance

Information Services,

Educational" Jjbcchange

■ ■■ <—*— * ■■• —

■

Total

MAP Salc r^ of Military Eq uipment fr. Se rvice

::

MAP Off shore P rocu rement Pa3anonts(Defense expon-tfitur&s entering into int'l balance of payments.)

1 Ot he r U.S. Govt. Payments (affecting int'l bal. >f payments « mil, & civ. pay, construction,pro-

• cureiaent of U.S. nil. supplies & equipment.) SJ

112, 5

.-,.. ■.,...........

249.5

l|rM*.il*i| f Ht,|p

1,8

2,1

.078 165, ', 7f>

.5

.51.6

209.5

2.7 1.5

FY iW

(Est. es

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<-7. 8

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PUBLIC LAW 4.80 AGREEMENTS

' »

Date

.7Y

58

iv.

ritle

Amount

I

j.6, 0

Est.#Dels,

to bo dc" tcrrrnxicd .

Major Commodities-

tobacco

Use of Local Currency or Other- CoBim&iit

.•

us

Uses

3,0

Mil. Bad*

Support.

i^^

Total

All Botes and Cotfrnpttts relating to the above figures are shovm on a separate page,

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Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 2011

7

4

! •■. . " ■ • SECRET

VIET-NAM PIPELINE ANALYSIS, MUTUAL SECURITY PROGRAM

(La Millions of Dollars)

Military Assistance j y —'

Prior to FY"1957

FY 196? FY 1958

FY 1959 (eat, J

*

Economic As pi stance

Prior to FY 1957

FY 1957

FY 1958

FY 1959 (est,)

m

Technical Assistance

■•■_ »«i*«e»* ■*■-"* >ri»^'W^-'ii«<Jf JWW|I ] +*I0Q

■• Prior to FY 1957 FY 1957 \

FY 1958 FY 1959 (est.)

*>•- - ■•■> "V ■

Programs 294.1 73,0 56.5 41,0

Programs

253.9* 174,4

177.0

3. 5 4.4 4.0 4.3

Deliveries

Carryover

120. 3 .

60* 3 85.7

78.9

Expenditures Carryover

321.2

' 249. 5

209.5

' 183.2

.7 1,8

2.7 3.8

-?-

200.9 205.3 170.2 164.0

2.8 5.4 6.7 7.2

/

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s

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a'/ Includes, value of alt grant military assistance^ whether programmed on . a country or non«*country basis^ with the exception of the value of excess .

stocks and cost-charing programs* (In the MAP programming process, ■ country programs include such items as materiel and equipment, training and dollar costs of consumables and construction* Non~ country program include items such as packing, crating, handling and transportation; spare parte; coots of rehabilitating excess stocks; .and advanced weapons,)

b/ Excludes $46, 8 million programmed from stocks excess to U« S* Service ■*• or other MAP requirements for FY 195G«f?9 as*well as a pending program % increase of approximately $4* C million; $47* 5 million is estimate I to be delivered by the end of FY 1959,

c/ Information not available except for Indochina (Associated States ; -.. Cambodia* Laos and VietvNam) reported as $19. 3 million in FY *9S?J $2, 0 million in FY 1958 and $1, 7 million in'FY 1959,

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Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

CO

Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

THE JOINT CHIEFS OF STAFF Washington, D.C. 20301

JCSM-97-59 19 Mar 1959

MEMORANDUM FOR THE SECRETARY OF DEFENSE

Subject: Airfields for Vietnam (U)

1. Reference is made to the memorandum by the Joint Chief of Staff, for the Secretary of Defense, dated l8 December 1958, subject, "Jet Aircraft for Vietnam (u)."

2. Subparagraph k b of the referenced memorandum states that it is deemed advisable to request the International Cooperation Administration to include Cap St Jacques in addition to Tan Son Nhut in their program for airfield improvement , under the guise of commercial aviation.

3. Subsequent review by CINCPAC and the Joint Chiefs of Staff indicates that Tourane would be preferable to Cap St Jacques. Tourane 1 s advantages outweigh its relative vulnerability. Its forward position would be operationally useful. Its improvement would require less money and time than would Cap St Jacques. Tourane 1 s position on the Bangkok-Hong Kong air route lends plausibility to its development as a commercial jet facility.

If. It is recommended that Tourane be substituted for Cap St Jacques in the International Cooperation Administration's improvement program as the proposed second jet facility for Vietnam.

5 # It is requested that you advise the Joint Chiefs of Staff of your position and the views of the Department of State on this matter ? i order that CINCPAC may, in turn, be informed.

For the Joint Chiefs of Staff;

M. F. TWINING, Chairman, Joint Chiefs of Staff

Declassified per Execu live Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 2011

January 22, 1959

MEMORANDUM FOR THE CHAIRMAN, JOINT CHIEFS OF STAFF SUBJECT: Aircraft for Vietnam (U)

By memorandum dated 30 December 1958, the Joint Chiefs of Staff recommended that thirty (30) AD— k type aircraft be substituted for T-28s in the Vietnam Military Assistance Program to replace F-8F aircraft now used by the Vietnamese Air Force. We are advised by the Air Force that the F-8F aircraft are supportable through Fiscal Year i960 and probably through Fiscal Year I962 and, although obsolescent by U.S. standards, remain capable of performing their mission. While a more advanced capability for the Vietnam Air Force is both militarily and politically desirable, we question the advisability of introducing AD-4 aircraft at this time.

Although the ASCP rate for the F-8F aircraft is extremely low (average less than 2$ for the last 18 months) the utilization rate (monthly average 7 hours per assigned aircraft during Fiscal Year 1958) is very unsatisfactory. This unsatisfactory utilization rate, which is .50$ of the programmed flying hour requirement, is because of high unscheduled maintenance rate and substandard logistic practices, aggravated by a lack of trained supply and maintenance personnel. The result has been an in-commission rate of less than 35$ during the past few months. This poor maintenance and an inability to operate the logistics and supply facilities necessary to support these aircraft are partially due to the fact that the Vietnamese are changing over from a French operated system to a U.S. recommended system which must be operated by the Vietnamese themselves.

Because of the above and the tightness of the 1959 program and in light nf the coming Congressional presentation, we believe it advisable, until there is improvement in Vietnamese training and maintenance, and at least until Fiscal Year I960, to withhold the proposed substitution of AD-U aircraft for the F-8F aircraft.

SIGNED

1 John N. Irwin, II

Assistant Secretary of Defense (ISA)

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Declassified per Executive Order 13526, Section 3.3 NND Projeel Number: NND 63316. By: NWD Date: 2011

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ASSXBXAKD SECHEPARX OF DEFISIS2 Washington 25 ^ D. Ct ■

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BtfSRifAraoKAi security aefairs

In reply refer to 1-05,975/9

20 May 1959

i'

MEM0RASD0M FOR ^-SECREEASX OF THE ARM* ■ / ' '. '.. "

. Effi v SKC5lETARY 0? THE NAVY « ""' ' '

' • . THE SECRETARY 0? THE AIR FORCE

the chairman, JOINT CHIEFS of staff

• ' , THE ASSISTANT SECKEEARY OF DEFENSE (CGMPXROI£ER)

'•'

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SUBJECT: OC33 Operations Plan for Vietnam' (u)

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On 7 January 1959> the Operations Coordinating Board concurred in the "Operations Pirn for Viet-Hem", published under date of ' 9 January 1959 j and/agreed^that tho member agencies'irouid jtaplemont th< actions and programs in tl^PIon,; subject to modification should a • -clionge in civovmr/cvxioon ao dictate. * *•.•"•*

M

* r Jhe Assistant Secretary pf Defense (3£A).j on behalf of tho S^cretfcry of Defensej has approved thie* Plan for Implementation by tho Department of Defense, c

• . ■• *

Bxo Enclosure assigns responsibilities within the Department of Defense for the specific courses of action for which this Department is assigned a primary.responsibility in the Operations Plan,

5

- ■

Components of the Deportment of Defense^ assigned primary responsi-; bilitie* in the Inclocure^ should report on the progress in implementing the assigned courses of action to the Assistant Secretary of Defense. (ISA)* ,*-As a minimim* ouch reports should "be prepared to coincide irlth the timing of revisions c? the subject Plan end vlth the propcfration of the 0GB Report to the National Security Council on U.S. policy toward Viet-IIr"i.

♦•

Enclosure Assignment of B?$pan o ibiiltiBS

3" ISA eys; , ■ ,' v " •

1, HAjfe/KStf (in turn)

2. Dir, Wa (Action) :■ 3• Dir, OP&e

*j

ROBERT H. MIGHT

1^^£^

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. Acting Assistant Sedretary

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ISA Reading File

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Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 201J

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SECRET

ITiCLOSURE

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SUBJECT: Department 6? Defense Assignment of Rcsponsibilitico for the

OCB Operations Plan for Vict-Iiam ' '

#■

PAGE PARA. COURSES OF ACTION ... ... RESPOA'SraJXX'B:

. _ ,- ■ I -*•'- — -^rr*~ «*•

6 ' XJ ■ Popularise, 'particularly in neutralist nationo Assigned to: JC8

-.. of Asia,,rthe image of a genuinely independent ' "■ Bupp.ort: QKSD/IBA .** Viet-ITam Striving by its ovn will and as much * ;

. , ' , cis possible with its aim resourced to enhance

" lis ability to- defend and strengthen its * • '*/"' " " : : independence. • (OCB Assignment: All agencies;

Timing -" Continuing) --•"-*'

- . . .- • % . • ■ ■ ,, ...:■■ '

7 .#3 Itetcs 1 the Viet Cons (foxraerly. called Viet Minh). Assigned to: JC3

from attacking or, subverting J^ree Vlet-Kam '■•—...,.

' . or-other neighboring states* (OCB Assignment: . * " **"" "/*■ - ■"■ * . .'*" • • ".-" - State, Defense;- Timing - Continuing) * ■ '

7 . ■. 2^ Probe vcaknesses o? the Vict Cong and exploit ' * "Acsigned to: ' JCS

■them internally and internationally whenever • _"_, .* : possible. (OCB Assignment:. ':State,' Defense, ' • "- ." : : . . ■ -' . BSIA; Timing - Continuing) :--.--> -, -'_

■hi » ■ • t

26 . Continue to support the Vietnamese Government by Assigned to: JCS -* .. diplomatic, military, economic, and psychologies!. * Support: QfiS3&/lS& . • ,.\ ' nsans. In these efforts the main object should

be to maximize the attractiveness of Free Viet-ITam . ... . ' in contrast with conditions in the communist zone " " ■ ■ of north Vict-Nam. (OCB Assignment: , All agencies,; • " / * .. ' ' . Timing ~ .Continuing) " % ' - - ' p ,.•"■'

•v.

8 27 " Strengthen Vietnamese relations with and ; . Assigned to: JC;

* - : . representation in Laos, Cambodia, the Philippines, Support: 0/iSD/iSA

3Siailand, Burasa, Malaya and the Republic of 2 ";*_.• '-.'... " ^

-China. Keep the GW as fully informed as * ': .— V

■ . ■ - ■ possible of developments in Indonesia in order" *TT rv* ",\

\ \ that it may guide its relations in the best " \ " . - -" . ;

''Interests of the Free T/orld* Support visits by ' ' >. I \, ■] •

\ , ' ; .high-ranting officials of Southeast Asian countries " . , \ " * 1

* " ■ • to Viet-ITam and vice versa, particularly from neutral "*' ; v *

countries- (OCB Assignment: All agencies; ■. * * ■

Timing - Contin^Jii?is) " ■ • * '/■ " /

11 hi \ " Bicouragc "Viet-iram 'i>6 develop economic relations Acsigned to: OASD/lSA

iriLth Japan and the Republic of China, and, as " " ; . * appropriate, to accord recog^iition to the • .. .

" ... \ contributions to the Viet? esc economy non-citizen ■ ♦

TsusineGGinen have made and continue to make under . proper conditions* (0G3 Assignment: All agencies; ■ : .

Siming - Continuing) **«,v«*' • • . ■•■ -

■■,•■.:' ■' sficRETV •■■••- ■ ■ .

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

• • m

«S -•"•">—■■%

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Viet-ila$a Contd

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11

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COURSES 0? ACTION

■ -■ ♦

RESPOUSIBILI^:

■

On occasion of an Imminent or actual communist attempt to seize control from vithlBj take • action in accordance tilth U.S. policy* Prepare contingency plana to facilitate ouch action. (OCB Assignment; Defense, State, tuning -Continuing)

Assigned to: JC

r*

- • •

t *

Jointly with other SEATO poverSj or separately, .vhen appropriate, continue to encourage Viet-llDii to send military observers to SEATO military exercises, vhen'such ixnrltations have been extended* * (0C3 Assignment: • Primary ~ Defense) - v Support - Staie; Timing - Continuing)

Continue to Implement the military assistance program for Vict-JTam. (0C3 Assignment: Primary - .Defence; Suppose - State; Xiwing - Continuing) •

Seek to influence Vietnamese defense planning

go that it Trill be consistent vith U.S. and '• ,

SEATO plans/ Promote a fjpirit of cooperation

• wapng the Vietnamese officials and people in order to develop an atmosphere favorable to the employment of U*S. forces, if they should be required In tliG defense of Vlct-Kam. (0G3 -Assignment: Primary - Defense; Support - State; Siming - Continuing) ... , " .

] Develop,' thrc-jgh training, the maximum combat

* capabilities of the Vietnamese armed forces, including logistical support services* Develop

'adequate reserve forces. The present Vietnamese ■ - armed force leve3, of 150,000 should bc # kept under ' constant revleir, relating such review to the \ external menace. Constant efforts should be made \to cut the man-year costs of Vietnamese troops. (OCB Assignment: Primary ~ Defense; Support : - ...

' ICA, State; Timing -iContisattlng) \ '

■ • • J*

AssiCTed to: JCfl '

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Assigned to:" JOS

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Declassified per Executive Order 13326, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

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Viet-Kara Contd.

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PAGE PARA.

COURSES OF ACTION

12

M

IP.

ii8.

12

13

I

She U.S.-sliould continue to provide adequate support to the Vietnamese military budget as long Its jjEhe threat of aggression so requires. Tiie U.S/cKduld exert continuing efforts to effect " reductions In over-all ttilltary costs and to induce * the Vict&unese Government to increase the total amount of Vietnamese resources available for financing •the military "budget and economic developmento Provide equipment to the Vietnamese forces in conformity ^riLth U#S« policy in connection vith the ■Awnlstice Agreemento (OCB Assignment: ICA, Defense, State; Sinning - Continuing)

Encourage ; wltliin the limitations of available spaces, attendance of* Vietnamese military . personnel-at scliqols of the-U.S. armed forces and at'appropriate foreign school b operated or sponsored by the U.S. armed fprccs. Maintain ■ U*3t advisors vith aJJ. major units and schools of the Vietmiiaese armed forces* (OOB Assignment! Primary - Defense; Support - ICA, State; ( ■•

' RE5P0j:sr;TT.lTX

Assigned to: OASP/lSA Support: ,J03

• i

Assigned to: JC8 Export: Q&mfim

ffiiaing -

Continuing)

.

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Assimecl to:* «TCS

h$) t Encourage Viet-lTam to participate in the Pacific . .'Assigned'to: JOB y ' > Defense College vhon established.' (OCB

Assignment: Brfaftagy - Defence; Support * ■

* State; aiming - Continuing) * ' •* -■ ' - *

•51 * Support the Vietnamese Government's psychological varfare program against the communist zone vith -' a vicv to JTteiting flissatisfafetion and encouraging defections* Endeavor to prevent

-.. ' "ineffective violence or other self-de£eating .

• -■; ".." actions by dissidents. (OCB Assignment: All*.

• : \ agencies; TiFiing - Continuint) .- : : ^ ' ' . • \ . • . • ..-,■■•,■ .

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

,—fc......

Vict-ITam COntd.

ECEET

V

PAGK PARA.

m i . ■ ■ ■ ■ »■ ■» i».i ■ i ■ » j-^

13 ' 56

COURSES -OP ACTION

. «

BESPOHSIBI&m

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15

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•Encourage U.So training and orientation visits for potential .Vietnamese government and * * , • feueiaeso loaders* Continue the granting of ' graduate level scholarships, vith extensions to permit rAtsiirwait of advanced degrees of % ' selcctdd- cases* Permit U.S. financing o:fl p . ■/ full unS&rgra&^to scholarships at U.S» ' , universities for selected outstanding graduates of Vietnamese secondary schools. Encouxago fullest assimilation into Vietnamese life (military, economic, social, political and cultural) of returned exchangees, participants % end trainees* 'Maintain and strengthen contact vith these beneficiaries of U.S. exchange and training programs* Proyide them vith \ m -continuing access to American sources of technical^ professional and cultural information., and, help ' " them exercise b> pro-Free World influence among . fellov Vietnamese. (OCJB Assignment: Defense** ICA, USIA. State; EJbning - Continuing) , -

■ .

Assigned to: QkSD/Ii Support: ' tTC8

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■■.'Increase training of Victr go technical, professional and administrative personnel in Vict-JTan ? U.S. and third country schools* (0C5J Assignment: ICA, USIA, State, Defense; Timing ~ Continuing)

Assigned toj 0AS»/l:

s

Assigned to: JCS

Assignc L to;" JCS Support; Q&SD/ISA

Continue training the Vietnamese armed forces for their internal security role, including " ' " .counter-intelligence vithin the arffied forces, support of police actions, pacification and , . anti-guerrilla operations, et cetera. (OCB

Assigpme&t: Defense; Timing - Continuing)

«

Continue to translate textbooks on leadership,

anti-subversion, counter-intelligence,

administration of martial lav, riot control,

etc, into French and Vietnamese for distribution ,/v?

to Vietnamese armed forces* (OCB Assign^ontf . ■ : ', *

Defense, TCA; Timing*- Continuing) ' " ", , -

The Government of Yict-Nara should be encouraged Assigned to; to maintain && effective, well-trained and carefully J screened Self-Defense Corps, and to continue other ' activities vhich enrphasise self-help and protection m against Vict Coug.terrorlr.n. (OCB Assignment: ICA, Defense; liming - Continuing) •

JCS*

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Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 2011

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SECRET

H I

PROSPECTS FOR NORTH AND SOUTH VIETNAM

THE PROBLEM

I

' To analyze the current situations in North ami South Vietnam and to estimate probable developments over the next two or three years.

CONCLUSIONS

I

1. The prospect of reunification of Communist North Vietnam (DRV) and western-oriented South Vietnam (GVN) remains remote. In the DRV the full range of Communist techniques is used to control the population, socialize the economy, impose austerity and direct investment to economic rehabilitation; and development. The DRV maintains large armed forces. In South Vietnam, despite the authpritari. n nature of the regime, there is far more freedom. Local resources and US aid are devoted to developing the armed forces, maintaining internal security, and supporting a relatively high standard of living, with lesser emphasis on economic development (ParcL 9)

2. In Soutli Vietnam political stability depends heavily upon President Diem and his continued control of the instruments of power, including the army and police. Diem will ajmost certainly be President for many years. The regime will continue to repress potential opposition elements and depend increasingly upon the effectiveness of the Can Lao, the regime's

political apparatus, which is run by Diem's brothers Nhu and Can. (Paras. 11-14, 29-31)

3. The capabilities of the GVN armid forces will improve given continued US materiel support and training.* Continuance of the present level of training is threatened by a recent finding of the International Control Commission (ICC) that the US Temporary Equipment Recovery Mission (TERM) should end its activities by mid-1950. In any event, GVN forces will remain incapable of withstanding more than temporarily the larger DRV foiT.es. ' The internal security ! forces will not be hblc to eradicate DRV supported guerrilla or subversive activity in the foreseeable future. Army units., will probably have to be^ diverted to special internal security assignments. (Paras. 15-17, 33-34)

4. The GVN is 'preoccupied with the threat to national security and the maintenance of large military and security

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

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S E C K E T

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forces. II will probably remain unwilling to devote a significantly greater share of resources and attention to longer range economic development. Assuming continued US aid at about present levels, modest improvement in South Vietnam's economic position is likely. However, development will lag behind that in the North, and the GVN will continue to rely heavily upon US support to close the gap between its own resources and its requirements. (Paras. 19-22, 32)

5. There is little prospect of a significant improvement in relations between South Vietnam.and Cambodia so long as the present leaders of the two countries remain in power. Relations with Laos will probably remain "generally friendly. Continued suspicion that the French are intriguing in the area to recapture a position of major influence will.probably pre-

vent an improvement of Franco-GVN relations. (Paras. 25-27, 35)

6. Despite widespread popular discontent, the Government of the DRV is in full control of the country and no significant internal threat to the regime is likely. With large-scale Bloc aid, considerable progress has been made in rehabilitating and developing Ohe economy with major emphasis on agriculture, raw materials and light industry. The regime will (probably soon have laid the foundations for considerable economic expansion. (Paras, 37-38, 42, 44)

1

7. The DRV has no diplomatic relations

with any country outside the Bloc and

its foreign policy is subservient to the

Bloc. We believe that itrwill continue its

harassment of the GVN and of Lexis,

though a military invasion of cither is

unlikely. (Parhs. 46, 48-49)

I

INTRODUCTION

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8. The 1954 "provisional military demarcation line" dividing Vietnam at the 17th parallel has become a fixed boundary separating two entrenched and hostile governments, the Gov-eminent of Vietnam (GVK) in the south and the Communist Democratic Republic of Vietnam (DRV) in the north. The all-Vietnam elections called for under the Geneva Agree-ments of 1954 have not been held, and the divergent conditions demanded by both governments preclude the holding of such elections. To date the GVN has been preoccupied with the threat to internal security posed by DRV subversion and guerrilla warfare and U'ith the threat that the Communists' numerically superior armed forces will one day invade the south. However, there are no indications that the DRV is willing to assume the risks of US intervention and attempt to conquer South Vietnam by military invasion. Such a

decision would probably be made by Peiping and Moscow rather than by Hanoi.

9. Meanwhile life on the two sides of the boundary is marked by an increasing disparity. The north is organized albng strict Communist lines. The standard of living is low; life is grim and regimented; and the national effort is concentrated on building for the future. The DRV claims it has reduced its reliance on Bloc aid to about one-third of its national budget. Its large army is almost entirely financed domestically, except for arms delivered by the Bloc. Both its foreign aid and its Spartanly acquired domestic capital are devoted to restoring and increasing productive capacity in agriculture and industry. In the south the standard of living is much higher and there is far .more freedom and gaiety. However, South Vietnam's economic; development is still at an early and uncertain

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stage,

and basic economic growth has been .lower than that of the north. The GVN still ■depends upon US aid to finance about two-thirds of its national budget, including -most of the support for the aimed forces.

L MAJOR TRENDS IN SOUTH VIETNAM

A. Politico! Treads . ^

rlO. President Diem continues to be the undisputed ruler of South Vietnam; all important and many minor decisions are referred to him. Although he professes to believe in representa-

j live" government and democracy, Diem is convinced that the Vietnamese are not ready for such a political system and that he must

: , rule with a firm hand, at least so long as na-tional security is threatened. He also believes

f that the country cannot afford a political opposition which could obstruct or dilute the government's efforts to.establish r \'rong and secure state. Although respect• d for his courage, dedication, and integrity, Diem has -remained a somewhat austere and remote figure to most Vietnamese and has not generated widespread popular enthusiasm.

11. Diem's regime reflects his ideas. A facade of representative government is maintained, but the government is in fact essentially authoritarian. The legislative powers of the National Assembly are strictly circumscribed; the judiciary is undeveloped and subordinate to the executive; and the members of the executive branch are little more than the personal agents of Diem. No organized opposition, loyal or otherwise, is tolerated, and critics of the regime are often repressed. This highly centralized regime has provided resolute and stable direction to national affairs, but it has alienated many of the country's educated elite and has inhibited the growth of governmental and political institutions which could carry on in Diem's absence. The exer-else of power and responsibility is limited to Diem and a very small circle mainly composed of his relatives, the most important being his brothers Nhu and Can.J Nhu is particularly influential in international affairs and in matters relative to the southern half of the country. Can is more concerned with internal security and the northern half df the country.

I

ILL

12. An increasingly important and effective I mechanism employed by the Diem regime to

maintain control over the affairs of South Vietnam is the Can Lao, a semicovcrt political apparatus. Its structure, like that of the Kuomintang or a Communist party, is based on the cell and cadre system. The Can Lao is organized on a regional basis. The southern region is run by.Nhu, an articulate, pragmatic activist. It is loosely organised and administered. The northern region is ruled with an iron hand by Can, a withdrawn eccentric feared by most Vietnamese, who seldom ventures from his- headquarters in Hue. Although there is considerable rivalrj and tension between the two brothers, there is no evidence that either is less than completely loyal to Diem. Diem apparently finds it advantageous to continue the division of authority as a means of controlling the ambitions of Nhu and Can,

*

13. -Can Lao members are active at virtually every level of Vietnamese political life. Membership is becoming increasingly important for professional advancement. One-third of the cabinet members and over one-half of the National Assembly deputies are probably Can Lao men; the actual figure may-be higher. The Can Lao controls the regime's mass political party, the National Revolutionary Movement. It apparently has it's hand in most important business transactions in South Vietnam and is engaged in dubious business practices. Recently the Can Lao has stepped up

• its campaign to recruit key officers in the GVN military establishment, probably to establish a control mechanism within the only organization in South Vietnam strong nough to challenge the Diem regime.

'£»'

14. Although the popular enthusiasm attendant on the achieving of independer i and the end of colonial rule has subsided and some disillusion has arisen, [particularly among the I* educated elite, there appears to be little iden-' tifiable public unrest. There is some dissatisfaction among military officers largely because of increasing Can Lao meddling in military affairs. The growth of dissatisfaction is inhibited by South Vietnam's continuing high standard of living relative to that of its neigh-

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bors, the paternalistic attitude of Diem's government towards the people and the lack of! any feasible alternative to the present regime.! j

* *

B. Internal Security

15. The Communist apparatus in South Vietnam is essentially an operating arm of the North Vietnamese Communist Party (Lao Dong), but there have been recent indications of Chinese Communist participation in its operations. It is estimated that there are about 2,000 active guerrillas. They are in small units scattered along the Cambodian border, the south coast," and in the remote plateau region of the north. There are probably several thousand others, now inactive, who have access to arms and would partici-pate'in guerrilla activities if so ordered. The guerrillas are able to marsh all a force of several hundred men for major hit-and-run raids, as they demonstrated twice during 1953.

[They have recently stepped up their intimidation campaign, assassinating local officials in remote areas, terrorizing local populations and disrupting government operations.; The dissident armed remnants of the religious sects are largely broken up. About 2,000. such dissidents surrendered to the government during 1958 and the few hundred remaining in the jungle are probably now absorbed or dominated by the Communists.

16. The government has been able to restrict but not eliminate the subversive and espionage activities of clandestine Communist agents. It is probable that Communists have penetrated some local army and security units, village councils, and local branches of the government. There is no evidence, however, that such penetration is,sufficient to hamper government operations seriously or that it extends to the higher echelons of the govern-

. menl. There.is probably a widespread Communist underground in the urban areas, especially Saigon, and Communist intelligence of GVN pjans and activities is probably good. Communist agents are also stimulating unrest among the tribal minorities in the central highlands, a relatively inaccessible and sparsely populated area which the government is attempting to settle and develop, primarily for security reasons.

4

17. South Vietnam's 13G ( 000-man army, 1 supported by the Civil Guard, the Self-Defense Corps-and the police services, is capable of maintaining effective internal security except in the most remote jungle and mountain areas. Until mid-1,957,' the army had the primary responsibility' for internal security, and had considerable success. By that time major responsibility for internal security had been given to the provincial Civil Guard (48,000) and the village Self-Defense Corps (47,000). These organizations have proven to be inadequately trained and equipped for the 1 job, and units from the armed forces have continued to be called in to meet special situations. The size and scattered distribution of the Civil Guard and Self-Defense Corps add to the problems of training and equipping them and of coordinating their activities. In some regions, they are [infiltrated by Communists. The police services, which include the 7,500-man Vietnamese Bureau of Investigation and 10,500-man police force stationed in the main cities, have had considerable success in tracking down subversives and terrorists and

are developing into efficient organizations,

I

C Economic Trends in South Vietnam

18. South Vietnam has made only limited progress toward basic long-term economic development in the five years since independence. US aid during that period, excluding j military equipment and training, has totaled over one billion dollars. The bulk of this aid has been provided to finance imports of; commodities which have been sold domesti- ■ cally. Most of the local currency accruing to the government has been used to support the armed forces and to finance the resettlement of over 700,000 refugees from the north. The GVN meets, out of its own limited resources, about one-third of the total civilian-military bildget, including about 15 percent of the military budget. The GVN does not have the necessary additional financial resources to undertake a significant economic development program.

1 See Military Annex.

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19. Basic economic development is also inhibited by the QVN's preoccupation with

South Vietnam's problems of internal security and military preparedness. It continues to regard programs for long-range economic growth as of lower priority than the building of defense strength. Moreover, for political reasons, it is reluctant to take any measures "which might reduce the country's relatively high standard of living. Consequently, the GVN devotes only a small part of available resources to long-range economic development^ Diem is hopeful, however, that resources for development will be provided from external sources, principally the US and the Japanese reparations settlement. There is little prospect for private foreign investment, primarily because *of the unsettled security situation, .uncertainty regarding GVN economic policy, and other factors creating an unattractive economic climate.

20. Another aspect of the economic situation has political as well as economic ramifications,

i A considerable amount of US aid is in the form | of grants of dollars which are used to import commodities. This practice has tended to inhibit the development of local consumer goods industries, although steps are now being taken to encourage domestic industries. It has supported a standard of living higher than the country could maintain on its own resources. A significant cutback in the standard of living would probably create serious political prob-IlTemsfor the. government. The present slow *Tpace -of economic development holds little promise that the gap between the present \ living standard and the capacity of the econ-1 omy will be closed in the foreseeable future.

21. Nevertheless, South Vietnam is making some economic progress. The heavily dam-

, .aged transportation network is being repaired. After an initial period of frustration and delay, considerable progress is being made in a modest agrarian reform program. In addition, almost 100,000 persons from crowded

t urban and coastal areas have been relocated on land development projects in the Mekong delta area and in the sparsely populated central highlands. The economic viability of* these last mentioned projects has not yet been

proved. The resettlement of refugees from the north is about completed. Rice production is approaching 1939 levels, but increased domestic consumption has kept rice exports far below prewar levels. Rubber has surpassed 1939 levels and has replaced rice as the nation's major export j

22. Some constructive long-range measures are being taken. The GVN is attempting to increase internal revenues by strengthening its tax system and is trying to restrict domes-

* tic consumption and total imports to about present amounts. If the main part of the defense burden is carried by the US, it is probable that over the next few years the steps taken and planned by the GVN will enable domestic production to expand and thus reduce the balance of payments deficit on goods and services, which was about $190 million in 1958. The planned development of manufacturing would make possible over the next five years the lowering of import requirements by about $25 million a year. In the same period the trade g&p should narrow by another $30 to $40 million if land development and rice productivity programs produce the

- planned results. Even if these results are achieved, hcjwevcr, South Vietnam will still* have large foreign trade and internal budget deficits and continue to depend upon US aid.

D. Soujh Vietnam's Foreign Relations

• *

23. South Vietnam's foreign policy is based upon fear of and rigid .opposition to communism, a3 ! upon a consciou s dependence on. the US as its majoFsource of assistance and protection and as its principal in ^national * sponsor. The GVN leaders desire to maintain

and to assert their: nation's independence, which they believe to be endangered most directly by the activities and milita , strength of North Vietnam. They are also concerned over what they consider the weakness and pro-Chinese Communist orientation of Cambodia, and the machinations of the French,,

24. DRV: In responding to persistent DKV bids to ''regularize" relations, GVN policy is to impose conditions it is sure will be unacceptable. By this means the GVN seeks to improve Kk propaganda position, while mahi-

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tabling Intact its opposition to closer contact with the DRV. Although the GVN may agree to limited discussions with DRV rcpre^iita-tives, such as the proposed negotiation'regarding administrative problems of the Demilitarized Zone, it is not likely to enter into any broader discussions (whether or not held under the auspices of the International Control Commission (ICC)); and even less likely to agree to the establishment ofTegidar official contacts with the north.

25. Camhodia: Relations between the GVN and Cambodia have become acutely strained. Diem is convinced that Cambodia's Prince Sihanouk is untrustw.orthy and is tolerating, if not supporting, anti-GVN operations on the Cambodian border area by both Communists and non-Communists. The GVN leaders have little confidence in the ability of Cambodia to resist Communist pressures and they pure convinced that Cambodia's recent recognition of Communist China shows that there is little will to resist. The GVN is fearful of a Communist takeover in Cambodia which would provide a base for subversive operations or attack.' GVN leaders were closely involved in recent anti-Sihanouk plots, and probably will continue activities designed to stir up anti-Sihanouk feeling both inside and outside of Cambodia and to lead to Sihanouk's downfall.

26. Laos: South Vietnam's relations with Laos are on a generally friendly basis, especially since the Lao Government has indicated greater awareness of the Communist threat and has' become more outspokenly pro-West in its foreign policy statements. The GVN has undertaken to advise the Lao Government on an anti-Communist program, has offered to train some Lao troops, and in other ways is seeking to stiffen the anti-Communist position of the Lao Government. However, GVN worries have been only partially relieved by recent Lao Government measures to check Lao Communist political activity; the GVN continues to feel considerable disquiet because of North Vietnamese pressures along the DRV-Laos border.

27. Frcuwe: The GVN leaders continue to suspect the French of intriguing to overthrow the Diem government and to increase their ihflu-

\

encc in South Vietnam. French businessmen and officials in South Vietnam are carefully watched and the scope of French commercial, cultural, and educational activities is restricted. The GVN leaders also believe that the French are at least partially to blame for Cambodia's apparent drift towards Communist China and for I he failure of recent anti-Sihanouk plots. Although many South Vietnamese leaders have a cultural affinity for France, GVN-Freneh relations are likely to remain cool.

28. US:. Although we do not expect the present close GVNrUS relationship to be undermined, the GVN's sensitivity to its dependence on the US is likely to grow and to complicate

our dealings with it.

Nhu and some other

SECHET

leaders have expresscc resentment at what they consider US attempts to dictate to them and to restrict their freedom of action at home and abroad. Diem has indicated that South Vietnam expects the maintenance of large US aid and special consideration from the US as a reward for its btea'clfast support. Failure to receive such special consideration could lead Diem to assume a stance of greater independence vis-a-vis the US. However, in light of Diem's strong aversion to the French and in the absence of any acceptable alternative source of supportJhe wilTalmost certainly avoid jeopardizing basic US-South Vietnamese ties during the period of this estimate,

E; Outlook for Sou'h Vietnam

29. The prospects for continued political stability in South Vie! m depend heavily upon President Diem and bis ability to maintain firm control of tti< army and police. The regime's efforts to assart! internal security and its belief that an authoritarian government is necessary to handle the country's problems will result in a continued repression of potential opposition elements. This policy of [repression will inhibit the growth of popularity of the regime, and we believe that dissatisfaction win grow, particularly among those who arc politically conscious. The power and \m-scrupulousness of the Can Lao, if unchecked, will probably prejudice the prestige of the gov-

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ff;ce of the president

:,vT;OXAL SSCURIVY COUNCIL

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June 29, 1959 .

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lIB^OBANDuK ?0S '2E3 rISC PLANHIHB BOARD

Current U„ S. Policy in the Far East

3; Memo for Planning Board, :I U.'S. Policy

•" Tovrard the Par East/ 3 June 15- 1959 C* . Seeord of "Meeting of the Planning Board "j-us-.w 12, 1959 ' ■ *■

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--. enclosed graft'revision of 1T3C 5 2 --29/5, prepared '-"by

•"the i3s*D&r truant of Statej is transmitted herewith for consideration by the Plesning Board at an early meeting.

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KGBSIHTH, JOHNSOH Acuisgj Director, Policy Coordinating Secretariat -

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;k S c and other allied military power and acting in a

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capable of coping v;ith ; and thereby deterring, any

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Provide KAP aid to those free Far Eastern

'countries vrhere.it is needed to maintain national

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' independence and v/here it villi be effectively utilized

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In the event of Co^nunisu overt armed attack

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or i:*:-nsnen^ unreal o: such attacK against; any country

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z.^o. not covered by a security treaty to v/h: 'h

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Is party^ the menace to U, S, security_

:.nserests would be so grave as to justify the President

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from Congress to

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take necessary

action to dec:. v:i\;h the situation, including; the use of.

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if a;:ro:>ric.te and feasible Q In

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SJ2CI2ET

any cv£22it« the United States should consider the

advisability of talci-:^ the issue before the United K .

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IT. If requested by a legitimate local government

> .* ■

tJhich rteouireS assistance to defeat local .Communist '

.

■ >

subversion or rebellion not constituting armed attack,

■ *

;;he United States should vie>; such a situation so

gravely that 3 in addition to giving all possible covert

and overt support v;ithin the Executive Branch authority

*

the President should at once consider requesting

Congressional authority to take appropriate action

7

vrhioh; Sli^it if necessary and feasible 7 include the use

■

o # f 'J, S» military forces either locally or against

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th/e e::terna^ source of such subversion or rebellion,,

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vO counter oeissusxss su0vers3.cn ana economic

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lo obtain increasing international

• •

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::u\r;ort for the G7:C and otherwise take ste:os to rcain-

&

1103

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Declassified per Executive Order J 3526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201

S

10^ In order to promote the political progress, •'•■ vfe. *i"ItY and stability of free Far" East countries and to orouiot'e more effective cooperation among those countries and

* • > > «

* * 4

betw&an ther.1 and $fce rest of ths Tree world, the United States should; . - •

: * * * • a„- Without interfering in internal political

> | « 4

affairs, promote through economic aid and other means ,

•

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the emergence, tenure and standing of friendly govern-

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iseirbs vrhich are striving earnestly for economic and

• b, I'o the extent possible as consistent with cur oontlnuinp: aim of encouraging democratic* rcrov/th

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type governments which

are best suited to the 'currant requirements of various

traditions

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•policy .position of any free Par Eastern country,

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whether allied or neutral^ provided that country is striving to maintain its independence from Communist '

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domination or snhvcrslon. ' •

Cs Bncoi-rave the growth of regional and Tree

•.rorld eooper&tion through such measures as sur>t)ort

f

1Z04

SECRET

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

•.

duo:: as the Mekong Vailey Pr-oject and the Southeast

, ■

*-'.'» .

$&k to allay animosities between various

*

free Far S&sfceiss ccvntries, urging moderation and -

nutual respect "bet#een parties to the dispute and

■ * takiri^ an active role as channel for communication ;

rind suo-olyinp; rccbd offices v/here that would serve

c.

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In order to strengthen the economies of the free

Eastern countries and theraoy promote U* S« military,

nonic objectives 5 the U 0 S c should:

al

Be Drepared to furnish economic and technical

assistance on a continuing oasis over an extended

-.*

■ supplement the domestic resources of certain countries s ~'receiving, military assistance to enable them to carry

en otherwise iiisiryoortaoie defense burden without

politically disruptive economic deterioration, and

;

(2; to ^roiiote the steady economic development of free

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.--£:. an countries z+x, a ra^e aaequste i-o give cneir ■: -.:rsCLes a senae of present v>ro~:recs and future hope

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strengthen their orientation toward the free

::, Continue to afigisx in the economic develoo

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ea on a bilateral basis 7 vrhile encouraging

1

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b'ECJIE'T

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regional

aspects; however,

if there should develop genuine initiative and support

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by most of the countries in the area for a regional jLess&ins cjr other eeonomio. development institution and

concerned are disposed to cooperate

if the countries

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and to But substantial resources of their own into it

a should examine such, a proposal sympatheti-

cally x ? ith a view to cooperation and to contributing

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free nations to contribute

available resources to procote the economic growth of ?s-^ Par Eastern countries*

ft

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technical !ciow~hcw raouired for economic growth; and

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bolitifScl erja Intarnat&onal orientation is likely to

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be shaped by the decree to which she has fair access

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to u

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Jui.administering P»L* *>00 in the ax>e&, due

regard should be 3h&:?n to Asian reliance on tradi-

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cal currency proceeds to the "best advantage

in support of ^ro^eots furthering U 6 S # interests.

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a special 5 sustained effort to promote .

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adu^-Vticr. of an expanding number of technically

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competent pro-free v:orld civilian and military leaders, vjorkiES bilaterally or through such multilateral

UN and Colombo Plan; and stress the

importance of developing adequate managerial and ,., -^ t f r - -. - -i * *. - - ■» -i \ /^

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a\nro-">riate means, utilizing Asians

t .

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extent feasible j to (1) increase t .e .

urjisr standing and orientation of Asian peoples toward the free v/crld and f'2) expose the menace of Chinese

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Communist imperialism and vrorld Communis

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In our Cj*tz:?::ii^ci efforts to oppose*Communist

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

-

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Asian unats i-re S's&nct for positive constructive actions

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and objectives end that vie are animated by a desire to

■ further the intex-e3t£ s v;olfare and * freedom of the

.. Asian pecml

themselves

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In order to'avoid enhancing the prestige and power

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in order to retard., within

the Units of our capabilities;, the economic progress of

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and to exploit weaknesses in their position

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Continue to refuse recognition of the Chinese

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G^ir^u&ist regime and other Asian Communist regimes and

avoid actions which night, contribute to their inter-

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b* Continue to or/oose the seating of any of-ftSSe regimes in the United Nations s its agencies, or

other

organ! z-ai/ioiis.

c* The United Stages should continue to apply

- * it6 financial control against } and its embargo on

■ » • *

t; le with. Co: cnist China and north "Korea, and its

* * - ; +

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^ :

£ 3 Urge'other free world countries to maintain . Querent level of export controls on trade with

In support of this effort^ the

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'::.'- ::■-:. -co:xtx .:.->;..:. v.ion is identical with* pea?sg»aph ^9-0

SECRET

1

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

.

SECDBT

Dultilc - 3ral ezsBs&SQQ pi*o?£Fsni« endeavor to handle

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Gisastioii^ of routine exceptions in such manner *as to preserve em& foster the willingness of other countries

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e, Continue to determine our policy on travel pf Americans to Communist China, /north Korea and north Viet-IIa::; 'in a manner most conducive to the furthering" of U„. S 0 objectives*"and courses of action as set . forth in this naner* . . ' -

*

(

*

Utilize overt and .covert means consistent

tilth our broad political and military interests 3 to

*.

each of. the Co:v.:::uni3t dominated areas of the Par Zast and jo iopair their relations v/ith the Soviet

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Do not agree to GrEC offensive actions against

+

* ...ainla- 1 Cofcaunist China, except under circumstances

Eoorcved by the President

Agree to GHC actions

*

against Goftssizsiet China which are pronipt and clear

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. c^ w/-.i„ ,',c^.-.^,_ <%£££»*>..&,& s> a. 0;l-L.n^S3 vQIiijnuIIXo t* clbL/dCiC*

provided such r: diation "is against targets of

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to foaoibiiity ani chance of success and which are

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dus coxsicLar-ation for- the un&fesira'bility

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SECBET •

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

O. Sji+jb X

a

f prv r clv-.^3 further Chinese Communist reaction

-■-^--^ Taliban and the Perighus.-* '. -

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h. If any specific Issues arise in our relation

•chirr'j v;

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si he-otiation of these issues would seem to serve a

W * * '•'** t"* ■£ '- ' i -

'oreoared to negotiate such issues.

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,— --. *- - — ■•:•

v. . ' - - I

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THE* ; 20!XT CMIZFS C? S^*~> WASHINGTON 23. D. C.

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TK. OINT STAFF

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Subject:

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Enclosure: 3r$£t ps^^st* U«S* policy i-* • t^o S&r Esst."

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lo Ehe Joint CliiefD of Staff h^/o recsstly fiipeusceS a cc£? ton^ivo ctudy on \£ia par 2nct p^epsred by the Jclut Strategic

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1

£'.::

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GSSScttL cg:~s::lK;Av~;o:;3

] the area under consideration ecrpris:^ Jcp^n. the Byukyu Islands, . • *

Oovem^atit of the Republic of Korea, the Gover-v^ent of the Republic cf China,,

iLtdosiesiaj the Philippines, Thailand; Via* Sa&j I&ftstj Ctes&o&i&j th£ Fader&'sic

of Malaya j Burr^j Corr^unist China. I-Iorth Korea, and ICorth Vict Ess* Per the

Cfc*~* «

■purposes of this psjssr, the area will be referred to as the 'Par S&3v*

*

^^ O *• A ** 1 r •« ^» »» —*■ *l -* * ♦*- -^- •« * v**—*»— »— » J

2. The prin^ry problem of U-*3« policy in the Per g&et Is to cope xrith the

sr-oh

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reas 01 "Cii

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x:a^t,

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3* the resins in Cor^unist Chi^

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p^d. lias ^ri '* '• A t ^ '* r; .*-1^ .- ■ ^ r~ &$nfe*tC/CP& c-^c\-' ••'p '*V""" r.c*

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- rel^tioris vith tho -Soviet Unio^. It po3es z: oonst^nt threat to the other

3j&.^£onS 01 u^e I-i... a<^dv-« »CiA« vi^^_c 2_j Z-OVJ UO irt?2.SG-l u^ cuulCJ;.^^ ^.^ e&i-^j *CO2-JLr.*0Ce OS. wiiv rsglui^ i-vJi iU^J :.^_~^ Oi iurSbccj,^ Viii'SIl C^e :,i_.^:_^ OCGUi ^

*•

ir.hare;:tly such regimes hsva elements of

* _. .■ r> -

rigi<i^y afid J instability vhich

sccseti^es produce crises* Sie U^itad States imst be :.\ : :.y to exploit sny opportunities which nigbt occur a£- a result of siy i::ter ^hi ,.

Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

"

h. tie Cosssunist regjsss in ivorth Korea and Iforth Vict Sssb hnve ©sfcsblishsd

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depend heavily en sunport of ail kinds frosi the Sino-Soviet Bloc* *

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growth a^d the r^zjor effort of the Soviet Unior: to £^in jLnfluance in vh>i lo^s

c::vohasis should oa placed troon economic growth of the frea,?er 2l£3t ccuvitri^i:^

-

but this caasaot be at the sacrifice of adocuct^ socurity 2v:e^3urc:s^ for^ v/ith-

oiit security and the stability and confidence deriving frcn security ; real

economic -orosnecs will be lansttain&ole*

WlTFal? S5SS ^JCSLD CC S33S

., 'L, ."7~-lT'i _ j_j^~. -—■ -—— —— -—»■*-

6. That -oortion of the 5Vir East not under Cc^nnnist ccntro]. dc£;s not re*or^£ent a unified a ar.aa« Rather^ it is ch^ractariasd by inter- £e& intra-

that el :t dafy ^DjAiticn by orderly pr :

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**• V> 1^1 fill : "*"r"\ " •*» "* j^ 1 " "• * *

'■ v rnvated by vTcVXcL War

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1213

Declassified per Executive Order L3526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

7. In Ltouthcust Asia tho intcttcu rvM^anulict foclli^j fed hy rooicltial resentaonts against European colonialism* coupled *rith a Wlfle-sp3r$a3 fceli:

ir;

-9> 4-V

of weakness and inadequacy in tile iace of the woricL-vi&e porer strurplo,

/ inhibit,/ certain of the countries from coopar&tisg closely with the United

States* They are vulnerable ssiliterilyj and in varying decrees,, politically^

* ^

economically, and psychologically, to Co:auunist e^ansionist efforts

. At

I

•

the seme tine., deep-seated antagonists and differing assessments of the threat divide them and severely hamper efforts to easbliie their collective resources for their own defense end \k- re. loot of the nations are on a marginal subsistence basis economically and depend heavily on outside aid.

1

K

technical and administrative personnel~ and their people are restless and

have impatient "because they / not reali-edtbe dnv ,atic inprovernnts in their ■

% .andnrd of living that they azapect» They are politically nnive and have

fe"^ leaders sufficiently ezaperiencea to provide proper en .stratic-n. Governments rise and fall vrith alarming frequency*

8- Cn the other h^nd^ a possible source of strength for the froe vcrid

position in the Far Llast is nationellsEi^ a dan-ant force in Asia Shicjh is

■

directed towards the preservation of national independence and a^ain^t thane

Mho are seen as trying to subvert or abric^a independents* Althcu^n th-re

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pend.nce ana treys ci

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V33EIH 2BB UHI33D S5KSSS

9» She U»S. feces a celicc.ua procneie m presecrcm;? res Fe,r j5&s"cern policy to the tforld. A U.S. policy sill not be very sy>:p-thetic*lly received if it

is presented in the purely negative terras of preventing Co^unlst eirpav fon

.or the reduction pf its po^er.. At tha sasis tii£3 5 difficulties of the United sHs^tes are multiplied by the way the Sino-SoviMt 31ce reveals the ever-ell

a. The Sine-Soviet Bloc is a unicenter povier syetee: similar to that of

'#

the Chinese Coinnunists to present e, single picture } v:orld~vide > at an# given tivr.s £nd to shift rapidly its tvro fece:; ths;t are pre; eat id to the

-

■ vorlcl,, frozs herd to soft end the reverse, SStis is in the Leninist tr^~

aition of presenting to the opponent calculated parieds of te&sicp end

*

relaxation, thus tasting the opponent's vill to remain firm in the facs

■ •

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peaceful solution to the problems between the tro Bices*

b. The gorernizent in

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into ?ehin3 : s territory, Che United Stetee ie further pen^hized by the

/viven tir^e sssy enpese ^::\.ve ciser> e^:^i.nt:; e~:onj its i::e;±.ere to the ivo:dd et

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•

timing of rf-ajor policy changes toward cither of their countries is dnnr">:vi

iroon the death or rctirermnt of tnc rccp^ctive president. Since tha thrca men \^e" firstly sponsored by th3*Unit^d<£tnti3 ; policy failure to support thc:a in the international arens^ or to allcvr the::- to" he, over thro \ra violently by the opposition in their countries^ ivculd hava undesirable repareussions not only in thd nation-itself cut throughout the vorid* United States policy

■

in the future should ^calc tc avoid ouch porsoucuL connitnants and should be

f

\

of the Far East that can surviva chan^ir^ c&iief o::ecutivoG with little or ^:o

->»

13. The t^sk of the United States in coping V7ith the situation

in the Par* East is complicates by tha- divergencies on policy vrith

its .:

* .*.

to the poctura of the United St&tos toward China and the cn";nr.t to which political, and economic or^gsiires can oa aoplied as&inst the

Cm t » • "■ m »t *| y^» •%

riunsn^ j^r-ancn^ an:, is^/ocr.

.*.. .♦.

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the two major povxer centar^^ of the Pan 1 ,n ; the Soviet ?kr 3ast

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and Coi-mnv-nist China^ projacted into tho areas under- Fras torlfi

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Hast outside the- Soviet Bloc. Certain past actions h:\v3 not on:: failed to furthan U,S, interests "but perhaps have hnnda:?wd f yon

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unoo:nnit:uc:Cl to ezLunar sicia; ana.

1217

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 633 J 6. By; NWD Date: 2011

b. The tJnii&d States has attemptad to gain adherence to

i

joining the United States/,

■

*

15, The p&opl-os of Asia concede that Ccna unlet China has exhibited a .total hostility tov:ard the United States* They ane

r

equally ready to admit that the U 6 S a harbors an intense dislike of the Chinese Ccvr^unists* They v;onld probably go further. end say

-a.*. ■

that the United States h&tss Cosiim.inist "China* K6if3ve?j thay a:*e

-• .:*

China with U*S« actions aimed at that country* In their vistf, 2,1

Un.3 f»03GD-J-JLcri? IS uO CJ..:pJ-coc: O^i DO\ril S.tCOi^ UI1*3 Ui.._uc-vi ovSr^Sti

should be filing and ^efx^/ to ^eize evoay opportunity to ssbs2raa3.fi

* a -. * *.

s

to suoooEtj if not accavaay encase in., any military aetivroii-e-.

■ * ■

against Coraranist China to insure the da-eat of that conntny, Yet,

thev find that the United States hnoka off its action in Xoaea

nor-J Oj, a GOitipji^v^ cji.cc^ Oj. une —.. v -.: ^ -^ u--a^—^. ^ ., _,a. »„w. ^.. --—^^-* » • ■«-*

its efforts in Indochina to "'force upon an ally a peace that

the United States actively discouaase^ actions against Ca n:.Bt China and against Cc:av.anists els. ^ne in Asia on ths oant of

-

I

■

attaclcingj by v/ords only, the Corsauat&t Chinese* As a result ^

* *

the Asiatics are inclined to feel that the united States has a

»

pov/enfal emotional dislike of the Gainere CbLS&unists \:aile a*:

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

the same time it is physically afraid to translate that dislike to a trail of strength. They therefore can see no logical end

«

result to be achieved through ,0/B, present policies 9 and no" benefits to themselves in actively joining the United. States.

nations in Asia have been less successful than might be expected* due at least in part; to.its attempts to persuade the other "nations that they should join the Unitad States in its holy vzar against Co anism^ regardless of the self interest of the individual Far Eastern countries. Such an approach has placed a needless strain upon the political friendliness of these countries for the United States* . Almost without exception these nations could 1 be shown that the basic clashes bet -re en the Chinese Communists and the United States are due to the I

* i

championing "oy the unit ad Stat £5 of the Proa .Nations on the ■ periphery of Asia, and its support' of their- freedom and national ! asperations. He must strive to increase these Asians 1 undsr-

* -

standing that the self interests of the united States and thoise

. 17. The maintenance or any effective military installation in a foreign country requires the acceptance by the government of

i *

trie need for such installation and cooperation on the oart o-~" that country. Base agreements and security treaties establishing these working relationships, to be effective^ must be sensitive

■

1219

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

18. Tha.United States could ; without fear of locs-of position; allcrcf its

* • ,

Asiatic policy-to fee guidad *°y "^e ccnscBSUp of tha vital interests of the

(

Free World rations of the area, via-a-vis Co--ZSU22ist China and the Asiatic U3S2, "

^-%

■

-. r—+*?..- ^.

• *

■ *

interast of these frea nations. At this tins, the^e nations have never

*

"* a ■ .

* -

criticise of U U S* policy and U*S- nethcds of handling its ^olicias ara una-

■ '.

*

countries in the

K1 !T\"V , i\*'f' ••%. j

J-

than ae:::ons-Graoan2 -cna"/

position of tha U::it^d St teSj rather resistance to the Sino-Soviet Bloa

is in their pwa eallsLtsaea salf intare:i;

* /

-" ri

Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 2011

r

.

D. U.S. R0I3 33 3SS3 FiB E/.ST

—t-

I "53 AY —r-r-r- '.y

19, Ehe uzsaerlyias purpose of U*3* gssis&g&CQ in the region is to aid ix* tb develqocant cf severessnts whose chj^etivos do not conflict with the vital

■:.

develop luor

"» -• V- J

cd^inistraticn; and gsreaotg' 'greater # el'legfaace in both _urbc;.i and rural dis-

wr,.o:

—■ * r

— **j

because of atc::^ corruption: ^ or Q*o.asr L^ee£ons 7 th^ United States - shpislo. &C3»:

■

thrcu^rh rc;6riei;tzitio:i to develop it c:: to influcnca tS^ establisbr«isnt of or^e

•Ti .^».

that ao^s orrar sans no^a rcr tine ±\^cv^z« m so <±ol>::iz> tne United 5t:,;c3

on zae

should ^ira toward the dovelcni-^nt or? c system eaS institutions that cz

chr agirig chifei exacutivos vith little or ro disruption 6? orderly ^pv^ys:::^:^

I

ro ro

ro

a

CN

Declassified per Executive Order 13326, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

22. The tfcilsed ets,tes should continue to r:ahe cleo.r its GVn devotion to

■

the principle of collective security,, its belief that regions! security

arrangements provide sng^fbnsa protect ion at minir.-ra cost for all

:■

.» .• *

expectation that a country's aeexsxon *co perxxeiLpsxe in suen ax^ssigeisga&s is based op its a;n calculation of its best interests cud does not of itself

constitute a el&fta for increased financial aido Where countries participatej

measures to assure adherence ere desirable^ normally including preferential treatment in the fields of economic end military assistance as justified cy UcS* strategic objectives* Where new opportunities for affiliation develop.

tuey should "be encouraged* The United States should^ however ; seeeu

right of ench nation to choose its era ps,th to the future^ and should not exert pressure to urlce active elides of countries not so inclined* The

* - i >

i>

even **>

— -.«/-.. .-.*?* T

n\,o

objectives respecting certain countries

tendency to lusft the tpio objectives together^ create a ISA? recvdre-..;nt ^nd ■

Dofense SutS&ort r^oui-^ont in the seae of national aocu-ity, sr.e

this iioues ar-a ^sally political c::-c. r.o i?asl secur-imy i^-s$3*cjs« :.:: involved, thus seriously diluting the U.S. military aia swf^3?£a ••-^

-

wide 3 without gd?ovidlng for U.S. military secuirlty, doWs tio't v in 'ssiy'wey abrosate'thc sa^i^emeat for^ mutually -^po-tir::-Kdlitnw a-^d political tDiolioi^s..' It does ev^^t, bo3fsv*s-, that there ce a clearer ftffia&peatioa b*twe$ii political and military

t>ro-*?£3is ^.re iviore effoo'c;.v3 v *n^s i« ^ipo-^-^anv ov^&eas^ <u;a — ^--of -rave iivroortanco dossstically :.n fining support in Cor^rass £.nd

nwiA'W*(i $*V* *\* te-r- av**i r*^'*"- v>OG*0 ' 3*

-100^

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NMD 63316. By: NWD Date: 2011

-p

24* In Che event cT aggression against a .state^ the previsions Qi

the- U*N* Chester* or the S3.-IEQ treaty should be Invoked; but ths

i *

.-*

'Unite;?, States should not forego nacossary cation in behalf of such a

cf the* possibility that other allies ciiffh-t

■A J - *-v •£* *, r*. --* c *""* £> T* Sb C! ;"^ C ■-• f1 ". ■' * '*

sea

*

•-

be loBth to participate or to furnich more efcsn token military forces

25*

Of

£» j-u _

resources or the

countrie

q

-' 2

it will :

"i £»

necessary for the United States to continue to hel*:> them deveioo

and. of ^

I

i

leasts limited resistance to external agg2?ession 0 Efforts should

*

also be undertaken to encourage the countries to carabine their

collective resources for tneir oun defense

/

future^ local will to resiot \rlxl expand s5?a£tly on a conviction that the United States will continue it^ .report and will maintain a

military posture in the ?ar Hast that v;ill nariTdt it to s 3iot in

N

«. -*, /

O^l' 1

cl/JLOiiZi> iw Uii-JTOf.wt^ijSV.*.* ^-i3 UJ^vdU Duv.^'j l,,UvL1U US >j/c ,.^Cw. ^O

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*.r

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fc&nce

£:7o In order to preserve the territorial and political lr;tagr*ity

.•r.

c.

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-!.OD

^'o do this, the United State

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l_ v: j

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to

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nav^q;j^ uiit-u ~*/

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

no

25, There H are n&£»s open to the United Ste^os to reduce Cc./.uun;-: China ! s "influence in the Par East and at the seme time under-taks

force in the sres,* One of t&ese would ha Tor-ovision

7> *-»'

,

ran^e policy for supao.?t of same form of military activities by

certain nations against Co sunist Chin&j North Korea and hoi

-th

V:

C\ J ~ '*~ •" Vft

• *

nuisance raids^ probes^ limited objective attacks and actions to rectify boundaries vrould be .carried out without overt U*S* support.

■t -:- - >

in sucn sxuua"cion

it is invorobable

one uoor^ i.M^ii

4*>\ a

calculation on Korea still fre^h in its memory, would overtly participate. This fact, plus the lack of ce$3M.llty ef 'hG oppcr.er. to destroy one another without big pevrar interference, viould tend to:

f _

c-

LlP*'

.11.

the

szise oi

the

conflicts 1

h' Put strains u*oon the relations o

Chinese Com-nunieti

and the USS?;;

c* Keet> tiie

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1 A -*-

,-^v

Sc»i/ej.j.lt.i;S ;

ixorcn. :^orea ana

£:or'cn

off

-• *

dc 3a a sporadic drain upon the resources of Coi-^unist Chin*, (and to a lesser degree upon the USSR) to supply these countries, Shis would not be a wholly ne^ policy^ but a return in general to

*

the one adopted by the United States tovrard the G3S operation

/

Since

J. L ,L &

• • obvibus that neither purely defensive ^:ovas made to ueet actions

•'

-♦-%

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1

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

* »

29, Tile need throughout mast of the area for economic develop-cent provides the greatest possibility for- the exertion of out-side influence - either by the Free World or by the Gonsaunlst * 3icc. Without considerable external help from some source,, most

*

of the governments of uhe area vjill be unable to satisfy "cne

political demand for- rapid improvement in their standards of

-

.living and provide for sound economic development, Failure to obtain such assistance from the Free World will tend to drive these countries toward economic dependence on the ComsminiSu Sloe.

The out corns ^ay be strongly influenced by the success with y.-hicn the Free World can cope with Cer^uunist efforts to exploit the Southeast Asian export problems, 5>h£ dramatic economic I * improvements realized by Co^vunist China over the past ten yea

rs

impress the nations of the region greatly and offer a serious I ; challenge to the ?ree World. Flexibility of CJ.3. procedure and

rabidity of U.S. action is of increasing Importance if

* •

-

i ■ effective advantage is to be taken of unexpected and transient

opportunities #

*-.<

^U • .LlIO Uill,i,»V-U Ov'0.s/n-*j ilji^'LJil^J.^ UUU4.0 1I U.iv- II 1 w'ii~0 , ^;.Ui:L-l.*-.L4Li U DL/£.Vwl)

of the area to formulate and execute programs designed to promote sound development*^ to demonstrate that they can achieve growth without reliance on Communist methods or &&>endenc-3 on

*

the Communist Bloc,- and to give their peoples a greater st = v ~-in the continued independence of their countri.es.

*i r ■ n

Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

31. The governments and "peoples of the nations niust be made

to realize that the United States is seeking to develop

«

indigenous economies to the point of their being self-sustaining with' a minimum of outside aid, and -chat pros; cts

i

for a healthy and viable economy depend upon association vith Free World nations rather than with those of the Sino-Soviet Bloc. Un:Uved States courses of action must be so de^i-ned ■ to'create favorable public toressicns immediately and to • maintain oublic support to fruition. To combat the effects

of

• »

Communist aid programs t the United States mus'o nave orOKrams of its ovrn

that are actively and openly

<*KJ + l + .j'L* w— U-" v *~> . ;-L L': 1

jr Y: -s Q t*

of

• % -,

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U;I

ilS 310

Effective use must be

10 3

grant aid to produce

>i** ^ -•-

o

*' -V* ".-1 ,«-i /■"•

and impassive result

-i n

■

of the peooldj ana loans should be siTmnr-estrictive as feasible

p take prompt action to exploit any advantage or to ccunitar

any disadvantage that ni^ht present itself. In ordor to

strengthen the non~Communist governments! o

f the area and to

a. Provide economic and technical assistance as

to obtain u\S. ohjectivas.

i

±22.7

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

Serve

to izjprove the climate :'cr driVa

\m± V* —

* M

tiV*Jbi y. . .

'*^ * * * ' W

*^J

.-. ,^ £*

fl .'_

botn cio.ri8G"cic. ana xorexgn,, ana so encourage one &ax&iitgn investments of United States -jrivate risk capital in the

area consistent with the 'prevailing climate.

-» _•_

c. Sneourage zna nations zo contribute resources ana zo

cooperate inuitilate rally to promote the eco rieinic grov;ch on an area or sub-area basis, '

V»

■development^ one of the major probleras which must be solved

Such delays are the greatest single source of complaint on the to the freouently rapid responsiveness of the Soviet Bloc to

.•r-.

—■ ■ • ■•'

0~>

objectives of the United States in the

Far

cu. ^ :

a/ Strengthening of the

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>-%

£tl^i ;Ji ci v.. 0 c; -L,: L.ic Cv^cicu^

„..^ . /. rt .o .**

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or the iree vroria countries or xne area

■

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/-,**,.

a.. necaicGion o:: ^nmec,3 uor^iunist pow^r nnc; pre^tis

p WRVv"v!v : r>p c>~~' "!:^ t " Mnn^vlpf' pill ;* ^^

1 O 0 o

c;

{

I

/

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Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

F, POLICY GU5IMNC3

■ ■ *

! ' I. POLITICAL

34. With respect to the Free vJoi-ld c.r-ca cf the '*zi< Last, the U.S. over-all policy must be the umm?iering s^s>po^t of tjers?i-

■

toxd-al c.nc political integrity against direct aggression, or

subversion by the Communists and, at the sa^ie time,, support tne

deveiopinent of ^ mutuality bi interests a&ong the free Asian N nations and between the;;: and the United States,

35. 3?he United States over-all policy toward the Slno-Sovl*

• > Bloc in Asia inust in* turn be an unwavering opposition to tha

a ■ «

efforts of the Sino-Sovlet 31oc to e;:pand Its territorial or •oolitical hegemony in Asia or the Western Pacific,

30*. In the event of Communist overt an-i^d attack or Imzctiient

threat of such attack against any country in the area not

* <

Qci± \jj j uns .tisiieics uo u.o* b^oiiiiuv jLtiuer*©st»s ^ouJ.0- oe £o &i&vc

■ 1 B

.c.ci/t!^ »*/<i ■*"'*'- ■ 7-Vi.cv TV ^ •» v*.^,-" Qf,fli*A3 flhA^Trl .'• <"i"" -**T /■ -. "** i-r^va c-^ r "vV c»^V*^ 1 ~. t"'~' O i l-BiO.OS *--a -^ XSS^^.^ O^i.Oi. o* o-iS U^i-^ w/c:Ci 1 • c. -/— O:'-4.,

vievr such -a -situation so cravely th^t^ in addition to giving all

* . ■ possible covert and overt eupport v/ithin the Executive Branch

■ - •.- ■

authority^ the President should con : ler talking addit:-: action^ including the u^e of U.S. military forces.

itv-l.

Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

•

o

*. \

recognize the Governsi^rit c:-: tne. Rz'oxkQ±2

,.»

!

^)0 • ULaiwJ.;.vV- w-o

China as the only legal gDVQMESnfc of China and its right

.-■: , iV, -f-

e oi

to

i«w.f»e«.A.*j. p--.---^ ^ the United Nations-j UN agencies and othe:

■■_ * _■»

*• .„ A-

:-

i

*

f&>±*anal <?imnort f&r the GjIC and otherwise take steps to main

*■■%■•

tain and advance^!ts international standing.

i

*

39. Continue to.refuse recognition oi the Chinese Communist

Slight contribute to their international standing and prestige*

such as

the seating of any of these regimes in the United

.'.. i,

_* .•.

-n

Nations* its agenciesj or other International organizations

hO. If any specific Issues arise in our relationships with

unrecognized Communist regimes where

► <-o «**-

enorus at negco

j— -, ^- - - -

un of

these issues v/ould seem to produce a net advantage to She U.S.j be prepared to negotiate such issues.

«

41. Promote

•> *• *■» ' £ "'*— «3 - --o y]

the

tenure

iiid standing of friendly governments

+

m ■

£J C "*»"^ O

o.

3 ."v.-»

I— —

-* ,*: -* -- ~ *' r> " "

42, Consistent with our continuing aim*of encouraging

0~--w

democratic growthj especially respect for basic .human rights

O -^ J

/-

governments^ tahing care

avoid aligning ourselves irrevocah:

_* j„ ».

.?• ±.1.

with one man as head or

■ •

4

Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

:

43. Show respect and understanding for the foreign policy position Of any free Par Eastern country^ v;hether allied or

m

neutral., provided that country is striving to maintain its

*

independence from Communist domination or subversion.

»

+

*

seek adjustments in arrangements governing the stationing of our

■

.forces.. Stress the mutuality of interest and responsibility which devolves on local governments.

215

Continue 00 seelc appropriate means tc bring about an

understanding by the Free V/orld nations of the mar-Ea^t of nuclear v/arfare,

V ho. Encourage the growth of regional and ^ree World cooporaticn

•ir-i *■* ■" *"** • -i *"i "* - ivt^ d *■■> '■" <& 'y ^i ***, r? c

^

o

' . k7. Seek to allay animosities between various free Far Eastern cpun*cri«s, .urging 1- ration and ritual redact batman parties to the. dispute e eiis a2 ^tive role as ehamsl for communication and supplying good offices sfeer that would serve cur general interests-

... - » -

*m£

ivert ir.&aBS to promote ai-scoo^err*

43. As feasible, utilize ov^rt ana cc^

1

5 ! internal divisions within each of tha Gosununist dc-inated areas of the 7ar ' £ nd to irnair their relations with the Soviet Union and with *ach

Slid i~» V* j

Vw* V**-■—-V^ ■**

i-.o Cc>ro--tibie with the security of U.S. cities whUe aoroaa, per...:/.;

I

travel of j£.ericar.s to Cossasalst China, north Korea, and Horth Viet ::;;-.

.

\

\ -

Declassified per Executive Order 13526, Section 3.3 NND Projecl Number: NND 63316. By: NWD Date: 2011

50. As one r&eans of seising the initiative In the Far Sast-^ the United . States should, at a propitious ti&isj permit and support certain fcrs&s of * military activities by certain nations against Connunist China, I3orih ICoras. and Ixorth Viet gfertu Ihese acttions could include reconnaissance In force, nuisance raids, probing actions,, limited objective attacks, actions zo rectify borders, or any other form that aay be appropriate as conditions </arran^-

and proper retaliation

against a

Chinese CQSSBonist attack

52- In its Pacific roi.e, tne Unitea States should be less influenced by

its European allies than in respect to Atlantic affairs.

II* KILI&ffiY

53.-Ensure a strong U.S. military position in the West Pacific are&j pro-

■

• viding for the security of the Pacific island chain > (japan Sea, South Korea^

5^ UiHIiOi .DC^cl, J_c.L>. r £ni, O^w. _-—- oil—_.££- u^-Cj i\_- e& 2.t>OliijsU.ii ^ cL.Ijl Cav»-v_r_Lc: t_j__,

.-> -■

eirec'Givej.y x

Ifiilini

\

5^. promote and strengtban our sbltilatfergi (ih .yO, iUSUS) and

bilateril (vith Korea, GSC^ Japan and the Philippines) defense arrangements in the West Pacific and develop v;ider understanding

ci e -.luon oitfrposes

among all ou

allies and ether Trxer.Cs m zpj

Far

r-i-ou^h the iSiitusl Assistance Prosrain and other _.;easur-3,

the

in the maintenance of Free Asxan nii-Lxtary icr-ces icr

•i

Df (1) ;V-aiiitai-vir-g internal security, (2) identifying i.-A c*.c-?.r,yi:-:S Coix^unist aggressicn, and (3) bosether Eifcfc tf.3-

and other allied sailitaj

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C_ A,,-s i- t- Ci -^ — \J -i ■

122a

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

........ HI.. ZCOIJWlLC . ,

So. Bo prepared to furnish economic and technical assistance % on a continuing basis over an extended period of time as can '

;>e used effectively (1) to supplement the domestic resources

of certain countries receiving military assistance to enable

i

, m them to carry an otherwise insupportable defense burden without

<- -

politically disrOptive economic deterioration/,- and (2) to promot

f* ?*r»£»A fi'.o'i am r*n-nr>lTT*i i»« pfc p Wl'fcfi

• •

the steady economic development or iree Asian countries at c adequate to give their peoples a sfense of present progress and future hope and to strengthen their orientation toward the

■ *

Free VJorld.

S. i'a '^~

5'/, Continue to assist in .the economic develooment of the area on a bilateral basisj while encouraging useful projects

that have regicriU aspects; however., if there should develop

genuine initiative and support by most of

o

* ■

institution^ and if the countries concerned are disposed to cooperate and to put substantial resources of their ov;n into

it,, the U.S. should encourage such a proposal".

*

« •

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

,o

<- - ~>kj -*■*■• ~--o

i t -

A.1

J* tf> * *

reufevrces ko*'pr-cmots- tne economic gzotrcn oz rree <..-..:'

__--,._• V *** — *

60* Scsoursge private, investment to provide an increaslilg shars of American investment capital and-technical know-how recurred for economic growths and encourage less developed countries to tlmiprove their 'investment climate for attracting U.S. capital.

61. Encourarxe free Far East countries to orient their

- / i

economies tov:ard the Free World and to rely primarily on non-CcluVjniS't markets and sources of supply for trade,, technicians ,

capital development and atomic development.

o2.

-• 1

f*» £Kt *l '. ■> J ^ Wl C* rs c; 1 ", V*A =1 T i"^ *> "1 «"* V* *"• -' C" f-"S

%•—-.

. *'

of such countries for trade with each other and with the United

C* 4- *~j J " e\ c? ^ ' *• ^ «**\

■e-Sa«

''-„Tv CS

World countries^ bearing in mind

that the.

countries r

long-ran-

"--

is likely to be influenced by the decree to which they have fair

& it* t* p --ft *t **n TT *s P* rp *•* ^

/*

be shotrn to Asian pel"

.:■-. ^" -! -*--" — •. --v*t.

sal of commodity exports; utilise local cur ncy proceed;:

interests.

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SECRET

OPERATIONS COORDINATING BOARD

Y/ashington 25, D, C.

-\

August 12, 1959

REPORT ON SOUTHEAST ASIA (NSC 5809) (Approved by the President, April 2, 19-58) (Period Covered; From May 28, 1958 through August 12, 1959 )

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' A." Adeouacy of U." 5. Policy in Mainland Southeast Asia (NSC 5809)

m ^ , i-t ■ . ii -. I I ■ —..-'' L' . • ' * * " ' ' ' ' .-■ -■ ..-■ ,-.

m \ " 1. ■ Review of .policy with respect to Singapore is recommended on an

ux*gent basis,' in order to provide guidance for the new situation which has

developed in Singapore with the granting of internal self-goverrunent and

.". ' the victory of the leftist People's Action Party on May 30, a development

adverse to U. S, and free world interests. If this revision of policy is made*

the review of U. S ft Policy Toward the Far East (NSC 5429/5) should be • ■

kept in mind,

■ ■■

i •

. B. Summary Evaluations of Progress made in Accomplishing U B St

» m— — ^ ii -. i ■ ■ ■ i i i . I ■ ^^ ■ I I n. Hil l I ■ ! I -m , m >i ■ I I . » , u I m 1 , ■ » . ■ « , , i , , | ,iun. ».n I « a I 11 1 I, , i i i n — — « ■ n nnl

Objectives

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2. There has been substantial progress toward meeting the objectives ■of NSC 5809 in most of the mainland countries of Southeast Asia* In Singapore, however, left-wing political elements won an overwhelming electoral . victory. Friction between. Cambodia and its pro-tJ. S, neighbors adversely affected Cambodia's relations with the U # S« for some months but subsequently there was noticeable improvement. There has been an increased awareness of the communist threat. This increase was given new impetus by recent events in Tibet, The resolution of all governments in the area, ex-

*

cept those in Singapore and Cambodia, to t?Jke' a firm line in response to this threat was reflected in the political developments described below., United States political, economic, information and military assistance programs have played a significant part in these developments,

i

■ .Regional cooperation in Southeast Asia has improved as a result not only of our own 1 efforts to promote political and economic cooperation nd to reduce specific areas of discord, but also because of increased Asian aware-ness of the Sino-Soviet threat and of the material benefits possible from •.regional development. This favorable trend has been facilitated by the fact , that the Southeast*Asian leaders feel able to work with.one another due to "'

* ■ * ■

similarities in governmental practice and political philosophy. Aggressive Chinese Communist policies in Tibet and elsewhere in Asia have given them a sense of urgency to draw together; regionally 0 The United States has

i

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

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Unobtrusively encouraged these developments and supported sonie regional projects such as malaria eradication, a telecommunications system and the construction or improvement of trans-border highway's, taking care to leave .the. initiative with the Asian leaders.

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3, Burma, There has been substantial progress toward the achieve**

joctives in Burma. The government of Prime

merit of United States

m

Minister, Nc Wis h&s Introduced stability.and vigor into the conduct of Burma f p • domestic and international policy. The United States has encouraged the ■ new Burmese Government to cooperate with the V/est and has made available substantial military assistance. The Burmese security forces have effec-■. lively .used U. S. equipment against insurgent elements within the country, . At the same time, the insurgents 1 relations with communist political organizations have been impaired by the arrest of communist political leaders ..engaged "in liaison. Communist influence in labor, among the students, and in the press has been substantially reduced,' The government's information services have evidenced greater willingness to cooperate with the United States Information Agency and other United States services in psychological warfare against the insurgents and in general public indoctrination.

In its international policy, the Nc V/in Government has made it clear that, although it may maintain an overt posture of neutrality because of its geographical position,, it considers itself, in fact, ideologically aligned with the West and looks to the United States for support and leadership in

■; many fields. The Prime Minister has privately stated that he believes SEATO plays an important and useful role, and, while noting continuing Burmese sensitivity to open identification with the western powers, he-hopes to move

" Burma gradually toward a public posture of closer identification with SEATO* Relationships between the United States and Burma are trior e cordial r" an

. they have ever been. At Burmese request, the United States has agreed to v contribute substantially to the construction of a highway and university facilities as evidence of United States interest. By contrast, Burmese relations with the Soviet's have deteriorated sharply, Burma is curtailing its trade and aid relationships with tae USSR and the press has been severely critical of Soviet Embassy conduct. In its relations with Communist China",

-BuxTna has moved much more cautious'/ but is stiffening its attitude toward the Peiping Government, particularly in the matter of a border settlement.

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4. Cambodiao A resurgence of severe tension in relations between > — — —_. s ■

Cambodia and its neighbors, particularly Viet "Nam, resulting from Cam-'bodian conviction of Thai and Vietnamese involvement in two abortive anti Sihanouk plots, threatened seriously to frustrate United States objectives in Cambodia during the early months of 1939# Primarily because of our close association with the anti-comrnunist governments of Thailand and

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

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"Viet-Nam, the Cambodians also harbored strong suspicions of United States complicity in the coup plots and anti-American sentiment reached alarming proportions in February and March* -The Communists profited from the -'situation by actively identifying themselves with the Cambodian side in the dispute and by the fact that preoccupation with opposition "movements sup-\ ported by Thailand and Vict-Nam further distracted Cambodian attention ' '-" from the threat of internal communist subversion* Communist influence

in public information media continued to grow, although there is recent evidence of official alarm and attempts to right the balance in favor of a more strictly "neutral 11 news presentation* Repeated United States disclaimers . of support for anti-Sihantyul; activities, sympathetic United States responses

to two'messages from Prince Sihanouk, visits to Phnom Penh by high American officials and Cambodian fear of alienating the U*S* , have recently ■improved relations* .At tiie same time, continuation of our economic and

- military aid programs during the period of stress probably had a favorable effect On the Cambodian Government, In this context, relations between French and U*S* officials in Cambodia have improved resulting in better cooperation m our mutual efforts to further free world objectives. No further significant moves v/ere made by Cambodia toward the Sino-Soviet bloc* . •

- .-Relations with Thailand became more cordial and the deterioration in Cam-^-< bodian relations with Viet-Nam was halted* These developments followed

\ /.by elimination of anti-Western persons from the cabinet, point to a pro-V/est oscillation in Cambodia's orientation.

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.5. Laos, Progress has been made in furthering United States objee-lives in Laos, particularly with reference to the strengthening of Lao political leadership, the improvement of Lao relations with other Southeast Asian countries, and in providing for the training of the Lao National Army, Since the grant of special powers in January to a new cabinet, there are indications

■ that the prestige and morale of the Communist N,eo Lao Hak Xat have de-teriorcited, while those of the non-communists have improved* Stresses

■ and strains continue between the older conservative leaders in the Lao Horn Lao and the younger elements* in the Committee for the Defense of Nation' L . ■ Interests although both groups continued to participate in the government and recently have evidenced greater willingness to cooperate in the face of the NLHX threat* For the first time since Laos became independent, the

•- Lao .Government has recently been in a position to consider the long term prob-* lem of/Jercloping the rural areas. For instance, through the rural aid program, means have been made available to provincial administrators to help villagers carry cut email but important development projects, Re« I sumption of communist guerrilla activities in July may reVeal communist .recognition of their inability to make progress by "soft" tactics in the face _ of the improving Lao Government position, However, the military situation C remains unclear and there is no conclusive evidence as to the exact compositions

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 i

" ' .■ ■ ' ■ "" " \- • " * " ' ■ - * SECRET

,size and objectives of the attacking forces. Nevertheless, it is reasonable to assume that the attache were at least supported by the North Vietnamese Communists and that their minimum objective is the reactivation of the International Control Commission* Visits by the Foreign Ministers of the Republic of Viet-Nam, Cambodia and Thailand have served to improve the good relations of Laos with those countries and may pave the way for increased cooperation with Thailand and Viet-Nam, Strong British support of the Lao Government's opposition to communist efforts to reactivate the International Control" Commission was another encouraging development*

.*■• * Although the Lao Government appears to have handled the insub-

ordination of the former Pathet Lao battalion at Xieng Khouang in a moderate manner, this episode gives cause for concern on two grounds; first, the Lao Army displayed a disappointing lack of capacity to control a small scale internal security problem when it permitted the battalion to escape; second, communist bloc threats relating to this episode raised the possibility

j ■ "that the blo,r may be planning either an accelerated subversive effort in support .of the Neo Lao Kak Xat or a more serious move in Southeast Asia, Discussions in Paris at the end of May resulted in a general reconciliation of French and American views on means of improving the effectiveness of the Lao National Army through American participation in training in a man-

:• ner. that the French Government can justify in the light of its responsibilities sunder the 1954 Geneva Accords, The Lao Government has accepted French** American proposals, and a joint training program has been initiated.

••(

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. * \- The generally increased pro-Western posture of Laos has included a greater appreciation of SEATO* However, neither the Lao Government nor the United States favors Laos joining SEATO at this time.

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. \ Monetary reform, including the adoption of a realistic rate of

•'exchange and free convertibility of the Lao currency, was undertaken by. the Royal Lao Government on October 10, 1958, The reform has been • successful in virtually eliminating previously widespread financial and commercial abuses and in essentially holding the line on inflation* A number of 'serious financial problems for the United States and for Laos, which existed . in varying degrees of importance prior to the institution of monetary reform, .remain unresolved; (I) Lao Government revenues remain strikingly low while expenditures have increased, thus aggravating the already sizeable civil budget deficit; (2) dollar reserves have substantially declined and have only been maintained above the "safe" level by periodic injections of cash grant dollars; (3) with the exception of POL (petroleum and other lubricants} products the use cf Procurement Authorisations for imports has almost entirely ceased*

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Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 2011

' . SECRET ■

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1952 constitution* appointed a Constituent Assembly responsive to hio wishes,-and named a email, competent cabinet* The maneuvering of certain o£ hio colleagues to improve their chances o* supplanting him should hio health fail has waned with the renewal of hio vigor. He has need his power in such a way as to win public confidence* He has not cuceeeded in eliminating graft and corruption foom government, nor has ho furthered the development of democratic concepts and practices

6^*

' ' ' Sarlthas stressed hie desire to promote the economic development and the public welfare of Thailand. Efforts to promote foreign private investments have been initiated. United States technical and economic aid programs, as well as loans from the IBItD, DLF and Export-Import Ban!:, continue to provide a major impetus to Thailand's gradual economic progreo Although Thailand 1 , s economy is essentially sound its economic development continues to be hampered by basic deficiencies such as its dependence on fluctuating amounts of foreign exchange, earned through agricultural exports which are subject to weather and market variations; its lack of investment and management experience; a weakness in public administration including budgetary management; and its inadequate transportation* communications and power facilities* . -■ ■ %

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While some communist suspects arrested last October have been releasee*, the government has maintained its active anti«communist policy, ar4 the communists have been unable to resume public dissemination of propaganda* Some important ax*rests have been made recently but the Thai counter-sub version effort has not become sufficiently effective to stamp out covert communist party activities* , • . ; ■ ; •

.Sarit.has frequently publicized the threat of communism and has declared Thailand's faith in SEATO. The Thai, who fear an expansionist r mainland Ghki&j have welcomed such signs of United.States resistance to communist pressures as our firm position on the Berlin issue and our immediate and effective reaction to aggressive Chinese Communist acts J in the Taiwan Straits last year. While for defense purpose Sarit desires continued substantial military assistance, he has recently indicated a preference for primary emphasis on economic aid. J*

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.9. Viet~Nam • The Diem Government continued its strong political controls'which, while seemingly necessary at the time because of the internal security situation, continued to antagonize some of the Vietnamese elite. The government has shown par'dc^.r concern over em apparent mtensifica-tion of communist terrorism-a,nd sabotage intended to interfere with Viet«Nam ! s

economic progress and possibly to disrupt the forthcoming national assembly

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

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elections* The government has undertaken or planned such counter measures as the use of armed force, special military courts for the prompt trial of terrorists, the removal of peasants from isolated spots to larger villages, and the publicizing of internal security incidents to counteract the "peaceful" propaganda of the North Vietnamese communist regime*. Vietnamese mill" tary forces have improved under the MA AG training program, but the continuance of training at present levels would be inhibited by any action of the

, International Control Commission arising from its opposition to the indefinite # ^ retention in Vict-Nam of certain United States military personnel originally cent out for equipment salvage work and now largely used to supplement MA AG personnel in training duties* This necessitates efforts to work out with the Canadian, British and Indian Governments an acceptable basis in consonance with the Geneva Accords for an increase in MAAG personnel adequate to replace the special mission personnel referred to above. Implementation of the United States aid project for restraining and re-equipping the Civil Guard has begun with the signing of the ICA project agreement with the Vietnamese Government and the despatch of ICA personnel to administer this project in Saigon* la spite of substantial U*S* assistance^ economic

"-development though progressing, is below.that which is politically desirable* \ .. . w "

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

THE SITUATION IN LAOS

THE PROiLEM

9

. * . t *

To estimate Communist capabilities and short-run intentions in Laos, and to estimate the reactions of Communist and non-Communist countries to certain contingent developments. •

CONCLUSIONS

? 1. We believe that the Communist resumption of guerrilla warfare in Laos was primarily a reaction to a stronger anti-Communist posture by the Laotian Government and to recent US initiatives in support of Laos. We consider that it was undertaken mainly to protect the Communist apparatus in Laos and to improve Communist prospects for gaining control of the country. (Paras. 7-8)

2. The Communists probably believed: (a) that guerrilla warfare offered some prospects—at: low risk—of promoting Communist objectives in Laos even if the Laotian C .'eminent received substantial moral and material support from the outside, and (b) that military forces which the West would be likely to commit inside Laos would be indecisive against the flexible Communist guerrilla tactics. (Para. IS)

3. Wc estimate that the Communists intend to keep the risks and the costs of

m their action on a low level and they are

*' not likely in the near future to resort to

large-scale guerrilla activity, at least so

long as the UN fact-finding mission is in

Laos. (Pura. J9) ,

4. Most uncommitted and anti-Communist countries would probably support Western intervention in Laos if they were convinced that the Laotian Government's position was grave and that there was direct Communist Bloc support of the Laotian rebels. In that event, they would prefer that such action be taken

under UN auspices. (Paras. 24-25)

• 1

5. Hanoi and Peipmg have warned that

any foreign military intervention in Laos would be considered as a direct threat to their national security. However, depending partly on the scale and nature of the military move, the Communist mili-tary reaction to the Western intervention, whether under UN, SEATO/or US auspices, initially would probably take the form ,ox further covert North Vietnamese intervention rather than overt invasion. There probably would be less effort than at present jto camouflage this intervention. This Communist action might, in the first instance, be limited to seizing substantial territory in Laos— such as Sam Neua and Phong Saly provinces—which we believe they could do under existing conditions with an aiiG>

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

l

mentation of present guerrilla forces, and then using this situation for political bargaining purposes. The Com/, /lists would probably be prepared to accept a prolonged and unresolved struggle, par-ticularly if the country were geographically divided. If non-Asian forces were committed in Laos, the likelihood of an overt Communist invasion would increase, 1 {Para. 21)

6. If the Communists should come to believe that a .Western intervention appeared capable of resolving the conflict and establishing firm anti-Communist control over Laos, they would then face the difficult decision of whether to raise the. ante further, possibly to the point of openly committing North Vietnamese or Chinese Communist forces to the fighting. We estimate that both Communist China and the USSR wish to avoid serious risk of expanding the hostilities more broadly into the Far East or beyond. We believe, therefore, that the Communists would seek through various uses of diplomacy, propaganda, covert action and guerrilla

'The Director of Intelligence and Research, Dc~-paftment of State; the Assistant Chief of Staff for Intelligence, Department of the Army; the Assistant G it-f Of Naval Operations for Intelligence, Department of the Xavy; and the Director for Intelligence, The Joint Staff, would delete this sentence, believing that it oversimplifies the factors which might lead to an overt Communist invasion:

warfare to cause the West to back down. If, however, the Communists became convinced during the course of a series of actions and counteractions that the US intended to commit major US combat forces into Laos, we believe that the odds would be better than even that the Communists would directly intervene in strength with North Vietnamese and possibly Chinese Communist military forces.-5 (Para. 22)

•The Assistant Chief a Staff, Intelligence, USAP believes that the likelihood of overt intervention by Chinese Communist or North Vietnamese forces would be significantly reduced if the Communists were convinced that the US would not limit its coimtoropcrations in an expanding conflict to the territory of Laos.

a The Director of Intelligence and Research, Department of State; the Assistant Chief of Staff for Intelligence, Department of the Army; and the Assistant Chief of Naval Operations for Intelligence, Department of the Navy, believe that the last sentence of "this paragraph overstates somewhat the willingness oi" North Vietnam and Communist China to use major military force against the US in the Laos situation, and therefore would dctcte the sentence and substitute the following: "If these measures failed. North Vietnam, and possibly Communist China, might resort to at least a show of military force In a last effort to make these pressures on the West effective, and the risks of overt Communist military intervention would thus increase. In the end,

. however, the Communists would be unlikely to press such use of force to a point which in theft estimation would approach serious risk of la^ge-scale hostilities/ 1 The Assistant Chief of Staff for Intelligence, Department of the Army, would

. add the following clause: "particularly if they were convinced that the US would not limit its counteroperatious in an expanding conflict to the territory of Laos."

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

DISCUSSION

I. COMMUNIST INTENTIONS IN LAOS

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7. We believe that the initiation of Communist guerrilla warfare in Laos in mid-July was primarily a reaction to a scries of actions by the Royal Lao Government which threatened drastically to weaken the Communist position in.Laos. For a period of about one year after the November 1957 political agreements between the Laotian Government and the Pathet Lao, the Communist "controlled party in Laos—the Nco Lao Hak Zat—attempted to move by legal political competition toward its objective of gaining control of Laos. The Laotian Coverm.. , had taken counteraction which chec>.jcl this effort Moreover, the US had stepped up its activities to strengthen the Laotian Government, notably through the decision to send military training teams, and clearly was increasing its presence in Laos. The Communist advance in Laos was losing impfefrus. To the Communist world, the future probably a] peared to be one of increasing political repression, declining assets, and a strengthened anti-Communist position in the country. .

8. Hence we believe that the current crisis was initiated mainly in order to protect the Communist apparatus in Laos, to stop the trend towards Laotian alignment with the US, and to improve Communist prospects for gaining control of the country. Judging by Communist propaganda and diplomatic representations, and by the scale of guerrilla activities to date, it does not appear that the Communists expected by military action to overthrow the Laotian Government and seize control of the country. They may have believed that the government would be intimidated into immediate concessions, restoring at least a major part of the legal and political position which the Communists had enjoyed after the 1957 agreements between the Pathet Lao and

* the government. We think it more likely, however, that the Communists expected a renewal of strife in Laos to alarm the world at lavjte and to produce a widespread demand for restoration of quiet, and that they hoped thus

to bring about through international action

o

a return of the International Control Commission (ICC; to t*ans. Under the ICC the Communists had enjoyed substantial advantages, and they probably expected to enjoy them again if the Commission returned.

9. Whatever their initial aims, the Communists undoubtedly were prepared to adapt their tactics and their objectives to the developing situation, and even to press on towards an overthrow of the government and control of the country if the prospects for such actions developed favorably. They may als have in rnind, as a feasible intermediate aim, the re-establishment of Communist control over the provinces of Sam Xeua and Phong Saly, and possibly the formation of a rival government in those areas as a springboard for future subversive efforts.

10. The Chinese Communists probably have certain interests in the present crisis in addition to those of North Vietnam, It is basic to Chinese Communist policy to oppose vigorously' the strengthening of anti-Communist regimes in the area of their interest in Asia and to resist the strengthening of the US position anywhere on* China's periphery. The Chinese Communists probably also wish to demonstrate to Southeast Asian governments, particularly the neutralist ones, that they cannot turn toward the West without serious risks. Although Peiping may well wish to emphasize its importance on the world seem and may regard the Laos crisis as useful for tl:"s purpose, this is probably no more than a bonus effect.

11. Soviet interests in the current crisis in Laos are more remote than those of Peiping and Hanoi. The USSR probably views* the current actions of Hanoi and of the Communist guerrillas in Laos as;a reasonable application of basic Communist revolutionary doctrine and in line with worldwide Communist interests. It is probably willing to let Peiping and Hanoi work out the details so long as the situation does not appear to risk major hostilities with the West. Moscow's propa-

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Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

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ganda has concentrated on charging the Laotian Government with violations of the 3954 Geneva Agreements, but on the whole, Moscow nas continued to follow a more restrained line than Hanoi or Peiping". Soviet restraint on this question is likely to continue at least as long as the current high-level East-West discussions are underway* ;

IL PROSPECTS FOR GUERRILLA WARFARE

12. Many conditions in Laos, especially in the northern provinces of Phong Saly and Sam Neua, are favorable for Communist guerrilla warfare. The country is mostly jungle covered mountains. It is sparsely populated. Most of the people live to small isolated villages connected only by foot trails and waterways, The few; roads which do exist, except those in the immediate vicinity of the major towns, are little more than jeep trails. Furthermore, the supply routes from Hanoi into Sam Neua and Phong Saly provinces and into central Laos are considerably better than those from Vientiane. Air facilities in Laos are limited. The two primary airfields (Seno and Vientiane) have a year-round capability to support medium transports with limited loads. Three secondary airfields (Luang Prabang, Pakse and Xieng Khouang) can support light transport operations on a year-round basis. The remaining airfields are of marginal value, particularly during the rainy season. Communication- facilities are inadequate even for minimum administrative requirements in peacetime. Vientiane has radio communication with the provincial capitals and the regional military commands. Most villages, army outposts, and self-defense units must depend upon runners for communication with higher authorities.

13. Current monsoon rains hamper Laotian Government military operations and logistic supjcrS rr.cre than they do Communist gucr-:".::.%. y>;^:V/-,> T:ji r*;r.y season generally :-:■.' r-:^ i:yy:\ ::./>;v';>V';.T.bor to mid-October slr.fi U foU&md hy a five-month dry season.

hi The social and political situation also offers favorable opportunities for Communist guerrilla and psychological warfare* The au-

thority of the Laotian Government has never been thoroughly established throughout the nation, due in part to the physical character-, istics of the country and in part to a general lack of interest by the ethnic Lao governing elite, which is concentrated in Vientiane and Luang Prabang. People of Lao stock make up only half of the population. These considerations have inhibited [the development of a Laotian national spirit, or identification with the central government. The common people of Laos, especially those in the villages, are superstitious and simple folk highly susceptible to rumors, propaganda and intimidation. Communist psychological warfare has been at least as effective as armed action in the current effort.

15. Government authority has been especially weak in the northern provinces of Sam Neua and Phong Saly which were under Pathet Lao control until late 1957. During the lull between the 1957 Laotian Govcrnmeni-Pathet Lao agreements on unification and the renewal of Communist guerrilla activity in mid-July of this year, the government had made only a beginning in the process of re-educating the population of these two provinces away from Communist influences, or away from their traditional trade ties with northern Vietnam. This is particularly true among the Kha, Mco and Black Thai tribal groups, who mountainous domain straddles-the Laotian-North Vietnamese, border. These tribes, which make up about 50 percent of the population of Sam Neua and Phong Saly provinces, have traditionally been antagonistic toward the Lao people and government. \

16. Most of the guerrillas in the northern provinces are ex-Pathet Lao soldiers, ant. Mco and Black Thai tribal people. Elements of the Pathet Lao battalion which refused integration and escaped to North Vietnam are probably involved. It is almost certain that many of the guerrillas now .engaged have received training in North Vietnam, that some supplies and equipment for the eurivv.; elevations have been provided by North Vict:ia::i, and that the guerrillas move into nr.cl out o: North Vietnam as necessary.' The total number.of guerrillas involved up to the present is

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relatively small—probably 1,500 to 2,000 at most. Although this may represent the major portion of guerrillas recently indoctrinated" and trained for operations in Laos, the Communists probably have considerable additional potential strength. Although we have no conclusive evidence of participation by North Vietnamese, we believe it is almost certain some are involved in" the, guerrilla activity, particularly in coordination, communication, and advisory roles. Lao rebel capabilities are directly proportional to the amount of assistance provided them by North Vietnam.

17, We believe that if, under existing conditions, the Communists made a vigorous effort through guerrilla warfare to seize San) Neua and-Phong Saly provinces, they could succeed in doing so with an augmentation of present guerrilla forces by additional guerrilla forces

• and logistic support from outside Laos, and without involving the use of regular North Vietnamese un-ts. Sam Neua town itself, which has special political and psychological importance for the Laotian Government, might be able to hold out for a considerable length of time, particularly if loyal troops elsewhere in the province conducted effective guerrilla action against the Communist guerrillas. However, problems of logistic support and morale, if not corrected, could lead to the fall or surrender of Sam Neua town. Although the loss of the two provinces and particularly of Sam Neua town would be a serious blow to the Laotian Government, we do not believe that it would lead to the collapse of the government's will to continue the struggle, particularly if it appeared that effective help would be forthcoming.

18. The considerations discussed in the paragraphs above probably caused the Communists

- to believe: (a) that guerrilla warfare offered some prospects—at low risk—of promoting Communist objectives 1 in Laos even if the Lao

, Government received substantial moral and material support from the outside, and (b) that military forces which the West would be likely to commit inside Laos would be indecisive against the flexible Communist guerrilla tactics.

REACTIONS TO CERTAIN DEVELOPMENTS

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39. We do not believe that the Communists will resort in the near future to large-scale guerrilla activity, 'such as an attempt to lake Sam Neua, at least so long as the UN fact-finding mission is present in Laos. The Communists will make special efforts to conceal evidences of outside participation and will probably reaffirm offers to negotiate political differences with the Laotian Government. Moreover, the US has already set in motion certain military preparedness measures in the Far East. It is possible that these or similar moves might,cause the Communists to keep guerrilla activity in Laos at a low level for a considerable period.

20. If, however. Communist armed action increased in scale and effectiveness, cither in the near future or at some later time, and if Laotian appeals for outside assistance did not result in quick and favorable response, it is probable that Laotian morale would rapidly decline and the will to resist would wither away. Such developments would have widespread adverse repercussions throughout neutral and non-Communist elements in. Southeast Asia.

21. Hanoi and Peiping have warned that an; foreign military intervention in Laos would

"be considered as a direct "threat to their national security. However, depending partly on the scale and nature, of the military move, the Communist military reaction to the Western intervention, whether under UN, SEATO, or US auspices, initially would probably take the form of further covert North Vietnamese intervention rather than overt invasion. There probably would be less effort than at present to camouflage this intervention. This Communist action might, in the first instance, be limited to seizing substantial territory in Laos—such as Sam Neua and Phong Saly provinces—which we believe they could do under existing conditions with an augmentation of present guerrilla forces, and then using this situation for political bargaining purposes. The Communists would probably be prepared to accept a prolonged and unresolved

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struggle, particularly if the country were geographically divided. If non-Asian forces were committed in Laos, the likelihood of an overt' Communist invasion would increase. 1

22. If the Communists should come to believe that a Western intervention appeared capable of resolving the conflict and establishing firm anti-Communist control oyer Laos, they would then face the difficult decision pf whether to raise the ante further, possibly to the point of openly committing North Vietnamese or Chinese Cojnmunist forces to the fighting. We estimate that both Communist China and the USSR wish to avoid serious risk of expanding the hostilities more broadly in the Far East -or beyond. We believe, therefore,

' thftt the Communists would seek through various uses of diplomacy, propaganda, covert action and guerrilla warfare to cause the West to back down. If, however, the Communists became convinced during the course of a series of actions and counteractions that the US intended to commit major US combat forces into Laos, we believe that the odds would be better than -even that the Communists would directly intervene in strength with North Viet-

' namese and possibly Chinese Communist military forces, 5

23. The Communists would probably counter the unilateral introduction of "volunteers" or regular military units from South Vietnam and Thailand with the introduction of North Vietnamese "volunteers."

•See footnote to Concision 5. ■ See footnotes to Conclusion 6.

24. The uncommitted and anti-Communist countries of the world would view with alarm a Communist takeover of Laos, but are fearful that a Western intervention in Laos might lead to the outbreak of a major war. Nevertheless, most of these ' countries, including most members of SEATO, would probably support such intervention if they were convince of the gravity of the Laotian Governments position and of direct Communist Bloc suppc

of the rebels in Laos. The findings of the UN Security Council subcommittee will almost certainly have an important influence in this respect,

25. If the uncommitted and anti-Communist countries accepted the need for [intervention in Laos, they would prefer that such action be taken under UN auspices. If dispatch of a UN-led force were blocked by Communist diplomatic opposition, intervention by SEATO would probably be supported by most Free World countries despite the strong dislike of some neutralist nations for the SEATO concept. On the other hand, SEATO failure to move effectively in response to a Lao appeal for help would not only endanger the existence of SEATO Hscii but would seriously weak the confidence of the non-SEATO states of Asia in the West's determination and ability to defend them from Communist attack.

2G. US military intervention, such as the dispatch of troops to Laos, in the absence of broad acceptance of the need to intervene would' probably have little support even among the anti-Communist nations. Our SEATO allies, hoy/ever, would probably support us although most might do so with considerable reluctance.

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Oct 20 1959

REFER TO I-l6,OUl/9

MEMORANDUM FOR THE DI RECTOR P JOINT STAFF ATTENTION: DIRECTOR OF INTELLIGENCE

SUBJECT: North Viet-Namese Military Establishment and

Capabilities

The International Control Commission (ICC) has requested that the Government of Vietnam furnish them information regarding U.S. plans for reduction and/or phase out of TERM in Vietnam. The Department of Defense has requested that the Department of State obtain approval from the ICC for an increase in the MAAG ceiling before providing the information requested. The Departments of State and Defense have agreed that Canadian and Indian members of the ICC should be briefed and requested to support the U.S. position. In order to bolster the case for an expanded U.S. training program, it is requested that the Director of Intelligence, Joint Staff, prepare an estimate of North Viet-Namese capabilities and appraise the unstable political and military conditions in Laos. It is recommended that the estimate be prepared with marginal notes indicating what Information is releasable respectively to Canadian and Indian nationals.

(Signed) Charles H. Shuff Deputy Assistant Secretary

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OPERAT1 ONE C OORDIKAT IN G B OA.?J>

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' SPECIAL REPORT ON SOUTHEAST ASIA (NSC 5809) .:' ; * • • ; (Approved by the President, April 2 f 1953)

{Period Covered: From August 12, 1959, through February 10, "I960}

.ADEQUACY OF U.S. POLICY IN MAINLAND SOUTHEAST ASIA (NSC 5G09)

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'1» The validity and implementation of U. So Policy on Southeast A^ia has been appraised and evaluated in the light of operating experience. It is recommended that the National Security Council review those parts of 'the policy which pertain to Cambodia and Laos, The basin for this record"; mendation is as followo: -.

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Cambodia (Paragraphs 39 through 4Z)

2, The major difficulty 'is encountered in the present wording and context of paragraph 39» Owing to the evolution of political conditions in Cambodia over the past 18 months, this paragraph appears misleading in that it docs not provide guidance for dealing with Prince Sihanouk and the political strength he representSj but rather implies that we should encourage non-communist elements whether or not they are opposed to Sihanouk* The latter has emerged with added power and prestige from the abortive coup plots and subsequent subversive activities mounted against him in 1959 by ostensibly anti-communist elements. In the process many of these elements were eliminated and the revelation of their real or fancied association with the United States and other free world countries undermined Cambodian confidence in U. S. motives and became,an obstacle to the pursuit of our objectives* Moreover, Sihanouk has given further evidence of political astuteness in the domestic arena, has displayed increased alertness to communist subversion* and has shown no inclination to tolerate any challenge to. his pre-eminence* Policy guidance, therefore, should be directed conspicuously and specifically at the problem of dealing with Sihanouk, by all odds the major single factor in Cambodia and the principal target of U* S«

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3« The other courses of action for Cambodia (paragraphs 40 tjrcough 42)

remain valid, bv,t fail to take into account the particular forms in which

certain general problems are encountered in Cambodia. In revising the

NSC paper, consideration chould be given, to the following additional pomes;

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a. It would seem desirable to acknowledge the acute sensitivity of Cambodians to the U. S. attitude tQv/ard Sihanouk's brand of neutrality and to reinforce the general guidance on this question given as a regional course of action inxparagraph 14 by mnrc specific treatment in the country section*

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b# Another problem v/hich probably merits specific attention is the presence francaisc iii Cambodia* Guidance on U* S» policy toward ■ . the attempt to maintain French influence in Cambodiai and on the use of this influence in the furtherance of U* S. objectives, would appear desirable.

;-' "~" ■' • c. Paragraphs 40 and 41, dealing with U. S. aid, probably could

Be'revised to reflect the fact that our military and economic assistance programs in sensitive fields are essentially preclusive in nature raid to I

prrivide clearer guidance on the use of U. S« aid to prevent communist penetration*, . ■

d. Finally, the guidance on Cambodia's relations with its neighbors might b.e strengthened to reflect the greater significance this problem has assumed in recent months and consequently the more urgent need for the U« S. to exert a-moderating influence, • . •

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Laos (Paragraphs 43 through 49)

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' #4. Both the internal political situation and the country's external ■ rcla-

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tions have evolved considerably since NSC 5809 was approved (April 2, 1958). ' and the guidance contained in paragraphs 43 through 49 is not entirely adequate-in the light o£ operational experience* "---"'. ■ *

♦5. More specifically, our problem in the last few months has not been il to strengthen the determination of the RLG to resist subversion" (P. 43} or f, to prevent La© neutrality from veering toward pro-communism rf (P. 44). ** Without minimizing the importance of these objectives,. our immediate-operational problem has been to persuade the Lao leadership from taking too drastic actions which might provoke a reaction on the part of the North

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Vietnamese and which might alienate free world sympathy for Laos—as for ' instance, outlawing and eliminating by force the NLHX, or taking a hard anti-communist position in international affairs* .

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6. Again, the events of the past summer have strengthened the belief . of the. Lao in the UN "and have satisfied them that SEA TO and, more imp or-"tantly, the U> S w would come to their assistance in the evei^t of armed conflict with the communist bloc. Therefore, the question now is not to

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"develop an attitude of confidence on the part of tlii Xia« leaders" (P» 45) in UN, SEATO and U« S^ support, but rather to make these leaders assume a greater sense of responsibility and .take into account tho international reper erosions which their actions may cause* ^ • <

■ '*'■ 7 # The entry of the UN into Laos posee new problems but also offers new opportunities to satisfy the increasingly felt yearning for progress* It creates a new factor in Lao foreign relations which will henceforth have to be taken into account/

• 8, In summary, it is consaaered that tho language of the policy paper no longer applies realistically to existing conditions in Laos and does net provide guidance for our position regarding the assumption of now responsibilities by the United Nations. ' '

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Attachment:

Laos: Political Background

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LA OS: POEITICAE BACKGROUND

9 # J" April 1958 an electoral campaign was under way in which the Neo • Lao Hale Xat, the communist-front party, was permitted to participate* The campaign was being fought for 21 seats to the National Aosex*nbIy in fulfillment of a provision of the Political Agreement which had been signed between the Royal Lao Government and the communist dominated Pathet Lao

.'the'previous November* This agreement had also provided for the entry of "'two Pathet Lao leader 6 into the Cabinet* The Military Agreement, signed at the same time, provided for the integration of two Pathet Lao battalions into the Lao Army and the demobilization of the balance of the Pathet Lao forces*"; In sum, with communist and fellow-traverlcrp permitted to enter the Cabinet,

■' the administration, the army and the National Assembly, the fate of Laos appeared in the spring of 1958 to bo cloudy indeed* The results of the elections, which we re,held in May, confirmed our fears* 1 The Neo Lao Hak Xat

. and a satellite party won 13 of the 21 seats at stake, giving clear evidence

of the party 1 a strength and orgamzation* " \ " * % \ '*' ■

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* 10. Since then, anti-communist elements have taken a firmer stand toward the NLHX and a take-over by peaceful .means, which we may presume the PL anticipated and we ourselves feared, does not appear to be an immediate possibility*

^ 11, The election results gave ant i-communist patriotic elements a

severe shock and in reaction the two major political parties merged into one (Rally of the Lao People), while a group of young, relatively better educated men in the government, military and business circles organised themselves into a so-called Committee for the Defense of the National Interests (CDNI)* The GDNl l s stated purpose was to support any Cabinet, political party and individual who worked in the national interests* The CDNI was strongly anti» communist*

. 12* In July 1958, the vacillating Souvanna Phouma, who negotiated with . the Pathet Lao, resigned as Prime Minister and, in August, Phoui Sanpni-kone formed a new Cabinet from which the Pathet Lao were excluded ai. X which comprised representatives from both the Redly and the CDNI pre-, scnting a solid anti-communist front* This Cabinet, which was further strengthened in January 1959 by the inclusion of three senior army of£i j?e 9 , tackled one by one some of the major problems which had been left pending by previous governments* K carried out monetary reform, & partial administrative shakcup, undertook various village aid and psychological warfare ' programs, and consented to have France and the United. States implement a joint training p2 ^gram for its army* • ' •

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13« In January 1959i the Prime Minister declared unequivocally before the Assembly that the government 1 s foreign policy wao pro~western and

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n '-i--co.mmunist and, in February, declared that Laos had satisfied all the provisions of the Geneva Agreement, While the government has sc cone back on this bold stand and resumed an announced foreign policy of neutrality (with our encouragement), in fact it has continued to oppose the exchange of diplomatic missions with any communist country and at homo has taken firm measures to counter and control the Neo Lao Hak Xat, The progress which the government was slowly makings its firmness toward this ( . pprfcy and the party's consequent lessening prospects of a peaceful take-over, have been considered causes for the events of the past summer* By reverting

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to armed subversion, the communists presumably nought to protect their apparatus and recover their influence which had been gradually eroded over

cevex^al months* % . . . . - .• " .

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* 14« The events of this summer brought world-attention to focus on the situation in Laos, Domestically, they resulted in strengthening the Sasrfei-* communist, anti-Viet Minh convictions of the Lao leadership* Internationally, they brought about the decision to establish an enlarged UN presence in the country which would permit world opinion to focus rapidly on the situation if new fighting were to break out* At the same time, the Lao gained a. sense of reassurance that SEATO and, more meaningfully, the ll g S. were prepared to stand by their country if it came to a showdown*

15* While it is.not inconceivable that a Cabinet with neutralist tendencies might be created, such an eventuality is far lees likely than in April 1958 0 Major elements of the Lao leadership are firmly committed to an anti-communist stand. Therefore, the major problem is no longer one of insuring an anti« communist government but rather one of giving the pro-western anti-communist elements cause for maintaining their position encouraging greater cohesion among them and reassuring them that their policies will permit their country to progress* This evaluation is strengthened by the recent political crisis of December. 1959"January I960 which brought about the downfall of Phoui and the creation of a new Cabinet under K01 Abhay* While Kptt has made public declarations of neutrality (in consonance with nur recommendations), all the Ministers on whom the Ambassador called have made clear that they would continue; to look to close cooperation .with the U'o S* The Kou Government is charged with preparing Laos £u? new elections in the nea,r future.

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2137261

FOREIGN SERVICE DISPATCH

American Embassy SAIGON 278

Despatch

March 7, i960

This document consists of 22 pages* Copy llf of 25 copies* Series C

Department's Telegram No* 1339* January 29, 19o0

D/ARMT

Special Report on Current Internal Security Situation

Enclosed is a special report prepared by a Country Team study group on the current internal security situation in Viet-Nam* A summary of this report and an analysis of the main factors in Viet-Nam 1 s current serious internal security problem are given below:

Situation * Internal securityj which improved greatly since the nip and tuck period from 195*+-56 but which nevertheless has been a steady concern of the GVN over the past few years^ has again become its No* 1 problem as a result of intensification of Viet Cpng guerrilla and terrorist activities ^ weaknesses apparent in the GVN security forces and the growth of apathy and considerable dissatisfaction among the rural populace* The situation has grown progressively more disturbing since shortly after the National Assembly elections at the end of August 1959* despite the fact that President DIM was claiming 3 up to the end of December , that internal security was continuing to improve© The monthly rate of assassinations rose substantially starting in September> and other signs of increasingly aggressive VC tactics such as ambushes of GVN security forces began to appear about the same time. The full impact of the seriousness of the present situation was brought home by a series of VC incidents in late January and February., particularly an attack on an ARVN regimental post near Tay Ninh 5 other smaller and less dramatic attacks on security posts elsewhere in the southwest and serious VC depredations in Kien Hoa Province* \

President Diem and other GVN officials are now showing a reassuring awareness of the gravity of the situation. They have not permitted themselves to become panic-stricken, and there is no reason to become alarmist if prompt steps are taken to correct the situation*

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! From Saigon

VC Intentions and Potential . Indications are growing that the VC are mounting a special campaign aimed at undermining the Diem Government. According to CAS sources, VC armed cadre strength has increased to about 3,000 in the southwest, double the number in September* VC groups now operate in larger strength, and their tactics have changed from attacks on individuals to rather frequent and daring attacks on GVN security forces 0 A recent CAS report has indicated a VC intention to press general guerrilla warfare in South Viet-Nam in 196o 9 and indicates the VC are convinced they can mount a coup d'etat this year c President Diem also told me in late February about the capture of a VC document indicating their intention to step up aggressive attacks all over the country, including Saigon, beginning in the second quarter 9

These signs indicate that aggressively worded statements emanating from the DRV in 1959 raay accurately reflect DRV intentions. In May 1959 the central committee of the Lao Dong Party passed a resolution stating that the struggle for reunification of Viet-Nam should be carried out by all "appropriate means". Subsequently in conversations with Western officials, Prime Minister Pham van DONG made statements to the effect that "We will be in Saigon tomorrow" and "We will drive the Americans into the sea"o

It is not completely clear why the DRV has chosen this particular time to mount an intensified guerrilla campaign in South Viet-Nam« Several hypotheses have been put forward. The campaign may be part of general Chicom strategy to increase pressure on non-communist countries all along the southern rim of the Asian communist bloc* Several GVN officials, including President Diem, have said that the present DRV tactics may be related to the forthcoming East-West summit meeting, but they do not seem to be clear as to just what this relationship might be 0 Diem and others have also expressed the view that the DRV is aiming at disruption of the GVK 1 s economic, social and security programs, many of which have been making steady progress while others, like the agroville program, threaten to weaken the VC position if carried out successfully© The DRV may also have been embittered by its failure to interfere successfully with the GVN National Assembly elections last August and resolved, as a result of this failurej to intensify activities in the South.

GVH Security and Political Weaknesses © At the same time that the DRV guerrilla potential has increased in the South, weaknesses have become more apparent in the GVN security forces 0 GVXJ leaders have in recent weeks stressed the need for more anti-guerrilla training of ARVN© The desirability of centralized command in insecure areas and a centralized intelligence service has also

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pisei cannot &3 eosplet^l^ s.bso3A^©u of blam-s for this imsatls-factory situa-tion in th® rv^^l s-s^@« CoafiidsreJblo evidossce' feas axls'tsd that he has not ;ln ths os^^t kept HiniC-alf or-overly lBfo:c^e<S j of wlisH is going on. Officials havo teB6efi to toll bin: ve-hat :: ; ; W^%3 tD/lvsaaV lare;^l3 r fcec^u; -■-;■ fef f^ar of rar^pxa? -if thsy indieai thac A^t^;coo havo boon made »:c* ■ •*^ly that projscts Hhich hs ir^ ou^hirar;^ £hoa3x2 not bo carri.^l c-v as rApiSly*-&s he fiasires*

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«Tvj4 Cou^tfiractlona. Dsvc3oc4»2?iv3 exuding the last month ov* s-5 ' •"'. rts.T-:; hpvrsvepj aualcensd JJissj sac; othar officials to the suavity of tr:-.' :c»r-<i'3£sst Intsrnal security vi-.c: p<?A'itical situation," As already .': iudlc>:-t-escs tHey ars now orriin-i-v.-'.'-.r.^ th-3 nt^eed for. Increassscl ssitl- ;• : • ga&eriliz train in g- of this i>.?».T..;ri ":y .foi'c-s^. Diem.also nan iadxcatsS : • ti>ftt :"-" : i^ eer&ablislils^g a aj>8o:Ul c^cmando force with "voftsttiftsrsf : ' . .f:-:-c,." AR?>S th-3 Civil C:V::.r-d bxkJ r. : '.';3.v-;i^vs who had guerilla '■ '^cp$rieAC^ during 'tjia InrXoc^lirva ssbg?«, Dicni has also stated Wiat the }\<:Js c<ara*r4as? of tVio L?ifth Kilitery Kvr;lon (tho area of gs^eatest

••- ■». •-■»-! '> -„- ^ 5>*« «>SiStf> :"-;v" ,r l .''•'••IT -Tiv' i*j OVP'V pll '■"-"■- rx^AitW'C f*V

t'oroc.^ in'that- swi, .tHus.reoc^nising t!ie noeo for oGjitralisecl ' ' f;c:.t : ;-;.y.v;i rather than fra£j«cntatio3 of authority jsttjfong bhs province

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CctOJil has -also indicated that bo is replacing loeal cffiexals 1

wfeo as^3 •incomoeteat- or^ have abused thoir p:/;^rv He j.«

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From Saigon

renewed emphasis with these officials on the necessity of winning the confidence of the people and explaining to them the reasons for the government's programs Q He has also indicated that he has ordered a slowdown in the construction of agrovilles, apparently in recognition of the indications that the people were being driven too hard to carry out this new program©

The Embassy's views on these counterraeasures of the GW as well as on certain other actions which should be taken have been expressed in a separate despatch* As the situation develops, the Embassy expects to make additional recommendations 0

/s/Elbridge Burbrow Elbridge Durbrow

Enclosure:

Special Report on Current Internal Security Situation

COPIES POUCHED TO: CINCPAC POLAT), PHNOM PENH, VIENTIANE, BANGKOK, HUE

DIST AMD

DCM POL-2 SECURITY CSA

MAAG

ELLSWORTH-MAAG

USOM

walton-usom/psd

ARMATT

HAVAT

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USIS

FILES-2

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Desp No. 278 From Saigon

,w Special Report On Internal Security Situation In Viet-Nain

The Viet Cong attack on the Vietnamese Army installation near Tay Ninh on January 26 is -a dramatic illustration of the increasingly aggressive tactics of the Viet Cong and of the difficulty the GVN is having in controlling the internal security situation 0 The audacity of the Viet Cong in conducting the attack^ the likelihood of VC infiltration into ARVN, the indications of secret support of the VC by some of the local populace y the successful planning and coordination in carrying out the attack as opposed to apparent failure of A3VN which had been told there might be an attack to be sufficiently alert for such an attack and effectively counter once the attack had been launched^ are indications of many of the problems faced by the GVN and discussed in this report*

Secent Viet Cong Activity

A* General Situation

The increase in Viet Cong activity in recent months can be traced back as far as the middle of September when the assassination and kidnapping rate began to rise. It will be recalled that the Government of Viet-Nam intensified its anti-VC measures during the spring of 1959 when it increased its forces engaged in internal security operations * These operations appear to have forced the VC to curtail their activities for a period of several months> regroup ,> strengthen and reorganize their cadres and establish new bases. The added precautions taken by the GVN during the period prior to and immediately following the August 30 National Assembly elections further suppressed VC activity. The two important exceptions to this relatively static period of VC operations are the acts of sabotage of farm machinery in May arid June (which backfired because of peasant resentment) and the July attack on U.S* Army personnel at the MAAG detachment in Bien Hoa.

By September 1959 the VC position was somewhat as follows: The VC had failed to cs^ry out their plans to disrupt the National Assembly elections 0 This failure placed the VC in a position of reasserting themselves in the countryside or facing a gradual decrease of their influence as the GVN improved security and pushed forward its social and economic reforms 0

Reports reaching CAS indicated that the VC hy September had become quite concerned over the possible effects of various GVN programs which were getting underway at that time. The GVN program for regrouping isolated peasants into communities was just beginning 5 the various youth organi sat ions were be costing active in the villages and the new identity card program promised to create difficulties for many VC cadres who had been provided with false identity papers 0 The VC propaganda offensive against these programs^ which was already underway during August, was intensified in September and VC harassment and violence

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directed against GVN youth began to rise*

;roups, project personnel and village officials

B # Assassinations and Kidnappings

The figures presently available indicate that assassinations and kidnappings perpetrated by the VC and other dissidents got off to a slow start in September, '59» The date on which the GVH relaxed its post-election security precautions is not available at the present time, but the VC which committed only 7* assassinations and h kidnappings in the first 13 days of September subsequently intensified their activities and by the end of September the total for the month amounted to 22 assassinations and 3^ kidnappings, according to evaluated data from various sources <, From this point the figures have continued to rise to levels considerably above the average for the past two years „ A chart prepared by the Embassy and based as nearly as possible on constant criteria, is included as Annex I to this ' reporto Deaths or persons missing as a result of participation in armed combat are not represented on this chart e Since reports are still incomplete for November and December, the figures for these months are tentative 0

Although a complete analysis of assassinations and kidnappings is not available at the present time, it has become fairly apparent that since last summer the VC have added the newly formed GVN youth groups to their list of prime targets which continue to include village officials and HEM cadres0 The vast majority of incidents has consistently occurred in the Fifth Military Region with a small number reported in the First and Capital Military Regions. Daring September and October, the months for which final figures are available, An Xuyen Province topped the list for both assassinations and kidnappings, followed by Kien Giang, Kien Phong and Phong Dinho Other Provinces in the Fifth Military Region, although far from peaceful, vary considerably from month to month*

Co VC Military Type Operations

VC activities involving military type operations such as ambushes, clashes and attacks on GVN military and civil posts have intensified in size and vigor over the past few months although, according to available information, the number of such actions increased only slightly through Decembera Statistics from GVE sources on actions and casualties of both friendly and enemy forces

* This figure includes four members of the security forces who may have been killed in action since reports simply state that they were "killed" by the VC,

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Prom Saigon ■ for the period July-December 1939 a:re shown in aii attachment . The accuracy and value of the casualty statistics is, however, open to serious questiono Comparison of ARVN data with that obtained from the NPS8 and the SDC shows frequent discrepancies in casualty figures„

The post-election intensification of VC attacks began with the completely successful engagement of two ARVN companies on September 26 The poor performance of ARVN during this operation exposed a number of weaknesses which have been commented upon by many CAS and MAAC- sources in the Vietnamese .Government• MAAG's evaluation of the factors contributing to AEVN's failure include security leaks 3 inadequate planning, lack of aggressive leader ship 3 failure to communicate information to other participating units and the failure of supporting units to press forward to engage the VC (they were close enough to hear the sound of gunfire at the time)* Another factor of importance illustrated in this ambush was the confidence of the VC in their ability to successfully conduct such operations. This self assurance and aggressiveness appear to be characteristic of many actions taken by the VC since September and have probably contributed to the low state of morale reported in GVN security units by CAS sourceso

Earlier in 1959 ARVN units were ordered to conduct operations in Phuoc Thanh Province (VC Resistance Zone "D 11 )* From March 8-19 1959 elements of the 7th Division and a paratroop group conducted an indecisive operation against the VC in this area, mainly because of difficulty in locating the VC« Toward the end of March the elements of the 7th Division were replaced by 3 battalions of the Airborne Group, 2 infantry regiments and other miscellaneous units 5 to seal off and block in the area. The Vietnamese Air Force employed 5 and later 6 F8F fighter planes to conduct air strikes. These strikes employed rocket s 3 bombs and strafing, but the only known result was the destruction of a number of VC buildings and huts 0 As the rainy season approached the emphasis was switched from operations to providing security for road construction and other civil works teams. Some patrolling in search of VC was continued throughout the rainy season, but contacts with the VC were minor and infrequent. By September, Engineer construction troops had reportedly been set to work doing road work, clearing the forests, planting trees and building houses. The 5th. Division was the principal unit engaged in the operation and was still in Phuoc Thanh as of late November, searching for VC» The bulk of the VC had apparently moved on to continue their operations elsewhere.

Major incidents in October were the following: According to a CAS report an ARVN section (which normally consists of about ^5 men) immediately surrendered when attacked by a VC group on October 10 in Kien Phong Province, ARVN, however, denies the occurrence of this incident. On October 30 a

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group of 80 to 100 VC attacked the Kien An District Office, Kien Giang Province, killing the district chief, a policeman, six CG members and four civilians. Seven civilians "were wounded and the VC after releasing about 70 prisoners from the local prison compound carried away 23 weapons and other equipment plus the district payroll, which was apparently the target of the, raid. Exact VC casualties are not known, hut were estimated to be considerable.

According to a senior GVN intelligence officer whose comments were reported by CAS in December, the VC in An Xuyen, Ba Xuyen, Kien Giang, Phong Dinh, An Giang, Kien Phong, Kien Tuong, and Long An Province numbered 2900 about twice the September 1959 figure, divided into groups of kO to 50 men. This officer expressed the opinion that VC attacks in November on isolated Civil Guard posts and AEVN patrol units in Kien Phong Province present an important change in VC strategy in the southwest and that the VC plan to become increasingly active in early i960 in an effort to prove to the people that the GVN is unable to cope with the internal security situation. An example of this type of activity is the November ik VC storming of Phong My Market in Kien Phong Province during which they reportedly set fire to a defense militia post, the information hall, three bridges and a motor-boat of the Kien Phong Security Service. Minister of Information THANH told British Ambassador PARSES on February 22 that the VC's are burning a large number of information halls, and he is very worried by the lack of protection and retaliation*

By November and December it had become apparent that the VC were operating in larger groups than those used earlier in the year and that their attacks were well planned and vigorously executed. It seems apparent, moreover, from such large scale operations as took place in late January in the provinces of Kien Hoa, Tay Ninh and Phuoc Long (Dong Xoai incident) that the VC have further increased their activities.*" Serious incidents are continuing: AEVN intelligence reports indicate that approximately twenty VC attacked a boat in Kien Giang Province on February 2 killing 12 Civil Guard and 13 civilians and wounding 11 Civil Guard, 2 other security personnel and 5 civilians and that as of February 7 VC terrorism was continuing in Kien Hoa Province„

* See Embassy telegrams 2288 (February l) 2301 (February 2); FVS 4f^l, 1*222, ^229 and 1*227 j ABMA CX-9.

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•

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Pa^e 5 of /# End No. 1 . Desp 5*o« 273 Fran Saigon

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Cfch^^ Kooent VO Activities

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CAS report conce^nln^ a li^oup or VC min-boring nearly -1000. n-en (probably exa^^ratocl} e;ucriug"G towi 3 or 4 kilometers fro.T. uon Sfr&.oa January 2^ and oporidiri;;; most of the 6&y unniolasted., si^eaainj;; VC propaganda is not tho only si-eh report of VC boldness* A~similar Incident involving about 100 Dvziecl VC occu^cc* in

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According to CAS sourcesj infiltration o forces (iiKJludiag AH'©!) baa been s part of $£? .planning throughout this period Sg*e 0-VI;i suspected th.it details or the ARVK cpa}?at5cn oi) September 23 and 2$ vrad -nade Icriov^bb the VC by persons who had

JS^Mg^g ^J ; ^ e governs en t un i t s . Snfiltraticns have cot; tributes to other VC successes^ poaaiDly iTTolucIing the Tay Kinh incident o;i January 26 c The VC,, accord inij to a C/u> report, have also in ado a special of fort-to obtain ARVH uniform* 'Seports have been received by OAS concerning encounto:7C by £Y;J patrols of what wa^ believed to be an Alxv?]' 1 patrol , but v:hich turned out to bo VC*

■

Increased activity was also noted in Contra! Viet-Kam although

tho probles 'chore ';i2fj Izzd intone than in fch ^r^&uth'^. According to CAS VC ar^ad st^srngth i:i Central Viet-Sfam in Kovemb^r v:as about 300c According to CAS scuv'coo the VC in the highlands of QuaBg %ai carrlecl ocit-cterias attacks ctu.ving- Hover^bor on the head officer of co?ifeunal councils 3ncl of the SffiSL !pbt3,y also clootroyoa bri<3g>3S a^« seotlona of roacl in an attesnpt to sabotage ecramusloatlons« Having j^ipoc^juiflue^c a a^on^ the ^o^t rL^iiiin]^ to the extent of being able *,f;n ^^'i^/^irh •^ffffgy fn th^ YJ ? 1 rh 1 ^^^*' - the VC ware repeatedly Dlanning in Kove^b^r to ^ctend tlieir'poXiticai and military activitf^^to * the coastal regions.

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&roi*v)d aliSalgJit on Kovceabe^ 5.» 25 to 30 v£ "(50-100 by another estin^at^) ar^ed with automatic ivoapor^ attacked a 15 rnan ^quad of th<5 2nd 1 Bat tali on ^ Hth _B?g^:j.neoji > Group guarding a temporary "engine a? e^tiilpsussst park nea^Di^Vu^^ Kig^assy 5) is ffiaag Kgai P^rovincja^ Four'messds^s of the squao. m^agea to oscape bat tae X'smarlnde^ v^-ire iiaeEticKeS and given a propa:>:rida lactxiro for 2 hours* Gne cJuniD igiAQit aad 1 gradsi 1 **?©?$ bur-:?.e:' ana 1 tractor was rianiaged. AxiVJa oasualti^e were 2 killed and 2 wcun<ae<3« The VC lost 2'dead left &?,.'Uxe scene of action. Oh -th« following Dight the timber decking osi an Eiffel bridge near G:?.a VUo .was buxoed by an estimated 60 Kontagnard YC„ c xho damage was repaired but the next night the KonfcagBarfi VC r-eturn^.3 and again set fire to the decking this time doing sufficient damage to require 3*'-^ days to r-Qpair-.

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From Saigon

These incidents, plus a relatively minor incident involving a VC attack on ARVN patrol on September lU some 35 kilometers south of the town of Quang Ngai are significant in that they represent the first such reports received from Central Viet-Nam of this type of violence in many months , VC activity among the Montagnards, particularly propaganda activity, intended to set the Montagnards against the GVN and its programs for economic and social development in Central Viet-Nam has "been the subject of reports by CAS and our consulate at Hue, There have also been a number of reports of VC efforts to establish bases and to recruit Montagnards for guerrilla activity.

During a visit to Kontum in late January our Consul in Hue found officials rather worried about the security situation. The Chief of Kontum's northermost district of Dak Sut said that during a three week period in January, Communists had forced or persuaded three Montagnard villages to withdraw into the mountains, out of reach of GVN administrators. This District Chief said that he and the Kontum Civil Guard Chief both think that the Communists have a major base in the Quang Nam mountains northeast of Dak Gle (the northermost point en route 1^), and predicted that communist activities in northern Kontinm and southwest Quang Nam provinces would be stepped up in I96O0 Our Consul was not permitted to go all the way to Dak Gle because on January l8 a Civil Guard force patrolling route ik was fired on by a machine gun on a hilltop between Dak Gle and Dak Rot ah,

A large scale sweep intended to flush out Viet Cong in the mountains of Quang Ngai Province has been underway since the end of October 1958, According to information obtained by USOM Public Safety Division., eleven companies of the Civil Guard and one battalion of AEVBf and two intelligence companies were employed in the initial pacification phase* The operation was reported by mid-January to have entered a second phase, that of securing the support of the local population. The new chief of Quang Ngai Province, Nguyen van TAT, told our Consul in January that additional Civil Guard Posts are being set up in the Montagnard districts of his province and that the Self Defense Corps will be greatly expanded in the Vietnamese sections. Asked about the progress of the sweep, he was non-committal, but he admitted that the security drive "will not be over for a long time",

E. DRV Intentions

In May 1959> ^he Central Committee of the Lao Dong Party passed a resolution or statement stating that the struggle for reunification would have to be carried out by all "appropriate measures" 0 British observers have taken this to mean measures other than peaceful.

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From Saigon

"You must remember we will be in Saigon tomorrow, we will be in Saigon tomorrow," these words were spoken by Premier Pham van Dong in a conversation with French Consul Georges-Picot on September 12,

1959.

In Noyember, Pham van Dong twice told Canadian Commissioner Erichsen-Brown that "we will drive the Americans into the Sea." DRV General GIAP, however, later saw Erichsen-Brown to "reassure" him that DRV intentions are peaceful. (Erichsen-Brown has been very active in trying to get the ICC to take cognizance of the VC guerrilla activities).

CAS sources have reported a gradual increase of the infiltration of VC cadres and arms from the DRV over the past few months which has increased the VC strength to about 3000 in the Southwest. (Based on available information CAS estimates that the Viet Cong strength in all South Vietnam is presently 3OOO-5OOO men). Many

I of these new infiltrators, according to a CAS source who is a

GVN official, are cadres who were regrouped in the North at the time of the Geneva Accords and have had a number of years of

I intensive military and political training. The principal infiltra-

tion route of VC cadres from the North continues to be through Laos to Cambodia although reports are received of infiltration by sea. A CAS source with similar access reports that some of the cadres arriving in SVN from the North have the mission of establishing a VC headquarters to include a general staff, a political section and a supply section and to effect a large-scale reorganization of VC cadres in the southwestern provinces (Fifth Military Region).

According to a CAS report from a Western observer based on his limited personal observation, the People's Army of Vietnam (PAVN) has continued to train its units in guerrilla type warfare in addition to training in conventional warfare* In the opinion of this Western observer, the PAVN could at any time undertake a successful campaign against the GVN utilizing the type of guerrilla tactics undertaken so effectively by the Viet Minh against the French in the IndoChina War. Another Western observer, a missionary who resided over thirty years in Vietnam, has also stated that PAVN is in excellent condition to carry on guerrilla warfare.

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Desp Wo. 278 From Saieon

A recent CAS report (FVS-ij-2^9)* indicates that the VC are presently planning to augment their forces, particularly in An Xuyen, Kien Giang, Phong Dirih, Kien Phong and Kien Tuong Province and that they will press general guerrilla warfare in South Vietnam during i960. This guerrilla warfare would he under the flag of the People's Liberation Movement (reports of a number of recent incidents mention the flying of a red flag with a blue star). The VC reportedly estimate that 70% of the people in the rural areas of South Vietnam are either embittered by or indifferent toward the present government. According to this report the VC are convinced they can bring about a coup d'etat in i960, and are presently considering three ways to do this: (l) to incite the GVH military forces to revolt and to penetrate the new government to steer it into a neutralist policy; (2) to force the GVN to use harsh repressive measures against the people by organizing widespread popular uprisings-j thereby laying the foundation for open revolt; (3) to set up popular front provisional governments in the Trans-Bassac area as the general guerrilla warfare mentioned above progresses (the VC estimate that they have sufficient penetrations in or control,over village level administration to make this possible). The alternative which is selected will, according to the source, depend upon VC progress during the first four months of this year.

President Diem told the Ambassador and General WILLIAMS in late February about the capture of a document by GVH security forces outlining VC plans to further step up aggressive attacks all over the country, including Saigon. These operations are ! planned to begin in the second quarter of i960. (CAS has seen j the document and believes it to be authentic - see FVS-U292).

Military Factors Affecting the Internal Security Situa tion

GVN internal security operations in 1959 employed an average of 25 ARTO battalions, W^OOO Civil Guards, ^3,000 SDC, 6,000 Surete, as well as the Gendermerie, Self Guard Youth Corps and HEM memberr for which figures are not presently available. This impressive number of personnel has, however, failed to keep VC and dissident activities under control. Numerous high-ranking GVN officials have very recently stressed the necessity of more anti-guerrilla training for the security forces. From a military point of view an outstanding deficiency iri the GVN effort has been the government's

* See also FVS-^220 and FVS-^263.

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inability, or lack of desire, to recognize the following factors: (l) It is actively engaged in an internal war and, therefore, . mist take the measures which this situation entails. (2) There is a great need for a strong central military command with wide powers for the conduct of internal security operations in the unpacified"areas. (3) There is a need for a capable, well-equipped, well-trained, centrally-controlled Civil Guard to take over from the Military in pacified areas.

It cannot be emphasized too strongly that the apparent lack of success in the GVN attempts to reduce the internal threat of the VC until now has stemmed from the lack of unity of command in a single operational commander who has the means and the authority to utilize all of the potential in the area of operations without regard to province or regional boundaries and without regard to the existing political subdivision of the area. Unity of command is the most important basic principle of administration lacking here. The Province Chief structure has caused a breakdown of coordination and a fragmentation of command structure which has blocked an effective attack on the internal security problem.

The fact that the GVN, though striving to bring its military organization to a high state of training, is constantly plagued by the diversion of an average of 25 battalions to an internal security mission is indicative that a serious internal threat exists. The resulting piecemeal commitment of the armed forces has obviously been generally unsatisfactory because of the lack of a strong central command which could effectively coordinate j and control all security functions in the area of operations. ' (See subsequent "GVN Reactions" section re recent action taken to centralize command in the Fifth Military Region). '

Political Factors Affecting the Internal Security Situation

It is highly unlikely that any final solution can be found to the internal security situation in South Vietnam if the GVN does not enjoy the support and cooperation of the rural population. At the present time indications are that the rural population is generally apathetic towards the Diem Government and there are signs of considerable dissatisfaction and silent opposition. In part this attitude appears to result from widespread fear of the • , Viet Cong and a belief that the GVN is relatively helpless to protect the rural population from Viet Cong depredations. Unfortunately the longer serious insecurity continues to exist in the countryside despite GVN efforts to control- it, the more serious is the effect on the GVN's prestige. Another effect is a growing belief among the peasants that the Viet Cong-will always be here as long as North Vietnam remains under Communist control and that they must adjust to live'with them. .(A realization of the long-range nature of the problem among officials responsible for

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dealing with it could be an advantage. In Malaya it has taken 11 years to reduce the security situation to the minimum, and it is even more difficult to deal with it in a divided country with long exposed frontiers).

There appear to be other reasons contributing to the difficulty experienced by the GVN in attempting to rally the rural population:* (a) Until recently it was becoming more and more apparent that Diem was not being given accurate information on the internal security and political situation in rural areas. As late as the end of December , 1959* be was telling all callers how much better the internal security situation had become, despite many doubts raised by his listeners. Information was apparently being presented to him by local officials in such a manner as to reflect well upon the officials giving it. The President's trips to the provinces have appeared to be carefully "laid on" by local officials. The President himself cannot be absolved entirely from the blame, however, since his system of personal rule which permits direct appeal from the individual provincial authorities to himself, in a sort of intra-executive check and balance system, serves to further weaken the administrative apparatus.

Recently 3 however, as indicated in the subsequent section on "GVN" Reactions," the Vice President and others who are not his usual informers on security matters have spoken frankly with him and he now seems well aware of the situation; (b) Provincial and district authorities exercise almost autonomous control in the areas under their jurisdiction. Too often the personnel holding these positions have been incompetent, having been chosen for reason of party loyalty. Moreover, some have tended to view their jobs as a means to personal advancement or financial gain** often

* See also FVS-U220 and FVS-4228.

** The local press from time to time reports incidents of extortion and blackmail by local officials. On December 1 Le Song in an editorial cited "numerous cases of abuse of power committed by village police officials such as extortion of money and bribery." Examples like the following are to be found in various reports in the press and from varioxis CAS and USOM sources:

On February 13 Tu Do reported that a hamlet chief in Binh Tuong Province had been arrested for posing as a security agent and blackmailing four farmers, A USOM source in July reported that a District Chief of Security in Blao had reportedly been removed from his position for extorting sums of money from wealthy residents who were arrested on charges of being Communist sympathizers and had to pay for their release.

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Desp No, 2?8 From Saigon

at the cost of the population under their control. Press editorials have attacked local officials for extorting money from

peasants, using torture to wring false confessions from innocent

people and conducting themselves in such a manner as to reflect

adversely on the prestige of the national government. In addition

rumors continue to circulate among the population concerning the

alleged nefarious activities of and favoritism shown to members

of the Can Lao party. While officials have been largely unable

to identify and put out of commission Viet Cong undercover cadres

among the population, they have often arrested people on the basis

of rumors or of denunciations by people who harbor only personal

grudges. Police powers justified on the basis of the needs of

internal security have reportedly been misused to extort money

not only from the peasants but from land owners, merchants and

professional people in the towns. This misuse of police powers

and the kind of broad scale arrests on suspicion are weakening

the support of the population for the regime. On the other hand,

the application of swift, summary justice (such as the Special

Military Tribunals were created to hand out) designed to protect

the population against the Viet Cong threat, if carefully

administered and "advertised" as such, can do much to restore a

feeling of security;* (c) While the GVN has made an effort to

meet the economic and social needs of the rural populations

through community development, the construction of schools,

hospitals, roads, etc., these projects appear to have enjoyed only

a measure of success In creating support, for the government and,

in fact, In many instances have resulted in resentment. Basically,

the problem appears to be that such projects have been imposed on

the people without adequate psychological preparation in terms of

the benefits to be gained. Since most of these projects call for

sacrifice on the part of the population (in the form of allegedly

"volunteer" labor in the case of construction, time away from jobs

or school in the case of rural youth groups, leaving homes and

lands in the case of regrouping isolated peasants), they are bound

to be opposed unless they represent a partnership effort for

mutual be efit on the part of the population and the government.

(See subsequent section on "GVN Reactions" for indications of

Diem 1 s current awareness of this problem).

The situation may be summed up in the fact that the government has tended to treat the population with suspicion or to coerce it and has. been rewarded with an attitude of apathy or resentment.

* Ensuing section on "GVN Reactions" shows Diem now aware of incompetence and abuse of power by many officials.

SECEET-gOFOPJT 1268

Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 2011

Page 12 of 18 SECRET-NQFORN End Wo, 1

Desp Wo. 2?8 From Saigon

The basic factor which has been lacking is a felling of rapport between the government and the population. The people have not identified themselves with the government. There has been a general lack of "a sense of mission" in the building of the country among both the local population and local authorities. In the past at least Diem has contributed to this attitude by his constant admonition to the villagers he talks to on his trips throughout the country that they must work harder , do more for themselves, and not complain. He has made little effort to praise them for what they have accomplished or explain the reasons for the demands he places on the population. He has none of the demagogue in him., but is rather still the mandarin. How that he realizes the feelings of the people, it is to be hoped that he will show more solicitude for their needs and feelings, burt this will not be easy for him to do.

Possibly another factor adversely affecting the current attitude of the peasants toward the Government is the decline over I . recent months in the price of paddy. Since the population in the

I Southwestern delta is particularly dependent on paddy for its

income, it would be a normal political reaction for this development to increase dissatisfaction with the government.

GVN Reactions to Current Internal Security Situation

President Diem, who had earlier taken the position in conversations with Ambassador Durbrow that the GVN's security operations had broken up many VC camps and forced them to regroup into larger forces, has modified his assessment considerably after the Tay Ninh attack and other recent manifestations of expanded VC activities. Previously indicating that VC reinforcements had come from Cambodia, Diem in his latest conversation with the Ambassador on February 12 stated the VC had been reenforced by well-trained forces from North Vietnam. In his view the recent step-up in VC activities is basically a somewhat desperate attempt to disrupt the progress of South Vietnam. He does not appear : I to be deeply alarmed, but, on the contrary, feels that with

I' measures he has in mind the situation should greatly improve in a,

few months. He believes the security forces need more anti-guerrilla training, but also thinks more security forces are needed in order to provide better protection for the entire population. He has called for volunteers from military reservists who had long guerrilla experience dwing the Indochina War as well as from ARVN and the Civil Guard, and has indicated that over 1000 have already volunteered.

Diem also now shows awareness of many of the political factors which have contributed to the deterioration in internal security. By the end of February in conversations with the Ambassador and

SECRET-K0F0RN

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

Page 13 of 18 SECRET-N0F0RN End Wo, 1

Desp Wo, 278 From Saigon

other foreign officials Diem has become very frank in admitting that many of the civilian administrators have been incompetent and have abused their power. He has added he is removing these and placing competent men in their jobs whose principal duty will be to pay attention to the needs of the population and make every effort to win their confidence. The President has become quite aware of the adverse reaction of the people to indiscriminate use of methods of coercion in carrying out the government's programs in rural areas. He explained to the Ambassador at some length on February 22 the urgent need for civilian officials to explain in detail the reasons for the government's actions in these matters in order that the population will fully understand how they will benefit in the long run.

Wgo Dinh NHU, the President's brother and political advisor, also told CAS on February 5 that the security forces need more anti-guerrilla training. He added, however, that political measures are the real key to defense against the VC attacks, and mentioned specifically that GVW officials should consider political aspects of a situation and not just concentrate on rapid physical results to please the President.

In late January Vice President Nguyen Wgoc THO, according to a CAS report > had a discussion with President Diem in which he pointed out his belief that the reports which the President had been receiving on internal security were incorrect as they underestimated the size of the VC network in South Vietnam. He reportedly reminded the President that he had told him a year and a half ago that the GVW did not have a correct estimate of VC strength and, unless this were obtained, the time would come when the country would be unable to cope with VC subversion. Privately Tho was said to have placed the blame for GVW loss of support among the peasantry on province chiefs whose only activity was to apply police powers strictly. He also was said to have indicated that both Wgo Dinh Hhu and the WRM leaders, through the province chiefs, were resj nsible for providing completely erroneous and optimistic reports about the security situation. In a conversation with Ambassador Durbrow shortly after the Tay Winh attack Tho expressed concern over the seriousness of the internal security situation, and he also urged more anti-guerrilla training of the GVW security forces.

Lieutenant General Le van TY, Chief of Staff of the Vietnamese Army, has also expressed the view that further anti-guerrilla training is required. In addition, according to MAAG, soon after the Tay Winh attack a meeting was held hy the Assistant Secretary of Defense with the Chief of Staff and Corps and Field Commanders at which it was decided to make certain recommendations to the President. These recommendations included adherence to the chain

SECRET-W0F0RN

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 i

SECRET-NOFORN

Page Ik of 18 End No. 1 Desp No. 2?8 From Saigon

of command by the Presidency; assignment of commanders to be made on recommendations of the General Staff through the Department of Defense to the President as contrasted with recommendation to the President by civilian and political advisers; clarification and definition of the responsibility and authority between the province chiefs, military regional commanders and local troop commanders; and centralization of control of the various intelligence agencies.

Indications have been received that at least some of the ideas which have been expressed by GVN officials are being implemented. President Diem has told Ambassador Durbrow that Colonel Nguyen KHANH, newly designated commander of the Fifth Military Region (the southwestern area where insecurity is the worst), has been given fall military powers over the security forces of the area regardless of the prerogatives of the province chiefs. Diem also said that the GVN is extending an earlier plan of appointing military officers as deputy province chiefs responsible for security, and has placed them under the control of the military regional commander.

According to a CAS report, the Assistant Secretary of State for Defense issued a directive on February 1 ordering concentration on anti-guerrilla training and tactics and enforcement of maximum ■security at all military posts.

Another CAS report states that President Diem, as a result of recent urgings for improvement in relations between the Government and the peasants, has ordered a slowdown in the program of building regroupment centers ("agrovilles"). Secretary of State for the Presidency TRUAN told Ambassador Durbrow on February 17, however, that this program must be continued but perhaps at a slower pace, as there is no way to provide protection to isolated farm houses other than by regrouping such peasants into larger communities. He admitted that the-peasants have the normal human reaction jf disliking being forced to work on the regroupment centers, but he believes that after the centers have been completed they will see the advantages offered. Diem told the Ambassador on February 22 that, while he must continue to create "agrovilles," he is not planning to push too fast until one or two pilot towns are in being so that the peasants can learn for themselves the many advantages of this sort of rural organization.

CAS also reported that the NRM recently dispatched special cadres to the provinces to obtain for the President information on cases of dissatisfaction with high-handed or dictatorial attitudes of local officials. Intelligence committees have also been formed in each province which will report to the President through the Minister of Interior. Diem told the Ambassador he had

SECKET-NOFORN

Declassitlifl per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

Page 15 of 18

SECRET-NOFOBN End No. 1

Desp No. 278 From Saigon

been impressed by the centralized intelligence organization he learned about during his visit to Malaya in mid-February. Diem inferred he is planning to adopt this system.

SECRET-NQPOEN

—

* ■

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■a s > s

ex E

I*

SECRET-N0F0RN

Page 16 of 18 Desp No. 278

ANNEX I

The number of assassinations and kidnappings by months during the past two years are shown in the following

chart:

Assassinations

Kidnappings

Assassinations

Kidnappings

Assassinations

Kidnappings

Assassinations

Kidnappings

1958

JAN

10

25

1258

JULY

16

22

FEB

36

AUG

12

11

MARCH

26

43

SEPT

22 34

APRIL

17

12

OCT

29

42

MAY

13

NOV

8

19

MAY

16

22

35 89

JUNE

21

15

DEC

21

20

JUNE

5 15

33 48

TOTAL

TOTAL

70

131

TOTAL

86

97

1V7

246

TOTAL FOR SIX MONTH PERIOD

123 105

1958 TOTAL

193 236

233 343

H

NOTE: Figures compiled by MAAG based on ARVN reports show 96 civilians killed and 37 civilians kidnapped during January and 122 civilians killed, 72 kidnapped in February, I960* Figures for these months for assassinations and kidnappings may be slightly higher(but 'will not greatly differ from these Hgures) after investigation based on other sources * T *

Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 201J

'+

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 i

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COMr/.ITTKG OU FOREIGN r:SLATIONS

Hay 5; 19^0

Lt. General Samuel 3?> ttilliaras Chief of MUG Saigon, Viet Haar

4

■Pear General Williams:

■

During hearings on the Vietnamese Aid-Program before a Senate Foreign Relations Subcommittee last summer (July 30 &nd July 31), you were most helpful in providing the Members with clear and concise responses to questions concerning KAAG-Vieinaa- We found your testimony of great value and it was a major source of information for the Subcommittee's report which j as you" r:.-},y be aware, drew very favorable conclusions as regards the military • aid protean in Viet Ham*

I do not Kind telling you that 1 was personally very impressed with that portion of your testimony which Suggested to tie that you were directing the military aid program in a fashion which' was, wisely, aieed at working KAAG ,f Out of a job" and that you rind about reached a point where the scaling down could begin. Therefore, it carie as something of a surprise to me to learn "frcua a U.P.I, dispatch 0/31; May 5, 1960) that we intend to double the training staff of MUG in Viet tfam by adding to it 3^0 men.

Assuming the general accuracy of this dispatch I would very much appreciate such responses as you may wish to supply to the following questions:

(3,) As specifically ?„s possible, what changes have occurred in the Vietnamese situation which require the addition of 350 c-en" to the K4AG Diss ion? * f

, (2) If the need is for experts in guerrilla warfare, cannot such experts be substituted for those already engaged in other training gursuiis in Viet lian rather than siieply addin.3 to them? 1

(3) Was the need to increase the SSAG determined by you personally and did you initiate the request for additional personnel?

■ . , (h) . If so, did you have the concurrence of the Ambassador ..1 the request?

1276

w ■ *

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

Lt. General S&iauel !*• Williams

- 2 -

r.

May 5, I960

$

This letter is transmitted through Department of Defense channels but in view of your helpfulness in the past, I loo]; forward to your replies vith interest and with thanks.

With kindest personal regards, I em

Sincere

Srtf

]dJlJ?

ours, f

-M)

•

x 11 (

c

Declassified per Executive Order 13526, Section 3.3 NND Pfojeci Number: NND 63316. By: NWD Date: 2011

UPI — (#31, May 5, i960)

The U.S. is doubling its military training staff in South Vietnam and stepping up the training of Vietnamese troops for guerrilla warfare against Communist terrorists.

The decision reflects concern about the mounting strength and boldness of Communist bands which are raiding villages and assassinating Vietnamese officials. However, U.S. military and diplomatic officials said the Communist campaign is not a "crisis" and in itself, is not likely to become a major threat to the government of President Ngo Dinh Diem.

Guerrilla warfare specialists will be included among about 350 additional American military training officers and men sent to Vietnam.

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 i

j

hum VjlA

DEPARTMENT OF THE ARMY STAFF COMMUNICATIONS OFFICE MESSAGE

CONFIDENTIAL AC PARAPHRASE NOT REQUIRED

PRIORITY Except prior to Category B encryption

Physically remove all internal refs by DTG prior to declassification No unclass ref if DTG is quoted

FROM: CHMAAG SAIGON VIET-NAM

TO: - OSD/lSA WASH DC

INFO: CINCPAC CP H M SMITH HAWAII, JCS WASH DC

NR: MAGCH-CH 691 2007HZ MAY 60

Reference UNCLASS DEF U87183 to CHMAAG Saigon DTG 182016Z May,

Attn Asst to Secy for Legislative Affairs. Request you pass following to Senator Mansfield soonest.

Dear Senator Mansfield: Your letter of 5 May passed to me by DOD received Saigon 19 May, Full reply enroute by airmail. As interim reply UPI dispatch number 31, May 5? 19^0 to which you refer not entirely factual. Specifically US training staff not being doubled as stated in UPI dispatch. The 350 US"civilian technicians 11 mentioned in news items as sorting and shipping arms left by French forces undoubtedly refers to US military personnel of the temporary equipment recovery mission, short title TEEM, now in process deactivation. Maintenance of total overall MAGG-TEHM advisor strength of 385 for time being is at urgent request GVN with full concurrence Ambassador, CINCPAC, DOD, State Department and myself. Total advisor strength to be considerably lower than total 85O US and French MAAG at time of Geneva accords and slightly lower than total MAAG-TERM strength. Following sentence classified CONFIDENTIAL: Change over of TERM excess to MAAG ends subterfuge as actually TERM has had undercover mission as logistical advisors since activation. Project began before current step-up guerrilla activities. Small number US experts in guerrilla warfare recently brought in on TDY as substitutes for regular MAAG advisors and are within previous overall strength. It is my personal opinion MAAG should and can work itself "out of job" with possible reduction approximately J 15 per cent in June 6l and approximately 20 per cent reduction

I DA IN 102U6 (20 MAY 60) -

Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316. By: NWD Date: 2011

• ■

SYA.T COU?.;tfNiCATiO-\*S OfUCE

I

PAGE 2

t c, f\ ., ! J

y<jar]y there after dsp^ndrng of coi.rnc on r:^c'inoo

et subsequent c^los* Very Truly Yours, signed iljlliaas

.•

* *

/

ACT! OH: OSD, DCSO?

IHKO

c

CCS j CLL

ACS

* ^

DCSPEf^

PA (PS AT FMVY P'T nrsi rw

DA 111 .02-':

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(20 Way SO;

blh/8

1230

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1

NSC 6012

a *

July 25, 19&>

Declassified per Executive Order 13526, Section 33 NND Project Number: NND 63316, By: NWD Date: 2011

#►.-***•

aferences:

NOTE BY THE EXECUTIVE SECRETARY

to the ; NATIONAL SBCURIT/ COUNCIL

on U. S. FOLIC? IN MAINIAND SOUTHEAST ASIA

,.^»-,.^»--»»-V Mf«-,

A.

C.

D.

SECRET

E

HSC

OCB Special Report on HSC 5809,

Sated February 10, i960 NSC Action No. 2193 &3IC03 for NSC from Executive Secretary,

sat/ie subject, flo.tscl July 11 and 18,

19^0 •

NSC Action No. 22o?

1

t

H

i

1

I

/

I

l

I

I

I

I

' m

The National Security Council, the Secretary of the Treasury, the Secretary of Conferee, and Mr. Blicer B. Staats for the Director, Bureau of the BuSgstj at the k52ncL NSC Meeting on July 21, 19o0, adopted the changes to NSC 5809 transmitted by the reference nienorandusi of July 11, i960 (KSC Action Ho- 2267).

The President, as of this date, approved the changes to NSC 5809, vhich as e&en&ed is enclosed herewith as NSC 6012; directs the implementation of NSC 6012 "by all appropriate Executive departments and agencies of the U. S. Government; and designates the Operations Coordinating Board tie the coordinating agency.

A revised Financial Appendix,, in prepaxation pursuant to NSC Action No- 22o7-d, will be circulated later.

■

By NSC Action No- 2267-5* the Council agreed that, at ouch time as policy decisions are required as to vhethe* jet aircraft should be provided to Caiaboaia or Viet Nam, these questions should be referred to the National Security Council for consideration.

The enclosed statement of policy, as approved, supersedes NSC 5S09.,

JAMES 8. I AY, JR. Executive Secretary

c

cc: The Secretary 0? the Treasury The Attorney General The Secretary of Conferee The Director, Bureau of the Budget The Chairtnn, Joint Chiefs of Staff The Director of Central Intelligence

. KSC 6012

1281

raw?*

Declassified per Executive Order 13526, Section 3.3 NND Prnjeci Number: NND 63316. By: NWD Date: 2011

I

• ■

}

-

i

■

t ^

SECRET

STATEMENT OF POLICY

on U. S. POLICY IN MAINLAND SOUTHEAST ASIA*

!--»-,• »~- "^S.

I. GENERAL CONSIDERATIONS

1« General♦ Since Mainland Southeast Asia does not represent a unified area, courses of action must generally be x determined in" the light of widely varying country sltua**. felons. However, basic objectives and main directions of U, S, policy can and should be established on a regional basis* .

2, Consequences of Communist Domination, The national

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security of the United States would be endangered by Communist domination of Mainland Southeast Asia, whether achieved by overt aggression, subversion, or a political and economic offensive.

a. The loss to Communist control of any single free country would encourage tendencies toward accommodation by the rest,

b. The loss of the entire area would have a

* seriously adverse impact on the U* S. position elsewhere in the Par East, have severe economic consequences for many nations of the Free World," add significant resources to the Communist Bloc in rice, rubber, tin end other minerals, and could result in severe economic and political pressures on Japsn.and. India for accommodation to the Communist Bloc/ The loss of Southeast Asia mainland could thus have farreaching consequences seriously adverse to U. S. security interests.

3 • The Ctoianmalgt Threat

&• P y er t A^gres si on, Although Communist pol cy now emphasizes non-military methods, the danger of overt aggression will remain inherent so long as Communist China and North Viet Nam continue a basically hos J lie policy supported by substantial military forces. There

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is only a cease-fire in Viet Nam and sporadic hostilities continue in Laos,, The Viet Minh have continued to improve their combat capabilities since the Geneva " ' Conference of 195*K '

J>* S ^ yQ gB/i pn.i In most countries of Southeast Asia a threat also "ari¥es from the existence of extensive local Communist capabilities for all types of subversive activities 5 ranging up to armed insurrection. Additionally^ the large overseas Chinese communities in Southeast Asia offer a fertile field for subversion. The weak internal security systems of the Southeast Asian ;■ states make them highly vulnerable to such activities e

£• Communi s t Pol it i c a_l and Ec onoml c _ Offen s i v e, At j ! present overt aggression and, except in the cases of

Viet Nam and Laos, militant subversion are less likely than en intensified campaign of .Communist political, economic and cultural penetration in the area. The- * \ ' political instability, economic backwardness, export

problems, and extreme nationalism of these countries provide many opportunities for Communist exploitation j ' by trade and economic assistance, conventional political

; . " and diplomatic activity, and extensive infiltration. r _ This offensive now constitutes a threat to U t S. inter-^ ests more subtle and more difficult to cope with than

other threats.

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^t U. S. Role, The United States is likely to -remain the only major outside source of power to counteract the Russian-Chinese Communist t'rrust into Southeast Asia* Thus, the retention of this area in ttfe Free World will continue to depend on the extent and effectiveness of U. S. support as well as on the local efforts of the countries themselves;

£• PoLltAPiQ..* The underlying purpose of U. S. I \ assistance in the area is to help the non-Communist

■ * \ countries develop more effective political organizations, strengthen their internal administration and enlist greater allegiance in both urban and rural districts. In part, this purpose will be served by programs for military and economic aid dealt with below* In part it • " vail require an intensification of present programs for

training competent Asian managerial and technical personnel. And 5 in part, new approaches, both governmental and privatej will be needed. These should not concentrate exclusively at the national level, but should include activities designed to strengthen and*vitalize ' ■ indigenous traditions and institutions and to have an impact on village life 3 rural society, and educational systems.

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b* Military , Because these countr5.es do not have the capability of creating armed forces Which could effectively resist large-scale external aggression, the United States will'be required to provide a basic shield against Communist aggression. For the foreseeable future,, local will to resist aggression will depend on a conviction in Southeast Asia that the United States will continue its support and will maintain striking forces adequate to counter aggression in Southeast Asia with . the "capabilities described in current basic national security policy. The combination of such U. S. forces and local will to resist would constitute the best deterrent against aggression. Should the deterrent fails this combination would also provide the most effective insurance that, in conjunction with indigenous and all-led forces, the United States could suppress aggression in the area quickly and in a manner and on a scale best calculated to avoid the hostilities broadening into general war.

e. Economic and Tech nical. The insistence, throughout most of the area 5 on economic development provides the strongest lever for the exertion of influence by the Free World or by the Communist Bloc. Without increased external help from some source, most of the governments of the area will be unable, even with adequate indigenous effort, to manage the political demand for rapid betterment in the conditions of life and provide for sound economic development. Failure to obtain such assistance from the Free World will tend to drive these countries toward economic dependence 'on the Communist" Bloc. The general preference in Southeast Asia for Western technical and economic assistance gives the United States and the Free World an opportunity to obtain primacy over Communist efforts in key economic sectors. The outcome may, however, be strongly influenced by the success v/ith which the Free World can cope with Communist efforts to exploit the existence of Southeast Asian export problems, particularly those involving rice. In the period ahead, flexibility of U. S. procedure and rapidity of U, S. action will be increasingly important, if effective advantage is to be taken of unexpected and transient opportunities.

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5* The Problem of Regional Asspciatipn. Over the long run, the small, vulnerable* and essentially dependent nations of Southeast Asia cannot exist satisfactorily as free nations without closer associations than now exist.

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6. The Problem, of .Alignrnent-, To preserve their independence," strengthen "their internal stability, and protect themselves against aggression- some countries in Southeast Asia prefer to join regional security arrangements * Some, however, prefer to avoid alignment with other nations* The basic objective of both groups is to maintain the independence of their countries free of outside interference or dictation, and the independence and vitality of both are important to .the United States and to each other♦

II» POLICY CONCLUSIONS

7« The national independence of the mainland Southeast Asian states is important to the security interests of the United States. If such independence is to be pre-served, U. S, policies must seek to build sufficient strength in the area at least to identify aggression s suppress subversion, prevent Communist political and economic domination, and assist the non-Communist governments to consolidate their domestic positions• U., S. policy should not depend primarily on the degree and nature of Communist activity at any particular time, but should seek to promote these goals within the limits of the economic capacities of the countries concerned and U. S, resources available for the area,

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8,* Where a national determination to maintain independence and oppose external aggression is sufficiently maiiifest, the United States should be prepared to provide military assistance based upon ths missions of the forces as indicated in the f: Country Courses of Action" (Part V, below). • ♦..'-•' .."..,;

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4 9. In the event of aggression against a Southeast Asian state willing to resist, the provisions of the UU Charter or the SEATO Treaty should be invoked, but the United States should not forgo necessary action in behalf of such a state or states because of the possibility that other allies might be loath to participate or to furnish more than token military forces,

10. In the long run, the ability of the non-Communist governments to attain political, economic and social objectives will be the dominant factor in defeating the Communist attempts to dominate Southeast Asia. The United States should assist the non-Communist states of the area to formulate and execute programs designed to promote conditions of sound development, to demonstrate that they can achieve growth without reliance on Communist methods or dependence on the Communist Bloc, and to give their peoples a greater stake in the continued independence of their countries

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11. The United States should continue to make clear its o\>m devotion to the principle of collective- security 3 its belief that regional security arrangements provide maximum protection at minimum cost for all, and its expectation that a|country f s decision to participate in such arrangements is based on its own calculation of its "best interests and does not of itself constitute a claim for increased financial aid. Where countries participate; measures to assure adherence are desirable,- normally including preferential treatment in the fields of economic and military assistance as justified by U 0 So strategic objectives* Where new opportunities for affiliation develop they should be encouraged* The United States should, however, accept the right of each 'nation to choose its own path to the future, and should not exert pressure to make active allies of countries not so inclined. * The genuine independence of such countries from Communism serves U # S c interests even .though they are not formally aligned with the United States. The United States should accordingly support and assist them so long as, they remain determined to preserve their own independence and are actively pursuing policies to this end.'

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'III. OBJECTIVES

12. To prevent the countries of Southeast Asia from passing into or becoming economically dependent upon the Communist Bloc; to persuade them that their best interests lie in greater cooperation and stronger affiliations with the rest of the Free World; and to assist them to develop toward stable, free representative governments with the will and ability to- resist Communism from within and without s and thereby to contribute to the strengthening of the Free World.

IV. REGIONAL., COURSES OP ACT ION*

13# Support and assist the countries of the area on the basis of their will and ability to defend and■strengthen their independence.

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1^. Respect each country's choice of national policy for preserving its independence, but make every effort to demonstrate the advantages of greater cooperation and closer alignment with the Free World, as well as the dangers of alignment with the Communist Bloc.

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• The following courses of action are not applicable to the State of Singapore at this time: paragraphs 13, 1^, 3 6, 22~a, and 32.

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15. Encourage the countries of Southeast Asia to cooperate closely v;ith each other on a basis of mutual aid and support 5 and support indigenous efforts to develop regional associations so long as they do not weaken SEATO or the spirit of resistance to Communism,

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16. Participate actively in SEATO, and seek to develop both its military and non-military aspects in a manner that will convincingly^demonstrate the value of SEATO as a association, the usefulness of which extends beyond deterrence of Communist expansion. Encourage limited participation of non-Communist, non-SEATQ Asian nations in certain

.SEATO activities. .

17, Encourage and support the spirit of resistance among the peoples of So.utheast Asia to Chinese Communist aggression as well as the indigenous Communist insurrection, subversion, and propaganda.

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18* Encourage the Governments of Laos, Thailand, and Viet Nam to maintain close relations with the GRC and to support its international position as the Government of China, Having in mind the desirability, from the U. S. point of view, of Halaya and Singapore developing closer relations with the GRC, encourage these Governments, as appropriate, to take steps that will lead ultimately to this objective. Seek to ensure that Malaya does not recognize the Chinese Communist regime or support""its seating -in the United Nations as the Government of China, and that Singapore does not develop closer economic or cultural relations with Communist China, Encourage the. countries of the area to eschew relations with the Communist regimes in North Korea and North Viet Nam and to support the international position •of fcKe Governments of the Republics of Viet Nam and of Korea*

19» Maintain- in the general area of the Par East, Uo S forces.adequate to exert a deterrent influence against Communist aggression, in conformity with current basic national security policy.

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20. Should overt Communist aggression occur in the Southeast Asian treaty area, invoke ! .he UN Charter or the SEATO Treaty, or both as applicable; and subject to local request for assistance take necessary military a&& any other action to assist any Mainland Southeast Asian state or dependent territory in the SEATO area willing to resist Communist resort to force: Provided * that the taking of military ?~etion shall be subject to prior submission to and approval by the Congress unless the emergency is deemed by the President to be so great that immediate action is necessary to save a vital interest of the United States.

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21* In case of an imminent or actual Communist attempt to seize control from within, and assuming some manifest local desire for U. S. assistance, take all feasible measures to thwart the attempt, including even military action after appropriate Congressional action*

22. As appropriate, assist the police forces in Southeast Asian countries to obtain training and equipment to detect and contain Communist activities,

23. In order to strengthen the noii-Communist governments of the area and to help forestall their economic dependence on the Communist Bloc:

a. ProvJxLe flexible economic and technical assistance as necessary to attain U. S, objectives , In the

- framing of U. S. aid programs to Southeast Asian countri take into account the economic and technical assistance being provided "hy other Free World nations and by international institutions s coordinating with such nations and institutions where appropriate.

b. Encourage*measures to imurove the climate for privcite investment! both domestic and foreign, and to mobilize the maximum investment of U» S. private capital in the area consistent with the prevailing climate,

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c. Encourage United Nations agencies, other Colombo Plan countries, and other friendly-countries to contribute available resources to promote the economic growth of Southeast Asia.

d» Encourage the Southeast Asian countries to. orient their economies in the direction of the Free World axid to rely primarily on non-Communist markets and sources of supply for trade, technicians, capital development, and atomic development. . |

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e» In carrying out programs involving disposal of U. S. agricultural surpluses abroad:

(1) Give particular attention to the eco* jjale vulnerabilities of the Southeast Asian countries • and avoid, to the maximum extent practicable, ■ detracting from the ability of these countries to market their own exportable produce* ' *

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(2) Give particular emphasis to the use of the resources to promote multilateral trade and economic development.

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f. Promote as appropriate the expansion of trade relationships between the United. States and the countries of Southeast Asia, ^ *

L g w Take advantage of adverse local reactions to I Communist barter agreements with countries in- the area Iby demonstrating the advantages to these countries of Iconductiftg trade on a multilateral commercial basis.

24, Make a special,, sustained effort to help educate »0 expanding number of technically competent pro-Western civilian and military leaders,, working bilaterally, through the United Nations, with the other Colombo Plan countries and with other friendly countries, -Stress the development of potential and secondary leadership to support the thin stratum of felite now administering the central governments and bring to their support modern techniques and technology in public information and organization."

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25, Place increased emphasis on community development projectsj educational programs., and other activities aimed to influence the welfare and attitudes of the people at the

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26, Strengthen informational., cultural and educational activitiesj as appropriate, to foster increased alignment of the people v/ith the Free World and to contribul >; to an understanding of Communist aims and techniques.

27, Hold or reduce the number of U, S. officials in each country to a strict minimum consistent with sound implementation of erx'ential programs, in order to head off an adverse political reaction to the presence of a large number of Americans in relatively privileged positions.

28, Promote increasing Asian Buddhist contact v/ith and knowledge of the Free World, .Explore with friendly religious organizations ways of developing Buddhist fraternal associations and identification with Free World religious leaders * and movements,

/ 29. When not .in conflict v/ith other U. S. political objectives, continue activities designed to encourage the overseas Chinese in Southeast Asia (a) to integrate fully and as rapidly as -practicable into the national life of their host countries, becoming loyal citizens and identifying themselves with the interests of these countries; (b) to support and participate in anti-Communist activities in their countries of domicile; (c) to resist Communist efforts to infiltrate and gain control of their communities. Seek to .

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n siire that elements within these communities that continue t 0 °feel and act as Chinese rather than "as citizens of their * tost countries look to the' GRC as the custodian of Chinese Voclal and cultural values and support it as the representative of the interests and aspirations of the Chinese people,

130* Discreetly encourage the governments of the countrie ■ 0 f the area to .promote and facilitate the integration of racial minorities,- bearing in mind that the extent'and pace 0 f such integration will be affected by the willingness of the host countries to permit the overseas Chinese and other minorities to participate in the national life without discrimination. '

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32 # Promote economic cooperation between the countries of the area and Japan and with the Government of the Republic of China,, to the extent feasible without jeopardizing the achievement of U. S. objectives toward the individual Southeast Asian countries.

33• I n order to promote increased cooperation in the area and to deny the general area of the Mekong River Basin to Communist influence or domination^ assist.as feasible in the development of the Mekong River Bas^n as a nucleus for regional cooperation and mutual aid. * 1

3'K Should any country in the* area cease to demonstrate a will to resist internal Communist subversion and to carry out a policy of maintaining its i. dependence,, terminate U, S, economic and military assistance programs to such nations, * «

35- Exercise caution to ensure that the United Stages does not become so identified , either in fact or in the eyes of the worlds with particular regimes, individuals or political factions in the countries of the area as to hinder II,. S. accommodation to changes in the political scene .

V. COUNTRY^ COURSES OF ACTION IN ADDITION TO !PHfT^EUIONAL COURSES Oi7 ACTION 7 ^ ABOVE"

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35. In view of the emerging opportunities* in Burma and the repercussions that developments there will have on the

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committed areas of Asia and Africa, make a special effort ^"influence an increasingly favorable-orientation in .^r^ r s policies. .

37 # Encourage and

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38, Encourage Burmese assumption of regional and international responsibilities compatible with our own objectives.

r 39. For political purposes, upon Burmese request make /military training available on a grant basis and modest amounts of military equipment and supplies on a sales or token payment basis, as consistent with U. S, interests.

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HO. Encourage the Burmese Government to establish internal security throughout the country, and discourage further foreign assistance to Chinese Nationalist irregular and ethnic rebel groups in Burma".

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' 41. Should overt Communist aggression occur against Burma, invoke the UN Charter and, subject to Burmese re-

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action to assist Burma if Burma is willing to

resist;

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munist resort to force and U. S. vital interests are involved; Provid ed, that the taking of military action shall be subject to prior submission to the approval by the Congress 0 ■•

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42.

Seek to increase Cambodia's respect for and confi-

dence in the United States and the Free World in order to assist in maintaining Cambodia's independence and in curbing its tendency to increased orientation toward the Sino-Soviet' Bloc. To this end demonstrate continued friendly U. S. support for Cambodia's independence, understanding of its policy of neutrality, and concern for its economic and social progress. •

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43. In shaping particular courses of action in Cambodia, take into account the fact that Prince Sihanouk enjoys widespread popularity, particularly among the rural population, and controls all major sources of political power. Devote special efforts toward developing Sihanouk's understanding of U, S. policies and of the U. S. position in Southeast

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asi£j bearing in mind his extreme sensitivity to any suggestion of pressure or slight. t

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44* Since real or fancied threats from neighboring

free World countries have been a major factor contributing to Cambodia's sense of insecurity and its consequent readiness to accept Sino-Soviet Bloc support, endeavor persistently and firmly, to improve Cambodia's relations with these countries, particularly Thailand and Viet Nam. Take every appropriate occasion to impress on the governments of neighboring countries the importance of repairing their relations with Cambodia.

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45. Seek means effectively to promote a sense of responsibility on the part of Sihanouk and other Cambodian leaders for exerting sustained effort to create conditions conducive to better relations xv T ith neighboring countries and for avoiding contentious and provocative statements. When feasible and consistent with over-all U. S. interests, take steps to prevent provocative actions by any of the countries concerned, ' -

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46. Encourage positive cooperation between Cambodia and neighboring countries such as joint participation in

the development of the Lov/er Mekong River Basin as a nucleus for regional cooperation and mutual.aid,

47. Continue to provide modest military aid to enable the Cambodian armed forces to maintain internal security against Communist subversion or other elements hostile to U. S. interests and to discourage fcambodia from accepting substantial military aid from the Sino-Soviet Bloc.

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43. Concentrate U. S. economic and technical assistance primarily in those areas in which increased Communist influence v:ould entail the greatest threat to Cambodia's neutrality and independence, ■ . r

49* In view of the relatively strong position still maintained by France in Cambodia, seek opportunities for greater mutual understanding and cooperation with the French in the furtherance of common Free World objectives.

LAOS

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50, Provide military assistance for the development and support of Lao armed forces capable of maintaining internal security against Communist subversion or other element r hostile to U, S, interests and providing limited

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*Mtial resistance to Communist aggression. Encourage Laos ^'x'ormulate and implement a broadly conceived security

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51. In the provision or U.'S. assistance, direct our ^ograms to the promotion of social and economic progress g R d unification of Laos., thus helping maintain the confidence of the Royal Government in its anti-Communist, pro-yree World "neutrality". .

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52* Continue to promote conditions engendering confidence by Lao leaders that the UN Charter, SEATO, and Free Korld support provide a favorable basis for Lao resistance to Communist pressure and inducements, and at the same time continue to impress upon the Lao the need for a sense of responsibility and recognition that too drastic actions may have adverse international implications 0

53. Encourage the Lao to observe constitutional and legal processes as providing the soundest basis for the. grov/th and vitality of democratic institutions; discourage resort to force in political affairs*

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55♦ Encourage and support cooperation betv;een Laos and other Southeast Asian countries particularly Thail-. ncl, Viet Nam, the Philippines., Malaya; and Burma, including such joint effort in the anti-subversioiv economic, communications,, and military fields as is feasible.

*5<5. Develop greater mutual understanding and cooperation with the French in the furtherance of common Free World jectives.

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57. Strongly support ,l fche UN presence" and expanded JN technical assistance in Laos, and make a special intensified effort to encourage other friendly nations to assume a larger share of responsibility for the support of the country,. * . . .

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58. Promote the development of a Thai leadership which is increasingly united, stable and constructive, is supported by the Thai people 7 and Willing to continue the alignment of Thailand vrith the United States and the West,

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59, Utilize Thailand's central location in Southeast ,..*a as a point from which to create discontent and internal i^riculties within nearby Communist-dominated areas and ittart Communist subversive efforts in neighboring free

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*'A:ntries, to a degree consistent with U, S, policies digrams in neighboring free countries.

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SO. Provide military assistance to Thailand for support -f forces sufficient:

a. To maintain internal security. * ■

b. To present limited initial resistance to external aggression.

£. ' To make a modest.contribution to collective defense of contiguous SEATO areas. -

Continue to urge the Thai Government to improve the organi nation of the Thai Armed Forces so as to make a maximum contribution to the above objectives. , ' .

an improvement in relations

. Encourage and support between Thailand and Cambodia #

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62. Assist Free Viet Nam to develcfp a.strong, stable and constitutional government to enable Free Viet Mom to assert an increasingly attractive'contrast.to conditions in the present Communist zone. In this regard enco : age and assist public relations and public information prqgrs of the Government of Viet Nam directed both internally to thej Free Vietnamese and externally to North Viet Nam,

63* Work toward the weakening of the Communists in North and South Viet Nam in order to bring about the eventual peaceful reunification of a free and independent. Viet Nam under anti-Communist leadership,

64. Support the position of the Government of Free' Viet Nam that all-Viet Nam elections may take place only after it is satisfied that genuinely free elections can be held throughout both zones of Viet Nam.

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65. Assist Free Viet Nam to build up indigenous armed forces,, including independent logistical and administrative services, which Will be capable of assuring internal security and of providing limited initial resistance to attack by the Viet IHnh.

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I 66. Encourage Vietnamese military planning for defense

( a gainst external aggression along lines consistent with ^ U? S. planning concepts based v.pon approved U. S. policy, arid discreetly manifest in other ways U. S. interest ?.n assisting"Free Viet Nam; in accordance with the SEATO Treaty, to defend itself against external aggression.

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67. Encourage and support an improvement in relations between Viet Mam and Cambodia.

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FEDER ATION OF MALAYA. .> *^^-^-B. f^j^^^J^ kUU?_^

68, Encourage the continued development of a strong, stable Malaya within the Commonwealth,

69. Encourage the Commonwealth to exercise primary responsibility in Malaya but be prepared to assist, as necessary, in the maintenance of Malaya's stability and . independence♦

70. In the application to Malaya of the course of j action in paragraph 23--£, be prepared to provide needed technical assistance to Malaya, and consider the extension of loans for economic development if alternate sources of financing prove to be inadequate,

I 71p Discreetly encourage the present Malayan leadership to improve its position of strength and responsibility

unless more favorable alternatives develop,

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72, Discreetly encourage Malaya's participation and membership in SEATO, avoiding any actions which might \ } strengthen neutralist sentiment, ' j

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7^, Should overt Communist aggression occur against Malaya, place initial reliance on Commonwealth, SEATO or UN resources as appropriate, but be prepared, subject to Malayan request for assistance, to take independent U. 3, action along the lines of.the proviso in paragraph 20,

SINGAPORE . -I

75« Bearing in mind Singapore's strategic position and its importance to the Free World, encourage development toward a politically stable, economically viable Singapore,

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.-ting to cooperate with the United States an 'fating internal and external Communist thro

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7o # Encourage and support British, Australian, Federa-of Malaya and Singapore Government efforts to ,»«*ngthen moderate political forces in order to counteract '♦rich as possible the extreme left's pull on the Govern-1^'ti Be prepared, -however, after consultation with the r ■••; ■ r^-itishj to take.such independent action as necessary to

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77, In case the Communists or extreme leftists move • -j gain control of the Government by legal or violent

' -: : jH3, " consult v/ith the United Kingdom, the Federation, ssd if appropriate other interested parties, and as neces-zivj support counteraction, being prepared, as necessary } , , \o take independent action along the lines of paragraph 21.

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78. Should overt Communist aggression occur against

, f, • Singapore, place initial reliance on the resources possessed by Singapore, the British and the Federation of Malaya, ■: * but be prepared to take action, if necessary, in accordance . . with paragraph 20.

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79* While recognising the desire of Singapore to I / merge v/ith the Federation, do not encourage such a step unless and until such action appears to be useful in achieving both long-range and short-range U. S. aims as : set forth in paragraphs 75 and 76; in the meantime use the Singapore Government's desire for closer ties and eventual merger with the Federation in an effort to counteract the extreme left. 1 s pull on the government ♦

80* Encourage efforts by the Government of Singapore * to. solve its political and economic problems .in ways consistent with U. S. objectives. To the extent feasible, rely on the United Kingdom to provide external financial ■ ' . support to Singapore and, to the extent desired by the ■ . ' United Kingdom, support the utilization of Free World

international financial institutions in the promoting of economic development and economic reforms in Singapore. Be prepared, however, to provide U. S« technical and economic development assistance when such assistance would be of special significance in achieving U. S, objectives.

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8l § In all U, S. activities in Singapore, keep in mind the continuing British responsibility for Singapore's defense and foreign affairs, and the British role in internal security as well as British knowledge and. experiences in governing Singapore, and seek to avoid action likely to cause a serious misunderstanding between the United States and the United Kingdom,

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VI. SUPPLEMENTARY STATEMENT OP POLICY

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THE SPECIAL SITUATION IN NORTH VIET NAM

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82• Treat the Viet Minh as not* constituting a legitimate government, and discourage other non-Communist states from developing or maintaining relations "with the Viet Minh regime.

83* Prevent .the Viet Minh from expanding their political influence and territorial control in Free Viet Nam and Southeast Asia.

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8^. Deter the Viet Minh from attacking or subverting Free Viet Nam or Laos.

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Probe weaknesses of the Viet Minh and exploit

them internally and internationally whenever"possible

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86. Exploit nationalist sentiment within North Viet • y Nam as a means of weakening and disrupting Sino-Soviet // domination.

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87. Assist the Government of Viet Nam to undertake programs of political, economic and psychological warfare//,-^ against Viet Minh Communists. // '"

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88.' Apply, as necessary to achieve U. S. objectives, . restrictions on U. S. exports and shipping and 021 foreign'/ assets similar to those already in effect for Communist China and North Korea. *

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SNIE 63.1-60 23 August i960

SHORT-TEEM TRENDS IN SOUTH VIETNAM

The Problem

To assess political and security problems and probable trends in South Vietnam over the next year or so.

CONCLUSIONS

1, Developments within South Vietnam over the past six months indicate a trend adverse to the stability and effectiveness of President Diem's government. Criticism of Diem's leadership within urban groups and government circles has been mounting. More immediately important, the Communist Viet Cong, with support

and guidance from Hanoi, has markedly increased subversive operations, terrorist activities, and guerrilla warfare. (Paras

V13)

2. Although Diem's personal position and that of his government are probably not

now in danger, the marked deterioration since January of this year is disturbing. These adverse trends are not irreversible, but if they remain unchecked, they will almost certainly in time cause the collapse of Diem's regime. We do not anticipate that this will occur within the period of this estimate. However, if Diem is not able to alter present trends and the situation deteriorates substantilly, it is possible during the period of this estimate that the government will lose control over much of the countryside and a political crisis will ensue. (Para, 17) I

DISCUSSION

3. Since the beginning of i960, there has been a general decline in the political and security situations in South Vietnam. The Communist Viet Cong 2J has stepped up terrorist activities and guerrilla warfare.

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1/ The Viet Cong insurgents represent- the paramilitary arm of the North Vietnam Communist Party. The Viet Cong estimated to have in South Vietnam between 3,000 and 5>000 regular armed cadres and about 3j000 irregulars organized as underground troops. Main areas of Viet Cong activity lie south and west of Saigon and along the Cambodian border. North Vietnam furnishes guidance, personnel reinforcements, and logistical support to the insurgents.

At the same time, grievances against th government, which have long b€ n accumulating, have become increasingly urgent and articulate.

The Political Situation

U. Discontent with the Diem government has been prevalent for some time among intellec' tuals and elite circles and, to a lesser extent, in labor and urban business groups. Criticism by these elements focusses on Ngo family rule, especially the roles of the President's brother, Ngo Dinh Nhu, and Madame Nnu,. the

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pervasive influence of the Can Lao, 2 the semi-clandestine apparatus of the regime; Diem's virtual one-man rule; and the growing evidence of corruption in high places- In* late April, 18 prominent Vietnamese publicly petitioned Diem to "liberalize the regime, expand democracy, grant minimum civil rights, (and) recognize the opposition in order to let the people speak without fear." This unprecedented public attack on Diem by a non-Communist group may embolden other urban elements to become more vocal.

5. A new and even more important element in the political situation is the growing criticism of Diem's leadership within government circles, including the official bureaucracy and military; this criticism has become more intense than at any time since 195G. Since the early p*rfc of this year, Vice President Tho, other members of the cabinet, and middle echelon officials have made known their serious concern over Diem's handling of the internal security problem and have privately criticized the power and influence exerted by Nhu and his entourage. In addition, there is considerable uneasiness concerning the operations and activities of the Can Lao organization.

6. Although most of the Vietnamese peasants are politically apathetic, they also have their grievances against the government. These include the ineptitude and arrogance of many local and provincial officials, the lack of effective protection from Viet Cong demands in many parts of the country, the harshness with which many peasants have been forced to contribute* their labor to government programs, and the unsettling economic and social effects of the agroville (government-sponsored settle-

*The Can Lao organization is based on the cell " and cache system, similar to that of the Kuomin-tang or a Communist party. It is controlled by Diem's brothers, Nhu and Can. Can Lao members are active at virtually every level of Vietnamese political life. One-third of the cabinet members and over half of the National Assembly ( deputies probably belong to the Can Lao. The organization also controls the regime's mass political part;/, the National Revolutionary Movement. It is deeply involved In Vietnamese business affairs and has a program to recruit key officers in the Vietnamese military establishment.

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ments) program. As a consequence, Diem's government is lacking in positive support among the people in the countryside,

7. The members of Diem's immediate entourage have attempted, with_some_success,-to keep him insulated from unpleasant developments and trends. However, he has become concerned over the deteriorating internal security situation, although he still tends to discount the amount of discontent both in the countryside and among urban elements. Although he has taken some steps to meet the internal security problem, he tends to view it almost entirely in military terms. He believes that increased military activity against the Viet Cong, along with an expansion of the agroville program, will greatly improve internal security. He has been openly contemptuous of the views of oppositionists in Saigon and regards them as uninformed and " dupes of the Communists. Diem also has failed to take any major steps against corruption and arbitrary conduct on the part of the Can Lao organization.

The Security Situation

8. Aggravating many of the government's _ problems is the active campaign of fchq Viet

Cong to discredit Diem and weaken the government's authority through political subver-• siori as well as paramilitary action. The Viet Cong has had some success in exploiting discontented intellectuals, sowing disaffection among the populace, and disrupting the effective administration of government. This campaign has been well organized and skillfully executed, with the result that Diem has. been confronted not merely with the armed threat of guerrilla operations but with a comprehensive subversive program.

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9. Between mid-1957 and the end of 1959, the

Viet Cong conducted a steady but low key campaign of propaganda, subversion, and terrorism in the South Vietnamese countryside. Since January, there has been a significant increase in the number and size of Viet Cong attacks in several areas, particularly in the southwest. Civilian travel on public roads more than 15 miles outside SaiV gon has become hazardous. Attacking units

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estimated to number at times In the hundreds, have operated over wider areas than at any time since 1954 and have assaulted Vietnamese .Army installations. Since the beginning of the rainy season in April and the launching of Vietnamese Army counter operations, Viet Cong operations have abated somewhat but terrorist activity, such as assassination and Kidnapping of provincial officials and government sympathizers, "has continued at high levels. 3 Support from North Vietnam appears to have increased over the past several months. In particular, senior cadres and military supplies such as communications equipment are believed to be moving south through Laos and Cambodia and by junk along the eastern coastline.

10. TI*-i upsurge in Viet Cong activity, accompanied by a stepped up propaganda campaign from Hanoi, probably reflects a recent Communist decision to increase pressures on the South Vietnamese Government. The indications of increasing dissatisfaction with the Diem government have probably encouraged the Hanoi regime, supported and guided by

.the Chinese Communists, to take stronger action at this time. The Chinese Communists probably regard South Vietnam as a promising area for weakening the US position in Southeast Asia at little cost or risk. From the Chinese point of view, many favorable elements are present: a sizable and effective indigenous guerrilla apparatus responsive to Communist control; a government lacking in positive support from its people; and the widely recognized political commitment the US has in Soiuii Vietnam.

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11. In countering the Viet Cong challenge, Diem faces many of the same problems which confronted the French during the Indo-Chma War. Viet Cong guerrilla units have succeeded in exploiting their natural advantages of surprise, mobility, and initiative. In many of their areas of operations, they have ex-

*.In the first five months of 19G0, 780 government officials and sympathizers were assassinated by insurgents. The total number of assassinations in tS53 was 193 and in 1959, 239. Kidnappings this year through May total 232 1 as compared

- with i in 1958 and 341 in 1959. *

ploited the tendency of the largely passive population to accommodate to their presence •and thereby avoid reprisals. In some areas of operations, however, they have obtained the 'active cooperation of the local population.

12. In contrast to the'French strategy in the Indo-China War, however, the Vietnamese Government is attempting not only to control the populated areas and main lines of communications but also to group the peasantry into more defensible units through its agro-ville program. Special measures in organization and training have been implemented enabling the army to react more quickly and effectively against guerrilla hit-and-run tactics. The civil guard is forming "commando" units and new stress is being placed on the building of a youth corps, 10,000 strong, for patrol and reconnaissance purposes in the villages and towns.

13. The most effective government measure against the Viet Cong, however, remains Che active participation of the army, with air force support. Until recently, the army's commitment to internal security operations has been limited by the deployment of major

. elements in defense against an overt attack from North Vietnam and by training activities in support of this mission. Some improvement in the army's effectiveness and capabilities can b expected with the increased T

■ emphasis on antiguerrilla training, improved organization, and better combat intelligence. We believe it unlikely, however, that the army will be able to do more than contain the Viet" Cong threat, at least over the short run.

The Outlook

14. The Vict Cong will probably maintain its pressure on provincial officials and government installations at the present high level, and, with the end of the wet season in October, return to large-scale guerrilla actions aimed at nullifying the government's authority in the rural areas. Hanoi, could step up the weight and pace of the Viet Cong activities in South Vietnam. In the absence of more efTcc-live government measures to protect the peasants and to win their positive cooperation, the prospect is for expansion of the areas of Viet,

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Con" control in the countryside, particularly in the southwestern provinces.

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15, Dissatisfaction and discontent with the government will probably continue to rise unless the security situation improves and unless Diem can be brought to reduce the corruption and excesses of his regime. Although there have been no popular demonstrations so far, we believe that the possibilities for antiregime disturbances are increasing. The Viet Cong will attempt to capture and control major demonstrations that occur. Existing police and civil guard strength is capable of con-: trolling small-scale disorders in major population centers, but army support would be required if rioting became widespread.

1G. Th: position of the army in the Vietnamese political scene is not entirely clear. The regime has taken pains to insure that no one army figure could acquire such personal standing or prestige that he could range himself and the army against the government. However, there is some discontent among ofli-

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cers over Can Lao influence in promotions and assignments, and concern over corruption and nepotism in the army has increased! If unrest in official circles and urban elements became extreme and attempts were made to organize an antiregime opposition, the attitude of the army would become a vital political factor. But it is not clear what the army's action would be in these circumstances.

17. Although Diem's personal position and that of his government are probably not now in danger, the marked deterioration since January of this year is disturbing. These ad* verse trends are not irreversible, but if they remain unchecked, they will almost certainly in time cause the collapse of Diem's regime. We do not anticipate that this will occur within the period of this estimate. However, if Diem is not able to alter present trends and the situation deteriorates substantially, it is possible durhig the" period of this estimate that the government will lose control over much of the countryside and political crisis will ensue.

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Control S&56 September 5, 190O

8:37 AM

' From: SAIGOIT

To: Secretary of State

No: 538, September 5, 1 PM (Section 1 of 2)

Sent Department £38, Repeated Information,CINCPAC POLAD 83, BANGKOK, VEIIJTIANE, PjBSCM PENH, LONDON, PARIS UNNUMBERED

IN VIEW DEVELOPMENTS KOREA, TURKEY, RECENT COUP D'LADS, AND ATTEMPTED ANTI-GVN DEMONSTRATION ABOUT HEM AGO (OUR U32) WE BELIEVE IT DESIRABLE " , ASSESS POSSIBILITIES FOR DEMONSTRATION AND COUP HERE AND LIKELY OUTCOME. POTENTIALITIES OF VARIOUS GROUPS FOR POLITICAL ACTIVITIES OF THESE TYPES

GIVEH BELOW:

• 1. PEASANTS. VARIOUS FACTORS DISCONTENT EXIST-SUCH AS LACK OF ADEQUATE PROTECTION AGAINST COMMUNIST ATTACKS Aim PRESSURES, LOW PRICES PADDY, ' COMPULSORY LABOR ON AGROVILLES AND OTHER PROJECTS, AND ARBITRARY METHODS OF AUTHORITIES. DIEM HAS TAKEN SOME STEPS TO TRY ALLEVIATE SOURCES OF DISCONTENT (OUR G-79) BUT IT IS IMPORTANT HE TAKES OTHERS BECAUSE PEASANTRY REPRESENT KEY TO SUCCESS OR FAILURE COMMUNIST GUERRILLA WARFARE IN COUNTRYSIDE AND THUS TO GRADUAL UNDERMINING OF REGIME," HOWEVER, ANY • SUDDEN DEMONSTRATION OR COUP AGAINST GVN LIKELY TO CENTER IN SAIGON AND

- SEEMS IMPROBABLE THAT PEASANTRY IN VIEW LACK ORGANIZATION, TRANSPORT PROBLEMS, ETC. WOULD PLAY SIGNIFICANT ROLE THEREIN.

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2. COMMUNISTS. WHILE THERE ARE INDICATIONS THAT COMMIES HAVE SOME" STRENGTH . IN SAIGON. THEY HAVE NOT YET OPEiJLY SHOWN THEIR HAND IN CITY AND ARE MUCH MORE LIKELY OPERATE THROUGH INFILTRATED, OSTENSIBLY NON-COMMUNIST ORGANIZATIONS WHICH THEY WILL HELP INSTIGATE TO ACTION. EVEN WITHOUT DEMONSTRATION ATTEMPT BY OTitER GROUPS, THEY MAY ENGAGE IN HIT AND RUN TACTICS OF VIOLENCE IN SAIGON AND IN CASE OF ANY DEMONSTRATION WOULD STEP UP SUCH TACTICS DURING CONFUSION AHD WOULD ATTEMPT BEHIND SCENES TO MANIPULATE ANY DEMONSTRATION WHICH BEGAN,

■ PARTICULARLY BY TRYING PRO VOICE GVN TO TAKE HARSH MEASURE IN REPRESSIONS

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3. IABOR. 71ADE UNIONS ARE PROBABLY BEST ORGANIZED NON-MILITARY GROUP IN VIET-HAM AND POSSESS MOTIVES FOR POLITICAL ACTION. TRAIT QUOC SUU, HEAD CVTC, IS ALLIED WITH MINISTER AGRICULTURE LE VAN DONG AGAINST SsHU-TUySN FACTION IN CAN LAO PARTY; EACH GROUP IS ALSO SUPPORTING COMPETING LEADERSHIP IN OTHER MAIN LABOR FEDERATION CSTV. DONG HAS TALKED PRIVATELY ABOUT DEMONSTRATION. SHOULD HIS FACTION DECIDE UPON ONE, LABOR WOULD UNDOUBTEDLY BE ITS CORE. PROBABLE FACTORS RESTRAINING DONG ARE FEAR THAT HE WOULD NOT SUCCEED MID THAT COMMUNISTS WOULD EXPLOIT "DEMONSTRATION TO THEIR ADVANTAGE.

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LABOR ALSO HAS ECONOMIC AND SOCIAL GRIEVANCES WHICH PROVIDE FERTILE GROUND * . FOR OPPOSITION GROUPS OUTSIDE GOVERNMENT TO CULTIVATE. TAXI AND MOTOR POUSSE DRIVERS FOR EXAMPLE WHO LIVE HAND TO MOUTH EXISTENCE WERE ADVERSELY AFFS2TED BY INCREASE DI PRICE GASOLINE. UNTIL GVN QUICKLY PERMITTED FARE RISE. WHILE NON-GOVERNMENT OPPOSITION GROUPS MIGHT NOT BE ABLE ORGANIZE AS EXTEN-

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SIVE SUPPORT AMONG LABOR AS UNION LEADER LIKE BUU, THEY COULD NEVERTHE-LESS VJITH COWSUSISS 0RGA3SEZATIONAL ASSISTANCE PROBABLY STIR UP SOME ■ SUPPORT FOR DEMONSTRATION.

It. STUDENTS. PREVIOUSLY RELATIVELY INERT, LACKING ORGANIZATION AND ANY OPPOSITION PART/ FOCUS SUCH AS EXISTED IN KORE Aim TURKEY, AND LIVING IN SCATTERED FASHION RATHER THAN ON CAMPUS, STUDENTS HAVE NEVERTKE-LESS WITHIN PAST FEW WEEKS BEGUN SHOW POLITICAL DERMENT. THIS PROBABLY BTBOLATSD BY DEVELOPMENTS IN OTHER COUNTRIES AND FERHAPS EVEN, III COUNTER PRODUCTIVE SENSE, ■ BY INTERVENING GVN EFFORTS AT POLITICAL STERILIZATION OF STUDENTS. WHILE NO REASON AT THIS STAGE BELIEVE STUDENTS WOULD INITIATE DEMONSTRATION, PROBABILITY GROWING THAT THEY WOULD JOINT ONE LED BY "OPPOSITIONISTS EITHER WITHIN OR OUTSIDE GOVERNMENT. GVN SECURITY OFFICIALS ARE CONCERNED OVER GROWING INFLUENCE OF OPPOSITIONIST AND VC PROPAGANDA AS WELL AS ESTABLISHMENT OF VC CELLS AMONG LYQEE STUDENTS.

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5. CATHOLIC REFUGEES. DISSATISFACTION WITH REGIME APPARENTLY EXISTS AMONG SOME CATHOLICS, WHO REPRESENT GREAT BULK OF THE REFUGEES. PARADOXICALLY, SOME OF THIS STEMS FROM WHAT THEY FEEL IS TOO HEAVILY CATHOLIC LEADERSHIP OF KEGT-; (WITH POTENTIAL REACTION TO FOLLOW) MID SOME TO REGIME'S FAILURE TO BRING CATHOLICS PARTICULAR BENEFITS (E.G. SCHOOLS). SOICE OF HIERARCHY < AliSG HAS STRONG FRENCH BACKGROUND. CERTAIN ELEMENTS HAVE SPOKEN OF

NECESSITY AVOID COM'lUNIST TAKEOVER BY CHANGING REGIME AND THERE IS EVIDENCE ' OF CATHOLIC REFUGEES HAVING BEEN"INVOLVED IN ABORTIVE AUG 19 DEMONSTRATION

' FV3-U9'48).

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6. OPPOSITION GROUPS AND SECTS. WHILE SOI IS STIRRINGS ARE SEEN AMONG 0PPO3ITI0HGR0UPS, SUCH AS THE DAI VIET3, VNQOD, AND DAN CIIU, THESE GROUPS ARE NOT EXPECTED TO DISPLAY SUBSTANTIAL ORGANIZED STRENGTH AND MORE LIKELY WILL CONTINUE TO APPEAR ONLY AMONG INTELLECTUAL CLASS. THEY DO, HOWEVER, ARTICULATE THE DISSATISFACTION EXISTING IN OTHER CLASSES. SECTS HAVE GIVEN .NO SUBSTANTIAL SIGNS OF REVIVAL OF FORCE EITHER II7 SAIGON OR ELSEWHERE. ' ■

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7. POLICE. OF OBVIOUS IMPORTANCE IS STRENGTH AND RELIABILITY LOCAL POLICE AND OTiLSR FORCES WHICH COULD BE MUSTERED TO MEET DI .'3TRATI0N. METROPOLITAN.POLICE NUMBER APPROXIMATELY 5,l60 BACKED BY APPROXIMATELY 3,000 MISERS OF NATIONAL POLICE AND SECURITY SERVICE UNDER DIRECT CONTROL ■ OF GENERAL NGUYEN VAi: LA. OFFICIAL OF NP3S HAS CONSENTED TO CAS THAT POLICE WOULD BE LOYAL TO GOVERN:IENT AND ACT AGAINST ANY TYPE OF DEMONSTRATION. OPERATING PRINCIPLES ITT GVN'S ANTI-RIOT TACTIC IS TO SMOTHER DEMONSTRATION BEFORE IT CAN GAIN MOMENTUM, AND WHILE INSTIGATORS CAN STILL BE DEIERMHE D AND ARRESTED. FIRST LINE OF DEFENSE ARE SEVERAL HUNDRED SURETE PERSONNEL MINGLING IN CROWDS AND REPCRTINGP083IBLE TROUBLE. THESE ARE BACKED UP

BY UNIFORMED POLICE DEPARTMENT RIOT SQUAD, CONSISTING OF 200 PERSONNEL PLUS 10-15 MAN COMMAND SECTION. THE 200 PERSONNEL ARE DIVIDED* INTO THREE ■ ■ PLATOONS, ONE OF WHICH IS ON DUTY (AND ANOTHER ON S D3Y) AT ANY GIVEN TIME. PLATOON (3) ON DUTY SLEEPS i SSED AND IS PREPARED TO ANSWER A CALL WITHIN TWO MINUTES, PLUS AN ESTIMATED TEH MINUTES TO ARRIVE AT SCENE OF DISTRESS. MEN ARE PRACTICED IN lo FORMATIONS FOR BREAKING UP A MOB. THE 200 MAN UNIT IS EQUIPPED VJITH TRANSPORTATION, RADIO COMMUNICATIONS, ' VARIOUS SUBMACHINE AND RIOT GUNS, TEAR GAS AND OSIER ANTI-RIOT MATERIAL, AND CAN CALL UPON FIRE DEPARTMENT FOR ABOUT 35 WATER TRUCKS WITH HOSES (FV3-5007).

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DEPARTMENT OF STATE

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2U56

SEPTEMBER 5, I960

8:37 AM

FROM: - SAIGON

TO: SECRETARY OF STATE

NR: 538, SEPTEMBER 5, 2 PM (SECTION 2 of 2)

SENT DEPARTMENT 538, REPEATED INFORMATION CINCPAC POLAD 83, BANGKOK, VIENTIANE, PHNOM PENH, LONDON, PARIS UNNUMBERED

FURTHER ARMED SUPPORT AVAILABLE ARE CIVIL GUARD IN AREA, ABOUT 7,000, AND REGULAR ARMY FORCES, NUMBERING THREE BATTALIONS PARACHUTISTS, ONE BATTALION INFANTRY, PRESIDENTIAL GUARD BRIGADE WITH AUTHORIZED STRENGTH OF 1,500 BUT WITH CURRENT OVER-STRENGTH OF APPROXIMATELY 400, ONE BATTALION MARINES, ONE ARMORED COMPANY AND AN UNDETERMINED NUMBER OF PARTIALLY TRAINED RECRUITS FROM QUANG TRUNG TRAINING CENTER ON OUTSKIRTS SAIGON. OTHER FORCES TOTAL THREE BATTALIONS OF INFANTRY AND ARE AVAILABLE5 HOWEVER THEY ARE NOW ASSIGNED TO PRIORITY SECURITY AREAS AND WHETHER OR NOT THEY COULD BE PULLED FROM THEIR PRESENT MISSIONS WOULD DEPEND UPON SITUATION„

8. ARMY. /SOME DISCONTENT EXISTS BECAUSE OF POLITICAL PROMOTIONS AND FAVORITISM THROUGHOUT ARMED FORCES STRUCTURE. SOME DISTURBING INDICATIONS OF POSSIBLE DEVELOPMENT' SPIRIT FRUSTRATION AND DEFEATISM IN FIGHT AGAINST VIET CONG ALSO RECEIVED, SUCH AS STATEMENT ALLEGEDLY MADE BY GENERAL DUONG VAN MINH THAT FOR • EVERY VIET CONG KILLED BY ARMED FORCES GOVERNMENT CREATING TEN IN THEIR REARM HOWEVER INDICATIONS ARE THAT GENERALS REMAIN IMBUED BY NON-POLITICAL APPROACH AND THAT DISCONTENT IS NOT OF SUCH PROPORTIONS THAT ANY GENERAL IS READY TO TAKE INITIATIVE IN LEADING COUP. WE CANNOT OF COURSE EXCLUDE EMERGENCIES 01 A "KONG LE" FROM RANKS BELOW GENERAL BUT KEY UNITS IN AND ABOUND SAIGON ARE COMMANDED BY OFFICERS BELIEVED TO BE CLOSE AND LOYAL TO DIEM;7

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-2- 538, SEPTEMBER 5, 2 FM (SECTION 2 OF 2) FROM SAIGON

WHILE THERE DOES NOT SEEM TO BE MUCH LIKELIHOOD AT THIS TIME OF COUPLED BY ARMY, PICTURE IS NOT SO CLEAR RE REACTION OF ARMY TO DEMONSTRATION ON COUP STARTED BY OTHERS. IT COULD BE CLEARLY SHOWN THAT SUCH ACTION WAS COMMUNIST-INSPIRED NO PROBLEM RE ARMY REACTION WOULD EXIST, BUT AS ALREADY INDICATED COMMUNISTS ARE LIKELY TO ACT DISCREETLY BEHIND SCENES. IF ACTION DIRECTED AGAINST DIEM, PROBABLY ADEQUATE NUMBER OF POLICE AND ARMED FORCES TO PUT IT DOWN WOULD INITIALLY RESPOND TO CALL; IF ACTION DIRECTED AGAINST ENTOURAGE OR REPRESENTED APPEAL FOR ACTION BY GOVERNMENT, PROBLEM OF PUTTING IT DOWN MIGHT BE MORE DIFFICULT. IN EITHER CASE COURSE OF DEVELOPMENTS SUCH AS REPULSION AT ANY EXTENSIVE SHEDDING OF BLOOD OF NON-COMMUNISTS MIGHT QUICKLY CHANGE ATTITUDE ARMY UNITS INTO ONE UNFAVORABLE TO CONTINUATION REPRESSIVE MEASURES.

9. GENERAL. AN IMPORTANT ASPECT OF PROBLEM IS UNEASY POLITICAL ATMOSPHERE ITSELF, CREATED BY COMBINATION OF CONTINUING VC POLITICAL AND MILITARY GAINS, INSUFFICIENT EVIDENCE OF GVN COUNTERACTION AND SELF CORRECTION AND PANICKY TENDENCIES BY SOME ELEMENTS TO CONSIDER DRASTIC MEASURES, EVEN A COUP. TO FORESTALL COMMUNIST TAKEOVER. THIS LATENT EXPLOSIVE FORCE COULD BE TOUCHED OFF BY AN ILL-ADVISED MOVE BY SINCERE OR OPPORTUNISTIC OPPOSITIONISTS OR BY UNDULY HARSH REPRESSIVE ACTION BY THE GVN.

CONCLUSION: REAL POSSIBILITY DEMONSTRATIONS IN SAIGON EXISTS. COULD BE INSTIGATED BY DONG-BUU FACTION, ESPECIALLY IF IT DECIDES RISK OVERLOOKING FEAR OF COMMUNIST EXPLOITATION. COULD ALSO BE INSTIGATED BY OPPOSITION ELEMENTS OUTSIDE GOVERNMENT, BUT SEEMS UNLIKELY WOULD BE OF ANY SIZEABLE PROPORTIONS UNLESS HOOKED UP WITH COMMUNIST-INFILTRATED GROUP ESPECIALLY IN LABOR FIELD, ANY DEMONSTRATION MORE LIKELY TO BE INITIALLY LOYAL PROTEST CALLING FOR CHANGES IN POLICIES AND PERSONAL AROUND DIEM BUT COULD DEVELOP INTO ANTI-DIEM RIOT. WHILE INITIAL DEMONSTRATION CAN PROBABLY BE PUT DOWN, LONGER TERM OUTCOME WOULD LIKELY DEPEND UPON ARMY ATTITUDE AND DIEM'S METHOD ON HANDLING CRISIS. IN ANY EVENT VC EXPLOITATION IS LIKELY.

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-3- 538, SEPTEMBER 5, 2 ffl (SECTION 2 OF 2) FROM SAIGON

WE ARE DEVELOPING RECOMMENDED ACTIONS WHICH MIGHT HEAD OFF DEVELOPMENTS OF TYPES ENVISAGED ABOVE AND PRESERVE DIEM AS GVN LEADER. SHALL FORWARD THEM SOONEST.

INFORMATION ADDRESSEES: ABOVE FYI AND NOT REPEAT NOT FOR DISCUSSION WITH GOVERNMENTS.

DURBROW

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

SEP 13 I960

MEMORANDUM FOR ADMIRAL E. J. O'DOIMELL, REGIONAL DIRECTOR, FAR EAST, ISA

FROM: Brigadier General Edward G. Lansdale, 0S0/0SD

SUBJECT: Possible Courses of Action in Vietnam

Reference: Memo for ASD/lSA from Secretary Douglas, dated 29 August i960,

subject: "Deteriorating Situation in South Vietnam"

As noted by the Deputy Secretary of Defense, conditions in Vietnam are deteriorating. The key element in the situation is the activity of the Viet Cong. While criticism of Diem r s government in metropolitan areas adds to his problems and interacts with Viet Cong plans, the Viet Cong remains the primary threat to security. To the end of meeting this threat, several proposals are herewith submitted for consideration

A* Actions within the authority of DOD

(1) The emphasis of the MAAG' function should be shifted from purely training and organizational advice in preparation for defense against external aggression to include on-the-spot advice and assistance in the conduct of tactical operations against the Viet Cong.

(2) Concomitantly, the MAAG should be staffed to a greater intent with officers skilled in the conduct of counter-guerilla operations and who are capable of operating in the field. This might include Marines for amphibious instruction on Mekong River operations. If the immediate threat is recognized as being Viet Cong, these proposals logically follow as a deemphasis from conventional warfare against a wholesale DRV invasion. While the latter possibility is not discounted, it is felt that Viet Cong operations offer a more immediate and a very deadly threat to Vietnam. !

(3) Equipment required to support counter-guerrilla operations, including turbo-jet boats for Mekong River patrols, should be furnished on a priority basis. Items required by the Vietnamese in the psychological warfare area (See Appendix A) shoul be given a higher priority within MAP and expeditiously furnished. Advice and training In this field specifically directed against the Viet Cong should be stepped up.

SECRET

1307

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

(k) Small coast patrol craft should be made available to the Vietnamese Wavy for purposes, of restricting coastside supply shipment from North Vietnam to the Viet Cong.

*

(5) In the intelligence area, again the immediate emphasis should be shifted from conventional combat intelligence to counter-guerrilla intelligence training at the battalion level. Further, an attempt should be made through training and material support to strengthen the Vietnamese counter-intelligence effort in order to frustrate the Viet Cong subversive threat. Finally, RF equipment should be furnished so that am effort can be made to locate Viet Cong radio transmitters.

B. Recommendations requiring coordinated inter-agency action

(1) Strengthen the Civil Guard by making MAAG spaces available for trainers and by provision of small arms and other equipment through MAP supply channels plus utilization of ARVN supply, maintenance, and training facilities.

(2) During the emergency, the Civil Guard should be temporarily put under the Ministry of Defense in order to integrate the activities of the ARVN and the Civil Guard. The Ambassador's concern that the Civil Guard will lose all identity as a civil police force, if this action is taken, is invalid, providing a strong US position to the contrary is announced and maintained.

(3) Emphasis on civic action type activities by the ARVN should be encouraged and advisory and material assistance in this field furnished through MAAP and ICA channels.

(h) The Department of State should reemphasize to the RKG the necessity for according the right of "hot pursuit" to the ARVN in its campaign against the. Viet Cong. Since it is strongly suspected that the Viet Cong maintain their headquarters within Cambodia, and since considerable reinforcements to the Viet Cong come through Cambodia, the US should tell the RKG that we explore jheir inaction in suppressing this activity. The effectiveness of the ARVN sweeps will be largely negated until the ROK takes steps to deny its territory as a sanctuary to the Viet Cong.

1 (5) Most importantly for the purpose of strengthening the morale of the Vietnamese, President Diem should be informed as soon as possible through appropriate channels of the gravity with which the US government views the internal security situation, of our intent to provide material assistance, and of our unswerving support to him in this time of crisis.

1308

SECRET

Declassified per Executive Order 13326, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

(6) If a large scale operation against the Viet Cong is undertaken "by the Vietnamese 3 the dispatch of Seventh Fleet vessels and Air Force patrols might be useful in deterring sea reinforcements to the Viet Cong.

1 Inclosure

Appendix A

a

:

1

Declassified per Executive Order L3526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 i

1

APPENDIX A

Minimum Needs for Psychological Warfare equipment.

a. Leaflet vans: (for publications platoons).

(1) Operations Van (write and illustrate leaflets to be printed).

(2) Photo reproductions van (Photograph illustrations to be printed).

(3) Press van (print 1,000,000 leaflets in 2k hours).

b. Three Broadcasting Radio Mobile Groups (5KW) without complete

OUTFIT*

(l) Emitter and Receiver of 25 KW for Army Broadcasting Station

c. Three Line Radio Boats.

d. 20 Line Radio Cars.

e. ^3 Public Address (high impedance?)

(10 loudspeaker groups for BSN HAI propaganda 30 for operations team (long distance) 3 for Aircraft equipment).

f. 50 Projectors (16 mm) with screen.

g. One Secretary Machine (documents copy). h. Five (5) teletypes.

i. 500 Radio (receivers).

3. Equipment and finance to set up "Army Movie Studio".

fc. 50 taperecorders.

■ 1. Film (16 mm) for sound recording.

m. Maintain Annual Budget for psychological warfare activities $33,000,000 (piastres).

Declassified per Executive Order L3526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 1

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

-2- 62k, SEPTEMBER 16, 6 PM (SECTION OWE OF TWO) FROM SAIGON

CENTRALIZED INTELLIGENCE, ETC. THIS MESSAGE THEREFORE DEALS WISH OUR POLITICAL AND ECONOMIC RECOMMENDATIONS. I REALIZE SOME MEASURES I AM RECOMMENDING ARE DRASTIC AND WOULD BE MOST IMPOLITIC FOR AN AMBASSADOR TO MAKE UNDER NORMAL CIRCUMSTANCES. BUT CONDITIONS HERE ARE BY NO MEANS NORMAL. DIEM GOVERNMENT IS IN QUITE SERIOUS DANGER. THEREFORE, IN MY OPINION PROMPT AND EVEN DRASTIC ACTION IS CALLED FOR. "I AM WELL AWARE THAT DIEM HAS IN PAST DEMONSTRATED ASTUTE JUDGMENT AND HAS SURVIVED OTHER SERIOUS CRISES. POSSIBLY HIS JUDGMENT WILL PROVE SUPERIOR TO OURS THIS TIME, BUT I BELIEVE NEVERTHELESS WE HAVE NO ALTERNATIVE BUT TO GIVE HIM OUR BEST JUDGMENT OF WHAT WE BELIEVE IS REQUIRED TO PRESERVE HIS GOVERNMENT. WHILE DIEM OBVIOUSLY RESENTED MY FRANK TALKS EARLIER THIS YEAR AND WILL PROBABLY RESENT EVEN MORE SUGGESTIONS OUTLINED BELOW, HE HAS APPARENTLY ACTED ON SOME OF OUR EARLIER SUGGESTIONS AND MIGHT ACT ON AT LEAST SOME OF THE FOLLOWING:

1. I WOULD PROPOSE HAVE FRANK AND FRIENDLY TALK WITH DIEM AND EXPLAIN OUR SERIOUS CONCERN ABOUT PRESENT SITUATION AND HIS POLITICAL POSITION. I WOULD TELL HIM THAT, WHILE MATTERS I AM RAISING DEAL PRIMARILY WITH INTERNAL AFFAIRS, I WOULD LIKE TO TALK TO HIM FRANKLY AND TRY TO BE AS HELPFUL AS I CAN BY GIVING HIM THE CONSIDERED JUDGMENT OF MYSELF AND SOME OF HIS FRIENDS IN WASHINGTON ON APPROPRIATE MEASURES TO ASSIST HIM

IN PRESENT SERIOUS SITUATION. (BELIEVE IT BEST NOT INDICATE TALKING UNDER INSTRUCTIONS.) I WOULD PARTICULARLY STRESS DESIRABILITY OF ACTIONS TO BROADEN AND INCREASE HIS POPULAR SUPPORT PRIOR TO I96I PRESIDENTIAL ELECTIONS REQUIRED BY CONSTITUTION BEFORE END APRIL. I WOULD PROPOSE FOLLOWING ACTIONS TO PRESIDENT:

2. PSYCHOLOGICAL SHOCK EFFECT IS REQUIRED TO TAKE INITIATIVE FROM COMMUNIST PROPAGANDISTS AS WELL AS NON-COMMUNIST OPPOSITIONISTS AND CONVINCE POPULATION GOVERNMENT TAKING EFFECTIVE MEASURES TO DEAL WITH PRESENT SITUATION, OTHERWISE WE FEAR MATTERS COULD GET OUT OF HAND. TO ACHIEVE THAT EFFECT FOLLOWING SUGGESTED:

(A) BECAUSE OF

SECRET

!

Declassified per Executive Order I3r>26, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

3- 62U, SEPTEMBER 16, 6 PM (SECTION ONE OF TWO) FROM SAIGON

(A) BECAUSE OF VICE PRESIDENT THO'S KNOWLEDGE OF SOUTH WHERE COMMUNIST GUERRILLA INFILTRATION IS SPREADING SO RAPIDLY I WOULD SUGGEST THAT HE BE SHIFTED FROM MINISTRY NATIONAL ECONOMY TO MINISTRY INTERIOR. (DIEM HAS ALREADY MADE THIS SUGGESTION BUT VICE PRESIDENT MOST RELUCTANT TAKE JOB.)

(B) IT IS IMPORTANT TO REMOVE ANY FEELING WITHIN ARMED FORCES THAT FAVORITISM AND POLITICAL CONSIDERATIONS MOTIVATE PROMOTIONS AND ASSIGNMENTS. ALSO VITAL IN ORDER DEAL EFFECTIVELY WITH VIET-CONG THREAT THAT CHANNELS OR COMMAND BE FOLLOWED BOTH DOWN AND UP. TO ASSIST IN BRINGING ABOUT THESE CHANGES IN ARMED FORCES, I WOULD SUGGEST APPOINTMENT OF FULL-TIME MINISTER NATIONAL DEFENSE. (THUAN HAS INDICATED DIEM HAS BEEN THINKING OF GIVING THUAN DEFENSE JOB.)

(C) RUMORS ABOUT MR. AND MRS. NHU ARE CREATING GROWING DISSENSION WITHIN COUNTRY AND SERIOUSLY DAMAGE POLITICAL POSITION OF DIEM GOVERNMENT. WHETHER RUMORS TRUE OR FALSE, POLITICALLY IMPORTANT FACT IS THAT MORE AND MORE PEOPLE BELIEVE THEM TO BE TRUE. THEREFORE, BECOMING INCREASINGLY CLEAR THAT IN INTEREST DIEM GOVERNMENT SOME ACTION SHOULD BE TAKEN. IN ANALAGOUS SITUATIONS IN OTHER COUNTRIES INCLUDING US IMPORTANT, USEFUL .GOVERNMENT PERSONALITIES HAVE HAD TO BE SACRIFICED FOR POLITICAL REASONS. I WOULD SUGGEST THEREFORE THAT PRESIDENT MIGHT APPOINT NHU TO AMBASSADORSHIP ABROAD.

(D) SIMILARLY TRAN KIM TUYEN, NHU'S HENCHMAN AND HEAD OF SECRET INTELLIGENCE SERVICE, SHOULD BE SENT ABROAD IN DIPLOMATIC CAPACITY BECAUSE OF HIS GROWING IDENTIFICATION IN PUBLIC MIND WITH ALLEGED SECRET POLICE METHODS OF REPRESSION AND

DURBROW

SECRET

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

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Declassified per Executive Order 13526, Section 3.3 NND Project Number; NND 63316. By: NWD Date: 201 i

-2 62U, SEPTEMBER 16, 6 PM (SECTION TWO OF TWO) FROM SAIGON

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6. RELAX EXISTING MINISTRY OF INFORMATION CONTROL OVER COGENT OF THE VIETNAMESE PUBLIC MEDIA (PRESS,MAGAZINES, RADIO),

SO THAT THEY MAY CONTRIBUTE TO WIDER DISSEMINATION OF FACTS TO DISPEL RUMORS, ESPECIALLY WITH RESPECT TO RECOMMENDATIONS k AND 5 ABOVE, AND THUS TO CLOSING THE GAP BETWEEN GOVERNMENT AND ITS PEOPLE BY TRANSMITTING IDEAS FROM ONE TO THE OTHER. TO INSURE- THAT THE PRESS WOULD REFLECT, AS WELL AS LEAD, PUBLIC OPINION WITHOUT BECOMING A MEANS OF UPSETTING THE ENTIRE GVN STRUCTURE, IT SHOULD BE HELD RESPONSIBLE TO A SELF-IMPOSED CODE OF ETHICS OR "CANON" OF PRESS-CONDUCT.

7. LAUNCH MAJOR PROPAGANDA CAMPAIGN ABOUT NEW 3-YEAR DEVELOPMENT PLAN IN EFFORT CONVINCE PEOPLE THAT GOVERNMENT GENUINELY AIMS AT IMPROVING THEIR WELFARE. (THIS SUGGESTION DEPENDENT OF COURSE UPON ASSESSMENT OF SOUNDNESS OF DEVELOPMENT ELAN, WHICH HAS JUST REACHED US.

8. ADOPT FOLLOWING MEASURES FOR IMMEDIATE ENHANCEMENT OF PEASANT SUPPORT OF GOVERNMENT: (A) ESTABLISH MECHANISM FOR INCREASING PRICE PEASANT WILL RECEIVE FOR PADDY CROP BEGINNING TO COME ON MARKET IN DECEMBER, EITHER BY DIRECT SUBSIDIZATION OR ESTABLISHMENT STATE PURCHASING MECHANISM; (B) INSTITUTE MODEST PAYMENT FOR ALL CORVEE LABOR: (c) SUBSIDIZE AGROVILLE FAMILIES ALONG SAME LINES AS LAND RESETTLEMENT FAMILIES UNTIL FORMER ON FEET ECONOMICALLY; (D) INCREASE COMPENSATION PAID TO YOUTH CORPS. IF DIEM ASKS HOW THESE MEASURES ARE TO BE FINANCED I SHALL SUGGEST THROUGH INCREASED TAXES OR INCREASED DEFICIT FINANCING, AND SHALL NOTE THAT WIDER CERTAIN CIRCUMSTANCES REASONABLE DEFICIT FINANCING BECOMES A POLITICALLY NECESSARY MEASURE FOR GOVERNMENTS. I SHOULD ADD THAT USING REVENUES FOR THESE FUNDAMENTAL AND WORTHY PURPOSES WOULD BE MORE EFFECTIVE THAN SPENDING LARGER AND LARGER SUMS ON SECURITY FORCES, WHICH, WHILE THEY ARE ESSENTIAL AND SOME ADDITIONAL FUNDS FOR EXISTING SECURITY FORCES MAY BE REQUIRED, ARE NOT COMPLETE ANSWER TO CURRENT PROBLEMS.

9. PROPOSE SUGGEST TO DIEM THAT APPROPORIATE STEPS OUTLINED ABOVE BE ANNOUNCED DRAMATICALLY IN HIS ANNUAL STATE OF UNION

MESSAGE TO

,r

Declassified per Executive Order 13526, Section 3.3 NNI> Project Number: NM) 63316, By: NWD Dak- 20! I

-3- 62k, SEPTEMBER l6, 6 EM (SECTION TWO OF TWO) FROM SAIGON

MESSAGE TO NATIONAL ASSEMBLY IN EARLY OCTOBER. SINCE DIEM USUALLY DELIVERS MESSAGE IN PERSON THIS WOULD HAVE MAXIMUM EFFECT, AND I WOULD RECOMMEND THAT IT BE BROADCAST LIVE TO COUNTRY.

10. AT SOME STAGE, PERHAPS ON OCCASION FIFTH ANNIVERSARY ESTABLISHMENT REPUBLIC OF VIETNAM ON OCTOBER 26, IT MAY BECOME HIGHLY DESIRABLE FOR PRESIDENT EISENHOWER TO ADDRESS A LETTER OF CONTINUED US SUPPORT TO DIEM. DIEM HAS UNDOUBTEDLY NOTICED THAT EISENHOWER LETTER RECENTLY DELIVERED TO SINANOUK. NOT ONLY FOR THIS REASON BUT ALSO BECAUSE IT MAY BECOME VERY IMPORTANT FOR US TO GIVE DIEM CONTINUED REASSURANCE OF OUR SUPPORT, PRESIDENTIAL LETTER WHICH COULD BE PUBLISHED HERE MAY PROVE TO BE VERY VALUABLE.

REQUEST ANY ADDITIONAL SUGGESTIONS DEPARTMENT MAY HAVE AND ITS APPROVAL FOR APPROACH TO DIEM ALONG LINES PARAS 1 TO 9.

WE BELIEVE US SHOULD AT THIS TIME SUPPORT DIEM AS BEST AVAILABLE VIETNAMESE LEADER, BUT SHOULD RECOGNIZE THAT OVERRIDING US OBJECTIVE IS STRONGLY ANTI-COMMUNIST VIETNAMESE GOVERNMENT WHICH CAN COMMAND LOYAL AND ENTHUSIASTIC SUPPORT OF WIDEST POSSIBLE SEGMENTS OF VIETNAMESE PEOPLE, AND IS ABLE TO CARRY ON EFFECTIVE FIGHT AGAINST COMMUNIST GUERRILLAS. IF DIEM'S POSITION IN COUNTRY CONTINUES DETERIORATE AS RESULT FAILURE ADOPT PROPER POLITICAL, PSYCHOLOGICAL, ECONOMIC AND SECURITY MEASURES, IT MAY BECOME NECESSARY FOR US GOVERNMENT TO BEGIN CONSIDERATION ALTERNATIVE COURSES OF ACTION AND LEADERS IN ORDER ACHIEVE OUR OBJECTIVE.

DURBROW HC/

Declassified per Executive Order 13526, Section 33 NND Project Number; NND 63316. By: NWD Date: 2011

FOREIGN SERVICE DESPATCH

FROM: Amembassy, SAIGON 137

Desp. No«

TO: THE DEPARTMENT OF STATE , WASHINGTON October 15, 19^0

REF: EMBTEL 802, Oct. 15, 19^0

Subject: Approach to President Diem on Suggested Political Actions

Attached as enclosure 1 is the English text of a memorandum on suggested political actions^ a French translation of which "was read and then handed to President Diem by Ambassador Durbrow on October lk P i960. The French translation which was left with President Diem was classified "Top Secret" for the purpose of impressing Diem* For United States' purposes, however, we consider the classification of both the English and French texts to be Secret.

Attached as enclosure 2 is the English text of notes on the suggested transfer of Ngo Dinh Nhu and Dr. Tran Kim Tuyen 5 a French translation of which was read to President Diem by Ambassador Durbrow at the same time.

President Diem f s reaction to this approach was described in our telegram No. 802, October 15, i960.

For the Ambassador

M

Joseph A. Mendenhall Counselor of Embassy for Political Affairs

INF0:SDEF-7 FILE-l(8)JJF/KS

Enclosures:

English text of memorandum on suggested political actions

English text of notes on suggested transfer of Ngo Dinh Nhu and Dr. Tran Kim Tuyen.

Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET - LIMIT DISTRIBUTION

Page 1 Enclosure 1 Despatch 157 From Saigon

ENGLISH TEXT OP MEMORANDUM HANDED TO PRESIDENT DIEM

Mr, President, in your struggle for survival against the Viet Cong, you have taken many wise steps with respect to the security forces of the Goverment, and I understand that you are in the process of setting up a national Internal Security Council and a centralized intelligence agency as important and necessary additional steps toward giving effective guidance to and making maximum use of the security forces. We have recognized the increased security threat to your Government and the additional needs of your security forces. We have shown this recognition by the comprehensive program for training, equipping and arming the Civil Guard which I have just explained, by our furnishing special forces personnel for the anti-guerrilla training of ARVN and by supplying the special equipment needs of ARVN for the war against the guerrillas.

Our serious concern about the present situation is based, however, not only on the security threat posed by the Viet Cong, but also on what to us seems to be a decline in the popular political support of your Government brought on in part, of course, by Viet Cong intimidation. As your friend and supporter, Mr, President, I would like to have a frank and friendly talk with you on what seems to be the serious political situation confronting your Government, While I am aware that the matters I am raising deal primarily with internal affairs and, therefore, in ordinary circumstances would be no concern of mine, I would like to be as helpful as I can by giving you the considered judgment of myself and some of my friends and your friends in Washington on what we hope would be appropriate measures to assist you in this present crucial situation,

J

I believe that your speech to the National Assembly on October 3* in which you stated that your Government has decided to reorganize certain of its institutions and to rationalize and simplify its working methods, indicates that we may " be thinking to some extent at least along the same lines, 1

I would like particularly to stress the desirability of actions to broaden and increase your popular support prior to the 1961 Presidential elections. It would seem to me that some sort of a psychological shock effect would be helpful in order to take the initiative from the Communist propagandists as i- 11 as the no n-Communist oppositionists, and to convince the population that your Government is taking effective political as well as security measures to deal with the present situation. It would appear that, unless fully effective steps are taken to reverse the present adverse political trend, your Government will face an increasingly difficult internal security situation. -It is our carefully consider view that small or gradual moves are not adequate. To attain the desired effect, moves, major in scope and with extensive popular appeal, should be taken at once. Specific actions which, we would suggest are as follows:

SECRET - LIMIT DISTRIBUTION

Declassified per Executive Order 13326, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 I

SECRET - LIMIT DISTRIBUTION Page 2

Enclosure 1 Despatch 157 From Saigon

(1) We suggest that you consider Cabinet changes as a necessary part of the effective moves needed to build up popular interest and support. One Cabinet change -that we believe would be helpful would be the appointment of a full-time Minister of National Defense in order to permit you to devote your attention to developing over-all policies. To achieve maximum benefit it is suggested that you issue firm directives to assure that there is adherence to channels of command both up and down and that firm action be taken to eliminate any feeling that favoritism and political considerations enter into the promotion and assignment of personnel in the armed forces. Removal of this latter feeling is of great importance if the morale of the armed forces is not to be adversely affected during their mortal struggle against the Viet Cong.

We suggest that one or two members of the non-Communist opposition be given Cabinet posts in order to demonstrate to the people your desire for the establishment of national unity in the fight against the Viet Cong, and to weaken the criticisms of the opposition which have attracted considerable attention both in Saigon and abroad.

(2) In rationalizing and simplifying the Government's methods of work, we suggest you seek to find new methods to encourage your Cabinet Members to assume more responsibility rather than frequently submitting relatively minor matters to the Presidency for decision, thus allowing you more time to deal with basic policy matters; that the new national Internal Security Council be so constituted as to be the top level policy-making institution by having it meet frequently under your chairmanship for full discussion of all the major problems confronting the Government and proposed solutions thereto; and that of authority from you in direct line to the department and agency heads properly concerned. Under this system Cabinet Ministers and agency heads can be held fully responsible for the operation of their departments and agencies, because of the full authority you have bestored upon them. If a Cabinet Minister cannot fulfill his responsibilities under this system, we would then suggest that you replace him,

(3) We would suggest that you consider altering the nature of the Can lao Party from its present secret character to that of a normal political party which operates publicly, or even consider disbanding It, If the first alternative is adopted, various methods of convincing the population that the action has been taken might be used, such as party publication of a list of its members. The purpose of this action would be to eliminate the atmosphere of secrecy

and fear and reduce the public suspicion of favoritism and corruption, which the Can lao Party's secret status has fostered according to many reports we have heard in and out of the Government.

»

SECRET -LIMIT DISTRIBUTION

Declassified per Executive Order 13526, Section 33 NNI■> Project Number: NND 63316. By: NWD Date: 2011

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(5) Vie suggest that you issue c^ t^irpiug that you jgajL £^^^ officii to rake a declaration* for possible publication* listing his property

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(6) tfa suggest that you announce that,* J^tfeg_props yill talco..airosgc&siblo rolo in policing; itself , the, controls ccsssreioQfl c/ircr_ii,.by_tho X^ovcr;;::^wivoiuA '

cuposi-iiouj to draft a press coc^e which the press xould police^ within tho

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ordy-r to reduce ru^ior-^icngeriug a£ai^s*i the Gov^rnnsnts B^JLiCiooa or no^

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^1$-^1 \ (?) ^e would like to oiiggost that yon J^ bgya li gQ. nrrrii i^crcants for

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Ui also suggest that you ease restrictions on the entry into ani derr^rs ./U^) frcc?i Viet*-r^ai;i of Vietnamese nationals^ in crder to encourage Vistnar,ese : 0.1

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Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

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trained abroad to rotnra and scsticb their eontributica to tho clovel^jn-nt of tho: :

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eliminating arbitrary actions by local governnuat officials by dOBKJas&cating

to their, that they will periodically be judged at the polls* *

(9) He suggest pronpt adoption of thes faSPLouJAg Bgnsaeres for tho cnbr.r.cc-jnent of the G6voi\^ciit-s support in rural areas

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. (a) Tnlco action which *;ill reauXt in an A?^roan^ ^.^-t":o.,prico ;;?;d^h tieaSa&ts actually will reooivo for pa,d$y beforo th:i now Jxarvest*.

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■ (b) Liberalise the terms of credit e:;:tondod to th& G^ill^ic^ JPari ?&?$

——-•—•••»—— — ■ .»■—»

(c) Continue tojsxgasacL expcs^*^^

diversification., particularly In the j'hlcor.g Delta area*

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(d) institute a gsffitesa; of _m^s? lt GarorgnsSt ' pa:ffiffi£;t fta? all' cc ;-xLt^ dovclopr.^_l^bor^iathor'cn a^rovillor, cr on otacf Go < vbs3&i3zr& :;roj s ;,

, ' (e) Institute a systoi:\_o£ iinitod jrab^J^i^^ a;ro-

villus during tho poricd of tho-L^'rHclJucTfee^t., vihilo tho $w6 &it£lTtIcn:f~ arc not eonplax^iy cGacarablaj the Diiboxcasr; aolpod to brxags zz& ported ox ad(j ust&ifKit for the aottl^rs>n the High PJ&tcau*' "Thin should holp to desralop

c^pan^oG incurved in moving to o&icl getting rs^ttled in the asrovilles*

. / '1 * (f) Give aoprov^rl-xte ar^d adequate co^oa:iea* ! :-' : c:\ to t&o r^GO -givfega

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(c) Xacr ease c ot^ongayiogs pal<5 *o the Self G^r.-.r-ci Yci\*h,

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EMG&CSH TEXT 01" HOFES OS NCO ffi'HK ErJU AKD Dit: TRAM IOH 'J.'i.'Y.

In addition to those positive uiovda^ anoin &n a £H/si>4 iwrt m^*> iVflu&fc&tft&yj * ' X fool that X fihcqjldt brin^ to your attention the increasing discontent 3*?;0nj*

various strata .of Vietn:.■:vi ;se society vith the role ana allowed activities or ypts" brother &go dinh Khn and Had&tia Nhti. I repeat^ I bring this matter up sg>st reluctantly since I have regpeet for Kr« t and Krs« Hhu and I knot; ho:/'much you count on his advice and counsel* 1 know pefso#al3y of the r&afcty contributors;; ho ban made to the success of your Government and I knoif that he is easily desirocs with you to maintain the independence* and integrity of Viet-lfe&j as ;;j11 an to advance the fine progress -which has already been made in your country* Ee have ! disc&ssed this* type o.? rumor before and I ioiov; that you have full coafidene^ in year brother* Nevertheloss 3 the position that tfr. aid Krs„ Hhu hold in Yiet-Mar.: ha^ become the basis for a large asiQurrfc of criticism and discontent ggsinst the Govarnniojit^Unfortunateiy^ whether based on fact cr not., thin criticise ha/; roaohed the point that question is no longer whether, tlsese allegations arc true or x:ot 0 The fact that wore and more people are bcli&i&ng them is seriously damaging tho prestige of ihe Government. Unfortunately thesa runers are also bsing vfoml against your Government'by Viet Cony propagandists in the countryside. Therefore^ sin:e it appears that these allegations are asswniftg a larger and larger Sjapartsncs in the public .mini and are causing considerable discontent in t&a country^ it ai£h perhaps bo advisable to givs serious consideration to translbr^Uyg Er, $hu to oths:

It has taaft suggested that ho aright be ;::\ven an Ambassadorial assi^-nt A3 you know, 2&% President,, ruany Governments .> including &y 0":;n, faata fro:i tin;e found *tt necessary to remove or transfer highly useful officials because of the adverse public image they'have created

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duties.

abroad©

time to

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In this connection xm have also heard maUx criticism o:^ the role and activities of Cr* Tran Xitt Tuyen^ tvho., according to "a gronins arii^er of reports^ has cokq to represent a negative force in the ninis of n:a"y^ Thi^ too feoxistitiit a basis for serious discontent and resentment agaisst the Go-vern^ent 0 T personally Imoyi I)r, Tuyen and knovr of his abilities and contribution t» the ;;erh o£ th3 Govern^nt 5 but because of the negative attitude about hir,i T/hic- hae developed^ it nd^bt be uell to collider his appointment to a po?it al^road*

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I repeats as unfosirded as these reports and ru^orc m$ be P it has often - proven advantageous to other Governments to make transfers of this king*

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Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

TOP SECRET - SENSITIVE

INCOMING TELEGRAM

DEPARTMENT OF STATE

CORRECTION ISSUE]'': lo/lT/60 6:30 AM VS

Control: 8203

Red'd: October 15, i960

6:23 AM

1

- FROM: SAIGON - CORRECTED PAGE 1

TO:

SECRETARY OF STATE

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NO: 602, OCTOBER 15, 6 AM

SENT DEPARTMENT 802. REPEATED INFORMATION CINCPAC POLAD 122

LIMIT DISTRIBUTION

DEPTEL 581 ..."

DIEM RECEIVED MS ON ikYil FOR HOUR AND FIFTEEN MINUTES WHICH PERMITTED ME OUTLINE HEW PROPOSALS TRAIN CIVIL GUARD AND HAVE FRA3CK DISCUSSION RE SUGGESTED' STEPS TO AMELIORATE DETERIORATING POLITICAL SITUATION.

.

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AFTER OUTLINING NEW PROPOSALS FOR CIVIL GUARD, WHICH PLEASED HIM VERY MUCH (REPORTED IN SEPARATE TELEGRAM), IN WHICH THUAN TOOK PART, I SUGGESTED TO PRESIDENT THAT I WOULD LIKE TO HAVE OPPORTUNITY TO TALK WITH HTM ALONE. THUAN LEFT. I THEN READ COPY, CONTAINING SUGGESTIONS AGREED TO BY DEPARTMENT IN REPTEL (ENGLISH TEXT BY POUCH). /BEFORE READING TEXT I STATED THAT ON OCTOBER 13 I HAD BEEN IN VIETNAM FOR THREE AND ONE HALF. YEARS, HAD FOUND MX ASSIG-FMEHT EDIFYING, INTERESTS AND MOST WORTHWHILE. I MENTIONED SOLID AND WORTHWHILE PROGRESS I HAD NOTED IN COUNTRY SINCE 1957 AND CONGRATULATED PRESIDENT ON HIS MANY FI2SB ACCOMPLISHMENTS. I THEN STATED THAT SINCE I ADMIRED HIS COURAGE AND DETERMINATION I PERSONALLY DESIRED TO 'DO ALL I- COULD TO HELP HIM, PARTICULARLY IN THESE TRYING TIMES. I ADDED I PERSONALLY, AND OTHER FRIES j OF HIS HERE A3 WELL AS THOSE IN WASHINGTON, HAVE BEEN GIVING KUCH THOUGHT ABOUT HOW WE MIGHT BE HELPFUL TO HIM. RESULTS OF OUR • THINKING LED TO CONCLUSION THAT WE COULD BE MOST HELPFUL IF WE SHOULD MAKE' SEVERAL SUGGESTIONS WHICH I COULD PUT TO KIM IK A FRANK MANNER AS A FRIEND. . I THEN READ THE PAPER. J

•

DIE-! LISTENED INTENTLY AND MADE NO COMMENTS WHILE I WAS READING EXCEPT . TO REMARK AFTER I HAD SUGGESTED HE MIGHT GST RID OF MINISTERS WHO HAD NOT CARRIED OUT THEIR RESPONSIBILITIES, BY SATING HARDEST THING TO DO IS 10 GET QUALIFIED PERSONS WHO WILL TAKE RESPONSIBILITIES.

WHEN I FINISHED READING PBESIDENT STATED THAT MOST OF SUGGESTIONS I HAD BADE CONFORMED TO PUS RASIC IDEAS, BUT ADDED AS I.UCH AS HE WOULD LIKE TO PUT THESE IVTO' EFFECT, STEPPED-UP ACTIVITIES OF THE VIET CONG MADS IT MOST DIFFICULT. HE ADDED T?IAT MANY PEOPLE HAVE BEEtf INTIMIDATED BY VIET CONG AND SOME NAD BEEN WON OVER SO THAT IT WOULD BE DIFFICULT TO CARRY OUT SOME OF STEPS REGARDING COUNTRYSIDE. I REPLIED WHILE I REALIZED DIFFICULTIES I WAS FIRtLY CONVINCED AFTER. MOST CAREFUL CONSIDERATION THAT IT ESSENTIAL NOW TO TAKE MANY IF NOT ALL OF THESE SUGGESTED STEPS ON A

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

TOP SECRET - SENSITIVE

CALCULATED-RISK BASIS III ORDER TO CREATE THE' PSYCHOLOGICAL SHOCK WHICH I BELIEVED ESSENTIAL AT THIS TIMS. PRESIDENT MADE NO FURTHER COMMEHT EXCEPT TO TELL MS THAT HE WOULD CONSIDER THE SUGGESTIONS I HAD GIVEN HIM.

I THEN AGAIN BEGGED.HIS INDULGENCE AND ASKED IF I COULD BRING UP A MOST SENSITIVE Aim DELICATE MATTER WHICH I'FELT IN HIS INTEREST'AND IN ■ INTEREST OF. VIETNAM I SHOULD DISCUSS VERY FRANKLY. FROM NOTES IN FRENCH WHICH I READ BUT DID NOT LEAVE WITH HIM, (COPY BY POUCH), I DISCUSSED GROWING CRITICISM OF HIS PROTHER AND MADAM KKU, AS WELL AS DR. BUYBN AND SUGGESTED THAT THEY SHOULD BE ASSIGNED ABROAD. DIEM DID NOT INTERRUPT ME BUT ASSUMED SOMEWHAT GRIM, AND I DETECTED SLIGHTLY HURT MANNER. HIS- ONLY COMMENT WAS THAT THESE RUMORS ABOUT THE 17HUS WERE SPREAD BY COMMUNISTS. I REPLIED THAT I WAS SURE THAT COMMUNISTS WERE DOING ALL THEY COULD TO SPREAD SUCH RUMORS BUT I REPEATED THAT THE UNFORTUNATE PART ABOUT IT IS THAT MORE AND MORE PEOPLE ARE BELIEVING THESE REPORTS— VIETNAMESE LOYAL TO HIM, THOSE WHO MIGHT BE CONSIDERED IN THE OPPOSITION, FOREIGN CIVILIANS AND FOREIGN DIPLOMATS TO SAY NOTHING FO THE PRESS. I REPEATED, AS I HAD PREVIOUSLY, THESE REPORTS WERE SERIOUSLY DAMAGING PRESTIGE OF HIS REGIME. '

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AFTER DISCUSSING THE HHUS, I AGAIN APOLOGIZED, FIRST OF ALL FOR BRINGING UP THIS PERSONAL AND SENSITIVE SUBJECT, AS WELL AS THE OTHER SUGGESTIONS I HAD MADE. I AGAIN ASKED HIS INDULGENCE AND FORGIVENESS FOR SPEAKING SO FRANKLY AND ADDED I HOPED HE WOULD UNDERSTAND THAT I WAS TALKING AS A SINCERE- FRIEND.

OCMIENT: CONSIDERING THE FAIRLY FRANK CRITICISM- I MADS OF HIS REGIME AND FAMILY, DIEM OUTWARDLY SHOWED NO REAL RESENTMENT. AFTER I APOLOGIZED FOR BRINGING UP THE NHU QUESTION, DIEM REMAINED SILENT FOR A BIT AND THEN WE DISCUSSED LAO DEVELOPMENTS IN A MATTER-OF-FACT REALISTIC WAY. I SAID "I WAS'SURE THAT PARSONS WOULD FILL HIM IN REGARDING -LATEST LAO BEVELOPKE3TS WHEN PIE IS HERE ON l8TH. I THEN REITERATED MY CLOSING APOLOGETIC COMMENTS ON THE NEC QUESTION AND TOOK MY LEAVE, WHICH WAS QUITE CORDIAL.

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EDRBROW

TOP SECRET.- SENSITIVE

Declassified per Executive Order 13526, Section 3.3 NND Project Number; NND 63316. By: NWD Date: 2011

pfflfit % lEUESRAfift Department oi

J? ICA1IT: DCOiUCT f_, CHARGE lO

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SECR3T

Classi/ication

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SENT TO:

Aiaembassy SAIGON c V 0

Rptd info: CINGPAC

JOIRT STATE-DOB JSSSAOE

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1. XpivH^XoXrK^J View continuing communist inspired and directed

^CppnsidLon , . shquld^bfci developed

insurgency in YN, :d^safecc^>2b^xdg:g:G^rd: over-all plan/for encouraging

and supporting G7M in national emergency effort defeat insurgents and bring about order and stability in that country. Such action determined

is 2

i §

necessary in order check disruptive influences Which could cause el

integration of the Government and the possible loss of South Viet-Nara

* * *

to Communist Eloc» *

2. Studies of problem indicate plan for QVH should provide for integration and centralized direction of iaa:eimum resources in order icombat insurgency. Bused on requirements outline plan (see Para h)> US

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apeuej.es Sjj lgoaj ngy wish develop plan further 3 work out procedures there- O . under and determine US personnel, mteriel and budgetary support requisite ■"*

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11 successful implementation this OVN emergency effort.

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3* Before such plan and procedures made known to GVH 3 they w aid be reviewed in Washington for consistency with US policy and for funding.

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When US position established, &VN would be approached to gain acee bance such plpn and to work out details of organization, implementation by

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Tolajraph'C Iiom,minion and h:;iliC4t<on approved byt

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ICA - Kr. Nestle (/ | A i'-' S/3 ' 0r\ \//j *• SECRET

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CI^ssmecitioK

• REPP.ODUCTIO;'! t : ; OB T; COPY IS PROHftrfLiS UNLESS tt UMCLASSJ,"t5D".

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 201 i

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of telegram to.

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GVN authorities and provision of 113 support* -

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U. Draft outline plan for GVN national action cabled Chief MAfiG

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(Defense Mes'sag^ 98299U - 162l£5z Sept 60) should be developed by

Ambassador and CT in sufficient detail to provide basis approval

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courses of action and US supoort reauirements therefor. Realize several important ideas suggested draft outline plan already under

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stud/ by GVN. This Kg' might facilitate acceptance by GVN over-all plan :;hich appears necessary meet national emergency.

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1328

Classification

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

LIMITED DISTRIBUTION

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SENT TO: AmKnbajssy Saigon 77 5 j 11 November i960 RPTD INFO: CIHCPAC FOR POLAD LIMITED DISTRIBUTION

If still appropriate you may vish inform Diem and at your discretion ^ct word to coup leaders that ve consider it overriding importance to

V

Vdet Nam and Free Vorld that agreement be reached soonest in order avoid continued division > further bloodshed vith resultant fatal weakening Viet-Nam f s ability resist Communists.

HERTER

Pencilled IJote:

Parson's pushing the panic button ctgain?

s/s.

H/ll/60 F2:SEA: R0 Cleveland

FH - J. Graham Parsons

S/S - Mr. Perkins

COPY

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LIMITED DISTRIBUTION

1 Ov^prf

Declassified per Executive Order 13526, Section 3,3 NND Project Number: NND 63316. By: NWD Date: 201J

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£.}'KIC& OF THE SECRETARY OF DEFENSE

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Declassified per Executive Order 13526. Section 3.3 NND Project Number. NND 63316. By: NWD Date: 2011

OFFICE OF THE SECRETARY OF DEFENSE

WASHINGTON 25. D.'c.

NOV 1 1 mm

• »

MEMORANDUM FOR SECRETARY GATES From; Brig Gen Lansdale, OSO/OSD >^\

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Subject: Vietnam

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With the news that President Diem has put down the revolt in Saigon and is rapidly re-establishing his authority, it would be useful to give some thought to what comes next. Here are some initial personal thoughts which might be of help in considering the situation.

The revolt undoubtedly has taught a lesson to Diem. lie might well read this lesson as teaching him to mistrust large segments of the armed forces and, possibly, the utility of the "way MAAG advisors are placed with Vietnamese units. After all, officers and men in the revolt were quite close to the American military. Thus, it is possible that he will tend to take even closer personal command of the armed forces and do SQme shaking up by his own personal direction. If so, then this will make General McGarr r s role with President Diem of vital importance to the United States, It would be useful to get State's agreement to free General McGarr to confer with President Diem as closely and as continuously as necesseiry, under only broad guidance to attain U.S. objectives, without the Ambassador insisting'upon McGarr checking with him every five minutes.

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Of course, the lesson we would like him to learn is that he should change some of his ways, since some of his people felt strongly enough about it to take up arms against him. This is normally a task for the Ambassador, when it comes to conveying U.S. views on such delicate internal matters to a Chief of State. However, it is most doubtful that Ambassador Durbrow lias any personal stature remaining. , Diem must feel that Durbrow sided with the re colters emotionally. Perhaps he even feels that Durbrow's remarks over the months helped incite the revolt. Thus, it would be useful to get Durbrow out of Saigon. A graceful way would be to have him come home to report.

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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

SECRET

£

15 November I960

MEMORANDUM FOR DEPUTY SECRETARY DOUGLAS From: Brig Gen Lansdale, 0S0/0SD Subject: Vietnam

In determining U.S„ policy towards Vietnam in the immediate future, you might find the following personal observations of help:

President Ngo Diah Diem will have the 195^ coup attempt of General Minh in mind as he deals with the leaders of the i960 coup attempt and receives U P S. advice about punishment. In 195^? Diem was persuaded to let Minh and his key officers leave the country unpunished. A few weeks later, they were instigating a revolt by the sect forces against Diem which led to considerable bloodshed in March and April 1955* President Diem always felt that a little more firmness with a few individuals would have . cooled many of the hot-heads who later listed to Minh. r

The 195^- &nd i960 events have enough similarities to make the 195** lesson fresh in his mind. Both coup attempts were in November. The military leader of each claimed inspiration from Nasser of Egypt and had rather close ties with former chief of state Bao Dai. Both had imprecise programs of political aims, stated as generalized ideals which sounded as phoney as a $3-bill to the people they hoped would rally to their cause, but which coincided with a French analysis of the desires of the U 0 S 0 Ambassador and his political staff. Both were certain that Army units wouldn't act against them; both woeed the sect organizations and the same political parties; both seem to share the same friends and acquaintances in France and Cambodia. !

The actions of the U.S e Ambassador undoubtedly have ; deepened President Diem f s suspicions of his motivations. Diem cannot help but wonder at U.S e objectives as voiced by such a

SECRET

Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316, By: NWD Date: 2011

SECRET

spokesman. At the most critical moment of the coup attempt, the U.S* • Ambassador urged Diem to give in to rebel demands to avoid bloodshed. Earlier, he had urged others to urge Diem to compromise with the 1 I rebels. The most charitable view that Diem could take would be that

*\ our Ambassador is a badly-informed man, but he would also then believe

that the Ambassador has been far too prone to listen to the wrong people in Vietnam, people who are Diem's enemies.

Actually, Ambassador Durbrow is not entirely to blame for these blunders* The invitation to engage in this badly-timed and demoralizing meddling in Vietnam's affairs was given the Ambassador by the Southeast Asia desk staff in State message 775* This action, on top of many others which seem to have weakened both the U.S. position and the cause of freedom in Southeast Asia in the immediate past, should make us note that advice and actions of this staff carry definite hazards to the security of the U.S. Their advice and instructions on the next events in Vietnam deserve the most careful scrutiny and evaluation, particularly by Defense whose resources are called upon so heavily to 1 carry out U.S. policy in this area. The long-known strategic value of

Southeast Asia places a premium upon our military participation.

Finally, it appears that General McGarr, the MAAG Chief, came through this test of U.S. influence very well. Both the rebel forces and the loyal forces turned to him for counsel. He seems to have handled them with complete honesty and objectivity which will increase his potential for influencing the Vietnamese military in the future. This is a factor which should carry its proper weight in future considerations of our actions in Vietnam. Also, it should be borne in mind that this will subject General McGarr to considerable vindictive attack by the Vietminh and by those jealous of his increased prestige.

These observations are prompted by the fact that it is critical that U.S* plicy makers have some deeper understanding of people and events in Vietnam, if we are to keep Southeast Asia free. It is our key piece in the area and must be handled correctly.

Although this memo deals with a most sensitive subject, you may wish to show it to General Lemnitzer and Assistant Secretary Irwin who also are concerned with this problem.

SECRET

Declassified per Executive Order 13526, Section 3.3 NND Project Number; NND 63316. By: NWD Date: 2011

• *

THE JOINT CHIEFS OF STAFF

. WASHINGTON 25. D. C.

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JCSM«5 J i4«60

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ISMOPJVKDUI'i FOH THE SECRETARY 07 DKBKHSE

Subjects Helicopters for Vietnam (u)

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1," Reference is macle to a mefooranctum, da-ted 9 November 1950 fro:,: the Director of Military Assistance* Office of the Assiet&nt Secretary of Defense., International Security Affair*, to .ths Chairman* Joint Chiefs of Staff concerning a peoooxenda*- ■ tion*to provide E-3'± helicopters to the S&publie of Vieinsra*

2. The Joint Chiefs of Staff consider that thorc is a valid requirement to increase the helicopter lift capability of the Vietna£tase Armed Forces at this fciia&j in view of tha cleteri^ rating internal security gituition in Vie^HsSu ——— - —

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3. The Joint Chiefs of Staff concur vrith ths reeoaaneneiatiOR ■of the Director of Military Assistance., GASP (ISA), to provide 11 H-34 helicopters fro;?, service inventories for deliver? to the Republic of Vietnr;,ij subject to iB^nsdiats *reiBburs&riicnt to • • the providing department.

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1*. Xt is the raad-eretatidins oi the Joint Chiefs of Staff that emergency funding action will he required to provide the required increased helicopter lift capability to the Vietnamese ArrJed Forces 9 a&d that the Director of Military Assistance concurs in"the Oogaander in Chiefs Pacific request for such emergency funding; action,, rather than providing the increased capability by deviation from the FY 61 Military Assistance Fregre.** for Vietnam* ' " ■

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5, The provision of the requested nuabav of H~3*i aircraft from active service inventories^ plus the provision of the •ne03ssary ground support equipment and follovr on sparesj will result in a reduction in the capabilities of the providing

service until such time as the aircraft.* equipment anci.spr.rcs can ho replaces. In View of this* and since shortages of this model aircraft already exist .in the service inventories* rapid

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replacement will bo required fl In addition* the anticipated

in* ' *" " "'

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Progr&ra for yietnaiiu The Joint Qhiefs of Staff strongly recommend that the_additional funds required to provide the required Increased helicopter lift capability be provided from the President'*& Esiergenoy Fund* *•">'■

6, It is reeoipjaended that the Department of the Army be. designated to provide the 3.1 H-34 aircraft* plus the ground' support cqu5.pr.unt and follow on spares, with the • Department of the Air Force ImpleViientins deiivsry through normal Military Assistance Prograta procedures* ■ •

For the Joint Chiefs of Staff:

1

>

CURTIS B., LeMAY

Generalj USX? Vice Chief of Staff, U.S. Air Force

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Declassified per Executive Order 13526. Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011

INCOMING TELEGRAM DEPARTMENT OF STATE

SECRET

Control: 1953 Rec f d: December 5, i960

k:kl a.m. FROM: Saigon

TO: Secretary of State

NO: 1151, December U, 2 p.m. (SECTION ONE OF TWO)

SENT DEPARTMENT 1151; REPEATED INFORMATION LONDON, PARIS, BANGKOK, PHNOM PENH, VIENTENNE, SINGAPORE, KUALA LUMPUR, MANILA, CANBERRA UNNUMBERED, CINCPAC POLAD 221.

LIMIT DISTRIBUTION

Some three weeks after coup, following are my evaluation and recommendations:

On surface life has returned to normal, Viet Cong activities appear to have diminished somewhat, although this could be ' lull before storm; Diem has not adopted vengeful attitude against rebels, although certain others have sought take advantage of situation for "settlement of accounts" and some of "people's" actions against rebels 1 families, newspapers, et cetera, were unfortunate; Diem has taken some steps recommended by us in military field, i.e., partially placed Civil Guard under defense (this being clarified); is reportedly working on plan to set up what we hope will be effective operations commands, including reorganization and streamlining of field headquarters which we hope will be allowed to operate through firm chain-of-command, Diem, Nhu and Thuan have told us they i working on other reforms, i.e. election youth representatives 1 to village councils, eventual implementation elective representatives to National Economic Council, plan for periodic "fireside chats," promised reorganization of the cabinet structure, and 1 other unspecified moves which Thuan promised would be worked out by Christmas. It is hoped that these reforms are not just reforms on surface with little or no substance. Despite these signs, there is basically quite serious under-current malaise and skepticism whether effective reforms will be taken soon enough. This uneasy feeling not confined to intellectuals or opposition groups; but to sizeable number of others, i.e.,

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-2- 1151, December h 9 2 p.m., (SECTION 1 OF 2), from Saigon

cabinet Ministers 5 other loyal officials, deputies and some military, Nhu and Thuan have indicated that Diem, who not particularly interested fundamental political matters, is resisting some suggested basic reforms*

Nhu and Diem still deeply rankled particularly by critical American press stories about autocratic regime and entourage, and Diem made the ridiculous statement to Ladejinsky November 30th that he believes some Americans may have backed coup because one of coup leaders 3 Colonel Dong, "told him so during negotiations." This may represent rationalization blame others not selves. Diem probably drawing on his "miracle theory" refuses admit rebels could have captured or killed him if they had believed through Initial advantage (General Khanh told me 3rd after first rebel attack morning 115th there were only 30 defenders in Palace which could have been easily taken) and both Nhu and Diem now expressing deep displeasure because "Americans equated Diem regime with rebels because both antI-Communists and therefore we urged both sides negotiate. While under circumstances their attitude understandable 5 we have made point clear to them that we did all in our power to prevent bloodshed and urge rebels when they had pov/er to oust Diem that he should be given active role in any government established. While hothead can Lao party members who organized committee against Communists colonialists have been calmed down somewhatj this element could regain momentum and cause further trouble if unleashed again by CVN.

Just below surface there is much talk about another coup unless Diem relaxes some controls, puts in effective reforms, takes more effective action to fight VC and give protection to populs ';ion. There is still strong under-current of resentment against entourage but because any action he took this score would be under pressure and indicate weakness , and particularly his resentment of press stories about entourage, coupled with fact Diem feels he made Nhu as loyal adviser, prospects Diem will transfer Nhu to other work or abroad not in sight, at least for some time. Despite this malaise and feeling about entourage,

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-3- 1151, December U, 2, p.m. (SECTION 1 OF 2) ? from Saigon

most critics* still respect Diem as only leader at moment but this feeling could easily change unless he takes fairly drastic action to meet criticism and basic desires most strata population

We believe also that unless Diem takes early effective action on political front, coup has increased chances for development neutralism and for anti-Americanism among those critical of GVN. Despite our close identification with D'iem and his regime critics have not to date bracketed us with government in expressing their dissatisfaction. Many have told us however that only we can induce Diem adopt changes which will save his regime, thus indicating they look to us to help them. If, after failure of clearly anti-Communist coup attempt to bring about changes we are not successful in inducing Diem to make peaceful changes, critics may well become frustrated, turn against U.S., seek other means bring about change and might even move toweard neutralist position in middle. If Viet Cong guerrilla successes in countryside continue at rate registered during past year, this will also increase frustration of armed forces and population and could provide soil in which neutalism may grow.

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-2- 1151, December k, 2PM, (SECTION WO OF TWO) FROM SAIGON

6. DO ALL WE CAN GET DIEM TO ACCEPT BASIC PRINCIPLES SUGGESTED IN MAAG COUNTER-INSURGENCY PLAN, WHICH WILL BE FORWARDED SONNEST (SOME PARTS OF PLAN WHICH WITHIN U.S. AGREED POLICY

DIRECTIVES HAVE BEEN URGED ON GVN WITH SOKE SUCCESS).

7. CLARIFY INCONSISTENCIES IN TRANSFER CIVIL GUARD TO DOD IN ORDER THAT MAAG MAY START TRAINING ON LARGE SCALE SOONEST AND MAKE MAP EQUIPMENT AVAILABLE.

8. SINCE DIEM BELIEVES WE DO NOT UNDERSTAND SERIOUSNESS OF VC, THREAT AND HE SUSPECTS WE MAY HAVE ENCOURAGED REBELS, WE SHOULD MAKE ARRANGEMENTS IMMEDIATELY TO SHIP SIX H-3*4 HELICOPTERS WHICH

ARE NOT ONLY MOST URGENTLY NEEDED FIGHT VC EFFECTIVELY BUT WOULD REASSURE DIEM WE TRYING GIVE EFFECTIVE HELP.

9. SINCE IT FAR FROM CERTAIN DIEM WILL INTRODUCE SUFFICIENTLY APPEALING AND EFFECTIVE NEW PROGRAMS AND USE HIS PRESENT SECURITY FORCES IN MOST EFFICACIOUS MANNER, WE MUST FIND SUITABLE MEANS TO BRING PRESSURE ON HIM. AS I OUTLINED IN EMBTEL 1105

AS WELL AS IN MEMORANDUM THIS SUBJECT (LETTER TO PARSONS NOV 8) I AM CONVINCED, EVEN IF WE EVENTUALLY SHOULD AGREE, THAT WE SHOULD NOT NOW ACCORD HIS REQUEST FOR 20,000 ADDITIONAL FORCE OR CONCUR IN HIS UNILATERAL ACTION TO RAISE FORCE LEVEL (CHIEF MAAG 1537 DEC 1 - COPY JCS). TO DO SO WITHOUT HIS HAVING RELAXED CONTROLS, INSTITUTED EFFECTIVE REFORMS AND HAVING PERMITTED EFFICIENT USE PRESENT FORCES, WOULD NOT SAVE THE DAY FOR DIEM BUT MIGHT EVEN INDUCE HIM FOLLOW HIS INSTINCT TO RELY PRIMARILY ON USE OF FORCE BOTH TO CONTROL POPULATION AND FIGHT VC. WHILE I AM NOT FULLY CONVINCED NEED FOR EXTRA 20,000 MEN, I WOULD BE WILLING TO CONCUR IN SUCH ADDITION IF CAREFUL STUDY BY ALL CONCERNED CONCURRED IN THIS RECOMMENDATION. (MAAG VIEWS ON URGENT NEED FOR 20,000 INCREASE FORWARDED PARSONS MY LETTER NOV 30TH) THEREFORE, SUGGESTED THIS MATTER BE CAREFULLY STUDIED WASHINGTON AND IF FINAL RECOMMENDATION IS FAVORABLE IT BE KEP SECRET AS ACE IN THE HOLE TO GRANT DIEM PROVIDED HE HAS TAKEN OTHER NECESSARY STEPS WHICH ARE TO ME MUCH MORE FUNDAMENTAL, AND PROVIDED HE NEEDS EXTRA FORCE AFTER TAKING MORE ESSENTIAL STEPS. IF, FOR INSTANCE, AT THE BEGINNING NEXT YEAR HE HAS TAKEN EFFECTIVE STEPS ALONG LINES SUGGESTED ABOVE AND IT IS STILL CONSIDERED HE NEEDS INCREASED

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THE SITUATION AND SHORT-TERM OUTLOOK IN LAOS

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I. THE SITUATION

1. Laos has never been a national entity governed by sure and united authority. Its people lack a sense of national loyalty and identity and they continue to be-divided by

" traditional ethnic, regional, and family antagonisms. A gulf has always existed between the central government in Vientiane and the people in the countryside, and those who have governed Laos have never established effective authority or won the respect of all of the various peoples who make up the Laotian nation. The non-Communist political factions have never achieved unity or cohesion and have tended to view one another with as much suspicion as they do the Communist left. As a result, no strong, effective non-Communist leadership has emerged since Laos achieved independence. These fundamental weaknesses in the political and social . fabric of Laos have been brought again' to the surface and accentuated since Kong Le seized control 6r Vientiane in early August Indeed, developments since the coup were made possible, almost inevitable, by the incoherent nature of the country, its leaders, and its people. This chaos has been compounded by contradictory and inconsistent Western counsel and by the wide attraction of neutralism, however vaguely understood, among

, many Laotians.

2. The principal political elements in Laos, aside,from the Communist-dominated Pathet Lao—the Souvann^i Phourna government in Vientiane, the Revolutionary Committee set up by Phourni and Boun Oum at Savanna-khet, and King Savang at the royal capital of Luang Prabang—have been unwilling to work-together. Alone none of them has the fol-

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lowing, the national status, and the military strength to contain the Pathet Lao. The Laotian Army, spread thin in small often isolated units, has been uncertain in its loyalties. A majority of the commanders lean to Piioumi and the Revolutionary Committee although some still support Souvanna's government. Others seek to maintain a neutral position in the struggle among the non-Communist factions. r]e\v of them, however, appear willing to fight' one another. Some commanders are anti-Pathct Lao and ready to do battle with that enemy.

3. Under cover of the confusion, and taking advantage of both the stalemate .among the non-Communist elements and the desire of Souvanna and Kong Le for a negotiated end to the civil conflict, the Pathet Lao have steadily improved their political and military positions. Thus, Kong Le's act of mutiny set in motion a chain of events in Laos which could lead to the country's departure from its western orientation and its entry into the Communist orbit.

4. Kong Le*s mutiny and its aftermath have also had deep repercussions in Soi heast Asia, particularly in Thailand and South Vietnam. Thailand's Prime Minister, Sarit, is convinced that either a Communist takeover or the establishment of a neutrali „, coalition government in Laos would seriously threaten Thai security. Either development, he feels, would dangerously expose his country to Communist infiltration, subversion, and attack, and would generate strong pressures inside Thailand for a more neutralist policy. Moreover, he believes it would undermine his own personal position. He almost certainly views US policy in the Laotian crisis as providing a

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, demonstration of what support he could expect from the US if a Communist coup against his government were to occur. .Thus far, he has been most disillusioned by US policy in the Laotian crisis, feeling it to be indecisive and ambiguous. .

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5. As a result of the developments in Laos 'and the 11 November cojip attempt in Saigon, President Diem of South Vietnam probably has lost some of his confidence in US willingness to support fully his anti-Communist position. He may believe that the Saigon coup effort was at least partly stimulated by Kong Le's coup and the failure of the US to extend General Phoumi full and immediate support. Moreover, these events, coming on. the heels of US efforts to convince him to hold less tightly the reigns of power in his own government, have probably further undermined his confidence in US judgment. From Diem's point of view, an anti-Communist Laos provides some shield against a North Vietnamese attack, and southern Laos, at least, must be kept in anti -Communist hands to avoid critically exposing his own borders to infiltration and attack.

6. The outcome of the immediate crisis, insofar as internal considerations apply, rests primarily with the interplay of the intentions and capabilities of the major Laotian elements:

. Souvanna, Phoumi, the King, Kong Le, and-the Pathet Lao.

7. Soiivaiwt. Compared with other Laotian politicians, Souvanna has considerable per-

' sonal prestige and appeal among the peoples of Laos. He is stul Prime Minister, but he controls no organized political apparatus, he

lacks administrative control of 1 the countryside and command of the Laotian military, . and he is not trusted by the King. A quorum of the National Assembly, chosen in highly corrupt elections in May of 1960, remains in Vientiane, but almost certainly a number of its members, if free of duress, would oppose Souvanna or defect to the Phoumi group.

8..Souvanna is neutralist and leftist, but we do not believe that he is a Communist. Sou-vanna's leadership qualities are weakened by his impulsiveness, willful disregard of un-

pleasant facts, and over-weaning self-confidence, particularly with regard to his ability to deal with and control the Pathet Lao. He believes most of the Pathet Lao to be patriots who, once reintegrated into Laotian political and social life, would lose their Communist coloration. Those few hardcore types who would remain Communists, he states, could be kept in check. Accordingly, the only feasible solution for Labs, in Souvanna's mind, is a negotiated settlement with the Pathet Lao along the lines of the 1957 agreement, and a neutral foreign policy. Souvanna is moving Laos in the direction thai he has maintained for several years it should move. However, we believe that it is moving at a faster pace than Souvanna would countenance if he were master of his government and free from the pressures Kong Le and the Pathet Lao exert on him in Vientiane,

9. Early in the crisis, Souvanna apparently had hoped to strengthen his negotiating position vis-a-vis the Pathet Lao. He was unable to use Kong Lc to this end because Kong Le tended to be more amenable to the Pathet Lao than to Souvanna. At one time Souvanna probably believed that a combination of Kong Le and Pathet Lao military pressure on the one hand, and US political pressure on Phoumi on the other, would force the latter to capitu-.late, thus restoring his government's authority over the troops and areas controlled by t'the Revolutionary Committee. Although he has attempted to open negotiations with the Boun Oum-Phoumi group, his conditions have been unattractive to Phoumi, and, at times, seemed to be calculated insults. Recently Souvanna has attempted to strengthen his position by recruiting several new battalions of troops in Vientiane. However, these units are probably infiltrated by the Pathet Lao.

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10. Souvanna also hoped to win over the troops in the Luang Prabang area which had

tempted to maintain a neutral position. However, this hope was clashed by the pro-Savannakhct coup of 10 November and the subsequent defection of General Ouan to Sa-yannakhet. This was a serious blow to Souvanna, and he attempted to compensate for it .by drawing closer to the Communists in

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both the domestic and international spheres. On 17 November, his govemmqnt and the Communist Neo Lao Hak Xat announced an agreement to establish a national coalition government including representatives of the NLHX. The agreement also provided that the government would soon accept aid from Communist China and North Vietnam and would send a delegation to. those countries to negotiate for exchange of economic and cultural relations, for the re-establishment of telecommunications with North Vietnam, and for the immediate opening of the Laos-China border. On 29 November, Souvanna's cabinet named a 10-man friendship mission, headed by the Prime Minister, for a visit to Peiping and Hanoi beginning 10 December, Deliveries of Soviet food and POL to Vientiane have begun and a 3-man Soviet Embassy staff has taken up residence in Vientiane.

11, Thus, Souvanna now relies very heavily upon the support of pro-Communist and Kong Le elements. It appears that this will continue, and that as opposition to him mounts he will keep on seeking broader and more specific support from the Communist Bloc, Souvanna probably still hopes to keep Communist influence In check, but some of his measures to protect his position by moving closer to the Communists are irrevocable, and most, if not all, of them have been highly favorable to future Communist domination of the Vientiane Government.

12. Phoximt The position of Phoumi, and of the Revolutionary Committee he has set up with Boun Oum, has a number of serious weaknesses. In southern Laos, there are about 7,500 combat troops, most of whom are under commanders probably loyal to Phoumi. Most of these troops are scattered widely through the area, and have their hands full attempting to cope with local Pathet Lao activities. In the Thakhet-Savannakhet area, Phoumi has about 1,500 troops. He is in the process of recruiting and organizing an additional battalion. It is unlikely that Phoumi's troops without continued US assistance could or would offer very strong or effective resistance to a determined attack on their positions by Vientiane and Pathet Lao forces.

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13, Phoumi's military capabilities have markedly increased since he received additional US aid and moral support. Moreover, the pro-Savannakhct coup of 10 November in Luang Prabang greatly improved PhoumPs military and political positions. Nearly all the commanders in the Luang Prabang region have pledged their support to him. Several small units operating against the Pathet Lao in Sam Ncua arc being supplied by Phoumi and are probably responsive to his guidance. Phoumi is handicapped, however, by poor communications with these units. In Xieng Khouang, the militant Mco tribesmen are being'supplied with arms by Phoumi and are currently conducting effective anti-Pathet Lao operations.

14. The Revolutionary Committee probably has some political appeal in southern Laos. Boun Oum is a member of the Royal Family of Champassak which ruled southern Laos until Laos was united by the French following the Second World War. However, we believe that Boun Cum and Phoumi lack broad political appeal outside the south. Phoumi's loss of prestige among both political and military leaders in Laos as a result of the Kong Le .coup has been only partially made up by the Luang Prabang coup and General Ouan's defection. Moreover, Phoumi has in the past proved to be an undependable and, at times, careless military leader, highly ambitious and opinionated.

15. Phoumi's. motivations in the present situation are probably a combination of personal pride and anti-Communist convictions. He is frustrated by what he believes to be inadequate US support and an ambiguous US policy. However, he probably has never intended to come to terms with Souvanna, and probably has felt that the US would, in the final analysis, support him. He would like to retake Vientiane by force and almost certainly has plans for such an operation,

16. King Savang. The King appears to,have no personal courage. He has been extremely careful to stay within constitutional limits and he has never asserted; openly and clearly, his potential authority and influence. Although it is quite clear that he distrusts

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Souvanna and desires Souvanna's resignation, thus far he has been unwilling to take any overt.steps to this end. The Revolutionary Committee at Savannakhet received the King's private approval, and the 10 November coup in Luang Prabang probably had his blessing, although thus far "he has been careful to avoid associating himself with either. It is possible that the King has played a significant behind-the-scenes role in the anti-Souvanna plotting and maneuvering. It is unlikely, however, that he will openly take a strong personal stand,- or one which he believes would endanger the position of the monarchy*

17. Kong Le. There is some circumstantial evidence that Kong Le may have plotted his coup with Souvanna. However, Kong Le's August revolt apparently was conceived and executed on very short notice, and it may have been a decision made primarily by Kong Le himself. Ke probably was motivated largely by personal grievances arising from the way in which his 2nd Paratroop Battalion—the best combat unit in the Laotian armed forces—had been treated. However, the revolt has assumed proportions and opened up ramifications which Kong Le probably did not anticipate and which have been beyond his ability to cope with. He has now become so implicated with Souvanna and the Pathet Lao that he probably cannot turn back. Although there have been some indications that his control over his troops has been weakened, Kong'Le is still an important element in the situation and could still rally a considerable number of troops to his personal command. ■

18. The role of Kong Le v/ith respect to the activities of the Souvanna government is not clear. Until recently, it appeared that he exercised a veto power over those political and military decisions of the Souvanna government which he considered important to him. Now, however, it appears that his direct influence on the government is being usurped by the Pathet Lao, Although Kong Le has limited Souvanna's freedom of action, it is also clear that Souvanna has used Konpf Le.

19. Shortly after the coup, Kong Le critically compromised his position with respect to the Pathet Lao when he distributed' the arms stored in Vientiane to villagers, including many Pathet Lao, in the' surrounding area. Although he probably did this to build strength against a possible attack from Luang Prabang and Savannakhet, once the arms were distributed his favorable balance of military power in the Vientiane area vis-a-vis the Pathet Lao was lost. Whatever his own wishes may have been, Kong Le has become increasingly a captive of the Pathet Lao. If Souvanna were to lose out and an anti-Pathet Lao government take over, Kong Le would probably join the Pathet Lao.

20. The Pathet'Lao. The hand of the Pathet Lao has been strengthened greatly by events since the Kong Le coup. Any figures concerning the strength of their armed guerrillas are highly speculative. It is almost certain, that their number is higher than at any time in the past. We estimate their present strength to be between 4,000 and 8,000. They have obtained considerable arms and ammunition from Kong Le and as a result of capturing equipment during the rout of Pnoumi's-forces at Paksane and their defeat and disarming of the Sam Neua garrison. They probably have been reinforced by cadres recently trained in North .Vietnam, and they probably have concentrated increasing numbers of troops in the areas around Vientiane, Thakhct-Savannakhct, Phong Saly, and Luang Prabang. The Pathet Lao and Vientiane forces in the Vientiane area are deployed in such a manner as to either defend or attack the city, and the forces facing Phoumi along the Nam Ca Dinh line are of both Pathet Lao and Vientiane units. At present, anti-Pathet, Lao operations are going on only in Phong Saly and Xieng Khouang.

21. The Pathet Lao probably view the developing situation as a golden opportunity cither to force acceptance of their participation in the government and their foreign policy demands, or to seize control of Laos by armed action if they conclude that they can do so quickly and without risking outside int. rven-tioiV. We do not believe that the Pathet Lao—

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or Feiping and Hanoi—are likely to let this opportunity pass. The longer the present crisis* continues, the better the Pathet Lao will .be able to consolidate their political and military positions.

22. They would prefer to-gain their objectives through negotiations and political action because this would reduce- the chances of outside intervention. Events since the Kong Le coup have moved along lines favorable to such tactics. They have profited, greatly from disunity among the non-Communist political and .military leaders. Moreover, they hold Vientiane virtually a hostage and have been able to exert considerable* leverage on Souvanna and Kong Le, and Quinim, the most influential member of the government after Souvanna himself, has apparently become their tool.

23. Although Pathet Lao tactics have emphasized negotiations, psychological pressures, and political action, they have maintained a fairly high level of military pressure on the Laotian armed forces and have built up their guerrilla strength in key areas. This puts them in a favorable position to seize by force

* large parts of the country, including such key points as Luang Prabang, Savannakhet, the Phong Saly. If the Pathet Lao were to exert their full guerrilla warfare capabilities, the Laotian armed forces, in their present disorganized condition, probably could not prevent the loss of large parts of the countryside and a number of key towns.

IL POSSI3LE FUTURE DEVELOPMENTS

24. If present trends continue, the situation in Laos will remain one of confusion, drift, and- disintegration. Ultimately this would

probably result in the fragmentation of the country, with the Communists, supported by the Bloc, assuming control over most of the north and the Revolutionary Committee at-„ tempting to set up a separate state in the south. Without large amounts of outside assistance, a separate southern Laos probably would not survive for long.

25. We believe it more likely, however, that the pace of events will quicken over the next

few weeks and, barring a quick victory by the Phoumi forces,, that the situation cither will move toward some form of political settlement or will degenerate into widespread civil war. Although-a political settlement based on a compromise agreement between the Vientiane and Savannakhet groups may still be possible, we believe that odds are against it. Souvanna and Phoumi arc not likely to find mutually acceptable terms for cooperation at this late point in their conflict. Any negotiations held between them arc not likely to be conducted in good faith. Although it is conceivable that the King might be induced to exert more influence than he has in the past, we do not believe he can be induced to take personal charge of the situation. Moreover, we do not believe that Souvanna is likely to resign voluntarily. If an effort is made to upset his government by calling a special meeting of the National Assembly in Luang Prabang to pass a no-con fid en ce motion, Souvanna could maintain that the deputies and the King, as prisoners of rebel forces, were acting under duress. He could declare their act illegal and invalid, and maintain that he wis the legal head of the government. If, on the other hand, Souvanna were forced out by political pressures, the Pathet Lao would probably step up sharply their military activity. Consequently, it is probable that any political measures to oust Souvanna will be ineffectual unless enforced by military means.

26. Thus, we believe that Laos is heading toward civil war, with supporters of the Souvanna government—primarily the Pathet Lao and the followers of Kong Le—on one side and anti-Pathet Lao elements and supporters of the Savannakhet group on the other. The conflict could be triggered by a Phoumi attack on Vientiane or by a Souvanna or a Kong Le-Pathet Lao attack on Luang Prabang. Both sides have major problems of logistics, communications, and transport. The struggle would probably be one of widely-scattered, small-unit operations in which the staying power, the training, and the relatively shorter supply lines from North Vietnam would give the Pathet Lao guerrillas an advantage. Without extensive outside assistance, the Phoumi forces would probably soon collapse,

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leaving the country open to early domination by the Communists. '

27. If no political settlement is reached be ; tween Phoumi and Souvanna, the US may soon be faced with the following situations: (a) A Souvanna solution, which woulci gravely risk ultimate Communist 'supremacy. This would .involve serious adverse consequences for the US position in Southeast Asia, and over the longer run, would greathf facilitate Communist subversion, infiltration, and expansion to Southeast Asia, (b) A widespread civil war in which the Phoumi forces almost certainly could not prevail or even survive without extensive outside assistance. Such assistance to Phoumi in a civil war situation would probably prompt a Souvanna appeal to the UN and, would risk the introduction of North Vietnamese or even Chinese Communist "volunteers." While at least initially, extensive assistance to Phoumi in a civil \yar would not have the support of the Western members of SSATO or possibly of most Free World opinion, if successful it would strengthen the SEATO area against further Communist aggression.

28, Even if the various non-Communist factions surmount the immediate crisis by a political settlement, the fundamental politi-

cal and social problems of Laos will remain and, as a result of recent events, will probably be more acute than before, Pathet Lao armed strength will be greater and more Communist footholds established in villages throughout the country. Solutions to the fundamental problems/ if indeed there are solutions, can be worked out only over a long period of time. Meanwhile, the urgent threats of the Pathet Lao on one hand and the centrifugal force of non-Communist disunity on the other, will operate against the solution of long-term problems.

29. Consequently, we believe that any non-Communist government assuming power in the wake of the present crisis would, in time, face very heavy pressure to move toward a neutralist position and Pathet Lao integration into the political life of the country, or face the likelihood of the situation gravitating again toward civil war. It will be extremely difficult for the non-Communist leaders of Laos to resist this pressure and to contain the Pathet Lao unless they develop a much greater degree of unity, determination, and nationalism than they have in the past, take effective measures to win the loyalty of the peoples of Laos, and receive extensive outside assistance to this end.

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ITEM 3 (For Discussion)

THE SITUATION IS LAOS

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[*""• •. 2. For your convenience vo have placed at Tab Laos a : summary of the most significant developments in Laos during • tho past vaok# .lb shall bo prepared to Give you.orally any ^ * oignlCioant later developments*

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LAOS SITUATION

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1. Tho Bon Oum Government is in control in Vientiane but faces critical problems; „ •■ - •

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cu Militarily its forces are subject to Corriraunist-hupported . '' * "* guerrilla warfare throughout tho Kingdom and to tho throat •■ , of overt Intervention by tho DRVK (North VI ot Nam)*

]j. Politically tho government doos not control the entire

country and is considered by tho Department of State to bo

too narrowly baaed to be popular*

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__ Economically the government faces tho necessity for ■ m \l) emergency relief for civilioais, (2) payment of mili*-

tkry forces and civilian officials throughout the Kingdom . fol a three-months period (less the amounts paid Phoumi forces by CIS), and (3) reconstxtiction in Vientiane*

•• £• Internationally only the U.S. and the Thais are fully

supporting the government although there are indications ■ that the British* Philippines and others will give do facto recognition• Souvanna Phouma claims to be the legal Prime Minister and is supported by Communist Bloc countries*

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2. The United States is faced with tho problem of giving tho new

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^_/ ; government immediate and substantial aid in each of tho "abovc-listod problcjii areas*. Action is being taken in each field.

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3» * Immediate matters of concern to the U.S. include:

a* The necessity to bolster Phouihi forces against Communist-/■ - supplied Pathet Lao attacks, and to be ready for military . - • and political action in the event of overt intervention by DRVN forces. (CJJICPAC has cautioned Chief, FED, to assure that Phoumi does not become over-optimistic - a major effort .v * lies ahead). , ' ' . ' ■

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b* The desirability of forestalling efforts by Jleliru and others to reconstitute the ICG*

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c* Tho desirability of gaining wider acceptance for the Bon Oum government in the Fro© World* . . "

^* Funding of U*S. support activities* * / ]

e*. Assumption by the U.S. of primary adviser status with re-* * lation to tho provision of training end operational, advice to Lao forces. ••.

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INCOMING TELEGRAM

DEPARTMENT OF STATE

SECRET

FROM: SAIGON

Control: 13650 Rec'd: DECEMBER 24, i960

12:26 PM

TO:

Secretary of State

NO: 1216, DECEMBER 2k, 6 PM

SENT DEPARTMENT 1216, REPEATED INFORMATION CINCPAC POLAD 252.

LIMIT DISTRIBUTION

RE DEPTEL 898

DIEM DIDN'T RECEIVE ME UNTIL 23RD.

I WROTE OUT INSTRUCTIONS AND TRANSLATED THEM IN FRENCH AND LEFT ENGLISH AND FRENCH COPIES (TEXTS BY POUCH). MY REMARKS COVERED MOST POIHTS DEPT'S SUGGESTIONS ALTHOUGH IN VIEW CURRENT INDICATIONS LIBERALIZATION PROGRAMS MAY NOT BE TOO PROFOUND, ONLY HINTED DEFT WOULD BE PREPARED PUBLICIZE ANNOUNCEMENT SUCH PROGRAMS. SINCE MY OCTOBER l^TH REMARKS INCLUDED SUGGESTION TRANSFER NHU, I DID NOT SPECIFICALLY REFER TO THAT DATE ALTHOUGH REFERRED TO PREVIOUS SUGGESTIONS WE HAD MADE. SINCE GVN HAS ALREADY INSTITUTED PLAN TO INCREASE AND STABILIZE PADDY PRICES, I MERELY STATED WE PLEASED LEARN THIS AND THEN URGED GRANTING BROADER CREDIT FACILITIES PEASANTS BEFORE GOING INTO DETAILS, I REMINDED DIEM OF STEPS WE HAVE TAKEN TO STRENGTHEN GVN AGAINST VIET CONG SUCH AS DELIVERY OF AD-6 PLANES, STEPPED-UP DELIVERIES OF ELECTRONIC EQUIPMENT, AND TOLD HTM I INSTRUCTED GARDINER TO RE-EXAMINE WITH VICE PRESIDENT AND THUAN WAYS AND MEANS TO OVERCOME PLASTER SHORTAGE. SINCE I DID NOT RECEIVE DEPTEL 917 UNTIL AFTER TRANSLATION TYPED, I TOLD HIM ORALLY OF APPROVAL TO GIVE HIM ELEVEN H-34'S SOONEST. (HE MADE NO COMMENT.)

WHILE DIEM WAS PLEASANT DURING HOUR AND THREE QUARTERS OF

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DISCUSSION, HE WAS BASICALLY NEGATIVE. DIEM DID NOT REPLY TO MY" REMARKS■IMMEDIATELY BUT INSISTED ESSENTIAL HAVE ADDITIONAL 20,000 TROOPS SINCE WOULD DO NO GOOD TO TRY TO PUT IN REFORMS, BUILD FACTORIES, ROADS AND BRIDGES, ETC., UNLESS THESE THINGS AND PEOPLE COULD BE PROTECTED. HE REFERRED SEVERAL TIMES TO THE NEED FOR 20,000 MEN STRESSING NEED BECAUSE OF DETERIORATING LAO SITUATION. I THEN REMARKED WE HAD JUST LEARNED THAT HE HAD INCREASED FORCE LEVEL OF CIVIL GUARD TO 6U;000 AND ASKED IF THIS INCREASE WOULD NOT FILL SECURITY FORCE NEEDS. DIEM REPLIED CIVIL GUARD NOT TRAINED SO NEEDS BRING BACK 20,000 RESERVISTS.. HE ASKED THAT I URGE DEFT TO GIVE FAVORABLE CONSIDERATION FORCE LEVEL REQUEST AND I REITERATED MATTER UNDER CAREFUL STUDY IN WASHINGTON.

REFERRING TO MY REMARKS HE AGAIN ATTACKED THE VICIOUSNESS OF FOREIGN CORRESPONDENTS, PARTICULARLY THE FRENCH, WHO ONLY SEEK SENSATIONAL NEWS. HE THEN REVIEWED IN SOME DETAIL ECONOMIC AND SOCIAL PROGRESS MADE IN VIET-NAM IN THE PAST SIX YEARS WHICH HAVE RAISED STANDARD OF LIVING HERE ABOVE MOST SEA COUNTRIES AND ASKED WHY CORRESPONDENTS DIDN'T REPORT THIS INSTEAD OF PICKING UP RADIO HANOI REPORTS SPREAD BY DISGRUNTLED VIETNAMESE INTELLECTUALS. AS I HAD DONE IN MY REMARKS, I REITERATED IF HE AND OTHER MINISTERS HAD PERIODIC PRESS CONFERENCES AND IF MINISTERS WOULD HAVE FRANK TALKS WITH CORRESPONDENTS THEY WOULD WRITE MORE OBJECTIVE STORIES.

REFERRING OUR SUGGESTION ALLOW ASSEMBLY TO CARRY ON INVESTIGATIONS, DIEM POINTEDLY STATED THAT SINCE UNDER THE CONSTITUTION THE EXECUTIVE AND LEGISLATURE ARE COMPLETELY SEPARATE, AND IT WOULD NOT BE RIGHT FOR THE ASSEMBLY TO INVESTIGATE EXECUTIVE DEPARTMENTS. I REPLIED WE HAD THE SAME SYSTEM AND, AS HE KNEW, CONGRESS DOES INVESTIGATE EXECUTIVE DEPARTMENTS AND MAKES FINDINGS PUBLIC AND POINTED OUT THIS WOULD BE VERY HEALTHY DEVELOPMENT HERE IN ORDER TO QUELL UNFOUNDED RUMORS. DIEM OBVIOUSLY DIDN'T AGREE. DIEM SPENT SOME TIME DENOUNCING RICH INTELLECTUALS AND BUSINESSMEN WHO DO NOT PAY THEIR TAXES AND THEN BLAME THE GOVERNMENT FOR NOT DOING ENOUGH FOR THE

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-3- I2l6, DECEMBER 2k, 6 PM FROM SAIGON

PEOPLE. ALTHOUGH I HAD WOT MENTIONED CORVEE LABOR THIS TIME, DIEM STATED THIS ONLY WAY COLLECT EQUIVALENT OF TAXES FROM FEASANTS AND THAT THIS SYSTEM IS IN VIETNAMESE TRADITION, BUT FEASANTS IN COCHIN-CHINA UNDER FRENCH HAD NOT BEEN ASKED TO CONTRIBUTE LABOR. THEREFORE THEY NOW RESENT CORVEE LABOR AND OF COURSE WOULD NOT THINK OF PAYING ANY MONETARY TAXES. HE POINTED OUT FEASANTS IN CENTRAL VIET-NAM WILLINGLY CONTRIBUTE FREE LABOR INSTEAD OF TAXES. I REMARKED ONE REASON FOR DISCONTENT IN SOUTH IS ARBITRARY ACTION OF OFFICIALS AND THE FAILURE TO EXPLAIN NEEDS TO PEASANTS BEFORE FORCING THEM TO WORK. DIEM INSISTED PEASANTS HAD BEEN TOLD OF NEEDS BUT THEY JUST LAZY.

DIEM THEN STATED WHILE IT MIGHT BE NECESSARY TO FIND WAYS AND MEANS TO RAISE TAXES IN GENERAL, THIS HAD TO BE DONE VERY CAREFULLY IN ORDER TO AVOID A TOO-HIGH RISE IN PRICES WHICH WOULD CAUSE FURTHER DISGPJJNTLEMENT. HE ADDED DEVALUATION WOULD HAVE SAME EFFECT AND THEREFORE THIS COULD NOT BE DONE IN HURRY. IN THIS CONNECTION HE AGAIN STATED THAT LAO DEVALUATION BEEN A FAILURE AND WAS ONE OF THE CAUSES FOR THE CURRENT TROUBLES THERE. I REPEATED, AS I HAD SEVERAL TIMES, THAT WE CONSIDERED LAO DEVALUATION AS BENEFICIAL AND SUCCESSFUL.

TOWARD END OF CONVERSATION DIEM REVERTED AGAIN TO USELESS INTELLECTUALS WHO NOW SPREADING REPORTS OF ANOTHER COUP ON CHRISTMAS OR ON JANUARY 20th.

ON FEW OCCASIONS HE LET ME TALK, I URGED HE ADOPT REFORMS SOONEST SINCE IT ESSENTIAL TO WIN FURTHER SUPPORT OF THE PEOPLE IF VIET CONG MENACE IS TO BE OVERCOME, BUT HE GAVE ME NO INDICATION OF REFORMS HE MAY ADOPT. BEFORE LEAVING I AGAIN EXPRESSED HOPE THAT HE WOULD ACCEPT OUR SUGGESTION THAT HE ANNOUNCE ALL LIBERALIZING PROGRAMS AT ONE TIME IN ORDER TO MAKE BEST IMPACT. DIEM REPLIED HE WOULD THING ABOUT THIS BUT MADE NO COMMITMENT.

COMMENTS. WE HAVE HEARD THAT NHU, THUAN AND OTHERS HAVE BEEN RUNNING INTO RESISTANCE WHEN URGING DIEM TO ADOPT WORTHWHILE

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REFORMS. I ALSO RECEIVED INPRESSION HE VERY RELUCTANT TO , ADOPT REFORMS. AND IS STILL BASICALLY THINKING IN TERMS OF ' FORCE TO SAVE THE DAY, HENCE HIS INSISTENCE SEVERAL TIMES

' THAT WE APPROVE FORCE LEVEL INCREASE AND HIS ACTION RAISING CIVIL GUARD CEILING BY 10,000. WHILE I STILL BELIEVE IT ABSOLUTELY ESSENTIAL HE ADOPT MORE LIBERAL FROGRAMS, IT IS NOT CERTAIN FROM HIS ATTITUDE AND REMARKS THAT HE WILL TAKE EFFECTIVE ACTION IN THESE MATTERS, ALTHOUGH I LEARNED LATER HE HAS AGREED TO ENGAGE THE SERVICES OF -A PUBLIC RELATIONS EXPERT SUGGESTED BY CAS TO MAKE A SURVEY OF GVN FOREIGN PUBLIC RELATIONS NEEDS.

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FOREIGN SERVICE DISPATCH

FROM: Amembassy SAIGON

TO: THE DSPAR1VENT OF STATE, WASHINGTON

REF: Saigon's Telegrom 12lS, Dec- 2k, I960

SUBJECT: Memorandum Handed to President Diem on Liberalization

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Enclosed is the English text of the memorandum on liberalization which Ambassador Durbrow handed to President Diem on December 23, 19^0, as indicated in Saigon's Telegram 12l6. The French text of the memorandum is being forwarded under transmittal slip to Mr, Wood in SEA,

As indicated in Telegram 1216, the Ambassador supplemented the memorandum with the following oral remarks about the ' supplying of the H-3^ heli-. .copter to Viet-I-am: "I have just learned today that my Government has approved the request to give H»3lt helicopters to Viet-Nam, The total will be 11 units- I have been told that the first ones will be delivered shortly . and that we shall be furnished soon with the delivery dates for all of them," *

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President Diem's reaction to this approach on liberalization was described in Telegram 12l6.

For the Ambassador

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Page 1 Enclosure i Despatch 261+ From Saigon

Memorandum Handed to President Diem by Ambassador Durbrow on December 23, i960

I have reported to the Department of State your serious concern and that of other high-ranking Vietnamese officials about the critical articles about Viet-Nam "which have appeared in American as well as other foreign papers, I have also reported on the progress being made in working out new policies , and organizational and liberalization changes in the governmental and military structure which you and other officials have informed us you are planning to implement in the near future ♦

As you know, my Government has taken certain steps to assist you In strengthening the GVN against the Communist attacks being made against it. The new AD-6 planes whose delivery was speeded up I understand are proving effective and helpful, and you are aware of the large quantity of electronic communications equipment MAAG and USOM secured on an expedited basis. Lastly, I have instructed Mr. Gardiner to seek an appointment with the Vice President and Secretary of State Thuan to re-examine carefully the entire problem of your piastre shortage to see whether there may be some new technique or action to meet your critical need in this area. Your comparatively satisfactory foreign exchange and balance of payments position has of course created special problems which we hope we can jointly solve.

On the basis of these reports I have received instructions to discuss these matters with you, particularly certain liberalizing projects which would have a favorable effect on world public opinion. As you no doubt know, Mr. President, since the press conference held by Mr. Thuan on November 17 at which he stated that the Government had for some time been working out details for new organizational and liberalization schemes, many elements here in Viet-Nam and in the world press have questioned whether these projected schemes would be adequate and sufficiently profound to increase the public support for your Government and make it clear to world opinion that tl criticisms of your Government in the world press were unfounded. ,

In an effort to be as helpful as we can to assist you in your efforts to broaden the base of your Government, the Department of State has instr .cted me to discuss with you some of the suggestions which we have already made and

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Despatch: 26 h From Saigon

which the Department of State believes would have beneficial affects if adopted now in connection with the other measures you are planning. Apart from the organizational changes proposed in the governmental and military structure and those liberalizing schemes you have told me about -- such as elections of youths to village councils and other progressive matters of this nature — we believe it would be helpful if you could also adopt the measures outlined below. We, of course, recognize that security considerations impose certain limitations on liberalization, but we believe that the political situation requires certain calculated risks in order that the public and world opinion will become convinced of the sincerity of the steps you are takeing to evoke broad participation in your efforts to improve security and develop the economy and institutions of Viet-Nam. It is our belief that the liberalization schemes should be clear-out, effective, and of a broad nature so that the impact of their announcement will have the desired beneficial effect on the public here and abroad and will enhance the public support for your regime. With this thought in mind, it is suggested that:

1. In connection with the excellent ,new method of having Ministers defend their budgets before Assembly Committees, it would be advantageous from a political and press point of view either to publicize these hearings in full or at least to give fairly full minutes of these meetings to the press.

2. As has already been suggested, it would be politically worthwhile to authorize the Assembly to conduct investigations of any Department or Agency, of the Government. While public hearings would be politically more useful, closed hearings could be held providing the results of the investigations are made public in considerable detail. '

3- While it is realized that it is not a simple matter to work out an effective domestic press code, we believe it would be most beneficial to a better understanding of the fruitful efforts being made by your Government on behalf of the people and a better appreciation of the many problem? you and your colleagues have to face, if the Assembly could adopt in the near future a fairly liberal press code. If this cannot be accomplished i lortly, the press should be encouraged to set up machinery to police itself. Under such a system the Government should only intervene if articles are flagrantly dishonest, inaccurate, or favorable to the Communists. In case of a s reach of the press code it might be better to require the paper to publish si full retraction rather than confiscate the particular edition or suspend the newspaper.

h. I have already discussed with you our suggestions on ways and means to have more favorable foreign press coverage. In this connection, the Depart ment of State believes that it is almost as important for your Government to have favorable foreign press relations as it is to have diplomatic recognition from friendly countries. The Department suggests that you continue to have periodic press conferences such as those recently conducted by Mr. Thuan, that

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rage 3 Enclosure 1 Dispatch From Saigon

effective use be made of the weekly press conferences.of the Directorate General of Inforination 'by channelling items of substantive information through that agency for release *that foreign correspondents "be permitted to make trips in the country to learn for themselves the nature of the Viet Cong threat, and that Ministers of. the Government "be available to have open and frank talks with correspondents about the accomplishments and problems of the various Ministries. It is believed that this might be helpful in improving the tone of foreign press articles, -•■"•*-*•

5. We are pleased to learn that steps are being taken to increase and stabilize the price of paddy to the peasants. We also suggest that further efforts be ma.de to grant broader credit facilities to the peasants.

It is the belief of the Department of State that if measures such as those suggested above, in addition to the other liberalising steps * regarding elections of youth representatives to village councils, sending better administrators into the countryside, periodic "fireside chats", etc., are adopted in the near future, it would be worthwhile to withhold the announcement of individual measures, so that a meaningful official announcement could be made," preferably by you, of all of the liberalizing measures you are putting into in-mediate effect. If the individual measures were not disclosed in advance, such an across-the-board announcement of genuine liberalizing measures would, we believe, have a most beneficial effect on the people of Viet-Ham and on world opinion. It is certain that such an announcement would do a great deal to correct any erroneous impressions that have been given to world opinion in recent months and encourage the world press and government spokesmen to support you in yo;rr tireless efforts to eliicdnate the Viet Cong threat and continue the fine progress attained in Viet-Sam in su.ch a short period of time.

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lNTEF<NATfpttAL SECURITY AFFAIRS

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5UB-JTJCT: Defence EequireLicntd in Victuc-% Laos end ffhallaud

. . A review "of our files concerning vhat action, if cxiy, had been tolien \rith the Department of State concerning defence ro~ ^ulreiuentG for facilities in Vietna-n, Le.oo end 2hailr.n& revealed the jtoUouiityg -

1« Ito request for any facilities iu Laoo have beqn made to the Deportment of State *

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2* Ko request has been iaade to the Department of State for obtaining zxx agreement to vlzq facilities in Vietnam. Eovrever, there has been an exchange of correspondence (vhlch ba& been h:\ndlcd by the Far EtiGt Region) in vhich BefcnoQ Bepc%rtr A ont tried to .utilize ICA fundc ■ to develop tvo airfields in Vietnam With" a capability of hcuidlins Jet aircraft.

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3« Xn January of 195 6> the Defense Department twtoto to Stato asking for the negotiation of an r^rectnent vhich vould Give general overflight rights to U.5*,foreec and yould pettolf the utilization' by the Air Force of Ton £$kai& airfield at Bangkok. Anny eo^airaicaticns rind Air Force 4 Intelligence roquirementfl \rere aloo included* ITo formal reply vas received from the State Department, although i?q vara tidviced inforaeXly that the political situation, in 53i3il:.jid procludod our obtrdnin^ the necessary righta•

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SECRET

FOREIGN SERVICE DESPATCH

American Embassy Saigon 276

Desp No«

The Department of State, Washington January 4, 1961

Department Telegram 658, October 20, i960

Subject: Counter Insurgency Plan for South Viet-Ham

Reference is made to joint State DOD message, Department's 658 of October 20, i960, and Defense message DEF 98299^ of September l6, i960, both of which set forth the requirements for the development of an over-all United States plan for encouraging and supporting the Government of Viet-Mm in the present National emergency. Such a plan has been developed by the Country Team and is attached as an enclosure to this despatch for review by interested Washington agencies«

The plan was drafted by a Country Team staff committee composed of the following members: MAAG - Colo F. W. Boye, Jr., Major Kurtz J. Miller, Jr., and Captain Boyd Bashore; Embassy -Joseph A. Mendenhall (Chairman) and Andrew J 0 Fink; USOM - James W. Howe and William R. Trigg; USES - John Mo Anspacher; and DSA -William E. Colby and Clarence E e Barbier. Because of the importance of military factors in the development of the plan, MAAG assumed the major burden in its preparation, and is to be congratulated on the excellent job it has done. '

The plan,based on tasks and concepts outlined in the CINCPAC 1 and OASD/lSA plan for counter-insurgency operations, not only sets forth recommended action in the military field, but also establishes requirements for coordinated and supporting action in the political, economic and psychological fields. In developing the tasks to be ! undertaken the plan also presents recommendations and justif icati n concerning requirements for United States personnel, materiel, funds and organizational and operational concepts. The Country Team Plan consists of a summary and three Annexes, which discuss Task Organization, Concept of Operations and Logistics. Each Annex a] o has appropriate appendices which spell out in detail the tasks, the present situation with regard thereto and recommended action. The plan is complete except for appendices relating to a study of the non-military communications system and to economics and finance. These will be forwarded upon completion as supplements to the plan enclosed herewith*

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Despatch No. 276 From SAIGON

Certain recommendations have already been discussed with the Government of Viet-Nam (GVN). Some of these actions have already been agreed to by the GTO (e.g a , transfer of the Civil Guard to the GW Department of Defense and creation of a national Internal Security Council), and others are under study by the GVN (e.g., establishment of a military operational com-f mand for counter-insurgency operations, reorganization of military 1 regions, and implementation of a firm military chain of command).

In addition there are other actions which will shortly be taken up with the GVN such as establishment of internal security councils at every governmental level, implementation of proposals for the establishment of the National Intelligence Coordinating Agency (previously discussed several times with the GVN, but to be pushed again) and creation of a village level communications system,

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There are, however, certain actions which involve major expenditures and will not be discussed with the GVN prior to Washington approval. The most important of these latter actions is the proposed 20,000 man increase in the size of the RVNAF which was presented for Washington consideration in Embassy telegram 1151, December k* I maintain reservations concerning the proposal to increase the force level up to 20,000 additional RVNAF troops, purely to meet the threat in Viet-Nam and still believe more calculated risks should be taken by using more of the forces in being to meet the immediate and serious guerrilla terrorist threat, I recognize, however, that additional well-trained forces in being in this area are probably now justified from purely US interest point of view in order to meet growing bloc threat SEA represented by the Soviet airlift in Laos, (See ibassy Telegram 1231^ December 29.)*

*MAAG Comments :

The MAAG position on the need for a 20,000 force increase continues as reported in MAAG telegrams to CINCPAC (CHMAAG 1579 5 27 Dec 60 and CHMAAG 1620, 29 Dec 60) which were also forwarded to Washington.

a. The military requirement for this force increase to accomplish the current mission had been demonstrated in MAAG considered opinion as early as August i960. This force increase was badly needed before the beginning of the Soviet airlift in Laos. The recent Viet Minh overt aggression against Laos merely reinforces this requirement.

b. The four divisions in the North in I and II Corps areas are committed in anti-guerrilla and static guard duty to an extent which not only cuts down their capability to resist overt attack and thus magnifies the risk to a militarily unacceptable degree, but also prohibits required training to adequately

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Despatch No. 2?6 From SAIGON

counter either external or internal aggression.

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c» Additionally, the force increase will provide the long needed balance between combat and logistic support.

A number of recommendations in the plan, considered by the Country Team to be indispensable and in the GWs own best interests , will probably not be particularly palatable to the GVN. This situation pertains particularly to certain political actions and concepts of the military-civilian relationship e However, these questions are an integral part of the overall plan and are essential to its successful accomplishment. Consideration should, therefore, be given to what actions we are prepared to take to encourage, or if necessary to force, acceptance of all essential elements of the plan. (See Embassy messages cited on page lU of Enclosure.)

Elbridge Durbrow

1 ENCLOSURE: Counterinsurgency Plan for South Viet-Nam

COPIES PC rCHED TO : CINCPAC POLAD (2 copies),

DEPARTMENT please pouch 8 additional copies to CINCPAC POLAD

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THE PRESIDENT

September 29, 1967

FROM: CLARK CLIFFORD

Memorandum of Conference on Tanne r y 19, 1951 betwe en President Eisenhower a nd President-elect Kennedy

on the Subject of Laos

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*The meeting was held in the Cabinet Room with the following men present: President Eisenhower, Secretary of State Christian Herter, \ Secretary of Defense Thomas Gates, Secretary of Treasury Robert Andersorf, -

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and General Wilton B. Persons* ■ * .

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With President-elect Kennedy were the new Secretary of State

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Dean Rusk, tne new Secretary of Defense Robert McNamara, the new

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* Secretary of Treasury Douglas Dillon, and Clark M. Clifford.

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An agenda for the meeting had been prepared by Persons anci

Clifford. The subjects on the agenda had been recommended by the

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parties present at the conference and were arranged under the headings of

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"State", "Defense", and "Treasury.". The first subject under the headier-of "State 1 * was Laos. ■ -

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_. ,..— -- ■- " President Eisenhower ooened the discussion on Laos by stafcir

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that the United Stages was determined to oreserve the indeoenden.ee o:

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* .Laos. It was his ooinion that if Laos should rail to il\e Communists, then

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it would be "just a cuesUon of time until South Vietnam, Cambodia,

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Thailand and Burma would collaoss. He felt that ih

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designs on all of Southeast Asia, end that it would be. a tragedy to pen-pit j

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Laos to fall.

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,President Eisenhower gave a brief review of the various moves -.. . • - •

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and coups that had taken place in Laos involving the Pathet Lao,

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Souvanna Phouma, Boun Oum, and Kong te. He said that the evidence , t

was clear that Communist China and North Vietnam were determined to I . I J

• I destroy the independence of Laos. He also added that the Russians

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were sending in' substantial supplies in support of the Pathet Lao in an

effort to overturn the government.

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President Eisenhower said it would be fatal for us to permit

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Communists to insert themselves in the Laotian government. He recalled

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i that our experience had clearly demonstrated that under such circum-;

stances the Communists always ended up in control. He cited China

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as anillustratlon, • ■ *

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\ At this point, Secretary of State rlerter intervened to state that

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if the present government of Laos were to apply to SEATO for aid under

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the Pact, Herter was of the positive opinion that the signatories to the

SEATO Pact were bound. President Eisenhower agreed with this and in his statement gave the impression that the request for aid had already

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come from the government of Laos, He corroborated the binding nature

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oi tae obligation of the United States under the SEATO Pact.

President Eisenhower stated that the British and the French did

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not want SEATO to intervene in Laos, and he indicated that they

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j would .probably continue to maintain that attitude. President Eisenhower said that if it were not appropriate for SEATO to intervene j

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x in Laos, that his next ©reference would be the International Control

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\ Commission, He was sure, however, that the Soviet Union did not

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want, the ICC to go into Laos. President Eisenhower stated that if-

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this country had a choice as to whether the task should be assumed by

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SEATO or the ICC, that he personally v/ould prefer SEATO.

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Secretary Herter stated that we possibly could work out some*

agreement with the British, if they could be persuaded to recognize

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the present government in Laos, The chances of accomplishing this, however, appeared to be remote.

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\ Secretary Herter stated, with President Eisenhower's approval,

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Laos, He added, however, that if such efforts were fruitless,-then

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the United States must intervene in concert with our allies. If we were

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unable to persuade our allies, then we must go it alone*

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this point, President Eisenhower said with considerable

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emotion that Laos was the key to the entire area of Southeast Asia. Ke

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said that if we permitted Laos to fall, then we would have to write off

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all the area. Ke stated that we must not permit a Communist take-over.

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He reiterated that we should make every effort to oersuade member j nations of SEATO or the ICC to accept the burden with us to defend the

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.freedom of Laos. -. •

As he concluded these remarks, President Eisenhower

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■ stated it was imperative that Laos be defended. He said-that the

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United States should accept this task with our allies, if we could ' persuade them, and alone if v/e could not. He added that "our unilateral intervention would he our last desperate hope" in the

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event we were unable to prevail upon the other signatories to join us.

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At one time it was hoped that perhaps some type of arrange-

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merit could be made with Kong Le. This had proved fruitless, however, [

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and President Eisenhower said "he was a lost soul end wholly

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irretrievable,"

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Commenting upon President Eisenhower's statement that we' \

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would'have to go to the support of Laos alone if we could not persuade

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others to proceed with us, President-elect Kennedy asked the question r

as to how long it would take to put an American division into Laos.

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Secretary Gates replied that it would take from twelve to seventeen |l

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days but that some of that time could be saved if American forces,

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then in the Pacific, could be utilized. Secretary Gates added that the

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American forces were in excellent shape and that modernization of the

Array was making good progress.

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President-elect Kennedy commented upon the seriousness of

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seemed to be approaching a climax. General Eisenhower stated j 1

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that the entire proceeding v;as extremely confused but that it was

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1 # clear that this country was obligated to support the existing govern-ment in Laos.

„ - . The discussion of Laos led to sorne^concluding general

statemerks regarding Southeast Asia. It was agreed that Thailand-

"was a valuable ally of the United States, and that one of the dangers

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of a Communist take-over in Laos would be to expose Thailand s borders.

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i \ In this regard, it was suggested that the military training under French..

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Supervision in Tnailand was very poor and that it would be a good idea

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to get American military instructors there as soon as possible so the

level of military capability could be raised.

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President Eisenhower said there was some indication that

Russia was concerned over Communist pressures in Laos and in

Southeast Asia emanating from China and North Vietnam. It was felt

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that this attitude could oossibiy lead to some difficulty between

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Russia and China.

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\ This phase of the discussion was concluded by President

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Eisenhower in commenting philosophically upon the fact that the

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morale existing in the democratic forces in Laos aooeared to be dis-

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appointing. He wondered aloud why, in interventions of this kind,

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we always seem to find that the morale of the Communist forces was * - ■ i * •

better than that of the democratic forces. His explanation was that

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the Communist philosophy appeared to produce a sens6 of dedication » *

on the part of its adherents, while there was not the same sens^ of

■ dedication on the part of those supporting the /ree forces. He stated

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that the entire problem of morale was a serious one errtfl would have to

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be'taken into consideration as we became more deeply involved.

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