288. Memorandum From the Director of the Office of Philippine and Southeast Asian Affairs (Young) to the Assistant Secretary of State for Far Eastern Affairs (Robertson)1


  • Report of Defense–State–ICA Special Mission to Free Viet-Nam (November–December 1955)

You will recall that a Special Survey Mission was sent to Saigon in November 1955 to collect and evaluate information on which to base decisions regarding the amount of funds to be allocated in support of the Vietnamese forces in FY 1956 and to seek from Congress for FY 1957. The Mission was headed by Major General Lawton, Chief of the Budget, Department of the Army.

The Mission has now presented its report.2 A summary of this report is attached which you may wish to distribute to other officials [Page 617] in the Department. I believe it would also be useful if you could talk with General Lawton, for he feels very strongly about the conditions he found in Viet-Nam.


That the attached summary be sent to the Under Secretary, to Mr. Hill, Special Assistant to the Under Secretary for Mutual Security Affairs, and to Mr. Prochnow, Deputy Under Secretary for Economic Affairs.3



The cost of maintaining the Vietnamese forces in 1955 was substantially less than anticipated. In early 1955 it had been anticipated that the cost would be $315 million of which the U.S. would contribute $235 million. Present estimates are that when the accounting period is completed costs will total $223 million of which $143 million will be contributed by the U.S. It is anticipated that the balance of funds allocated for support in 1955 will be carried over to help meet costs in 1956.

MAAG Saigon estimated that costs in 1956 would be $218 million, which the Survey Team recommends be reduced to $184 million. Principal recommended reductions are in construction and matériel. Both MAAG Saigon and the Survey Team recommended inclusion in the military budget for military support of $6 million for the village militia in which President Diem is very interested. The estimated Vietnamese contribution would be $20 million, leaving costs of $170 million to be covered by the U.S.

MAAG Saigon estimates that total costs in 1957 would be $220 million which the Survey Team recommends be reduced to $185 million. Again, principal reductions are in construction and materiel and both recommend $6 million for the village militia. The Vietnamese contribution is again estimated at $20 million leaving $171 million to be covered by the U.S.

Up to the present time MAAG Saigon has placed principal emphasis on training and remarkable progress has been made in the last eighteen months. However, due to lack of progress in logistics and administration, the Mission doubts that the Vietnamese Army could [Page 618] conduct sustained combat because of its inability to supply and distribute. The Mission considers it impossible to give proper attention to the problem of logistics and administrative training within the existing MAAG personnel ceiling of 342.

With regard to MDAP supplies shipped in, the French followed the practice of opening all packing cases upon receipt thereby often losing the means of identifying the items received. As a consequence, there are large quantities of supplies and equipment now in Viet-Nam which cannot be identified and the process of identification, sorting, and warehousing these items will be almost endless given the present French personnel. The situation might be even worse if the items were dumped on the Vietnamese, in view of their lack of training, or dumped on the U.S., in view of an even more acute shortage of personnel. A correction of this condition would result in considerable savings to the U.S., since some equipment is now exposed to the elements and is deteriorating, and due to lack of information the U.S. is probably shipping in, or will be called upon to ship in, supplies which already exist in Viet-Nam.

The French have been selling supplies and matériel to the Vietnamese and will shortly begin negotiations to sell fixed installations in South Viet-Nam to the Vietnamese. Presumably these supplies and matériel are of French origin but some cases have already been found where these items were of U.S. origin and given to the French by the U.S. Also, the U.S., through the aid program to the French budget, may have contributed to the construction of the fixed installations. Since we are now supporting the Vietnamese budget the U.S. may be paying for some items a second time.

The Mission believes that the MAAG controller needs additional staff in order to control expenditures of U.S. funds and train the Vietnamese in budget, fiscal, and auditing procedures.

  1. Source: Department of State, Central Files, 751G.5–MSP/1–1856. Secret. Memorandum and attachment drafted by Price.
  2. Not found.
  3. A marginal note indicates that this recommendation was carried out on January 23.