47. Paper Prepared by the Operations Coordinating Board1


I. Introduction

A. Special Operating Guidance

[Here follow sections 1–4 which are identical or similar to sections 1–4 of the June 4, 1958, plan.]

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5. President Diem’s Internal Political Position. Since it is in the U.S. interest that President Diem remain in power, we hope that he will rally as wide a basis of popular support as possible throughout the country and among all key groups in the population. The firm measures of political control exercised by his government and by the political party operated by his brothers, while to a large degree necessitated by continued communist pressure, tend to alienate the sympathy and support of certain important groups. U.S. action is restricted by the sensitivity of this subject, but the U.S. Ambassador may be able to make discreet suggestions from time to time for some liberalization of Diem’s political control.2

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6. Relations with Other Southeast Asia Countries. Although Viet-Nam, Laos and Cambodia have taken substantially different paths since the conclusion of the three separate Geneva armistice agreements in 1954, it is to American advantage to maximize the inter-relationships between these three countries, and U.S. operating agencies should take into account the effects on Laos and Cambodia of the course of action they pursue in Viet-Nam. While relations between Viet-Nam and Laos have not been marred by any special difficulties, Cambodian-Vietnamese relations continue to be strained and recently have been further embittered on a number of specific issues. Recognizing the importance of cohesion among the nations friendly to the free world in Southeast Asia, the U.S. should continue to encourage the development of a favorable political situation in which Viet-Nam and its neighbors would seek the good offices of appropriate third parties to help resolve disputes.

7. U.S. Aid Programs

Joint Viet-Nam-U.S. Effort. The implementation of U.S. aid programs should depend on the amount of cooperation displayed by the Government of Viet-Nam. Maximum efforts should be made to cooperate with the Vietnamese in all operations to avoid the appearance of U.S. unilateral action. Aid programs and programs of technical advice should be joint enterprises, rather than American conceived and American executed projects. U.S. operations should sustain the strong pro-U.S. orientation of the Vietnamese Government and should help solidify its position of leadership with the Vietnamese people. U.S. operations should take into account the need for progress in the economic rehabilitation and development of Viet-Nam, in part in order that the Diem Government might demonstrate both to its own subjects and to those north of the 17th Parallel that close identification with the free world is advantageous in terms of security, material progress and social advancement.
The Need for Sound Economic Development. Care should be taken in developing U.S. operations that sufficient resources are provided for an adequate and effective military establishment while leaving sufficient margin for sound economic development. U.S. aid should be managed so as to prevent inflationary pressures which might frustrate the achievement of U.S. objectives and nullify many of the benefits otherwise provided by aid programs. U.S. aid should be implemented with enough speed and flexibility to produce tangible benefits which can be seen and appreciated by the Vietnamese people and government.
The Need for Prompt Aid. In order to insure Vietnamese support for U.S. objectives, U.S. aid operations should be continued so as to meet Vietnamese needs on a timely basis. Continuing attention should be given to achievement of maximum performance and production of tangible results with minimal delays.
The Need to Husband Resources. Because of the need for both the U.S. and Viet-Nam to husband their resources, and because of a demand within Viet-Nam for greater economic development, the [Page 120] impact on the Viet-Nam Government’s budgetary situation should be taken into account in the development of U.S. aid programs.

8. Armistice Situation. Operating agencies should take into account for the time being the existence of the Armistice Agreement and the supervisory role of the International Commission to which the Vietnamese Government has pledged cooperation. While the Commission offers certain obstacles to some U.S. operations, it serves to discourage communist efforts to alter the status quo.

9. U.S. Private Investment. The Government of Viet-Nam is highly nationalistic and anxious to secure full economic as well as political independence. It has repeatedly announced its support for free enterprise principles and has occasionally stated that it specifically favors private capital investment, but it has failed to translate these words into consistent actions. Instead, its actions have often tended to discourage private investment. U.S. agencies should strive to maximize U.S. private participation in the economy of Viet-Nam whenever consistent with U.S. policy goals, and should accordingly provide maximum possible assistance to U.S. private investors and businessmen interested in Viet-Nam, both in the U.S. and in the field.

In striving to maximize the role of private investment, U.S. agencies should make positive efforts to identify potential industrial projects in early stages of consideration and when feasible attempt to guide local thinking about such projects toward implementation by private enterprise. Efforts should be made to (a) publicize such investment opportunities and (b) when appropriate encourage and assist private enterprise, through U.S. Government channels, to undertake investment in such projects. Partial U.S. government financing should be utilized where necessary and desirable, in support of such private participation.

As a matter of general policy U.S. agencies should not expend assistance for the development or expansion of industrial facilities which are or will be stated-owned or controlled. Exception to this policy may be made in cases where the facility is of high economic significance and where private investment or participation proves not to be available. Where private investment is potentially available, but as a matter of policy the Vietnamese Government wishes to have the facility in the public sector, the U.S. should not participate; providing however, that occassional exceptions to this policy may be made in certain instances when, because of peculiarities in the Vietnamese situation, political factors are deemed to be overriding. Even in such cases private construction and management on a contractual basis should be sought, and every effort should be made to encourage the government to divest itself of its holdings as rapidly as possible.

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10. Overseas Internal Security Program Guidance. Insecurity in the west and southwest near the Cambodian frontier continues to be the most serious problem. In these areas there has been a discernible increase in armed dissident activities reflected in a higher frequency of murders, assassinations of local officials, highway robbery, banditry and river piracy. It is also evident that attacks on rubber plantations and reported plans for interfering with the agrarian reform, land re-settlement and agricultural credit programs of the Vietnamese Government are aimed at disrupting progress in Viet-Nam’s economic and social development.

The tenuous state of Cambodia–Viet-Nam relations renders solution of this problem difficult. High Vietnamese officials, including the President, are concerned by what they judge to be a deteriorating situation in Cambodia and by the use of that country as a base for communist conspiracy against Viet-Nam. They maintain that dissident bands not only enjoy a “privileged sanctuary” in Cambodia but receive some degree of assistance in money and propaganda facilities from the Eastern European Diplomatic missions and the Chinese Communist economic mission in Phnom Penh. The establishment of Chinese Communist diplomatic representation in Phnom Penh is likely to accentuate subversive activities in Viet-Nam.

It is assumed that undetected groups of experienced clandestine political agitators and espionage agents continue to function among the urban population, including the appropriately 700,000 overseas Chinese, especially Chinese youth. Extensive communist efforts are in progress to subvert minority groups primarily in isolated areas bordering the Western frontier through which run trails used for clandestine infiltration of south Viet-Nam. The Vietnamese communists continue to have a capability for the penetration of government offices and for harassment or propaganda in the villages. The civil administration and local civilian security forces need greater professional competence effectively to counter these communist efforts. The Vietnamese Government disposes of military, para-military and civilian security and police forces as follows (strengths as of this date are indicated): Army, Navy and Air Force: 146,871 (total JCS approved strength is 150,000); Sûreté–VBI: 6,500; Municipal Police: 8,500; Civil Guard: 48,000 and Self-Defense Corps: 47,000.

In connection with this situation, the concerned agencies are discussing the question of whether there should be an improved civil guard, or whether other existing Vietnamese security forces, including the Army, can adequately deal with the situation.

[Here follow sections 11–29 which were identical or substantively similar to sections 10–28 of the June 4, 1958, plan. In two of these sections, the “Viet Minh” phrase of the earlier paper has been replaced by “Viet Cong.”]

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30. Assist where possible in fostering better relations between Cambodia and Viet-Nam.

Assigned to: State

Support: ICA, Defense

B. Economic

31. Continue to exert influence to persuade the Vietnamese Government to allow maximum private participation by Vietnamese and foreign investors in the organization and management of new industrial enterprises. Attempt to secure provisions in any new investment legislation or regulations attractive to private investors and to obtain fair and liberal administration thereof. As appropriate continue also to seek improvement of the investment and over-all business climate through the curtailment of extensive economic controls. Also encourage the Government of Viet-Nam to bring in private management on a contractual basis in the case of state-owned industries for which private participation in ownership cannot be arranged.

Assigned to: ICA, State, Commerce

[Here follow sections 32–38 which are identical or substantively similar to sections 30–36 of the June 4, 1958, plan.]

39.3 Continue economic and technical assistance programs, with emphasis on:

Capital Projects directed (a) at increasing agricultural and industrial production and (b) improvement of transportation, distribution, and power facilities. Activities under this section include large-scale highway rehabilitation and improvement, restoration and improvement of internal waterways, improvement of airport and port facilities, improvement of municipal water supply systems, construction and expansion of power generating and distribution facilities, and the rendering of assistance for expansion or construction of new industrial facilities under existing policy guidelines.
Improvement of rural life. Activities supporting rural development and improvement should be a basic component of U.S. aid. Appropriate assistance should be provided for land reform, tenure, and development programs, including the resettlement in fertile and strategic areas of displaced persons and farmers now living on marginal lands. Activities in this field may also include the creation and extension of rural credit facilities on reasonable terms, diversification of crops, expansion of livestock and fisheries production, and restoration and expansion of irrigation systems. Additionally, assist Viet-Nam to increase the volume and efficiency of its rice production for export. Educational and health services should be focused increasingly on practical improvement of village life and the Government of Viet-Nam should be encouraged to strengthen the economic and [Page 123] social basis of sound community organization in order to develop grass roots support for the Government.
Encourage the Government of Viet-Nam in taking measures to improve its budgetary and fiscal administration and increase tax revenues so that its budget may assume a progressively greater share of governmental and developmental costs.
Continue to emphasize the education and training of Vietnamese technicians and administrators in essential fields of activity, and seek to increase the rate of training through improved training facilities within Viet-Nam as well as sending Vietnamese to the U.S. and other countries.

Assigned to: ICA, State

Support: Agriculture, Commerce

[Here follow sections 40–41 which are identical to sections 40–41 of the June 4, 1958, plan, as well as sections 42–55 which are numbered differently and have minor substantive differences from sections 42–57 of the earlier plan.]

56. Encourage U.S. training and orientation visits for potential Vietnamese government and business leaders. Continue the granting of graduate level scholarships, with extensions to permit attainment of advanced degrees in selected cases. Permit U.S. financing of full undergraduate scholarships at U.S. universities for selected outstanding graduates of Vietnamese secondary schools. Encourage fullest assimilation into Vietnamese life (military, economic, social, political and cultural) of returned exchangees, participants and trainees. Maintain and strengthen contact with these beneficiaries of U.S. exchange and training programs. Provide them with continuing access to American sources of technical, professional and cultural information, and help them exercise a pro-Free World influence among fellow Vietnamese.

Aligned to: Defense, ICA, USIA, State

57. Increase training of Vietnamese technical, professional and administrative personnel in Viet-Nam, U.S. and third country schools.

Assigned to: ICA, USIA, State, Defense

58. Encourage contact between private organizations, foundations and individuals in Viet-Nam and the U.S. having common interests.

Assigned to: State, USIA

59. Continue to influence the Government of Viet-Nam to clarify areas of responsibility within its civilian internal security organization, so as to eliminate jurisdictional overlaps.

Assigned to: ICA

Support: State, Defense

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60. Influence the Government of Viet-Nam to clarify and coordinate areas of responsibility for internal security between its armed forces and its civilian organizations.

Assigned to: State

Support: ICA, Defense

61. Continue training the Vietnamese armed forces for their internal security role, including counter-intelligence within the armed forces, support of police actions, pacification and anti-guerrilla operations, et cetera.

Assigned to: Defense

[Here follow sections 62–65 which are identical or substantively similar to sections 63–66 of the June 4, 1958, plan, a financial annex, and a paper entitled “Pipeline Analysis, Mutual Security Program.”]

  1. Source: Department of State, OCB Files: Lot 62 D 430, Vietnam. Secret. The OCB Working Group on Southeast Asia prepared this plan, much of which was identical or substantively similar to the plan of June 4, 1958, Document 17, which it superseded. Therefore only those numbered sections which contain important differences are printed here.

    The plan was discussed at OCB meetings of December 31, 1958, and January 7, 1959, and approved for implementation by responsible agencies at the latter meeting. Also discussed at these OCB meetings was an OCB Progress Report on NSC 5809, “U.S. Policy On Mainland Southeast Asia,” also approved January 7. (Ibid., S/PNSC Files: Lot 62 D 1, NSC 5809 Series) The OCB Progress Report of January 7 is printed in Department of Defense, United States-Vietnam Relations, 1945–1967, Book 10, pp. 1156–1189. These two papers served as a basis for a general discussion on Vietnam which, according to notes by O’Connor dated December 31, went as follows:

    “The Board then turned to the problem of internal security in Viet-Nam and the Civil Guard program to meet it proposed by the Ambassador and the U.S. agencies in Saigon. Mr. Irwin (Defense) reviewed the background. He said Defense was in favor of utilizing funds presently available for strengthening the Civil Guard. Mr. Herter thought we should move ahead rapidly and get a decision. Mr. Saccio (ICA) said he was sure a decision would be taken soon on the Civil Guard program by Mr. Dillon and Mr. Smith. Defense would be represented and the current OCB examination of the Overseas Internal Security Program would be borne in mind. Mr. Gray said he hoped the ‘constant review’ of the force level in Viet-Nam would be a serious study of the total security requirements. A Defense specialist said the increase in the force level in North Viet-Nam would be the most important factor in the review of weaponry, force levels, training and U.S. capabilities. Mr. Saccio reminded the Board that there were strong views within the Government that the U.S. should emphasize economic and not military assistance to countries such as Viet-Nam.” (Department of State, OCB Files: Lot 62 D 430, Preliminary Notes III) Leonard J. Saccio was Deputy Director of ICA.

    The discussion was next continued at the OCB meeting of January 7:

    “The draft Minute of the last meeting noted that the Department of Defense is studying the Vietnamese armed forces to evaluate their ability to resist external aggression and that the study will also consider other factors relative to the level of forces. Mr. Gray of the White House said his impression was that the study would specifically cover the use and need of the Civil Guard, particularly as to whether it could be used to effect a reduction of military forces.

    “The Defense representative said that the study which has been under way for some time covers Southeast Asia generally and is targeted on abilities of the nations to counter overt external attacks. Mr. Saccio, ICA, said that Under Secretary Dillon and Mr. Smith (ICA) would discuss the Civil Guard on the coming Friday [January 9] and would also consider the CIA views on the significance of the Civil Guard in Viet-Nam. He also said that while ICA is agreeable to a program for the Civil Guard in 1959, a thorough examination should be given to the full program which will extend beyond 1959. Governor Herter reminded Mr. Saccio of the immediate availability of more than $3 million for the Civil Guard.” (Ibid., OCB Files: Lot 62 D 430, Preliminary Notes IV)

  2. Section 5 was a new addition without a corresponding section in the old paper. Therefore the numbering of the sections is not thereafter identical.
  3. Section 39 of the January 7 paper combined courses of action in sections 37–39 of the June 4, 1958, plan.