Foreign Relations of the United States, 1958–1960, Vietnam, Volume I

90. Telegram From the Ambassador in Vietnam (Durbrow) to the Department of State¹

Saigon, September 16, 1959—6 p.m.

874. Department Circular telegram 236² and Department telegram 470.³

I. In view of Communist aggression in Laos, country team and I are of firm opinion refined tentative FY 60 MAP program given Department telegram 470 does not support fully US political, economic and security objectives Viet-Nam. If parts Laos, particularly those adjacent Viet-Nam territory, should fall under Communist control, Viet-Nam would be greatly exposed along western frontier. It is politically important therefore Viet-Nam’s armed forces be assured as complete equipment as possible under Geneva accord limitations.

Country team has gone thoroughly into MAAG requests for additional material amounting to $14,362,400, which MAAG feels essential for force maintenance and some vital force improvement. In going over tentative FY 60 program proposed Department telegram 470, MAAG has recommended a decrease of certain items amounting to $1,032,600, which savings would offset part of requested increase. Details re this decrease and requested increases are contained in next following telegram based on data furnished me by MAAG.⁴ Same information already furnished CINCPAC but action taken unknown here.

I am obviously not qualified to give firm recommendations from military point of view on any of the increases requested by MAAG. However, from political point of view, given low ammunition supply reserves and stepped up Communist activities this area, MAAG request to bring all ammunition supply up to sixty-day agreed reserve is justified. Furthermore since 34 55MM howitzers scheduled arrive next few months it seems essential have prime movers for these guns. In view of monetary restrictions it may not be possible furnish large number trailers requested. It seems important to me, however in view of Communist threat that ARVN should increase its mobility as much as possible. Therefore seems advisable, since ARVN has very few trailers, furnish as many as possible. Certain other force maintenance items such as cleaning and preserving material for air force are well justified maintain equipment already here. Other items, such as crane shovels, scrapers, airport improvement (which can be done by GVN public works) and many other items, do not appear to me to be of over-riding political importance to US interests. Again I emphasize I do not have knowledge give military judgment on matter on this nature but firmly believe, given Communist threat and fine progress made by VN military forces, every effort should be made to make them as combat capable as possible.

II. Re paragraph 2(c) Department telegram 236,⁵ no reallocation MSP resources from military to non-military proposed. Latter determined basis import needs. Anticipate these adequately financed by DS program. Moreover, as indicated above military program already inadequate.

III. Re paragraph 2(d) Department telegram 236,⁶ serious problem has arisen. GVN has included in 1960 military budget expenditure for purchase on local market with piasters of certain important commodities costing approximately 5 million dollars. Most of these commodities imported under CIP. These are mostly items, such as civilian hardware, tools, construction materials, office and school supplies, textiles, pharmaceuticals, vehicle parts, training materials, and sports goods, which may be used for both civilian and military purposes.

USOM questions inclusion such expenditure in GVN military budget because:

A. It results in diverting 5 million dollars of imports intended civilian economy to military use, thereby supplementing Chapter 1 MSP Act at expense of Chapter 2.

B. Unit cost of imported commodities higher because of inclusion customs duties, taxes and profits in local market price than would be if same items bought through MAP since MAP purchases not subject these additional costs.

C. In effect, it authorizes the purchase from counterpart funds of commodities imported with DS dollar funds.

USOM proposing GVN use part of its own contribution to military budget rather than DS-generated piasters to buy such imported items. This would eliminate objection arising from use counterpart by DS dollars. Other two objections could be eliminated only if purchase shifted to MAP.

MAAG however opposes shift to MAP for following reasons:

A. Present practice has been followed for several years, and not feasible this late date include such commodities in FY 1960 MAP as it would increase MAP funding requirements and because of longer lead time for procurement under MAP.

B. Department of Defense guidance in past has urged MAAG’s make maximum use local resources. (USOM rebuttal: In VN, however, most locally available materials are imported.)

C. Although continuous effort is made to shift to MAL all supplies which are cheaper under MAP, limited volume local procurement absolutely necessary provide emergency and minor supplies needed on short notice.

D. Substantial quantities locally purchased materials are used by ARVN to support non-US made equipment still in use. Essential have local financial resources continue such purchases because its impracticability procuring them through MAP.

Despite reasons given by MAAG, the cheapest way and the way to save us money is to shift this procurement to MAP.

Washington guidance requested this problem.

IV. Embassy reserves position from Geneva accords standpoint with respect additional one-quarter ton and one-ton cargo trailers, rockets and AP and AT mines proposed by MAAG for addition to FY 1960 program. Study now in progress to determine whether these items in excess credits which have been, or may be entered, in ICC’s war material register.

Durbrow

1. Source: Department of State, Central Files, 751G.5–MSP/9–1659. Secret. Repeated for information to CINCPAC PolAd.
2. In this circular telegram, September 8, the Department outlined in general terms the problems posed by the prospect of rigid limitations on funds available for the military assistance program, indicating that the Congressional authorization of $1.4 billion for FY 1960 would probably not be fully appropriated. It urged all posts to analyze needs and requirements very realistically with a view to making maximum use of available resources. (Ibid., 700.5–MSP/9–959)

3. In telegram 470, September 9, the Department transmitted to the Embassy for comment the Department of Defense tentative refined FY 1960 Military Assistance Program for Vietnam. The program was as follows:

   Major Categories	Value in Thousands of Dollars
   Aircraft, components, spares and related equipment	3,696
   Ships and harbor craft, components and spares	1,246
   Tanks, other vehicles, weapons, components and spares	448
   Ammunition	3,904
   Electronic and communications equipment, Components and spares	1,674
   Construction	539
   Other matériel	13,701
   Repair and rehabilitation	1,379
   Training	5,702
   Total	32,289

   (Ibid., 751G.5–MSP/9–959)

4. Telegram 875 from Saigon, September 16, not printed. (Ibid., 751G.5–MSP/91659)

5. Paragraph 2(c) of circular telegram 236 reads:

   “Reallocation MSP resources from military to non-military sector can be proposed if, in your view, US interests better served thereby.”

6. Paragraph 2 (d) of circular telegram 236 reads:

   “Comments should explicitly identify any problems or issues in relationship between the tentative FY 1960 MAP and DS programs.”