Foreign Relations of the United States, 1961–1963, Volume I, Vietnam, 1961

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

Saigon, August 8, 1961, 2 p.m.

192. Department telegram 140.² Task force Saigon greatly encouraged by President’s letter contained reftel. Letter, with minor changes as per Deptel 146,³ was delivered to Thuan for President Diem early August 7, followed by hour and one-half discussion with Pres Diem and Thuan after letter had been studied. Following is report of that conversation:

I greeted President Diem with remark that I hoped he was as pleased by the tone and content of President Kennedy’s letter as were the members of our task force here in Saigon, as it appeared to us to represent another major landmark in US resolve to help his country. To my surprise and annoyance, he responded that he had found in it no “figures about the amount of US aid”. I said that we would get to that later, but first I would like with his permission to underline certain points in connection with the President’s message. We then proceeded to review the letter and in the course of discussion, I made the following points:

(A) In adopting the major recommendations of the joint Vietnamese-American experts’ report, the United States had not only re-enforced its already large commitment to Viet-Nam but had also adopted a new “break-through” philosophy of action which we are prepared to follow up to the extent that the necessary decisions and actions by the GVN make possible. I said that in my opinion progress already made by cooperative action had been remarkable The Tempo and efficiency of programs in many fields in order to put the Viet Cong definitely on the defensive military politically and psychologically [sic]. We shared President Diem’s feelings that it is not enough to win a few battles and score successes here and there, but that we had to systematize our joint efforts and mount an increasing, broad, systematic offensive in all fields.

(B) In this connection we attached particular importance to President Kennedy’s point (1) in connection with the increase of GVN armed forces by 30,000. I said that we were gratified by the recent successes of the Vietnamese forces, but there still seemed to be lacking an over-all strategic plan to be carried out by phases in predetermined geographic areas, to liberate those areas and to secure permanently their pacification and allegiance to the government. I said that Gen.McGarr had been working on this constantly, and only recently I had seen another memorandum⁴ which he had sent to the President urging the development and adoption of such a plan. I realized the extreme sensitivity of such a plan, but we wished to be assured that one existed or would exist just as soon as possible.

(C) With regard to the financing of the joint action program, it was clear that a part of the additional costs would be in piasters, which only the GVN could produce. The seven criteria developed by the joint experts group as guidelines to regulate the type and volume of US commercial imports⁵ were designed, not to conserve US aid dollars, but to protect the Vietnamese economy and to assure a program of US aid which could be justified before our Congress and people as contributing to the kind of economic and social development of Viet-Nam which we both desire. At the beginning of our conversation, President Diem had inquired about an aid figure. I thought frankly that we could best arrive at a constructive solution if we approached the matter from a different point of view. I asked the President to accept my assurance that we would be willing, within the limits of appropriated funds and the agreed criteria, to set high targets for the importation of US commercial aid goods. We would then see what amount could in fact be absorbed within the agreed criteria. Thuan interjected that he hoped we would not be rigid in determining the type of goods which could be imported under the criteria, and said that GVN’s long-range planning could not go forward without assurances for the future. I replied that we expected the criteria to be maintained, but that I saw no reason why we could not agree on the types of goods to be imported. A part of the problem is obviously the number of piasters generated by each dollar’s worth of imports. My government hoped and expected that a definite decision would be taken promptly by the GVN to increase substantially the piaster yield. This is necessary if the joint program is to be accomplished.

(D) There followed a discussion of the need promptly to organize parallel committees for planning and implementation. I reminded Diem that the first time we had had a conversation together, at Dalat several months ago,⁶ he had mentioned the desirability of developing an over-all plan. I said we warmly welcomed this idea, and the experts’ report stressed the need of committees to plan systematically, establish priorities, and follow through on implementation. As President Kennedy’s letter had said, the US was prepared, in this special crisis situation in Viet Nam, to give maximum flexibility to its representatives in Viet Nam; by the same token, it was necessary to the Vietnamese Govt to set itself up in a manner which would delegate authority and make possible close and rapid coordination of effort.

Again reverting to the piaster question, I said that it would be necessary promptly to establish a higher piaster yield on dollar imports, on the understanding that the US would not use increased piaster yield as a reason for diminishing its own contribution. The whole purpose was to increase our joint effort. To arrive at definite results, it was necessary promptly to sit down in a committee and to reach definite decisions. At this point I had the opportunity to emphasize the value of long-range economic planning and programs which could stimulate the sale of US imports in the private sector. Diem, catching the point, said he thought that certain of this [his?] road building projects, as well as city development projects might be done through private Vietnamese-Chinese enterprise, which would expand the market for US imports and generate piasters.

(E) Turning to action in the political and psychological fields, I said my govt felt that the new decisions embodied in President Kennedy’s letter were sufficiently great and far-reaching to warrant their use by Pres Diem in a major campaign to inspire the nation and to build broader and more solid political support for his regime. I mentioned the fact that in the US and in the world press generally, while sympathetic understanding of Viet Nam and its govt had increased, there was still room for improvement and that President Diem himself could contribute greatly to this. I said that certain members of our congress think that more can and should be done in the direction of social and political consolidation and progress, and that we wished to establish an aid program on a solid basis of congressional support which would assure its continuance. Thuan picked up this point and suggested that a joint communiqué should be issued. He said he thought this might be the occasion for a “psychological shock” campaign, to rally the country. I said I felt that President Diem should seriously consider launching a drive to gain Vietnamese public confidence in its govt, using the adoption of the experts’ report, plus perhaps speeches by radio in which Pres Diem could make an appeal for national unity and offer opportunity within the new program to Vietnamese who had for one reason or another stood aside from govt activity. I suggested that Thuan and I might come up with some ideas for the Pres on this, and he seemed to agree, but added that he might use the occasion again to explain the need for self-sacrifice under the doctrine of “personalism”.

While Diem did not commit himself to anything specific during this conversation, he warmed up considerably to the opportunities offered by Pres Kennedy’s letter. Certainly the discussion ended more hopefully than it began, although I tried unsuccessfully to pin him down on fiscal reform. His attitude did not seem unappreciative or evasive; but he has a habit of thinking in terms of a series of immediate things to be done, to get wound up in details, and to neglect to develop a broad pattern of systematic action. I returned to the question of systematic planning by committee on several occasions, and while he gave a generally favorable response, it was clear that he was worried by the feeling that any such delegation of responsibility might take out of his hands the detailed planning and direction for which he has such an appetite. Nevertheless, I think we have made some real headway. It was agreed that Thuan and I should get together promptly to sort out matters and determine where we go from here. At Thuan’s suggestion, we agreed that the first thing to be considered would be a possible communiqué (or some other method of “choc psychologique”), to be followed promptly by a designation of parallel committees for planning and implementation.

Before departing, I asked Diem whether there was any special word he wanted me to get back to Pres Kennedy. He said please to express his sincere appreciation for the message, to which he would like to give further study and thought. To my suggestion that we should immediately proceed to organize committees for planning, to estimate costs, and to solve the financial problems, he agreed and left it to Thuan and me to pursue. We shall do so and report further.

Nolting

1. Source: Department of State, Central Files, 751K.5-MSP/8-861. Secret; Priority. Repeated to Bangkok, Vientiane, CINCPAC for PolAd, Paris, London, Ottawa, New Delhi, Tokyo, and Phnom Penh.
2. Document 113.
3. Dated August 5. (Department of State, Central Files 751 K.5-MSP/8-561)
4. Not further identified.
5. See Document 93.
6. Not further identified.