258. Telegram From the Embassy in Vietnam to the Department of State1
661. Task Force VN. Embtel 5452 reported decline: in public morale which occurred late October with attendant increased dissatisfaction with GVN on part civil and military officials.
Since then situation seems to have stabilized somewhat in that morale has not noticeably deteriorated further. Prices Saigon remain high (no. 1 rice was 11 plasters per kilo Nov 14), but slight decline certain commodities has taken place. There remains, however, much jitteriness, and population could easily be thrown into state of near panic by VC terrorism in or military [garble] near Saigon.
We believe present situation is anticipatory lull pending hoped-for dramatic results of Taylor Mission. In past few days there have been press stories inquiring when evidence of increased US support can be expected and continuing express hope either directly or indirectly US forces in some form will be sent to VietNam. Conversations with Assembly Deputies, Government officials and private citizens also indicate some uneasiness at absence to date of visible aftermath Taylor visit. In this atmosphere it evident dramatic moves by US would give immediate boost to morale, whereas absence such moves would further depress spirits.
On political front criticism of government and Diem is growing, especially by people in or close to GVN. Vice President and Can Lao financial advisor most recent and most striking examples we can cite in this connection. Criticism also appears more open in that there less attempt than before to conceal personal views and even usually strictly controlled newspapers carry occasional barbs against government [Page 619]methods. Perhaps this reason two papers had articles censored Nov 10.
At same time, pattern of possible reformist action beginning to develop openly. Principal goal of extremely moderate group behind this action seems to be creation some sort of supreme war council which, though under President, would exercise much of his present authority and take over many fields of activity he now personally directs. Idea has now been publicly floated in press, has received favorable cross-play and is very much alive.
While advocacy of reforms continues, CAS reports indicate coup plotting per se in abeyance pending results of Taylor Mission and GVN response to them.
Thus while situation here momentarily stable psychologically, it still highly volatile pending hoped-for US-inspired new phase in anti-VC war.