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

42. Memorandum From the Deputy Secretary of Defense (Gilpatric) to the President¹

Washington, May 3, 1961.

SUBJECT

• Program of Action for VietNam

Pursuant to your decisions at the Cabinet meeting on April 20, and the NSC meeting of April 29 1961,² I am submitting for consideration by the National Security Council a program of action to prevent Communist domination of South Vietnam, including and expanding our present activities in the area.

This program was prepared by an inter-departmental Task Force consisting of representatives from the Departments of State, Defense, and Treasury, CIA, ICA, USIA and the Office of the President. In addition, the Task Force had the benefit of advice from the Joint Staff,CINCPAC and the Chief, MAAG, VietNam. The new Ambassador to VietNam also participated.

In the short time available to the Task Force, it was not possible to develop the program in complete detail. However, the program includes a range of mutually supporting actions of a political, military, economic, psychological and covert character which can be refined periodically on the basis of further recommendations from the Ambassador in the field.

(Toward this end, Brigadier General E.G. Lansdale, USAF, who has been designated Operations Officer for the Task Force, will proceed to VietNam immediately after the program receives Presidential approval. Following on-the-spot discussions with U.S. and VietNamese officials, he will forward to the Director of the Task Force specific recommendations for action in support of the attached program.)

(You will be advised of any changes as this program proceeds and be provided status reports on actions as appropriate.)

Having completed its assignment for the preparation of this program, I recommend that the present task force be now dissolved. Proposed organizational arrangements to carry out the program are included in the attached paper.

Roswell L. Gilpatric³

[Attachment]

A Program of Action To Prevent Communist Domination of South Vietnam⁴

Washington, May 1, 1961.

Appraisal of the situation: After a meeting in Hanoi on 13 May 1959, the Central Committee of the North VietNamese Communist Party publicly announced its intent “smash” the government of President Diem. Following this decision, the Viet Cong have significantly increased their program of infiltration, subversion, sabotage and assassination designed to achieve this end.

At the North Vietnamese Communist Party Congress in September, 1960, the earlier declaration of underground war by the Party’s Control Committee was re-affirmed. This action by the Party Congress took place only a month after Kong Le’s coup in Laos. Scarcely two months later there was a military uprising in Saigon. The turmoil created throughout the area by this rapid succession of events provides an ideal environment for the Communist “master plan” to take over all of Southeast Asia.

Since that time, as can be seen from the attached map,⁵ the internal security situation in South VietNam has become critical. What amounts to a state of active guerilla warfare now exists throughout the country. Despite greatly stepped up efforts by South VietNamese forces, the number of Viet Cong hard-core Communists has increased from 4400 in early 1960 to an estimated 12,000 today. The number of violent incidents per month now averages 650; casualties on both sides totaled more than 4500 during the first three months of this year. These figures, while alarming, are also a reflection of increased efforts by South VietNamese forces. 58% of the country is under some degree of Communist control, ranging from harassment and night raids to almost complete administrative jurisdiction in the Communist “secure areas.”

The Viet Cong over the past two years have succeeded in stepping up the pace and intensity of their attacks to the point where South VietNam is nearing the decisive phase in its battle for survival. If the situation continues to deteriorate, the Communists will be able to press on to their strategic goal of establishing a rival “National Liberation Front” government in one of its (these) “secure areas,” thereby plunging the nation into open civil war. They have publicly announced that they will “take over the country before the end of 1961.”

If agreement is reached on a cease fire in Laos, political negotiations on the future of that country will begin on May 12 at the Fourteen Power Conference in Geneva. However, the April 26th statement on Laos by the Peiping government⁶ indicates that the Communist members of that conference intend to expand the negotiations to include other areas of Southeast Asia. As a result, it can be expected that the Fourteen Power meeting will be prolonged, covering several months or more.

The effect of these negotiations on the situation in VietNam will be threefold:

• First, the very fact that the Fourteen Powers are meeting under essentially the same ground rules as the 1954 Geneva Accords, including the concept of an ICC mechanism in Laos, Vietnam and Cambodia, could have a politically inhibiting effect on any significant measures which the U.S. might undertake to prevent a Communist take-over in South VietNam.
• Second, as has been their practice in the past, the Communists can be expected to use the cover of an international negotiation to expand their subversive activities. In this case, close coordination of their efforts in Southern Laos, Cambodia and VietNam can be expected. The 250 mile border between South VietNam and Laos, while never effectively sealed in the past, will now be deprived of even the semblance of protection which the friendly, pro-western Laos offers.
• Third, the three principal passes through the Annamite Mountains—the Nape Pass, Mugia Gap, and the pass that controls the road from Quang Tri to Savannakhet—lie in Southern Laos. These passes control three key military avenues of advance from North VietNam through Laos into the open Mekong valley leading to Thailand and South VietNam. A Lao political settlement that would afford the Communists an opportunity to maintain any sort of control, covertly or otherwise, of these mountain passes would make them gate keepers to the primary inland invasion route leading to Saigon and flanking the most important defensive terrain in the northern area of South VietNam.

Thus the situation is critical, but not hopeless. The South VietNamese Government, with American aid, is increasing its capabilities to fight its attackers. It provides a strong anti-Communist government and generally pro-American population as a base upon which the necessary additional effort can be founded to defeat the Communist attack. Should the Communist effort increase, either directly or as a result of a collapse of Laos, additional measures beyond those proposed herein may be necessary.

The U.S. Objective: To prevent Communist domination of South VietNam and to create in that country a viable and increasingly democratic society.

Concept of Operations: To initiate, on an accelerated basis, a series of mutually supporting actions of a military, political, economic, psychological and covert character designed to achieve this objective. In so doing, it is intended to use, and where appropriate extend, expedite or build upon the existing U.S. and Government of VietNam—G.V.N.—programs including the Counter Insurgency Plan already underway in South VietNam. There is neither the time available nor any sound justification for “starting from scratch.” Rather the need is to focus the U.S. effort in South VietNam on the immediate internal security problem; to infuse it with a sense of urgency and a dedication to the over-all U.S. objective; to achieve, through cooperative inter-departmental support both in the field and in Washington, the operational flexibility needed to apply the available U.S. assets in a manner best calculated to achieve our objective in VietNam; and finally, to impress on our friends, the VietNamese, and on our foes, the Viet Cong, that come what may, the U.S. intends to win this battle.

The following recommendations for action should not be taken as fixed or immutable. but rather as requests for general authority to undertake [after recommendations from the Ambassador in the field ] a series of accelerated measures along the lines of, and for the purpose stated in the Task Force report.

Program of Action:

1. General: The situation in South VietNam has reached the point where, at least for the time being, primary emphasis must be placed on providing a solution to the internal security program. A significant step which has already been taken by the Country Team to counter Communist subversion in South VietNam has been the development of the Counter-Insurgency Plan. This Plan—a summary of which is attached as Annex A⁷—which has been fully coordinated within the U.S. Government, has been forwarded to President Diem. Those portions of the Plan which are agreed to by the G.V.N. will be implemented as rapidly as possible.

However Communist domination of South VietNam cannot be stopped by military means alone. Our military program must be accompanied and supplemented by an equally strong, equally positive political-economic program.

[2. Political:

a. Assist the G.V.N. under President Diem to develop within the country the widest consensus of public support for a government dedicated to resisting Communist domination.

b. Obtain the political agreements needed to permit prompt SEATO military intervention in South VietNam should this become necessary to prevent the loss of the country to Communism and expedite the development of plans for such a contingency. The United States should be prepared to intervene unilaterally in fulfillment of its commitment under Article IV, 2 of the Manila Pact,⁸ and should make its determination to do so clear through appropriate public statements, diplomatic discussions, troop deployments or other means.

c. Determine the feasibility of an appeal by Vietnam to the United Nations for assistance in the counter-insurgency struggle, requesting the U.N. to provide ground observers to help control the subversion and infiltration of South VietNam by the Communists.

d. Obtain the cooperation of other free nations in the area in support of regional measures designed to inhibit the transit or safe haven of Communist subversive or guerrilla forces operating in South VietNam. In particular, secure the cooperation of Cambodia in the implementation of appropriate military and civil measures to prevent the use of their territory for the infiltration of Communist personnel or supplies into South VietNam.]

POLITICAL AND ECONOMIC OBJECTIVES AND COURSES OF ACTION DESIGNED TO PREVENT COMMUNIST ABSORPTION OF VIET-NAM

Part I. Statement of Objectives. There are listed below our chief political-economic objectives in VietNam. In section two (II) the specific courses of action required to implement these objectives are set forth.

a. Develop political and economic conditions which will create a solid and widespread support among the key political groups and the Renera1 population for a VietNam which has the will to resist Communist encroachment and which in turn stems from a stake in a freer and more democratic society. To accomplish the following it will be necessary to work through and support the present Vietnamese Government despite its acknowledged weaknesses. No other feasible alternative exists at this point in time which does not involve an unacceptable degree of risk. At the same time. we do not underestimate the difficulties inherent in attempting to effect a major alteration in the present governmental structure or in its objectives. To accomplish this will require very astute dealing between U.S. Government personnel and the Vietnamese. However, we believe that we have the combination of positive inducements plus points at which discreet pressure can be exercised which will permit accomplishment of this objective. We would, therefore, in attempting to achieve this objective, pursue the following courses:

(1) Increase the confidence of President Diem and his government in the United States.

President Diem is not now fully confident of United States support. This confidence has been undermined partly by our vigorous efforts to get him to mend his ways politically and partly by the equivocal attitude he is convinced we took at the time of the November 11, 1960, attempted coup. It is essential that President Diem’s full confidence in and communication with the United States be restored promptly.

(2) Strengthen President Diem’s popular support within VietNam.

Despite his recent success at the polls, President Diem lacks the support of a large proportion of opinion-making elements in VietNam, as well as the understanding and support of the mass of people. His autocratic methods and his lack of communication with the VietNamese people are a continuing cause of concern.

b. Improve VietNam’s relationship with other countries and its status in world opinion. While it is vital that VietNam’s internal political situation be improved it is also important that its external political relations with its neighbors and with the world community similarly be improved. VietNam’s relationships with its neighbor Cambodia are generally bad, nevertheless, defeat of the communist insurgents requires close cooperation with Cambodia on border control. This will require a major effort of reconciliation. Other free world countries should be asked to assist or at least support VietNam in its struggle. VietNam is a Free World problem, not just a United States problem. A series of actions. described in Part II of this section, will contribute to the foregoing objective.

c. Undertake economic programs having both a short-term, immediate impact as well as contributing to the longer range economic viability of the country. The degree to which an improvement in both the internal and external political relations of VietNam can be accomplished will be directly related to the extent to which a more favorable economic future for the people can be assured. We can contribute to this objective in the following ways:

(1) The anti-guerilla effort should be accompanied and followed up by economic and political consolidation. A broad range of community development activities both in the political and economic field should be pressed forward. Not only should roads. wells, schools. etc. be pushed forward but village political councils should be created and an imaginative communications system should be established, geared to bring the rural people of VietNam into the body politic.

(2) A long range development program. VietNam is essentially a “have” rather than a “have not” country. It has land, resources. and an able and energetic people. If it were not for the Communists VietNam would probably be. like Thailand, economically viable today. We should help it move ahead with a long range development program against the day when the Communist menace has been brought under control and it can press ahead into an era of self-sustaining economic growth.

(3) Assist VietNam to make the best use of all economic resources available. Our capability to assist VietNam is hampered by its own inability to make the best use of its available resources. Fiscal and monetary measures are needed.

Specific actions to forward each of these objectives are set forth in Part II.

d. Undertake military security arrangements which establish beyond doubt our intention to stand behind VietNam’s resistance to Communist aggression. mobilizing S.E. Asia toward this end.

It is doubtful whether the VietNamese Government can weather the pressures which are certain to be generated by the loss of Laos without prompt and dramatic support for its security from the U.S. Similarly. the extent to which the remainder of the S.E. Asian countries would be prepared to go “in resisting Bloc pressures or in withstanding local Communist threats would depend on whether they still assessed that the U.S. could stem further Communist expansion in the area…⁹ Although they would be disillusioned regarding U.S. resolution after the loss or division of Laos, they would nonetheless welcome demonstrations of U.S. firmness and might in response modify their appraisal of their own future in due course.” (NIE of March 28. “Outlook in Mainland S.E. Asia.”¹⁰)

Thus to further strengthen and improve the internal and external political position of VietNam described in a. and b. above and as a complementary action to the economic undertakings described in c. above. the U.S. should endeavor to develop various strengthened security arrangements as set forth in Part III.

Part II. Specific Courses of Action in Support of the Objectives listed in the paragraphs listed above.

a. Develop political and economic conditions which will create a solid and widespread support among the key political groups and the general population for a VietNam which has the will to resist Communist encroachment and which in turn stems from a stake in a freer and more democratic society.

(1) Increase the confidence of President Diem and his government in the United States.

This must be the starting point of our new approach to VietNam. Fortunately a number of circumstances are favorable: a new administration in the United States, a new ambassador going to VietNam, and the fact that President Diem has received a new mandate. Nevertheless, the going will not be easy. Given Diem’s personality and character and the abrasive nature of our recent relationships, success or failure in this regard will depend very heavily on Ambassador Nolting’s ability to get on the same wavelength with Diem. But the following actions should greatly facilitate Ambassador Nolting’s task.

(a) Presidential Communications

The President sent President Diem a warm public message on the occasion of his inauguration on April 29.¹¹ A highly classified brief personal message should now be sent saying that Ambassador Nolting is on his way with new proposals for joint actions to defeat the Communist insurgents. (Draft attached¹²) Shortly after he presents his credentials, Ambassador Nolting would present another message from the President which would lay out the broad outline of the Task Force program and would seek Diem’s cooperation and endorsement.

Recommendation:

1. That you approve the attached message for immediate dispatch to Diem.

2. That you approve the preparation of a longer message to be developed in consultation with the Ambassador containing the essence of the Task Force programs and bespeaking our confidence in Diem and seeking his cooperation.

(a) Vice-Presidential Visit

The Vice-President’s visit should provide the added incentive needed to give the GVN the motivation and confidence it needs to carry on the struggle. We would hope that meetings between the Vice-President and President Diem could act as a catalytic agent to produce broad agreement on the need for accelerated joint VietNamese-U.S. actions to resist Communist encroachment in S.E. Asia. These meetings would also serve to get across to President Diem our confidence in him as a man of great stature and as one of the strong figures in Southeast Asia on whom we are placing our reliance. At the same time, these conferences should impress Diem with the degree of importance we attach to certain political and economic reforms in Vietnam which are an essential element in frustrating Communist encroachments. Recognizing the difficulties we have had in the past in persuading Diem to take effective action on such reforms, as specific an understanding as possible should be solicited from Diem on this point. Finally it might be possible for the Vice-President to return to Washington with a letter from Diem to the President relating the understanding reached.

Recommendation:

That the Vice-President’s trip to VietNam be focused on gaining the confidence of President Diem and on obtaining broad agreement on joint objectives in Southeast Asia.

(2) Strengthen President Diem’s popular support within VietNam.

The chief threat to the viability of President Diem’s administration is, without a doubt, the fact of Communist insurgency and the government’s inability to protect its own people. Thus military measures must have the highest priority. There is, nevertheless, strong discontent with the government among not only the elite but among peasants, labor and business. Criticism focuses on the dynastic aspects of the Diem rule. on its clandestine political apparatus and on the methods through which the President exercises his leadership. This is aggravated by Communists’ subversive attempts to discredit the President and weaken his government’s authority. All this is made the easier because of a communication void existing between the government and the people. For many months United States efforts have been directed toward persuading Diem to adopt political, social, and economic changes designed to correct this serious defect. Many of these changes are included in the Counter-Insurgency Plan. Our success has only been partial. There are those who consider that Diem will not succeed in the battle to win men’s minds in VietNam.

Thus in giving priority emphasis to the need for internal security. we must not relax in our efforts to persuade Diem of the need for political, social. and economic progress. If his efforts are inadequate in this field, our overall objective could be seriously endangered and we might once more find ourselves in the position of shoring up a leader who had lost the support of his people.

Recommendation:

That Ambassador Nolting be instructed upon his arrival in VietNam to reappraise the political situation and undertake to obtain agreement of the GVN on an urgent basis for a realistic political program along the lines indicated in the CIP. The objective of the program would be to seek to produce favorable attitudes and active popular cooperation against the VC. While the Ambassador’s recommendations might well include certain actions directed toward fiscal and monetary reform measures it is presumed that the major recommendations in this area will be developed by the Ambassador in conjunction with the special team of U.S. experts which it is proposed be dispatched to VietNam for this purpose (see (3) below).

b. Improving VietNam’s relationships with other countries and its status in world opinion. There are three major steps involved in achieving this objective:

(1) Improving relations with Cambodia, leading to full border control cooperation. Cooperation between Cambodia and VietNam in border control is an essential means of combating the Communists. VietNam and Cambodia have always had difficulty in negotiation on any issue, especially a complex and politically-charged problem like border-control. In 1960 Cambodia made a major request for military assistance to which we made only a token response. We should endeavor to obtain better Cambodian cooperation, using a step up of military assistance as “quid pro quo.” To maximize the benefit to be derived from provision of additional military assistance we should specifically agree to provide 4 jet trainers requested by the Cambodians thereby precluding provision of these aircraft by Czechoslovakia which has already offered to make the aircraft available to the Cambodians. This would forestall further Communist penetration in this area.

Recommendation:

That our Ambassadors in Phnom Penh and Saigon be instructed to urge host governments to enter promptly into renewed border control negotiations. The Cambodian Government should be informed in this connection that requests for additional assistance will be sympathetically considered. In this connection it should be informed that its recent request for 4 T-37 aircraft has been approved.

(2) United Nations Observers

Because of the failure of the ICC to control subversion and infiltration it has been suggested that VietNam appeal to the United Nations Security Council for ground observers. The Soviets would probably veto any such action and action in the General Assembly would be required. Not only does the provision of United Nations Observers have intrinsic merit but in any event, United Nations consideration would have the value of focusing world opinion on Communist actions in VietNam.

Recommendation:

That the Ambassador in Saigon be instructed to discuss this matter with the GVN: Ambassador Stevenson might later be asked to explore informally the idea with Mr. Hammarskjold and friendly foreign representatives in New York.

(3) Contributions of other free world countries toward meeting the Communist guerrilla threat. The United Kingdom has already expressed its willingness to cooperate in helping the VietNamese stop the Communists. It has offered to provide training personnel and financial support. Other like-minded countries. notably, the Philippines and Australia, have a capability in this regard. While the use of third country personnel creates administrative problems we nevertheless feel that others should share with us the responsibility for VietNam. Particularly as we can obtain a British participation we will maximize the political benefits to be obtained within the western alliance by sharing responsibility for this difficult problem.

Recommendation:

That our representatives in Saigon be instructed to prepare in consultation with the VietNamese, proposals providing for the use of third country contributions to the training of VietNam forces in counter-guerrilla efforts.

c. Undertake economic programs having both a short-term, immediate impact as well as contributing to the longer range economic viability of the country.

(1) Political and economic action to accompany the anti-guerrilla effort. Action in this field is divided into two categories; i.e. propaganda and civic action.

(a) Organizing a New Political Communications Program in VietNam.

Next to specifying the means, the cost and the resources for interdicting Viet-Cong access to South VietNam and reducing Viet Cong operations to a minimum, the tasks of rallying the people to the government and improving the Government’s relations with the people are the most urgent. A new type of political development is long overdue in VietNam to spark a new spirit. This is something much broader and more relevant than the so-called “liberalization” program.

The government’s rapport and acceptability must be strengthened with the following key elements of the population:

The young professional intelligentsia in the civil service, private organizations, and the faculties.

The provincial, district and village administrators who must be replaced or reoriented for democratic, humane, modern style handling of the little people.

Village youth leaders, village councilors. farm family heads, and teachers.

These key groups could reach the general population in rural and urban areas on a personal basis: new means of mass media can reach the population on a quantitative basis.

A realistic political program would seek to produce favorable attitudes. active popular cooperation against the Viet Cong. and cadres to execute the government’s programs intelligently. A program would develop “institutional generation” as the means. For example, the program could include establishment of a professional and young Community Development Corps for the whole country, the formulation of political training schools, form a new democratic administrative corps, the development of a mass radio and television system for political communication, the organization and training of teams of young Vietnamese professionals for important longer-range projects such as an integrated electric power grid system for the whole country, and the functional groups required for the National Economic Council; a rice-price stabilization for the large rural population: and expansion of the school system.

Recommendation:

1. We should assign an expert in Asian political development to assist the Ambassador in explaining and developing a political communications program.

2. We should set up a leader grant in reverse for Asians and others with experience in politics to visit VietNam.

(2) Proposed new projects in the field of Civic Action

In order to strengthen the will of the people to resist the incursions of the Viet Cong the following program is proposed: USOM/VietNam should be instructed to organize a number of “Task Force Teams” for concentrated work in those rural areas currently subject to intensive Viet Cong activities. These teams would undertake, preferably in cooperation with local communities, a series of short-range, simple, inexpensive projects, the benefits of which can be readily recognized. Examples of projects to be undertaken are: 1) well digging: 2) construction of inexpensive schools using local materiel: 3) construction of markets: 4) introduction of medical dispensaries: 5) construction of simple irrigation ditches: 6 agricultural extension services: 7) veterinary services: 8) strengthening of rural agricultural cooperatives: 9) construction of local roads, etc.

The above and related actions—which would incorporate a maximum of self-help operations—could be initiated on a crash basis. They should be addressed to meeting the needs of the village communities. It is proposed that the “Task Force” pattern of operations of USOM/Laos be adopted. This program was designed to accommodate to the disorganized conditions after the Battle of Vientiane. The objective of the Task Force concept was to provide relief to non-infiltrated and liberated areas and to accelerate self-help in rural development activities. This program, despite numerous difficulties, has achieved satisfactory results to date and presents itself as a most convenient and realistic mechanism for the Presidential Task Force program for VietNam.

In carrying out the foregoing, the cooperation of existing Vietnamese organizations should be utilized to the maximum. In particular the full cooperation of the military would be required.

Recommendation:

That ICA be granted authorization and the funds to move into a rural development-civic action program. This might cost roughly $3 to 5 million, mostly in local currency. Directors of field teams should be given authority with respect to the expenditure of funds including the use of dollar instruments to purchase local currency on the spot.

(2) Long Range Development Program

Perhaps the most effective means of establishing Vietnamese confidence in the political and economic future of their country would be for the U.S. to commit itself to a long range economic development program. Under peaceful circumstances VietNam would unquestionably be one of the most rapidly developing countries in the area having the resources, both human and natural, to bring this about. A minimum of $50 million of U.S. development grant assistance can be effectively employed in VietNam over a period of five years. The foregoing sum is recommended as a supplement to current programs as well as those contemplated for FY 1962. They should in their aggregate serve to significantly accelerate the overall development of the VietNamese economy and provide some additional social and physical infrastructure support. While not submitted as part of any comprehensive long range development program they constitute unquestionably priority components of any long range program. Contingent upon the VietNamese cooperation, assistance can be directed into the following areas:

1. Agriculture—A 20% increase of agricultural output is a feasible 5 year goal. Expanded extension service, additional agricultural credit facilities and greater use of fertilizer are called to meet this objective.

2. Health Services—Present deficient facilities should be expanded through training of additional physicians, nurses and technicians to provide for staffing of hospitals and local health centers.

3. Education—Priority should be accorded to accelerated teacher training programs with an augmented technical-vocational education program.

4. Fishing—The deficient protein content of the VietNamese diet can be inexpensively augmented by the provision of additional larger and specially equipped fishing boats to provide for greater range and more efficient processing of catch.

5. Roads—There exists an urgent need for further development of secondary road systems in the rural areas to permit more efficient marketing of agriculture products as well as to assist in exploitation of presently untapped forestry resources.

6. Public administration—To obtain effective government direction of essential public services, public administration training should be augmented at the national, provincial, and local levels.

7. Industrial development—The present Industrial Development Center could be used to expand light industry. through the provision of additional resources and the improvement of managerial, entrepreneurial and technical skills.

Recommendation:

That Ambassador Nolting be authorized to inform the Government of VietNam that the United States is prepared to discuss a long range joint five-year development program which would involve contributions and actions by both parties.

(3) We should assist VietNam to make the best use of an economic resources available.

In spite of the increased insurgency. VietNam has been making good economic progress. It has increased production and its exports have been increasing rapidly. Despite a steady decrease in economic aid. its foreign exchange reserves have been going up and are now in excess of its normal needs. On the other hand, GVN revenues are now inadequate, in GVN opinion, to meet the increased local currency costs of further anti-insurgency measures. This presents the U.S. with a difficult dilemma. On the one hand, the enthusiastic cooperation of the GVN in moving forward against the Communists is essential, but on the other hand, if we give in to their request for more aid in support of the military budget this might not only fail to produce additional local currency, but could provide a serious disincentive to GVN efforts to find more resources. More importantly, coming after a protracted U.S. effort to obtain an increased Vietnamese financial contribution which has recently gained a limited Vietnamese agreement (the Vietnamese have agreed to meet the FY 61 local currency costs of the CIP! a relaxation in our previous position might well be interpreted as an acceptance by the U.S. that the problem is of greater concern to it than to Vietnam. Such an attitude could be highly disruptive to an effective joint U.S.-VietNamese effort. They have the means to raise more revenue, including increased taxation and monetary reform. but both of these solutions, particularly the latter, are unpalatable in the extreme to President Diem. However, one thing is certain, payment of Vietnamese troops will receive first priority in the VietNamese budget and U.S. failure to provide additional defense support aid will not affect the ability or willingness of VietNam to carry out necessary military actions.

Recommendation:

Having in mind that our chief objective is obtaining full and enthusiastic action by the GVN in its fight against the Communists, a high level team. preferably headed by Assistant Secretary of the Treasury John Leddy with State and ICA members, should be dispatched to Saigon to work out in conjunction with the Ambassador a-plan whereby combined U.S. and VietNamese financial resources can best be utilized. This group’s terms of reference should cover the broad range of fiscal and economic problems. Authority should be given to make concessions necessary to achieve our objectives, and to soften the blow of monetary reform. Ambassador Nolting and perhaps the Vice-President would notify Diem of the proposed visit of this group informing him that their objective is clearly to maximize our joint efforts rather than to force the Vietnamese into unpalatable actions.

d. Undertake military security arrangements which establish beyond doubt our intention to stand behind VietNam’s resistance to Communist aggression, mobilizing S.E. Asia toward this end.

1. A New Bilateral Arrangement with VietNam

The Geneva Accords have been totally inadequate in protecting South VietNam against Communist infiltration and insurgency. Moreover, with the Communist success in Laos, VietNam and the remainder of Southeast Asia will require dramatic U.S. action to bolster the will to continue to resist further Communist pressures. While there is still time, the inhibitions of the Geneva Accords, which have been violated with impunity by the Communists in both Laos and VietNam, should be done away with. We should consider joining with the VietNamese in a clear cut defensive alliance which might include stationing of U.S. forces on VietNamese soil. As a variant of this arrangement certain SEATO troops might also be employed. It should be recognized that the foregoing proposals require careful and detailed consideration and preparation. In addition to the previously cited advantages such an action would have at least two other important political and military advantages:

a. It would release a portion of the ARVN from relatively static military functions to pursue the war against the insurgents and

b. It would place the Sino-Soviet Bloc in the position of risking direct intervention in a situation where U.S. forces were already in place, accepting the consequences of such action.

This is in direct contrast to the current situation in Laos.

Alternatively, there are several potential political and military disadvantages to such an action, principal among these being:

a. The position of the neutrals might well be opposed and that of our non-Asian Allies uncertain at best.

b. The major propaganda opportunity this would provide the Communists and

c. The danger that a troop contribution would provoke a DRV-ChiCom reaction with the risk of involving a significant commitment of U.S. force in the Pacific to the Asian mainland. The French tied up some 200,000 troops during the unsuccessful Indo-China effort.

Recommendation.

That as a first step, Ambassador Nolting be instructed to enter into preliminary discussions with Diem regarding the possibility of a defensive alliance and a formal rejection of the Geneva Accords. Concurrently, the TCS and CINCPAC should be requested to provide an assessment of the military advisability of committing U.S. forces to VietNam, making recommendations as to the size of the force commitment which would be deemed militarily effective for:

a. Releasing VietNamese forces from advanced and static defense positions to permit their active pursuance of the counter insurgency effort.

b. Provision of maximum training to currently approved VietNamese forces and

c. Significant military resistance to potential DRV and/or ChiCom action.

3. Military:

a. The following military actions were approved by the President at the NSC meeting of 29 April 1961:

1. Increase the MAAG as necessary to insure the effective implementation of the military portion of the program including the training of a 20,000 man addition to the present G.V.N. armed forces of 150,000. Initial appraisal of new tasks assigned CHMAAG indicate that approximately 100 additional military personnel will be required immediately in addition to the present complement of 685.

2. Expand MAAG responsibilities to include authority to provide support and advice to the Self Defense Corps with a strength of approximately 40,000.

3. Authorize MAP support for the entire Civil Guard force of 68,000-MAP support is now authorized for 32,000; the remaining 36,000 are not now adequately trained and equipped.

4. Install as a matter of priority a radar surveillance capability which will enable the G.V.N. to obtain warning of Communist overflights being conducted for intelligence or clandestine air supply purposes. Initially, this capability should be provided from U.S. mobile radar capability, with permanent AC&W installations established as rapidly as practicable.

5. Provide MAP support for the VietNamese Junk Force as a means of preventing Viet-Cong clandestine supply and infiltration into South Viet-Nam by water. MAP support, which was not provided in the Counter-Insurgency Plan, will include training of junk crews in Viet-Nam or at U.S. bases by U.S. Navy personnel.

b. The following additional actions are considered necessary to assist the G.V.N. meet the increased security threat resulting from the new situation along the Laos-G.V.N. frontier:

1. Initiate discussions with the G.V.N. to determine the additional resources [U.S. support] required—to include funding, pay and allowances, equipment and training—to enable it to increase its force levels from the present end strength of 170,000 to 200,000 in order to create two new division equivalents for deployment to the northwest border region.

2. Assist the G.V.N. armed forces to increase their border patrol and insurgency suppression capabilities by establishing an effective border intelligence and patrol system, by instituting regular aerial surveillance over the entire frontier area, and by applying modern technological area-denial techniques to close the roads and trails along the Laos-G.V.N. border.

3. Assist the G.V.N. to establish a Combat Development and Test Center in South Viet-Nam to develop, with the help of modern technology, new techniques for use against the Viet-Cong forces.

4. Assist the G.V.N. forces with health, welfare and public work projects by providing U.S. Army civic action mobile training teams.

c. Initiate the following U.S. Military actions on a unilateral basis in support of the G.V.N.’s efforts to prevent Communist domination of South VietNam:

1. Augment the MAAG with two U.S. training commands—composed of approximately 1600 instructors each—to enable the MAAG to establish in the “high plateau” region of South Viet-Nam two divisional field training areas to accelerate the U.S. training program for the entire GVN army.

2. Deploy, as soon as possible, a Special Forces Group—approximately 400 U.S. military personnel—to Nha Trang in order to accelerate GVN Special Forces training.

3. Assign CINCPAC the responsibility for coastal patrol activities (from the Cambodian border to the mouth of the Mekong River), employing U.S. Naval forces in conjunction with the Junk Force, to prevent the seaborne infiltration of Viet Cong personnel and materiel (into the southern delta area).

4. Review and update, as required by the present situation, all plans for U.S. military deployment and intervention in South Viet-Nam with conventional, non-nuclear forces, including as a matter of priority plans for the deployment, on short notice, of a Marine brigade plus necessary supporting troops to Tourane or Nha Trang.

Action on the foregoing would require prior urgent political consultation with the GVN. Canada, India, our SEATO Allies and Cambodia.

[4. Economic:

a. Additional piaster resources will be needed for the expanded counter-insurgency effort in excess of those which the GVN itself can provide under present arrangements.

While the GVN should be assured of the necessary funds we should make a major effort to accomplish this in conjunction with a devaluation of the present unrealistic foreign exchange rate. It will be necessary to assure the GVN that a revaluation would not result in any reduction of the present aid level.

We should continue to encourage GVN as appropriate to (a) increase tax revenues through improved administration and modification of the tax structure and (b) use its foreign exchange resources more effectively.

The precise level of U.S. support of the GVN military budget shall be determined through appropriate negotiations but the guiding principle in these negotiations shall be to insure that the confidence of President Diem in the wholehearted U.S. support of the counterinsurgency program is not prejudiced. The Country Team should also study and recommend realistic steps to ameliorate any adverse economic effects of more generous lefense support.

b. Organize functional field teams composed of public administrators public health officials, educators, agricultural experts, etc., to be sent to pacified areas to undertake, preferably in cooperation with local authorities a series of simple, inexpensive projects, the benefits of which can be quickly recognized.

c. Sponsor the visit of a practical U.S. economic team, drawing heavily on U.S. private industry, to South Viet-Nam to work out with the VietNamese effective plans to speed up national development—including goals for each of the next five years—to give Viet-Nam a better tax structure, to establish a sound basis for foreign investment, and to institute specific programs designed to have an early impact upon agricultural areas now vulnerable to Communist takeover.]

5. Psychological:

a. Encourage the GVN to continue liberalizing its public information policies to help develop a broad public understanding of the actions required to combat Communist insurgents and to build public confidence in the GVN’s determination and capability to deal with the problem.

b. Assist the GVN to develop and improve the USOM-supported radio network for the country, to include the prompt establishment of the presently planned new stations at Soc Trang, Banmethout and Quang Ngai and the installation of the more powerful, new transmitters now on USOM order for Saigon and Hue.

c. Assist the GVN to initiate a training program for information and press attaches in the various ministries and directorates.

d. Assist the GVN to establish a Press Institute for the training of selected young people for careers in journalism.

e. In cooperation with the MAAG and the Ministry of Defense, make use of the troop information and education program of the GVN armed forces as a channel of communication between the Government and the people in the rural areas.

f. Encourage President Diem to continue the effective “fireside chat” and other getting-to-the-people techniques which were begun during the recent election campaign. Provide maximum press, film, and radio coverage for such appearances.

g. Reorient the programming of the existing USIS bi-national centers so that they can serve as training centers for rural information and educational cadres.

h. In coordination with the MAAG, CIA, and the GVN Ministry of Defense compile and declassify for use of media representatives in South Viet-Nam and throughout the world, documented facts concerning Communist infiltration and terrorists’ activities and the measures being taken by the GVN to counter such attacks.

i. In coordination with the CIA and the appropriate GVN Ministry, increase the flow of information to media representatives of the unsatisfactory living conditions in North VietNam.

j. Develop agricultural “show-places” throughout the country, with a view toward exploiting their beneficial psychological effects. This project would be accomplished by combined teams of VietNamese-Civic Action Personnel-Americans-Peace Corps-, Filipinos-Operation Brotherhood-, and other Free World nationals.

k. Exploit as a part of a planned psychological campaign the rehabilitation of Communist Viet Cong prisoners now held in South Viet-Nam. Testimony of rehabilitated prisoners stressing the errors of Communism should be beamed to Communist-held areas, including North VietNam, to induce defections. This rehabilitation program would be assisted by a team of U.S. personnel including U.S. Army-Civil Affairs, Psychological Warfare, and Counter-Intelligence-USIS, and USOM experts.

l. Provide adequate funds for an impressive U.S. participation in the Saigon Trade Fair of 1962.

6. Covert Actions:

In North Vietnam, ….A capability should be created by MAAG in the South VietNamese Army to conduct Ranger raids and similar military actions in North Viet-Nam as might prove necessary or appropriate. Such actions should try to avoid any outbreak of extensive resistance or insurrection which could not be supported to the extent necessary to stave off repression.

Conduct over-flights for dropping of leaflets to harass the Communists and to maintain morale of North Vietnamese population, and increase gray broadcasts to North Viet-Nam for the same purposes.

d. Internal South Vietnam:

Effect operations to penetrate political forces, government, armed services and opposition elements to measure support of government, provide warning of any coup plans, and identify individuals with potentiality of providing leadership in event of disappearance of President Diem. These operations require especially careful handling.

Build up an increase in the population’s participation in and loyalty to free government in VietNam, through improved communication between the government and the people, and by strengthening independent or quasi-independent organizations of political, syndical, or professional character. Support covertly the GVN in allied and neutral countries, with special emphasis on bringing out GVN accomplishments, to counteract tendencies towards a “political solution” while the Communists are attacking GVN. Effect, in support, a psychological program in Viet-Nam and elsewhere exploiting Communist brutality and aggression in North VietNam.

7. Funding: Not all of which will be expanded in 1961.

a. To provide for its own defense against external attack and internal subversion, it has been necessary for the GVN to increase its defense budget. After thorough consultation with MAAG, VietNam, the mutually agreed calendar year figures—in millions of dollars—at a rate of 35 piasters=$1—for the South Viet-Nam defense budget [over the past few years] have been as follows: [FY 60] 1960, $168.0, [FY 61] 1961, $212.0 which includes the initial costs of C.I.P., and if the program of action recommended by the Presidential Task Force is approved, the [FY 62] 1962 defense budget [will be] may reach $232 million.

Over the same period, the U.S. contribution in Defense Support and PL 480 [funds] local currency counterpart has steadily declined from $155.5 million in [FY 60] 1960 to $134 million in [FY 61] 1961 to a currently proposed figure of $100 million in [FY 62] 1962. The GVN makes up the difference between [the VietNamese] its total defense budget and the U.S. contribution [is to be provided within the limits of its capabilities, by the GVN]. VietNamese contributions have been as follows [FY 60] 1960, $10.0 million, [FY 61] 1961, $20.0 million. This may [has resulted] result in [FY 61] 1961 in a shortfall of $58.0 million—-$212—($134+$20)=$58—-. The Country Team has recommended that U.S. contribute an additional $19 million equivalent in local currency counterpart funds. [If this is approved] This would raise the total [FY 61] 1961 U.S. contribution to $153.0 million, but would still leave a shortfall of $39 million. This is almost twice the amount the Vietnamese have funded [been able to fund] to date.

While recognizing that the final levels of both U.S. and Vietnamese contributions to the [FY 61] 1961 defense budget are [still under] subject to further negotiation, it must be kept in mind that in order to be certain that the 20,000 additional soldiers needed for the GVN army are brought into the troop basis promptly, it may be necessary for the U.S. to increase [our] its 1961 local currency [FY 61] contribution by [some $58] up to $58 million piaster equivalent to insure the success of the counter-insurgency plan.

The Presidential Task Force believes that an equitable [recommends a] funding program for [FY 62] 1962 [based on] might involve a U.S. contribution of $145.5 million and a VietNamese contribution of $86.5 million piaster equivalent. [This would provide the means for carrying out the Program of Action for VietNam. It requires a four-fold increase over the FY 61 GVN contribution. If the VietNamese are unable to provide this level of funds, there will again be a substantial short-fall which the U.S. will have to meet if the program is to achieve its objectives.] However, it considers that final decision on this subject should await the recommendations of the financial team proposed elsewhere in this paper. [To meet the proposed 200,000] If the force strength is increased to 200 000, this would involve an eventual annual [an] increase in the GVN defense budget of $15.0 million [additional]piaster equivalent [will be required].

b. Over the past few years the military assistance program for Viet-Nam has been as follows: FY 59, $45, FY 60, $44.2, FY 61, $73.6. For FY 62 the Department of Defense recommends $110.0 an increase of $36.4—all figures in millions. This latter figure also includes [includes funds for] increased MAP cost of the Program of Action for VietNam. [Direct that $71 million be added to the current FY 62 Military Assistance Program for V.N. to meet this emergency.] The current military assistance program for V.N. of $68.4 million in FY 62 provides only minimum funds required to maintain GVN armed forces of 170,000 and 32,000 of the Civil Guard. In order to provide necessary new equipment training and other support required for GVN armed forces of 200,000* a Civil Guard of 68,000, Self Defense Corps of 40,000, and support of 400* additional U.S. Special Forces Personnel to augment MAAG, an additional $71 million for MAP is required in FY 62 for a total of about $140 million. Additional funds [will] may be required for Defense Support to meet the local currency for the GVN military budget—see paragraph 7a.

*The above starred items are not yet approved. The others have been. How is difference between $110 million and $140 million in FY 1962 explained?

Estimates to cover the use of the Peace Corps and Operations Brotherhood are being developed.

[8. Organizational Arrangements: For purposes of U.S. actions in support of this program, the President hereby declares that Viet-Nam is a critical area and approves the organizational concept whereby over-all direction, inter-agency coordination and support of the program will be effected through a Presidential Task Force constituted as follows:

Director: Deputy Secretary of Defense Roswell L. Gilpatric

Project Officer: Brig. Gen. Edward G. Lansdale, USAF

Executive: Col. Edwin F. Black,USA

Liaison: Mr. Frank Hand

Defense: Assistant Secretary of Defense (ISA) Paul H. Nitze

JCS: Major General C.H. Bonesteel and Col. R.M. Levy

State: Deputy Under Secretary Alexis Johnson or Assistant Secretary for Far Eastern Affairs Walter P. McConaughy

ICA: Mr. William Sheppard

CIA: Chief, Far East Division, Mr. Desmond FitzGerald

USIA: Deputy Director Thomas C. Sorenson

BOB: Assistant Director, Kenneth Hansen

Treasury Observer: Assistant Secretary, Office of International Finance, John M. Leddy

Office of the President: W.W. Rostow]

[The Ambassador as head of the Country Team is assigned the authority and the responsibility to see that the Program is carried out in the field and to recommend the timing of the actions. He is authorized to advise the Director of the Task Force of any changes which he believes should be made in the Program.]

[In carrying out his duties while in the field, the Operations Officer of the Task Force will cooperate with the Ambassador and the Country Team.]

[9. Vice President’s Visit to South Vietnam:]

[If the Vice President does decide to pay an official visit to South VietNam, there will be prepared for him a proposed list of matters for him to discuss with President Diem in furtherance of the above program of action.!

8. Organizational Arrangements:

Because of the critical nature of the situation in VietNam, and the need for accelerated action, the direction, coordination and support of the program will be effected through a special Interdepartmental Task Force on VietNam, established in the Department of State and constituted as follows:

Chairman: Under Secretary George W. Ball

Alternate Chairman: Asst. Secretary Walter P. McConaughy

Director: Sterling T. Cottrell

Deputy Director: Brig. Gen. Lansdale

Executive Officer: Chalmers B. Wood

Members: Representatives to be designated

Defense:

Treasury:

JCS:

ICA:

CIA:

USIA:

Office of the President:

An Operations Center has been established in the Department of State, under the direction of Ambassador Theodore C. Achilles, to serve as the center for insuring speed, coherence and coordination in United States political, military, economic, information, and psychological actions with respect to specific crisis situations as required. Mr. Cottrell will operate from this center in close coordination with the Assistant Secretary for, and staff of, the Bureau of Far Eastern Affairs, as well as with the other members of the Task Force, so as to insure there is full coordination of all aspects of the action program, not only within Viet-Nam but with other concerned countries.

The Director or Deputy Director, together with such other members of the staff or Task Force as may prove desirable, may travel to Viet-Nam as circumstances require. At the request of the Ambassador to VietNam, such additional staff members may be assigned to him as considered necessary most effectively to carry out the program. In the field, all such staff members will function under the general direction of the Ambassador in accordance with Section 201 of Executive Order No. 10893 of November 8. 1960.

1. Source: Departmegnt of State, Central Files, 611.51K/5-361. Top Secret. The source text was attached to a memorandum from Ball to Rusk, Bowles, Johnson, McGhee, and McConaughy, May 3, noting that the enclosed memorandum was a Department of State draft and that differences with Defense remained to be ironed out. Also attached to the source text was a note stating that Rusk had discussed the organizational differences with McNamara without result and that they would discuss them further with the President on May 5 before the NSC meeting. The underscored sections are additions to the earlier drafts cited in Document 35.
2. See Documents 31 and 40.
3. Printed from a copy that bears this typed signature.
4. Drafted by Cleveland. Another draft of this paper, also dated May 1, and prepared by the Task Force with input from the Departments of Defense and the Treasury, is in Kennedy Library, National Security Files, Vietnam Country Series. The underscored portions indicate the parts of the Department of State draft that do not appear in the other May 1 draft, while the bracketed portions indicate sections that the Department of State wanted removed from the draft.
5. Not found.
6. For text of this statement, see Survey of China Mainland Press, No. 2487, May 2, 1961, pp. 31-32.
7. Not attached to the source text; see Document 1.
8. For text of the Southeast Asia Collective Defense Treaty, September 8, 1954, see 6 UST 81-86.
9. Ellipsis in the source text.
10. Document 22.
11. Document 34.
12. No draft was attached to the source text. However, copies of similar draft letters, prepared by Cleveland on May 3, are in Department of State,G/PM Files: Lot 64 D 354.