78. Memorandum From the Secretary of Defense’s Assistant for Special Operations (Lansdale) to the Deputy Secretary of Defense (Gilpatric)1


  • Vietnam Economic Report

Colonel Ed Black has sent me the following information about the joint report by the Vietnamese government and the U.S. Special Financial Group headed by Dr. Staley. I will send him comments as he requested,2 including suggestions I have given to the U.S. Army Civil Affairs team which departs tomorrow for Vietnam. Colonel Black’s message:

“Following is my outline of joint U.S.-VN economic report which was adopted by Staley-Thuc groups 28 June:

  • “1. Introduction:
    How report came to be written. Outgrowth of Johnson visit.
    General philosophy adopted by the two chairmen. (See Joint Press Release3).
  • “2. Military-Internal Security Program:
    Brief resume of security situation, taking into account (1) the stepped-up level of VC activity and (2) the potential effects of events in Laos on the GVN security problem.
    The general defense concept of the GVN.
    The ARVN.
    The civil guard.
    The local defense forces.
    The youth corps.
  • “3. Emergency economic program:

    A list of programs designed to insure the success of the military-internal security program by providing immediate, impact-type economic and social aid to the villagers and other important groups.

  • “4. Medium range development program:

    The broad guidelines of a 3-5 year program designed to make Viet-Nam a self-sustaining economy.

  • “5. Financial recommendations:

    Recommendations as to the financial and other measures to be taken by each government in support of the three essential programs outlined above.

  • “6. Organizational recommendations:

    Specific recommendations concerning the establishment of procedures to assure continuing joint GVN-U.S. refinement of the plans and supervision of the implementation of the three essential programs outlined above.

    “I am working directly with Gen. Khanh and MAAG on sections 2, 3 and 6. Under section 3, the Vietnamese have proposed the following with first priority to A and B:

    Communications at village level including wire, radio, and community.
    More agrovilles.
    Flying doctor program.
    Free distribution of insecticides and fertilizers.
    Widespread program of rubber planting on small holdings on basis of 3 hectares per family.

    Wolf Ladejinsky (advisor to President Diem on agrarian affairs) also places village communications in highest priority. Would appreciate your suggestions for section 3.

    “Under section 6 we are looking for recommendations as to desirable joint U.S.-VN agencies which would bring U.S. and VN opposite numbers into continuing personal contact, thus improving understanding and trust in dealing with daily problems. As examples, we are considering desirability of joint committee on rural reconstruction along lines of Taiwan experience. Also joint U.S.-VN defense board patterned after similar organizations in Philippines and Japan. Would appreciate your views.”

  1. Source: Washington National Records Center, RG 330, OSD Files: FRC 71 A 6489, Viet 091. Secret. Signed “Ed”. Copies also sent to McNamara, Heinz, and Levy.
  2. Not found.
  3. Not found.