93. Letter From the Vietnam and United States Special Financial Groups to Presidents Diem and Kennedy1

Although the letter and the attached report, not printed here, are both undated, the letter was probably signed by Thuc and Staley on July 14, the day the Staley mission departed Vietnam. Staley’s appointment book indicates that the two men held their final meeting on that day and issued a joint communiqué. Staley’s appointment book and a copy of the communiqué are in Staley Papers, Palo Alto, California. Staley later recalled that he had signed the report during the final meeting with Thuc. (Department of State, Office of the Historian, Viet-Nam Interviews, February 16, 1984)

The Viet Nam and United States Special Financial Groups charged with considering the means of further cooperation between their two countries for mutually shared purposes have the honor to propose to their respective governments the attached joint program of action.

Viet Nam is today under attack in a bitter, total struggle which involves its survival as a free nation. Its enemy, the Viet Cong, is ruthless, resourceful, and elusive. This enemy is supplied, reinforced, and centrally directed by the international Communist apparatus operating through Hanoi. To defeat it requires the mobilization of the entire economic, military, psychological, and social resources of the country and vigorous support from the United States.

The long-term economic future of Viet Nam is bright. In fact, the promising start already made toward improvement in the living conditions of its people appears to be one of the factors which precipitated the recent intensification of Communist pressure. The contrast between the achievements of recent years in South Viet Nam and the hardships and failure in Communist North Viet Nam was becoming too glaring. Given the means to throw back the Communist attack and to resume its march of economic, social, and political progress, Viet Nam can be an example in Southeast Asia for the progressive potentialities of men who are determined to remain free. We strongly urge that our two governments make this the purpose of their continued cooperation.

At the moment, however, the primary problem is the restoration of internal security in the face of tough, widespread, externally aided Communist guerrilla warfare and subversion. To meet this problem requires stepped-up military and policing action. But the problem is more than a military problem. Its solution also demands stepped-up economic and social action, especially in rural areas, closely integrated [Page 222] with the military action. For example, one of the more promising counter-guerrilla methods tried up to this time involves regrouping scattered rural populations into more readily defensible communities so designed and assisted as also to offer improved opportunities for livelihood.

Recognizing this close interdependence of the military and the economic-social problems, we have based our recommendations on the following three central considerations:

The military-internal security requirements must for the time being have first call on Viet Nam’s manpower and economic resources and on U.S. assistance. This is a short-term but essential requirement.
At the same time, the degree to which the military-internal security operations achieve lasting success will, in large measure, depend on the speed and effectiveness with which the recommended emergency economic and social programs are applied.
The ultimate objective of these economic and social programs and of the longer-range development planning which we also recommend is to hasten the day when Viet Nam will be a self-sustaining economy and a peaceful, free society. This is desired by the Vietnamese, who want to be independent in the fullest sense, and by the Americans, who conceive their aid as helping people to help themselves toward a condition where they can continue to progress by their own efforts.

The recommendations which our two groups, working jointly together, have thus prepared call for major increases in the level of effort of both Viet Nam and the United States.

These increases reflect our sincere conviction that the subversive, intensive warfare being waged today in South Viet Nam can be brought to a successful conclusion only by the prompt application of effective military power, coupled with large-scale economic and social action reaching every part of the country, especially the rural areas. From the financial standpoint, we believe it far less costly to provide fully adequate resources today than to attempt to match Communist initiatives with just enough strength to meet each new threat. The first course offers a real possibility of early victory and thus an end to the tragic waste of human life and of the material assets so sorely needed for the economic development of the country. The second, while less costly in terms of current budgets, will not provide sufficient resources to achieve a decisive defeat of the Viet Cong organization and therefore will, in the long run, prove more expensive as the war drags on with increased intensity year after year.

Accordingly, the intensified program which we recommend our two countries adopt as a basis for mutual actions over the next several years is designed not just to hold the line but to achieve a [Page 223] real breakthrough. Our joint efforts must surpass the critical threshold of the enemy’s resistance, thereby putting an end to his destructive attacks, and at the same time we must make a decisive impact on the economic, social, and ideological front.


Viet Nam Special Financial Group U.S. Special Financial Group
Vu Quoc Thuc, Chairman Eugene Staley, Chairman
Duong Tan Tai Colonel Edwin F. Black
Dinh Quang Chieu William W. Diehl
Huynh Van Diem Paul F. Geren
Luu Van Tinh Herman Kleine
Buu Hoan Warren A. Silver2
  1. Source: Kennedy Library, National Security Files, Regional Security Series, Southeast Asia-Rostow Report Second Try. Secret. The attached report, along with this covering letter, are printed in United States-Vietnam Relations, 1945-1967, Book 11, pp. 182-209.
  2. Printed from a copy that bears these typed signatures.