12. Memorandum From the Deputy Director of the Policy Planning Staff (Johnson) to the Director (Rostow)1

[Here follow items 1 and 2.]

[Page 22]

3. U.S. Economic Program for Viet Nam. Despite regular pressure by me, General Taylorʼs staff and a member of the Task Force staff, Washington still did not, as of last week, have a clear picture of what kind of economic programs are planned by the USOM and Country Team (or Task Force Saigon as it is called) to complement the new military and political effort. Last week AID did receive a 300-page statement on the FY 1962 program2 and, at my urging, plans to prepare a summary of it for general distribution. The first impression of those who have seen it is that it is not a carefully worked out selective program, but rather a general compendium.

The general feeling in Washington seems to be that the USOM tends simply to retail to Washington the proposals it receives from the GVN. A particular aspect of the program which may be subject to this criticism is Diemʼs road program which the field now proposes that we support. I was assured by the Deputy Director of the USOM who was present at the last Task Force meeting that the MAAG had carefully reviewed the program and concurred in it. However, a member of a military civic action team who talked to a Task Force group last fall was quite critical of the road program both on the general grounds that it was much beyond GVN capacity and on the more specific grounds that past GVN road planning had left much to be desired.

Somehow, the Task Force needs to get hold of the economic program and attempt to make some sense of it. One problem in this regard is that, for understandable reasons, the Taylor report3 did not contain specific recommendations in this area, though it did contain a discussion of possible areas of concentration.

4. Other Programs in Viet Nam. Among the other important programs in Viet Nam on which we still lack much evidence of progress are the military civic action program and a Montagnard program. In both cases, I believe, a U.S. proposal has been submitted to the GVN and we are awaiting a response. I am not clear on the status of reforms in the intelligence area though I know that some progress was made initially. The problem of command structure is discussed just below.

5. How much more failure of performance do we tolerate from Diem? We have recently recommitted ourselves to support of Diem. While this was necessary and proper under the circumstances, we must, if he now fails to perform adequately, give serious consideration to alternatives to him. The situation in Viet Nam is too precarious to permit a prolonged delay in making such an assessment and determination.

While no single factor can be made the basis for decision, programs on the problem of command structure is central. If Diem refuses to yield any significant authority over military operations to his military [Page 23]commanders it will be very difficult to mount effective operations against the VC. As you know, Diem promised to take action, but his conversation with Nolting at the time that the recent agreement was consummated cast considerable doubt on his real willingness to act. (I prepared a paper4 which is in my files on alternative coup situations that may develop and how we should react to them. Walt Rostow sent this paper to State where it was favorably received by those concerned.)

[Here follows the remainder of the memorandum.]

  1. Source: Department of State, S/P Files: Lot 69 D 121, R. Johnson Chron. Secret. Johnson, who had just left the National Security Council Staff for the Department of State, indicated in a covering memorandum that he had prepared the study in an effort to fill in his successors in the NSC and that it provided a picture of where the United States stood on various issues at the time.
  2. Not found.
  3. See Foreign Relations, 1961-1963, vol. I, Document 210.
  4. SeeForeign Relations, 1961-1963, vol. I, Document 292.