287. Memorandum of Conversation Between the Assistant Secretary of State for Far Eastern Affairs (Harriman) and the Vietnamese Secretary of State at the Presidency (Thuan), Department of State, Washington, September 20, 1962, noon1

SUBJECT

  • Situation in Viet-Nam and Diplomatic Relations with Laos

I saw Thuan alone. He told me of his talk with FOWLER HAMILTON.2 He said he wanted to use the piastres which are normally used to repay our old MSP loans for a local development bank. He hopes Viet-Nam will be able to use our local currencies in Japan and elsewhere. This will be considered by Hamilton, but he thinks it will require legislation. He hopes we will help in getting a loan from the IDA. He feels this is very important because of our “Buy American” policy. This would give him some money to buy things that are essential in other markets.

He pointed out that we had given 160 million dollars in aid last year of which they could only absorb 140 million on account of the lack of availability of American products.

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He spoke of a triangular arrangement whereby the French would purchase rubber from our stockpile and release francs to Viet-Nam for aid purchases from France. He was sorry that Spain was off the prescribed list as they had been buying iron, steel and medical supplies from Spain. The addition of Hong Kong did not help very much, particularly on account of the certificate of origin problem.

Thuan said that he felt sure we would agree that the main measures recommended in the Staley Report3 had been carried out. He pointed out, for example, that the construction of schools in Saigon were of barracks-type construction, rather than permanent, and that the savings thereon would be used in the countryside. He said the village political situation had improved. The election of local officials had helped create better feeling. The Viet Cong were having difficulty in recruitment, more so than at any time in the past. He said that he thought the villagers were generally fed up with the Viet Cong.

He gave me some complicated figures about the officers training school. He said that this year they had the largest number they had ever had. There were two thousand spaces but 2300 had volunteered.

He pointed to the fact that for the first time in 15 years the price of rice had gone down at this time in the rainy season.

I asked him about the amnesty plan. He said they would try to get it through shortly, perhaps the latter part of October or November. He recognized it would have to be done carefully, at a time of success, rather than of setback.

Thuan thought the direction of their psychological warfare was working out better in agreement with the U.S. advisers. He was generally more optimistic now than he had been for some time.

We discussed the question of the press. I asked him what they were doing to get a better atmosphere. He said that the information setup was being reorganized for the press and they were having group trips for the foreign press to see what was going on in the country. He expressed suspicion of the reports of the visit in Hanoi of the Indian Ambassador, Head of the ICC.4

I spoke to him about Laos in vigorous terms. “We are trying our best to help you—now itʼs up to you to cooperate with us.” I said we couldn’t give him any guarantees, but their pulling down their flag in Laos set us back. We did not expect them to retain their Ambassador; they could leave their Charge. I said that if they had been realistic in the beginning, they could have found some way of having a representative [Page 659]from the North, rather than an Ambassador in Laos. He appeared to agree and said he would telegraph strong recommendations to Diem.

We talked about Cambodia at lunch. Thuan said it was pretty hard to take the insults which Sihanouk was piling on Diem—that he was a stooge for the Americans. I said that if President Kennedy could take it, I didnʼt see why Diem couldn’t. The important thing was to come to an understanding on the border problems in connection with the Viet Cong. I could not guarantee anything, except I believe if they sent an intelligent military officer to Phnom Penh he would get more cooperation on the Viet Cong border problems. Sihanouk had promised us that the Vietnam Mission could go “anywhere at any time.” If that promise were not carried out, we would certainly go to bat.

Sihanouk believed that both Vietnam and Thailand were conspiring against him. Thuan denied it. I replied that right or wrong, Sihanouk believed it, and that was part but not all of the reason for Sihanoukʼs explosions. Sihanouk had no intention of putting himself in the hands of the communists. I said Thuan could not neglect the fact that Sihanouk had only French and American military advisers.

Thuan told me when I spoke to him privately that General Harkins and the Viet-Nam military were getting along extremely well and so were their relations with Nolting. He thought the differences of judgment and opinion had been worked out to the satisfaction of both sides.

I had a word to say about improved political action, and he countered by saying that support of the peasants would come with security and the program for village improvement. He said it was impossible to buy much U.S. fertilizer because it was too expensive and the peasants could not afford it. I told him I thought the political and economic program for the villagers should keep pace with the military and hoped that would be kept in mind.

He said that Diem was not afraid of plots against him at the present time. There was no group behind the two Air Force officers who had bombed the palace.5 There had only been 13 people questioned. They were satisfied that the bombing involved only the pilots. He thought that with the changes in the constitution which were contemplated that some of the intellectuals would feel a bit better about the government.

  1. Source: Department of State, Central Files, 033.51K11/9-2062. Confidential. Drafted and initialed by Harriman on September 21. Copies were sent to FE, INR, EUR, Saigon, Vientiane, Phnom Penh, and CINCPAC.
  2. No further record of Thuanʼs talk with AID Administrator Hamilton has been found.
  3. See Foreign Relations, 1961-1963, vol. I, Document 93.
  4. On September 6 the Embassy in Saigon reported that the ICC had returned on September 4 from a 4-day trip to Hanoi during which the Indian Chairman, Goburdhan had been received by Ho Chi Minh. (Telegram 252; Department of State, Central Files 751G.00/9-662)
  5. Regarding the bombing of the palace on February 27, see Documents 87 ff.