291. Telegram From the Department of State to the Embassy in Vietnam1

355. Thuan visit thru September 20. During his calls on US officials thus far following points were stressed to Thuan:

Assurances of continuing US support and guarded optimism re progress in Viet-Nam.
Serious US concern on question GVN representation Laos.
Probable drastic Congressional cuts in aid bill repeatedly brought to Thuanʼs attention. However, no suggestion that Viet-Nam program will suffer.
Hopes that GVN would make every effort alleviate tensions with RKG with as first step visit of GVN Cabinet Minister or General to Phnom Penh.
Importance avoiding serious frictions between GVN and US press reps.
Agreement with Thuan that International Development Association be encouraged make funds available to SOFIDIV.
Awareness of financial sacrifices and reforms being made by GVN, assurance that US would keep close watch on GVN financial situation, but clear indication that a) AIK charges on GVN could not be reduced now and b) third country counterpart funds could not be made available to GVN without US legislation which not now feasible.
Importance finding all means using US agricultural surpluses.

Among points emphasized by Thuan were:

Provided adequate US support continues DRV can probably not defeat GVN by increased military effort and hence likely apply more and more political pressure for conference on Viet-Nam. (In 1959 Ho [Page 667] hoped defeat GVN in one year, his estimates have now risen to 15-20 years and he has allegedly indicated to Indian Chairmen that DRV prepared negotiate with GVN.)
GVN successes in delta and importance of Montagnard swing to GVN.
Importance of crop destruction program. (He received scant encouragement and was questioned closely as to whether it would be possible destroy VC crops without hurting Montagnards.)
GVN compliance Staley recommendations, particularly currency reform, increased tax collections and deficit financing. This connection sharp fall in GVN foreign reserves stressed.

Thuan has received sympathetic hearings on the Hill and from high level officials Executive Branch. He will see as much as possible of press during remainder his visit.

  1. Source: Department of State, Central Files, 033.51KII/9-2262. Secret. Drafted by Wood. Repeated to CINCPAC.