Office of the Historian

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

Washington, May 1, 1963, 4:29 p.m.

1024. Joint State/AID. Embtel 959,2 If Thuan’s conversation can be translated into agreement believe this best available resolution difficult situation. You authorized seek memorandum of understanding along lines procedures contained reftel.

Depending on your judgment of current atmosphere you should decide whether or not seek add to memo understanding statement that funds adequate to cover local costs of all provincial plans approved by Interministerial Committee and COPROR will be deposited in specified increments in advance of requirements.

If helpful to your efforts you may inform Thuan that you have been instructed achieve broadest possible list of activities eligible for special Treasury fund financing to include if possible all activities under province administered plans regardless whether included in section A1 attachment March 18 letter3 or subsequently added on grounds this necessary insure most efficient flow our dollar commodities. Alternatively it may be preferable simply submit list to include all activities in province administered programs whether or not in March 18 letter.

May we assume Province Chiefs will be able to draw upon special Treasury fund against approved plans without need for clearance from other GVN agencies? Would appreciate whatever clarifications you may obtain re special Treasury fund.

While we have no objection to joint review of USOM administrative costs, memorandum should not derogate from U.S. rights under Section 1, para 3 of Annex to Bilateral of September 7, 1957, requiring GVN to finance administrative costs from counterpart account. Notification under para 3 of Annex to Bilateral could provide for nature and mechanics of review to be made this instance.

Ball
  1. Source: Department of State, Central Files, AID (US) S VIET. Secret; Priority; Limit Distribution. Drafted by Montgomery and Poats and cleared by Wood, Donald L. Woolf in SEA, Robert W. Barnett and Hilsman in FE, Fowler in AID, and Kent in DOD/ISA. Repeated to CINCPAC for POLAD.↩
  2. Document 101.↩
  3. Document 61.↩