81. Telegram From the Embassy in Vietnam to the Department of State1

882. CINCPAC for POLAD. Embtels 852,2 790; Deptel 869.3 Herewith a report of failure to persuade or move Diem on counterinsurgency [Page 208] fund issue. In the past, he has been known to change his mind after digesting some hard facts. He may do so this time, but I rather doubt it. Certainly he gave no indication of so doing in course of three and one-half hour discussion Thursday evening.4 In writing this, I am gravely concerned and perplexed. I believe I used all the ammunition and personal persuasion I had, without apparent result. He seemed stoically prepared to accept all consequences of his decision, was relatively relaxed and rather philosophical throughout, and gave the impression of one who would rather be right, according to his lights, than President. He was evidently braced for this session, well prepared on details, courteous but immovable.

Several previous talks with Thuan had revealed increasingly stubborn objections by Diem, stimulated by Nhu, to our long-standing proposal which had, according to Thuan, previously received Diem’s approval in principle. I insisted on carrying matter to President after Thuan finally reported his failure to convince him and after discussion of issue and my instructions with Harkins and Brent.

I shall try to give essence of long discussion with Diem as accurately as possible, since I believe situation now confronting us represents another perplexing turn in GVN policy with far reaching implications for American policy. I have considered possibility of his having misunderstood either proposal itself or consequences of his refusal, and I do not believe he is under any misapprehension or misunderstanding. He is apparently sincerely convinced (though erroneously in my judgment) that Americans, particularly at lower levels and in all branches of GVN activity, are, by their very number and zeal, creating within the governmental structure of the GVN and among the population the impression of assuming an American “protectorate” over SVN. He recognized repeatedly that this is neither our aim nor our desire and expressed great gratitude for American generosity and intentions, but stuck to his conviction that having so many Americans here is creating the impression of a U.S. protectorate. Relating this to our present proposal for counter-insurgency fund, he insisted that our proposal would perpetuate too close a relationship in financial and procedural matters, particularly on the civil side, would undermine the authority of his government and its ability to make unimpeded decisions, and thus play into the hands of the Communists.

I told Diem that I could not accept his argument. I felt he must have been misinformed by persons who, for some ulterior motive, were trying to break the close working relationship between the GVN and us which had produced (and he admitted it) such measurable and encouraging results over the past months. I pointed out to him that it was he who had asked for, and received, American assistance in the [Page 209] very forms requested, without intention or act on our part to infringe his government’s sovereignty. I asked him to consider carefully and give me his answer. Did he want to eliminate American help and advice at this critical time? His reply was “not eliminate but reduce” (referring, I am sure, to the advice, not the material aid). He insisted that the “men at the top” of our mission understood the psychological and political problems, but that many junior officers among such a large and increasing American contingent did not, and were prone to insist upon their own ideas when they did not have sufficient experience of the country, its people, its traditions, and its way of doing things. He said that the resulting frustration on the part of some Americans was the root cause of a great deal of unfavorable publicity, and of much uncoordinated reporting to Washington. So many Americans were confusing and disrupting the functions of the GVN, he said, particularly at the provincial and district level. He elaborated on the well-known problems of government here. He said that he had two kinds of officials in the provinces: those with a “colonial mentality” and a new generation of nationally-minded officials. He claimed that U.S. advisors (particularly certain U.S. AID rural affairs [garble] intelligence advisors, psychological and propaganda advisors, and military sector advisors) cause difficulties in the case of the colonial-minded officials by assuming their responsibilities with their concurrence, and in the case of the nationally-minded officials by insisting too much upon their own views and causing delay and confusion. He claimed that the Minister of Interior, and he personally, had received many complaints on this score from provincial officials.

I challenged him to document this, and he went into many alleged cases, ranging from disputes as to where small canals, roads, bridges, etc., should be placed, to conflicting ideas on strategic hamlet construction, to the unwitting stimulation of corruption of Vietnamese local officials when American money was passed out. On the subject of corruption, I told him of one instance known to me where an American advisor had caught a province chief red-handed in overpricing material for a strategic hamlet, and that it was my impression that the presence of Americans had resulted in considerably less chiseling than would otherwise have been the case. He admitted this, and said, as he has done frequently in the past, that we should report to the Minister of Interior any case of corruption and he promised that it would be investigated and dealt with.

In the course of the discussion, I told him that my government and this mission had tried to get the very best people we could for all branches of our mission. They were hand-picked, experienced people, with dedication and good judgment; if these people were creating difficulties of the kind he described, I could not have any hope that a different set of Americans would do any better. I told him I thought [Page 210] that he had been deliberately misled and misinformed. The first serious criticisms I had heard along this line-and these only recently had come, I said, from his brother, Ngo Dinh Nhu. I asked him whether he had carefully checked the sources of his information and warned him that there were many Vietnamese, both Communist and non-Communist, government and non-government, who might wish to mislead him into this vital mistake. He replied calmly that he relied a great deal on his brother, that he could not do all the work himself, and that he trusted his brother’s judgment and integrity. He was convinced that what he had said, as ungrateful as it sounded, ought to be said for the sake of the country. He took full responsibility for the decision.

I told him he must realize he was striking at the root of our joint cooperative effort, at what had been freely agreed between him and President Kennedy after long and hard consideration; that it would be impossible, particularly given the trend of U.S. Congressional and public opinion on the subject of Vietnam, for us to hand out the money and equipment without genuine cooperation and team-work, including advice but not ultimate control, in its effective use. This, I said, applied not only to funds and equipment for economic and social purposes in the rural areas (and I reviewed for him these amounts and sources) but also to other American aid, including military. I read to him relevant portions of reftels, and he understood I told him this was a real test of confidence and that I would not recommend, nor would Washington approve, a one-way street on confidence.

This led to a rather philosophical discussion by him of the problems of American aid policy, during which he said inter alia he thought it was the most generously motivated thing in history but that somehow we had not yet found the key for its most effective use, particularly in highly sensitive, ex-colonial, underdeveloped countries. He did not go so far as Nhu has sometimes gone in telling us how we should spend our money, but he did stress the point of giving the recipient country more elbow room to run its own affairs and develop its own institutions according to its own background and traditions. I told him bluntly that this attitude would only arouse suspicions at home, as it did in my own mind, about the political motivations of his government. Was he really working for the benefit of the people or, as his critics charged, to perpetuate his own regime? He responded quite calmly, “look at the record of what I have done and tried to do for the Vietnamese people during the past eight years”, and went into a long history of land development centers, agricultural credits, (both of which he claimed were opposed in one way or another by American advisors at the time), and other social and economic programs. I referred at this point to a trip I had made the day before to An Giang Province, mentioning the large number of refugees who had come [Page 211] over to the government side and the measures being implemented to feed, house, and rehabilitate them. I said these joint GVN-US efforts seemed to me to be working smoothly and effectively there as elsewhere; that security in that area as in many others had been greatly improved and morale lifted. I remarked that I had noticed especially how the children gave the Americans a friendly signal and grin and certainly, even in that VC influenced area, showed no hostility. Diem said rather sadly, “yes, that is often the case. That is what I meant by the colonial mentality of the Vietnamese people. I have complaints from my own officials in those areas to the effect that the people believe that the Americans are now the government and disregard the authority of my local officials.”

I tried to bring him back to the specific subject of the proposed counter-insurgency fund. I suggested that we could do something about specific cases where the advisory effort proved to be undercutting the authority of Vietnamese officials. It was clearly necessary, however, to establish an adequate and agreed piaster fund and procedures to carry on the strategic hamlet and related programs if the gains to date were to be consolidated and this struggle eventually won. This, I said, was a must from my government’s viewpoint. I reviewed with him the pathfinding procedures developed last year, President Kennedy’s hard decision (contrary to our balance of payments policy) to buy 10 million dollars worth of piasters, the successful experience to date with this fund and procedures. I reviewed with him the concept and origin of provincial rehabilitation plans; how they were developed by his own officials, screened and approved by Ngo Dinh Nhu’s Ministerial Committee on Strategic Hamlets, passed to the U.S. Committee on Province Rehabilitation with a request for support. I showed him that these plans were generally accepted by the U.S. committee without appreciable change, and that there were absolutely no grounds for the contention that the US was usurping planning and executive functions of the GVN at any echelon. He admitted this, but insisted that some of our people in the field, particularly on the civilian side but also some sector advisors, were undoing the good work done by the committees, creating interference and playing to the colonial-minded Vietnamese and hence into the hands of the VC. Upon my insistence upon specifics, he finally said he felt the real trouble was that we had too many people here, advising in too much detail on too many matters, and that the remedy was to gradually cut back the number of people, thus “restoring control at the top”. I told him that I could not accept the implication that our people were freewheeling and out of control nor that there was uncoordinated reporting. I did not think it was true. We certainly had no desire to flood his country with Americans, and there might be some possibility of reducing the number; but certainly, considering our investment here, we [Page 212] had to have eyes and ears, as well as an advisory voice. Our support in its present dimensions would not be possible otherwise. With respect to the subject fund, we were asking two things: A commitment by the GVN to fill a limited gap for agreed counter-insurgency work, and procedures along the lines already proven to be effective. I asked whether his objections to this were financial, political or what. He said they are not financial; that the GVN was prepared to provide from its own resources or borrowings whatever seemed to it to be necessary to continue vigorously the strategic hamlet and rural development programs.

It could not, however, accept an American voice or control over the GVN’s own resources. This, he said, would be interpreted throughout his government and by all Vietnamese as Vietnam’s becoming a “protectorate”. I pointed out that we were in fact under this proposal asking for a voice with respect to about 1.3 billion piasters of Vietnamese origin, whereas the GVN had been exercising for years a voice-and a predominant one-in the expenditure of U.S. funds now running at the rate of some 36 billion piasters per year. I found it impossible to accept his reasoning. He said simply that this was one of the problems involved in giving aid. I asked him what he intended to do. Did he wish to abolish the present procedures for approving projects and dispensing funds in the provinces? He said that he did not wish to abolish those procedures insofar as U.S. funds were concerned, but he could not see his way clear to extending them over GVN’s own funds. I said this was the nub of the problem, and that we were not prepared to go ahead on the present effort unless it could be overcome. He said again that the GVN would supply adequate funds for counter-insurgency but had to have control of them itself. We could verify their expenditures had been made; GVN books would be open.5

Before leaving, I told the President, as a friend and a supporter of his, I was bound to say that his decision, in my opinion, would result in a downward spiral of Vietnam-American confidence, would result in curtailment of U.S. aid, and really threaten to wash out the gains made over the last year and a half. I asked him to reconsider. He said that he had thought hard about this matter, that he knew our policy was well motivated, but he could not accept this proposal. His reasons were in a nutshell that it would be considered by the Vietnamese people, both in form and execution, as proof of the establishment of a U.S. “protectorate”. I repeated that I could not accept his reasons and [Page 213] that, in my opinion, he was by this decision forcing a change in the policy of the U.S. Government towards Vietnam.

Comments follow.6

  1. Source: Department of State, Central Files, POL 26-1 S VIET Secret; Priority; Limit Distribution. Repeated to CINCPAC.
  2. Document 68.
  3. Telegrams 869 to Saigon and 790 from Saigon are summarized in footnotes 2 and 3, Document 68.
  4. April 4.
  5. A marginal notation at this point, in Wood’s hand, reads: “If we bought more piasters would it be all right?”
  6. Document 82.