Foreign Relations of the United States, 1961–1963, Volume IV, Vietnam, August–December 1963

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

Washington, September 20, 1963—7:40 p.m.

447. Eyes only for the Ambassador. No other distribution. Re your 544,² para 5. Although not sanguine our search any more successful than yours following recaps our thinking on possibilities for use of aid (additional to our 435)³ as means of exerting pressure on GVN for accomplishment our objectives without interfering seriously with war effort:

1. USOM Saigon could require written guarantees from GVN agencies that AID equipment provided hereafter not be used in actions of repression.

2. USOM Saigon could terminate support of those elements of the combat police and the GVN Director General of Information not being used against Viet Cong.

3. USOM Saigon could withhold participation in the hamlet militia leader training program so long as directed by Colonel Tung.

4. USOM and/or MAAG Saigon could withhold quarterly release of plasters to Department of Defense PsyWar for its publications pending positive indication these funds will not be used to support repression or publicize the Nhus favorably.

5. You could inform Diem that you have given instructions to Richardson to suspend immediately payments to all projects serving currently politically repressive activities.⁴

6. We recognize that such steps would mainly serve purpose of exerting psychological pressure on GVN and would of course represent little in way of economic pressure.

7. On the other hand, continued suspension of new PL 480 sales, new CIP allotments and further procurement authorization under existing allotments will not only constitute political pressure on GVN when Diem is at your discretion made aware of what we are doing, but also likely sooner or later to have economic consequences which may adduce further pressure on GVN. Economic consequences could be a) triggering speculation, hoarding, price rises not justified by current supply, budget, or reserve situation, or (b) actual supply shortages and decline plaster counterpart contributions to budget in 3-8 months as present pipeline runs out. (Unfortunately we may thus unavoidably hurt our friends among Vietnamese people to some extent.)

8. You may also wish consider advisability of acquiring substantial cash resources in plasters for possible use in providing direct support to counterinsurgency program in provinces if that becomes desirable.⁵

9. In addition, DOD study among planning papers being pouched concludes that direct support of armies in field bypassing Saigon is technically feasible and line of communication could be so reoriented in about thirty days.

10. Our judgment is that continued inaction on aid matters (excepting necessary counterinsurgency) would not produce any immediate serious economic consequences because of size of pipeline and GVN reserves. On other hand, might generate significant psychological pressures on GVN thus strengthening your hand and general posture of the US with Vietnamese people.

11. Want to emphasize above is partial list. AID Washington staff has prepared a checklist of all possible AID actions assessed in increasing order of impact on GVN (included among the planning papers being pouched).⁶

Rusk

1. Source: Department of State, Central Files, AID (US) S VIET. Top Secret; Immediate. Drafted by Hilsman and cleared with Forrestal, William Bundy, and Janow of AID. On another copy of this telegram there is a marginal note indicating that the President read it. (Kennedy Library, National Security Files, Vietnam Country Series, State Cables)
2. Document 130.
3. Telegram 435, September 18, provided the Embassy in Saigon with current thinking on the status of U.S. aid to South Vietnam. Since August 22, the telegram noted, all new significant aid to Vietnam was being withheld as well as travel of AID personnel to Vietnam. The telegram described this action as a “slow fuse” which could eventually have massive impact on supply and the budget of South Vietnam. It was another thing to consider cutting “the continuous almost daily flow of aid based on earlier commitments and orders.” The Department asked Embassy personnel to discuss with the USOM Director all “pending aid program actions.” (Department of State, Central Files, POL 27 S VIET)
4. In telegram 609 from Saigon, September 28, the Embassy submitted comments by Richardson on paragraph 5. Richardson noted that the number of CIA programs being used by the Diem government for repressive political activities was “actually rather limited.” Any cutback by CIA, in Richardson’s opinion, would “have only a pin-prick effect unless accompanied by cutbacks in the programs of the larger American agencies in Saigon.” (Ibid.)
5. In telegram 609, September 28, the Embassy submitted comments by Richardson on paragraph 8. Richardson stated the CIA capability for purchase of plasters “was not unlimited” and he doubted direct payments could be made to the provinces, bypassing the central government. The only case in which such a plan might work was if a Corps Commander declared his opposition to the central government. (Ibid.)
6. Not found.