264. Telegram From the Embassy in Vietnam to the Agency for International Development 1

Toaid 555. Joint Emb/USOM message. Ref: Deptel 254.2

We have under intensive examination the questions cited in reftel. Action is anticipated in certain functional areas soonest with others subject to initial review and/or planning.
We believe urban areas should share with rural communities in allocation of efforts to bolster confidence in GVN and its program. To that end Saigon-Cholon becomes critical target with its large share of nation’s population and total economic activity. At same time current unemployment represents fertile area for VC agitation and action.
USOM is therefore initiating action looking towards formulation of comprehensive development program for Saigon-Cholon which could be carried out on time-phased basis over period of years. Initial effort would probably involve slum clearance and extensive housing program. Target date of August 20 set for development of ideas as to how program could be carried forward.
USOM also plans move ahead immediately on work necessary to put fifteen hospital suites in operating condition soonest. OICC will supervise project with MOH doing work. Project financing being worked out simultaneously. Concurrent action by GVN in reorganizing MOH and establishing budget required. Close coordination now exists between USOM, Public Health and MOH in all aspects of project. Hope actual work on suites plus water and power supply can be undertaken within 30–45 days, with first suite ready to accommodate next arriving surgical team late fall. Every effort will be made to accomplish this task at earlier time if possible.
Re sites for concentrated effort in Kral area or areas, USOM now determining most feasible location for such activity. Findings will be reviewed for strategic or other considerations. When this completed will develop plans with GVN for implementation. Expect plans crystallized in 30–45 days.
Greater exercise of selectivity in determining locale of effort to distinguish between GVN-controlled and other areas foremost in our thinking. This makes urban effort doubly attractive. At same time, well drilling and other more far-flung activities being reviewed to examine possibility and feasibility of concentration along lines you outline.
We share feeling that formulation and scrupulous conduct of politically attractive and economically feasible land policy has great value to overall effort. This problem being studied and discussions with GVN will be undertaken soon.
Ever-present problem in all above matters is need to bring GVN along with our thinking. GVN must in all cases be implementing body with assistance from us. To this problem, major US effort being directed.
Outside framework of above matters, we are also considering some one-shot operations involving supply problems that would underscore in appealing way US support for Vietnamese people and their problems. More on this later if preliminary review indicates favorable prospects such action.
  1. Source: Department of State, Central Files, AID (US) VIET S. Secret; Priority; Limit Distribution. Received at 11:12 a.m.
  2. Document 246.