Foreign Relations of the United States, 1964–1968, Volume IV, Vietnam, 1966

18. Telegram From the Embassy in Vietnam to the Department of State ¹

Saigon, January 12, 1966.

2503. For the President from Lodge. Herewith my weekly telegram:

1. Outlook for 1966.

This is the period before the Vietnamese new year and may be a good time for a backward glance, and a look ahead.

2. The change in the situation here since your decision to commit U.S. troops has been spectacular.

3. Before your decision, we were at a smoldering stalemate which was gradually slipping us over the edge. The GVN was even worrying as to whether it could survive or would be forced to give up. The politically minded Vietnamese, being unsure of our position, were trying to make hedges for their own future, with government instability the result. There was real worry as to whether the Viet Cong would succeed in cutting the country in two and setting up a separate “capital” at some place like Kontum or Pleiku. The VC main force units were absolutely impregnable in their jungle underground redoubts and could be counted upon always to destroy the governmentʼs efforts to rebuild the countryside and eliminate terrorism. Underlying all these troubles was the doubt as to whether or not we would stay.

4. Your decision signified an American commitment and, after it, the Vietnamese said to himself in effect, “If the Americans can commit themselves, then I can commit myself.” The present government has thus been in power more than six months instead of the three weeks that was predicted (to be sure, no predictions can yet be made about government stability). Our military have learned how to cope with the main force units of the Viet Cong and with the redoubts, which has created an unprecedented opportunity for pacification and rebuilding the countryside. There is ground for some solid satisfaction because of signs of demoralization of the Viet Cong, which is reflected in the highest monthly total of defections on record during November. If the above paragraph were a complete report, we would all be feeling pretty good today.

5. But on the unfavorable side is the entrance of the Army of North Vietnam into South Vietnam. This has transformed the nature of the war. It is in effect a new war. I believe, however, that while this can delay success, it cannot prevent it. The VC main force and the NVN Army, [less than 1 line of source text not declassified] as of January 6, aggregate about 43,630—about 25 percent of the total Communist manpower. We know much more about how to handle the Communists militarily and we also have made progress on a formula for dealing with Communist subversion/terrorism by means of pacification and rebuilding the countryside. If, therefore, we remain steadfast, I look for fundamental progress in 1966—decisive, perhaps, in the strictly military field and solid achievement as regards pacification.

6. You can thus take tremendous satisfaction from your decision of last summer. Even the bad part—the entrance of the Army of North Vietnam into South Vietnam—is still a direct consequence of the fact that your decision created a favorable balance which they simply could not redress by Viet Cong troops from South Vietnam. Their only chance, therefore, of winning the war was to bring in the soldiers from outside the country. This is a real escalation of the war, and it is grim for us. It richly justifies a new look at the whole scene, as you are wisely doing. But it entails grave risks for them.

7. Hanoi or Peking?

Thich Tam Chau is the head of the Buddhist Institute and by any standard is one of the very top Buddhists in Vietnam. I find him sagacious, well-balanced and politically minded. He comes originally from Hanoi and has many connections there, religious and personal. For various reasons, I have built up a very good footing with him over the years. Last week, he surprised me by saying flatly that the Hanoi regime would like to stop the war, and that it was Peking which is stopping Hanoi from doing so, and that Peking had enough influence to stop Hanoi. He felt we were making a mistake when we thought in terms of Hanoi and did not realize that the real problem was Peking. Nothing would ever be settled until we had solved “the problem of China.” He frankly did not know how to solve it but he knew that was where the trouble was. He also published the above in his newspaper.

8. Political.

The government plans to announce policies and programs for rural construction, a constitution, and the budget at a convention of the Armed Forces on the eve of the lunar new year holiday (Tet).

9. There were no overt signs of discontent among the Montagnards but the situation remained highly unsettled and potentially dangerous. The government has privately acknowledged the failure of its previous approach.

10. There has been increasing speculation among Vietnamese as to the basic objectives of the GVN and the US. Bill Moyersʼ statement referring to a direct US-Hanoi contact has caused concern/hope the visit of Secretary Rusk and Gov. Harriman will clarify the problem. It is potentially a great danger to the war effort.²

11. American reporters have also begun to speculate about serious differences between the US and the GVN on the issue of negotiations, and I have instructed everyone here not to discuss the subject with the press.

12. Economic.

Retail prices in Saigon rose to their highest level in the week ending January 3. The price increases reflected normal pre-Tet increases plus the consequences of Viet Cong action in cutting the road to Dalot, the center of vegetable production.

13. Dollar and gold prices, which had declined last week, returned to their previous high level.

14. Rice stocks on hand increased, reflecting both imports and increased deliveries from the rice-growing delta area which reached a three-year high in December. It is expected that there will be enough pork for Tet.

15. Military.

The level of Viet Cong activity declined during the week while combined Vietnamese-Free World task forces mounted major assaults in Phu Yen Province of Central Vietnam and in the Plain of Reeds southwest of Saigon. In the Phu Yen area, Republic of Korea forces inflicted heavy losses on the enemy while suffering their own first serious losses.

16. Statistically the total of Viet Cong incidents dropped from 1,133 for the preceding week to 973. Of this total 17 were attacks or ambushes while 645 were acts of terrorism. The remainder were acts of sabotage, propaganda or anti-aircraft fire.

17. The total number of returnees under the Chieu Hoi program dropped from 705 to 484, a figure which included 285 military and political cadre.

Lodge

1. Source: Department of State, Central Files, POL 27 VIET S. Secret; Nodis. The source text does not indicate the time of transmission; the telegram was received at 9:33 a.m.
2. In his memorandum forwarding Lodgeʼs telegram to the President on January 12, McGeorge Bundy commented that paragraph 10 “argues against a direct reference to our contact with Hanoi in the State of the Union.” (Johnson Library, National Security File, Memos to the President—McGeorge Bundy, vol. 18) Regarding Moyersʼ statement, see footnote 8, Document 16.