The Pentagon Papers
Gravel Edition
Volume 2

Chapter 5, "US-GVN Relations, 1964-1967," pp. 277-407.
(Boston: Beacon Press, 1971)


Section 3, pp. 369-407


V. A REBELLION, A CONSTITUENT ASSEMBLY, AND THE HARDSHIPS OF NEGOTIATING WITH A "WEAK" GOVERNMENT

A. THE RISE OF THE STRUGGLE MOVEMENT, MARCH, 1966

General Thi, Commander of I Corps, was a thorn in Ky's side as a potential rival. Both private and public disagreements showed there was no love lost between them; and Thi had a considerable base of support in his connections with the Buddhist leadership and in his identification with Annamese sensitivities. These factors also made the other generals of the Military Directorate (formerly National Leadership Council, etc.) suspicious of Thi; they felt better able to cope with Ky.

Armed with President Johnson's public support of him, Ky resolved to exile Thi, and he persuaded his colleagues to go along with the idea in a meeting on March 10. The day before he told Lodge of his intention, saying that Thi had been culpably insubordinate; Lodge replied that he should be sure he could prove the charges, so as to put a good public face on the move, and pave the way carefully. Later in the day Lodge also advised him to make sure he had the votes in the Directorate, saying that for him to lose on the issue and be replaced as Prime Minister would be catastrophic. Ky was sure of himself, although he admitted he could not prove his charges. In a later meeting the same day, Thieu told Lodge Thi "had conducted himself in a way that was not suitable," and was confident Thi could be dismissed without ill effects.

On March 10, when the Directorate voted to fire him, Thi resigned. Ky told Lodge that Thi would go to Da Nang the 11th for the change-of-command ceremony and then leave the country for four months. The same day, Thi told Colonel Sam Wilson that he did not want to leave the country, and that he had been encouraged by the Director of National Police to stay; Wilson suggested that he go gracefully. On the 11th, when the time came for Thi to fly to Da Nang, he was detained at Tan Son Nhut; Ky had got wind of, or suspected, his intentions. Ky then urgently requested Lodge to invite Thi to the United States for a physical examination.

The Annamese Buddhists, led by Tn Quang, who had quietly bided their time for about a year, now entered the action. (Ky later told Lodge that Tn Quang had assented to Thi's dismissal and had then double-crossed him.) They began demonstrations in Da Nang and Hue on March 12, joined by the students, and over the next several days gained control of those cities as the police stood aside. Again Ky used Lodge's good offices to try to persuade Thi to leave the country gracefully; but the 16th, Ky and the Directorate decided to try to use Thi to restore order, and permitted him to return to Da Nang. For a few days things quieted down slightly, but the end was not yet in sight.

State offered Lodge suggestions on how to get things calmed down. First, he might counsel a firm attitude by GVN, saying it would meet with the Buddhists but not under threats, and that it would not permit disorders. Second, GVN might steal the initiative from the Buddhists by making a generous public offer of elections. Whichever course they followed, State wanted them to be sure it would work and would avoid a head-on collision with the Buddhists. In reply, Lodge agreed on the need to avoid a head-on collision; as for the means, he, like State, simply hoped for the best:

We should not settle on one solution or another. Rather it is possible, if not probable, that, unless uncontrollable mass reaction is brought about, each side will seek to arrange what can be looked upon as widely acceptable.

On March 22, Lodge and Ky had a long discussion of tactics relating to elections and constitution-writing. Elections were scheduled to come up for the largely powerless but symbolic provincial councils (which advised the Province Chiefs on policy matters), and Ky had reportedly toyed with calling off these elections. He was also far behind schedule on the constituent assembly he had publicly promised on January 19 for just after Tet, and as noted had privately promised the U.S. Government at Honolulu. Lodge reported:

2. . . . He is eager for advice and when he received it, he said he agreed with it. Now it remains to be seen whether it will be carried out.
3. My advice was based on careful reflection and consultation with my associates and was to this effect:
4. The GVN should not cancel provincial elections as I had heard reported. He said that this was not exactly the case; that there were two provincial councils, which didn't want elections. I said in that event these councils should he made to say publicly that they didn't want elections so that the onus of not holding these elections would not fall on the Government. A public announcement had been made that the Government was in favor of holding these provincial elections; the offices involved have little actual consequence but are of symbolic significance; Washington had been informed of this fact; and if there was some reason why in one or two provinces they should not be held, then the provinces should make the reason plain.
5. I then advised that he should take the lead and influence opinion, and not be at the mercy of events. I suggested that a list of names for so-called consultative assembly (which I suggested would be better named "preparatory commission") which aims to draft a constitution, should be confirmed by the Generals. When this had been done, I suggested that then Ky should make a very carefully written and persuasive announcement which would be done on film for use on television and in the movie theaters. The Vietnamese are great movie-goers and it is a very important medium here. I said that he should not read it on film with his head bobbing up and down as he looked down at the text, but should have it put on cue card along side the camera and read it as he looks right into the lens.
6. His statement should be written in such a way as not to exclude the possibility of elections later on for a constitutional convention. In other words, this should be deliberately fuzzed and left open by implication. I said I much preferred the phrase "constitutional convention" to the pernicious French phrase "constitutent assembly." The constitutiQnal convention would meet, adopt the constitution and disband, whereas the constituent assembly stays around and makes trouble for an idefinite period.
7. He agreed with all this and seemed to understand it. He said that last night, the Generals had unanimously confirmed the names of the members of the preparatory committee. He would announce all this as I suggested. I wish he would do it quickly.
8. I suggested that impulsive unprepared statements were most dangerous at this time. Experienced politicians often make statements which seem to be "off the cuff," but actually are carefully thought out. His unprepared statements always worry me.
9. He agreed with me that certain Buddhists were unwittingly taking Communist inspired advice, as were the students in Hue who had attacked me .
10. He was absolutely sure that the Buddhists were divided among themselves-an analysis which I share. He agrees with me that Tn Quang simply has not got the powerful psychological factors working for him now that he had in October '63. All the Communist Propaganda in the world cannot alter these facts: That in '63, the Buddhists were discriminated against, and now they are not; that in the latter days of '63 the Buddhists were persecuted whereas now they are not; and that Tn Quang was an underdog then, and now he is not. Yet Tn Quang is evidently determined.
11. My advice to him was not very drastic and quite simple to do, and yet I believe that if he follows it conscientiously and expeditiously without procrastination that there may be enough of a budding sense of National interest to start moving things along in the right direction.
12. He thanked me more effusively and warmly than he has ever done before and said he was so grateful for my interest in his welfare, physical and political.
13. The situation is not yet out of hand. Ky has had offers from Catholics and Southerners for them to enter the fray on his side and start throwing their weight around, which he so far has been able to prevent them from doing. This is one of the things which I have been fearing. I talked in this vein with the Papal delegate and the Archbishop of Saigon yesterday, and they agreed completely. The leadership of the Southerners is not, I fear, as responsible.

On March 25, Ky followed Lodge's advice more or less closely, and announced the Constitutional Preparatory Commission and said it would finish its work within two months; elections might follow by the end of 1966. However, he insisted that GVN would exclude "Vietcong or corrupt elements" from the elected assembly. The move failed to restore order. On March 26, demonstrators in Hue broke out anti-American banners written in English, and an ugly incident followed in which a Marine tore one down. (After detailed negotiations, an apology was given and accepted.) The radio stations at Da Nang and Hue fell under control of dissident elements.

On March 29, Ky told Lodge that he and the generals wanted to move on Hue and Da Nang with military forces, and said that he could show that an unpublicized Buddhists split had caused the uprising. Lodge concurred in Ky's plan to use forces, but urged him not to try to create an open breach among the Buddhists.

Although Lodge had no objection to using force against the Buddhist movement, both he and Rusk felt that U.S. men and equipment should stay out of it, to avoid heightening anti-American feelings. Rusk told Lodge of his deep concern about Vietnamese internal bickering at a crucial time; he was particularly disturbed by the anti-American propaganda coming from the Hue radio, which was physically defended by the U.S. Marines in that general area. He went on to say,

We face the fact that we ourselves cannot succeed except in support of the South Vietnamese. Unless they are able to mobilize reasonable solidarity, prospects are grim. I appreciate your frank and realistic reporting and am relying heavily upon your good judgment to exert every effort to get us over the present malaise.

Lodge replied that his influence with the Catholics had kept them out of it, but that his talks with Tn Quang had been unproductive. He estimated that Tri Quang had used the anti-American theme to put pressure on the GVN. (Through an intermediary the Embassy learned that General Thi said that the United States was too committed to leave; this belief may have led Thi and the Buddhists to feel free to use the theme as a weapon against GVN.)

On March 29, the Catholic leaders in whom Lodge had placed his hopes came out against the GVN and demanded a return to civilian rule.

B. KY'S FIRST ATTEMPT TO SUPPRESS THE STRUGGLE MOVEMENT, APRIL, 1966

Events now happened in rapid succession. Assured of Lodge's sympathy, on April 3 Ky declared that Da Nang was in the hands of Communists. On April 5, despite mild questioning from State, MACV airlifted two battalions of Vietnamese Rangers to Da Nang under personal command of Ky, and they started to seize the city. That same day the 1st ARVN Division Commander declared for the Struggle Movement, with his officers backing him, and U.S. advisers were withdrawn from the Division. On April 6, "non-essential" U.S. civilians withdrew from Hue. On April 8, the GVN flew two more Ranger battalions to Da Nang, using its own airlift after MACV refused to provide any. On April 9, U.S. representatives protested to Struggle Movement leaders about Howitzers under their control positioned within range of the Da Nang airbase; the leaders agreed to pull them back. Two hundred U.S. and third country civilians evacuated Da Nang.

Washington played little role in all this. From time to time it offered mild advice, but Lodge had a free hand. It was his decision to withhold any further U.S. airlift on April 8, although after he acted State agreed by urging him to push GVN toward a political rather than a military solution:

Accordingly we believe you should not repeat not urge immediate Da Nang operations at present, but rather that entire focus of your efforts at all levels should be to get political process started.

(It was at this time that Lodge wrote his long cable, discussed in the next section below, saying that the U.S. does not have enough influence in Vietnam, and that it should set up a leverage system that bypasses Saigon and works at the Province level.) Lodge accepted the fact of Buddhist power, and wanted to avoid bloodshed, but as always his sympathies were squarely with the military leadership:

The political crisis which has been gripping VN is now almost one month old. The situation has deteriorated steadily as the Buddhist opposition has increased pressure on the GVN.

Buddhist demands, when stripped of hypocrisy [and,] . . . boil down to a naked grab for power.

Throughout this period we have sought certain fundamental objectives:

A. To preserve the VN nation, and thus, the present government.
B. To provide for an orderly political evolution from military to civil government.
C. To preserve the Armed Forces as an effective shield against VC.
D. To guard and expand all our political, economic, social and military gains, notably those which flowed from the Honolulu declaration.
E. To maintain the effectiveness of the Free World forces in VN.

On April 12, GVN found a face-saving formula and withdrew its Ranger battalions from Da Nang to Saigon, and the streets became relatively quiet. On the 14th, the Directorate gave way to the demands for elected civilian government by promising elections for a Constituent Assembly within three to five months. For the time being the Buddhists and other political groups, while making additional demands, called off the demonstrations on condition that Ky honor his promises.

On April 23, Lodge reviewed for State all the leverage available that might be used to help bring the I Corps area under government authority, and rejected using any of it.

We have considered possibility of using U.S. control over economic and military commodities in I Corps to foster re-establishment of government authority in the areas.

The bulk of USAID-controlled commodities are scheduled for use in rural areas. Comparatively little anti-government activity is carried on by the rural population....

The Hue-DaNang area currently is relatively well stocked with basic commodities. There is an estimated four month supply of rice on hand and the countryside is now starting the harvesting of a rice crop....

The U.S. currently controls, through the USAID, the following: (A) Warehouses in the part of DaNang containing quantities of construction material and PL-480 foodstuffs . . . (B) Three deep draft vessels and one coastal vessel now in the DaNang harbor with CIP cement, rice, fertilizer, and miscellaneous commercial cargo . . . (C) Nine chartered coastal vessels . . . operated for USAID.....

With respect to military commodities, RVNAF maintains a 30-60 day supply of expendable combat items while their rice stocks are maintained at a 30-day level. However, under rationing these rice stocks can be extended to 60 days. The RVNAF items which are in short supply throughout Vietnam, as well as in the Hue-DaNang area, include vehicle batteries, brake shoes, and POL. We consider it unwise to interfere with the flow of supplies to RVNAF at this time since it would limit effectiveness of operations against Viet Cong forces....

Indeed any U.S. effort to withhold resources which it controls in this area may stimulate excesses by the struggle movement even though an attempt is made to conceal the U.S. role in the imposition of sanctions.

C. VIOLENCE EXPLODES IN MAY, 1966

After promising the elections by August 15, against Lodge's public disagreement, Ky said in a public statement on May 4 that "we will try to hold elections by October." In Lodge's absence, on a long trip to Washington, Porter protested privately to Ky that once he had made a public commitment on election timing he was risking further disorders to appear to shirk it. Nevertheless, Ky added to the flames by a further public statement that he expected to remain in office for another year. New disorders broke out, and DaNang and Hue again fell under overt control of the Struggle Movement. Without consulting the Embassy, the Directorate laid plans for several days and then on May 15 airlifted troops to DaNang and then to Hue.

State first reaction showed unrestrained fury, and sanctioned "rough talk" to stop the fighting:

This may require rough talk but U.S. cannot accept this insane bickering do your best in next few hours. Intolerable that Ky should . . . move.... against DaNang without consultation with us. Urgent now to insist that fighting stop.

State did not, at first, sanction the threat of force; for example, it said Gen. Walt should continue to harbor the dissident General Dinh in III MAF Head-
quarters, and that Walt should tell GVN he "can't foresee the U.S. Government reaction" if GVN forces should break into his Headquarters. Its overall guidance was to use persuasion, withdrawal of advisers, and a public posture of non-intervention, with the following specifics:

1. Announce that the U.S. was not consulted, gave no help. Ky's use of T39 routine, "not material assistance."
2. Furnish no airlift.
3. Withdraw all advisers from I CTZ, including from loyal GVN units, except for any clearly in position to fight VC. Keep U.S. forces out, except maybe to fight VC.
4. Inasmuch as withdrawal of civilians and military from DaNang in early April had a sobering effect, State authorized withdrawing them again (including combat forces).
5. Exception to 3: Keep contacts with Thi and 1st Division, and make other like exceptions. (Purpose of withdrawal is to avoid appearance of involvement.)
6. Use contacts to get a compromise that avoids bloodshed.
7. Find out "soonest" the effect on election preparations.
8. Do not throw U.S. weight behind GVN effort.

However, the "rough talk" actually used did reach the point of a clear threat of force. General Walt heard of a possible VNAF attack on dissident ARVN units in their compounds, and threatened to use U.S. jets to shoot down the VNAF aircraft if they did. (The pretext was that U.S. advisers would be threatened if they did, and did not apply to VNAF self-defense against dissident ARVN units closing on DaNang.) If such an attack was planned, the threat succeeded.

Porter followed State's guidance closely; he put it strongly to Ky and Thieu that the failure to consult was unacceptable, withheld airlift from GVN and withdrew advisers from units on both sides, and obtained from Thieu the assurance that the election would be held as promised. He refused to give public backing or opposition to either side, and tried to mediate. State sent several more messages with guidance along the same lines, and directed him to tell both sides of USG's impatience with Vietnamese factionalism:

The American people are becoming fed up with the games they are playing while the Americans are being asked to sustain such major burdens.

On May 17, a U.S. helicopter received small arms fire from a dissident ARVN unit when carrying a GVN officer to parley with them; the helicopter returned the fire, causing several casualties. In a stormy meeting the next day with Corcoran, the U.S. Consul in Hue, Tri Quang accused the U.S. of joining forces with GVN in attacking his people, and threatened violence against U.S. forces and facilities. Corcoran stood firm, saying that U.S. forces would defend themselves. State's guidance the same day, reaffirming the previous guidance, was to limit U.S. assistance to administrative aircraft, and then only when GVN had none available, to reassure Thi and the leaders of the Struggle Movement about U.S. support for free elections, to bring opposite sides (especially Ky and T'hi) to face to face discussions, and to intervene as needed to end the squabbling. On May 20, Tri Quang complained to another U.S. official about the administrative aircraft who pointed out to him that the U.S. also provided such aircraft to Thi and other dissident military officers. That same day a dissident leader threatened to attack GVN forces at DaNang, and State directed that he be reminded that the U.S. forces also in DaNang would have to defend themselves. State also authorized the threat of total U.S. withdrawal.

On Lodge's return to Vietnam at this time, he received detailed guidance from State, very similar to that previously given to Porter, for his first meeting with Ky. The guidance re-emphasized the demand for prior consultation by GVN before it made any important move, and directed him to urge GVN to be conciliatory and to use its forces with the utmost restraint:

1. We must have absolute candor from Ky as to his plans, and opportunity to comment before significant actions.
2. Tell him to leave pagodas alone, except for surveillance and encirclement.
3. Keep ARVN out of Saigon demonstrations.
4. Elections vs military role: Sound out.
5. Encourage election progress.
6. Keep GVN in contact with Buddhist leaders.
7. HelpKymeetThi.
8. Consider further the suggestion of withdrawal from DaNang and Hue.
9. Give us "your judgment as to whether we ought to move forcefully and drastically to assert our power" to end strife.
10. Suggest broadening the Directorate with civilians.

By this time, Ky had begun leaning over backward to consult Porter, and then Lodge, before every move. GVN forces overpowered roadblocks and controlled DaNang, but demonstrators were operating freely from pagodas in Saigon, and the Struggle Movement had absolute control of Hue, where in the next few days they surrounded and blockaded the consulate. In Saigon GVN followed Lodge's advice and neutralized the pagodas by surrounding them without violating them; but in the I Corps he was preparing to occupy Hue forcefully as he had DaNang. The Buddhists began a series of self-immolations. Amid mounting threats, the U.S. evacuated the consulate and its other facilities in Hue.

Lodge was unreservedly sympathetic to Ky, as in April, and viewed the Buddhists as equivalent to card-carrying Communists; but he followed instructions and pressed Ky to be conciliatory. When Ky would blurt out fire-eating statements and whittle down his previous promises on elections, Lodge would patiently urge him to avoid off-the-cuff statements and to limit himself to prepared statements on radio and TV. Lodge and Westmoreland repeatedly pressed Ky and Thi to get together, which they did on May 27; Ky offered Thi and Dinh unspecified Army jobs. State was gratified, but cautious.

D. KY RESTORES GVN CONTROL IN I CORPS, JUNE, 1966

One of the main subjects of Lodge's conferences in Washington was what the U.S. Government position should be on elections for the Constituent Assembly. Having finished deliberations and drafting after Lodge returned to Saigon, State cabled the principles it thought should guide the Mission's operations on election matters:

A. GENERAL PRINCIPLES OF U.S. ACTION

The U.S. Mission should seek to exert maximum influence toward the achievement of the substantive objectives stated in B. below. At the same time, this must be done with recognition that a key objective is to avoid anti-Americanism becoming a major issue; we shall be accused of interferences in any event, but it is vitally important not to give potential anti-American elements (or the press and outside observers) any clear handle to hit us with.

B. OBJECTIVES

1. Elections should be held as announced by GVN on April 15th, that is by September 15 of this year.
2. The issue of anti-Americanism should be kept out of the election campaign as far as possible.
3. The question as to whether the constitutional assembly will only have the role of drafting the constitution or will have some further function should not be allowed to become an active pre-election issue and the U.S. should take no position on this question.
4. The elections should be conducted so as to produce a constitutional assembly fairly representing the various regions and groups within South Vietnam (except those actively participating with the Viet Cong), including the Army, Montagnards, Khmer minorities, et. a!.
5. The elections should be conducted so as to gain a maximum improvement in the image of the GVN in the United States and internationally; this calls for a wide turnout, scrupulously correct conduct of the voting and counting process, as little political limitation on voter eligibility as possible and vigorous efforts to avoid voter intimidation from any quarter. Ideas to be explored are a brief election period ceasefire, international observation of the elections, students participating as poll watchers, etc.
6. The emphasis in the campaign should be on the selection of good men to draft the constitution; political parties are not expected to play a major role although the campaign may provide the occasion for laying foundations for future party organization.
7. Unless new developments change our assessment, major efforts should be devoted not to stimulating the formation of a large nationalist party but rather to the adoption of the concept that these elections bring together all non-communist groups who are pledged, among other things, to their country's independence and the continuing need to defend it with American help. Specifically, efforts should not be made to split the Buddhists or isolate the militant Buddhist faction.
8. The election process should be a vehicle for educating and engaging the population in the democratic process and it should be used to launch political and psychological initiatives with youth groups, students, labor, etc.
9. Restore as far as possible the unity of the Directorate and promote a reconciliation between Generals Ky and Thi. However, discourage efforts by the Directorate to form a government party designed purely to perpetuate the Directorate in power to the exclusion of other significant political groups.

At the end of May things seemed to settle down. McNamara sounded out the Embassy about a trip in early June, but Lodge talked him out of it on the grounds that it might tempt the Buddhists to start demonstrating again. Ky met Buddhist Institute leaders on May 31 and offered civilian participation in an enlarged Directorate. He reported that the Buddhists accepted this along with reassurances about elections, and agreed with Ky's new appointment of General Lam as Commander of I Corps. Lodge was skeptical:

The above is what Ky said and it stood up to questioning. It sounds too good to be true, and we will await next steps.

The next day, June 1, a mob of students burned the consulate and consular residence in Hue. When GVN forces prepared to move on Hue, the Struggle Movement filled the streets with Buddhist altars, serving as roadblocks the GVN forces hesitated to disturb, while dissident ARVN units deployed in the city.

The directorate's April 14 promise of elections of a Constituent Assembly on August 15 had led to the creation of an Electoral Law Commission, which the Buddhists boycotted as a result of the subsequent disagreements. The Commission presented its proposals on June 5, and they included several features unacceptable to the Directorate, especially those related to the powers and tenure of the Assembly. Ky reacted publicly on June 7, saying that if military-civil unity proceeded smoothly enough over the next few months it would be possible to postpone elections. Demonstrations continued in Saigon, while a combination of negotiations and force gradually brought Hue under GVN control.

On June 15, Ky made it clear that the Assembly would not be permitted to continue and to legislate after drafting a constitution, and that the Military Directorate would continue in power until promulgation of the new constitution and the seating of a subsequently elected Assembly in 1967. (Note that Lodge backed this attitude.) The Buddhist Institute called a general strike in response to the GVN declaration that June 18, the anniversary of the Thieu-Ky government, would be a national holiday. On June 19, the Directorate scheduled the elections for the Constituent Assembly for September 11, 1966. The announcement had a calming effect, and the disorders came under control within a few days. The approved electoral law gave the Directorate ample scope to exclude unwanted candidates, and prevented the Buddhists from putting their symbol, the red lotus, on the ballot. (Again, note Lodge's concurrence.)

On July 31, Thi went into exile.

E. REVOLUTIONARY DEVELOPMENT, MARCH-JUNE, 1966

To help implement the increased emphasis given pacification at Honolulu, President Johnson in late March appointed Robert Komer as his Special Assistant for "peaceful reconstruction." The creation of a high level focal point for pacification planning and coordinating had the effect of supplanting the interagency Vietnam Coordinating Committee (created in 1964 and originally headed by William Sullivan). Though Komer's charter was more limited than that of the VNCC, his direct access to the President conferred particular importance to this position. To his desk came the MACV and Mission reports on the progress of pacification that struck the same gloomy note month after month. The Status Report of March 30 on the Honolulu agreements said:

1. Assure that Province Chief actually retains op con over necessary military forces to support program in his Province. Status: In Long An Province two regiments of the 25th Division are under Province control. This is encouraging, but tactical situation elsewhere makes it difficult. MACV plans to augment regular forces by 120 companies in 1966-67 (approximately 47 will go to priority areas.) This augmentation if successful will be major step forward.

2. Areas where the program is underway and four priority areas in particular should be placed under superior Province Chiefs who should not be removed while program is underway without serious cause. Status: Since Honolulu, eight Province Chiefs have been replaced. Most fall within category mentioned by General Co at Honolulu when he said GVN was about to make several changes to strengthen their ability to achieve plans. The Mission continues to emphasize at every level the need for continuity, but in most cases it is dangerous for U.S. to go down the line in support of individual Province Chiefs.

The Mission report on the status of "Revolutionary Development" for April said:

RD remains behind schedule with progress slow. As reported in March, lack of effective leadership, military as well as governmental, marginal local security, and late availability RD cadre teams, continue to hamper program accomplishments.

The corresponding report for May said:

Lack of effective low-level leadership and lack of local security continued to have adverse effects on RD program . . . progress primarily reflects consolidation of hamlets and population already under a lesser degree of GVN control rather than direct gains from VC control. There was no appreciable expansion in secured area or reduction in VC-controlled population.

An incident in June highlighted the frustrations of U.S. field representatives, and showed that leverage could work, at least on procedural matters. In Kontum, the Province Chief flatly refused to set up any end-use control procedures (filling out requisitions, etc.) for USAID commodities. This refusal could not be accepted, and AID suspended all commodity shipments to the Province. After four days, the Province Chief gave in, and AID resumed shipments.

Meanwhile, the GVN was going nothing about its Honolulu promises in the areas of administration, economic reform, and dollar balances. There were several U.S. Government reactions to these failures and continuing weaknesses. There was a series of studies and proposals for leverage, and there was rising pressure for renewed direct negotiations with GVN.

An example of the studies was the U.S. Army's "Program for the Pacification and Long-Term Development of South Vietnam," (PROVN).
The PROVN study was completed in March 1966 by a Department of the Army staff team and briefed on May 17 at CINCPAC Headquarters during a visit by COMUSMACV to Hawaii. His comments at that time were that most of the recommendations already had been acted on. He emphasized that particular care should be exercised to avoid conditions which would cause RVN officials to be branded as U.S. puppets.

The study results were presented in the MACV conference room on May 21. In response to a JCS request, COMUSMACV commented in detail on May 27. He noted that PROVN recommended two major initiatives: (1) creation of an organization to integrate the total U.S. civil-military effort, and (2) exercise of greatly increased U.S. involvement in GVN activities.

COMUSMACV agreed with the first recommendation but felt it was already being accomplished. COMUSMACV agreed that immediate and substantially increased U.S. involvement in GVN activities, in the form of constructive influence and manipulations was essential to achievement of U.S. objectives in Vietnam. He felt there was great danger that the involvement envisioned would become excessive and boomerang on U.S. interests; U.S. manipulations could become an American takeover justified by U.S. compulsion to get the job done.

COMUSMACV saw the advantages in removing ARVN divisions from positions of command over provinces, and attaching some of their units to provinces, but this action would require a major shift of Vietnamese attitudes. Assignment of AR\'N units to provinces in the past had had limited success because of restrictions on employment and command jealousies.

Accordingly MACV recommended that PROVN, reduced primarily to a conceptual document, carrying forward the main thrusts and goals of the study, be presented to the National Security Council for use in developing concepts, policies, and actions to improve effectiveness of the American effort in Vietnam.

Subsequently, JCS inquired about Revolutionary Development effectiveness. They asked why RD objectives could not be more effectively achieved with the program under military execution. COMUSMACV'S reply repeated the views of the Ambassador's December memorandum to Lansdale and said the program was primarily civilian.

F. LODGE FAVORS DECENTRALIZED LEVERAGE

Embassy officials, meanwhile, continued to press for the restoration of the leverage that was lost with the dropping of the troika sign-off in June, 1965. There is no indication that the issue of sign-off came up at Honolulu, very likely because of disagreement on it between State and Saigon. But in April, Ambassador Lodge went on the record in favor of the sign-off system, and against civil encadrement in the Ministries.

Experience and study have made it apparent that the United States has not the influence which it should have in Viet Nam and also that [we] could be organized so as to be relatively much more immune from some of the worst effects of changes of government in Saigon.

I refer to influence in the provinces, and lower units of government~ and not to our influence at the top of the Government in Saigon, which is just about as good as it can be. The GVN in Saigon sometimes disagrees, often agrees, and is rarely able to get much done....

An error was made in giving up our right to withhold funds from USAID projects until we have conducted a successful bargain with the Vietnamese in which they agreed to carry out certain things which we wanted....There are two ways of not solving this problem of contact: (a) One is for a US agency head with big administrative responsibilities to pop over to the ministry to argue briefly and intensely, American-fashion, with the Minister-a system which is almost guaranteed not to produce results.

(b) Nor do I believe the problem is solved by putting American offices in the Vietnamese Ministries. This was the French practice, and it too does not prevent bureaucratic paralysis....

We should always be on the lookout for Americans who have the sympathy with and the knack of getting along with these people, and we might find some good material among the young men who are in the provinces. Another idea is to bring about a situation where we are really economic partners of the GVN and not merely the people who pay for the CIP Program without effective participation in the use of the piaster proceeds of that program. At present we have very little say in the disposition of such piaster funds. Somewhere along the line we gave up this very important leverage. In fact, we are now trying to recover joint authority over those funds, but progress is difficult . . . If we had this joint GVN/US authority, we could get at corruption, provided we also had advisers with the Ministries who were really "persona grata."

In the first week of May, Porter put the sector fund idea to Ky, who rebuffed him. Lodge tried to keep the idea alive, but without success.

G. THE MILITARY ADVISORY PROGRAM, MARCH-JULY, 1966

COMUSMACV's concern over declining present for combat strength of ARVN units resulted in a study which showed that as of February 28, only 62% of their authorized strength were mustered for operations. There were two principal reasons: (1) Division and regimental commanders had organized non-TOE units such as strike/recon, recon and security, recruiting teams, and (2) Large numbers of deserters, long-term hospital patients, and KIA had not been removed from rolls. MACV instructed JGS to disband non-TOE units and give increased attention to improving administrative procedures. Senior advisers were told to monitor their counterparts and use their influence to bring present for operations strengths up to at least 450 men (75%) per battalion.

At the same time, MACV had a study made to determine the need for reconnaissance units. When field advisers were asked, all replies were favorable; so JGS was asked to develop the organization for a regimental reconnaissance company.

Training was another problem. One adviser stated, "It is more accurate to describe the training program as non-existent instead of unsatisfactory." Another said, "It appears that the battalion commander desires the deterioration of the training status of the battalion so that higher authority will place the unit in a training center to be retrained." COMUSMACV wrote to the Chief JGS in March on the subject of training, but training progress did not change appreciably through 1966 from the level recorded during the first four months.

There was a question of what to do about units which advisers rated ineffective. The combat effectiveness of the 5th and 25th ARVN Divisions was the subject of a staff study completed April 19. Five courses of action were considered:

(1) Deactivate division headquarters and place subordinate units under province chiefs.
(2) Exchange the divisions with two other divisions from different CTZ's.
(3) Relieve the key leaders at all levels who were marginal or unsatisfactory.
(4) Relieve the divisions of their primary responsibility of fighting VC and leave them to pacification.
(5) By expression of COMUSMACV's concern, encourage intensification of adviser efforts to solve the divisions' underlying problems. If there there were no improvement, withdraw all advisers. If there were still no improvement, withdraw all MAP support.

COMUSMACV vetoed the last proposal and had it removed from the study. His guidance was to avoid sanctions against GVN, to intensify the effort to associate and integrate the 5th and 25th ARVN Divisions with the 1st and 25th U.S. Division, and to consider the possibility of greater U.S. participation in pacification in Hau Nghia and Binh Duong provinces.

In April, a study based on exhaustive analysis of field adviser reports and interviews was presented to RVNAF. It concerned itself with several major problem areas: Leadership, discipline, and personnel management. RVNAF reacted positively and quickly to the recommendations by establishing a committee to develop a leadership program.

In response to COMUSMACV guidance in May, J-5 studied courses of action to produce more dynamic progress in the counterinsurgency effort in RVN. It recommended establishing a Deputy COMUSMACV for RVNAF matters as a way to influence RVNAF more. General Westmoreland said in his endorsement that this step had already been taken with the appointment of Brigadier General Freund as Deputy Assistant to COMUSMACV. At the same time, he directed J-5 to review Brigadier General Freund's Terms of Reference and recommend changes or extensions. The completed J-5 study was forwarded to Chief of Staff Army on July 23, recommending that the Special Assistant to COMUSMACV not be given responsibility for any portion of the U.S. Advisory effort.

Low personnel strength was another critical factor in ARVN effectiveness. Only one of 22 battalions rated combat ineffective or marginally effective in July did not report a shortage of personnel. COMUSMACV advised Chief JGS to form an inspection team at general officer level to inspect the strength situation of ARVN division. The Inspector General, JGS, headed the team and was assisted by COMUSMACV's personal representative. The team began its inspection with the 25th Division.

H. ECONOMIC POLICY AND THE PORT OF SAIGON, APRIL-JUNE, 1966

As noted, this period saw rising pressure for renewed direct negotiations with GVN. When the first phase of the Struggle Movement ended in mid-April, Washington was thoroughly dissatisfied with accumulated delays on the economic program agreed at Honolulu. The USG had gone ahead and delivered on its side of the bargain, but GVN had done nothing. State proposed the threat of sanctions; without apparently going that far, Lodge persuaded GVN to cooperate fully with the IMF team, then on its way, to work out an anti-inflationary and balance-of-payments program.

The IMF team worked through late May and at the end of the month agreed with GVN on a program with the following main points:

(1) The exchange rate for imports, including tariff, would be increased from 60 to 118 piasters to the dollar except for rice, which would be brought in at 80. Purchases of piasters by U.S. troops and civilians, and other "invisibles," would have the 118 rate in both directions.
(2) A new tax on beverages would raise about 1.5 billion piasters in revenue.
(3) The GVN would sell gold to jewelers to push the price down closer into line with black market dollar exchange rate.
(4) The GVN would raise wages and salaries of its employees by 20% immediately, with a further 10% to follow in six months if necessary.

The GVN asked the USG for assurance on the following points:

(1) The GVN/IMF plan would substitute for the fiscal and customs reforms promised at Honolulu.
(2) The USG would liberalize the Commodity Imports Program to cover all importers' requests.
(3) The USG would buy all its piasters for official programs at the exchange rate of 80 (versus the previous 35).
(4) All appropriated Commodity Import Funds not used up would be applied to economic development projects in Vietnam.

The USG raised no problem about points (1) and (3) of the GVN requests, but for obvious reasons could give only vague and non-committal assurances on the amount of AID that Congress would authorize and reprogram. However, it made other concessions to increase total economic aid. The two governments reached prompt agreement on these points, and the piaster was devalued as proposed on June 18, along with the associated fiscal reforms. The GVN's promise to hold down its dollar holdings (given at Honolulu) remained "binding," although the generous AID package of the previous July was now raising GVN's dollar balances at a rate of about $100 million per year.

These decisions overrode a proposal from OSD (Systems Analysis) to get tough with GVN and to get deeper and more enforceable reforms. The DASD (Economics) predicted that the GVN would fail to carry out any reforms other than changing the exchange rate, and proposed to force the GVN to maximize its legal revenues from CIP by threatening to curtail the program. Without reform of the licensing, high market prices for CIP commodities yielded extortionate profits to those merchants who could get licenses, with a presumption of kickbacks to the licensing agencies. The proposed reform was to auction the licenses in the presence of US observers. He also proposed direct US purchases of piasters, in a "grey" market.

Upon settling the devaluation package, the Embassy immediately pressed for drastic changes in Saigon port management; the pile-up of civilian cargoes had grown so much as to add to the already serious congestion. Lodge proposed a complete MACV takeover of the port and warehouses with a Vietnamese general to be appointed as figurehead port director. However, the Mission backed away from the idea of complete takeover for the time being, and settled for MACV handling of AID direct assistance commodities, not including CIP.

The agreement reached with GVN at the end of June said:

The United States Military Agency appointed by COMUSMACV....shall forthwith assume responsibility and all necessary authority for.....

A. The receipt and discharge of all AID-financed commodities consigned to CPA.
B. The obtaining of customs clearances and all other clearances . . . for such commodities.
C. The storage and warehousing of such commodities intransit as necessary.
D. The transport of such commodities to such first destinations, including GVN holding areas and/or CPA/ministerial depots as may be designated by USAID/CPA.

I. POLITICAL AFFAIRS IN THE THIRD QUARTER, 1966

This period was comparatively quiet, and transactions between the two governments were routine. Late in June, Ky had brought up with Lodge the idea of a cabinet reshuffle, and Lodge had advised him to go slow. In July, Ky agreed to put it off. In August Ky volunteered to do something about the most corrupt generals in the Directorate, especially Co and Quang. Again, Lodge, who had frankly given up on corruption in the highest places, cautioned him to go slow, and Ky decided to put off any action until after the September elections. Lodge's advice, with State concurrence, concentrated on making sure Ky had definitive evidence of the alleged corruption; Lodge was sure that following this advice would delay things sufficiently. Late in August, Ky received an invitation to talk to a press group in Los Angeles, and Ky tentatively accepted. Both Lodge and State panicked, especially when the group started to set up a debate between Ky and Senator Fulbright; and in the upshot they talked Ky out of going.

GVN launched its transition to legitimate government on September 11, electing the long-promised Constituent Assembly. Although GVN systematically excluded from the elections all persons connected with the Struggle Movement, and although the Buddhists declared a boycott, the electorate turned out in large numbers and the results gratified the Embassy. State had reservations about the exclusion of Struggle Movement people, but Lodge unreservedly backed this exclusion, on the ground that GVN "should not be discouraged from taking moderate measures to prevent elections from being used as a vehicle for a Communist takeover of the country." As the election approached, Washington and the Embassy began to think about what they wanted to see in the new constitution. Lodge's view listed the following minimum essentials for the US best interests:

A. A strong, stable executive.
B. Executive control of the military.
C. Emergency powers, so that the legislature can't hamstring the executive during the war emergency.
D. Appropriate provision for the people's aspirations and rights.
E. Minority group representation.

Lodge also listed lower priority requirements for the new constitution:

A. Relative ease of amendment of the constitution.
B. Removal of either the President or the Legislature should be very difficult.
C. A limited term for the President.
D. Appropriate provision for establishment and improvement of the judiciary.
E. A superior court for constitutional review of laws and decrees.
F. Expansion of the powers of provincial councils and other forms of local government.

State expressed broad agreement with Lodge's views, with reservations about emergency powers and about constitutional provisions to forbid communism and neutralism.

J. THE ROLES AND MISSIONS STUDY

In response to a May 27 directive from Deputy Ambassador Porter, the Director JUSPAO had named Colonel George Jacobson chairman of a study group to define RD strategy and the roles and missions of the various elements. The group submitted its report on August 24, 1966.

The major recommendations of Roles and Missions Study were:

(1) The many elements and echelons charged with destroying VC infrastructure are confusing. The National Police should have the primary mission and responsibility for this goal.
(2) Reforms in basic GVN attitudes are necessary. Many rural residents believe that the US condones corrupt practices. This must be changed.
(3) ARVN forces should be encouraged to increase participation in pacification activities.
(4) PF/RF should be developed into a constabulary-type organization.
(5) PF/RF should be transferred from the Ministry of Security to the Ministry of Revolutionary Development.
(6) CIDG should be stationed only in remote areas.
(7) The Vietnamese Information Service is not effective at local level. It should assume supporting role to propaganda activities of other agencies.
(8) A Directorate of Intelligence should be established to coordinate all intelligence activities.
(9) Reinstitution of the MACV Subsector Advisor Fund is urged.
(10) ARVN Divisions (eventually Corps as well) should be removed from the chain of command in RD affairs. For instance, there were no USAID, JUSPAO, or CAS representatives at ARVN division headquarters.
(11) Because of generally bad behavior of ARVN Ranger units, they should be disbanded with Rangers reassigned as individuals throughout the Army.
(12) The physical and attitudinal consequences of present air and artillery employment policies should be studied.
(13) A logistic system which provides for US government control until delivery of material to end users should be substituted for the present MAP procedures.
(14) The Provincial Committee "signoff" provision should be reinstated for the Revolutionary Development budget.

On September 7 COMUSMACV made the following comments with respect to the Roles and Missions Study:

(1) Action had been taken to increase ARVN participation in RD, but removal of Division from the chain of command in RD activities appeared illogical. If ARVN combat battalions were dispersed to all 43 provinces, the Corps span of control would be ineffective and this arrangement would risk having these units defeated in detail. The proposed placement of battalions under sector commanders was feasible only in some areas-to be considered on an individual basis. The 1967 Combined Campaign Plan would clarify the functions of ARVN. Other things such as the buddy system with US units were the realistic ways of accomplishing the goal.
(2) The recommended disbandment of Ranger Battalions would seriously reduce ARVN combat strength. They should be retained and reorganized under new commanders.
(3) Recruitment of PF personnel for RD would weaken hamlet security.
(4) Although the study recommended giving primary responsibility for intelligence to the National Police, the nature of the problem dictated that all US and GVN military and quasimilitary elements contribute to this important goal.
(5) The idea of a single intelligence director seems sound theoretically, but it is not realistic when DIA and CIA are not amalgamated in Washington.
(6) RD requires both military and civil participation. Continued emphasis on military participation would be given but the major change in the MACV organization suggested by the study did not seem necessary.

One of the year's changes that could have led to implementation of a major recommendation of the Roles and Missions Study, but didn't, was the March decision in Washington to transfer the support of FWMAF and RVNAF from MAP funding to service funding. Studies were made by MACV on how best to implement this change, which became effective in September. It was decided that only the logistic advisory function would be transferred to USARV. Programming budgeting and executing programs remained under MACV. Most important, MAP goods were still put into RVNAF logistic channels, although under the new funding they could have been held in US channels down to the receiving unit.

K. ECONOMIC POLICY AND THE PORT, THIRD QUARTER, 1966

Although in political affairs there was no significant friction between IJSG and GVN in the Third Quarter, GVN's accumulation of dollar balances and its inaction on economic matters caused growing impatience in USOM and in Washington.

In late July, 1966, Komer and Ambassador Lodge laid the basis for the US position, including a suggestion that from now on USOM should make sure it has the means to monitor and enforce GVN compliance with its commitments.
Komer said:

Devaluation, port takeover, CIP expansion, RD reorganization if all skillfully meshed--could yet have early impact on VN public and do much in these critical weeks to refurbish GVN image at home and abroad.

So far, however, GVN has failed to move aggressively enough with supplies in country to curb rice and port speculation; has been unwilling to try to develop wage restraint policy in private sector, has dithered on promulgating and carrying out promised regulations re Warehouse removals; has gone about moving expanded CIP goods up country on business as usual basis; has shuffled about on RD reorganization, and Thang's or Ky's famous report to the nation.

Lodge proposed specific means to monitor GVN, and wished to urge the GVN to fund Revolutionary Development with counterpart piasters, so that USG could assure that the funding was adequate. Komer agreed with these proposals. Porter further proposed:

We intend using budget review process and counterpart releases on leverage on GVN CY 67 programs and to seek GVN acceptance of both overall ceiling and commitment to essential revolutionary development programs before we agree to support any part of the budget.

Note degree our effectiveness dependent on credibility our leverage by GVN, which may not be great.

But Porter opposed a complete takeover of the Saigon port, proposed by Komer.


VI. A SEVEN-NATION CONFERENCE, LEGITIMATE GOVERNMENT, AND HIGH HOPES FOR THE FUTURE, OCTOBER, 1966-SEPTEMBER,
1967

A. THE MANILA CONFERENCE, OCTOBER 1966

In the first week of October, just as planning was beginning for a seven-nation conference at Manila on Southeast Asia, latent mistrust betweçn Southerners and Northerners in Ky's cabinet broke into an open split. A Northerner persuaded Colonel Loan, the Police Director, to arrest one of the Southerners, and although Loan released him on Ky's order a few hours later, six Southerners took it as an affront to all of them and threatened to resign from the cabinet. While conference planning was going forward, the crisis simmered on for almost three weeks, up to the eve of the conference. Lodge tried to mediate, but the six proved difficult to mollify; he conjectured that they were trying to get all the mileage they could out of the embarrassment the crisis would cause Thieu and Ky if it were not resolved before the conference. It was patched up at the last minute.

In preparing for the conference, Lodge was particularly concerned that Ky or Thieu, if put in the limelight through the opening speech to the conference, should avoid embarrassing the USG:

One crucial factor must be degree to which you believe they can be persuaded to make constructive and reasonable speech, avoiding talk of invasion of the North or any other subjects that put us openly at variance with each other . . . We hope that the GVN can delegate Tran Van Do and Bai Diem as its drafting representatives so that even before they arrive in Manila we would be a long way toward common agreement on the kinds of language we need.

The USG was also concerned that GVN should announce a broad and attractive program that would put a good face on itself and its prosecution of the war:

We welcome your news that Tran Van Do and Bai Diem will arrive Manila October 21....

Since this gives us at least a solid day, the 22d, to refine drafts, we are inclined here not repeat not to ask you to work with GVN on detailed submissions . . . Rather and absolutely vital to favorable conference result, we believe you should be working with Ky to get his concurrence on the following list of action areas in which we believe forthcoming statement by GVN is not only wise in itself, but essential to US strong and successful public statement from the conference.

A. Land Reform
B. Constitutional Evolution
C. National Reconciliation
D. Economic Stabilization
E. Improved Local Government
F. Radically Increased Emphasis on RD/Pacification
G. Postwar Planning
H. Corruption
I. Port Congestion
J. GVN Reserves

In each of above categories, basic problem is to get GVN commitment and willingness to state its intentions.

Secretary McNamara put down his views on priorities in a Memorandum to the President on October 14. He noted that the US had not yet found the formula for training and inspiring the Vietnamese. The main thrust of the memorandum concerned shifting ARVN more into pacification and shifting the US pacification responsibility to MACV. But in disucssing GVN's weaknesses, he commented, "drastic reform is needed." He let that one drop without any recommendation.

The conferees met in Manila on October 24-25, 1966, and after due deliberation issued a long communique on policies for Southeast Asia in general and South Vietnam in particular. They backed the defense of South Vietnam against North Vietnamese aggression, and supported the major outlines of US policy. The GVN emphasized its promises of social revolution, economic progress, and political freedom. They concluded with the declaration of intent to withdraw all US and Free World forces under specified conditions:

29. In particular, they declared that allied forces are in the Republic of Vietnam because that country is the object of aggression and its Government requested support in the resistance of its people to aggression. They shall be withdrawn, after close consultation, as the other side withdraws its forces to the North, ceases infiltration, and the level of violence thus subsides. Those forces will be withdrawn as soon as possible and not later than six months after the above conditions have been fulfilled.

B. BARGAINING BEGINS ON NATIONAL RECONCILIATION, OCTOBER-DECEMBER, 1966

The USG, having chafed at the lack of action on the Chie Hoi Program, wanted GVN to broaden it to attract high-level defectors by offering them posts comparable to their existing ones in the VC organization. This idea went down poorly with the Vietnamese. Lodge was pressing the idea from the beginning of October, and although they were reluctant, Thieu and Ky finally agreed on October 20 to proclaim the new program, called "National Reconciliation," on November 1, a national holiday. As noted above, Washington wanted and got a public commitment on this subject at Manila.

Then on November 1, the promised proclamation failed to appear; instead, there was a vague reference to it in a speech on other subjects. When the Embassy inquired, Ky said the speech had to be prepared very carefully, and that he had not had time before November 1; he promised he would have the speech and proclamation ready in early December. Lodge found this explanation hard to swallow, but had to accept it. When "early December" arrived, there was a dead silence; and the end of this exercise was not yet in sight.

C. MORE HARD BARGAINING ON ECONOMIC POLICY AND THE PORT, OCTOBER-DECEMBER, 1966

Economic policy negotiations had the same flavor as those relating to National Reconciliation. The USG was dissatisfied, in the third quarter 1966, as noted, on the lack of GVN follow-up on budgetary and foreign exchange promise in June following the IMF agreement. And in the fall, the Saigon Port congestion problem grew serious again; the June agreement had not gone far enough.

At the end of September, Governor Hanh of the RVN National Bank came to Washington to negotiate specifics on economic policy. During the negotiations, Komer cabled Lodge:

[We are pressing GVN] hard to agree to spend rapidly growing foreign exchange reserves on imports. Otherwise, it will appear and rightly so, that GVN is getting rich at US taxpayer's expense. It is apparent that GVN's chief reluctance on this score is that Thanh/Hanh want to squirrel away reserves for postwar rehabilitation in case US goes away and leaves them.

In the upshot, however, they reached only a vague and general agreement, on October 6, the most specific item being that GVN would limit its inflationary gap to 10 billion piasters in 1967. Dollar balances were deferred to later negotiations.

There was some effort to resolve disagreements on economic matters and the Port just before the Manila Conference, but no progress. Komer went to Saigon after the Conference and, assisting Porter in the negotiations, reached the following agreement with GVN on November 2:

(1) GVN will use all gold and foreign exchange available to it in excess of $250 million, not including commercial bank working balances, to finance invisibles and imports, including import categories now financed by the US.
(2) GVN will place at least $120 million of its reserves in US dollar instruments of at least 2 year maturity.
(3) During US FY 67 USG will make available at least $350 million of grant aid for imports4 not including PL 480 Title 1 Commodities. Any portion of the $350 million not required for such imports will be used during the US FY 67 as grant assistance for economic development projects.
(4) Within the balance of payments accounts, the amounts or categories to be financed by each of the governments will be determined through joint consultation on a quarterly basis.

The putting of GVN dollar reserves into US two-year or longer-term bonds would technically improve the US balance of payments, though the gain would be more nominal than real. The agreement left plenty of room for further problems and State recognized that each item would probably have to be pressed again.

Following this agreement, the Embassy prepared to negotiate a GVN budgetary ceiling and related matters. The strategy would be to seek agreement on a firm budget ceiling for GVN without committing the USG on its spending in Vietnam. But the Embassy had misgivings about this approach:

....It deprives US of the monetary gap analysis as a hinge on which stabilization agreements can be hung . . . Note that Komer-Hanh memorandum signed in Washington used 10 Billion gap figure as objective.

GVN officials are anxious to resume discussions. Prime Minister now has on his desk proposed GVN CY 67 budget of 100 billion piasters. The differences between that figure and acceptable one is much greater than the differences in US ceiling estimates last discussed here during McNamara's visit.

State cabled its agreement that showing GVN the US plan to limit its own piaster spending would help get GVN to accept tight ceilings itself.

In December, Embassy negotiators tried to pin down GVN on the means to limit its accumulation of dollar balances, talking mainly with Governor Hanh. To evade specific commitment, he repeatedly talked as though he could not determine GVN budget policy (which he had negotiated in Washington two months before) and that he could not as a good banker make the bookkeeping transactions that would be required to permit GVN to run them down by buying imports. The Embassy negotiators then turned to the idea of asking for a GVN contribution of 8 billion piasters to the Free World Forces' operating budget in Vietnam as a cost-sharing arrangement, which would incidentally reduce GVN's receipts of dollars and so help run down the balances. GVN's reply was that that was impossible. After a series of talks that read like haggling in an Arabian marketplace, Porter went to Ky about it and got the following understanding:

The GVN accepts the principle of contributing to free world forces local expense and will make a contribution of 1 Billion piasters for that purpose at the end of March 1967. The matter of further contribution would be considered at that time. I would send him a letter of understanding on that subject.

The story was much the same on GVN support for AID projects.

The Saigon Port congestion problem led to discussions starting around the 1st of October, which produced nominal, ineffective agreements in the first week. When McNamara went to Saigon to discuss new major troop deployments with MACV, he talked to Ky on October 11, Ky kept talking about infiltration whenever McNamara brought up the subject of the Port. Finally, Ky said he had solved the Port problem by telling the Minister of Finance "to write a decree to get rid of the mafia which was dominating the port."

That did not solve the problem; the Embassy kept pressing. On November 2, Ky promised a tough decree on port management and a deliver-or-get-fired order to the General who had been put in charge of the Port after the June agreement. (Accepting merely this order would permit further delay before any change in the system, of course.) Later on in November, Ky changed port charges and accepted some increase in US military personnel there; but both GVN and MACV strongly resisted any increase in MACV responsibility for the port. The GVN also refused to confiscate goods left unclaimed over 30 days in the port warehouses. Further talks in December got nowhere, although State authorized drastic leverage to move GVN:

To this end you might also tell Ky that I have gone so far as to propose a two month moratorium on shipment of US financed CIP goods beginning 1 January to permit backlog in transit warehouses and on barges to be removed. You could cite my view as being that if GVN won't clear port, why should US add to congestion by continuing to ship goods?

I recognize that actual moratorium would be draconian measure and perhaps unrealistic, but citing it . . . might help move Ky.

D. CORRUPTION BECOMES AN ISSUE AT YEAR'S END

The issue of corruption came up in several ways in November and December, 1966. On November 10, Ky told Lodge he was now prepared to relieve General Quang of his command of IV Corps, following up on intentions he first told Lodge about in August. Lodge again urged caution, saying Ky should carefully avoid starting "another General Thi incident." But Lodge was satisfied that by this time Ky had prepared well for the move. He had: on November 18, the Embassy got word that General Quang would head a newly-created Ministry of Planning and Development; the Ministry would deal primarily with postwar planning. The command changed and Quang moved up on November 23. Possibly Ky's idea of how to deal with Quang came from an end-October suggestion from the Embassy for a joint postwar study team, to which Ky had agreed and was to announce jointly with the White House. (Creating the Ministry scrambled the plans for the study team and announcement, so the Embassy had to go to work on a new plan.)

A couple of weeks later, following allegations of corruption in news stories, State cabled the Embassy that the President wanted accelerated efforts both to cope with diversions and to deflate distorted allegations. State was also considering sending a "blue ribbon panel" from Washington to assess the problem of AID misuse. Responding to the stories and to the Washington concern, Ky said he planned a national campaign against corruption. State told the Embassy on November 25 of suggestions in Washington for a joint US/GVN inspectorate general to follow up AID diversions, and asked for a reaction. After a delay due to active truce discussions with the VC, Saigon replied on December 2:

There is already an interchange of information on the working level between Ky's investigative staff and our responsible poeple in USAID. We doubt GVN would respond positively to idea of joint US/GVN inspectorate to work on AID diversions. This would touch very sensitive areas. While we want to expose and cut diversions to maximum extent possible, we doubt that this rather public way is best suited to achieve GVN cooperation.

On December 3, Lodge and Ky had an "amiable discussion" on corruption, and Ky agreed to study and consider all these suggestions.

E. POLITICAL MATTERS AT YEAR'S END, 1966

Washington and the Saigon Mission watched closely as the Constituent Assembly did its work. Concern arose at word that GVN was providing a complete draft constitution either formally or through sympathetic Deputies, particularly because it provided that ultimate political power would be vested in the Armed Forces Council.

Washington, consistent in its championing of National Reconciliation, urged the Mission to make the USG's views known both to GVN and to key CA members before the matter because a major issue. Lodge spoke with Ky who said he was at that very moment about to leave to talk with Thieu on the matter. Lodge further encouraged Ky to state his views on the constitution to the Chairman of the Drafting Committee and reminded Ky that the American constitutional expert, Professor Flanz, was available to go to Ky at any time to give advice in complete confidence.

General Thieu concluded one of his regular discussions of the military situation with General Westmoreland by making a few pronouncements on political matters. Westmoreland stressed what was to become a persistent American theme, the importance of unity in the GVN leadership. Unabashedly Thieu said that the key question was whether the Army would stay in power and what power they would retain.

F. PACIFICATION AND THE SHIFT OF ARVN

Komer, in Washington, continued to prod the Mission to goad GVN. It seemed time to remind them, he thought, of their Manila promise to give top priority to land reform. Lodge was asked to press Ky for vigorous application of existing laws.

Continuing emphasis on pacification and increased impatience at the lack of progress brought another reorganization of the US Mission effort. To unify and streamline the civilian side, the Office of Civil Operations (OCO) was established in late November under Deputy Ambassador Porter. An OCO Director in Saigon and a single Director of Civil Affairs for each of the four corps became responsible for the Mission's civil support of Vietnamese Revolutionary Development. Within GVN General Thang not only lasted beyond the originally envisaged six months but was elevated to Commissioner-General for Revolutionary Development with supervision over the Ministries of RD, Public Works, Agriculture, and Administration (Interior). These changes seemed to enhance the chances for substantive improvements. Washington wired,

Why not approach Thang and after telling him about your reorganization and new faces you plan to put in region and then provinces, suggest he essay a shake-up too. . . . As I recall, around Tet GVN issues a new promotion list, which usually also entails some joint shifts. This might provide a good cover.

The reply offered now familiar themes as the reasons for inaction,

Specifically, if we were to give Thang a list of district chiefs and ask that they be removed, we do not think any significant change would result. In the past this tactic has proved cumbersome, even counterproductive, and tends to lead either to reshuffling of positions with little or no positive end result or to the Asian deep freeze treatment.

.....At times we will have to make our views known on particular personalities if we find an intolerable situation in key leadership positions, as we have done in Long An and the ARVN 25th Div. Basically, however, we will seek to avoid too deep an immersion in Vietnamese personalities, which can so easily become a quagmire from which there is no escape and concentrate instead on encouraging the GVN/RVNAF to take the initiative in a situation they know best how to tackle in specific tactical terms.

Meanwhile, efforts went forward to convert half of ARVN to the primary mission of supporting Revolutionary Development. On October 5, the Chief of the Central Training Agency, Major General Vy, chaired the high level joint conference which assigned administrative tasks and developed a schedule of required actions. Subsequently, a joint MACV/JGS team visited a few ARVN division headquarters and found that personnel had not understood the July JGS directives and thus had not undertaken the actions directed.

At about the same time, Revolutionary Development Minister Thang entered one of his recurring periods of pouting because he considered recent American criticism of slowness to imply their evaluation of the program as a failure. He told Ky he was ready to resign if Americans were so critical that they wanted to take it over and run it. Lansdale was able to placate Thang, but ARVN reluctance continued.

The conversion to RD was fraught with criticism on both sides, for the American press continued to suggest that the ARVN shift to pacification meant Americans would bear the brunt of the fighting and take the bulk of the casualties. State considered this line tendentious and urged Lodge and MACV to use "all leverage provided through MAP and advisor program" to shift ARVN to RD.

G. MILITARY ADVISORY MATTERS AT YEAR'S END, 1966

COMUSMACV backed out of ARVN personnel selection by serving notice in a message to Corps Senior Advisors that only policy matters, not the detailed problems of failure to perform, were to be referred to him.

In reviewing the deficiencies discussed in the Senior Advisor's Monthly Reports, it is noted that many items are correctable in command channels at unit, division, or corps level; yet it is not apparent that such action is being taken aggressively at local and intermediate command levels. Deficiencies involving policy are referable appropriately to this headquarters; deficiencies involving non-compliance with directives, apathy on the part of a command, etc., are to be resolved in RVNAF channels.

The role of the advisor is difficult and often frustrating. It requires military acumen, dedication, selflessness, and perseverance. It is desired that addressees channel the professional abilities of the advisory apparatus into efforts designed to complement tactical advice with improvement in the quality, efficiency, and reliability of the RVNAF structure as a whole.

Shortly afterward the Chinh-Hunnicutt affair erupted. As it unfolded it revealed the near impossibility of eliciting satisfactory performance by means of the existing advisory system. CG 25th Division published an order of the day accusing the Senior Advisor of trying to have the CG removed, of attempting to dismiss other division officers, of bypassing the chain of command, and of destroying the "spirit of cooperation between Americans and Vietnamese."

The MACV command history describes General Chinh as extremely weak, afraid to command. The Senior Advisor was a dynamic, competent officer assigned to improve effectiveness. He pursued his objective in a firm manner.

COMUSMACV felt the incident received distorted press coverage in the US where it was portrayed as a challenge to the entire position of the US advisory effort. He noted that the Vietnamese were sensitive to real or imagined infringements on their sovereignty. Great care had to be exercised to avoid even the appearance of violating their pride; an officer who yielded too readily to US advice was regarded as a puppet. He felt the most effective way to work with the Vietnamese was to discuss matters with them and then allow them to resolve their problems. CG 25th Division did have redeeming qualities. He was considered honest; and for his stand at the coup trials in the early 1960's, when he had accepted punishment while many others were running; he had acquired a sizeable following among ARVN officers. He was, in addition, a boyhood friend of CG III Corps, who was said to recognize the CG's fault but felt that his hands were tied.

Deputy COMUSMACV who enjoyed good rapport with CG 25th ARVN Division, visited General Chinh. In a two-hour meeting, the Vietnamese spoke freely and openly. He displayed genuine and extreme concern and admitted his error in issuing the Order of the Day. He had already apologized to CG III Corps. Deputy COMUSMACV received the impression that the advisor might have been a little too aggressive with the Vietnamese general, who was hypersensitive. Deputy COMUSMACV suggested that a memorandum be published to the division which would mention that the Order of the Day had leaked to the press which had taken it out of context and that there was no intention to disparage the advisory effort. The memorandum was published on December 21. It said the past must be forgotten and that cadre of all ranks should display warm, courteous, and friendly attitudes toward their American counterparts. General Chinh appeared to turn over a new leaf. Colonel Hunnicutt was reassigned to an apparent terminal assignment in the United States.

COMUSMACV addressed a letter to all advisors in December, 1966, to again emphasize the importance of rapport. He said, the key to success or failure was the relationship achieved and maintained by the advisor with his counterpart. The natural tendency of the US professional soldier was toward immediate reaction. He expected the same in others, but it was necessary to temper counterpart relationships with patience and restraint.

General Westmoreland affirmed this view in his remarks at a conference of his senior subordinate commanders.

In order for ARVN to be successful, a re-education process is necessary, from the generals on down . . . The attitude of the soldiers toward the people frequently is poor. . . . We must do all we can toward to change this....

In conduct of operations in support of Revolutionary Development, we will frequently have units buddy up with ARVN units . . . A word on command relations in these combined operations is appropriate. We have had great success with our cooperative efforts in the past. We should establish a proper relationship from a technical command standpoint. Proper types of missions are general support and direct support. When conducting operations where we have the preponderance of forces committed . . . their association will be in direct support or general support of our operations. This is good military terminology and quite proper for us here. General Vien agrees in this terminology.

Sometimes ARVN was not receptive to advice. In November, recognizing the validity of a recommendation from the Corps Advisor that an additional battalion be activated in the ARVN 23d Battalion, COMUSMACV suggested this to JGS. Inactivation of a marginally effective battalion in another division was suggested as compensation. Chief JGS, for reasons of his own, declined to authorize the 23d Division to have an additional battalion.

Still, the effort moved forward. Training of RD Mobile Training Teams from each ARVN Division was conducted in December. The actual conversion training of divisions started in early 1967, and a similar program for RF/PF was planned. In fact, planning was viewed as the surest sign of progress. The 1967 Combined Campaign Plan was ceremoniously signed by Generals Westmoreland and Vien on December 8. Its significant innovations were requirements for subordinate commands to prepare supporting plans and for quarterly reviews to maintain the plan's viability.

H. CONSTITUTION-WRITING IN JANUARY, 1967

Progress within the Constituent Assembly and preliminary jockeying over the new constitution were persistent concerns during the first quarter of 1967.
At times the Assembly seemed remarkably independent. It publicly fought against a law which gave the military junta the right to over-rule its decisions. The controversy subsided in January with Junta assurance that it would not use the law. There was considerable discussion within USG circles as to how American influence should be disposed in supporting presidential candidates. Marshall Ky was already making noises about running. Washington cautioned Saigon not to automatically oppose a Ky candidacy. While State would prefer a civilian president, the most important matter was to effect transition to a constitutional government that was strong and unified enough to continue to prosecute the war effort (or negotiate a peaceful settlement),

....and at the same time broadly enough based to attract increasing local and national political strength away from VC.

Ambassador Lodge's reply was, "the continued viability of SVN depends very heavily on the cohesiveness of the military." This had been and remained his ~valuation of the political situation.

....Unity of the military is essential to government stability in VN. From the standpoint of stability, this is the Law and the Prophets.
Movement toward a broadly based, truly popular government is impossible without stability.

The military is also the chief nation-building group in the country. It has education, skills, experience, and discipline which no other group can offer.

State acquiesced in this argument but continued to hope for a government broadly enough based so that the VC would find avenues to conquest of South Vietnam effectively blocked.

....In our view it is less a question of any civilian candidate controlling the military and more a question of the military being educated to accept a sharing of power and responsibility with civilians as a necessary elementary political progress. This means a readiness to accept the outcome of a free and open election in which the candidate favored by the directorate may not win.

I. FOREIGN EXCHANGE NEGOTIATIONS AND THE GVN BUDGET, JANUARY-MARCH, 1967

The problem of GVN dollar balances remained a thorn. GVN did nothing to carry out its November agreements. With scarcely concealed impatience, Ambassador Porter offered GVN a tough economic program, in a meeting in the first week of January, 1967, with special emphasis on the dollar balances. Reporting on the meeting, he said:

We underlined many times the very high level of the US commitment and said that we could not make this commitment unless we had [an] iron-clad guaratee that the GVN would live up [to] the foreign exchange agreement . . . we stated that this was the minimum the US could accept.

Hard bargaining continued, including another Hanh trip to Washington. Preliminary to the Conference, Washington considered several steps which might be taken:

1. Agreement on a piaster/dollar rate of 118 for official US purchases.
2. US use of all counterpart over P-30 billion.
3. Increase of Assistance In Kind from GVN.
4. Possible transfer of some official purchases from the 80 to a 118 exchange rate without changing the official rate.
5. Transfer of DoD contracts to the 118 rate.
6. Tying all 80 rate dollars to US procurement.
7. 100% US use of PL 480 sales.

Saigon's opinion was that for these negotiations there were two main routes:

(1) A switch of counterpart funds from their use to ours, and
(2) A change in the exchange rate.

The first seemed preferable because it was more negotiable. The second might be counter-productive by "simply angering Hanh without moving him." On February 20, GVN merely agreed to work on an "interim memorandum of understanding which would include actions to implement the foreign exchange agreement of last November." When Komer went to Saigon later in February to negotiate, he found it necessary to threaten specifically to reduce the CIP program to force down GVN's dollar balances, noting that once the program was cut Congress would be unlikely to restore the cuts. The negotiations amply demonstrated the truth of Hanh's remark that Orientals only act after much bargaining. As Komer started to walk out the door after a meeting, Hanh hinted at a raise in the official purchase piaster rate from 80 to 118, but made no other concession. (At no time did the USG threaten explicitly to buy piasters in the open market, as Porter and DASD (Economics) had earlier proposed, a procedure that would knock down GVN dollar balances to whatever extent we wanted while using fewer dollars to get the required piasters.) In an exchange of letters early in March, Hanh said he understood the US was willing to establish $50 million development fund in return for their purchase of 300 thousand tons of rice on a 100% US use basis and repayment of $25 million ICA loan. From Komer, now back in Washington, came this reply,

There is in my view no doubt whatever that Hanh, and for that matter Ky, understood full well that we did not agree to the $50 million GVN Development Fund as part of interim package. Nor do I regard our credibility as enhanced if we now retreat even more on this issue. Finally, I regard the Development Fund as a sweetener so clearly wanted by the GVN that we need not give it away too cheaply.

While in one sense we have little immediate leverage to use on the GVN so long as we do not choose to withhold aid in one form or another, in another sense we clearly have the GVN worried. I believe that, either through a definitive solution this June or more likely via Salami tactics, we can keep GVN reserves from rising too far.

In mid-March Komer reached another "Interim Agreement" with GVN on foreign exchange. It provided that:

(1) The United States would supply at least an additional 100,000 tons of PL 480 rice and a further 300,000 tons of rice under terms providing for 100% USG use of proceeds.
(2) GVN would make available up to $120 million of foreign exchange for financing commodities previously imported under the CIP.
(3) The United States would make available for economic development projects the balance of FY 67 funds unused as a result of the reduction of the CIP program and would proceed to initiate and make grants for several interim projects.
(4) The United States agreed to the establishment by GVN of a $50 million development fund for purchase of US goods and services, such fund to be considered as use of Vietnamese foreign exchange resources under the November 4, 1966 agreement.
(5) GVN would repay US loans totalling $53 million.

Closely related on the economic front was the GVN budget. Estimates of the CY 1967 inflationary gap grew during the quarter from 14 to 20 billion piasters. The United States exercised only spotty influence on their budget, specifically on those items receiving direct American support; and general persuasion was used to hold down the overall limit. Governor Hanh tried to transfer all US counterpart funds to the military budget with the explanation that only the US military could adequately control the South Vietnamese military, but the guessing was that this might also be his way of freeing GVN civilian agencies from any American interference.

Washington efforts to get more information on the GVN budget only brought euucated guesses and a reminder that the Mission did not participate in a review of the GVN civil budget as was the practice for the military part. The CY 1967 budget of 75 billion piasters was issued without prior discussion with AID. It was unsatisfactory. USAID had the leverage to negotiate because of counterpart funds and PL 480 receipts, but the major problem was how to provide AID the necessary funding mechanics to implement programs at levels sufficient to meet established requirements.

J. THE SAIGON PORT AGAIN

Severe congestion continued to plague the Port of Saigon. A drop in CIP/GVN cargo discharged in December brought queries from Washington. Saigon replied that the drop was due to the GVN port director's abortive great barge experiment and listed a number of corrective steps taken. In fact all were peripheral to the central problem, the failure of commercial importers to remove their goods from crowded warehouses. Saigon warned,

Any additional actions . . . would require high-level government to government agreements which in our estimation would not be appropriate at this time.

Highest authorities in Washington remained concerned and pressed for a complete military takeover or at least a comprehensive alternate plan which would demonstrably meet the problem. Saigon held back with the view that progress was being made, that Ky was persuaded of the need to eliminate port congestion and that he was doing his utmost to solve the problem. A US takeover was once again viewed as neither politically possible nor desirable. CINCPAC chimed in to support strongly the Saigon position, and at the end of the quarter Washington was still peppering Saigon with comment:

We here do not take same relaxed view of barge situation Saigon port as Saigon . . . Highest authorities have been consistently concerned.

At the same time an overlooked aspect of the earlier extension of US control of the port was being bounced back and forth. MACV clearance of AID financed project and procured commodities was estimated to have made AID liable for one billion piasters for port clearance costs previously financed by GVN. Nobody was quite certain how to approach GVN on the matter or how the US should pay the bill within existing dollar and piaster ceilings.

K. MINOR BUT PRICKLY PROBLEMS, JANUARY-MARCH, 1967

The clearance costs problem was an example of several minor matters which arose between the governments, problems that were often difficult to handle because prestige and sovereignty were involved. GVN National Bank Governor Hanh and the Embassy tangled over GVN issuance of instructions to commercial banks operating facilities for US military forces.

The Embassy became concerned because American civilians, tried and punished in GVN courts on the basis of American-supplied evidence, were subjected to extortion. The ticklish part of the problem was how to investigate the practice without jeopardizing those in the midst of buying their way out. Soon there were ill-considered remarks to the press by Brigadier General Loan who said that GVN had sole jurisdiction over civilians. State instructed Saigon to keep mum on the subject. Finally, in March it was publicly announced that the United States would exercise court martial jurisdiction over civilians but "only rarely, in exceptional cases." The US did not question, as a matter of law, the existence of a basis for court martial jurisdiction over civilians and indicated that our policy would be to handle the problem of civilians in other ways. The statement was careful to reaffirm US respect for GVN sovereignty, so as to avoid the issue of a formal status of forces agreement.

Whether GVN could levy requirements for reports and payments upon US contract airlines caused bantam-like stances on each side. GVN demanded that contract flights pay landing charges. Porter replied that was improper and offered GVN notification of flights as a sop. Ky's retort was a demand for copies of contracts and schedules, restrictions on in-country flights and limitation of loads to personnel and equipment strictly military. We rejected those terms and the military nature of the problem probably saved a contract flight from becoming the "example" later in January when one plane-load of Pan American passengers baked in tropical heat for several hours while GVN refused them permission to disembark at Tan Son Nhut.

Premier Ky's implied intention in February to accept an invitation to speak in the United States produced an apprehensive reaction from Washington. Ambassador Lodge cautioned, "We have twice headed him off and to object a third time might create strain." Eventually Ky was able to publicly postpone his visit on the grounds that his presence was needed to insure a free and fair election.

Diversion of MAP material remained a closet skeleton to be rattled periodically. In February, MACV performed estimative gymnastics to suggest that no more than 0.3% of MAP material had been so lost. CINCPAC quickly suggested that valid data did not exist and would be hard to compile. He said that the differences between manifests and the material actually received should be otherwise identified, and his thoughts seemed for the moment to take care of a potentially embarrassing need to explain a $5 million problem without even bothering GVN.

Throughout the quarter there were periodic flurries of talks about negotiations with North Vietnam. U Thant was especially active and these maneuvers caused an uneasiness in US/GVN relations because Saigon was never completely certain what role it would have in such discussions.

L. THE OTHER WAR

Top levels in Washington realized that not much progress was being made in Revolutionary Development and exhorted Saigon to integrated, detailed civil/ military planning. COMUSMACV waffled once again on whether ARVN battalions supporting RD should actually be retained under the operational control of the province chief. US Army units continued their work in the densely populated Delta provinces. On one occasion Premier Ky called Colonel Sam Wilson in for his view of progress there as well as to ask for an evaluation of the ARVN 46th Regiment. Wilson was able to say plainly that the unit was poor and that its commander was ineffective and, without a doubt, corrupt. Ky explained that the commander in question was a close friend of the division commander who was a close friend of the corps commander who was a close friend of Ky. That seemed to explain the matter.

The US continued to press national reconciliation upon the Saigon government. Unger and CAS assets worked with the Constituent Assembly to get NR into the constitution. The lack of enthusiasm was alleged to be fear of unilateral US peace action. The present GVN continued, as they had so often before, to agree readily in conversations with us to the principle of national reconciliation; yet any concrete implementation remained illusive even through another top level meeting with the President.

M. GUAM MEETINGS, MARCH 20 AND 21, 1967

President Johnson announced that his purpose in calling the Conference at Guam was to introduce the newly appointed US team to the leaders of GVN. The shift of personnel represented the largest shake-up in US leadership in South Vietnam since August 1965. Ambassador Bunker was designated as the replacement for Lodge, and Locke took Porter's place. In a move to resolve the controversy over military versus civil control of Revolutionary Development, Robert Komer took charge with the rank of Ambassador under the COMUSMACV organizational structure with czar powers and a strong mandate to produce progress.

Most happily, the Constituent Assembly completed its work on the constitution just in time to permit Premier Ky to present a copy to President Johnson at Guam. As had been the case on the two previous occasions of top US/GVN talks, the communique which resulted from the 2-day meeting lay primary emphasis on political, economic, and social matters. The military picture was presumed to be so encouraging and improving as to need no special attention.

N. ROUTINE MATTERS, APRIL-SEPTEMBER, 1967

Most of the previous problems persisted during this period. By June the rate of inflation was predicted to be 45-50 percent per year, and the piaster gap was to be 17.3 billion greater than projected. Hanh, now GVN Economic Minister, scheduled a September trip to Washington and the list of expected topics read very much the same as agendas for many previous such meetings. Hanh could upon occasion get very excited, as in the case where a suit by a Greek shipping line froze the GVN account in a New York City bank; but despite repeated urging from Washington, nobody in Saigon could get up courage enough to approach GVN on those retroactive port clearing charges.

On April 18, GVN finally issued a National Reconciliation Proclamation which stated that "All citizens who rally to the national cause can be employed by the government in accordance with their ability," but the decree proved to be a mirage. It used the Vietnamese words for solidarity rather than those for reconciliation and the program proceeded in consonance with that distinction. Saigon reminded State that Premier Ky had recently told the Ambassador that meaningful progress on national reconciliation could only come after a constitutional government was established.

On the MACV side, Ambassador Komer was getting organized. In response to a Washington query on land reform he recalled his consistent position but pointed out that it was not an important issue in Vietnam. Far more important was the matter of security in the countryside.

The US continued to deliver material assistance to improve the morale of ARVN troops. A $2.83 million program for 913 ARVN dependent houses was upgraded to provide more modern structures with utilities. USAID helped the RVNAF commissary system for RVNAF and dependents. Although rice was eliminated to avoid lowering its open market price, GVN sought compensating increases in the meat and fish supplied. MACV programmed over $3 million to the RVNAF Quartermaster Corps which supplied field and garrison rations.

But there were continuing signs that ARVN as a fighting force needed propping up. Sporadic efforts at encadrement appeared. The USMC Combined Action Companies in I Corps were well publicized. In April, the US 25th Division completed studies, and transmitted to General Chinh, still CG ARVN 25th Division, the Combined Lighting Concept. It brought together in one outpost a US squad, an ARVN squad, and a PF squad.

In response to Washington inquiries, General Westmoreland reported by message in May, 1967, "A command project was initiated on January 26, 1967, to review the performance of RVNAF units and to identify those considered ineffective and non-productive. Units so identified are being evaluated with a view to withdrawal or reduction of military assistance support unless improvement in these units is possible. The evaluation will be conducted every six months resulting in a final determination each June and December....

The methodology for evaluation includes:

(1) Identification of units judged ineffective or nonproductive.
(2) Evaluation of credibility or feasibility of present plans to guarantee increased effectiveness.
(3) Study of unit performance trends during the past six months.
(4) Determination of the availability of plans to train personnel.
(5) Evaluation of command interest at all levels for improvement.

Units will be classified as Improvement Probable, Improvement Doubtful, and Improvement Unlikely. Those in the latter two groups must justify continued military assistance or action will be initiated to reduce FY 68 support.

Current Status: All VNAF and VNMC units are effective and productive. Support to VNN reduced by $7800 which reflects discontinuance of support for two fishing boats which are not configured to support any role assigned to VNN. The evaluation of ARVN is only partially completed.

In July, the MACV staff briefed Secretary McNamara in Saigon and touched again on the subject of encadrement. One concept considered was VATUSA (Vietnamese Augmentation to US Army) whereby two or three Vietnamese would be assigned to each squad in US combat battalions. While this scheme offered the advantages of improving ARVN skills and of utilizing additional RVN troops without further strains on already limited ARVN leadership, the only real gain for the US was viewed to be a possible reduction in US strength. The disadvantages pointed out were the political climate, the language barrier, the danger to US unit security, the administrative and disciplinary difficulties and the probable irritation between VATUSA and regular ARVN unit soldiers. These, it was judged, dictated against its adoption.

A second concept considered was salting ARVN forces with US leadership in command positions. The analysis indicated that for political and psychological reasons, it would probably be best to put two US officers and three US NCO's in an instructor's role with each RF company rather than in a command role. Command would be exercised by the RF company commander but he would be required to follow the directions of the US training team leaders.

The conclusion reached was to continue the "salting" experiment with expansion in view if the initial results were good. There is no evidence that anything became of the experiment.

None of this seriously worried top RVNAF leadership; so they indulged in more interesting international activities. In May, talks started between Lao and GVN military staffs. The occasion was planning for barrier extension westward, but Washington realized at once that there was little the US could do to limit the contacts to that subject. In July, it was discovered that GVN was using Chinat agents, disguised so as to appear to be South Vietnamese with Nung ancestry, on covert operations. JCS disapproved of the effort despite appeals from COMUSMACV. The Chinats appeared to be the result of a secret bilateral agreement concluded during 1966. In September, MACV reported that GVN had occupied Pattle Island in the Crescent Group about 170 miles south of Hainan with the intention of constructing an airfield there. Because these islands are already claimed by Communist and Nationalist Chinas and the Philippines as well, MACV advised against US cooperation in the adventure.

O. THE GVN PRESIDENTIAL ELECTiON

Pre-nomination maneuvering and legitimacy of the Presidential campaign were the subjects which occupied American attention above all else. The first task facing Ambassador Bunker as he arrived on station in April was to oversee the delicate transition of GVN to a government based upon a popular election recognized by the world to be fair.

Premier Ky was already openly acting like a Presidential candidate in April. General Thieu was informed that the generals had endorsed Ky while Thieu was absent from the scene recovering from an appendectomy. That was not sufficient to scare Thieu from the race; so the US Mission became increasingly worried that the Thieu-Ky competition threatened the indispensable unity of the military. Dickering remained behind the scenes until Ky formally announced his candidacy on May 12. This served only to intensify the rivalry. By mid-June, the Thieu-Ky confrontation showed no signs of moving toward satisfactory resolution. Basically, Ambassador Bunker believed in an indirect approach. He did not hesitate to approach Ky and Thieu individually on the broader issues of arbitrary press censorship, questionable tactics being pursued by Ky supporters six weeks before it was legal to campaign, or unity of the Armed Forces. But, on the confrontation between the two candidates, Bunker's ploy was to hold an informal luncheon to which the two principals were invited. In the end they had to work out their own solution. They did. At the end of June the 50-60 officers of the Armed Forces Council met in a 2-day, continuous session at which both Thieu and Ky performed histrionics. The surprising result was that Ky agreed to run for the Vice-Presidency on Thieu's ticket. The Mission sighed in relief and agreed that Bunker's approach had worked. The Ambassador congratulated the candidates, and Thieu obligingly announced that if elected he would appoint a civilian as Premier. Ky agreed. The RVNAF chief of staff had earlier announced that there would be no officially endorsed military candidate; yet the Constituent Assembly conveniently approved a draft article which permitted Thieu and Ky to run without resigning from the Armed Forces. By mid-July, the Assembly had voted acceptance of the Thieu-Ky ticket while disallowing one headed by Big Minh who remained in nearby Bangkok as a potential threat to the younger pair. With only a few hitches, the campaigning proceeded so as to satisfy American observers that it was acceptably fair; and the resultant Thieu-Ky victory was a surprise only in its smaller-than-expected plurality.

P. BLUEPRINT FOR VIETNAM, AUGUST, 1967

State suggested that completion of the election process was a proper occasion upon which to consider several proposals, including increased leverage, for advancing the total American effort in South Vietnam. Bunker also mentioned this when he transmitted the paper, "Blueprint for Viet-Nam." The "Blueprint" ranged widely over all topics and struck a consistently optimistic note:

Progress in the war has been steady on all fronts. We can defeat the enemy by patient, continued, and concerted effort. The way to do this is for the GVN and its allies (a) to reinforce and accelerate the progress already made; (b) to markedly improve the interdiction of infiltration of North Vietnamese troops and supplies; (c) to upgrade, accelerate, and coordinate the pacification program in the countryside; and (d) to maintain political and economic stability and support the development of the constitutional process.

We still have a long way to go. Much of the country is still in VC hands, the enemy can still shell our bases and commit acts of terrorism in the securest areas, VC units still mount large scale attacks, most of the populace has not actively commited itself to the Government, and a VC intrastructure still exists throughout the country. Nevertheless, the situation has steadily improved since the spring of 1965....

Now, that the initiative is ours and the enemy is beginning to hurt, maximum pressure must be maintained on him by (a) intensifying military activity in the South; (b) developing new methods of interdicting infiltration; (c) bombing all targets in the North connected with the enemy's war effort that do not result in unacceptable risk of uncontrolled escalation; (d) accelerating the program of pacification (including better security more effective attacks on the infractructure, ' stepped up National Reconciliation and Chieu Hoi programs, a greater involvement of the people in solving their own problems at the village and hamlet level; (e) encouraging reforms in the government structure and continued improvement in the armed forces; (f) attacking the problem of corruption; (g) using influence to effect a strong, freely elected government with political stability; and (h taking actions necessary to the continued growth and stability of the economy .

In a subsequent message Ambassador Bunker stated more specifically that the United States should use its influence to get GVN to do the following:

A. Seek broad based popular support.

(1) Appoint prominent civilians including some leading opposition candidates, in new government.
(2) Use appointments to insure association of a new government with various religious and political groups.
(3) Adopt a program and identify it with that of a former national hero, "so as to give the new government an idealistic appeal or philosophy which will compete with that declared by the VC." Bunker suggested Nguyen Hue.

B. Work on a more continuous, although informal basis with US Mission. Bunker suggests regular weekly or semi-monthly lunches.

C. Adopt a program to include the following:

(1) Public recognition of the

(a) Necessity for every Vietnamese to contribute to the war effort.
(b) Need to change draft laws.

(2) Reaffirm on-going programs relating to RVNAF, including

(a) MACV program of ARVN improvement through merit promotions and a military inspectorate.
(b) Elimination of corrupt, inefficient leaders.
(c) Expansion of RF/PF and adoption of the MACV recommended system of US advisory teams operating with RF/PF for 6-month period.
(d) Greater integration of US forces or joint operations.
(e) Reorientation of the concept of the Pacification Role of ARVN, RF, and PF in accordance with MACV suggestions-from static support to mobile, area security with night patrolling and a system of inspection and grading to insure implementation.

(3) Make the Province Chief the "key" man in pacification--giving him operational control over all military and paramilitary forces engaged in pacification. He should appoint district chiefs. He should report to Corps commander on military matters and to central government on civil matters. An inspection, training, and rates system should be established.

(4) Centralize all rural development efforts in non-RD hamlets under one coordinated control in some manner as is now done in the Ministry of Revolutionary Development for RD hamlets.

(5 Construct an adequate number of processing and detention centers in provinces and permanent prisons on islands on priority basis together with passing of laws that it is a crime to be a VC civilian cadre.

(6) Pay higher salaries to selected GVN officials, including the military, particularly those officials able to control corruption or in a position to be tempted by corruption.

(7) Reaffirm National Reconciliation and Chieu Hoi programs.

(8) Grant villages the power to enforce land rental laws.

(9) Adopt the whole of the "operation Take-off" pacification program prepared by MACCORDS.

(10) Establish joint council procedures over expenditure of counterpart piasters by reinstituting sign-off by US advisors at province level.

(11) Revitalize the veteran's program.

(12) Increase receipts from domestic taxes and tariffs, and revise monetary policies.

Q. THE LEVERAGE STUDY

On August 31 State transmitted a study by Hans Heymann and Col. Volney Warner on the subject of leverage. It reviewed the rationale for leverage and considered a whole array of possible techniques:

In anticipating the US/GVN relationship in the post-election period, it is generally agreed that the US should find ways to exercise leverage with the Vietnamese government which are more commensurate in degree with the importance of the US effort to South Vietnam's survival and which reflect the climate of growing restiveness in the US . . . In its impatience to get results and make progress, the US has increasingly resorted to unilateral programs and action with inadequate consultation with the Vietnamese. On the other hand, the indiscriminate and careless exercise of US leverage could undermine the self-respect of the Vietnamese government in its own eyes and in the eyes of the South Vietnamese people.

....To be effective, US leverage must be exercised in the context of a relationship of mutual respect and confidence, and in ways commensurate with the objective sought. It must also be backed by credible sanctions.

The various tools of leverage available to us are described below. It is not proposed that all of these tools be used at any given time or that some of them be used at all. However, they represent a selection of arrows that might be placed in the US Mission quiver for use as the Mission Council deems appropriate. It will be particularly important to construct a credible and effective system of US leverage for use as necessary and appropriate in connection with the list of priority program objectives which we shall be seeking to achieve with the newly elected government in the immediate post-election period.

Tools of Leverage

A wide range of possible techniques and forms of influence is available at each level of the American presence in Vietnam. A few of these leverage devices are now in use, mostly at the initiative of individual Americans on the spot, but not as part of an organized framework of influence. Other devices have been instituted in the past, only to be subsequently abandoned because of fear of their misuse, actual misuse, or inadequate understanding of their value.

In the following list we array a range of possible instruments of influence that the US might employ, with some indication of their applicability.

A. Rapport....
B. Joint Planning and Evaluation.....
C. Joint Inspection and Audit....
D. Joint Secretariats....
E. The JCRR approach: Establishing a joint, autonomous, dually-staffed, foundation-like organization headed by a board of commissioners appointed by the two heads of state, to administer all forms of non-military AID....
F. Contingency Funds and Special Resources....
G. Control Over Expenditure of Counterpart Piasters....
H. Retention of Resources in US Channels....
I. Joint Personnel Management--to institute career incentive, selection, and removal policies....
J. Joint Command.....
K. Policy-level Monitoring System--to monitor the exercise of authority of key officials of the GVN....
L. Withholding US Support--at levels below Saigon, the authority of US senior advisors to cut off or withdraw US civil and military support from Vietnamese activities or operations within their area of responsibility would constitute powerful leverage.....

At the Saigon level, a range of extremely tough options is available, encompassing selective withdrawal of US support for Vietnam persuading the GVN that these are in fact available requires the will to use them and the political ability to follow through if our hand is called. Options would include halting further troop deployments, standing down US unit operations, suspending CIP and MAP assistance, and so forth.

Ambassador Komer replied on September 19. He recalled his deep interest is subject and discussed at length both present and potential techniques. His views seemed considerably mitigated by his several months in Saigon, for "rapport" and "persuasion with implied pressure" headed the list of what was presently being done. He concluded by saying, "All of the above forms of leverage, and yet others, could be useful at the proper time and in an appropriate way. But they must be applied with discretion, and always in such manner as to keep the GVN foremost in the picture presented to its own people and the world at large . . . The exercise of leverage in a personal manner and hidden from the public view is likely to be most effective, while of the more operational means establishment of combined organization under a JCRR-type concept, to include joint control of resources, would be most desirable. In sum, we're gradually applying more leverage in Pacification, but wish to do so in ways that least risk creating more trouble than constructive results."

R. POSTLOGUE

New plans and new hopes marked the immediate post-election period. The story of US-GVN relations continues, but this narrative must end. In conclusion it seems appropriate to quote from the MACCORDS report covering Bien Hoa province for the period ending December 31, 1967.

1. Status/or the RD Plan:

The GVN in Bien Hoa Province has not met with any measure of success in furthering the pacification effort during 1967. Those areas that do represent advances (such as road openings or repairs or construction, breaking up of main line VC units, etc.) have all been the result of unilateral US actions. It was perhaps naively thought that these US accomplishments would stand as an inspiring example to the GVN and would prompt them to not only continue their efforts but, further, to expand and intensify the fight. However, during 1967 in Bien Hoa Province, this has not been the case. The GVN at all levels has grown weaker, become more corrupt and, today, displays even less vitality and will than it did one year ago....

Advisory Leverage: This subject has been an extremely sensitive and controversial issue in both GVN and US circles. However, as painful as it must be to address, the harsh truth is that given a showdown situation or an intolerable divergence between GVN and US methods, the US advisor will lose. CORDS, Bien Hoa has gone to extraordinary lengths in reporting on both corrupt and incompetent officials and practices. The reason for these efforts has been to illustrate clearly to higher US authorities, the enormity of the problems facing the advisor on the province/District level. CORDS Bien Hoa, as perhaps all other echelons of US advisors, is ultimately powerless to rectify or even significantly alter the GVN intentions and performance. The Vietnamese in the street is firmly convinced that the US totally dominates the GVN and dictates exactly what course shall be followed. However, the bitter and tragic truth is that the US has been kept at such a distance from GVN circles and power that in joint councils or plans our views may be heard, some portions of our logic may be endorsed but with confrontations or matters that represent any truly revolutionary departure from existing GVN practices etc, we are light weights and presently do not possess the leverage or power to carry the day.

ARVN Performance: There are presently two ARVN battalions (3/43 and 2/48) who are directly assigned to support RD in Bien Hoa. With the exception of the 1st Bn, 48th Regt which served in the Phu Hoi Campaign area earlier in the year, ARVN performance has been less than satisfactory. The units have demonstrated the same age-old ills that have collectively led to our present commitment of US forces....

GVN Officials Interests: The primary interest of GVN officials in Bien Hoa Province is money. The lucrative US presence with all the various service trades that cater to the soldier, have created a virtual gold mine of wealth which is directly or indirectly syphoned off and pocketed by the officials. Thus, revolutionary development with all the ultimate implications of broadening the governing base of this society, is viewed as some sort of necessary device that needs to be propped up and nominally catered to by the GVN in order to keep US and Free World's interest and faith intact. However, any serious or meaningful gesture in support of a program which ultimately is designed to displace the powers-to-be (or at least force them to become accountable or share in the power) is not forthcoming. Infrastructure is not attacked even though the target is known; budgets are not spent although the funds are available; GVN officials steadfastly refuse to visit their districts or villages or hamlets although it is there that most immediate problems exist. The list of limpid, half-hearted efforts to prosecute the war is endless.

Material Cutoffs and Shortages: In August after several months of negotiation, CORDS, Bien Hoa was forced to cut off further shipment of replenishment stocks into province. The reasons for this action were many but could be reduced to sloppy, shoddy and highly questionable logistical practices and procedures on the part of the GVN. After eleven weeks, the Provincial GVN finally agreed to carry out the reforms and renovations as suggested by CORDS. However, that eleven-week gap in the flow of materials (particularly during a period most noted for its relatively high degree of GVN action) had a significant effect on curbing construction programs and causing even more delays. Then, as soon as this issue was resolved, it was learned that cement and roofing weren't in supply and rationed quotas for the remainder of the year further compounded the damage caused by earlier material shortages.

To compensate, in part, for these factors, CORDS has had to increasingly rely on the resources, skills and capabilities of resident US military units. These units have, without exception, effectively filled the gaps and their efforts have succeeded in reducing the critical road situation that has been worsening throughout the years. Their action in many other areas has been highly commendable and CORDS Bien Hoa (as well as the GVN itself) owes a great deal to these units and their commanders who have unselfishly devoted themselves to furthering pacification. However, for all their efforts, for all the resources either expended or on hand, the disturbing truth in Bien Hoa is that it still remains for the government, with forceful and meaningful direction from above, to begin to assume the responsibility for prosecuting this war and the pacification effort. Thus far, the GVN has not done this and it is the considered opinion of CORDS Bien Hoa that unless major revisions are brought about in the factors raised here, there is only to be a continuation of the same ordeal with the accompanying frustrations, inaction, corruption and incompetence. A continuation of this does not connotate stability or even maintenance of the status quo; it spells regression and an ever widening gap of distrust, distaste and disillusionment between the people and the GVN.


Glossary of Acronyms and Terms


Go to Volume 1, Chapter 1 of the Pentagon Papers, "Background to the Conflict, 1940-1950." pp. 1-52

Go to Volume 1, Chapter 2 of the Pentagon Papers, "U.S. Involvement in the Franco-Viet Minh War, 1950-1954," pp. 53-107

Go to Volume 1, Chapter 3 of the Pentagon Papers, "The Geneva Conference, May-July, 1954," pp. 108-178.

Go to Volume 1, Chapter 4 of the Pentagon Papers, "U.S. and France in Indochina, 1950-56," pp. 179-241

Go to Volume 1, Chapter 5 of the Pentagon Papers, "Origins of the Insurgency in South Vietnam, 1954-1960," pp. 242-314

Go to Volume 2, Chapter 1 of the Pentagon Papers, "The Kennedy Commitments and Programs, 1961,"pp. 1-127

Go to Volume 2, Chapter 2 of the Pentagon Papers, "The Strategic Hamlet Program, 1961-1963," pp. 128-159.

Go to Volume 2, Chapter 3, of the Pentagon Papers, "Phased Withdrawal of U.S. Forces, 1962-1964," pp. 160-200.

Go to Volume 2, Chapter 4, of the Pentagon Papers, "The Overthrow of Ngo Dinh Diem, May-November, 1963," pp. 201-276.

Go to Volume 2, Chapter 5 of the Pentagon Papers, "US-GVN Relations, 1964-1967," pp. 277-407.

Go to Volume 2, Chapter 6 of the Pentagon Papers, "The Advisory Build-up, 1961-67," pp. 408-514

Go to Volume 2, Chapter 7 of the Pentagon Papers, "Re-Emphasis on Pacification: 1965-1967," pp. 515-623.

Go to Volume 3, Chapter 1 of the Pentagon Papers, "U.S. Programs in South Vietnam, Nov. 1963-Apr. 1965," pp. 1-105.

Go to Volume 3, Chapter 2 of the Pentagon Papers, "Military Pressures Against North Vietnam, February 1964-January 1965," pp. 106-268.

Go to Volume 3, Chapter 3, of the Pentagon Papers, "The Air War in North Vietnam: Rolling Thunder Begins, February-June, 1965," pp. 269-388

Go to Volume 3, Chapter 4, of the Pentagon Papers, "American Troops Enter the Ground War, March-July 1965," pp. 389-485

Go to Volume 4, Chapter 1, of the Pentagon Papers, "The Air War in North Vietnam, 1965-1968," pp. 1-276.

Go to Volume 4, Chapter 2, of the Pentagon Papers, "U.S. Ground Strategy and Force Deployments, 1965-1968," pp. 277-604.


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