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SENT DEPARTMENT 2656; REPEATED INFORMATION PARIS 943, GENEVA 193.

Department telegram 4272 sent Paris repeated Geneva TOSEC 269, Saigon 2418 was delayed in receipt due to extensive servicing. This accounts for our tardy comment.

I am in full agreement with general tenor of reference telegram and have only minor observations to make. Those are:

Re numbered paragraph 3-C, it might make French declaration more palatable both in France and in Asia generally were we likewise to announce intention to withdraw US technical and military assistance as soon as practicable. It must not be forgotten that in Communist and neutralist Asian eyes US is principal threat in Eastern Asia and not what is regarded to be a decadent France. Since Communist propaganda has already overstressed alleged unduly large role of FOA Mission here and Peking radio daily proclaims that US is sending military equipment to slaughter Asiatics, such a declaration might be useful from psychological warfare point of view.

Reference paragraph 4-A, it is essential that we commence forthwith to review terms of reference which now limit MAAG to purely logistical function. Under present set of rules, General O'Daniel is being asked to train Vietnamese troops with ever present French veto hanging over his head. In my opinion, we should approach French Government on terms of September 29, 1953 agreement, point out that Navarre plan no longer exists, that conditions have changed, and that new terms of reference for MAAG should be drafted forthwith.

Implicit in paragraph 3-A but not specifically touched upon is problem of ancillary agreements which will spell out turn-over by France to Vietnam of sovereignty in specific fields as, for example, control of currency, Custom Union, Civil Aviation, and Mixed Courts. French, whether through incapacity of government to move in present Parliamentary crisis or by deliberate design, have not moved at all in completing these agreements although telegrams from Embassy Paris have indicated that so far as experts were concerned, these accords were almost ready Rh 44043