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JUL 9 1954

Dear Mr. Murphy:

I refer to my letter of June 19th regarding U. S. assistance to the French in the formation and equipping of three light infantry divisions for use in Indo-China. The evaluation referred to in that letter has been prepared by the Joint Chiefs of Staff, as set forth in the attached memorandum, with which I concur.

Since no additional indication of French intentions has been received in the Department of Defense and the new Premier has promised to end the war in Indo-China by 20 July or resign, I shall leave to you the timing of any additional U. S. actions which may be desired. I desire to point out, however, that in the event a formal request is received there is, in addition to the points contained in the Joint Chiefs of Staff memorandum, the additional problem raised by Section 106a(1) of the Mutual Security Act of 1954 (Richards Amendment), as approved by the Committee on Foreign Affairs, which could bar the United States from replacing this equipment.

In the event that you determine that this French plan is worthy of further action, I suggest that the above point be included in those requiring resolution since the impact on NATO of the removal of equipment, if permanent, would be considerable.

Incl — 1
 * Copy 3 of JCS Memo, 24 June 1954

The Honorable Robert Murphy Deputy Under Secretary of State Department of State

cc: General Bonesteel Rh