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EYES ONLY SECRETARY FROM ACTING SECRETARY

EYES ONLY HEATH

DULTE 5.

For your ready reference we quote paragraph 4 of the September 29 Minute of Understanding:

QUGTE With respect to Viet-Nam, the representatives of France and the United States agreed that their respective governments support Ngo Dinh Diem in the establishment and maintenance of a strong, anti-Communist and nationalist government. To this end France and the United States wi11 urge all anti-Communist elements in Viet-Nam cooperate fully with Government of Ngo Dinh Diem in order counter vigorous1y the Viet Minh and build a strong free Viet-Nam UNQOUTE.

Brief estimate political situation South Viet-Nam follows:

1. While General Hinh's threat to execute military coup seems to have been averted, Hinh and his associates Xuan and Bay Vien continued hold virtual veto power over Diem and his government. Prolongation of crisis leads to inevitable deterioration of government's position and prospects, even if it is no longer menaced by violent overthrow.

We do not repeat not feel that sufficient effort has yet been made to carry Rh