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1. The situation in Viet-Nam at the time of General Collins' arrival on November 7 might be described as follows:

A. The French had lost a disastrous battle at Dien Bien Phu and that Communist military victory had been compounded by a humiliating diplomatic defeat for the Free World at Geneva. The Communists had achieved a level of international recognition and position through these developments far exceeding any previous status.

B. Ngo Dinh Diem took office on July 7. He was the first "Nationalist" to assume tho Prime Ministership. He was and is, anti-French, anti-Communist and personally honest. He is politically inept, stubborn and suspicious. In his four months of responsibility he had ben faced with massive opposition, including a rebellious Army Chief who allegedly was an unwitting tool of the Communists, active French opposition and many other discouraging factors.

C. There is every evidence that the French did not want Diem to succeed. Reluctant acceptance by La Chambre (September) and Mendes-France (November) of the U.S. thesis of support of Diem, principally because of the lack of a better qualified candidate, may have eased French pressures against him but did not result in full French support.

2. Since General Collins' arrival the latter has attempted to achieve a rapid solution, at least partially based on the concept that Collins mission is temporary and a settlement appeared called for by the time of his originally scheduled departure in mid-January. (Since extended). General Collins' recommendations are now based on the circumstances of a satisfactory settlement prior to January 1. If no solution is found, he recommends:


 * a. Continued support of Diem for a short period but without committing specific U.S. aid programs.


 * b. Recalling Bao Dai, if acceptable to U.S.


 * c. Revaluation of our plans for assisting Southeast Asia.


 * d. If the situation continues without substantial progressive action to withhold support to tho Viet-nam Army and to increase support of the French Expeditionary Corps while evacuating our MDAP materiel.

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