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Rh U.S. appropriations available in Vietnam, Vietnamese calendar year expenses have normally been paid from funds appropriated for the U.S. fiscal year.

. However, if it is necessary to reduce Vietnam's share of the $700,000,000 currently appropriated for Southeast Asia, it would be possible to limit the amount made available to Vietnam to $172,300,000 (required for 1st half of CY 1955) if we could be assured of $155,000,000 (required for 2nd half of CY 1955) from new FY 1956 appropriations.

. Estimated costs for CY 1956 are:

. The requirement for U.S. funds for the second half of CY 1955, $155.0 million, added to the requirement for U.S. funds for the first half of CY 1956, $103.2 million, or a total of $258.2 million, would be the total requirement for U.S. FY 1956 appropriations. A contingency fund of $20 million may be required for FY 1956 as indicated in Enclosure "B".

5. In view of the importance of Vietnam to all of Southeast Asia, I an convinced that the United States should expend the funds, materiel, and effort, required to strengthen the country and help it retain its independence. I cannot guarantee that Vietnam will remain free, even with our aid. Buy I know that without our aid Vietnam will surely be lost to Communism. If the chances of success are difficult to calculate, the results of a withdrawal of American aid are only too certain, not only in Vietnam but throughout Southeast Asia. Such a withdrawal would hasten the rate of Communist advances in the Far East as a whole and could result in the loss of Southeast Asia to Communism. In my opinion, the chance of success is not only worth the gamble; we cannot afford to let free Vietnam go by default.

Rh