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. However, since my arrival in Saigon I have observed some improvement in Diem's conduct of public affairs, and I believe that with continued staunch American support he may be able to succeed. It should be noted that the problems he faces would daunt the most experienced statesman. No one else is in sight at the present time who could usefully replace Diem. However, as a last resort, it may become necessary to call upon the personal presence and support of Bao Dai to enable Diem to solve the complex problem of his relations with the sects and the ultimate position of these groups in the national society. This would have to be done, however, under certain guarantees, firmly agreed to in advance by Bao Dai, as indicated in pertinent telegrams I have sent the Department.

Rh