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FIACT

FOR SECRETARY FROM COLLINS.

DEPARTMENT TELEGRAMS 4411 and 4412.

THIS MESSAGE IN TWO PARTS. PART I FOLLOWS.

PART I. SUCCESSIVE STEPS RECOMMENDED AS FOLLOWS:

1. TRANSFER NATIONAL POLICE AND SURETE FROM BINH XUYEN. TWO POSSIBLE METHODS OF DOING THIS DEPENDING ON WHETHER OBJECTIVE IS TO SAVE FACE FOR DIEM OR BINH XUYEN, POINT ABOUT LATTER BEING TO SECURE THEIR PEACEFUL COOPERATION WITH NEW GOVERNMENT.

A. TO MAKE IT EASIER FOR DIEM TO RESIGN AND PREVENT BINH XUYEN FROM CLAIMING VICTORY IN PRESENT CRISIS, WE WOULD INSIST AS PRIOR CONDITION ON TRANSFER OF POLICE TO GOVERNMENT BY ORDINANCE ISSUED BY DIEM, BUT OPENLY SUPPORTED BY BAO DAI AND POSSIBLY FRENCH AND U.S. PUBLIC SUPPORT BY BAO DAI PROBABLY ESSENTIAL TO AVOID FURTHER BLOODSHED. IN THIS CASE BINH XUYEN MIGHT BE FORCED TO BOW BUT MIGHT TRY TO SABOTAGE NEW GOVERNMENT IN VARIETY OF WAYS. (I SHOULD NOTE THAT FRENCH WILL OPPOSE THIS STEP. ALTHOUGH HE ONCE FAVORED IT, ELY HAS NOW SAID HE COULD NOT AGREE TO IT. FRENCH FEAR BLOODSHED IF BINH XUYEN LOSE CONTROL OF POLICE UNDER DIEM AND BELIEVE NEW PRIME MINISTER SHOULD HAVE POLITICAL ADVANTAGE OF REGAINING CONTROL OF POLICE FOR GOVERNMENT).

B. IN ORDER INDUCE COOPERATION OF BINH XUYEN WITH NEW GOVERNMENT, IT MIGHT BE ADVISABLE TO OFFER BAY VIEN A CHANCE TO SAVE FACE BY HIS "VOLUNTARILY" PROPOSING THAT CONTROL OF POLICE BE TRANSFERRED TO NEW GOVERNMENT. I HAVE JUST HAD CONVERSATION WITH FOREIGN MINISTER DO. WITHOUT INDICATING Rh