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Rh-2- OUR POSSIBLE THINKING, I ASKED DO IF HE THOUGHT BAY VIEN MIGHT RELINQUISH POLICE CONTROLS TO ANY NEW GOVERNMENT. DO SAID HE FELT THAT WITH PROPER APPROACH, THIS MIGHT WELL BE POSSIBLE. HE INSISTS IT WOULD NOT BE POSSIBLE FOR DIEM TO ACHIEVE THIS. DO FULLY AGREES THAT ANY NEW GOVERNMENT WOULD HAVE TO TAKE OVER POLICE CONTROLS, BUT FEELS STRONGLY THAT EVERYTHING POSSIBLE SHOULD BE DONE TO SECURE COOPERATION OF BINH XUYEN WITH NEW GOVERNMENT. I BELIEVE THAT IF BAY VIEN WERE CONVINCED AHEAD OF TIME THAT U.S., FRANCE, BAO DAI AND ANY NEW PREMIER WOULD INSIST ON GOVERNMENT TAKING OVER POLICE, HE MIGHT WELL AGREE TO MAKE THIS OFFER HIMSELF. I BELIEVE THIS METHOD PREFERABLE TO 1A ABOVE UNLESS WASHINGTON FEELS DIEM'S PRESTIGE AND PERHAPS OUR OWN MUST BE PROTECTED BY FOLLOWING METHOD 1A.

2. PERSUADE DIEM TO RESIGN, OR IF HE REFUSES, HAVE BAO DAI RELIEVE HIM.

A. BETTER SOLUTION WOULD BE RESIGNATION BY DIEM. IF METHOD 1A ABOVE IS FOLLOWED, DIEM COULD BOW OUT SOMEWHAT GRACEFULLY "IN ORDER TO HEAL THE WOUNDS" CAUSED BY RECENT EVENTS. WE COULD POSSIBLY DRAFT A STATEMENT FOR HIM.

B. DISTASTEFUL AS IT WOULD BE TO USE BAO DAI IF DIEM WILL NOT RESIGN, I SEE NO OTHER LEGAL METHOD OF REPLACING HIM.

C. FOR TIMING AS TO NOTIFICATION OF DIEM, SEE PARAGRAPH 3F BELOW.

3. CHOOSE SUCCESSOR TO DIEM AS PRESIDENT OF COUNCIL.

A. I BELIEVE IT IS MOST IMPORTANT TO PLACE ON FRENCH THE ONUS AND RESPONSIBILITY OF DESIGNATING DIEM'S SUCCESSOR. FRENCH ARE ALL TO READY TO PLACE ONUS DIEM'S LACK OF SUCCESS ON U.S. IT WOULD BE PREFERABLE THEREFORE FOR THE HEAD OF NEW GOVERNMENT TO BE PROPOSED BY FRENCH AND CONCURRED IN BY THE U.S. ELY INDICATED THAT HE WOULD FAVOR QUAT, DO OR PERHAPS EVEN EX-DEFENSE MINISTER MINH. HE STIPULATED AS PRIMARY REQUISITE THAT ANY NEW GOVERNMENT MUST AVOID TAINT OF COLONIALISM. HENCE I BELIEVE THAT IF ELY'S ADVICE WERE FOLLOWED

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