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SENT TO: Amembassy SAIGON NIACT 4438

EYES ONLY ANBASSADOR FROM SECRETARY

Have this morning discussed situation with highest authority. He are disposed to back whatever your final decision is but before you actually finalize we want to be sure you have weighed all of the factors which concern us here.

He feel that what has happened does not reveal anything new about Diem but rather a basic and dangerous misunderstanding as between France and the U.S.

We have always known the qualities which Diem possesses and those which he lacks. Nevertheless our two countries agree d to support him in default of anyone possessing better qualifications. The only alternatives now suggested are the same persons who were regarded as unacceptable substitutes same months ago.

What has happened is that whereas the United States has been proceeding on the assumption that Diem would be backed as against any who might challenge him assuming that he had the capability, apparently the French have given their support only on the assumption that the Binh Xuyen would also be supported on an autonomous authority and that when they challenged Diem he would not be allowed to use force to assert his authority over it.

We can appreciate the reluctance of the French to see force used but if it cannot be used then what is the point of our supporting at great cost the national army which I thought it had been agreed was primarily to be an army for domestic security rather than an army to fight external aggression.

Rh