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 (j) In the final analysis, they will retain a position of flexibility in order to follow whichever course of action appears most likely to assure them the most advantageous position, whether that should be to continue to support U.S. policy, to seek a rapprochement with the Viet-Minh, or to withdraw completely from Viet-Nam.


 * The successful accomplishment of U.S. programs for South Viet-Nam cannot be assured through French implementation of such programs as the French will only accept the concept of these programs insofar as they further French policy in the area.

3. Bao Dai, in his position as Chief of State, has the authority to appoint or dismiss the Cabinet in Viet-Nam at any time. His attitude has recently been favorable to the U.S. but his vulnerability to the influence and intrigue of the French and anti-Diem Vietnamese could sway him at any time to dismiss Diem and eliminate the Government on whose existence the U.S. predicates its policies. This factor tends to weaken the basis on which current U.S. programs are established.

South Viet-Nam.
 * The influence of Bao Dai in his position of Chief of State is a constant menace to the successful implementation of U.S. programs in

4. Diem has proven to be an individual who, in addition to being guilty of nepotism in his government and of being reluctant to utilize the capabilities of some of the more dynamic Vietnamese personalities available to him, has demonstrated a marked inability to understand the political, economic and military problems associated with Viet-Nam. The concept of making U.S. support dependent exclusively on Diem's continuance in power is not valid Rh