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 E. Quite regardless of future developments, episodes of last week, featured by increasing strain in French-Vietnamese relations, cannot help but severely jeopardize France's long range interests in Vietnam. Of late one hears less and less mention of maintenance cultural and economic interests and influence and more and more of threats that France will drop responsibilities and withdraw FEC. We believe this to be passing phase, however.

F. Reference the activities of Revolutionary Committee and States General local French have same fears that we do. French are convinced that Revolutionary Committee is penetrated by Viet Minh agents, but have so far been unable to give us any conclusive proof. They are also skeptical about the States General being able to modify radical resolutions of the Revolutionary Committee.

G. I think it is fair to say that French are convinced that Diem desires overthrow Bao Dai and will continue efforts to do so irrespective of current activities of Revolutionary Committee.

H. As indicated in recent telegrams, General Ely and the Commissariat General in Saigon have become so emotional in their bitter opposition to Diem and his entourage, that I fear they have lost some of their objectivity as to popular reaction to Diem's recent moves, his hold on the Army, and his ability to deal with the Binh Xuyen. They are quite convinced that serious warfare will be initiated by the Binh Xuyen, and that anti-French sentiment fomented by Diem and perhaps Viet Minh may still cause serious outbreaks in foreign sections of Saigon.

KIDDER Rh