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-2- US political psychological actions re SE Asia produce strong positive support from nations having primary interest SE Asia. Develop strong democratic state oriented toward West. By persuading Government Vietnam to announce complete independence, and for French to announce date of withdrawal French forces and date Vietnam becomes entirely free. Detailed implementation above included in plan.

B. Military establish sound realistic modern system national military service. Specialists from US selective service employed this effort. Evaluate and establish sound personal policies. Establish national intelligence agency and other intelligence programs all fields. Study and reorganize Defense Ministry and Armed Forces. Establish for each military service streamlined and highly effective training organization to include staff training and field training agencies, develop division training camps, RTC, et cetera. Logistics development. Signal development. Budget and fiscal development. Develop independent Vietnam army of divisional-sized units.

C. Naval and air establish sound economic program to provide for realistic development resources including rebuilding railroads, developing highway system, agrarian reforms, housing construction, schools, development sanitation and hygiencehygiene [sic].

We believe such plan last resort solution on salvaging remaining Vietnam and offer it for consideration in formulation US policy for SE Asia. Ambassador concurs. Ambassador generally concurs with objectives above outline and with my analysis situation. He approves entire report as a timely, useful initial plan, although he has reservation as to some of methods proposed, as he doubts necessity of US to become quite so far involved in operation of this government except on military training side. Comment: I feel this is war in every sense. Wartime methods, therefore, are in order all fields until emergency passed.

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