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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011  Until this period, few high or middle level officials dared to criticize Diem or any member or the ruling family or to attack the   even privately, while non-Communist anti-Diem elements outside the government had limited themselves almost entirely to guarded expressions of dissent. Diem had heretofore not hesitated to remove any critical official, including cabinet members and military leaders, or to use the government's varied resources to pressure and otherwise silence grumblers outside the government. Fear of unfavorable reaction from the US and of precipitating greater active opposition probably has kept Diem from dismissing critics within his official family and, with exception of those involved in last year coup attempt, from suppressing anti-government activities among Saigon intellectuals and ex-bureaucrats.

Unrest has also increased among the peasantry principally because of the government's inability to assure adequate protection from depredations and taxation by the Communist guerrillas and terrorists but partly because of the cumulative effort of excessive and roughshod methods by local security and administrative officials. Although dissatisfaction in the countryside is difficult to measure because of the peasantry's traditional political apathy and suspicion of government, it does not appear to be widespread. It is probably limited to areas where the level of Communist insurgency and the excesses of government control are highest and would probably be alleviated by a general improvement in the security situation and by less government coercion. Some recent reports indicate that a trend in this direction is already noticeable due to the increased effectiveness of military and security forces, suspension of forced labor practices, and greater government effort to discipline and remove corrupt, harsh, and unpopular local officials. If these problems are not dealt with effectively, rural discontent may in the long run develop as the principal source of political instability. In the short run, neither the government nor the Communists seem capable of building up a ground-swell of positive popular support among the peasantry or using it extensively as a militant force.

The impact of these developments on the Vietnamese military establishment, however, appears to be much more serious. From senior down through junior officer ranks, there has been a growing concern over the course of the fighting against the Communists. Morale particularly among junior and middle grade officers and non-commissioned personnel has suffered further from extensive commitment without sufficient rotation in the seemingly endless pursuit of the Communists under the most adverse conditions of guerrilla warfare. Λ fairly recent unconfirmed report has alleged growing neutralist sentiment among the junior army officers. The concern of a significant segment of the top military leadership is further aggravated by Diem's reluctance to permit them a greater role in the planning of operations against the Communists, by his frequent disregard of the regular channels of command, and by the activities of the Rh