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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011  with the major flood disaster in the southwestern provinces have combined to create a deep and pervasive crisis of confidence and a serious loss in national morale.

B. In the field, the military operations against the VC are ineffective because of the absence of reliable intelligence on the enemy, an unclear and unresponsive channel of command responsibility in the Armed Forces, and the tactical immobility of the VN ground forces. This immobility leads to a system of passive, fragmented defense conceding the initiative to the enemy and leaving him free to pick the targets of attack. The harassed population exposed to these attacks turn to the government for better protection and the latter responds by assigning more static missions to the Army units, thus adding to their immobility. In the end, the Army is allowed neither to train nor to fight but awaits enemy attacks in relative inaction.

C. The situation in the Saigon is volatile but, while morale is down and complaints against the government are rife, there is not hard evidence of a likely coup against Diem, He still has no visible rival or replacement.

2. To cope with the foregoing situation, we are considering recommending a number of possible forms of GVN-US cooperation to reverse the present downward trend, stimulate an offensive spirit and buildup morale. In company with Ambassador Nolting, Dr. Rostow and Mr. Mendenhall, I discussed some of these Oct 24 with Diem and Thuan, advancing them as personal ideas to which I was seeking their informal reaction. The following outline, distributed in French translation at the start of the interview, indicates the scope of the discussion.

A. Improvement of intelligence on V.C.: the available intelligence on V.C. insurgency is inadequate both for requirements and for basis of judgment of situation at governmental levels. A joint GVN-US effort should be able to improve organization, techniques and end product to mutual advantage both parties.

B. Joint survey of security situation at provincial level: The current situation can best be appraised at provincial level where the basic intelligence is found, the incidents occur, and the defenses are tested. The problems vary from province to province and hence require local analysis on the spot. Such a survey should result in better understanding of such important matters as quality of basic intelligence on V.C., needs of civil guard and self defense corps, command relationships between provincial and Army officials and conditions under which assumption of offensive might be possible.

C. Improvement of Army mobility: it appears that size of ARVN can not be much increased before end 1962; to make it more Rh