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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011  and programs, all of which turned out to be pretty general and fuzzy, comprised a less important part of the report than the discussion of Vietnamese military requirements. Here the study group reflected the instructions of the two governments. On the basis of the Staley Report, the U.S. agreed to support a further increase of 30,000 in the RVNAF, but deferred a decision on the balance of the South Vietnamese, request on the grounds that the question might not have to be faced since by the time the RVNAF reached 200,000 men, sometime late in 1962, the Viet Cong might already be on the run. The Staley Report also contained what by now had already become the usual sorts of nice words about the importance of social, political, and administrative reforms, which turned out to have the usual relevance to reality. The U.S. was still sticking to the May formula of trying to coax Diem to reform, instead of the equally unsuccessful January formula of trying to pressure him to reform.

The other issue -- the request for "elements of the American Armed Forces" -- was left completely obscure. From the record available, we are not sure that Diem really wanted the troops then, or whether Kennedy really was willing to send them if they were wanted. All we know is that Diem included some language in his letter that made the request a little ambiguous, and that Washington -- either on the basis of clarification from Diem's aide who delivered the letter, or on its own initiative, or some combination of both -- interpreted the letter as not asking for troops, and nothing came of the apparent request.

A new, and much more serious sense of crisis developed in September. This time the problem was not directly Laos, but strong indications of moderate deterioration of Diem*s military position and very substantial deterioration of morale in Saigon. There was a sharp upswing in Viet Cong attacks in September, including a spectacular raid on a province capital 55 miles from Saigon during which the province chief was publicly beheaded by the insurgents. At the end of September, Diem surprised Nolting by asking the U.S. for a U.S.-GVN defense treaty. By Diem's account the loss of morale in Saigon was due to worries about U.S. policy growing out of the Laos situation. Both U.S. officials in Washington and South Vietnamese other than those closest to Diem, though, put most of the blame on deterioration within South Vietnam, although the demoralizing effect of Viet Cong successes was unquestionably magnified by uncertainties about the U.S. commitment to Vietnam. In response, President Kennedy sent General Taylor and Walt Rostow, then both on the White House staff, to Vietnam, accompanied by some less prominent officials from State and Defense.

What Taylor and Rostow reported was that Saigon faced a dual crisis of confidence, compounded out doubts arising from Laos that the U.S. would stick by South Vietnam, and doubts arising from the Viet Cong successes that Diem's unpopular and inefficient regime could beat the Viet Cong anyway. The report said that a U.S. military commitment in Vietnam was needed to meet the first difficulty; and that the second could best be met by supplying a generous infusion of American personnel to all levels of the Vietnamese government and army, who could, it was hoped, instill the Vietnamese with the right kind of winning spirit, and reform the regime "from the bottom up" Rh