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 example of confusion conflicts between USOM and military recommendations, in cases of recommendations to the government of Vietnam and Washington concerning the size of the military budget, "Above all, Lodge has virtually no official contact with Harkins." The Ambassador, the Secretary felt, simply could not conduct a coordinated administration -- not because he did not wish to, but because he had "operated as a loner all his life and cannot readily change now." Concerning enemy progress, the report said

"Viet Cong progress has been great during the period since the coup, . The Viet Cong now control very high proportions of the people in certain key provinces, particularly those directly South and West of Saigon. 27/ [emphasis supplied]"

As remedial measures he recommended that the government of Vietnam be required to reallocate its military forces so that its effective strength in these key provinces would be essentially doubled. There would also have to be major increases in both the U.S. military staff and the USOM staff, to the point where the numbers of Americans assigned in the field would give the U.S. a reliable independent U.S. appraisal of the status of operations. (This was a clear enough indication of the Secretary's unhappiness with past reporting.) Third, he stated that a "realistic pacification plan" would have to be prepared. Specifically, they should allocate adequate time to make the remaining government controlled areas secure, and only then work from them into contiguous surrounding areas.

The Secretary stressed that the situation was worst in the Delta and surrounding the capitol, and that in the North things were better, and that General Harkins remained hopeful that the latter areas could be made reasonably secure late in the year. The report expressed considerable concern over the increasing infiltration of men and equipment from North Vietnam. Various proposals to counter this infiltration had been discussed in Saigon, but the Secretary was not yet convinced that there were means that were politically acceptable and militarily feasible of stopping that infiltration.

Minh had strongly opposed any ideas of possible neutralization of Vietnam. (This was taken to dispose of proposals suggested by Senator Mansfield, President DeGaulle, the , columnist Walter Lippman and others).

Concerning a possible escalation of U.S. effort, the Secretary indicated that he had directed supply of a modest increase in artillery, but, "US resources and personnel cannot usefully be substantially increased." Rh