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5. Fr Army altho under severe pressure is gradually achieving its important limited objective of clearing Tonkin and Saigon deltas; moat important population, rice-producing, communications and urban sectors. As far as we able observe locally, Fr Army and Viet units of same well led, efficient, will not withdraw in face of Commie threat. US aid following closely in wake of operations will speed task by village rehabitation program.

6. Chi-Commie invasion threat does not appear immed. US aid will better prepare Fr and Viets to checkmate it and sterilize areas of Vietminh infection which might link up with threat. On other hand, mil intelligence has verified that limited but potentially increased Chi-Commies material support to HO has begun, suggesting advisability speedy US aid.

7. Purely econ justification lies in extreme poverty liberated areas, deterioration public works, irrigation system, rice culture, destruction by Vietminh of farmsteads, villages, telocommunications, health facilities, etc., as personally surveyed by mission in Tonkin. Deplorable health conditions of people inTonkinin Tonkin [sic] warrant immed relief.

B. Above facts govern type and tempo of US aid.

In general it shld:

1. Concentrate on projects which will best support mil and polit objectives.

2. Show dramatic and immed results and arouse wide and realizable hopes of prompt effect.

3. Be designed improve welfare, living conditions as many people as soon as possible in preference long-term projects, or projects justified reference to Fr balance of payment needs.

Rh