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 * (2) The presence of French forces and French leadership in the military straggle preserves the territorial integrity of the Associated States without which their evolution toward full independence would be impossible. At the same time military considerations make it necessary to proceed cautiously along the path of evolutionary development. France has facilitated arrangement for consultations among the Associated States for regulation of their own economic affairs, including tariffs. Elections to councils at the municipal level as the first step in election of a National Assembly were hold in Viet-Nam in January 1953. Considerable elements of opinion within the Associated States were dissatisfied with the rate of evolution or persisted in their attitude of scepticismskepticism [sic] toward French intentions. The French are aware or this attitude and are considering what further steps may be taken.


 * (3) Franco has instituted a new system of representation in Indochina by which France is represented by a Commissioner General and in each of the three Associated States by a High Commissioner.


 * (4) Supplies furnished us part of the United States military aid program have helped equip new infantry, artillery, and paratroop units of the armies of the Associated States. As of June 1953, the number of regular troops in the national armies of these States had grown to about 100,000 in Viet-Nam, 12,000 in Laos, and 13,000 in Cambodia. These figures do not include auxiliaries. In Viet-Nam the auxiliaries number approximately 50,000. The development of independent logistical and administrative services in the armies of these states can only be achieved by degrees.


 * (5) The development of more effective and stable governments in the Associated States is likely to be a gradual process to which United States military and economic aid programs can continue to contribute. Some progress has been made but before the stability necessary for effective administration can be achieved an end must be brought to the Viet Minh rebellion and the authority of government must be extended over areas which it has not been exercised or recognized. The French Government has thus far played the principal role in advising the Associated States on public administration but the United States economic aid mission has reviewed possible means of contributing to fiscal and other administrative reforms and facilities for training young officials in government administration.

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