Created: 4/26/1955

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The following inteaigence organization* participated in the preparation of this estimate: The Central Intelligence Agency and the intelligence organizations of the Departments of State, the Army, the Navy, the Air Force, and The Joint Staff, Concurred tn by the INTELLIGENCE ADVISORY COMMITTEE

onpril INS. Concurring were the Special Assistant, Intelligence, Department o/ State; the Assistant Chief of Staff,Department of the Army; the Director of Naval Intelligence; the Director ot Intelligence, VSAF; and the Deputy Director /or Intelligence. The Joint Staff. The Atomic Energy Commission Representative to the IAC. and the Assistant to the Director, Federal Bureau of Imestigation, abstained, the sublect being outside of their jurisdiction.




To assess the consequences of certain possible developments in South Vietnam and their probable effects upon the strength and stability of that country.



olitical Impasse exists ln Saigon where the legally constituted government ofDiem is being challengedenal special Interest group, the Binh Xuyen, which controls the National Security Police, and is temporarily allied with some elements of the religious sects 1 The presence0 French troops ln the Saigon area plus the counsel of Bao Dai and French and UShave deterred the government from exerting its authority over this group by armed force. The French, who have until recently provided arms for the Binh Xuyen, still maintain liaison officers at Binh Xuyen headquarters, and state that these officers are assisting in maintaining peace in Saigon. French policy Is openly committed to theof Diem at the earliest opportunity. The French feel he is incompetentremier who would be more amenable to the preservation of Frenchand influence in South Vietnam. The head of state in absentia. Bao Dai. also favors Dlcm's removal, and is endeavoring to obtain French and US agreement as to the manner in which this could be effected.

' The Assistant Chief of, Department of the Army, believes tliat the Binh Xuyen ls at least temporarily allied with major armedof the Hoa Hao sect and has theof other political elements in South

onsiderable extent Diem's difficulties stem from his own inadequacies. His serious limitations as an administrator and hisflexibility have alienated members of hismost of whom have resigned or stated their intentions to resign. Many leadingfigures are openly critical of Dlcm's uncompromising attitude toward the Binh Xuyen and the religious sects and are opposed to the use of force to settle theHe has refused to accept specific US and French recommendations for broadening the base of his government, and such efforts as he has made to secure the services ofVietnamese have proved ineffectualof (a) their reluctance to accept the unsatisfactory conditions incident to working with Diem and toegime whose political outlook is uncertain, and (b) their fear of Binh Xuyen or other terrorism. Diem'sIs also being weakened by persistentthat US support, to date his strongest prop, is about to be withdrawn.

he mass of the population in Southis not now organized to play an effective role ln the fate of the present government. Among the politically active minority. Diem, despite his apparent inability to establish effective rule, stilleputation forand he probably has more nationalist appeal than any other prospective leader. The olher principal sources of Dlcm's present support are: US backing, certain key elements

of tho Vietnamese National Army (VNA) and of the Cao Dai forces, many olefugees, the Central Annum provinces,mall hard core of loyal political supporters in Saigon.-

he present crisis has not materially changed thealance of forces: the VNA remains stronger than its armed opposition In the Saigon-Cholonnd could almost certainly drive the Binh Xuyen out of Saigon, although probably not without

serious bloodshed and destruction and possi-

bly continuing Insurrection There Is some doubt that the armyhole in Its present poor state of morale and training would be effective, or loyal to Diem, should there develop, for any reason, protracted and serious fighting with the sects. This would be particularly so if Bao Dai should fail to support Diem in such fighting, Tlie French have clearly stated that the FrenchCorps would not become involved in this fighting except as necessary to protect foreign lives and property.

he Viet Minh have not lwd an identifiable role in the development of the present crisis. They have attempted to exploit the situation in statements by Radio Hanoi and theirpress calling for Diem's removal They will continue such propaganda efforts and through subversion will attempt to exploit any opportunity ln this situation to advance their ends. However, they will almostnot now Intervene overtly or lnanner as patently to violate the provisions of the Geneva Accords.

The Assistant Chief of. Department of the Army, would prefer that this paragraph read as follows:

"Tlie mass of the populsUon in South Vietnam dors not appear to have an acUve Interest In the fate of the present government. Among the politically acUfe minority. Diem, despite histo establish effective rule. sUUeputation for Integrity and strong nationalist ideals. He still draw* some strengthmall number of loyal supporters In Saigon and the Central Annam provinces, and from tbethough unenthusustic support of certain elements of the Vietnamese NaUonalesult of continuing US support."


discussions for resolving thecrisis in Saigon have envisaged twoapproaches:

ontinuation of Diem in office, at least for the time being, under conditionsroadened and more representative

!'. Immediate removal of Diem by Bao Dai with the approval of the US and France, and his replacementoalition government.

Continuation ol Diem in Office

* In the Saigon-ClioIon area there areNA troops. Opposed oreinh Xuyen forces. There are In addlUonunicipal police. presenUy under the control ol Iheheir loyalties In the event of large-scale hostilities arc uncertain. Hoa BID and Cao Dut troops are not presentlyajor factor In the question of control ofarea Itself. French BxpedlUonary Forces In this area total

' The Assistant Chief of, Department of the Army, believe* that the resolution of the present Impasse and the implementation of the Diem solution would be lnfcaslble: <li In the absence of increased US commitments toand full French support;n theof all-oat US short-range and long-range support and French acquiescence to theand acuons related to such US support.

We believe it Is possible that continued French-US efforts to restrain Diem and the Binh Xuyen will prevent an outbreak of large-scale hostilities. However, if Diem should believe that he was about to behe might attempt to prevent suchby armed action against the Binh Xuyen.

We believe that the resolution of theimpasse and the implementation of the Diem solution wouldritical degreeend upon firm and substantial US and Frencb support.4

Full French cooperation In any Diem solu-Hon would almost certainly be unattainable, although the French might be persuaded to acquiesce in the continuation of Diem in office and to assist in the removal of police powers


from the Binh Xuyen. However, In this event the Frencli would almost certainly try tothemselves from the Diem government and would blame any failures on the US.

US support and Frenchand having won prestige by histhe Binh Xuyen, Diem would be inposition than before to proceedprograms for strengtheningAlthough he would continue topoor administrator, he might be moreand able to attract capable men toThe chances for increasedof Diem would be enhanced if hepublicly pledged to leaveuture government to aassembly."

Immediate Removal of Diem

'The Assistant Chief of, Department of the Army, and the Special Assistant, LnteUlgencc, Department of State, believe that In thooutlined in paragrapht would bedifficult toeconciliationDiem and the sects. Without full French support, Diem almost certainly would be unable to proceed with proposed programs forSouth Vietnam.

We believe Diem would obey orders from Bao Dai to resign, particularly if Diem were aware of his loss of US support. However, Diem and his followers would probably be extremely bitter and would probably denounce France, tlie US, and the new government. Diem has some capability foruccessor government and might embarkourse of active resistance.

Dicm's removal by Bao Dai wouldtrong adverse reaction among Vietnameseegardless of how the removal were handled, the Vietnamese would feel that Bao Dai had acted at the behest of the French and the sects and with US approval.we believe that the bulk of theNational Army would transfer Itsto the new government.

uccessor government, Baothe sects would have greata government wouldetterchance of implementing programsSouth Vietnam, only If:government itself were headed by anationalist and did not includeof Bao Dai's entourage orpoliticians; (bf therelinquished control of thePolice; (c> all sects at theto subordinate their armed forcesto national supervision andand (d) the US gave firm andsupport to the new government, anddid not obstruct the development ofnationalist government.


if the present impasse werebelieve that it would be extremelybest,ietnamese government,of Its composition, totrong, stablegovernment, capable of resolvingsocial, economic, and politicalVietnam, the special problems arisingGeneva agreement, and capable ofthe long-range challenge of theThe functioning of anybe complicated by probablereluctance to support thea truly nationalist government In

'Tlie Assistant Chief of, Department of the Army, believes that Diem's removal by Bao Dal would nottrong adverse reaction among Vietnamese nationalists, and woulddelete this sentence.

Original document.

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