Created: 10/1/1964

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To emualne the situation as it has developed since early September, and to assess its implications for the US.


A. Since our estimateho situation in South Vietnam has continued to deteriorate. oup by disgruntled South Vietnam military figures could occur at any time. In any case, ve believe that tho conditionsurther decay of GVH vill and effectiveness. The likely pattern of this decay win be increasing defeatism, paralysis of leadership, friction with Americano, exploration of possible lines of politicalwith the other side,eneral petering out of the war offort. It

* ot, "Chancestable Government in Southh, OHOTtCT,

is possible that the civilian government promised for the end of October could improve GVN esprit and effectiveness, but on the baais of present indications, this is unlikely.

B. We do not believe that the Viet Cong will make any early effort to seize power by force of arms; indeed, we doubt that they have the capability forakeover. They will continue to exploit and encourage the trend tovard anarchy, looking for the emergenceeutralist coalition government which they can dominate.



1. Continued Political Deterioration. Political conditions in South Vietnam have continued to deteriorate since our estimate of earlyespite efforts by Prime Minister Nguyen Khanh to stabilize the situation, he has been faced with an attempted coup, rioting and demonstrations in the northernassive labor strike in Saigon, and an armed revolt by Kontognard elements among the Special Forces. uthority, already weakened by tbe Buddhist-student crisis in August, has been further diminshed, and the degree of his support within the military establishment is increasingly

* M "Chancestable Government in Southk,P.

in question. Most of tbe noo-Cossnmist power elementa appear to be narking tine, pending their assessment of the civilian government which Khanh has promised will be forned by the end of October.

2. The Picture in Saigon. South Vietnam is almost leederless at the present time. General Khanh has retained his position by making concessions to various Interest groupsolitical, religious, students, military, and laborwhich have pressed tbelr demands upon him. In turn, these groups still seem bent on pursuing self interest and factional quarrels almost to the point of anarchy. ack of sense of purpose and an absence of direction from above have seriously affected morale and created passlveneas and apathy within the civil lav enforcement agencies. Government ministries la Saigon are closetandstill, with only the most routine operations going on. Cabinet ministers, as well as second-level bureaucrats, freely express their pessimism, and even thoughnd CVS officials are again meeting onaad other Joint planning, these meetings are not being followed by action from the Vietnamese side.

ilitary Morale and Effectiveness. The continuing disarray of the Saigon gcvornment, power struggles within the military leadership, and the activities of self-seeking politicians and religious leaders have adversely affected imarale within the military establishment, However, the

tha existing level of effectiveness of combat operations does not seem to have been seriously affected as yet. nevertheless, continuing political instability would almost certainly aggravate such longstanding deficiencies la the Vletnaaae* solitary effort aa inadequate activation, Initiative, and ar^resslve-ness. ontinuing lack of firm direction, and further squabbling among senior officers in particular, could depress the morale of the troopo and junior officers to the critical point. Although the GTS armed forces have longigh rate of desertion by individuals, there have been no Important unit desertions or defections. If military morale continues to decline, however, desertion and defections within both the military and paramilitary services may occur arger scale, perhaps even by organized units.

1|. Signs of Defeatism in GVT1 Leadership. High-ranking AHVN officers have confessed tofficers deep discouragement at the lack of leadership and direction. f the Joint General Staff haa indicated that ho feels little reason even to discuss further pacification planning; various high-ranking field cossaandera have expressed similar pessimism; and Generalass If has shewn signs of being overwhelmed by his responsibilities.

5- The Situation in the Countryside. The near naralysis of government initiative in Saigon appears to be spreading rapidly to outlying areas. Although the southern areas still appear relatively unaffected by the crises of the past several weeks, governmental authority has declined seriously In the northern coastal provinces where provincial and police officials are apparently receiving little guidance from Saigon. In such urban centers as

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Rue, Danang, Qui Noon, and lha Trang, Vietnamese ccanssaders have repeatedly failed to intervene in civil disturbances and rioting on the ground* they lacked precise orders; In some instances, actual authority has passed by default to extremistroups, such as the "People's Salvation (or Revolutionary) Council" (PRC). The nature of the provincial bureaucracy is such that it can rock along for considerable time, carrying out existing programs despite political deterioration in Saigon, nevertheless, continued confusion and inaction in Saigon, or another coup, could rapidlyritical deterioration in government la tbe countryside. lippage in morale and la programs among provincial administrations, at least In tha central provinces, has already begun.

6. The Peoples Revolutionary Council (PRC). The PRC has established local councila ia many coastal cities and may seek tohapter in Saigon, vhere two PRC leaders have recently been named to themen High National Council. The alms of the PRC are not clear, but the local councila seem vulnerable to Viet Cong penetration, and the fact that they have assumed government powers in some provincial cities tends to undermine Saigon'saad to damage the morale of civil servants.

T. The Hontagnard Problem. The Rhade revolt ofeptember and the continuing possibility of further and more general uprisings by the Montagnarde pose an immediate and very serious problem for the GVH. The Montagnorns have

autonomy for ycexe. The Vietnamese on their pert look down on the MontagnardD; until recently, the GVN has usually actedanner which haa widened rather than lessened the breach between tho two. The problem haa been furtherby constant and rather intensive Viet Cons; political and psychological agitation among the Kontagnards, playing on their aspirations and their dislike of tbe ethnic Vietnamese. Resentment over the killing of sootsietnamese by tribesmen during their revolt will make it extremely difficult for the GVH to offer settlement terms acceptable to the Montagnarde. Thus, there will probably be continuing disorders in tbe Highland areas, diminishing cooperation with the GYI, and increasing Viet Cong influence.

8. Offsetting Considerations. Although the signs of deterioration are many and clear, there are offsetting considerations that reduce the likelihood of sudden collapse and afford some very slim hope that the trend can be arrested. The Vietnamese peopleong record of resilience in tho face of adversity; the ability of the peasants and even of urban elements to continue normal patterns of life despite political disorder makes for some degree of basic stability. The routine functions of government still work fairly normally; business does go on; and the streets are not places of constant terror. over the absence of leadership and the progress of the war haa not yet led to calls for ending the fighting. Pev if any of the many groups now seeking to enlarge their powers regard an accommodation with the Cosmainiats

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aa cooBlfltent with their interests. Finally, the military iratrumantallties of pacification atill exist and retain significant capabilities.

9- Tensions In US-GVH Relatione. In the laet month or so, there hasisturbing Increase In antl-American sentiment at various levels of Vietnamese society. Recent deesoastretloaa In Hue, Da gang, Qui IThca, and Sha Trang have had deflalte aatl-Americaa overtones. These were probably attributable In part to Viet Cong agitation and Incitement, but in some measure they seem also to haveenuine Irritation at the Americans for various reaaoas having no direct connection with Viet Cong activity. For its part, the Buddhist Leadership, whether antl-Communist or not. Is imbued with Intense national lam which has at times manifested Itself In opposition to US policies and actions. Suspicion of US motives and concern over US Involvement In Internal policy Is growing among the top echelons of the GVH, and, most importantly, on the part of Khanh himself.

10. GVH Contacts with the Ccemrunlats. The principal GVH leaders have not to our knowledge been in recent contact with the Communists, but there has been at least one Instance of Informal contactesser governmental official and members of the "national Liberationhichreation of Hanoi. Moreover, there are numerous potential channels of communication between the present GVH leadership and tha DRV authorities, and these could very likely be used without US knowledge.

Coup Possibilities. Although no definite coup plana are known to be afoot at thee believe that further coup attempts are likely, given the ambitions, diacourageiaent, and bitterness prevalent among certain key South Vietnamese military and civilian figuresnd the comparative ease ofoup attempt in the present deteriorating scene.

Alternatives to Presenteadership. Present plans call for the establishmentew, broadly-based, and predominantly civilianby the end of October. overnment might do better than the present one, but the odds are against its having the cohesion and effectiveness necessary to arrest tho current decline. Ho visible alternative eeems any more promising. Indeed, ve cannot presently see any likely source of real leadership; no Hagsaysay has yet appeared. Hone of the military personalities and factions seems capable ofufficiently broad spectrum of support. Of xwnmilltary figures, the Buddhist leader Tri Quang is the strongest political personality and has demonstrated talenta for leadership and organization. But he apparently desires to avoid such responsibility,

ri Quang government vould face strongoppositloo from militant Catholics, some of the military, and certain other groups. Hot least, It vouldifficult government for the US to work vith, and some of its major policies vould almost certainly not be consonant with US Interests.

The Viet Cong

13- Viet Cong Policy. There are numerous algcs that Viet Cong agents haveole in helping sustain tho level of civil disorder vhlch has recently prevailed in the cities of South Vietnam; they havo also affected the tone and direction taken by setae recent protest demonstrations. Their hand was evident in the recent riots In the capital of Binh Dink Province, and they may have alretdy penetrated the PRC. Viet Cong propaganda throughout September has increasingly called upon the people to take advantage of tho government's confusion by pressing on all fronts. This capitalizing on unrest is an old policy; vhat is nev is the rich opportunity presented by the collapsing of GV1 authority. The Viet Cong hare apparently decided that heightened efforts on their part will reduce the country to near anarchy and the government to impotence, bringing an early victory in the formegotiated truceneutralist" government dominated by their Rational Liberation Front. Although these heightened efforts may Include scene battalioo-alzed, or larger attacks, ve do not believe that the Viet Cong are trying toilitary decision at this stage. Rather, they will continue stressing small-scale terrorist activity aimed at furthering the breakdown ofand the decline of faith in the government.

lb. Viet Cong Capabilities in the Cities. Viet Cong strength in the cities has almost certainly increased substantially in recent months. We

base this conclusion on our general reading of the present situation rather than on specific knowledge of current Viet Cong assets. In the closing dare of the Diem regime. Vietnamese police and security agenciesairly good reading on the nature and extent of the Viet Cong apparatus in the capital area, and it did noterious threat at that time. Immediately following tha3 coup, however, Colonel Iran Bn Thanh became Derputy Director of national Police. There are strong grounds for believing thatmayommunist agent; In any event he released some key Viet Cong prisoners, destroyed Viet Cong dossiers In police archives, and placed at least one known Viet Cong agentey position within the police structure. Although Thanh vas ousted when Khanh seized power, tha Saigon police and security services hare not recovered their antl-Communist capabilities. Tho fact that Communist agitation still remains under careful cover, however, suggests that the Viet Cong intend still to husband these assets and not risk themremature takeover attempt.


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