This memorandum, referred to at the beginning of NSAM #263 (document 194), describes a conference held 3 days after the return by Robert McNamara and Maxwell Taylor from a fact-finding mission to Vietnam, and, immediately upon their arrival at the White House, presentation of the McNamara/Taylor report to President Kennedy. The discussion here centered on ways of applying selected pressure on the Diem government to be more responsive to the needs of its people, and to stop the imprisonment and persecution of many in South Vietnam, particularly the Buddists who were very much politically aligned with the peasants and very public in their protests. This strategy of pinpointing the most effect means of applying such persuasive pressure is summed up in the sentence, "The most likely and desirable result of any U.S. pressures would be to bring Diem to talk seriously to Lodge about the whole range of issues between us."

--ratitor

---

179.   Memorandum for the Files of a Conference With the
          President, White House, Washington, October 5, 1963,
          9:30 a.m. [1]

SUBJECT

Presidential Conference on South Vietnam

        A conference on South Vietnam was held in the Cabinet Room at 9:30 a.m., October 5, 1963. Present were the Vice President, Secretary Rusk, Secretary McNamara, Under Secretary Harriman, General Taylor, Mr. McCone, Administrator Bell, Mr. Bundy and Mr. Forrestal.
        The meeting discussed the report of Secretary McNamara and General Taylor and considered draft instructions to Ambassador Lodge.
        The President asked what would be the impact of a suspension of the Commodity Import Program. Mr. Bell replied that the Commodity Import Program accounted for approximately 40 percent of South Vietnam's imports. He emphasized that the real effect of a suspension would be an interruption of the flow of commodities into the country. A suspension would not necessarily have an impact upon the government budget. A continued suspension, however, would have a serious effect on the economy.
        Mr. McCone said that he believed that the principal effect of a suspension would be to cause an economic crisis in the Saigon business community. This would be more pronounced than the political effects such a suspension might have upon Diem and Nhu.
        Secretary McNamara pointed out that since we have already suspended the funding of imports under the program, it would be difficult to resume now.
        The President agreed and asked Mr. Bell what would be the impact of a suspension of the two capital projects, the Saigon water works and the Saigon power project.
        Mr. Bell replied that a suspension of these projects would not have an effect upon the economy or upon the military effort. But, he pointed out, both projects were already started and near their final stages of completion. The water project was complete except for the construction of a filtration plant; and the power station needed only a building to house the turbines, which had already been ordered. The President suggested that the contractors in each case simply be told that a decision on the final stages of the two projects would be delayed for policy reasons for an indefinite, but not necessarily long, period of time. Our public posture should be that the two projects were being suspended for further review.
        The President noted that the recommendations with respect to the PL 480 program were tantamount to taking no substantive action at this time. In this connection he suggested that, for the present, we say only that we were not in a position to make forward decisions.
        The discussion then turned to recommendations concerning a suspension of assistance to those forces under Colonel Tung which were located in Saigon rather than in the field. The President emphasized that we should make clear the basis upon which we were suspending aid to these forces, i.e. that they were not directly contributing to the war effort and therefore we could not support them.
        The President asked Secretary McNamara for his opinion on the nature of the controversy between the Buddhists and the Government. Secretary McNamara replied that in his opinion the controversy was now more political than it was religious.
        After a discussion with General Taylor, the President observed that the military improvements which we wished to press upon Diem be taken up as soon as possible by General Harkins rather than by Ambassador Lodge. It would be preferable if discussions of political improvements and possible U.S. pressure actions were undertaken by Ambassador Lodge. The President also said that we should not consider the political recommendations to be in the nature of a hard and fast list of demands, and that this point should be made more clear in the draft instructions.[2] The most likely and desirable result of any U.S. pressures would be to bring Diem to talk seriously to Lodge about the whole range of issues between us.
        The Secretary of State agreed that the military matters should be pressed and that they stood the best chance of being accepted by the GVN. Nevertheless, he felt that we should not forget the importance of obtaining an improvement in the political climate in Saigon.
        The President said that no formal or public statement should be made at the conclusion of the meeting. Instead he felt that the Secretaries of State and Defense in executive session before Congressional committees next week should confine themselves to saying that U.S. programs were under continuing review in light of the President's previously announced policy that we supported those things which furthered the war effort and would not support those things which do not.
        It was agreed that Section 5 of the McNamara/Taylor Report be approved and that appropriate instructions implementing the recommendation in this section be transmitted via CAS channels. Mr. McCone said that any such activity should be carried on under the tightest security under the direction of the CAS station chief. The President agreed, but added that these activities should be subject to the Ambassador's general guidance.
        The President also said that our decision to remove 1,000 U.S. advisors by December of this year should not be raised formally with Diem. Instead the action should be carried out routinely as part of our general posture of withdrawing people when they are no longer needed.
        There is attached to this memorandum a copy of the McNamara/Taylor report and the final telegraphic instructions to Ambassador Lodge.[3]

M. V. Forrestal

                                                                                          yer friendly neighborhood ratman