Office of the Historian

167. Telegram From the Department of State to the Embassy in Vietnam1

Washington, October 14, 1961, 4:33 p.m.

435. Ref: Embtel 449.2 Task Force VN. Basis your telegram, we recognize need to fix aid levels now in order improve relations with GVN and hope result will be accelerated preparation of concrete plans in military, economic and social spheres. Ambassador authorized inform GVN of FY 1962 non-project aid level of $140 million, consisting of $115 million Supporting Assistance and $25 million PL 480 commodities. As indicated Reftel, actual drawdowns subject to agreed criteria. This commitment contingent prompt GVN implementation of agreed exchange reforms. Also concur maintenance of unused pipeline at approximately present level ($40) million to help achieve political objectives.

Cannot fix level now on grant projects and development loans. Assume main GVN focus is on commodity import level and have strained full effort to reach this figure in expectation this decision will help you.

Ball
  1. Source: Department of State, Central Files, 751K.5-MSP/10-761. Secret. Drafted by Walter Furst (ICA), cleared with Fowler and FitzGerald (ICA) and U. Alexis Johnson, and initialed by Johnson for the Acting Secretary.↩
  2. Dated October 7, telegram 449 made several recommendations regarding U.S. economic assistance to Viet-Nam and indicated the Embassy’s desire to firm up the U.S. Government’s negotiating position promptly “as GVN’s planning and willingness to move is in part dependent on indication US position on aid matters.” (Ibid.)↩