Office of the Historian

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

Washington, May 16, 1964—6:59 p.m.

1968. Joint State/AID/DOD message. Pass Forrestal for info. Rpt to CINCPAC for info. Subject: Vietnam Supplemental Appropriation Request.

Decision made today to proceed on Monday with supplemental appropriation request $125 million for increase in FY 1965 U.S. foreign assistance to Vietnam, $70 million economic and $55 million military. Septel gives verbatim text presently proposed draft of message.2

Based information available here, supplemented by Secretary McNamara’s observations during this week’s Saigon visit, the $70 million economic aid will be divided $50 million additional for commercial import program and $20 million additional for counter-insurgency program. This additive to Congressional Presentation figures of $95 million CIP and $35 million C.I.

This action being taken in order to assure availability of funding for increased needs now foreseen and to remove any possible psychological or political impediment to all-out GVN budgetary, administrative and military efforts. This is to be used for real needs as they actually arise within the illustrative context of the current supplemental presentation and as additional reassurance in negotiating with GVN for maximum effort on its part.

For instance, we envisage announcement of our additional support will enable Country Team to obtain effective GVN commitments to following, inter alia:

(a)
Immediate, decisive GVN action to provide all plaster financing needed for civil counter-insurgency and increased military effort;
(b)
Greatly simplified and streamlined budgetary and administrative procedures;
(c)
Further curtailment of luxury imports;
(d)
Sharing of import-financing costs through drawdown of GVN reserves by $25 to $30 million in FY 64 from the Jan 1, 1964 level of $ 179 million:
(e)
RAND/USOM/GVN study on appropriate economic mobilization measures will be carried on vigorously and results applied to maximum extent feasible.
(f)
Better utilization of military manpower and equipment.

In short, U.S. is providing under most extraordinary procedures virtually everything by way of external resources for which GVN has indicated need and it is now calling on GVN to exert maximum effort on its part along lines already jointly agreed as necessary.

Rusk
  1. Source: Department of State, Central Files, AID (US) 8 VIET S. Secret; Immediate; Limdis. Drafted by Stoneman, cleared in substance by Bell and in draft by Poats and Blouin, and approved by Sullivan.↩
  2. Telegram 1967 to Saigon, May 16. (Ibid., DEF 19–7 US–VIET S) The May 1& message to Congress is printed in American Foreign Policy: Current Documents, 1964, pp. 970–972.↩