White House Statement on the Situation in South Viet-Nam.

SECRETARY McNamara and General Taylor, following their initial oral report of Friday, today reported fully to President Johnson and the members of the National Security Council. The report covered the situation in South Viet-Nam, the measures being taken by General Khanh and his government, and the need for United States assistance to supplement and support these measures. There was also discussion of the continuing support and direction of the Viet Cong insurgency from North Viet-Nam.

At the close of the meeting the President accepted the report and its principal recommendations, which had the support of the National Security Council and Ambassador Lodge.

Comparing the situation to last October, when Secretary McNamara and General Taylor last reported fully on it, there have unquestionably been setbacks. The Viet Cong have taken maximum advantage of two changes of government, and of more long-standing difficulties, including a serious weakness and over-extension which had developed in the basically sound hamlet program. The supply of arms and cadres from the north has continued; careful and sophisticated control of Viet Cong operations has been apparent; and evidence that such control is centered in Hanoi is clear and unmistakable.

To meet the situation, General Khanh and his government are acting vigorously and effectively. They have produced a sound central plan for the prosecution of the war, recognizing to a far greater degree than before the crucial role of economic and social, as well as military, action to ensure that areas cleared of the Viet Cong survive and prosper in freedom.

To carry out this plan, General Khanh requires the full enlistment of the people of South Viet-Nam, partly to augment the strength of his anti-guerrilla forces, but particularly to provide the administrators, health workers, teachers, and others who must follow up in cleared areas. To meet this need, and to provide a more equitable and common basis of service, General Khanh has informed us that he proposes in the near future to put into effect a National Mobilization Plan that will provide conditions and terms of service in appropriate jobs for all able-bodied South Vietnamese between certain ages.

In addition, steps are required to bring up to required levels the pay and status of the paramilitary forces and to create a highly trained guerrilla force that can beat the Viet Cong on its own ground. Finally, limited but significant additional equipment is proposed for the air forces, the river navy, and the mobile forces.

In short, where the South Vietnamese Government now has the power to clear any part of its territory, General Khanh's new program is designed to clear and to hold, step by step and province by province.

This program will involve substantial increases in cost to the South Vietnamese economy, which in turn depends heavily on United States economic aid. Additional, though less substantial, military assistance funds are also needed, and increased United States training activity both on the civil and military side. The policy should continue of withdrawing United States personnel where their roles can be assumed by South Vietnamese and of sending additional men if they are needed. It will remain the policy of the United States to furnish assistance and support to South Viet-Nam for as long as it is required to bring Communist aggression and terrorism under control.

Secretary McNamara and General Taylor reported their overall conclusion that with continued vigorous leadership from General Khanh and his government, and the carrying out of these steps, the situation can be significantly improved in the coming months.