South Viet Nam: Disenchantment with Diem?

President Ngo Dinh Diem is a tough, experienced anti-Communist fighter on whose regime the U.S. has placed high hopes ever since he took over in the chaotic aftermath of the Indo-Chinese war. The U.S. has argued that some of Diem's highhandedness and autocratic ways are necessary in a country desperately menaced by Communist subversion. Even though without him the situation in South Viet Nam might be a disastrous vacuum, Washington lately has become increasingly disenchanted with Diem.

South Viet Nam's President eagerly welcomed those portions of General Maxwell D. Taylor's report that recommended more military aid to South Viet Nam, but he angrily refused to go along with the report's suggested domestic reforms. Yet the reforms called for are relatively modest and include a liberalization of Diem's harsh, one-man government, which has already disenchanted most of the nation's educated class and caused mass resignations of top officials, often in protest against arbitrary arrests; the removal of some of Diem's relatives and cronies who are widely believed to be lining their pockets at government expense; the basing of army promotions on merit rather than on personal loyalty to Diem; the creation of a centralized intelligence agency instead of the present plethora of police, army and administrative systems, whose rivalry prevents swift movement against the elusive Red guerrillas; a widespread implementation of land reform to win back the invaluable support of the Vietnamese peasants, who are now either pro-Communist or indifferent to both sides.

When U.S. Ambassador Frederick E. Nolting Jr. called on him in Saigon, he discovered that Diem was laboring under what Washington calls "several mistaken ideas" as a result of his talks with Taylor, which basically added up to the notion that nothing should or could be done in the way of domestic reforms before the military situation has been improved. Besides, added Diem, he could not broaden his regime and delegate authority because he could not trust his ministers.

At Nolting's request, Washington is sending Diem a long, ''clarifying" dispatch. But if Saigon's government-controlled press is to be believed, Diem will be a hard man to budge. The daily Dan Viet, advised by Diem's brother and usually reflecting Diem's views, denounced the U.S. for being too "hasty" in urging "leapfrogging moves toward democracy'' on South Viet Nam. Such a course, said the paper, "will only push Viet Nam into the hands of its bitter enemy, Communism."

Washington's only riposte was the rather forlorn hint that if Diem continues his refusal to launch reforms, U.S. Ambassador Nolting may be "temporarily" called back to Washington.