Office of the Historian

851G.01/2–546: Telegram

The Assistant Chief of the Division of Southeast Asian Affairs (Landon) to the Secretary of State

secret
Saigon, February 5, 1946.
[Received February 5—5:05 p.m.]

War Series Saig 0927. Reference Wash 06067. We are already in position to shed some light on questions asked.

1.
D’Argenlieu–Ho Chi Minh negotiations have in fact been going on since November. These negotiations looking toward French recognition of independence for Annamites to be worked out somewhat along Philippine lines. I have no knowledge of period time contemplated. Negotiations would probably have been completed by now but for Leclerc raising an objection. He told the Admiral’s Council that if these negotiations succeeded the French might as well leave Indochina altogether. He recommended military reconquest and state[d] HQS Army was all ready for it. Nevertheless negotiations were later resumed and are continuing between Ho Chi Minh and Sainteny who is French Commissioner for Tonkin. Hope they will be completed in 2 or 3 weeks.15
2.
There are no Chinese economic agreements with the Annamites.
3.
Reference Franco-Chinese agreements nothing formal yet. Temporary and local agreements are as follows:
a.
In north French pay in piastres for maintenance of Chinese troops. These payments considered as advances on amounts French are supposed to receive as war damage from Japanese.
b.
Small part of these piastre advances is supposed to be used for withdrawal of some Chinese gold units at official rate.
c.
Chinese Government advances gold units which are freely convertible into Chinese national dollars for expenses of French representatives [Page 24] in Chungking, Kunming and Shanghai. Such advances are only fraction of amount French are paying for Chinese troops.
d.
There is an agreement for exchange of Hanoi coal for Cochin China rice. Due to lack of shipping and troubles of various sorts the volume of exchange under this agreement has been disappointingly low.
4.
Clarac now in Chungking laying groundwork for important agreements. Among other things following are contemplated:
a.
Yunnan–Haiphong Railway will be operated jointly by Chinese.
b.
Haiphong will become free port.
c.
French will exchange all live (sic) hundred piastre notes held by Chinese military. This will be very profitable to Chinese who have been buying them up all over country at depreciated prices.
d.
Chungking with assistance of Chinese Consul Saigon is now preparing list of existing French laws and practices which tend to discriminate against Chinese businessmen in Indo-China. Principal complaints are poll tax, other discriminatory taxes, discrimination in amounts of money allowed to be exported, import difficulties and allegedly unfair distribution of rationed goods. French indicate willingness to consider adjusting these points.
[
Landon
]
  1. This paragraph was reported by the Department in its telegram 630, February 7, 1946, 1 p.m., to Paris, not printed.↩