851G.00/1–3150: Telegram

The Consul General at Saigon (Abbott) to the Secretary of State


69. Following is summary of 108-page typed manuscript dealing with Vietnam’s needs for economic and military assistance from US presented by Bao Dai to Jessup.

Foreword reviews growing recognition by all nations of need and urgency of economic development backward areas and steps taken [Page 708]by UN and US revealing good understanding differences between UN program and US point 4 and between latter and military aid program. Also, reveals understanding emphasis private capitalists’ realization need for Vietnam to do full share in development and need for reforms to counteract Communist propaganda and spell. States purpose manuscript is to place needs and statement of resources Vietnam before US in order to obtain financial and technical assistance for economic revival and pacification.

Preface first emphasizes that Vietnam is advance bastion against “Bolshevist” tide in SEA; second, that struggle of Vietnamese against France has been nationalist struggle for freedom. Emphasizes non-Communist nature, pointing out bulk of population is agricultural which repudiates collectivism, that intellectuals split between supporters of Bao Dai and those awaiting opportunity to declare for him; that even among supporters of Ho only small fraction real Communists and that mistaken nationalists misguided in belief they can work with Communists, but who with attainment of objectives by Bao Dai will become supporters instead of apparent enemies of Government. Political, financial, economic and possibly military aid listed as contributions other nations, particularly US, in attainment independence recognition, admission to international organizations, and protection of northern frontier, the objectives of Government.

Balance of study divided in two parts. Part one states country rich but undeveloped, averring French failed to industrialize except for own benefit. Resources listed as: (1) industrious and abundant population; (2) agricultural resources 5.5 million hectares cultivated land producing rice, corn, rubber, pepper, woods, etc., production of which could be greatly increased by seed selection, fertilization, irrigation, drainage, mechanization, etc.; (3) mineral resources largely undeveloped; (4) various industries largely controlled by French; (5) artisan and skilled labor in specialized fields numbering 1.3 million in 1937; (6) Foreign commerce with active balance prior to war but an increasingly passive balance since the war which threatens economic chaos.

Part two lists needs as: (1) pacification involving: (a) political persuasion faithful application March 8 accords by French to give complete independence and explanation of true Communist aims; (b) military suppression of Communists, which can only be accomplished by Vietnamese, not by French who hampered by inability as whites to engage in guerrilla tactics, their aspect of conquerors, etc. Ho’s forces estimated at 100,000 as opposed to 40,000 Vietnamese with inferior equipment. Thus needs listed as equipment for present and increased regular ground forces supporting naval and air forces militia and self-defense corps as well as US military mission to give instruction.

[Page 709]

(2) Reconstruction involving war against Communism by war against misery and hunger. Report lists losses since war as villages destroyed, fields uncultivated, destruction livestock, implements, communications, etc. and sets up priority list for immediate rehabilitation needs as: (a) housing; (b) communications; (c) education and sanitation; (d) agriculture; total cost in millions of piasters 135.

(3) Vietnamese participation in existing industry (mines, rubber plantations, cotton, cement, rice, milling, etc. industries); (a) creation of national airline and a maritime transport to include four to six planes and two to four Liberty ships.

Recapitulation requirements;

Equipment for 120,000 regular army with supporting air force, one armored division, one parachute division and 1,000 trucks.
Light equipment for 90,000 militia including rifles, automatic arms, mortars, infantry cannons, pistols, grenades.
Equipment for 75,000-man self-defense corps including rifles, automatic arms, grenades.
Aviation—10 reconnaissance plans, 20 DC–3 transports and 3 DC–4 transports.
Naval 10 LCI, 20 LCM, 10 small craft and matèriel.

Conclusion states willing accept suggestions, emphasizes this is first stage of program and that as Government receipts not fixed Vietnam participation not clear. No estimates total cost to US of military aid.

My comments follow: preface and foreword reveal clear understanding role of UN and US in economic aid, understanding US MAP, nature problem of Communism and unique position Vietnam at this stage.

Body of report dealing with local resources built around pre-war and mid-war statistics, some of which no longer applicable, some apparently in error, and others which cannot be checked, but general picture correct.

Section dealing with needs correctly emphasizes importance of pacification and immediate rehabilitation.

Bombshells include plans to obtain direct participation in French owned enterprises and fact French totally ignored in whole program of requirements. May incidentially add Jessup was most discouraging in talks re US military mission and emphasized need to channel requests for military aid through French.

Apparently study drafted by Tonkinese in view emphasis on Tonkin; however, should be realized that bulk of industrial potential of area is in Tonkin.

Only copy of memorandum available being pouched addressed Jessup.