PSA Files: Lot 54D190

Memorandum by the Director of the Office of Philippine and Southeast Asian Affairs (Lacy) to the Assistant Secretary of State for Far Eastern Affairs (Butterworth)1


I asked Bob Folsom,2 recently returned from Saigon, to give me his views on the composition of economic missions in Indochina and on Ho Chi Minh. He has embodied those views in the two memoranda which I attach and recommend to your attention.

[Annex 1]

Memorandum by Mr. Robert S. Folsom to the Director of the Office of Philippine and Southeast Asian Affairs (Lacy)


Subject: Comments on Ho Chi Minh

I am completely amazed that there is any longer a question of whether Ho Chi Minh is a communist. I, personally, am completely convinced that he is a communist in the sense that he is the head of the Soviet Fifth Column in Indochina. I see no reason to believe that he is a “native communist” or a “true communist”. The Soviet Union, the Comintern, and the Cominform have assiduously propagated such myths for years. That, after the Tito episode, anyone can suggest that a communist leader approved by Moscow is other than a Moscow agent, seems to me absurd.

That Ho Chi Minh will make a deal with Bao Dai or vice-versa appears to me to be highly unlikely.

In such a deal Bao Dai would be relegated to a back seat and if not eventually liquidated, at least deprived of all authority.
Bao Dai recognizes the danger of any “cooperation”.
Past violent mutual denunciations would in themselves almost preclude any such settlement of differences.
[Annex 2]

Memorandum by Mr. Robert S. Folsom to the Director of the Office of Philippine and Southeast Asia Affairs (Lacy)


Subject: Composition and Size of Economic Missions in Indochina.

It is my opinion that such economic mission or missions as may be established in Indochina should be kept to a minimum size and relieved of administrative functions to the greatest extent possible.

[Page 759]

Contrary to the practice under which the head of the ECA ranked all except the Chief of the diplomatic mission, any new economic mission should be clearly subordinated to the Legation.

Personnel should be confined to technical staff who are capable of and willing to get at the problems without fanfare. The housekeeping problems of the staff, including housing, office space, motor pool arrangements etc., should be handled by the Legation thus permitting control and avoiding the usual inflationary effects caused by large-scale operations by the new missions which in almost every case have caused rents and prices to soar.

JCRR operations in China constitute a model in that they were unobtrusive, economical and by and large very effective. In contrast, ECA operations have generally been characterized by magnificent offices, expensive homes, large motor pools and excessive emphasis on administration. These operations have aroused the resentment not only of the relatively poorer American and foreign diplomatic establishments but also of the local populace. To the extent that this resentment has reached sizeable proportions it has defeated the basic purpose of the programs.

  1. Transmitted through Deputy Assistant Secretary Merchant.
  2. Robert S. Folsom, Consul at Saigon since August 1949.