Office of the Historian

851G.00R/4–3050: Telegram

The Chargé at Saigon (Gullion) to the Secretary of State

secret
Saigon, April 30, 1950—6 p. m.

297. If I understand from Paris Embtel 97, April 291 that $700,000 is total amount economic aid available IC until end fiscal year and as long as budget ruling stands, situation is fantastic.

2. I understand difficulties efficient spending short time. Must point out, however, that in expectation US economic aid and on issues arising from its distribution the French Government has reviewed its policies, the Vietnamese Government has fallen, the struggle with Viet Minh has been intensified. Ho Chi Minh has defied US and Southeast Asia has staked its last hopes. It has been assumed rightly or wrongly that we would never have proposed give aid if we are not reviewing our strategic concepts.

3. If now we speak in terms of $700,000, would be laughing stock of our enemies in Asia, the despair of our friends. If we give military aid to French and only token economic aid to the native peoples, Communists could claim corroboration then claim we here install French Colonialism by armed force.

4. It would be hopeless to explain to native peoples our fiscal year system or Budget Bureau review of our foreign policy.

[Page 791]

5. Strongly urge ruling be reconsidered.

Sent Department 297; Department pass Paris 148, London 25.

Gullion

  1. Telegram 1998 from Paris, April 29, passed to Saigon as telegram 97, read as follows:

    • “1. Am profoundly disturbed by situation reported to ECA today by Robert Blum in his Toeca 500 April 29 [not printed]. Apparently Budget Bureau has approved only $700,000 from section 303 funds for economic aid Indo-China balance this fiscal year, this sum earmarked for emergency health project.
    • “2. This decision in view of recommendation of Secretaries Acheson and Johnson with Hoffman’s [Paul G. Hoffman, Administrator, Economic Cooperation Administration] approval unless reversed will blast hopes and lower morale of three Indo-Chinese Governments, and is scarcely likely to make French think we are serious about our Southeast Asia policy.
    • “3. Was it taken without Department’s knowledge? Strongly urge it be immediately reconsidered. Bruce.”

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