751G.551/10–1551: Telegram
The Chargé at Saigon (Gullion) to the Secretary of State
837. As reported in London tel 11, October 9 sent Dept 1744 Paris 674 [673]1 De Lattre once again indicated that, since Fr investment [Page 533] in IC totalled only 2 billion dollars and since Fr was spending for IC war about 1 billion annually obviously no profit motive in Fr determination remain in IC. HICOM has made several similar public statements recently. Leg assumes these must be for fon, particularly US, consumption. For excluding fact Fr mil expenditures IC 1951 more nearly 80 million than one million (Legdes 42, July 23)2 and that De Lattre presumably referring only private commercial and industrial investments, fol factors prejudice simplicity this line reasoning.
- 1.
- The 800 million dollars now being spent IC wld be spent on mil purposes irrespective of whether there were or were not war IC, i.e., for defense western Eur rather than for defense IC. Fr taxpayers, provided Fr were to continue devote maximum possible of gross natl income to mil ends, wld not be required pay less toward Fr total mil budget even if forces or subsidies not required IC.
- 2.
- Fr interests are not surrendering their econ positions in IC. They still own: (a) All of Fr–IC and all of cabotage, shipping, (b) all important public utilities, (c) all rubber plantations, (d) all banks except for two Brit ones (e) all important import-export houses, (f) most of coffee and tea plantations, (g) concessions on almost all known mineral resources. (SCAP cannot assist Jap in exploiting new salt drying bed in Vietnam without entering into arrangement with private Fr concessionaries), (h) all large-scale enterprises—textiles, breweries and distilleries, cement and glass works.
- 3.
- Through Pau conventions Fr retained veto power over key econ fields of fin policy and fon trade. This necessary as long as piaster tied to francs, but no provision made for automatic removal this veto when IC economy again becomes self-sufficient. Almost all informed AS business and governmental circles aware this situation and that of 2 above. Often refer obliquely but approvingly to Iran’s action re Brit oil interests.3
- 4.
- Based on official confidential Fr exchange figures Fr treasury transfers francs into piasters based on data last four months at annual rate of $314 million (remainder Fr mil and civil expenses for IC presumably consummated in metropole.)
At same time IC economy is transferring piasters into francs on same basis at annual rate $187 million. Latter payments include profits, dividends, soldier and family remittances, insurance payments and other “fin operations”. Both figures exclude “commercial operations”. It is true that this flow payments metropole tends shift inflationary pressures from IC to Fr, but at same time it benefits private interests. Income mostly Fr because Fr control most of IC’s liquid wealth. It constitutes in large part transfer from Fr taxpayers to other Frenchmen (Legdes 598 March 30).2
[Page 534]Above comments are submitted with hope that, shld other data available to Dept require correction in them, Leg may be instructed. They concern themselves of course entirely with Gen’s specific statement re Fr’s econ position re war in IC and make no attempt assess heavy and irreplaceable losses human life.
Sent Dept 837, rptd info Paris 338, London unnumbered.
- Telegram 1744, October 9, reported on the visit of General de Lattre de Tassigny to London, October 4–7, during which he expressed views on Indochina similar to those he had delivered in Washington in September (751G.551/10–951).↩
- Not printed.↩
- Documentation on U.S. policy with respect to the Anglo-Iranian oil controversy is scheduled for publication in volume v.↩
- Not printed.↩