Foreign Relations of the United States, 1952–1954, Indochina, Volume XIII, Part 1

751G.00/11–1352: Telegram

The Ambassador at Saigon (Heath) to the Department of State¹

secret

Saigon, November 13, 1952—6 p.m.

990. Rptd Paris unn, Hanoi unn.

1. I had a long talk with Pres Tam yesterday who seemed in good spirits and optimistic. He told me Governor Binh had resigned and wld shortly be replaced by Tri, former Governor of Tonkin. I remarked Bao Dai told me he wld have to investigate whether he wld take action with respect to Binh, but Tam said he had informed His Majesty that proof of large-scale graft was so certain that Binh had to go. Tam regretted that Binh, who has certain good qualities, had been so stupid and venal, remarking that the latter’s practice of maintaining several households was an expensive one. Tam did not say what action wld be taken about Giao, but I heard last night from Gautier that Giao‘s dismissal is scheduled for the end of the month when Tam returns from the mtg of High Council of the Fr Union. First Secy Emb happened to meet Giao last evening. Giao indulged in usual diatribe against Tam and his govt, but for the first time (to my knowledge) also severely criticized Bao Dai. Heretofore, Giao has made a great parade of absolute loyality to Bao Dai.

Comment: Binh’s replacement by Tri and the departure of the disruptive Giao will undoubtedly strengthen Tam‘s reputation and admin.

2. I bore down heavily on the absolute necessity of governmental honesty if any headway were to be made against VM propaganda and example. Tam asserted that he entirely shared this view and observed that for 6 years he had fought against the legalized gambling concession in Cholon. He was the only member, he asserted, of Huu‘s Govt who was in favor of outlawing gambling which inevitably brought corruption in its train.

3. On a par, he said, with honest admin was the necessity of govt economy. He agreed with my observation that the example must be set from the top (Bao Dai). He was unable to exhort Bao Dai directly, but had observed very strongly to someone whom he knew wld repeat the statement to Bao Dai (presumably Nguyen De) that every time His Majesty indulged extravagant expenditure it was necessary for him to compensate by reducing legitimate and needed govt expenditures. Tam went on to say that he liked Bao Dai, but he also pitied him. Bao Dai was certainly a “morally unhappy man”. His hunting and fishing expeditions were an attempt to forget the “moral distress” he must feel over his way of life. He, Tam, intended to try to “help” Bao Dai to assume his responsibilities and to straighten out his existence.

4. Tam said he was really worried over the possibility that the Fr might reduce the subsidies for the formation and maintenance of the Viet Natl Army, amounting, for 1952, to 3 billion piastres ($150 million). I remarked that Bao Dai had commented to me on the excessive pay scale of the Viet Army and that I personally thought it was in excess of natl financial capacity. Tam said he agreed heartily. In the long run it wld be neither possible nor good for the troops to be paid above then natl level of per capita income. The only remedy was compulsory milit service. It was possible that the present program of building a Vietnamese regular army along European lines was perhaps not the most suitable system. What was needed of course was to get more troops in the field against the VM. The lack of “cadres” was a limiting factor which perhaps cld be overcome in part by reducing the nbr of officers and non-coms in Viet units. Tam not as yet ready to take up with the Fr High Command the question of possibly changing the program for the development of the Vietnamese natl army.

5. Tam protested my observation that his agrarian reform seemed to be slowing up. He said that within last few months a total of 30,000 hectares (roughly 70,000 acres) had been sold by landlords to former tenants. A good many tenants had not paid their rent during the last year and had thereby saved enough money to make the initial payment on their farms. He had to go fairly slowly with the reform so as not to provoke organized opposition of large Fr and Viet landlords and landholders corporations. He was also deferring the inauguration of his Agric Credit Bank until he cld liquidate the old Credit Populaire. The latter institution had been formed to help small landowners but in practice had loaned mainly to the big landholders at a rate of 4 percent. The big proprietors had then re-loaned bank advances to their tenants at a rate which frequently reached 20 percent a month. He wld purchase the properties and equipment of the Credit Populaire for the new Agri Bank he was founding.

6. Tam insisted that he was moving steadily ahead with the project of an elective Natl Assembly. Village Council elections were already occurring and the Village Councils wld in turn elect representatives to the Provincial Assembly which in turn wld send a representative to the Natl body. Coincidently or shortly afterwards he hoped to have city elections. Each city wld be divided into wards. Thus, Saigon-Choion wld have eight wards and eight representatives in the Natl Assembly. He thought very likely he wld be able to complete the elections in Jan next.

Heath

1. This telegram was transmitted in two parts.