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

751G.5/2–2153: Telegram

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

secret

Saigon, February 21, 1953—4 p.m.

1665. Repeated information Paris, Hanoi unnumbered. I presented Mr. Brayton Wilbur, Chief of Stassen’s MSA Mission,¹ to Letourneau yesterday.

(1) I brought conversation around to exchange rate. Letourneau admitted that it would be in interest of France to devalue the piastre but insisted that it would be presently impossible in view of opposition of AS to such a move. He then admitted frankly that there would also be objection on the part of both French military and civilian personnel in IC since the present [rate] allowed them to send larger remittances for savings and/or maintenance of families in France. (Comment: The objection of the AS to devaluation of the piastre is a real obstacle.) We do not find much merit in Letourneau’s contention that for purposes of morale of French military and civilian personnel present rate must be maintained. Since their pay is eventually computed in francs they could receive a larger sum in local currency if the piastre were devalued. As the McDiarmid report² indicates special arrangements could be made for the remittances of French personnel.

(2) Letourneau said the French were in full agreement with necessity of increasing the Vietnam National army by 40,000 men during CY 1953 and were in near agreement as to giving greater autonomous area responsibilities to national army.³ He had told the French general staff that they must go as far as possible in meeting Vietnam demands on that score to the point of not imperiling French military security. The latest Vietnamese proposal made by General Hinh was described by Letourneau as “realistic”. It did not call for placing all of Cochinchina under Vietnamese military command. Hinh asked the French to retain responsibility for the Cambodian-Vietnamese frontier, the area controlled by the Cao Daists and the region north of Saigon where there are still fairly considerable Viet Minh forces.

(3) Letourneau went on to say that while there was agreement on increasing Viet Minh [Vietnam] National army question of financing this increase presented an unsolved problem. I countered with the statement that it was my understanding that under available French appropriations and counting on a greater fiscal effort on the part of the Vietnamese Government the financing of 40,000 increase was assured for 1953. Letourneau, somewhat reluctantly, admitted this but said that real problem would come in 1954. He admitted that the Vietnamese army was too expensive but said that it was impossible during wartime to reduce the pay. The Vietnamese army had been started as a professional army which naturally costs more than a conscript army. New troops might be conscripted but they could not be paid less than the enlisted professional soldier when they were performing the same duties and incurring the same risks.

(4) Letourneau insisted very strongly that the political and military situation in Cambodia presented no problem at this time. France and Cambodia were fortunate in having General Langlade as commander of the Franco-American [Khmer] forces. Langlade was an unusual general who while very active did not believe in fighting useless battles. Instead he was effectively regrouping, resettling and organizing for self defense the populations in areas subject to Viet Minh infiltration.

Heath

1. Brayton Wilbur, President of the Wilbur Ellis Company of San Francisco was Team Leader of a four-man Mutual Security Agency evaluation mission on visit in Indochina. MSA dispatched similar missions to a number of posts during February 1958.
2. Reference is to a report titled “The Exchange Rate Problem in the Associated States of Indochina,” prepared by Orville J. McDiarmid of the MSA Mission in the Philippines on the basis of research in Indochina. A draft copy of this report dated Feb. 10, 1953, was transmitted to Washington as an enclosure to despatch 385 from Saigon, Mar. 17, 1953, not printed. (851G.131/3–1753)
3. On Feb. 24, the French-Vietnamese High Military Committee meeting at Dalat decided to expand the Vietnamese Army by approximately 40,000 men, primarily by creating a substantial number of purely Vietnamese commando units. It was also decided to turn certain areas over to Vietnamese forces and to increase the authority of local Vietnamese authorities. Among those participating in the meeting were Bao Dai, Premier Tam, Chief of Staff Hinh, Minister Letourneau, and General Salan.