851G.10/5–1653: Telegram
The Chargé at Saigon (McClintock) to the Department of State
2227. Repeated information Paris 382, Hanoi unnumbered. Letourneau spoke with great candor this morning re the intolerable position in which he had been placed by French Government’s decision to devalue piaster without prior consultation either with him or the Associated States. He said his first instinct on receiving thunderbolt was instantly to resign as in eyes of Indochinese sudden decision of French Government could only mean either that he had been deceiving leaders of the three Associated States or that he was such a simpleton and so untrustworthy that his own government had kept him in dark. He had been persuaded to remain however “for time being” simply because if he did resign attitudes of three governments in IC would harden even further.
Letourneau said that he would resign upon his return to Paris. He said that it would be more than a human being could be expected to take to have to sit silently in forthcoming parliamentary debate or else to defend government for a measure in which he did not believe. He wished to regain liberty of action as a simple deputy to participate freely in forthcoming debate on IC.
It is for Paris Embassy to comment on what effect Letourneau’s decision will have on life of Mayer cabinet. My impression was that he would not be surprised if it caused government downfall.
In intrinsic issue of benefits to be obtained by devaluation, Letourneau said (last sentence second paragraph Embtel 2215 May 15) that when in Washington various officers of Department (he mentioned Bonsal, MacArthur, and economic experts) had urged advantages of devaluation. Letourneau said he had countered these arguments by stating that benefits of devaluation would be evanescent since inflation in IC would more than eat up any temporary savings accomplished by devaluation. He also pointed out that that portion of French budget which would be affected by devaluation was not whole French budget but only that slice which was applied to conduct of war in IC.
[Page 570]As for budget of Vietnam Letourneau said that it would have to be rewritten since calculations made in 1953 budget (Embassy despatch 496 May 7)1 were now completely upset by new monetary situation.
Re charges in French press (Paris 5942 and 5941 May 13, Deptel 5584 sent Paris repeated Saigon 2209)2 Minister said that stories have much over-exaggerated extent of clandestine transfers. He said plain arithmetic showed that taking into account total legal transfers of piasters into francs, there was very little left over for blackmarket. He added that even at new rate illegal transfers would continue so long as dollar was valued differently in Saigon and Paris.
Letourneau said he had written Mayer pointing out that apparently French government was formulating policy on advice of those political elements in France which were neutralist and which had consistently advocated withdrawal from war in IC. Rather caustically he had observed to Prime Minister that apparently latters cabinet read only such newspapers as Le Monde, L’Observateur, and Franc Tireur.
- Despatch 496 from Saigon concerning the Vietnamese national budget for 1953 is not printed. (851G.10/5–753)↩
- Telegrams 5941 and 5942 from Paris, May 13, concerning charges of corruption in Indochina which appeared in the French press, are not printed. (751G.00/5–1353) Telegram 5584 to Paris, May 12, not printed, described an editorial in the Washington Post of that date titled “Indochina Scandal,” which referred to articles which had appeared in the French press. (751G.00/5–1253)↩