751G.00/7–2753: Telegram
The Ambassador in France (Dillon) to the Secretary of State
priority
330. Eyes only for the Secretary from Ambassador. Indo-China problem rapidly reaching a crisis amid welter of political infighting. Evidence of seriousness of situation is that Laniel has asked me to meet him privately at lunch on Wednesday1 at house of one of his friends to discuss Indo-China. He did not want meeting to take place at Matignon, because he wishes to avoid all publicity. Laniel apparently not even informing Bidault of meeting.
Situation is apparently as follows:
French Government considers that first year cost of establishing local Vietnam army of necessary size, plus required expenditures by French Union forces above present scale of effort, is on the order of $200 million minimum and may very well run nearer $300 million. French do not have resources available to meet any part of this additional effort. Bidault personally is very averse to requesting US, either formally or informally, to furnish this assistance. He feels that it would be a disaster for himself personally and for present government to make such a request and have it refused in whole or in part. Bidault feels that such an eventuality could even have a serious effect on NATO alliance and might well bring a neutralist government to power in October. Bidault further feels that neutralist sources are commencing a personal attack on him as being the strongest block to their success. There are indications in neutralist press that this is indeed the fact.
[Page 700]Primarily because he believes no further funds are available from Washington for Indo-China, Reynaud has moved close to Mendes–France and neutralist position on Indo-China. Auriol told me Friday that Bidault was leader of group in Cabinet favoring a continuing effort in Indo-China and that he had so far prevailed in Cabinet meetings. Hence importance attached to Bidault views in this telegram.
What French of Bidault persuasion apparently want is for United States, of its own volition, to offer $250 million extra for Indo-China. Even then, they may be attacked here by neutralists as trading French blood for American dollars.
Korean truce, leaving France only nation still at war with Communists, will greatly aggravate situation here.
Action of Senate Appropriations Committee in cutting 100 million from Indo-China appropriation seems like final blow and will, of course, be welcomed by Mendes-France neutralist group as indication US also has no real interest in continuing the war in Indo-China. This cut was reported in local press as being made on advice of administration spokesman.
Unless we are prepared to tell French Government in very near future that necessary funds, i.e., 400 million plus 250 million additional can be made available, I feel that we should be prepared for serious and rapid deterioration of Indo-China situation this fall, possibly leading to effort to open negotiations either directly or indirectly with Ho Chi-Minh by end of year.
Would appreciate any advice you can give me for my meeting Wednesday with Laniel which may well be crucial. In particular, would appreciate any information regarding background of cut in Indo-China appropriation by Senate Committee. I very much hope that this cut will be restored on floor of Senate unless we are actually preparing to let Indo-China go.
Detailed information on Reynaud viewpoint contained in Embassy telegram 285.2