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

751G.5/8–2053: Despatch

The Ambassador in France (Dillon) to the Department of State

top secret
No. 589

Paris, August 20, 1953.

Ref:

• Embtel 647, August 19, 1953.¹

Subject:

• French 1954 Program for Indo-China

Distribution as directed by the Secretary’s office.

1. As promised in the reference telegram, the Embassy is transmitting as enclosures to this despatch the following documents relating to the French 1954 program for Indo-China,² which have been handed to Mr. Labouisse by Mr. Marc Jacquet, Secretary of State in the Prime Minister’s Office in charge of Associated States Affairs:

(a) Memorandum of August 18, 1953 summarizing recent developments in the Indo-Chinese situation and proposing a joint Franco-American examination of the Indo-Chinese problem in the light of these developments, in order to determine the additional measures which might be taken by the two Governments with a view to putting into effect a program calculated to produce a solution within a reasonable period of time (Enclosure No. 1). The following three documents are annexed to that memorandum:

(1) Expenditures for the War in Indo-China during the French Fiscal Year 1953 (Enclosure No. 2).

(2) Expenditures for the War in Indo-China during the French Fiscal Year 1954 (Enclosure No. 3).

(3) Detailed Estimates of the Military Expenditures for the Armies of the Associated States in 1954 (Enclosure No. 4).

(b) Table entitled “Plan for the Build-up of the National Armies of the Associated States (I. Ground Forces)” (Enclosure No. 5).

(c) Table entitled “Plan for the Build-up of the National Armies of the Associated States (II. Gendarmerie, Vietnamese Air Force and Navy, and French Cadres)” (Enclosure No. 6).

(d) Table entitled “Evolution of the Force Build-up of the National Armies of the Associated States During the First-Half of 1953 (Forces in Being) “(Enclosure No. 7).

2. In handing us the enclosed memorandum, Mr. Jacquet emphasized that it was a coordinated presentation, embodying not only his own views and those of Prime Minister Laniel but also those of the other French Ministers concerned. He further said that it was based upon the most recent estimates received from Saigon, but that particularly in the case of 1953 it had not been possible to calculate with any degree of firmness the effects upon the level of expenditure of such elements as the devaluation of the piaster, the operations in Laos, and the first phase of the Navarre Plan. Thus the definitive picture for 1953 would probably not be available until early in 1954 after the close of the regular period of the 1953 fiscal year.

3. Mr. Jacquet referred to the estimated gap of 135 billion francs ($385 million), as shown by the enclosed documents, in financing for the 1954 force build-up of the National Armies of the Associated States, and stated that he considered this to be a minimum figure. In addition to the difficulties of forecasting expenditures as far in advance as 15 or 16 months, it should be borne in mind that the estimate is predicated on the assumption that the combined defense contribution of the Associated States from their own resources will rise from 3.2 billion piasters (32 billion francs) in 1953 to 6.0 billion piasters (60 billion francs) in 1954. While the French Government believes that this estimate is a reasonable one and intends to urge the Associated States to accept a commitment of this magnitude, no understanding yet exists with them on this point. The previous figure of 150 billion francs (about $430 million) mentioned to Ambassador Dillon by Prime Minister Laniel was based upon the assumption of an Associated States contribution of 4.5 billion piasters (45 billion francs), and in the end this may prove to be a more realistic figure.

4. Mr. Jacquet said that Bao Dai was prepared to carry out the program described in the enclosed memorandum for the build-up of the Vietnamese forces by seeing to it that the necessary manpower was available as needed. Indeed, the decrees providing for the calling up of the required numbers of men had already been prepared, and their issuance was only waiting upon the reorganization of the Vietnamese Government which Bao Dai was now in the process of carrying out. Undoubtedly the signature and promulgation of the decrees would be one of the first acts of the new Government, which was expected to be formed in the early part of September. Of course, Mr. Jacquet stressed, it would be of no use for the Vietnamese to go ahead with the calling up of draftees, if there were no means available for training and equipping them. Accordingly, Bao Dai would certainly not proceed with his plans unless and until some satisfactory arrangement could be worked out with respect to the problem raised in the enclosed memorandum of how to finance the 1954 build-up of the National Armies.

5. After scanning the memorandum and the annexed documents, the Embassy representatives referred to the fact that no mention was made therein of the relationship between the 1954 plans for Indo-China and French 1954 NATO expenditures and force goals. Mr. Jacquet replied that it was “too soon” for the French Government to be able to say anything firm on this point, although it was their intention to maintain the Lisbon commitments. It was their hope that the nine battalions which had been promised to General Navarre could be found by certain switches among the forces stationed in France, Germany and North Africa without compromising the NATO goals.

6. The Embassy representatives observed that the memorandum was silent on the requirements for the build-up of the National Armies during the period after 1954, and inquired whether the problem of financing this program in 1955 might not be even more acute than in 1954, given the fact that the level of Associated States forces in being at the beginning of the period would be considerably higher in the second year. In other words, was it contemplated that there would be a financial gap in 1955 comparable to the gap now estimated for 1954, for which United States assistance would be sought? Mr. Jacquet replied by saying that he thought it was important not to make an arbitrary separation of the costs of the National Armies from the costs to France of maintaining French Union forces in Indo-China. What was significant for France was the total expenditure for both of these items (not of the financial contribution of the Associated States). In 1954 that estimated total was greatly in excess of what France was capable of carrying herself, and this was the reason for requesting from the United States additional aid (over that specified in the April 26 memorandum).³ However, Mr. Jacquet said, if the program which the French worked out can be realized in 1954, it will be possible by the end of that year to replace a part of the French Union troops now stationed in Indo-China with Associated States forces. This means that the expenditures for the French Expeditionary Corps will decrease in 1955 and that the overall costs of the Indo-Chinese war may decrease as well, since the relatively well paid professional soldiers of the French Expeditionary Corps will be relieved by Associated States forces composed of less costly draftees. The Embassy representatives inquired whether this meant that France would be prepared to make available as assistance to the Associated States in 1955 any savings realized on the costs of the Expeditionary Corps as compared to the previous year. Mr. Jacquet replied that he was, of course, not in a position at the present time to state what the intentions of the French Government would be in 1955. The question of financing the Indo-Chinese effort for that year would have to be examined at a later time when the various elements likely to affect the situation in 1955 could be foreseen with greater clarity than at the present time. However, he felt that his point about the total cost of the Indo-Chinese war was relevant and should not be lost sight of in connection with the question we had raised.

7. With reference to the three tables on the program for the buildup of the Associated States forces, which were handed to Mr. Labouisse by Mr. Jacquet at their meeting of August 13 (See Embtel 572 August 13),⁴ the following observations may be made: The schedule for the activation of forces is contained in the two tables entitled “Plan for the Build-up of the National Armies of the Associated States,” the one table relating to ground forces and the other table to all other units (Gendarmerie, Vietnamese Air Force and Navy, and French cadres). Thus, in order to obtain a complete picture of the planned force build-up, the totals shown in the two tables must be added together. The third table shows the actual progress made through June 1, 1953 in the realization of the plan for the build-up of the Associated States ground forces.

8. As stated in the reference telegram, our preliminary examination of the material received indicates that it has certain major deficiencies. For example, in addition to the failure of the memorandum, as noted above, to discuss the relation of the Indo-Chinese problem to French 1954 NATO expenditures and force goals or the outlook regarding the build-up of the National Armies in the period after 1954, it contains no exposition of French strategy and tactics in Indo-China. We are proceeding to a full analysis of the data received and will then discuss with the French the additional information that will be required. We will of course use as guidance in this connection the points contained in Deptels 461 of August 12 and 545 of August 18.⁵ We would appreciate receiving any further comments which you may have as soon as you have had an opportunity to examine the material enclosed herewith.

For the Ambassador:

B. E. L. Timmons

Acting for the Minister for Economic Affairs

1. Supra.
2. The enclosures are not printed.
3. See footnote 2, p. 507.
4. See footnote 2, p. 729.
5. See footnote 4, supra.