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

751.5 MSP/11–2753

The Acting Special Assistant to the Secretary of State for Mutual Security Affairs (Nolting) to the Deputy Director for Program and Planning, Foreign Operations Administration (Ohly)¹

secret

[Washington,] November 27, 1953.

My Dear Mr. Ohly: The Department has studied carefully the proposed statement on aid to France which has been prepared for submission to the Bureau of the Budget in connection with the fiscal 1955 aid program.² We support fully the proposed aid figure of $800 million, to be programmed as assistance to the Governments of France and the Associated States of Indochina, toward financing part of the costs of the war in Indochina during the calendar 1955 period. This amount is exclusive of any request for regular MDAP assistance for Indochina. You will recall that the Department’s memorandum to the National Security Council last September 8, in which the FOA concurred, stated the view that “the French program holds promise of success and can be implemented effectively. It should be recognized that, given favorable progress in the 1953–54 campaign, a substantial further contribution of United States aid will probably be required in fiscal year 1955.”

The Department concurs in the estimate that the need for such aid in 1955 will probably continue at the same level as in 1954. Although we do not have over-all estimates for 1955, and in fact have at this time only an outline of expenditure estimates for 1954, we did receive from the French last spring a projection of requirements for the Associated States forces through 1955. This projection indicates that the cost of these growing forces will again increase in 1955, as it did in 1954, exclusive of the cost of MDAP assistance. Although a similar projection is not available for the French Expeditionary Forces, we believe that as long as these forces remain at the present strength, their cost is not likely to decline, in view of the large proportion of recurring costs in relation to total costs. There are now no French plans for any reduction of these forces prior to the fulfillment of the Navarre plan, and in fact the French are increasing their air personnel in Indochina.

Consequently, our best estimates indicate that in 1955 the over-all cost of the war in Indochina, exclusive of MDAP, is likely to remain at the same level as in 1954, if not increase because of the expansion of local forces. On the other hand there is no basis at this time to believe that there will be very much improvement in the ability of France and the Associated States to increase their contributions toward the financing of the war effort. The United States therefore will be faced with the necessity of providing at least the same magnitude of financial support in 1955 as during the present fiscal year. Our basic reasons for this aid are outlined in NSC 124/2 and in the memoranda underlying NSC Actions 874 and 897.³ The revision of NSC 124/2, now under consideration in the Planning Board, reaffirms the need for continuing financial assistance in support of these military operations.⁴ To achieve our basic policy objectives in Indochina, the Department agrees that it will be necessary to seek the required Congressional authorization in order that the United States may be prepared, as necessary, to continue its financial support of military operations in Indochina on the present scale. This we agree would involve the provision of aid on the order of $800 million from fiscal 1955 funds. The Department believes however that in considering this program, and presumably in presenting it to the Congress, it should be understood that the actual programming of the aid would be subject to (a) further study of over-all costs of the war effort in 1955, (b) possible reductions in the amount of United States support if France and the Associated States become more able to finance the war, and (c) the continued carrying out of the Laniel–Navarre program in 1954 and in 1955, in accordance with the agreement of September 29, 1953.

I suggest that in its hearings on this program, the Bureau of the Budget may wish to hear from Mr. Philip Bonsal, who has just returned from Indochina as the State Department representative on the United States Joint Military Mission which surveyed the military situation and the progress achieved under the Laniel–Navarre program. In view of the size of the proposed French program for fiscal 1955, and the importance which the Department attaches to it, I am sending a copy of this letter to the Director of the Budget.

Sincerely yours,

Frederick E. Nolting, Jr.

1. Drafted by Edgar J. Beigel of WE.
2. For documentation on this subject, see volume vi.
3. For the text of NSC 124/2, “U.S. Objectives and Courses of Action With Respect to Southeast Asia,” June 25, 1952. see volume xii. For text of NSC Action No. 874, Aug. 6, see p. 718. For NSC Action No. 897, see extract from the memorandum of discussion at the 161st Meeting of the National Security Council, Sept. 9, p. 780.
4. The revision was embodied in NSC 177, “U.S. Objectives and Courses of Action With Respect to Southeast Asia,” Dec. 30, 1953. NSC 177 as amended was adopted by the National Security Council on Jan. 14, 1954. The amended report was issued as NSC 5405, Jan. 16, 1954; for extracts, see p. 971.