Foreign Relations of the United States, 1952–1954, Indochina, Volume XIII, Part 2

851G.00/10–554: Telegram

The Secretary of State to the Embassy in Cambodia¹

secret
priority

Washington, October 5, 1954—4:17 p.m.

90. Following sent Saigon as Usfoto 372 repeated herewith for your information:

1. At third meeting La Chambre–Faure–Ely talks held afternoon September 28 Gov. Stassen took following position on French and U.S. Economic Aid Programs for Associated States: (a) U.S. and France should deal directly with AS in these programs, (b) Each AS should appoint economic aid agency to coordinate all programs; (c) Franc grants should be controlled by AS and France, dollar grants be controlled by AS and U.S.; (d) Magnitude of program be decided later through consultation all parties. These your guidelines for future discussions with AS and French.

2. Faure specifically agreed to (a) above and left other points uncontested. He warned that left to selves Vietnamese might plan grandiose programs not directly geared to winning election. Recommended programs emphasizing relief; resettlement; land reform and rehabilitation of transportation facilities and public utilities. He estimated cost two year program at total 86 billion francs. He stated France budgeting 20 billion francs this program for calendars 1955 and 1956 combined. (Details follow in separate cable). No discussion Franco-American relationships in operational aspects programs. Request Mission recommendations this matter.

3. USOM authorized proceed discuss with AS magnitude and contents program for each State and, pending establishment AS aid agency referred to 1(b) above, USOM authorized consult separately with French. Will advise you further how believe AS agencies should operate in future. Meantime request any suggestions you may have. Request USOM/Saigon, after consultation other parties, submit FOA/W soonest, two year program showing both foreign exchange (expressed in dollars) and local currency requirements, and giving (U.S. fiscal) annual totals for each State and by major activities. Also give brief description contents each field activity. Local currency requirements should reflect expected expenditures; foreign exchange requirements reflect obligations.

Dulles

1. Drafted by Frederick H. Bunting, Chief of the Cambodia–Laos–Vietnam Division, Office of Far Eastern Operations. Foreign Operations Administration. Also sent priority to Vientiane as telegram 56.