751J.5/12–354: Telegram
The Minister in Laos (Yost) to the Department of State1
priority
160. Repeated information priority Saigon 229, Phnom Penh unnumbered, Paris 38. Department pass Department of Army. Saigon [Page 2338] for Chief MAAG. Reference Legation telegram 150; repeated Saigon 219.2 Minister Defense called yesterday to present projected Lao military budget for calendar 1955 and to request United States credits covering first quarter be opened by December 15 in order to allow time despatch pay and maintenance funds to units in remote provinces by January 1. When I protested shortness of time and pointed out my government must have time examine carefully proposed expenditures this magnitude, he expressed regret and said data received only last week-end from French headquarters Saigon (this is correct). He emphasized French funds for payment troops and purchase food would not be available after January 1 and that if US credits not forthcoming in time results would be disastrous. At Minister’s suggestion Military Attaché and Legation officers later went over figures in detail with chief French training mission and French Chef de l’Intendance.
Proposed budget totals 21.6 billion French francs as compared with thirteen billion for calendar 1954. Four principal reasons for increase are: (1) approximately 6,000 of 30,000 Lao forces under arms this year were until October attached to French Union forces and under French Union budget (no figures re 1954 cost these forces available here); (2) projected increase about 1,000 in Lao service forces agreed by Franco-Lao high military committee in October; (3) large projected increase in size gendarmerie (which is to some extent compensated by decline in size commandoes); (4) increased engineering expense for building military installations and for repairs strategic roads and bridges destroyed by war (road repair program to be divided between military and civil authorities with former taking lion’s share because of availability labor); (5) increase size French training mission up to 1,500 (as provided Geneva accord) to compensate in part for withdrawal French Union officer cadres. Breakdown proposed 1955 budget by main headings follows (in million francs): (1) French training mission 3038; (2) Lao officers pay 397; (3) Lao troop pay 3205; (4) commandoes pay 378; (5) civilian personnel 32; (6) family allowances 424; (7) benefits to dependents of casualties 400; (8) food 3039; (9) clothing 2325; (10) medical 200; (11) transportation costs 265; (12) miscellaneous (including proportionate share expense MAAG Saigon) 82; (13) armament 192 (as compared 613 for 1954); (14) automotive and pool 1302; (15) signal 281; (16) engineer (roads and bridges) 1955; (17) gendarmerie 1270 (compared 294 for 1954); (18) aviation 610 (compared 152 for 1954 since French have turned over several light aircraft to Laos).
Present approximate strength military forces is 31,000 consisting of 13 infantry battalions, 17 light battalions, 40 national guard companies, [Page 2339] 25 commandoes, 1 para battalion, 1 para company, 3 transport companies, 6 engineer companies, 2 reconnaissance companies, service, headquarters and signal installations. There is very grave shortage officer cadres. French estimate 9,000 minimum required for present forces (we would estimate much larger minimum requirement), whereas only 800 presently available and there is already heavy political pressure to demobilize approximately 300 civil servants now holding reserve commissions in forces. French agreed this situation made reduction Lao forces desirable but feared psychological effect pressing for substantial reduction at this critical moment. However, they suggested 3,000–4,000 overdue for discharge might be dropped shortly without serious repercussions.
French emphasized that, while they expect to be paying bills as late as April for some items ordered under 1954 budget, they have no authority expend single franc after December 31 for current expenses such as payment [garble] etc. Obviously if these expenses not met army would soon disintegrate.
This situation obviously poses serious problem for United States. We cannot permit collapse armed forces at critical point in frontline against Communism, particularly when we have hitherto been supporting these forces indirectly and have informed Lao Government our aid, including aid of this kind, will after January 1 be furnished directly. On other hand we do not wish to buy pig in poke or agree support forces which are excessive or beyond Lao capability providing officer cadres. From political viewpoint, it would be most unwise to undermine Lao faith in United States support by refusing indispensable aid or proposing drastic cut in Lao forces just when show-down with Pathet Laos over northern provinces is impending. On other hand, there is advantage retaining greatest possible bargaining power in United States hands for immediate future in order be in position exert maximum pressure against possible Katay–Pathet deal involving entry latter into government or other dangerous features. While we do not consider this contingency likely, we should nevertheless be fully prepared to deal with it if it comes.
Under these circumstances we recommend (a) immediate advice to Lao Government that credits will be opened December 15 to cover one-sixth (two months requirements) of amounts listed under items 2, 3, 4, 5, 6, 7, and 8 in third paragraph this message for purposes specified; (b) MAAG Saigon give immediate detailed examination to projected budget and submit recommendations to Washington and Legation Vientiane by December 20; (c) on basis these recommendations interested Washington agencies, by January 1 if possible, agree on appropriate amount to be advanced for all items military budget for first quarter (expenses French training mission might form subject [Page 2340] separate Franco–United States negotiations, though must be remembered French Mission absolutely indispensable to present effectiveness Lao forces); (d) in meantime Legation be instructed re character memo understanding to be negotiated with Lao Government; (e) interested Washington agencies decided desired degree and manner of United States control to be exercised over Lao military expenditures and despatch necessary personnel to Vientiane by January 1 if possible (in view lack housing United States personnel must be minimum and control exercised largely through French); (f) during first quarter 1955 careful review Lao armed forces and military budget, plus assessment political developments, then form basis United States aid for balance calendar year. For United States budgetary purposes, however, we should plan on likelihood our having to expend, if external security and internal stability of Lao are to be maintained, sum not far below that proposed in Lao budget outlined above. Military Attaché concurs.
Please instruct urgently.