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

751G.551/12–2454: Telegram

The Chargé in Vietnam (Kidder) to the Department of State

secret

Saigon, December 24, 1954—6 p.m.

2453. Department pass Defense and CINCPAC. Repeated information Paris 740, Vientiane, Phnom Penh unnumbered. From Collins.

• Part I:

  1. Defense Minister Minh called on me 20 December to discuss my proposed Vietnam force levels. General O’Daniel, also present, has discussed our proposal with Vietnam General Staff during past week. Minh said he is in complete agreement with principle that Vietnam should have relatively small and well-trained rather than larger but less effective forces, and that he could readily agree to our proposed force structure if we were starting from scratch. However, he continues strongly to oppose reduction to 83,685 level claiming that cut of such magnitude is undesirable for two major reasons:

  a. It would render Army too small to deal effectively with sects; and

  b. It would result in bulk of dischargees seeking enlistment in armed forces of sects as alternative to unemployment, thereby increasing strength and bargaining power of sects.

  2. I pointed out that effective National Army within proposed 83,685 force structure properly trained and led would be more than a match for sects, and that in any case financial support US was prepared to furnish combined with maximum funds Vietnam was capable of providing could not finance larger force structure than we have proposed. I further stated quite frankly that in my opinion there is no substitute for vigorous leadership of Vietnamese authorities themselves in making clear to various individuals and groups that alternative to subordination of self-interest to national unity is collapse of Free Vietnam and take-over by Ho Chi Minh who would most certainly not tolerate sects with private armies and would use ruthless means to end their control over their private domains.

  3. Discussion ended inconclusively except that Minh stated General Staff was preparing study of our recommended force structure, and that he would be prepared early next week to meet with me again and settle this question once and for all. I anticipate that he may propose at that time either a somewhat higher force level, or extension beyond 1 July 1955 of period for reduction of forces, or both.

• Part II:

  1. It is clear that Minh is reflecting serious concern of Vietnam Government over impact that discharge of roughly 50% of armed forces within six month period will have on country.

  We have recognized from beginning this would be major problem but believe it could be handled through program of resettlement of dischargees in manner similar to that of refugees. However, it is possible that period 1 January 1955 to 1 July 1955 is insufficient for country to absorb dischargees without serious maladjustments in social and economic spheres as well in relations between government and sects.

  2. Accordingly, I am prepared to negotiate with Minh question of extension of period of phased reduction of forces beyond target date of July 1, 1955 if he cannot otherwise accept our proposed force structure.

  3. If period of reduction is extended, cost of supporting Vietnam forces until they reach 83,685 level will increase accordingly. At my request MAAG has prepared estimates of costs of maintaining Vietnam armed forces during phased reduction over various alternative periods of time to bring them from their present strength of about 160,000 to level of 83,685. For example, estimated costs of forces during phase-down from 1 January to December 1955 is $256,579,000 including MAAG costs and 10% contingency. Our former estimate of cost of forces for same period was total of $222.5 million ($125 million for period 1 January to 1 July 1955, original phase-down period, plus $97.5 million for period 1 July to 31 December 1955, this figure being half of $185 million for FY 1956). Thus, if phase-down period were extended to 31 December 1955, cost would be additional $34 million. If reductions do not commence 1 January, which now appears will be case, costs will be increased. If period for phased reduction is extended only three or four months total costs would be proportionately reduced below $256.6 million. I therefore suggest that interested Washington agencies not freeze planning figure for cost of Vietnam forces until I have had opportunity to study Minh’s forthcoming proposal and make recommendations with respect to possible change in period of reduction of forces.

  4. In this connection I would point out that USOM and Embassy believe Vietnam Government will have equivalent of some $43 million in CY 1955 that will be excess to government operations and which will be available as Vietnam contribution to military or other aid programs. If entire amount is used for military program, US contribution could be reduced accordingly. However, I believe only part of $43 million should be used for military support and balance assigned to other programs thereby reducing US contribution to them. This would avoid creating wide latitude within which Vietnam expenditures for armed forces could be made without US supervision, but at same time would provide for some cushion in event certain Vietnam expenditures were made that were unacceptable for US payment.¹

Kidder

1. In telegram 2671 to Saigon, Dec. 31, a joint State–FOA–Defense message, Collins was advised that agreement with Vietnam on the size of its army and on training was considered to be of top priority. To provide leeway in negotiations, the effort would be made to avoid freezing the figure of the funds to be provided for the support of Vietnamese forces. This flexibility could not be maintained for a long period of time, however, since aid for Vietnam was only one of the competing claims upon funds available for the Far Eastern aid program. (751G.5/12–2454)