Foreign Relations of the United States, 1955–1957, Vietnam, Volume I

31. Memorandum From the Director of the Foreign Operations Administration (Stassen) to the President¹

Washington, February 3, 1955.

SUBJECT

• Additional Assistance for Cambodia, Laos, and Vietnam
• Approval of the Use of Funds Appropriated for Assistance Authorized by Section 121 of the Mutual Security Act of 1954

The Mutual Security Act of 1954 provides under Section 121 that funds authorized and appropriated thereunder are to be made available on such terms and conditions as the President may specify for expenses necessary for the support of forces of nations in the area of Southeast Asia and for other expenditures to accomplish in Southeast Asia and the Western Pacific the policies and purposes declared in the Act. Under Executive Order 10575, dated November 6, 1954, any utilization of these funds in excess of $150,000,000 for Indo-China, or in any amount for purposes other than for Indo-China, must be approved by the President.

In order to carry out in Vietnam the recommendations of the Special Representative of the President, General Collins, and for parallel action in Cambodia and Laos as recommended by the United States country teams in those countries, it is recommended that, in furtherance of the policies and purposes of the Mutual Security Act of 1954 in Southeast Asia and the Western Pacific, the President approve from funds appropriated pursuant to Section 121 of that Act the additional allocation of up to $324,800,000 to the Director, Foreign Operations Administration, for the purpose of providing further assistance to Cambodia, Laos, and Vietnam. The allocation recommended herein is additional to the $150,000,000 already authorized for this purpose in Section 107(a)(4) of Executive Order 10575.

The additional $324,800,000 is required in order to provide funds in FY 1955 for the three countries, as follows:

(in millions of dollars)

	Total	Cambodia	Laos	Vietnam
Direct Forces Support (CY 1955)	393.2	44.0	46.0	303.2
Defense Support (FY 1955)	100.0	13.2	7.3	79.5
Subtotal	493.2	57.2	53.3	382.7
Less: Anticipated Local Govt Contribution	–83.4	–15.0	0.0	–68.4
Net U.S. Cost	409.8	42.2	53.3	314.3
Plus: U.S. Contribution to Support of French Expeditionary Corps	+ 100.0
Total Cost to US.	509.8
Less: French franc counterpart applicable to FEC Support	–35.0
Less: Previous allotments from Section 121	2–150.0
Additional Assistance Required	324.8

The amounts for Direct Forces Support to Cambodia, Laos, and Vietnam provide for calendar year 1955 financing of aid heretofore made available through France. The cost estimates are based on national force levels considered necessary to accomplish a twofold mission: the establishment and maintenance of internal security; and the capability of providing sufficient initial resistance to external attack to prevent the countries from being rapidly overrun before outside assistance can be brought to bear. As further security until national forces have achieved the requisite military effectiveness, it is proposed that the United States help defray the costs of the French Expeditionary Corps.

Unlike direct forces support, Defense Support assistance has been channelled directly to the three States since inception of the programs in FY 1951. Both the character and scope of assistance, however, have been substantially changed in FY 1955. Some $45 million has been programmed for aid to Vietnam for evacuation, relief and resettlement of about half a million refugees from areas north of the 17th parallel. An additional $55 million, distributed among the three States as indicated above, will provide continuing support for projects of proven value initiated in earlier years and for an expansion of activities needed to strenghthen the governments and economies of the three countries.

Both the magnitude and types of assistance proposed for financing in FY 1955 are considered to be essential to the achievement of the major objectives underlying General Collins’ 7-point program for Vietnam and the parallel actions recommended by the United States country teams for Cambodia and Laos.

The Secretary of State, the Secretary of Defense and the Director of the Bureau of the Budget concur in the recommendation contained in this memorandum.³

1. Source: Department of State, Central Files, 790.5–MSP/2–355. Confidential. A stamped notation at the end of the source text indicates that the original of this memorandum was signed by Stassen.
2. A more detailed breakdown of this figure is in a memorandum from Stassen to Eisenhower, February 2. (ibid.)
3. According to telegram 3366 to Saigon, February 9, Eisenhower approved this request on February 3. The Department of State then authorized Kidder to negotiate, over his signature, an exchange of notes with Vietnam on direct forces support. (Ibid., 751G.5–MSP/2–955) In telegrams 3368 and 3340, February 9 and 10, Kidder received verbatim draft texts of the notes to be exchanged. (Ibid., 751G.5–MSP/2–955 and 751G.5–MSP/2–1055, respectively)