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

369. Telegram From the Acting Secretary of State to the Embassy in Vietnam¹

Washington, April 12, 1957—8:32 p.m.

2673. Joint State–ICA Message. Embtel 2000.²

1. Use United States funds purchase lands overseas for foreign nationals would pose serious policy problems.

2. At meeting between Under Secretary Herter and Mr. Hollister³ there was agreement on desirability proper land reform program in Viet-Nam but that U.S. should not directly contribute U.S. funds to pay Vietnamese landlords for land transfer payments. Instead United States will agree to meet piaster costs of other development program items in Vietnamese budget approximately equal to amount suggested for United States contribution to land acquisition subject to availability funds, thus enabling the Vietnamese Government to meet land acquisition costs.

3. Procedure as set out above based on assumption that piaster costs to be met by United States would be $3.5 million with French and Vietnamese contributing $1.75 million each based on an estimated 600,000 hectares of land to be distributed. Timing of this additional United States piaster cost under caveat para 4 below would be $1.5 million piasters FY 1958 and $2 million FY 1959 from dollar funds of existing appropriations and appropriations for those respective fiscal years as necessary. However if Vietnamese can get program underway rapidly some counterpart funds could be made available during FY 1957.

4. In your discussions with Vietnamese you should point out we are not now in position to authorize commitment of dollar funds beyond Fiscal Year 1957 and you should avoid explicit or implicit commitment of United States to furnish dollars or piasters whose availability depends on future appropriations. Rather you may suggest to Vietnamese that if Congress appropriates funds for aid to Viet-Nam in Fiscal Years 1958 and 1959 United States would react favorably to Vietnamese request for assistance to meet costs administration land reform program and other development program items in Viet-Nam budget per para 2 above.

5. You may inform Vietnamese United States prepared meet costs administration land reform program in Fiscal Year 1957 within existing programmed funds.

6. We believe certain corollary actions by Vietnamese Government required if proposed program to be successful. Therefore, Vietnamese Government should give assurances it will make every effort improve and expand its agricultural extension service, agricultural credit facilities, and farm cooperatives.

Herter

1. Source: Department of State, Central Files, 851G.20/4–1257. Confidential. Drafted by Price and cleared by SEA, FE, E (in draft) and with Herter and Hollister in draft.

   After discussion of the question of land reform in Vietnam at the OCB meeting on February 20, a Department of State draft of this telegram was cleared through ICA up to Hollister, who reversed his agency’s preliminary approval and vetoed the entire program. Department of State officials were informed that Hollister feared disapproval of a U.S. program designed to pay for private land transfers in Vietnam at a time when general aid programs were coming under increasing criticism, especially in Congress. The Department of State countered that land reform was necessary to strengthen the Government of South Vietnam, to combat Communist influence, and to increase internal security. The Department suggested that U.S. aid funds equal to 5 percent of the cost of the land transfer payments ($3.5 to $4.5 million) be used as a catalyst to get the program started. (Draft memorandum from Jones to Herter, April 2, never sent but handled by telephone; ibid., FE/SEA Files: Lot 59 D 630, Agrarian Reform, and OCB Files: Lot 62 D 430, Preliminary Notes)

2. In this telegram, December 21, 1956, the Embassy argued strongly for U.S. financial assistance, either direct or indirect, for land reform in Vietnam, which the Embassy staff believed could not get started without such assistance. (Ibid., Central Files, 851G.20/12–2156)

   Wesley C. Haraldson, the Acting Director of USOM in Vietnam, in an official–informal letter to Jones, March 2, also argued for U.S. financial assistance and warned that serious political consequences could stem from U.S. failure to support land reform. (Ibid., 751G.00/3–257)

3. At a meeting between Hollister and Herter on April 8, a compromise to the ICA–State impasse was reached. Herter obtained Hollister’s approval of a program with the provisos as described in paragraph 2 above. (Memorandum from Jones to Young, April 8; ibid., FE/SEA Files: Lot 59 D 630, Agrarian Reform)