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

372. Telegram From the Ambassador in Vietnam (Durbrow) to the Department of State¹

Saigon, April 29, 1957—6 p.m.

3280. Following is summary requested para 2 Deptel 2692:²

1. Internal Political

Diem undisputed leader of country. Although obviously respected he does not enjoy nation-wide popularity. Government policies reflect his convictions and attitudes his thinking still largely conditioned by sense of general vulnerability of Vietnam which he destined save. From this view have flowed two major preoccupations:

a. Need for centralization. Diem has achieved primary goals of establishing his firm control over central government and in general government’s authority over entire national territory.

b. Need for security. Although large measure security achieved, isolated but not insignificant acts of violence still occur and Diem views certain undeveloped areas highly vulnerable to penetration. Despite improvement over last year, present Communist and sect subversive capabilities undoubtedly remain important, particularly if supported from Cambodia. Attempted assassination at Banmethuot has strengthened his fears. He has become more intolerant of dissenting opinions, keener to force through his program of settlements in border and highland areas and to strengthen his security forces.

In carrying out policies Diem, distrustful by nature, continues rely heavily on small circle of advisers including members of his family.

Diem’s rigidity in pursuing goals and brooking no opposition has alienated many able persons. He has antagonized in varying degrees the Chinese and certain Catholic elements and has not yet sought regain loyalty defeated Cao Dai and Hoa Hao. Policy towards Chinese (citizenship law combined with exclusion foreigners from eleven occupations) aimed at breaking Chinese hold over economy threatens some possible economic disorganization and serious damage prestige of Taipei to advantage of Peiping among Chinese Vietnam. Dominant position of family has with some justification made it natural target of criticism and, although Diem himself above suspicion, some members family often accused of corruption.

Although successes over past year remarkable and degree of stability and security achieved now make long-term planning possible, regime still not successful in overcoming native complacency and generating broad popular support or enthusiasm. In event Diem disappeared, most probable Vice President Tho could take over but with army arbiter of situation. Embassy knows of no other figure capable of effectively replacing Diem. Despite fragility regime, strength of country far greater than that of others in area and greatly improved during past year.

Assuming present regime able remain in power and maintain security long-term strength of regime and ultimate public support will depend on its capacity show appreciable rate of progress and thereby effectively compete with north. This Diem understands and now most concerned obtain early results in social and economic fields. He has repeatedly stated in past year that north-south contest moving from phase of military propaganda to one of economic competition.

2. International

Relations with France have improved appreciably over past year though still subject to fluctuations. French have decided withdraw military contingent from Seno supply base at Saigon and Diem has requested withdrawal of French navy and air force training missions, which will mean virtual elimination French military from Vietnam. If other irritating problem of transfer of common properties can be solved quickly, believe there chance of more fruitful development relations in economic and cultural fields. However, Diem remains deeply distrustful of French and this attitude is shared or reflected by most top officials. He is particularly bitter about machinations in Cambodia and Laos of French “colonialist” officials.

GVN continues snub GRC by delaying send Minister to Taipei although Chinese Minister Yuan arrived Saigon January 8. GVN policies this matter and re Chinese Vietnam may well affect GRC prestige in area. However Diem determined rectify special privileged position Chinese obtained under French. He considers that Nationalist China has no influence on local Chinese, a few whom are Communists and many fence sitters secretly proud of China’s newly won “independence.”

Relations with Japan have not been cordial and question of reparations remains unsolved. Diem fears Japanese economic penetration as prelude to political domination and there are indications GVN may try boycott Japanese goods.

Diem increasingly concerned developments Laos and Cambodia. He appears convinced Communists coordinating subversion efforts Vietnam from Cambodia. He sought recently through Chau–Sihanouk meeting reach reconciliation of differences with Cambodia and there are indications of some progress.³

Relationship with Laos considerably easier than with Cambodia. Nevertheless, Diem currently worried that Petsarath may become Prime Minister and make coalition deal with Pathet Lao that will result Communist domination Laos and consequent threat GVN.

President has continued to seek greater support from countries this area to build up position GVN against DRV and had planned number of short official visits. First one scheduled for Philippines cancelled by Magsaysay’s untimely death.⁴ Vietnam has succeeded in having SEATO members take its participation under consideration and has also continued making effort to be represented at maximum number international conferences where it has sent generally able representatives. It now seems certain Colombo Plan Consultative Committee will meet here in autumn.

3. Economic

Economic situation good and progress made during past two years remarkable. This year government operating under well-prepared balanced budget (including aid) approved by National Assembly February along with new taxes designed increase revenues and siphon off windfall profits. On strictly government account, government cash expenditures have been covered by cash receipts, including US assistance on military expenditures, for last 13 months. In foreign exchange field, limited-access market has provided means for profit transfers. In import licensing, improvements have begun to result in increased arrival of merchandise. Local money market presently so tight that National Bank credit at five percent will soon be required.

Retail and wholesale price indices at end of 1956 declined to levels of September 1955 and are still generally stable. Supplies of goods more than adequate in most categories.

Agricultural production continuing increase in most lines. Exports of rubber, rice and miscellaneous commodities, most of which enjoy special exchange rate, expected to increase value or level of imports not expected increase and will continue function in generating piasters to support military and economic programs.

Announcement of satisfactory investment policy seemed to offer possibility of improving investment climate. However, GVN attitude towards specific pending private investments (Toica 1550 of April 26)⁵ indicates for time being policy not likely to be applied. Prospective early conclusion FCN treaty with US will be helpful.

Some new native small-scale investment appears be taking place while several foreign investors showing interest. Barring unforeseen developments Vietnam should show continuing economic progress in 1957. This year first time GVN has been able concentrate on economic problems and begin to think in terms of long-range program economic development looking toward achievement self-sustained economic growth.

American economic aid programs likely continue have important beneficial effect in basic fields of transport, education, public health, agriculture and selected industries.

4. Military

Steadily improving Vietnamese military posture now assures fulfillment of internal security mission and allows greater emphasis on defense against external aggression. However true value of progress lies not in physical improvements but in fact military forces are in state of transition. Previously self-satisfied military beginning become aware of weaknesses. Understanding and acceptance facts of situation, close cooperation with MAAG and TERM, willingness correct deficiencies, realization need for austerity lay foundation for progress in all fields.

However, low education level, lack of command and planning experience, paucity of technical know-how and long acceptance of low standards cannot be quickly overcome. Following are major problems and prospects for solution:

a. Defense planning gradually becoming competent and realistic but will continue inadequate until efforts all SEA nations are integrated. SEATO remains key to establishment required solidarity.

b. President and some members his staff realize need for plans mobilize all resources in defense Vietnam. Such plans beginning to be developed. Current conscription planning may soon be implemented and eventually result in creation reserve force which will strengthen defense and ultimately permit adjustments in structure all armed forces in line with local support capabilities.

c. Deficiencies in administration, ill-drawn command lines, and inadequate documentation are being met by rewritting tables of organization and by joint MAAG–RVN [ARVN] development new overall organizational concept to define lines of responsibility and functions.

d. Progress against low-education level expected through maximum use off-shore schools, development local schools, and possible employment US instructors in military academy which has agreed adopt four year curriculum. Plans drawn up to conduct special training course in Thailand and air–ground operations course in Okinawa to develop Vietnamese potential. Air–ground operations training will be given at San Diego to cross-train key Vietnamese officer graduates of US schools.

e. Military efforts to bring full internal security to highlands include major program of psychological action, coordinated with US and Vietnamese civil program.

f. Expected early departure French air and naval training missions will add to MAAG burden and require limited increase personnel. If this personnel provided together with Vietnamese graduates of US schools, expect no difficulty assuming present French responsibilities and decided advantage having one doctrine and one set standards.

g. Plans drawn up for increasing naval shipyard capabilities to allow overhaul and repair all Vietnamese ships and some other Asian vessels with full operation of shipyard by fall 1957. GVN desires use shipyard for development civilian capacity, dependent on development sound plans; therefore, no evident conflict with navy plans at present.

h. As yet no replacements programmed for F8/RF8 and L–19 aircraft scheduled for retirement from USAF inventory in June 1958 and 1959 respectively.

i. Efforts raise capabilities for aircraft overhaul recently assisted by GVN allotment 10 million piasters to governmental owned Air Vietnam for technicians training and equipment. SAMAP is investigating overhaul capabilities Air Vietnam and is reported optimistic.

j. Problem improving airfield facilities being only partially met by USOM FY57 and FY58 civil aviation projects.

k. Modern fiscal and budget procedures being urged to improve previous inefficient system.

l. Control of logistics continues a major problem. General answer lies in pursuing actions already instituted by TERM and higher headquarters. Successful development logistical capability depends upon continued support of US and retention MAAG/TERM at no less than current strength plus augmentation to replace French training missions.

Durbrow

1. Source: Department of State, Central Files, 751G.11/4–2957. Secret. Also sent to Phnom Penh, Bangkok, Vientiane, Taipei, Tokyo, Paris, London, and New Delhi and passed to the Department of Defense for CINCPAC.

2. This telegram, April 15, reads as follows:

   “In preparation Diem visit request following info by telegram by April 30:

   • “1. Best estimate points Diem likely raise and Embassy suggestions or comments relative thereto;
   • “2. Brief overall summary situation and prospects Viet-Nam highlighting particular problems as of end April.” (Ibid., 751G.11/4–1557)

   Paragraph 1 was answered in telegram 3292, April 30. (Ibid., 751G.11/4–3057)

3. Acting Foreign Secretary Chau met with Sihanouk at Siem Reap March 2–4 for discussions on current Vietnamese-Cambodian political-military affairs. (Weeka 10, telegram 2736 from Saigon, March 9; ibid., 751G.00(W)/3–1157)
4. On March 17.
5. Not printed. (Washington National Records Center, ICA Message Files: FRC 58 A 403, Box 173, Saigon)