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

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

Saigon, October 28, 1957—6 p.m.

902. Asst Sect Robertson from [Durbrow?]. While appreciate VN must take substantial aid cut due global Congressional cut as outlined Icato 612 to Saigon, while [we?] strongly share Barrows apprehension expressed Toica 584.²

We have been discussing FY 58 aid with Diem and others³ and have made it clear VN will have to take substantial cut, probably as much as 20 percent, arguing Congress cut global figure 20 percent. Diem and others have reacted rather strongly and use following arguments:

1. After defeating Vietminh and sects in 1955–1956, these elements have regrouped and have stepped up terrorist operations (there seems no question this true although situation in hand). Therefore Diem holds he cannot reduce military and security expenditures during coming year.

Diem has gone so far, due to his apprehension about stepped up Communist activities, to indicate strongly must build up military-police forces even if means little or no economic development. (We believe he is a bit too apprehensive on this point and he should devote more aid and resources to economic development.)

2. Part of his apprehension re need military strength of his own, is due in large part to unfavorable developments in other SEA countries:

(a) Neutralist Cambodia, he claims, is harboring Communist cadres who are stepping up attacks in VN (this probably has basis in fact).

(b) RLG and PL seem to be getting together and Laos may well slip under Commie influence.

(c) After Thai elections Thailand may go toward neutralism or make further accommodation with ChiComs.

(d) Most other countries, except Malaya, in South and Southeast Asia are already neutralist. Therefore, VN may find itself isolated and alone on mainland as only fully committed Free World anti-Communist country.

3. Why should Vietnam, which has backed Free World and adopted all out anti-Communist policy, have to take proportional cut to global reduction set by Congress. They argue cut the soft neutralist countries more than 20 percent and reward those who follow US policies and are actually fighting Communists by military as well as political action.

4. If VN does not get at least as much as last year less 20 percent imposed by Congressional cut, internal pressures will grow against Diem’s pro-US policies and dependence, with opposition making demagogic claim other countries seem be getting aid from both blocs, so why depend on US which cutting aid to VN. Why not get aid from other bloc to make up for US cuts.

Diem seriously, with considerable reason, beginning become apprehensive about VN possible isolation in SEA and he also seems be more isolated from VN people, both of which incline him to concentrate on military-police power. In his interests and ours he must be induced make essential decisions build up economic base to win confidence of VN people. If aid cut to $175 million will be most difficult induce him devote more to econ development, just at time when we have begun to make some headway on this matter. What momentum we have gained in effort to push econ development will be lost if we do not have concrete means induce him pursue economic plans and projects he himself would postpone or neglect.

While we do not share his full apprehension of security versus development needs, our chances of inducing him to devote more attention and resources to economic development will be greatly reduced if we have to insist VN take more than 20 percent cut. If we are not able effectively to get him to build up economic base and step up exports and if Congress further reduces aid next year, this small but vital piece of real estate in SEA may slip with the others in this area. This probably would mean Diem too would eventually go, but in any event we would lose a fairly staunch friend in the Asian mainland.

Therefore if we could give him for FY 58 less than 20 percent cut we would be in much better position insist on more firm action in econ field. It would be clear it pays be firmly on our side. To receive more than a 20 percent cut would almost certainly raise doubts on that score. It seems from here increased terrorist acts, which probably Communist inspired, as if by design aid longer-range Commie subversive campaign plan induce Diem devote too many resources to military-police effort and this in its turn, further lessens his appeal to VN people, and minimizes contrast in standard of living between north and south.

I hope therefore you will find it possible to have full consideration given to the above factors before a final decision is made to cut VN aid to $175 million and if at all possible accord VN less than 20 percent cut so that they will receive more than $180 million we have been discussing with them.

Durbrow

1. Source: Department of State, Central Files, 751G.5–MSP/10–2857. Secret.

2. In Toica 584, October 24, Barrows responded to Icato 612 in which ICA suggested a cut in FY 1958 defense support for Vietnam of $58 million, reducing Vietnam’s share to $175 million. Barrows noted that this cut would be in excess of the 20 percent global reduction and would cause considerable difficulties with Diem, which Barrows described in Toica 584 as follows:

   “Persuade Pres Diem accept even proportionate share worldwide cut difficult enough in view repeated assurances firm US support beginning with conversation Pres Eisenhower in May, and US admiration his vigorous anti Commie position. He has in fact intimated that to lump him with other recipients and to ask him to absorb proportional cut would be treating him unfairly, and damaging to his prestige. Cut of even $5 million below worldwide share would provoke charges US violating high level commitments, taking VN for granted while continuing award large sums countries much less reliable than VN in support US position. I fear final agreement FY 58 program and mil budget, now progressing well, would be seriously disturbed and greatly delayed any cut below $180 mil.

   “Earnestly request ICA/W reconsider and fix FY 58 DS aid level not lower than $180 mil.” (Washington National Records Center, ICA Message Files: FRC 59 A 2458, Box 78, Vietnam)

3. A report of a discussion, October 1, among Diem, Durbrow, and General Williams on aid to Vietnam is in despatch 115 from Saigon, October 8. (Department of State, Central Files, 751G.00/10–857) Another discussion on the same topic between Durbrow and Vietnamese Vice-President Tho, October 10, is in despatch 140, October 24. (Ibid., 751G.12/10–2457)