93. Letter From the Consul in Hue (Heavner) to the Deputy Chief of Mission in Vietnam (Elting)1
Dear Mr. Elting: During your absence, Mr. Mendenhall passed on to me a request from the Ambassador for comment on Ngo dinh Nhu’s explanation of Can Lao financial activities. Nhu’s views are set out in … and Embassy despatch number 40 of July 30, 1959.2
You will recall that Nhu stated that the party has been used to accumulate capital for industrial development and to train entrepreneurs. He also stated that the party has built a number of schools and hospitals, particularly in Central Viet Nam.
With regard to the schools, I have been told that a new school here in Hue was built on orders from Ngo dinh Can, and I assume that this is the sort of thing Nhu has in mind. Of course, when Can orders a school built, a good bit of labor and even materials are likely to be donated, so that it is hard to know how much party money is actually spent. There is also in Hue an old high school which the owner “donated” to the party and which is staffed by teachers who donate their time. The school offers tuition-free education to children of party members.
In Tourane, I believe—though I am not certain—that a very large Catholic high school was built and is operated by the party. The new director of the school has told me he is a party member. I will try to get a little more information on this school.
With regard to the hospitals, I believe Nhu may refer to projects such as the ten village maternity rooms which the wife of the Chief of Province, Mrs. Ha Thuc Luyen, has built here. Mrs. Luyen’s maternity wards are financed by voluntary contributions, she says, but I doubt that public spirit accounts for the apparently substantial sums expended. She has raised funds by a charity baseball game and recently held a lottery; first prize was a new Volkswagon Microbus, and other prizes included a motor scooter. I never heard where the Microbus came from, or for that matter, who won it, but I am sure that Mrs. Luyen did not pay for it herself.
From time to time Vietnamese variety shows are permitted to set up a large temporary auditorium on the public park along the river. My friends tell me the rent paid does not cover the damages to the park, but the practise continues because part of the profits are paid to the party. I was also told, perhaps on purpose, that some part of [Page 244] the profits went to the Hue hospital and to Mrs. Luyen’s maternity rooms.
In the cinnamon business, Nhu asserted that very high profits were permitted in order to encourage entrepreneurs to enter a field which involves physical as well as financial risks. He implies that the Vietnamese entrepreneurs themselves go into the dangerous mountain areas to oversee the harvesting and replanting of the cinnamon. This is almost certainly not true. The cinnamon is carried down by the Montagnards from scattered groves high in the mountains and sold in relatively secure market places like that at the district headquarters in Tra Bong.
Pacification of the cinnamon areas has apparently been in part directed by Buu’s people, but the danger is mostly braved by Civil Guard units. I doubt that Buu’s agents really have penetrated to enough of the cinnamon groves to know whether the Montagnards are replanting or not. Reverend Smith says he knows of no effort to encourage replanting. Incidentally, Buu’s chief lieutenant in the cinnamon trade, Le dinh Hue, has apparently been sacked. Mrs. Buu told me recently that he doesn’t work for them anymore, and she “has no idea where he is now.”
As for development of the cinnamon industry by the Can Lao, I believe very little has been achieved. As you know, the Reds are now effectively cutting off the cinnamon trade, but even before the Reds brought terror to the mountains, the Montagnards were evidently incensed by Buu’s methods. According to Reverend Smith, the going price for cinnamon was as little as 3 1/2 piasters per kilo in 1957. This did not encourage replanting. If anything, I think that the development of the cinnamon trade has probably been retarded by the party’s quick-profit, short-term mentality.
In passing, I would also like to point out that Nhu’s explanation of the motive for high cinnamon profits is not entirely consistent. At one point he evidently said that the high profits were permitted in order to encourage entrepreneurs to enter a physically dangerous industry. Later he said that the dedicated Can Lao members were given a monopoly because private entrepreneurs would not take such risks.
I should also mention the NRM directed and supported resettlement efforts. As I reported in my letter to the Ambassador dated July 24, the NRM is in charge of the resettlement center at Nam Dong in Thua Thien Province. It has also played an important role at the Hoa My center, also in Thua Thien. In both cases the settlers have been provided with subsistence, labor and materials while establishing themselves. Can is known to have a lively interest in these projects— they are now experimenting with kenaf at Hoa My—and I think it is safe to assume that they are in fact Can Lao projects. The Cua project in Quang Tri Province may also be a Can Lao venture, [Page 245] though the main sponsor is evidently Province Chief Nguyen Van Dong.
In the case of these resettlement ventures, it is impossible to guess how much party money is involved. Hoa My is a government project as well as an NRM project, and the CVN agricultural service provides a great deal of assistance. Settlers are still receiving aid in the form of rice and implements, and Province Chief Ha thuc Luyen is rather vague about the source; he usually uses the first person pronoun “I gave 100 tons of rice,” etc. When asked directly if the aid is from the government or the NRM, Luyen answered, without much conviction, that it is from the government. In the early days, when the land at Hoa My was being cleared, I am told that NRM members here in Hue and elsewhere volunteered their labor.
At Nam Dong, I saw two bulldozers which I was told had been loaned to the settlement by the army. Luyen told me recently that “the government” had provided rice to see the 520 settlers now on location through the rainy season. But he emphasized the importance of the role of the NRM in the project.
In short, I think that when Can takes an interest in a project, he and his party mobilize whatever resources are required, whether public, private or party. But it rather looks as though the party’s contribution usually takes the form of services—organizational skills, cadres, and sometimes “donated” labor—rather than cold cash.
In the way of industrial development, I might mention the Long Tho lime plant just outside Hue. Formerly a French lime and tile plant, it was reconstructed early this year. I am told it is one of Can’s projects; the director, Ton that Huon, is one of his “financial advisors.” Here again, however, I cannot say how much, if any, party money is involved. The plant was allotted 3,000,000 piasters in the 1958 special fund for the economic development of the CVN lowlands, and this was probably enough to cover most expenses. The plant, by the way, is one of those government projects in which former landowners can invest the bonds given them in compensation for land taken under the land reform program. (I noted that our painting contracts now automatically specify that the whitewash will be made from Long Tho lime.)
In short, my impression is that the party has spent some, but probably not a great deal, of its profits on various projects which develop the economy or promote social welfare. As an organizational force, marshalling resources to achieve various projects, the party has undoubtedly accomplished some worthwhile results. But the resources used are usually not those of the party, and I wonder why the [Page 246] formal governmental structure does not perform these organizing functions instead of the party.
Sincerely yours,
- Ted
- Theodore J.C. Heavner
- Source: Department of State, Saigon Embassy Files: Lot 65 F 115, Political Subdivisions, Hue, 1959. Secret; Official–Informal.↩
- Document 85.↩