204. Editorial Note

The Country Team in Laos had agreed on December 8 that a pay increase for the Lao National Army was justified. Admiral Felt recommended that the increase come out of other reductions in the Military Assistance Program for Laos. On January 2, 1959, Chief of the Program Evaluation Office, Brigadier General John A. Heintges, met with Secretary of Defense Katay to agree on reductions so that the pay raise could be funded. (PEO telegram 47–59, January 10, 1959; Department of State, Central Files, 751J.5512/1–1059) The Department of State and the International Cooperation Administration had cabled the Embassy in Vientiane on January 8 to complain that they had no prior advice on this question and stated that they saw no basis for such an increase. They maintained that the ANL was already the highest paid group in Laos and an increase would have a chain reaction among other government employees which could only exacerbate inflationary pressures in Laos. Furthermore, the U.S. Congress was already highly critical of the assistance program in Laos and such an increase would incur additional Congressional disfavor. (Telegram 819 to Vientiane, January 8; ibid., 751J.5512/1–859)

In PEO telegram 47–59, Heintges responded that the Lao regional military commanders had already been told on January 5 that they and their troops were going to get a pay raise and argued that the Lao soldier was not overpaid in the light of recent inflation in Laos. Heintges feared a loss of effectiveness and morale in the ANL if the raise was disallowed. Ambassador Smith, who was in Hong Kong, stated that Phoui feared that failure to grant a pay raise at this stage would subject his government to a possible military coup. Smith stated that he approved the pay increase, subject to Washington’s review, so long as the total military assistance budget did not increase. (Telegram 1072 from Hong Kong, January 11; ibid., 751J.5512/1–1159)

On January 12, the Department of State and the International Cooperation Administration granted Smith permission to release funds which would include a pay raise because of the adverse consequences which would flow from a repudiation of commitments made to the Lao Government before the issue was brought to Washington’s attention. Nevertheless, they did not concur in the pay raise. (Telegram 834 to Vientiane, January 12; ibid.)