751G.00/6–2251: Telegram
The Minister at Saigon (Heath) to the Secretary of State
2288. Accompanied by William C. Bullitt, visited Bao Dai at Nha Trang where we had lunch and three-hour talk on board his yacht.
1. Bao Dai asked our impressions effect on Gen De Lattre of loss his son. Bullitt thought Gen, altho feeling loss deeply, had made remarkable comeback. Bao Dai said he feared that De Lattre might now conceive war as one of revenge. He followed this up by allegation [Page 430] that Eur members French Union Forces in Indochina were physically in poor condition, and he afraid that De Lattre seek to incorporate more and more Viets in these forces instead of concentrating on formation Viet Nat Army.
2. In response Bullitt’s question as to what he feared most from De Lattre, Bao Dai said it latter’s changeability. De Lattre wld be very close to someone one day and refuse see him next. He cited case Bourgoin, presently in charge Econ Planning Section, High Commissariat, who had always worked very well with Bao Dai. Bao Dai said Bourgoin occasionally had some wild ideas but many sound ones as well. Bourgoin had wanted work for Viet Govt but De Lattre had refused permit this. So Bourgoin, a man with vast experience in Indochina, now returning to France. De Lattre, for example, was also “down” on French head of Ecole Inter-Armes at Dalat, because latter had not invited him to school ceremony. Bao Dai said invitation not sent because school head under Vietnam Min Def and rightly considered invitation shld come from Ministry. Bao Dai also feared clash might develop between Huu and De Lattre.
3. I suggested that much this difficulty might be due ill-founded and even malicious reports which De Lattre recd from his entourage and secret service. Bao Dai agreed. I remarked that De Lattre had said to me that when he next returned Saigon he was going to do some pruning of officials in High Commissariat, something which Pignon had never, never been able to do, since latter has one of over-large group of “fonctionnaires” himself.
4. In response Bullitt’s question as to make-up of Viet Minh, Bao Dai said that in north they Commies, in center they Nats, while in south there were some Commies and Nats, but in main Viet Minh southern forces were just plain “gangsters”. Bao Dai also said that he had more true supporters in regions under Viet Minh rule than in free zones, and that he reed reports from these zones almost every day.
5. Bao Dai claimed there were large numbers troops in Viet Minh whose commanders had communicated with him expressing their loyalty to his person and their readiness to surrender to him if French cld be kept out of it. However, all of Viet mil zones now commanded by French, and one must understand French insistence that defectors surrender to them in view of French mil responsibility and French losses of 50,000 men in Indochina since end World War II. Not until Viet Army has full responsibility for sizable zone wld mass Viet Minh surrenders be possible.
6. This led to discussion of lack trained Viet officers and civilian admins, and Bao Dai said that he admitted freely that Vietnam simply did not have sufficient qualified personnel at present time.
[Page 431]7. When Bullitt asked about possibility fon capital coming into Vietnam, both Bao Dai and Nguyen De expressed desire to see this happen. Bullitt asked about influence large French business firms on French policy in Indochina, mentioning their influence in French Govt, Bao Dai replied that he had no fear this influence. Big French firms had seen handwriting on wall and prepared accept changes which wld come as Viet Govt control of econ implemented. When I asked whether this meant that measures of nationalization of economy in enterprises were under consideration, he said that it not question nationalization but of Vietnamization of business, Viets must be allowed enter French firms and that Chi monopoly over certain lines business must be broken. Taking of Viet trainees in French business houses had been suggested by Bao Dai during Jap occupation, and French auths had recommended such action to French companies in Indochina. At that time, however, not one of them wld receive a Viet. Nguyen De pointed out that he and Michael Van-Vy of the Banque Franco-Chinoise were only Viets who had ever held positions responsibility in banking business, and that there only one very small Viet bank operating at present time.
Sent Dept 2288; rptd info Paris 922, Hanoi unn.