751G.11/7–3052: Telegram
The Acting Secretary of State to the Embassy at Saigon1
294. No distribution outside Department. Eyes only Amb. Urtel 248, Jul 30. Even after making all allowances for oriental attitude toward these matters, Dept seriously concerned at your report of Bao Dai‘s finances. Publicity will have most adverse effect on US public and official opinion in connection with our whole IC policy. Nevertheless, question of how much Vietnamese Govt wishes to devote to Bao Dai is largely internal question and one which, when Tam publishes budget as indicated your tel 285,2 will presumably come to public attn and result in public discussion in Vietnam, Fr and here in near future.
We do not believe we shld take specific position on overall matter, particularly until we have more complete info as to local dministrativee responsibilities financed by Bao Dai from private means. We do, however, believe that we are justified in assuming in conjunction with Fr firmest possible position regarding further transfers abroad designed [Page 240] to build up Bao Dai‘s private means. At time when Fr and US taxpayers are supporting soldiers of Viet Nam and Fr in major effort to save Vietnam from Commie aggression, we cannot tolerate selfish transactions demonstrative of lack of faith all our efforts whether Bao Dai or others are involved.
Dept feels this matter goes beyond question of Bao Dai and that, undoubtedly many others, both Fr and Vietnamese are being authorized to make or are making similarly unjustifiable transfers. We suggest, unless you perceive objection, you shld take it up with Letourneau, endeavoring to secure adoption of policy which will make impossible further transfers of flight capital not justified by current exchange regs. Adoption of such policy shld work no hardship on Bao Dai who can certainly finance his activities abroad from funds already available to him.
You shld also discuss whole situation first with Letourneau and, then in your discretion with Nguyen De and Bao Dai, with particular reference to need for placing imperial finances on basis that will not discourage efforts and sacrifices of Viet people or of their Allies in Fr and U.S. We think, however, Letourneau shld carry ball on this one. We await your report and suggestions.