751G.5/3–1553: Telegram
The Ambassador at Saigon (Heath) to the Department of State
1796. Rptd info Paris unnumbered, Hanoi unnumbered. I called on President Tam March 13. Discussing the Mayer–Bidault–Letourneau visit to Washington Tam said the great problem of Vietnam was to find financial means further to increase Vietnamese National Army [Page 409] in 1954. The recruiting of 54 battalions in 1953 had already started. He had just signed an order to recruit an initial 10,000 men. I remarked that the additional cost in 1954 of these battalions would be something slightly over one billion piastres ($50 million). He stated that General Alessandri’s plans for 1954 called for recruiting 98 battalions more. They could be financed he asserted only by outside help. He had increased Vietnamese contribution to the military budget from one billion piastres to 1.7 billion piastres in 1952 and this year Vietnam would contribute 2.9 billion piastres.
I challenged his statement that this was the maximum that Vietnam could contribute saying that, if French and other interests would not oppose such action, increased or new taxes, such as a tax on financial transfers abroad, could be levied. He laughingly agreed to this saying that for more than a year he had thought about imposing a transfer tax but there would be firm opposition not only from French interests but from Bao Dai himself.
- 2.
- He objected to my observation that his agrarian reform program seemed to have stalled. It was true that only 30,000 hectares of large holdings had actually been sold to the tenants. But more and more big landlords were approaching him trying to sell their holdings to the state. He had told them to sell direct to the tenants and that the government would assist the tenants financially in making initial payments. The government had no funds to buy properties outright. He thought that many of the landlords would eventually make sale arrangements with their tenants. He could move only slowly toward agrarian reform because there were too many forces in opposition. Progress was, however, being made. For example in Bentre Province a cooperative had been formed which had negotiated agreements with the landlords reducing annual rentals to from 15 to 25 percent of the rice crop from the 40 or fifty percent previously charged.
- 3.
- He insisted that he was going ahead with his plans to form a National Assembly. The opposition of Bao Dai could be overcome. In his own interest and that of the monarchy Bao Dai could not delay too long in yielding to popular demand for a National Assembly, the more so since Bao Dai two years ago in his Tet message had promised the assembly. Only a national legislature could legalize the monarchy. As an initial step, he, Tam, still favored an indirectly elected assembly, the recently elected communal councils choosing representatives to provincial assemblies which in turn would name representatives to the national body. However it was possible that public opinion would insist on a directly elected national legislature. He was going to go to the north the end of the month and travel through the country and test public opinion on this and other subjects.
- 4.
- One of the purposes of his trip to the north was to take a look at the pilot operation of Governor Tri’s super-village project. He would not be convinced that the peasants were actually in favor of moving out of their hamlets into the new village until he had actually talked with them. Also there was the problem that the super-village project would be enormously expensive and the government simply did not have the funds. I told him that I had inspected the pilot village and I thought that from the standpoint of pacification of the delta the construction of a number of “strong villages” was imperatively desirable.