751G.5/8–1453: Telegram
The Secretary of State to the Embassy at Saigon1
243. Limit distribution. In course discussions on Indochina in French Cabinet late July, stimulated by cut proposed by United States Senate Committee in aid program, Laniel had confidential talk with Dillon on basic policy French Government, including plans for Indochina. Laniel said decree powers Assembly gave him had imposed obligation take measures create conditions permitting France balance its budget. He stressed improvement in budgetary situation essential restore France to position of strength. Said policy also win war Indochina and for this prepared accept general principles Navarre plan, including transfer about nine battalions additional troops and cost additional Viet-Nam battalions. Emphasizing impossible carry out greater effort Indochina and improve budgetary situation without financial help he expressed view solution whole problem Indochina and French contribution to European and Atlantic communities depended on what additional aid available calendar year 1954.
Fully appreciating critical situation arising from growing French opinion favoring negotiation and withdrawal just when vigorous French leadership in both military and political spheres opens prospect (probably last chance) of victorious solution, Secretary sent MacArthur to Paris for further exchange of views. Laniel has emphasized necessity strict secrecy these exchanges. Laniel has expressed belief if United States could not provide necessary aid he would be succeeded by government which would withdraw from Indochina. Laniel has urged United States make advance commitment provide necessary assistance perhaps to extent 150 billion francs above presently contemplated levels.
[Page 724]Limitations on authority to make specific commitments funds have been explained to Laniel. Extent to which we can give assurances desired depends on decisions to be reached after State, Defense and Foreign Operations Administration have reviewed figures and justifications which French now urgently preparing and all sources of additional funds have been ascertained.
More detailed information being pouched you.
- Drafted by Bonsal and Day of PSA.↩