Foreign Relations of the United States, 1952–1954, Indochina, Volume XIII, Part 1

751G.5 MSP/9–753: Telegram

The Secretary of State to the Embassy in France¹

top secret
priority

Washington, September 9, 1953—8:06 p.m.

868. Limit distribution.

1. Subject to our receiving necessary assurances from French, NSC today approved additional aid proposed for Indochina based on substance Deptel 827, with Presidential approval expected tomorrow. Comments urtels 939, 940, 941 fully taken into account in presentation to NSC.²

2. On most confidential basis you should therefore now informally advise Laniel and Bidault above action and indicate assurances desired are to effect that French Government is determined:

a. put promptly into effect program of action set forth its memorandum Sept 1;³

b. carry this program forward vigorously with object of eliminating regular enemy forces in Indochina;

c. continue pursue policy of perfecting independence of Associated States in conformity with July 3 declaration;

d. facilitate exchange information with American military authorities and take into account their views in developing and carrying out French military plans Indochina;

e. assure that no basic or permanent alteration of plans and programs for NATO forces will be made as result of additional effort Indochina;

f. provide appropriate info to US Govt of amount of expenditures for military program set forth in memo of Sept 1.

3. We would expect these assurances be embodied in note which US in reply would acknowledge. US reply would go on to make clear that:

a. appropriately established financial requirements for military program as indicated in Sept 1 memo from French Govt, not to exceed $385 million or its equivalent in Calendar Year 1954, will be met by US Govt (see para 8 below);

b. amount of $385 million or its equivalent in francs or piasters is deemed to satisfy in full request made by French memo of Sept 1;

c. no further financial assistance may be expected for Calendar Year 1954;

d. US Govt retains right to terminate this additional assistance should for any reason French Govt plan as outlined in memo of Sept 1 prove incapable of execution or should other unforeseen circumstances arise which negate the understandings arrived at between the two govts.

4. You should immediately begin informally to work out language with French covering paragraph 2 above. (We will cable soonest new draft of US reply.) It should be made crystal clear to French that final US Govt agreement will be given only when satisfactory language for exchange notes has been obtained.

5. During time you are working out exchange with French, Administration will inform interested leaders both houses Congress since new program involves important change in orientation foreign aid program as enacted by Congress. We have begun and will continue work on this phase of matter with greatest urgency and hope have it completed by time you wind up negotiations with French. Please impress on your French colleagues overriding necessity maintain complete secrecy on all aspects this matter until Congressional leaders informed and negotiations actually completed and notes exchanged between two govts.

6. It was agreed by NSC there should also be assurances from French Govt re intention move ahead on EDC, but that for various reasons such assurances need not necessarily be contained in formal notes exchanged between govts. Would like your current views on how most satisfactory assurances can best be obtained.

7. While procedures whereby payments to French or Associated States will be made will have to be worked out, it is important that French understanding clearly our basic approach to this additional aid—US is agreeing to finance a specific action program up to an agreed dollar figure. Consequently, we will pay or reimburse French or Associated States on basis of agreed franc and/or piaster expenditures as they occur at rates of exchange then current. US should receive benefit any reduced costs resulting from screening, devaluation, or other causes. Appropriate safeguards will be included in US note. FOA will forward details of suggested procedures shortly.

8. We have very serious problem finding 385 million and unless there are compelling reasons to contrary we would plan to release counterpart accruing Calendar Year 1954 (now estimated $70–80 million) to help meet total. Realize French may be counting on this counterpart for other purposes but trust you will be able reach agreement along these lines. This connection, would like to know lines French thinking on how they would present US aid figures to parliament, whether as separate amount outside regular French budget for 1954 or as item only on resources side as shown heretofore.

9. Will expect you keep us currently informed regarding negotiations on language of note.

10. Copy memo submitted NSC being pouched FYI. Copy NSC action paper will follow soonest. Will inform Heath separately of developments.

FYI, current planning envisages following MSP sources for $385 million:

1. $70–80 million MSA counterpart accruing in Calendar Year 1954;

2. Rescreening of Fiscal Year 1954 French MDAP program;

3. Rescreening of Fiscal Year 1954 Indochina MDAP program;

4. Transfer of Title I and possibly II MDAP funds from Defense to FOA (thereby possibly reducing amount of regular OSP that NATO countries including France could otherwise have received).

Dulles

1. Drafted by Edgar J. Beigel of the Office of Western European Affairs and William J. Galloway, Special Assistant to the Counselor, Douglas MacArthur II.
2. Telegram 827 to Paris, Sept. 5, containing the text of a draft memorandum to the French Government concerning additional U.S. aid for Indochina, is not printed. (751G.5 MSP/9–553) Regarding telegram 939 from Paris, Sept. 7, see footnote 1, p. 758. Telegram 940 from Paris, Sept. 7, transmitting technical comments on the draft memorandum contained in telegram 827 to Paris, is not printed. (751G.5 MSP/9–753) For text of telegram 941 from Paris, Sept. 7, see p. 758.
3. For text, see p. 770.