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From O’Sullivan, James L. Memorandum on Preliminary Talks as to Indochina. As reproduced in Foreign Relations of the United States, 1949, vol. VII (Washington, D.C.: Government Printing Office, 1975), 86-89.

" France is faced with a very serious situation in Indochina because of the heavy financial strain it places on French budgetary equilibrium. French expenditures in Indochina would amount this year to almost 200 billion francs, approximately one-eighth of the total French budget.

He said that the French efforts to prevent Indochina from falling into Communist hands transcended and went far beyond French national interests since French action represented the hard core of resistance to Communist attempts to take over Indochina with a view ultimately to take over all of Southeast Asia. France was therefore fighting the battle of all the democratic powers and would need assistance to hold Indochina. He realized that it was politically impossible for the United States to give military aid to Indochina but there were forms of economic assistance which the United States could give. This assistance need not be given directly to France but be given to the three governments (the Vietnam state of Bao Dai which unites the three kys; Laos; and Cambodia) which France had established in Indochina. In this connection France had turned over a large measure of independence to these governments and was sponsoring a truly nationalist movement in Indochina so that these governments could win the support of the overwhelming majority of the inhabitants who were certainly not pro-Communist. He said that the Bao Dai agreements of March 8 did not represent a limit to the concessions which the French would eventually make and that France intended to follow an enlightened course looking to greater self-government. Mr. Schuman hoped that the United States also would support these independent governments.

In conclusion Schuman said he wished to point out that a number of people were perhaps laboring under the mistaken belief that if France got out of Indochina the native inhabitants would have a better chance of attaining real independence. This was an erroneous viewpoint since at the present time the three infant governments were incapable of succeeding alone and would need French military assistance to survive the Communist efforts to take over the country and would also need French technical assistance to arrive at a point where they could cope with their own internal problems of organization. In other words the presence of the French Army and French technical advisers was indispensable to the emergence of truly nationalist and independent states in Indochina. He reiterated that France intended to be most liberal in dealing with these governments so that gradually they could attain an increasing degree of independence. He said that in a sense France had been penalized for trying to hold the line against Communist efforts in Indochina since as a result thereof Indochina had been excluded from the benefits of the Marshall Plan.

The Secretary [of State Dean Acheson] replied that he was very glad to have had Mr. Schuman outline the French position to him and he was particularly glad to note that in many respects the French thinking was so close to our own. The Secretary said that he could not give Mr. Schuman any reply as to the question of what aid might be given to Indochina as he would have to study the matter very carefully. He said, however, that we realized that the presence of French troops and technical advisers in Indochina was indispensable at this stage of the game and for a considerable time to come and that we had never suggested that the French withdraw and abandon Indochina. The Secretary said that we fully recognized the importance of Indochina in connection with the whole Southeast Asia picture but that he did believe the French could play a great role in preventing Communist domination by moving quickly wherever possible to satisfy the truly nationalist aspirations of the inhabitants.

In connection with the question of what might be done for the governments in Indochina, the Secretary said he hoped the French Parliament would ratify the March 8 Agreements rapidly but he wished to mention that at present the French position seemed somewhat anomalous in that Indochinese affairs are now being administered by the French Ministry of Overseas Areas which did not seem consistent with the French statement that the governments are to a large degree independent. The Secretary said that he also thought it was most important that the other governments of Southeast Asia, particularly India, Burma and Siam, recognize the independent status of the Bao Dai government and in this connection the French could be helpful by giving greater independence to the Indochinese governments in their foreign relations. The Secretary said that at the present time and given conditions in Indochina he realized it might be difficult to give the Indochinese governments as much internal authority as was desirable but that in the field of foreign affairs there certainly appeared something that could be done. He said that if the United States and Great Britain rushed in to recognize the Bao Dai Government it might, in a sense, be the "kiss of death" to Bao Dai since certain Asian political leaders such as Nehru, might think that the United States and Great Britain were acting with imperialistic motives to insure continuing full French control and domination of Indochina. On the other hand the Secretary thought that the British might be helpful in getting the governments of India and Burma to recognize the Bao Dai Government and we would be disposed to do what we could to encourage the Governments of Southeast Asia to recognize the Indochinese nationalist government which had recently been established as a result of the March 8 Agreements.

Mr. Schuman said that he agreed with the Secretary and that he had already taken up with the French Cabinet the question of transferring responsibility for Indochina from the French Ministry of Overseas France to the French Foreign Office. While he hoped to be able to arrange for this it was difficult at the moment because of French internal considerations but that once the March 8 Agreements were ratified he thought it would be much easier and he hoped that this ratification would occur soon after the Parliament reconvened in October. Mr. Schuman said that he also agreed with the advisability of the other Southeast Asian governments recognizing Bao Dai."