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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011 TOP SECRET – Sensitive :"...US is fully appreciative difficulties which face French Government in Indochina at this time and reminds him that US had already indicated its willingness, if French Government so desired, to give public indication its approval of concrete steps by French Government to come to grips with basic political problem of Indochina. I informed him that US also willing under similar circumstances to consider assisting French Government with respect to matter of financial aid for Indochina through ECA but could not give consideration to altering its present policy in this regard unless real progress made in reaching non-Communist solution in Indochina based on cooperation of true nationalists of that country."

As negotiations proceeded with Bao Dai preliminary to the Elysee Agreement, the Department of State instructed the American Ambassador in Paris, on 17 January 1949, that:


 * "While the Department is desirous of the French coming to terms with Bao Dai or any truly nationalist group which has a reasonable chance of winning over the preponderance of Vietnamese, we cannot at this time irretrievably commit the U.S. to support of a native government which by failing to develop appeal among Vietnamese might become virtually a puppet government separated from the people and existing only by the presence of French military forces."

Following the Edysee Agreement, the U.S. was better disposed toward providing aid in Indochina. On 10 May 1949, the American Consul in Saigon was informed that the U.S. desired the "Bao Dai experiment" to succeed, since there appeared to be no other alternative.


 * "At the proper time and under the proper circumstances, the Department will be prepared to do its part by extending recognition to the Bao Dai government and by expressing the possibility of complying with any request by such a government for U.S. arms and economic assistance. It must be understood, however, that an aid program of this nature would require Congressional approval. Since the U.S. could, however, scarcely afford backing a government which would have the color and be likely to suffer the fate of a puppet regime, it must be clear that France will offer all necessary concessions to make the Bao Dai solution attractive to the nationalists. This is a step of which the French themselves must see the urgency and necessity in view of the possibly short time remaining before Communist successes in China are felt in Indochina. Moreover, the Bao Dai government must through its own efforts demonstrate the capacity to organize and conduct affairs wisely so as to insure the maximum opportunity for obtaining requisite popular support, inasmuch as a government created in Indochina analogous to the Kuomintang would be foredoomed to failure."

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