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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011 TOP SECRET – Sensitive Bao Dai attempted at first to maintain a central position between the two protagonists, but was soon persuaded to decline the Viet Minh overtures by non-Communist nationalists. A group of these, including members of the Cao Dai, Hoa Hao, Dong Minh Hoi, Dai VetDai Viet [sic], and the VNQDD formed a National Union, and declared support for Bao Dai. One authority termed the National Union "a fragile coalition of discredited collaborators, ambitious masters of intrigue, incompetent sectarians, and a smattering of honest leaders without a following." Among the latter were Ngo Dinh Diem, who "for the first and only time, joined a party of which he was not the founder," and pledged to back the Emperor so long as he pursued, independence for Vietnam. Now, having eliminated the Viet Minh support option, Bao Dai became more compliant in his discussions with the French, and the French became correspondingly stiffer in their attitude toward the Viet Minh. Yet, little came of the talks. On December 7, 1947, aboard a French warship in Ha Long Bay, Bao Dai signed an accord with the French, committing the French to Vietnamese political independence so minimally that it was promptly condemned not only by Diem, but also by more opportunistic colleagues in the National Union. Bao Dai, in what might have been a political withdrawal, removed himself from the developing intrigue, and fled to European pleasure centers for a four month jaunt which earned him the sobriquet "night club emperor."

The French, despite lack of cooperation from their elusive Vietnamese principal, sent diplomats to pursue Bao Dai and publicized their resolve "to carry on, outside the Ho Chi Minh Government, all activities and negotiations necessary for the restoration of peace and freedom in the Vietnamese countries" — in effect, committing themselves to military victory and Bao Dai. French persistence eventually persuaded Bao Dai to return to Hong Kong, to endorse the formation of a Vietnamese national government prior to independence, and finally, to return to Vietnam as the Head of State. French negotiating pressures on him and the National Union included both spurious "leaks" of Franco–Viet Minh settlement talks, and further assurances of intentions to grant Vietnamese autonomy. On June 5, 1948, Bao Dai witnessed the signing of another Bay of Ha Long Agreement. Thereby, France publicly and "solemnly" recognized the independence of Vietnam — but specifically retained control over foreign relations and the Army, and deferred transfer of other governmental functions to future negotiations; no authority was in fact transferred to the Vietnamese. Again Bao Dai retired to Europe, while in Hanoi the French assembled a transparently impotent semblance of native government. A second summer of war passed in 1948 without dispelling the military miasma over Indochina, and without making the "Bao Dai solution" any less repugnant among Vietnamese patriots. Opposition to it began to mount among French Leftists. This disenchantment, combined with a spreading acceptance of the strategic view that the Franco–Viet Minh war was a key anti-Communist struggle, influenced French leaders to liberalize their approach to the "Bao Dai solution." Rh