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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011 TOP SECRET – Sensitive  : to reconsider her entire policy with the possible view to cutting her losses and withdrawing from Indochina...looking into the future it was obvious...that France could not continue indefinitely to bear this burden alone if the expected developments in regard to increased assistance to Ho Chi Minh came about...."

Although the decision to extend aid to the French military effort in Indochina was taken before the outbreak of the Korean War, it clearly was heavily influenced by the fall of Nationalist China, and the arrival of Communist Chinese troops on the Indochina border in December, 1949. The Ho Chi Minh regime was recognized as the legal government of Vietnam by the Chinese Communists on January 18, 1950, and twelve days later the Soviet Government similarly announced its recognition. The NSC was thereupon asked "to undertake a determination of all practicable United States measures to protect its security in Indochina and to prevent the expansion of communist aggression in that area." In NSC 64 (February 27, 1950) it concluded that:


 * "It is important to United States security interests that all practicable measures be taken to prevent further communist expansion in Southeast Asia. Indochina is a key area of Southeast Asia and is under immediate threat.


 * "The neighboring countries of Thailand and Burma could be expected to fall under Communist domination if Indochina were controlled by a Communist-dominated government. The balance of Southeast Asia would then be in grave hazard."

The Joint Chiefs of Staff, referring on April 5, 1950, to intelligence estimates indicating that the situation in Southeast Asia had deteriorated, noted that "without United States assistance, this deterioration will be accelerated." Therefore, the rationale for the decision to aid the French was to avert Indochina's sliding into the communist camp, rather than aid for France as a colonial power or a fellow NATO ally.

U.S. assistance, which began modestly with $10 million in 1950, reached $1,063 million in fiscal year 1954, at which time it accounted for 78% of the cost of the French war burden. The major portion of the increase came in the last year of the war, following the presentation in 1953 of the Navarre Plan, which called for the enlargement of Franco–Vietnamese forces and a dynamic strategy to recapture the initiative and pave the way for victory by 1955. The optimistic endorsement of the Navarre Plan by Lt. General John W. O'Daniel, head of the MAAG in Indochina, as being capable of turning the tide and leading to a decisive victory over the Viet Minh contributed to Washington's agreement to substantially raise the level of assistance. But equally important, the Navarre Plan, by being a concrete proposal which Rh